EN BANC [G.R. No. 81958. June 30, 1988.] PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner, vs. HON. FRANKLIN M.

DRILON as Secretary of Labor and Employment, and TOMAS D. ACHACOSO, as Administrator of the Philippine Overseas Employment Administration, respondents. Gutierrez & Alo Law Offices for petitioner.

DECISION SARMIENTO, J p: The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm "engaged principally in the recruitment of Filipino workers, male and female, for overseas placement," 1 challenges the Constitutional validity of Department Order No. 1, Series of 1988, of the Department of Labor and Employment, in the character of "GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in this petition for certiorari and prohibition. Specifically, the measure is assailed for "discrimination against males or females;" 2 that it "does not apply to all Filipino workers but only to domestic helpers and females with similar skills;" 3 and that it is violative of the right to travel. It is held likewise to be an invalid exercise of the lawmaking power, police power being legislative, and not executive, in character. In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the Constitution, providing for worker participation "in policy and decision-making processes affecting their rights and benefits as may be provided by law." 4 Department Order No. 1, it is contended, was passed in the absence of prior consultations. It is claimed, finally, to be in violation of the Charter's non-impairment clause, in addition to the "great and irreparable injury" that PASEI members face should the Order be further enforced. On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of Labor and Administrator of the Philippine Overseas Employment Administration, filed a Comment informing the Court that on March 8, 1988, the respondent Labor Secretary lifted the deployment ban in the states of Iraq, Jordan, Qatar, Canada, Hongkong, United States, Italy, Norway, Austria, and Switzerland. * In submitting the validity of the challenged "guidelines," the Solicitor General invokes the police power of the Philippine State. It is admitted that Department Order No. 1 is in the nature of a police power measure. The only question is whether or not it is valid under the Constitution. The concept of police power is well-established in this jurisdiction. It has been defined as the "state authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare." 5 As defined, it consists of (1) an imposition of restraint upon liberty or property, (2) in order to foster the common good. It is not capable of an exact definition but has been, purposely, veiled in general terms to underscore its all-comprehensive embrace. Cdpr "Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could be done, provides enough room for an efficient and flexible response to conditions and circumstances thus assuring the greatest benefits." 6 It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the Charter. Along with the taxing power and eminent domain, it is inborn in the very fact of statehood and sovereignty. It is a fundamental attribute of government that has enabled it to perform the most vital functions of governance. Marshall, to whom the expression has been credited, 7 refers to it succinctly as the plenary power of the State "to govern its citizens." 8

"The police power of the State . . . is a power coextensive with self-protection, and it is not inaptly termed the 'law of overwhelming necessity.' It may be said to be that inherent and plenary power in the State which enables it to prohibit all things hurtful to the comfort, safety, and welfare of society." 9 It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is "rooted in the conception that men in organizing the state and imposing upon its government limitations to safeguard constitutional rights did not intend thereby to enable an individual citizen or a group of citizens to obstruct unreasonably the enactment of such salutary measures calculated to ensure communal peace, safety, good order, and welfare." 10 Significantly, the Bill of Rights itself does not purport to be an absolute guaranty of individual rights and liberties "Even liberty itself, the greatest of all rights, is not unrestricted license to act according to one's will." 11 It is subject to the far more overriding demands and requirements of the greater number. Notwithstanding its extensive sweep, police power is not without its own limitations. For all its awesome consequences, it may not be exercised arbitrarily or unreasonably. Otherwise, and in that event, it defeats the purpose for which it is exercised, that is, to advance the public good. Thus, when the power is used to further private interests at the expense of the citizenry, there is a clear misuse of the power. 12 In the light of the foregoing, the petition must be dismissed. As a general rule, official acts enjoy a presumed validity. 13 In the absence of clear and convincing evidence to the contrary, the presumption logically stands. The petitioner has shown no satisfactory reason why the contested measure should be nullified. There is no question that Department Order No. 1 applies only to "female contract workers," 14 but it does not thereby make an undue discrimination between the sexes. It is well-settled that "equality before the law" under the Constitution 15 does not import a perfect identity of rights among all men and women. It admits of classifications, provided that (1) such classifications rest on substantial distinctions; (2) they are germane to the purposes of the law; (3) they are not confined to existing conditions; and (4) they apply equally to all members of the same class. 16 The Court is satisfied that the classification made — the preference for female workers — rests on substantial distinctions. As a matter of judicial notice, the Court is well aware of the unhappy plight that has befallen our female labor force abroad, especially domestic servants, amid exploitative working conditions marked by, in not a few cases, physical and personal abuse. The sordid tales of maltreatment suffered by migrant Filipina workers, even rape and various forms of torture, confirmed by testimonies of returning workers, are compelling motives for urgent Government action. As precisely the caretaker of Constitutional rights, the Court is called upon to protect victims of exploitation. In fulfilling that duty, the Court sustains the Government's efforts. Cdpr The same, however, cannot be said of our male workers. In the first place, there is no evidence that, except perhaps for isolated instances, our men abroad have been afflicted with an identical predicament. The petitioner has proffered no argument that the Government should act similarly with respect to male workers. The Court, of course, is not impressing some male chauvinistic notion that men are superior to women. What the Court is saying is that it was largely a matter of evidence (that women domestic workers are being illtreated abroad in massive instances) and not upon some fanciful or arbitrary yardstick that the Government acted in this case. It is evidence capable indeed of unquestionable demonstration and evidence this Court accepts. The Court cannot, however, say the same thing as far as men are concerned. There is simply no evidence to justify such an inference. Suffice it to state, then, that insofar as classifications are concerned, this Court is content that distinctions are borne by the evidence. Discrimination in this case is justified. As we have furthermore indicated, executive determinations are generally final on the Court. Under a republican regime, it is the executive branch that enforces policy. For their part, the courts decide, in the proper cases, whether that policy, or the manner by which it is implemented, agrees with the Constitution or the laws,

but it is not for them to question its wisdom. As a co-equal body, the judiciary has great respect for determinations of the Chief Executive or his subalterns, especially when the legislature itself has specifically given them enough room on how the law should be effectively enforced. In the case at bar, there is no gainsaying the fact, and the Court will deal with this at greater length shortly, that Department Order No. 1 implements the rule-making powers granted by the Labor Code. But what should be noted is the fact that in spite of such a fiction of finality, the Court is on its own persuaded that prevailing conditions indeed call for a deployment ban. There is likewise no doubt that such a classification is germane to the purpose behind the measure. Unquestionably, it is the avowed objective of Department Order No. 1 to "enhance the protection for Filipino female overseas workers." 17 This Court has no quarrel that in the midst of the terrible mistreatment Filipina workers have suffered abroad, a ban on deployment will be for their own good and welfare. The Order does not narrowly apply to existing conditions. Rather, it is intended to apply indefinitely so long as those conditions exist. This is clear from the Order itself ("Pending review of the administrative and legal measures, in the Philippines and in the host countries . . ." 18 ), meaning to say that should the authorities arrive at a means impressed with a greater degree of permanency, the ban shall be lifted. As a stop-gap measure, it is possessed of a necessary malleability, depending on the circumstances of each case. Accordingly, it provides: 9. LIFTING OF SUSPENSION. — The Secretary of Labor and Employment (DOLE) may, upon recommendation of the Philippine Overseas Employment Administration (POEA), lift the suspension in countries where there are: 1. Bilateral agreements or understanding with the Philippines, and/or,

2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and protection of Filipino workers. 19 The Court finds, finally, the impugned guidelines to be applicable to all female domestic overseas workers. That it does not apply to "all Filipina workers" 20 is not an argument for unconstitutionality. Had the ban been given universal applicability, then it would have been unreasonable and arbitrary. For obvious reasons, not all of them are similarly circumstanced. What the Constitution prohibits is the singling out of a select person or group of persons within an existing class, to the prejudice of such a person or group or resulting in an unfair advantage to another person or group of persons. To apply the ban, say exclusively to workers deployed by A, but not to those recruited by B, would obviously clash with the equal protection clause of the Charter. It would be a classic case of what Chase refers to as a law that "takes property from A and gives it to B." 21 It would be an unlawful invasion of property rights and freedom of contract and needless to state, an invalid act. 22 (Fernando says: "Where the classification is based on such distinctions that make a real difference as infancy, sex, and stage of civilization of minority groups, the better rule, it would seem, is to recognize its validity only if the young, the women, and the cultural minorities are singled out for favorable treatment. There would be an element of unreasonableness if on the contrary their status that calls for the law ministering to their needs is made the basis of discriminatory legislation against them. If such be the case, it would be difficult to refute the assertion of denial of equal protection." 23 In the case at bar, the assailed Order clearly accords protection to certain women workers, and not the contrary.) It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas deployment. From scattered provisions of the Order, it is evident that such a total ban has not been contemplated. We quote: 5. AUTHORIZED DEPLOYMENT — The deployment of domestic helpers and workers of similar skills defined herein to the following [sic] are authorized under these guidelines and are exempted from the suspension. LibLex 5.1 Hirings by immediate members of the family of Heads of State and Government;

5.2 5.3

Hirings by Minister, Deputy Minister and the other senior government officials; and Hirings by senior officials of the diplomatic corps and duly accredited international organizations.

5.4 Hirings by employers in countries with whom the Philippines have [sic] bilateral labor agreements or understanding. xxx xxx xxx

7. VACATIONING DOMESTIC HELPERS AND WORKERS OF SIMILAR SKILLS — Vacationing domestic helpers and/or workers of similar skills shall be allowed to process with the POEA and leave for worksite only if they are returning to the same employer to finish an existing or partially served employment contract. Those workers returning to worksite to serve a new employer shall be covered by the suspension and the provision of these guidelines. xxx xxx xxx

9. LIFTING OF SUSPENSION — The Secretary of Labor and Employment (DOLE) may, upon recommendation of the Philippine Overseas Employment Administration (POEA), lift the suspension in countries where there are: 1. Bilateral agreements or understanding with the Philippines, and/or,

2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and protection of Filipino workers. 24 xxx xxx xxx

The consequence the deployment ban has on the right to travel does not impair the right. The right to travel is subject, among other things, to the requirements of "public safety," "as may be provided by law." 25 Department Order No. 1 is a valid implementation of the Labor Code, in particular, its basic policy to "afford protection to labor," 26 pursuant to the respondent Department of Labor's rule-making authority vested in it by the Labor Code. 27 The petitioner assumes that it is unreasonable simply because of its impact on the right to travel, but as we have stated, the right itself is not absolute. The disputed Order is a valid qualification thereto. Neither is there merit in the contention that Department Order No. 1 constitutes an invalid exercise of legislative power. It is true that police power is the domain of the legislature, but it does not mean that such an authority may not be lawfully delegated. As we have mentioned, the Labor Code itself vests the Department of Labor and Employment with rule-making powers in the enforcement whereof. 28 The petitioners's reliance on the Constitutional guaranty of worker participation "in policy and decision-making processes affecting their rights and benefits." 29 is not well-taken. The right granted by this provision, again, must submit to the demands and necessities of the State's power of regulation. LLjur The Constitution declares that: Sec 3. 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. 30 "Protection to labor" does not signify the promotion of employment alone. What concerns the Constitution more paramountly is that such an employment be above all, decent, just, and humane. It is bad enough that the country has to send its sons and daughters to strange lands because it cannot satisfy their employment needs at home. Under these circumstances, the Government is duty-bound to insure that our toiling expatriates have adequate protection, personally and economically, while away from home. In this case, the Government has evidence, an evidence the petitioner cannot seriously dispute, of the lack or inadequacy of such protection, and as part of its duty, it has precisely ordered an indefinite ban on deployment.

The Court finds furthermore that the Government has not indiscriminately made use of its authority. It is not contested that it has in fact removed the prohibition with respect to certain countries as manifested by the Solicitor General. The non-impairment clause of the Constitution, invoked by the petitioner, must yield to the loftier purposes targetted by the Government. 31 Freedom of contract and enterprise, like all other freedoms, is not free from restrictions, more so in this jurisdiction, where laissez faire has never been fully accepted as a controlling economic way of life. This Court understands the grave implications the questioned Order has on the business of recruitment. The concern of the Government, however, is not necessarily to maintain profits of business firms. In the ordinary sequence of events, it is profits that suffer as a result of Government regulation. The interest of the State is to provide a decent living to its citizens. The Government has convinced the Court in this case that this is its intent. We do not find the impugned Order to be tainted with a grave abuse of discretion to warrant the extraordinary relief prayed for. LLphil WHEREFORE, the petition is DISMISSED. No costs. SO ORDERED. Yap, C.J., Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes and Griño-Aquino, JJ., concur. Gutierrez, Jr. and Medialdea, JJ., are on leave

FIRST DIVISION [G.R. No. 106107. June 2, 1994.]

