G.R. No. L-39514 July 27, 1988 ASUNCION BROS. & CO., INC.

, and JOSE ASUNCION, petitioners, vs. COURT OF INDUSTRIAL RELATIONS, JUAN B. CEPE, et al., respondents. Enrique O. Chan for petitioners. Basilio A. Carpio for private respondents. NARVASA, J.: In the case at bar, the defunct Court of Industrial Relations is shown to have sanctioned the disregard of the grievance procedure set forth in a collective bargaining agreement, and to have failed to take account of material evidence. It thereby incurred in serious error, impelling reversal of its decision. The petitioners, Asuncion Bros. & Co., Inc. and Jose Asuncion were charged with unfair labor practice in the C.I.R. by the Co urt Prosecutor, on complaint of certain of their employees and the latter's labor organization, the Asuncion Bros. Woodcraft Employees and Laborers Union. The complaint substantially alleged that because the individual complainants had organized a labor organization which later affiliated itself with the Philippine Transport and Gene ral Workers Organization (PTGWO)the company, thru its general manager, Jose Asuncion, had made the members work on rotation basis and eventually dismissed them on various dates. In their answer, the petitioners denied the accusation; they claimed that the rotation of workers was resorted to on account of circumstances beyond their control, not the least of which was the "systematic" acts of the complainants' absenting themselves at will, reporting late, and "moonlighting" with other firms; and they set up c ertain affirmative defenses including the failure of 1 the complaint to state a cause of action and the Court's lack of jurisdiction. Evidence was thereafter presented by the parties 2 before a Hearing Examiner in accordance with the procedure obtaining in the CIR. The Hearing Examiner found petitioners 3 guilty as charged and recommended that ... since respondent business firm ... is only a small and growing business entity which may not be in a position to immediately implement a return to work order of complainants, we respectfully recommend that reinstatement be gradual to minimize the Idea of economic dislocation by integrating a labor force that it cannot possibly absorb. This may be arranged by, say, two (2) complainants every month, depending on the need and exigency of the business. And considering further the precarious situation that may ensue because of anticipated award of huge amount of damages, which will eat up the assets of the respondents business and since some of the complainants have found casual or temporary employment elsewhere, the amount of backwages be limited to a period of six (6) months computed at the rate of the employees were enjoying at the time of their dismissal. ... This recommendation, and the factual and legal conclusions of the Hearing Examiner on which it was founded, were adopted by 4 the C.I.R. in its decision dated June 27, 1974. The C.I.R. thereafter also denied the petitioners' motion for reconsideration . The case is now before this Court on an appeal by certiorari seasonably taken by the petitioners. They seek to make two basic points: (1) the C.I.R. lost jurisdiction of the case on promulgation of the Labor Code (PD 442) on May 1, 1974, and (2) the judgment is not reasonably supported by the evidence. The first point is grounded on Article 338 of the Code providing that "All cases pending before the Court of Industrial Relations and the National Labor Relations Commission established under Presidential Decree No. 21 at the time of the passage of this Code should be transferred to and processed by the National Labor Relations Commission created under this Code in accordance with the procedure laid down herein." The petitioners set thepassage of the Code at May 1, 1974 and argue that the C.I.R. had already lost jurisdiction by the time it rendered judgment on June 27, 1974. The point is not well taken. 5 While it is true that the Labor Code was promulgated on May 1, 1974, it expressly provided that its effectivity would commence six months thereafter, or on November 1, 1974. Moreover, Article 338 relied upon by the petitioners was amended by PD 570-A by inter alia changing the work "passage" to "effectivity." The amendment made the provision read as follows: ... All cases. pending before the Court of Industrial Relations and the National Labor Relations Commission established under Presidential Decree No. 21 on the date of effectivity of this Code shall be transferred to and processed by the corresponding labor relations division of the regional labor office, the Bureau of Labor Relations or the National Labor Relations Commission created under this Code having cognizance of the same in accordance with the procedure laid down herein, and implementing rules and regulations. ... 6 And the date of effectivity of the Code, fixed at November 1, 1974, as above stated, was reaffirmed by PD 570-A. There can thus be no doubt that the Labor Court still had jurisdiction of the case at the time it rendered its judgment on June 27, 1974. As the Court sees it, the error of the Labor Court lies in its omission to take account of relevant evidence on record and the quite material fact that the employees and their union had completely disregard the grievance procedure set forth in their collective bargaining agreement with the petitioner company. The Court a quo ignored the evidence given by two impartial witnesses: Gilbert Tumlos personnel manager of Permaline and Eustaquio Kerr, manager of Kawayan Woodcraft, who both testified to the employment of a majority of the complainants in 7 their respective firms. Their sworn declarations are fully corroborative and confirmatory of the testimony of the petitioners' 8 witnesses, as well as the documents listing the names of those workers whose employment had been terminated, the specific infractions of company rules constituting the respective causes therefor, and the dates of the commission of said

infractions. No reason is given by the Court for refusing to take account of such material proofs, and none in truth appears on record to justify it. The evidence satisfactorily establishes the petitioners' claim that their woodcraft plant 44 operates under an integrated assembly fine system ([where] assignments [are integrated: e.g.] pattern, cutting, carving, lathe machine, disc sanding, spindle sanding, drum sanding, varnishing and finishing, packing). Failure of one unit or set of workers to perform in time its assigned functions hampers the whole operation and will cause stoppage of work, to the damage and prejudice of the 10 enterprise, a small and budding one at that." The record thus contains adequate evidentiary foundation for the dismissal of the complainants from employment, a circumstance that at the time constitutes persuasive refutation of the theory that said complainants were fired simply because of their union activities. Further disclosed by the record is the disregard by the complainant employees and their union of the grievance procedure 11 prescribed in their collective bargaining agreement with the employer, dated February 19, 1969. Article XII of that agreement states that In the event that grievances or differences arise between the Union and the Company or between a worker or group of workers on the one hand and the Company on the other, as regards the application, implementation of this agreement, or other differences which any of the parties desire to resolve, the Company and the Union shall take immediate steps to settle the difference in the following manner: 1. A grievance committee composed of four (4) members shall be created, two (2) of which shall come from the Company and the other two (2) .... from the Union. Any grievance shall be resolved by the said committee within two (2) days after the grievance is submitted to them. 2. In case of disagreement, parties agree to submit the differences to the Bureau of Labor Relations, Department of Labor, for resolution. 3. If it cannot be resolved by the Bureau of Labor Relations, then the case may be submitted to an arbitrator agreed upon by both the Company and the Union whose decision shall be final and unappealable. 4. If however the parties cannot agree to arbitration, then the same shall be considered as a labor dispute. No reason whatever is given by the Union and the other complainants for ignoring this procedure for the settlement of their grievance relating to their work rotation which, as petitioners have pointed out, could have been "easily threshed out in the 12 Grievance Committee," or their subsequent dismissal from their employment. The collective bargaining agreement was, of 13 course, the law between the parties and the refusal to comply therewith is a violation of the duty to bargain collectively, 14 constituting unfair labor practice on the part of a union. It thus seems that it was not the petitioners, but the employees and their union, against whom the charge of unfair labor practice might properly have been laid in this case. In any event, there is nothing in the record warranting condemnation of the petitioners for unfair labor practice in having terminated the employment of the complainants, such termination of work being, on the contrary, justified by the material circumstances. WHEREFORE, the judgment of the Court a quo is REVERSED AND SET ASIDE and another entered, absolving the petitioners from any unfair labor practice or any liability to the private respondents. No costs. Cruz, Gancayco, Aquino and Medialdea, JJ., concur.

THIRD DIVISION [G.R. No. 157010. June 21, 2005] PHILIPPINE NATIONAL BANK, petitioner, vs. FLORENCE O. CABANSAG, respondent. DECISION PANGANIBAN, J.: The Court reiterates the basic policy that all Filipino workers, whether employed locally or overseas, enjoy the protective m antle of Philippine labor and social legislations. Our labor statutes may not be rendered ineffective by laws or judgments promulgated, or stipulations agreed upon, in a foreign country. The Case [1] Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to reverse and set aside the July 16, [2] [3] 2002 Decision and the January 29, 2003 Resolution of the Court of Appeals (CA) in CA-GR SP No. 68403. The assailed Decision dismissed the CA Petition (filed by herein petitioner), which had sought to reverse th e National Labor Relations Commission (NLRC) s June 29, 2001 Resolution,[4] affirming Labor Arbiter Joel S. Lustria s January 18, 2000 Decision. [5] The assailed CA Resolution denied herein petitioner s Motion for Reconsideration. The Facts The facts are narrated by the Court of Appeals as follows: In late 1998, [herein Respondent Florence Cabansag] arrived in Singapore as a tourist. She applied for employment, with the Singapore Branch of the Philippine National Bank, a private banking corporation organized and existing under the laws of the Philippines, with principal offices at the PNB Financial Center, Roxas Boulevard, Manila. At the time, the Singapore PNB Branch was under the helm of Ruben C. Tobias, a lawyer, as General Manager, with the rank of Vice-President of the Bank. At the time, too, the Branch Office had two (2) types of employees: (a) expatriates or the regular employees, hired in Manila and assigned abroad including Singapore, and (b) locally (direct) hired. She applied for employment as Branch Credit Officer, at a total monthly package of $SG4,500.00, effective upon assumption of duties after approval. Ruben C. Tobias found her eminently qualified and wrote on October 26, 1998, a letter to the President of the Bank in Manila, recommending the appointment of Florence O. Cabansag, for the position. xxx xxx xxx The President of the Bank was impressed with the credentials of Florence O. Cabansag that he approved the recommendation of Ruben C. Tobias. She then filed an Application, with the Ministry of Manpower of the Government of Singapore, for the issuance of an Employment Pass as an employee of the Singapore PNB Branch. Her application was approved for a period of two (2) years. On December 7, 1998, Ruben C. Tobias wrote a letter to Florence O. Cabansag offering her a temporary appointment, as Credit Officer, at a basic salary of Singapore Dollars 4,500.00, a month and, upon her successful completion of her probation to be determined solely, by the Bank, she may be extended at the discretion of the Bank, a permanent appointment and that her temporary appointment was subject to the following terms and conditions: 1. You will be on probation for a period of three (3) consecutive months from the date of your assumption of duty. 2. You will observe the Bank s rules and regulations and those that may be adopted from time to time. 3. You will keep in strictest confidence all matters related to transactions between the Bank and its clie nts. 4. You will devote your full time during business hours in promoting the business and interest of the Bank. 5. You will not, without prior written consent of the Bank, be employed in anyway for any purpose whatsoever outside business hours by any person, firm or company. 6. Termination of your employment with the Bank may be made by either party after notice of one (1) day in writing during probation, one month notice upon confirmation or the equivalent of one (1) day s or month s salary in lieu of notice. Florence O. Cabansag accepted the position and assumed office. In the meantime, the Philippine Embassy in Singapore processed the employment contract of Florence O. Cabansag and, on March 8, 1999, she was issued by the Philippine Overseas Employment Administration, an Overseas Employment Certificate, certifying that she was a bona fide contract worker for Singapore. xxx xxx xxx Barely three (3) months in office, Florence O. Cabansag submitted to Ruben C. Tobias, on March 9, 1999, her initial Performance Report. Ruben C. Tobias was so impressed with the Report that he made a notation and, on said Report : GOOD WORK. However, in the evening of April 14, 1999, while Florence O. Cabansag was in the flat, which she and Cecilia Aquino, the Assistant Vice-President and Deputy General Manager of the Branch and Rosanna Sarmiento, the Chief Dealer of the said Branch, rented, she was told by the two (2) that Ruben C. Tobias has asked them to tell Florence O. Cabansag to resign from her job. Florence O. Cabansag was perplexed at the sudden turn of events and the runabout way Ruben C. Tobias procured her resignation from the Bank. The next day, Florence O. Cabansag talked to Ruben C. Tobias and inquired if what Cecilia Aquino and Rosanna Sarmiento had told her was true. Ruben C. Tobias confirmed the veracity of the information, with the explanation that her resignation was imperative as a cost-cutting measure of the Bank. Ruben C. Tobias, likewise, told Florence O. Cabansag that the PNB Singapore Branch will be sold or transformed into a remittance office and that, in either way, Flore nce O. Cabansag had to resign from her employment. The more Florence O. Cabansag was perplexed. She then asked Ruben C.

Tobias that she be furnished with a Formal Advice from the PNB Head Office in Manila. However, Ruben C. Tobias flatly refused. Florence O. Cabansag did not submit any letter of resignation. On April 16, 1999, Ruben C. Tobias again summoned Florence O. Cabansag to his office and demanded that she submit her letter of resignation, with the pretext that he needed a Chinese-speaking Credit Officer to penetrate the local market, with the information that a Chinese-speaking Credit Officer had already been hired and will be reporting for work soon. She was warned that, unless she submitted her letter of resignation, her employment record will be blemished with the notation DISMISSED spread thereon. Without giving any definitive answer, Florence O. Cabansag asked Ruben C. Tobias that she be given sufficient time to look for another job. Ruben C. Tobias told her that she should be out of her employment by May 15, 1999. However, on April 19, 1999, Ruben C. Tobias again summoned Florence O. Cabansag and adamantly ordered her to submit her letter of resignation. She refused. On April 20, 1999, she received a letter from Ruben C. Tobias terminating her employment with the Bank. xxx xxx xxx On January 18, 2000, the Labor Arbiter rendered judgment in favor of the Complainant and against the Respondents, the decretal portion of which reads as follows: WHEREFORE, considering the foregoing premises, judgment is hereby rendered finding respondents guilty of Illegal dismissal and devoid of due process, and are hereby ordered: 1. To reinstate complainant to her former or substantially equivalent position without loss of seniority rights, benefits and privileges; 2. Solidarily liable to pay complainant as follows: a) To pay complainant her backwages from 16 April 1999 up to her actual reinstatement. Her backwages as of the date of the promulgation of this decision amounted to SGD 40,500.00 or its equivalent in Philippine Currency at the time of payment; b) Mid-year bonus in the amount of SGD 2,250.00 or its equivalent in Philippine Currency at the time of payment; c) Allowance for Sunday banking in the amount of SGD 120.00 or its equivalent in Philippine Currency at the time of payment; d) Monetary equivalent of leave credits earned on Sunday banking in the amount of SGD 1,557.67 or its equivalent in Philippine Currency at the time of payment; e) Monetary equivalent of unused sick leave benefits in the amount of SGD 1,150.60 or its equivalent in Philippine Currency at the time of payment. f) Monetary equivalent of unused vacation leave benefits in the amount of SGD 319.85 or its equivalent in Philippine Currency at the time of payment. th g) 13 month pay in the amount of SGD 4,500.00 or its equivalent in Philippine Currency at the time of payment; 3. Solidarily to pay complainant actual damages in the amount of SGD 1,978.00 or its equivalent in Philippine Currency at the time of payment, and moral damages in the amount of PhP 200,000.00, exemplary damages in the amount of PhP 100,000.00; 4. To pay complainant the amount of SGD 5,039.81 or its equivalent in Philippine Currency at the time of payment, representing attorney s fees. [6] SO ORDERED. [Emphasis in the original.] PNB appealed the labor arbiter s Decision to the NLRC. In a Resolution dated June 29, 2001, the Commission affirmed that Decision, but reduced the moral damages to P100,000 and the exemplary damages to P50,000. In a subsequent Resolution, the NLRC denied PNB s Motion for Reconsideration. Ruling of the Court of Appeals In disposing of the Petition for Certiorari, the CA noted that petitioner bank had failed to adduce in evidence the Singaporean law supposedly governing the latter s employment Contract with respondent. The appellate court found that the Contract had actually been processed by the Philippine Embassy in Singapore and approved by the Philippine Overseas Employment Administration (POEA), which then used that Contract as a basis for issuing an Overseas Employment Certificate in favor of respondent. According to the CA, even though respondent secured an employment pass from the Singapore Ministry of Employment, she did not thereby waive Philippine labor laws, or the jurisdiction of the labor arbiter or the NLRC over her Complaint for illegal dismissal. In so doing, neither did she submit herself solely to the Ministry of Manpower of Singapore s jurisdiction over disputes arising from her employment. The appellate court further noted that a cursory reading of the Ministry s letter will readily show that no such waiver or submission is stated or implied. Finally, the CA held that petitioner had failed to establish a just cause for the dismissal of respondent. The bank had also failed to give her sufficient notice and an opportunity to be heard and to defend herself. The CA ruled that she was consequently entitled to reinstatement and back wages, computed from the time of her dismissal up to the time of her reinstatement. Hence, this Petition. [7] Issues Petitioner submits the following issues for our consideration: 1. Whether or not the arbitration branch of the NLRC in the National Capital Region has jurisdiction over the instant controversy; 2. Whether or not the arbitration of the NLRC in the National Capital Region is the most convenient venue or forum to hear and decide the instant controversy; and

