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L-48645 January 7, 1987 "BROTHERHOOD" LABOR UNITY MOVEMENT OF THE PHILIPPINES, ANTONIO CASBADILLO, PROSPERO TABLADA, ERNESTO BENGSON, PATRICIO SERRANO, ANTONIO B. BOBIAS, VIRGILIO ECHAS, DOMINGO PARINAS, NORBERTO GALANG, JUANITO NAVARRO, NESTORIO MARCELLANA, TEOFILO B. CACATIAN, RUFO L. EGUIA, CARLOS SUMOYAN, LAMBERTO RONQUILLO, ANGELITO AMANCIO, DANILO B. MATIAR, ET AL., petitioners, vs. HON. RONALDO B. ZAMORA, PRESIDENTIAL ASSISTANT FOR LEGAL AFFAIRS, OFFICE OF THE PRESIDENT, HON. AMADO G. INCIONG, UNDERSECRETARY OF LABOR, SAN MIGUEL CORPORATION, GENARO OLIVES, ENRIQUE CAMAHORT, FEDERICO OÑATE, ERNESTO VILLANUEVA, ANTONIO BOCALING and GODOFREDO CUETO, respondents. Armando V. Ampil for petitioners. Siguion Reyna, Montecillo and Ongsiako Law Office for private respondents.
GUTIERREZ, JR., J.: The elemental question in labor law of whether or not an employer-employee relationship exists between petitioners-members of the "Brotherhood Labor Unit Movement of the Philippines" (BLUM) and respondent San Miguel Corporation, is the main issue in this petition. The disputed decision of public respondent Ronaldo Zamora, Presidential Assistant for legal Affairs, contains a brief summary of the facts involved: 1. The records disclose that on July 11, 1969, BLUM filed a complaint with the now defunct Court of Industrial Relations, charging San Miguel Corporation, and the following officers: Enrique Camahort, Federico Ofiate Feliciano Arceo, Melencio Eugenia Jr., Ernesto Villanueva, Antonio Bocaling and Godofredo Cueto of unfair labor practice as set forth in Section 4 (a), sub-sections (1) and (4) of Republic Act No. 875 and of Legal dismissal. It was alleged that respondents ordered the individual complainants to disaffiliate from the complainant union; and that management dismissed the individual complainants when they insisted on their union membership. On their part, respondents moved for the dismissal of the complaint on the grounds that the complainants are not and have never been employees of respondent company but employees of the independent contractor; that respondent company has never had control over the means and methods followed by the independent contractor who enjoyed full authority to hire and control said employees; and that the individual complainants are barred by estoppel from asserting that they are employees of respondent company. While pending with the Court of Industrial Relations CIR pleadings and testimonial and documentary evidences were duly presented, although the actual hearing was delayed by several postponements. The dispute was taken over by the National Labor Relations Commission (NLRC) with the decreed abolition of the CIR and the hearing of the case intransferably commenced on September 8, 1975.
On February 9, 1976, Labor Arbiter Nestor C. Lim found for complainants which was concurred in by the NLRC in a decision dated June 28, 1976. The amount of backwages awarded, however, was reduced by NLRC to the equivalent of one (1) year salary. On appeal, the Secretary in a decision dated June 1, 1977, set aside the NLRC ruling, stressing the absence of an employer-mployee relationship as borne out by the records of the case. ... The petitioners strongly argue that there exists an employer-employee relationship between them and the respondent company and that they were dismissed for unionism, an act constituting unfair labor practice "for which respondents must be made to answer." Unrebutted evidence and testimony on record establish that the petitioners are workers who have been employed at the San Miguel Parola Glass Factory since 1961, averaging about seven (7) years of service at the time of their termination. They worked as "cargadores" or "pahinante" at the SMC Plant loading, unloading, piling or palleting empty bottles and woosen shells to and from company trucks and warehouses. At times, they accompanied the company trucks on their delivery routes. The petitioners first reported for work to Superintendent-in-Charge Camahort. They were issued gate passes signed by Camahort and were provided by the respondent company with the tools, equipment and paraphernalia used in the loading, unloading, piling and hauling operation. Job orders emanated from Camahort. The orders are then transmitted to an assistant-officer-incharge. In turn, the assistant informs the warehousemen and checkers regarding the same. The latter, thereafter, relays said orders to the capatazes or group leaders who then give orders to the workers as to where, when and what to load, unload, pile, pallet or clean. Work in the glass factory was neither regular nor continuous, depending wholly on the volume of bottles manufactured to be loaded and unloaded, as well as the business activity of the company. Work did not necessarily mean a full eight (8) hour day for the petitioners. However, work,at times, exceeded the eight (8) hour day and necessitated work on Sundays and holidays. For this, they were neither paid overtime nor compensation for work on Sundays and holidays. Petitioners were paid every ten (10) days on a piece rate basis, that is, according to the number of cartons and wooden shells they were able to load, unload, or pile. The group leader notes down the number or volume of work that each individual worker has accomplished. This is then made the basis of a report or statement which is compared with the notes of the checker and warehousemen as to whether or not they tally. Final approval of report is by officer-in-charge Camahort. The pay check is given to the group leaders for encashment, distribution, and payment to the petitioners in accordance with payrolls prepared by said leaders. From the total earnings of the group, the group leader gets a participation or share of ten (10%) percent plus an additional amount from the earnings of each individual. The petitioners worked exclusive at the SMC plant, never having been assigned to other companies or departments of SMC plant, even when the volume of work was at its minimum. When any of the glass furnaces suffered a breakdown, making a shutdown necessary, the petitioners work was temporarily suspended. Thereafter, the petitioners would return to work at the glass plant. Sometime in January, 1969, the petitioner workers — numbering one hundred and forty (140) organized and affiliated themselves with the petitioner union and engaged in union activities. Believing themselves entitled to overtime and holiday pay, the petitioners pressed management,
airing other grievances such as being paid below the minimum wage law, inhuman treatment, being forced to borrow at usurious rates of interest and to buy raffle tickets, coerced by withholding their salaries, and salary deductions made without their consent. However, their gripes and grievances were not heeded by the respondents. On February 6, 1969, the petitioner union filed a notice of strike with the Bureau of Labor Relations in connection with the dismissal of some of its members who were allegedly castigated for their union membership and warned that should they persist in continuing with their union activities they would be dismissed from their jobs. Several conciliation conferences were scheduled in order to thresh out their differences, On February 12, 1969, union member Rogelio Dipad was dismissed from work. At the scheduled conference on February 19, 1969, the complainant union through its officers headed by National President Artemio Portugal Sr., presented a letter to the respondent company containing proposals and/or labor demands together with a request for recognition and collective bargaining. San Miguel refused to bargain with the petitioner union alleging that the workers are not their employees. On February 20, 1969, all the petitioners were dismissed from their jobs and, thereafter, denied entrance to respondent company's glass factory despite their regularly reporting for work. A complaint for illegal dismissal and unfair labor practice was filed by the petitioners. The case reaches us now with the same issues to be resolved as when it had begun. The question of whether an employer-employee relationship exists in a certain situation continues to bedevil the courts. Some businessmen try to avoid the bringing about of an employer-employee relationship in their enterprises because that judicial relation spawns obligations connected with workmen's compensation, social security, medicare, minimum wage, termination pay, and unionism. (Mafinco Trading Corporation v. Ople, 70 SCRA 139). In determining the existence of an employer-employee relationship, the elements that are generally considered are the following: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. It. is the called "control test" that is the most important element (Investment Planning Corp. of the Phils. v. The Social Security System, 21 SCRA 924; Mafinco Trading Corp. v. Ople, supra,and Rosario Brothers, Inc. v. Ople, 131 SCRA 72). Applying the above criteria, the evidence strongly indicates the existence of an employer-employee relationship between petitioner workers and respondent San Miguel Corporation. The respondent asserts that the petitioners are employees of the Guaranteed Labor Contractor, an independent labor contracting firm. The facts and evidence on record negate respondent SMC's claim. The existence of an independent contractor relationship is generally established by the following criteria: "whether or not the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece of work; the control and supervision of the work to another; the employer's power with respect to the hiring, firing and payment of the contractor's workers; the control of the premises; the duty to supply the premises tools, appliances, materials and labor; and
the mode, manner and terms of payment" (56 CJS Master and Servant, Sec. 3(2), 46; See also 27 AM. Jur. Independent Contractor, Sec. 5, 485 and Annex 75 ALR 7260727) None of the above criteria exists in the case at bar. Highly unusual and suspect is the absence of a written contract to specify the performance of a specified piece of work, the nature and extent of the work and the term and duration of the relationship. The records fail to show that a large commercial outfit, such as the San Miguel Corporation, entered into mere oral agreements of employment or labor contracting where the same would involve considerable expenses and dealings with a large number of workers over a long period of time. Despite respondent company's allegations not an iota of evidence was offered to prove the same or its particulars. Such failure makes respondent SMC's stand subject to serious doubts. Uncontroverted is the fact that for an average of seven (7) years, each of the petitioners had worked continuously and exclusively for the respondent company's shipping and warehousing department. Considering the length of time that the petitioners have worked with the respondent company, there is justification to conclude that they were engaged to perform activities necessary or desirable in the usual business or trade of the respondent, and the petitioners are, therefore regular employees (Phil. Fishing Boat Officers and Engineers Union v. Court of Industrial Relations, 112 SCRA 159 and RJL Martinez Fishing Corporation v. National Labor Relations Commission, 127 SCRA 454). As we have found in RJL Martinez Fishing Corporation v. National Labor Relations Commission (supra): ... [T]he employer-employee relationship between the parties herein is not coterminous with each loading and unloading job. As earlier shown, respondents are engaged in the business of fishing. For this purpose, they have a fleet of fishing vessels. Under this situation, respondents' activity of catching fish is a continuous process and could hardly be considered as seasonal in nature. So that the activities performed by herein complainants, i.e. unloading the catch of tuna fish from respondents' vessels and then loading the same to refrigerated vans, are necessary or desirable in the business of respondents. This circumstance makes the employment of complainants a regular one, in the sense that it does not depend on any specific project or seasonable activity. (NLRC Decision, p. 94, Rollo).
so as it with petitioners in the case at bar. In fact, despite past shutdowns of the glass plant for repairs, the petitioners, thereafter, promptly returned to their jobs, never having been replaced, or assigned elsewhere until the present controversy arose. The term of the petitioners' employment appears indefinite. The continuity and habituality of petitioners' work bolsters their claim of employee status vis-a-vis respondent company, Even under the assumption that a contract of employment had indeed been executed between respondent SMC and the alleged labor contractor, respondent's case will, nevertheless, fail. Section 8, Rule VIII, Book III of the Implementing Rules of the Labor Code provides: Job contracting. — There is job contracting permissible under the Code if the following conditions are met: (1) The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner
the fees are paid directly to the manpower agency in lump sum without indicating or implying that the basis of such lump sum is the salary per worker multiplied by the number of workers assigned to the company. Units of time . table. free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof. . reports or statements prepared by the workers' group leader. We find that Guaranteed and Reliable Labor contractors have neither substantial capital nor investment to qualify as an independent contractor under the law. Nor is the profit or gain of the alleged contractor in the conduct of its business provided for as an amount over and above the workers' wages. even the alleged contractor's office. The alleged independent contractors in the case at bar were paid a lump sum representing only the salaries the workers were entitled to. 109 of the Labor Code. suggesting the existence of a "labor only" contracting scheme prohibited by law (Article 106. Book III. It is only the manpower or labor force which the alleged contractors supply. In fact. which. It is important to emphasize that in a truly independent contractor-contractee relationship. pile or pallet and see whether they tally.and method. . Rule VIII. The payment of the workers' wages is a critical factor in determining the actuality of an employeremployee relationship whether between respondent company and petitioners or between the alleged independent contractor and petitioners. 635). We cannot construe payment by the piece where work is done in such an establishment so as to put the worker completely at liberty to turn him out and take in another at pleasure. where they note down the number of cartons. The amount paid by respondent company to the alleged independent contractor considers no business expenses or capital outlay of the latter. chair. warehousemen and checkers. as follows: "[C]ircumstances must be construed to determine indeed if payment by the piece is just a method of compensation and does not define the essence of the relation. perhaps. Instead. International Labor and Marine Union of the Philippines (90 SCRA 161). are provided for by respondent SMC. Implementing Rules and Regulations of the Labor Code)." . These are based on payrolls. in the maintenance thereof or in the payment of its workers' salaries. Court of Appeals (39 SCRA 629. the alleged contractor receives a percentage from the total earnings of all the workers plus an additional amount corresponding to a percentage of the earnings of each individual worker. work premises. tools. which consists of a space at respondent company's warehouse. accounts for the petitioners' charge of unauthorized deductions from their salaries by the respondents. equipment. had accomplished individually. Section 9(b). equipment and paraphernalia used by the petitioners in their jobs are admittedly all supplied by respondent company. It is therefore clear that the alleged contractors have no capital outlay involved in the conduct of its business. and (2) The contractor has substantial capital or investment in the form of tools. typewriter and cabinet. machineries. This is the rule inSocial Security System v. to be applied whenever agreed upon. and other materials which are necessary in the conduct of his business. arrived at by adding the salaries of each worker which depend on the volume of work they. we merely have to cite our rulings in Dy Keh Beng v. unload. and units of work are in establishments like respondent (sic) just yardsticks whereby to determine rate of compensation. wooden shells and bottles each worker was able to load. Anent the argument that the petitioners are not employees as they worked on piece basis. The premises.
IN VIEW OF THE FOREGOING. The San Miguel Corporation is hereby ordered to REINSTATE petitioners. Operations continued after such repairs. . There is no evidence to show that the alleged labor contractor had such right of control or much less had been there to supervise or deal with the petitioners.Article 106 of the Labor Code provides the legal effect of a labor only contracting scheme. Documentary evidence presented by the petitioners establish respondent SMC's right to impose disciplinary measures for violations or infractions of its rules and regulations as well as its right to recommend transfers and dismissals of the piece workers. Respondent company would have us believe that this was a case of retrenchment due to the closure or cessation of operations of the establishment or undertaking. New workers manned their positions. as well as in disciplinary measures imposed by it. the respondent SMC is ordered to pay the petitioners separation pay equivalent to one (1) month pay for every year of service. This must be followed.. There is no showing that petitioners had been remiss in their obligations and inefficient in their jobs to warrant their separation. with three (3) years backwages. how many ways are there to load and unload bottles and wooden shells? The mere concern of both respondent SMC and the alleged contractor is that the job of having the bottles and wooden shells brought to and from the warehouse be done. The Labor Code provides the proper procedure for the recognition of unions as sole bargaining representatives. But such is not the case here. reforms and collective bargaining as a union. supervision as to the means and manner of performing the same is practically nil. It is apparent that the closure of respondent's warehouse was merely a ploy to get rid of the petitioners.. However. one of its furnaces needing repair. The inter-office memoranda submitted in evidence prove the company's control over the petitioners. control in the means and methods/manner by which petitioners are to go about their work. Firmly establishing respondent SMC's role as employer is the control exercised by it over the petitioners that is. it is clear that the respondent company had an existing collective bargaining agreement with the IBM union which is the recognized collective bargaining representative at the respondent's glass plant. The respondent's shutdown was merely temporary. There being a recognized bargaining representative of all employees at the company's glass plant. even as to Abner Bungay who is alleged by SMC to be a representative of the alleged labor contractor. the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. For. the petition is GRANTED. The petitioners were dismissed allegedly because of the shutdown of the glass manufacturing plant. where reinstatement is no longer possible. More evident and pronounced is respondent company's right to control in the discipline of petitioners. who were then agitating the respondent company for benefits. As to the charge of unfair labor practice because of SMC's refusal to bargain with the petitioners. but the petitioners had already been refused entry to the premises and dismissed from respondent's service. That respondent SMC has the power to recommend penalties or dismissal of the piece workers. WHEREFORE. the petitioners cannot merely form a union and demand bargaining. Because of the nature of the petitioners' work as cargadores or pahinantes. SO ORDERED. to wit: . is the strongest indication of respondent company's right of control over the petitioners as direct employer.
Mayudini & Bodegon for respondents. therefore. 57055 of his Court entitled "San Miguel Corporation vs. Diaz. besides the fact that the Union is bereft of personality to represent said workers for purposes of collective bargaining. is taken to task by petitioners in this special civil action for certiorari and Prohibition for having issued the challenged Writ of Preliminary Injunction on 29 March 1989 in Civil Case No. J. outside the scope of this Agreement. There was to be no employer-employee relation between the contractors and/or its workers. for short).R. while appearing to be . Private respondent San Miguel Corporation (SanMig. for brevity) is the duly authorized representative of the monthly paid rank-and-file employees of SanMig with whom the latter executed a Collective Bargaining Agreement (CBA) effective 1 July 1986 to 30 June 1989 (Annex A. dated 20 November 1988 (Annex C. The Solicitor General agrees with the position of SanMig. respondents.: Respondent Judge of the Regional Trial Court of Pasig. MELENCIO-HERRERA." In a letter. SanMig's Comment. Section 1 of their CBA specifically provides that "temporary. for its part. and SAN MIGUEL CORPORATION. DANIEL S. SanMig's Comment). vs. a labor dispute being involved. In said contracts. MARCELA PURIFICACION. BERSAMIRA. Branch 166. The Union alleged that this group of employees. it was expressly understood and agreed that the workers employed by the contractors were to be paid by the latter and that none of them were to be deemed employees or agents of SanMig. HERMINIA REYES. The antecedents of the controversy reveal that: Sometime in 1983 and 1984. RTC. on the one hand. Romeo C. or contract employees and workers are excluded from the bargaining unit and.L. defends the Writ on the ground of absence of any employer-employee relationship between it and the contractual workers employed by the companies Lipercon Services.G. 87700 June 13. probationary. ET AL. Lagman for petitioners. Petitioner San Miguel Corporation Employees Union-PTWGO (the Union. Inc. PASIG. business expansion and diversity of its operation. HON. IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 166. SanMig entered into contracts for merchandising services with Lipercon and D'Rite (Annexes K and I." Petitioners' plea is that said Writ was issued without or in excess of jurisdiction and with grave abuse of discretion. et als. SanMig entered into those contracts to maintain its competitive position and in keeping with the imperatives of efficiency. Jardeleza. Sobrevinas. the Union advised SanMig that some Lipercon and D'Rite workers had signed up for union membership and sought the regularization of their employment with SMC. Petition). petitioners. (Lipercon) and D'Rite Service Enterprises (D'Rite). JESUS G. and SanMig on the other. No.. BORBON II. respectively). SMCEU-PTGWO. These companies are independent contractors duly licensed by the Department of Labor and Employment (DOLE). 1990 SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO.
Beginning 14 February 1989 until 2 March 1989. Petition).. Petition).. the Union again filed a second notice of strike for unfair labor practice (Annex F. it was contended that there exists a "labor-only" contracting situation. using the employees or workers of LIPERCON AND D'RITE to man the strike area and/or picket lines and/or barricades which the defendants may set up at the plants and offices of plaintiff within the bargaining unit referred to in the CBA . intimidating. and egress from. b. .. staging a strike to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE. It was then demanded that the employment status of these workers be regularized. to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE. to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE. On 6 March 1989.. blocking.contractual workers supposedly independent contractors. the Union filed a notice of strike for unfair labor practice. calling for and holding a strike vote. inciting. preventing. Conciliatory meetings were held on the second notice. the work places within the bargaining unit referred to in the CBA . g. On 30 January 1989.. Subsequently.. series of pickets were staged by Lipercon and D'Rite workers in various SMC plants and offices.. have been continuously working for SanMig for a period ranging from six (6) months to fifteen (15) years and that their work is neither casual nor seasonal as they are performing work or activities necessary or desirable in the usual business or trade of SanMig. to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE. Petition). d... f. Thus. as well as those persons lawfully transacting business with plaintiff at the work places within the bargaining unit referred to in the CBA. prohibiting... CBA violations. representing and/or acting for and in behalf of the employees of LIPERCON and/or D'RITE for the purposes of collective bargaining. the two (2) notices of strike were consolidated and several conciliation conferences were held to settle the dispute before the National Conciliation and Mediation Board (NCMB) of DOLE (Annex G. As in the first notice of strike.. c. . SMC filed a verified Complaint for Injunction and Damages before respondent Court to enjoin the Union from: a. obstructing and/or impeding the free ingress to. instigating and/or inducing the employees or workers of LIPERCON and D'RITE to demonstrate and/or picket at the plants and offices of plaintiff within the bargaining unit referred to in the CBA. e. and union busting (Annex D. threatening with bodily harm and/or molesting the other employees and/or contract workers of plaintiff. On 12 January 1989 on the ground that it had failed to receive any favorable response from SanMig.
preventing and/or disrupting the peaceful and normal operation of plaintiff at the work places within the bargaining unit referred to in the CBA. Upon the other hand. The strike adversely affected thirteen (13) of the latter's plants and offices.00 to answer for whatever damages petitioners may sustain by reason thereof. The evidence so far presented indicates that plaintiff has contracts for services with Lipercon and D'Rite. and the Presence or absence of a power to control the putative employee's conduct. Rollo) Anchored on grave abuse of discretion. Verily.62 Rollo). plaintiff has established its right to the relief demanded. or on 2 May 1989. (p. the Union went on strike. the mode of payment of wages. and set the application for Injunction for hearing. To finally resolve this dispute. 21. petitioners are now before us seeking nullification of the challenged Writ." which it superimposed on the Order and widely circulated to entice the Union membership to go on strike. Petition) Respondent Court found the Complaint sufficient in form and substance and issued a Temporary Restraining Order for the purpose of maintaining the status quo. That Motion was denied by respondent Judge in an Order dated 11 April 1989. plaintiff would. Accordingly. supra. If the acts complained of are not restrained. in a Resolution of 24 May 1989. which motion was opposed by SanMig. Apparently. This necessitates a full-blown trial. . undoubtedly. to compel plaintiff to hire the employees or workers of LIPERCON and D'RITE. After several hearings on SanMig's application for injunctive relief. Petition) granting the application and enjoining the Union from Committing the acts complained of. on 29 March 1989. we required the parties to "RESTORE the status quo ante declaration of strike" (p. In the meantime. What could be discerned is that there is no employer-employee relationship between plaintiff and the contractual workers employed by Lipercon and D'Rite. On 24 April 1989. The application and contract for employment of the defendants' witnesses are either with Lipercon or D'Rite. the court must extensively consider and delve into the manner of selection and engagement of the putative employee. respondent Court issued the questioned Order (Annex A. the presence or absence of a power of dismissal. a writ of injunction does not necessarily expose defendants to irreparable damages. the Union filed a Motion to Dismiss SanMig's Complaint on the ground of lack of jurisdiction over the case/nature of the action. respondent Court rationalized: The absence of employer-employee relationship negates the existence of labor dispute. does not mean that a final determination regarding the question of the existence of employer-employee relationship has already been made.000. 2. however. The Union construed this to mean that "we can now strike. In the meantime. Evidently. respondent Court issued the corresponding Writ of Preliminary Injunction after SanMig had posted the required bond of P100. Upon being apprised thereof. where the parties presented both testimonial and documentary evidence on 25 March 1989. we issued a Temporary Restraining Order enjoining the implementation of the Injunction issued by respondent Court. This. suffer irreparable damages.h. (Annex H. on 13 March 1989. In issuing the Injunction. some of the contractual workers of Lipercon and D'Rite had been laid off. this court has jurisdiction to take cognizance of plaintiff's grievance. however. Annex 'C' hereof.
