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G.R. No.

95940 July 24, 1996 substantially equivalent positions without loss of seniority rights with
full backwages and other benefits, computed as follows:
PANTRANCO NORTH EXPRESS, INC., petitioner,
vs. xxx xxx xxx
NATIONAL LABOR RELATIONS COMMISSION and URBANO
SUÑIGA, respondents. 3. Urbano Suñiga

P 27,375.00 — Backwages,
Aug. 16/89 to
PANGANIBAN, J.:p March 31/90 (P3,650.00 x 7.5
mos.)
Is a Collective Bargaining Agreement provision allowing compulsory retirement before
age 60 but after twenty five years of service legal and enforceable? Who has 1,368.75 — 13th month pay for
jurisdiction over a case involving such a question — the labor arbiter or arbitrators 1989
authorized by such CBA? (P16,425.00 over 12)
——————
The foregoing questions are presented in the instant petition for Certiorari seeking the P 28,743.75
nullification of the Resolution1promulgated September 28, 1990 by the National Labor 2,874.37 — 10% attorney's
Relations Commission2 in an illegal dismissal case brought by private respondent. In fees
its assailed Resolution, the public respondent affirmed the decision of the Labor ——————
Arbiter Ricardo N. Olairez dated March 26, 19903 declaring that the compulsory P 31,618.12 — Total as of
retirement of private respondent constituted illegal dismissal, ordering his March 31/90 plus
reinstatement and granting him backwages. additional backwages and
other benefits but not to
exceed 3 years and the
The Antecedent Facts corresponding attorney's fees.

Private respondent was hired by petitioner in 1964 as a bus conductor. He eventually The amounts already received by complainants shall be considered
joined the Pantranco Employees Association-PTGWO. He continued the petitioner's as advanced payment of their retirement pay which shall be
employ until August 12, 1989, when he was retired at the age of fifty-two (52) after deducted when they shall actually retire or (be) separated from the
having rendered twenty five years' service. The basis of his retirement was the service.
compulsory retirement provision of the collective bargaining agreement between the
petitioner and the aforenamed union. Private respondent received P49,300.00 as
retirement pay. The order of reinstatement is immediately executory even pending
appeal.
On February 15, 1990, private respondent filed a complaint 4 for illegal
dismissal against petitioner with the Sub-Regional Arbitration Branch of the Petitioner appealed to public respondent, which issued the questioned Resolution
respondent Commission in Dagupan City. The complaint was consolidated affirming the labor arbiter's decision in toto. Hence, this petition.
with two other cases of illegal dismissal5 having similar facts and issues, filed
by the other employees, non-union members. The Issues

After hearings were held and position papers submitted, on March 26, 1990, Petitioner raises the following issues for decision:
Labor Arbiter Olairez rendered his decision, the dispositive portion of which
reads: I. The National Labor Relations Commission gravely abused its
discretion in holding that the Labor Arbiter has jurisdiction over the
WHEREFORE, with all the foregoing considerations, we find the case.
three complainants illegally and unjustly dismissed and we hereby
order the respondent to reinstate them to their former or II. Assuming that the Labor Arbiter has jurisdiction over the case,
the National Labor Relations Commission gravely abused its
discretion in affirming the Labor Arbiter's decision that private First, this is a complaint of illegal dismissal of which original and
respondent Urbano Zuniga (sic) was illegally dismissed. exclusive jurisdiction under Article 217 has been conferred to the
Labor Arbiters. The interpretation has been conferred to the Labor
Of course, it is obvious that the underlying and pivotal issue is whether the CBA Arbiters. The interpretation of the CBA or enforcement of the
stipulation on compulsory retirement after twenty-five years of service is legal and company policy is only corollary to the complaint of illegal dismissal.
enforceable. If it is, private respondent has been validly retired. Otherwise, petitioner Otherwise, an employee who was on AWOL, or who committed
is guilty of illegal dismissal. The answer to said question will settle the issue of the offenses contrary to the personnel policies (sic) can no longer file a
validity of the questioned resolution of the public respondent. case of illegal dismissal because the discharge is premised on the
interpretation or enforcement of the company policies (sic).
The Court's Ruling
Second, Respondent voluntarily submitted the case to the
jurisdiction of this labor tribunal. It adduced arguments to the
On the key issue, the Court finds the petition meritorious, thus warranting reversal of legality of its act, whether such act may be retirement and/or
the questioned Resolution. dismissal, and prayed for reliefs on the merits of the case. A litigant
cannot pray for reliefs on the merits and at the same time attacks
First Issue: Jurisdiction of Labor Arbiter (sic) the jurisdiction of the tribunal. A person cannot have one's
cake and eat it too. . . .
Petitioner contends that the labor arbiter had no jurisdiction because the dispute
concerns a provision of the CBA and its interpretation. It claims that the case falls The Court agrees with the public respondent's affirmance of the arbiter's decision in
under the jurisdiction of the voluntary arbitrator or panel of arbitrators under Article respect of the question of jurisdiction.
261 of the Labor Code, which provides:
In Sanyo Philippines Workers Union — psslU vs. Cañizares,7 a case cited by the
Art. 261. Jurisdiction of Voluntary Arbitrators or Panel of Voluntary petitioner, this Court ruled:
Arbitrators. — The Voluntary Arbitrator or panel of Voluntary
Arbitrators shall have original and exclusive jurisdiction to hear and . . . Hence, only disputes involving the union and the company shall
decide all unresolved grievances arising from the interpretation or be referred to the grievance machinery or voluntary arbitrators.
implementation of the Collective Bargaining Agreement and those
arising from the interpretation or enforcement of company
personnel policies referred to in the immediately preceding Article. In the instant case, both the union and the company are united or
Accordingly, violations of a Collective Bargaining Agreement, have come to an agreement regarding the dismissal of private
except those which are gross in character, shall no longer be respondents. No grievance between them exists which could be
treated as unfair labor practice and shall be resolved as grievances brought to a grievance machinery. The problem or dispute in the
under the Collective Bargaining Agreement. For purposes of this present case is between the union and the company on the one
Article, gross violations of a Collective Bargaining Agreement shall hand and some union and non-union members who were
mean flagrant and/or malicious refusal to comply with the economic dismissed, on the other hand. The dispute has to be settled before
provisions of such agreement. an impartial body. The grievance machinery with members
designated by the union and the company cannot be expected to
be impartial against the dismissed employees. Due process
The Commission, its Regional Offices and the Regional Directors of demands that the dismissed workers grievances be ventilated
the Department of Labor and Employment shall not entertain before an impartial body. Since there has already been an actual
disputes, grievances or matters under the exclusive and original termination, the matter falls within the jurisdiction of the Labor
jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbiter.
Arbitrators and shall immediately dispose and refer the same to the
Grievance Machinery or Voluntary Arbitration provided in the
Collective Bargaining Agreement. Applying the same rationale to the case at the bar, it cannot be said that the "dispute"
is between the union and petitioner company because both have previously agreed
upon the provision on "compulsory retirement" as embodied in the CBA. Also, it was
The Labor Arbiter believed otherwise. In his decision 6 , he stated,: only private respondent on his own who questioned the compulsory retirement. Thus,
the case is properly denominated as a "termination dispute" which comes under the
In our honest opinion we have jurisdiction over the complaint on the jurisdiction of labor arbiters.
following grounds:
Therefore, public respondent did not commit a grave abuse of discretion in upholding conditions of employment which provides for retirement at an older
the jurisdiction of the labor arbiter over this case. age, an employee may be retired upon reaching the age of sixty
(60) years.
Second Issue: Private Respondent's
Compulsory Retirement Is Arguing that the law on compulsory retirement age is open-ended, as indicated by the
Not Illegal Dismissal use of the word "may", the Solicitor General maintains that there is no prohibition
against parties fixing a lower age for retirement. 10
The bone of contention in this case is the provision on compulsory retirement after 25
years of service. Article XI, Section 1(e)(5) of the May 2, 1989 Collective Bargaining Additionally, the Solicitor General and the petitioner contend that a CBA provision
Agreement8 between petitioner company and the union states: lowering compulsory retirement age to less than sixty (60) is not contrary to law
because it does not diminish the employee's benefits. Rather, they argue that early
Sec. 1. The COMPANY shall formulate a retirement plan with the retirement constitutes a reward of employment, and therefore, retirement pursuant to
following main features: the CBA provision in question cannot be considered a dismissal following this Court's
ruling in Soberano vs. Clave,10a the relevant portions of which read as follows:
xxx xxx xxx
Retirement and dismissal are entirely different from each other.
Retirement is the result of a bilateral act of the parties, a voluntary
(e) The COMPANY agrees to grant the retirement benefits herein agreement between the employer and the employees whereby the
provided to regular employees who may be separated from the latter after reaching a certain age agrees and/or consents to severe
COMPANY for any of the following reasons: his employment with the former. On the other hand, dismissal refers
to the unilateral act of the employer in terminating services of an
xxx xxx xxx employee with or without cause. In fine, in the case of dismissal, it
is only the employer who decides when to terminate the services of
(5) Upon reaching the age of sixty (60) years or upon the an employee. . . . Moreover, concomitant with the provisions on
completing twenty-five (25) years of service to the COMPANY, retirement in a Labor Agreement is a stipulation regarding
whichever comes first, and the employee shall be compulsorily retirement benefits pertaining to a retired employee. Here again, the
retired and paid the retirement benefits herein provided. retirement benefits are subject to stipulation by the parties unlike in
dismissals where separation pay is fixed by law in cases of
dismissals without just cause. Evident, therefore, from the foregoing
Petitioner contends that the aforequoted provision is valid an in consonance with is that retirements which are agreed upon by the employer and the
Article 287 of the Labor Code. The respondent Commission holds otherwise. employee in their collective bargaining agreement are not
dismissals. . . . To further fortify the aforesaid conclusion, it is
The said Code provides: noteworthy that even the New Labor Code recognizes this
distinction when it treats retirement from service under a separate
title from that of a dismissal or termination of employment, aside
Art. 287. Retirement — Any employee may be retired upon
from expressly recognizing the right of the employer to retire any
reaching the retirement age established in the Collective Bargaining
employee who has reached the retirement age established in the
Agreement or other applicable employment contract.
collective bargaining agreement or other applicable employment
contract and the latter to receive such retirement benefits as he
In case of retirement, the employee shall be entitled to receive such may have earned under existing laws and any collective bargaining
retirement benefits as he may have earned under existing laws and or other agreement (Art. 277, New Labor Code).
any collective bargaining or other agreement.
We agree with petitioner and the Solicitor General. Art. 287 of the Labor Code as
The Solicitor General, in his Manifestation in Lieu of Comment, 9 agrees with worded permits employers and employees to fix the applicable retirement age at
petitioner's contention that the law leaves to the employer and employees the fixing of below 60 years. Moreover, providing for early retirement does not constitute
the age of retirement. He cites Section 13, Rule I, Book VI of the Omnibus Rules diminution of benefits. In almost all countries today, early retirement, i.e., before age
Implementing the Labor Code, which reads: 60, is considered a reward for services rendered since it enables an employee to reap
the fruits of his labor — particularly retirement benefits, whether lump-sum or
Retirement — In the absence of any collective bargaining otherwise — at an earlier age, when said employee, in presumably better physical
agreement or other applicable agreement concerning terms and and mental condition, can enjoy them better and longer. As a matter of fact, one of
the advantages of early retirement is that the corresponding retirement benefits, In the absence of a retirement plan or agreement providing for
usually consisting of a substantial cash windfall, can early on be put to productive and retirement benefits of employees in the establishment, an employee
profitable uses by way of income-generating investments, thereby affording a more upon reaching the age of sixty (60) years or more, but not beyond
significant measure of financial security and independence for the retiree who, up till sixty-five (65) years which is hereby declared the compulsory
then, had to contend with life's vicissitudes within the parameters of his fortnightly or retirement age, who has served at least five (5) years in the said
weekly wages. Thus we are now seeing many CBA's with such early retirement establishment may retire . . . .
provisions. And the same cannot be considered a diminution of employment benefits.
The aforequoted provision makes clear the intention of spirit of the law to give
It is also further argued that, being a union member, private respondent is bound by employers and employees a free hand to determine and agree upon the terms and
the CBA because its terms and conditions constitute the law between the conditions of retirement. Providing in a CBA for compulsory retirement of employees
parties. 11 The parties are bound not only to the fulfillment of what has been expressly after twenty-five (25) years of service is legal and enforceable so long as the parties
stipulated but also to all the consequences which, according to their nature, may be in agree to be governed by such CBA. The law presumes that employees know what
keeping with good faith, usage and law. 12 It binds not only the union but also its they want and what is good for them absent any showing that fraud or intimidation
members. 13 Thus, the Solicitor General 14 said: was employed to secure their consent thereto.

Private respondent cannot therefore claim illegal dismissal when he On this point then, public respondent committed a grave abuse of discretion in
was compulsorily retired after rendering twenty-five (25) years of affirming the decision of the labor arbiter. The compulsory retirement of private
service since his retirement is in accordance with the CBA. respondent effected in accordance with the CBA is legal and binding.

We again concur with the Solicitor General's position. A CBA incorporates the WHEREFORE, premises considered, the petition is granted and the questioned
agreement reached after negotiations between employer and bargaining agent with Resolution is hereby set aside. No costs.
respect to terms and conditions of employment. A CBA is not an ordinary contract.
"(A)s a labor contract within the contemplation of Article 1700 of the Civil Code of the SO ORDERED.
Philippines which governs the relations between labor and capital, (it) is not merely
contractual in nature but impressed with public interest, thus it must yield to the
common good. As such, it must be construed liberally rather than narrowly and Narvasa, C.J., Davide, Jr., Melo and Francisco, JJ., concur.
technically, and the courts must place a practical and realistic construction upon it,
giving due consideration to the context in which it is negotiated and purpose which it Santos vs Servier
is intended to serve. 15
Facts:
Being a product of negotiation, the CBA between the petitioner and the union
intended the provision on compulsory retirement to be beneficial to the employees- Petitioner Ma. Isabel T. Santos was the Human Resource Manager of respondent Servier
union members, including herein private respondent. When private respondent ratified Philippines, Inc.
the CBA with the union, he not only agreed to the CBA but also agreed to conform to
and abide by its provisions. Thus, it cannot be said that he was illegally dismissed While having dinner, petitioner... complained of stomach pain, then vomited. Eventually,
when the CBA provision on compulsory retirement was applied to his case. she was brought to the hospital known as Centre Chirurgical de L'Quest where she fell into
coma for 21 days... at the Intensive Care Unit (ICU) for 52 days.
Incidentally, we call attention to Republic Act No. 7641, known as "The Retirement probable cause of her sudden attack was "alimentary allergy," as she had recently ingested a
Pay Law", which went into effect on January 7, 1993. Although passed many years meal of mussels which resulted in a concomitant uticarial eruption.
after the compulsory retirement of herein private respondent, nevertheless, the said
statute sheds light on the present discussion when it amended Art. 287 of the Labor Petitioner's hospitalization expenses, as well as those of her husband and son, were paid by
Code, to make it read as follows: respondent

Art. 287. Retirement — Any employee may be retired upon She was then confined at the St. Luke's Medical Center... for rehabilitation.[8] During the
reaching the retirement age established in the collective bargaining period of petitioner's rehabilitation, respondent continued to pay the former's salaries; and
agreement or other applicable employment contract. to assist her in paying her hospital bills.

Petitioner's... physician concluded that the former had not fully recovered mentally and
xxx xxx xxx physically. Hence, respondent was constrained to terminate petitioner's services effective
August 31, 1999... respondent offered a retirement package
Of the promised retirement benefits amounting to P1,063,841.76, only P701,454.89 was benefit plan is maintained by the employer; (2) the retiring official or employee has been in
released to petitioner's husband, the balance[11] thereof was withheld allegedly for taxation the... service of the same employer for at least ten (10) years; (3) the retiring official or
purposes. employee is not less than fifty (50) years of age at the time of his retirement; and (4) the
benefit had been availed of only once.
Petitioner, represented by her husband, instituted the instant case for unpaid salaries;
unpaid separation pay; unpaid balance of retirement package plus interest; insurance petitioner was qualified for disability retirement... petitioner was only 41 years of age; and
pension for permanent disability; educational assistance for her son; medical assistance; had been in the service for more or less eight (8) years.
reimbursement... of medical and rehabilitation expenses; moral, exemplary, and actual
damages, plus attorney's fees. the above provision is not applicable for failure to... comply with the age and length of
service requirements.
only on
Principles:
Issues:

the only issue proper for determination is the propriety of deducting P362,386.87 from her...
total benefits, for taxation purposes. SENTINEL INSURANCE COMPANY v. PORFIRIO M. BAUTISTA, GR No. L-55774, 1984-02-20
whether these benefits are taxable. Facts:
whether the retirement benefits are taxable.
Porfirio M. Bautista was hired as Legal Officer by Sentinel
Ruling:
In the course of his employment, Bautista handled a number of cases for which he was paid
On the basis of the above-mentioned retirement plan, respondent offered the petitioner a fifteen (15%) per cent on amounts recovered except for the four cases in question which,
retirement package which consists of retirement plan benefits, insurance pension, and according to Bautista, he deferred the billing and collection of his percentage on said cases...
educational assistance.[31] The amount of P1,063,841.76 represented the disability... because of his awareness of the tight financial condition of the company
retirement benefit provided for in the plan... the receipt of retirement benefits does not bar
the retiree from receiving separation pay. Separation pay is a statutory right designed to On March 29, 1979, petitioner applied for clearance to... terminate employment with the
provide the employee with the... wherewithal during the period that he/she is looking for Ministry of Labor and Employment but which was opposed by Bautista on May 31, 1979.
another employment. On the other hand, retirement benefits are intended to help the
employee enjoy the remaining years of his life, lessening the burden of worrying about his Bautista questioned the legality of his dismissal and at the same time asserted his claim for
financial support, and are a form of... reward for his loyalty and service to the employer... unpaid legal fee
they are not mutually exclusive.
Dissatisfied with the portion awarding the money claim, petitioner appealed to the National
only true if there is no specific prohibition against the payment of both benefits in the
Labor Relations Commission and argued that the Labor Arbiter erred in assuming that
retirement plan and/or in the Collective Bargaining
Bautista was entitled to... the legal fees irrespective of the means by which he effected
Agreement (CBA) recoveries for the company.

