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Republic of the Philippines SUPREME COURT Manila EN BANC G.R. Nos. 82763-64 March 19, 1990 DE E!

OPMENT "#N$ O% T&E P&'!'PP'NES, petitioner, vs. N#T'ON#! !#"OR RE!#T'ONS COMM'SS'ON, !#"OR #R"'TER 'S#"E! P. ORT'GUERR#, a() !#"OR #!!'#NCE %OR N#T'ON#! DE E!OPMENT, respondents. The Legal Counsel for petitioner. Piorello E. Azura, Errol Ismael, B. Palaci and Maria Lourdes C. Legaspi for APT. Pablo B. Castillon for respondent LA !.

ME!ENC'O-&ERRER#, J.: This Petition for Certiorari addresses itself to the 12 ebruar! 1"#$ %rder of the National &abor Relations Co''ission directin( petitioner )evelop'ent Ban* of the Philippines +)BP, to re'it the su' of P$,2"2,-#.... /out of proceeds of the foreclosed properties of &ira( Te0tile Mills 1nc., sold at public auction in order to satisf! the 2ud('ent/ in N&RC Cases Nos. NCR3-324#13#2 and 232.".3#2. The bac*(round facts of these t5o cases 'a! be su''ari6ed as follo5s7 The co'plainants in the t5o cases filed belo5 5ere for'er e'plo!ees of &ira( Te0tile Mills, 1nc. +&1RA8, for short,. &1RA8 5as a 'ort(a(e debtor of )BP. Private respondent &abor Alliance for National )evelop'ent +&AN), for brevit!, 5as the bar(ainin( representative of the 'ore or less #.. for'er ran* and file e'plo!ees of &1RA8. Around 9epte'ber 1"#1, &1RA8 started ter'inatin( the services of its e'plo!ees on the (round of retrench'ent. B! )ece'ber of the said !ear there 5ere alread! 1#. re(ular e'plo!ees separated fro' the service. &1RA8 has since ceased operations presu'abl! due to financial reverses. 1n ebruar! 1"#2, :oselito Alba!, one of the e'plo!ees dis'issed in 9epte'ber 1"#1, filed a co'plaint before the National &abor Relations Co''ission +N&RC, a(ainst &1RA8 for ille(al dis'issal +Case No. 232.".3#2,. %n 1 March 1"#2, &AN), on behalf of 1#. dis'issed 'e'bers, also filed a Co'plaint a(ainst &1RA8 see*in( separation pa!, 1-th 'onth pa!, (ratuit! pa!, sic* leave and vacation leave pa! and e'er(enc! allo5ance +Case No. -324#13 #2,. These t5o cases 5ere consolidated and 2ointl! heard b! the N&RC. 9aid co'plainants have since been 2oined b! supervisors and 'ana(ers. 1n a )ecision, dated -. :ul! 1"#2, &abor Arbiter Apolinar &. 9evilla ordered &1RA8 to pa! the individual co'plainants. The N&RC +Third )ivision, affir'ed the sa'e on 2# March 1"#2. That 2ud('ent beca'e final and e0ecutor!. %n 14 April 1"#-, a ;rit of E0ecution 5as issued. %n the sa'e da!, )BP e0tra2udiciall! foreclosed the 'ort(a(ed properties for failure of &1RA8 to pa! its 'ort(a(e obli(ation. As the onl! bidder at the foreclosure sale, )BP ac<uired said 'ort(a(ed properties for P-1,-=$,=$2.".. 9ince )BP 5as the sole 'ort(a(ee, no actual pa!'ent 5as 'ade, the a'ount of the bid havin( been 'erel! credited in partial satisfaction of &1RA8>s indebtedness. B! reason of said foreclosure, the ;rit of E0ecution issued in favor of the co'plainants re'ained unsatisfied. A Notice of &ev! on E0ecution on the properties of &1RA8 5as then entered. %n ? )ece'ber 1"#=, &AN) filed a /Motion for ;rit of E0ecution and 8arnish'ent/ of the proceeds of the foreclosure sale. %n -. Ma! 1"#4, upon 'otion of &AN), &abor Arbiter Apolinar &. 9evilla ordered the )BP i'pleaded /in the interest of 2ustice and due process,/ and re<uired it to intervene. %n 12 ebruar! 1"#$, and over the opposition of )BP, &abor Arbiter 9evilla (ranted the ;rit of 8arnish'ent and directed )BP to re'it to the N&RC the su' of P$,2"2,-#.... out of the proceeds of the foreclosed properties of &1RA8 sold at public auction in order to satisf! the 2ud('ent previousl! rendered. )BP sou(ht reconsideration of the above %rder on the (rounds of N&RC>s lac* of 2urisdiction over it since it 5as not a part! to the case, and that it 5as deprived of its propert! 5ithout due process of la5. Public respondent, &abor Arbiter 1sabel P. %rti(uerra denied reconsideration on 24 Ma! 1"#?. )BP appealed that denial to the N&RC. 1n the 'eanti'e, on - ebruar! 1"#?, b! virtue of Procla'ation Nos. 4. and 4.3A, the Asset Privati6ation Trust +APT, beca'e the transferee of the )BP foreclosed assets of &1RA8. %n 12 :ul! 1"#", b! virtue of that transfer, 5e dee'ed APT i'pleaded as a part!3petitioner and (ave it ti'e 5ithin 5hich to file its pleadin(. 1t sub'itted a Me'orandu' on 22 Nove'ber 1"#".