shall be recalled effective 8 May 1989 to their former jobs or equivalent positions under the same terms and conditions prior to "lay-off" (Annex 15. gave due course to the Petition and required the parties to submit their memoranda simultaneously. and is thus beyond the ambit of the public respondent's jurisdiction." for the reasons that: A. . and discussion on their other demands. under the governing collective bargaining agreement. SanMig denies the existence of any employer-employee relationship and consequently of any labor dispute between itself and the Union. The exclusive bargaining representative of an employer unit cannot strike to compel the employer to hire and thereby create an employment relationship with contractual workers. that "respondent Court is vested with jurisdiction and judicial competence to enjoin the specific type of strike staged by petitioner union and its officers herein complained of. to hire strangers or workers outside the unit. No. the Union would immediately lift the pickets and return to work. B. the laid-off individuals . or is in connection with. 57055 (the case below). (SanMig's Memorandum. especially on the eve of certification elections. 6-7. 475-476.e.On 3 May 1989. In turn. or relates to a labor dispute. A strike is a coercive economic weapon granted the bargaining representative only in the event of a deadlock in a labor dispute over 'wages. 87700 (this case) and Civil Case No. The Union stated that it would lift the strike if the thirty (30) Lipercon and D'Rite employees were recalled. SanMig submits. and violates the employer's constitutional liberty to hire or not to hire.. Rollo). in the hope the latter will help re-elect them. or not the case at bar involves. Civil courts have the jurisdiction to enjoin the above because this specie of strike does not arise out of a labor dispute. An affirmative answer would bring the case within the original and exclusive jurisdiction of labor tribunals to the exclusion of the regular Courts. SanMig Comment). such as wage distortion and appointment of coordinators. and therefore strangers to. on 12 October 1989. were made. is the matter of whether. That the acts complained of (i. We find the Petition of a meritorious character. the mass concerted action of picketing and the reliefs prayed for by the private respondent) are within the competence of labor tribunals. The union leaders cannot instigate a strike to compel the employer. is an abuse of right. Effected eventually was a Memorandum of Agreement between SanMig and the Union that "without prejudice to the outcome of G. pp.R. especially were the contractual workers were recognized by the union. in particular. is beyond question" (pp. the last of which was filed on 9 January 1990. the bargaining unit. C. as excluded from. After an exchange of pleadings. the National Conciliation and Mediation Board (NCMB) called the parties to conciliation.. hours of work and all other and of the employment' of the employees in the unit. this Court. The focal issue for determination is whether or not respondent Court correctly assumed jurisdiction over the present controversy and properly issued the Writ of Preliminary Injunction to the resolution of that question. Petitioners' Memo). Petitioners take the position that 'it is beyond dispute that the controversy in the court a quo involves or arose out of a labor dispute and is directly connected or interwoven with the cases pending with the NCMB-DOLE.. On the other hand.
the matter of representation falls within the scope of a labor dispute. Again. Hence. Terms. in fact. resists that Union demand on the ground that there is no employer-employee relationship between it and those workers and because the demand violates the terms of their CBA. whether or not SanMig's contracts with Lipercon and D'Rite constitute "labor-only" contracting and.021-89. the terms and conditions of employment or a "change" or "arrangement" thereof (ibid). 13 SCRA 738) relied upon by SanMig is not controlling as in that case there was no controversy over terms. for its part. 2. In fact. which petitioners wanted discharged notwithstanding the existing contract of the arrastre company with the latter union. of employment or the representation of employees that called for the application of labor laws.R. the injunction sought by SanMig was precisely also to prevent such representation. be said to exist. those that workers may file involving wages.A. what the petitioning union demanded was not a change in working terms and conditions. As the case is indisputably linked with a labor dispute. the Union also seeks to represent those workers. Further. Whether or not the Union demands are valid. fixing. on the basis of those facts unique to that case. and as defined by law. but that its members be hired as stevedores in the place of the members of a rival union. among others. and SanMig's cause's of action in the Court below are inextricably linked with those issues. since the suit below was instituted on 6 March 1989. Obvious then is that representation and association. SanMig. for the purpose of negotiating the conditions of employment are also involved. whether or not the notice of strike was valid and the strike itself legal when it was allegedly instigated to compel the employer to hire strangers outside the working unit. the ruling therein. tenure or conditions. that they be absorbed into the working unit of SanMig. The precedent in Layno vs. de la Cruz (G. Labor Code. At bottom. or the representation of the employees. NCMB NCR NS-01-093-83). No. hours of work and other . maintaining. jurisdiction belongs to the labor tribunals.NS-01. for the purpose of collective bargaining. 6715 on 21 March 1989. Neither can it be denied that the controversy below is directly connected with the labor dispute already taken cognizance of by the NCMB-DOLE (NCMB-NCR. No. L-29636. that such a demand could hardly be considered a labor dispute. supra) provided the controversy concerns. what the Union seeks is to regularize the status of the employees contracted by Lipercon and D'Rite in effect. who have signed up for Union membership.A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating. As explicitly provided for in Article 217 of the Labor Code." While it is SanMig's submission that no employer-employee relationship exists between itself. the existence of a labor dispute is not negative by the fact that the plaintiffs and defendants do not stand in the proximate relation of employer and employee. therefore. or arranging the terms and conditions of employment. — those are issues the resolution of which call for the application of labor laws. unfair labor practice cases. Put differently. That a labor dispute. Labor Arbiters have original and exclusive jurisdiction to hear and decide the following cases involving all workers including "1. In that case. prior to its amendment by R. and the contractual workers of Lipercon and D'Rite on the other. changing. 30 April 1965. whether or not the Union can lawfully represent the workers of Lipercon and D'Rite in their demands against SanMig in the light of the existing CBA. This matter definitely dwells on the working relationship between said employees vis-a-vis SanMig. a labor dispute can nevertheless exist "regardless of whether the disputants stand in the proximate relationship of employer and employee" (Article 212 . as defined by the law. a regular employer-employee relationship may. regardless of whether the disputants stand in the proximate relation of employer and employee. on the one hand. tenure and conditions of their employment and the arrangement of those terms are thus involved bringing the matter within the purview of a labor dispute. does exist herein is evident.
No costs. and 5. Nolasco. premises considered. Article XIII. 20 and 21 of the Civil Code would not suffice to keep the case within the jurisdictional boundaries of regular Courts. Regala & Cruz for petitioner. AND NATIONAL FEDERATION OF SUGAR WORKERS-FOOD AND GENERAL TRADES representing all the sugar farm workers of the HAWAIIAN PHILIPPINE MILLING DISTRICT.terms and conditions of employment. the motion to dismiss dated July 31. SO ORDERED.: This petition for certiorari and prohibition with preliminary injunction seeks to annul the Order dated June 29. 1989 filed by respondent company .. 57055 except for the purpose of dismissing it. . the Writ of certiorari is GRANTED and the Orders of respondent Judge of 25 March 1989 and 29 March 1989 are SET ASIDE. . J. respondents. REYNALDO J. The claim of SanMig that the action below is for damages under Articles 19. No. To allow the action filed below to prosper would bring about "split jurisdiction" which is obnoxious to the orderly administration of justice (Philippine Communications. Angara. Concepcion. Those contending interests must be placed in proper perspective and equilibrium.. cases arising from any violation of Article 265 of this Code. Electronics and Electricity Workers Federation vs. docketed as NCMB-NCR-NS-01-02189 and NCMB-NCR-NS-01-093-83. the dispositive portion of which reads. including questions involving the legality of striker and lockouts. 24 SCRA 321). G.R. 1992 issued by public respondent Labor Arbiter Reynaldo J. The Writ of Prohibition is GRANTED and respondent Judge is enjoined from taking any further action in Civil Case No. 809" in RAB VI Case No. However. 1994 HAWAIIAN-PHILIPPINE COMPANY. WHEREFORE." Article 217 lays down the plain command of the law. and peaceful concerted activities. the rights of all workers to self-organization. Regional Arbitration Branch No. BIDIN. VI.. We recognize the proprietary right of SanMig to exercise an inherent management prerogative and its best business judgment to determine whether it should contract out the performance of some of its work to independent contractors. 106231 November 16.A. 1987 Constitution) equally call for recognition and protection. Labor Arbiter. GULMATICO. That claim for damages is interwoven with a labor dispute existing between the parties and would have to be ventilated before the administrative machinery established for the expeditious settlement of those disputes. Abella. in part: WHEREFORE. 29 July 1968. Manlapao. 06-07-10256-89. Hon. including the right to strike in accordance with law (Section 3. 1989 and the supplement thereto dated September 19. petitioner. Gulmatico denying petitioner's motion for "Claims on R. L-24984.. The status quo ante declaration of strike ordered by the Court on 24 May 1989 shall be observed pending the proceedings in the National Conciliation Mediation Board-Department of Labor and Employment. collective bargaining and negotiations. vs. Ymballa and Chaves for private respondent.
59) The antecedent facts are as follows: On July 4. The distribution of the share corresponding to the laborers shall be made under the supervision of the Department of Labor. otherwise known as the Sugar Act of 1952. the National Federation of Sugar Workers-Food and General Trades (NFSW-FGT) filed RAB VI Case No. to wit: Sec. In addition to the benefits granted by the Minimum Wage Law. 06-07-10256-89 against herein petitioner HawaiianPhilippine Company for claims under Republic Act 809 (The Sugar Act of 1952)." On December 20. Narciso Vasquez." followed by a "Supplemental Motion to Dismiss" on September 19. Bienvenido Gulmatico. Ramon Jison.A 809. and that respondent union has no cause of action against petitioner. 1990 and Francisco Jison dated September 20. respondent union filed an "Opposition to Motion to Dismiss. it is provided. On August 23. 1990. 1989. respondent union filed an amended complaint additionally impleading as complainants Efren Elaco." On October 3. are hereby DENIED. one of the respondents impleaded in the amended complaint. Petitioner contended that public respondent Labor Arbiter has no jurisdiction to entertain and resolve the case. petitioner filed a "Motion to Dismiss. Alberto Amacio. and as respondents. 1989." praying for the inclusion as co- . filed a "Motion to Dismiss and/or to Include Necessary Parties. p. 1990. Ramon Jison. xxx xxx xxx (Rollo.together with the motion to dismiss filed by respondent Ramon Jison dated August 27. Francisco Jison and all other sugar planters milling their canes with petitioner from 1979 up to the present. Jose Maria Regalado. Under Section 9 of R. 1989. xxx xxx xxx (Emphasis supplied. Respondent union claimed that the sugar farm workers within petitioner's milling district have never availed of the benefits due them under the law.1989. 1989. the proceeds of any increase in participation granted to planters under this Act and above their present share shall be divided between the planter and his laborers in the following proportions. petitioner applied a "Reply to Opposition" followed by a "Citation of Authorities in Support of Motion to Dismiss. respondent union. Sixty per centum of the increase participation for the laborers and forty per centum for the planters. respectively. Rodolfo Gamboa. 9. On August 27. Rolly Hernaez. 1989.) On July 31. Mario Casociano and all the other farm workers of the sugar planters milling with petitioner from 1979 up to the present.
and the second. whether or not accompanied with a claim for reinstatement. Termination disputes. Unfair labor practice cases.respondents of the Asociacion de Hacenderos de Silan-Saravia. Inc. involving an amount exceeding Five Thousand Pesos (P5. (Emphasis supplies) In support of the contention that the Labor Arbiter has no jurisdiction to hear and decide the case against petitioner. and the Associate Planters of Silay-Saravia. exemplary and other forms of damages arising from employer-employee relations. Cases arising from any violation of Article 264 of this Code. — (a) Except as otherwise provided under this Code. the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide. Petitioner contends that the complaint filed against it cannot be categorized under any of the cases falling within the jurisdiction of the Labor Arbiter as enumerated in Article 217 of the Labor Code. 5. Except claims for employees' compensation. within thirty (30) calendar days after the submission of the case by the parties for decision without extension. the following cases involving all workers. Jurisdiction of Labor Arbiters and the Commission. whether respondent union and/or the farm workers represented by it have a cause of action against petitioner.00). social security. NLRC. medicare from maternity benefits. the latter cites the ruling in San Miguel Corporation vs. 2. 217. and 6. considering that no employer-employee relationship exists between petitioner milling company and the farm workers represented by respondent union. including questions involving the legality of strikes and lockouts. Claims for actual. 1992. whether agricultural or non-agricultural: 1.000. 3. even in the absence of stenographic notes. If accompanied with a claim for reinstatement. as amended. those cases that workers may file involving wages. Petitioner reasserts the two lesson earlier raised in its Motion to Dismiss which public respondent unfavorably resolved in the assailed Order. this petition filed by Hawaiian-Philippine Company. public respondent promulgated the assailed Order denying petitioner's Motion to Dismiss and Supplemental Motion to Dismiss. Inc. moral. including those of persons in domestic or household service. all other claims arising from employer-employee relations. rates of pay. whether public respondent Labor Arbiter has jurisdiction to hear and decide the case against petitioner. Article 217 of the Labor Code provides: Art. On June 29. hours of work and other terms and conditions of employment. These two issues are first. 4. wherein it was held that a single unifying element runs through the cases and disputes falling . 161 SCRA 719 . Hence.
to bolster its contention. the laborers and the Department of Labor. . . . . .under the jurisdiction of the Labor Arbiter and that is that all the enumerated cases and disputes arise out of or are in connection with an employer-employee relationship. Under no principle of law or equity can we impose on the central . Likewise. Payment subject to supervision. Under no principle of law or equity can we impose on the Central — here VICTORIAS any liability to the respective plantation laborers. under Letter of Instruction No. 809 was categorically ruled upon in the Federation of Free Farmers case. . petitioner contends that it is not a proper party and has no involvement in the case filed by respondent union as it is not the employer of the respondent sugar workers. (Emphasis supplied) In addition. or some aspect or incident of such relationship. it is but reasonable to maintain that if any blame is to be fixed for the unfortunate situation of the unpaid laborers. 854 dated May 1. it is provided: 1. After all. any liability to the plantation laborers. this Court held that: . the matter of paying the plantation laborers of the respective planters becomes exclusively the concern of the planters. (Emphasis supplied) . . . should any of their respective planters-employers fail to pay their legal share.. petitioner cites the Rules and Regulations Implementing RA 809 issued by the then Wage Administration Service pursuant to the Administrative Order of the Labor Secretary dated October 1. . since they had their own laborers to take care of. the centrals have never had any privity with the plantation laborers. . . in Federation of Free Farmers vs. Nowhere in Republic Act 809 (the Sugar Act of 1952) can we find anything that creates any relationship between the laborers of the planters and the centrals. but surely never on the central. Furthermore. Section 1 thereof states: Sec. 1979. supra. . From the beginning of the sugar industry.A. . . the same should principally be laid on the planters and secondarily on the Department of Labor. Court of Appeals. . 1. (Emphasis supplied) On the strength of the aforecited authorities. 107 SCRA 411 . to wit: . . . since under the law it is the Department of Labor which is the office directly called upon to supervise such payment. The payment of the proceeds derived from the sixty per centum of any increase in the participation due the laborers shall be directly paid to the individual laborer concerned at the end of each milling season by his respective planter under the Supervision of the Secretary of Labor or his duly authorized representative by means of payrolls prepared by said planter. 1952. The workers' share shall be paid directly by the planter concerned to the workers or claimants entitled thereto subject to the supervision of the Minister of Labor or his duly designated representative. Whatever liability there exists between favor of the plantation laborers should be pinned on the PLANTERS. their respective employers. . . The responsibility for the payment of the sugar workers' benefits under R.
which would be tantamount to tolerating the splitting of a cause of action. the Solicitor General notes. In view of these observations. . the language of the Act does not in any manner make the central the insurer on behalf of the plantation laborers that the latter's respective employers-planters would pay them their share. correctly agreed with petitioner's contention that while the jurisdiction over controversies involving agricultural workers has been transferred from the Court of Agrarian Relations to the Labor Arbiters under the Labor Code as amended. The Solicitor General. the claimant must show that he has a legal right and the respondent a correlative duty in respect thereof. it is clear that there is no employer-employee relationship between petitioner milling company and respondent union and/or its members-workers. Accordingly. as enunciated in Federation of Free Farmers. We find for petitioner. 854. . Varela. public respondent did not dispute or was silent about. the same must be resolved in the negative. public respondent and respondent union maintain the position that privity exists between petitioner and the sugar workers. supra. in order that the workers would not have to litigate their claim separately. The dispute or controversy must still fall under one of the cases enumerated under Article 217 of the Labor Code. Once this has been done. . the planters' share in the proportion stipulated in the milling contract which would necessarily include the portion of 60% pertaining to the laborers. the said transferred jurisdiction is however. (Emphasis supplied) . Nowhere in Republic Act No. . In the instant case. To have a cause of action. . 809 and Section 1 of LOI 845 as aforequoted. the old practice of the centrals issuing the quedans to the respective PLANTERS for their share of the proceeds of milled sugar per their milling contracts has not been altered or modified. . public respondent held that petitioner should still be included in this case as an indispensable party without which a full determination of this case would not be obtained. a fact which. . arise out of or are in connection with an employer-employee relationship. like PLANTERS herein. in resolving petitioner's Motion to Dismiss.On the other hand. in its adverse Comment.A. petitioner did not first ascertain whether the shares of all workers or claimants were fully paid/covered pursuant to LOI No. Anent the issue of whether respondent union and/or its members-workers have a cause of action against petitioner. In the case at bar. not without limitations. which the latter violated by some wrongful act or omission (Marquez vs. the inevitable conclusion is that public respondent is without jurisdiction to hear and decide the case with respect to petitioner. 373 ). public respondent. and that petitioner did not have the necessary certification from the Department of Labor attesting to such fact of delivery. . Absent the jurisdictional requisite of an employer-employee relationship between petitioner and private respondent. skirted the issue of whether an employer-employee relationship indeed exists between petitioner milling company and the sugar workers. the central is already out of the picture. Consequently. 92 Phil. to wit: . . 809 can we find anything that creates any relationship between the laborers of the planters and the centrals. Under the terms of said Act. . In other words. . and not of the milling company/sugar central. which cases. like VICTORIAS. Actually. would show that the payment of the workers' share is a liability of the plantersemployers. . as ruled in San Miguel. supra. the only obligation of the centrals (under Section 9 of the Act). a simple reading of Section 9 of R.. We thus reiterate Our ruling on this matter. . He did not categorically rule thereon but instead relied on the observation that when petitioner delivered to its planters the quedans representing its share. is to give to the respective planters. public respondent subscribed to the possibility that petitioner may still have a liability vis-a-vis the workers' share..
And even assuming for the sake of argument that public respondent's conclusions are true. . public respondent relies on petitioners' lack of certification from the Department of Labor of its delivery of the planters' shares as evidence of an alleged "conspicuous display of concerted conspiracy between the respondent sugar central (petitioner) and its adherent planters to deprive the workers or claimants of their shares in the increase in participation of the adherent planters. Public respondent's contention that petitioner is an indispensable party is not supported by the applicable provisions of the Rules of Court. the petition is GRANTED. he is not without legal remedies to enforce his rights. In this case however. thereby raising the presumption that no actionable violation has been committed. BENJAMIN GABAT. 06-07-10256-89 with respect to herein petitioner Hawaiian-Philippine Company and to PROCEED WITH DISPATCH in resolving the said case. L-56431 January 19. premises considered. In Its Own Right And In Behalf Of CBTC EMPLOYEES Affiliated With It. petitioner has fulfilled its part and has nothing more to do with the subsequent distribution by the planters of the workers' share. Consequently. indispensable parties are "parties in interest" without whom no final determination of the action can be obtained. In such case. Furthermore. The Solicitor General correctly postulates that the planters cannot legally set up the said defense since the payment of the workers' share is a direct obligation of the planters to their workers that cannot be shifted to the miller/central. CBTC EMPLOYEES UNION. In Its Own Right And Interest And In Behalf Of All CBTC Rank And File Employees Including Its Members. 1988 NATIONAL UNION OF BANK EMPLOYEES. WHEREFORE. giving rise to multiplicity of suits. If indeed the planter did not receive his just and due share from the miller. Rule 6 of the Rules of Court. Any act or omission involving the legal right of the workers to said shares may be acted upon by the Labor Secretary either motu proprio or at the instance of the workers. upon whom authority is vested under RA 809 to supervise the payment of the workers' shares. G. In this case. The proper recourse against a reneging miller or central is for the planter to implead the former not as an indispensable party but as a third party defendant under Section 12. No. 56) The assertion is based on factual conclusions which have yet to be proved. herein petitioner milling company would be a proper third party dependent because it is directly liable to the planters (the original defendants) for all or part of the workers' claim. no such action has been brought by the subject workers. it is disputed that petitioner milling company has already distributed to its planters their respective shares. Gulmatico is hereby ORDERED to DISMISS RAB VI Case No. the Solicitor General notes that there is nothing in RA 809 which suggests directly or indirectly that the obligation of the planter to pay the workers' share is dependent upon his receipt from the miller of his own share. the planters involved in this controversy have not filed any complaint of such a nature against petitioner. petitioner cannot be deemed as a party in interest since there is no privity or legal obligation linking it to respondent union and/or its members-workers. thereby lending credence to the conclusion that petitioner has fulfilled its part vis-a-vis its obligation under RA 809. Under Section 7.In the case at bar. In order to further justify petitioner's compulsory joinder as a party to this case. respondent union's and/or its workers' recourse lies with the Secretary of Labor. Rule 3 thereof." (Rollo. Public respondent Reynaldo J.R. p. However. Public respondent is concerned that the respondent planters may easily put up the defense that the workers' share is with petitioner milling company. SO ORDERED.
in that CBTC had taken undue advantage of its own employees. 52. with an automatic renewal clause until the parties execute a new agreement. Among other things. a national labor organization. entered into a collective bargaining agreement with the Commercial Bank and Trust Company Union.. 1980. and DEOGRACIAS A. MARQUEZ. MANUEL J. the union went to the then Court of First Instance of Manila. SALVADOR LISING. J. the Commercial Bank and Trust Company. xxx xxx xxx . JUDGE ALFREDO M. PACIS. FERNANDO. interests and benefits thereunder. vs. As a consequence. damages. respondents. ENRIQUE ZOBEL. ELICITA GAMBOA. presided over by the respondent Judge. SARMIENTO. BANK OF THE PHILIPPINE ISLANDS. petitioners. By arranging for the termination of the CURRENT CBA in the manner above described. and an affiliated local of the National Union of Bank Employees. the complaint charged: xxx xxx xxx 51. The following day. FAUSTINO TEVES. together with the National Union of Bank Employees. AYALA CORPORATION. CFI-MANILA BRANCH XXXV. 1980. and preliminary injunction against the private respondents. LAZARO. and the consequent destruction to existing rights. The agreement was effective until June 30. when it was under a statutory duty to disclose and bargain on the effects thereof. COMMERCLKL BANK AND TRUST COMPANY OF THE PHILIPPINES. and NESTOR DE LOS SANTOS. On July 1. In entering in to such arrangement for the termination of the CURRENT CBA. The antecedent facts are not disputed. submitted to the bank management proposals for the renegotiation of a new collective bargaining agreement.CBTC is liable for wilful injury to the contract and property rights thereunder as provided in Article 2220 of the Civil Code of the Philippines. THE HON. according to law. the bank suspended negotiations with the union. ALBERTO VILLA-ABRILLE. another Philippine banking institution. On May 20. on a complaint for specific performance. however.: The sole issue in this special civil action for certiorari is whether or not the courts may take cognizance of claims for damages arising from a labor controversy. CBTC committed breach of said contract in bad faith. VICENTE A. representing the rank and file of the bank with a membership of over one thousand employees. 1977. the union. which assumed all assets and liabilities thereof. by concealing and hiding the negotiations towards an agreement on the sales and merger. The bank had meanwhile entered into a merger with the Bank of the Philippine Islands.BIENVENIDO MORALEDA. JR. a Philippine banking institution.
were all actuated by a dishonest purpose to secure an undue advantage. dismissing the case for lack of jurisdiction. as well as a subsequent one denying reconsideration. for abuse of its rights. of lack of jurisdiction of the court. contriving and effecting the above arrangements for the attainment of its dishonest purpose. All the other defendants have actively cooperated with and abetted the CBTC and its defendant officers in negotiating. restrain or coerce employees in the exercise of their right to selforganization. According to the court. as well as the BANK OF P. jurisdiction over which is vested in the labor arbiter. is now alleged as having been issued 'in excess of his jurisdiction amounting to a grave abuse of discretion. and thereby pushed personnel costs upwards. it shall be an unfair labor practice: (a) To interfere with. it was to avoid having to face higher compensation rates of CBTC employees in the course of integration and merger which could force the upgrading of the benefit package for the personnel of the merged operations. 1 xxx xxx xxx Predictably. the respondent Judge issued an order. wanton attitude. the CBTC and its defendant officials. and on the part of the BANKOF P. which would substantially lessen and diminish the profitability of the sale.54. and its defendant officials. wilfully causing loss or injury to plaintiffs in a manner that is contrary to law. as correctly held by the respondent court. the collective participation therein evinces machination. morals.I. xxx xxx xxx (g) To violate the duty to bargain collectively as prescribed by this Code. and oppressive intent. xxx xxx xxx . on the part of the CBTC it was to avoid fresh and additional contractual commitments. the complaint partook of an unfair labor practice dispute notwithstanding the incidental claim for damages. 55. The claim against the Bank of Philippine Islands — the principal respondent according to the petitioners — for allegedly inducing the Commercial Bank and Trust Company to violate the existing collective bargaining agreement in the process of re-negotiation.I. good customs and public policy. and for taking undue advantage of its very own employees." We sustain the dismissal of the case. in violation of Articles 21 and 28 of the Civil Code. bad faith. On November 26. which is. through shadow bargaining. substantial outlays and costs thereby entailed were all deftly avoided and evaded. calculated delay. deceit. suspension of negotiations. the private respondents moved for the dismissal of the case on the ground. through the expedient of deliberate curtailment and suppression of contractual bargaining rights. concealment of bargainable issues and highhanded dictation. essentially. an unfair labor practice controversy within the original and exclusive jurisdiction of the labor arbiters and the exclusive appellate jurisdiction of the National Labor Relations Commission. This order.. 1980. In virtually suppressing the collective bargaining rights of plaintiffs under the law and as provided in the CURRENT CBA. consists mainly of the civil aspect of the unfair labor practice charge referred to under Article 247 2 of the Labor Code. Under Article 248 3 of the Labor Code. through the secret sale and scheduled merger.
