G.R. No. 85985.
 August 13, 1993.* was already declared a policy of the State: “(d) To promote the enlightenment of
PHILIPPINE AIRLINES, INC. (PAL), petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, LABOR ARBITER ISABEL P. ORTIGUERRA,
and PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION (PALEA),
respondents.
Labor Laws; Company rules on discipline; Management prerogative not
boundless.—PAL asserts that when it revised its Code on March 15, 1985, there was
no law which mandated the sharing of responsibility therefor between employer and
employee. Indeed, it was only on  VOL. 225, AUGUST 13, 1993  303
________________
*
 THIRD DIVISION.
302
302  SUPREME COURT REPORTS ANNOTATED  workers concerning their rights as employees demand no less than the observance of
Philippine Airlines, Inc. vs. NLRC
March 2, 1989, with the approval of Republic Act No. 6715, amending Article
211 of the Labor Code, that the law explicitly considered it a State policy “(t)o
ensure the participation of workers in decision and policy-making processes affecting
their rights, duties and welfare.” However, even in the absence of said clear
provision of law, the exercise of management prerogatives was never considered
boundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]), it was held that
management’s prerogatives must be without abuse of discretion.
Same; Same; Same; Line drawn between policies which are purely business-
oriented and those which affect rights of employees.—A close scrutiny of the
objectionable provisions of the Code reveals that they are not purely business-
oriented nor do they concern the management aspect of the business of the company
as in the San Miguel case. The provisions of the Code clearly have repercusions on
the employees’ right to security of tenure. The implementation of the provisions may
result in the deprivation of an employee’s means of livelihood which, as correctly
pointed out by the NLRC, is a property right (Callanta vs. Carnation Philippines,
Inc., 145 SCRA 268 [1986]). In view of these aspects of the case which border on
infringement of constitutional rights, we must uphold the constitutional requirements
for the protection of labor and the promotion of social justice, for these factors,
according to Justice Isagani Cruz, tilt “the scales of justice when there is doubt, in
favor of the worker” (Employees Association of the Philippine American Life
Insurance Company vs. NLRC, 199 SCRA 628 [1991] 635). Verily, a line must be
drawn between management prerogatives regarding business operations per se and
those which affect the rights of the employees. In treating the latter, management
should see to it that its employees are at least properly informed of its decisions or
modes of action. xxx xxx.
Same; Same; Same; Employee’s right to participate in policymaking upheld.
—Indeed, industrial peace cannot be achieved if the employees are denied their just
participation in the discussion of matters affecting their rights. Thus, even before
Article 211 of the Labor Code (P.D. 442) was amended by Republic Act No. 6715, it
workers concerning their rights and obligations . . . as employees.” This was, of
course, amplified by Republic Act No. 6715 when it decreed the “participation of
workers in decision and policy making processes affecting their rights, duties and
welfare.” PAL’s position that it cannot be saddled with the “obligation” of sharing
management prerogatives as during the formulation of the Code, Republic Act No.
6715 had not yet been enacted (Petitioner’s Memorandum, p. 44; Rollo, 
303
 
Philippine Airlines, Inc. vs. NLRC
p. 212), cannot thus be sustained. While such “obligation” was not yet founded
in law when the Code was formulated, the attainment of a harmonious labor-
management relationship and the then already existing state policy of enlightening
transparency in managerial moves affecting employees’ rights.
PETITION for certiorari to review the decision of the National Labor Relations
Commission.
The facts are stated in the opinion of the Court.
     Solon Garcia for petitioner.
     Adolpho M. Guerzon for respondent PALEA.
MELO, J.:
In the instant petition for certiorari, the Court is presented the issue of whether or not
the formulation of a Code of Discipline among employees is a shared responsibility
of the employer and the employees.
On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966
Code of Discipline. The Code was circulated among the employees and was
immediately implemented, and some employees were forthwith subjected to the
disciplinary measures embodied therein.
Thus, on August 20, 1985, the Philippine Airlines Employees Association (PALEA)
filed a complaint before the National Labor Relations Commission (NLRC) for
unfair labor practice (Case No. NCR-7-2051-85) with the following remarks: "ULP
with arbitrary implementation of PAL's Code of Discipline without notice and prior
discussion with Union by Management" (Rollo, p. 41). In its position paper, PALEA
contended that PAL, by its unilateral implementation of the Code, was guilty of
unfair labor practice, specifically Paragraphs E and G of Article 249 and Article 253
of the Labor Code. PALEA alleged that copies of the Code had been circulated in
limited numbers; that being penal in nature the Code must conform with the
1
requirements of sufficient publication, and that the Code was arbitrary, oppressive,
and prejudicial to the rights of the employees. It prayed that implementation of the
Code be held in abeyance; that PAL should discuss the substance of the Code with
PALEA; that employees dismissed under the Code be reinstated and their cases
subjected to further hearing; and that PAL be declared guilty of unfair labor practice
and be ordered to pay damages (pp. 7-14, Record.)
PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer
to prescibe rules and regulations regarding employess' conduct in carrying out their
duties and functions, and alleging that by implementing the Code, it had not violated
the collective bargaining agreement (CBA) or any provision of the Labor Code.
Assailing the complaint as unsupported by evidence, PAL maintained that Article
253 of the Labor Code cited by PALEA reffered to the requirements for negotiating a
CBA which was inapplicable as indeed the current CBA had been negotiated.
In its reply to PAL's position paper, PALEA maintained that Article 249 (E) of the
Labor Code was violated when PAL unilaterally implemented the Code, and cited
provisions of Articles IV and I of Chapter II of the Code as defective for,
respectively, running counter to the construction of penal laws and making
punishable any offense within PAL's contemplation. These provisions are the
following:
Sec. 2. Non-exclusivity. — This Code does not contain the entirety
of the rules and regulations of the company. Every employee is
bound to comply with all applicable rules, regulations, policies,
procedures and standards, including standards of quality,
productivity and behaviour, as issued and promulgated by the
company through its duly authorized officials. Any violations
thereof shall be punishable with a penalty to be determined by the
gravity and/or frequency of the offense.
Sec. 7. Cumulative Record. — An employee's record of offenses
shall be cumulative. The penalty for an offense shall be determined
on the basis of his past record of offenses of any nature or the
absence thereof. The more habitual an offender has been, the
greater shall be the penalty for the latest offense. Thus, an
employee may be dismissed if the number of his past offenses
warrants such penalty in the judgment of management even if each
offense considered separately may not warrant dismissal. Habitual
offenders or recidivists have no place in PAL. On the other hand,
due regard shall be given to the length of time between
commission of individual offenses to determine whether the
employee's conduct may indicate occasional lapses (which may
nevertheless require sterner disciplinary action) or a pattern of
incorrigibility.
Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a conference
but they failed to appear at the scheduled date. Interpreting such failure as a waiver
of the parties' right to present evidence, the labor arbiter considered the case
submitted for decision. On November 7, 1986, a decision was rendered finding no
bad faith on the part of PAL in adopting the Code and ruling that no unfair labor
practice had been committed. However, the arbiter held that PAL was "not totally
fault free" considering that while the issuance of rules and regulations governing the
conduct of employees is a "legitimate management prerogative" such rules and
regulations must meet the test of "reasonableness, propriety and fairness." She found
Section 1 of the Code aforequoted as "an all embracing and all encompassing
provision that makes punishable any offense one can think of in the company"; while
Section 7, likewise quoted above, is "objectionable for it violates the rule against
double jeopardy thereby ushering in two or more punishment for the same
misdemeanor." (pp. 38-39, Rollo.)
The labor arbiter also found that PAL "failed to prove that the new Code was amply
circulated." Noting that PAL's assertion that it had furnished all its employees copies
of the Code is unsupported by documentary evidence, she stated that such "failure"
on the part of PAL resulted in the imposition of penalties on employees who thought
all the while that the 1966 Code was still being followed. Thus, the arbiter concluded
that "(t)he phrase ignorance of the law excuses no one from compliance . . . finds
application only after it has been conclusively shown that the law was circulated to
all the parties concerned and efforts to disseminate information regarding the new
law have been exerted. (p. 39, Rollo.) She thereupon disposed:
WHEREFORE, premises considered, respondent PAL is hereby
ordered as follows:
1. Furnish all employees with the new Code of Discipline;
2. Reconsider the cases of employees meted with penalties under
the New Code of Discipline and remand the same for further
hearing; and
3. Discuss with PALEA the objectionable provisions specifically
tackled in the body of the decision.
All other claims of the complainant union (is) [are] hereby,
dismissed for lack of merit.
2
 SO ORDERED. (p. 40, Rollo.)
