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G.R. No. 159119, March 14, 2006 ATTY.

ANDREA UY and FELIX YUSAY, Petitioners,

vs. AMALIA A. BUENO, Respondent.

Countrywide Rural Bank, a bank corporation, experienced liquidity problems; hence,

a group of its depositors was alarmed at the imminent prospect of not being able to recover
their deposits and other investments. They organized themselves into a committee of
depositors. The committee elected petitioner Felix Yusay as Chairman, petitioner Andrea Uy
as Secretary, Manu Gidwani as Vice-Chairman and Pompeyo Querubin as Treasurer.1

On January 18, 1999, the depositors of Countrywide Rural Bank (not the committee
of depositors led by petitioner Yusay) met at the Marbel Branch. Marlon V. Juesna, the
Vice-Chairman of the Board of Countrywide Rural Bank, presided over the meeting. In the
course of the meeting, respondent Amalia A. Bueno stood up and announced that her
services as Branch Manager of Marbel Branch were terminated by petitioner Uy. Petitioner
Uy, who was in the meeting, confirmed respondent Bueno's declaration. She did not
elaborate on the basis of the termination explaining that it involved internal problems that
could not be discussed with the depositors.2

The day after, respondent Bueno filed a case for illegal dismissal and prayed for
reinstatement with payment of full back wages, damages and attorney's fees against
Countrywide Rural Bank, Miguel Mendoza, Primo Esleyer, Marlon Juesna, and petitioners
Uy and Felix Yusay before the Labor Arbiter of the Sub-Regional Arbitration Branch No. XI
of the National Labor Relations Commission (NLRC) in General Santos City.

Issue: Whether or not UY should be held liable of illegal dismissal with Countrywide Rural

Held: No.The records show that petitioner Uy was a mere depositor of the bank who was
elected Interim President and Corporate Secretary by a committee of depositors to protect
their interests given the bad state of Countrywide Rural Bank's affairs.

Based from the facts given,the act of petitioner Uy in dismissing respondent cannot
be deemed an act as an officer of the bank. Consequently, it cannot be held that there
existed an employer-employee relationship between petitioner Uy and respondent Bueno
when the former allegedly dismissed the latter. This requirement of employer-employer
relationship is jurisdictional for the provisions of the Labor Code, specifically Book VI
thereof, on Post-Employment, to apply. Since the employer-employee relationship between
petitioner Uy and respondent Bueno was not established, the labor arbiter never acquired
jurisdiction over petitioner Uy. Consequently, whether petitioner Uy was properly served
with summons is immaterial. Likewise, that she terminated the services of respondent
Bueno in bad faith and with malice is of no moment. Her liability, if any, should be
determined in another forum.
G.R. No. 196539, October 10, 2012 MARIETTA N. PORTILLO, Petitioner, vs. RUDOLF

On 1991, Portillo was hired by Lietz Inc. On her tenth year with Lietz Inc, she was
promoted to Sales Representative and received a corresponding increase in basic monthly
salary and sales quota. In this regard, Portillo signed another letter agreement containing a
"Goodwill Clause".

The clause states that, on the termination of Portillo’s employment, she shall not
engage directly or indirectly as employee, manager, proprietor, or solicitor for herself or
others in a similar or competitive business or the same character of work which she was
employed by [Lietz Inc.] to do and perform. Should there be a breach of this good will clause
of this Contract, she shall pay [Lietz Inc.] as liquidated damages the amount of 100% of
your gross compensation over the last 12 months, it being agreed that this sum is
reasonable and just.rνll

Three (3) years thereafter, on 6 June 2005, Portillo resigned from Lietz Inc. During
her exit interview, Portillo declared that she intended to engage in rice dealership, selling
rice in wholesale.

On 15 June 2005, Lietz Inc. accepted Portillos resignation and reminded her of the
"Goodwill Clause" in the last letter agreement she had signed. Portillos then demands from
Lietz Inc. for the payment of her remaining salaries and commissions went unheeded. Lietz
Inc. gave Portillo the run around, on the pretext that her salaries and commissions were
still being computed.

On 14 September 2005, Portillo filed a complaint with the National Labor Relations
Commission (NLRC) for non-payment of 1 months salary, two (2) months commission, 13th
month pay, plus moral, exemplary and actual damages and attorneys fees.

In its position paper, Lietz Inc. admitted liability for Portillos money claims in the
total amount of P110,662.16. However, Lietz Inc. raised the defense of legal compensation:
Portillos money claims should be offset against her liability to Lietz Inc. for liquidated
damages in the amount of ₱869,633.097ςrνll for Portillos alleged breach of the "Goodwill
Clause" in the employment contract when she became employed with Ed Keller Philippines,

Issue: Whether Portillos money claims for unpaid salaries may be offset against
respondents claim for liquidated damages.

Held: No, the money claims of Portillos cannot be legally offset with the liquidated damages
claimed by Portillos.

The alleged contractual violation did not arise during the existence of the employer-
employee relationship. It was a post-employment matter, a post-employment violation.
Furthermore, the cause of action is based on a quasi-delict or tort, which has no
reasonable causal connection with any of the claims provided for in Article 217; jurisdiction
over the action is with the regular courts. Petitioner also does not ask for any relief under
the Labor Code. It merely seeks to recover damages based on the parties’ contract of
employment as redress for respondents breach thereof. Such cause of action is within the
realm of Civil Law, and jurisdiction over the controversy belongs to the regular courts. More
so must this be in the present case, what with the reality that the stipulation refers to the
postemployment relations of the parties.

