ATLAS FARMS VS NLRC

392 SCRA 128

POINT OF THE CASE

***Where the dispute is just in the interpretation, implementation or enforcement stage, it may be
referred to the grievance machinery set up in the CBA, or brought to voluntary arbitration. But, where
there was already actual termination, with alleged violation of the employee’s rights, it is already
cognizable by the labor arbiter.

Facts:
Petitioner contends that the dismissal of private respondents was for a just and valid cause, pursuant to
the provisions of the company’s rules and regulations. It also alleges lack of jurisdiction on the part of
the labor arbiter, claiming that the cases should have been resolved through the grievance machinery,
and eventually referred to voluntary arbitration, as prescribed in the CBA.

Private respondents, Peña and Abion contend that they were illegally dismissed from employment
because management discovered that they intended to form another union, and because they were
vocal in asserting their rights.

The labor arbiter dismissed the petitioner’s complaints on the ground that the grievance machinery in
the collective bargaining agreement (CBA) had not yet been exhausted and for lack of merit, finding that
the case was one of illegal dismissal and did not involve the interpretation or implementation of any
CBA provision, stated that Article 217 (c) of the Labor Code was inapplicable to the case.

Private respondents availed of the grievance process, but later on re-filed the case before the NLRC.
They alleged "lack of sympathy" on petitioner’s part to engage in conciliation proceedings.

Their cases were consolidated in the NLRC. At the initial mandatory conference, petitioner filed a
motion to dismiss, on the ground of lack of jurisdiction, alleging private respondents themselves
admitted that they were members of the employees’ union with which petitioner had an existing CBA.
This being the case, according to petitioner, jurisdiction over the case belonged to the grievance
machinery and thereafter the voluntary arbitrator, as provided in the CBA.

Thus, private respondents brought the case to the NLRC, which reversed the labor arbiter’s decision.
Dissatisfied with the NLRC ruling, petitioner went to the Court of Appeals by way of a petition for review
on certiorari, seeking reinstatement of the labor arbiter’s decision. The appellate court denied the
petition and affirmed the NLRC resolution with some modifications.
Issue:
Whether or not the labor arbiter or the voluntary arbitrator has jurisdiction to decide over this case of
dismissal.

Held:
As correctly observed by the NLRC, petitioner did not comply with the requirements of a valid dismissal.
For a dismissal to be valid, the employer must show that: (1) the employee was accorded due process,
and (2) the dismissal must be for any of the valid causes provided for by law. No evidence was shown
that private respondents refused, as alleged, to receive the notices requiring them to show cause why
no disciplinary action should be taken against them. Without proof of notice, private respondents who
were subsequently dismissed without hearing were also deprived of a chance to air their side at the
level of the grievance machinery. Given the fact of dismissal, it can be said that the cases were
effectively removed from the jurisdiction of the voluntary arbitrator, thus placing them within the
jurisdiction of the labor arbiter. ***Where the dispute is just in the interpretation, implementation or
enforcement stage, it may be referred to the grievance machinery set up in the CBA, or brought to
voluntary arbitration. But, where there was already actual termination, with alleged violation of the
employee’s rights, it is already cognizable by the labor arbiter.

In sum, the SC concluded that the labor arbiter and then the NLRC had jurisdiction over the cases
involving private respondents’ dismissal, and no error was committed by the appellate court in
upholding their assumption of jurisdiction.

Related Articles :

ART. 217. Jurisdiction of Labor Arbiters and the Commission.

xxx
(c) Cases arising from the interpretation or implementation of collective bargaining agreements and
those arising from the interpretation or enforcement of company personnel policies shall be disposed of
by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may
be provided in said agreements.

ART. 260. Grievance Machinery and Voluntary Arbitration.

The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the
mutual observance of its terms and conditions. They shall establish machinery for the adjustment and
resolution of grievances arising from the interpretation or implementation of their Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company personnel policies. All
grievances submitted to the grievance machinery which are not settled within seven (7) calendar days
from the date of its submission shall automatically be referred to voluntary arbitration prescribed in
the Collective Bargaining Agreement.
For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a
Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in the agreement a procedure for the
selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the listing of
Qualified Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a
Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary
Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective
Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or panel of
Arbitrators has been selected by the parties as prescribed.

VIVERO VS CA
344 SCRA 268

Point of the case

***"all other labor disputes" may include termination disputes provided that the agreement between
the Union and the Company states "in unequivocal language that [the parties] conform to the
submission of termination disputes and unfair labor practices to voluntary arbitration."

There is a need for an express stipulation in the CBA that illegal termination disputes should be
resolved by a Voluntary Arbitrator or Panel of Voluntary Arbitrators, since the same fall within a
special class of disputes that are generally within the exclusive original jurisdiction of Labor Arbiters
by express provision of law.

RULING:

The CBA clarifies the proper procedure to be followed in situations where the parties expressly
stipulate to submit termination disputes to the jurisdiction of a Voluntary Arbitrator or Panel of
Voluntary Arbitrators. For when the parties have validly agreed on a procedure for resolving
grievances and to submit a dispute to voluntary arbitration then that procedure should be strictly
observed. Non-compliance therewith cannot be excused, as petitioner suggests, by the fact that he is
not well-versed with the "fine prints" of the CBA. It was his responsibility to find out, through his
Union, what the provisions of the CBA were and how they could affect his rights.

As provided in Art. 241, par. (p), of the Labor Code -(p) It shall be the duty of any labor organization
and its officers to inform its members on the provisions of its constitution and by-laws, collective
bargaining agreement, the prevailing labor relations system and all their rights and obligations under
existing labor laws. In fact, any violation of the rights and conditions of union membership is a
"ground for cancellation of union registration or expulsion of officer from office, whichever is
appropriate. At least thirty percent (30%) of all the members of a union or any member or members
especially concerned may report such violation to the Bureau [of Labor Relations] x x x x"

In San Miguel Corp. v. National Labor Relations Commission the Supreme Court held that the phrase
"all other labor disputes" may include termination disputes provided that the agreement between the
Union and the Company states "in unequivocal language that [the parties]conform to the submission of
termination disputes and unfair labor practices to voluntary arbitration." Ergo, it is not sufficient to
merely say that parties to the CBA agree on the principle that "all disputes" should first be submitted to
a Voluntary Arbitrator. There is a need for an express stipulation in the CBA that illegal termination
disputes should be resolved by a Voluntary Arbitrator or Panel of Voluntary Arbitrators, since the same
fall within a special class of disputes that are generally within the exclusive original jurisdiction of Labor
Arbiters by express provision of law. Absent such express stipulation, the phrase "all disputes" should be
construed as limited to the areas of conflict traditionally within the jurisdiction of Voluntary Arbitrators,
i.e., disputes relating to contract-interpretation, contract-implementation, or interpretation or
enforcement of company personnel policies. Illegal termination disputes -not falling within any of these
categories -should then be considered as a special area of interest governed by a specific provision of
law.