It is for this reason that civil actions found to be intertwined with or arising out of. In Cebu Portland Cement Co. 4 The petitioners' claimed injury as a consequence of the tort allegedly committed by the private respondents. such fact of course being established by sufficient proof. The civil implications thereof do not defeat its nature as a fundamental labor offense. In Associated Labor Union v. In other words. never the courts. Since it involves collective bargaining — whether or not it involved an accompanying violation of the Civil Code — it may rightly be categorized as an unfair labor practice. the damages (allegedly) suffered by the petitioners only form part of the civil component of the injury arising from the unfair labor practice. 5 does not necessarily give the courts jurisdiction to try the damage suit. specifically. moreover. has vested such a jurisdiction upon the labor arbiters. Presidential Decree No. It is the existence of a controversy that properly falls within the exclusive jurisdiction of the Industrial Court and to which the civil action is linked or connected that removes said civil case from the competence of the regular courts. It thus commands adherence. 9 we held: xxx xxx xxx There is no merit in the allegation. not breach." 8 cannot bestow on the respondent court the jurisdiction it does not have. 10 xxx xxx xxx .The act complained of is broad enough to embrace either provision. under Article 1314 of the Civil Code. v. even if the cases were commenced ahead of the unfair labor practice proceeding. it is not filing of an unfair labor case in the Industrial Court that divests the court of first instance jurisdiction over actions properly belonging to the former. Gomez. 7 we said: A rule buttressed upon statute and reason that is frequently reiterated in jurisprudence is that labor cases involving unfair practice are within the exclusive jurisdiction of the CIR. it must be remembered that jurisdiction is conferred by law. as amended by Batas Blg. therefore. For the court of first instance to lose authority to pass upon a case. "the civil aspects of all cases involving unfair labor practices. this rule has ripened into dogma. a jurisdiction the courts may not assume. it is not determined by the existence of an action in another tribunal. and jurisdiction to restrain picketing was decreed to belong to the Court of Industrial Relations although no unfair labor practice case has as yet been instituted. which may include claims for damages and other affirmative relief. In the first place. Jurisdiction over unfair labor practice cases. 70. belongs generally to the labor department of the government. Cement Workers' Union. a dispute exclusively cognizable by the Court of Industrial Relations were dismissed. for which it "cannot be sued for unfair labor practice at the time of the action. the Bank of the Philippine Islands. The fact that the Bank of the Philippine Islands is not a party to the collective bargaining agreement. By now. As we stated. it is enough that unfair labor practice case is in fact involved in or attached to the action. Under Article 247 of the Code. Civil controversies are not the exclusive domain of the courts. Jurisdiction is conferred by law 6 and not necessarily by the nature of the action. shall be under the jurisdiction of the labor arbiters. In the case at bar. 442.
this Court. "To hold otherwise. May 29. which is prejudicial to the orderly administration of justice'. February 22." Then. stressed that to rule that such demand for damages is to be passed upon by the regular courts of justice. 1691. v. Cruz ([L-28978. Calderon has since lost its persuasive force. speaking for the Court. as the case may be. [L-28621. The latest case in point. SUAREZ. 19 SCRA 304] the exclusive jurisdiction of the Court of Industrial Relations in disputes of this character was upheld. Neither does the fact that the Bank of the Philippine Islands "was not an employer at the time the act was committed' abate a recourse to the labor arbiter. under the Corporation Code: xxx xxx xxx 5. with the opinions coming from the same distinguished jurist. Canada Dry Bottling Co. 14 and AGUSAN DEL NORTE ELECTRIC COOP. 13 EBON v. beginning with our ruling in PEPSI-COLA BOTTLING COMPANY v. instead of leaving the matter to the Court of Industrial Relations. INC. to hold that the alleged tortious act now attributed to the Bank of the Philippine Islands may be the subject of a separate suit is to sanction split jurisdiction long recognized to be an offense against the orderly administration of justice. the public respondent has not acted with grave abuse of discretion. Justice Sanchez. "is to sanction split jurisdiction-which is obnoxious to the orderly administration of justice. action or proceeding pending by or against any of such constituent corporations may be prosecuted by or against the surviving or consolidated corporation. MARTINEZ. as noted at the outset. It should be noted indeed that the Bank of the Philippine Islands assumed "all the assets and liabilities" 16 of the Commercial Bank and Trust Company. 17 xxx xxx xxx In sum. Atlas Consolidated Mining and Development Corporation [L-27585. No costs. . Apostol: 11 xxx xxx xxx As far back as Associated Labor Union vs. Thereafter. Moreover. Reyes. The surviving or consolidated corporation shall be responsible and liable for all the liabilities and obligations of each of the constituent corporations in the same manner as if such surviving or consolidated corporation had itself incurred such liabilities or obligations. Court of Appeals 12 is not well-taken. WHEREFORE. 15 and following the promulgation of Presidential Decree No. in the cases of Leoquinco vs. adhered to such a doctrine. February 9.Furthermore. 37 SCRA 535] and Associated Labor Union v. and any claim. Justice J. DE GUZMAN. restoring the jurisdiction to decide money claims unto the labor arbiters. in Progressive Labor Association vs." as succinctly stated by the ponente.. 1971. 1971. Neither the rights of creditors nor any lien upon the property of any of such constituent corporations shall be impaired by such merger or consolidation. October 5. 33 SCRA 349] decided three years later. Gomez [L-25999.L. 1970. 1976. 73 SCRA 297]. the petition is DISMISSED. As stated in Nolganza v. September 22.B. is the Goodrich Employees Association decision [L-30211. 'would be to sanction split jurisdiction. 41 SCRA 12]. xxx xxx xxx The petitioners' reliance upon Calderon v. 1967.
. secretary. after obtaining control of the majority stock of the bank by buying the shares of Marcelino Maximo. 1983. on July 2. respectively.R. In his complaint and position paper.. denied the charge of illegal dismissal. and that the Board's action was taken to protect the interest of the bank and was "designed as an internal 5 control measure to secure the check and balance of authority within the organization. 2 On August 3. The complaint was amended on September 22. relieving him as bank manager. the Board. ZOSIMO DY. that after its illegal constitution. 1983. a banking institution duly organized under Philippine laws. said Board convened on July 2. vs. vice-president. Said private respondent. J. and additional causes of action for underpayment of salary and non-payment of living allowance. that his dismissal was motivated by Lorenzo Dy's desire to take over the management and control of the bank. Lorenzo Dy. Marcelino C. providing for the election by the entire membership of the Board of the executive officers of the bank. NATIONAL LABOR RELATIONS COMMISSION AND EXECUTIVE LABOR ARBITER ALBERTO L. a special stockholders' meeting was called for the purpose of electing the members of the bank's Board of Directors. William Ibero and Ricardo Garcia were elected president.: Petitioners assail in this Court the resolution of the National Labor Relations Commission (NLRC) dismissing their appeal from the decision of 1 the Executive Labor Arbiter in Cebu City which found private respondent to have been illegally dismissed by them. DY. passed Resolution No. On June 4. Vailoces. without giving him the opportunity to be heard first.G. He was also a director and stockholder of the bank. WILLIAM IBERO. RICARDO GARCIA AND RURAL BANK OF AYUNGON. Vailoces was not re-elected 3 as bank manager. Ricardo Garcia and the Rural Bank of Ayungon. Immediately after the election the new Board proceeded to elect the bank's executive officers. No. and he was not re-elected as bank manager because of the Board's loss of confidence in him brought about by his absenteeism and negligence in the performance of his duties. in that board meeting of June 4. Because of this development. VAILOCES. i. Vailoces filed a complaint for illegal dismissal and damages with the Ministry of Labor and Employment against Lorenzo Dy and Zosimo Dy. 5. 1986 LORENZO C. 1983. AND CARLITO H." The Executive Labor Arbiter found that Vailoces was: (a) Illegally dismissed. Vailoces asserted that Lorenzo Dy.. was the manager of the Rural Bank of Ayungon (Negros Oriental). vice-president and corporate secretary. They pointed out that Vailoces' position was an elective one. et al. not to mention the fact that he (Dy) harbored ill feelings against Vailoces on account of the latter's filing of a complaint for violation of the corporation code 4 against him and another complaint for compulsory recognition of natural child with damages against Zosimo Dy. petitioners Lorenzo Dy. called an illegal stockholders' meeting and elected a Board of Directors controlled by him. 1983. but of the resentment of petitioners against Vailoces which arose from the latter's filing of the . cashier and bank manager. Maximo and Ramon Barrameda for petitioners. 1983 to include additional respondents-William Ibero. 1983 and passed a resolution dismissing him as manager. DALMACION. Carlito H. petitioners. first not because of absenteeism and negligence. respondents. Sr. Pursuant to Article IV of the bank's by-laws. In their answer.e. Vailoces for private respondent. the president. series of 1983. L-68544 October 27. NARVASA. SR. INC. Sr. Carlito H.
and for violation of the corporation code against Lorenzo Dy. Elesteria on January 11. It ruled that: The record shows that a copy of the decision sent by registered mail to respondents' counsel. assigning error to the decision of the Labor Arbiter on various grounds. 1984 a certain Atty. Francisco Zerna.. (b) Not paid his cost of living allowance. Ramon Elesteria himself in his affidavit. Ramon Elesteria. 1984. The appeal was filed only on February 17. the same is admitted by no less than Atty. 1983). his actual receipt thereof completes the service. The NLRC. appealed to the NLRC. Edmund Tubio. to: (a) Pay Vailoces jointly and severally. 1983 the validity of which is seriously doubted. This fact is corroborated by the certification issued by the Postmaster of Dumaguete City. . plus cost-of-living allowance.. it is therefore our opinion that the appeal herein was filed out of time.480. instead of which he simply abandoned the work he was supposed to perform up to the effective date of his relief. because neither lawyer was authorized to accept service for their counsel Atty. 1984 by a certain Atty. because he was not afforded the due process of law when he was dismissed during the Board meeting of July 2. Atty. however bypassed the issues raised and simply dismissed the appeal for having been filed late. with additional backwages from December 1. the sum of P111. moral and exemplary damages. for this reason. Considering that it was a law partner of the respondents' counsel who received on January 11. .60 representing his salary differentials. a new lawyer engaged by the respondents for the appeal. was received on January 11. petitioners assail said ruling as an arbitrary deprivation of their right to appeal through unreasonable adherence to procedural technicality. and.. since the respondents received another copy of the decision on January 30. Sr. And even assuming that such was not a valid service. and (c) Underpaid with only P500 monthly salary. 1984. . through their newly engaged counsel. cost of living allowances. It further appears in the record that on January 30. we can not give due course to his appeal. 1984 the registered letter. and consequently ordered the individual petitioners — Lorenzo Dy and Zosimo Dy-but not the Bank itself. 1983). Zerna on January 30.00 r month until he is actually reinstated.. Elesteria or Atty. and (b) Reinstate Vailoces to his position as bank manager. and attorney's fees. Zerna. Tubio. a law office partner of Atty. 6 Lorenzo Dy. 1983 on the adjusted salary rate of P620..cases for recognition as natural child against Zosimo Dy. and second. and that the matter of his relief was 7 within the adjudicatory powers of the Securities and Exchange Commission. 1984. 1984 or by Atty. They argue that they should not be bound by the service of the Labor Arbiter's decision by Atty. whether the time is reckoned from the receipt by Atty. et al. 8 In this Court. back wages from date of dismissal up to the date of the decision (November 29. received a copy of the decision in this case as certified by Julia Pepito in an affidavit subscribed before the Senior Labor Arbitration Specialist. that he nonetheless had the opportunity to refute the charges against him and seek a formal investigation because he received a copy of the minutes of said meeting while he was still the bank manager (his removal was to take effect only on August 15. among them: that Vailoces was not entitled to notice of the Board meeting of July 2.. 1983 which decreed his relief because he was no longer a member of the Board on said date. Moreover.
1981 of the three directors was in contravention of the PSBA By-Laws providing that any vacancy in the Board shall be filled by a majority vote of the stockholders at a meeting specially called for the purpose. Basically. and that the damages awarded are exorbitant and oppressive. has jurisdiction: 12 this Court. explicitly declared to be within the original and exclusive jurisdiction of the Securities and Exchange Commission. . by not re-electing him to the position of manager. Thus. and that their 10 day period of appeal should be counted from February 10. that it was error to impose the obligation to pay damages upon the individual petitioners. While the comment of Vailoces traverses the averments of the petition. 1981 was tainted with irregularity on account of the presence of illegally elected directors without whom the results could have been different. and at the ensuing election of officers. confronted with a It was at a Board regular monthly meeting held on August 1. namely: (c) Controversies in the election or appointments of directors. (c). of Presidential Decree No. partnerships or associations. were validly held. On the merits.Tubio. par. No. This is the crux of the question that Tan has raised before the SEC. the Board meeting on September 5. it was at the regular Board meeting of September 5. The correctness of d conclusion is not for us to pass upon in this case. par. So much so. Tan was not reelected as Executive Vice-President. 10 1979. Leaño. The case thus falls squarely within the purview of Section 5. in effect caused termination of his services. 1981. the SEC (Case No. the issue of jurisdiction is decisive and renders unnecessary consideration of the other questions raised. the question is whether the election of directors on August 1. not the NLRC. that three directors were elected to fill vacancies. 902-A. 1981 and the election of officers on September 5. Tan alleged that the election on August 1. in his position paper submitted to the Labor Arbiter. 1981. There is no dispute that the position from which private respondent Vailoces claims to have been illegally dismissed is an elective corporate office. 1981 that all corporate positions were declared vacant in order to effect a reorganization. trustees. 1983 which. and recommends that the 9 questioned resolution of the NLRC as well as the decision of the Labor Arbiter be set aside as null and void. (c). Even in his position paper before the NLRC. 1984 when they actually received the copy of the decision from Atty. officers or managers of such corporations. In PSBA vs. Zerna. 902-A just cited. he concludes. ruled that the Securities and Exchange Commission. Tan invoked the same allegations in his complaint filed with the SEC. And. Tan was present at said meeting and again sought the issuance of injunctive relief from the SEC. which was Vailoces' real employer. they assert that the Arbiter's finding of illegal dismissal was without evidentiary basis. And when Vailoces. He lost that position because the Board that was elected in the special stockholders' meeting of June 4. similar controversy. he made it clear that at the heart of the matter was the validity of the directors' meeting of June 4. that on December 17. In truth. 1981. that of the Solicitor General on behalf of public respondents perceives the matter as an intracorporate controversy of the class described in Section 5. He himself acquired that position through election by the bank's Board of Directors at the organizational meeting of November 17. impugned said stockholders' meeting as illegally convoked and the 11 Board of Directors thereby elected as illegally constituted. 2145) rendered a Partial Decision annulling the election of the three directors and ordered the convening of a stockholders' meeting for the purpose of electing new members of the Board. therefore. instead of the Rural Bank of Ayungon. 1983 did not re-elect him. which resulted in Tan's failure to be re-elected.
in Calimlim vs. officers or managers of the PSBA. The matter of whom to elect is a prerogative that belongs to the Board. Private respondent also contends that his "ouster" was a scheme to intimidate him into selling his shares and to deprive him of his just and fair return on his investment as a stockholder received through his salary and allowances as Executive Vice-President. its officers or partners. The exceptional circumstances involved in Sibonghanoy which justified the departure from the accepted concept of nonwaivability of objection to jurisdiction has been ignored and. It is well settled that the decision of a tribunal not vested with appropriate jurisdiction is 13 null and void. between any of all of them and the corporation. however. instead a blanket doctrine had been repeatedly upheld that rendered the supposed ruling . Although rather off handedly. and between such corporation.. More importantly. Thus. Ramirez. partnership or association of which they are stockholders. but by the incidents of the relationship as they actually exist.The foregoing indubitably show that. and of Tan's not having been elected thereafter. amounting to fraud and misrepresentation) which may be detrimental to the interest of the public and/or of the stockholders. partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity. officers or managers of such corporations. whether as officer or as agent or employee. members of associations or organizations registered with the Commission. which has been apparent on the face of the pleadings since the start of litigation before the Labor Arbiter. these matters fall within the jurisdiction of the SEC. The lack of jurisdiction of a court may be raised at any stage of the proceedings. but the dismissal of the appeal for alleged tardiness effectively precluded consideration of that or any other question raised in the appeal. Respondent Vailoces' invocation of estoppel as against petitioners with respect to the issue of jurisdiction is unavailing. Presidential Decree No. business associates. of the board of directors. it is not quite correct to state that petitioners did not raise the point in the lower tribunal. c) Controversies in the election or appointments of directors. It is to be regretted. Generally speaking.. This doctrine has been qualified by recent pronouncements which stemmed principally from the ruling in the cited case of Sibonghanoy. estoppel cannot be invoked to prevent this Court from taking up the question of jurisdiction. trustees. It revolves around the election of directors. and involves the exercise of deliberate choice and the faculty of discriminative selection. this Court held: A rule that had been settled by unquestioned acceptance and upheld in decisions so numerous to cite is that the jurisdiction of a court over the subject matter of the action is a matter of law and may not be conferred by consent or agreement of the parties. Original and exclusive jurisdiction to hear and decide cases involving: a) Devices or schemes employed by or any acts. This is not a case of dismissal. the controversy is intracorporate in nature. in their appeal to the NLRC they called attention to the Labor Arbiter's lack of jurisdiction to rule on the validity of the meeting of July 2. members or associates. Vis-a-vis the NLRC. The situation is that of a corporate office having been declared vacant. respectively. that the holding in said case had been applied to situations which were obviously not contemplated therein. even on appeal. partners. is not determined by the nature of the services performed. In the first place. b) Controversies arising out of intracorporate or partnership relations. and between them and the corporation. partnership or associations. 902-A vests in the Securities and Exchange Commission: . fundamentally. 1983. the relationship of a person to corporation. members or associates. between and among stockholders. the relation between and among its stockholders.
11 Phil. any act or omission of the parties (Lagman vs.' (Section 2. The failure of the appellees to invoke anew the aforementioned solid ground of want of jurisdiction of the lower court in this appeal should not prevent this Tribunal to take up that issue as the lack of jurisdiction of the lower court is apparent upon the face of the record and it is fundamental that a court of justice could only validly act upon a cause of action or subject matter of a case over which it has jurisdiction and said jurisdiction is one conferred only by law. Under the rules. The question of remuneration.. vs.. thereby lulling the parties into believing that they pursued their remedies in the correct forum. Rules of Court) Should the Court render a judgment without jurisdiction. The same thing is true with estoppel by conduct which may be asserted only when it is shown. xxx xxx xxx It is neither fair nor legal to bind a party by the result of a suit or proceeding which was taken cognizance of in a court which lacks jurisdiction over the same irrespective of the attendant circumstances. petitioners failed to raise the issue of jurisdiction in their petition before this Court. But this. it might be said. and cannot be acquired through. it is the duty of the court to dismiss an action 'whenever it appears that court has no jurisdiction over the subject matter. 14 CA. The amended complaint for illegal dismissal. of the corporation. etc. It is of no moment that Vailoces. These considerations make inevitable the conclusion that the judgment of the Labor Arbiter and the resolution of the NLRC are void for lack of cause of jurisdiction. intimately linked with his relations with the corporation. such act may not at once be deemed sufficient basis of estoppel. WHEREFORE. an integral part. virtually overthrowing altogether the time-honored principle that the issue of jurisdiction is not lost by waiver or by estoppel. 203 ). or waived by. but rather the general rule. The equitable defense of estoppel requires knowledge or consciousness of the facts upon which it is based . within ten (10) years from the finality of the same (Art. hence may be considered by this court motu proprio (Gov't. American Surety Co.. Civil Code). that the representation must have been made with knowledge of the facts and that the party to whom it was made is ignorant of the truth of the matter (De Castro vs. and is in fact a corporate controversy in contemplation of the Corporation Code. The filing of an action or suit in a court that does not possess jurisdiction to entertain the same may not be presumed to be deliberate and intended to secure a ruling which could later be annulled if not favorable to the party who filed such suit or proceeding in a court that lacks jurisdiction to take cognizance of the same. It could have been the result of an honest mistake or of divergent interpretation of doubtful legal provisions.in Sibonghanoy not as the exception. a person who is not a mere employee but a stockholder and officer. 30. is not a simple labor problem but a matter that comes within the area of corporate affairs and management.. such judgment may be impeached or annulled for lack of jurisdiction (Sec. and this Court must set matters aright in the exercise of its judicial power. in his amended complaint. . involving as it does. 3. par. basis of said decision and Resolution. Ibid). If any fault is to be imputed to a party taking such course of action. To be sure. hence. seeks other relief which would seemingly fan under the jurisdiction of the Labor Arbiter. Gineta. 27 SCRA 623). too. 44 SCRA 234 ). among others. because a closer look at these-underpayment of salary and non-payment of living allowance-shows that they are actually part of the perquisites of his elective position. Rule 9. is no hindrance to the Court's considering said issue. part of the blame should be placed on the court which shall entertain the suit. 1144. Rule 132. the questioned decision of the Labor Arbiter and the Resolution of the NLRC dismissing petitioners' appeal from said decision are hereby set aside because rendered without jurisdiction.
was registered with the Social Security System (SSS) as an employee of petitioner Corporation. MOVILLA. and MARTIN LU. who died during the pendency of the action with the Labor Arbiter. 1994. ELLEN LU CARABUENA.: Robert L. dated May 30. during petitioner corporation's annual meeting of stockholders. JR. he was promoted to the position of Administrative Officer with a monthly salary of P4. Lu and Ernesto L. G. recorded as receiving a fixed salary of P4. under Registry Number 74691. who was a Certified Public Accountant during his lifetime. Lucita Lu Carabuena. without prejudice to private respondent's seeking recourse in the appropriate forum. JONARD ELLERY C. vs.is ordered dismissed. 3 He occupied the said position up to the time of his death.respondents. are the surviving heirs of complainant. Martin G.. Petitioners' motion for reconsideration of the NLRC decision was denied in a Resolution. JR. the following were elected members of the Board of Directors. and/or LUCITA LU CARABUENA.. Thereafter. JUDE BRIX C. and THE HONORABLE COMMISSIONER of the NATIONAL LABOR RELATIONS COMMISSION-5TH DIVISION. CARABUENA. MOVILLA. 1977. Carabuena. Medicare and Employees Compensation Commission (ECC) were deducted from his monthly earnings by his said employer. surviving heirs of ERNESTO MOVILLA. an organizational meeting was held and the Board of Directors elected Ernesto Movilla as Administrative Manager. in NLRC-CA No. J. 1995 MAINLAND CONSTRUCTION. Movilla. . SO ORDERED. Inc. ERNESTO MOVILLA. having been issued a certificate of registration by the Securities and Exchange Commission (SEC) on July 26. M-000949-92 for having been rendered with grave abuse of discretion amounting to lack of jurisdiction. This reversed the decision of the Labor Arbiter in case No. 1994. 1987. No. MILA JUDITH C. QUIMBO. Ellen L. AND MAILA JONAH M. 1 Ernesto Movilla.700.R.700. Its principal line of business is the general construction of roads and bridges and the operation of a service shop for the maintenance of equipment.: Petitioners urge this Court to set aside the Decision of the National Labor Relations Commission (NLRC).. was hired as such by Mainland in 1977. dated August 31. 118088 November 23. His contributions to the SSS. Records show that Ernesto Movilla. Carabuena. Respondents on the other hand. ROBERT L. On the same day. is a domestic corporation.. INC. MOVILLA. viz. CO. Ernesto Movilla. petitioners. RAB-11-10-99883-91. MILA MOVILLA.00.. Mainland Construction Co. duly organized and existing under Philippine laws. 2 On April 12.00 a month. HERMOSISIMA.