3. Whether or not the respondent was illegally dismissed, and therefore, entitled to recover moral and exemplary damages [8] and attorney s fees. [9] In addition, respondent assails, in her Comment, the propriety of Rule 45 as the procedural mode for seeking a review of the CA Decision affirming the NLRC Resolution. Such issue deserves scant consideration. Respondent miscomprehends the Court s [10] discourse in St. Martin Funeral Home v. NLRC, which has indeed affirmed that the proper mode of review of NLRC decisions, resolutions or orders is by a special civil action for certiorari under Rule 65 of the Rules of Court. The Supreme Court and the Court of Appeals have concurrent original jurisdiction over such petitions for certiorari. Thus, in observance of the doctrine on [11] the hierarchy of courts, these petitions should be initially filed with the CA. Rightly, the bank elevated the NLRC Resolution to the CA by way of a Petition for Certiorari. In seeking a review by this Court of the CA Decision -- on questions of jurisdiction, venue and validity of employment termination -- petitioner is likewise correct in [12] invoking Rule 45. It is true, however, that in a petition for review on certiorari, the scope of the Supreme Court s judicial review of decisions of the Court of Appeals is generally confined only to errors of law. It does not extend to questions of fact. This doctrine applies with greater force in labor cases. Factual questions are for the labor tribunals to resolve. [13] In the present case, the labor arbiter and the NLRC have already determined the factual issues. Their findings, which are supported by substantial evidence, were affirmed by the CA. Thus, they are entitled to great respect and are rendered conclusive upon this Court, absent a clear showing [14] of palpable error or arbitrary disregard of evidence. The Court s Ruling The Petition has no merit. First Issue: Jurisdiction The jurisdiction of labor arbiters and the NLRC is specified in Article 217 of the Labor Code as follows: ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: 1. Unfair labor practice cases; 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wage, rates of pay, hours of work and other terms and conditions of employment 4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and locko uts; and 6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount of exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. (b) The commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. xxx xxx x x x. More specifically, Section 10 of RA 8042 reads in part: SECTION 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer -employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. xxx xxx xxx Based on the foregoing provisions, labor arbiters clearly have original and exclusive jurisdiction over claims arising from employer-employee relations, including termination disputes involving all workers, among whom are overseas Filipino workers [15] (OFW). We are not unmindful of the fact that respondent was directly hired, while on a tourist status in Singapore, by the PNB branc h in that city state. Prior to employing respondent, petitioner had to obtain an employment pass for her from the Singapore Ministry [16] of Manpower. Securing the pass was a regulatory requirement pursuant to the immigration regulations of that country. Similarly, the Philippine government requires non-Filipinos working in the country to first obtain a local work permit in order to be legally employed here. That permit, however, does not automatically mean that the non-citizen is thereby bound by local laws only, as averred by petitioner. It does not at all imply a waiver of one s national laws on labor. Absent any clear and convincing evidence to the contrary, such permit simply means that its holder has a legal status as a worker in the issuing country. Noteworthy is the fact that respondent likewise applied for and secured an Overseas Employment Certificate from the POEA through the Philippine Embassy in Singapore. The Certificate, issued on March 8, 1999, declared her a bona fide contract worker for Singapore. Under Philippine law, this document authorized her working status in a foreign country and entitled her to all benefits and processes under our statutes. Thus, even assuming arguendo that she was considered at the start of her

employment as a direct hire governed by and subject to the laws, common practices and customs prevailing in [17] Singapore she subsequently became a contract worker or an OFW who was covered by Philippine labor laws and policies upon certification by the POEA. At the time her employment was illegally terminated, she already possessed the POEA employment Certificate. Moreover, petitioner admits that it is a Philippine corporation doing business through a branch office in [18] Singapore. Significantly, respondent s employment by the Singapore branch office had to be approved by Benjamin P. Palma [19] Gil, the president of the bank whose principal offices were in Manila. This circumstance militates against petitioner s contention that respondent was locally hired ; and totally governed by and subject to the laws, common practices and customs of Singapore, not of the Philippines. Instead, with more reason does this fact reinforce the presumption that respondent falls under the legal definition of migrant worker, in this case one deployed in Singapore. Hence, petitioner cannot escape the application of Philippine laws or the jurisdiction of the NLRC and the labor arbiter. [20] In any event, we recall the following policy pronouncement of the Court in Royal Crown Internationale v. NLRC: x x x. Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the basic public po licy of the State to afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. For the State assures the basic rights of all workers to sel forganization, collective bargaining, security of tenure, and just and humane conditions of work [Article 3 of the Labor Code of the Philippines; See also Section 18, Article II and Section 3, Article XIII, 1987 Constitution]. This ruling is likewise rendered imperative by Article 17 of the Civil Code which states that laws which have for their object public order, public p olicy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determination or conventions agreed upon in a foreign country. Second Issue: Proper Venue Section 1(a) of Rule IV of the NLRC Rules of Procedure reads: Section 1. Venue (a) All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complainant/petitioner; Provided, however that cases of Overseas Filipino Worker (OFW) shall be filed before the Regional Arbitration Branch where the complainant resides or where the principal office of the respondent/employer is situated, at the option of the complainant. For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. It shall include the place where the employee is supposed to report back after a temporary detail, assignment or travel. In the case of field employees, as well as ambulant or itinerant workers, their workplace is where they are regularly assigned, or where they are supposed to regularly receive their salaries/wages or work instructions from, and report the results of their assignment to their employers. Under the Migrant Workers and Overseas Filipinos Act of 1995 (RA 8042), a migrant worker refers to a person who is to be engaged, is engaged or has been engaged in a remunerated activity in a state of which he or she is not a legal resident; to be [21] used interchangeably with overseas Filipino worker. Undeniably, respondent was employed by petitioner in its branch office in Singapore. Admittedly, she is a Filipino and not a legal resident of that state. She thus falls within the category of migrant worker or overseas Filipino worker. As such, it is her option to choose the venue of her Complaint against petitioner for illegal dismissal. The law gives her two choices: (1) at the Regional Arbitration Branch (RAB) where she resides or (2) at the RAB where the principal office of her employer is situated. Since her dismissal by petitioner, respondent has returned to the Philippines -- specifically to her residence at Filinvest II, Quezon City. Thus, in filing her Complaint before the RAB office in Quezon City, she has made a valid choice of proper venue. Third Issue: Illegal Dismissal The appellate court was correct in holding that respondent was already a regular employee at the time of her dismissal, because her three-month probationary period of employment had already ended. This ruling is in accordance with Article 281 of the Labor Code: An employee who is allowed to work after a probationary period shall be considered a regular employee. Indeed, petitioner recognized respondent as such at the time it dismissed her, by giving her one month s salary in lieu of a one -month notice, consistent with provision No. 6 of her employment Contract. Notice and Hearing Not Complied With As a regular employee, respondent was entitled to all rights, benefits and privileges provided under our labor laws. One of her fundamental rights is that she may not be dismissed without due process of law. The twin requirements of notice and hearing constitute the essential elements of procedural due process, and neither of these elements can be eliminated without running afoul of the constitutional guarantee. [22] In dismissing employees, the employer must furnish them two written notices: 1) one to apprise them of the particular acts or omissions for which their dismissal is sought; and 2) the other to inform them of the decision t o dismiss them. As to the [23] requirement of a hearing, its essence lies simply in the opportunity to be heard.

The evidence in this case is crystal-clear. Respondent was not notified of the specific act or omission for which her dismissal was being sought. Neither was she given any chance to be heard, as required by law. At any rate, even if she were given the opportunity to be heard, she could not have defended herself effectively, for she knew no cause to answer to. All that petitioner tendered to respondent was a notice of her employment termination effective the very same day, together with the equivalent of a one-month pay. This Court has already held that nothing in the law gives an employer the option to [24] substitute the required prior notice and opportunity to be heard with the mere payment of 30 days salary. Well-settled is the rule that the employer shall be sanctioned for noncompliance with the requirements of, or for failure to [25] observe, due process that must be observed in dismissing an employee. No Valid Cause for Dismissal [26] [27] [28] Moreover, Articles 282, 283 and 284 of the Labor Code provide the valid grounds or causes for an employee s dismissal. The employer has the burden of proving that it was done for any of those just or authorized causes. The failure to discharge this [29] burden means that the dismissal was not justified, and that the employee is entitled to reinstatement and back wages. Notably, petitioner has not asserted any of the grounds provided by law as a valid reason for terminating the employment of respondent. It merely insists that her dismissal was validly effected pursuant to the provisions of her employment Contract, which she had voluntarily agreed to be bound to. Truly, the contracting parties may establish such stipulations, clauses, terms and conditions as they want, and their agreement would have the force of law between them. However, petitioner overlooks the qualification that those terms and conditions [30] agreed upon must not be contrary to law, morals, customs, public policy or public order. As explained earlier, the employment Contract between petitioner and respondent is governed by Philippine labor laws. Hence, the stipulations, clauses, and terms and conditions of the Contract must not contravene our labor law provisions. Moreover, a contract of employment is imbued with public interest. The Court has time and time again reminded parties that they are not at liberty to insulate themselves and their relationships from t he impact of labor laws and regulations by simply [31] Also, while a contract is the law between the parties, the provisions of p ositive law that regulate contracting with each other. [32] such contracts are deemed included and shall limit and govern the relations between the parties. Basic in our jurisprudence is the principle that when there is no showing of any clear, valid, and legal cause for the termination [33] of employment, the law considers the matter a case of illegal dismissal. Awards for Damages Justified Finally, moral damages are recoverable when the dismissal of an employee is attended by bad faith or constitutes an act [34] oppressive to labor or is done in a manner contrary to morals, good customs or public policy. Awards for moral and exemplary [35] damages would be proper if the employee was harassed and arbitrarily dismissed by the employer. In affirming the awards of moral and exemplary damages, we quote with approval the following ratiocination of the labor arbiter: The records also show that [respondent s] dismissal was effected by [petitioners ] capricious and high-handed manner, antisocial and oppressive, fraudulent and in bad faith, and contrary to morals, good customs and public policy. Bad faith and fraud are shown in the acts committed by [petitioners] before, during and after [respondent s] dismissal in addition to the manner by which she was dismissed. First, [respondent] was pressured to resign for two different and contradictory reasons, namely, costcutting and the need for a Chinese[-]speaking credit officer, for which no written advice was given despite complainant s request. Such wavering stance or vacillating position indicates bad faith and a dishonest purpose. Second, she was employed on account of her qualifications, experience and readiness for the position of credit officer and pressured to resign a month after she was commended for her good work. Third, the demand for [respondent s] instant resignation on 19 April 1999 to give way to her replacement who was allegedly reporting soonest, is whimsical, fraudulent and in bad faith, because on 16 April 1999 she was given a period of [sic] until 15 May 1999 within which to leave. Fourth, the pressures made on her to resign were highly oppressive, anti-social and caused her absolute torture, as [petitioners] disregarded her situation as an overseas worker away from home and family, with no prospect for another job. She was not even provided with a return trip fare. Fifth, the notice of termination is an utter manifestation of bad faith and whim as it totally disregards [respondent s] right to security of tenure and due process. Such notice together with the demands for [respondent s] resignation contravenes the fundamental guarantee and public policy of the Philippine government on security of tenure. [Respondent] likewise established that as a proximate result of her dismissal and prior demands for resignation, she suffered and continues to suffer mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock and social humiliation. Her standing in the social and business community as well as prospects for employment with other entities have been adversely affected by her dismissal. [Petitioners] are thus liable for moral damages under Article 2217 of the Civil Code. xxx xxx xxx [Petitioners] likewise acted in a wanton, oppressive or malevolent manner in terminating [respondent s] employment and are therefore liable for exemplary damages. This should served [sic] as protection to other employees of [petitioner] company, and by way of example or correction for the public good so that persons similarly minded as [petitioners] would be deterred from [36] committing the same acts.

The Court also affirms the award of attorney s fees. It is settled that when an action is instituted for the recovery of wages, or when employees are forced to litigate and consequently incur expenses to protect their rights and interests, the grant of [37] attorney s fees is legally justifiable. WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Costs against petitioner. SO ORDERED. Sandoval-Gutierrez, Corona, Carpio-Morales, and Garcia, JJ., concur.

G.R. No. 89222. April 7, 1993. CARMEN SANTOS, petitioner, vs. EMPLOYEES' COMPENSATION COMMISSION and GOVERNMENT SERVICE INSURANCE SYSTEM (Philippine Navy), respondents. Public Attorney's Office for petitioner. The Government Corporate Counsel for the Government Service Insurance System. SYLLABUS 1. LABOR AND SOCIAL LEGISLATION; EMPLOYEES COMPENSATION; COMPENSABLE SICKNESS; DEFINED. The law defines compensable sickness as any illness definitely accepted as occupational disease listed by the Commission, or any illness caused by employment subject to proof that the risk of contracting the same is increased by the working conditions. For sickness and the resulting death of an employee to be compensable, the claimant must show either: (1) that it is a result of an occupation al disease listed under Annex A of the Amended Rules on Employees' Compensation with the conditions set therein satisfied: or (2) if not so listed, that the risk of contracting the disease is increased by the working conditions. 2. ID.; ID.; ID.; RULE WHEN AN ILLN ESS IS NOT LISTED IN THE TABLE OCCUPATIONAL DISEASES; CASE AT BAR. Where the claimant's illness is not listed in the Table of Occupational Diseases embodied in Annex A of the Rules on Employees' Compensation, said claimant must positively prove that the risk of contracting the disease is increased by the working conditions. Cirrhosis of the liver is not listed as an occupational disease. Nevertheless, in the very recent case of Librea v. Employees' Compensation Commission (G.R. No. 58879, 203 SCRA 545 [119]). We do not pretend to be an expert in the realm of medical discipline. However, We cannot discount the fact that the cause of death of petitioner's husband could very well be related to his previous working conditions. Even the Commission volunteered the theory that post necrotic cirrhosis show that of the many types of advanced liver injury, one cause may be due to toxins. As a welder, Francisco was exposed to heat, gas fumes and chemical substances coming from the burning electrodes caused by welding. Generally, the metal burned is iron. In the course thereof, other compounds and oxides, such as carbon monoxide, carbon dioxide, sulfur and phosphorus, may be emitted in the process of welding, depending on the kind of material used and extend of corrosion of the metal worked on. These vaporized metals are inhaled by the welder in the process and significantly in this case, Francisco had to do welding j obs within enclosed compartments. Research shows that ingestion or inhalation of small amounts of iron over a number of years may lead to siderosis. Acute poisoning brings about circulatory collapse which may occur rapidly or be delayed to 48 hours with liver failure. These are industrial hazards to which Francisco was exposed. And in the long course of time, 32 years at that, his continuous exposure to burned electrodes and chemicals emitted therefrom would likely cause poisoning and malfunction of the liver. 3. ID.; ID.; DOCTRINE OF COMPENSABILITY; EXPLAINED. The leading doctrine on compensability is that laid down in the case of Raro v. Employees' Compensation Commission, where this court said "There is a widespread misconception that the poor employee is still arrayed against the might and power of his rich corporate employer. Hence, he must be given all kinds of favorable presumptions. This is fallacious. It is now the trust fund and not the employer which suffers if benefits are paid to claimants who are not entitled under the law. The employer joins the employee in trying to have their claims approved. The employer is spared the problem of proving a negative proposition that the disease was not caused by employment." The decision of this Court in Raro v. ECC (172 SCRA 845) in effect supersedes the cases with conclusions different from that stated therein, such as Nemaria v. ECC, 155 SCRA 166 (1987); Ovenson v. ECC, 156 SCRA 21 (1987); Mercado v. ECC, 127 SCRA 664 (1984). The reason behind the present doctrine is that the New Labor Code has abolished the presumption of compensability for illness contracted by a worker during employment. To be entitled to disability benefits, the claimant has to present evidence to prove that his ailment was the result of, or the risk of contracting the same were aggravated by working conditions or the na ture of his work. 4. ID.; ID.; PROVISIONS THEREIN SHALL BE RESOLVED IN FAVOR OF LABOR. While the presumption of compensability and theory of aggravation under the Workmen's Compensation Act may have been abandoned under the new Labor Code, the liberality of the law in general in favor of the working man still prevails. The Employees' Compensation Act is basically a social legislation designed to afford relief to the working man and woman in our society. The Employees' Compensation Commission, as the agency tasked with implementing the social justice mandate guaranteed by the Constitution, should be more liberal in resolving compensation claims of employees especially where there is some basis in the facts for inferring a work connection to the cause of death. this interpretation gives meaning and substance to the liberal and compassionate spirit of the law as embodied in Article 4 of the New Labor Code which states that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor. The policy is to extend the applicability of PD 626 to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the state to give maximum aid and protection to labor. DECISION NOCON, J p: Is liver cirrhosis an illness which is compensable? This is the question put forth by petitioner, Carmen Santos, whose husban d died of liver cirrhosis while still a civilian employee of the Philippine Navy. Francisco Santos was employed as welder at the Philippine Navy and its Naval Shipyard as early as March 22, 1955. He spent th e last 32 years of his life in the government service, the first year as a welder helper and the last two y ears as shipyard assistant.