AGUSTIN CHU, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and VICTORIAS MILLING COMPANY, INC., respondents. SYLLABUS 1. LABOR LAW AND OTHER SOCIAL LEGISLATIONS; MANAGEMENT'S RIGHT TO TRANSFER EMPLOYEES' WORK STATION; CONSTRUED. — An owner of a business enterprise is given considerable leeway in managing his business because it is deemed important to society as a whole that he should succeed. Our law, therefore, recognizes certain rights as inherent in the management of business enterprises. These rights are collectively called management prerogatives or acts by which one directing a business is able to control the variables thereof so as to enhance the chances of making a profit. "Together, they may be taken as the freedom to administer the affairs of a business enterprise such that the costs of running it would be

below the expected earnings or receipts. In short, the elbow room in the quest for profits." One of the prerogatives of management, and a very important one at that, is the right to transfer employees in their work station. In Philippine Japan Active Carbon Corporation v. National Labor Relations Commission, 171 SCRA 164 (1989), we held: "It is the employer's prerogative, based on its assessment and perception of its employees' qualifications, aptitudes, and competence to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. An employee's right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal." In Abbot Laboratories (Phils.) Inc. v. NLRC, 154 SCRA 713 (1987), we also held in referring to the prerogative of transfer of employees, that: "This is a function associated with the employer's inherent right to control and manage effectively its enterprise. Even as the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied." 2. ID.; ID.; EXCEPTION. — Of course, like other prerogatives, the right to transfer or re-assign is subject to limitations arising under the law, contract or general principles of fair play and justice. Jurisprudence proscribes transfers or reassignments of employees when such acts are unreasonable and cause inconvenience or prejudice to them. 3. ID.; ID.; WAIVER; NOT APPROPRIATE IN CASE AT BAR. — Special Contract of Employment" invoked by petitioner wherein private respondent had waived its right to transfer or re-assign petitioner to any other position in the company. Before such right can be deemed to have been waived or contracted away, the stipulation to that effect must be clearly stated so as to leave no room to doubt the intentions of the parties. The mere specification in the employment contract of the position to be held by the employee is not such stipulation. As held in Philippine Japan Active Carbon Corporation v. National Labor Relations Commission, supra: "An employee's right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogatives to change his assignment or transfer him where he will be most useful." Petitioner's bare assertion that the transfer was unreasonable and caused him inconvenience cannot override the fact, as found by the Labor Arbiter and respondent Commission, that the rotation was made in good faith and was not discriminatory, and that there was no demotion in rank or a diminution of his salary, benefits and privileges.

DECISION QUIASON, J p: This is a petition for certiorari under Rule 65 of the Revised Rules of Court to reverse and set aside the Decision of the Fourth Division of the National Labor Relations Commission (NLRC) in Case No. 06-02-1008189 which dismissed petitioner's appeal and its Resolution dated March 20, 1992, which denied petitioner's motion for reconsideration. cdll We dismiss the petition. I Petitioner retired from the service of private respondent upon reaching the age of sixty under its regular retirement program. He was granted an extension of service by the Board of Directors of private respondent under a "Special Contract of Employment." The contract provided, inter alia, that its term was for a period of

one year commencing on August 1, 1988; that petitioner was employed as Head of the Warehousing, Sugar, Shipping and Marine Department; and that he was to receive a basic salary of P6,941.00 per month. cdrep Private respondent issued Memorandum No. 1012-PS dated December 12, 1988 and Memorandum No. 1028PS dated January 16, 1989, both providing for a rotation of the personnel and other organizational changes. Pursuant to the memoranda, petitioner was transferred to the Sugar Sales Department. Petitioner protested his transfer and requested a reconsideration thereof, which was denied. Consequently, on February 27, 1989, petitioner filed a complaint for illegal dismissal, contending that he was constructively dismissed from his employment (RAB IV Case No. 06-02-10081-89). In support of his decision holding that there was no constructive dismissal of petitioner, the Labor Arbiter said that: (1) petitioner was transferred to the Sugar Sales Department from the Warehousing, Sugar, Shipping and Marine Department, both of which are under the Sugar Sales Area; (2) petitioner's transfer was without change in rank or salary; (3) petitioner's designation in either department was the same; (4) the personnel rotation was pursuant to organizational changes done in the valid exercise of management prerogatives; (5) there was no bad faith in the transfer of petition, as other employees similarly situated as he were likewise affected; and (6) petitioner failed to show that he was prejudiced by the changes or transferred to a demeaning or humiliating position. prcd Petitioner appealed to the NLRC which, in a resolution dated January 13, 1992, affirmed the Labor Arbiter's decision. In a resolution dated March 20, 1992, the NLRC denied petitioner's motion for reconsideration. II In this petition, petitioner contends that there was no valid exercise of management prerogative because: (1) his transfer violated the "Special Contract of Employment" which was the law between the parties; and (2) said transfer was unreasonable and caused inconvenience to him. Petitioner argues that private respondent's prerogative to transfer him was limited by the "Special Contract of Employment," which was the "law" between the parties. Thus, petitioner urges that private respondent, by employing him specifically as Head of the Warehousing, Sugar, Shipping, and Marine Department, waived its prerogative to reassign him within the term of the contract to another department. We disagree. An owner of a business enterprise is given considerable leeway in managing his business because it is deemed important to society as a whole that he should succeed. Our law, therefore, recognizes certain rights as inherent in the management of business enterprises. These rights are collectively called management prerogatives or acts by which one directing a business is able to control the variables thereof so as to enhance the chances of making a profit. "Together, they may be taken as the freedom to administer the affairs of a business enterprise such that the costs of running it would be below the expected earnings or receipts. In short, the elbow room in the quest for profits" (Fernandez and Quiason, The Law on Labor Relations, 1963 ed., p. 43). LLjur One of the prerogatives of management, and a very important one at that, is the right to transfer employees in their work station. In Philippine Japan Active Carbon Corporation v. National Labor Relations Commission, 171 SCRA 164 (1989), we held: "It is the employer's prerogative, based on its assessment and perception of its employees' qualifications, aptitudes, and competence to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. An employee's right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a diminution of his

salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal." In Abbot Laboratories (Phils.) Inc. v. NLRC, 154 SCRA 713 (1987), we also held in referring to the prerogative of transfer of employees, that: "This is a function associated with the employer's inherent right to control and manage effectively its enterprise. Even as the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied." Of course, like other prerogatives, the right to transfer or re-assign is subject to limitations arising under the law, contract or general principles of fair play and justice (Abbot Laboratories (Phil.) Inc. v. NLRC, 154 SCRA 713 [1987]). Jurisprudence proscribes transfers or reassignments of employees when such acts are unreasonable and cause inconvenience or prejudice to them (Philippine Japan Active Carbon Corporation v. NLRC, supra). We find nothing in the "Special Contract of Employment" invoked by petitioner wherein private respondent had waived its right to transfer or re-assign petitioner to any other position in the company. Before such right can be deemed to have been waived or contracted away, the stipulation to that effect must be clearly stated so as to leave no room to doubt the intentions of the parties. The mere specification in the employment contract of the position to be held by the employee is not such stipulation. LLphil As held in Philippine Japan Active Carbon Corporation v. National Labor Relations Commission, supra: "An employee's right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogatives to change his assignment or transfer him where he will be most useful." Petitioner's bare assertion that the transfer was unreasonable and caused him inconvenience cannot override the fact, as found by the Labor Arbiter and respondent Commission, that the rotation was made in good faith and was not discriminatory, and that there was no demotion in rank or a diminution of his salary, benefits and privileges. prcd WHEREFORE, the petition for certiorari is DISMISSED. SO ORDERED. Davide, Jr., Bellosillo and Kapunan, JJ., concur. Cruz, J., is on leave.

SECOND DIVISION [G.R. No. 106370. September 8, 1994.] PHILIPPINE GEOTHERMAL, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and EDILBERTO M. ALVAREZ, respondents. DECISION

PADILLA, J p: Petitioner Philippine Geothermal, Incorporated filed the present petition for certiorari seeking the reversal of the decision of public respondent National Labor Relations Commission in NLRC CA No. L-000295-91/RB-IV-13583-91 entitled "Edilberto M. Alvarez v. Philippine Geothermal, Inc. et al." The relevant facts of this case are as follows: Private respondent Edilberto M. Alvarez was first employed by petitioner on 2 July 1979. On 31 May 1989, private respondent, who was then occupying the position of Steam Test Operator II, injured his right wrist when a steam-pressured "chicksan swivel joint assembly" exploded while he was checking a geothermal well operated by petitioner. As a result, private respondent's right arm was placed in a plaster cast and he was confined at the San Pablo Doctor's Hospital from 31 May 1989 to 3 June 1989. llcd Dr. Oscar M. Brion, the attending physician, diagnosed private respondent's injuries to be: 1) 2) 3) Complete fracture/dislocation distal radius (r); Complete fracture styloid process and dislocation of the ulna; Right pelvic contusion, which required a recuperation period of approximately forty-five (45) days.

Petitioner thus gave private respondent a fifty (50) day "work-connected accident" (WCA) leave with pay until 29 July 1989. Petitioner also referred private respondent's case to Dr. Liberato A.C. Leagogo, Jr. of the Philippine Orthopedic Institute, at petitioner's expense. On 26 July 1989, Dr. Leagogo certified that private respondent was fit to return to work with the qualification however, that he could only perform light work. Thus, on 31 July 1989, when respondent Alvarez returned to work, he was assigned to "calibration of barton recorders", in accordance with the doctor's recommendations. On 13 November 1989, Alvarez was again examined by Dr. Leagogo who issued a medical certificate which reads: 1 "This is with regards [sic] the work recommendation for Mr. Bert Alvarez. At this point in time, 5 months post-injury, he can be given moderate working activities, pulling, pushing, carrying and turning a 20 lbs.-25 lbs. weight/force. On the 6th month, he can go back to his previous job." Despite this certification, respondent Alvarez continued to absent himself from work and by the end of 1989 he had used ten (10) days of vacation leave, eighteen (18) days of sick leave, fifteen (15) days of WCA leave and four (4) days of emergency leave for the period starting 31 July 1989. llcd On 28 December 1989, Dr. Leagogo, after examining Alvarez, certified that the latter's injury had healed completely and that he could thus return to his pre-injury work. On the same day, Alvarez consulted another doctor, Dr. Angela D.V. Garcia, a private physician, who likewise confirmed that there were "no contraindications for him (Alvarez) not to attend to his work." On 29 December 1989, based on Dr. Leagogo's findings, petitioner wrote Alvarez stating: "This is to inform you that based on the examination performed on December 28, 1989 by your attending physician, Dr. Liberato Antonio C. Leagogo, Jr., your right wrist fracture is completely healed as stated in the attached medical certificate. Therefore, you are advised to go back to your regular duty as an Operator II at the Well Testing Section effective immediately. xxx xxx xxx

Any absences you may incur in the future will be subject to our existing policy on leaves and absences." . . . 2 Since Alvarez failed to report for work from 2 to 10 January 1990, petitioner again wrote him stating: ". . . it is indicated that your therapy has no contraindication for you not to attend to your work. However, from that date up to now, January 11, you have not reported for work. . . . Therefore, as of January 11, 1990, you are considered to be 'Absent Without Official Leave (AWOL) and Without Pay'. This letter serves as a warning letter per our rules and regulations, Unauthorized absences, rule 3, par. i, page 31. You are advised to immediately report for work or further disciplinary action will be taken." 3 After reading the letter. Alvarez wrote a hand-written note on petitioner's copy of the letter, stating "Please wait for my doctor's medical certificate from Dr. Relampagos." On 19 January 1990, Dr. Victoria Pineda, an orthopedic doctor of the National Orthopedic Hospital whom Alvarez also consulted issued the following medical certificate: "Patient has reached a plateau in his rehabilitation with limitations of wrist motion (r) as regular. Fit for work." 4 On 20 January 1990, Alvarez consulted Dr. Francisco, another orthopedic doctor at the Polymedic General Hospital, who recommended a set of laboratory tests to be conducted on Alvarez' right wrist.

On 1 February 1990, Dr. Relampagos of the National Orthopedic Hospital certified Alvarez to be "Fit for light job." 5 On 6 February 1990, Dr. Francisco, who read and interpreted the results of the tests undertaken on Alvarez at the St. Luke's Medical Center, certified that there is no "hindrance for him (Mr. Alvarez) to do his office work." 6 Notwithstanding the above medical findings, respondent Edilberto M. Alvarez continued to incur numerous absences. He did not report for work in the months of January and February 1990. cdll On 7 February 1990, petitioner addressed its third letter to Alvarez stating: "The attached medical certificates from Dr. Garcia, Dr. Pineda, Dr. Relampagos, Dr. Francisco, and Dr. Leagogo all indicate that you are fit to work. Based on these medical certificates, your absences from January 11 to February 6 1990 (23 working days) will be charged to your sick leave credits. Be advised that your sick leave credits will be exhausted on February 8, 1990 therefore, you will not be paid for subsequent absences. In addition, if you fail to report to work and are unable to present a medical certificate explaining your absences, you will face disciplinary action. I am enclosing the statement of company policy on absences for your information and would strongly suggest that you report to work immediately." 7 Under petitioner's company rules, employees who incur unauthorized absences of six (6) days or more are subject to dismissal. Thus, when Alvarez failed to report for work from 8 to 28 February 1990, a total of eighteen (18) working days with three (3) days off, petitioner wrote Alvarez a fourth time stating in part: "This refers to your continued refusal to report back to work following your recovery from a work-related accident involving your right wrist last May 31, 1989. That you have recovered is based on the certification of four (4) physicians, including the company-retained orthopedic doctor and three (3) other orthopedic specialists whom you personally chose and consulted. xxx xxx xxx

In order not to lose your income, the company has allowed you to charge all these unwarranted absences against your accumulated sick leave credits. Our records show that as of February 7, 1990, you have used up all your remaining sick leaves. We would like to emphasize that from February 8 to 28, all your absences are considered unauthorized and without pay. Please be reminded that, according to company rules, employees who go on unauthorized absences of six (6) or more days are subject to dismissal. The company, therefore, believes that it has given all the time, help, and considerations in your case. We go by the doctor's certifications that you are already fit to work. In view of the above, we are giving you a final warning. Should you fail to report to work on Monday, March 5, 1990 your employment with the company will be terminated." 8 This fourth warning letter of petitioner was unheeded. Alvarez failed to report for work; neither did he inform petitioner of the reason for his continued absences. As a consequence, petitioner terminated Alvarez' employment on 9 March 1990. On 19 June 1990, Alvarez filed a complaint for illegal dismissal against petitioner with the Regional Arbitration Branch, Region IV. On 19 December 1990, the labor arbiter dismissed the complaint, without prejudice, for failure of the complainant to submit his position paper despite repeated orders from the labor arbiter. LibLex On 16 January 1991, private respondent refiled his complaint for illegal dismissal. On 6 September 1991 the labor arbiter rendered a decision holding private respondent's termination from employment as valid and justified.