DAVAO CITY WATER DISTRICT VS CIVIL SERVICE COMMISSION

201 SCRA 593

POINT OF THE CASE

***A water district is a corporation created pursuant to a special law —P.D. No. 198, as amended, and
as such its officers and employees are covered by the Civil Service Law, therefore, within its
jurisdiction.

RULING:
Petitioners' main argument is that they are private corporations without original charter; hence they are
outside the jurisdiction of respondents CSC and COA. Reliance is made on the Metro Iloilo case which
declared petitioners as quasi-public corporations created by virtue of PD 198, a general legislation which
cannot be considered as the charter itself creating the water districts. Holding on to this ruling,
petitioners contend that they are private corporations which are only Labor Relations regarded as quasi-
public or semi-public because they serve public interest and convenience and that since PD 198 is a
general legislation, the operative act which created a water district is not the said decree but the
resolution of the sanggunian concerned.

After a fair consideration of the parties' arguments coupled with a careful study of the applicable laws as
well as the constitutional provisions involved, SC ruled against the petitioners and reiterate the ruling in
Tanjay case declaring water districts government-owned or controlled corporations with original
charter. The Court's pronouncement in this case, as extensively quoted, supra, partly reads:

The Labor Arbiter failed to take into account the provisions of Presidential Decree No. 1479, which
went into effect on 11 June 1978, P.D. No. 1479, wiped away Section 25 of PD 198 , and Section 26 of
PD 198 was renumbered as Section 25 in the following manner:

Section 26 of the same decree PD 198 is hereby amended to read as Section 25 as follows:

Section 25. Authorization. —The district may exercise all the powers which are expressly granted by
this Title or which are necessarily implied from or incidental to the powers and purposes herein stated.
For the purpose of carrying out the objectives of this Act, a district is hereby granted the power of
eminent domain, the exercise thereof shall, however, be subject to review by the Administration.
Thus, Section 25 of PD 198 exempting the employees of water districts from the application of the
Civil Service Law was removed from the statute books:
xxx xxx xxx

As early as Baguio Water District v. Trajano, et al.,(G.R. No. 65428, February 20, 1984, 127
SCRA 730), The SC already ruled that a water district is a corporation created pursuant to a special
law —P.D. No. 198, as amended, and as such its officers and employees are covered by the Civil
Service Law.

In another case (Hagonoy Water District v. NLRC, G.R. No.81490, August 31, 1988, 165 SCRA
272), SC ruled once again that local water districts are quasi-public corporations whose employees
belong to the Civil Service.

BOY SCOUTS OF TH E PHI L. VS NLRC

196 SCRA176
POINT OF THE CASE
***Employees of petitioner BSP are embraced within the Civil Service and are accordingly governed
by the Civil Service Law and Regulation.

RULING:
While the BSP may be seen to be a mixed type of entity, combining aspects of both public and private
entities, we believe that considering the character of its purposes and its functions, the statutory
designation of the BSP as "a public corporation" and the substantial participation of the Government in
the selection of members of the National Executive Board of the BSP, the BSP, as presently constituted
under its charter, is a government-controlled corporation within the meaning of Article IX. (B) (2) (1) of
the Constitution which reads as follows:

The Civil Service embraces all branches, subdivisions, instrumentality mentalities and agencies of the
Government, including government-owned or controlled corporations with original charters.

SC are fortified in this conclusion when they noted that the Administrative Code of 1987 designates the
BSP as one of the attached agencies of the Department of Education, Culture and Sports ("DECS").
An "agency of the Government" is defined as referring to any of the various units of the Government
including a department, bureau, office, instrumentality, government-owned or-controlled corporation,
or local government or distinct unit therein.
"Government instrumentality" is in turn defined in the 1987 Administrative Code in the following
manner:

Instrumentality -- refers to any agency of the National Government, not integrated within the
department framework, vested with special functions or jurisdiction by law, endowed with some if not
all corporate powers, administering special funds, and enjoying operational autonomy usually
through a charter. This term includes regulatory agencies, chartered institutions and government-
owned or controlled corporations

The same Code describes a "chartered institution" in the following terms:

Chartered institution -- refers to any agency organized or operating under a special charter, and
vested by law with functions relating to specific constitutional policies or objectives. This term includes
the state universities and colleges, and the monetary authority of the State.

***SC believe that the BSP is appropriately regarded as "a government instrumentality" under the
1987 Administrative Code. It thus appears that the BSP may be regarded as both a "government
controlled corporation with an original charter" and as an "instrumentality" of the Government within
the meaning of Article IX (B) (2) (1) of the Constitution. It follows that the employees of petitioner BSP
are embraced within the Civil Service and are accordingly governed by the Civil Service Law and
Regulation.

ZAMORAS VS SU
184 SCRA 248

POINT OF THE CASE

***An employee in an agricultural farm or plantation falls under the NLRC, which has
jurisdiction to try and decide Zamora's complaint for illegal dismissal (Art. 217, Labor Code)

FACTS:
The Labor Arbiter rendered a decision holding that Zamoras, as overseer of the respondent's
plantation, was a regular employee whose services were necessary and desirable to the usual trade or
business of his employer. The Labor Arbiter held that the dismissal of Zamoras was without just cause,
hence, illegal. The private respondents were ordered to reinstate him to his former position as overseer
of the plantation and to pay him backwages in the event that he opted not to be reinstated or that his
reinstatement was not feasible.

The private respondents appealed to the National Labor Relations Commission, alleging that the Labor
Arbiter erred; consequently, the NLRC rendered a decision reversing the Labor Arbiter. It held that "the
right to control test used in determining the existence of an employer-employee relationship is
unavailing in the instant case and that what exists between the parties is a landlord-tenant relationship"
, because such functions as introducing permanent improvements on the land, assigning portions to
tenants, supervising the cleaning, planting, care and cultivation of the plants, and deciding where and to
whom to sell the copra are attributes of a landlord-tenant relationship, hence, jurisdiction over the case
rests with the Court of Agrarian Relations.

