G.R. Nos.

191288 & 191304 March 7, 2012

MANILA ELECTRIC COMPANY, Petitioner,
vs.
JAN CARLO GALA, Respondent.

FACTS:
 Respondent Jan Carlo Gala commenced employment with the petitioner
Meralco Electric Company (Meralco) as a probationary lineman.
 On July 27, 2006, barely four months on the job, Gala was dismissed for
alleged complicity in pilferages of Meralco’s electrical supplies
 Meralco called for an investigation of the incident and asked Gala to explain.
Gala denied involvement in the pilferage, contending that even if his superiors
might have committed a wrongdoing, he had no participation in what they did.
He maintained that his mere presence at the scene of the incident was not
sufficient to hold him liable as a conspirator.
 Despite Gala’s explanation, Meralco proceeded with the investigation and
eventually terminated his employment on July 27, 2006.4
 Gala responded by filing an illegal dismissal complaint against Meralco.
 Labor Arbiter dismissed the complaint for lack of merit and held that Gala’s
participation in the pilferage of Meralco’s property rendered him unqualified
to become a regular employee.
 Gala appealed to the National Labor Relations Commission (NLRC).
 The NLRC reversed the labor arbiter’s ruling. It found that Gala had been
illegally dismissed, since there was "no concrete showing of complicity with
the alleged misconduct/dishonesty.
 The NLRC, however, ruled out Gala’s reinstatement, stating that his tenure
lasted only up to the end of his probationary period. It awarded him backwages
and attorney’s fees.
 Both parties moved for partial reconsideration; Gala, on the ground that he
should have been reinstated with full backwages, damages and interests; and
Meralco, on the ground that the NLRC erred in finding that Gala had been
illegally dismissed.
 The NLRC denied the motions. Relying on the same grounds, Gala and
Meralco elevated the case to the CA through a petition for certiorari under
Rule 65 of the Rules of Court.
 The CA modified the NLRC decision of May 2, 200811 and ordered Gala’s
reinstatement with full backwages and other benefits. The CA also denied
Meralco’s motion for reconsideration.
 Hence, the present petition for review on certiorari.12
  By way of his Comment (to the Petition) dated September 2, 2010,15 Gala asks
for a denial of the petition because of (1) serious and fatal infirmities in the
petition; (2) unreliable statements of Meralco’s witnesses; and (3) clear lack
of basis to support the termination of his employment.
 Gala contends, in regard to the alleged procedural defects of the petition, that
the "Verification and Certification," "Secretary’s Certificate" and "Affidavit
of Service" do not contain the details of the Community or Residence Tax
Certificates of the affiants, in violation of Section 6 of Commonwealth Act
No. 465 (an Act to Impose a Residence Tax). Additionally, the lawyers who
signed the petition failed to indicate their updated Mandatory Continuing
Legal Education (MCLE) certificate numbers, in violation of the rules.
ISSUE: WON the petition should be dismissed on the ground that it is defective
as the Verification and Certification," "Secretary’s Certificate" and "Affidavit of
Service" do not contain the details of the Community or Residence Tax
Certificates of the affiants and that the lawyer who signed the petition failed to
indicate his MCLE certificate number.

HELD:

 We stress at this point that it is the spirit and intention of labor legislation that
the NLRC and the labor arbiters shall use every reasonable means to ascertain
the facts in each case speedily and objectively, without regard to technicalities
of law or procedure, provided due process is duly observed.19 In keeping with
this policy and in the interest of substantial justice, we deem it proper to give
due course to the petition, especially in view of the conflict between the
findings of the labor arbiter, on the one hand, and the NLRC and the CA, on
the other. As we said in S.S. Ventures International, Inc. v. S.S. Ventures
Labor Union,20 "the application of technical rules of procedure in labor cases
may be relaxed to serve the demands of substantial justice."

NATIONWIDE SECURITY and ALLIED SERVICES, INC., Petitioner, v.

THE COURT OF APPEALS, NATIONAL LABOR RELATIONS
COMMISSION and JOSEPH DIMPAZ, HIPOLITO LOPEZ, EDWARD
ODATO, FELICISIMO PABON and JOHNNY AGBAY, Respondents.
RESOLUTION
QUISUMBING, J.:

FACTS:
  Labor Arbiter Manuel M. Manansala found petitioner Nationwide Security
and Allied Services, Inc., , not liable for illegal dismissal involving eight
security guards who were employees of the petitioner. However, the Labor
Arbiter directed the petitioner to pay the aforementioned security guards
P81,750.00 in separation pay, P8,700.00 in unpaid salaries, P93,795.68 for
underpayment and 10% attorney's fees based on the total monetary award.
 Dissatisfied with the decision, petitioner appealed to the NLRC which
dismissed its appeal for two reasons - first, for having been filed beyond the
reglementary period within which to perfect the appeal and second, for filing
an insufficient appeal bond.
 NLRC dismissed the appeals and ordered that the Decision is deemed Final
and Executory.
 Petitioner then appealed to the Court of Appeals to have the appeal resolved
on the merits rather than on pure technicalities in the interest of due process.
 The Court of Appeals dismissed the case, holding that in a special action for
certiorari, the burden is on petitioner to prove not merely reversible error, but
grave abuse of discretion amounting to lack of or excess of jurisdiction on the
part of public respondent NLRC.

ISSUE:

WHETHER OR NOT TECHNICALITIES IN LABOR CASES MUST PREVAIL

OVER THE SPIRIT AND INTENTION OF THE LABOR CODE UNDER
ARTICLE 221 THEREOF WHICH STATES:
"In any proceeding before the Commission or any of the Labor Arbiters, the rules of
evidence prevailing in courts of Law or equity shall not be controlling and it is the
spirit and [i]ntention of this Code that the Commission and its members and
Labor Arbiters shall use every and all reasonable means to ascertain the facts
in each case speedily and objectively and without [regard] to technicalities of
law or procedure, all [i]n the interest of due process."

HELD: Petition lacks merit.

 At the outset it must be pointed out here that the petition for certiorari filed
with the Court by petitioner under Rule 65 of the Rules of Court is
inappropriate. The proper remedy is a Petition for Review under Rule 45
purely on questions of law. There being a remedy of appeal via Petition for
Review under Rule 45 of the Rules of Court available to the petitioner, the
filing of a petition for certiorari under Rule 65 is improper.
  But even if we bend our Rules to allow the present petition for certiorari, still
it will not prosper because we do not find any grave abuse of discretion
amounting to lack of or excess of jurisdiction on the part of the Court of
Appeals when it dismissed the petition of the security agency.
 We must stress that under Rule 65, the abuse of discretion must be so patent
and gross as to amount to an evasion of positive duty or to a virtual refusal to
perform a duty enjoined by law, or to act at all in contemplation of law, as
where the power is exercised in an arbitrary and despotic manner by reason of
passion or personal hostility.10 No such abuse of discretion happened here.
The assailed decision by the Court of Appeals was certainly not capricious
nor arbitrary, nor was it a whimsical exercise of judgment amounting to a lack
of jurisdiction.11

 The Labor Code provides as follows:

ART. 223. Appeal. - Decisions, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders. Such appeal may be
entertained only on any of the following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the Labor
Arbiter;
(b) If the decision, order or award was secured through fraud or coercion, including
graft and corruption;
(c) If made purely on questions of law, and
(d) If serious errors in the findings of facts are raised which would cause grave or
irreparable damage or injury to the appellant.
In case of a judgment involving 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 Commission in the amount equivalent to
the monetary award in the judgment appealed from.
xxx
The New Rules of Procedure of the NLRC states:
Section 1. Periods of appeal. - Decisions, resolutions or orders of the Labor Arbiter
shall be final and executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt thereof; and in case of decisions,
resolutions or orders of the Regional Director of the Department of Labor and
Employment pursuant to Article 129 of the Labor Code, within five (5) calendar
days from receipt thereof. If the 10th or 5th day, as the case may be, falls on a
Saturday, Sunday or holiday, the last day to perfect the appeal shall be the first
working day following such Saturday, Sunday or holiday.
No motion or request for extension of the period within which to perfect an appeal
shall be allowed.

 In the instant case, both the NLRC and the Court of Appeals found that
petitioner received the decision of the Labor Arbiter on July 16, 1999. This
factual finding is supported by sufficient evidence,12 and we take it as binding
on us. Petitioner then simultaneously filed its "Appeal Memorandum",
"Notice of Appeal" and "Motion to Reduce Bond", by registered mail on July
29, 1999, under Registry Receipt No. 003098.13 These were received by the
NLRC on July 30, 1999.14 The appeal to the NLRC should have been
perfected, as provided by its Rules, within a period of 10 days from receipt by
petitioner of the decision on July 16, 1999. Clearly, the filing of the appeal
- -three days after July 26, 1999 - -was already beyond the reglementary
period and in violation of the NLRC Rules and the pertinent Article on
Appeal in the Labor Code.
 Failure to perfect an appeal renders the decision final and executory.15 The
right to appeal is a statutory right and one who seeks to avail of the right
must comply with the statute or the rules. The rules, particularly the
requirements for perfecting an appeal within the reglementary period
specified in the law, must be strictly followed as they are considered
indispensable interdictions against needless delays and for the orderly
discharge of judicial business.16 It is only in highly meritorious cases that
this Court will opt not to strictly apply the rules and thus prevent a grave
injustice from being done.17 The exception does not obtain here. Thus, we are
in agreement that the decision of the Labor Arbiter already became final and
executory because petitioner failed to file the appeal within 10 calendar days
from receipt of the decision.

G.R. NO. L-46496 FEBRUARY 27, 1940

ANG TIBAY, REPRESENTED BY TORIBIO TEODORO, MANAGER AND
PROPIETOR, AND
NATIONAL WORKERS BROTHERHOOD, PETITIONERS, VS.
THE COURT OF INDUSTRIAL RELATIONS AND NATIONAL LABOR
UNION, INC., RESPONDENTS.
69 Phil. 635 – Political Law – Constitutional Law – Due Process in Administrative
Bodies
Facts:

Teodoro Toribio owns and operates Ang Tibay, a leather company which supplies
the Philippine Army. Due to alleged shortage of leather, Toribio caused the lay off
of a number of his employees. However, the National Labor Union, Inc. (NLU)
questioned the validity of said lay off as it averred that the said employees laid off
were members of NLU while no members of the rival labor union National Workers
Brotherhood (NWB) were laid off. NLU claims that NWB is a company dominated
union and Toribio was merely busting NLU.

