FIRST ASSIGNMENT EMPLOYER-EMPLOYEE REL RAUL G. LOCSIN anD EDDIE B. TOMAQUIN,versus - CHICONAZARIO, VELASCO, JR.

NACHUR PERALTA, JJ.PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, On November 1, 1990, respondent Philippine Long Distance Telephone Company (PLDT) and the Security and Safety Corporation of the Philippines (SSCP) entered into a Security Services Agreement (Agreement) whereby SSCP would provide armed security guards to PLDT to be assigned to its various offices. Pursuant to such agreement, petitioners Raul Locsin and Eddie Tomaquin, among other security guards, were posted at a PLDT office. On August 30, 2001, respondent issued a Letter dated August 30, 2001 terminating the Agreement effective October 1, 2001. Despite the termination of the Agreement, however, petitioners continued to secure the premises of their assigned office. They were allegedly directed to remain at their post by representatives of respondent.

Then, on September 30, 2002, petitioners’ services were terminated. Thus, petitioners filed a complaint before the Labor Arbiter for illegal dismissal and recovery of money claims such as overtime pay, holiday pay, premium pay for holiday and rest day, service incentive leave pay, Emergency Cost of Living Allowance, and moral and exemplary damages against PLDT.

ISSUE:

Whether or not; complainants from being an alleged contractual employees of the respondent for thirteen (13) years as they were then covered by a contract, becomes regular employees of the respondent as the one (1) year extended services of the complainants were not covered by a contract, and can be considered as direct employment. (in short, whether or not a employeeemployer relationship exists) Held: LABOR ARBITER The Labor Arbiter rendered a Decision finding PLDT liable for illegal dismissal. Such conclusion was arrived at with the factual finding that petitioners continued to serve as guards of PLDT’s offices. As such employees, petitioners were entitled to substantive and procedural due process before termination of employment. The Labor Arbiter held that respondent failed to observe such due process requirements. PLDT was ordered to pay complainants Raul E. Locsin and Eddie Tomaquin their separation pay and back wages. NLRC rendered a Resolution affirming in toto the Arbiter’s Decision. PDLT filed a Motion for Reconsideration of the NLRC’s Resolution which was also denied. PLDT filed a Petition for Certiorari with the CA asking for the nullification of the Resolution issued by the NLRC as well as the Labor Arbiter’s Decision. The CA rendered the assailed decision granting PLDT’s petition and dismissing petitioners’ complaint. COURT OF APPEALS The CA applied the four-fold test in order to determine the existence of an employer-employee relationship between the parties but did not find such relationship. It determined that SSCP was not a labor-only contractor and was an independent contractor having substantial capital to operate and conduct its

own business. The CA further bolstered its decision by citing the Agreement whereby it was stipulated that there shall be no employer-employee relationship between the security guards and PLDT. SUPREME COURT:

An Employer-Employee Relationship Existed Between the Parties It is beyond cavil that there was no employer-employee relationship between the parties from the time of petitioners’ first assignment to respondent by SSCP in 1988 until the alleged termination of the Agreement between respondent and SSCP. The only issue in this case is whether petitioners became employees of respondent after the Agreement between SSCP and respondent was terminated. This must be answered in the affirmative. Notably, respondent does not deny the fact that petitioners remained in the premises of their offices even after the Agreement was terminated. While respondent denies the alleged circumstances stated by petitioners, that they were told to remain at their post by respondent’s Security Department and that they were informed by SSCP Operations Officer Eduardo Juliano that their salaries would be coursed through SSCP as per arrangement with PLDT, it does not state why they were not made to vacate their posts. Respondent said that it did not know why petitioners remained at their posts. In the ordinary course of things, responsible business owners or managers would not allow security guards of an agency with whom the owners or managers have severed ties with to continue to stay within the business’ premises. This is because upon the termination of the owners’ or managers’ agreement with the security agency, the agency’s undertaking of liability for

any damage that the security guard would cause has already been terminated. Thus, in the event of an accident or otherwise damage caused by such security guards, it would be the business owners and/or managers who would be liable and not the agency. The business owners or managers would, therefore, be opening themselves up to liability for acts of security guards over whom the owners or managers allegedly have no control.

This, to our mind and under the circumstances, is sufficient to establish the existence of an employer-employee relationship. Such power of control has been explained as the “right to control not only the end to be achieved but also the means to be used in reaching such end.”[10] With the conclusion that respondent directed petitioners to remain at their posts and continue with their duties, it is clear that respondent exercised the power of control over them; thus, the existence of an employer-employee relationship. Jurisprudence is firmly settled that whenever the existence of an employment relationship is in dispute, four elements constitute the reliable yardstick: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee’s conduct. It is the so-called “control test” which constitutes the most important index of the existence of the employer-employee relationship that is, whether the employer controls or has reserved the right to control the employee not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. Stated otherwise, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved but also the means to be used in reaching such end. Both the Labor Arbiter and NLRC found that respondent did not observe such due process requirements. Having failed to do so, respondent is guilty of illegal dismissal.

WHEREFORE, we SET ASIDE the CA’s Decision and Resolution in CAG.R. SP No. 97398. We hereby REINSTATE the Labor Arbiter’s Decision dated and the NLRC’s Resolutions dated and . PEOPLE’S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.), VS THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN, Private respondent Jandeleon Juezan filed a complaint against petitioner with the Department of Labor and Employment (DOLE) Regional Office No. VII, Cebu City, for illegal deduction, nonpayment of service incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages and noncoverage of SSS, PAG-IBIG and Philhealth.After the conduct of summary investigations, and after the parties submitted their position papers, the DOLE Regional Director found that private respondent was an employee of petitioner, and was entitled to his money claims. Petitioner sought reconsideration of the Director’s Order, but failed. The Acting DOLE Secretary dismissed petitioner’s appeal. When the matter was brought before the CA, where petitioner claimed that it had been denied due process, it was held that petitioner was accorded due process as it had been given the opportunity to be heard, and that the DOLE Secretary had jurisdiction over the matter, as the jurisdictional limitation imposed by Article 129 of the Labor Code on the power of the DOLE Secretary under Art. 128(b) of the Code had been repealed by Republic Act No. (RA) 7730.

In the Decision of this Court, the CA Decision was reversed and set aside, and the complaint against petitioner was dismissed. PAST RULING OF THE SUPREME COURT The Court found that there was no employer-employee relationship between petitioner and private respondent. The National Labor Relations Commission (NLRC) was held to be the primary agency in determining the existence of an employer-employee relationship. This was the interpretation of the Court of

the clause “in cases where the relationship of employer-employee still exists” in Art. 128(b). From this Decision, the Public Attorney’s Office (PAO) filed a Motion for Clarification of Decision (with Leave of Court). The PAO sought to clarify as to when the visitorial and enforcement power of the DOLE be not considered as co-extensive with the power to determine the existence of an employeremployee relationship. It is apparent that there is a need to delineate the jurisdiction of the DOLE Secretary vis-à-vis that of the NLRC. Under Art. 129 of the Labor Code, the power of the DOLE and its duly authorized hearing officers to hear and decide any matter involving the recovery of wages and other monetary claims and benefits was qualified by the proviso that the complaint not include a claim for reinstatement, or that the aggregate money claims not exceed PhP 5,000. RA 7730, or anAct Further Strengthening the Visitorial and Enforcement Powers of the Secretary of Labor, did away with the PhP 5,000 limitation, allowing the DOLE Secretary to exercise its visitorial and enforcement power for claims beyond PhP 5,000. The only qualification to this expanded power of the DOLE was only that there still be an existing employer-employee relationship. It is conceded that if there is no employer-employee relationship, whether it has been terminated or it has not existed from the start, the DOLE has no jurisdiction. Under Art. 128(b) of the Labor Code, as amended by RA 7730, the first sentence reads, “Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection.” It is clear and beyond debate that an employer-employee relationship must exist for the exercise of the visitorial and enforcement power of the DOLE. Issue: May the DOLE make a determination of whether or not an employeremployee relationship exists, and if so, to what extent? HELD: The first portion of the question must be answered in the affirmative.

that no employer-employee relationship existed in the first place. upon review. The use of the "four way test" is not solely limited to the NLRC. to the exclusion of the NLRC. The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could. No procedure was laid down where the DOLE would only make a preliminary finding. making use of the same evidence that would have been presented before the NLRC. or his or her representatives. The DOLE would have no jurisdiction only if the employer-employee relationship has already been terminated. that is. as amended by RA 7730. and it is the DOLE that will weigh it.The prior decision of this Court in the present case accepts such answer. But even in conceding the power of the DOLE to determine the existence of an employeremployee relationship. the DOLE would refer the matter to the NLRC. to see if the same does successfully refute the existence of an employer-employee relationship. or that should the existence of the employer-employee relationship be disputed. the Court held that the determination of the existence of an employer-employee relationship is still primarily within the power of the NLRC. This conclusion must be revisited. force the referral of the matter to the NLRC. . The law did not say that the DOLE would first seek the NLRC’s determination of the existence of an employeremployee relationship. even in the course of inspection. and from there to decide whether or not to issue compliance orders in accordance with Art. No limitation in the law was placed upon the power of the DOLE to determine the existence of an employer-employee relationship. If the DOLE makes a finding that there is an existing employer-employee relationship. can utilize the same test. that any finding by the DOLE is merely preliminary. 128(b) of the Labor Code. The DOLE Secretary. but places a limitation upon the power of the DOLE. that the power was primarily held by the NLRC. The DOLE must have the power to determine whether or not an employeremployee relationship exists. But it is precisely the DOLE that will be faced with that evidence. it takes cognizance of the matter. by the simple expedient of disputing the employer-employee relationship. the determination of the existence of an employer-employee relationship cannot be co-extensive with the visitorial and enforcement power of the DOLE. or it appears.

If the DOLE finds that there is no employer-employee relationship. the DOLE is fully empowered to make a determination as to the existence of an employeremployee relationship in the exercise of its visitorial and enforcement power. Suffice it to say. should a party wish to dispute the findings of the DOLE. the finding of the DOLE Regional Director that there was an employer-employee relationship has been subjected to review by this . thus divesting itself of jurisdiction over the case. Under Art. If a complaint is filed with the DOLE. and there is still an existing employeremployee relationship. the DOLE exercises jurisdiction to the exclusion of the NLRC. the jurisdiction is properly with the Labor Arbiter. however. rates of pay. subject to judicial review. and other terms and conditions of employment. there are judicial remedies such as a petition for certiorari under Rule 65 that may be availed of. the jurisdiction is properly with the NLRC. and certainly not by this Court. In the present case. To recapitulate. This is not to say that the determination by the DOLE is beyond question or review. The findings of the DOLE. may still be questioned through a petition for certiorari under Rule 65 of the Rules of Court. as amended by RA 7730. not review by the NLRC. if accompanied by a claim for reinstatement. hours of work. 217(3) of the Labor Code. It must not be precluded from being able to reach its own conclusions.The Court. gave the rationale that such limitation would eliminate the prospect of competing conclusions between the DOLE and the NLRC. not by the parties. the jurisdiction is properly with the DOLE. 128(b) of the Labor Code. under Art. and there is a finding by the DOLE that there is an existing employeremployee relationship. If a complaint is filed with the NLRC. if a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor Code or other labor legislation. It must also be remembered that the power of the DOLE to determine the existence of an employer-employee relationship need not necessarily result in an affirmative finding. which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages. in limiting the power of the DOLE. The DOLE may well make the determination that no employer-employee relationship exists. and it is accompanied by a claim for reinstatement.

with the finding being that there was no employer-employee relationship between petitioner and private respondent. IRENE BALLESTEROS. TIMOTEO ACEDO.R. the dismissal of the complaint against petitioner is proper. petitioner was hired by Kasei Corporation during its incorporation stage. 170087 August 31. on some occasions.R.vs. G. No. KASEI CORPORATION. Petitioner.Court. the Decision of this Court in G. WHEREFORE. DELFIN LIZA. J. with the MODIFICATIONthat in the exercise of the DOLE’s visitorial and enforcement power. Thus. NATIONAL LABOR RELATIONS COMMISSION. She was designated as Accountant and Corporate Secretary and was assigned to handle all the accounting needs of the company. She never prepared any legal document and never represented the company as its Corporate Secretary. 179652 is hereby AFFIRMED. 2006 ANGELINA FRANCISCO. neither did she attend any board meeting nor required to do so.: In 1995. the Labor Secretary or the latter’s authorized representative shall have the power to determine the existence of an employer-employee relationship. she was not entrusted with the corporate documents. 6 . based on the evidence presented. TRINIDAD LIZA and RAMON ESCUETA. However. Respondents. DECISION YNARES-SANTIAGO. SEIICHIRO TAKAHASHI. construction permits and other licenses for the initial operation of the company. No. as there was no employer-employee relationship present. to the exclusion of the NLRC. The DOLE had no jurisdiction over the case. She was also designated as Liaison Officer to the City of Makati to secure business permits. Although she was designated as Corporate Secretary. she was prevailed upon to sign documentation for the company.

especially with the Bureau of Internal Revenue (BIR).000. Kasei Corporation reduced her salary by P2. Petitioner alleged that she was required to sign a prepared resolution for her replacement but she was assured that she would still be connected with Kasei Corporation.500. petitioner performed the duties of Acting Manager. petitioner did not receive her salary from the company. The corporation also hired Gerry Nino as accountant in lieu of petitioner. In January 2001. Private respondents averred that petitioner is not an employee of Kasei Corporation.00 a month beginning January up to September 2001 for a total reduction of P22. 2001. For five years.500. They alleged that petitioner was hired in 1995 as one of its technical consultants on accounting matters and act concurrently as Corporate. announced that nothing had changed and that petitioner was still connected with Kasei Corporation as Technical Assistant to Seiji Kamura and in charge of all BIR matters. petitioner did not report for work and filed an action for constructive dismissal before the labor arbiter.00 as of September 2001. On October 15. Thereafter. On October 2001. Petitioner had no daily time record and she came to the office any time she wanted. petitioner asked for her salary from Acedo and the rest of the officers but she was informed that she is no longer connected with the company. and to administer all other matters pertaining to the operation of Kasei Restaurant which is owned and operated by Kasei Corporation. Social Security System (SSS) and in the city government of Makati.00 housing allowance and a 10% share in the profit of Kasei Corporation. The company never interfered with her work except that from time to time.In 1996. As of December 31. Fuentes as Manager.500. petitioner was assigned to handle recruitment of all employees and perform management administration functions. petitioner was designated Acting Manager. Since she was no longer paid her salary. represent the company in all dealings with government agencies. the management would ask her opinion on matters relating to her profession.The money received by petitioner from the corporation was . the designated Treasurer. Petitioner was not paid her mid-year bonus allegedly because the company was not earning well. As Acting Manager. petitioner was replaced by Liza R.00 plus P3. Timoteo Acedo. 2000 her salary was P27.

SUPREME COURT: We held in Sevilla v. The appellate court denied petitioner’s motion for reconsideration. However. The Labor Arbiter found that petitioner. aside from the employer’s power to control the employee with respect to the means and methods by which the work is to be . and that she was not one of those reported to the BIR or SSS as one of the company’s employees.175. Generally. On appeal. Court of Appeals that in this jurisdiction. et al.her professional fee subject to the 10% expanded withholding tax on professionals. courts have relied on the so-called right of control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. (2) whether petitioner was illegally dismissed. being an employee of the corporation was illegally dismissed ordering ordering respondents to reinstate complainant to her former position without loss of seniority rights and jointly and severally pay complainant her money The NLRC affirmed with modification the Decision of the Labor Arbiter with the awards representing moral and exemplary damages and 10% share in profit in the respective accounts of P100. the present recourse. in certain cases the control test is not sufficient to give a complete picture of the relationship between the parties. and if in the affirmative.000.00 are deleted. the Court of Appeals reversed the NLRC decision and rendered dismissing the complaint filed by private respondent against Kasei Corporation. There are instances when. there has been no uniform test to determine the existence of an employer-employee relation. hence. for constructive dismissal. owing to the complexity of such a relationship where several positions have been held by the worker.00 and P361. ISSUE: The core issues to be resolved in this case are (1) whether there was an employer-employee relationship between petitioner and private respondent Kasei Corporation.

judgment or foresight required for the success of the claimed independent enterprise. the determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity. independent contractor. (2) the extent of the worker’s investment in equipment and facilities. Thus. and due to the complexity of the relationship based on the various positions and responsibilities given to the worker over the period of the latter’s employment. The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished. (5) the amount of initiative. to give a clearer picture in determining the existence of an employer-employee relationship based on an analysis of the totality of economic circumstances of the worker. corporate officer or some other capacity.accomplished. (6) the permanency and duration of the relationship between the worker and the employer. 20 where we held that there is an employer-employee relationship when the person for whom the services are performed reserves the right to control not only the end achieved but also the manner and means used to achieve that end. 22 such as: (1) the extent to which the services performed are an integral part of the employer’s business. Court of Appeals. This two-tiered test would provide us with a framework of analysis. In Sevilla v. (4) the worker’s opportunity for profit and loss. Al-Lagadan and Piga. skill. whether as employee. in addition to the standard of right-of-control like the inclusion of the employee in the payrolls. Court of Appeals. economic realities of the employment relations help provide a comprehensive analysis of the true classification of the individual. which would take into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate in this case where there is no written agreement or terms of reference to base the relationship on. 21 we observed the need to consider the existing economic conditions prevailing between the parties. 19 and lately in Leonardo v. and (2) the underlying economic realities of the activity or relationship. and (7) the degree of dependency of . (3) the nature and degree of control exercised by the employer. The control test initially found application in the case of Viaña v.

She reported for work regularly and served in various capacities as Accountant. 1999 to December 18. . these matters constitute substantial evidence adequate to support a conclusion that petitioner was an employee of private respondent. Technical Consultant. an identification card is provided not only as a security measure but mainly to identify the holder thereof as a bona fide employee of the firm that issues it. In Domasig v. 23 The proper standard of economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of business. Under the broader economic reality test. benefits. Liaison Officer. with substantially the same job functions.the worker upon the employer for his continued employment in that line of business. National Labor Relations Commission. 13th month pay. there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct control and supervision of Seiji Kamura. We likewise ruled in Flores v. Together with the cash vouchers covering petitioner’s salaries for the months stated therein. Acting Manager and Corporate Secretary. as well as deductions and Social Security contributions from August 1. the corporation’s Technical Consultant. The coverage of Social Security Law is predicated on the existence of an employer-employee relationship. Nuestro that a corporation who registers its workers with the SSS is proof that the latter were the former’s employees. 2000. the petitioner can likewise be said to be an employee of respondent corporation because she had served the company for six years before her dismissal. By applying the control test. It is therefore apparent that petitioner is economically dependent on respondent corporation for her continued employment in the latter’s line of business. that is. rendering accounting and tax services to the company and performing functions necessary and desirable for the proper operation of the corporation such as securing business permits and other licenses over an indefinite period of engagement. receiving check vouchers indicating her salaries/wages. 28 we held that in a business establishment. bonuses and allowances.

34 WHEREFORE. there can be no other conclusion that petitioner is an employee of respondent Kasei Corporation. respondent corporation had the power to control petitioner with the means and methods by which the work is to be accomplished. Her main job function involved accounting and tax services rendered to respondent corporation on a regular basis over an indefinite period of engagement.500 a month from January to September 2001. Respondent corporation hired and engaged petitioner for compensation. in lieu of reinstatement. we are convinced that the allegations in the first affidavit are sufficient to establish that petitioner is an employee of Kasei Corporation. the affidavit of Seiji Kamura dated December 5. 31 Regardless of this fact. and under the principle of strained relations. in CA-G. the petition is GRANTED. 2002 which repudiated the December 5. Since the position of petitioner as accountant is one of trust and confidence. This amounts to an illegal termination of employment. 2001 has clearly established that petitioner never acted as Corporate Secretary and that her designation as such was only for convenience. Petitioner was never entrusted with corporate documents of the company. 2005. More importantly. 30 The second affidavit of Kamura dated March 7. Based on the foregoing. license to operate and other requirements imposed by government agencies. and is economically dependent upon respondent for her continued employment in that line of business. petitioner is further entitled to separation pay. with the power to dismiss her for cause. SP No. although once in a while she was required to sign prepared documentation for the company. The Decision and Resolution of the Court of Appeals dated October 29. 2004 and October 7. She was never privy to the preparation of any document for the corporation. nor required to attend the meeting of the corporation. The . The corporation constructively dismissed petitioner when it reduced her salary by P2. She was selected and engaged by the company for compensation. respectively. 78515 are ANNULLED and SET ASIDE.Furthermore. 2001 affidavit has been allegedly withdrawn by Kamura himself from the records of the case.R. where the petitioner is entitled to full backwages. The actual nature of petitioner’s job was as Kamura’s direct assistant with the duty of acting as Liaison Officer in representing the company to secure construction permits.

FLY ACE CORPORATION/FLORDELYN CASTILLO. 2012 BITOY JAVIER (DANILO P. The said affidavit was subscribed before the Labor Arbiter (LA). that on May 6. performing various tasks at the respondent’s warehouse such as cleaning and arranging the canned items before their delivery to certain locations. Ong). Respondents. J. Javier was . Javier was terminated from his employment without notice. Petitioner. JAVIER). as pahinante. that Annalyn tried to talk to Ong and convince him to spare her father from trouble but he refused to accede. To support his allegations. Fly Ace averred that it was engaged in the business of importation and sales of groceries. that during his employment.: Facts: Javier filed a complaint before the NLRC for underpayment of salaries and other labor standard benefits. 2003 in NLRC NCR CA No. vs. Sometime in December 2007. No. he reported for work but he was no longer allowed to enter the company premises by the security guard upon the instruction of Ruben Ong (Mr. 192558 February 15. G. his superior.Decision of the National Labor Relations Commission dated April 15. and that he was neither given the opportunity to refute the cause/s of his dismissal from work. and separation pay representing one-half month pay for every year of service. The case is REMANDED to the Labor Arbiter for the recomputation of petitioner Angelina Francisco’s full backwages from the time she was illegally terminated until the date of finality of this decision. isREINSTATED. that he reported for work from Monday to Saturday from 7:00 o’clock in the morning to 5:00 o’clock in the afternoon. Javier presented an affidavit of one Bengie Valenzuela who alleged that Javier was a stevedore or pahinante of Fly Ace from September 2007 to January 2008. He alleged that he was an employee of Fly Ace since September 2007.R. 032766-02. He discovered that Ong had been courting his daughter Annalyn after the two met at a fiesta celebration in Malabon City.7 For its part. where a fraction of at least six months shall be considered as one whole year. that thereafter. 2008. he was not issued an identification card and payslips by the company. MENDOZA. except in instances when he would be ordered to accompany the company’s delivery vehicles.

Milmar Hauling Services. 2010. as extra helper on a pakyaw basis at an agreed rate of P 300. not a basis for determining the existence or absence of an employer-employee relationship. sales and delivery of groceries).00 in January 2008. On appeal with the NLRC. Respondent Fly Ace is not engaged in trucking business but in the importation and sales of groceries. It is a mere method of computing compensation. Ong. 2008. the CA annulled the NLRC findings that Javier was indeed a former employee of Fly Ace and reinstated the dismissal of Javier’s complaint as ordered by the LA. Since there is a regular hauler to deliver its products. the NLRC held that substantial evidence was sufficient basis for judgment on the existence of the employer-employee relationship. Fly Ace no longer needed the services of Javier. we give credence to Respondents’ claim that complainant was contracted on "pakiao" basis. He may not be considered as an independent contractor because he could not exercise any judgment in the delivery of company products. 2008. Mr. Denying that he was their employee. Javier was a regular employee of Fly Ace because there was reasonable connection between the particular activity performed by the employee (as a "pahinante") in relation to the usual business or trade of the employer (importation. According to the CA: Before a case for illegal . It was of the view that a pakyaw-basis arrangement did not preclude the existence of employeremployee relationship. He was only engaged as a "helper. the LA dismissed the complaint for lack of merit on the ground that Javier failed to present proof that he was a regular employee of Fly Ace. Fly Ace insisted that there was no illegal dismissal. "Payment by result x x x is a method of compensation and does not define the essence of the relation. Ong contracted Javier roughly 5 to 6 times only in a month whenever the vehicle of its contracted hauler.contracted by its employee. "daily manpower (pakyaw/piece rate pay)" and the latter’s signatures/initials. Mr. On November 28. Javier was favored.00 per trip. which was later increased to P 325.8 Fly Ace submitted a copy of its agreement with Milmar Hauling Services and copies of acknowledgment receipts evidencing payment to Javier for his contracted services bearing the words. It ruled that the LA skirted the argument of Javier and immediately concluded that he was not a regular employee simply because he failed to present proof.10 In this case. Complainant has no employee ID showing his employment nor any document showing that he received the benefits accorded to regular employees of the Respondents. On April 30. was not available." On March 18.

It is incumbent upon private respondent to prove the employeeemployer relationship by substantial evidence. The Court is constrained to agree. No particular form of evidence is required to prove the existence of such employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted. must still be satisfied. Hence. by substantial evidence. or the lack of it. It must be noted that the issue of Javier’s alleged illegal dismissal is anchored on the existence of an employer-employee relationship between him and Fly Ace. an employer-employee relationship must first be established. this rule of liberality does not mean a complete dispensation of proof. while no particular form of evidence is required. "substantial evidence – that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion – is sufficient."27 As the records bear out. Labor officials are enjoined to use reasonable means to ascertain the facts speedily and objectively with little regard to technicalities or formalities but nowhere in the rules are they provided a license to completely discount evidence. Quantum of evidence. It is incumbent upon private respondent to prove. The non-issuance of a company-issued identification card to private respondent supports petitioners’ contention that private respondent was not its employee. The quantum of proof required. that he is an employee of petitioners. the petitioner needs to show by substantial evidence that he was indeed an employee of the company against which he claims illegal dismissal. Rule VII of the New Rules of Procedure of the NLRC28 allows a relaxation of the rules of procedure and evidence in labor cases.dismissal can prosper. Although Section 10. however. Accordingly. Ruling: The Court affirms the assailed CA decision. a finding that such relationship exists must still rest on . In dealing with factual issues in labor cases. but he failed to discharge his burden. the LA and the CA found Javier’s claim of employment with Fly Ace as wanting and deficient.12 Issue: Whether or not Javier was a regular employee.

the most important criterion is whether the employer controls or has reserved the right to control the employee not only as to the result of the work but also as to the means and methods by which the result is to be accomplished. the Court would have affirmed the finding of employer-employee relationship. the substantiality of the evidence depends on its quantitative as well as its qualitative aspects.34 Certainly. By way of evidence on this point. the Court sees no reason to depart from the findings of the CA. (2) the payment of wages.35 In this case.32 "Whoever claims entitlement to the benefits provided by law should establish his or her right thereto x x x. (3) the power of dismissal."31 In sum."30 Although substantial evidence is not a function of quantity but rather of quality. The lone affidavit executed by one Bengie Valenzuela was unsuccessful in strengthening Javier’s cause. in gauging the evidence presented by Javier.1avvphi1 He could not submit competent proof that Fly Ace . E-E Relationship The Court is of the considerable view that on Javier lies the burden to pass the well-settled tests to determine the existence of an employer-employee relationship."33 Sadly. all Valenzuela attested to was that he would frequently see Javier at the workplace where the latter was also hired as stevedore.some substantial evidence. the rule of thumb remains: the onus probandi falls on petitioner to establish or substantiate such claim by the requisite quantum of evidence. or a clear exercise of control. Hence. such as x x x inclusion in petitioner’s payroll. and (4) the power to control the employee’s conduct. Javier failed to adduce substantial evidence as basis for the grant of relief. Clearly. the x x x circumstances of the instant case demand that something more should have been proffered. the LA and the CA both concluded that Javier failed to establish his employment with Fly Ace. viz: (1) the selection and engagement of the employee. Javier failed to pass the substantiality requirement to support his claim. the Court cannot ignore the inescapable conclusion that his mere presence at the workplace falls short in proving employment therein. In said document. Of these elements. Moreover. Had there been other proofs of employment. In this case. Javier was not able to persuade the Court that the above elements exist in his case. all that Javier presented were his self-serving statements purportedly showing his activities as an employee of Fly Ace.

or that Fly Ace could dictate what his conduct should be while at work. It was also baffling to realize that Javier did not dispute Fly Ace’s denial of his services’ exclusivity to the company. In short. all that Javier laid down were bare allegations without corroborative proof. In other words.engaged his services as a regular employee. that Fly Ace paid his wages as an employee. Worse. . Javier was not able to refute Fly Ace’s assertion that it had an agreement with a hauling company to undertake the delivery of its goods. Javier’s allegations did not establish that his relationship with Fly Ace had the attributes of an employer-employee relationship on the basis of the above-mentioned four-fold test.

YMBONG. etc. The services rendered by the concerned employee/talent to this company will then be temporarily suspended for the entire campaign/election period.G. For strict compliance. he worked as talent. co-anchoring Hoy Gising and TV Patrol Cebu. For this particular reason.. Starting 1995. the employee should file the leave request at least thirty (30) days prior to the start of the planned leave period. 2012 ERNESTO G. VENERANDA SY AND DANTE LUZON. JR. director and scriptwriter for various radio programs aired over DYAB. Leandro Patalinghug also worked for ABS-CBN Cebu. any employee who intends to join a political group/party or even with no political affiliation but who intends to openly and aggressively campaign for a candidate or group of candidates (e.” Luzon. His stint in ABS-CBN later extended to radio DYAB in 1995 where he worked as drama and voice talent. spinner. recruiting campaign workers. scriptwriter and public affairs program anchor." The pertinent portions read: ”Any employee who intends to run for any public office position. VILLARAMA. 1998: “Please be informed that per company policy. any employee/talent who wants to run for any position in the coming election will have to file a leave of absence the moment he/she files his/her certificate of candidacy. J. Assistant Station Manager of DYAB issued the following memorandum on March 25.in 1993 at its regional station in Cebu as a television talent. vs. publicly speaking/endorsing candidate. 184885 March 7. ABS-CBN Head Office in Manila issued Policy regarding Employees Seeking Public Office. Petitioner. Like Ymbong. at least thirty (30) days prior to the official filing of the certificate of candidacy either for national or local election. ABS-CBN BROADCASTING CORPORATION. No.” Because of the impending May 1998 elections and based on his immediate recollection of the policy at that time.: Facts: Ymbong started working for ABS. In 1996. Dante Luzon. must file his/her letter of resignation. admitted that upon double-checking of the .g. however. Respondents.R.” X X X X X “Further.) must file a request for leave of absence subject to management’s approval.

According to Luzon. Cebu. According to Luzon. . he informed them that they cannot work there anymore because of company policy not allowing any exceptions.“ Ymbong in contrast contended that after the expiration of his leave of absence. however. The Management however gave you more than enough time to end your drama participation and other involvement with the drama department. both Ymbong and Patalinghug lost in the May 1998 elections. Later. he filed an illegal dismissal complaint8 against ABS-CBN. 1998. he reported back to work as a regular talent and in fact continued to receive his salary.exact text of the policy. On September 14. 1998 since he was running for councilor of Lapu-Lapu City. Unfortunately. It was only after the elections that they found out that Ymbong actually ran for public office himself at the eleventh hour. As regards Patalinghug. Ymbong and Patalinghug both tried to come back to ABS-CBN Cebu. dragged on for so long prompting Luzon to issue to Ymbong the following memorandum dated September 14. he received a memorandum stating that his services are being terminated immediately. he informed Luzon through a letter that he would take a few months leave of absence from March 8. The agreed winding-up. Thus. much to his surprise. agreed out of pure liberality to give them a chance to wind up their participation in the radio drama. Luzon and DYAB Station Manager Veneranda Sy. 1998 to May 18. he clarified to Patalinghug that he will be considered resigned and not just on leave once he files a certificate of candidacy. however. It has been decided therefore that all your drama participation shall be terminated effective immediately. he saw that the policy actually required suspension for those who intend to campaign for a political party or candidate and resignation for those who will actually run in the elections. Patalinghug approached Luzon and advised him that he will run as councilor for Naga. 1998: “Please be reminded that your services as drama talent had already been automatically terminated when you ran for a local government position last election. Patalinghug likewise filed an illegal dismissal complaint10 against ABS-CBN. Luzon claims that Ymbong told him that he would leave radio for a couple of months because he will campaign for the administration ticket. Ymbong claims that in accordance with the Memorandum. ABS-CBN.

and (3) whether Ymbong. thereby proving the existence of an employer-employee relationship between them.ABS-CBN prayed for the dismissal of the complaints arguing that there is no employer-employee relationship between the company and Ymbong and Patalinghug. HR-ER-016 is valid. 2004. The Labor Arbiter found that there exists an employer-employee relationship between ABS-CBN and Ymbong and Patalinghug considering the stipulations in their appointment letters/talent contracts. ABS-CBN had explicitly recognized him to be an employee and not merely an independent contractor. It noted that said policy is entitled "Policy on Employees Seeking Public Office" and the guidelines contained therein specifically pertain to employees and did not even mention talents or independent contractors. 11 On 1999. HR-ER-016 is valid. specifically on attendance and punctuality. The Labor Arbiter noted particularly that the appointment letters/talent contracts imposed conditions in the performance of their work. by seeking an elective post. On March 8. 2007. 2004 Decision and June 21. the Labor Arbiter rendered a decision12 finding the dismissal of Ymbong and Patalinghug illegal. The NLRC also held that ABS-CBN wielded the power of control over Ymbong and Patalinghug. . 2004 Resolution of the NLRC. Policy No. the CA rendered the assailed decision reversing and setting aside the March 8. By applying the subject company policy on Ymbong. Issue: (1) whether Policy No. The CA declared Ymbong resigned from employment and not to have been illegally dismissed. HR-ER-016. On August 22. The CA ruled that ABS-CBN is estopped from claiming that Ymbong was not its employee after applying the provisions of Policy to him. the NLRC rendered a decision17 modifying the labor arbiter’s decision: Ordering ABS-CBN to reinstate Ymbong and to pay his full backwages. 1998 Memorandum issued by Luzon superseded Policy No. which effectively placed them under the control of ABS-CBN. is deemed to have resigned and not dismissed by ABS-CBN. (2) whether the March 25.

the exercise of such power should be in accord with the general rules and regulations imposed by the ABS-CBN Head Office to its employees. in order to protect the company from any public misconceptions. Even as the law is solicitous of the welfare of the employees. employees who [intend] to run for public office or accept political appointment should resign from their positions.” We have consistently held that so long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements. HR-ER-016 was not superseded by the March 25. not only the filing of a leave of absence. HR-ER-016. ABS-CBN is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded. Clearly.361âwphi1 Policy No. HR-ER-016 issued by the ABS-CBN Head Office in Manila which requires the resignation. While it encourages and supports its employees to have greater political awareness and for them to exercise their right to suffrage. Having been issued beyond the scope of his authority. this Court will uphold them. 1998 Memorandum The CA correctly ruled that though Luzon has policy-making powers in relation to his principal task of administering the network’s radio station in the Cebu region. the company reiterates the following policy guidelines for strict implementation. 1998 Memorandum is therefore void and did not supersede Policy No. the March 25. it must also protect the right of an employer to exercise what are clearly management prerogatives. however. Its rationale is embodied in the policy itself. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. the company. of any employee who intends to run for public office. prefers to remain politically independent and unattached to any political individual or entity. .ABS-CBN had a valid justification for Policy No. to wit: ABS-CBN strongly believes that it is to the best interest of the company to continuously remain apolitical. 1998 Memorandum issued by Luzon which only requires employees to go on leave if they intend to run for any elective position is in absolute contradiction with Policy No. To preserve its objectivity. neutrality and credibility. Therefore. HRER-016. the March 25.

. they would have been able to clarify to him the prevailing company policy and inform him of the consequences of his decision in case he decides to run. we do not subscribe to Ymbong’s claim that he was not in a position to know which of the two issuances was correct. the requirement of due process in dismissal cases cannot be applied to Ymbong. Since there was no termination to speak of. as Luzon did in Patalinghug’s case. HR-ER-016 and not the March 25. 1998 Memorandum for he only told the latter that he will only campaign for the administration ticket and not actually run for an elective post. Petition for review on certiorari is DENIED for lack of merit. He was separated from ABS-CBN not because he was dismissed but because he resigned. ABS-CBN is not duty-bound to ask him to explain why he did not tender his resignation before he ran for public office as mandated by the subject company policy. had Ymbong been truthful to his superiors. Ymbong is fully aware that the subsisting policy is Policy No. as pointed out by ABS-CBN. Moreover. Thus.Ymbong is deemed resigned when he ran for councilor. In addition.

G.R. No. 138051 June 10, 2004 JOSE Y. SONZA, petitioner, vs. ABS-CBN BROADCASTING CORPORATION, respondent. CARPIO, J.: FACTS: In May 1994, respondent ABS-CBN signed an “Agreement” with the Mel and Jay Management and Development Corporation(MJMDC”) represented by Jose Y. Sonza and Carmela Tiangco. Referred to in the Agreement as “AGENT,” MJMDC agreed to provide SONZA’s services exclusively to ABSCBN as talent for radio and television. On 1 April 1996, SONZA wrote a letter to ABS-CBN’s President, Eugenio Lopez III, saying that he irrevocably resigns in view of recent events concerning his programs and career. The acts of the station are violative of the Agreement and said letter will serve as notice of rescission of said contract. The letter also contained the waiver and renunciation for recovery of the remaining amount stipulated but reserves the right to seek recovery of the other benefits under said Agreement. On 30 April 1996, SONZA filed a complaint against ABS-CBN before the DOLE- NCR Q.C.. SONZA complained for none payment of his salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees Stock Option Plan (”ESOP”). ABSCBN filed a Motion to Dismiss on the ground that no employee-employer relationship existed between the parties. The Labor Arbiter denied the motion to dismiss by respondents but later dismissed the complaint for lack of jurisdiction. SONZA appealed to the NLRC but it affirmed the Labor Arbiter’s decision. SONZA filed a motion for reconsideration, which the NLRC also denied. The Court of Appeals affirmed the Decision. Hence, this petition. ISSUE Whether or not there exist an employer-employee relationship between Sonza and ABS-CBN. HELD

There is no employer-employee relationship between Sonza and ABS-CBN. The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. Applying the control test, SONZA is not an employee but an independent contractor. The clear implication is that SONZA had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its interests. ABS-CBN’s control was limited only to the result of SONZA’s work, whether to broadcast the final product or not. The records do not show that ABS-CBN exercised any supervision and control over how SONZA utilized his skills and talent in his shows. Even an independent contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control. The right to life and livelihood guarantees this freedom to contract as independent contractors. The right of labor to security of tenure cannot operate to deprive an individual, possessed with special skills, expertise and talent, of his right to contract as an independent contractor. An individual like an artist or talent has a right to render his services without any one controlling the means and methods by which he performs his art or craft. If radio and television program hosts can render their services only as employees, the station owners and managers can dictate to the radio and television hosts what they say in their shows. This is not conducive to freedom of the press. SONZA’s claims are all based on the May 1994 Agreement and stock option plan, and not on the Labor Code. Clearly, the present case does not call for an application of the Labor Code provisions but an interpretation and implementation of the May 1994 Agreement. In effect, SONZA’s cause of action is for breach of contract which is intrinsically a civil dispute cognizable by the regular courts.

G.R. No. 126297 February 11, 2008 PROFESSIONAL SERVICES, INC., petitioner, vs. THE COURT OF APPEALS and NATIVIDAD and ENRIQUE AGANA, respondents, x- - - - - - - - - - - - - - - - - - - - - - - - - - - - x G.R. No. 126467 February 11, 2008 NATIVIDAD (Substituted by her children MARCELINO AGANA III, ENRIQUE AGANA, JR., EMMA AGANA ANDAYA, JESUS AGANA, and RAYMUND AGANA) and ENRIQUE AGANA, petitioners, vs. THE COURT OF APPEALS and JUAN FUENTES, respondents, x- - - - - - - - - - - - - - - - - - - - - - - - - - - - x G.R. No. 127590 February 11, 2008 MIGUEL AMPIL, petitioner, vs. THE COURT OF APPEALS and NATIVIDAD AGANA and ENRIQUE AGANA, respondents. RESOLUTION SANDOVAL-GUTIERREZ, J.: FACTS: Natividad Agana was admitted at the Medical City General Hospital (Medical City) because of difficulty of bowel movement and bloody anal discharge. Dr. Ampil diagnosed her to be suffering from "cancer of the sigmoid." Thus, Dr. Ampil performed an anterior resection surgery upon her. During the surgery, he found that the malignancy had spread to her left ovary, necessitating the removal thus, Dr. Ampil obtained the consent of Atty. Enrique Agana, Natividad’s husband, to permit Dr. Juan Fuentes to perform hysterectomy upon Natividad.

After a couple of days, Natividad complained of excruciating pain in her anal region. Dr. Ampil and Dr. Fuentes told her that the pain was the natural consequence of the surgical operation. Natividad, accompanied by her husband, went to the United States to seek further treatment. After four (4) months of consultations and laboratory examinations, Natividad was told that she was free of cancer. Natividad flew back to the Philippines, still suffering from pains. Two (2) weeks thereafter, her daughter found a piece of gauze protruding from her vagina. Dr. Ampil managed to extract by hand a piece of gauze then assured Natividad that the pains would soon vanish but it intensified which prompting Natividad to seek treatment at the Polymedic General Hospital. Dr. Gutierrez found that the gauze had badly infected her vaginal vault. Another surgical operation was needed to remedy the situation. On November 12, 1984, Natividad and her husband filed with the RTC a complaint for damages against PSI (owner of Medical City), Dr. Ampil and Dr. Fuentes. On February 16, 1986, pending the outcome of the above case, Natividad died. The trial court rendered judgment in favor of spouses Agana finding PSI, Dr. Ampil and Dr. Fuentes jointly and severally liable. On appeal, the Court of Appeals, in its Decision dated September 6, 1996, affirmed the assailed judgment with modification in the sense that the complaint against Dr. Fuentes was dismissed. Issue: Whether or not there exist an employer-employee relationship. Ruling: The motion lacks merit. The First Division ruled that an employer-employee relationship "in effect" exists between the Medical City and Dr. Ampil. Consequently, both are jointly and severally liable to the Aganas. This ruling proceeds from the following ratiocination in Ramos: XXX In the first place, hospitals exercise significant control in the hiring and firing of consultants and in the conduct of their work within the hospital

premises. Doctors who apply for "consultant" slots, visiting or attending, are required to submit proof of completion of residency, their educational qualifications; generally, evidence of accreditation by the appropriate board (diplomate), evidence of fellowship in most cases, and references. These requirements are carefully scrutinized by members of the hospital administration or by a review committee set up by the hospital who either accept or reject the application. This is particularly true with respondent hospital. After a physician is accepted, either as a visiting or attending consultant, he is normally required to attend clinico-pathological conferences, conduct bedside rounds for clerks, interns and residents, moderate grand rounds and patient audits and perform other tasks and responsibilities, for the privilege of being able to maintain a clinic in the hospital, and/or for the privilege of admitting patients into the hospital. In addition to these, the physician’s performance as a specialist is generally evaluated by a peer review committee on the basis of mortality and morbidity statistics, and feedback from patients, nurses, interns and residents. A consultant remiss in his duties, or a consultant who regularly falls short of the minimum standards acceptable to the hospital or its peer review committee, is normally politely terminated. In other words, private hospitals hire, fire and exercise real control over their attending and visiting "consultant" staff. While "consultants" are not, technically employees, a point which respondent hospital asserts in denying all responsibility for the patient’s condition, the control exercised, the hiring, and the right to terminate consultants all fulfill the important hallmarks of an employer-employee relationship, with the exception of the payment of wages. In assessing whether such a relationship in fact exists, the control test is determining. Accordingly, on the basis of the foregoing, we rule that for the purpose of allocating responsibility in medical negligence cases, an employer-employee relationship in effect exists between hospitals and their attending and visiting physicians. This being the case, the question now arises as to whether or not respondent hospital is solidarily liable with respondent doctors for petitioner’s condition. The basis for holding an employer solidarily responsible for the negligence of its employee is found in Article 2180 of the Civil Code which considers a person accountable not only for his own acts but also

for those of others based on the former’s responsibility under a relationship of partia ptetas. Clearly, in Ramos, the Court considered the peculiar relationship between a hospital and its consultants on the bases of certain factors. One such factor is the "control test" wherein the hospital exercises control in the hiring and firing of consultants, like Dr. Ampil, and in the conduct of their work. Actually, contrary to PSI’s contention, the Court did not reverse its ruling in Ramos. What it clarified was that the De Los Santos Medical Clinic did not exercise control over its consultant, hence, there is no employer-employee relationship between them. Thus, despite the granting of the said hospital’s motion for reconsideration, the doctrine in Ramos stays, i.e., for the purpose of allocating responsibility in medical negligence cases, an employer-employee relationship exists between hospitals and their consultants. In the instant cases, PSI merely offered a general denial of responsibility, maintaining that consultants, like Dr. Ampil, are "independent contractors," not employees of the hospital. Even assuming that Dr. Ampil is not an employee of Medical City, but an independent contractor, still the said hospital is liable to the Aganas. LABOR DISPUTE CITIBANK, N.A., petitioner, vs. COURT OF APPEALS and CITI-BANK INTEGRATED GUARDS LABOR ALLIANCE (CIGLA) SEGA-TUPAS/FSM LOCAL CHAPTER No. 1394, respondents. • In 1983, Citibank and El Toro Security Agency, Inc. (hereafter El Toro) entered into a contract for the latter to provide security and protective services to safeguard and protect the bank's premises, • Under the contract, El Toro obligated itself to provide the services of security guards to safeguard and protect the premises and property of Citibank against theft, robbery or any other unlawful acts committed by any person and assumed responsibility for losses and damages that may be incurred by Citibank due to the negligence of El Toro or any of its Aassigned personnel.

this being labor dispute. 1990. and c) Union bust. respondent Citibank Integrated Guards Labor Alliance-SEGA-TUPAS/FSM (hereafter CIGLA) filed with the National Conciliation and Mediation Board (NCMB) a request for preventive mediation citing Citibank as respondent therein giving as issues for preventive mediation the following: a) Unfair labor practice. petitioner Citibank filed with the Regional Trial Court Makati. • June 18. • On June 7. On April 22. 1990. 5 The complaint sought to enjoin CIGLA and any person claiming membership therein from striking or otherwise disrupting the operations of the bank. 1990. 1990. to render security services at Citibank's premises. • On June 10. a complaint for injunction and damages. 1990. 1990. • June 10. security guards of El Toro who were replaced by guards of the Golden Pyramid Security Agency considered the nonrenewal of El Toro's service agreement with Citibank as constituting a lockout and/or a mass dismissal • security guards formerly assigned to Citibank under the expired agreement loitered around and near the Citibank premises in large groups of from twenty (20) and at times fifty (50) persons • Faced with the prospect of disruption of its business operations.b)The guards were employees of the bank.• Citibank renewed the security contract with El Toro yearly until 1990.d) The bank was guilty of forum shopping in filing the complaint with the RTC after submitting itself voluntarily to the jurisdiction of the different agencies of the DOLE. Citibank hired another security agency. petitioner Citibank served on El Toro a written notice that the bank would not renew anymore the service agreement with the latter. 1990.b) Dismissal of union officers/members. respondent CIGLA filed with the trial court a motion to dismiss the complaint alleging that:a)The Court had no jurisdiction. the Golden Pyramid Security Agency. the contract between Citibank and El Toro expired. .c)There were pending cases/labor disputes between the guards and the bank at the different agencies of the Department of Labor and Employment (DOLE). on June 5. Simultaneously. respondent CIGLA filed a manifestation with the NCMB that it was converting its request for preventive mediation into a notice of strike for failure of the parties to reach a mutually acceptable settlement of the issues • On June 11.

• On May 24. • Subsequently. the Court of Appeals promulgated its decision in CIGLA's favor. the Court of Appeals denied the motion. whether it is the labor tribunal or the regional trial court that has jurisdiction over the subject matter of the complaint filed by Citibank with the trial court. the following elements are generally considered: 1) the selection and engagement of the employee. • On April 29. 2. 2) the payment of wages. the petitioner's recourse to this Court ISSUES: 1. . 1993. petitioner Citibank filed a motion for reconsideration of the decision. Trial court denied again said motion. and averred as special and affirmative defense lack of jurisdiction of the court over the subject matter of the case. regardless of whether they stand in the relation of employer and employees? HELD: 1) This Court has held in many cases that "in determining the existence of an employer-employee relationship. 1991. • Hence.• the trial court denied respondent CIGLA's motion to dismiss. members of respondent CIGLA. It was the security agency that was answerable to Citibank for the conduct of its guards. respondent CIGLA filed with the trial court its answer to the complaint.In this case. 1992.It has been decided also that the Labor Arbiter has no jurisdiction over a claim filed where no employer-employee relationship existed between a company and the security guards assigned to it by a security service contractor. 3) the power of dismissal. and 4) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished". Said court denied said motion. CIGLA then filed a motion for recon of such order with the same court. respondent CIGLA filed with the Court of Appeals a petition for certiorari with preliminary injunction. Is there a labor dispute between Citibank and the security guards. hired and assigned the watchmen to their place of work. On February 12. it was the security agency El Toro that recruited. finding that the arguments in the motion for reconsideration are but a rehash.

vs. This is a civil dispute.Consequently. It is a basic rule of procedure that "jurisdiction of the court over the subject matter of the action is determined by the allegations of the complaint. If at all. regardless of whether the disputants stand in the proximate relation of employer and employee." On the basis of the allegations of the complaint. not a labor dispute. no employeremployee relationship existed between Citibank and the security guard members of the union in the security agency who were assigned to secure the bank's premises and property. changing or arranging the terms and conditions of employment. respondents. it is safe to conclude that the dispute involved is a civil one. 1993. El Toro was an independent contractor. the question of jurisdiction would almost entirely depend upon the defendant. • on April 15. 1993 currency smuggling in Hong Kong. The jurisdiction of the court can not be made to depend upon the defenses set up in the answer or upon the motion to dismiss. the dispute between Citibank and El Toro security agency is one regarding the termination or non-renewal of the contract of services. Both were dismissed from the service for their alleged involvement in the April 3.. Hence. FERDINAND PINEDA and GOGFREDO CABLING. INC. there was no labor dispute and no right to strike against the bank. respondent's Avionics Mechanic in Hongkong "was . fixing. maintaining. Thus. petitioner. It "includes any controversy or matter concerning terms or conditions of employment or the association or representation of persons in negotiating.2) Article 212. • Private respondents are flight stewards of the petitioner. NATIONAL LABOR RELATIONS COMMISSION. paragraph 1 of the Labor Code provides the definition of a "labor dispute". the petitioners were instructed to attend an investigation by respondent's "Security and Fraud Prevention SubDepartment" regarding an April 3. we rule that jurisdiction over the subject matter of the complaint lies with the regional trial court. irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. 1993 incident in Hongkong at which Joseph Abaca. PHILIPPINE AIRLINES. for otherwise.

1995 Memorandum of dismissal. the NLRC issued a temporary mandatory injunction 2 enjoining petitioner to cease and desist from enforcing its February 22. moral and exemplary damages. a Memorandum dated February 22. "a hearing" on which "did not push through" until almost two (2) years after. and at which hearing Mr. the petitioners were administratively charged. as they no longer received any summons/notices on the intended "additional hearings" mandated by the Disciplinary Board. .• • • • • • • intercepted by the Hongkong Airport Police at Gate 05 the ramp area of the Kai TakInternational Airport while about to exit said gate carrying a bag said to contain some 2. 1995. such is denied by the NLRC ruling that: they have jurisdiction and that what we have here is not a labor dispute as long as it concedes that as defined by law. Aggrieved by said dismissal.5 million pesos in Philippine Currencies at the Police Station. Abaca claimed that he just found said plastic bag at the Skybed Section of the arrival flight where petitioners served as flight stewards of said flight the petitioners sought "a more detailed account of what this HKG incident is all about". award of full backwages. 1995. Joseph Abaca volunteered the information that the real owner of said money as petitioners "thought that they were already fully cleared of the charges. and attorney's fees On April 3. a" (l) "Labor Dispute" includes any controversy or matter concerning terms or conditions of employment. private respondents filed with the NLRC a petition 1for injunction which prays for reinstatement of private respondents. . "Mr. petitioner moved for reconsideration on the ground that the NLRC erred in granting a temporary injunction order when it has no jurisdiction to issue an injunction or restraining order since this may be issued only under Article 218 of the Labor Code if the case involves or arises from labor disputes. Joseph Abaca finally gave exculpating statements to the board in that he cleared petitioners from any participation or from being the owners of the currencies. 1995" terminating their services for alleged violation of respondent's Code of Discipline "effective immediately". entertain an . ISSUE: Can the National Labor Relations Commission (NLRC). but instead. even without a complaint for illegal dismissal tiled before the labor arbiter." they were surprised to receive "on February 23. On May 4. 1995. Mr.

The . from enforcing its Orders of dismissal against private respondents. and ordering petitioner to reinstate the private respondents to their previous positions? HELD: NO—THE power of the NLRC to issue an injunctive writ originates from "any labor dispute" upon application by a party thereof. hear and decide any of the cases therein enumerated." 8 The term "controversy" is likewise defined as "a litigated question. no other officer or tribunal can take cognizance of. either at law or in equity. fixing. award of full backwages. there is no labor dispute between the petitioner and private respondents as there has yet been no complaint for illegal dismissal filed with the labor arbiter by the private respondents against the petitioner. it is an essential requirement that there must first be a labor dispute between the contending parties before the labor arbiter. maintaining. The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal. a civil action or suit. As such. reinstatement of private respondents. changing. moral and exemplary damages. whether agricultural or non-agricultural. In the present case. adversary proceeding in a court of law." 10 Taking into account the foregoing definitions. a justiciable dispute." The term "labor dispute" is defined as "any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating. which application if not granted "may cause grave or irreparable damage to any party or render ineffectual any decision in favor of such party. The jurisdiction conferred by the foregoing legal provision to the labor arbiter is both original and exclusive. meaning. the petition should have been filed with the labor arbiter who has the original and exclusive jurisdiction to hear and decide the cases involving all workers. and not a mere theoretical question or issue. and attorney's fees. or arranging the terms and conditions of employment regardless of whether or not the disputants stand in the proximate relation of employers and employees. This is clear from the allegations in the petition which prays for.action for injunction and issue such writ enjoining petitioner Philippine Airlines." 9 A "justiciable controversy" is "one involving an active antagonistic assertion of a legal right on one side and a denial thereof on the other concerning a real. inc.

MANAGERIAL EMPLOYEE CHARLITO PEÑARANDA. is not favored in labor law considering that it generally has not proved to be an effective means of settling labor disputes. Respondents. In short. On the other hand. Since petitioner belongs to this class of employees. or the parties agree to submit the matter to voluntary arbitration pursuant to Article 263 (g) of the Labor Code. BAGANGA PLYWOOD CORPORATION and HUDSON CHUA.only exceptions are where the Secretary of Labor and Employment or the NLRC exercises the power of compulsory arbitration. considering that Section 1 of Rule XI of the New Rules of Procedure of the NLRC makes injunction only an ancillary remedy in ordinary labor disputes Finally. Doctrine: Managerial employees and members of the managerial staff are exempted from the provisions of the Labor Code on labor standards. 20 It has been the policy of the State to encourage the parties to use the non-judicial process of negotiation and compromise. 21 Thus. therefore. the jurisdiction of the NLRC in illegal dismissal cases is appellate in nature and. the NLRC shall have exclusive appellate jurisdiction over all cases decided by labor arbiters as provided in Article 217(b) of the Labor Code. however. it cannot entertain the private respondents' petition for injunction which challenges the dismissal orders of petitioner. injunctions may be issued only in cases of extreme necessity based on legal grounds clearly established. after due consultations or hearing and when all efforts at conciliation are exhausted which factors. Petitioner. he is not entitled to overtime pay and premium pay for working on rest days. as an extraordinary remedy. Facts: • CharlitoPeñaranda was hired as an employee of Baganga Plywood Corporation (BPC) . vs. mediation and arbitration. an injunction. Article 218(e) of the Labor Code does not provide blanket authority to the NLRC or any of its divisions to issue writs of injunction. are clearly absent in the present case.

hence. • Penaranda also claim that he was not paid his overtime pay.7 • After the parties failed to settle amicably. premium pay for working during holidays/rest days.When BPC partially reopened Peñarandafailed to reapply • Ruling of Labor Arbiter : The labor arbiter ruled that there was no illegal dismissal and that petitioner’s Complaint was premature because he was still employed by BPC. managerial employees are . including entitlement to overtime pay and premium pay for working on rest days.29 Under this provision. • Penarandaalleges that his services were terminated without the benefit of due process and valid grounds in accordance with law. Hudson Chua. entitled to the award granted by the labor arbiter. the labor arbiter found petitioner entitled to overtime pay. he need not reapply when the plant reopened. which deleted the award of overtime pay and premium pay for working on rest days. According to the Commission. ISSUE: Whether petitioner was not a managerial employee.257. • Respondents allege that complainant’s separation from service was done pursuant to Art. before the NLRC.98. 283 of the Labor Code. Labor standards provide the working conditions of employees. BPC was on temporary closure due to repair and general maintenance and it applied for clearance with the Department of Labor and Employment to shut down and to dismiss employees .11 The temporary closure of BPC’s plant did not terminate his employment.• Peñaranda filed a Complaint for illegal dismissal with money claims against BPC and its general manager. RULING: Article 82 of the Labor Code exempts managerial employees from the coverage of labor standards. and therefore. premium pay for working on rest days.14 • Ruling of CA: CA denied reconsideration on the ground that petitioner still failed to submit the pleadings filed before the NLRC. night shift differentials and finally claims for payment of damages and attorney’s fees having been forced to litigate the present complaint. petitioner was not entitled to these awards because he was a managerial employee. and attorney’s fees in the total amount of P21. the labor arbiter8 directed the parties to file their position papers and submit supporting documents. • Ruling of NLRC:Respondents filed an appeal to the NLRC.

This work necessarily required the use of discretion and independent judgment to ensure the proper functioning of the steam plant boiler. (2). experience. As supervisor. His work involved overseeing the operation of the machines and the performance of the workers in the engineering section. "(2) Customarily and regularly exercise discretion and independent judgment."those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision. officers and members of the managerial staff are not entitled to the provisions of law on labor standards. petitioner is deemed a member of the managerial staff. However.32 The Implementing Rules of the Labor Code define members of a managerial staff as those with the following duties and responsibilities: "(1) The primary duty consists of the performance of work directly related to management policies of the employer." The Court disagrees with the NLRC’s finding that petitioner was a managerial employee. or (ii) execute under general supervision work along specialized or technical lines requiring special training. or (iii) execute under general supervision special assignments and tasks."33 Petitioner supervised the engineering section of the steam plant boiler. "(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof. or knowledge. petitioner was a member of the managerial staff. Like managerial employees. and "(4) who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs (1). and (3) above.35 . which also takes him out of the coverage of labor standards.

thus. Petitioner. Under Article 245 of the Labor Code. • Company filed an Answer with Motion to Dismiss on the ground that petitioner union is not a legitimate labor organization because of (1) failure to comply with the documentation requirements set by law. and (2) the inclusion of supervisory employees within petitioner union. • That the list of membership of petitioner union consisted of 12 batchman. vs. SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER). . said supervisory employees are prohibited from joining petitioner union which seeks to represent the rank-and-file employees of respondent company.On the basis of the foregoing. ZACARRIAS JERRY VICTORIO-Union President. CHARTER CHEMICAL and COATING CORPORATION. FACTS: • SamahangManggagawasa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation (respondent company) with the Mediation Arbitration Unit of the DOLE. mill operator and leadman who performed supervisory functions. not being a legitimate labor organization. The Med-Arbiter ruled that petitioner union is not a legitimate labor organization because the Charter Certificate were not executed under oath and certified by the union secretary and attested to by the union president as required by Section 235 of the Labor Code. • Med-Arbiter’s Ruling :dismissing the petition for certification election. • As a result. The union registration was. the Court finds no justification to award overtime pay and premium pay for rest days to petitioner. Respondent. fatally defective. petitioner union has no right to file a petition for certification election for the purpose of collective bargaining.

While there is a prohibition against the mingling of supervisory and rank-and-file employees in one labor organization. Thus. the Labor Code does not provide for the effects thereof. likewise.As a result. upheld the Med-Arbiter’s finding that petitioner union consisted of both rank-and-file and supervisory employees ISSUE: Whether or not there is a mixture of rank-and-file and supervisory employee[s] of petitioner [union’s] membership is [a] ground for the cancellation of petitioner [union’s] legal personality and dismissal of [the] petition for certification election. it may exercise all the rights and privileges of a legitimate labor organization. petitioner union was not divested of its status as a legitimate labor organization even if some of its members were supervisory employees. It. false statement or fraud under Article 239 of the Labor Code. RULING: The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as a legitimate labor organization. . Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration. unless such mingling was brought about by misrepresentation. the Court held that after a labor organization has been registered. it had the right to file the subject petition for certification election.The inclusion of the aforesaid supervisory employees in petitioner union does not divest it of its status as a legitimate labor organization. the appellate court gave credence to the findings of the Med-Arbiter that petitioner union failed to comply with the documentation requirements under the Labor Code.• Department of Labor and Employment’s Ruling :the DOLE granted the certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation • Court of Appeal’s Ruling : nullifying the decision of the DOLE.

