Labrel 1

G.R. No.
163782
March 24, 2006
LIGHT RAIL TRANSIT AUTHORITY, vs. PERFECTO H. VENUS, JR.,

BIENVENIDO P. SANTOS, JR., RAFAEL C. ROY, NANCY C. RAMOS,
SALVADOR A. ALFON, NOEL R. SANTOS, MANUEL A. FERRER, SALVADOR G.
ALINAS, RAMON D. LOFRANCO, AMADOR H.POLICARPIO, REYNALDO B.
GENER, and BIENVENIDO G. ARPILLEDA,
G.R. No. 163881
March 24, 2006
METRO TRANSIT ORGANIZATION, INC., vs.COURT OF APPEALS, PERFECTO

H. VENUS, JR., BIENVENIDO P. SANTOS, JR., RAFAEL C. ROY, NANCY C.
RAMOS, SALVADOR A. ALFON, NOEL R. SANTOS, MANUEL A. FERRER,
SALVADOR G. ALINAS, RAMON D. LOFRANCO, AMADOR H. POLICARPIO,
and REYNALDO B. GENER,
PUNO, J.:
Before us are the consolidated petitions of Light Rail Transit Authority (LRTA) and
Metro Transit Organization, Inc. (METRO), seeking the reversal of the Decision of
the Court of Appeals directing them to reinstate private respondent workers to their
former positions without loss of seniority and other rights and privileges, and
ordering them to jointly and severally pay the latter their full back wages, benefits,
and moral damages. The LRTA and METRO were also ordered to jointly and
severally pay attorneys fees equivalent to ten percent (10%) of the total money
judgment.
Petitioner LRTA is a government-owned and controlled corporation created by
Executive Order No. 603, Series of 1980, as amended, to construct and maintain a
light rail transit system and provide the commuting public with an efficient,
economical, dependable and safe transportation. Petitioner METRO, formerly
Meralco Transit Organization, Inc., was a qualified transportation corporation duly
organized in accordance with the provisions of the Corporation Code, registered
with the Securities and Exchange Commission, and existing under Philippine laws.
It appears that petitioner LRTA constructed a light rail transit system from
Monumento in Kalookan City to Baclaran in Paraaque, Metro Manila. To provide the
commuting public with an efficient and dependable light rail transit system,
petitioner LRTA, after a bidding process, entered into a ten (10)-year Agreement for
the Management and Operation of the Metro Manila Light Rail Transit System from
June 8, 1984 until June 8, 1994 with petitioner METRO.1The Agreement provided,
among others, that
1. Effective on the COMMENCEMENT DATE, METRO shall accept and take over from
the AUTHORITY [LRTA] the management, maintenance and operation of the
commissioned and tested portion of the [Light Rail Transit] System x x x [par.
2.02];
2. The AUTHORITY [LRTA] shall pay METRO the MANAGEMENT FEE as follows x x x
[par. 5.01];
3. In rendering these services, METRO shall apply its best skills and judgment, in
attaining the objectives of the [Light Rail Transit] System in accordance with
accepted professional standards. It shall exercise the required care, diligence and
efficiency in the discharge of its duties and responsibilities and shall work for the
best interest of the [Light Rail Transit] System and the AUTHORITY [LRTA] [par.
2.03];
4. METRO shall be free to employ such employees and officers as it shall deem
necessary in order to carry out the requirements of [the] Agreement. Such
employees and officers shall be the employees of METRO and not of the AUTHORITY
[LRTA]. METRO shall prepare a compensation schedule and the corresponding
salaries and fringe benefits of [its] personnel in consultation with the AUTHORITY
[LRTA] [par. 3.05];
5. METRO shall likewise hold the AUTHORITY [LRTA] free and harmless from any
and all fines, penalties, losses and liabilities and litigation expenses incurred or
suffered on account of and by reason of death, injury, loss or damage to
passengers and third persons, including the employees and representatives of the
AUTHORITY [LRTA], except where such death, injury, loss or damage is attributable
to a defect or deficiency in the design of the system or its equipment [par. 3.06].
Pursuant to the above Agreement, petitioner METRO hired its own employees,
including herein private respondents. Petitioner METRO thereafter entered into a
collective bargaining agreement with Pinag-isang Lakas ng Manggagawa sa METRO,
Inc. National Federation of Labor, otherwise known as PIGLAS-METRO, INC. NFL
KMU (Union), the certified exclusive collective bargaining representative of the
rank-and-file employees of petitioner METRO.
Meanwhile, on June 9, 1989, petitioners LRTA and METRO executed a Deed of Sale
where petitioner LRTA purchased the shares of stocks in petitioner
METRO.2However, petitioners LRTA and METRO continued with their distinct and
separate juridical personalities. Hence, when the above ten (10)-year Agreement
expired on June 8, 1994, they renewed the same, initially on a yearly basis, and
subsequently on a monthly basis.
On July 25, 2000, the Union filed a Notice of Strike with the National Conciliation
and Mediation Board National Capital Region against petitioner METRO on account
of a deadlock in the collective bargaining negotiation. On the same day, the Union
struck. The power supply switches in the different light rail transit substations were
turned off. The members of the Union picketed the various substations. They
completely paralyzed the operations of the entire light rail transit system. As the
strike adversely affected the mobility of the commuting public, then Secretary of
Labor Bienvenido E. Laguesma issued on that same day an assumption of
jurisdiction order3directing all the striking employees "to return to work
immediately upon receipt of this Order and for the Company to accept them back
under the same terms and conditions of employment prevailing prior to the
strike."4
In their memorandum,5Department of Labor and Employment Sheriffs Feliciano R.
Orihuela, Jr., and Romeo P. Lemi reported to Sec. Laguesma that they tried to
personally serve the Order of assumption of jurisdiction to the Union through its
officials and members on July 26, 2000, but the latter refused to receive the same.
The sheriffs thus posted the Order in the different stations/terminals of the light rail
transit system. Further, the Order of assumption of jurisdiction was published on
the July 27, 2000 issues of the Philippine Daily Inquirer6and the Philippine Star.7
Despite the issuance, posting, and publication of the assumption of jurisdiction and
return to work order, the Union officers and members, including herein private
respondent workers, failed to return to work. Thus, effective July 27, 2000, private
respondents, Perfecto Venus, Jr., Bienvenido P. Santos, Jr., Rafael C. Roy, Nancy C.
Ramos, Salvador A. Alfon, Noel R. Santos, Manuel A. Ferrer, Salvador G. Alinas,
Ramon D. Lofranco, Amador H. Policarpio, Reynaldo B. Gener, and Bienvenido G.
Arpilleda, were considered dismissed from employment.
In the meantime, on July 31, 2000, the Agreement for the Management and
Operation of the Metro Manila Light Rail Transit System between petitioners LRTA
and METRO expired. The Board of Directors of petitioner LRTA decided not to renew
the contract with petitioner METRO and directed the LRTA management instead to
immediately take over the management and operation of the light rail transit
system to avert the mass transportation crisis.
On October 10, 2000, private respondents Venus, Jr., Santos, Jr., and Roy filed a
complaint for illegal dismissal before the National Labor Relations Commission
(NLRC) and impleaded both petitioners LRTA and METRO. Private respondents
Ramos, Alfon, Santos, Ferrer, Alinas, Lofranco, Policarpio, Gener, and Arpilleda
follwed suit on December 1, 2000.
On October 1, 2001, Labor Arbiter Luis D. Flores rendered a consolidated judgment
in favor of the private respondent workers8
WHEREFORE, judgment is hereby rendered in favor of the complainants and against
the respondents, as follows:
1. Declaring that the complainants were illegally dismissed from employment and
ordering their reinstatement to their former positions without loss of seniority and
other rights and privileges.
2. Ordering respondents Metro Transit Organization, Inc. and Light Rail Transit
Authority to jointly and severally pay the complainants their other benefits and full
backwages, which as of June 30, 2001 are as follows:
1. Perfecto H. Venus, Jr. P247,724.36
2. Bienvenido P. Santos, Jr.
3. Rafael C. Roy
247,724.36
247,724.36
4. Nancy [C.] Ramos
254,282.62
5. Salvador A. Alfon
257,764.62
6. Noel R. Santos
221,897.58
7. Manuel A. Ferrer 250,534.78

8. Salvador G. [Alinas]
253,454.88
9. Ramon D. Lofranco
253,642.18
10. Amador H. Policarpio 256,609.22

11. Reynaldo B. Gener
255,094.56
TOTAL P2,746,453.52
Authority to jointly and severally pay each of the complainants the amount of
P50,000.00 as moral damages.
Authority to jointly and severally pay the complainants attorneys fees equivalent to
ten percent (10%) of the total money judgment.
SO ORDERED.
The complaint filed by Bienvenido G. Arpilleda, although initially consolidated with
the main case, was eventually dropped for his failure to appear and submit any
document and position paper.9
On May 29, 2002, on appeal, the NLRC found that the striking workers failed to
heed the return to work order and reversed and set aside the decision of the labor
arbiter. The suit against LRTA was dismissed since "LRTA is a government-owned
and controlled corporation created by virtue of Executive Order No. 603 with an
original charter"10and "it ha[d] no participation whatsoever with the termination of
complainants employment."11In fine, the cases against the LRTA and METRO were
dismissed, respectively, for lack of jurisdiction and for lack of merit.
On December 3, 2002, the NLRC denied the workers Motion for Reconsideration
"[t]here being no showing that the Commission committed, (and that) the Motion
for Reconsideration was based on, palpable or patent errors, and the fact that (the)
said motion is not under oath."
On a petition for certiorari however, the Court of Appeals reversed the NLRC and
reinstated the Decision rendered by the Labor Arbiter. Public respondent appellate
court declared the workers dismissal as illegal, pierced the veil of separate
corporate personality and held the LRTA and METRO as jointly liable for back wages.
Hence, these twin petitions for review on certiorari of the decision of public
respondent appellate court filed by LRTA and METRO which this Court eventually
consolidated.
In the main, petitioner LRTA argues that it has no employer-employee relationship
with private respondent workers as they were hired by petitioner METRO alone
pursuant to its ten (10)-year Agreement for the Management and Operation of the
Metro Manila Light Rail Transit System with petitioner METRO. Private respondent
workers recognized that their employer was not petitioner LRTA when their certified
exclusive collective bargaining representative, the Pinag-isang Lakas ng
Manggagawa sa METRO, Inc. National Federation of Labor, otherwise known as
PIGLAS-METRO, INC. NFL KMU, entered into a collective bargaining agreement
with petitioner METRO. Piercing the corporate veil of METRO was unwarranted, as
there was no competent and convincing evidence of any wrongful, fraudulent or
unlawful act on the part of METRO, and, more so, on the part of LRTA.
Petitioner LRTA further contends that it is a government-owned and controlled
corporation with an original charter, Executive Order No. 603, Series of 1980, as
amended, and thus under the exclusive jurisdiction only of the Civil Service
Commission, not the NLRC.
Private respondent workers, however, submit that petitioner METRO was not only
fully-owned by petitioner LRTA, but all aspects of its operations and administration
were also strictly controlled, conducted and directed by petitioner LRTA. And since
petitioner METRO is a mere adjunct, business conduit, and alter ego of petitioner
LRTA, their respective corporate veils must be pierced to satisfy the money claims
of the illegally dismissed private respondent employees.
We agree with petitioner LRTA. Section 2 (1), Article IX B, 1987 Constitution,

expressly provides that "[t]he civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including government-owned or
controlled corporations with original charters." Corporations with original charters
are those which have been created by special law and not through the general
corporation law. Thus, in Philippine National Oil Company Energy Development
Corporation v. Hon. Leogrado, we held that "under the present state of the law, the
test in determining whether a government-owned or controlled corporation is
subject to the Civil Service Law is the manner of its creation such that government
corporations created by special charter are subject to its provisions while those
incorporated under the general Corporation Law are not within its
coverage."12There should be no dispute then that employment in petitioner LRTA
should be governed only by civil service rules, and not the Labor Code and beyond
the reach of the Department of Labor and Employment, since petitioner LRTA is a
government-owned and controlled corporation with an original charter, Executive
Order No. 603, Series of 1980, as amended.
In contrast, petitioner METRO is covered by the Labor Code despite its later
acquisition by petitioner LRTA. In Lumanta v. National Labor Relations
Commission,13this Court ruled that labor law claims against government-owned
and controlled corporations without original charter fall within the jurisdiction of the
Department of Labor and Employment and not the Civil Service Commission.
Petitioner METRO was originally organized under the Corporation Code, and only
became a government-owned and controlled corporation after it was acquired by
petitioner LRTA. Even then, petitioner METRO has no original charter, hence, it is
the Department of Labor and Employment, and not the Civil Service Commission,
which has jurisdiction over disputes arising from the employment of its workers.
Consequently, the terms and conditions of such employment are governed by the
Labor Code and not by the Civil Service Rules and Regulations.
We therefore hold that the employees of petitioner METRO cannot be considered as
employees of petitioner LRTA. The employees hired by METRO are covered by the
Labor Code and are under the jurisdiction of the Department of Labor and
Employment, whereas the employees of petitioner LRTA, a government-owned and
controlled corporation with original charter, are covered by civil service rules. Herein
private respondent workers cannot have the best of two worlds, e.g., be considered
government employees of petitioner LRTA, yet allowed to strike as private
employees under our labor laws. Department of Justice Opinion No. 108, Series of
1999, issued by then Secretary of Justice Serafin R. Cuevas on whether or not
employees of petitioner METRO could go on strike is persuasive
We believe that METRO employees are not covered by the prohibition against
strikes applicable to employees embraced in the Civil Service. It is not disputed, but
in fact conceded, that METRO employees are not covered by the Civil Service. This
being so, METRO employees are not covered by the Civil Service law, rules and
regulations but are covered by the Labor Code and, therefore, the rights and
prerogatives granted to private employees thereunder, including the right to strike,
are available to them.
Moreover, as noted by Secretary Benjamin E. Diokno, of the Department of Budget

and Management, in his letter dated February 22, 1999, the employees of METRO
are not entitled to the government amelioration assistance authorized by the
President pursuant to Administrative Order No. 37 for government employees,
because the employees of METRO are not government employees since Metro, Inc.
"could not be considered as GOCC as defined under Section 3 (b) of E.O. 518 x x x
x"14
Indeed, there was never an intention to consider the employees of petitioner
METRO as government employees of petitioner LRTA as well neither from the
beginning, nor until the end. Otherwise, they could have been easily converted from
being employees in the private sector and absorbed as government employees
covered by the civil service when petitioner LRTA acquired petitioner METRO in
1989. The stubborn fact is that they remained private employees with rights and
prerogatives granted to them under the Labor Code, including the right to strike,
which they exercised and from which the instant dispute arose.
We likewise hold that it is inappropriate to pierce the corporate veil of petitioner
METRO. In Del Rosario v. National Labor Relations Commission, we ruled that
"[u]nder the law a corporation is bestowed juridical personality, separate and
distinct from its stockholders. But when the juridical personality of the corporation
is used to defeat public convenience, justify wrong, protect fraud or defend crime,
the corporation shall be considered as a mere association of persons, and its
responsible officers and/or stockholders shall be held individually liable. For the
same reasons, a corporation shall be liable for the obligations of a stockholder, or a
corporation and its successor-in-interest shall be considered as one and the liability
of the former shall attach to the latter. But for the separate juridical personality of a
corporation to be disregarded, the wrongdoing must be clearly and convincingly
established. It cannot be presumed."15In Del Rosario, we also held that the
"substantial identity of the incorporators of the two corporations does not
necessarily imply fraud."
In the instant case, petitioner METRO, formerly Meralco Transit Organization, Inc.,
was originally owned by the Manila Electric Company and registered with the
Securities and Exchange Commission more than a decade before the labor dispute.
It then entered into a ten-year agreement with petitioner LRTA in 1984. And, even
if petitioner LRTA eventually purchased METRO in 1989, both parties maintained
their separate and distinct juridical personality and allowed the agreement to
proceed. In 1990, this Court, in Light Rail Transit Authority v. Commission on Audit,
even upheld the validity of the said agreement.17Consequently, the agreement was
extended beyond its ten-year period. In 1995, METROs separate juridical identity
was again recognized when it entered into a collective bargaining agreement with
the workers union. All these years, METROs distinct corporate personality
continued quiescently, separate and apart from the juridical personality of petitioner
LRTA.
The labor dispute only arose in 2000, after a deadlock occurred during the collective
bargaining between petitioner METRO and the workers union. This alone is not a
justification to pierce the corporate veil of petitioner METRO and make petitioner
LRTA liable to private respondent workers. There are no badges of fraud or any
wrongdoing to pierce the corporate veil of petitioner METRO.
On this point, the Department of Justice Opinion No. 108, Series of 1999, issued by
then Secretary of Justice Serafin R. Cuevas is once again apropos:
Anent the issue of piercing the corporate veil, it was held in Concept Builders, Inc.
v. NLRC (G.R. No. 108734, May 29, 1996, 257 SCRA 149, 159) that the test in
determining the applicability of the doctrine of piercing the veil of corporate fiction
is as follows:
"1. Control, not mere majority or complete stock control, but complete domination,
not only of finances but of policy and business practice in respect to the transaction
attacked so that the corporate entity as to this transaction had at the time no
separate mind, will or existence of its own;
2. Such control must have been used by the defendant to commit fraud or wrong,
to perpetuate the violation of a statutory or other positive legal duty, or dishonest
and unjust act in contravention of plaintiffs legal rights; and
3. The aforesaid control and breach of duty must proximately cause the injury or
unjust loss complained of.
The absence of any one of these elements prevents piercing the corporate veil. In
applying the instrumentality or alter ego doctrine, the courts are concerned with
reality and not form, with how the corporation operated and the individual
defendants relationship to that operation."
Here, the records do not show that control was used to commit a fraud or wrong. In
fact, it appears that piercing the corporate veil for the purpose of delivery of public
service, would lead to a confusing situation since the outcome would be that Metro
will be treated as a mere alter ego of LRTA, not having a separate corporate
personality from LRTA, when dealing with the issue of strike, and a separate
juridical entity not covered by the Civil Service when it comes to other matters.
Under the Constitution, a government corporation is either one with original charter
or one without original charter, but never both.
In sum, petitioner LRTA cannot be held liable to the employees of petitioner METRO.
With regard the issue of illegal dismissal, petitioner METRO maintains that private
respondent workers were not illegally dismissed but should be deemed to have
abandoned their jobs after defying the assumption of jurisdiction and return-towork order issued by the Labor Secretary. Private respondent workers, on the other
hand, submit that they could not immediately return to work as the light rail transit
system had ceased its operations.
We find for the private respondent workers. In Batangas Laguna Tayabas Bus Co. v.
National Labor Relations Commission,19 we said that the five-day period for the
strikers to obey the Order of the Secretary of Justice and return to work was not
sufficient as "some of them may have left Metro Manila and did not have enough
time to return during the period given by petitioner, which was only five days. In
Batangas Laguna Tayabas Bus Co.,21 we further held
The contention of the petitioner that the private respondents abandoned their
position is also not acceptable. An employee who forthwith takes steps to protest
his lay-off cannot by any logic be said to have abandoned his work.
For abandonment to constitute a valid cause for termination of employment, there
must be a deliberate, unjustified refusal of the employee to resume his
employment. This refusal must be clearly established. As we stressed in a recent
case, mere absence is not sufficient; it must be accompanied by overt acts
unerringly pointing to the fact that the employee simply does not want to work
anymore.
In the instant case, private respondent workers could not have defied the return-towork order of the Secretary of Labor simply because they were dismissed
immediately, even before they could obey the said order. The records show that the
assumption of jurisdiction and return-to-work order was issued by Secretary of
Labor Bienvenido E. Laguesma on July 25, 2000. The said order was served and
posted by the sheriffs of the Department of Labor and Employment the following
day, on July 26, 2000. Further, the said order of assumption of jurisdiction was duly
published on July 27, 2000, in the Philippine Daily Inquirer and the Philippine Star.
On the same day also, on July 27, 2000, private respondent workers were
dismissed. Neither could they be considered as having abandoned their work. If
petitioner METRO did not dismiss the strikers right away, and instead accepted
them back to work, the management agreement between petitioners LRTA and
METRO could still have been extended and the workers would still have had work to
return to.
IN VIEW WHEREOF, the Decision of public respondent Court of Appeals is AFFIRMED
insofar as it holds Metro Transit Organization, Inc. liable for the illegal dismissal of
private respondents and orders it to pay them their benefits and full back wages
and moral damages. Further, Metro Transit Organization, Inc. is ordered to pay
attorneys fees equivalent to ten percent (10%) of the total money judgment. The
petition of the Light Rail Transit Authority is GRANTED, and the complaint filed
against it for illegal dismissal is DISMISSED for lack of merit.
SO ORDERED.
G.R. No. 94372
June 21, 1991
SAMAHANG MANGGAGAWA NG RIZAL PARK and DOMINGO ENRIQUEZ vs.

NATIONAL LABOR RELATIONS COMMISSION and NATIONAL PARK
DEVELOPMENT COMMITTEE, respondents.
Merito R. Fernandez for petitioners.
CRUZ, J.:
The petitioners were dismissed by the National Park Development Committee,
private respondent herein, on the supercilious ground that their continued
employment was "not compatible with the rules of the New Society." That was in
1972, shortly after the imposition of martial law. When the petitioners complained
to the Department of Labor, their dismissal was sustained by the Labor Arbiter. This
was not surprising because the year was 1976 and martial law was still in force.
What is surprising is this. When his decision was appealed to the NLRC, the public
respondent also affirmed the dismissal albeit on a different ground. This was on
June 29, 1990, long after the New Society had been banished and discredited. The
Freedom Constitution had already called for the eradication of "all iniquitous
vestiges of the previous regime."
The petitioners were employees of the private respondent, then under the
chairmanship of Imelda Marcos and the vice-chairmanship of the late Teodoro F.
Valencia. Sometime in August 1972, the petitioner union proposed negotiations for
the adoption of a collective bargaining agreement but the proposal was ignored.
The union then filed a notice of strike with the Bureau of Labor Relations on
September 6, 1972, on the grounds of refusal of management to bargain
collectively, refusal to recognize the union, and discrimination of union members.
The conference scheduled by the Bureau for the following day could not even be
held because the private respondent did not send a representative.
On September 16, 1972, petitioner Corazon Alparicio was dismissed. This was
followed on October 3, and 4, 1972, with the unceremonious separation also of the
other individual petitioners. The uniform reason given was the incompatibility of
their continued employment with the rules of the New Society. A sample letter read
as follows:
Republic of the Philippines