1t appears that on 21 )ece'ber 1"#?, a partial Co'pro'ise A(ree'ent 5as entered into bet5een APT and &AN) +&ite0 Chapter, 5hereb! APT paid the co'plainants3e'plo!ees, e" gratia, the su' of P?4.,...... /in full settle'ent of their clai's, past and present, 5ith respect to all assets of &1TE@ transferred b! )BP to APT./ That a'ount 5as received b! &AN)>s local President. Apparentl!, ho5ever, on 24 :anuar! 1"##, &AN), throu(h its national President, filed its opposition to the Co'pro'ise A(ree'ent for bein( contrar! to la5, 'orals and public polic!. %n 24 March 1"##, the N&RC + irst )ivision, affir'ed the appealed %rder and dis'issed the )BP appeal. )BP is no5 before us see*in( a revie5 and reversal. %n -. :anuar! 1"#", the Court resolved to (ive due course to the petition and to re<uire the parties to sub'it si'ultaneous 'e'oranda. %n 1 ebruar! 1""., the Court>s 9econd )ivision referred the case to the Court en banc, 5hich the latter accepted on the sa'e date. 1t is true that )BP 5as not an ori(inal part! and that it 5as ordered i'pleaded onl! after the ;rits of E0ecution 5ere not satisfied because the properties levied upon on e0ecution had been foreclosed e0tra2udiciall! b! it. )BP had to be i'pleaded, ho5ever, for the proper satisfaction of a final 2ud('ent. Bein( an incident in the e0ecution of the final 2ud('ent a5ard, N&RC retained 2urisdiction and control over the case and could issue such orders as 5ere necessar! for the i'ple'entation of that a5ard. 1ts inclusion as a part! could not have been acco'plished at the earlier sta(es of the proceedin(s because at the ti'e of the filin( of the Co'plaint, private respondents> cause of action 5as onl! a(ainst &1RA8. )BP cannot ri(htfull! contend that it 5as deprived of due process. 1t 5as (iven the opportunit! to be heard and to present its evidence. 1t had actuall! filed its %pposition to the Motion for E0ecution and 8arnish'ent filed b! &AN) on ? :anuar! 1"#4, and the %rder (rantin( the Motion 5as issued onl! after hearin(. )BP had also addressed an appeal to the N&RC. 1t had sub'itted, therefore, to the 2urisdiction of the N&RC. No5, for the core issue A 5hether or not the N&RC (ravel! abused its discretion in affir'in( the %rder of the &abor Arbiter (rantin( the ;rit of 8arnish'ent out of the proceeds of &1RA8>s properties foreclosed b! )BP to satisf! the 2ud('ent in these cases. ;e are constrained to rule in the affir'ative. Article 11. of the &abor Code provides7 Art. 11.. #or$er preference in case of ban$ruptc%. A 1n the event of ban*ruptc! or li<uidation of an e'plo!er>s business, his 5or*ers shall en2o! first preference as re(ards 5a(es due the' for services rendered durin( the period prior to the ban*ruptc! or li<uidation, an! provision to the contrar! not5ithstandin(. Bnpaid 5a(es shall be paid in full before other creditors 'a! establish an! clai' to a share in the assets of the e'plo!er. 1n i'ple'entation of the fore(oin(, 9ection 1., Rule C111, Boo* 111 of the Revised Rules and Re(ulations 1'ple'entin( the &abor Code, as a'ended, provides7 9ec. 1.. Pa%ment of &ages in case of ban$ruptc%. A Bnpaid 5a(es earned b! the e'plo!ees before the declaration of ban$ruptc% or 'udicial li(uidation of the e'plo!er>s business shall be (iven first preference and shall be paid in full before other creditors 'a! establish an! clai' to a share in the assets of the e'plo!er. +E'phasis supplied,. 1n interpretin( the fore(oin( provisions, the Court, in !e)elopment Ban$ of the Philippines )s. *antos +8.R. Nos. ?#2$13$2, # March 1"#",, cate(oricall! stated7 1t is <uite clear fro' the provision that a declaration of ban*ruptc! or a 2udicial li<uidation 'ust be present before the 5or*ers preference 'a! be enforced. Thus, Article 11. of the &abor Code and its i'ple'entin( rule cannot be invo*ed b! the respondents in this case absent a for'al declaration of ban*ruptc! or a li<uidation order. . . . 9ince then, ho5ever, Article 11. has been a'ended b! Republic Act No. $?14 and no5 reads as follo5s7 9ec. 1. Article 11. of Presidential )ecree No. ==2, as a'ended, other5ise *no5n as the &abor Code of the Philippines, is hereb! further a'ended to read as follo5s7 Art. 11.. #or$er preference in case of ban$ruptc%. A 1n the event of ban*ruptc! or li<uidation of an e'plo!er>s business, his 5or*ers shall en2o! first preference as re(ards their unpaid 5a(es and other monetar% claims, an! provision of la5 to the contrar! not5ithstandin(. *uch unpaid &ages and monetar% claims shall be paid in full before the claims of the +o)ernment and other creditors ma% be paid. +A'end'ents e'phasi6ed,. The a'end'ent e0pands 5or*er preference to cover not onl! unpaid 5a(es but also other 'onetar! clai's to 5hich even clai's of the 8overn'ent 'ust be dee'ed subordinate. 9ection 1., Rule 111, Boo* 111 of the %'nibus Rules 1'ple'entin( the &abor Code has also been a'ended b! 9ection 1 of the Rules and Re(ulations 1'ple'entin( RA $?14 as approved b! the then 9ecretar! of &abor and E'plo!'ent on 2= Ma! 1"#", and no5 provides7 9ec. 1.. Pa%ment of &ages and other monetar% claims in case of ban$ruptc%. A 1n case of ban*ruptc! or li<uidation of the e'plo!er>s business, the unpaid 5a(es and other 'onetar! clai's of the e'plo!ees shall be (iven first preference and shall be paid in full before the clai's of (overn'ent and other creditors 'a! be paid.

