Page 1 of 2

DEE CHUAN & SONS, INC. V. CIR, ET AL.

G.R. NO. L-2216, JANUARY 31, 1950

ISSUE: Whether the Court of Industrial Relations (CIR) may require that the majority of the
laborers to be employed by Dee Chuan & Songs, Inc. must be Filipinos in light of a pending
settlement by the court of a labor dispute between the company and its striking employees.

PETITIONER’S ARGUMENT: Petitioner argues that the Court of Industrial Relations cannot
intervene in questions of selection of employees and workers so as to impose unconstitutional
restrictions. Moreover, the restrictions of the number of aliens that nay be employed in any
business, occupation, trade or profession of any kind, is a denial of the equal protection of the
laws.

RESPONDENT'S ARGUMENT: Without the admonition of the Court, nothing could prevent
petitioner from hiring purely alien laborers, and there is no gainsaying the fact that further
conflict or dispute would naturally ensue. To cope with this contingency, and acting within the
powers granted by the law, the court, believing in the necessity and expediency of making patent
its desire to avoid probable and possible further misunderstanding between the parties, issued the
order.

INSTRUCTION LEARNED: The employer’s right to select employees is a right imbued with
public interest which may be properly interfered with through the State’s exercise of police
power. Such power is entrusted to the CIR. The CIR is within its authority to impose measures it
finds “necessary or expedient for the purpose of settling disputes or doing justice to the parties”.

RULING: Yes. It is proper for the CIR to order that the majority of the laborers to be employed
by Dee Chuan & Songs, Inc. must be Filipinos. The requirement that majority of the laborers to
be employed should be Filipinos is certain not arbitrary, unreasonable or unjust. The petitioner's
right to employ labor or to make contract with respect thereto is not unreasonably curtailed and
its interest is not jeopardized. We take it that the nationality of the additional laborers to be taken
in is immaterial to the petitioner. In its application for permission to employ twelve temporary
laborers it expressly says that these could be Filipinos or Chinese. On the face of this statement,
assuming the same to be sincere, the petitioner objection to the condition imposed by the court
would appear to be academic and a trifle. Petitioner should not so much as pretend that the hiring
of additional laborers is its prerogative as a matter of right. It seems to be conceded that during
the pendency of the dispute the petitioner could employ temporary laborers only with the
permission of the Court of Industrial Relations. The granting of the application thus lies within
 Page 2 of 2

the sound judgment of the court, and if the court could turn it down entirely, as we think it could,
its authority to quality the permission should be undeniable, provided only that the qualification
is not arbitrary, against law, morals, or established public policy, which it is not; it is an
expedient and emergency step designed to relieve petitioner's own difficulties. Also important to
remember is that it is not compulsory on petitioner's part to take advantage of the order. Being a
permute petitioner is the sole judge of whether it should take the order as it is, or leave it if it
does not suit its interest to hire new laborers other than Chinese.

RATIO: The State, in the exercise of its police power and in the protection labor, may validly
curtail the management’s prerogative in terms of selection of its employees.
 Page 3 of 2

LORENZO TAÑADA, ET AL., V. JUAN TUVERA, ET AL., G.R. NO.

L-63915, APRIL 24, 1985

ISSUE: Whether publication is mandatory for the effectivity of laws.

PETITIONER’S ARGUMENT: The people have the right to be informed on matters of public
concern, a right recognized in Section 6, Article IV of the 1973 Philippine Constitution. Thus,
before a law may become effective and before it may be enforced, it must be published in the
Official Gazette or otherwise effectively promulgated.

RESPONDENT'S ARGUMENT: Publication in the Official Gazette is necessary only in those

cases where the legislation itself does not provide for its effectivity date, for then the date of
publication is material for determining its date of effectivity, which is the fifteenth day following
its publication-but not when the law itself provides for the date when it goes into effect.

INSTRUCTION LEARNED: Procedural due process requires that a law, before it becomes
effective and before it may be enforced, must first be published. Moreover, the legal maxim
‘ignorantia legis non excusat’, will find no application with the required publication of laws
because it would be the “height of injustice to punish or otherwise burden a citizen for the
transgression of a law of which he had no notice whatsoever, not even a constructive one”.

RULING: Yes. The publication of all legislations "of a public nature" or "of general
applicability" is mandated by law as a requirement of due process. Obviously, laws that provide
for fines, forfeitures or penalties for their violation or otherwise impose a burden on the people,
such as tax and revenue measures, fall within this category. It is a rule of law that before a person
may be bound by law, he must first be officially and specifically informed of its contents.

RATIO: Publication is an essential requisite for laws to take effect as part of due process.
 Page 4 of 2

PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., V. RUBEN TORRES,

ET AL.
G.R. NO. 101279 AUGUST 6, 1992

ISSUE:
a. Whether the department order and POEA circulars temporarily suspending the recruitment by
private employment agencies of Filipino domestic helpers for Hong Kong and vesting in the
DOLE, through the POEA, the task of processing and deploying such workers are in excess of
the rule-making authority of such agencies.
b. Whether the department order and POEA circulars are enforceable.

PETITIONER’S ARGUMENT: The assailed DOLE and POEA circulars are contrary to the
Constitution, unreasonable, unfair and oppressive Moreover, the requirements of publication
were not complied with.

RESPONDENT'S ARGUMENT: The department order and POEA circulars merely restricted
the scope of petitioner's business operations by excluding recruitment and deployment of
domestic helpers for Hong Kong until after the establishment of the "mechanisms" that will
enhance the protection of Filipino domestic helpers going to Hong Kong. Thus, other than the
recruitment and deployment of Filipino domestic helpers for Hongkong, petitioner may still
deploy other types of Filipino workers for Hongkong and other countries. Moreover, the assailed
circulars are reasonable, valid and justified under the general welfare clause of the Constitution,
since the recruitment and deployment business, as it is conducted today, is affected with public
interest.