On December 29, 1986, Francisco was admitted at the Naval Station Hospital in Cavite City, on complaint that he was having epigastric pain and been vomiting blood 2 days prior to his hospitalization. His case was diagnosed as bl eeding Peptic Ulcer disease (PUD), cholelithiasis and diabetes mellitus. On January 11, 1987, he died, the cause of which as indicated in the Dea th Certificate was liver cirrhosis. Mrs. Carmen A. Santos filed a claim for the death benefit of her husband, Francisco, on January 28, 1987, pursuant to Presidential Decree No. 626, as amended. However, on a letter dated April 30, 1987, the Government Service Insurance System (GSIS), denied the claim on the ground that upon proofs and evidence submitted, Francisco's ailment cannot be considered an occupational disease as contemplated under P.D. 626, as amended. Mrs. Santos then sought the assistance of the Commander of NASCOM, PN, who in turn wrote the GSIS requesting for a favorable action on her claim. Said letter also substantiated petitioner's claim that her husband's duties as Senior Welder, assigned at the Structural Branch of the Naval Shipbuilding Facility, required him to perform delicate welding jobs inside compartments of naval vessels, like compartmentation bulk heads; CIC rooms; officers and PO's quarters; fuel, lube oil and fresh water tanks, where he was exposed to heat and inhalation of burning chemical substances and gas fumes coming from burning welding electrodes. Despite such endorsement, petitioner's motion for reconsideration was likewise denied, upon claim of the GSIS that Francisco's job as a welder would instead cause lung disease rather than liver cirrhosis. On appeal to the Employees' Compensation Commission (ECC), the Commission affirmed the denial of the GSIS on petitioner's claim relying on the fact that the diagnosis on Francisco's illness did not specify the type of cirrhosis which caused his de ath. Nevertheless, the Commission took cognizant of the fact that the deceased employee did not have a previous history of alcoholism, hepatitis or a previous history of biliary condition which could give a clue to the nature of cirrhosis he had. We find merit in this petition. The law defines compensable sickness as any illness definitely accepted as occupational disease listed by the Commission, or any illness caused by employment subject to proof that the risk of contracting the same is increased by the working conditions. For sickness and the resulting death of an employee to be compensable, the claimant must show either: (1) that it is a result of an occupational disease listed under Annex A of the Amended Rules on Employees' Compensation with the conditions set therein satisfied; or (2) if not so listed, that the risk of contracting the disease is increased by the working conditions. 1 Where the claimant's illness is not listed in the Table of Occupational Diseases embodied in Annex A of the Rules of Employee s' Compensation, said claimant must positively prove that the risk of contracting the disease is increased by the working conditions. 2 Cirrhosis of the liver is not listed as an occupational disease. Nevertheless, in the very recent case of Librea v. Employees ' Compensation Commission 3 We took a liberal stand and based on the evidence presented, pronounced the said sickness compensable. In the cited case, a Division Physical Education Supervisor, who likewise spent the last 32 years of his life in public service was adjudged entitled to the benefits of the ECC, upon his death due to liver cirrhosis. In the said case, the ECC denied the claim of the heirs on the ground that the abundant stress and strain experienced by the deceased employee were too farfetched to cause the development of liver cirrhosis. According to the medical research made by the Commission in the case, portal cirrhosis or cirrhosis of the liver occurs chiefly in males in their late middle life. Mal nutrition is believed to be a predisposing factor if not the primary etiologic factor, and may account for its prevalence among alcoholics. This chronic disease characterized by increased connective tissue that spreads from the portal spaces, distorts the liver architecture thereby impairing liver functions. 4 In granting the petition, the Court correlated the fact that the deceased experienced untold sufferings in the course of his inspection of barrio schools and that he became malnourished because of the scarcity of food in the places he travelled to. All these factors were found to have contributed to the weakening of his health rendering him susceptible to malnutrition and eventually to contracting liver cirrhosis. In the case at bar, the Commission said that liver cirrhosis may be classified by a mixture of etiologically and morphologica lly defined entities as follows: 1) Alcoholic cirrhosis, chronic alcoholism is a major cause of alcohol cirrhosis. The amount and duration of ethanol ingestion rather than the type of alcoholic beverage of the pattern of ingestion, appear to be an important determinant of liver injury. Nutritional factors may augment the detrimental effects of chronic alcohol ingestion on the liver. 2) Post necrotic cirrhosis is the final pathway of many types of advanced liver injury of both specific and unknown causes. Viral hepatitis, (hepatitis B, Non A, Non B) may be an antecedent. Other causes are drugs, toxins and alcoholic liver disease and primary biliary cirrhosis. 3) Biliary cirrhosis results from injury to or prolonged obstruction of either the intrahepatic or extrahepatic biliary syste m. 4) Cardiac cirrhosis prolonged severe right-sided congestive heart failure may lead to chronic liver injury and cardiac cirrhosis. 5) Metabolic, hereditary, drug-related and other types. We do not pretend to be an expert in the realm of medical discipline. However, We cannot discount the fact that the cause of death of petitioner's husband could very well be related to his previous working conditions. Even the Commission volunteered the theory that post necrotic cirrhosis show that of the many types of advanced liver injury, one cause may be due to toxins. As a welder, Francisco was exposed to heat, gas fumes and chemical substances coming from the burning electrodes caused by welding. Generally, the metal burned is iron. In the course thereof, other compounds and oxides, such as carbon monoxide, carbon dioxide, sulfur and phosphorus, may be emitted in the process of welding, depending on the kind of material used and

10

extent of corrosion of the metal worked on. These vaporized metals are inhaled by the welder in the process and significantly in this case, Francisco had to do welding jobs within enclosed compartments. Research shows that ingestion or inhalation of small amounts of iron over a number of years may lead to siderosis. Acute poisoning brings about circulatory collapse which may occur rapidly or be delayed to 48 hours with liver failure. 5 These are industrial hazards to which Francisco was exposed. And in the long course of time, 32 years at that, his continuous exposure to burned electrodes and chemicals emitted therefrom would likely cause poisoning and malfunction of the liver. The leading doctrine on compensability is that laid down in the case of Raro v. Employees' Compensation Commission, 6 where this Court said: "There is a widespread misconception that the poor employee is still arrayed against the might and power of his rich corporate employer. Hence, he must be given all kinds of favorable presumptions. This is fallacious. It is now the trust fund and not t he employer which suffers if benefits are paid to claimants who are not entitled under the law. The employer joins the employee in trying to have their claims approved. The employer is spared the problem of proving a negative proposition that the disease was not caused by employment." The decision of this Court in Raro in effect supersedes the cases with conclusions different from that stated therein, such as Nemaria v. ECC, 155 SCRA 166 (1987); Ovenson v. ECC, 156 SCRA 21 (1987); Mercado v. ECC, 127 SCRA 664 (1984). The reason behind the present doctrine is that the New Labor Code has abolished the presumption of compensability for illness contracted by a worker during employment. To be entitled to disability benefits, the claimant has to present evidence to prove that his ailment was the result of, or the risk of contracting the same were aggravated by working conditions or the nature of his work. 7 However, while the presumption of compensability and theory of aggravation under the Workmen's Compensation Act may have been abandoned under the new Labor Code, the liberality of the law in general in favor of the working man still prevails. 8 The Employees' Compensation Act is basically a social legislation designed to afford relief to the working man and woman in o ur society. The Employees' Compensation Commission, as the agency tasked with implementing the social justice mandate guaranteed by the Constitution, should be more liberal in resolving compensation claims of employees especially where there is some basis in the facts for inferring a work conn ection to the cause of death. 9 This interpretation gives meaning and substance to the liberal and compassionate spirit of the law as embodied in Article 4 o f the New Labor Code which states that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor." 10 The policy is to extend the applicability of PD 626 to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the state to give maximum aid and protection to labor. 11 Premises considered, We find the petition meritorious. Liver cirrhosis, although not one among those listed as compensable ailment, as considered in the case at bar as covered under the Act, on the ground that the nature of the work of petitioner's husband, exposed him to the risk of contracting the same. WHEREFORE, petition is hereby GRANTED and the decision of the Employees' Compensation Commission is REVERSED. SO ORDERED. Narvasa, C .J ., Padilla, Regalado and Campos, Jr., JJ ., concur.

11

G.R. No. 82511 March 3, 1992 GLOBE-MACKAY CABLE AND RADIO CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and IMELDA SALAZAR, respondents. Castillo, Laman, Tan & Pantaleon for petitioner. Gerardo S. Alansalon for private respondent. ROMERO, J.: For private respondent Imelda L. Salazar, it would seem that her close association with Delfin Saldivar would mean the loss o f her job. In May 1982, private respondent was employed by Globe-Mackay Cable and Radio Corporation (GMCR) as general systems analyst. Also employed by petitioner as manager for technical operations' support was Delfin Saldivar with whom private respondent was allegedly very close. Sometime in 1984, petitioner GMCR, prompted by reports that company equipment and spare parts worth thousands of dollars under the custody of Saldivar were missing, caused the investigation of the latter's activities. The report dated Sept ember 25, 1984 prepared by the company's internal auditor, Mr. Agustin Maramara, indicated that Saldivar had entered into a partnership styled Concave Commercial and Industrial Company with Richard A. Yambao, owner and manager of Elecon Engineering Services (Elecon), a supplier of petitioner often recommended by Saldivar. The report also disclosed that Saldivar had taken petitioner's missing Fedders airconditioning unit for his own personal use without authorization and also connived with Yambao to defraud petitioner of its property. The airconditioner was recovered only after petitioner GMCR filed an action for replevin against 1 Saldivar. It likewise appeared in the course of Maramara's investigation that Imelda Salazar violated company reglations by invol ving herself in transactions conflicting with the company's interests. Evidence showed that she signed as a witness to the article s of partnership between Yambao and Saldivar. It also appeared that she had full knowledge of the loss and whereabouts of the Fedders airconditioner but failed to inform her employer. Consequently, in a letter dated October 8, 1984, petitioner company placed private respondent Salazar under preventive suspension for one (1) month, effective October 9, 1984, thus giving her thirty (30) days within which to, explain her side. But instead of submitting an explanations three (3) days later or on October 12, 1984 private respondent filed a complaint against petitioner for illegal suspension, which she subsequently amended to include illegal dismissal, vacation and sick leave benefits, 13th month pay and damages, after petitioner notified her in writing that effective November 8, 1984, she was considered 2 dismissed "in view of (her) inability to refute and disprove these findings. After due hearing, the Labor Arbiter in a decision dated July 16, 1985, ordered petitioner company to reinstate private respondent to her former or equivalent position and to pay her full backwages and other benefits she would have received were 3 it not for the illegal dismissal. Petitioner was also ordered to pay private respondent moral damages of P50,000.00. On appeal, public respondent National Labor Relations, Commission in the questioned resolution dated December 29, 1987 affirmed the aforesaid decision with respect to the reinstatement of private respondent but limited the backwages to a period 4 of two (2) years and deleted the award for moral damages. Hence, this petition assailing the Labor Tribunal for having committed grave abuse of discretion in ho lding that the suspension and subsequent dismissal of private respondent were illegal and in ordering her reinstatement with two (2) years' backwages. On the matter of preventive suspension, we find for petitioner GMCR. The inestigative findings of Mr. Maramara, which pointed to Delfin Saldivar's acts in conflict with his position as technical operations manager, necessitated immediate and decisive action on any employee closely, associated with Saldivar. The suspension of Salazar was further impelled by th.e discovery of the missing Fedders airconditioning unit inside the apartment private respondent shared with Saldivar. Under such circumstances, preventive suspension was the proper remedial recourse available to the company pending Salazar's investigation. By itself, preventive suspension does, not signify that the company has adjudged the employee guilty of the charges she was asked to answer and explain. Such disciplinary measure is resorted to for the protection of the company's property pending investigation any alleged malfeasance or misfeasance committed by the 5 employee. Thus, it is not correct to conclude that petitioner GMCR had violated Salazar's right to due process when she was promptly suspended. If at all, the fault, lay with private responde nt when she ignored petitioner's memorandum of October 8, 1984 "giving her ample opportunity to present (her) side to the Management." Instead, she went directly to the Labor Department and filed her complaint for illegal suspension without giving her employer a chance to evaluate her side of the controversy. But while we agree with the propriety of Salazar's preventive suspension, we hold that her eventual separation from employment was not for cause. What is the remedy in law to rectify an unlawful dismis sal so as to "make whole" the victim who has not merely lost her job which, under settled Jurisprudence, is a property right of which a person is not to be deprived without due process, but also the compensation that should have accrued to her during the period when she was unemployed? Art. 279 of the Labor Code, as amended, provides: Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages , inclusive of allowances, and to his

12

other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of 6 his actual reinstatement. (Emphasis supplied) Corollary thereto are the following provisions of the Implementing Rules and Regulations of the Labor Code: Sec. 2. Security of Tenure. In cases of regular employments, the employer shall not terminate the services of an employee except for a just cause as provided in the Labor Code or when authorized by existing laws. Sec. 3. Reinstatement. An employee who is unjustly dismissed from work shall by entitled to reinstatement without loss of 7 seniority rights and to backwages." (Emphasis supplied) Before proceeding any furthers, it needs must be recalled that the present Constitution has gone further than the 1973 Charter in guaranteeing vital social and economic rights to marginalized groups of society, including labor. Given the pro -poor orientation of several articulate Commissioners of the Constitutional Commission of 1986, it was not surprising that a whole new Article emerged on Social Justice and Human Rights designed, among other things, to "protect and enhance the right of all the people to human dignity, reduce social, economic and political inequalities, and remove cultural inequities by equitably diff using wealth and political power for the common good."8 Proof of the priority accorded to labor is that it leads the other areas of concern in the Article on Social Justice,viz., Labor ranks ahead of such topics as Agrarian and Natural Resources Reform, Urban Land Roform and Housing, Health, Women, Role and Rights of Poople's Organizations and Human Rights. 9 The opening paragraphs on Labor states The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self -organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision -making processes affecting their rights and benefits is 10 may be provided by law. (Emphasis supplied) Compare this with the sole.provision on Labor in the 1973 Constitution under the Article an Declaration of Principles and State Policies that provides: Sec. 9. The state shall afford protection to labor, promote full employment and equality in employment, ensure equal work opportunities regardless of sex, race, or creed, and regulate the relations between workers and employers. The State shall ensure the rights of workers to self-organization, collective baegaining, security of tenure, and just and humane conditions of 11 work. The State may provide for compulsory arbitration. To be sure, both Charters recognize "security of tenure" as one of the rights of labor which the State is mandated to protect. But there is no gainsaying the fact that the intent of the framers of the present Constitution was to give primacy to the rights of labor and afford the sector "full protection," at least greater protection than heretofore accorded them, regardless of the geographical location of the workers and whether they are organized or not. It was then CONCOM Commissioner, now Justice Hilario G. Davide, Jr., who substantially contributed to the present formulation of the protection to labor provision and proposed that the same be incorporated in the Article on Social Justice and not just in the Article on Declaration of Principles and State Policies "in the light of the special importance that we are giving now to social 12 justice and the necessity of emphasizing the scope and role of social justice in national development." If we have taken pains to delve into the background of the labor provisions in our Constitution and the Labor Code, it is but to stress that the right of an employee not to be dismissed from his job except for a just or authorized cause provided by law h as assumed greater importance under the 1987 Constitution with the singular prominence labor enjoys under the article on Social Justice. And this transcendent policy has been translated into law in the Labor Code. Under its terms, where a case of unlawf ul or unauthorized dismissal has been proved by the aggrieved employee, or on the other hand, the employer whose duty it is to prove the lawfulness or justness of his act of dismissal has failed to do so, then the remedies provided in Article 279 shoul d find, application. Consonant with this liberalized stance vis-a-vis labor, the legislature even went further by enacting Republic Act No. 6715 which took effect on March 2, 1989 that amended said Article to remove any possible ambiguity that jurisprudence may 13 have generated which watered down the constitutional intent to grant to labor "full protection." To go back to the instant case, there being no evidence to show an authorized, much less a legal, cause for the dismissal of 14 private respondent, she had every right, not only to be entitled to reinstatement, but ay well, to full backwages." The intendment of the law in prescribing the twin remedies of reinstatement and payment of backwages is, in the former, to restore the dismissed employee to her status before she lost her job, for the dictionary meaning of the word "reinstate" is "to 15 restore to a state, conditione positions etc. from which one had been removed" and in the latter, to give her back the income lost during the period of unemployment. Both remedies, looking to the past, would perforce make her "whole." Sadly, the avowed intent of the law has at times been thwarted when reinstatement has not been forthcoming and the hapless dismissed employee finds himself on the outside looking in. Over time, the following reasons have been advanced by the Court for denying reinstatement under the facts of the case and the law applicable thereto; that reinstatement can no longer be effected in view of the long passage of time (22 years of litigation) or because of the realities of the situation; 16 or that it would be "inimical to the employer's interest; " 17 or that 18 19 reinstatement may no longer be feasible; or, that it will not serve the best interests of the parties involved; or that the 20 company would be prejudiced by the workers' continued employment; or that it will not serve any prudent purpose as when 21 supervening facts have transpired which make execution on that score unjust or inequitable or, to an increasing extent, due to

13

the resultant atmosphere of "antipathy and antagonism" or "strained relations" or "irretrievable estrangement" between the 22 employer and the employee. 23 In lieu of reinstatement, the Court has variously ordered the payment of backwages and separation pay or solely separation 24 pay. In the case at bar, the law is on the side of private respondent. In the first place the wording of the Labor Code is clear and unambiguous: "An employee who is unjustly dismissed from work shall be entitled to reinstatement. . . . and to his full 25 backwages. . . ." Under the principlesof statutory construction, if a statute is clears plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. This plain-meaning rule or verba legis derived from the maxim index animi sermo est (speech is the index of intention) rests on the valid presumption that the words employed by, the 26 legislature in a statute correctly express its intent or will and preclude the court from construing it differently. The legislature is presumed to know the meaning of the words, to:have used words advisedly, and to have expressed its intent by the use of 27 such words as are found in the statute. Verba legis non est recedendum, or from the words of a statute there should be no departure. Neither does the provision admit of any qualification. If in the wisdom of the Court, there may be a ground or grounds for non-application of the above-cited provision, this should be by way of exception, such as when the reinstatement may be inadmissible due to ensuing strained relations between the employer and the employee. In such cases, it should be proved that the employee concerned occupies a position where he enjoys the trust and confidence of his employer; and that it is likely that if reinstated, an atmosphere of ant ipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned. A few examples, will suffice to illustrate the Court's application of the above principles: where the employee is a Vice -President 28 for Marketing and as such, enjoys the full trust and confidence of top management; or is the Officer-In-Charge of the 29 extension office of the bank where he works; or is an organizer of a union who was in a position to sabotage the union's 30 efforts to organize the workers in commercial and industrial establishments; or is a warehouseman of a non-profit organization whose primary purpose is to facilitate and maximize voluntary gifts. by foreign individuals and organizations to the 31 32 Philippines; or is a manager of its Energy Equipment Sales. Obviously, the principle of "strained relations" cannot be applied indiscriminately. Otherwisey reinstatement can never be possible simply because some hostility is invariably engendered between the parties as a result of litigation. That is human 33 nature. Besides, no strained relations should arise from a valid and legal act of asserting one's right; otherwise an employee who sh all assert his right could be easily separated from the service, by merely paying his separation pay on the pretext that his 34 relationship with his employer had already become strained. Here, it has not been proved that the position of private respondent as systems analyst is one that may be characterized as a position of trust and confidence such that if reinstated, it may well lead to strained relations between employer and employee. Hence, this does not constitute an exception to the general rule mandating reinstatement for an employee who has been unlawfully dismissed. On the other hand, has she betrayed any confidence reposed in her by engaging in transactions that may have created conflict of interest situations? Petitioner GMCR points out that as a matter of company policy, it prohibits its employees from involv ing themselves with any company that has business dealings with GMCR. Consequently, when private respondent Salazar signed as a witness to the partnership papers of Concave (a supplier of Ultra which in turn is also a supplier of GMCR), she was deemed to have placed. herself in an untenable position as far as petitioner was concerned. However, on close scrutiny, we agree with public respondent that such a circumstance did not create a conflict of interests situation. As a systems analyst, Salazar was very far removed from operations involving the procurement of supplies. Salazar's duties revolved around the development of systems and analysis of designs on a continuing basis. In other words, Salazar did not occupy a position of trust relative to the approval and purchase of supplies and company assets. In the instant case, petitioner has predicated its dismissal of Salazar on loss of confidence. As we have held countless time s, while loss of confidence or breach of trust is a valid ground for terminations it must rest an some basi s which must be 35 convincingly established. An employee who not be dismissed on mere presumptions and suppositions. Petitioner's allegation that since Salazar and Saldivar lived together in the same apartment, it "presumed reasonably that complainant's sympathy would be with Saldivar" and its averment that Saldivar's investigation although unverified, was probably true, do not pass th is 36 Court's test. While we should not condone the acts of disloyalty of an employee, neither should we dismiss him on the basis of suspicion derived from speculative inferences. To rely on the Maramara report as a basis for Salazar's dismissal would be most inequitous because the bulk of the findings centered principally oh her friend's alleged thievery and anomalous transactions as technical operations' support manager. Said report merely insinuated that in view of Salazar's special relationship with Saldivar, Salazar might have had direct knowledg e of Saldivar's questionable activities. Direct evidence implicating private re spondent is wanting from the records. It is also worth emphasizing that the Maramara report came out after Saldivar had already resigned from GMCR on May 31, 1984. Since Saldivar did not have the opportunity to refute management's findings, the report remained obviously one-sided. Since the main evidence obtained by petitioner dealt principally on the alleged culpability of Saldivar, without his having h ad a chance to voice his side in view of his prior resignation, stringent examination should have been carried out to ascertain whether or not there existed independent legal grounds to hold Salatar answerable as well and, thereby, justify her dismissal. Findin g none, from the records, we find her to have been unlawfully dismissed.