The case reached the Court of Industrial Relations (CIR) where Toribio and NWB
won. Eventually, NLU went to the Supreme Court invoking its right for a new trial
on the ground of newly discovered evidence. The Supreme Court agreed with NLU.
The Solicitor General, arguing for the CIR, filed a motion for reconsideration.

ISSUE:

Whether or not the National Labor Union, Inc. is entitled to a new trial.

HELD:

Yes. The records show that the newly discovered evidence or documents obtained
by NLU, which they attached to their petition with the SC, were evidence so
inaccessible to them at the time of the trial that even with the exercise of due
diligence they could not be expected to have obtained them and offered as evidence
in the Court of Industrial Relations. Further, the attached documents and exhibits are
of such far-reaching importance and effect that their admission would necessarily
mean the modification and reversal of the judgment rendered (said newly obtained
records include books of business/inventory accounts by Ang Tibay which were not
previously accessible but already existing).

The SC also outlined that administrative bodies, like the CIR, although not strictly
bound by the Rules of Court must also make sure that they comply to the
requirements of due process. For administrative bodies, due process can be complied
with by observing the following:
 The right to a hearing which includes the right of the party interested or
affected to present his own case and submit evidence in support thereof.
 Not only must the party be given an opportunity to present his case and to
adduce evidence tending to establish the rights which he asserts but the tribunal
must consider the evidence presented.
 While the duty to deliberate does not impose the obligation to decide right, it
does imply a necessity which cannot be disregarded, namely, that of having
something to support its decision. A decision with absolutely nothing to support it
is a nullity, a place when directly attached.
 Not only must there be some evidence to support a finding or conclusion but
the evidence must be “substantial.” Substantial evidence is more than a mere
scintilla It means such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.
 The decision must be rendered on the evidence presented at the hearing, or
at least contained in the record and disclosed to the parties affected.
 The administrative body or any of its judges, therefore, must act on its or his
own independent consideration of the law and facts of the controversy, and not
simply accept the views of a subordinate in arriving at a decision.
 The administrative body should, in all controversial questions, render its
decision in such a manner that the parties to the proceeding can know the various
issues involved, and the reasons for the decisions rendered. The performance of
this duty is inseparable from the authority conferred upon it

G.R. No. 76988 January 31, 1989

GENERAL RUBBER AND FOOTWEAR CORPORATION, petitioner,
vs.
THE HON. FRANKLIN DRILON IN HIS CAPACITY AS THE MINISTER
OF LABOR & EMPLOYMENT and THE GENERAL RUBBER
WORKERS' UNION-NATU, respondents.
FACTS:

 Wage Order No. 6 was issued, increasing the statutory minimum wage rate
(by P2.00) and the mandatory cost of living allowance (by P3.00 for non-
agricultural workers) in the private sector, to take effect on 1 November 1984.
 Petitioner General Rubber and Footwear Corporation applied to the National
Wages Council ("Council") for exemption from the provisions of Wage Order
No. 6
 Council denied the petitioner’s application.
 Some members of respondent General Rubber Workers' Union-NATU, led by
one Leopoldo Sto. Domingo, declared a strike against petitioner. 2 Three (3)
days later, on 28 May 1985, petitioner and Sto. Domingo, the latter purporting
 to represent the striking workers, entered into a Return-to-Work Agreement
("Agreement"), wherein a provision provides that the company agrees to
implement the full wage order no. 6 and to withdraw the MR. The Union
likewise agreed not to demand for the corresponding differential pay from nov
1, 1984 – May 29, 1985 arising out of the non compliance with the wage order.
 This agreement was subsequently ratified on 30 July 1985 in a document
entitled "Sama-samang Kapasyahan sa Pagpapatibay ng Return-to-Work
Agreement" 4 by some two hundred and sixty-eight (268) members of
respondent union, each member signing individually the instrument of
ratification.
 Before the ratification of the Agreement, petitioner filed, on 5 June 1985, a
Motion with the Council withdrawing its pending Motion for Reconsideration
of the Council's Order of 4 March 1985.
 Meanwhile, there were some one hundred (100) members of the union who
were unhappy over the Agreement, who took the view that the Council's Order
of 4 March 1985 had become final and executory upon the withdrawal of
petitioner's Motion for Reconsideration and who would not sign the
instrument ratifying the Agreement. On 10 July 1985, these minority union
members with respondent union acting on their behalf, applied for a writ of
execution of the Council's Order.
 Petitioner opposed the Motion for a writ of execution, contending that the
Council's approval of its deferred compliance with the implementation of the
Wage Order,7 together with the majority ratification of the Agreement by the
individual workers, 8 bound the non-ratifying union members represented by
respondent union.
 Respondent union countered that the Agreement — despite the majority
ratification — was not binding on the union members who had not consented
thereto, upon the ground that ratification or non-ratification of the Agreement,
involving as it did money claims, was a personal right under the doctrine of
"Kaisahan ng Manggagawa sa La Campana v. Honorable Judge Ulpiano
Sarmiento and La Campana."

ISSUE: whether or not union members who did not ratify a waiver of accrued wage
differentials are bound by the ratification made by a majority of the union members.

HELD:
  The core issue is whether or not Article 4 of the Return-to-Work Agreement
quoted above, could be deemed as binding upon all members of the union,
without regard to whether such members had or had not in fact individually
signed and ratified such Agreement. Article 4 of that Agreement provided for,
apparently, a quid pro quo arrangement: petitioner agreed to implement in full
Wage Order No. 6 starting 30 May 1985 (and not 1 November 1984, as
provided by the terms of Wage Order No. 6) and to withdraw its previously
filed Motion for Reconsideration with the National Wages Council; in turn,
the union and its members would refrain from requiring the company to pay
the differential pay (increase in pay) due under Wage Order No. 6
corresponding to the preceding seven-month period from 1 November 1984
to 29 May 1985.
 Thus, Kaisahan ng Mangagawa sa La Campana v. Sarmiento, (supra) is
practically on all fours with the instant case. In La Campana, what was at
stake was the validity of a compromise agreement entered into between the
union and the company. In that compromise agreement, the union undertook
to dismiss and withdraw the case it had filed with the then Court of Industrial
Relations, and waived its right to execute any final judgment rendered in that
case. The CIR had in that case, rendered a judgment directing reinstatement
of dismissed workers and payment of ten (10) years backwages. The Secretary
of Labor held that that compromise agreement was void for lack of ratification
by the individual members of the union. The Supreme Court upheld the
decision of the Secretary of Labor, stating among other things that:
Generally, a judgment on a compromise agreement puts an end to a litigation and
is immediately executory. However, the Rules [of Court] require a special
authority before an attorney can compromise the litigation of [his] clients. The
authority to compromise cannot lightly be presumed and should be duly
established by evidence. (Esso Philippine, Inc. v. MME, 75 SCRA 91).
As aptly held by the Secretary of Labor, the records are bereft of showing that
the individual members consented to the said agreement. Now were the members
informed of the filing of the civil case before the Court of First Instance. If the parties
to said agreement acted in good faith, why did they not furnish the Office of the
president with a copy of the agreement when they knew all the while that the labor
case was then pending appeal therein? Undoubtedly, the compromise agreement was
executed to the prejudice of the complainants who never consented thereto, hence,
it is null and void. The judgment based on such agreement does not bind the
individual members or complainants who are not parties thereto nor signatories
therein.
Money claims due to laborers cannot be the object of settlement or compromise
effected by a union or counsel without the specific individual consent of each
laborer concerned. The beneficiaries are the individual complainants themselves.
The union to which they belong can only assist them but cannot decide for them.

 In the instant case, there is no dispute that private respondents had not ratified
the Return-to-Work Agreement. It follows, and we so hold, that private
respondents cannot be held bound by the Return-to-Work Agreement. The
waiver of money claims, which in this case were accrued money claims,
by workers and employees must be regarded as a personal right, that is,
a right that must be personally exercised. For a waiver thereof to be
legally effective, the individual consent or ratification of the workers or
employees involved must be shown. Neither the officers nor the majority
of the union had any authority to waive the accrued rights pertaining to
the dissenting minority members, even under a collective bargaining
agreement which provided for a "union shop."
 It should perhaps be made clear that the Court is not here saying that accrued
money claims can never be effectively waived by workers and employees.
What the Court is saying is that, in the present case, the private respondents
never purported to waive their claims to accrued differential pay. Assuming
that private respondents had actually and individually purported to waive such
claims, a second question would then have arisen: whether such waiver could
be given legal effect or whether, on the contrary, it was violative of public
policy. 15 Fortunately, we do not have to address this second question here.

G.R. No. 81390 August 29, 1989

NATHANIEL OLACAO, et al vs.NLRC

FACTS:

 Petitioners were the former workers of private respondent Eastcoast

Development Enterprises, then a single proprietorship, owned, operated and
managed by respondents Spouses Constancio and Leodegaria Maglana,
Antonio Florendo and Miriam Maglana Santamaria ("Eastcoast," for brevity).
 petitioners filed with the then Ministry of Labor, Region XI, a complaint for
non-payment of wages and emergency living allowance.
 Eastcoast" decided to totally and permanently close its business. Thus, on 5
December 1977, Antonio Florendo, the Executive Vice-president and General
Manager, filed an application with the Regional Director of the then Ministry
of Labor to formally close its business on account of business reverses
 This application was favorably acted upon on 15 December 1977 by the
Regional Director of the Ministry of Labor, Regional Office No. XI, Davao
City, on condition that "Eastcoast" should pay all unpaid wages and separation
pay of all its employees (Annex "C-3," ibid. p. 168, Rollo).
 The owners of "Eastcoast" sold all their shareholdings to private respondent,
George Q. Choy, and the company was thereafter known as Eastcoast
Development Enterprises, Inc. ("Eastcoast, Inc.," for short).
 On 21 January 1978, "Eastcoast, Inc.," under a new management, paid its 381
employees including petitioners herein, all their unpaid wages living
allowances, overtime pay and all other benefits due them and termination pay,
computed up to 30 November 1977.
 Upon receiving said payments, petitioners signed sworn individual documents
entitled "Receipt and Release" whereby they absolutely and forever release
and discharge the Eastcoast Development Enterprises, its successors and
assigns, of any and all claims and liabilities whatsoever insofar as my past
salaries/wages, termination pay, overtime pay and other privileges accorded
me by law and/or any other claims are concerned.
 On 30 May 1980, Labor Arbiter Porfirio T. Reyes dismissed the "Unpaid
Wages Case" (NLRC Case No. 897-MC- XI-78) for lack of merit and for
being moot and academic in view of the "Receipt and Release" documents
executed by the complainant- workers.
 Appeal to the NLRC was dismissed since it was held that the payment of the
amounts stated in the deeds above referred to has rendered to (sic) this case
academic because the receipt by the complainants of the said amounts is an
established fact and there is no showing that their execution of the said
documents was tainted by anything that vitiates free consent
 In the meantime, on 27 November 1978, petitioners filed another Complaint
against "Eastcoast, Inc." this time for Illegal Dismissal LRD Case No. STF-
314-78) with the Regional Office No. XI, Davao City, of the then Ministry of
Labor. They prayed for "reinstatement . . . with full backwages from the date
of the illegal dismissal." \In its Answer (Annex "C", Petition), "Eastcoast,
Inc.," denied that it had dismissed petitioners illegally inasmuch as the total
closure of its establishment was with prior clearance of the Regional Director
of Labor, Region XI, Davao City, and that pursuant to the latter's Order of 15
December 1977, its employees including complainants, were fully
compensated "all unpaid wages earned and separation pay equivalent to 15
days for every year of service." As proof thereof, attached to the Answer was
the "Receipt and Release" sworn to by petitioner Nathaniel Olacao (Annex
"C- 4").
ISSUE:
Whether or not the acceptance of separation pay operates as a waiver of their claims
in the illegal dismissal case?

