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Ramos vs Court of Appeals

GR No. 124354 December 29, 1999

Facts: Plaintiff Erlinda Ramos was, until the afternoon of June 17, 1985 a 47-year old robust woman.
Except for occasional complaints of discomfort due to pains allegedly caused by presence of a stone in
her gall bladder, she was as normal as any other woman. Married to Rogelio Ramos, an executive of
Philippine Long Distance Telephone Company (PLDT), she has three children whose names are Rommel,
Roy Roderick, and Ron Raymond. Because of the discomforts somehow interfered with her normal ways,
she sough professional advice. She was told to undergo an operation for the removal of a stone in her
gall bladder. She underwent series of examination which revealed that she was fit for the said surgery.
Through the intercession of a mutual friend, she and her husband met Dr. Osaka for the first time and she
was advised by Dr. Osaka to go under the operation called cholecystectomy and the same was agreed to
be scheduled on June 17,1985 at 9:00am at the Delos Santos Medical Center. Rogelio asked Dr. Osaka
to look for a good anesthesiologist to which the latter agreed to. A day before the scheduled operation,
she was admitted at the hospital and on the day of the operation, Erlinda’s sister was with her insider the
operating room. Dr. Osaka arrived at the hospital late, Dr. Guttierez, the anesthesiologist, started to
intubate Erlina when Herminda heard her say that intubating Erlinda is quite difficult and there were
complications. This prompt Dr. Osaka to order a call to another anesthesiologist, Dr. Caldron who
successfully intubated Erlina. The patient’s nails became bluish and the patient was placed in a
trendelenburg position. After the operation, Erlina was diagnosed to be suffering from diffuse cerebral
parenchymal damage and that the petitioner alleged that this was due to lack of oxygen supply to
Erlinda’s brain which resulted from the intubation.

Issue: Whether or not the doctors and the hospital are liable for damages against petitioner for the result
to Erlinda of the said operation.

Held: Yes. The private respondents were unable to disprove the presumption of negligence on their part
in the care of Erlinda and their negligence was the proximate case of her piteous condition.

Nevertheless, despite the fact that the scope of res ipsa liquitor has been measurably enlarged, it does
not automatically follow that it apply to all cases of medical negligence as to mechanically shift the burden
of proof to the defendant to show that he is not guilty of the ascribed negligence. Res ipsa liquitor is not a
rigid or ordinary doctrine to be perfunctorily used but a rule to be cautiously applied, depending upon the
circumstances of each case. It is generally restricted to situations in malpractice cases where a layman is
able to say, as a matter of common knowledge and observation, that the consequences of professional
care were not as such as would ordinarily have followed if due care had been exercised. A distinction
must be made between the failure to secure results, and the occurrence of something more unusual and
not ordinarily found if the service or treatment rendered followed the usual procedure of those skilled in
that particular practice. It must be conceded that the doctrine of res ipsa liquitor can have no application in
a suit against a physician or surgeon which involves the merits of a diagnosis or of a scientific treatment.

Scientific studies point out that intubation problems are responsible for 1/3 of deaths and serious injuries
associated with anesthesia. Nevertheless, 98% or the vast majority of difficult intubation may be
anticipated by performing a thorough evaluation of the patient’s airway prior to the operation. As stated
beforehand, respondent, Dra. Guttierez failed to observe the proper pre-operative protocol which could
have prevented this unfortunate incident. Had appropriate diligence and reasonable care been used in the
pre-operative evaluation, respondent physician could have been more prepared to meet the contingency
brought about by the perceived atomic variations in the patient’s neck and oral area; defects which could
have been easily overcome by a prior knowledge of those variations together with a change in technique.
In other words, an experienced anesthesiologist, adequately alerted by a thorough pre-operative
evaluation, would have had little difficulty going around the short neck and potruding teeth. Having failed
to observe common medical standards in pre-operative management and intubation, respondent Dra.
Guttierez negligence resulted in cerebral anoxia and eventual coma of Erlinda.
Professional Services Inc. vs Agana
GR No. 126297 January 31, 2007

Facts: On April 4, 1984, Natividad Agana was rushed to the Medical City General Hospital because of
difficulty of bowel movement and bloody anal discharge. After a series of medical examinations, Dr.
Miguel Ampil diagnosed her to be suffering from Cancer of the sigmoid. On April 11, 1984, Dr. Ampil
assisted by the medical staff of the Medical City Hospital performed an Anterior resection surgery on
Natividad. He found that the malignancy on her sigmoid area had spread on her left ovary, necessitating
the removal of certain portions of it. Thus, Dr. Ampil obtained the consent of Natividad’s husband, Enrique
Agana, to permit Dr. Juan Fuentes to perform hysterectomy on her. After Dr. Fuentes had completed the
hysterectomy, Dr. Ampil took over, completed the operation and closed the incision after searching for the
missing 2 gauzes as indicated by the assisting nurses but failed to locate it. After a couple of days,
Natividad complained of excruciating pains in her anal region but Dr. Ampil said it is a natural
consequence of the operation/surgery and recommended that she consult an oncologist to examine the
cancerous nodes which were not removed during the operation. Natividad and her husband went to the
US to seek further treatment and she was declared free from cancer. A piece of gauze portruding from
Natividad’s vagina was found by her daughter which was then removed by hand by Dr. Ampil and assured
that the pains will vanished. However, it didn’t. The pains intensified prompting Natividad to seek
treatment at the Polymedic General Hospital. While confined there, Dr. Ramon Guttierez detected the
presence of another foreign object in her vagina – a foul smelling gauze measuring 1.5 inches in width
which badly infected her vagina. A recto-vaginal fistula had forced stool to excrete through her vagina.
Another surgical operation was needed to remedy the damage.

Issue: Whether or not Dr. Ampil and Fuentes are liable for medical malpractice and the PSI for damages
due to the negligence of the said doctors.

Held: Yes. No. Yes. An operation requiring the placing of sponges in the incision is not complete until the
sponges are properly removed and it is settled that the leaving of sponges or other foreign substances in
the wound after the incision has been closed is at least prima facie negligence by the operating surgeon.
To put it simply, such act is considered so inconsistent with due care as to raise inference of negligence.
There are even legions of authorities to the effect that such act is negligence per se.

This is a clear case of medical malpractice or more appropriately, medical negligence. To successfully
pursue this kind of case, a patient must only prove that a health care provider either failed to do
something which a reasonably prudent health care provider would have done, or that he did something
that a reasonably prudent provider would not have done; and that failure or action caused injury to the
patient. Simply puts the elements are duty, breach, injury, and proximate causation. Dr. Ampil, as the lead
surgeon, had the duty to remove all foreign objects, such as gauzes, from Natividad’s body before closure
of the incision. When he failed to do so, it was his duty to inform Natividad about it. Dr. Ampil breached
both duties. Such breach caused injury to Natividad, necessitating her further examination by American
doctors and another surgery. That Dr. Ampil’s negligence is the proximate cause of Natividad’s injury
could be traced from his act of closing the incision despite the information given by the attending nurses
that 2 pieces of gauze were still missing. That they were later on extracted from Natividad’s vagina
established the causal link between Dr. Ampil’s negligence and the injury. And what further aggravated
such injury was his deliberate concealment of this missing gauzes from the knowledge of Natividad and
her family.

The requisites for the applicability of the doctrine of res ipsa liquitor are:

1. Occurrence of an injury;

2. The thing which caused the injury was under the control and management of the defendant;
3. The occurrence was such that in the ordinary course of things would not have happened if those
who had control or management used proper care, and;

4. The absence of explanation by the defendant

Of the foregoing, the most instrumental is the “Control and management of the thing which caused the

Under the “Captain of the ship” rule, the operating surgeon is the person in complete charge of the
surgery room and all personnel connected with the operation.

The knowledge of any of the staff of Medical City constitutes knowledge of PSI.

The doctrine of corporate responsibility, has the duty to see that it meets the standards of responsibilities
for the care of patients. Such duty includes the proper supervision of the members of its medical staff.
The hospital accordingly has the duty to make a reasonable effort to monitor and over see the treatment
prescribed and administered by the physician practicing in its premises.

Raul Locsin vs. PLDT

GR No. 185251, October 2, 2009

Facts: On November 1, 1990, respondent Philippine Long Distance Telephone Company (PLDT) and the
Security and Safety Corporation of the Philippines (SSCP) entered into a Security Services Agreement
(Agreement) whereby SSCP would provide armed security guards to PLDT to be assigned to its various
offices. Pursuant to such agreement, petitioners Raul Locsin and Eddie Tomaquin, among other security
guards, were posted at a PLDT office.

