PEOPLE v.

POMAR by the piece, could be compelled under the law to pay for sixty days during which no
November 3, 1924, G.R. No. L-22008, Johnson, J.
(Labor Standards: Police Power, basis of social legislation)
FACTS:
Julio Pomar is the manager and person in charge of La Flor de la Isabela, a tobacco factory
pertaining to La Campania General de Tabacos de Filipinas, a corporation duly authorized
to transact business in the City of Manila. under his employ is Macaria Fajardo, whom he
granted vacation leave by reason of her pregnancy. However, Pomar did not pay her the
wages she is entitled to corresponding to 30 days before and 30 days after her delivery and
confinement. Despite demands made by her, Pomar still refused to pay Fajardo.
The CFI found Pomar guilty of violating section 13 in connection with section 15 of Act No.
3071. Pomar appealed questioning the constitutionality of the Act.
Said section 13 was enacted by the Legislature of the Philippine Islands in the exercise of its
supposed police power, with the praiseworthy purpose of safeguarding the health of
pregnant women laborers in “factory, shop or place of labor of any description,” and of
insuring to them, to a certain extent, reasonable support for one month before and one
month after their delivery.
ISSUE:
Whether or not Act 3071 has been adopted in the reasonable and lawful exercise of the
police power of the state.
RULING:
services were rendered.
For all of the foregoing reasons, we are fully persuaded, under the facts and the law, that
the provisions of section 13, of Act No. 3071 of the Philippine Legislature, are
unconstitutional and void.
Therefore, the sentence of the lower court is hereby revoked, the complaint is hereby
dismissed.
Section 13 of Act No. 3071 is as follows:
Every person, firm or corporation owning or managing a factory, shop or place of
labor of any description shall be obliged to grant to any woman employed by it as
laborer who may be pregnant, thirty days vacation with pay before and another
thirty days after confinement: Provided, That the employer shall not discharge
such laborer without just cause, under the penalty of being required to pay to her
wages equivalent to the total of two months counted from the day of her
discharge.
Section 15 of the same Act is as follows:
Any person, firm or corporation violating any of the provisions of this Act shall be
punished by a fine of not less than fifty pesos nor more than two hundred and
fifty, or by imprisonment for not less than ten days nor more than six months, or
both, in the discretion of the court.
In the case of firms or corporations, the presidents, directors or managers thereof
or, in their default, the persons acting in their stead, shall be criminally
responsible for each violation of the provisions of this Act.

The police power of the state is a growing and expanding power. As civilization develops
and public conscience becomes awakened, the police power may be extended, as has been
demonstrated in the growth of public sentiment with reference to the manufacture and
sale of intoxicating liquors. But that power cannot grow faster than the fundamental law of
the state, nor transcend or violate the express inhibition of the people’s law – the
constitution. If the people desire to have the police power extended and applied to
conditions and things prohibited by the organic law, they must first amend that law.

It will also be noted from an examination of said section 13, that it takes no account of
contracts for the employment of women by the day nor by the piece. The law is equally
applicable to each case. It will hardly be contended that the person, firm or corporation
owning or managing a factory, shop or place of labor, who employs women by the day or