Office of the President
NATIONAL PARKS DEVELOPMENT COMMITTEE
Rizal Park, Manila
October 3, 1972
Date
Mr. Modesto Deunida
Driver Truck In-Charge
Rizal Park
Sir/Madam:
This notice terminates your services, effective immediately. Your continued
employment under the NATIONAL PARKS DEVELOPMENT COMMITTEE or in any of
its projects is not compatible with the rules of the New Society.
For immediate compliance and guidance.
(SGD.) JESUS B. ALVAREZ, JR.
Director
The proceedings were delayed when the private respondent submitted that the
complaint should be resolved by the Office of the President, resulting in the
elevation of the matter to Malacaang. The case was returned to the public
respondent on the finding that it fell under the jurisdiction of the NLRC pursuant to
P.D. No. 21, promulgated on October 14, 1972.
The Labor Arbiter dismissed the case, holding that P.D. No. 21 was not applicable,
the dismissals having been made before its effectivity date. His decision was duly
appealed to the NLRC, but action on the appeal was also delayed, and further still
when the records of the case were among those burned in the fire at the NLRC
building on December 13, 1983. According to the NLRC, it took some time before
they could be reconstituted.
In its own decision, the reorganized NLRC still saw fit to sustain the dismissals
made by the private respondent and declared as follows:
A perusal of the evidence adduced shows that the charge of unfair labor practice
allegedly committed by the respondent has not been sufficiently proven. It is well
settled that a charge for unfair labor practice must be proven by clear and
convincing evidence, which is miserably wanting in this case.
The NLRC assumed all the time that it had jurisdiction over the case. So apparently
have the petitioners in the petition now before us as the said decision is challenged
only for grave abuse of discretion in upholding the invalid dismissals. The Solicitor
General has moved for dismissal, but not on jurisdictional grounds.
In recent decisions, this Court has held that the National Parks Development
Committee is a government agency whose employees are covered by the civil
service rules and not the Labor Code.
In Perlas vs. People of the Philippines,5 we held that the Sandiganbayan had
jurisdiction over the acting director of the Committee who was under prescription
for estafa, thus:
The National Parks Development Committee was created originally as an Executive
Committee on January 14, 1963, for the development of the Quezon Memorial,
Luneta and other national parks (Executive Order No. 30). It was later designated
as the National Parks Development Committee (NPDC) on February 7, 1974 (E.O.
No. 69). On January 9, 1966, Imelda R. Marcos and Teodoro F. Valencia were
designated Chairman and Vice-Chairman respectively (E O. No. 3). Despite an
attempt to transfer it to the Bureau of Forest Development, Department of Natural
Resources, on December 1, 1975 (Letter of Implementation No. 39, issued pursuant
to PD No. 830, dated November 27, 1975, the NPDC has remained under the Office
of the President (E.O. No. 709 dated July 27, 1981).
Affirming that finding, we said in Republic vs. Court of Appeals6 as follows:
Since NPDC is a government agency, its employees are covered by civil service
rules and regulations (Sec. 2, Article IX, 1987 Constitution). Its employees are civil
service employees (Sec. 14, Executive Order No. 180).
While NPDC employees are allowed under the 1987 Constitution to organize and
join unions of their choice, there is as yet no law permitting them to strike. In case
of a labor dispute between the employees and the government. Section 15 of
Executive Order No. 180 dated June 1, 1987 provides that the Public Sector Labor
Management Council, not the Department of Labor and Employment, shall hear the
dispute. Clearly, the Court of Appeals and the lower court erred in holding that the
labor dispute between the NPDC and the members of the NPDSA is cognizable by
the Department of Labor and Employment.
Nevertheless, considering that this case has been pending since 1972 and all the
evidence needed to resolve it is before us, and more so because the issue presents
no special difficulty, the Court feels it should be decided now, without going through
the correct procedural formalities that anyway will result in the same conclusion.
Accordingly, we rule directly as follows.
A mere reading of the termination notice will readily show that the dismissals were
not for cause and that the reason given was prima facie invalid. The general
statement that the employment of the petitioners was not consonant with the rules
of the New Society was a preposterous justification. There was no indication of the
specific rules supposedly violated nor was there a showing, assuming the said rules
had been pinpointed, of how or when they had been breached by the dismissed
employees. Neither was it established that the employees were informed of the
charges against them or that they were given an opportunity to be heard in their
defense.
Such cavalier treatment of the employees could have been permitted under the socalled New Society but cannot be countenanced now under the restored democracy.
It is truly amazing that it was sustained by the present NLRC and no less
astonishing that it is now defended by the Office of the Solicitor General. That office
suggests that the burden of proof was on the petitioners, as complainants, to show
that their dismissal was illegal. This is incorrect; that office has it backwards. It is
settled that in cases of dismissal, it is the employer who must prove its validity, not
the employee who must prove its invalidity.
It must be borne in mind that the basic principle in termination cases is that the
burden of proof rests upon the employer to show that the dismissal is for just cause
and failure to do so would necessarily mean that the dismissal is not justified and,
therefore the employee is entitled to be reinstated in accordance with the mandate

of Article 280 of the New Labor Code.
By simply saying that the continued employment of the petitioners was not
consistent with the rules of the New Society, the private respondent failed to
discharge the burden of proving that the employees deserved to be dismissed. In
sustaining the dismissals despite their undisguised arbitrariness, the NLRC
committed grave abuse of discretion correctable by the extraordinary writ of
certiorari under Rule 65 of the Rules of Court.
The insolence of the Marcos government should have been corrected by now, after
more than five years since the people power revolution that banished the deposed
President and with him, it was hoped then, all the oppressions of his discredited
regime.1wphi1 It seems, however, that the effects of past arrogance have not yet
completely disappeared and, worse, are still being affirmed and stoutly defended
now by the new government. The Court will not allow this.
WHEREFORE, the petition is GRANTED. The decision of the NLRC dated June 29,
1990, is REVERSED. The private respondent is ordered to REINSTATE all the
individual petitioners without loss of seniority rights and to pay them five years
back salaries.
SO ORDERED.
G.R. No. 80767
April 22, 1991
BOY SCOUTS OF THE PHILIPPINES vs. NATIONAL LABOR RELATIONS

COMMISSION, FORTUNATO ESGUERRA, ROBERTO MALABORBOR,
ESTANISLAO MISA, VICENTE EVANGELISTA, and MARCELINO GARCIA,
respondents.
Julio O. Lopez for petitioner.
FELICIANO, J.:
This Petition for Certiorari is directed at (1) the Decision,1 dated 27 February 1987,
and (2) the Resolution2 dated 16 October 1987, both issued by the National Labor
Relations Commission ("NLRC") in Case No. 1637-84.
Private respondents Fortunato C. Esquerra, Roberto O. Malaborbor, Estanislao M.
Misa, Vicente N. Evangelista and Marcelino P. Garcia, had all been rank-and-file
employees of petitioner Boy Scouts of the Philippines ("BSP"). At the time of
termination of their services in February 1985, private respondents were stationed
at the BSP Camp in Makiling, Los Baos, Laguna.
The events which led to such termination of services are as follows:

On 19 October 1984, the Secretary-General of petitioner BSP issued Special Orders
Nos. 80, 81, 83, 84 and 85 addressed separately to the five (5) private
respondents, informing them that on 20 November 1984, they were to be
transferred from the BSP Camp in Makiling to the BSP Land Grant in Asuncion,
Davao del Norte. These Orders were opposed by private respondents who, on 4
November 1984, appealed the matter to the BSP National President.
On 6 November 1984, petitioner BSP conducted a pre-transfer briefing at its
National Headquarters in Manila. Private respondents were in attendance during the
briefing and they were there assured that their transfer to Davao del Norte would
not involve any diminution in salary, and that each of them would receive a
relocation allowance equivalent to one (1) month's basic pay. This assurance,
however, failed to persuade private respondents to abandon their opposition to the
transfer orders issued by the BSP Secretary-General.
On 13 November 1984, a complaint3
(docketed as NLRC Case No. 16-84J) for illegal transfer was filed with the then
Ministry of Labor and Employment, Sub-Regional Arbitration Branch IV, San Pablo
City, Laguna. Private respondents there sought to enjoin implementation of Special
Orders Nos. 80, 81, 83, 84 and 85, alleging, among other things, that said orders
were "indubitable and irrefutable action[s] prejudicial not only to [them] but to
[their] families and [would] seriously affect [their] economic stability and solvency
considering the present cost of living."
On 21 November 1984 (or the day immediately following the date of scheduled
transfer), the BSP Camp Manager in Makiling issued a Memorandum requiring the
five (5) private respondents to explain why they should not be charged
administratively for insubordination. The Memorandum was a direct result of the
refusal by private respondents, two (2) days earlier, to accept from petitioner BSP
their respective boat tickets to Davao del Norte and their relocation allowances.
Meanwhile, in a letter of the same date, the BSP National President informed
private respondents that their refusal to comply with the Special Orders was not
sufficiently justified and constituted rank disobedience. Memoranda subsequently
issued by the BSP Secretary-General stressed that such refusal as well as the
explanations proffered therefor, were unacceptable and could altogether result in
termination of employment with petitioner BSP. These warnings notwithstanding,
private respondents continued pertinaciously to disobey the disputed transfer
orders.
Petitioner BSP consequently imposed a five-day suspension on the five (5) private
respondents, in the latter part of January 1985. Subsequently, by Special Order
dated 12 February 1985 issued by the BSP Secretary-General, private respondents'
services were ordered terminated effective 15 February 1985.
On 22 February 1985, private respondents amended their original complaint to
include charges of illegal dismissal and unfair labor practice against petitioner BSP.4
The Labor Arbiter thereafter proceeded to hear the complaint.
In a decision5 dated 31 July 1985, the Labor Arbiter ordered the dismissal of
private respondents' complaint for lack of merit.
On 27 February 1987, however, the ruling of the Labor Arbiter was reversed by
public respondent, NLRC, which held that private respondents had been illegally
dismissed by petitioner BSP. The dispositive portion of the NLRC decision read:
WHEREFORE, premises considered the Decision appealed from is hereby SET ASIDE
and a new one entered ordering the respondent-appellee [petitioner BSP] to
reinstate the complainants-appellants [private respondents] to their former
positions without loss of seniority rights and other benefits appurtenant thereto and
with full backwages from the time they were illegally dismissed from the service up
to the date of their actual reinstatement.
SO ORDERED.
The Court notes at the outset that in the Position Paper6 filed by petitioner BSP with
the Labor Arbiter, it was alleged in the second paragraph thereof, that petitioner is a
"civic service, non-stock and non-profit organization, relying mostly [on]
government and public support, existing under and by virtue of Commonwealth Act
No. 111, as amended, by Presidential Decree No. 460 . . . " A similar allegation was
contained in the Brief for Appellee7 and in the Petition8 and Memorandum9 filed by
petitioner BSP with public respondent NLRC and this Court, respectively. The same
allegation, moreover, appeared in the Comment10 (also treated as the
Memorandum) submitted to this Court by the Solicitor General on behalf of public
respondent NLRC; for their part, private respondents stated in their Appeal
Memorandum11 with the NLRC that petitioner BSP is "by mandate of law a Public
Corporation," a statement reiterated by them in their Memorandum12 before this
Court.
In a Resolution dated 9 August 1989, this Court required the parties and the Office
of the Government Corporate Counsel to file a comment on the question of whether
or not petitioner BSP is in fact a government-owned or controlled corporation.
Petitioner, private respondents, the Office of the Solicitor General and the Office of
the Government Corporate Counsel filed their respective comments.
The central issue is whether or not the BSP is embraced within the Civil Service as
that term is defined in Article IX (B) (2) (1) of the 1987 Constitution which reads as
follows:
The Civil Service embraces all branches, subdivisions, instrumentality mentalities
and agencies of the Government, including government-owned or controlled
corporations with original charters.
xxx
xxx
xxx
The answer to the central issue will determine whether or not private respondent
NLRC had jurisdiction to render the Decision and Resolution which are here sought
to be nullified.
The responses of the parties, on the one hand, and of the Office of the Solicitor
General and the Office of the Government Corporate Counsel, upon the other hand,
in compliance with the Resolution of this Court of 9 August 1989, present a
noteworthy uniformity. Petitioner BSP and private respondents submit substantially
the same view "that the BSP is a purely private organization". In contrast, the
Solicitor General and the Government Corporate Counsel take much the same
position, that is, that the BSP is a "public corporation' or a "quasi-public
corporation" and, as well, a "government controlled corporation." Petitioner BSP's
compliance with our Resolution invokes the following provisions of its Constitution
and By-laws:
The Boy Scouts of the Philippines declares that it is an independent, voluntary, nonpolitical, non-sectarian and non-governmental organization, with obligations
towards nation building and with international orientation.
The BSP, petitioner stresses, does not receive any monetary or financial subsidy
from the Government whether on the national or local level.13 Petitioner declares
that it is a "purely private organization" directed and controlled by its National
Executive Board the members of which are, it is said, all "voluntary scouters,"
including seven (7) Cabinet Secretaries.
Private respondents submitted a supplementary memorandum arguing that while
petitioner BSP was created as a public corporation, it had lost that status when
Section 2 of Commonwealth Act No. 111 as amended by P.D. No. 460 conferred
upon it the powers which ordinary private corporations organized under the
Corporation Code have:
Sec. 2.
The said corporation shall have perpetual succession with power to sue
and be sued; to hold such real and personal estate as shall be necessary for
corporate purposes, and to receive real and personal property by gift, devise, or
bequest; to adopt a seal, and to alter or destroy the same at pleasure; to have
offices and conduct its business and affairs in the City of Manila and in the several
provinces; to make and adopt by-laws, rules and regulations not inconsistent with
the laws of the Philippines, and generally to do all such acts and things (including
the establishment of regulations for the election of associates and successors: as
may be necessary to carry into effect the provisions of the Act and promote the
purposes of said corporation.
Private respondents also point out that the BSP is registered as a private employer
with the Social Security System and that all its staff members and employees are
covered by the Social Security Act, indicating that the BSP had lost its personality
or standing as a public corporation. It is further alleged that the BSP's assets and
liabilities, official transactions and financial statements have never been subjected
to audit by the government auditing office, i.e., the Commission on Audit, being
audited rather by the private auditing firm of Sycip Gorres Velayo and Co. Private
respondents finally state that the appointments of BSP officers and staff were not
approved or confirmed by the Civil Service Commission.
The views of the Office of the Solicitor General and the Office of the Government
Corporate Counsel on the above issue appeared to be generally similar. The Solicitor
General's Office, although it had appeared for the NLRC and filed a Comment on the
latter's behalf on the merits of the Petition for Certiorari, submitted that the BSP is
a government-owned or controlled corporation, having been created by virtue of
Commonwealth Act No. 111 entitled "An Act to Create a Public Corporation to be
known as the Boy Scouts of the Philippines and to Define its Powers and Purposes."
The Solicitor General stressed that the BSP was created in order to "promote,
through organization, and cooperation with other agencies the ability of boys to do
things for themselves and others, to train them in scoutcraft, and to teach them
patriotism, courage, self-reliance, and kindred virtues, using the methods which are
now in common use by boy scouts."5 He further noted that the BSP's objectives
and purposes are "solely of a benevolent character and not for pecuniary profit by
its members.16 The Solicitor General also underscored the extent of government
participation in the BSP under its charter as reflected in the composition of its
governing body:
The governing body of the said corporation shall consist of a National Executive
Board composed of (a) the President of the Philippines or his representative; (b)
the charter and life members of the Boy Scouts of the Philippines; (c) the Chairman
of the Board of Trustees of the Philippine Scouting Foundation; (d) the Regional
Chairman of the Scout Regions of the Philippines; (e) the Secretary of Education
and Culture, the Secretary of Social Welfare, the Secretary of National Defense, the
Secretary of Labor, the Secretary of Finance, the Secretary of Youth and Sports,
and the Secretary of local Government and Community Development; (f) an equal
number of individuals from the private sector; (g) the National President of the Girl
Scouts of the Philippines; (h) one Scout of Senior age from each Scout Region to
represent the boy membership; and (i) three representatives of the cultural
minorities. Except for the Regional Chairman who shall be elected by the Regional
Scout Councils during their annual meetings, and the Scouts of their respective
regions, all members of the National Executive Board shall be either by
appointment or cooption, subject to ratification and confirmation by the Chief
Scout, who shall be the Head of State. . . .17 (Emphasis supplied)
The Government Corporate Counsel, like the Solicitor General, describes the BSP as
a "public corporation" but, unlike the Solicitor General, suggests that the BSP is
more of a "quasi corporation" than a "public corporation." The BSP, unlike most
public corporations which are created for a political purpose, is not vested with
political or governmental powers to be exercised for the public good or public
welfare in connection with the administration of civil government. The Government
Corporate Counsel submits, more specifically, that the BSP falls within the ambit of
the term "government-owned or controlled corporation" as defined in Section 2 of
P.D. No. 2029 (approved on 4 February 1986) which reads as follows:
A government-owned or controlled corporation is a stock or a non-stock
corporation, whether performing governmental or proprietary functions, which is
directly chartered by special law or if organized under the general corporation law is
owned or controlled by the government directly, or indirectly through a parent
corporation or subsidiary corporation, to the extent of at least a majority of its
outstanding capital stock or its outstanding voting capital stock.
xxx
xxx
xxx
(Emphasis supplied)
Examining the relevant statutory provisions and the arguments outlined above, the
Court considers that the following need to be considered in arriving at the
appropriate legal characterization of the BSP for purposes of determining whether
its officials and staff members are embraced in the Civil Service. Firstly, BSP's
functions as set out in its statutory charter do have a public aspect. BSP's functions
do relate to the fostering of the public virtues of citizenship and patriotism and the
general improvement of the moral spirit and fiber of our youth. The social value of
activities like those to which the BSP dedicates itself by statutory mandate have in
fact, been accorded constitutional recognition. Article II of the 1987 Constitution
includes in the "Declaration of Principles and State Policies," the following:
Sec. 13.
The State recognizes the vital role of the youth in nation-building and
shall promote and protect their physical, moral, spiritual, intellectual, and social
well-being. It shall inculcate in the youth patriotism and nationalism, and encourage
their involvement in public and civic affairs.
At the same time, BSP's sanctions do not relate to the governance of any part of
territory of the Philippines; BSP is not a public corporation in the same sense that
municipal corporations or local governments are public corporations. BSP's
functions can not also be described as proprietary functions in the same sense that
the functions or activities of government-owned or controlled corporations like the
National Development Company or the National Steel Corporation can be described
as proprietary or "business-like" in character. Nevertheless, the public character of
BSP's functions and activities must be conceded, for they pertain to the
educational, civic and social development of the youth which constitutes a very
substantial and important part of the nation.
The second aspect that the Court must take into account relates to the governance
of the BSP. The composition of the National Executive Board of the BSP includes, as
noted from Section 5 of its charter quoted earlier, includes seven (7) Secretaries of
Executive Departments. The seven (7) Secretaries (now six [6] in view of the
abolition of the Department of Youth and Sports and merger thereof into the
Department of Education, Culture and Sports) by themselves do not constitute a
majority of the members of the National Executive Board. We must note at the
same time that the appointments of members of the National Executive Board,
except only the appointments of the Regional Chairman and Scouts of Senior age
from the various Scout Regions, are subject to ratification and confirmation by the
Chief Scout, who is the President of the Philippines. Vacancies to the Board are
filled by a majority vote of the remaining members thereof, but again subject to
ratification and confirmation by the Chief Scout.18 We must assume that such
confirmation or ratification involves the exercise of choice or discretion on the part
of ratifying or confirming power. It does appears therefore that there is substantial
governmental (i.e., Presidential) participation or intervention in the choice of the
majority of the members of the National Executive Board of the BSP.
The third aspect relates to the character of the assets and funds of the BSP. The
original assets of the BSP were acquired by purchase or gift or other equitable
arrangement with the Boy Scouts of America, of which the BSP was part before the
establishment of the Commonwealth of the Philippines. The BSP charter, however,
does not indicate that such assets were public or statal in character or had
originated from the Government or the State. According to petitioner BSP, its
operating funds used for carrying out its purposes and programs, are derived
principally from membership dues paid by the Boy Scouts themselves and from
property rentals. In this respect, the BSP appears similar to private non-stock, non-
profit corporations, although its charter expressly envisages donations and

contributions to it from the Government and any of its agencies and
instrumentalities.19 We note only that BSP funds have not apparently heretofore
been regarded as public funds by the Commission on Audit, considering that such
funds have not been audited by the Commission.
While the BSP may be seen to be a mixed type of entity, combining aspects of both
public and private entities, we believe that considering the character of its purposes
and its functions, the statutory designation of the BSP as "a public corporation" and
the substantial participation of the Government in the selection of members of the
National Executive Board of the BSP, the BSP, as presently constituted under its
charter, is a government-controlled corporation within the meaning of Article IX. (B)
(2) (1) of the Constitution.
We are fortified in this conclusion when we note that the Administrative Code of
1987 designates the BSP as one of the attached agencies of the Department of
Education, Culture and Sports ("DECS").20 An "agency of the Government" is
defined as referring to any of the various units of the Government including a
department, bureau, office, instrumentality, government-owned or-controlled
corporation, or local government or distinct unit therein.21 "Government
instrumentality" is in turn defined in the 1987 Administrative Code in the following
manner:
Instrumentality refers to any agency of the National Government, not integrated
within the department framework, vested with special functions or jurisdiction by
law, endowed with some if not all corporate powers, administering special funds,
and enjoying operational autonomy usually through a charter. This term includes
regulatory agencies, chartered institutions and government-owned or controlled
corporations.
The same Code describes a "chartered institution" in the following terms:
Chartered institution refers to any agency organized or operating under a special
charter, and vested by law with functions relating to specific constitutional policies
or objectives. This term includes the state universities and colleges, and the
monetary authority of the State.23 (Emphasis supplied)
We believe that the BSP is appropriately regarded
instrumentality" under the 1987 Administrative Code.
as
"a
government
It thus appears that the BSP may be regarded as both a "government controlled
corporation with an original charter" and as an "instrumentality" of the Government
within the meaning of Article IX (B) (2) (1) of the Constitution. It follows that the
employees of petitioner BSP are embraced within the Civil Service and are
accordingly governed by the Civil Service Law and Regulations.
It remains only to note that even before the effectivity of the 1987 Constitution
employees of the BSP already fell within the scope of the Civil Service. In National
Housing Corporation v. Juco,24 decided in 1985, the Court, speaking through Mr.
Justice Gutierrez, held:
There should no longer be any question at this time that employees of governmentowned or controlled corporations are governed by the civil service law and civil
sevice rules and regulations.
Section 1, Article XII-B of the [19731 Constitution specifically provides:
The Civil Service embraces every branch, agency, subdivision and instrumentality of
the Government, including every government-owned or controlled corporation. . . .
The 1935 Constitution had a similar provision in its Section 1, Article XII which
stated:
A Civil Service embracing all branches and subdivisions of the Government shall be
provided by law.
The inclusion of "government-owned or controlled corporations" within the embrace
of the civil service shows a deliberate effort of the framers to plug an earlier
loophole which allowed government-owned or controlled corporations to avoid the
full consequences of the all encompassing coverage of the civil service system. The
same explicit intent is shown by the addition of "agency" and "instrumentality" to
branches and subdivisions of the Government. All offices and firms of the
government are covered. The amendments introduced in 1973 are not idle
exercises or meaningless gestures. They carry the strong message that civil service
coverage is broad and all-embracing insofar as employment in the government in
any of its governmental or corporate arms is concerned.
The complaint in NLRC Case No. 1637-84 having been filed on 13 November 1984,
when the 1973 Constitution was still in force, our ruling in Juco applies in the case
at bar.
In view of the foregoing, we hold that both the Labor Arbiter and public respondent
NLRC had no jurisdiction over the complaint filed by private respondents in NLRC
Case No. 1637-84; neither labor agency had before it any matter which could
validly have been passed upon by it in the exercise of original or appellate
jurisdiction. The appealed Decision and Resolution in this case, having been
rendered without jurisdiction, vested no rights and imposed no liabilities upon any
of the parties here involved. That neither party had expressly raised the issue of
jurisdiction in the pleadings poses no obstacle to this ruling of the Court, which may
motu proprio take cognizance of the issue of existence or absence of jurisdiction
and pass upon the same.
ACCORDINGLY, the Decision of the Labor Arbiter dated 31 July 1985, and the
Decision dated 27 February 1987 and Resolution dated 16 October 1987, issued by
public respondent NLRC, in NLRC Case No. 1637-84, are hereby SET ASIDE. All
other orders and resolutions rendered in this case by the Labor Arbiter and the
NLRC are likewise SET ASIDE. No pronouncement as to costs.
Fernan, C.J., Gutierrez, Jr., Bidin and Davide Jr., JJ., concur.
G.R. No. 78909
June 30, 1989
MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO,