The dispositive portion of the NLRC decision reads: WHEREFORE. Non-payment of holiday pay and service incentive leave pay. 3. petitioner corporation was ordered by DOLE to pay to its thirteen employees. February 24. Leano. the Department of Labor and Employment (DOLE) conducted a routine inspection on petitioner corporation and found that it committed such irregularities in the conduct of its business as: 1. Davao City. Underpayment of wages under R. et al.R. and Ellen. with the consent of the Labor Arbiter. et al. Specifically.A. 5 Aggrieved by this decision. private respondents herein.R. No. L-68544..435. Dy et al. et al.89. service incentive leave pay differentials. Robert. pursuant to P. dismissing the complaint on the ground of lack of jurisdiction. 1986). Unpaid 13th month pay (remaining balance for 1990).R. NLRC. The NLRC ruled that the issue in the case was one which involved a labor dispute between an employee and petitioner corporation and. respondents appealed to the National Labor Relations Commission (NLRC). and 5. The Labor Arbiter rendered judgment on June 26. NLRC. January 24. 902-A (Phil. No. RTWPB-XI-02.. 6727 and RTWPB-XI-01. 79762. unpaid wages and 13th month pay.D. Ernesto Movilla filed a case against petitioner corporation and/or Lucita. G. representing their salaries. G. Unpaid wages for 1989 and 1990. 1991. thus. 1984. G. the NLRC had jurisdiction to resolve the case. All the employees listed in the DOLE's order were paid by petitioner corporation. Ernesto Movilla died while the case was being tried by the Labor Arbiter and was promptly substituted by his heirs. except Ernesto Movilla. October 27. (Fortune Cement Corporation v. separation pay and attorney's fees. On October 8. Branch XI. School of Business Administration. 4. the assailed decision is Reversed and Set Aside. 1991. What Movilla is claiming against respondents are his alleged unpaid salaries and separation pay as Administrative Manager of the corporation for which position he was appointed by the Board of Directors. L-58468. the controversy presented by complainant is intracorporate in nature and is within the jurisdiction of the Securities and Exchange Commission. holiday pay. the total amount of P309. 1992. On February 29.On April 2. v. for unpaid wages. but a matter that comes within the area of corporate affairs and management. v. 1991). the Labor Arbiter made the following ratiocination: It is clear that in the case at bar. 2. Regional Arbitration. Non-implementation of Wage Order No. Respondents are ordered to pay the heirs of complainant the following: . 1992. 4 On the basis of this finding. No. His claims therefore fall under the jurisdiction of the Securities and Exchange Commission because this is not a simple labor problem. and is in fact a corporate controversy in contemplation of the Corporation Code. with the Department of Labor and Employment. which included Movilla. all surnamed Carabuena.
It relates to an employer-employee relationship which is distinct from the corporate relationship of one with the other. Moreover. In order that the SEC can take cognizance of a case.000. We find for the respondents. It does not involve an intra-corporate matter. A Premium Certification issued by an authorized representative of petitioners was also presented to show his actual monthly earnings as well as his monthly . and d) among the stockholders. partners. there was no showing of any change in the duties being performed by complainant as an Administrative Officer and as an Administrative Manager after his election by the Board of Directors. Indemnity in the sum of P3. partnership or association and its stockholders. the controversy as to his compensation is within the jurisdiction of the SEC as mandated by P. since Ernesto Movilla was a corporate officer. the controversy must pertain to any of the following relationships: a) between the corporation. Project Engineer and Personnel-InCharge. Moral damages in the sum of P10. permit or license to operate is concerned. 902-A and not with the NLRC. Separation pay in the sum of P65. the claim for unpaid wages and separation pay filed by the complainant against petitioner corporation involves a labor dispute. Indeed. partnership or association and the State as far as its franchise. and. 7 The fact that the parties involved in the controversy are all stockholders or that the parties involved are the stockholders and the corporation does not necessarily place the dispute within the ambit of the jurisdiction of SEC.D. separation pay and attorney's fees on the ground of lack of jurisdiction. Unpaid salaries from January 1989 to September 1991 in the sum of P155. attesting that they personally knew Movilla and that he was employed in the company. 5.00. What comes to the fore is whether there was a change in the nature of his functions and not merely the nomenclature or title given to his job. members or officers. Ernesto Movilla worked as an administrative officer of the company for several years and was given a fixed salary every month. Furthermore. it does not necessarily follow that every conflict between the corporation and its stockholders would involve such corporate matters as only the SEC can resolve in the exercise of its adjudicatory or quasi-judicial powers. Petitioners take the position that. the SEC will not have jurisdiction. it appearing that petitioners' contention is bereft of merit.000.100.1. c) between the corporation. of petitioner corporation. Malubay and Delia S. 6 The pivotal issue in this case is which of the two agencies of the government — the NLRC or the SEC — has jurisdiction over the controversy. partners or associates themselves. partnership or association and the public. 9 In the case at bench.00. As we stated earlier. 2.00. it is of course the contention of petitioners that the NLRC committed grave abuse of discretion when it nullified the decision of the Labor Arbiter which dismissed the complaint of Movilla for unpaid wages. b) between the corporation.00. The better policy to be followed in determining jurisdiction over a case should be to consider concurrent factors such as the status or relationship of the parties or the nature of the question that is the subject of their controversy. 3. 8 In the absence of any one of these factors.800. Luciano. even when it is between a stockholder and a corporation. 4. To further sustain this assertion Movilla also submitted a joint affidavit executed by Juanito S. respectively. Attorney's fees equivalent to 10% of the total award.
As correctly ruled by the NLRC: The claims for unpaid salaries/monetary benefits and separation pay. the petition is DISMISSED for lack of showing of any grave abuse of discretion on the part of public respondent NLRC. although a director of a corporation is not. it is the NLRC. 15 Since Ernesto Movilla's complaint involves a labor dispute. 10 Movilla's registration in the SSS by petitioner corporation added strength to the conclusion that he was petitioner corporation's employee as coverage by the said law is predicated on the existence of an employer-employee relationship. February 20. . under Article 217 of the Labor Code of the Philippines. he was not both given responsibilities and paid his salaries for the succeeding months . and worse. 14 Moreover. If complainant is not an employee. CLARITA T.R. respondent. 13 Hence. . It is pertinent to note that petitioner corporation is not prohibited from hiring its corporate officers to perform services under a circumstance which will make him an employee. appearing to be relevant to the issue. [G.: .contributions to the SSS. . What they did was to exclude complainant from the order of payment . Medicare and ECC. which has jurisdiction over the case at bench. said director may act as an employee or accept duties that make him also an employee. 12 The existence of an employer-employee relationship is a factual question and public respondent's findings are accorded great weight and respect as the same are supported by substantial evidence. are not a corporate conflict as respondents presented them to be. DECISION GONZAGA-REYES. . Medicare and ECC. WHEREFORE. vs. its employee. The assailed decision of public respondent is thus AFFIRMED. No. petitioner corporation failed to present evidence which showed that. . 11 Furthermore. he was excluded from the coverage of the SSS. the result of the investigation conducted by DOLE which found that petitioner corporation has transgressed several labor standard laws against its employees. petitioner. 2001] PRUDENTIAL BANK and TRUST COMPANY. respondent should have contested the DOLE inspection report. This is a clear case of constructive dismissal without due process . . J. REYES. we uphold the conclusion of public respondent that Ernesto Movilla was an employee of petitioner corporation. . after his election as Administrative Manager. merely by virtue of his position. 141093. He also presented. SO ORDERED.
the Bank appealed to the NLRC which. judgment was rendered by Labor Arbiter Cornelio L. dated October 15. a petition for certiorari before the Supreme Court. In lieu of reinstatement. however. which is a complaint for illegal suspension and illegal dismissal with prayer for moral and exemplary damages. 30607 and of its Resolution. in the amount of P420.).00 (P15. tasked with the duties.‖ Not satisfied. among others. Martin Funeral Homes vs.Before the Court is a petition for review on certiorari of the Decision.000.R. Aggrieved. 1998.000. to collect checks drawn against overseas banks payable in foreign currency and to ensure the collection of foreign bills or checks purchased. fringe benefits and attorney‘s fees filed by Clarita Tan Reyes against Prudential Bank and Trust Company (the Bank) before the labor arbiter.A. After proceedings duly undertaken by the parties. 1999 denying petitioner‘s motion for re consideration of said decision. Prior to her dismissal. reversed the Labor Arbiter‘s decision in its Resolution dated 24 March 1997. private respondent commenced on October 28.  The subject petition was referred to the Court of Appeals for appropriate action and disposition per resolution of this Court dated November 25. The Court of Appeals reversed and set aside the resolution  of the National Labor Relations Commission (NLRC) in NLRC NCR CA No. NLRC. the Court of Appeals adopted the following antecedent facts leading to Reyes‘s dismissal as summarized by the NLRC: . 1998. reversing and setting aside the labor arbiter’ s decision and dismissing for lack of merit private respondent‘s complaint. Private respondent sought reconsideration which. including the signing of transmittal letters covering the same.00 x 36 mos.-G.000. The case stems from NLRC NCR Case No. In its assailed decision. the respondent is also ordered to pay complainant separation pay equivalent to one month salary for every year of service. dated December 6. gratuity. finding the dismissal of complainant to be without factual and legal basis. SO ORDERED. Attorney‘s fees equivalent to ten (10%) percent of the total award should likewise be paid by respondent. the respondent should also pay complainant profit sharing and unpaid fringe benefits. 009364-95. In addition. Linsangan. the dispositive portion of which reads: ―WHEREFORE. 00-06-03462-92.000 x 28 mos. in accordance with the ruling in St. was denied by the NLRC in its Resolution of 28 July 1998. SP No. private respondent Reyes held the position of Assistant Vice President in the foreign department of the Bank.).00 (P15. as mentioned at the outset. judgment is hereby rendered ordering the respondent bank to pay her back wages for three (3) years in the amount of P540. 1999 of the Court of Appeals in C.
The Committee‘s findings were: ‗a) The two (2) HSBC checks were received by the Foreign Department on 6 April 1989. complainant stated that in view of the refusal of the Bank that she be furnished copies of the pertinent documents she is requesting and the refusal to grant her a reasonable period to prepare her answer. No. TSN. On March 8. complainant requested for an extension of one week to submit her explanation. the president of the Bank issued a memorandum to the complainant informing her of the findings of the auditors and asked her to give her side. 011730-7232-146. 011728-7232-146. 42-52). 1991.102. complainant authorized the crediting of the account of Filipinas Tyrom in the amount of P4. complainant instructed her to withdraw the same for the purpose of changing the addressee thereon from American Express Bank to Bank of Hawaii (ibid. the Committee proceeded with its hearings and heard the testimonies of several witnesses. In reply. in the amount of US$109. The Bank created a committee to investigate the findings of the auditors involving the two checks which were not collected and became stale.00.650.780. in favor of Filipinas Tyrom. 1989. a transmittal letter was prepared by Ms. On the following day. as it is complainant who gives her instructions directly concerning the transmittal of foreign bills purchased. were not sent out for collection to Hongkong Shanghai Banking Corporation on the alleged order of the complainant until the said checks became stale. b) After Ms. received by the Bank on April 6. and No. 1991.000. pp. 11 March 1993.70 corresponding to the face value of the checks. . 1991. in the amount of US$115.00. Singapore. dated March 14. 22 to 22-A and 23 to 23-A). she was constrained to make a general denial of any misfeasance or malfeasance on her part and asked that a formal investigation be made. for the purpose of sending out the two (2) HSBC checks for collection. Joven delivered the transmittal letters and the checks to the Accounting Section of the Foreign Department. to the president.―The auditors of the Bank discovered that two checks. On the same day. As the complainant failed to attend and participate in the formal investigation conducted by the Committee on May 24. Cecilia Joven. In a subsequent letter. a remittance clerk then assigned in the Foreign Department. Jurong Branch. 7 and 25. All other transmittal letters are in fact signed by complainant.) under a special collection scheme (Exhibits 4 and 5 to 5-B). drawn by the Sanford Trading against Hongkong and Shanghai Banking Corporation. (Exhibits 6. She then requested complainant to sign the said transmittal letters (Exhibits 1. despite due notice.
pp. d) In June 1989. Mr. were turned over to another remittance clerk. Ms. Thus. has found the following: . however. (See Exhibits 5 to 5-B). Joven to just hold on to the letters and checks and await further instructions (ibid. responsibilities and functions. including the responsibility over the two (2) HSBC checks. 42). Magno‘s advice from her superior. Renato Santos and falsely informed the latter that Atty. g) Complainant. Ms. the said checks were discovered in the course of an audit conducted by the Bank‘s auditors. p. Castillo about the two (2) HSBC checks. the Fact Finding Committee which was created to investigate the commission and/or omission of the acts alluded therein. TSN. 1991. f) About fifteen (15) months after the HSBC checks were received by the Bank. e) When asked by Ms. 1991. Pablo Magno. deliberately withheld Atty. advised complainant to send the checks for collection despite the lapse of fifteen (15) months.‘ After a review of the Committee‘s findings.). 4 June 1993. Atty. Joven was transferred to another department. the new transmittal letters remained unsigned. 4 June 1993. TSN. Joven then returned to complainant for the latter to sign the new transmittal letters. 27-29). thereby further delaying the collection of the HSBC checks. h) On 10 July 1990. Hence. Santos. the Board of Directors of the Bank resolved not to re-elect complainant any longer to the position of assistant president pursuant to the Bank‘s By-laws. but were returned on 16 July 1990 for the reason ‗account closed‘ (Exhibits 2 -A and 3-A). Analisa Castillo (Exhibit 14. in a letter the text of which is quoted in full: ‗Dear Mrs. On July 19. the HSBC checks were finally sent for collection. Reyes: After a thorough investigation and appreciation of the charges against you as contained in the Memorandum of the President dated March 8. Joven relayed to the latter complainant‘s instruction (Exhibit 14. Magno advised that a demand letter be sent instead. complainant told Ms. Ms. complainant was informed of her termination of employment from the Bank by Senior Vice President Benedicto L. However. Ms. the Senior Vice-President.c) After complying with complainant‘s instruction. her duties. the Bank‘s legal counsel.
You tried to influence the decision of Atty. In view thereof. accordingly. Accordingly. you even relayed a false advice which delayed further the sending of the two checks for collection. 2. You deliberately withheld from Mr.650. Furthermore. These findings have given rise to the Bank‘s loss of trust and confidence in you. the vice president and the auditors of the Bank. had been credited with their peso equivalent. She further alleged that she was not afforded due process as she was not given the chance to refute the charges mentioned in the letter of dismissal. by asking him to do something allegedly upon instructions of a Senior Vice President of the Bank or else lose his job when in truth and in fact no such instructions was given. In view thereof. respondent argues that there were substantial bases for the Bank to lose its trust and confidence on the complainant and. your services are terminated effective immediately. Bank legal counsel. Senior Vice President.‖ . when the said checks were finally sent to clearing after the lapse of 15 months from receipt of said checks. the advice given by the legal counsel of the Bank which Mr. In relation thereto. such filing not being a valid ground for her dismissal. and 3. As a matter of fact. you refused to heed the advice of the Bank‘s legal counsel to send the checks for collection. Hence.‘ In her position paper. the value of said checks have not been paid by Filipinas Tyrom. Santos had asked you to seek. the Board has resolved not to re-elect you to the position of Assistant Vice President of the Bank. they were returned for the reason ‗Account closed.1. You have deliberately held the clearing of Checks Nos. she alleged that it would be self-serving for the respondent to state that she was found guilty of gross misconduct in deliberately withholding the clearing of the two dollar checks. which as payee of the checks.‘ To date. she was illegally dismissed. complainant is liable to pay moral and exemplary damages and attorney‘s fees. for filing the clearly unfounded suit against the respondent‗s officers. the same being acts of serious misconduct in the performance of your duties resulting in monetary loss to the Bank.00 by giving instructions to the collection clerk not to send the checks for collection. had just cause for terminating her services. complainant alleged that the real reason for her dismissal was her filing of the criminal cases against the bank president. Pablo P. your monetary and retirement benefits are forfeited except those that have vested in you. On the other hand. 11728 and 11730 of Hongkong and Shanghai Banking Corporation in the total amount of US$224. Likewise. Moreover. Magno. Santos.
II. EVEN ASSUMING ARGUENDO THAT THE NLRC HAS JURISDICTION. the decision appealed from is hereby REVERSED and SET ASIDE. and 3. 1991 up to the finality of this judgment. To pay petitioner separation pay equivalent to one (1) month salary for every year of service in lieu of reinstatement. judgment is hereby rendered ordering respondent Bank as follows: 1. the Bank‘s recourse to this Court contending in its memorandum that: ―IN SETTING ASIDE THE DECISION DATED 24 MARCH 1997 AND THE RESOLUTION DATED 28 JULY 1998 OF THE NLRC AND REINSTATING WITH MODIFICATION THE DECISION DATED 20 JULY 1995 OF LABOR ARBITER CORNELIO L. To pay petitioner full backwages and other benefits from July 19. LINSANGAN.‖ Hence. In effect. IN VIEW OF THE FOLLOWING: I. in the light of the foregoing. the Court of Appeals reinstated the judgment of the labor arbiter with modification as follows: ―WHEREFORE. THE HONORABLE COURT OF APPEALS ERRED IN AWARDING UNLIMITED AND UNQUALIFIED BACKWAGES THEREBY GOING FAR BEYOND THE LABOR ARBITER‘S DECISION LIMITING THE . SO ORDERED. IT IS THE SEC (NOW THE REGIONAL TRIAL COURT) AND NOT THE NLRC WHICH HAS ORIGINAL AND EXCLUSIVE JURISDICTION OVER CASES INVOLVING THE REMOVAL FROM OFFICE OF CORPORATE OFFICERS. 2. III. THERE WAS SUBSTANTIAL EVIDENCE OF RESPONDENT‘S MISCONDUCT JUSTIFYING THE BANK‘S LOSS OF TRUST AND CONFIDENCE ON (sic) HER. In lieu thereof. EVEN ASSUMING ARGUENDO THAT RESPONDENT WAS ENTITLED TO BACKWAGES. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED.The Court of Appeals found that the NLRC committed grave abuse of discretion in ruling that the dismissal of Reyes is valid. To pay attorney‘s fee equivalent to ten (10%) percent of the total award.
the principle of estoppel lies. it never questioned the proceedings on the ground of lack of jurisdiction.SAME TO THREE YEARS. petitioner seeks refuge behind the argument that the dispute is an intra-corporate controversy concerning as it does the non-election of private respondent to the position of Assistant Vice-President of the Bank which falls under the exclusive and original jurisdiction of the Securities and Exchange Commission (now the Regional Trial Court) under Section 5 of Presidential Decree No. petitioner Bank has consistently asserted in all its pleadings at all stages of the proceedings that respondent held the position of Assistant Vice President. It was only when the Court of Appeals ruled in favor of private respondent did it raise the issue of jurisdiction. an elective position under the corporate by-laws and her non-election is an intracorporate controversy cognizable by the SEC invoking lengthily a number of this Court‘s decisions. the NLRC and the Court of Appeals. and (3) whether the amount of back wages awarded was proper. and attacking it for lack of jurisdiction when adverse. the bank said nothing about jurisdiction. the resolution of this petition hinges on (1) whether the NLRC has jurisdiction over the complaint for illegal dismissal. is most enlightening. In this regard. When the decision of the Labor Arbiter was adverse to it. On the first issue. Here. When the NLRC decided in its favor. (2) whether complainant Reyes was illegally dismissed. an elective position which she held by virtue of her having been elected as . The Bank actively participated in the proceedings before the Labor Arbiter.‖ In sum. 902A. this rule presupposes that laches or estoppel has not supervened. More specifically. It filed its position paper with the Labor Arbiter. the Bank also contends that estoppel cannot lie considering that ―from the beginning. petitioner contends that complainant is a corporate officer. a party may be estopped or barred from raising the question of jurisdiction for the first time in a petition before the Supreme Court when it failed to do so in the early stages of the proceedings. Petitioner Bank can no longer raise the issue of jurisdiction under the principle of estoppel. Hence. Bañaga vs. WHICH DECISION RESPONDENT HERSELF SOUGHT TO EXECUTE. only if favorable. Even before the Court of Appeals. the Bank appealed to the NLRC. The Bank participated in the proceedings from start to finish. Commission on the Settlement of Land Problems. The Court therein stated: ―This Court has time and again frowned upon the undesirable practice of a party submitting his case for decision and then accepting the judgment.‖ Undeterred. While it is true that jurisdiction over the subject matter of a case may be raised at any time of the proceedings.