In the instant case, the Retirement Plan bars the petitioner from claiming additional benefits Issues:
on top of that provided for in the Plan.
the money claim is civil in character cognizable only by regular courts and therefore beyond
Section 2, Article XII of the Retirement Plan provides: the jurisdiction and competence of the Labor Arbiter
Section 2. NO DUPLICATION OF BENEFITS
Ruling:
There being such a provision,... petitioner is entitled only to either the separation pay under
the law or retirement benefits under the Plan, and not both. The Calderon case, however, is no longer controlling because the law upon which said
decision was based, Article 217 of the Labor Code as amended by PD No. 1367, has been
We answer in the affirmative. superceded by PD No. 1691 which took effect May 1, 1980 and which restored to the Labor
Arbiters original... and exclusive jurisdiction over claims, monetary or otherwise, provided by
Thus, for the retirement benefits to be exempt from the withholding tax, the taxpayer is
law or by appropriate agreement, arising from employer-employee relations, except those
burdened to prove the concurrence of the following elements: (1) a reasonable private
expressly excluded there... therefrom.[5]
(7) CONTRACTOR shall select, engage and discharge the guards, employees, or agents, and
Although the cause of action arose when PD No. 1367 was then the prevailing law and upon shall otherwise direct and control their services herein provided or heretofore to be set forth
which the Calderon case was premised, said Decree was no longer applicable when the case or prescribed. The determination of wages, salaries and compensation of the guards or
was resolved by the National Labor Rela... ions Commission on August 29, 1980. The law then employees of the CONTRACTOR shall be within its full control but shall in no way contravene
in force... was PD No. 1691. existing laws on the matter. It is further understood that CONTRACTOR as the employer of
the security guards agrees to comply with all relevant laws and regulations, including
Article 217 as amended by PD No. 1367 and PD No. 1691 was again amended by Batas compulsory coverage under the Social Security Act, Labor Code, as amended and the Medical
Pambansa Bilang 130 which took effect August 21, 1981. On June 1, 1982, said Article 217 Care Act, in its operations. Although it is understood and agreed between parties hereto that
was amended anew by Batas Pambansa Bilang 227 vesting on Labor Arbiters jurisdiction over CONTRACTOR in the performance of its obligations under this Agreement, is subject to the
cases that... workers may file involving wages, hours of work and other terms and conditions control and direction of PAL merely as to the result as to be accomplished by the work or
of employment and all money claims of workers, except claims for employees' services herein specified, and not as to the means and methods for accomplishing such
com-pensation, social security, medicare and maternity benefits. result, CONTRACTOR hereby warrants that it will perform such work or services in such
manner as will achieve the result herein desired by PAL.
the claim of 15% legal fees arose out of employer-employee relationship and clearly falls
within the coverage of Article 217 as amended by PD No. 1691 and Batas Pambansa Bilang (8) Discipline and administration of the security guards shall be the sole responsibility of the
227 CONTRACTOR to the end that CONTRACTOR shall be able to render the desired security
service requirements of PAL. CONTRACTOR, therefore, shall conform to such rules and
Principles: regulations that may be issued by PAL. For this purpose, Annex "A", which forms part of this
Agreement, contains such rules and regulations and CONTRACTOR is expected to comply
331 Phil. 937 with them. At its discretion, PAL may, however, work out with CONTRACTOR such rules and
regulations before their implementation.
DAVIDE, JR., J.:
(9) Should PAL at any time have any justifiable objection to the presence in its premises of
This is a petition for certiorari under Rule 65 of the Rules of Court to annul the decision of any of CONTRACTOR's officer, guard or agent under this Agreement, it shall send such
the Labor Arbiter dated 12 August 1991 in NLRC Case No. 00-11-06008-90 and the objection in writing to CONTRACTOR and the latter shall immediately take proper action.
resolutions of public respondent National Labor Relations Commission (NLRC) promulgated
on 27 October 1994 and 31 May 1995 dismissing the appeal filed by the petitioner and (10) The security guards employed by CONTRACTOR in performing this Agreement shall be
denying the motion for reconsideration, respectively. paid by the CONTRACTOR and it is distinctly understood that there is no employee-employer
relationship between CONTRACTOR and/or his guards on the one hand, and PAL on the
The dispute arose from these antecedents: other. CONTRACTOR shall have entire charge, control and supervision of the work and
services herein agreed upon, and PAL shall in no manner be answerable or accountable for
On 23 December 1987, private respondent Unicorn Security Services, Inc. (USSI) and any accident or injury of any kind which may occur to any guard or guards of the
petitioner Philippine Airlines, Inc. (PAL) executed a security service agreement.[1] USSI was CONTRACTOR in the course of, or as a consequence of, their performance of work and
designated therein as the CONTRACTOR. Among the pertinent terms and conditions of the services under this Agreement, or for any injury, loss or damage arising from the negligence
agreement are as follows: of or carelessness of the guards of the CONTRACTOR or of anyone of its employ to any
(4) The CONTRACTOR shall assign to PAL an initial force of EIGHTY ONE (81) bodies - which person or persons or to its or their property whether in the premises of PAL or elsewhere;
may be decreased or increased by agreement in writing - . It is, of course, understood that and the CONTRACTOR hereby covenants and agrees to assume, as it does hereby assume,
the CONTRACTOR undertakes to pay the wages or salaries and cost of living allowance of the any and all liability or on account of any such injury, loss or damage, and shall indemnify PAL
guards in accordance with the provisions of the Labor Code, as amended, the different for any liability or expense it may incur by reason thereof and to hold PAL free and harmless
Presidential Decrees, Orders and with the rules and regulations promulgated by competent from any such liability.
authorities implementing said acts, assuming all responsibilities therefor - .
xxx
xxx
(13) For and in consideration of the services to be rendered by CONTRACTOR under these
(6) Without any expense on the part of PAL, CONTRACTOR shall see to it that the guards presents, PAL shall pay CONTRACTOR the amount of PESOS NINE & 40/100 CTVS (P9.40) PER
assigned to PAL - are provided, at the expense of CONTRACTOR, with the necessary firearms, HOUR multiplied by 905 hours equivalent to PESOS TWO HUNDRED SEVENTY FIVE
ammunitions and facilities needed for the rendition of the security services as aforesaid; THOUSAND NINE HUNDRED NINE & 58/100 CTVS, Philippine currency, - (P275,909.58) the
basis of eight (8) working hours per office/guard a day, Sundays and Holidays included, the
same to be payable on or before the 15th of each month for services on the first half of the 7. Complainants are now compelled to litigate their plainly valid, just or demandable claim
month and on or before the end of the month for services for the 2nd half of the month. on account of which services of counsel have been required and thereby obligated
themselves to pay, for and as attorney's fees, the sum equivalent to ten percent (10%) of
Nothing herein contained shall prevent the parties from meeting for a review of the rates whatever sums or sum may be recovered in the case.
should circumstances warrant. The complaint was docketed as NLRC-NCR Case No. 00-11-06008-90 and assigned to Labor
Arbiter Cornelio L. Linsangan.
xxx
PAL filed a motion to dismiss the complaint[3] on the grounds that the Labor Arbiter had no
(20) This Agreement shall take effect on 06 December 1987 an shall be in force for a period jurisdiction over the subject matter or nature of the complaint and that USSI had no cause of
of SIX (6) MONTHS - 05 JUNE 1988 thereafter it shall continue indefinitely unless sooner action against PAL. In amplification thereof, PAL argued that the case involved the
terminated upon thirty (30) days notice served upon by one party to the other, except as interpretation of the security service agreement, which is purely civil in character and falls
provided for in Articles 16, 17 & 18 hereof. outside of the Labor Arbiter's jurisdiction. It is clear from Article 217 of the Labor Code that
Sometime in August of 1988, PAL requested 16 additional security guards. USSI provided for claims to be within the jurisdiction of Labor Arbiters, they must arise from an employer-
what was requested; however, PAL insisted that what USSI did was merely to pick out 16 employee relationship. PAL claimed that USSI did not allege the existence of an employer-
guards from the 86 already assigned by it and directed them to render overtime duty. employee relationship between PAL and USSI or its guards, and that in fact, paragraph 10 of
the agreement provides that there is no employer-employee relationship between the
On 16 February 1990, PAL terminated the security service agreement with USSI without CONTRACTOR and/or his guards on the one hand and PAL on the other.
giving the latter the 30-day prior notice required in paragraph 20 thereof. Instead, PAL paid
each of the security guards actually assigned at the time of the termination of the agreement In its Opposition,[4] USSI pointed out that PAL forgot or overlooked the fact that "insofar as
an amount equivalent to their one-month salary to compensate for the lack of notice. labor standards, benefits, etc. have to be resolved or adjudicated, liability therefor is shifted
to, or assumed by respondent [herein petitioners] which, in law, has been constituted as an
In November 1990, USSI, allegedly "in its capacity as Trustee for Sixteen or so Security indirect employer."
Guards," filed with the NLRC Arbitration Branch, National Capital Region, a complaint[2]
against PAL for the recovery of P75,600.00 representing termination pay benefit due the PAL filed a supplemental motion to dismiss[5] wherein it cites the following reasons for the
alleged 16 additional security guards, which PAL failed and refused to pay despite demands. dismissal of the complaint: (1) the clear stipulations in the agreement (paragraphs 4 and 10)
It further asked for an award of not less than P15,000.00 for each of the 16 guards as that there exists no employer-employee relationship between PAL on the one hand and USSI
damages for the delay in the performance of PAL's obligation, and also for attorney's fees in and the guards on the other; (2) there were no 16 additional guards, as the 16 guards who
an amount equivalent to 10% of whatever might be recovered. Pertinent portions of the were required to render 12-hour shifts were picked out from the original 86 guards already
complaint read as follows: assigned and were already given a one-month salary in lieu of the 30-day notice of
3. By virtue of said contract and upon its effectivity, respondent required eighty-six (86) termination of the agreement; (3) USSI had no legal personality to file the case as alleged
security guards whom complainant USSI supplied; on or sometime in August 1989, trustee of the 16 security guards; and (4) the real parties in interest -- the 16 security guards -
respondent asked for sixteen (16) security guards to render twelve (12) hours each. - never showed any interest in the case either by attending any hearing or conference, or by
following up the status of the case.
4. In February 1990 and for reasons of its own, respondent caused to terminate not only the
contract but also the services of the security guards; in effecting such termination, said Attached to the supplemental motion dismiss were, among other things, xerox copies of
respondent caused to pay the equivalent of one (1) month's notice unto all the security confirmation letter of USSI to PAL to show that no additional guards were in fact provided.[6]
guards, except the 16 who, as aforementioned were rendering 12 hours each from date of
assignment up to and until their termination. Labor Arbiter Linsangan did not resolve the motion to dismiss and the supplemental motion
to dismiss. On 12 August 1991, he handed down a decision[7] ordering PAL to pay: (1) the
5. As computed, the termination pay benefits due the 16 security guards amount to sum of P75,600.00 representing the equivalent of one-month's separation pay due the 16
P75,600.00, more or less, which, despite demands, respondent fails, neglects or refuses to individual security guards, plus, 10% interest from the date of filing of the case until the
pay, as it continue refusing, failing or neglecting to so do up to the present time. whole obligations shall have been fully settled; (2) the sum of P5,000.00 by way of exemplary
damages due each of the 16 security guards; and (3) another sum equivalent to 10% of the
6. Respondent has not only incurred in delay in the performance of its obligation but also total award for and as attorney's fees.
contravened the tenor thereof; hence, complainants are, by law, entitled to be indemnified
with damages for no less than P15,000.00 each for all complainants though the correct It was in that decision that Labor Arbiter Linsangan mentioned for the first time that the
amount is left solely to the sound discretion of the Honorable Labor Arbiter. resolution of the motion to dismiss and supplemental motion to dismiss "was deferred until
[the] case is decided on the merits" considering "the ground not to be indubitable." In
holding that he had jurisdiction over the case, he stated:
As heretofore and invariably held in similar cases, the issue of whether or not Labor Arbiters until 2 September 1991 to appeal; hence, the appeal interposed on 3 September was late by
have jurisdiction over money claims affecting security guards assigned by security agencies one day. The decision had then become final and executory.
(like complainant herein) to their client-companies such as PAL is, more or less, settled,
especially since, as the law views such as peculiar relationship, such money claims insofar as In its opposition[11] to this motion, PAL insisted that it received a copy of the decision on 26
they have to be paid, are the ultimate responsibility of the client-firms. In effect, the security August 1991; thus, it had until 5 September 1991 to file its appeal.
guards have been constituted as indirect employees of the client just as the client becomes
the indirect employer of the guards. Art. 107 and 109 of the Labor Code expressly provide On 30 September 1991, Labor Arbiter Linsangan issued a writ of execution.[12]
that".
To justify the awards, Labor Arbiter Linsangan opined: On 1 October 1991, PAL filed a motion to quash[13] the writ of execution. It tried to explain
Evidence adduced clearly show that sometime in December 1987, aforementioned security therein why it thought all along that it received a copy of the decision on 26 August 1991,
service contract was executed, based on which the required number of security guards were thus:
assigned to, or posted at, the various premises of respondent -- PAL. Said number of security 4. Upon investigation the undersigned counsel learned that on 23 August 1991 (Friday) a
guards may, as the contract provides, be increased or reduced at respondent's request, such server-messenger went to PAL Legal Department to serve said decision. The receiving clerks
that the original number of eighty-six (86) guards, an additional sixteen (16) were needed at that time were all out of the office so that the server persuaded a secretary, Ms. April Rose
and, accordingly supplied who, pursuant to PAL's instructions, were required to render del Rosario to receive the same, notwithstanding the fact that Ms. Del Rosario told him
twelve (12) hours each, per day. (server) that she was not authorized to receive documents for an in behalf of PAL. Ms. Del
Rosario then stamped the date of receipt on the service's copy without stamping (the date of
In February 1990, and for reasons of its own, PAL caused to terminate, as it did, the contract receipt) PAL's copy of the decision which was left by the server. Thereafter, Ms. Del Rosario
of security service. Unequivocably, it caused to pay the separation pay benefits of the 86- placed PAL's copy of the Decision on the incoming documents rack of the receiving clerk.
security guards for the equivalent amount of one (1) month's pay. As to the additional 16, it
failed and refused to grant similar equivalent, without any valid reasons therefor. Attached herewith is the affidavit of Ms. Del Rosario and as Annex "A" hereof.

