G.R. No.

132916 November 16, 2001

RUFINA TANCINCO, petitioner, vs. GOVERNMENT SERVICE INSURANCE SYSTEM and EMPLOYEES
COMPENSATION COMMISSION, respondents.

FACTS
While he was repairing a service vehicle in front of his house along the National Road in Barangay Palanas,
Lemery, Batangas, SPO1 Tancinco was shot dead by (5) unidentified armed men. SPO1 Tancinco was a
member of the NCR Security Protection Group of the Philippine National Police, and at the time of his
death, was assigned as part of the close-in security detail of then Vice-President Joseph E. Estrada. SPO1
Tancinco was off-duty at the time inasmuch as the former Vice-President was in the United States for
medical treatment.
His widow, petitioner Rufina Tancinco, filed a claim for benefits before the GSIS but was denied on the
ground that there was no proof that petitioner's husband's death was work-related. Petitioner appealed
the denial to the Employees' Compensation Commission which, dismissing the appeal for lack of merit.

Petitioner filed a petition for review from the aforesaid decision of the Commission before the Court of
Appeals which also dismissed the same.

ISSUE

RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION OR A REVERSIBLE ERROR

IN NOT ENTERTAINING THE PETITION FILED BY PETITIONER WHICH SUBSTANTIALLY COMPLIED WITH THE
RULES AND WAS ON ITS FACE MERITORIOUS.

RULING
WE DENY. The conclusion is inevitable because the instant petition was not timely filed. Under section 1
of Rule 45 of the former Revised Rules of Court, which was then still in effect, an appeal from a decision
rendered by the Court of Appeals to this Court must be made within (15) days from notice of the judgment
or the denial of a motion for reconsideration filed in due time. In the case at bar, petitioner filed her
motion for reconsideration from receipt of the resolution of dismissal two hundred thirty one (231) days
late, thereby rendering the said resolution final and executory. The gap of more than seven (7) months is
too large for us to ignore.

Prescinding from the finality of the appealed resolutions, the appeal will still fail on the merits. Rule III of
the Amended Rules on Employees Compensation provides:
SECTION 1. Grounds—(a) For the injury and the resulting disability or death to be compensable,
the injury must be the result of an employment accident satisfying all of the following conditions:
(1) The employee must have been injured at the place where his work requires him to be;
(2) The employee must have been performing his official functions; and
(3) If the injury is sustained elsewhere, the employee must have been executing an order for the
employer.
xxx xxx xxx
The aforesaid requirements have not been met. Anent the first, as part of the former Vice-President's
security detail, the decedent was required to guard the person of the former; hence, his presence was
officially required wherever the Vice-President would go. At the time of his death, SPO1 Tancinco was off-
duty since Vice-President Estrada was out of the country. In fact, he was at home; it is not even known if
he was temporarily re-assigned to another detail while the Vice-President was away. Clearly, he was not
at the place where his work required him to be.
As to the second requirement, it was not sufficiently established that SPO1 Tancinco died while
performing his official functions. In this regard, we held that policemen are regarded as being on twenty-
four (24) hour alert.

We hold that by analogy and for purposes of granting compensation under P.D. No. 626, as amended,
policemen should be treated in the same manner as soldiers. The twenty-four hour duty rule was originally
applied to members of the armed forces, until it was applied by extension to policemen, as aforesaid, and
eventually to firemen. However, in the more recent case of Government Service Insurance System v.
Court of Appeals, we clarified that not all deaths of policemen are compensable. Thus,
Taking together jurisprudence and the pertinent guidelines of the ECC with respect to claims for
death benefits, namely: (a) that the employee must be at the place where his work requires him
to be; (b) that the employee must have been performing his official functions; and (c) that if the
injury is sustained elsewhere, the employee must have been executing an order for the employer,
That he may be called upon at any time to render police work as he is considered to be on a round-
the-clock duty and was not on an approved vacation leave will not change the conclusion arrived
at considering that he was not placed in a situation where he was required to exercise his authority
and duty as a policeman. In fact, he was refusing to render one pointing out that he already
complied with the duty detail. At any rate, the 24-hour duty doctrine, as applied to policemen and
soldiers, serves more as an after-the-fact validation of their acts to place them within the scope of
the guidelines rather than a blanket license to benefit them in all situations that may give rise to
their deaths. In other words, the 24-hour duty doctrine should not be sweepingly applied to all acts
and circumstances causing the death of a police officer but only to those which, although not on
official line of duty, are nonetheless basically police service in character.

In the present case, the decedent was repairing a service vehicle when he was killed. We have tried to
view it from all possible angles, but the inescapable conclusion is that he was not performing acts that are
"basically police service in character." As a policeman, SPO1 Tancinco is part of "an organized civil force
for maintaining order, preventing and detecting crimes, and enforcing the laws". Based on these
parameters, it cannot be said that the deceased was discharging official functions; if anything, repairing a
service vehicle is only incidental to his job.

Neither was the last requirement satisfied. As the fatal incident occurred when SPO1 Tancinco was at
home, it was incumbent on petitioner to show that her husband was discharging a task pursuant to an
order issued by his superiors. This also was not done.

In administrative proceedings, the quantum of proof necessary to support a claim is substantial evidence,
which is that "amount of relevant evidence which a reasonable mind might accept as adequate to justify
a conclusion." Unfortunately, the burden was not successfully met.
In closing, we express our heartfelt commiseration with petitioner for the misfortune which has befallen
her and her family. Even this Court, the embodiment of justice dispensed impartially, can feel very human
emotions, as it does so now. However, for reasons both procedural and substantive, we cannot grant her
petition.
G.R. No. 140374 November 27, 2002
JANE C. ABALOS, BERNARDO A. BAMBICO, MANUEL G. MALAG, WILFREDO R. SOTELO, PERCIVAL B.
AGRITO, RICHARD M. BALAN-EG, and EDGARDO S. NILLO petitioners, vs. PHILEX MINING
CORPORATION, respondent.

FACTS
A manpower audit conducted by respondent Philex, for brevity, revealed that 241 of its employees were
redundant. Thus, Philex undertook a retrenchment program that resulted in the termination of
petitioners’ employment. Consequently, petitioners filed a case for illegal dismissal against respondent.
The case was submitted for arbitration through a submission agreement coursed through the NCMB
Baguio.
VA ordered to reinstate the Complainants and Intervenors to their former positions with back wages
without loss of seniority and privileges.MPhilex appealed to this Court and the case was remanded to the
Court of Appeals.
CA: while there was indeed a valid reason for retrenchment, the means employed were disadvantageous,
thus inequitable, to the affected workers. The fact that these workers signed quitclaims and received their
separation pay would not estop them from seeking reinstatement.
Philex elevated the case to the Supreme Court via a petition for review on certiorari, which we denied in
a resolution.

Philex offered separation pay to petitioners, in lieu of reinstatement, as the positions no longer existed
and that there arose strained relations between the parties that effectively barred reinstatement.

VA granted Philex’s motion. Petitioners filed a petition for certiorari with the Court of Appeals but it
affirmed the order of Arbitrator.

ISSUE
THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN AFFIRMING THE DECEMBER 11, 1998 ORDER
OF VOLUNTARY ARBITRATOR JUAN B. VALDEZ ALTERING AND MODIFYING HIS MARCH 5, 1994 DECISION
WHICH HAD ALREADY BECOME FINAL AND EXECUTORY ON APRIL 27, 1998.

RULING
A basic tenet in our rules of procedure is that an award that is final and executory cannot be amended or
modified anymore. Nothing is more settled in law than that once a judgment attains finality it thereby
becomes immutable and unalterable. It may no longer be modified in any respect, even if the modification
is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of
whether the modification is attempted to be made by the court rendering it or by the highest court of the
land.
However, this rule is subject to exceptions as stated in the case of David vs. CA, 316 SCRA 710 (1999),
cited by respondent:
One exception is that where facts and/or events transpire after a decision has become executory,
which facts and/or events present a supervening cause or reason which renders the final and
executory decision no longer enforceable. Under the law, the court may modify or alter a judgment
even after the same has become executory whenever circumstances transpire rendering its
execution unjust and inequitable, as where certain facts and circumstances justifying or requiring
such modification or alteration transpired after the judgment has become final and executory.
In David, we held also that "where an execution order [which] has been issued is still pending, all
proceedings on the execution are still proceedings in the suit." As such, modification of the execution of
such judgment is allowed.
In Torres vs. National Labor Relations Commission, 330 SCRA 311 (2000), this Court ruled that:
Execution is the final stage of litigation, the end of the suit. A writ of execution may however be refused
on equitable grounds as when there was a change in the situation of the parties that would make
execution inequitable or when certain circumstances, which transpired after judgment became final,
rendered execution of judgment unjust. The fact that the decision has become final does not preclude a
modification or an alteration thereof because even with the finality of judgment, when its execution
becomes impossible or unjust, it may be modified or altered to harmonize the same with justice and the
facts.

Therefore, we are in agreement with the appellate court that a voluntary arbitrator has jurisdiction to
amend the mode of executing an award if and when the case merits such amendment.
However, we find respondent’s reliance on the doctrine of "strained relations" misplaced. Said doctrine
is inapplicable to a situation where the employee has no say in the operation of the employer’s business.
Petitioners herein are part of the rank-and-file workforce; they are cooks, miners, helpers and mechanics
of the respondent.

Considering the circumstances in the present case, we find that the only issue to be resolved is whether
the supervening events are grave enough to warrant a modification in the execution of the judgment.
Both the voluntary arbitrator and the Court of Appeals found that reinstatement is no longer possible due
to the fact that respondent has been continuously suffering business losses and reducing the number of
its employees pending litigation, and so the positions held by petitioners were abolished as a cost-cutting
measure.

Regrettably, petitioners now raise questions the determination of which would require the Court to look
into the evidence adduced by the parties. This cannot be done in a petition for review on certiorari. It is
outside its purview under Rule 45 of the 1997 Rules of Court. Factual findings of labor officials who are
deemed to have acquired expertise in matters within their respective jurisdiction are generally accorded
not only respect but even finality, and bind us when supported by substantial evidence. It is not our
function to assess and evaluate the evidence all over again, particularly where the findings of both the
arbitrator and the Court of Appeals coincide. Thus, in this case, absent a showing of an error of law
committed by the court below, or of whimsical or capricious exercise of its judgment, or a demonstrable
lack of basis for its conclusions, we may not disturb its factual findings, much less reverse its judgment
outright.
G.R. No. 78909 June 30, 1989
MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO, President, petitioner, vs. THE
HONORABLE SECRETARY OF LABOR AND THE REGIONAL DlRECTOR OF LABOR, REGION X, respondents.

FACTS
Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de Oro
Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as holdover President. The
hospital derives its finances from the club itself as well as from paying patients, averaging 130 per month.
It is also partly subsidized by the PCSO and CDO City Govt. Petitioner has 41 employees. Aside from salary
and living allowances, the employees are given food, but the amount spent therefor is deducted from
their respective salaries.
10 employees of the petitioner employed in different capacities/positions filed a complaint with the RD-
DOLE, for underpayment of their salaries and ECOLAS, prompting 2 of his Labor Standard and Welfare
Officers to inspect the records of the petitioner to ascertain the truth of the allegations in the complaints.
LSW Officers submitted their report confirming that there was underpayment of wages and ECOLAs of all
the employees by the petitioner prompting the Regional Director issued an Order directing the payment
of P723,888.58, representing underpayment of wages and ECOLAs to all the petitioner's employees.

MOLE modified in that deficiency wages and ECOLAs should be computed only from May 23, 1983 to May
23, 1986.

ISSUE
1. WON the Regional Director had jurisdiction over the case and if so, the extent of coverage of any award
that should be forthcoming, arising from his visitorial and enforcement powers under Article 128 of the
Labor Code. YES.
2. WON the Regional Director erred in extending the award to all hospital employees. YES.