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WHEREFORE, the assailed resolution of public respondent National Labor Relations Commission dated December 29, 1987 is hereby AFFIRMED. Petitioner GMCR is ordered to REINSTATE private respondent Imelda Salazar and to pay her backwages equivalent to her salary for a period of two (2) years only. This decision is immediately executory. SO ORDERED. Paras, Bidin, Grio-Aquino, Medialdea, Regalado, Davide, Jr. and Nocon, JJ., concur. Cruz, J., concurs in the result. Gutierrez, Jr., Feliciano and Padilla, JJ., took no part.

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G.R. No. 101761. March 24, 1993. NATIONAL SUGAR REFINERIES CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and NBSR SUPERVISORY UNION, (PACIWU) TUCP, respondents. Jose Mario C. Bunag for petitioner. The Solicitor General and the Chief Legal Officer, NLRC, for public respondent. Zoilo V. de la Cruz for private respondent. DECISION REGALADO, J p: The main issue presented for resolution in this original petition for certiorari is whether supervisory employees, as defined in Article 212 (m), Book V of the Labor Code, should be considered as officers or members of the managerial staff under Article 82, Book III of the same Code, and hence are not entitled to overtime rest day and holiday pay. Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully owned and controlled by the Government, operates three (3) sugar refineries located at Bukidnon, Iloilo and Batangas. The Batangas refinery was privatized on April 11, 1992 pursuant to Proclamation No. 50. 1 Private respondent union represents the former supervisors of the NASUREFCO Batangas Sugar Refinery, namely, the Technical Assistant to the Refinery Operations Manager, Shift Sugar Warehouse Supervisor, Senior Financial/Budget Analyst, General Accountant, Cost Accountant, Sugar Accountant, Junior Financial/Budget Analyst, Shift Boiler Supervisor,, Shift Operations Chemist, Shift Electrical Supervisor, General Services Supervisor, Instrumentation Supervisor, Community Development Officer, Employment and Training Supervisor, Assistant Safety and Security Officer, Head and Personnel Services, Head Nurse, Property Warehouse Supervisor, Head of Inventory Control Section, Shift Process Supervisor, Day Maintenance Supervisor and Motorpool Supervisor. On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file to department heads. The JE Program was designed to rationalized the duties and functions of all positions, reestablish levels of responsibility, and recognize both wage and operational structures. Jobs were ranked according to effort, responsibility, training and working conditions and relative worth of the job. As a result, all positions were re -evaluated, and all employees including the members of respondent union were granted salary adjustments and increases in benefits commensurate to their actual duties and functions. We glean from the records that for about ten years prior to the JE Program, the members of respondent union were treated in the same manner as rank-and file employees. As such, they used to be paid overtime, rest day and holiday pay pursuant to the provisions of Articles 87, 93 and 94 of the Labor Code as amended. With the implementation of the JE Program, the following adjustments were made: (1) the members of respondent union were re-classified under levels S-5 to S-8 which are considered managerial staff for purposes of compensation and benefits; (2) there was an increase in basic pay of the average of 50% of their basic pay prior to the JE Program, with the union members now enjoying a wide gap (P1,269.00 per month) in basic pay compared to the highest paid rank-and-file employee; (3) longevity pay was increased on top of alignment adjustments; (4) they were entitled to increased company COLA of P225.00 per month; (5) there was a grant of P100.00 allowance for rest day/holiday work. On May 11, 1990, petitioner NASUREFCO recognized herein respondent union, which was organized pursuant to Republic Act NO. 6715 allowing supervisory employees to form their own unions, as the bargaining representative of all the supervisory employees at the NASUREFCO Batangas Sugar Refinery. Two years after the implementation of the JE Program, specifically on June 20, 1990, the members of herein respondent union filed a complainant with the executive labor arbiter for non-payment of overtime, rest day and holiday pay allegedly in violation of Article 100 of the Labor Code. On January 7, 1991, Executive Labor Arbiter Antonio C. Pido rendered a decision 2 disposing as follows: "WHEREFORE, premises considered, respondent National Sugar refineries Corporation is hereby directed to 1. pay the individual members of complainant union the usual overtime pay, rest day pay and holiday pay enjoyed by them instead of the P100.00 special allowance which was implemented on June 11, 1988; and 2. pay the individual members of complainant union the difference in money value between the P100.00 special allowance and the overtime pay, rest day pay and holiday pay that they ought to have received from June 1, 1988. All other claims are hereby dismissed for lack of merit. SO ORDERED." In finding for the members therein respondent union, the labor ruled that the along span of time during which the benefits were being paid to the supervisors has accused the payment thereof to ripen into contractual obligation; at the complainants cannot be estopped from questioning the validity of the new compensation package despite the fact that they have been receiving the benefits therefrom, considering that respondent union was formed only a year after the implementation of the Job Evaluation Program, hence there was no way for the individual supervisors to express their collective response thereto prior to the formation of the union; and the comparative computations presented by the private respondent union showed that the P100.00 special allowance given NASUREFCO fell short of what the supervisors ought to receive had the overtime pay rest day pay and holiday pay not been discontinued, which arrangement, therefore, amounted to a diminution of benefits. On appeal, in a decision promulgated on July 19, 1991 by its Third Division, respondent National Labor Relations Commission (NLRC) affirmed the decision of the labor arbiter on the ground that the members of respondent union are not managerial

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employees, as defined under Article 212 (m) of the Labor Code and, therefore, they are entitled to overtime, rest day and holiday pay. Respondent NLRC declared that these supervisory employees are merely exercising recommendatory powers subject to the evaluation, review and final action by their department heads; their responsibilities do not require the exercise of discretion and independent judgment; they do not participate in the formulation of management policies nor in the hiring or firing of employees; and their main function is to carry out the ready policies and plans of the corporation. 3 Reconsideration of said decision was denied in a resolution of public respondent dated August 30, 1991. 4 Hence this petition for certiorari, with petitioner NASUREFCO asseverating that public respondent commission committed a grave abuse of discretion in refusing to recognized the fact that the members of respondent union are members of the managerial staff who are not entitled to overtime, rest day and holiday pay; and in making petitioner assume the "double burden" of giving the benefits due to rank-and-file employees together with those due to supervisors under the JE Program. We find creditable merit in the petition and that the extraordinary writ of certiorari shall accordingly issue. The primordial issue to be resolved herein is whether the members of respondent union are entitled to overtime, rest day and holiday pay. Before this can be resolved, however it must of necessity be ascertained first whether or not the union members, as supervisory employees, are to be considered as officers or members of the managerial staff who are exempt from the coverage of Article 82 of the Labor Code. It is not disputed that the members of respondent union are supervisory employees, as defined employees, as defined under Article 212(m), Book V of the Labor Code on Labor Relations, which reads: "(m) 'Managerial employee' is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharged, assign or discipline employees. Supervisory employees are those who, in the interest of the employer effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of those above definitions are considered rank-and-file employees of this Book." Respondent NLRC, in holding that the union members are entitled to overtime, rest day and holiday pay, and in ruling that the latter are not managerial employees, adopted the definition stated in the aforequoted statutory provision. Petitioner, however, avers that for purposes of determining whether or not the members of respondent union are entitled to overtime, rest day and holiday pay, said employees should be considered as "officers or members of the managerial staff" as defined under Article 82, Book III of the Labor Code on "Working Conditions and Rest Periods" and amplified in Section 2, Rule I, Book III of the Rules to Implement the Labor Code, to wit: "Art. 82 Coverage. The provisions of this title shall apply to employees in all establishment s and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in Appropriate regulations. "As used herein, 'managerial employees' refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff." (Emphasis supplied.) xxx xxx xxx 'Sec. 2. Exemption. The provisions of this rule shall not apply to the following persons if they qualify for exemption und er the condition set forth herein: xxx xxx xxx (b) Managerial employees, if they meet all of the following conditions, namely: (1) Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof: (2) They customarily and regularly direct the work of two or more employees therein: (3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight. (c) Officers or members of a managerial staff if they perform the following duties and responsibilities: (1) The primary duty consists of the performance of work directly related to management policies of their employer; (2) Customarily and regularly exercise discretion and independent judgment; (3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute under general supervision special assignments and tasks; and (4) Who do not devote more 20 percent of their hours worked in a work-week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2), and above." It is the submission of petitioner that while the members of respondent union, as supervisors, may not be occupying managerial positions, they are clearly officers or members of the managerial staff because they meet all the conditions prescribed by la w and, hence, they are not entitled to overtime, rest day and supervisory employees under Article 212 (m) should be made to apply only to the provisions on Labor Relations, while the right of said employees to the questioned benefits should be considered in the light of the meaning of a managerial employee and of the officers or members of the managerial staff, as contemplated under Article 82 of the Code and Section 2, Rule I Book III of the implementing rules. In other words, for purpo ses

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of forming and joining unions, certification elections, collective bargaining, and so forth, the union members are supervisory employees. In terms of working conditions and rest periods and entitlement to the questioned benefits, however, they are officers or members of the managerial staff, hence they are not entitled thereto. While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. Management also has its own rights which, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less pri vileges in life, this Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded us to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine. 5 This is one such case where we are inclined to tip the scales of justice in favor of the employer. The question whether a given employee is exempt from the benefits of the law is a factual one dependent on the circumstances of the particular case, In determining whether an employee is within the terms of the statutes, the criterion is the character of the work performed, rather than the title of the employee's position. 6 Consequently, while generally this Court is not supposed to review the factual findings of respondent commission, substantial justice and the peculiar circumstances obtaining herein mandate a deviation from the rule. A cursory perusal of the Job Value Contribution Statements 7 of the union members will readily show that these supervisory employees are under the direct supervision of their respective department superintendents and that generally they assist the latter in planning, organizing, staffing, directing, controlling communicating and in making decisions in attaining the compa ny's set goals and objectives. These supervisory employees are likewise responsible for the effective and efficient operation of their respective departments. More specifically, their duties and functions include, among others, the following operations whereby the employee: 1) assists the department superintendent in the following: a) planning of systems and procedures relative to department activities; b) organizing and scheduling of work activities of the department, which includes employee shifting scheduled and manning complement; c) decision making by providing relevant information data and other inputs; d) attaining the company's set goals and objectives by giving his full support; e) selecting the appropriate man to handle the job in the department; and f) preparing annual departmental budget; 2) observes, follows and implements company policies at all times and recommends disciplinary action on erring subordinates; 3) trains and guides subordinates on how to assume responsibilities and become more productive; 4) conducts semi-annual performance evaluation of his subordinates and recommends necessary action for their development/advancement; 5) represents the superintendent or the department when appointed and authorized by the former; 6) coordinates and communicates with other inter and intra department supervisors when necessary; 7) recommends disciplinary actions/promotions; 8) recommends measures to improve work methods, equipment performance, quality of service and working conditions; 9) sees to it that safety rules and regulations and procedure and are implemented and followed by all NASUREFCO employees, recommends revisions or modifications to said rules when deemed necessary, and initiates and prepares reports for any observed abnormality within the refinery; 10) supervises the activities of all personnel under him and goes to it that instructions to subordinates are properly implemented; and 11) performs other related tasks as may be assigned by his immediate superior. From the foregoing, it is apparent that the members of respondent union discharge duties and responsibilities which ineluctably qualify them as officers or members of the managerial staff, as defined in Section 2, Rule I Book III of the aforestated Rule s to Implement the Labor Code, viz.: (1) their primary duty consists of the performance of work directly related to management policies of their employer; (2) they customarily and regularly exercise discretion and independent judgment; (3) they regularly and directly assist the managerial employee whose primary duty consist of the management of a department of the establishment in which they are employed (4) they execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; (5) they execute, under general supervision, special assignments and tasks; and (6) they do not devote more than 20% of their hours worked in a work-week to activities which are not directly and clearly related to the performance of their work hereinbefore described. Under the facts obtaining in this case, we are constrained to agree with petitioner that the union members should be considered as officers and members of the managerial staff and are, therefore, exempt from the coverage of Article 82. Perforce, they are not entitled to overtime, rest day and holiday. The distinction made by respondent NLRC on the basis of whether or not the union members are managerial employees, to determine the latter's entitlement to the questioned benefits, is misplaced and inappropriate. It is admitted that these union members are supervisory employees and this is one instance where the nomenclatures or titles of their jobs conform with the nature of their functions. Hence, to distinguish them from a managerial employee, as defined either under Articles 82 or 212 (m) of the Labor Code, is puerile and in efficacious. The controversy actually involved here seeks a determination of whether or not

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these supervisory employees ought to be considered as officers or members of the managerial staff. The distinction, therefore, should have been made along that line and its corresponding conceptual criteria. II. We likewise no not subscribe to the finding of the labor arbiter that the payment of the questioned benefits to the union members has ripened into a contractual obligation. A. Prior to the JE Program, the union members, while being supervisors, received benefits similar to the rank -and-file employees such as overtime, rest day and holiday pay, simply because they were treated in the same manner as rank-and-file employees, and their basic pay was nearly on the same level as those of the latter, aside from the fact that their specific functions an d duties then as supervisors had not been properly defined and delineated from those of the rank-and-file. Such fact is apparent from the clarification made by petitioner in its motion for reconsideration 8 filed with respondent commission in NLRC Case No. CA No. I-000058, dated August 16, 1991, wherein, it lucidly explained: "But, complainants no longer occupy the same positions they held before the JE Program. Those positions formerly classified as 'supervisory' and found after the JE Program to be rank-and-file were classified correctly and continue to receive overtime, holiday and restday pay. As to them, the practice subsists. "However, those whose duties confirmed them to be supervisory, were re-evaluated, their duties re-defined and in most cases their organizational positions re-designated to confirm their superior rank and duties. Thus, after the JE program, complainants cannot be said to occupy the same positions." 9 It bears mention that this positional submission was never refuted nor controverted by respondent union in any of its pleadings filed before herein public respondent or with this Court. Hence, it can be safely concluded therefrom that the members of respondent union were paid the questioned benefits for the reason that, at that time, they were rightfully entitled thereto. Prior to the JE Program, they could not be categorically classified as members or officers of the managerial staff considering that they were then treated merely on the same level as rank-and-file. Consequently, the payment thereof could not be construed as constitutive of voluntary employer practice, which cannot be now be unilaterally withdrawn by petitioner. To be considered as such, it should have been practiced over a long period of time, and must be shown to have been consistent and deliberate. 10 The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving the benefits knowingly fully well that said employees are not covered by the law requiring payment thereof. 11 In the case at bar, respondent union failed to sufficiently establish that petitioner has been motivated or is wont to give these benefits out of pure generosity. B. It remains undisputed that the implementation of the JE Program, the members of private respondent union were reclassified under levels S-5 S-8 which were considered under the program as managerial staff purposes of compensation and benefits, that they occupied re-evaluated positions, and that their basic pay was increased by an average of 50% of their basic salary prior to the JE Program. In other words, after the JE Program there was an ascent in position, rank and salary. This in essence is a promotion which is defined as the advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary. 12 Quintessentially, with the promotion of the union members, they are no longer entitled to the benefits which attach and pertain exclusively to their positions. Entitlement to the benefits provided for by law requires pri or compliance with the conditions set forth therein. With the promotion of the members of respondent union, they occupied positions which no longer met the requirements imposed by law. Their assumption of these positions removed them from the coverage of the law, ergo, their exemption therefrom. As correctly pointed out by petitioner, if the union members really wanted to continue receiving the benefits which attach to their former positions, there was nothing to prevent them from refusing to accept their promotions and their corresponding benefits. As the sating goes by, they cannot have their cake and eat it too or, as petitioner suggests, they could not, as a simple matter of law and fairness, get the best of both worlds at the expense of NASUREFCO. Promotion of its employees is one of the jurisprudentially-recognized exclusive prerogatives of management, provided it is done in good faith. In the case at bar, private respondent union has miserably failed to convince this Court that the petitioner acted implementing the JE Program. There is no showing that the JE Program was intended to circumvent the law and deprive the members of respondent union of the benefits they used to receive. Not so long ago, on this particular score, we had the occasion to hold that: ". . . it is the prerogative of the management to regulate, according to its discretion and judgment, all aspects of employme nt. This flows from the established rule that labor law does not authorize the substitution of the judgment of the employer in the conduct of its business. Such management prerogative may be availed of without fear of any liability so long as it is exercis ed in good faith for the advancement of the employer's interest and not for the purpose of defeating on circumventing the rights of employees under special laws or valid agreement and are not exercised in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite." 13 WHEREFORE, the impugned decision and resolution of respondent National Labor Relations Commission promulgated on July 19, 1991 and August 30, 1991, respectively, are hereby ANNULLED and SET ASIDE for having been rendered and adopted with grave abuse of discretion, and the basic complaint of private respondent union is DISMISSED. Narvasa, C . J ., Padilla, Nocon and Campos, Jr., JJ., concur.