On appeal to the public respondent National Labor Relations Commission (NLRC), the decision was reversed and set aside. Petitioner was ordered to reinstate Edilberto M. Alvarez to his former position without loss of seniority rights but without backwages. A Motion for Reconsideration was denied on 15 May 1992. Petitioner then filed the present petition for certiorari, based on two (2) grounds namely: "RESPONDENT COMMISSION ABUSED ITS DISCRETION AND ACTED BEYOND ITS JURISDICTION BY ENTERTAINING AN APPEAL THAT WAS FILED OUT OF TIME". "EVEN ON THE MERITS OF THE CASE, RESPONDENT COMMISSION ABUSED ITS DISCRETION BY FAILING TO APPRECIATE OVERWHELMING EVIDENCE UNIFORMLY SHOWING THAT THE TERMINATION OF MR. ALVAREZ WAS VALID AND JUSTIFIED." 9 On the issue of whether or not the appeal from the decision of the labor arbiter to the NLRC was filed within the ten (10) day reglementary period, it is undisputed that private respondent received a copy of the labor arbiter's decision on 5 September 1991. Alvarez thus had up to 15 September 1991 to perfect his appeal. Since this last mentioned date was a Sunday, private respondent had to file his appeal on the next business day, 16 September 1991. prLL Petitioner contends that the appeal was filed only on 20 September 1991. Respondent NLRC however found that private respondent filed his appeal by registered mail on 16 September 1991, the same day that petitioner's counsel was furnished copies of said appeal. 10 We will not disturb this factual finding of the NLRC. The contention that even assuming arguendo that the appeal was filed on time, the appeal fee was paid four (4) days late (and, therefore, the appeal to the NLRC should be dismissed) likewise fails to entirely impress us. In C.W. Tan Manufacturing v. NLRC, 11 we held that "the broader interest of justice and the desired objective of deciding the case on the merits demand that the appeal be given due course." On the issue of whether or not Edilberto M. Alvarez was validly dismissed, we rule in the affirmative and consequently the decision of respondent NLRC is set aside. Article 282(b) of the Labor Code provides that an employer may validly dismiss an employee for gross and habitual neglect by the employee of his duties. In the present case, it is clear that private respondent was guilty of seriously neglecting his duties. The records establish that as early as 26 July 1989, Dr. Leagogo already had certified that Alvarez could perform light work. On 13 November 1989, Dr. Leagogo certified that Alvarez could perform moderate work and it was further certified that by December 1989, Alvarez could return to his pre-injury duties. Notwithstanding these certifications, Alvarez continued to incur unexplained absences until his dismissal on 9 March 1990. A review of Alvarez' record of attendance shows that from August to December 1989, he reported for work only seventy-seven (77) times while he incurred forty-seven (47) absences. cdll An employee who earnestly desires to resume his regular duties after recovering from an injury undoubtedly will not go through the trouble of getting opinions from five (5) different physicians before going back to work after he has been certified to be fit to return to his regular duties. Petitioner has not been shown to be without sympathy or concern for Alvarez. He was given fifty (50) days work-connected accident (WCA) leave with pay to allow him to recuperate from his injury without loss of earnings. He was allowed to use his leave credits and was actually given an additional fifteen (15) days WCA leave to allow him to consult his doctors and fully recover from his injuries. Moreover, petitioner gave Alvarez several warnings to report for work, otherwise, he would face disciplinary sanctions. In spite of these warnings, Alvarez was absent without official leave (AWOL) for eighteen (18) days. Under company policy, of which

Alvarez was made aware, employees who incur without valid reason six (6) or more absences are subject to dismissal. Petitioner, in its fourth and last warning letter to Alvarez, was willing to allow him to resume his work in spite of the eighteen (18) days he went on AWOL. It was made clear, however, that should private respondent still fail to report for work on 5 March 1990, his employment would be terminated. Private respondent failed to report for work on 5 March 1990. Petitioner validly dismissed him not only for violation of company policy but also for violation of Section 282(b) of the Labor Code aforecited. LLphil While it is true that compassion and human consideration should guide the disposition of cases involving termination of employment since it affects one's source or means of livelihood, it should not be overlooked that the benefits accorded to labor do not include compelling an employer to retain the services of an employee who has been shown to be a gross liability to the employer. The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer. 12 It should be made clear that when the law tilts the scale of justice in favor of labor, it is but a recognition of the inherent economic inequality between labor and management. The intent is to balance the scale of justice; to put the two parties on relatively equal positions. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer. Justitia nemini neganda est (Justice is to be denied to none). In Cando v. National Labor Relations Commission 13 the Court awarded separation pay to an employee who was terminated for unauthorized absences. We believe that separation pay of one-half (1/2) month salary for every year of service is adequate in this case. WHEREFORE, the decision of respondent National Labor Relations Commission is hereby SET ASIDE and the decision of the Labor Arbiter is reinstated with the MODIFICATION that petitioner Philippine Geothermal, Inc. is ordered to pay private respondent Edilberto M. Alvarez separation pay equivalent to one-half (1/2) month salary for every year of service starting from 2 July 1979 until his dismissal on 9 March 1990. cdphil SO ORDERED. Narvasa, C.J., Regalado, Puno and Mendoza, JJ., concur.

SECOND DIVISION [G.R. No. 106654. December 16, 1994.] PANTRANCO NORTH EXPRESS, INC., and/or ABELARDO DE LEON, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, Second Division, and RODOLFO PERONILA, respondents.

DECISION REGALADO, J p: This special civil action for certiorari assails and seeks the nullification of two resolutions of the National Labor Relations Commission (NLRC) of the National Capital Region (NCR), dated July 2, 1992 and August 11, 1992, 1 holding that private respondent Rodolfo Peronila was illegally dismissed by petitioner corporation and imposing sanctions therefore. It appears on the record that sometime in 1971, private respondent Peronila was employed as a driver of Pantranco North Express, Inc., a domestic corporation engaged in the public transportation business as a common carrier, and of which its co-petitioner Abelardo de Leon is a manager. In 1973, Peronila was administratively investigated by the corporation for his absence from work of more than two and one-half months without leave. According to an investigation report of petitioners' area manager, dated March 10, 1973, Peronila claimed that he went on absence without leave from his work from November 1, 1972 up to February 16, 1973 which was date of the investigation, or one hundred seven calendar days continuously, because "he went to Cotabato, Mindanao to visit his dead grandfather during the period of his unofficial absence." 2 Finding the belated explanation of Peronila insufficient, the petitioner declared that private respondent had "grossly violated the provisions of (its) existing company policies, CVT Policy No. 71-102" and it consequently "dismissed the respondent from service upon receipt of the approved clearance from the NLRC." 3 In an order 4 dated March 20, 1973, Mediator-Factfinder Loreto V. Poblete of the National Relations Commission, Regional Office No. II in Tuguegarao, Cagayan, affirmed the dismissal made by petitioner for being duly supported by the evidence and made in accordance with law. Fifteen years after such termination of his employment, Peronila reappeared in 1988 and implored petitioner to reconsider his dismissal, which plea was initially denied by petitioner. However, due to insistent appeals by Peronila, petitioner eventually acceded and hired him as a driver, but on a contractual basis for a fixed period of one month. 5 The terms and conditions of that new employment on a contractual basis are contained in a letter, dated April 5, 1988, signed by the general manager of the company and voluntarily conformed to by Peronila, thus: "This will confirm your assignment as Driver-Baler Line on a contractual basis under the following terms and conditions: 1. EFFECTIVITY

This assignment shall take effect on April 5, 1988 and shall be for a period of one month. 2. FEE

You shall receive a compensation of P64.00/day.

3.

HOURS OF WORK

You shall work in accordance with the schedule given by your immediate supervisor. 4. TERMINATION

This contract is automatically terminated after one (1) month or at the close of office hours on May 5, 1988. 5. MISCELLANEOUS

There is no employer-employee relationship between us hence you are not entitled to any privilege of an employee viz: sick leave, vacation leave, holiday pay, overtime pay and others." 6 Barely fifteen days from such employment as a contractual driver, or on April 20, 1988, private respondent was involved in a vehicular mishap in Nueva Vizcaya wherein the bus he was driving hit another vehicle. 7 After an administrative investigation conducted by petitioner corporation, Peronila was found guilty thereof, hence his employment contract was terminated and was no longer renewed thereafter. On January 18, 1989, private respondent filed a case for illegal dismissal against petitioner in the Arbitration Branch of the NLRC-NCR wherein he argued that he was refused assignment after May 5, 1988, which refusal was tantamount to constructive dismissal. Accordingly, he sought his reinstatement and the payment of his back wages. 8 Labor Arbiter Patricio P. Libo-on dismissed the case on February 12, 1991, ruling that "(a)lthough as a driver, his services (are) usual and necessary to the business of the respondent, yet it is also true that complainant's case falls within one of the exceptions. When he was rehired, it was clear to him that he would be working only for one (1) month. . . . Apparently, the reason for this is to fill or to stop-gap the requirements of the employe(r)/respondent during the period (when) he was rehired, and which it foresees to ease up in May 1988." The labor arbiter also upheld the aforestated contract signed by Peronila. 9 On appeal, public respondent NLRC set aside the decision of the labor arbiter declaring that the dismissal was illegal since there was no just cause, with the decretal portion of its resolution on appeal disposing as follows: "WHEREFORE, premises considered, the decision appealed from is hereby set aside and a new Order promulgated ordering the reinstatement of complainant with one (1) year backwages." 10 The finding of the labor arbiter regarding the dismissal of Peronila was reversed by public respondent on these considerations: "However, we do not agree with the finding of the Labor Arbiter that complainant's re-employment was an exception to Article 280 of the Labor Code. xxx xxx xxx

"Suffice it to state that the Constitution recognizes the need to afford protection to labor and assures security of tenure to workers. In consonance thereto, the Labor Code was enacted to give special attention to the relationship between labor and management. Indeed, the Labor Code is a special law, and well settled in this jurisdiction is the rule that as between a special law and a general law, the former prevails. Without further belaboring their distinction, to equate and apply the present case to an ordinary contract with a fixed term and period destroys the spirit and intention of the labor laws to give special treatment to labor and management relationship. To uphold the findings a quo of the Labor Arbiter would put to naught the benefits that the State has intended for labor, since by the mere expedience of defining the terms and conditions of employment in a well prepared contract, no employee shall ever attain a regular employment." 11 However, respondent commission rejected the argument of Peronila that he was not afforded the opportunity to adduce evidence before the labor arbiter. The NLRC maintained that there was no error in the procedure conducted by the labor arbiter because he is given ample discretion to determine whether there is a need to conduct further hearings after the parties have submitted their position papers and supporting proofs. 12

On August 11, 1992, 13 petitioner's motion for reconsideration was denied for lack of merit, hence this petition alleging grave abuse of discretion on the part of the NLRC in ordering the reinstatement of private respondent and the payment to him of one year back wages. We find adequate and compelling merit in the petition. The determinative issue in this case is whether or not the employment contract which stipulates that there is no employer-employee relationship between petitioner and Peronila is valid. Relevant to this issue, we are persuaded to hold that the re-employment of Peronila as a contractual bus driver was merely an act of generosity on the part of petitioner. Although we have ruled in a number of cases applying Article 280 of the Labor Code 14 that when the activities performed by the employee are usually necessary or desirable in the usual trade of the employer, the employment is deemed regular notwithstanding a contrary agreement, 15 there are exceptions to this rule especially if circumstances peculiar to the case warrant a departure therefrom. What said Article 280 seeks to prevent is the practice of some unscrupulous and covetous employers who wish to circumvent the law that protects lowly workers from capricious dismissal from their employment. The aforesaid provision, however, should not be interpreted in such a way as to deprive employers of the right and prerogative to chose their own workers if they have sufficient basis to refuse an employee a regular status. Management has rights which should also be protected. The petitioner had validity dismissed Peronila long before he entered into the contested employment contract. It was Peronila who earnestly pleaded with petitioner to give him a second chance. The re-hiring of private respondent was out of compassion and not because the petitioner was impressed with the credentials of Peronila. Peronila's previous violations of company rules explains the reluctant attitude to the petitioner in rehiring him. When the bus driven by Peronila figured in a road mishap, that incident finally prompted petitioner to sever any further relationship with said private respondent. We have recently held in Philippine Village Hotel vs. National Labor Relations Commission, et al. 16 that the fact that the private respondents therein were required to render services necessary or desirable in the operation of the petitioner's business for a duration of the one month dry-run operation period did not in any way impair the validity of the contractual nature of private respondents' contracts of employment which specifically stipulated that their employment was only for one month. In upholding the validity of a contract of employment with fixed or specific period in a number of cases, we explained therein that "the decisive determinant in term employment should not be the activities that the employee is called upon to perform, but the day certain agreed upon the parties for the commencement and termination of their employment relationship, a day certain being understood to be that which must necessarily come, although it may not be known when. . . . This ruling is only in consonance with Article 280 of the Labor Code." As to whether or not the principle of security of tenure provided in Article 280 of the Labor Code has been violated, we have made the following pronouncements by way of guidelines: "In Brent School, Inc., et al. vs. Ronaldo Zamora, etc., et al., the Court had occasion to examine in detail the question of whether employment for a fixed term has been outlawed under the above quoted provisions of the Labor Code. After an extensive examination of the history and development of Articles 280 and 281, the Court reached the conclusion that the contract providing for employment with a fixed period was not necessarily unlawful: 'There can of course be no quarrel with the proposition that where from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to public policy, morals, etc. But where no such intent to circumvent the law is shown, or stated otherwise, where the reason for the law does not exist, e.g., where it is indeed the employee himself who insists upon a period or where the nature of the engagement is such that,