RULING
This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amended by E.O. No.
111. Labor standards refer to the minimum requirements prescribed by existing laws, rules, and
regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare
benefits, including occupational, safety, and health standards. Under the present rules, a Regional
Director exercises both visitorial and enforcement power over labor standards cases, and is therefore
empowered to adjudicate money claims, provided there still exists an employer-employee relationship,
and the findings of the regional office is not contested by the employer concerned.
Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional Director's authority over
money claims was unclear. The complaint in the present case was filed on May 23, 1986 when E.O. No.
111 was not yet in effect, and the prevailing view was that stated in the case of Ong, Sr. vs. Henry M. Parel,
, dated December 21, 1987, thus:
. . . the Regional Director, in the exercise of his visitorial and enforcement powers under Article 128
of the Labor Code, has no authority to award money claims, properly falling within the jurisdiction
of the labor arbiter. . . .
. . . If the inspection results in a finding that the employer has violated certain labor standard laws,
then the regional director must order the necessary rectifications. However, this does not include
adjudication of money claims, clearly within the ambit of the labor arbiter's authority under Article
217 of the Code.
Regional Director was not empowered to share in the original and exclusive jurisdiction conferred on
Labor Arbiters by Article 217.
We believe, however, that even in the absence of E. O. No. 111, Regional Directors already had
enforcement powers over money claims, effective under P.D. No. 850, issued on December 16, 1975,
which transferred labor standards cases from the arbitration system to the enforcement system.

Prior to the promulgation of PD 850, labor standards cases were an exclusive function of labor arbiters,
under Article 216 of the then Labor Code (PD No. 442, as amended by PD 570-a), which read in part:
Art. 216. Jurisdiction of the Commission. — The Commission shall have exclusive appellate jurisdiction over
all cases decided by the Labor Arbiters and compulsory arbitrators.
The Labor Arbiters shall have exclusive jurisdiction to hear and decide the following cases involving all
workers whether agricultural or non-agricultural.
xxx xxx xxx
(c) All money claims of workers, involving non-payment or underpayment of wages, overtime compensation,
separation pay, maternity leave and other money claims arising from employee-employer relations, except
claims for workmen's compensation, social security and medicare benefits;
(d) Violations of labor standard laws;
xxx xxx xxx
(Emphasis supplied)
The Regional Director exercised visitorial rights only under then Article 127 of the Code as follows:
ART. 127. Visitorial Powers. — The Secretary of Labor or his duly authorized representatives, including, but
not restricted, to the labor inspectorate, shall have access to employers' records and premises at any time
of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question
any employee and investigate any fact, condition or matter which may be necessary to determine violations
or in aid in the enforcement of this Title and of any Wage Order or regulation issued pursuant to this Code.

With the promulgation of PD 850, Regional Directors were given enforcement powers, in addition to
visitorial powers. Article 127, as amended, provided in part:
SEC. 10. Article 127 of the Code is hereby amended to read as follows:
Art. 127. Visitorial and enforcement powers. —
xxx xxx xxx
(b) The Secretary of Labor or his duly authorized representatives shall have the power to order and
administer, after due notice and hearing, compliance with the labor standards provisions of this Code based
on the findings of labor regulation officers or industrial safety engineers made in the course of inspection,
and to issue writs of execution to the appropriate authority for the enforcement of their order.
xxx xxx xxx
Labor Arbiters, on the other hand, lost jurisdiction over labor standards cases. Article 216, as then amended
by PD 850, provided in part:
SEC. 22. Article 216 of the Code is hereby amended to read as follows:
Art. 216. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters shall have exclusive
jurisdiction to hear and decide the following cases involving all workers, whether agricultural or non-
agricultural:
xxx xxx xxx
(3) All money claims of workers involving non-payment or underpayment of wages, overtime or premium
compensation, maternity or service incentive leave, separation pay and other money claims arising from
employer-employee relations, except claims for employee's compensation, social security and medicare
benefits and as otherwise provided in Article 127 of this Code.
xxx xxx xxx
(Emphasis supplied)
Under the then Labor Code therefore (PD 442 as amended by PD 570-a, as further amended by PD 850),
there were three adjudicatory units: The Regional Director, the Bureau of Labor Relations and the Labor
Arbiter. It became necessary to clarify and consolidate all governing provisions on jurisdiction into one
document. 2 On April 23, 1976, MOLE Policy Instructions No. 6 was issued,
MOLE Policy Instructions No. 7 (undated) was likewise subsequently issued, enunciating the rationale for,
and the scope of, the enforcement power of the Regional Director, the first and second paragraphs of
which provide as follows:
POLICY INSTRUCTIONS NO. 7
TO: All Regional Directors
SUBJECT: LABOR STANDARDS CASES
Under PD 850, labor standards cases have been taken from the arbitration system and placed under the
enforcement system, except where a) questions of law are involved as determined by the Regional Director,
b) the amount involved exceeds P100,000.00 or over 40% of the equity of the employer, whichever is lower,
c) the case requires evidentiary matters not disclosed or verified in the normal course of inspection, or d)
there is no more employer-employee relationship.
The purpose is clear: to assure the worker the rights and benefits due to him under labor standards laws
without having to go through arbitration. The worker need not litigate to get what legally belongs to him.
The whole enforcement machinery of the Department of Labor exists to insure its expeditious delivery to
him free of charge. (Emphasis supplied)

Under the foregoing, a complaining employee who was denied his rights and benefits due him under
labor standards law need not litigate. The Regional Director, by virtue of his enforcement power,
assured "expeditious delivery to him of his rights and benefits free of charge", provided of course, he
was still in the employ of the firm.

After PD 850, Article 216 underwent a series of amendments (aside from being re-numbered as Article
217) and with it a corresponding change in the jurisdiction of, and supervision over, the Labor Arbiters:
1. PD 1367 (5-1-78) — gave Labor Arbiters exclusive jurisdiction over unresolved issues in collective
bargaining, etc., and those cases arising from employer-employee relations duly indorsed by the Regional
Directors. (It also removed his jurisdiction over moral or other damages) In other words, the Labor Arbiter
entertained cases certified to him. (Article 228, 1978 Labor Code.)
2. PD 1391 (5-29-78) — all regional units of the National Labor Relations Commission (NLRC) were
integrated into the Regional Offices Proper of the Ministry of Labor; effectively transferring direct
administrative control and supervision over the Arbitration Branch to the Director of the Regional Office
of the Ministry of Labor. "Conciliable cases" which were thus previously under the jurisdiction of the defunct
Conciliation Section of the Regional Office for purposes of conciliation or amicable settlement, became
immediately assignable to the Arbitration Branch for joint conciliation and compulsory arbitration. In
addition, the Labor Arbiter had jurisdiction even over termination and labor-standards cases that may be
assigned to them for compulsory arbitration by the Director of the Regional Office. PD 1391 merged
conciliation and compulsory arbitration functions in the person of the Labor Arbiter. The procedure
governing the disposition of cases at the Arbitration Branch paralleled those in the Special Task Force and
Field Services Division, with one major exception: the Labor Arbiter exercised full and untrammelled
authority in the disposition of the case, particularly in the substantive aspect, his decisions and orders
subject to review only on appeal to the NLRC. 3
3. MOLE Policy Instructions No. 37 — Because of the seemingly overlapping functions as a result of PD 1391,
MOLE Policy Instructions No. 37 was issued on October 7, 1978, and provided in part:

Pursuant to the provisions of Presidential Decree No. 1391 and to insure speedy disposition of labor cases,
the following guidelines are hereby established for the information and guidance of all concerned.
1. Conciliable Cases.
Cases which are conciliable per se i.e., (a) labor standards cases where employer-employee relationship
no longer exists; (b) cases involving deadlock in collective bargaining, except those falling under P.D. 823,
as amended; (c) unfair labor practice cases; and (d) overseas employment cases, except those involving
 overseas seamen, shall be assigned by the Regional Director to the Labor Arbiter for conciliation and
arbitration without coursing them through the conciliation section of the Regional Office.
2. Labor Standards Cases.
Cases involving violation of labor standards laws where employer- employee relationship still exists shall
be assigned to the Labor Arbiters where:
a) intricate questions of law are involved; or
b) evidentiary matters not disclosed or verified in the normal course of inspection by labor regulations
officers are required for their proper disposition.
3. Disposition of Cases.
When a case is assigned to a Labor Arbiter, all issues raised therein shall be resolved by him including those
which are originally cognizable by the Regional Director to avoid multiplicity of proceedings. In other
words, the whole case, and not merely issues involved therein, shall be assigned to and resolved by him.
xxx xxx xxx
(Emphasis supplied)
4. PD 1691(5-1-80) — original and exclusive jurisdiction over unresolved issues in collective bargaining
and money claims, which includes moral or other damages.
Despite the original and exclusive jurisdiction of labor arbiters over money claims, however, the Regional
Director nonetheless retained his enforcement power, and remained empowered to adjudicate
uncontested money claims.
5. BP 130 (8-21-8l) — strengthened voluntary arbitration. The decree also returned the Labor Arbiters as
part of the NLRC, operating as Arbitration Branch thereof.
6. BP 227(6-1- 82) — original and exclusive jurisdiction over questions involving legality of strikes and
lock-outs.

The present petition questions the authority of the Regional Director to issue the Order, dated August 4,
1986, on the basis of his visitorial and enforcement powers under Article 128 (formerly Article 127) of
the present Labor Code.

On August 4, 1986, when the order was issued, Article 128(b) 4 read as follows:
(b) The Minister of Labor or his duly authorized representatives shall have the power to order and
administer, after due notice and hearing, compliance with the labor standards provisions of this Code
based on the findings of labor regulation officers or industrial safety engineers made in the course of
inspection, and to issue writs of execution to the appropriate authority for the enforcement of their order,
except in cases where the employer contests the findings of the labor regulations officer and raises issues
which cannot be resolved without considering evidentiary matters that are not verifiable in the normal
course of inspection. (Emphasis supplied)

On the other hand, Article 217 of the Labor Code as amended by P.D. 1691, effective May 1, 1980; Batas
Pambansa Blg. 130, effective August 21, 1981; and Batas Pambansa Blg. 227, effective June 1, 1982, inter
alia, provides:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters shall have the original
and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by
the parties for decision, the following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and other terms and conditions of
employment;
3. All money claims of workers, including those based on non-payment or underpayment of wages, overtime
compensation, separation pay and other benefits provided by law or appropriate agreement, except claims
for employees' compensation, social security, medicare and maternity benefits;
4. Cases involving household services; and
 5. Cases arising from any violation of Article 265 of this Code, including questions involving the legality of
strikes and lock-outs. (Emphasis supplied)

Provisions of MOLE Policy Instructions Nos. 6, (Distribution of Jurisdiction Over Labor Cases) and
(Assignment of Cases to Labor Arbiters) giving Regional Directors adjudicatory powers over uncontested
money claims discovered in the course of normal inspection, provided an employer-employee relationship
still exists, are inapplicable.
In the present case, petitioner admitted the charge of underpayment of wages to workers still in its
employ; in fact, it pleaded for time to raise funds to satisfy its obligation. There was thus no contest
against the findings of the labor inspectors.

Barely less than a month after the promulgation on November 26, 1986 of the Zambales Base Metals case,
Executive Order No. 111 was issued on December 24, 1986,5 amending Article 128(b) of the Labor Code,
to read as follows:
(b) THE PROVISIONS OF ARTICLE 217 OF THIS CODE TO THE CONTRARY NOTWITHSTANDING AND IN CASES
WHERE THE RELATIONSHIP OF EMPLOYER-EMPLOYEE STILL EXISTS, the Minister of Labor and Employment
or his duly authorized representatives shall have the power to order and administer, after due notice and
hearing, compliance with the labor standards provisions of this Code AND OTHER LABOR LEGISLATION based
on the findings of labor regulation officers or industrial safety engineers made in the course of inspection,
and to issue writs of execution to the appropriate authority for the enforcement of their orders, except in
cases where the employer contests the findings of the labor regulation officer and raises issues which cannot
be resolved without considering evidentiary matters that are not verifiable in the normal course of
inspection. (Emphasis supplied)
As seen from the foregoing, EO 111 authorizes a Regional Director to order compliance by an employer
with labor standards provisions of the Labor Code and other legislation. It is Our considered opinion
however, that the inclusion of the phrase, " The provisions of Article 217 of this Code to the contrary
notwithstanding and in cases where the relationship of employer-employee still exists" ... in Article 128(b),
as amended, above-cited, merely confirms/reiterates the enforcement adjudication authority of the
Regional Director over uncontested money claims in cases where an employer-employee relationship
still exists. 6
Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6, 7 and 37, it
is clear that it has always been the intention of our labor authorities to provide our workers immediate
access (when still feasible, as where an employer-employee relationship still exists) to their rights and
benefits, without being inconvenienced by arbitration/litigation processes that prove to be not only
nerve-wracking, but financially burdensome in the long run.