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G.R. No. 101279 August 6, 1992 PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner, vs. HON. RUBEN D. TORRES, as Secretary of the Department of Labor & Employment, and JOSE N. SARMIENTO, as A dministrator of the PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION,respondents. De Guzman, Meneses & Associates for petitioner. GRIO-AQUINO, J.: This petition for prohibition with temporary restraining order was filed by the Philippine Association of Service Exporters (PASEI, for short), to prohibit and enjoin the Secretary of the Department of Labor and Employment (DOLE) and the Administrator of th e Philippine Overseas Employment Administration (or POEA) from enforcing and implementing DOLE Department Order No. 16, Series of 1991 and POEA Memorandum Circulars Nos. 30 and 37, Series of 1991, temporarily suspending the recruitment by private employment agencies of Filipino domestic helpers for Hong Kong and vesting in the DOLE, through the facilities of the POEA, the task of processing and deploying such workers. PASEI is the largest national organization of private employment and recruitment agencies duly licensed and authorized by the POEA, to engaged in the business of obtaining overseas employment for Filipino landbased workers, including domestic helpers. On June 1, 1991, as a result of published stories regarding the abuses suffered by Filipino housemaids employed in Hong Kong, DOLE Secretary Ruben D. Torres issued Department Order No. 16, Series of 1991, temporarily suspending the recruitment by private employment agencies of "Filipino domestic helpers going to Hong Kong" (p. 30, Rollo). The DOLE itself, through the POEA took over the business of deploying such Hong Kong-bound workers. In view of the need to establish mechanisms that will enhance the protection for Filipino domestic helpers going to Hong Kong, the recruitment of the same by private employment agencies is hereby temporarily suspended effective 1 July 1991. As such, the DOLE through the facilities of the Philippine Overseas Employment Administration shall take over the processing and deployment of household workers bound for Hong Kong, subject to guidelines to be issued for said purpose. In support of this policy, all DOLE Regional Direc tors and the Bureau of Local Employment's regional offices are likewise directed to coordinate with the POEA in maintaining a manpower pool of prospective domestic helpers to Hong Kong on a regional basis. For compliance. (Emphasis ours; p. 30, Rollo.) Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 30, Series of 1991, dated July 10, 1991, providing GUIDELINES on the Government processing and deployment of Filipino domestic helpers to Hong Kong and the accreditation of Hong Kong recruitment agencies intending to hire Filipino domestic helpers. Subject: Guidelines on the Temporary Government Processing and Deployment of Domestic Helpers to Hong Kong. Pursuant to Department Order No. 16, series of 1991 and in order to operationalize the temporary government processing and deployment of domestic helpers (DHs) to Hong Kong resulting from the temporary suspension of recruitment by private employment agencies for said skill and host market, the following guidelines and mechanisms shall govern the implementation of said policy. I. Creation of a joint POEA-OWWA Household Workers Placement Unit (HWPU) An ad hoc, one stop Household Workers Placement Unit [or HWPU] under the supervision of the POEA shall take charge of the various operations involved in the Hong Kong-DH industry segment: The HWPU shall have the following functions in coordination with appropriate units and other entities concerned: 1. Negotiations with and Accreditation of Hong Kong Recruitment Agencies 2. Manpower Pooling 3. Worker Training and Briefing 4. Processing and Deployment 5. Welfare Programs II. Documentary Requirements and Other Conditions for Accreditation of Hong Kong Recruitment Agencies or Principals Recruitment agencies in Hong Kong intending to hire Filipino DHs for their employers may negotiate with the HWPU in Manila directly or through the Philippine Labor Attache's Office in Hong Kong. xxx xxx xxx X. Interim Arrangement All contracts stamped in Hong Kong as of June 30 shall continue to be processed by POEA until 31 July 1991 under the name of the Philippine agencies concerned. Thereafter, all contracts shall be processed with the HWPU. Recruitment agencies in Hong Kong shall submit to the Philippine Consulate General in Hong kong a list of their accepted applicants in their pool within the last week of July. The last day of acceptance shall be July 31 which shall then be the ba sis of HWPU in accepting contracts for processing. After the exhaustion of their respective pools the only source of applicants will be the POEA manpower pool. For strict compliance of all concerned. (pp. 31-35, Rollo.) On August 1, 1991, the POEA Administrator also issued Memorandum Circular No. 37, Series of 1991, on the processing of employment contracts of domestic workers for Hong Kong. TO: All Philippine and Hong Kong Agencies engaged in the recruitment of Domestic helpers for Hong Kong

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Further to Memorandum Circular No. 30, series of 1991 pertaining to the government processing and deployment of domestic helpers (DHs) to Hong Kong, processing of employment contracts which have been attested by the Hong Kong Commissioner of Labor up to 30 June 1991 shall be processed by the POEA Employment Contracts Processing Branch up to 15 August 1991 only. Effective 16 August 1991, all Hong Kong recruitment agent/s hiring DHs from the Philippines shall recruit under the new scheme which requires prior accreditation which the POEA. Recruitment agencies in Hong Kong may apply for accreditation at the Office of the Labor Attache, Philippine Consulate General where a POEA team is posted until 31 August 1991. Thereafter, those who failed to have themselves accredited in Hong Kong may proceed to the POEA-OWWA Household Workers Placement Unit in Manila for accreditation before their recruitment and processing of DHs shall be allowed. Recruitment agencies in Hong Kong who have some accepted applicants in their pool after the cut-off period shall submit this list of workers upon accreditation. Only those DHs in said list will be allowed processi ng outside of the HWPU manpower pool. For strict compliance of all concerned. (Emphasis supplied, p. 36, Rollo.) On September 2, 1991, the petitioner, PASEI, filed this petition for prohibition to annul the aforementioned DOLE and POEA circulars and to prohibit their implementation for the following reasons: 1. that the respondents acted with grave abuse of discretion and/or in excess of their rule-making authority in issuing said circulars; 2. that the assailed DOLE and POEA circulars are contrary to the Constitution, are unreasonable, unfair and oppressive; and 3. that the requirements of publication and filing with the Office of the National Administrative Register were not complied with. There is no merit in the first and second grounds of the petition. Article 36 of the Labor Code grants the Labor Secretary the power to restrict and regulate recruitment and placement activities. Art. 36. Regulatory Power. The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this title [Regulation of Recruitment and Placement Activities] and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this title. (Emphasis ours.) On the other hand, the scope of the regulatory authority of the POEA, which was created by Executive Order No. 797 on May 1, 1982 to take over the functions of the Overseas Employment Development Board, the National Seamen Board, and the overseas employment functions of the Bureau of Employment Services, is broad and far-ranging for: 1. Among the functions inherited by the POEA from the defunct Bureau of Employment Services was the power and duty: "2. To establish and maintain a registration and/or licensing system to regulate private sector participation in the recruitment and placement of workers, locally and overseas, . . ." (Art. 15, Labor Code, Emphasis supplied). (p. 13, Rollo.) 2. It assumed from the defunct Overseas Employment Development Board the power and duty: 3. To recruit and place workers for overseas employment of Filipino contract workers on a government to government arrangement and in such other sectors as policy may dictate . . . (Art. 17, Labor Code.) (p. 13, Rollo.) 3. From the National Seamen Board, the POEA took over: 2. To regulate and supervise the activities of agents or representatives of shipping companies in the hiring of seamen for overseas employment; and secure the best possible terms of employment for contract seamen workers and secure compliance therewith. (Art. 20, Labor Code.) The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not unconstitutional, unreasonable and oppressive. It has been necessitated by "the growing complexity of the modern society" (Solid Homes, Inc. vs. Payawal, 177 SCRA 72, 79). More and more administrative bodies are necessary to help in the regulation of society's ramified activities. "Specialized in the particular field assigned to them, they can deal with the problems thereof with more expertise and dispatch than can be expected from the legislature or the courts of justice" (Ibid.). It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the recruitment and deployment of Filipino landbased workers for overseas employment. A careful reading of the challenged administrative issuances discloses that the same fall within the "administrative and policing powers expressly or by necessary implication conferred" upon the respondents (People vs. Maceren, 79 SCRA 450). The power to "restrict and regulate conferred by Article 36 of the Labor Code involves a grant of police power (City of Naga vs. Court of Appeals, 24 SCRA 898). To "restrict" means "to confine, limit or stop" (p. 62, Rollo) and whereas the power to "regulate" means "the power to protect, foster, promote, preserve, and control with due regard for the interests, first and foremost, of the public, then of the utility and of its patrons" (Philippine Commun ications Satellite Corporation vs. Alcuaz, 180 SCRA 218). The Solicitor General, in his Comment, aptly observed: . . . Said Administrative Order [ i.e., DOLE Administrative Order No. 16] merely restricted the scope or area of petitioner's business operations by excluding therefrom recruitment and deployment of domestic helpers for Hong Kong till after the establishment of the "mechanisms" that will enhance the protection of Filipino domestic helpers going to Hong Kong. In fine, other than the recruitment and deployment of Filipino domestic helpers for Hongkong, petitioner may still deploy other class of Filipino workers either for Hongkong and other countries and all other classes of Filipino workers for other countries. Said administrative issuances, intended to curtail, if not to end, rampant violations of the rule against excessive collections of placement and documentation fees, travel fees and other charges committed by private employment agencies recruiting and deploying domestic helpers to Hongkong. [They are reasonable, valid and justified under the general welfare clause of the Constitution, since the recruitment and deployment business, as it is conducted today, is affected with public interest.

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xxx xxx xxx The alleged takeover [of the business of recruiting and placing Filipino domestic helpers in Hongkong] is merely a remedial measure, and expires after its purpose shall have been attained. This is evident from the tenor of Administrative Order No. 1 6 that recruitment of Filipino domestic helpers going to Hongkong by private employment agencies are hereby "temporarily suspended effective July 1, 1991." The alleged takeover is limited in scope, being confined to recruitment of domestic helpers going to Hongkong only. xxx xxx xxx . . . the justification for the takeover of the processing and deploying of domestic helpers for Hongkong resulting from the restriction of the scope of petitioner's business is confined solely to the unscrupulous practice of private employment agencies victimizing applicants for employment as domestic helpers for Hongkong and not the whole recruitment business in the Philippines. (pp. 62-65,Rollo.) The questioned circulars are therefore a valid exercise of the police power as delegated to the executive branch of Government. Nevertheless, they are legally invalid, defective and unenforceable for lack of power publication and filing in the Office of the National Administrative Register as required in Article 2 of the Civil Code, Article 5 of the Labor Code and Sections 3(1) an d 4, Chapter 2, Book VII of the Administrative Code of 1987 which provide: Art. 2. Laws shall take effect after fifteen (15) days following the completion of their publication in the Official Gazatte, unless it is otherwise provided. . . . (Civil Code.) Art. 5. Rules and Regulations. The Department of Labor and other government agencies charged with the administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation. (Emphasis supplied, Labor Code, as amended.) Sec. 3. Filing. (1) Every agency shall file with the University of the Philippines Law Center, three (3) certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are not filed within three (3) months shall not thereafter be the basis of any sanction against any party or persons. (Emphasis supplied, Chapter 2, Book VII of the Administrative Code of 1987.) Sec. 4. Effectivity. In addition to other rule-making requirements provided by law not inconsistent with this Book, each rule shall become effective fifteen (15) days from the date of filing as abo ve provided unless a different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety and welfare, the existence of which must be expres sed in a statement accompanying the rule. The agency shall take appropriate measures to make emergency rules known to persons who may be affected by them. (Emphasis supplied, Chapter 2, Book VII of the Administrative Code of 1987). Once, more we advert to our ruling in Taada vs. Tuvera, 146 SCRA 446 that: . . . Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation. (p. 447.) Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties. (p. 448.) We agree that publication must be in full or it is no publication at all since its purpose is to inform the public of the con tent of the laws. (p. 448.) For lack of proper publication, the administrative circulars in question may not be enforced and implemented. WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE Department Order No. 16, Series of 1991, and POEA Memorandum Circulars Nos. 30 and 37, Series of 1991, by the public respondents is hereby SUSPENDED pending compliance with the statutory requirements of publication and filing under the aforementioned laws of the land. SO ORDERED. Narvasa, C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Medialdea, Regalado, Davide, Jr., Romero, Nocon and Bellosillo, JJ., concur.

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AMELIA J. DELOS SANTOS, Petitioner,

G.R. No. 154185 Present: PANGANIBAN, J., Chairman SANDOVAL-GUTIERREZ, CORONA, CARPIO MORALES, and GARCIA, JJ. Promulgated:

- versus -

JEBSEN MARITIME, INC., Respondent.

November 22, 2005

x--------------------------------------------------------------------------------- x

DECISION GARCIA, J.: Petitioner Amelia J. Delos Santos seeks in this petition for review on certiorari under Rule 45 of the Rules of Court to nullify and [1] [2] set aside the decision and resolution dated 21 March 2002 and 03 July 2002 , respectively, of the Court of Appeals in CAG.R. SP No. 62229. From the petition and its annexes, the respondent s comment thereto, and the parties respective memoranda, the Court gathers the following factual antecedents: On 10 August 1995, or thereabout, herein respondent Jebsen Maritime, Inc., for and in behalf of Aboitiz Shipping Co. (Aboitiz Shipping, for short), hired petitioner s husband, Gil R. Delos Santos (hereinafter, Delos Santos) as third engineer of MV Wild Iris. The corresponding contract of employment, as approved by the Philippine Overseas Employment Administration (POEA), was for a fixed period of one (1) month and for a specific undertaking of conducting said vessel to and from Japan. It quoted Delos Santos basic monthly salary and other monetary benefits in US currency. Under POEA rules, all employers and principals are required to adopt the POEA - standard employment contract (POEA-SEC) without prejudice to their adoption of terms and [3] conditions over and above the minimum prescribed by that agency. On the vessel s return to the Philippines a month after, Delos Santos remained on board, respondent having opted to retain his services while the vessel underwent repairs in Cebu. After its repair, MV Wild Iris, this time renamed/registered as MV Super RoRo 100, sailed within domestic waters, having been meanwhile issued by the Maritime Industry Authority a Certificate of Vessel Registry and a permit to engage in coastwise trade on the Manila-Cebu-Manila-Zamboanga-General Santos-Manila [4] route. During this period of employment, Delos Santos was paid by and received from respondent his salary in Philippine peso [5] thru a payroll-deposit arrangement with the Philippine Commercial & Industrial Bank. Some five months into the vessel s inter-island voyages, Delos Santos experienced episodes of chest pain, numbness and body weakness which eventually left him temporarily paralyzed. On 17 February 1996, he was brought to the Manila Doctor s Hospital a duly accredited hospital of respondent - where he underwent a spinal column operation. Respondent shouldered all operation-related expenses, inclusive of his post operation confinement. As narrated in the assailed decision of the Court of Appeals, the following events next transpired: 1. After his discharge from the Manila Doctor s, Delos Santos was made to undergo physical therapy sessions at the same hospital, which compelled the Batangas-based Delos Santoses to rent a room near the hospital at P3,000.00 a month; 2. Delos Santos underwent a second spinal operation at the non-accredited Lourdes Hospital at the cost of P119, 536.00; and 3. After Lourdes, Delos Santos was confined in a clinic in San Juan, Batangas where P20,000.00 in hospitalization expenses was incurred. It would appear that the spouses Delos Santos paid all the expenses attendant the second spinal operation as well as for the subsequent medical treatment. Petitioner s demand for reimbursement of these expenses was rejected by respondent for the reason that all the sickness benefits of Delos Santos under the Social Security System (SSS) Law had already been paid. Thus, on 25 January 1997, petitioner filed a complaint [6] with the Arbitration Branch of the National Labor Relations Commission (NLRC) against respondent and Aboitiz Shipping for recovery of disability benefits, and sick wage allowance and reimbursement of hospital and medical expenses. She also sought payment of moral damages and attorney s fees. After due proceedings, the labor arbiter rendered, on 08 January 1999,[7] judgment finding for petitioner and ordering respondent and Aboitiz Shipping to jointly and severally pay the former the following: (1) P119,536.01, representing reimbursement of medical, surgical and hospital expenses; (2) P9,000, representing reasonable cost of board and lodging; (3) P500,000, representing moral damages;

23

(4) (5) (6) (7)

US$60,000, representing disability benefits corresponding to Total Permanent Disability; US$2,452, representing Sick Wage allowance; P62,853.60, representing attorney s fees; and, US$6,245.20, also representing attorney s fees.
[8]

On appeal, the NLRC, in a decision dated 29 August 2000, modified that of the labor arbiter, as follows: WHEREFORE, the decision appealed from is MODIFIED to the extent that respondents Jebsen Maritime, Inc., and Aboitiz Shipping Company are hereby ordered jointly and severally liable to pay Gil delos Santos through Amelia delos Santos the Philippine peso equivalent at the time of actual payment of US DOLLARS SIXTY THOUSAND (US$60,000.00) and US DOLLA RS TWO THOUSAND FOUR HUNDRD ( sic) FIFTY TWO (US$2,452.00) representing total disability compensation benefits and sickness wages, and the amount of ONE HUNDRED THREE THOUSAND EGHT ( sic) HUNDRED FOUR AND 87/100 PHILIPPINE PESOS (P103,804.87) representing reimbursement of surgical, medical and hospital expenses, plus the equivalent of five percent (5%) of the aggregate award as and for attorney s fees. All other dispositions are SET ASIDE. SO ORDERED. Like the labor arbiter, the NLRC predicated its ruling mainly on the theory that the POEA-approved contract of employment continued to govern Delos Santos employment when he contracted his illness. In specific terms, the NLRC states that the same contract was still effective when Delos Santos fell ill, thus entitling him to the payment of disability and like benefits provided in and required under the POEA-SEC. [9] Following the denial of its motion for reconsideration per NLRC Resolution of 31 October 2000, respondent went to the Court of Appeals on a petition for certiorari, thereat docketed as CA-G.R. No. 62229, imputing on the NLRC grave abuse of discretion. In its petition, respondent scored the NLRC for, among other things, extending the application of the expired POEA-approved employment contract beyond the one-month limit stipulated therein. [10] On 21 March 2002, the Court of Appeals rendered judgment , modifying the NLRC s decision by deleting altogether the award of disability compensation benefits, sickness wages and attorney s fees, thus: WHEREFORE, premises considered, the instant petition for certiorari is hereby DENIED, finding no grave abuse of discretion on the part of the NLRC. The Decision of the National Labor Relations Commission (NLRC) dated August 29, 2000 and the Resolution of October 31, 2000 denying petitioner s Motion for Reconsideration are hereby AFFIRMED with MODIFICATION, that the disability compensation benefits of US$60,000.00 and the sickness wages of US$2,452.00 are hereby deleted, without prejudice to claiming the same from the proper government agency. The award of attorney s fees is likewise deleted. In time, petitioner moved for reconsideration, but the appellate court denied the motion per its resolution of 03 July 2002. [12] Hence, petitioner s present recourse on the grounds that the Court of Appeals seriously erred:
[11]