Moreover, the application of compensation in this case is effectively barred by Article

113 of the Labor Code which prohibits wage deductions except in three

(a) In cases where the worker is insured with his consent by the employer, and the
deduction is to recompense the employer for the amount paid by him as premium on the

(b) For union dues, in cases where the right of the worker or his union to check-off has
been recognized by the employer or authorized in writing by the individual worker
concerned; and


Eugenia Credo, Chief of Property and Records of NATIONAL SERVICE CORPORATION

(NASECO) filed a complaint before the Arbitration Branch of the Ministry of Labor after
having been placed in forced leave without due process. Said forced leave was a product of
her alleged non-compliance of a memorandum coming from a Finance Manager, and other
past acts of misconduct as found by NASECO’s committee on Personnel Affairs.

In the Manager’s office, Credo was made to explain her side in connection with the
conducts for which she is complained of. But because she failed to explain, she was handed
a Notice of Termination. Credo thus filed a supplemental complaint for illegal dismissal and
lack of opportunity to be heard.

ISSUE: Was there an illegal dismissal?

Held: Yes. These guidelines[1] mandate that the employer furnish an employee sought to be
dismissed two (2) written notices of dismissal before a termination of employment can be
legally effected. These are the:

(1) notice which apprises the employee of the particular acts or omissions for which his
dismissal is sought and

(2) the subsequent notice which informs the employee of the employer’s decision to
dismiss him.

The dictates of procedural due process requires that decision to dismiss can only be
handed after employer has afforded employee concerned ample opportunity to be heard and
defend himself. In the case at bar, the compliance with the injunction to apprise her of the
charges filed against her and to afford her a chance to prepare her defense was dispensed
in only a day. This is not effective compliance with the legal requirements.

[1] As guidelines for employers in the exercise of their power to dismiss employees for just
causes, the law provides that:

“Section 2. Notice of dismissal. Any employer who seeks to dismiss a worker shall furnish
him a written notice stating the particular acts or omission constituting the grounds for his
dismissal . . .
“Section 5. Answer and Hearing. The worker may answer the allegations stated against
him in the notice of dismissal within a reasonable period from receipt of such notice. The
employer shall afford the worker ample opportunity to be heard and to defend himself with
the assistance of his representative, if he so desires.

“Section 6. Decision to dismiss. The employer shall immediately notify a worker in writing
of a decision to dismiss him stating clearly the reasons therefor.”
(FINANCE OFFICER), petitioners,

FACTS: This is a petition for certiorari to annul and set aside the decision of the NLRC
sustaining the labor arbiter, in holding herein petitioners liable to pay private
respondent the amount of P126,458.89 plus interest thereon computed from May 16, 1986
until full payment thereof is made, as separation pay and other post-employment benefits.
On April 20, 1975, private respondent Juvenal Lazaga was employed as a Research
Associate an a probationary basis by the SEAFDEC-AQD and was appointed Senior
External Affairs Officer on January 5, 1983 with a monthly basic salary of P8,000.00 and a
monthly allowance of P4,000.00. Thereafter, he was appointed to the position of
Professional III and designated as Head of External Affairs Office with the same pay and

SEAFDEC-AQD is a department of an international organization, the Southeast Asian

Fisheries Development Center, organized through an agreement entered into in Bangkok,
Thailand on December 28, 1967 by the governments of Malaysia, Singapore, Thailand,
Vietnam, Indonesia and the Philippines with Japan as the sponsoring country

On May 8, 1986, petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent

a notice of termination to private respondent informing him that due to the financial
constraints being experienced by the department, his services shall be terminated at the
close of office hours on May 15, 1986 and that he is entitled to separation benefits
equivalent to one (1) month of his basic salary for every year of service plus other benefits.
Upon petitioner SEAFDEC-AQD’s failure to pay private respondent his separation pay, the
latter filed on March 18, 1987 a complaint against petitioners for non-payment of
separation benefits plus moral damages and attorney’s fees with the Arbitration Branch of
the NLRC

Petitioners in their answer with counterclaim alleged that the NLRC has no
jurisdiction over the case inasmuch as the SEAFDEC-AQD is an international organization
and that private respondent must first secure clearances from the proper departments for
property or money accountability before any claim for separation pay will be paid, and
which clearances had not yet been obtained by the private respondent.
LABOR ARBITER: ordered petitioner to pay the benefits claimed
NLRC: affirmed the LA.
PETITIONER CONTENDS that: SEAFDEC-AQD is immune from suit owing to its
international character and the complaint is in effect a suit against the State which cannot
be maintained without its consent.

ISSUE: WON SEAFDEC is immuned from suit

HELD: Petitioner Southeast Asian Fisheries Development Center-Aquaculture Department

(SEAFDEC-AQD) is an international agency beyond the jurisdiction of public respondent
Being an intergovernmental organization, SEAFDEC including its Departments
(AQD), enjoys functional independence and freedom from control of the state in whose
territory its office is located.
In so far as they are autonomous and beyond the control of any one State, they have a
distinct juridical personality independent of the municipal law of the State where they are
situated. As such, according to one leading authority “they must be deemed to possess a
species of international personality of their own.” (Salonga and Yap, Public International
Law, 83 [1956 ed.])
One of the basic immunities of an international organization is immunity from local
jurisdiction, i.e.,that it is immune from the legal writs and processes issued by the
tribunals of the country where it is found. The obvious reason for this is that the subjection
of such an organization to the authority of the local courts would afford a convenient
medium thru which the host government may interfere in there operations or even
influence or control its policies and decisions of the organization; besides, such subjection
to local jurisdiction would impair the capacity of such body to discharge its responsibilities
impartially on behalf of its member-states.
WHEREFORE, finding SEAFDEC-AQD to be an international agency beyond the
jurisdiction of the courts or local agency of the Philippine government, the questioned
decision and resolution of the NLRC dated July 26, 1988 and January 9, 1989,
respectively, are hereby REVERSED and SET ASIDE for having been rendered without
G.R. No. 158539, January 15, 2009 INDUSTRIAL & TRANSPORT

Petitioner is a corporation engaged in the business of motor vehicle

repair. Tomas was employed as a diesel mechanic, while Cresencio was the
officer-in-charge at petitioners shop on Visayas Avenue.