This view is in consonance with the present "Rules on the Disposition of Labor Standard Cases in the
Regional Offices " 7 issued by the Secretary of Labor,
Thus, Sections 2 and 3 of Rule II on "Money Claims Arising from Complaint Routine Inspection", provide
as follows:
Section 2. Complaint inspection. — All such complaints shall immediately be forwarded to the Regional
Director who shall refer the case to the appropriate unit in the Regional Office for assignment to a Labor
Standards and Welfare Officer (LSWO) for field inspection. When the field inspection does not produce the
desired results, the Regional Director shall summon the parties for summary investigation to expedite the
disposition of the case. . . .
Section 3. Complaints where no employer-employee relationship actually exists. — Where employer-
employee relationship no longer exists by reason of the fact that it has already been severed, claims for
payment of monetary benefits fall within the exclusive and original jurisdiction of the labor arbiters. . . .
(Emphasis supplied)
Likewise, it is also clear that the limitation embodied in MOLE Policy Instructions No. 7 to amounts not
exceeding P100,000.00 has been dispensed with, in view of the following provisions of pars. (b) and (c),
Section 7 on "Restitution", the same Rules, thus:
xxx xxx xxx
(b) Plant-level restitutions may be effected for money claims not exceeding Fifty Thousand (P50,000.00). . .
.
(c) Restitutions in excess of the aforementioned amount shall be effected at the Regional Office or at the
worksite subject to the prior approval of the Regional Director.
which indicate the intention to empower the Regional Director to award money claims in excess of
P100,000.00; provided of course the employer does not contest the findings made, based on the provisions
of Section 8 thereof:
Section 8. Compromise agreement. — Should the parties arrive at an agreement as to the whole or part of
the dispute, said agreement shall be reduced in writing and signed by the parties in the presence of the
Regional Director or his duly authorized representative.
E.O. No. 111 was issued on December 24, 1986 or (3) months after the promulgation of the Secretary of
Labor's decision upholding private respondents' salary differentials and ECOLAs on September 24, 1986.
The amendment of the visitorial and enforcement powers of the Regional Director (Article 128-b) by said
E.O. 111 reflects the intention enunciated in Policy Instructions Nos. 6 and 37 to empower the Regional
Directors to resolve uncontested money claims in cases where an employer-employee relationship still
exists. This intention must be given weight and entitled to great respect.

The proceedings before the Regional Director must, perforce, be upheld on the basis of Article 128(b) as
amended by E.O. No. 111, dated December 24, 1986, this executive order "to be considered in the nature
of a curative statute with retrospective application."

2. We now come to the question of whether or not the Regional Director erred in extending the award to
all hospital employees. We answer in the affirmative.
The Regional Director correctly applied the award with respect to those employees who signed the
complaint, as well as those who did not sign the complaint, but were still connected with the hospital at
the time the complaint was filed .
The justification for the award to this group of employees who were not signatories to the complaint is
that the visitorial and enforcement powers given to the Secretary of Labor is relevant to, and exercisable
over establishments, not over the individual members/employees, because what is sought to be
achieved by its exercise is the observance of, and/or compliance by, such firm/establishment with the
labor standards regulations. Necessarily, in case of an award resulting from a violation of labor legislation
by such establishment, the entire members/employees should benefit therefrom.
However, there is no legal justification for the award in favor of those employees who were no longer
connected with the hospital at the time the complaint was filed, having resigned therefrom.

The enforcement power of the Regional Director cannot legally be upheld in cases of separated
employees. Article 129 of the Labor Code, cited by petitioner (p. 54, Rollo) is not applicable as said article
is in aid of the enforcement power of the Regional Director; hence, not applicable where the employee
seeking to be paid underpayment of wages is already separated from the service. His claim is purely a
money claim that has to be the subject of arbitration proceedings and therefore within the original and
exclusive jurisdiction of the Labor Arbiter.
Petitioner has likewise questioned the order dated August 4, 1986 of the Regional Director in that it does
not clearly and distinctly state the facts and the law on which the award is based.
G.R. No. 87439 February 21, 1990
ODIN SECURITY AGENCY, petitioner, vs.HON. DIONISIO C. DE LA SERNA,

FACTS
On July 8, 1986, a complaint was filed by Sergio Apilado and (55) others charging the petitioner Odin
Security Agency (hereafter "OSA"), underpayment of wages, illegal deductions, non-payment of night shift
differential, overtime pay, premium pay for holiday work, rest days and Sundays, service incentive leaves,
vacation and sick leaves, and 13th-month pay. When conciliation efforts failed, the parties were required
to submit their position papers.
Private respondents alleged in their position paper that their latest monthly salary was P1,600; that from
this amount, petitioner deducted P100 as administrative cost and P20 as bond; that they were not paid
their premium pay and overtime pay for working on the eleven (11) legal holidays per year; and, that since
private respondents were relieved or constructively dismissed, they must also be paid backwages.

Petitioner, on the other hand, contended that some 48 security guards threatened mass action against it.
Alarmed by a possible abandonment of post by the guards and mindful of its contractual obligations to its
clients/principals, petitioner relieved and re-assigned the complaining guards to other posts in Metro
Manila. Those relieved were ordered to report to the agency's main office for reassignment. Only few
complied, so those who failed to comply were placed on "AWOL" status. Petitioner claimed it complied
with the Labor Code provisions, and in support thereof, it submitted the "Quitclaim and Waiver" of thirty-
four (34) complainants. (20) complainants had withdrawn their complaints.

Earlier, on October 21, 1986, (17) complainants repudiated their quitclaim and waiver. They alleged that
management pressured them to sign documents which they were not allowed to read and that if such
waiver existed, they did not have any intention of waiving their rights under the law.

RD Piezas issued an order to pay the complainants. The complaining guards filed a motion for
reconsideration on the amounts which was treated as an appeal by respondent Undersecretary Dionisio
C. De la Serna.
Undersecretary affirmed the order of the Regional Director with modifications. The reason for the
reduction to (15) of the original list of sixteen (16) complainants was because the Undersecretary found
that Joseph Pardeno was never relieved from his post but continued to work for petitioner.

ISSUE
WON the petitioner was denied due process; no.
WIN RD had jurisdiction over the case; yes

RULING
The petitioner was not denied due process for several hearings were in fact conducted by the hearing
officer of the Regional Office of the DOLE and the parties submitted position papers upon which the
Regional Director based his decision in the case. There is no denial of due process where a party is given
an opportunity to be heard and present his case. Since petitioner herein participated in the hearings,
submitted a position paper, and filed a motion for reconsideration of the decision of the Labor
Undersecretary, it was not denied due process. The petitioner is estopped from questioning the alleged
lack of jurisdiction of the Regional Director over the private respondents' claims. Petitioner submitted to
the jurisdiction of the Regional Director by taking part in the hearings before him and by submitting a
position paper. When the Regional Director issued his order requiring petitioner to pay the private
respondents the benefits they were claiming, petitioner was silent. Only the private respondents filed a
motion for reconsideration. It was only after the Undersecretary modified the order of the Regional
Director that the petitioner moved for reconsideration and questioned the jurisdiction of the public
respondents to hear and decide the case. The principle of jurisdiction by estoppel bars it from doing this.
Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse
decision on the merits, it is too late for the loser to question the jurisdiction or power of the court. It is
not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to
secure an affirmative relief, to afterwards deny that same jurisdiction to escape a penalty.

The fact is, the Regional Director and the Undersecretary did have jurisdiction over the private
respondents' complaint which was originally for violation of labor standards (Art. 128[b], Labor Code).
Only later did the guards ask for backwages on account of their alleged constructive dismissal. Once
vested, that jurisdiction continued until the entire controversy was decided. The jurisdiction of public
respondents over the complaints is clear from a reading of Article 128(b) of the Labor Code, as amended
by Executive Order No. 111, thus:
(b) The provisions of Article 217 of this Code to the contrary notwithstanding and in cases where
the relationship of employer-employee still exists, the Minister of Labor and Employment or his
duly authorized representatives shall have the power to order and administer, after due notice and
hearing, compliance with the labor standards provisions of this Code and other labor legislation
based on the findings of labor regulation officers or industrial safety engineers made in the course
of inspection, and to issue writs of execution to the appropriate authority for the enforcement of
their orders, except in cases where the employer contests the findings of the labor regulation
officer and raises issues which cannot be resolved without considering evidentiary matters that
are not verifiable in the normal course of inspection.

In Briad Agro Development Corp. vs. Hon. Dionisio De la Serna, G.R. No. 82805, June 29, 1989, we clarified
the amendment when we ruled, thus:
To recapitulate under EO 111, the Regional Directors, in representation of the Secretary of Labor
— and notwithstanding the grant of exclusive original jurisdiction to Labor Arbiters by Article 217
of the Labor Code, as amended — have power to hear cases involving violations of labor standards
provisions of the Labor Code or other legislation discovered in the course of normal inspection, and
order compliance therewith, provided that:
l) the alleged violations of the employer involve persons who are still his employees, i.e.,
not dismissed, and
2) the employer does not contest the findings of the labor regulations officer or raise issues
which cannot be resolved without considering evidentiary matters that are not verifiable
in the normal course of inspection (p. 9, Concurring Opinion, J. Narvasa.)

Under the present rules, a Regional Director exercises both visitorial and enforcement power over labor
standards cases, and is therefore empowered to adjudicate money claims, provided there still exists an
employer-employee relationship, and the findings of the regional office is not contested by the employer
concerned.
G.R. No. 85934 January 30, 1990
SSK PARTS CORPORATION, petitioner, vs. TEODORICO CAMAS and SECRETARY OF LABOR &
EMPLOYMENT, respondents.

FACTS
This is a petition for review on certiorari of the decision of the DOLE, affirming the Order of the RD dated
in three consolidated cases filed against the petitioner: (1) by Teodorico Camas for illegal deductions; (2)
for underpayment of wages, non-payment of legal holiday pay and service incentive leave filed by the
union in behalf of its members; and (3) for non-payment of employees' service incentive leave,
underpayment of allowance, overtime pay, premium pay, and non-payment of two (2) regular holidays in
December which were discovered upon routine inspection conducted by the labor regulation officers.

After the parties had submitted their position papers and evidence, the Regional Director issued an order
to refund to complainant Teodorico Camas the amount of (P775.00) having been illegally deducted from
his salaries; and ordering respondent to pay individual claimants in the second case their unpaid overtime
pay, legal holiday pay, living allowance and service incentive leave.

ISSUE
Hence, this petition for certiorari in which the petitioner alleges:
1. that the Regional Director has no jurisdiction over its employees' claims; and
2. that it (petitioner) was denied due process.