As earlier stated, respondent opted to rely solely on the ground set forth in its Motion to 5. On 26 August 1991 (Monday), the receiving clerk/messenger Mr. Greg Soriano upon
Dismiss as well as Supplement thereto. It failed to file, despite directive made thereon, its finding the Decision among the documents in the incoming documents rack, immediately
position paper. Neither did it submit, nor adduce, evidence (documentary or otherwise) to stamped "Received 26 August 1991" thereon, on the honest and sincere belief that the same
rebut or controvert complainant's claims especially since the money equivalent of the one just arrived that day (26 August 1991). He then forwarded the same to the secretary of the
month separation pay due the 16 guards has been duly quantified as amounting to Seventy undersigned counsel.
Five Thousand Six Hundred (P75,600.00) Pesos. Thus established, it is clear that there was
absolutely no legal/justifiable reason why said 16 guards applied and who rendered 12 hours Attached herewith is the affidavit of Mr. Greg Soriano marked as Annex "B" hereof.
each per day had to be discriminated against.
6. The undersigned counsel believing that the said decision was received on 26 August 1991
Following PAL's failure or refusal to pay, demands were made by complainant, asking at the reckoned/counted the ten (10) day period for appeal from said date.
same time why that was so. Conceivably, respondent has smarted itself on its mistaken
belief that there was, as between the guards and itself, no employer-employee relationship 7. Considering the foregoing circumstances, the undersigned counsel's innocent reliance on
and, hence, there is no legal basis for it to pay. If that was so, why did it pay separation pay the date of receipt stamped on the copy of the Decision furnished him was clearly due to an
unto the 86 regular employed guards. innocent mistake and/or excusable neglect. Hence, justice and equity dictates that
respondent PAL should be considered to have filed its Appeal within the reglementary period
PAL being widely known as a progressively-minded employer, it should be the first to show for Appeal.[14]
good example for emulation. In this instant case, it did not; in fact, its actuations were not On 8 October 1991, Labor Arbiter Linsangan issued an order[15] denying the motion to
consistent with good faith. It should, therefore, be held liable for exemplary damages and quash.
having required complainant to litigate a plainly valid, just or demandable claim, an award for
attorney's fees must perforce be assessed. On 10 October 1991, PAL appealed[16] to the NLRC the aforesaid order of 8 October 1991 on
On 3 September 1991, PAL filed its Appeal[8] wherein it indicated that it received a copy of the ground that it was issued with grave abuse of discretion.
the decision on 26 August 1991. Attached thereto was a machine copy of the Notice of
Judgment/Final Order, with the date of its receipt, i.e., 26 August 1991,[9] having been In its resolution of 27 October 1994,[17] the Second Division of the NLRC dismissed PAL's
stamped on the upper right hand corner by PAL's Legal Department. appeal for having been filed out if time. It sustained the labor Arbiter's finding that PAL had
received a copy of the decision on 23 August 1991, and hence the last day to appeal was 2
USSI countered this Appeal with a motion for execution of judgment[10] on the ground that September 1991. It ruled that whether or not the decision was received by an employee
since PAL, received a copy of the decision on the 23rd, not on the 26th, of August 1991 it had
other than the receiving clerk or messenger was of no moment, as the proper performance Articles 107 and 109 of the Labor Code which provide for joint and several liability for
of employee's duties was PAL's concern. payment of wages by the direct and indirect employer find no application in the present case
because the 16 security guards employed by USSI were not after unpaid wages; and that in
On 31 May 1995, the NLRC denied the motion for reconsideration[18] for the reason that it the interest of justice and considering that the appeal was filed only one day late, the rule on
cannot accept PAL's excuse as it may "open the floodgates to abuse"; and that the lapse of perfection of appeals should have been relaxed to prevent a miscarriage of justice.
the period to appeal had already deprived the Commission of jurisdiction over the case.[19]
In view of the stand of the Office of the Solicitor General, we advised public respondents to
PAL then filed this special civil action for certiorari under Rule 65 of the Rules of Court file their own comment if they so desired.
alleging that (1) public respondents committed serious and patent error in failing to declare
that the Labor Arbiter had no jurisdiction over the instant case; (2) The Labor Arbiter gravely In their Comment, the NLRC and Labor Arbiter Linsangan maintain that they had jurisdiction
abused its discretion in ordering PAL to pay the separation pay of the 16 security guards over the case because of Articles 107 and 109 of the Labor Code which constitute PAL as
assigned at PAL's premises by USSI; and (3) respondent NLRC committed grave abuse of indirect employer of the 16 security guards, there being a question involving separation pay
discretion in declaring PAL's appeal to have been filed out of time. due the latter; that the 16 security guards were entitled to separation pay, because PAL paid
the other 86 security guards when the service agreement was terminated; and that for the
PAL argues that since USSI's cause of action was founded on the security service agreement, NLRC to excuse the delay of one day in filing the appeal would open the floodgates of abuse.
and that thereunder no employer-employee relationship existed between PAL and the
security guards who were USSI's employees, the Labor Arbiter had no jurisdiction over the The instant petition is impressed with merit.
complaint. Moreover, assuming arguendo that the claims of the security guards were valid,
USSI had no personality to file the complaint, for there is nothing whatsoever to show that it We agree with petitioner PAL that the Labor Arbiter was without jurisdiction over the subject
was expressly authorized by the security guards to act as their "trustee." matter of NLRC-NCR Case No. 00-11-06008-90, because no employer-employee relationship
existed between PAL and the security guards provided by USSI under the security service
As to the second assigned error, PAL asserts that it is not liable to pay separation pay because agreement, including the alleged 16 additional security guards.
(1) it was not the employer of the security guards; (2) even as an indirect employer, as held
by the Labor Arbiter, its liability was limited to violations of labor standards law, and non- We have pronounced in numerous cases[21] that in determining the existence of an
payment of the separation pay is not a violation of the said law; (3) the security service employer-employee relationship, the following elements are generally considered: (1) the
agreement with USSI did not provide for payment of separation pay; (4) the payment made selection and engagement of the employee; (2) the payment of wages; (3) the power to
to the 86 security guards upon the termination of the agreement without the prior 30-day dismiss; and (4) the power to control the employee's conduct.
notice was not for separation pay but a benefit in lieu of the 30-day notice required under
paragraph 20 of the agreement; and (5) since PAL was not the employer of the security In the instant case, the security service agreement between PAL and USSI provides the key to
guards, in no way could it terminate their services. such consideration. A careful perusal thereof, especially the terms and conditions embodied
in paragraphs 4, 6, 7, 8, 9, 10, 13 and 20 quoted earlier in this ponencia, demonstrates
In its third assigned error, PAL submits that rules of procedure ought not to be applied in a beyond doubt that USSI-and not PAL - was the employer of the security guards. It was USSI
very rigid technical sense, since they are used only to help secure and not override which (a) selected, engaged or hired and discharged the security guards; (b) assigned them to
substantial justice, especially in this case where the appeal was meritorious. Moreover, the PAL according to the number agreed upon; (c) provided, at its own expense, the security
delay in the perfection of the appeal, reckoned from the finding of the Labor Arbiter, was guards with firearms and ammunitions; (d) discipline and supervised them or controlled their
only one day; but if reckoned from what its counsel innocently believed to be PAL's date of conduct; and (e) determined their wages, salaries, and compensation; and (f) paid them
receipt of the decision, which was 26 August 1991, the appeal could be said to have been salaries or wages. Even if we disregard the explicit covenant in said agreement that "there
seasonably filed. exist no employer-employee relationship between CONTRACTOR and/or his guards on the
one hand, and PAL on the other" all other considerations confirm the fact that PAL was not
In its Comment, USSI points out that the grounds relied upon by PAL are based on factual a the security guards' employer. Analogous to the instant case is Canlubang Security Agency
issue, namely, the discrimination made by PAL in paying the 86 and not the 16 security Corp. vs. NLRC.[22]
guards. It argues that the case touched upon the rights of the 16 security guards as
employees; thus, the same was within the jurisdiction of the Labor Arbiter. As regards PAL's Considering then that no employer-employee relationship existed between PAL and the
plea for the relaxation of the rule on perfection of appeals, USSI contends that the negligence security guards, the Labor Arbiter had no jurisdiction over the claim in NLRC-NCR Case No.
of PAL's counsel should not be deemed "compelling reason to warrant relaxation of the rule." 00-11-06008-90. Article 217 of the Labor Code (P.D. No. 442), as amended, vests upon Labor
Arbiter exclusive original jurisdiction only over the following:
In its Manifestation and Motion in Lieu of Comment,[20] the Office of the Solicitor General 1. Unfair labor practice cases;
agrees with PAL that the Labor Arbiter did not have jurisdiction over the complaint because
there was no employer-employee relationship between PAL and the 16 security guards; that 2. Termination disputes;
of employment for work done or to be done, or for services rendered or to be rendered and
3. If accompanied with a claim for reinstatement, those cases that workers may file involving includes the fair and reasonable value, as determined by the Secretary of Labor, of board,
wages, rates of pay, hours of work and other terms and conditions of employment; lodging, or other facilities customarily furnished by the employer to the employee."

4. Claims for actual, moral, exemplary and other forms of damages arising from employer- No valid claim for wages or separation pay can arise from the security service agreement in
employee relations; question by reason of its termination at the instance of PAL. The agreement contains no
provision for separation pay. A breach thereof could only give rise to damages under the
5. Cases arising from any violation of Article 264 of this Code, including questions involving Civil Code, which is cognizable by the appropriate regular court of justice. Besides, there is
legality of strikes and lockouts; and no substantial proof that USSI in fact provided 16 additional guards. On the contrary, PAL
was able to prove in the annexes attached to its supplemental motion to dismiss that the 16
6. Except claims for Employees Compensation, Social Security, Medicare and maternity guards were actually picked out from the original group and were just required to render
benefits, all other claims, arising from employer-employee relations, including those of overtime service.
persons in domestic or house hold service, involving an amount exceeding five thousand
pesos(P5,000.00) regardless of whether accompanied with a claim for reinstatement. The Labor Arbiter's lack of jurisdiction was too obvious from the allegations in the complaint
In all these cases, an employer-employee relationship is an indispensable jurisdictional and its annex (the security service agreement) in NLRC-NCR Case No. 00-11-06008-90. The
requisite. Labor Arbiter then should have forthwith resolved the motion to dismiss and the
supplemental motion to dismiss. As correctly pointed out by PAL, under Section 15 of Rule V
The Labor Arbiter cannot avoid the jurisdictional issue or justify his assumption of jurisdiction of the New Rules of Procedure of the NLRC, any motion to dismiss on the ground of lack of
on the pretext that PAL was the indirect employer of the security guards under Article 107 in jurisdiction, improper venue, res judicata, or prescription shall be immediately resolved by
relation to Articles 106 and 109 of the Labor Code and, therefore, it is solidarily liable with the Labor Arbiter by a written order. Yet, the Labor Arbiter did not, and it was only in his
USSI. We agree with the Solicitor General that these Articles are inapplicable to PAL under decision that he mentioned that the resolution of the motion to dismiss "was deferred until
the facts of this case. Article 107 provides: this case is decided on the merits" because the ground thereof was not "indubitable." On
ART. 107. Indirect employer. -- The provisions of the immediately preceding Article shall this score the Labor Arbiter acted with grave abuse of discretion for disregarding the rules he
likewise apply to any person, partnership, association or corporation which, not being an was bound to observe.
employer, contracts with an independent contractor for the performance of any work, task,
job or project. We shall now turn to the issue of tardiness of the appeal. The record does indeed show that
The preceding Article referred to, which is Article 106, partly reads as follows: on the original copy of the Notice of Judgment/Final Order,[23] there is stamped by the PAL
ART. 106. Contractor or subcontractor. -- Whenever an employer enters into a contract with Legal Department the date of its receipt of the decision, viz., "AUG. 23 1991,"
another person for the performance of the former's work, the employees of the contractor
and of the latter's subcontractor, if any, shall be paid in accordance with the provisions of It is not also denied by respondents that on the right upper hand corner of PAL's copy of the
this Code. Notice of Judgment/Final Orders,[24] there is stamped the date of receipt thereof by PAL
Legal Department, viz., "AUG. 26 1991." PAL explained how this discrepancy occurred and
In the event that the contractor or subcontractor fails to pay the wages of his employees in how its counsel was misled into believing that PAL received a copy of the decision only on 26
accordance with this Code, the employer shall be jointly and severally liable with his August 1991. This belief in good faith rendered excusable any negligence it might have
contractor or subcontractor to such employees to the extent of the work performed under committed. Besides, the delay in the perfection of the appeal was only one day. Considering
the contract, in the same manner and extent that he is liable to employees directly employed that the Labor Arbiter had no jurisdiction over the subject matter of NLRC-NCR Case No. 00-
by him. 11-06008-90 and that the 16 security guards are not in fact entitled to separation pay under
While USSI is an independent contractor under the security service agreement and PAL may the security service agreement, the higher interest of justice favors a relaxation of the rule on
be considered an indirect employer, that status did not make PAL the employer of the perfection of appeals in labor cases.
security guards in every respect. As correctly posited by the Office of the Solicitor General,
PAL may be considered an indirect employer only for purposes of unpaid wages since Article While it is an established rule that the perfection of an appeal in the manner and within the
106, which is applicable to the situation contemplated in Section 107, speaks of wages. The period prescribed by law is not only mandatory but jurisdictional, and failure to perfect an
concept of indirect employer only relates or refers to the liability for unpaid wages. Read appeal has the effect of rendering the judgment final and executory, it is equally settled that
together, Articles 106 and 109 simply mean that the party with whom an independent the NLRC may disregard the procedural lapse where there is an acceptable reason to excuse
contractor deals is solidarily liable with the latter for unpaid wages, and only to that extent tardiness in the taking of the appeal.[25] Among the acceptable reasons recognized by this
and for that purpose that the latter is considered a direct employer. The term "wage' is Court are (a) counsel's reliance on the footnote of the notice of the decision of the Labor
defined in Article 97(f) of the Labor Code as "the remuneration of earnings, however Arbiter that "the aggrieved party may appeal" within ten (10) working days";[26] (b)
designated, capable of being expressed in terms of money, whether fixed or ascertained on a fundamental consideration of substantial justice;[27] (c) prevention of miscarriage of justice
time, task, piece, or commission basis, or other method of calculating the unwritten contract or of unjust enrichment, as where the tardy appeal is from a decision granting separation pay
which was already granted in an earlier final decision;[28] and (d) special circumstances of which of the two, the MOLE (now DOLE) and the SEC has jurisdiction over the present
the case combined with its legal merits[29] or the amount and the issue involved.[30] A one- controversy.
day delay in the perfection of the appeal was excused in Pacific Asia Overseas Shipping Corp.
vs. NLRC,[31] Insular life Assurance Co. vs. NLRC,[32] and City Fair Corp vs. NLRC.[33] Ruling:

In the instant case, the Labor Arbiter's lack of jurisdiction -- so palpably clear on the face of when a case is between... a stockholder and the corporation of which he holds stocks, the
the complaint -- and the perpetuation of unjust enrichment if the appeal is disallowed are controversy is intracorporate and well within the jurisdiction of the SEC.[11
enough combination of reasons that warrant a relaxation of the rules on perfection of
appeals in labor cases. These rulings are in consonance with the following provisions of

WHEREFORE, the instant petition is hereby GRANTED. The questioned decision of the Labor Presidential Decree No. 902-A which took effect, on March 11, 1976:
Arbiter dated 12 August 1991 and the resolution of the Second Division of the National Labor
Relations Commission promulgated on 27 October 1994 and 31 May 1995 are hereby SET "Sec. 5.
ASIDE, and NLRC-NCR Case No. 00-11-06008-90 is DISMISSED.
The SEC, being clothed with additional adjudicatory powers over intracorporate and...
SO ORDERED. kindred disputes to promote dispatch arising from expertise enhanced by specialization in
the settlement of said controversies,[13] is the proper agency to settle the controversy in this
Narvasa, C.J. (Chairman), Melo, Francisco and Panganiban, JJ., concur. case.

CAGAYAN DE ORO COLISEUM v. OFFICE OF MINISTER OF LABOR, GR No. 71589, 1990-12-17 Although the reliefs sought by Chaves appear to fall under the jurisdiction of the labor arbiter
as they are claims for unpaid salaries and other remunerations for services rendered, a close
Facts: scrutiny thereof shows that said claims are actually part... of the perquisites of his position in,
and therefore interlinked with his relations with the corporation.
Cagayan de Oro Coliseum, Inc.
Principles:
is a corporation duly organized and existing under Philippine laws
Facts:
Angel Chaves, on the other hand, is an incorporator and major stockholder of the corporation
who, for... sometime, served as its director and officer. Mainland Construction Co., Inc. is a domestic corporation

Chaves held the position of president until the end of his term in February, 1977 Its principal line... of business is the general construction of roads and bridges and the
operation of a service shop for the maintenance of equipment.
Shortly after Chaves assumed the presidency, or on April 8, 1976, the Board of Directors
passed a resolution fixing the monthly compensation of the president at P500.00 and his Respondents on the other hand, are the surviving heirs of complainant, Ernesto Movilla, who
monthly allowance died during the pendency of the action with the

Claiming that he had not been paid for services rendered, Chaves filed on June 3, 1977 a Labor Arbiter.
letter complaint with the Field Services Division of the then Department of Labor, Regional
Office Ernesto Movilla, who was a Certified Public Accountant during his lifetime, was hired as such
by Mainland in 1977. Thereafter, he was promoted to the position of Administrative Officer
1979, the labor arbiter rendered a... decision awarding Chaves P5,500.00 as salary from with a monthly salary of P4,700.00
March 13, 1976 to February 14, 1977, P462.50 as 13th month pay, P1,700 as monthly
allowance from February 1976 to June 1977, and P3,100 as per diem compensation from On April 12, 1987... the Board of Directors elected Ernesto Movilla as Administrative
February 1976 to June 19,... 1977 Manager.[3] He occupied the said position up to the time of his death.

Issues: On April 2, 1991, the Department of Labor and Employment (DOLE) conducted a routine
inspection on petitioner corporation and found that it committed such irregularities in the
conduct of its business
On the basis of this finding, petitioner corporation was ordered by DOLE to pay to its thirteen Nestlé Philippines, Inc. vs. NLRC LABOR INJUNCTION (Issuing Agency)
employees, which included Movilla, the total amount of P309,435.89, representing their The power of the NLRC to enjoin or restrain the commission of any or all prohibited or
salaries, holiday pay, service incentive leave pay differentials, unpaid wages and 13th unlawful acts as provided in Art. 218 of the Labor Code, can only be exercised in a labor
month... pay. dispute.
NESTLÉ PHILIPPINES, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,
All the employees listed in the DOLE's order were paid by petitioner corporation, except EUGENIA C. NUNEZ, LIZA T. VILLANUEVA, EMMANUEL S. VILLENA, RUDOLPH C. ARMAS,
Ernesto Movilla. RODOLFO M. KUA and RODOLFO A. SOLIDUM, respondents.
195 SCRA 340
On October 8, 1991, Ernesto Movilla filed a case against petitioner corporation and/or Lucita, |
Robert, and Ellen, all surnamed Carabuena, for unpaid wages, separation pay and attorney's G.R. No. 85197
fees, with the Department of Labor and Employment, Regional Arbitration, Branch XI, Davao
March 18, 1991 Ponente: GRIÑO-AQUINO,
City. J.