13th month pay. vs. Apparently not satisfied with her explanations. Cebu City (KFC-Cocomall). Bohol (KFC-Bohol). INC. Jumuad submitted her written explanation. Jumuad also sought the reimbursement of the amount equivalent to her forty percent (40%) contribution to Hi-Flyer’s subsidized car loan program. service incentive leave. as management trainee. Hi-Flyer sent Jumuad an Irregularities Reportand Notice of Charges. and/or JESUS R. and attorney’s fees. Petitioner. • Jumuad received several promotions until she became the area manager for the entire Visayas-Mindanao • Aside from being responsible in monitoring her subordinates. (Hi-Flyer). Hi-Flyer served her a Notice of Dismissal. in Cocomall. 2) monitor and support day-to-day operations. and 3) ensure that all the facilities and equipment at the restaurant were properly maintained and serviced. Montemayor(Montemayor) for illegal dismissal before the NLRC. moral and exemplary damages. Jumuad(Jumuad) began her employment with respondent Hi-Flyer Food.PAMELA FLORENTINA P. and in Island City Mall. FACTS: • Pamela Florentina P. Inc. • Among the branches under her supervision were the KFC branches in Gaisano Mall. JUMUAD. service and sanitation audit atKFC-Gaisano and KFC-Cocomall and Hi-Flyer audited the accounts of KFC-Bohol amid reports that certain employees were covering up cash shortages. Cebu City (KFC-Gaisano). Hi-Flyer held an administrative hearing where Jumuad appeared with counsel. • Seeking to hold Jumuad accountable for the irregularities uncovered in the branches under her supervision. • Labor Arbiter’s Ruling: the employer’s prerogative to dismiss or layoff an employee "must be exercised without abuse of discretion" and . • Jumuad to file a complaint against Hi-Flyer and/or Jesus R. Respondents. HI-FLYER FOOD. praying for reinstatement and payment of separation pay. Jumuad was tasked to: 1) be highly visible in the restaurants under her jurisdiction. MONTEMAYOR. • Hi-Flyer conducted series a food safety.

the dismissal was too harsh considering the circumstances. According to the NLRC. assailed the finding that Jumuad was illegally dismissed and that they were solidarily liable therefor. JUMUAD. NLRC affirmed in toto the LA decision the NLRC noted that even before the Irregularities Report and Notice of Charges were given to Jumuad two (2) electronic mails (e-mails) between Montemayor and officers of Hi-Flyer showed that Hi-Flyer was already determined to terminate Jumuad. the decision of Hi-Flyer to terminate her would not change.29 ISSUE: On whether Jumuad was illegally dismissed RULING: . these e-mails were proof that Jumuad was denied due process considering that no matter how she would refute the charges hurled against her. To the mind of the CA. They also questioned the orders of the LA that they pay separation pay and reimburse the forty percent (40%) of the loan Jumuad paid pursuant to Hi-Flyer’s car entitlement program. MONTEMAYOR are hereby ordered to pay. Both Jumuad and Hi-Flyer appealed to the NLRC. when she was informed of the decision and the basis of her termination. when she submitted her written explanation and then. Hi-Flyer and Montemayor.00)." Thus. on the other hand. the emails just showed that Hi-Flyer extensively deliberated the nature and cause of the charges against Jumuad. jointly and severally. AND OR JESUS R.28 As for the e-mail exchanges between Montemayor and the officers of Hi-Flyer. It was of the view that the e-mail exchanges were mere discussions between Montemayor and other officers of Hi-Flyer on whether grounds for disciplinary action or termination existed.• • • • "should be tempered with compassion and understanding. After finding that no serious cause for termination existed. the LA ruled that Jumuad was illegally dismissed.24 CA rendered the subject decision reversing the decision of the labor tribunalthe CA was of the opinion that the requirements of substantive and procedural due process were complied with affording Jumuad an opportunity to be heard first. INC. HI-FLYER FOOD. the CA opined that they did not equate to a predetermination of Jumuad’s termination. the total amount of THREE HUNDRED THIRTY-SIX THOUSAND FOUR HUNDRED PESOS (P 336. complainant PAMELA FLORENTINA P. representing Separation Pay.400. Jumuad faulted the LA for not awarding backwages and damages despite its finding that she was illegally dismissed.

37 It should be noted.Jumuad was terminated for neglect of duty and breach of trust and confidence. breach of trust and confidence. Pertinent is Article 212 (m) of the Labor Code defining a managerial employee as one who is vested with powers or prerogatives to lay down and execute management policies and/or hire. Based on established facts. suspend. It cannot be denied that Jumuad willfully breached her duties as to be unworthy of the trust and confidence of Hi-Flyer. Each of the charges must be treated separately. the mere existence of the grounds for the loss of trust and confidence justifies petitioner’s dismissal. the neglect of duty must be both gross and habitual. however. as the law itself has treated them separately. As correctly noted by the appellate court.To be a ground for removal. there is no denying that Jumuad was a managerial employee. as a just cause for termination of employment. On the other hand. where greater trust is placed by management and from whom greater fidelity to duty is correspondingly expected. that the finding of guilt or innocence in a charge of gross and habitual neglect of duty does not preclude the finding of guilty or innocence in a charge of breach of trust and confidence. recall. lay off. The Court notes the apparent neglect of Jumuad of her duty in ensuring that her subordinates were properly monitored and that she had dutifully done all that was expected of her to ensure the safety of the consuming public who continue to patronize the KFC branches under her jursidiction. Jumuad executed management policies and had the power to discipline the employees of KFC branches in her area. is premised on the fact that the employee concerned holds a position of trust and confidence. She recommended actions on employees to the head office. the Court is convinced that Jumuad cannot be dismissed on the ground of gross and habitual neglect of duty. It has been said that a single or an isolated act of negligence cannot constitute as a just cause for the dismissal of an employee. The betrayal of this trust is the essence of the offense for which an employee is penalized.First. Pursuant to the Court’s . transfer. assign or discipline employees. discharge.

could have truly prevented the whole debacle from ever occurring. Inc. PAL. a labor organization certified as the sole and exclusive bargaining representative of the flight attendants. flight stewards and pursers of respondent. JURISDICTION OF LABOR ARBITERS HALAGUENA vs. Jumuad merely effected remedial measures. Cuevas. the CER’s reports of Hi-Flyer show that there were anomalies committed in the branches managed by Jumuad.38as long as there is some basis for such loss of confidence. Moreover. a managerial employee may be dismissed. Thus. October 2. 2009 Facts: Petitioners were employed as female flight attendants of respondent Philippine Airlines (PAL) on different dates prior to November 22. Jumuad may be held liable for negligence in the performance of her managerial duties. . this does not suffice. She may not have been directly involved in causing the cash shortages in KFC-Bohol. but her involvement in not performing her duty monitoring and supporting the day to day operations of the branches and ensure that all the facilities and equipment at the restaurant were properly maintained and serviced.ruling in Lima Land. In the restaurant business where the health and well-being of the consuming public is at stake. v. such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct. They are members of the Flight Attendants and Stewards Association of the Philippines (FASAP). there is reasonable basis for Hi-Flyer to withdraw its trust in her and dismissing her from its service. On the principle of respondeat superior or command responsibility alone. In the present case. 1996. it is observed that rather than taking proactive steps to prevent the anomalies at her branches. and the nature of his participation therein renders him unworthy of the trust and confidence demanded of his position.

the RTC issued an Order8 upholding its jurisdiction over the present case. Anduiza. provides that: A. respondent and FASAP entered into a Collective Bargaining Agreement3 incorporating the terms and conditions of their agreement for the years 2000 to 2005. against respondent for the invalidity of Section 144. compulsory retirement shall be fifty-five (55) for females and sixty (60) for males. The respondent filed an omnibus motion10 seeking reconsideration of the order overruling its objection to the jurisdiction of the . President of FASAP submitted their 2004-2005 CBA proposals6 and manifested their willingness to commence the collective bargaining negotiations between the management and the association. On July 29. The RTC issued a TRO . 2004. and demanded for an equal treatment with their male counterparts. this case seeks a declaration of the nullity of the questioned provision of the CBA. Part A of the PAL-FASAP CBA. Robert D. which is within the Court's competence. x x x. at the soonest possible time. with the allegations in the Petition constituting the bases for such relief sought. The RTC reasoned that: The allegations in the Petition do not make out a labor dispute arising from employer-employee relationship as none is shown to exist. petitioners filed a Special Civil Action for Declaratory Relief with Prayer for the Issuance of Temporary Restraining Order and Writ of Preliminary Injunction7 with the Regional Trial Court (RTC) of Makati City.On July 11. Compulsory Retirement Subject to the grooming standards provisions of this Agreement. 2001. Petitioners and several female cabin crews manifested that the aforementioned CBA provision on compulsory retirement is discriminatory. Rather. Part A of the PALFASAP CBA. 2004. For the Cabin Attendants hired before 22 November 1996: xxxx 3. On August 9. On July 12. Section 144. hereinafter referred to as PAL-FASAP CBA. 2004.

. the RTC issued an Order11 directing the issuance of a writ of preliminary injunction enjoining the respondent or any of its agents and representatives from further implementing Sec. Part A of the PAL-FASAP CBA pending the resolution of the case. consequently. the respondent court is by us declared to have NO JURISDICTION OVER THE CASE BELOW and. Respondent court is ordered to DISMISS its Civil Case.13 which was denied by the CA. exclusively cognizable by the RTC. Hence. Jurisdiction of the court is determined on the basis of the material allegations of the complaint and the character of the relief prayed for irrespective of whether plaintiff is entitled to such relief. orders and processes it has so far issued therein are ANNULED and SET ASIDE. Petitioner filed a motion for reconsideration. granting the respondent's petition. 144. On September 27. the instant petition for certiorari under Rule 45. be annuled and set aside for having been issued without and/or with grave abuse of discretion amounting to lack of jurisdiction. 2004.RTC the lifting of the TRO. respondent. which denied its objection to its jurisdiction.14 In the case at bar. the allegations in the petition for declaratory relief plainly show that petitioners' cause of action is the annulment of Section 144. all the proceedings. The CA rendered a Decision. Aggrieved. pursuant to Section 19 (1) of Batas Pambansa Blg. Held: The petition is meritorious. and ruled that: WHEREFORE. The subject of litigation is incapable of pecuniary estimation. filed a Petition for Certiorari and Prohibition with Prayer for a Temporary Restraining Order and Writ of Preliminary Injunction12 with the Court of Appeals (CA) praying that the order of the RTC. Issue: Whether the RTC has jurisdiction over the petitioners' action challenging the legality or constitutionality of the provisions on the compulsory retirement age contained in the CBA between respondent PAL and FASAP. Part A of the PAL-FASAP CBA.

Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter. i. The said issue cannot be resolved solely by applying the Labor Code..17 this Court held that not every dispute between an employer and employee involves matters that only labor arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. law on contracts and the Convention on the Elimination of All Forms of Discrimination Against Women. The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee relationship whichcan only be resolved by reference to the Labor Code.129.18 Here. it requires the application of the Constitution. They have no jurisdiction and competence to decide constitutional issues relative to the questioned compulsory retirement age. . labor statutes. v. other labor statutes.16 and the power to apply and interpret the constitution and CEDAW is within the jurisdiction of trial courts.15 Being an ordinary civil action. the same is beyond the jurisdiction of labor tribunals. a court of general jurisdiction.e. the employer-employee relationship between the parties is merely incidental and the cause of action ultimately arose from different sources of obligation. such claims fall outside the area of competence or expertise ordinarily ascribed to labor arbiters and the NLRC and the rationale for granting jurisdiction over such claims to these agencies disappears. Clearly. or their collective bargaining agreement. Isnani. Actions between employees and employer where the employer-employee relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court. the Constitution and CEDAW. as amended. In Georg Grotjahn GMBH & Co.19This Court holds that the grievance machinery and voluntary arbitrators do not have the power to determine and settle the issues at hand. Rather.

Jr. it cannot be said that the "dispute" is between the union and petitioner company because both have previously agreed upon the provision on "compulsory retirement" as embodied in the CBA. Thus. to insure a more knowledgeable solution of the problems submitted to them. .21 this Court emphasized the primacy of the regular court's judicial power enshrined in the Constitution that is true that the trend is towards vesting administrative bodies like the SEC with the power to adjudicate matters coming under their particular specialization. Saura. Applying the same rationale to the case at bar. who have both previously agreed upon the provision on the compulsory retirement of female flight attendants as embodied in the CBA. cognizable by labor tribunals. Otherwise. It is unfair to preclude petitioners from invoking the trial court's jurisdiction merely because it may eventually result into a change of the terms and conditions of employment. This would also relieve the regular courts of a substantial number of cases that would otherwise swell their already clogged dockets. the creeping take-over by the administrative agencies of the judicial power vested in the courts would render the judiciary virtually impotent in the discharge of the duties assigned to it by the Constitution. But as expedient as this policy may be. Along that line. The dispute is between respondent PAL and several female flight attendants who questioned the provision on compulsory retirement of female flight attendants. the dispute in the case at bar is not between FASAP and respondent PAL. the trial court is not asked to set and fix the terms and conditions of employment.In Saura v. it was only private respondent on his own who questioned the compulsory retirement. Also. x x x.. it does not necessarily follow that a resolution of controversy that would bring about a change in the terms and conditions of employment is a labor dispute. In the same vein. it should not deprive the courts of justice of their power to decide ordinary cases in accordance with the general laws that do not require any particular expertise or training to interpret and apply. but is called upon to determine whether CBA is consistent with the laws.

Branch 147 is DIRECTED to continue the proceedings in Civil Case No. acting on the motion for reconsideration. the private respondents were dismissed by the petitioner company on November 23. 1987. In addition. 1989. are REVERSED and SET ASIDE. reinstated the complaint. the petition is PARTLY GRANTED. Leyte. The Regional Trial Court of Makati City." The petitioners then came to this Court for relief. they instituted in the Regional Trial Court of Leyte. saying it was "distinct from the labor case for damages now pending before the labor courts. however. GALANG.1991 Facts: The private respondents were employees of the petitioner who were suspected of complicity in the irregular disposition of empty Pepsi Cola bottles. As a result.vs.On July 6. 04-886 with deliberate dispatch. 1987. a separate civil complaint against the petitioners for damages arising from what they claimed to be their malicious prosecution. On July 16. September 24. The motion was granted . After a preliminary investigation conducted by the Municipal Trial Court of Tanauan. The petitioners moved to dismiss the civil complaint on the ground that the trial court had no jurisdiction over the case because it involved employeeemployer relations that were exclusively cognizable by the labor arbiter. they lodged a complaint for illegal dismissal with the Regional Arbitration Branch of the NLRC in Tacloban City and decisions mandateed reinstatement with damages. the respondent judge. Allegedly after an administrative investigation. the complaint was dismissed. . the petitioners filed a criminal complaint for theft against them but this was later withdrawn and substituted with a criminal complaint for falsification of private documents.WHEREFORE. PEPSI COLA DISTRIBUTOR PHILS. The Decision and Resolution of the Court of Appeals.

It results that the orders under review are based on a wrong premise. Castro-Bartolome.Issue: Whether or not RTC has jurisdiction over the claim for damages arising from the malicious prosecution of the petitioner company. No such relationship or any unfair labor practice is asserted. In Medina v. This will be so only if there is a "reasonable causal connection" between the claim asserted and employee-employer relations to put the case under the provisions of Article 217. Absent such a link. The complaint did not arise from such relations and in fact could have arisen independently of an employment relationship between the parties. the complaint will be cognizable by the regular courts of justice in the exercise of their civil and criminal jurisdiction. It does not appear that there is a "reasonable causal connection" between the complaint and the relations of the parties as employer and employees. Theirs is a simple action for damages for tortious acts allegedly committed by the defendants. Justice Vicente Abad Santos said for the Court: It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. On the order dismissing the case because it came under the jurisdiction of the labor arbiters. 3 two employees filed in the Court of First Instance of Rizal a civil complaint for damages against their employer for slanderous remarks made against them by the company president. Held: It must be stressed that not every controversy involving workers and their employers can be resolved only by the labor arbiters. The case now before the Court involves a complaint for damages for malicious prosecution which was filed with the Regional Trial Court of Leyte by the employees of the defendant company. Such being the case. the governing statute is the Civil Code and not the Labor Code. What the employees are alleging is that the petitioners acted with bad faith when they filed the criminal complaint which the Municipal Trial Court said was intended "to harass the poor employees" and the dismissal of which was affirmed by the Provincial Prosecutor "for lack of evidence to establish even a slightest probability that all the respondents .

Slimmers World preventively suspended Okol. Okol received a memorandum that her suspension had been extended from 2 September until 1 October 1999 pending the outcome of the investigation on the Precor equipment importation. Inc. Slimmers World terminated Okol’s employment. Letter signed by its president Ronald Joseph Moy (Moy). is AFFIRMED and the petition DENIED. Okol received another memorandum from Slimmers World requiring her to explain why no disciplinary action should be taken against her in connection with the equipment seized by the Bureau of Customs. The shipment of the equipment was placed under the names of Okol and two customs brokers for a value less than US$500. On 2 September 1999. OKOL vs. WHEREFORE. December 11." This is a matter which the labor arbiter has no competence to resolve as the applicable law is not the Labor Code but the Revised Penal Code. On 28 July 1999.herein have committed the crime imputed against them. For being undervalued. with costs against the petitioner. . Slimmers World found Okol’s explanation to be unsatisfactory. The suspension arose from the seizure by the Bureau of Customs of seven Precor elliptical machines and seven Precor treadmills belonging to or consigned to Slimmers World. SLIMMER’s WORLD. the order dated July 6. She rose up the ranks to become Head Office Manager and then Director and Vice President from 1996 until her dismissal on 22 September 1999. On 17 September 1999. (Slimmers World) employed petitioner Leslie Okol (Okol) as a management trainee on 15 June 1992. the equipment were seized. 1989. 2009 Facts: Respondent Slimmers World International operating under the name Behavior Modifications. However. prior to Okol’s dismissal.

the dispute was an intra-corporate controversy falling outside the jurisdiction of the Arbitration branch. The labor arbiter ruled that Okol was the vice-president of Slimmers World at the time of her dismissal. Hence. The NLRC denied the motion for lack of merit.Okol filed a complaint3 with the Arbitration branch of the NLRC against Slimmers World. with prayer for reinstatement and payment of backwages. the NLRC not only decided the case on the merits but did so in the absence of position papers from both parties. falls within the jurisdiction of the regular courts pursuant to Republic Act No. Respondents then filed an appeal with the Court of Appeals. illegal dismissal. secretary. Issue: Whether or not the NLRC has jurisdiction over the illegal dismissal case filed by petitioner. damages and attorney’s fees. The issue revolves mainly on whether petitioner was an employee or a corporate officer of Slimmers World. for illegal suspension. being an intra-corporate dispute. Section 25 of the Corporation Code enumerates corporate officers as the president.10 The appellate court added that the NLRC had acted without jurisdiction in giving due course to the complaint and deprived respondents of their right to due process in deciding the case on the merits. the instant petition. 6 The NLRC reversed and set aside the labor arbiter’s order. treasurer and such other officers as may be provided for in the by- . Respondents filed a Motion for Reconsideration with the NLRC. The labor arbiter granted the motion to dismiss. unpaid commissions. the appellate court set aside the NLRC’s Resolution The Court of Appeals ruled that the case.Okol filed a Motion for Reconsideration which was denied. Respondents filed a Motion to Dismiss4 the case with a reservation of their right to file a Position Paper at the proper time.Okol filed an appeal with the NLRC. Since it involved a corporate officer. However. 8799. Held: The petition lacks merit.

illegal dismissal.12 we held that an "office" is created by the charter of the corporation and the officer is elected by the directors or stockholders.laws. petitioner was a director and officer of Slimmers World. an "employee" usually occupies no office and generally is employed not by action of the directors or stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee. partnerships or associations. 5. Section 5 of Republic Act No. is not a simple labor problem but a matter that comes within the area of corporate affairs and management and is a corporate controversy in contemplation of the Corporation Code. trustees. In a number of cases. unpaid commissions.2. NLRC. The charges of illegal suspension.2. Section 5(c) of Presidential Decree No. 8799. The question of remuneration involving a stockholder and officer. from the documents submitted by respondents. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations. transferred to regional trial courts the SEC’s jurisdiction over all cases listed in Section 5 of PD 902-A: 5. partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees. On the other hand. In Tabang v. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court. not a mere employee.18 Prior to its amendment. which took effect on 8 August 2000. Clearly. Subsection 5. or an intra-corporate controversy which arises between a stockholder and a corporation.17 we have held that a corporate officer’s dismissal is always a corporate act. The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. officers or managers of such corporations. reinstatement and back wages imputed by petitioner against respondents fall squarely within the ambit of intracorporate disputes. 902-A19 (PD 902-A) provided that intra-corporate disputes fall within the jurisdiction of the Securities and Exchange Commission (SEC): Sec. it shall have original and exclusive jurisdiction to hear and decide cases involving: xxx c) Controversies in the election or appointments of directors. .

if any. damages and attorney’s fees before the Labor Arbiter against NCLPI and Banson.6 Locsin held this position for 13 years. payment of backwages. October 20. Locsin submitted his opposition to the motion to dismiss. who was then President of NCLPI. is an intra-corporate dispute subject to the jurisdiction of the regular courts. On August 16. Unfortunately.. Thus. . Locsin was neither re-elected Chairman nor reinstated to his previous position as EVP/Treasurer.9 On July 11.2010 Facts: Locsin was elected Executive Vice President and Treasurer (EVP/Treasurer) of NCLPI. his duties and responsibilities included: (1) the management of the finances of the company. (2) carrying out the directions of the President and/or the Board of Directors regarding financial management. A special meeting was called. instead of filing their position paper. As EVP/Treasurer. LOCSIN VS. when he was nominated and elected Chairman of NCLPI’s Board of Directors. maintaining his position that he is an employee of NCLPI. the appellate court correctly ruled that it is not the NLRC but the regular courts which have jurisdiction over the present case.One of the items of the agenda was the election of a new set of officers.20 The determination of the rights of a director and corporate officer dismissed from his employment as well as the corresponding liability of a corporation.10 on the ground that the Labor Arbiter did not have jurisdiction over the case since the issue of Locsin’s removal as EVP/Treasurer involves an intra-corporate dispute. and (3) the preparation of financial reports to advise the officers and directors of the financial condition of NCLPI.8 Aggrieve. 2007. until January 21. having been re-elected every year since 1992.xxx It is a settled rule that jurisdiction over the subject matter is conferred by law. 2007. NISSAN LEASE PHILS. NCLPI and Banson filed a Motion to Dismiss. Locsin filed a complaint for illegal dismissal with prayer for reinstatement. 2005.

we agree with Locsin’s submission that the NCLPI incorrectly elevated the Labor Arbiter’s denial of the Motion to Dismiss to the CA. hence. to encourage respect for these rules. Issue: Whether or not the Labor Arbiter has jurisdiction over the alleged illegal dismissal.14 Hence this petition. payment of backwages. to the point of penalizing violators. not to the CA. an aggrieved party’s proper recourse to the denial is to file his position paper. we strictly adhere to the rules of procedure and do everything we can. the labor arbiter’s decision can be appealed to the NLRC. We take exception to this general rule. The position of Executive VicePresident/Treasurer is specifically included in the roster of officers provided for by the (Amended) By-Laws of petitioner corporation. As a rule. Held: The petition lacks merit. and actively participate in the proceedings. Labor Arbiter Concepcion issued an Order denying the Motion to Dismiss. the issue of his removal as EVP/Treasurer is an intra-corporate dispute under the RTC’s jurisdiction. we see sufficient justification to rule on the employer-employee relationship issue raised by NCLPI. however. Locsin is correct in positing that the denial of a motion to dismiss is unappealable. 2008. and damages. As a general rule. we are compelled to go beyond procedure and rule on the merits of the case. holding that her office acquired "jurisdiction to arbitrate and/or decide the instant complaint finding extant in the case an employeremployee relationship.Locsin was a corporate officer. as well as compensation as such officer are likewise set forth therein.12 The CA Decision . The CA reversed and set aside the Labor Arbiter’s Order denying the Motion to Dismiss and ruled that Locsin was a corporate officer. even . In the context of this case. Prefatorily. We see it appropriate to apply the exception to this case for the reasons discussed below.On March 10. when a strict implementation of these rules would cause substantial injustice to the parties. elevated the case to the CA through a Petition for Certiorari under Rule 65 of the Rules of Court. reinstatement. interpose the grounds relied upon in the motion to dismiss before the labor arbiter. Thereafter. his duties and responsibilities."11NCLPI.

not an employee. awards. The CA reached this conclusion by relying on the submitted facts and on Presidential Decree 902-A. Civil Procedure Annotated 453 (2001 ed. awards. not appealable until final judgment or order is rendered [1 Feria and Noche.)]. as amended (Labor Code). he was a corporate officer. Even as Executive Vice-President/Treasurer. treasurer and such other officers as may be provided for in the by-laws. The CA correctly ruled that no employer-employee relationship exists between Locsin and Nissan. or the Corporation Code of the Philippines (Corporation Code) provides that corporate officers are the president. x x x The NLRC rule proscribing appeal from a denial of a motion to dismiss is similar to the general rule observed in civil procedure that an order denying a motion to dismiss is interlocutory and. In the labor law setting. 223. Section 25 of Batas Pambansa Blg. x x x [Emphasis supplied." Likewise. or orders.39 As such. 442. APPEAL Decisions. and was elected to these positions by the Nissan board pursuant to its By-laws. 69. Locsin was undeniably Chairman and President. 34 which states: ART.though the Labor Arbiter’s interlocutory order was incorrectly brought to the CA under Rule 65. Such appeal may be entertained only on any of the following grounds: (a) If there is prima facieevidence of abuse of discretion on the part of the Labor Arbiter. hence. Locsin already . which defines corporate officers as "those officers of a corporation who are given that character either by the Corporation Code or by the corporation’s by-laws. This is Article 223 of Presidential Decree No. or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions.] A strict implementation of the NLRC Rules and the Rules of Court would cause injustice to the parties because the Labor Arbiter clearly has no jurisdiction over the present intra-corporate dispute. a plain. secretary. speedy and adequate remedy is still open to the aggrieved party when a labor arbiter denies a motion to dismiss.

In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations. partnerships or associations.2.. [Emphasis supplied. . So that the RTC should exercise jurisdiction based on the following legal reasoning: Prior to its amendment. Petitioner.] PEOPLE'S BROADCASTING SERVICE (BOMBO RADYO PHILS. it shall have original and exclusive jurisdiction to hear and decide cases involving: xxxx c) Controversies in the election or appointments of directors. has jurisdiction to hear the legality of the termination of his relationship with Nissan. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court. vs. Section 5(c) of Presidential Decree No. INC. Section 5 of Republic Act No.). We have held that a corporate officer’s dismissal is always a corporate act. 8799. officers or managers of such corporations. 902-A (PD 902-A) provided that intra-corporate disputes fall within the jurisdiction of the Securities and Exchange Commission (SEC): Sec.2. trustees.acted as a corporate officer because the position of Executive VicePresident/Treasurer is provided for in Nissan’s By-Laws. Article IV. Section 4 of these By-Laws specifically provides for this position. 5. not the Labor Arbiter or the NLRC. Subsection 5. or an intra-corporate controversy which arises between a stockholder and a corporation. transferred to regional trial courts the SEC’s jurisdiction over all cases listed in Section 5 of PD 902-A: 5. the RTC. partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees. The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. which took effect on 8 August 2000. Given Locsin’s status as a corporate officer.

JR. Inc. The dispositive portion of the Decision reads as follows: WHEREFORE.1 After the conduct of summary investigations. it was held that petitioner was accorded due process as it had been given the opportunity to be heard. and that the DOLE Secretary had jurisdiction over the matter. 00855 are REVERSED and SET ASIDE.A. petitioner People’s Broadcasting Service.A. VII.) questioned the Decision and Resolution of the Court of Appeals (CA) dated October 26. Private respondent Jandeleon Juezan filed a complaint against petitioner with the Department of Labor and Employment (DOLE) Regional Office No. respectively. 2007. as the jurisdictional limitation imposed by Article 129 of the Labor Code on the power of the DOLE Secretary under Art. nonpayment of service incentive leave. Cebu City. delayed payment of wages and noncoverage of SSS. the CA Decision was reversed and set aside. 128(b) of the Code had been repealed by Republic Act No. the DOLE Regional Director found that private respondent was an employee of petitioner. CEB-SP No. in C. When the matter was brought before the CA. CEB-SP No.R. where petitioner claimed that it had been denied due process. THE REGIONAL DIRECTOR. The Order of the then Acting Secretary of the Department of Labor and Employment dated 27 January 2005 denying petitioner’s appeal. G. and JANDELEON JUEZAN.. 2006 and June 26. G. but failed. The Acting DOLE Secretary dismissed petitioner’s appeal on the ground that petitioner submitted a Deed of Assignment of Bank Deposit instead of posting a cash or surety bond. 13th month pay. and after the parties submitted their position papers.THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT.R. PAG-IBIG and Philhealth. the petition is GRANTED. DOLE REGION VII. Respondents. for illegal deduction.. and the complaint against petitioner was dismissed. (Bombo Radyo Phils. and was entitled to his money claims. and the Orders of the Director. The Decision dated 26 October 2006 and the Resolution dated 26 June 2007 of the Court of Appeals in C.3 In the Decision of this Court. (RA) 7730. J. Inc. premium pay for holiday and rest day and illegal diminution of benefits. RESOLUTION VELASCO. 00855.: In a Petition for Certiorari under Rule 65. .2 Petitioner sought reconsideration of the Director’s Order.

000. 128(b) of the Labor Code.7 the DOLE sought clarification as well. or that the aggregate money claims not exceed PhP 5. It was held that while the DOLE may make a determination of the existence of an employer-employee relationship. the power of the DOLE and its duly authorized hearing officers to hear and decide any matter involving the recovery of wages and other monetary claims and benefits was qualified by the proviso that the complaint not include a claim for reinstatement. as amended by RA 7730. did away with the PhP 5. whether it has been terminated or it has not existed from the start. respectively.4 The Court found that there was no employer-employee relationship between petitioner and private respondent. It is conceded that if there is no employer-employee relationship. This was the interpretation of the Court of the clause "in cases where the relationship of employer-employee still exists" in Art. The Court treated the Motion for Clarification as a second motion for reconsideration.5 From this Decision.6 In its Comment. granting said motion and reinstating the petition. The National Labor Relations Commission (NLRC) was held to be the primary agency in determining the existence of an employer-employee relationship. the Public Attorney’s Office (PAO) filed a Motion for Clarification of Decision (with Leave of Court). The PAO sought to clarify as to when the visitorial and enforcement power of the DOLE be not considered as co-extensive with the power to determine the existence of an employeremployee relationship. are ANNULLED. dated 24 May 2004 and 27 February 2004. 128(b).000 limitation. allowing the DOLE Secretary to exercise its visitorial and enforcement power for claims beyond PhP 5.DOLE Regional Office No. The only qualification to this expanded power of the DOLE was only that there still be an existing employer-employee relationship. Under Art.8 It is apparent that there is a need to delineate the jurisdiction of the DOLE Secretary vis-à-vis that of the NLRC. 129 of the Labor Code. RA 7730. as to the extent of its visitorial and enforcement power under the Labor Code. The complaint against petitioner is DISMISSED.000. this function could not be co-extensive with the visitorial and enforcement power provided in Art. as amended. VII. or an Act Further Strengthening the Visitorial and Enforcement Powers of the Secretary of Labor. the DOLE has no .

"Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary. the DOLE would refer the matter to the NLRC. and from there to decide whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor Code. No procedure was laid down where the DOLE would only make a preliminary finding. in determining the existence of an employer-employee relationship. that any finding by the DOLE is merely preliminary. The question now arises. but places a limitation upon the power of the DOLE. and if so. the determination of the existence of an employer-employee relationship cannot be co-extensive with the visitorial and enforcement power of the DOLE. that is. The DOLE. But even in conceding the power of the DOLE to determine the existence of an employeremployee relationship.jurisdiction. The DOLE must have the power to determine whether or not an employeremployee relationship exists. the Court held that the determination of the existence of an employer-employee relationship is still primarily within the power of the NLRC. may the DOLE make a determination of whether or not an employer-employee relationship exists. as amended by RA 7730. The law did not say that the DOLE would first seek the NLRC’s determination of the existence of an employeremployee relationship. has a ready set of guidelines to follow. This conclusion must be revisited. that the power was primarily held by the NLRC. Under Art. the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. to what extent? The first portion of the question must be answered in the affirmative. the same guide the courts . No limitation in the law was placed upon the power of the DOLE to determine the existence of an employer-employee relationship. The prior decision of this Court in the present case accepts such answer. as amended by RA 7730. 128(b) of the Labor Code. or that should the existence of the employer-employee relationship be disputed. and in cases where the relationship of employer-employee still exists. the first sentence reads." It is clear and beyond debate that an employer-employee relationship must exist for the exercise of the visitorial and enforcement power of the DOLE.

by the simple expedient of disputing the employer-employee relationship. This is not to say that the determination by the DOLE is beyond question or review. If the DOLE makes a finding that there is an existing employer-employee relationship. to the exclusion of the NLRC. and it is the DOLE that will weigh it. making use of the same evidence that would have been presented before the NLRC. The DOLE Secretary.1avvphi1 Suffice it to say. that no employer-employee relationship existed in the first place. The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could. The prospect of competing conclusions could just as well have been eliminated by according respect to the DOLE findings. upon review. The Court. to see if the same does successfully refute the existence of an employer-employee relationship. to the exclusion of the NLRC. The Court issued the declaration that at least a prima facie showing of the absence of an employer-employee relationship be made to oust the DOLE of jurisdiction. The DOLE may well make the determination that no . it takes cognizance of the matter. can utilize the same test. (3) the power of dismissal. should a party wish to dispute the findings of the DOLE. and this We believe is the more prudent course of action to take.themselves use. or his or her representatives. there are judicial remedies such as a petition for certiorari under Rule 65 that may be availed of. in limiting the power of the DOLE. It must also be remembered that the power of the DOLE to determine the existence of an employer-employee relationship need not necessarily result in an affirmative finding. force the referral of the matter to the NLRC. even in the course of inspection. But it is precisely the DOLE that will be faced with that evidence. (4) the employer’s power to control the employee’s conduct. The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee.9 The use of this test is not solely limited to the NLRC. The determination of the existence of an employer-employee relationship by the DOLE must be respected. gave the rationale that such limitation would eliminate the prospect of competing conclusions between the DOLE and the NLRC. or it appears. (2) the payment of wages. The DOLE would have no jurisdiction only if the employer-employee relationship has already been terminated.

To recapitulate. as amended by RA 7730. as amended by RA 7730. as differentiated from cases under Arts. and if the amount involved exceeds PhP 5. 128(b) has been amended to expand the powers of the DOLE Secretary and his duly authorized representatives by RA 7730. under Art. 129 and 217 of the Labor Code when money claims are involved. not review by the NLRC. 128(b) of the Labor Code. where the Court has ruled that Art. the jurisdiction is properly with the NLRC. which originate from complaints. however. i. if a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor Code or other labor legislation. and there is a finding by the DOLE that there is an existing employeremployee relationship. not by the parties. The view states that despite the wording of Art. under Art. 217. there is still a threshold amount set by Arts. despite the amount of the money claims involved. 128(b) of the Labor Code.employer-employee relationship exists. 129 and 217. There is a view that despite Art.000. the DOLE exercises jurisdiction to the exclusion of the NLRC.. which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages. thus divesting itself of jurisdiction over the case. the jurisdiction is properly with the DOLE. this would only apply in the course of regular inspections undertaken by the DOLE. 129. Under Art. the inspection held by the DOLE regional director was prompted specifically by a complaint. hours of work. if accompanied by a claim for reinstatement. the Court resolved that the DOLE had the jurisdiction.e. and other terms and conditions of employment. 128(b). Therefore. In these cases. and there is still an existing employeremployee relationship. Furthermore. subject to judicial review. the jurisdiction is with the regional director of the DOLE. the initiation of a case through a complaint does not divest the DOLE Secretary or his duly authorized representative of jurisdiction under Art. It must not be precluded from being able to reach its own conclusions. The . If the DOLE finds that there is no employer-employee relationship.000 and below. and certainly not by this Court. 128(b). If a complaint is filed with the DOLE. under Art. the DOLE is fully empowered to make a determination as to the existence of an employeremployee relationship in the exercise of its visitorial and enforcement power. and it is accompanied by a claim for reinstatement. the jurisdiction is with the labor arbiter. the jurisdiction is properly with the Labor Arbiter. in these cases. If a complaint is filed with the NLRC. that if it is for PhP 5. 217(3) of the Labor Code. There are several cases. rates of pay.

however. On that day. the Decision of this Court in G. JAN CARLO GALA. Thus. 179652 is hereby AFFIRMED.findings of the DOLE.10 The findings of the Regional Director were not based on substantial evidence. On July 27. 2006. 2006. In the present case. the finding of the DOLE Regional Director that there was an employer-employee relationship has been subjected to review by this Court. 2006. based on the evidence presented. 1823 supervised by Foreman Narciso Matis. Gala was dismissed for alleged complicity on the May 25.R. respondent Jan Carlo Gala commenced employment with Meralco as a probationary lineman. Sr. with the finding being that there was no employer-employee relationship between petitioner and private respondent. No. the Labor Secretary or the latter’s authorized representative shall have the power to determine the existence of an employer-employee relationship. WHEREFORE. may still be questioned through a petition for certiorari under Rule 65 of the Rules of Court. as there was no employer-employee relationship present. pilferages of Meralco’s electrical supplies. 1837 under the supervision of Foreman Raymundo Zuñiga. 2012 FACTS: On March 2. He was assigned at Meralco’s Valenzuela Sector. The DOLE had no jurisdiction over the case. He was initially a member of the crew of Truck No. he joined the crew of Truck No. After one month. ART221 OF LABOR CODE MANILA ELECTRIC COMPANY VS. March 7. Private respondent presented self-serving allegations as well as self-defeating evidence. and private respondent failed to prove the existence of an employer-employee relationship. to the exclusion of the NLRC. the dismissal of the complaint against petitioner is proper. barely four months on the job. Gala and other Meralco workers were instructed to . with the MODIFICATION that in the exercise of the DOLE’s visitorial and enforcement power.

supervised by Zuñiga. arrived. a nonMeralco employee. When they arrived at the worksite.replace a worn-out electrical pole at the Pacheco Subdivision in Valenzuela City. without being stopped. (3) he did not call the attention of his superiors because he was not in a position to do so as he was a mere lineman. was already there. he had no participation in what they did. The task force was composed of Joseph Aguilar. giving him the impression that they knew him. Gala and the other members of the crew were instructed to help in the digging of a hole for the pole to be installed. 1891. Llanes boarded the trucks. Gala and the other workers saw that Truck No. Gala denied involvement in the pilferage. a Meralco surveillance task force was monitoring their activities and recording everything with a Sony video camera. He claimed that: (1) he was at some distance away from the trucks when the pilferage happened. and (4) he was just following instructions in connection with his work and had no control in the disposition of company supplies and materials. Gala and the other linemen were directed to join Truck No. Noberto “Bing” Llanes. While the Meralco crew was at work. The linemen of Truck No. contending that even if his superiors might have committed a wrongdoing. Ariel Dola and Frederick Riano. the foremen and the other linemen who were at the worksite when the pilferage happened were later charged with misconduct and dishonesty for their involvement in the incident. 1837 were already at work. . 1837. Unknown to Gala and the rest of the crew. Gala maintained that his mere presence at the scene of the incident was not sufficient to hold him liable as a conspirator. (2) he did not have an inkling that an illegal activity was taking place since his supervisors were conversing with Llanes. He appeared to be known to the Meralco foremen as they were seen conversing with him. Meralco investigated the incident and asked Gala to explain. Aside from Gala. and took out what were later found as electrical supplies. under the supervision of Foreman Nemecio Hipolito.

Both elevated the case to the CA through a petition for certiorari under Rule 65 of .”The NLRC. Meralco proceeded with the investigation and eventually terminated his employment on July 27. Gala. Both parties moved for partial reconsideration. and Meralco. 2006. Gala responded by filing an illegal dismissal complaint against Meralco. NLRC’s Ruling On May 2. It found insufficient the joint affidavit of the members of Meralco’s task force testifying that Gala and two other linemen knew Llanes. It found that Gala had been illegally dismissed. 2007 Labor Arbiter Teresita D. The CA Decision On August 25. damages and interests. The NLRC denied the motions. on the ground that he should have been reinstated with full backwages. the Rules of Court. She held that Gala’s participation in the pilferage of Meralco’s property rendered him unqualified to become a regular employee. It opined that nothing in the records show Gala’s knowledge of or complicity in the pilferage. on the ground that the NLRC erred in finding that Gala had been illegally dismissed. The Compulsory Arbitration Rulings On September 7. a ruling that was supported by the evidence. It awarded him backwages and attorney’s fees.Despite Gala’s explanation. Castillon-Lora dismissed the complaint for lack of merit. 2008. since there was “no concrete showing of complicity with the alleged misconduct/dishonesty. stating that his tenure lasted only up to the end of his probationary period. the NLRC reversed the labor arbiter’s ruling. 2009 the CA denied Meralco’s petition for lack of merit and partially granted Gala’s petition. It concurred with the NLRC that Gala had been illegally dismissed. ruled out Gala’s reinstatement. however.

The CA modified the NLRC decision of May 2, 2008, and ordered Gala’s reinstatement with full backwages and other benefits. The CA also denied Meralco’s motion for reconsideration. Hence, the present petition for review on certiorari. Meralco’s petition to [SC] Meralco faults the CA for not giving credit to its witnesses, which instead treated their joint affidavit as inconclusive to establish Gala’s participation in the pilferage. It submits that the affidavit of Meralco’s three witnesses disproves the CA’s findings, considering that their statements were based on their first-hand account of the incident during surveillance. The three Meralco employees stated that all of the company’s foremen and linemen present at that time, including Gala, had knowledge of the pilferage that was happening at the time. According to Aguilar, Dola and Riano, the trucks’ crew, including Gala, was familiar with Llanes who acted as if his presence — particularly, that of freely collecting materials and supplies — was a regular occurrence during their operations. Meralco maintains that Gala himself admitted in his own

testimony, that he had been familiar with Llanes even before the pilfering incident. Meralco opines Gala’s admission, instead of demonstrating “his feigned innocence,” even highlights his guilt, especially considering that by design, his misfeasance assisted Llanes in the theft; Gala neither intervened to stop Llanes, nor did he report the incident to the Meralco management. Meralco posits that because of his undeniable knowledge in the pilferage activities done by their group, the company was well within its right in terminating his employment as a probationary employee for his failure to meet the basic standards for his regularization. The standard were explained to him and outlined in his probationary employment contract. For this reason and due to the expiration of Gala’s probationary employment, the CA should not have ordered his reinstatement with full backwages. Finally, Meralco

argues that even if Gala was illegally dismissed, he was only entitled to his backwages for the unexpired portion of his employment contract with the company. Gala’s Comment Gala asks for a denial of the petition because of (1) serious and fatal infirmities in the petition; (2) unreliable statements of Meralco’s witnesses; and (3) clear lack of basis to support the termination of his employment. As to the merits of the case, Gala bewails Meralco’s reliance on the joint affidavit of Aguilar, Dola and Riano not only because it was presented for the first time on appeal to the CA, but also because it was a mere afterthought. He explains that Aguilar and Dola were the very same persons who executed a much earlier sworn statement or transcription dated July 7, 2006. This earlier statement did not even mention Gala, but the later joint affidavit “splashes GALA’s name in a desperate attempt to link him to an imagined wrongdoing.” Gala maintained that his mere presence at the scene of the incident was not sufficient to hold him liable as a conspirator. Finally, Gala posits that his reinstatement with full backwages is but a consequence of the illegality of his dismissal. He argues that even if he was on probation, he is entitled to security of tenure and claims that in the absence of any justification for the termination of his probationary employment, he is entitled to continued employment even beyond the probationary period. ISSUE: The petition is anchored on the ground that the CA seriously erred and gravely abused its discretion in 1. ruling that Gala was illegally dismissed; and 2. status. directing Gala’s reinstatement despite his probationary

HELD: the petition is GRANTED SC finds merit in the petition. Contrary to the conclusions of the CA and the NLRC, there is substantial evidence supporting Meralco’s position that Gala had become unfit to continue his employment with the company. Gala was found, after an administrative investigation, to have failed to meet the standards expected of him to become a regular employee and this failure was mainly due to his “undeniable knowledge, if not participation, in the pilferage activities done by their group, all to the prejudice of the Company.” Gala insists that he cannot be sanctioned for the theft on may 25, 2006. He maintains that he had no direct participation in the incident and that he was not aware that an illegal activity was going on as he was at some distance from the trucks when the alleged theft was being committed. He adds that he did not call the attention of the foremen because he was a mere lineman and he was focused on what he was doing at the time. He argues that in any event, his mere presence in the area was not enough to make him a conspirator in the commission of the pilferage. Gala misses the point. He forgets that as a probationary employee, his overall job performance and his behavior were being monitored and measured in accordance with the terms and conditions of his probationary employment agreement. Which under its par. 8, he was subject to strict compliance with, and non-violation of the Company Code on Employee Discipline, Safety Code, rules and regulations and existing policies. Par. 10 required him to observe at all times the highest degree of transparency, selflessness and integrity in the performance of his duties and responsibilities, free from any form of conflict or contradicting with his own personal interest. The established fact that Llanes, a non-Meralco employee, was often seen during company operations, conversing with the foremen, for reason or reasons connected with the ongoing company operations, gives rise to the

question: what was he doing there? Apparently, he had been visiting Meralco worksites, at least in the Valenzuela Sector, not simply to socialize, but to do something else. As testified to by witnesses, he was picking up unused supplies and materials that were not returned to the company. From these factual premises, it is not hard to conclude that this activity was for the mutual pecuniary benefit of himself and the crew who tolerated the practice. For one working at the scene who had seen or who had shown familiarity with Llanes (a non-Meralco employee), not to have known the reason for his presence is to disregard the obvious, or at least the very suspicious. We consider, too, and we find credible the company submission that the Meralco crew who worked at the Pacheco Subdivision in Valenzuela City on May 25, 2006 had not been returning unused supplies and materials, to the prejudice of the company. From all these, the allegedly hearsay evidence that is not competent in judicial proceedings (as noted above), takes on special meaning and relevance. With respect to the video footage of the May 25, 2006 incident, Gala himself admitted that he viewed the tape during the administrative investigation, particularly in connection with the accusation against him that he allowed Llanes (binatilyong may kapansanan sa bibig) to board the Meralco trucks. The choice of evidence belongs to a party and the mere fact that the video was shown to Gala indicates that the video was not an evidence that Meralco was trying to suppress. Gala could have, if he had wanted to, served a subpoena for the production of the video footage as evidence. The fact that he did not does not strengthen his case nor weaken the case of Meralco. The totality of the circumstances obtaining in the case convinces us that Gala could not but have knowledge of the pilferage of company electrical supplies onMay 25, 2006; he was complicit in its commission, if not by direct

participation, certainly, by his inaction while it was being perpetrated and by not reporting the incident to company authorities. Thus, we find substantial evidence to support the conclusion that Gala does not deserve to remain in Meralco’s employ as a regular employee. He violated his probationary employment agreement, especially the requirement for him “to observe at all times the highest degree of transparency, selflessness and integrity in the performance of their duties and responsibilities.” He failed to qualify as a regular employee. For ignoring the evidence in this case, the NLRC committed grave abuse of discretion and, in sustaining the NLRC, the CA committed a reversible error. The assailed decision and resolution of the Court of Appeals are SET ASIDE. NATIONWIDE SECURITY AND ALLIED SERVICES, INC. [NSAS] VS. THE COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION AND JOSEPH DIMPAZ, HIPOLITO LOPEZ, EDWARD ODATO, FELICISIMO PABON AND JOHNNY AGBAY. petition for certiorari seeking the reversal and setting aside of the Decision and the Resolution of the Court of Appeals, which affirmed the resolutions of the NLRC. FACTS: Labor Arbiter Manuel M. Manansala found NSAS, a security agency, not liable for illegal dismissal involving eight security guards who were employees of the petitioner. However, the Labor Arbiter directed the petitioner to pay the aforementioned security guards P81,750.00 in separation pay, P8,700.00 in unpaid salaries, P93,795.68 for underpayment and 10% attorney's fees based on the total monetary award. NSAS appealed to the NLRC which dismissed its appeal for two reasons -first, for having been filed beyond the reglementary period within which to

perfect the appeal and second, for filing an insufficient appeal bond. the Decision deemed FINAL and EXECUTORY. Its motion for reconsideration ALSO denied. NSAS appealed to the Court of Appeals to resolve on the merits rather than on pure technicalities in the interest of due process. The Court of Appeals dismissed the case, holding that in a special action for certiorari, the burden is on petitioner to prove not merely reversible error, but grave abuse of discretion amounting to lack of or excess of jurisdiction on the part of public respondent NLRC. The questioned Resolutions of the NLRC AFFIRMED. The Court of Appeals likewise denied the petitioner's motion for reconsideration. Hence, this petition ISSUE: WHETHER OR NOT TECHNICALITIES IN LABOR CASES MUST PREVAIL OVER THE SPIRIT AND INTENTION OF THE LABOR CODE UNDER ARTICLE 221 THEREOF WHICH STATES: "In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of Law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without [regard] to technicalities of law or procedure, all in the interest of due process."

HELD: Petition lacks merit. NSAS contends that the Court of Appeals erred when it dismissed its case based on technicalities while the private respondents contend that the appeal to the NLRC had not been perfected, since the appeal was filed outside the reglementary period, and the bond was insufficient. it must be pointed out here that the petition for certiorari filed with the Court by petitioner under Rule 65 of the Rules of Court is inappropriate. The proper remedy is a petition for review under Rule 45 purely on questions of law. There being a remedy of appeal via petition for review under Rule 45 of

including graft and corruption. No such abuse of discretion happened here. nor was it a whimsical exercise of judgment amounting to a lack of jurisdiction. (c) If made purely on question of law. In case of a judgment involving a monetary award. (b) If the decision. order or award was secured through fraud or coercion. Such appeal may be entertained only on any of the following grounds: (a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter. or to act at all in contemplation of law. . still it will not prosper because we do not find any grave abuse of discretion amounting to lack of or excess of jurisdiction on the part of the Court of Appeals when it dismissed the petition of the security agency. . awards. an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from.Decisions. Appeal. 223. But even if we bend our Rules to allow the present petition for certiorari. We must stress that under Rule 65.the Rules of Court. awards. or orders. the abuse of discretion must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined by law. the filing of a petition for certiorari under Rule 65 is improper. and (d) If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant. as where the power is exercised in an arbitrary and despotic manner by reason of passion or personal hostility. The Labor Code provides as follows: ART. or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions. The decision of CA was not capricious nor arbitrary.

falls on a Saturday. 1999--was already beyond the reglementary period and in violation of the NLRC Rules and the pertinent Article on Appeal in the Labor Code. The appeal to the NLRC should have been perfected. 1999. within a period of 10 days from receipt by petitioner clearly. 1999. Sunday or holiday. as the case may be. . both the NLRC and the Court of Appeals found that petitioner received the decision of the Labor Arbiter on July 16.* The New Rules of Procedure of the NLRC states: Section 1. resolutions or orders of the Regional Director of the Department of Labor and Employment pursuant to Article 129 of the Labor Code. the last day to perfect the appeal shall be the first working day following such Saturday. Sunday or holiday. No motion or request for extension of the period within which to perfect an appeal shall be allowed. The right to appeal is a statutory right and one who seeks to avail of the right must comply with the statute or the rules. 1999. It is only in highly meritorious cases that this Court will opt not to strictly apply the rules and thus prevent a grave injustice from being done. The exception does not obtain here. and we take it as binding on us. Periods of appeal. by registered mail on July 29. "Notice of Appeal" and "Motion to Reduce Bond". under Registry Receipt No. the filing of the appeal--three days after July 26. Failure to perfect an appeal renders the decision final and executory. particularly an appeal. resolutions or orders of the Labor Arbiter shall be final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt thereof. The decision of the Labor Arbiter is Final and Executory. 003098. This factual finding is supported by sufficient evidence. within five (5) calendar days from receipt thereof. In the instant case.Decisions. ART 223 . NSAS then simultaneously filed its "Appeal Memorandum". These were received by the NLRC on July 30. The rules. and in case of decisions. must be strictly followed as they are considered indispensable interdictions against needless delays and for the orderly discharge of judicial business. If the 10th or 5th day.

a Writ of Executiondated April 22. however. 2001. On his part. holiday pay. ArnelSiberre. 2002 was already issued for the enforcement of its reinstatement aspect as same is immediately executory even pending appeal. Castillon (Castillon) still issued a Writ of Executiondated March 9. 2003. RONNIE ABEL. • On December 21. allowances and separation pay against petitioner on August 9. February 24 and March 5. Labor Arbiter Danna M. LauroLicup. LAURO LICUP. ARNEL SIBERRE. the NLRC ordered respondents' reinstatement but without backwages. • December 9. 2004 to enforce the monetary award in accordance with the abovementioned computation. EdmundoCapada. respondents filed with the Labor Arbiter an Ex-Parte Motion to Set Case for Conference with Motion. rest day pay. Both parties appeared thereat but failed to come to terms on the issue of the monetary award. GODOFREDO MAGNAYE. Norberto Nigos and GodofredoMagnaye were drivers while respondents Ronnie Abel. RESPONDENTS. NOMERLITO MAGNAYE AND ALBERTO DELA VEGA. • The case was then set for pre-execution conference on January 29. VS. 2004.ISLRIZ TRADING/ VICTOR HUGO LU. EFREN CAPADA.They averred therein that since the Decision of Labor Arbiter Gan ordered their reinstatement. • Respondents EfrenCapada. 2002. the . Accordingly. 2000 before the Labor Arbiter. • Nevertheless. Finding that respondents' failure to continue working for petitioner was neither caused by termination nor abandonment of work. Labor Arbiter Waldo Emerson R. The NLRC set aside the Decision of Labor Arbiter Gan in a Resolution dated September 5. • Claiming that they were illegally dismissed. petitioner appealed to the NLRC which granted the appeal. NomerlitoMagnaye and Alberto Dela Vega were helpers of Islriz Trading. Gan (Gan) rendered a Decision Declaring respondent ISLRIZ TRADING guilty of illegal dismissal AND Ordering respondent to reinstate complainants to their former positions without loss of seniority rights and the payment of full backwages from date of dismissal to actual reinstatement • Aggrieved. respondents filed a Complaint for illegal dismissal and non-payment of overtime pay. PETITIONER. a gravel and sand business owned and operated by petitioner Victor Hugo Lu. petitioner imputed abandonment of work against respondents. EDMUNDO CAPADA. NORBERTO NIGOS.

they asked Labor Arbiter Castillon to issue a break-open order. But ca dismissed said petition. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein. Hence. ownership and possession of said properties because petitioner had allegedly padlocked the premises where the properties were situated. • Undeterred. shall immediately be executory.Sheriff issued a Notice of Sale/Levy on Execution of Personal Propertyby virtue of which petitioner's properties were levied and set for auction sale • In an effort to forestall this impending execution.' The view as maintained in a number of cases is that: `x xx[E]ven if the order of reinstatement of the Labor Arbiter is reversed on . HELD: In resolving the case. pending appeal. the Court examined its conflicting rulings with respect to the application of paragraph 3 of Article 223 of the Labor Code. petitioner then filed a Motion to Quash Writ of Execution with Prayer to Hold in Abeyance of Auction Sale[18] and a Supplemental Motion to Quash/Stop Auction Sale. they could not take full control. viz: At the core of the seeming divergence is the application of paragraph 3 of Article 223 of the Labor Code which reads: `In any event. the decision of the Labor Arbiter reinstating a dismissed or separated employee. merely reinstated in the payroll. petitioner brought the matter to the CA through a Petition for Certiorari. insofar as the reinstatement aspect is concerned. whether respondents may collect their wages during the period between the Labor Arbiter's order of reinstatement pending appeal and the NLRC Resolution overturning that of the Labor Arbiter. at the option of the employer.[19] He also served upon the Sheriff a letter of protest • respondents claimed that although petitioner's levied properties were already awarded to them. WHICH IS GRANTED. ISSUE: . The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or.

" theGenuinoruling not only disregards the social justice principles behind the rule. it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. employer must pay the employee's salaries. On the other hand. then the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries s/he received while the case was pending appeal. The opposite view is articulated in Genuino which states: `If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid. if the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality. it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the employer to comply therewith. a dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to receive wages pending appeal upon reinstatement. Unless there is a restraining order. it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court or tribunal. which is immediately executory. In other words. It has thus been advanced that there is no point in releasing the wages to petitioners since their dismissal was found to be valid. more so if he actually rendered services during the period. and to do so would constitute unjust enrichment. or to reinstate them in the payroll.which automatically accrued from notice . collective bargaining agreement provisions. or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her employer under existing laws. even if the order of reinstatement of the Labor Arbiter is reversed on appeal. and that failing to exercise the options in the alternative. but also institutes a scheme unduly favorable to management. It likewise settled the view that the Labor Arbiter's order of reinstatement is immediately executory and the employer has to either re-admit them to work under the same terms and conditions prevailing prior to their dismissal. and company practices. the employee is not required to reimburse whatever salary he received for he is entitled to such.appeal.

if it is shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer. The discussion. Notably. 2002 was that he would first refer the matter to his counsel as he could not effectively act on the order of execution without the latter's advice CESAR V. what petitioner gave as reason in not immediately effecting reinstatement after he was served with the Writ of Execution dated April 22. and (2) the delay must not be due to the employer's unjustified act or omission. . to wit: (1) there must be actual delay or that the order of reinstatement pending appeal was not executed prior to its reversal.of the Labor Arbiter's order of reinstatement until its ultimate reversal of the NLRC. however. It then provided for the two-fold test in determining whether an employee is barred from recovering his accrued wages. • Respondent KJ Commercial is a sole proprietorship. It owns trucks and engages in the business of distributing cement products. CARLOS RAZON VS. did not stop there. KJ COMMERCIAL and REYNALDO QUE. 2ND QUESTION: Was the delay not due to the employer's unjustified act or omission? Islriz Trading here did not undergo rehabilitation or was under any analogous situation which would justify petitioner's nonexercise of the options provided under Article 223 of the Labor Code. the employee may be barred from collecting the accrued wages. The court went on to declare that after the Labor Arbiter's decision is reversed by a higher tribunal. Application of the Two-Fold Test to the present case 1STQUESTION:Was there an actual delay or was the order of reinstatement pending appeal executed prior to its reversal? there was an actual delay in the execution of the reinstatement aspect of the Decision of Labor Arbiter Gan prior to the issuance of the NLRC Resolution overturning the same. GARCIA.

in their Position Paper. petitioners demanded for a P40 daily salary increase.562. • KJ Commercial filed a motion for reconsideration and posted a P2.930 surety bond. Rizalde Valencia. Allan Basa. underpayment of salary and nonpayment of service incentive leave and thirteenth month pay. • LABOR ARBITERS RULING: In his 30 October 2008 Decision. and 2)A bond of reasonable amount in relation to the monetary award is posted. Tomas Razon.• On different dates. • On 2 January 2006. Ruel Soliman. the Labor Arbiter held that KJ Commercial illegally dismissed petitioners. 2006. and Cenen Canlapan (petitioners). • Conversely. 2006 and did not abandoned [sic] their jobs as claimed by the respondents when the respondents.We note that while respondents-appellants claim that they could not possibly produce enough cash for the required appeal bond. they are unwilling to at least put up a property to secure a surety bond. respondents-appellants failed to perfect an appeal for failure to post the required bond. Jessie Garcia. Juanito Paras. Garcia. petitioners filed with the Labor Arbiter a complaint6 for illegal dismissal. • KJ Commercial appealed to the NLRC. Palo. they ordered the other drivers to get the trucks in order that the hauling of the cements will not incur further delay and that their business will not be prejudiced. they stopped working and abandoned their trucks at the Northern Cement Plant Station in Sison. Alberto De Guzman.000 cash bond. Omer E. • On 3 February 2006. We examined the narration of facts of the respondents in their Position Paper and Supplemental Position Paper and we concluded that these complainants were actually terminated on January 2. Rommel Pangan. • NLRC RULING: the NLRC dismissed the appeal. a motion to reduce bond shall only be entertained when the following requisites concur: 1) The motion is founded on meritorious ground. admitted that their cement plant was shutdown on January 3. It filed before the NLRC a motion to reduce bond and posted a P50. • To pressure KJ Commercial to grant their demand. Alejandro Orag. They also blocked other workers from reporting to work.. . KJ Commercial employed as truck drivers and truck helpers petitioners Cesar V. Pangasinan. Carlos Razon. 2006 and when it resumed its operation on January 7.