West Coast Hotel Co. v. Parrish - 300 U.S. 379, 57 S. Ct. 578 (1937)
RULE:
The United States Constitution does not speak of freedom of contract. It speaks of liberty
and prohibits the deprivation of liberty without due process of law. Liberty under the
Constitution is thus necessarily subject to the restraints of due process, and regulation
which is reasonable in relation to its subject and is adopted in the interests of the
community is due process.
FACTS:
Plaintiff female chambermaid filed an action for back wages under the Washington
Minimum Wages for Women Act. The trial court ruled in favor of the employer while the
Supreme Court of the State, reversing the trial court, sustained the statute and directed
judgment for the plaintiffs. On appeal, the US Supreme Court affirmed judgment in favor of
the female employee.
ISSUE:
Is the Minimum Wage Act a violation of the due process clause of the Fourteenth
Amendment?
ANSWER:
No.
CONCLUSION:
It was a valid exercise of the state's police power to protect the health and safety of
women. The Court reasoned that the state had a valid interest in the wages paid to women
because their support would fall on the state if women were not paid adequate wages. The
Court specifically overruled a case relied on by the employer which held that minimum
wages laws for women were an unconstitutional burden on the right to contract. The Court
reasoned that the case could not stand because employers and employees did not stand on
equal footing in the contract process, and the state's interest in the protection of women
was valid. The Court held that equal protection was not violated because there was no
doctrinal requirement that required the legislation to be couched in all-embracing terms.
The Act was directed at a social position unique to women, so the Act did not constitute
arbitrary discrimination.
ACCFA v CUGCO Digest
G.R. No. L-21484 November 29, 1969
Facts:
ACCFA, a government agency created under RA 821, as amended was reorganized and its
name changed to Agricultural Credit Administration (ACA) under the RA 3844 or Land
Reform Code. While ACCFA Supervisors' Association (ASA) and the ACCFA Workers'
Association (AWA), are labor organizations (the Unions) composed of the supervisors and
the rank-and-file employees in the ACCFA.
A CBA was agreed upon by labor unions (ASA and AWA) and ACCFA. The said CBA was
supposed to be effective on 1 July 1962. Due to non-implementation of the CBA the unions
held a strike. And 5 days later, the Unions, with its mother union, the Confederation of
Unions in Government Corporations and Offices (CUGCO), filed a complaint against ACCFA
before the CIR on ground of alleged acts of unfair labor practices; violation of the collective
bargaining agreement in order to discourage the members of the Unions in the exercise of
their right to self-organization, discrimination against said members in the matter of
promotions and refusal to bargain.
ACCFA moved for a reconsideration but while the appeal was pending, RA 3844 was passed
which effectively turned ACCFA to ACA. Then, ASA and AWA petitioned that they obtain
sole bargaining rights with ACA. While this petition was not yet decided upon, EO 75 was
also passed which placed ACA under the Land Reform Project Administration.
Notwithstanding the latest legislation passed, the trial court and the appellate court ruled
in favor of ASA and AWA.
ISSUE: W/N ACA is a government entity
YES.
It was in furtherance of such policy that the Land Reform Code was enacted and the
various agencies, the ACA among them, established to carry out its purposes. There can be
no dispute as to the fact that the land reform program contemplated in the said Code is
beyond the capabilities of any private enterprise to translate into reality. It is a purely
governmental function, no less than, the establishment and maintenance of public schools
and public hospitals. And when, aside from the governmental objectives of the ACA, geared
as they are to the implementation of the land reform program of the State, the law itself
declares that the ACA is a government office, with the formulation of policies, plans and
programs vested no longer in a Board of Governors, as in the case of the ACCFA, but in the
National Land Reform Council, itself a government instrumentality; and that its personnel
are subject to Civil Service laws and to rules of standardization with respect to positions
and salaries, any vestige of doubt as to the governmental character of its functions
disappears.
The growing complexities of modern society, however, have rendered this traditional
classification of the functions of government quite unrealistic, not to say obsolete. The
areas which used to be left to private enterprise and initiative and which the government
was called upon to enter optionally, and only "because it was better equipped to
administer for the public welfare than is any private individual or group of
individuals,"5continue to lose their well-defined boundaries and to be absorbed within
activities that the government must undertake in its sovereign capacity if it is to meet the
increasing social challenges of the times. Here as almost everywhere else the tendency is
undoubtedly towards a greater socialization of economic forces. Here of course this
development was envisioned, indeed adopted as a national policy, by the Constitution itself
in its declaration of principle concerning the promotion of social justice.
The Unions have no bargaining rights with ACA. EO 75 placed ACA under the LRPA and by
virtue of RA 3844 the implementation of the Land Reform Program of the government is a
governmental function NOT a proprietary function. Being such, ACA can no longer step
down to deal privately with said unions as it may have been doing when it was still ACCFA.
However, the growing complexities of modern society have rendered the classification of
the governmental functions as unrealistic, if not obsolete. Ministerial and governmental
functions continue to lose their well-defined boundaries and are absorbed within the
activities that the government must undertake in its sovereign capacity if it to meet the
increasing social challenges of the times and move towards a greater socialization of
economic forces.
Separate Opinions
FERNANDO, J., concurring:
The decision reached by this Court so ably given expression in the opinion of Justice
Makalintal, characterized with vigor, clarity and precision, represents what for me is a clear
tendency not to be necessarily bound by our previous pronouncements on what activities
partake of a nature that is governmental.1 Of even greater significance, there is a definite
rejection of the "constituent-ministrant" criterion of governmental functions, followed in
Bacani v. National Coconut Corporation.2 That indeed is cause for gratification. For me at
least, there is again full adherence to the basic philosophy of the Constitution as to the
extensive and vast power lodged in our government to cope with the social and economic
problems that even now sorely beset us. There is therefore full concurrence on my part to
the opinion of the Court, distinguished by its high quality of juristic craftsmanship. I feel
however that the matter is of such vital importance that a separate concurring opinion is
not inappropriate. It will also serve to give expression to my view, which is that of the Court
likewise, that our decision today does not pass upon the rights of labor employed in
instrumentalities of the state discharging governmental functions.
1. In the above Bacani decision, governmental functions are classified into constituent and
ministrant. "The former are those which constitute the very bonds of society and are
compulsory in nature; the latter are those that are undertaken only by way of advancing
the general interests of society, and are merely optional. President Wilson enumerates the
constituent functions as follows: '(1) The keeping of order and providing for the protection
of persons and property from violence and robbery. (2) The fixing of the legal relations
between man and wife and between parents and children. (3) The regulation of the
holding, transmission, and interchange of property, and the determination of its liabilities
for debt or for crime. (4) The determination of contract rights between individuals. (5) The
definition and punishment of crime. (6) The administration of justice in civil cases. (7) The
determination of the political duties, privileges, and relations of citizens. (8) Dealings of the
state with foreign powers: the preservation of the state from external danger or
encroachment and the advancement of its international interests.' "3
The ministrant functions were then enumerated, followed by a statement of the basis that
would justify engaging in such activities. Thus: "The most important of the ministrant
functions are: public works, public education, public charity, health and safety regulations,
and regulations of trade and industry. The principles determining whether or not a
government shall exercise certain of these optional functions are: (1) that a government
should do for the public welfare those things which private capital would not naturally
undertake and (2) that a government should do these things which by its very nature it is
better equipped to administer for the public welfare than is any private individual or group
of individuals."4
Reference is made in the Bacani decision to the first of the many publications of Justice
Malcolm on the Philippine government, which appeared in 1916,5 adopting the
formulation of the then Professor, later President, Woodrow Wilson of the United States,
in a textbook on political science the first edition of which was published in 1898. The
Wilson classification reflected the primacy of the dominant laissez-faire concept carried
into the sphere of government.
A most spirited defense of such a view was given by former President Hadley of Yale in a
series of three lectures delivered at Oxford University in 1914. According to President
Hadley: "I shall begin with a proposition which may sound somewhat startling, but which I
believe to be literally true. The whole American political and social system is based on
industrial property right, far more completely than has ever been the case in any European
country. In every nation of Europe there has been a certain amount of traditional
opposition between the government and the industrial classes. In the United States no
such tradition exists. In the public law of European communities industrial freeholding is a
comparatively recent development. In the United States, on the contrary, industrial
freeholding is the foundation on which the whole social order has been established and
built up."6
The view is widely accepted that such a fundamental postulate did influence American
court decisions on constitutional law. As was explicitly stated by Justice Cardozo, speaking
of that era: "Laissez-faire was not only a counsel of caution which statesmen would do well
to heed. It was a categorical imperative which statesmen as well as judges, must obey."7
For a long time, legislation tending to reduce economic inequality foundered on the rock
that was the due process clause, enshrining as it did the liberty of contract. To cite only one
instance, the limitation of employment in bakeries to sixty hours a week and ten hours a
day under a New York statute was stricken down for being tainted with a due process
objection in Lochner v. New York.8 It provoked one of the most vigorous dissents of Justice
Holmes, who was opposed to the view that the United States Constitution did embody
laissez-faire. Thus: "General propositions do not decide concrete cases. The decision will
depend on a judgment or intuition more subtle than any articulate major premise. But I
think that the proposition just stated, if it is accepted, will carry us far toward the end.
Every opinion tends to become a law. I think that the word 'liberty,' in the 14th
Amendment, is perverted when it is held to prevent the natural outcome of a dominant
opinion, unless it can be said that a rational and fair man necessarily would admit that the
statute proposed would infringe fundamental principles as they have been understood by
the traditions of our people and our law. It does not need research to show that no such
sweeping condemnation can be passed upon the statute before us. A reasonable man
might think it a proper measure on the score of health. Men whom I certainly could not
pronounce unreasonable would uphold it as a first installment of a general regulation of
the hours of work. Whether in the latter aspect it would be open to the charge of
inequality I think it unnecessary to discuss." It was not until 1908, in Muller v. Oregon,9
that the American Supreme Court held valid a ten-hour maximum for women workers in
laundries and not until 1917 in Bunting v. Oregon10 that such a regulatory ten-hour law
applied to men and women passed the constitutional test.
Similarly, state legislation fixing minimum wages was deemed offensive to the due process
clause in a 1923 decision in Adkins v. Children's Hospital.11 Only in 1937, in the leading
case of West Coast Hotel v. Parrish,12 was the Adkins case overruled and a minimum wage
law New York statute upheld. The same unsympathetic attitude arising from the laissez-
faire concept was manifest in decisions during such period, there being the finely-spun
distinctions in the Wolff Packing Co. v. Court of Industrial Relations13 decision, as to when
certain businesses could be classified as affected with public interest to justify state
regulation as to prices. After eleven years, in 1934, in Nebbia v. New York,14 the air of
unreality was swept away by this explicit pronouncement from the United States Supreme
Court: "The phrase 'affected with a public interest' can, in the nature of things, mean no
more than that an industry, for adequate reason, is subject to control for the public good."
It is thus apparent that until the administration of President Roosevelt, the laissez-faire
principle resulted in the contraction of the sphere where governmental entry was
permissible. The object was to protect property even if thereby the needs of the general
public would be left unsatisfied. This was emphatically put forth in a work of former
Attorney General, later Justice, Jackson, citing an opinion of Judge Van Orsdel. Thus: "It
should be remembered that of the three fundamental principles which underlie
government, and for which government exists, the protection of life, liberty, and property,
the chief of these is property . . . ."15 The above excerpt from Judge Van Orsdel forms part
of his opinion in Children's Hospital v. Adkins, when decided by the Circuit Court of
Appeals.16
Nonetheless, the social and economic forces at work in the United States to which the new
deal administration of President Roosevelt was most responsive did occasion, as of 1937,
greater receptivity by the American Supreme Court to a philosophy less rigid in its
obeisance to property rights. Earlier legislation deemed offensive to the laissez-faire
concept had met a dismal fate. Their nullity during his first term could, more often than
not, be expected.17
As a matter of fact, even earlier, in 1935, Professor Coker of Yale, speaking as a historian,
could already discern a contrary drift. Even then he could assert that the range of
governmental activity in the United States had indeed expanded. According to him: "Thus
both liberals and conservatives approve wide and varied governmental intervention; the
latter condemning it, it is true, when the former propose it, but endorsing it, after it has
become a fixed part of the status quo, as so beneficial in its effects that no more of it is
needed. Our history for the last half-century shows that each important governmental
intervention we have adopted has been called socialistic or communistic by contemporary
conservatives, and has later been approved by equally conservative men who now accept it
both for its proved benefits and for the worthy traditions it has come to represent. Both
liberal and conservative supporters of our large-scale business under private ownership
advocate or concede the amounts and kinds of governmental limitation and aid which they
regard as necessary to make the system work efficiently and humanely. Sooner or later,
they are willing to have government intervene for the purpose of preventing the system
from being too oppressive to the masses of the people, protecting it from its self-
destructive errors, and coming to its help in other ways when it appears not to be able to
take care of itself."18
At any rate, by 1943, the United States was reconciled to laissez-faire having lost its
dominance. In the language of Justice Jackson in the leading case of West Virginia State
Board of Education v. Barnette:19 "We must transplant these rights to a soil in which the
laissez-faire concept or principle of non-interference has withered at least as to economic
affairs, and social advancements are increasingly sought through closer integration of
society and through expanded and strengthened governmental controls."
2. The influence exerted by American constitutional doctrines unavoidable when the
Philippines was still under American rule notwithstanding, an influence that has not
altogether vanished even after independence, the laissez-faire principle never found full
acceptance in this jurisdiction, even during the period of its full flowering in the United
States. Moreover, to erase any doubts, the Constitutional Convention saw to it that our
fundamental law embodies a policy of the responsibility thrust on government to cope with
social and economic problems and an earnest and sincere commitment to the promotion
of the general welfare through state action. It would thus follow that the force of any legal
objection to regulatory measures adversely affecting property rights or to statutes
organizing public corporations that may engage in competition with private enterprise has
been blunted. Unless there be a clear showing of any invasion of rights guaranteed by the
Constitution, their validity is a foregone conclusion. No fear need be entertained that
thereby spheres hitherto deemed outside government domain have been enchroached
upon. With our explicit disavowal of the "constituent-ministrant" test, the ghost of the
laissez-faire concept no longer stalks the juridical stage.
As early as 1919, in the leading case of Rubi V. Provincial Board of Mindoro,20 Justice
Malcolm already had occasion to affirm: "The doctrines of laissez-faire and of unrestricted
freedom of the individual, as axioms of economic and political theory, are of the past. The
modern period has shown a widespread belief in the amplest possible demonstration of
governmental activity. The Courts unfortunately have sometimes seemed to trail after the
other two branches of the Government in this progressive march."
It was to be expected then that when he spoke for the Court in Government of the
Philippine Islands v. Springer,21 a 1927 decision, he found nothing objectionable in the
government itself organizing and investing public funds in such corporations as the
National Coal Co., the Phil. National Bank, the National Petroleum Co., the National
Development Co., the National Cement Co. and the National Iron Co. There was not even a
hint that thereby the laissez-faire concept was not honored at all. It is true that Justice
Malcolm concurred with the majority in People v. Pomar,22 a 1924 opinion, which held
invalid under the due process clause a provision providing for maternity leave with pay
thirty days before and thirty days after confinement. It could be that he had no other
choice as the Philippines was then under the United States, and only recently the year
before, the above-cited case of Adkins v. Children's Hospital,23 in line with the laissez-faire
principle, did hold that a statute providing for minimum wages was constitutionally infirm
on the same ground.
Our constitution which took effect in 1935, upon the inauguration of the Commonwealth of
the Philippines, erased whatever doubts there might be on that score. Its philosophy is
antithetical to the laissez-faire concept. Delegate, later President, Manuel Roxas, one of the
leading members of the Constitutional Convention, in answer precisely to an objection of
Delegate Jose Reyes of Sorsogon, who noted the "vast extensions in the sphere of
governmental functions" and the "almost unlimited power to interfere in the affairs of
industry and agriculture as well as to compete with existing business" as "reflections of the
fascination exerted by [the then] current tendencies" in other jurisdictions,24 spoke thus:
"My answer is that this constitution has a definite and well defined philosophy, not only
political but social and economic. A constitution that in 1776 or in 1789 was sufficient in
the United States, considering the problems they had at that time, may not now be
sufficient with the growing and ever-widening complexities of social and economic
problems and relations. If the United States of America were to call a constitutional
convention today to draft a constitution for the United States, does any one doubt that in
the provisions of that constitution there will be found definite declarations of policy as to
economic tendencies; that there will be matters which are necessary in accordance with
the experience of the American people during these years when vast organizations of
capital and trade have succeeded to a certain degree to control the life and destiny of the
American people? If in this constitution the gentleman will find declarations of economic
policy, they are there because they are necessary to safeguard the interests and welfare of
the Filipino people because we believe that the days have come when in self-defense, a
nation may provide in its constitution those safeguards, the patrimony, the freedom to
grow, the freedom to develop national aspirations and national interests, not to be
hampered by the artificial boundaries which a constitutional provision automatically
imposes."25
Delegate Roxas continued further: "The government is the creature of the people and the
government exercises its powers and functions in accordance with the will and purposes of
the people. That is the first principle, the most important one underlying this document.
Second, the government established in this document is, in its form, in our opinion, the
most adapted to prevailing conditions, circumstances and the political outlook of the
Filipino people. Rizal said, 'Every people has the kind of government that they deserve.'
That is just another form of expressing the principle in politics enunciated by the French
philosophers when they said: 'Every people has the right to establish the form of
government which they believe is most conducive to their welfare and their liberty.' Why
have we preferred the government that is established in this draft? Because it is the
government with which we are familiar. It is the form of government fundamentally such
as it exists today; because it is the only kind of government that our people understand; it
is the kind of government we have found to be in consonance with our experience, with
the necessary modification, capable of permitting a fair play of social forces and allowing
the people to conduct the affairs of that government."26
One of the most prominent delegates, a leading intellectual, former President Rafael Palma
of the University of the Philippines, stressed as a fundamental principle in the draft of the
Constitution the limitation on the right to property. He pointed out that the then prevailing
view allowed the accumulation of wealth in one family down to the last remote
descendant, resulting in a grave disequilibrium and bringing in its wake extreme misery side
by side with conspicuous luxury. He did invite attention to the few millionaires at one
extreme with the vast masses of Filipinos deprived of the necessities of life at the other. He
asked the Convention whether the Filipino people could long remain indifferent to such a
deplorable situation. For him to speak of a democracy under such circumstances would be
nothing but an illusion. He would thus emphasize the urgent need to remedy the grave
social injustice that had produced such widespread impoverishment, thus recognizing the
vital role of government in this sphere.27
Another delegate, Tomas Confesor of Iloilo, was quite emphatic in his assertion for the
need of a social justice provision which is a departure from the laissez-faire principle. Thus:
"Take the case of the tenancy system in the Philippines. You have a tenant. There are
hundreds of thousands of tenants working day in and day out, cultivating the fields of their
landlords. He puts all his time, all his energy, the labor and the assistance of his wife and
children, in cultivating a piece of ground for his landlord but when the time comes for the
partition of the products of his toil what happens? If he produces 25 cavanes of rice, he
gets only perhaps five and the twenty goes to the landlord. Now can he go to court? Has he
a chance to go to court in order to secure his just share of the products of his toil? No.
Under our present regime of law, under our present regime of justice, you do not give that
to the poor tenant. Gentlemen, you go to the Cagayan Valley and see the condition under
which those poor farmers are being exploited day in and day out. Can they go to court
under our present regime of justice, of liberty, or democracy? The other day, workmen
were shot by the police just because they wanted to increase or they desired that their
wages be increased from thirty centavos a day to forty or fifty centavos. Is it necessary to
spill human blood just to secure an increase of ten centavos in the daily wages of an
ordinary laborer? And yet under our present regime of social justice, liberty and
democracy, these things are happening; these things, I say, are happening. Are those
people getting any justice? No. They cannot get justice now from our courts. For this
reason, I say it is necessary that we insert 'social justice' here and that social justice must
be established by law. Proper legal provisions, proper legal facilities must be provided in
order that there be a regime not of justice alone, because we have that now and we are
seeing the oppression arising from such a regime. Consequently, we must emphasize the
term 'social justice'."28
Delegate Ventenilla of Pangasinan reflected the attitude of the Convention as to why
laissez-faire was no longer acceptable. After speaking of times having changed, he
proceeded: "Since then new problems have arisen. The spiritual mission of government has
descended to the level of the material. Then its function was primarily to soothe the aching
spirit. Now, it appears, it must also appease hunger. Now that we may read history
backwards, we know for instance, that the old theory of 'laissez-faire' has degenerated into
'big business affairs' which are gradually devouring the rights of the people — the same
rights intended to be guarded and protected by the system of constitutional guaranties.
Oh, if the Fathers were now alive to see the changes that the centuries have wrought in our
life! They might contemplate the sad spectacle of organized exploitation greedily devouring
the previous rights of the individual. They might also behold the gradual disintegration of
society, the fast disappearance of the bourgeois — the middle class, the backbone of the
nation — and the consequent drifting of the classes toward the opposite extremes — the
very rich and the very poor."29
Shortly after the establishment of the Commonwealth, the then Justice Jose P. Laurel,
himself one of the foremost delegates of the Constitutional Convention, in a concurring
opinion, later quoted with approval in the leading case of Antamok Goldfields Mining Co. v.
Court of Industrial Relations,30 decided in 1940, explained clearly the need for the
repudiation of the laissez-faire doctrine. Thus: "It should be observed at the outset that our
Constitution was adopted in the midst of surging unrest and dissatisfaction resulting from
economic and social distress which was threatening the stability of governments the world
over. Alive to the social and economic forces at work, the framers of our Constitution
boldly met the problems and difficulties which faced them and endeavored to crystallize,
with more or less fidelity, the political, social and economic propositions of their age, and
this they did, with the consciousness that the political and philosophical aphorism of their
generation will, in the language of a great jurist, 'be doubted by the next and perhaps
entirely discarded by the third.' . . . Embodying the spirit of the present epoch, general
provisions were inserted in the Constitution which are intended to bring about the needed
social and economic equilibrium between component elements of society through the
application of what may be termed as the justitia communis advocated by Grotius and
Leibnits many years ago to be secured through the counterbalancing of economic and
social forces and opportunities which should be regulated, if not controlled, by the State or
placed, as it were, in custodia societatis. 'The promotion of social justice to insure the well-
being and economic security of all the people' was thus inserted as vital principle in our
Constitution. ... ."31 In the course of such concurring opinion and after noting the changes
that have taken place stressing that the policy of laissez-faire had indeed given way to the
assumption by the government of the right to intervene although qualified by the phrase
"to some extent", he made clear that the doctrine in People v. Pomar no longer retain, "its
virtuality as a living principle."32
3. It must be made clear that the objection to the "constituent-ministrant" classification of
governmental functions is not to its formulation as such. From the standpoint of law as
logic, it is not without merit. It has neatness and symmetry. There are hardly any loose
ends. It has the virtue of clarity. It may be said in its favor likewise that it reflects all-too-
faithfully the laissez-faire notion that government cannot extend its operation outside the
maintenance of peace and order, protection against external security, and the
administration of justice, with private rights, especially so in the case of property, being
safeguarded and a hint that the general welfare is not to be entirely ignored.
It must not be lost sight of though that logic and jural symmetry while undoubtedly
desirable are not the prime consideration. This is especially so in the field of public law.
What was said by Holmes, almost nine decades ago, carry greater conviction now. "The life
of the law has not been logic; it has been experience. The felt necessities of the time, the
prevalent moral and political theories, intuitions of public policy avowed or unconscious,
even the prejudices which judges share with their fellow-men, have had a good deal more
to do than the syllogism in determining the rules by which men should be governed."33
Then too, there was the warning of Geny cited by Cardozo that undue stress or logic may
result in confining the entire system of positive law, "within a limited number of logical
categories, predetermined in essence, immovable in basis, governed by inflexible dogmas,"
thus rendering it incapable of responding to the ever varied and changing exigencies of
life.34,
It is cause enough for concern if the objection to the Bacani decision were to be premised
on the score alone that perhaps there was fidelity to the requirements of logic and jural
symmetry carried to excess. What appears to me much more deplorable is that it did fail to
recognize that there was a repudiation of the laissez-faire concept in the Constitution. As
was set forth in the preceding pages, the Constitution is distinguished precisely by a
contrary philosophy. The regime of liberty if provided for, with the realization that under
the then prevalent social and economic conditions, it may be attained only through a
government with its sphere of activity ranging far and wide, not excluding matters hitherto
left to the operation of free enterprise. As rightfully stressed in our decision today in line
with what was earlier expressed by Justice Laurel, the government that we have
established has as a fundamental principle the promotion of social justice.35 The same
jurist gave it a comprehensive and enduring definition as the "promotion of the welfare of
all the people, the adoption by the government of measures calculated to insure economic
stability of all the component elements of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers underlying the existence of all
governments in the time honored principle of salus populi estsuprema lex."36
There is thus from the same distinguished pen, this time writing for the Court, a reiteration
of the view of the laissez-faire doctrine being repugnant to the fundamental law. It must be
added though that the reference to extra-constitutional measures being allowable must be
understood in the sense that there is no infringement of specific constitutional guarantees.
Otherwise, the judiciary will be hard put to sustain their validity if challenged in an
appropriate legal proceeding.
The regime of liberty contemplated in the Constitution with social justice as a fundamental
principle to reinforce the pledge in the preamble of promoting the general welfare reflects
traditional concepts of a democratic policy infused with an awareness of the vital and
pressing need for the government to assume a much more active and vigorous role in the
conduct of public affairs. The framers of our fundamental law were as one in their strongly-
held belief that thereby the grave and serious infirmity then confronting our body-politic,
on the whole still with us now, of great inequality of wealth and mass poverty, with the
great bulk of our people ill-clad, ill-housed, ill-fed, could be remedied. Nothing else than
communal effort, massive in extent and earnestly engaged in, would suffice.
To paraphrase Laski, with the necessary modification in line with such worthy
constitutional ends, we look upon the state as an organization to promote the happiness of
individuals, its authority as a power bound by subordination to that purpose, liberty while
to be viewed negatively as absence of restraint impressed with a positive aspect as well to
assure individual self-fulfillment in the attainment of which greater responsibility is thrust
on government; and rights as boundary marks defining areas outside its domain.37 From
which it would follow as Laski so aptly stated that it is the individual's "happiness and not
its well-being [that is] the criterion by which its behavior [is] to be judged. His interests, and
not its power, set the limits to the authority it [is] entitled to exercise."38 We have under
such a test enlarged its field of competence. 4. With the decision reached by us today, the
government is freed from the compulsion exerted by the Bacani doctrine of the
"constituent-ministrant" test as a criterion for the type of activity in which it may engage.
Its constricting effect is consigned to oblivion. No doubts or misgivings need assail us that
governmental efforts to promote the public weal, whether through regulatory legislation of
vast scope and amplitude or through the undertaking of business activities, would have to
face a searching and rigorous scrutiny. It is clear that their legitimacy cannot be challenged
on the ground alone of their being offensive to the implications of the laissez-faire concept.
Unless there be a repugnancy then to the limitations expressly set forth in the Constitution
to protect individual rights, the government enjoys a much wider latitude of action as to
the means it chooses to cope with grave social and economic problems that urgently press
for solution. For me, at least, that is to manifest deference to the philosophy of our
fundamental law. Hence my full concurrence, as announced at the outset.
5. The opinion of Justice Makalintal contains this footnote: "It must be stated, however,
that we do not here decide the question — not at issue in this case — of whether or not a
labor organization composed employees discharging governmental functions, which is
allowed under the legal provision just quoted, provided such organization does not impose
the obligation to strike or to join in strike, may petition for a certification election and
compel the employer to bargain collectively with it for purposes other than to secure
changes or conditions in the terms and conditions of employment."
With such an affirmation as to the scope of our decision there being no holding on the
vexing question of the effects on the rights of labor in view of the conclusion reached that
the function engaged in is governmental in character, I am in full agreement. The answer to
such a vital query must await another day.
Bengzon vs Drilon (G.R. No. 103524)
Veto Power of the President
FACTS: On 15 Jan 1992, some provisions of the Special Provision for the Supreme Court and
the Lower Court’s General Appropriations were vetoed by the President because a
resolution by the Court providing for appropriations for retired justices has been enacted.
The vetoed bill provided for the increase of the pensions of the retired justices of the
Supreme Court, and the Court of Appeals as well as members of the Constitutional
Commission.
ISSUE: Whether or not the veto of the President on that portion of the General
Appropriations bill is constitutional.
HELD: The Justices of the Court have vested rights to the accrued pension that is due to
them in accordance to Republic Act 1797. The president has no power to set aside and
override the decision of the Supreme Court neither does the president have the power to
enact or amend statutes promulgated by her predecessors much less to the repeal of
existing laws. The veto is unconstitutional since the power of the president to disapprove
any item or items in the appropriations bill does not grant the authority to veto part of an
item and to approve the remaining portion of said item.
NOTES: Pocket Veto Not Allowed
Under the Constitution, the President does not have the so-called pocket-veto power, i.e.,
disapproval of a bill by inaction on his part. The failure of the President to communicate his
veto of any bill represented to him within 30 days after the receipt thereof automatically
causes the bill to become a law.
This rule corrects the Presidential practice under the 1935 Constitution of releasing veto
messages long after he should have acted on the bill. It also avoids uncertainty as to what
new laws are in force.
When is it allowed?
The exception is provided in par (2),Sec 27 of Art 6 of the Constitution which grants the
President power to veto any particular item or items in an appropriation, revenue or tariff
bill. The veto in such case shall not affect the item or items to which he does not object.
3 ways how a bill becomes a law.
1. When the President signs it
2. When the President vetoes it but the veto is overridden by 2/3 vote of all the members
of each House; and
3. When the president does not act upon the measure within 30 days after it shall have
been presented to him.