Ernesto Movilla died while the case was being tried by the Labor Arbiter and was promptly NATURE OF CASE
substituted by his heirs, private respondents herein, with the consent of the Labor Arbiter. PETITION for certiorari to review the resolutions of the National Labor Relations Commission.
BRIEF
The Labor Arbiter rendered judgment on June 26, 1992, dismissing the complaint on the This petition for certiorari seeks a review of the resolutions dated May 28, 1988 and
ground of lack of jurisdiction. September 1, 1988 of the National Labor Relations Commission (NLRC) in Injunction Case No.
1582 granting the injunction prayed for by the private respondents, to hold in abeyance the
The NLRC ruled that the issue in the case was one which involved a labor dispute between an cancellation of their car loans and payments of the monthly amortizations thereon pending
employee and petitioner corporation and, thus, the NLRC had jurisdiction to... resolve the the resolution of their complaints for illegal dismissal.
case. FACTS
The private respondents were employed by the petitioner either as sales representatives or
Issues: medical representatives. By reason of the nature of their work they were each allowed to
avail of the comp
the controversy presented by complainant is intra-corporate in nature and is within the any’s car loan polic
jurisdiction of the Securities and Exchange Commission y where the company advances the purchase price of a car to be paid back by the employee
through monthly deductions from his salary, the company retaining the ownership of the
Ruling: motor vehicle until it shall have been fully paid for. All o
f the private respondents availed of the petitioner’s car loan policy.
We find for the respondents Private respondents Nuñez, Villanueva, Villena and Armas were dismissed from the service
for having participated in an illegal strike. Respondents Kua and Solidum were also dismissed
The fact that the parties... involved in the controversy are all stockholders or that the parties for certain irregularities. All the private respondents filed complaints for illegal dismissal in
involved are the stockholders and the corporation does not necessarily place the dispute the Arbitration Branch of the NLRC. The Labor Arbiter dismissed their complaints and upheld
within the ambit of the jurisdiction of SEC the legality of their dismissal. They appealed to the NLRC where their appeals are still
pending. In the Notices of Dismissal which they received from Nestlé, the private
In the case at bench, the claim for unpaid wages and separation pay filed by the complainant respondents had been directed to either settle the remaining balance of the cost of their
against petitioner corporation involves a labor dispute. It does not involve an intra-corporate respective cars, or return them to the company for proper disposition. As they failed and
matter, even when it is between a stockholder and a corporation refused to avail of either option, the company filed in the Regional Trial Court of Makati a
civil suit to recover possession of the cars. The Court issued an Order directing the Deputy
Moreover, there was no showing of any change in the duties being performed by Sheriff to take the motor vehicles into his custody. The private respondents sought a
complainant as an Administrative Officer and as an Administrative Manager after his temporary restraining order in the NLRC to stop the company from cancelling their car loans
election... by the Board of Directors. and collecting their monthly amortizations pending the final resolution of their appeals in
the illegal dismissal case which was granted by the NLRC en banc. The company filed a
Principles: motion for reconsideration, but it was denied for tardiness. Hence, this petition for certiorari
alleging that the NLRC acted with grave abuse of discretion amounting to lack of jurisdiction
when it issued a labor injunction without legal basis and in the absence of any labor dispute
related to the same. The private respondents, in their comment on the petition, alleged that made by thecorporation for payment. Private respondents have not presented a
there is a labor dispute between the petitioner and the private respondents and that their resolution of theboard of directors of respondent corporation calling for the
default in paying the amortizations for their cars was brought about by their illegal dismissal payment of the unpaidsubscriptions. It does not even appear that a notice of such
from work by the petitioner as punishment for their participation in the illegal strike. call has been sent topetitioner by the respondent corporation. As there was no
ISSUE/s of the CASE notice or call for thepayment of unpaid subscriptions, the same is not yet due and
Whether NLRC gravely abused its discretion and exceeded its jurisdiction by issuing the writ payable.Even if there was a call for payment, the NLRC cannot validly set it off
of injunction against thewages and other benefits due petitioner. Article 113 of the Labor Code
ACTION/S OF THE COURT allows such adeduction from the wages of the employees by the employer, only in
threeinstance
NLRC:
Granted the petition for injunction DOROTEO OCHEDA v. CA, GR No. 85517, 1992-10-16
SC:
The questioned resolution of the NLRC in Injunction is hereby annulled and set aside. Facts:
COURT RATIONALE ON THE ABOVE CASE
The late Eduardo Santos was, at the time of his death, employed as a painter by the
Nestlé’s demand for payment of the private respondents’ amortizations on their car loans, petitioner who was a sub-contractor for the painting job
or, in the alternative, the return of the cars to the company, is not a labor, but a civil, dispute.
It involves debtor-creditor relations, rather than employee-employer relations. The NLRC The C.E. Construction Corporation, Inc. (CECCI) was... the principal contractor thereof by
gravely abused its discretion and exceeded its jurisdiction by issuing the writ of injunction to virtue of a contract it entered into with M.J. Development Corporation, the owner of the
stop the company from enforcing the civil obligation of the private respondents under the building.
car loan agreements and from protecting its interest in the cars which, by the terms of those
agreements, belong to it (the company) until their purchase price shall have been fully paid When the painting job was almost complete,... the petitioner trimmed his work force to two
by the employee. The terms of the car loan agreements are not in iss (2) employees, Hernani Gozun and Eduardo Santos;... he later died.

ERNESTO M. APODACA, petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION, JOSE M. the spouses Catalino and Ester Santos, together with Wilma Palabasan-Santos, parents and
MIRASOL andINTRANS PHILS., INC., respondents.G.R. No. 80039 April 18, 1989GANCAYCO, widow, respectively, of Eduardo, filed a Complaint[1] for damages against Doroteo Ocheda
J.: and CECCI before the then
FACTS:
Petitioner was employed in respondent corporation. He was persuaded byrespondent Court of First Instance (now Regional Trial Court) of Pampanga... the trial court rendered its
Mirasol to subscribe to 1,500 shares or for a total of P150,000.00. Hepaid P37,500.00. On decision[7] finding both the petitioner and CECCI liable for the death of Eduardo.
September 1, 1975, petitioner was appointed President andGeneral Manager of the
respondent corporation. However, on January 2, 1986, heresigned. petitioner instituted with Petitioner and CECCI appealed this adverse decision to the respondent Court of Appeals...
the NLRC a complaint against privaterespondents for the payment of his unpaid wages, his petitioner... submits... that since the monetary award is sought in... connection with the
cost of living allowance, thebalance of his gasoline and representation expenses and his employer-employee relationship which existed between him and the late Eduardo Santos,
bonus compensationfor 1986. Private respondents admitted that there is due to petitioner only Labor Arbiters, pursuant to Article 217 of the Labor Code of the Philippines as it was
the amount of P17,060.07 but this was applied to the unpaid balance of his subscription in then worded,[18] have original... and exclusive jurisdiction over them
theamount of P95,439.93. Petitioner questioned the set-off alleging that there was nocall or
notice for the payment of the unpaid subscription and that, accordingly, thealleged Issues:
obligation is not enforceable.
ISSUES: trial court's jurisdiction over an action for damages arising from a quasi-delict which resulted
(1) Whether or not NLRC has jurisdiction to resolve a claim for non-payment of stock in the death of an employee while in the performance of his duty
subscriptions to a corporation. (2) If so, whether or not anobligation arising therefrom be
offset against a money claim of an employee againstthe employer. LOWER COURT ERRED IN HOLDING THAT THE REGIONAL TRIAL COURT HAD JURISDICTION
RULING: OVER THE COMPLAINT FILED;
(1) NLRC has no jurisdiction to determine such intra-corporate disputebetween the
stockholder and the corporation as in the matter of unpaidsubscriptions. This Ruling:
controversy is within the exclusive jurisdiction of the Securitiesand Exchange
Commission.(2) No. the unpaid subscriptions are not due and payable until a call is We find no merit in the petition.
"The Court agrees with defendants that the complaint alleges unfair labor practices which
Under the said provision, "all money claims of workers" and "all other claims arising from under Art. 217 of the Labor Code, as amended by P.D. 1691, has vested original and exclusive
employer-employee relations" are exclusively cognizable by Labor Arbiters jurisdiction to Labor Arbiters, and Art. 248, thereof . . . 'which may include claims for...
damages and other affirmative reliefs.'... the alleged defamatory remarks made by defendant
We ruled in Getz Corp. vs. Court of Appeals[19] that pursuant to P.D. No. 1691, such claims Cosme de Aboitiz were said to plaintiffs in the course of their employment, and the latter...
include moral and exemplary damages. were dismissed from such employment. Hence, the case arose from such employer-
employee relationship which under the new Presidential Decree 1691 are under the
Such damages may not be awarded in accordance with exclusive, original jurisdiction of the labor arbiters.

Section 217 of the Labor Code, as amended, for there is no reasonable causal connection Issues:
with the employer-employee relationship. At the time the cause of action accrued, Article
217 of the Labor Code required that in order that the Labor Arbiter may adjudicate claims whether or not the Labor Code has any relevance to the reliefs sought by the plaintiffs.
not... included in the other paragraphs, the same must arise out of employer-employee
relations. Ruling:

The Court, therefore, believes and so holds that the 'money claims of workers' referred to in It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice.
paragraph 3 of Article 217 embraces money claims which arise out of or in connection with Theirs is a simple action for damages for tortious acts allegedly committed by the
the employer-employee relationship, or some aspect or incident of such relationship. defendants. Such being the case, the governing statute is the Civil Code and not the

In the instant case, the source of the obligation upon which the private respondents' cause of Labor Code.
action is based is a quasi-delict or tort which has no reasonable connection with any of the
claims provided for in the aforesaid Article 217 of the Labor Code. Principles:

Principles:
Dai Chi v Villarama (1994)
Dai-Chi v Villarama (RTC judge) and Limjuco
ERNESTO MEDINA v. FLORELIANA CASTRO--BARTOLOME IN HER CAPACITY AS PRESIDING
JUDGE OF COURT OF FIRST INSTANCE OF RIZAL, GR No. 59825, 1982-09-11 On July 29, 1993, the petitioner Daichi electronics filed a complaint for damages with RTC
branch 156 for an employee’s (Limjuco) violation of their contract in 1990 which stipulated
Facts: that the termination of service of an employee restricted him from working in a company
which has a similar set of products or ventures for a span of 2 years following the termination
Civil Case... was filed in May, 1979, by Ernesto Medina and Jose G. Ong against Cosme de of service.
Aboitiz and Pepsi-Cola Bottling Co. of the Philippines, Inc... the defendant corporation, acting The petitioner claimed that respondent became an employee of such a company called Angel
through its President, Cosme de Aboitiz, dismissed and slandered the plaintiffs in the Sound with the same position as head of material management control before the 2 years
presence of their subordinate employees although this could have been done in... private; was up.
The petitioner sought to claim 100k in damages and prevent the former employee from
That because of the anti-social manner by which the plaintiffs were dismissed from their working in the rival business within the 1 year timespan.
employment and the embarrassment and degradation they experience in the hands of the The respondent court under villarama claimed that it had no jurisdiction because the
defendants, the plaintiffs have suffered and will continue to suffer wounded feelings,... complaint was for damages from labor-employee relations and should be adjudicated under
sleepless nights, mental torture, besmirched reputation and other similar injuries... for which the Labor Arbiter under Art 217 s 4 of the LC.
the sum of P150,000.00 for each plaintiff, or the total amount of P300,000.00 should be The petitioner asked for reversal because the case was recognizable under the regular courts
awarded as moral damages;... a motion to dismiss the complaint on the ground of lack of and that the cause of action didn’t arise from employee-employer relationships even if the
jurisdiction was filed by the defendants. The trial court denied the motion... the defendants claim was in the employee’s contract.
filed a second motion to dismiss the complaint dated January 23, 1981, because of
amendments to the Labor Code immediately prior thereto. Issue: Is the petitioner’s claim for damages one arising from employee-employer relations?

the trial court issued on May 23, 1981, the following order: Decision: No, petition granted
1. Art 217 s4 of the LC stipulated that Labor Arbiters have exclusive jurisdiction to hear and FACTS:
decide cases for workers with claims for actual, moral, exemplary and other forms of
damages arising from employer-employee relations. August 21, 1974: Carlos E. Cruz was offered employment Engineer Officer with the
The court held that the cuase of action was under Civil Law, not the labor code. Why? opportunity to undergo a B-707 I conversion training course requiring him to enter into a
The petitioner sought to recover damages agreed upon in the contract as redress for bond with Singapore Airlines Limited for 5 years
respondent’s breach of his contractual obligation to its damage and prejudice. He also didn’t Claiming that Cruz had applied for "leave without pay" and had gone on leave without
ask for relief under the Labor Code. approval of the application during the second year, SIA filed suit for damages against Cruz
The applicable case law was Singapore airlines v Pano where the employer’s claim for and his surety, Villanueva, for violation of the terms and conditions
damages was based on wanton failure and refusal without just cause to report to duty RTC: dismissed the complaint, counterclaim and cross-claim for lack of jurisdiction
coupled with the averment that the employee maliciously and with bad faith violated the ISSUE: W/N properly cognizable by Courts of justice and not by the Labor Arbiters of the
contract. The employee didn’t report for duty as a course of convention training- quasi-delict National Labor Relations Commission
diba!
There must be a causal connection for claims provided in the RT217 S4 OF THE LC. Only when HELD: YES. records are hereby ordered remanded to the proper Branch of the Regional Trial
there is such a connection with other claims can damages be considered as arising from Court
employer-employee relations. jurisdiction over the present controversy must be held to belong to the civil Courts
2. In SMC v NLRC, the interpretation of Art 217 then was focused on in the phrase “all money Article 217 of the Labor Code under PD No. 1691 and BP Blg. 130 provides that all other
claims of workers” in par 3. claims arising from employer-employee relationship are cognizable by Labor Arbiters
There was no phrase “arising from employer-employee relations at that time” (art 217 petitioner's claim for damages is grounded on the "wanton failure and refusal" without just
amended by bp blg 227, not yet the present labor code) cause of private respondent Cruz to report for duty despite repeated notices served upon
him of the disapproval of his application for leave of absence without pay. This, coupled with
DOCTRINE: The use of noscitur a sociis wherein the entire universe of family claims asserted the further averment that Cruz "maliciously and with bad faith" violated the terms and
by workers has been observed into the exclusive jurisdiction of labor arbiters. conditions of the conversion training course agreement to the damage of petitioner removes
Nos a soc was also used to limit par 3 (par 4 in the present labor code) of art 217 wherein it the present controversy from the coverage of the Labor Code and brings it within the
was read in relation to par 1 (unfair labor practices), par 2 (terms and conditions of purview of Civil Law
employment), par 4 (household services) and par 5 (restrictions on activities of employees complaint was anchored not on the abandonment per se but on the manner and consequent
and employers) effects of such abandonment of work translated in terms of the damages which petitioner
There was a unifying element which referred to cases out of employer-employee relations. had to suffer
Money claims that didn’t arise out of such relations was to be taken in by regular courts. The The primary relief sought is for liquidated damages for breach of a contractual obligation.
claims should have a causal connection with employer-employee relations The other items demanded are not labor benefits demanded by workers generally taken
In Ocheda, the action based on tort or quasi-delict with no such causal connection was in the cognizance of in labor disputes, such as payment of wages, overtime compensation or
juris of the regular courts. separation pay. The items claimed are the natural consequences flowing from breach of an
In pepsi-cola, the action by employees against the malicious filing of the employer of a obligation, intrinsically a civil dispute.
criminal complaint against them was with the regular courts. Additionally, there is a secondary issue involved that is outside the pale of competence of
The rationale for the Dai-chi case was that the complaint for damages wasn’t anchored on Labor Arbiters. Is the liability of Villanueva one of suretyship or one of guaranty?
term of employee’s service but the effects of such term. Unquestionably, this question is beyond the field of specialization of Labor Arbiters.
Cases decided under the earlier version of Art 217 was also consistent in allocating civil
disputes bet employers and employes to the realm of the regular courts. In Medina (1929),
the civil complaint for damagaes against the employer for slanderous remarks against the RUSTAN SUPERVISORY UNION v. MOISES
employtess were tried in the civil courts. In Laron (1984), the court held that the Labor
Arbiters have no jurisdiction if the labor code wasn’t involved.
DALISAY +