Notabl!, the ter's /declaration/ of ban*ruptc! or /2udicial/ li<uidation have been eli'inated. )oes this 'ean then that li<uidation proceedin(s have been done a5a! 5ithD ;e opine in the ne(ative, upon the follo5in( considerations7 1. Because of its i'pact on the entire s!ste' of credit, Article 11. of the &abor Code cannot be vie5ed in isolation but 'ust be read in relation to the Civil Code sche'e on classification and preference of credits. Article 11. of the &abor Code, in deter'inin( the reach of its ter's, cannot be vie5ed in isolation. Rather, Article 11. 'ust be read in relation to the provisions of the Civil Code concernin( the classification, concurrence and preference of credits, 5hich provisions find particular application in insolvenc! proceedin(s 5here the clai's of all creditors, preferred or non3preferred, 'a! be ad2udicated in a bindin( 'anner. . . . ,epublic )s. Peralta +8.R. No. &34$4$#, Ma! 2., 1"#?, 14. 9CRA -?,. 2. 1n the sa'e 5a! that the Civil Code provisions on classification of credits and the 1nsolvenc! &a5 have been brou(ht into har'on!, so also 'ust the *indred provisions of the &abor &a5 be 'ade to har'oni6e 5ith those la5s. -. 1n the event of insolvenc!, a principal ob2ective should be to effect an e<uitable distribution of the insolvent>s propert! a'on( his creditors. To acco'plish this there 'ust first be so'e proceedin( 5here notice to all of the insolvents>s creditors 'a! be (iven and 5here the clai's of preferred creditors 'a! be bindin(l! ad2udicated +)e Barretto vs. Cillanueva, No. &31="-#, )ece'ber 2", 1"$2, $ 9CRA "2#,. The rationale therefore has been e0pressed in the recent case of !BP )s. *ecretar% of Labor +8.R. No. ?"-41, 2# Nove'ber 1"#",, 5hich 5e <uote7 A preference of credit besto5s upon the preferred creditor an advanta(e of havin( his credit satisfied first ahead of other clai's 5hich 'a! be established a(ainst the debtor. &o(icall!, it beco'es 'aterial onl! 5hen the properties and assets of the debtors are insufficient to pa! his debts in fullE for if the debtor is a'pl! able to pa! his various creditors in full, ho5 can the necessit! e0ist to deter'ine 5hich of his creditors shall be paid first or 5hether the! shall be paid out of the proceeds of the sale the debtor>s specific propert!D 1ndubitabl!, the preferential ri(ht of credit attains si(nificance onl! after the properties of the debtor have been inventoried and li<uidated, and the clai's held b! his various creditors have been established +Fuen6le G 9treiff +&td., vs. Cillanueva, =1 Phil $11 +1"1$,E Barretto vs. Cillanueva, 8.R. No. 1="-#, 2" )ece'ber 1"$2, $ 9CRA "2#E Philippine 9avin(s Ban* vs. &antin, 8.R. --"2", 2 9epte'ber 1"#-, 12= 9CRA =?$,. =. A distinction should be 'ade bet5een a preference of credit and a lien. A preference applies onl! to clai's 5hich do not attach to specific properties. A lien creates a char(e on a particular propert!. The ri(ht of first preference as re(ards unpaid 5a(es reco(ni6ed b! Article 11. does not constitute a lien on the propert! of the insolvent debtor in favor of 5or*ers. 1t is but a preference of credit in their favor, a preference in application. 1t is a 'ethod adopted to deter'ine and specif! the order in 5hich credits should be paid in the final distribution of the proceeds of the insolvent>s assets. 1t is a ri(ht to a first preference in the dischar(e of the funds of the 2ud('ent debtor. 1n the 5ords of ,epublic )s. Peralta, supra7 Article 11. of the &abor Code does not purport to create a lien in favor of 5or*ers or e'plo!ees for unpaid 5a(es either upon all of the properties or upon an! particular propert! o5ned b! their e'plo!er. Clai's for unpaid 5a(es do not therefore fall at all 5ithin the cate(or! of speciall! preferred clai's established under Articles 22=1 and 22=2 of the Civil Code, e"cept to the e"tent that such complaints for unpaid &ages are alread% co)ered b% Article --./, number $7 /clai's for laborers 5a(es, on the (oods 'anufactured or the 5or* doneE/ or b% Article --.-, number 07 /clai's of laborers and other 5or*ers en(a(ed in the construction, reconstruction or repair of buildin(s, canals and other 5or*s, upon said buildin(s, canals and other 5or*s, upon said buildin(s, canals and other 5or*s./ To the e0tent that clai's for unpaid 5a(es fall outside the scope of Article 22=1, nu'ber $ and 22=2, nu'ber -, the! 5ould co'e 5ithin the a'bit of the cate(or! of ordinar! preferred credits under Article 22==. 4. The )BP anchors its clai' on a 'ort(a(e credit. A 'ort(a(e directl! and i''ediatel! sub2ects the propert! upon 5hich it is i'posed, 5hoever the possessor 'a! be, to the fulfill'ent of the obli(ation for 5hose securit! it 5as constituted +Article 21?$, Civil Code,. 1t creates a real ri(ht 5hich is enforceable a(ainst the 5hole 5orld. 1t is a lien on an identified i''ovable propert!, 5hich a preference is not. A recorded 'ort(a(e credit is a special preferred credit under Article 22=2 +4, of the Civil Code on classification of credits. The preference (iven b! Article 11., 5hen not fallin( 5ithin Article 22=1 +$, and Article 22=2 +-, of the Civil Code and not attached to an! specific propert!, is an ordinar! preferred credit althou(h its i'pact is to 'ove it fro' second priorit! to first priorit! in the order of preference established b! Article 22== of the Civil Code +Republic vs. Peralta, supra,. 1n fact, under the 1nsolvenc! &a5 +9ection 2", a creditor holdin( a 'ort(a(e or lien of an! *ind as securit! is not per'itted to vote in the election of the assi(nee in insolvenc! proceedin(s unless the value of his securit! is first fi0ed or he surrenders all such propert! to the receiver of the insolvent>s estate. $. Even if Article 11. and its 1'ple'entin( Rule, as a'ended, should be interpreted to 'ean /absolute preference,/ the sa'e should be (iven onl! prospective effect in line 5ith the cardinal rule that la5s shall have no retroactive effect, unless the contrar! is provided +Article =, Civil Code,. Thereb!, an! infrin(e'ent on the constitutional (uarantee on non3i'pair'ent of the obli(ation of contracts +9ection 1., Article 111, 1"#? Constitution, is also avoided. 1n point of fact, )BP>s 'ort(a(e credit antedated b! several !ears the a'endator! la5, RA No. $?14. To (ive Article 11. retroactive effect 5ould be to 5ipe out the 'ort(a(e in )BP>s favor and e0pose it to a ris* 5hich it sou(ht to protect itself a(ainst b! re<uirin( a collateral in the for' of real propert!. 1n fine, the ri(ht to preference (iven to 5or*ers under Article 11. of the &abor Code cannot e0ist in an! effective 5a! prior to the ti'e of its presentation in distribution proceedin(s. 1t 5ill find application 5hen, in proceedin(s such as insolvenc!, such unpaid 5a(es shall be paid in full before the /clai's of the 8overn'ent and other creditors/ 'a! be paid. But, for an orderl! settle'ent of a debtor>s assets, all creditors 'ust be convened, their clai's ascertained and inventoried, and thereafter the preferences deter'ined in the course of 2udicial proceedin(s 5hich have for their ob2ect the sub2ection of the propert! of the debtor to the pa!'ent of his debts or other la5ful obli(ations. Thereb!, an orderl! deter'ination of preference of creditors> clai's is assured +Philippine 9avin(s Ban* vs. &antin, No. &3--"2", 9epte'ber 2, 1"#-, 12= 9CRA =?$,E the ad2udication 'ade 5ill be bindin( on all parties3in3