INSTRUCTION LEARNED: The grant of quasi-legislative and quasi-judicial powers to

administrative bodies with expertise on areas within their coverage is demanded by the growing
complexities of modern society. Since these are specialized bodies, the administrative agencies
are in better position to resolve problems within the areas of their expertise than from the
legislature itself or the courts. In this connection, the powers may be exercised through the
issuance of circulars or rules and regulations. However, the requirement of publication must be
complied if the purpose of the administrative issuance is to enforce or implement existing law
pursuant to a valid delegation. On the other hand, interpretative regulations and those merely
internal in nature, that is, regulating only the personnel of the administrative agency and not the
public, need not be published. Neither is publication required of the so-called letters of
instructions issued by administrative superiors concerning the rules or guidelines to be followed
 Page 5 of 2

by their subordinates in the performance of their duties; and publication must be in full or it is no
publication at all since its purpose is to inform the public of the content of the laws.

RULING:
a. Yes. It is within the rule-making authority of DOLE and POEA.
b. No. The publication requirements were not complied with.

RATIO: DOLE and POEA have been granted by law the power to restrict and regulate
recruitment and placement activities. In doing so, they may issue administrative rules and
regulations in pursuance of their regulatory power. However, these issuances require publication
in order to be valid if their purpose is to enforce or implement existing law pursuant also to a
valid delegation. On the other hand, those interpretative regulations and those merely internal in
nature, that is, regulating only the personnel of the administrative agency and not the public,
need not be published. Neither is publication required of the so-called letters of instructions
issued by administrative superiors concerning the rules or guidelines to be followed by their
subordinates in the performance of their duties; and publication must be in full or it is no
publication at all since its purpose is to inform the public of the content of the laws.
 Page 6 of 2

PAGPALAIN HAULERS VS CRESENCIA TRAJANO

GR NO. 133215 JULY 15, 1999

ISSUE: Whether a regulation issued is valid if it does not conform to earlier regulations or
jurisprudence interpreting it.

PETITIONER’S ARGUMENT: The petition for certification election filed by ILO-PHILS is

invalid because it does not conform with the standards set forth by jurisprudence. In the cases of
Protection and Progressive, the Court ruled that non-submission of books certified by the proper
officer of the union is a ground to oppose a petitioner for certification.

RESPONDENT'S ARGUMENT: The rules set forth in the cases of Protection and Progressive
no longer apply since Department Order No. 9, which dispenses the requirement of certification
of books by the proper officer of the union, is now the controlling regulation.

INSTRUCTION LEARNED: The Labor Code expressly vests the Department of Labor the
authority to issue regulations interpreting the Labor Code, provided that the regulation is
confined within the provisions of the law. Jurisprudence interpreting orders is valid until a new
regulation is laid down by the Department.

RULING: Yes. Department Order No. 9 is valid and binding. This is true even if it dispenses to
some requirements laid down by jurisprudence in interpreting previous orders. More so, the
requirement of the submission of books certified by the proper union officer is not set forth in the
Labor Code. In dispensing with the requirement, DO No. 9 does not abrogate the law. As a
matter of fact, it strictly applied only those stated in the law.

RATIO: The Department of Labor may repeal, amend or supersede prior regulations issued as
long as it is still within the spirit of the Code. This power to issue rules and regulations
implementing the Labor Code is expressly vested by the law itself to the Department. Moreover,
its exercise remains valid as long as it is within the confines of the law.
 Page 7 of 2

SECRETARY OF LABOR VS PANAY VETERAN’S SECURITY AND

INVESTIGATION AGENCY
GR NO. 167708 AUGUST 22, 2008

ISSUE: Whether the rules of procedure of the NLRC may be applied to cases before the
Secretary of Labor.

PETITIONER’S ARGUMENT: Failure of Panay to file an appeal bond equivalent to the

monetary award prayed for did not perfect its appeal. Under Article 128 of the Labor Code,
appeals may only be perfected upon filing of an appeal bond equivalent to the monetary award
appealed from.

RESPONDENT'S ARGUMENT: The rules of the NLRC, which allows grant of an appeal
bond lesser than the monetary award appealed from, also applies to proceedings before the
Secretary of Labor. Thus, Panay’s filing of the appeal bond lesser than the monetary award
perfected its appeal.

INSTRUCTION LEARNED: Cases before the NLRC and the Secretary of Labor followfollow
different procedures. The NLRC is empowered to create its rules of procedure in the same
manner that the Secretary likewise may promulgate its own.

RULING: No. The appeal was not perfected on time. Even if the NLRC rules allow the
reduction of the appeal bond, the said rule does not apply to the Secretary of Labor. Each has
their own set of rules and the parties are obliged to respect each distinct rules of procedure. Only
the Rules of Court may be applied suppletorily to the disposition of labor cases.

RATIO: The proceedings before the NLRC are governed by its own rules of procedure and the
proceedings before the Secretary of Labor are also governed by its own since each is
independent within its own sphere. Their jurisdiction is limited to that provided by law, and the
proceedings in either tribunal does not empower to arbitrator to apply the rules of another
tribunal.
 Page 8 of 2

MATERNITY CHILDREN’S HOSPITAL VS SECRETARY OF LABOR

GR NO. 78909 JUNE 30, 1989
ISSUE: Whether cases cognizable by Labor Arbiters may also be taken cognizance of by the
Regional Director.

PETITIONER’S ARGUMENT: The Regional Director has no jurisdiction over complaints for
underpayment and payment of ECOLAs. Article 217 of the Labor Code expressly provides that
all money claims from workers, including non-payment or underpayment of wages, are under the
sole and exclusive jurisdiction of the Labor Arbiter.

RESPONDENT'S ARGUMENT: The Regional Director may assume jurisdiction over money
claims by workers. Executive Order 11 authorizes him to order and administer, after notice and
hearing, compliance with labor standards provisions, among such issue are money claims.