On August 30, 2001, respondent issued a Letter dated August 30, 2001 terminating the Agreement
effective October 1, 2001. Despite the termination of the Agreement, however, petitioners continued to
secure the premises of their assigned office. They were allegedly directed to remain at their post by
representatives of respondent. In support of their contention, petitioners provided the Labor Arbiter with
copies of petitioner Locsin’s pay slips for the period of January to September 2002.

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

The Labor Arbiter rendered a Decision finding PLDT liable for illegal dismissal. It was explained in the
Decision that petitioners were found to be employees of PLDT and not of SSCP. Such conclusion was
arrived at with the factual finding that petitioners continued to serve as guards of

PLDT’s offices. As such employees, petitioners were entitled to substantive and procedural due process
before termination of employment.

Is there employer-employee relationship?


Yes. From the foregoing circumstances, reason dictates that we conclude that petitioners remained at
their post under the instructions of respondent. We can further conclude that respondent dictated upon
petitioners that the latter perform their regular duties to secure the premises during operating hours. This,
to our mind and under the circumstances, is sufficient to establish the existence of an employer-employee

To reiterate, while respondent and SSCP no longer had any legal relationship with the termination of the
Agreement, petitioners remained at their post securing the premises of respondent while receiving their
salaries, allegedly from SSCP. Clearly, such a situation makes no sense, and the denials proffered by
respondent do not shed any light to the situation. It is but reasonable to conclude that, with the behest
and, presumably, directive of respondent, petitioners continued with their services. Evidently, such are
indicia of control that respondent exercised over petitioners.

Evidently, respondent having the power of control over petitioners must be considered as

petitioners’ employer––

from the termination of the Agreement onwards


as this was the only time that any evidence of control was exhibited by respondent over petitioners and in
light of our ruling in Abella. Thus, as aptly declared by the NLRC, petitioners were entitled to the rights
and benefits of employees of respondent, including due process requirements in the termination of their

Both the Labor Arbiter and NLRC found that respondent did not observe such due process requirements.
Having failed to do so, respondent is guilty of illegal dismissal


G.R. No. 184202, January 26, 2011


Respondent Jose Luis Inton was a grade 3 student at Aquinas School while Respondent Yamyamin was
a religion teacher at said school. Yamyamin caught Luis misbehaving in class twice, going over to his
classmate instead of copying what was written on the blackboard. She allegedly kicked him in the legs
and shoved his head on the classmate's seat.

The parents of Luis filed an action for damages on behalf of their son against Yamyamin and Aquinas

With regard to the action for damages, the Intons sought to recover actual, moral, and exemplary
damages, as well as attorneys fees, for the hurt that Jose Luis and his mother Victoria suffered. The RTC
dismissed Victorias personal claims but ruled in Jose Luis favor, holding Yamyamin liable to him for moral
damages of P25,000.00, exemplary damages of P25,000.00, and attorneys fees of P10,000.00 plus the
costs of suit.

Not satisfied, the Intons elevated the case to the Court of Appeals and they asked it to increase the award
of damages and to hold Aquinas solidarily liable with Yamyamin. Finding that an employer-employee
relation existed between Aquinas and Yamyamin, the CA found them solidarily liable to Jose Luis.

ISSUE: Whether the CA erred in holding Aquinas solidarily liable with Yamyamin for the damages
awarded to Jose Luis.

HELD: The petition is meritorious.

LABOR LAW - Employer-Employee relationship

In this case, the school directress testified that Aquinas had an agreement with a congregation of sisters
under which, in order to fulfill its ministry, the congregation would send religion teachers to Aquinas to
provide catechesis to its students. Aquinas insists that it was not the school but Yamyamins religious
congregation that chose her for the task of catechizing the schools grade three students, much like the
way bishops designate the catechists who would teach religion in public schools. Under the
circumstances, it was quite evident that Aquinas did not have control over Yamyamins teaching methods.
Consequently, it was error for the CA to hold Aquinas solidarily liable with Yamyamin.

Of course, Aquinas still had the responsibility of taking steps to ensure that only qualified outside
catechists are allowed to teach its young students. In this regard, it cannot be said that Aquinas took no
steps to avoid the occurrence of improper conduct towards the students by their religion teacher.
First, Yamyamins transcript of records, certificates, and diplomas showed that she was qualified to teach

Second, there is no question that Aquinas ascertained that Yamyamin came from a legitimate religious
congregation of sisters and that, given her Christian training, the school had reason to assume that she
would behave properly towards the students.

Third, the school gave Yamyamin a copy of the schools Administrative Faculty Staff Manual that set the
standards for handling students. It also required her to attend a teaching orientation before she was
allowed to teach beginning that June of 1998.

Fourth, the school pre-approved the content of the course she was to teach to ensure that she was really
catechizing the students.

And fifth, the school had a program for subjecting Yamyamin to classroom evaluation. Unfortunately, since
she was new and it was just the start of the school year, Aquinas did not have sufficient opportunity to
observe her methods. At any rate, it acted promptly to relieve her of her assignment as soon as the
school learned of the incident. It cannot be said that Aquinas was guilty of outright neglect.



Respondent Asiapro Cooperative is composed of owners-members with primary objectives of providing

them savings and credit facilities and livelihood services. In discharge of said objectives, Asiapro entered
into several service contracts with Stanfilco. Sometime later, the cooperative owners-members requested
Stanfilco’s help in registering them with SSS and remitting their contributions. Petitioner SSS informed
Asiapro that being actually a manpower contractor supplying employees to Stanfilco, it must be the one to
register itself with SSS as an employer and remit the contributions. Respondent continuously ignoring the
demand of SSS the latter filed before the SSC. Asiapro alleges that there exists no employer-employee
relationship between it and its owners-members. SSC ruled in favor of SSS. On appeal, CA reversed the


Whether or not there is employer-employee relationship between Asiapro and its owners-members.

Ruling: YES.
In determining the existence of an employer-employee relationship, the following elements are
considered: (1) the selection and engagement of the workers; (2) the payment of wages by whatever
means; (3) the power of dismissal; and (4) the power to control the worker‘s conduct, with the latter
assuming primacy in the overall consideration. All the aforesaid elements are present in this case.

First. It is expressly provided in the Service Contracts that it is the respondent cooperative which has the
exclusive discretion in the selection and engagement of the owners-members as well as its team leaders
who will be assigned at Stanfilco.

Second. It cannot be doubted then that those stipends or shares in the service surplus are indeed wages,
because these are given to the owners-members as compensation in rendering services to respondent
cooperative‘s client, Stanfilco.

Third. It is also stated in the above-mentioned Service Contracts that it is the respondent cooperative
which has the power to investigate, discipline and remove the owners-members and its team leaders who
were rendering services at Stanfilco.

Fourth. In the case at bar, it is the respondent cooperative which has the sole control over the manner
and means of performing the services under the Service Contracts with Stanfilco as well as the means
and methods of work. Also, the respondent cooperative is solely and entirely responsible for its owners-
members, team leaders and other representatives at Stanfilco. All these clearly prove that, indeed, there
is an employer-employee relationship between the respondent cooperative and its owners-members.


G.R. No.192084 : September 14, 2011


Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the PBA as
referees. During the leadership of Commissioner Emilio Bernardino, they were made to sign contracts on
a year-to-year basis. During the term of Commissioner Eala, however, changes were made on the terms
of their employment.

Complainants were not illegally dismissed because they were not employees of the PBA. Their respective
contracts of retainer were simply not renewed. PBA had the prerogative of whether or not to renew their
contracts, which they knew were fixed.\

The Labor Arbiter declared petitioner an employee whose dismissal by respondents was illegal.Tthe
NLRC affirmed the Labor Arbiter's judgment. The Court of Appeals, which overturned the decisions of the
NLRC and Labor Arbiter. The Court of Appeals found petitioner an independent contractor since
respondents did not exercise any form of control over the means and methods by which petitioner
performed his work as a basketball referee.


Whether petitioner is an employee of respondents, which in turn determines whether petitioner was
illegally dismissed.

HELD: The petitioners are not employees of respondents.


The existence of an employer-employee relationship is ultimately a question of fact. As a general rule,

factual issues are beyond the province of this Court. However, this rule admits of exceptions, one of which
is where there are conflicting findings of fact between the Court of Appeals, on one hand, and the NLRC
and Labor Arbiter, on the other, such as in the present case.

To determine the existence of an employer-employee relationship, case law has consistently applied the
four-fold test, to wit:

(a) the selection and engagement of the employee;

(b) the payment of wages;

(c) the power of dismissal; and

(d) the employer's power to control the employee on the means and methods by which the work is

The so-called"control test"is the most important indicator of the presence or absence of an employer-
employee relationship.