• Petitioners filed with the Court of Appeals a petition13 for certiorari under Rule 65 of the Rules of Court. raise as issue in their petition filed with this Court that the Labor Arbiter’s 30 October 2008 Decision had become final and executory.) HELD: • The petition is unmeritorious. the NLRC granted the motion and set aside the Labor Arbiter’s 30 October 2008 Decision. for the first time. thus. points . • CA RULING: In its 29 April 2011 Decision. In its 25 June 2010 Resolution. We find the records of the case bereft of evidence to substantiate the conclusions reached by the Labor Arbiter that petitioners were illegally dismissed from employment. Well-settled is the rule that issues not raised below cannot be raised for the first time on appeal. because it was not raised in the tribunals a quo. the NLRC’s 8 February and 25 June 2010 Resolutions and the Court of Appeals’ 29 April 2011 Decision are void for lack of jurisdiction. KJ Commercial will be denied its right to due process. This argument cannot be passed upon in this appeal. they did not raise as issue that the Labor Arbiter’s 30 October 2008 Decision had become final and executory.• NLRC RULING AS MR: In its 8 February 2010 Resolution. the NLRC denied the motion for lack of merit.Petitoners cannot. theories and arguments not raised before the Court of Appeals will not be considered by this Court. Otherwise. ISSUE: W/N the Labor Arbiter’s 30 October 2008 Decision became final and executory. Thus. Points of law. It held that: Complainants’ silence on these material allegations consequently lends support to respondents-appellants[’] contention that complainants were never dismissed at all but had stopped driving the hauler truck assigned to each of them when their demand for salary increase in the amount they wish was not granted by respondents-appellants. • Petitioners filed a motion for reconsideration. the Court of Appeals dismissed the petition and affirmed the NLRC’s 8 February and 25 June 2010 Resolutions. When petitioners filed with the Court of Appeals a petition for certiorari. (Petitioners claim that KJ Commercial failed to perfect an appeal since the motion to reduce bond did not stop the running of the period to appeal.

and it may rule on the motion beyond the 10-day period within which to perfect an appeal. the appellant may still file a motion for reconsideration as provided under Section 15. • KJ Commercial’s filing of a motion to reduce bond and delayed posting of the P2. then the decision of the labor arbiter becomes final and executory. The NLRC has full discretion to grant or deny the motion to reduce bond.” Thus. If the NLRC denies the motion. Section 2. and (2) a bond in a reasonable amount is posted.930 surety bond did not render the Labor Arbiter’s 30 October 2008 Decision final and executory. expeditious and inexpensive resolution and settlement of labor disputes. . the Labor Code of the Philippines and other relevant legislations. Rule VII of the Rules. The Rules of Procedure of the NLRC allows the filing of a motion to reduce bond subject to two conditions: (1) there is meritorious ground. the appellant always runs the risk of failing to perfect an appeal. “These Rules shall be liberally construed to carry out the objectives of the Constitution. theories. Article I of the Rules of Procedure of the NLRC states that. then the appeal is perfected.of law. and to assist the parties in obtaining just. and arguments not brought to the attention of the Court of Appeals need not — and ordinarily will not — be considered by this Court.” In order to give full effect to the provisions on motion to reduce bond. If the NLRC denies the motion. at the time of the filing of the motion to reduce bond and posting of a bond in a reasonable amount.562. to do so would be tantamount to a denial of respondent’s right to due process. If the NLRC grants the motion for reconsideration and rules that there is indeed meritorious ground and that the amount of the bond posted is reasonable. Obviously. there is no assurance whether the appellant’s motion is indeed based on “meritorious ground” and whether the bond he or she posted is of a “reasonable amount. then the appeal is perfected. Petitioner’s allegation cannot be accepted by this Court on its face. If the NLRC grants the motion and rules that there is indeed meritorious ground and that the amount of the bond posted is reasonable. the appellant must be allowed to wait for the ruling of the NLRC on the motion even beyond the 10day period to perfect an appeal. The filing of a motion to reduce bond and compliance with the two conditions stop the running of the period to perfect an appeal.

Court of Appeals. exhibited willingness to pay by posting a partial bond. and (3) special circumstances of the case combined with its legal merits. The Court held that. Inc.”28A Aside from posting a partial bond. at the very least. KJ Commercial filed a motion for reconsideration and posted the full P2. .562. the rule that the filing of a motion to reduce bond shall not stop the running of the period to perfect an appeal is not absolute.930 surety bond. (2) prevention of miscarriage of justice or of unjust enrichment. while his motion to reduce appeal bond was pending before the NLRC.”27 In the present case. In any case. When the NLRC denied its motion. KJ Commercial showed willingness to post a partial bond. In Ong. Inc. however. v. has relaxed this requirement under certain exceptional circumstances in order to resolve controversies on their merits. “While the bond requirement on appeals involving monetary awards has been relaxed in certain cases.000 cash bond. an appeal from a decision involving a monetary award may be perfected only upon the posting of a cash or surety bond.000 cash bond. The Court.26 the Court held that the bond requirement on appeals may be relaxed when there is substantial compliance with the Rules of Procedure of the NLRC or when the appellant shows willingness to post a partial bond.In the present case. The NLRC then granted the motion for reconsideration. the Court held that. In fact.22 the Court held: Jurisprudence tells us that in labor cases. it posted a P50. These circumstances include: (1) fundamental consideration of substantial justice. “Petitioner in the said case substantially complied with the rules by posting a partial surety bond of fifty thousand pesos issued by Prudential Guarantee and Assurance. KJ Commercial filed a motion to reduce bond and posted a P50. and the amount and the issue involved. In Intertranz Container Lines. this can only be done where there was substantial compliance of the Rules or where the appellants. KJ Commercial immediately posted the full amount of the bond when it filed its motion for reconsideration of the NLRC’s 9 March 2009 Decision.23 In Ong v. The Court may relax the rule. Bautista.

* EMERENCIANA WOOD. EVELYN REYES. workers Marialy O. while Susan de Leon (Susan) is the owner/proprietress of Weesan Garments (Weesan).) On February 5. PRISCILLA* ESPINEDA.* GEMMA DELA PEÑA. Vivencia Penullar. MARLON FALLA. AMELIA PESCADERO. EVA AYENG. Gemma dela Peña and Efremia Matias filed with the Arbitration Branch of the NLRC a Complaint for underpayment and/or nonpayment of wages. EDNA YAP.ART 224 MARIALY O. TEODORA VENTURA. the rest of the other workers also filed similar complaints. On December 23. LYDIA PENNULAR. EVA* MANDURIAGA. the complaining 34 workers (the workers) are sewers. VS. Gina Aniano. VIVENCIA PENULLAR. Weesan filed before DOLE-NCR a report on its temporary closure for a period of not less than six months. EFREMIA* MATIAS. TRINIDAD RELOX. SIONY CASILLAN. MYRNA TAMIN. 2002. ROSALINDA PARUNGAO. ARACELI? RUAZA. MARICEL OCON. 2003. overtime pay. As the workers . helpers. Sy. CARMEN PORTUGUEZ. RIZA* DELA CRUZ ZUÑIGA. SY. AND ELVIRA MACAPAGAL. LYDIA DE GUZMAN. INC. All the cases were consolidated (same cause of action. Aurora Aguinaldo. HERMINIA HERNANDEZ. GINA ANIANO. OLIVIA ABUAN. FAIRLAND KNITCRAFT CO. a guard and a secretary who were hired by Weesan. LUZVIMINDA GABUYA. In January 2003. 13th month pay and other monetary benefits against Susan/Weesan. 2011] The issues of labor-only contracting and the acquisition of a labor tribunal of jurisdiction over the person of a respondent are the matters up for consideration in these consolidated Petitions for Review on Certiorari. premium pay for holidays. NANCY FERNANDEZ. FACTS: Fairland is a domestic corporation engaged in garments business. CONSOLACION SERRANO. REGINA RELOX. ROSARIO BALUNSAY. On the other hand.. [December 12. trimmers. AURORA AGUINALDO.

2003.m. On the next hearing on April 28. Geronimo) appeared as counsel for Weesan and requested for an extension of time to file his client's position paper. another pleading entitled Amended Complaints and Position Paper for Complainants. Atty. the workers filed a Reply. Geronimo filed two separate position papers . at 10:00 a. and on March 13. Atty. The Position Paper for Fairland was verified by Debbie while the one for Weesan was verified by Susan. Geronimo also entered his appearance for Fairland and again requested for an extension of time to file position paper.one for Fairland and another for Susan/Weesan. Debbie Manduabas (Debbie). The decision of LA Reyes was set aside and the dismissal of complainants illegal. On May 16. unpaid . Antonio A. to include the charge of illegal dismissal and impleaded Fairland and its manager. the workers submitted their Rejoinder. Fairland was ordered to reinstate complainants to their position with full back wages with legal interests from until actual reinstatement and full payment. Atty. [* Take Note of the following FACTS:] A Notice of Hearing was sent to Weesan requesting it to appear before Labor Arbiter Ramon Valentin C. Geronimo (Atty. 2003. On November 25. 2003 LA REYES dismissed the complaint for lack of merit and ordered respondents to pay each complainant P5.000 by way of financial assistance. Reyes (LA REYES) on April 3. as additional respondent. Geronimo then filed a Consolidated Reply verified both by Susan and Debbie. 2003 an Amended Complaint. To these pleadings. 2003. NLRC RULING: Petition granted. Atty. they filed on February 18. Petitioners appealed to NLRC. On said date and time. 26. 2003. Ruling of the Labor Arbiter On Nov. 2003.were not anymore allowed to work on that same day. with retention of seniority rights and to pay solidarily with WEESAN the difference of their unpaid wages.

unpaid 13th month pays anf unpaid service incentive leave with legal interest.holidays.R. FAIRLAND is not liable to workers since Weesan is not a mere labor-only contractor but a bona fide independent contractor. to pay solidarily their respective separation pay. Maambong from handling the case. Atty. and ruled that NLRC did not acquire jurisdiction over the person of FAIRLAND. 93860 CA’S RULING on FAIRLAND = CA-G. In effect it annulled and set aside the decision of the NLRC and its resolution insofar as Fairland is concerned. CA denied Fairland’s petition. Meanwhile Fairland filed another MR through Atty. 93204 (Now under Atty. 2007. And in the event that reinstatement is not possible. Geronimo filed a Motion for Reconsideration. It also denied that it engaged the services of atty. . Melina Tecson assailing the jurisdiction of the LA and the NLRC over it (fairland). On May 9.R. and assuming they did. the case was duly transferred to CA’s Special Ninth Division for the resolution of Fairland’s MR. 2008. attend or participate in all the proceedings conducted. respectively. Geronimo. SP No. Tecson) SUSAN/ WEESAN (Contesting solidary liability)= CA-G. It affirmed NLRC’s ruling that the workers were illegally dismissed and that Weesan and Fairland were solidarily liable to them as labor-only contractor and principal. Fairland and Susan filed their separate petitions for Certiorari before CA. 8. 2007. NLRC DENIED BOTH MOTIONS! Thus. On Nov. SP No. • Thus the WORKERS filed a petition for review on certiorari to SC. FAIRLAND (Contesting solidary liability) = CA-G.R. Fairland was likewise ordered to pay 10% of the gross award as and by atty’s fees. Librea-Leagogo and Regalado E. SP No. 93204: On July 25. Fairland filed its MR and a Motion for Voluntary Inhibition of Assoc Justices Celia C. claiming it was never summoned to appear. CA’s Special 9th Division reversed the 1st Division’s Ruling.

Susan also avers that the CA erred in ruling that Weesan was guilty of illegal dismissal. The Court resolved and ordered the Consolidation of SUSAN’s petition with that of the WORKERS. SP No..CA’S RULING on SUSAN/WEESAN= CA-G. CA Denied. In fact. SUSAN’S ARGUMENT: Susan insists that CA erred in ruling that Weesan is a labor-only contractor finding Fairland as the owner of the workplace. 189658 (SUSAN’S PETITION for REVIEW): 1. ISSUES on GR No.R. She maintains that the termination of the workers was due to financial losses suffered by Weesan. SUSAN filed a petition for review on certiorari. She maintained that the place is owned by De Luxe Shirt Factory and not by Fairland. On July 20. The Decision and Resolution of NLRC were AFFIRMED AND UPHELD. 2009. Fairland and Susan filed their respective MRs. CA erred in finding Susan a labor-only contractor acting as an agent for Fairland. 2. CA erred in finding that private respondents were illegally dismissed. Weesan submitted its Establishment Termination Report with the DOLE-NCR and same was duly received by the latter. THUS. ( In effect sole liablity for all the workers’ claims is cast to Susan/Weesan) Susan moved for Reconsideration. . Consequently Susan’s Petition for review on certiorari was reinstated in the interest of justice and to harmonize the Court’s ruling in the case. 93860: On May 11. 2006 CA 9th Division issued a Resolution. which was initially DENIED by SC for failure to sufficiently show any reversible error in the judgment. the Special 8th Division of CA resolved the case and was Denied Due Course and accordingly Dismissed for lack of merit. • Hence. temporarily Restraining the NLRC from enforcing its assailed Decision and thereafter CA 8th Division issued a writ of preliminary prohibitory injunction.

The Workers' Arguments The workers claim that Weesan is a labor-only contractor because it does not have substantial capital or investment in the form of tools. consequently. equipment. 182915 ( Issues which the Worker’s raised): 1. W/N Fairland is solidarily liable with Weesan Garment / Susan De Leon? Fairland’s Position: It contests NLRC’s jurisdiction over the person of Fairland through service of summons or voluntary appearance. the workers were actually its (Weesan's) employees. 2. W/N NLRC’s decision became final and executory. W/N NLRC acquired jurisdiction over the person of FAIRLAND. Likewise emphasizes that when it filed its Motion for Reconsideration with the NLRC. it made an express reservation that the same was without . *Fairland's Arguments (Relative topic/issue Art. that it is a separate and distinct business entity from Weesan. It denies that It engaged the services of Atty. machineries. 224 LC) Fairland maintains that it was never served with summons to appear in the proceedings before the Labor Arbiter nor furnished copies of the Labor Arbiter's Decision and Resolution on the workers' complaints for illegal dismissal. Geronimo and asserts that it has its own legal counsel. hence. Geronimo. ISSUES ON GR NO. Hence. Atty. Tecson. and 3. the workers have no cause of action against Fairland. Weesan should be considered as a mere agent of Fairland. that Weesan is a legitimate job contractor. and that the workers it recruited are performing activities which are directly related to the garments business of Fairland. and that. who shall be responsible to the workers as if they were directly employed by Fairland. that it never voluntarily appeared before the labor tribunals through Atty. among others. and work premises.

HELD: We grant the workers' petition (G.R. it owned and possessed any other tools. In the absence. work or service for a principal. work premises. work premises. In labor-only contracting. 182915) but deny the petition of Susan (G.R. The workers alleged that the work . Likewise significant is the fact that there is doubt as to who really owns the work premises occupied by Weesan. "There is labor-only contracting when the contractor or subcontractor merely recruits. majority of whom are sewers. Hence. Weesan was unable to show. the following elements are present: (a) The person supplying workers to an employer does not have substantial capital or investment in the form of tools. 189658). SC found nothing to show that Weesan has investment in the form of tools. equipment. The records show that Fairland had to furnish Weesan with sewing machines. machineries. of a valid service of summons or voluntary appearance. equipment. among others. Fairland cannot be held solidarily liable with Susan/Weesan. and machineries necessary to its being a contractor or sub-contractor for garments. Susan/Weesan is a mere labor-only contractor. were recruited by Susan/Weesan and that they performed activities which are directly related to Fairland's principal business of garments. Neither was Weesan able to prove that it has substantial capital for its business. machineries. Also. equipment. No. therefore. No. there is no question that the workers."[55] Here. the proceedings conducted and the judgment rendered by the labor tribunals are null and void as against it. 1.prejudice to its right to question the jurisdiction over its person and the binding effect of the assailed decision. What must be determined is whether Susan/Weesan has substantial capital or investment in the form of tools. supplies or places workers to perform a job. and (b) The workers recruited and placed by such person are performing activities which are directly related to the principal business of the employer. equipment or machineries. among others.

the rent for the factory premises is already deemed included therein since the contracts of lease she entered into with De Luxe referred to both the factory premises and machineries. was not included in the entry for rent expenses in Weesan's financial statement.. find this ^ contention implausible. there is no competent proof it paid the supposed rentals to said `owner'. In an attempt to prove that it is De Luxe and not Fairland which owned the work premises. only equipment rental was listed therein without any disbursement/expense for rental of factory premises. and. Hence. was not in the business of renting properties. Tondo. for which Susan even went to the extent of executing a contract with the purported lessor. belonged to Fairland. Susan attached to her petition the following: (1) a plain copy of Transfer Certificate of Title (TCT) No.” Susan contests this pronouncement by pointing out that although only sewing machines were specified under the entry "Rent Expenses" in its financial statement. 715 Ricafort St. (2) Real Property Tax receipts issued to De Luxe for the years 2000-2004. the Court finds these documents wanting. The logical conclusion now is that Weesan does not have its own workplace and is only utilizing the workplace of Fairland to whom it supplied workers . Manila. We went over the said contracts of lease and noted that same were principally for the lease of the premises. Inc. under the item `Rent Expenses' in its audited financial statement.premises utilized by Weesan is owned by Fairland. CA’s Eighth Division observation on the matter: “The work premises are likewise owned by Fairland. we cannot see why the rentals for the work premises. which significantly.. De Luxe Shirt Factory Co. 139790 and Declaration of Real Property both under the name of De Luxe. However. however. We. which only buttressed the claim of private respondents that the place where they reported to and performed sewing jobs for petitioner [Susan] and Fairland at No. However. Only incidental thereto is the inclusion therein of the equipment found in said premises. Curiously. which petitioner tried to disprove by presenting a purported Contract of Lease with another entity.

whichever is higher. that the employees affected have been given separation pay equivalent to ½ month pay for every year of service or one month pay. 283. However. to wit: a) that the closure/cessation of business is bona fide. b) that written notice was served on the employees and the DOLE at least one month before the intended date of closure or cessation of business. As Susan/Weesan was not able to adduce evidence that Weesan had any substantial capital." "The decision to close business [or to temporarily suspend operation] is a management prerogative exclusive to the employer." Here. Article 283of the Labor Code allows as a mode of termination of employment the closure or termination of business. To negate illegal dismissal. "Closure or cessation of business is the complete or partial cessation of the operations and/or shut-down of the establishment of the employer. The National Labor Relations Commission and the Court of Appeals did not err in their findings of illegal dismissal. investment or assets to perform the work contracted for.for its garment business. the presumption that Weesan is a labor-only contractor stands. and c) in case of closure/cessation of business not due to financial losses. except only when the employer fails to prove compliance with the requirements of Art.. the exercise of which no court or tribunal can meddle with.e. SC is mindful . Weesan filed its Establishment Termination Report allegedly due to serious business losses and other economic reasons. It is carried out to either stave off the financial ruin or promote the business interest of the employer. i. its purpose is to advance the interest of the employer and not to defeat or circumvent the rights of employees under the law or a valid agreement. Susan relies on the due closure of Weesan pursuant to the Establishment Termination Report it submitted to the DOLENCR. 2. Indeed.

R. same deserves scant consideration. "The burden of proving that x x x a temporary suspension is bona fide falls upon the employer. did not err in their findings that the workers were illegally dismissed by Susan/Weesan. the Income Tax Returns for the years 2000. According to Fairland. Absent anything to support Fairland's claim. when Weesan filed its Establishment Termination Report on February 5.of the doubtful character of Weesan's application for closure given the circumstances surrounding the same. This is the reason why the workers on February 18. 2003. it already closed the work premises and did not anymore allow them to report for work. The same holds true with Weesan's audited financial statements. Second. the Court notes that the records are bereft of anything that provides for such alleged contractual relationship and the period covered by it. Therefore. However. contain no signature or initials of the receiving officer. the NLRC and the CA. Weesan filed with the DOLE-NCR its Establishment Termination Report merely eight days after the filing of the last complaint of the workers. . 2001 and 2002 attached to the Establishment Termination Report." Clearly here. First. Susan/Weesan was not able to discharge this burden. in CA-G. there was no showing that Weesan served upon the workers written notice at least one month before the intended date of closure of business. Also hard to ignore is the absence of the mandatory 30-day prior notice to the workers. 93860. Fairland asserts that onl six out of the 34 workers-complainants. these six workers were the only ones who were in the employ of Weesan at the time Fairland and Weesan had existing contractual relationship in 1996 to 1997. Third. 283 of the Labor Code. This engenders doubt as to whether these documents were indeed filed with the proper authorities. SP No. Fairland's claim of prescription deserves scant consideration. 2003 amended their complaint to include the charge of illegal dismissal. 3. as required under Art. Weesan failed to satisfactorily explain why the Income Tax Returns and financial statements it submitted do not bear the signature of the receiving officers. In fact.

Fairland and Debbie were indeed never summoned by the Labor Arbiter. 2003 when it is now claiming that its contractual relationship with the latter only lasted until 1997? Thus. True to their claim. It can be recalled that the workers' original complaints for non-payment/ underpayment of wages and benefits were only against Susan/Weesan.Interestingly. we noticed Fairland's letter dated January 31. National Labor Relations Commission.R. However. scanned the records but found nothing to indicate that summons with respect to the said amended complaints was ever served upon Weesan. The crucial question now is: Did Fairland and Debbie voluntarily appear before the Labor Arbiter as to submit themselves to its jurisdiction? Fairland argued before the CA that it did not engage Atty. No. We have. The workers thereafter amended their then already consolidated complaints to include illegal dismissal as an additional cause of action as well as Fairland and Debbie as additional respondents." Although not served with summons. the Court held in Santos v. jurisdiction over Fairland and Debbie was acquired through their voluntary appearance. we find the contentions rather abstruse. or Fairland. Assuming said letter to be true." However. the court can still acquire jurisdiction over the person of the defendant by virtue of the latter's voluntary appearance. 182915 (jurisdiction of LA and NLRC over Fairland) *** ART 224 LC!! "It is basic that the Labor Arbiter cannot acquire jurisdiction over the person of the respondent without the latter being served with summons. 2003 informing Weesan that it would temporarily not be availing of the latter's sewing services and at the same time requesting for the return of the sewing machines it lent to Weesan. 4. the . Geronimo as its counsel. petitioner Santos reiterates that he should not have been adjudged personally liable by public respondents. the Labor Arbiter issued summons to Susan/Weesan. why was Fairland terminating Weesan's services only on January 31. "if there is no valid service of summons. For these complaints. viz: In the instant petition for certiorari. G. Susan.

As held in Santos. Susan/Weesan. It may be made not only by actual physical appearance but likewise by the submission of pleadings in compliance with the order of the court or tribunal. Moreover. such procedural modes. Geronimo again asked for another extension to file a position paper for all the respondents considering that he likewise entered his appearance for Fairland. it is unlikely that Atty. however. Geronimo would . need not be proved in writing. To say that petitioner did not authorize Atty. Being then newly hired. are liberally construed in quasi-judicial proceedings. such fact could [be] inferred from circumstantial evidence. jurisdiction over the person of the defendant in civil cases is acquired not only by service of summons but also by voluntary appearance in court and submission to its authority. 2003. coupled with his subsequent active participation in the proceedings. said counsel filed pleadings such as Respondents' Position Paper and Respondents' Consolidated Reply on behalf of all the respondents namely. substantial compliance with the same being considered adequate. The fact that Atty. `Appearance' by a legal advocate is such `voluntary submission to a court's jurisdiction'. Perez has been able to timely ask for a deferment of the initial hearing on 14 November 1986. Petitioner's contention is unacceptable. The fact that Atty. it might be pointed out. Geronimo first entered his appearance on behalf of Susan/Weesan in the hearing held on April 3. he requested for an extension of time within which to file a position paper for said respondents. Geronimo entered his appearance for Fairland and Debbie and that he actively defended them before the Labor Arbiter raised the presumption that he is authorized to appear for them. Romeo B. it appears that Atty. Although as a rule. modes of service of summons are strictly followed in order that the court may acquire jurisdiction over the person of a defendant. Thereafter. On the next scheduled hearing.latter not having validly acquired jurisdiction over his person whether by personal service of summons or by substituted service under Rule 19 of the Rules of Court. Fairland and Debbie. x x x From the records. Perez to represent him in the case is to unduly tax credulity. Atty. should disprove the supposed want of service of legal processes. The employment of a counsel or the authority to employ an attorney.

As Atty. 8. As an officer of the Court. did not voluntarily submit itself to the Labor Arbiter's jurisdiction.An attorney appearing for a party is presumed to be properly authorized for that purpose. Moreover. which is the rules prevailing at that time. Rule 138 of the Rules of Court. APPEARANCES. Such mere filing is not proof of Atty. states in part: SECTION 8. Geronimo's alleged unauthorized appearance. Geronimo. Sec. Suffice it to say that an attorney's presumption of authority is a strong one. is insufficient to overcome the . "[i]t strains credulity that a counsel who has no personal interest in the case would fight for and defend a case with persistence and vigor if he has not been authorized or employed by the party concerned. Geronimo consistently indicated his PTR and IBP numbers in the pleadings he filed. Sec. in the absence of a compelling reason. . the Labor Arbiter is primarily bound by the latter one. he shall be required to indicate in his pleadings his PTR and IBP numbers for the current year.have been so irresponsible as to represent Fairland and Debbie if he were not in fact authorized. "A mere denial by a party that he authorized an attorney to appear for him. *Although we note that Fairland filed a disbarment case against Atty. we hold that the same is not sufficient to overcome the presumption of authority. the NLRC Rules of Procedure being specifically applicable to labor cases. there is no reason for the Labor Arbiter not to extend to Atty. 21. However. through Atty. Geronimo due to the former's claim of unauthorized appearance. Geronimo the presumption that he is authorized to represent Fairland. Geronimo is presumed to have acted with due propriety." We do not agree with the reasons relied upon by the CA's Special Ninth Division when it ruled that Fairland. Rule III of the New Rules of Procedure of the NLRC. The presumption of authority of counsel to appear on behalf of a client is found both in the Rules of Court and in the New Rules of Procedure of the NLRC. Atty. Between the two provisions providing for such authority of counsel to appear.

orders or awards. 2005 NLRC Resolution denying the motions for reconsideration of its November 30. Sunrise Manning Agency we held that: The case of PNOC Dockyard and Engineering Corporation vs. It then quoted Article 224 of the Labor Code as follows: ARTICLE 224. NLRC cited by petitioner enunciated that `in labor cases. motu proprio or on motion of any interested party. it shall be the duty of the responsible officer to separately furnish immediately the counsels of record and the parties with copies of said decision. decision or resolution unlike in ordinary proceedings where notice to counsel is deemed notice to the party. both the party and its counsel must be duly served their separate copies of the order. Execution of decisions. decision or resolution.presumption. In any case. requiring a sheriff or a duly deputized officer to execute or enforce final decisions. orders or awards. the Commission. the CA likewise emphasized that in labor cases. Failure to comply with the duty prescribed herein shall subject such responsible officer to appropriate administrative sanctions x x x The CA then concluded that since Fairland and its counsel were not separately furnished with a copy of the August 26. Citing PNOC Dockyard and Engineering Corporation v. the Labor Arbiter or Med-Arbiter. . issue a writ of execution on a judgment within five (5) years from the date it becomes final and executory. We cannot agree. or med-arbiter or voluntary arbitrator may. the Commission or any Labor Arbiter. said Decision cannot be enforced against Fairland. National Labor Relations Commission. or Voluntary Arbitrators. has not attained finality. In Ginete v. 2004 Decision which held Susan/Weesan and Fairland solidarily liable to the workers. said November 30. unlike in ordinary judicial proceedings where notice to counsel is deemed notice to . both the party and his counsel must be duly served their separate copies of the order. orders or awards of the Secretary of Labor and Employment or [R]egional Director." such as in the present case. 2004 Decision. The CA likewise concluded that because of this.(a) the Secretary of Labor and Employment or any Regional Director. especially when the denial comes after the rendition of an adverse judgment.

Article 224 contemplates the furnishing of copies of `final decisions. More importantly. Rule 13 of the 1997 Rules of Civil Procedure analogously provides that if any party has appeared by counsel. we do not see any cogent reason why the same rule should not apply to petitions for certiorari filed with the Court of Appeals from decisions of the NLRC. the same shall be counted from receipt of such decisions. as amended. or resolution sought to be assailed'. This procedure is in line with the established rule that notice to counsel is notice to party and when a party is represented by counsel. states that the `petition may be filed not later than sixty (60) days from notice of the judgment. service upon him shall be made upon his counsel. Article 224 of the Labor Code does not govern the procedure for filing a petition for certiorari with the Court of Appeals from the decision of the NLRC but rather. Section 4 of Rule 65. NLRC. Rule III of the New Rules of Procedure of the NLRC expressly mandates that For the purposes of computing the period of appeal. It is to be noted also that Section 7 of the NLRC Rules of Procedure provides that `(A)ttorneys and other representatives of parties shall have authority to bind their clients in all matters of procedure'' a provision which is similar to Section 23. Section 4. awards or orders by the counsel of record. Taken in proper context. notices should be made upon the counsel of record at his given address to which notices of all kinds emanating from the court should be sent. orders or awards' and could not have been intended to refer to the period for computing the period for appeal to the Court of Appeals from a non-final judgment or order. orders or awards'. The period or manner of `appeal' from the NLRC to the Court of Appeals is governed by Rule 65 pursuant to the ruling of the Court in the case of St.' Reference was made therein to Article 224 of the Labor Code.' Although this rule explicitly contemplates an appeal before the Labor Arbiter and the NLRC. Martin Funeral Homes vs. . express or implied. Section 2.the party. as correctly pointed out by private respondent in its Comment to the petition. Rule 138 of the Rules of Court. orders or awards' and requires the sheriff or a duly deputized officer to furnish both the parties and their counsel with copies of the decision or award for that purpose. But. to the period to appeal or to file a petition for certiorari as indeed the caption is `execution of decisions. There is no reference. it refers to the execution of `final decisions. Corollarily.

orders or awards. Hence. order or award by the counsel of record pursuant to the established rule that notice to counsel is notice to party. SECOND ASSIGNMENT ARTICLE 217 . the labor-only contractor. In sum. the date of receipt referred to in Sec. we hold that the Labor Arbiter had validly acquired jurisdiction over Fairland and its manager. through the appearance of Atty. if a party is represented by counsel. However. Debbie. Fairland is Weesan's principal. therefore. Fairland. the said NLRC Decision became final. order or award. it necessarily follows that the reckoning period for their finality is likewise the counsel's date of receipt thereof. 5. through the latter's filing of pleadings on their behalf. Thus contrary to the CA's conclusion. Geronimo as their counsel and likewise. 14. same shall be counted from receipt of the decision. orders or awards both to the parties and their counsel in connection with the execution of such final decisions. 10 calendar days after Atty. for the purpose of computing the period for filing an appeal from the NLRC to the CA. Article 224 contemplates the furnishing of copies of final decisions.Weesan. resolutions or orders of the NLRC shall become executory after 10 calendar days from receipt of the same. Rule VII of the then in force New Rules of Procedure of the NLRC which provides that decisions.To stress. Tecson's receipt thereof. is solidarily liable with Susan/Weesan. And since the period for filing of an appeal is reckoned from the counsel's receipt of the decision. refers to the date of receipt by counsel. we declare that Fairland is the principal of the laboronly contractor. for the rightful claims of the employees. as to Fairland. as the principal employer. Viewed in its entirety.

(5) non-payment of service incentive leave. (2) non-payment of holiday pay. . (9) no annual work accidental report. R. LAGUESMA. DAVID MENDOZA.. VILLAFUERTE. WILLIAM PAPSONGAY. (6) underpayment of 13th month pay. No. JR. FIDEL BALANGAY. respondents Carpio J. GEOFREY MINO. REGIONAL DIRECTOR BRENDA A. and (11) no trained first aider. GABRIEL TAMULONG. ORLANDO RILLASE. ALEJO.. THE SECRETARY OF LABOR BIENVENIDO E. (7) no registration. Facts Ex-Bataan Veterans Security Agency. 152396 November 20. 2007 EX-BATAAN VETERANS SECURITY AGENCY. and P. (10) no safety committee. NOLI DIONEDA. HULLARUB. ATONG CENON. ALEXANDER POCDING. petitioner. NOCES.G. C. RICKY DORIA.R. JR. (4) underpayment of night shift differential pay. BUAGEN CLYDE. M. G.. DENNIS EPI. On the same date. (EBVSAI) is in the business of providing security services while private respondents are EBVSAI's employees assigned to the National Power Corporation at Ambuklao Hydro Electric Plant Private respondents led by Alexander Pocding (Pocding) instituted a complaint for underpayment of wages against EBVSAI before the Regional Office of the Department of Labor and Employment (DOLE). SIMPLICIO TELLO. (8) no annual medical report. D. GASTON DUYAO. ANTON PEDRO. the Regional Office issued a notice of hearing requiring EBVSAI and private respondents to attend the hearing on 22 March 1996. (3) non-payment of rest day premium.. Inc. The Regional Office conducted a complaint inspection at the Ambuklao Plant where the following violations were noted: (1) non-presentation of records. vs. TOMMY BAUCAS. INC. FRANCISCO PINEDA. DINTAN.

EBVSAI filed for a petition for certiorari before the Court of Appeals. The Regional Director denied the motion for reonsiconsideration and stated that. The Court of Appeals's ruling . the Director of the Regional Office (Regional Director) issued an Order. Ruling of Secretary of Labor: The Secreatary of Laor affirmed the order of the Regional Director with some Modifications. The secretary of Labor ruled that Pursuant to RA 7730. EBVSAI filed for a motion for reconsideration alleging that the Regional Director does not have jurisdiction over the case since the money claim of each private respondent exceeded P5.On 19 August 1996. The Regional Dorector should have endorsed the case to the labor arbiter.000. pursuant to Republic Act No. The Secretary of Labor or his duly authorized representatives are now empowered to hear and decide. Otherwise. 7730 (RA 7730). in a summary proceeding. 129 in so far as the visitorial and enforcement powers of the Secretary of Labor is concerned is no longer controlling. The EBVSAI filed a motion for reconsideration which was denied by the Secreatary of Labor. any matter involving the recovery of any amount of wages and other monetary claims arising out of employer-employee relations at the time of the inspection. which ordered EX-BATAAN VETERANS SECURITY AGENCY to pay the deficiencies owing to the affected within ten (10) calendar days upon receipt hereof. a Writ of Execution shall be issued.the limitations under Articles 12912 and 217(6)13 of the Labor Code no longer apply to the Secretary of Labor's visitorial and enforcement powers under Article 128(b). the Courts's ruling on the restrictive effect of Art.

A. EBVSAI asserts that the Regional Director should have certified the case to the Arbitration Branch of the National Labor Relations Commission (NLRC) for a full-blown hearing on the merits. Issue Whether the Secretary of Labor or his representatives have jurisdiction over the money claims of private respondent even of it exceeds P5.00. --. has exclusive and original jurisdiction over the case because the individual monetary claim of private respondents exceeds P5.000. 128 of the Labor Code. EBVSAI maintains that under Articles 129 and 217(6) of the Labor Code. not the Regional Director.000. Held The petition has no merit. said provisions of law do not contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor or his duly authorized representatives. and in cases where the relationship of employer-employee still exists. the Labor Arbiter has jurisdiction to hear and decide cases where the aggregate money claims of each employee exceeds P5. 7730) thus: Art. Inc. 128 Visitorial and enforcement power. of Labor.The CA dismissed the petition and affirmed the decision of the Secretary of Labor and adopted the ruling that RA 7730 repealed the jurisdiction limitation imposed by Art. v. Sec. EBVSAI also argues that the case falls under the exception clause in Article 128(b) of the Labor Code. the Labor Arbiter. Rather.x x x (b) Notwithstanding the provisions of Article[s] 129 and 217 of this Code to the contrary. said powers are defined and set forth in Article 128 of the Labor Code (as amended by R. No. we ruled that: While it is true that under Articles 129 and 217 of the Labor Code.000. the Secretary of Labor and Employment or his duly authorized representatives shall have the . In Allied Investigation Bureau. 129 on Art.

Sensing.23 (Italics in the original) This was further affirmed in our ruling in Cirineo Bowling Plaza." In order to divest the Regional Director or his representatives of jurisdiction. In this case. there is a need to examine evidentiary matters.000 because such jurisdiction was exercised in accordance with Article 128(b) of the Labor Code and the case does not fall under the exception clause. and (c) that such matters are not verifiable in the normal course of inspection.24 where we sustained the jurisdiction of the DOLE Regional Director and held that "the visitorial and enforcement powers of the DOLE Regional Director to order and enforce compliance with labor standard laws can be exercised even where the individual claim exceeds P5. (b) that in order to resolve such issues.power to issue compliance orders to give effect to [the labor standards provisions of this Code and other] labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection.000. Inc. v. The rules also provide that the employer shall raise such objections during the hearing of the case or at any time after receipt of the notice of inspection results. the following elements must be present: (a) that the employer contests the findings of the labor regulations officer and raises issues thereon.The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders. . except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. xxxx The aforequoted provision explicitly excludes from its coverage Articles 129 and 217 of the Labor Code by the phrase "(N)otwithstanding the provisions of Articles 129 and 217of this Code to the contrary x x x" thereby retaining and further strengthening the power of the Secretary of Labor or his duly authorized representatives to issue compliance orders to give effect to the labor standards provisions of said Code and other labor legislation based on the findings of labor employment and enforcement officer or industrial safety engineer made in the course of inspection. the Regional Director validly assumed jurisdiction over the money claims of private respondents even if the claims exceeded P5.

the Regional Director and the Secretary of Labor still looked into and considered EBVSAI's documentary evidence and found that such did not warrant the reversal of the Regional Director's order. Inc. 2009 LESLIE OKOL. we DENY the petition.R. The Secretary of Labor also doubted the veracity and authenticity of EBVSAI's documentary evidence. Moreover. G. (Slimmers World) employed petitioner Leslie Okol (Okol) as a management trainee on 15 June 1992.The Court notes that EBVSAI did not contest the findings of the labor regulations officer during the hearing or after receipt of the notice of inspection results. 160146 December 11. and RONALD JOSEPH MOY. the pieces of evidence presented by EBVSAI were verifiable in the normal course of inspection because all employment records of the employees should be kept and maintained in or about the premises of the workplace.Respondents. which in this case is in Ambuklao Plant. 57653. J. But even if this was the case. SLIMMERS WORLD INTERNATIONAL.. INC. SP No.R. the establishment where private respondents were regularly assigned.27 WHEREFORE. Prior to Okol’s dismissal. Petitioner. She rose up the ranks to become Head Office Manager and then Director and Vice President from 1996 until her dismissal on 22 September 1999. The suspension arose from the seizure by the Bureau of Customs of seven Precor . No. Slimmers World preventively suspended Okol. BEHAVIOR MODIFICATIONS. It was only in its supplemental motion for reconsideration before the Regional Director that EBVSAI questioned the findings of the labor regulations officer and presented documentary evidence to controvert the claims of private respondents.: FACTS Slimmers World International operating under the name Behavior Modifications. CARPIO. vs. We AFFIRM the 29 May 2001 Decision and the 26 February 2002 Resolution of the Court of Appeals in CAG.

All other claims were ordered dismissed for lack of factual or legal basis. illegal dismissal. unpaid commissions. However. Okol received a memorandum that her suspension had been extended from 2 September until 1 October 1999 pending the outcome of the investigation on the Precor equipment importation. Okol the received another memorandum from Slimmers World requiring her to explain why no disciplinary action should be taken against her in connection with the equipment seized by the Bureau of Customs. Through a letter dated 22 September 1999 signed by its president Ronald Joseph Moy (Moy)./Slimmers World International to reinstate complainant Leslie F. Respondents asserted that the NLRC had no jurisdiction over the subject matter of the complaint. Inc. . On 2 September 1999. Inc. The NLRC ordered respondent Behavior Modification. Slimmers World found Okol’s explanation to be unsatisfactory. Slimmers World terminated Okol’s employment. The labor arbiter ruled that Okol was the vice-president of Slimmers World at the time of her dismissal. Behavior Modifications. with prayer for reinstatement and payment of backwages. Respondents filed a Motion to Dismiss the case with a reservation of their right to file a Position Paper at the proper time. In a Resolution dated 29 May 2001. damages and attorney’s fees. The ruling of the NLRC Okol filed an appeal with the NLRC. Since it involved a corporate officer. The ruling if the Labor Arbiter The labor arbiter granted the motion to dismiss. a fraction of at least six months considered one whole year. the NLRC reversed and set aside the labor arbiter’s order. should reinstatement be not feasible separation pay equivalent to one month pay per year of service is awarded. Okol to her former position with full back wages plus indemnity.elliptical machines and seven Precor treadmills belonging to or consigned to Slimmers World. and Moy (collectively called respondents) for illegal suspension. the dispute was an intra-corporate controversy falling outside the jurisdiction of the Arbitration branch. Okol filed in the Arbitration branch of the NLRC against Slimmers World.

by itself. the NLRC not only decided the case on the merits but did so in the absence of position papers from both parties. the instant petition. ISSUE The issue is whether or not the NLRC has jurisdiction over the illegal dismissal case filed by petitioner. The Court of Appeals ruled that the case. the NLRC denied the motion for lack of merit. Hence. However. HELD The Court’s Ruling The petition lacks merit. Mere title or designation in a corporation will not. In a Resolution8 dated 21 December 2001. Petitioner insists that the Court of Appeals erred in ruling that she was a corporate officer and that the case is an intra-corporate dispute falling within the jurisdiction of the regular courts.Respondents filed a Motion for Reconsideration with the NLRC. The Ruling of the Court of Appeals The appellate court set aside the NLRC’s Resolution dated 29 May 2001 and affirmed the labor arbiter’s Order dated 20 March 2000. Okol filed a Motion for Reconsideration which was denied by the CA. Petitioner asserts that even as vicepresident.10 The appellate court added that the NLRC had acted without jurisdiction in giving due course to the complaint and deprived respondents of their right to due process in deciding the case on the merits. the work that she performed conforms to that of an employee rather than a corporate officer. being an intra-corporate dispute. falls within the jurisdiction of the regular courts pursuant to Republic Act No. Respondents then filed an appeal with the Court of Appeals. . Respondents contended that the relief prayed for was confined only to the question of jurisdiction. 8799. determine the existence of an employer-employee relationship.

Thus. the Vice-President shall be elected by the Board of Directors from [its] own members. Qualifications and Election – The general management of the corporation shall be vested in a board of five directors who shall be stockholders and who shall be elected annually by the stockholders and who shall serve until the election and qualification of their successors. Vice-President – Like the Chairman of the Board and the President. having shown that an employer-employee relationship exists. xxx Article III Officers xxx 4. which facts provide further basis that petitioner’s separation from Slimmers World does not come under the NLRC’s jurisdiction. on the other hand.12 we held that an "office" is created by the charter of the corporation and the officer is elected by the directors or stockholders. NLRC. the jurisdiction to hear and decide the case is vested with the labor arbiter and the NLRC. Respondents assert that petitioner was not only an officer but also a stockholder and director. an "employee" usually occupies no office and generally is employed not by action of the directors or stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee. The relevant portions of the Amended By-Laws of Slimmers World which enumerate the power of the board of directors as well as the officers of the corporation state: Article II The Board of Directors 1. Respondents. In Tabang v. The Vice-President shall be vested with all the powers and authority and is required to perform all the duties of the President during the absence of the latter for any cause. maintain that petitioner was a corporate officer at the time of her dismissal from Slimmers World as supported by the General Information Sheet and Director’s Affidavit attesting that petitioner was an officer. . Even the alleged absence of any resolution of the Board of Directors approving petitioner’s termination does not constitute proof that petitioner was not an officer. On the other hand.

69893. officers or managers of such corporations. The question of remuneration involving a stockholder and officer. from the documents submitted by respondents. we have held that a corporate officer’s dismissal is always a corporate act. which took effect on 8 August 2000. The charges of illegal suspension. Prior to its amendment. xxx Clearly. partnerships or associations. trustees. 8799. We AFFIRM the 18 October 2002 Decision and 22 September 2003 Resolution of the Court of Appeals in CAG. not a mere employee. This Decision is without prejudice to petitioner Leslie . illegal dismissal. Section 5 of Republic Act No. transferred to regional trial courts the SEC’s jurisdiction over all cases listed in Section 5 of PD 902-A: 5. Subsection 5. petitioner was a director and officer of Slimmers World. or an intra-corporate controversy which arises between a stockholder and a corporation. WHEREFORE.2.20 The determination of the rights of a director and corporate officer dismissed from his employment as well as the corresponding liability of a corporation. In a number of cases.2. It is a settled rule that jurisdiction over the subject matter is conferred by law.R. we DENY the petition. Thus. The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. the appellate court correctly ruled that it is not the NLRC but the regular courts which have jurisdiction over the present case. if any. reinstatement and back wages imputed by petitioner against respondents fall squarely within the ambit of intracorporate disputes. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court. is an intra-corporate dispute subject to the jurisdiction of the regular courts. SP No. unpaid commissions.The Vice-President will perform such duties as the Board of Directors may impose upon him from time to time. intra-corporate disputes fall within the jurisdiction of the Securities and Exchange Commission (SEC) which shal include: c) Controversies in the election or appointments of directors. is not a simple labor problem but a matter that comes within the area of corporate affairs and management and is a corporate controversy in contemplation of the Corporation Code.

MARY CHRISTINE A. and other flight attendants of PHILIPPINE AIRLINES. J. flight stewards and pursers of respondent. CYNTHIA A. a labor organization certified as the sole and exclusive certified as the sole and exclusive bargaining representative of the flight attendants. and demanded for an equal treatment with their male counterparts. Respondent. VILLARETE. vs. PHILIPPINE AIRLINES INCORPORATED. Respondent and FASAP entered into a Collective Bargaining Agreement3 incorporating the terms and conditions of their agreement for the years 2000 to 2005.R. ROSE ANNA G. LORNA B. SANTIAGO. VICTA. 172013 October 2. NOEMI R. 1996. The said CBA provided that subject to the grooming standards of the agreement. 2009 PATRICIA HALAGUEÑA. PULIDO. ANGELITA L. MARIANNE V. CABALQUINTO. hereinafter referred to as PAL-FASAP CBA. CRESENCIO. They are members of the Flight Attendants and Stewards Association of the Philippines (FASAP).: FACTS Petitioners were employed as female flight attendants of respondent Philippine Airlines (PAL) on different dates prior to November 22. MA. No. MA. TERESITA P. This demand was reiterated in a letter by petitioners' counsel addressed to . BERNADETTE A. Petitioners and several female cabin crews manifested that the aforementioned CBA provision on compulsory retirement is discriminatory. PERALTA. STEHMEIER. G.Okol’s taking recourse to and seeking relief through the appropriate remedy in the proper forum. KATINDIG. the compulsory retirement of the Cabin Attendants hired before 22 November 1996 shall be fifty-five (55) for females and sixty (60) for males. Petitioners. TUGAS.

The ruling of the RTC The RTC issued an Order upholding its jurisdiction over the present case. the thrust of the Petition is allegedly discriminatory as it discriminates against female flight attendants. be annuled and set aside for having been issued without and/or with grave abuse of discretion amounting to lack of jurisdiction. The allegations in the Petition do not make out a labor dispute arising from employer-employee relationship as none is shown to exist. this case seeks a declaration of the nullity of the questioned provision of the CBA. In the instant case. 04-886. which denied its objection to its jurisdiction. in violation of the Constitution. orders and processes it has so far issued therein are ANNULED and SET ASIDE. 2004. consequently. which is within the Court's competence.respondent demanding the removal of gender discrimination provisions in the coming re-negotiations of the PAL-FASAP CBA. petitioners filed a Special Civil Action for Declaratory Relief with Prayer for the Issuance of Temporary Restraining Order and Writ of Preliminary Injunction with the Regional Trial Court (RTC) of Makati City. . 2004. The Ruling of the Court of Appeals According to the CA the respondent court has NO JURISDICTION OVER THE CASE BELOW and. the Labor Code. all the proceedings. Part A of the PALFASAP CBA pending the resolution of the case. the RTC issued an Order11 directing the issuance of a writ of preliminary injunction enjoining the respondent or any of its agents and representatives from further implementing Sec. 144. nor does it involve a claim against the respondent. The respondent filed a Petition for Certiorari and Prohibition with Prayer for a Temporary Restraining Order and Writ of Preliminary Injunction with the Court of Appeals (CA) praying that the order of the RTC. On July 29. and the CEDAW. On September 27. Rather. Respondent court is ordered to DISMISS its Civil Case No. This case is not directed specifically against respondent arising from any act of the latter.

the labor arbiter or the National Labor Relations Commission (NLRC) has no jurisdiction over the case.14 In the case at bar.ISSUE Whether the RTC has jurisdiction over the petitioners' action challenging the legality or constitutionality of the provisions on the compulsory retirement age contained in the CBA between respondent PAL and FASAP. tribunal. as the controversy partakes of a labor dispute. The RTC has no jurisdiction over the subject matter of petitioners' petition for declaratory relief because the Voluntary Arbitrator or panel of Voluntary Arbitrators have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the CBA. with the male cabin attendants of Philippine Airlines. The dispute concerns the terms and conditions of petitioners' employment in PAL. within the specific context of this case. Article II. the allegations in the petition for declaratory relief plainly show that petitioners' cause of action is the annulment of Section 144. Presidential Decree No. 2) have the statutory right to equal work and employment opportunities with men under Article 3. 442. alleges that the labor tribunals have jurisdiction over the present case. The petition is meritorious. specifically their retirement age. The allegations in the petition provides that they 1.) have the constitutional right to fundamental equality with men under Section 14. Jurisdiction of the court is determined on the basis of the material allegations of the complaint and the character of the relief prayed for irrespective of whether plaintiff is entitled to such relief. person or body exercising judicial or quasi-judicial functions. and that it is unlawful. Part A of the PAL-FASAP CBA. Respondent. HELD Petitioners submit that the RTC has jurisdiction in all civil actions in which the subject of the litigation is incapable of pecuniary estimation and in all cases not within the exclusive jurisdiction of any court. The RTC has the power to adjudicate all controversies except those expressly witheld from the plenary powers of the court. The Labor Code and. The issue involved is constitutional in character. on the other hand. 1987 of the Constitution. .

differentiate or classify cabin attendants on the basis of sex and thereby arbitrarily set a lower compulsory retirement age of 55 for Petitioners. a court of general jurisdiction. i. "CEDAW").this Court held that not every dispute between an employer and employee involves matters that only labor arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. other labor statutes. it requires the application of the Constitution. law on contracts and the Convention on the Elimination of All Forms of Discrimination Against Women. In Georg Grotjahn GMBH & Co..e. or their collective bargaining agreement. Section 114. v. The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor Code. Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter. Part A of the PAL-FASAP 2000-2005 CBA must be declared invalid and stricken down to the extent that it discriminates against petitioner. They further contend that there is no reasonable. The said issue cannot be resolved solely by applying the Labor Code. for an employer to discriminate against women employees with respect to terms and conditions of employment solely on account of their sex under Article 135 of the Labor Code as amended by Republic Act No. and that being patently unconstitutional and unlawful. labor statutes. Isnani. much less lawful.even criminal. 6725 or the Act Strengthening Prohibition on Discrimination Against Women and that such discrimination is against Convention on the Elimination of All Forms of Discrimination Against Women (hereafter. the employer-employee relationship between the parties is merely incidental and the cause of action ultimately arose from different sources of obligation. Rather. Actions between employees and employer where the employer-employee relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court.16 and the power to apply and interpret the constitution and CEDAW is within the jurisdiction of trial courts. Here. the Constitution and CEDAW. . basis for Philippine Airlines to distinguish.

as their representative. Thus. resolution of the dispute requires expertise. Although the CBA provides for a procedure for the adjustment of grievances. In such situations.Thus. It is unfair to preclude petitioners from invoking the trial court's jurisdiction merely because it may eventually result into a change of the terms and conditions of employment. the trial court is not asked to set and fix the terms and conditions of employment. In the same vein. cognizable by labor tribunals. the jurisdiction over the dispute belongs to the regular courts of justice and not to the labor arbiter and the NLRC. such claims fall outside the area of competence or expertise ordinarily ascribed to labor arbiters and the NLRC and the rationale for granting jurisdiction over such claims to these agencies disappears. the dispute in the case at bar is not between FASAP and respondent PAL. Their exercise of jurisdiction is futile. They have no jurisdiction and competence to decide constitutional issues relative to the questioned compulsory retirement age. where the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law. The dispute is between respondent PAL and several female flight attendants who questioned the provision on compulsory retirement of female flight attendants. who have both previously agreed upon the provision on the compulsory retirement of female flight attendants as embodied in the CBA. but is called upon to determine whether CBA is consistent with the laws. settle or negotiate with PAL for the removal of the difference in compulsory . because the union and the management have unanimously agreed to the terms of the CBA and their interest is unified. endeavored to adjust. Clearly. but rather in the application of the general civil law. Along that line. it does not necessarily follow that a resolution of controversy that would bring about a change in the terms and conditions of employment is a labor dispute. such referral to the grievance machinery and thereafter to voluntary arbitration would be inappropriate to the petitioners. there was no showing that FASAP. as it is like vesting power to someone who cannot wield it. When petitioners in their individual capacities questioned the legality of the compulsory retirement in the CBA before the trial court. This Court holds that the grievance machinery and voluntary arbitrators do not have the power to determine and settle the issues at hand. not in labor management relations nor in wage structures and other terms and conditions of employment.

FACTS: . or other written document. The question as to whether said Section 114. respondent. statutes and treaties. INC. as defined in Black's Law Dictionary. is the art of or process of discovering and ascertaining the meaning of a statute. CF SHARP CREW MANAGEMENT. the utilization of the grievance machinery or voluntary arbitration would be pointless. vs. respectively. 162419 July 10.age retirement between its female and male flight attendants. particularly those employed before November 22. Interpretation. Branch 147 is DIRECTED to continue the proceedings in Civil Case No. No. Part A of the PAL-FASAP CBA is discriminatory or not is a question of fact. dated August 31. The Regional Trial Court of Makati City. A full-blown trial is necessary.. This would require the presentation and reception of evidence by the parties in order for the trial court to ascertain the facts of the case and whether said provision violates the Constitution. petitioner. Without FASAP's active participation on behalf of its female flight attendants. which jurisdiction to hear the same is properly lodged with the the RTC. Therefore. J. Neither is there any question regarding the implementation of the subject CBA provision. a remand of this case to the RTC for the proper determination of the merits of the petition for declaratory relief is just and proper.R. contract. Part A of the PAL-FASAP CBA.24 The provision regarding the compulsory retirement of flight attendants is not ambiguous and does not require interpretation. 2005 and March 7. the petition is PARTLY GRANTED. 2006. No. said rule is not absolute.R. SANTIAGO. will. since a contract is the law between the parties.1avvphi1 WHEREFORE. in CA-G. 04-886 with deliberate dispatch. because the manner of implementing the same is clear in itself. PAUL V. SP. The trial court in this case is not asked to interpret Section 144. 1996. 86813 are REVERSED and SET ASIDE. G. Although it is a rule that a contract freely entered between the parties should be respected. The only controversy lies in its intrinsic validity. The Decision and Resolution of the Court of Appeals. 2007 TINGA.

sent a message to the captain of "MSV Seaspread. Petitioner moved for the reconsideration of the NLRC’s Decision but his motion was denied for lack of merit. he signed a new contract of employment with respondent. The following day. Petitioner was to be deployed on board the "MSV Seaspread" which was scheduled to leave the port of Manila for Canada on Feb. .Santiago had been working as a seafarer for Smith Bell Management. the claims for illegal dismissal. 13. respondent’s VP. the contract was approved by the POEA. but he was reassured that he might be considered for deployment at some future date. with the duration of 9 months. A week before the scheduled date of departure. damages.00. 9. overtime pay and other benefits. Cable and Wireless (Marine) Ltd." stating that he received a phone call from the wife of Santiago in Masbate asking him not to send her husband to MSV Seaspread anymore. Inc. According to her. 1998. On appeal by respondent. The Labor Arbiter ruled that the employment contract remained valid but had not commenced since petitioner was not deployed. the employment contract shall commence upon actual departure of the seafarer from the airport or seaport at the point of hire and with a POEA-approved contract. 3. On Feb. Petitioner filed a complaint for illegal dismissal. causing petitioner to suffer actual damages representing lost salary income for 9 months and fixed overtime fee plus 10% attorney's fees while all the other claims are dismissed for lack of merit. 1998. On Feb. The captain of "MSV Seaspread" replied to cancel plans for Santiago to return to Seaspread. 1998. He was assured of a monthly salary of US$515. Other callers who did not reveal their identity gave him some feedbacks that Santiago this time if allowed to depart will jump ship in Canada like his brother Christopher Santiago and as a result the vessel will be penalized. respondent violated the rules and regulations governing overseas employment when it did not deploy petitioner. and attorney's fees against respondent and its foreign principal. and attorney’s fees should be dismissed. actual damages. petitioner was thus told that he would not be leaving for Canada anymore. Fernandez. Capt. In the absence of an employeremployee relationship between the parties. (respondent) for about 5 years. The NLRC found respondent’s decision not to deploy petitioner to be a valid exercise of its management prerogative. the NLRC ruled that there is no employeremployee relationship between petitioner and respondent because under the POEA Standard Contract.

They do not forfend a seafarer from instituting an action for damages against the employer or agency which has failed to deploy him. Despite the absence of an employer-employee relationship between petitioner and respondent. ISSUE: Whether or not the CA committed a serious error of law when it ignored Sec. It does not provide for damages and money claims recoverable by aggrieved employees because it is not the POEA.10 of RA 8042 (Migrant Worker’s Act of 1995) as well as a section incorporated under the petitioner’s POEA approved Employment Contract that the claims or disputes of the Overseas Filipino Worker by virtue of a contract fall within the jurisdiction of the Labor Arbiter of the NLRC.26 The fact that the POEA Rules27 are silent as to the payment of damages to the affected seafarer does not mean that the seafarer is precluded from claiming the same. HELD: Considering that petitioner was not able to depart from the airport or seaport in the point of hire. and no employer-employee relationship was created between the parties. but the NLRC. The sanctions provided for non-deployment do not end with the suspension or cancellation of license or fine and the return of all documents at no cost to the worker. It agreed with the NLRC’s finding that petitioner’s non-deployment was a valid exercise of respondent’s management prerogative. which has jurisdiction over such matters. no employer-employee relationship between the parties arose and any claim for damages against the so-called employer could have no leg to stand on. The jurisdiction of labor arbiters is not limited to . the Court rules that the NLRC has jurisdiction over petitioner’s complaint. The POEA Rules only provide sanctions which the POEA can impose on erring agencies. It added that since petitioner had not departed from the Port of Manila.The Court of Appeals ruled that petitioner is not entitled to actual damages because damages are not recoverable by a worker who was not deployed by his agency within the period prescribed in the POEA Rules. Petitioner’s subsequent motion for reconsideration was denied. the employment contract did not commence.

moral. moral damages cannot be awarded in this case. – Notwithstanding any provision of law to the contrary. we cannot qualify such action as being tainted with bad faith. exemplary and other forms of damages. Article 2199 of the Civil Code provides that one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. 10. Petitioner is entitled to attorney’s fees in the concept of damages and expenses of litigation.. respondents. ATLAS FARMS. ABION.R. vs. the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide. entitled to overtime pay. Respondent is thus liable to pay petitioner actual damages in the form of the loss of nine (9) months’ worth of salary as provided in the contract. the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual. provides that: Sec. petitioner. INC. however. However. FACTS: . He is not. Section 10 of R. forcing petitioner to institute the suit below. No. 142244 November 18. within ninety (90) calendar days after the filing of the complaint. No. J. 2002 QUISUMBING. his claims are cognizable by the labor arbiters of the NLRC. G. There is no certainty that petitioner will perform overtime work had he been allowed to board the vessel. Respondent’s failure to deploy petitioner is unfounded and unreasonable. NATIONAL LABOR RELATIONS COMMISSION.claims arising from employer-employee relationships.A. JAIME O. DELA PEÑA and MARCIAL I. or done deliberately to defeat petitioner’s rights. as to justify the award of moral damages. x x x Since the present petition involves the employment contract entered into by petitioner for overseas employment. While respondent’s failure to deploy petitioner seems baseless and unreasonable. Money Claims. 8042 (Migrant Workers Act).

1993. petitioner filed a motion to dismiss. They alleged "lack of sympathy" on petitioner’s part to engage in conciliation proceedings. Co-respondent Marcial I. He acknowledged receipt of a written notice of dismissal. on March 20. Allegedly. He was among several employees terminated in July 1989 but on July 8. with his separation pay. Both claimed that their termination from service was due to petitioner’s suspicion that they were the leaders in a plan to form a union to compete and replace the existing management-dominated union. dela Peña was employed as a veterinary aide by petitioner in December 1975. Abion5 was a carpenter/mason and a maintenance man whose employment by petitioner commenced on October 8. At the initial mandatory conference. the labor arbiter dismissed their complaints on the ground that the grievance machinery in the collective bargaining agreement (CBA) had not yet been exhausted. Their cases were consolidated in the NLRC. disciplinary action would be taken against him. as provided in the CBA. 1993. thus. according to petitioner. the company terminated his services on October 27. otherwise. He never bothered to explain. On November 9. on the ground of lack of jurisdiction for the case belonged to the grievance machinery and thereafter the voluntary arbitrator. he caused the clogging of the fishpond drainage resulting in damages worth several hundred thousand pesos when he improperly disposed of the cut grass and other waste materials into the pond’s drainage system. 1992.Private respondent Jaime O. Private respondents availed of the grievance process. a notice of termination with payment of his monetary benefits was sent to him. The farm manager of petitioner issued a formal notice directing him to explain why disciplinary action should not be taken against him for violating company rules and regulations. Peña was allegedly caught urinating and defecating on company premises not intended for the purpose. He refused to receive the notice and give an explanation. 1993. Consequently. Peña refused to receive the formal notice. 1989. . he was re-hired by petitioner and given the additional job of feedmill operator. Petitioner sent a written notice to Abion. On March 13. Peña and Abion filed separate complaints for illegal dismissal that were later consolidated. but later on refiled the case before the NLRC in Region IV. 1990. requiring him to explain what happened. He duly acknowledged receipt of his separation pay.

violations of a Collective Bargaining Agreement.In a decision dated January 30. Accordingly. Thus. except those which are gross in character. which reversed the labor arbiter’s decision. Dissatisfied with the NLRC ruling. The appellate court denied the petition and affirmed the NLRC resolution with some modifications. ISSUE: Whether the labor arbiter and the NLRC had jurisdiction to decide complaints for illegal dismissal HELD: Article 217 of the Labor Code provides that labor arbiters have original and exclusive jurisdiction over termination disputes. which provides thatThe Voluntary Arbitrator or panel of voluntary arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately preceding article. which was denied. there was proof that private respondents voluntarily accepted their separation pay and petitioner’s financial assistance. grievances or . For purposes of this article. its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes. petitioner went to the Court of Appeals by way of a petition for review on certiorari under Rule 65. Petitioner forthwith filed its motion for reconsideration. seeking reinstatement of the labor arbiter’s decision. The Commission. He stated that Article 217 (c) of the Labor Code6 was inapplicable to the case. A possible exception is provided in Article 261 of the Labor Code. private respondents brought the case to the NLRC. gross violations of Collective Bargaining Agreement shall mean flagrant and or malicious refusal to comply with the economic provisions of such agreement. the labor arbiter dismissed the complaint for lack of merit. 1996. Further. shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. finding that the case was one of illegal dismissal and did not involve the interpretation or implementation of any CBA provision. the labor arbiter found that although both complainants did not substantiate their claims of illegal dismissal.