HELD:
 Peitioners further contend that their acceptance of separation pay does not
operate as a waiver of their claims in the "Illegal Dismissal Case." Indeed,
jurisprudence exists to the effect that a deed of release or quitclaim
cannot bar an employee from demanding benefits to which he is legally
entitled (Fuentes vs. NLRC, G.R. No. 76835, November 24, 1988); that
quitclaims and/or complete releases executed by the employees do not stop
them from pursuing theri claim arising from the unfair labor practice of the
employer (Garcia vs. NLRC, G.R. No. 67825, September 4, 1987, 153 SCRA
639); and that employees who received their received their dismissal and
that the acceptance of those benefits would not amount to estoppel
(Mercury Drug Co, Inc. vs. Court of Industrial Relations, G.R. No. 23357,
April 30, 1974, 56 SCRA 694); De Leon vs. NLRC, G.R. No. 52056, October
30, 1980, 100 SCRA 691).
 A telling difference from the cited cases, however, is the fact that the issue of
the validity of the releases, executed by petitioners under oath, was squarely
raised and resolved in Labor Arbiter Reyes' Decision in the "Unpaid Wages
Case," which found categorically that “sometime in November 1977, the
present complainants filed a money claim against respondents before the
Labor Arbitration Branch of Regional Office No. XI, Davao City, which was
docketed as NLRC Case No. 897-MC-XI-78 LRD Case No. MC 85777); that
one of the issues involved in said case was whether the documents signed by
complainants and denominated as Receipts and Release were legally valid and
binding; that the said documents show that herein complainants received the
specified amounts from respondents representing full and final payment of
their salaries, wages, allowances, overtime pay and other compensation
legally due them; together with termination pay and they forever release and
discharge the respondents, its sucessors and assigns of any claims and
liabilities whatsoever; that on May 30, 1980, the Labor Arbiter rendered a
decision dismissing the case for lack of merit and being moot and academic;
. . . that complanants in the above-entitled case appealed the said decision of
the Labor Arbiter to the National Labor RElations Commsission which
affirmed the decision of the Labor Arbiter, . . . .
Ordinarily, this Commission (NLRC) does not consider evidence and other pertinent
documents not submitted during the proceedings before the Arbitration level and
submitted for the first time on appeal.
However, we are constrained to consider the evidence, ANNEXES 'A' and 'B' of the
appeal which are the decision of the Labor Arbiter dated May 30, 1980 and the
decision of the First Division of this Commission promulgated on September 30,
1982 affirming the appealed decision of the Srbiter below.
It appears from the aforesaid decision of Labor Arbiter Porfirio Reyes dated
May 30, 1980 which was affirmed by the First Division of the Commisssion that
complainants in the case at bar were already paid their several maoney claims
including termination pay.

G.R. No. 102845 February 4, 1994

LOADSTAR SHIPPING CO., INC., petitioner,
vs.
GERARDO H. GALLO, ARNALDO GRIJALDO, RUBEN L. ANGELES,
ARNOLD F. BARAQUIN, PASTOR CALCITA, ROGELIO PADOL and
THE NATIONAL LABOR RELATIONS COMMISSION, respondents.

FACTS:
 Private respondents Gerardo H. Gallo, Arnaldo Grijaldo, Ruben L. Angeles,
Arnold F. Baraquin, Pastor Calcita and Rogelio Padol were employees of
petitioner company formerly assigned to one of its vessels which was
permanently moored at Isla Puting Bato, North Harbor, Manila due to its
unseaworthy condition.
 Assessing that its vessels were no longer serviceable and had been docked for
more than two (2) years, petitioner decided to settle whatever monetary
obligations were due to private respondents.
 Mr. Ricardo Aquino to facilitate the payment of all monetary benefits due
them under the law. Upon receiving their respective payments, private
respondents executed individual Release and Quitclaim papers together with
disembarkation orders and inventories.
 In July 1987, private respondents filed a complaint for illegal dismissal,
underpayment of wages, non-payment of overtime pay, thirteenth month pay
and allowance against petitioner with the Arbitration Branch of the National
Labor Relations Commission. They claimed that the reason why they were
called in May 1987 by Mr. Ricardo Aquino to the principal office was for the
purpose of paying their unpaid sick leave and vacation leave pay of several
months when their ship was on standby status. They alleged that after
 receiving their unpaid sick leave an vacation leave pay, they were required by
Mr. Aquino to sign folded documents under threat that if they would not sign
said documents, the money given to them for unpaid sick and vacation leave
would be taken back. They averred that they signed the folded documents
because they were in dire need of money.
When private respondents attempted to report for work, they were allegedly
informed that they were already dismissed in view of the Quitclaim and Release
papers they had signed.

ISSUE:
whether or not the document executed by private respondents absolutely and forever
released and discharged petitioner from any and all claims and liabilities whatsoever
insofar as concern past salaries, and other privileges accorded private respondents,
if any, by law, including their separation pay.

HELD:

 In Periquet vs. NLRC, 10 this Court ruled that:

Not all waivers and quitclaims are invalid as against public policy. If
the agreement was voluntarily entered into and represents a reasonable
settlement, it is binding on the parties and may not later be disowned
simply because of a change of mind. It is only where there is clear proof
that the waiver was wangled from an unsuspecting or gullible person or
the terms of settlement are unconscionable on its face, that the law will
step in to annul the questionable transaction. . . .

 Under prevailing jurisprudence, a deed or release or quitclaim cannot bar an

employee from demanding benefits to which he is legally entitled. 11
Similarly, employees who received their separation pay are not barred from
contesting the legality of their dismissal and that the acceptance of such
benefits would not amount to estoppel. 12
 In the case at hand, the issue of the validity of the releases executed by private
respondents under oath was squarely raised and resolved in the Labor Arbiter's
finding that their termination from the service was authorized under the law,
brought about by the continued unserviceability of their ships. The award to
private respondents of separation pay was a lawful consequence of their
separation from the service.
 It is not at all incongruous to grant or sustain an award of separation pay and
at the same time uphold the validity of the Quitclaim and Release executed by
 the recipients thereof, provided there is substantial evidence on record to show
that the latter covered, among other things, the proper amount of separation
pay.
 In Olacao vs. NLRC, 13 the petitioners signed sworn individual documents
entitled "Receipt and Release" covering their past salaries/wages, overtime
pay, termination pay, and other privileges accorded them by law. This was
after they filed a complaint for unpaid wages before the then Ministry of
Labor. Later, they filed a case for illegal dismissal, contending that their
acceptance of separation pay did not operate as a waiver of their claims in the
illegal dismissal case. In dismissing the petition, the Court affirmed the ruling
of the NLRC which observed that:
. . . More than the above, the record shows that the complainants
received, by virtue of the release documents, amounts which exceed by
leaps and bounds their original claims for unpaid wages and
allowances.
 In this proceeding, the issue of separation pay had been judicially settled, with
finality, also by the NLRC. The NLRC, therefore, had no alternative except
to forestall the grant of separation pay twice. The principle against unjust
enrichment must be held applicable to labor cases as well.
 Parenthetically, the issue of separation pay has likewise been settled in the
case at bench both in the decision of the Labor Arbiter of 21 September 1991
and in that of public respondent dated 17 November 1987 affirming said
decision. The NLRC resolution categorically stated that:
Perusal of the records shows that respondents adduced documents in
support of their position, Payrolls and vouchers were submitted to
show payment to complainants of 13th month pay, 5 days service
incentive leave and other benefits being claimed by complainants (See
Annexes 1 to 26 Supplemental Position Paper of Respondents). . . . We
find no legal and factual basis to reverse the findings of the Labor
Arbiter. . .
 Lastly, we, too are in agreement that what transpired was separation from
service brought about by the absence of serviceable ships. However, they were
not paid the full amount of separation pay due them under the law. . . .

G.R. No. 87297 August 5, 1991

ALFREDO VELOSO and EDITO LIGUATON petitioners,
vs.
DEPARTMENT OF LABOR AND EMPLOYMENT, NOAH'S ARK SUGAR
CARRIERS AND WILSON T. GO, respondents.
CRUZ, J.:
FACTS:

 The controversy began when the petitioners, along with several co-employees,
filed a complaint against the private respondent for unfair labor practices,
underpayment, and non-payment of overtime, holiday, and other benefits.
This was decided in favor of the complainants on October 6,1987. The motion
for reconsideration, which was treated as an appeal, was dismissed in a
resolution dated February 17, 1988.
 Private Respondent filed a motion for reconsideration and recomputation of
the amount awarded to the petitioners. On April 15, 1988, while the motion
was pending, petitioner Alfredo Veloso, through his wife Connie, signed a
Quitclaim and Release for and in consideration of P25,000.00,1 and on the
same day his counsel, Atty. Gaga Mauna, manifested "Satisfaction of
Judgment" by receipt of the said sum by Veloso.2 For his part, petitioner
Liguaton filed a motion to dismiss dated July 16, 1988, based on a Release
and Quitclaim dated July 19,1988 ,3 for and in consideration of the sum of
P20,000.00 he acknowledged to have received from the private respondent.
 These releases were later impugned by the petitioners on September 20, 1988,
on the ground that they were constrained to sign the documents because of
their "extreme necessity.
 In the case at bar, the petitioners claim that they were forced to sign their
respective releases in favor of their employer, the herein private respondent,
by reason of their dire necessity. The latter, for its part, insists that the
petitioner entered into the compromise agreement freely and with open eyes
and should not now be permitted to reject their solemn commitments.