interest, since those proceedin(s are proceedin(s in remE and the le(al sche'e of classification, concurrence and preference of credits in the Civil Code, the 1nsolvenc! &a5, and the &abor Code is preserved in har'on!. ;HERE %RE, Certiorari is 8RANTE), and the assailed )ecision of public respondent, the National &abor Relations Co''ission +N&RC,, dated 24 March 1"##, is hereb! 9ET A91)E. The )evelop'ent Ban* of the Philippines, the Asset Privati6ation Trust, the &abor Alliance for National )evelop'ent +&AN),, and other creditors 5ho 'a! be so 'inded, are hereb! directed, 5ithin si0t! +$., da!s fro' notice, to institute involuntar! insolvenc! proceedin(s before the proper Court 5here all the assets of &ira( Te0tile Mills, 1nc., 'a! be inventoried, the preferences of all its creditors deter'ined, and their clai's dischar(ed in a bindin( and conclusive 'anner. No costs. 9% %R)ERE). 1ernan, C.2., ar)asa, +utierrez, 2r., 1eliciano, +anca%co, Bidin, Cortes, +ri3o4A(uino, Medialdea and ,egalado, 22., concur.

S*+ara,* O+-(-o(s

CRU., J., dissentin(7 1 5as the lone dissenter in ,epublic ). Peralta, 14. 9CRA -?, 5hich is the 'ainsta! of the present 'a2orit! ponencia. Even then, 1 5as convinced that it 5as the intention of the le(islature to (ive absolute preference to the 5or*ers> clai's pursuant to the social 2ustice polic!. The a'end'ent of Article 11. of the &abor Code onl! stren(thens that conviction and, 1 li*e to thin*, vindicates '! ori(inal position. 1 reiterate it no5 and repeat that7 9ocial :ustice is not a 'ere catch phrase to be 'outhed 5ith sha' fervor in &abor )a! celebrations for the delectation and seduction of the 5or*in( class. 1t is a 'andate 5e should pursue 5ith ener(! and sincerit! if 5e are to trul! insure the di(nit! and 5ell3bein( of the laborer. 1 a' proud to dissent once a(ain on the side of labor.

P#D'!!#, J., dissentin(7 The 'aterial facts are riot disputed. &ira( Te0tile +&1RA8, ceased operations b! earl! 1"#2. Pursuant to a final and e0ecutor! 2ud('ent of the N&RC, dated 2. March 1"#-, &1RA8 5as ad2ud(ed liable to its 5or*ers for unpaid 5a(es and salaries 5hich, as of 12 ebruar! 1"#$, a'ounted to P$,2"2,-#..... &1RA8>s onl! re'ainin( asset 5as 'ort(a(ed to )evelop'ent Ban* of the Philippines +)BP, 5hich on 14 April 1"#- foreclosed the 'ort(a(e and ac<uired said propert! at public auction for P-1,-=$.=$2."., in partial satisfaction of &1RA8>s indebtedness to )BP. &1RA8>s 5or*ers throu(h their union +&AN), thereupon sou(ht to (arnish on )BP the proceeds of the foreclosure sale, to the e0tent of their ad2ud(ed unpaid 5a(es +P$,2"2,-#....,. The N&RC ruled for &AN) over )BP>s ob2ection. The issue therefore, in practical ter's, is 5hether P$,2"2,-#.... should be deducted fro' the P-1,-=$,=$2.". reali6ed b! )BP fro' the foreclosure sale of &1RA8>s propert!, to full! satisf! &AN)>s clai' for &1RA8 5or*ers> unpaid 5a(es, thereb! leavin( a balance of P24,.4=,.#2.". onl! in partial satisfaction of &1RA8>s debt to )BP. The 'a2orit! holds that &AN) 'a! not enforce its first preference in the satisfaction of unpaid 'onetar! clai's of its 'e'bers, )iz. &1RA8>s 5or*ers, over that of )BP, in the absence of a for'al declaration of ban*ruptc! or 2udicial li<uidation of &1RA8>s business. 1 re(ret that 1 cannot 2oin the 'a2orit! rulin( in the li(ht of the a'end'ent to Article 11. of the &abor Code b! Republic Act $?14, approved on 2 March 1"#", and the resultant a'end'ent of 9ection 1., Rule C111, Boo* 111 of the Revised Rules and Re(ulations 1'ple'entin( the &abor Code. Before its a'end'ent b! Republic Act $?14, Article 11. of the &abor Code provided A ;or*er preference in case of ban*ruptc!. A 1n the event of ban*ruptc! or li<uidation of an e'plo!er>s business, his 5or*ers shall en2o! first preference as re(ards 5a(es due the' for services rendered durin( the period prior to the ban*ruptc! or li<uidation, an! provision of la5 to the contrar! not5ithstandin(. Bnpaid 5a(es shall be paid in full before other creditors 'a! establish an! clai' to a share in the assets of the e'plo!er. After Republic Act $?14, Art. 11. no5 provides7

