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Labor Relations



Petitioners-members of Brotherhood Labor Unit Movement of the Philippines
(BLUM), worked as cargadores or pahinante since 1961 at the SMC Plant. Sometime in
January 1969, the petitioner workers numbering 140 organized themselves and engaged in
union activities.
Believing that they are entitled to overtime and holiday pay, the petitioners aired their
gripes and grievances but it was not heeded by the respondents. One of the union member
was dismissed from work. Hence, the petitioners filed a complaint of unfair labor practice
against respondent SMC on the ground of illegal dismissal.
On the other hand, SMC argued that the complainant are not or have never been their
employees but they are the employees of the Guaranteed Labor Contractor, an independent
labor contracting firm
Labor Arbiter Nestor Lim rendered a decision in favor of the complainants which was
affirmed by the NLRC
On appeal, the Secretary set aside the NLRC ruling stressing the absence of an employer-
employee relationship

Issue: Whether an employer-employee relationship exists between petitioners and respondent
San Miguel Corporation

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

In the CAB, petitioners worked continuously and exclusively for an average of 7 years for the
company. Considering the length of time that the petitioners have worked, there is justification to
conclude that they were engaged to perform activities necessary or desirable in the usual
business of trade of the respondent. Hence, petitioners are considered regular employees.

Even assuming that there is a contract of employment executed between SMC and the said labor
contractor, the court ruled that Guaranteed and Reliable Labor contractors have neither
substantial capital nor investment to qualify as an independent contractor under the law. The
premises, tools and equipments used by the petitioners in their jobs are all supplied by the
respondent SMC. It is only the manpower or labor force which the alleged contractors supply,
suggesting the existence of a "labor only" contracting scheme prohibited by law

It is important to emphasize that that in a truly independent contractor-contractee relationship,
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.
In the CAB, the alleged independent contractors were paid a lump sum representing only the
salaries the workers were entitled to, arrived at by adding the salaries of each worker which
depend on the volume of work they had accomplished individually. Therefore, there is no
independent contractor-contractee relationship.




Respondent-Union, the National Federation of Sugar Workers-Food and General Trades,
filed an action against petitioner Hawaiian Phil Co. for claims under RA 809 (The Sugar Act
of 1952). Respondent Union alleged that they have never availed of the benefits due them
under the law.
Under the said act: 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. 60% of the increase participation for the laborers and
40% for the planters.
Petitioner argued that respondent Labor Arbiter Gulmatico has no jurisdiction over the
case considering their case does not fall under those enumerated in Article 217 of the Labor
Code which provides the jurisdiction of Labor Arbiters and the Commission. Further,
petitioner contends that it has no ER-EE relationship with the respondent sugar workers and
that respondent union has no cause of action because it is the planters-employers who is
liable to pay the workers share under LOI No. 854.

Issue1: Whether public respondent Labor Arbiter has jurisdiction to hear and decide the case
against petitioner
While jurisdiction over controversies involving agricultural workers has been transferred from
the Court of Agrarian Relations to the Labor Arbiters under the Labor Code, said transferred
jurisdiction is however, not without limitations. The controversy must fall under one of the cases
enumerated under the Labor Code which arise out of or are in connection with an ER-EE

In the CAB, there is no ER-EE relationship between petitioner company and respondent union.
Hence, respondent Labor Arbiter has no jurisdiction to hear and decide the case against

Issue1: Whether respondent union has a cause of action
To have a cause of action, the claimant must show that he has a legal right and the respondent a
correlative duty in respect thereof, which the latter violated by some wrongful act or omission.

In the instant case, it would show that the payment of the workers share is liability of the
planters-employers, and not of the petitioner milling company. It is disputed that petitioner
milling company has already distributed to its planters their respective shares. Hence, it has
fulfilled its part and has nothing more to do with the subsequent contribution by the planters of
the workers share.




Petitioners were hired to work as tower crane operators by one Alfredo Young, a building
contractor doing business in the name of Youngs construction. In 1991, they were
transferred to Cebu City to work for Youngs Shoemart Cebu Project. Petitioner William
Dayag asked permission to go to Manila to attend family matters and was allowed to do so
but was not paid for January 23-30 due to his accountability for the loss of certain
construction tools. The other petitioners left due to harassment by Young. Thereafter,
petitioners banded together and filed a complaint against Young before the NCR Arbitration
Branch NLRC which was assigned to Labor Arbiter Cenizares.
Young filed a Motion to transfer the case to the Regional Arbitration Branch, Region
VII of the NLRC. He contended that the case should be filed in Cebu City because there is
where the workplace of the petitioners.
Petitioners opposed the same, arguing that all of them are from Metro Manila and that
they could not afford trips to Cebu. Besides, they claimed that respondents main office is in
Corinthian Garden in QC.
Labor Arbiter Cenizares GRANTED Youngs motion to transfer the case in Cebu.
Petitioners appealed to NLRC but it was dismissed. Hence, they filed a MFR and this
time the Commission SET ASIDE its previous decision and remanded the case to the
original arbitration branch of the NCR for further proceedings.
Young filed his own MFR and the NLRC reinstated its first decision directing the
transfer of the case to Cebu City.

Issue: Whether the Labor Arbiter acted with grave abuse of discretion when it entertained
Youngs motion to transfer

The SC ruled that litigations should, as much as possible, be decided on the merits and not
technicalities. Petitioners were able to file an opposition on the motion to transfer case which
was considered by Labor Arbiter Cenizares. Hence, there is no showing that they have been
unduly prejudiced by the motions failure to give notice and hearing.

However, Young cannot derive comfort from this petition. The SC held that the question of
venue relates more to the convenience of the parties rather than upon the substance and merits of
the case. This is to assure convenience for the plaintiff and his witness and to promote the ends
of justice under the principle that the State shall afford protection to labor. The reason for this
is that the worker, being the economically-disadvantaged party, the nearest governmental
machinery to settle the dispute must be placed at his immediate disposal, and the other party is
not to be given the choice of another competent agency sitting in another place as this will
unduly burden the former

In the instant case, the ruling specifying the NCR Arbitration Branch as the venue of the present
action cannot be considered oppressive to Young because his residence in Corinthian Gardens
also serves as his correspondent office. Hearing the case in Manila would clearly expedite the
proceedings and bring speedy resolution to the instant case.




The Commercial Bank and Trust Company entered into a collective bargaining
agreement with Commercial Bank and Trust Company Union, representing the file and rank
of the bank with a membership of over 1,000 employees
In 1980, the union, together with the National Union of Bank EEs submitted to bank
management proposals for the negotiation of a new collective bargaining agreement. The
following day, however, the bank suspended negotiations with the union. The bank entered
into a merger with BPI which assumed all assets and liabilities.
The Union went to the CFI Manila, presided over by respondent Judge Lazaro, and filed
a complaint for specific performance, damages, and preliminary injunction against private
Private Respondent filed a Motion to Dismiss on the ground of lack of jurisdiction of
the court. Respondent Judge dismissed the case on the ground that the complaint partook of
unfair labor practice dispute and jurisdiction over which is vested in the labor arbiter.

Issue: Whether courts may take cognizance of claims for damages arising from labor controversy

The SC sustained the dismissal of the case and held that the act complained of involves
collecting bargaining which is categorized to be an unfair labor practice. Under the Labor Code,
all cases involving unfair labor practices shall be under the jurisdiction of the labor arbiters.

As correctly held by the respondent court, an unfair labor practice controversy is within the
original and exclusive jurisdiction of the Labor Arbiters and the exclusive appellate jurisdiction
of the NLRC. Jurisdiction is conferred by law and not necessarily by the nature of action. In the
CAB, PD No. 442, as amended by Batas Blg. 70, has vested jurisdiction upon the Labor Arbiters,
a jurisdiction the courts may not assume.


DY vs NLRC (1986)


Private Respondent Carlito H. Vailoces was the manager of the Rural Bank of Ayungon
(Negros Oriental). He was also a director and stockholder of the bank.
In 1983, a special stockholders meeting was called for the purpose of electing the
members of the banks Board of Directors. Petitioner Lorenzo Dy was elected president.
Vailoces was not re-elected as bank manager.
Vailoces filed a complaint for illegal dismissal and damages with the Ministry of Labor
and Employment against Lorenzo Dy asserting that Dy, after obtaining control of the
majority stock of the bank, called an illegal stockholders meeting and elected a Board of
Directors controlled by him; and that he was illegally dismissed as manager, without giving
him the opportunity to be heard first.
Dy denied the charge of illegal dismissal and pointed out that Vailoces position was an
elective one, and he was not re-elected as bank manager because of the Boards loss of
confidence in him brought about by his absenteeism and negligence in the performance of his
The Executive Labor Arbiter ruled that Vailoces was illegally dismissed because he was
not afforded due process of law. NLRC affirmed the decision of the Labor Arbiter because of
the appeal of the petitioners was filed late.

Issue: Whether the election of the Directors were validly held

Under PD No. 902-A, Controversies in the election or appointments of directors, trustees,
officers or managers of such corporations, partnerships or associations, are explicitly declared to
be within the original and exclusive jurisdiction of the Securities and Exchange Commission.

In the CAB, it shows that the controversy between the parties is intra-corporate in nature because
it revolves around the election of directors, officers or managers of the Rural Bank of Ayungon,
the relation between and among its stockholders, and between them and the corporation. It is
well settled that the decision of a tribunal not vested with appropriate jurisdiction is null and

Therefore, the judgment of the Labor Arbiter and the NLRC are void for lack of jurisdiction.


ESPINO vs NLRC and PAL (1995)

Petitioner Leslie W. Espino was the Exec. Vice President-Chief Operating Officer of
respondent Phil Airlines (PAL) when his service was terminated in 1990 as a result of the
findings of the panels created by then President Corazon C. Aquino to investigate the
administrative charges filed against him. It appears that petitioner and other several senior
officers of PAL were charged for their involvement in 4 cases, labeled as Goldair,
Robelle, Kabash/Primavera, and Middle East.
The PAL Board of Directors issued separate resolutions wherein Espino was considered
resign from the service effective immediately for loss of confidence
Espino filed a complaint for illegal dismissal against PAL with the NLRC, Arbitration
Branch, NCR.
PAL argued that board resolutions cannot be reviewed by the NLRC and that the recourse
of the petitioner Espino should have been addressed by way of appeal, to the OP.
Labor Arbiter Cresencio J. Ramos rendered a decision in favor of petitioner Espino
PAL asserted that the Labor Arbiters decision is null and void for lack of jurisdiction
over the subject matter as it is the SEC, and not the NLRC which has jurisdiction over
involving dismissal or removal of corporate officers.
NLRC promulgated a resolution and this time ruled in favor of PAL on the ground of
lack of jurisdiction
Petitioner Espino contended that it is the NLRC that has jurisdiction over the case as it
involves the termination of a regular employee and involves claim for backwages and other
benefits and damages

Issue: Whether the NLRC has jurisdiction over the complaint filed by the petitioner for illegal

Under P.D. No. 902-A, it is the Securities and Exchange Commission and not the NLRC that has
original and exclusive jurisdiction over cases involving the removal from employment of
corporate officers. Under the said decree, the SEC has the exclusive and original jurisdiction to
hear and decide cases involving Controversies in the election or appointments of directors,
trustees, officers or managers of such corporations, partnerships or associations.

It has been ruled that a corporate officers dismissal is always a corporate act and/or an intra-
corporate controversy and that nature is not altered by the reason or wisdom which the Board of
Directors may have in taking such action. Evidently, this intra-corporate controversy must be
place under the specialized competence and expertise of the SEC.

The fact that petitioner sought payment of his backwages, other benefits, as well as damages and
attorney's fees in his complaint for illegal dismissal will not operate to prevent the SEC from
exercising its jurisdiction under PD 902-A. As to the contention of Espino that PAL is estopped
from questioning the jurisdiction of the NLRC, it is well-settled that jurisdiction over the subject
matter is conferred by law and the question of lack of jurisdiction may be raised anytime even on




Ernest Movilla, who was a CPA during his lifetime, was hired by Mainland in 1977.
Thereafter, he was promoted to the position of Administrative Officer. He has a monthly
salary of P4,700.00/month and he was registered with SSS as an employee of petitioner
In 1991, The DOLE conducted a routine inspection on petitioner corporation and found
that it committed some irregularities in the conduct of its business. On the basis of its
findings, DOLE ordered petitioner corporation to pay its 13 employees, which included
Movilla, an amount representing their salaries, holiday pay, service incentive leave pay
differentials, unpaid wages and 13th month pay. All the employees listed in the DOLEs
order were paid by petitioner except Movilla.
Movilla filed a case against petitioner with the DOLE in Davao City. However, in 1992,
Movilla died while the case was being tried. Hence, he was substituted by his heirs, private
respondents herein.
The Labor Arbiter dismissed the complaint on the ground that the controversy is intra-
corporate in nature hence it is the SEC who has jurisdiction over and not the Labor Arbiter.
On appeal, the NLRC reversed the Labor Arbiter and ruled that the case was one which
involved a labor dispute, thus the NLRC has jurisdiction to resolve the case

Issue: Whether the NLRC has jurisdiction over the controversy and not the SEC

The NLRC has jurisdiction over the case. The fact that the parties involved in the controversy are
all stockholders and the corporation does not necessarily place the dispute within the jurisdiction
of SEC. In order that the SEC can take cognizance of a case, the controversy must pertain to
factors such as the status or relationship of the parties or the nature of the question that is the
subject of their controversy. Furthermore, it does not necessarily follow that every conflict
between corporation and its stockholders can only be resolve by the SEC.

In the CAB, the claim for unpaid wages and separation pay involves a labor dispute. It does not
involve an intra-corporate matter, even when it is between a stockholder and a corporation. It
relates to an ER-EE relationship which is distinct from the corporate relationship of one with the
other. Therefore, since the complaint of Movilla involves a labor dispute, it is the NLRC which
has jurisdiction over the CAB.




Respondent Abraham Tumala, Jr. was salesman petitioner company in Davao City. In the
annual Sumakwel contest conducted by the company, he was declared the winner of the
Lapu-Lapu Award for his performance as top salesman of the year, an award which
entitled him to a prize of a house and lot. Petitioner company, despite demands, have unjustly
refused to deliver said prize.
It was alleged that in 1980, petitioner company, in a manner oppressive to labor and
without prior clearance from the Ministry of Labor, arbitrarily and illegally terminated his
employment. Hence, Tumala filed a complaint in the CFI Davao and prayed that petitioner be
ordered to deliver his prize of house and lot or its cash equivalent, and to pay his back
salaries and separation benefits.
Petitioner moved to dismiss the complaint on grounds of lack of jurisdiction. Respondent
Tumala maintains that the controversy is triable exclusively by the court of general

Issue: Whether it is the court of general jurisdiction and not the Labor Arbiter that has exclusive
jurisdiction over the recovery of unpaid salaries, separation and damages

SC ruled that the Labor Arbiter has exclusive jurisdiction over the case. Jurisdiction over the
subject matter is conferred by the sovereign authority which organizes the court; and it is given
by law. Jurisdiction is never presumed; it must be conferred by law in words that do not admit of

Under the Labor Code, the NLRC has the exclusive jurisdiction over claims, money or
otherwise, arising from ER-EE relations, except those expressly excluded therefrom. The claim
for the said prize unquestionable arose from an ER-EE relation and, therefore, falls within the
coverage of P.D. 1691, which speaks of all claims arising from ER-EE relations, unless
expressly excluded by this Code. To hold that Tumalas claim for the prize should be passed
upon by the regular courts of justice would be to sanction split jurisdiction and multiplicity of
suits which are prejudicial to the orderly of administration of justice.




Petitioner San Miguel Corporation (SMC) sponsored an Innovation Program which grant
cash rewards to all SMC employees who submit to the corporation ideas and suggestions
found to beneficial to the corporation.
Private Respondent Rustico Vega, who is a mechanic in the Bottling Department of the
SMC submitted an innovation proposal which supposed to eliminate certain defects in the
quality and taste of the product San Miguel Beer Grande.
Petitioner Corporation did not accept the said proposal and refused Mr. Vegas
subsequent demands for cash award under the innovation program. Hence, Vega filed a
complaint with the then Ministry of Labor and Employment in Cebu. He argued that his
proposal had been accepted by the methods analyst and was implemented by the SMC and it
finally solved the problem of the Corporation in the production of Beer Grande.
Petitioner denied of having approved Vegas proposal. It stated that said proposal was
turned down for lack of originality and the same, even if implemented, could not achieve
the desire result. Further, petitioner Corporation alleged that the Labor Arbiter had no
The Labor Arbiter dismissed the complaint for lack of jurisdiction because the claim of
Vega is not a necessary incident of his employment and does not fall under Article 217 of
the Labor Code. However, in a gesture of compassion and to show the governments concern
for the working man, the Labor Arbiter ordered petitioner to pay Vega P2,000 as financial
assistance. Both parties assailed said decision of the Labor Arbiter. The NLRC set aside the
decision of the Labor Arbiter and ordered SMC to pay complainant the amount of P60,000

Issue: Whether the Labor Arbiter and the Commission has jurisdiction over the money claim
filed by private respondent

The Labor Arbiter and the Commission has no jurisdiction over the money claim of Vega.

The court ruled that the money claim of private respondent Vega arose out of or in connection
with his employment with petitioner. However, it is not enough to bring Vegas money claim
within the original and exclusive jurisdiction of Labor Arbiters.

In the CAB, the undertaking of petitioner SMC to grant cash awards to employees could ripen
into an enforceable contractual obligation on the part of petitioner SMC under certain
circumstances. Hence, the issue whether an enforceable contract had arisen between SMC and
Vega, and whether it has been breached, are legal questions that labor legislations cannot
resolved because its recourse is the law on contracts.

Where the claim is to be resolved not by reference to the Labor Code or other labor relations
statute or a collective bargaining agreement BUT by the general civil law, the jurisdiction over
the dispute belongs to the regular courts of justice and not to the Labor Arbiter and NLRC.