RULING
The petition is devoid of merit. The jurisdiction of the Regional Director over claims for violation of labor
standards is conferred by Article 128-B of the Labor Code, as amended by Executive Order No. 111 of
March 26,1987 which provides that:
(b) The Provisions of Article 217 of this Code to the contrary notwithstanding and in cases where
the relationship of employer-employee still exists, the Minister of Labor and Employment or his
duly authorized representatives shall have the power to order and administer, after due notice and
hearing, compliance with the labor standards provisions of this Code and other labor legislation
based on the findings of labor regulation officers or industrial safety engineers made in the course
of inspection, and to issue writs of execution to the appropriate authority for the enforcement of
their orders, except in cases where the employer contests the findings of the labor regulation
officer and raises issues which cannot be resolved without considering evidentiary matters that
are not verifiable in the normal course of inspections. (Emphasis supplied.)
The jurisdiction of the Regional Director over employees' claims for wages and other monetary benefits
not exceeding P5,000 has been affirmed by Republic Act No. 6715, amending Article 129 of the Labor
Code as follows:
Art. 129. Recovery of wages, simple money claims and other benefits. — Upon complaint of any
interested party, the Regional Director of the Department of Labor and Employment or any of the
duly authorized hearing officers of the Department is empowered, through summary proceeding
and after due notice, to hear and decide any matter involving the recovery of wages and other
monetary claims and benefits, including legal interest, owing to an employee or person employed
in domestic or household service or househelper under this Code, arising from employer-employee
relations: Provided, that such complaint does not include a claim for reinstatement: Provided,
further, That the aggregate money claims of each employee or househelper do not exceed five
thousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or resolve the
complaint within thirty (30) calendar days from the date of the filing of the same.
Being a curative statute, Republic Act No. 6715 may be given retroactive effect if, as in this case, no vested
rights would be impaired. Under the exception clause in Article 128 (b) of the Labor Code, the Regional
Director may not be divested of his jurisdiction over these claims, unless three (3) elements concur,
namely: (a) that the petitioner (employer) contests the findings of the labor regulation officer and raises
issues thereon; (b) that in order to resolve such issues, there is a need to examine evidentiary matters;
and (c) that such matters are not verifiable in the normal course of inspection.

In this case, although the petitioner contested the Regional Director's finding of violations of labor
standards committed by the petitioner, that issue was resolved by an examination of evidentiary matters
which were verifiable in the ordinary course of inspection. Hence, there was no need to indorse the case
to the appropriate arbitration branch of the National Labor Relations Commission (NLRC) for adjudication
(Sec. 2, Rules Implementing Executive Order 111).

The petitioner's allegation that it was denied due process is not well taken. The petitioner actively
participated in the proceedings a quo by filing its answer to the complaint, presenting a position paper to
the Regional Director, submitting evidence in support of its claim, and appealing the decision of the
Regional Director to the Secretary of Labor.

206. FRANCISCO GUICO, JR vs. SECRETARY OF LABOR QUISUMBING

G.R. No. 131750 November 16, 1998

Doctrine:
The visitorial power of the Secretary of Labor to order and enforce compliance with labor standard laws
cannot be exercised where the individual claim exceeds P5,000.00, can no longer be applied in view of the
enactment of R.A. No. 7730 amending Article 128(b) of the Labor Code

Facts:
The case started when the Department of Labor and Employment (DOLE), received a letter-complaint dated
April 25, 1995, requesting for an investigation of petitioner's establishment, Copylandia Services & Trading,
for violation of labor standards laws. Pursuant to the visitorial and enforcement powers of the Secretary of
Labor and Employment or his duly authorized representative under Article 128 of the Labor Code, as
amended, inspections were conducted at Copylandia's outlets on April 27 and May 2, 1995. The inspections
yielded the following violations involving twenty-one (21) employees who are copier operators: (1)
underpayment of wages; (2) underpayment of 13th month pay; and (3) no service incentive leave with
pay.

In the investigation conducted by Hearing Officer Adonis Peralta on July 21, 1995, the 21 employees
claimed that they signed the Joint Affidavit for fear of losing their jobs. They added that their daily salary
was increased to P92.00 effective July 1, 1995, but the incentive and commission schemes were
discontinued. They alleged that they did not waive the unpaid benefits due to them.

On October 30, 1995, Regional Director Guerrero N. Cirilo issued an Order favorable to the 21 employees.
First, he ruled that the purported Receipt, Waiver and Quitclaim dated December 21 and 22, 1994, could
not cause the dismissal of the labor standards case against the petitioner since the same were executed
before the filing of the said case. Moreover, the employees repudiated said waiver and quitclaim. Second,
he held that despite the salary increase granted by the petitioner, the daily salary of the employees was
still below the minimum daily wage rate of P119.00 under Wage Order No. RB-I-03. Thirdly, he held that
the removal of the commission and incentive schemes during the pendency of the case violated the
prohibition against elimination or diminution of benefits under Article 100 of the Labor Code, as amended.
Petitioner received a copy of the Order on November 10, 1995. On November 15, 1995, petitioner filed a
Notice of Appeal. The next day, he filed a Memorandum of Appeal accompanied by a Motion to Reduce
Amount of Appeal Bond and a Manifestation of an Appeal Bond.

In his appeal memorandum, 9 petitioner questioned the jurisdiction of the Regional Director citing Article
123 of the Labor Code, as amended, and Section 1, Rule IX of the Implementing Rules of Republic Act No.
6715. He argued that the Regional Director has no jurisdiction over the complaint of the 21 employees
since their individual monetary claims exceed the P5,000.00 limit.

Issue:
(1) whether or not the Regional Director has jurisdiction over the instant labor standards case, and
(2) whether or not petitioner perfected his appeal.

Ruling:
1. Yes.

The visitorial power of the Secretary of Labor to order and enforce compliance with labor standard laws
cannot be exercised where the individual claim exceeds P5,000.00, can no longer be applied in view of the
enactment of R.A. No. 7730 amending Article 128(b) of the Labor Code.

Art. 128 (b) - Notwithstanding the provisions of Articles 129 and 217 of this Code to the
contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor
and Employment or his duly authorized representatives shall have the power to issue compliance orders
to give effect to the labor standards provisions of the Code and other labor legislation based on the
findings of the labor employment and enforcement officers or industrial safety engineers made in
the course of inspection. The Secretary or his duly authorized representatives shall issue writs of
execution to the appropriate authority for the enforcement of their orders, except in cases where the
employer contests the findings of the labor employment and enforcement officer and raises issues
supported by documentary proofs which were not considered in the course of inspection.

An order issued by the duly authorized representative of the Secretary of Labor and Employment
under this article may be appealed to the latter. In case said order involves a monetary award, an appeal
by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to
the monetary award in the order appealed from.

2. No. Article 128(b) of the Labor Code clearly provides that the appeal bond must be "in the amount
equivalent to the monetary award in the order appealed from." The records show that petitioner failed to
post the required amount of the appeal bond. His appeal was therefore not perfected.

207.TELEFUNKEN SEMICONDUCTORS EMPLOYEES UNION FFW vs. CA

G.R. Nos. 143013-14, 18 December 2000

Doctrine:
The moment the Secretary of Labor assumes jurisdiction over a labor dispute in an industry
indispensable to national interest, such assumption shall have the effect of automatically
enjoining the intended or impending strike. It was not even necessary for the Secretary of Labor to
issue another order directing them to return to work. The mere issuance of an assumption order by the
Secretary of Labor automatically carries with it a return-to-work order, even if the directive to return to
work is not expressly stated in the assumption order.

Facts:
The labor dispute started when the Company and the Union reached a deadlock in their negotiations for a
new collective bargaining agreement. The Union filed a Notice of Strike with the NCMB. The Acting DOLE-
Sec intervened and assumed jurisdiction over the dispute and thus enjoined any strike or lockout, whether
actual or intended, between the parties.

Despite the assumption Order, the Union struck. And also on despite the Notice of the Return-to-Work
Order, still some of the striking workers refused to heed the order and continued with their picket. The
Company then issued letters of termination for cause to the workers who did not report back to work
despite the Notice of Assumption and Return-to-Work Orders issued by the Acting DOLE-Sec. However, the
Acting DOLE-Sec issued another Order directing the Company to reinstate all striking workers “except the
Union Officers, shop stewards, and those with pending criminal charges, x x x” while the resolution of the
legality of the strike was pending. The strike was later declared illegal by the Sec.

ISSUE:
Whether or not defiance to the assumption and return-to-work orders of the Secretary of Labor after
assumption of jurisdiction is a valid ground to terminate the employment of striking members.

RULING:
Yes. It is clear from Art. 263(g) that the moment the Secretary of Labor assumes jurisdiction over a labor
dispute in an industry indispensable to national interest, such assumption shall have the effect of
automatically enjoining the intended or impending strike. It was not even necessary for the Secretary of
Labor to issue another order directing them to return to work. The mere issuance of an assumption order
by the Secretary of Labor automatically carries with it a return-to-work order, even if the directive to return
to work is not expressly stated in the assumption order. However, petitioners refused to acknowledge this
directive of the Secretary of Labor thereby necessitating the issuance of another order expressly directing
the striking workers to cease and desist from their actual strike, and to immediately return to work but
which directive the herein petitioners opted to ignore.

In this connection, Article 264 provides prohibited activities. One of which is that “No strike or lock out shall
be declared after the assumption of jurisdiction by the President or the Secretary or after certification or
submission of the dispute to compulsory or voluntary arbitration”. The rationale of this prohibition is that
once jurisdiction over the labor dispute has been properly acquired by the competent authority, that
jurisdiction should not be interfered with by the application of the coercive processes of a strike. We have
held in a number of cases that defiance to the assumption and return-to-work orders of the Secretary of
Labor after he has assumed jurisdiction is a valid ground for loss of the employment status of any striking
union officer or member.

208. PHIMCO INDUSTRIES, INC, vs. SECRETARY OF LABOR JOSE BRILLANTES

G.R. No. 120751 March 17, 1999

Doctrine:
To uphold the action of the public respondent under the premises would be stretching too far the power
of the Secretary of Labor as every case of a strike or lockout where there are inconveniences in the
community, or work disruptions in an industry though not indispensable to the national interest, would then
come within the Secretary's power. It would be practically allowing the Secretary of Labor to intervene in
any Labor dispute at his pleasure. This is precisely why the law sets and defines the standard: even in the
exercise of his power of compulsory arbitration under Article 263 (g) of the Labor Code, the Secretary must
follow the law.

Facts:
On March 9, 1995, the private respondent, Phimco Industries Labor Association (PILA), duly certified
collective bargaining representative of the daily paid workers of the petitioner, Phimco Industries Inc.
(PHIMCO), filed a notice of strike with the National Conciliation and Mediation Board, NCR, against PHIMCO,
a corporation engaged in the production of matches, after a deadlock in the collective bargaining and
negotiation. On April 21, 1995, when the several conciliation conferences called by the contending parties
failed to resolve their differences PILA, composed of 352 members, staged a strike.

On June 7, 1995, PILA presented a petition for the intervention of the Secretary of Labor in the resolution
of the labor dispute, to which petition PHIMCO opposed. Pending resolution of the said petition or on June
26, 1995, to be precise, PHIMCO sent notice of termination to some 47 workers including several union
officers.

On July 7, 1995, the then Acting Secretary of Labor Jose Brillantes assumed jurisdiction over the labor
dispute and issued his Order ruling that all striking workers, except those who have been handed down
termination papers on June 26, 1995, are hereby directed to return to work with twenty-four (24) hours
from receipt of this Order and for the Company to accept them back under the same terms and conditions
prevailing prior to the strike.

Issue:
Whether or not the public respondent acted with grave abuse of discretion amounting to lack or excess of
jurisdiction in assuming jurisdiction over subject labor dispute.

Ruling:
Yes, we hold that the public respondent gravely abused his discretion in assuming jurisdiction over the
labor dispute sued upon in the case.

Art. 263, paragraph (g) of the Labor Code, provides:

(g) When, in his opinion, there exist a labor dispute causing or likely to cause a strike or lockout in
an industry indispensable to the national interest, the Secretary of Labor and Employment may
assume jurisdiction over the dispute and decide it or certify the same to the Commission for
compulsory arbitration . . .

The Labor Code vests in the Secretary of Labor the discretion to determine what industries are indispensable
to the national interest. Accordingly, upon the determination by the Secretary of Labor that such industry
is indispensable to the national interest, he will assume jurisdiction over the labor dispute in the said
industry. 8 This power, however, is not without any limitation. In upholding the constitutionality of B.P. 130
insofar as it amends Article 264 (g) 9 of the Labor Code, it stressed in the case of Free telephone Workers
Union vs. Honorable Minister of Labor and Employment, et al.,10 the limitation set by the legislature on the
power of the Secretary of Labor to assume jurisdiction over a labor dispute, thus:

Batas Pambansa Blg. 130 cannot be any clearer, the coverage being limited to "strikes or lockouts
adversely affecting the national interest. 11

In this case at bar, however, the very admission by the public respondent draws the labor dispute in
question out of the ambit of the Secretary's prerogative, to wit.