Private respondents dismissal stemmed from an incident which took

place on March 22, 1998, when Mr. Faustino Cabel, one of the regular
customers of petitioner, arrived at the shop to have his vehicle repaired. On
March 27, 1998, respondent Cresencio Tugade, after making the necessary
verifications regarding the payment of the service made by Mr. Cabel, released
the latters vehicle.

On March 28, 1998, Felix P. Broqueza, petitioners Personnel and

Administration Manager issued a memorandum against Engr.
Fernando Fabros and respondents Tomas and Cresencio Tugade, suspending
them for ten (10) working days from March 30, 1998 to April 11, 1998 for
disobedience, incompetence and gross negligence. The memorandum stated,
among others, that the three employees released the vehicle to Mr. Cabel,
despite the instructions made by the Company president not to release the
same, unless and until he made full settlement of his obligation which
remained unpaid since 1996.

After the lapse of ten (10) days suspension or on April 12, 1998,
the Tugades allegedly did not report for work and were considered absent
without leave. On April 13, 1998, another memorandum was issued by
Felix Broqueza directing him to make the necessary explanation why he failed
to report for work.

On April 16, 1996, however, the Tugades filed a complaint for illegal
dismissal with prayer for payment of separation pay in lieu of
reinstatement, backwages and damages against petitioner.[1]

Issue: Whether or not there is an illegal dismissal in the case at bar.

Held: No. Dismissal connotes a permanent severance or complete separation of

the worker from the service on the initiative of the employer regardless of the
reasons therefor. Based on the foregoing, it can hardly be said that
respondents were dismissed from employment rather than merely temporarily
suspended. Nowhere in the proceedings or pleadings filed before the Labor
Arbiter or the NLRC did respondents dispute that they were merely suspended
from March 30, 1998 to April 11, 1998. As shown by the contents of the
memorandum issued to respondents, they were not dismissed but merely
suspended from employment:

xxx However, despite our Presidents direct and clear instruction you
released the vehicle to Mr. Faustino Cabel without the necessary payment. This
is a clear disobedience, incompetence and gross negligence of your duty as

In view thereof, we regret to inform you that you are being suspended for
ten (10) working days without pay effective March 30 to April 11, 1998.

Repetition of the same offense will be dealt with accordingly in

accordance with the labor law. (Annex 2 to Annex F to Annex C hereof)

Therefore, the complaint for illegal dismissal filed by respondents was

premature, since even after the expiration of their suspension period, they refused,
despite due notice, to report to work. In fact, in their Memorandum of Appeal,
respondents admitted having received petitioners return-to-work memorandum
which, however, became futile because they hastily filed the complaint for illegal

Since there was no dismissal to speak of, there is no basis to award

any backwages to respondents. Under Article 279 of the Labor Code, an employee is
entitled to reinstatement and backwages only if he was illegally dismissed.
G.R. No. 176085 February 8, 2012 FEDERICO S. ROBOSA, ROLANDO E. PANDY, NOEL
(First Division), CHEMO-TECHNISCHE MANUFACTURING, INC. and its responsible
INC., Respondents.


The NLRC issued a TRO and directed CTMI, De Luzuriaga and other company execut
ives to cease and desist from dismissing any member of the union and from implementing
memorandum terminating the services of the sales drivers, and to immediately reinstate the
m if the dismissals have been effected.

Allegedly, the respondents did not comply with the NLRC’s resolution. They instead m
oved to dissolve the TRO and opposed the union’s petition for preliminary injunction. Then,
the NLRC upgraded the TRO to a writ of preliminary injunction.The respondents moved for
reconsideration. The union opposed the motion and urgently moved to cite the responsible
CTMI officers in contempt of court.

Meanwhile, the NLRC heard the contempt charge and issued a resolution dismissing
the charge. It ordered the labor arbiter to proceed hearing the main case on the merits.

ISSUE: Whether or not the NLRC has contempt powers.

Yes. Under Article 218 the Labor Code, the NLRC (and the labor arbiters) may hold any offe
nding party in contempt, directly or indirectly, and impose appropriate penalties in accorda
nce with law. The penalty for direct contempt consists of either imprisonment or fine, the d
egree or amount depends on whether the contempt is against the Commission or the labor
arbiter. The Labor Code, however, requires the labor arbiter or the Commission to deal with
indirect contempt in the manner prescribed under Rule 71 of the Rules of Court. Rule 71 o
f the Rules of Court does not require the labor arbiter or the NLRC to initiate indirect conte
mpt proceedings before the trial court. This mode is to be observed only when there is no l
aw granting them contempt powers. As is clear under Article 218(d) of the Labor Code, the
labor arbiter or the Commission is empowered or has jurisdiction to hold the offending part
y or parties in direct or indirect contempt. Robosa, et al., therefore, have not improperly bro
ught the indirect contempt charges against the respondents before the NLRC.
G.R. No. 125298 February 11, 1999 CMP FEDERAL SECURITY AGENCY, INC.,
VIODOR and DAWAY WAHAB, respondents.