ISSUE: WON the quitclaim and release is valid.

HELD:

 The Court had deliberated on the issues and the arguments of the parties and
finds that the petition must fail. The exception and not the rule shall be applied
in this case.
 We find that the questioned quitclaims were voluntarily and knowingly
executed and that the petitioners should not be relieved of their waivers on the
ground that they now feel they were improvident in agreeing to the
compromise. What they call their "dire necessity" then is no warrant to nullify
 their solemn undertaking, which cannot be any less binding on them simply
because they are laborers and deserve the protection of the Constitution. The
Constitution protects the just, and it is not the petitioners in this case.
 The case cited is not apropos because the quitclaims therein invoked were
secured by the employer after it had already lost in the lower court and were
subsequently rejected by this Court when the employer invoked it in a petition
for certiorari. By contrast, the quitclaims in the case before us were signed by
the petitioners while the motion for reconsideration was still pending in the
DOLE, which finally deemed it on March 7, 1989. Furthermore, the
quitclaims in the cited case were entered into without leave of the lower court
whereas in the case at bar the quitclaims were made with the knowledge and
approval of the DOLE, which declared in its order of December 16, 1988, that
"the compromise agreement/settlements dated April 15, 1988 and July 19,
1988 are hereby approved."
 It is also noteworthy that the quitclaims were voluntarily and knowingly made
by both petitioners even if they may now deny this. In the case of Veloso, the
quitclaim he had signed carried the notation that the sum stated therein had
been paid to him in the presence of Atty. Gaga Mauna, his counsel, and the
document was attested by Atty. Ferdinand Magabilin, Chief of the Industrial
Relations Division of the National Capitol Region of the DOLE. In the case
of Liguaton, his quitclaim was made with the assistance of his counsel, Atty.
Leopoldo Balguma, who also notarized it and later confirmed it with the filing
of the motion to dismiss Liguaton's complaint. The same Atty. Balguma is the
petitioners' counsel in this proceeding. Curiously, he is now challenging the
very same quitclaim of Liguaton that he himself notarized and invoked as the
basis of Liguaton's motion to dismiss, but this time for a different reason.
Whereas he had earlier argued for Liguaton that the latter's signature was a
forgery, he has abandoned that contention and now claims that the quitclaim
had been executed because of the petitioners' dire necessity.
 "Dire necessity" is not an acceptable ground for annulling the releases,
especially since it has not been shown that the employees had been forced to
execute them. It has not even been proven that the considerations for the
quitclaims were unconscionably low and that the petitioners had been tricked
into accepting them. While it is true that the writ of execution dated November
24, 1987, called for the collection of the amount of P46,267.92 each for the
petitioners, that amount was still subject to recomputation and modification
as the private respondent's motion for reconsideration was still pending before
the DOLE. The fact that the petitioners accepted the lower amounts would
suggest that the original award was exorbitant and they were apprehensive
that it would be adjusted and reduced. In any event, no deception has been
 established on the part of the Private respondent that would justify the
annulment of the Petitioners' quitclaims.

 The applicable law is Article 227 of the Labor Code providing clearly as
follows:
Art. 227. Compromise agreements. — Any compromise settlement,
including those involving labor standard laws, voluntarily agreed upon
by the parties with the assistance of the Bureau or the regional office of
the Department of Labor, shall be final and binding upon the parties.
The National Labor Relations Commission or any court shall not
assume jurisdiction over issues involved therein except in case of non-
compliance thereof or if there is prima facie evidence that the
settlement was obtained through fraud, misrepresentation or coercion.

 The petitioners cannot renege on their agreement simply because they may
now feel they made a mistake in not awaiting the resolution of the private
respondent's motion for reconsideration and recomputation. The possibility
that the original award might have been affirmed does not justify the
invalidation of the perfectly valid compromise agreements they had entered
into in good faith and with full voluntariness. In General Rubber and
Footwear Corp. vs. Drilon,6 we "made clear that the Court is not saying that
accrued money claims can never be effectively waived by workers and
employees." As we later declared in Periquet v. NLRC:7

Not all waivers and quitclaims are invalid as against public policy.1âwphi1 If
the agreement was voluntarily entered into and represents a reasonable
settlement, it is binding on the parties and may not later be disowned simply
because of a change of mind. It is only where there is clear proof that the
waiver was wangled from an unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that the law will step in to annul the
questionable transaction. But where it is shown that the person making the
waiver did so voluntarily, with full understanding of what he was doing, and
the consideration for the quitclaim is credible and reasonable, the transaction
must be recognized as a valid and binding undertaking. As in this case.

[G.R. NO. 161003 : May 6, 2005]

FELIPE O. MAGBANUA, CARLOS DE LA CRUZ, REMY ARNAIZ,
BILLY ARNAIZ, ROLLY ARNAIZ, DOMINGO SALARDA, JULIO
CAHILIG and NICANOR LABUEN, Petitioners, v. RIZALINO UY,
Respondent.
FACTS:

 "As a final consequence of the final and executory decision of the Supreme
Court in Rizalino P. Uy v. National Labor Relations Commission, et. al. (GR
No. 117983, September 6, 1996) which affirmed with modification the
decision of the NLRC in NLRC Case No. V-0427-93, hearings were
conducted [in the National Labor Relations Commission Sub-Regional
Arbitration Branch in Iloilo City] to determine the amount of wage
differentials due the eight (8) complainants therein, now [petitioners]. As
computed, the award amounted to P1,487,312.69 x x x.
 "On February 3, 1997, [petitioners] filed a Motion for Issuance of Writ of
Execution.
 "On May 19, 1997, [respondent] Rizalino Uy filed a Manifestation requesting
that the cases be terminated and closed, stating that the judgment award as
computed had been complied with to the satisfaction of [petitioners]. Said
Manifestation was also signed by the eight (8) [petitioners]. Together with the
Manifestation is a Joint Affidavit dated May 5, 1997 of [petitioners], attesting
to the receipt of payment from [respondent] and waiving all other benefits due
them in connection with their complaint.
 "On June 3, 1997, [petitioners] filed an Urgent Motion for Issuance of Writ of
Execution wherein they confirmed that each of them received P40,000 from
[respondent] on May 2, 1997.
 "On June 9, 1997, [respondent] opposed the motion on the ground that the
judgment award had been fully satisfied. In their Reply, [petitioners] claimed
that they received only partial payments of the judgment award.
 "On October 20, 1997, six (6) of the eight (8) [petitioners] filed a
Manifestation requesting that the cases be considered closed and terminated
as they are already satisfied of what they have received (a total of P320,000)
from [respondent]. Together with said Manifestation is a Joint Affidavit in the
local dialect, dated October 20, 1997, of the six (6) [petitioners] attesting that
they have no more collectible amount from [respondent] and if there is any,
they are abandoning and waiving the same.
 "On February 27, 1998, the Labor Arbiter issued an order denying the motion
for issuance of writ of execution and [considered] the cases closed and
terminated x x x.
 "On appeal, the [National Labor Relations Commission (hereinafter 'NLRC')]
reversed the Labor Arbiter and directed the immediate issuance of a writ of
execution, holding that a final and executory judgment can no longer be
 altered and that quitclaims and releases are normally frowned upon as contrary
to public policy."5
The Issues
Petitioners raise the following issues for our consideration:
"1. Whether or not the final and executory judgment of the Supreme Court could be
subject to compromise settlement;
"2. Whether or not the petitioners' affidavit waiving their awards in [the] labor case
executed without the assistance of their counsel and labor arbiter is valid;

The Court's Ruling

The Petition has no merit.

First Issue:

Validity of the Compromise Agreement

A compromise agreement is a contract whereby the parties make reciprocal
concessions in order to resolve their differences and thus avoid or put an end to a
lawsuit.11 They adjust their difficulties in the manner they have agreed upon,
disregarding the possible gain in litigation and keeping in mind that such gain is
balanced by the danger of losing.12 Verily, the compromise may be either
extrajudicial (to prevent litigation) or judicial (to end a litigation).13
A compromise must not be contrary to law, morals, good customs and public policy;
and must have been freely and intelligently executed by and between the parties.14
To have the force of law between the parties,15 it must comply with the requisites
and principles of contracts.16 Upon the parties, it has the effect and the authority of
res judicata, once entered into.17
When a compromise agreement is given judicial approval, it becomes more
than a contract binding upon the parties. Having been sanctioned by the court,
it is entered as a determination of a controversy and has the force and effect of
a judgment.18 It is immediately executory and not appealable, except for vices
of consent or forgery.19 The nonfulfillment of its terms and conditions justifies
the issuance of a writ of execution; in such an instance, execution becomes a
ministerial duty of the court.20

Following these basic principles, apparently unnecessary is a compromise agreement

after final judgment has been entered. Indeed, once the case is terminated by final
judgment, the rights of the parties are settled. There are no more disputes that can be
compromised.

Compromise Agreements
after Final Judgment

The issue involving the validity of a compromise agreement notwithstanding a final

judgment is not novel. Jesalva v. Bautista23 upheld a compromise agreement that
covered cases pending trial, on appeal, and with final judgment.24 The Court noted
that Article 2040 impliedly allowed such agreements; there was no limitation as to
when these should be entered into.25 Palanca v. Court of Industrial Relations26
sustained a compromise agreement, notwithstanding a final judgment in which only
the amount of back wages was left to be determined. The Court found no evidence
of fraud or of any showing that the agreement was contrary to law, morals, good
customs, public order, or public policy.27
Gatchalian v. Arlegui28 upheld the right to compromise prior to the execution of a
final judgment. The Court ruled that the final judgment had been novated and
superseded by a compromise agreement.29 Also, Northern Lines, Inc. v. Court of Tax
Appeals30 recognized the right to compromise final and executory judgments, as long
as such right was exercised by the proper party litigants.31

Second Issue:
Validity of the Waiver
Having ruled on the validity of the compromise agreement in the present suit, the
Court now turns its attention to the waiver of claims or quitclaim executed by
petitioners. The subject waiver was their concession when they entered into the
agreement. They allege, however, that the absence of their counsel and the labor
arbiter when they executed the waiver invalidates the document.