INSTRUCTION LEARNED: In pursuance of the principle of social justice, the State is

obligated to expedite the payment of money claims of workers because the money belongs to
them.

RULING: Yes. The Regional Director has jurisdiction over money claims even if such claims
may also be recognized by the Labor Arbiter. Despite the jurisdiction over money claims
bouncing into different labor agencies and tribunals, the intention of several amendments to the
jurisdiction over money claims is that it shall always be cognizable by the Regional Director.

RATIO: In promoting social justice, labor authorities, as much as practicable, must give the
workers their dues in a swift manner. Under the jurisdiction of the Regional Director, litigation is
dispensed with and the exercise of his/her visitorial powers may already give rise to the granting
of money claims to the employees. If such case is mandated to undergo litigation before the
Labor Arbiter, the workers will waste time and resources in order to claim what should be
rightfully his/hers.
 Page 9 of 2

UNION OF FILIPRO EMPLOYEES V. VIVAR, JR.

205 SCRA 200

ISSUE: Whether employees must return, on the basis of the principle of solution indebiti, the
alleged excessive salary since the divisor in computing for the daily rate, according to the
employer, must be 261 and not 251 since the 10 days of holiday was paid

PETITIONER’S ARGUMENT: “The arbitrator's order to change the divisor from 251 to 261
days would result in a lower daily rate which is violative of the prohibition on non-diminution of
benefits found in Article 100 of the Labor Code.”

RESPONDENT'S ARGUMENT: The employees must return the excessive salary by virtue of
solutio indebiti, or payment by mistake, due to its use of 251 days.

INSTRUCTION LEARNED: Article 4 of the Labor Code mandates that all doubts in the
implementation and interpretation of the code, including its implementing rules and regulations,
shall be resolved in favor of labor.

RULING: No. The employees should not return the alleged excessive salary. Respondent
Nestle's invocation of solutio indebiti, or payment by mistake, due to its use of 251 days as
divisor must fail in light of the Labor Code mandate that "all doubts in the implementation and
interpretation of this Code, including its implementing rules and regulations, shall be resolved in
favor of labor." (Article 4). Moreover, prior to September 1, 1980, when the company was on a
6-day working schedule, the divisor used by the company was 303, indicating that the 10
holidays were likewise not paid. When Filipro shifted to a 5-day working schedule on September
1, 1980, it had the chance to rectify its error, if ever there was one but did not do so. It is now too
late to allege payment by mistake.”

RATIO: All doubts must be resolved in favor of labor pursuant to Article 4 of the Labor Code.
 Page 10 of 2

FEM’S ELEGANCE LODGING HOUSE, INC. V. HON. MURILLO

G.R. NO. 117442-43 11 JANUARY 1995

ISSUE: Whether failure to observe the rules of procedure may be allowed to defeat the
substantive rights of the worker in labor cases.

PETITIONER’S ARGUMENT: FEM claimed that the Labor Arbiter should have cited
respondents in contempt for failure to observe the rules of procedure in filing the latter’s position
paper.

RESPONDENT'S ARGUMENT: The Labor Arbiter held that a fifteen-day delay in filing the
position paper was not unreasonable considering that the substantive rights of litigants should not
be sacrificed on the grounds of technicality.

INSTRUCTION LEARNED: In a labor case, failure to submit position papers on time is only a
technical defect that is not a ground for dismissal. Substantive rights of litigants should not be
sacrificed by mere technicality. When there’s doubt in the interpretation of a provision of the
law, it should be resolved in favor of labor. It is the State’s policy to afford full protection to
labor whenever conflict arises between them and management.

RULING: No. The delay of private respondents in the submission of their position paper is a
procedural flaw, and the admission thereof is within the discretion of the Labor Arbiter. Well-
settled is the rule that technical rules of procedure are not binding in labor cases, for procedural
lapses may be disregarded in the interest of substantial justice, particularly where labor matters
are concerned. Article 4 of the Labor Code of the Philippines resolves that all doubts in the
interpretation of the law and its implementing rules and regulations shall be construed in favor of
labor. Where conflicting interests between labor and management exist, the State's basic policy is
to extend protection to Labor. The fact that the LA reviewed their position papers and FEM’s
motion for reconsideration belies the allegation of denial of due process of law.

RATIO: Technical rules of procedure are not binding in labor cases, for procedural lapses may
be disregarded in the interest of substantial justice. This is consistent with Article 4 of that Labor
Code which provides that: “all doubts in the interpretation of the law and its implementing rules
and regulations shall be construed in favor of labor”
 Page 11 of 2

Villa Vert v. ECC and GSIS

G.R. No. L-48605 December 14, 1981
ISSUE: Whether in compensation cases, the theory “aggravation” or reasonable work
connection is sufficient to sustain a claim despite failure to establish by evidence that the cause
of death of the employee is directly brought about (direct causal link) by the nature of his
employment.

PETITIONER’S ARGUMENT: The cause of death of the employee, acute hemorrhagic

pancreatitis, was a result of the nature of his employment.

RESPONDENT'S ARGUMENT: GSIS and ECC denied the claim for compensation on the
ground that the petitioner did not present evidence that the illness of Marcelino N. Villavert,
acute hemorrhagic pancreatitis, was caused or aggravated by the nature of his duties as employee
of the Philippine Constabulary.

INSTRUCTION LEARNED: In compensation cases, a reasonable work connection is all that

is required to sustain the claim of the deceased’s relatives. The law does not require the claimant
to establish a direct causal link between the cause of death and the nature of the employee’s
work. Moreover, Article 4 of the Labor Code commands that when there is doubt in the
interpretation and implementation of the Code, including its IRR, it should be resolved in favor
of labor.