CMP Federal Security Agency Inc. (CMP hereon) is in the business of providing detective
and security services. Among its employees were herein private respondent security guards
Fernando Caranto, Resty Remittere, Reynaldo Rosales, Antonio Tapar, Narciso Claro, Siony
Manos, Baldo Viodor and Daway Wahab,[2] all assigned at the Maalikaya Health Complex in
Quezon City.
On 10 March 1994 private respondents filed complaints for illegal deduction,
underpayment and/or non-payment of wages, premium pay for holiday, rest day and night
shift differential pay, 13th month pay, service incentive leave pay, separation pay,
allowance and unfair labor practice against CMP,[3] Carolina Mabanta Piao and Ponciano
Mabanta Sr. Private respondent Fernando Caranto later amended his complaint to include
illegal dismissal[4] after he was relieved from his post at the Maalikaya Health Complex by
CMP, allegedly upon request of the client.
The case was initially set for mandatory conference or conciliation on 29 March 1994. It
was reset to 11 April 1994 by agreement of the parties to give them adequate time to
explore the possibility of amicable settlement. Thereafter the hearing was reset several
times with Labor Arbiter Cresencio R. Iniego directing the parties each time to submit their
respective position papers and other documentary evidence. Efforts at settlement failed.
When the case was finally called for hearing on 23 May 1994 private respondents filed
their position paper and other documentary evidence in compliance with the Labor Arbiters
orders. On the other hand, CMP moved for another postponement which the Labor Arbiter
denied. Thereafter, the case was deemed submitted for decision. It was only on 13 June
1994 that CMP presented its position paper.
On 22 July 1994 the Labor Arbiter rendered a decision in favor of private respondents
ordering CMP to reinstate Fernando Caranto with full back wages, pay salary differentials
to all private respondents, plus attorneys fees.
Both parties appealed to the NLRC. Private respondents, in their Partial Appeal, alleged
that the Labor Arbiter erred in excluding the awards for service incentive leave pay, holiday
pay, overtime pay and illegal deductions. CMP for its part argued that the Labor Arbiter
erred in holding that CMP did not submit any position paper despite his repeated orders; in
ruling that the non-filing of the position paper amounted to an admission of liability by
CMP; and, in deciding the case solely on the basis of the position paper and evidence
submitted by complainants.
In its assailed Decision of 26 October 1995 the NLRC denied CMPs appeal, granted
private respondents Partial Appeal and modified the decision of the Labor Arbiter by
including in the computation of monetary awards holiday pay, service incentive leave pay,
13th month pay, overtime pay and reimbursement for illegal deductions.
(a) whether or not Fernando Caranto was illegally dismissed by CMP.
(b) whether in granting all the money claims of private respondents CMP was denied
due process.
a. Yes. Fernando Caranto wal illegally dismiised by CMP.
In termination cases like the one before us, the burden of proving that the dismissal of
the employee was for a valid or authorized cause rests on the employer[7] and failure to
discharge that duty would mean that the dismissal is not justified and therefore
illegal.[8] The same principle was reiterated by this Court in Golden Donuts Inc. v.
NLRC[9] when it ruled that the employer carries the burden of proof in showing just cause
for terminating the services of an employee.
In the instant case, CMP failed to present evidence to justify Caranto's dismissal. We
have scoured the records but could not find any letter, memorandum or correspondence
between CMP and the management of Maalikaya Health Complex dealing with the latters
alleged request for Carantos relief from guard duties at Maalikaya Health Complex, nor the
two (2) special orders supposedly sent by CMP to Caranto: the first order, informing him of
his relief from his post at Maalikaya Health Complex, and the other, reassigning him to SM-
Feati; neither the follow-up letter by CMP requiring Caranto to explain and show cause why
his services shouldnot be terminated. We could not find any evidence, for that matter,
which would clearly and convincingly show that Caranto was absent without any valid
reason and with no intention of returning to work.
Apparently, CMP failed to discharge its burden of proof. Its allegation that Caranto was
merely relieved and reassigned is empty and self-serving, too insufficient to establish a just
and valid cause for his dismissal as employee. To allow an employer to terminate the
employment of his worker based merely on allegations without proof places the latter in an
uncertain situation. He is at the sole mercy of his employer who, in this case, has
emasculated his right to a security of tenure.
Contrariwise, when Caranto was relieved from his post on 6 May 1994 he immediately
pursued his claim against CMP by amending his complaint six (6) days after to include
illegal dismissal among his charges. This can hardly be expected from one who has
voluntarily "abandoned" his job, as claimed by CMP. The immediate filing of a complaint for
illegal dismissal against the employer is a clear indication that the employee has not given
up on his work.[10]
As already stated above, CMP failed to justify Carantos dismissal thereby rendering it
illegal. Consequently, no grave abuse of discretion was committed by the NLRC in
upholding the decision of the Labor Arbiter ordering Carantos reinstatement.
b. No. CMP was not denied of due process.
Art. 221 of the Labor Code, technical rules of evidence prevailing in courts of law or
equity are not controlling in any proceeding before the NLRC or the Labor Arbiter. Both are
mandated to use every and all reasonable means to ascertain the facts in each case
speedily and objectively and without regard to technicalities of law or procedure, all in the
interest of due process.[11]
While administrative tribunals exercising quasi-judicial powers, like the NLRC and
Labor Arbiters, are free from the rigidity of certain procedural requirements, they are
nonetheless bound by law and practice to observe the fundamental and essential
requirements of due process. The standard of due process that must be met in
administrative tribunals allows a certain degree of latitude as long as fairness is not
ignored.[12] Hence, it is not legally objectionable, for being violative of due process, for the
Labor Arbiter to resolve a case based solely on the position papers, affidavits
or documentary evidence submitted by the parties. The affidavits of witnesses in such case
may take the place of their direct testimony.[13]
Set against the records of this case, CMP's claim that it was deprived of its right to be
heard readily collapses. The earlier narration of facts clearly demonstrates that the parties
were repeatedly ordered by the Labor Arbiter to submit their position papers together with
the affidavits of their witnesses and other evidence in support thereof - first on 11 April
1994, then on 22 April 1994, and finally on 6 May 1994. During the 23 May 1994
conference CMP, instead of complying with the order requiring it to submit its position
paper, moved for another postponement which was denied. It was only on 13 June 1994,
after the case was submitted for resolution, that CMP finally presented its position
paper. Having been given ample opportunity to put forth its case, CMP has only itself to
blame or, better still, its counsel who was then present, for its failure to do so within the
extended period.
A party before the Labor Arbiter which had a chance to present its side during a period
of more than one (1) month, and despite repeated extensions of time given to enable it to
present its position paper still failed to meet its final deadline, cannot claim denial of due
process[14]if subsequently the Labor Arbiter disregarded its position paper belatedly filed.
Moreover, CMP had all the chances to ventilate its arguments in its appeal to the NLRC
where, in fact, it submitted a memorandum, presented its position paper and supporting
documents allegedly ignored by the Labor Arbiter, as well as a motion for reconsideration -
which documents were considered by that Labor Tribunal in the course of resolving the
case.[15] Consequently, the alleged defect in the proceedings before the Labor Arbiter, if
there be any, was deemed cured.
The fact that the NLRC in its decision made no reference to the position paper and
evidence of petitioner does not mean that they were not considered. It is simply that the
NLRC agreed with the Labor Arbiters findings and conclusions and found nothing
substantial in petitioners position paper and documentary evidence to warrant a reversal of
those findings and conclusions.
The essence of due process is simply an opportunity to be heard or, as applied to
administrative proceedings, an opportunity to explain ones side or an opportunity to seek
reconsideration of the action or ruling complained of.[16] Where, as in this case, the party
has had ample opportunity to present its side of the controversy not only before the Labor
Arbiter but also the NLRC on appeal, it cannot thereafter interpose lack of due process for
what the fundamental law abhors is simply the absolute absence of opportunity to be
Finally, while it may be true that in labor cases stringent rules of procedure may be
dispensed with in the interest of justice, it does not mean that a party litigant is at liberty
to completely disregard or ignore the rules, particularly those relating to the periods for
filing of pleadings. In this connection, if we are to sustain petitioners argument that it was
denied due process when its position paper and documentary evidence were not considered
by the Labor Arbiter in deciding the case, we will in effect put a premium on the
undesirable practice of filing position papers late and only after the case has already been
submitted for decision.
G.R. No. 140374 November 27, 2002 JANE C. ABALOS, BERNARDO A. BAMBICO,
A manpower audit conducted by respondent Philex, for brevity, revealed that 241 of its
employees were redundant. Thus, Philex undertook a retrenchment program that resulted
in the termination of petitioners employment effective June 30, 1993. Consequently,
petitioners filed a case for illegal dismissal against respondent. The case was submitted for
arbitration through a submission agreement coursed through the National Conciliation and
Mediation Board, Cordillera Administrative Region, Baguio City.
On March 5, 1994, Voluntary Arbitrator Juan Valdez rendered his decision. Philex is
hereby ordered to reinstate the Complainants and Intervenors to their former positions with
back wages without loss of seniority and privileges within 10 days from receipt hereof
except the two employees namely Pedro Otgalon and Miguel Guyapat who have applied for
and granted early retirement. Philex appealed to this Court and the case was remanded to
the Court of Appeals. The CA r uled in favor of the complainants. Then, Philex elevated the
case to the Supreme Court via a petition for review on certiorari, which was also denied.
The entry of judgment was made on April 27, 1998.
On August 14, 1998, Philex filed a manifestation and motion for leave to offer
separation pay to petitioners, in lieu of reinstatement, before the Office of Voluntary
Arbitrator Juan Valdez.Philex alleged that petitioners positions no longer existed and that
there arose strained relations between the parties that effectively barred reinstatement.
Arbitrator Juan Valdez granted Philexs motion in his order dated December 11, 1998
.Philex is ordered to pay the Complainants and Intervenors the amounts of backwages and
separation pay stated above less the total amount of salary they received as a result of their
reinstatement thru payroll from November 24, 1997 to date within twenty (20) days from
receipt hereof plus ten percent (10%) thereof as attorneys fees, otherwise this Office will
direct the proper Sheriff to execute this Order.
However. petitioners aver that when the March 5, 1994 order directing their
reinstatement became final and executory, Arbitrator Valdez no longer had jurisdiction to
modify the same. According to them, an order that has become final and executory can no
longer be modified or altered.
Issue; Whether or not that the said award is final and executory, thus cannot be modified.
Held: No, the award can still be modified.
A basic tenet in the rules of procedure is that an award that is final and executory
cannot be amended or modified anymore. Nothing is more settled in law than that once a
judgment attains finality it thereby becomes immutable and unalterable. It may no longer
be modified in any respect, even if the modification is meant to correct what is perceived to
be an erroneous conclusion of fact or law, and regardless of whether the modification is
attempted to be made by the court rendering it or by the highest court of the
land.[9] However, this rule is subject to exceptions as stated in the case of David vs. CA, 316
SCRA 710 (1999), cited by respondent:
One exception is that where facts and/or events transpire after a decision has become
executory, which facts and/or events present a supervening cause or reason which renders
the final and executory decision no longer enforceable. Under the law, the court may modify
or alter a judgment even after the same has become executory whenever circumstances
transpire rendering its execution unjust and inequitable, as where certain facts and
circumstances justifying or requiring such modification or alteration transpired after the
judgment has become final and executory .