56 does not apply in the case at bar. and claims for damages. however. implementation or enforcement of company personnel policies contemplated in Policy Instruction No. Consequently. it may be observed that under Policy Instruction No. that private respondents sought without success to avail of the grievance procedure in their CBA. dated 6 April 1993. As earlier stated." Moreover.16 It is worth pointing out that private respondents went to the NLRC only after the labor arbiter dismissed their original complaint for illegal dismissal. termination disputes.14 "petitioner cannot arrogate into the powers of Voluntary Arbitrators the original and exclusive jurisdiction of Labor Arbiters over unfair labor practices. and does not specifically involve the application. if filed before the Labor Arbiter. in the absence of an express agreement between the parties in order for Article 262 of the Labor Code [Jurisdiction over other labor disputes] to apply in the case at bar. But as held in Vivero vs." termination cases arising in or resulting from the interpretation and implementation of collective bargaining agreements and interpretation and enforcement of company personnel policies which were initially processed at the various steps of the plant-level Grievance Procedures under the parties’ collective bargaining agreements fall within the original and exclusive jurisdiction of the voluntary arbitrator pursuant to Art. 217 (c) and Art. We agree with the . 56. these cases shall be dismissed by the Labor Arbiter for lack of jurisdiction and referred to the concerned NCMB Regional Branch for appropriate action towards and expeditious selection by the parties of a Voluntary Arbitrator or Panel of Arbitrators based on the procedures agreed upon in the CBA. and. 56 of the Secretary of Labor. "Clarifying the Jurisdiction Between Voluntary Arbitrators and Labor Arbiters Over Termination Cases and Providing Guidelines for the Referral of Said Cases Originally Filed with the NLRC to the NCMB. per Justice Bellosillo. Records show. 261 of the Labor Code.matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and refer the same to the grievance Machinery or Arbitration provided in the Collective Bargaining Agreement. the instant case is a termination dispute falling under the original and exclusive jurisdiction of the Labor Arbiter. Policy Instruction No. CA. Under these circumstances private respondents had to find another avenue for redress.

18It erred only in finding that their cause of action was ripe for arbitration.NLRC that it was petitioner who failed to show proof that it took steps to convene the grievance machinery after the labor arbiter first dismissed the complaints for illegal dismissal and directed the parties to avail of the grievance procedure under Article VII of the existing CBA. with alleged violation of the employee’s rights. we agree with the appellate court that petitioner should pay the costs of suit. They could not now be faulted for attempting to find an impartial forum. it having failed to object to the dismissal of the employees concerned by the petitioner. it can be said that the cases were effectively removed from the jurisdiction of the voluntary arbitrator. Where the dispute is just in the interpretation. It is obvious that arbitration without the union’s active participation on behalf of the dismissed employees would be pointless. But. it shall automatically be referred to the voluntary arbitrators designated in advance by the parties to a CBA. Pursuant to Article 26021 of the Labor Code. The NLRC had aptly concluded in part that private respondents had already exhausted the remedies under the grievance procedure. the NLRC found that petitioner did not comply with the requirements of a valid dismissal. or brought to voluntary arbitration. Having found private respondents’ dismissal to be illegal. the union had no participation. where there was already actual termination. In these termination cases of private respondents. . after petitioner failed to listen to them and after the intercession of the labor arbiter proved futile. One significant fact in the present petition also needs stressing. Given the fact of dismissal. Consequently only disputes involving the union and the company shall be referred to the grievance machinery or voluntary arbitrators. it is already cognizable by the labor arbiter. it may be referred to the grievance machinery set up in the CBA. the parties to a CBA shall name or designate their respective representatives to the grievance machinery and if the grievance is unsettled in that level. and the labor arbiter and the NLRC duly vested with jurisdiction to hear and decide their cases. Coming to the merits of the petition. In sum. or even prejudicial to their cause. and no error was committed by the appellate court in upholding their assumption of jurisdiction. we conclude that the labor arbiter and then the NLRC had jurisdiction over the cases involving private respondents’ dismissal. thus placing them within the jurisdiction of the labor arbiter. implementation or enforcement stage.

and the NATIONAL LABOR RELATIONS COMMISSION. Dumaguete City. On the same date. On November 23. private respondents filed a complaint against the Perpetual Help with the Arbitration Branch. 6939. petitioner. separation pay since reinstatement is evidently not feasible. J. SISINITA VILLAR. petitioner PHCCI filed a motion to dismiss the complaint on the ground that there is no employer-employee relationship between them as private respondents are all members and co-owners of the cooperative. moral damages. otherwise known as the Cooperative Development Authority Law which took effect on March 26. Forthwith. On September 3. . holding that the case is impressed with employer-employee relationship and that the law on cooperatives is subservient to the Labor Code.R. requires conciliation or mediation within the cooperative before a resort to judicial proceeding. separation pay. 121948 October 8. Fourth Division. wage differentials and 10% attorney's fees from the aggregate monetary award. Department of Labor and Employment (DOLE). No. Cebu City.. the Labor Arbiter denied petitioner's motion to dismiss. FACTS: On January 3. 1993. IMELDA TAMAYO. All other claims are hereby dismissed for lack of merit. 1990. wage differential. 2001 SANDOVAL-GUTIERREZ. thus respondent is directed to pay Complainants backwages. for illegal dismissal. No. 1990.PERPETUAL HELP CREDIT COOPERATIVE. respondents. G. 13th month pay. petitioner filed a supplemental motion to dismiss alleging that Article 121 of R. BENEDICTO FABURADA. premium pay on holidays and rest days. 1990.A. Furthermore. and attorney's fees. vs. INC. HAROLD CATIPAY. private respondents have not exhausted the remedies provided in the cooperative by-laws. the Labor Arbiter rendered a decision declaring complainants illegally dismissed.

the matter shall be settled in a court of competent jurisdiction. No.On appeal. and intra-cooperative disputes shall. a certificate of non-resolution . officers. Likewise." Complementing this Article is Section8 of R. 175 (strengthening the Cooperative Movement) 8 and its implementing rules and regulations under LOI 23. be settled amicably in accordance with the conciliation or mediation mechanisms embodied in the by-laws of the cooperative. HELD: Petitioner contends that the labor arbiter has no jurisdiction to take cognizance of the complaint of private respondents considering that they failed to submit their dispute to the grievance machinery as required by P. That if no mediation or conciliation succeeds within three (3) months from request thereof. As aptly stated by the Solicitor General in his comment. and committee members.D.1 the NLRC affirmed the Labor Arbiter's decision. as far as practicable. this LOI has no relevance to the instant case. — Disputes among members. 6938 (Cooperative Code of the Philippines) provides the procedure how cooperative disputes are to be resolved. thus: ART. Settlement of Disputes. LOI 23 refers to instructions to the Secretary of Public Works and Communications to implement immediately the recommendation of the Postmaster General for the dismissal of some employees of the Bureau of Post. and in applicable laws.D. — Upon request of either or both parties. ISSUE: Whether or not the labor arbiter has jurisdiction. 175 does not provide for a grievance machinery where a dispute or claim may first be submitted.A. Article 121 of Republic Act No. Should such a conciliation/mediation proceeding fail. 6939 (Cooperative Development Authority Law) which reads: SEC. 121. Obviously. the Authority shall mediate and conciliate disputes within a cooperative or between cooperatives: Provided. 6939 or the Cooperative Development Authority Law. P. 8 Mediation and Conciliation.A. directors. the Cooperative Development Authority did not issue a Certificate of Non-Resolution pursuant to Section 8 of R.

: FACTS: • Petitioner was the sales operations manager of private respondent in its branch in Iligan City. with modification in the sense that the backwages due private respondents shall be paid in full. petitioner. the dispute is about payment of wages. HON. The above provisions apply to members. GONZAGA-REYES. If said customer decided to buy items from plaintiff on installment basis. computed from the time they were illegally dismissed up to the time of the finality of this Decision. J. INC. rest day and termination of employment. BAÑEZ. without the knowledge of said customer and plaintiff.R. . 217 of the Labor Code. Under Art. a privilege not given to customers. vs. Hence.13 G. respondents. and thereafter required the customer to sign promissory notes and other documents using the name and property of plaintiff.. officers and directors of the cooperative involved in disputes within a cooperative or between cooperatives. No. these disputes are within the original and exclusive jurisdiction of the Labor Arbiter. • Defendant canvassed customers personally or through salesmen of plaintiff which were hired or recruited by him. would buy the items on cash basis at ex-factory price. VALDEVILLA and ORO MARKETING. overtime pay. 128024 May 9. defendant. purporting that said customer purchased the items from plaintiff on installment basis. 2000 BEBIANO M. There is no evidence that private respondents are members of petitioner PHCCI and even if they are. the decision of respondent NLRC is AFFIRMED.shall be issued by the Commission prior to the filing of appropriate action before the proper courts. DOWNEY C.

stating that the latter could very well have included the instant claim for damages in its counterclaim before the Labor Arbiter. a Group Sales Manager of plaintiff but also utilized by him as secretary in his own business for collecting and receiving of installments. respondent court stated:A perusal of the complaint which is for damages does not ask for any relief under the Labor Code of the . He also pointed out that the civil action of private respondent is an act of forum-shopping and was merely resorted to after a failure to obtain a favorable decision with the NLRC. the Court also pointed out that even if all the procedural requirements for the filing of the petition were met. which dismissed the same for having been filed out of time. property and manpower. The collection and receipt of payments were made inside the Iligan City branch using plaintiff's facilities. 2 Elevated by petition for certiorari before this Court. • The decision was appealed to the NLRC. That accordingly plaintiff's sales decreased and reduced to a considerable extent the profits which it would have earned. petitioner filed a motion to dismiss the above complaint. In a decision dated July 7. 1996. defendant collected the installment payments either personally or through Venus Lozano. it would still be dismissed for failure to show grave abuse of discretion on the part of the NLRC.• Thereafter. • Ruling upon the motion to dismiss. Palangan found petitioner to have been illegally dismissed and ordered the payment of separation pay in lieu of reinstatement. Labor Arbiter Nicodemus G. 1994. purportedly for the plaintiff but in reality on his own account or business. He accused private respondent of splitting causes of action. • On November 13. 1995. was squarely under the exclusive original jurisdiction of the NLRC under Article 217(a). He interposed in the court below that the action for damages. • In 1993. and of backwages and attorney's fees. having arisen from an employer-employee relationship. private respondent "indefinitely suspended" petitioner and the latter filed a complaint for illegal dismissal with the National Labor Relations Commission ("NLRC") in Iligan City • . paragraph 4 of the Labor Code and is barred by reason of the final judgment in the labor case. however. private respondent filed a complaint for damages before the Regional Trial Court ("RTC") of Misamis Oriental: • On January 30.In declaring itself as having jurisdiction over the subject matter of the instant controversy. the case was dismissed on technical grounds3. respondent .

ISSUE: Who between Labor Arbiters and regular courts had jurisdiction over claims for damages as between employers and employees. • Petitioner's motion for reconsideration of the above Order was denied for lack of merit on October 16. whether agricultural or non-agricultural: 4.Philippines. Jurisdiction of Labor Arbiters and the Commission. this petition. In the first place. • There is no mistaking the fact that in the case before us. reads: Art. the following cases involving all workers.The Court believes that there was a breach of a contractual obligation. even in the absence of stenographic notes. and jurisdiction over the controversy belongs to the regular courts. The Court believes such cause of action is within the realm of civil law. within thirty (30) calendar days after the submission of the case by the parties for decision without extension. 217(a). private respondent's claim against petitioner for actual damages arose from a prior employer-employee relationship. private . moral. which was already in effect at the time of the filing of this case. 1996. 217. Hence. HELD: • Art. • While seemingly the cause of action arose from employer-employee relations. Claims for actual. the employer's claim for damages is grounded on the nefarious activities of defendant causing damage and prejudice to plaintiff . exemplary and other forms of damages arising from the employeremployee relations. which is intrinsically a civil dispute. The averments in the complaint removed the controversy from the coverage of the Labor Code of the Philippines and brought it within the purview of civil law. — (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide. paragraph 4 of the Labor Code. It seeks to recover damages as redress for defendant's breach of his contractual obligation to plaintiff who was damaged and prejudiced.

This issue has been duly raised and ruled upon in the illegal dismissal case. but in properly perfecting an appeal from the Labor Arbiter's decision. and more importantly. In other words. of course. the Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws. Article 217(a) of the Labor Code. and presented evidence in support thereof. clearly bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for damages arising from employer-employee relations — in other words. to distinguish from cases of actions for damages where the employer-employee relationship is merely incidental and the cause of action proceeds from a different source of obligation. malicious prosecution 15. claimed for were based on tort 14. and second. which is now final and executory. as when the claimant seeks to recover a debt from a former employee 16 or seeks liquidated damages in enforcement of a prior employment contract. • This is. 18 • Thus. or breach of contract. the damages alleged in the complaint below are: first. 17 • Neither can we uphold the reasoning of respondent court that because the resolution of the issues presented by the complaint does not entail application of the Labor Code or other labor laws. the issue of actual damages has been settled in the labor case. but also damages governed by the Civil Code. those amounting to lost profits and earnings due to petitioner's abandonment or neglect of his duties as sales manager. where private respondent brought up as a defense the same allegations now embodied in his complaint. Having lost the right to appeal on . Thus. to allow respondent court to proceed with the instant action for damages would be to open anew the factual issue of whether petitioner's installment sale scheme resulted in business losses and the dissipation of private respondent's property. the dispute is intrinsically civil.respondent would not have taken issue with petitioner's "doing business of his own" had the latter not been concurrently its employee. • Second. it is obvious that private respondent's remedy is not in the filing of this separate action for damages. those equivalent to the value of private respondent's property and supplies which petitioner used in conducting his "business ". having been otherwise preoccupied by his unauthorized installment sale scheme. Thus. the jurisdiction of regular courts was upheld where the damages. as amended.

AUSTRIA V NLRC (CENTRAL PHIL. the decision in the labor case stands as a final judgment on the merits. 1991.grounds of untimeliness. He held the position of district pastor until his services were terminated on 31 October 1991. and the provinces of Romblon and Guimaras. he was elevated to the position of Pastor covering the island of Panay. we will no longer pass upon petitioner's other assignments of error. and the instant action for damages cannot take the place of such lost appeal. 1991. Thelma Austria. in his district which amounted to P15. . OF THE 7TH-DAY ADVENTIST) 312 SCRA 410 KAPUNAN. From then on. 1968.078. 1972. He held the same position up to 1988. in 1989. he was transferred to Bacolod City. selling literature of the SDA over the island of Negros.10. In January. • Respondent court clearly having no jurisdiction over private respondent's complaint for damages. August 16. Negros Occidental. the treasurer of the Negros Mission asked him to admit accountability and responsibility for the church tithes and offerings collected by his wife. In July.On various occasions from August up to October. Balintawak and Toboso. he worked his way up the ladder and got promoted several times. 1999 FACTS . and to remit the same . he became the Assistant Publishing Director in the West Visayan Mission. He began his work with the SDA on 15 July 1963 as a literature evangelist. Eufronio Ibesate.Pastor Dionisio Austria worked with the Central Philippine Union Mission Corporation of the Seventh Day Adventists (SDA) for 28 years from 1963 to 1991. Finally. with 12 churches under his jurisdiction. In January. he was promoted as District Pastor of the Negros Mission of the SDA and was assigned at Sagay. UNION MISSION CORP.

On 16 October 1991. only 2 were actually excluded: Pastor Buhat and Pastor ." Irked by such remark. he immediately proceeded to the office of Pastor Buhat and asked the latter to convene the Executive Committee. president of the SDA and chairman of the factfinding committee. petitioner banged the attache case of Pastor Buhat on the table. the two exchanged heated arguments. the factfinding committee conducted an investigation. From October 21 to 22. The dispute between David Rodrigo and petitioner arose from an incident in which petitioner assisted his friend. When news reached petitioner that Pastor Rodrigo was about to file a complaint against him with the Negros Mission. scattered the books in his office. petitioner overheard Pastor Buhat saying "Pastor daw inisog na ina iya (Pastor you are talking tough). to collect from Pastor Rodrigo the unpaid balance for the repair of the latter's motor vehicle which he failed to pay to Diamada. Pastor Buhat denied the request of petitioner since some committee members were out of town and there was no quorum. Thereafter. petitioner tried to persuade Pastor Buhat to convene the Executive Committee for the purpose of settling the dispute between him and Pastor David Rodrigo. Out of the 6 members requested to inhibit themselves from the investigation and decision-making. though unsuccessfully.On 17 October 1991. Fortunately. requesting that certain members of the fact-finding committee be excluded in the investigation and resolution of the case. During said call. the latter harbored ill-feelings against petitioner. petitioner went to the office of Pastor Buhat. Petitioner then left the office of Pastor Buhat.to the Negros Mission. petitioner returned to the office of Pastor Buhat. Danny Diamada. . Due to the assistance of petitioner in collecting Pastor Rodrigo's debt. petitioner received a letter inviting him and his wife to attend the Executive Committee meeting. Petitioner reasoned out that he should not be made accountable for the unremitted collections since it was Pastor Gideon Buhat and Ibesate who authorized his wife to collect the tithes and offerings since he was very sick to do the collecting at that time. Thereafter. and threw the phone. Petitioner immediately wrote Pastor Rueben Moralde. Pastors Yonillo Leopoldo and Claudio Montaño were around and they pacified both. the president of the Negros Mission. since it was heavy. While on his way out. and tried to overturn the latter's table. .

serious misconduct. The case at bar does not even remotely concern any of the above cited examples. willful breach of trust.Based on this definition. WON the Labor Arbiter/NLRC has jurisdiction to try and decide the complaint filed by petitioner against the SDA 2. To be concrete. and. administration of sacraments and other activities which attached religious significance. ordinations of religious ministers. creed or form or worship of the church. and commission of an offense against the person of employer's duly authorized representative. While the matter at hand relates to the church and its religious minister it does not ipso facto give the case a religious . WON such termination is valid HELD 1. religious doctrines. as such. Reasoning . YES and 2. or the adoption and enforcement within a religious association of needful laws and regulations for the government of the membership. involves the separation of church and state 3. as grounds for the termination of his services. worship and governance of the congregation. ISSUES 1. an ecclesiastical affair involves the relationship between the church and its members and relate to matters of faith. NO [Resolved jointly since they are related] Ratio An ecclesiastical affair is one that concerns doctrine. petitioner received a letter of dismissal citing misappropriation of denominational funds. Subsequently.Rodrigo. examples of this so-called ecclesiastical affairs to which the State cannot meddle are proceedings for excommunication. gross and habitual neglect of duties. and the power of excluding from such associations those deemed unworthy of membership. WON the termination of the services of petitioner is an ecclesiastical affair.

As to Due Process .The issue being the legality of petitioner's dismissal. through the Labor Arbiter and the NLRC. Ibesate.e. . In this case.Aside from these. It is purely secular and has no relation whatsoever with the practice of faith. he must be given an opportunity to be heard and to defend himself. Simply stated. .Finally. private respondents are estopped from raising the issue of lack of jurisdiction for the first time on appeal. 3. be illegal. NO. it was merely exercising its management prerogative to fire an employee which it believes to be unfit for the job.. and. petitioner was not excommunicated or expelled from the membership of the SDA but was terminated from employment. the same must be measured against the requisites for a valid dismissal. The active participation of a party coupled with his failure to object to the jurisdiction of the court or quasijudicial body is tantamount to an invocation of that jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court or body's jurisdiction. the State. the termination would. in the eyes of the law. namely: (a) the employee must be afforded due process. i. SDA admitted in a certification issued by its officer.significance. has the right to take cognizance of the case. From all of these it is clear that when the SDA terminated the services of petitioner. The worker's records of petitioner have been submitted by private respondents as part of their exhibits. Without the concurrence of these twin requirements. what is involved here is the relationship of the church as an employer and the minister as an employee. As such. (b) the dismissal must be for a valid cause as provided in Article 282 of the Labor Code. worship or doctrines of the church. Reasoning . SDA even registered petitioner with the SSS as its employee. that petitioner has been its employee for 28 years.

and giving to said employee reasonable opportunity within which to explain his side. . While admittedly. which may be considered as the proper charge. it cannot be said that petitioner was given enough opportunity to properly prepare for his defense. For this reason. must come only after the employee is given a reasonable period from receipt of the first notice within which to answer the charge and ample opportunity to be heard and defend himself with the assistance of a representative. however. and. This decision. With regard to the first notice.The first notice. Non-compliance therewith is fatal because these requirements are conditions sine quo non before dismissal may be validly effected.SDA failed to substantially comply with the above requirements. The second notice on the other hand seeks to inform the employee of the employer's decision to dismiss him. the letter never even mentioned that he would be subject to investigation. serves to apprise the employee of the particular acts or omissions for which his dismissal is sought. SDA complied with the second requirement. cannot be construed as the written charge required by law. The letter merely mentioned that he and his wife were invited to a meeting wherein what would be discussed were the alleged unremitted church tithes and the events that transpired on 16 October 1991. grounds have been established to justify his termination.. As to Just Cause . .Article 277(b) of the Labor Code further require the employer to furnish the employee with 2 written notices. if he so desires. the notice of termination. this does not cure the initial defect of lack of the proper written charge required by law. A perusal of the said letter reveals that it never categorically stated the particular acts or omissions on which his impending termination was grounded. which notified petitioner and his wife to attend the meeting on 21 October 1991. to wit: (a) a written notice served on the employee specifying the ground or grounds for termination. In fact. (b) a written notice of termination served on the employee indicating that upon due consideration of all the circumstances. the letter dated 17 October 1991.

It is the transgression of some established and definite rule of action. A breach is willful if it is done intentionally. willful in character. In the absence of conspiracy and collusion. Settled is the rule that under Article 282 (c) of the Labor Code. though petitioner committed damage to property. without justifiable excuse. The testimony of Naomi Geniebla. heedlessly or inadvertently. It must rest on substantial grounds and not on the employer's arbitrariness. otherwise. between petitioner and his wife. as distinguished from an act done carelessly. we believe that the act of petitioner in banging the attache case on the table. It should be genuine and not simulated. he cannot be made accountable for the alleged infraction committed by his wife. collections. cannot be considered as grave enough to be considered as serious misconduct. After all. because of its subjective nature. they still have separate and distinct personalities. knowingly and purposely. show that Pastor Austria was able to remit all his collections to the treasurer of the Negros Mission. the allegation of breach of trust has no leg to stand on. Based on this standard. a forbidden act. to remit the tithes and offerings which were collected in his district. throwing the telephone and scattering the books in the office of Pastor Buhat. caprices or suspicion. In fact. the employee would eternally remain at the mercy of the employer. This ground has never been intended to afford an occasion for abuse.Private respondents allege that they have lost their confidence in petitioner for his failure. the Negros Mission Church Auditor and a witness for private respondents. Private respondents try to pin on petitioner the alleged non-remittance of the tithes collected by his wife.Misconduct has been defined as improper or wrong conduct. the alleged offense . he did not physically assault Pastor Buhat or any other pastor present during the incident of 16 October 1991. and donations for the church. and implies wrongful intent and not mere error in judgment. although improper. The records show that there were only 6 instances when petitioner personally collected and received from the church treasurers the tithes. as correctly observed by the Labor Arbiter. a dereliction of duty. despite demands. which private respondents failed to demonstrate. For misconduct to be considered serious it must be of such grave and aggravated character and not merely trivial or unimportant. thoughtlessly. whims. . the breach of trust must be willful. Thus. After all..

In fact. does not requires an exhaustive discussion. Hence. Petitioner's rise from the ranks proves that he was actually a hard-worker. 113191. in return. And thisimmunity extends to its officers who also enjoy immunity in respect of all acts performed by them in their officialcapacity. private respondents failed to prove culpability. Disposition Finding of the Labor Arbiter that petitioner was terminated from service without just or lawful cause is SUSTAINED. [G.committed upon the person of the employer's representatives was never really established or proven by private respondents. NLRC. but. he was rewarded with a dismissal from the service for a nonexistent cause. Department of Foreign Affairs v. he labored hard for the SDA. revealed how petitioner travelled to different churches to attend to the faithful under his care. Private respondents' evidence. September 18.The final ground alleged by private respondents. Indeed. . the suit against it cannot prosper. there is no basis for the allegation that petitioner's act constituted serious misconduct or that the same was an offense against the person of the employer's duly authorized representative. gross and habitual neglect of duties. therefore. 1996. This case involves an illegal dismissal case filed against the Asian Development Bank (ADB). Challenged Resolution of NLRC is NULLIFIED and SET ASIDE. 262 SCRA 39. Aside from merely citing the said ground. the evidence on record shows otherwise.R. The Charter and the Headquarters Agreement granting these immunities and privileges to the ADB are treatycovenants and commitments voluntarily assumed by the Philippine government which must be respected. No. . 43‐ 44]. All private respondents had were allegations but not proof. which consisted of petitioner's Worker's Reports. Petitioner is entitled to reinstatement without loss of seniority right and the payment of full backwages without any deduction corresponding to the period from his illegal dismissal up to the actual reinstatement. it was ruled thatsaid entity enjoys immunity from legal process of every form and.

both the ADB and the DFA notified the Labor Arbiter that the ADB. except in the specified cases of borrowing and guarantee operations. Issue: Whether or not ADB is immune from suit? Ruling: No. were covered by an immunity from legal process except for borrowings. The ADB did not file an appeal.Department of Foreign Affairs vs. 18 September 1996. No. VITUG. First Division) Facts: A complaint for illegal dismissal was filed against the Asian Development Bank ("ADB"). No. as well as the purchase.R. Under the Charter and Headquarters Agreement. J. sale and underwriting of .R. as well as its President and Officers. The latter denied the request. Ponente. The Labor Arbiter took cognizance of the complaint on the impression that the ADB had waived its diplomatic immunity from suit. the ADB enjoys immunity from legal process of every form. and issued a judgment in favor of the complainant. NLRC (G. 113191) (G. 113191. Upon receipt of summonses. but the DFA sought a nullification with the NLRC. guaranties or the sale of securities pursuant to Article 50(1) and Article 55 of the Agreement Establishing the Asian Development Bank (the "Charter") in relation to Section 5 and Section 44 of the Agreement Between The Bank And The Government Of The Philippines Regarding The Bank's Headquarters (the"Headquarters Agreement").

that it is immune from the legal writs and processes issued by the tribunals of the country where it is found. Such an act can only be the start of the inquiry. without its consent. the ADB is independent of the municipal law. The Charter and the Headquarters Agreement granting these immunities and privileges are treaty covenants and commitments voluntarily assumed by the Philippine government which must be respected. i.Being an international organization that has been extended a diplomatic status. According to the newer or restrictive theory. or an incident thereof." The ADB didn't descend to the level of an ordinary party to a commercial transaction. such subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its member-states.e. the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state. The logical question is whether the foreign state is engaged in the activity in the regular course of business. There are two conflicting concepts of sovereign immunity. If the act is in pursuit of a sovereign activity. be made a respondent in the Courts of another sovereign. then it is an act jure imperii.. the particular act or transaction must then be tested by its nature. a sovereign cannot. The obvious reason for this is that the subjection of such an organization to the authority of the local courts would afford a convenient medium thru which the host government may interfere in their operations or even influence or control its policies and decisions of the organization. by entering into service contracts with different private companies. The Bank’s officers. According to the classical or absolute theory. but not with regard to private act or acts jure gestionis.securities. each widely held and firmly established. enjoy immunity in respect of all acts performed by them in their official capacity. the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. If the foreign state is not engaged regularly in a business or trade. besides.which should have constituted a waiver of its immunity from suit. especially when it is not . One of the basic immunities of an international organization is immunity from local jurisdiction. on their part. Certainly.

Facts: . among its other mandates. the parties thereto are deemed to have likewise accepted the responsibility of seeing to it that their agreements are duly regarded. CABANSAG G. a determination which. J.undertaken for gain or profit. 2005 PANGANIBAN. when challenged.R. June 21. When international agreements are concluded. No. The service contracts referred to by private respondent have not been intended by the ADB for profit or gain but are official acts over which a waiver of immunity would not attach. PNB v. this task falls principally on the DFA as being the highest executive department with the competence and authority to so act in this aspect of the international arena. The DFA must be allowed to plead its case whenever necessary or advisable to enable it to help keep the credibility of the Philippine government before the international community. 157010. In our country.entitles it to seek relief from the court so as not to seriously impair the conduct of the country's foreign relations. the determination of persons andinstitutions covered by diplomatic immunities. Issue: Whether or not the DFA has the legal standing to file the present petition? Ruling: The DFA's function includes.

without prior written consent of the Bank.500. a permanent appointment and that her temporary appointment was subject to the following terms and conditions: 1. a lawyer. and (b) locally (direct) hired.00.00. She applied for employment as Branch Credit Officer. Manila. You will not. Cabansag offering her a temporary appointment. hired in Manila and assigned abroad including Singapore.500. Ruben C. upon her successful completion of her probation to be determined solely. as General Manager. 3. she may be extended at the discretion of the Bank. Her application was approved for a period of 2 years. At the time. Tobias. a private banking corporation organized and existing under the laws of the Philippines. the Singapore PNB Branch was under the helm of Ruben C. At the time. The President of the Bank was impressed with the credentials of Florence O. recommending the appointment of Florence O. You will keep in strictest confidence all matters related to transactions between the Bank and its clients. with the Singapore Branch of the Philippine National Bank.’ with the Ministry of Manpower of the Government of Singapore. . effective upon assumption of duties after approval. too. with the rank of Vice-President of the Bank. be employed in anyway for any purpose whatsoever outside business hours by any person. You will devote your full time during business hours in promoting the business and interest of the Bank. “You will be on probation for a period of three (3) consecutive months from the date of your assumption of duty. the Branch Office had 2 types of employees: (a) expatriates or the regular employees. Tobias wrote a letter to Florence O. 2. She applied for employment. Tobias. 1998. firm or company. a letter to the President of the Bank in Manila. She then filed an ‘Application. at a total monthly package of $SG4. with principal offices at the PNB Financial Center. Florence Cabansag arrived in Singapore as a tourist. for the position. a month and. You will observe the Bank’s rules and regulations and those that may be adopted from time to time. for the issuance of an ‘Employment Pass’ as an employee of the Singapore PNB Branch. as Credit Officer. Tobias found her eminently qualified and wrote on October 26. Cabansag that he approved the recommendation of Ruben C. at a basic salary of Singapore Dollars 4. Cabansag. 4. 5. Ruben C. Roxas Boulevard. by the Bank.In late 1998.

6. Termination of your employment with the Bank may be made by either party after notice of one (1) day in writing during probation, one month notice upon confirmation or the equivalent of one (1) day’s or month’s salary in lieu of notice.” Florence O. Cabansag accepted the position and assumed office. Barely 3 months in office, Florence O. Cabansag submitted to Ruben C. Tobias, on March 9, 1999, her initial ‘Performance Report.’ Ruben C. Tobias was so impressed with the ‘Report’ that he made a notation and, on said ‘Report’: ‘GOOD WORK.’ However, in the evening of April 14, 1999, while Florence O. Cabansag was in the flat, which she and Cecilia Aquino, the Assistant VicePresident and Deputy General Manager of the Branch and Rosanna Sarmiento, the Chief Dealer of the said Branch, rented, she was told by the 2 that Ruben C. Tobias has asked them to tell Florence O. Cabansag to resign from her job. Florence O. Cabansag was perplexed at the sudden turn of events and the runabout way Ruben C. Tobias procured her resignation from the Bank. The next day, Florence O. Cabansag talked to Ruben C. Tobias and inquired if what Cecilia Aquino and Rosanna Sarmiento had told her was true. Ruben C. Tobias confirmed the veracity of the information, with the explanation that her resignation was imperative as a ‘cost-cutting measure’ of the Bank. Ruben C. Tobias, likewise, told Florence O. Cabansag that the PNB Singapore Branch will be sold or transformed into a remittance office and that, in either way, Florence O. Cabansag had to resign from her employment. The more Florence O. Cabansag was perplexed. She then asked Ruben C. Tobias that she be furnished with a ‘Formal Advice’ from the PNB Head Office in Manila. However, Ruben C. Tobias flatly refused. Florence O. Cabansag did not submit any letter of resignation. Ruben C. Tobias again summoned Florence O. Cabansag to his office and demanded that she submit her letter of resignation, with the pretext that he needed a Chinese-speaking Credit Officer to penetrate the local market, with the information that a Chinese-speaking Credit Officer had already been hired and will be reporting for work soon. She was warned that, unless she submitted her letter of resignation, her employment record will be blemished with the notation ‘DISMISSED’ spread thereon. Without giving any definitive answer, Florence O. Cabansag asked Ruben C. Tobias that she be given sufficient time to look for another job. Ruben C. Tobias told her that she should be ‘out’ of her employment by May 15, 1999.

However, on April 19, 1999, Ruben C. Tobias again summoned Florence O. Cabansag and adamantly ordered her to submit her letter of resignation. She refused. On April 20, 1999, she received a letter from Ruben C. Tobias terminating her employment with the Bank. Issues: 1. WON the arbitration branch of the NLRC in the National Capital Region has jurisdiction over the instant controversy; 2. WON the arbitration of the NLRC in the National Capital Region is the most convenient venue or forum to hear and decide the instant controversy; and 3. WON the respondent was illegally dismissed, and therefore, entitled to recover moral and exemplary damages and attorney’s fees Held: The jurisdiction of labor arbiters and the NLRC is specified in Article 217 of the Labor Code as follows: “ART. 217. Jurisdiction of Labor Arbiters and the Commission. – (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: 1. Unfair labor practice cases; 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wage, rates of pay, hours of work and other terms and conditions of employment 4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and 6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employeremployee relations, including those of persons in domestic or household service, involving an amount of exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.

(b) The commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. More specifically, Section 10 of RA 8042 reads in part: “SECTION 10. Money Claims. — Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. labor arbiters clearly have original and exclusive jurisdiction over claims arising from employer-employee relations, including termination disputes involving all workers, among whom are overseas Filipino workers (OFW). Respondent was directly hired, while on a tourist status in Singapore, by the PNB branch in that city state. Prior to employing respondent, petitioner had to obtain an employment pass for her from the Singapore Ministry of Manpower. Securing the pass was a regulatory requirement pursuant to the immigration regulations of that country. The Philippine government requires non-Filipinos working in the country to first obtain a local work permit in order to be legally employed here. That permit, however, does not automatically mean that the non-citizen is thereby bound by local laws only, as averred by petitioner. It does not at all imply a waiver of one’s national laws on labor. Absent any clear and convincing evidence to the contrary, such permit simply means that its holder has a legal status as a worker in the issuing country. a branch office in Singapore. Significantly, respondent’s employment by the Singapore branch office had to be approved by Benjamin P. Palma Gil, the president of the bank whose principal offices were in Manila. This circumstance militates against petitioner’s contention that respondent was “locally hired”; and totally “governed by and subject to the laws, common practices and customs” of Singapore, not of the Philippines. Instead, with more reason does this fact reinforce the presumption that respondent falls under the legal definition of migrant worker, in this case one deployed in

Singapore. Hence, petitioner cannot escape the application of Philippine laws or the jurisdiction of the NLRC and the labor arbiter. Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the basic public policy of the State to afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. Section 1(a) of Rule IV of the NLRC Rules of Procedure reads: “Section 1. Venue – (a) All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complainant/petitioner; Provided, however that cases of Overseas Filipino Worker (OFW) shall be filed before the Regional Arbitration Branch where the complainant resides or where the principal office of the respondent/employer is situated, at the option of the complainant. “For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. It shall include the place where the employee is supposed to report back after a temporary detail, assignment or travel. In the case of field employees, as well as ambulant or itinerant workers, their workplace is where they are regularly assigned, or where they are supposed to regularly receive their salaries/wages or work instructions from, and report the results of their assignment to their employers.” Under the “Migrant Workers and Overseas Filipinos Act of 1995” (RA 8042), a migrant worker ”refers to a person who is to be engaged, is engaged or has been engaged in a remunerated activity in a state of which he or she is not a legal resident; to be used interchangeably with overseas Filipino worker.” Undeniably, respondent was employed by petitioner in its branch office in Singapore. Admittedly, she is a Filipino and not a legal resident of that state. She thus falls within the category of “migrant worker” or “overseas Filipino worker.” As such, it is her option to choose the venue of her Complaint against petitioner for illegal dismissal. The law gives her two choices: (1) at the

Regional Arbitration Branch (RAB) where she resides or (2) at the RAB where the principal office of her employer is situated. Since her dismissal by petitioner, respondent has returned to the Philippines -- specifically to her residence at Filinvest II, Quezon City. Thus, in filing her Complaint before the RAB office in Quezon City, she has made a valid choice of proper venue. Respondent was already a regular employee at the time of her dismissal, because her three-month probationary period of employment had already ended. This ruling is in accordance with Article 281 of the Labor Code: “An employee who is allowed to work after a probationary period shall be considered a regular employee.” Indeed, petitioner recognized respondent as such at the time it dismissed her, by giving her one month’s salary in lieu of a one-month notice, consistent with provision No. 6 of her employment Contract. As a regular employee, respondent was entitled to all rights, benefits and privileges provided under our labor laws. One of her fundamental rights is that she may not be dismissed without due process of law. The twin requirements of notice and hearing constitute the essential elements of procedural due process, and neither of these elements can be eliminated without running afoul of the constitutional guarantee. In dismissing employees, the employer must furnish them two written notices: 1) one to apprise them of the particular acts or omissions for which their dismissal is sought; and 2) the other to inform them of the decision to dismiss them. As to the requirement of a hearing, its essence lies simply in the opportunity to be heard. Respondent was not notified of the specific act or omission for which her dismissal was being sought. Neither was she given any chance to be heard, as required by law. At any rate, even if she were given the opportunity to be heard, she could not have defended herself effectively, for she knew no cause to answer to. All that petitioner tendered to respondent was a notice of her employment termination effective the very same day, together with the equivalent of a one-month pay. This Court has already held that nothing in the law gives an employer the option to substitute the required prior notice and opportunity to be heard with the mere payment of 30 days’ salary.

The employer shall be sanctioned for noncompliance with the requirements of, or for failure to observe, due process that must be observed in dismissing an employee. Moreover, Articles 282, 283 and 284 of the Labor Code provide the valid grounds or causes for an employee’s dismissal. The employer has the burden of proving that it was done for any of those just or authorized causes. The failure to discharge this burden means that the dismissal was not justified, and that the employee is entitled to reinstatement and back wages. Petitioner has not asserted any of the grounds provided by law as a valid reason for terminating the employment of respondent. It merely insists that her dismissal was validly effected pursuant to the provisions of her employment Contract, which she had voluntarily agreed to be bound to.

MA. ISABEL T. SANTOS, represented by ANTONIO P. SANTOS,vs. SERVIER PHILIPPINES, INC. and NATIONAL LABOR RELATIONS COMMISSION, [G.R. No. 166377. November 28, 2008.] Facts: • Petitioner Ma. Isabel T. Santos was the Human Resource Manager of respondent Servier Philippines, Inc. since 1991 until her termination from service in 1999. On March 26 and 27, 1998, petitioner attended a meeting of all human resource managers of respondent, held in Paris, France. Since the last day of the meeting coincided with the graduation of petitioner's only child, she arranged for a European vacation with her family right after the meeting. • While having dinner in a Paris restaurant w/ her family & friends, petitioner complained of stomach pain, then vomited. Eventually, she was brought to the hospital where she fell into coma for 21 days; and later stayed at the Intensive Care Unit (ICU) for 52 days. The hospital found that the probable cause of her sudden attack was "alimentary allergy", as she had recently ingested a meal of mussels. • During the time that petitioner was confined at the hospital, her husband and son stayed with her in Paris. Petitioner's hospitalization

In denying petitioner's claim for separation pay. insurance pension for permanent disability. to determine her fitness to resume her work at the company. Petitioner instituted the instant case for unpaid salaries. 1999. Thus. educational assistance for her son. Respondent also failed to give the other benefits. Insurance Pension for 60 months from companysponsored group life policy. the balance thereof was withheld allegedly for taxation purposes.454.89 was released to petitioner's husband. respondent informed the petitioner that the former had requested the latter's physician to conduct a thorough physical and psychological evaluation of her condition.063. unpaid balance of retirement package plus interest. only P701. In a letter dated May 14. unpaid separation pay. moral. Educational assistance. the Labor Arbiter ratiocinated that the same had already been integrated in the retirement plan established by respondent. The Labor Arbiter dismissed petitioner's complaint. respondent offered a retirement package which consists of: Retirement Plan Benefits. & Medical and Health Care Of the promised retirement benefits amounting to P1. Petitioner went back to the Philippines for the continuation of her medical treatment. Petitioner's physician concluded that the former had not fully recovered mentally and physically. and to assist her in paying her hospital bills. The Labor Arbiter stressed that respondent had been generous in giving financial assistance to the petitioner. respondent was constrained to terminate petitioner's services effective August 31. and actual damages. plus attorney's fees. Hence.• • • • • • expenses. During the period of petitioner's rehabilitation. were paid by respondent. as well as those of her husband and son. respondent continued to pay the former's salaries. medical assistance. as the issue was beyond the . He likewise noted that there was a retirement plan for the benefit of the employees. The arbiter refused to rule on the legality of the deductions made by respondent from petitioner's total retirement benefits for taxation purposes.841. 1999. She was then confined at the St. Luke's Medical Center for rehabilitation. reimbursement of medical and rehabilitation expenses.76. exemplary. petitioner could no longer collect separation pay over and above her retirement benefits. As a consequence of petitioner's termination from employment.

e. Contrary to the Labor Arbiter and NLRC's conclusions. i. petitioner's claim for illegal deduction falls within the tribunal's jurisdiction. Issues: Whether the deductions made by respondent from petitioner’s total retirement benefits for taxation purposes is beyond the jurisdiction of the NLRC Held: No. 21 In view of her non-entitlement to retirement benefits. it sustained the denial of petitioner's claim for damages for the latter's failure to substantiate the same. therefore. the tribunal set aside the Labor Arbiter's decision & partly granted the appeal. Lastly. rather. . the Labor Arbiter denied the same as the former's dismissal was not tainted with bad faith. It is. including the amount withheld by respondent for taxation purposes.. petitioner elevated the matter to the Court of Appeals which affirmed the NLRC decision. collective bargaining agreement (CBA) or other employment contract. for humanitarian consideration. a money claim arising from the employer-employee relationship. The NLRC therefore ordered the payment of the other benefits promised by the respondent. • On appeal to the National Labor Relations Commission (NLRC).jurisdiction of the NLRC. Lastly. • Unsatisfied. the Labor Arbiter found that the same may be granted only upon the submission of a certificate of enrollment. The issue of deduction for tax purposes is intertwined with the main issue of whether or not petitioner's benefits have been fully given her. which clearly falls within the jurisdiction of the Labor Arbiter and the NLRC. It is noteworthy that petitioner demanded the completion of her retirement benefits. she was dismissed from employment due to a disease/disability under Article 284 20 of the Labor Code. the amounts received by petitioner should then be treated as her separation pay. Though not legally obliged to give the other benefits. • The NLRC emphasized that petitioner was not retired from the service pursuant to law. educational assistance. On the matter of educational assistance. as to petitioner's claim for damages and attorney's fees. respondent volunteered to grant them.

. the petitioners were instructed to attend an investigation by respondent's "Security and Fraud Prevention SubDepartment" regarding an April 3. moral and exemplary damages.5 million pesos in Philippine Currencies • at the Police Station. FERDINAND PINEDA and GOGFREDO CABLING. and attorney's fees . respondents." they were surprised to receive "on February 23. • "Mr. 1993 incident in Hongkong at which Joseph Abaca. "a hearing" on which "did not push through" until almost two (2) years after. private respondents filed with the NLRC a petition 1for injunction which prays for reinstatement of private respondents. • Aggrieved by said dismissal. 1993 currency smuggling in Hong Kong. petitioner. • Private respondents are flight stewards of the petitioner. but instead. Joseph Abaca volunteered the information that the real owner of said money • as petitioners "thought that they were already fully cleared of the charges. vs. • on April 15. Mr. 1995" terminating their services for alleged violation of respondent's Code of Discipline "effective immediately". a Memorandum dated February 22. INC. as they no longer received any summons/notices on the intended "additional hearings" mandated by the Disciplinary Board.ARTICLE 218 PHILIPPINE AIRLINES. Both were dismissed from the service for their alleged involvement in the April 3. . award of full backwages. respondent's Avionics Mechanic in Hongkong "was intercepted by the Hongkong Airport Police at Gate 05 the ramp area of the Kai TakInternational Airport while about to exit said gate carrying a bag said to contain some 2. NATIONAL LABOR RELATIONS COMMISSION. 1993. the petitioners were administratively charged. Joseph Abaca finally gave exculpating statements to the board in that he cleared petitioners from any participation or from being the owners of the currencies. 1995.. Abaca claimed that he just found said plastic bag at the Skybed Section of the arrival flight where petitioners served as flight stewards of said flight the petitioners sought "a more detailed account of what this HKG incident is all about". and at which hearing Mr.

a justiciable dispute. maintaining. adversary proceeding in a court of law." 9 A "justiciable controversy" is "one involving an active antagonistic assertion of a legal right on one side and a denial thereof on the other concerning a real. changing. or arranging the terms and conditions of employment regardless of whether or not the disputants stand in the proximate relation of employers and employees. a" (l) "Labor Dispute" includes any controversy or matter concerning terms or conditions of employment. petitioner moved for reconsideration on the ground that the NLRC erred in granting a temporary injunction order when it has no jurisdiction to issue an injunction or restraining order since this may be issued only under Article 218 of the Labor Code if the case involves or arises from labor disputes. inc. the NLRC issued a temporary mandatory injunction 2 enjoining petitioner to cease and desist from enforcing its February 22. fixing. • such is denied by the NLRC ruling that: they have jurisdiction and that what we have here is not a labor dispute as long as it concedes that as defined by law. and not a mere theoretical question or issue.• On April 3." The term "labor dispute" is defined as "any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating. • On May 4. which application if not granted "may cause grave or irreparable damage to any party or render ineffectual any decision in favor of such party." 10 . 1995. either at law or in equity. 1995. even without a complaint for illegal dismissal tiled before the labor arbiter. entertain an action for injunction and issue such writ enjoining petitioner Philippine Airlines. from enforcing its Orders of dismissal against private respondents. and ordering petitioner to reinstate the private respondents to their previous positions? HELD: NO—THE power of the NLRC to issue an injunctive writ originates from "any labor dispute" upon application by a party thereof. ISSUE: Can the National Labor Relations Commission (NLRC)." 8 The term "controversy" is likewise defined as "a litigated question. a civil action or suit. 1995 Memorandum of dismissal.

hear and decide any of the cases therein enumerated. 21 Thus. In the present case. as an extraordinary remedy. or the parties agree to submit the matter to voluntary arbitration pursuant to Article 263 (g) of the Labor Code. there is no labor dispute between the petitioner and private respondents as there has yet been no complaint for illegal dismissal filed with the labor arbiter by the private respondents against the petitioner. is not favored in labor law considering that it generally has not proved to be an effective means of settling labor disputes. therefore. no other officer or tribunal can take cognizance of. mediation and arbitration. reinstatement of private respondents. injunctions may be issued only in cases of extreme necessity based on legal grounds clearly established. In short. considering that Section 1 of Rule XI of the New Rules of Procedure of the NLRC makes injunction only an ancillary remedy in ordinary labor disputes Finally. after due consultations or hearing and when all efforts at conciliation are exhausted which factors. On the other hand. the NLRC shall have exclusive appellate jurisdiction over all cases decided by labor arbiters as provided in Article 217(b) of the Labor Code. As such. meaning. an injunction. it cannot entertain the private respondents' petition for injunction which challenges the dismissal orders of petitioner.Taking into account the foregoing definitions. and attorney's fees. it is an essential requirement that there must first be a labor dispute between the contending parties before the labor arbiter. the petition should have been filed with the labor arbiter who has the original and exclusive jurisdiction to hear and decide the cases involving all workers. the jurisdiction of the NLRC in illegal dismissal cases is appellate in nature and. 20 It has been the policy of the State to encourage the parties to use the non-judicial process of negotiation and compromise. award of full backwages. Article 218(e) of the Labor Code does not provide blanket authority to the NLRC or any of its divisions to issue writs of injunction. are clearly absent in the present case. however. moral and exemplary damages. whether agricultural or non-agricultural. The only exceptions are where the Secretary of Labor and Employment or the NLRC exercises the power of compulsory arbitration. . The jurisdiction conferred by the foregoing legal provision to the labor arbiter is both original and exclusive. The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal. This is clear from the allegations in the petition which prays for.

The posted paper which contains the corresponding price for the work to be accomplished by a worker is identified by its P. De Jesus then filed a complaint for illegal dismissal against Pioneer. In her handwritten explanation. No. de Jesus received a memorandum from Pioneer’s personnel manager requiring her to explain why no disciplinary action should be taken against her for dishonesty and tampering of official records and documents with the intention of cheating as P.O.O. 3824 which has an attached price list for trimming the ribs and admitted that she may have been negligent in presuming that the same work was to be done with P. The NLRC ruled that de Jesus was negligent in presuming that the ribs of P. In 1992. Number.ARTICLE 223 PIONEER TEXTURIZING CORP.O. NLRC (GR No. after observing that de Jesus made some further trimming on P. 3853 allegedly required no trimming. however.O. No.O. Three days later. No. She thereafter submitted tickets corresponding to the work done to her supervisor. The LA noted that de Jesus was amply accorded procedural due process in her termination from service. No. No. since 1980. The memorandum also placed her under preventive suspension for 30 days. 3853 should likewise be trimmed for having the same style and design as P. she worked on P. but not for dishonesty or tampering. 3853 by trimming the cloths’ ribs. v. the LA held Pioneer of illegal dismissal and ordered Pioneer to reinstate de Jesus to her former position with payment of full backwages. No. No.O.O. 3853. 16 October 1997) Francisco FACTS: Lourdes de Jesus has been a reviser/trimmer of Pioneer Texturizing Corp. . Pioneer nonetheless terminated her from employment and sent her a notice of termination upon expiry of her preventive suspension. As a reviser/trimmer. de Jesus based her assigned work on a paper note posted by Pioneer.O. 3853 and that her dismissal was not justified. 118651.O. 3853 as it had the same style and design as P. she maintained that she merely committed a mistake in trimming P.

which it did in this case. anchored substantially on the NLRC’s alleged error in holding that de Jesus is entitled to reinstatement and backwages. a timely appeal coupled by the posting of an appropriate supersedeas bond. however. The provision of Article 223 is clear that an award for reinstatement shall be immediately executory even pending appeal . It cannot relate to an award or order of reinstatement still to be appealed or pending appeal which Article 223 contemplates. In declaring that a reinstatement order is not self-executory and needs a writ of execution. The NLRC declared that the status quo between the parties should be maintained and affirmed the LA’s order of reinstatement. Pioneer filed a partial motion for reconsideration which the NLRC denied.” It must be construed to mean exactly what it says. HELD: NO. Pioneer filed a petition to the SC. shows that the necessity for a writ of execution under Article 224 applies only to final and executory decisions which are not within the coverage of Article 223. the SC in a prior case adverted to the rule provided under Article 224. even pending appeal… The posting of a bond by the employer shall not stay the execution for reinstatement provided.3824. Article 223 of the Labor Code expressly provides that “insofar as the reinstatement aspect is concerned. because it claims that de Jesus was not illegally dismissed in the first place. Article 224 states that the need for a writ of execution applies only within five years from the date of a decision. It further maintains that even if a writ of execution was issued. an order or award becomes final and executory. thus Pioneer could not entirely be faulted for dismissing de Jesus. effectively forestalled and stayed execution of the reinstatement order of the LA. shall be immediately be executory. The NLRC further directed Pioneer to pay de Jesus her back salaries from the date she filed her motion for execution up to the date of the promulgation of the decision. ISSUE: W/N an order for reinstatement needs a writ of execution. but without backwages. A closer examination. Pioneer also claims that an order for reinstatement is not self executory and stresses that there must be a writ of execution which may be issued by the NLRC or by the LA motu proprio or on motion of an interested party.

or inaction on the of the LA or the NLRC could easily delay the issuance of the writ thereby setting at naught the strict mandate and noble purpose envisioned by the said Article. however. it is ruled that an award or order for reinstatement is self-executory. the employee has no way of knowing if he has to report for work or not. one which operates no further than may be necessary to achieve its specific purpose. The notification is based on practical considerations for without notice. the legislature is presumed to have ordained a valid and sensible law. if the requirements of Article 224 were to govern. In either instance... After receipt of the decision or resolution ordering the employee’s reinstatement. . To require the application for and issuance of a writ of execution as prerequisites for the execution of a reinstatement award would certainly betray and run counter to the very object and intent of Article 223. then the executory nature of a reinstatement order or award contemplated in Article 223 will be unduly circumscribed and rendered ineffectual. The reason is simple. i.e. the appellate tribunal concerned may enjoin or suspend the reinstatement order in the exercise of its sound discretion. A mere continuance or postponement of a scheduled hearing.and the posting of a bond by the employer shall not stay the execution for reinstatement. the Court is simply adhering and giving meaning to the rule that all doubts in the interpretation and implementation of labor laws should be resolved in favor of labor. the employer has a right to choose whether to re-admit the employee to work under the same terms and conditions prevailing prior to his dismissal or to reinstate the employee in the payroll. Henceforth. to make n award of reinstatement immediately enforceable. In enacting the law. i. On appeal. the employer has to inform the employee of his choice. In ruling that an order or award for reinstatement does not require a writ of execution. for instance. The legislative intent is quite obvious.e. the immediate execution of a reinstatement order. In other words. An application for a writ of execution and its issuance could be delayed for numerous reasons. even pending appeal.

petitioner and Pabayo alleged that they were instigated by PAL to take the drugs. the complainants were acquitted by the RTC in the criminal case charging them of violation of Republic Act 6425. Thus. it ordered reinstatement to their former positions but without backwages.R. INC. During the period of their appeal with the NLRC. They were required to answer the charges and were placed under preventive suspension. Petitioner Alejandro Roquero and Rene Pabayo were ground equipment mechanics of respondent Philippine Airlines. ROQUERO VS.Petition denied. The NLRC ruled in favor of the complainants finding PAL guilty of instigation. Inc. During the pendency of the case. 5. 2003. they received a “notice of administrative charge” for violating the PAL Code of Discipline. The Court of . They were caught red-handed possessing shabu within the company premises by PAL Security and NARCOM personnel. Subsequently. FACTS 1. The Labor Arbiter granted the motion but PAL refused to executed on the ground that they have already filed a petition for review before the Supreme Court. 3. G. APRIL 22. 152329. 4. Roquero and Pabayo did not appeal the decision but filed a motion for a writ of execution of the reinstatement order. LA decision is reinstated. PUNO. J. Roquero and Pabayo were dismissed by PAL. PAL and Pabayo executed a compromise agreement and the latter withdrew the case with regard to him. 2. NO. PHILIPPINE AIRLINES. The Labor Arbiter upheld the dismissal but awarded the parties separation pay. (PAL). In a Memorandum. In their answer. they filed a case for illegal dismissal. However.

YES. Roquero’s job was with the maintenance and repair of PAL’s airplanes. He cannot discharge that duty if he is a drug user. and (3) must show that the employee has become unfit to continue working for the employer. it (1) must be serious. while in the company premises or on duty. a dereliction of duty. Can the executory nature of the reinstatement order be halted by a petition filed in the higher courts without any restraining order or preliminary injunction having been ordered in the meantime? HELD 1. Hence. ISSUES 1. a forbidden act. even if he was instigated to take the drugs. Petitioner cannot also complain that he was denied procedural due process for PAL complied with the two-notice requirement before dismissing him. The twinnotice rule requires (1) the notice which apprises the employee of the particular acts or omissions for which his dismissal is being sought along with . takes or is under the influence of prohibited or controlled drugs. section 4 of the PAL Code of Discipline stating. He violated Chapter 2. or hallucinogenic substances or narcotics shall be dismissed.” Serious misconduct is defined as “the transgression of some established and definite rule of action. and implies wrongful intent and not mere error in judgement.” For serious misconduct to warrant the dismissal of an employee. His failure to do this job can mean great loss of lives and properties. Roquero is guilty of serious misconduct for possessin and using shabu. Was Roquero’s dismissal valid? 2.Article VII. (2) must relate to the performance of the employee’s duty. he has no right to be reinstated to his position. It is of public knowledge that drugs can damage the mental faculties. willful in character. “any employee who.Appeals upheld the dismissal but did not award the separation pay on the ground that one who has been validly dismissed is not entitled to those benefits.

6715. from the time of the decision of the NLRC until the finality of the decision of the SC. NO. it was mandatory for PAL to actually reinstate Roquero or reinstate him in the payroll. On the other hand. No. In the case at bar. The unjustified refusal of the employer to reinstate a dismissed employee entitles him to payment of his salaries effective from the time the employer failed to reinstate him despite the issuance of a writ of execution. Thus. 2. The order of reinstatement is immediately executory. Hence. as if he was reinstated. more so if he actually rendered services during the period. it is ministerial upon the Labor Arbiter to implement the order of reinstatement.the opportunity for the employee to air his side. 6715. no restraining order was granted. as amended by Section 12 of Republic Act No. and (2) the subsequent notice to of the employer’s decision to dismiss him. Technicalities have no room in labor case where the Rules of Court are applied only in a suppletory manner and only to effectuate the objectives of the Labor Code and not to defeat it. it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal of the higher court.3 . PAL must pay Roquero the salary he is entitled to. even if the reinstatement order of the Labor Arbiter is reversed on appeal. paragraph 3 of the Labor Code. and Section 2 of the NLRC Interim Rules on Appeals under RA No. Having failed to do so. The rationale being the law itself laid down a compassionate policy as to vivify and enhance the provisions of the 1987 Constitution on labor and the working man. the employee is not required to reimburse whatever salary he has received for he is entitled to such. provide that an order of reinstatement by the Labor Arbiter is immediately executory even pending appeal. Both were given by respondent PAL. Article 223. if the employee has been reinstated during the appeal period and such order is reversed with finality. Unless there is a restraining order issued.

3. He argued that the act of APC of withholding his promotion rendered his continued employment with it oppressive and unjust. 1997 up to the promulgation of this decision on the amount of P1. ZAMORA G.00 in the concept of moral damages and P1. After completing training. NO. It was only on May 22. complainant was still employed with it.AIR PHILIPPINES CORPORATION vs. APC appealed to NLRC assailing it’s liability for constructive dismissal. Pay complainant the amount of P2. Pay complainant his full backwages from May 15. And ordered the following: 1. not because he was forced to resign.30 within 15 days. Grand Air. but ordered the latter to pay Zamora his unpaid salaries and allowance totaling P198.000.00 as exemplary damages. . when the complaint was filed on May 14. constructive or otherwise. He therefore asked that APC be held liable for constructive dismissal. Zamora filed a Complaint with the Labor Arbiter. It held that no dismissal.000. 2006 AUSTRIA-MARTINEZ. 148247 August 7.502. 1997. It pointed out that. APC denied that it dismissed complainant. Yet subsequent thereto NLRC modified it’s decision. 2.R. 4. The Labor Arbiter ruled in favor of Zamora and declared APC liable for constructive dismissal.000. he inquired about his promotion but APC did not act on it. took place. ENRICO E. it continued to give him assignments as flight deck crew. J.000.732. which the Labor Arbiter issued the corresponding writ of execution directing APC to reinstate complainant to his former position. The NLRC granted the appeal.: FACTS: Enrico Zamora (Zamora) was employed with Air Philippines Corporation (APC) as a B-737 Flight Deck Crew. Meanwhile. but because he had joined a rival airline. Pay attorney’s fees equivalent to 10% of the total award. Zamora filed a Motion for Execution of the order of reinstatement. He applied for promotion to the position of airplane captain and underwent the requisite training program. still granting the appeal of APC. 1997 that complainant stopped reporting for work.500. Reinstate complainant to his position as B-737 Captain without loss of seniority right immediately. instead.

[Test of Relevancy-] in that they may provide the basis for a determination of a prima facie case of abuse of discretion.APC sought a partial reconsideration but NLRC denied the same. We grant the petition. the Decision of the Labor Arbiter. APC filed a Petition for Certiorari with the CA. CA dismissed the petition for failure of APC to "attach copies of all pleadings (such complaint." Subsequently. Hence. and the Resolution of the NLRC enjoining implementation of the writ of execution. A petition lacking such documents contravenes paragraph 2. answer. APC’S only issue was whether the NLRC committed grave abuse of discretion in granting respondent unpaid salaries while declaring him guilty of abandonment of employment.the Order of the Labor Arbiter authorizing Sheriff Fulgencio Lavarez to implement the writ of execution. if it . W/N CA WAS CORRECT IN THE ACT OF DISMISSING APC’S PETITION FOR CERTIORARI ON THE GROUND THAT APC FAILED TO ATTACH COPIES OF ALL PLEADINGS AND OTHER MATERIAL PORTIONS OF THE RECORD AND THE ACT OF DENYING APC’S MR. CA denied the motion for reconsideration. INSPITE THE FACT THAT APC SUBMITTED COPIES OF ALL PLEADINGS AND DOCUMENTS REQUIRED. are required to be attached to a petition for certiorari. parts of case records and documents which are material and pertinent. the petition must be given due course or reinstated. and attached to it the pleadings and portions of the case record required by the Court of Appeals. certified true copies of the Resolutions of the NLRC . Rule 65 and may be dismissed outright under Section 3. and photocopies of the notice of garnishment. 2. if it is shown that the omission has been rectified by the subsequent submission of the documents required.502. position paper) and other material portions of the record as would support the allegations therein. APC filed a Motion for Reconsideration. ISSUE: 1.30? HELD: 1. NLRC justified the grant of salaries and allowances to Zamora arose from the order of his reinstatement which is executory even pending appeal of respondent questioning the same. this Petition for Review on Certiorari under Rule 45. pursuant to Article 223 of the Labor Code. APC attached to its petition. However. W/N NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING APC LIABLE TO ZAMORA FOR PHP 198. Section 1. Only those pleadings. Rule 46.

it is . Omission of these documents from the petition will not warrant its dismissal. not all pleadings and parts of case records are required to be attached to the petition. we resolve it here and now to expedite matters.. is not petrified. However. We hold that the NLRC did not commit grave abuse of discretion in holding petitioner liable to respondent forP198. Third. even if the order of reinstatement of the Labor Arbiter is reversed on appeal. It was therefore unreasonable of the Court of Appeals to have dismissed it. or that it will serve the higher interest of justice that the case be decided on the merits. guideposts it must follow: First. Thus. There are. Second. In Roquero v. a petition lacking copies of essential pleadings and portions of the case record may be dismissed. There was no need at all for copies of the position papers and other pleadings of the parties. There is no more obstacle to the petition for certiorari against NLRC taking its course. Other pleadings and portions of case records need not accompany the petition. these would have only cluttered the docket. 2. however. whether said document will make out a prima facie case of grave abuse of discretion as to convince the court to give due course to the petition. we resolved the same issue as follows: We reiterate the rule that technicalities have no room in labor cases where the Rules of Court are applied only in a suppletory manner and only to effectuate the objectives of the Labor Code and not to defeat them. unless the court will require them in order to aid it in its review of the case. Philippine Airlines. it need not be appended if it is shown that the contents thereof can also be found in another document already attached to the petition. it will suffice that only a certified true copy of the judgment is attached. Only those which are relevant and pertinent must accompany it. It is readily apparent in this case that the Court of Appeals was overzealous in its enforcement of the rules. This rule.had been previously dismissed. As a general rule.30. Inc. however. rather than remand it to the Court of Appeals for resolution. The test of relevancy is whether the document in question will support the material allegations in the petition.502. a petition lacking an essential pleading or part of the case record may still be given due course or reinstated upon showing that petitioner later submitted the documents required. even if a document is relevant and pertinent to the petition. Hence. More so that petitioner later corrected the purported deficiency by submitting copies of the pleadings and other documents.