Zamoras filed a petition, assailing the NLRC's decision.

ISSUE:
Whether or not the NLRC or the Court of Agrarian reform has jurisdiction over the case.

HELD:
The essential requisites of a tenancy relationship are: (1) the parties are the landholder and the tenant;
(2) the subject is the agricultural holding; (3) there is consent between the parties; (4) the purpose is
agricultural production; (5) there is personal cultivation by the tenant; and (6) there is a sharing of
harvests between landlord and tenant.

The element of personal cultivation of the land, or with the aid of his farm household, essential in
establishing a landlord-tenant or a lessor-lessee relationship, is absent in the relationship between Su
and Zamoras (Co vs.IAC, 162 SCRA 390; Graza vs. CA, 163 SCRA 39), for Zamoras did not cultivate any
part of Su's plantation either by himself or with the help of his household. On the other hand, the
following circumstances are indicative of an employer-employee relationship p between them:
1. Zamoras was selected and hired by Su as overseer of the coconut plantation.
2. His duties were specified by Su.
3. Su controlled and supervised the performance of his duties. He determined to whom
Zamoras should sell the copra produced from the plantation.
4. Su paid Zamoras a salary of P2,400 per month plus one-third of the copra sales every two months as
compensation for managing the plantation. ***Since Zamoras was an employee, not a tenant of Su, it
is the NLRC, not the Court of Agrarian Relations, which has jurisdiction to try and decide Zamora's
complaint for illegal dismissal (Art. 217, Labor Code)
 FORTUNE CEMENT VS NLRC
G.R. No. 79762
POINT OF THE CASE
***A dismissal as a corporate officer is a purely intra-corporate controversy over which the Securities
and Exchange Commission (SEC) has original and exclusive jurisdiction. (Section 5, par. (c) Of
Presidential Decree No. 902-A)

FACTS:
The FCC (Fortune Cement Corporation) Board approved and adopted a resolution dismissing Lagdameo
as Executive Vice-President of the company, effective immediately, for loss of trust and confidence.

Lagdameo filed with the National Labor Relations Commission (NLRC), a complaint for illegal dismissal
against FCC alleging that his dismissal was done without a formal hearing and investigation and,
therefore, without due process.

FCC moved to dismiss Lagdameo's complaint on the ground that his dismissal as a corporate officer is
a purely intra-corporate controversy over which the Securities and Exchange Commission (SEC) has
original and exclusive jurisdiction. The Labor Arbiter granted the motion to dismiss.

On appeal, however, the NLRC set aside the Labor Arbiter's order and remanded the case to the
Arbitration Branch "for appropriate proceedings". The NLRC denied FCC's motion for reconsideration.
Dissatisfied, FCC filed this petition for certiorari.

ISSUE:

Whether or not the NLRC has jurisdiction over a complaint filed by a corporate executive vice-president
for illegal dismissal, resulting from a board resolution dismissing him as such officer.

HELD:

The SC find the petition with merit.

Section 5 of Presidential Decree No. 902-A vests in the SEC original and exclusive jurisdiction over this
controversy:
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange
Commission over corporations, partnerships and other forms of associations registered with it as
expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to
hear and decide cases involving:
A) Xxxxxxx
B) Xxxxxxx
 C) Controversies in the election or appointments of directors, trustees, officers or managers of
such corporations, partnership or associations.

The Solicitor General, declining to defend public respondent FCC in its pleading entitled
"Manifestation in Lieu of Comment," aptly observed:

The position of "Executive Vice-President," from which private respondent Lagdameo claims to have
been illegally dismissed, is an elective corporate office. He himself acquired that position through
election by the corporation's Board of Directors; although he also lost the same as a consequence of the
latter's resolution. Indeed the election, appointment and/or removal of an executive vice-president is a
prerogative vested upon a corporate board. And it must be, not only because it is a practice observed in
petitioner Fortune Cement Corporation, but more so, because of an express mandate of law.

The Solicitor General pointed out that "a corporate officer's dismissal is always a corporate act and/or
intra-corporate controversy and that nature is not altered by the reason or wisdom which the Board of
Directors may have in taking such action." ***The dispute between petitioner and Lagdameo is of the
class described in Section 5, par. (c) Of Presidential Decree No. 902-A, hence, within the original and
exclusive jurisdiction of the SEC. The Solicitor General recommended that the petition be granted and
the Case be dismissed by respondent NLRC for lack of jurisdiction.

SEAFDEC VS NLRC
206 SCRA 283

POINT OF THE CASE

***An intergovernmental organization or international agency enjoys functional independence and
freedom from control of the state in whose territory its office is located, thus, beyond the jurisdiction
of the NLRC.

FACTS:

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

Development Center, organized through an agreement entered into, among others by the Philippines.

Private respondent Juvenal Lazaga was employed as a Research Associate on a probationary basis by
the SEAFDEC-AQD and was appointed Senior External Affairs Officer. Thereafter, he was appointed to
the position of Professional III and designated as Head of External Affairs Office.

Petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice of termination to private
respondent informing him that due to the financial constraints being experienced by the department,
his services shall be terminated and that he is entitled to separation benefits equivalent to one (1)
month of his basic salary for every year of service plus other benefits.

Upon petitioner's failure to pay private respondent his separation pay, the latter filed a complaint
against the petitioner for non-payment of separation benefits plus moral damages and attorney's fees
with the Arbitration Branch of the NLRC.

Petitioner alleged that the NLRC has no jurisdiction over the case in as much as the SEAFDEC-AQD is an
international organization and that private respondent must first secure clearances from the proper
departments for property or money accountability before any claim for separation pay will be paid, and
which clearances had not yet been obtained by the private respondent.

The labor arbiter rendered a decision with some modifications in the awards for damages, which was
affirmed by the NLRC with some modifications likewise as to the award.
Petitioners filed a Motion for Reconsideration was denied, thus , petitioner instituted a petition for
certiorari alleging that the NLRC has no jurisdiction to hear and decide respondent Lazaga's complaint
since SEAFDEC-AQD is immune from suit owing to its international character and the complaint is in
effect a suit against the State which cannot be maintained without its consent.

ISSUE:
Whether or not, the NLRC has jurisdiction to decide a termination case of a local employee hired by
SEAFDEC-AQD, an international organization in which the Philippines is a signatory.

HELD:
The petition is impressed with merit.

***Petitioner Southeast Asian Fisheries Development Center-Aquaculture Department (SEAFDEC-AQD)

is an international agency beyond the jurisdiction of public respondent NLRC.

Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional
independence and freedom from control of the state in whose territory its office is located.

Pursuant to its being a signatory to the Agreement, the Republic of the Philippines agreed to be
represented by one Director in the governing SEAFDEC Council and that its national laws and regulations
shall apply only insofar as its contribution to SEAFDEC of "an agreed amount of money, movable and
immovable property and services necessary for the establishment and operation of the Center" are
concerned. It expressly waived the application of the Philippine laws on the disbursement of funds of
petitioner SEAFDEC-AQD (Section 2, P.D. No. 292)
 PEPSI COLA VS GAL-LANG
201 SCRA 695
POINT OF THE CASE

***Not every controversy arising from employee-employer relationship can be resolved only by the
labor arbiters. This will be so only if there is a "reasonable causal connection" between the claim
asserted and employee-employer relations to put the case under the provisions of Article 217. Absent
such a link, the complaint will be cognizable by the regular courts of justice in the exercise of their civil
and criminal jurisdiction.

FACTS:
Petitioners filed a criminal complaint for theft against the respondents, employees, who were suspected
of complicity in the irregular disposition of empty Pepsi Cola bottles, but this was later withdrawn and
substituted with a criminal complaint for falsification of private documents. However, the complaint was
dismissed after a preliminary investigation conducted by the MTC.

Allegedly after an administrative investigation, the private respondents were dismissed by the
petitioner company. As a result, they lodged a complaint for illegal dismissal with the Regional
Arbitration Branch of the NLRC, and decisions mended reinstatement with damages. In addition, they
instituted in the Regional Trial Court of, a separate civil complaint against the petitioners for damages
arising from what they claimed to be their malicious prosecution.

Petitioners moved to dismiss the civil complaint on the ground that the trial court had no jurisdiction
over the case because it involved employee-employer relations that were exclusively cognizable by the
labor arbiter. The motion was granted, however, the respondent judge, acting on the motion for
reconsideration, reinstated the complaint, saying it was "distinct from the labor case for damages now
pending before the labor courts."

The petitioners then came to SC for relief.

The petitioners invoke Article 217 of the Labor Code and a number of decisions of this Court to
support their position that the private respondents civil complaint for damages falls under the
jurisdiction of the labor arbiter. They particularly cite the case of Getz Corporation v. Court of Appeals,
where it was held that a court of first instance had no jurisdiction over the complaint filed by a
dismissed employee "for unpaid salary and other employment benefits, termination pay and moral and
exemplary damages."

ISSUE:
Whether or not the labor arbiter has jurisdiction on all controversies involving employee-employer
relationship.
HELD:
The petition was denied.

***It must be stressed that not every controversy involving workers and their employers can be
resolved only by the labor arbiters. This will be so only if there is a "reasonable causal connection"
between the claim asserted and employee-employer relations to put the case under the provisions of
Article 217. Absent such a link, the complaint will be cognizable by the regular courts of justice in the
exercise of their civil and criminal jurisdiction.

The case involves a complaint for damages for malicious prosecution which was filed with the Regional
Trial Court by the employees of the defendant company. It does not appear that there is a "reasonable
causal connection" between the complaint and the relations of the parties as employer and employees.
The complaint did not arise from such relations and in fact could have arisen independently of an
employment relationship between the parties. No such relationship or any unfair labor practice is
asserted. What the employees are alleging is that the petitioners acted with bad faith when they filed
the criminal complaint which the Municipal Trial Court said was intended "to harass the poor
employees" and the dismissal of which was affirmed by the Provincial Prosecutor "for lack of evidence
to establish even a slightest probability that all the respondents herein have committed the crime
imputed against them." This is a matter which the labor arbiter has no competence to resolve as the
applicable law is not the Labor Code but the Revised Penal Code

TOLOSA VS NLRC
401 SCRA 291
POINT OF THE CASE

***Allegations in the complaint determine the nature of the action and, consequently, the jurisdiction
of the courts.
It is not the NLRC but the regular courts that have jurisdiction over actions for damages, in
which the employer-employee relation is merely incidental, and in which the cause of action
proceeds from a different source of obligation such as a tort.

FACTS:

Petitioner argues that her cause of action is not predicated on a quasi delict or tort, but on the failure
of private respondents --as employers of her husband (Captain Tolosa) --to provide him with timely,
adequate and competent medical services under Article 161 of the Labor Code:

ART 161.Assistance of employer.--It shall be the duty of any employer to provide all the necessary
assistance to ensure the adequate and immediate medical and dental attendance and treatment to an
injured or sick employee in case of emergency.
Likewise, petitioner contends that Article 217 (a) (4)7of the Labor Code vests labor arbiters and the
NLRC with jurisdiction to award all kinds of damages in cases arising from employer-employee relations.

ISSUE:

Whether or not the NLRC has jurisdiction over the case

HELD:
The NLRC and the labor arbiter have no jurisdiction over petitioner's claim for damages, because the
ruling was based on a quasi delict or tort per Article 2176 of the Civil Code. It is not the NLRC but the
regular courts that have jurisdiction over actions for damages, in which the employer-employee relation
is merely incidental, and in which the cause of action proceeds from a different source of obligation such
as a tort. Since petitioner's claim for damages is predicated on a quasi delict or tort that has no
reasonable causal connection with any of the claims provided for in Article 217, other labor statutes, or
collective bargaining agreements, jurisdiction over the action lies with the regular courts--not with the
NLRC or the labor arbiters.

***Time and time again, we have held that the allegations in the complaint determine the nature of
the action and, consequently, the jurisdiction of the courts. After carefully examining the
complaint/position paper of petitioner, we are convinced that the allegations therein are in the nature
of an action based on a quasi delict or tort.

While it is true that labor arbiters and the NLRC have jurisdiction to award not only reliefs provided by
labor laws, but also damages governed by the Civil Code, these reliefs must still be based on an action
that has a reasonable causal connection with the Labor Code, other labor statutes, or collective
bargaining agreements.

In San Miguel Corporation v. NLRC,

The SC held:"It is the character of the principal relief sought that appears essential in this connection.
Where such principal relief is to be granted under labor legislation or a collective bargaining agreement,
the case should fall within the jurisdiction of the Labor Arbiter and the NLRC, even though a claim for
damages might be asserted as an incident to such claim.