Calalang vs Williams “SOCIAL JUSTICE” Dec 2 1940
GR L47800
Summary:
Calalang filed a petition for writ of prohibition against certain officials in enforcing the
prohibition of animal-drawn vehicles in certain areas and during certain periods of the day.
The Court ruled that Commonwealth Act No 548, the law in question, is constitutional.
Doctrine:
Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the
humanization of laws and the equalization of social and economic forces by the State so
that justice in its rational and objectively secular conception may at least be approximated.
Social justice means the promotion of the welfare of all the people, the adoption by the
Government of measures calculated to insure economic stability of all the competent
elements of society, through the maintenance of a proper economic and social equilibrium
in the interrelations of the members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-constitutionally, through the exercise of
powers underlying the existence of all governments on the time-honored principle of salus
populi est suprema lex.
Social justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the protection that
should be equally and evenly extended to all groups as a combined force in our social and
economic life, consistent with the fundamental and paramount objective of the state of
promoting the health, comfort, and quiet of all persons, and of bringing about "the greatest
good to the greatest number."
Facts:
Maximo Calalang brought a petition for a writ of prohibition against the following
respondents: Chairman of the National Traffic Commission (A.D. Williams), Director of
Public Works (Vicente Fragante), Acting Secretary of Public Works and Communications
(Sergio Bayan), Mayor of the City of Manila (Eulogio Rodriguez), and the Acting Chief of
Police of Manila (Juan Dominguez).
It is alleged in the petition that the respondents have caused and enforced the prohibition
of animal-drawn vehicles from passing along Rosario St. extending from Plaza Calderon de
la Barca to Dasmarinas Street (from 7:30am-12:30pm and from 1:30-5:30p.m.); and Rizal
Avenue extending from the railroad crossing at Antipolo Street to Echague Street (from 7-
11a.m.) for a period of one year from the date of the opening of the Colgante Bridge, to the
detriment not only of their owners but of the riding public as well.
The petitioner avers that the rules and regulations to regulate and control the use of and
traffic on national roads, pursuant to Commonwealth Act No. 548, infringe upon the
constitutional precept regarding the promotion of social justice to insure the well-being
and economic security of all the people
Issues Ratio:
WON CA No 548 is unconstitutional for being an undue delegation of legislative power – by the State so that justice in its rational and objectively secular conception may at least be
NO approximated.

The provisions of CA No 548 do not confer legislative power upon the Director of Public
Works and the Secretary of Public Works and Communications.
The authority therein conferred upon them and under which they promulgated the rules
and regulations now complained of is not to determine what public policy demands but
merely to carry out the legislative policy laid down by the National Assembly.
The delegated power is not the determination of what the law shall be, but merely the
ascertainment of the facts and circumstances upon which the application of said law is to
be predicated.
To promulgate rules and regulations on the use of national roads and to determine when
and how long a national road should be closed to traffic, in view of the condition of the
road or the traffic thereon and the requirements of public convenience and interest, is an
administrative function which cannot be directly discharged by the National Assembly. It
must depend on the discretion of some other government official to whom is confided the
duty of determining whether the proper occasion exists for executing the law. But it cannot
be said that the exercise of such discretion is the making of the law.
WON CA No 548 constitutes as an unlawful interference with legitimate business or trade
and abridge the right to personal liberty and freedom of locomotion – NO
Social justice means the promotion of the welfare of all the people, the adoption by the
Government of measures calculated to insure economic stability of all the competent
elements of society, through the maintenance of a proper economic and social equilibrium
in the interrelations of the members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-constitutionally, through the exercise of
powers underlying the existence of all governments on the time-honored principle of salus
populi est suprema lex.
Social justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the protection that
should be equally and evenly extended to all groups as a combined force in our social and
economic life, consistent with the fundamental and paramount objective of the state of
promoting the health, comfort, and quiet of all persons, and of bringing about "the greatest
good to the greatest number."
Dispositive:
In view of the foregoing, the writ of prohibition prayed for is hereby denied, with costs
against the petitioner. So ordered.

Commonwealth Act No. 548 was passed by the National Assembly in the exercise of the
paramount police power of the state.

In enacting said law, therefore, the National Assembly was prompted by considerations of
public convenience and welfare. It was inspired by a desire to relieve congestion of traffic,
a menace to public safety. Public welfare, then, lies at the bottom of the enactment of said
law, and the state in order to promote the general welfare may interfere with personal
liberty, with property, and with business and occupations.

Persons and property may be subjected to all kinds of restraints and burdens, in order to
secure the general comfort, health, and prosperity of the state.

WON CA No 548 infringes upon the constitutional precept regarding the promotion of
social justice – NO