Vs. THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL DlRECTOR
OF LABOR, REGION X, respondents.
MEDIALDEA, J.:
This is a petition for certiorari seeking the annulment of the Decision of the
respondent Secretary of Labor dated September 24, 1986, affirming with
modification the Order of respondent Regional Director of Labor, Region X, dated
August 4, 1986, awarding salary differentials and emergency cost of living
allowances (ECOLAS) to employees of petitioner, and the Order denying petitioner's
motion for reconsideration dated May 13, 1987, on the ground of grave abuse of
discretion.
Petitioner is a semi-government hospital, managed by the Board of Directors of the
Cagayan de Oro Women's Club and Puericulture Center, headed by Mrs. Antera
Dorado, as holdover President. The hospital derives its finances from the club itself
as well as from paying patients, averaging 130 per month. It is also partly
subsidized by the Philippine Charity Sweepstakes Office and the Cagayan De Oro
City government.
Petitioner has forty-one (41) employees. Aside from salary and living allowances,
the employees are given food, but the amount spent therefor is deducted from their
respective salaries (pp. 77-78, Rollo).
On May 23, 1986, ten (10) employees of the petitioner employed in different
capacities/positions filed a complaint with the Office of the Regional Director of
Labor and Employment, Region X, for underpayment of their salaries and ECOLAS,
which was docketed as ROX Case No. CW-71-86.
On June 16, 1986, the Regional Director directed two of his Labor Standard and
Welfare Officers to inspect the records of the petitioner to ascertain the truth of the
allegations in the complaints (p. 98, Rollo). Payrolls covering the periods of May,
1974, January, 1985, November, 1985 and May, 1986, were duly submitted for
inspection.
On July 17, 1986, the Labor Standard and Welfare Officers submitted their report
confirming that there was underpayment of wages and ECOLAs of all the employees
by the petitioner, the dispositive portion of which reads:
IN VIEW OF THE FOREGOING, deficiency on wage and ecola as verified and
confirmed per review of the respondent payrolls and interviews with the
complainant workers and all other information gathered by the team, it is
respectfully recommended to the Honorable Regional Director, this office, that
Antera Dorado, President be ORDERED to pay the amount of SIX HUNDRED FIFTY
FOUR THOUSAND SEVEN HUNDRED FIFTY SIX & 01/100 (P654,756.01),
representing underpayment of wages and ecola to the THIRTY SIX (36) employees
of the said hospital as appearing in the attached Annex "F" worksheets and/or
whatever action equitable under the premises. (p. 99, Rollo)
Based on this inspection report and recommendation, the Regional Director issued
an Order dated August 4, 1986, directing the payment of P723,888.58,
representing underpayment of wages and ECOLAs to all the petitioner's employees,
the dispositive portion of which reads:
WHEREFORE, premises considered, respondent Maternity and Children Hospital is
hereby ordered to pay the above-listed complainants the total amount indicated
opposite each name, thru this Office within ten (10) days from receipt thereof.
Thenceforth, the respondent hospital is also ordered to pay its employees/workers
the prevailing statutory minimum wage and allowance.
SO ORDERED. (p. 34, Rollo)
Petitioner appealed from this Order to the Minister of Labor and Employment, Hon.
Augusto S. Sanchez, who rendered a Decision on September 24, 1986, modifying
the said Order in that deficiency wages and ECOLAs should be computed only from
May 23, 1983 to May 23, 1986, the dispositive portion of which reads:
WHEREFORE, the August 29, 1986 order is hereby MODIFIED in that the deficiency
wages and ECOLAs should only be computed from May 23, 1983 to May 23, 1986.
The case is remanded to the Regional Director, Region X, for recomputation
specifying the amounts due each the complainants under each of the applicable
Presidential Decrees. (p. 40, Rollo)
On October 24, 1986, the petitioner filed a motion for reconsideration which was
denied by the Secretary of Labor in his Order dated May 13, 1987, for lack of merit
(p. 43 Rollo).
The instant petition questions the all-embracing applicability of the award involving
salary differentials and ECOLAS, in that it covers not only the hospital employees
who signed the complaints, but also those (a) who are not signatories to the
complaint, and (b) those who were no longer in the service of the hospital at the
time the complaints were filed.
Petitioner likewise maintains that the Order of the respondent Regional Director of
Labor, as affirmed with modifications by respondent Secretary of Labor, does not
clearly and distinctly state the facts and the law on which the award was based. In
its "Rejoinder to Comment", petitioner further questions the authority of the
Regional Director to award salary differentials and ECOLAs to private respondents,
(relying on the case of Encarnacion vs. Baltazar, G.R. No. L-16883, March 27, 1961,
1 SCRA 860, as authority for raising the additional issue of lack of jurisdiction at
any stage of the proceedings, p. 52, Rollo), alleging that the original and exclusive
jurisdiction over money claims is properly lodged in the Labor Arbiter, based on
Article 217, paragraph 3 of the Labor Code.
The primary issue here is whether or not the Regional Director had jurisdiction over
the case and if so, the extent of coverage of any award that should be forthcoming,
arising from his visitorial and enforcement powers under Article 128 of the Labor
Code. The matter of whether or not the decision states clearly and distinctly
statement of facts as well as the law upon which it is based, becomes relevant after
the issue on jurisdiction has been resolved.
This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as
amended by E.O. No. 111. Labor standards refer to the minimum requirements
prescribed by existing laws, rules, and regulations relating to wages, hours of work,
cost of living allowance and other monetary and welfare benefits, including
occupational, safety, and health standards (Section 7, Rule I, Rules on the
Disposition of Labor Standards Cases in the Regional Office, dated September 16,
1987). 1 Under the present rules, a Regional Director exercises both visitorial and
enforcement power over labor standards cases, and is therefore empowered to
adjudicate money claims, provided there still exists an employer-employee
relationship, and the findings of the regional office is not contested by the employer
concerned.
Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional
Director's authority over money claims was unclear. The complaint in the present
case was filed on May 23, 1986 when E.O. No. 111 was not yet in effect, and the
prevailing view was that stated in the case of Antonio Ong, Sr. vs. Henry M. Parel,
et al., G.R. No. 76710, dated December 21, 1987, thus:
. . . the Regional Director, in the exercise of his visitorial and enforcement powers
under Article 128 of the Labor Code, has no authority to award money claims,
properly falling within the jurisdiction of the labor arbiter. . . .
. . . If the inspection results in a finding that the employer has violated certain labor
standard laws, then the regional director must order the necessary rectifications.
However, this does not include adjudication of money claims, clearly within the
ambit of the labor arbiter's authority under Article 217 of the Code.
The Ong case relied on the ruling laid down in Zambales Base Metals Inc. vs. The
Minister of Labor, et al., (G.R. Nos. 73184-88, November 26, 1986, 146 SCRA 50)
that the "Regional Director was not empowered to share in the original and
exclusive jurisdiction conferred on Labor Arbiters by Article 217."
We believe, however, that even in the absence of E. O. No. 111, Regional Directors
already had enforcement powers over money claims, effective under P.D. No. 850,
issued on December 16, 1975, which transferred labor standards cases from the
arbitration system to the enforcement system.
To clarify matters, it is necessary to enumerate a series of rules and provisions of
law on the disposition of labor standards cases.
Prior to the promulgation of PD 850, labor standards cases were an exclusive
function of labor arbiters, under Article 216 of the then Labor Code (PD No. 442, as
amended by PD 570-a), which read in part:
Art. 216. Jurisdiction of the Commission. The Commission shall have exclusive
appellate jurisdiction over all cases decided by the Labor Arbiters and compulsory
arbitrators.
The Labor Arbiters shall have exclusive jurisdiction to hear and decide the following
cases involving all workers whether agricultural or non-agricultural.
xxx
xxx
xxx
(c)
All money claims of workers, involving non-payment or underpayment of
wages, overtime compensation, separation pay, maternity leave and other money
claims arising from employee-employer relations, except claims for workmen's
compensation, social security and medicare benefits;
(d)
Violations of labor standard laws;
xxx
xxx
xxx
(Emphasis supplied)
The Regional Director exercised visitorial rights only under then Article 127 of the
Code as follows:
ART. 127.
Visitorial Powers. The Secretary of Labor or his duly authorized
representatives, including, but not restricted, to the labor inspectorate, shall have
access to employers' records and premises at any time of the day or night
whenever work is being undertaken therein, and the right to copy therefrom, to
question any employee and investigate any fact, condition or matter which may be
necessary to determine violations or in aid in the enforcement of this Title and of
any Wage Order or regulation issued pursuant to this Code.
With the promulgation of PD 850, Regional Directors were given enforcement
powers, in addition to visitorial powers. Article 127, as amended, provided in part:
SEC. 10.
Article 127 of the Code is hereby amended to read as follows:
Art. 127.
Visitorial and enforcement powers.
xxx
xxx
xxx
(b)
The Secretary of Labor or his duly authorized representatives shall have the
power to order and administer, after due notice and hearing, compliance with the
labor standards provisions of this Code based on the findings of labor regulation
officers or industrial safety engineers made in the course of inspection, and to issue
writs of execution to the appropriate authority for the enforcement of their order.
xxx
xxx
xxx
Labor Arbiters, on the other hand, lost jurisdiction over labor standards cases.
Article 216, as then amended by PD 850, provided in part:
SEC. 22.
Article 216 of the Code is hereby amended to read as follows:
Art. 216.
Jurisdiction of Labor Arbiters and the Commission. (a) The Labor
Arbiters shall have exclusive jurisdiction to hear and decide the following cases
involving all workers, whether agricultural or non-agricultural:
xxx
xxx
xxx
(3)
All money claims of workers involving non-payment or underpayment of
wages, overtime or premium compensation, maternity or service incentive leave,
separation pay and other money claims arising from employer-employee relations,
except claims for employee's compensation, social security and medicare benefits
and as otherwise provided in Article 127 of this Code.
xxx
xxx
xxx
(Emphasis supplied)
Under the then Labor Code therefore (PD 442 as amended by PD 570-a, as further
amended by PD 850), there were three adjudicatory units: The Regional Director,
the Bureau of Labor Relations and the Labor Arbiter. It became necessary to clarify
and consolidate all governing provisions on jurisdiction into one document. 2 On
April 23, 1976, MOLE Policy Instructions No. 6 was issued, and provides in part (on
labor standards cases) as follows:
POLICY INSTRUCTIONS NO. 6
TO: All Concerned
SUBJECT:
DISTRIBUTION OF JURISDICTION OVER LABOR CASES
xxx
xxx
xxx
1.
The following cases are under the exclusive original jurisdiction of the
Regional Director.
a)
Labor standards cases arising from violations of labor standard laws
discovered in the course of inspection or complaints where employer-employee
relations still exist;
xxx
xxx
xxx
2.
The following cases are under the exclusive original jurisdiction of the
Conciliation Section of the Regional Office:
a)
Labor standards cases where employer-employee relations no longer exist;
xxx
xxx
6.
The following cases are certifiable to the Labor Arbiters:
a)
Cases not settled by the Conciliation Section of the Regional Office, namely:
1)
labor standard cases where employer-employee relations no longer exist;
xxx
xxx
xxx
xxx
(Emphasis supplied)
MOLE Policy Instructions No. 7 (undated) was likewise subsequently issued,

enunciating the rationale for, and the scope of, the enforcement power of the
Regional Director, the first and second paragraphs of which provide as follows:
TO:
All Regional Directors
SUBJECT:
LABOR STANDARDS CASES
Under PD 850, labor standards cases have been taken from the arbitration system
and placed under the enforcement system, except where a) questions of law are
involved as determined by the Regional Director, b) the amount involved exceeds
P100,000.00 or over 40% of the equity of the employer, whichever is lower, c) the
case requires evidentiary matters not disclosed or verified in the normal course of
inspection, or d) there is no more employer-employee relationship.
The purpose is clear: to assure the worker the rights and benefits due to him under
labor standards laws without having to go through arbitration. The worker need not
litigate to get what legally belongs to him. The whole enforcement machinery of the
Department of Labor exists to insure its expeditious delivery to him free of charge.
(Emphasis supplied)
Under the foregoing, a complaining employee who was denied his rights and
benefits due him under labor standards law need not litigate. The Regional Director,
by virtue of his enforcement power, assured "expeditious delivery to him of his
rights and benefits free of charge", provided of course, he was still in the employ of
the firm.
After PD 850, Article 216 underwent a series of amendments (aside from being renumbered as Article 217) and with it a corresponding change in the jurisdiction of,
and supervision over, the Labor Arbiters:
1.
PD 1367 (5-1-78) gave Labor Arbiters exclusive jurisdiction over
unresolved issues in collective bargaining, etc., and those cases arising from
employer-employee relations duly indorsed by the Regional Directors. (It also
removed his jurisdiction over moral or other damages) In other words, the Labor
Arbiter entertained cases certified to him. (Article 228, 1978 Labor Code.)
2.
PD 1391 (5-29-78) all regional units of the National Labor Relations
Commission (NLRC) were integrated into the Regional Offices Proper of the Ministry
of Labor; effectively transferring direct administrative control and supervision over
the Arbitration Branch to the Director of the Regional Office of the Ministry of Labor.
"Conciliable cases" which were thus previously under the jurisdiction of the defunct
Conciliation Section of the Regional Office for purposes of conciliation or amicable
settlement, became immediately assignable to the Arbitration Branch for joint

conciliation and compulsory arbitration. In addition, the Labor Arbiter had
jurisdiction even over termination and labor-standards cases that may be assigned
to them for compulsory arbitration by the Director of the Regional Office. PD 1391
merged conciliation and compulsory arbitration functions in the person of the Labor
Arbiter. The procedure governing the disposition of cases at the Arbitration Branch
paralleled those in the Special Task Force and Field Services Division, with one
major exception: the Labor Arbiter exercised full and untrammelled authority in the
disposition of the case, particularly in the substantive aspect, his decisions and
order subject to review only on appeal to the NLRC. 3
3.
MOLE Policy Instructions No. 37 Because of the seemingly overlapping
functions as a result of PD 1391, MOLE Policy Instructions No. 37 was issued on
October 7, 1978, and provided in part:
TO:
All Concerned
SUBJECT:
ASSIGNMENT OF CASES TO LABOR ARBITERS
Pursuant to the provisions of Presidential Decree No. 1391 and to insure speedy
disposition of labor cases, the following guidelines are hereby established for the
information and guidance of all concerned.
1.
Conciliable Cases.
Cases which are conciliable per se i.e., (a) labor standards cases where employeremployee relationship no longer exists; (b) cases involving deadlock in collective
bargaining, except those falling under P.D. 823, as amended; (c) unfair labor
practice cases; and (d) overseas employment cases, except those involving
overseas seamen, shall be assigned by the Regional Director to the Labor Arbiter
for conciliation and arbitration without coursing them through the conciliation
section of the Regional Office.
2.
Labor Standards Cases.
Cases involving violation of labor standards laws where employer- employee

relationship still exists shall be assigned to the Labor Arbiters where:
a)
intricate questions of law are involved; or
b)
evidentiary matters not disclosed or verified in the normal course of
inspection by labor regulations officers are required for their proper disposition.
3.
Disposition of Cases.
When a case is assigned to a Labor Arbiter, all issues raised therein shall be
resolved by him including those which are originally cognizable by the Regional
Director to avoid multiplicity of proceedings. In other words, the whole case, and
not merely issues involved therein, shall be assigned to and resolved by him.
xxx
xxx
xxx
(Emphasis supplied)
4.
PD 1691(5-1-80) original and exclusive jurisdiction over unresolved issues
in collective bargaining and money claims, which includes moral or other damages.
Despite the original and exclusive jurisdiction of labor arbiters over money claims,
however, the Regional Director nonetheless retained his enforcement power, and
remained empowered to adjudicate uncontested money claims.
5.
BP 130 (8-21-8l) strengthened voluntary arbitration. The decree also
returned the Labor Arbiters as part of the NLRC, operating as Arbitration Branch
thereof.
6.
BP 227(6-1- 82) original and exclusive jurisdiction over questions involving
legality of strikes and lock-outs.
The present petition questions the authority of the Regional Director to issue the
Order, dated August 4, 1986, on the basis of his visitorial and enforcement powers
under Article 128 (formerly Article 127) of the present Labor Code. It is contended
that based on the rulings in the Ong vs. Parel (supra) and the Zambales Base
Metals, Inc. vs. The Minister of Labor (supra) cases, a Regional Director is
precluded from adjudicating money claims on the ground that this is an exclusive
function of the Labor Arbiter under Article 217 of the present Code.
On August 4, 1986, when the order was issued, Article 128(b) 4 read as follows:
(b)
The Minister of Labor or his duly authorized representatives shall have the
power to order and administer, after due notice and hearing, compliance with the
labor standards provisions of this Code based on the findings of labor regulation
officers or industrial safety engineers made in the course of inspection, and to issue
writs of execution to the appropriate authority for the enforcement of their order,
except in cases where the employer contests the findings of the labor regulations
officer and raises issues which cannot be resolved without considering evidentiary
matters that are not verifiable in the normal course of inspection. (Emphasis
supplied)
On the other hand, Article 217 of the Labor Code as amended by P.D. 1691,
effective May 1, 1980; Batas Pambansa Blg. 130, effective August 21, 1981; and
Batas Pambansa Blg. 227, effective June 1, 1982, inter alia, provides:
ART. 217.
Jurisdiction of Labor Arbiters and the Commission. (a) The Labor
Arbiters shall have the original and exclusive jurisdiction to hear and decide within
thirty (30) working days after submission of the case by the parties for decision,
the following cases involving all workers, whether agricultural or non-agricultural:
1.
Unfair labor practice cases;
2.
Those that workers may file involving wages, hours of work and other terms
and conditions of employment;
3.
All money claims of workers, including those based on non-payment or
underpayment of wages, overtime compensation, separation pay and other benefits
provided by law or appropriate agreement, except claims for employees'
compensation, social security, medicare and maternity benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code, including questions
involving the legality of strikes and lock-outs. (Emphasis supplied)
The Ong and Zambales cases involved workers who were still connected with the
company. However, in the Ong case, the employer disputed the adequacy of the
evidentiary foundation (employees' affidavits) of the findings of the labor standards
inspectors while in the Zambales case, the money claims which arose from alleged
violations of labor standards provisions were not discovered in the course of normal
inspection. Thus, the provisions of MOLE Policy Instructions Nos. 6, (Distribution of
Jurisdiction Over Labor Cases) and 37 (Assignment of Cases to Labor Arbiters)
giving Regional Directors adjudicatory powers over uncontested money claims
discovered in the course of normal inspection, provided an employer-employee
relationship still exists, are inapplicable.
In the present case, petitioner admitted the charge of underpayment of wages to
workers still in its employ; in fact, it pleaded for time to raise funds to satisfy its
obligation. There was thus no contest against the findings of the labor inspectors.
Barely less than a month after the promulgation on November 26, 1986 of the
Zambales Base Metals case, Executive Order No. 111 was issued on December 24,
1986, 5 amending Article 128(b) of the Labor Code, to read as follows:
(b)
THE PROVISIONS OF ARTICLE 217 OF THIS CODE TO THE CONTRARY
NOTWITHSTANDING AND IN CASES WHERE THE RELATIONSHIP OF EMPLOYER-
EMPLOYEE STILL EXISTS, the Minister of Labor and Employment or his duly
authorized representatives shall have the power to order and administer, after due
notice and hearing, compliance with the labor standards provisions of this Code
AND OTHER LABOR LEGISLATION based on the findings of labor regulation officers
or industrial safety engineers made in the course of inspection, and to issue writs of
execution to the appropriate authority for the enforcement of their orders, except in
cases where the employer contests the findings of the labor regulation officer and
raises issues which cannot be resolved without considering evidentiary matters that
are not verifiable in the normal course of inspection. (Emphasis supplied)
As seen from the foregoing, EO 111 authorizes a Regional Director to order
compliance by an employer with labor standards provisions of the Labor Code and
other legislation. It is Our considered opinion however, that the inclusion of the
phrase, " The provisions of Article 217 of this Code to the contrary notwithstanding
and in cases where the relationship of employer-employee still exists" ... in Article
128(b), as amended, above-cited, merely confirms/reiterates the enforcement
adjudication authority of the Regional Director over uncontested money claims in
cases where an employer-employee relationship still exists. 6
Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions
Nos. 6, 7 and 37, it is clear that it has always been the intention of our labor
authorities to provide our workers immediate access (when still feasible, as where
an employer-employee relationship still exists) to their rights and benefits, without
being inconvenienced by arbitration/litigation processes that prove to be not only
nerve-wracking, but financially burdensome in the long run.
Note further the second paragraph of Policy Instructions No. 7 indicating that the
transfer of labor standards cases from the arbitration system to the enforcement
system is
. . to assure the workers the rights and benefits due to him under labor standard
laws, without having to go through arbitration. . .
so that
. . the workers would not litigate to get what legally belongs to him. .. ensuring
delivery . . free of charge.
Social justice legislation, to be truly meaningful and rewarding to our workers, must
not be hampered in its application by long-winded arbitration and litigation. Rights
must be asserted and benefits received with the least inconvenience. Labor laws are
meant to promote, not defeat, social justice.
This view is in consonance with the present "Rules on the Disposition of Labor
Standard Cases in the Regional Offices " 7 issued by the Secretary of Labor,
Franklin M. Drilon on September 16, 1987.
Thus, Sections 2 and 3 of Rule II on "Money Claims Arising from Complaint Routine
Inspection", provide as follows:
Section 2. Complaint inspection. All such complaints shall immediately be
forwarded to the Regional Director who shall refer the case to the appropriate unit
in the Regional Office for assignment to a Labor Standards and Welfare Officer
(LSWO) for field inspection. When the field inspection does not produce the desired
results, the Regional Director shall summon the parties for summary investigation
to expedite the disposition of the case. . . .
Section 3. Complaints where no employer-employee relationship actually exists.
Where employer-employee relationship no longer exists by reason of the fact
that it has already been severed, claims for payment of monetary benefits fall
within the exclusive and original jurisdiction of the labor arbiters. . . . (Emphasis
supplied)
Likewise, it is also clear that the limitation embodied in MOLE Policy Instructions
No. 7 to amounts not exceeding P100,000.00 has been dispensed with, in view of
the following provisions of pars. (b) and (c), Section 7 on "Restitution", the same
Rules, thus:
xxx
xxx
xxx
(b)
Plant-level restitutions may be effected for money claims not exceeding Fifty
Thousand (P50,000.00). . . .
(c)
Restitutions in excess of the aforementioned amount shall be effected at the
Regional Office or at the worksite subject to the prior approval of the Regional
Director.
which indicate the intention to empower the Regional Director to award money
claims in excess of P100,000.00; provided of course the employer does not contest
the findings made, based on the provisions of Section 8 thereof:
Section 8. Compromise agreement. Should the parties arrive at an agreement
as to the whole or part of the dispute, said agreement shall be reduced in writing
and signed by the parties in the presence of the Regional Director or his duly
authorized representative.
E.O. No. 111 was issued on December 24, 1986 or three (3) months after the
promulgation of the Secretary of Labor's decision upholding private respondents'
salary differentials and ECOLAs on September 24, 1986. The amendment of the
visitorial and enforcement powers of the Regional Director (Article 128-b) by said
E.O. 111 reflects the intention enunciated in Policy Instructions Nos. 6 and 37 to
empower the Regional Directors to resolve uncontested money claims in cases
where an employer-employee relationship still exists. This intention must be given
weight and entitled to great respect. As held in Progressive Workers' Union, et. al.
vs. F.P. Aguas, et. al. G.R. No. 59711-12, May 29, 1985, 150 SCRA 429:
. . The interpretation by officers of laws which are entrusted to their administration
is entitled to great respect. We see no reason to detract from this rudimentary rule
in administrative law, particularly when later events have proved said interpretation
to be in accord with the legislative intent. ..
The proceedings before the Regional Director must, perforce, be upheld on the
basis of Article 128(b) as amended by E.O. No. 111, dated December 24, 1986, this
executive order "to be considered in the nature of a curative statute with
retrospective application." (Progressive Workers' Union, et al. vs. Hon. F.P. Aguas,
et al. (Supra); M. Garcia vs. Judge A. Martinez, et al., G.R. No. L- 47629, May 28,
1979, 90 SCRA 331).
We now come to the question of whether or not the Regional Director erred in
extending the award to all hospital employees. We answer in the affirmative.
The Regional Director correctly applied the award with respect to those employees
who signed the complaint, as well as those who did not sign the complaint, but
were still connected with the hospital at the time the complaint was filed (See
Order, p. 33 dated August 4, 1986 of the Regional Director, Pedrito de Susi, p. 33,
Rollo).
The justification for the award to this group of employees who were not signatories
to the complaint is that the visitorial and enforcement powers given to the
Secretary of Labor is relevant to, and exercisable over establishments, not over the
individual members/employees, because what is sought to be achieved by its
exercise is the observance of, and/or compliance by, such firm/establishment with
the labor standards regulations. Necessarily, in case of an award resulting from a
violation of labor legislation by such establishment, the entire members/employees
should benefit therefrom. As aptly stated by then Minister of Labor Augusto S.
Sanchez:
. . It would be highly derogatory to the rights of the workers, if after categorically
finding the respondent hospital guilty of underpayment of wages and ECOLAs, we
limit the award to only those who signed the complaint to the exclusion of the
majority of the workers who are similarly situated. Indeed, this would be not only
render the enforcement power of the Minister of Labor and Employment nugatory,
but would be the pinnacle of injustice considering that it would not only
discriminate but also deprive them of legislated benefits.
. . . (pp. 38-39, Rollo).
This view is further bolstered by the provisions of Sec. 6, Rule II of the "Rules on
the Disposition of Labor Standards cases in the Regional Offices" (supra) presently
enforced, viz:
SECTION 6. Coverage of complaint inspection. A complaint inspection shall not
be limited to the specific allegations or violations raised by the
complainants/workers but shall be a thorough inquiry into and verification of the
compliance by employer with existing labor standards and shall cover all workers
similarly situated. (Emphasis supplied)
However, there is no legal justification for the award in favor of those employees
who were no longer connected with the hospital at the time the complaint was filed,
having resigned therefrom in 1984, viz:
Jean (Joan) Venzon (See Order, p. 33, Rollo)
Rosario Paclijan
Adela Peralta
Mauricio Nagales
Consesa Bautista
Teresita Agcopra
Felix Monleon
Teresita Salvador
Edgar Cataluna; and
10.
Raymond Manija ( p.7, Rollo)
The enforcement power of the Regional Director cannot legally be upheld in cases of
separated employees. Article 129 of the Labor Code, cited by petitioner (p. 54,
Rollo) is not applicable as said article is in aid of the enforcement power of the
Regional Director; hence, not applicable where the employee seeking to be paid
underpayment of wages is already separated from the service. His claim is purely a
money claim that has to be the subject of arbitration proceedings and therefore
within the original and exclusive jurisdiction of the Labor Arbiter.
Petitioner has likewise questioned the order dated August 4, 1986 of the Regional
Director in that it does not clearly and distinctly state the facts and the law on
which the award is based.
We invite attention to the Minister of Labor's ruling thereon, as follows:
Finally, the respondent hospital assails the order under appeal as null and void
because it does not clearly and distinctly state the facts and the law on which the
awards were based. Contrary to the pretensions of the respondent hospital, we
have carefully reviewed the order on appeal and we found that the same contains a
brief statement of the (a) facts of the case; (b) issues involved; (c) applicable laws;
(d) conclusions and the reasons therefor; (e) specific remedy granted (amount
awarded). (p. 40, Rollo)
ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as
regards all persons still employed in the Hospital at the time of the filing of the
complaint, but GRANTED as regards those employees no longer employed at that
time.
SO ORDERED.
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
Cortes, Grio-Aquino and Regalado, JJ., concur.
Separate Opinions
SARMIENTO, J., concurring:
Subject to my opinion in G.R. Nos. 82805 and 83205.
MELENCIO-HERRERA, J., concurring:
I concur, with the observation that even as reconciled, it would seem inevitable to
state that the conclusion in the Zambales and Ong cases that, prior to Executive
Order No. 111, Regional Directors were not empowered to share the original and
exclusive jurisdiction conferred on Labor Arbiters over money claims, is now
deemed modified, if not superseded.
It may not be amiss to state either that under Section 2, Republic Act No. 6715,
which amends further the Labor Code of the Philippines (PD No. 442), Regional
Directors have also been granted adjudicative powers, albeit limited, over monetary
claims and benefits of workers, thereby settling any ambiguity on the matter. Thus:
SEC. 2.
Article 129 of the Labor Code of the Philippines, as amended, is hereby
further amended to read as follows:
Art. 129.
Recovery of wages, simple money claims and other benefits. Upon
complaint of any interested party, the Regional Director of the Department of Labor
and Employment or any of the duly authorized hearing officers of the Department is
empowered, through summary proceeding and after due notice, to hear and decide
any matter involving the recovery of wages and other monetary claims and
benefits, including legal interest, owing to an employee or person employed in
domestic or household service or househelper under this Code, arising from
employer-employee relations: Provided, That such complaint does not include a
claim for reinstatement: Provided, further, That the aggregate money claims of
each employee or househelper do not exceed five thousand pesos (P5,000.00). The
Regional Director or hearing officer shall decide or resolve the complaint within
thirty (30) calendar days from the date of the filing of the same. ...
Separate Opinions
SARMIENTO, J., concurring:
Subject to my opinion in G.R. Nos. 82805 and 83205.
MELENCIO-HERRERA, J., concurring:
I concur, with the observation that even as reconciled, it would seem inevitable to
state that the conclusion in the Zambales and Ong cases that, prior to Executive
Order No. 111, Regional Directors were not empowered to share the original and
exclusive jurisdiction conferred on Labor Arbiters over money claims, is now
deemed modified, if not superseded.
It may not be amiss to state either that under Section 2, Republic Act No. 6715,
which amends further the Labor Code of the Philippines (PD No. 442), Regional
Directors have also been granted adjudicative powers, albeit limited, over monetary
claims and benefits of workers, thereby settling any ambiguity on the matter. Thus:
SEC. 2.
Article 129 of the Labor Code of the Philippines, as amended, is hereby
further amended to read as follows:
Art. 129.
Recovery of wages, simple money claims and other benefits. Upon
complaint of any interested party, the Regional Director of the Department of Labor
and Employment or any of the duly authorized hearing officers of the Department is
empowered, through summary proceeding and after due notice, to hear and decide
any matter involving the recovery of wages and other monetary claims and
benefits, including legal interest, owing to an employee or person employed in