The fact that PBA repeatedly hired petitioner does not by itself prove that petitioner is an employee of the
former. For a hired party to be considered an employee, the hiring party must have control over the
means and methods by which the hired party is to perform his work, which is absent in this case. The
continuous rehiring by PBA of petitioner simply signifies the renewal of the contract between PBA and
petitioner, and highlights the satisfactory services rendered by petitioner warranting such contract
renewal. Conversely, if PBA decides to discontinue petitioner's services at the end of the term fixed in the
contract, whether for unsatisfactory services, or violation of the terms and conditions of the contract, or for
whatever other reason, the same merely results in the non-renewal of the contract, as in the present
case. The non-renewal of the contract between the parties does not constitute illegal dismissal of
petitioner by respondents.
Wilhelmina Orozco vs Court of Appeals

G.R. No. 155207 August 13, 2008

In March 1990, Wilhelmina Orozco was hired as a writer by the Philippine Daily Inquirer (PDI). She was
the columnist of “Feminist Reflections” under the Lifestyle section of the publication. She writes on a
weekly basis and on a per article basis (P250-300/article).

In 1991, Leticia Magsanoc as the editor-in-chief sought to improve the Lifestyle section of the paper. She
said there were too many Lifestyle writers and that it was time to reduce the number of writers. Orozco’s
column was eventually dropped.

Orozco filed for a case for Illegal Dismissal against PDI and Magsanoc. Orozco won in the Labor Arbiter
where the arbiter ruled that there exists an employer-employee relationship between PDI and Orozco.

The case eventually reached the Court of Appeals where the CA ruled that there is no such relationship.

Orozco insists that by applying the four-fold test, it can be seen that she is an employee of PDI; Orozco
insists that PDI had been exercising the power of control over her because:

a) PDI provides the guidelines as to what her article content should be;

b) PDI sets deadlines as to when Orozco must submit her article/s;

c) PDI controls the number of articles to be submitted by Orozco;

d) PDI requires a certain discipline from their writers so as to maintain their readership.

ISSUE: Whether or not a newspaper columnist is an employee of the newspaper which publishes the

HELD: No. The type of control being argued by Orozco is not the type of control contemplated under the
four fold test principle in labor law. The Supreme Court emphasized: The main determinant to test control
is whether the rules set by the employer are meant to control not just the results of the work but also the
means and method to be used by the hired party in order to achieve such results.
In this case, the “control” exercised by PDI over Orozco, as mentioned earlier, is not that “control”
contemplated under the four fold test. In fact, such standards set by PDI is merely incidental or inherent in
the newspaper business and is not an exercise of control over Orozco.

Orozco has not shown that PDI, acting through its editors, dictated how she was to write or produce her
articles each week. There were no restraints on her creativity; Orozco was free to write her column in the
manner and style she was accustomed to and to use whatever research method she deemed suitable for
her purpose. The apparent limitation that she had to write only on subjects that befitted the Lifestyle
section did not translate to control, but was simply a logical consequence of the fact that her column
appeared in that section and therefore had to cater to the preference of the readers of that section.


G.R. No. 189255, June 17, 2015

PETITIONER Jesus G. Reyes filed a complaint for illegal dismissal against respondents Glaucoma
Research Foundation, Inc., Eye Referral Center and Manuel B. Agulto with the National Labor Relations
Commission (NLRC). The Labor Arbiter (LA) dismissed his complaint for his failure to establish that the
elements of employer-employee relationship existed between him and respondents. The NLRC reversed
and set aside the LA decision. It declared petitioner as respondents’ employee and found him illegally
dismissed from the service. The Court of Appeals (CA) annulled and set aside the judgment of the NLRC
and reinstated the decision of the LA. Petitioner elevated his case to the Supreme Court. He contended
that respondents’ petition for certiorari filed with the CA should have been dismissed on the ground that it
was improperly verified because the jurat portion of the verification states only the community tax
certificate number of the affiant as evidence of her identity. He argued that under the 2004 Rules of
Notarial Practice, as amended by the Supreme Court Resolution, A.M. No. 02-8-13, dated Feb. 19, 2008,
a community tax certificate is not among those considered as competent evidence of identity.

Does this contention find merit?

Ruling: No. This Court has already ruled that competent evidence of identity is not required in cases
where the affiant is personally known to the notary public. Thus, in Jandoquile v. Revilla, Jr., A.C. No.
9514, April 10, 2013, 695 SCRA 356, this Court held that: If the notary public knows the affiants
personally, he need not require them to show their valid identification cards. This rule is supported by the
definition of a “jurat” under Section 6, Rule II of the 2004 Rules on Notarial Practice. A “jurat” refers to an
act in which an individual on a single occasion: (a) appears in person before the notary public and
presents an instrument or document; (b) is personally known to the notary public or identified by the
notary public through competent evidence of identity; (c) signs the instrument or document in the
presence of the notary; and (d) takes an oath or affirmation before the notary public as to such instrument
or document. Also, Section 2(b), Rule IV of the 2004 Rules on Notarial Practice provides as follows: SEC.
2. Prohibitions x x x A person shall not perform a notarial act if the person involved as signatory to the
instrument or document is not in the notary’s presence personally at the time of the notarization; and is
not personally known to the notary public or otherwise identified by the notary public through competent
evidence of identity as defined by these Rules. Moreover, Rule II, Section 6 of the same Rules states that:
SEC 6. Jurat. - “Jurat” refers to an act in which an individual on a single occasion: appears in person
before the notary public and presents an instrument or document; is personally known to the notary public
or identified by the notary public through competent evidence of identity as defined by these Rules; signs
the instrument or document in the presence of the notary; and takes an oath or affirmation before the
notary public as to such instrument or document. In legal hermeneutics, “or” is a disjunctive that
expresses an alternative or gives a choice of one among two or more things. The word signifies
disassociation and independence of one thing from another thing in an enumeration. Thus, as earlier
stated, if the affiant is personally known to the notary public, the latter need not require the former to show
evidence of identity as required under the 2004 Rules on Notarial Practice, as amended. Applying the
above rule to the instant case, it is undisputed that the attorney-in-fact of respondents who executed the
verification and certificate against forum shopping, which was attached to respondents’ petition filed with
the CA, is personally known to the notary public before whom the documents were acknowledged. Both
attorney-in-fact and the notary public hold office at respondents’ place of business and the latter is also
the legal counsel of respondents

Halagueña, et al. vs PAL

GR No. 172013 October 2, 2009


Petitioners were employed as flight attendants of respondent on different dates prior to November 1996.
They are members of FASAP union exclusive bargaining organization of the flightattendants, flight
stewards and pursers. On July 2001, respondent and FASAP entered into a CBA incorporating the terms
and conditions of their agreement for the years 2000 to 2005 (compulsory retirement of 55 for female and
60 for males).

In July 2003, petitioner and several female cabin crews, in a letter, manifested that the provision in CBA
on compulsory retirement is discriminatory. On July 2004, petitioners filed a Special Civil Action for
Declaratory Relief with issuanceof TRO with the RTC Makati. The RTC issued a TRO. After the denial of
the respondent on itsmotion for reconsideration for the TRO, it filed a Petition with the CA. CA granted
respondent’s petition and ordered lower court to dismiss the case. Hence, this petition.


Whether or not the regular courts has jurisdiction over the case.


Yes. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC.
Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals.

Not every controversy or money claim by an employee against the employer or vice-versa is within the
exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the employer-
employee relationship is merely incidental and the cause of action precedes from a different source of
obligation is within the exclusive jurisdiction of the regular court.

Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals.The said issue cannot
be resolved solely by applying the Labor Code. Rather, it requires the application of the Constitution, labor
statutes, law on contracts and the Convention on the Elimination of All Forms of Discrimination Against
Women, and the power to apply and interpret the constitution and CEDAW is within the jurisdiction of trial
courts, a court of general jurisdiction. In Georg Grotjahn GMBH & Co. v. Isnani, this Court held that not
every dispute between an employer and employee involves matters that only labor arbiters and the NLRC
can resolve in the exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters
and the NLRC under Article 217 of the Labor Code is limited to dispute arising from an employer-
employee relationship which can only be resolved by reference to the Labor Code other labor statutes, or
their collective bargaining agreement.


GR196539 October 10, 2012

FACTS: Portillo was an employee of respondent for ten years. In her thirteenth year, she resigned as she
intended to engage in the business of rice dealership. Upon her retirement, she was reminded of the
“Goodwill Clause” in which she is prevented, within three 3 from her resignation, to engage
directly or indirectly in an employment in which Lietz Inc. is engaged in. Subsequently, respondent found
out that Portillo was hired by Ed Keller Philippines, a purported competitor of respondent. Meanwhile,
petitioner’s demands for the payment of her remaining salaries and commissions from Lietz went
unheeded. Lietz raised the defense of legal compensation wherein Portillo’s money claims be
offset against her liability to Lietz for liquidated damages for Portillo’s alleged breach of the
“Goodwill Clause” when she employed with Ed Keller Philippines.