without being seasonal or for a specific project, a definite date of termination is a sine qua non, would an agreement fixing a period be essentially evil or illicit, therefore anathema? Would such an agreement come within the scope of Article 280 which admittedly was enacted 'to prevent the circumvention of the right of the employee to be secured in . . . (his) employment?' As it is evident from even only the three examples already given that Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails to exhaust the gamut of employment contracts to which the lack of a fixed period would be an anomaly but would also appear to restrict, without reasonable distinctions, the right of an employee to freely stipulate with his employer the duration of his engagement, it logically follows that such a literal interpretation should be eschewed or avoided. The law must be given reasonable interpretation, to preclude absurdity in its application. Outlawing the whole concept of term employment and subverting to boot the principle of freedom of contract to remedy the evil of employers' using it as a means to prevent their employees from obtaining security of tenure is like cutting off the nose to spite the face or, more relevantly, curing a headache by lopping off the head." 17 In the case of Philippine National Oil Company-Energy Development Corporation vs. National Labor Relations Commission, et al., 18 this Court set down two criteria under which fixed contracts of employments cannot be said to be in circumvention of security of tenure, to wit: 1. The Fixed period of employment was knowingly and voluntarily agreed upon by the parties, without any force duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent; or 2. It satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter. In the present dispute, the services of respondent Peronila had been validly terminated by petitioner, when the latter absented himself without official leave, fifteen years before he was re-hired as a contractual driver for just one month. Definitely, his re-hiring cannot be construed to mean that Peronila reacquired his former permanents status. Furthermore, as correctly pointed out by the Solicitor General, "there is no evidence on record that private respondent in fact held the position of a bus driver for nearly seventeen years, except his bare and unsupported allegations to that effect in his Position Paper. . . . There is ample and unrebutted evidence that private respondent's employment by PNEI in 1971 was illegally terminated on March 20, 1973. The Order issued by the Mediator-Factfinder Loreto V. Poblete of the Regional Office No. II, National Labor Relations Commission, Tuguegarao, Cagayan in the case entitled, "Pantranco vs. Rodolfo Peronila" docketed as NLRC Case No. 85, attests to this fact. 19 We once again reiterate that the findings of an administrative agency, to be conclusive and binding, must be supported by substantial evidence. 20 A conflict between the factual findings of the NLRC and the labor arbiter will necessitate a review of such factual findings. The impugned decision of respondent commission appears to have laid too much stress on the conceptual principles of social justice in labor cases without the corresponding specifics to supports its conclusions. It must not be overlooked that along with the inspirational passages on social justice in Calalang vs. Williams, et., al., 21 there is this sobering caveat: "The promotion of social justice, however, it is to be achieved not through a mistaken sympathy towards any given group" since it "means the promotion of the welfare of all the people . . . through the maintenance of a proper economic and social equilibrium in the interrelations of the members of the community," and "must be founded on the recognition . . . of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life, . . . ." WHEREFORE, the instant petition is GRANTED, the challenged decision of respondent National Labor Relations is hereby SET ASIDE, and the complaint against petitioners is DISMISSED. SO ORDERED.

Narvasa, C.J., Puno and Mendoza, JJ., concur.

SECOND DIVISION [G.R. No. 107541. November 16, 1995.] PAMPANGA II ELECTRIC COOPERATIVE, INC., and JESUS S. NICDAO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (Third Division) and RAFAEL TIGLAO, respondents. Eduardo P. Ocampo for petitioner. Amorsolo P. Adolfo for private respondent. The Solicitor General for respondents. Cdlex

SYLLABUS 1. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; LOSS OF CONFIDENCE; BASIS THEREFOR MUST BE DULY SUBSTANTIATED. — The employer has a right to dismiss an employee on the ground of loss of trust or confidence. The condition for the exercise of this right is that it must be based "on just and lawful causes, duly substantiated, otherwise it could easily be used as a pretext to reduce to a barren form of words the constitutional guarantee of security of tenure." In the case at bar, it is not true, as the Labor Arbiter and NLRC held, that there was not "an iota of evidence establishing the fact that [herein private

respondent] was involved in any anomaly, particularly an act which can be the basis of fraud or dishonesty that will lead [herein petitioners] to lose trust and confidence on him." 2. ID.; ID.; REQUIREMENTS OF PROCEDURAL DUE PROCESS; COMPLIED WITH IN CASE AT BAR. — In Tiu v. NLRC, (215 SCRA 540 [1992]) this Court, considering the provisions of Art. 277 of the Labor Code and those of Book V, Rule XIV, §§ 2-6 of the Rules Implementing the Labor Code, held that two written notices must be given to an employee before he may be dismissed. The first is notice apprising him of the particular acts or omissions for which his dismissal is sought. This is the equivalent of a charge. The second is notice informing him of his dismissal, to be issued after the employee has been given reasonable opportunity to answer and to be heard on his defense. The decision to dismiss must be in accord with the law and the evidence and not the whim or caprice of the employer. These requirements were observed by petitioners. DECISION MENDOZA, J p: This is a petition for certiorari to set aside the resolution of the National Labor Relations Commission, affirming with modification the decision of the Labor Arbiter, finding petitioners guilty of the illegal dismissal of respondent Rafael Tiglao. Petitioner Pampanga II Electric Cooperative, Inc. (PELCO II) is an electric cooperative serving the municipalities of Lubao, Sasmuan, Sta. Rita, Mabalacat, Porac and Bacolor in the province of Pampanga. Petitioner Jesus Nicdao is its General Manager, while private respondent Rafael Tiglao was its bill collector until November 7, 1990 when he was dismissed for failure to account for P75,238.87 which he had allegedly collected from electric consumers. The Labor Arbiter and the National Labor Relations Commission found the facts to be as follows: On or about 30 April 1990, while complainant was on his way home after the usual collection of electric bills somewhere at Barangay Sta. Ursula, Betis, Guagua, Pampanga, the place of his official assignment, three (3) men under the influence of liquor met his path and then invited him to join them in a drinking session in a nearby small store. Since complainant recognized these men by their faces as among the few from the bunch of resident-consumers keen in connecting "electric jumper" whom he previously warned, he politely turned down the invitation. Sensing that trouble may erupt due to complainant's turning down the invitation, he ran away from them to a safer direction. However, although complainant successfully eluded the three men inviting him for a drinking session unnoticed, he lost his clutch bag that contains personal things, like a cash money in the sum of P5,000.00 and several receipts of collectible electric bills in the amount of more or less P70,000.00 which he reported on the same date to Mr. Leonardo Calma, the Barangay Captain, who, together with some councilmen have accompanied him in the place where he came from but their efforts to locate the missing clutch bag turned futile. On 02 May 1990, the following working day, complainant immediately informed Mr. Virgilio Yambao, respondent's Area Manager, about what happened to him, and suggested that he will continue anyway to collect the amount indicated in those missing duplicated receipts based on his personal record which are the listing of names and respective accounts of resident-consumers in the total sum of P75,238.87. But, in spite of complainant's suggestion, the Area Manager ordered the auditing personnel to conduct an internal audit against him and the audit confirmed that he has an unremitted payments for electric power consumed by several residents in his place of assignment in the amount of P75,238.87. Based on the audit report, Area Manager Virgilio Yambao sent a Memorandum to complainant on 27 July 1990 directing him to settle immediately his obligation. On 08 August 1990, complainant replied on the Memo of Mr. Yambao proposing settlement of the alleged obligation under the following schedules: starting 15 August 1990, to pay the amount of P500.00 and the same amount on the 30th of said month by way of salary deduction on each pay day, and for every succeeding month thereafter, until the total obligation is fully settled and paid; or, in the alternative, to execute in favor of PELCO II a Deed of Conveyance over his real property with an area of not less than 11,000

square meters or more than one (1) hectare with a total assessed market value in the amount of not less than P100,000.00 in satisfaction of the above-stated obligation. Together with the proposal, complainant also stated that he has been in the company for more than eighteen (18) years of service with untarnished record of performance and it is only now that this happened to him which was not entirely due to his own fault; that he has a family with seven children to feed and who are still attending school; and that this offer was made to show his good faith and loyalty to the company. On 23 August 1990, Area Manager Virgilio Yambao wrote a letter to complainant stating that his proposal was not acceptable to the Management of respondent Company, and he was advised, to avoid the possibility of criminal liability, to finally settle his obligation within five (5) days from receipt of said letter or be terminated from his services without prejudice to the necessary action warranted under the circumstances. On 31 August 1990, respondent Engr. Jesus S. Tiglao, General Manager of respondent Cooperative, wrote complainant the following observations: 1. You are indeed accountable with the amount of P75,238.87 representing collection money that were not remitted to the office as should have been the case and which you now propose to pay on salary deduction but that the office is not amenable; 2. that up to this time of writing you have not settled said obligation despite the lapse of 5-days period given you in the afore-mentioned letter; 3. that this not the only instance of such non-remittance incident in your having been a collector in the office of Pelco II but on previous similar actuations before; 4. that aside from non-remittance of your collections you were also an absentee;

5. that your records would show your deliberate disregard to Memorandum and reprimand of your supervisors calling for your actuations in employment. and meted him with a suspension from work without pay for an indefinite period of time from 03 September 1990. On the same date, upon receipt of his suspension-notice, complainant referred his case to the Union Grievance Committee thru Mr. Remigio Palo, Union President, but days passed and no words from the union was ever communicated to him. Also, complainant lost no time and opportunity to appeal his case to respondent Jesus Nicdao and a letter-appeal was written by him on 15 September 1990 but it was not attended to. Between the period that complainant was instructed to stop collecting bills up to November 1990, there were several consumers who voluntarily paid their accounts but respondents merely deducted said amount to his alleged obligation and, on 07 November 1990, he was handed a termination letter by respondent General Manager, Engr. Jesus Nicdao, to take effect immediately, for failure to settle his alleged money accountabilities with the Cooperative in the remaining amount of P72,278.87. On the basis of these facts, the Labor Arbiter found the petitioner PELCO guilty of illegal dismissal and unfair labor practice. Accordingly he ordered PELCO II as follows: WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered: 1. 2. Declaring respondents to be guilty of illegal dismissal and unfair labor practice act, as charged; Ordering respondents to cease and desist from further committing the acts complained of;

3. Ordering respondents to reinstate complainant immediately to his former position under the same terms and conditions obtaining at the date of his dismissal, without loss of seniority rights and other benefits, either physically or in the payroll, at the option of respondents, as mandated by R.A. 6715; 4. Ordering respondent to pay the full backwages and other benefits of complainant, moral and exemplary damages, as well as, attorney's fees, as follows:

a. b.

Backwages (parties) P57,280.00 other benefits: 1) 2) 13th month pay for 1990 and 1991 Sick leave and vacation leave benefits for 1990 and 1991. P7,160.00 P7,160.00

c. d. e.

Moral damages

P20,000.00

Exemplary damages P10,000.00 Attorney's fees (partial) ————— P10,160.00

or in the grant total of P101,600.00 ========= SO ORDERED. Cdll

On appeal, the NLRC affirmed with modification as follows: IN VIEW OF THE FOREGOING, the appealed Decision is hereby Affirmed, with Modification, recomputing the backwages which should not exceed three (3) years, deleting the award of moral and exemplary damages, reducing the amount of attorney's fees to P1,432.00 and absolving the respondent from the unfair labor practice charge. SO-ORDERED. Hence, this petition by PELCO II and its general Manager Jesus S. Nicdao. Petitioners contend that the NLRC erred in finding "that there was no single iota of evidence establishing the fact that private respondent was involved in any anomaly," because in fact private respondent had admitted in his letter dated August 8, 1990 liability for the payment of the amount of P75,238.87 representing unremitted collection and for this reason proposed a schedule of payment. Petitioners argue that pursuant to § 26 of Rule 130 of the Rules of Court, which states that "the act, declaration or omission of a party as to a relevant fact may be given in evidence against him," private respondent's letter is evidence against him and that in disregarding this evidence the NLRC acted with grave abuse of discretion. The petitioners claim that they have a valid ground to dismiss the private respondent based on loss of faith and confidence in him because the nature of the job of the private respondent requires the highest degree of honesty. They contend: Under Art. 283 (now 281) of the Labor Code, an employer may terminate an employment for "serious misconduct" or for "fraud or willful breach by the employee of the trust reposed in him employer or represented." Loss of confidence as a ground for dismissal does not entail proof beyond reasonable doubt of the employee's misconduct. It is enough that there be "some basis" for such loss of confidence or that the employer has reasonable grounds to believe, if not to entertain the moral conviction that the employee concerned is responsible for the misconduct and that the nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded by his position. (Reyes v. Zamora, L-46732, May 5, 1979, 90 SCRA 92, and Caluin v. PNB , L-23931, August 29, 1969, 29 SCRA 293 cited in the Dole Phils., Inc. v. NLRC, et al., G.R. No. L-55413, July 25, 1983, 19 SCRA 417). 1 With respect to the finding of the NLRC that what were lost were merely "unremitted bills" but that there was no evidence that private respondent had actually collected the electric bills, petitioners contend:

It would be contrary to human experience to pay or to execute a deed of conveyance in payment of said electric bills, if they have not yet been COLLECTED. If the intention of the PRIVATE RESPONDENT was to guarantee the collections of said electric bills, then he would not have propose to pay the said amount by way of SALARY DEDUCTION OR DEED OF CONVEYANCE. A mere mortgage would have instead serve the purpose of guaranteeing the collections of said electric bills. 2 Petitioners further aver that the NLRC erred in finding that the private respondent had been denied due process 3 because as a matter of fact a series of communication and correspondence between the parties preceded the private respondent's dismissal. The Office of the Solicitor General (OSG), appearing for the NLRC, defends its decision, contending that petitioners' evidence was insufficient to prove that the private respondent misappropriated the amount he was being made to pay. The OSG claims that, consistently with the finding that there was no proof that private respondent failed to account for his collection, the NLRC correctly disallowed the Labor Arbiter's grant of moral and exemplary damages to private respondent because it was the latter's own negligence which resulted in the loss of the receipts. We find the petitioners' contentions to be well taken. First. The employer has a right to dismiss an employee on the ground of loss of trust or confidence. 4 The condition for the exercise of this right is that it must be based "on just and lawful causes, duly substantiated, otherwise it could easily be used as a pretext to reduce to a barren form of words the constitutional guarantee of security of tenure." 5 In the case at bar, it is not true, as the Labor Arbiter and NLRC held, that there was not "an iota of evidence establishing the fact that [herein private respondent] was involved in any anomaly, particularly an act which can be the basis of fraud or dishonesty that will lead [herein petitioners] to lose trust and confidence on him." There was evidence to show that private respondent collected P75,238.87 from member-consumers of the PELCO II, and that evidence was supplied by private respondent himself. Private respondent claimed that he lost the receipts he was carrying as he fled from people he had previously found installing "jumpers" 6 for fear that they might harm him. Obviously the management of PELCO II did not believe his story because on July 27, 1990, PELCO II sent him a memorandum stating that per audit he had "unremitted bills in the amount of P75,238.87" which he should "settle immediately." Instead of insisting on his story, private respondent acknowledged his obligation and proposed to pay it through payroll deductions or, if this was not acceptable to petitioners, by conveying to the cooperative a parcel of land which he owned. Thus in reply to the memorandum sent to him private respondent wrote petitioners on August 8, 1990: MEMO FOR : MR. VIRGILIO M. YAMBAO Guagua Area Manager FROM : MR. RAFAEL TIGLAO Collector, Pampanga II Electric Cooperative, Inc. Guagua Sub-Office RE SIR: : UNREMITTED BILLS TOTALLING P75,238.87

With regard to your letter of July 27, 1990 wherein you directed the undersigned to settle immediately the afore-mentioned obligation, I have the honor to propose that the said obligation be paid under the following schedule, namely: Starting the month of August 15, 1990, to pay the amount of P500.00 and the same amount on the 30th of the said month by way of salary deduction due to me each pay day; and for every succeeding month thereafter until the total obligation is fully settled and paid. In the alternative, sir, I am also willing to execute in favor of PELCO II a Deed of Conveyance over my real property with an area of not less than 11,000 sq. meters, or more than one (1) hectare with a total market value assessed in the amount of not less than P100,000.00 in satisfaction of the above-stated obligation. Sir, this modest proposal is prompted by the following considerations, to wit: Although I have been for more than eighteen (18) years in the service of the company with untarnished record of performance but only now, which was not, however, entirely due to my own fault, and with a family of seven to feed and who are all attending school I am making this offer of payment to show my good faith and loyalty to the company that I served for more than eighteen (18) years. Anticipating that this message will merit your favorable action. Very truly yours, RAFAEL TIGLAO Such evidence is admissible against private respondent. 7 With such evidence it became unnecessary for petitioners to show that private respondent had in fact collected the electric bills but failed to remit his collection. Indeed, both the Labor Arbiter and the NLRC found that private respondent "was [already] on his way home after the usual collection of electric bills somewhere at Barangay Sta. Ursula, Betis, Guagua, Pampanga, the place of his official assignment" when he allegedly saw the three men from whom he feared harm. It is therefore clear that he had already made collections. That nine consumers — not 12 as the Labor Arbiter and the NLRC said — made an affidavit attesting to the fact that private respondent had not yet collected their bills and that after private respondent's suspension the petitioners were able to collect a total of P3,000.00 from some of the consumers merely shows, if at all, that private respondent had not collected from such individuals. It does not prove at all that he had not collected from the rest of the consumers under his charge. The cause of social justice is not served by upholding the interest of private respondent in disregard of the right of petitioners. Social justice ceases to be an effective instrument for the "equalization of the social and economic forces" 8 by the State when it is used to shield wrongdoing. For private respondent was no ordinary worker. He was a bill collector whose job depended on the utmost trust and confidence of his employer. We have affirmed the dismissal of bill collectors found guilty of misappropriation of money in their custody on precisely this ground. 9 Private respondent admitted a breach of that confidence, but despite that the Labor Arbiter and the NLRC insisted "there was not an iota of evidence establishing" culpability on the part of the employee. This calls for reversal where normally respect for findings of administrative agencies is the rule. Second. The Labor Arbiter and the NLRC held that private respondent had been dismissed without due process because: [1] [U]pon receipt by the Area Manager, Virgilio Yambao, of the audit report showing that complainant's alleged 'unremitted bills' in the amount of P75,238.87, the former immediately concluded that the latter was liable for it and directed him to settle his obligation immediately (Complainant's Annex "C"/Respondents' Annex "1"), without first affording the complainant his right to notice of dismissal and to know the reason for the proposed dismissal.

[2] Respondent Jesus Nicdao, the General Manager of respondent Cooperative, reacting to the letter of the Area Manager, placed complainant under indefinite period of suspension effective 03 September 1990 pursuant to his Memorandum dated 31 August 1990 (Complainant's Annex "F"/Respondents' Annex "4"), thereby preventing complainant from reporting for work starting that even date. [3] And, without prior investigation being conducted wherein complainant should have been afforded the right to be heard, to examine the basis of the audit report, to confront witnesses or the audit personnel, to produce evidence in his behalf, except allowing, he was summarily terminated allegedly on the basis of 'loss of trust and confidence' reposed upon him by the respondents, apparently due to his failure to settle the 'unremitted bills' in the amount of P75,238.87. In Tiu v. NLRC, 10 this Court, considering the provisions of Art. 277 of the Labor Code and those of Book V, Rule XIV, §§ 2-6 of the Rules Implementing the Labor Code, held that two written notices must be given to an employee before he may be dismissed. The first is notice apprising him of the particular acts or omissions for which his dismissal is sought. This is the equivalent of a charge. The second is notice informing him of his dismissal, to be issued after the employee has been given reasonable opportunity to answer and to be heard on his defense. The decision to dismiss must be in accord with the law and the evidence and not the whim or caprice of the employer. These requirements were observed by petitioners. The following were had before private respondent was finally dismissed on November 7, 1990. (1) On July 27, 1990, the management of PELCO II issued the following memorandum to private respondent: As per audit shows that you have unremitted bills in the amount of P75,238.87 at the barrio of Sta. Ursula, Betis, Guagua, Pampanga. In view of this, you are hereby directed to settle your obligation immediately. This is the notice to private respondent of the charge. The Labor Arbiter and the NLRC say that there was prejudgment because the memorandum right away requires him to pay the amount of P75,238.87. Necessarily management must first conclude that he should pay before it can give him notice of the charge. (2) Private respondent answered this memorandum by sending the following memorandum to the Area Manager of PELCO II on August 8, 1990: MEMO FOR : MR. VIRGILIO M. YAMBAO Guagua Area Manager FROM : MR. RAFAEL TIGLAO Collector, Pampanga II Electric Cooperative, Inc. Guagua Sub-Office RE SIR: With regard to your letter of July 27, 1990 wherein you directed the undersigned to settle immediately the afore-mentioned obligation, I have the honor to propose that the said obligation be paid under the following schedule, namely: : UNREMITTED BILLS TOTALLING P75,238.87

Starting the month of August 15, 1990, to pay the amount of P500.00 and the same amount on the 30th of the said month by way of salary deduction due to me on each pay day; and for every succeeding month thereafter until the total obligation is fully settled and paid. In the alternative, sir, I am also willing to execute in favor of PELCO II a Deed of Conveyance over my real property with an area of not less than 11,000 sq. meters, or more than one (1) hectare with a total market value assessed in the amount of not less than P100,000.00 in satisfaction of the above-stated obligation. Sir, this modest proposal is prompted by the following considerations, to wit: Although I have been for more than eighteen (18) years in the service of the company with untarnished record of performance but only now, which was not, however, entirely due to my own fault, and with a family of seven to feed who are all attending school I am making this offer of payment to show my good faith and loyalty to the company that I served for more than eighteen (18) years. Anticipating that this message will merit your favorable action. Very truly yours, RAFAEL TIGLAO Private respondent was thus given a reasonable opportunity to answer. As noted earlier, the answer contains an admission of liability for the amount of P75,238.87. (3) On August 23, 1990, the Area Manager of PELCO II replied as follows:

Mr. Rafael Tiglao Paralaya, Del Pilar San Fernando, Pampanga Dear Mr. Tiglao: Your letter dated August 8, 1990 Re-Unremitted Bills Totalling P75,238.87 has been referred to the Management of the cooperative. With regret, you are hereby advised that your proposal on how to pay your obligation is not acceptable. Neither the alternative one. Please be advised further that in order to avoid the possibility of a criminal liability on account of such obligation, you are finally afforded five (5) days from receipt of this letter to settle said obligation to the cooperative to terminate your services without prejudice to necessary action warranted under the circumstances. Very Truly yours, VIRGILIO YAMBAO Area Manager Guagua Sub-Office (4) Considering the admission of private respondent, it became unnecessary to hold any formal investigation. More particularly, it became unnecessary for PELCO II to allow private respondent to go over the audit report because he admitted his liability. All that was needed was to inform him of the findings of the management. In his letter of August 31, 1990, PELCO II's General Manager stated: MR. RAFAEL TIGLAO Paralaya, Del Pilar San Fernando, Pampanga

Dear Mr. Tiglao: A copy of the letter sent to you by your Manager, Mr. Virgilio Yambao, which you acknowledged received August 24, 1990 Re-Unremitted Bills totalling P75,238.87 is referred to the office of the undersigned. Having gone through the letter and your files within the office, the following observations are established: 1) you are indeed accountable with the Cooperative in the amount of P75,238.87 representing collection money that were not remitted to the office as should have been the case which you now propose to pay on salary deduction but that office is not amenable; 2) that up to this time you have not settled said obligation despite the lapse of 5 days period given you in the aforementioned letter; 3) that this is not only the instance of such non-remittance incident in your having been a collector in the office of PELCO II but on previous similar actuations before; 4) that aside from non-remittance of your collections you were also an absentee;

5) that your records would show your deliberate disregard to Memorandum and reprimand of your supervisors calling for you actuations; All these and more irregularities attributable to your person as an employee of the cooperative without satisfactory explanation despite the opportunities given you, are detrimental to the interest of the Cooperative. In view of the foregoing therefore, you are hereby meted with a suspension from work without pay for an indefinite period of time effective September 3, 1990, which may lead to the termination of your services without prejudice to necessary charges against you. Very truly yours, ENGR. JESUS NICDAO General Manager (5) On November 7, 1990 private respondent was given the final notice of termination:

Please be advised that your services as an employee of the Cooperative is hereby terminated, effective immediately. There is therefore no basis for the finding of the Labor Arbiter and the NLRC that private respondent had been given no notice and hearing before he was dismissed. That there was basis for his dismissal has already been discussed in the first section of this decision. WHEREFORE, the decision of the Labor Arbiter and the resolution of the NLRC affirming it are SET ASIDE and the complaint of private respondent in NLRC Case No. L-00045 (RAB-III-01-1949-91) is DISMISSED. SO ORDERED. Narvasa, C.J., Regalado and Puno, JJ., concur. Francisco, J., is on leave.

SECOND DIVISION [G.R. No. 58494. July 5, 1989.] PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT CORPORATION, petitioner, vs. HON. VICENTE T. LEOGARDO, DEPUTY MINISTER OF LABOR AND VICENTE D. ELLELINA, respondents.

SYLLABUS 1. PUBLIC CORPORATIONS; GOVERNMENT OWNED OR CONTROLLED CORPORATIONS; BASIS OF APPLICABILITY OF CIVIL SERVICE OF LABOR CODE. — Thus, under the present state of the law, the test in determining whether a government-owned or controlled corporation is subject to the Civil Service Law is the manner of its creation such that government corporations created by special charter are subject to its provisions while those incorporated under the general Corporation Law are not within its coverage. 2. ID.; ID.; PNOC-EDC, SUBJECT TO LABOR CODE. — We hold, therefore, that the PNOC-EDC, having been incorporated under the general Corporation Law, is a government-owned or controlled corporation whose employees are subject to the provisions of the Labor Code. This is apparently the intendment in the NASECO case notwithstanding the fact that the NASECO therein was a subsidiary of the PNB, a government-owned corporation. 3. CONSTITUTIONAL LAW; CONSTITUTION ENFORCED AT THE TIME OF DECISION APPLIES. — In NASECO vs. NLRC (G.R. No. 69870, November 29, 1988), we had occasion to apply the present Constitution in deciding whether or not the employees of NASECO (a subsidiary of the NIDC, which is in turn a subsidiary wholly-owned by the PNB, a government-owned corporation) are covered by the Civil Service Law or the Labor Code notwithstanding that the case arose at the time when the 1973 Constitution was still in effect. We held that the NLRC has jurisdiction over the employees of NASECO "on the premise that it is the 1987 Constitution that governs because it is the Constitution in place at the time of decision;" and that being a corporation without an original charter, the employees of NASECO are subject to the provisions of the Labor Code. 4. LABOR CODE; TERMINATION OF EMPLOYMENT; DISMISSAL NOT JUSTIFIED IN CASE AT BAR. — The application for clearance was premised on Ellelina's alleged commission of a crime (Alarm or Public Scandal) during a Christmas party on 19 December 1977 at petitioner's camp in Uling, Cebu, when, because of the refusal of the raffle committee to give him the prize corresponding to his lost winning ticket, he tried to grab the armalite rifle of the PC Officer outside the building despite the warning shots fired by the latter. In so far as Ellelina is concerned, we hold that the reinstatement ordered by public respondent, without loss of seniority rights, is proper. However, consistent with the rulings of the Court, backwages should be limited to three years from 1 February 1978. The dismissal ordered by petitioner was a bit too harsh considering the nature of the act which he had committed and that it was his first offense.