domestic or household service or househelper under this Code, arising from
employer-employee relations: Provided, That such complaint does not include a
claim for reinstatement: Provided, further, That the aggregate money claims of
each employee or househelper do not exceed five thousand pesos (P5,000.00). The
Regional Director or hearing officer shall decide or resolve the complaint within
thirty (30) calendar days from the date of the filing of the same. ...
G.R. No. 179652
May 8, 2009
PEOPLES BROADCASTING (BOMBO RADYO PHILS., INC.) vs TINGA, THE

SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE
REGIONAL DIRECTOR, DOLE REGION VII and JANDELEON JUEZAN
TINGA, J.:
The present controversy concerns a matter of first impression, requiring as it does
the determination of the demarcation line between the prerogative of the
Department of Labor and Employment (DOLE) Secretary and his duly authorized
representatives, on the one hand, and the jurisdiction of the National Labor
Relations Commission, on the other, under Article 128 (b) of the Labor Code in an
instance where the employer has challenged the jurisdiction of the DOLE at the very
first level on the ground that no employer-employee relationship ever existed
between the parties.
I. The instant petition for certiorari under Rule 65 assails the decision and the
resolution of the Court of Appeals dated 26 October 2006 and 26 June 2007,
respectively, in C.A. G.R. CEB-SP No. 00855.[1]
The petition traces its origins to a complaint filed by Jandeleon Juezan (respondent)
against Peoples Broadcasting Service, Inc. (Bombo Radyo Phils., Inc) (petitioner)
for illegal deduction, non-payment of service incentive leave, 13th month pay,
premium pay for holiday and rest day and illegal diminution of benefits, delayed
payment of wages and non-coverage of SSS, PAG-IBIG and Philhealth before the
Department of Labor and Employment (DOLE) Regional Office No. VII, Cebu City.[2]
On the basis of the complaint, the DOLE conducted a plant level inspection on 23
September 2003. In the Inspection Report Form,[3] the Labor Inspector wrote
under the heading Findings/Recommendations non-diminution of benefits and Note:
Respondent deny employer-employee relationship with the complainant- see Notice
of Inspection results. In the Notice of Inspection Results[4] also bearing the date 23
September 2003, the Labor Inspector made the following notations:
Management representative informed that complainant is a drama talent hired on a

per drama participation basis hence no employer-employeeship [sic] existed
between them. As proof of this, management presented photocopies of cash
vouchers, billing statement, employments of specific undertaking (a contract
between the talent director & the complainant), summary of billing of drama
production etc. They (mgt.) has [sic] not control of the talent if he ventures into
another contract w/ other broadcasting industries.
On the other hand, complainant Juezans alleged violation of non-diminution of
benefits is computed as follows:
@ P 2,000/15 days + 1.5 mos = P 6,000
(August 1/03 to Sept 15/03)
Note: Recommend for summary investigation or whatever action deem proper.[5]
Petitioner was required to rectify/restitute the violations within five (5) days from
receipt. No rectification was effected by petitioner; thus, summary investigations
were conducted, with the parties eventually ordered to submit their respective
position papers.
In his Order dated 27 February 2004,[7] DOLE Regional Director Atty. Rodolfo M.
Sabulao (Regional Director) ruled that respondent is an employee of petitioner, and
that the former is entitled to his money claims amounting to P203,726.30.
Petitioner sought reconsideration of the Order, claiming that the Regional Director
gave credence to the documents offered by respondent without examining the
originals, but at the same time he missed or failed to consider petitioners evidence.
Petitioners motion for reconsideration was denied.[8] On appeal to the DOLE
Secretary, petitioner denied once more the existence of employer-employee
relationship. In its Order dated 27 January 2005, the Acting DOLE Secretary
dismissed the appeal on the ground that petitioner did not post a cash or surety
bond and instead submitted a Deed of Assignment of Bank Deposit.[9]
Petitioner elevated the case to the Court of Appeals, claiming that it was denied due
process when the DOLE Secretary disregarded the evidence it presented and failed
to give it the opportunity to refute the claims of respondent. Petitioner maintained
that there is no employer-employee relationship had ever existed between it and
respondent because it was the drama directors and producers who paid, supervised
and disciplined respondent. It also added that the case was beyond the jurisdiction
of the DOLE and should have been considered by the labor arbiter because
respondents claim exceeded P5,000.00.
The Court of Appeals held that petitioner was not deprived of due process as the
essence thereof is only an opportunity to be heard, which petitioner had when it
filed a motion for reconsideration with the DOLE Secretary. It further ruled that the
latter had the power to order and enforce compliance with labor standard laws
irrespective of the amount of individual claims because the limitation imposed by
Article 29 of the Labor Code had been repealed by Republic Act No. 7730.[10]
Petitioner sought reconsideration of the decision but its motion was denied.[11]
Before this Court, petitioner argues that the National Labor Relations Commission
(NLRC), and not the DOLE Secretary, has jurisdiction over respondents claim, in
view of Articles 217 and 128 of the Labor Code.[12] It adds that the Court of
Appeals committed grave abuse of discretion when it dismissed petitioners appeal
without delving on the issues raised therein, particularly the claim that no
employer-employee relationship had ever existed between petitioner and
respondent. Finally, petitioner avers that there is no appeal, or any plain, speedy
and adequate remedy in the ordinary course of law available to it.
On the other hand, respondent posits that the Court of Appeals did not abuse its
discretion. He invokes Republic Act No. 7730, which removes the jurisdiction of the
Secretary of Labor and Employment or his duly authorized representatives, from
the effects of the restrictive provisions of Article 129 and 217 of the Labor Code,
regarding the confinement of jurisdiction based on the amount of claims.[13]
Respondent also claims that petitioner was not denied due process since even when
the case was with the Regional Director, a hearing was conducted and pieces of
evidence were presented. Respondent stands by the propriety of the Court of
Appeals ruling that there exists an employer-employee relationship between him
and petitioner. Finally, respondent argues that the instant petition for certiorari is a
wrong mode of appeal considering that petitioner had earlier filed a Petition for
Certiorari, Mandamus and Prohibition with the Court of Appeals; petitioner, instead,
should have filed a Petition for Review.[14]
II. The significance of this case may be reduced to one simple questiondoes the
Secretary of Labor have the power to determine the existence of an employeremployee relationship?
To resolve this pivotal issue, one must look into the extent of the visitorial and
enforcement power of the DOLE found in Article 128 (b) of the Labor Code, as
amended by Republic Act 7730. It reads:
Article 128 (b) Notwithstanding the provisions of Articles 129 and 217 of this Code
to the contrary, and in cases where the relationship of employer-employee still
exists, the Secretary of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance orders to give effect to
the labor standards provisions of this Code and other labor legislation based on the
findings of labor employment and enforcement officers or industrial safety
engineers made in the course of inspection. The Secretary or his duly authorized
representative shall issue writs of execution to the appropriate authority for the
enforcement of their orders, except in cases where the employer contests the
findings of the labor employment and enforcement officer and raises issues
supported by documentary proofs which were not considered in the course of
inspection. (emphasis supplied)
xxx
The provision is quite explicit that the visitorial and enforcement power of the DOLE
comes into play only in cases when the relationship of employer-employee still
exists. It also underscores the avowed objective underlying the grant of power to
the DOLE which is to give effect to the labor standard provision of this Code and
other labor legislation. Of course, a persons entitlement to labor standard benefits
under the labor laws presupposes the existence of employer-employee relationship
in the first place.
The clause in cases where the relationship of employer-employee still exists

signifies that the employer-employee relationship must have existed even before
the emergence of the controversy. Necessarily, the DOLEs power does not apply in
two instances, namely: (a) where the employer-employee relationship has ceased;
and (b) where no such relationship has ever existed.
The first situation is categorically covered by Sec. 3, Rule 11 of the Rules on the
Disposition of Labor Standards Cases[15] issued by the DOLE Secretary. It reads:
Rule II MONEY CLAIMS ARISING FROM COMPLAINT/ROUTINE INSPECTION
Sec. 3. Complaints where no employer-employee relationship actually exists. Where
employer-employee relationship no longer exists by reason of the fact that it has
already been severed, claims for payment of monetary benefits fall within the
exclusive and original jurisdiction of the labor arbiters. Accordingly, if on the face of
the complaint, it can be ascertained that employer-employee relationship no longer
exists, the case, whether accompanied by an allegation of illegal dismissal, shall
immediately be endorsed by the Regional Director to the appropriate branch of the
National Labor Relations Commission (NLRC).
In the recent case of Bay Haven, Inc. v. Abuan,[16] this Court recognized the first
situation and accordingly ruled that a complainants allegation of his illegal dismissal
had deprived the DOLE of jurisdiction as per Article 217 of the Labor Code.[17]
In the first situation, the claim has to be referred to the NLRC because it is the
NLRC which has jurisdiction in view of the termination of the employer-employee
relationship. The same procedure has to be followed in the second situation since it
is the NLRC that has jurisdiction in view of the absence of employer-employee
relationship between the evidentiary parties from the start.
Clearly the law accords a prerogative to the NLRC over the claim when the
employer-employee relationship has terminated or such relationship has not arisen
at all. The reason is obvious. In the second situation especially, the existence of an
employer-employee relationship is a matter which is not easily determinable from
an ordinary inspection, necessarily so, because the elements of such a relationship
are not verifiable from a mere ocular examination. The intricacies and implications
of an employer-employee relationship demand that the level of scrutiny should be
far above the cursory and the mechanical. While documents, particularly documents
found in the employers
office are the primary source materials, what may prove decisive are factors related
to the history of the employers business operations, its current state as well as
accepted contemporary practices in the industry. More often than not, the question
of employer-employee relationship becomes a battle of evidence, the determination
of which should be comprehensive and intensive and therefore best left to the
specialized quasi-judicial body that is the NLRC.
It can be assumed that the DOLE in the exercise of its visitorial and enforcement
power somehow has to make a determination of the existence of an employeremployee relationship. Such prerogatival determination, however, cannot be
coextensive with the visitorial and enforcement power itself. Indeed, such
determination is merely preliminary, incidental and collateral to the DOLEs primary
function of enforcing labor standards provisions. The determination of the existence
of employer-employee relationship is still primarily lodged with the NLRC. This is
the meaning of the clause in cases where the relationship of employer-employee
still exists in Art. 128 (b).
Thus, before the DOLE may exercise its powers under Article 128, two important
questions must be resolved: (1) Does the employer-employee relationship still
exist, or alternatively, was there ever an employer-employee relationship to speak
of; and (2) Are there violations of the Labor Code or of any labor law?
The existence of an employer-employee relationship is a statutory prerequisite to
and a limitation on the power of the Secretary of Labor, one which the legislative
branch is entitled to impose. The rationale underlying this limitation is to eliminate
the prospect of competing conclusions of the Secretary of Labor and the NLRC, on a
matter fraught with questions of fact and law, which is best resolved by the quasijudicial body, which is the NRLC, rather than an administrative official of the
executive branch of the government. If the Secretary of Labor proceeds to exercise
his visitorial and enforcement powers absent the first requisite, as the dissent
proposes, his office confers jurisdiction on itself which it cannot otherwise acquire.
The approach suggested by the dissent is frowned upon by common law. To wit:
[I]t is a general rule, that no court of limited jurisdiction can give itself jurisdiction
by a wrong decision on a point collateral to the merits of the case upon which the
limit to its jurisdiction depends; and however its decision may be final on all
particulars, making up together that subject matter which, if true, is within its
jurisdiction, and however necessary in many cases it may be for it to make a
preliminary inquiry, whether some collateral matter be or be not within the limits,
yet, upon this preliminary question, its decision must always be open to inquiry in
the superior court.[18]
A more liberal interpretative mode, pragmatic or functional analysis, has also
emerged in ascertaining the jurisdictional boundaries of administrative agencies
whose jurisdiction is established by statute. Under this approach, the Court
examines the intended function of the tribunal and decides whether a particular
provision falls within or outside that function, rather than making the provision itself
the determining centerpiece of the analysis.[19] Yet even under this more
expansive approach, the dissent fails.
A reading of Art. 128 of the Labor Code reveals that the Secretary of Labor or his
authorized representatives was granted visitorial and enforcement powers for the
purpose of determining violations of, and enforcing, the Labor Code and any labor
law, wage order, or rules and regulations issued pursuant thereto. Necessarily, the
actual existence of an employer-employee relationship affects the complexion of the
putative findings that the Secretary of Labor may determine, since employees are
entitled to a different set of rights under the Labor Code from the employer as
opposed to non-employees. Among these differentiated rights are those accorded
by the labor standards provisions of the Labor Code, which the Secretary of Labor is
mandated to enforce. If there is no employer-employee relationship in the first
place, the duty of the employer to adhere to those labor standards with respect to
the non-employees is questionable.
This decision should not be considered as placing an undue burden on the Secretary
of Labor in the exercise of visitorial and enforcement powers, nor seen as an
unprecedented diminution of the same, but rather a recognition of the statutory
limitations thereon. A mere assertion of absence of employer-employee relationship
does not deprive the DOLE of jurisdiction over the claim under Article 128 of the
Labor Code. At least a prima facie showing of such absence of relationship, as in
this case, is needed to preclude the DOLE from the exercise of its power. The
Secretary of Labor would not have been precluded from exercising the powers
under Article 128 (b) over petitioner if another person with better-grounded claim
of employment than that which respondent had. Respondent, especially if he were
an employee, could have very well enjoined other employees to complain with the
DOLE, and, at the same time, petitioner could ill-afford to disclaim an employment
relationship with all of the people under its aegis.
Without a doubt, petitioner, since the inception of this case had been consistent in
maintaining that respondent is not its employee. Certainly, a preliminary
determination, based on the evidence offered, and noted by the Labor Inspector
during the inspection as well as submitted during the proceedings before the
Regional Director puts in genuine doubt the existence of employer-employee
relationship. From that point on, the prudent recourse on the part of the DOLE
should have been to refer respondent to the NLRC for the proper dispensation of his
claims. Furthermore, as discussed earlier, even the evidence relied on by the
Regional Director in his order are mere self-serving declarations of respondent, and
hence cannot be relied upon as proof of employer-employee relationship.
III.Aside from lack of jurisdiction, there is another cogent reason to to set aside the
Regional Directors 27 February 2004 Order. A careful study of the case reveals that
the said Order, which found respondent as an employee of petitioner and directed
the payment of respondents money claims, is not supported by substantial
evidence, and was even made in disregard of the evidence on record.
It is not enough that the evidence be simply considered. The standard is substantial
evidence as in all other quasi-judicial agencies. The standard employed in the last
sentence of Article 128(b) of the Labor Code that the documentary proofs be
considered in the course of inspection does not apply. It applies only to issues other
than the fundamental issue of existence of employer-employee relationship. A
contrary rule would lead to controversies on the part of labor officials in resolving
the issue of employer-employee relationship. The onset of arbitrariness is the
advent of denial of substantive due process.
As a general rule, the Supreme Court is not a trier of facts. This applies with
greater force in cases before quasi-judicial agencies whose findings of fact are
accorded great respect and even finality. To be sure, the same findings should be
supported by substantial evidence from which the said tribunals can make its own
independent evaluation of the facts. Likewise, it must not be rendered with grave
abuse of discretion; otherwise, this Court will not uphold the tribunals conclusion.
[20] In the same manner, this Court will not hesitate to set aside the labor tribunals
findings of fact when it is clearly shown that they were arrived at arbitrarily or in
disregard of the evidence on record or when there is showing of fraud or error of
law.
At the onset, it is the Courts considered view that the existence of employeremployee relationship could have been easily resolved, or at least prima facie
determined by the labor inspector, during the inspection by looking at the records of
petitioner which can be found in the work premises. Nevertheless, even if the labor
inspector had noted petitioners manifestation and documents in the Notice of
Inspection Results, it is clear that he did not give much credence to said evidence,
as he did not find the need to investigate the matter further. Considering that the
documents shown by petitioner, namely: cash vouchers, checks and statements of
account, summary billings evidencing payment to the alleged real employer of
respondent, letter-contracts denominated as Employment for a Specific
Undertaking, prima facie negate the existence of employer-employee relationship,
the labor inspector could have exerted a bit more effort and looked into petitioners
payroll, for example, or its roll of employees, or interviewed other employees in the
premises. After all, the labor inspector, as a labor regulation officer is given access
to employers records and premises at any time of day or night whenever work is
being undertaken therein, and the right to copy therefrom, to question any
employee and investigate any fact, condition or matter which may be necessary to
determine violations or which may aid in the enforcement of this Code and of any
labor law, wage order or rules and regulations pursuant thereto.[22] Despite these
far-reaching powers of labor regulation officers, records reveal that no additional
efforts were exerted in the course of the inspection.
The Court further examined the records and discovered to its dismay that even the
Regional Director turned a blind eye to the evidence presented by petitioner and
relied instead on the self-serving claims of respondent.
In his position paper, respondent claimed that he was hired by petitioner in
September 1996 as a radio talent/spinner, working from 8:00 am until 5 p.m., six
days a week, on a gross rate of P60.00 per script, earning an average of
P15,0000.00 per month, payable on a semi-monthly basis. He added that the
payment of wages was delayed; that he was not given any service incentive leave
or its monetary commutation, or his 13th month pay; and that he was not made a
member of the Social Security System (SSS), Pag-Ibig and PhilHealth. By January
2001, the number of radio programs of which respondent was a talent/spinner was
reduced, resulting in the reduction of his monthly income from P15,000.00 to only
P4,000.00, an amount he could barely live on. Anent the claim of petitioner that no
employer-employee relationship ever existed, respondent argued that that he was
hired by petitioner, his wages were paid under the payroll of the latter, he was
under the control of petitioner and its agents, and it was petitioner who had the
power to dismiss him from his employment.[23] In support of his position paper,
respondent attached a photocopy of an identification card purportedly issued by
petitioner, bearing respondents picture and name with the designation Spinner; at
the back of the I.D., the following is written: This certifies that the card holder is a
duly Authorized MEDIA Representative of BOMBO RADYO PHILIPPINES THE NO.1
Radio Network in the Country ***BASTA RADYO BOMBO***[24] Respondent
likewise included a Certification which reads:
This is to certify that MR. JANDELEON JUEZAN is a program employee of PEOPLES
BROADCASTING SERVICES, INC. (DYMF- Bombo Radyo Cebu) since 1990 up to the
present.
Furtherly certifies that Mr. Juezan is receiving a monthly salary of FIFTEEN
THOUSAND (P15,000.00) PESOS.
This certification is issued upon the request of the above stated name to
substantiate loan requirement.
Given this 18th day of April 2000, Cebu City , Philippines.
(signed)
GREMAN B. SOLANTE
Station Manager
On the other hand, petitioner maintained in its position paper that respondent had
never been its employee. Attached as annexes to its position paper are photocopies
of cash vouchers it issued to drama producers, as well as letters of employment
captioned Employment for a Specific Undertaking, wherein respondent was
appointed by different drama directors as spinner/narrator for specific radio
programs.
In his Order, the Regional Director merely made a passing remark on petitioners
claim of lack of employer-employee relationshipa token paragraphand proceeded to
a detailed recitation of respondents allegations. The documents introduced by
petitioner in its position paper and even those presented during the inspection were
not given an iota of credibility. Instead, full recognition and acceptance was
accorded to the claims of respondentfrom the hours of work to his monthly salary,
to his alleged actual duties, as well as to his alleged evidence. In fact, the findings
are anchored almost verbatim on the self-serving allegations of respondent.
Furthermore, respondents pieces of evidencethe identification card and the
certification issued by petitioners Greman Solante are not even determinative of an
employer-employee relationship. The certification, issued upon the request of
respondent, specifically stated that MR. JANDELEON JUEZAN is a program employee
of PEOPLES BROADCASTING SERVICES, INC. (DYMF- Bombo Radyo Cebu), it is not
therefore crystal clear that complainant is a station employee rather than a
program employee hence entitled to all the benefits appurtenant thereto,[26] as