Considering the circumstances in the present case, we find that the only issue to be
resolved is whether the supervening events are grave enough to warrant a modification in
the execution of the judgment. Both the voluntary arbitrator and the Court of Appeals
found that reinstatement is no longer possible due to the fact that respondent has been
continuously suffering business losses and reducing the number of its employees pending
litigation, and so the positions held by petitioners were abolished as a cost-cutting
On record, there is no showing that the abolition of the petitioners positions was
capricious or whimsical. The appellate court, as well as the voluntary arbitrator, based
their decisions on applicable law and the evidence. As confirmed by the appellate court, the
voluntary arbitrator also found that petitioners reinstatement had become not only
inappropriate but also impossible.
G.R. No. 141471 September 18, 2000 COLEGIO DE SAN JUAN DE LETRAN,
ELEONOR AMBAS, respondents.
FACTS: Salvador Abtria, President of respondent union initiated renegotiations of its CBA
with petitioner for the last two years of CBA’s 5 years lifetime from 1989-1994. On the same
year, the union elected a new set of officers with private respondents Eleanor Ambas as the
newly elected President. Ambas wanted to continue renegotiation, but petitioner claimed
that the CBA was already prepared for signing. The CBA was submitted to a referendum
which was rejected by the union members. Later, the union notified the NCMB of its
intention to strike due to petitioners, refusal to bargain. Thereafter, the parties agreed to
disregard the unsigned CBA and to start negotiation on a new five-year CBA. The union
submitted its proposals to petitioner, which notified the union that the same was submitted
to its Board of Trustees. Meanwhile, Ambas work schedule was changed, which she
protested and requested to be submitted to grievance machinery under the old CBA. Due to
petitioners’ inaction, the union filed a notice of strike. Later, the Ambas was dismissed for
alleged insubordination. Both parties again discussed the ground rules for the CBA
renegotiations; however petitioner stopped negotiations after allegedly receiving information
that a new group of employees had filed a PCE. The union struck and the Secretary
assumed jurisdiction ordering all striking workers to return to work. All were readmitted
except Ambas. Public respondent declared petitioner quilt of ULP and directed
reinstatement of Ambas with back wages.