Singapore Airlines V. Hon. Ernani Cruz Pano, Et Al. (1983) DECISION

G.R. No. L-47739 June 22, 1983


148 Phil. 514
Lessons Applicable: Unjust dismissal (Torts and Damages)
Laws Applicable:
TEEHANKEE, J.:
An original action for certiorari and prohibition challenging the jurisdiction of the Court of Relations. This view is not shared by this Court for the reason that jurisdiction of the Court
First Instance of Lanao del Norte to issue the injunction orders complained of. can not be made to depend upon the pleas or defenses by the defendant in his answer or
motion to dismiss. If such were the rule, the question of jurisdiction will depend entirely
Petitioner union is a legitimate labor organization and individual petitioners are the union's upon the defendant."
principal officers. On September 23, 1970, the union wrote respondent company that a great
number of the supervisory personnel of respondent's plant had affiliated with it and Hence, this petition filed by the union. Respondent company filed its answer, seeking to
presented a set of proposals for incorporation into a collective bargaining agreement. On sustain the jurisdiction of respondent court, on the principal grounds that its action was an
October 25, 1970, after its ultimatum letter of October 12, 1970 for union recognition had ordinary complaint for damages with preliminary injunction and that petitioner union was
been unheeded by respondent, the union declared a strike and picketed the company "never engaged in legitimate labor activities." Upon the filing of a P200.00-bond by
premises. Several conferences were thereafter held at the Iligan City Labor Office between petitioners, the Court issued its writ of preliminary injunction enjoining the enforcement of
the parties' representatives to no avail. Petitioner alleges that the company refused to the order and writ of preliminary injunction of November 13, 1970 issued by respondent
negotiate with it while respondent claims in its answer that "it is petitioners who refused to court.
negotiate in good faith."[1]
The Court finds merit in the petition.
On November 13, 1970, respondent company as plaintiff filed with respondent court a
complaint for actual, moral and exemplary damages with preliminary injunction against the 1. On the very face of the complaint, for all its artful wording and meticulous avoidance of
union and its principal officers as defendants (petitioners herein) alleging inter alia that any reference to petitioner union's strike and picketing activities, and carrying of union
"defendant union, its officers, members and the defendants herein have stationed placards in front of the company's premises, it is quite clear, particularly from the fact that
themselves in front of the gates of plaintiff's plant in such a coercive, violent and intimidating the union and its principal officers were impleaded as principal defendants, that there
manner as to prevent, as they have in fact, prevented, the incoming and outgoing of existed a labor dispute between the parties, which pertains to the exclusive jurisdiction of
plaintiff's trucks and heavy equipment as well as the delivery of some 120 tons of abaca and the Court of Industrial Relations rather than to respondent court. This is the teaching of Phil.
trim waste paper at petitioner's plant. On the same date, respondent court issued ex parte Communications Workers Federation vs. Nolasco,[3] where the complaint in the regular
and without hearing any witness in open court, upon a P5,000.00-bond, its order and writ of court of first instance alleged that the striking union's pickets "prevented non-striking
November 13, 1970, enjoining "defendants singly and collectively from stationing themselves employees from entering the compound and performing their work therein" - whereas here,
in front of the gates of plaintiff's plant and preventing the incoming and outgoing of plaintiff's respondent company, evading any reference to the union's pickets, alleged in its complaint
truck and heavy equipment, and from preventing plaintiff from delivering to its plant in Baloi, below that "defendant union, its officers, members and defendants named herein have
Lanao del Norte, the goods or materials mentioned above, and such other goods and raw stationed themselves in front of the gates of plaintiff's plant" to prevent the entry and egress
materials as may be necessary for plaintiff's business which may be delivered to plaintiff from of the company's trucks and heavy equipment and the delivery of goods and raw materials to
time to time from the wharf at Iligan City to its plant in Baloi, Lanao del Norte, until further its premises.
orders from this Court."
2. Respondent court should have placed itself on guard, therefore, in the face of the
On November 16, 1970, petitioners filed with respondent court an urgent motion to dissolve complaint's allegations strongly indicating the existence of a labor dispute beyond its
or lift the writ of preliminary injunction, informing respondent court that they were engaged jurisdiction, more so, when it was informed in petitioner's urgent motion for dissolution of
in an industrial dispute with respondent company, which was guilty of unfair labor practice in injunction that the union was on strike because of the company's alleged refusal to bargain
refusing to negotiate with them as the duly selected bargaining unit, by virtue of which they collectively which constitutes unfair labor practice under section 4 (a) (6) of the Industrial
had struck and picketed the company's premises since October 25, 1970, and therefore Peace Act - and was made known to it precisely to deter its hand from maintaining its
impugning respondent court's jurisdiction to issue the injunction which in effect enjoined injunction. For while in regular civil actions, the question of jurisdiction is determined by the
their concerted strike and picketing activities. Petitioners further assailed the validity of the allegations of the complaint, the rule differs in labor disputes in that the Court has set the
ex-parte injunction issued without their having been given the benefit of due notice and criterion that "whether the acts complained of in the petition for injunction arose out of, or
hearing as required by section 9 of the Industrial Peace Act (Rep. Act 875).[2] are connected or interwoven with, the unfair labor practice case [presents] a question of fact
that should be brought to the attention of the court a quo to enable it to pass upon the issue
Respondent court, in its order of November 20, 1970, however, denied dissolution of the whether it has jurisdiction or not over the case,"[4] and "the court is duty bound to find out if
injunction, ruling that "(T)he defendant movant maintained that there is an alleged labor there really is a labor dispute by reception of evidence."[5] And such ex-parte injunctions,
dispute existing between the defendant labor union and the plaintiff corporation but the even if proper, should be automatically vacated after five days under section 9 (d) of Republic
lawyer of the movant admitted that he has not filed a case in the Court of Industrial Relations Act 875, and the hearing for determination of the existence of a labor dispute that divests
and neither has he filed a notice of strike in the Department of Labor regarding the matter." the lower court of jurisdiction, as emphasized by Mr. Justice Reyes in his concurring opinion
Respondent court further ruled out the industrial court's jurisdiction notwithstanding the in the very case of ALU vs. Ramolete[5] cited by respondent court, should not be deferred
existence of picketing in the premises, stating that "(I)f this is so, then a mere allegation on beyond the statutory five-day period thereby "maintaining an injunction beyond the
the existence of a labor dispute is enough to base jurisdiction on the Court of Industrial
maximum period authorized by law even if the court had jurisdiction to issue it x x x (and) of the Industrial Peace Act. Nor was notice given 'to the chief of those public officials of the x
nullifying a statutory provision expressly designed to protect labor." x x city x x x charged with the duty to protect complainant's property,' also a prerequisite in
said Section 9(d) heretofore mentioned. And finally, the record is barren as to whether or
3. The Court stressed the exclusive jurisdiction of the industrial court as against the regular not complainant exerted 'every reasonable effort to settle such dispute by negotiation or
courts over unfair labor practices in Veterans Security Free Workers Union vs. Cloribel[6] with the aid of any available governmental machinery of mediation or by voluntary
thus: "(I)t has long been accepted as dogma that cases involving unfair labor practice fall arbitration,' another condition exacted by law - this time Section 9(e) of the Industrial Peace
within the exclusive jurisdiction of the Court of Industrial Relations, by virtue of the explicit Act - before a restraining order or injunction may be granted. Failure to comply with even
provisions of Section 5(a) of the Industrial Peace Act that said Court 'shall have jurisdiction one of these requirements will suffice to deny the issuance of the writ."[9]
over the prevention of unfair labor practices and is empowered to prevent any person from
engaging in any unfair labor practice. This power shall be exclusive and shall not be affected 6. It has likewise long been settled that where the acts complained of by the company are
by any other means of adjustment or prevention that has been or may be established by an directly interwoven with the unfair labor practice charged against it by the union, "the main
agreement, code, law or otherwise.' The strike and picketing restrained by the questioned case does not come under the jurisdiction of the [regular] trial court, even if it involves
orders of respondent judge arose out of unfair labor practices of respondent company in violence, intimidation and coercion as averred in the complaint," as in the case below, for the
allegedly refusing to bargain in good faith and dismissing for union activities the union industrial court's jurisdiction is exclusive.[10] If the purpose of the action is to obtain some
officials and members, which are the very subject-matter of the unfair labor charge filed by injunctive relief against certain acts of the union members, the same can be obtained from
the union in the Industrial Court. These were facts expressly alleged by petitioner in its the Industrial court which is given ample powers to act thereon.[11]
Urgent Motion for Reconsideration, asking respondent judge to set aside the questioned
orders and raising respondent Court's lack of jurisdiction. The very complaint of respondent 7. The labor dispute between the parties must therefore be settled and any injunctive relief
in the case below, for all its artful wording, was sufficient on its face to apprise respondent must be sought at the industrial court, which has exclusive jurisdiction over the subject
Court that the matter presented before it involved an unfair labor practice case falling within matter, and to which the case must properly be brought at the instance of either party. This
the Industrial Court's exclusive competence and jurisdiction. x x x." jurisdictional question has long received the Court's attention and Mr. Justice Castro,
speaking for the Court in Regal Mfg. Employees Ass'n. vs. Reyes[12] indicated that actions for
4. Respondent court's stated reasons for denying dissolution of the injunction, to wit, that damages brought by the company against the union as a result of the union's concerted
petitioner union had not filed a case in the industrial court nor a strike notice with the Labor activities must await the prior resolution of the industrial court which is vested with exclusive
Department constituted grave error. As emphasized by the Court in the Veterans Security jurisdiction over the labor dispute. The proper course for regular courts to observe in such
Free Workers Union case, supra, "It is settled doctrine that labor disputes arising out of unfair cases was thus stated: "(U)nder the environmental circumstances obtaining, the respondent
labor practices committed by any of the parties do not present a question of concurrent court should have dismissed the original petition for injunction outright, or, later, dismissed
jurisdiction between the Court of First Instance and the Industrial Court, but that jurisdiction the amended petition for injunction, without prejudice, or, in the very least, suspended
over such matters is vested exclusively in the Court of Industrial Relations. As succinctly action thereon in so far as the question of damages is concerned, until the CIR shall have
restated by Mr. Justice Sanchez in Phil. Communications Workers vs. Nolasco, supra, finally decided the two labor disputes pending before it." The fact that in the case at bar, the
'CIR'sjurisdiction stays even if no unfair labor practice case has been filed with CIR. It is labor dispute has not yet reached the industrial court at the instance of either party does not
enough that unfair labor practice is involved.'" As to the lack of strike notice, it is equally affect the cited ruling. The company may well take the initiative, as already indicated, of
settled doctrine that in strikes arising out of and against a company's unfair labor practice, a seeking injunctive relief as well as the damages claimed by it in the industrial court - as it
strike notice is not necessary in view of the strike being founded on urgent necessity and must, if it has basis for its allegations of violence, intimidation and coercion on the union's
directed against practices condemned by public policy, such notice being legally required part.
only in cases of economic strikes.
ACCORDINGLY, the writ of certiorari and prohibition prayed for is hereby granted, and the
5. Even assuming for the nonce respondent court's jurisdiction over the case below, preliminary injunction heretofore issued by the Court is hereby made permanent.
however, respondent court failed to heed the controlling statute as embodied in section 9 of Respondent court is hereby directed to dismiss the case for damages with preliminary
the Industrial Peace Act. The issuance of injunctions in connection with labor disputes is injunction before it, Civil Case No. 1637, without prejudice. With costs against private
governed by the statutory restrictions therein provided and not by the Rules of Court.[7] And respondent.
injunctions in labor disputes are not favored and may issue only after a strict and rigorous
compliance with the statutory requisites.[8] It will be readily seen that the injunction order SO ORDERED.
and writ of respondent court must be overturned for the same failure to comply with the
statutory restrictions as in the Philippine Communications Workers case, viz: "For one, there Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Fernando, Barredo,
is the absence of a showing that the court heard the testimony of witnesses required in Villamor, and Makasiar, JJ., concur.
Section 9(d) to support the allegations of the complaint and testimony in opposition thereto.
Then, the court did not make any 'finding of fact' as to the existence or non-existence of the
facts required to be shown under the afore-quoted Section 9(d) and also under Section 9(f)
Herminigildo Inguillo and Zenaida Bergante vs. First Philippine Scales, Inc. (FPSI) and/or VIRGILIO PINO, PAULINO CABREROS, MA. LUNA P. JUMAOAS, DOMINADOR BOOC, FIDEL
Amparo Policarpio, manager .!. "o. #$%&' ( une %, *''+)In #++#, FPSI and First VALLE, BARTOLOME AUMAN, REMEGIO CABANTAN, LORETO GONZAGA, EDILBERTO
Philippine Scales Industries a-or nion (FPSI ) entered intoa ollective Bargaining MENDOZA and ANTONIO PANILAG, Respondents.
Agreement ( BA) 0or a period o0 1ve (%) 2ears in a documententitled
RATIPIKASYON NG KASUNDUAN. DECISION
Bergante and Inguillo, 3ho 3ere mem-ers o0 FPSI , signed the said document. Bergante,
Inguillo and several FPSI emplo2ees 4oined another union, the LEONARDO-DE CASTRO, J.:
Nagkakaisang Lakas ng Manggagawa
(" 5). 67he latter8 1led 3ith the 9epartment o0 a-or and :mplo2ment (9; :) an This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the
intra<union dispute against FPSI and FPSI. 5ean3hile, on 5arch *+, #++$, the e=ecutive - reversal of the Decision1cЃa dated March 30, 2001 and Resolution2cЃa dated July 18, 2001 of
the Court of Appeals in CA-G.R. SP No. 40280, setting aside the Voluntary Arbitration
oard and mem-ers o0 the FPSI addressed a document dated 5arch #>, #++$
Award3cЃa dated August 16, 1995 of the National Conciliation and Mediation Board (NCMB),
denominated as ?Petis2on@ to FPSI s general manager, Amparo Policarpio (Policarpio),
Cebu City, in VA Case No. AC 389-01-01-95. Voluntary Arbitrator Alice K. Canonoy-Morada
see ing the termination o0 the services o0 6several emplo2ees, including herein petitioners.
(Canonoy-Morada) dismissed the Complaint filed by respondents Ernesto Casio, Rolando
7his 3as granted upon -2 FPSI, 3hich terminated, among others, herein petitioners.8In their
Igot, Mario Famador, Nelson Lim, Felicisimo Booc, Procopio Obregon, Jr. and Antonio
Petition, Bergante and Inguillo assail the legalit2 o0 their termination -ased on the nion Aninipok (Casio, et al.) against petitioner General Milling Corporation (GMC) for unfair labor
Securit2 lause in the BA -et3een FPSI and FPSI .6(#) Cas there a valid ground 0or practice, illegal suspension, illegal dismissal, and payment of moral and exemplary
terminationD(*) Cas there compliance 3ith the procedural due process to the terminationD8 damages.chanroblesvirtua|awlibary
(1)
Ees. 7he a-or ode o0 the Philippines has several provisions under 3hich an emplo2ee The labor union Ilaw at Buklod ng Mangagawa (IBM)-Local 31 Chapter (Local 31) was the sole
ma2 -e validl2 terminated, namel2 (#) 4ust causes under Article *>*G (*) authori ed and exclusive bargaining agent of the rank and file employees of GMC in Lapu-Lapu City. On
causes under Article *> G ( ) termination due to disease under Article *>&G and (&) November 30, 1991, IBM-Local 31, through its officers and board members, namely,
termination -2 the emplo2ee or resignation under Article *>%. Chile the said provisions did respondents Virgilio Pino,4cЃa Paulino Cabreros, Ma. Luna P. Jumaoas, Dominador Booc,
not mention as ground the en0orcement o0 the nion Securit2 lause in the BA, the Bartolome Auman, Remegio Cabantan, Fidel Valle, Loreto Gonzaga, Edilberto Mendoza and
dismissal 0rom emplo2ment -ased on the same is recogni edand accepted in our Antonio Panilag (Pino, et al.), entered into a Collective Bargaining Agreement (CBA) with
4urisdiction.? nion securit2@ is a generic term, 3hich is applied to and comprehends GMC. The effectivity of the said CBA was retroactive to August 1, 1991.5cЃa
?closed shop,@ ?union shop,@ ?maintenance o0 mem-ership@ or an2 other 0orm o0
agreement 3hich imposes upon emplo2ees the o-ligation to acJuire or retain union mem- The CBA contained the following union security provisions:
ership as a condition aKecting emplo2ment. 7here is union shop 3hen all ne3regular
emplo2ees are reJuired to 4oin the union 3ithin a certain period as a condition 0or their Section 3. MAINTENANCE OF MEMBERSHIP All employees/workers employed by the
continued emplo2ment. 7here is maintenance o0 mem-ership shop 3hen emplo2ees, 3ho are Company with the exception of those who are specifically excluded by law and by the terms
union mem-ers as o0 the eKective date o0 the agreement, or 3ho therea0ter -ecome mem- of this Agreement must be members in good standing of the Union within thirty (30) days
ers, must maintain union mem-ership as a condition 0or continued emplo2ment until the2 upon the signing of this agreement and shall maintain such membership in good standing
are promoted or trans0erred out o0 the -argaining unit or the agreement is terminated. thereof as a condition of their employment or continued
6&'8 employment.chanroblesvirtua|awlibary
A closed<shop, on the other hand, ma2 -e de1ned as an enterprise in 3hich, -2 agreement -
et3een the emplo2er and his emplo2ees or their representatives, no person ma2 -e Section 6. The Company, upon written request of the Union, shall terminate the services of
emplo2ed in an2 or certain agreed departments o0 the enterprise unless he or she is, - any employee/worker who fails to fulfill the conditions set forth in Sections 3 and 4 thereof,
ecomes, and, 0or the duration o0 the agreement, remains a mem-er in good standing o0 a subject however, to the provisions of the Labor Laws of the Philippines and their
union entirel2 comprised o0 or o0 3hich the emplo2ees in interest are apart Implementing Rules and Regulations. The Union shall absolve the Company from any and all
liabilities, pecuniary or otherwise, and responsibilities to any employee or worker who is
o. 149552 : March 10, 2010 dismissed or terminated in pursuant thereof.6cЃa