ISSUE: W/N Portillo’s money claims for unpaid salaries may be offset against respondents’ claim for
liquidated damages.

HELD: The “Goodwill Clause” in this case is likewise a postemployment issue should brook no argument.
There is no dispute as to the cessation of Portillo’s employment with Lietz Inc. She simply claims her
unpaid salaries and commissions, which Lietz Inc. does not contest. At that juncture, Portillo was no
longer an employee of Lietz Inc.24 The “Goodwill Clause” or the “Non-Compete Clause” is a
contractual undertaking effective after the cessation of the employment relationship between the
parties. In accordance with jurisprudence, breach of the undertaking is a civil law dispute, not a labor law
case. It is clear, therefore, that while Portillo’s claim for unpaid salaries is a money claim that arises out of
or in connection with an employer-employee relationship, Lietz Inc.’s claim against Portillo for violation of
the goodwill clause is a money claim based on an act done after the cessation of the employment
relationship. And, while the jurisdiction over Portillo’s claim is vested in the labor arbiter, the jurisdiction
over Lietz Inc.’s claim rests on the regular courts. The difference in the nature of the credits that one has
against the other, conversely, the nature of the debt one owes another, which difference in turn results in
the difference of the forum where the different credits can be enforced, prevents the application of
compensation. Simply, the labor tribunal in an employee’s claim for unpaid wages is without authority to
allow the compensation of such claims against the post-employment claim of the former employer for
breach of a postemployment condition. The labor tribunal does not have jurisdiction over the civil case of
breach of contract. There is no causal connection between the petitioner employees’ claim for unpaid
wages and the respondent employers’ claim for damages for the alleged “Goodwill Clause” violation.
Portillo’s claim for unpaid salaries did not have anything to do with her alleged violation of the
employment contract as, in fact, her separation from employment is not “rooted”

in the alleged contractual violation. She resigned from her employment. She was not dismissed. Portillo’s
entitlement to the unpaid salaries is not even contested. Indeed, Lietz Inc.’s argument about legal
compensation necessarily admits that it owes the money claimed by Portillo
Emer Milan, et. al. vs. NLRC

G.R. No. 202961, February 4, 2015

PETITIONERS are employees of respondent Solid Mills, Inc. They are represented by the National
Federation of Labor Unions (NAFLU), their collective bargaining agent. As Solid Mills employees, they
and their families were allowed to occupy SMI Village, a property owned by Solid Mills. In September
2003, petitioners were informed that effective Oct. 10, 2003, Solid Mills would cease its operations due to
serious business losses. NAFLU recognized Solid Mills closure due to serious business losses in the
memorandum of agreement dated Sept. 1, 2003. The memorandum of agreement provided for Solid Mills
grant of separation pay less accountabilities, accrued sick leave benefits, vacation leave benefits, and
13th month pay to the employees. Later, Solid Mills sent petitioners individual notices to vacate SMI
Village. They were made to sign a memorandum of agreement with release and quitclaim before their
benefits would be released. Petitioners refused to sign the documents and instead filed complaints before
the Labor Arbiter alleging non-payment of their benefits. In defense, Solid Mills argued that petitioners’
complaint was premature because they had not vacated its property.

Does this defense find merit?

Ruling: Yes. “Accountability,” in its ordinary sense, means obligation or debt. The ordinary meaning of the
term “accountability” does not limit the definition of accountability to those incurred in the worksite. As long
as the debt or obligation was incurred by virtue of the employer-employee relationship, generally, it shall
be included in the employee’s accountabilities that are subject to clearance procedures. It may be true
that not all employees enjoyed the privilege of staying in respondent Solid Mills’ property. However, this
alone does not imply that this privilege when enjoyed was not a result of the employer-employee
relationship. Those who did avail of the privilege were employees of respondent Solid Mills. Petitioners’
possession should, therefore, be included in the term “accountability.” Accountabilities of employees are
personal. They need not be uniform among all employees in order to be included in accountabilities
incurred by virtue of an employer-employee relationship. Petitioners do not categorically deny respondent
Solid Mills’ ownership of the property, and they do not claim superior right to it. What can be gathered
from the findings of the Labor Arbiter, National Labor Relations Commission, and the Court of Appeals is
that respondent Solid Mills allowed the use of its property for the benefit of petitioners as its employees.
Petitioners were merely allowed to possess and use it out of respondent Solid Mills’ liberality. The
employer may, therefore, demand the property at will. The return of the property’s possession became an
obligation or liability on the part of the employees when the employer-employee relationship ceased.
Thus, respondent Solid Mills has the right to withhold petitioners’ wages and benefits because of this
existing debt or liability. The law does not sanction a situation where employees who do not even assert
any claim over the employer’s property are allowed to take all the benefits out of their employment while
they simultaneously withhold possession of their employer’s property for no rightful reason. x x x
Withholding of payment by the employer does not mean that the employer may renege on its obligation to
pay employees their wages, termination payments, and due benefits. The employees’ benefits are also
not being reduced. It is only subjected to the condition that the employees return properties properly
belonging to the employer. This is only consistent with the equitable principle that “no one shall be
unjustly enriched or benefited at the expense of another.”


G.R. No. 192105, December 09, 2013

Facts: Respondent Mekeni is the employer of petitioner Locsin. When the latter was hired he was offered
a car plan, under which ½ of the cost of the vehicle is to be paid by the company and the other ½ to be
deducted from petitioner’s salary. Petitioner began working on March 17, 2004, the car furnished to him is
a used Honda Civic valued at P280,000. Petitioner paid for his 50% share through salary deductions of
P5,000 each month.

Subsequently, petitioner resigned effective February 25, 2006. By then, a total of P112,500 had been
deducted from his monthly salary and applied as part of the employee’s share in the car plan. In his
resignation letter, petitioner made an offer to purchase his service vehicle by paying the outstanding
balance thereon. However, the parties could not agree on the terms of the proposed purchase. Petitioner
thus returned the vehicle to Mekeni on May 2, 2006.

Petitioner made personal and written follow-ups but to no avail. Mekeni even replied that the company car
plan benefit applied only to employees who have been with the company for five years. On May 3, 2007,
petitioner filed against Mekeni a complaint for recovery of monetary claims and recovery of monthly salary
deductions which were earmarked for his cost-sharing in the car plan with the NLRC.

Issue: WON the petitioner is entitled to refund of all amounts applied to the cost of the service vehicle
under the car plan.

Held: YES, but only to his monthly contributions in the car plan agreement.

From the evidence on record, it is seen that the Mekeni car plan offered to petitioner was subject to no
other term or condition than that Mekeni shall cover one-half of its value, and petitioner shall in turn pay
the other half through deductions from his monthly salary. Mekeni has not shown, by documentary
evidence or otherwise, that there are other terms and conditions governing its car plan agreement with
petitioner. There is no evidence to suggest that if petitioner failed to completely cover one-half of the cost
of the vehicle, then all the deductions from his salary going to the cost of the vehicle will be treated as
rentals for his use thereof while working with Mekeni, and shall not be refunded. Indeed, there is no such
stipulation or arrangement between them. Thus, the CA’s reliance on Elisco Tool is without basis, and its
conclusions arrived at in the questioned decision are manifestly mistaken. It was a patent error for the
appellate court to assume that, even in the absence of express stipulation, petitioner’s payments on the
car plan may be considered as rentals which need not be returned.

Indeed, the Court cannot allow that payments made on the car plan should be forfeited by Mekeni and
treated simply as rentals for petitioner’s use of the company service vehicle. Nor may they be retained by
it as purported loan payments, as it would have this Court believe. In the first place, there is precisely no
stipulation to such effect in their agreement. Secondly, it may not be said that the car plan arrangement
between the parties was a benefit that the petitioner enjoyed; on the contrary, it was an absolute
necessity in Mekeni’s business operations, which benefited it to the fullest extent.