AUSTRIA VS NLRC
310 SCRA 293
POINT OF THE CASE
***In labor cases concerning illegal dismissals, the burden of proving that the employee was
dismissed with just cause rests upon the employer. Such is the mandate of Art. 278 of the Labor Code
RULING:

As held in Globe Mackay Cable and Radio Corporation v. NLRC

In the instant case, petitioner has predicated its dismissal of xxxxxx on loss of confidence. As we have
held countless times, while loss of confidence or breach of trust is a valid ground for
termination, it must rest on some basis which must be convincingly established. An employee
may not be dismissed on mere presumptions and supposition xxxxxxxxxxxxx. While we should
not condone the acts of disloyalty of an employee, neither should we dismiss him on the basis
of suspicion derived from speculative inferences.

***Accusation cannot take the place of proof. A suspicion or belief no matter how sincerely felt cannot
be a substitute for factual findings carefully established through an orderly procedure.

Such orderly procedure was denied to petitioner (Austria) by Respondent (PHILSTEEL)

(respondent), as correctly found by the NLRC, thus:
In the instant case, there was at least a partial denial of the complainant's right to due process
because there was no showing:
(1) That he was given the required first written notice;
(2) That he was given sufficient time to answer the charges against him; and,
(3) That he had the chance to obtain the assistance of counsel.

PAL VS NLRC
287 SCRA 672
POINT OF THE CASE

***Jurisdiction of the NLRC in illegal dismissal cases is appellate in nature and, therefore, it cannot
entertain the private respondents' petition for injunction which challenges the dismissal orders of
petitioner.

Article 218(e) of the Labor Code does not provide blanket authority to the NLRC or any of its
divisions to issue writs of injunction, considering that Section 1 of Rule XI of the New Rules of
Procedure of the NLRC makes injunction only an ancillary remedy in ordinary labor disputes."
FACTS:
Private respondents are flight stewards of the petitioner. Both were dismissed from the service for their
alleged involvement in currency smuggling.

Aggrieved by said dismissal, private respondents filed with the NLRC a petition for injunction
to reinstate petitioners to their former positions and enforcing its Decision while this case is pending
adjudication and that the writ of preliminary injunction as to the reliefs sought for be made permanent,
that petitioners be awarded full backwages, moral damages and exemplary damages respectively,
attorney's fees equivalent to ten percent of whatever amount is awarded, and the costs of suit.

NLRC issued a temporary mandatory injunction enjoining petitioner to cease and desist from enforcing
its Memorandum of dismissal. In support of the issuance of the writ of temporary injunction, the NLRC
adapted the view that, among others, the NLRC is empowered under Article 218 (e) of the Labor Code
not only to restrain any actual or threatened commission of any or all prohibited or unlawful acts but
also to require the performance of a particular act in any labor dispute, which, if not restrained or
performed forthwith, may cause grave or irreparable damage to any party.

Petitioner moved for reconsideration arguing that the NLRC erred, among others, 1. . . . In granting a
temporary injunction order when it has no jurisdiction to issue an injunction or restraining order since
this may be issued only under Article 218 of the Labor Code if the case involves or arises from labor
disputes.

NLRC denied petitioner's motion for reconsideration, ruling:

…..that we cannot exercise our injunctive power under Article 218 (e) of the Labor Code on the pretext
that what we have here is not a labor dispute as long as it concedes that as defined by law, a" (l)
"Labor Dispute" includes any controversy or matter concerning terms or conditions of employment." If
security of tenure, which has been breached by respondent and which, precisely, is sought to be
protected by our temporary mandatory injunction (the core of controversy in this case) is not a "term
or condition of employment", what then is?...... Anent respondent's second argument . . . . Article 218
(e) of the Labor Code . . . empowered the Commission not only to issue a prohibitory injunction, but a
mandatory ("to require the performance") one as well.

Hence, the present recourse

ISSUE:
Whether or not NLRC exceeded its jurisdiction when it issued the assailed petition for injunction and
ordered the petitioner to reinstate private respondents.
HELD:
NLRC exceeded its jurisdiction when it issued the assailed Order granting private respondents'
petition for injunction and ordering the petitioner to reinstate private respondents.

The power of the NLRC to issue an injunctive writ originates from "any labor dispute" upon application by
a party thereof, which application if not granted "may cause grave or irreparable damage to any party or
render ineffectual any decision in favor of such party. ( Sec. 1. Injunction in Ordinary Labor Dispute,
Rule XI of the New Rules of Procedure of the NLRC. )

It is an essential requirement that there must first be a labor dispute between the contending parties
before the labor arbiter. In the present case, there is no labor dispute between the petitioner and
private respondents as there has yet been no complaint for illegal dismissal filed with the labor arbiter
by the private respondents against the petitioner.

The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal. This is
clear from the allegations in the petition which prays for; reinstatement of private respondents; award
of full backwages, moral and exemplary damages; and attorney's fees. As such, the petition should have
been filed with the labor arbiter who has the original and exclusive jurisdiction to hear and decide the
following cases involving all workers, whether agricultural or non-agricultural.

On the other hand, the NLRC shall have exclusive appellate jurisdiction over all cases decided by labor
arbiters as provided in Article 217(b) of the Labor Code. In short, the jurisdiction of the NLRC in illegal
dismissal cases is appellate in nature and, therefore, it cannot entertain the private respondents'
petition for injunction which challenges the dismissal orders of petitioner. Article 218(e) of the Labor
Code does not provide blanket authority to the NLRC or any of its divisions to issue writs of
injunction, considering that Section 1 of Rule XI of the New Rules of Procedure of the NLRC
makes injunction only an ancillary remedy in ordinary labor disputes."

PIONEER TEXTURIZINGVS NLRC

280 SCRA 806

POINTS OF THE CASE

***An award for reinstatement shall be immediately executory even pending appeal and the posting
of a bond by the employer shall not stay the execution for reinstatement.
RULING:
In ruling that an order or award for reinstatement does not require a writ of execution the Court is
simply adhering and giving meaning to this rule. Henceforth, ****we rule that an award or order
for reinstatement is self-executory. After receipt of the decision or resolution ordering the
employee's reinstatement, the employer has the right to choose whether to re-admit the employee to
work under the same terms and conditions prevailing prior to his dismissal or to reinstate the employee
in the payroll. In either instance, the employer has to inform the employee of his choice.

Art. 223. Appeal. . . .

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, in so far
as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal……
The posting of a bond by the employer shall not stay the execution for reinstatement provided herein.

Art. 224. Execution of decisions, orders, or awards.