SUARIO vs BPI (1989)


Petitioner Leonardo D. Suario was the head of the loan section of respondent BPI in
1976. During his employment he pursued his studies of law with the consent of the BPI
Sometime in March 1976, Suario verbally requested the then VP and Branch Manager,
Mr. Armando N. Guilatico, for a 6-month leave of absence without pay in order for him to
take the pre-bar review in Manila. Mr. Guilatico informed Suario that there would be no
problem as to the requested leave of absence. Sometime in May 1976, Suario received a
verbal notice from the new Branch Manager, Mr. Vicente Casino, that he was approved only
a 30 day LOA. However, Mr Guilatico, then assigned in Head Office as VP advised Mr.
Casino to inform Suario to avail the 30-day LOA and proceed to Manila since the request
would be ultimately granted. Suario availed the 30-day LOA and proceeded to Manila.
During the 1st week of August, he received a letter ordering him to report back for work
since his request was disapproved. He decided not to report back because of the considerable
expenses already incurred in Manila. Hence, he received a application for a clearance to
terminate on the ground of resignation/or abandonment. Suario failed to file his opposition
because he was busy taking up the review
During the 1st week of December 1976, Suario went to respondent BPI but was verbally
informed that he was already dismissed. He wrote a letter to the respondent bank requesting
for a written and formal advise as to his real status. The lawyers of BPI replied that his
services is terminated. Therefore, Suario filed a complaint for separation pay, damages and
attorneys fees against the BPI on the ground that he was illegally dismissed.
The Labor Arbiter ordered BPI to pay Suarios claim for separation pay. His claim for
damages and attorneys fee were dismissed for lack of merit
On appeal, NLRC affirmed the decision of the Labor Arbiter

Issue1: Whether NLRC has no authority to entertain claims for moral and other forms of
P.D. 1691, a decree which substantially reenacted Article 217 of the Labor Code in its original
form, nullified P.D. 1367 and restored to the Labor Arbiters and the NLRC their jurisdiction to
award all kinds of damages in cases arising from ER-EE relationship.

Issue2: Whether petitioner Suario is entitled to his claim for moral damages
Although it is already settled that Labor Arbiters are allowed to award moral and other forms of
damages arising from ER-EE relations, it is consistently ruled that in the absence of a wrongful
act or omission or of fraud or bad faith, moral damages cannot be awarded

The SC did not find any bad faith or fraud on the part of the bank officials who denied the
petitioners request for 6 months leave of absence without pay. He was merely given personal
assurances which could be reconsidered in later developments. There is no evidence that they
meant to deceive the petitioner.

Therefore, the fact that petitioners request was denied, does not entitle him to damages.




Respondent Mercantile Corp is engaged in the sale and distribution of Ice Cream in
Davao. Petitioner, who was employed as driver of respondents delivery van, was the
President MERCO Employees Labor Union, an affiliate of the Federation of Free Workers
An investigation was conducted due to reports that Soco was carrying on his union
activities during working hours. It appears that on January 1979, Soco was ordered to deliver
ice cream at Imperial Hotel and Your Goody Mart, but he deviated from his usual route and
went to his co-employee, who was then off duty. The personnel officer advised Soco to
report to his office to explain his unauthorized deviation but Soco did not comply. MERCO
wrote to FFW asking for a grievance conference but Soco refused to attend in his belief that
such in unnecessary. Hence, MERCO suspended Soco for 5 days for violation of Company
Rule No. 19(a).
On February 13, 1979, Soco, after making deliveries of ice cream, went to the Office of
the SPFL Union. The Manager of MERCO saw the company vehicle parked along the street.
He called two of his co-employees and took out the rotor of the van. When Soco came out of
the building, he was unable to start the engine and called for company assistance. Again, he
was advised to report to the office to explain but refused to do so. He also refused to attend in
the grievance conference.
Soco filed a complaint for Unfair Labor Practice against MERCO alleging that the 5 days
suspension imposed on him was on account of his union activities. On the other hand,
MERCO filed an application for clearance to terminate the services of Soco. These 2 cases
were consolidated and tried jointly as agreed by the contending parties
The Regional Director granted MERCOs application to terminate employment of
petitioner and dismissed the Socos complaint for unfair labor practice
On appeal, the Deputy Minister of Labor affirmed
Petitioner Soco argued that under Policy No. 6 of the Ministry of Labor and Employment
(MOLE), the Regional Director has no jurisdiction to hear and decide unfair labor practice
cases because such belongs to the Conciliation Section of the Regional Office of the MOLE.
In short, such cases should be first resolved by the Labor Arbiter and not the Regional
Director. Furthermore, Soco asserts that the Deputy Minister of Labor violated the
constitutional provision of security of tenure of employees and that assuming that he violated
the company rule, he cannot be dismissed because his violation only minimal and did not
hamper the operations of MERCO.
Issue1: Whether the Regional Director has no authority to decide the unfair labor practice cases
After voluntarily submitting a cause and encountering an adverse decision on the merits, its too
late for the loser to question the jurisdiction or the power of the court.

In the CAB, in the initial hearing conducted by the Regional Director, it was agreed by the
parties to consolidate the 2 cases considering that both cases concern the same parties and the
issues involved are interrelated. Petitioner Soco obviously accepted the jurisdiction of the
Regional Director by presenting his evidence. By having asked for affirmative relief, without
challenging the Regional Director's power to hear and try his complaint for unfair labor practice,
he cannot rightfully now challenge the resolution made in said cases by the same Director, based
on the latter's alleged lack of jurisdiction.

Issue2: Whether petitioner can avail the security of tenure
It is the prerogative of an employer company to prescribe reasonable rules and regulations
necessary or proper for the conduct of its business and to provide certain disciplinary measures
in order to implement said rules and to assure that the same would be complied with. A rule
prohibiting employees from using company vehicles for private purpose without authority from
management is, from our viewpoint, a reasonable one.

The Court is not unmindful of the fact that petitioner has, as he says, been employed with
petitioner Company for eighteen (18) years. On this singular consideration, the Court deems it
proper to afford some equitable relief to petitioner due to the past services rendered by him to
MERCO. Thus, it is but appropriate that petitioner should be given by respondent MERCO,
separation pay, equivalent to one month salary for every year of his service to said Company.

WHEREFORE, PETITION IS DENIED but MERCO is nevertheless, ordered to grant Soco his
separation pay.



Petitioner DOA and Sultan Security Agency entered into a contract for security services
to be provided by the latter to the said government entity. In September 13, 1990, several
guards of the Sultan Security Agency filed a complaint for underpayment of wages, non-
payment of 13th month pay, uniform allowances, night shift differential pay, holiday pay and
overtime pay, as well as for damages against the DOA and the Sultan Security Agency before
the Regional Arbitration Branch in Cagayan De Oro City
The Labor Arbiter found DOA jointly and severally liable with Sultan Agency for the
payment of money claim of the guards
The Labor Arbiter issued a Writ of Execution commanding the City Sheriff to enforce
and execute the judgment against the DOA and Sultan. The City Sheriff levied on execution
3 motor vehicles of the DOA
Petitioner DOA filed a petition for injunction, prohibition and mandamus, with prayer
for preliminary injunction with the NLRC Cagayan De Oro. It argued that the writ of
execution was effected without the Labor Arbiter having duly acquired jurisdiction over the
DOA. Hence, its decision was null and void. It also pointed out that the attachment of its
property would jeopardize its governmental functions to the prejudice of the public good
NLRC --- dismissed the petition for injunction for lack of basis and a Temporary Stay of
Execution is issued for a period of 2 months but not extendible.
DOA charges NLRC for grave abuse of discretion for refusing to quash the writ of
execution. It argued that money claims against the Department falls under the exclusive
jurisdiction of the Commission on Audit. Further, the DOA asserts that the NLRC has
disregarded the cardinal rule on the non-suability of the State.
NLRC, on the other hand, argue that petitioner has impliedly waived its immunity from suit by
concluding a service contract with Sultan Security Agency

Issue: Whether the DOA can be sued

Under the Constitution, it says that the State cannot be sued without its consent. This simply
means that a sovereign is exempt from suit on the ground that there can be no legal right as
against the authority that makes the law on which the right depends. This doctrine is also called
the royal prerogative of dishonesty because it grants the State the prerogative to defeat any
legitimate claim against it by simply invoking its non-suability

This rule is not really absolute for it does not say that state may not be sued under any
circumstances. The States consent may be given expressly or impliedly. Express consent may be
made through a general law or special law. On the other hand, Implied consent is when the State
itself commences litigation, thus opening itself to a counterclaim, or when it enters into a

In the CAB, the claims of the security guards arising from the Contract for Service, clearly
constitute money claims. Under Act No. 3083, a general law, the State consents and submits to
be sued upon any moneyed claim involving liability arising from contract, express or implied.
However, the money claim must first be brought to the Commission on Audit




Private Respondent Dante Villanueva was employed as service foreman by petitioner
Hagonoy when he was indefinitely suspended and thereafter dismissed for abandonment of
work and conflict of interest
Villanueva filed a complaint for illegal dismissal, illegal suspension and underpayment of
wages and emergency cost of living allowance against Hagonoy with the Ministry of Labor
and Employment in San Fernando, Pampanga
Petitioner Hagonoy moved for dismissal on the ground of lack of jurisdiction. Being
government entity, its personnel are governed by the provisions of the Civil Service Law and
not by the Labor Code. And the protests concerning the lawlessness of dismissal from service
fall within the jurisdiction of the Civil Service Commission and not the Ministry of Labor
and Employment.
The Labor Arbiter rendered a decision on favor of Villanueva
NLRC affirmed the decision of the Labor Arbiter. A Writ of Execution was issued by
the Labor Arbiter to garnish petitioner Hagonoys deposits with the planters Development
Hagonoy filed a Motion to Quash the Writ of Execution with Application for Writ of
Preliminary Injunction. NLRC denied the application.

Issue: Whether local water districts are GOCC whose employees are subject to the provisions of
the Civil Service Law

The Labor Arbiter, in asserting that it has jurisdiction over the employees of Hagonoy, relied on
P.D. No. 198, known as Provincial Water Utilities Act of 1973 which exempts employees of
water districts from the application of the Civil Service Law. However, the Labor Arbiter failed
to take into account that P.D. 1479 wiped away the said exemption

Moreover, the NLRC relied upon Article 9, Section 2, of the 1987 Constitution which provides
that: [T]he Civil Service embraces ... government owned or controlled corporations with
original charters.

At the time the dispute in the CAB arose, and at the time the Labor Arbiter rendered its decision
(which is on March 17, 1986), the applicable law is that the Labor Arbiter has no jurisdiction to
render a decision that he in fact rendered. By the time the NLRC rendered its decision (August
20, 1987), the 1987 Constitution has already come into effect. The SC believes that the 1987
Constitution does not operate retroactively as to confer jurisdiction upon the Labor Arbiter to
render a decision, which was before outside the scope of its competence.

Therefore, a decision rendered by the Labor Arbiter without jurisdiction over the case is a
complete nullity, vesting no rights and imposing no liabilities. Villanueva, if he so wishes, may
refile this complaint in an appropriate


Sadol vs. Pilipinas Kao, Inc., et al (1990)

Petitioner was dismissed from work by private respondents who are owners of Vega & Co.,
private recruitment agency, with assignment at respondent PKI. He filed a complaint for
reinstatement and backwages with the DOLE in Cagayan de Oro City. The Labor Arbiter ruled
in favor of Sadol and ordered respondents to pay petitioners separation pay at one month for
every year of service. Both parties appealed but respondents appeal was filed out of time. The
appeal of respondent was dismissed for having been filed out of time.

Issue: Whether the respondent has lost the right to appeal

A party, who failed to appeal on time from a decision of the Labor Abiter to the NLRC, may still
participate in a separate appeal timely filed by the adverse party by a Motion for Reconsideration
of the NLRC decision. In the CAB, there is no question that respondents failed to file a timely
appeal from the decision of the Labor Arbiter. Hence, having lost the right to appeal, the
respondent may choose to file a Motion for Reconsideration instead.

St. Martin Funeral Homes vs. NLRC and B. Aricayos (1998)

P. respondent was dismissed from work by petitioner for allegedly misappropriating P38,000.00.
Hence, a complaint was filed for illegal dismissal before the NLRC. Petitioner argued that
respondent was not its employee. The Labor Arbiter ruled in favor of petitioner declaring that no
employer-employee relationship between the parties and therefore his office had no jurisdiction
over the case. On appeal, the NLRC set aside the questioned decision and remanding the case to
the labor arbiter for immediate appropriate proceedings.

Issue: Whether or not the decision of the NLRC are appealable to the Court of Appeals.

Held: YES
The Supreme Court clarified and stressed that ever since appeals from the NLRC to the Supreme
Court were eliminated, the legislative intendment is that the special civil action of certiorari was
and still the proper vehicle for judicial review of decisions of the NLRC. The concurrent original
jurisdiction of the Supreme Court can be availed of only under compelling and exceptional

To further explain, (1) the way to review NLRC decision is through the special civil action of
certiorari under Rule 65; (2) the jurisdiction of such action belongs both to the SC and CA; but
(3) in line with the doctrine of hierarchy, of courts, the petition should be initially presented to
the lower court of the two courts, that is the Court of Appeals.

Sunshine Transportation Inc. vs NLRC and R. Santos (1996)

P. respondent Santos was dismissed from work as a bus driver by Petitioner for failing to submit
a written explanation why he failed to report for his scheduled trip. Respondent filed a complaint
with the Labor Arbiter for illegal dismissal. The Labor Arbiter ruled in favor of the petitioner
and dismissed the complaint. This was affirmed by the NLRC but granted Santps money claims.
Unsatisfied with the decision, petitioner elevated the case to the SC charging the NLRC with
grave abuse of discretion.

Issue: Whether the petitioner may avail the special civil action for certiorari?

Held: NO
A petition for certiorari should be preceded by exhaustion of administrative remedies. Under said
doctrine, a motion for reconsideration must first be filed before the special action for certiorari
may be availed of. In the case at bench, the petitioner make a claim that it filed a motion for the
reconsideration of the challenged decision before it came to us through this action.

Midas Touch Food Corp. vs NLRC and Iris Fe Isaac (1996)

Respondent Iris Fe Isaac was dismissed as operations manager by petitioner for alleged lack of
self confidence. Respondent filed a complaint for illegal dismissal before the Labor Arbiter
which rendered a decision in favor of petitioner finding the said dismissal to be valid. However,
petitioner was ordered to pay the complainants there separation pay, etc. Both parties appealed to
the NLRC and the decision of the Labor Arbiter was reversed, this time ruling in favor of Isaac.
Hence, petitioner elevated the case to the SC assailing the decision of the NLRC.

Issue: Whether the petitioner may avail the special civil action for certiorari?

Held: YES
The rule requiring motion for reconsideration before filing a petition for certiorari admits of
certain exceptions, among which is the finding that under the circumstances of the case, a motion
for reconsideration would be useless.

In this case, the Supreme Court found it quite impossible for the NLRC to reverse itself under the
foregoing facts and so, a motion for reconsideration will be deemed useless.

Alindao vs Hon. Hoson (1996)

Petitioner applied for employment for Saudi Arabia through private respondent Hisham General
Services Contractor. She paid a placement fee of P15,000.00 without receipt. When she arrived
in Saudi arrived in Saudi Arabia, she was made to work as a domestic helper. Because of unfair
working conditions, she worked at several residences until she saved enough money to return
home. When she arrived in the Philippines, she filed with POEA a complaint against Hisham for
breach of contract. The POEA rendered a decision suspending Hisham and to pay petitioner her
money claims. Hisham appealed to the NLRC and filed a MFR with the POEA. The NLRC
affirmed the decision of the POEA. Hisham now argues that the order cannot be enforced
because the MFR was still pending with the POEA. Respondent POEA administrator Joson find
the MFR of Hisham to be meritorious. Hence, petitioner elevated this case to the SC

Issue: Whether the petitioner may avail the special civil action for certiorari without first filing a
motion for reconsideration?

Held: YES
It has been held that the requirement of a motion for reconsideration may be dispensed with in
the following instances: (1) when the issue raised is one purely of law; (2) where public interest
is involved; (3) in cases of urgency; and (4) where special circumstances warrant immediate or
more direct action.
On the other hand, among the accepted exceptions to the rule on exhaustion of administrative
remedies are: (1) where the question in dispute is purely a legal one; and (2) where the
controverted act is patently illegal or was performed without jurisdiction or in excess of

The petition involves a pure question of law and the challenged order is void for want of
jurisdiction on the part of respondent Joson.

Metro Transit Organization vs. CA, et al. (2002)

Respondent Ruperto Evangelista, a cash assistant in the treasury division of the petitioner, was
dismissed from work for being alleged to be responsible for the loss of tokens. He was
terminated for lack of trust and confidence. Evangelista filed a case for illegal dismissal. The
Labor Arbiter ruled in his favor and ordered his reinstatement with payment of full backwages.
This was affirmed by the NLRC. Hence, petitioner directly filed with the Court of Appeals a
petition for certiorari under Rule 65. The CA, on the other hand, affirmed the ruling of both the
labor arbiter and NLRC, holding that a motion for reconsideration is necessary before resorting
to a petition for certioarari.

Issue: Whether the petitioner may elevate the case before the CA without first filing a motion for
reconsideration with the NLRC?

Held: NO
Generally, certiorari as a special civil action will not lie unless a motion for reconsideration is
filed before the respondent tribunal to allow it an opportunity to correct its imputed errors.
However, the following have been recognized as exceptions to the rule:
(1) when the issue raised is one purely of law; (2) where public interest is involved; (3) in cases
of urgency; and (4) where special circumstances warrant immediate or more direct action.
On the other hand, among the accepted exceptions to the rule on exhaustion of administrative
remedies are: (1) where the question in dispute is purely a legal one; and (2) where the
controverted act is patently illegal or was performed without jurisdiction or in excess of

To dispense with a motion for reconsideration, there must a be concrete, compelling and valid
reason for the failure to comply with the requirement.

MAI Philippines, Inc. vs. NLRC, et al (1987)

The Regional Director declared that petitioner illegally dismissed its Customer Engineering
Manager Rodolfo Nolasco. It ordered petitioner to reinstate Nolasco and to pay him his full
backwages. The petitioner complied to pay Nolasco but declined to reinstate him. Nolasco filed
a complaint with the Labor Arbiter to recover damages. The Labor Arbiter dismissed the
complaint for being a duplication of the earlier labor case involving the same parties. Nolasco
received the notice of the Labor Arbiters decision 12 days after. He filed an appeal before the
NLRC. Petitioner opposed the appeal and contended that it should be dismissed because it was
filed out of time. NLRC ruled that since the order of the Regional Director requiring
reinstatement of Nolasco with full back wages had already become final and executory, attacks
against that order "on the merits or in substance can no longer be entertained

Issue: Whether the NLRC committed grave abuse of discretion

Held: YES
The NLRC committed grave abuse of discretion in refusing to take account of the fact, as shown
in the record, that the appeal of Nolasco was late because it was not filed within the reglementary

No acceptable reason has been advanced by Nolasco, and none appears upon the record, to
excuse his tardiness in the taking of the appeal. Petitioner's opposition to the appeal should have
been sustained, and the NLRC should never have taken cognizance of the appeal.