;or*er preference in case of ban*ruptc!. A 1n the event of ban*ruptc! or li<uidation of an e'plo!er>s business, his 5or*ers shall en2o! first preference as re(ards their 5a(es and other 'onetar! clai's, an! provisions of la5 to the contrar! not5ithstandin(. 9uch unpaid 5a(es and 'onetar! clai's shall be paid in full before clai's of the (overn'ent and other creditors 'a! be paid. 9ection 1. of the 1'ple'entin( Rules, before Republic Act $?14 provided7 Pa!'ent of 5a(es in case of ban*ruptc!. A Bnpaid 5a(es earned b! the e'plo!ees before the declaration of ban*ruptc! or 2udicial li<uidation of the e'plo!er>s business shall be (iven first preference and shall be paid in full before other creditors 'a! establish an! clai' to a share in the assets of the e'plo!er. After Republic Act $?14, 9ection 1. of the Rules no5 provides7 Pa!'ent of 5a(es and other 'onetar! clai's in case of ban*ruptc!. A 1n case of ban*ruptc! or li<uidation of the e'plo!er>s business, the unpaid 5a(es and other 'onetar! clai's of the e'plo!ees shall be (iven first preference and shall be paid in full before the clai's of (overn'ent and other creditors 'a! be paid. The 'a2orit!, in '! considered opinion, has failed to full! ta*e into account the radical chan(e introduced b! Republic Act $?14 into the s!ste' of priorities or preferences a'on( credits or creditors ordained b! the Civil Code. Bnder the provisions of the Civil Code, specificall!, Articles 22=1 and 22=2, 2ointl! 5ith Articles 22=$ to 22=", a t5o3tier order of preference of credits is established. The first tier includes onl! ta0es, duties and fees on specific 'ovable or i''ovable propert!. All other special preferred credits stand on a second tier. 1 Bnder the s!ste' of preferences in the Civil Code, onl! ta0es en2o! absolute preference i.e., the! e0clude the credits of the lo5er order until such ta0es are full! satisfied out of the proceeds of the sale of the propert! sub2ect of the preference, and ta0es can even e0haust such proceeds. All other special preferred credits en2o! no priorit! a'on( the'selves but 'ust be paid or satisfied pro rata. To 'a*e the proratin( full! effective, the preferred creditors enu'erated in Nos. 2 to 1- of Article 22=1 and Nos. 2 to 1. of Article 22=2 'ust be convened and the i'port of their clai's ascertained in so'e proceedin( 5here the clai's of all 'a! be bindin(l! ad2udicated. ;ith the a'end'ent of Article 11. of the &abor Code b! Republic Act $?14, a three3tier order of preference is established 5herein unpaid 5a(es and other 'onetar! clai's of 5or*ers en2o! absolute preference over all other clai's, includin( those of the 8overn'ent, in cases 5here a debtor3e'plo!er is unable to pa! in full all his obli(ations. The absolute preference (iven to 'onetar! clai's of 5or*ers, to 5hich clai's of the 8overn'ent, i.e., ta0es, are no5 subordinated, 'anifests the clear and deliberate intent of our la5'a*er to put flesh and blood into the e0pressed Constitutional polic! of protectin( the ri(hts of 5or*ers and pro'otin( their 5elfare. 2 1 thus ta*e e0ception to the proposition that a prior for'al declaration of insolvenc! or ban*ruptc! or a 2udicial li<uidation of the e'plo!er>s business is a condition sine (ua non to the operation of the preference accorded to 5or*ers under Article 11. of the &abor Code, for the follo5in( specific reasons7 irst, the 'a2orit! reads into the aforesaid la5 and i'ple'entin( rule a <ualification that is not there. No5here is it stated in the present la& and its ne& i'ple'entin( rule that a prior declaration of ban*ruptc! or 2udicial li<uidation is a condition sine (ua non to the operation of Article 11.. 1n fact, it 5ill be noted that the phrase declaration of ban$ruptc%or 'udicial li(uidation of the emplo%er5s business, 5hich for'erl! appeared in 9ection 1., Rule C111, Boo* 111 of the Revised Rules and Re(ulations 1'ple'entin( the &abor Code has been deleted in the ne5 i'ple'entin( rule. ;hat is to 'e even 'ore obvious and, therefore, si(nificant in the present la5 and i'ple'entin( ne5 rule is the unconditionaland un(ualified grant of priorit! to 5or*ers> 'onetar! clai's over and above all other claims as a(ainst all the assetsof an e'plo!er incapable of full! pa!in( his obli(ations. 9econd, a proceedin( in rem, b! its nature, see*s to bar an! other person 5ho clai's an! interest in the propert! or ri(ht sub2ect of the suit. To '! 'ind, such a proceedin( is not essential or necessar! to enforce the 5or*ers> preferential ri(ht over the assets of the insolvent debtor as a(ainst other creditors of the lo5er tier, as Article 11. of the &abor Code itself bars the satisfaction of clai's of other creditors, includin( the 8overn'ent, until unpaid 5a(es and 'onetar! clai's of the 5or*ers are first satisfied in full. urther, it appears that such a proceedin( is essential onl! 5here the credits are concurrin( and en2o! no preference over one another, but not 5hen the la5 accords to one of the credits absolute priorit% and undisputed supremac%. This sub'ission finds support, b! analo(!, in the case of !e Barreto )s. 6illanue)a, 5here the Court stated7 Thus it beco'es evident that one preferred creditor>s third part! clai' to the proceeds of the foreclosure +as in the case no5 before us, is not the proceedin( conte'plated b! la5 for the enforce'ent of preference under Article 22=2, unless the claimant &ere enforcing credit for ta"es that en'o% absolute priorit%. If none of the claim is for ta"es, a dispute bet&een t&o creditors &ill not enable the court to ascertain the prorata di)idend corresponding to each, because the rights of other creditors li$e&ise en'o%ing preference under Article --.- cannot be ascertained. 3 +E'phasis ours, 1n su', it is to 'e clear that, 5hether or not there be a 2udicial proceedin( in rem, i.e., insolvenc!, ban*ruptc! or li<uidation proceedin(s, the fact re'ains that Con(ress intends that the assets of the insolvent debtor be held, first and above all else, to satisf! in full the unpaid 5a(es and 'onetar! clai's of its 5or*ers. Translated into the case at bar, a for'al declaration of insolvenc! or ban*ruptc! or 2udicial li<uidation of the e'plo!er>s business should not be a price i'posed upon the 5or*ers to enable the' to (et their 'uch needed and alread! ad2udicated unpaid 5a(es. This position, 1 believe, is onl! in *eepin( 5ith a funda'ental state polic! enshrined in the Constitutional 'andate to accord protection to labor. The le(islative intent bein( clear and 'anifest, it is the dut! of this Court, 1 sub'it, not to deci'ate but to (ive it breath and life. ACC%R)1N8&I, 1 vote to )19M199 the )BP petition and to A Paras, 2., concur. 1RM the resolution of the N&RC in favor of &AN).