DECISION MELENCIO-HERRERA, J p: Through this Petition for Certiorari, Philippine National Oil Company-Energy Development Corporation (PNOCEDC) seeks to declare null and void, for lack of jurisdiction, the Order of public respondent, the Deputy Minister of Labor, sustaining his jurisdiction over the instant controversy. Petitioner PNOC-EDC is a subsidiary of the Philippine National Oil Company (PNOC). On 20 January 1978, it filed with the Ministry of Labor and Employment, Regional Office No. VII, Cebu City (MOLE), a clearance

application to dismiss/terminate the services of private respondent, Vicente D. Ellelina, a contractual employee. cdphil The application for clearance was premised on Ellelina's alleged commission of a crime (Alarm or Public Scandal) during a Christmas party on 19 December 1977 at petitioner's camp in Uling, Cebu, when, because of the refusal of the raffle committee to give him the prize corresponding to his lost winning ticket, he tried to grab the armalite rifle of the PC Officer outside the building despite the warning shots fired by the latter. Clearance to dismiss was initially granted by MOLE but was subsequently revoked and petitioner was ordered to reinstate Ellelina to his former position, without loss of seniority rights, and with backwages from 1 February 1978 up to his actual reinstatement. Petitioner appealed to the Minister of Labor who, acting through public respondent, affirmed, on 14 August 1981, the appealed Order. Hence, this Petition predicated substantially on the following grounds: 1. Under Article 277 of the Labor Code, the Ministry of Labor and Employment has no jurisdiction over petitioner because it is a government-owned or controlled corporation; 2. Ellelina's dismissal is valid and just because it is based upon the commission of a crime.

On the other hand, public respondent contends: (a) While the petitioner is a subsidiary of the PNOC, it is still covered by the Labor Code and, therefore, within the jurisdiction of the Ministry of Labor inasmuch as petitioner was organized as a private corporation under the Corporation Law and registered with the Securities and Exchange Commission; (b) Petitioner is estopped from assailing the Labor Department's jurisdiction, having subjected itself to the latter when it filed the application for clearance to terminate Ellelina's services; and (c) Dismissal is too harsh a penalty.

The issues that confront us, therefore, are (1) whether or not public respondent committed grave abuse of discretion in holding that petitioner is governed by the Labor Code; and (2) whether or not Ellelina's dismissal was justified. Under the laws then in force, employees of government-owned and/or controlled corporations were governed by the Civil Service Law and not by the Labor Code. Thus, Article 277 of the Labor Code (PD 442) then provided: "The terms and conditions of employment of all government employees, including employees of governmentowned and controlled corporations shall be governed by the Civil Service Law, rules and regulations . . ." In turn, the 1973 Constitution provided: "The Civil Service embraces every branch, agency, subdivision and instrumentality of the government, including government-owned or controlled corporations." In National Housing Corporation vs. Juco (L-64313, January 17, 1985, 134 SCRA 172), we laid down the doctrine that employees of government-owned and/or controlled corporations, whether created by special law or formed as subsidiaries under the general Corporation Law, are governed by the Civil Service Law and not by the Labor Code. However, the above doctrine has been supplanted by the present Constitution, which provides: "The Civil Service embraces all branches, subdivisions, instrumentalities and agencies of the Government, including government-owned or controlled corporations with original charters." (Article IX-B, Section 2 [1]) Thus, under the present state of the law, the test in determining whether a government-owned or controlled corporation is subject to the Civil Service Law is the manner of its creation such that government corporations

created by special charter are subject to its provisions while those incorporated under the general Corporation Law are not within its coverage. In NASECO vs. NLRC (G.R. No. 69870, November 29, 1988), we had occasion to apply the present Constitution in deciding whether or not the employees of NASECO (a subsidiary of the NIDC, which is in turn a subsidiary wholly-owned by the PNB, a government-owned corporation) are covered by the Civil Service Law or the Labor Code notwithstanding that the case arose at the time when the 1973 Constitution was still in effect. We held that the NLRC has jurisdiction over the employees of NASECO "on the premise that it is the 1987 Constitution that governs because it is the Constitution in place at the time of decision;" and that being a corporation without an original charter, the employees of NASECO are subject to the provisions of the Labor Code. We see no reason to depart from the ruling in the aforesaid case. We hold, therefore, that the PNOC-EDC, having been incorporated under the general Corporation Law, is a government-owned or controlled corporation whose employees are subject to the provisions of the Labor Code. This is apparently the intendment in the NASECO case notwithstanding the fact that the NASECO therein was a subsidiary of the PNB, a government-owned corporation. In so far as Ellelina is concerned, we hold that the reinstatement ordered by public respondent, without loss of seniority rights, is proper. However, consistent with the rulings of the Court, backwages should be limited to three years from 1 February 1978. The dismissal ordered by petitioner was a bit too harsh considering the nature of the act which he had committed and that it was his first offense. WHEREFORE, the Petition is DISMISSED, and the judgment of respondent public official is hereby AFFIRMED. No costs. SO ORDERED. Paras, Padilla, Sarmiento and Regalado, JJ., concur.

THIRD DIVISION [G.R. No. 85279. July 28, 1989.] SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), DIONISIO T. BAYLON, RAMON MODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO DE ALDAY, SERGIO ARANETA, PLACIDO AGUSTIN, VIRGILIO MAGPAYO, petitioners, 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.

SYLLABUS

1. ADMINISTRATIVE LAW; CIVIL SERVICE; PROHIBITION TO GOVERNMENT EMPLOYEES FROM STRIKING. — While the Constitution and the Labor Code are silent as to whether or not government employees may strike, they are prohibited from striking, by express provision of Memorandum Circular No. 6 series of 1987 of the Civil Service Commission and as implied in E.O. No. 180. 2. ID.; ID.; ID.; REMEDIES IN LIEU OF RIGHT TO STRIKE. — 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. 3. ID.; CIVIL SERVICE; SOCIAL SECURITY SYSTEM EMPLOYEES ARE PART THEREOF AND COVERED BY MEMORANDUM PROHIBITING STRIKES. — SSS employees are part of the civil service and are covered by the Civil Service Commission's memorandum prohibiting strikes. 4. LABOR AND SOCIAL LEGISLATION; EXECUTIVE ORDER NO. 180; ALLOWS GOVERNMENT EMPLOYEES TO NEGOTIATE WHERE TERMS AND CONDITIONS OF EMPLOYMENT ARE NOT AMONG THOSE FIXED BY LAW. — E.O. No. 180 which provides guidelines for the exercise of the right to organize of government employees, allows negotiation where the terms and conditions of employment involved are not among those fixed by law. 5. ID.; ID.; TERMS AND CONDITIONS OF EMPLOYMENT IN GOVERNMENT ARE GOVERNED BY LAW; EMPLOYEES SHALL NOT STRIKE TO SECURE CHANGES. — Section 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 government-owned and controlled corporations with original charters are governed by law and employees therein shall not strike for the purpose of securing changes thereof." 6. ID.; LABOR RELATIONS; STRIKES; NATIONAL LABOR RELATIONS COMMISSION HAS NO JURISDICTION TO ISSUE AN INJUNCTION TO RESTRAIN AN ILLEGAL STRIKE STAGED BY SOCIAL SECURITY SYSTEM EMPLOYEES; REASONS. — 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. 7. ID.; ID.; ID.; ID.; REGIONAL TRIAL COURT HAS JURISDICTION TO ISSUE AN INJUNCTION TO ENJOIN SAID STRIKE; REASON. — 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. 8. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; NOT PROPER WHERE COURT CANNOT BE ACCUSED OF IMPRUDENCE OR OVERZEALOUSNESS AS IT PROCEEDED WITH CAUTION. — The lower Court cannot be accused of imprudence or zealousness, for after issuing a writ of injunction enjoining the continuance of the strike to prevent any further disruption of public service, 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.

9. ID.; CIVIL PROCEDURE; EXECUTION; WHEN REMEDY AVAILABLE TO PETITIONER. — Petitioners' remedy is not to petition this Court to issue an injunction, but to cause the execution of the order of the Merit Systems Promotion Board if it has already become final.

DECISION CORTES, J p: 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 or 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 and members of SSSEA staged an illegal strike and barricaded the entrances to the SSS Building, preventing nonstriking employees from reporting for work and SSS members from transacting business with the SSS; that the strike was reported to the Public Sector 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 enjoin 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. 21-24]. 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, resolved 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 and to issue the restraining order and the writ of preliminary injunction, 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 striking. In dismissing the petition for certiorari and prohibition with preliminary injunction filed by petitioners, the Court of Appeals 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. Thus, the sequential questions to be resolved by the Court in deciding whether or not the Court of Appeals erred is 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.

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. 3]. 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 self-organization shall not be denied to government employees" [Art. IX(B), Sec. 2(1) and (5)]. Parenthetically, the Bill of Rights also provides that "[t]he 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 includes 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 "[t]he 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 whose 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 Justice because we are trying to find a solution to this problem. We know that this problem exists; 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. I, 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 the 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 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 regulating the exercise of the right, they are prohibited from striking, by express provision 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(1); 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, 1983, 124 SCRA 1] 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 conditions 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 Labor-Management] 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, walkouts and other temporary work stoppages, like workers in the private sector, to pressure the Government 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 government-owned and controlled corporations with original charters are governed by law and employees therein shall not strike for the purpose of securing changes thereof." II 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 for 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. LibLex 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 service, 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 LaborManagement 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.

THIRD DIVISION [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 p: 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. 00-03-01035-87, 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. prcd On 20 March 1987, petitioner Luz Lumanta, joined by fifty-four (54) other retrenched employees, filed a complaint for unpaid 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 government-owned 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 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 FTI clearly falls outside the scope of the civil service as marked out in Section 2 (1), Article IX of the 7 Constitution. On 31 August 1987, Labor Arbiter Isabel P. Ortiguerra issued an Order, 1 the dispositive part of which read: "On account of the above findings the instant case is governed by 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 a labor law claim against a government-owned and controlled corporation, such as private respondent FTI, falls within jurisdiction of the Department of Labor and Employment. LLpr In refusing to take cognizance of petitioners' complaint against late respondent, the Labor Arbiter and the National Labor Relations Commission relied chiefly on this Court's ruling in National Housing Authority v. Juco, 2 which held that "there should no longer be any question at this time that employees of government-owned or controlled corporations are governed by civil service law and civil service 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, including government-owned 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 law as distinguished from corporations organized under our general incorporation statutethe Corporation Code. In NASECO, 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. It is the 1987 Constitution, and not the case law embodied in Juco, 5 which applies in the case at bar, under the principle that jurisdiction is determined as of the time of the filing of the complaint. 6 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. Letter of Instruction No. 1013, dated 19 April 1980, included Food Terminal, Inc. in the category of "government-owned or controlled corporations." 7 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 the general incorporation law, with the corporate name "Greater Manila Food Terminal Market, Inc." 8 The record does not indicate the precise amount of the capital stock of FTI that is owned by the government; the petitioners' claim, and this has not been disputed, that FTI is not hundred percent (100%) government-owned and that it has some private shareholders. cdll 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. 00-03-01035-87 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.

EN BANC [G.R. No. 124678. July 31, 1997.]

DELIA BANGALISAN, LUCILIN CABALFIN, EMILIA DE GUZMAN, CORAZON GOMEZ, CORAZON GREGORIO, LOURDES LAREDO, RODOLFO MARIANO, WILFREDO MERCADO, LIGAYA MONTANCES and CORAZON PAGPAGUITAN, petitioners, vs. HON. COURT OF APPEALS, THE CIVIL SERVICE COMMISSION and THE SECRETARY OF THE DEPARTMENT OF EDUCATION, CULTURE AND SPORTS, respondents. Froilan M. Bacungan & Associates for petitioners. The Solicitor General for respondents.

SYNOPSIS Petitioners were charged by the Secretary of the Department of Education Culture and Sports (DECS) with various offenses in violation of the Civil Service Law. They were all placed under preventive suspension. The controversy arose in connection with a "mass action" staged by a number of public school teachers allegedly to dramatize their grievances against public school authorities. Acting on appeal, the Civil Service Commission issued a resolution finding the petitioners guilty of conduct prejudicial to the best interest of the service and meted them a six months suspension with automatic reinstatement in service but without payment of backwages. Rodolfo Mariano, however, was found guilty only of violation of office rules and regulations because of his failure to inform the school of intended absence and to file an application for leave, for which he was given a penalty of reprimand. A petition for certiorari was filed by the public school teachers with the Court of Appeals but it was dismissed due to lack of merit, hence, this appeal by certiorari. The Supreme Court affirmed the decision of the Court of Appeals with modification that Rodolfo Mariano be given backwages from the time he was suspended until his actual reinstatement. The Court ruled that the right of the government employees to organize is limited to the formation of unions or associations, without including the right to strike. The basis of the charges against herein petitioners was within the competence of the Secretary of DECS to place them under preventive suspension.