The promotion of social justice is to be achieved not through a mistaken sympathy towards
any given group. Social justice is "neither communism, nor despotism, nor atomism, nor
anarchy," but the humanization of laws and the equalization of social and economic forces BREWMASTER INTERNATIONAL INC. v. NAFLU
FACTS: Private respondent Estrada is a member of the respondent labor union. He did not
report for work for 1 month due to a grave family problem as his wife deserted him and
nobody was there to look after his children. He was required to explain. Finding his reasons
to be unjustified, the petitioner terminated him, since according to company rules, absence
for 6 consecutive days is considered abandonment of work.
ISSUE: Should a worker be summarily dismissed relying on some company rules?
HELD: No. While the employer is not precluded from prescribing rules and regulations to
govern the conduct of his employees, these rules and their implementation must be fair,
just and reasonable. No less than the Constitution looks with compassion on the
workingman and protects his rights not only under a general statement of a state policy but
under the Article on Social Justice and Human Rights, thus placing labor contracts on a
higher plane and with greater safeguards. Verily, relations between labor and capital are
not merely contractual. They are impressed with public interest and labor contracts must,
perforce, yield to the common good.
GR No. 110017, January 2, 1997
RODOLFO FUENTES, et al., petitioners vs NATIONAL LABOR RELATIONS COMMISSION, 5TH
DIVISION, CAGAYAN DE ORO CITY, AGUSAN PLANTATION INC., AND/OR CHANG CHEE
KONG,respondents.
FACTS: Petitioners were regular employees of Agusan Plantations, Inc. Claiming that it was
suffering business losses, head office in Singapore undertake retrenchment measures and
sent notices of termination to petitioners and the DOLE. Petitioners then filed a complaint
for illegal dismissal.
ISSUE: Was there a valid retrenchment?
HELD: NO. Under Art. 283 therefore retrenchment may be valid only when the following
requisites are met: (a) it is to prevent losses; (b) written notices were served on the
workers and the Department of Labor and Employment (DOLE) at least one (1) month
before the effective date of retrenchment; and, (c) separation pay is paid to the affected
workers.
There is no question that an employer may reduce its work force to prevent losses.
However, these losses must be serious, actual and real. [3] Otherwise, this ground for
termination of employment would be susceptible to abuse by scheming employers who
might be merely feigning losses in their business ventures in order to ease out employees.
Indeed, private respondents failed to prove their claim of business losses. What they
submitted to the Labor Arbiter were mere self-serving documents and allegations. Private
respondents never adduced evidence which would show clearly the extent of losses they
suffered as a result of lack of capital funding, which failure is fatal to their cause
CORAZON JAMER petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION
HERMOSISIMA, JR.,J.: Facts:
This complaint arose from the dismissal of the complainants Corazon Jamer and Cristina
Amortizido both were cashier of Isetann. They were both dismissed on the alleged ground
of dishonesty for incurring a shortage ofP15,353.78. Complainants were asked to explain
and they submitted their respective written explanations for the shortage. Respondents
placed both complainants under preventivesuspension for the alleged shortages.
Thereafter, respondents conducted an administrative investigation. Finding the explanation
of the complainants to be unsatisfactory, respondent dismissed the complainants from the
service. Aggrieved, complainant instituted this present action . The Labor Arbiter directed
the respondents to reinstate complainants to service with full backwages and without loss
of seniority rights. Isetann and John Go appealed the aforesaid decision to the NLRC. The
NLRC found that the complainants were validy dismissed for lack of confidence.
Issue: Whether NLRC is correct?
Held:
Yes. The failure of petitioners to report to management the aforementioned irregularities
constitute fraud or willful breach of the trust reposed in them by their employer or duly
authorized representative one of the just causes in terminating employment as provided
for by paragraph (c), Article 282 of the Labor Code, as amended. WHEREFORE,the assailed
decision of the National Labor Relations Commission in is hereby AFFIRMED.
MARCOPPER MINING CORPORATION v. NLRC, GR No. 103525, 1996-03-29
Facts:
On 23 August 1984, Marcopper Mining Corporation, a corporation duly organized and
existing under the laws of the Philippines, engaged in the business of mineral prospecting,
exploration and extraction, and private respondent NAMAWU-MIF, a labor federation duly
organized and... registered with the Department of Labor and Employment (DOLE), to
which the Marcopper Employees Union (the exclusive bargaining agent of all rank-and-file
workers of petitioner) is affiliated, entered into a Collective Bargaining Agreement (CBA)
effective from 1 May 1984 until
30 April 1987.
Prior to the expiration of the aforestated Agreement, on 25 July 1986, petitioner and
private respondent executed a Memorandum of Agreement (MOA) wherein the terms of
the CBA, specifically on matters of wage increase and facilities allowance, were modified
In compliance with the amended CBA, petitioner implemented the initial 5% wage increase
due on 1 May 1986.
On 1 June 1987, Executive Order (E.O.) No. 178 was promulgated mandating the
integration of the cost of living allowance under Wage Orders Nos. 1, 2, 3, 5 and 6 into the
basic wage of workers, its effectivity retroactive to 1 May 1987.[5] Consequently,...
effective on 1 May 1987, the basic wage rate of petitioner's laborers categorized as non-
agricultural workers was increased by P9.00 per day.
Petitioner implemented the second five percent (5%) wage increase due on 1 May 1987
and thereafter added the integrated COLA.
Private respondent, however, assailed the manner in which the second wage increase was
effected. It argued that the COLA should first be integrated into the basic wage before the
5% wage increase is computed.
Consequently, on 15 December 1988, the union filed a complaint for underpayment of
wages before the Regional Arbitration Branch IV, Quezon City.
On 24 July 1989, the Labor Arbiter promulgated a decision in favor of the union.
Petitioner appealed the Labor Arbiter's decision and on 18 November 1991 the NLRC
rendered its decision sustaining the Labor Arbiter's ruling.
It is petitioner's contention that the basic wage referred to in the CBA pertains to the
"unintegrated" basic wage. Petitioner maintains that the rules on interpretation of
contracts, particularly Art. 1371 of the New Civil Code which states that:
Art. 1371. In order to judge the intention of the contracting parties, their contemporaneous
and subsequent acts shall be principally considered.
Should govern.
law is clear and unambiguous. Unfortunately for petitioner, said law, by some uncanny
coincidence, retroactively took effect on the same date the CBA increase became effective.
Therefore, there cannot be any doubt that the computation of the CBA increase on the
basis of the "integrated" wage does not constitute a violation of the CBA.
What E.O. No. 178 did was exactly to integrate the COLA under Wage Orders Nos. 1, 2, 3, 5
and 6 into the basic pay so as to increase the statutory daily minimum wage.

Siding with the petitioner, the Solicitor General opines that for the purpose of complying
with the obligations imposed by the CBA, the integrated COLA should not be considered
due to the exclusivity of the benefits under the said CBA and E.O. No. 178.
Private respondent counters by asserting that the purpose, nature and essence of CBA
negotiation is to obtain wage increases and benefits over and above what the law provides
and that the principle of non-diminution of benefits should prevail.
Integration of monetary benefits into the basic pay of workers is not a new method of
increasing the minimum wage.
The purpose of E.O. No. 178 is to improve the lot of the workers covered by the said
statute. We are bound to ensure its fruition.
WHEREFORE, premises considered, the petition is hereby DISMISSED.

Issues: Principles:

What should be the basis for the computation of the CBA increase, the basic wage without While the terms and conditions of the CBA constitute the law between the parties, it is not,
the COLA or the so-called "integrated" basic wage which, by mandate of E.O. No. 178, however, an ordinary contract to which is applied the principles of law governing ordinary
includes the COLA. contracts. A CBA, as a labor contract within the contemplation of Article

Ruling:
We rule for the respondents.
The principle that the CBA is the law between the contracting parties stands strong and
true.[17] However, the present controversy involves not merely an interpretation of CBA
provisions. More importantly, it requires a determination of the effect of... an executive
order on the terms and the conditions of the CBA.
1700 of the Civil Code of the Philippines which governs the relations between labor and
capital, is not merely contractual in nature but impressed with public interest, thus, it must
yield to the common good. As such, it must be construed liberally rather than narrowly
and... technically, and the courts must place a practical and realistic construction upon it,
giving due consideration to the context in which it is negotiated and purpose which it is
intended to serve.

It is unnecessary to delve too much on the intention of the parties as to what they allegedly
meant by the term "basic wage" at the time the CBA and MOA were executed because
there is no question that as of 1 May 1987, as mandated by E.O. No. 178, the basic wage of
workers, or... the statutory minimum wage, was increased with the integration of the
COLA. As of said date, then, the term "basic wage" includes the COLA. This is what the law
ordains and to which the collective bargaining agreement of the parties must conform.

Petitioner's arguments eventually lose steam in the light of the fact that compliance with
the law is mandatory and beyond contractual stipulation by and between the parties;
consequently, whether or not petitioner intended the basic wage to include the COLA
becomes... immaterial. There is evidently nothing to construe and interpret because the