S#RM'ENTO, J., dissentin(7 1 2oin Mr. :ustice Teodoro Padilla in his dissent. 1t is also '! considered opinion that under Republic Act No. $?14, the pa!'ent of unpaid 5a(es and other benefits to labor en2o!s preference over all other indebtedness, includin( ta0es, of 'ana(e'ent, 5ith or 5ithout a declaration of insolvenc!. 1t is li*e5ise so, because labor en2o!s protection not onl! fro' statute but fro' the ver! Constitution. Thus7 9ec. 1#. The 9tate affir's labor as a pri'ar! social econo'ic force. 1t shall protect the ri(hts of 5or*ers and pro'ote their 5elfare. +Article 11, 000 000 000 9ec. -. The 9tate shall afford full protection to labor, local and overseas, or(ani6ed and unor(ani6ed, and pro'ote full e'plo!'ent and e<ualit! or e'plo!'ent opportunities for all. 1t shall (uarantee the ri(hts of all 5or*ers to self3or(ani6ation, collective bar(ainin( and ne(otiations, and peaceful concerted activities, includin( the ri(ht to stri*e in accordance 5ith la5. The! shall be entitled to securit! of tenure, hu'ane conditions of 5or*, and a livin( 5a(e. The! shall also participate in polic! and decision3'a*in( processes affectin( their ri(hts and benefits as 'a! be provided b! la5. The 9tate shall pro'ote the principle of shared responsibilit! bet5een 5or*ers and e'plo!ers and the preferential use of voluntar! 'odes in settlin( disputes, includin( conciliation, and shall enforce their 'utual co'pliance there5ith to foster industrial peace. The 9tate shall re(ulate the relations bet5een 5or*ers and e'plo!ers reco(ni6in( the ri(ht of labor to its 2ust share in the fruits of production and the ri(ht of enterprises to reasonable returns on invest'ents, and to e0pansion and (ro5th. +Article @111, %n the other hand, under the &abor Code7 Art. -. !eclaration of basic polic% A The 9tate shall afford protection to labor, pro'ote full e'plo!'ent, ensure e<ual 5or* opportunities re(ardless of se0, race or creed and re(ulate the relations bet5een 5or*ers and e'plo!ers. The 9tate shall assure the ri(hts of 5or*ers to self3or(ani6ation, collective bar(ainin( securit! of tenure, and 2ust and hu'ane conditions of 5or*. Art. =. Construction in fa)or of labor A All doubts in the i'ple'entation and interpretation of the provisions of this code, includin( its i'ple'entin( rules and re(ulations, shall be resolved in favor of labor. Bnder the Civil Code7 Art. 1?... The relations bet5een capital and labor are not 'erel! contractual. The! are so i'pressed 5ith public interest that labor contracts 'ust !ield to the co''on (ood. Therefore, such contracts are sub2ect to the special la5s on labor unions, collective bar(ainin(, stri*es and loc*outs, closed shop, 5a(es, 5or*in( conditions, hours of labor and si'ilar sub2ects. 000 000 000 Art. 1?.2. 1n case of doubt, all labor le(islation and all labor contracts shall be construed in favor of the safet! and decent livin( for the laborer. 1t is true that under the Charter, /JnKo person shall be deprived,/ a'on( other thin(s, /of propert! 5ithout due process of la5,/ ho5ever, the basic docu'ent also states, that7 9ec. $. The use of propert! bears a social function, and all econo'ic a(ents shall contribute to the co''on (ood. 1ndividuals and private (roups, includin( corporations, cooperatives, and si'ilar collective or(ani6ations, shall have the ri(ht to o5n, establish, and operate econo'ic enterprises, sub2ect to the dut! of the 9tate to pro'ote distributive 2ustice and to intervene 5hen the co''on (ood so de'ands. +Article @11, Pascual sa!s that in an! productive econo'!, the first factor is labor. JPA9CBA&, &AB%R AN) TENANCI RE&AT1%N9 &A; 2 +1"?4 ed.,K. 1 a(ree 5ith hi'. or in an! enterprise, it is labor on 5hich 'ana(e'ent depends to run its business, to till its land, and to 'a*e its 'one!. Iet, labor has been the door'at of the econo'! 5hen it should be its hub. And no5, 5e 5ill 'a*e the' fall in line alon( 5ith creditors of 'ana(e'ent in collectin( 5hat it +labor, alread! o5ns A its 2ust 5a(es. 1 do not thin* that this is in accord 5ith established 9tate policies.

S*+ara,* O+-(-o(s

CRU., J., dissentin(7 1 5as the lone dissenter in ,epublic ). Peralta, 14. 9CRA -?, 5hich is the 'ainsta! of the present 'a2orit! ponencia. Even then, 1 5as convinced that it 5as the intention of the le(islature to (ive absolute preference to the 5or*ers> clai's pursuant to the social 2ustice polic!. The a'end'ent of Article 11. of the &abor Code onl! stren(thens that conviction and, 1 li*e to thin*, vindicates '! ori(inal position. 1 reiterate it no5 and repeat that7 9ocial :ustice is not a 'ere catch phrase to be 'outhed 5ith sha' fervor in &abor )a! celebrations for the delectation and seduction of the 5or*in( class. 1t is a 'andate 5e should pursue 5ith ener(! and sincerit! if 5e are to trul! insure the di(nit! and 5ell3bein( of the laborer. 1 a' proud to dissent once a(ain on the side of labor.

