G.R. No.

118088 November 23, 1995

MAINLAND CONSTRUCTION, CO., INC., and/or LUCITA LU CARABUENA, ROBERT L.

CARABUENA, ELLEN LU CARABUENA, and MARTIN LU, petitioners, vs.
MILA MOVILLA, ERNESTO MOVILLA, JR., MILA JUDITH C. MOVILLA, JUDE BRIX C.
MOVILLA, JONARD ELLERY C. MOVILLA, AND MAILA JONAH M. QUIMBO, surviving heirs of
ERNESTO MOVILLA, and THE HONORABLE COMMISSIONER of the NATIONAL LABOR
RELATIONS COMMISSION-5TH DIVISION, respondents

FACTS: Ernesto Movilla worked as an administrative officer of the company for several years and was given a
fixed salary every month, registered with the Social Security System (SSS) as an employee of petitioner
Corporation. His contributions to the SSS, Medicare and Employees Compensation Commission (ECC) were
deducted from his monthly earnings by his said employer.

On April 12, 1987, during petitioner corporation's annual meeting of stockholders, Movilla was elected member of
the Board of Directors and as Administrative Manager.

Petitioner corporation was ordered by DOLE to pay to its thirteen employees, which included Movilla, the total
amount of P309,435.89, representing their salaries, holiday pay, service incentive leave pay differentials, unpaid
wages and 13th month pay on the basis of its routine inspection on petitioner corporation, finding that it
committed such irregularities in the conduct of its business as underpayment of wages, unpaid 13th month pay, etc.

All the employees listed in the DOLE's order were paid by petitioner corporation, except Ernesto Movilla.

Ernesto Movilla filed a case before the LA. LA dismissed holding that the controversy presented by complainant is
intra-corporate in nature and is within the jurisdiction of the Securities and Exchange Commission.

On appeal to the NLRC, NLRC reversed the LA, ruled that the issue in the case was one which involved a labor
dispute between an employee and petitioner corporation.

ISSUE: Whether or not the NLRC has jurisdiction.

HELD: In the case at bench, the claim for unpaid wages and separation pay filed by the complainant against
petitioner corporation involves a labor dispute. It does not involve an intra-corporate matter, even when it is
between a stockholder and a corporation. It relates to an employer-employee relationship which is distinct from the
corporate relationship of one with the other. Moreover, there was no showing of any change in the duties being
performed by complainant as an Administrative Officer and as an Administrative Manager after his election by the
Board of Directors. What comes to the fore is whether there was a change in the nature of his functions and not
merely the nomenclature or title given to his job.

In order that the SEC can take cognizance of a case, the controversy must pertain to any of the following
relationships: a) between the corporation, partnership or association and the public; b) between the corporation,
partnership or association and its stockholders, partners, members or officers;
c) between the corporation, partnership or association and the State as far as its franchise, permit or license to
operate is concerned; and d) among the stockholders, partners or associates themselves.

Movilla's registration in the SSS by petitioner corporation added strength to the conclusion that he was petitioner
corporation's employee as coverage by the said law is predicated on the existence of an employer-employee
relationship.

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Since Ernesto Movilla's complaint involves a labor dispute, it is the NLRC, under Article 217 of the Labor Code
of the Philippines, which has jurisdiction over the case at bench.

G.R. No. L-50459 August 25, 1989

LEONARDO D. SUARIO, petitioner, vs.

BANK OF THE PHILIPPINE ISLANDS, Davao Branch or The Manager/Cashier and NATIONAL
LABOR RELATIONS COMMISSION, respondents.

FACTS: Petitioner was an employee of the respondent bank. While he was an employee, he pursued his studies of
law and eventually graduated.

That sometime in March, 1976, the complainant verbally requested the then Asst. Vice-President and Branch
Manager, Mr. Armando N. Guilatco, for a 6-month leave of absence without pay purposely to take the 1976 pre-
bar review in Manila and that the said Mr. Guilatco informed the complainant that there would be no problem as
regards the requested leave of absence.

Complainant's request was allegedly disapproved and that failure to report back for work would be a conclusive
proof that the complainant is no longer interested to continue working and therefore considered resigned.

Petitioner failed to file his opposition for he was already in Manila taking up the review and was then very busy
since the bar examination was only in two months.

The petitioner, with himself as his own counsel, filed this petition for review of the decision of the National Labor
Relations Commission (NLRC) which denied his claim for damages arising from an alleged illegal dismissal. In
addition to the separation pay already awarded to him, the petitioner asks for P9,995.00 actual damages,
P300,000.00 moral damages, P200,000.00 exemplary damages, and attorney's fees to be determined by the Court.

ISSUE: Whether or not the NLRC has jurisdiction to award the damages herein asked by petitioner.

HELD: On May 1, 1980, Presidential Decree No. 1691 (which substantially reenacted Article 217 in its original
form) nullified Presidential Decree No. 1367 and restored to the Labor Arbiters and the NLRC their jurisdiction to
award all kinds of damages in cases arising from employer-employee relations (Pepsi-Cola Bottling Company of
the Philippines v. Martinez, G.R. No. 58877).