While the case at bar appears on its face not to fall within the strict categorization of cases imbued
with "national interest", this office believes that the obtaining circumstances warrant the exercise
of the powers under Article 263 (g) of the Labor Code, as amended.
It is thus evident from the foregoing that the Secretary's assumption of jurisdiction grounded on the alleged
"obtaining circumstances" and not on a determination that the industry involved in the labor dispute is one
indispensable to the "national interest", the standard set by the legislature, constitutes grave abuse of
discretion amounting to lack of or excess of jurisdiction. To uphold the action of the public respondent
under the premises would be stretching too far the power of the Secretary of Labor as every case of a
strike or lockout where there are inconveniences in the community, or work disruptions in an industry
though not indispensable to the national interest, would then come within the Secretary's power. It would
be practically allowing the Secretary of Labor to intervene in any Labor dispute at his pleasure. This is
precisely why the law sets and defines the standard: even in the exercise of his power of compulsory
arbitration under Article 263 (g) of the Labor Code, the Secretary must follow the law. For "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"

209. NATIONAL FEDERATION OF LABOR (NFL) v HON. BIENVENIDO E. LAGUESMA

G.R. No. 123426 March 10, 1999

Doctrine:
The propriety of Rule 65 as a remedy was highlighted in St. Martin Funeral Homes v. NLRC, where the
legislative history of the pertinent statutes on judicial review of cases decided under the Labor Code was
traced, leading to and supporting the thesis that "since appeals from the NLRC to the Supreme Court were
eliminated, the legislative intendment was that the special civil action of certiorari was and still is the proper
vehicle for judicial review of decision of the NLRC" and consequently "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."5

Proceeding therefrom and particularly considering that the special civil action of certiorari under Rule 65 is
within the concurrent original jurisdiction of the Supreme Court and the Court of Appeals, St. Martin Funeral
Homes v. NLRC concluded and directed that all such petitions should be initially filed in the Court of Appeals
in strict observance of the doctrine on the hierarchy of courts.

Facts:
On 27 December 1994, a petition for certification election among the rank and file employees of Cebu
Shipyard and Engineering Work, Inc. was filed by the Alliance of Nationalist and Genuine Labor Organization
(ANGLO-KMU), alleging among others, that it is a legitimate labor organization; that respondent Cebu
Shipyard and Engineering Work, Inc. is a company engaged in the business of shipbuilding and repair with
more or less, four hundred (400) rank and file employees; that the Nagkahiusang Mamumuo sa Baradero
— National Federation of Labor is the incumbent bargaining agent of the rank and file employees of the
respondent company; that the petition is supported by more than twenty-five percent (25%) of all the
employees in the bargaining unit; that the petition is filed within the sixty (60) day period prior to the expiry
date of the collective bargaining agreement (CBA) entered into by and between the Nagkahiusang
Mamumuo sa Baradero-NFL and Cebu Shipyard Engineering Work, Inc. which is due to expire on 31
December 1994; and, that there is no bar to its bid to be certified as the sole and exclusive bargaining
agent of all the rank and file employees of the respondent company.

Med-Arbiter issued an Order, the petitioner is given five days from receipt of this Order to present proofs
that it has created a local in the appropriate bargaining unit where it seeks to operate as the bargaining
agent and that, relative thereto, it has submitted to the Bureau of Labor Relations or the Industrial Relations
Division of this Office the following: 1) A charter certificate; 2) the constitution and by-laws, a statement
on the set of officers, and the books of accounts all of which are certified under oath by the Secretary or
Treasurer, as the case may be, of such local or chapter and attested to by its President, OTHERWISE, this
case will be dismissed.
On 9 January 1995, forced-intervenor National Federation of Labor (NFL) moved for the dismissal of the
petition on grounds that petitioner has no legal personality to file the present petition for certification
election and that it failed to comply with the twenty-five percent (25%) consent requirement.

On 13 March 1995, the Med-Arbiter issued the assailed Resolution dismissing the petition, after finding that
the submission of the required documents evidencing the due creation of a local was made after the lapse
of the freedom period.

The Alliance of Nationalist Genuine Labor Organization-Kilusang Mayo Uno (ANGLO-KMU) filed an appeal
from the March 13, 1995 Med-Arbiter's resolution insisting that it is a legitimate labor organization at the
time of the filing of the petition for certification election, and claiming that whatever defect the petition
may have had was cured by the subsequent submission of the mandatory requirements.

Issue:
Whether petition for certiorari under Rule 65 of Rules of Civil Procedure is proper remedy in this case.

Ruing:
Not proper. The propriety of Rule 65 as a remedy was highlighted in St. Martin Funeral Homes v. NLRC,
where the legislative history of the pertinent statutes on judicial review of cases decided under the Labor
Code was traced, leading to and supporting the thesis that since appeals from the NLRC to the Supreme
Court were eliminated, the legislative intendment was that the special civil action of certiorari was and still
is the proper vehicle for judicial review of decision of the NLRC and consequently 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.

The Labor Code and its implementing and related rules generally do not provide for any mode for reviewing
the decision of the Secretary of Labor. It is further generally provided that the decision of the Secretary of
Labor shall be final and executory after ten (10) days from notice. Yet, like decisions of the NLRC which
under Art. 223 of the Labor Code become final after ten (10) days, decisions of the Secretary of Labor
come to this Court by way of a petition for certiorari even beyond the ten-day period provided in the Labor
Code and the implementing rules but within the reglementary period set for Rule 65 petitions under the
1997 Rules of Civil Procedure. It is procedurally feasible as well as practicable that petitions
for certiorari under Rule 65 against the decisions of the Secretary of Labor rendered under the Labor Code
and its implementing and related rules be filed initially in the Court of Appeals, in strict observance of the
doctrine on the hierarchy of courts.

Petition for certiorari, together with all pertinent records thereof, is REFERRED to the Court of Appeals for
appropriate action and disposition.

210. PEPSI-COLA SALES AND ADVERTISING UNION v SECRETARY OF LABOR

G.R. No. 97092 July 27, 1992

Doctrine:
1. That since the employee's dismissal was for just cause, he is entitled neither to reinstatement or back
wages nor separation pay or salaries for the unexpired portion of his contract, being entitled only to the
salaries earned up to the last day of employment; at the same time, however, as a general proposition,
the employer is obliged, on account of its failure to comply with the requirements of due process in
terminating the services of the employee, to pay damages to the latter fixed at P1,000.00, a sum deemed
adequate for the purpose.

Facts:
From 1964 until sometime about 1985, Alisasis was an employee of the Pepsi-Cola Bottling Co., Inc. and
later, of the Pepsi-Cola Products (Philippines) Inc., after the latter had bought out the former. He was also
a member of the labor organization of all regular route and truck salesmen and truck helpers of the
company — the Pepsi Cola Sales & Advertising Union (PSAU) — from June 1, 1965 up to the termination
of his employment in 1985. As a member of the PSAU, he was also a participant in the "Mutual Aid Plan"
set up by said union sometime in 1980. During the entire period of his employment, there were regularly
deducted from his wages the amounts corresponding to union dues as well as contributions to the fund of
the Mutual Aid Plan.

On May 7, 1986, Alisasis filed with the NLRC Arbitration Branch, Capital Region, Manila, a complaint for
illegal dismissal against Pepsi-Cola, Inc. This resulted in a judgment by the Labor Arbiter dated January
25, 1988 declaring him to have been illegally dismissed and ordering the employer to reinstate him "to his
former position without loss of seniority rights and with full backwages for one (1) year from the time he
was not allowed to report for
work..”. However, the judgment was reaffirmed with modification such that the deletion of the relief of
reinstatement was justified by the NLRC.Certainly, with the actuations of complainant, respondent had
ample reason or enough basis then to lose trust and confidence in him. Complainant, being a salesman,
should be considered to have occupied a position of responsibility so that, if respondent had lost trust and
confidence in him, the former could validly and legally terminate the services of the latter.

Alisasis thereafter asked his labor organization, PSAU, to pay

him monetary benefits in accordance with Section 3, Article X of the "Amended By-Laws of the Mutual Aid
Plan of the Pepsi-Cola Sales & Advertising Union. PSAU demurred, invoking in its turn Section 1, Article XII
of the same amended by-laws, declaring as disqualified from any entitlement to the PLAN and. . (from any)
Benefit or return of contributions. . under any circumstances," inter alia, "(a)ny member dismissed for
cause.

Alisasis thereupon filed a complaint against the union, PSAU, with the Med Arbitration Unit, National Capital
Region, Department of Labor and Employment, to compel the latter to pay him his claimed benefits.

Issue:
1. Whether or not the case at bar is within the original jurisdiction of the Med-Arbiter of the Bureau of
Labor Relations.
2. Whether or not, Alisases was dismissed for cause hence disqualified to claim any "Benefit or return of
contributions.

Ruling:
1. No. It is evident that the case at bar does not concern a dispute, grievance or problem "arising from or
affecting labor-management relations." So, if it is to be deemed as coming within the Med-Arbiter's
jurisdiction, it will have to be as either an "intra-union" or "inter-union" conflict.

No definition is given by law of these precise terms, "intra-union and inter-union conflicts." It is known,
however, that "intra-" and "inter-" are both combining forms, prefixes — the first, "intra-," meaning "within,
inside of [intramural, intravenous];" and the other, "inter-, denoting "1. between or among: the second
element is singular in form [interstate] 2. with or on each other (or one another), together, mutual,
reciprocal, mutually, or reciprocally [interact]." An intra-union conflict would therefore refer to a conflict
within or inside a labor union conflict would therefore refer to a conflict within or inside a labor union, and
an inter-union controversy or dispute, one occurring or carried on between or among unions. In this sense,
the controversy between Alisasis and his union, PSAU — respecting the former's rights under the latter's
"Mutual Aid Plan" — would be an intra-union conflict under Article 226 of the Labor Code and hence, within
the exclusive, original jurisdiction of the Med-Arbiter of the Bureau of Labor Relations whose decision, it
may additionally be mentioned, is appealable to the Secretary of Labor.
Certainly, said controversy is not one of those within the jurisdiction of the Labor Arbiters in accordance
with Article 217 of the Code, it not being an unfair labor practice case, or a termination dispute, or one
involving wages, rates of pay, hours of work and other terms and conditions of employment (which is
"accompanied with a claim for reinstatement"), or one for damages arising from the employer-employee
relations, or one for a violation of Article 264 of the Code, or any other claim arising from employer-
employee relations, or from the interpretation or implementation of a collective bargaining agreement or
of company personnel policies.

2. Yes. The Court holds that Alisasis had indeed been "dismissed for cause." His employer had established
this factual proposition by competent evidence to the satisfaction of both the Labor Arbiter and the National
Labor Relations Commission. In the Latter's view, and in its own words, "Certainly, with the actuations of
complainant, . . (Alisasis' employer) had ample reason or enough basis to lose trust and confidence in him
. . . considering that (said employer) had already lost trust and confidence in complainant which is founded
on a reasonable ground, as discussed earlier, (and therefore) there is no point in requiring respondent to
reinstate complainant to his former position . . (as to) do so would be tantamount to compelling the
management to employ someone whom it can no longer trust, which is oppressive."

It was merely "the manner in which such a dismissal from employment was effected . . (that was deemed
as) not in accordance with law, (there having been) failure to comply with the notice requirement under
Batas Pambansa Blg. 130 on termination of employees." That imperfection is, however, a circumstance
quite distinct from the existence of what the NLRC has clearly and expressly conceded to be a "valid and
lawful cause in the dismissal of complainant by respondent." And this is precisely the reason why, as already
pointed out, the NLRC declined to accord to Alisasis all the remedies or reliefs usually attendant upon an
illegal termination of employment — e.g., reinstatement, award of damages — although requiring payment
by the employer of the sum of P1,000.00 simply on account of its failure "to comply with the notice
requirement under Batas Pambansa Blg. 130 on termination of employees." The situation is on all fours
with that in the Wenphil Corporation Case, 19 cited in this opinion's opening paragraph, in which the
following pronouncements, among others, were made:

Thus in the present case, where the private respondent, who appears to be of violent temper, caused
trouble during office hours and even defied his superiors as they tried to pacify him, should not be rewarded
with re-employment and back wages. It may encourage him to do even worse and will render a mockery
of the rules of discipline that employees are required to observe. Under the circumstances the dismissal of
the private respondent for just cause should be maintained. He has no right to return to his former
employer.