RULING: Yes. The Medico Legal Officer of the National Bureau of Investigation stated that the
exact cause of acute hemorrhagic pancreatitis is still unknown despite extensive researches in
this field, although most research data are agreed that physical and mental stresses are strong
causal factors in the development of the disease. From the facts of record, it is clear that
Marcelino N. Villavert died of acute hemorrhagic pancreatitis which was directly caused or at
least aggravated by the duties he performed as coder verifier, computer operator and clerk typist
of the Philippine Constabulary. There is no evidence at all that Marcelino N. Villavert had a
"bout of alcoholic intoxication" shortly before he died. Neither is there a showing that he used
drugs.

RATIO: In compensation cases, it is not required to show a direct causal link between the cause
of death of the employee and the nature of his work. A reasonable work connection or
“aggravation” is sufficient. This is consistent with the policy embraced under Article 4 of the
Labor Code and the Constitutional mandate of giving protection to labor.
 Page 12 of 2

RUTH JIMENEZ, Petitioner, v. EMPLOYEES’ COMPENSATION COMMISSION and

GOVERNMENT SERVICE INSURANCE SYSTEM, Respondents.
G.R. No. 58176 March 23, 1984

ISSUE: Whether it has been conclusively established, through scientific studies, that smoking
causes cancer.

PETITIONER’S ARGUMENT: The petitioner contends that her husband’s death is

compensable and that respondent Commission erred in not taking into consideration the
uncontroverted circumstance that when the deceased entered into the Philippine Constabulary, he
was found to be physically and mentally healthy. She farther contends that as a soldier, her
husband’s work has always been in the field where exposure to the elements, dust and dirt,
fatigue and lack of sleep and rest was the rule rather than the exception. The nature of work of a
soldier being to protect life and property of citizens, he was subject to call at any time of day or
night.

RESPONDENT'S ARGUMENT: Respondent Commission maintains that there is evidence of

the deceased to be a smoker. According to the respondent, it has been demonstrated medically
that the more cigarettes a person smokes, the greater the risk of developing lung cancer". In
short, the respondent alleges that the deceased was responsible to a large degree for his having
contracted bronchogenic carcinoma that led to his demise. It insists that deceased was a smoker
and the logical conclusion is that the cause of the fatal lung cancer could only be smoking which
cannot in any way be justified as work-connected. Hence, the petitioner’s husband’s death is not
compensable.

INSTRUCTION LEARNED: In compensation cases, the law merely requires a reasonable

work-connection or that the risk of contracting the disease is increased by the working
conditions, not a direct causal link between the disease and the nature of the job of the worker.
Moreover, in compensation cases, strict rules of evidence are not applicable. What is merely
required is substantial evidence to support the claim. This is consistent with the avowed policy of
the State as mandated by the Constitution (Article II, Section 9) to give maximum aid and
protection to labor, and as restated in Article 4 of the new Labor Code which provides that ‘all
doubts in the implementation of the provisions of this Code, including its implementing rules and
regulations shall be resolved in favor of labor.’
 Page 13 of 2

RULING: No. The Court ruled in the case of Dator v. Employees Compensation Commission
that "until now, the cause of cancer is not known." The causes of the illness of the deceased are
still unknown and may embrace such diverse origins which even the medical sciences cannot tell
with reasonable certainty. Indeed, scientists attending the World Genetic Congress in New Delhi,
India, have warned that about 25,000 chemicals used around the world could potentially cause
cancer, and Lawrence Fishbein of the U.S. National Center for Toxilogical Research pointed out
that humans were daily exposed to literally hundreds of chemical agents via air, food,
medication, both in their industrial home and environments (Evening Post, December 16, 1983,
p. 3, cols. 2-3).
The theory of increased risk is applicable in the instant case. The Court had the occasion
to interpret the theory of increased risk in the case of Cristobal v. Employees Compensation
Commission :
"To establish compensability under the said theory, the claimant must show proof of
work-connection. Impliedly, the degree of proof required is merely substantial evidence, which
means ‘such relevant evidence to support a decision’ (Ang Tibay v. The Court of Industrial
Relations and National Labor Union, Inc.) or clear and convincing evidence. In this connection,
it must be pointed out that the strict rules of evidence are not applicable in claims for
compensation. Respondents however insist on evidence which would establish direct causal
relation between the disease rectal cancer and the employment of the deceased. Such a strict
requirement which even medical experts cannot support considering the uncertainty of the nature
of the disease would negate the principle of the liberality in the matter of evidence, Apparently,
what the law merely requires is a reasonable work-connection and not a direct causal relation.
This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of
the law as embodied in Article 4 of the new Labor Code which states that ‘all doubts in the
implementation of the provisions of this Code, including its implementing rules and regulations
shall be resolved in favor of labor.’

RATIO: In compensation cases, a reasonable work-connection (not direct causal connection) is

all that is required, or that the risk of contracting the disease is increased by the working
conditions.
 Page 14 of 2

ROSALINA PEREZ ABELLA/HDA. DANAO-RAMONA, Petitioners, v. THE

HONORABLE NATIONAL LABOR RELATIONS COMMISSION, ROMEO QUITCO
and RICARDO DIONELE, SR., Respondents
G.R. No. 71813 July 20, 1987
ISSUE: Whether Article 284 of the Labor Code, as amended, must be applied instead of Article
272 of the law, in order to justify the payment of separation pay of long-time employees whose
services were terminated due to cessation of business.

PETITIONER’S ARGUMENT: Petitioner claims that since her lease agreement had already
expired, she is not liable for payment of separation pay and such expiration constitutes a
complete cessation business operation, a just cause for employment termination under Article
272 of the Labor Code.

RESPONDENT'S ARGUMENT: The applicable law which justifies the claim for separation
pay of the workers is Article 284 of the Labor Code, as amended by BP 130. Article 272 of the
same Code invoked by the petitioner pertains to the just causes of termination. Respondent does
not argue the justification of the termination of employment but applied Article 284 as amended,
which provides for the rights of the employees under the circumstances of termination.