PAL vs. NLRC (1989)

Private respondent Dolina completed his training course with PAL as pilot. He was given
temporary appointment for 6 months as Limited First Officer. He applied for regularization as
First Officer and undergoes the required psychological examination wherein his "Adaptability
Rating" was found to be "unacceptable" and the Pilot Acceptance Qualifications Board finds him
not qualified for regular employment in the Company. Dolina was placed under preventive
suspension; hence he filed a complaint for illegal dismissal.
The Labor Arbiter found the dismissal of Dolina justified, hence, PAL discontinued the payment
of Dolinas salary. Dolina objected on the ground that the discontinuance an earlier agreement
that he would be kept in the payroll until the case was finally resolved by arbitration. On appeal,
the NLRC affirmed the decision of the Labor Arbiter but ordered the company to continue
paying Dolinas salary since the arbitration case was not yet over.
Issue: Whether the NLRC committed grave abuse of discretion in holding that Dolina was
entitled to his salaries "until this case is finally resolved."
Held: YES
The order of the NLRC to continue paying Dolina his salary was an abuse of discretion. The
clause "pending final resolution of the case by arbitration" should be understood to be limited
only to the proceedings before the Labor Arbiter, such that when the latter rendered his decision,
the case was finally resolved by arbitration.

Pacific Mills, Inc. vs. NLRC (1990)

In the case of Pacific Mills, Inc. vs. NLRC (1988), the SC dismissed the petition on the ground
that petitioner failed to show that the NLRC committed grave abuse of discretion. The entry of
judgment having been effected, the NLRC, in the process of execution, made a computation of
the award to the private respondents. Petitioner filed a motion to stay execution/reconsideration
citing supervening events that affect the computation of the award as follows:
(1) The computation on separation pay did not consider the length of service of each complainant
as borne out from the records; (2) The computation did not consider the wage exemptions
granted the petitioner-respondent company; (3) The computation included payment of awards to
a respondent who had already been recalled to active duty, one who was already paid in a case
separately filed, and another who was already paid; (4) All the capital assets of the petitioner
have already been attached and/or otherwise foreclosed.

The NLRC denied the motion and ordered immediate implementation of the partial writ of

Issue: Whether the execution of a final judgment of the NLRC may be stayed in view of
supervening events.

Held: YES
Generally, one a judgment becomes final and executory, it canno longer be disturbed, altered or
modified. The principle, however, admits of exceptions as in cases where, because of
supervening events, it becomes imperative, in the higher interest of justice, to direct its
modification in order to harmonize the disposition with the prevailing circumstances or
whenever it is necessary to accomplish the aims of justice.

There can be no question that the supervening events cited by petitioner would certainly affect
the computation of the award in the decision of the NLRC. It is the duty of the NLRC to consider
the same and inquire into the correctness of the execution, as such supervening events may affect
such execution.

Yupangco Cotton Mills, Inc. vs. CA (2002)

Petitioner contended that a sheriff of the NLRC erroneously and unlawfully levied certain
properties which it claims as its own. It filed a 3rd party claim with the Labor Arbiter and
recovery of property and damages with the RTC. The RTC dismissed the case. In the CA, the
court dismissed the petition on the ground of forum shopping and that the proper remedy was
appeal in due course, not certiorari or mandamus. Petitioner filed a MFR and argued that the
filing of a complaint for accion reinvindicatoria with the RTC was proper because it is a remedy
specifically granted to an owner (whose properties were subjected to a writ of execution to
enforce a decision rendered in a labor dispute in which it was not a party). The MFR was denied.
Hence, petitioner filed this appeal.

Issue: Whether the CA has jurisdiction over the case

Held: YES
A third party whose property has been levied upon by a sheriff to enforce a decision against a
judgment debtor is afforded with several alternative remedies to protect its interests. The third
party may avail himself of alternative remedies cumulatively, and one will not preclude the third
party from availing himself of the other alternative remedies in the event he failed in the remedy
first availed of.

Thus, a third party may avail himself of the following alternative remedies:
a) File a third party claim with the sheriff of the Labor Arbiter, and
b) If the third party claim is denied, the third party may appeal the denial to the NLRC.
Even if a third party claim was denied, a third party may still file a proper action with a
competent court to recover ownership of the property illegally seized by the sheriff.
The filing of a third party claim with the Labor Arbiter and the NLRC did not preclude the
petitioner from filing a subsequent action for recovery of property and damages with the
Regional Trial Court. And, the institution of such complaint will not make petitioner guilty of
forum shopping.

Nova vs. Judge Sancho Dames II (2001)

Complainant Greogorio S. Nova filed with the NLRC complaint for illegal dismissal against
R.A. Broadcasting Corporation represented by its Vice President for Operations Vilma J.
Barcelona and Station Manager Deo Trinidad. The Labor Arbiter rendered judgment in favor of
Nova and ordered R.A. Broadcasting to pay his separation pay and full backwages. NLRC
affirmed such decision and denied the MFR filed by R.A. Construction on the ground that it was
filed out of time. The NLRC issued an alias writ of execution and the property of Sps. Barcelona
was scheduled in an auction sale. The said spouses filed with the RTC Camarines Norte action
for damages with prayer of TRO to restrain the NLRC from conducting the scheduled public
auction. The RTC granted the TRO. Nova argued that under the Labor Code, issuance of the
TRO or preliminary injunction in a case arising from labor dispute is prohibited.

Issue: Whether the RTC cannot issue injunction against NLRC?

Held: YES
Regular courts have no jurisdiction to hear and decide questions which arise and are incidental to
the enforcement of decisions, orders or awards rendered in labor cases by appropriate officers
and tribunals of the DOLE. Corollarily, any controversy in the execution of the judgment shall
be referred to the tribunal which issued the writ of execution since it has the inherent power to
control its own processes in order to enforce its judgments and orders.
True, an action for damages lies within the jurisdiction of a regional trial court. However, the
RTC has no jurisdiction to issue a TRO in labor cases. The SC finds respondent Judge guilty of
gross ignorance of the law.


Toyota Motor Phil Corp. Labor Union filed a petition for certification election with Dept. of
Labor, for all rank-and-file employees of the petitioner Toyota Motor Corp. Petitioner seek the
denial of the holding of the certification election on 2 grounds: (1) the union, being process of
registration had no legal personality to file the same as it was not a legitimate labor organization
at the time the petition was file; and (2) that the union was composed of both rank-and-file and
supervisory employees in violation of the law. The Med-Arbiter dismissed the petition for
certification election in favor with the grounds stated by petitioner. However, on appeal, the
Secretary of Labor set aside the decision of the Me-Arbiter and ordered the holding of the
certification election contending that the union was already a legitimate labor organization at the
time of the filing of the petition evidenced by a certificate of registration.

Issue: Whether the Secretary of Labor committed grave abuse of discretion in directing the
certification election
Held: YES. Petition Granted.
A labor organization composed of both rank-and-file and supervisory employees is no labor
organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not
being one, an organization which carries a mixture of rank-and-file and supervisory employees
cannot possess any of the rights of a legitimate labor organization, including the right to file a
petition for certification election for the purpose of collective bargaining.

In the given case, as respondent union's membership list contains the names of at least 27
supervisory employees in Level Five positions, the union could not, prior to purging itself of its
supervisory employee members, attain the status of a legitimate labor organization. Not being
one, it cannot possess the requisite personality to file a petition for certification election. The
union's composition being in violation of the Labor Code's Prohibition of unions composed of
supervisory and rank-and-file employees, it could not possess the requisite personality to file for
recognition as a legitimate labor organization.


A petition for certification election was filed by private respondents Kampil-Katipunan on
behalf of the supervisors union, a union where the supervisory, administrative personnel,
production, accounting and confidential employees of the petitioner were affiliated. Petitioner
opposed the petition on the ground that Kampil Katipunan cannot represent the supervisory
employees for the purpose of collective bargaining because said Kampil Katipunan also
represents the rank-and-file employees union. The Med-Arbiter rendered a decision in favor of
the private respondent. On appeal, the Secretary of Labor affirmed the decision of the Med-
Arbiter. Petitioner now argue that to allow the supervisory employees to affiliate with the
Kampil Katipunan is tantamount to allowing the circumvention of the principle of the
separation of unions under Art. 245 of the Labor Code.

Issue: Whether a local union of supervisory employees may be allowed to affiliate with a
national federation of labor organizations of rank-and-file employees for purpose of CBA?

Held: NO. Petition Granted
We agree with the petitioner's contention that a conflict of interest may arise in the areas of
discipline, collective bargaining and strikes. Members of the supervisory union might refuse to
carry out disciplinary measures against their co-member rank-and-file employees.

Under Article 245 of the Labor Code as amended by Rep. Act No. 6715 provides:
Art. 245. Ineligibility of managerial employees to join any labor organization: right of
supervisory employees. Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.
The Court construes Article 245 to mean that supervisors shall not be given an occasion to
bargain together with the rank-and-file against the interests of the employer regarding terms and
conditions of work. Thus, if the intent of the law is to avoid a situation where supervisors would
merge with the rank and-file or where the supervisors' labor organization would represent
conflicting interests, then a local supervisors' union should not be allowed to affiliate with the
national federation of union of rank-and-file employees where that federation actively
participates in union activity in the company.


Petitioner SPF filed with the DOLE a petition for certification election among the rank-and-file
employees of private respondent Apex Minong Co. The Med-Arbiter granted the petition and
directed the holding of the certification election. During the pre-election conference, petitioner
union objected to the inclusion in the list of workers prepared by Apex the following: (1)
employees occupying the positions of Supervisor I, II and III; (2) employees under
confidential/special payrolls; and (3) employees who were not paying dues. According to
petitioner, the mentioned employees were disqualified from participating in the certification
election since the Supervisors were managerial employees while the last two were disqualified
by virtue of their non-membership in the Union and their exclusion from the benefits of the
collective bargaining agreement. After the certification of election was conducted, respondent
Union filed an urgent motion to open the challenged ballots. The Med-Arbiter granted the
motion and directed the challenged ballots be opened and inventoried. Petitioner appealed to the
BLR wherein respondent Director Ferrer-Calleja dismissed said appeal and affirmed the decision
of the Med-Arbiter and ordered that the 197 ballots should be opened and canvassed. As a
consequence of the opening and canvass of the challenged ballots, the Med-Arbiter

Issue: Whether respondent Director committed grave abuse of discretion in not excluding the
197 employees from voting in the certification election

Held: NO
The functions of the questioned positions are not managerial in nature because they only execute
approved and established policies leaving little or no discretion at all whether to implement the
said policies or not. The respondent Director, therefore, did not commit grave abuse of discretion
in dismissing the petitioner's appeal from the Med-Arbiter's Order to open and count the
challenged ballots in denying the petitioner's motion for reconsideration and in certifying the
respondent Union as the sole and exclusive bargaining representative of the rank-and-file
employees of respondent Apex .
As regards the employees in the confidential payroll, the petitioner has not shown that the nature
of their jobs is classified as managerial except for its allegation that they are considered by
management as occupying managerial positions and highly confidential. Neither can payment or
non-payment of union dues be the determining factor of whether the challenged employees
should be excluded from the bargaining unit since the union shop provision in the CBA applies
only to newly hired employees but not to members of the bargaining unit who were not members
of the union at the time of the signing of the CBA. It is, therefore, not impossible for employees
to be members of the bargaining unit even though they are non-union members or not paying
union dues.


The National Federation of Labor (NFL) filed a petition for certification election in behalf of
certain employees and foreman of petitioner before the DOLE. Petitioner opposed said petition
arguing that

The NFL appealed but it was dismissed. Hence, it re-filed the petition for certification which was
also dismissed.






Petitioner NATU filed a petition for certification election to determine the exclusive bargaining
representative of respondents bank employees occupying supervisory positions. The Bank
moved to dismiss on the ground that said supervisory employees were actually
managerial/confidential employees, thus, they are ineligible to join, assist or form a union. The
Med-Arbiter granted the petition and directed the holding of the certification election. The Bank
appealed to the Secretary of Labor. Said court partially granted the appeal ruling that the
Department Managers, Assistant Managers, Branch Managers, Cashiers and Controllers are
declared managerial employees and cannot join the union of the supervisors.

Issue: Whether
Petitioner concludes that subject employees are not managerial employees but supervisors. Even
assuming that they are confidential employees, there is no legal prohibition against confidential
employees who are not performing managerial functions to form and join a union. A confidential
employee is one entrusted with confidence on delicate matters, or with the custody, handling, or
care and protection of the employer's property. While Art. 245 of the Labor Code singles out
managerial employees as ineligible to join, assist or form any labor organization, under the
doctrine of necessary implication, confidential employees are similarly disqualified.


A petition for certification election was filed by the labor organization of staff and technical
employees of MERALCO seeking to represent regular employees of MERALCO. MERALCO
contended that those in the Patrol Division and Treasury Security Service Section, since these
employees are tasked with providing security to the company, they are not eligible to join the
rank and file bargaining unit. The Med-Arbiter ruled that having been excluded from the existing
Collective Bargaining Agreement for rank and file employees, these employees have the right to
form a union of their own, except those employees performing managerial functions. The
Secretary of Labor affirmed said order.

Issue: Whether security guards may join rank-and-file or supervisors union

Under the old rules, security guards were barred from joining a labor organization of the rank
and file, under RA 6715, they may now freely join a labor organization of the rank and file or
that of the supervisory union, depending on their rank. By accommodating supervisory
employees, the Secretary of Labor must likewise apply the provisions of RA 6715 to security
guards by favorably allowing them free access to a labor organization, whether rank and file or
supervisory, in recognition of their constitutional right to self-organization.



Petitioner Ermidia A. Mariano was a stenographer-typist and filing clerk of respondent
when she was dismissed from work. She sent a letter to the managing directors of the
company in HK through its manager in the Philippines, respondent J.V. Kamerling. In the
letter, she complained about Kamerlings inconsiderate and untactful attitude towards the
employees under him and the clients of the company. Kamerling adviced petitioner that her
letter had been forwarded to the managing directors in HK and that said directors believed
that it was impossible to maintain her in the company.
Petitioner sought reconsideration of her dismissal from the managing directors in HK but
received no answer to any of her 5 letters.
The Company finally offered a compromise settlement with the petitioner whereby she
would be paid a sum equivalent to 6 months salary, provided that she would sign a quitclaim
embodying a provision that she would release the company from any liability arising from
her employment. Not satisfied with the compromise, the petitioner filed a complaint for
unfair labor practice against the company. The CIR rendered judgment holding the company
guilty of unfair labor practice and ordered them to reinstate petitioner to her former position.
The company filed with the SC a petition to review the decision of the CIR. The SC ruled
in favor of the company. Hence, this appeal.

Issue: Whether the petitioner was guilty of unfair labor practice in dismissing the respondent
Held: NO. Petition Denied.
As the respondent's dismissal has no relation to union activities and the charges filed by her
against the petitioner had nothing to do with or did not arise from her union activities, the
dismissal did not constitute Unfair Labor Practice. Despite the employees right to self
organization, the employer still retains his inherent right to discipline his employees, his normal
prerogrative to hire or dismiss them. In this case, the court ruled that the dismissal of the
employee was unjustified, but the employer did not commit Unfair Labor Practice because the
act has no union connection.



The management issued a Memorandum Circular introducing a profit-sharing scheme for
its managers and supervisors.
Respondent Union wrote to petitioner to ask that the union members be allowed to
participate in the profit-sharing program. The management denied the request on the ground
that such participation was not provided in the CBA
When renegotiation of the CBA was approaching, the management wrote to the Union
that it was willing to consider including the union members in the profit-sharing scheme
provided that the negotiations would be concluded prior to December 1987
Sometime later, the company distributed the profit-sharing benefit not only to the
managers and supervisors but also to all rank-and-file employees not covered by the CBA
because they were excluded from the definition of bargaining unit.
This caused the respondent Union to file a notice of strike alleging that petitioner was
guilty of unfair labor practice because the union were discriminated against in the grant of
the profit sharing benefits

Issue: Whether the grant by management of profit sharing benefits to its non-union member
employees is discriminatory against its workers who are union members and amounts to ULP?
Held: NO. Petition Granted
There can be no discrimination committed by petitioner as the situation of the union employees
are different and distinct from the non-union employees. Discrimination per se is not unlawful.
There can be no discrimination where the employees concerned are not similarly situated.

The grant by petitioner of profit sharing benefits to the employees outside the "bargaining unit"
falls under the ambit of its managerial prerogative. It appears to have been done in good faith and
without ulterior motive. More so when as in this case there is a clause in the CBA where the
employees are classified into those who are members of the union and those who are not. In the
case of the union members, they derive their benefits from the terms and conditions of the CBA
contract which constitute the law between the contracting parties. Both the employer and the
union members are bound by such agreement.



In October 1984, petitioner corporation was forced by economic circumstances to require
its workers to go on mandatory vacation leave in batches of seven or nine for periods ranging
from 15, 30, to 45 days. The workers were paid while on leave but the pay was charged
against their respective earned leaves.
As a result, the private respondents filed complaints for unfair labor practice and

Issue: Whether the forced vacation leave without pay constitutes unfair labor practice
Held: NO. Petition Granted
There was no unfair labor practice in this case. Private respondents never questioned the
existence of an economic crisis but, in fact, admitted its existence. There is basis for the
petitioner's contentions that the reduction of work schedule was temporary, that it was taken only
after notice and consultations with the workers and supervisors, that a consensus was reached on
how to deal with deteriorating economic conditions and reduced sales and that the temporary
reduction of working days was a more humane solution instead of a retrenchment and reduction
of personnel. The petitioner further points out that this is in consonance with the CBA between
the employer and its employees.

Likewise, the forced leave was enforced neither in a malicious, harsh, oppressive, vindictive nor
wanton manner, or out of malice or spite. Hence, ULP is not committed.