1) Whether petitioner is guilty of unfair labor practice by refusing to bargain within the
union when it unilaterally suspended the ongoing negotiations for a new Collective
Bargaining Agreement (CBA) upon mere information that a petition for certification has
been filed by another legitimate labor organization.
2) Whether the termination of the union president amounts to an interference of the
employees’ right to self –organization.

1. No. the duty to bargain collectively includes the mutual obligation to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an agreement.
Petitioner failed to make a timely reply to the unions proposals, thereby violating the proper
procedure in collective bargaining as provided in Article 250. In order to allow the employer
to validly suspend the bargaining process, there must be a valid PCE raising a legitimate
representation issue, in this case, the petition was filed outside the 60-dayt freedom period;
therefore there was no legitimate representation issue and the filing of the PCE did not
constitute to the ongoing negotiation.

2. Yes, the dismissal was in violation of the employee’s right to self- organization. The
dismissal must be made pursuant to the tenets of equity and fair play wherein the
employers right to terminate the services of an employee must be exercised in good faith,
furthermore, it must not amount to interfering with, restraining, or coercing, employees in
their right to self- organization. The factual backdrop of the Ambas termination reveals that
such was done in order to strip the union of the leader; admittedly management has the
prerogative to discipline its employees for insubordination. But when the exercise of such
management right tends to interfere whit the employees right to self- organization, it
amounts to union- busting and is therefore a prohibited act.
G.R. No. L-41955 December 29, 1977 ELISCO-ELIROL LABOR UNION (NAFLU) and its
NORIEL, in his capacity as Director of the Bureau of Labor Relations, ELIZALDE
(NAFLU), respondents.

A CBA was negotiated and executed between the Elisco-Elirol Labor Union-NAFLU
and respondent company Elizaled Steel, while the former is yet to be registered with the
Upon registration, at a special meeting called for the purpose, the general
membership of petitioner decided to disaffiliate from its mother union, the National
Federation of Labor Unions (NAFLU). That respondent company without any justifiable
reason refused and continues to refuse to recognize petitioner as the sole and exclusive
bargaining representative of its employees. By virtue of said refusal, petitioners filed a
petition before the BLR against respondent company, and NAFLU be ordered to stop from
presenting itself as the collective bargaining agent.

ISSUE: Which of the 2 unions should be recognized as the sole and exclusive bargaining
representative of the employees and ultimately recognized to administer and supervise the
enforcement of the CBA, the mother union or the local union.

HELD: the local union, Elisco-Elirol Labor Union-NAFLU, NOT the mother union NAFLU
“to grant to the former mother union (NAFLU) the authority to administer and enforce their
collective bargaining agreement without presumably any members in the bargaining unit is
quite absurd”
Elisco-Elirol Labor Union-NAFLU, consisting of employees and members of the local union
was the principal party to the agreement. NAFLU as the “mother union” in participation in
the execution of the bargaining agreement with respondent company acted merely
as agent of the local union, which remained the basic unit of the association existing
principally and freely to serve the common interest of all its members, including the
freedom to disaffiliated when the circumstances so warranted as in the present case.
Corollarily, the “substitutionary” doctrine likewise fully supports petitioner’s stand.
Petitioner union to whom the employees owe their allegiance has from the beginning
expressly avowed that it “does not intend to change and/or amend the provisions of the
present collective bargaining agreement but only to be given the chance to enforce the same
since there is a shift of allegiance in the majority of the employees at respondent company.”
As was stressed by the Court in Benguet Consolidated Inc. vs. BCI Employees & W Union-
… This principle, formulated by the NLRB as its initial compromise solution to the problem
facing it when there occurs a shift in employees’ union allegiance after the execution of a
bargaining contract with their employer, merely states that even during the effectivity of a
collective bargaining agreement executed between employer and employees thru their
agent, the employees can change said agent but the contract continues to bind then up to
its expiration date. They may bargain however for the shortening of said expiration date.
In formulating the “substitutionary” doctrine, the only consideration involved was the
employees’ interest in the existing bargaining agreement. The agent’s interest never entered
the picture. In fact, the justification for said doctrine was:
… that the majority of the employees, as an entity under the statute, is the true party in
interest to the contract, holding rights through the agency of the union representative.
Thus, any exclusive interest claimed by the agent is defeasible at the will of the principal.
G.R. No. 74560 November 9, 1988 ALBAY ELECTRIC COOPERATIVE I, petitioner,
FFW ALECO I CHAPTER, respondents.