In light of the foregoing, it is unfair to deny petitioner a refund of all his contributions to the car plan. Under
Article 22 of the Civil Code, “every person who through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense of the latter without just or legal
ground, shall return the same to him.” Article 2142 of the same Code likewise clarifies that there are
certain lawful, voluntary and unilateral acts which give rise to the juridical relation of quasi-contract, to the
end that no one shall be unjustly enriched or benefited at the expense of another. In the absence of
specific terms and conditions governing the car plan arrangement between the petitioner and Mekeni, a
quasi-contractual relation was created between them. Consequently, Mekeni may not enrich itself by
charging petitioner for the use of its vehicle which is otherwise absolutely necessary to the full and
effective promotion of its business. It may not, under the claim that petitioner’s payments constitute rents
for the use of the company vehicle, refuse to refund what petitioner had paid, for the reasons that the car
plan did not carry such a condition; the subject vehicle is an old car that is substantially, if not fully,
depreciated; the car plan arrangement benefited Mekeni for the most part; and any personal benefit
obtained by petitioner from using the vehicle was merely incidental.

Conversely, petitioner cannot recover the monetary value of Mekeni’s counterpart contribution to the cost
of the vehicle; that is not property or money that belongs to him, nor was it intended to be given to him in
lieu of the car plan.


G.R. No. 183952, 9 September 2013

Although the practice of law is not a business, an attorney is entitled to be properly compensated for the
professional services rendered for the client, who is bound by her express agreement to duly compensate
the attorney. The client may not deny her attorney such just compensation.

Malvar filed a complaint for illegal suspension and illegal dismissal against KFPI and Bautista in the
National Labor Relations Commission (NLRC). The Labor Arbiter found and declared her suspension and
dismissal illegal, and ordered her reinstatement, and the payment of her full backwages, inclusive of

allowances and other benefits, plus attorney’s

fees. NLRC and CA affirmed the decision of the Labor Arbiter. After the judgment in her favor became
final and executory Malvar moved for the issuance of a writ of execution but the execution failed due to
questionable computation of the award. Malvar requested for the 2


issuance of the writ of execution and was partially complied with but with protest on the part of Kraft by
filing a TRO for further execution since the computation is incorrect. CA ruled in favor of Kraft. Thus,
Malvar appealed. While her appeal was pending in this Court, Malvar and Kraft entered into a
compromise agreement. Thereafter, Malvar filed an undated Motion to Dismiss/Withdraw Case, praying
that the appeal be immediately dismissed/withdrawn in view of the compromise agreement, and that the
case be considered closed and terminated. Before the

Court could act on Malvar’s Motion to Dismiss/Withdraw Case, the Court received a so

called Motion for Intervention to Protect Attorney’s Rights from Malvar’s counsel. The counsel indicated
that Malvar’s precipitate action had baffled, shocked and even embarrassed

the Intervenor/counsel, because it had done everything legally possible to serve and protect

Malvar’s interest.


Can the Moti

on for Intervention to protect attorney’s rights prosper?



A client has an undoubted right to settle her litigation without the intervention of the attorney, for the
former is generally conceded to have exclusive control over the subject matter of the litigation and may at
any time, if acting in good faith, settle and adjust

the cause of action out of court before judgment, even without the attorney’s intervention. It

is important for the client to show, however, that the compromise agreement does not adversely affect
third persons who are not parties to the agreement. By such, a client has the absolute right to terminate
the attorney-client relationship at any time with or without cause. But this right of the client is not unlimited
because good faith is required in terminating the relationship. It is basic that an attorney is entitled to have
and to receive a just and reasonable compensation for services performed at the special instance and
request of his client. The attorney who has acted in good faith and honesty in representing and serving
the interests of the client should be reasonably compensated for his service.



MICHAEL MAXIMO R. AMURAO III G.R. No. 167225, 22 October 2014, FIRST DIVISION, (Bersamin,


Where the party has voluntarily made the waiver, with a full understanding of its terms as well as its
consequences, and the consideration for the quitclaim is credible and reasonable, the transaction must be
recognized as a valid and binding undertaking, and may not later be disowned simply because of a
change of mind. A waiver is essentially contractual.

Radio Mindanao Network, Inc. (RMN) hired Michael Maximo R. Amurao III (Amurao) as a radio
broadcaster for its DWKC-FM station and production manager for its metropolitan radio operations. To
meet the demand of the broadcasting industry, RMN decided to reformat and restructure the
programming of its DWKC-FM station. Amurao and other personnel were advised that their employment
would necessarily be affected because of the reformatting. RMN furnished Amurao a letter informing the
latter that his services are deemed terminated and he is entitled to a settlement pay of P311,922.00.
Amurao accepted the offer of RMN and executed an affidavit of release/quitclaim containing declarations
that he has no more claims, right or action of whatever nature against RMN, that the latter is released and
discharged from any and all claims and demands that maybe due to him and that he read and understood
the terms of his release and quitclaim and consented to such. After 5 months from the execution of the
quitclaim, Amurao filed a complaint against RMN for illegal dismissal with money claims before the NLRC.
Both the Labor Arbiter and NLRC held that the quitclaim is void for it was not voluntarily executed. The
Court of Appeals affirmed their decision.

Was the quitclaim executed by Amurao valid and binding?



The requisites for the validity of Michael’s quitclaim were satisfied.

Amurao acknowledged in his quitclaim that he had read and thoroughly understood the terms of his
quitclaim and signed it of his own volition. The settlement pay of P311,922.00 was credible and
reasonable considering that Michael did not even assail such amount as unconscionably low, or even
state that he was entitled to a higher amount. Amurao was required to sign the quitclaim as a condition to
the release of the settlement pay did not prove that its execution was coerced. Having agreed to part with
a substantial amount of money, RMN took steps to protect its interest and obtain its release from all
obligations once it paid Michael his settlement pay, which it did in this case.




561 SCRA 675 (2008)

A compromise agreement is valid as long as the consideration is reasonable and the employee signed the
waiver voluntarily, with a full understanding of what he was entering into.

Worked as a cook on aboard vessels plying overseas, Warlito E. Dumalaog was employed as a cook on
board vessels plying overseas. He filed a pro-forma complaint on March 4,2002 before the National Labor
Relations Commission (NLRC) against J-Phil Marine, Inc., its then president Jesus Candava, and its
foreign principal Norman Shipping Services.

The Labor Arbiter dismissed the complaint for lack of merit. On appeal, the NLRC reversed the decision of
the Labor Arbiter. The Court of Appeals affirmed the dismissal for failure to attach to the petition all
material documents and for defective verification and certification. Consequently, a petition was filed
before the Court of Appeals.

While the case was pending in the Supreme Court, the respondent entered into a compromise agreement
and signed Quitclaims and Release. The same has been subscribed and sworn to before the Labor
Arbiter. Accordingly, the case was dismissed.

Whether or not the compromise agreement entered into by the respondent, without his counsel, is valid


A compromise agreement is valid as long as the consideration is reasonable and the employee signed the
waiver voluntarily, with a full understanding of what he was entering into. All that is required for the
compromise to be deemed voluntarily entered into is personal and specific individual consent. Thus,
contrary to Dumalaoag’s contention, the employee’s counsel need not be present at the time of the
signing of the compromise agreement.

The relation of attorney and client is in many respects one of agency, and the general rules of agency
apply to such relation. The acts of an agent are deemed the acts of the principal only if the agent acts
within the scope of his authority. The circumstances of this case indicate that Dumalaoag’s counsel is
acting beyond the scope of his authority in questioning the compromise agreement.

ROPE FACTORY, INC., defendants, ELIZALDE ROPE WORKERS’ UNION, defendant-appellant.

GRN L-25246 September 12, 1974


Benjamin Victoriano (Appellee), a member of the religious sect known as the “Iglesia ni Cristo”, had been
in the employ of the Elizalde Rope Factory, Inc. (Company) since 1958. He was a member of the Elizalde
Rope Workers’ Union (Union) which had with the Company a CBA containing a closed shop provision
which reads as follows: “Membership in the Union shall be required as a condition of employment for all
permanent employees workers covered by this Agreement.”

Under Sec 4(a), par 4, of RA 975, prior to its amendment by RA 3350, the employer was not precluded
“from making an agreement with a labor organization to require as a condition of employment
membership therein, if such labor organization is the representative of the employees.” On June 18, 1961,
however, RA 3350 was enacted, introducing an amendment to par 4 subsection (a) of sec 4 of RA 875, as
follows: “xxx but such agreement shall not cover members of any religious sects which prohibit affiliation
of their members in any such labor organization”.

Being a member of a religious sect that prohibits the affiliation of its members with any labor organization,
Appellee presented his resignation to appellant Union. The Union wrote a formal letter to the Company
asking the latter to separate Appellee from the service because he was resigning from the Union as a
member. The Company in turn notified Appellee and his counsel that unless the Appellee could achieve a
satisfactory arrangement with the Union, the Company would be constrained to dismiss him from the

Appellee filed an action for injunction to enjoin the Company and the Union from dismissing Appellee. The
Union invoked the “union security clause” of the CBA and assailed the constitutionality of RA 3350 and
contends it discriminatorily favors those religious sects which ban their members from joining labor


Whether Appellee has the freedom of choice in joining the union or not.