I IN DELETING THE AWARD OF US$60,000.00 REPRESENTING THE MAXIMUM DISABILITY BENEFITS APPLYING THE PROVISIONS OF THE POEA STANDARD EMPLOYMENT CONTRACT. (A) PRIOR TO HIS ACCIDENT, THE EMPLOYMENT CONTRACT OF SEAFARER DELOS SANTOS HAS NOT YET BEEN TERMINATED, IN RELATION TO SECTION 2, PARAGRAPHS (A) AND (B) AND SECTION 18 (A), POE A STANDARD EMPLOYMENT CONTRACT. (B) THE CONTRACT OF EMPLOYMENT AT THE TIME OF SEAFARER DELOS SANTOS ACCIDENT HAS NOT YET EXPIRED BECAUSE IT WAS MUTUALLY EXTENDED BY THE PARTIES WHEN DELOS SANTOS WAS NOT SIGNED OFF AND REPATRIATED PRIOR TO SAID ACCIDENT. II IN CONCLUDING THAT NOTWITHSTANDING THE CONTINUATION OF DELOS SANTOS EMPLOYMENT ON BOARD THE SAME VESSEL AND UNDER THE SAME CONTRACT, IT IS THE PROVISIONS OF THE LABOR CODE, AS AMENDED, THAT SHALL GOVERN HIS EMPLOYMENT RELATIONS. III IN DELETING THE AWARD OF SICKNESS ALLOWANCE IN THE AMOUNT OF US$2,452.00. (A) THERE IS NO BASIS IN THE DELETION OF THE AWARD OF SICKNESS ALOWANCE ( sic) SINCE PAYMENT OF SOCIAL SECURITY SYSTEM SICK LEAVE BENEFIT IS INDEPENDENT, SEPARATE AND DISTINCT FROM THE SICKNESS ALLOWANCE PROVIDED FOR UNDER THE POEA STANDARD EMPLOYMENT CONTRACT. The petition is devoid of merit. As a rule, stipulations in an employment contract not contrary to statutes, public policy, public order or morals have the fo rce of law between the contracting parties.[13] An employment with a period is generally valid, unless the term was purposely intended [14] to circumvent the employee s right to his security of tenure. Absent a covering specific agreement and unless otherwise provided by law, the terms and conditions of employment of all employees in the private sector shall be governed by the Labor [15] Code and such rules and regulations as may be issued by the Department of Labor and Employment and such agencies charged with the administration and enforcement of the Code.

24

The differing conclusions arrived at by the NLRC, finding for the herein petitioner, and the Court of Appeals, siding in part with the herein respondent, on Delos Santos entitlement to disability benefits and sickness allowance are veritably attributable to the question of applicability, under the premises, of the POEA-SEC. The principal issue to be resolved here, therefore, boils down to: which, between the POEA-SEC and the Labor Code, governs the employer-employee relationship between Delos Santos and respondent after MV Wild Iris, as later renamed Super RoRo 100, returned to the country from its one-month conduction voyage to and from Japan. The Court of Appeals ruled against the governing applicability of the POEA-SEC and, on that basis, deleted the NLRC s award of US$60,000.00 and US$2,452.00 by way of disability benefits and sickness allowance, respectively. An excerpt of the appellate court s explanation: xxx Both parties do not dispute the existence of the POEA approved contract signed by the parties. The said contract is the law between the contracting parties and absent any showing that its provisions are wholly or in part contrary to law, morals, goo d policy, it shall be enforced to the lett er by the contracting parties (Metropolitan Bank and Trust Co. vs. Wong, G.R. No. 120859, June 26, 2001). The contract in question is for a duration of one (1) month. Being a valid contract between Delos Santos and the [respondent], the provisions thereof, specifically with respect to the one (1) month period of employment has the force of law between them (D.M. Consunji vs. NLRC, G.R. No. 116572, December 18, 2000). Perforce, the said contract has already expired and is no longer in effect. The fact that Delos Santos continued to work in the same vessel which sailed within Philippine waters does not mean that the POEA standard employment contract continues to be enforced between the parties. The employment of Delos Santos is within the Philippines, and not on a foreign shore. As correctly pointed out by [respondent], the provisions of the Labor Code shall govern their employer-employee relationship. xxx. (Words in bracket added.) The Court agrees with the conclusion of the Court of Appeals for two (2) main reasons. First, we the start with something elementary, i.e., POEA was created primarily to undertake a systematic program for overseas employment of Filipino workers [16] and to protect their rights to fair and equitable employment practices. And to ensure that overseas workers, including seafarers on board ocean-going vessels, are amply protected, the POEA is authorized to formulate employment standards in [17] accordance with welfare objectives of the overseas employment program. Given this consideration, the Court is at a loss to understand why the POEA-SEC should be made to continue to apply to domestic employment, as here, involving a Filipino seaman on board an inter-island vessel. Just as basic as the first reason is the fact that Delos Santos POEA-approved employment contract was for a definite term of one (1) month only, doubtless fixed to coincide with the pre-determined one-month long Philippines-Japan-Philippines conduction-voyage run. After the lapse of the said period, his employment under the POEA-approved contract may be deemed as functus oficio and Delos Santos employment pursuant thereto considered automatically terminated, there being no [18] mutually-agreed renewal or extension of the expired contract. This is as it should be. For, as we have held in the landmark [19] case of Millares v. National Labor Relations Commission: From the foregoing cases, it is clear that seafarers are considered contractual employees. Their employment is governed by the contracts they sign every time they are rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a certain period of time. They fall under the exception of Article 280 [of the Labor Code] whose employment has been fixed for a specific project or undertaking . . . We need not depart from the rulings of the Court in the two aforementioned cases which indeed constitute stare decisis with respect to the employment status of seafarers. (Underscoring and words in bracket added) [20] [21] Petitioner s posture, citing Section 2 (A) in relation to Section 18 of the POEA-SEC about the POEA approved contract still subsisting since Delos Santos was never signed off from the vessel and repatriated to Manila, the point of hire, is untenable. With the view we have of things, Delos Santos is deemed to have been signed off when he acceded to a new employment arrangement offered by the respondent. A seaman need not physically disembarked from a vessel at the expiration of his employment contract to have such contract considered terminated. And the repatriation aspect of the contract assumes significance only where the vessel remains in a foreign port. For, repatriation presupposes a return to one s country of origin or [22] citizenship. In the case at bar, however, there can be quibbling that MV Wild Iris returned to the port of Cebu with Delos Santos on board. Parenthetically, while the parties are agreed that their underlying contract was executed in the country, the records do not indicate what city or province of the Philippines is the specific point of hire. While petitioner says it is M anila, she did not bother to attach to her petition a copy of the contract of employment in question. Petitioner next submits, echoing the NLRC s holding, that the POEA-approved contract remained in full force and effect even after the expiry thereof owing to the interplay of the following circumstances: 1) Delos Santos, after such contract expiration, did not conclude another contract of employment with respondent, but was asked to remain and work on board the same vessel just the same; and 2) If the parties intended their employer-employee relationship to be under the aegis of a new contract, such intention should have been embodied in a new agreement. Contract extension or continuation by mutual consent appears to be petitioner s thesis. We are not persuaded. The fact that respondent retained Delos Santos and allowed him to remain on board the vessel cannot plausibly be interpreted, in context, as evidencing an intention on its part to continue with the POEA-SEC. In the practical viewpoint, there could have

25

been no sense in consenting to renewal since the rationale for the execution of the POEA-approved contract had already been served and achieved. At any rate, factors obtain arguing against the notion that respondent consented to contract extension under the same terms and conditions prevailing when the original contract expired. Stated a bit differently, there are compelling reasons to believe that respondent retained the services of the acceding Delos Santos, as the Court of Appeals aptly observed, but under domestic [23] terms and conditions. We refer first to the reduced salary of Delos Santos payable in Philippine peso which, significantly enough, he received without so much of a protest. As respondent stated in its Comment, without any controverting response from petitioner, Delos Santos, for the period ending October 31, 1995, was drawing a salary at the rate of P8,475.00 a month, whereas the compensation package stipulated under the POEA-approved contract provided for a US$613 basic monthly salary and a US$184 fixed monthly overtime pay. And secondly, MV Super RoRo 100 was no longer engaged in foreign trading as it was no longer intended as an ocean-going ship. Accordingly, it does not make sense why a seafarer of goodwill or a manning agency of the same disposition would insist on being regulated by an overseas employment agency under its standard employment [24] contract, which governs employment of Filipino seamen on board ocean-going vessels. Petitioner s submission about the parties not having entered into another employment contract after the expiration of the POEA-approved employment contract, ergo, the extension of the expired agreement, is flawed by the logic holding it together. For, it presupposes that an agreement to do or to give does not bind, unless it is embodied in a written instrument. It is elementary, however, that, save in very rare instances where certain formal requisites go into its validity, a contract, to be valid and binding between the parties, need not be in writing. A contract is perfected when the contracting minds agree on the object [25] And, as earlier discussed, several circumstantial indicia tended to prove that a new arrangement under and cause thereof. domestic terms was agreed upon by the principal players to govern the employment of Delos Santos after the return of MV Wild Iris to the country to engage in coastwise trading. Given the foregoing perspective, the disallowance under the decision subject of review of the petitioner s claim for maximum disability benefits and sickness allowance is legally correct. As it were, Delos Santos right to such benefits is predicated on the continued enforceability of POEA-SEC when he contracted his illness, which, needless to stress, was not the case. Likewise legally correct is the deletio n of the award of attorney s fees, the NLRC having failed to explain petitioner s entitlement thereto. As a matter of sound policy, an award of attorney s fee remains the exception rather than the rule. It must be stressed, as aptly observed by the appellate court, that it is necessary for the trial court, the NLRC in this case, to make express findings of facts and law that would bring the case within the exception. In fine, the factual, legal or equitable justification for the award [26] must be set forth in the text of the decision. The matter of attorney s fees cannot be touched once and only in the fallo of the [27] decision, else, the award should be thrown out for being speculative and conjectural. In the absence of a stipulation, [28] attorney s fees are ordinarily not recoverable; otherwise a premium shall be placed on the right to litigate. They are not awarded every time a party wins a suit. WHEREFORE, the petition is DENIED and the assailed Decision and Resolution of the Court of AppealsAFFIRMED.

No pronouncement as to costs. SO ORDERED.

26

G.R. No. 166365 September 30, 2005 DUTY FREE PHILIPPINES, Petitioners, vs. ROSSANO J. MOJICA, Respondent. DECISION YNARES-SANTIAGO, J.: 1 This petition for review on certiorari under Rule 45 of the Rules of Court seeks to annul and set aside the August 31, 2004 2 3 Decision of the Court of Appeals in CA-G.R. SP No. 76995, and its December 13, 2004 Resolution denying the motion for reconsideration. The antecedent facts show that on November 28, 1997, the Discipline Committee of Duty Free Philippines (DFP) rendered a 4 decision in DISCOM Case No. 97-027 finding Stock Clerk Rossano A. Mojica guilty of Neglect of Duty by causing considerable damage to or loss of materials, assets and property of DFP. Thus, Mojica was considered forcibly resigned from the service with forfeiture of all benefits except his salary and the monetary value of the accrued leave credits. 5 Mojica was formally informed of his forced resignation on Jan uary 14, 1998. Thereupon, he filed a complaint for illegal dismissal with prayer for reinstatement, payment of full back wages, damages, and attorney s fees, against DFP before the National Labo r Relations Commission (NLRC). On February 2, 2000, Labor Arbiter Facundo L. Leda rendered a Decision finding that Mojica was illegally dismissed. The dispositive portion of the Decision reads: WHEREFORE, decision is hereby rendered declaring the dismissal of complainant Rossano J. Mojica to be illegal such that respondent Duty Free Philippines is directed to reinstate him to his former or substantially equivalent position without loss of seniority rights and other privileges and to pay him the amount of TWO HUNDRED FIFTY NINE THOUSAND SEVENTEEN PESOS & 08/100 (P259,017.08) representing his backwages and attorney s fees, both awards being subject to further computation until actual reinstatement. 6 SO ORDERED. The NLRC reversed the ruling of the arbiter. It found that the dismissal was valid and with just cause. 7 Mojica s motion for reconsideration was denied, hence he filed a Petition for Certiorari under Rule 65 of the Rules of Court before the Court of Appeals, docketed as CA-G.R. SP No. 76995. The appellate court agreed with the arbiter that Mojica was not guilty of gross or habitual negligence that would warrant his dismissal. It found that there was no convincing evidence to prove that Mojica connived with other personnel in pilfering the stocks of DFP. Hence, this petition. Respondent Mojica is a civil service employee; therefore, jurisdiction is lodged not with the NLRC, but with the Ci vil Service Commission. 8 DFP was created under Executive Order (EO) No. 46 on September 4, 1986 primarily to augment the service facilities for tourists and to generate foreign exchange and revenue for the government. In order for the government to exercise direct and effective control and regulation over the tax and duty free shops, their establishment and operation was vested in the Ministry, now 9 Department of Tourism (DOT), through its implementing arm, the Philippine Tourism Authority (PTA). All the net profits from the merchandising operations of the shops accrued to the DOT. 10 As provided under Presidential Decree (PD) No. 564, PTA is a corporate body attached to the DOT. As an attached agency, the recruitment, transfer, promotion and dismissal of all its personnel was governed by a merit system established in accordance 11 12 with the civil service rules. In fact, all PTA officials and employees are subject to the Civil Service rules and regulations. Accordingly, since DFP is under the exclusive authority of the PTA, it follows that its officials and emplo yees are likewise subject to the Civil Service rules and regulations. Clearly then, Mojica s recourse to the Labor Arbiter was not proper. He should ha ve followed the procedure laid down in DFP s merit system and the Civil Service rules and regulations. 13 PD No. 807 or The Civil Service Decree of the Philippines declared that the Civil Service Commission shall be the central 14 personnel agency to set standards and to enforce the laws governing the discipline of civil servants. It categorically described the scope of Civil Service as embracing every branch, agency, subdivision, and instrumentality of the government, including 15 every government-owned or controlled corporation whether performing governmental or proprietary function. It construed an agency to mean any bureau, office, commission, administration, board, committee, institute, corporation, whether performing governmental or proprietary function, or any other unit of the National Government, as well as provincial, city or municipal 16 government, except as otherwise provided. 17 Subsequently, EO No. 180 defined "government employees" as all employees of all branches, subdivisions, instrumentalities, and agencies, of the Government, including government-owned or controlled corporations with original charters.18 It provided that the Civil Service and labor laws shall be followed in the resolution of complaints, grievances and cases involving gover nment employees.19 EO No. 292 or The Administrative Code of 1987 empowered the Civil Service Commission to hear and decide administrative cases instituted by or brought before it directly or on appeal, including contested appointments, and review decisions and 20 actions of its offices and of the agencies attached to it. 21 Thus, we held in Zamboanga City Water District v. Buat that:

27

There is no dispute that petitioner, a water district with an original charter, is a government -owned and controlled corporation. The established rule is that the hiring and firing of employees of government-owned and controlled corporations are governed by provisions of the Civil Service Law and Civil Service Rules and Regulations. Jurisdiction over the strike and the dismissa l of private respondents is therefore lodged not with the NLRC but with the Civil Service Commission. (Citations omitted) 22 In Philippine Amusement and Gaming Corp. v. Court of Appeals we also held that: It is now settled that, conformably to Article IX-B, Section 2(1), [of the 1987 Constitution] government-owned or controlled corporations shall be considered part of the Civil Service only if they have original charters, as distinguished from those c reated under general law. PAGCOR belongs to the Civil Service because it was created directly by PD 1869 on July 11, 1983. Consequently, controversies concerning the relations of the employee with the management of PAGCOR should come under the jurisdiction of the Merit System Protection Board and the Civil Service Commission, conformably to the Administrative Code of 1987. Section 16(2) of the said Code vest in the Merit System Protection Board the power inter alia to: a) Hear and decide on appeal administrative cases involving officials and employees of the Civil Service. Its decision shall be final except those involving dismissal or separation from the service which may be appealed to the Commission. Applying this rule, we have upheld the jurisdiction of Civil Service Authorities, as against that of the labor authorities, in controversies involving the terms of employment, and other related issues, of the Civil Service official and employees... EO No. 292 provided that civil service employees have the right to present their complaints or grievances to management and have them adjudicated as expeditiously as possible in the best interest of the agency, the government as a whole, and the employee concerned. Such complaint or grievances shall be resolved at the lowest possible level in the department or agency, as the case may be, and the employee shall have the right to appeal such decision to higher authorities. In case any dispute remains unresolved after exhausting all the available remedies under existing laws and procedure, the parties may jointly refer 23 the dispute in the Public Sector Labor Management Council for appropriate action. In sum, the labor arbiter and the NLRC erred in taking cognizance of the complaint as jurisdiction over the complaint for illegal dismissal is lodged with the Civil Service Commission. The Court of Appeals likewise erred in sustaining the labor arbiter. WHEREFORE, the August 31, 2004 Decision of the Court of Appeals in CA-G.R. SP No. 76995; and its December 13, 2004 Resolution, are ANNULLED and SET ASIDE. The complaint for illegal dismissal with prayer for reinstatement, payment of backwages and attorney s fees, is DISMISSED. SO ORDERED.