GENERAL MILLING CORPORATION, Petitioner, v. ERNESTO CASIO, ROLANDO IGOT, MARIO Casio, et al. were regular employees of GMC with daily earnings ranging from P173.75 to
FAMADOR, NELSON LIM, FELICISIMO BOOC, PROCOPIO OBREGON, JR., and ANTONIO P201.50, and length of service varying from eight to 25 years.7cЃa Casio was elected IBM-
ANINIPOK, Respondents, Local 31 President for a three-year term in June 1991, while his co-respondents were union
shop stewards.chanroblesvirtua|awlibary
and
In a letter8cЃa dated February 24, 1992, Rodolfo Gabiana (Gabiana), the IBM Regional Pressured by the threatened filing of a suit for unfair labor practice, GMC acceded to
Director for Visayas and Mindanao, furnished Casio, et al. with copies of the Affidavits of Gabianas request to terminate the employment of Casio, et al. GMC issued a Memorandum
GMC employees Basilio Inoc and Juan Potot, charging Casio, et al. with "acts inimical to the dated March 24, 1992 terminating the employment of Casio, et al. effective April 24, 1992
interest of the union." Through the same letter, Gabiana gave Casio, et al. three days from and placing the latter under preventive suspension for the
receipt thereof within which to file their answers or counter-affidavits. However, Casio, et al. meantime.chanroblesvirtua|awlibary
refused to acknowledge receipt of Gabianas letter.chanroblesvirtua|awlibary
On March 27, 1992, Casio, et al., in the name of IBM-Local 31, filed a Notice of Strike with the
Subsequently, on February 29, 1992, Pino, et al., as officers and members of the IBM-Local NCMB-Regional Office No. VII (NCMB-RO). Casio, et al. alleged as bases for the strike the
31, issued a Resolution9cЃa expelling Casio, et al. from the union. Pertinent portions of the illegal dismissal of union officers and members, discrimination, coercion, and union busting.
Resolution are reproduced below: The NCMB-RO held conciliation proceedings, but no settlement was reached among the
parties.12cЃa
Whereas, Felicisimo Booc, Rolando Igot, Procopio Obregon, Jr., Antonio Aninipok, Mario
Famador, Nelson Lim and Ernesto Casio, through Ernesto Casio have refused to acknowledge Casio, et al. next sought recourse from the National Labor Relations Commission (NLRC)
receipt of the letter-complaint dated February 24, 1992, requiring them to file their answer[s] Regional Arbitration Branch VII by filing on August 3, 1992 a Complaint against GMC and
or counter-affidavits as against the charge of "acts inimical to the interest of the union" and Pino, et al. for unfair labor practice, particularly, the termination of legitimate union officers,
that in view of such refusal to acknowledge receipt, a copy of said letter complaint was illegal suspension, illegal dismissal, and moral and exemplary damages. Their Complaint was
dropped or left in front of E. Casio; docketed as NLRC Case No. RAB-VII-08-0639-92.13cЃa

Whereas, the three (3)[-]day period given to file their answer or counter-affidavit have Finding that NLRC Case No. RAB-VII-08-0639-92 did not undergo voluntary arbitration, the
already lapsed prompting the union Board to investigate the charge ex parte; Labor Arbiter dismissed the case for lack of jurisdiction, but endorsed the same to the NCMB-
RO. Prior to undergoing voluntary arbitration before the NCMB-RO, however, the parties
Whereas, after such ex parte investigation the said charge has been more than adequately agreed to first submit the case to the grievance machinery of IBM-Local 31. On September 7,
substantiated by the affidavits/witnesses and documentary exhibits 1994, Casio, et al. filed their Complaint with Pino, the Acting President of IBM-Local 31. Pino
presented.chanroblesvirtua|awlibary acknowledged receipt of the Complaint and assured Casio, et al. that they would be
"seasonably notified of whatever decision and/or action the Board may have in the instant
NOW, THEREFORE, RESOLVED as it is hereby RESOLVED, that Ernesto Casio, Felicisimo Booc, case."14cЃa When the IBM-Local 31 Board failed to hold grievance proceedings on the
Rolando Igot, Procopio Obregon, Jr., Antonio Aninipok, Mario Famador and Nelson Lim be Complaint of Casio, et al., NCMB Voluntary Arbitrator Canonoy-Morada assumed jurisdiction
expelled as union member[s] of good standing effectively over the same. The Complaint was docketed as VA Case No. AC 389-01-01-
immediately.chanroblesvirtua|awlibary 95.chanroblesvirtua|awlibary

RESOLVED FURTHER, to furnish copy of this Resolution to the GMC Management for their Based on the Position Papers and other documents submitted by the parties,15cЃa Voluntary
information and guidance with the recommendation as it is hereby recommended to dismiss Arbitrator Canonoy-Morada rendered on August 16, 1995 a Voluntary Arbitration Award
the above-named employees from work.chanroblesvirtua|awlibary dismissing the Complaint in VA Case No. AC 389-01-01-95 for lack of merit, but granting
separation pay and attorneys fees to Casio, et al. The Voluntary Arbitration Award presented
Gabiana then wrote a letter10cЃa dated March 10, 1992, addressed to Eduardo Cabahug the following findings: (1) the termination by GMC of the employment of Casio, et al. was in
(Cabahug), GMC Vice-President for Engineering and Plant Administration, informing the valid compliance with the closed shop provision in the CBA; (2) GMC had no competence to
company of the expulsion of Casio, et al. from the union pursuant to the Resolution dated determine the good standing of a union member; (3) Casio, et al. waived their right to due
February 29, 1992 of IBM-Local 31 officers and board members. Gabiana likewise requested process when they refused to receive Gabianas letter dated February 24, 1992, which
that Casio, et al. "be immediately dismissed from their work for the interest of industrial required them to submit their answer to the charges against them; (4) the preventive
peace in the plant.cra|aw" suspension of Casio, et al. by GMC was an act of self-defense; and (5) the IBM-Local 31
Resolution dated February 29, 1992 expelling Casio, et al. as union members, also
Gabiana followed-up with another letter11cЃa dated March 19, 1992, inquiring from automatically ousted them as union officers.16cЃa The dispositive portion of the Voluntary
Cabahug why Casio, et al. were still employed with GMC despite the request of IBM-Local 31 Arbitration Award reads:
that Casio, et al. be immediately dismissed from service pursuant to the closed shop
provision in the existing CBA. Gabiana reiterated the demand of IBM-Local 31 that GMC WHEREFORE, above premises considered, this case filed by [Casio, et al.] is hereby ordered
dismiss Casio, et al., with the warning that failure of GMC to do so would constitute gross DISMISSED for lack of merit.chanroblesvirtua|awlibary
violation of the existing CBA and constrain the union to file a case for unfair labor practice
against GMC.chanroblesvirtua|awlibary Since the dismissal is not for a cause detrimental to the interest of the company, respondent
General Milling Corporation is, nonetheless, ordered to pay separation pay to all [Casio, et
al.] within seven (7) calendar days upon receipt of this order at the rate of one-half month I
per year of service reckoned from the time of their employment until the date of their
separation on March 24, 1992, thus: THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION WHEN IT SET ASIDE THE AWARD OF
Employee Date Hired Rate/Month THE VOLUNTARY ARBITRATOR, AND IN AWARDING REINSTATEMENT AND FULL BACKWAGES
(1/2 mo/yr TO [Casio, et al.].
of service) Service Total
Casio April 24/74 P2,636.29 x 18 years = P47,453.22 II
Igot May 1980 P2,472.75 x 12 years = P29,673.00
Famador Feb. 1977 P2,498.92 x 15 years = P37,483.80 THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION
Lim Aug. 1975 P2,466.21 x 17 years = P41,925.57 AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT SAID THAT PETITIONER GMC
Booc Aug. 1978 P2,498.92 x 14 years = P34,984.88 FAILED TO ACCORD DUE PROCESS TO [Casio, et al.].
Obregon May 1984 P2,273.23 x 08 years = P18,185.84
Aninipok Sept. 1967 P2,616.01 x 25 years = P65,400.25 III
cralawThe attorneys fees for [Casio, et al.s] counsel shall be ten percent (10%) of the total
amount due them; and shall be shared proportionately by all of the same [Casio, et al.]. THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION WHEN IT DID NOT ABSOLVE
All other claims are hereby denied.17cЃa PETITIONER GMC OF ANY LIABILITY AND INSTEAD RULED THAT IT WAS SOLIDARILY LIABLE
WITH THE UNION OFFICERS FOR THE PAYMENT OF FULL BACKWAGES TO [Casio, et al.].
Dissatisfied with the Voluntary Arbitration Award, Casio, et al. went to the Court of Appeals
by way of a Petition for Certiorari under Rule 65 of the Rules of Court to have said Award set At this point, we take note that Pino, et al. did not appeal from the decision of the Court of
aside.chanroblesvirtua|awlibary Appeals.chanroblesvirtua|awlibary

The Court of Appeals granted the writ of certiorari and set aside the Voluntary Arbitration GMC avers that in reviewing and reversing the findings of the Voluntary Arbitrator, the Court
Award. The appellate court ruled that while the dismissal of Casio, et al., was made by GMC of Appeals departed from the principle of conclusiveness of the trial judges findings. GMC
pursuant to a valid closed shop provision under the CBA, the company, however, failed to also claims that the findings of the Voluntary Arbitrator as to the legality of the termination
observe the elementary rules of due process in implementing the said dismissal. from employment of Casio, et al. are well supported by evidence. GMC further insists that
Consequently, Casio, et al. were entitled to reinstatement with backwages from the time of before IBP-Local 31 expelled Casio, et al. from the union and requested GMC to dismiss
their dismissal up to the time of their reinstatement. Nevertheless, the Court of Appeals did Casio, et al. from service pursuant to the closed shop provision in the CBA, IBP-Local 31
not hold GMC liable to Casio, et al. for moral and exemplary damages and attorneys fees, already accorded Casio, et al. due process, only that Casio, et al. refused to avail themselves
there being no showing that their dismissal was attended by bad faith or malice, or that the of such opportunity. GMC additionally maintains that Casio, et al. were expelled by IBP-Local
dismissal was effected in a wanton, oppressive, or malevolent manner, given that GMC 31 for "acts inimical to the interest of the union," and GMC had no authority to inquire into
merely accommodated the request of IBM-Local 31. The appellate court, instead, made Pino, or rule on which employee-member is or is not loyal to the union, this being an internal affair
et al. liable to Casio, et al., for moral and exemplary damages and attorneys fees, since it was of the union. Thus, GMC had to rely on the presumption that Pino, et al. regularly performed
on the basis of the imputations and actuations of Pino, et al. that Casio, et al. were illegally their duties and functions as IBP-Local 31 officers and board members, when the latter
dismissed from employment. The Court of Appeals thus decreed: investigated and ruled on the charges against Casio, et al.19cЃa GMC finally asserts that Pino,
et al., the IBP-Local 31 officers and board members who resolved to expel Casio, et al. from
WHEREFORE, the assailed award is hereby SET ASIDE, and private respondent General Milling the union, and not GMC, should be held liable for the reinstatement of and payment of full
Corporation is hereby ordered to reinstate [Casio, et al.] to their former positions without backwages to Casio, et al. for the company had acted in good faith and merely complied with
loss of seniority rights, and to pay their full backwages, solidarily with [Pino, et al.]. Further, the closed shop provision in the CBA.chanroblesvirtua|awlibary
[Pino, et al.] are ordered to indemnify each of [Casio, et al.] in the form of moral and
exemplary damages in the amounts of P50,000.00 and P30,000.00, respectively, and to pay On the other hand, Casio, et al. counters that GMC failed to identify the specific pieces of
attorneys fees.18cЃa evidence supporting the findings of the Voluntary Arbitrator. Casio, et al. contends that to
accord them due process, GMC itself, as the employer, should have held proceedings distinct
The Motion for Reconsideration of GMC was denied by the Court of Appeals in the Resolution and separate from those conducted by IBM-Local 31. GMC cannot justify its failure to
dated July 18, 2001. conduct its own inquiry using the argument that such proceedings would constitute an
intrusion by the company into the internal affairs of the union. The claim of GMC that it had
Hence, GMC filed the instant Petition for Review, arguing that: acted in good faith when it dismissed Casio, et al. from service in accordance with the closed
shop provision of the CBA is inconsistent with the failure of the company to accord the and his employees or their representatives, no person may be employed in any or certain
dismissed employees their right to due process.chanroblesvirtua|awlibary agreed departments of the enterprise unless he or she is, becomes, and, for the duration of
the agreement, remains a member in good standing of a union entirely comprised of or of
In general, in a "petition for review on certiorari as a mode of appeal under Rule 45 of the which the employees in interest are a part.23cЃa
Rules of Court, the petitioner can raise only questions of law - the Supreme Court is not the
proper venue to consider a factual issue as it is not a trier of facts. A departure from the Union security clauses are recognized and explicitly allowed under Article 248(e) of the Labor
general rule may be warranted where the findings of fact of the Court of Appeals are Code, which provides that:
contrary to the findings and conclusions of the trial court [or quasi-judicial agency, as the
case may be], or when the same is unsupported by the evidence on record."20cЃa Art. 248. Unfair Labor Practices of Employers. x x x

Whether Casio, et al. were illegally dismissed without any valid reason is a question of fact xxxx
better left to quasi-judicial agencies to determine. In this case, the Voluntary Arbitrator was
convinced that Casio, et al. were legally dismissed; while the Court of Appeals believed the (e) To discriminate in regard to wages, hours of work, and other terms and conditions of
opposite, because even though the dismissal of Casio, et al. was made by GMC pursuant to a employment in order to encourage or discourage membership in any labor organization.
valid closed shop provision in the CBA, the company still failed to observe the elementary Nothing in this Code or in any other law shall stop the parties from requiring membership in a
rules of due process. The Court is therefore constrained to take a second look at the evidence recognized collective bargaining agent as a condition for employment, except those
on record considering that the factual findings of the Voluntary Arbitrator and the Court of employees who are already members of another union at the time of the signing of the
Appeals are contradictory.chanroblesvirtua|awlibary collective bargaining agreement. (Emphasis supplied.)