While the NLRC has jurisdiction, petitioner is not entitled to such damages.

In a long line of cases, we have consistently ruled that in the absence of a wrongful act or omission or of fraud or
bad faith, moral damages cannot be awarded.

We do not find any bad faith or fraud on the part of the bank officials who denied the petitioner's request for a six
months' leave of absence without pay. If the petitioner was made to believe that his request would be granted, we
can not fault the branch manager or his subsequent replacement for giving their assurances. They were merely
personal assurances which could be reconsidered on the basis of later developments or upon consultation with
higher authorities and which are not binding. Certainly, the bank officials who gave their verbal assurances had
only the petitioner's paramount welfare in their minds. There is no evidence to show that they meant to deceive the
petitioner. They themselves thought that such a request would be granted. Unfortunately, company policy had to
be followed. The fact that the petitioner's request for six months' leave of absence was denied does not ipso facto
entitle him to damages. The records also show that there was a prior application with the Ministry of Labor to

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terminate the petitioner's employment. A copy of said application was furnished to the petitioner. The petitioner,
however, did not oppose such application nor did he do anything to preserve his right.

G.R. Nos. L-53364-65 March 16, 1987

DOMICIANO SOCO, petitioner, vs.

MERCANTILE CORPORATION OF DAVAO AND THE HONORABLE AMADO G. INCIONG,
DEPUTY MINISTER, MINISTRY OF LABOR, respondents.

FACTS: From the evidence presented, petitioner twice used the company vehicle in pursuing his own personal
interests, on company time and deviating from his authorized route, all without permission. To cap off his
infractions, petitioners stubbornly declined even to satisfy MERCO's request for an explanation or to attend a
grievance conference to discuss violations.

Petitioner submits that he has been employed in the company for eighteen (18) years. Petitioner avers that the
damage inflicted on MERCO by his activities due to his misuse of the company vehicle during working hours did
not hamper the smooth business operations of MERCO.

Petitioner was placed on preventive suspension pending the approval of MERCO's application for clearance to
terminate the services of the former before the Regional Director of MOLE.

Petitioner filed a complaint for unfair labor practice against MERCO for five (5) days suspension imposed on him
by respondent Company, was on account of his union activities.

The two cases were consolidated and tried jointly as agreed to by the contending parties.

Regional Director granted private respondent's application to terminate the employment of petitioner. He upheld
the preventive suspension imposed by MERCO on herein petitioner and dismissed the latter's complaint for unfair
labor practice. Said order was then appealed by herein petitioner but the Deputy Minister of Labor, on October 25,
1979, affirmed the appealed order. The dismissal of petitioner's appeal led to the filing of the instant petition for
certiorari.

Petitioner assails the action taken by the respondent Deputy Minister of Labor as done with grave abuse of
discretion amounting to lack of or in excess of jurisdiction. Petitioner contends that Policy Instruction No. 6 of the
Ministry of Labor and Employment (MOLE) indicates that the Regional Director has no jurisdiction to hear and
decide unfair labor practice cases because the exclusive original jurisdiction over such labor cases belongs to the
Conciliation Section of the Regional Office of the MOLE. Petitioner avers, that such cases, therefore, should be
first resolved by the Labor Arbiter and not the Regional Director.

ISSUE: Whether or not the Regional Director has jurisdiction.

HELD: Yes. "after voluntarily submitting a cause and encountering an adverse decision on the merits, it is too late
for the loser to question the jurisdiction or power of the court." The Court "frowns upon the undesirable practice of
a party submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack
of jurisdiction when adverse."

Petitioner obviously accepted the jurisdiction of the Regional Director by presenting his evidence. By having
asked for affirmative relief, without challenging the Regional Director's power to hear and try his complaint for
unfair labor practice, he cannot rightfully now challenge the resolution made in said cases by the same Director,
based on the latter's alleged lack of jurisdiction.
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It is the prerogative of an employer company to prescribe reasonable rules and regulations necessary or proper for
the conduct of its business and to provide certain disciplinary measures in order to implement said rules and to
assure that the same would be complied with. A rule prohibiting employees from using company vehicles for
private purpose without authority from management is, from our viewpoint, a reasonable one.

The Court is not unmindful of the fact that petitioner has, as he says, been employed with petitioner Company for
eighteen (18) years. On this singular consideration, the Court deems it proper to afford some equitable relief to
petitioner due to the past services rendered by him to MERCO. Thus, it is but appropriate that petitioner should be
given by respondent MERCO, separation pay, equivalent to one month salary for every year of his service to said
Company.

[G.R. No. 79596. February 10, 1989.]

C.W. TAN MFG. AND FEDERICO JAVIER as Plant Superintendent and JAIME SO as Plant
Manager, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION, ASSOCIATED LABOR
UNIONS (ALU) AND ANGELINO BRIMON, Respondents.