28

G.R. No. 85279 July 28, 1989 SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), DIONISION T. BAYLON, RAMON MODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO DE ALDAY, SERGIO ARANETA, PLACIDO AGUSTIN, VIRGILIO MAGPAYO, petitioner, vs. THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. CEZAR C. PERALEJO, RTC, BRANCH 98, QUEZON CITY, respondents. Vicente T. Ocampo & Associates for petitioners. CORTES, J: Primarily, the issue raised in this petition is whether or not the Regional Trial Court can enjoin the Social Security System Employees Association (SSSEA) from striking and order the striking employees to return to work. Collaterally, it is whether o r not employees of the Social Security System (SSS) have the right to strike. The antecedents are as follows: On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City a complaint for damages with a prayer for a writ of preliminary injunction against petitioners, alleging that on June 9, 1987, the officers a nd members of SSSEA staged an illegal strike and baricaded the entrances to the SSS Building, preventing non-striking employees from reporting for work and SSS members from transacting business with the SSS; that the strike was reported to the Public Secto r Labor - Management Council, which ordered the strikers to return to work; that the strikers refused to return to work; and that the SSS suffered damages as a result of the strike. The complaint prayed that a writ of preliminary injunction be issued to en join the strike and that the strikers be ordered to return to work; that the defendants (petitioners herein) be ordered to pay damages; and that the strike be declared illegal. It appears that the SSSEA went on strike after the SSS failed to act on the union's demands, which included: implementation of the provisions of the old SSS-SSSEA collective bargaining agreement (CBA) on check-off of union dues; payment of accrued overtime pay, night differential pay and holiday pay; conversion of temporary or contractual employees with six (6) months or more of service into regular and permanent employees and their entitlement to the same salaries, allowances and benefits given to other regular employees of the SSS; and payment of the children's allowance of P30.00, and after the SSS deducted certain amounts from the salaries of the employees and allegedly committed acts of discrimination and unfair labor practices [Rollo, pp. 21-241]. The court a quo, on June 11, 1987, issued a temporary restraining order pending resolution of the application for a writ of preliminary injunction [Rollo, p. 71.] In the meantime, petitioners filed a motion to dismiss alleging the trial court's lack of jurisdiction over the subject matter [Rollo, pp. 72 -82.] To this motion, the SSS filed an opposition, reiterating its prayer for the issuance of a writ of injunction [Rollo, pp. 209-222]. On July 22,1987, in a four-page order, the court a quo denied the motion to dismiss and converted the restraining order into an injunction upon posting of a bond, after finding that the strike was illegal [Rollo, pp. 83- 86]. As petitioners' motion for the reconsideration of the aforesaid order was also denied on August 14, 1988 [Rollo, p. 94], petitioners filed a petition for certiorari and prohibition with preliminary injunction before this Court. Their petition was docketed as G.R. No. 79577. In a resolution dated October 21, 1987, the Court, through the Third Division, resol ved to refer the case to the Court of Appeals. Petitioners filed a motion for reconsideration thereof, but during its pendency the Court of Appeals on March 9,1988 promulgated its decision on the referred case [Rollo, pp. 130-137]. Petitioners moved to recall the Court of Appeals' decision. In the meantime, the Court on June 29,1988 denied the motion for reconsideration in G.R. No. 97577 for being moot and academic. Petitioners' motion to recall the decision of the Court of Appeals was also denied in view of this Court's denial of the motion for reconsideration [Rollo, pp. 141- 143]. Hence, the instant petition to review the decision of the Court of Appeals [Rollo, pp. 12-37]. Upon motion of the SSS on February 6,1989, the Court issued a temporary restraining order enjoining the petitioners from staging another strike or from pursuing the notice of strike they filed with the Department of Labor and Employment on January 25, 1989 and to maintain the status quo [Rollo, pp. 151-152]. The Court, taking the comment as answer, and noting the reply and supplemental reply filed by petitioners, considered the issues joined and the case submitted for decision. The position of the petitioners is that the Regional Trial Court had no jurisdiction to hear the case initiated by the SSS an d to issue the restraining order and the writ of preliminary injunc tion, as jurisdiction lay with the Department of Labor and Employment or the National Labor Relations Commission, since the case involves a labor dispute. On the other hand, the SSS advances the contrary view, on the ground that the employees of the SSS are covered by civil service laws and rules and regulations, not the Labor Code, therefore they do not have the right to strike. Since neither the DOLE nor the NLRC has jurisdiction over the dispute, the Regional Trial Court may enjoin the employees from str iking. In dismissing the petition for certiorari and prohibition with preliminary injunction filed by petitioners, the Court of Appe als held that since the employees of the SSS, are government employees, they are not allowed to strike, and may be enjoined by the Regional Trial Court, which had jurisdiction over the SSS' complaint for damages, from continuing with their strike.

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Thus, the sequential questions to be resolved by the Court in deciding whether or not the Court of Appeals erred in finding that the Regional Trial Court did not act without or in excess of jurisdiction when it took cognizance of the case and enjoined the strike are as follows: 1. Do the employees of the SSS have the right to strike? 2. Does the Regional Trial Court have jurisdiction to hear the case initiated by the SSS and to enjoin the strikers from continuing with the strike and to order them to return to work? These shall be discussed and resolved seriatim I The 1987 Constitution, in the Article on Social Justice and Human Rights, provides that the State "shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law" [Art. XIII, Sec. 31]. By itself, this provision would seem to recognize the right of all workers and employees, including those in the public sector, to strike. But the Constitution itself fails to expressly confirm this impression, for in the Sub -Article on the Civil Service Commission, it provides, after defining the scope of the civil service as "all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters," that "[t]he right to selforganization shall not be denied to government employees" [Art. IX(B), Sec. 2(l) and (50)]. Parenthetically, the Bill of Rights also provides that "[tlhe right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not abridged" [Art. III, Sec. 8]. Thus, while there is no question that the Constitution recognizes the right of government employees to organize, it is silent as to whether such recognition also inclu des the right to strike. Resort to the intent of the framers of the organic law becomes helpful in understanding the meaning of these provisions. A reading of the proceedings of the Constitutional Commission that drafted the 1987 Constitution would show that in recognizing the right of government employees to organize, the commissioners intended to limit the right to the formation of unions or associations only, without including the right to strike. Thus, Commissioner Eulogio R. Lerum, one of the sponsors of the provision that "[tlhe right to self-organization shall not be denied to government employees" [Art. IX(B), Sec. 2(5)], in answer to the apprehensions expressed by Commissioner Ambrosio B. Padilla, Vice-President of the Commission, explained: MR. LERUM. I think what I will try to say will not take that long. When we proposed this amendment providing for self organization of government employees, it does not mean that because they have the right to organize, they also have the right to strike. That is a different matter. We are only talking about organizing, uniting as a union. With regard to the right to strike, everyone will remember that in the Bill of Rights, there is a provision that the right to form associations or societies whos e purpose is not contrary to law shall not be abridged. Now then, if the purpose of the state is to prohibit the strikes coming from employees exercising government functions, that could be done because the moment that is prohibited, then the union which will go on strike will be an illegal union. And that provision is carried in Republic Act 875. In Republic Act 875, workers, including those from the government-owned and controlled, are allowed to organize but they are prohibited from striking. So, the fear of our honorable Vice- President is unfounded. It does not mean that because we approve this resolution, it carries with it the right to strike. That is a different matter. As a matter of fact, that subject is now being discussed in the Committee on Social Ju stice because we are trying to find a solution to this problem. We know that this problem exist; that the moment we allow anybody in the government to strike, then what will happen if the members of the Armed Forces will go on strike? What will happen to those people trying to protect us? So that is a matter of discussion in the Committee on Social Justice. But, I repeat, the right to form an organization does not carry with it the right to strike. [Record of the Constitutional Commission, vol. 1, p. 569]. It will be recalled that the Industrial Peace Act (R.A. No. 875), which was repealed by the Labor Code (P.D. 442) in 1974, expressly banned strikes by employees in the Government, including instrumentalities exercising governmental functions, but excluding entities entrusted with proprietary functions: .Sec. 11. Prohibition Against Strikes in the Government. The terms and conditions of employment in the Government, including any political subdivision or instrumentality thereof, are governed by law and it is declared to be th e policy of this Act that employees therein shall not strike for the purpose of securing changes or modification in their terms and conditions of employment. Such employees may belong to any labor organization which does not impose the obligation to strike or to join in strike:Provided, however, That this section shall apply only to employees employed in governmental functions and not those employed in proprietary functions of the Government including but not limited to governmental corporations. No similar provision is found in the Labor Code, although at one time it recognized the right of employees of government corporations established under the Corporation Code to organize and bargain collectively and those in the civil service to "form organizations for purposes not contrary to law" [Art. 244, before its amendment by B.P. Blg. 70 in 1980], in the same breath it provided that "[t]he terms and conditions of employment of all government employees, including employees of government owned and controlled corporations, shall be governed by the Civil Service Law, rules and regulations" [now Art. 276]. Understandably, the Labor Code is silent as to whether or not government employees may strike, for such are excluded from its coverage [Ibid]. But then the Civil Service Decree [P.D. No. 807], is equally silent on the matter. On June 1, 1987, to implement the constitutional guarantee of the right of government employees to organize, the President issued E.O. No. 180 which provides guidelines for the exercise of the right to organize of government employees. In Section 14 thereof, it is provided that "[t]he Civil Service law and rules governing concerted activities and strikes in the government service

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shall be observed, subject to any legislation that may be enacted by Congress." The President was apparently referring to Memorandum Circular No. 6, s. 1987 of the Civil Service Commission under date April 21, 1987 which, "prior to the enactment by Congress of applicable laws concerning strike by government employees ... enjoins under pain of administrative sanctions, all government officers and employees from staging strikes, demonstrations, mass leaves, walk-outs and other forms of mass action which will result in temporary stoppage or disruption of public service." The air was thus cleared of the confusion. At present, in the absence of any legislation allowing government employees to strike, recognizing their right to do so, or regu lating the exercise of the right, they are prohibited from striking, by express provisio n of Memorandum Circular No. 6 and as implied in E.O. No. 180. [At this juncture, it must be stated that the validity of Memorandum Circular No. 6 is not at issue]. But are employees of the SSS covered by the prohibition against strikes? The Court is of the considered view that they are. Considering that under the 1987 Constitution "[t]he civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters" [Art. IX(B), Sec. .2(l) see also Sec. 1 of E.O. No. 180 where the employees in the civil service are denominated as "government employees"] and that the SSS is one such government-controlled corporation with an original charter, having been created under R.A. No. 1161, its employees are part of the civil service [NASECO v. NLRC, G.R. Nos. 69870 & 70295, November 24,1988] and are covered by the Civil Service Commission's memorandum prohibiting strikes. This being the case, the strike staged by the employees of the SSS was illegal. The statement of the Court in Alliance of Government Workers v. Minister of Labor and Employment [G.R. No. 60403, August 3, 1:983, 124 SCRA 11 is relevant as it furnishes the rationale for distinguishing between workers in the private sector and government employees with regard to the right to strike: The general rule in the past and up to the present is that 'the terms and conditions of employment in the Government, including any political subdivision or instrumentality thereof are governed by law" (Section 11, the Industrial Peace Act, R.A. No. 875, as amended and Article 277, the Labor Code, P.D. No. 442, as amended). Since the terms and conditions of government employment are fixed by law, government workers cannot use the same weapons employed by workers in the private sector to secure concessions from their employers. The principle behind labor unionism in private industry is that industrial peace cannot be secured through compulsion by law. Relations between private employers and their employees rest on an essentially voluntary basis. Subject to the minimum requirements of wage laws and other labor and welfare legislation, the terms and conditions of employment in the unionized private sector are settled through the process of collective bargaining. In government employment, however, it is the legislature and, where properly given delegated power, the administrative heads of government which fix the terms and conditions of employment. And this is effected through statutes or administrative circulars, rules, and regulations, not through collective bargaining agreements. [At p. 13; Emphasis supplied]. Apropos is the observation of the Acting Commissioner of Civil Service, in his position paper submitted to the 1971 Constitutional Convention, and quoted with approval by the Court in Alliance, to wit: It is the stand, therefore, of this Commission that by reason of the nature of the public employer and the peculiar character of the public service, it must necessarily regard the right to strike given to unions in private industry as not applying to public employees and civil service employees. It has been stated that the Government, in contrast to the private employer, protects the interest of all people in the public service, and that accordingly, such conflicting interests as are present in private labor relations could not exist in the relations between government and those whom they employ. [At pp. 16-17; also quoted in National Housing Corporation v. Juco, G.R. No. 64313, January 17,1985,134 SCRA 172,178-179]. E.O. No. 180, which provides guidelines for the exercise of the right to organize of government employees, while clinging to the same philosophy, has, however, relaxed the rule to allow negotiation where the terms and co nditions of employment involved are not among those fixed by law. Thus: .SECTION 13. Terms and conditions of employment or improvements thereof, except those that are fixed by law, may be the subject of negotiations between duly recognized employees' organizations and appropriate government authorities. The same executive order has also provided for the general mechanism for the settlement of labor disputes in the public sector to wit: .SECTION 16. The Civil Service and labor laws and procedures, whenever applicable, shall be followed in the resolution of complaints, grievances and cases involving government employees. In case any dispute remains unresolved after exhausting all the available remedies under existing laws and procedures, the parties may jointly refer the dispute to the [Public Sector LaborManagement] Council for appropriate action. Government employees may, therefore, through their unions or associations, either petition the Congress for the betterment of the terms and conditions of employment which are within the ambit of legislation or negotiate with the appropriate government agencies for the improvement of those which are not fixed by law. If there be any unresolved grievances, the dispute may be referred to the Public Sector Labor - Management Council for appropriate action. But employees in the civil service may not resort to strikes, walk-outs and other temporary work stoppages, like workers in the private sector, to pressure the Govemment to accede to their demands. As now provided under Sec. 4, Rule III of the Rules and Regulations to Govern the Exercise of the Right of Government- Employees to Self- Organization, which took effect after the instant dispute arose, "[t]he terms and conditions of employment in the government, including any political subdivision or instrumentality thereof and governmentowned and controlled corporations with original charters are governed by law and employees therein shall not strike for the purpose of securing changes thereof." II

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The strike staged by the employees of the SSS belonging to petitioner union being prohibited by law, an injunction may be issued to restrain it. It is futile for the petitioners to assert that the subject labor dispute falls within the exclusive jurisdiction of the NLRC and, hence, the Regional Trial Court had no jurisdiction to issue a writ of injunction enjoining the continuance of the strike. The Labor Code itself provides that terms and conditions of employment of government employees shall be governed by the Civil Service Law, rules and regulations [Art. 276]. More importantly, E.O. No. 180 vests the Public Sector Labor - Management Council with jurisdiction over unresolved labor disputes involving government employees [Sec. 16]. Clearly, the NLRC has no jurisdiction over the dispute. This being the case, the Regional Trial Court was not precluded, in the exercise of its general jurisdiction under B.P. Blg. 129, as amended, from assuming jurisdiction over the SSS's complaint for damages and issuing the injunctive writ prayed fo r therein. Unlike the NLRC, the Public Sector Labor - Management Council has not been granted by law authority to issue writs of injunction in labor disputes within its jurisdiction. Thus, since it is the Council, and not the NLRC, that has jurisdiction over the instant labor dispute, resort to the general courts of law for the issuance of a writ of injunction to enjoin the strike is appropriate. Neither could the court a quo be accused of imprudence or overzealousness, for in fact it had proceeded with caution. Thus, after issuing a writ of injunction enjoining the continuance of the strike to prevent any further disruption of public servic e, the respondent judge, in the same order, admonished the parties to refer the unresolved controversies emanating from their employer- employee relationship to the Public Sector Labor - Management Council for appropriate action [Rollo, p. 86]. III In their "Petition/Application for Preliminary and Mandatory Injunction," and reiterated in their reply and supplemental reply, petitioners allege that the SSS unlawfully withheld bonuses and benefits due the individual petitioners and they pray that the Court issue a writ of preliminary prohibitive and mandatory injunction to restrain the SSS and its agents from withholding payment thereof and to compel the SSS to pay them. In their supplemental reply, petitioners annexed an order of the Civil Service Commission, dated May 5, 1989, which ruled that the officers of the SSSEA who are not preventively suspended and who are reporting for work pending the resolution of the administrative cases against them are entitled to their salaries, year -end bonuses and other fringe benefits and affirmed the previous order of the Merit Systems Promotion Board. The matter being extraneous to the issues elevated to this Court, it is Our view that petitioners' remedy is not to petition this Court to issue an injunction, but to cause the execution of the aforesaid order, if it has already become final. WHEREFORE, no reversible error having been committed by the Court of Appeals, the instant petition for review is hereby DENIED and the decision of the appellate court dated March 9, 1988 in CA-G.R. SP No. 13192 is AFFIRMED. Petitioners' "Petition/Application for Preliminary and Mandatory Injunction" dated December 13,1988 is DENIED. SO ORDERED. Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

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G.R. No. 82819 February 8, 1989 LUZ LUMANTA, ET AL., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and FOOD TERMINAL, INC., respondents. J. S. Torregoza and Associates for petitioners. The Solicitor General for public respondent. The Government Corporate Counsel for Food Terminal, Inc. RESOLUTION FELICIANO, J.: The present Petition for certiorari seeks to annul and set aside the Decision of the National Labor Relations Commission rendered on 18 March 1988 in NLRC-NCR Case No. 00- 0301035-87, entitled "Luz Lumanta, et al., versus Food Terminal Incorporated." The Decision affirmed an order of the Labor Arbiter dated 31 August 1987 dismissing petitioners' complaint for lack of Jurisdiction. On 20 March 1987, petitioner Luz Lumanta, joined by fifty-four (54) other retrenched employees, filed a complaint for unpaid 'd retrenchment or separation pay against private respondent Food Terminal, Inc. ("FTI") with the Department of Labor and Employment. The complaint was later amended to include charges of underpayment of wages and non-payment of emergency cost of living allowances (ECOLA). Private respondent FTI moved to dismiss the complaint on the ground of lack of jurisdiction. It argued that being a governmentowned and controlled corporation, its employees are governed by the Civil Service Law not by the Labor Code, and that claims arising from employment fall within the jurisdiction of the Civil Service Commission and not the Department of Labor and Employment. The petitioners opposed the Motion to Dismiss contending that although FTI is a corporation owned and controlled by the government, it has still the marks of a private corporation: it directly hires its employees without seeking approval from the Civil Service Commission and its personnel are covered by the Social Security System and not the Government Service Insurance System. Petitioners also argued that being a government-owned and controlled corporation without original charter, private respondent FTl clearly falls outside the scope of the civil service as marked out in Section 2 (1), Article IX of the 1987 Constitution. 1 On 31 August 1987, Labor Arbiter Isabel P. Oritiguerra issued an Order, the dispositive part of which read: On account of the above findings the instant case is governed by the Civil Service Law. The case at bar lies outside the jurisdictional competence of this Office. WHEREFORE, premises considered this case is hereby directed to be DISMISSED for lack of jurisdiction of this Office to hear and decide the case. SO ORDERED. On 18 March 1988, the public respondent National Labor Relations Commission affirmed on appeal the order of the Labor Arbiter and dismissed the petitioners' appeal for lack of merit. Hence this Petition for Certiorari. The only question raised in the present Petition is whether or not a labor law claim against a government-owned and controlled corporation, such as private respondent FTI, falls within the jurisdiction of the Department of Labor and Employment. In refusing to take cognizance of petitioners' complaint against private respondent, the Labor Arbiter and the National Labor 2 Relations Commission relied chiefly on this Court's ruling in National Housing Authority v. Juco, which held that "there should no longer be any question at this time that employees of government-owned or controlled corporations are governed by the civil service law and civil servic e rules and regulations. Juco was decided under the 1973 Constitution, Article II-B, Section 1 (1) of which provided: The civil service embraces every branch, agency, subdivision, and instrumentality of the Government, including every government-owned or controlled corporation. The 1987 Constitution which took effect on 2 February 1987, has on this point a notably different provision which reads: The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, includ ing governmentowned or controlled corporations with original charter. (Article IX-B, Section 2 [1]). The Court, in National Service Corporation (NASECO) v. National Labor Relations Commission, G.R. No. 69870, promulgated on 29 November 1988, 3 quoting extensively from the deliberations 4 of the 1986 Constitutional Commission in respect of the intent and meaning of the new phrase "with original charter," in effect held that government-owned and controlled corporations with original charter refer to corporations chartered by special lawas distinguished from corporations organized under our general incorporation statute-the Corporation Code. InNASECO, the company involved had been organized under the general incorporation statute and was a subsidiary of the National Investment Development Corporation (NIDC) which in turn was a subsidiary of the Philippine National Bank, a bank chartered by a special statute. Thus, government-owned or controlled corporations like NASECO are effectively excluded from the scope of the Civil Service.