On this point. This brings us to the second issue wherein the Bank insists that it has presented substantial evidence to prove the breach of trust on the part of private respondent warranting her dismissal. the Court of Appeals disagreed and set aside the findings of the NLRC that Reyes deliberately withheld the release of the two dollar checks. Then in 1982. as will be discussed later.‖ As Assistant Vice-President of the Foreign Department of the Bank she performs tasks integral to the operations of the bank and her length of service with the bank totaling 28 years speaks volumes of her status as a regular employee of the bank. The Bank insists that private respondent was elected Assistant Vice President sometime in 1990 to serve as such for only one year. to no avail. 1991. not because of the mode or even the reason for hiring them. to wit: . she is entitled to security of tenure.Additionally. it is no wonder then that the Bank endeavored to the very end to establish loss of trust and confidence and serious misconduct on the part of private respondent but. This being in truth a case of illegal dismissal. she was appointed Assistant Vice-President which she occupied until her illegal dismissal on July 19. It appears that private respondent was appointed Accounting Clerk by the Bank on July 14. and that she was dismissed based on loss of trust and confidence. As earlier stated. In fine. including the signing of transmittal letters covering the same. We quote pertinent portions of the decision. she is tasked. that she is guilty of conflict of interest that she waived her right to due process for not attending the hearing.such by the Board of Directors. her services may be terminated only for a just or authorized cause. such an assertion was made only in the appeal to the NLRC and raised again before the Court of Appeals.‖ As far as the records before this Cour t reveal however. 1963. ―an employee is regular because of the nature of work and the length of service. The bank‘s contention that she merely holds an elective position and that in effect she is not a regular employee is belied by the nature of her work and her length of service with the Bank. not for purposes of questioning jurisdiction but to establish that private respondent‘s tenure was subject to the discretion of the Bo ard of Directors and that her non-reelection was a mere expiration of her term. that is. It has been stated that ―the primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. she rose from the ranks and has been employed with the Bank since 1963 until the termination of her employment in 1991. to collect checks drawn against overseas banks payable in foreign currency and to ensure the collection of foreign bills or checks purchased. As Assistant Vice President of the foreign department of the Bank. among others. This argument will not do either and must be rejected. From that position she rose to become supervisor. as a regular employee.
the same should be respected by appellate tribunals since he is in a better position to assess and evaluate the credibility of the contending parties (Ala Mode Garments. vs. In this regard. thus: This Office has repeatedly gone over the records of the case and painstakingly examined the testimonies of respondent bank‘s witnesses. respondent Bank failed to adduce convincing evidence to prove bad faith and malice. However. NLRC. Jocson. Analiza Castillo. the Court quotes with approval the following disquisition of Labor Arbiter Linsangan. The right of an employer to dismiss employees on the ground that it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause. supra) will rise or fall on the credibility of Miss Joven who undisputedly is the star witness for the bank. Respondent Bank‘s charge of deliberate withholding of the two dollar checks finds no support in the testimony of Atty. THIRD. the rule that proof beyond reasonable doubt is not required to terminate an employee on the charge of loss of confidence and that it is sufficient that there is some basis for such loss of confidence. that is: she was instructed by complainant to hold the release of subject . Settled is the rule that when the conclusions of the Labor Arbiter are sufficiently substantiated by the evidence on record. NLRC. 186-187.650. Rollo). is not absolute. the court must adopt the testimony which it believes to be true (U. and must be founded on clearly established facts sufficient to warrant the employee‘s separation from work (Labor vs. It bears emphasizing that respondent Bank‘s witnesses merely corroborate Joven‘s testimony.00 falls short of the requisite proof to warrant petitioner‘s dismissal. For loss of trust and confidence to be valid ground for an employee‘s dismissal. Losada. Joven. On cross examination. it must be substantial and not arbitrary. 25-J. Chairman of the Investigating Committee. Jocson testified that the documents themselves do not show any direct withholding (pp. Atty. Inc.―FIRST: Respondent Bank heavily relied on the testimony and affidavit of Remittance Clerk Joven in trying to establish loss of confidence. Joven‘s allegation that petitioner instructed her to hold the subject two dollar checks amounting to $224. 90). There being conflict in the statement of witnesses. 248 SCRA 183). vs. Upon this point. SECOND. Except for Joven‘s bare assertion to withhold the dollar checks per petitioner‘s instruction. 268 SCRA 497). One thing was clearly established: that the legality of complainant‘s dismissal based on the first ground stated in respondent‘s letter of termination (exh. 18 Phil. It will be observed that the testimonies of the bank‘s other witnesses. Dante Castor and Antonio Ragasa pertaining to the non-release of the dollar checks and their corresponding transmittal letters were all anchored on what was told them by Ms.S.
if carried out. Joven is more credible. will greatly prejudice her employer bank. Reyes. Ms. In this regard.m. ―14‖. then a Processing Clerk in the Foreign Department of Prudential Bank. . The evidence shows that it was only on 16 May 1990 that Ms. she said the same should be held as per instruction of Mrs. Joven broke her silence on the matter despite the fact that on 15 November 1989. Clarita Tan Reyes and I were in the residence of one Ms. Castillo the former contented herself by continuously not taking any action on the two dollar checks. the complainant. Joven and respondent‘s other witnesses this Office finds the evidence still wanting in proof of complainant‘s guilt. 1989 at about 7:00 o‘clock in the evening. Cecille Joven. On the other hand. Moreover. Mrs. In the first place. therefore. complainant went to the residence of Ms. When complainant was informed by Mr. It was incumbent upon Ms. the said instruction constitutes a gross violation of the bank‘s standard operating procedure.‘ (Exh. accompanied by driver Celestino Banito. Joven‘s allegation even deepens as we consider the fact that when the non-release of the checks was discovered by Ms. Joven even impliedly told by Ms. Castillo regarding the non-release of the checks sometime in November. Castillo said: ‗4. Celestino Bonito. It took Ms. 1989 she immediately reported the matter to Vice President Santos. at about 8:00 p. Joven to confront her. Castor and Ms. the issue boils down to who between complainant and Ms. And as earlier mentioned.checks. Joven in that her non-release of the dollar checks was upon the instruction of complainant Reyes is extremely doubtful. As to what prompted her to make her letter of explanation was not even mentioned. the actions taken by the complainant were spontaneous. Worse. Castillo (sic) to ignore the two checks and just withhold their release. When I asked Cecille Joven what I was supposed to do with those checks. if same was really given to her by complainant. Joven was fully aware that the instruction. thus: ‗1. In a nutshell. stated in his affidavit. Ms. went to her residence and confronted her regarding the non-release of the dollar checks. In her affidavit Ms. The allegation of Ms. complainant‘s driver. supra). Joven while testifying on the witness stand and was not impressed by her assertions. After painstakingly examining the testimonies of Ms. Joven not only to disobey the instruction but even to report the matter to management. Head of the Foreign Department. This Office had closely observed the demeanor of Ms. Our doubt on the veracity of Ms. Joven eighteen (18) months before she explained her side on the controversy. Sometime on November 15.
and Mrs. Ms. And it took the bank another four (4) months before it dismissed complainant. she was not even reprimanded by the bank.2. Cecille Joven turned pale and was not able to answer. The non-release of the dollar checks was reported to top management sometime on 15 November 1989 when complainant. 5. including legal representation. Hesitatingly. And yet. 4. myself. Respondent Bank having failed to furnish petitioner necessary documents imputing loss of confidence. It clearly appears from the foregoing that the complainant herein has no knowledge of. upon hearing those words. how it came about that the two dollar checks which she was then holding with the transmittal letters. Ms.‖ . The delayed action taken by respondent against complainant lends credence to the assertion of the latter that her dismissal was a mere retaliation to the criminal complaints she filed against the bank‘s top officials. was surprised and she said: ―Ano. Joven is solely responsible for the same. reported the matter to Vice President Santos. 3. Ms. the non-release of the dollar checks under discussion. Clarita Tan Reyes were seated in the sala when the latter asked the former. Cecille Joven said: ―Eh. FOURTH. Mrs. were found in a plastic envelope kept day-to-day by the former. Mother (Mrs. Due process dictates that management accord the employees every kind of assistance to enable him to prepare adequately for his defense. Clarita Tan Reyes. Cecille Joven. petitioner was not amply afforded opportunity to prepare an intelligent answer. Incidentally. her mother. much less participation in. it was only on 08 March 1991. that complainant was issued a memorandum directing her to submit an explanation. Cecille Joven. The Court finds nothing confidential in the auditor‘s report and the affidavit of Transmittal Clerk Joven. Mrs. papaano mong alam na bouncing na hindi mo pa pinadadala. Tan Reyes had been intimately called Mother in the Bank) akala ko bouncing checks yon mga yon.‘ There are other factors that constrain this Office to doubt even more the legality of complainant‘s dismissal based on the first ground stated in the letter of dismissal. after a lapse of sixteen (16) months from the time the non-release of the checks was reported to the Vice President. the Court finds it irrelevant to the charge. accompanied by Supervisor Dante Castor and Analiza Castillo. The issue of conflict of interest not having been covered by the investigation.
and attorney‘s fees equivalent to ten (10%) percent of the total award. in the main. Since reinstatement is no longer viable. Considering that private respondent was terminated on July 19. This Court is not a trier of facts and will not weigh anew the evidence already passed upon by the Court of Appeals. . resort to a judicial review of the decisions of the National Labor Relations Commission in a petition for certiorari under Rule 65 of Rules of Court is confined to issues of want or excess of jurisdiction and grave abuse of discretion. Joven and we defer to the findings of the Labor Arbiter as confirmed and adopted by the Court of Appeals on the credibility of said witness. Employees illegally dismissed prior to the effectivity of Republic Act No. 1991. as a rule.  Lastly. she is also entitled to separation pay equivalent to one (1) month salary for every year of service. the Court of Appeals found that the NLRC gravely abused its discretion in finding that the private respondent‘s dismissal was valid and so reversed the same. 1991 up to the finality of this judgment. is from the time of her illegal dismissal) up to the finality of this judgment (instead of reinstatement) considering that reinstatement is no longer feasible as correctly pointed out by the Court of Appeals on account of the strained relations brought about by the litigation in this case. the appellate court awarded backwages in accordance with current jurisprudence. jurisprudence is clear on the amount of backwages recoverable in cases of illegal dismissal. It must be stressed that private respondent filed a special civil action for certiorari to review the decision of the NLRC and not an ordinary appeal.  On the other hand. The charge was predicated on the testimony of Ms. An ordinary appeal is distinguished from the remedy of certiorari under Rule 65 of the Revised Rules of Court in that in ordinary appeals it is settled that a party who did not appeal cannot seek affirmative relief other than the ones granted in the decision of the court below. In the instant case. 6715 on March 21.We uphold the findings of the Court of Appeals that the dismissal of private respondent on the ground of loss of trust and confidence was without basis. On the third issue. she is entitled to full backwages from the time her actual compensation was withheld from her (which. separation pay equivalent to one (1) month salary for every year of service in lieu of reinstatement. that private respondent is not entitled to full backwages in view of the fact that she did not bother to appeal that portion of the labor arbiter‘s judgment awarding back wages limited to three years. Indeed. since private respondent was compelled to file an action for illegal dismissal with the labor arbiter. Corollary to the foregoing. while those illegally dismissed after are granted full backwages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was withheld from them up to the time of their actual reinstatement. 1989 are entitled to backwages up to three (3) years without deduction or qualification. The Bank argues. the Bank questions the award of full backwages and other benefits from July 19.
as the Bank does here. 1999. petitioners. petitioners. vs. There is no room to argue. it was alleged that on August 21. the complaint averred inter alia that Tumala was a salesman of the company in Davao City from 1977 up to August 21. 1980.: This petition for certiorari. have unjustly refused to deliver said prize Under the second cause of action. 13494. Petitioners further alleged that Tumala was not entitled to the "Sumakwel" prize for having misled the company into declaring him top salesman for 1979 through various deceitful and fraudulent manipulations and machinations in the performance of his duties as salesman and depot in-charge . 1980. Jr.she is likewise entitled to attorney‘s fees at the rate above-mentioned. an award which entitled him to a prize of a house and lot. In any event. No. in his official capacity. the instant petition for review on certiorari is DENIED. Under the first cause of action. dated October 15. ESCOLIN. DACUYCUY. is AFFIRMED.R. against petitioners Pepsi-Cola Bottling Co. attorney's fees and litigation expenses. WHEREFORE. JR. 1982 PEPSI-COLA BOTTLING COMPANY. COSME DE ABOITIZ. Inc. "in a manner oppressive to labor" and "without prior clearance from the Ministry of Labor". Petitioners moved to dismiss the complaint on grounds of lack of jurisdiction and cause of action. 1980. prohibition and mandamus raises anew the legal question often brought to this Court: Which tribunal has exclusive jurisdiction over an action filed by an employee against his employer for recovery of unpaid salaries. jointly and severally. despite demands. respondent Abraham Tumala. He prayed that petitioners be ordered. and the assailed Decision of the Court of Appeals. He did not ask for reinstatement. that its liability should be mitigated on account of its good faith and that private respondent is not entirely blameless. 6715 clearly and plainly provides for ―full backwages‖ to illegally dismissed employees. plus moral and exemplary damages. Tumala was declared winner of the "Lapu-Lapu Award" for his performance as top salesman of the year. to deliver his prize of house and lot or its cash equivalent. SO ORDERED. JUDGE ANTONIO M. that in the annual "Sumakwel" contest conducted by the company in 1979. filed a complaint in the Court of First Instance of Davao.. Article 279 of Republic Act No. and that petitioners. its president Cosme de Aboitiz and other company officers. docketed as Civil Case No. "arbitrarily and ilegally" terminated his employment. and ABRAHAM TUMALA. HON.. G. separation benefits and damages — the court of general jurisdiction or the Labor Arbiter of the National Labor Relations Commission [NLRC]? The facts that gave rise to this petition are as follows: On September 19. and to pay his back salaries and separation benefits. respondents. L-58877 March 15. J. MARTINEZ.. There is no showing that private respondent is partly at fault or that the Bank acted in good faith in terminating an employee of twenty-eight years. and ALBERTO M.
1691 is an exact reproduction of Article 217 of the Labor Code (P. Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which organizes the court. 1976 in the Court of First Instance of Davao by a dismissed employee against his employer for actual. advance sales confirmed as fictitious. the case is exclusively cognizable by the Labor Arbiters of the National Labor Relations Commission. Martinez 3. fictitious product deals. Jurisdiction of Labor Arbiters and the Commission. Article 217. denied the motion for reconsideration.D. We held that under Article 217 of the Labor Code. separation pay and other benefits provided by law or appropriate agreement. 222 and 262 of Book V of the Labor Code are hereby amended to read as follows: Article 217. the . whether agricultural or non-agricultural: 1. and it is given only by law. and 5. 1 Jurisdiction is never presumed. Unfair labor practice cases. Under paragraphs 3 and 5 of the above Presidential Decree. including those that involve waged hours of work and other terms and conditions of employment. The court below. 442). unless expressly excluded by this Code. We rule that the Labor Arbiter has exclusive jurisdiction over the case. We find that law in Presidential Decree 1691 which took effect on May 1. except claims for employees' compensation. the issue efore Us should be resolved on the basis of the law or statute now in force. 3. moral and exemplary damages. uncollected loaned empties. 1974. All money claims of workers. fictitious collections of trade accounts. sustaining its jurisdiction over the case. Unresolved issues in collective bargaining. medicare and maternity benefits. overtime compensation. social security. Hence the present recourse." The alleged commission of these fraudulent acts was also advanced by petitioners to justify Tumala's dismissal.851.76. including those based on non-payment or underpayment of wages. It is to be noted that P. 2 Since the jurisdiction of courts and judicial tribunals is derived exclusively from the statutes of the forum. which took effect on May 1. 1980. All other claims arising from employer-employee relations. In Garcia vs. an action filed on August 2. Cases involving household services. — The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide the following cases involving all workers. which manipulations consisted of "unremitted cash collections. 2. 4. and route shortages which resulted to the damage and prejudice of the bottling company in the amount of P381.of the bottling company in Davao City. fictitious loaned empties. Section 3 of which reads as follows: SEC. 3. it must be conferred by law in words that do not admit of doubt. the law then in force.D.
upon which said decision was based. Article 217 of the Labor Code words amended by P. and 3] All other cases arising from employer-employee relations duly indorsed by the Regional Directors in accordance with the provisions of this Code. Article 217. on May 1. This Court. hours of work. however. His claim was a consequence of the termination of their employer-employee relations [Compare with Ruby Industrial Corporation vs. where We ruled that an employee's action for unpaid salaries. which is a verbatim reproduction of the original test of Article 217 of the Labor Code. except those expressly excluded therefrom. However. money or otherwise. to wit: "Provided that the Regional Directors shall not indorse and Labor Arbiters shall not en certain claims for moral or other forms of damages. 1691 restored to the Labor Arbiters their exlcusive jurisdiction over said classes of claims. restored to the Labor Arbiters of the NLRC exclusive jurisdiction over claims. 1978." This amendatory act thus divested the Labor Arbiters of their competence to pass upon claims for damages by employees against their employers. the respondent court relied on Calderon vs. 1691. 78 SCRA 499]. whether agricultural or non-agricultural: 1] Unfair labor practice cases. Court of First Instance of Manila. had already been superceded by P.D. . was amended anew by P. 2] Unresolved issues in collective bargaining. 1691.case was within the exclusive jurisdiction of the Labor Arbiters and the National Labor Relations Commission [NLRC].38893. 1367. Provided.D.D. that the Regional Directors shall not indorse and Labor Arbiters shall not entertain claims for moral or other forms of damages. Court of Appeals 4 . arising from employer-employee relations. the full text of which is quoted as follows: SECTION 1. As heretofore stated. including those which involve wages. 217 of the Labor Code as amended is hereby further amended to read as follows: [a] The Labor Arbiters shall have exclusive jurisdiction hear and decide the following cases involving all workers. Our ruling in Calderon. Paragraph [a] of Art. as amended by P.D. per Justice Aquino. which was promulgated on May 1. August 31. 1980. 1367. 1367. P. 1977.D.D. It will be noted that paragraphs 3 and 5 of Article 217 were deleted from the text of the above decree and a new provision incorporated therein. no longer applaies to this case because P. In sustaining its jurisdiction over the case at bar. This last decree. and other terms conditions of employment. L. rational this holding thus: The provisions of paragraph 3 and 5 of Article 217 are broad and comprehensive enough to cover Velasco's [employee's] claim for damages allegedly arising from his unjustified dismissal by Garcia [employer]. alowances and other reimbursable expenses and damages was beyond the periphery of the jurisdictional competence of the Labor Arbiters.
" Indeed. No. Vega's proposal was entitled "Modified Grande Pasteurization Process. petitioner. vs. Division Managers and higher-ranked personnel" who submit to the Corporation Ideas and suggestions found to be beneficial to the Corporation. independently and separately from his claim for back salaries. to hold that Tumala's claim for the prize should be passed upon by the regular court of justice. if he was not an employee of the company at the time of the holding of the contest. 5 WHEREFORE. the issue raised is not for Us to determine in this certiorari proceeding. 1988 SAN MIGUEL CORPORATION. J. unless expressly excluded by this Code. The claim for said prize unquestionably arose from an employer-employee relation and. much less won the prize.D. Petitioners content that Tumala has no cause of action to as for back salaries and damages because his dimissal was authorized by the Regional Director of the MInistry of Labor. retirement benefits and damages. Besides. Tumala would not have qualitfied for the content. NATIONAL LABOR RELATIONS COMMISSION and RUSTICO VEGA. and respondent judge is hereby directed to dismiss Civil Case No. 80774 May 31. We do not share this view. private respondent Rustico Vega submitted on 23 September 1980 an innovation proposal. therefore. The Solicitor General for public respondent. which speaks of "all claims arising from employer-employee relations. This question calls for the presentaiton of evidence and the same may well be entilated before the labor Arbiter who has jurisdiction over the case. Mr. the cause advanced by petitioners to justify their refusal to deliver the prize—the alleged fraudulent manipulations committed by Tumala in connection with his duties as salesman of the company— involves an inquiry into his actuations as an employee. FELICIANO.: In line with an Innovation Program sponsored by petitioner San Miguel Corporation ("Corporation. 5 of P. No costs." and was supposed to eliminate certain alleged defects in the quality and taste of the product "San Miguel Beer Grande:" . falls within the coverage of par. SO ORDERED. except [ED-HO staff. Siguion Reyna. Besides. is a civil controversy triable exclusively by the court of the general jurisdiction. would be to sanction split juridiction and multiplicity of suits which are prejudicial to the orderly administration of justice. Besides. The extraordinary remedy of certiorari offers only a limited form of review and its principal function is to keep an inferior tribunal within its jurisdiction. the petition is granted. without prejudice to the right of respondent Tumala to refile the same with the Labor Arbiter. 1691.. One last point. 13494. respondents. his prize as top salesman of the company for 1979.R. Montecillo & Ongsiako Law Offices for petitioner." "SMC") and under which management undertook to grant cash awards to "all SMC employees .Respondent Tumala maintains that his action for delivery of the house and lot.. G. The extraordinary remedy of certiorari proceeding.
00 (the maximum award per proposal offered under the Innovation Program) and attorney's fees. 1 Mr. did not find the aforequoted proposal acceptable and consequently refused Mr.Title of Proposal Modified Grande Pasteurization Process Present Condition or Procedure At the early stage of beer grande production." the Labor Arbiter also directed petitioner to pay Mr. Vega's subsequent demands for a cash award under the Innovation Program." . It denied ever having approved or adopted Mr. the Labor Arbiter.. Frivate respondent Vega alleged there that his proposal "[had] been accepted by the methods analyst and implemented by the Corporation [in] October 1980. On 22 February 1983. The RBF's were found to have sediments and their contents were hazy. These effects are usually caused by underpasteurization time and the pasteurzation units for beer grande were almost similar to those of the steinie. Vega's proposal as part of the Corporation's brewing procedure in the production of San Miguel Beer Grande. 3 petitioner Corporation alleged that private respondent had no cause of action. Proposed lnnovation (Attach necessary information) In order to minimize if not elienate underpasteurization of beer grande. Among other things. A counterclaim for moral and exemplary damages. Vega at that time had been in the employ of petitioner Corporation for thirteen (1 3) years and was then holding the position of "mechanic in the Bottling Department of the SMC Plant Brewery situated in Tipolo. increasing the pasteurization time and the pasteurization acts for grande beer.00 as "financial assistance. noting that the money claim of complainant Vega in this case is "not a necessary incident of his employment" and that said claim is not among those mentioned in Article 217 of the Labor Code." Private respondent thus claimed entitlement to a cash prize of P60. attorney's fees. Vega the sum of P2. a Complaint2 (docketed as Case No. several cases of beer grande full goods were received by MB as returned beer fulls (RBF). the self-life (sic) of beer grande will also be increased. Mandaue City. Ministry of Labor and Employment. Mr. and available administrative remedies provided under the rules of the Innovation Program. Petitioner Corporation. dismissed the complaint for lack of jurisdiction. In an Order 4 dated 30 April 1986." and that the same "ultimately and finally solved the problem of the Corporation in the production of Beer Grande. RAB-VII-0170-83) was filed against petitioner Corporation with Regional Arbitration Branch No. Vega having improperly bypassed the grievance machinery procedure prescribed under a then existing collective bargaining agreement between management and employees." Petitioner further alleged that the Labor Arbiter had no jurisdiction. Vega's proposal was tumed down by the company "for lack of originality" and that the same. In an Answer With Counterclaim and Position Paper. petitioner stated that Mr. however.000. and litigation expenses closed out petitioner's pleading. However.". In this way. reduce the speed of the beer grande pasteurizer thereby. in a gesture of "compassion and to show the government's concern for the workingman. "even if implemented [could not] achieve the desired result.000. VII (Cebu City) of the then.