PAL appealed to the NLRC. On August 19, 1988, the NLRC through Commissioner
Encarnacion, with Presiding Commissioner Bonto-Perez and Commissioner Maglaya
concurring, found no evidence of unfair labor practice committed by PAL and
affirmed the dismissal of PALEA's charge. Nonetheless, the NLRC made the
following observations:
Indeed, failure of management to discuss the provisions of a
contemplated code of discipline which shall govern the conduct of
its employees would result in the erosion and deterioration of an
otherwise harmonious and smooth relationship between them as
did happen in the instant case. There is no dispute that adoption of
rules of conduct or discipline is a prerogative of management and
is imperative and essential if an industry, has to survive in a
competitive world. But labor climate has progressed, too. In the
Philippine scene, at no time in our contemporary history is the
need for a cooperative, supportive and smooth relationship
between labor and management more keenly felt if we are to
survive economically. Management can no longer exclude labor in
the deliberation and adoption of rules and regulations that will
affect them.
The complainant union in this case has the right to feel isolated in
the adoption of the New Code of Discipline. The Code of
Discipline involves security of tenure and loss of employment — a
property right! It is time that management realizes that to attain
effectiveness in its conduct rules, there should be candidness and
openness by Management and participation by the union,
representing its members. In fact, our Constitution has recognized
the principle of "shared responsibility" between employers and
workers and has likewise recognized the right of workers to
participate in "policy and decision-making process affecting their
rights . . ." The latter provision was interpreted by the
Constitutional Commissioners to mean participation in
"management"' (Record of the Constitutional Commission, Vol.
II).
In a sense, participation by the union in the adoption of the code if
conduct could have accelerated and enhanced their feelings of
belonging and would have resulted in cooperation rather than
resistance to the Code. In fact, labor-management cooperation is
now "the thing." (pp. 3-4, NLRC Decision ff. p. 149, Original
Record.)
Respondent Commission thereupon disposed:
WHEREFORE, premises considered, we modify the appealed
decision in the sense that the New Code of Discipline should be
reviewed and discussed with complainant union, particularly the
disputed provisions [.] (T)hereafter, respondent is directed to
furnish each employee with a copy of the appealed Code of
Discipline. The pending cases adverted to in the appealed decision
if still in the arbitral level, should be reconsidered by the
respondent Philippine Air Lines. Other dispositions of the Labor
Arbiter are sustained.
SO ORDERED. (p. 5, NLRC Decision.)
PAL then filed the instant petition for certiorari charging public respondents with
grave abuse of discretion in: (a) directing PAL "to share its management prerogative
of formulating a Code of Discipline"; (b) engaging in quasi-judicial legislation in
ordering PAL to share said prerogative with the union; (c) deciding beyond the issue
of unfair labor practice, and (d) requiring PAL to reconsider pending cases still in the
arbitral level (p. 7, Petition; p. 8, Rollo.)
As stated above, the Principal issue submitted for resolution in the instant petition is
whether management may be compelled to share with the union or its employees its
prerogative of formulating a code of discipline.
PAL asserts that when it revised its Code on March 15, 1985, there was no law
which mandated the sharing of responsibility therefor between employer and
employee.
Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715,
amending Article 211 of the Labor Code, that the law explicitly considered it a State
policy "(t)o ensure the participation of workers in decision and policy-making
processes affecting the rights, duties and welfare." However, even in the absence of
said clear provision of law, the exercise of management prerogatives was never
considered boundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]) it was held
that management's prerogatives must be without abuse of discretion.
In San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25
[1989]), we upheld the company's right to implement a new system of distributing its
products, but gave the following caveat:
So long as a company's management prerogatives are exercised in
good faith for the advancement of the employer's interest and not
3
 for the purpose of defeating or circumventing the rights of the
employees under special laws or under valid agreements, this
Court will uphold them.  causes, to introduce new or improved methods or facilities or to
(at p. 28.)
All this points to the conclusion that the exercise of managerial prerogatives
is not unlimited. It is circumscribed by limitations found in law, a collective
bargaining agreement, or the general principles of fair play and justice (University of
Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]). Moreover, as enunciated in Abbott
Laboratories (Phil.), vs. NLRC (154 713 [1987]), it must be duly established that the
prerogative being invoked is clearly a managerial one.
A close scrutiny of the objectionable provisions of the Code reveals that they are not
purely business-oriented nor do they concern the management aspect of the business
of the company as in the San Miguel case. The provisions of the Code clearly have
repercusions on the employee's right to security of tenure. The implementation of the
provisions may result in the deprivation of an employee's means of livelihood which,
as correctly pointed out by the NLRC, is a property right (Callanta, vs Carnation
Philippines, Inc., 145 SCRA 268 [1986]). In view of these aspects of the case which
border on infringement of constitutional rights, we must uphold the constitutional
requirements for the protection of labor and the promotion of social justice, for these
factors, according to Justice Isagani Cruz, tilt "the scales of justice when there is
doubt, in favor of the worker" (Employees Association of the Philippine American
Life Insurance Company vs. NLRC, 199 SCRA 628 [1991] 635).