found by the DOLE Regional Director. Respondent should be bound by his own
evidence. Moreover, the classification as to whether one is a station employee and
program employee, as lifted from Policy Instruction No. 40,[27] dividing the
workers in the broadcast industry into only two groups is not binding on this Court,
especially when the classification has no basis either in law or in fact.[28]
Even the identification card purportedly issued by petitioner is not proof of
employer-employee relationship since it only identified respondent as an Authorized
Representative of Bombo Radyo, and not as an employee. The phrase gains
significance when compared vis a vis the following notation in the sample
identification cards presented by petitioner in its motion for reconsideration:
1.
This is to certify that the person whose picture and signature appear hereon
is an employee of Bombo Radio Philippines.
2.
This ID must be worn at all times within Bombo Radyo Philippines premises
for proper identification and security. Furthermore, this is the property of Bombo
Radyo Philippines and must be surrendered upon separation from the company.
HUMAN RESOURCE DEPARMENT
(Signed)
JENALIN D. PALER
HRD HEAD
Respondent tried to address the discrepancy between his identification card and the
standard identification cards issued by petitioner to its employees by arguing that
what he annexed to his position paper was the old identification card issued to him
by petitioner. He then presented a photocopy of another old identification card, this
time purportedly issued to one of the employees who was issued the new
identification card presented by petitioner.[29] Respondents argument does not
convince. If it were true that he is an employee of petitioner, he would have been
issued a new identification card similar to the ones presented by petitioner, and he
should have presented a copy of such new identification card. His failure to show a
new identification card merely demonstrates that what he has is only his Media ID,
which does not constitute proof of his employment with petitioner.
It has long been established that in administrative and quasi-judicial proceedings,
substantial evidence is sufficient as a basis for judgment on the existence of
employer-employee relationship. Substantial evidence, which is the quantum of
proof required in labor cases, is that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.[30] No particular
form of evidence is required to prove the existence of such employer-employee

relationship. Any competent and relevant evidence to prove the relationship may be
admitted. Hence, while no particular form of evidence is required, a finding that
such relationship exists must still rest on some substantial evidence. Moreover, the
substantiality of the evidence depends on its quantitative as well as its qualitative
aspects.
In the instant case, save for respondents self-serving allegations and self-defeating
evidence, there is no substantial basis to warrant the Regional Directors finding that
respondent is an employee of petitioner. Interestingly, the Order of the Secretary of
Labor denying petitioners appeal dated 27 January 2005, as well as the decision of
the Court of Appeals dismissing the petition for certiorari, are silent on the issue of
the existence of an employer-employee relationship, which further suggests that no
real and proper determination the existence of such relationship was ever made by
these tribunals. Even the dissent skirted away from the issue of the existence of
employer-employee relationship and conveniently ignored the dearth of evidence
presented by respondent.
Although substantial evidence is not a function of quantity but rather of quality, the
peculiar environmental circumstances of the instant case demand that something
more should have been proffered.[33] Had there been other proofs of employment,
such as respondents inclusion in petitioners payroll, or a clear exercise of control,
the Court would have affirmed the finding of employer-employee relationship. The
Regional Director, therefore, committed grievous error in ordering petitioner to
answer for respondents claims. Moreover, with the conclusion that no employeremployee relationship has ever existed between petitioner and respondent, it is
crystal-clear that the DOLE Regional Director had no jurisdiction over respondents
complaint. Thus, the improvident exercise of power by the Secretary of Labor and
the Regional Director behooves the court to subject their actions for review and to
invalidate all the subsequent orders they issued.
IV. The records show that petitioners appeal was denied because it had allegedly
failed to post a cash or surety bond. What it attached instead to its appeal was the
Letter Agreement[34] executed by petitioner and its bank, the cash voucher,[35]
and the Deed of Assignment of Bank Deposits.[36] According to the DOLE, these
documents do not constitute the cash or surety bond contemplated by law; thus, it
is as if no cash or surety bond was posted when it filed its appeal.
The Court does not agree.
The provision on appeals from the DOLE Regional Offices to the DOLE Secretary is
in the last paragraph of Art. 128 (b) of the Labor Code, which reads:
An order issued by the duly authorized representative of the Secretary of Labor and
Employment under this article may be appealed to the latter. In case said order
involves a monetary award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Secretary of Labor and Employment in the amount equivalent to
the monetary award in the order appealed from. (emphasis supplied)
While the requirements for perfecting an appeal must be strictly followed as they
are considered indispensable interdictions against needless delays and for orderly
discharge of judicial business, the law does admit exceptions when warranted by
the circumstances. Technicality should not be allowed to stand in the way of
equitably and completely resolving the rights and obligations of the parties.[37]
Thus, in some cases, the bond requirement on appeals involving monetary awards
had been relaxed, such as when (i) there was substantial compliance with the
Rules; (ii) the surrounding facts and circumstances constitute meritorious ground to
reduce the bond; (iii) a liberal interpretation of the requirement of an appeal bond
would serve the desired objective of resolving controversies on the merits; or (iv)
the appellants, at the very least exhibited their willingness and/or good faith by
posting a partial bond during the reglementary period.[38]
A review of the documents submitted by petitioner is called for to determine
whether they should have been admitted as or in lieu of the surety or cash bond to
sustain the appeal and serve the ends of substantial justice.
The Deed of Assignment reads:
DEED OF ASSIGNMENT OF BANK DEPOSIT
WITH SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, GREMAN B. SOLANTE in my capacity as Station Manager of DYMF Cebu City,
PEOPLES BROADCASTING SERVICES, INC., a corporation duly authorized and
existing under and by virtue of the laws of the Philippines, for and in consideration
of the sum of PESOS: TWO HUNDRED THREE THOUSAND SEVEN HUNDRED
TWENTY SIX PESOS & 30/100 ONLY (P203,726.30) Phil. Currency, as CASH BOND
GUARANTEE for the monetary award in favor to the Plaintiff in the Labor Case
docketed as LSED Case No. R0700-2003-09-CI-09, now pending appeal.
That Respondent-Appellant do hereby undertake to guarantee available and
sufficient funds covered by Platinum Savings Deposit (PSD) No. 010-8-00038-4 of
PEOPLES BROADCASTING SERVICES, INC. in the amount of PESOS: TWO
HUNDRED THREE THOUSAND SEVEN HUNDRED TWENTY SIX PESOS & 30/100
ONLY (P203,726.30) payable to Plaintiff-Appellee/Department of Labor and
Employment Regional Office VII at Queen City Development Bank, Cebu Branch,
Sanciangko St. Cebu City.
It is understood that the said bank has the full control of Platinum Savings Deposit
(PSD) No. 010-8-00038-4 from and after this date and that said sum cannot be
withdrawn by the Plaintiff-Appellee/ Department of Labor and Employment Regional
Office VII until such time that a Writ of Execution shall be ordered by the Appellate
Office.
FURTHER, this Deed of Assignment is limited to the principal amount of PESOS:
TWO HUNDRED THREE THOUSAND SEVEN HUNDRED TWENTY SIX PESOS & 30/100
ONLY (P203,726.30) Phil. Currency, therefore, any interest to be earned from the
said Deposit will be for the account holder.
IN WITNESS WHEREOF, I have hereunto affixed my signature this 18th day if June,
2004, in the City of Cebu, Philippines.
PEOPLES BROADCASTING SERVICES, INC.
By:
(Signed)
GREMAN B. SOLANTE
Station Manager
As priorly mentioned, the Deed
Agreement between Queen City
Platinum Savings Deposit (PSD)
issued by petitioner showing the
bank.
of Assignment was accompanied by a Letter

Development Bank and petitioner concerning
No. 010-8-00038-4,[39] and a Cash Voucher
amount of P203,726.30 deposited at the said
Casting aside the technical imprecision and inaptness of words that mark the three
documents, a liberal reading reveals the documents petitioner did assign, as cash
bond for the monetary award in favor of respondent in LSED Case NO. RO7002003-CI-09, the amount of P203,726.30 covered by petitioners PSD Account No.
010-8-00038-4 with the Queen City Development Bank at Sanciangko St. Cebu
City, with the depositary bank authorized to remit the amount to, and upon
withdrawal by respondent and or the Department of Labor and Employment
Regional Office VII, on the basis of the proper writ of execution. The Court finds
that the Deed of Assignment constitutes substantial compliance with the bond
requirement.
The purpose of an appeal bond is to ensure, during the period of appeal, against
any occurrence that would defeat or diminish recovery by the aggrieved employees
under the judgment if subsequently affirmed.[40] The Deed of Assignment in the

instant case, like a cash or surety bond, serves the same purpose. First, the Deed
of Assignment constitutes not just a partial amount, but rather the entire award in
the appealed Order. Second, it is clear from the Deed of Assignment that the entire
amount is under the full control of the bank, and not of petitioner, and is in fact
payable to the DOLE Regional Office, to be withdrawn by the same office after it
had issued a writ of execution. For all intents and purposes, the Deed of
Assignment in tandem with the Letter Agreement and Cash Voucher is as good as
cash. Third, the Court finds that the execution of the Deed of Assignment, the
Letter Agreement and the Cash Voucher were made in good faith, and constituted
clear manifestation of petitioners willingness to pay the judgment amount.
The Deed of Assignment must be distinguished from the type of bank certification
submitted by appellants in Cordova v. Keysas Boutique,[41] wherein this Court
found that such bank certification did not come close to the cash or surety bond
required by law. The bank certification in Cordova merely stated that the employer
maintains a depository account with a balance of P23,008.19, and that the
certification was issued upon the depositors request for whatever legal purposes it
may serve. There was no indication that the said deposit was made specifically for
the pending appeal, as in the instant case. Thus, the Court ruled that the bank
certification had not in any way ensured that the award would be paid should the
appeal fail. Neither was the appellee in the case prevented from making
withdrawals from the savings account. Finally, the amount deposited was measly
compared to the total monetary award in the judgment.
V. Another question of technicality was posed against the instant petition in the
hope that it would not be given due course. Respondent asserts that petitioner
pursued the wrong mode of appeal and thus the instant petition must be dismissed.
Once more, the Court is not convinced.
A petition for certiorari is the proper remedy when any tribunal, board or officer
exercising judicial or quasi-judicial functions has acted without or in excess of its
jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction and there is no appeal, nor any plain speedy, and adequate remedy at
law. There is grave abuse of discretion when respondent acts in a capricious or
whimsical manner in the exercise of its judgment as to be equivalent to lack of
jurisdiction.
Respondent may have a point in asserting that in this case a Rule 65 petition is a
wrong mode of appeal, as indeed the writ of certiorari is an extraordinary remedy,
and certiorari jurisdiction is not to be equated with appellate jurisdiction.
Nevertheless, it is settled, as a general proposition, that the availability of an
appeal does not foreclose recourse to the extraordinary remedies, such as certiorari
and prohibition, where appeal is not adequate or equally beneficial, speedy and
sufficient, as where the orders of the trial court were issued in excess of or without
jurisdiction, or there is need to promptly relieve the aggrieved party from the
injurious effects of the acts of an inferior court or tribunal, e.g., the court has
authorized execution of the judgment.[44] This Court has even recognized that a
recourse to certiorari is proper not only where there is a clear deprivation of
petitioners fundamental right to due process, but so also where other special
circumstances warrant immediate and more direct action.
In one case, it was held that the extraordinary writ of certiorari will lie if it is
satisfactorily established that the tribunal acted capriciously and whimsically in total
disregard of evidence material to or even decisive of the controversy,[46] and if it is
shown that the refusal to allow a Rule 65 petition would result in the infliction of an
injustice on a party by a judgment that evidently was rendered whimsically and
capriciously, ignoring and disregarding uncontroverted facts and familiar legal
principles without any valid cause whatsoever.
It must be remembered that a wide breadth of discretion is granted a court of
justice in certiorari proceedings. The Court has not too infrequently given due
course to a petition for certiorari, even when the proper remedy would have been
an appeal, where valid and compelling considerations would warrant such a
recourse. Moreover, the Court allowed a Rule 65 petition, despite the availability of
plain, speedy or adequate remedy, in view of the importance of the issues raised
therein. The rules were also relaxed by the Court after considering the public
interest involved in the case; when public welfare and the advancement of public
policy dictates; when the broader interest of justice so requires; when the writs
issued are null and void; or when the questioned order amounts to an oppressive
exercise of judicial authority.
The peculiar circumstances of this case warrant, as we held in Republic v. Court of
Appeals, 107 SCRA 504, 524, the exercise once more of our exclusive prerogative
to suspend our own rules or to exempt a particular case from its operation as in x x
Republic of the Philippines v. Court of Appeals, et al., (83 SCRA 453, 478-480
[1978]), thus: x x The Rules have been drafted with the primary objective of
enhancing fair trials and expediting justice. As a corollary, if their applications and
operation tend to subvert and defeat instead of promote and enhance it, their
suspension is justified.
The Regional Director fully relied on the self-serving allegations of respondent and
misinterpreted the documents presented as evidence by respondent. To make
matters worse, DOLE denied petitioners appeal based solely on petitioners alleged
failure to file a cash or surety bond, without any discussion on the merits of the
case. Since the petition for certiorari before the Court of Appeals sought the
reversal of the two aforesaid orders, the appellate court necessarily had to examine
the evidence anew to determine whether the conclusions of the DOLE were
supported by the evidence presented. It appears, however, that the Court of
Appeals did not even review the assailed orders and focused instead on a general
discussion of due process and the jurisdiction of the Regional Director. Had the
appellate court truly reviewed the records of the case, it would have seen that there
existed valid and sufficient grounds for finding grave abuse of discretion on the part
of the DOLE Secretary as well the Regional Director. In ruling and acting as it did,
the Court finds that the Court of Appeals may be properly subjected to its certiorari
jurisdiction. After all, this Court has previously ruled that the extraordinary writ of
certiorari will lie if it is satisfactorily established that the tribunal had acted
capriciously and whimsically in total disregard of evidence material to or even
decisive of the controversy.
The most important consideration for the allowance of the instant petition is the
opportunity for the Court not only to set the demarcation between the NLRCs
jurisdiction and the DOLEs prerogative but also the procedure when the case
involves the fundamental challenge on the DOLEs prerogative based on lack of
employer-employee relationship. As exhaustively discussed here, the DOLEs
prerogative hinges on the existence of employer-employee relationship, the issue is
which is at the very heart of this case. And the evidence clearly indicates private
respondent has never been petitioners employee. But the DOLE did not address,
while the Court of Appeals glossed over, the issue. The peremptory dismissal of the
instant petition on a technicality would deprive the Court of the opportunity to
resolve the novel controversy.
WHEREFORE, the petition is GRANTED. The Decision dated 26 October 2006 and
the Resolution dated 26 June 2007 of the Court of Appeals in C.A. G.R. CEB-SP No.
00855 are REVERSED and SET ASIDE. The Order of the then Acting Secretary of
the Department of Labor and Employment dated 27 January 2005 denying
petitioners appeal, and the Orders of the Director, DOLE Regional Office No. VII,
dated 24 May 2004 and 27 February 2004, respectively, are ANNULLED. The
complaint against petitioner is DISMISSED.
SO ORDERED.
G.R. No. 179652
March 6, 2012
PEOPLES BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.) vs. THE

SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE
REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN,
VELASCO, JR., J.:
In a Petition for Certiorari under Rule 65, petitioner Peoples Broadcasting Service,
Inc. (Bombo Radyo Phils., Inc.) questioned the Decision and Resolution of the Court
of Appeals (CA) dated October 26, 2006 and June 26, 2007, respectively, in C.A.
G.R. CEB-SP No. 00855.
Private respondent Jandeleon Juezan filed a complaint against petitioner with the
Department of Labor and Employment (DOLE) Regional Office No. VII, Cebu City,
for illegal deduction, nonpayment of service incentive leave, 13th month pay,
premium pay for holiday and rest day and illegal diminution of benefits, delayed
payment of wages and noncoverage of SSS, PAG-IBIG and Philhealth.[1] After the
conduct of summary investigations, and after the parties submitted their position
papers, the DOLE Regional Director found that private respondent was an employee
of petitioner, and was entitled to his money claims.[2] Petitioner sought
reconsideration of the Directors Order, but failed. The Acting DOLE Secretary
dismissed petitioners appeal on the ground that petitioner submitted a Deed of
Assignment of Bank Deposit instead of posting a cash or surety bond. When the
matter was brought before the CA, where petitioner claimed that it had been denied
due process, it was held that petitioner was accorded due process as it had been
given the opportunity to be heard, and that the DOLE Secretary had jurisdiction
over the matter, as the jurisdictional limitation imposed by Article 129 of the Labor
Code on the power of the DOLE Secretary under Art. 128(b) of the Code had been
repealed by Republic Act No. (RA) 7730.[3]
In the Decision of this Court, the CA Decision was reversed and set aside, and the
complaint against petitioner was dismissed. The dispositive portion of the Decision
reads as follows:
WHEREFORE, the petition is GRANTED. The Decision dated 26 October 2006 and
the Resolution dated 26 June 2007 of the Court of Appeals in C.A. G.R. CEB-SP No.
00855 are REVERSED and SET ASIDE. The Order of the then Acting Secretary of
the Department of Labor and Employment dated 27 January 2005 denying
petitioners appeal, and the Orders of the Director, DOLE Regional Office No. VII,
dated 24 May 2004 and 27 February 2004, respectively, are ANNULLED. The
complaint against petitioner is DISMISSED.[4]
The Court found that there was no employer-employee relationship between
petitioner and private respondent. It was held that while the DOLE may make a
determination of the existence of an employer-employee relationship, this function
could not be co-extensive with the visitorial and enforcement power provided in Art.
128(b) of the Labor Code, as amended by RA 7730. The National Labor Relations
Commission (NLRC) was held to be the primary agency in determining the
existence of an employer-employee relationship. This was the interpretation of the
Court of the clause in cases where the relationship of employer-employee still exists
in Art. 128(b).[5]
From this Decision, the Public Attorneys Office (PAO) filed a Motion for Clarification
of Decision (with Leave of Court). The PAO sought to clarify as to when the visitorial
and enforcement power of the DOLE be not considered as co-extensive with the
power to determine the existence of an employer-employee relationship.[6] In its
Comment,[7] the DOLE sought clarification as well, as to the extent of its visitorial
and enforcement power under the Labor Code, as amended.
The Court treated the Motion for Clarification as a second motion for
reconsideration, granting said motion and reinstating the petition.[8] It is apparent
that there is a need to delineate the jurisdiction of the DOLE Secretary vis--vis that
of the NLRC.
Under Art. 129 of the Labor Code, the power of the DOLE and its duly authorized
hearing officers to hear and decide any matter involving the recovery of wages and
other monetary claims and benefits was qualified by the proviso that the complaint
not include a claim for reinstatement, or that the aggregate money claims not
exceed PhP 5,000. RA 7730, or an Act Further Strengthening the Visitorial and
Enforcement Powers of the Secretary of Labor, did away with the PhP 5,000
limitation, allowing the DOLE Secretary to exercise its visitorial and enforcement
power for claims beyond PhP 5,000. The only qualification to this expanded power
of the DOLE was only that there still be an existing employer-employee relationship.
It is conceded that if there is no employer-employee relationship, whether it has
been terminated or it has not existed from the start, the DOLE has no jurisdiction.
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the first sentence
reads, Notwithstanding the provisions of Articles 129 and 217 of this Code to the
contrary, and in cases where the relationship of employer-employee still exists, the
Secretary of Labor and Employment or his duly authorized representatives shall
have the power to issue compliance orders to give effect to the labor standards
provisions of this Code and other labor legislation based on the findings of labor
employment and enforcement officers or industrial safety engineers made in the
course of inspection. It is clear and beyond debate that an employer-employee
relationship must exist for the exercise of the visitorial and enforcement power of
the DOLE. The question now arises, may the DOLE make a determination of
whether or not an employer-employee relationship exists, and if so, to what extent?
The first portion of the question must be answered in the affirmative.

The prior decision of this Court in the present case accepts such answer, but places
a limitation upon the power of the DOLE, that is, the determination of the existence
of an employer-employee relationship cannot be co-extensive with the visitorial and
enforcement power of the DOLE. But even in conceding the power of the DOLE to
determine the existence of an employer-employee relationship, the Court held that
the determination of the existence of an employer-employee relationship is still
primarily within the power of the NLRC, that any finding by the DOLE is merely
preliminary.
This conclusion must be revisited.
No limitation in the law was placed upon the power of the DOLE to determine the
existence of an employer-employee relationship. No procedure was laid down where
the DOLE would only make a preliminary finding, that the power was primarily held
by the NLRC. The law did not say that the DOLE would first seek the NLRCs
determination of the existence of an employer-employee relationship, or that should
the existence of the employer-employee relationship be disputed, the DOLE would
refer the matter to the NLRC. The DOLE must have the power to determine whether
or not an employer-employee relationship exists, and from there to decide whether
or not to issue compliance orders in accordance with Art. 128(b) of the Labor Code,
as amended by RA 7730.
The DOLE, in determining the existence of an employer-employee relationship, has
a ready set of guidelines to follow, the same guide the courts themselves use. The
elements to determine the existence of an employment relationship are: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the
power of dismissal; (4) the employers power to control the employees conduct.[9]
The use of this test is not solely limited to the NLRC. The DOLE Secretary, or his or
her representatives, can utilize the same test, even in the course of inspection,
making use of the same evidence that would have been presented before the NLRC.
The determination of the existence of an employer-employee relationship by the
DOLE must be respected. The expanded visitorial and enforcement power of the
DOLE granted by RA 7730 would be rendered nugatory if the alleged employer
could, by the simple expedient of disputing the employer-employee relationship,
force the referral of the matter to the NLRC. The Court issued the declaration that
at least a prima facie showing of the absence of an employer-employee relationship
be made to oust the DOLE of jurisdiction. But it is precisely the DOLE that will be
faced with that evidence, and it is the DOLE that will weigh it, to see if the same
does successfully refute the existence of an employer-employee relationship.
If the DOLE makes a finding that there is an existing employer-employee

relationship, it takes cognizance of the matter, to the exclusion of the NLRC. The
DOLE would have no jurisdiction only if the employer-employee relationship has
already been terminated, or it appears, upon review, that no employer-employee
relationship existed in the first place.
The Court, in limiting the power of the DOLE, gave the rationale that such limitation
would eliminate the prospect of competing conclusions between the DOLE and the
NLRC. The prospect of competing conclusions could just as well have been
eliminated by according respect to the DOLE findings, to the exclusion of the NLRC,
and this We believe is the more prudent course of action to take.
This is not to say that the determination by the DOLE is beyond question or review.
Suffice it to say, there are judicial remedies such as a petition for certiorari under
Rule 65 that may be availed of, should a party wish to dispute the findings of the
DOLE.
It must also be remembered that the power of the DOLE to determine the existence
of an employer-employee relationship need not necessarily result in an affirmative
finding. The DOLE may well make the determination that no employer-employee
relationship exists, thus divesting itself of jurisdiction over the case. It must not be
precluded from being able to reach its own conclusions, not by the parties, and
certainly not by this Court.
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully
empowered to make a determination as to the existence of an employer-employee
relationship in the exercise of its visitorial and enforcement power, subject to
judicial review, not review by the NLRC.
There is a view that despite Art. 128(b) of the Labor Code, as amended by RA
7730, there is still a threshold amount set by Arts. 129 and 217 of the Labor Code
when money claims are involved, i.e., that if it is for PhP 5,000 and below, the
jurisdiction is with the regional director of the DOLE, under Art. 129, and if the
amount involved exceeds PhP 5,000, the jurisdiction is with the labor arbiter, under
Art. 217. The view states that despite the wording of Art. 128(b), this would only
apply in the course of regular inspections undertaken by the DOLE, as differentiated
from cases under Arts. 129 and 217, which originate from complaints. There are
several cases, however, where the Court has ruled that Art. 128(b) has been
amended to expand the powers of the DOLE Secretary and his duly authorized
representatives by RA 7730. In these cases, the Court resolved that the DOLE had
the jurisdiction, despite the amount of the money claims involved. Furthermore, in
these cases, the inspection held by the DOLE regional director was prompted
specifically by a complaint. Therefore, the initiation of a case through a complaint
does not divest the DOLE Secretary or his duly authorized representative of
jurisdiction under Art. 128(b).
To recapitulate, if a complaint is brought before the DOLE to give effect to the labor
standards provisions of the Labor Code or other labor legislation, and there is a
finding by the DOLE that there is an existing employer-employee relationship, the
DOLE exercises jurisdiction to the exclusion of the NLRC. If the DOLE finds that
there is no employer-employee relationship, the jurisdiction is properly with the
NLRC. If a complaint is filed with the DOLE, and it is accompanied by a claim for
reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3)
of the Labor Code, which provides that the Labor Arbiter has original and exclusive
jurisdiction over those cases involving wages, rates of pay, hours of work, and other
terms and conditions of employment, if accompanied by a claim for reinstatement.
If a complaint is filed with the NLRC, and there is still an existing employeremployee relationship, the jurisdiction is properly with the DOLE. The findings of
the DOLE, however, may still be questioned through a petition for certiorari under
Rule 65 of the Rules of Court.
In the present case, the finding of the DOLE Regional Director that there was an
employer-employee relationship has been subjected to review by this Court, with
the finding being that there was no employer-employee relationship between
petitioner and private respondent, based on the evidence presented. Private
respondent presented self-serving allegations as well as self-defeating evidence.
[10] The findings of the Regional Director were not based on substantial evidence,
and private respondent failed to prove the existence of an employer-employee
relationship. The DOLE had no jurisdiction over the case, as there was no employeremployee relationship present. Thus, the dismissal of the complaint against
petitioner is proper.
WHEREFORE, the Decision of this Court in G.R. No. 179652 is hereby AFFIRMED,
with the MODIFICATION that in the exercise of the DOLEs visitorial and
enforcement power, the Labor Secretary or the latters authorized representative
shall have the power to determine the existence of an employer-employee
relationship, to the exclusion of the NLRC.
SO ORDERED.
[G.R. No. 124382. August 16, 1999]
PASTOR DIONISIO V. AUSTRIA, petitioner, vs. HON. NATIONAL LABOR