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It is the 1987 Constitution, and not the case law embodied in Juco, which applies in the case at bar, under the principle that 6 jurisdiction is determined as of the time of the filing of the complaint. At the time the complaint against private respondent FTI was filed (i.e., 20 March 1987), and at the time the decisions of the respondent Labor Arbiter and National Labor Relations Commission were rendered (i.e., 31 August 1987 and 18 March 1988, respectively), the 1987 Constitution had already come into effect. latter of Instruction No. 1013, dated 19 April 1980, included Food Terminal, Inc. in the category of "government-owned or 7 controlled corporations." Since then, FTI served as the marketing arm of the National Grains Authority (now known as the National Food Authority). The pleadings show that FTI was previously a privately owned enterprise, created and organized under 8 the general incorporation law, with the corporate name "Greater Manila Food Terminal Market, Inc." The record does not indicate the precise amount of the capital stock of FM that is owned by the government; the petitioners' claim, and this has not been disputed, that FTl is not hundred percent (100%) government-owned and that it has some private shareholders. We conclude that because respondent FTI is government-owned and controlled corporation without original charter, it is the Department of Labor and Employment, and not the Civil Service Commission, which has jurisdiction over the dispute arising from employment of the petitioners with private respondent FTI, and that consequently, the terms and conditions of such employment are governed by the Labor Code and not by the Civil Service Rules and Regulations. Public respondent National Labor Relations Commission acted without or in excess of its jurisdiction in dismissing petitioners complaint. ACCORDINGLY, the Petition for certiorari is hereby GRANTED and the Decision of public respondent Labor Arbiter dated 31 August 1987 and the Decision of public respondent Commission dated 18 March 1988, both in NLRC-NCR Case No. 00-03-0103587 are hereby SET ASIDE. The case is hereby REMANDED to the Labor Arbiter for further appropriate proceedings. Fernan, C.J., Gutierrez, Jr., Bidin, and Cortes, JJ., concur.

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G.R. No. L-59229 August 22, 1991 HIJOS DE F. ESCAO INC., and PIER 8 ARRASTRE AND STEVEDORING SERVICES, INC., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, NATIONAL ORGANIZATION OF WORKINGMEN (NOWM) PSSLU -TUCP and ROLANDO VILLALOBOS, respondents. Beltran, Beltran & Beltran for petitioners. Bautista, Santiago & Associates for private respondents. FELICIANO, J.:p Petitioners seek to set aside the Decision of the National Labor Relations Commission ("NLRC") dated 11 November 1981, which affirmed the Decision of the Labor Arbiter dated 28 February 1980. Private respondent National Organization of Workingmen ("NOWM") PSSLU-TUCP is a labor organization that counts among its members a majority of the laborers of petitioner Pier 8 Arrastre & Stevedoring Services, Inc. ("PIER 8 A&S") consisting, among others, of stevedores, dockworkers, sweepers and forklift operators (hereinafter collectively referred to as "the stevedores"). On 31 July 1978, NOWM PSSLU-TUCP and about 300 stevedores filed with the then Ministry of Labor and Employment ("MOLE") a 1 complaint for unfair labor practice ULP and illegal dismissal against PIER 8 A&S. On 8 September 1978, NOWM PSSLU-TUCP amended its complaint to include the monetary claims of the stevedores for overtime compensation, legal holiday pay, emergency cost of living allowance, 13th month pay, night shift differential pay, a nd the difference between the salaries they received and that prescribed under the minimum wage law. The complaint was also 2 amended to implead petitioner Hijos de F. Escao, Inc. (Escao) as respondent before the MOLE. The MOLE Director in the National Capital Region certified for compulsory arbitration only the claims for illegal dismissal a nd ULP Considering that NOWM PSSLU-TUCP wanted to include as well the other issues it had raised in the amended complaint, it filed a motion for reconsideration. The motion was denied because money claims, according to the MOLE Director, should be brought against Escao and PIER 8 A&S in a separate complaint. On the basis of the position papers submitted by the parties and the annexes attached thereto, the case was considered 3 submitted for resolution. On 28 February 1980, the Labor Arbiter rendered a Decision with the following dispositive portion: WHEREFORE, consonant with the foregoing premises, the respondents Hijos de F. Escao and Pier 8 Arrastre and Stevedoring Services, Inc. are hereby found guilty of committing acts of unfair labor practice and are ordered to jointly and sever ally reinstate all of the petitioners named in the amended complaint, with payment of full backwages counted from the time they were illegally dismissed which was on August 10, 1978 up to March 27, 1979, inclusive, when the petitioners admitted having received return to work notice from the respondent but refused to comply in view of the pendency of the present case, based on their individual rate at the time of their dismissal or on the minimum wage then prevailing whichever is more beneficial t o them. For purposes of this decision, the Socio-Economic Analyst of this branch is hereby directed to compute the backwages of the individual petitioners as mandated herein, and to submit his report within ten 10 days from receipt hereof which shall form p art of this award. SO ORDERED. Petitioners appealed to the NLRC which, however, affirmed the Decision of the Labor Arbiter. The instant Petition for certiorari imputes grave abuse of discretion to the NLRC in upholding the finding of the Labor Arbiter that the stevedores are employees not only of PIER 8 A&S but also of Escao. Petitioners also assail that portion of the Decision which directed them to reinstate the dismissed stevedores with the obligation to pay backwages from 10 August 1978 to 27 March 1979. In his Decision, the Labor Arbiter took the view that PIER 8 A&S was a labor only contractor and held that Escao was the principal employer of the stevedores. For that reason, the Labor Arbiter adjudged the petitioners solidarily liable for payment of backwages to the stevedores as well as for reinstatement. While petitioner PIER 8 A&S does not dispute that the stevedores were its employees, petitioner Escao denies the existence of an employer-employee relationship between it and the stevedores. Escao therefore contends that liability, if any, should attach only to PIER 8 A&S. PIER 8 A&S is a corporation providing Arrastre and stevedoring services to vessels docked at Pier 8 of the Manila North Harbor. Prior to the incorporation of PIER 8 A&S two (2) stevedoring companies had been servicing vessels docking at Pier 8. One of these was the Manila Integrated Services, Inc. MISI which was servicing Escao vessels, then berthing at Pier 8. The other wa s the San Nicolas Stevedoring and Arrastre Services, Inc. (SNSASI) which was servicing Compania Maritima vessels. Aside, of course, from MISI and SNSASI there were individual contractors known as the "cabos" who were operating in Pier 8. On 11 July 1974, the Philippine Port Authority ("PPA") was created pursuant to the policy of the State to implement an integrated program of port development for the entire country. 4 Towards this end, the PPA issued Administrative Order No. 1377 specifically adopting the policy of "one pier, one Arrastre and/or stevedoring company." MISI and SNSASI merged to form the Pier 8 Arrastre and Stevedoring Services, Inc. Sometime in June 1978, Escao had transferred berth to Pier 16 with the approval of the PPA. PIER 8 A&S then started to encounter problems; it found its business severely reduced with only Compania Maritima vessels to service. Even if it had

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wanted to continue servicing the vessels of Escao at Pier 16, that was simply not possible as there was another company exclusively authorized to handle and render Arrastre and stevedoring services at Pier 16. Because of its resulting manpower surplus, PIER 8 A&S altered the work schedule of its stevedores by rotating them. The rotation scheme was resisted by the stevedores, especially those formerly assigned to service Escao vessels. It appears that the employees formerly belonging to MISI continued to service Escao vessels in like manner that those employees formerly belonging to SNSASI continued to service Compania Maritima vessels, although MISI and SNSASI had already merged to form PIER 8 A&S The affected stevedores boycotted Pier 8 leading to their severance from employment by PIER 8 A&S on 10 August 1978. Their refusal to work continued even after they were served with a return-to-work order. The stevedores claim that since they had long been servicing Escao vessels, i.e. from the time Escao was exclusively serviced by MISI until the time MISI was merged with SNSASI to form PIER 8 A&S they should also be considered as employees of Escao. Escao disclaimed any employment relationship with the stevedores. In its Position Paper, Escao alleged that the stevedores are included in the payroll of PIER 8 A&S and that the SSS and Medicare contributions of the stevedores are paid by PIER 8 A&S as well. It is firmly settled that the existence or non-existence of the employer-employee relationship is commonly to be determined by examination of certain factors or aspects of that relationship. These include: (a) the manner of selection and engagement of the putative employee; (b) the mode of payment of wages; (c) the presence or absence of the power of dismissal; and (d) the 5 presence or absence of a power to control the putative employee's conduct. The Court notes that in finding against PIER 8 A&S and Escao the Labor Arbiter relied solely on the position paper of the parties. The record of the case is bare of evidence tending to support such allegations; what is found in the record instead are the selfserving statements from both parties. It is not clear to the Court from examination of the record which entity paid the salaries of the stevedores. While the stevedores attached to their amended complaint a list of their daily wages set forth opposite their 6 individual names under the heading "Hijos de F. Escao Inc. and/or Pier 8 Arrastre and Stevedoring Services, Inc. apparently to show that they are paid for their services by either or both of petitioners, they did not submit direct evidence, e.g., copie s of payrolls and remittances to the SSS and Medicare, establishing this fact. Further, the stev edores failed to substantiate their allegation that the supervisors of Escao had control over them while discharging their (stevedores') duties. On the contrary, their Position Paper submitted to the Labor Arbiter disclosed that the supervisors of Escao "merely supervised" them. The record includes letters written by the National President of NOWM PSSLU-TUC to which the stevedores belong-relating to collective bargaining and other operating matters, were all addressed to the management of PIER 8 A&S indicating that they recognized PIER 8 A&S as their employer. Specifically, in the letter dated 21 May 1977, the stevedores proposed that PIER 8 A&S recognize their union as the sole and exclusive representative of the stevedores for the purpose of collective bargaining. They also sought to submit for collective bargaining with PIER 8 A&S such other labor standard issues as wage increases, 13th month 7 pay and vacation and sick leave pay. The stevedores, however, now contend that PIER 8 A&S is not an independent contract but a labor only contractor. In their Amended Complaint and Position Paper, the stevedores alleged that: (1) They perform their duties or work assignments under the close supervision of supervisors of respondent Hijos de F. Escao Inc.; (2) The machineries, equipment, tools and other facilities complainants used, while in the performance of their jobs, are owned by respondent Hijos de F. Escao, Inc.; (3) The jobs they were performing from the time they were first employed, until their dismissals , are principal phases of respondent's operations; and (4) The so-called Pier 8 Arrastre & Stevedoring Services, Inc. is a mere middleman; its vital role is purely one of supplying workers to respondent Hijos de F. Escao, Inc. in short, a mere recruiting agent. Plainly, said contractor can be categorized as an agent of respondent Hijos de F. Escao, Inc. as it performs activities directly related to the principal business of said Hijos de F. Escao, Inc. Although the record does not show that the stevedores had submitted any evidence to fortify their claim that PIER 8 A&S is a labor only contractor, the Labor Arbiter simply conceded that claim to be factual. The Labor Arbiter added that the business of PIER 8 A&S is "desirable and indispensable in the business of Hijos de F. Escao and without [the stevedores], its vessels could not be operated." The Court is unable to agree with the conclusion reached by the Labor Arbiter, particularly that portion where the Labor Arbiter supposed stevedoring to be an indispensable part of the business of Escao. Escao is a corporation engaged in inter-island shipping business, being the operator of the Escao Shipping Lines. It was not alleged, nor has it been shown, that Escao or any other shipping company is also engaged in Arrastre and stevedoring services. Stevedoring is not ordinarily included in the business of transporting goods, it (stevedoring) being a special kind of service which involves the loading unloading of cargo on or from a vessel on port. It consists of the handling of cargo from the hold of the ship to the dock, in case of pier-side unloading, 8 or to a barge, in case of unloading at sea. The loading on a ship of outgoing cargo is also part of stevedoring work. Arrastre, upon the other hand, involves the handling of cargo deposited on the wharf or between the establishment of the consignee or 9 shipper and the ships tackle. Considering that a shipping company is not normally or customarily engaged in stevedoring and arrastre activities either for itself o r other vessels, it contracts with other companies offering those services. The employees, however, of the stevedoring and/or arrastre company should not be deemed the employees of the shipping company, in the

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absence of any showing, that the arrastre and/or stevedoring company in fact acted as an agent only of the shipping company. No such showing was made in this case. We turn next to the stevedores' contention that PIER 8 A&S is guilty of ULP. In this respect, the Labor Arbiter had found tha t: Now comes the issue of unfair labor practice. This Labor Arbiter believes that respondents are guilty as charged. The unfair labor practice acts of the respondents started when they came to know that the petitioners have organized themselves and affiliated with the NOWM Subsequent acts of the respondents like requiring the petitioners to disaffiliate with the NOWM and affiliate with the General Maritime Stevedores Union and later on to Independent Workers Union, requiring them to sign applications for membership therein, they were threatened and coerced, are all acts of unfair labor practices. Thereafter, the petitioners' working schedules were rotated when the respondent Hijos de F. Escao transferred to Pier 16 through the alleged approval of the Philippine Port Authority and later on the said petitioners were left without work, were all in furtherance of such unfair labor 10 practice acts. ... Both the Constitution and the Labor Code guarantee to the stevedores a right to self-organization. It was unlawful for PIER 8 A&S to deprive them of that right by its undue interference. The Constitution (Article III, Section 7) expressly recognizes t he right of employees, whether of the public or the private sector, to form unions. Article 248 of the Labor Code provides: Art. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of the following unfair labor practice: (a) To interfere with, restrain or coerce employees in the exercise of their right to self - organization; (b) To require as a condition of employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs; (c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self-organization; (d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization , including the giving of financial or other support to it or its organizations or supporters; (e) To discriminate in regard to wages, hours of work, and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. xxx xxx xxx (Emphasis supplied.) Not only was PIER 8 A&S guilty of ULP; it was also liable for illegal dismissal. PIER 8 A&S did not obtain prior clearance from the MOLE before it dismissed the stevedores, as required by the law then in force which read: Section 1. Requirement for shutdown or dismissal. No employer may shut down his establishment or dismiss any of his employees with at least one year of service during the last two years, whether the service is broken or continuous, without p rior clearance issued therefor in accordance with this Rule. Any provision in a collective bargaining agreement dispensing with the clearance requirement shall be null and void. Section 2. Shutdown or dismissal without clearance. Any shutdown or dismissal without prior clearance shall be conclusively presumed to be a termination of employment without a just cause. The Regional Director shall, in such case, order the immediate reinstatement of the employee and the payment of his wages from the time of the shutdown or dismissal until the time of reinstatement. 11 B.P. Blg. 130 amended the Labor Code on 4 September 1981 by abolishing the requirement of prior clearance from the MOLE but since the dismissal of the stevedores was effected prior to the promulgation of B.P. Blg. 130, PIER 8 A&S was then bound to comply with the old law. The Court, interpreting Sections 1 and 2 above quoted, has consistently held that a dismissal without 12 said clearance shall be conclusively presumed a termination without just cause. The record is bare of any evidence that could compel the Court to overturn the factual findings of the Labor Arbiter on this point. WHEREFORE, considering the absence of an employer-employee relationship between Hijos de F. Escao, Inc. and private respondents, the Decision of the Labor Arbiter dated 28 February 1980 in NLRC Case No. RB-IV-2326-79 and the Decision of the NLRC dated 11 November 1981 are hereby MODIFIED so that only Pier 8 Arrastre & Stevedoring Services, Inc. shall be liable for reinstatement and payment of backwages. As so modified, both Decisions are hereby AFFIRMED. No costs. SO ORDERED. Fernan, C.J., Gutierrez, Jr., Bidin and Davide, Jr., JJ., concur.

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