On the other hand. a continuing threat or danger to the survival or even the life of the dismissed or separated employee and his family. Lansangan and Cendana admitted to the wrongdoing and were terminated for extremely serious offenses The two then filed a case of illegal dismissal against Amkor.obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. of a decision reinstating a dismissed or separated employee since that saving act is designed to stop. with respect to decisions reinstating employees. G. x x x Then.. INC. The Labor Arbiter (LA) ordered for their reinstatement to their former positions without backwages.) Inc. by and pursuant to the same power (police power). National Labor Relations Commission. SECOND DIVISION (Carpio Morales. pending appeal. J.) Payment of backwages and other benefits is justified only if the employee was unjustly dismissed. but dismissed the complaint on basis of Lansangan and Cendana’s guilt. we held: In short. 4 LUNESA O. No. NO. the employee is not required to reimburse whatever salary he received for he is entitled to such. LANSANGAN AND ROCITA CENDAñA vs. the law itself has determined a sufficiently overwhelming reason for its execution pending appeal. 2009 CARPIO MORALES. 177026 January 30. the State may authorize an immediate implementation. and moved for the writ of execution. AMKOR TECHNOLOGY PHILIPPINES. although temporarily since the appeal may be decided in favor of the appellant. In Aris (Phil. LANSANGAN AND ROCITA CENDAÑA v.: LUNESA O. if the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality.R. An email was sent to Amkor Technology Philippines (Amkor) through their General Manager alleging thatthe Lunesa Lansangan (Lansangan) and Rocita Cendana (Cendana) stole company time. The two did not appeal the finding that they were guilty. v. more so if he actually rendered services during the period. AMKOR TECHNOLOGY PHILIPPINES577 SCRA 493 (2009). J. Amkor appealed the decision to the National Labor Relations .

It does not apply where there is no finding of illegal dismissal. granted to a dismissed or separated employee while the case for illegal dismissal is pending appeal. PAL. The NLRC deleted the grant for reinstatement of the LA. the said court’s order for it to pay backwages to petitioners for the therein specified period has become final. inclusive of allowances. as well as Article 223 of the Labor Code on which the CA relied. they not having appealed it.Commissions and was subsequently granted.become final. . Article 223 concerns itself with an interim relief. Since AMKOR did not appeal from the appellate court’s decision. as what happened in Roquero. as in the present case. as stated earlier. finds no application in the present case. The Court of Appeals affirmed the decision of the NLRC that Lansangan and Cendana were guilty of misconduct and ordered AMKOR to "pay petitioners their corresponding backwages for the period between the Arbiter’s decision up to the date of the NLRC Decision. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages. Such finding had. In Roquero vs. The Arbiter found Lansangan and Cendana’s dismissal to be valid. the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. Only petitioners have come to this Court via the present petition for review. Philippine Airlines. and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. NLRC so states –– payment of backwages and other benefits is justified only if the employee was unjustly dismissed. petitioners are not entitled to full backwages as their dismissal was not found to be illegal. Both parties’ filed their respective motions for partial reconsideration which were denied. ISSUE: Whether or not Lansangan and Cendana are entitled to backwages and reinstatement covering the periods stated above and whether or not the ruling of CA was based on law and prevailing Jurisprudence? HELD: The Petition Fails. citing Article 223 of the Labor Code and Roquero v. Following Article 279 which provides: In cases of regular employment. Agabon v.

reminding her about the charges and also gave a list of 12 Client’s to whom the transactions were considered by Citibank as fraudulent.A.. demanding for a bill of particulars regarding the charges against Genuino. CITIBANK.-x CITIBANK.. 1993. and keep them in Citibank. 5 MARILOU S.. 2007 x . and AZIZ RAJKOTWALA vs..A. to Correct/repair/compensate the damage you have caused the clients.96. exclusive of benefits and privileges..No.487. WILLIAM FERGUSON. sent a letter to Genuino...: FACTS: Citibank is an American banking corporation duly licensed to do business in the Philippines. and peso and dollar deposits for. Vargas. William Ferguson was the Manila.. She received a monthly compensation of PhP 60.. Genuino was tasked to solicit investments. Citibank’s Country Senior Human Resources Officer. NLRC. On August 23... N.. or if the same cannot be substantiated. Citibank's counsel replied a day before the . WILLIAM FERGUSON. GENUINO vs. to afford her an opportunity to explain. Genuino was employed by Citibank in 1992 as Treasury Sales Division Head with the rank of Assistant Vice-President. Nos. Nos. She likewise asked to substantiate the charge of fraudulent transactions against their client. Victorino P.... G.. Genuino's counsel replied through a letter. In reply. NLRC and MARILOU GENUINO. 142753-54 VELASCO.. and to sell and/or push for the sale of Citibank's financial products... The letter likewise directed Genuino to explain in writing 3 days from the receipt why her employment should not be terminated in view of her involvement in these irregular transactions..R. N...R. 1993. Genuino was informed she was under preventive suspension. and AZIZ RAJKOTWALA. Country Corporate Officer and Business Head of the Global Finance Bank of Citibank while Aziz Rajkotwala was the International Business Manager for the Global Consumer Bank of Citibank. Citibank sent Genuino a letter charging her with "knowledge and/or involvement" in transactions "which were irregular or even fraudulent. G. for the account and benefit of Citibank. 21. J. Genuino wrote a reply to Citibank and asked the bank about the factual and legal basis of its charges." In the same letter. She was also directed to appear in an administrative investigation which was set on Sept.. JR. 142732-33 December 4..

The Labor Arbiter rendered a Decision finding the dismissal of Genuino to be without just cause and in violation of her right to due process. and that Genuino and Santos realized substantial financial gains.000 x 8. carries a penal sanction. Citibank's counsel noted Genuino's failure to appear in the investigation and gave Genuino til Sept 23 to submit her written explanation. and ordered to immediately reinstate Genuino to her former position or its equivalent without loss of seniority rights and other benefits. On September 27. However.800. Her lawyers wrote a letter to Citibank's counsel asking specifically the transaction. all in violation of existing company policy and the Corporation Code. Genuino did not submit her written explanation. (2) DECLARING the dismissal of the complainant valid and legal on the ground of serious misconduct and breach of trust and confidence and consequently DISMISSING the complaint a quo. In reply. it further contained charges against Genuino for violating the conflict of interest rule. The NLRC reversed the Labor Arbiter's decision with modification: (1) SETTING ASIDE the appealed decision of the Labor Arbiter. (2) willful breach of the trust reposed upon her by the bank. Genuino did not appear in the administrative investigation.23 mos.). Global Pacific. with backwages in the amount of P493.scheduled investigation. 1993. Genuino filed before the Labor Arbiter a Complaint against Citibank for illegal suspension and illegal dismissal with damages and prayer for temporary restraining order and/or writ of preliminary injunction. the dates.5 Million Pesos and P500. namely." Genuino's employment was terminated by Citibank on grounds of (1) serious misconduct. which for your information. Both parties appealed to the NLRC.00 by way of moral and exemplary damages plus 10% of the total monetary award as attorney's fees. Citibank informed Genuino that it found Genuino and Santos used "facilities of Genuino's family corporation. funds and amount involved. Likewise the Arbiter ordered Citibank to pay the amount of 1. but (3) ORDERING the respondent bank to pay the salaries due to the complainant from the date it .00 (P60.000. yet the charges were still unsubstantiated. personally and actively participated in the diversion of bank clients' funds to products of other companies that yielded interests higher than what Citibank products offered. and (3) commission of a crime against the bank.

Citibank questioned the NLRC's order to pay Genuino's salaries from the date of reinstatement until the date of the NLRC's decision. (Item (3) of the Decision of the NLRC) Ordinarily. CA’s Ruling:.000. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or.000 as indemnity for non-observance of due process. paragraph 3 of the Labor Code.00 a month. Meanwhile. 223. If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid. the employer is required to reinstate the employee during the pendency of the appeal pursuant to Art. Genuino P5. However. AND WHETHER OR NOT GENUINO IS ENTITLED TO BACKWAGES HELD: The dismissal was for just cause but lacked due process. as found by the Labor Arbiter) up to and until the date of this decision.000.00 instead as indemnity for non-observance of due process. upon reconsideration. Marilou S. Genuino Not entitled to backwages. to pay Ms. The parties' motions for reconsideration were denied by the NLRC. then the employer has the right to . The posting of a bond by the employer shall not stay the execution for reinstatement provided herein. The CA’s decisions are AFFIRMED with MODIFICATION that Genuino is entitled to PhP 30. On petition for review to CA. denied due course to and dismissed both petitions. even pending appeal. merely reinstated in the payroll. it Upheld NLRC’s ruling aside from No 3 above and ordered Citibank. shall immediately be executory. at the option of the employer.reinstated complainant in the payroll (computed at P60. Genuino prayed for the reversal of the NLRC's decision insofar as her dismissal was not for just cause and not in accordance with due process. insofar as the reinstatement aspect is concerned. The CA. the decision of the Labor Arbiter reinstating a dismissed or separated employee. ISSUE: WHETHER OR NOT THE DISMISSAL OF GENUINO IS FOR A JUST CAUSE AND IN ACCORDANCE WITH DUE PROCESS. which states: In any event.

Considering that Genuino was not reinstated to work or placed on payroll reinstatement. then the employee is entitled to the compensation received for actual services rendered without need of refund. if the employee was reinstated to work during the pendency of the appeal. For loss of trust and confidence to be a valid ground for an employee's dismissal. and company practices. In order to constitute as just cause for dismissal. Citibank also filed two criminal complaints against Genuino and Santos for violations of the conflict of interest rule provided in Sec. it must be substantial and not arbitrary. We also held that: [L]oss of confidence is a valid ground for dismissing an employee and proof beyond reasonable doubt of the employee's misconduct is not required. and her dismissal is based on a just cause. 144 of the Corporation Code. SC finds Genuino's dismissal justified. the act complained of should have arisen from the performance of the employee's duties.require the dismissed employee on payroll reinstatement to refund the salaries s/he received while the case was pending appeal. then she is not entitled to be paid the salaries stated in NLRC’s Decision. or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her employer under existing laws. 31 in relation to Sec. collective bargaining agreement provisions. Genuino was aware of the bank's Corporate Policy Manual specifically with regard to avoiding conflicts of interest. another corporation controlled by Genuino and Santos. under the control of Global and Torrance. Art. Also. It is sufficient if there is some basis for such loss of confidence or if the employer has reasonable ground to believe or to entertain the moral conviction that the employee concerned is responsible for the . However. and must be founded on clearly established facts sufficient to warrant the employee's separation from work. Citibank discovered that Genuino and Santos were instrumental in the withdrawal by bank depositors of PhP 120 million of investments in Citibank which was subsequently invested in another foreign bank. loss of confidence should relate to acts inimical to the interests of the employer. 282(c) of the Labor Code provides that an employer may terminate an employment for fraud or willful breach by the employee of the trust reposed in him/her by his/her employer or duly authorized representative.

nominal damages are in order but the amount is hereby raised to PhP 30. xxxxxxxxxxx All facts Below are for purposes of explaining the importance of “notice” in administrative/Labor related cases Only. This should be construed as a period of at least 5 calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them. She held a position of trust and confidence. v. All the pieces of evidence compel us to conclude that Genuino did not have her employer's interest. nevertheless. we explained. You may disregard reading it. Effect of Citibank’s failure to afford Genuino Due process: In view of Citibank's failure to observe due process. and of Global and Torrance. All told. Assuming that Citibank did not engage in the same securities dealt with by Global and Torrance.000. and keep them in Citibank. incase raised as a question. and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. She could not likewise feign ignorance of the businesses of Citibank. and peso and dollar deposits for.misconduct and that the nature of his participation therein rendered him unworthy of the trust and confidence demanded by his position. Citibank had valid grounds to dismiss Genuino on ground of loss of confidence. In a string of cases. Inc. it is to the interests of Citibank to retain its clients and continue investing in Citibank. we have repeatedly said that the requirement of twin notices must be met. Mamac. In the recent case of King of Kings Transport. however. As Genuino was tasked to solicit investments. the following should be considered in terminating the services of employees: (1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them. as you may. But I included it here anyway. "Reasonable opportunity" under the Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. The letter of the bank's clients which attested that the withdrawals from Citibank were made upon their instructions is of no import. consult a .

The purpose of this notice is to sufficiently apprise the employee of the acts complained of and enable him/her to prepare his/her defense. During the hearing or conference. the NLRC held that "the function of a 'notice to explain' is only to state the basic facts of the employer's charges. with the assistance of a representative or counsel of their choice. are violated and/or which among the grounds under Art. 1993 in question have fully served.union official or lawyer. the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. Moreover. and (2) grounds have been established to justify the severance of their employment. in order to enable the employees to intelligently prepare their explanation and defenses. The letters did not adduce the extent of Genuino's alleged knowledge and participation in the diversion . the notice should specifically mention which company rules. and decide on the defenses they will raise against the complaint. (2) After serving the first notice. which x x x the letters of September 13 and 17. the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered. A general description of the charge will not suffice. (3) After determining that termination of employment is justified. gather data and evidence. (2) present evidence in support of their defenses. if any. On the contrary. and (3) rebut the evidence presented against them by the management. Moreover. The letters sent by Citibank did not identify the particular acts or omissions allegedly committed by Genuino. The Labor Arbiter found that Citibank failed to adequately notify Genuino of the charges against her. this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement. Lastly. the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them. 282 is being charged against the employees." The Implementing Rules and Regulations of the Labor Code provide that any employer seeking to dismiss a worker shall furnish the latter a written notice stating the particular acts or omissions constituting the grounds for dismissal. the employees are given the chance to defend themselves personally.

While the bank gave Genuino an opportunity to deny the truth of the allegations in writing and participate in the administrative investigation. In Agabon.. the award of PhP 5.000. we explained: The violation of the petitioners' right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. Considering the prevailing circumstances in the case at bar. The two-notice requirement of the Labor Code is an essential part of due process. In view of Citibank's failure to observe due process. it provides a vindication or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules.00.of bank's clients' funds. however. and the circumstances surrounding the alleged irregular transactions. . nominal damages are in order but the amount is hereby raised to PhP 30.000 pursuant to Agabon v. NLRC. taking into account the relevant circumstances. the acts attributed to Genuino that conflicted with the bank's interests. As explained in King of Kings Transport. The amount of such damages is addressed to the sound discretion of the court. manner of diversion. The first notice informing the employee of the charges should neither be pro-forma nor vague. and amounts involved. The NLRC's order for payroll reinstatement is set aside.000. the dismissal could not be in accordance with due process. Since the notice of charges given to Genuino is inadequate. ample opportunity to be heard is especially accorded the employees sought to be dismissed after they are specifically informed of the charges in order to give them an opportunity to refute such accusations leveled against them. At the very least. Inc. It should set out clearly what the employee is being held liable for.000 to Genuino as indemnity for non-observance of due process under the CA's Resolution is increased to PhP 30. We believe this form of damages would serve to deter employers from future violations of the statutory due process rights of employees. were not specified in the notices/letters. the fact remains that the charges were too general to enable Genuino to intelligently and adequately prepare her defense. The employee should be afforded ample opportunity to be heard and not mere opportunity. Thus. we deem it proper to fix it at P30.

It also ordered Cottonway to pay petitioners their proportionate thirteenth month pay and their full backwages inclusive of allowances and other benefits. service incentive leave pay and thirteenth month pay against Cottonway Marketing Corp. President and General Manager. NERISSA BUENVIAJE. JOSIE RAQUERO. GENALYN PELOBELLO. SONIA FLORES. Protasio issued a Decision finding petitioners' retrenchment valid and ordering Cottonway to pay petitioners' separation pay and their proportionate thirteenth month pay./JCT International Trading. petitioners. underpayment of salary.1 • Labor Arbiter Romulus S. THE HONORABLE COURT OF APPEALS (SPECIAL FORMER SEVENTH DIVISION). BELMA OLIVIO. COTTONWAY MARKETING CORPORATION and MICHAEL G. TONG. hired as promo girls for their garment products. • (Cottonway). after their services were terminated as the company was allegedly suffering business losses.000. as found by the Labor Arbiter) up to and until the date of this decision.The directive of the NLRC ordering Citibank "to pay the salaries due to the complainant from the date it reinstated complainant in the payroll (computed at P60. MARY JANE MENOR. respondents. or their monetary equivalent . REBECCA EBOL. HONORABLE ARBITER ROMULUS PROTASIO.2 • On appeal. the NLRC reversed the Decision of the Labor Arbiter and ordered the reinstatement of petitioners without loss of seniority rights and other privileges. petitioners filed with the National Labor Relations Commission (NLRC) a complaint for illegal dismissal. in view of its finding that the dismissal of Genuino is for a legal and valid ground. and ERLINDA ARGA." Is hereby cancelled. vs. ESTRELITA MANAHAN.00 a month. and Network Fashion Inc. and non-payment of premium pay for rest day. FACTS: • Petitioners were former employees of Cottonway Marketing Corp.

1 The Labor Arbiter. and consequently. however. but to no avail. The Commission denied Cottonway’s prayer. Protasio issued an Order declaring that the award of backwages and proportionate thirteenth month pay to petitioners should be limited from the time of their illegal dismissal up to the time they received the notice of termination sent by the company upon their refusal to report for work despite the order of reinstatement.15 The Commission thus ordered that . Labor Arbiter Romulus S. petitioners filed with the NLRC a motion for execution of its Decision on the ground that it had become final and executory. The Commission ruled that its Decision has become final and executory and it is the ministerial duty of the Labor Arbiter to issue the corresponding writ of execution to effect full and unqualified implementation of said decision.• • • • • • • • • computed from the time their salaries were withheld from them up to the date of their actual reinstatement. they sent letters to petitioners informing them that they have lost their employment for failure to comply with the return to work order.3 Cottonway filed a motion for reconsideration which was denied by the Commission. was set aside by the Commission in its. Cottonway filed with the NLRC a manifestation stating that they have complied with the order of reinstatement by sending notices requiring the petitioners to return to work.10 the Research and Investigation Unit of the NLRC issued an additional computation of petitioners' monetary award in accordance with the NLRC decision.7 the Research and Investigation Unit of the NLRC issued a computation of the monetary award in accordance with the Decision of the NLRC.11 Cottonway filed with the NLRC a supplemental manifestation praying that the Commission allow the reception of evidence with respect to their claim that petitioners have found new employment. He cited the fact that petitioners failed to report to their posts without justifiable reason despite respondent's order requiring them to return to work immediately.8 Cottonway filed a manifestation with the NLRC reiterating their allegations in their manifestation and further alleging that petitioners have already found employment elsewhere. The Labor Arbiter ordered the Research and Investigation Unit to recompute the monetary award in accordance with its ruling.

The Court of Appeals thus held that the amount of backwages due them should be computed only up to the time they received their notice of termination. it would change the substance of the questioned decision which awards backwages to the complainants up to their reinstatement. or whether it should be computed from the time of their illegal dismissal until their actual reinstatement as argued by the petitioners.the records of the case be remanded to the Labor Arbiter for execution. It would be unjust and inequitable then to require petitioner to pay private respondents their backwages even after the latter were validly terminated when in fact petitioner dutifully complied with the reinstatement aspect of the decision. 1996 as argued by respondent company. • Petitioners now question the Decision and Resolution of the Court of Appeals."17 • The Court of Appeals denied petitioners' motion for reconsideration . The deliberate failure to report for work after notice to return bars reinstatement. RULING: We agree with the petitioners. • Cottonway filed a petition for certiorari with the Court of Appeals seeking the reversal of the ruling of the NLRC and the reinstatement issued by Labor Arbiter Romulus S. ISSUE: which is the computation of petitioners' backwages—whether it should be limited from the time they were illegally dismissed until they received the notice of termination sent by Cottonway on August 1. "Petitioner's termination of private respondents' employment by reason of their failure to report for work despite due notice being valid. the period within which the monetary award of private respondents should be based is limited up to the time of private respondents' receipt of the respective notices of termination on August 27. . Cottonway moved for reconsideration of said resolution. to no avail. Protasio. • The appellate court granted the It ruled that petitioners' reinstatement was no longer possible as they deliberately refused to return to work despite the notice given by Cottonway. 1998. Thus. private respondents' reinstatement is no longer possible because of the supervening event which is their valid termination. Again.

The underlying reason for this ruling is that the employee. Act No. be diminished or reduced by the earnings derived by him elsewhere during the period of his illegal dismissal. a closer adherence to the legislative policy behind Rep. computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement. employees who are illegally dismissed are entitled to full backwages. 1996 has become final and executory upon the dismissal by this Court of Cottonway’s petition for certiorari assailing said decision and the denial of its motion for reconsideration.. The decision of the NLRC dated March 26. It is a fundamental rule that when a judgment becomes final and executory. Act No. NLRC:22 backwages to be awarded to an illegally dismissed employee. while full backwages have to be paid by the employer as part of the price or penalty he has to pay for illegally dismissing his employee. without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. Said judgment may no longer be disturbed or modified by any court or tribunal. Thus. 6715. 1996.2 1 The Court explained the meaning of "full backwages" in the case of Bustamante vs. 6715 is to give more benefits to workers than was previously given them under the Mercury Drug rule or the "deduction of earnings elsewhere" rule. must still earn a living to support himself and family. Cottonway was ordered to reinstate petitioners to their former position without loss of seniority rights and other privileges and to pay them full backwages Under R. The clear legislative intent of the amendment in Rep. If reinstatement is no longer possible.A. inclusive of allowances and other benefits or their monetary equivalent. the backwages shall be computed from the time of their illegal termination up to the finality of the decision. i. and any . should not. the provision calling for "full backwages" to illegally dismissed employees is clear. Thus. Index animi sermo est. as a general rule. 6715 points to "full backwages" as meaning exactly that. therefore.The issue of the legality of the termination of petitioners’ services has been settled in the NLRC decision dated March 26. plain and free from ambiguity and. while litigating the legality (illegality) of his dismissal.e. must be applied without attempted or strained interpretation. In other words." (emphasis supplied) The Court does not see any reason to depart from this rule in the case of herein petitioners. it becomes immutable and unalterable.

before finally deciding to dispense with their services. their counsel. We note that Cottonway. The records also do not bear any proof that all the petitioners received a copy of the letters. the valid termination of petitioners' employment due to their refusal to return to work despite notice from respondents reinstating them to their former position. and the issuance of a writ of execution becomes a ministerial duty of the court.23 To justify the modification of the final and executory decision of the NLRC dated March 26. Petitioners' alleged failure to return to work cannot be made the basis for their termination. 1996. the Court of Appeals cited the existence of a supervening event.amendment or alteration which substantially affects a final and executory judgment is void. sent a reply letter to Atty. however. the employer must prove the concurrence of two elements: (1) the failure to report for work or absence without valid or justifiable reason. De Luna stating that his clients were not in a position to comply with said order since the NLRC has not yet finally disposed of the case. Once a judgment becomes final and executory. Roberto LL. Cottonway merely claimed that some of them have left the country and some have found other employment. The petitioners. This. were not able to promptly comply with the order.24 The facts of this case do not support the claim of Cottonway that petitioners have abandoned their desire to return to their previous work at said company. Peralta. that is. A decision that has attained finality becomes the law of the case regardless of any claim that it is erroneous. including the entire proceedings held for that purpose. Cottonway sent individual notices to petitioners mandating them to immediately report to work. It appears that three months after the NLRC had rendered its decision ordering petitioners’ reinstatement to their former positions. Such failure does not amount to abandonment which would justify the severance of their employment. Instead. Atty. We cannot concur with said ruling. . the prevailing party can have it executed as a matter of right. did not give the petitioners the opportunity to explain why they were not able to report to work. and (2) a clear intention to sever the employer-employee relationship. To warrant a valid dismissal on the ground of abandonment. The writ of execution must therefore conform to the judgment to be executed and adhere strictly to the very essential particulars.

This the Court cannot allow. awards. Article 223 of the Labor Code provides: "ART. in his reply to the company’s first letter. We are not convinced. awards. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein. petitioners continued to file pleadings to ensure that the company would comply with the directive of the NLRC to reinstate them and to pay them full backwages in case said decision is upheld. Appeal. or orders. or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions. Petitioners’ failure to instantaneously abide by the directive gave them a convenient reason to dispense with their services. merely reinstated in the payroll. petitioners never abandoned their suit against Cottonway. Moreover. Cottonway cited Article 223 of the Labor Code providing that the decision ordering the reinstatement of an illegally dismissed employee is immediately executory even pending appeal as basis for its decision to terminate the employment of petitioners. does not necessarily mean that petitioners were no longer interested in resuming their employment at Cottonway as it has not been shown that their employment in the other companies was permanent.however. While the case was pending appeal before the NLRC. It appears that the supposed notice sent by Cottonway to the petitioners demanding that they report back to work immediately was only a scheme to remove the petitioners for good. even pending appeal. petitioners’ counsel expressed willingness to meet with the company’s representative regarding the satisfaction of the NLRC decision." . insofar as the reinstatement aspect is concerned. the Court of Appeals and this Court. shall immediately be executory. 223. x x x x x x x x x x x x. x x x xxxxxxxxx In any event. – Decisions. at the option of the employer. It should be expected that petitioners would seek other means of income to tide them over during the time that the legality of their termination is under litigation. the decision of the Labor Arbiter reinstating a dismissed or separated employee. Furthermore.

The foregoing provision is intended for the benefit of the employee and cannot be used to defeat their own interest. The law mandates the employer to either admit the dismissed employee back to work under the same terms and conditions prevailing prior to his dismissal or to reinstate him in the payroll to abate further loss of income on the part of the employee during the pendency of the appeal. But we cannot stretch the language of the law as to give the employer the right to remove an employee who fails to immediately comply with the reinstatement order, especially when there is reasonable explanation for the failure. If Cottonway were really sincere in its offer to immediately reinstate petitioners to their former positions, it should have given them reasonable time to wind up their current preoccupation or at least to explain why they could not return to work at Cottonway at once. Cottonway did not do either. Instead, it gave them only five days to report to their posts and when the petitioners failed to do so, it lost no time in serving them their individual notices of termination. We are, therefore, not impressed with the claim of respondent company that petitioners have been validly dismissed on August 1, 1996 and hence their backwages should only be computed up to that time. We hold that petitioners are entitled to receive full backwages computed from the time their compensation was actually withheld until their actual reinstatement, or if reinstatement is no longer possible, until the finality of the decision, in accordance with the Decision of the NLRC dated March 26, 1996 which has attained finality.28

FIRST DIVISION G.R. No. 177467 March 9, 2011

PFIZER, INC. AND/OR REY GERARDO BACARRO, AND/OR FERDINAND CORTES, AND/OR ALFRED MAGALLON, AND/OR ARISTOTLE ARCE, Petitioners, vs. GERALDINE VELASCO, Respondent. DECISION LEONARDO-DE CASTRO, J.: Private respondent Geraldine L. Velasco was employed with petitioner PFIZER, INC. as Professional Health Care Representative . Velasco had a

medical work up for her high-risk pregnancy and was subsequently advised bed rest which resulted in her extending her leave of absence. • PFIZER through its Area Sales Manager, herein petitioner Ferdinand Cortez, personally served Velasco a "Show-cause Notice". Aside from mentioning about an investigation on her possible violations of company work rules regarding "unauthorized deals and/or discounts in money or samples and unauthorized withdrawal and/or pull-out of stocks" and instructing her to submit her explanation on the matter within 48 hours from receipt of the same, the notice also advised her that she was being placed under "preventive suspension" for 30 days and consequently ordered to surrender the following "accountabilities;" 1) Company Car, 2) Samples and Promats, 3) CRF/ER/VEHICLE/SOA/POSAP/MPOA and other related Company Forms, 4) Cash Card, 5) Caltex Card, and 6) MPOA/TPOA Revolving Travel Fund. The following day, petitioner Cortez together with one Efren Dariano retrieved the above-mentioned "accountabilities" from Velasco’s residence. • Velasco sent a letter addressed to Cortez denying the charges. In her letter, Velasco claimed that the transaction with Mercury Drug, Magsaysay Branch covered by her check (no. 1072) in the amount ofP23,980.00 was merely to accommodate two undisclosed patients of a certain Dr. Renato Manalo. In support thereto, Velasco attached the Doctor’s letter and the affidavit of the latter’s secretary. • Velasco received a "Second Show-cause Notice" informing her of additional developments in their investigation. According to the notice, a certain Carlito Jomen executed an affidavit pointing to Velasco as the one who transacted with a printing shop to print PFIZER discount coupons. Jomen also presented text messages originating from Velasco’s company issued cellphone referring to the printing of the said coupons. Again, Velasco was given 48 hours to submit her written explanation on the matter. Velasco sent a letter to PFIZER via Aboitiz courier service asking for additional time to answer the second Show-cause Notice. • Velasco filed a complaint for illegal suspension with money claims before the Regional Arbitration Branch. PFIZER sent her a letter inviting her to a disciplinary hearing . Velasco received it under protest and informed PFIZER via the receiving copy of the said letter that she had lodged a complaint against the latter and that the issues that may be raised in the July 22 hearing "can be tackled during the hearing of her case" She likewise opted to withhold answering the Second Showcause Notice, Velasco received a "Third Show-cause Notice," together

• •

with copies of the affidavits of two Branch Managers of Mercury Drug, asking her for her comment within 48 hours. Finally PFIZER informed Velasco of its "Management Decision" terminating her employment. the Labor Arbiter rendered its decision declaring the dismissal of Velasco illegal, ordering her reinstatement with backwages and further awarding moral and exemplary damages with attorney’s fees. On appeal, the NLRC affirmed the same but deleted the award of moral and exemplary damages.5 PFIZER appealed to the National Labor Relations Commission (NLRC) but its appeal was denied via the NLRC Decision7 dated October 20, 2004, which affirmed the Labor Arbiter’s ruling but deleted the award for damages PFIZER moved for reconsideration but its motion was denied for lack of merit. PFIZER filed with the Court of Appeals .Court of Appeals upheld the validity of respondent’s dismissal from employment,.

“Having found the termination of Geraldine L. Velasco’s employment in accordance with the two notice rule pursuant to the due process requirement and with just cause, her complaint for illegal dismissal is hereby DISMISSED.10” • Respondent filed a Motion for Reconsideration which the Court of Appeals resolved in the assailed wherein it affirmed the validity of respondent’s dismissal from employment but modified its earlier ruling by directing PFIZER to pay respondent her wages from the date of the Labor Arbiter’s Decision up to the Court of Appeals Decision PFIZER filed the instant petition assailing the aforementioned Court of Appeals Resolutions. ISSUE:Whether or not the Court of Appeals committed a serious but reversible error when it ordered Pfizer to pay Velasco wages from the date of the Labor Arbiter’s decision ordering her reinstatement until November 23, 2005, when the Court of Appeals rendered its decision declaring Velasco’s dismissal valid.13 The petition is without merit.

It is PFIZER’s contention in its Memorandum16 that "there was no unjustified refusal on [its part] to reinstate [respondent] Velasco during the pendency of the appealDuring the pendency of the case with the Court of Appeals and prior to its November 23, 2005 Decision, PFIZER claimed that it had already required respondent to report for work on July 1, 2005. However, according to PFIZER, it was respondent who refused to return to work when she wrote PFIZER, through counsel, that she was opting to receive her separation pay and to avail of PFIZER’s early retirement program. In PFIZER’s view, it should no longer be required to pay wages considering that (1) it had already previously paid an enormous sum to respondent under the writ of execution issued by the Labor Arbiter; (2) it was allegedly ready to reinstate respondent as of July 1, 2005 but it was respondent who unjustifiably refused to report for work; (3) it would purportedly be tantamount to allowing respondent to choose "payroll reinstatement" when by law it was the employer which had the right to choose between actual and payroll reinstatement; (4) respondent should be deemed to have "resigned" and therefore not entitled to additional backwages or separation pay; and (5) this Court should not mechanically apply Roquero but rather should follow the doctrine in Genuino v. National Labor Relations Commission18which was supposedly "more in accord with the dictates of fairness and justice."19 We do not agree. At the outset, we note that PFIZER’s previous payment to respondent of the amount of P1,963,855.00 (representing her wages from December 5, 2003, or the date of the Labor Arbiter decision, until May 5, 2005) that was successfully garnished under the Labor Arbiter’s Writ of Execution dated May 26, 2005 cannot be considered in its favor. Not only was this sum legally due to respondent under prevailing jurisprudence but also this circumstance highlighted PFIZER’s unreasonable delay in complying with the reinstatement order of the Labor Arbiter. A perusal of the records, including PFIZER’s own submissions, confirmed that it only required respondent to report for work on July 1, 2005, as shown by its Letter20 dated June 27, 2005, which is almost two years from the time the order of reinstatement was handed down in the Labor Arbiter’s Decision dated December 5, 2003. the Court held that an award or order of reinstatement is immediately selfexecutory without the need for the issuance of a writ of execution in

accordance with the third paragraph of Article 22322 of the Labor Code. In that case, we discussed in length the rationale for that doctrine, to wit: The provision of Article 223 is clear that an award [by the Labor Arbiter] for reinstatement shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement . The legislative intent is quite obvious, i.e., to make an award of reinstatement immediately enforceable, even pending appeal. To require the application for and issuance of a writ of execution as prerequisites for the execution of a reinstatement award would certainly betray and run counter to the very object and intent of Article 223,i.e., the immediate execution of a reinstatement order. The reason is simple. An application for a writ of execution and its issuance could be delayed for numerous reasons. A mere continuance or postponement of a scheduled hearing, for instance, or an inaction on the part of the Labor Arbiter or the NLRC could easily delay the issuance of the writ thereby setting at naught the strict mandate and noble purpose envisioned by Article 223. In other words, if the requirements of Article 224 [including the issuance of a writ of execution] were to govern, as we so declared inMaranaw, then the executory nature of a reinstatement order or award contemplated by Article 223 will be unduly circumscribed and rendered ineffectual. In enacting the law, the legislature is presumed to have ordained a valid and sensible law, one which operates no further than may be necessary to achieve its specific purpose. Statutes, as a rule, are to be construed in the light of the purpose to be achieved and the evil sought to be prevented. x x x In introducing a new rule on the reinstatement aspect of a labor decision under Republic Act No. 6715, Congress should not be considered to be indulging in mere semantic exercise. x x x23 (Italics in the original; emphasis and underscoring supplied.) In the case at bar, PFIZER did not immediately admit respondent back to work which, according to the law, should have been done as soon as an order or award of reinstatement is handed down by the Labor Arbiter without need for the issuance of a writ of execution. Thus, respondent was entitled to the wages paid to her under the aforementioned writ of execution. At most, PFIZER’s payment of the same can only be deemed partial compliance/execution of the Court of Appeals Resolution and would not bar respondent from being paid her wages from May 6, 2005 to November 23, 2005.

It would also seem that PFIZER waited for the resolution of its appeal to the NLRC and, only after it was ordered by the Labor Arbiter to pay the amount of P1,963,855.00 representing respondent’s full backwages from December 5, 2003 up to May 5, 2005, did PFIZER decide to require respondent to report back to work via the Letter dated June 27, 2005. PFIZER makes much of respondent’s non-compliance with its return- towork directive by downplaying the reasons forwarded by respondent as less than sufficient to justify her purported refusal to be reinstated. In PFIZER’s view, the return-to-work order it sent to respondent was adequate to satisfy the jurisprudential requisites concerning the reinstatement of an illegally dismissed employee. To reiterate, under Article 223 of the Labor Code, an employee entitled to reinstatement "shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll." It is established in jurisprudence that reinstatement means restoration to a state or condition from which one had been removed or separated. The person reinstated assumes the position he had occupied prior to his dismissal. Reinstatement presupposes that the previous position from which one had been removed still exists, or that there is an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by the employee.25 Applying the foregoing principle to the case before us, it cannot be said that with PFIZER’s June 27, 2005 Letter, in belated fulfillment of the Labor Arbiter’s reinstatement order, it had shown a clear intent to reinstate respondent to her former position under the same terms and conditions nor to a substantially equivalent position. To begin with, the return-to-work order PFIZER sent respondent is silent with regard to the position or the exact nature of employment that it wanted respondent to take up as of July 1, 2005. Even if we assume that the job awaiting respondent in the new location is of the same designation and pay category as what she had before, it is plain from the text of PFIZER’s June 27, 2005 letter that such reinstatement was not "under the same terms and conditions" as her previous employment, considering that PFIZER ordered respondent to report to its main office in Makati City while knowing fully well that respondent’s previous job had her stationed in Baguio City (respondent’s place of residence) and it was still

respondent’s decision to claim separation pay over reinstatement had no legal effect. 2005 until November 23.32 In the case at bar. not only because there was no genuine compliance by the employer to the reinstatement order but also because the employer chose not to act on said claim. As it was. however. The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal. PFIZER’s liability for backwages continued to accrue for the period not covered by the writ of execution dated May 24.26 Likewise. If it was PFIZER’s position that respondent’s act amounted to a "resignation" it should have informed respondent that it was accepting her resignation and that in view thereof she was not entitled to separation pay. 2005. We stress here that a finding of strained relations must nonetheless still be supported by substantial evidence. benefits and other privileges and the action is not motivated by discrimination. it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court.) . that respondent is entitled to separation pay in addition to backwages.necessary for respondent to be briefed regarding her work assignments and responsibilities. There must be no showing that it is unnecessary. x x x.27 Similarly. the management prerogative to transfer personnel must be exercised without grave abuse of discretion and putting to mind the basic elements of justice and fair play. The Court is cognizant of the prerogative of management to transfer an employee from one office to another within the business establishment. made in bad faith. or effected as a form of punishment or demotion without sufficient cause. we have previously held that an employee’s demand for separation pay may be indicative of strained relations that may justify payment of separation pay in lieu of reinstatement. 2005 Decision. including her relocation benefits.31 This is not to say. inconvenient and prejudicial to the displaced employee. PFIZER did not respond to respondent’s demand at all. provided that there is no demotion in rank or diminution of his salary. prior to the Court of Appeals’ reversal in the November 23. PFIZER’s failure to effect reinstatement and accept respondent’s offer to terminate her employment relationship with the company meant that.37 (Emphasis supplied.

The third party may avail himself of alternative remedies cumulatively. ARTICLE 224 Yupangco Cotton Mills. The RTC dismissed the case. It filed a 3rd party claim with the Labor Arbiter and recovery of property and damages with the RTC. Hence. vs. 2005. . The MFR was denied. respondent is entitled to payment of her wages for the period after December 5. the court dismissed the petition on the ground of forum shopping and that the proper remedy was appeal in due course. 2003 until the Court of Appeals Decision dated November 23. Issue: Whether the CA has jurisdiction over the case Held: YES A third party whose property has been levied upon by a sheriff to enforce a decision against a judgment debtor is afforded with several alternative remedies to protect its interests. if the law is to serve its noble purpose. the Court reiterates the principle that reinstatement pending appeal necessitates that it must be immediately self-executory without need for a writ of execution during the pendency of the appeal. It cannot be denied that. CA (2002) Facts: Petitioner contended that a sheriff of the NLRC “erroneously and unlawfully levied” certain properties which it claims as its own. Furthermore. and any attempt on the part of the employer to evade or delay its execution should not be allowed. In the CA. notwithstanding the finding therein that her dismissal was legal and for just cause. not certiorari or mandamus. Inc. Petitioner filed a MFR and argued that the filing of a complaint for accion reinvindicatoria with the RTC was proper because it is a remedy specifically granted to an owner (whose properties were subjected to a writ of execution to enforce a decision rendered in a labor dispute in which it was not a party). petitioner filed this appeal. and one will not preclude the third party from availing himself of the other alternative remedies in the event he failed in the remedy first availed of. the payment of such wages cannot be deemed as unjust enrichment on respondent’s part. under our statutory and jurisprudential framework. we likewise restate our ruling that an order for reinstatement entitles an employee to receive his accrued backwages from the moment the reinstatement order was issued up to the date when the same was reversed by a higher court without fear of refunding what he had received. Thus.In sum.

[9] To answer for the monetary award. Respondents were hired by PACSI as pilers or haulers tasked to manually carry bags of sugar. CAMPO. the institution of such complaint will not make petitioner guilty of forum shopping. [G. (PACSI). February 16. Even if a third party claim was denied.702." This prompted petitioner to file an action for prohibition and damages with . a third party may still file a proper action with a competent court to recover ownership of the property illegally seized by the sheriff. ANDO. Bacolod City..Thus.R. NLRC Acting Sheriff Romeo Pasustento issued a Notice of Sale on Execution of Personal Property over the property covered by Transfer Certificate of Title (TCT) No. They filed a case for illegal dismissal and some money claims with the National Labor Relations Commission (NLRC). Inc. T-140167 in the name of "Paquito V. VI. NLRC decided in the favor of respondents directing petitioner to pay 442. Upon finality of the decision. respondents were dismissed from employment. a third party may avail himself of the following alternative remedies: a) File a third party claim with the sheriff of the Labor Arbiter. And. It also affirmed the Labor Arbiter's decision with modification of the award for separation pay to four other employees who were similarly situated. In June 1998. ET AL. 184007. Ando. the third party may appeal the denial to the NLRC. The filing of a third party claim with the Labor Arbiter and the NLRC did not preclude the petitioner from filing a subsequent action for recovery of property and damages with the Regional Trial Court. respondents moved for its execution. Petitioner and PACSI appealed to the NLRC. Regional Arbitration Branch No. Facts: Petitioner was the president of Premier Allied and Contracting Services. 2011] PAQUITO V. PETITIONER. ANDRESITO Y. and b) If the third party claim is denied. Ando x x x married to Erlinda S. No. VS. RESPONDENTS. In a decision but failed to perfect his appeal because he did not pay the supersedes bond.

and. not a party to the case. the RTC went on to decide the merits of the case. however. There is no question that the property belongs to petitioner and his wife. It also sets out the procedure for the filing of a third-party claim There is no doubt in our mind that petitioner's complaint is a third. first and foremost. in fact. Whether the notice of sale was valid. not to the corporation. asserts title to or right to the possession of the property levied upon. it is. hence. could not be subject of the execution sale.prayer for theissuance of (TRO) before the RTC Bacolod City.party claim within the cognizance of the NLRC. Since it is the corporation that was the judgment debtor. or awards rendered in labor cases by appropriate officers and tribunals of the Department of Labor and Employment. Thus. and not to the corporation. execution should be made on the latter's properties. Held: CA did not. CA affirmed RTC decision hence this petition Issue: whether RTC has jurisdiction over disputes arising from labor decisions. Petitioner claimed that the property belonged to him and his wife. orders. It can be said . Despite lack of jurisdiction. Petitioner filed a petition for certiorari under Rule 65 before the CA. err in upholding the RTC's lack of jurisdiction to restrain the implementation of the writ of execution issued by the Labor Arbiter. The Court has long recognized that regular courts have no jurisdiction to hear and decide questions which arise from and are incidental to the enforcement of decisions. It defines a third-party claim as one where a person. RTC denied the prayer for TRO because lack of jurisdiction pursuant to the NLRC Manual on the Execution of Judgment. The NLRC Manual on the Execution of Judgment deals specificallywith third-party claims in cases brought before that body. To hold otherwise is to sanction splitting of jurisdiction which is obnoxious to the orderly administration of justice. the NLRC Manual on the Execution of Judgment that governs any question on the execution of a judgment of that body. petitioner's remedy was to file a third-party claim with the NLRC Sheriff. Petitioner may indeed be considered a "third party" in relation to the property subject of the execution vis-à-vis the Labor Arbiter's decision.

the Court can consider that petitioner's wife is a third party within contemplation of the law. in his capacity as President. i. Since he was sued in a representative capacity.R. The broad powers granted to the Labor Arbiter and to the National Labor Relations Commission by Articles 217.that the property belongs to the conjugal partnership.Petitioners. Jurisdiction. nonetheless. FFW and JUANITO S. or the courts. At the very least. while petitioner availed himself of the wrong remedy to vindicate his rights. Likewise. Thus. therefore. and there can be no end to the controversy without the full and proper implementation of the commission's directives. FACUNDO. Execution is an essential part of the proceedings before the NLRC. A sheriff. continues until the case is finally terminated. Petitioner claims that the property sought to be levied does not belong to PACSI.. 3RD ASSIGNMENT G. as the controversy under consideration. . justice demands that this Court look beyond his procedural missteps and grant the petition. the property could not be made to answer for the judgment obligation of the corporation. vs. the conjugal partnership. in connection with or relating to labor disputes.e. 2. has no authority to attach the property of any person except that of the judgment debtor. to the exclusion of the regular courts. the judgment debtor. 162943 December 6.. notice of sale null and void The power of the NLRC. to execute its judgment extends only to properties unquestionably belonging to the judgment debtor alone. In sum. There is no denying that the present controversy arose from the complaint for illegal dismissal. there is no showing that the sheriff ever tried to execute on the properties of the corporation. 218 and 224 of the Labor Code can only be interpreted as vesting in them jurisdiction over incidents arising from. No. The subject matter of petitioner's complaint is the execution of the NLRC decision. once acquired. 2010 EMPLOYEES UNION OF BAYER PHILS. but to him and his wife. and not in his personal capacity. the property belongs to a third party. not to petitioner alone.

FFW and Bayer informing them of the decision of the majority of the union members to disaffiliate from FFW. Respondents. During the negotiations. J. EUBP. accepted Bayer’s wage-increase proposal. INC. Subsequently. . Facundo (Facundo). LONISHEN (President). ASUNCION AMISTOSO (HRD Manager). (2) rename the union as Reformed Employees Union of Bayer Philippines (REUBP). headed by its president Juanito S. Remigio’s splinter group wrote Facundo.BAYER PHILIPPINES. and by placing the union dues collected in a trust account until the conflict between the two groups is resolved. Remigio solicited signatures from union members in support of a resolution containing the decision of the signatories to: (1) disaffiliate from FFW.: FACTS: Petitioner Employees Union of Bayer Philippines (EUBP) is the exclusive bargaining agent of all rank-and-file employees of Bayer Philippines (Bayer).. prompting the Secretary of the Department of Labor and Employment (DOLE) to assume jurisdiction over the dispute. and is an affiliate of the Federation of Free Workers (FFW). With both seeking recognition from Bayer and demanding remittance of the union dues collected from its rank-and-file members. DIETER J. (4) abolish all existing officer positions in the union and elect a new set of interim officers. The said resolution was signed by 147 of the 257 local union members. EUBP’s grievance committee questioned Remigio’s action and reprimanded Remigio and her allies. VILLARAMA. without any authority from their union leaders. In 1997. JR. and (5) authorize REUBP to administer the CBA between EUBP and Bayer. during a companysponsored seminar. Respondent Avelina Remigio (Remigio) and 27 other union members. EUBP rejected Bayer’s 9.. EUBP filed a complaint for unfair labor practice (first ULP complaint) against Bayer for non-remittance of union dues. EUBP staged a strike. Bayer responded by deciding not to deal with either of the two groups.9% wage-increase proposal resulting in a bargaining deadlock. negotiated with Bayer for the signing of a collective bargaining agreement (CBA). The DOLE Secretary issued an arbitral award ordering EUBP and Bayer to execute a CBA Barely six months from the signing of the new CBA. (3) adopt a new constitution and by-laws for the union. AVELINA REMIGIO AND ANASTACIA VILLAREAL.

The CA sustained both the Labor Arbiter and the NLRC’s rulings. HELD:The petition is partly meritorious. . the two groups failed to settle their issues. Series of 2003 of the DOLE enumerate the following circumstances as inter/intra-union disputes. EUBP lodged a complaint against Remigio’s group before the Industrial Relations Division of the DOLE praying for their expulsion from EUBP for commission of "acts that threaten the life of the union.EUBP later sent a letter to Bayer asking for a grievance conference. Petitioners filed a second ULP complaint against herein respondents. dismissed the first ULP complaint for lack of jurisdiction. Sections 1 and 2. 40-03. XI AND . Mayor. including grievances arising from any violation of the rights and conditions of membership. viz: RULE INTER/INTRA-UNION DISPUTES OTHER RELATED LABOR RELATIONS DISPUTES Section 1. Apparently. Jr. The Regional Director of the Industrial Relations Division of DOLE issued a decision dismissing the issue on expulsion filed by EUBP against Remigio and her allies for failure to exhaust reliefs within the union and ordering the conduct of a referendum to determine which of the two groups should be recognized as union officers.15 to respondent Anastacia Villareal. Coverage.Inter/intra-union disputes shall include: (a) cancellation of registration of a labor organization filed by its members or by another labor organization. The BLR reversed the Regional Director’s ruling and ordered the management of Bayer to respect the authority of the dulyelected officers of EUBP in the administration of the prevailing CBA. or disputes arising from chartering or disaffiliation of the union. An intra-union dispute refers to any conflict between and among union members. ISSUE: Whether or not the act of the management of Bayer in dealing and negotiating with Remigio’s splinter group despite its validly existing CBA with EUBP can be considered unfair labor practice . Gan dismissed EUBP’s second ULP complaint for lack of jurisdiction. Rule XI of Department Order No. Bayer decided to turn over the collected union dues amounting to P254.857.Labor Arbiter Waldo Emerson R. violation of or disagreement over any provision of the union’s constitution and by-laws. Treasurer of REUBP." Labor Arbiter Jovencio Ll.

(j) violations of or disagreements over any provision in a union or workers’ association constitution and by-laws. (k) disagreements over chartering or registration of labor organizations and collective bargaining agreements. and (2) a petition for interpleader. (n) such other disputes or conflicts involving the rights to selforganization. union membership and collective bargaining – (1) between and among legitimate labor organizations. This includes: (1) cancellation of registration of unions and workers’ associations. of acceptance/non-acceptance for union (g) validity/invalidity of impeachment/expulsion of union and workers’ association officers and members. (d) deregistration of collective bargaining agreements. entity or group that is not a labor organization or workers’ association.(b) conduct of election of union and workers’ association officers/nullification of election of union and workers’ association officers. Section 2. (i) opposition to application for union and CBA registration. except interpretation of collective bargaining agreements. (m) violations of the rights of legitimate labor organizations. Coverage. (f) validity/invalidity membership. (l) violations of the rights and conditions of union or workers’ association membership. (e) validity/invalidity of union affiliation or disaffiliation. More importantly. (c) audit/accounts examination of union or workers’ association funds. (2) between and among members of a union or workers’ association. – Other related labor relations disputes shall include any conflict between a labor union and the employer or any individual. (h) validity/invalidity of voluntary recognition. the petitioners do not seek a determination of whether it is the Facundo group (EUBP) or the Remigio group (REUBP) . It is clear from the foregoing that the issues raised by petitioners do not fall under any of the aforementioned circumstances constituting an intra-union dispute.

It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties.)1avvphi1 . Petitioners’ ULP complaint cannot prosper as against respondents Remigio and Villareal because the issue. 40-03. we find that the evidence supports an answer in the affirmative. Accordingly. Lonishen and Amistoso liable for unfair labor practice? On this score. either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. To rule on the validity or illegality of their acts. which issue was within the jurisdiction of the NLRC. The dismissal of the second ULP complaint was therefore erroneous. (Emphasis supplied. the issue raised pertained only to the validity of the acts of management in light of the fact that it still has an existing CBA with EUBP. as against them. However. the Labor Arbiter and the NLRC will necessarily touch on the issues respecting the propriety of their disaffiliation and the legality of the establishment of REUBP – issues that are outside the scope of their jurisdiction. bargaining and negotiations between the employer and the union will never be truthful and meaningful. 253. But are Bayer. but only with respect to these two respondents. the duty to bargain collectively shall also mean that neither party shall terminate or modify such agreement during its lifetime. and no CBA forged after arduous negotiations will ever be honored or be relied upon. An employer should not be allowed to rescind unilaterally its CBA with the duly certified bargaining agent it had previously contracted with. as to respondents Remigio and Villareal. Instead. It must be remembered that a CBA is entered into in order to foster stability and mutual cooperation between labor and capital. Lonishen and Amistoso the question was whether they were liable for unfair labor practice. However. and decide to bargain anew with a different group if there is no legitimate reason for doing so and without first following the proper procedure. Thus as to Bayer. If such behavior would be tolerated. Duty to bargain collectively when there exists a collective bargaining agreement. we find that petitioners’ complaint was validly dismissed. as amended. plainly provides: ART. Article 253 of the Labor Code. – Where there is a collective bargaining agreement.which is the true set of union officers. the dismissal of the complaint was validly made. essentially involves an intra-union dispute based on Section 1 (n) of DOLE Department Order No.

the latter is behooved to observe the terms and conditions thereof bearing on union dues and representation. we explained the correlations of Article 248 (1) and Article 261 of the Labor Code to mean that for a ULP case to be cognizable by the Labor Arbiter. Respondent. VERCELES. in the Certificate of Registration issued by the DOLE. in Silva v. and for the NLRC to exercise appellate jurisdiction thereon.This is the reason why it is axiomatic in labor relations that a CBA entered into by a legitimate labor organization that has been duly certified as the exclusive bargaining representative and the employer becomes the law between them. the former indubitably abandons its recognition of the latter and terminates the entire CBA. 168583 July 26.: . and (2) the violation pertains to the economic provisions of the CBA. Additionally. vs. ATTY. ERNESTO C. the former may be held administratively and criminally liable for unfair labor practice.R. similar to what happened in this case. 2010 ATTY. such as utter disregard of the very existence of the CBA itself. when a valid and binding CBA had been entered into by the workers and the employer. This pronouncement in Silva. Compliance with the terms and conditions of the CBA is mandated by express policy of the law primarily to afford protection to labor and to promote industrial peace. the allegations in the complaint must show prima facie the concurrence of two things. namely: (1) gross violation of the CBA. Thus. it is specified that the registered CBA serves as the covenant between the parties and has the force and effect of law between them during the period of its duration. DEL CASTILLO. Indeed. G. J. Petitioner. should not be construed to apply to violations of the CBA which can be considered as gross violations per se. National Labor Relations Commission. No. MONTAÑO. ALLAN S. however. If the employer grossly violates its CBA with the duly recognized union. When an employer proceeds to negotiate with a splinter union despite the existence of its valid CBA with the duly certified and exclusive bargaining agent.

the Commission on Election (FFW COMELEC). Montano’s election on the fround that FFW Staff Association is not a legitimate labor organization. no doubt as to the BLR’s jurisdiction over the instant dispute involving member-unions of a federation arising from disagreement over the provisions of the federation’s constitution and by-laws. Montaño as FFW National Vice-President. Atty. Verceles (Atty. Verceles. thus. the FFW Staff Association. Montaño thus filed an Urgent Motion for Reconsideration. both in Chapter II thereof. Ernesto C. Atty.he was likewise designated officer-in-charge of FFW Legal Center. he joined the union of rank-and-file employees. informed him that he is not qualified for the position as his candidacy violates the 1998 FFW Constitution and By-Laws. The CA set aside the BLR’s Decision. However. Atty. and strong opposition and protest of respondent Atty. Montaño’s candidacy. The BLR rendered a Decision dismissing the petition for lack of merit. a delegate to the convention and president of University of the East Employees’ Association (UEEA-FFW) which is an affiliate union of FFW. the convention delegates allowed Atty.29 There is. Verceles filed a Motion for Reconsideration but it was denied by the BLR. Despite the pending motion for reconsideration with the FFW COMELEC. ISSUE: Wheteher or not CA gravely erred in upholding the jurisdiction of the BLR and granting the petition to annul Atty. and eventually became the employees’ union president . He emerged victorious and was proclaimed as the National Vice-President. Verceles). Section 226 of the Labor Code28 clearly provides that the BLR and the Regional Directors of DOLE have concurrent jurisdiction over inter-union and intra-union disputes. Such disputes include the conduct or nullification of election of union and workers’ association officers. Atty. Montaño filed his Comment with Motion to Dismiss on the grounds that the Regional Director of the Department of Labor and Employment (DOLE) and not the BLR has jurisdiction over the case. HELD: The petition is devoid of merit. Subsequently.FACTS: Atty. Montaño was nominated for the position of National VicePresident. The BLR has jurisdiction over intraunion disputes involving a federation. filed before the BLR a petition for the nullification of the election of Atty. Atty. particularly Section 76 of Article XIX8 and Section 25 (a) of Article VIII. Montaño worked as legal assistant of FFW Legal Center. We agree with BLR’s observation that: .

at the time of his nomination and election for the position in the Governing Board. Montaño. Montaño is not qualified to run as FFW National Vice-President in view of the prohibition established in Section 76.1awph!1 Section 76.’ The concept of domicile in labor relations regulation is equivalent to the place where the union seeks to operate or has established a geographical presence for purposes of collective bargaining or for dealing with employers concerning terms and conditions of employment. albeit challenged. Section 1 states that any complaint in this regard ‘shall be filed in the Regional Office where the union is domiciled.38 On this basis. this Bureau maintains original and exclusive jurisdiction over disputes arising from any violation of or disagreement over any provision of its constitution and by-laws. Montaño. the Committee shall have the power to .Rule XVI lays down the decentralized intra-union dispute settlement mechanism. It is well-settled that FFW. FFW COMELEC is vested with authority and power. because the geographical presence of a federation may encompass more than one administrative region. There is no dispute that Atty. he continued to perform his functions as staff member of FFW and no evidence was presented to show that he tendered his resignation.30 Atty. the FFW COMELEC disqualified Atty. Therefore. under the FFW Constitution and By-Laws. Even after he was elected. Pursuant to its authority under Article 226. operates in more than one administrative region. Montaño unqualified for the position for failing to meet the requirements set forth therein. Article XIX of the 1998 FFW Constitution and By-Laws. however.39 Under the Rules Implementing the Labor Code. The matter of venue becomes problematic when the intra-union dispute involves a federation. to screen candidates and determine their qualifications and eligibility to run in the election and to adopt and promulgate rules concerning the conduct of elections. this Bureau exercises original jurisdiction over intra-union disputes involving federations. having local unions all over the country. is the head of FFW Legal Center and the President of FFW Staff Association. The CA subsequently affirmed this ruling of the BLR but held Atty. To begin with. overturned FFW COMELEC’s ruling and held that the applicable provision is Section 26 of Article VIII. The BLR. We find that both the BLR and CA erred in their findings. Article XIX of the FFW Constitution and By-laws provides that no member of the Governing Board shall at the same time be an employee in the staff of the federation.

concur with the CA that Atty. LEANDRO C. MANILA. JESUS SAMIA. NARDS PABILONA. ANTONIO Z. has sufficient authority to adopt its own interpretation of the explicit provisions of the federation’s constitution and by-laws and unless it is shown to have committed grave abuse of discretion. 2007 EMILIO E. TULLO. FRANCISCO ESCOTO. ROMEO M. VICENTE R. Montaño’s candidacy in violation of the FFW Constitution is therefore correct. MASIGLAT. The FFW Constitution and By-laws are clear that no member of the Governing Board shall at the same time perform functions of the rank-and-file staff. REYNALDO ESPIRITU.R. Montaño is not qualified to run for the position but not for failure to meet the requirement specified under Section 26 (d) of Article VIII of FFW Constitution and By-Laws. MED-ARBITER TRANQUILINO C. HANS LEO J. FFW COMELEC. JOSE VITO. DANTE PARAO. ROMULO AQUINO. thus. EDWIN LAYUG. ROBERTO M. TABILOG. the election of Atty. DIOKNO. FELICITO MACASAET. DANTE M. in his capacity as Director of the Bureau of Labor Relations. its decision and ruling will not be interfered with.40 The Committee is also regarded as the final arbiter of all election protests. GAUDENCIO CAMIT. We. ANTONIO DE LUNA. EDGARDO VILLANUEVA. undeniably. We note that the CA’s declaration of the illegitimate status of FFW Staff Association is proscribed by law. REYNALDO REYES. Petitioners. The FFW COMELEC’s ruling which considered Atty. VERGARA. No. vs. LEANDRO M. owing to the preclusion of collateral attack. JR. ATIENZA. JAIME C. EDGARDO DAYA. EDGARDO SEVILLA. G. PABLO LUCAS.. MENDOZA. HON.prescribe rules on the qualification and eligibility of candidates and such other rules as may facilitate the orderly conduct of elections. . Accordingly. Montaño is disqualified to run for the position of National Vice-President in view of the proscription in the FFW Constitution and By-Laws on federation employees from sitting in its Governing Board. DOLE. and JOSE Z. Montaño as FFW VicePresident is null and void. REYES. MACAPULAY. 168475 July 4. The BLR erred in disregarding this clear provision. ALBERTO MABUGAT. We nonetheless resolve to affirm the CA’s finding that Atty.41 From the foregoing. ALCANTARA. TONG. ARMANDO YALUNG.. JR. CACDAC.