However, the petitioner (employer) must nevertheless be held to account for failure to extend to private
respondent his right to an investigation before causing his dismissal. . . Thus, it must be imposed a sanction
for its failure to give a formal notice and conduct an investigation as required by law before dismissing . .
(respondent) from employment. Considering the circumstances of this case petitioner (employer) must
indemnify the private respondent (employee) the amount of P1,000.00. The measure of this award depends
on the facts of each case and the gravity of the omission committed by the employer.

The petitioner union (PSAU) was therefore quite justified in considering Alisasis as a "member dismissed
for cause," and hence disqualified under its amended by-laws to claim any "Benefit or return of contributions
. . under any circumstances, . . ." The ruling to the contrary of the Med-Arbiter and the Secretary of Labor
and Employment must thus be set aside as tainted with grave abuse of discretion.
ABBOTT LABORATORIES PHILIPPINES, INC., petitioner,
vs.
ABBOTT LABORATORIES EMPLOYEES UNION, MR. CRESENCIANO TRAJANO, in his
capacity as Acting Secretary of The Department Labor and of Employment and MR.
BENEDICTO ERNESTO BITONIO, JR., in his capacity as Director IV of the Bureau of Labor
Relations, respondents.

FACTS:

This special civil action for certiorari mandamus assails the action of the then Acting Secretary of Labor
and Employment Creseciano B. Trajano contained in its letter dated 19 September 1997,1 informing
petitioner Abbott Laboratories Philippines, Inc. (hereafter ABBOTT), thru its counsel that the Office of
the Secretary of Labor cannot act on ABBOTT's appeal from the decision of 31 March 19972 and the
Order of 9 July 19973 of the Bureau of Labor Relations, for lack of appellate jurisdiction.

On 22 February 1996,4 the Abbott Laboratories Employees Union (hereafter ALEU) represented by its
president, Alvin B. Buerano, filed an application for union registration in the Department of Labor and
Employment. ALEU alleged in the application that it is a labor organization with members consisting
of 30 rank-and-file employees in the manufacturing unit of ABBOTT and that there was no certified
bargaining agent in the unit it sought to represent, namely, the manufacturing unit.

The application was approved by the Bureau of Labor Relations, consequently, ALEU became a
legitimate labor organization.

On 2 April 1996,6 ABBOTT filed a petition for cancellation of the Certificate of Registration ABBOTT
assailed the certificate of registration since ALEU's application was not signed by at least 20% of the
total 286 rank-and-file employees of the entire employer unit; and that it omitted to submit copies of
its books of account.

On 21 June 1996,7 the Regional Director of the Bureau of Labor Relations decreed the cancellation of
ALEU's registration certificate No. NCR-UR-11-1585-95.8 In its decision, the Regional Director adopted
the findings and recommendations of the Med-Arbiter. It ruled that the union has failed to show that
the rank-and-file employees in the manufacturing unit of ABBOTT were bound by a common interest
to justify the formation of a bargaining unit separate from those belonging to the sales and office staff
units. There was, therefore, sufficient reason to assume that the entire membership of the rank-and-
file consisting of 286 employees or the "employer unit" make up the appropriate bargaining unit.

BLR Reversed the Judgment.

Its motion to reconsider the 31 March 1997 decision of the Bureau of Labor Relations having been
denied for lack of merit in the Order. ABBOTT appealed to the Secretary of Labor and Employment.
However, the Secretary of Labor and Employment refused to act on ABBOTT's appeal on the ground
that it has no jurisdiction to review the decision of the Bureau of Labor Relations on appeals in
cancellation cases emanating from the Regional Offices. The decision of the Bureau of Labor
Relations therein is final and executor.

ISSUE:

WoN, the Secretary of Labor and Employment has the power to review the decisions of the Bureau of
Labor Relations rendered in the exercise of its appellate jurisdiction over decisions of the Regional
Director in cases involving cancellations of certificates of registration of labor unions..
RULE: NO

Contrary to ABBOTT's contention, there has been no grave abuse of discretion on the part of the
Secretary of Labor and Employment. Its refusal to take cognizance of ALEU's appeal from the decision
of the Bureau of Labor Relations is in accordance with the provisions of Rule VIII, Book V of the
Omnibus Rules Implementing the Labor Code as amended by Department Order No. 09. 15 The rule
governing petitions for cancellation of registration of any legitimate labor organization or worker
association, as it now stands, provides:

Sec. 1. Venue of Action. — If the respondent to the petition is a local/chapter, affiliate, or a

workers' association with operations limited to one region, the petition shall be filed with the
Regional Office having jurisdiction over the place where the respondent principally operates.
Petitions filed against federations, national or industry unions, trade union centers, or workers'
associations operating in more than one regional jurisdiction, shall be filed with the Bureau.

Sec. 3. Cancellation of registration; nature and grounds. — Subject to the requirements of

notice and due process, the registration of any legitimate labor organization or worker's
association may be cancelled by the Bureau or the Regional Office upon the filing of an
independent petition for cancellation based on any of the following grounds:

(a) Failure to comply with any of the requirements prescribed under Articles 234, 237
and 238 of the Code;

(b) Violation of any of the provisions of Article 239 of the Code;

(b) Commission of any of the acts enumerated under Article 241 of the Code; provided,
that no petition for cancellation based on this ground may be granted unless supported
by at least thirty percent (30%) of all the members of the respondent labor organization
or workers' association.

Sec. 4. Action on the petition; appeals. — The Regional or Bureau Director, as the case
may be, shall have thirty (30) days from submission of the case for resolution within
which to resolve the petition. The decision of the Regional or Bureau Director may be
appealed to the Bureau or the Secretary, as the case may be, within ten (10) days from
receipt thereof by the aggrieved party on the ground of grave abuse of discretion or any
violation of these Rules.

The Bureau or the Secretary shall have fifteen (15) days from receipt of the records of
the case within which to decide the appeal. The decision of the Bureau or the Secretary
shall be final and executory.

Clearly, the Secretary of Labor and Employment has no jurisdiction to entertain the appeal of
ABBOTT. The appellate jurisdiction of the Secretary of Labor and Employment is limited only
to a review of cancellation proceedings decided by the Bureau of labor Relations in the
exercise of its exclusive and original jurisdiction. The Secretary of Labor and Employment has no
jurisdiction over decisions of the Bureau of Labor Relations rendered in the exercise of its appellate
power to review the decision of the Regional Director in a petition to cancel the union's certificate of
registration, said decisions being final and inappealable.

GRIEVANCE MACHINERY
G.R. No. 92009 February 17, 1993

MASTER IRON LABOR UNION (MILU), WILFREDO ABULENCIA, ROGELIO CABANA, LOPITO
SARANILLA, JESUS MOISES, BASILIO DELA CRUZ, EDGAR ARANES, ELY BORROMEO,
DANIEL BACOLON, MATIAS PAJIMULA, RESTITUTO PAYABYAB, MELCHOR BOSE, TEOFILO
ANTOLIN, ROBERT ASPURIA, JUSTINO BOTOR, ALFREDO FABROS, AGAPITO TABIOS,
BENARDO ALFON, BENIGNO BARCENA, BERNARDO NAVARRO, MOISES LABRADOR,
ERNESTO DELA CRUZ, EDUARDO ESPIRITU, IGNACIO PAGTAMA, BAYANI PEREZ,
SIMPLICIO PUASO, EDWIN VELARDE, BEATO ABOGADO, DANILO SAN ANTONIO, BERMESI
BORROMEO, and JOSE BORROMEO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MASTER IRON WORKS AND
CONSTRUCTION CORPORATION, respondents.

DOCTRINE: It should be remembered that a grievance procedure is part of the continuous process of
collective bargaining (Republic Savings Bank. vs. CIR, et al., 21 SCRA 226 [1967]). It is intended to
promote a friendly dialogue between labor and management as a means of maintaining industrial
peace.

FACTS:

Sometime in February 1987, the Master Iron Labor Union (MILU) entered into a collective barganing
agreement (CBA) with the Corporation for the three-year period between December 1, 1986 and
November 30, 1989 (Rollo, p. 7). Pertinent provisions of the CBA state:

Sec. 1. That there shall be no strike and no lockout, stoppage or shutdown of work, or
any other interference with any of the operation of the COMPANY during the term of
this AGREEMENT, unless allowed and permitted by law.

Sec. 2. Service Allowance — The COMPANY agrees to continue the granting of

service allowance of workers assigned to work outside the company plant, in addition
to his daily salary.

Right after the signing of the CBA, the Corporation subcontracted outside workers to do the usual jobs
done by its regular workers including those done outside of the company plant. As a result, the regular
workers were scheduled by the management to work on a rotation basis allegedly to prevent financial
losses thereby allowing the workers only ten (10) working days a month (Rollo, p. 8). Thus, MILU
requested implementation of the grievance procedure which had also been agreed upon in the CBA,
but the Corporation ignored the request.

MILU filed a notice of strike (Rollo, p. 54) with the Department of Labor and Employment. Upon the
intervention of the DOLE, through one Atty. Bobot Hernandez, the Corporation and MILU reached an
agreement whereby the Corporation acceded to give back the usual work to its regular employees
who are members of MILU (Rollo, p. 55).

Notwithstanding said agreement, the Corporation continued the practice of hiring outside workers.
When the MILU president, Wilfredo Abulencia, insisted in doing his regular work of cutting steel bars
which was being done by casual workers, a supervisor reprimanded him, charged him with
insubordination and suspended him for three (3) days. Upon the request of MILU, Francisco Jose of
the DOLE called for conciliation conferences. The Corporation, however, insisted that the hiring of
casual workers was a management prerogative. It later ignored subsequent scheduled conciliation
conferences.
Hence, on July 9, 1987, MILU filed a notice of strike on the following grounds: (a) violation of CBA; (b)
discrimination; (c) unreasonable suspension of union officials; and (d) unreasonable refusal to
entertain grievance, MILU staged the strike, maintaining picket lines on the road leading to the
Corporation's plant entrance and premises.

At about 11 o'clock in the morning of July 28, 1987, CAPCOM soldiers, who had been summoned by
the Corporation's counsel, came and arrested the picketers. Charges for illegal possession of firearms
and deadly weapons were lodged against them.

The Corporation filed with the NLRC National Capital Region arbitration branch a petition to declare
the strike illegal. MILU, with the assistance of the Alyansa ng Manggagawa sa Valenzuela (AMVA),
re-staged the strike. Consequently, the Corporation filed a petition for injunction before the NLRC
which, issued an order directing the workers to remove the barricades and other obstructions which
prevented ingress to and egress from the company premises. The workers oblige, through its
president, MILU offered to return to work in a letter.

On October 30, 1987, MILU filed a position paper with counter-complaint before the NLRC. In said
counter-complaint, the workers charged the Corporation with unfair labor practice for subcontracting
work that was normally done by its regular workers thereby causing the reduction of the latter's
workdays; illegal suspension of Abulencia without any investigation; discrimination for hiring casual
workers in violation of the CBA, and illegal dispersal of the picket lines by CAPCOM agents.

LA: Strike was illegal.

NLRC: Affirmed

Petitioners contend that notwithstanding the non-strike provision in the CBA, the strike they staged
was legal because the reasons therefor are non-economic in nature. They assert that the NLRC
abused its discretion in holding that there was "failure to exhaust the provision on grievance procedure"
in view of the fact that they themselves sought grievance meetings but the Corporation ignored such
requests.