The Federation of Free Workers (FFW) ALECO I Chapter filed a petition for
certification election, alleging, that it is a legitimate labor organization; that the Albay
Electric Cooperative I (ALECO I) is an electric cooperative servicing electricity in the
Province of Albay; that ALECO I has 160 employees, more or less, majority of whom are
FFW members; that there is no other union existing nor a collective bargaining agreement
existing in the cooperative; that no certification election has been held for the past twelve
(12) months prior to the filing of the petition. The FFW submitted 63 signatures in support
of the petition for certification election. Counsel for ALECO I employees for a "NO-UNION
STAND" intervened and submitted a copy of the ALECO I 1985 budget showing that the
said cooperative has a total of 141 rank and file employees. The FFW filed its position paper
contending that the ALECO I is covered by the Labor Code: that it has a right to organize
and be represented by a union; that there is no legal impediment tothe holding of a
certification election considering that out of the 141 rank and file employees, 63 supported
the petition. ALECO I filed its position paper seeking the dismissal of the petition on the
allegation that FFW failed to comply with 30% requirement considering that 112 rank and
file employees have manifested in a "declaration" they that do not desire to be represented
by any union. As intervenor (ALECO I employees for a "NO-UNION STAND") filed its position
paper seeking the dismissal of the petition, alleging that the 30% written consent
requirement has not been complied with. It alleged that of the 63 signatories to the petition,
51 are not qualified to join the union as they are members-consumers of the ALECO I and
are considered joint owners of the cooperative pursuant to PD 269, and Art. II Sec. I of the
revised bylaws of ALECO I. FFW, in its reply argued that the 51 disputed signatories to the
petition are regular rank and file employees and workers of ALECO I and are entitled to
selforganization under Article 244 (now Article 243) of the Labor Code. The Med-Arbiter,
finding that there was compliance with the 30% subscription requirement, issued an order
calling for a certification election. ALECO I appealed from this order to the Bureau of Labor
Relations. In the meantime, the Association of Democratic Labor Organization (ADLO)
moved to intervene in the petition claiming that it has a legal interest to protect.
Cresenciano B. Trajano, Director of the Bureau of Labor Relations, rendered a decision
dismissing ALECO I's appeal for lack of merit, claiming that there was a "clear proof of
compliance with the 30% subscription requirement, coupled with the finding that the
subscribers to the petition who are members/owners of the respondent cooperative can
validly be eligible for union membership."

Issue: WON employees of electric cooperatives are qualified to form or join labor
organizations for purposes of collective bargaining? NO

Ratio: In Cooperative Rural Bank of Davao City, Inc. vs. Pura Ferrer-Calleja, Director,
Bureau of Labor Relations, it was held that an employee of a cooperative who is a member
and co-owner thereof cannot invoke the right to collective bargaining. The decision in the
case, inter alia, stated: x x x "A cooperative, therefore, is by its nature different from an
ordinary business concern being run either by persons, partnerships, or corporations.
Its owners and/or members are the ones who run and operate the business while the
others are its employees. As above stated, irrespective of the name of shares owned by its
member they are entitled to cast one vote each in deciding upon the affair of the
cooperative. Their share capital earn limited interests. They enjoy special privileges such as
exemption from income tax and sales taxes, preferential right to supply their products to
State agencies and even exemption from the minimum wage laws. An employee therefore
of such a cooperative who is a member and co-owner thereof cannot invoke the right
to collective bargaining for certainly an owner cannot bargain with himself or his co-
owners. The Solicitor General he correctly opined that employees of cooperatives who
are themselves members of the cooperative have no right to form or join labor
organizations for purposes of collective bargaining for being themselves co-owners of
the cooperative. However, in so far as it involves cooperatives with employees who are not
members or co-owners thereof, certainly such employees are entitled to exercise the rights
of all workers to organization, collective bargaining, negotiations and others as are
enshrined in the Constitution and existing laws of the country." x x x Petitioner UNION
admitted in its petition that its officers and members are also members-consumers of the
cooperative. Such being the case, the employees belonging to petitioner UNION are not
qualified to form a labor organization and bargain collectively.Employees of a
cooperative who are not members thereof are entitled to exercise the rights of all workers to
form, join or assist labor organizations for purposes of collective bargaining. Compliance
with the jurisdictional requirement makes it mandatory on the part of the Bureau of Labor
Relations to order the holding of a certification election in order to determine the exclusive
bargaining agent of the employees. With such, the Bureau is left without any discretion but
to order the holding of a certification election.
Manager, Respondents.

Facts :

The Company employed Bergante and Inguillo as assemblers on August 1977 and
September 1986, respectively. In 1991, the Union, FPSSILU, entered into a CBA which
duration is for 5 years from 1991 to 1996. During the lifetime of the union, Begante and
Inguillo and other members of the union join another union, NLM. Subsequently, NLM
filed with DOLE an intra-union dispute against the Union and Company. The Med-Arbiter
decided in favor of Union.