SYLLABUS 1. CONSTITUTIONAL LAW; CIVIL SERVICE; RIGHT TO SELF-ORGANIZATION; LIMITED TO THE FORMATION OF UNIONS OR ASSOCIATIONS WITHOUT INCLUDING THE RIGHT TO STRIKE. — It is the settled rule in this jurisdiction that employees in the public service may not engage in strikes. While the Constitution recognizes the right of government employees to organize, they are prohibited from staging strikes, demonstrations, mass leaves, walk-outs and other forms of mass action which will result in temporary stoppage or disruption of public services. The right of government employees to organize is limited only to the formation of unions or associations, without including the right to strike. The ability to strike is not essential to the right of association. In the absence of statute, public employees do not have the right to engage in concerted work stoppages for any purpose. As a general rule, even in the absence of express statutory prohibition like Memorandum Circular No. 6, public employees are denied the right to strike or engage in a work stoppage against a public employer. The right of the sovereign to prohibit strikes or work stoppages by public employees was clearly recognized at common law. Indeed, it is frequently declared that modern rules which prohibit such strikes, either by statute or by judicial decision, simply incorporate or reassert the common law rule. To grant employees of the public sector the right to strike, there must be a clear and direct legislative authority therefor. In the absence of any express legislation allowing government employees to strike, recognizing their right to do so, or regulating the exercise of the right, employees in the public service may not engage in strikes, walkouts and temporary work stoppages like workers in the private sector. 2. ID.; ID.; ID.; ID.; WHEN MASS ACTION LAUNCHED BY PUBLIC SCHOOL TEACHERS MAY BE DEEMED A STRIKE; CASE AT BAR. — The issue of whether or not the mass action launched by the public

school teachers during the period from September up to the first half of October, 1990 was a strike has been decided by this Court in a resolution, dated December 18, 1990, in the herein cited case of Manila Public School Teachers Association et al. vs. Laguio, Jr., G.R. Nos. 95445 and 95590, August 6, 1991, 200 SCRA 323. It was there held "that from the pleaded and admitted facts, these 'mass actions' were to all intents and purposes a strike, they constituted a concerted and unauthorized stoppage of, or absence from, work which it was the teachers' duty to perform, undertaken for essentially economic reasons." It is an undisputed fact that there was a work stoppage and that petitioners' purpose was to realize their demands by withholding their services. The fact that the conventional term "strike" was not used by the striking employees to describe their common course of action is inconsequential, since the substance of the situation, and not its appearance, will be deemed to be controlling. 3. ID.; ID.; ID.; ID.; ID.; RATIONALE FOR THE DENIAL OF THE RIGHT TO STRIKE FOR GOVERNMENT EMPLOYEES. — As aptly stated by the Solicitor General, "It is not the exercise by the petitioners of their constitutional right to peaceably assemble that was punished, but the manner in which they exercised such right which resulted in the temporary stoppage or disruption of public service and classes in various public schools in Metro Manila. For, indeed, there are efficient but non-disruptive avenues, other than the mass actions in question, whereby petitioners could petition the government for redress of grievances." It bears stressing that suspension of public services, however temporary, will inevitably derail services to the public, which is one of the reasons why the right to strike is denied government employees. It may be conceded that the petitioners had valid grievances and noble intentions in staging the "mass actions," but that will not justify their absences to the prejudice of innocent school children. Their righteous indignation does not legalize an illegal work stoppage. 4. ADMINISTRATIVE LAW; PUBLIC OFFICERS; PREVENTIVE SUSPENSION; IMPOSITION AND EXECUTION THEREOF; WHEN PROPER; CASE AT BAR. — Section 51 of Executive Order No. 292 provides that "(t)he proper disciplining authority may preventively suspend any subordinate officer or employee under his authority pending an investigation, if the charge against such officer or employee involves dishonesty, oppression or grave misconduct, or neglect in the performance of duty, or if there are reasons to believe that the respondent is guilty of charges which would warrant his removal from the service." Under the aforesaid provision, it is the nature of the charge against an officer or employee which determines whether he may be placed under preventive suspension. In the instant case, herein petitioners were charged by the Secretary of the DECS with grave misconduct, gross neglect of duty, gross violation of Civil Service law, rules and regulations, and reasonable office regulations, refusal to perform official duty, gross insubordination, conduct prejudicial to the best interest of the service and absence without official leave (AWOL), for joining the teachers' mass actions held at Liwasang Bonifacio on September 17 to 21, 1990. Hence, on the basis of the charges against them, it was within the competence of the Secretary to place herein petitioners under preventive suspension. As to the immediate execution of the decision of the Secretary against petitioners, the same is authorized by Section 47, paragraph (2), of Executive Order No. 292, thus: "The Secretaries and heads of agencies and instrumentalities, provinces, cities and municipalities shall have jurisdiction to investigate and decide matters involving disciplinary action against officers and employees under their jurisdiction. Their decisions shall be final in case the penalty imposed is suspension for not more than thirty days or fine in an amount not exceeding thirty days' salary. In case the decision rendered by a bureau or office head is appealable to the Commission, the same shall be executory except when the penalty is removal, in which case the same shall be executory only after confirmation by the Secretary concerned." 5. ID.; ID.; ADMINISTRATIVE DUE PROCESS; ESSENCE THEREOF; CASE AT BAR. — Petitioners' claim of denial of due process must also fail. The records of this case clearly show that they were given opportunity to refute the charges against them but they failed to avail themselves of the same. The essence of due process is simply an opportunity to be heard or, as applied to administrative proceedings, an opportunity to seek reconsideration of the action or ruling complained of. For as long as the parties were given the opportunity to be heard before judgment was rendered, the demands of due process were sufficiently met.

6. ID.; ID.; PAYMENT OF BACK SALARIES DURING THE PERIOD OF SUSPENSION; WHEN PROPER; CASE AT BAR. — The issue regarding payment of back salaries during the period of suspension of a member of the civil service who is subsequently ordered reinstated, is already settled in our jurisdiction. Such payment of salaries corresponding to the period when an employee is not allowed to work may be decreed if he is found innocent of the charges which caused the suspension and when the suspension is unjustified. Under Section 23 of the Rules Implementing Book V of Executive Order No. 292 and other pertinent civil service laws, in violations of reasonable office rules and regulations, the first offense is punishable by reprimand. To deny petitioner Mariano his back wages during his suspension would be tantamount to punishing him after his exoneration from the charges which caused his dismissal from the service. 7. ID.; ID.; DENIAL OF SALARY DURING THE PERIOD OF SUSPENSION; WHEN PROPER; RATIONALE. — The denial of salary to an employee during the period of his suspension. if he should later be found guilty, is proper because he had given ground for his suspension. It does not impair his constitutional rights because the Constitution itself allows suspension for cause as provided by law and the law provides that an employee may be suspended pending an investigation or by way of penalty. Moreover, the general proposition is that a public official is not entitled to any compensation if he has not rendered any service. As he works, he shall earn.

DECISION REGALADO, J p: This is an appeal by certiorari from the judgment of the Court of Appeals in CA-G.R. SP No. 38316, which affirmed several resolutions of the Civil Service Commission finding petitioners guilty of conduct prejudicial to the best interest of the service, as well as its resolution on April 12, 1996 denying petitioners' motion for reconsideration. 1 Petitioners, except Rodolfo Mariano, were among the 800 public school teachers who staged "mass actions" on September 17 to 19, 1990 to dramatize their grievances concerning, in the main, the alleged failure of the public authorities to implement in a just and correct manner certain laws and measures intended for their material benefit. On September 17, 1990, the Secretary of the Department of Education, Culture and Sports (DECS) issued a Return-to-Work Order. Petitioners failed to comply with said order, hence they were charged by the Secretary with "grave misconduct; gross neglect of duty; gross violation of Civil Service law, rules and regulations and reasonable office regulations; refusal to perform official duty; gross insubordination; conduct prejudicial to the best interest of the service; and absence without official leave in violation of PD 807, otherwise known as the Civil Service Decree of the Philippines." They were simultaneously placed under preventive suspension. Despite due notice, petitioners failed to submit their answer to the complaint. On October 30, 1990, the DECS Secretary rendered a decision finding petitioners guilty as charged and dismissing them from the service effective immediately. Acting on the motions for reconsideration filed by petitioners Bangalisan, Gregorio, Cabalfin, Mercado, Montances and Pagpaguitan, the Secretary subsequently modified the penalty of dismissal to suspension for nine months without pay. Petitioner Gomez likewise moved for reconsideration with DECS and then appealed to the Merit Systems Protection Board (MSPB). The other petitioners also filed individual appeals to the MSPB, but all of their appeals were dismissed for lack of merit. Not satisfied with the aforestated adjudication of their respective cases, petitioners appealed to the Civil Service Commission (CSC). The appeals of petitioners Cabalfin, Montances and Pagpaguitan were dismissed

for having been filed out of time. On motion for reconsideration, however, the CSC decided to rule on the merits of their appeal in the interest of justice. cdasia Thereafter, the CSC issued Resolution No. 94-1765 finding Cabalfin guilty of conduct prejudicial to the best interest of the service and imposing on him a penalty of six months suspension without pay. The CSC also issued Resolutions Nos. 94-2806 and 94-2384 affirming the penalty of nine months suspension without pay therefore imposed on petitioners Montances and Pagpaguitan. With respect to the appeals of the other petitioners, the CSC also found them guilty of conduct prejudicial to the best interest of the service. It, however, modified the penalty of nine months suspension previously meted to them to six months suspension with automatic reinstatement in the service but without payment of back wages. All the petitioners moved for reconsideration of CSC resolutions but these were all denied, 2 except that of petitioner Rodolfo Mariano who was found guilty only of a violation of reasonable office rules and regulations because of his failure to inform the school of his intended absence and to file an application for leave therefor. This petitioner was accordingly given only a reprimand. 3 Petitioners then filed a petition for certiorari with this Court but, on August 29, 1995, their petition was referred to the Court of Appeals pursuant to Revised Administrative Circular No. 1-95. 4 On October 20, 1995, the Court of Appeals dismissed the petition for lack of merit. 5 Petitioners' motion for reconsideration was also denied by respondent court, 6 hence the instant petition alleging that the Court of Appeals committed grave abuse of discretion when it upheld the resolutions of the CSC (1) that penalized petitioners whose only offense was to exercise their penalized petitioners whose only offense was to exercise their constitutional right to peaceably assemble and petition the government for redress of grievances; (2) that penalized petitioner Mariano even after respondent commission found out that the specific basis of the charges that former Secretary Cariño filed against him was a falsehood; and (3) that denied petitioners, their right to back wages covering the period when they were illegally not allowed to teach. 7 It is the settled rule in this jurisdiction that employees in the public service may not engage in strikes. While the Constitution recognizes the right of government employees to organize, they are prohibited from staging strikes, demonstrations, mass leaves, walk-outs and other forms of mass action which will result in temporary stoppage or disruption of public services. The right of government employees to organize is limited only to the formation of unions or associations, without including the right to strike. 8 Petitioners contend, however, that they were not on strike but were merely exercising their constitutional right peaceably to assemble and petition the government for redress of grievances. We find such pretension devoid of merit. The issue of whether or not the mass action launched by the public school teachers during the period from September up to the first half of October, 1990 was a strike has been decided by this Court in a resolution, dated December 18, 1990, in the herein cited case of Manila Public School Teachers Association, et al. vs. Laguio, Jr., supra. It was there held "that from the pleaded and admitted facts, these 'mass actions' were to all intents and purposes a strike; they constituted a concerted and unauthorized stoppage of, or absence from, work which it was the teachers' duty to perform, undertaken for essentially economic reasons." It is an undisputed fact that there was a work stoppage and that petitioners' purpose was to realize their demands by withholding their services. The fact that the conventional term "strike" was not used by the striking employees to describe their common course of action is inconsequential, since the substance of the situation, and not its appearance, will be deemed to be controlling. 9 The ability to strike is not essential to the right of association. In the absence of statute, public employees do not have the right to engage in concerted work stoppage for any purpose. 10