There are two aspects which characterize the concept of due process under the Labor Code: It is State policy to promote unionism to enable workers to negotiate with management on
one is substantive whether the termination of employment was based on the provision of an even playing field and with more persuasiveness than if they were to individually and
the Labor Code or in accordance with the prevailing jurisprudence; the other is procedural separately bargain with the employer. For this reason, the law has allowed stipulations for
the manner in which the dismissal was effected.21cЃa "union shop" and "closed shop" as means of encouraging workers to join and support the
union of their choice in the protection of their rights and interest vis-à-vis the
After a thorough review of the records, the Court agrees with the Court of Appeals. The employer.24cЃa
dismissal of Casio, et al. was indeed illegal, having been done without just cause and the
observance of procedural due process.chanroblesvirtua|awlibary Moreover, a stipulation in the CBA authorizing the dismissal of employees are of equal
import as the statutory provisions on dismissal under the Labor Code, since "a CBA is the law
In Alabang Country Club, Inc. v. National Labor Relations Commission,22cЃa the Court laid between the company and the union and compliance therewith is mandated by the express
down the grounds for which an employee may be validly terminated, thus: policy to give protection to labor."25cЃa

Under the Labor Code, an employee may be validly terminated on the following grounds: (1) In terminating the employment of an employee by enforcing the union security clause, the
just causes under Art. 282; (2) authorized causes under Art. 283; (3) termination due to employer needs only to determine and prove that: (1) the union security clause is applicable;
disease under Art. 284, and (4) termination by the employee or resignation under Art. (2) the union is requesting for the enforcement of the union security provision in the CBA;
285.chanroblesvirtua|awlibary and (3) there is sufficient evidence to support the decision of the union to expel the
employee from the union. These requisites constitute just cause for terminating an employee
Another cause for termination is dismissal from employment due to the enforcement of the based on the union security provision of the CBA.26cЃa
union security clause in the CBA. x x x. (Emphasis ours.)
There is no question that in the present case, the CBA between GMC and IBM-Local 31
"Union security" is a generic term, which is applied to and comprehends "closed shop," included a maintenance of membership and closed shop clause as can be gleaned from
"union shop," "maintenance of membership," or any other form of agreement which imposes Sections 3 and 6 of Article II. IBM-Local 31, by written request, can ask GMC to terminate the
upon employees the obligation to acquire or retain union membership as a condition employment of the employee/worker who failed to maintain its good standing as a union
affecting employment. There is union shop when all new regular employees are required to member.chanroblesvirtua|awlibary
join the union within a certain period as a condition for their continued employment. There is
maintenance of membership shop when employees, who are union members as of the It is similarly undisputed that IBM-Local 31, through Gabiana, the IBM Regional Director for
effective date of the agreement, or who thereafter become members, must maintain union Visayas and Mindanao, twice requested GMC, in the letters dated March 10 and 19, 1992, to
membership as a condition for continued employment until they are promoted or terminate the employment of Casio, et al. as a necessary consequence of their expulsion
transferred out of the bargaining unit or the agreement is terminated. A closed shop, on the from the union.chanroblesvirtua|awlibary
other hand, may be defined as an enterprise in which, by agreement between the employer
It is the third requisite that there is sufficient evidence to support the decision of IBM-Local collective anger and enmity of its employees who are union
31 to expel Casio, et al. which appears to be lacking in this case.chanroblesvirtua|awlibary members.chanroblesvirtua|awlibary

The full text of the individual but identical termination letters,27cЃa served by GMC on Casio, In the light of the unions very insistent demand, verbal and in writing and to avoid the union
et al., is very revealing. They read: accusation of "coddling" you, and considering the explicitly mandatory language of the closed
shop provision of the CBA, the company is constrained to terminate your employment, to
To: [Employees Name] give you ample time to look and find another employment, and/or exert efforts to become
again a member of good standing of your union, effective April 24,
From: Legal Counsel 1992.chanroblesvirtua|awlibary

Subject: Dismissal Upon Union Request Thru In the meantime, to prevent serious danger to the life and property of the company and of its
employees, we are placing you under preventive suspension beginning
CBA Closed Shop Provision today.chanroblesvirtua|awlibary

The company is in receipt of two letters dated March 10, 1992 and March 19, 1992 It is apparent from the aforequoted letter that GMC terminated the employment of Casio, et
respectively from the union at the Mill in Lapulapu demanding the termination of your al. relying upon the Resolution dated February 29, 1992 of Pino, et al. expelling Casio, et al.
employment pursuant to the closed shop provision of our existing Collective Bargaining from IBM-Local 31; Gabianas Letters dated March 10 and 19, 1992 demanding that GMC
Agreement. It appears from the attached resolutions that you have been expelled from union terminate the employment of Casio, et al. on the basis of the closed shop clause in the CBA;
membership and has thus ceased to become a member in good standing. The resolutions are and the threat of being sued by IBM-Local 31 for unfair labor practice. The letter made no
signed by the same officers who executed and signed our existing CBA, copies of the letters mention at all of the evidence supporting the decision of IBM-Local 31 to expel Casio, et al.
and resolutions are enclosed hereto for your reference. from the union. GMC never alleged nor attempted to prove that the company actually looked
into the evidence of IBM-Local 31 for expelling Casio, et al. and made a determination on the
The CBA in Article II provides the following: sufficiency thereof. Without such a determination, GMC cannot claim that it had terminated
the employment of Casio, et al. for just cause.chanroblesvirtua|awlibary
Section 3. MAINTENANCE OF MEMBERSHIP All employees/workers employed by the
Company with the exception of those who are specifically excluded by law and by the terms The failure of GMC to make a determination of the sufficiency of evidence supporting the
of this Agreement must be members in good standing of the Union within thirty (30) days decision of IBM-Local 31 to expel Casio, et al. is a direct consequence of the non-observance
upon the signing of this agreement and shall maintain such membership in good standing by GMC of procedural due process in the dismissal of employees.chanroblesvirtua|awlibary
thereof as a condition of their employment or continued
employment.chanroblesvirtua|awlibary As a defense, GMC contends that as an employer, its only duty was to ascertain that IBM-
Local 31 accorded Casio, et al. due process; and, it is the finding of the company that IBM-
Section 6. The Company, upon written request of the Union, shall terminate the services of Local 31 did give Casio, et al. the opportunity to answer the charges against them, but they
any employee/worker who fails to fulfill the conditions set forth in Sections 3 and 4 thereof, refused to avail themselves of such opportunity.
subject however, to the provisions of the Labor Laws of the Philippines and their
Implementing Rules and Regulations. The Union shall absolve the Company from any and all This argument is without basis.chanroblesvirtua|awlibary
liabilities, pecuniary or otherwise, and responsibilities to any employee or worker who is
dismissed or terminated in pursuant thereof.chanroblesvirtua|awlibary The Court has stressed time and again that allegations must be proven by sufficient evidence
because mere allegation is definitely not evidence.28cЃa Once more, in Great Southern
The provisions of the CBA are clear enough. The termination of employment on the basis of Maritime Services Corporation. v. Acuña,29cЃa the Court declared:
the closed shop provision of the CBA is well recognized in law and in
jurisprudence.chanroblesvirtua|awlibary Time and again we have ruled that in illegal dismissal cases like the present one, the onus of
proving that the employee was not dismissed or if dismissed, that the dismissal was not
There is no valid ground to refuse to terminate. On the other hand as pointed out in the illegal, rests on the employer and failure to discharge the same would mean that the
unions strongly demanding letter dated March 19, 1992, the company could be sued for dismissal is not justified and therefore illegal. Thus, petitioners must not only rely on the
unfair labor practice. While we would have wanted not to accommodate the unions request, weakness of respondents evidence but must stand on the merits of their own defense. A
we are left with no other option. The terms of the CBA should be respected. To refuse to party alleging a critical fact must support his allegation with substantial evidence for any
enforce the CBA would result in the breakdown of industrial peace and the end of decision based on unsubstantiated allegation cannot stand as it will offend due process. x x x.
harmonious relations between the union and management. The company would face the (Emphasis supplied.)
The records of this case are absolutely bereft of any supporting evidence to substantiate the written notice apprising the employee of the particular acts or omissions for which his
bare allegation of GMC that Casio, et al. were accorded due process by IBM-Local 31. There is dismissal is sought in order to afford him an opportunity to be heard and to defend himself
nothing on record that would indicate that IBM-Local 31 actually notified Casio, et al. of the with the assistance of counsel, if he desires, and (2) a subsequent notice informing the
charges against them or that they were given the chance to explain their side. All that was employee of the employers decision to dismiss him. This procedure is mandatory and its
stated in the IBM-Local 31 Resolution dated February 29, 1992, expelling Casio, et al. from absence taints the dismissal with illegality.34cЃa
the union, was that "a copy of the said letter complaint [dated February 24, 1992] was
dropped or left in front of E. Casio."30cЃa It was not established that said letter-complaint Irrefragably, GMC cannot dispense with the requirements of notice and hearing before
charging Casio, et al. with acts inimical to the interest of the union was properly served upon dismissing Casio, et al. even when said dismissal is pursuant to the closed shop provision in
Casio, that Casio willfully refused to accept the said letter-notice, or that Casio had the the CBA. The rights of an employee to be informed of the charges against him and to
authority to receive the same letter-notice on behalf of the other employees similarly reasonable opportunity to present his side in a controversy with either the company or his
accused. Its worthy to note that Casio, et al. were expelled only five days after the issuance own union are not wiped away by a union security clause or a union shop clause in a
of the letter-complaint against them. The Court cannot find proof on record when the three- collective bargaining agreement. An employee is entitled to be protected not only from a
day period, within which Casio, et al. was supposed to file their answer or counter-affidavits, company which disregards his rights but also from his own union the leadership of which
started to run and had expired. The Court is likewise unconvinced that the said three-day could yield to the temptation of swift and arbitrary expulsion from membership and hence
period was sufficient for Casio, et al. to prepare their defenses and evidence to refute the dismissal from his job.35cЃa
serious charges against them.chanroblesvirtua|awlibary
In the case at bar, Casio, et al. did not receive any other communication from GMC, except
Contrary to the position of GMC, the acts of Pino, et al. as officers and board members of the written notice of termination dated March 24, 1992. GMC, by its own admission, did not
IBM-Local 31, in expelling Casio, et al. from the union, do not enjoy the presumption of conduct a separate and independent investigation to determine the sufficiency of the
regularity in the performance of official duties, because the presumption applies only to evidence supporting the expulsion of Casio, et al. by IBP-Local 31. It straight away acceded to
public officers from the highest to the lowest in the service of the Government, departments, the demand of IBP-Local 31 to dismiss Casio, et al.chanroblesvirtua|awlibary
bureaus, offices, and/or its political subdivisions.31cЃa
The very same circumstances took place in Liberty Cotton Mills, wherein the Court held that
More importantly, in Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.,32cЃa the employer-company acted in bad faith in dismissing its workers without giving said
the Court issued the following reminder to employers: workers an opportunity to present their side in the controversy with their union, thus:

The power to dismiss is a normal prerogative of the employer. However, this is not without While respondent company, under the Maintenance of Membership provision of the
limitations. The employer is bound to exercise caution in terminating the services of his Collective Bargaining Agreement, is bound to dismiss any employee expelled by PAFLU for
employees especially so when it is made upon the request of a labor union pursuant to the disloyalty, upon its written request, this undertaking should not be done hastily and
Collective Bargaining Agreement. x x x. Dismissals must not be arbitrary and capricious. Due summarily. The company acted in bad faith in dismissing petitioner workers without giving
process must be observed in dismissing an employee because it affects not only his position them the benefit of a hearing. It did not even bother to inquire from the workers concerned
but also his means of livelihood. Employers should therefore respect and protect the rights of and from PAFLU itself about the cause of the expulsion of the petitioner workers. Instead,
their employees, which include the right to labor. x x x.chanroblesvirtua|awlibary the company immediately dismissed the workers on May 30, 1964 after its receipt of the
request of PAFLU on May 29, 1964 in a span of only one day stating that it had no alternative
The Court reiterated in Malayang Samahan ng mga Manggagawa sa M. Greenfield v. but to comply with its obligation under the Security Agreement in the Collective Bargaining
Ramos33cЃa that: Agreement, thereby disregarding the right of the workers to due process, self-organization
and security of tenure.36cЃa (Emphasis ours.)
While respondent company may validly dismiss the employees expelled by the union for
disloyalty under the union security clause of the collective bargaining agreement upon the In sum, the Court finds that GMC illegally dismissed Casio, et al. because not only did GMC
recommendation by the union, this dismissal should not be done hastily and summarily fail to make a determination of the sufficiency of evidence to support the decision of IBM-
thereby eroding the employees right to due process, self-organization and security of tenure. Local 31 to expel Casio, et al., but also to accord the expelled union members procedural due
The enforcement of union security clauses is authorized by law provided such enforcement is process, i.e., notice and hearing, prior to the termination of their employment
not characterized by arbitrariness, and always with due process. Even on the assumption that
the federation had valid grounds to expel the union officers, due process requires that these Consequently, GMC cannot insist that it has no liability for the payment of backwages and
union officers be accorded a separate hearing by respondent company. (Emphases supplied.) damages to Casio, et al., and that the liability for such payment should fall only upon Pino, et
al., as the IBP-Local 31 officers and board members who expelled Casio, et al. GMC
The twin requirements of notice and hearing constitute the essential elements of procedural completely missed the point that the expulsion of Casio, et al. by IBP-Local 31 and the
due process. The law requires the employer to furnish the employee sought to be dismissed termination of employment of the same employees by GMC, although related, are two
with two written notices before termination of employment can be legally effected: (1) a separate and distinct acts. Despite a closed shop provision in the CBA and the expulsion of
Casio, et al. from IBP-Local 31, law and jurisprudence imposes upon GMC the obligation to Article II- Union Security and Check-Off
accord Casio, et al. substantive and procedural due process before complying with the
demand of IBP-Local 31 to dismiss the expelled union members from service. The failure of
GMC to carry out this obligation makes it liable for illegal dismissal of Casio, et
al.chanroblesvirtua|awlibary Section 6. Maintenance of membership.

In Malayang Samahan ng mga Manggagawa sa M. Greenfield,37cЃa the Court held that


notwithstanding the fact that the dismissal was at the instance of the federation and that the
federation undertook to hold the company free from any liability resulting from the dismissal 6.1 All employees within the appropriate bargaining unit who are members of the UNION at
of several employees, the company may still be held liable if it was remiss in its duty to the time of the signing of this AGREEMENT shall, as a condition of continued employment by
accord the would-be dismissed employees their right to be heard on the the COMPANY, maintain their membership in the UNION in good standing during the
matter.chanroblesvirtua|awlibary effectivity of this AGREEMENT.

An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and
reinstatement. If reinstatement is not viable, separation pay is awarded to the employee. In
awarding separation pay to an illegally dismissed employee, in lieu of reinstatement, the 6.3 The COMPANY, upon the written request of the UNION and after compliance with the
amount to be awarded shall be equivalent to one month salary for every year of service. requirements of the New Labor Code, shall give notice of termination of services of any
Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full employee who shall fail to fulfill the condition provided in Section 6.1 and 6.2 of this Article
backwages, inclusive of allowances and other benefits or their monetary equivalent,
computed from the time their actual compensation was withheld from them up to the time
of their actual reinstatement but if reinstatement is no longer possible, the backwages shall
be computed from the time of their illegal termination up to the finality of the decision. Thus, Atty. Fuentes sent a letter to the management of PRI demanding the termination of
Casio, et al. are entitled to backwages and separation pay considering that reinstatement is employees who allegedly campaigned for, supported and signed the Petition for Certification
no longer possible because the positions they previously occupied are no longer existing, as Election of the Federation of Free Workers Union (FFW) during the effectivity of the CBA.
declared by GMC.38cЃa NAMAPRI-SPFL considered said act of campaigning for and signing the petition for
certification election of FFW as an act of disloyalty and a valid basis for termination for a
Casio, et al., having been compelled to litigate in order to seek redress for their illegal cause in accordance with its Constitution and By-Laws, and the terms and conditions of the
dismissal, are entitled to the award of attorneys fees equivalent to 10% of the total monetary CBA, specifically Article II, Sections 6.1 and 6.2 on Union Security Clause.
award.39cЃa

WHEREFORE, the instant petition is hereby DENIED.The assailed decision of the Court of
Appeals dated March 30, 2001 in CA-G.R. SP No. 40280 is AFFIRMED. On October 16, 2000, PRI served notices of termination for causes to employees whom
NAMAPRIL-SPFL sought to be terminated on the ground of “acts of disloyalty” committed
PICOP Resources Inc vs Taneca against it when respondents allegedly supported and signed the Petition for Certification
OCTOBER 23, 2012 ~ VBDIAZ Election of FFW before the “freedom period” during the effectivity of the CBA. A Notice
PICOP Resources Inc vs Taneca dated October 21, 2000 was also served on the DOLE, Caraga Region.

GR 160828

Facts: Respondents then accused PRI of ULP.