P#D'!!#, J., dissentin(7 The 'aterial facts are riot disputed. &ira( Te0tile +&1RA8, ceased operations b! earl! 1"#2. Pursuant to a final and e0ecutor! 2ud('ent of the N&RC, dated 2. March 1"#-, &1RA8 5as ad2ud(ed liable to its 5or*ers for unpaid 5a(es and salaries 5hich, as of 12 ebruar! 1"#$, a'ounted to P$,2"2,-#..... &1RA8>s onl! re'ainin( asset 5as 'ort(a(ed to )evelop'ent Ban* of the Philippines +)BP, 5hich on 14 April 1"#- foreclosed the 'ort(a(e and ac<uired said propert! at public auction for P-1,-=$.=$2."., in partial satisfaction of &1RA8>s indebtedness to )BP. &1RA8>s 5or*ers throu(h their union +&AN), thereupon sou(ht to (arnish on )BP the proceeds of the foreclosure sale, to the e0tent of their ad2ud(ed unpaid 5a(es +P$,2"2,-#....,. The N&RC ruled for &AN) over )BP>s ob2ection. The issue therefore, in practical ter's, is 5hether P$,2"2,-#.... should be deducted fro' the P-1,-=$,=$2.". reali6ed b! )BP fro' the foreclosure sale of &1RA8>s propert!, to full! satisf! &AN)>s clai' for &1RA8 5or*ers> unpaid 5a(es, thereb! leavin( a balance of P24,.4=,.#2.". onl! in partial satisfaction of &1RA8>s debt to )BP. The 'a2orit! holds that &AN) 'a! not enforce its first preference in the satisfaction of unpaid 'onetar! clai's of its 'e'bers, )iz. &1RA8>s 5or*ers, over that of )BP, in the absence of a for'al declaration of ban*ruptc! or 2udicial li<uidation of &1RA8>s business. 1 re(ret that 1 cannot 2oin the 'a2orit! rulin( in the li(ht of the a'end'ent to Article 11. of the &abor Code b! Republic Act $?14, approved on 2 March 1"#", and the resultant a'end'ent of 9ection 1., Rule C111, Boo* 111 of the Revised Rules and Re(ulations 1'ple'entin( the &abor Code. Before its a'end'ent b! Republic Act $?14, Article 11. of the &abor Code provided A ;or*er preference in case of ban*ruptc!. A 1n the event of ban*ruptc! or li<uidation of an e'plo!er>s business, his 5or*ers shall en2o! first preference as re(ards 5a(es due the' for services rendered durin( the period prior to the ban*ruptc! or li<uidation, an! provision of la5 to the contrar! not5ithstandin(. Bnpaid 5a(es shall be paid in full before other creditors 'a! establish an! clai' to a share in the assets of the e'plo!er. After Republic Act $?14, Art. 11. no5 provides7 ;or*er preference in case of ban*ruptc!. A 1n the event of ban*ruptc! or li<uidation of an e'plo!er>s business, his 5or*ers shall en2o! first preference as re(ards their 5a(es and other 'onetar! clai's, an! provisions of la5 to the contrar! not5ithstandin(. 9uch unpaid 5a(es and 'onetar! clai's shall be paid in full before clai's of the (overn'ent and other creditors 'a! be paid. 9ection 1. of the 1'ple'entin( Rules, before Republic Act $?14 provided7 Pa!'ent of 5a(es in case of ban*ruptc!. A Bnpaid 5a(es earned b! the e'plo!ees before the declaration of ban*ruptc! or 2udicial li<uidation of the e'plo!er>s business shall be (iven first preference and shall be paid in full before other creditors 'a! establish an! clai' to a share in the assets of the e'plo!er. After Republic Act $?14, 9ection 1. of the Rules no5 provides7 Pa!'ent of 5a(es and other 'onetar! clai's in case of ban*ruptc!. A 1n case of ban*ruptc! or li<uidation of the e'plo!er>s business, the unpaid 5a(es and other 'onetar! clai's of the e'plo!ees shall be (iven first preference and shall be paid in full before the clai's of (overn'ent and other creditors 'a! be paid. The 'a2orit!, in '! considered opinion, has failed to full! ta*e into account the radical chan(e introduced b! Republic Act $?14 into the s!ste' of priorities or preferences a'on( credits or creditors ordained b! the Civil Code. Bnder the provisions of the Civil Code, specificall!, Articles 22=1 and 22=2, 2ointl! 5ith Articles 22=$ to 22=", a t5o3tier order of preference of credits is established. The first tier includes onl! ta0es, duties and fees on specific 'ovable or i''ovable propert!. All other special preferred credits stand on a second tier. 1 Bnder the s!ste' of preferences in the Civil Code, onl! ta0es en2o! absolute preference i.e., the! e0clude the credits of the lo5er order until such ta0es are full! satisfied out of the proceeds of the sale of the propert! sub2ect of the preference, and ta0es can even e0haust such proceeds. All other special

preferred credits en2o! no priorit! a'on( the'selves but 'ust be paid or satisfied pro rata. To 'a*e the proratin( full! effective, the preferred creditors enu'erated in Nos. 2 to 1- of Article 22=1 and Nos. 2 to 1. of Article 22=2 'ust be convened and the i'port of their clai's ascertained in so'e proceedin( 5here the clai's of all 'a! be bindin(l! ad2udicated. ;ith the a'end'ent of Article 11. of the &abor Code b! Republic Act $?14, a three3tier order of preference is established 5herein unpaid 5a(es and other 'onetar! clai's of 5or*ers en2o! absolute preference over all other clai's, includin( those of the 8overn'ent, in cases 5here a debtor3e'plo!er is unable to pa! in full all his obli(ations. The absolute preference (iven to 'onetar! clai's of 5or*ers, to 5hich clai's of the 8overn'ent, i.e., ta0es, are no5 subordinated, 'anifests the clear and deliberate intent of our la5'a*er to put flesh and blood into the e0pressed Constitutional polic! of protectin( the ri(hts of 5or*ers and pro'otin( their 5elfare. 2 1 thus ta*e e0ception to the proposition that a prior for'al declaration of insolvenc! or ban*ruptc! or a 2udicial li<uidation of the e'plo!er>s business is a condition sine (ua non to the operation of the preference accorded to 5or*ers under Article 11. of the &abor Code, for the follo5in( specific reasons7 irst, the 'a2orit! reads into the aforesaid la5 and i'ple'entin( rule a <ualification that is not there. No5here is it stated in the present la& and its ne& i'ple'entin( rule that a prior declaration of ban*ruptc! or 2udicial li<uidation is a condition sine (ua non to the operation of Article 11.. 1n fact, it 5ill be noted that the phrase declaration of ban$ruptc%or 'udicial li(uidation of the emplo%er5s business, 5hich for'erl! appeared in 9ection 1., Rule C111, Boo* 111 of the Revised Rules and Re(ulations 1'ple'entin( the &abor Code has been deleted in the ne5 i'ple'entin( rule. ;hat is to 'e even 'ore obvious and, therefore, si(nificant in the present la5 and i'ple'entin( ne5 rule is the unconditionaland un(ualified grant of priorit! to 5or*ers> 'onetar! clai's over and above all other claims as a(ainst all the assetsof an e'plo!er incapable of full! pa!in( his obli(ations. 9econd, a proceedin( in rem, b! its nature, see*s to bar an! other person 5ho clai's an! interest in the propert! or ri(ht sub2ect of the suit. To '! 'ind, such a proceedin( is not essential or necessar! to enforce the 5or*ers> preferential ri(ht over the assets of the insolvent debtor as a(ainst other creditors of the lo5er tier, as Article 11. of the &abor Code itself bars the satisfaction of clai's of other creditors, includin( the 8overn'ent, until unpaid 5a(es and 'onetar! clai's of the 5or*ers are first satisfied in full. urther, it appears that such a proceedin( is essential onl! 5here the credits are concurrin( and en2o! no preference over one another, but not 5hen the la5 accords to one of the credits absolute priorit% and undisputed supremac%. This sub'ission finds support, b! analo(!, in the case of !e Barreto )s. 6illanue)a, 5here the Court stated7 Thus it beco'es evident that one preferred creditor>s third part! clai' to the proceeds of the foreclosure +as in the case no5 before us, is not the proceedin( conte'plated b! la5 for the enforce'ent of preference under Article 22=2, unless the claimant &ere enforcing credit for ta"es that en'o% absolute priorit%. If none of the claim is for ta"es, a dispute bet&een t&o creditors &ill not enable the court to ascertain the prorata di)idend corresponding to each, because the rights of other creditors li$e&ise en'o%ing preference under Article --.- cannot be ascertained. 3 +E'phasis ours, 1n su', it is to 'e clear that, 5hether or not there be a 2udicial proceedin( in rem, i.e., insolvenc!, ban*ruptc! or li<uidation proceedin(s, the fact re'ains that Con(ress intends that the assets of the insolvent debtor be held, first and above all else, to satisf! in full the unpaid 5a(es and 'onetar! clai's of its 5or*ers. Translated into the case at bar, a for'al declaration of insolvenc! or ban*ruptc! or 2udicial li<uidation of the e'plo!er>s business should not be a price i'posed upon the 5or*ers to enable the' to (et their 'uch needed and alread! ad2udicated unpaid 5a(es. This position, 1 believe, is onl! in *eepin( 5ith a funda'ental state polic! enshrined in the Constitutional 'andate to accord protection to labor. The le(islative intent bein( clear and 'anifest, it is the dut! of this Court, 1 sub'it, not to deci'ate but to (ive it breath and life. ACC%R)1N8&I, 1 vote to )19M199 the )BP petition and to A Paras, 2., concur. 1RM the resolution of the N&RC in favor of &AN).