4. order the respondent to pay the complainant the amount of P60. Cases arising from any violation of Article 265 of this. the public respondent National Labor Relations Commission. paragraph 4 (claims relating to household services. The jurisdiction of Labor Arbiters and the National Labor Relations Commission is outlined in Article 217 of the Labor Code. including those based on nonpayment or underpayment of wages. 5 the dispositive portion of which reads: WHEREFORE. social security. 217. on 4 September 1987. hours of work and other terms and conditions of employment. private respondent Vega assailing the dismissal of his complaint for lack of jurisdiction and petitioner Corporation questioning the propriety of the award of "financial assistance" to Mr. paragraph 3 should be read not in isolation from but rather within the context formed by paragraph 1 related to unfair labor practices). Vega. seeks to annul the Decision of public respondent Commission in Case No. as last amended by Batas Pambansa Blg." it is not necessary to suppose that the entire universe of money claims that might be asserted by workers against their employers has been absorbed into the original and exclusive jurisdiction of Labor Arbiters. Code. In the first place.000. Unfair labor practice cases. a particular species of employer- . (a) The Labor Arbiters shall have theoriginal and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties for decision. 3. petitioner Corporation. RAB-VII-01 70-83 upon the ground that the Labor Arbiter and the Commission have no jurisdiction over the subject matter of the case. whether agricultural or non-agricultural: 1. In the present Petition for certiorari filed on 4 December 1987. Jurisdiction of Labor Arbiters and the commission. separation pay and other benefits provided by law or appropriate agreement. medicare and maternity benefits. except claims for employees' compensation. and 5. SO ORDERED. including questions involving the legality of strikes and lockouts. (b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. All money claims of workers. paragraph 2 (relating to claims concerning terms and conditions of employment).The Labor Arbiter's order was subsequently appealed by both parties. (Emphasis supplied) While paragraph 3 above refers to "all money claims of workers. 2. invoking Article 217 of the Labor Code.00 as explained above. the following cases involving are workers. rendered a Decision. the appealed Order is hereby set aside and another udgment entered. overtime compensation. Those that workers may file involving wages. 227 which took effect on 1 June 1982: ART. Acting on the appeals. Cases involving household services.
under paragraph 5 of Article 217 of the Labor Code had jurisdiction over" all other cases arising from employer-employee relation. repair jobs on cars personally owned by him. the Labor Arbiters have no jurisdiction if the Labor Code is not involved.P. 7 the petitioner was a corporation engaged in the sale and repair of motor vehicles. Petitioner had sued private respondent for non-payment of accounts which had arisen from private respondent's own purchases of vehicles and parts. said: Before the enactment of BP Blg. v. that they all refer to cases or disputes arising out of or in connection with an employeremployee relationship. The Court. were intended by the legislative authority to be taken away from the jurisdiction of the courts and lodged with Labor Arbiters on an exclusive basis. or some aspect or incident of such relationship. is enough to bring such money claim within the original and exclusive jurisdiction of Labor Arbiters. it fell outside the jurisdiction of the court and consequently should be dismissed. while private respondent was the sales Manager of petitioner. private respondent Vega's suit against petitioner Corporation would never have arisen. 227.employee relations). Castro-Bartolome. hence. a situation where the rule of noscitur a sociis may be usefully invoked in clarifying the scope of paragraph 3. Respondent Judge did dismiss the case. in printer's ink. 227 on June 1. Inc. For it cannot be presumed that money claims of workers which do not arise out of or in connection with their employer-employee relationship. believes and so holds that the money claims of workers" referred to in paragraph 3 of Article 217 embraces money claims which arise out of or in connection with the employer-employee relationship. Blg. and paragraph 5 (relating to certain activities prohibited to employees or to employers). in other words. In Medina vs. arose out of or in connection with his employment relationship with petitioner." Even then. that money claims of workers which now fall within the original and exclusive jurisdiction of Labor Arbiters are those money claims which have some reasonable causal connection with the employer-employee relationship. as amended. as last amended by B. Without the existing employer-employee relationship between the parties here. <äre|| anº•1àw> Applying the foregoing reading to the present case. At the pre-trial in the lower court. In reversing the order of dismissal and requiring respondent Judge to take cognizance of the case below. Justice Melencio-Herrera. although a controversy is between an employer and an employee. expressly excluded by this Code. The money claim of private respondent Vega in this case. speaking through Mme. private respondent raised the question of lack of jurisdiction of the court. 11 . stating that because petitioner's complaint arose out of the employer-employee relationship. the principle followed by this Court was that. Labor Arbiters. This is. It is evident that there is a unifying element which runs through paragraphs 1 to 5 and that is. and any other paragraph of Article 217 of the Labor Code. Laron. we note that petitioner's Innovation Program is an employee incentive scheme offered and open only to employees of petitioner Corporation." 6 which clause was not expressly carried over. therefore. this Court. and which would therefore fall within the general jurisdiction of the regular courts of justice. In Molave Motor Sales. Put a little differently. and even though earlier versions of Article 217 of the Labor Code expressly brought within the jurisdiction of the Labor Arbiters and the NLRC "cases arising from employer employee relations. there would have been no occasion to consider the petitioner's Innovation Program or the submission by Mr. Vega of his proposal concerning beer grande. therefore. 1982. unless. and cash advances from the corporation. The next issue that must logically be confronted is whether the fact that the money claim of private respondent Vega arose out of or in connection with his employment relation" with petitioner Corporation. holding that the sum of money and damages sued for by the employer arose from the employer-employee relationship and. We reach the above conclusion from an examination of the terms themselves of Article 217. fell within the jurisdiction of the Labor Arbiter and the NLRC. without that relationship. more specifically to employees below the rank of manager. in Article 217 as it exists today.
but rather in the application of the general civil law. such as payment of wages. In the case below. The primary relief sought is for liquidated damages for breach of a contractual obligation. The cause of action was one under the civil laws. not the Labor Arbiters and the NLRC should have jurisdiction. the governing statute is the Civil Code and not the Labor Code. Those accounts have no relevance to the Labor Code. referred to in the above excerpt. clearly if impliedly suggesting that the claim for damages did not necessarily arise out of or in connection with the employer-employee relationship. 8 It seems worth noting that Medina v. Castro-Bartolome. the following was said: Stated differently. Such being the case. Theirs is a simple action for damages for tortious acts allegedly committed by the defendants. also cited in Molave. not in labor management relations nor in wage structures and other terms and conditions of employment. although the parties were an employer and two employees. petitioner seeks protection under the civil laws and claims no benefits under the Labor Code. The other items demanded are not labor benefits demanded by workers generally taken cognizance of in labor disputes. involved a claim for liquidated damages not by a worker but by the employer company. 122 SCRA 671. and it does not breach any provision of the Labor Code or the contract of employment of DEFENDANT. And in Singapore Airlines Limited v.SCRA 597.Singapore Airlines Limited v. 604. and for the purchase price of vehicles and parts sold to him. Paño. any discussion concerning the statutes amending it and whether or not they have retroactive effect is unnecessary. It results that the orders under review are based on a wrong premise. The items claimed are the natural consequences flowing from breach of an obligation. Hence the civil courts. For if the Labor Code has no relevance. 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. intrinsically a civil dispute. in negating jurisdiction of the Labor Arbiter. the jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC. resolution of the dispute requires expertise. It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. involved a claim for damages by two (2) employees against the employer company and the General Manager thereof. The important principle that runs through these three (3) cases is that where the claim to the principal relief sought 9 is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law. PLAINTIFF had sued for monies loaned to DEFENDANT. Clearly. 677. Mr. Paño. Justice Abad Santos stated: The pivotal question to Our mind is whether or not the Labor Code has any relevance to the reliefs sought by the plaintiffs. the cost of repair jobs made on his personal cars. The Court treated the claim for damages as "a simple action for damages for tortious acts" allegedly committed by private respondents. overtime compensation or separation pay. unlike Medina. . In such situations. arising from the use of slanderous language on the occasion when the General Manager fired the two (2) employees (the Plant General Manager and the Plant Comptroller).
respondent. petitioner. June 21. RAB-VII-0170-83 is hereby DISMISSED. 2005] PHILIPPINE NATIONAL BANK. Our labor statutes may not be rendered ineffective by laws or judgments promulgated. The Case Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court. seeking to reverse and set aside the July 16. [G. and if so. enjoy the protective mantle of Philippine labor and social legislations. No. in a foreign country.Applying the foregoing to the instant case. The assailed Decision dismissed the CA Petition . and that petitioner Corporation undertook to grant cash awards to employees who accept such invitation and whose innovation suggestions. in the judgment of the Corporation's officials. without prejudice to the right of private respondent Vega to file a suit before the proper court. could nonetheless ripen into an enforceable contractual (facio ut des) 11 obligation on the part of petitioner Corporation under certain circumstances. the Petition for certiorari is GRANTED. could be translated into some substantial benefit to the Corporation. whether or not it had been breached. Such undertaking. 2002 Decision and the January 29. whether employed locally or overseas. CABANSAG. The Court reiterates the basic policy that all Filipino workers. FLORENCE O. if he so desires. DECISION PANGANIBAN. 2003 Resolution of the Court of Appeals (CA) in CA-GR SP No.: vs. are preeminently legal questions. or stipulations agreed upon. had arisen between petitioner Corporation and private respondent Vega in the circumstances of this case. satisfied the standards and requirements of the Innovation Program 10 and which.R. though unilateral in origin. SO ORDERED. 157010. J. whether or not an enforceable contract. albeit implied arid innominate. The decision dated 4 September 1987 of public respondent National Labor Relations Commission is SET ASIDE and the complaint in Case No. questions not to be resolved by referring to labor legislation and having nothing to do with wages or other terms and conditions of employment. but rather having recourse to our law on contracts. No pronouncement as to costs. the Court notes that the SMC Innovation Program was essentially an invitation from petitioner Corporation to its employees to submit innovation proposals. 68403. therefore. Thus. WEREFORE.
a letter to the President of the Bank in Manila. for the position. The assailed CA Resolution denied herein petitioner‟s Motion for Reconsideration.00. too.500. 1998.(filed by herein petitioner). for the issuance of an ‗Employment Pass‘ as an employee of the Singapore PNB Branch. with the rank of Vice-President of the Bank. Ruben C. Tobias found her eminently qualified and wrote on October 26. as General Manager.‘ with the Ministry of Manpower of the Government of Singapore. the Singapore PNB Branch was under the helm of Ruben C.500. as Credit Officer. At the time. xxx xxx xxx ―The President of the Bank was impressed with the credentials of Florence O. Her application was approved for a period of two (2) years. Lustria‟s January 18. affirming Labor Arbiter Joel S. effective upon assumption of duties after approval. She then filed an ‗Application. ―On December 7. She applied for employment. at a basic salary of Singapore Dollars 4. recommending the appointment of Florence O. 2001 Resolution. Manila. She applied for employment as Branch Credit Officer. at a total monthly package of $SG4. which had sought to reverse the National Labor Relations Commission (NLRC)‟s June 29. by the Bank.00. Ruben C. a private banking corporation organized and existing under the laws of the Philippines. 2000 Decision. the Branch Office had two (2) types of employees: (a) expatriates or the regular employees. she may be extended at the discretion of the Bank. Tobias. 1998. At the time. [herein Respondent Florence Cabansag] arrived in Singapore as a tourist. Tobias wrote a letter to Florence O. with the Singapore Branch of the Philippine National Bank. Cabansag that he approved the recommendation of Ruben C. with principal offices at the PNB Financial Center. Roxas Boulevard. hired in Manila and assigned abroad including Singapore. The Facts The facts are narrated by the Court of Appeals as follows: ―In late 1998. a month and. a lawyer. upon her successful completion of her probation to be determined solely. Cabansag. and (b) locally (direct) hired. a permanent appointment and that her temporary appointment was subject to the following terms and conditions: . Tobias. Cabansag offering her a temporary appointment.
In the meantime. ‗6. told Florence O. the Assistant Vice-President and Deputy General Manager of the Branch and Rosanna Sarmiento. You will observe the Bank‘s rules and regulations and those that may be adopted from time to time. likewise. Cabansag accepted the position and assumed office. on said ‗Report‘: ‗GOOD WORK. with the explanation that her resignation was imperative as a ‗cost-cutting measure‘ of the Bank. she was told by the two (2) that Ruben C. rented. 1999. Cabansag and. Ruben C. ‗5.‘ However. 1999. her initial ‗Performance Report. xxx xxx xxx ―Barely three (3) months in office.‘ certifying that she was a bona fide contract worker for Singapore. Cabansag talked to Ruben C. in the evening of April 14.‗1. ‗2. Ruben C. You will devote your full time during business hours in promoting the business and interest of the Bank. while Florence O. Cabansag was perplexed at the sudden turn of events and the runabout way Ruben C. ‗3. You will keep in strictest confidence all matters related to transactions between the Bank and its clients.‘ ―Florence O. an ‗Overseas Employment Certificate. Cabansag that the PNB Singapore . You will be on probation for a period of three (3) consecutive months from the date of your assumption of duty. Florence O. on March 9. Florence O. Tobias procured her resignation from the Bank. Tobias. the Philippine Embassy in Singapore processed the employment contract of Florence O. without prior written consent of the Bank. Termination of your employment with the Bank may be made by either party after notice of one (1) day in writing during probation. which she and Cecilia Aquino.‘ Ruben C. The next day. Tobias has asked them to tell Florence O. Tobias. one month notice upon confirmation or the equivalent of one (1) day‘s or month‘s salary in lieu of notice. Cabansag submitted to Ruben C. Cabansag was in the flat. Tobias confirmed the veracity of the information. the Chief Dealer of the said Branch. firm or company. Tobias and inquired if what Cecilia Aquino and Rosanna Sarmiento had told her was true. Florence O. Cabansag to resign from her job. she was issued by the Philippine Overseas Employment Administration. You will not. 1999. on March 8. ‗4. Tobias was so impressed with the ‗Report‘ that he made a notation and. be employed in anyway for any purpose whatsoever outside business hours by any person.
2. xxx xxx xxx ―On January 18. She refused. Tobias terminating her employment with the Bank. ―On April 16. However. Cabansag asked Ruben C. ―However. judgment is hereby rendered finding respondents guilty of Illegal dismissal and devoid of due process. Ruben C. Florence O. Cabansag had to resign from her employment. On April 20. Her backwages as of the date of the promulgation of this decision amounted to SGD 40. Ruben C. with the pretext that he needed a Chinese-speaking Credit Officer to penetrate the local market. Tobias that she be given sufficient time to look for another job. She then asked Ruben C. Without giving any definitive answer. her employment record will be blemished with the notation ‗DISMISSED‘ spread thereon. the decretal portion of which reads as follows: ‗WHEREFORE. Ruben C. benefits and privileges. 1999.Branch will be sold or transformed into a remittance office and that. Tobias told her that she should be ‗out‘ of her employment by May 15. . Tobias again summoned Florence O. Tobias again summoned Florence O. The more Florence O. she received a letter from Ruben C. 1999. 1999.00 or its equivalent in Philippine Currency at the time of payment. Ruben C. Florence O. Tobias flatly refused.500. Cabansag to his office and demanded that she submit her letter of resignation. on April 19. Tobias that she be furnished with a ‗Formal Advice‘ from the PNB Head Office in Manila. 1999. and are hereby ordered: 1. considering the foregoing premises. She was warned that. Cabansag was perplexed. Cabansag and adamantly ordered her to submit her letter of resignation. Cabansag did not submit any letter of resignation. in either way. Florence O. 2000. the Labor Arbiter rendered judgment in favor of the Complainant and against the Respondents. To reinstate complainant to her former or substantially equivalent position without loss of seniority rights. Solidarily liable to pay complainant as follows: a) To pay complainant her backwages from 16 April 1999 up to her actual reinstatement. with the information that a Chinese-speaking Credit Officer had already been hired and will be reporting for work soon. unless she submitted her letter of resignation.
557. 4. SO ORDERED. the NLRC denied PNB‟s Motion for Reconsideration.000.00.000 and the exemplary damages to P50. Monetary equivalent of unused sick leave benefits in the amount of SGD 1.67 or its equivalent in Philippine Currency at the time of payment.500.00. The appellate court found . e) f) g) 3. 2001.039. Allowance for Sunday banking in the amount of SGD 120.250.000.81 or its equivalent in Philippine Currency at the time of payment.00 or its equivalent in Philippine Currency at the time of payment. the CA noted that petitioner bank had failed to adduce in evidence the Singaporean law supposedly governing the latter‟s employment Contract with respondent.b) c) d) Mid-year bonus in the amount of SGD 2. exemplary damages in the amount of PhP 100. the Commission affirmed that Decision.978. In a Resolution dated June 29.000. 13th month pay in the amount of SGD 4.150.00 or its equivalent in Philippine Currency at the time of payment.] PNB appealed the labor arbiter‟s Decision to the NLRC.00 or its equivalent in Philippine Currency at the time of payment.60 or its equivalent in Philippine Currency at the time of payment. To pay complainant the amount of SGD 5.00 or its equivalent in Philippine Currency at the time of payment. Ruling of the Court of Appeals In disposing of the Petition for Certiorari. Monetary equivalent of unused vacation leave benefits in the amount of SGD 319. and moral damages in the amount of PhP 200.‖  [Emphasis in the original. representing attorney‘s fees. Solidarily to pay complainant actual damages in the amount of SGD 1. Monetary equivalent of leave credits earned on Sunday banking in the amount of SGD 1. In a subsequent Resolution.85 or its equivalent in Philippine Currency at the time of payment. but reduced the moral damages to P100.
Finally. or the jurisdiction of the labor arbiter or the NLRC over her Complaint for illegal dismissal. the propriety of Rule 45 as the procedural mode for seeking a review of the CA Decision affirming the NLRC Resolution. even though respondent secured an employment pass from the Singapore Ministry of Employment. Issues Petitioner submits the following issues for our consideration: ―1. respondent assails. the CA held that petitioner had failed to establish a just cause for the dismissal of respondent. and therefore. Respondent miscomprehends the Court‟s discourse in St. Such issue deserves scant consideration. Whether or not the arbitration branch of the NLRC in the National Capital Region has jurisdiction over the instant controversy. NLRC. According to the CA. which then used that Contract as a basis for issuing an Overseas Employment Certificate in favor of respondent. she did not thereby waive Philippine labor laws. The appellate court further noted that a cursory reading of the Ministry‟s letter will readily show that no such waiver or submission is stated or implied. The bank had also failed to give her sufficient notice and an opportunity to be heard and to defend herself. this Petition. ―2. In so doing. Whether or not the arbitration of the NLRC in the National Capital Region is the most convenient venue or forum to hear and decide the instant controversy. Hence. and ―3. Whether or not the respondent was illegally dismissed.that the Contract had actually been processed by the Philippine Embassy in Singapore and approved by the Philippine Overseas Employment Administration (POEA). neither did she submit herself solely to the Ministry of Manpower of Singapore‟s jurisdiction over disputes arising from her employment. which has indeed affirmed that the proper mode of review of NLRC decisions.‖ In addition. in her Comment. Martin Funeral Home v. The CA ruled that she was consequently entitled to reinstatement and back wages. computed from the time of her dismissal up to the time of her reinstatement. entitled to recover moral and exemplary damages and attorney‘s fees. resolutions or orders is by a special civil action for certiorari under .
Jurisdiction of Labor Arbiters and the Commission. the following cases involving all workers. the scope of the Supreme Court‟s judicial review of decisions of the Court of Appeals is generally confined only to errors of law. This doctrine applies with greater force in labor cases. Thus. The Court‟s Ruling The Petition has no merit. In seeking a review by this Court of the CA Decision -on questions of jurisdiction. venue and validity of employment termination -petitioner is likewise correct in invoking Rule 45. Rightly. whether agricultural or non-agricultural: 1. that in a petition for review on certiorari. – (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide. . 217. It does not extend to questions of fact. they are entitled to great respect and are rendered conclusive upon this Court. which are supported by substantial evidence. the labor arbiter and the NLRC have already determined the factual issues. were affirmed by the CA. within thirty (30) calendar days after the submission of the case by the parties for decision without extension. The Supreme Court and the Court of Appeals have concurrent original jurisdiction over such petitions for certiorari. Unfair labor practice cases. Their findings. these petitions should be initially filed with the CA. the bank elevated the NLRC Resolution to the CA by way of a Petition for Certiorari. in observance of the doctrine on the hierarchy of courts.Rule 65 of the Rules of Court. First Issue: Jurisdiction The jurisdiction of labor arbiters and the NLRC is specified in Article 217 of the Labor Code as follows: ―ART. however. Thus. absent a clear showing of palpable error or arbitrary disregard of evidence.  In the present case. It is true. Factual questions are for the labor tribunals to resolve. even in the absence of stenographic notes.
exemplary and other forms of damages. the claims arising out of an employeremployee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual.000. xxx xxx x x x” Based on the foregoing provisions.00) regardless of whether accompanied with a claim for reinstatement. moral. including those of persons in domestic or household service. Medicare and maternity benefits. Prior to employing respondent. Section 10 of RA 8042 reads in part: ―SECTION 10. We are not unmindful of the fact that respondent was directly hired. among whom are overseas Filipino workers (OFW). Except claims for Employees Compensation.” More specifically. petitioner had to obtain an employment pass for her from the Singapore Ministry of Manpower. involving an amount of exceeding five thousand pesos (P5. Claims for actual. Money Claims. including termination disputes involving all workers. including questions involving the legality of strikes and lockouts. 3. — Notwithstanding any provision of law to the contrary. those cases that workers may file involving wage. hours of work and other terms and conditions of employment 4. exemplary and other forms of damages arising from the employer-employee relations. Cases arising from any violation of Article 264 of this Code. Termination disputes. and 6. rates of pay. while on a tourist status in Singapore. 5. within ninety (90) calendar days after the filing of the complaint.2. (b) The commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. by the PNB branch in that city state. Securing the pass was a . the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide. moral. labor arbiters clearly have original and exclusive jurisdiction over claims arising from employer-employee relations. arising from employer-employee relations. all other claims. xxx xxx x x x. Social Security. If accompanied with a claim for reinstatement.
issued on March 8. This circumstance militates against petitioner‟s contention that respondent was “locally hired”. petitioner cannot escape the application of Philippine laws or the jurisdiction of the NLRC and the labor arbiter. such permit simply means that its holder has a legal status as a worker in the issuing country. respondent‟s employment by the Singapore branch office had to be approved by Benjamin P. ensure . in this case one deployed in Singapore. even assuming arguendo that she was considered at the start of her employment as a “direct hire” governed by and subject to the laws. That permit. It does not at all imply a waiver of one‟s national laws on labor. Instead. Significantly. the president of the bank whose principal offices were in Manila. NLRC: ―x x x. Thus. declared her a bona fide contract worker for Singapore. common practices and customs prevailing in Singapore she subsequently became a contract worker or an OFW who was covered by Philippine labor laws and policies upon certification by the POEA. Hence. and totally “governed by and subject to the laws. At the time her employment was illegally terminated. Whether employed locally or overseas. however. Moreover. 1999. Under Philippine law. The Certificate. Noteworthy is the fact that respondent likewise applied for and secured an Overseas Employment Certificate from the POEA through the Philippine Embassy in Singapore. not of the Philippines. common practices and customs” of Singapore. contract stipulations to the contrary notwithstanding. does not automatically mean that the non-citizen is thereby bound by local laws only. Absent any clear and convincing evidence to the contrary. with more reason does this fact reinforce the presumption that respondent falls under the legal definition of migrant worker. the Philippine government requires non-Filipinos working in the country to first obtain a local work permit in order to be legally employed here. In any event. we recall the following policy pronouncement of the Court in Royal Crown Internationale v. promote full employment. petitioner admits that it is a Philippine corporation doing business through a branch office in Singapore.regulatory requirement pursuant to the immigration regulations of that country. all Filipino workers enjoy the protective mantle of Philippine labor and social legislation. Palma Gil. she already possessed the POEA employment Certificate. This pronouncement is in keeping with the basic public policy of the State to afford protection to labor. Similarly. as averred by petitioner. this document authorized her working status in a foreign country and entitled her to all benefits and processes under our statutes.