INSTRUCTION LEARNED: The provision of the law which will provide maximum
protection to the worker must be applied in order to give life and meaning to the Constitutional
mandate of giving protection to labor, and pursuant to under Article 4 of the Labor Code which
commands that all doubts should be resolved in favor of labor.

RULING: Yes. The purpose of Article 284 as amended is obvious — the protection of the
workers whose employment is terminated because of the closure of establishment and reduction
of personnel. Without said law, employees like private respondents in the case at bar will lose the
benefits to which they are entitled — for the thirty three years of service in the case of Dionele
and fourteen years in the case of Quitco. Although they were absorbed by the new management
of the hacienda, in the absence of any showing that the latter has assumed the responsibilities of
the former employer, they will be considered as new employees and the years of service behind
them would amount to nothing.
It is well-settled that in the implementation and interpretation of the provisions of the
Labor Code and its implementing regulations, the workingman’s welfare should be the
primordial and paramount consideration. (Volshel Labor Union v. Bureau of Labor Relations,
137 SCRA 43 [1985]). It is the kind of interpretation which gives meaning and substance to the
liberal and compassionate spirit of the law as provided for in Article 4 of the New Labor Code
 Page 15 of 2

which states that `all doubts in the implementation and interpretation of the provisions of this
Code including its implementing rules and regulations shall be resolved in favor of labor."

RATIO: If there are two or more applicable provisions of law relative to a labor case, that
provision which provides maximum protection to labor must be applied.
 Page 16 of 2

JOSE SONGCO, ROMEO CIPRES, and AMANCIO MANUEL, petitioners,

vs
NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), LABOR
ARBITER FLAVIO AGUAS, and F.E. ZUELLIG (M), INC., respondents.
G.R. No. L-50999 March 23, 1990
ISSUE: Whether sales commissions may be considered part of salary for the purpose of
computing separation pay, when there appears to be an ambiguity relative thereto in the
provisions of the CBA, and the Labor Code and its implementing rules.

PETITIONER’S ARGUMENT: Petitioners' hold that in arriving at the correct and legal
amount of separation pay due them, whether under the Labor Code or the CBA, their basic
salary, earned sales commissions and allowances should be added together. They cited Article
97(f) of the Labor Code which includes commission as part on one's salary, to wit:
(f) 'Wage' paid to any employee shall mean the remuneration or earnings, however designated,
capable of being expressed in terms of money, whether fixed or ascertained on a time, task,
piece, or commission basis, or other method of calculating the same, which is payable by an
employer to an employee under a written or unwritten contract of employment for work done or
to be done, or for services rendered or to be rendered, and includes the fair and reasonable value,
as determined by the Secretary of Labor, of board, lodging, or other facilities customarily
furnished by the employer to the employee. 'Fair reasonable value' shall not include any profit to
the employer or to any person affiliated with the employer.

RESPONDENT'S ARGUMENT: Respondent argues that if it were really the intention of the
Labor Code as well as its implementing rules to include commission in the computation of
separation pay, it could have explicitly said so in clear and unequivocal terms. Furthermore, in
the definition of the term "wage", "commission" is used only as one of the features or
designations attached to the word remuneration or earnings.

INSTRUCTION LEARNED: Sales commissions form part of the salary for purposes of
computing separation pay. The term ‘wage’ and ‘salary’ are synonymous since to hold otherwise
will lead to an absurd situation where those employees who earn through commission basis will
not receive separation pay. Such conclusion is contrary to the purpose of separation pay and the
mandate of the law to give protection to labor. Instead, if there are ambiguities relative thereto in
the CBA or the Labor Code and its implementing rules, Article 4 of the Labor Code which states
that "all doubts in the implementation and interpretation of the provisions of the Labor Code
including its implementing rules and regulations shall be resolved in favor of labor" must be
applied.
 Page 17 of 2

RULING: Yes. This has been settled in the case of Santos v. NLRC, where the Court ruled that
"in the computation of backwages and separation pay, account must be taken not only of the
basic salary of petitioner but also of her transportation and emergency living allowances."
The ambiguity between Article 97(f), which defines the term 'wage' and Article XIV of
the Collective Bargaining Agreement, Article 284 of the Labor Code and Sections 9(b) and 10 of
the Implementing Rules, which mention the terms "pay" and "salary", is more apparent than real.
Broadly, the word "salary" means a recompense or consideration made to a person for his pains
or industry in another man's business. Whether it be derived from "salarium," or more fancifully
from "sal," the pay of the Roman soldier, it carries with it the fundamental idea of compensation
for services rendered. Indeed, there is eminent authority for holding that the words "wages" and
"salary" are in essence synonymous (Words and Phrases, Vol. 38 Permanent Edition).
Commission is the recompense, compensation or reward of an agent, salesman, executor,
trustees, receiver, factor, broker or bailee, when the same is calculated as a percentage on the
amount of his transactions or on the profit to the principal (Black's Law Dictionary). The nature
of the work of a salesman and the reason for such type of remuneration for services rendered
demonstrate clearly that commission are part of petitioners' wage or salary. Some salesmen do
not receive any basic salary but depend on commissions and allowances or commissions alone,
are part of petitioners' wage or salary. If we adopt the opposite view that commissions, do not
form part of wage or salary, then, in effect, We will be saying that this kind of salesmen do not
receive any salary and therefore, not entitled to separation pay in the event of discharge from
employment.
In carrying out and interpreting the Labor Code's provisions and its implementing
regulations, the workingman's welfare should be the primordial and paramount consideration.
This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of
the law as provided for in Article 4 of the Labor Code which states that "all doubts in the
implementation and interpretation of the provisions of the Labor Code including its
implementing rules and regulations shall be resolved in favor of labor".