Not Determinative
of the Waiver's Validity
The presence or the absence of counsel when a waiver is executed does not
determine its validity. There is no law requiring the presence of a counsel to validate
a waiver. The test is whether it was executed voluntarily, freely and intelligently;
and whether the consideration for it was credible and reasonable.47 Where there is
clear proof that a waiver was wangled from an unsuspecting or a gullible person, the
law must step in to annul such transaction.48 In the present case, petitioners failed to
present any evidence to show that their consent had been vitiated.
The law is silent with regard to the procedure for approving a waiver after a case has
been terminated.49 Relevant, however, is this reference to the NLRC's New Rules of
Procedure:
"Should the parties arrive at any agreement as to the whole or any part of the dispute,
the same shall be reduced to writing and signed by the parties and their respective
counsel, or authorized representative, if any,50 before the Labor Arbiter.
"The settlement shall be approved by the Labor Arbiter after being satisfied that it
was voluntarily entered into by the parties and after having explained to them the
terms and consequences thereof.
"A compromise agreement entered into by the parties not in the presence of the
Labor Arbiter before whom the case is pending shall be approved by him, if after
confronting the parties, particularly the complainants, he is satisfied that they
understand the terms and conditions of the settlement and that it was entered into
freely and voluntarily by them and the agreement is not contrary to law, morals, and
public policy."51
This provision refers to proceedings in a mandatory/conciliation conference during
the initial stage of the litigation. Such provision should be made applicable to the
proceedings in the pre-execution conference, for which the procedure for approving
a waiver after final judgment is not stated. There is no reason to make a distinction
between the proceedings in mandatory/conciliation and those in pre-execution
conferences.
The labor arbiter's absence when the waivers were executed was remedied upon
compliance with the above procedure. The Court observes that the arbiter made
searching questions during the pre-execution conference to ascertain whether
petitioners had voluntarily and freely executed the waivers.52 Likewise, there was
evidence that they made an intelligent choice, considering that the contents of the
written waivers had been explained to them.53 The labor arbiter's absence when those
waivers were executed does not, therefore, invalidate them.
The Court declines to rule on the allegation that respondent's counsels encroached
upon the professional employment of petitioners' lawyer when they facilitated the
waivers.54 The present action is not the proper forum in which to raise any charge of
professional misconduct. More important, petitioners failed to present any
supporting evidence.

[G.R. Nos. 63208-09. May 5, 1989.]

CAMARA SHOES, represented by LUCIA VDA. DE CAMARA, Petitioner, v.

KAPISANAN NG MGA MANGGAGAWA SA CAMARA SHOES, HON.
FRANCISCO ESTRELLA, HON. VICENTE LEOGARDO, JR., and
NATIONAL LABOR RELATIONS COMMISSION, Respondents.

FACTS:

 The members of the respondent union numbering twenty (20), who are
themselves private respondents, were regular employees of the petitioner,
 Camara Shoes, a single proprietorship engaged in the manufacture and sale of
shoes.

 Petitioner served notice to lay off the respondents effective January 31, 1980,
subject to the approval of the clearance application by the Ministry of Labor
and Employment.

 Petitioner filed its application for clearance to terminate the services of the
employees on grounds of financial losses, business reversals and lack of work
due to shortage of raw materials.
 Kapisanan ng mga Manggagawa sa Camara Shoes filed its opposition to said
application. At the same time, the respondent union together with the
individual respondents filed a complaint for illegal layoff, unpaid wages and
service incentive leave pay.
 On February 1, 1980, the petitioner refused to allow the individual
respondents to continue working.

 On March 28, 1980, the respondent Director of Labor denied the petitioner’s
application for clearance due to lack of substantial proofs.

 On April 18, 1980, the petitioner appealed the above order to the National
Labor Relations Commission (NLRC).

 On June 11, 1980, pending said appeal, the petitioner moved to dismiss the
aforecited cases (NCR-STF-1-281-80 and NCR-STF-234-80) because sixteen
(16) individual respondents except for Carlos Lapid, Eustaquio Mariano,
Adelina Villanueva and Erving Rios had agreed to the settlement of their
claims as shown in an affidavit of release and quit-claim (Annex E, petition).

 On July 3, 1980, the respondent union moved to dismiss the appeal for having
been filed out of time.

 On December 29, 1982, Deputy Minister Vicente Leogardo issued an Order

dismissing the appeal.

 The petitioner alleges that the present labor cases do not survive considering
that on January 13, 1979 the proprietor of the petitioner company, Santos
Camara, died intestate. As a result of the death of Mr. Camara, it is alleged
 that the labor case was automatically extinguished. There is no merit to this
contention.

ISSUE:

WON the death of the proprietor of the business extinguished the labor case.

HELD:

The present case was not extinguished because of the death of the proprietor, Santos
Camara who died long before the application for clearance to terminate was filed.
This case falls under the jurisdiction of the Ministry of Labor and not the civil courts
as contended by the petitioner.
There is no merit to this contention.

We agree with the Solicitor General that:

"NCR-STF-1-234-80 sought reinstatement of individual respondents to their work.

It was not a money claim, not to say it involved purely employer-employee
relationship, which fell under the exclusive authority of respondent officials to hear
and resolve. While it combined a claim for backwages and the like, the entitlement
of individual respondents thereto solely depended on their right to be reinstated.
Besides, Santos Camara died on January 13, 1979. Individual respondents were
dismissed without the required clearance on February 1, 1980. Also, the backwages,
that individual respondents claimed in NCR-STF-1-234-80 covered the period from
February, 1980 until actual reinstatement. Moreover, they were claims against
petitioner, as business concern that continued to operate after his death." (Rollo, p.
106).

Clearly then, the present case was not extinguished because of the death of the
proprietor, Santos Camara who died long before the application for clearance to
terminate was filed. This case falls under the jurisdiction of the Ministry of Labor
and not the civil courts as contended by the petitioner. Considering, however, that
sixteen (16) out of the original twenty (20) claimants had agreed to the settlement of
their claims, the petition is dismissed as academic insofar as they are concerned.

[G.R. No. 122389. June 19, 1997]

MIGUEL SINGSON, Petitioner, v. NATIONAL LABOR RELATIONS
COMMISSION and PHILIPPINE AIRLINES, INC. (PAL), Respondents.
 DECISION
PUNO, J.:

FACTS:

 petitioner Singson was employed by private respondent Philippine Airlines,

Inc. (hereinafter PAL) as Traffic Representative Passenger, Handling
Division. His duty consisted of checking in passengers and baggage for a
particular flight.
 On June 7, 1991, petitioner was assigned to serve the check-in counter of
Japan Air Lines (hereinafter JAL) for Flight 742. Among the passengers
checked in by him was Ms. Lolita Kondo who was bound for Narita, Japan.
After checking in, Ms. Kondo lodged a complaint alleging that petitioner
required her to pay US $200.00 for alleged excess baggage without issuing
any receipt.
 A confrontation took place where petitioner was asked by the security officer
to empty his pockets. The dollars paid by Ms. Kondo were not found in his
possession. However, when the lower panel of the check-in counter he was
manning was searched, the sum of two hundred sixty five dollars (US $265)
was found therein consisting of two (2) one hundred dollar bills, one (1) fifty
dollar bill, one (1) ten dollar bill and one (1) five dollar bill. Petitioner was
administratively charged and investigated by a committee formed by private
respondent PAL.
 The investigation committee found petitioner guilty of the offense charged
and recommended his dismissal. Private respondent PAL adopted the
committee's recommendation and dismissed him from the service effective
June 7, 1991.
 On September 12, 1991, petitioner lodged a complaint against respondent
PAL before the NLRC-NCR for illegal dismissal, attorney's fees and
damages.
 Labor Arbiter Aquino declared petitioner's dismissal illegal and ordered his
reinstatement with backwages.
 Respondent PAL appealed the decision of the Labor Arbiter.
 On May 19, 1995, the Second Division of public respondent NLRC,
composed of Commissioners Victoriano R. Calaycay, Rogelio I. Rayala and
Raul T. Aquino as presiding commissioner, promulgated its Resolution
reversing the decision of then Labor Arbiter Aquino and dismissing the
complaint against respondent PAL.
  Petitioner filed on June 5, 1995, a motion for the reconsideration of the
aforementioned Resolution and an Amended Motion for Reconsideration on
June 15, 1995. Public respondent NLRC, thru the Second Division with only
two commissioners taking part, namely, Commissioners Calaycay and
Rayala, denied the motion.

ISSUE:
WON Public respondent NLRC acted with grave abuse of discretion and/or in excess
of jurisdiction when the Hon. Raul T. Aquino, in his capacity as Presiding
Commissioner of the Second Division of the NLRC and as a member thereof,
participated actively in the promulgation of the aforesaid decision and in the
consultation of the members thereof in reaching the conclusion before it was
assigned to the ponente, Hon. Calaycay.

HELD:

We find merit in this petition.

Petitioner assails the Resolution of the public respondent NLRC on account of
Commissioner Raul T. Aquino's participation in reviewing and reversing on appeal
his own decision as labor arbiter in NLRC-NCR Case No. 00-10-05750-91.
Respondents contend that Commissioner Aquino's failure to inhibit himself is a
harmless error that will not infirm the subject resolution. We do not agree. In the
case of Ang Tibay v. Court of Industrial Relations,7 we laid down the requisites
of procedural due process in administrative proceedings, to wit: (1) the right to a
hearing, which includes the right to present one's case and submit evidence in
support thereof; (2) the tribunal must consider the evidence presented; (3) the
decision must have something to support itself; (4) the evidence must be substantial;
(5) the decision must be based on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected; (6) the tribunal or body
or any of its judges must act on its own independent consideration of the law and
facts of the controversy, and not simply accept the views of a subordinate; (7) the
Board or body should, in all controversial questions, render its decision in such
manner that the parties to the proceeding can know the various issues involved, and
the reason for the decision rendered. In addition, administrative due process includes
(a) the right to notice, be it actual or constructive, of the institution of the proceedings
that may affect a person's legal right; (b) reasonable opportunity to appear and
defend his rights and to introduce witnesses and relevant evidence in his favor; (c) a
tribunal so constituted as to give him reasonable assurance of honesty and
impartiality, and one of competent jurisdiction; and (d) a finding or decision by that
tribunal supported by substantial evidence presented at the hearing or at least
ascertained in the records or disclosed to the parties.8 It is self-evident from the ruling
case law that the officer who reviews a case on appeal should not be the same person
whose decision is the subject of review. Thus, we have ruled that "the reviewing
officer must perforce be other than the officer whose decision is under review."