The petitioners, all officers of the Roche Products Labor Union, wrote the respondent
company expressing their grievances and seeking formal conference with management
regarding the previous dismissal of the unions president and vice-president.
At the meeting, instead of discussing the problems affecting the labor union and
management, the companys general manager allegedly berated the petitioners for writing the
said letter and called the letter and the person who prepared it stupid.
Feeling that he was the one alluded to, since he had prepared the letter, the counsel for
the labor union filed a case for Grave Slander against the general manager. The charge was
based on the affidavit executed by the petitioners.
In turn, the company and the manager filed a complaint for Perjury against petitioners
alleging that their affidavit contained false statements
The company construed the execution by petitioners of the affidavit as an act of breach
of trust and confidence. Hence, they were suspended and later on dismissed.

Issue: Whether respondent company, in terminating the employment of the petitioners without
just and lawful cause, committed an unfair labor practice.

Held: YES. Petition Granted
Respondent company had committed unfair labor practice in dismissing the petitioners without
just and valid cause. Their dismissal, under the circumstances, amounted to interference with,
and restraint or coercion of, the petitioners in the exercise of their right to engage in concerted
activities for their mutual aid and protection

Breach of trust and confidence, the grounds alleged for petitioners' dismissal, "must not be
indiscriminately used as a shield to dismiss an employee arbitrarily.



In December 1973, respondent Madrigal Central Office Employees Union sought for the
renewal of its CBA with the petitioner company. It proposed a wage increase of P200.00 a
month, an allowance of P100.00 a month, and other economic benefits.
By an alleged resolution of its stockholders, the petitioner reduced its capital stock from
765,000 shares to 267,366 shares. Petitioner alleged that because of the desire of the
stockholders to phase out the operations of the Madrigal & Co. due to lack of business
incentives and prospect, it had to reduce its capital stock and effected a retrenchment policy
(downsizing) of its employees and operations
Petitioner applied for clearance to terminate the services of a number of employees
pursuant to its retrenchment program. Respondent union filed a complaint of illegal lockout
against the petitioner.
Respondent Union filed a complaint for ULP.

Issue: Whether the mass-lay off of petitioner due to alleged income loss constitutes ULP
Held: YES. Petition Denied
The petitioners capital reduction efforts, to camouflage the fact that it has been making
profits, and to justify the mass lay-off of its employees, especially union members, were an
ULP which can neither be countenanced nor condoned.
Petitioner, confronted with the demand of the union for wage increases, decided to evade its
responsibility towards the employees by a devised capital reduction. While the reduction in
capital stock created a need for retrenchment, it was just a mask for the purge of union members,
who, by then, had agitated for wage increases. In the face of the petitioner company's piling
profits, the unionists had the right to demand for such salary adjustments.

Retrenchment can only be availed of if the company is losing or meeting financial reverses in its
operation. Thus the mass lay-off or dismissal of the employees under the guise of retrenchment
policy is a lame excuse and a veritable smoke-screen of its scheme to bust the Union and thus
unduly disturb the employment tenure of the employees concerned, which act is certainly an



Complex Electronics Corporation was a subcontractor of electronic products. Its
customers were foreign-based companies with different product lines. One of its customers is
the Lite-On Philippines Electronics Co.
Complex received a message from Lite-On Philippines requiring it to lower its price by
10%. Complex informed Lite-On that such request was not feasible as they were already
incurring losses at the present prices of their products. Complex informed the employees that
it was left with no alternative but to close down the operations of the Lite-On Line. The
company promised that it would follow the law by giving 1 month notice and retrenchment
Sometime later, the machinery, equipment and materials being used for production at
Complex were pulled-out from the company premises and transferred to the premises of
Ionics Circuit, Inc. in Laguna. The following day, Complex totally closed its operation.
The Complex Employees Union filed a complaint for ULP, illegal closure/illegal lockout
and money claims. It claims that business has not ceased at Complex but was merely
transferred to Ionics, a runaway shop, which is an act constituting ULP. To prove that Ionics
was just a runaway shop, petitioner asserts that Complex owns the majority of the shares
comprising the increased capital stock of Ionics. The Union alleged that the reason for the
closure of the establishment was due to the union activities of the employees.

Issue: Whether Complex Electronics Corp. committed ULP

Resorting to a runaway shop is ULP. A runaway shop is defined as an industrial plant moved
by its owners from one location to another to escape union labor regulations or state laws, but the
term is also used to describe a plant removed to a new location in order to discriminate against
employees at the old plant because of their union activities. It is one wherein the employer
moves its business to another location or it temporarily closes its business for anti-union

In this case, Ionics was not set up for the purpose of transferring the business of Complex. At
the time the labor dispute arose, Ionics was already existing as an independent company. It
cannot, therefore, be said that the temporary closure in Complex and its subsequent transfer of
business to Ionics was for anti-union purposes.
We, likewise, disagree with the Union that there was in this case an illegal lockout/illegal
dismissal. Lockout is the temporary refusal of employer to furnish work as a result of an
industrial or labor dispute. It may be manifested by the employer's act of excluding employees
who are union members.



The Araneta Coliseum Employees Association (ACEA) in behalf of 48 members, filed
for ULP against petitioner Progressive Devpt Corp., its officers, and the Progressive
Employees Union (PEU).
The complainants alleged that they were dismissed because they refused to resign from
the ACEA and to affiliate with the PEU.
There is evidence that the Progressive Employees Union became inactive after the death
of Atty. Reonista the former counsel of the Progressive Development Corporation. This
shows that the Progressive Employees Union was organized to camouflage the petitioner
corporation's dislike for the Araneta Coliseum Employees Association and to stave off the
latter's recognition. Further, the PEU did not conclude and enter into a CBA with the

Issue: Whether the dismissal of the employees constitutes ULP

Held: YES
The dismissal of employees because of their refusal to resign from their union and to join the
union favorable to the employer constitutes ULP. Under the circumstances and equity of the
case, and considering the length of time and the union-busting activities of petitioner, the
individual complainants are granted back wages for five (5) years without qualification or



The National Federation of Labor Unions (NAFLU) is a labor organization in petitioner
Bataan Shipyard & Engineering Co., Inc. The Company has thousand employees in its
payroll and more than a hundred of them belong to the said labor organization.
Sometime before 1984, the Company filed with the NLRC an application for the
retrenchment of 285 of its employees on the ground that the firm had been incurring heavy
losses. In the meantime, some employees who had been on sick leave earlier were considered
retrenched. All of those so retrenched happen to be officers and members of the NAFLU.

Issue: Whether the Company is guilty of discriminatory acts in the selection of employees to be

Held: YES.
The retrenchment undertaken by the Company is valid. However, the manner in which this is
exercised should not be tainted with abuse of discretion. Labor is a person's means of livelihood.
He cannot be deprived of his labor or work without due process of law. The retrenchment of
employees who belong to a particular union, with no satisfactory justification why said
employees were singled out, constitutes ULP.
In this case, the Company had indeed been discriminatory in selecting the employees who were
to be retrenched. All of the retrenched employees are officers and members of the NAFLU. It
leads Us to conclude that the firm had been discriminating against membership in the NAFLU,
an act which amounts to interference in the employees' exercise of their right of self-
organization. This interference is considered an act of ULP



Tanduay Distillery, Inc. (TDI) and Tanduay Distillery Labor Union (TDLU) entered into
a CBA which contained a union security clause, which provided: All workers who are or
may during the effectivity of this Contract, become members of the Union in accordance
with its Constitution and By-Laws shall, as a condition of their continued employment,
maintain membership in good standing in the Union for the duration of the agreement.
While the CBA was still in effect, a number of the TDLU, joined another union, the
Kaisahan Ng Manggagawang Pilipino (KAMPIL) and organized its local chapter in TDI.
The TDLU required those who disaffiliated to explain why they should not be punished
for disloyalty. TDLU created a committee to investigate its erring members. The
committee recommended that the disaffiliating members be expelled and that they should be
terminated from service in pursuant to the union security clause. Acting on said request, the
company terminated the employment of the disaffiliating union members.

Issue: Whether the dismissal of the disaffiliating members pursuant to a security clause
constitutes ULP

Held: NO
The private respondents cannot escape the effects of the security clause of their own applicable
CBA. Union Security Clauses in CBA, if freely and voluntarily entered into, are valid and
binding. Thus, the dismissal of an employee by the company pursuant to a labor unions demand
in accordance with a union security agreement does not constitute ULP.

The respondent employer did nothing but to put in force their agreement when it separated the
herein complainants upon the recommendation of said union. Such a stipulation is not only
necessary to maintain loyalty and preserve the integrity of the union but is allowed by the Magna
Charta of Labor when it provided that while it is recognized that an employee shall have the right
to self-organization, it is at the same time postulated that such right shall not injure the right of
the labor organization to prescribe its own rules with respect to the acquisition or retention of
membership therein

In Villar v. Inciong, we held that "petitioners, although entitled to disaffiliation from their union
and to form a new organization of their own must however, suffer the consequences of their
separation from the union under the security clause of the CBA"

MABEZA vs. NLRC (1997)


Petitioner Norma Mabeza contends that she and her co-employees at the Hotel Supreme
in Baguio City were asked by the hotel's management to sign an instrument wherein it states
that they are in compliance with minimum wage and other labor standard provisions of law.
Petitioner signed the affidavit but refused to go to the City Prosecutor's Office to swear to
the truth of her statement. Her refusal displeased the employer.
Thereafter, she was ordered to turn over the keys to her living quarters and to remove her
belongings from the hotel. Subsequently, she as charged with of abandonment of job and
stealing of company property; finally she was dismissed for loss of confidence.

Issue: Whether the dismissal constitutes ULP?
Held: YES
The act of compelling employees to sign an instrument indicating that the employer observed
labor standards provisions of law when he might have not, together with the act of terminating or
coercing those who refuse to cooperate with the employer's scheme constitutes unfair labor
practice. The first act clearly preempts the right of the hotel's workers to seek better terms and
conditions of employment through concerted action. In not giving positive testimony in favor of
her employer, petitioner had reserved not only her right to dispute the claim and proffer evidence
in support thereof but also to work for better terms and conditions of employment.

RANCE vs. NLRC (1988)


Polybag Manufacturing Corporation and Polybag Workers Union entered into a CBA
which provides a union security clause which states that a union member who loses his
membership in the union shall be dismissed from service by the company.
Petitioners, who were members of the Polybag Workers Union, were expelled by said
union for disloyalty for allegedly joining the National Federation of Labor Union
(NAFLU). Because of the expulsion, petitioners were dismissed by the Corporation upon the
unions demand.
Both the Labor Arbiter and the NLRC found the CBA and theunion security clause valid
and considered the termination of petitioners justified.
Petitioners argue that their dismissal is not valid because they did not affiliate with the
NAFLU. They claim that there is a connivance between respondents Company and Union in
their illegal dismissal in order to avoid the payment of separation pay by respondent

Issue: Whether the act of asking help from another union constitutes disloyalty

Held: NO
The mere act of seeking help from the NAFLU cannot constitute disloyalty as contemplated in
the Collective Bargaining Agreement. At most it was an act of self-preservation of workers who,
driven to desperation found shelter in the NAFLU who took the cudgels for them.

KIOK LOY vs. NLRC (1986)


In a certification election held, the Pambansang Kilusang Paggawa, a legitimate late labor
federation, won and was subsequently certified as the sole and exclusive bargaining agent of
the rank-and-file employees of Sweden Ice Cream Plant.
The Union furnished the Company with two copies of its proposed collective bargaining
agreement. At the same time, it requested the Company for its counter proposals but the
requests were ignored and remained unacted upon by the Company.
As a result, the Union filed a "Notice of Strike", with the BLR on the ground of
unresolved economic issues in collective bargaining.
In the labor arbiter: due to series of postponements, and non-appearance at the hearing
conducted it ruled that the Company has waived its right to present further evidence and,
therefore, considered the case submitted for resolution.
NLRC: ruled that respondent Sweden Ice Cream is guilty of unjustified refusal to
bargain, in violation of Section (g) Article 248 (now Article 249)
Issue: WON respondent is guilty of unjustified refusal to bargain?

Held: YES
The Court affirmed the NLRC, and ruled that, petitioner Company is GUILTY of unfair labor
practice, because the jurisdictional preconditions of Collective Bargaining establish such as:
1. possession of the majority representation;
2. proof of majority representation;
3. a demand to bargain under Article 251, par. (a)
Collective bargaining which is defined as negotiations towards a collective agreement, is one of
the democratic frameworks under the New Labor Code, designed to stabilize the relation
between labor and management and to create a climate of sound and stable industrial peace. It is
a mutual responsibility of the employer and the Union and is characterized as a legal obligation.

In the case at bar, (1) respondent Union was a duly certified bargaining agent; (2) it made a
definite request to bargain, accompanied with a copy of the proposed Collective Bargaining
Agreement, to the Company not only once but twice which were left unanswered and unacted
upon; and (3) the Company made no counter proposal whatsoever all of which conclusively
indicate lack of a sincere desire to negotiate.

From the overall conduct of the company, it is indubitably shown that it disregarded its
obligation to bargain in good faith.



MEWA informed MERALCO of its intention to re-negotiate the terms&conditions of
their existing CBA
MEWA submitted its proposal to MERALCO and the collective bargaining negotiations
proceeded. However, despite the series of meetings between the negotiating panels of
MERALCO and MEWA, the parties failed to arrive at "terms and conditions acceptable to
both of them."
As a result, MEWA filed a Notice of Strike, on the grounds of bargaining deadlock and
Secretary of Labor: granted the economic as well as the political demand of the MEWA,
and ordered to grant the wage increase and to incorporation into the CBA of all existing
employee benefits.
MERALCO filed a MR alleging that the Secretary of Labor did not properly appreciate
the effect of the awarded wages and benefits on MERALCO's financial viability.
MEWA likewise filed a motion asking the Secretary of Labor to reconsider its Order on
the wage increase and other benefits.

Issue: Whether the Secretary's actions have been reasonable in light of the parties positions and
the evidence they presented.

The Court ruled that a collective bargaining dispute such as this one requires due consideration
and proper balancing of the interest of the parties to the dispute and those who might be affected
by the dispute.

As a rule, affordability and capacity to pay should be take into account BUT cannot be the sole
yardstick in determining the wage award, especially in a PUBLIC UTILITY like MERALCO. In
considering a public utility, it must always take into account the PUBLIC interest aspect. The
MERALCOs income and the amount of money available for operating expenses including labor
costs are subject to state regulations. We must also keep in mind that high operating costs will
certainly and eventually be passed on the consuming public.



Petitioner San Miguel Corporation Employees Union entered into a CBA with private
respondent San Miguel Corporation (SMC)
It provides that the agreement SHALL REMAIN IN FORCE AND EFFECTIVE until
1992, and the terms of the agreement shall be for 5 years. from 1989 to 1992.
For purposes of business expansion, the SMC would undergo with reconstructing, the
magnolia and the Feeds and livestock Division were spun-off and become two separate and
distinct corporation. But the CBA remain in forced and effective.
During the negotiation the petitioner union insisted that the bargaining unit of SMC
should still include the employees of the spun-off corporations, which is the MAGNOLIA
and SMFI and that the renegotiation terms of the CBA shall be effective ONLY for the
remaining period of 2 years.
On the other hand the SMC contended that the members or employees WHO HAD
PART OF THE BARGAINING UNIT at the SMC, and that the CBA shall be effective for
3years in accordance with ART.253-A
Unable to agree with these issues of bargaining unit and duration of the CBA, petitioner
union declared a deadlock and filed a notice of strike.

Spin-off of Magnolia and San Miguel Foods Companies from the San Miguel Corporation as
separate corporate entities. Existing CBA included all four divisions. During the renewal or
renegotiation for two years on the economic provisions, spin-off corporations were already in
existence. The Union insisted that the employees of the spun-off corporations were still to be
considered as part of the appropriate bargaining unit.

Considering the spin-off, the companies would consequently have their respective and distinctive
concerns in terms of the nature of work, wages, hours of work and other conditions of
employment. The interests of the employees in different companies would perforce differ. SMC
is engaged in beer manufacturing; Magnolia with manufacturing and processing of dairy
products; SM Foods with production of feeds and processing of chicken. The nature of the
products and sales of business may require diff. Skills which must necessarily be commensurated
by different compensation packages; different volumes of work and working conditions. It
would then be best to have separate bargaining units for different companies where the
employees can bargain separately accdg. to their needs and working conditions.


Petitioner Samahang Manggagawa sa Top Form was the certified collective bargaining
representative of all regular rank and file employees of private respondent Top Form
Manufacturing Philippines, Inc.
At the subsequent collective bargaining negotiations, the union insisted on the
incorporation in the (CBA) of the union proposal on "automatic across-the-board wage
There was a Wage Order granting an increase of P17.00 per day in the salary of workers.
This was followed by another Wage Order providing for a P12.00 daily increase in salary.
The union requested the implementation of said wage orders. However, they demanded
that the increase be on an across-the-board basis.
Private respondent refused to accede to that demand. Instead, it implemented a scheme of
increases purportedly to avoid wage distortion.
The union, wrote private respondent a letter reiterated that it had agreed to "retain the old
provision of CBA" on the strength of private respondent's "promise and assurance" of an
across-the-board salary increase should the government mandate salary increases.
The union filed a complaint with the NLRC alleging that private respondent's act of
promise clearly constitutes act of unfair labor practice through bargaining in bad faith."

Labor Arbiter: denied the complaint for lack of merit.
NLRC: affirmed the LA

Issue: WON the act of the private respondent constitute unfair labor practice through bargaining

Held: NO
The Court ruled that under Article 252 it states that the duty to bargain "does not compel any
party to agree to a proposal or make any concession." Thus, petitioner union may not validly
claim that the proposal embodied in the Minutes of the negotiation forms part of the CBA that it
finally entered into with private respondent.

And by making such promise, private respondent may not be considered in bad faith or at the
very least, petitioner union had, under the law, the right and the opportunity to insist on the
fulfillment of the private respondent's promise by demanding its incorporation in the CBA.
"Because the proposal was never embodied in the CBA, the promise has remained just that, a
promise, the implementation of which cannot be validly demanded under the law."