ISSUE:

1.WoN, the NLRC committed GAD in affirming the decision of the LA declaring the strike illegal. NO

2. WoN, there was failure to exhaust the provision on grievance procedure. NO

RULE:

1. In holding that the strike was illegal, the NLRC relied solely on the no-strike no-lockout provision of
the CBA aforequoted. As this Court has held in Philippine Metal Foundries, Inc. vs. CIR (90 SCRA 135
[1979]), a no-strike clause in a CBA is applicable only to economic strikes. Corollarily, if the strike is
founded on an unfair labor practice of the employer, a strike declared by the union cannot be
considered a violation of the no-strike clause.

An economic strike is defined as one which is to force wage or other concessions from the employer
which he is not required by law to grant (Consolidated Labor Association of the Philippines vs.
Marsman & Co., Inc., 11 SCRA 589 [1964]). In this case, petitioners enumerated in their notice of
strike the following grounds: violation of the CBA or the Corporation's practice of subcontracting
workers; discrimination; coercion of employees; unreasonable suspension of union officials, and
unreasonable refusal to entertain grievance.

Much more than an economic issue, the said practice of the Corporation was a blatant violation of the
CBA — and unfair labor practice on the part of the employer under Article 248(i) of the Labor Code.
Although the end result, should the Corporation be required to observe the CBA, may be economic in
nature because the workers would then be given their regular working hours and therefore their just
pay, not one of the said grounds is an economic demand within the meaning of the law on labor strikes.

The other grounds, i.e., discrimination, unreasonable suspension of union officials and unreasonable
refusal to entertain grievance, had been ventilated before the Labor Arbiter. They are clearly unfair
labor practices as defined in Article 248 of the Labor Code.2 The subsequent withdrawal of petitioners'
complaint for unfair labor practice (NLRC-NCR Case No. 00-11-04132-87) which was granted by
Labor Arbiter Ceferina Diosana who also considered the case closed and terminated (Rollo, pp. 97 &
109) may not, therefore, be considered as having converted their other grievance into economic
demands.

2. Private respondent's failure to traverse petitioners' allegations that the NLRC abused its discretion
in holding that the provision on grievance procedure had not been exhausted clearly sustains such
allegation and upholds the petitioners' contention that the Corporation refused to undergo said
procedure. It should be remembered that a grievance procedure is part of the continuous process of
collective bargaining (Republic Savings Bank. vs. CIR, et al., 21 SCRA 226 [1967]). It is intended to
promote a friendly dialogue between labor and management as a means of maintaining industrial
peace. The Corporation's refusal to heed petitioners' request to undergo the grievance procedure
clearly demonstrated its lack of intent to abide by the terms of the CBA.

The bringing in of CAPCOM soldiers to the peaceful picket lines without any reported outbreak of
violence, was clearly in violation of the following prohibited activity under Article 264 of the Labor Code:

(d) No public official or employee, including officers and personnel of the New Armed
Forces of the Philippines or the Integrated National Police, or armed person, shall bring
in, introduce or escort in any manner any individual who seeks to replace strikers in
entering or leaving the premises of a strike area, or work in place of the strikers. The
police force shall keep out of the picket lines unless actual violence or other criminal
acts occur therein; Provided, That nothing herein shall be interpreted to prevent any
public officer from taking any measure necessary to maintain peace and order, protect
life and property, and/or enforce the law and legal order. (Emphasis supplied.)

All told, the strike staged by the petitioners was a legal one even though it may have been called to
offset what the strikers believed in good faith to be unfair labor practices on the part of the employer
(Ferrer, et al. vs. Court of Industrial Relations, et al., 17 SCRA 352 [1966]). Verily, such presumption
of legality prevails even if the allegations of unfair labor practices are subsequently found out to be
untrue.

G.R. No. 99266 March 2, 1999

SAN MIGUEL CORPORATION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION, AND SAN MIGUEL
CORPORATION EMPLOYEES UNION (SMCEU) — PTGWO, respondents.
PURISIMA, J.:

FACTS:

In July 1990, San Miguel Cooperation, alleging the need to streamline its operations due to financial
loses, shut down some of its plants and declared 55 positions as redundant listed as follows:
seventeen (17) employees in the Business Logistics Division ("BLD"), seventeen (17) in the Ayala
Operations Center (AOC), and eighteen (18) in the Magnolia-Manila Buying Station ("Magnolia-
MBS"). 3 Consequently, the private respondent union filed several grievance cases for the said
retrenched employees, praying for the redeployment of the said employees to the other divisions of
the company.

The grievance proceedings were conducted pursuant to Sections 5 and 8, Article VIII of the parties'
1990 Collective Bargaining Agreement providing for the following procedures.

During the grievance proceedings, however, most of the employees were redeployed, while others
accepted early retirement. As a result only 17 employees remained when the parties proceeded to
the third level (Step 3) of the grievance procedure. In a meeting on October 26, 1990, petitioner
informed private respondent union that if by October 30, 1990, the remaining 17 employees could
not yet be redeployed, their services would be terminated on November 2, 1990. The said meeting
adjourned when Mr. Daniel S. L. Borbon II, a representative of the union, declared that there was
nothing more to discuss in view of the deadlock. 5

The private respondent filed with the National Conciliation and Mediation Board (NCMB) of the
Department of Labor and Employment (DOLE) a notice of strike on the following grounds: a)
bargaining deadlock; b) union busting; c) gross violation of the Collective Bargaining Agreement
(CBA), such as non-compliance with the grievance procedure; d) failure to provide private
respondent with a list of vacant positions pursuant to the parties side agreement that was appended
to the 1990 CBA; and e) defiance of voluntary arbitration award. Petitioner on the other hand, moved
to dismiss the notice of strike but the NCMB failed to act on the motion.

SMC prayed for its dismissal.

NLRC: Dismissed the Complaint.

ISSUE:

WoN, the strike was valid. (Incidental issue pertains to WoN, the Grievance procedure was followed
if not, such strike is illegal)

RULE: NO

On June 3, 1991, to preserve the status quo, the Court issued a Resolution 9 granting petitioners
prayer for the issuance of a Temporary Restraining Order.

The Petition is impressed with merit.

Rule XXII, Section I, of the Rules and Regulations Implementing Book V the Labor Code10, reads:
 Sec.1. Grounds for strike and lockout. — A strike or lockout may be declared in
cases of bargaining deadlocks and unfair labor practices. Violations of the collective
bargaining agreements, except flagrant and/or malicious refusal to comply with its
economic provisions, shall not be considered unfair labor practice and shall not be
strikeable. No strike or lockout may be declared on grounds involving inter-union and
intra-union disputes or on issues brought to voluntary, or compulsory, arbitration.

In the case under consideration, the grounds relied upon by the private respondent union are non-
strikeable. The issues which may lend substance to the notice of strike filed by the private
respondent union are: collective bargaining deadlock and petitioner's alleged violation of the
collective bargaining agreement. These grounds, however, appear more illusory than real.

Collective Bargaining Deadlock is defined as "the situation between the labor and the management
of the company where there is failure in the collective bargaining negotiations resulting in a
stalemate" 11 This situation, is non-existent in the present case since there is a Board assigned on
the third level (Step 3) of the grievance machinery to resolve the conflicting views of the parties.
Instead of asking the Conciliation Board composed of five representatives each from the company
and the union, to decide the conflict, petitioner declared a deadlock, and thereafter, filed a notice of
strike. For failing to exhaust all the steps in the grievance machinery and arbitration proceedings
provided in the Collective Bargaining Agreement, the notice of strike should have been dismissed by
the NLRC and private respondent union ordered to proceed with the grievance and arbitration
proceedings.

NOTE: Grievance Procedure of SMC, take note of Step 3.

Sec.5. Processing of Grievance. — Should a grievance arise, an earnest effort shall be made to
settle the grievance expeditiously in accordance with the following procedures:

Step 1. — The individual employee concerned and the Union Directors, or the Union Steward shall,
first take up the employee's grievance orally with his immediate superior. If no satisfactory
agreement or adjustment of the grievance is reached, the grievance shall, within twenty (20) working
days from the occurrence of the cause or event which gave rise to the grievance, be filed in writing
with the Department Manager or the next level superior who shall render his decision within ten (10)
working days from the receipt of the written grievance. A copy of the decision shall be furnished the
Plant Personnel Officer.

Step 2. — If the decision in Step 1 is rejected, the employee concerned may elevate or appeal this in
writing to the Plant Manager/Director or his duly authorized representative within twenty (20) working
days from the receipt of the Decision of the Department Manager, Otherwise, the decision in Step 1
shall be deemed accepted by the employee.

The Plant Manager/Director assisted by the Plant Personnel Officer shall determine the necessity, of
conducting grievance meetings. If necessary, the Plant Manager/Director and the Plant Personnel
Officer shall meet the employee concerned and the Union Director/Steward on such date(s) as may
be designated by the Plant Manager. In every plant/office, Grievance Meetings shall be scheduled at
least twice a month.

The Plant Manager shall give his written comments and decision within ten (10) working days after
his receipt of such grievance or the date of submission of the grievance for resolution, as the case
may be. A copy of his Decision shall be furnished the Employee Relations Directorate.
Step 3. — If no satisfactory adjustment is arrived at Step 2, the employee may appeal the Decision
to the Conciliation Board as provided under Section 6 hereof, within fifteen (15) working days from
the date of receipt of the decision of the Plant Manager/Director or his designate. Otherwise, the
decision in Step 2 shall be deemed accepted by the employee.

The Conciliation Board shall meet on the grievance in such dates as shall be designated by the
Division/Business Unit Manager or his representative. In every Division/Business Unit, Grievance
Meetings of the Conciliation Board shall be scheduled at least once a month.

The Conciliation Board shall have fifteen (15) working days from the date of submission of the
grievance for resolution within which to decide on the grievance.

Sec. 6. Conciliation Board. — There shall be a conciliation Board per Business Unit or Division.
Every Conciliation Board shall be composed of not more than five (5) representatives each from the
Company and the Union. Management and the Union may be assisted by their respective legal
counsels.

In every Division/Business Unit, the names of the Company and Union representatives to the
Conciliation Board shall be submitted to the Division/Business Unit Manager not later than January
of every year. The Conciliation Board members shall act as such for one (1) year until removed by
the Company or the Union, as the case may be.

xxx xxx xxx

Sec. 8. Submission to Arbitration. — If the employee or Union is not satisfied with the Decision of the
Conciliation Board and desires to submit the grievance to arbitration, the employee or the Union
shall serve notice of such intention to the Company within fifteen (15) working days after receipt of
the Board's decision. If no such written notice is received by the Company within fifteen (15) working
days, the grievance shall be considered settled on the basis of the company's position and shall no
longer be available for arbitration. 4

VOLUNTARY ARB.

G.R. No. 140960 January 20, 2003

LUDO & LUYM CORPORATION, petitioner,

vs.
FERDINAND SAORNIDO as voluntary arbitrator and LUDO EMPLOYEES UNION (LEU)
representing 214 of its officers and members, respondents.

DOCTRINE:

Generally, the arbitrator is expected to decide only those questions expressly delineated by the
submission agreement. Nevertheless, the arbitrator can assume that he has the necessary power to
make a final settlement since arbitration is the final resort for the adjudication of disputes.
FACTS:

Petitioner LUDO & LUYM CORPORATION (LUDO for brevity) is a domestic corporation engaged in
the manufacture of coconut oil, corn starch, glucose and related products.

In the course of its business operations, LUDO engaged the arrastre services of Cresencio Lu Arrastre
Services (CLAS) for the loading and unloading of its finished products at the wharf. Accordingly,
several arrastre workers were deployed by CLAS to perform the services needed by LUDO.

These arrastre workers were subsequently hired, on different dates, as regular rank-and-file
employees of LUDO every time the latter needed additional manpower services. Said employees
thereafter joined respondent union, the LUDO Employees Union (LEU), which acted as the exclusive
bargaining agent of the rank-and-file employees.

Respondent union entered into a collective bargaining agreement with LUDO which provides certain
benefits to the employees, the amount of which vary according to the length of service rendered by
the availing employee.

Thereafter, the union requested LUDO to include in its members’ period of service the time during
which they rendered arrastre services to LUDO through the CLAS so that they could get higher
benefits. LUDO failed to act on the request. Thus, the matter was submitted for voluntary arbitration.

The parties accordingly executed a submission agreement raising the sole issue of the date of
regularization of the workers for resolution by the Voluntary Arbitrator.