RELATIONS COMMISSION (Fourth Division), CEBU CITY, CENTRAL
PHILIPPINE UNION MISSION CORPORATION OF THE SEVENTH-DAY

ADVENTIST, ELDER HECTOR V. GAYARES, PASTORS REUBEN MORALDE,
OSCAR L. ALOLOR, WILLIAM U. DONATO, JOEL WALES, ELY SACAY, GIDEON
BUHAT, ISACHAR GARSULA, ELISEO DOBLE, PROFIRIO BALACY, DAVID
RODRIGO, LORETO MAYPA, MR. RUFO GASAPO, MR. EUFRONIO IBESATE,
MRS. TESSIE BALACY, MR. ZOSIMO KARA-AN, and MR. ELEUTERIO
LOBITANA, respondents.
KAPUNAN, J.:
Subject to the instant petition for certiorari under Rule 65 of the Rules of Court is
the Resolution[1] of public respondent National Labor Relations Commission (the
NLRC), rendered on 23 January 1996, in NLRC Case No. V-0120-93, entitled Pastor
Dionisio V. Austria vs. Central Philippine Union Mission Corporation of Seventh Day
Adventists, et. al., which dismissed the case for illegal dismissal filed by the
petitioner against private respondents for lack of jurisdiction.
Private Respondent Central Philippine Union Mission Corporation of the Seventh-Day
Adventists (hereinafter referred to as the SDA) is a religious corporation duly
organized and existing under Philippine law and is represented in this case by the
other private respondents, officers of the SDA. Petitioner, on the other hand, was a
Pastor of the SDA until 31 October 1991, when his services were terminated.
The records show that petitioner Pastor Dionisio V. Austria worked with the SDA for
twenty eight (28) years from 1963 to 1991.[2] He began his work with the SDA on
15 July 1963 as a literature evangelist, selling literature of the SDA over the island
of Negros. From then on, petitioner worked his way up the ladder and got promoted
several times. In January, 1968, petitioner became the Assistant Publishing Director
in the West Visayan Mission of the SDA. In July, 1972, he was elevated to the
position of Pastor in the West Visayan Mission covering the island of Panay, and the
provinces of Romblon and Guimaras. Petitioner held the same position up to 1988.
Finally, in 1989, petitioner was promoted as District Pastor of the Negros Mission of
the SDA and was assigned at Sagay, Balintawak and Toboso, Negros Occidental,
with twelve (12) churches under his jurisdiction. In January, 1991, petitioner was
transferred to Bacolod City. He held the position of district pastor until his services
were terminated on 31 October 1991.
On various occasions from August up to October, 1991, petitioner received several
communications[3] from Mr. Eufronio Ibesate, the treasurer of the Negros Mission
asking him to admit accountability and responsibility for the church tithes and
offerings collected by his wife, Mrs. Thelma Austria, in his district which amounted
to P15,078.10, and to remit the same to the Negros Mission.
In his written explanation dated 11 October 1991,[4] petitioner reasoned out that
he should not be made accountable for the unremitted collections since it was
private respondents Pastor Gideon Buhat and Mr. Eufronio Ibesate who authorized
his wife to collect the tithes and offerings since he was very sick to do the collecting
at that time.
Thereafter, on 16 October 1991, at around 7:30 a.m., petitioner went to the office
of Pastor Buhat, the president of the Negros Mission. During said call, petitioner
tried to persuade Pastor Buhat to convene the Executive Committee for the purpose
of settling the dispute between him and the private respondent, Pastor David
Rodrigo. The dispute between Pastor Rodrigo and petitioner arose from an incident
in which petitioner assisted his friend, Danny Diamada, to collect from Pastor
Rodrigo the unpaid balance for the repair of the latters motor vehicle which he
failed to pay to Diamada.[5] Due to the assistance of petitioner in collecting Pastor
Rodrigos debt, the latter harbored ill-feelings against petitioner. When news
reached petitioner that Pastor Rodrigo was about to file a complaint against him
with the Negros Mission, he immediately proceeded to the office of Pastor Buhat on
the date abovementioned and asked the latter to convene the Executive
Committee. Pastor Buhat denied the request of petitioner since some committee
members were out of town and there was no quorum. Thereafter, the two
exchanged heated arguments. Petitioner then left the office of Pastor Buhat. While
on his way out, petitioner overheard Pastor Buhat saying, Pastor daw inisog na ina
iya (Pastor you are talking tough).[6] Irked by such remark, petitioner returned to
the office of Pastor Buhat, and tried to overturn the latters table, though
unsuccessfully, since it was heavy. Thereafter, petitioner banged the attache case of
Pastor Buhat on the table, scattered the books in his office, and threw the phone.
[7] Fortunately, private respondents Pastors Yonilo Leopoldo and Claudio Montao
were around and they pacified both Pastor Buhat and petitioner.
On 17 October 1991, petitioner received a letter[8] inviting him and his wife to
attend the Executive Committee meeting at the Negros Mission Conference Room
on 21 October 1991, at nine in the morning. To be discussed in the meeting were
the non-remittance of church collection and the events that transpired on 16
October 1991. A fact-finding committee was created to investigate petitioner. For
two (2) days, from October 21 and 22, the fact-finding committee conducted an
investigation of petitioner. Sensing that the result of the investigation might be onesided, petitioner immediately wrote Pastor Rueben Moralde, president of the SDA
and chairman of the fact-finding committee, requesting that certain members of the
fact-finding committee be excluded in the investigation and resolution of the case.
[9] Out of the six (6) members requested to inhibit themselves from the
investigation and decision-making, only two (2) were actually excluded, namely:
Pastor Buhat and Pastor Rodrigo. Subsequently, on 29 October 1991, petitioner
received a letter of dismissal[10] citing misappropriation of denominational funds,

willful breach of trust, serious misconduct, gross and habitual neglect of duties, and
commission of an offense against the person of employers duly authorized
representative, as grounds for the termination of his services.
Reacting against the adverse decision of the SDA, petitioner filed a complaint[11]
on 14 November 1991, before the Labor Arbiter for illegal dismissal against the SDA
and its officers and prayed for reinstatement with backwages and benefits, moral
and exemplary damages and other labor law benefits.
On 15 February 1993, Labor Arbiter Cesar D. Sideo rendered a decision in favor of
petitioner, the dispositive portion of which reads thus:
WHEREFORE, PREMISES CONSIDERED, respondents CENTRAL PHILIPPINE UNION
MISSION CORPORATION OF THE SEVENTH-DAY ADVENTISTS (CPUMCSDA) and its
officers, respondents herein, are hereby ordered to immediately reinstate
complainant Pastor Dionisio Austria to his former position as Pastor of Brgy.
Taculing, Progreso and Banago, Bacolod City, without loss of seniority and other
rights and backwages in the amount of ONE HUNDRED FIFTEEN THOUSAND EIGHT
HUNDRED THIRTY PESOS (P115,830.00) without deductions and qualificatioons.
Respondent CPUMCSDA is further ordered to pay complainant the following:
A. 13th month pay - P21,060.00
B. Allowance - P 4,770.83
C. Service Incentive
Leave Pay - P 3,461.85
D. Moral Damages - P50,000.00
E. Exemplary
Damages - P25,000.00
F. Attorneys Fee - P22,012.27
SO ORDERED.[12]
The SDA, through its officers, appealed the decision of the Labor Arbiter to the
National Labor Relations Commission, Fourth Division, Cebu City. In a decision,
dated 26 August 1994, the NLRC vacated the findings of the Labor Arbiter. The
decretal portion of the NLRC decision states:
WHEREFORE, the Decision appealed from is hereby VACATED and a new one
ENTERED dismissing this case for want of merit.
SO ORDERED.[13]
Petitioner filed a motion for reconsideration of the above-named decision. On 18
July 1995, the NLRC issued a Resolution reversing its original decision. The
dispositive portion of the resolution reads:
WHEREFORE, premises considered, Our decision dated August 26, 1994 is VACATED
and the decision of the Labor Arbiter dated February 15, 1993 is REINSTATED.
SO ORDERED.[14]
In view of the reversal of the original decision of the NLRC, the SDA filed a motion
for reconsideration of the above resolution. Notable in the motion for
reconsideration filed by private respondents is their invocation, for the first time on
appeal, that the Labor Arbiter has no jurisdiction over the complaint filed by
petitioner due to the constitutional provision on the separation of church and state
since the case allegedly involved and ecclesiastical affair to which the State cannot
interfere.
The NLRC, without ruling on the merits of the case, reversed itself once again,
sustained the argument posed by private respondents and, accordingly, dismissed
the complaint of petitioner. The dispositive portion of the NLRC resolution dated 23
January 1996, subject of the present petition, is as follows:
WHEREFORE, in view of all the foregoing, the instant motion for reconsideration is
hereby granted. Accordingly, this case is hereby DISMISSED for lack of jurisdiction.
SO ORDERED.[15]
Hence, the recourse to this Court by petitioner.
After the filing of the petition, the Court ordered the Office of the Solicitor General
(the OSG) to file its comment on behalf of public respondent NLRC. Interestingly,
the OSG filed a manifestation and motion in lieu of comment[16] setting forth its
stand that it cannot sustain the resolution of the NLRC. In its manifestation, the
OSG submits that the termination of petitioner of his employment may be
questioned before the NLRC as the same is secular in nature, not ecclesiastical.
After the submission of memoranda of all the parties, the case was submitted for
decision.
The issues to be resolved in this petition are:
1) Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide the
complaint filed by petitioner against the SDA;
2) Whether or not the termination of the services of petitioner is an ecclesiastical
affair, and, as such, involves the separation of church and state; and
3) Whether or not such termination is valid.
The first two issues shall be resolved jointly, since they are related.
Private respondents contend that by virtue of the doctrine of separation of church
and state, the Labor Arbiter and the NLRC have no jurisdiction to entertain the
complaint filed by petitioner. Since the matter at bar allegedly involves the
discipline of a religious minister, it is to be considered a purely ecclesiastical affair
to which the State has no right to interfere.
The contention of private respondents deserves scant consideration. The principle of
separation of church and state finds no application in this case.
The rationale of the principle of the separation of church and state is summed up in
the familiar saying, Strong fences make good neighbors.[17] The idea advocated by
this principle is to delineate the boundaries between the two institutions and thus
avoid encroachments by one against the other because of a misunderstanding of
the limits of their respective exclusive jurisdictions.[18] The demarcation line calls
on the entities to render therefore unto Ceasar the things that are Ceasars and unto
God the things that are Gods.[19] While the State is prohibited from interfering in
purely ecclesiastical affairs, the Church is likewise barred from meddling in purely
secular matters.[20]
The case at bar does not concern an ecclesiastical or purely religious affair as to bar
the State from taking cognizance of the same. An ecclesiastical affair is one that
concerns doctrine, creed, or form or worship of the church, or the adoption and
enforcement within a religious association of needful laws and regulations for the
government of the membership, and the power of excluding from such associations
those deemed unworthy of membership.[21] Based on this definition, an
ecclesiastical affair involves the relationship between the church and its members
and relate to matters of faith, religious doctrines, worship and governance of the
congregation. To be concrete, examples of this so-called ecclesiastical affairs to
which the State cannot meddle are proceedings for excommunication, ordinations of
religious ministers, administration of sacraments and other activities with which
attached religious significance. The case at bar does not even remotely concern any
of the abovecited examples. While the matter at hand relates to the church and its
religious minister it does not ipso facto give the case a religious significance. Simply
stated, what is involved here is the relationship of the church as an employer and
the minister as an employee. It is purely secular and has no relation whatsoever

with the practice of faith, worship or doctrines of the church. In this case, petitioner
was not excommunicated or expelled from the membership of the SDA but was
terminated from employment. Indeed, the matter of terminating an employee,
which is purely secular in nature, is different from the ecclesiastical act of expelling
a member from the religious congregation.
As pointed out by the OSG in its memorandum, the grounds invoked for petitioners
dismissal, namely: misappropriation of denominational funds, willful breach of trust,
serious misconduct, gross and habitual neglect of duties and commission of an
offense against the person of his employers duly authorize representative, are all
based on Article 282 of the Labor Code which enumerates the just causes for
termination of employment.[22] By this alone, it is palpable that the reason for
petitioners dismissal from the service is not religious in nature. Coupled with this is
the act of the SDA in furnishing NLRC with a copy of petitioners letter of
termination. As aptly stated by the OSG, this again is an eloquent admission by
private respondents that NLRC has jurisdiction over the case. Aside from these,
SDA admitted in a certification[23] issued by its officer, Mr. Ibesate, that petitioner
has been its employee for twenty-eight (28) years. SDA even registered petitioner
with the Social Security System (SSS) as its employee. As a matter of fact, the
workers records of petitioner have been submitted by private respondents as part
of their exhibits. From all of these it is clear that when the SDA terminated the
services of petitioner, it was merely exercising its management prerogative to fire
an employee which it believes to be unfit for the job. As such, the State, through
the Labor Arbiter and the NLRC, has the right to take cognizance of the case and to
determine whether the SDA, as employer, rightfully exercised its management
prerogative to dismiss an employee. This is in consonance with the mandate of the
Constitution to afford full protection to labor.
Under the Labor Code, the provision which governs the dismissal of employees, is
comprehensive enough to include religious corporations, such as the SDA, in its
coverage. Article 278 of the Labor Code on post-employment states that the
provisions of this Title shall apply to all establishments or undertakings, whether for
profit or not. Obviously, the cited article does not make any exception in favor of a
religious corporation. This is made more evident by the fact that the Rules
Implementing the Labor Code, particularly, Section 1, Rule 1, Book VI on the
Termination of Employment and Retirement, categorically includes religious
institutions in the coverage of the law, to wit:
Section 1. Coverage. This Rule shall apply to all establishments and undertakings,
whether operated for profit or not, including educational, medical, charitable and
religious institutions and organizations, in cases of regular employment with the
exception of the Government and its political subdivisions including governmentowned or controlled corporations.[24]
With this clear mandate, the SDA cannot hide behind the mantle of protection of
the doctrine of separation of church and state to avoid its responsibilities as an
employer under the Labor Code.
Finally, as correctly pointed out by petitioner, private respondents are estopped
from raising the issue of lack of jurisdiction for the first time on appeal. It is already
too late in the day for private respondents to question the jurisdiction of the NLRC
and the Labor Arbiter since the SDA had fully participated in the trials and hearings
of the case from start to finish. The Court has already ruled that the active
participation of a party against whom the action was brought, coupled with his
failure to object to the jurisdiction of the court or quasi-judicial body where the
action is pending, is tantamount to an invocation of that jurisdiction and a
willingness to abide by the resolution of the case and will bar said party from later
on impugning the court or bodys jurisdiction.[25] Thus, the active participation of
private respondents in the proceedings before the Labor Arbiter and the NLRC
mooted the question on jurisdiction.
The jurisdictional question now settled, we shall now proceed to determine whether
the dismissal of petitioner was valid.
At the outset, we note that as a general rule, findings of fact of administrative
bodies like the NLRC are binding upon this Court. A review of such findings is
justified, however, in instances when the findings of the NLRC differ from those of
the labor arbiter, as in this case.[26] When the findings of NLRC do not agree with
those of the Labor Arbiter, this Court must of necessity review the records to
determine which findings should be preferred as more comformable to the
evidentiary facts.[27]
We turn now to the crux of the matter. In termination cases, the settled rule is that
the burden of proving that the termination was for a valid or authorized cause rests
on the employer.[28] Thus, private respondents must not merely rely on the
weaknesses of petitioners evidence but must stand on the merits of their own
defense.
The issue being the legality of petitioners dismissal, the same must be measured
against the requisites for a valid dismissal, namely: (a) the employee must be
afforded due process, i.e., he must be given an opportunity to be heard and to
defend himself, and; (b) the dismissal must be for a valid cause as provided in
Article 282 of the Labor Code.[29] Without the concurrence of this twin
requirements, the termination would, in the eyes of the law, be illegal.[30]
Before the services of an employee can be validly terminated, Article 277 (b) of the
Labor Code and Section 2, Rule XXIII, Book V of the Rules Implementing the Labor
Code further require the employer to furnish the employee with two (2) written
notices, to wit: (a) a written notice served on the employee specifying the ground
or grounds for termination, and giving to said employee reasonable opportunity
within which to explain his side; and, (b) a written notice of termination served on
the employee indicating that upon due consideration of all the circumstances,
grounds have been established to justify his termination.
The first notice, which may be considered as the proper charge, serves to apprise
the employee of the particular acts or omissions for which his dismissal is sought.
[31] The second notice on the other hand seeks to inform the employee of the
employers decision to dismiss him.[32] This decision, however, must come only
after the employee is given a reasonable period from receipt of the first notice
within which to answer the charge and ample opportunity to be heard and defend
himself with the assistance of a representative, if he so desires.[33] This is in
consonance with the express provision of the law on the protection to labor and the
broader dictates of procedural due process.[34] Non-compliance therewith is fatal
because these requirements are conditions sine quo non before dismissal may be
validly effected.[35]
Private respondent failed to substantially comply with the above requirements. With
regard to the first notice, the letter,[36] dated 17 October 1991, which notified
petitioner and his wife to attend the meeting on 21 October 1991, cannot be
construed as the written charge required by law. A perusal of the said letter reveals
that it never categorically stated the particular acts or omissions on which
petitioners impending termination was grounded. In fact, the letter never even
mentioned that petitioner would be subject to investigation. The letter merely
mentioned that petitioner and his wife were invited to a meeting wherein what
would be discussed were the alleged unremitted church tithes and the events that
transpired on 16 October 1991. Thus, petitioner was surprised to find out that the
alleged meeting turned out to be an investigation. From the tenor of the letter, it
cannot be presumed that petitioner was actually on the verge of dismissal. The
alleged grounds for the dismissal of petitioner from the service were only revealed
to him when the actual letter of dismissal was finally issued. For this reason, it
cannot be said that petitioner was given enough opportunity to properly prepare for
his defense. While admittedly, private respondents complied with the second
requirement, the notice of termination, this does not cure the initial defect of lack of
the proper written charge required by law.
In the letter of termination,[37] dated 29 October 1991, private respondents
enumerated the following as grounds for the dismissal of petitioner, namely:
misappropriation of denominational funds, willful breach of trust, serious
misconduct, gross and habitual neglect of duties, and commission of an offense

against the person of employers duly authorized representative. Breach of trust and
misappropriation of denominational funds refer to the alleged failure of petitioner to
remit to the treasurer of the Negros Mission tithes, collections and offerings
amounting to P15,078.10 which were collected by his wife, Mrs. Thelma Austria, in
the churches under his jurisdiction. On the other hand, serious misconduct and
commission of an offense against the person of the employers duly authorized
representative pertain to the 16 October 1991 incident wherein petitioner allegedly
committed an act of violence in the office of Pastor Gideon Buhat. The final ground
invoked by private respondents is gross and habitual neglect of duties allegedly
committed by petitioner.
We cannot sustain the validity of dismissal based on the ground of breach of trust.
Private respondents allege that they have lost their confidence in petitioner for his
failure, despite demands, to remit the tithes and offerings amounting to
P15,078.10, which were collected in his district. A careful study of the voluminous
records of the case reveals that there is simply no basis for the alleged loss of
confidence and breach of trust. Settled is the rule that under Article 282 (c) of the
Labor Code, the breach of trust must be willful. A breach is willful if it is done
intentionally, knowingly and purposely, without justifiable excuse, as distinguished
from an act done carelessly, thoughtlessly, heedlessly or inadvertently.[38] It must
rest on substantial grounds and not on the employers arbitrariness, whims, caprices
or suspicion; otherwise, the employee would eternally remain at the mercy of the
employer.[39] It should be genuine and not simulated.[40] This ground has never
been intended to afford an occasion for abuse, because of its subjective nature. The
records show that there were only six (6) instances when petitioner personally
collected and received from the church treasurers the tithes, collections, and
donations for the church.[41] The stenographic notes on the testimony of Naomi
Geniebla, the Negros Mission Church Auditor and a witness for private respondents,
show that Pastor Austria was able to remit all his collections to the treasurer of the
Negros Mission.[42]
Though private respondents were able to establish that petitioner collected and
received tithes and donations several times, they were not able to establish that
petitioner failed to remit the same to the Negros Mission, and that he pocketed the
amount and used it for his personal purpose. In fact, as admitted by their own
witness, Naomi Geniebla, petitioner remitted the amounts which he collected to the
Negros Mission for which corresponding receipts were issued to him. Thus, the
allegations of private respondents that petitioner breached their trust have no leg to
stand on.
In a vain attempt to support their claim of breach of trust, private respondents try
to pin on petitioner the alleged non-remittance of the tithes collected by his wife.
This argument deserves little consideration. First of all, as proven by convincing and
substantial evidence consisting of the testimonies of the witnesses for private
respondents who are church treasurers, it was Mrs. Thelma Austria who actually
collected the tithes and donations from them, and, who failed to remit the same to
the treasurer of the Negros Mission. The testimony of these church treasurers were
corroborated and confirmed by Ms. Geniebla and Mr. Ibesate, officers of the SDA.
Hence, in the absence of conspiracy and collusion, which private respondents failed
to demonstrate, between petitioner and his wife, petitioner cannot be made
accountable for the alleged infraction committed by his wife. After all, they still
have separate and distinct personalities. For this reason, the Labor Arbiter found it
difficult to see the basis for the alleged loss of confidence and breach of trust. The
Court does not find any cogent reason, therefore, to digress from the findings of the
Labor Arbiter which is fully supported by the evidence on record.
With respect to the grounds of serious misconduct and commission of an offense
against the person of the employers duly authorized representative, we find the
same unmeritorious and, as such, do not warrant petitioners dismissal from the
service.
Misconduct has been defined as improper or wrong conduct. It is the transgression
of some established and definite rule of action, a forbidden act, a dereliction of
duty, willful in character, and implies wrongful intent and not mere error in
judgment.[43] For misconduct to be considered serious it must be of such grave
and aggravated character and not merely trivial or unimportant.[44] Based on this
standard, we believe that the act of petitioner in banging the attache case on the
table, throwing the telephone and scattering the books in the office of Pastor Buhat,
although improper, cannot be considered as grave enough to be considered as
serious misconduct. After all, as correctly observed by the Labor Arbiter, though
petitioner committed damage to property, he did not physically assault Pastor Buhat
or any other pastor present during the incident of 16 October 1991. In fact, the
alleged offense committed upon the person of the employers representatives was
never really established or proven by private respondents. Hence, there is no basis
for the allegation that petitioners act constituted serious misconduct or that the
same was an offense against the person of the employers duly authorized
representative. As such, the cited actuation of petitioner does not justify the
ultimate penalty of dismissal from employment. While the Constitution does not
condone wrongdoing by the employee, it nevertheless urges a moderation of the
sanctions that may be applied to him in light of the many disadvantages that weigh
heavily on him like an albatross on his neck.[45] Where a penalty less punitive
would suffice, whatever missteps may have been committed by the worker ought
not be visited with a consequence so severe such as dismissal from employment.
[46] For the foregoing reasons, we believe that the minor infraction committed by
petitioner does not merit the ultimate penalty of dismissal.
The final ground alleged by private respondents in terminating petitioner, gross and
habitual neglect of duties, does not requires an exhaustive discussion. Suffice it to
say that all private respondents had were allegations but not proof. Aside from
merely citing the said ground, private respondents failed to prove culpability on the
part of petitioner. In fact, the evidence on record shows otherwise. Petitioners rise
from the ranks disclose that he was actually a hard-worker. Private respondents
evidence,[47] which consisted of petitioners Workers Reports, revealed how
petitioner travelled to different churches to attend to the faithful under his care.
Indeed, he labored hard for the SDA, but, in return, he was rewarded with a
dismissal from the service for a non-existent cause.
In view of the foregoing, we sustain the finding of the Labor Arbiter that petitioner
was terminated from service without just or lawful cause. Having been illegally
dismissed, petitioner is entitled to reinstatement to his former position without loss
of seniority right[48] and the payment of full backwages without any deduction
corresponding to the period from his illegal dismissal up to actual reinstatement.
[49]
WHEREFORE, the petition for certiorari is GRANTED. The challenged Resolution of
public respondent National Labor Relations Commission, rendered on 23 January
1996, is NULLIFIED and SET ASIDE. The Decision of the Labor Arbiter, dated 15
February 1993, is reinstated and hereby AFFIRMED.
SO ORDERED.
[G.R. No. 144767. March 21, 2002]