The National Federation of Labor (NFL) was certified as the sole and exclusive
bargaining representative of all the regular rank-and-file employees of New Pacific Timber &
Supply Co., Inc.
NFL started to negotiate for the employees in the bargaining unit. However, the same was
allegedly met with stiff resistance by petitioner Company, so that the former was prompted to
file a complaint for ULP on the ground of refusal to bargain collectively.
Labor Arbiter: issued an order declaring (a) herein petitioner Company guilty of ULP;
and (b) the CBA proposals submitted by the NFL as the CBA between the regular rank-and-
file employees in the bargaining unit and petitioner Company.
NLRC: dismissed the complaint for lack of merit.
A "Petition for Relief" was filed in behalf of 186 of the private respondents "Mariano J.
Akilit and 350 others". In their petition, they claimed that they were "wrongfully excluded
from enjoying the benefits under the CBA since the agreement with NFL and petitioner
Company limited the CBA's implementation to only the 142 rank-and-file employees
NLRC declared that the 186 excluded employees "form part and parcel of the then
existing rank-and-file bargaining unit" and were, therefore, entitled to the benefits under the
Petitioners argues that the private respondents are not entitled to the benefits under the
CBA because employees hired after the term of a CBA are not parties to the agreement, and
therefore, may not claim benefits thereunder, even if they subsequently become members of
the bargaining unit.
As for the term of the CBA, petitioner maintains that Article 253 of the Labor Code
refers to the continuation in full force and effect of the previous CBA's terms and conditions.
By necessity, it could not possibly refers to terms and conditions which, as expressly
stipulated, ceased to have force and effect.

Issue: WON the private respondent are entitled to the benefits under the CBA.

It is clear from the above provision of law that until a new Collective Bargaining Agreement has
been executed by and between the parties, they are duty-bound to keep the status quo and to
continue in full force and effect the terms and conditions of the existing agreement. The law does
not provide for any exception nor qualification as to which of the economic provisions of the
existing agreement are to retain force and effect, therefore, it must be understood as
encompassing all the terms and conditions in the said agreement.

In the case at bar, no new agreement was entered into by and between petitioner Company and
NFL pending appeal of the decision in NLRC Case No. RAB-IX-0334-82; nor were any of the
economic provisions and/or terms and conditions pertaining to monetary benefits in the existing
agreement modified or altered. Therefore, the existing CBA in its entirety continues to have legal

Court has held that when a collective bargaining contract is entered into by the union
representing the employees and the employer, even the non-member employees are entitled to
the benefits of the contract. To accord its benefits only to members of the union without any
valid reason would constitute undue discrimination against nonmembers. 22 It is even conceded,
that a laborer can claim benefits from the CBA entered into between the company and the union
of which he is a member at the time of the conclusion of the agreement, after he has resigned
from the said union.
PAL vs. NLRC (1993)


The Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline.
Subsequently, some of the employees were subjected to disciplinary measures for alleged
violation of revised code.
Philippine Airlines Employees Association (PALEA) filed a complaint before the
(NLRC) for "ULP with arbitrary implementation of PAL's Code of Discipline without notice
and prior discussion with Union by Management." PALEA contended that PAL was guilty of
ULP because the copies of the Code had been circulated in limited numbers; that being penal
in nature the Code must conform with the requirements of sufficient publication, and that the
Code was arbitrary, oppressive, and prejudicial to the rights of the employees.
PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer
to prescribe rules and regulations regarding employees' conduct in carrying out their duties
and functions.
Labor Arbiter: dismissed the complaint and ruled that no ULP had been committed and
no bad faith in adopting the Code.
NLRC: found no evidence of ULP and affirmed the dismissal of the complaint.

Issue: Whether or not the formulation of a Code of Discipline among employees is a shared
responsibility of the employer and the employees.

Held: YES
The Court upheld the unions right, and ruled that, the management should see to it that its
employees are at least properly informed of its decisions or modes of action, because the
implementation of the provisions may result in the deprivation of an employees means of
livelihood which is a property right.

And the CBA may not be interpreted as cession of employees right to participate in the
deliberation of matters which may affects their rights and the formulation of a code of discipline.



Respondent Alhambra Employees' Association ,a legitimate labor organization, filed
a petition in which it is prayed that said union be certified as the sole and exclusive
bargaining agent for all the employees in the administrative, sales, engineering and
dispensary departments of the Alhambra Cigar and Cigarette Manufacturing Company.
The petition is opposed by the Company and another legitimate labor organization, the
Federacion Obrera de la Industria Tabaquera de Filipinas (FOITAF).
They alleged that there is an existing CBA between the company and the FOITAF which
constitutes a bar to the instant certification proceeding.
Petitioner contends that all the employees paid in the administrative, sales, engineering,
and dispensary departments constitute an appropriate unit which is an employer unit

Issue: WON the lower court erred in holding that all the employees in the administrative, sales,
and dispensary departments of petitioner company, with the exception of the supervisors,
security guards, and confidential employees therein, constitute an appropriate separate collective
bargaining unit.

The Court ruled that, no reason to disturb said finding of the lower court that, said employees in
the administrative, sales, and dispensary departments perform work which have nothing to do
with production and maintenance, unlike those in the raw leaf (manlalasi), cigar, cigarette,
packing (precinteria), and engineering and garage departments whose functions involve
production and maintenance, they have a community of interest which justifies their formation or
existence as a separate appropriate collective bargaining unit.



The petitioner is the recognized collective bargaining agent of the rank-and-file
employees of Triumph International with which the latter has a valid and existing collective
bargaining agreement effective up to September 24, 1989.
In 1987, a petition for certification election was filed by the respondent union with the
Department of Labor and Employment.
a motion to dismiss the petition for certification election was filed by Triumph
International on the grounds that the respondent union cannot lawfully represent managerial
employees and that the petition cannot prosper by virtue of the contract-bar rule.
But the Labor Arbiter issued an order granting the petition for certification election and
directing the holding of a certification election to determine the sole and exclusive bargaining
representative of all monthly-paid administrative, technical, confidential and supervisory
employees of Triumph International.

Issue: Whether or not the public respondent gravely abused its discretion in ordering the
immediate holding of a certification election among the workers sought to be represented by the
respondent union.

Where the supervisory employees sought to be represetned by the union are actually
NOT INVOLVED in policy making, and their recommendatory powers are not even instantly
effective since they are subject to review by at least three (3) managers (dept. mgr., personnel
mgr. And general manager), then it is evident that these employees doe not possess managerial
The fact that their work designations are either managerial or supervisory is of no moment,
considering that it is the nature of their functions and NOT SAID NOMENCLATURES which
determines their respective status.
A careful examination of the records of this case reveals no evidence that rules out the
commonality or community of interest among the rank-and-file members of the petitioners, and
the herein declared rank-and-file members of the respondent union. Instead of forming another
bargaining unit, the law requires them to be members of the existing one. The ends of unionism
are better served if all the rank-and-file members with substantially the same interests and who
invoke their right to self-organization are part of a single unit so they can deal with their ER with
JUST ONE AND YET POTENT VOICE. The Ees bargaining power with management is
strengthened thereby.
In the case at bar, there is no dispute that the petitioner is the exclusive bargaining representative
of the rank-and-file employees of Triumph International.



Petitioner Phil. Lingerie Corp. (now Barbizon Philippines Inc.) filed a petition for
certification election among its rank-and-file employees. As a consequence thereof, 2
unions sought recognition:
PLW Union moved for the exclusion of a number of employees who were allegedly
holding supervisory positions.

Med-Arbiter: denied the said motion.
BLR: affirmed the Med-Arbiter and ordered the election to be conducted.

A certification election was conducted with the votes of "supervisors and confidential"
employees being challenged.
PLW UNION filed an election protest. In the meantime, BUKLOD moved for the
opening of the challenged ballots.

BLR: denied the protest and ruled that the alleged supervisors are not managerial employees.
The petitioner was certified as the sole and exclusive bargaining representative of all the regular
rank-and-file employees of Barbizon Philippines, Inc. (formerly Philippine Lingerie

BUKLOD was certified as the sole and exclusive bargaining representative of all the
rank-and-file employees of Barbizon Phils (former PLC)
While the CBA was still in force, several employees organized themselves into the
Nagkakaisang Supervisors Ng Barbizon Philippines, Inc. (NSBPI) and the Nagkakaisang
Excluded Monthly Paid Employees Ng Barbizon, Philippines, Inc. (NEMPEBPI) allegedly
because they were excluded from the coverage of the existing CBA between petitioner
Barbizon and BUKLOD.
Petitioner Barbizon alleged that the petitions for certification election filed by the
Nagkakaisang Supervisor ng Barbizon Philippines, Inc. NAFLU (NSBPI) must
necessarily fail because the employees designated as "supervisors" cannot legally form a
supervisors' union. Being part of the rank and file, petitioner avers that said employees
belong to the "employer wide unit," which is the appropriate bargaining unit of all its rank
and file employees and which is represented by the BUKLOD.
The Secretary of Labor granted the petition for certification election filed by NSBPI

ISSUE: Whether the Undersecretary of Labor committed grave abuse of discretion in granting
NSBPI's petition for certification election

It has been the policy of the BLR to encourage the formation of an employer unit unless
circumstances otherwise require. In other words, one employer enterprise constitutes only one
bargaining unit. The more solid the employees are, the stronger is their bargaining capacity.

However, the "one union one company" rule is not without exception. The exclusion of the
subject employees from the rank-and-file bargaining unit and the CBA is indefinitely a
"compelling reason" for it completely deprived them of the chance to bargain collectively with
petitioner and are thus left with no recourse but to group themselves into a separate and distinct
bargaining unit and form their own organization.

The usual exception, of course, is where the employer unit has to give way to the other units like
the craft unit, plant unit, or a subdivision thereof; the recognition of these exceptions takes into
accountant the policy to assure employees of the fullest freedom in exercising their rights.
Otherwise stated, the one company-one union policy must yield to the right of the employees to
form unions or associations for purposes not contrary to law, to self-organization and to enter
into collective bargaining negotiations, among others, which the Constitution guarantees.



Petitioner Indophil Textile Mills Union and respondent Indophil Textile Mills, Inc.
executed a CBA
Indophil Acrylic Manufacturing Corp. was formed and registered with the SEC. It
became operational and hired workers according to its criteria and standards.
The petitioner union contends the plant facilities built and set up by Acrylic should be
considered as an extension or expansion of the facilities of respondent Company. In other
words, it is the petitioner's contention that Acrylic is part of the Indophil bargaining unit; that
the creation of the Indophil Acrylic is a device of respondent Indophil Textile to evade the
application of the CBA between the union and the company to Acrylic people.
On the other hand, respondent Indophil Textile submits that it is a juridical entity separate
and distinct from Acrylic and cited the case of Diatagon Labor Federations vs. Ople, which
ruled that 2 corporations cannot be treated as single bargaining unit even if their business are

Voluntary Arbitrator: ruled in favor of the respondent and found that the provision in the CBA
between Indophil Textile Inc. and Indophil Textile Union does not extend to the employees of
Indophil Acrylic Corp

Issue: Whether the voluntary arbitrator committed grave abuse of discretion in failing to
disregard the corporate entity of Indophil Acrylic

Held: NO
Acrylic Indophil Corporation cannot be considered an extension of Indophil Corporation, as to
cover in one bargaining unit all employees thereof. Note separate corporate entities: doctrine of
piercing the veil of corporate entity not applied.

The fact that the businesses of private respondent and Acrylic are related, that some of the
employees of the private respondent are the same persons manning and providing for auxilliary
services to the units of Acrylic, and that the physical plants, offices and facilities are situated in
the same compound, it is our considered opinion that these facts are not sufficient to justify the
piercing of the corporate veil of Acrylic.

Hence, the Acrylic not being an extension or expansion of private respondent, the rank-and-file
employees working at Acrylic should not be recognized as part of, and/or within the scope of the
petitioner, as the bargaining representative of private respondent.



Dacongcogon Sugar and Rice Milling Co. entered into a CBA with respondent National
Federation of Sugar Workers (NFSW)
When the CBA expired, it was extended for another 3 years with reservation to negotiate
for its amendment, particularly on wage increases, hours of work, and other terms and
conditions of employment.
However, a deadlock in negotiation ensued on the matter of wage increases and optional
retirement. In order to obviate friction and tension, the parties agreed on a suspension to
provide a cooling-off period to give them time to evaluate and further study their positions.
Hence, a Labor Management Council was set up and convened, with a representative of the
Department of Labor and Employment, acting as chairman, to resolve the issues.
Petitioner filed filed a petition for direct certification or certification election among the
rank and file workers of Dacongcogon.
Respondent NSFW moved to dismiss the petition on the grounds that the petition was
filed out of time and that there is a deadlocked of CBA negotiation

Med-Arbiter: denied the Motion to Dismiss and direct the conduct of a certification election
among rank-and-file employees
BLR: set aside the order of the Med-Arbiter and ruled in favor of respondent

Issue: Whether the BLR committed grave abuse of discretion?

Held: NO. Petition Denied.
The Deadlock Bar Rule simply provides that a petition for certification election can only be
entertained if there is no pending bargaining deadlock submitted to conciliation or arbitration or
had become the subject of a valid notice of strike or lockout. The principal purpose is to ensure
stability in the relationship of the workers and the management.

It is a rule in this jurisdiction that only a certified CBA i.e., an agreement duly certified by the
BLR may serve as a bar to certification elections.

This rule simply provides that a petition for certification election or a motion for intervention can
only be entertained within sixty days prior to the expiry date of an existing collective bargaining
agreement. Otherwise put, the rule prohibits the filing of a petition for certification election
during the existence of a CBA except within the freedom period, as it is called, when the said
agreement is about to expire. The purpose, obviously, is to ensure stability in the relationships of
the workers and the management by preventing frequent modifications of any CBA earlier
entered into by them in good faith and for the stipulated original period.



GAW Trading, Inc. recognized ALU as the sole and exclusive bargaining agent for the
majority of its employees. A CBA was executed.
In the meantime, Southern Philippines Federation of Labor (SPFL) together with
Nagkaisang Mamumuo sa GAW (NAMGAW) undertook a Strike after it failed to get GAW
Trading Inc. to sit for a conference respecting its demands in an effort to pressure GAW
Trading Inc. to make a turnabout of its standing recognition of ALU as the sole and exclusive
bargaining representative of its employees
GAW Trading Inc. filed a TRO
Labor Arbiter: held the strike as illegal

GAW Lumad Labor Union (GALLU-PSSLU) Federation ... filed a Certification Election

Med-Arbiter: ruled for the holding of a certification election in all branches of GAW Trading
BLR: granted ALUs appeal (MR) and reversed the Med-Arbiter on the ground that the CBA has
been effective and valid and the contract bar rule applicable

SPFL filed a MR to the BR

BLR: reversed its previous decision and ordered the holding of a certification election among the
rank-and-file workers of GAW Trading, Inc. and ruled that the contract-bar rule does not apply
in this case because the CBA involved is defective as it was not duly submitted in accordance
with the Implementing Rules. xxx There is no proof tending to show that the CBA has been
posted in at least 2 conspicuous places in the establishment at least 5 days before its ratification
and that it has been ratified by the majority of the employees in the bargaining unit.

Issue: Whether the contract-bar rule is applicable in this case?

Wind no reversible error in the challenged decision of respondent director. A careful
consideration of the facts culled from the records of this case, yields the conclusion that the
collective bargaining agreement in question is indeed defective hence unproductive of the legal
effects attributed to it by the former director in his decision which was subsequently and properly

To be a bar to a certification election, the CBA must be adequate in that it comprise substantial
terms and conditions of employment



Respondent CMC Employees Assoc.-Alliance of Filipino Workers filed a petition for
certification election among the rank-and-file employees of the Capitol Medical Center
(CMC). After the election, respondent union was held as the sole and exclusive bargaining
representative of the rank and file employees at CMC.
Respondent Union invited the CMC to the bargaining table by submitting its economic
proposal for a CBA. However, CMC refused to negotiate and instead challenged the unions
legal personality through a petition for cancellation of the certificate of registration.
Respondent union was left with no other recourse but to file a notice of strike against CMC
for ULP. This eventually led to a strike.
In the meantime, petitioner Capitol Medical Center Employees-Unified Filipino Service
Workers filed a petition for certification election among the rank-and-file employees of the
CMC. It alleged in its petition that a certification election can now be conducted as more that
12 months have lapsed since the last certification election was held and that no CBA was
executed before.
Respondent union opposed the petition and moved for its dismissal. It contended that it is
the certified bargaining agent of the rank-and-file employees of the CMC Hospital.
Petitioner claims that since there is no evidence on record that there exists a CBA
deadlock, the law allowing the conduct of a certification election after twelve months must
be given effect in the interest of the right of the workers to freely choose their sole and
exclusive bargaining agent

The Secretary of Labor: dismissed the petition for certification election and directed CMC to
negotiate a CBA with respondent union

Issue: Whether there is a bargaining deadlock between CMC and respondent union, before the
filing of petitioner of a petition for certification election

There is a deadlock when there is a complete blocking or stoppage resulting from the action of
equal and opposed forces . . . . The word is synonymous with the word impasse, which . .
"presupposes reasonable effort at good faith bargaining which, despite noble intentions, does not
conclude in agreement between the parties."
While it is true that, in the case at bench, one year had lapsed since the time of declaration of a
final certification result, and that there is no collective bargaining deadlock, public respondent
did not commit grave abuse of discretion when it ruled in respondent union's favor since the
delay in the forging of the CBA could not be attributed to the fault of the latter.

If the law proscribes the conduct of a certification election when there is a bargaining deadlock
submitted to conciliation or arbitration, with more reason should it not be conducted if, despite
attempts to bring an employer to the negotiation table by the "no reasonable effort in good faith"
on the employer certified bargaining agent, there was to bargain collectively. It is only just and
equitable that the circumstances in this case should be considered as similar in nature to a
"bargaining deadlock" when no certification election could be held.

TRAJAN0 (1991)


National Federation of Labor Union (NAFLU) was declared by the BLR the exclusive
bargaining agent of all rank-and-file employees of Viron Garments
More than 4 years after, another union, KAMPIL-Katipunan, filed with the BLR a
petition for certification election with the support of more than 30% of the workers
Despite NAFLUs opposition, the Med-Arbiter ordered the holding of a certification
election, citing the fact that since the certification of NAFLU in 1981 as the sole bargaining
agent, no CBA has been concluded.
NAFLU appealed, contending that at the time the petition for certification election was
filed, it was in the process of collective bargaining with VIRON; that in fact a deadlock in
negotiations prompted it to file a notice of strike; that these circumstances barred a petition
for certification election, pursuant to the Rules Implementing the Labor Code.

BLR: upheld NAFLUs contentions and dismissed the petition for certification election.