G.R. No. 111933 July 23, 1997
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and LETTIE P. CORPUZ, respondent.
ROMERO, J.:
This petition for certiorari pleads for the revocation of the November 16, 1992, decision of
the National Labor Relations Commission (NLRC), affirming in toto the resolution of Labor
Arbiter Jose G. De Vera dated February 28, 1991, as well as its resolution dated August 20,
1993, denying petitioner's motion for reconsideration for lack of merit.
Private respondent Lettie Corpuz was employed as traffic operator at the Manila
International Traffic Division (MITD) by the Philippine Long Distance Telephone Company
(PLDT) for ten years and nine months, from September 19, 1978, until her dismissal on June
17, 1989. Her primary task was to facilitate requests for incoming and outgoing
international calls through the use of a digital switchboard.
Sometime in December 1987, PLDT's rank-and-file employees and telephone operators
went on strike, prompting the supervisors of the MITD to discharge the former's duties to
prevent a total shutdown of its business operations. "While in the course of their
emergency assignments, two supervisors almost simultaneously received two different
requests for overseas calls bound for different Middle East countries and both callers
reported the same calling number (98-68-16)."1 The tone verifications having yielded
negative results, the callers were advised to hang up their telephones to enable the
supervisors to effect an alternative verification system by calling the same number again.
As in the first instance, the number remained unverified. Investigating the seemingly
anomalous incident, the matter was reported to the Quality Control Inspection Department
(QCID) which revealed that the subject number was temporarily disconnected on June 10,
1987, and permanently on September 24, 1987. It also showed that 439 overseas calls
were made through the same number between May and November 1987.
On account of such disclosure, the microfiches containing the completed calls through
telephone number 98-68-16 were ordered to be re-run. It yielded the following results: (1)
235 telephone operators handled the 439 calls placed through the supposedly
disconnected number; (2) respondent handled 56 or 12.8% of the total calls, while the
other operators had an average of only 1.8% calls each; (3) respondent completed one call
on May 23, 1987 and effected 34 calls after the disconnection, 24 of which were completed
through tone verification while the other 10 calls were done without the requisite tone
verification or call-back procedure, and 21 other calls were cancelled; (4) of the 21
cancelled calls handled by respondent, one bared a BU report (party unavailable) but
fetched a long OCD (operator call duration) of 13 minutes and 21 seconds while another
call registered a BB report (called party, busy) but with an OCD of 22 minutes and 34
seconds, both considered unusually protracted by respondent for holding a connection;
and (5) respondent made several personal calls to telephone numbers 96-50-72, 99-92-82
and 97-25-68, the latter being her home phone number.
Premised on the above findings, on July 26, 1988, MITD Manager Erlinda Kabigting directed
respondent to explain her alleged infraction, that is, facilitating 34 calls using the
disconnected number.
Instead of tendering the required explanation, respondent requested a formal investigation
to allow her to confront the witnesses and rebut the proofs that may be brought against
her. On grounds of serious misconduct and breach of trust, the Legal Department
recommended her dismissal. In a letter dated June 16, 1989, respondent was terminated
from employment effective the following day.
In a complaint for illegal dismissal filed by respondent against petitioner, Labor Arbiter Jose
G. De Vera rendered a decision, the dispositive portion of which reads thus:
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered
ordering the respondent company to reinstated the complaint to her former position with
all the rights, benefits and privileges thereto appertaining including seniority plus
backwages which as of February 28, 1991 already amounted to P103,381.50 (P5,043.00
mo. x. 20.5 mos.). Further, the respondent company is ordered to pay complainant
attorney's fees equivalent to ten percent (10%) of such backwages that the latter may
recover in this suit.
SO ORDERED.2
On appeal, said decision was affirmed by the NLRC on November 16, 1992. Its motion for
reconsideration having been denied on August 20, 1993, petitioner filed the instant
petition for certiorari.
The instant petition must be dismissed. Petitioner failed to adduce any substantial
argument that would warrant a reversal of the questioned decision.
Time and again, this Court has reminded employers that while the power to dismiss is a
normal prerogative of the employer, the same is not without limitations.3 The right of an
employer to freely discharge his employees is subject to regulation by the State, basically
through the exercise of its police power. This is so because the preservation of the lives
citizens is a basic duty of the State, an obligation more vital than the preservation of
corporate profits.4
Petitioner insists that respondent was guilty of defrauding them when she serviced 56 of
the 439 calls coming from telephone number 98-68-16 and received numerous requests for
overseas calls virtually from the same calling number, which could not have been a mere
coincidence but most likely was a pre-arranged undertaking in connivance with certain
subscribers.
The records show, however, that the subject phone calls were neither unusual nor
coincidental as other operators shared similar experiences. A certain Eric Maramba
declared that it is not impossible for an operator to receive continuous calls from the same
telephone number. He testified that at one time, he was a witness to several calls
consistently effected from 9:30 p.m. to 5:30 a.m. The calls having passed the verification
tone system, the incident was undoubtedly alarming enough but there was no way that he
or his co-operators could explain the same.
This Court agrees with the labor arbiter when he stated that the more frequent handling by
the respondent of overseas calls from the same calling number than other operators does
not give rise to the conclusion that, indeed, respondent was a party to such anomalous
transaction.
As regards petitioner's claim that no call can be filed through a disconnected line, a certain
Ms. Bautista averred getting the same subject number after going through the standard
verification procedures. She added that this complexity extends even to other
disconnected telephone lines. Equally important is the fact that on February 7, 1989, or
about two years after it was permanently disconnected, "telephone number 98-68-16 was
used in calling an international number, 561-6800, that lasted for 46 minutes."5 Telephone
operator number 448 seems to have been spared from any administrative sanction
considering that this lapse has aggravated the persistent problem concerning telephone
number 98-68-16.
Thus, Labor Arbiter de Vera correctly ruled:
It need not be emphasized here that there were lapses in certain operational aspects of the
respondent company which made the irregularity possible, for indeed there exists a
mystery about the serviceability of the subject telephone line. That there were personnel
of the respondent company involved who could have restored what was earlier
disconnected permanently appears certain. Nonetheless, exacting the ultimate blame upon
the respondent (complainant) in the absence of concrete inculpatory proofs of her
complexity (sic) to an anomaly if there be one, cannot be justified.6
This Court will not sanction a dismissal premised on mere conjectures and suspicions. To be
a valid ground for respondent's dismissal, the evidence must be substantial and not
arbitrary and must be founded on clearly established facts sufficient to warrant his
separation from work.7
It should be borne in mind that in termination cases, the employer bears the burden of
proving that the dismissal is for just cause failing which would mean that the dismissal is
not justified and the employee is entitled to reinstatement.8 The essence of due process in
administrative proceedings is the opportunity to explain one's side or a chance to seek
reconsideration of the action or ruling complained of.9 The twin requirements of notice
and hearing constitute the essential elements of due process. This simply means that the
employer shall afford the worker ample opportunity to be heard and to defend himself
with the assistance of his representative, if he so desires. Ample opportunity connotes
every kind of assistance that management must accord the employee to enable him to
prepare adequately for his defense including legal representation. 10 In the instant case,
the petitioner failed to convincingly establish valid bases on the alleged serious misconduct
and loss of trust and confidence.
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 tile liberal and
compassionate spirit of the law as provided for in Article 4 of the Labor Code, as amended,
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, 11 as well as the Constitutional mandate that the State shall afford full protection
to labor and promote full employment opportunities for all. Likewise, it shall guarantee the
rights of all workers to security of tenure. Such constitutional right should not be denied on
mere speculation of any unclear and nebulous basis. 12
WHEREFORE, in view of the foregoing, the instant petition is DISMISSED and the decision
dated November 16, 1992 is AFFIRMED. Costs against petitioner Philippine Long Distance
Telephone Co.
SO ORDERED.
JMM Promotion and Management, Inc. v. Court of Appeals G.R. No. 120095, [August 5,
1996], 329 PHIL 87-102
FACTS: Due to the death of one Maricris Sioson in 1991, President Aquino banned the
deployment of performing artists to Japan and other destinations. This was relaxed
however with the introduction of the Entertainment Industry Advisory Council which later
proposed a plan to POEA to screen and train performing artists seeking to go abroad.
The Federation of Entertainment Talent Managers of the Philippines (FETMOP for brevity)
filed a class suit on January 27, 1995 assailing Department Order No. 3, which establishes
various procedures and requirements for screening performing artists under a new system
of training, testing, certification and deployment. FETMOP contended that the said orders,
1.) violated the constitutional right to travel; 2.) abridged existing contracts for
employment; and 3.) deprived individual artists of their licenses without due process of
law. FETMOP also averred that the issuance of the Artist Record Book (ARB) was
discriminatory and illegal and in gross violation of the constitutional right to life liberty and
property. FETMOP prayed for the issuance of the writ of preliminary injunction against the
orders.
JMM Promotion and Management, Inc. (JMM for brevity) and Kary International, Inc. (Kary
for brevity) filed a motion for intervention in the civil case which was granted by the trial
court on February 15, 1995. However, on February 21, 1995, the trial court issued an order
denying petitioner’s prayer for writ of preliminary injunction and dismissed the compliant.
An appeal was made to the trial court regarding its decision but it was also however,
dismissed. As a consequences, ARB requirement was issued. The Court of Appeals upheld
the trial court’s decision and concluded that the said issuance constituted a valid exercise
of Police power.
ISSUE:
WON the assailed department issuances constituted a valid exercise by the state of the
police power
RULING:
The latin maxim salus populi est suprema lex embodies the character of the entire
spectrum of public laws aimed at promoting the general welfare of the people under the
State’s police power. As an inherent attribute of sovereignty which virtually “extends to all
public needs,” this “least limitable” of governmental powers grants a wide panoply of
instruments through which the state, as parens patriae gives effect to a host of its
regulatory powers. Describing the nature and scope of the police power, Justice Malcolm,
in the early case of Rubi v. Provincial Board of Mindoro (89 Phil. 660, 708, [1919]) wrote:
“The police power of the State,” one court has said . . . ‘is a power coexistensive with self-
protection, and is not inaptly termed ‘the law of overruling necessity.’ It may be said to be
that inherent and plenary power in the state which enables it to prohibit all things hurtful
to the comfort, safety and welfare of society.” Carried onward by the current of legislature.
The judiciary rarely attempts to dam the onrushing power of legislative discretion, provided
the purposes of the law do not go beyond the great principles that mean security for the
public welfare or do not arbitrarily interfere with the right of the individual.”
Thus, police power concerns government enactments which precisely interfere with
personal liberty or property in order to promote the general welfare or the common good.
As the assailed Department Order enjoys a presumed validity, it follows that the burden
rests upon petitioners to demonstrate that the said order, particularly, its ARB
requirement, does not enhance the public welfare or was exercised arbitrarily or
unreasonably.
A thorough review of the facts and circumstances leading to the issuance of the assailed
orders compels us to rule that the Artist Record Book requirement and the questioned
Department Order related to its issuance were issued by the Secretary of Labor pursuant to
a valid exercise of the police power.
OTHER DOCTRINES:
THE PROPER REGULATION OF A PROFESSION, CALLING, BUSINESS OR TRADE IS A VALID
EXERCISE THEREOF. — Nevertheless, no right is absolute, and the proper regulation of a
profession, calling business or trade has always been upheld as a legitimate subject of a
valid exercise of the police power by the state particularly when their conduct affects
either the execution of legitimate governmental functions, the preservation of the State,
the public health and welfare and public morals. According to the maxim, sic utere tuo ut
alienum non laedas, it must of course be within the legitimate range of legislative action to
define the mode and manner in which every one may so use his own property so as not to
pose injury to himself or others.
WHERE THE LIBERTY CURTAILED AFFECTS AT MOST THE RIGHT TO PROPERTY, THE
PERMISSIBLE SCOPE OF REGULATORY MEASURES IS MUCH WIDER. — In any case, where
the liberty curtailed affects at most the rights of property, the permissible scope of
regulatory measures is certainly much wider. To pretend that licensing or accreditation
requirements violates the due process clause is to ignore the settled practice, under the
mantle of the police power, of regulating entry to the practice of various trades or
professions. Professionals leaving for abroad are required to pass rigid written and practical
exams before they are deemed fit to practice their trade. Seamen are required to take tests
determining their seamanship. Locally, the Professional Regulation Commission has began
to require previously licensed doctors and other professionals to furnish documentary
proof that they had either re-trained or had undertaken continuing education courses as a
requirement for renewal of their licenses. It is not claimed that these requirements pose an
unwarranted deprivation of a property right under the due process clause. So long as
professionals and other workers meet reasonable regulatory standards no such deprivation
exists.
CONSTITUTIONAL LAW; STATE POLICIES; THE STATE SHALL AFFORD FULL PROTECTION TO
LABOR; ELUCIDATED. — Protection to labor does not indicate promotion of employment
alone. Under the welfare and social justice provisions of the Constitution, the promotion of
full employment, while desirable, cannot take a backseat to the government’s
constitutional duty to provide mechanisms for the protection of our work-force, local or
overseas. As this Court explained in Philippine Association of Service Exporters (PASEI) v.
Drilon, in reference to the recurring problems faced by our overseas workers: what
concerns the Constitution more paramountly is that such an employment be above all,
decent, just, and humane. It is bad enough that the country has to send its sons and
daughters to strange lands because it cannot satisfy their employment needs at home.
Under these circumstances, the Government is duty-bound to insure that our toiling
expatriates have adequate protection, personally and economically, while away from
home. A profession, trade or calling is a property right within the meaning of our
constitutional guarantees. One cannot be deprived of the right to work and the right to
make a living because these rights are property rights, the arbitrary and unwarranted
deprivation of which normally constitutes an actionable wrong.
BILL OF RIGHTS; NON-IMPAIRMENT OF OBLIGATIONS OF CONTRACTS; MUST YIELD TO THE
STATE’S POLICE POWER. — It is a futile gesture on the part of petitioners to invoke the non-
impairment clause of the Constitution to support their argument that the government
cannot enact the assailed regulatory measures because they abridge the freedom to
contract. In Philippine Association of Service Exporters, Inc. vs. Drilon, we held that “(t)he
non-impairment clause of the Constitution . . . must yield to the loftier purposes targeted
by the government.” Equally important, into every contract is read provisions of existing
law, and always, a reservation of the police power for so long as the agreement deals with
a subject impressed with the public welfare.
EQUAL PROTECTION CLAUSE; MERELY REQUIRES THAT ALL PERSONS BE TREATED ALIKE
UNDER LIKE CONDITIONS. — The equal protection clause is directed principally against
undue favor and individual or class privilege. It is not intended to prohibit legislation which
is limited to the object to which it is directed or by the territory in which it is to operate. It
does not require absolute equality, but merely that all persons be treated alike under like
conditions both as to privileges conferred and liabilities imposed. We have held, time and
again, that the equal protection clause of the Constitution does not forbid classification for
so long as such classification is based on real and substantial differences having a
reasonable relation to the subject of the particular legislation. If classification is germane to
the purpose of the law, concerns all members of the class, and applies equally to present
and future conditions, the classification does not violate the equal protection guarantee.
G.R. No. 81958
June 30, 1988
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,
vs.
HON. FRANKLIN M. DRILON as Secretary of Labor and Employment, and TOMAS
D. ACHACOSO, as Administrator of the Philippine Overseas Employment
Administration, respondents.
Gutierrez & Alo Law Offices for petitioner.
SARMIENTO, J.:
Fact:
The petitioner (PASEI), engaged principally in the recruitment of Filipino workers,
for overseas placement, challenged the Constitutional validity of Department
Order No. 1, Series of 1988, of the Department of Labor and Employment (DOLE),
in the character of “GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF
DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS,” It said that:
1. The D.O. is discriminatory against males or females;
2. That it “does not apply to all Filipino workers but only to domestic helpers and
females with similar skills;”
3. That it is violative of the right to travel.
Further, it contended that It was an invalid exercise of the lawmaking power, in a
sense that the police power being legislative, and not executive, in character. In its
supplement to the petition, PASEI invokes Section 3, of Article XIII, of the
Constitution, providing for worker participation “in policy and decision-making
processes affecting their rights and benefits as may be provided by law.”
Further, they argued that Department Order No. 1 was passed in the absence of
prior consultations. It is claimed, finally, to be in violation of the Charter’s non-
impairment clause, that it would cause “great and irreparable injury” that PASEI
members would face should the Order be further enforced.
Issue:
Whether the Department Order of the Respondent is in violation of the Equal
Protection Clause and Discriminatory against Sexes
Held:
No, the petitioner has shown no satisfactory reason why the contested measure
should be nullified. There is no question that Department Order No. 1 applies only
to “female contract workers,” but it does not thereby make an undue
discrimination between the sexes. It is well-settled that “equality before the law”
under the Constitution does not import a perfect Identity of rights among all men
and women.
It admits of classifications, provided that:
1. such classifications rest on substantial distinctions;
2. they are germane to the purposes of the law;
3. they are not confined to existing conditions; and
4. they apply equally to all members of the same class.
The Court is well aware of the unhappy plight that has befallen our female labor
force abroad, especially domestic servants, amid exploitative working conditions
marked by, in not a few cases, physical and personal abuse. The sordid tales of
maltreatment suffered by migrant Filipina workers, even rape and various forms
of torture, confirmed by testimonies of returning workers, are compelling motives
for urgent Government action. As precisely the caretaker of Constitutional rights,
the Court is called upon to protect victims of exploitation. In fulfilling that duty,
the Court sustains the Government’s efforts.
The State through the labor Secretary Exercise the police power which is a power
coextensive with self-protection, and it is not inaptly termed the “law of
overwhelming necessity.” It may be said to be that inherent and plenary power in
the State which enables it to prohibit all things hurtful to the comfort, safety, and
welfare of society.”
LVN Pictures, Inc v. Philippine Musicians Guild
G.R. No. L-12598
January 28, 1961
Facts:
Philippine Musicians Guild is a duly registered legitimate labor organization. LVN Pictures,
Inc., Sampaguita Pictures, Inc., and Premiere Productions, Inc. are corporations, duly
organized under the Philippine laws, engaged in the making of motion pictures and in the
processing and distribution thereof; that said companies employ musicians for the purpose
of making music recordings for title music, background music, musical numbers, finale
music and other incidental music. Ninety-five (95%) percent of all the musicians playing for
the musical recordings of said companies are members of the Philippine Musicians Guild.
The Guild prayed that it be certified as the sole and exclusive bargaining agency for all
musicians working in the aforementioned companies. In their respective answers, the latter
denied that they have any musicians as employees, and alleged that the musical numbers
in the filing of the companies are furnished by independent contractors.
The lower court sustained the theory of the Guild. A reconsideration of the order
complained of having been denied by the Court en banc, LVN Pictures, inc., and
Sampaguita Pictures, Inc., filed these petitions for review for certiorari.

Issue:

Whether or not the musicians are employees of the companies?

Ruling:

Yes. It is well settled that “an employer-employee relationship exists . . .where the person
for whom the services are performed reserves a right to control not only the end to be
achieved but also the means to be used in reaching such end . . . .”

In other words, to determine whether a person who performs work for another is the
latter’s employee or an independent contractor, the National Labor Relations relies on ‘the
right to control’ test. Under this test an employer-employee relationship exist where the
person for whom the services are performed reserves the right to control not only the end
to be achieved, but also the manner and means to be used in reaching the end.

In this case, the work of the musical director and musicians is a functional and integral part
of the enterprise performed at the same studio substantially under the direction and
control of the company.