—
(a) The Secretary of Labor and Employment or any Regional Director, the Commission or any Labor
Arbiter, or med-arbiter or voluntary arbitrator may, motu propio or on motion of any interested party,
issue a writ of execution on a judgment within five (5) years from the date it becomes final and
executory……

Article 224 states that the need for a writ of execution applies only within five (5) years from the date a
decision, an order or award becomes final and executory. It can not relate to an award or order of
reinstatement still to be appealed or pending appeal which Article 223 contemplates. The provision of
Article 223 is clear that an award for reinstatement shall be immediately executory even pending
appeal and the posting of a bond by the employer shall not stay the execution for reinstatement.

GARCIA VS PAL (EN BANC)

576 SCRA 479
POINT OF THE CASE
***The Court reaffirms the prevailing principle that even if the order of reinstatement of the
Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate
and pay the wages of the dismissed employee during the period of appeal until reversal by
the higher court.
RULING:

It settles the view that the Labor Arbiter's order of reinstatement is immediately executory and the
employer has to either re-admit them to work under the same terms and conditions prevailing prior to
their dismissal, or to reinstate them in the payroll, and that failing to exercise the options in the
alternative, employer must pay the employee’s salaries.

The spirit of the rule on reinstatement pending appeal animates the proceedings once the Labor
Arbiter issues the decision containing an order of reinstatement. The immediacy of its execution needs
no further elaboration. Reinstatement pending appeal necessitates its immediate execution during the
pendency of the appeal, if the law is to serve its noble purpose. At the same time, any attempt on the
part of the employer to evade or delay its execution, as observed in previous cases, should not be
countenanced.

The new NLRC Rules of Procedure, which took effect on January 7, 2006, now require the employer to
submit are port of compliance within 10 calendar days from receipt of the Labor Arbiter’s decision,
disobedience to which clearly denotes a refusal to reinstate. The employee need not file a motion for
the issuance of the writ of execution since the Labor Arbiter shall there after motu proprio issue the
writ. With the new rules in place, there is hardly any difficulty in determining the employer’s
intransigence in immediately complying with the order.

ARIS (PH IL.) IN C. VS NLRC

200 SCRA 246
POINT OF THE CASE

***Execution pending appeal of the reinstatement aspect of a decision by the Labor

Arbiter reinstating a dismissed or separated employee is recognized.

RULING:
Execution pending appeal is interlinked with the right to appeal. One cannot be divorced from the other.
The latter may be availed of by the losing party or a party who is not satisfied with a judgment, while the
former may be applied for by the prevailing party during the pendency of the appeal. The right to
appeal, however, is not a constitutional, natural or inherent right. It is a statutory privilege of statutory
origin and, therefore, available only if granted or provided by statute. The law may then validly provide
limitations or qualifications thereto or relief to the prevailing party in the event an appeal is interposed
by the losing party. Execution pending appeal is one such relief long recognized in this
jurisdiction. The Revised Rules of Court allows execution pending appeal and the grant thereof is left to
the discretion of the court upon good reasons to be stated in a special order.
Before its amendment by Section 12 of R.A. No. 6715, Article 223 of the Labor Code already allowed
execution of decisions of the NLRC pending their appeal to the Secretary of Labor and Employment.

In authorizing execution pending appeal of the reinstatement aspect of a decision of the Labor
Arbiter reinstating a dismissed or separated employee, the law itself has laid down a compassionate
policy which, once more, vivifies and enhances the provisions of the 1987 Constitution on labor and the
working-man.

If in ordinary civil actions execution of judgment pending appeal is authorized for reasons the
determination of which is merely left to the discretion of the judge, we find no plausible reason to
withhold it in cases of decisions reinstating dismissed or separated employees. In such cases, the poor
employees had been deprived of their only source of livelihood; their only means of support for their
family their very lifeblood. To us, this special circumstance is far better than any other which a judge, in
his sound discretion, may determine. In short, with respect to decisions reinstating employees, the law
itself has determined a sufficiently overwhelming reason for its execution pending appeal.

ST. MARTIN FUNERAL HOMES VS NLRC

295 SCRA 494

POINT OF THE CASE

***Appeals from the NLRC to the Supreme Court are interpreted and hereby declared to mean
and refer to petitions for certiorari; all such petitions should be initially filed in the Court of
Appeals in strict observance of the doctrine on the hierarchy of courts.

RULING:
While we do not wish to intrude into the Congressional sphere on the matter of the wisdom of a law, on
this score we add the further observations that there is a growing number of labor cases being elevated
to this Court which, not being a trier of fact, has at times been constrained to remand the case to the
NLRC for resolution of unclear or ambiguous factual findings; that the Court of Appeals is procedurally
equipped for that purpose, aside from the increased number of its component divisions; and that there
is undeniably an imperative need for expeditious action on labor cases as a major aspect of
constitutional protection to labor.

Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed appeals from
the NLRC to the Supreme Court are interpreted and hereby declared to mean and refer to
petitions for certiorari under Rule 65. Consequently, all such petitions should hence forth be
initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of
courts as the appropriate forum for the relief desired.

Apropos to this directive that resort to the higher courts should be made in accordance with their
hierarchical order.

EMCO PLYWOOD VS ABELGAS

427 SCRA 496

POINT OF THE CASE

***Not every loss incurred or expected to be incurred by a company will justify retrenchment. The
losses must be substantial and the retrenchment must be reasonably necessary to avert such losses."

The employer bears the burden of proving the existence or the imminence of substantial losses with
clear and satisfactory evidence that there are legitimate business reasons justifying a retrenchment.
Should the employer fail to do so, the dismissal shall be deemed unjustified.

RULING:

Retrenchment is one of the authorized causes for the dismissal of employees. Resorted to by
employers to avoid or minimize business losses, it is recognized under Article 283 of the Labor Code.
The "loss" referred to in this provision cannot be of just any kind or amount; otherwise, a company
could easily feign excuses to suit its whims and prejudices or to rid itself of unwanted employees.
Retrenchment is only "a measure of last resort when other less drastic means have been tried and
found to be inadequate.

Retrenchment is a management prerogative consistently recognized and affirmed by the SC.