Issue: Whether KAMPILs petition for certification election is barred by the alleged bargaining
deadlock between NAFLU and VIRON
For a bargaining deadlock to bar a petition for certification election, such deadlock must have
been submitted to conciliation or arbitration, or must have been the subject of a valid strike or
lockout notice before not after the filing of the petition for certification election.

The records do not show that there was a bargaining deadlock prior to the filing of the petition
for certification election. When NAFLU was proclaimed the exclusive bargaining representative
of all VIRON employees up to when KAMPIL filed its petition for certification election or a
period of more than four (4) years, no collective bargaining agreement was ever executed, and no
deadlock ever arose from negotiations between NAFLU and VIRON resulting in conciliation
proceedings or the filing of a valid strike notice. In the case, the strikes and submission to
compulsory arbitration took place after the filing of the petition for certification election



The La Suerte Cigar and Cigarette Factory Provincial and Metro Manila Sales Force
Association applied for and was granted chapter status by the National Association of Trade
Unions (NATU)
Sometime later, 31 local union members signed a joint letter withdrawing their
membership in NATU.
The local union and NATU filed a petition for certification election.
The company opposed on the ground that it was not supported by at least 30% (now
25%) of the proposed bargaining unit because (a) of the alleged 48 members of the local
union, 31 had withdrawn prior to the filing of the petition, and (b) 14 of the alleged members
of the union were not employees of the company but were independent contractors. The BLR
director denied the companys objection

Issue: Whether the withdrawal of 31 unions from NATU affected the petition for certification
election insofar as the 30% requirement is concerned

The SC reversed the BLR, it appearing that the 31 union members has withdrawn their support to
the petition BEFORE the filing of said petition. It would be otherwise if the withdrawal was
made AFTER the filing of the petition for it would then be presumed that the withdrawal was not
free and voluntary. The presumption would arise that the withdrawal was procured through
duress, coercion or for valuable consideration. In other words, the distinction must be that
withdrawals made before the filing of the petition are presumed voluntary unless there is
convincing proof to the contrary, whereas withdrawals made after the filing of the petition are
deemed involuntary.

The reason for such distinction is that if the withdrawal or retraction is made before the filing of
the petition, the names of employees supporting the petition are supposed to be held secret to the
opposite party. Logically, any such withdrawal or retraction shows voluntariness in the absence
of proof to the contrary. Moreover, it becomes apparent that such employees had not given
consent to the filing of the petition, hence the subscription requirement has not been met.

We hold and rule that the 14 members of respondent local union are dealers or independent
contractors. They are not employees of petitioner company. With the withdrawal by 31 members
of their support to the petition prior to or before the filing thereof, making a total of 45, the
remainder of 3 out of the 48 alleged to have supported the petition can hardly be said to represent
the union.
REYES vs. TRAJANO (1992)


The BLR authorized the conduct of certification election among the employees of Tri-
Union Industries Corporation. The competing unions were the TUEU-OLALIA and TUPAS.
Of the 384 workers initially deemed to be qualified voters, only 240 actually took part in
the election. Among the 240 who cast their votes, 141 were members of the Iglesia ni Kristo
The ballots provided for 2 choices: (a) TUPAS; (b) TUEU-OLALIA; and (c) NO
The challenged votes were those cast by the 141 INK members. They were segregated
and excluded from the final count because the competing unions agreed earlier that the INK
members should not be allowed to vote because they are not members of any union and
refused to participate in the previous certification election.
The INK employees protested the exclusion of their votes. They filed a petition to cancel
the election alleging that it was not fair and the result thereof did not reflect the true
sentiments of the majority of the employees.
TUEU-OLALIA opposed the petition. It contended that petitioners do not have legal
personality to protest the results of the election because they are not members of either the
contending unions, but of the INK which prohibits its followers to, on religious grounds,
from joining or forming any labor organization.

Med-Arbiter: seeing no merit in the INK employees petition, certified the TUEU-OLALIA as
the sole and exclusive bargaining agent of the rank-and-file employees.
BLR: denied the appeal of the petitioner

Issue: Whether the INK members may vote in the certification election

Logically, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or resign
from a labor organization, is subsumed in the right to join, affiliate with, or assist any union, and
to maintain membership therein. The right to form or join a labor organization necessarily
includes the right to refuse or refrain from exercising said right. It is self-evident that just as no
one should be denied the exercise of a right granted by law, so also, no one should be compelled
to exercise such a conferred right. The fact that a person has opted to acquire membership in a
labor union does not preclude his subsequently opting to renounce such membership.

In the Certification Election, all members of the unit, whether union members or not, have the
right to vote. Union membership is not prerequisite. If majority of the unit members do not want
a union, as expressed in the certification election, such majority decision must be respected.
Hence, the INK members may vote.



A certification election was conducted among the rank-and-file employees of the Hijo
Plantation, Inc. (HPI).
Petitioner NFL (National Federation of Labor) was chosen as the bargaining agent of its
rank-and-file employees
Protests filed by the company and three other unions against the results of the election on
the ground that the certification election was marred by massive fraud and irregularities
because number of employees were not able to cast their votes because they were not
properly notified of the date

Labor Secretary: denied the petition to annul the election and instead certified petitioner NFL as
the sole and exclusive bargaining representative of the rank-and-file employees of private
respondent HPI.

However, on motion of HPI, the Secretary of Labor, reversed his resolution. NFLs MR
was denied. Hence, this petition

Issue: Whether the DOLE should not have given due course to private respondent's petition for
annulment of the results of the certification election.

The SC ruled in favor of the NFL. The workers in this case were denied this opportunity. Not
only were a substantial number of them disfranchised, there were, in addition, allegations of
fraud and other irregularities which put in question the integrity of the election. Workers wrote
letters and made complaints protesting the conduct of the election. The Report of Med-Arbiter
Pura who investigated these allegations found the allegations of fraud and irregularities to be
The SC invalidated the certification election upon a showing of disfranchisement, lack of secrecy
in the voting and bribery. The workers' right to self-organization as enshrined in both the
Constitution and Labor Code would be rendered nugatory if their right to choose their collective
bargaining representative were denied. Indeed, the policy of the Labor Code favors the holding
of a certification election as the most conclusive way of choosing the labor organization to
represent workers in a collective bargaining unit. In case of doubt, the doubt should be resolved
in favor of the holding of a certification election.



De Leon was employed by La Tondea, Inc. at the Maintenance Section of its
Engineering Department where his work consisted mainly of painting & other odd jobs
related to maintenance. He was paid on a daily basis through petty cash vouchers.
After more than 1 year of service, De Leon requested to be included in the payroll of
regular workers. Companys response was to dismiss him from his employment. De Leon
demanded reinstatement but company refused repeatedly.
De Leon filed a complaint for illegal dismissal, reinstatement & payment of backwages
LA: found for De Leon & declared the dismissal as illegal. He ruled that De Leon was
not a mere casual employee but a regular employee.
NLRC: reversed LA. MR denied. Hence, this appeal.

ISSUE: WON De Leon was mere casual employee
Held: NO, reversal of the decision was erroneous

Under Art. 281 of the LC, the primary standard of determining a regular employment is the
reasonable connection bet. the particular activity performed by the employee in relation to the
usual business or trade of the employer. Also, if the employee has been performing the job for at
least 1 year, even if the performance is not continuous or merely intermittent, the law deems the
repeated & continuing need for its performance as sufficient evidence for the necessity if not
indispensability of that activity to the business.

In this case, the records reveal that De Leons tasks assigned to him included not only the
painting of building as claimed by the respondent but also cleaning & oiling machines, even
operating a drilling machine & other odd jobs.
- A regular employee, Tanque, attested in his affidavit that De Leon worked w/ him as
maintenance man when there was no painting job.
- In its comment, company confirmed the veracity of De Leons claim when it admitted that he
was occasionally instructed to do other odd things in connection w/ the maintenance while he
was waiting for materials he would need in his job or when he had finished early the one
assigned to him
The law demands that the nature & entirety of the activities performed by the employee
be considered.
Furthermore, the petitioner performed his work of painting & maintenance activities
during his employment which lasted for more than 1 year, until early Jan., 1983 when he
demanded to be regularized but was dismissed.
The fact that he was rehired weeks after shows that it can not be denied that his activities
as regular painter & maintenance man still exist.

What determines whether a certain employment is regular or casual is not the will &
word of employer to which the desperate worker often accedes nor the procedure of hiring or
manner of payment of salary. It is the nature of the activities performed in relation to the
particular business or trade considering all circumstances, & in some cases the length of time
of its performance & its continued existence. There was an obvious devious dismissal of De
Leon to evade the obligations of petitioner to the worker.
Petition granted.



Petitioner Narcisa B. de Leon is the owner of a parcel of land in Manila. She leased said
land to the Filipino Theatrical Enterprises, Inc., The lease contract provided that the De Leon
would become the owner of the building, together with all the equipment and accessories, at
the expiration of the lease
Before the expiration of the lease, the Filipino theatrical notified its EEs of their
termination. After the expiration of the lease, the theater building was turned over to De Leon
who immediately demolished the building, and on the same site she constructed the new
Dalisay Theater Building;
The theatre was opened, with a new set of personnel, retaining only the services of four
old EEs; Said theater was operated jointly by the motion picture firms LVN Pictures, Inc.,
Premier Productions and the Sampaguita Pictures, Inc., as lessees thereof.
30 persons, all members of the NLU, picketed at the said theater by walking to and from
on the sidewalk fronting the lobby of the theater and displaying placards
Defendants during the picketing tried to persuade patrons or customers of the Dalisay
Theater to refrain from buying tickets or seeing the show. Plaintiffs sought to recover
damages and an injunctive relief in the court.

Issue: Whether the picketing of the EEs are illegal

The Court finds that the acts of the defendants were not such as to disturb the public peace at the
place. There was no clear and present danger of destruction to life or property or of other forms
of breach of the peace.

There was no existence of a relationship of employers and employees between plaintiffs and
defendants, although defendants' purpose in picketing plaintiffs was for the defendants'
reinstatement of their services in the new Dalisay Theater under the new Management.

Picketing peacefully carried out is not illegal even in the absence of employer-employee
relationship, for peaceful picketing is a part of the freedom of speech guaranteed by the


Liwayway Publications, Inc. was the 2nd sub-lessee of the premises of the respondent
Permanent Concrete Products, Inc, in Manila
The EEs of Permanent Concrete declared a strike. For unknown reason, they picketed,
stopped and prohibited Liwayways truck from entering the compound to load newsprint
from its bodega. The union members also intimidated the and threatened to harm the
Liwayways EEs who were in the truck.
Liwayway filed an action for damages and injunction against the union in the CFI Manila
CFI: issued preliminary injunction and award damages to the ER.
The union contends that the CFI has no jurisdiction over the case because the case arose
out of labor dispute and that their picketing is an extension of freedom of speech guaranteed
by the Constitution

Issue: Whether Liwayway is a third-party or an innocent bystander whose right has been invaded
and, therefore entitled to protection by regular courts
We find and hold that there is no connection between the Liwayway Publications, Inc. and the
striking Union

Although picketing is not prohibited , a picketing labor union has no right to prevent employees
of another company from getting in and out of its rented premises, otherwise it will be held liable
for damages for its act against innocent bystanders.


The workers of respondent Blooming Mills Inc. planned a demonstration in Malacanang
to protest alleged abuses of the Pasig Police
Upon learning of this plan, the Company management called a meeting with the union
The Company officers warned the union officers that the planned demonstration would
be in violation of the no strike clause of the CBA.
The union officers asserted that the demonstration had nothing to do with the Company
with which the Union had no dispute
When the workers proceeded with the demonstration despite the pleas of the Company, it
filed an ULP case against the Union and its officers for violation of the no strike clause of
the CBA
CIR: declared the Union and its officers guilty if bargaining in bad faith for violating the
CBA and ordered the dismissal of the union officers

Issue: Whether the Union and its officers were rightfully dismissed the respondent company?

HELD: NO. CIR reversed.
The demonstration held by the EEs before the Malacanag was against alleged abuses of some
Pasig Policemen and not against the ER. Said demonstration was purely and completely an
exercise of freedom of expression. They are only in the exercise of their civil and political rights
for their mutual aid and protection from what they believed are police excesses.

CORP. (1999)

Petitioner Great Pacific Life Employees Union and Respondent Great Pacific Life
Assurance Corporation entered into a CBA. Before the expiration of the CBA, the parties
submitted their respective proposals and counter-proposals on its projected renewal.
The ensuing series of negotiations however resulted in a deadlock which later on resulted
into a Strike
The Company required all striking employees to explain in writing within 48 hours why
no disciplinary action, including possible dismissal, should be taken against them.
Complying with the order, UNION President Alan Domingo and some strikers explained that
they did not violate any law as they were merely exercising their constitutional right to strike.
Petitioner Rodel P. de la Rosa and the rest of the strikers however ignored the management
GREPALIFE found the explanation of Domingo totally unsatisfactory and considered de
la Rosa as having waived his right to be heard. Thus, both UNION officers were terminated.
Notwithstanding their dismissal from employment, Domingo and de la Rosa continued to
lead the members of the striking union in their concerted action against management.
Domingo and de la Rosa sued GREPALIFE for illegal dismissal, ULP and damages.
Labor Arbiter: ruled in favor of the EEs and ordered their reinstatement.
NLRC: reversed LA and ruled in favor of ER.

Issue: Whether the dismissal of the union officers is discriminatory constituting ULP?

HELD: NO. NLRC affirmed.
The right to strike, while constitutionally recognized, is not without legal constrictions.

Under Art. 264 of the LC, ''any worker or union officer who knowingly participates in the
commission of illegal acts during a strike may be declared to have lost his employment status."

The decision of respondent GREPALIFE to consider the union officers as unfit for reinstatement
is not essentially discriminatory and constitutive of an ULP. Discriminating involves either
encouraging membership in any labor organization or is made on account of the employee's
having given or being about to give testimony under the Labor Code. These have not been
proved in this case

To elucidate further, there can be no discrimination where the employees concerned are not
similarly situated. A union officer has larger and heavier responsibilities than a union member.
Union officers are duty bound to respect the law and to exhort and guide their members to do the
same; their position mandates them to lead by example. By committing prohibited activities
during the strike, de la Rosa as Vice President of petitioner UNION demonstrated a high degree
of imprudence and irresponsibility. Verily, this justifies his dismissal from employment. Since
the objective of the Labor Code is to ensure a stable but dynamic and just industrial peace, the
dismissal of undesirable labor leaders should be upheld.


EEs of petitioner Gold City declared a strike against the latter. ER filed a complaint for
Illegal Strike with prayer for a restraining order/preliminary injunction.
LA: found the strike to be illegal. The workers who participated in the illegal strike did
not, however, lose their employment, since there was no evidence that they participated in
illegal acts. As regards the six union officers, the Labor Arbiter ruled that they could not have
possibly been "duped or tricked" into signing the strike notice for they were active
participants in the conciliation meetings and were thus fully aware of what was going on.
Hence, said union officers should be accepted back to work after seeking reconsideration
from herein petitioner.
NLRC: affirmed with modification the Arbiter's decision. It held that the concerted action
by the workers was more of a "protest action" than a strike. Private respondents, including
the six union officers, should also be allowed to work unconditionally to avoid

Issue: Whether the union members and officers were rightfully dismissed?

Under Article 264 of the Labor Code, a worker merely participating in an illegal strike may not
be terminated from his employment. It is only when he commits illegal acts during a strike that
he may be declared to have lost his employment status. Since there appears no proof that these
union members committed illegal acts during the strike, they cannot be dismissed. Hence, they
are entitled to reinstatement.

However, considering that a decade has already lapsed from the time the disputed strike
occurred, we find that to award separation pay in lieu of reinstatement would be more practical
and appropriate. No backwages will be awarded to union members as a penalty for their
participation in the illegal strike.

The fate of Union Officers is different. Their insistence on unconditional reinstatement or
separation pay and backwages is unwarranted and unjustified. For knowingly participating in an
illegal strike, the law mandates that a union officer may be terminated from employment. The
union officers are, therefore, not entitled to any relief,

WHO DECLARES LOSS OF EMPLOYMENT STATUS? The Employer. The law, using the
word may, grants the ER the option of declaring a union officer who participated in an illegal
strike as having lost his employment.


Reliance Surety Insurance Co., Inc., thru its manager, effected a change in the seating
arrangement of its personnel to avoid unnecessary loss of productive working time due to
personal and non-work-related conversations, personal telephone calls and non-work-
connected visits by personnel to other departments
4 EEs protested the transfer of their tables and seats, claiming that the change was
without prior notice and was done merely to harass them as union members. A heated
discussion ensued, during which said EEs were alleged to have hurled unprintable insults to
the manager and supervisors. They were placed under preventive suspension and dismissed
after investigation
The Company Union filed in behalf of the dismissed EEs a complaint for illegal
While the complaint for illegal dismissal and ULP was pending, the union went on strike
and picketed the company premises by forming human barricades, which effectively
obstructed the free ingress to and egress from its premises, preventing its officials and
employees from doing their usual duties.
The Company filed a petition to declare the strike illegal for failure to observe legal strike
LA: found the strike to be illegal.
NLRC: affirmed LA. However, it ordered that the striking union officers be reinstated
without backwages instead of being dismissed.

Issue: Whether strikers who have staged an illegal strike and not marked with good faith may
be reinstated to work.

There is no dispute that the strike in question was illegal, for failure of the striking personnel to
observe legal strike requirements, to wit: (1) as to the fifteen-day notice; (2) as to the 2/3
required vote to strike done by secret ballot; (3) as to submission of the strike vote to the
Department of Labor at least seven days prior to the strike.

Good faith is a valid defense against claims of illegality of a strike. We do find, however, not a
semblance of good faith here, but rather, plain arrogance, pride, and cynicism of certain workers.


Cromwell Commercial Inc. and its Company Union entered into a CBA, among those
agreed is a salary increase to the permanent EEs and to restore all salesmen to the status of
salary basis.
However, the company gave no salary increase to its employees, except to 3 who were
not union members. The salaries of the salesmen were not really restored.
When 2 EEs were dismissed, the Union struck and picketed the premises of the company.
The company warned the strikers that they will be dismissed if they will not return to work
because the strike violates the no strike clause in the CBA
The Union filed with the CIR a ULP case against the Company.
CIR: ordered reinstatement to some of the EEs giving them only half backwages, other
strikers was not awarded any backwages at all, and there were 3 strikers denied of

Issue: Whether the EEs that were denied reinstatement were discriminatorily dismissed, hence
entitled to backwages?