Furthermore, the film companies summon the musicians to work, through the musical
directors. The film companies, through the musical directors, fix the date, the time and the
place of work. The film companies, not the musical directors, provide the transportation to
Rosario Bros v. Ople
and from the studio. The film companies furnish meal at dinner time.
FACTS: Private respondents are tailors hired by the petitioner in its tailoring department.
The motion picture director — not the musical director — “solely directs and performance
They were paid weekly wages on piece-work basis, minus the withholding tax of BIR. They
of the musicians before the camera“. The motion picture director “supervises the
were registered with SSS as employees of petitioner. They were required to report for work
performance of all the actors, including the musicians who appear in the scenes, so that in
and stay in the shop for no less than 8 hours a day. A master cutter distributed job orders
the actual performance to be shown in the screen, the musical director’s intervention has
equally. Private respondents filed a complaint for violation of PD 851(13th month pay) and
stopped.” Or, as testified to in the lower court, “the movie director tells the musical
PD 525 (Emergency Living Allowance) against petitioner.
director what to do; tells the music to be cut or tells additional music in this part or he
eliminates the entire music he does not (want) or he may want more drums or move violin ISSUE: WN an employer-employee relationship exists between petitioner and private
or piano, as the case may be”. The movie director “directly controls the activities of the respondents
musicians.” He “says he wants more drums and the drummer plays more” or “if he wants
more violin or he does not like that.” HELD: Yes. The existence of ER-EE relationship is determined by:

1. the selection and engagement of employee

2. payment of wages
3. power of dismissal
4. power to control employee’s conduct
Although the fourth element is the most important. An independent contractor is the one
who exercises independent employment and contracts to do a piece of work according to
his own methods without being subjected to control of his employer except as to the result
of his work. In the case at bar, the selection and hiring of respondents was done by
petitioner through the master cutter. Respondents received their weekly wages from
petitioner on piece-work basis within the meaning of the term “wage” under the Labor
Code, which defined as “the remuneration or earnings. However, designated, whether
fixed on a time, task, piece or commission basis, payable by an employer to an employee
under a written or unwritten contact for work done or to be done or for services rendered
or to be rendered. Petitioner also had the power to dismiss respondents, thus, the latter’s
conduct was controlled by petitioner. Respondents were allowed to register with SSS and
withholding taxes were also deducted from their wages. Wherefore, petition is dismissed.
VICENTE SY, TRINIDAD PAULINO, 6B’S TRUCKING CORPORATION, and SBT TRUCKING
CORPORATION, petitioners, vs. HON. COURT OF APPEALS and JAIME SAHOT, respondents.
[G.R. No. 142293. February 27, 2003]
FACTS:
Sometime in 1958, private respondent Jaime Sahot started working as a truck helper for
petitioners’ family-owned trucking business named Vicente Sy Trucking. In 1965, he
became a truck driver of the same family business, renamed T. Paulino Trucking Service,
later 6B’s Trucking Corporation in 1985, and thereafter known as SBT Trucking Corporation
since 1994. Throughout all these changes in names and for 36 years, private respondent
continuously served the trucking business of petitioners. When Sahot was 59 years old, he
incurred several absences due to various ailments. Particularly causing him pain was his left
thigh, which greatly affected the performance of his task as a driver. He inquired about his
medical and retirement benefits with the Social Security System (SSS) on April 25, 1994, but
discovered that his premium payments had not been remitted by his employer.Sahot filed
a week-long leave to get medical attention. He was treated for EOR, presleyopia,
hypertensive retinopathy G II and heart enlargement. Because of such, Belen Paulino of the
SBT Trucking Service management told him to file a formal request for extension of his
leave. When Sahot applied for an extended leave, he was threatened of termination of
employment should he refuse to go back to work. Eventually, Sahot was dismissed from
employment which prompted the latter to file an illegal dismissal case with the NLRC. For
their part, petitioners admitted they had a trucking business in the 1950s but denied
employing helpers and drivers. They contend that private respondent was not illegally
dismissed as a driver because he was in fact petitioner’s industrial partner. They add that it
was not until the year 1994, when SBT Trucking Corporation was established, and only then
did respondent Sahot become an employee of the company, with a monthly salary that
reached P4,160.00 at the time of his separation. The NLRC and the CA ruled that Sahot was
an employee of the petitioner.
ISSUE: Whether Sahot is an industrial partner
RULING:
No. Article 1767 of the Civil Code states that in a contract of partnership two or more
persons bind themselves to contribute money, property or industry to a common fund,
with the intention of dividing the profits among themselves. Not one of these
circumstances is present in this case. No written agreement exists to prove the partnership
between the parties. Private respondent did not contribute money, property or industry for
the purpose of engaging in the supposed business. There is no proof that he was receiving
a share in the profits as a matter of course, during the period when the trucking business
was under operation. Neither is there any proof that he had actively participated in the
management, administration and adoption of policies of the business. Thus, the NLRC and
the CA did not err in reversing the finding of the Labor Arbiter that private respondent was
an industrial partner from 1958 to 1994. On this point, the Court affirmed the findings of
the appellate court and the NLRC. Private respondent Jaime Sahot was not an industrial
partner but an employee of petitioners from 1958 to 1994. The existence of an employer-
employee relationship is ultimately a question of fact and the findings thereon by the NLRC,
as affirmed by the Court of Appeals, deserve not only respect but finality when supported
by substantial evidence. Substantial evidence is such amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.

Manila Golf & Country Club v. IAC and Fermin Llamar (G.R. No. 64948)
Facts:
Respondent Fermin Llamar and his fellow caddies filed with the Social Security Commission
for coverage and availment of benefits under the Social Security Act. Subsequently, all but
2 of the original 17 petitioners withdrew their claim for social security coverage. The case
continued and was adjudicated by the SSC only as regards the 2 holdouts dismissing their
petition and stating that the caddies were never employees of petitioner. An appeal was
taken to the IAC but the other caddy’s appeal was dismissed at his instance, leaving
respondent Llamar the lone appellant. The IAC found for Llamar finding employer-
employee relationship between him and petitioner.
Issue:
Whether or not respondent Llamar is an employee of petitioner.
Ruling: NO.
The various matters of conduct, dress, language, etc. covered by the petitioner’s
regulations, does not, in the mind of the Court, so circumscribe the actions or judgment of
the caddies concerned as to leave them little or no freedom of choice whatsoever in the
manner of carrying out their services.
The Court agrees with petitioner that the group rotation system so-called, is less a measure
of employer control than an assurance that the work is fairly distributed, a caddy who is
absent when his turn number is called simply losing his turn to serve and being assigned
instead the last number for the day.
In the final analysis, petitioner has no way of compelling the presence of the caddies as
they are not required to render a definite number of hours of work on a single day. Even
the group rotation of caddies is not absolute because a player is at liberty to choose a
caddy of his preference regardless of the caddy’s order in the rotation. It can happen that a
caddy who has rendered services to a player on one day may still find sufficient time to
work elsewhere. Under such circumstances, he may then leave the premises of petitioner
and go to such other place of work that he wishes. Or a caddy who is on call for a particular
day may deliberately absent himself if he has more profitable caddying, or another,
engagement in some other place. These are things beyond petitioner’s control and for
which it imposes no direct sanctions on the caddies.
Semblante et al., vs. Court of Appeals, et al. G.R. No. 196426 August 15, 2011
FACTS:
Petitioners Marticio Semblante (Semblante) and Dubrick Pilar (Pilar) assert that they were
hired by respondents-spouses Vicente and Maria Luisa Loot, the owners of Gallera de
Mandaue (the cockpit), as the official masiador and sentenciador, respectively, of the
cockpit sometime in 1993. As the masiador, Semblante calls and takes the bets from the
gamecock owners and other bettors and orders the start of the cockfight. He also
distributes the winnings after deducting the arriba, or the commission for the cockpit.
Meanwhile, as the sentenciador, Pilar oversees the proper gaffing of fighting cocks,
determines the fighting cocks' physical condition and capabilities to continue the cockfight,
and eventually declares the result of the cockfight.
They work every Tuesday, Wednesday, Saturday, and Sunday every week, excluding
monthly derbies and cockfights held on special holidays. Their working days start at 1:00
p.m. and last until 12:00 midnight, or until the early hours of the morning depending on the
needs of the cockpit. Petitioners had both been issued employees' identification cards that
they wear every time they report for duty. They alleged never having incurred any
infraction and/or violation of the cockpit rules and regulations. On November 14, 2003,
however, petitioners were denied entry into the cockpit upon the instructions of
respondents, and were informed of the termination of their services effective that date.
This prompted petitioners to file a complaint for illegal dismissal against respondents.
respondents, since their relationship fails to pass muster the four-fold test of employment
We have repeatedly mentioned in countless decisions: (1) the selection and engagement of
the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to
control the employee's conduct, which is the most important element. As found by both
the NLRC and the CA, respondents had no part in petitioners' selection and management;
petitioners' compensation was paid out of the arriba (which is a percentage deducted from
the total bets), not by petitioners; and petitioners performed their functions as masiador
and sentenciador free from the direction and control of respondents. In the conduct of
their work, petitioners relied mainly on their "expertise that is characteristic of the
cockfight gambling," and were never given by respondents any tool needed for the
performance of their work. Respondents, therefore, could never have been illegally
dismissed since they are not employees of the respondents.

Labor Arbiter Julie C. Rendoque found petitioners to be regular employees of respondents

as they performed work that was necessary and indispensable to the usual trade or
business of respondents for a number of years. The Labor Arbiter also ruled that petitioners
were illegally dismissed, and so ordered respondents to pay petitioners their backwages
and separation pay.

The respondents filed an Appeal during the 10-day appeal period but was unable to post a
cash or surety bond. Thus for an unperfected appeal the NLRC dismissed the same. It was
only on October 11, 2006 they were able to post bond dated October 6, 2006. The NLRC
ruled on the Motion for Reconsideration although there was belated filing of the cash or
surety bond. The NLRC held in its Resolution of October 18, 2006 that there was no
employer-employee relationship between petitioners and respondents, respondents
having no part in the selection and engagement of petitioners, and that no separate
individual contract with respondents was ever executed by petitioners.

ISSUES: Whether or not the Appeal has been perfected even after a belated filing of the
cash or surety bond. Whether or not there was an employer-employee relationship
between the petitioner and respondent.

RULING:

Time and again, however, this Court, considering the substantial merits of the case, has
relaxed this rule on, and excused the late posting of, the appeal bond when there are
strong and compelling reasons for the liberality, such as the prevention of miscarriage of
justice extant in the case or the special circumstances in the case combined with its legal
merits or the amount and the issue involved. After all, technical rules cannot prevent
courts from exercising their duties to determine and settle, equitably and completely, the
rights and obligations of the parties. This is one case where the exception to the general
rule lies. While respondents had failed to post their bond within the 10-day period
provided above, it is evident, on the other hand, that petitioners are NOT employees of
Brotherhood Labor Unity Movement of the Phil. v. Zamora
Facts:
The petitioners are workers who have been employed at the San Miguel Parola Glass
Factory as “pahinantes” or “kargadors” for almost seven years. They worked exclusively at
the SMC plant, never having been assigned to other companies or departments of San
Miguel Corp, even when the volume of work was at its minimum. Their work was neither
regular nor continuous, depending on the volume of bottles to be loaded and unloaded, as
well as the business activity of the company. However, work exceeded the eight-hour day
and sometimes, necessitated work on Sundays and holidays. -for this, they were neither
paid overtime nor compensation.
Sometime in 1969, the workers organized and affiliated themselves with Brotherhood
Labor Unity Movement (BLUM). They wanted to be paid to overtime and holiday pay. They
pressed the SMC management to hear their grievances. BLUM filed a notice of strike with
the Bureau of Labor Relations in connection with the dismissal of some of its members. San
Miguel refused to bargain with the union alleging that the workers are not their employees
but the employees of an independent labor contracting firm, Guaranteed Labor Contractor.
The workers were then dismissed from their jobs and denied entrance to the glass factory
despite their regularly reporting for work. A complaint was filed for illegal dismissal and
unfair labor practices.
Issue:
Whether or not there was employer-employee (ER-EE)relationship between the workers
and San Miguel Corp.
Held:
YES. In determining if there is an existence of the (ER-EE) relationship, the four-fold test
was used by the Supreme Court. These are:
· The selection and engagement of the employee
· Payment of wages
· Power of dismissal
· Control Test- the employer’s power to control the employee with respect to the
means and methods by which work is to be accomplished
In the case, the records fail to show that San Miguel entered into mere oral agreements of
employment with the workers. Considering the length of time that the petitioners have
worked with the company, there is justification to conclude that they were engaged to
perform activities necessary in the usual business or trade. Despite past shutdowns of the
glass plant, the workers promptly returned to their jobs. The term of the petitioner’s
employment appears indefinite and the continuity and habituality of the petitioner’s work
bolsters the claim of an employee status.
As for the payment of the workers’ wages, the contention that the independent
contractors were paid a lump sum representing only the salaries the workers where
entitled to have no merit. The amount paid by San Miguel to the contracting firm is no
business expense or capital outlay of the latter. What the contractor receives is a
percentage from the total earnings of all the workers plus an additional amount from the
earnings of each individual worker.
The power of dismissal by the employer was evident when the petitioners had already
been refused entry to the premises. It is apparent that the closure of the warehouse was a
ploy to get rid of the petitioners, who were then agitating the company for reforms and
benefits.
The inter-office memoranda submitted in evidence prove the company’s control over the
workers. That San Miguel has the power to recommend penalties or dismissal is the
strongest indication of the company’s right of control over the workers as direct employer.
*SC ordered San Miguel to reinstate the petitioners with 3 years backwages.
G.R. No. L-55674 July 25, 1983
LA SUERTE CIGAR AND CIGARETTE FACTORY,
vs. DIR. BUREAU OF LABOR RELATIONS, THE LA SUERTE
CIGAR AND CIGARETTE FACTORY PROVINCIAL (Luzon) AND
METRO MANILA SALES FORCE ASSOCIATION-NATU, and THE
NATIONAL ASSOCIATION OF TRADE UNIONS, .
ISSUE: Whether the employees of petitioner company in which
case they should be included in the 30% jurisdictional
requirement necessary to support the petition for certification
election, or independent contractors and hence, excluded
therefrom
SUMMARY:  the employer's powers and duties with respect to the hiring,
firing, and payment of the contractor's servants;
In the determination of the basic issue raised in the "control test"
earlier laid down
in Investment Planning Corp. vs. Social Security System, 21 SCRA
924, and in Social Security System vs. Hon. Court of Appeals and
Shriro (Phils.) Inc., 37 SCRA 579 are authoritative and controlling.