YES. The Constitution and RA 875 recognize freedom of association. Sec 1 (6) of Art III of the
Constitution of 1935, as well as Sec 7 of Art IV of the Constitution of 1973, provide that the right to form
associations or societies for purposes not contrary to law shall not be abridged. Section 3 of RA 875
provides that employees shall have the right to self-organization and to form, join of assist labor
organizations of their own choosing for the purpose of collective bargaining and to engage in concerted
activities for the purpose of collective bargaining and other mutual aid or protection. What the Constitution
and the Industrial Peace Act recognize and guarantee is the “right” to form or join associations. A right
comprehends at least two broad notions, namely: first, liberty or freedom, i.e., the absence of legal
restraint, whereby an employee may act for himself without being prevented by law; and second, power,
whereby an employee may, as he pleases, join or refrain from joining an association. It is, therefore, the
employee who should decide for himself whether he should join or not an association; and should he
choose to join, he himself makes up his mind as to which association he would join; and even after he has
joined, he still retains the liberty and the power to leave and cancel his membership with said organization
at any time. The right to join a union includes the right to abstain from joining any union. The law does not
enjoin an employee to sign up with any association.

The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is,
however, limited. The legal protection granted to such right to refrain from joining is withdrawn by
operation of law, where a labor union and an employer have agreed on a closed shop, by virtue of which
the employer may employ only members of the collective bargaining union, and the employees must
continue to be members of the union for the duration of the contract in order to keep their jobs. By virtue
of a closed shop agreement, before the enactment of RA 3350, if any person, regardless of his religious
beliefs, wishes to be employed or to keep his employment he must become a member of the collective
bargaining union. Hence, the right of said employee not to join the labor union is curtailed and withdrawn.

To that all-embracing coverage of the closed shop arrangement, RA No.3350 introduced an exception,
when it added to Section 4 (a) (4) of the Industrial Peace Act the following proviso: “but such agreement
shall not cover members of any religious sects which prohibit affiliation of their members in any such labor
organization”. Republic Act No. 3350 merely excludes ipso jure from the application and coverage of the
closed shop agreement the employees belonging to any religious sects which prohibit affiliation of their
members with any labor organization. What the exception provides is that members of said religious sects
cannot be compelled or coerced to join labor unions even when said unions have closed shop
agreements with the employers; that in spite of any closed shop agreement, members of said religious
sects cannot be refused employment or dismissed from their jobs on the sole ground that they are not
members of the collective bargaining union. It does not prohibit the members of said religious sects from
affiliating with labor unions. It still leaves to said members the liberty and the power to affiliate, or not to
affiliate, with labor unions. If, notwithstanding their religious beliefs, the members of said religious wets
prefer to sign up with the labor union, they can do so. If in deference and fealty to their religious faith, they
refuse to sign up, they can do so; the law does not coerce them to join; neither does the law prohibit them
from joining, and neither may the employer or labor union compel them to join.

The Company was partly absolved by law from the contractual obligation it had with the Union of
employing only Union members in permanent positions. It cannot be denied, therefore, that there was
indeed an impairment of said union security clause.

The prohibition to impair the obligation of contracts is not absolute and unqualified. The prohibition is
general. The prohibition is not to be read with literal exactness, for it prohibits unreasonable impairment
only. In spite of the constitutional prohibition, the State continues to possess authority to safeguard the
vital interests of its people. Legislation appropriate to safeguarding said interests may modify or abrogate
contracts already in effect. For not only are existing laws read into contracts in order to fix the obligations
as between the parties, but the reservation of essential attributes of sovereign power is also read into
contracts as a postulate of the legal order. The contract clause of the Constitution. must be not only in
harmony with, but also in subordination to, in appropriate instances, the reserved power of the state to
safeguard the vital interests of the people. This has special application to contracts regulating relations
between capital and labor which are not merely contractual, and said labor contracts, for being impressed
with public interest, must yield to the common good.

The purpose to be achieved by RA 3350 is to insure freedom of belief and religion, and to promote the
general welfare by preventing discrimination against those members of religious sects which prohibit their
members from joining labor unions, confirming thereby their natural, statutory and constitutional right to
work, the fruits of which work are usually the only means whereby they can maintain their own life and the
life of their dependents.

The individual employee, at various times in his working life, is confronted by two aggregates of power
collective labor, directed by a union, and collective capital, directed by management. The union, an
institution developed to organize labor into a collective force and thus protect the individual employee
from the power of collective capital, is, paradoxically, both the champion of employee rights, and a new
source of their frustration. Moreover, when the Union interacts with management, it produces yet a third
aggregate of group strength from which the individual also needs protection – the collective bargaining

The free exercise of religious profession or belief is superior to contract rights. In case of conflict, the
latter must yield to the former.
The purpose of RA 3350 is to serve the secular purpose of advancing the constitutional right to the free
exercise of religion, by averting that certain persons be refused work, or be dismissed from work, or be
dispossessed of their right to work and of being impeded to pursue a modest means of livelihood, by
reason of union security agreements. To help its citizens to find gainful employment whereby they can
make a living to support themselves and their families is a valid objective of the state. The Constitution
even mandated that “the State shall afford protection to labor, promote full employment and equality in
employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relation
between workers and employers.”

The primary effects of the exemption from closed shop agreements in favor of members of religious sects
that prohibit their members from affiliating with a labor organization, is the protection of said employees
against the aggregate force of the collective bargaining agreement, and relieving certain citizens of a
burden on their religious beliefs; and by eliminating to a certain extent economic insecurity due to
unemployment, which is a serious menace to the health, morals, and welfare of the people of the State,
the Act also promotes the well-being of society. It is our view that the exemption from the effects of closed
shop agreement does not directly advance, or diminish, the interests of any particular religion. Although
the exemption may benefit those who are members of religious sects that prohibit their members from
joining labor unions, the benefit upon the religious sects is merely incidental and indirect.

The purpose of RA 3350 was not to grant rights to labor unions. The rights of labor unions are amply
provided for in Republic Act No. 875 and the new Labor Code.

The Act does not require as a qualification, or condition, for joining any lawful association membership in
any particular religion or in any religious sect; neither does the Act require affiliation with a religious sect
that prohibits its members from joining a labor union as a condition or qualification for withdrawing from a
labor union. Joining or withdrawing from a labor union requires a positive act Republic Act No. 3350 only
exempts members with such religious affiliation from the coverage of closed shop agreements. So, under
this Act, a religious objector is not required to do a positive act-to exercise the right to join or to resign
from the union. He is exempted ipso jure without need of any positive act on his part.

WHEREFORE, the instant appeal is dismissed.



This case arose when the COA issued Resolution No. 99-011on August 19, 1999 ("the COA Resolution"),
with the subject "Defining the Commissions policy with respect to the audit of the Boy Scouts of the
Philippines." In its whereas clauses, the COA Resolution stated that the BSP was created as a public
corporation under Commonwealth Act No. 111, as amended by Presidential Decree No. 460 and Republic
Act No. 7278; that in Boy Scouts of the Philippines v. National Labor Relations Commission, the Supreme
Court ruled that the BSP, as constituted under its charter, was a "government-controlled corporation within
the meaning of Article IX(B)(2)(1) of the Constitution"; and that "the BSP is appropriately regarded as a
government instrumentality under the 1987 Administrative Code." The COA Resolution also cited its
constitutional mandate under Section 2(1), Article IX (D).Finally, the COA Resolution reads:

NOW THEREFORE, in consideration of the foregoing premises, the COMMISSION PROPER HAS
RESOLVED, AS IT DOES HEREBY RESOLVE,to conduct an annual financial audit of the Boy Scouts of
the Philippines in accordance with generally accepted auditing standards, and express an opinion on
whether the financial statements which include the Balance Sheet, the Income Statement and the
Statement of Cash Flows present fairly its financial position and results of operations.


BE IT RESOLVED FURTHERMORE, that for purposes of audit supervision,the Boy Scouts of the
Philippines shall be classified among the government corporations belonging to the Educational, Social,
Scientific, Civic and Research Sectorunder the Corporate Audit Office I, to be audited, similar to the
subsidiary corporations, by employing the team audit approach

ISSUE: Does COA have jurisdiction over BSP?


After looking at the legislative history of its amended charter and carefully studying the applicable laws
and the arguments of both parties, we find that the BSP is a public corporation and its funds are subject to
the COA's audit jurisdiction.