Voluntary Arbitrator ruled that: (1) the respondent employees were engaged in activities necessary
and desirable to the business of petitioner, and (2) CLAS is a labor-only contractor of petitioner. It also
awarded benefits such as separation pay etc.

CA: Affirmed

ISSUE:

WHETHER OR NOT A VOLUNTARY ARBITRATOR CAN AWARD BENEFITS NOT CLAIMED IN

THE SUBMISSION AGREEMENT.

RULE: YES

Petitioner contends that the appellate court gravely erred when it upheld the award of benefits which
were beyond the terms of submission agreement. Petitioner asserts that the arbitrator must confine
its adjudication to those issues submitted by the parties for arbitration, which in this case is the sole
issue of the date of regularization of the workers. Hence, the award of benefits by the arbitrator was
done in excess of jurisdiction.6

The jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators and Labor Arbiters is clearly
defined and specifically delineated in the Labor Code. The pertinent provisions of the Labor Code,
read:

Art. 217. Jurisdiction of Labor Arbiters and the Commission. --- (a) Except as otherwise
provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to
hear and decide, within thirty (30) calendar days after the submission of the case by the parties
 for decision without extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural:

1. Unfair labor practice cases:

2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wage, rates of pay, hours of work and other terms and conditions of
employment;

4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;

xxx

Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. — The

Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies referred to in the
immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement,
except those which are gross in character, shall no longer be treated as unfair labor practice
and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes
of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or
malicious refusal to comply with the economic provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the Department of Labor
and Employment shall not entertain disputes, grievances or matters under the exclusive and
original jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall
immediately dispose and refer the same to the Grievance Machinery or Voluntary Arbitration
provided in the Collective Bargaining Agreement.

Art. 262. Jurisdiction over other labor disputes. — The Voluntary Arbitrator or panel of
Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other
labor disputes including unfair labor practices and bargaining deadlocks."

In construing the above provisions, we held in San Jose vs. NLRC, 9 that the jurisdiction of the Labor
Arbiter and the Voluntary Arbitrator or Panel of Voluntary Arbitrators over the cases enumerated in the
Labor Code, Articles 217, 261 and 262, can possibly include money claims in one form or
another.10 Comparatively, in Reformist Union of R.B. Liner, Inc. vs. NLRC,11 compulsory arbitration has
been defined both as "the process of settlement of labor disputes by a government agency which has
the authority to investigate and to make an award which is binding on all the parties, and as a mode
of arbitration where the parties are compelled to accept the resolution of their dispute through
arbitration by a third party (emphasis supplied)."12 While a voluntary arbitrator is not part of the
governmental unit or labor department’s personnel, said arbitrator renders arbitration services
provided for under labor laws.

Generally, the arbitrator is expected to decide only those questions expressly delineated by the
submission agreement. Nevertheless, the arbitrator can assume that he has the necessary power to
make a final settlement since arbitration is the final resort for the adjudication of disputes.13 The
succinct reasoning enunciated by the CA in support of its holding, that the Voluntary Arbitrator in a
labor controversy has jurisdiction to render the questioned arbitral awards, deserves our concurrence.

G.R. No. 138938 October 24, 2000

CELESTINO VIVIERO, petitioner,

vs.
COURT OF APPEALS, HAMMONIA MARINE SERVICES, and HANSEATIC SHIPPING CO.,
LTD. respondents.

DOCTRINE: 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."22 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.

FACTS:

Petitioner Vivero, a licensed seaman, is a member of the Associated Marine Officers and Seamen's
Union of the Philippines (AMOSUP). The Collective Bargaining Agreement entered into by AMOSUP
and private respondents provides, among others -

As found by the Labor Arbiter -

Complainant was hired by respondent as Chief Officer of the vessel "M.V. Sunny Prince" on 10 June
1994 under the terms and conditions, to wit:

On grounds of very poor performance and conduct, refusal to perform his job, refusal to report to the
Captain or the vessel’s Engineers or cooperate with other ship officers about the problem in cleaning
the cargo holds or of the shipping pump and his dismal relations with the Captain of the vessel,
complainant was repatriated.

On 01 August 1994, complainant filed a complaint for illegal dismissal at Associated Marine Officers’
and Seaman’s Union of the Philippines (AMOSUP) of which complainant was a member. Pursuant to
Article XII of the Collective Bargaining Agreement, grievance proceedings were conducted; however,
parties failed to reach and settle the dispute amicably, thus, complainant filed [a] complaint with the
Philippine Overseas Employment Administration (POEA).2

The law in force at the time petitioner filed his Complaint with the POEA was EO No. 247.3
While the case was pending before the POEA, private respondents filed a Motion to Dismiss on the
ground that the POEA had no jurisdiction over the case considering petitioner Vivero's failure to refer
it to a Voluntary Arbitration Committee in accordance with the CBA between the parties. Upon the
enactment of RA 8042, the Migrant Workers and Overseas Filipinos Act of 1995, the case was
transferred to the Adjudication Branch of the National Labor Relations Commission.

LA: Dismissed the complain stating that, since the CBA of the parties provided for the referral to a
Voluntary Arbitration Committee should the Grievance Committee fail to settle the dispute, and
considering the mandate of Art. 261 of the Labor Code on the original and exclusive jurisdiction of
Voluntary Arbitrators, the Labor Arbiter clearly had no jurisdiction over the case.5

NLRC: Set aside the decision of the Labor Arbiter on the ground that the record was clear that
petitioner had exhausted his remedy by submitting his case to the Grievance Committee of AMOSUP.
The NLRC then remanded the case to the Labor Arbiter for further proceedings. On 3 July 1998
respondents filed a Motion for Reconsideration which was denied by the NLRC on 23 July 1998.

CA: in favor of Respondent. CBA is the contract between them.

Private respondents, allege that the case is clearly one "involving the
proper interpretation and implementation of the Grievance Procedure found in the Collective
Bargaining Agreement (CBA) between the parties"18 because of petitioner’s allegation in his
claim/assistance request form submitted to the Union.

Private respondents further allege that the fact that petitioner sought the assistance of his Union
evidently shows that he himself was convinced that his Complaint was within the ambit of the
jurisdiction of the grievance machinery and subsequently by a Panel of Voluntary Arbitrators as
provided for in their CBA, and as explicitly mandated by Art. 261 of the Labor Code.20

ISSUE:

Whether the NLRC is deprived of jurisdiction over illegal dismissal cases whenever a CBA
provides for grievance machinery and voluntary arbitration proceedings.

RULE: NO

Art. 261. Jurisdiction of Voluntary Arbitrators or Panel of Voluntary Arbitrators. - The Voluntary
Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and
decide all unresolved grievances arising from the interpretation or implementation of the Collective
Bargaining Agreement and those arising from the interpretation or enforcement of company personnel
policies referred to in the immediately preceding article. Accordingly, violations of a Collective
Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair
labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For
purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or
malicious refusal to comply with the economic provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the Department of Labor and
Employment shall not entertain disputes, grievances or matters under the exclusive and original
jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose
and refer the same to the Grievance Machinery or Voluntary Arbitration provided in the Collective
Bargaining Agreement.
Art. 262. Jurisdiction Over Other Labor Disputes. - The Voluntary Arbitrator or panel of Voluntary
Arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including
unfair labor practices and bargaining deadlocks (emphasis supplied).

Private respondents attempt to justify the conferment of jurisdiction over the case on the Voluntary
Arbitrator on the ground that the issue involves the proper interpretation and implementation of the
Grievance Procedure found in the CBA. They point out that when petitioner sought the assistance of
his Union to avail of the grievance machinery, he in effect submitted himself to the procedure set forth
in the CBA regarding submission of unresolved grievances to a Voluntary Arbitrator.

The argument is untenable. The case is primarily a termination dispute. It is clear from the
claim/assistance request form submitted by petitioner to AMOSUP that he was challenging the legality
of his dismissal for lack of cause and lack of due process. The issue of whether there was proper
interpretation and implementation of the CBA provisions comes into play only because the grievance
procedure provided for in the CBA was not observed after he sought his Union’s assistance in
contesting his termination. Thus, the question to be resolved necessarily springs from the primary
issue of whether there was a valid termination; without this, then there would be no reason to invoke
the need to interpret and implement the CBA provisions properly.

In San Miguel Corp. v. National Labor Relations Commission21 this 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."22 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.

In this case, however, while the parties did agree to make termination disputes the proper subject of
voluntary arbitration, such submission remains discretionary upon the parties. A perusal of the CBA
provisions shows that Sec. 6, Art. XII (Grievance Procedure) of the CBA is the general agreement of
the parties to refer grievances, disputes or misunderstandings to a grievance committee, and
henceforth, to a voluntary arbitration committee. The requirement of specificity is fulfilled by Art. XVII
(Job Security) where the parties agreed -

Sec. 1. Promotion, demotion, suspension, dismissal or disciplinary action of the seaman shall be left
to the discretion of the Master, upon consultation with the Company and notification to the Union. This
notwithstanding, any and all disciplinary action taken on board the vessel shall be provided for in
Appendix "B" of this Agreement x x x x 23

Sec. 4. x x x x Transfer, lay-off or discipline of seamen for incompetence, inefficiency, neglect of work,
bad behavior, perpetration of crime, drunkenness, insubordination, desertion, violation of x x x
regulations of any port touched by the Company’s vessel/s and other just and proper causes shall be
at Master’s discretion x x x in the high seas or foreign ports. The Master shall refer the case/dispute
upon reaching port and if not satisfactorily settled, the case/dispute may be referred to the grievance
machinery or procedure hereinafter provided (emphasis supplied).24
The use of the word "may" shows the intention of the parties to reserve the right to submit the illegal
termination dispute to the jurisdiction of the Labor Arbiter, rather than to a Voluntary Arbitrator.
Petitioner validly exercised his option to submit his case to a Labor Arbiter when he filed
his Complaint before the proper government agency.

NOTE: Grievance Procedure. (For reference only)

ARTICLE XII

GRIEVANCE PROCEDURE

xxxx

Sec. 3. A dispute or grievance arising in connection with the terms and provisions of this Agreement
shall be adjusted in accordance with the following procedure:

1. Any seaman who feels that he has been unjustly treated or even subjected to an unfair consideration
shall endeavor to have said grievance adjusted by the designated representative of the unlicensed
department abroad the vessel in the following manner:

A. Presentation of the complaint to his immediate superior.

B. Appeal to the head of the department in which the seaman involved shall be employed.

C. Appeal directly to the Master.

Sec. 4. If the grievance cannnot be resolved under the provision of Section 3, the decision of the
Master shall govern at sea x x x x in foreign ports and until the vessel arrives at a port where the
Master shall refer such dispute to either the COMPANY or the UNION in order to resolve such dispute.
It is understood, however, if the dispute could not be resolved then both parties shall avail of the
grievance procedure.

Sec. 5. In furtherance of the foregoing principle, there is hereby created a GRIEVANCE COMMITTEE
to be composed of two COMPANY REPRESENTATIVES to be designated by the COMPANY and two
LABOR REPRESENTATIVES to be designated by the UNION.

Sec. 6. Any grievance, dispute or misunderstanding concerning any ruling, practice, wages or working
conditions in the COMPANY, or any breach of the Employment Contract, or any dispute arising from
the meaning or the application of the provision of this Agreement or a claim of violation thereof or any
complaint that any such crewmembers may have against the COMPANY, as well as complaint which
the COMPANY may have against such crewmembers shall be brought to the attention of the
GRIEVANCE COMMITTEE before either party takes any action, legal or otherwise.

Sec. 7. The COMMITTEE shall resolve any dispute within seven (7) days from and after the same is
submitted to it for resolution and if the same cannot be settled by the COMMITTEE or if the
COMMITTEE fails to act on the dispute within the 7-day period herein provided, the same shall be
referred to a VOLUNTARY ARBITRATION COMMITTEE.
An "impartial arbitrator" will be appointed by mutual choice and consent of the UNION and the
COMPANY who shall hear and decide the dispute or issue presented to him and his decision
shall be final and unappealable x x x x1