4 fold-test:

(1) the selection and engagement of the employee;

(2) the payment of wages;

(3) the power of dismissal; and

(4) the power to control the employees' conduct-although

the latter is the most important element.

Factors to determine existence of independent contract relationship .

—

An independent contractor is one who exercises independent

employment and contracts to do a piece of work according to his
own methods and without being subject to control of his employer
except as to the result of the work. '

Among the factors to be considered are whether the contractor is

carrying on an independent business;

 whether the work is part of the employer's general business;

the nature and extent of the work; the skill required; the
term and duration of the relationship;
 the right to assign the performance of the work to another;
the power to terminate the relationship;
 the existence of a contract for the performance of a
specified piece of work;
 the control and supervision of the work;
  the control of the premises; the duty to supply the
premises, tools, appliances, material and labor, and the
mode, manner, and terms of payment.'
“whether the employer controls or has reserved the right to
control the employee not only as to the result of the work to be
done but also as to the means and methods by which the same is
to be accomplished.”
FACTS:
On 1979, the La Suerte Cigar and Cigarette Factory Provincial
(Luzon) and Metro Manila Sales Force Association (union) for and
was granted chapter status by the National Association of Trade
Unions (NATU).
Thereafter, 31 local members signed a joined letter withdrawing
their membership from NATU.
On April 18, 1979, the local union and NATU filed a petition for
direct certification or certification election which alleged among
others, that forty-eight of the sixty sales personnel of the
Company were members of the local union; that the petition is
supported by no less than 75% of the sales force; that there is
no existing recognized labor union in the Company representing
the said sales personnel; that there is likewise no existing
collecting bargaining agreement; and that there had been no
certification election in the last twelve months preceding the
filing of the petition.
Company’s argument: No EE-ER relationship
Filed a motion to dismiss the petition on the ground that it is not
supported by at least 30% of the members of the proposed
bargaining unit because (a) of the alleged forty-eight (48)
members of the local union, thirty-one (31) had withdrawn prior
to the filing of the petition; and (b) fourteen (14) of the alleged
members of the union were not employees of the Company but
were independent contractors.
NATU & union’s: argument:
NATU and the local union opposed the Company's motion to
dismiss alleging that the fourteen dealers are actually
employees of the Company because they are subject to its
control and supervision.
On August 29, 1979, the Med-Arbiter issued an order
dismissing the petition for lack of merit as the fourteen dealers
who joined the union should not be counted in determining
the 30% consent requirement because they are not
employees but independent contractors and the withdrawal of
the 31 salesmen from the union prior to the filing of the
petition for certification election was uncontroverted by the
parties.
ISSUES:
1. W/N the 14 dealers are employees or independent
contractors. Yes, Independent Contractor.
2. W/N the withdrawal of 31 union members from the
NATU affected the petition for certification election
insofar as the thirty per cent requirement is concerned;
Yes. While there might be force or duress of
withdrawal, this must be proven.
3. W/N the withdrawal of the petition for certification
election by the NATU, through its President and legal
counsel, was valid and effective.
RULING:
We hold and rule that the 14 members of respondent local union
are dealers or independent contractors. They are not employees
of petitioner company. With the withdrawal by 31 members of
their support to the petition prior to or before the filing thereof,
making a total of 45, the remainder of 3 out of the 48 alleged to
have supported the petition can hardly be said to represent
the union.
Hence, the dismissal of the petition by the Med-Arbiter
was correct and justified.
Respondent Director committed grave abuse of discretion in
reversing the order of the Med- Arbiter.
Failure to establish this juridical relationship between the
union members
and the employer affects the legality of the union itself. No Mention of Wage payment- Indication of non-existence
It means the ineligibility of the union members to of EE-ER relationship
present a petition for certification election as well as to
vote therein '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
It is important in the determination of who shall be on a time, task, piece, commission basis, or other method
included in a proposed bargaining unit because it is the of calculating the same, which is payable by an employer
sine qua non, the fundamental and essential condition that under a written or
a bargaining unit be composed of employees. Corollarily,
when a petition for certification election is supported by 48
signatories in a bargaining unit composed of 60 salesmen,
but 14 of the 48 lacks employee status, the petition is
vitiated thereby. Herein lies the importance of resolving the
status of the dealers in this case.

Status thereby created is one of independent

contractorship, pursuant to the first rule in the
interpretation of the signed Dealership contracts

It is likewise immediately noticeable that no such words as

"to hire and employ" are present. The Dealership
Agreement uses the words "the factory has accepted the
application of (name of applicant) and therefore has
appointed him as one of its dealers"; whereas the Dealership
Supplementary Agreement is prefaced with the statement:
"For and in consideration of the mutual covenants and
agreements made herein, by one to the other, the
COMPANY and the DEALER by these presents, enter into
this Supplementary Agreement whereby the COMPANY will
avail of the services of the DEALER to handle the sale and
distribution of the cigarette products". Nothing in the terms
and conditions likewise reveals that the dealers were
engaged as employees.
unwritten contract of employment for work done or to be and details of performance is merely speculative and
done or for services rendered or to be rendered, and conjectural.
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 ...

Precisely, there was need to change the contract of

employment because of the change of relationship,
from an employee to that of an independent dealer or
contractor. The employees were free to enter into the
new status, to sign or not to sign the new agreement. As
in the Mafinco case, the respondents therein as in the
instant case, were free to reject the terms of the
dealership but having signed it, they were bound by its
stipulations and the consequences thereof under
existing labor laws. The fact that the 14 local union
members voluntarily executed with La Suerte formal
dealership agreements which indicate the distribution
and sale of La Suerte cigarettes signifies that they were
acting as independent businessmen.

It is not disputed that under the dealership agreement,

the dealer purchases and sells the cigarettes
manufactured by the company under and for his own
account. The dealer places his order for the purchase of
cigarettes to be sold by him in a particular territory by
filling up an Issuance Slip. The dealers do not devote
their full time in selling company products. They are
likewise engaged in other livelihood and businesses
while selling cigarettes manufactured by the company.

We agree with the petitioner. We hold further that the

terms and conditions for the termination of the contract
are the usual and common stipulations in independent
contractorship agreements. In any event, the contention
that the totality of the powers expressly reserved to the
company establish company control over the manner Insular Life Assurance v. NLRC and Melecio Basiao (G.R. No. 84484)
Facts: The Court, therefore, rules that under the contract invoked by him, Basiao was not
an employee of the petitioner, but a commission agent, an independent contractor
Petitioner Insular Life entered into a contract with respondent Basiao where the whose claim for unpaid commissions should have been litigated in an ordinary civil
latter is authorized to solicit for insurance policies. Sometime later, the parties action.
entered into another contract which caused Basiao to organize an agency in order
to fulfill its terms. The contract being subsequently terminated by petitioner, Basiao *In contrast to the case decided by the Court 10 years after, Insular Life Assurance
sued the latter which prompted also for the termination of their engagement under v. NLRC and Pantaleon De Los Reyes.
the first contract. Basiao thus filed before the Ministry of Labor seeking to recover
alleged unpaid commissions. Petitioner contends that Basiao is not an employee
but an independent contractor for which they have no obligation to pay said
commissions. The Labor Arbiter found for Basiao ruling that there exists employer-
employee relationship between him and petitioner. NLRC affirmed.

Issue:

Whether or not employer-employee relationship existed between petitioner and

Basiao.

Ruling: NO.

In determining the existence of employer-employee relationship, the following

elements are generally considered, namely: (1) the selection and engagement of
the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
power to control the employees’ conduct — although the latter is the most
important element. It should, however, be obvious that not every form of control
that the hiring party reserves to himself over the conduct of the party hired in
relation to the services rendered may be accorded the effect of establishing an
employer-employee relationship between them in the legal or technical sense of
the term.