The BSP Charter (Commonwealth Act No. 111, approved on October 31, 1936), 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" created the BSP as a "public corporation"

There are three classes of juridical persons under Article 44 of the Civil Code and the BSP, as presently
constituted under Republic Act No. 7278,falls under the second classification.Article 44 reads:

Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2)Other corporations,institutions and entities for public interest or purpose created by law; their
personality begins as soon as they have been constituted according to law;
(3) Corporations, partnerships and associations forprivate interest or purposeto which the law grants a
juridical personality, separate and distinct from that of each shareholder, partner or member.

The BSP, which is a corporation created for a public interest or purpose, is subject to the law creating it
under Article 45 of the Civil Code, which provides:

Art. 45.Juridical persons mentioned in Nos. 1 and 2 of the preceding article are governed by the laws
creating or recognizing them.

Private corporations are regulated by laws of general application on the subject.

Partnerships and associations for private interest or purpose are governed by the provisions of this Code
concerning partnerships.

The purpose of the BSP as stated in its amended charter shows that it was created in order to implement
a State policy declared in Article II, Section 13 of the Constitution, which reads:

Section 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.

Evidently, the BSP, which was created by a special law to serve a public purpose in pursuit of a
constitutional mandate, comes within the class of "public corporations" defined by paragraph 2, Article 44
of the Civil Code and governed by the law which creates it, pursuant to Article 45 of the same Code.


Bank of the Philippine Islands v. BPI Employees Union Davao Chapter – Federation of Unions in BPI
Unibank, G.R. No. 164301, August 10, 2010.


Bangko Sentral ng Pilipinas approved the Articles of Merger executed by and between BPI, herein
petitioner, and Far East Bank and Trust Company (FEBTC) and was approved by the Securities and
Exchange Commission. The Articles of Merger and Plan of Merger did not contain any specific stipulation
with respect to the employment contracts of existing personnel of the non-surviving entity which is
FEBTC. Pursuant to the said Article and Plan of Merger, all the assets and liabilities of FEBTC were
transferred to and absorbed by BPI as the surviving corporation. FEBTC employees, including those in its
different branches across the country, were hired by petitioner as its own employees, with their status and
tenure recognized and salaries and benefits maintained.


Whether or not employees are ipso jure absorbed in a merger of the two corporations.


NO. [H]uman beings are never embraced in the term “assets and liabilities.”Moreover, BPI’s absorption of
former FEBTC employees was neither by operation of law nor by legal consequence of contract. There
was no government regulation or law that compelled the merger of the two banks or the absorption of the
employees of the dissolved corporation by the surviving corporation. Had there been such law or
regulation, the absorption of employees of the non-surviving entities of the merger would have been
mandatory on the surviving corporation. In the present case, the merger was voluntarily entered into by
both banks presumably for some mutually acceptable consideration. In fact, the Corporation Code does
not also mandate the absorption of the employees of the non-surviving corporation by the surviving
corporation in the case of a merger.

[The] Court cannot uphold the reasoning that the general stipulation regarding transfer of FEBTC assets
and liabilities to BPI as set forth in the Articles of Merger necessarily includes the transfer of all FEBTC
employees into the employ of BPI and neither BPI nor the FEBTC employees allegedly could do anything
about it. Even if it is so, it does not follow that the absorbed employees should not be subject to the terms
and conditions of employment obtaining in the surviving corporation.

Furthermore, [the] Court believes that it is contrary to public policy to declare the former FEBTC
employees as forming part of the assets or liabilities of FEBTC that were transferred and absorbed by BPI
in the Articles of Merger. Assets and liabilities, in this instance, should be deemed to refer only to property
rights and obligations of FEBTC and do not include the employment contracts of its personnel. A
corporation cannot unilaterally transfer its employees to another employer like chattel. Certainly, if BPI as
an employer had the right to choose who to retain among FEBTC’s employees, FEBTC employees had
the concomitant right to choose not to be absorbed by BPI. Even though FEBTC employees had no
choice or control over the merger of their employer with BPI, they had a choice whether or not they would
allow themselves to be absorbed by BPI. Certainly nothing prevented the FEBTC’s employees from
resigning or retiring and seeking employment elsewhere instead of going along with the proposed

Employment is a personal consensual contract and absorption by BPI of a former FEBTC employee
without the consent of the employee is in violation of an individual’s freedom to contract. It would have
been a different matter if there was an express provision in the articles of merger that as a condition for
the merger, BPI was being required to assume all the employment contracts of all existing FEBTC
employees with the conformity of the employees. In the absence of such a provision in the articles of
merger, then BPI clearly had the business management decision as to whether or not employ FEBTC’s
employees. FEBTC employees likewise retained the prerogative to allow themselves to be absorbed or
not; otherwise, that would be tantamount to involuntary servitude.

[Note: The decision as to absorption of employees upon merger is reversed in the Resolution of MR dated
October 19, 2011]


G.R. No. 101875. July 14, 1995


Petitioner Navarro, a typist of BUSCO SUGAR MILLING CO, went to visit Mercie Baylas, whom

he was courting, in the company’s ladies’ dormitory. Upon seeing him, Baylas ran towards her room but

lost her balance; petitioner overcame her, embraced her, put himself on top of her and started kissing her
until other employees responded to Baylas' flee for help. The company put Navarro under preventive
suspension because of the incident and he was meted out the penalty of dismissal upon the
recommendation of the investigator for violating the company's Code of Conduct against acts of
immorality and gross discourtesy to a co-employee inside company premises. The President of the
Mindanao Sugar Workers Union, for and in behalf of petitioner, and the Personnel Officer of the company
agreed to submit the case of petitioner to voluntary arbitration. Counsel for petitioner, during the initial
conference with the Voluntary Arbitrator, questioned whether the grievance procedure in the CBA before
bringing the case before the Voluntary Arbitrator had been followed. The parties, however, also agreed to
submit the case for decision based on their position papers. The Voluntary Arbitrator rendered a decision
dismissing petitioner from employment and holding that the company did not violate the provisions of the
grievance procedure under the CBA. Petitioner contends that the grievance procedure provided for in the
CBA was not followed; hence, the Voluntary Arbitrator exceeded his authority when he took cognizance of
the labor case. Petitioner also claims that he was denied due process of law because no hearing was
held and he was not given an opportunity to cross-examine the witnesses.


WON the case of petitioner should have been brought to the company’s grievance machine

ry prior to the Voluntary Arbitrator.


It is the policy of the State to promote voluntary arbitration as a mode of settling labor disputes. The
instant case is not a grievance that must be submitted to the grievance machinery. What are subject of
the grievance procedure for adjustment and resolution are grievances arising from the interpretation or
implementation of the CBA. The acts of petitioner involved a violation of the Code of Employee Discipline,
particularly the provision penalizing the immoral conduct of employees. Consequently, there was no
justification for petitioner to invoke the grievance machinery provisions of the Collective Bargaining
Agreement. Also, the case of petitioner was submitted to voluntary arbitration by agreement of the
president of the labor union to which petitioner belongs, and his employer, through its personnel officer.
Petitioner himself voluntarily submitted to the jurisdiction of the Voluntary Arbitrator when he, through his
counsel, filed his position paper with the Voluntary Arbitrator and even submitted additional documentary

Solidbank v. Gamier, et al.

G.R. No. 159460 : November 15, 2010


During the collective bargaining negotiations, some Union members staged a series of mass actions
against petitioner. Secretary Laguesma, assuming jurisdiction over the labor dispute, resolved all
economic and non-economic dismissing the unfair labor practice charge against Solidbank Corporation.

Dissatisfied with the Secretarys ruling, the Union officers and members decided to protest the same by
holding a rally infront of the Office of the Secretary of Labor and Employment in Intramuros, Manila,
simultaneous with the filing of their motion for reconsideration. As a result of the employees concerted
actions, Solidbanks business operations were paralyzed. The herein 129 individual respondents were
among the 199 employees who were terminated for their participation in the three-day work boycott and
protest action.

Respondents Gamier, Condevillamar, Arriola and De Guzman filed separate complaints for illegal
dismissal and were consolidated before Labor Arbiter Potenciano S. Cazares, Jr. Respondent Union
joined by the 129 dismissed employees filed a separate suit against petitioners for illegal dismissal, unfair
labor practice and damages assigned to Labor Arbiter Luis D. Flores.

Labor Arbiter Potenciano S. Cazares, Jr. dismissed the complaints of Gamier, Condevillamar, Arriola and
De Guzman. Labor Arbiter Luis D. Flores rendered a decision in favor of respondents Union and
employees. NLRCs Second Division rendered a Decision reversing the decision of Labor Arbiter Flores.
As to respondents appeal, the NLRCs Third Division reversed the decision of Labor Arbiter Cazares, Jr.