RATIO: Narrow interpretations of the provisions of the CBA, or the Labor Code and its
implementing rules should not be allowed to defeat the liberal spirit of our labor laws. In case of
doubt, ambiguities must be resolved in favor of labor as embodied under Article 4 of the Labor
Code.
 Page 18 of 2

ILOILO DOCK & ENGINEERING CO., V. WORKMEN'S COMPENSATION

COMMISSION, ET AL.
G.R. NO. L-26341 NOVEMBER 27, 1968

ISSUE: Whether the employer is liable for the death of an employee who was shot dead couple
of minutes after dismissal from overtime work, and few meters from the employer's main gate.

PETITIONER’S ARGUMENT: The place where the incident happened was a public road, not
less than twenty meters away from the main gate of the compound and therefore not proximate to
or in the immediate vicinity of the place of work. Also, if IDECO did own the road, then it would
have fenced it, and place its main gate at the other end of the road where it meets the public
highway.

RESPONDENT'S ARGUMENT: The road is of a private character which was obviously

exploited by IDECO for the purpose of its own business to such an extent as to make it to all
intents and purposes an extension of its premises, such that the shooting of the deceased may be
considered to have taken place on the premises, and therefore within the employment. Moreover,
IDECO allowed its name to be used in connection with the private road for the ingress and
egress of the employees but it did not apparently take the necessary precaution to make it safe for
its employees by employing security guards.

INSTRUCTION LEARNED: Social legislations, such as Workmen's Compensation Act, are

designed to afford relief to workers. Thus, they must be liberally construed to attain the purpose
for which they were enacted.

RULING: Yes. There are two tests to ascertain whether or not the employer has liability for the
injury sustained by its employees. First is if the injury "arose out of” which refers to the origin or
cause of the injury which is descriptive of its character, and two is if the injury happened “in the
course of” which refers to the time, place and circumstances under which the injury took place.
The road where Pablo was killed is in very close proximity to the employer's premises. It is an
"access area" so clearly related to the employer's premises as to be fairly treated as a part of the
employer's premises, which IDECO used extensively in pursuit of its business. IDECO was then
under obligation to keep the place safe for its employees. Safe, that is, against dangers that the
employees might encounter therein, one of these dangers being assault by third persons. Having
failed to take the proper security measures over the said area which it controls, the IDECO is
liable for injuries suffered by an employee resulting in his death.
 Page 19 of 2

RATIO: The employer has the obligation to ensure the safety of its employees not only within
its premises but also of the area within of its immediate control.
 Page 20 of 2

ROSALINDA PAREDES V. FEED THE CHILDREN PHILIPPINES, INC., ET AL.

G.R. NO. 184397 SEPTEMBER 09, 2015

ISSUE: Whether a conflict in the findings of Labor Arbiter (LA) and the NLRC on the alleged
constructive dismissal of the employee should be resolved in favor of labor.

PETITIONER’S ARGUMENT: The overbearing and prejudiced attitude towards her by the
employer and the impleaded individuals rendered her continued employment impossible,
unreasonable or unlikely.

RESPONDENT'S ARGUMENT: It is highly unlikely and incredible for someone of

petitioner's position and educational attainment to so easily succumb to individual respondents'
alleged harassment without defending herself.

INSTRUCTION LEARNED: “The law serves to equalize the unequal.” The labor force is a
constitutionally protected class because of the inequality between capital and labor. However, the
level of protection to labor should vary from case to case; otherwise, the state might appear to be
too paternalistic in affording protection to labor. In this light, protection of the rights of the
workers should not come at the oppression or self-destruction of the employer. Social justice
does not mean that every labor dispute shall automatically be decided in favor of labor. Thus, the
Constitution and the law equally recognize the employer's right and prerogative to manage its
operation according to reasonable standards and norms of fair play.”

RULING: No. Not all conflicts are resolved in favor of labor. In rare instances when the factual
findings of the LA and the NLRC are conflicting, the reviewing court may delve into the records
and examine for itself the questioned findings.
Constructive dismissal occurs when there is cessation of work because continued
employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank
or diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an
employer becomes unbearable to the employee. The test is whether a reasonable person in the
employee's position would have felt compelled to give up his position under the circumstances.
In this case, petitioner cannot be deemed constructively dismissed. She failed to present clear and
positive evidence that respondent FTCP, through its Board of Trustees, committed acts of
discrimination, insensibility, or disdain towards her which rendered her continued employment
unbearable or forced her to terminate her employment from the respondent. As settled, bare
allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be
given credence.
 Page 21 of 2

RATIO: A claim of constructive dismissal by an employee must be proved by clear and

convincing evidence.
 Page 22 of 2

STERLING PAPER PRODUCTS ENTERPRISES, INC. V. KMM-KATIPUNAN ET AL.

G.R. NO. 221493 AUGUST 2, 2017
ISSUE: Whether the dismissal of an employee based on his utterance of foul and abusive
language against his superior constitute serious misconduct which merits dismissal.

PETITIONER’S ARGUMENT: The utterance of foul and abusive language against his
supervisor, demonstrating a dirty finger, and defiance to perform his duties, motivated by
wrongful intent, constitute serious misconduct. Also, the employee’s failure to participate in the
administrative investigation conducted on his infraction was a clear manifestation of his lack of
discipline. Moreover, the employer has free rein and enjoys wide latitude of discretion to
regulate all aspects of employment, including the prerogative to instill discipline in its employees
and to impose penalties, including dismissal, upon erring employees.

RESPONDENT'S ARGUMENT: Respondent alleged that petitioner failed to establish the

validity of his dismissal by clear and convincing evidence. He insists that when doubts exist
between the evidence presented by the employer and the employee, the scales of justice must be
tilted in favor of the latter because the employer must affirmatively show rationally adequate
evidence that the dismissal was for a justifiable cause.