Verily, a line must be drawn between management prerogatives regarding business
operations per se and those which affect the rights of the employees. In treating the
latter, management should see to it that its employees are at least properly informed
of its decisions or modes action. PAL asserts that all its employees have been
furnished copies of the Code. Public respondents found to the contrary, which
finding, to say the least is entitled to great respect.
PAL posits the view that by signing the 1989-1991 collective bargaining agreement,
on June 27, 1990, PALEA in effect, recognized PAL's "exclusive right to make and
enforce company rules and regulations to carry out the functions of
management without having to discuss the same with PALEA and much less, obtain
the latter's conformity thereto" (pp. 11-12, Petitioner's Memorandum; pp 180-
181, Rollo.) Petitioner's view is based on the following provision of the agreement:
The Association recognizes the right of the Company to determine
matters of management it policy and Company operations and to
direct its manpower. Management of the Company includes the
right to organize, plan, direct and control operations, to hire, assign
employees to work, transfer employees from one department, to
another, to promote, demote, discipline, suspend or discharge
employees for just cause; to lay-off employees for valid and legal
change existing methods or facilities and the right to make and
enforce Company rules and regulations to carry out the functions
of management.
The exercise by management of its prerogative shall be done in a
just reasonable, humane and/or lawful manner.
Such provision in the collective bargaining agreement may not be interpreted as
cession of employees' rights to participate in the deliberation of matters which may
affect their rights and the formulation of policies relative thereto. And one such
mater is the formulation of a code of discipline.
Indeed, industrial peace cannot be achieved if the employees are denied their just
participation in the discussion of matters affecting their rights. Thus, even before
Article 211 of the labor Code (P.D. 442) was amended by Republic Act No. 6715, it
was already declared a policy of the State, "(d) To promote the enlightenment of
workers concerning their rights and obligations . . . as employees." This was, of
course, amplified by Republic Act No 6715 when it decreed the "participation of
workers in decision and policy making processes affecting their rights, duties and
welfare." PAL's position that it cannot be saddled with the "obligation" of sharing
management prerogatives as during the formulation of the Code, Republic Act No.
6715 had not yet been enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212),
cannot thus be sustained. While such "obligation" was not yet founded in law when
the Code was formulated, the attainment of a harmonious labor-management
relationship and the then already existing state policy of enlightening workers
concerning their rights as employees demand no less than the observance of
transparency in managerial moves affecting employees' rights.
Petitioner's assertion that it needed the implementation of a new Code of Discipline
considering the nature of its business cannot be overemphasized. In fact, its being a
local monopoly in the business demands the most stringent of measures to attain safe
travel for its patrons. Nonetheless, whatever disciplinary measures are adopted
cannot be properly implemented in the absence of full cooperation of the employees.
Such cooperation cannot be attained if the employees are restive on account, of their
being left out in the determination of cardinal and fundamental matters affecting their
employment.
WHEREFORE, the petition is DISMISSED and the questioned decision
AFFIRMED. No special pronouncement is made as to costs.
SO ORDERED.
4
 Actions; Jurisdiction; Labor Law; Pleadings and Practice; Jurisdiction of the
court is determined on the basis of the material allegations of the complaint and the
character of the relief prayed for irrespective of whether plaintiff is entitled to such
relief.—Jurisdiction of the court is determined on the basis of the material allegations
of the complaint and the character of the relief prayed for irrespective of whether
plaintiff is entitled to such relief. In the case at bar, the allegations in the petition for
declaratory relief plainly show that petitioners’ cause of action is the annulment of
Section 144, Part A of the PAL-FASAP CBA.