S#RM'ENTO, J., dissentin(7 1 2oin Mr. :ustice Teodoro Padilla in his dissent. 1t is also '! considered opinion that under Republic Act No. $?14, the pa!'ent of unpaid 5a(es and other benefits to labor en2o!s preference over all other indebtedness, includin( ta0es, of 'ana(e'ent, 5ith or 5ithout a declaration of insolvenc!. 1t is li*e5ise so, because labor en2o!s protection not onl! fro' statute but fro' the ver! Constitution. Thus7 9ec. 1#. The 9tate affir's labor as a pri'ar! social econo'ic force. 1t shall protect the ri(hts of 5or*ers and pro'ote their 5elfare. +Article 11, 000 000 000 9ec. -. The 9tate shall afford full protection to labor, local and overseas, or(ani6ed and unor(ani6ed, and pro'ote full e'plo!'ent and e<ualit! or e'plo!'ent opportunities for all. 1t shall (uarantee the ri(hts of all 5or*ers to self3or(ani6ation, collective bar(ainin( and ne(otiations, and peaceful concerted activities, includin( the ri(ht to stri*e in accordance 5ith la5. The! shall be entitled to securit! of tenure, hu'ane conditions of 5or*, and a livin( 5a(e. The! shall also participate in polic! and decision3'a*in( processes affectin( their ri(hts and benefits as 'a! be provided b! la5. The 9tate shall pro'ote the principle of shared responsibilit! bet5een 5or*ers and e'plo!ers and the preferential use of voluntar! 'odes in settlin( disputes, includin( conciliation, and shall enforce their 'utual co'pliance there5ith to foster industrial peace.

The 9tate shall re(ulate the relations bet5een 5or*ers and e'plo!ers reco(ni6in( the ri(ht of labor to its 2ust share in the fruits of production and the ri(ht of enterprises to reasonable returns on invest'ents, and to e0pansion and (ro5th. +Article @111, %n the other hand, under the &abor Code7 Art. -. !eclaration of basic polic% A The 9tate shall afford protection to labor, pro'ote full e'plo!'ent, ensure e<ual 5or* opportunities re(ardless of se0, race or creed and re(ulate the relations bet5een 5or*ers and e'plo!ers. The 9tate shall assure the ri(hts of 5or*ers to self3or(ani6ation, collective bar(ainin( securit! of tenure, and 2ust and hu'ane conditions of 5or*. Art. =. Construction in fa)or of labor A All doubts in the i'ple'entation and interpretation of the provisions of this code, includin( its i'ple'entin( rules and re(ulations, shall be resolved in favor of labor. Bnder the Civil Code7 Art. 1?... The relations bet5een capital and labor are not 'erel! contractual. The! are so i'pressed 5ith public interest that labor contracts 'ust !ield to the co''on (ood. Therefore, such contracts are sub2ect to the special la5s on labor unions, collective bar(ainin(, stri*es and loc*outs, closed shop, 5a(es, 5or*in( conditions, hours of labor and si'ilar sub2ects. 000 000 000 Art. 1?.2. 1n case of doubt, all labor le(islation and all labor contracts shall be construed in favor of the safet! and decent livin( for the laborer. 1t is true that under the Charter, /JnKo person shall be deprived,/ a'on( other thin(s, /of propert! 5ithout due process of la5,/ ho5ever, the basic docu'ent also states, that7 9ec. $. The use of propert! bears a social function, and all econo'ic a(ents shall contribute to the co''on (ood. 1ndividuals and private (roups, includin( corporations, cooperatives, and si'ilar collective or(ani6ations, shall have the ri(ht to o5n, establish, and operate econo'ic enterprises, sub2ect to the dut! of the 9tate to pro'ote distributive 2ustice and to intervene 5hen the co''on (ood so de'ands. +Article @11, Pascual sa!s that in an! productive econo'!, the first factor is labor. JPA9CBA&, &AB%R AN) TENANCI RE&AT1%N9 &A; 2 +1"?4 ed.,K. 1 a(ree 5ith hi'. or in an! enterprise, it is labor on 5hich 'ana(e'ent depends to run its business, to till its land, and to 'a*e its 'one!. Iet, labor has been the door'at of the econo'! 5hen it should be its hub. And no5, 5e 5ill 'a*e the' fall in line alon( 5ith creditors of 'ana(e'ent in collectin( 5hat it +labor, alread! o5ns A its 2ust 5a(es. 1 do not thin* that this is in accord 5ith established 9tate policies. %oo,(o,*s PA)1&&A, :., dissentin(7 1 Republic v. Peralta, 14. 9CRA -?. 2 Art. 11, 9ection 1# of the 1"#? Constitution provides7 The 9tate affir's labor as a pri'ar! social econo'ic force. 1t shall protect the ri(hts of 5or*ers and pro'ote their 5elfare. - )e Barreto v. Cillanueva, $ 9CRA "2#.