Rogelio Cervitillo. CHICO-NAZARIO.. LUZMINDO D. ALFREDO ESCALL. LEMUEL R. Valeriano (Ong. and a certain Leandro M. Alvarez. Macapulay as members. Respondents. and Jaime T. The certificates of candidacy of Nardito C. JR. The COMELEC rejected Jimmy S. Alvarez. Alfredo J. MAXIMO A. et al. GAVINO R. VALERIANO. Armando Yalung. CAOC. JAIME T. REYES. JOSE O. VIDANES. JR. et al. Marcelino Morelos..). MACLIT. Nardito C. private respondents Jimmy S. Jose Vito. GAUDENCIO JIMENEZ. Edwin Layug. Escall. BONIFACIO F. Petitioners and private respondents are members of FLAMES. . In their campaign. Jaime T. CIRUJANO. ROGELIO CERVITILLO. RAGASA.: FACTS: The First Line Association of Meralco Supervisory Employees (FLAMES) is a legitimate labor organization which is the supervisory union of Meralco..EVANGELINE ESCALL. and petitioners Jaime C. Ong’s candidacy on the ground that he was not a member of FLAMES. Ong. Private respondents Jimmy S. J. ONG. Reynaldo Espiritu. Tabilog filed a Petition for the nullification of the COMELEC order before the MedArbitration Unit of the Department of Labor and Employment (DOLE). Tong as its chairman. ALBERTO ALCANTARA. Alvarez. MARCELINO MORELOS. TAYAO. JR. JIMMY S. and Faustino Ermino (Daya. ARNALDO G. Reynaldo Reyes. Valeriano filed their respective certificates of candidacy. Escall. Evangeline Escall. CADVONA. Subsequently. Petitioners filed a Petition with the COMELEC seeking the disqualification of private respondents Edgardo Daya. ACORDA. The COMELEC was composed of petitioner Dante M. Valeriano were similarly rejected on the basis of the exclusion of their department from the scope of the existing collective bargaining agreement (CBA). and Jaime T. EDGARDO G. Pablo Lucas. and GIL G. Ong. Nards Pabilona. Antonio de Luna. JOHNSON S. Mendoza and Romeo M. NARDITO C. Nardito C. ALVAREZ. Leandro Tabilog. they allegedly colluded with the officers of the Meralco Savings and Loan Association (MESALA) and the Meralco Mutual Aid and Benefits Association (MEMABA) and exerted undue influence on the members of FLAMES. FAUSTINO ERMINO. Alberto Alcantara. DE VERA. Alfredo J. Alfredo J.). Escall.

" . HELD: The Petition is devoid of merit.The COMELEC issued a Decision. We affirm the finding of the Court of Appeals upholding the jurisdiction of the BLR. et al. et al. et al. – The Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of the Department of Labor shall have original and exclusive authority to act. Article 226 of the Labor Code is hereunder reproduced. thus: Sec. on all interunion and intra-union conflicts. subject to extension by agreement of the parties. issued a Decision in favor of private respondents. Petitioners elevated the case to the Court of Appeals via a Petition for Certiorari. The second paragraph of Article 226 of the same Code is likewise hereby amended to read as follows: "The Bureau shall have fifteen (15) calendar days to act on labor cases before it. 226. at their own initiative or upon request of either or both parties. Jr. Daya.. and d) Declare Holding of New Election to be Controlled and Supervised by the DOLE. Private respondents Daya. c) Declare Failure of Election. a Petition to: a) Nullify Order of Disqualification. Med-Arbiter Tranquilino B. The Bureau shall have fifteen (15) working days to act on labor cases before it. subject to extension by agreement of the parties.The Court of Appeals found petitioners’ appeal to be bereft of merit. 6715. officially disqualified to run and/or to participate in the FLAMES elections. to wit: ART. simply reads. Reyes.. affirming in toto the assailed Decision of the Med-Arbiter. 14. which is relied upon by petitioners in arguing that the BLR had been divested of its jurisdiction. declaring Daya. ISSUE: Whether or not the Court of Appeals committed grave abuse of discretion when it affirmed the jurisdiction of the BLR to take cognizance of the case. et al. The Director of the BLR issued a Resolution. along with Ong.. except those arising from the implementation or interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration. as couched in Republic Act No. petitioners filed an appeal before the Director of the BLR. Aggrieved. BUREAU OF LABOR RELATIONS. filed with the Med-Arbitration Unit of the DOLE-NCR. b) Nullify Election Proceedings and Counting of Votes. The amendment to Article 226. he interest of FLAMES. grievances or problems arising from or affecting labor-management relations in all workplaces whether agricultural or nonagricultural. and all disputes.

At issue is the propriety of the disqualification of private respondents Daya... unable to understand petitioners’ persistence in placing the controversy outside of the jurisdiction of the BLR. It remains as one which involves the grievance over the constitution and bylaws of a union. it being an intraunion dispute. Court of Appeals. it was an invocation of the power and authority of the BLR to act on an intra-union conflict. a labor union. viz: (z) "Intra-Union Dispute" refers to any conflict between and among union members. It requires no further interpretation. There is no question that this is one which involves a dispute within or inside FLAMES. et al. an intra-union dispute is defined under Section (z). The controversy in the case at bar is an intra-union dispute. brought the case to the BLR. Moreover. the same does not detract from the real character of the controversy. by the FLAMES COMELEC in the 7 May 2003 elections. et al.This Court in Bautista v. before the BLR was properly within its cognizance. an intra-union conflict would refer to a conflict within or inside a labor union. et al. We said that since Article 226 of the Labor Code has declared that the BLR shall have original and exclusive authority to act on all inter-union and intra-union conflicts. interpreting Article 226 of the Labor Code. and includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by-laws of a union. was explicit in declaring that the BLR has the original and exclusive jurisdiction on all inter-union and intra-union conflicts. The law is very clear. therefore. are not parties in the case. The Petition which was initiated by private respondents Daya. As defined.’s complaint filed before the Med-Arbiter failed to comply with the jurisdictional requirement because . the nonmembers of the union who were alleged to have aided private respondents Daya. including cases arising from chartering or affiliation of labor organizations or from any violation of the rights and conditions of union membership provided for in the Code. We cannot accept.. Rule I of the Rules Implementing Book V of the Labor Code. et al.. the contention of petitioners that the private respondents Daya. et al. We are. and it is a controversy involving members of the union. sought the help of non-members of the union in their election campaign to the detriment of FLAMES. there should be no more doubt as to its jurisdiction.35 More specifically.. and the Court of Appeals rightfully rejected. et al. when private respondents Daya. Indubitably. It must also be stressed that even as the dispute involves allegations that private respondents Daya. while an inter-union controversy or dispute is one occurring or carried on between or among unions.

Rizalino Uy filed a Manifestation requesting that the cases be terminated and closed. 1997 of petitioners. 2. RIZALINO UY G. hearings were conducted to determine the amount of wage differentials due the eight petitioners. 2005 Facts: As a final consequence of the final and executory decision of the Supreme Court which affirmed with modification the decision of the NLRC. Together with the manifestation is a Joint Affidavit dated May 5. On October 20. Together with said Manifestation is a Joint Affidavit in the local dialect. solely . FELIPE O. CARLOS DE LA CRUZ. Whether or not the petitioners’ affidavit waiving their awards in the labor case executed without the assistance of their counsel and labor arbiter is valid. of the six petitioners attesting that they have no more collectible amount from respondent and if there is any. MAGBANUA. 1997. Section 1 of Rule XIV of the Implementing Rules of Book V mandates the thirty percent (30%) requirement only in cases where the issue involves the entire membership of the union. six of the eight petitioners filed a Manifestation requesting that the cases be considered closed and terminated as they are already satisfied of what they have received from respondent. Whether or not the final and executory judgment of the Supreme Court could be subject to compromise settlement. which is clearly not the case before us. ROLLY ARNAIZ. There is no justification to disallow a compromise agreement. attesting to the receipt of payment from respondent and waiving all other benefits due them in connection with their complaint. REMY ARNAIZ. May 6.R. Issues: 1. they are abandoning and waiving the same. No. vs. The issue is obviously limited to the disqualification from participation in the elections by particular union members. stating that the judgment award as computed had been complied with to the satisfaction of petitioners.it was not supported by at least thirty percent (30%) of the members of the union. Said Manifestation was also signed by the eight petitioners. The petitioners filed a Motion for Issuance of Writ of Execution. Held: 1. 161003. BILLY ARNAIZ. JULIO CAHILIG and NICANOR LABUEN. DOMINGO SALARDA.

because it was entered into after final judgment. 166421 Facts: In NLRCs Resolution dated May 31. Where there is clear proof that a waiver was wangled from an unsuspecting or a gullible person. Circumstances also reveal that respondent has already complied with its obligation pursuant to the compromise agreement. 17 of them who were previously retrenched were agreed to be given full and complete payment of their respective monetary claims. 2006) G. Having already benefited from the agreement. (PJI) was adjudged liable in the total amount of P 6. freely and intelligently. where PJ I undertook to reinstate the 31 complainant – employees effective July 1. In the present case.008. The NLRC forthwith issued another Resolution on . Inc. Phil.R. Petitioners voluntarily entered into the compromise agreement. 2001. the law must step in to annul such transaction. v. estoppel bars petitioners from challenging it. and whether the consideration for it was credible and reasonable. There is no law requiring the presence of a counsel to validate a waiver. The compromise agreement was submitted to the NLRC for approval. They likewise signed the Joint Manifesto and Declaration of Mutual Support and Cooperation which had also been submitted for the consideration of the labor tribunal.57 for illegally dismissing 31 complainants-employees and that there was no basis for the implementation of petitioner's retrenchment program. the parties executed a Compromise Agreement dated July 9. The validity of the agreement is determined by compliance with the requisites and principles of contracts. 2001 without loss of seniority rights and benefits.. petitioner Philippine Journalists.447. Thereafter. 2. All the employees mentioned in the agreement and in the NLRC Resolution affixed their signatures thereon. Journalistic Inc. NLRC (September 5. petitioners failed to present any evidence to show that their consent had been vitiated. The presence or the absence of counsel when a waiver is executed does not determine its validity. not by when it was entered into. The test is whether it was executed voluntarily. 2001. while 14 others would be paid their monetary claims minus what they received by way of separation pay.

the Union filed another Notice of Strike on July 1. avoid litigation or put an end to one already commenced. whether an NLRC Resolution. who likewise claim to have been illegally dismissed. 2001. however. The May 31. the appellate court held that the NLRC gravely abused its discretion in ruling for PJI. which includes a pronouncement that the members of a union had been illegally dismissed. the compromise agreement was approved and NCMB – NCR – NS-03 -087-00 was deemed closed and terminated. which among others declared that ." The Union assailed the ruling of the NLRC before the CA via petition for certiorari. 2001 Resolution declaring the retrenchment program illegal did not attain finality as "it had been academically mooted by the compromise agreement entered into between both parties on July 9. In the meantime. by making reciprocal concessions. The case was docketed as NCMB-NCR-NS-07-251-02. In its Resolution dated July 31. that is. 2002. to end it because of the uncertainty of the result. 2002.July 25. when litigation has already begun. the obligation of the employer to the complainants. not parties to the agreement. 2003. in conformity with the basic policy of the State "to promote and . In an Order dated September 16. the NLRC ruled that the complainants were not illegally dismissed. whether such a compromise agreement constitutes res judicata to a new complaint later filed by other union members-employees. Article 227 of the Labor Code of the Philippines authorizes compromise agreements voluntarily agreed upon by the parties. In its Decision dated August 17. Article 2028 of the New Civil Code: it is "a contract whereby the parties. The compromise agreement referred only to the award given by the NLRC to the complainants in the said case. 2004. is abandoned or rendered "moot and academic" by a compromise agreement subsequently entered into between the dismissed employees and the employer. Issue: 1. the DOLE Secretary certified the case to the Commission for compulsory arbitration. and 2. or." It contemplates mutual concessions and mutual gains to avoid the expenses of litigation. Held: The petition is denied. 2002.

shall be final and binding upon the parties. including voluntary arbitration. or duress. considering that it has been entered as the court's determination of the controversy and has the force and effect of any other judgment. or coercion. the agreement becomes more than a mere contract binding upon the parties. The reason for the rule. Court of Appeals [325 Phil. 227 Compromise Agreements. the litigation comes to an end except only as regards to its compliance and the fulfillment by the parties of their respective obligations thereunder. said the Court in Domingo v. including those involving labor standard laws. The National Labor Relations Commission or any court shall not assume jurisdiction over issues involved therein except in case of noncompliance thereof or if there is prima facie evidence that the settlement was obtained through fraud. on the assumption that they are the only parties to the case. in which case an appeal may be taken against the order denying the motion. an issue which had already been laid to rest by the parties themselves can no longer be relitigated. is that when both parties so enter into the agreement to put a close to a pending litigation between them and ask that a decision be rendered in conformity therewith. voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor. misrepresentation. 469]. mediation and conciliation.emphasize the primacy of free collective bargaining and negotiations. and is immediately executory unless a motion is filed to set aside the agreement on the ground of fraud. Under Article 2037 of the Civil Code. "a compromise has upon the parties the effect and authority of res judicata. a judicial compromise is not appealable and it thereby becomes immediately executory but this rule must be understood to refer and apply only to those who are bound by the compromise and. a judgment rendered in accordance with a compromise agreement is not appealable. The Court spelled out the distinguishing features of a compromise agreement that is basically intended to resolve a matter already in litigation." even when effected without judicial approval." ART. mistake. Thus. Further: once approved by the court. as modes of settling labor or industrial disputes. The Court held that once approved. – Any compromise settlement. or what is normally termed as a judicial compromise. and under the principle of res judicata. it would .

and it forms part and parcel of the judgment that can be enforced by a writ of execution unless otherwise enjoined by a restraining order. A careful perusal of the wordings of the compromise agreement will show that the parties agreed that the only issue to be resolved was the question of the monetary claim of several employees. the Court can no longer reverse.The judgment having become final.R. No. The order approving the compromise agreement thus becomes a final act. 154113 FACTS: Metro Cebu Community Hospital. The execution and subsequent approval by the NLRC of the agreement forged between it and the respondent Union did not render the NLRC resolution ineffectual. To reiterate. (MCCHI). It must be remembered that a compromise agreement is also a contract." The agreement becomes part of the judgment of the court or tribunal. the judgment becomes immediately executory. and as a logical consequence. and in no way affected the Resolution in NCMB-NCR-NS-03-087-00 dated May 31. there being an implied waiver of the parties' right to appeal from the decision. In any event. the compromise agreement cannot bind a party who did not voluntarily take part in the settlement itself and gave specific individual consent. NLRC G. CA was correct in holding that the compromise agreement pertained only to the "monetary obligation" of the employer to the dismissed employees. much less modify it. 2001 where the NLRC made the pronouncement that there was no basis for the implementation of petitioners' retrenchment program. presently known as the . and it is only then that the agreement may be considered as voluntarily entered into. Abaria vs. it requires the consent of the parties. nor rendered it "moot and academic. Inc. there is an implicit waiver of the right to appeal.only be "natural to presume that such action constitutes an implicit waiver of the right to appeal" against that decision. the rule is that when judgment is rendered based on a compromise agreement.

Nava wrote Rev. . a non-stock. The National Federation of Labor (NFL) is the exclusive bargaining representative of the rank-and-file employees of MCCHI. and placed them under immediate preventive suspension. MCCHI attempted to take over the room being used as union office but was prevented to do so by Nava and her group who protested these actions and insisted that management directly negotiate with them for a new CBA. Iyoy is the Hospital Administrator. However. With the intensified atmosphere of violence and animosity within the hospital premises as a result of continued protest activities by union members. MCCHI returned the CBA proposal for Nava to secure first the endorsement of the legal counsel of NFL as the official bargaining representative of MCCHI employees. explaining that employees wore their armbands only as a sign of protest and reiterating their demand for MCCHI to comply with its duty to bargain collectively. Responding to this directive. MCCHI directed the union officers led by Nava to submit within 48 hours a written explanation why they should not be terminated for having engaged in illegal concerted activities amounting to strike. attaching to her letter a statement of proposals signed/endorsed by 153 union members. The collection of union fees (check-off) was temporarily suspended by MCCHI in view of the existing conflict between the federation and its local affiliate. Several union members led by Nava and her group launched a series of mass actions around the hospital premises and putting up placards.Visayas Community Medical Center (VCMC). The hospital’s suppliers also refused to make further deliveries on credit. Gregorio P. Thereafter. operates the Metro Cebu Community Hospital (MCCH) which is owned by the United Church of Christ in the Philippines (UCCP) and Rev. Iyoy expressing the union’s desire to renew the CBA. non-profit corporation. MCCHI suffered heavy losses due to low patient admission rates. MCCHI was informed that the proposed CBA submitted by Nava was never referred to NFL and that NFL has not authorized any other legal counsel or any person for collective bargaining negotiations. Meanwhile. Nava and her group denied there was a temporary stoppage of work.

Not being a legitimate labor organization. 2. ISSUES: 1. 242. MCCHI filed a petition for injunction in the NLRC. If their termination was illegal. whether petitioning employees are entitled to separation pay. 264 of the Labor Code. MCCHI’s was granted a permanent injunction enjoining the Nava group from committing illegal acts mentioned in Art. Whether petitioning employees were illegally dismissed. damages and attorney’s fees. several complaints for illegal dismissal and unfair labor practice were filed by the terminated employees against MCCHI.With the volatile situation adversely affecting hospital operations and the condition of confined patients. UCCP and members of the Board of Trustees of MCCHI. The applicable provision in this case is Art. as amended. and 3. Whether MCCHI is guilty of unfair labor practice. NAMA-MCCH-NFL has not done so as there was no any effort on its part to comply with the legal requisites for a valid disaffiliation during the “freedom period” or the last 60 days of the last year . it is only the labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit which is the exclusive representative of the employees in such unit for the purpose of collective bargaining. NAMAMCCH-NFL is not the labor organization certified or designated by the majority of the rank-and-file hospital employees to represent them in the CBA negotiations but the NFL. 253. backwages. Iyoy. as evidenced by CBAs concluded in 1987. NO. 255. Records of the NCMB and DOLE Region 7 confirmed that NAMA-MCCHNFL had not registered as a labor organization. Aside from the registration requirement. NAMA-MCCH-NFL is not entitled to those rights granted to a legitimate labor organization under Art. makes it an unfair labor practice for an employer “[t]o violate the duty to bargain collectively” as prescribed by the Code. Thereafter. Art. Rev. While it is true that a local union has the right to disaffiliate from the national federation. 248 (g) of the Labor Code. HELD: 1. as provided in Art. having submitted only its charter certificate as an affiliate or local chapter of NFL. 1991 and 1994.

NO. there is no question that NAMA-MCCH-NFL officers knowingly participated in the illegal strike. There must be proof that he or she committed illegal acts during a strike. 264 (a) of the Labor Code. even if a replacement had been hired by the employer during such lawful strike. Nava and her group simply demanded that MCCHI directly negotiate with the local union which has not even registered as one. THE HERITAGE HOTEL MANILA v. on the other hand. A union officer. may be terminated from work when he knowingly participates in an illegal strike. and like other workers. The above provision makes a distinction between workers and union officers who participate in an illegal strike: an ordinary striking worker cannot be terminated for mere participation in an illegal strike. 2. NATIONAL UNION OF WORKERS IN THE HOTEL. through a majority vote in a secret balloting in accordance with Art. when he commits an illegal act during a strike. provides for the consequences of an illegal strike to the participating workers: Any union officer who knowingly participates in illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided. Considering their persistence in holding picketing activities despite the declaration by the NCMB that their union was not duly registered as a legitimate labor organization and the letter from NFL’s legal counsel informing that their acts constitute disloyalty to the national federation. 241 (d). and their filing of the notice of strike and conducting a strike vote notwithstanding that their union has no legal personality to negotiate with MCCHI for collective bargaining purposes. as amended. RESTAURANT AND ALLIED INDUSTRIES-HERITAGE HOTEL MANILA SUPERVISORS CHAPTER (NUWHRAIN-HHMSC).of the CBA. Art. That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment. .

he. Petitioner filed a motion for reconsideration. He considered the belated submission of the annual financial reports and the list of members as sufficient compliance. the certification election pushed through and respondent emerged as the winner. Petitioner prayed that respondent’s Certificate of Creation of Local/Chapter be cancelled and its name be deleted from the list of legitimate labor organizations. once respondent’s registration is cancelled. Nevertheless. and certified respondent as the sole and exclusive bargaining agent of all supervisory employees.G. Consequently. It further requested the suspension of the certification election proceedings.R. Subsequently. denied the petition. The MedArbiter granted the petition on and ordered the holding of a certification election. it would no longer be entitled to be certified as the exclusive bargaining agent of the supervisory employees. petitioner discovered that respondent had failed to submit to the Bureau of Labor Relations (BLR) its annual financial report for several years and the list of its members since it filed its registration papers. on the ground of the non-submission of the said documents. the Regional Director finding that respondent had indeed failed to file financial reports and the list of its members for several years. ratiocinating that freedom of association and the employees’ right to self-organization are more substantive considerations. stating that the certification election held was an exercise in futility because. In the meantime. Thus. Petitioner filed a Protest with Motion to Defer Certification of Election Results and Winner. 178296 NACHURA. but it was denied on. petitioner filed a Petition for Cancellation of Registration of respondent. . No. The Med-Arbiter held that the pendency of a petition for cancellation of registration is not a bar to the holding of a certification election. J.: FACTS Respondent filed with the Department of Labor and Employment-National Capital Region (DOLE-NCR) a petition for certification election. nonetheless. the Med-Arbiter dismissed petitioner’s protest.

acquired jurisdiction over the case. the appeal was filed by petitioner with the BLR. then. shall resolve the case in his place? In Abbott.Aggrieved. In the instant case. Section 39(1)(a) of the Administrative Code of . In view of this. Jurisdiction to review the decision of the Regional Director lies with the BLR. It is true that the power of control and supervision does not give the Department Secretary unbridled authority to take over the functions of his or her subordinate. holding that the constitutionally guaranteed freedom of association and right of workers to self-organization outweighed respondent’s noncompliance with the statutory requirements to maintain its status as a legitimate labor organization. She did so pursuant to her power of supervision and control over the BLR. DOLE Secretary Sto. Such authority is subject to certain guidelines which are stated in Book IV. undisputedly. Who. petitioner appealed the decision to the BLR. it remains with it until the full termination of the case. she merely stepped into the shoes of the BLR Director and performed a function that the latter could not himself perform. When the DOLE Secretary resolved the appeal. which. Once jurisdiction is acquired by the court. Chapter 8. Thus. ISSUE: Whether the Labor Secretary has jurisdiction to review the decision of the Regional Director in a petition for cancellation. and we ruled that the latter has no appellate jurisdiction. Tomas took cognizance of the appeal and she dismissed the appeal. the BLR Director inhibited himself from the case because he was a former counsel of respondent. jurisdiction remained with the BLR despite the BLR Director’s inhibition. This is clearly provided in the Implementing Rules of the Labor Code and enunciated by the Court in Abbott. the appeal from the Regional Director’s decision was directly filed with the Office of the DOLE Secretary. BLR Director inhibited himself from the case because he had been a former counsel of respondent. In this case. HELD: Yes. But as pointed out by the CA. the present case involves a peculiar circumstance that was not present or covered by the ruling in Abbott.

FACTS: Respondent filed with the DOLE-NCR a petition for certification election.R. respondent. No. 1997. 178296 January 12. The Med-Arbiter granted the petition and ordered the holding of a certification election. Petitioner's motion for reconsideration was denied. The pre-election conference resumed on January 29. GRAND PLAZA HOTEL CORPORATION. Petitioner discovered that respondent had failed to submit to the BLR its annual financial report for several years and the list of its members since it filed its registration papers hence it filed a Petition for Cancellation of Registration of respondent and prayed that respondent's Certificate be cancelled and its name be deleted from the list of legitimate labor organizations and suspension of the certification election proceedings. However.” THE HERITAGE HOTEL MANILA. On appeal. The pre-election conference was not held as initially scheduled. G. 2011 NACHURA. acting through its owner. affirmed the Med-Arbiter's order and remanded the case to the Med-Arbiter for the holding of a pre-election conference on February 26. Petitioner moved to dismiss the petition due to alleged repeated nonappearance of respondent. in the present case. the DOLE Secretary’s act of taking over the function of the BLR Director was warranted and necessitated by the latter’s inhibition from the case and the objective to “maintain the integrity of the decision. as well as the Bureau itself. The latter agreed to suspend proceedings until further notice. RESTAURANT AND ALLIED INDUSTRIES-HERITAGE HOTEL MANILA SUPERVISORS CHAPTER (NUWHRAIN-HHMSC). 2000. the DOLE Secretary. Petitioner maintained that the resolution of the issue of whether respondent is a legitimate labor organization is crucial to the issue of whether it may . J. petitioner vs. NATIONAL UNION OF WORKERS IN THE HOTEL.1987.

Regional Director Maraan of DOLE-NCR finally resolved the petition for cancellation of registration in favor of respondents. Petitioner appealed to the DOLE Secretary but was dismissed and motion for reconsideration was denied. Petitioner also claimed that some of respondent's members were not qualified to join the union because they were either confidential employees or managerial employees. Petitioner filed a Protest with Motion to Defer Certification of Election Results and Winner. The certification election pushed through and respondent emerged as the winner. as the union members are the ones who would be disadvantaged by the non-submission of financial reports.exercise rights of a legitimate labor organization. and the members had manifested their will to be represented by respondent. He took into account the fact that respondent won the certification election and that it had already been certified as the exclusive bargaining agent of the supervisory employees. (d) the petition is already moot and academic. which include the right to be certified as the bargaining agent of the covered employees. (b) petitioner is not the party-in-interest. He emphasized that the non-compliance with the law is not viewed with favor but considered the belated submission of the annual financial reports and the list of members as sufficient compliance thereof and considered them as having been submitted on time. (c) it has already complied with the reportorial requirements. considering that the certification election had already been held. The Med-Arbiter dismissed petitioner's protest reasoning that the pendency of a petition for cancellation of registration is not a bar to the holding of a certification election. Petitioner appealed the decision to the BLR but the BLR Director inhibited himself from the case because he had been a former counsel of respondent. . ratiocinating that freedom of association and the employees’ right to selforganization are more substantive considerations. Respondent prayed for the dismissal of the petition for the following reasons: (a) petitioner is estopped from questioning respondent’s status as it had already recognized respondent as a legitimate labor organization during the pre-election conferences. In the meantime.

Tomas took cognizance of the appeal and dismissed it due to the constitutional rights. The motion for reconsideration was likewise denied. the rights of all workers to selforganization. and peaceful concerted activities. After all. in fact. merely because of the negligence of the union officers who were responsible for the submission of the documents to the BLR. collective bargaining and negotiations. Labor authorities should bear in mind that registration confers upon a union the status of legitimacy and the concomitant right and privileges .DOLE Secretary Sto. These provisions give the Regional Director ample discretion in dealing with a petition for cancellation of a union’s registration. though belatedly. Section 3 of the Constitution. It is sufficient to give the Regional Director license to treat the late filing of required documents as sufficient compliance with the requirements of the law. consideration must be taken of the fundamental rights guaranteed by Article XIII. while article 239 failure to submit the annual financial report or the list of individual members to the Bureau shall constitute a ground for cancellation. Articles 238 of the Labor Code provides that the certificate of registration shall be canceled by the Bureau if it has reason to believe that the organization no longer meets one or more of the requirements. the law requires the labor organization to submit the annual financial report and list of members in order to verify if it is still viable and financially sustainable as an organization so as to protect the employer and employees from fraudulent or fly-by-night unions.e. Petitioner filed a petition for certiorari with the CA but it was denied as well as the motion for reconsideration. HELD: No. With the submission of the required documents by respondent. ISSUE: Whether the registration of the labor union should be cancelled. The union members and. the purpose of the law has been achieved.. In resolving the petition. all the employees belonging to the appropriate bargaining unit should not be deprived of a bargaining agent. i.

A.granted by law to a legitimate labor organization. Labor Code’s provisions on cancellation of union registration and on reportorial requirements have been recently amended by R. It would be unreasonable for this Office to order the cancellation of the union and penalize the entire union membership on the basis of the negligence of its officers. The amendment sought to strengthen the workers’ right to self-organization and enhance the Philippines’ compliance with its international obligations as embodied in the ILO Convention No. 87. ILO Convention No. particularly the right to participate in or ask for certification election in a bargaining unit. 9481. submission of the required documents is the duty of the officers of the union. Thus. An Act Strengthening the Workers’ Constitutional Right to Self-Organization. 87. No. It has deemed it preferable if such actions were to be taken only as a last resort and after exhausting other possibilities with less serious effects on the organization. expulsion from membership. Moreover. 9481 amended Article 239 (read present Labor Code) and also inserted Article 242-A (read LC). R." The ILO has opined that the cancellation of union registration is tantamount to dissolution of the organization which would give rise to the loss of legal personality of the union or loss of advantages necessary for it to carry out its activities. Also involved is the public policy to promote free trade unionism and collective bargaining as instruments of industrial peace and democracy. . or any appropriate penalty. which provides in part that failure to submit annual report and list of members shall not be a ground for cancellation of union registration but shall subject the erring officers or members to suspension. The more substantive considerations involve the constitutionally guaranteed freedom of association and right of workers to self-organization. provides that "workers’ and employers’ organizations shall not be liable to be dissolved or suspended by administrative authority. Therefore we deny petition and rule that failure to submit its annual financial reports and list of individual members should not necessarily lead to the cancellation of union registration.A. No.

from taking appropriate measures to correct its omissions. after having failed to meet its periodic obligations promptly. J. at this point [in] time.Since petitioner’s members are mixture of rank and file and supervisory employees. Petitioner should first exclude the supervisory employees from it membership before it can attain the status of a legitimate labor organization. FACTS: On January 24. INC. 160352 July 23.. G. and its failure to submit its books of account contravened the ruling of the Court in 1 case. respondent. Transport & General Workers Organization (PTGWO). petitioner union. No. IV. Respondent filed a Motion to Dismiss on the ground that KFWU did not acquire any legal personality because its membership of mixed rank-and-file and supervisory employees violated Article 245 of the Labor Code. The commingling of rank and file and supervisory employees in one (1) bargaining unit cannot be cured in the exclusion-inclusion proceedings [at] the pre-election conference. and a Report of Creation of Local/Chapter. 2000.. 2008 AUSTRIA-MARTINEZ. Kawashima Free Workers Union-PTGWO (KFWU) filed with DOLE Regional Office a Petition for Certification Election to be conducted in the bargaining unit composed of 145 rank-and-file employees of respondent. KAWASHIMA TEXTILE MFG. represented by Department of Labor and Employment (DOLE).R. REPUBLIC OF THE PHILIPPINES. PHILIPPINES. petitioner vs. .To rule differently would be to preclude the union. stating that KFWU submitted to said office a Charter Certificate issued to it by the national federation Phil. Attached to its petition are a Certificate of Creation of Local/Chapter issued by DOLE Regional Office No. has not attained the status of a legitimate labor organization. Med-Arbiter Bactin found KFWU’s legal personality defective and dismissed its petition for certification election because at least 2 members of KFWU are supervisory employees.

among the rank-and-file employees of Kawashima Textile Manufacturing Philippines. on the contrary. the CA reversed DOLE’s decision and reinstated the Med-Arbiter’s decision. Neither was such mixed membership a ground for cancellation of its registration. Meanwhile." The DOLE noted that neither ground existed. subject to the usual pre-election conference. for it held a certificate of creation and had been listed in the registry of legitimate labor organizations. KFWU filed a Motion for Reconsideration but the CA denied it. Respondent filed a Motion for Reconsideration but the DOLE denied the same. 9. ISSUE: . for under Section 1. Section 11. Paragraph II. or (2) [KFWU's] legal personality has been revoked or canceled with finality. cannot be ascertained from the records. On appeal by respondent. respondent filed with DOLE Regional Office a Petition for Cancellation of Charter/Union Registration of KFWU. DOLE granted KFWU’s appeal and remanded the case to the office of origin for the immediate conduct of certification election. the provision did not state the effect of such prohibited membership on the legitimacy of the labor organization and its right to file for certification election.On the basis of the aforecited decision. the final outcome of which. Rule XI of Department Order No. As to the failure of KFWU to file its books of account. unfortunately. The DOLE held that Med-Arbiter Bactin's reliance on the decided case was misplaced. KFWU's legal personality was wellestablished. for while Article 245 declares supervisory employees ineligible for membership in a labor organization for rank-and-file employees. 9 "provides for the dismissal of a petition for certification election based on lack of legal personality of a labor organization only on the following grounds: (1) [KFWU] is not listed by the Regional Office or the Bureau of Labor Relations in its registry of legitimate labor organizations. the DOLE held that such omission was not a ground for revocation of union registration or dismissal of petition for certification election. Rule VI of Department Order No. Inc. a local or chapter like KFWU was no longer required to file its books of account.

3 is Article 290. 3 of R.A. – All existing supervisory unions and unions of security guards shall. 2000 are R. No.Whether a mixed membership of rank-and-file and supervisory employees in a union is a ground for the dismissal of a petition for certification election. No. nevertheless. the life of which extends beyond the date of effectivity of the Code shall be respected until their expiry date insofar as the economic benefits granted therein are concerned. HELD: R.A. satisfied and met. substantive rights and interests already vested would be impaired in the process. thus: Sec. existing collective agreements with such unions. No. There may have been curative labor legislations that were given retrospective effect. 3 of R. 2000.A.A.A. the law and rules in force at the time of the filing by KFWU of the petition for certification election on January 24. R. hence. 258-A and 238-A (read Labor Code). as amended by Department Order No. The latter provision indicates that a pending petition for cancellation of registration will not hinder a legitimate labor organization from initiating a certification election. 9481 took effect only on June 14. 245-A. No. No. The provision in the Labor Code closest to Sec. It was in Sec. series of 1997. which is silent on the prohibition. As the petition for certification election subject matter of the present petition was filed by KFWU on January 24. 245 of the Labor Code and inserted Art. where the requirements of the law for the organization thereof are. Then the Labor Code was enacted in 1974 without reproducing Sec. but not the aforecited provisions of R. No. for otherwise. Rule II.A. cease to operate as such and their registration certificates shall be deemed automatically cancelled. However. 9481 cannot apply to it. 11. 6715 and its the Rules and Regulations. . The Omnibus Rules Implementing Book V of the Labor Code (Omnibus Rules) merely provides in Section 11. upon the effectivity of the Code. However. Supervisory unions and unions of security guards to cease operation. 9. 9481 amended Art.A. 875 that such questioned mingling was first prohibited but the invalidity of membership of one of the organizers does not make the union illegal. R. 9481. Instead. No. it applies only to labor representation cases filed on or after said date. 2007. 875.

Effective 1989. 6715 omitted specifying the exact effect any violation of the prohibition would bring about on the legitimacy of a labor organization. 245 (of LC). 875 prompted the Court to declare in a case (Bulletin v. Who may join unions. R. The determination of who are managerial employees and who are not shall be the subject of negotiation between representatives of supervisory union and the employer.A. No. No. R. 1. shall remain in that unit x x x. Managerial employees are not eligible to join. assist or form separate labor organizations of their own. assist or form any labor organization. just like R. But it was provided in the IRR of RA 6715: Rule II (Registration of Unions) Sec. 3. – x x x Supervisory employees and security guards shall not be eligible for membership in a labor organization of the rank-and-file employees but may join. The obvious repeal of the last clause of Sec. right of supervisory employees. Sanchez) that supervisory employees who do not fall under the category of managerial employees may join or assist in the formation of a labor organization for rank-and-file employees.A. upon the effectivity of Republic Act No. Provided. 875. 6715 restored the prohibition against the questioned mingling in one labor organization: "Art. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join. but they may not form their own labor organization.A. and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules: . either or both of them ma bring the issue to the nearest Regional Office for determination.Members of supervisory unions who do not fall within the definition of managerial employees shall become eligible to join or assist the rank and file organization. Ineligibility of managerial employees to join any labor organization. No. 6715. assist or form separate labor organizations of their own.A. R. If no agreement s reached between the parties." Unfortunately. that those supervisory employees who are included in an existing rank-and-file bargaining unit. No.

But then. and provided further.was removed.Sec. The petition shall be in writing and under oath. when requested to bargain collectively. the court abandoned the Toyota ruling and reverted to its previous pronouncement that while there is a prohibition against the mingling of supervisory and rank-and-file employees in one labor organization.that the petition for certification election indicate that the bargaining unit of rank-and-file employees has not been mingled with supervisory employees . including the right to file a petition for certification election for the purpose of collective bargaining. Hence in the cases that were filed (Tagaytay Highlands case. the 1989 Amended Omnibus Rules was further amended by Department Order No. – Any legitimate labor organization or the employer. 1997. It cannot possess the requisite personality to file a petition for certification election. may file the petition. shall contain. series of 1997 (1997 Amended Omnibus Rules). the Labor . 1. 2(c) of the 1989 Amended Omnibus Rules . Thus the court ruled in 2 cases (Toyota case and Dunlop case) that a labor organization composed of both rank-and-file and supervisory employees is no legitimate labor organization at all. The petition. San Miguel case. 2. on June 21. It cannot possess any of the rights of a legitimate labor organization. the requirement under Sec. that the appropriate bargaining unit of the rank-and-file employees shall not include supervisory employees and/or security guards. and Air Philippines case). Where to file. By that provision. among others: xxxx (c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require. Who may file. Specifically. – A petition for certification election may be filed with the Regional Office which has jurisdiction over the principal office of the employer. when filed by a legitimate labor organization. any questioned mingling will prevent an otherwise legitimate and duly registered labor organization from exercising its right to file a petition for certification election. 9. Sec.

. CA. as interpreted by the Court in Tagaytay Highlands. it may exercise all the rights and privileges of a legitimate labor organization. misrepresentation and false statement when it filed for its registration and that EREU failed to comply with the membership requirement for the registration as a labor organization. alleges that Eagle Ridge Employees Union(EREU) committed fraud. San Miguel and Air Philippines. false statement or fraud under Article 239 of the Labor Code. No. Toyota and Dunlop no longer hold sway in the present altered state of the law and the rules. al. 2010 Facts: Petitioner Eagle Ridge Golf and Country Club(Eagle Ridge). All said. Eagle Ridge seeks to have EREU’s registration cancelled when the Union filed a petition for certification election. had already set the tone for it. 178989. The Court reverses the ruling of the CA and reinstates that of the DOLE granting the petition for certification election of KFWU. et. March 18. unless such mingling was brought about by misrepresentation. 2005 and the fact that 26 members affixed their signatures on the documents. G.A. No. making one signature a forgery. which has around 112 rank-and-file employees. Eagle Ridge alleged that the EREU declared in its application for registration having 30 members. Eagle Ridge Golf & Country Club vs. The misrepresentation was exacerbated by the discrepancy between the certification issued by the Union secretary and president that 25 members actually ratified the constitution and by-laws on December 6. the Court held that after a labor organization has been registered. while the latest issuance is R.Code does not provide for the effects thereof. 9481. when the minutes of its December 6. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration. the 1997 Amended Omnibus Rules. Thus.R. 2005 organizational meeting showed it only had 26 members.

The DOLE Regional Director and the BLR OIC Director obviously erred in giving . The CA dismissed Eagle Ridge’s petition for being deficient as the verification and certification of non-forum shopping was subscribed to by Luna C. Piezas on her representation as the legal counsel of the petitioner. The CA denied a motion for reconsideration. but sans [the requisite] Secretary’s Certificate or Board Resolution authorizing her to execute and sign the same. The Union submitted the required documents attesting to the facts of the organizational meeting on December 6. the election of its officers. Eagle Ridge filed a motion for reconsideration but was denied. false statement. most especially in cases of independent labor unions. or fraud committed by EREU to merit cancellation of its registration. Any seeming infirmity in the application and admission of union membership. 2005. In the issue of the affidavits of retraction executed by six union members. when it had 30 employees as member when it registered. EREU complied with the mandatory minimum 20% membership requirement under Art.DOLE Regional Director granted Eagle Ridge’s petition and delisted EREU from the roster of legitimate labor organizations. thus a petition for certiorari to the CA. A scrutiny of the records fails to show any misrepresentation. which initially affirmed the order of the Regional Director. 2005. the probative value of these affidavits cannot overcome those of the supporting affidavits of 12 union members and their counsel as to the proceedings and the conduct of the organizational meeting on December 6. and the adoption of the Union’s constitution and by-laws. Issue: Did the CA commit grave abuse of discretion in denying Eagle Ridge’s petition to cancel EREU’s registration? Ruling: No. must be viewed in favor of valid membership. EREU appealed to the BLR. but upon filing of the EREU of a motion for reconsideration it was reinstated in the roster of legitimate labor organizations. 234(c).

DEPARTMENT OF LABOR AND EMPLOYMENT. the Union. which may thus be either omitted or misunderstood by the one writing them. PUBLIC RESPONDENTS. HANS LEO J. AND HON. there is still compliance with the mandatory membership requirement under Art. J. Supporting the application were the following documents: (1) copies of its ratified constitution and by-laws (CBL). Prior to their withdrawal. 2005. When the EREU filed its application for registration on December 19. a charter affiliate of the Workers Advocates for Struggle. the six employees who retracted were bona fide union members. For their non-presentation. NATIONAL CAPITAL REGION. BRION. VS. when the certificate of registration was granted. CIRIACO LAGUNZAD. PETITIONER. since they are not generally prepared by the affiant but by another who uses his own language in writing the affiant’s statement. HON. applied for registration with the Bureau of Labor Relations (BLR). IN HIS CAPACITY AS REGIONAL DIRECTOR. there is no dispute that the Union complied with the mandatory 20% membership requirement. Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would require a union membership of at least 22 employees. ELECTROMAT MANUFACTURING AND RECORDING CORPORATION.e. DEPARTMENT OF LABOR AND EMPLOYMENT.: Facts: The private respondent Nagkakaisang Samahan ng Manggagawa ng Electromat-Wasto (union). there were clearly 30 union members. (3) .. It is settled that affidavits partake the nature of hearsay evidence. CACDAC. 234(c). (2) minutes of the CBL's adoption and ratification. Thus. i. IN HIS CAPACITY AS DIRECTOR OF BUREAU OF LABOR RELATIONS. With the withdrawal of six union members. the six affidavits of retraction are inadmissible as evidence against the Union in the instant case. It is required for affiants to re-affirm the contents of their affidavits during the hearing of the instant case for them to be examined by the opposing party. for the remaining 24 union members constitute more than the 20% membership requirement of 22 employees. but not according the same treatment to the supporting affidavits.credence to the affidavits of retraction. Transformation and Organization (WASTO).

. a labor federation. 2003. had at least ten (10) locals or chapters as required by D. Hence. (4) names and addresses of the union officers. 4003 is an unconstitutional diminution of the Labor Code's union registration requirements under Article 234.O. 40-03. BLR affirmed the dismissal. It brushed aside the company's objection to D.O. The company points out that D. The BLR thereafter issued the union a Certification of Creation of Local Chapter (equivalent to the certificate of registration of an independent union). (D. and (11) Verification under oath. (8) resolution of affiliation with WASTO. the present petition. In the appeal by the company. (5) list of union members. for the union's failure to comply with Article 234 of the Labor Code. Acting Director Ciriaco A. (6) list of rank-and-file employees in the company.O. Lagunzad of the Department of Labor and Employment (DOLE)-National Capital Region dismissed the petition. and it pointed out that D. contending that the BLR committed grave abuse of discretion in affirming the union's registration despite its non-compliance with the requirements for registration under Article 234 of the Labor Code. The company moved for reconsideration. holding that no such requirement is found under the rules. arguing that the union's registration certificate was invalid as there was no showing that WASTO. (10) Charter Certificate. pursuant to Department Order No.O. On November 27. (9) WASTO's resolution of acceptance.minutes of the organizational meetings. The CA denied the motion. 40-03 delisted some of the requirements under Article 234 of the Labor Code for the registration of a local chapter. 40-03 was issued by the DOLE pursuant to its rule-making power under the law. the labor federation to which the union is affiliated. Electromat Manufacturing and Recording Corporation (company) filed a petition for cancellation of the union's registration certificate. It argued that D. The company thereafter sought relief from the CA through a petition forcertiorari. (7) certification of non-existence of a collective bargaining agreement (CBA) in the company.O. The CA dismissed the petition and affirmed the assailed BLR ruling. 40-03.O.) 40-03.

40-03 expanded or amended Article 234 of the Labor Code. Rule II. set of officers and books of accounts. 40-03 is a valid exercise of the rule-making power of the DOLE. copy of which shall be submitted to the Bureau of Labor Relations within thirty (30) days from issuance of such charter certificate. and that the CA committed grave abuse of discretion when it affirmed the union's existence. Issue: whether D. the procedure governing the reporting of independently registered unions. Earlier in Progressive Development Corporation v.The company contends that the enumeration of the requirements for union registration under the law is exclusive and should not be diminished. the Court said that by force of law. Book V . the local or chapter of a labor federation or national union becomes a legitimate labor organization upon compliance with Section 3. and that the same requirements should apply to all labor unions whether they be independent labor organizations. Secretary. Department of Labor and Employment. . resulting in an invalid exercise by the DOLE of its delegated rule-making power. federations or local chapters. For reporting purposes. Rule II. direct membership with a national union. Interpreting these provisions of the old rules.O. It adds that in making a different rule for local chapters. held: We rule in the affirmative.O. Book V of the Rules Implementing the Labor Code [20] which stated: Union affiliation. federations or national unions shall be observed.[19] the Court encountered a similar question on the validity of the old Section 3. It thus posits that the union's certificate of registration which was issued "in violation of the letters of Article 234 of the Labor Code" is void and of no effect. xxxx e) The local or chapter of a labor federation or national union shall have and maintain a constitution and by-laws.The affiliate of a labor federation or national union may be a local or chapter thereof or an independently registered union. D. a) The labor federation or national union concerned shall issue a charter certificate indicating the creation or establishment of a local or chapter.

(2) the minutes of the CBL's adoption and ratification. the minutes of organization meetings and the list of the workers who participated in such meetings. The company now assails this particular amendment as an invalid exercise of the DOLE's rule-making power. the Court noted that Section 3 omitted several requirements which are otherwise required for union registration.O. the union has submitted: (1) copies of the ratified CBL. the only requirement being the submission of the charter certificate to the BLR. Notwithstanding these omissions. and (9) their Charter Certificate. the intent of the law in imposing lesser requirements in the case of a branch or local of a registered federation or national union is to encourage the affiliation of a local union with a federation or national union in order to increase the local union's bargaining powers respecting terms and conditions of labor. 40-03 fine-tuned when the DOLE amended the rules on Book V of the Labor Code. These submissions were properly verified as required by the rules. (6) the list of rank-and-file employees in the company. specifically. In sum. Further. 2) The submission of officers' addresses. thereby modifying the government's implementing policy on the registration of locals or chapters of labor federations or national unions.of the Rules Implementing the Labor Code. (5) the list of union members. as follows: 1) The requirement that the application for registration must be signed by at least 20% of the employees in the appropriate bargaining unit. principal address of the labor organization. (7) a certification of non-existence of a CBA in the company. In any case. the local union in the present case has more than satisfied the requirements the petitioner complains about. the Court upheld the government's implementing policy expressed in the old rules when it declared in Progressive Development Undoubtedly. (3) the minutes of the organizational meetings. 3) The submission of the minutes of the adoption or ratification of the constitution and by-laws and the list of the members who participated in it. (8) the resolution of affiliation with WASTO and the latter's acceptance. (4) the names and addresses of the union officers. the . It was this same Section 3 of the old rules that D.

EUBP’s grievance committee questioned Remigio’s action and reprimanded Remigio and her allies. During the negotiations. thus. G. during a companysponsored seminar. vs.petitioner has no factual basis for questioning the union's registration. We.Petitioners. BAYER PHILIPPINES. Remigio solicited signatures from union members in support of a resolution containing the decision of the signatories to: (1) disaffiliate from FFW. accepted Bayer’s wage-increase proposal. Respondent Avelina Remigio (Remigio) and 27 other union members. (4) abolish all existing officer positions in the union and elect a new set . The DOLE Secretary issued an arbitral award ordering EUBP and Bayer to execute a CBA Barely six months from the signing of the new CBA. find no compelling justification to nullify D.. In 1997. (2) rename the union as Reformed Employees Union of Bayer Philippines (REUBP). J. ASUNCION AMISTOSO (HRD Manager). No. 2010 EMPLOYEES UNION OF BAYER PHILS.O. Subsequently. headed by its president Juanito S.R. LONISHEN (President). (3) adopt a new constitution and by-laws for the union.. FACUNDO. Respondents. Facundo (Facundo). EUBP. INC. JR. EUBP staged a strike.: FACTS: Petitioner Employees Union of Bayer Philippines (EUBP) is the exclusive bargaining agent of all rank-and-file employees of Bayer Philippines (Bayer). negotiated with Bayer for the signing of a collective bargaining agreement (CBA). and is an affiliate of the Federation of Free Workers (FFW). VILLARAMA.. without any authority from their union leaders. EUBP rejected Bayer’s 9. 162943 December 6. as even the requirements for registration as an independent local have been substantially complied with. prompting the Secretary of the Department of Labor and Employment (DOLE) to assume jurisdiction over the dispute. AVELINA REMIGIO AND ANASTACIA VILLAREAL. 40-03. FFW and JUANITO S. in his capacity as President.9% wage-increase proposal resulting in a bargaining deadlock. DIETER J.

The BLR reversed the Regional Director’s ruling and ordered the management of Bayer to respect the authority of the dulyelected officers of EUBP in the administration of the prevailing CBA. Petitioners filed a second ULP complaint against herein respondents. Gan dismissed EUBP’s second ULP complaint for lack of jurisdiction. Apparently." Labor Arbiter Jovencio Ll. Bayer decided to turn over the collected union dues amounting to P254. The said resolution was signed by 147 of the 257 local union members.of interim officers. HELD:The petition is partly meritorious. violation of or . An intra-union dispute refers to any conflict between and among union members. With both seeking recognition from Bayer and demanding remittance of the union dues collected from its rank-and-file members. The Regional Director of the Industrial Relations Division of DOLE issued a decision dismissing the issue on expulsion filed by EUBP against Remigio and her allies for failure to exhaust reliefs within the union and ordering the conduct of a referendum to determine which of the two groups should be recognized as union officers. Remigio’s splinter group wrote Facundo. the two groups failed to settle their issues.Labor Arbiter Waldo Emerson R. ISSUE: Whether or not the act of the management of Bayer in dealing and negotiating with Remigio’s splinter group despite its validly existing CBA with EUBP can be considered unfair labor practice . EUBP lodged a complaint against Remigio’s group before the Industrial Relations Division of the DOLE praying for their expulsion from EUBP for commission of "acts that threaten the life of the union. FFW and Bayer informing them of the decision of the majority of the union members to disaffiliate from FFW.857.15 to respondent Anastacia Villareal. Jr. Treasurer of REUBP. dismissed the first ULP complaint for lack of jurisdiction. and by placing the union dues collected in a trust account until the conflict between the two groups is resolved. and (5) authorize REUBP to administer the CBA between EUBP and Bayer. EUBP filed a complaint for unfair labor practice (first ULP complaint) against Bayer for non-remittance of union dues. including grievances arising from any violation of the rights and conditions of membership. Bayer responded by deciding not to deal with either of the two groups. Mayor. The CA sustained both the Labor Arbiter and the NLRC’s rulings. EUBP later sent a letter to Bayer asking for a grievance conference.

. Sections 1 and 2. (h) validity/invalidity of voluntary recognition. (e) validity/invalidity of union affiliation or disaffiliation. (i) opposition to application for union and CBA registration. (b) conduct of election of union and workers’ association officers/nullification of election of union and workers’ association officers. Rule XI of Department Order No. of acceptance/non-acceptance for union XI AND (g) validity/invalidity of impeachment/expulsion of union and workers’ association officers and members. viz: RULE INTER/INTRA-UNION DISPUTES OTHER RELATED LABOR RELATIONS DISPUTES Section 1. (f) validity/invalidity membership.Inter/intra-union disputes shall include: (a) cancellation of registration of a labor organization filed by its members or by another labor organization. or disputes arising from chartering or disaffiliation of the union. 40-03. except interpretation of collective bargaining agreements. (d) deregistration of collective bargaining agreements. union membership and collective bargaining – (1) between and among legitimate labor organizations. (l) violations of the rights and conditions of union or workers’ association membership.disagreement over any provision of the union’s constitution and by-laws. (c) audit/accounts examination of union or workers’ association funds. . Series of 2003 of the DOLE enumerate the following circumstances as inter/intra-union disputes. (k) disagreements over chartering or registration of labor organizations and collective bargaining agreements. (n) such other disputes or conflicts involving the rights to selforganization. (j) violations of or disagreements over any provision in a union or workers’ association constitution and by-laws. (m) violations of the rights of legitimate labor organizations. Coverage.

Lonishen and Amistoso liable for unfair labor practice? On this score. If such behavior would be tolerated. we find that petitioners’ complaint was validly dismissed. Accordingly. Lonishen and Amistoso the question was whether they were liable for unfair labor practice. the Labor Arbiter and the NLRC will necessarily touch on the issues respecting the propriety of their disaffiliation and the legality of the establishment of REUBP – issues that are outside the scope of their jurisdiction. essentially involves an intra-union dispute based on Section 1 (n) of DOLE Department Order No. The dismissal of the second ULP complaint was therefore erroneous. the dismissal of the complaint was validly made. Petitioners’ ULP complaint cannot prosper as against respondents Remigio and Villareal because the issue. we find that the evidence supports an answer in the affirmative. as to respondents Remigio and Villareal. Coverage. This includes: (1) cancellation of registration of unions and workers’ associations. It must be remembered that a CBA is entered into in order to foster stability and mutual cooperation between labor and capital. Thus as to Bayer. as against them. but only with respect to these two respondents. which issue was within the jurisdiction of the NLRC. But are Bayer. bargaining and negotiations between the employer and the union will never be truthful and meaningful. – Other related labor relations disputes shall include any conflict between a labor union and the employer or any individual. An employer should not be allowed to rescind unilaterally its CBA with the duly certified bargaining agent it had previously contracted with. To rule on the validity or illegality of their acts. and no CBA forged after arduous negotiations will . and decide to bargain anew with a different group if there is no legitimate reason for doing so and without first following the proper procedure. entity or group that is not a labor organization or workers’ association. the issue raised pertained only to the validity of the acts of management in light of the fact that it still has an existing CBA with EUBP. Section 2. 40-03. the petitioners do not seek a determination of whether it is the Facundo group (EUBP) or the Remigio group (REUBP) which is the true set of union officers. However. It is clear from the foregoing that the issues raised by petitioners do not fall under any of the aforementioned circumstances constituting an intra-union dispute. and (2) a petition for interpleader.(2) between and among members of a union or workers’ association. More importantly. Instead.

such as utter disregard of the very existence of the CBA itself. in the Certificate of Registration issued by the DOLE. the allegations in the complaint must show prima facie the concurrence of two things. the latter is behooved to observe the terms and conditions thereof bearing on union dues and representation. the duty to bargain collectively shall also mean that neither party shall terminate or modify such agreement during its lifetime. and for the NLRC to exercise appellate jurisdiction thereon. – Where there is a collective bargaining agreement. should not be construed to apply to violations of the CBA which can be considered as gross violations per se. it is specified that the registered CBA serves as the covenant between the parties and has the force and effect of law between them during the period of its duration. National Labor Relations Commission. However. If the employer grossly violates its CBA with the duly recognized union. This pronouncement in Silva. Article 253 of the Labor Code. we explained the correlations of Article 248 (1) and Article 261 of the Labor Code to mean that for a ULP case to be cognizable by the Labor Arbiter. in Silva v. plainly provides: ART. as amended. Compliance with the terms and conditions of the CBA is mandated by express policy of the law primarily to afford protection to labor and to promote industrial peace. When an employer proceeds to negotiate with a splinter union despite the existence of its valid CBA with the duly certified and . similar to what happened in this case. the former may be held administratively and criminally liable for unfair labor practice. 253. Indeed. however. (Emphasis supplied. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties.)1avvphi1 This is the reason why it is axiomatic in labor relations that a CBA entered into by a legitimate labor organization that has been duly certified as the exclusive bargaining representative and the employer becomes the law between them. namely: (1) gross violation of the CBA. Additionally. Duty to bargain collectively when there exists a collective bargaining agreement. when a valid and binding CBA had been entered into by the workers and the employer. Thus.ever be honored or be relied upon. and (2) the violation pertains to the economic provisions of the CBA. either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date.

Atty. both in Chapter II thereof. Despite the pending motion for reconsideration with the FFW COMELEC. Atty. the former indubitably abandons its recognition of the latter and terminates the entire CBA. Atty. Montaño as FFW National Vice-President. Atty. ATTY. he joined the union of rank-and-file employees. and strong opposition and protest of respondent Atty. and eventually became the employees’ union president . DEL CASTILLO. Montaño’s candidacy. filed before the BLR a petition for the nullification of the election of Atty. Ernesto C. Verceles. informed him that he is not qualified for the position as his candidacy violates the 1998 FFW Constitution and By-Laws. Verceles (Atty.he was likewise designated officer-in-charge of FFW Legal Center. 168583 July 26. However. Verceles). ERNESTO C. No. J. Montaño filed his Comment with Motion to Dismiss on the grounds that the Regional Director of the Department of Labor and Employment (DOLE) and not the BLR has jurisdiction over the case. The BLR rendered a Decision dismissing the petition for lack of merit. vs. Subsequently. Montaño worked as legal assistant of FFW Legal Center.R. . the convention delegates allowed Atty. Petitioner. G. Atty. ALLAN S.exclusive bargaining agent. VERCELES. the FFW Staff Association. He emerged victorious and was proclaimed as the National Vice-President. Montaño was nominated for the position of National VicePresident. Verceles filed a Motion for Reconsideration but it was denied by the BLR. particularly Section 76 of Article XIX8 and Section 25 (a) of Article VIII. Montaño thus filed an Urgent Motion for Reconsideration.: FACTS: Atty. a delegate to the convention and president of University of the East Employees’ Association (UEEA-FFW) which is an affiliate union of FFW. MONTAÑO. 2010 ATTY. The CA set aside the BLR’s Decision. Respondent. the Commission on Election (FFW COMELEC).

operates in more than one administrative region. Even . Section 1 states that any complaint in this regard ‘shall be filed in the Regional Office where the union is domiciled. this Bureau maintains original and exclusive jurisdiction over disputes arising from any violation of or disagreement over any provision of its constitution and by-laws. HELD: The petition is devoid of merit. Section 226 of the Labor Code28 clearly provides that the BLR and the Regional Directors of DOLE have concurrent jurisdiction over inter-union and intra-union disputes. Therefore. The matter of venue becomes problematic when the intra-union dispute involves a federation.29 There is. because the geographical presence of a federation may encompass more than one administrative region. Article XIX of the FFW Constitution and By-laws provides that no member of the Governing Board shall at the same time be an employee in the staff of the federation. There is no dispute that Atty. this Bureau exercises original jurisdiction over intra-union disputes involving federations. thus. at the time of his nomination and election for the position in the Governing Board. We agree with BLR’s observation that: Rule XVI lays down the decentralized intra-union dispute settlement mechanism. Montaño is not qualified to run as FFW National Vice-President in view of the prohibition established in Section 76.’ The concept of domicile in labor relations regulation is equivalent to the place where the union seeks to operate or has established a geographical presence for purposes of collective bargaining or for dealing with employers concerning terms and conditions of employment.30 Atty. The BLR has jurisdiction over intraunion disputes involving a federation. is the head of FFW Legal Center and the President of FFW Staff Association. having local unions all over the country. Such disputes include the conduct or nullification of election of union and workers’ association officers. Montaño. no doubt as to the BLR’s jurisdiction over the instant dispute involving member-unions of a federation arising from disagreement over the provisions of the federation’s constitution and by-laws. Article XIX of the 1998 FFW Constitution and By-Laws. Montano’s election on the fround that FFW Staff Association is not a legitimate labor organization. It is well-settled that FFW.ISSUE: Wheteher or not CA gravely erred in upholding the jurisdiction of the BLR and granting the petition to annul Atty. Pursuant to its authority under Article 226.1awph!1 Section 76.

he continued to perform his functions as staff member of FFW and no evidence was presented to show that he tendered his resignation. Montaño is not qualified to run for the position but not for failure to meet the requirement specified under Section 26 (d) of Article VIII of FFW Constitution and By-Laws. Accordingly. the election of Atty. concur with the CA that Atty. FFW COMELEC is vested with authority and power. . however. FFW COMELEC. The CA subsequently affirmed this ruling of the BLR but held Atty. The FFW COMELEC’s ruling which considered Atty. We find that both the BLR and CA erred in their findings. We note that the CA’s declaration of the illegitimate status of FFW Staff Association is proscribed by law. to screen candidates and determine their qualifications and eligibility to run in the election and to adopt and promulgate rules concerning the conduct of elections. Montaño. undeniably. its decision and ruling will not be interfered with.40 The Committee is also regarded as the final arbiter of all election protests. We nonetheless resolve to affirm the CA’s finding that Atty. The FFW Constitution and By-laws are clear that no member of the Governing Board shall at the same time perform functions of the rank-and-file staff. The BLR. under the FFW Constitution and By-Laws.after he was elected. albeit challenged. Montaño’s candidacy in violation of the FFW Constitution is therefore correct. Montaño unqualified for the position for failing to meet the requirements set forth therein. We. overturned FFW COMELEC’s ruling and held that the applicable provision is Section 26 of Article VIII. To begin with. The BLR erred in disregarding this clear provision. the FFW COMELEC disqualified Atty. Montaño as FFW VicePresident is null and void.39 Under the Rules Implementing the Labor Code.38 On this basis. has sufficient authority to adopt its own interpretation of the explicit provisions of the federation’s constitution and by-laws and unless it is shown to have committed grave abuse of discretion. owing to the preclusion of collateral attack. Montaño is disqualified to run for the position of National Vice-President in view of the proscription in the FFW Constitution and By-Laws on federation employees from sitting in its Governing Board. thus. the Committee shall have the power to prescribe rules on the qualification and eligibility of candidates and such other rules as may facilitate the orderly conduct of elections.41 From the foregoing.