Meanwhile, the Union filed a petition with the Company seeking the termination of
the services of the employees on the ground of disloyalty to the Union and others. On May
1996, Inguillo filed with the NLRC a complaint against the Company for illegal withholding
of salary and damages. Also, on May 1996, the company terminated the services of the
employees mentioned in the petition. The following day, separate complaints for illegal
dismissal were filed by NLM and Inguillo which were consolidated.

The Labor Arbiter (LA) dismissed the complaints against the complainants entered in
amicable settlement. The remaining complainants were Bergante and Inguillo. In its
decision, LA dismissed the complaints and declared that Bergante and Inguillo were not
illegally dismissed, that the two clearly violated the Union Security Clause of the CBA when
they joined NLM. On appeal, NLRC reversed the decision of the LA. On Motion for
Reconsideration, NLRC set aside its decision and held that Bergante and Inguillo were not
illegally dismissed. On petition, the CA dismissed the petition for lack of merit and
affirmed the legality of the dismissal. Hence, this petition.


Whether the dismissal of Bergante & Inguilla is legal.


The Labor Code has several provisions under which an employee may be validly
terminated, namely (1) just causes under Article 282; (2) authorized causes under Article
283; (3) termination due to disease under Article 284; and (4) termination by the employee
or resignation under Article 285. While the said provisions did not mention as ground the
enforcement of the Union Security Clause in the CBA, the dismissal from employment
based on the same is recognized and accepted in our jurisdiction.

“Union Security” is a generic term, which is applied to and prehends “closed shop,”
“union shop,” “maintenance of membership” or any other form of agreement which imposes
upon employees the obligation to acquire or retain union membership as a condition of

The Petition is denied.

CEBU OIL EMPLOYEES ASSOCIATION, represented by its Acting President, MIGUEL
CHAPTER-ALU, represented by its President, DAVID C. ONDEVILLA, petitioner

A collective bargaining agreement was entered into between the complainants

and the respondent Mobil Oil Philippines, Inc. for a period of three years starting
from April 1, 1982 to March 31, 1985. On August 5, 1983 ,the President of Mobil Oil
Philippines, Inc. sent letters to the employees, notifying of (sic) the termination of
their services effective August 31, 1983 because of the sale of the respondent firm.
On September 13, 1983, complainant employee accepted their checks for separation
pay and signed quit-claims under protest and subject to the outcome of this case.

However, Complainants charge respondent Mobil Oil Philippines, Inc. and J.P.
Bailiux with unfair labor practice for violating their collective bargaining agreement
which, among others, states that "this Agreement shall be binding upon the parties
hereto and their successors and assigns, and may be assigned by the company
without the previous approval of the Union. However, the latter will be notified of
such assignment when it occurs." In this case, the complainant unions were not
notified officially of such assignment to Caltex Philippines and respondent Mobil Oil
Philippines made announcement in major dailies that the company shall continue to
operate its business. 4

Issue: Whether or not there exist an illegal termination of employment.

Held: None.

Article 284 of the Labor Code as it existed in 1983 provided as follows:

Art. 284. Closure of establishment and reduction of personnel. — The employer may
also terminate the employment of any employee due to the installation of labor-saving
devices, redundancy, retrenchment top prevent losses or the closing or cessation of
operation of the establishment or undertaking, unless the closing is for the purpose of
circumventing the provisions of this title by serving a written notice on the workers and
the Ministry of Labor and Employment at least one (1) month before the intended date
thereof.In case of termination due to the installation of labor-saving devices or
redundany, the worker affected thereby shall be entitled to a separation pay
equivalent to least his one (1) month pay or to at least one (1) month pay for every
year of service, whichever is higher. In case of retrenchment to prevent losses and in
cases of closure or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be equivalent to
one (1) month pay or least one-half (½) month pay for every year of service, whichever
is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

Under Article 184 above, three (3) requirements may be seen be established in
respect of cessation of business operations of an employer company not due to
business reverses, namely:
(a) service of a written notice to the employees and to the MOLE at least one (1)
month before the intended date thereof;

(b) the cessation of or withdrawal from business operation must be bona fide in
character; and

(c) payment to the employees of termination pay amounting to at least one-half (½)
month pay for each year of service, or one (1) month pay, which is higher.

As noted earlier, MOPI's employee and the MOLE were notified in writing on 5 August
1983 that the employees' service would cease on 31 August 1983, but that employees
would nonetheless be paid their salaries and other benefits until or as of 5 September
1983. We believe that is more than substantial compliance with the notice
requirements of the Labor Code. In respect of requirement (c) above relating to
payment of termination pay to the package given by MOPI to all its employees far
exceeded the minimum requirement of one-half (½) month pay for every year of
service laid down in Article 184 of the Labor Code. The very generosity of the
termination pay package thus given to the employees argues strongly that the
cessation of business operations by MOPI was a bona fide one. It is very difficult for
this Court to believe that MOPI would be dissolved and all its employees separated
with generous separation pay benefits, for the sole purpose of circumventing the
requirements of MOPI's CBA with petitioner unions. Indeed, petitioners have not
suggested any reason why MOPI should have undertaken such a fundamental and
non-reversible business reorganization merely to evade its obligations under the CBA.
The establishment of MPI with the same Directors who had served as such in MOPI
and the hiring of some former MOPI employees for the purpose of settling and
winding up the affairs of MOPI, does not detract from the bona fide character of
MOPI's dissolution and withdrawal from business. MPI's residual business consisting
of the marketing of chemicals, aviation and marine fuels as well as exports, all of
which constituted a fraction of the prior business of MOPI, similarly does not argue
against the bona fide character of the corporate reorganization which here took place.