Further, herein petitioners, except Mariano, are being penalized not because they exercised their right of peaceable assembly and petition for redress of grievances but because of their successive unauthorized and unilateral absences which produced adverse effects upon their students for whose education they are responsible. The actuations of petitioners definitely constituted conduct prejudicial to the best interest of the service, punishable under the Civil Service law, rules and regulations. As aptly stated by the Solicitor General, "It is not the exercise by the petitioners of their constitutional right to peaceably assemble that was punished, but the manner in which they exercised such right which resulted in the temporary stoppage or disruption of public service and classes in various public schools in Metro Manila. For, indeed, there are efficient but non-disruptive avenues, other than the mass actions in question, whereby petitioners could petition the government for redress of grievances." 11 It bears stressing that suspension of public services, however temporary, will inevitably derail services to the public, which is one of the reasons why the right to strike is denied government employees. 12 It may be conceded that the petitioners had valid grievances and noble intentions in staging the "mass actions," but that will not justify their absences to the prejudice of innocent school children. Their righteous indignation does not legalize an illegal work stoppage. aisadc As expounded by this Court in its aforementioned resolution of December 18, 1990, in the Manila Public School Teachers Association case, ante: "It is, of course, entirely possible that petitioners and their member-teachers had and have some legitimate grievances. This much may be conceded. After all, and for one thing, even the employees of the Court have found reason to complain about the manner in which the provisions of the salary standardization law on pay adjustments and position classification have been, or are being, implemented. Nonetheless, what needs to be borne in mind, trite though it may be, is that one wrong cannot be righted by another, and that redress, for even the most justifiable complaints, should not be sought through proscribed or illegal means. The belief in the righteousness of their cause, no matter how deeply and fervently held, gives the teachers concerned no license to abandon their duties, engage in unlawful activity, defy constituted authority and set a bad example to their students." Petitioners also assail the constitutionality of Memorandum Circular No. 6 issued by the Civil Service Commission. The resolution of the said issue is not really necessary in the case at bar. The argument of petitioners that the said circular was the basis of their liability is off tangent. As a general rule, even in the absence of express statutory prohibition like Memorandum Circular No. 6, public employees are denied the right to strike or engage in a work stoppage against a public employer. 13 The right of the sovereign to prohibit strikes or work stoppages by public employees was clearly recognized at common law. Indeed, it is frequently declared that modern rules which prohibit such strikes, either by statute or by judicial decision, simply incorporate or reassert the common law rule. 14 To grant employees of the public sector the right to strike, there must be a clear and direct legislative authority therefor. 15 In the absence of any express legislation allowing government employees to strike, recognizing their right to do so, or regulating the exercise of the right, employees in the public service may not engage in strikes, walkouts and temporary work stoppages like workers in the private sector. 16 On the issue of back wages, petitioners' claim is premised on the allegation that their preventive suspension, as well as the immediate execution of the decision dismissing or suspending them, are illegal. These submissions are incorrect. Section 51 of Executive Order No. 292 provides that "(t)he proper disciplining authority may preventively suspend any subordinate officer or employee under his authority pending an investigation, if the charge against such officer or employee involves dishonesty, oppression or grave misconduct, or neglect in the performance

of duty, or if there are reasons to believe that the respondent is guilty of charges which would warrant his removal from the service." Under the aforesaid provision, it is the nature of the charge against an officer or employee which determines whether he may be placed under preventive suspension. In the instant case, herein petitioners were charged by the Secretary of the DECS with grave misconduct, gross neglect of duty, gross violation of Civil Service law, rules and regulations, and reasonable office regulations, refusal to perform official duty, gross insubordination, conduct prejudicial to the best interest of the service and absence without official leave (AWOL), for joining the teachers' mass actions held at Liwasang Bonifacio on September 17 to 21, 1990. Hence, on the basis of the charges against them, it was within the competence of the Secretary to place herein petitioners under preventive suspension. As to the immediate execution of the decision of the Secretary against petitioners, the same is authorized by Section 47, paragraph (2), of Executive Order No. 292, thus: "The Secretaries and heads of agencies and instrumentalities, provinces, cities and municipalities shall have jurisdiction to investigate and decide matters involving disciplinary action against officers and employees under their jurisdiction. Their decisions shall be final in case the penalty imposed is suspension for not more than thirty days or fine in an amount not exceeding thirty days salary. In case the decision rendered by a bureau or office head is appealable to the Commission, the same shall be executory except when the penalty is removal, in which case the same shall be executory only after confirmation by the Secretary concerned." Petitioners' claim of denial of due process must also fail. The records of this case clearly show that they were given opportunity to refute the charges against them but they failed to avail themselves of the same. The essence of due process is simply an opportunity to be heard or, as applied to administrative proceedings, an opportunity to seek reconsideration of the action or ruling complained of. 17 For as long as the parties were given the opportunity to be heard before judgment was rendered, the demands of due process were sufficiently met. 18 Having ruled that the preventive suspension of petitioners and the immediate execution of the DECS decision are in accordance with law, the next query is whether or not petitioners may be entitled to back wages. The issue regarding payment of back salaries during the period of suspension of a member of the civil service who is subsequently ordered reinstated, is already settled in our jurisdiction. Such payment of salaries corresponding to the period when an employee is not allowed to work may be decreed if he is found innocent of the charges which caused the suspension and when the suspension is unjustified. 19 With respect to petitioner Rodolfo Mariano, payment of his back wages is in order. A reading of the resolution of the Civil Service Commission will show that he was exonerated of the charges which formed the basis for his suspension. The Secretary of the DECS charged him with and he was later found guilty of grave misconduct, gross neglect of duty, gross violation of the Civil Service Law, rules and regulations and reasonable office regulations, refusal to perform official duty, gross insubordination, conduct prejudicial to the best interest of the service, and absence without official leave, for his participation in the mass actions on September 18, 20 and 21, 1990. It was his alleged participation in the mass actions that was the basis of his preventive suspension and later, his dismissal from the service. However, the Civil Service Commission, in the questioned resolution, made a finding that Mariano was not involved in the "mass actions" but was absent because he was in Ilocos Sur to attend the wake and interment of his grandmother. Although the CSC imposed upon him the penalty of reprimand, the same was for his violation of reasonable office rules and regulations because he failed to inform the school of his intended absence and neither did he file an application for leave covering such absences. 20 Under Section 23 of the Rules Implementing Book V of Executive Order No. 292 and other pertinent civil service laws, in violations of reasonable office rules and regulations, the first offense is punishable by

reprimand. To deny petitioner Mariano his back wages during his suspension would be tantamount to punishing him after his exoneration from the charges which caused his dismissal from the service. 21 However, with regard to the other petitioners, the payment of their back wages must be denied. Although the penalty imposed on them was only suspension, they were not completely exonerated of the charges against them. The CSC made specific findings that, unlike petitioner Mariano, they indeed participated in the mass actions. It will be noted that it was their participation in the mass actions that was the very basis of the charges against them and their subsequent suspension. cdasia The denial of salary to an employee during the period of his suspension, if he should later be found guilty, is proper because he had given ground for his suspension. It does not impair his constitutional rights because the Constitution itself allows suspension for cause as provided by law and the law provides that an employee may be suspended pending an investigation or by way of penalty. 22 Moreover, the general proposition is that a public official is not entitled to any compensation if he has not rendered any service. As he works, he shall earn. Since petitioners did not work during the period for which they are now claiming salaries, there can be no legal or equitable basis to order the payment of such salaries. 23 It is also noteworthy that in its resolutions, the Civil Service Commission expressly denied petitioners' right to back wages. In the case of Yacia vs. City of Baguio, 24 the decision of the Commissioner of Civil Service ordering the dismissal of a government employee on the ground of dishonesty was immediately executed pending appeal, but, on appeal, the Civil Service Board of Appeals modified that penalty to a fine equivalent to six months pay. We ruled that the claim of an employee for back wages, for the period during which he was not allowed to work because of the execution of the decision of the Commissioner, should be denied. The appeal board's modified decision did not exonerate the employee nor did it affect the validity of his dismissal or separation from work pending appeal, as ordered by the Civil Service Commissioner. Such separation from work pending his appeal remained valid and effective until it was set aside and modified with the imposition of the lesser penalty by the appeals board. If the Civil Service Appeals Board had intended to grant him back salaries and to reduce his penalty to six months fine deductible from such unearned back salaries, the board could and should have so expressly stated in its decision. WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED, but with the MODIFICATION that petitioner Rodolfo Mariano shall be given back wages without deduction or qualification from the time he was suspended until his actual reinstatement which, under prevailing jurisprudence, should not exceed five years. SO ORDERED. Padilla, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Francisco, Hermosisima, Jr., and Panganiban, JJ ., concur. Narvasa, C .J . and Torres, J., are on official leave.

FIRST DIVISION [G.R. No. 87676, December 20, 1989] REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE NATIONAL PARKS DEVELOPMENT COMMITTEE, PETITIONER, VS. THE HON. COURT OF APPEALS AND THE NATIONAL PARKS DEVELOPMENT SUPERVISORY ASSOCIATION & THEIR MEMBERS, RESPONDENTS. DECISION

GRIÑO-AQUINO, J.: The Regional Trial Court of Manila, Branch LII, dismissed for lack of jurisdiction, the petitioner's complaint in Civil Case No. 88-44048 praying for a declaration of illegality of the strike of the private respondents and to restrain the same. The Court of Appeals denied the petitioner's petition for certiorari, hence, this petition for review. The key issue in this case is whether the petitioner, National Parks Development Committee (NPDC), is a government agency, or a private corporation, for on this issue depends the right of its employees to strike. This issue came about because although the NPDC was originally created in 1963 under Executive Order No. 30, as the Executive Committee for the development of theQuezon Memorial, Luneta and other national parks, and later renamed as the National Parks Development Committee under Executive Order No. 68, on September 21, 1967, it was registered in the Securities and Exchange Commission (SEC) as a non-stock and non-profit corporation, known as "The National Parks Development Committee, Inc." However, in August, 1987, the NPDC was ordered by the SEC to show cause why its Certificate of Registration should not be suspended for: (a) failure to submit the General Information Sheet from 1981 to 1987; (b) failure to submit its Financial Statements from 1981 to 1986; (c) failure to register its Corporate Books; and (d) failure to operate for a continuous period of at least five (5) years since September 27, 1967.

On August 18, 1987, then NPDC Chairman, Amado Lansang, Jr., informed SEC that his Office had no objection to the suspension, cancellation, or revocation of the Certificate of Registration of NPDC. By virtue of Executive Order No. 120 dated January 30, 1989, the NPDC was attached to the Ministry (later Department) of Tourism and provided with a separate budget subject to audit by the Commission on Audit. On September 10, 1987, the Civil Service Commission notified NPDC that pursuant to Executive Order No. 120, all appointments and other personnel actions shall be submitted through the Commission. Meanwhile, the Rizal Park Supervisory Employees Association, consisting of employees holding supervisory positions in the different areas of the parks, was organized and it affiliated with the Trade Union of the Philippines and Allied Services (TUPAS) under Certificate No. 1206. On June 15, 1987, two collective bargaining agreements were entered into between NPDC and NPDCEA (TUPAS local Chapter No. 967) and NPDC and NPDCSA (TUPAS Chapter No. 1206), for a period of two years or until June 30, 1989. On March 20, 1988, these unions staged a strike at the Rizal Park, Fort Santiago, PacoPark, and Pook ni Mariang Makiling at Los Banos, Laguna, alleging unfair labor practices by NPDC. On March 21, 1988, NPDC filed in the Regional Trial Court in Manila, Branch LII, a complaint against the union to declare the strike illegal and to restrain it on the ground that the strikers, being government employees, have no right to strike although they may form a union. On March 24, 1988, the lower court dismissed the complaint and lifted the restraining order for lack of jurisdiction. It held that the case "properly falls under the jurisdiction of the Department of Labor," because "there exists an employer-employee relationship" between NPDC and the strikers, and "that the acts complained of in the complaint, and which plaintiff seeks to enjoin in this action, fall under paragraph 5 of Article 217 of the Labor Code, x x x, in relation to Art. 265 of the same Code, hence, jurisdiction over said acts does not belong to this Court but to the Labor Arbiters of the Department of Labor." (p. 142, Rollo.) Petitioner went to the Court of Appeals on certiorari (CA-G.R. SP No. 14204). OnMarch 31, 1989, the Court of Appeals affirmed the order of the trial court, hence, this petition for review. The petitioner alleges that the Court of Appeals erred: 1) in not holding that the NPDC employees are covered by the Civil Service Law; and 2) in ruling that petitioner's labor dispute with its employees is cognizable by the Department of Labor. We have considered the petition filed by the Solicitor General on behalf of NPDC and the comments thereto and are persuaded that it is meritorious. In Jesus P. Perlas, Jr. vs. People of the Philippines, G.R. Nos. 84637-39, August 2, 1989, we ruled that the NPDC is an agency of the government, not a government-owned or controlled corporation, hence, the Sandiganbayan had jurisdiction over its acting director who committed estafa. We held thus: "The National Parks Development Committee was created originally as an Executive Committee on January 14, 1963, for the development of the Quezon Memorial, Luneta, and other national parks (Executive Order No. 30). It was later designated as the National Parks Development Committee (NPDC) on February 7, 1974 (E.O. No. 69). On January 9,1966, Mrs. Imelda R. Marcos and Teodoro F. Valencia were designated Chairman and Vice-Chairman respectively (E.O. No. 3). Despite an attempt to transfer it to the Bureau of Forest Development, Department of Natural Resources, on December 1, 1975 (Letter of Implementation No. 39, issued pursuant to PD No. 830, dated November 27, 1975), theNPDC has remained under the Office of the President (E.O. No. 709, dated July 27, 1981).

"Since 1977 to 1981, the annual appropriations decrees listed NPDC as a regular government agency under the Office of the President and allotments for its maintenance and operating expenses were issued direct to NPDC (Exh. 10-A, Perlas, Item No. 2, 3)." (Underscoring ours.) Since NPDC is a government agency, its employees are covered by civil service rules and regulations (Sec. 2, Article IX, 1987 Constitution). Its employees are civil service employees (Sec. 14, Executive Order No. 180). While NPDC employees are allowed under the 1987 Constitution to organize and join unions of their choice, there is as yet no law permitting them to strike. In case of a labor dispute between the employees and the government, Section 15 of Executive Order No. 180 dated June 1, 1987 provides that the Public Sector LaborManagement Council, not the Department of Labor and Employment, shall hear the dispute. Clearly, the Court of Appeals and the lower court erred in holding that the labor dispute between the NPDC and the members of the NPDSA is cognizable by the Department of Labor and Employment. WHEREFORE, the petition for review is granted. The decision of the Court of Appeals in CA-G.R. SP No. 14204 is hereby set aside. The private respondents' complaint should be filed in the Public Sector Labor-Management Council as provided in Section 15 of Executive Order No. 180. Costs against the private respondents. SO ORDERED. Narvasa, (Chairman), Cruz, Gancayco, and Medialdea, JJ., concur.

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