JR. LUZMINDO D. MACLIT. HON. Mendoza and Romeo M. EDGARDO VILLANUEVA. ATIENZA. The COMELEC was composed of petitioner Dante M. LEMUEL R. Nardito C. RAGASA. JOSE VITO. ACORDA.R. FAUSTINO ERMINO. Petitioners and private respondents are members of FLAMES. ALVAREZ. VIDANES. Respondents. FELICITO MACASAET.. GAVINO R. Escall. and Jaime T. and JOSE Z. and GIL G. JAIME T. TAYAO. ROGELIO CERVITILLO. EDGARDO G. GAUDENCIO CAMIT. DOLE. CIRUJANO. Macapulay as members. JOHNSON S. REYES. DANTE PARAO. DIOKNO. Ong. Alvarez.. No. and petitioners Jaime C. REYES.. NARDS PABILONA. Alfredo J. ROMULO AQUINO. VERGARA. ROMEO M. Valeriano were . LEANDRO M. HANS LEO J. 168475 July 4. JR. JAIME C. MANILA. VALERIANO.G. ALBERTO ALCANTARA. EDGARDO DAYA. BONIFACIO F. Alfredo J. EDGARDO SEVILLA. private respondents Jimmy S. JIMMY S. Ong’s candidacy on the ground that he was not a member of FLAMES. NARDITO C. MARCELINO MORELOS. Petitioners. CHICO-NAZARIO. Valeriano filed their respective certificates of candidacy. JR. Subsequently. EVANGELINE ESCALL. GAUDENCIO JIMENEZ. The certificates of candidacy of Nardito C. MAXIMO A. ONG. CADVONA. CAOC. REYNALDO ESPIRITU. 2007 EMILIO E. The COMELEC rejected Jimmy S. DANTE M. JESUS SAMIA. ARMANDO YALUNG. TULLO. FRANCISCO ESCOTO. Tong as its chairman. Escall. ANTONIO Z. LEANDRO C. MASIGLAT. JR. VICENTE R.. ROBERTO M. TONG. JR. DE VERA. MACAPULAY. JOSE O. ANTONIO DE LUNA. TABILOG. EDWIN LAYUG. in his capacity as Director of the Bureau of Labor Relations. vs. ALCANTARA. PABLO LUCAS. Alvarez. ARNALDO G. ALBERTO MABUGAT. MED-ARBITER TRANQUILINO C. REYNALDO REYES. ALFREDO ESCALL.: FACTS: The First Line Association of Meralco Supervisory Employees (FLAMES) is a legitimate labor organization which is the supervisory union of Meralco. J. CACDAC. MENDOZA. and Jaime T..

Valeriano (Ong.. he interest of FLAMES. issued a Decision in favor of private respondents. Alvarez. et al. Evangeline Escall. c) Declare Failure of Election. et al. Alfredo J. petitioners filed an appeal before the Director of the BLR. The Director of the BLR issued a Resolution. 226. to wit: ART. ISSUE: Whether or not the Court of Appeals committed grave abuse of discretion when it affirmed the jurisdiction of the BLR to take cognizance of the case. et al. et al.The Court of Appeals found petitioners’ appeal to be bereft of merit.similarly rejected on the basis of the exclusion of their department from the scope of the existing collective bargaining agreement (CBA). Jr. Rogelio Cervitillo. officially disqualified to run and/or to participate in the FLAMES elections. filed with the Med-Arbitration Unit of the DOLE-NCR.). and Faustino Ermino (Daya. a Petition to: a) Nullify Order of Disqualification. at their own initiative or upon request of either or both parties. Antonio de Luna. We affirm the finding of the Court of Appeals upholding the jurisdiction of the BLR. declaring Daya. The COMELEC issued a Decision. Jose Vito. et al. Escall.. on all inter- . Ong. and a certain Leandro M. Daya. – The Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of the Department of Labor shall have original and exclusive authority to act. Armando Yalung. et al. and d) Declare Holding of New Election to be Controlled and Supervised by the DOLE. Article 226 of the Labor Code is hereunder reproduced. Pablo Lucas. along with Ong. BUREAU OF LABOR RELATIONS.). affirming in toto the assailed Decision of the Med-Arbiter. Petitioners elevated the case to the Court of Appeals via a Petition for Certiorari. Reyes. Med-Arbiter Tranquilino B. Marcelino Morelos. Jaime T. Private respondents Daya. In their campaign. Leandro Tabilog.. Nardito C. Petitioners filed a Petition with the COMELEC seeking the disqualification of private respondents Edgardo Daya. Private respondents Jimmy S. b) Nullify Election Proceedings and Counting of Votes. Aggrieved. Edwin Layug. they allegedly colluded with the officers of the Meralco Savings and Loan Association (MESALA) and the Meralco Mutual Aid and Benefits Association (MEMABA) and exerted undue influence on the members of FLAMES. HELD: The Petition is devoid of merit. Tabilog filed a Petition for the nullification of the COMELEC order before the MedArbitration Unit of the Department of Labor and Employment (DOLE). Nards Pabilona. Alberto Alcantara. Reynaldo Espiritu. Reynaldo Reyes.

and includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by-laws of a union. which is relied upon by petitioners in arguing that the BLR had been divested of its jurisdiction. The amendment to Article 226. by the FLAMES COMELEC in the 7 May 2003 elections. There is no question that this is one which involves a dispute within or inside FLAMES. As defined. 14. thus: Sec. Court of Appeals. The second paragraph of Article 226 of the same Code is likewise hereby amended to read as follows: "The Bureau shall have fifteen (15) calendar days to act on labor cases before it. simply reads. It must also be stressed that even as the dispute involves allegations that private respondents Daya. as couched in Republic Act No. was explicit in declaring that the BLR has the original and exclusive jurisdiction on all inter-union and intra-union conflicts. there should be no more doubt as to its jurisdiction. an intra-union conflict would refer to a conflict within or inside a labor union. et al. 6715. subject to extension by agreement of the parties. At issue is the propriety of the disqualification of private respondents Daya. Rule I of the Rules Implementing Book V of the Labor Code. a labor union.union and intra-union conflicts. The controversy in the case at bar is an intra-union dispute. interpreting Article 226 of the Labor Code. except those arising from the implementation or interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration. subject to extension by agreement of the parties. et al. viz: (z) "Intra-Union Dispute" refers to any conflict between and among union members. grievances or problems arising from or affecting labor-management relations in all workplaces whether agricultural or nonagricultural. sought the help of non-members of the .. The Bureau shall have fifteen (15) working days to act on labor cases before it. including cases arising from chartering or affiliation of labor organizations or from any violation of the rights and conditions of union membership provided for in the Code. We said that since Article 226 of the Labor Code has declared that the BLR shall have original and exclusive authority to act on all inter-union and intra-union conflicts. an intra-union dispute is defined under Section (z). while an inter-union controversy or dispute is one occurring or carried on between or among unions..35 More specifically." This Court in Bautista v. and all disputes.

it was an invocation of the power and authority of the BLR to act on an intra-union conflict. March 16.’s complaint filed before the Med-Arbiter failed to comply with the jurisdictional requirement because it was not supported by at least thirty percent (30%) of the members of the union. therefore. et al. 169717. et al. Section 1 of Rule XIV of the Implementing Rules of Book V mandates the thirty percent (30%) requirement only in cases where the issue involves the entire membership of the union.union in their election campaign to the detriment of FLAMES. We are.UNION PRESIDENT. and the Court of Appeals rightfully rejected. Indubitably.VS. ZACARRIAS JERRY VICTORIO . brought the case to the BLR. It requires no further interpretation. No. • On February 19. the contention of petitioners that the private respondents Daya.. CHARTER CHEMICAL AND COATING CORPORATION. We cannot accept. Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation . when private respondents Daya. which is clearly not the case before us. FIRST DIVISION [G. et al. before the BLR was properly within its cognizance.R.. 1999. It remains as one which involves the grievance over the constitution and bylaws of a union. the same does not detract from the real character of the controversy. and it is a controversy involving members of the union. The Petition which was initiated by private respondents Daya. Moreover. the nonmembers of the union who were alleged to have aided private respondents Daya. unable to understand petitioners’ persistence in placing the controversy outside of the jurisdiction of the BLR. The issue is obviously limited to the disqualification from participation in the elections by particular union members. et al. PETITIONER. The law is very clear. it being an intraunion dispute. RESPONDENT. are not parties in the case.. 2011] SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER).

1999. and (2) the inclusion of supervisory employees within petitioner union. the prior certification election filed .O. Med-Arbiter Tomas F. • On motion for reconsideration. In its January 13. Rule VI of Department Order (D. On the contrary. however." and "Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas" were not executed under oath and certified by the union secretary and attested to by the union president as required by Section 235 of the Labor Code in relation to Section 1. thus. the DOLE sustained the dismissal of the petition for certification after it took judicial notice that another union. The Med-Arbiter ruled that petitioner union is not a legitimate labor organization because the Charter Certificate. said supervisory employees are prohibited from joining petitioner union which seeks to represent the rank-and-file employees of respondent company. the DOLE found that a review of the records indicates that no certification election was previously conducted in respondent company. fatally defective. The union registration was. 9. that the charter certificate need not be verified and that there was no independent evidence presented to establish respondent company's claim that some members of petitioner union were holding supervisory positions.. • On April 14. "Sama-samang Pahayag ng Pagsapi at Authorization. not being a legitimate labor organization. petitioner union has no right to file a petition for certification election for the purpose of collective bargaining.) No. series of 1997. mill operator and leadman who performed supervisory functions. Under Article 245 of the Labor Code. 1998. i. the DOLE initially issued a Decision[8] in favor of respondent company dismissing petitioner union's appeal on the ground that the latter's petition for certification election was filed out of time. the DOLE reversed its earlier ruling. • MEDARBITERS RULING:On April 30.(respondent company) with the Mediation Arbitration Unit of the DOLE. As a result. contrary to the findings of the MedArbiter. Falconitin issued a Decisiondismissing the petition for certification election.e. • DOLES RULING:July 16. 2000 Decision. National Capital Region. previously filed a petition for certification election on January 16. 1999. respondent company filed an Answer with Motion to Dismiss[4] on the ground that petitioner union is not a legitimate labor organization because of (1) failure to comply with the documentation requirements set by law.The Med-Arbiter further held that the list of membership of petitioner union consisted of 12 batchman. Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating Corporation. Although the DOLE ruled. 1999.

Id. Hon. likewise. 331 Phil. 1999 Decision of the DOLE. Laguesma. ISSUE:WON the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of jurisdiction in holding that the alleged mixture of rank-and-file and supervisory employee[s] of petitioner [union's] membership is [a] ground for the cancellation of petitioner [union's] legal personality and dismissal of [the] petition for certification election. denied by the Med-Arbiter and. HELD: • The right to file a petition for certification election is accorded to a labor organization provided that it complies with the requirements of law for proper registration. It. there was no obstacle to the grant of petitioner union's petition for certification election. the CA held that the issues as to the legitimacy of petitioner union may be attacked collaterally in a petition for certification election and the infirmity in the membership of petitioner union cannot be remedied through the exclusioninclusion proceedings in a pre-election conference pursuant to the ruling in Toyota Motor Philippines v. While this ruling was based on the interpretation of the previous Implementing Rules provisions which were supplanted by the 1997 amendments. 356 (1996). We apply these principles to this case. • The charter certificate need not be certified under oath by the local union's secretary or treasurer and attested to by its president. was dismissed by the DOLE for being filed out of time. it has no legal right to file a petition for certification election. considering that petitioner union is not a legitimate labor organization. Moreover. Hence. • CA's RULING: In nullifying the decision of the DOLE. upheld the Med-Arbiter's finding that petitioner union consisted of both rank-and-file and supervisory employees. Toyota Motor Philippines Corporation Labor Union.[11] Thus. the Court ruled that it was not necessary for the charter certificate to be certified and attested by the local/chapter officers. likewise.by Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating Corporation was. The inclusion of supervisory employees in a labor organization seeking to represent the bargaining unit of rank-and-file employees does not divest it of its status as a legitimate labor organization. the appellate court gave credence to the findings of the Med-Arbiter that petitioner union failed to comply with the documentation requirements under the Labor Code. • In San Miguel Foods-Cebu B-Meg Feed Plant v. • The issue as to the legal personality of petitioner union is not barred by the July 16. we . on appeal.

opposed THEU’s petition for certification election on the ground that the list of union members submitted by it was defective and fatally flawed as it included the names and signatures of supervisors. a legitimate labor organization said to represent majority of the rank-and-file employees of THIGCI. petitioner. it validly acquired the status of a legitimate labor organization upon submission of (1) its charter certificate. and its principal office.believe that the same doctrine obtains in this case. as well as employees of The Country Club.[23] (Emphasis supplied) • In accordance with this ruling. THIGCI. their addresses.[25] and (3) its constitution and by-laws[26]-. J. • The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as a legitimate labor organization. respondent. in its Comment[1] filed on November 27. 776. terminated and absent without leave (AWOL) employees. 1997. filed a petition for certification election before the DOLE Mediation-Arbitration Unit. the Tagaytay Highlands Employees Union (THEU)– Philippine Transport and General Workers Organization (PTGWO). Regional Branch No. Considering that the charter certificate is prepared and issued by the national union and not the local/chapter. Consequently. 1997. Inc. petitioner union's charter certificate need not be executed under oath.the last two requirements having been executed under oath by the proper union officials as borne out by the records.. a corporation distinct and separate from THIGCI. and that out of the 192 . TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED. vs. resigned. it does not make sense to have the local/chapter's officers x x x certify or attest to a document which they had no hand in the preparation of. IV. DECISION CARPIO-MORALES. Local Chapter No. TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO. • The legal personality of petitioner union cannot be collaterally attacked by respondent company in the certification election proceedings.[24] (2) the names of its officers.: On October 16.

Rule V of said Department Order provides that the legitimacy of its registration cannot be subject to collateral attack. resigned and AWOL employees or employees of a separate and distinct corporation.signatories to the petition. Rule XI of DOLE Department Order No. the MedArbiter should. the Med-Arbiter held that the same should be properly raised in the exclusion-inclusion proceedings at the pre-election conference. THEU asserted that it had complied with all the requirements for valid affiliation and inclusion in the roster of legitimate labor organizations pursuant to DOLE Department Order No.[6] and that Section 5. it continues to enjoy the rights accorded to a legitimate organization. . 1997. he held that it should be coursed through an independent petition for cancellation of union registration which is within the jurisdiction of the DOLE Regional Director. THEU thus concluded in its Reply[7] that under the circumstances. pursuant to Article 257 of the Labor Code and Section 11. 09. only 71 were actual rank-and-file employees of THIGCI. and submitted copies of the handwritten denial and withdrawal of some of its employees from participating in the petition. As for the allegation that some of the signatures were secured through fraudulent and deceitful means. In any event. the Med-Arbiter held that THIGCI failed to submit the job descriptions of the questioned employees and other supporting documents to bolster its claim that they are disqualified from joining THEU. 9.[5] on account of which it was duly granted a Certification of Affiliation by DOLE on October 10. and for as long as there is no final order of cancellation. automatically order the conduct of a certification election. THIGCI also alleged that some of the signatures in the list of union members were secured through fraudulent and deceitful means. series of 1997. Passing on THIGCI’s allegation that some of the union members are supervisory. DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election among the rank-and-file employees.

the names of alleged disqualified supervisory employees and employees of the Country Club. held that since THEU is a local chapter. DOLE Undersecretary Rosalinda Dimalipis-Baldoz. It held that while a petition for certification election is an exception to the innocent bystander rule. hence.THIGCI appealed to the Office of the DOLE Secretary which set aside the said Med-Arbiter’s Order and accordingly dismissed the petition for certification election on the ground that there is a “clear absence of community or mutuality of interests. and that regarding the participation of alleged resigned and AWOL employees and those whose signatures are illegible. . cannot negate the legitimacy it has already acquired before the petition.” that rather than disregard the legitimate status already conferred on THEU by the Bureau of Labor Relations. the issue can be resolved during the inclusion-exclusion proceedings at the pre-election stage.. “the alleged retraction and withdrawal of support by 45 of the 70 remaining rank-and-file members . a separate and distinct corporation.” it finding that THEU sought to represent two separate bargaining units (supervisory employees and rankand-file employees) as well as employees of two separate and distinct corporate entities. the Court of Appeals denied THIGCI’s Petition for Certiorari and affirmed the DOLE Resolution. the twenty percent (20%) membership requirement is not necessary for it to acquire legitimate status. . The records of the case were thus ordered remanded to the Office of the MedArbiter for the conduct of certification election. Inc. hence. Upon Motion for Reconsideration by THEU. the employer may pray for the dismissal of such petition on the basis of lack of mutuality of interests of the members of the union as well as lack of employer-employee relationship “ISSUES Won SUPERVISORY EMPLOYEES AND NON-EMPLOYEES COULD SIMPLY BE REMOVED FROM APPELLEES ROSTER OF RANK-ANDFILE MEMBERSHIP INSTEAD OF RESOLVING THE LEGITIMACY OF RESPONDENT UNION’S STATUS . should simply be removed from the THEU’s roster of membership.

right of supervisory employees. — Managerial employees are not eligible to join. the Med-Arbiter summarily disregarded the petitioner’s prayer that the former look into the legitimacy of the respondent Union by a sweeping declaration that the union was in the possession of a charter certificate so that ‘for all intents and purposes. . Citing Toyota[19] which held that “a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. depends on whether or not the labor organization has attained the status of a legitimate labor organization. Ledesma[20] which held that: “The Labor Code requires that in organized and unorganized establishments.’”[21] (Underscoring and emphasis supplied). to wit: Article 245. assist or form separate labor organizations of their own.Won THE DISQUALIFIED EMPLOYEES’ STATUS COULD READILY BE RESOLVED DURING THE INCLUSION AND EXCLUSION PROCEEDINGS HELD: The statutory authority for the exclusion of supervisory employees in a rankand-file union. is Article 245 of the Labor Code. Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate organization. assist or form any labor organization.” and the subsequent case of Progressive Development Corp. The acquisition of rights by any union or labor organization. first and foremost. a petition for certification election must be filed by a legitimate labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join. – Pizza Hut v. particularly the right to file a petition for certification election. it does not provide what would be the effect if a rank-and-file union counts supervisory employees among its members. Ineligibility of managerial employees to join any labor organization. While above-quoted Article 245 expressly prohibits supervisory employees from joining a rank-and-file union. In the case before us. and vice-versa. or vice-versa.

300 SCRA 120 [1998]. Underscoring and emphasis supplied by petitioner. its legal personality cannot be subject to collateral attack. Not being one. It cannot. therefore.. anterior to the granting of an order allowing a certification election. a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. based on this provision [Article 245].).) The petition fails. an organization which carries a mixture of rank-and-file and supervisory employees cannot posses any of the rights of a legitimate labor organization. “[i]t becomes necessary . quoting Toyota. to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code. be a legitimate labor organization. anterior to the granting of an order allowing a certification election. viz: ‘x x x “Clearly. .” (Emphasis by petitioner) (Dunlop Slazenger (Phils. to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code. After a certificate of registration is issued to a union. v.petitioner contends that.”[22] Continuing.” Public respondent gravely misappreciated the basic antipathy between the interest of supervisors and the interest of rank-and-file employees. petitioner argues that without resolving the status of THEU. Secretary of Labor. for any guise or purpose. including the right to file a petition for certification election for the purpose of collective bargaining. . It may be questioned only in an independent petition for cancellation in accordance with Section 5 . the DOLE Undersecretary “conveniently deferred the resolution on the serious infirmity in the membership of [THEU] and ordered the holding of the certification election” which is frowned upon as the following ruling of this Court shows: We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of the respondent union can be remedied in “the pre-election conference thru the exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters. It becomes necessary. Due to the irreconcilability of their interest we held in Toyota Motor Philippines v. Toyota Motors Philippines Corporation Labor Union.

Book IV of the “Rules to Implement the Labor Code” (Implementing Rules) which section reads: Sec. (c) Misrepresentation. false entries or fraud in the preparation of the financial report itself. The following shall constitute grounds for cancellation of union registration: (a) Misrepresentation. (b) Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto. the minutes of ratification. . (f) Entering into collective bargaining agreements which provide terms and conditions of employment below minimum standards established by law. (d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the losing of every fiscal year and misrepresentation. but may be questioned only in an independent petition for cancellation in accordance with these Rules. as follows: Art. false statements or fraud in connection with the election of officers. minutes of the election of officers. false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto. and the list of members who took part in the ratification. The labor organization or workers’ association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack.of Rule V. 5. Effect of registration. (Emphasis supplied) The grounds for cancellation of union registration are provided for under Article 239 of the Labor Code. the list of voters. Grounds for cancellation of union registration. (e) Acting as a labor contractor or engaging in the “cabo” system. or failure to subject these documents together with the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election. or otherwise engaging in any activity prohibited by law. 239.

false statement and misrepresentation. Regarding the alleged withdrawal of union members from participating in the certification election. Book V of the Implementing Rules. this Court’s following ruling is instructive: “‘[T]he best forum for determining whether there were indeed retractions from some of the laborers is in the certification election itself wherein the workers can freely express their choice in a secret ballot. Such representation and certification election cases are not to be . should be considered to have already acquired juridical personality which may not be assailed collaterally. unless such inclusion is due to misrepresentation. and not to intervene in a petition for certification election. the proper procedure is. as reflected above. while the procedure for cancellation of registration is provided for in Rule VIII. (i) Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau. (Emphasis supplied). and (j) Failure to comply with the requirements under Articles 237 and 238. checking off special assessments or any other fees without duly signed individual written authorizations of the members. having been validly issued a certificate of registration. (h) Other than for mandatory activities under this Code. The inclusion in a union of disqualified employees is not among the grounds for cancellation.(g) Asking for or accepting attorney’s fees or negotiation fees from employers.’ Suffice it to say that the will of the rank-and-file employees should in every possible instance be determined by secret ballot rather than by administrative or quasi-judicial inquiry. false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of above-quoted Article 239 of the Labor Code. As for petitioner’s allegation that some of the signatures in the petition for certification election were obtained through fraud. for it to file a petition for cancellation of the certificate of registration. THEU.

Let the records of the case be remanded to the office of origin. IV.”[23] As for the lack of mutuality of interest argument of petitioner.[27] WHEREFORE. as found by the court a quo. Inc. powers and prerogatives that would show that they can effectively recommend managerial actions which require the use of independent judgment. 1996). (Emphasis supplied). for the immediate conduct of a certification election subject to the usual pre-election conference. the petition is hereby DENIED.[24] there is nothing mentioned about the supervisors’ respective duties. its failure to present substantial evidence that the assailed employees are actually occupying supervisory positions. Secretary of Labor:[26] Designation should be reconciled with the actual job description of subject employees x x x The mere fact that an employee is designated manager does not necessarily make him one. fact-finding character as to which of the competing unions represents the genuine choice of the workers to be their sole and exclusive collective bargaining representative with their employer. it was stressed that: What is essential is the nature of the employee’s function and not the nomenclature or title given to the job which determines whether the employee has rank-and-file or managerial status or whether he is a supervisory employee. v. 103743. Regional Branch No. ASSIGNMENT NUMBER 4 .[25] As this Court put it in Pepsi-Cola Products Philippines. does not lie given. the Mediation-Arbitration Unit.taken as contentious litigations for suits but as mere investigations of a nonadversary. R. No. While petitioner submitted a list of its employees with their corresponding job titles and ranks. there would be an absurd situation where one can be given the title just to be deprived of the right to be a member of a union. Otherwise. In the case of National Steel Corporation vs. it. Laguesma (G. January 29. at all events.

On appeal. This prompted the Petitioner Union to negotiate with the Labor Management Committee (LMC) for filling up the vacancies. The CCBI filed a Petition for Assumption of Jurisdiction with the Secretary of DOLE.. To curve the negative effect. On the other hand. Meanwhile. On 2003. it implemented three (3) waves of an Early Retirement Program (ERP).General Santos Coca-Cola Plant Free Worker’s Union vs. No resolution was reached on the matter. vacancies were created. petitioner failed to adduce evidence to prove that contracting out of jobs by the company resulted in the dismissal of petitioner’s members. J. G. led to the Union’s . The DOLE Secretary issued an order enjoining the threatened strike and certifying the dispute to the NLRC compulsory arbitration. CA affirmed the decision finding that JLBP was an independent contractor and also found that contracting out jobs was a valid exercise of management prerogative to meet the exigent circumstances. leading to closure of certain sales offices and conventional sales route. On January 2002 the Union filed in with the National Conciliation and Mediation Board (MCMB) a Notice of Strike on the ground of ULP for contracting-out services regularly performed by union members (“union busting”). the CCBPI experienced a significant decline in profitability due to the Asian economic crisis. prevented them from exercising their right to self-organization. 2009 NACHURA. Coca-Cola Bottlers Philippines Inc. After conciliation/mediation proceedings the Parties failed to arrive to an amicable settlement.R. the NLRC ruled that the Company is not guilty of ULP anchoring its ruling on the validity of the “Going-to-the-Market” system.: Facts: In 1990. No. Because several availed of the ERP. 178647 February 13. CCBPI engaged the services of JLBP Services Corporation that provides manpower services. faced with freeze hiring. there was a memorandum issued mandating to put on hold all requests for hiring to fill in vacancies in both regular and temporary positions.

Art. G. FR. The NLRC found – and the same was sustained by the CA – that the company’s action to contract-out the services and functions performed by Union members did not constitute unfair labor practice as this was not directed at the members’ right to self-organization. . 180892 April 7. and MERCEDES HINAYON. All decisions were in favour of Respondents declaring the latter not guilty of Unfair Labor Practice. UNIVERSITY OF SANTO TOMAS. 248 UNFAIR LABOR PRACTICE OF EMPLOYERS. It was the Union that had the burden of adducing substantial evidence to support its allegations of unfair labor practice. Ruling: Petition is denied. JR. the CA declared that CCBPI was not guilty of unfair labor practice. Without that element. vs. the acts. Unfair Labor Practice refers to “acts that violate the workers’ right to organize” The prohibited acts are related to the workers’ right to selforganization and to the observance of a CBA. Issue: Whether contracting-out of jobs to JLBP amounted to ULP.: FACTS: This case is a Petition to reverse CA’s decision. ROLANDO DE LA ROSA. – It shall be unlawful for an employer to commit any of the following unfair labor practices: (c) To contract out services or functions being performed by union members when such will interfere with.demise or that their group was singled out by the company. Consequently.R. 2009 VELASCO. CA affirmed NLRC’s resolution affirming LA Madriaga’s 2003 Decision. restrain or coerce employees in the exercise of their right to self-organization. J. FR. REV. are not unfair labor practice. No. DOMINGO LEGASPI. UST FACULTY UNION. even if unfair. REV. RODELIO ALIGAN.. which burden it failed to discharge. Both the NLRC and the CA found that petitioner was unable to prove its charge of unfair labor practices.

Secretary General of the UST. 2. 1.. issued a Memorandum allowing the request of the Faculty Clubs of the university to hold a convocation. Thus. Mariño. accompanied by the barangay captain in the area. Marino group filed a compliant for ULP against UST with the Arbitration Branch. Mariño. Meanwhile. Rodel Aligan.The UST Faculty Union (USTFU) informed its members of a General Assembly. but Gil Gamilla and other faculty members (Gamilla Group) were elected as the president and officers. of the union. there were two (2) groups claiming to be the USTFU: the Gamilla Group and the group led by Atty. to the Director Bureau of Labor Relations it affirmed the decision of Med-Arbiter. which the members of the faculty including members of USTFU attended without the participation of UST administration. Eduardo J. Thus. Thereafter. On appeal. an armed security guard of the UST was posted in front of the USTFU office. respectively. Jr. It also filed a complaint before Med-Arbiter praying for the nullification of the election of the Gamilla Group. some members walked out. padlocked the office of the USTFU. (Mariño Group). the Arbitration Branch of the NLRC issued a Decision dismissing the complaint for lack of merit on the ground that USTFU failed to establish with clear and . One of its agenda is the election of officers. And on appeal before this Court. Jr. The Med-Arbiter declared the election of Gamilla Group as null and void and ordering that this group cease and desist from performing the duties and responsibilities of USTFU officers. The then incumbent president of the USTFU was Atty. Thereafter. Gamilla. Learning that the convocation was intended for election. An election of USTFU was conducted by a group called “Reformist Alliance”.P. O. a CBA was entered between Gamilla Group and UST superseding the existing CBA of UST and USTFU. Chief Security Officer of the UST. USTFU (Marino Group) filed a Manifestation with the Arbitration Branch of the NLRC informing it of the Decision of the Court. Fr. Afterwards. Such election was communicated to the UST administration in. the Court upheld the ruling of BLR.

Issue: Whether or not the decision nullifying the election of Gamilla Group. SC citing De Paul/King Philip Customs Tailor v. USTFU appealed to the NLRC. NLRC that "a party alleging a critical fact must support his allegation with substantial evidence." While in the more recent case Standard Chartered Bank Employees Union (NUBE) v. the NLRC affirmed the decision of LA. Thus. Confesor: “In order to show that the employer committed ULP under the Labor Code. (APPARENT CONFLICT OF DECISION BETWEEN MED-ARBITER AND LABOR ARBITER’S DECISION) As to the CBA. (1) the Gamilla Group presented more than sufficient evidence to establish that they had been duly elected as officers of the USTFU. Any decision based on unsubstantiated allegation cannot stand as it will offend due process.convincing evidence that indeed UST was guilty of ULP. substantial evidence is required to support the claim. UST Is Not Guilty of ULP The general principle is that one who makes an allegation has the burden of proving it. in the case of ULP. this petition. the alleging party has the burden of proving such ULP. UST was justified in dealing with and entering into a CBA with the Gamilla Group. including helping the Gamilla Group in securing the USTFU office. there are exceptions to this general rule. was a sufficient fact that constitutes ULP And must be recognized by the LA/NLRC? Ruling: The petition must be denied. the Court affirmed the decision of NLRC. While. . and (2) the ruling of the med-arbiter that the election of the Gamilla Group was null and void was not yet final and executory. When the case is elevated to CA. Hence. the labor arbiter ruled that when the new CBA was entered into.

uncorroborated by other overt acts leading to the commission of ULP. constitutes unfair labor practice. respondents were bound to deal with them. As such. Moreover. ART. 248(g) of the Labor Code provides that: Unfair labor practices of employers.––It shall be unlawful for an employer to commit any of the following unfair labor practice: (g) To violate the duty to bargain collectively as prescribed by this Code. does not support a claim that UST organized the convocation in connivance with the Gamilla Group.Substantial evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion”. the labor arbiter ruled that: “Neither are We persuaded by complainant’s stand that respondents’ acquiescence to bargain with USTFU. In no way can the contents of the letter memorandum be interpreted to mean that faculty members were required to attend the convocation. Procedure in collective bargaining. Such principle finds justification in the fact that ULP is punishable with both civil and/or criminal sanctions. the Memorandum.” The Gamilla Group represented itself to UST as the duly elected officials of the USTFU. Art. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice.––The following procedures shall be observed in collective bargaining: (a) When a party desires to negotiate an agreement. 252 of the Code defines the duty to bargain collectively as: . And the phrase "we are allowing them to hold a convocation" negates any idea that the UST would participate in the proceedings. it shall serve a written notice upon the other party with a statement of its proposals. Not one coercive term was used in the memorandum to show that the faculty club members were compelled to attend such convocation. does not conclusively show and establish the commission of such unlawful acts. 250. x x x Such conduct alone. In other words. It is the burden of the alleging party to prove such allegation with substantial evidence. Art. through Gamilla’s group.

petitioner filed a complaint with the med-arbiter praying for the nullification of the election of the Gamilla Group.––The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages. Petitioner again failed to present evidence to support its contention that UST committed acts amounting to ULP. Respondents could not have been expected to stop dealing with the Gamilla Group on the mere accusation of the Mariño Group that the former was not validly elected into office. UST’s failure to negotiate with the USTFU would have constituted ULP. As such. hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession. As to the padlocking of the USTFU office. The Gamilla Group submitted a Letter whereby it informed Fr. Rolando De La Rosa that its members were the newly elected officers and directors of USTFU. there was NO reason not to recognize the Gamilla Group as the new officers and directors of USTFU. More important though is the fact that the Mariño Group did not informed the UST of their objections to the election of the Gamilla Group. Before the SC held the nullification of the election held by the Gamilla Group. such cannot be used to claim that the guard prevented the Mariño Group from performing its duties. while it evidences that there was indeed a guard posted at the USTFU office. The pieces of evidence presented. there was a presumption that the members of the Gamilla Group were validly elected officers and directors of USTFU. In sum. fail to support petitioner’s conclusions. petitioner makes several . It is not the duty or obligation of UST to inquire into the validity of the election of the Gamilla Group. With regard to the photograph. Such issue is properly an intra-union controversy subject to the jurisdiction of the med-arbiter of the DOLE. And the UST was obligated to deal with the USTFU. Instead. as the recognized representative of the bargaining unit. through the Gamilla Group.

Jocelyn Fronda. ______ Philippine Skylanders and Workers Association-NCW. Joseph Marisol. Inc. pending settlement of the controversy. 1993. Inc.. a local labor union affiliated with the Phillippine Association of Free Labor Unions (PAFLU)[a. PAFLU won in the certification election conducted among the rank and file employees of Philippine Skylander. . G. petitioner miserably failed to adduce substantial evidence as basis for the grant of relief. Pepito Rodillas. Several months later. its rival union. Mother federation] September. Philippine Skylanders Employees Association-WATU (PSEA-WATU) immediately protested the result of the election before the Secretary of Labor. LA Emerson Tumanon. substantial evidence or such relevant evidence as a reasonable mind might accept as sufficient to support a conclusion is required. NLRC.a. PSEA subsequently affiliated itself with the National Congress of Workers (NCW). The onus probandi falls on the shoulders of petitioner to establish or substantiate such claims by the requisite quantum of evidence. Philippine Skylanders. Philippine Association of Free Labor Unions (PAFLU) SEPTEMBER (Now unified PAFLU) and Serafin Ayroso. PAFLU SEPTEMBER and NLRC. Mariles Romulo and Francisco Dakila vs.k. Nerisa Mortel. No. Teofilo Quirong. Ricardo Lumba. PSEA sent PAFLU a notice of disaffiliation citing as reason PAFLU’s supposed deliberate and habitual dereliction of duty toward its members. Macario Cabanias. Sharon Castillo. 127431. Danilo Carbonel. changed its name to Philippine Skylanders Employees AssociationNational Congress of Workers (PSEA-NCW). In this case. FACTS: Nov. Manuel Cadiente and Herminia Riosa vs. the Philippine Skylander Employees Association (PSEA).allegations that UST committed ULP. 2002 Bellosilo. J:. In labor cases as in other administrative proceedings. January 31.R. Leonardo Reyes. Manuel Eda. (PSI). Rolando Felix.

PAFLU through Serafin Ayroso filed a complaint for unfair labor practice against PSI. PAFLU Secretary General Serafin Ayroso wrote Mariles C.[7] The two (2) complaints were thereafter consolidated. 2 days later filed another complaint PAFLU claimed that Dakila was present in PSEA's organizational meeting thereby confirming his illicit participation in union activities. its president Mariles Romulo and personnel manager Francisco Dakila. according to the Labor Arbiter. Meanwhile. its collective bargaining agreement with PSI was struck down for being invalid. that the company knowingly sanctioned and confederated with Dakila in actively assisting a rival union. As PSEA-NCW's personality was not accorded recognition. PSEA could not validly separate from PAFLU. PSEA-PAFLU and their respective officers guilty of unfair labor practice. This.On March 17. Ayroso explained that with the dismissal of PSEAWATU’s election protest the time was ripe for the parties to enter into a collective bargaining agreement. PAFLU amended its complaint by including the elected officers of PSEAPAFLU as additional party respondents and claimed they were equally guilty of unfair labor practice since they brazenly allowed themselves to be manipulated and influenced by petitioner Francisco Dakila Labor Arbiter declared PSEA’s disaffiliation from PAFLU invalid and held PSI. NLRC upheld the Decision of the Labor Arbiter and conjectured that since an election protest questioning PSEA-PAFLU’s certification as the sole and exclusive bargaining agent was pending resolution before the Secretary of Labor. Ayroso added that the members of the local union had unwittingly fallen into the manipulative machinations of PSI and were lured into endorsing a collective bargaining agreement which was detrimental to their interests. Explaining. Romulo requesting a copy of PSI’s audited financial statement. was a classic case of interference for which PSI could be held responsible. join another national federation and subsequently enter into a collective bargaining agreement with its employer-company . 1994 PSEA-NCW entered into a CBA with PSI which was immediately registered with DOLE. PSI through its personnel manager Francisco Dakila denied the request citing as reason PSEA’s disaffiliation from PAFLU and its subsequent affiliation with NCW.

may validly disaffiliate from PAFLU pending the settlement of an election protest questioning its status as the sole and exclusive bargaining agent of PSI’s rank and file employees HELD: Petition Granted. . there would be no restrictions which could validly hinder it from subsequently affiliating with NCW and entering into a collective bargaining agreement in behalf of its members. instead. by collective action. let it be noted that the issue of disaffiliation is an inter-union conflict the jurisdiction of which properly lies with the Bureau of Labor Relations (BLR) and not with the Labor Arbiter. to the will of their members. Inc. Yet the local unions remain the basic units of association. free to serve their own interests subject to the restraints imposed by the constitution and by-laws of the national federation and free also to renounce the affiliation upon the terms laid down in the agreement which brought such affiliation into existence. which is an independent and separate local union. There is nothing shown in the records nor is it claimed by PAFLU that the local union was expressly forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway. The sole essence of affiliation is to increase. It was reasonable then for PSI to enter into a collective bargaining agreement with PSEA-NCW. the common bargaining power of local unions for the effective enhancement and protection of their interests. the SC upheld the right of local unions to separate from their mother federation on the ground that as separate and voluntary associations. At the outset. Liberty Cotton Mills. Reasoning: in Liberty Cotton Mills Workers Union vs. local unions do not owe their creation and existence to the national federation to which they are affiliated but. YES. The pendency of an election protest involving both the mother federation and the local union did not constitute a bar to a valid disaffiliation. the pendency of an election protest involving both the mother federation and the local union did not constitute a bar to a valid disaffiliation.ISSUE: Whether or not PSEA. As PSEA had validly severed itself from PAFLU. As such.

ü It appears however that NATU itself as a labor federation was not registered with the Department of Labor. this of the former must be preferred. instead of protection. The complaint then for unfair labor practice lodged by PAFLU against PSI. Facts ü On January 2. ü A collective bargaining agreement was concluded between THEUNATU. Policy considerations dictate that in weighing the claims of a local union as against those of a national federation. It will however be to err greatly against the Constitution if the desires of the federation would be favoured over those of its members. 1968. the desires of the mother federation to protect its locals are not altogether to be shunned. represented by its local president and the national officers of NATU (Ignacio Lacsina. TROPICAL HUT FOOD MARKET. PAFLU might have forgotten that as an agent it could only act in representation of and in accordance with the interests of the local union. Pacifico Rosal. Executive Vice- .The mere act of disaffiliation did not divest PSEA of its own personality. Parenthetically though. having been filed by a party which has no legal personality to institute the complaint. TROPICAL HUT EMPLOYEES’ UNION-CGW v. should have been dismissed at the first instance for failure to state a cause of action. elected their officers and adopted their constitution and by-laws and immediately sought affiliation with National Association of Trade Unions (NATU). President. INC. the rank and file workers of the Tropical Hut Food Market Incorporated organized a local union called the Tropical Hut Employees Union (THEU). neither did it give PAFLU the license to act independently of the local union. Inconsistent to its mission. If it were otherwise.. PAFLU cannot simply ignore the demands of the local chapter and decide for its welfare. PSEA and their respective officers. there would be disregard and neglect of the lowly workingmen.

Inc. 1973. ü The secretary of THEU made an open announcement that THEU had disaffiliated from NATU and is now affiliating with Confederation of General Workers (CGW)/ ü THEU-CGW held its annual election of officers with Jose Encinas being elected as president. (Sec 1) 2. President and Gen. ü Pacifico Rosal. but this was refused by the latter.) ü Article III (Union Membership and Union Check-off) of the agreement provided that: 1. Manager. NATU returned the letter of disaffiliation on the ground that: .. Vice President). and Tropical Hut Food Market Incorporated (represented by Cesar Azcona. Employees who are already member of the Union upon the time of signing shall be required to maintain their membership therein as a condition of continued employment. president of CGW demanded remittance of the union dues collected by the Tropical Hut Food Mart.President and Marcelino Lontok Jr. ü NATU Requested that Encinas be dismissed in view of the violation of Sec 3 of Article III of the CBA. shal upon written request of the Union be discharged by the company (Sec 3) ü A new CBA was entered by THEU-NATU and Tropical Hut incorporating the union-shop security clause and check-off authorization form ü On December 19. or who fails or refuses to maintain membership. the incumbent officers of THEU informed NATU that THEU was disaffiliating from the NATU federation. Any employee discharged from the Union for joining another federation or forming another union.

24. ii. THEU-NATU notified the entire rank and file employees of the company that they will be given forty-eight hours upon receipt to answer and affirm their membership. LABOR ARBITER (Arbitrator Cleto Villatuya) ordered: 1. The right to disaffiliate belongs to the union membership who – on the basis of verified reports received by – have not been consulted regarding the matter. ü A joint letter petition (signed by 67 employees) was filed with the Secretary of Labor. 37 on March 8 and two more on March 11. Cease and desist (company) from committing further acts of dismissal without previous order of the NLRC. ü The employees failed to reply and so a letter was sent to them advising them that the THEA-NATU shall enforce the union security clause and that a request for their dismissal has been made.i. LABOR ARBITER (Arbitrator Daniel Lucas) ordered: 1. ü Upon Dilag’s request. Desist from committing acts of unfair labor practices . the company suspended twenty four (24) workers on March 5. ü Another letter (signed by 146) member of THEU-CGW was sent to the President of the Philippines informing him of ULP committed by private respondents against THEU-CGW members. NLRC chairman and Director of Labor Relations. Withdrawal from the organization shall be valid three (3) months notice of intention to withdraw is served upon the National Executive Council. 1974. Reinstate immediately 63 complainants 2. Reinstatement of all complainants 2. ü Arturo Dilag was elected THEU-NATU president and on Feb.

NATU and Dilag appealed both decision to the NLRC. It does not mean that the said local union cannot stand on its own. . they are to be reemployed upon their voluntary reaffirmation of membership and loyalty to the THEU-NATU. ISSUE: Whether or not the dismissal of employees resulting from their unions disaffiliation for the mother federation was illegal and constituted unfair labor practice on the part of the company and federation. A local union. NLRC reversed the decisions. ü The inclusion of the word NATU after the name of the local union THEU in the registration with the Department of Labor is merely to stress that the THEU is NATU's affiliate at the time of the registration. is free to serve the interest of all its members including the freedom to disaffiliate when circumstances warrant. A local union owes its creation and continued existence to the will of its members and not to the federation to which it belongs. being a separate and voluntary association. ü There is nothing in the constitution of the NATU or in the constitution of the THEU-NATU that the THEU was expressly forbidden to disaffiliate from the federation. SECRETARY OF LABOR: affirmed. HELD: RE: Disaffiliation ü The right of a local union to disaffiliate from its mother federation is well-settled. It added that to give another chance to individual complainants. Neither can it be interpreted to mean that it cannot pursue its own interests independently of the federation. According to the NLRC they are deemed to have lost their status as employees of the company.

RE: ULP ü there is no merit in the contention of the respondents that the act of disaffiliation violated the union security clause of the CBA and that their dismissal as a consequence thereof is valid. an employer can be adjudged guilty of unfair labor practice for having dismissed its employees in line with a closed shop provision if they were not given a proper hearing. 1974 to March 8. which is to afford the employee to be dismissed an opportunity to be heard. respondent company immediately suspended them and thereafter effected their dismissal. and the suspension pending their dismissal of the other elected officers and members of the THEU-CGW. was recognized as the sole and exclusive collective bargaining agent for all its workers and employees in all matters concerning wages. This shows that the retractions were made more or less after the suspension pending dismissal on January 11. This is certainly not in fulfillment of the mandate of due process. for what is at stake is not only the employee's name or position but also his means of livelihood. ü Likewise. . 1974 of Jose Encinas. There is no use in saying that the retractions obliterated the act of disaffiliation as there are doubts that they were freely and voluntarily done especially during such time when their own union officers and co-workers were already suspended pending their dismissal. A perusal of the collective bargaining agreements shows that the THEU-NATU. ü The prerogative of the employer to dismiss or lay-off an employee should be done without abuse of discretion or arbitrainess. hours of work and other terms and conditions of employment ü Granting arguendo. ü When petitioners failed comment on their recommendation for dismissal. ü with regard to the process by which the workers were suspended or dismissed. the evidence on record shows that the letters of retraction were executed on various dates beginning January 11. 1974. and not the NATU federation. this Court finds that it was hastily and summarily done without the necessary due process. that the fact of retraction is true. .

of those in the farm in Sto. the exclusive bargaining agent of the rank-and-file workers of Purefoods’ meat division throughout Luzon.NAGKAKAISANG SAMAHANG MANGGAGAWA NG PUREFOODS RANK-AND-FILE. PUREFOODS GRANDPARENT FARM WORKERS UNION and PUREFOODS UNIFIED LABOR ORGANIZATION FACTS ü Three labor organizations and a federation are respondents in this case—Nagkakaisang Samahang Manggagawa Ng Purefoods Rank-AndFile (NAGSAMA-Purefoods). St. THOMAS FREE WORKERS UNION. the petitioner company concluded a new CBA with another union in its farm in Malvar. These organizations were affiliates of the respondent federation. NAGSAMA-Purefoods manifested to petitioner corporation its desire to re-negotiate the collective bargaining agreement (CBA) then due to expire on the 28th of the said month. ü On July 29. ü Purefoods alleged that: . ST. Tomas farm. ü The organization submitted to the company its January 28. 1995. four company employees facilitated the transfer of around 23. Purefoods Unified Labor Organization (PULO). Rosa. supervisors and electrical workers of the Sto. ü On February 8. 1995. Thomas Free Workers Union (STFWU). ü On July 24. Batangas (where STFWU was the exclusive bargaining agent) to that in Malvar. ü The following day. even as a mere observer. the regular rank-and-file workers in the Sto. were retained. Tomas.000 chickens from the poultry farm in Sto. Laguna. Tomas farm were refused entry in the company premises (They were eventually terminated. of those in the poultry farm in Sta. Batangas.) ü The farm manager. and authorizing a negotiating panel which included among others a PULO representative. adopting the draft CBA proposals of the federation. Batangas. who were members of another union. 1995. Tomas. and Purefoods Grandparent Farm Workers Union (PGFWU). in the negotiation.PUREFOODS CORPORATION vs. 1995 General Membership Resolution approving and supporting the union’s affiliation with PULO. ü The company refused to recognize PULO and its participation.

The real motive of the company in the sudden closure of the Sto. NLRC: reversed the ruling of the LA: 1. and restraint on the exercise of the employees’ right to self-organization and free collective bargaining. The closure of the Sto. That the termination of the employees complied with the 30-day notice requirement and that the said employees were paid 30-day advance salary LABOR ARBITER: Dismissed the complaint. NO ULP nor illegally dismissed the employees.1. ISSUE: Whether or not the termination of the employees and closure of the Sto. That the other complainants had no cause of action considering that it was only the Sto. PULO was not a legitimate labor organization or federation for it did not have the required minimum number of member unions 2. Badges of bad faith are evident from the following acts of the petitioner: . HELD: It is crystal clear that the closure of the Sto. Tomas farm and the mass dismissal of the STFWU members was union busting Because the requisites of a valid lockout were absent. 3. The company’s refusal to recognize the labor organizations’ affiliation with PULO was unjustified The refusal constituted undue interference in. Tomas farm was made in bad faith. or the consequence of the landowner’s pre-termination of the lease agreement 3. 4. Tomas farm which was closed 4. Tomas farm was not arbitrary but was the result of the financial non-viability of the operations therein. 2. the NLRC concluded that the company committed ULP. Tomas farm was valid.

Respondent’s officers claimed that by virtue of RA 6715.1.19 The sudden termination of the STFWU members is tainted with ULP because it was done to interfere with. restrain or coerce employees in the exercise of their right to self-organization. 3. but retained and brought the non-members to the Malvar farm. April 7. Tomas farm circumvented the labor organization’s right to collective bargaining and violated the members’ right to security of tenure. which amended the Labor Code. the closure of the Sto.R. No. and it suddenly terminated the STFWU members. 177283. 2009 Facts : In 2001. it concluded a new CBA with another union in another farm during the agreed indefinite suspension of the collective bargaining negotiations. 2. . De La Salle University Employees Association (DLSUEA-NAFTEU) G. a splinter group of respondent filed a petition for conduct of elections with the DOLE alleging that the then incumbent officers of respondent had failed to call for a regular election since 1985. the term of office of its officers was extended to five years or until 1992 during which a general assembly was held affirming their hold-over tenure until the termination of collective bargaining negotiations. it surreptitiously transferred and continued its business in a less hostile environment. De La Salle University v. it unjustifiably refused to recognize the STFWU’s and the other unions’ affiliation with PULO. Ineluctably.

On appeal. Respondents filed a complaint against petitioner for Unfair Labor Practice (ULP) claiming that petitioner unduly interfered with its internal affairs. LA dismissed the respondent ULP complaint. respondent file a notice of strike. the Court set aside the decision of NLRC. Hence. . to do the following: (1) establish a savings account for the Union where all collected union dues and agency will be deposited and held in trust. and (2) discontinue normal relations with any group within the Union including the incumbent set of officers. petitioner’s petition for review on certiorari. Petitioner in response. On respondent’s petition for certiorari before the CA.Acting on the petitioner. Issue: Whether the NLRC gravely abuse its discretion when it held that petitioner were not guilty of ULP considering that the temporary measures implemented by the University were undertaken in good faith and only to maintain its neutrality amid the intra-union dispute. Respondent wrote a letter to DLSU President to put on escrow all union dues/agency fees and whatever money considerations deducted from salaries of concerned co-academic personnel until the election of union officials has been scheduled and been held. During the pendency of this complaint. NLRC affirmed the decision of LA. the DOLE-NCR held that the holdover authority of respondent’s incumbent set of officers had been extinguished by virtue of the execution of the CBA and ordered the conduct of elections subject to pre-election conferences.

It thus behooved petitioners to observe the terms and conditions thereof bearing on union dues and representation. The federation called a meeting placing the local union under trusteeship and appointing an administrator.Ruling: It bears noting that at the time petitioners’ questioned moves were adopted. (local union) is an affiliate of ULGWP (federation). The federation asked the company to stop the remittance of the local union’s share in the education funds. Several union members failed to attend the meeting. The officers were expelled from the federation. Malayang samahan ng mga manggagagwa sa m. The Secretary General of the federation disapproved the resolution imposing the Php50 fine. A local union election was held under the action of the federation. compliance with which is mandated by express policy of the law. Petitioner union officers received letters from the administrator requiring them to explain why they should not be removed from the office and expelled from union membership. The imposition of the fine became the subject of a bitter disagreement between the Federation and the local union culminating to the latter’s declaration of general autonomy from the former. Ramos FACTS: Petitioner MSMS. It is axiomatic in labor relations that a CBA entered into by a legitimate labor organization and an employer become the law between the parties. a valid and existing CBA had been entered between the parties. Greenfield vs. The federation advised the . The company then sent a reply to petitioner’s request stating it cannot deduct fines without going against certain laws. The company led a complaint of interpleader with the DOLE. The local union requested the company to deduct the union fines from the wage of those union members who failed to attend the general membership meeting. The local union held a general membership meeting. The defeated candidates filed a petition for impeachment.

Whether or not petitioners can be deemed to have abandoned their work. The Federation filed a notice of strike with the NCMB to compel the company to effect the immediate termination of the expelled union officers. petitioner union officers were expelled for allegedly committing acts of disloyalty to the federation. 78 union shop stewards were placed under preventive suspension. mass dismissal of union officers and shop stewards. such must comply with due process. Although the union security clause may be validly enforced. Under the pressure of a strike. the company terminated the 30 union officers from employment. ISSUES: 1. threats. Secretary Drilon dismissed the petition stating it was an intra-union matter. Whether or not the company was illegal dismissal. to remand the same to the BLR would intolerably delay the case and the Labor Arbiter could rule upon it. and union busting. The company did not inquire into the cause of the expulsion and merely relied upon the federation’s allegations. 2. Later. The union members staged a walkout and officially declared a strike that afternoon. The charges against respondent company proceeds from one main issue – the termination of several employees upon the demand of the federation pursuant to the union security clause. HELD: 1. The strike was attended by violence.company of the expulsion of the 30 union officers and demanded their separation pursuant to the Union Security Clause in the CBA. The petitioners prayed for the suspension of the effects of their termination. As to the act of disaffiliation by the local union. Yes. 3. In this case. Although it started as an intra-union dispute within the exclusive jurisdiction of the BLR. coercion and intimidation . The petitioners filed a notice of strike on the grounds of discrimination. it is settled that a . Whether or not the strike was illegal. The issue is not a purely intra-union matter as it was later on converted into a termination dispute when the company dismissed the petitioners from work without the benefit of a separate notice and hearing. interference.

local union has the right to disaffiliate from its mother union in the absence of specific provisions in the federation’s constitution prohibiting such. and Treasurer. VELASCO. it was based on the termination dispute and petitioners believed in good faith in dismissing them. Inc. As to the legally of the strike. respondents failed to prove that there was abandonment absent any proof of petitioner’s intention to sever the employee-employer relationship. respectively. CHRISTOPHER PIZARRO. Such violence cannot be a ground for declaring the strike illegal.Rrespondents Christopher Pizarro. There was no such provision in federation ULGWP’s constitution.. No. The Club and the Union entered into a CBA. no lockout provision in the CBA can only be invoked when the strike is economic. the Club shall dismiss a regular rank-and-file employee on any of the following grounds: . Michael Braza.Respondent Alabang Country Club Independent Employees Union (Union) is the exclusive bargaining agent of the Club's rankand-file employees. Vice-President. (Club) is a domestic nonprofit corporation. the parties agreed that the violence was not attributed to the striking employees alone as the company itself hired men to pacify the strikers. A no-strike. INC. J..: FACTS: Petitioner Alabang Country Club.R. G. MICHAEL BRAZA. vs. JR. SECTION 4. As to the dismissal of the petitioners. ALABANG COUNTRY CLUB INDEPENDENT EMPLOYEES UNION. which provided for a Union shop and maintenance of membership shop. and Nolasco Castueras were elected Union President. NATIONAL LABOR RELATIONS COMMISSION. respondents. 3. the company was guilty of ULP. Upon written demand of the UNION and after observing due process. 2. TERMINATION UPON UNION DEMAND. 2008 ALABANG COUNTRY CLUB. No. 170287 February 14. petitioner. and NOLASCO CASTUERAS. As to the violence.

Braza. . Braza. Braza. and uncollected loans from the Union funds. Braza. and (h) Inflicting harm or injury to any member or officer of the UNION. (g) Actively campaigning to discourage membership in the UNION. unaccounted expenses and disbursements. and Castueras were expelled from the Union. and assessments. except within the period allowed by law. fees. demanded that the Club dismiss respondents Pizarro. Despite their explanations. and Castueras in view of their expulsion from the Union. The Union. (f) Malversation of union funds. invoking the Security Clause of the CBA.6 Attached to the letters were copies of the Panawagan ng mga Opisyales ng Unyon signed by 37 out of 63 Union members and officers. The Union notified respondents Pizarro. An election was held and a new set of officers was elected. respondents Pizarro. (d) Non-payment of UNION dues. Respondents Pizarro.2 Respondents denied the allegations against them. (b) Resignation from the UNION. (c) Conviction of a crime involving moral turpitude.(a) Failure to join the UNION within five (5) days from the time of regularization. and Castueras challenged their dismissal from the Club in an illegal dismissal complaint filed with the NLRC. (e) Joining another UNION except within the period allowed by law. and Castueras of the audit results and asked them to explain the discrepancies in writing. and a Board of Directors' Resolution7 expelling them from the Union. They discovered some irregularly recorded entries. It was constrained to terminate the employment of said respondents. were furnished individual letters of expulsion for malversation of Union funds.

By preventing member disaffiliation with the threat of expulsion from the union and the consequent termination of employment. Another cause for termination is dismissal from employment due to the enforcement of the union security clause in the CBA. (3) termination due to disease under Art. There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. These requisites constitute just cause for terminating an employee based on the CBA's union security provision. Under the Labor Code. (2) authorized causes under Art.18 Termination of employment by virtue of a union security clause embodied in a CBA is recognized and accepted in our jurisdiction. Here. The CA upheld the NLRC ruling. There is maintenance of membership shop when employees who are union members as of the effective date of the agreement. In terminating the employment of an employee by enforcing the union security clause. On appeal. II of the CBA on Union security contains the provisions on the Union shop and maintenance of membership shop. and (4) termination by the employee or resignation under Art.The Labor Arbiter ruled in favor of the Club. the employer needs only to determine and prove that: (1) the union security clause is applicable. ISSUE: Whether or not the three respondents were illegally dismissed and whether they were afforded due process. 282. 285. HELD: The petition is meritorious. 284.19 This practice strengthens the union and prevents disunity in the bargaining unit within the duration of the CBA. Art. NLRC granted such ruling the dismissal as illegal. and (3) there is sufficient evidence to support the union's decision to expel the employee from the union. 2001 of which you also expressed that you waived your right . 283. must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. (2) the union is requesting for the enforcement of the union security provision in the CBA. an employee may be validly terminated on the following grounds: (1) just causes under Art. the authorized bargaining representative gains more numbers and strengthens its position as against other unions which may want to claim majority representation. or who thereafter become members. After a careful evaluation of the evidence on hand vis-à-vis a thorough assessment of your defenses presented in your letter-explanation dated October 6.

No. We wish to thank you for your services during your employment with the Company. We rule that the Club substantially complied with the due process requirements before it dismissed the three respondents. The Club has determined that you were sufficiently afforded due process under the circumstances. Finally. G.to be present during the administrative investigation conducted by the Union's Board of Directors on October 6. Inasmuch as the Club is duty-bound to comply with its obligation under Section 4(f) of the CBA. as its ruling has no application to this case. the Union is solely liable for the termination from employment of the three respondents. this does not erode the fundamental requirements of due process. 114974 June 16. petitioner. has been mooted by our finding that their dismissal is valid.R.24 The CA and the three respondents err in relying on Malayang Samahan. Management has reached the conclusion that there are overwhelming reasons to consider that you have violated Section 4(f) of the CBA. We explained in Malayang Samahan: x x x Although this Court has ruled that union security clauses embodied in the collective bargaining agreement may be validly enforced and that dismissals pursuant thereto may likewise be valid. it is unfortunate that Management is left with no other recourse but to consider your termination from service effective upon your receipt thereof. 2004 STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE). 2001. particularly on the grounds of malversation of union funds. vs. . The reason behind the enforcement of union security clauses which is the sanctity and inviolability of contracts cannot override one's right to due process. the issue that since there was no bad faith on the part of the Club. It would be more prudent that we just move on independently if only to maintain industrial peace in the workplace.

through Divinagracia. the Bank suffered nominal and actual damages and was forced to litigate and hire the services of the lawyer.11Diokno suggested to Divinagracia that Jose P. Finally. SR. the Bank filed a complaint for Unfair Labor Practice (ULP) and Damages before the NLRC in Manila.8 The Union. The Bank acceded. The Union declared a deadlock25 and filed a Notice of Strike before the National Conciliation and Mediation Board.The Honorable MA. in her capacity as SECRETARY OF LABOR AND EMPLOYMENT. On the other hand.28 . for brevity) is a foreign banking corporation doing business in the Philippines. respondents. Umali requested the Bank to validate the Union’s "guestimates. the Union officers should be dismissed. the President of the National Union of Bank Employees (NUBE). It contended that the Union demanded "sky high economic demands. CONFESOR. the Bank alleged that as a consequence of the illegal act. Considering that the filing of notice of strike was an illegal act...The Bank alleged that the Union violated its duty to bargain. The Bank attached its counter-proposal to the noneconomic provisions proposed by the Union. The exclusive bargaining agent of the rank and file employees of the Bank is the Standard Chartered Bank Employees Union (the Union. for brevity). and the STANDARD CHARTERED BANK. suggested that the bank lawyers should be excluded from the negotiating team. CALLEJO. Umali. be excluded from the Union’s negotiating panel.27 Further. the federation to which the Union was affiliated. NIEVES R. Prior to the expiration of the three-year period2 but within the sixty-day freedom period.: FACTS: Standard Chartered Bank (the Bank. as it did not bargain in good faith. the Union violated its no strikeno lockout clause by filing a notice of strike before the NCMB." especially the figures for the rank and file staff. the Union initiated the negotiations.12 Towards the end of the Bank’s presentation." indicative of blue-sky bargaining. J. The Bank and the Union signed a five-year CBA with a provision to renegotiate the terms thereof on the third year. Jr.