FACTS: Associated Labor Union (ALU) and Angelino Brimon, a member thereof, filed a complaint for illegal
dismissal against petitioners.

Labor Arbiter dismissed the complaint on the ground that the dismissal of Brimon was for a valid cause and that
he was afforded due process.

Brimon appealed to the NLRC. However, in a resolution dated May 28, 1984, the appeal was dismissed for having
been filed out of time as there was no proof of service of the appeal to the adverse party. So, Brimon moved for
reconsideration of the said Resolution.

In a decision dated March 12, 1987, public respondent reconsidered its Resolution and finding that private
respondent was arbitrarily dismissed without the benefit of a formal investigation, set aside the decision of the
labor arbiter and issued a new one reinstating private respondent to his former or equivalent position without loss
of seniority rights or other privileges and benefits with full backwages from the period of dismissal up to the actual
date of reinstatement. A Motion for Reconsideration of said decision filed by petitioners was denied by public
respondent on July 20, 1987.

ISSUE: Whether or not the questioned decision of the labor arbiter had become final and executory for failure of
private respondents to perfect their appeal on time.

HELD: No. The failure of the appellant (private respondent) to furnish a copy of the appeal memorandum to the
adverse party is not a jurisdictional defect, but is a mere formal lapse as ruled by this court in several instances.

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And when as in this case such requirement was complied with although beyond the period of appeal, the appeal
should be given due course.

Where as in this case the fee had been paid belatedly, the broader interest of justice and the desired objective in
deciding the case on the merits demand that the appeal be given due course.

The technical rules of evidence are not binding in proceedings before the NLRC or labor arbiters and that all
reasonable means should be used to ascertain the facts of the case without regard to the technicalities of law or
procedure.
The Court finds that there is a cogent basis in the finding of public respondent NLRC that private respondent
Brimon was arbitrarily dismissed without benefit of a formal investigation.

[G.R. No. 88864. January 17, 1990.]

PACIFIC MILLS, INC., Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION AND/OR CITY

SHERIFF OF MANILA, Respondents.

FACTS: The entry of judgment having been effected, the NLRC in the process of execution of the said decision
of the labor arbiter made a computation of the award to the private respondents in the amount of P680,037.30 in
the case Pacific Mills, Inc., v. National Labor Relations Commission, Et Al., G.R. No. 79535, on August 3, 1988.
Petitioner now sought to stay execution reconsideration citing supervening events that affect the computation of
the award such as as the length of service of the private respondents, the wage exemptions granted, and payments
already made on the award.
ISSUE: Whether or not the execution of a final judgment of the National Labor Relations Commission (NLRC)
may be stayed in view of supervening events.

HELD: There can be no question that the supervening events cited by petitioner would certainly affect the
computation of the award in the decision of the NLRC. It is the duty of the NLRC to consider the same and inquire
into the correctness of the execution, as such supervening events may affect such execution.
Thus, a prompt and immediate determination of these objections and a recomputation of the award should be
made. A denial of this opportunity to right a clear error in the execution of the judgment constitutes a grave abuse
of discretion.

[G.R. No. 87297. August 5, 1991.]

ALFREDO VELOSO and EDITO LIGUATON, Petitioners, v.

DEPARTMENT OF LABOR AND EMPLOYMENT, NOAH’S ARK SUGAR CARRIERS AND WILSON
T. GO, Respondents.

FACTS: In the case at bar, the petitioners claim that they were forced to sign their respective releases in favor of
their employer, the herein private respondent, by reason of their dire necessity. The quitclaims were signed by the
petitioners while the motion for reconsideration was still pending in the DOLE, which finally denied it on March
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7, 1989. The latter, for its part, insists that the petitioner entered into the compromise agreement freely and with
open eyes and should not now be permitted to reject their solemn commitments.

ISSUE: Whether or not the quitclaims were valid.

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

"Dire necessity" is not an acceptable ground for annulling the releases, especially since it has not been shown that
the employees had been forced to execute them. It has not even been proven that the considerations for the
quitclaims were unconscionably low and that the petitioners had been tricked into accepting them. While it is true
that the writ of execution dated November 24, 1987, called for the collection of the amount of P46,267.92 each for
the petitioners, that amount was still subject to recomputation and modification as the private respondent’s motion
for reconsideration was still pending before the DOLE. The fact that the petitioners accepted the lower amounts
would suggest that the original award was exorbitant and they were apprehensive that it would be adjusted and
reduced. In any event, no deception has been established on the part of the private respondent that would justify
the annulment of the petitioners’ quitclaims.

The applicable law is Article 227 of the Labor Code providing clearly as follows:

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

The petitioners cannot renege on their agreement simply because they may now feel they made a mistake in not
awaiting the resolution of the private respondent’s motion for reconsideration and recomputation. The possibility
that the original award might have been affirmed does not justify the invalidation of the perfectly valid
compromise agreements they had entered into in good faith and with full voluntariness.

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