G.R. No. 159460

Petitioners argued that the CA erred in holding that the mass action infront of the Office of the Secretary
of Labor was not a strike considering that it had all the elements of a strike and the respondents judicially
admitted that it was a strike. The CA deemed the mass action as an exercise of the respondents freedom
of expression but such constitutional right is not absolute and subject to certain well-defined exceptions.
Moreover, a mass action of this nature is considered a strike and not an exercise of ones freedom of
expression, considering further that the Secretarys Order is a valid exercise of police power.

G.R. No. 159461

Petitioners contend that the CA erred in ruling that the dismissal of respondents Gamier, Condevillamar,
Arriola and De Guzman was illegal, considering that this was not an issue raised in the petition for
certiorari before the appellate court. What was raised by petitioners was only the propriety of the award of
separation pay by the NLRC which in fact declared their dismissal to be valid and legal.


Whether or not the protest rally and concerted work abandonment/boycott staged by the respondents
violated the Order of the Secretary of Labor?

Whether or not the respondents were validly terminated?

Whether or not the respondents are entitled to separation pay or financial assistance?



Article 212 of the Labor Code, as amended, defines strike as any temporary stoppage of work by the
concerted action of employees as a result of an industrial or labor dispute. A labor dispute includes any
controversy or matter concerning terms and conditions of employment or the association or
representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and
conditions of employment, regardless of whether or not the disputants stand in the proximate relation of
employers and employees. The term "strike" shall comprise not only concerted work stoppages, but also
slowdowns, mass leaves, sitdowns, attempts to damage, destroy or sabotage plant equipment and
facilities and similar activities. Thus, the fact that the conventional term "strike" was not used by the
striking employees to describe their common course of action is inconsequential, since the substance of
the situation, and not its appearance, will be deemed to be controlling.

It is explicit from the directive of the Secretary in his January 18, 2000 Order that the Union and its
members shall refrain from committing "any and all acts that might exacerbate the situation," which
certainly includes concerted actions. For all intents and purposes, therefore, the respondents staged a
strike ultimately aimed at realizing their economic demands. Whether such pressure was directed against
the petitioners or the Secretary of Labor, or both, is of no moment. All the elements of strike are evident in
the Union-instigated mass actions.

The right to strike, while constitutionally recognized, is not without legal constrictions. Article 264 (a) of the
Labor Code, as amended, provides:
Art. 264. Prohibited activities. (a) x x x

No strike or lockout shall be declared after assumption of jurisdiction by the President or the Secretary or
after certification or submission of the dispute to compulsory or voluntary arbitration or during the
pendency of cases involving the same grounds for the strike or lockout.

The Court has consistently ruled that once the Secretary of Labor assumes jurisdiction over a labor
dispute, such jurisdiction should not be interfered with by the application of the coercive processes of a
strike or lockout. A strike that is undertaken despite the issuance by the Secretary of Labor of an
assumption order and/or certification is a prohibited activity and thus illegal.

Article 264 (a) of the Labor Code, as amended, also considers it a prohibited activity to declare a strike
"during the pendency of cases involving the same grounds for the same strike." There is no dispute that
when respondents conducted their mass actions on April 3 to 6, 2000, the proceedings before the
Secretary of Labor were still pending as both parties filed motions for reconsideration of the March 24,
2000 Order. Clearly, respondents knowingly violated the aforesaid provision by holding a strike in the
guise of mass demonstration simultaneous with concerted work abandonment/boycott.

The foregoing shows that the law makes a distinction between union officers and members. For
knowingly participating in an illegal strike or participating in the commission of illegal acts during a strike,
the law provides that a union officer may be terminated from employment. The law grants the employer
the option of declaring a union officer who participated in an illegal strike as having lost his employment. It
possesses the right and prerogative to terminate the union officers from service.

However, a worker merely participating in an illegal strike may not be terminated from employment. It is
only when he commits illegal acts during a strike that he may be declared to have lost employment status.
We have held that the responsibility of union officers, as main players in an illegal strike, is greater than
that of the members and, therefore, limiting the penalty of dismissal only for the former for participation in
an illegal strike is in order.Hence, with respect to respondents who are union officers, the validity of their
termination by petitioners cannot be questioned. Being fully aware that the proceedings before the
Secretary of Labor were still pending as in fact they filed a motion for reconsideration of the March 24,
2000 Order, they cannot invoke good faith as a defense.

The award of backwages is a legal consequence of a finding of illegal dismissal. Assuming that
respondent-union members have indeed reported back to work at the end of the concerted mass actions,
but were soon terminated by petitioners who found their explanation unsatisfactory, they are not entitled
to backwages in view of the illegality of the said strike. Thus, we held in G & S Transport Corporation v.
It can now therefore be concluded that the acts of respondents do not merit their dismissal from
employment because it has not been substantially proven that they committed any illegal act while
participating in the illegal strike. x x x

With respect to backwages, the principle of a "fair days wage for a fair days labor" remains as the basic
factor in determining the award thereof. If there is no work performed by the employee there can be no
wage or pay unless, of course, the laborer was able, willing and ready to work but was illegally locked out,
suspended or dismissed or otherwise illegally prevented from working. While it was found that
respondents expressed their intention to report back to work, the latter exception cannot apply in this
case. In Philippine Marine Officers Guild v. Compaa Maritima, as affirmed in Philippine Diamond Hotel
and Resort v. Manila Diamond Hotel Employees Union, the Court stressed that for this exception to apply,
it is required that the strike be legal, a situation that does not obtain in the case at bar.



G.R. No. 144899 February 5, 2004


The petitioners were employees of private respondent Hospital and members of the NAMA-MCCH, a
labor union of MCCH employees. The instant controversy arose from an intra-union confict between the
NAMA-MCCH and the National Labor Federation (NFL), the mother federation of NAMA-MCCH. NAMA-
MCCH asked MCCH to renew their Collective Bargaining Agreement (CBA). NFL, however, opposed this
move by its local afliate. Mindful of the apparent intra-union dispute, MCCH decided to defer the CBA
negotiations until there was a determination as to which of said unions had the right to negotiate a new
CBA. Believing that their union was the certifed collective bargaining agent, the members and officers of
NAMA-MCCH staged a series of mass actions inside

MCCH’s premises.

The DOLE issued certifications stating that NAMA-MCCH was not a registered labor organization. This
fnding, however, did not deter NAMA-MCCH from fling a notice of strike. Said notice was, however,
disregarded by the NCMB for want of legal personality of the union. The MCCH management received
reports that petitioners participated in NAMA-


mass actions. Consequently, notices were served on all union members, petitioners included, asking
them to explain in writing why they were wearing red and black ribbons and roaming around the hospital
with placards. Petitioner was dismissed from employment because of her participation in the mass action.
Bascon and Cole filed a complaint for illegal dismissal. They denied having participated in said mass
actions or having received the notices (1) enjoining them from wearing armbands and putting up placards,
with warning that disciplinary measure would be imposed, and (2) informing them of the schedule of
hearing. They admit, however, to wearing armbands for union identity while nursing patients as per
instruction of their union leaders. The Labor Arbiter found the termination complained to be valid and
legal, and dismissed the complaint. The Labor Arbiter held that petitioners were justly dismissed because
they actually participated in the illegal mass action. It also concluded that petitioners received the notices
of hearing, but deliberately refused to attend the scheduled investigation. On appeal, the NLRC reversed
the ruling of the Labor Arbiter. But the CA reversed the ruling of the NLRC.


Whether or not petitioners were validly terminated for (1) allegedly participating in an illegal strike.


The Supreme Court said that petitioner was not validly terminated. While a union ofcer can be terminated
for mere participation in an illegal strike, an ordinary striking employee, like petitioners herein, must have
participated in the commission of illegal acts during the strike. There must be proof that they committed
illegal acts during the strike. But proof beyond reasonable doubt is not required. Substantial evidence,
which may justify the imposition of the penalty of dismissal, may suffice. In case at bar, the Court of

found that petitioners’ actual participation

in the illegal strike was limited to wearing armbands and putting up placards. There was no fnding that
the armbands or the placards contained ofensive words or symbols. Thus, neither

such wearing of armbands nor said putting up of placards can be construed as an illegal act. In fact, per
se, they are within the mantle of constitutional protection under freedom of speech. Evidence on record
shows that various illegal acts were committed by unidentifed union members in the course of the
protracted mass action. But it cannot hold petitioners responsible for acts they did not commit. The law,
obviously solicitous of the welfare of the common worker, requires, before termination may be considered,
that an ordinary union member must have knowingly participated in the commission of illegal acts during
a strike.