It is, however, subject to faithful compliance with the substantive and the procedural requirements laid
down by law and jurisprudence. It must be exercised essentially as a measure of last resort, after less
drastic means have been tried and found wanting
 BANTOLINO VS COCA-COLA BOTTLERS
403 SCRA 699

POINT OF THE CASE

***Under the Rules of the Commission, the Labor Arbiter is given the discretion to determine the
necessity of a formal trial or hearing. Hence, trial-type hearings are not even required as the cases
may be decided based on verified position papers, with supporting documents and their affidavits

FACTS:

Petitioners argue that the Court of Appeals should not have given weight to respondent's claim of
failure to cross-examine them. They insist that, unlike regular courts, labor cases are decided based
merely on the parties' position papers and affidavits in support of their allegations and subsequent
pleadings that may be filed thereto. As such, according to petitioners, the Rules of Court should not be
strictly applied in this case specifically by putting them on the witness stand to be cross-examined
because the NLRC has its own rules of procedure which were applied by the Labor Arbiter in coming up
with a decision in their favor.

In its disavowal of liability, respondent commented that since the other alleged affiants were not
presented in court to affirm their statements, much less to be cross-examined, their affidavits should,
as the Court of Appeals rightly held, be stricken off the records for being self-serving, hearsay and
inadmissible in evidence.

ISSUE:
Whether or not there is credence to the propriety of giving evidentiary value to the affidavits despite
the failure of the affiants to affirm their contents and undergo the test of cross-examination.

HELD:
The petition is impressed with merit. The issue confronting the Court is not without precedent in
jurisprudence. The oft-cited case of Rabago v. NLRC squarely grapples a similar challenge involving the
propriety of the use of affidavits without the presentation of affiants for cross-examination. In that case,
we held that "the argument that the affidavit is hearsay because the affiants were not presented for
cross-examination is not persuasive because the rules of evidence are not strictly observed in
proceedings before administrative bodies like the NLRC where decisions may be reached on the basis
of position papers only.
Southern Cotabato Dev. and Construction Co. v. NLRC succinctly states that under Art. 221 of the Labor
Code, the rules of evidence prevailing in courts of law do not control proceedings before the Labor
Arbiter and the NLRC. Further, it notes that the Labor Arbiter and the NLRC are authorized to adopt
reasonable means to ascertain the facts in each case speedily and objectively and without regard to
technicalities of law and procedure, all in the interest of due process. We find no compelling reason to
deviate therefrom.

***To reiterate, administrative bodies like the NLRC are not bound by the technical niceties of law and
procedure and the rules obtaining in courts of law. Under the Rules of the Commission, the Labor
Arbiter is given the discretion to determine the necessity of a formal trial or hearing. Hence, trial-type
hearings are not even required as the cases may be decided based on verified position papers, with
supporting documents and their affidavits

PIDI VS NLRC
210 SCRA 339

POINT OF THE CASE

***Managerial employees and confidential employees are precluded to join or form union
with the rank and file employees.

If Managerial employees would belong to or be affiliated with a Union, the latter might not be
assured of their loyalty, to the Union in view of evident conflict of interests. The Union can also
become company-dominated with the presence of managerial employees in Union membership, and
confidential employees such as accounting personnel, radio and telegraph operators, who having
access to confidential information, may become the source of undue advantage. Said employee(s) may
act as a spy or, spies of either party to a collective bargaining agreement.

RULING:
On the main issue raised before Us, it is quite obvious that respondent NLRC committed grave abuse of
discretion in reversing the decision of the Executive Labor Arbiter and in decreeing that PIDI's "Service
Engineers, Sales Force, division secretaries, all Staff of General Management, Personnel and Industrial
Relations Department, Secretaries of Audit, EDP and Financial Systems are included within the rank and
file bargaining unit."

In the first place, all these employees, with the exception of the service engineers and the sales force
personnel, are confidential employees. Their classification as such is not seriously disputed by PEO-FFW;
the five (5) previous CBAs between PIDI and PEO-FFW explicitly considered them as confidential
employees. By the very nature of their functions, they assist and act in a confidential capacity to, or have
access to confidential matters of, persons who exercise managerial functions in the field of labor
relations.

As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor
union equally applies to them.

In Bulletin Publishing Co., Inc. vs. Hon Augusto Sanchez, the Supreme Court elaborated on this
rationale, thus:. . . The rationale for this inhibition has been stated to be, because if these managerial
employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty,
to the Union in view of evident conflict of interests. The Union can also become company-dominated
with the presence of managerial employees in Union membership

In Golden Farms, Inc. vs. Ferrer-Calleja, the Supreme Court explicitly made this rationale applicable to
confidential employees:

This rationale holds true also for confidential employees such as accounting personnel, radio and
telegraph operators, who having access to confidential information, may become the source of undue
advantage. Said employee(s) may act as a spy or, spies of either party to a collective bargaining
agreement. This is especially true in the present case where the petitioning Union is already the
bargaining agent of the rank-and-file employees in the establishment. To allow the confidential
employees to join the existing Union of the rank-and-file would be in violation of the terms of the
Collective Bargaining Agreement wherein this kind of employees by the nature of their functions/
positions are expressly excluded.

NAFTU VS MALDE COU-ULGWP

192 SCRA 598

POINT OF THE CASE

***The test of grouping is community or mutuality of interests. This is so because "the basic test of an
asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which
will best assure to all employees the exercise of their collective bargaining rights."

Certainly, there is a mutuality of interest among the employees of the Sawmill Division and the Logging
Division. Their functions mesh with one another. One group needs the other in the same way that the
company needs them both. There may be difference as to the nature of their individual assignments
but the distinctions are not enough to warrant the formation of a separate bargaining unit.
RULING:
In the case at bar, petitioner alleges that the employer MALDECO was composed of two bargaining
units, the Sawmill Division in Butuan City and the Logging Division, in Zapanta Valley, Kitcharao, Agusan
Norte, about 80 kilometers distant from each other and in fact, had then two separate CBA's, one for
the Sawmill Division and another for the Logging Division, both the petition and decision referred only to
one bargaining unit; that from 1979 to 1985, the Ministry of Labor and Employment recognized the
existence of two (2) separate bargaining units at MALDECO, one for its Logging Division and another for
its Sawmill Division. Significantly, out of two hundred and one (201) employees of MALDECO, one
hundred seventy five (175) consented and supported the petition for certification election, thereby
confirming their desire for one bargaining representative (Rollo, p. 104).:-nad Moreover, while the
existence of a bargaining history is a factor that may be reckoned with in determining the appropriate
bargaining unit, the same is not decisive or conclusive. Other factors must be considered. The test of
grouping is community or mutuality of interests. This is so because "the basic test of an asserted
bargaining unit's acceptability is whether or not it is fundamentally the combination which will best
assure to all employees the exercise of their collective bargaining rights." (Democratic Labor Association
v. Cebu Stevedoring Company, Inc., et al., 103 Phil. 1103 [1958]).