INSTRUCTION LEARNED: Even if the law is concerned with the welfare of the employees,
it also recognizes the employer's right to exercise management prerogatives such as instilling
discipline to its employees. As long as the company's exercise of judgment is made in good faith
and for a legitimate purpose, not for the purpose of defeating the rights of employees under the
laws or valid agreements, such exercise will be upheld.

RULING: Yes. It is well-settled in jurisprudence that accusatory and inflammatory language

used by an employee towards his employer or superior can be a ground for dismissal or
termination, under Article 282 (a) of the Labor Code. A plurality of evidence show that
employee transgressed some established and definite rule of action when he uttered disrespectful
and provocative words against his superior in front of his co-employees, committed a forbidden
act of demonstrating a dirty finger, and neglected his duty when he spent working hours
conversing with his co-employees, willfully and with wrongful intent to show his defiance and
displeasure, which were not mere errors in judgment

RATIO: The protection that the law gives to the employee is not a license to oppress the
employer. Moreover, the exercise of management prerogatives, such as disciplining employees,
done in good faith and for a legitimate purpose does not warrant interference from the State.
 Page 23 of 2

PHILIPPINE AIRLINES INC VS NATIONAL LABOR RELATIONS COMMISSION ET

AL
GR NO. 87698 SEPTEMBER 24, 1991

ISSUE: Whether the dismissal based on commission of a crime against the employer was
properly and validly construed by the dismissed employee to be a mere preventive suspension
pursuant to a company policy.

PETITIONER’S ARGUMENT: The dismissal of Irineo is strictly construed as a dismissal.

The letter addressed to him by PAL states categorically that he is being dismissed because of the
estafa committed by him along with others.

RESPONDENT'S ARGUMENT: The dismissal of Irineo should be reduced to a mere

preventive suspension. This is in line with the policy of PAL that any employee charged with a
crime shall be placed under preventive suspension until the final adjudication of his/her case.

INSTRUCTION LEARNED: Doubts construed in favor of labor do not authorize its capricious
exercise. Although it is the State’s policy to give protection to labor, such mandate cannot be
exercised unreasonably. The facts and the surrounding circumstances of a case cannot be
disregarded merely to favor labor. This becomes more fitting if the employee himself prejudiced
the employer through commission of a crime.

RULING: No. Ireneo’s dismissal is categorically effected by PAL. There is no doubt that PAL
dismissed him via a letter stating the cause of his dismissal. This cannot be construed as a mere
preventive suspension. This would be prejudicial to the employer who is compelled to retain an
employee who committed a crime against him/her. When the circumstances and facts are clear, it
cannot be construed to lessen its efficacy.

RATIO: Construction in favor of labor may only be applied if there are doubts as to the
applicability of laws or on the facts. If the law or facts are clear, there is no more room for
interpretation. More so that it cannot be altered just to favor the employee.
 Page 24 of 2

NORBERTO SORIANO VS OFFSHORE SHIPPING AND MANNING CORP ET AL

GR NO. 78409, SEPTEMBER 14, 1989

ISSUE: Whether an alteration in the employment contract acknowledged by the employee is

invalid and should be construed against the employer

PETITIONER’S ARGUMENT: The alteration in the employment contract, which shows that
Soriano’s basic pay is now $560 instead of $800, is in violation of the Labor Code because it
requires prior approval by the POEA before being effective.

RESPONDENT'S ARGUMENT: The alteration is not alteration per se to amend the spirit of
the contract but a mere clarification. The $800 figure is clarified to be consisting of $560 basic
wage and $240 overtime pay. This does not in any way lessen the pay of Soriano.

INSTRUCTION LEARNED: Doubts as to the contract shall be construed in favor of the

employee. Employment contracts are construed in a way that would protect the worker.
However, this construction has a limitation, such as when the employer merely clarifies a certain
provision through an alteration, without effecting any material change to the contract. In such
case the employee cannot invoke the contract to be interpreted in his favor.

RULING: No. The alteration is harmless. It merely clarifies that the rate of $800 includes $560
as basic pay and $240 as overtime pay. In fact, adding the two figures, the wage due to Soriano is
still $800 but is inclusive of overtime pay. As a consequence, he cannot claim overtime payment
because it is already part of the $800 as agreed upon by the parties.

RATIO: Pursuant to the mandate of the law to protect the worker, doubts arising from the
interpretation of contracts are generally construed in favor of labor. However, such construction
must not ignore the legitimate interests and rights of the employer. The interpretation must be
just and reasonable under the circumstances. It must not blindly favor the employee if the result
would also be unjust and oppressive to the employer.
 Page 25 of 2

PAMBUSCO EMPLOYEES' UNION V. CIR

GR NO. 46727 SEPTEMBER 29, 1939

ISSUE: Whether the employees (drivers) may validly demand payment of back overtime pay
from the employer on the basis of Act No. 4242 (Eight Hour Labor Law) when the said law, by
mutual concurrence of the parties, was not enforced within the company.

PETITIONER’S ARGUMENT: Petitioners are claiming back overtime pay on the basis of
Act. No. 4242 (Eight Hour Labor Law) which was not enforced by the employer within the
company due to the employees’ request and with the concurrence of the employer.

RESPONDENT'S ARGUMENT: Even before the final approval of the Eight Hour Labor Law,
a petition was addressed by the employees to the Governor-General asking him to veto the bill
amending the law extending it to drivers. Later, a petition was again by the drivers to the
Commissioner of Labor requesting adjustment of working hours to permit them to retain their
present status with the company as nearly as possible under the law. This petition was prepared
after a meeting of the employees was held and was drawn with the help of the manager of the
respondent. Employees of the different departments of the company again addressed a petition to
the Director of Labor expressing their satisfaction with the hours they work and the pay they
receive for their labor including the special bonuses and overtime pay they receive for extra
work, and asking, in view thereof, that the law be not applied to them.