Rules and regulations governing the conduct of the business are provided for in the
Insurance Code and enforced by the Insurance Commissioner. It is, therefore, usual
and expected for an insurance company to promulgate a set of rules to guide its
commission agents in selling its policies that they may not run afoul of the law and
what it requires or prohibits. None of these really invades the agent’s contractual
prerogative to adopt his own selling methods or to sell insurance at his own time
and convenience, hence cannot justifiably be said to establish an employer- June 10, 2004 | G.R. No. 138051
employee relationship between him and the company.
Jose "Jay" Y. Sonza, petitioner
ABS-CBN Broadcasting Corp., respondent
FACTS:
In May 1994, ABS-CBN signed an Agreement with the Mel and Jay Management
and Development Corporation (MJMDC). MJMDC agreed to provide Jay Sonza’s
services exclusively to ABS-CBN as talent for radio and television. ABS-CBN agreed
to pay for Sonza's services a monthly talent fee of ₱310,000 for the first year and
₱317,000 for the second and third year of the Agreement.
On April 1, 1996, Sonza wrote a letter wrote a letter to ABS-CBN President Eugenio
Lopez III, accusing ABS-CBN of violating the Agreement.
On April 30, 1996, Sonza filed a complaint before the Department of Labor and
Employment (DOLE), alleging that that ABS-CBN did not pay his salaries, separation
pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance
and amounts due under the Employees Stock Option Plan.
ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee
relationship existed between the parties.
LABOR ARBITER: Dismissed Sonza's complaint for lack of jurisdiction, ruling that
because Sonza is a "talent," he cannot be considered an employee.
NLRC: Dismissed Sonza's Motion for Reconsideration.
COURT OF APPEALS: Affirmed NLRC ruling. The CA ruled that the allegations of
Sonza against ABS-CBN did not constitute a labor dispute because there was no
employer-employee relationship to begin with. If anything, Sonza's allegations
constitute an action for breach of contractual obligation, which is intrinsically a civil
dispute to be resolved by a civil court, not the Labor Arbiter or the NLRC.
ISSUE:
Whether Jay Sonza was an employee of ABS-CBN? -- NO.
HELD:
The Supreme Court held that Sonza was not an employee of ABS-CBN. As a "talent,"
he was an independent contractor. In coming up with this conclusion, the Court
looked at the essential elements of employer-employee relationship and applied
the control test.
(a) Selection and engagement of employee
ABS-CBN engaged Sonza's services to co-host its television and radio programs
because of his peculiar skills, talent and celebrity status. These are indicative, but
not conclusive, of an independent contractual relationship
(b) Payment of wages
The Court held that whatever benefits Sonza enjoyed (SSS, Medicare, 13th month
pay) arose from contract and not because of an employer-employee relationship
(c) Power of dismissal
For violation of any provision of the Agreement, either party may terminate their
relationship. Sonza failed to show that ABS-CBN could terminate his services on
grounds other than breach of contract, such as retrenchment to prevent losses as
provided under labor laws.
(d) Power of control
The control test is the most important test our courts apply in distinguishing an
employee from an independent contractor. This test is based on the extent of
control the hirer exercises over a worker. The greater the supervision and control
the hirer exercises, the more likely the worker is deemed an employee. The
converse holds true as well – the less control the hirer exercises, the more likely the
worker is considered an independent contractor.
In Sonza's case, ABS-CBN did not exercise control over the means and methods of
his work. The Court found that ABS-CBN was not involved in the actual
performance that produced the finished product of Sonza's work.
Second, the fact that he was subjected to ABS-CBN's rules and standards of
performance was not determinative of control as it was under his contract that he "
shall abide with the rules and standards of performance covering talents of ABS-
CBN."
Third, the "exclusivity" clause in the Agreement was not a form of control. In the
broadcast industry, exclusivity is not necessarily the same as control. The hiring of
exclusive talents is a widespread and accepted practice in the entertainment
industry. This practice is not designed to control the means and methods of work of
the talent, but simply to protect the investment of the broadcast station.
Finally, the Supreme Court held that the right of labor to security of tenure as
guaranteed in the Constitution arises only if there is an employer-employee
relationship under labor laws. Not every performance of services for a fee creates
an employer-employee relationship.
To hold that every person who renders services to another for a fee is an employee
- to give meaning to the security of tenure clause - will lead to absurd results."
SAN MIGUEL CORPORATION vs NATIONAL LABOR RELATIONS COMMISSION and
RUSTICO VEGA G.R. No. 80774, May 31, 1988
FACTS:
San Miguel Corporation sponsored an Innovation Program and under which, the
management undertook to grant cash awards to all SMC employees except
higher-ranked personnel who submit to the Corporation ideas and suggestions
found to be beneficial to the Corporation. Rustico Vega then submitted a proposal
but was not accepted. Vega filed a complaint against the company with the
Regional Arbitration Branch No. VII, contending that he should be paid 60,000 since
his idea was implemented. The petitioner in his answer stated that they turned
down the proposal for lack of originality. The labor Arbiter dismissed the complaint
on the ground that the money claim is not a necessary incident of his employment.
Upon appeal of Vega to the NLRC, it ordered the petitioner to pay the 60,0000.
Petitioner then seek to annul the judgment on the ground that the Labor Arbiter
and NLRC have no jurisdiction over the case.
ISSUE:
Whether or not the fact that the money claim of an employee arose out of or in
connection with employment relation with his company, is enough to bring such
money claim within the original and exclusive jurisdiction of Labor Arbiter.
HELD:
No, just because the claim arises from employer-employee relationship, it does not
follow that it is automatically within the jurisdiction of the Labor Arbiter.
The company’s undertaking, though unilateral in origin, could nonetheless ripen
into an enforceable contractual (facio ut des) obligation on the part of petitioner
Corporation under certain circumstances. Thus, whether or not an enforceable
contract, albeit implied arid innominate, had arisen between petitioner
Corporation and private respondent Vega in the circumstances of this case, and if
so, whether or not it had been breached, are preeminently legal questions,
questions not to be resolved by referring to labor legislation and having nothing to
do with wages or other terms and conditions of employment, but rather having
recourse to our law on contracts.
If the relief sought is to be resolved not by reference to the Labor Code or other
labor relations statute or a collective bargaining agreement but by the general civil
law, the jurisdiction over the dispute belongs to the regular courts of justice and
not to the Labor Arbiter and the NLRC. In such situations, resolution of the dispute
requires expertise, not in labor management relations nor in wage structures and
other terms and conditions of employment, but rather in the application of the
general civil law.
Pepsi Cola v. Gal-lang
GR No. 89621
Labor Relations: Jurisdiction
Facts:
The private respondents were employees of the petitioner who were suspected of
complicity in the irregular disposition of empty Pepsi Cola bottles. On July 16, 1987,
the petitioners filed a criminal complaint for theft against them but this was later
withdrawn and substituted with a criminal complaint for falsification of private
documents. On November 26, 1987, after a preliminary investigation conducted by
the Municipal Trial Court, the complaint was dismissed. The dismissal was affirmed
by the Office of the Provincial Prosecutor.
Meantime, allegedly after an administrative investigation, the private respondents
were dismissed by the petitioner company on November 23, 1987. As a result, they
filed a complaint for illegal dismissal before the Labor Arbiter, and demanded
reinstatement with damages. They also filed a separate civil complaint against the
petitioners for damages arising from what they claimed to be their malicious
prosecution before the RTC.
The petitioners moved to dismiss the civil complaint on the ground that the trial
court had no jurisdiction over the case because it involved employee-employer
relations that were exclusively cognizable by the labor arbiter.
The motion was granted. However, the respondent judge, acting on the motion for
reconsideration, reinstated the complaint, saying it was “distinct from the labor
case for damages now pending before the labor courts.”
Issue:
Whether the trial court has jurisdiction over the case.
Held:
Yes. The trial court has jurisdiction over the case.
The petitioners invoke Article 217 of the Labor Code and a number of decisions of
this Court to support their position that the private respondents’ civil complaint for
damages falls under the jurisdiction of the labor arbiter. The Court held at the
outset that the case is not in point because what was involved there was a claim
arising from the alleged illegal dismissal of an employee, who chose to complain to
the regular court and not to the labor arbiter.
It must be stressed that not every controversy involving workers and their
employers can be resolved only by the labor arbiters. This will be so only if there is
a “reasonable causal connection” between the claim asserted and employee-
employer relations to put the case under the provisions of Article 217. Absent such
a link, the complaint will be cognizable by the regular courts of justice in the
exercise of their civil and criminal jurisdiction.
The case at bar involves a complaint for damages for malicious prosecution which
was filed with the Regional Trial Court by the employees of the defendant
company. It does not appear that there is a “reasonable causal connection”
between the complaint and the relations of the parties as employer and
employees. The complaint did not arise from such relations. What the employees
are alleging is that the petitioners acted with bad faith when they filed the criminal
complaint. This is a matter which the labor arbiter has no competence to resolve as
the applicable law is not the Labor Code but the Revised Penal Code.
Ernesto Medina Et Al., V. Hon. Floreliana Castro-Bartolome (1982)
G.R. No. L-59825 September 11, 1982
Lessons Applicable: Unjust dismissal (Torts and Damages)
Laws Applicable:
FACTS:
Cosme de Aboitiz, acting in his capacity as President and Chief Executive Officer of
the defendant Pepsi-Cola Bottling Company of the Philippines, Inc., went to the
Pepsi-Cola Plant in Muntinlupa, Metro Manila and without any provocation,
shouted and maliciously humiliated Ernesto Medina and Jose G. Ong:
GOD DAMN IT. YOU FUCKED ME UP ... YOU SHUT UP! FUCK YOU! YOU ARE BOTH
SHIT TO ME! YOU ARE FIRED (referring to Ernesto Medina). YOU TOO ARE FIRED!
'(referring to Jose Ong ) for having allegedly delayed the use of promotional crowns
effected on the very day that plaintiffs were awarded rings of loyalty to the
Company, 5 days before Christmas and on the day when the employees' Christmas
party was held so that when Medina and Ong went home that day and found their
wives and children already dressed up for the party, they didn't know what to do
and so they cried unashamedly
A joint criminal complaint for oral defamation against Aboitiz
Provincial Fiscal: dismissed the complaint since uttered not to slander but to
express anger and displeasure
Petition for Review with the office of the Secretary of Justice (now Ministry of
Justice): reversed
Aboitiz filed a motion to dismiss on the ground of lack of jurisdiction but it was
dismissed since the complaint for civil damages is clearly not based on an
employer-employee relationship but on the manner of plaintiffs' dismissal and the
effects flowing therefrom
This case was filed on May 10, 1979. The amendatory decree, P.D. 1367, which took
effect on May 1, 1978 and which provides that Regional Directors shall not indorse
and Labor Arbiters shall not entertain claims for moral or other forms of damages,
now expressly confers jurisdiction on the courts in these cases, specifically under
the plaintiff's causes of action
alreadly settled by jurisprudence that mere asking for reinstatement does not
remove from the CFI jurisdiction over the damages
17 days after that order of dismissal, or on May 10, 1979, filed for damages
In my opinion the dismissal of the civil action for damages is correct because the
claims of Medina and Ong were within the exclusive jurisdiction of the Labor
Arbiter and the NLRC, as originally provided in article 217 of the Labor Code and as
reaffirmed in Presidential Decree No. 1691. Medina and Ong could not split their
cause of action against Aboitiz and Pepsi-Cola.

The case must involve unfair labor practices to bring it within the jurisdiction of the
CIR (now NLRC)

A second motion to dismiss was filed because of the promulgation of P.D. No. 1691
amending Art. 217 of the Labor Code of the Philippines and Batasan Pambansa
Bldg. 70 which took effect on May 1, 1980, amending Art. 248 of the Labor Code.

jurisdiction over employee-employer relations and claims of workers have been

removed from the Courts of First Instance

ISSUE: W/N the Labor Code has any relevance to the reliefs sought

HELD: NO. petition is granted

simple action for damages for tortuous acts is governed by the Civil Code and not
the Labor Code

Separate Opinions

AQUINO, J.,dissenting:

I dissent with due deference to the opinion penned by Mr. Justice Abad Santos

The two signed on January 5, 1978 letters of resignation and quitclaims and were
paid P93,063 and P84,386 as separation pay, respectively

More than a month after their dismissal, or on January 27, 1978, Medina and Ong
filed with the Ministry of Labor, a complaint for illegal dismissal - dismissed that
complaint because of their resignation and quitclaim.
PNB vs. Cabansag by the POEA. When she was illegally terminated, she already possessed the POEA
employment certificate.
Date: June 21, 2005
2 A migrant worker “refers to a person who is to be engaged, is engaged or has
Ponente: J. Panganiban been engaged in a remunerated activity in a state of which he or she is not a legal
resident; to be used interchangeably with overseas Filipino worker.” Here,
Facts:
Cabansag was a Filipino, not a legal resident of Singapore, and employed by
petitioner in its branch office in Singapore. She is clearly an OFW/migrant worker.
Florence Cabansag went to Singapore as a tourist. While she was there, she looked
Thus, she has the option where to file her Complaint for illegal dismissal. She can
for a job and eventually applied with the Singapore Branch of the Philippine
either file at the Regional Arbitration Branch where she resides or the RAB where
National Bank. PNB is a private banking corporation organized and existing under
the employer is situated. Thus, in filing her Complaint before the RAB office in
Philippine laws. She was eventually employed and was issued an employment pass.
Quezon City, she has made a valid choice of proper venue.
In her job offer, it was stated, among others, that she was to be put on probation
for 3 months and termination of her employment may be made by either party
3 The appellate court was correct in holding that respondent was already a regular
after 1 day notice while on probation, and 1 month notice or 1 month pay in lieu of
employee at the time of her dismissal, because her three-month probationary
notice upon confirmation. She accepted the terms and was issued an OEC by the
period of employment had already ended. This ruling is in accordance with Article
POEA. She was commended for her good work. However, she was informed by
281 of the Labor Code: “An employee who is allowed to work after a probationary
Ruben Tobias, the bank president, that she would have to resign in line with some
period shall be considered a regular employee.” Indeed, petitioner recognized
cost cutting and realignment measures of the company. She refused but was
respondent as such at the time it dismissed her, by giving her one month’s salary in
informed by Tobias that if she does not resign, he will terminate her instead.
lieu of a one-month notice, consistent with provision No. 6 of her employment
Contract.
Issues:

1 W/N the arbitration branch of the NLRC has jurisdiction

2 W/N the arbitration of the NLRC in the NCR is the proper venue

3 W/N Cabansag was illegally dismissed

Ruling:

1 Labor arbiters have original and exclusive jurisdiction over claims arising from
employer-employee relations including termination disputes involving all workers,
including OFWs. Here, Cabansag applied for and secured an OEC from the POEA
through the Philippine Embassy. The OEC authorized her working status in a foreign
country and entitled her to all benefits and processes under our statutes. Although
she may been a direct hire at the commencement of her employment, she became
an OFW who was covered by Philippine labor laws and policies upon certification
URBANES vs SECRETARY OF LABOR AND EMPLOYMENT Case Digest The Court ruled in Lapanday that the RTC has jurisdiction over the subject matter of
the present case. It is well settled in law and jurisprudence that where no
PLACIDO O. URBANES, JR. v. SECRETARY OF LABOR AND EMPLOYMENT 397 SCRA employer- employee relationship exists between the parties and no issue is
531 (2003) involved which may be resolved by reference to the Labor Code, other labor
statutes or any collective bargaining agreement, it is the Regional Trial Court that
FACTS: Petitioner Placido O. Urbanes agreed to provide security services to Social
has jurisdiction. In its complaint, private respondent is not seeking any relief under
Security Systems (SSS). During the pendency of their agreement, Urbanes
the Labor Code but seeks payment of a sum of money and damages on account of
requested SSS for an upward adjustment of their contract rate in compliance with
petitioner's alleged breach of its obligation under their Guard Service Contract. The
the mandated wage increases.
action is within the realm of civil law hence
SSS ignored the request which led Urbanes to pull out his agency’s services and to
jurisdiction over the case belongs to the regular courts. While the resolution of the
subsequently file a complaint against SSS for the implementation of the wage
issue involves the application of labor laws, reference to the labor code was only
increase. The Regional Director of the DOLE-NCR issued an order in favor of
for the determination of the solidary liability of the petitioner to the respondent
Urbanes. SSS filed an appeal to the Secretary of Labor who later on set aside the
where no employer-employee relation exists.
order of the Regional Director.
In the case at bar, even if Urbanes filed the complaint on his and also on behalf of
Urbanes filed an appeal by certiorari to the Supreme Court stating that the
the security guards, the relief sought has to do with the enforcement of the
Secretary of Labor does not have jurisdiction to review appeals from decisions of
contract between him and the SSS which was deemed amended by virtue of Wage
the Regional Director over complaints for recovery of wages when it should have
Order No. NCR-03. The controversy subject of the case at bar is thus a civil dispute,
been appealed to the National Labor Relations Commission. SSS, on the other hand,
the proper forum for the resolution of which is the civil courts.
contends that Art. 128, not Art. 129 of the Labor Code should be applied.
But even assuming arguendo that Urbanes’ complaint were filed with the proper
ISSUE: Whether or not the DOLE Secretary can exercise jurisdiction over decisions
forum, for lack of cause of action it must be dismissed. In fine, the liability of the
of Regional Directors involving complaints for recovery of wages
SSS to reimburse Urbanes’ arises only if and when Urbanes pays his employee-
security guards
HELD: When the relief sought is not under the Labor Code but for payment of a
sum of money and damages on a breach of contract, it is within the realm of civil
―the increases‖ mandated by Wage Order No. NCR-03. The Court in Lapanday
law and jurisdiction belongs to the regular courts.
Agricultural Development Corporation v. Court of Appeals held that: ―It is only
when the contractor pays the increases mandated that it can claim an adjustment
Neither the Ubanes’ contention nor the SSS’ is impressed with merit. Lapanday
from the principal to cover the increases payable to the security guards.‖
Agricultural Development Corporation v. Court of Appeals instructs so. In that case,
the security agency filed a complaint before the Regional Trial Court (RTC) against
The records do not show that Urbanes’ has paid the mandated increases to the
the principal or client Lapanday for the upward adjustment of the contract rate in
security guards. The security guards in fact have filed a complaint with the NLRC
accordance with Wage Order Nos. 5 and 6. Lapanday argued that it is the National
against Urbanes’ relative to, among other things, underpayment of wages.
Labor Relations Commission, not the civil courts, which has jurisdiction to resolve
the issue in the case, it involving the enforcement of wage adjustment and other
benefits due the agency’s security guards as mandated by several wage orders.