Certainly, there is a mutuality of interest among the employees of the Sawmill Division and the Logging
Division. Their functions mesh with one another. One group needs the other in the same way that the
company needs them both. There may be difference as to the nature of their individual assignments but
the distinctions are not enough to warrant the formation of a separate bargaining unit.

COOPERATIVE RURAL BANK OF DAVAO CITY VS CALLEJA

165 SCRA 725

POINT OF THE CASE

***Employees of cooperatives who are themselves members of the cooperative have no right to form
or join labor organizations for purposes of collective bargaining for being themselves co-owners of the
cooperative.

FACTS:
Petitioner Cooperative Rural Bank, Inc. is a cooperative banking corporation operating. It is owned in
part by the Government and its employees are members and co-owners of the same. The petitioner
has around 16 rank-and-file employees where there was no existing collective bargaining agreement
between the said employees and the establishment.
Private respondent Federation of Free Workers is a labor organization registered with the Department
of Labor and Employment. It is interested in representing the said employees for purposes of collective
bargaining. Thus, respondent filed with the then Ministry of Labor and Employment a verified Petition
for certification election among the rank-and-file employees of the petitioner.

The petitioner argues therein that, among others, a cooperative is not covered by the Rules governing
certification elections inasmuch as it is not an institution operating for profit. The petitioner also adds
that two of the alleged rank-and-file employees seeking the certification election are managerial
employees disqualified from joining concerted labor activities. In sum, the petitioner insists that its
employees are disqualified from forming labor organizations for purposes of collective bargaining.

ISSUE:

Whether or not, members and employees of cooperation are disqualified from forming a labor
organization for the purpose of collective bargaining.

HELD:

A cooperative, by its nature is different from an ordinary business concern, being run either by persons,
partnerships, or corporations. Its owners and/or members are the ones who run and operate the
business while the others are its employees.

An employee therefore of such a cooperative who is a member and co-owner thereof cannot invoke
the right to collective bargaining for certainly an owner cannot bargain with himself or his co-owners.
Employees of cooperatives who are themselves members of the cooperative have no right to form or
join labor organizations for purposes of collective bargaining for being themselves co-owners of the
cooperative. However, in so far as it involves cooperatives with employees who are not
members or co-owners thereof, certainly such employees are entitled to exercise the rights of
all workers to organization, collective bargaining, negotiations and others as are enshrined in
the Constitution and existing laws of the country.

CENECO VS SEC. OF LABOR

201 SCRA 584

POINT OF THE CASE

***Employees who withdrew their membership from the cooperative are entitled to form or join for
purposes of the negotiations for a collective bargaining agreement.

RULING:
The right of the employees to self-organization is a compelling reason why their withdrawal from the
cooperative must be allowed. As pointed, the resignation of the member-employees is an expression of
their preference for union membership over that of membership in the cooperative. The avowed
policy of the State to afford full protection to labor and to promote the primacy of free
collective bargaining mandates that the employees' right to form and join unions for
purposes of collective bargaining be accorded the highest consideration. Membership in an
electric cooperative which merely vests in the member a right to vote during the annual meeting
becomes too trivial and insubstantial vis-a-vis the primordial and more important constitutional right of
an employee to join a union of his choice.

MERALCO VS SEC. OF LABOR

197 SCRA 275

POINT OF THE CASE

***Security guards may now freely join a labor organization of the rank and file or that of the
supervisory union, depending on their rank.

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

We are aware however of possible consequences in the implementation of the law in allowing security
personnel to join labor unions within the company they serve. The law is apt to produce divided loyalties
in the faithful performance of their duties. Economic reasons would present the employees concerned
with the temptation to subordinate their duties to the allegiance they owe the union of which they are
members, aware as they are that it is usually union action that obtains for them increased pecuniary
benefits.
Thus, in the event of a strike declared by their union, security personnel may neglect or out rightly
abandon their duties, such as protection of property of their employer and the persons of its officials
and employees, the control of access to the employer's premises, and the maintenance of order in the
event of emergencies and untoward incidents.

It is hoped that the corresponding amendatory and/or suppletory laws be passed by Congress to avoid
possible conflict of interest in security personnel.

Comparison of ART 245 of the Labor Code:

OLD RULE: Art. 245. Ineligibility of security personnel to join any labor organization.—
Security guards and other personnel employed for the protection and security of the person, properties
and premises of the employer shall not be eligible for membership in any labor organization.

On December 24, 1986, Pres. Corazon C. Aquino issued E.O. No. 111 which eliminated the above-cited
provision on the disqualification of security guards. What was retained was the disqualification of
managerial employees, renumbered as Art.245 (previously Art. 246), as follows:

Art. 245. Ineligibility of managerial employees to joint any labor organization.—

Managerial employees are not eligible to join, assist or form any labor organization.

***With the elimination, security guards were thus free to join a rank and file organization.

On March 2, 1989, the present Congress passed RA 6715.Section 18 thereof amended Art. 245, to read
as follows:

Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory
employees.—
Managerial employees are not eligible to join, assist or form any labor organization. Supervisory
employees shall not be eligible for membership in a labor organization of the rank-and-file employees
but may join, assist, or form separate labor organizations of their own. (Emphasis ours)

As will be noted, the second sentence of Art. 245 embodies an amendment disqualifying supervisory
employees from membership in a labor organization of the rank-and-file employees. It does not include
security guards in the disqualification.

COLGATE-PALMOLIVE VS OPLE
G.R. No. 73681

POINT OF THE CASE

***Direct certification of a Union, as the exclusive collective bargaining agent for the company by the
Labor Minister, constitute to excess of authority.

The requirements under the law, specifically Secs. 2, 5, and 6 of Rule V, Book V, of the Rules
Implementing the Labor Code are all calculated to ensure that the certified bargaining representative is
the true choice of the employees against all contenders.

The Constitutional mandate that the State shall "assure the rights of the workers to self-organization,
collective bargaining, security of tenure and just and humane conditions of work," should be achieved
under a system of law such as the aforementioned provisions of the pertinent statutes. When an
overzealous official by-passes the law on the pretext of retaining a laudable objective, the intendment
or purpose of the law will lose its meaning as the law itself is disregarded. When respondent Minister
directly certified the Union, he in fact disregarded this procedure and its legal requirements. There was
therefore failure to determine with legal certainty whether the Union indeed enjoyed majority
representation.