2 types of employees involved in ULP cases:
1. those who were discriminatorily dismissed for union activities; and
2. those who voluntarily went on strike.

Both are entitled to reinstatement. HOWEVER, although discriminatorily discharged,
reinstatement can be denied because of (1) unlawful conduct or (2) because of violence.

GR: No BACKWAGES on strike. In an economic strike, the strikers are not entitled to
backwages on the principle that a fair days wage accrues only for a fair days labor
EXPN: Discriminatorily dismissed EEs received backpay from the date of the act of

In the CAB, the EEs denied of reinstatement were found guilty of acts of violence consisting of
hurling stones which smashed glass windows of the building of the company and the headlights
of a car and the utterance of obscenities such as "putang ina."

YES. The mere fact that strikers or dismissed EEs have found such employment
elsewhere is not necessarily a bar to their reinstatement.


The Union Marsman & Company Employees and Laborers Association (MARCELA),
entered into a CBA with MARSMAN and COMPANY.
Despite several meetings, the parties failed to reach an agreement which is eventually
lead to a strike
It appears that the strike was attended by act of violence on the part of certain strikers.
In the Sec. of Labor, the strikers agreed to return to work on the promise that the
Company would discuss their demands with them.
While the Company admitted some of the strikers, it REFUSED readmission to others
unless they ceased to be active as union members. As a result, the strike and picketing were
The Union contends that the strikers were discriminately dismissed which is an ULP;
hence they are entitled to back wages.

Issue: Whether the strikers are entitled to backpay.

The SC ruled that in an economic strike, the strikers ARE NOT ENTITLED to backpay, since
EMPLOYEES. During the time that the strike was an economic one, complainant had no right to

Even after finding of ULP by the ER, award of backwages rests on the Courts discretion


Respondent PERMEX Producer and Exporter Corporation is a Zamboanga City-based
corporation engaged in the business of fish and tuna export.
The ER dismissed some of its EEs who happended to be members of the National
Federation of Labor
PERMEX contended that the dismissed EEs were using their union activities to go on
undertime or to justify their constant and frequent absences which evidently was a violation
of company policy
As a result, over 200 workers picketed outside company premises. The gates were
barricaded, thus blocking ingress and egress of company vehicles, trapping 50 workers inside
and paralyzing company operations. Additionally, 700 non-striking workers were prevented
from working
PERMEX filed a complaint to declare the strike as illegal. Likewise, NFL filed a case
against PERMEX for ULP and damages
LA: declared the strike illegal and awarded PERMEX 500K for moral and exemplary
NLRC: affirmed LA but deleted the moral and exemplary damages and instead award
P300T as compensatory damages to PERMEX.

Issue: Whether the NLRC committed GAD

In order that damages may be recovered, the best evidence obtainable by the injured party must
be represented. Actual or compensatory damages cannot be presumed, but must be duly proved,
and so proved with a reasonable degree of certainty.

If the proof is flimsy and insubstantial, no damages will be awarded." We consider the amount of
P3000,000.00 just and reasonable under the circumstances



Respondent union filed a petition for direct certification as the sole and exclusive
bargaining agent of Petitioner Company in Baguio.
The Company opposed on the ground that the union members are actually not employees
but are independent contractors as evidenced by the collection agency agreement which they
Med-Arbiter: finding that there exists an ER-EE relationship between the union members
and the Company, granted the petition for certification election
The Union contended that they "perform the most desirable and necessary activities for
the continuous and effective operations of the business of the petitioner Company" (citing
Art. 280 of the LC)

Issue: Whether Art. 280 may be use as a yardstick in determining the existence of employment

ARTICLE 280 applies where the existence of ER-EE relationship is NOT THE ISSUE in the
dispute. It merely distinguishes between 2 kinds of EEs, i.e., regular employees and casual
employees, for purpose of determining the right of an EE to certain benefits, to join or form a
union, or to security of tenure.


Private respondent Jimmy Calamba was employed by petitioner company on a day to day
basis as laborer and dishwasher for a period of 10 months . He was also hired as a gardener
for more than 1 year when he was dismissed by the petitioner.
Calamba filed complaint for illegal dismissal
LA: declared Calamba as a regular EE and ordered his reinstatement.
NLRC: affirmed LA
Petitioner maintains that private respondent Calamba was a contractual employee whose
employment was for a fixed and specific period as set forth and evidenced by the private
respondent's contracts of employment

Issue: Whether Calamba has acquired the status of regular EE

HELD: YES. NLRC affirmed
The nature of private respondent Colombo's employment as laborer, gardener, and dishwasher
pertains to a regular employee because they are necessary or desirable in the usual business of
petitioner as a recreational establishment.

Day-to-Day Contractual EE becoming Regular
The repeated re-hiring and continuing need of service of the EE are sufficient evidence of the
necessity and indispensability of his service to the ERs business or trade.


Petitioner Company hired the private respondent Luzviminda Petilla as clerk typist
effective December 15, 1986 until January 16, 1987. The Co. gave her an extension up to
June 30, 1987.
On June 22, 1987 her services were terminated without notice or investigation. Hence,
she filed a complaint for illegal dismissal.
Petitioner Co. argues mainly that the private respondent's appointment was
TEMPORARY and hence she may be terminated at will.

Issue: Whether the dismissal is valid?

An employment may only be said to be TEMPORARY where it has been fixed for a specific
undertaking the completion and the nature of services to be performed is SESONAL and the
employment is for the duration of the season.

Temporary EE becoming Regular --
A typist-clerk cannot be said as a temporary EE because it is far from being specific or seasonal;
she is a regular EE because he has been engaged to perform activities necessary and desirable in
the usual business.

SALAZAR vs. NLRC (1996)

Petitioner Salazar, was employed as construction/project engineer by HL Carlos
Construction for the construction of the Monte de Piedad building in Cubao, Quezon City.
Salazar received a memorandum issued by the companys project manager, informing
him of the termination of his services.
Salazar filed a complaint for illegal dismissal, and for non-payment of benefits
LA: declared that Salazar is not entitled to separation pay. He was hired as a PROJECT
EMPLOYEE and his services were terminated due to the completion of the project.
NLRC affirmed

Issue: Whether Salazar is a project EE and, therefore, not entitled to separation pay

GR: Project EEs are entitled to separation
EXPN: Project EEs are not entitled to
separation pay if they are terminated as a
result of the completion of the project,
regardless of the projects in which they have
been employed.

Salazars dismissal was due to the completion of the construction of the building.


Petitioner Eugenio De Jesus, was a carpenter for the respondent Philippine National
Construction Corporation. While on duty, he vomited blood and was treated at the Company
clinic. After 3months, he reported back, but he was no longer accepted.
De Jesus filed a complaint for reinstatement with backwages and payment legal benefits.
The Company contended that De Jesus was hired as a PROJECT EMPLOYEE and his
separation was due to the completion of the project.
Salazar contended that he was given appointments for specific project since 1974 up to
1984. Hence, he has become a REGULAR EE and not a PROJECT EE who may be
terminated only for a lawful cause.

Issue: Whether Salazar is considered a regular EE

A non-project EE is entitled to regular employment if he has rendered service for more than 10
years. As such he can not be terminated unless for just cause.

There are 3 types of non-project employees;
1. Probationary; 2. Regular; and 3. Casual
Based on the action form filed by the petitioner he is considered as probationary who after 6
months have achieve a regular status.

MERCADO, SR., vs. NLRC (1991)

Petitioners were agricultural workers utilized by private respondents in all the agricultural
phases of work on the 7 1/2 hectares of rice land and 10 hectares of sugar land owned by the
They contended that they started to work in the farm of private respondents between 1949
and 1979. In any case, their individual employment exceeds 1 year.
Petitioners were dismissed from work. Hence, they filed a complaint for illegal dismissal
Private respondent Cruz denied that the said petitioners were her regular employees and
contended that she engaged their services through spouses Mercado who supply workers
needed by owners of various farms, but only to do a particular phase of agricultural work
necessary in rice and sugar production and after which they would be free to render their
services to other farm owners who need their services.

Issue: Whether petitioners are considered regular EEs and, therefore, entitled to benefits.

Project EEs do not become Regular EEs although service exceeds 1 year.

Although the workers rendered service for almost 30 years, they cannot be considered as regular
or permanent employee, because of the fact that:
1. They were FREE to work for other farm owners;
2. They FREE to CONTRACT their service with other farm owner;
3. They were MERE project employees, who could be hired by other farm owners.

Petitioners being project EEs, or, to use the correct term, seasonal EEs, their employment legally
ends upon the completion of each project the season


Respondent Doroteo R. Alegre was engaged as athletic director by Brent School, Inc. for
a fixed and specific term of five (5) years,
Subsequent subsidiary agreements reiterated the same terms and conditions, including the
expiry date, as those contained in the original contract.
3 months before the expiration of the stipulated period, Alegre was terminated on the
ground of completion of contract and expiration of definite period of employment
Alegre protested that since his services were necessary and desirable in the usual business
of his ER, and his employment had lasted for 5 years, he had acquired the status of a regular
employee and could not be removed except for valid cause.

Issue: Whether Alegre was lawfully teminiated?

Article 280 does not proscribe or prohibit employment contract with a fixed period,
PROVIDED the same is entered into by the parties without any force, duress or improper
pressure upon the EE and in the absence of vitiating consent

Reason: Contracts of employment govern the relationship of the parties. Any stipulation in the
contract, not contrary to law, morals, good customs, public order and public policy, is valid,
binding and must be respected.
***This practice is however legally questionable if done in a more or less continuous basis with
the objective of avoiding regularization as it in effect circumvents the law on security of tenure
of the workers.

In the CAB, the employment contract is valid, binding, and must be respected.


Private respondents (numbering 906) were hired by petitioner Pure Foods Corporation to
work for a fixed period of FIVE MONTHS at its tuna cannery plant in General Santos City.
After the expiration of their respective contracts of employment, their services were
terminated. Hence, they filed a complaint for illegal dismissal
LA: dismissed the complaint on the ground that the private respondents were mere
CONTRACTUAL WORKERS, and not regular employees; hence, they could not avail of the
law on security of tenure.
NLRC: reversed LA holding that the private respondents were regular employees. It
declared that the contract of employment for five months was a scheme to prevent [private
respondents'] right to security of tenure" and should therefore be struck down and
disregarded for being contrary to law, public policy, and morals.

Issue: Whether private respondents are considered regular EEs?

HELD: YES. NLRC affirmed.
SC struck down as invalid a 5-month contract involving workers who were performing activities
usually necessary or desirable to the business of the company.

The practice of hiring workers on uniformly fixed contract basis of 5 months, only to replace
them upon the expiration of their contracts with other workers on the same employment duration,
was to circumvent the constitutional guarantee on security of tenure and, therefore, contrary to
public policy. To uphold the contractual arrangement between the employer and the workers
would in effect permit the former to avoid hiring permanent or regular employees by simply
hiring them on a temporary or casual basis, thereby violating the employees security of tenure
in their jobs.


Complainant Ramon L. Meris was hired by respondent MERALCO as a
PROBATIONARY EMPLOYEE for 5 months as messenger. His work among others, was to
file pleadings in court, serve summons for execution, verify or follow-up cases in court and
other related matters under the legal department.
His supervisors were dissatisfied with his performance for being neglectful of his duties
and he was also uncooperative toward co-employees and disrespectful to his superiors.
Ramon received a Memorandum, advising him of the termination of his probationary
LA: ordered the reinstatement of Ramon.
NLRC: sustained the LA and held that the dismissal was illegal

Issue: Whether the dismissal of the ER before the 6 months probationary was just and valid?

HELD: YES. NLRC reversed.
The ER has the right to terminate probationary employment on justifiable causes

A probationary employee may be dismissed for cause at any time before the expiration of six (6)
months after hiring. If after working for less than six (6) months, he is found to be unfit for the
job, he can be dismissed. But if he continues to be employed longer than six (6) months, he
ceases to be a probationary employee and becomes a regular or permanent employee.

A.M. ORETA & CO., INC. vs. NLRC (1989)

Private respondent Sixto Grulla was engaged by Engineering Construction and Industrial
Development Company (ENDECO) through A.M. Oreta and Co., Inc., as a carpenter in its
projects in Jeddah, Saudi Arabia.
The contract of employment, which was entered into was for a period of 12 months.
Grulla left the Philippines for Jeddah, Saudi Arabia
Grulla met an accident which fractured his lumbar vertebra while working at the jobsite.
He was rushed to the New Jeddah Clinic and was confined there for 12 days. Grulla was
discharged from the hospital and was told that he could resume his normal duties after
undergoing physical therapy for two weeks.
Grulla reported back to his Project Manager and presented a med certificate declaring
him already fit for work. Since then, he started working again until he received a notice of
termination of his employment. Hence, he filed a complaint for illegal dismissal

Issue: Whether the EE was lawfully terminated

A probationary EE cannot be removed except for cause during the period of probation. Although
a probationary or temporary EE has limited tenure, he still enjoys security of tenure. During
his tenure, or before the contract expires, he cannot be removed except as provided for by the

Consequences of Termination

NLRC and

Petitioner Cruz had been an ER of PLDT for 16 years as an installer/repairman when he
was terminated.
It appears that sometime in August 1985, Cruz and co-repairman Moldera was instructed
to repair installations located at 325 Acacia Lane, Mandaluyong. According to PLDT, the
telephone numbers installed on the said address were actually reinstalled and functioning at
323 Acacia Lane, Mandaluyong. This out-move of the telephone was considered illegal by
the company there being no service order. Hence, Cruz was dismissed on the ground of fraud
and serious misconduct.
Both LA and NLRC arrived at the conclusion that said EE should be dismissed although
with financial assistance (10K). This was questioned by the PLDT

Issue: Whether Cruz is entitled to financial assistance

The dismissal of Cruz was valid. PLDT complied with procedural due process prior to
termination of Cruz for violation of company rules involving what can be considered fraud and

When there is doubt that dishonesty was committed, financial assistance may still be awarded to
an EE who has rendered long years of service. Despite the nature of offense, financial assistance
on ground of compassionate justice may still be given.


Mercury Drug Rule Abandoned. Reiterated the doctrine laid down in Ferrer

Private respondents were all employed as teachers on probationary basis by petitioner
Pines City Educational Center.
Said teachers signed contracts of employment with petitioner for a fixed duration. Due to
the expiration of the contracts and their poor performance as teachers, they were notified of
not to renew their contracts anymore.
The teachers filed a complaint for illegal dismissal
LA: ruled in favor of the teachers and ordered their reinstatement and to pay their full
backwages and other benefits and privileges without qualification and deduction from the
time they were dismissed up to their actual reinstatement.
NLRC: affirmed the LA

Issue: Whether the LA and NLRC are correct in ordering the reinstatement and payment of full

HELD: NO. NLRC reversed.
Interim earning should not be deducted from the awarded backwages. The law provides no
qualification nor does it state that earned income by the EE during the period of his unjust
dismissal to actual reinstatement should be deducted from such backwages. When the law does
not provide, the court shall not improvise.

The order for their reinstatement and payment of full backwages and other benefits and
privileges from the time they were dismissed up to their actual reinstatement is proper,
conformably with Article 279 of the Labor Code, as amended by RA 6715 which took effect on
March 21, 1989.

HOWEVER, in ascertaining the total amount of backwages payable to them, we go back to the
rule prior to the Mercury Drug rule that the total amount derived from employment elsewhere by
the employee from the date of dismissal up to the date of reinstatement, if any, should be
deducted therefrom. We restate the underlying reason that employees should not be permitted to
enrich themselves at the expense of their employer. To this extend, our ruling in Alex Ferrer, et
al. vs. NLRC is hereby modified.


Pines City Ruling Abandoned

Evergreen Farms claimed that petitioners are not entitled to recover backwages because they
were not actually dismissed but their probationary employment was not converted to permanent
employment; and assuming that petitioners are entitled to backwages, computation thereof
should not start from cessation of work up to actual reinstatement, and that salary earned
elsewhere (during the period of illegal dismissal) should be deducted from the award of such

The full backwages amendment by RA 6715 has NO RETROACTIVE EFFECT; it applies
only prospectively. Hence, the rule is: where the illegal dismissal happened before the effectivity
of RA 6715 (3/21/89), the award of backwages is limited to 3 years without deduction or
qualification. BUT if the illegal dismissal happened on or after the effectivity of RA 6715, the
award of backwages should be computed from the time of illegal dismissal up to actual
reinstatement without any deductions.


DISMISSAL IS LEGAL: Dismissal is justified, but because there was no due process, EE is
entitled to indemnification

Private respondent Roberto Mallare was hired by Wephil Corp. as a crew member at its
Cubao Branch.
Mallare had an altercation with a co-employee, Job Barrameda, as a result of which he
and Barrameda were suspended and later on served with notice of dismissal.
Mallare filed a complaint for llegal dismissal.
LA: dismissed the complaint for lack of merit.
NLRC: reversed LA and ordered the reinstatement of Mallare
Wenphil prayed for restraining order alleging that NLRC committed a grave abuse of
discretion. The court issued a restraining order.
Mallare contended that he was denied due process because there was no investigation
prior his dismissal.
According to Wenphil, under the Personnel Manual of the corp., an investigation shall
only be conducted if the offense committed by the employee is punishable with the penalty
higher than suspension of fifteen (15) days and the erring employee requests for an
investigation of the incident. Wenphil alleges that Mallare did not ask for investigation,
hence waived his right to the investigation.

Issue: Whether Mallare was denied due process, hence entitled to indemnity

The contention of Wenphil is untenable.

In the CAB, Mallare received an official notice of his termination 4 days later after he was
dismissed. His refusal to explain his side cannot be considered as a waiver of his right to an
investigation. Although in the Personnel Manual, it states that an erring employee must request
for an investigation it does not thereby mean that the ER is thereby relieved of the duty to
conduct an investigation before dismissing its EE.

The failure of petitioner to give private respondent the benefit of a hearing before he was
dismissed constitutes an infringement of his constitutional right to due process of law and equal
protection of the laws.

A dismissal for a valid reason is legal and valid, but the ER who does not observe due process
must pay some INDEMNITY for its breach of legal procedure; the measure of damages will
depend on the facts of the case, and on the gravity of the omission by the employer


Wenphil Doctrine does not apply.
ILLEGAL DISMISSAL: Dismissal is NOT justified; Due Process not observed.