See also Section 18. race or creed. ―For purposes of venue. security of tenure.equal work opportunities regardless of sex. is engaged or has been engaged in a remunerated activity in a state of which he or she is not a legal resident. Article II and Section 3. and regulate the relations between workers and employers. or by determination or conventions agreed upon in a foreign country. collective bargaining. 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 . assignment or travel. and report the results of their assignment to their employers. at the option of the complainant. It shall include the place where the employee is supposed to report back after a temporary detail. their workplace is where they are regularly assigned. to be used interchangeably with overseas Filipino worker. as well as ambulant or itinerant workers.” Undeniably. For the State assures the basic rights of all workers to self-organization. and just and humane conditions of work [Article 3 of the Labor Code of the Philippines. workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. Article XIII.” As such. or where they are supposed to regularly receive their salaries/wages or work instructions from. 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. Admittedly.‖ Under the “Migrant Workers and Overseas Filipinos Act of 1995” (RA 8042). This ruling is likewise rendered imperative by Article 17 of the Civil Code which states that laws ‗which have for their object public order.‘‖ Second Issue: Proper Venue Section 1(a) of Rule IV of the NLRC Rules of Procedure reads: ―Section 1. a migrant worker “refers to a person who is to be engaged. She thus falls within the category of “migrant worker” or “overseas Filipino worker. she is a Filipino and not a legal resident of that state. In the case of field employees. 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. 1987 Constitution]. respondent was employed by petitioner in its branch office in Singapore. public policy and good customs shall not be rendered ineffective by laws or judgments promulgated. Provided.
 The evidence in this case is crystal-clear. 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. The twin requirements of notice and hearing constitute the essential elements of procedural due process. Since her dismissal by petitioner. Neither was she given any chance to be heard. Third Issue: Illegal Dismissal The appellate court was correct in holding that respondent was already a regular employee at the time of her dismissal. she could not have defended herself effectively. as required by law. One of her fundamental rights is that she may not be dismissed without due process of law. benefits and privileges provided under our labor laws. consistent with provision No. even if she were given the opportunity to be heard. As to the requirement of a hearing. 6 of her employment Contract. At any rate. Respondent was not notified of the specific act or omission for which her dismissal was being sought. petitioner recognized respondent as such at the time it dismissed her.” Indeed. In dismissing employees. she has made a valid choice of proper venue. Thus. in filing her Complaint before the RAB office in Quezon City. 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. respondent was entitled to all rights. because her three-month probationary period of employment had already ended. for she knew no cause to answer to.specifically to her residence at Filinvest II. and 2) the other to inform them of the decision to dismiss them. by giving her one month‟s salary in lieu of a one-month notice. and neither of these elements can be eliminated without running afoul of the constitutional guarantee.Regional Arbitration Branch (RAB) where she resides or (2) at the RAB where the principal office of her employer is situated. Quezon City. respondent has returned to the Philippines -. its essence lies simply in the opportunity to be heard. Notice and Hearing Not Complied With As a regular employee. .
The employer has the burden of proving that it was done for any of those just or authorized causes. together with the equivalent of a onemonth pay.”Also. a contract of employment is imbued with public interest. the contracting parties may establish such stipulations. It merely insists that her dismissal was validly effected pursuant to the provisions of her employment Contract. terms and conditions as they want. which she had voluntarily agreed to be bound to. customs. the employment Contract between petitioner and respondent is governed by Philippine labor laws. petitioner has not asserted any of the grounds provided by law as a valid reason for terminating the employment of respondent. As explained earlier. public policy or public order. Moreover. and terms and conditions of the Contract must not contravene our labor law provisions. petitioner overlooks the qualification that those terms and conditions agreed upon must not be contrary to law. clauses. Truly. The failure to discharge this burden means that the dismissal was not justified. due process that must be observed in dismissing an employee. The Court has time and time again reminded parties that they “are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other. clauses. morals. However. or for failure to observe. . Well-settled is the rule that the employer shall be sanctioned for noncompliance with the requirements of. 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. while a contract is the law between the parties. No Valid Cause for Dismissal Moreover. the provisions of positive law that regulate such contracts are deemed included and shall limit and govern the relations between the parties. 283 and 284 of the Labor Code provide the valid grounds or causes for an employee‟s dismissal. Articles 282.All that petitioner tendered to respondent was a notice of her employment termination effective the very same day. and their agreement would have the force of law between them. Hence. and that the employee is entitled to reinstatement and back wages. Notably. the stipulations.
Basic in our jurisprudence is the principle that when there is no showing of any clear. for which no written advice was given despite complainant‘s request. we quote with approval the following ratiocination of the labor arbiter: ―The records also show that [respondent‘s] dismissal was effected by [petitioners‘] capricious and high-handed manner. good customs or public policy. In affirming the awards of moral and exemplary damages. Fifth. experience and readiness for the position of credit officer and pressured to resign a month after she was commended for her good work. is whimsical. First. Such wavering stance or vacillating position indicates bad faith and a dishonest purpose. Second. fraudulent and in bad faith. . and contrary to morals. Bad faith and fraud are shown in the acts committed by [petitioners] before. she was employed on account of her qualifications. good customs and public policy. during and after [respondent‘s] dismissal in addition to the manner by which she was dismissed. costcutting and the need for a Chinese[-]speaking credit officer. and legal cause for the termination of employment. valid. Fourth. anti-social and oppressive. She was not even provided with a return trip fare. the law considers the matter a case of illegal dismissal. fraudulent and in bad faith. moral damages are recoverable when the dismissal of an employee is attended by bad faith or constitutes an act oppressive to labor or is done in a manner contrary to morals. she suffered and continues to suffer mental anguish. namely. with no prospect for another job. the notice of termination is an utter manifestation of bad faith and whim as it totally disregards [respondent‘s] right to security of tenure and due process. [respondent] was pressured to resign for two different and contradictory reasons. Third. the demand for [respondent‘s] instant resignation on 19 April 1999 to give way to her replacement who was allegedly reporting soonest. Awards for moral and exemplary damages would be proper if the employee was harassed and arbitrarily dismissed by the employer. Such notice together with the demands for [respondent‘s] resignation contravenes the fundamental guarantee and public policy of the Philippine government on security of tenure. as [petitioners] disregarded her situation as an overseas worker away from home and family. anti-social and caused her absolute torture. because on 16 April 1999 she was given a period of [sic] until 15 May 1999 within which to leave. the pressures made on her to resign were highly oppressive. ―[Respondent] likewise established that as a proximate result of her dismissal and prior demands for resignation. Awards for Damages Justified Finally.
and by way of example or correction for the public good so that persons similarly minded as [petitioners] would be deterred from committing the same acts. NARVASA. "working at the various plants. the grant of attorney‟s fees is legally justifiable. or when employees are forced to litigate and consequently incur expenses to protect their rights and interests. respondents. otherwise known as the Wage Rationalization Act. G. more or less. wounded feelings. Flores. 91980 June 27. WHEREFORE. petitioner.R. J. No. Banzuela. CARMEN TALUSAN and SAN MIGUEL CORPORATION. offices. It is settled that when an action is instituted for the recovery of wages. moral shock and social humiliation. and warehouses located at the National Capital Region" — presented to .fright. Upon the effectivity of the Act on June 5.:p The controversy at bar had its origin in the "wage distortions" affecting the employees of respondent San Miguel Corporation allegedly caused by Republic Act No. the union known as "Ilaw at Buklod Ng Manggagawa (IBM)" — said to represent 4. Miralles. Jardeleza Law Offices for private respondents. [Petitioners] are thus liable for moral damages under Article 2217 of the Civil Code. vs. the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. NATIONAL LABOR RELATIONS COMMISSION (First Division).500 employees of San Miguel Corporation.‖ The Court also affirms the award of attorney‟s fees. serious anxiety. besmirched reputation. SO ORDERED. Sy. 6727. This should served [sic] as protection to other employees of [petitioner] company. Her standing in the social and business community as well as prospects for employment with other entities have been adversely affected by her dismissal. HON. Taquio & Associates for petitioner. 1989. xxx xxx xxx ―[Petitioners] likewise acted in a wanton. oppressive or malevolent manner in terminating [respondent‘s] employment and are therefore liable for exemplary damages. Raneses. Costs against petitioner. 1991 ILAW AT BUKLOD NG MANGGAGAWA (IBM).
00 per day. 1989" as a legitimate means of compelling SMC to correct "the distortion in their wages brought about by the implementation of the said laws (R. 5 . The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of the increase in the wage rates prescribed under this Section. the workers involved issues a joint notice reading as follows: 2 SAMA-SAMANG PAHAYAG: KAMING ARAWANG MANGGAGAWA NG POLO BREWERY PAWANG KASAPI NG ILAW AT BUKLOD NG MANGGAGAWA (IBM) AY NAGKAISANG NAGPASYA NA IPATUPAD MUNA ANG EIGHT HOURS WORK SHIFT PANSAMANTALA HABANG HINDI IPINATUTUPAD NG SMC MANAGEMENT ANG TAMANG WAGE DISTORTION.. . COMPANY ignored said demand by offering a measly across-the-board wage increase of P7. such dispute shall first be settled voluntarily between the parties and in the event of a deadlock. on their own accord. . refused to render overtime services. 1989. Where the application of the increases in the wage rates under this Section results in distortions as defined under existing laws in the wage structure within an establishment and gives rise to a dispute therein. . all members of . simply SMC]) joined by others at statistical quality control and warehouse. .the company a "demand" for correction of the "significant distortion in . But the Union claims that "demand was ignored: 1 The . . The Union's position (set out in the petition subsequently filed in this Court. . COMPANY rejected the reduced proposal of the UNION the members thereof.00 per day. 1989 by "some 800 daily-paid workers at the Polo Plant's production line (of San Miguel Corporation [hereafter.e. . from Mondays to Fridays . i." In that "demand. . per employee. When the . . "4 There ensued thereby a change in the work schedule which had been observed by daily-paid workers at the Polo Plant for the past five (5) years. starting October 16. most especially at the Beer Bottling Plants at Polo. 6727) to newly-hired employees. . eight (8) hours for both shifts" — a work schedule which. and encouraged" because the automatic overtime built into the schedule "gave them a steady source of extra-income. .A.A.00 per day. infra) was that the workers' refuse "to work beyond eight (8) hours everyday starting October 16. IBM . . . It shall be mandatory for the NLRC to conduct continuous hearings and decide any dispute arising under this Section within twenty (20) calendar days from the time said dispute is formally submitted to it for arbitration. the UNION reduced its proposal to P15. as against the proposal of the UNION of P25. per employee by way of amicable settlement. . 3 That decision to observe the "eight hours work shift" was implemented on October 16." the Union explicitly invoked Section 4 (d) of RA 6727 which reads as follows: xxx xxx xxx (d) . . 6640 and R. the same shall be finally resolved through compulsory arbitration by the regional branches of the National Labor Relations Commission (NLRC) having jurisdiction over the workplace. (and on) Saturdays. SMC says. Later. "ten (10) hours for the first shift and ten (10) to fourteen (14) hours for the second shift. (the workers') wages." and pursuant to which it (SMC) "planned its production targets and budgets. . the workers had "welcomed. per employee. In this connection.
004.. (and the) Government lost excise tax revenue of P42 million. 9 In its petition. "to enjoin and restrain illegal slowdown and for damages. 1990. 1989 . and 19. this time directly with the National labor Relations Commission. 11. a cash or surety bond in the amount of P50. The complaint was docketed as NLRC-NCR Case No. 16. . . .105 cases of beer . supra. 1989. with prayer for the issuance of a cease-and-desist and temporary restraining order. DIRECTING the respondents to CEASE and DESIST from further committing the acts complained about particularly their not complying with the work schedule established and implemented by the company through the years or at the least since 1984. . which schedule appears to have been adhered to by the respondents until October 16. SMC lost P174. 7 Then on December 8.657. Here the matter rested until February 14. the NLRC's First Division first directed SMC to present evidence in support of the application before a commissioner. . The hearing on January 8. . The Union thereafter asked the Hearing Officer to schedule other hearings. upon . 1990 was postponed also at the instance of said counsel who declared that the Union refused to recognize the NLRC's jurisdiction. ." The Resolution — 1) authorized the issuance of "a Temporary Restraining Order for a period of twenty (20) days ." and appeals "to the Union members. The Hearing Officer announced she would submit a report to the Commission relative to the extension of the temporary restraining order of December 9. The Labor Arbiter accordingly scheduled the incident for hearing on various dates: December 27 and 29. On December 19.e. SMC objected. 00-10-04917. in) lost production of 2.311 in revenues . 6 These losses occurred despite such measures taken by SMC as organizing "a third shift composed of regular employees and some contractuals. 1990. 1989. .598 in sales and P48.1989. . . that (i)n "money terms. work disruption and lower efficiency ." to adhere to the existing work schedule. through letters and memoranda and dialogues with their plant delegates and shop stewards. SMC filed with the Arbitration Branch of the National Labor Relations Commission a complaint against the Union and its members "to declare the strike or slowdown illegal" and to terminate the employment of the union officers and shop stewards. (i.) (m)ay an employer force an employee to work everyday beyond eight hours a day? . 1989. 8 Before acting on the application for restraining order. . 16 and 19. Thereafter. The first two settings were cancelled on account of the unavailability of the Union's counsel. . (resulting in turn. January 8.904. is the application of the Eight-Hour Labor Law . 2) set the incident on injunction for hearing before Labor Arbiter Carmen Talusan on 27 December 1989 .This abandonment of the long-standing schedule of work and the reversion to the eight-hour shift apparently caused substantial losses to SMC. on the claim that its action in the Arbitration Branch had as yet "yielded no relief. 1990 were taken up with the cross-examination of SMC's witness on the basis of his affidavit and supplemental affidavits. Labor Arbiter Carmen Talusan.00 . . said First Division promulgated a Resolution on the basis of "the allegations of the petitioner (SMC) and the evidence adduced ex parte in support of their petition. Its claim is that there ensued "from 16 October 1989 to 30 November 1989 alone . the Union asserted that: 1) the "central issue . computed at the rate of P21 per case collectible at the plant. on October 18. prayed for by SMC. . 1989.000." SMC filed another complaint against the Union and members thereof. . when the Union filed the petition which commenced the special civil action of certiorari and prohibition at bar. . The hearings set on January 11.
or otherwise implementing said Resolution of December 19. In traverse of the petition. 1989." SMC had been paying its workers "wages far below the productivity per employee. 10 "tremendously increased its production of beer at lesser cost. . had no jurisdiction to act on the plea for injunction in the first instance. 2) against such a slowdown. in violation of its own rules and the repeated decisions of this . . Court. the NLRC has jurisdiction to issue injunctive relief in the first instance. which is an illegal and unprotected concerted activity. as an essentially appellate body." accordingly. the NLRC has "the positive legal duty and statutory obligation to enjoin the slowdown complained of and to compel the parties to arbitrate . 1989 "with indecent haste.2) although the work schedule adopted by SMC with built-in automatic overtime. said NLRC "had no legal choice but to issue injunction to enforce the reciprocal no lockout-no slowdown and mandatory arbitration agreement of the parties. the NLRC. 3) the NLRC had issued the temporary restraining order of December 19.." in which it contended that: 1) the workers' abandonment of the regular work schedule and their deliberate and wilful reduction of the Polo plant's production efficiency is a slowdown. everyday!! 4) the members of the NLRC had no authority to act as Commissioners because their appointments had not been confirmed by the Commission on Appointment. 6715 prior to their re-appointment and/or confirmation. . (and) to effectuate the important national policy of peaceful settlement of labor disputes through arbitration." and 2) pending such judgment restraining(a) the NLR Commissioners "from discharging their power and authority under R." and turning a deaf ear to the Union's demands for wage increases. based on ex parte evidence of SMC and such an order had the effect of "forcing the workers to work beyond eight (8) hours a day.A." as well as (b) Arbiter Talusan and the Commission from acting on the matter or rendering a decision or issuing a permanent injunction therein. . and (c) ordering the removal "from the 201 files of employees any and all memoranda or disciplinary action issued/imposed to the latter by reason of their refusal to render overtime work. (b) declaring mandatory the confirmation by the Commission on Appointments of the appointments of National Labor Relations Commissioners." and 4) the NLRC "gravely abused its discretion when it refused to decide the application for injunction within the twenty day period of its temporary restraining order. 1990. 3) indeed. SMC filed a pleading entitled "Comment with Motion to Admit Comment as Counter-Petition. and 5) even assuming the contrary. The petition thus prayed: 1) for judgment (a) annulling the Resolution of December 19.
thereby implicitly excluding strikes or lockouts or other concerted activities as modes of settlement of the issue. usually accompanied by the display of placards and other signs making known the facts involved in a labor dispute. the same Article 263 provides that the "right of legitimate labor organizations to strike and picket and of employer to lockout.It is SMC's submittal that the coordinated reduction by the Union's members of the work time theretofore willingly and consistently observed by them. Article 263 of the Labor Code. contrary to the law and to the collective bargaining agreement between it and the Union. 6727 prescribes a specific. the employers and workers shall endeavor to correct such distortions. shall continue to be recognized and respected. It shall be mandatory for the NLRC to conduct continuous hearings and decide the dispute within twenty (20) calendar days from the time said dispute is submitted for compulsory arbitration. . The argument is correct and will be sustained. thereby causing financial losses to the employer in order to compel it to yield to the demand for correction of "wage distortions. detailed and comprehensive procedure for the correction thereof. In the particular instance of "distortions of the wage structure within an establishment" resulting from "the application of any prescribed wage increase by virtue of a law or wage order. It is. shall be referred to the appropriate branch of the National Labor Relations Commission (NLRC). declares that in line with "the policy of the State to encourage free trade unionism and free collective bargaining. Any dispute arising from wage distortions shall be resolved through the grievance procedure under their collective bargaining agreement and. Any dispute arising therefrom shall be settled through the National Conciliation and Mediation Board and. picketing — the marching to and fro at the employer's premises. the counterpart activity that management may licitly undertake is the lockout — the temporary refusal to furnish work on account of a labor dispute. . such dispute shall be decided by the voluntary arbitrator or panel of voluntary arbitrators within ten (10) calendar days from the time said dispute was referred to voluntary arbitration. The provision 11 states that — . and boycotts — the concerted refusal to patronize an employer's goods or services and to persuade others to a like refusal. Unless otherwise agreed by the parties in writing. In cases where there are no collective agreements or recognized labor unions. . . Among the rights guaranteed to employees by the Labor Code is that of engaging in concerted activities in order to attain their legitimate objectives." is an illegal and "unprotected" activity. (w)orkers shall have the right to engage in concerted activities for purposes of collective bargaining or for their mutual benefit and protection." Section 3 of Republic Act No. if it remains unresolved after ten (10) calendar days of conciliation. if it remains unresolved. The more common of these concerted activities as far as employees are concerned are: strikes — the temporary stoppage of work as a result of an industrial or labor dispute. In this connection. through voluntary arbitration." A similar right to engage in concerted activities for mutual benefit and protection is tacitly and traditionally recognized in respect of employers. SMC argues. the employer and the union shall negotiate to correct the distort-ions. consistent with the national interest. On the other hand. as amended." The legality of these activities is usually dependent on the legality of the purposes sought to be attained and the means employed therefor. . It goes without saying that these joint or coordinated activities may be forbidden or restricted by law or contract.
said agreement clearly stating that settlement of "all disputes. Awareness by the Union of the proscribed character of its members' collective activities. declares that. conditions of employment and/or employer-employee relations arising during the effectivity of this Agreement or any renewal thereof. sympathetic or general strikes. is made clear in the rules implementing RA 6727 issued by the Secretary of Labor and Employment 12 pursuant to the authority granted by Section 13 of the Act. xxx xxx xxx The legislative intent that solution of the problem of wage distortions shall be sought by voluntary negotiation or abitration. and every Saturday (on 8 hour shifts). secondary boycotts. or any other interference with any of the operations of the COMPANY during the terms of this agreement (Article VI). hours of work. By concealing the real cause of their dispute with management (alleged failure of correction of wage distortion)." Moreover. is clearly connoted by its attempt to justify those activities as a means of protesting and obtaining redress against said members working overtime every day from Monday to Friday (on an average of 12 hours). or for that matter. illegal. 14 also prescribes a similar eschewal of strikes or other similar or related concerted activities as a mode of resolving disputes or controversies. shall be settled by arbitration in accordance with the procedure set out in this Article. disagreements or controversies of any kind" should be achieved by the stipulated grievance procedure and ultimately by arbitration. stoppage or slowdown of work. picketing. disagreement or controversy which may be submitted to the grievance procedure in Article IX shall be presented for arbitration unless all the steps of the grievance procedure are exhausted (Article V — Arbitration).The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of any increase in prescribed wage rates pursuant to the provisions of law or Wage Order. 13 Section 16. disagreements and controversies of any kind between the COMPANY and the UNION and/or the workers involving or relating to wages. Section 1. Chapter I of these implementing rules. lockouts. they obviously hoped to remove their case from the operation of the rules implementing . sit-down strikes of any kind. The Union was thus prohibited to declare and hold a strike or otherwise engage in non-peaceful concerted activities for the settlement of its controversy with SMC in respect of wage distortions. refusal to handle any merchandise." was therefore forbidden by law and contract and. walkouts. The provisions are as follows: Section 1. 15rather than as a measure to bring about rectification of the wage distortions caused by RA 6727 — which was the real cause of its differences with SMC. hours of work. Any and all disputes. resorted to as a means of coercing correction of "wage distortions. the collective bargaining agreement between the SMC and the Union. on this account." The partial strike or concerted refusal by the Union members to follow the five-year-old work schedule which they had therefore been observing. and not by strikes. generally. any other issue "involving or relating to wages. conditions of employment and/or employer-employee relations. "Any issue involving wage distortion shall not be a ground for a strike/lockout. after reiterating the policy that wage distortions be first settled voluntarily by the parties and eventually by compulsory arbitration. or other concerted activities of the employees or management. boycotts. No dispute. The UNION agrees that there shall be no strikes. and trying to make it appear that the controversy involved application of the eight-hour labor law. relevant provisions of which are quoted by the former without the latter's demurring to the accuracy of the quotation.
" as a wilfull reduction in the rate of work by concerted action of workers for the purpose of restricting the output of the employer. Hence. (their collective bargaining) agreement. The Court is in substantial agreement with the petitioner's concept of a slowdown as a "strike on the installment plan. 16 What has just been said makes unnecessary resolution of SMC's argument that the workers' concerted refusal to adhere to the work schedule in force for the last several years. it had been agreed upon between SMC and its workers at the Polo Plant and indeed. The work schedule (with "built-in overtime") had not been forced upon the workers. secondary boycotts. . for a change in that work schedule prior to the strike." The stratagem cannot succeed. there is no evidence whatever in support of the Union's bare allegation that the appointments of said members had not been confirmed. an inherently illegal activity essentially illegal even in the absence of a no-strike clause in a collective bargaining contract. as an activity by which workers. i. be gone into. sit-down strikes of any kind. and the parties' collective bargaining agreement.RA 6727 that "Any issue involving wage distortion shall not be a ground for a strike/lockout. even if there were no such legal prohibition. because while the employees "continue to work and remain at their positions and accept the wages paid to them. and the familiar presumption of regularity in appointment and in performance of official duty exists in their favor. Furthermore.e. boycotts. 18 But whether or not the workers' activity in question — their concerted adoption of a different work schedule than that prescribed by management and adhered to for several years — constitutes a slowdown need not. 17 The Court also agrees that such a slowdown is generally condemned as inherently illicit and unjustifiable. that it was indeed the wage distortion issue that principally motivated the Union's partial or limited strike is clear from the facts. RA 6727. to the employer's damage. What really bothered them. or any other interference with any of the operations of the COMPANY during the term of . a fact made even more apparent by the joint notice circulated by them prior to the strike. for. In the first place. the workers never asked. refusal to handle any merchandise. 19 . as the Solicitor General points out. 1989. walkouts. they "work on their own terms. without a complete stoppage of work. it is an admitted fact that the members of the respondent Commission were actually appointed by the President of the Philippines on November 18. . sympathetic or general strikes. stoppage or slowdown of work. as already stated. that they would adopt the eight-hour work shift in the meantime pending correction by management of the wage distortion (IPATUPAD MUNA ANG EIGHT HOURS WORK SHIFT PANSAMANTALA HABANG HINDI IPINATUTUPAD NG SMC MANAGEMENT ANG TAMANG WAGE DISTORTION). and was in fact the subject of talks between their representatives and management. picketing." they at the same time "select what part of their allotted tasks they care to perform of their own volition or refuse openly or secretly. was the "wage distortion" question. nor were there ever any negotiations at their instance. it could not be considered a matter of such great prejudice to the workers as to give rise to a controversy between them and management. and even assuming the controversy really did not involve the wage distortions caused by RA 6727. had been religiously followed with mutually beneficial results for the past five (5) years. Suffice it to say that activity is contrary to the law. retard production or their performance of duties and functions to compel management to grant their demands. In the second place. to do other work. the concerted activity in question would still be illicit because contrary to the workers' explicit contractual commitment "that there shall be no strikes. in relation to a labor dispute.. is a slowdown. The Union's claim that the restraining order is void because issued by Commissioners whose appointments had not been duly confirmed by the Commission on Appointments should be as it is hereby given short shift." in other words. or statute or rule.