DILY DANY NACPIL, petitioner, vs. INTERNATIONAL BROADCASTING
CORPORATION, respondent.
DECISION
KAPUNAN, J.:
This is a petition for review on certiorari under Rule 45, assailing the Decision of the
Court of Appeals dated November 23, 1999 in CA-G.R. SP No. 52755[1] and the
Resolution dated August 31, 2000 denying petitioner Dily Dany Nacpil's motion for
reconsideration. The Court of Appeals reversed the decisions promulgated by the
Labor Arbiter and the National Labor Relations Commission (NLRC), which
consistently ruled in favor of petitioner.
Petitioner states that he was Assistant General Manager for Finance/Administration

and Comptroller of private respondent Intercontinental Broadcasting Corporation
(IBC) from 1996 until April 1997. According to petitioner, when Emiliano Templo
was appointed to replace IBC President Tomas Gomez III sometime in March 1997,
the former told the Board of Directors that as soon as he assumes the IBC
presidency, he would terminate the services of petitioner. Apparently, Templo
blamed petitioner, along with a certain Mr. Basilio and Mr. Gomez, for the prior
mismanagement of IBC. Upon his assumption of the IBC presidency, Templo
allegedly harassed, insulted, humiliated and pressured petitioner into resigning until
the latter was forced to retire. However, Templo refused to pay him his retirement
benefits, allegedly because he had not yet secured the clearances from the
Presidential Commission on Good Government and the Commission on Audit.
Furthermore, Templo allegedly refused to recognize petitioners employment,
claiming that petitioner was not the Assistant General Manager/Comptroller of IBC
but merely usurped the powers of the Comptroller. Hence, in 1997, petitioner filed
with the Labor Arbiter a complaint for illegal dismissal and non-payment of benefits.
Instead of filing its position paper, IBC filed a motion to dismiss alleging that the
Labor Arbiter had no jurisdiction over the case. IBC contended that petitioner was a
corporate officer who was duly elected by the Board of Directors of IBC; hence, the
case qualifies as an intra-corporate dispute falling within the jurisdiction of the
Securities and Exchange Commission (SEC). However, the motion was denied by
the Labor Arbiter in an Order dated April 22, 1998.[2]
On August 21, 1998, the Labor Arbiter rendered a Decision stating that petitioner
had been illegally dismissed. The dispositive portion thereof reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor of
the complainant and against all the respondents, jointly and severally, ordering the
latter:
1. To reinstate complainant to his former position without diminution of salary or
loss of seniority rights, and with full backwages computed from the time of his
illegal dismissal on May 16, 1997 up to the time of his actual reinstatement which is
tentatively computed as of the date of this decision on August 21, 1998 in the
amount of P1,231,750.00 (i.e., P75,000.00 a month x 15.16 months =
P1,137,000.00 plus 13th month pay equivalent to 1/12 of P 1,137,000.00 =
P94,750.00 or the total amount of P 1,231,750.00). Should complainant be not
reinstated within ten (10) days from receipt of this decision, he shall be entitled to
additional backwages until actually reinstated.
2. Likewise, to pay complainant the following:
a) P 2 Million as and for moral damages;
b) P500,000.00 as and for exemplary damages; plus and (sic)

c) Ten (10%) percent thereof as and for attorneys fees.
SO ORDERED.[3]
IBC appealed to the NLRC, but the same was dismissed in a Resolution dated March
2, 1999, for its failure to file the required appeal bond in accordance with Article
223 of the Labor Code.[4] IBC then filed a motion for reconsideration that was
likewise denied in a Resolution dated April 26, 1999.[5]
IBC then filed with the Court of Appeals a petition for certiorari under Rule 65,
which petition was granted by the appellate court in its Decision dated November
23, 1999. The dispositive portion of said decision states:
WHEREFORE, premises considered, the petition for Certiorari is GRANTED. The
assailed decisions of the Labor Arbiter and the NLRC are REVERSED and SET ASIDE
and the complaint is DISMISSED without prejudice.
SO ORDERED.[6]
Petitioner then filed a motion for reconsideration, which was denied by the appellate
court in a Resolution dated August 31, 2000.
Hence, this petition.
Petitioner Nacpil submits that:
I.THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONER WAS APPOINTED
BY RESPONDENTS BOARD OF DIRECTORS AS COMPTROLLER. THIS FINDING IS
CONTRARY TO THE COMMON, CONSISTENT POSITION AND ADMISSION OF BOTH
PARTIES. FURTHER, RESPONDENTS BY-LAWS DOES NOT INCLUDE COMPTROLLER
AS ONE OF ITS CORPORATE OFFICERS.
II.THE COURT OF APPEALS WENT BEYOND THE ISSUE OF THE CASE WHEN IT
SUBSTITUTED THE NATIONAL LABOR RELATIONS COMMISSIONS DECISION TO
APPLY THE APPEAL BOND REQUIREMENT STRICTLY IN THE INSTANT CASE. THE
ONLY ISSUE FOR ITS DETERMINATION IS WHETHER NLRC COMMITTED GRAVE
ABUSE OF DISCRETION IN DOING THE SAME.[7]
The issue to be resolved is whether the Labor Arbiter had jurisdiction over the case
for illegal dismissal and non-payment of benefits filed by petitioner. The Court finds
that the Labor Arbiter had no jurisdiction over the same.
Under Presidential Decree No. 902-A (the Revised Securities Act), the law in force
when the complaint for illegal dismissal was instituted by petitioner in 1997, the
following cases fall under the exclusive of the SEC:
a) Devices or schemes employed by or any acts of the board of directors, business

associates, its officers or partners, amounting to fraud and misrepresentation which
may be detrimental to the interest of the public and/or of the stockholders,
partners, members of associations or organizations registered with the
Commission;
b) Controversies arising out of intra-corporate or partnership relations, between and
among stockholders, members or associates; between any or all of them and the
corporation, partnership or association of which they are stockholders, members or
associates, respectively; and between such corporation, partnership or association
and the State insofar as it concerns their individual franchise or right to exist as
such entity;
c) Controversies in the election or appointment of directors, trustees, officers, or
managers of such corporations, partnerships or associations;
d) Petitions of corporations, partnerships, or associations to be declared in the state
of suspension of payments in cases where the corporation, partnership or
association possesses property to cover all of its debts but foresees the
impossibility of meeting them when they respectively fall due or in cases where the
corporation, partnership or association has no sufficient assets to cover its
liabilities, but is under the Management Committee created pursuant to this decree.
(Emphasis supplied.)
The Court has consistently held that there are two elements to be considered in
determining whether the SEC has jurisdiction over the controversy, to wit: (1) the
status or relationship of the parties; and (2) the nature of the question that is the
subject of their controversy.[8]
Petitioner argues that he is not a corporate officer of the IBC but an employee
thereof since he had not been elected nor appointed as Comptroller and Assistant
Manager by the IBCs Board of Directors. He points out that he had actually been
appointed as such on January 11, 1995 by the IBCs General Manager, Ceferino
Basilio. In support of his argument, petitioner underscores the fact that the IBCs
By-Laws does not even include the position of comptroller in its roster of corporate
officers.[9] He therefore contends that his dismissal is a controversy falling within
the jurisdiction of the labor courts.[10]
Petitioners argument is untenable. Even assuming that he was in fact appointed by

the General Manager, such appointment was subsequently approved by the Board of
Directors of the IBC.[11] That the position of Comptroller is not expressly
mentioned among the officers of the IBC in the By-Laws is of no moment, because
the IBCs Board of Directors is empowered under Section 25 of the Corporation
Code[12] and under the corporations By-Laws to appoint such other officers as it
may deem necessary. The By-Laws of the IBC categorically provides:
XII. OFFICERS
The officers of the corporation shall consist of a President, a Vice-President, a
Secretary-Treasurer, a General Manager, and such other officers as the Board of
Directors may from time to time does fit to provide for. Said officers shall be elected
by majority vote of the Board of Directors and shall have such powers and duties as
shall hereinafter provide (Emphasis supplied).[13]
The Court has held that in most cases the by-laws may and usually do provide for
such other officers,[14] and that where a corporate office is not specifically
indicated in the roster of corporate offices in the by-laws of a corporation, the board
of directors may also be empowered under the by-laws to create additional officers
as may be necessary.[15]
An office has been defined as a creation of the charter of a corporation, while an
officer as a person elected by the directors or stockholders. On the other hand, an
employee occupies no office and is generally employed not by action of the
directors and stockholders but by the managing officer of the corporation who also
determines the compensation to be paid to such employee.[16]
As petitioners appointment as comptroller required the approval and formal action
of the IBCs Board of Directors to become valid,[17] it is clear therefore holds that
petitioner is a corporate officer whose dismissal may be the subject of a controversy
cognizable by the SEC under Section 5(c) of P.D. 902-A which includes
controversies involving both election and appointment of corporate directors,
trustees, officers, and managers.[18] Had petitioner been an ordinary employee,
such board action would not have been required.
Thus, the Court of Appeals correctly held that:
Since complainants appointment was approved unanimously by the Board of
Directors of the corporation, he is therefore considered a corporate officer and his
claim of illegal dismissal is a controversy that falls under the jurisdiction of the SEC
as contemplated by Section 5 of P.D. 902-A. The rule is that dismissal or nonappointment of a corporate officer is clearly an intra-corporate matter and
jurisdiction over the case properly belongs to the SEC, not to the NLRC.[19]
As to petitioners argument that the nature of his functions is recommendatory

thereby making him a mere managerial officer, the Court has previously held that
the relationship of a person to a corporation, whether as officer or agent or
employee is not determined by the nature of the services performed, but instead by
the incidents of the relationship as they actually exist.[20]
It is likewise of no consequence that petitioner's complaint for illegal dismissal
includes money claims, for such claims are actually part of the perquisites of his
position in, and therefore linked with his relations with, the corporation. The
inclusion of such money claims does not convert the issue into a simple labor
problem. Clearly, the issues raised by petitioner against the IBC are matters that
come within the area of corporate affairs and management, and constitute a
corporate controversy in contemplation of the Corporation Code.[21]
Petitioner further argues that the IBC failed to perfect its appeal from the Labor
Arbiters Decision for its non-payment of the appeal bond as required under Article
223 of the Labor Code, since compliance with the requirement of posting of a cash
or surety bond in an amount equivalent to the monetary award in the judgment
appealed from has been held to be both mandatory and jurisdictional.[22] Hence,
the Decision of the Labor Arbiter had long become final and executory and thus, the
Court of Appeals acted with grave abuse of discretion amounting to lack or excess
of jurisdiction in giving due course to the IBCs petition for certiorari, and in deciding
the case on the merits.
The IBCs failure to post an appeal bond within the period mandated under Article
223 of the Labor Code has been rendered immaterial by the fact that the Labor
Arbiter did not have jurisdiction over the case since as stated earlier, the same is in
the nature of an intra-corporate controversy. The Court has consistently held that
where there is a finding that any decision was rendered without jurisdiction, the
action shall be dismissed. Such defense can be interposed at any time, during
appeal or even after final judgment.[23] It is a well-settled rule that jurisdiction is
conferred only by the Constitution or by law. It cannot be fixed by the will of the
parties; it cannot be acquired through, enlarged or diminished by, any act or
omission of the parties.[24]
Considering the foregoing, the Court holds that no error was committed by the
Court of Appeals in dismissing the case filed before the Labor Arbiter, without
prejudice to the filing of an appropriate action in the proper court.
It must be noted that under Section 5.2 of the Securities Regulation Code (Republic
Act No. 8799) which was signed into law by then President Joseph Ejercito Estrada
on July 19, 2000, the SECs jurisdiction over all cases enumerated in Section 5 of
P.D. 902-A has been transferred to the Regional Trial Courts.[25]
WHEREFORE, the petition is hereby DISMISSED and the Decision of the Court of
Appeals in CA-G.R. SP No. 52755 is AFFIRMED.
SO ORDERED.
[G.R. No. 142244. November 18, 2002]
ATLAS FARMS, INC., petitioner, vs. NATIONAL LABOR RELATIONS

COMMISSION, JAIME O. DELA PEA and MARCIAL I. ABION, respondents.
DECISION
QUISUMBING, J.:
Petitioner seeks the reversal of the decision[1] dated January 10, 2000 of the Court
of Appeals in CA-G.R. SP No. 52780, dismissing its petition for certiorari against the
NLRC, as well as the resolution[2] dated February 24, 2000, denying its motion for
reconsideration.
The antecedent facts of the case, as found by the Court of Appeals,[3] are as
follows:
Private respondent Jaime O. dela Pea was employed as a veterinary aide by
petitioner in December 1975. He was among several employees terminated in July
1989. On July 8, 1989, he was re-hired by petitioner and given the additional job of
feedmill operator. He was instructed to train selected workers to operate the
feedmill.
On March 13, 1993,[4] Pea was allegedly caught urinating and defecating on
company premises not intended for the purpose. The farm manager of petitioner
issued a formal notice directing him to explain within 24 hours why disciplinary
action should not be taken against him for violating company rules and regulations.
Pea refused, however, to receive the formal notice. He never bothered to explain,
either verbally or in writing, according to petitioner. Thus, on March 20, 1993, a
notice of termination with payment of his monetary benefits was sent to him. He
duly acknowledged receipt of his separation pay of P13,918.67.
From the start of his employment on July 8, 1989, until his termination on March
20, 1993, Pea had worked for seven days a week, including holidays, without
overtime, holiday, rest day pay and service incentive leave. At the time of his
dismissal from employment, he was receiving P180 pesos daily wage, or an average
monthly salary of P5,402.
Co-respondent Marcial I. Abion[5] was a carpenter/mason and a maintenance man

whose employment by petitioner commenced on October 8, 1990. Allegedly, he
caused the clogging of the fishpond drainage resulting in damages worth several
hundred thousand pesos when he improperly disposed of the cut grass and other
waste materials into the ponds drainage system. Petitioner sent a written notice to
Abion, requiring him to explain what happened, otherwise, disciplinary action would
be taken against him. He refused to receive the notice and give an explanation,
according to petitioner. Consequently, the company terminated his services on
October 27, 1992. He acknowledged receipt of a written notice of dismissal, with his
separation pay.
Like Pea, Abion worked seven days a week, including holidays, without holiday pay,
rest day pay, service incentive leave pay and night shift differential pay. When
terminated on October 27, 1992, Abion was receiving a monthly salary of P4,500.
Pea and Abion filed separate complaints for illegal dismissal that were later
consolidated. Both claimed that their termination from service was due to
petitioners suspicion that they were the leaders in a plan to form a union to
compete and replace the existing management-dominated union.
On November 9, 1993, the labor arbiter dismissed their complaints on the ground
that the grievance machinery in the collective bargaining agreement (CBA) had not
yet been exhausted. Private respondents availed of the grievance process, but later
on refiled the case before the NLRC in Region IV. They alleged lack of sympathy on
petitioners part to engage in conciliation proceedings.
Their cases were consolidated in the NLRC. At the initial mandatory conference,
petitioner filed a motion to dismiss, on the ground of lack of jurisdiction, alleging
private respondents themselves admitted that they were members of the
employees union with which petitioner had an existing CBA. This being the case,
according to petitioner, jurisdiction over the case belonged to the grievance
machinery and thereafter the voluntary arbitrator, as provided in the CBA.
In a decision dated January 30, 1996, the labor arbiter dismissed the complaint for
lack of merit, finding that the case was one of illegal dismissal and did not involve
the interpretation or implementation of any CBA provision. He stated that Article
217 (c) of the Labor Code[6] was inapplicable to the case. Further, the labor arbiter
found that although both complainants did not substantiate their claims of illegal
dismissal, there was proof that private respondents voluntarily accepted their
separation pay and petitioners financial assistance.
Thus, private respondents brought the case to the NLRC, which reversed the labor
arbiters decision. Dissatisfied with the NLRC ruling, petitioner went to the Court of
Appeals by way of a petition for review on certiorari under Rule 65, seeking
reinstatement of the labor arbiters decision. The appellate court denied the petition
and affirmed the NLRC resolution with some modifications, thus:
WHEREFORE, the petition is DENIED. The resolution in NLRC CA No. 010520-96 is
AFFIRMED with the following modifications:
1) The private respondents can not be reinstated, due to their acceptance of the
separation pay offered by the petitioner;
2) The private respondents are entitled to their full back wages; and,
3) The amount of the separation pay received by private respondents from
petitioner shall not be deducted from their full back wages.
Costs against petitioner.
SO ORDERED.[7]
Petitioner forthwith filed its motion for reconsideration, which was denied in a
resolution dated February 24, 2000, which reads:
Acting on the Motion for Reconsideration filed by petitioner[s] which drew an
opposition from private respondents, the Court resolved to DENY the aforesaid
motion for reconsideration, as the issues raised therein have been passed upon by
the Court in its questioned decision and no substantial arguments were presented
to warrant its reversal, let alone modification.
SO ORDERED.[8]
In this petition now before us, petitioner alleges that the appellate court erred in:
I. DENYING THE PETITION FOR CERTIORARI AND IN EFFECT AFFIRMING THE
RULINGS OF THE PUBLIC RESPONDENT NLRC THAT THE PRIVATE RESPONDENTS
WERE ILLEGALLY DISMISSED;
II. RULING THAT THE PRIVATE RESPONDENTS ARE ENTITLED TO SEPARATION PAY
AND FULL BACKWAGES;
III. RULING THAT PETITIONER IS LIABLE FOR COSTS OF SUIT.[9]
Petitioner contends that the dismissal of private respondents was for a just and
valid cause, pursuant to the provisions of the companys rules and regulations. It
also alleges lack of jurisdiction on the part of the labor arbiter, claiming that the
cases should have been resolved through the grievance machinery, and eventually
referred to voluntary arbitration, as prescribed in the CBA.
For their part, private respondents contend that they were illegally dismissed from
employment because management discovered that they intended to form another
union, and because they were vocal in asserting their rights. In any case, according
to private respondents, the petition involves factual issues that cannot be properly
raised in a petition for review on certiorari under Rule 45 of the Revised Rules of
Court.[10]
In fine, there are three issues to be resolved: 1) whether private respondents were
legally and validly dismissed; 2) whether the labor arbiter and the NLRC had
jurisdiction to decide complaints for illegal dismissal; and 3) whether petitioner is
liable for costs of the suit.
The first issue primarily involves questions of fact, which can serve as basis for the
conclusion that private respondents were legally and validly dismissed. The burden
of proving that the dismissal of private respondents was legal and valid falls upon
petitioner. The NLRC found that petitioner failed to substantiate its claim that both
private respondents committed certain acts that violated company rules and
regulations,[11] hence we find no factual basis to say that private respondents
dismissal was in order. We see no compelling reason to deviate from the NLRC
ruling that their dismissal was illegal, absent a showing that it reached its
conclusion arbitrarily.[12] Moreover, factual findings of agencies exercising quasijudicial functions are accorded not only respect but even finality, aside from the
consideration here that this Court is not a trier of facts. [13]
Anent the second issue, Article 217 of the Labor Code provides that labor arbiters
have original and exclusive jurisdiction over termination disputes. A possible
exception is provided in Article 261 of the Labor Code, which provides thatThe Voluntary Arbitrator or panel of voluntary arbitrators shall have original and
exclusive jurisdiction to hear and decide all unresolved grievances arising from the
interpretation or implementation of the Collective Bargaining Agreement and those
arising from the interpretation or enforcement of company personnel policies
referred to in the immediately preceding article. Accordingly, violations of a
Collective Bargaining Agreement, except those which are gross in character, shall
no longer be treated as unfair labor practice and shall be resolved as grievances
under the Collective Bargaining Agreement. For purposes of this article, gross
violations of Collective Bargaining Agreement shall mean flagrant and or malicious
refusal to comply with the economic provisions of such agreement.
The Commission, its Regional Offices and the Regional Directors of the Department
of Labor and Employment shall not entertain disputes, grievances or matters under
the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of
Voluntary Arbitrators and shall immediately dispose and refer the same to the
grievance Machinery or Arbitration provided in the Collective Bargaining Agreement.
But as held in Vivero vs. CA,[14] petitioner cannot arrogate into the powers of
Voluntary Arbitrators the original and exclusive jurisdiction of Labor Arbiters over
unfair labor practices, termination disputes, and claims for damages, in the absence
of an express agreement between the parties in order for Article 262 of the Labor
Code [Jurisdiction over other labor disputes] to apply in the case at bar.
Moreover, per Justice Bellosillo:
It may be observed that under Policy Instruction No. 56 of the Secretary of Labor,
dated 6 April 1993, Clarifying the Jurisdiction Between Voluntary Arbitrators and
Labor Arbiters Over Termination Cases and Providing Guidelines for the Referral of
Said Cases Originally Filed with the NLRC to the NCMB, termination cases arising in
or resulting from the interpretation and implementation of collective bargaining
agreements and interpretation and enforcement of company personnel policies
which were initially processed at the various steps of the plant-level Grievance
Procedures under the parties collective bargaining agreements fall within the
original and exclusive jurisdiction of the voluntary arbitrator pursuant to Art. 217
(c) and Art. 261 of the Labor Code; and, if filed before the Labor Arbiter, these
cases shall be dismissed by the Labor Arbiter for lack of jurisdiction and referred to
the concerned NCMB Regional Branch for appropriate action towards an expeditious
selection by the parties of a Voluntary Arbitrator or Panel of Arbitrators based on
the procedures agreed upon in the CBA.
As earlier stated, the instant case is a termination dispute falling under the original
and exclusive jurisdiction of the Labor Arbiter, and does not specifically involve the
application, implementation or enforcement of company personnel policies
contemplated in Policy Instruction No. 56. Consequently, Policy Instruction No. 56
does not apply in the case at bar.[15] x x x
Records show, however, that private respondents sought without success to avail of
the grievance procedure in their CBA.[16] On this point, petitioner maintains that
by so doing, private respondents recognized that their cases still fell under the
grievance machinery. According to petitioner, without having exhausted said
machinery, the private respondents filed their action before the NLRC, in a clear act
of forum-shopping.[17] However, it is worth pointing out that private respondents
went to the NLRC only after the labor arbiter dismissed their original complaint for
illegal dismissal. Under these circumstances private respondents had to find
another avenue for redress. We agree with the NLRC that it was petitioner who
failed to show proof that it took steps to convene the grievance machinery after the
labor arbiter first dismissed the complaints for illegal dismissal and directed the
parties to avail of the grievance procedure under Article VII of the existing CBA.
They could not now be faulted for attempting to find an impartial forum, after
petitioner failed to listen to them and after the intercession of the labor arbiter
proved futile. The NLRC had aptly concluded in part that private respondents had
already exhausted the remedies under the grievance procedure.[18] It erred only in
finding that their cause of action was ripe for arbitration.
In the case of Maneja vs. NLRC,[19] we held that the dismissal case does not fall
within the phrase grievances arising from the interpretation or implementation of
the collective bargaining agreement and those arising from the interpretation or
enforcement of company personnel policies. In Maneja, the hotel employee was
dismissed without hearing. We ruled that her dismissal was unjustified, and her
right to due process was violated, absent the twin requirements of notice and
hearing. We also held that the labor arbiter had original and exclusive jurisdiction
over the termination case, and that it was error to give the voluntary arbitrator
jurisdiction over the illegal dismissal case.
In Vivero vs. CA,[20] private respondents attempted to justify the jurisdiction of the
voluntary arbitrator over a termination dispute alleging that the issue involved the
interpretation and implementation of the grievance procedure in the CBA. There, we
held that since what was challenged was the legality of the employees dismissal for
lack of cause and lack of due process, the case was primarily a termination dispute.
The issue of whether there was proper interpretation and implementation of the
CBA provisions came into play only because the grievance procedure in the CBA
was not observed, after he sought his unions assistance. Since the real issue then
was whether there was a valid termination, there was no reason to invoke the need
to interpret nor question an implementation of any CBA provision.
One significant fact in the present petition also needs stressing. Pursuant to Article
260[21] of the Labor Code, the parties to a CBA shall name or designate their
respective representatives to the grievance machinery and if the grievance is
unsettled in that level, it shall automatically be referred to the voluntary arbitrators
designated in advance by the parties to a CBA. Consequently only disputes
involving the union and the company shall be referred to the grievance machinery
or voluntary arbitrators. In these termination cases of private respondents, the
union had no participation, it having failed to object to the dismissal of the
employees concerned by the petitioner. It is obvious that arbitration without the
unions active participation on behalf of the dismissed employees would be
pointless, or even prejudicial to their cause.
Coming to the merits of the petition, the NLRC found that petitioner did not comply
with the requirements of a valid dismissal. For a dismissal to be valid, the employer
must show that: (1) the employee was accorded due process, and (2) the dismissal
must be for any of the valid causes provided for by law.[22] No evidence was
shown that private respondents refused, as alleged, to receive the notices requiring
them to show cause why no disciplinary action should be taken against them.
Without proof of notice, private respondents who were subsequently dismissed
without hearing were also deprived of a chance to air their side at the level of the
grievance machinery. Given the fact of dismissal, it can be said that the cases were
effectively removed from the jurisdiction of the voluntary arbitrator, thus placing
them within the jurisdiction of the labor arbiter. Where the dispute is just in the
interpretation, implementation or enforcement stage, it may be referred to the
grievance machinery set up in the CBA, or brought to voluntary arbitration. But,
where there was already actual termination, with alleged violation of the employees
rights, it is already cognizable by the labor arbiter.[23]
In sum, we conclude that the labor arbiter and then the NLRC had jurisdiction over
the cases involving private respondents dismissal, and no error was committed by
the appellate court in upholding their assumption of jurisdiction.
However, we find that a modification of the monetary awards is in order. As a
consequence of their illegal dismissal, private respondents are entitled to
reinstatement to their former positions. But since reinstatement is no longer
feasible because petitioner had already closed its shop, separation pay in lieu of
reinstatement shall be awarded.[24] A terminated employees receipt of his
separation pay and other monetary benefits does not preclude reinstatement or full
benefits under the law, should reinstatement be no longer possible.[25] As held in
Cario vs. ACCFA:[26]
Acceptance of those benefits would not amount to estoppel. The reason is plain.
Employer and employee, obviously, do not stand on the same footing. The employer
drove the employee to the wall. The latter must have to get hold of the money.
Because out of job, he had to face the harsh necessities of life. He thus found
himself in no position to resist money proffered. His, then, is a case of adherence,
not of choice. One thing sure, however, is that petitioners did not relent their claim.
They pressed it. They are deemed not to have waived their rights. Renuntiato non
praesumitur.
Conformably, private respondents are entitled to separation pay equivalent to one
months salary for every year of service, in lieu of reinstatement.[27] As regards the
award of damages, in order not to further delay the disposition of this case, we find
it necessary to expressly set forth the extent of the backwages as awarded by the
appellate court. Pursuant to R.A. 6715, as amended, private respondents shall be
entitled to full backwages computed from the time of their illegal dismissal up to
the date of promulgation of this decision without qualification, considering that
reinstatement is no longer practicable under the circumstances.[28]
Having found private respondents dismissal to be illegal, and the labor arbiter and
the NLRC duly vested with jurisdiction to hear and decide their cases, we agree with
the appellate court that petitioner should pay the costs of suit.
WHEREFORE, the petition is DENIED for lack of merit. The decision of the Court of
Appeals in CA-G.R. SP No. 52780 is AFFIRMED with the MODIFICATION that
petitioner is ordered to pay private respondents (a) separation pay, in lieu of their
reinstatement, equivalent to one months salary for every year of service, (b) full
backwages from the date of their dismissal up to the date of the promulgation of
this decision, together with (c) the costs of suit.
SO ORDERED.
[G.R. No. 130866. September 16, 1998]
ST. MARTIN FUNERAL HOME, petitioner, vs. NATIONAL LABOR RELATIONS
MARTINEZ, COMMISSION and BIENVENIDO ARICAYOS, respondents.
DECISION
REGALADO, J.:
The present petition for certiorari stemmed from a complaint for illegal dismissal
filed by herein private respondent before the National Labor Relations Commission
(NLRC), Regional Arbitration Branch No. III, in San Fernando, Pampanga. Private
respondent alleges that he started working as Operations Manager of petitioner St.
Martin Funeral Home on February 6, 1995. However, there was no contract of
employment executed between him and petitioner nor was his name included in the
semi-monthly payroll. On January 22, 1996, he was dismissed from his
employment for allegedly misappropriating P38,000.00 which was intended for
payment by petitioner of its value added tax (VAT) to the Bureau of Internal
Revenue (BIR).[1]
Petitioner on the other hand claims that private respondent was not its employee
but only the uncle of Amelita Malabed, the owner of petitioner St. Martins Funeral
Home. Sometime in 1995, private respondent, who was formerly working as an
overseas contract worker, asked for financial assistance from the mother of Amelita.
Since then, as an indication of gratitude, private respondent voluntarily helped the
mother of Amelita in overseeing the business.
In January 1996, the mother of Amelita passed away, so the latter she took over
the management of the business. She then discovered that there were arrears in
the payment of taxes and other government fees, although the records purported
to show that the same were already paid. Amelita then made some changes in the
business operation and private respondent and his wife were no longer allowed to
participate in the management thereof. As a consequence, the latter filed a
complaint charging that petitioner had illegally terminated his employment.[2]
Based on the position papers of the parties, the labor arbiter rendered a decision in
favor of petitioner on October 25, 1996 declaring that no employer-employee
relationship existed between the parties and, therefore, his office had no
jurisdiction over the case.[3]
Not satisfied with the said decision, private respondent appealed to the NLRC
contending that the labor arbiter erred (1) in not giving credence to the evidence
submitted by him; (2) in holding that he worked as a volunteer and not as an
employee of St. Martin Funeral Home from February 6, 1995 to January 23, 1996,
or a period of about one year; and (3) in ruling that there was no employeremployee relationship between him and petitioner.[4]
On June 13, 1997, the NLRC rendered a resolution setting aside the questioned
decision and remanding the case to the labor arbiter for immediate appropriate
proceedings.[5] Petitioner then filed a motion for reconsideration which was denied
by the NLRC in its resolution dated August 18, 1997 for lack of merit,[6] hence the
present petition alleging that the NLRC committed grave abuse of discretion.[7]
Before proceeding further into the merits of the case at bar, the Court feels that it is
now exigent and opportune to reexamine the functional validity and systemic
practicability of the mode of judicial review it has long adopted and still follows with
respect to decisions of the NLRC. The increasing number of labor disputes that find
their way to this Court and the legislative changes introduced over the years into
the provisions of Presidential Decree (P.D.) No. 442 (The Labor Code of the
Philippines and Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary Reorganization
Act of 1980) now stridently call for and warrant a reassessment of that procedural
aspect.
We prefatorily delve into the legal history of the NLRC. It was first established in the
Department of Labor by P.D. No. 21 on October 14, 1972, and its decisions were
expressly declared to be appealable to the Secretary of Labor and, ultimately, to
the President of the Philippines.
On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the same
to take effect six months after its promulgation.[8] Created and regulated therein is
the present NLRC which was attached to the Department of Labor and Employment
for program and policy coordination only.[9] Initially, Article 302 (now, Article 223)
thereof also granted an aggrieved party the remedy of appeal from the decision of
the NLRC to the Secretary of Labor, but P.D. No. 1391 subsequently amended said
provision and abolished such appeals. No appellate review has since then been
provided for.
Thus, to repeat, under the present state of the law, there is no provision for appeals
from the decision of the NLRC.[10] The present Section 223, as last amended by
Section 12 of R.A. No. 6715, instead merely provides that the Commission shall
decide all cases within twenty days from receipt of the answer of the appellee, and
that such decision shall be final and executory after ten calendar days from receipt
thereof by the parties.
When the issue was raised in an early case on the argument that this Court has no
jurisdiction to review the decisions of the NLRC, and formerly of the Secretary of
Labor, since there is no legal provision for appellate review thereof, the Court
nevertheless rejected that thesis. It held that there is an underlying power of the
courts to scrutinize the acts of such agencies on questions of law and jurisdiction
even though no right of review is given by statute; that the purpose of judicial
review is to keep the administrative agency within its jurisdiction and protect the
substantial rights of the parties; and that it is that part of the checks and balances
which restricts the separation of powers and forestalls arbitrary and unjust
adjudications.[11]
Pursuant to such ruling, and as sanctioned by subsequent decisions of this Court,
the remedy of the aggrieved party is to timely file a motion for reconsideration as a
precondition for any further or subsequent remedy,[12] and then seasonably avail
of the special civil action of certiorari under Rule 65,[13] for which said Rule has
now fixed the reglementary period of sixty days from notice of the decision.
Curiously, although the 10-day period for finality of the decision of the NLRC may
already have lapsed as contemplated in Section 223 of the Labor Code, it has been
held that this Court may still take cognizance of the petition for certiorari on
jurisdictional and due process considerations if filed within the reglementary period
under Rule 65.[14]
Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129
originally provided as follows:
SEC. 9. Jurisdiction. - The Intermediate Appellate Court shall exercise:
(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas
corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of
its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of

Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders, or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards, or commissions, except those falling within the appellate
jurisdiction of the Supreme Court in accordance with the Constitution, the
provisions of this Act, and of subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.
The Intermediate Appellate Court shall have the power to try cases and conduct
hearings, receive evidence and perform any and all acts necessary to resolve
factual issues raised in cases falling within its original and appellate jurisdiction,
including the power to grant and conduct new trials or further proceedings.
These provisions shall not apply to decisions and interlocutory orders issued under
the Labor Code of the Philippines and by the Central Board of Assessment Appeals.
[15]
Subsequently, and as it presently reads, this provision was amended by R.A. No.
7902 effective March 18, 1995, to wit:
SEC. 9. Jurisdiction. - The Court of Appeals shall exercise:
(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas
corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of
its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of
Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, including the Securities and Exchange
Commission, the Social Security Commission, the Employees Compensation
Commission and the Civil Service Commission, except those falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
Labor Code of the Philippines under Presidential Decree No. 442, as amended, the
provisions of this Act, and of subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.
The Court of Appeals shall have the power to try cases and conduct hearings,
receive evidence and perform any and all acts necessary to resolve factual issues
raised in cases falling within its original and appellate jurisdiction, including the
power to grant and conduct new trials or further proceedings. Trials or hearings in
the Court of Appeals must be continuous and must be completed within, three (3)
months, unless extended by the Chief Justice.
It will readily be observed that, aside from the change in the name of the lower
appellate court,[16] the following amendments of the original provisions of Section
9 of B.P. No. 129 were effected by R.A. No. 7902, viz.:
1. The last paragraph which excluded its application to the Labor Code of the
Philippines and the Central Board of Assessment Appeals was deleted and replaced
by a new paragraph granting the Court of Appeals limited powers to conduct trials
and hearings in cases within its jurisdiction.
2. The reference to the Labor Code in that last paragraph was transposed to
paragraph (3) of the section, such that the original exclusionary clause therein now
provides except those falling within the appellate jurisdiction of the Supreme Court
in accordance with the Constitution, the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, the provisions of this Act, and of
subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948. (Italics supplied)
3. Contrarily, however, specifically added to and included among the quasi-judicial
agencies over which the Court of Appeals shall have exclusive appellate jurisdiction
are the Securities and Exchange Commission, the Social Security Commission, the
Employees Compensation Commission and the Civil Service Commission.
This, then, brings us to a somewhat perplexing impass, both in point of purpose
and terminology. As earlier explained, our mode of judicial review over decisions of
the NLRC has for some time now been understood to be by a petition for certiorari
under Rule 65 of the Rules of Court. This is, of course, a special original action
limited to the resolution of jurisdictional issues, that is, lack or excess of jurisdiction
and, in almost all cases that have been brought to us, grave abuse of discretion
amounting to lack of jurisdiction.
It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now grants
exclusive appellate jurisdiction to the Court of Appeals over all final adjudications of
the Regional Trial Courts and the quasi-judicial agencies generally or specifically
referred to therein except, among others, those falling within the appellate
jurisdiction of the Supreme Court in accordance with x x x the Labor Code of the
Philippines under Presidential Decree No. 442, as amended, x x x. This would
necessarily contradict what has been ruled and said all along that appeal does not
lie from decisions of the NLRC.[17] Yet, under such excepting clause literally
construed, the appeal from the NLRC cannot be brought to the Court of Appeals,
but to this Court by necessary implication.
The same exceptive clause further confuses the situation by declaring that the
Court of Appeals has no appellate jurisdiction over decisions falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
provisions of B.P. No. 129, and those specified cases in Section 17 of the Judiciary
Act of 1948. These cases can, of course, be properly excluded from the exclusive
appellate jurisdiction of the Court of Appeals. However, because of the
aforementioned amendment by transposition, also supposedly excluded are cases
falling within the appellate jurisdiction of the Supreme Court in accordance with the
Labor Code. This is illogical and impracticable, and Congress could not have
intended that procedural gaffe, since there are no cases in the Labor Code the
decisions, resolutions, orders or awards wherein are within the appellate jurisdiction
of the Supreme Court or of any other court for that matter.
A review of the legislative records on the antecedents of R.A. No. 7902 persuades
us that there may have been an oversight in the course of the deliberations on the
said Act or an imprecision in the terminology used therein. In fine, Congress did
intend to provide for judicial review of the adjudications of the NLRC in labor cases
by the Supreme Court, but there was an inaccuracy in the term used for the
intended mode of review. This conclusion which we have reluctantly but prudently
arrived at has been drawn from the considerations extant in the records of
Congress, more particularly on Senate Bill No. 1495 and the Reference Committee
Report on S. No. 1495/H. No. 10452.[18]
In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his sponsorship
speech[19] from which we reproduce the following excerpts:
The Judiciary Reorganization Act, Mr. President, Batas Pambansa Blg. 129,
reorganized the Court of Appeals and at the same time expanded its jurisdiction
and powers. Among others, its appellate jurisdiction was expanded to cover not
only final judgment of Regional Trial Courts, but also all final judgment(s),
decisions, resolutions, orders or awards of quasi-judicial agencies, instrumentalities,
boards and commissions, except those falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the provisions of BP Blg. 129
and of subparagraph 1 of the third paragraph and subparagraph 4 of Section 17 of
the Judiciary Act of 1948.
Mr. President, the purpose of the law is to ease the workload of the Supreme Court
by the transfer of some of its burden of review of factual issues to the Court of
Appeals. However, whatever benefits that can be derived from the expansion of the
appellate jurisdiction of the Court of Appeals was cut short by the last paragraph of
Section 9 of Batas Pambansa Blg. 129 which excludes from its coverage the
decisions and interlocutory orders issued under the Labor Code of the Philippines
and by the Central Board of Assessment Appeals.
Among the highest number of cases that are brought up to the Supreme Court are
labor cases. Hence, Senate Bill No. 1495 seeks to eliminate the exceptions
enumerated in Section 9 and, additionally, extends the coverage of appellate review
of the Court of Appeals in the decision(s) of the Securities and Exchange
Commission, the Social Security Commission, and the Employees Compensation
Commission to reduce the number of cases elevated to the Supreme Court.
(Emphases and corrections ours)
xxx
Senate Bill No. 1495 authored by our distinguished Colleague from Laguna provides
the ideal situation of drastically reducing the workload of the Supreme Court
without depriving the litigants of the privilege of review by an appellate tribunal.
In closing, allow me to quote the observations of former Chief Justice Teehankee in
1986 in the Annual Report of the Supreme Court:
x x x Amendatory legislation is suggested so as to relieve the Supreme Court of the
burden of reviewing these cases which present no important issues involved beyond
the particular fact and the parties involved, so that the Supreme Court may wholly
devote its time to cases of public interest in the discharge of its mandated task as
the guardian of the Constitution and the guarantor of the peoples basic rights and
additional task expressly vested on it now to determine whether or not there has
been a grave abuse of discretion amounting to lack of jurisdiction on the part of any
branch or instrumentality of the Government.
We used to have 500,000 cases pending all over the land, Mr. President. It has been
cut down to 300,000 cases some five years ago. I understand we are now back to
400,000 cases. Unless we distribute the work of the appellate courts, we shall
continue to mount and add to the number of cases pending.
In view of the foregoing, Mr. President, and by virtue of all the reasons we have
submitted, the Committee on Justice and Human Rights requests the support and
collegial approval of our Chamber.
xxx
Surprisingly, however, in a subsequent session, the following Committee
Amendment was introduced by the said sponsor and the following proceedings
transpired:[20]
Senator Roco. On page 2, line 5, after the line Supreme Court in accordance with
the Constitution, add the phrase THE LABOR CODE OF THE PHILIPPINES UNDER
P.D. 442, AS AMENDED. So that it becomes clear, Mr. President, that issues arising
from the Labor Code will still be appealable to the Supreme Court.
The President. Is there any objection? (Silence) Hearing none, the amendment is
approved.
Senator Roco. On the same page, we move that lines 25 to 30 be deleted. This was
also discussed with our Colleagues in the House of Representatives and as we
understand it, as approved in the House, this was also deleted, Mr. President.
approved.
Senator Roco. There are no further Committee amendments, Mr. President.
Senator Romulo. Mr. President, I move that we close the period of Committee
amendments.
approved. (Italics supplied)
xxx
Thereafter, since there were no individual amendments, Senate Bill No. 1495 was
passed on second reading and being a certified bill, its unanimous approval on third
reading followed.[21]; Record of the Senate, Vol. V, No. 63, pp. 180-181.21 The
Conference Committee Report on Senate Bill No. 1495 and House Bill No. 10452,
having theretofore been approved by the House of Representatives, the same was
likewise approved by the Senate on February 20, 1995,[22] inclusive of the dubious
formulation on appeals to the Supreme Court earlier discussed.
The Court is, therefore, of the considered opinion that ever since appeals from the
NLRC to the Supreme Court were eliminated, the legislative intendment was that
the special civil action of certiorari was and still is the proper vehicle for judicial
review of decisions of the NLRC. The use of the word appeal in relation thereto and
in the instances we have noted could have been a lapsus plumae because appeals
by certiorari and the original action for certiorari are both modes of judicial review
addressed to the appellate courts. The important distinction between them,
however, and with which the Court is particularly concerned here is that the special
civil action of certiorari is within the concurrent original jurisdiction of this Court and
the Court of Appeals;[23] whereas to indulge in the assumption that appeals by
certiorari to the Supreme Court are allowed would not subserve, but would subvert,
the intention of Congress as expressed in the sponsorship speech on Senate Bill No.
1495.
Incidentally, it was noted by the sponsor therein that some quarters were of the
opinion that recourse from the NLRC to the Court of Appeals as an initial step in the
process of judicial review would be circuitous and would prolong the proceedings.
On the contrary, as he commendably and realistically emphasized, that procedure
would be advantageous to the aggrieved party on this reasoning:
On the other hand, Mr. President, to allow these cases to be appealed to the Court
of Appeals would give litigants the advantage to have all the evidence on record be
reexamined and reweighed after which the findings of facts and conclusions of said
bodies are correspondingly affirmed, modified or reversed.
Under such guarantee, the Supreme Court can then apply strictly the axiom that
factual findings of the Court of Appeals are final and may not be reversed on appeal
to the Supreme Court. A perusal of the records will reveal appeals which are factual
in nature and may, therefore, be dismissed outright by minute resolutions.[24]
While we do not wish to intrude into the Congressional sphere on the matter of the
wisdom of a law, on this score we add the further observations that there is a
growing number of labor cases being elevated to this Court which, not being a trier
of fact, has at times been constrained to remand the case to the NLRC for
resolution of unclear or ambiguous factual findings; that the Court of Appeals is
procedurally equipped for that purpose, aside from the increased number of its
component divisions; and that there is undeniably an imperative need for
expeditious action on labor cases as a major aspect of constitutional protection to
labor.
Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed
appeals from the NLRC to the Supreme Court are interpreted and hereby declared
to mean and refer to petitions for certiorari under Rule 65. Consequently, all such
petitions should henceforth be initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts as the appropriate forum for
the relief desired.
Apropos to this directive that resort to the higher courts should be made in
accordance with their hierarchical order, this pronouncement in Santiago vs.
Vasquez, et al.[25] should be taken into account:
One final observation. We discern in the proceedings in this case a propensity on
the part of petitioner, and, for that matter, the same may be said of a number of
litigants who initiate recourses before us, to disregard the hierarchy of courts in our
judicial system by seeking relief directly from this Court despite the fact that the
same is available in the lower courts in the exercise of their original or concurrent
jurisdiction, or is even mandated by law to be sought therein. This practice must be
stopped, not only because of the imposition upon the precious time of this Court
but also because of the inevitable and resultant delay, intended or otherwise, in the
adjudication of the case which often has to be remanded or referred to the lower
court as the proper forum under the rules of procedure, or as better equipped to
resolve the issues since this Court is not a trier of facts. We, therefore, reiterate the
judicial policy that this Court will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts or where exceptional and
compelling circumstances justify availment of a remedy within and calling for the
exercise of our primary jurisdiction.
WHEREFORE, under the foregoing premises, the instant petition for certiorari is
hereby REMANDED, and all pertinent records thereof ordered to be FORWARDED, to
the Court of Appeals for appropriate action and disposition consistent with the views
and ruling herein set forth, without pronouncement as to costs.
SO ORDERED.

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G.R. No.

March 24, 2006

LIGHT RAIL TRANSIT AUTHORITY, vs. PERFECTO H. VENUS, JR.,

March 24, 2006

METRO TRANSIT ORGANIZATION, INC., vs.COURT OF APPEALS, PERFECTO

4. Nancy [C.] Ramos

7. Manuel A. Ferrer 250,534.78

10. Amador H. Policarpio 256,609.22

We agree with petitioner LRTA. Section 2 (1), Article IX B, 1987 Constitution,

Moreover, as noted by Secretary Benjamin E. Diokno, of the Department of Budget

G.R. No. 94372

June 21, 1991

SAMAHANG MANGGAGAWA NG RIZAL PARK and DOMINGO ENRIQUEZ vs.

Republic of the Philippines

therefore the employee is entitled to be reinstated in accordance with the mandate

April 22, 1991

BOY SCOUTS OF THE PHILIPPINES vs. NATIONAL LABOR RELATIONS

The events which led to such termination of services are as follows:

profit corporations, although its charter expressly envisages donations and

G.R. No. 78909

June 30, 1989

MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO,

Violations of labor standard laws;

Article 127 of the Code is hereby amended to read as follows:

Visitorial and enforcement powers.

Article 216 of the Code is hereby amended to read as follows:

DISTRIBUTION OF JURISDICTION OVER LABOR CASES

Labor standards cases where employer-employee relations no longer exist;

The following cases are certifiable to the Labor Arbiters:

labor standard cases where employer-employee relations no longer exist;

MOLE Policy Instructions No. 7 (undated) was likewise subsequently issued,

All Regional Directors

LABOR STANDARDS CASES

settlement, became immediately assignable to the Arbitration Branch for joint

ASSIGNMENT OF CASES TO LABOR ARBITERS

Labor Standards Cases.

Cases involving violation of labor standards laws where employer- employee

intricate questions of law are involved; or

Unfair labor practice cases;

Raymond Manija ( p.7, Rollo)

benefits, including legal interest, owing to an employee or person employed in

PEOPLES BROADCASTING (BOMBO RADYO PHILS., INC.) vs TINGA, THE

Management representative informed that complainant is a drama talent hired on a

The clause in cases where the relationship of employer-employee still exists

program employee hence entitled to all the benefits appurtenant thereto,[26] as

form of evidence is required to prove the existence of such employer-employee

of Assignment was accompanied by a Letter

under the judgment if subsequently affirmed.[40] The Deed of Assignment in the

G.R. No. 179652

PEOPLES BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.) vs. THE

The first portion of the question must be answered in the affirmative.

If the DOLE makes a finding that there is an existing employer-employee

[G.R. No. 124382. August 16, 1999]

PASTOR DIONISIO V. AUSTRIA, petitioner, vs. HON. NATIONAL LABOR

PHILIPPINE UNION MISSION CORPORATION OF THE SEVENTH-DAY

received a letter of dismissal[10] citing misappropriation of denominational funds,

the minister as an employee. It is purely secular and has no relation whatsoever

misconduct, gross and habitual neglect of duties, and commission of an offense

[G.R. No. 144767. March 21, 2002]

Petitioner states that he was Assistant General Manager for Finance/Administration

b) P500,000.00 as and for exemplary damages; plus and (sic)

a) Devices or schemes employed by or any acts of the board of directors, business

Petitioners argument is untenable. Even assuming that he was in fact appointed by