Capt. Epifanio Siete was employed as Master of M/V Houda G by Sultan Shipping Co.,
Sometime later, Capt. Wilfredo Lim boarded the vessel and advised Siete that he had
instructions from the owners to take over its command for unexplained reason
Siete filed a complaint for illegal dismissal.
Petitioner alleged in its answer that Siete had been dismissed because of his failure to
comply with the instruction of Sultan Shipping to erase the timber load line on the vessel and
for his negligence in the discharge of the cargo at Tripoli that endangered the vessel and
POEA: dismissed the complaint, holding that there was valid cause for Sietes removal.
Siete appealed to the NLRC contending that he was dismissed without even being
informed of the charges against him or given an opportunity to refute them.
NLRC: reversed the POEA holding that the dismissal violated due process and that the
documents submitted by the petitioner were hearsay, self-serving, and not verified.
Hellenic argues that whatever defects might have tainted the EEs dismissal were
subsequently cured when the charges against him were specified and sufficiently discussed in
the position papers submitted by the parties to the POEA.

Issue: Whether due process was observed by the ER

The law requires that the investigation be conducted before the dismissal, not after. That
omission cannot be corrected by the investigation later conducted by the POEA. As the Solicitor
General correctly maintained, the due process requirement in the dismissal process is different
from the due process requirement in the POEA proceeding. Both requirements must be
separately observed.

While it is true that in Wenphil Corp. vs. NLRC and Rubberworld (Phils.) vs. NLRC, the lack of
due process before the dismissal of the employee was deemed corrected by the subsequent
administrative proceedings where the dismissed employee was given a chance to be heard, those
cases involved dismissals that were later proved to be for a valid cause. The doctrine in those
cases is not applicable to the case at bar because our findings here is that the dismissal was not

VIERNES vs. NLRC (2003)

EE entitled to full backwages because he was illegally dismissed; He is also entitled to
indemnification because due process was not observed

Complainants worked as meter readers with Benguet Electric Cooperative when they
were served a notice of termination because of retrenchment. According to the company,
they need to retrench its personnel because they are already over staffed.
The complainants filed for illegal dismissal contending that they were not apprentices but
regular employees whose services were illegally and unjustly terminated in a manner that
was whimsical and capricious.
On the other hand, the respondent invokes Article 283 of the LC in defense of the
questioned dismissal.
LA: dismissed the complaints for lack of merit but ordered the ER to pay the EEs the
amount representing underpayment of their wages, and to pay indemnity and attorneys fees.
NLRC: modified LA and ordered the reinstatement of the complainants with payment of
backwages limited to one year and deleting the award of indemnity and attorneys fees.

Issue: Whether NLRC committed grave abuse of discretion in deleting the award of indemnity

An ER becomes liable to pay indemnity to a dismissed EE if the ER fails to comply with the
requirements of due process. The indemnity is in the form of nominal damages intended not to
penalize the employer but to vindicate or recognize the employees right to procedural due
process which was violated by the employer.

We do not agree with the ruling of the NLRC that indemnity is incompatible with the award of
backwages. These two awards are based on different considerations. Backwages are granted on
grounds of equity to workers for earnings lost due to their illegal dismissal from work. On the
other hand, the award of indemnity is meant to vindicate or recognize the right of an employee to
due process which has been violated by the employer.

In the CAB, the ER failed to comply with the provisions of Article 283 of the Labor Code which
requires an employer to serve a notice of dismissal upon the employees sought to be terminated
and to the Department of Labor, at least one month before the intended date of termination.
Hence, it is liable to pay indemnity to petitioners. Thus, we find that the NLRC committed grave
abuse of discretion in deleting the award of indemnity.


Petitioner company transferred its tobacco processing plant in Balintawak, Quezon City
to Candon, Ilocos Sur. The company therein did not actually close its entire business but
merely relocated its tobacco processing and redrying operations to another place.
Two groups of seasonal workers claimed separation benefits after the closure of the
plant in Balintawak. Petitioner refuses to grant separation pay to the workers belonging to
the first batch (referred to as the Lubat group), because they had not been given work during
the preceding year and, hence, were no longer in its employ at the time it closed its
Balintanwak plant. Likewise, it claims exemption from awarding separation pay to the
second batch (the Luris group), because the closure of its plant was due to serious business
losses, as defined in Article 283 of the Labor Code.
LA: ordered petitioner to pay the complainants their respective separation pay, equivalent
to one-half month pay for every year of service.
NLRC: affirmed LA
When the separation benefits were given to the complainants, the latter alleged that there
is wrong computation when management did not consider 3/4 of their length of service as
According to petitioner co., the separation pay of a seasonal worker, who works only for
a fraction of a year, should not be equated with that of a regular worker. Petitioner submits
that the formula for the computation of a seasonal workers separation pay is Total No. Of
Days actually worked / Total No. Of Working Days in One Yeas x Daily Rate x 15 days
The complainants claimed that their separation pay should be based on the actual number
of years they have been in petitioners company.

Issue: Whether the computation adopted by petitioner company in granting complainants
separation pay is erroneous

The amount of separation pay is based on two factors: the amount of monthly salary and the
number of years of service. Although the Labor Code provides different definitions as to what
constitutes one year of service, Book Six does not specifically define one year of service for
purposes of computing separation pay. However, Articles 283 and 284 both state in connection
with separation pay that a fraction of at least six months shall be considered one whole year.

Applying this to the case at bar, we hold that the amount of separation pay which respondent
members of the Lubat and Luris groups should receive is one-half () their respective average
monthly pay during the last season they worked multiplied by the number of years they actually
rendered service, provided that they worked for at least six months during a given year.

The formula that petitioner company proposes, wherein a year of work is equivalent to actual
rendered for 303 days, is both unfair and inapplicable, considering that Articles 283 and 284
provide that in connection with separation pay, a fraction of at least six months shall be
considered one whole year. Under these provisions, an employee who worked for only six
months in a given year which is certainly less than 303 days is considered to have worked
for one whole year.


Asionics Philippines, Inc. ("API"') is a domestic corporation engaged in the business of
assembling semi-conductor chips and other electronic products mainly for export.
Yolanda Boaquina and Juana Gayola started working for API as material control clerk
and as production operator when they were dismissed by API
API entered into a CBA with the Federation Free Workers ("FFW"). However, a
deadlock ensued and the union decided to file a notice of strike. API was forced to suspend
operations and Boaquina and Gayola were among the employee asked to take a leave from
Upon the resolution of the deadlock, Boaquina and Gayola was directed to report back to
Inasmuch as its business activity remained critical, API was constrained to implement a
company-wide retrenchment . Boaquina was one of those affected by the retrenchment. And
was informed that her services were to be dispensed with
Dissatisfied with their union (FFW), Boaquina and Gayola, together with some of other
co-employees, joined the Lakas ng Manggagawa sa Pilipinas Labor Union ("Lakas Union"')
where they eventually became members of its Board of Directors.
Lakas Union filed a notice of strike against API on the ground of ULP. API filed a
complaint for illegal strike
LA: declared the strike staged by Lakas Union to be illegal and ruled that all the officers
of the Unions at the time of the strike are to have lost their employment status.
Boaquina and Gayola filed a complaint for illegal dismissal against API and its manager
Frank Yih
LA: held that API is guilty of illegal dismissal and ordered it to pay private respondent
Yolanda Boaquina separation pay of one-half (1/2) month pay for every year of service, plus
overtime pay, and to reinstate private respondent Juana Gayola with full backwages from the
time her salaries were withheld from her until her actual reinstatement.
NLRC: reversed LA in holding that API is guilty of illegal dismissal but ruled that the
strike was illegal.
Petitioner API argued that that respondents should not be entitled to separation pay
because of their involvement in the strike which was declared illegal.

Issue1: Whether private respondents are entitled to separation pay despite having participated in
an illegal strike?
The termination of employment of private respondents was due to the retrenchment policy
adopted by API and not because of the former's union activities.

Issue2: Whether a stockholder/director/officer of a corporation can be held liable for the
obligation of the corporation absent of finding of bad faith
A corporation is a juridical entity with legal personality separate and distinct from those acting
for and in its behalf and, in general, from the people comprising it. The rule is that obligations
incurred by the corporation, acting through its directors, officers and employees, are its sole
liabilities. Nevertheless, being a mere fiction of law, peculiar situations or valid grounds can
exist to warrant, albeit done sparingly, the disregard of its independent being and the lifting of
the corporate veil. As a rule, this situation might arise when a corporation is used to evade a just
and due obligation or to justify a wrong, to shield or perpetrate fraud, to carry out similar
unjustifiable aims or intentions, or as a subterfuge to commit injustice and so circumvent the law.

Nothing on record is shown to indicate that Frank Yih has acted in bad faith or with malice in
carrying out the retrenchment program of the company. His having been held by the NLRC to be
solidarily and personally liable with API is thus legally unjustified.

WHEREFORE, the questioned decision of the NLRC is MODIFIED insofar as it holds herein
petitioner Frank Yih personally liable with API.


Petitioner Victor Custodio worked for private resp. First Farmers Milling and Marketing
Assoc. as Asst. General Manager for almost 17 years.
The ER, through its board of directors, decided to purchase a boiler, the cost of which
would amount to several million pesos. An evaluation committee was constituted with
petitioner as chairman. A dispute arose between Custodio and the general manager regarding
the committee's recommendations, particularly, the brand of boiler recommended, leading to
charges and countercharges of kickbacks or commissions given to officers and directors by
the suppliers. Because of this, Cutodio submitted a letter of resignation
In the board's meeting, Custodios letter of resignation was discussed. The minutes
stated:that the letter of resignation submitted by Mr. Victor Custodio is irrevocable and he is
considered resigned as soon as the board takes cognizance of his irrevocable letter of
Custodio expressed his intention to withdraw his letter of resignation. The president
reported that no letter of withdrawal has been received. In as much as the Board believed that
it had no choice on the matter it did not take any action on the resignation except to take
cognizance of it.
When petitioner went back to work, he was informed that he was no longer connected
with the company and transaction made by him shall be void.
Custodio filed a complaint for illegal dismissal
The Co. contends that since his resignation letter used the word. "irrevocable," his
resignation need not be accepted by private respondent and could no longer be withdrawn by

Issue: Whether the resignation of Custodio may be withdrawn?

The undisputed facts and circumstances support the conclusion that petitioner's resignation never
became effective. Despite its being termed "irrevocable," neither the petitioner nor the private
respondent treated it as such.

Resignation is withdrawable even if the EE has called it irrevocable. But after it is accepted or
approve by the ER, its withdrawal needs the ERs consent.

WHEREFORE, the petition is GRANTED. Private respondent is ORDERED to reinstate
petitioner. But, considering the time that has elapsed, should petitioner's reinstatement to his
former or a substantially equivalent position be no longer feasible, he shall be entitled to
separation pay equivalent to one (1) month's salary for every year of service, in addition to the


2 union officers, Catinoy and Saturnino, had a fight inside the union office, an act that
violates company rules and union by-laws. The union executive board decided to place them
on indefinite suspension and requested the company, Hyatt Taxi Services Inc., to implement
it. The company place the 2 on preventive suspension for 30 days
Catinoy, aggrieved by the preventive suspension since he was not the aggressor, filed a
complaint for illegal suspension. After the lapse of 30 days, he reported to work but was not
allowed to resume his duties. He amended his complaint to include constructive dismissal
LA: found the Hyatt taxi to be guilty of illegal preventive suspension and illegal
constructive dismissal
Hyatt and the union appealed to the NLRC
NLRC: affirmed LA.. HOWEVER, upon MFR, the NLRC deleted the award of
backwages because there was no concrete showing that the complainant was constructively
CA: reinstated the LAs decision

Issue: Whether the private respondent was constructively dismissed

HELD: YES. CA affirmed.
Preventive suspension beyond 30 days amounts to constructive dismissal. It shows that
respondent was not taken back by petitioner Hyatt after the 30-day suspension period. Clearly,
constructive dismissal had already set in when the suspension went beyond the maximum period
allowed by law.


Petitioner Delfin A. Brion became a member of respondent South Philippine Union
Mission of the Seventh Day Adventist Church (hereafter SDA). He became an ordained
minister and president of the Northeastern Mindanao Mission of the Seventh Day Adventist
Church in Butuan City.
Respondent SDA claims that due to corruption charges, Brion was transferred to the
Davao Mission. Thereafter, allegedly due to an act of indiscretion with a masseuse,
petitioner was demoted to the position of Sabbath School Director at the Northern Mindanao
Mission of the SDA located at Cagayan de Oro City. Here, petitioner worked until he retired
in 1983. As was the practice of the SDA, petitioner was provided a monthly amount as a
retirement benefit.
Sometime thereafter, Brion got into an argument with Samuel Sanes, another pastor of
the SDA. This disagreement degenerated into a rift between Brion and the SDA, culminating
in the establishment by Brion of a rival religious group which he called the Home Church.
He succeeded in enticing a number of SDA members to become part of his congregation
Because of his actions, Brion was excommunicated by the SDA and his name was
dropped from the Church Record Book. As a consequence of his disfellowship,
petitioners monthly retirement benefit was discontinued by the SDA.
Brion filed an action for mandamus with the RTC of Cagayan de Oro City asking that the
SDA restore his monthly retirement benefit.
RTC: finds in favor of Brion and ordered SDA to pay the retirement benefits
CA: reversed RTC and ordered the dismissal of Brions complaint.

Issue: Whether Brion is entitled to retirement benefits
HELD: YES. We find for petitioner.

Retirement has been defined as a withdrawal from office, public station, business, occupation, or
public duty. It is the result of a bilateral act of the parties, a voluntary agreement between the
employer and the employee whereby the latter, after reaching a certain age, agrees and/or
consents to sever his employment with the former. In this connection, the modern socio-
economic climate has fostered the practice of setting up pension and retirement plans for private
employees, initially through their voluntary adoption by employers, and lately, established by
legislation. Pension schemes, while initially humanitarian in nature, now concomitantly serve to
secure loyalty and efficiency on the part of employees, and to increase continuity of service and
decrease the labor turnover by giving to the employees some assurance of security as they
approach and reach the age at which earning ability and earnings are materially impaired or at an

Art. 287. Retirement. Any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other applicable employment contract.
In case of retirement, the employee shall be entitled to receive such retirement benefits as he may
have earned under existing laws and any collective bargaining agreement and other

From the above, it can be gleaned that employer and employee are free to stipulate on retirement
benefits, as long as these do not fall below the floor limits provided by law.

In the present case, petitioner was adjudged by the SDA in 1983, to be qualified for retirement,
such that when it began paying petitioner retirement benefits in said year, it must have been
convinced that petitioner had devoted his life to the work of the Seventh-day Adventist
Church. Having arrived at such a conclusion, it may not now reverse this finding to the
detriment of petitioner.


Labor and Employment directing the University of the East to pay the faculty members
concerned retirement benefits in accordance with their collective bargaining agreement, in
addition to the payment of separation pay according to the Termination Pay Law.
The then president of the University of the East (UE) announced the phase-out of the
College of Secretarial Education and the High School Department respectively on the
grounds of lack of economic viability and financial losses.
The respondent UE Faculty Association opposed the phaseout, contending that such
action contravened the law because it constitutes union busting. The private respondent filed
a notice of strike with the Bureau of Labor Relations (BLR).
BLR conducted several conciliation proceedings but when no amicable settlement was
reached, the respondent Minister issued an order assuming jurisdiction over the case and
directing the BLR to receive evidence in connection with the dispute.
Respondent Minister of Labor ruled that the phaseout of the two departments was
arbitrary and ordered UE to pay all affected faculty members of the College Secretarial
Education and the High School Department a separation pay. In addition to the termination
pay, the University is likewise directed to pay retirement benefits to all affected faculty
members who, in accordance with the collective bargaining agreement, are retireable prior to
or at the time of the phase-out."
Petitioner arguesns that the award of separation pay pursuant to the Termination Pay Law
necessarily excludes retirement benefits.

Issue: Whether the Minister of Labor and Employment committed grave abuse of discretion in
awarding both retirement benefits and separation pay to the faculty members affected by the

HELD: NO. We rule for the respondents.
Separation pay arising from a forced termination of employment and benefits given as a
contractual right due to many years of faithful service are not necessarily exclude each other.

Clearly, the only situation contemplated in the CBA wherein an employee shall be precluded
from receiving retirement benefits is when said employee is not separated from service but
transferred instead from one college or department to another. There is no provision to the effect
that teachers who are forcibly dismissed are not entitled to retirement benefits if the MOLE
awards them separation pay. Furthermore, since the above provision has become in effect part of
the petitioner's policy, the same should be enforced separately from the provisions of the
Termination Pay Law.


Romeo Hughes, a bus driver, met an accident when the bus he was driving was hit by a
train. His ER sued the railroad company. Romeo was absolved of contributory negligence but
suspended by his ER
Soon after the judgment was rendered against the railroad company, he renewed his
drivers license and asked for reinstatement. But he was asked to wait until the criminal case
was decided.
When the criminal case was dismissed, he repeated his request for reinstatement but it
was ignored
Romeos lawyer made a formal demand in writing but it was denied by the ER. Hence,
Romeo filed a formal complaint
Regional Director: dismissed the complaint on the ground that it was filed beyond the
prescriptive period prescribe in Art. 291 counted from the date of collision.

Issue: Whether the complaint was filed beyond the prescriptive period
Since a 'cause of action' requires, as essential elements, not only a legal right of the plaintiff and
a correlative obligation of the defendant but also 'an act or omission of the defendant in violation
of said legal right,' the cause of action does not accrue until the party obligated refuses, expressly
or impliedly, to comply with its duty.

Romeos cause of action accrued on May 10, 1980, when the ER denied his demand for
reinstatement. The earlier requests made by Romeo having been warded off with indefinite
promises, and Romeo not yet having decided to assert his right, his cause of action could not be
said to have then already accrued. As Romeos complaint was filed not later than 3 months only
after such rejection, there is no question that his action has prescribed, whatever prescriptive
period is applied.

- wages from the time of illegal termination up to the actual reinstatement
1. Mercury Drug vs. NLRC
- 3 years pay without qualification and deduction
2. Ferrer vs. NLRC
- wages from time of illegal dismissal to actual reinstatement MINUS earnings
elsewhere (earnings from the new job while case is pending)
3. Osmalik Bustamante vs. NLRC
- wages from the time of illegal dismissal up to actual reinstatement without any
Copyright 2010, Noel S. Juni
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