 In the case at bar, we hold that petitioner was denied due process when
Commissioner Aquino participated, as presiding commissioner of the Second
Division of the NLRC, in reviewing private respondent PAL's appeal. He was
reviewing his own decision as a former labor arbiter. Under Rule VII, Section
2 (b) of the New Rules of Procedure of the NLRC,10 each Division shall
consist of one member from the public sector who shall act as the Presiding
Commissioner and one member each from the workers and employers sectors,
respectively. The composition of the Division guarantees equal representation
and impartiality among its members. Thus, litigants are entitled to a review of
three (3) commissioners who are impartial right from the start of the process
of review. Commissioner Aquino can hardly be considered impartial since he
was the arbiter who decided the case under review. He should have inhibited
himself from any participation in this case.
 Prescinding from this premise, the May 19, 1995 resolution of the respondent
NLRC is void for the Division that handed it down was not composed of three
impartial commissioners. The infirmity of the resolution was not cured by the
fact that the motion for reconsideration of the petitioner was denied by two
commissioners and without the participation of Commissioner Aquino. The
right of petitioner to an impartial review of his appeal starts from the time he
filed his appeal. He is not only entitled to an impartial tribunal in the resolution
of his motion for reconsideration. Moreover, his right is to an impartial
review of three commissioners. The denial of petitioner's right to an
impartial review of his appeal is not an innocuous error. It negated his right to
due process.

[G.R. No. 126773. April 14, 1999]

RUBBERWORLD (PHILS.), INC., or JULIE YAP ONG, Petitioner, v.
NATIONAL LABOR RELATIONS COMMISSION et al,

 Petitioner is a domestic corporation which used to be in the business of

manufacturing footwear, bags and garments. It filed with the Securities and
Exchange Commission on November 24, 1994 a petition for suspension of
payments praying that it be declared in a state of suspension of payments and
that the SEC accordingly issue an order restraining its creditors from
enforcing their claims against petitioner corporation. It further prayed for the
 creation of a management committee as well as for the approval of the
proposed rehabilitation plan and memorandum of agreement between
petitioner corporation and its creditors.
 SEC favorably ruled on the petition for suspension of payments
 "Private respondents, who claim to be employees of petitioner corporation,
filed against petitioners [from] April to July 1995 their respective complaints
for illegal dismissal, unfair labor practice, damages and payment of separation
pay, retirement benefits, 13th month pay and service incentive pay.
 "Petitioners moved to suspend the proceedings in the above labor cases on the
strength of the SEC Order dated December 28, 1994. Likewise, petitioners
cited the rulings of BF Homes vs. Court of Appeals (190 SCRA 262),
Alemar's Sibal & Sons, Inc. vs. Elbinias (186 SCRA 94) and Bank of
Philippine Islands vs. Court of Appeals (229 SCRA 223) to support their
motion to suspend the proceedings in the labor cases.
 The Labor Arbiter denied the aforesaid motion holding that the injunction
contained in the SEC Order applied only to the enforcement of established
rights and did not include the suspension of proceedings involving claims
against petitioner which have yet to be ascertained. The Labor Arbiter further
held that the order of the SEC suspending all actions for claims against
petitioners does not cover the claims of private respondents in the labor cases
because said claims and the concomitant liability of petitioners still had to be
determined, thus carrying no dissipation of the assets of petitioners.
 "Petitioners appealed the adverse order of the Labor Arbiter to public
respondent which, in a Resolution dated April 26, 1996, dismissed the appeal
for lack of merit and, instead, sustained the rulings of the Labor Arbiter.
ISSUE:
"Whether or not the Respondent NLRC acted without or in excess of Jurisdiction or
with grave abuse of discretion amounting to lack of jurisdiction in affirming the
order of Labor Arbiter Voltaire A. Balitaan denying petitioners' motion to suspend
proceedings despite the Order of the Securities and Exchange Commission under
Sec. 6 (c) of P.D. 902-A directing the suspension of all actions against a company
under the first stages of insolvency proceedings."7

RULING:

The petition is meritorious.

Jurisprudence teaches us:

"xxx where the petition filed is one for declaration of a state of suspension of
payments due to a recognition of the inability to pay one's debts and liabilities, and
where the petitioning corporation either: (a) has sufficient property to cover all its
debts but foresees the impossibility of meeting them when they fall due (solvent but
illiquid) or (b) has no sufficient property (insolvent) but is under the management of
a rehabilitation receiver or a management committee, the applicable law is P.D. 902-
A pursuant to Sec. 5 par. (d) thereof. However, if the petitioning corporation has no
sufficient assets to cover its liabilities and is not under a rehabilitation receiver or a
management committee created under P.D. 902-A and does not seek merely to have
the payments of its debts suspended, but seeks a declaration of insolvency xxx the
applicable law is Act 1956 [The Insolvency Law] on voluntary insolvency,
xxx."8cräläwvirtualibräry

In the case at bar, Petitioner Rubberworld filed before the SEC a Petition for
Declaration of Suspension of Payments, as well as a propose rehabilitation plan. On
December 28, 1994, the SEC ordered the creation of a management committee and
the suspension of all actions for claim against Rubberworld. Clearly, the applicable
law is PD 902-A, as amended.

It is plain from the foregoing provisions of law that "upon the appointment [by,
the SEC] of a management committee or a rehabilitation receiver," all actions
for claims against the corporation pending before any court, tribunal or board
shall ipso jure be suspended.9 The justification for the automatic stay of all pending
actions for claims "is to enable the management committee or the rehabilitation
receiver to effectively exercise its/his powers free from any judicial or extra-judicial
interference that might unduly hinder or prevent the 'rescue' of the debtor company.
To allow such other actions to continue would only add to the burden of the
management committee or rehabilitation receiver, whose time, effort and resources
would be wasted in defending claims against the corporation instead of being
directed toward its restructuring and rehabilitation."

Parenthetically, the rehabilitation of a financially distressed corporation benefits its

employees, creditors, stockholders and, in a larger sense, the general public. And in
considering whether to rehabilitate or not, the SEC gives preference to the interest
of creditors, including employees. The reason that shareholders can recover their
investments only upon liquidation of' the corporation, and only if there are assets
remaining after all corporate creditors ire paid.11

 The solicitor general, representing Public Respondent NLRC, argues that the
rationale for an automatic stay will not be frustrated even if the NLRC
 proceeds with the disposition of these labor cases, because any favorable
judgment obtained by the private respondents would only establish their rights
as creditors. The solicitor general also contends that the assailed Resolutions
of the NLRC will not result in an undue preference for the assets of
Rubberworld, as the private respondents will still present their claims before
the management committee.12

We disagree. The law is clear: upon the creation of a management

committee or the appointment of rehabilitation receiver, all claims for
actions "shall be suspended accordingly." No exception in favor of labor
claims is mentioned in the law. Since the law makes no distinction or
exemptions, neither should this Court. Ubi lex non distinguit nec nos
distinguere debemos.13 Allowing labor cases to proceed clearly defeats the
purpose of the automatic stay and severely encumbers the management
committee's time and resources. The said committee would need to defend
against these suits, to the detriment of its primary and urgent duty to work
towards rehabilitating the corporation and making it viable again. To rule
otherwise would open the floodgates to other similarly situated claimants and
forestall if not defeat the rescue efforts. Besides, even if the NLRC awards the
claims of private respondents, as it did, its ruling could not be enforced as long
as the petitioner is under the management committee.

 The private respondents contend that automatic stay under PD 902-A is not
applicable to the instant case; otherwise, the preference granted to workers by
Article 110 of the Labor Code would be rendered ineffective.21 This
contention is misleading.

The preferential right of workers and employees under Article 110 of the
Labor Code may be invoked only upon the institution of insolvency or judicial
liquidation proceeding.22 Indeed, it is well-settled that "a declaration of
bankruptcy or a judicial liquidation must be present before preferences over
various money claims may be enforced."23 But debtors resort to preference of
credit -- giving preferred creditors the right to have their claims paid ahead of
those of other claimants -- only when their assets are insufficient to pay their
debts fully.24 The purpose of rehabilitation proceedings is precisely to enable
the company to gain a new lease on life and thereby allow creditors to be paid
their claims from its earnings. In insolvency proceedings, on the other hand,
the company stops operating, and the claims of creditors are satisfied from the
assets of the insolvent corporation. The present case involves the
rehabilitation, not the liquidation, of petitioner-corporation. Hence, the
 preference of credit granted to workers or employees under Article 110 of the
Labor Code is not applicable.

G.R. No. 125340 September 17, 1998

EMELITA NICARIO, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, MANCAO
SUPERMARKET, INC. AND/OR MANAGER, ANTONIO MANCAO,
respondents.

FACTS:

 Petitioner, Emelita Nicario, was employed with respondent company, Mancao

Supermarket, on June 6, 1986 as a salesgirl and was later on promoted as sales
supervisor. However, private respondent terminated her services on February
7, 1989.
 A complaint for illegal dismissal with prayer for backwages, wage
differential, service incentive leave gay, overtime pay, 13th month pay and
unpaid wages was filed by petitioner before the National Labor Relations
Commission, Sub-Regional Arbitration Branch X in Butuan City.
 On July 25, 1989, Labor Arbiter Amado M. Solamo dismissed the complaint
for lack of merit. Petitioner appealed to the National Labor Relations
Commission (NLRC), Fifth Division, Cagayan de Oro City.
 In a resolution dated July 25, 1989, the NLRC set aside the labor arbiter's
decision for lack of due process. It ruled that since petitioner assailed her
supposed signatures appearing on the payrolls presented by the company as a
forgery, the labor arbiter should not have merely depended on the xerox copies
of the payrolls, as submitted in evidence by the private respondent but ordered
a formal hearing on the issue.
 The Commission ordered the case remanded to the arbitration branch for
appropriate proceedings. The case was assigned to Labor Arbiter Marissa
Macaraig-Guillen.
 In a decision dated May 23, 1994, Labor Arbiter Macaraig-Guillen awarded
petitioner's claims for unpaid service incentive leave pay, 13th month pay,
overtime pay and rest day pay for the entire period of her-employment, but
dismissed her claims for holiday premium pay and unpaid salaries from
February 3 to 5, 1989.
  Not satisfied with the decision, private respondent appealed to the NLRC, and
in a resolution dated August 16, 1995, 4 the Commission affirmed in toto
Labor Arbiter Macaraig-Guillen's decision. Private respondent then filed a
motion for reconsideration. In a resolution dated December 21, 1995, public
respondent NLRC modified its earlier resolution by deleting the award for
overtime pay and ruling that private respondent Antonio Mancao is not jointly
and severally liable with Mancao Supermarket to pay petitioner the monetary
award adjudged.