INSTRUCTION LEARNED: When the employer and the employees are in pari delicto
(agreeing in the non-enforcement of the law within the company), neither may invoke the
provisions of the law in their favor.

RULING: No. In Kapisanan ng mga Mangagawa sa Pantranco vs. Pangasinan Transportation

Co. (39 Off. Gaz., 1217), the Court held that, to be entitled to the benefits of section 5 of Act No.
4123, fulfillment of the mandate of the law is necessary, this being a matter of public interest.
Where both parties, as in this case, have violated the law, this court must decline to extend the
strong arm of equity, as neither party is entitled to its aid.

RATIO: It is a cardinal rule that industrial disputes should be decided with an eye on the welfare
of the working class, who, in the interplay of economic forces, is said to find itself in the "end of
the stick. However, when both the employees and the employer are at fault, the Court will
decline to extend the strong arm of equity, as neither party is entitled to its aid.
 Page 26 of 2

RILECO, INC., PETITIONER, V. MINDANAO CONGRESS OF LABOR-RAMIE

UNITED FARM WORKERS’ ASSOCIATION (LOCAL) AND THE COURT OF
INDUSTRIAL RELATIONS, RESPONDENTS
G.R. NO. L-22243 NOVEMBER 29, 1968

ISSUE: Whether ramie culture partakes the nature of agricultural work, hence the Court of
Industrial Relations has no jurisdiction over a petition for certification election of a union whose
members are engaged in such work.

PETITIONER’S ARGUMENT: The Court of Industrial Relations did not have jurisdiction to
entertain a case involving a petition for certification election filed by Mindanao Congress of
Labor-Ramie, United Farm Workers’ Association-Local because the Manolita plantation was
engaged solely in agricultural work and, consequently, its laborers were agricultural laborers.

RESPONDENT'S ARGUMENT: Respondent, a legitimate labor organization, prays that the

Court of Industrial Relations order the Department of Labor to conduct a certification election
claiming that more than 10% of the employees and laborers of the Manolita Plantation - owned
by Rileco - were its members and that no certification election had been conducted at such
plantation for the past twelve months immediately prior to the filing of its petition.

INSTRUCTION LEARNED: The Court of Industrial relations has no jurisdiction to entertain a

petition to order the Department of Labor to conduct a petition for certification election if the
members of the requesting union are engaged in agricultural work.

RULING: Yes. Ramie culture consisted of the preparation of the soil, planting of ramie roots
and caring thereof for at least one-hundred days; then the ramie stalks are cut and delivered to
the stripping sheds where they are stripped with the use of decorticating; then the wet fibers are
dried under the sun for one day and later made to pass through the brusher to cleanse them of
impurities; that thereafter the fibers are deemed ready for the market. In the case of Celestial v.
The Southern Mindanao Experimental Station, it was held that: “where the employees and
laborers actually tills the soil, introduces and plants seeds of the best crop (principally cacao)
varieties found by it after study and experiment, raises said crops in the best approved methods
of cultivation, including the spacing of each plant etc. there can be no question that all these acts
and functions are agricultural as distinguished from non- agricultural functions.”
 Page 27 of 2

RATIO: The Court of Industrial relations has jurisdiction in cases involving a petition for
certification election of a union whose members are engaged in industrial work, not those
engaged in agricultural production.
 Page 28 of 2

NATIONAL SERVICE CORPORATION (NASECO) AND ARTURO L. PEREZ,

PETITIONERS, V. THE HONORABLE THIRD DIVISION, NATIONAL LABOR
RELATIONS COMMISSION, MINISTRY OF LABOR AND EMPLOYMENT, MANILA
AND EUGENIA C. CREDO, RESPONDENTS
G.R. NO. L-69870 NOVEMBER 29, 1988

ISSUE: Whether the Civil Service law covers government-owned or controlled corporations
organized as subsidiaries of government-owned or controlled corporations under the general
corporation law.

PETITIONER’S ARGUMENT: NASECO argues that it is a GOCC, and pursuant to the NHA
v. Juco ruling, they are outside the coverage of the Labor Code, thus the NLRC has no
jurisdiction to take cognizance of the case. They also claim that the dismissal The dismissal of
Credo complied with the legal requirements.

RESPONDENT'S ARGUMENT: NLRC ruled that the dismissal was illegal due to the lack of
the required twin-notice, and that even before the opportunity given by NASECO to Credo to be
able to rebut the charges, the administration was already bent in terminating the Credo.

INSTRUCTION LEARNED: The ruling in NHC vs. Juco should not be given retroactive
effect, that is, to cases that arose before its promulgation on 17 January 1985. To do otherwise
would be oppressive to Credo and other employees similarly situated, because under the same
1973 Constitution but prior to the ruling in NHC vs. Juco, the Court had recognized the
applicability of the Labor Code to, and the authority of the NLRC to exercise jurisdiction over,
disputes involving terms and conditions of employment in government-owned or controlled
corporations, among them, NASECO.

RULING: No. Only those with GOCCs with an original charter are covered by the Civil Service
Law. ‘2nd generation’ GOCCs or those without original charters are within the protection and
guidance of the Labor Code. As an admitted subsidiary of the NIDC, in turn, a subsidiary of the
PNB, the NASECO is a government-owned or controlled corporation without an original charter.

The 1987 Constitutional provides that the Civil Service embraces government-owned or
controlled corporations with original charter; and, therefore, by clear implication, the Civil
Service does not include government-owned or controlled corporations which are organized as
subsidiaries of government-owned or controlled corporations under the general corporation law.
 Page 29 of 2

On the premise that it is the 1987 Constitution that governs the instant case because it is the
Constitution in place at the time of decision thereof, the NLRC has jurisdiction to accord relief to
the parties.

RATIO: The Civil Service does not include government-owned or controlled corporations
which are organized as subsidiaries of government-owned or controlled corporations under the
general corporation law.