(2) That substantial and irreparable injury to complainant's property will follow. . except as otherwise provided in Articles 218 and 264 . the restraining order had been improperly issued. and the procedure to be followed in issuing the same. if offered . but only after compliance with the following requisites. may cause grave or irreparable damage to any party or render ineffectual any decision in favor of such party . (4) That complainant has no adequate remedy at law. in support of the allegations of a complaint made under oath. to wit: a) a hearing held "after due and personal notice thereof has been served. association or organization making the threat or committing the prohibited or unlawful act or actually authorizing or ratifying the same after actual knowledge thereof. in such manner as the Commission shall direct. The Court finds that the respondent Commission had acted entirely in accord with applicable provisions of the Labor Code. . but no injunction or temporary restraining order shall be issued on account of any threat." b) reception at the hearing of "testimony of witnesses. Article 254 of the Code provides that "No temporary or permanent injunction or restraining order in any case involving or growing out of labor disputes shall be issued by any court or other entity." as well as "testimony in opposition thereto. . greater injury will be inflicted upon complainant by the denial of relief than will be inflicted upon defendants by the granting of relief..Also untenable is the Union's other argument that the respondent NLRC Division had no jurisdiction to issue the temporary restraining order or otherwise grant the preliminary injunction prayed for by SMC and that." As a rule such restraining orders or injunctions do not issue ex parte. even assuming the contrary. to the effect: (1) That prohibited or unlawful acts have been threatened and will be committed and will be continued unless restrained. and also to the Chief Executive and other public officials of the province or city within which the unlawful acts have been threatened or committed charged with the duty to protect complainant's property. Among the powers expressly conferred on the Commission by Article 218 is the power to "enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute which. . c) a finding of fact by the Commission. with opportunity for crossexamination. . to all known persons against whom relief is sought. and . prohibited or unlawful act. except against the person or persons." Article 264 lists down specific "prohibited activities" which may be forbidden or stopped by a restraining order or injunction. (3) That as to each item of relief to be granted. Article 218 inter alia enumerates the powers of the National Labor Relations Commission and lays down the conditions under which a restraining order or preliminary injunction may issue. if not restrained or performed forthwith. .
(5) That the public officers charged with the duty to protect complainant's property are unable or unwilling to furnish adequate protection. sufficient. and expense of defense against the order or against the granting of any injunctive relief sought in the same proceeding and subsequently denied by the Commission. a "legal duty and obligation" on the part of the respondent Commission "to enjoin the unlawful and prohibited acts and omissions of petitioner IBM and the workers complained of. the temporary restraining order had a lifetime of only twenty (20) days and became void ipso facto at the expired ration of that period. together with a reasonable attorney's fee. a temporary restraining order may be issued ex parte under the following conditions: a) the complainant "shall also allege that. if sustained. asserting that the "failure of the respondent commission to resolve the application for a writ of injunction is an abuse of discretion especially in the light of the fact that the restraining order it earlier issued had already expired" 21 — must perforce be conceded. 20 — a proposition with which. it. it must be said. first direct SMC Labor Arbiter Carmen Talusan to receive SMC's testimonial evidence in support of the application and thereafter submit her recommendation thereon. in the premises. expense or damage caused by the improvident or erroneous issuance of such order or injunction." and d) the "temporary restraining order shall be effective for no longer than twenty (20) days and shall become void at the expiration of said twenty (20) days." c) the "complainant shall first file an undertaking with adequate security in an amount to be fixed by the Commission sufficient to recompense those enjoined for any loss. it found SMC's evidence adequate and issued the temporary restraining order upon bond." The record reveals that the Commission exercised the power directly and plainly granted to it by sub-paragraph (e) Article 217 in relation to Article 254 of the Code. all irresistibly leading to the basic conclusion that the concerted acts of the members of petitioner Union in question are violative of the law and their formal agreement with the employer. including all reasonable costs. however. and that it faithfully observed the procedure and complied with the conditions for the exercise of that power prescribed in said subparagraph (e) It acted on SMC's application for immediate issuance of a temporary restraining order ex parte on the ground that substantial and irreparable injury to its property would transpire before the matter could be heard on notice. the Office of the Solicitor General concurs. No irregularity may thus be imputed to the respondent Commission in the issuance of that order. b) there is "testimony under oath. unless a temporary restraining order shall be issued without notice. . in its counter-petition that there was. The reception of evidence "for the application of a writ of injunction may be delegated by the Commission to any of its Labor Arbiters who shall conduct such hearings in such places as he may determine to be accessible to the parties and their witnesses and shall submit thereafter his recommendation to the Commission. a substantial and irreparable injury to complainant's property will be unavoidable. to justify the Commission in issuing a temporary injunction upon hearing after notice. the latter's submittal. In any event. However. In view of the foregoing factual and legal considerations.
WHEREFORE, the petition is DENIED, the counter-petition is GRANTED, and the case is REMANDED to the respondent Commission (First Division) with instructions to immediately take such action thereon as is indicated by and is otherwise in accord with, the findings and conclusions herein set forth. Costs against petitioner. IT IS SO ORDERED.
[G.R. No. 120567. March 20, 1998]
PHILIPPINE AIRLINES, INC., petitioner, vs., NATIONAL LABOR RELATIONS COMMISSION, FERDINAND PINEDA and GODOFREDO CABLING, respondents. DECISION
MARTINEZ, J.: Can the National Labor Relations Commission (NLRC), even without a complaint for illegal dismissal filed before the labor arbiter, entertain an action for injunction and issue such writ enjoining petitioner Philippine Airlines, Inc. from enforcing its Orders of dismissal against private respondents, and ordering petitioner to reinstate the private respondents to their previous positions? This is the pivotal issue presented before us in this petition for certiorari under Rule 65 of the Revised Rules of Court which seeks the nullification of the injunctive writ dated April 3,1995 issued by the NLRC and the Order denying petitioner's motion for reconsideration on the ground that the said Orders were issued in excess of jurisdiction. Private respondents are flight stewards of the petitioner. Both were dismissed from the service for their alleged involvement in the April 3, 1993 currency smuggling in Hong Kong. Aggrieved by said dismissal, private respondents filed with the NLRC a petition  for injunction praying that:
"I. Upon filing of this Petition, a temporary restraining order be issued, prohibiting respondents (petitioner herein) from effecting or enforcing the Decision dated Feb. 22, 1995, or to reinstate petitioners temporarily while a hearing on the propriety of the issuance of a writ of preliminary injunction is being undertaken; "II. After hearing, a writ of preliminary mandatory injunction be issued ordering respondent to reinstate petitioners to their former positions pending the
hearing of this case, or, prohibiting respondent from enforcing its Decision dated February 22,1995 while this case is pending adjudication; "III. After hearing, that the writ of preliminary injunction as to the reliefs sought for be made permanent, that petitioners be awarded full backwages, moral damages of PHP 500,000.00 each and exemplary damages of PHP 500,000.00 each, attorney‟s fees equivalent to ten percent of whatever amount is awarded, and the costs of suit."
On April 3, 1995, the NLRC issued a temporary mandatory injunction  enjoining petitioner to cease and desist from enforcing its February 22, 1995 Memorandum of dismissal. In granting the writ, the NLRC considered the following facts, to wit:
“x x x that almost two (2) years ago, i.e. on April 15, 1993, the petitioners were instructed to attend an investigation by respondent‟s „Security and Fraud Prevention Sub-Department‟ regarding an April 3, 1993 incident in Hongkong at which Joseph Abaca, respondent‟s Avionics Mechanic in Hongkong „was intercepted by the Hongkong Airport Police at Gate 05 xxx the ramp area of the Kai Tak International Airport while xxx about to exit said gate carrying a xxx bag said to contain some 2.5 million pesos in Philippine Currencies. That at the Police Station, Mr. Abaca claimed that he just found said plastic bag at the Skybed Section of the arrival flight PR300/03 April 93,‟ where petitioners served as flight stewards of said flight PR300; x x the petitioners sought „a more detailed account of what this HKG incident is all about‟; but instead, the petitioners were administratively charged, „a hearing‟ on which „did not push through‟ until almost two (2) years after, i.e. „on January 20, 1995 xxx where a confrontation between Mr. Abaca and petitioners herein was compulsorily arranged by the respondent‟s disciplinary board‟ at which hearing, Abaca was made to identify petitioners as co-conspirators; that despite the fact that the procedure of identification adopted by respondent‟s Disciplinary Board was anomalous „as there was no one else in the line-up (which could not be called one) but petitioners xxx Joseph Abaca still had difficulty in identifying petitioner Pineda as his co-conspirator, and as to petitioner Cabling, he was implicated and pointed by Abaca only after respondent‟s Atty. Cabatuando pressed the former to identify petitioner Cabling as co-conspirator‟; that with the hearing reset to January 25, 1995, „Mr. 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, and at which hearing Mr. Joseph Abaca volunteered the information that the real owner of said money was one who frequented his headquarters in Hongkong to which information, the Disciplinary Board Chairman, Mr. Ismael Khan,‟ opined „for the need for another hearing to go to the bottom of the incident‟; that from
said statement, it appeared „that Mr. Joseph Abaca was the courier, and had another mechanic in Manila who hid the currency at the plane‟s skybed for Abaca to retrieve in Hongkong, which findings of how the money was found was previously confirmed by Mr. Joseph Abaca himself when he was first investigated by the Hongkong authorities‟; that just as petitioners „thought that they were already fully cleared of the charges, as they no longer received any summons/notices on the intended „additional hearings‟ mandated by the Disciplinary Board,‟ they were surprised to receive „on February 23, 1995 xxx a Memorandum dated February 22, 1995‟ terminating their services for alleged violation of respondent‟s Code of Discipline „effective immediately‟; that sometime xxx first week of March, 1995, petitioner Pineda received another Memorandum from respondent Mr. Juan Paraiso, advising him of his termination effective February 3, 1995, likewise for violation of respondent‟s Code of Discipline; x x x"
In support of the issuance of the writ of temporary injunction, the NLRC adopted the view that: (1) private respondents cannot be validly dismissed on the strength of petitioner's Code of Discipline which was declared illegal by this Court in the case of PAL, Inc. vs. NLRC, (G.R. No. 85985), promulgated August 13, 1993, for the reason that it was formulated by the petitioner without the participation of its employees as required in R.A. 6715, amending Article 211 of the Labor Code; (2) the whimsical, baseless and premature dismissals of private respondents which "caused them grave and irreparable injury" is enjoinable as private respondents are left "with no speedy and adequate remedy at law'"except the issuance of a temporary mandatory injunction; (3) the NLRC is empowered under Article 218 (e) of the Labor Code not only to restrain any actual or threatened commission of any or all prohibited or unlawful acts but also to require the performance of a particular act in any labor dispute, which, if not restrained or performed forthwith, may cause grave or irreparable damage to any party; and (4) the temporary mandatory power of the NLRC was recognized by this Court in the case of Chemo-Technicshe Mfg., Inc. Employees Union,DFA, et.al. vs. Chemo-Technische Mfg., Inc. [G.R. No. 107031, January 25,1993]. On May 4,1995, petitioner moved for reconsideration arguing that the NLRC erred:
1. …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; 2. …in granting a temporary injunction order when the termination of private respondents have long been carried out; 3. ..in ordering the reinstatement of private respondents on the basis of their mere allegations, in violation of PAL's right to due process;
4. ..in arrogating unto itself management prerogative to discipline its employees and divesting the labor arbiter of its original and exclusive jurisdiction over illegal dismissal cases; 5. ..in suspending the effects of termination when such action is exclusively within the jurisdiction of the Secretary of Labor; 6. ..in issuing the temporary injunction in the absence of any irreparable or substantial injury to both private respondents.
On May 31,1995, the NLRC denied petitioner's motion for reconsideration, ruling:
“The respondent (now petitioner), for one, cannot validly claim that we cannot exercise our injunctive power under Article 218 (e) of the Labor Code on the pretext that what we have here is not a labor dispute as long as it concedes that as defined by law, a”(l) „Labor Dispute‟ includes any controversy or matter concerning terms or conditions of employment.” . If security of tenure, which has been breached by respondent and which, precisely, is sought to be protected by our temporary mandatory injunction (the core of controversy in this case) is not a “term or condition of employment”, what then is? xxx xxx xxx Anent respondent‟s second argument x x x, Article 218 (e) of the Labor Code x x x empowered the Commission not only to issue a prohibitory injunction, but a mandatory (“to require the performance”) one as well. Besides, as earlier discussed, we already exercised (on August 23,1991) this temporary mandatory injunctive power in the case of “ChemoTechnische Mfg., Inc. Employees Union-DFA et.al. vs. Chemo-Technishe Mfg., Inc., et. al.” (supra) and effectively enjoined one (1) month old dismissals by Chemo-Technische and that our aforesaid mandatory exercise of injunctive power, when questioned through a petition for certiorari, was sustained by the Third Division of the Supreme court per its Resolution dated January 25,1993. xxx xxx xxx Respondent‟s fourth argument that petitioner's remedy for their dismissals is 'to file an illegal dismissal case against PAL which cases are within the original and exclusive jurisdiction of the Labor Arbiter' is ignorant. In requiring as a condition for the issuance of a 'temporary or
on its expeditious side. as an alternative remedy. three (3) years before it can be disposed of) while available as a remedy under Article 217 (a) of the Labor Code.' Article 218 (e) of the Labor Code clearly envisioned adequacy . through Article 218 (e) of the Labor Code (without need of an illegal dismissal suit under Article 217 (a) of the Code) if such whimsical and capricious act of illegal dismissal will 'cause grave or irreparable injury to a party'. an adjunct to a main suit. It is resorted to only when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard of compensation. Article 218 (e). Actually. is certainly not an 'adequate. what respondent PAL argues here is that we need not interfere in its whimsical dismissals of petitioners as. xxx xxx xxx Thus. Ergo. and not plain availability of a remedy at law as an alternative bar to the issuance of an injunction. An illegal dismissal suit (which takes. The essential conditions for granting such temporary injunctive relief are that the complaint alleges facts which appear to be sufficient to constitute a proper basis for injunction and . remedy at law.'(4) That complainant has no adequate remedy at law. x x x "  Hence. it can pay the latter its backwages. still the same is capable of compensation'. enforceable when necessary. that reinstatement as well is the concern of said law.permanent injunction'. injunction is a preservative remedy for the protection of one's substantive rights or interest. 'injunction need not be issued where adequate compensation at law could be obtained'. bar our exercise of that injunctive power given us by Article 218 (e) of the Code. the respondent. we have to stress that Article 279 does not speak alone of backwages as an obtainable relief for illegal dismissal. It is not a cause of action in itself but merely a provisional remedy. may cause grave and irreparable damage to any party'] stands as the sole 'adequate remedy at law' for petitioners here. Generally. as earlier discussed [which empowers this Commission 'to require the performance of a particular act' (such as our requiring respondent 'to cease and desist from enforcing' its whimsical memoranda of dismissals and 'instead to reinstate petitioners to their respective position held prior to their subject dismissals') in 'any labor dispute which. x x x But just the same. and that consequently. Finally. in its sixth argument claims that even if its acts of dismissing petitioners 'may be great. the present recourse. The application of the injunctive writ rests upon the existence of an emergency or of a special reason before the main case be regularly heard. after all. it cannot. if not xxx performed forthwith.
that on the entire showing from the contending parties. which. a justiciable dispute. either at law or in equity. pertinently provides as follows: "Section 1." . Sec. fixing. which application if not granted "may cause grave or irreparable damage to any party or render ineffectual any decision in favor of such party. may cause grave or irreparable damage to any party or render ineffectual any decision in favor of such party. x x x. Injunction in Ordinary Labor Dispute. the injunction is reasonably necessary to protect the legal rights of the plaintiff pending the litigation. as amended. when it is established on the bases of the sworn allegations in the petition that the acts complained of. 1. In labor cases. adversary proceeding in a court of law. Article 218 of the Labor Code empowers the NLRC- "(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute which. Rule XI of the New Rules of Procedure of the NLRC. but excluding labor disputes involving strikes or lockout." The term "controversy" is likewise defined as "a litigated question. if not restrained or performed forthwith.  Injunction is also a special equitable relief granted only in cases where there is no plain. changing." 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.-A preliminary injunction or a restraining order may be granted by the Commission through its divisions pursuant to the provisions of paragraph (e) of Article 218 of the Labor Code. may cause grave or irreparable damage to any party or render ineffectual any decision in favor of such party. the power of the NLRC to issue an injunctive writ originates from "any labor dispute" upon application by a party thereof. a civil action or suit. maintaining. involving or arising from any labor dispute before the Commission.  (Emphasis Ours) From the foregoing provisions of law. adequate and complete remedy at law. xxx xxx xxx The foregoing ancillary power may be exercised by the Labor Arbiters only as an incident to the cases pending before them in order to preserve the rights of the parties during the pendency of the case. if not restrained or performed forthwith. or arranging the terms and conditions of employment regardless of whether or not the disputants stand in the proximate relation of employers and employees." (Emphasis Ours) Complementing the above-quoted provision.
moral. and not a mere theoretical question or issue." Taking into account the foregoing definitions. (2) Termination disputes. involving an amount exceeding five thousand pesos (P 5. or the parties agree to submit the matter to voluntary arbitration pursuant to Article 263 (g) of the Labor Code. those cases that workers may file involving wages. and attorney's fees. the pertinent portions of which reads: "(g) When.00). award of full backwages. moral and exemplary damages. and (6) Except claims for employees compensation. (3) If accompanied with a claim for reinstatement. hours of work and other terms and conditions of employment. The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal. including questions involving the legality of strikes and lockouts. medicare and maternity benefits. hear and decide any of the cases therein enumerated. (4) Claims for actual. all other claims arising from employer-employee relations.  The jurisdiction conferred by the foregoing legal provision to the labor arbiter is both original and exclusive. in his opinion. 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. In the present case. the petition should have been filed with the labor arbiter who has the original and exclusive jurisdiction to hear and decide the following cases involving all workers. it is an essential requirement that there must first be a labor dispute between the contending parties before the labor arbiter.000. The only exceptions are where the Secretary of Labor and Employment or the NLRC exercises the power of compulsory arbitration. no other officer or tribunal can take cognizance of. social security. including those of persons in domestic or household service. there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest. whether agricultural or non-agricultural: (1) Unfair labor practice. . (5) Cases arising from any violation of Article 264 of this Code. As such. exemplary and other forms of damages arising from the employer-employee relations.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. meaning. This is clear from the allegations in the petition which prays for: reinstatement of private respondents. whether or not accompanied with a claim for reinstatement. rates of pay.
speedy and sufficient which will promptly relieve the petitioner from the injurious effects of the acts complained of. 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. has the ancillary power to issue preliminary injunctions or restraining orders as an incident in the cases pending before him in order to preserve the rights of the parties during the pendency of the case."  It is a remedy which is equally beneficial. is patently erroneous. . An "adequate" remedy at law has been defined as one "that affords relief with reference to the matter in controversy. therefore.the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. it is presumed to be adequate. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same. Under the Labor Code. If one has already taken place at the time of assumption or certification. Phipps. The argument of the NLRC in its assailed Order that to file an illegal dismissal suit with the labor arbiter is not an "adequate" remedy since it takes three (3) years before it can be disposed of. In short. xxx xxx xxx" On the other hand. it cannot entertain the private respondents' petition for injunction which challenges the dismissal orders of petitioner. private respondents disregarded this rule and directly went to the NLRC through a petition for injunction praying that petitioner be enjoined from enforcing its dismissal orders. Such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. 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"  Thus. and which is appropriate to the particular circumstances of the case. Moreover. the ordinary and proper recourse of an illegally dismissed employee is to file a complaint for illegal dismissal with the labor arbiter. the preliminary mandatory injunction prayed for by the private respondents in their petition before the NLRC can also be entertained by the labor arbiter who. the jurisdiction of the NLRC in illegal dismissal cases is appellate in nature and. as shown earlier. the NLRC shall have exclusive appellate jurisdiction over all cases decided by labor arbiters as provided in Article 217(b) of the Labor Code.  In the case at bar. we ruled that if the remedy is specifically provided by law. In Lamb vs. all striking or locked out employees shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. the NLRC exceeded its jurisdiction when it issued the assailed Order granting private respondents' petition for injunction and ordering the petitioner to reinstate private respondents.
without loss of seniority rights and other privileges.. It is considered irreparable injury when it cannot be adequately compensated in damages due to the nature of the injury itself or the nature of the right or property injured or when there exists no certain pecuniary standard for the measurement of damages. No.R. as an extraordinary remedy. the minute resolution denying the petition for being prematurely filed. As correctly argued by the petitioner.. an injunction. and the reply of the petitioners to private respondent's motion to dismiss the petition. vs. however. Inc. are clearly absent in the present case.Furthermore. Inc. docketed as G. Chemo-Technische Mfg. the alleged injury which private respondents stand to suffer by reason of their alleged illegal dismissal can be adequately compensated and therefore. there exists no "irreparable injury.al. On January 25.1993. is not favored in labor law considering that it generally has not proved to be an effective means of settling labor disputes. after due consultations or hearing and when all efforts at conciliation are exhausted which factors. the Court Resolved to DENY the same for being premature. is misleading. The ruling of the NLRC that the Supreme Court upheld its power to issue temporary mandatory injunction orders in the case of Chemo-Technische Mfg. mediation and arbitration. . Thus. an examination of private respondents' petition for injunction reveals that it has no basis since there is no showing of any urgency or irreparable injury which the private respondents might suffer. et. it is not susceptible of mathematical computation. Article 279 of the Labor Code provides that an employee who is unjustly dismissed from employment shall be entitled to reinstatement." It is clear from the above resolution that we did not in anyway sustain the action of the NLRC in issuing such temporary mandatory injunction but rather we dismissed the petition as the NLRC had yet to rule upon the motion for reconsideration filed by peitioner. injunctions may be issued only in cases of extreme necessity based on legal grounds clearly established. or where there is no standard by which their amount can be measured with reasonable accuracy.al. no such pronouncement was made by this Court in said case. we issued a Minute Resolution in the subject case stating as follows: "Considering the allegations contained. Finally. inclusive of allowances. that is. It has been the policy of the State to encourage the parties to use the nonjudicial process of negotiation and compromise. et. and to the payment of full backwages. An injury is considered irreparable if it is of such constant and frequent recurrence that no fair and reasonable redress can be had therefor in a court of law. and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.  Thus. the issues raised and the arguments adduced in the petition for certiorari . In the case at bar. 107031. Employees Union-DFA." as defined above which would necessitate the issuance of the injunction sought for. as well as the comments of both public and private respondents thereon..
are hereby REVERSED and SET ASIDE. 000563-95.1995. the petition is hereby GRANTED.1995 and May 31. in NLRC NCR IC No. SO ORDERED. issued by the National Labor Relations Commission (First Division). The assailed Orders dated April 3. .WHEREFORE.