Respondents were regular rank-and-file employees of PRI and bona fide members of
Nagkahiusang Mamumuo sa PRI Southern Philippines Federation of Labor (NAMAPRI-SPFL),
which is the collective bargaining agent for the rank-and-file employees of petitioner PRI. PRI Issue:
has a CBA with NAMAPRI-SPFL. The CBA contained the following union security provisions:
WON respondents were validly terminated.
Held:

BPI VS BPI EMPLOYEES UNIONFacts:


The BSP approved the Articles of Merger executed on January 20, 2000 by and betweenBPI,
“Union security” is a generic term, which is applied to and comprehends “closed shop,” and FEBTC. This Article and Plan of Merger was approved by the SEC on April 7,
“union shop,” “maintenance of membership,” or any other form of agreement which 2000.Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC
imposes upon employees the obligation to acquire or retain union membership as a weretransferred to and absorbed by BPI as the surviving corporation. FEBTC employees,
condition affecting employment. There is union shop when all new regular employees are includingthose in its different branches across the country, were hired by petitioner as its
required to join the union within a certain period as a condition for their continued own employees,with their status and tenure recognized and salaries and benefits
employment. There is maintenance of membership shop when employees, who are union maintained.Respondent BPI Employees Union-Davao Chapter-Federation of Unions in BPI
members as of the effective date of the agreement, or who thereafter become members, Unibank is theexclusive bargaining agent of BPI¶s rank and file employees in Davao City. The
must maintain union membership as a condition for continued employment until they are former FEBTCrank-and-file employees in Davao City did not belong to any labor union at the
promoted or transferred out of the bargaining unit, or the agreement is terminated. A closed time of themerger. Prior to the effectivity of the merger, respondent union invited said
shop may be defined as an enterprise in which, by agreement between the employer and his FEBTC employeesto a meeting regarding the Union Shop Clause of the existing CBA between
employees or their representatives, no person may be employed in any or certain agreed petitioner BPI andrespondent union. The parties both advert to certain provisions of the
departments of the enterprise unless he or she is, becomes, and, for the duration of the existing CBA.After the meeting called by the union, some of the former FEBTC employees
agreement, remains a member in good standing of a union entirely comprised of or of which joined the union,while others refused. Later, however, some of those who initially joined
the employees in interest are a part. retracted their membership. Respondent union then sent notices to the former FEBTC
employees who refusedto join, as well as those who retracted their membership and called
them to a hearing regardingthe matter. When these former FEBTC employees refused to
attend the hearing, the president of the Union requested BPI to implement the Union Shop
However, in terminating the employment of an employee by enforcing the union security Clause of the CBA and to terminate their employment.After two months of management
clause, the employer needs to determine and prove that: (1) the union security clause is inaction on the request, respondent informed petitioner of itsdecision to refer the issue of
applicable; (2) the union is requesting for the enforcement of the union security provision in the implementation of the Union Shop Clause of the CBA to theGrievance Committee.
the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the However, the issue remained unresolved at this level and so it wassubsequently submitted
employee from the union. These requisites constitute just cause for terminating an employee for voluntary arbitration by the parties. Voluntary Arbitrator ruled infavor of petitioner BPI.
based on the union security provision of the CBA. Respondent Union filed a motion for reconsideration, but the voluntaryarbitrator denied the
same. It appealed to the CA and the CA reversed and set aside the decisionof the voluntary
arbitrator. Hence, this petition.
Issue:
As to the first requisite, there is no question that the CBA between PRI and respondents May a corporation invoke its merger with another corporation as a valid ground toexempt its
included a union security clause. Secondly, it is likewise undisputed that NAMAPRI-SPFL, in absorbed employees from the coverage of a union shop clause contained in itsexisting CBA
two (2) occasions demanded from PRI, in their letters dated May 16 and 23, 2000, to with its own certified labor unionEmployment Contracts
terminate the employment of respondents due to their acts of disloyalty to the Union. Significantly, too, the Articles of Merger and Plan of Merger dated April 7, 2000 did not
However, as to the third requisite, we find that there is no sufficient evidence to support the containany specific stipulation with respect to the employment contracts of existing
decision of PRI to terminate the employment of the respondents. personnel of thenon-surviving entity which is FEBTC. Unlike the Voluntary Arbitrator, this
Court cannot upholdthe reasoning that the general stipulation regarding transfer of FEBTC
assets and liabilities toBPI as set forth in the Articles of Merger necessarily includes the
transfer of all FEBTCemployees into the employ of BPI and neither BPI nor the FEBTC
The mere signing of the authorization in support of the Petition for Certification Election of employees allegedly could doanything about it. Even if it is so, it does not follow that the
FFW on March 19, 20 and 21, or before the “freedom period,” is not sufficient ground to absorbed employees should not besubject to the terms and conditions of employment
terminate the employment of respondents inasmuch as the petition itself was actually filed obtaining in the surviving corporation.The rule is that unless expressly assumed, labor
during the freedom period. Nothing in the records would show that respondents failed to contracts such as employment contracts andcollective bargaining agreements are not
maintain their membership in good standing in the Union. Respondents did not resign or enforceable against a transferee of an enterprise, labor contracts being in personam, thus
withdraw their membership from the Union to which they belong. Respondents continued to binding only between the parties. A labor contract merelycreates an action in personam and
pay their union dues and never joined the FFW. does not create any real right which should be respected bythird parties. This conclusion
draws its force from the right of an employer to select hisemployees and to decide when to
Petition denied. engage them as protected under our Constitution, and the samecan only be restricted by law
through the exercise of the police power.(BANK OF THEPHILIPPINE ISLANDS v. BPI with the Regional Trial Court was proper because it is a remedy specifically granted to an
EMPLOYEES UNION-DAVAO CHAPTER-FEDERATIONOF UNIONS IN BPI UNIBANK, G.R. No. owner (whose properties were subjected to a writ of execution to enforce a decision
164301, August 10, 201 rendered in a labor dispute in which it was not a party) by Section 17 (now 16), Rule 39,
Revised Rules of Court and by the doctrines laid down in Sy v. Discaya,[5] Santos v. Bayhon[6]
[G.R. No. 126322. January 16, 2002] and Manliguez v. Court of Appeals.[7]

YUPANGCO COTTON MILLS, INC., petitioner, vs. COURT OF APPEALS, HON. URBANO C. On August 27, 1996, the Court of Appeals denied petitioner’s motion for reconsideration
VICTORIO, SR., Presiding Judge, RTC Branch 50, Manila, RODRIGO SY MENDOZA, SAMAHANG
MANGGAGAWA NG ARTEX (SAMAR-ANGLO) represented by its Local President RUSTICO RULING:
CORTEZ, and WESTERN GUARANTY CORPORATION, respondents. 1) FORUM SHOPPING. There is no forum-shopping where two different orders were
questioned, two distinct causes of action and issues were raised, and two objectives were
FACTS: “From the records before us and by petitioner’s own allegations and admission, it has sought.
taken the following actions in connection with its claim that a sheriff of the National Labor
Relations Commission “erroneously and unlawfully levied” upon certain properties which it In the case at bar, there was no identity of parties, rights and causes of action and reliefs
claims as its own. sought.

“1. It filed a notice of third-party claim with the Labor Arbiter on May 4, 1995. The case before the NLRC where Labor Arbiter Reyes issued a writ of execution on the
property of petitioner was a labor dispute between Artex and Samar-Anglo. Petitioner was
“2. It filed an Affidavit of Adverse Claim with the National Labor Relations Commission (NLRC) not a party to the case. The only issue petitioner raised before the NLRC was whether or not
on July 4, 1995, which was dismissed on August 30, 1995, by the Labor Arbiter. the writ of execution issued by the labor arbiter could be satisfied against the property of
petitioner, not a party to the labor case.
“3. It filed a petition for certiorari and prohibition with the Regional Trial Court of Manila,
Branch 49, docketed as Civil Case No. 95-75628 on October 6, 1995. The Regional Trial Court On the other hand, the accion reinvindicatoria filed by petitioner in the trial court was to
dismissed the case on October 11, 1995 for lack of merit. recover the property illegally levied upon and sold at auction. Hence, the causes of action in
these cases were different.
“4. It appealed to the NLRC the order of the Labor Arbiter dated August 13, 1995 which
dismissed the appeal for lack of merit on December 8, 1995. 2) THIRD PARTY CLAIM. a third party whose property has been levied upon by a sheriff to
enforce a decision against a judgment debtor is afforded with several alternative remedies to
“5. It filed an original petition for mandatory injunction with the NLRC on November 16, protect its interests. The third party may avail himself of alternative remedies cumulatively,
1995. This was docketed as Case No. NLRC-NCR-IC. 0000602-95. This case is still pending with and one will not preclude the third party from availing himself of the other alternative
that Commission. remedies in the event he failed in the remedy first availed of.

“6. It filed a complaint in the Regional Trial Court in Manila which was docketed as Civil Case Thus, a third party may avail himself of the following alternative remedies:
No. 95-76395. The dismissal of this case by public respondent triggered the filing of the
instant petition. a) File a third party claim with the sheriff of the Labor Arbiter, and

“In all of the foregoing actions, petitioner raised a common issue, which is that it is the owner b) If the third party claim is denied, the third party may appeal the denial to the NLRC.[13]
of the properties located in the compound and buildings of Artex Development Corporation,
which were erroneously levied upon by the sheriff of the NLRC as a consequence of the The remedies above mentioned are cumulative and may be resorted to by a third-party
decision rendered by the said Commission in a labor case docketed as NLRC-NCR Case No. 00- claimant independent of or separately from and without need of availing of the others. If a
05-02960-90.”[2] third-party claimant opted to file a proper action to vindicate his claim of ownership, he must
institute an action, distinct and separate from that in which the judgment is being enforced,
On March 29, 1996, the Court of Appeals promulgated a decision[3] dismissing the petition with the court of competent jurisdiction even before or without need of filing a claim in the
on the ground of forum shopping and that petitioner’s remedy was to seek relief from this court which issued the writ, the latter not being a condition sine qua non for the former. In
Court. such proper action, the validity and sufficiency of the title of the third-party claimant will be
resolved and a writ of preliminary injunction against the sheriff may be issued.
On April 18, 1996, petitioner filed with the Court of Appeals a motion for reconsideration of
the decision.[4] Petitioner argued that the filing of a complaint for accion reinvindicatoria G.R. NO. L-46496 FEBRUARY 27, 1940
ANG TIBAY, REPRESENTED BY TORIBIO TEODORO, MANAGER AND PROPIETOR, AND The decision must be rendered on the evidence presented at the hearing, or at least
NATIONAL WORKERS BROTHERHOOD, PETITIONERS, VS. THE COURT OF INDUSTRIAL contained in the record and disclosed to the parties affected.
RELATIONS AND NATIONAL LABOR UNION, INC., RESPONDENTS. The administrative body or any of its judges, therefore, must act on its or his own
69 Phil. 635 – Political Law – Constitutional Law – Due Process in Administrative Bodies independent consideration of the law and facts of the controversy, and not simply accept the
views of a subordinate in arriving at a decision.
Facts: The administrative body should, in all controversial questions, render its decision in such a
manner that the parties to the proceeding can know the various issues involved, and the
Teodoro Toribio owns and operates Ang Tibay, a leather company which supplies the reasons for the decisions rendered. The performance of this duty is inseparable from the
Philippine Army. Due to alleged shortage of leather, Toribio caused the lay off of a number of authority conferred upon it
his employees. However, the National Labor Union, Inc. (NLU) questioned the validity of said
lay off as it averred that the said employees laid off were members of NLU while no McBurnie V Ganzon October 17, 2013 J. Reyes Facts: On October 4, 2002, McBurnie, an
members of the rival labor union National Workers Brotherhood (NWB) were laid off. NLU Australian national, instituted a complaint for illegal dismissal and other monetary claims
claims that NWB is a company dominated union and Toribio was merely busting NLU. against the respondents. McBurnie claimed that on May 11, 1999, he signed a five-year
employment agreement with the company EGI as an Executive Vice-President
The case reached the Court of Industrial Relations (CIR) where Toribio and NWB won. who shall oversee the management of the company’s hotels and
Eventually, NLU went to the Supreme Court invoking its right for a new trial on the ground of resorts within the Philippines. He performed work for the company until sometime in
newly discovered evidence. The Supreme Court agreed with NLU. The Solicitor General, November 1999, when he figured in an accident that compelled him to go back to Australia
arguing for the CIR, filed a motion for reconsideration. while recuperating from his injuries. While in Australia, he was informed by respondent
ISSUE: Ganzon that his services were no longer needed because their intended project would no
longer push through. The respondents opposed the complaint, contending that their
Whether or not the National Labor Union, Inc. is entitled to a new trial. agreement with McBurnie was to jointly invest in and establish a company for the
management of hotels. They did not intend to create an employer-employee relationship,
HELD: and the execution of the employment contract that was being invoked by McBurnie was
solely for the purpose of allowing McBurnie to obtain an alien work permit in the Philippines.
Yes. The records show that the newly discovered evidence or documents obtained by NLU, At the time McBurnie left for Australia for his medical treatment, he had not yet obtained a
which they attached to their petition with the SC, were evidence so inaccessible to them at work permit. In a Decision dated September 30, 2004, the LA declared McBurnie as having
the time of the trial that even with the exercise of due diligence they could not be expected been illegally dismissed from employment, and thus entitled to receive: (a) US$985,162.00 as
to have obtained them and offered as evidence in the Court of Industrial Relations. Further, salary and benefits for the unexpired term of
the attached documents and exhibits are of such far-reaching importance and effect that their employment contract, (b) ₱2,000,000.00 as moral and exemplary damages, and (c)
their admission would necessarily mean the modification and reversal of the judgment attorney’s fees equivalent to 10%
rendered (said newly obtained records include books of business/inventory accounts by Ang of the total monetary award. On appeal, the NLRC dismissed the appeal and motion to
Tibay which were not previously accessible but already existing). reduce the bond of approximately P60M. On one of the many appeals to CA, it granted the
motion to reduce appeal bond and directed NLRC to give due course to their appeal. NLRC
The SC also outlined that administrative bodies, like the CIR, although not strictly bound by then reversed and set aside the ruling of LA above. The NLRC rule that: (1) McBurnie was
the Rules of Court must also make sure that they comply to the requirements of due process. never an employee of the respondents and (2) he failed to obtain work permit that would
For administrative bodies, due process can be complied with by observing the following: have allowed him to work for the respondents. The third division of SC however reversed the
The right to a hearing which includes the right of the party interested or affected to present decision of CA granting the motion to reduce the bond and it directive for the NLRC to give
his own case and submit evidence in support thereof. course to the appeal. The earlier ruling of LA thus became final. This is deemed a third MR.
Not only must the party be given an opportunity to present his case and to adduce evidence (Note: The court held that even if it is procedurally defective since
tending to establish the rights which he asserts but the tribunal must consider the evidence it’s
presented. already a third MR, it does not preclude the court from ruling for the sake of substantial
While the duty to deliberate does not impose the obligation to decide right, it does imply a justice.)
necessity which cannot be disregarded, namely, that of having something to support its Issue: W/N McBurnie, an Australian national can be considered as an employee of Ganzon?
decision. A decision with absolutely nothing to support it is a nullity, a place when directly NO
attached.
Not only must there be some evidence to support a finding or conclusion but the evidence
must be “substantial.” Substantial evidence is more than a mere scintilla It means such The court basically adopted the ruling of NLRC.
relevant evidence as a reasonable mind might accept as adequate to support a conclusion.
the four-fold test, the Court held that PDIlacked control over the petitioner. Though PDI
Court held that before McBurnie can allege illegal dismissal, it was necessary for him to issued guidelinesfor the petitioner to follow in the course of writing her columns,careful
establish, first and foremost, that he was qualified and duly authorize to obtain employment examination reveals that the factors enumerated by thepetitioner are inherent conditions in
w/in our jurisdiction. This requirement for foreigners who intend to work w/in the country running a newspaper. Inother words, the so-called control as to time, space, anddiscipline
to obtain employment permit is laid down in Art. 40 Title II of the Labor Code. Failure to do are dictated by the very nature of the newspaper business itself. Aside from the constraints
so poses serious problem in obtaining relief from the Court. Hence, by the very fact that presented by thespace allocation of her column, there were no restraints on her creativity;
McBurnie failed to obtain employment permit necessitates the dismissal of his labor petitioner was free to write her column in the manner and style she was accustomed to and
complaint. to use whatever researchmethod she deemed suitable for her purpose. The
apparentlimitation that she had to write only on subjects that befitted theLifestyle section
did not translate to control, but was simply alogical consequence of the fact that her column
The court also noted that McBurnie failed to establish employer appeared in thatsection and therefore had to cater to the preference of thereaders of that
– section.Orozco in this case is considered as an independentcontractor. As stated in the case
employee relationship. The records disclose that employment of McBurnie is conditional on of Sonza vs. ABS-CBN,independent contractors often present themselves to possessunique
the successful completion of the project financing for the hotel project in Baguio City and his skills, expertise or talent to distinguish them from ordinaryemployees. Like the petitioner in
acquisition of Alien Employment Permit. the cited case, Petitioner wasengaged as a columnist for her talent, skill, experience, and her
o unique viewpoint as a feminist advocate. How she utilized allthese in writing her column was
not subject to dictation byrespondent. As in
It must be noted that the project didn’t push through. Sonza
, respondent PDI was not involved inthe actual performance that produced the finished
product. Itonly reserved the right to shorten petitioner’s articles based onthe newspaper’s
McBurnie likewise failed to prove employer-employee relationship in accordance w/ the capacity to accommodate the same. This factwas not unique to petitioner’s column. It is a
four-fold test: (1) selection & engagement (2) payment of wages (3) power of dismissal and reality in thenewspaper business that space constraints often dictate thelength of articles
(4) control. and columns, even those that regularly appear therein.

McBurnie also failed to show any document such as payslips or vouchers of his salaries
during the time that he allegedly worked for the responden

1. Orozco vs. Fifth Division of the Court of AppealsFacts:PDI engaged the services of Orozco
to write a weeklycolumn for its Lifestyle section. She religiously submitted her articles except
for a 6-month stint when she went to NY City.Nevertheless, she continued to send her
articles through mail.She also received compensation for every column that
waspublished.When Orozco’s column appeared in the newspaper for the last time, her
editor, Logarta, told her that the PDI’s editor-in-chief, Magsanoc, wanted to stop publishing
her columns for noreason at all and advised her to talk to the editor-in-chief. WhenOrozco
talked to Magsanoc, the latter told her that it was the PDIchairperson who wanted to stop
the publication of her column.However, when Orozco talked to Apostol, the latter told her
thatMagsanoc informed her that the Lifestyle section had alreadymany columnists.PDI claims
that Magsanoc met with the editor of theLifestyle section to discuss how to improve said
section. Theyagreed to cut down the number of columnists by keeping onlythose whose
columns were well-written, with regular feedbackand following. In their judgment,
petitioner’s column failed toimprove, continued to be superficially and poorly written,
andfailed to meet the high standards of the newspaper. Hence, theydecided to terminate
petitioner’s column.Orozco filed a complaint for illegal dismissal. The LAdecided in favor of
petitioner. On appeal, the NLRC dismissedthe appeal and affirmed the LA’s decision. The CA
on the other hand, set aside the NLRC’s decision and dismissed
Orozco’scomplaint.Issue:Whether petitioner is an employee of PDI.Whether petitioner was
illegally dismissed.Decision:Petition dismissed. Judgment and Resolution affirmed.Applying