ISSUE:

In her claim for payment of overtime pay, petitioner alleged that during her period
of employment, she worked twelve (12) hours a day from 7:30 a.m. to 7:30 p.m.,
thus rendering overtime work for four hours each day. Labor Arbiter Macaraig-
Guillen, in her decision dated May 23, 1994, awarded overtime pay to petitioner by
taking judicial notice of the fact that all Mancao establishments open at 8:00 a.m.
and close at 8:00 p.m. Upon appeal, this particular finding was affirmed by the
Commission. However, when private respondent filed a motion for reconsideration
from the resolution dated August 16, 1995, the NLRC modified its earlier ruling and
deleted the award for overtime pay. Public respondent NLRC instead gave credence
to the daily time records (DTRs) presented by respondent corporation showing that
petitioner, throughout her employment from June 6, 1986 to February 1989, worked
for only eight hours a day from 9:00 a.m. to 12:00 p.m. and 2:00 p.m. to 7:00 p.m.,
and did not render work on her rest days.

Public respondent's reliance on the daily time records submitted by private

respondent is misplaced. As aptly stated by the Solicitor General in his manifestation
in lieu of comment, the DTR's presented by respondent company are unreliable
based on the following observations:
a) the originals thereof were not presented in evidence; petitioner's allegation of
forgery should have prompted respondent to submit the same for inspection;
evidence wilfully suppressed would be adverse if produced (Sec. 3(e), Rule 131,
Rules of Court)
xxx xxx xxx
e) they would make it appear that petitioner has a two-hour rest period from 12:00
to 2:00 p.m., this is highly unusual for a store establishment because employees
should attend to customers almost every minute as well as contrary to the judicial
notice that no noon break is observed.
f) petitioner never reported earlier or later than 9:00 a.m., likewise, she never went
home earlier or later than 8:00 p.m.; all entries are suspiciously consistent. 7

Labor Arbiter Macaraig-Guillen, in taking judicial cognizance of the fact that private
respondent company opens twelve (12) hours a day, the same number of hours
worked by petitioner everyday, applied Rule 129, Section 2 of the Rules of Court
which provides that "a court may take judicial notice of matters which are of public
knowledge, or are capable of unquestionable demonstration, or ought to be known
because of their judicial functions." In awarding overtime pay to petitioner, the labor
arbiter ruled:
However, it is of judicial notice that all Mancao establishments open at eight a.m.
and close at eight p.m. with no noon break, so it is believable that employees
rendered 4-1/2 hours of overtime everyday, 7 days a week.8
Generally, findings of facts of quasi-judicial agencies like the NLRC are
accorded great respect and at times even finality if supported by substantial
evidence. 9 "Substantial evidence" is such amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion. However in
cases where there is a conflict between the factual findings of the NLRC and
the labor arbiter, a review of such factual findings is necessitated. 10
While private respondent company submitted the daily time records of the petitioner
to show that she rendered work for only eight (8) hours a day, it did not refute nor
seek to disprove the judicial notice taken by Labor Arbiter Macaraig-Guillen that
Mancao establishments, including the establishment where petitioner worked, opens
twelve hours a day, opening at 8:00 a.m. and closing at 8:00 p.m.
This Court, in previously evaluating the evidentiary value of daily time records,
especially those which show uniform entries with regard to the hours of work
rendered by an employee, has ruled that "such unvarying recording of a daily time
record is improbable and contrary to human experience. It is impossible for an
employee to arrive at the workplace and leave at exactly the same time, day in day
out. The uniformity and regularity of the entries are 'badges of untruthfulness and as
such indices of dubiety.' 11 The observations made by the Solicitor General regarding
the unreliability of the daily time records would therefore seem more convincing.
On the other hand, respondent company failed to present substantial evidence, other
than the disputed DTRs, to prove that petitioner indeed worked for only eight hours
a day.
It is a well-settled doctrine, that if doubts exist between the evidence presented by
the employer and the employee, the scales of justice must be tilted in favor of the
latter. It is a time-honored rule that in controversies between a laborer and his master,
doubts reasonably arising from the evidence, or in the interpretation of agreements
and writing should be resolved in the former's
favor. 12 The policy is to extend the doctrine to a greater number of employees who
can avail of the benefits under the law, which is in consonance with the avowed
policy of the State to give maximum aid and protection of labor. 13 This rule should
be applied in the case at bar, especially since the evidence presented by private
respondent company is not convincing. Accordingly, we uphold the finding that
petitioner rendered overtime work, entitling her to overtime pay.

G.R. No. L-69746-47 March 31, 1989

BANK OF THE PHILIPPINE ISLANDS EMPLOYEES UNION-ALU,
petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and BANK OF
THE PHILIPPINE ISLANDS, respondents.

FACTS:

FIRST CASE:

 In the course of their negotiations with the Bank of the Philippine Islands for
a new collective bargaining agreement to replace the one expiring on March
31, 1982, serious differences arose between the Bank of the Philippine Islands
Employees Union-Metro Manila and its mother federation, the Associated
Labor Unions.
 This prompted the former to manifest that it would henceforth negotiate alone
with BPI independently of ALU, which in turn, suspended all the elective
officers of BPIEU-Metro Manila led by its president, Carlito Reyes, who was
replaced by Rolando Valdez as acting president. In retaliation, Reyes and his
followers, claiming to be the legal and sole representatives of BPIEU-Metro
Manila, formally disaffiliated from ALU on November 16, 1982.
 As no agreement could be reached on a wide variety of economic issues, the
dispute between BPI and its employees was certified by the Minister of Labor
for compulsory arbitration and docketed in the National Labor Relations
Commission as Certified Cases Nos. 0279 and 0281. These cases were later
consolidated with the Manifestation and Motion for Interpleader and to
Consign Union Dues, which was filed by BPI in view of the conflicting claims
of the Reyes and Valdez groups for the said dues.
 On March 22, 1983, the NLRC resolved the bargaining deadlock by fixing the
wage increases and other economic benefits and ordering them to be
embodied in a new collective bargaining agreement to be concluded by
 BPIEU-Metro Manila and ALU with BPI. It did not decide the intra-union
dispute, however, holding that this was under the original jurisdiction of the
med-arbiter and the exclusive appellate jurisdiction of the Bureau of Labor
Relations.
Claiming to be the labor union referred to in the decision, the Reyes group filed a
petition with the Bureau of Labor Relations for direct certification on the ground of
its disaffiliation from ALU. This petition was denied in a decision dated June 13,
1983, where BLR Director Cresenciano Trajano held that the disaffiliation was
invalid because it was done beyond the freedom period. The decision ended with the
following disposition:
ACCORDINGLY, this Office hereby resolves not to give due course to the Bank of
the Philippine Islands Employees Unions' disaffiliation from the Associated Labor
Unions, as well as its petition for direct certification.
The Bank of the Philippine Islands, however, is hereby directed to sign jointly with
the Bank of the Philippine Islands Employees Union, petitioner herein, and the
Associated Labor Unions, the collective agreement decreed by the Commission on
22 March 1983 for the bank's Metropolitan Manila offices with the qualification that
the administration thereof shall be at the account of the Bank of the Philippine
Islands Employees Union. The dues sharing scheme being observed by BPIEU and
ALU shall be maintained. **
The Reyes group then came to this Court in a petition for certiorari, with a prayer
for a temporary restraining order, which we issued on July 11, 1983, to prevent the
BLR and the BPI from enforcing the above-cited decision. 5 We eventually
dismissed the petition for lack of merit and lifted the temporary restraining order on
February 16, 1985, later denying the motion for reconsideration on March 27, 1985.
6
Earlier, on April 28, 1983, the Valdez group (with ALU) had filed with the NLRC a
motion for a writ of execution commanding the BPI to negotiate the new collective
bargaining agreement with it. 7 In deference to our temporary restraining order in
the Reyes case, the NLRC held in abeyance its action on the motion. 8 The reaction
of the Valdez group was to seek relief from the Court on February 1, 1985, in a
petition for certiorari and injunction, now docketed as G.R. No. 69746. In this
petition, it is contended that, for not enforcing the said decision of March 22, 1983,
which has long become final and executory, the NLRC has acted with grave abuse
of discretion and so should be reversed.
The Court has studied the arguments of the parties and is unable to accept the
petitioner's contention. Our finding is that although the temporary restraining order
was strictly speaking addressed only to BPI and ALU, it was entirely proper for the
NLRC itself to abide by it, and not only out of respect for this Court. The decision
sought to be enforced called for the conclusion of a collective bargaining agreement
between BPI and the members of BPIEU-ALU. The question precisely before the
Court then was which as between the Reyes and Valdez groups should be recognized
as the legitimate representative of the employees in general to negotiate with BPI
NLRC had no jurisdiction to resolve that question. Obviously, its own decision of
March 23, 1983, could not be enforced until that question was first cleared.
More importantly, the issue has become moot and academic. In its decision dated
June 13, 1985, the Bureau of Labor Relations did hold that the disaffiliation of the
Reyes group from ALU was invalid because it was done beyond the freedom period,
that is within sixty days before the expiration of the collective bargaining agreement
on March 31, 1982. But that is all past and done now. That CBA was replaced by
another collective bargaining agreement concluded with BPI by the BPIEU-Metro
Manila after its disaffiliation valid this time because it was done within the freedom
period. 9 That agreement expired on March 31, 1985. In fact, even the agreement
concluded afterwards was itself to have expired on March 31, 1988, or almost a year
ago. 10
Second Issue
As a result of its merger with the Commercial Bank and Trust Company in 1981, the
BPI found it necessary to close the COMTRUST branch in Davao City and transfer
it to General Santos City. Pursuant to an earlier understanding, seven of the
employees of the said branch who were absorbed by BPI were transferred to the
General Santos City branch. However, three of them, namely Glenna, Ongkiko,
Arturo Napales, and Gregorio Gito, refused to move. After efforts to persuade them
failed, BPI dismissed them. This triggered a strike by the Davao Chapter of the
BPIEU-ALU which was followed by sympathy strikes by other local chapters.11
On October 19, 1983, the Minister of Labor sustained the transfer of the three
employees by the BPI and issued a return-to-work order. 12 This was ignored by the
striking workers, who continued to question the transfer. Another return-to-work
order was issued, this time by the NLRC, which was obeyed by the strikers upon
admission by the BPI of the three recalcitrant employees to their original stations in
Davao City. This was done pending the opening of the General Santos City
branch.13
Upon the inauguration of the said branch, BPI filed a motion to transfer the said
employees thereto as sanctioned earlier by the Minister of Labor. The situation was
complicated when another employee, Lennie Aninon who had earlier agreed to
transfer, now insisted on remaining in the Davao City branch. She too was included
in the motion, which was granted by the NLRC in its decision dated December 5,
1984. 14
Napales and Gito agreed to move to General Santos City, but the two lady
employees, to wit Ongkiko and Aninon remained adamant.
The petitioners contend that the decision of the NLRC of December 5, 1984,
directing the transfer of the four employees is also tainted with grave abuse of
discretion and should be set aside.
This matter need not detain us too long for the issue is hardly debatable. Indeed, the
right of the employer to transfer the employees in the interest of the efficient and
economic operation of its business cannot be seriously challenged. That is its
prerogative. The only limitation on the discretion of management in this regard is its
mala fides. The only time the employer cannot exercise this right is where it is
vitiated by improper motive and is merely a disguised attempt to remove or punish
the employee sought to be transferred.
Such improper motive has not been shown in the case at bar. On the contrary, it has
been established that the transfer was necessitated by the fact that the COMBANK
branch in Davao City had to be closed because it was just across the street from the
BPI branch. There was certainly no justification to maintain the two branches as they
both belonged now to the BPI. Moreover, it is not disputed that the lateral transfer
of the employees involved no demotion in their rank or salary or other benefits.
More to the point, it was expressly provided in the collective bargaining agreement
15 then existing that:
Section 1. The UNION and all its members hereby recognize that the Management
and operation of the business of the BANK which include, among others, the hiring
of employees, promotion, transfer and dismissals for just cause as well as the
maintenance of order, discipline and efficiency in its operations, are the sole and
exclusive right and prerogative of the BANK Management. . . .
Section 2. The BANK and the UNION agree that permanent transfer of a member
of the UNION shall be limited only to the offices of the BANK in the following
areas, unless the transfer to an office of the BANK in another area is requested or
agreed to by the member, to wit:
xxx
Member of the UNION's Davao City Chapter, Tagum Chapter, Digos Chapter to any
office of the BANK within the Southern Mindanao area.
It is not disputed that General Santos City is in the Southern Mindanao area.
G.R. Nos. 76842-44
Following the dismissal of its petition against the BLR the Reyes group, on April
26, 1985, filed a motion with the NLRC for the release to it of the union dues
consigned by BPI. 16 This motion was opposed by the Valdez group, which
subsequently filed its own petition for the payment to it of the said dues, on the
ground that it was the legitimate BPIEU recognized by the BLR. 17 In its decision
dated September 26, 1986, the NLRC declared as follows:
The disaffiliation of Reyes' group having been disapproved, the local union referred
to in Director Trajano's decision is none other than BPIEU-ALU (Valdez). It is the
union that is entitled to the disputed union dues deposited with this Commission.
WHEREFORE, judgment is hereby entered, ordering the release to BPIEU- ALU,
thru its Acting President or whoever is acting in that capacity, the portion of the
union dues deposited with this Commission pertaining to the local union, and to the
Associated Labor Unions the portion pertaining to the federation. ***
The Reyes group faults this decision and insists it is its union, as separately
constituted after its disaffiliation from ALU, that is entitled to receive the disputed
dues.
The petitioner is obviously in error. As the disaffiliation of the Reyes group was
disallowed by the BLR because it was done beyond the freedom period, the Reyes
group could not have claimed an Identity distinct from that of the original BPIEU-
Metro Manila. For the same reason, the Valdez group could not exclude the Reyes
group from the same BPIEU-Metro Manila because both of them were still part of
that original local union. In other words, BPIEU-Metro Manila then consisted of the
members of the two contending groups whose affiliation with ALU, as the mother
federation, remained intact.
In holding that the disputed dues were payable to "none other than BPIEU- ALU
(Valdez)," the NLRC could not have intended to exclude the Reyes group which
continued to be part of the BPIEU-Metro Manila because of the disapproval of its
disaffiliation from ALU. In referring to it as "BRIEF ALU (Valdez)," the NLRC
simply recognized Valdez as the lawful head of the entire BPIEU-Metro Manila,
including Reyes and his followers, and was holding that Valdez, not Reyes, was the
person authorized to receive the union's share of the dues.
In any event, this issue of dues-sharing has also become moot and academic now
because the Reyes group has finally succeeded in disaffiliating from ALU and is
now a separate and independent union. As such, it does not have to share with ALU
whatever union dues it may now collect from its members. But at the time this
petition was filed, the issue was very much alive and had to be resolved to determine
who were entitled to the union dues and in what proportion. The NLRC therefore
did not commit any grave abuse of discretion in rendering the challenged decision
as we have here interpreted it.
G.R. Nos. 76916-17
Following the promulgation by the NLRC of its decision of March 23, 1983, in
Certified Cases Nos. 0279 and 0281, private respondent Ignacio Lacsina filed a
motion for the entry of attorney's lien for legal services to be rendered by him as
counsel of BPIEU in the negotiation of the new collective bargaining agreement with
BPI.
The basis of this motion was a resolution dated August 26, 1982, providing as
follows:
RESOLUTION
WE, the undersigned members of the Bank of P.I. Employees Union, do hereby
resolve as follows:
1. To ratify and confirm the decision of our Union Board to engage the services of
Atty. Ignacio Lacsina as legal counsel in connection with the negotiation for a new
collective bargaining agreement with the Bank of the Philippine Islands to replace
the current one which has expired on March 31, 1982;
2. To undertake payment of attorney's fees to Atty. Lacsina in an amount equivalent
to five (5 %) per centum of the total economic benefits that may be secured through
such negotiation corresponding to the first year of the new collective bargaining
agreement;
3. To authorize the Bank of the Philippine Islands to check off said attomey's fees
from the first lump sum payment of benefits to the employees under the new
collected bargaining agreement and turn over the amount so collective to Atty.
Lacsina or his duly authorized representative. ****
On April 7, 1983, the Labor Arbiter issued an order directing the respondent bank to
check off the amount of 5 % of the total economic benefits due its employees under
the new collective bargaining agreement between the bank and the union
corresponding to the first year of effectivity thereof and to deliver the amount
collected to Atty. Lacsina or to his duly authorized representative. 18
Accordingly, BPI deducted the amount of P 200.00 from each of the employees who
had signed the authorization.
Upon learning about this, the petitioners challenged the said order, on the ground
that it was not authorized under the Labor Code. On April 15, 1983, the NLRC issued
a resolution setting aside the order and requiring BPI to safekeep the amounts sought
to be deducted "until the rights thereto of the interested parties shall have been
determined in appropriate proceedings. 19 Subsequently, the NLRC issued an en
banc resolution dated September 27, 1983, ordering the release to Lacsina of the
amounts deducted "except with respect to any portion thereof as to which no
individual signed authorization has been given by the members concerned or where
such authorization has been withdrawn. 20
The petitioners now impugn this order as contrary to the provisions and spirit of the
Labor Code. While conceding that Lacsina is entitled to payment for his legal
services, they argue that this must be made not by the individual workers directly,
as this is prohibited by law, but by the union itself from its own funds. In support of
this contention, they invoke Article 222(b) of the Labor Code, providing as follows:
Art. 222. Appearances and Fees.- . . .
(b) No attorney's fees, negotiation fees or similar charges of any kind arising from
any collective bargaining negotiations or conclusions of the collective agreement
shall be imposed on any individual member of the contracting union: Provided,
however, that attorney's fees may be charged against union funds in an amount to be
agreed upon by the parties. Any contract, agreement or arrangement of any sort to
the contrary shall be null and void.
They also cite the case of Pacific Banking Corporation v. Clave 21 where the
lawyer's fee was taken not from the total economic benefits received by the workers
but from the funds of their labor union.
The Court reads the afore-cited provision as prohibiting the payment of attorney's
fees only when it is effected through forced contributions from the workers from
their own funds as distinguished from the union funds. The purpose of the provision
is to prevent imposition on the workers of the duty to individually contribute their
respective shares in the fee to be paid the attorney for his services on behalf of the
union in its negotiations with the management. The obligation to pay the attorney's
fees belongs to the union and cannot be shunted to the workers as their direct
responsibility. Neither the lawyer nor the union itself may require the individual
workers to assume the obligation to pay the attorney's fees from their own pockets.
So categorical is this intent that the law also makes it clear that any agreement to the
contrary shall be null and void ab initio.
We see no such imposition in the case at bar. A reading of the above-cited resolution
will clearly show that the signatories thereof have not been in any manner compelled
to undertake the obligation they have there assumed. On the contrary it is plain that
they were voluntarily authorizing the check-off of the attorney's fees from their
payment of benefits and the turnover to Lacsina of the amounts deducted,
conformably to their agreement with him. There is no compulsion here. And
significantly, the authorized deductions affected only the workers who adopted and
signed the resolution and who were the only ones from whose benefits the
deductions were made by BPI. No similar deductions were taken from the other
workers who did not sign the resolution and so were not bound by it.
That only those who signed the resolution could be subjected to the authorized
deductions was recognized and made clear by the order itself of the NLRC. It was
there categorically declared that the check-off could not be made where "no
individual signed authorization has been given by the members concerned or where
such authorization has been withdrawn."
The Pacific Banking Corporation case is not applicable to the present case because
there was there no similar agreement as that entered into between Lacsina and the
signatories of the resolution in question. Absent such an agreement, there was no
question that the basic proscription in Article 222 would have to operate. It is
noteworthy, though, that the Court there impliedly recognized arrangements such as
the one at bar with the following significant observation:
Moreover, the case is covered squarely by the mandatory and explicit prescription
of Art. 222 which is another guarantee intended to protect the employee against
unwarranted practices that would diminish his compensation without his knowledge
and consent. (Emphasis supplied.)
A similar recognition was made in Galvadores v. Trajano, 22 where the payment of
the attorney's fees from the wages of the employees was not allowed because: "No
check-offs from any amount due to employees may be effected without individual
written authorities duly signed by the employees specifically stating the amount,
purpose and beneficiary of the deduction. The required individual authorizations in
this case are wanting."
Finally, we hold that the agreement in question is in every respect a valid contract
as it satisfies all the elements thereof and does not contravene law, morals, good
customs, public order, or public policy. On the contrary, it enables the workers to
avail themselves of the services of the lawyer of their choice and confidence under
terms mutually acceptable to the parties and, hopefully, also for their mutual benefit.
WHEREFORE, all the petitions in G.R. Nos. 69746-47, 76842-44, and 76916-17
are DISMISSED, with costs against the respective petitioners. It is so ordered.
Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.