41 ART. shall have the right to self-organization and to form. and refusal to furnish the Union with copies of the relevant data. HELD: The petition is bereft of merit. explaining that both parties failed to substantiate their claims.Then Secretary of Labor and Employment (SOLE) issued an Order assuming jurisdiction over the labor dispute at the Bank. – All persons employed in commercial. surface bargaining. xxx The SOLE dismissed the charges of ULP of both the Union and the Bank.32s Hence. charitable. WHEREFORE. The Bank and the Union signed the CBA. this present petition. Ltd. Insular Life Assurance Co. Ltd. Employees Association – NATU vs. medical or educational institutions whether operating for profit or not.39 wherein this Court said that the test of whether an employer has interfered with and coerced employees in the exercise of their right to self-organization within the meaning of subsection (a)(1) is whether the employer has engaged in conduct which it may reasonably be said. "Interference" under Article 248 (a) of the Labor Code The Union further cited the case of Insular Life Assurance Co. COVERAGE AND EMPLOYEES’ RIGHT TO SELFORGANIZATION. it is not necessary that there be direct evidence that any employee was in fact intimidated or coerced by statements of threats of the employer if there is a reasonable inference that anti-union conduct of the employer does have an adverse effect on selforganization and collective bargaining.40 Further.. or assist labor . ISSUE: Whether or not the Union was able to substantiate its claim of unfair labor practice against the Bank arising from the latter’s alleged "interference" with its choice of negotiator. tends to interfere with the free exercise of employees’ rights under Section 3 of the Act.. join. industrial and agricultural enterprises and in religious. the Standard Chartered Bank and the Standard Chartered Bank Employees Union – NUBE are hereby ordered to execute a collective bargaining agreement incorporating the dispositions contained herein. making bad faith non-economic proposals. 243.

especially considering that such was undertaken previous to the commencement of the negotiation and simultaneously with Divinagracia’s suggestion that the bank lawyers be excluded from its negotiating panel. The Duty to Bargain Collectively Surface bargaining is defined as "going through the motions of negotiating" without any legal intent to reach an agreement. and Articles 248 and 249 respecting ULP of employers and labor organizations. It happened after the parties started to involve personalities. selfemployed people.organizations of their own choosing for purposes of collective bargaining. The circumstances that occurred during the negotiation do not show that the suggestion made by Diokno to Divinagracia is an anti-union conduct from which it can be inferred that the Bank consciously adopted such act to yield adverse effects on the free exercise of the right to self-organization and collective bargaining of the employees. It is clear that such ULP charge was merely an afterthought. ULP under Article 248(a) in connection with Article 243 of the Labor Code is committed. considers it an unfair labor practice when an employer interferes. Ambulant. restrains or coerces employees in the exercise of their right to self-organization or the right to form association. if an employer interferes in the selection of its negotiators or coerces the Union to exclude from its panel of negotiators a representative of the Union. Article 248(a) of the Labor Code. The accusation occurred after the arguments and differences over the economic provisions became heated and the parties had become frustrated. Parenthetically.50 The resolution of surface . rural workers and those without any definite employers may form labor organizations for their mutual aid and protection. intermittent and itinerant workers. The right to selforganization necessarily includes the right to collective bargaining. and if it can be inferred that the employer adopted the said act to yield adverse effects on the free exercise to right to self-organization or on the right to collective bargaining of the employees.

"53 Hence. The records show that the Bank’s counterproposals on the non-economic provisions or political provisions did not put "up for grabs" the entire work of the Union and its predecessors. The determination of whether a party has engaged in unlawful surface bargaining is usually a difficult one because it involves. However.51 It involves the question of whether an employer’s conduct demonstrates an unwillingness to bargain in good faith or is merely hard bargaining. The minutes of the meeting show that the Union based its economic proposals on data of rank and file employees and the prevailing economic benefits received by bank employees from other foreign banks doing business in the Philippines and other branches of the Bank in the Asian region. a question of the intent of the party in question. the parties were not able to agree and reached a deadlock.bargaining allegations never presents an easy issue. The Union Did Not Engage In Blue-Sky Bargaining We. and usually such intent can only be inferred from the totality of the challenged party’s conduct both at and away from the bargaining table. which tend to show that it did not want to reach an agreement with the Union or to settle the differences between it and the Union. In view of the finding of lack of ULP based on Article 248(g).59 The Bank failed to show that the economic demands made by the Union were exaggerated or unreasonable. . at bottom. Admittedly. the accusation that the Bank made bad-faith provisions has no leg to stand on. it is herein emphasized that the duty to bargain "does not compel either party to agree to a proposal or require the making of a concession. both at and away from the bargaining table. the parties’ failure to agree did not amount to ULP under Article 248(g) for violation of the duty to bargain. likewise. do not agree that the Union is guilty of ULP for engaging in blue-sky bargaining or making exaggerated or unreasonable proposals.52 The Union has not been able to show that the Bank had done acts.

1989. Rito Mangubat and Victor Lastimoso. on the ground of incompetence. • On January 13. for brevity). GMC had received collective and individual letters from workers who stated that they had withdrawn from their union membership. it would expire on November 30. The letter stated that it felt there was no basis to negotiate with a union which no longer existed. GENERAL MILLING CORPORATION INDEPENDENT LABOR UNION (GMC-ILU). GMC wrote a letter to the union’s officers. a union member. the union officers wrote a letter dated December 19. 1991 disclaiming any massive disaffiliation or resignation from the union and submitted a manifesto. • On December 16. 1991. No. the union sent GMC a proposed CBA. petitioner. 1992. vs HON. Hence. 1991. respondents. but that management was nonetheless always willing to dialogue with them on matters of common concern and was open to suggestions on how the company may improve its operations. The CBA was effective for three years retroactive to December 1. facts • In its two plants located at Cebu City and Lapu-Lapu City. petitioner General Milling Corporation (GMC) employed 190 workers. • In answer. a day before the expiration of the CBA. GMC and the union concluded a collective bargaining agreement (CBA) which included the issue of representation effective for a term of three years. Believing that the union no longer had standing to negotiate a CBA. COURT OF APPEALS. They were all members of private respondent General Milling Corporation Independent Labor Union (union. • As early as October 1991. signed by its members. 1991.G. • On November 29. The union protested and requested GMC to . GMC dismissed Marcia Tumbiga. and RITO MANGUBAT. on grounds of religious affiliation and personal differences. 2004 GENERAL MILLING CORPORATION. with a request that a counter-proposal be submitted within ten (10) days. 146728 February 11. 1988. however. • On April 28.R. GMC did not send any counter-proposal. stating that they had not withdrawn from the union. a duly certified bargaining agent.

a complaint against GMC with the NLRC. Thus. the NLRC also found GMC guilty of unfair labor practice for interfering with the right of its employees to self-organization. as amended by Rep. • The union appealed to the NLRC. the date when the original CBA ended. Act No. The NLRC also ordered GMC to pay the attorney’s fees. For failure of the union to attach the required copies of pleadings and other documents and material portions of the record to support the allegations in its petition. the NLRC ordered GMC to abide by the CBA draft that the union proposed for a period of two (2) years beginning December 1.4 which fixed the terms of a collective bargaining agreement. Thus. 1998." • Thus. It found GMC’s doubts as to the status of the union justified and the allegation of coercion exerted by GMC on the union’s members to resign unfounded. advised the union to "refer to our letter dated December 16. to November 30. 1998. and (3) discrimination. insofar as the representation aspect is concerned. 1992. The labor arbiter dismissed the case with the recommendation that a petition for certification election be held to determine if the union still enjoyed the support of the workers. on July 2. however. 1993. 1988 to November 30. 1993. 1991. (2) interference with the right to self-organization.submit the matter to the grievance procedure provided in the CBA. it was unfair labor practice for GMC not to enter into negotiation with the union. the duration of a CBA. Act No. the NLRC set aside its decision of January 30. All other provisions of the CBA are to be renegotiated not later than three (3) years after its execution. 6715. 1999. • The NLRC likewise held that the individual letters of withdrawal from the union submitted by 13 of its members from February to June 1993 confirmed the pressure exerted by GMC on its employees to resign from the union. the NLRC pointed out that upon the effectivity of Rep. Citing Article 253-A of the Labor Code. The complaint alleged unfair labor practice on the part of GMC for: (1) refusal to bargain collectively. • On January 30. through a resolution dated October 6. the NLRC set aside the labor arbiter’s decision. Consequently. GMC. is five (5) years which. 6715. Hence. Arbitration Division. 1991. the CA dismissed the petition on February 9. the union filed a petition for certiorari before the Court of Appeals. Cebu City. 1998. the NLRC held that respondent union remained as the exclusive bargaining agent with the right to renegotiate the economic provisions of the CBA. in the case of GMC-Independent Labor Union was from December 1. • On GMC’s motion for reconsideration. . the union filed. • In its decision.

. HELD: 1)yes. it was still the certified collective bargaining agent of the workers. Terms of a collective bargaining agreement. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such five year term of the Collective Bargaining Agreement. For refusing to send a counter-proposal to the union and to bargain anew on the economic terms of the CBA. albeit just before the last day of said period. 1991. 1998 is. It was obvious that GMC had no valid reason to refuse to negotiate in good faith with the union. Article 253-A of the Labor Code. the CA denied it for lack of merit. The relation between labor and management should be undisturbed until the last 60 days of the fifth year. ISSUES: (1) won GMC was guilty of unfair labor practice for violating the duty to bargain collectively and/or interfering with the right of its employees to selforganization. The NLRC Resolution of October 6. 1988. 6715. the appellate court granting the petition. and (2) won ca committed grave abuse of discretion in imposing upon GMC the draft CBA proposed by the union for two years to begin from the expiration of the original draft.• On July 19. because it was seeking said renegotiation within five (5) years from the date of effectivity of the CBA on December 1.. 1998 is hereby SET ASIDE. REINSTATED. 2000. 2000. The law mandates that the representation provision of a CBA should last for five years. Act No.. The union’s proposal was also submitted within the prescribed 3-year period from the date of effectivity of the CBA. and its decision of January 30. it is indisputable that when the union requested for a renegotiation of the economic terms of the CBA on November 29. Hence. as amended by Rep. All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. • A motion for reconsideration was seasonably filed by GMC. except with respect to the award of attorney’s fees which is hereby deleted. insofar as the representation aspect is concerned. the company committed . be for a term of five (5) years. states: ART. but in a resolution dated October 26. 253-A. – Any Collective Bargaining Agreement that the parties may enter into shall.

252. it shall serve a written notice upon the other party with a statement of its proposals.) We hold that GMC’s refusal to make a counter-proposal to the union’s proposal for CBA negotiation is an indication of its bad faith. Thus: ART. There is no per se test of good faith in bargaining. The effect of an employer’s or a union’s actions individually is not the test of good-faith bargaining. considered as a whole. GMC violated its duty to bargain collectively. Meaning of duty to bargain collectively. Unfair labor practices of employers. – The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice. – It shall be unlawful for an employer to commit any of the following unfair labor practice: (g) To violate the duty to bargain collectively as prescribed by this Code..an unfair labor practice under Article 248 of the Labor Code. (Under scoring supplied.. Article 252 of the Labor Code elucidates the meaning of the phrase "duty to bargain collectively. but the impact of all such occasions or actions. making it liable for ." thus: ART. Procedure in collective bargaining. We have held that the crucial question whether or not a party has met his statutory duty to bargain in good faith typically turn$ on the facts of the individual case.Good faith or bad faith is an inference to be drawn from the facts. – The following procedures shall be observed in collective bargaining: (a) When a party desires to negotiate an agreement. which provides that: ART. 250. Failing to comply with the mandatory obligation to submit a reply to the union’s proposals.. It bears stressing that the procedure in collective bargaining prescribed by the Code is mandatory because of the basic interest of the state in ensuring lasting industrial peace. 248.

when one of the parties abuses this grace period by purposely delaying the bargaining process. Duty to bargain collectively when there exists a collective bargaining agreement.unfair labor practice. 253. its provision shall continue to govern the relationship between the parties. (Underscoring supplied. a departure from the general rule is warranted.. under the circumstances. Perforce. The Code provides: ART. – . It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period [prior to its expiration date] and/or until a new agreement is reached by the parties. The general rule is that when a CBA already exists.) The provision mandates the parties to keep the status quo while they are still in the process of working out their respective proposal and counter proposal. However. Did GMC interfere with the employees’ right to self-organization? The CA found that the letters between February to June 1993 by 13 union members signifying their resignation from the union clearly indicated that GMC exerted pressure on its employees.. We are not inclined to gratify GMC with an extended term of the old CBA after it resorted to . (2)no. That is. the Court of Appeals did not commit grave abuse of discretion amounting to lack or excess of jurisdiction in finding that GMC is. We agree with the CA’s conclusion that the ill-timed letters of resignation from the union members indicate that GMC had interfered with the right of its employees to self-organization. we hold that the appellate court did not commit grave abuse of discretion in finding GMC guilty of unfair labor practice for interfering with the right of its employees to self-organization. guilty of unfair labor practice. The records show that GMC presented these letters to prove that the union no longer enjoyed the support of the workers.. The rule necessarily presupposes that all other things are equal. The fact that the resignations of the union members occurred during the pendency of the case before the labor arbiter shows GMC’s desperate attempts to cast doubt on the legitimate status of the union. that neither party is guilty of bad faith. it would be unfair to the union and its members if the terms and conditions contained in the old CBA would continue to be imposed on GMC’s employees for the remaining two (2) years of the CBA’s duration. until a new one is agreed upon. Thus.

petitioners.delaying tactics to prevent negotiations. the records is replete with complainants' persistence and dogged determination in going back to work. 2003 HACIENDA FATIMA and/or PATRICIO VILLEGAS. 149440 January 28. 'b) The management will give priority to the women workers who are members of the union in case work relative . vs. the workers including complainants herein were not given work for more than one month. ALFONSO VILLEGAS and CRISTINE SEGURA. In protest. J. refused to sit down with the union for the purpose of entering into a collective bargaining agreement.R. • Moreover. G. will be given back his normal work load which is six (6) days in a week. it had lost its statutory right to negotiate or renegotiate the terms and conditions of the draft CBA proposed by the union. NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL TRADE. when complainant union was certified as the collective bargaining representative in the certification elections.: FACTS: • The complainants [herein respondents] refused to work and/or were choosy in the kind of jobs they wanted to perform. . 'c) Ariston Eruela Jr. No. or amount[ing] to gahit and [dipol] arises. 'd) The management will provide fifteen (15) wagons for the workers and that existing workforce prior to the actual strike will be given priority. Since it was GMC which violated the duty to bargain collectively. it would appear that respondents did not look with favor workers' having organized themselves into a union. PANGANIBAN. based on Kiok Loy and Divine Word University of Tacloban. complainants staged a strike which was however settled upon the signing of a Memorandum of Agreement which stipulated among others that: 'a) The parties will initially meet for CBA negotiations on the 11th day of January 1991 and will endeavor to conclude the same within thirty (30) days. respondents under the pretext that the result was on appeal. Thus. . . respondents. • "Indeed.

Any infringement upon this right was deemed by the CA to be tantamount to illegal dismissal. • CA RULING:The CA affirmed that while the work of respondents was seasonal in nature.nAriston Eruela Sr. and 'f) The union will immediately lift the picket upon signing of this agreement. But due to the conciliation efforts by the DOLE. Ricardo Dagle. • starting September 1991. The CA likewise concurred with the NLRC's finding that petitioners were guilty of unfair labor practice.However. another Memorandum of Agreement was signed by the complainants and respondents which provides: '1. 4. Rico Dagle. the workers enjoyed security of tenure.xxxx • Pursuant thereto. Jesus Silva. That the list of the names of affected union members hereto attached and made part of this agreement shall be referred to the Hacienda payroll of 1990 and determine whether or not this concerned Union members are hacienda workers. Instead. Boboy Silva. ISSUES: (1) won repondents are regular employees . in case the said workforce would not be enough. Luisa Rombo 2. complainants filed the present complaint. Alejandro Tejares. Martin Alas-as Jr. 'The name Orencio Rombo shall be verified in the 1990 payroll. Cresensio Abrega.' • alleging that complainants failed to load the fifteen wagons. numbering about eighteen (18) workers[. Bobong Abrega. Ariston Eruela Jr. Moreover. Gaudioso Rombo.' • "When respondents again reneged on its commitment. they were considered to be merely on leave during the off-season and were therefore still employed by petitioners.] to work in the hacienda. the parties subsequently met and the Minutes of the Conciliation Meeting showed as follows:The following are deemed not considered employees: 1... respondents did not any more give work assignments to the complainants forcing the union to stage a strike on January 2. 1992. respondents reneged on its commitment to sit down and bargain collectively. respondent employed all means including the use of private armed guards to prevent the organizers from entering the premises.Ramona Rombo. the management can hire additional workers to supplement them.3. The following employees shall be reinstated immediately upon availability of work:Jose Dagle. Ernesto Tejares. e) The management will not anymore allow the scabs. Fernando Silva.

in which this Court held: "The primary standard. but not of the second. Evidently. as amended. it is not enough that they perform work or services that are seasonal in nature. any employee who has rendered at least one year of service. therefore. except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. National Labor Relations Commission. — The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. The connection can be determined by considering . an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. states:Regular and Casual Employment. In Abasolo v. "An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided. whether such service is continuous or broken. That. of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. the general rule of regular employment is applicable.(2) won petitioner is guilty of ULP HELD: 1. NLRC. They must have also been employed only for the duration of one season.the Court issued this clarification: "[T]he test of whether or not an employee is a regular employee has been laid down in De Leon v. condition. Bobong Abriga and Boboy Silva — repeatedly worked as sugarcane workers for petitioners for several years is not denied by the latter. The test is whether the former is usually necessary or desirable in the usual trade or business of the employer. Ramona Rombo. petitioners employed respondents for more than one season. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exist. The evidence proves the existence of the first. Article 280 of the Labor Code. Therefore. The fact that respondents — with the exception of Luisa Rombo." (Italics supplied) For respondents to be excluded from those classified as regular employees.

and the dismissal of union officials and members. to their acts of economic inducements resulting in the promotion of those who withdrew from the union. John’s Academy. 167892 October 27. the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. the Court is not dutybound to delve into the accuracy of their factual findings. ST. Also if the employee has been performing the job for at least a year. the Academy offered a secondary course only. owns and operates St. but only with respect to such activity and while such activity exists. factual findings of labor officials. FACTS: Petitioner. Hence." We uphold the CA's affirmation of the above findings. The CBA between SJCI and the Union was set to expire on May 31. SJCI. even if the performance is not continuous and merely intermittent. 2006 YNARES-SANTIAGO. 1997. in the absence of a clear showing that these were arbitrary and bereft of any rational basis. It ruled as follows: "Indeed. G. Their findings are binding on the Supreme Court. especially when supported by substantial evidence. This resulted to a bargaining deadlock which . the use of armed guards to prevent the organizers to come in. INC. The high school then employed about 80 teaching and non-teaching personnel who were members of the Union..the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Prior to 1998. who are deemed to have acquired expertise in matters within their respective jurisdictions.R. respondent. Indeed. Consequently. JOHN ACADEMY FACULTY AND EMPLOYEES UNION. J. petitioner vs. one cannot but conclude that respondents did not want a union in their hacienda—a clear interference in the right of the workers to self-organization. Verily. JOHN COLLEGES. their conclusions are accorded great weight upon appeal. (2)The NLRC also found herein petitioners guilty of unfair labor practice. SJCI rejected all the proposals of the Union for an increase in worker’s benefits. from respondents' refusal to bargain. are generally accorded not only respect but even finality. No. During the negotiations. the employment is considered regular." ST.

1999. the 25 employees filed a complaint for ULP. students and the Union of the impending closure of the high school which took effect on March 31. illegal dismissal and non-payment of monetary benefits against SJCI before the NLRC. that no retaliatory action shall be undertaken by either party against each other in relation to the strike. through the efforts of the NCMB. 1998. 1998. Labor Arbiter dismissed the Union’s complaint for ULP and illegal dismissal while granting SJCI’s petition to declare the strike illegal coupled with a declaration of loss of employment status of the 25 Union members involved in the strike. The two cases were then consolidated. DECS. 1998 praying that SJCI be enjoined from closing the high school. on November 27. SJCI and the Union. remove all obstruction and return to work. the Union filed a manifestation to maintain the status quo on March 30. 1998. Pending resolution of the labor dispute before the SOLE. On May 19. the Board of Directors of SJCI approved on February 22. In order to end the strike. parents. The Union members alleged that the closure of the high school was done in bad faith in order to get rid of the Union and render useless any decision of the SOLE on the CBA deadlocked issues. of Labor and Employment (SOLE) for assumption of jurisdiction where the parties agree to submit their position paper. agreed to refer the labor dispute to the Sec.” SJCI informed the DOLE.led to the holding of a valid strike by the Union on November 10. 1998. 1997. 1998. On January 8. that the union shall lift the picket immediately. The reason being “the irreconcilable differences between the school management and the Academy’s Union particularly the safety of our students and the financial aspect of the ongoing CBA negotiations. On April 2. the 25 employees conducted a protest action within the perimeter of the high school. The Union filed a notice of strike with the NCMB only on May 7. It claimed that the decision of SJCI to close violated the SOLE’s assumption order and the agreement of the parties not to . On May 4. 1997. that management shall grant the employees cash advance. 51 employees had received their separation compensation package while 25 employees refused to accept the same. The strike ended and classes resumed. SJCI filed a petition to declare the strike illegal before the NLRC since it was in violation of the procedural requirements under the Labor Code. 1998 a resolution recommending the closure of the high school which was approved by the stockholders on even date. On May 21. In the proceedings before the SOLE. 1998. SJCI informed the DOLE that as of March 31. 1998.

1998. 2002. and (2) the timing of. and (4) cessation of the operation must be bona fide. by then. it did not restore the high school teaching and non-teaching employees it earlier terminated. On appeal. the following requisites must concur for a valid closure of the business: (1) serving a written notice on the workers. The two decisive factors in determining whether SJCI acted in bad faith are (1) the timing of. whether SJCI closed the high school in good faith. and illegal strike cases which were then pending appeal before the NLRC. It ordered the consolidation of the CBA deadlock case with the ULP. On July 23. Upon receipt of the Labor Arbiter’s decision in the aforesaid consolidated cases. 1999. HELD: Under Art. the Court of Appeals affirmed with modification the decision of the NLRC. However. and reasons for the closure of the high school. (2) serving a notice with the DOLE. ISSUE: Whether petitioner is liable for ULP and illegal dismissal when it closed down the high school on March 31. On June 28. SJCI resolved to reopen the high school for school year 1999-2000. (3) payment of separation pay. revolves around the fourth requisite. and with full backwages. After the favorable decision of the Labor Arbiter.take any retaliatory action against the other.e. SJCI filed a second motion to dismiss on February 1. 1998 claiming that the closure of the high school rendered the CBA deadlocked issues moot. SJCI filed a motion to dismiss with entry of appearance on October 14. It found SJCI guilty of ULP and illegal dismissal and ordered it to reinstate the 25 employees to their former positions without loss of seniority rights and other benefits. the SOLE denied SJCI’s motions to dismiss and certified the CBA deadlock case to the NLRC. the employer-employee relationship had already been terminated due to the closure of the high school. That same school year SJCI opened an elementary and college department. 1998 could not be considered as a strike since. Moreover.. i. The instant case. 1999 arguing that the case had already been resolved. it ruled that the mass actions conducted by the 25 employees on May 4. It is not disputed that the first two requisites were satisfied. The third requisite would have been satisfied were it not for the refusal of the herein private respondents to accept the separation compensation package. illegal dismissal. . the NLRC rendered judgment reversing the decision of the Labor Arbiter. 283 of the Labor Code.

even assuming that the Union’s demands were illegal or excessive. ultimately. These alleged difficult labor problems are normal in any business establishment. 6728 or the "Government Assistance to Students and Teachers in Private Education Act. the financial aspect of the ongoing CBA negotiations. SJCI’s remedy under the law is to refer the matter for voluntary or compulsory dispute resolution. Also." which led SJCI to refuse hence the holding of a strike on November 10. SJCI in effect admitted that it wanted to end the bargaining deadlock and eliminate the problem of dealing with the demands of the Union. and to circumvent the Union’s right to collective bargaining and its members’ right to security of tenure. There is no basis.” in violation of R. however. therefore. SJCI failed to establish how and why these demands were in excess of the limitation set by R.A. It is not difficult to discern that the closure was done to defeat the parties’ agreement to refer the labor dispute to the SOLE. 6728.A. 1998. establish SJCI’s good faith. Neither party is obliged to give-in to the other’s excessive or unreasonable demands during collective bargaining. in any way. to hold that the Union ever made illegal or excessive demands. specifically. and the remedy in such case is to refer the dispute to the proper tribunal for resolution. the reopening of the high school department by SJCI after only one year from its closure. SJCI pre-empted the resolution of the dispute by closing the . specifically. By admitting that the closure was due to irreconcilable differences between the Union and school management. the Union’s illegal demands of entitlement “to the unimplemented 20% tuition fee increase. the important and crucial point is that these alleged illegal or excessive demands did not justify the closure of the high school and do not. to unilaterally end the bargaining deadlock. This incident could hardly establish the good faith of SJCI or justify the high school’s closure in 1998. At any rate. to render nugatory any decision of the SOLE. This is precisely what the Labor Code abhors and punishes as unfair labor practice since the net effect is to defeat the Union’s right to collective bargaining. and. SJCI contends that it was forced to close down the high school due to alleged difficult labor problems that it encountered while dealing with the Union since 1995. This was what SJCI and the Union did when they referred the 1997 CBA bargaining deadlock to the SOLE. The employer cannot unilaterally close its establishment on the pretext that the demands of its employees are excessive.and the reasons for the subsequent opening of a college and elementary department.

If found guilty. the petitioner itself said that the closing down of the school was.e. Second. it did not rehire the Union members. There is insufficient evidence to hold that the safety and well-being of the students were endangered and/or compromised. and that the Union was responsible therefor. aside from the remedy of submitting the dispute for voluntary or compulsory arbitration. SJCI disregarded the whole dispute resolution mechanism and undermined the Union’s right to collective bargaining when it closed down the high school while the dispute was still pending with the SOLE. SJCI opened a college and elementary department. Instead. this translates into an admission that the cessation of business was neither due to any patrician nor noble objective of protecting the studentry but because the administration no longer wished to deal with respondent Union. Finally. i. The fact that after one year from the time it closed its high school. As correctly observed by the CA.high school. the parents were vehemently opposed to the closure of the school because there was no basis to claim that the students’ safety was at risk. that its former students and their parents allegedly clamored for the reopening of the high school. Moreover. and reopened its high school department showed that it never intended to cease operating as an educational institution. but not the closure of the establishment resulting to the permanent loss of employment of the whole workforce. "because of irreconcilable differences between the school management and the Academy’s Union. the employer may file a complaint for ULP against the Union for bargaining in bad faith. The Labor Code does not authorize the employer to close down the establishment on the ground of illegal or excessive demands of the Union. Evidently. these circumstances lead to the inescapable conclusion that SJCI merely used the alleged safety and well-being of the students as a subterfuge to justify its actions. Even assuming arguendo that the students’ safety and well-being were jeopardized by the said protest actions.. there is evidence on record contesting the alleged reason of SJCI for reopening the high school. ." Indeed. The employer carries the burden of proof to establish that the closure of the business was done in good faith. the alleged threat to the students’ safety and well-being had long ceased by the time the high school was closed. when SJCI reopened its high school. this gives rise to civil and criminal liabilities and allows the employer to implement a lock out. Taken together.

represented by its President. In its June 2. CABEU-NFL sent CAB a proposed CBA seeking increases in the daily wage. represented by its President. 1998. CABEU-NFL is a duly registered labor union and a certified bargaining agent of the CAB rank-and-file employees. 2010 MENDOZA.R. CAB replied through its June 14. that is. CAB responded with a counter-proposal. however. On May 21. to get rid of the Union members. the Union already lost its majority status by reason of the disauthorization and withdrawal of support thereto by more than 90% of the rank and file employees in the bargaining unit of Central sometime in . Clearly. represented by its President. CENTRAL AZUCARERA DE BAIS EMPLOYEES UNION-NFL [CABEUNFL]. and leave benefits. Thus. 2004. We agree with the findings of the NLRC and CA that the protest actions of the Union cannot be considered a strike because.the closure had achieved its purpose. 2005 Letter to NCMB Regional Director that: Saguran is no longer an employee of the Central for he was one of those lawfully terminated due to an authorized cause. CENTRAL AZUCARERA DE BAIS. by then. maintained its position on the matter. the collective bargaining negotiations resulted in a deadlock. CAB. ANTONIO STEVEN L. CHAN. On January 19. the employeremployee relationship has long ceased to exist because of the previous closure of the high school on March 31. J. CAB received an Amended Union Proposal sent by CABEU-NFL reducing its previous demand regarding wages and bonuses. 2004. 186605 November 17. On March 27. PABLITO SAGURAN. CABEU-NFL filed a Notice of Strike with the NCMB which then assumed conciliatory-mediation jurisdiction and summoned the parties to conciliation conferences. FACTS: Respondent CAB is a corporation represented by its President. 2004. 2005 Letter sent to CAB. [CAB]. Saguran. CABEU-NFL requested copies of CAB’s annual financial statements from 2001 to 2004 and asked for the resumption of conciliation meetings. bonus. these pieces of evidence show that the high school’s closure was done in bad faith. SJCI is liable for ULP and illegal dismissal. INC. Respondent G. No. Petitioner vs. Chan.

With respect to respondent’s observation that the request for conciliation meeting was signed by one who is not eligible and authorized to represent any union with the company since he is no longer an employee. Unfortunately. and the workers themselves organized themselves into a new Union known as CABELA and had concluded a new collective bargaining agreement with the Central on April 21. It was incumbent upon the NCMB to make a ruling and if it chose not to pursue further negotiation. both exercises resulted in a deadlock. We do not agree that CAB committed an unfair labor practice act in questioning the capacity of Saguran to represent. it refused to resume negotiation with complainant upon the latter’s demand. It appears that the NCMB failed to act on the letter-response of CAB. CAB replied to the complainant Union’s CBA proposals with its own set of counterproposals. On July 13.” On appeal. Its status as such was determined in a certification election conducted by the DOLE. there was no reason for respondent to deal and negotiate with CABELA since the latter does not have such status of majority representation. 2005 in Dumaguete City. suffice it to state that at the time the request was . The conciliation/mediation by the NCMB has not been officially concluded. Therefore. As such. CAB should not be faulted therefor. in writing the NCMB Director stating its legal position on complainant’s request that further conciliation will serve no lawful and practical purpose. The aforesaid CBA had been duly ratified by the rank and file workers constituting 91% of the collective bargaining unit.January. Neither did it convene CAB and CABEU-NFL to continue the negotiations between them. the NLRC reversed the LA’s decision and found CAB guilty of unfair labor practice. the request for further conciliation conference will serve no lawful and practical purpose. LA provided that: “It cannot be said that respondent CAB refused to negotiate or that it violated its duty to bargain collectively in light of its active participation in the past CBA negotiations at the plant level as well as in the NCMB. thus we find the instant complaint for unfair labor practice not only without merit but also premature. 2006. Reacting from the letter-response of CAB. The NLRC explained: “It is undeniable that complainant is the certified collective bargaining agent of the regular workers and seasonal employees of respondent. the LA dismissed the complaint. CABEU-NFL filed a Complaint for ULP for the former’s refusal to bargain with it. respondent violated its duty to bargain with complainant when during the pendency of the conciliation proceedings before the NCMB it concluded a CBA with another union as a consequence. Based on this premise. 2005.

wounded .made. CAB was not scuttling the ongoing negotiations towards a new collective bargaining agreement. CAB elevated the matter to the CA by way of a petition for certiorari. That the negotiations did not push through was not the result of CAB management’s intransigence because there was none – at least so far as the case record confirms. of course. ISSUE: Whether or not CAB committed unfair labor practice. are inimical to the legitimate interests of both labor and management. disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations. The concept of unfair labor practice is provided in Article 247 of the Labor Code which states: Unfair labor practices violate the constitutional right of workers and employees to self-organization.” CAB moved for a reconsideration but the motion was denied by the NLRC. including their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect.––It shall be unlawful for an employer to commit any of the following unfair labor practice: (g) To violate the duty to bargain collectively as prescribed by this Code.” CABEU-NFL moved for a reconsideration but its motion was denied. such employee has questioned the validity of his dismissal with then NLRC. Respondent’s failure to act on the request of the complainant to resume negotiation for no valid reason constitutes unfair labor practice. CA found CAB’s petition meritorious and reversed the NLRC decision and resolution. that social humiliation. good customs. and. or was oppressive to labor. or fraud. It must be shown that CAB was motivated by ill will. "bad faith. It was simply propounding a position to the NCMB for the latter to rule on. or public policy. The Labor Code enumerates the acts constituting unfair labor practices of the employer. thus: Article 248. or done in a manner contrary to morals. HELD: No. Unfair Labor Practices of Employers. The CA pointed out: “CABEU-NFL failed in its burden of proof to present substantial evidence to support the allegation of unfair labor practice. There is nothing that establishes petitioner’s predetermined resolve not to budge from an initial position – perhaps stubbornness of some ambiguous sort but not the absence of good faith to pursue collective bargaining.

basic is the principle that good faith is presumed and he who alleges bad faith has the duty to prove the same. namely. Petition is denied. BAYER PHILIPPINES.feelings or grave anxiety resulted " in suspending negotiations with CABEUNFL. CABEU-NFL has the burden of proof to present substantial evidence to support the allegation of unfair labor practice. AVELINA REMIGIO AND ANASTACIA VILLAREAL. Furthermore.R. DIETER J. LONISHEN (President). It just wanted to foster industrial peace by bowing to the wishes of the overwhelming majority of its rank and file workers and by negotiating and concluding in good faith a CBA with CABELA. the evil sought to be punished in cases of unfair labor practices. Respondents. CABEU-NFL refers only to the circumstances mentioned in the letterresponse. No." Such actions of CAB are nowhere tantamount to anti-unionism. to conclude that bad faith attended CAB’s actions. By imputing bad faith to the actuations of CAB. G. vs. CAB believed that CABEU-NFL was no longer the representative of the workers. FACUNDO. It failed to substantiate its claim of unfair labor practice to rebut the presumption of good faith. As correctly determined by the LA. in his capacity as President. 2010 EMPLOYEES UNION OF BAYER PHILS. INC. FFW and JUANITO S. Petitioners... the filing of the complaint for unfair labor practice was premature inasmuch as the issue of collective bargaining is still pending before the NCMB. ASUNCION AMISTOSO (HRD Manager). . 162943 December 6. the execution of the supposed CBA between CAB and CABELA and the request to suspend the negotiations.

7 The said resolution was signed by 147 of the 257 local union members. negotiated with Bayer for the signing of a collective bargaining agreement (CBA).8 A tug-of-war then ensued between the two rival groups. A subsequent resolution was also issued affirming the first resolution. and (5) authorize REUBP to administer the CBA between EUBP and Bayer. the DOLE Secretary issued an arbitral award ordering EUBP and Bayer to execute a CBA retroactive to January 1. (2) rename the union as Reformed Employees Union of Bayer Philippines (REUBP). (4) abolish all existing officer positions in the union and elect a new set of interim officers. EUBP.FACTS: Union of Bayer Philippines3 (EUBP) is the exclusive bargaining agent of all rank-and-file employees of Bayer Philippines (Bayer). 2001. prompting the Secretary of the Department of Labor and Employment (DOLE) to assume jurisdiction over the dispute. accepted Bayer’s wage-increase proposal. (3) adopt a new constitution and by-laws for the union. pending the resolution of the dispute. During the negotiations. EUBP rejected Bayer’s 9. EUBP staged a strike. Facundo (Facundo). with both seeking recognition from Bayer and demanding remittance of the union dues collected . respondent Avelina Remigio (Remigio) and 27 other union members. headed by its president Juanito S. Subsequently. 1997 and to be made effective until December 31.9% wage-increase proposal resulting in a bargaining deadlock. without any authority from their union leaders. EUBP’s grievance committee questioned Remigio’s action and reprimanded Remigio and her allies. the rift between Facundo’s leadership and Remigio’s group broadened. and is an affiliate of the Federation of Free Workers (FFW). The said CBA4 was registered. Remigio solicited signatures from union members in support of a resolution containing the decision of the signatories to: (1) disaffiliate from FFW.

from its rank-and-file members. Bayer responded by deciding not to deal with either of the two groups. while the first ULP case was still pending and despite EUBP’s repeated request for a grievance conference. EUBP lodged a complaint18 against Remigio’s group before the Industrial Relations Division of the DOLE praying for their expulsion from EUBP for commission of "acts that threaten the life of the union. the latter opted to negotiate instead with Remigio’s group.22 petitioners filed a second ULP complaint against herein respondents.24 They also alleged that notwithstanding the requests sent to Bayer for a renegotiation of the last two years of the 1997-2001 CBA between EUBP and Bayer.26 . Bayer decided to turn over the collected union dues amounting to P254.19 The Arbiter explained that the root cause for Bayer’s failure to remit the collected union dues can be traced to the intra-union conflict between EUBP and Remigio’s group20 and that the charges imputed against Bayer should have been submitted instead to voluntary arbitration." Labor Arbiter Jovencio Ll.25 REUBP and Bayer agreed to sign a new CBA. gross violation of the CBA and violation of their duty to bargain. dismissed the first ULP complaint for lack of jurisdiction. and by placing the union dues collected in a trust account until the conflict between the two groups is resolved. Jr. Remigio immediately informed her allies of the management’s decision.15 to respondent Anastacia Villareal.21 EUBP did not appeal the said decision. Mayor.857. Treasurer of REUBP.23 Petitioners complained that Bayer refused to remit the collected union dues to EUBP despite several demands sent to the management. charging the respondents with unfair labor practice committed by organizing a company union.12 EUBP filed a complaint for unfair labor practice (first ULP complaint) against Bayer for non-remittance of union dues.

petitioners immediately filed an urgent motion for the issuance of a restraining order/injunction27 before the National Labor Relations Commission (NLRC) and the Labor Arbiter against respondents. The said CBA was eventually ratified by majority of the bargaining unit. over which the said Commission has no jurisdiction.29 EUBP seasonably appealed the said decision to the Bureau of Labor Relations (BLR). Gan dismissed EUBP’s second ULP complaint for lack of jurisdiction.In response. this Office is bereft of any jurisdiction pursuant to Article 226 of the Labor Code. Later. the NLRC resolved to dismiss36 petitioners’ motion for a restraining order and/or injunction stating that the subject matter involved an intra-union dispute. petitioners filed a second amended complaint28 to include in its complaint the issue of gross violation of the CBA for violation of the contract bar rule following Bayer’s decision to negotiate and sign a new CBA with Remigio’s group.31 BLR ruling came late since Bayer had already signed a new CBA32 with REUBP. as the case involves intra-union disputes. Petitioners asserted their authority as the exclusive bargaining representative of all rankand-file employees of Bayer and asked that a temporary restraining order be issued against Remigio’s group and Bayer to prevent the employees from ratifying the new CBA.37 .33 Labor Arbiter Waldo Emerson R.34 Clearly then. the Regional Director of the Industrial Relations Division of DOLE issued a decision dismissing the issue on expulsion filed by EUBP against Remigio and her allies for failure to exhaust reliefs within the union and ordering the conduct of a referendum to determine which of the two groups should be recognized as union officers. the BLR reversed the Regional Director’s ruling and ordered the management of Bayer to respect the authority of the duly-elected officers of EUBP in the administration of the prevailing CBA.

HELD: . ISSUE: whether the act of the management of Bayer in dealing and negotiating with Remigio’s splinter group despite its validly existing CBA with EUBP can be considered unfair labor practice and. the instant case was brought about by the action of the Group of REM[I]GIO to disaffiliate from FFW and to organized (sic) REUBP under the tutelage of REM[I]GIO and VILLAREAL. If there exist[s] two opposing unions in the same company. whether EUBP is entitled to any relief.39 Thus. 2003. it involves purely an (sic) inter-union and intra-union conflicts or disputes between EUBP-FFW and REUBP which issue should have been resolved by the Bureau of Labor Relations under Article 226 of the Labor Code. At first glance of the case at bar. if so.38 EUBP’s motion for reconsideration was likewise denied. then the BLR is divested of jurisdiction over the case and the issue should have been referred to the Grievance Machinery and Voluntary Arbitrator and not to the Labor Arbiter as what petitioners did in the case at bar. the employees have all the right to change their bargaining unit who will represent them.Aggrieved by the Labor Arbiter’s decision to dismiss the second ULP complaint. but the NLRC denied the appeal. the CA sustained both the Labor Arbiter and the NLRC’s rulings. since no less than petitioners who admitted that respondents committed gross violations of the CBA. However. On December 15. the remedy is not to declare that such act is considered unfair labor practice but rather they should conduct a certification election provided [that] it should be conducted within 60 days of the so[]called freedom period before the expiration of the CBA. petitioners filed a Rule 65 petition to the CA. x x x CBA entered between BAYER and EUBP-FFW [has] a life span of only five years and after the said period. petitioners appealed the said decision.

Lonishen and Amistoso liable for unfair labor practice? On this score. the issue raised pertained only to the validity of the acts of management in light of the fact that it still has an existing CBA with EUBP. including grievances arising from any violation of the rights and conditions of membership. Lonishen and Amistoso the question was whether they were liable for unfair labor practice. The dismissal of the second ULP complaint was therefore erroneous. the petitioners do not seek a determination of whether it is the Facundo group (EUBP) or the Remigio group (REUBP) which is the true set of union officers. . Instead. we find that the evidence supports an answer in the affirmative. Petitioners’ ULP complaint cannot prosper as against respondents Remigio and Villareal because the issue. 40-03. It is clear from the foregoing that the issues raised by petitioners do not fall under any of the aforementioned circumstances constituting an intra-union dispute. the Labor Arbiter and the NLRC will necessarily touch on the issues respecting the propriety of their disaffiliation and the legality of the establishment of REUBP – issues that are outside the scope of their jurisdiction. as to respondents Remigio and Villareal. Thus as to Bayer. However. or disputes arising from chartering or disaffiliation of the union. Accordingly. as against them. An intra-union dispute refers to any conflict between and among union members. violation of or disagreement over any provision of the union’s constitution and by-laws. 40-03.The petition is partly meritorious. Series of 2003 of the DOLE enumerate the following circumstances as inter/intra-union disputes. More importantly. To rule on the validity or illegality of their acts. Rule XI of Department Order No. but only with respect to these two respondents. essentially involves an intraunion dispute based on Section 1 (n) of DOLE Department Order No. we find that petitioners’ complaint was validly dismissed. But are Bayer. the dismissal of the complaint was validly made.49 Sections 1 and 2. which issue was within the jurisdiction of the NLRC.

and no CBA forged after arduous negotiations will ever be honored or be relied upon. and decide to bargain anew with a different group if there is no legitimate reason for doing so and without first following the proper procedure. 253. it is specified that the registered CBA serves as the covenant between the parties and has the force and effect of law between them during the period of its duration. bargaining and negotiations between the employer and the union will never be truthful and meaningful.53 . It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. An employer should not be allowed to rescind unilaterally its CBA with the duly certified bargaining agent it had previously contracted with. Compliance with the terms and conditions of the CBA is mandated by express policy of the law primarily to afford protection to labor51 and to promote industrial peace. – Where there is a collective bargaining agreement.)1avvphi1 This is the reason why it is axiomatic in labor relations that a CBA entered into by a legitimate labor organization that has been duly certified as the exclusive bargaining representative and the employer becomes the law between them. when a valid and binding CBA had been entered into by the workers and the employer. (Emphasis supplied.It must be remembered that a CBA is entered into in order to foster stability and mutual cooperation between labor and capital. the former may be held administratively and criminally liable for unfair labor practice. plainly provides: ART. the duty to bargain collectively shall also mean that neither party shall terminate or modify such agreement during its lifetime. Duty to bargain collectively when there exists a collective bargaining agreement. Article 253 of the Labor Code. as amended. the latter is behooved to observe the terms and conditions thereof bearing on union dues and representation. Thus.52 If the employer grossly violates its CBA with the duly recognized union. in the Certificate of Registration50 issued by the DOLE. Additionally. either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. However. If such behavior would be tolerated.

the allegations in the complaint must show prima facie the concurrence of two things. they were cognizant of the fact that even the DOLE Secretary himself had recognized the legitimacy of EUBP’s mandate by rendering an arbitral award ordering the signing of the 1997-2001 CBA between Bayer and EUBP. yet they still proceeded to turn over the collected union dues to REUBP and to effusively deal with Remigio. namely: (1) gross violation of the CBA. and for the NLRC to exercise appellate jurisdiction thereon. and (2) the violation pertains to the economic provisions of the CBA. citing the provisions of Articles 248 (1) and 26154 of the Labor Code.55 Their argument is. Lonishen and Amistoso. the former indubitably abandons its recognition of the latter and terminates the entire CBA. therefore. Bayer. When an employer proceeds to negotiate with a splinter union despite the existence of its valid CBA with the duly certified and exclusive bargaining agent. Moreover. such as utter disregard of the very existence of the CBA itself. They also reason that the act of the company in negotiating with EUBP for the 2006-2007 CBA is an obvious . in Silva v. should not be construed to apply to violations of the CBA which can be considered as gross violations per se.57 This pronouncement in Silva. reeks with anti-EUBP animus. Respondents were likewise well-aware of the pendency of the intra-union dispute case. contend that their acts cannot constitute unfair labor practice as the same did not involve gross violations in the economic provisions of the CBA. Lonishen and Amistoso argue that the case is already moot and academic following the lapse of the 1997-2001 CBA and their renegotiation with EUBP for the 2006-2007 CBA. Respondents cannot claim good faith to justify their acts. as amended.Respondents Bayer. National Labor Relations Commission. They knew that Facundo’s group represented the duly-elected officers of EUBP. misplaced. similar to what happened in this case. Indeed. however. The totality of respondents’ conduct. however.56 we explained the correlations of Article 248 (1) and Article 261 of the Labor Code to mean that for a ULP case to be cognizable by the Labor Arbiter.

000. and are hereby ORDERED to remit to petitioners the amount of P254. except when the pending claim has been expressly waived or compromised in its subsequent negotiations with the management. 1) Respondents Bayer Phils. and G.R. this would be against public policy of affording protection to labor and will encourage scheming employers to commit unlawful acts without fear of being sanctioned in the future. Undoubtedly.58 We do not agree..00 and attorney’s fees equivalent to 10% of the monetary award. Lonishen and Asuncion Amistoso are found LIABLE for Unfair Labor Practice. Dieter J. that the management of Bayer decided to recognize EUBP as the certified collective bargaining agent of its rank-and-file employees for purposes of its 2006-2007 CBA negotiations is of no moment. Nos. First. To hold otherwise would be tantamount to subjecting industrial peace to the precondition that previous claims that labor may have against capital must first be waived or abandoned before negotiations between them may resume.1avvphi1 Second. It did not obliterate the fact that the management of Bayer had withdrawn its recognition of EUBP and supported REUBP during the tumultuous implementation of the 1997-2001 CBA.857. They are likewise ORDERED to pay petitioners nominal damages in the amount of P250. a legitimate labor organization cannot be construed to have abandoned its pending claim against the management/employer by returning to the negotiating table to fulfill its duty to represent the interest of its members.recognition on their part that EUBP is now the certified collective bargaining agent of its rank-and-file employees. 2008 .15 representing the collected union dues previously turned over to Avelina Remigio and Anastacia Villareal. 158930-31 March 3. Such act of interference which is violative of the existing CBA with EUBP led to the filing of the subject complaint.

"8 Dialogue between the company and the union thereafter ensued. 2008 NESTLÉ PHILIPPINES.KILUSANG MAYO UNO (UFE-DFA-KMU). J. On 29 May 2001. vs.R.DRUG.KILUSANG MAYO UNO (UFE-DFA-KMU)."6 In response thereto.5 the Presidents of the Alabang and Cabuyao Divisions of UFE-DFA-KMU informed Nestlé of their intent to "open [our] new Collective Bargaining Negotiation for the year 2001-2004 x x x as early as June 2001. company-initiated policies and programs. vs. Nestlé requested9 the National Conciliation and Mediation Board (NCMB). Nos. petitioner. but are not limited to the Retirement Plan. x------------------------------------------x G. FOOD AND ALLIED INDUSTRIES UNIONS . as the existing collective bargaining agreement (CBA) between Nestlé and UFE-DFA-KMU4 was to end on 5 June 2001. 158944-45 March 3. are by their very nature not proper subjects of CBA negotiations and therefore shall be excluded therefrom. respondent. respondent. one-time company grants.: UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-andfile employees of Nestlé belonging to the latter’s Alabang and Cabuyao plants. FOOD AND ALLIED INDUSTRIES UNIONS . NESTLÉ PHILIPPINES.DRUG. UNION OF FILIPRO EMPLOYEES . Nestlé informed them that it was also preparing its own counter-proposal and proposed ground rules to govern the impending conduct of the CBA negotiations. INCORPORATED. in another letter to the UFE-DFA-KMU (Cabuyao Division only)7. INCORPORATED. petitioner.UNION OF FILIPRO EMPLOYEES . Incidental Straight Duty Pay and Calling Pay Premium. to . Nestlé reiterated its stance that "unilateral grants. RESOLUTION CHICO-NAZARIO. which include.

this time predicated on Nestlé’s alleged unfair labor practices. The parties are further directed to meet and convene for the discussion of the union proposals and company counter-proposals before the National Conciliation and Mediation Board (NCMB) despite the order enjoining the conduct of any strike or lockout and conciliation efforts by the NCMB. . costs and attendance. bargaining in bad faith by setting pre-conditions in the ground rules and/or refusing to include the issue of the Retirement Plan in the CBA negotiations.11 On 07 November 2001. i. and the UFE-DFA-KMU filed a Notice of Strike10 on 31 October 2001 with the NCMB. Accordingly. The result of a strike vote conducted by the members of UFE-DFA-KMU yielded an overwhelming approval of the decision to hold a strike. that is. though. Sto. complaining. Conciliation proceedings proved ineffective.14 praying for the Secretary of the DOLE. Sec. any strike or lockout is hereby enjoined.13 prior to holding the strike. that despite fifteen (15) meetings between them. another Notice of Strike12 was filed by the union. and CBA". .conduct preventive mediation proceedings between it and UFE-DFA-KMU owing to an alleged impasse in said dialogue. the employee members of UFE-DFA-KMU at Nestlé’s Cabuyao Plant went on strike. The parties are directed to cease and desist from committing any act that might lead to the further deterioration of the current labor relations situation. i.e.. to assume jurisdiction over the current labor dispute in order to effectively enjoin any impending strike by the members of the UFE-DFA-KMU at the Nestlé’s Cabuyao Plant in Laguna. "retirement (plan). Nestlé filed with the DOLE a Petition for Assumption of Jurisdiction. panel composition. of a bargaining deadlock pertaining to economic issues.e.. the parties failed to reach any agreement on the proposed CBA. Tomas issued an Order15 assuming jurisdiction over the subject labor dispute. in essence.

Tomas to seek the assistance of the Philippine National Police (PNP) for the enforcement of said order. and (4) the submission of their respective position papers within ten (10) days from receipt thereof. (3) both parties to cease and desist from committing acts inimical to the on-going conciliation proceedings leading to the further deterioration of the situation. Tomas allowed UFE-DFA-KMU the chance to tender its stand on the other issues raised by Nestlé but not covered by its initial position paper by way of a Supplemental Position Paper. alleging that Sec. Tomas committed grave abuse of discretion amounting to lack or excess of jurisdiction when she issued the Orders . Sto. Hon. filed several pleadings. Sto. Nestlé and UFE-DFA-KMU filed their respective position papers. the members of UFE-DFA-KMU continued with their strike.In view of the above. Sec. thus. Sec."17 and that the Amended Notice of Strike it filed did not cite. Nestlé addressed several issues concerning economic provisions of the CBA as well as the non-inclusion of the issue of the Retirement Plan in the collective bargaining negotiations. Acting Secretary of the DOLE. UFE-DFA-KMU filed a Petition for Certiorari18 before the Court of Appeals. Sto. Sto. (2) Nestlé to accept back all returning workers under the same terms and conditions existing preceding to the strike. Sto. the CBA deadlock. In the interim. Tomas "could only assume jurisdiction over the issues mentioned in the notice of strike subject of the current dispute. Sto. Tomas directed: (1) the members of UFE-DFA-KMU to return-to-work within twentyfour (24) hours from receipt of such Order. instead of filing the above-mentioned supplement. in an Order dated on 16 January 2002. UFE-DFA-KMU. Sec. The union posited that Sec. prompting Sec. Brion. On the other hand. Arturo D. Tomas denied the motion for reconsideration of UFE-DFA-KMU. as one of the grounds. came . But notwithstanding the Return-to-Work Order. UFE-DFA-KMU limited itself to the issue of whether or not the retirement plan was a mandatory subject in its CBA negotiations.

1991. G. and to adopt these as the terms and conditions of the Nestlé Cabuyao Plant CBA. f. UFE-DFA-KMU went to the Court of Appeals via another Petition for Certiorari seeking to annul the Orders of 02 April 2002 . we hereby recognize that the present Retirement Plan at the Nestlé Cabuyao Plant is a unilateral grant that the parties have expressly so recognized subsequent to the Supreme Court’s ruling in Nestlé. be for a term of five (5) years. Inc. February 4. furnishing this Office a copy of the signed Agreement. UFE-DFA-KMU moved to reconsider the aforequoted ruling. 2001 of the superceded CBA). all existing provisions of the expired Nestlé Cabuyao Plant CBA without any counterpart in the CBAs of the other eight bargaining units in the Company are hereby ordered maintained as part of the new Nestlé Cabuyao Plant CBA. NLRC. all other provisions shall be renegotiated not later than three (3) years after its effective date which shall be December 5. all union demands that are not covered by the provisions of the CBAs of the other eight (8) bargaining units in the Company are hereby denied. but such was subsequently denied. in so far as representation is concerned. Inc. the parties are directed to secure the best applicable terms of the recently concluded CBSs between Nestlé Phils. b. and is therefore not a mandatory subject for bargaining.R. c. e. d.. this CBA shall. the parties shall execute their CBA within thirty (30) days from receipt of this Order. No.out with an Order19 ruling that: a. the Union’s charge of unfair labor practice against the Company is hereby dismissed for lack of merit. 2001 (or on the first day six months after the expiration on June 4. and it eight (8) other bargaining units. vs. For the second time. 90231. g. Phils.

the appellate court promulgated its Decision on the twin petitions for certiorari. res ipsa loquitor. HELD: As to the charge of unfair labor practice: The motion does not put forward new arguments to substantiate the prayer for reconsideration of this Court’s Decision except for the sole contention that the transaction speaks for itself. considering that the transaction speaks for itself. having been issued in grave abuse of discretion amounting to lack or excess of jurisdiction. res ipsa loquitor. as amended. UFE-DFA-KMU argues therein that Nestlé’s "refusal to bargain on a very important CBA economic provision constitutes unfair labor practice.and 06 May 2002 of the Secretary of the DOLE. Both parties appealed the aforequoted ruling. Nonetheless. ISSUE: Firstly. it questions this Court’s finding that Nestlé was not guilty of unfair labor practice. in contrast. Nestlé essentially assailed that part of the decision finding the DOLE Secretary to have gravely abused her discretion amounting to lack or excess of jurisdiction when she ruled that the Retirement Plan was not a valid issue to be tackled during the CBA negotiations. i. questioned the appellate court’s decision finding Nestlé free and clear of any unfair labor practice. even a perusal of the arguments of UFE-DFA-KMU in its petition and memorandum in consideration of the point heretofore raised will not convince us to change our disposition of the question of unfair labor practice."23 It explains that Nestlé .. ruling entirely in favor of UFE-DFA-KMU.e. i. And made an issue again is the question of whether or not the DOLE Secretary can take cognizance of matters beyond the amended Notice of Strike.e. Since the motions for reconsideration of both parties were denied UFE-DFAKMU and Nestlé separately filed the instant Petitions for Review on Certiorari under Rule 45 of the Rules of Court. UFE-DFA-KMU.

or done in a manner contrary to morals. it must be shown that Nestlé was motivated by ill will. wounded feelings."24 It then concluded that "the Court of Appeals committed a legal error in not ruling that respondent company is guilty of unfair labor practice. good customs. or public policy. While the law makes it an obligation for the . or was oppressive to labor.set as a precondition for the holding of collective bargaining negotiations the non-inclusion of the issue of Retirement Plan. of course. there is no per se test of good faith in bargaining. but the impact of all such occasions or actions. insisted that the Union should first agree that the retirement plan is not a bargaining issue before respondent Nestlé would agree to discuss other issues in the CBA. "bad faith. and the inferences fairly drawn therefrom collectively may offer a basis for the finding of the NLRC. The duty to bargain collectively is mandated by Articles 252 and 253 of the Labor Code Obviously. but they do not compel one. of whether or not a party has met his statutory duty to bargain in good faith typically turns on the facts of the individual case."25 We are unconvinced still. or fraud. therefore. or grave anxiety resulted x x x"27 in disclaiming unilateral grants as proper subjects in their collective bargaining negotiations. that social humiliation. "respondent Nestlé Phils. The statutes invite and contemplate a collective bargaining contract. The effect of an employer’s or a union’s individual actions is not the test of good-faith bargaining. and.26 For a charge of unfair labor practice to prosper. considered as a whole. As we have said. the purpose of collective bargaining is the reaching of an agreement resulting in a contract binding on the parties. Inc. but the failure to reach an agreement after negotiations have continued for a reasonable period does not establish a lack of good faith.. In its words. It also committed a legal error in failing to award damages to the petitioner for the ULP committed by the respondent. The crucial question. Good faith or bad faith is an inference to be drawn from the facts. The duty to bargain does not include the obligation to reach an agreement.

" But as we have stated in this Court’s Decision. but are not limited to the Retirement Plan. In the case at bar. Incidental Straight Duty Pay and Calling Pay Premium. company-initiated policies and programs. Nestlé’s desire to settle the dispute and proceed with the negotiation being evident in its cry for compulsory arbitration is proof enough of its exertion of reasonable effort at good-faith bargaining. In thinking to exclude the issue of Retirement Plan from the CBA negotiations. which include. On account of the importance of the economic issue . on the postulation that such was in the nature of a unilaterally granted benefit. considering that eight out of nine bargaining units have allegedly agreed to treat the Retirement Plan as a unilaterally granted benefit. This is not a case where the employer exhibited an indifferent attitude towards collective bargaining.employer and the employees to bargain collectively with each other. the union merely bases its claim of refusal to bargain on a letter28 dated 29 May 2001 written by Nestlé where the latter laid down its position that "unilateral grants.10] It is but natural that at negotiations. Indeed. management and labor adopt positions or make demands and offer proposals and counter-proposals. Herein. an adamant insistence on a bargaining position to the point where the negotiations reach an impasse does not establish bad faith. cannot be faulted for considering the same benefit as unilaterally granted. because the negotiations were not the unilateral activity of the bargaining representative. one-time company grants. Nestle never refused to bargain collectively with UFE-DFAKMU. said letter is not tantamount to refusal to bargain. The corporation simply wanted to exclude the Retirement Plan from the issues to be taken up during CBA negotiations. such compulsion does not include the commitment to precipitately accept or agree to the proposals of the other. All it contemplates is that both parties should approach the negotiation with an open mind and make reasonable effort to reach a common ground of agreement. Nestlé. An employer’s steadfast insistence to exclude a particular substantive provision is no different from a bargaining representative’s perseverance to include one that they deem of absolute necessity.[fn24 p. are by their very nature not proper subjects of CBA negotiations and therefore shall be excluded therefrom.

authorized or ratified unfair labor practices shall be held criminally liable.) In contrast. The foregoing things considered.) Herein. of the two notices of strike filed by UFE-DFA-KMU before the NCMB. this Court replicates below its clear disposition of the issue: The concept of "unfair labor practice" is defined by the Labor Code undr rticles 247 and 248. A perusal of the allegations and arguments raised by UFE-DFA-KMU in the Memorandum will readily disclose the need for the presentation of evidence . And the management’s firm stand against the issue of the Retirement Plan did not mean that it was bargaining in bad faith. Nestlé is accused of violating its duty to bargain collectively when it purportedly imposed a pre-condition to its agreement to discuss and engage in collective bargaining negotiations with UFE-DFA-KMU. therefore. in its Position Paper. Nestlé. Nestle could have refused to bargain with the former – but it did not. It had a right to insist on its position to the point of stalemate. did not confine itself to the issue of the non-inclusion of the Retirement Plan but extensively discussed its stance on other economic matters pertaining to the CBA. (Emphasis supplied. it was only on the second that the ground of unfair labor practice was alleged. Worse.proposed by UFE-DFA-KMU. DOLE original records. the 7 November 2001 Notice of Strike merely contained a general allegation that Nestlé committed unfair labor practice by bargaining in bad faith for supposedly "setting pre-condition in the ground rules (Retirement issue). Annex "C" of UFE-DFA-KMU Position Paper. p. only the officers and agents of corporations associations or partnerships who have actually participated. It is UFE-DFA-KMU." (Notice of Strike of 7 November 2001. The provisions of the preceding paragraph notwithstanding. A meticulous review of the record and pleadings of the cases at bar shows that. 146. who had the burden of proof to present substantial evidence to support the allegation of unfair labor practice.

. except for the assertion put forth by UFE-DFA-KMU. It is not enough that the union believed that the employer committed acts of unfair labor practice when the circumstances clearly negate even a prima facie showing to warrant such a belief." (Emphasis supplied. In cases of unfair labor practices. the notice of strike shall as far as practicable. the rule is that good faith is always presumed. since UFE-DFA-KMU failed to proffer substantial evidence that would overcome the legal presumption of good faith on the part of Nestlé. Construing arguendo that the content of the aforequoted letter of 29 May 2001 laid down a pre-condition to its agreement to bargain with UFE-DFAKMU. such exercise will be upheld. Sec.other than its bare contention of unfair labor practice in order to make certain the propriety or impropriety of the ULP charge hurled against Nestlé. 4. Accordingly. Herein. Book V of the Implementing Rules of the Labor Code: x x x.) In the case at bar. There is no per se test of good faith in bargainingGood faith or bad faith is an inference to be drawn from the facts. the award of moral and exemplary damages is unavailing. Nestlé’s inclusion in its Position Paper of its proposals affecting other matters covered by the CBA negates the claim of refusal to bargain or bargaining in bad faith. As long as the company’s exercise of the same is in good faith to advance its interest and not for purpose of defeating or circumventing the rights of employees under the law or a valid agreement. Employers are accorded rights and privileges to assure their selfdetermination and independence and reasonable return of capital. state the acts complained of and the efforts to resolve the dispute amicably. This mass of privileges comprises the so-called management prerogatives. In this connection. no proof was presented to exemplify bad faith on the part of Nestlé apart from mere allegation. neither the second Notice of Strike nor the records of these cases substantiate a finding of unfair labor practice. Under Rule XIII.

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