Same; Same; Same; Collective Bargaining Agreements; An action raising the
issue as to whether a provision of the Collective Bargaining Agreement is unlawful
and unconstitutional is beyond the jurisdiction of labor tribunals; The jurisdiction of
labor arbiters and the National Labor Relations Commission (NLRC) under Article
217 of the Labor Code is limited to disputes arising from an employer-employee
relationship which can only be resolved by reference to the Labor Code, other labor
statutes, or their collective bargaining agreement.—From the petitioners’ allegations
and relief prayed for in its petition, it is clear that the issue raised is whether Section
144, Part A of the PAL-FASAP CBA is unlawful and unconstitutional. Here, the
petitioners’ primary relief in Civil Case No. 04-886 is the annulment of Section 144,
Part A of the PAL-FASAP CBA, which allegedly discriminates against them for
being female flight attendants. The subject of litigation is incapable of pecuniary
estimation, exclusively cognizable by the RTC, pursuant to Section 19 (1) of Batas
Pambansa Blg. 129, as amended. Being an ordinary civil action, the same is beyond
the jurisdiction of labor tribunals. The said issue cannot be re-

_______________

* THIRD DIVISION.
298solved solely by applying the Labor Code. Rather, it requires the
application of the Constitution, labor statutes, law on contracts and the Convention
on the Elimination of All Forms of Discrimination Against Women, and the power to
apply and interpret the constitution and CEDAW is within the jurisdiction of trial
courts, a court of general jurisdiction. In Georg Grotjahn GMBH & Co. v. Isnani,
235 SCRA 217 (1994), this Court held that not every dispute between an employer
and employee involves matters that only labor arbiters and the NLRC can resolve in
the exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of labor
arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes
arising from an employer-employee relationship which can only be resolved by
reference to the Labor Code, other labor statutes, or their collective bargaining
G.R. No. 172013. October 2, 2009.* agreement.
PATRICIA HALAGUEÑA, MA. ANGELITA L. PULIDO, MA. TERESITA P. Same; Same; Same; Actions between employees and employer where the
SANTIAGO, MARIANNE V. KATINDIG, BERNADETTE A. employer-employee relationship is merely incidental and the cause of action
CABALQUINTO, LORNA B. TUGAS, MARY CHRISTINE A. VILLARETE, precedes from a different source of obligation is within the exclusive jurisdiction of
CYNTHIA A. STEHMEIER, ROSE ANNA G. VICTA, NOEMI R. the regular court.—Not every controversy or money claim by an employee against
CRESENCIO, and other flight attendants of PHILIPPINE AIRLINES, the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter.
petitioners, vs. PHILIPPINE AIRLINES, INCORPORATED, respondent. Actions between employees and employer where the employer-employee
5
relationship is merely incidental and the cause of action precedes from a different
source of obligation is within the exclusive jurisdiction of the regular court. Here, the
employer-employee relationship between the parties is merely incidental and the
cause of action ultimately arose from different sources of obligation, i.e., the
Constitution and CEDAW.
Same; Same; Same; Voluntary Arbitrators; Grievance machinery and
voluntary arbitrators do not have  jurisdiction and competence to decide
constitutional issues relative to the allegedly discriminatory compulsory retirement
age.—If We divest the regular courts of jurisdiction over the case, then which
tribunal or forum shall determine the constitutionality or legality of the assailed CBA
provision? This Court holds that the grievance machinery and voluntary arbitrators
do not have the power to determine and settle the issues at hand. They have no
jurisdiction and competence to decide constitutional issues relative to the questioned
compulsory retirement age. Their exercise of jurisdiction is futile, as it is like vesting
power to someone who cannot wield it.
Same; Same; Same; It does not necessarily follow that a resolution of a
controversy that would bring about a change in the terms and conditions of
employment is a labor dispute, cognizable by labor tribunals.—The  rule that provisions of applicable law, especially provisions relating to matters
299change in the terms and conditions of employment, should Section 144 of
the CBA be held invalid, is but a necessary and unavoidable consequence of the
principal relief sought, i.e., nullification of the alleged discriminatory provision in
the CBA. Thus, it does not necessarily follow that a resolution of controversy that
would bring about a change in the terms and conditions of employment is a labor
dispute, cognizable by labor tribunals. It is unfair to preclude petitioners from
invoking the trial court’s jurisdiction merely because it may eventually result into a
change of the terms and conditions of employment. Along that line, the trial court is
not asked to set and fix the terms and conditions of employment, but is called upon
to determine whether CBA is consistent with the laws.
Same; Same; Same; Collective Bargaining Agreements; Even if the Collective
Bargaining Agreement (CBA) provides for a procedure for the adjustment of
grievances, such referral to the grievance machinery and thereafter to voluntary
arbitration would be inappropriate to the complaining employees where the union
and the management have unanimously agreed to the terms of the CBA and their
interest is unified.—Although the CBA provides for a procedure for the adjustment
of grievances, such referral to the grievance machinery and thereafter to voluntary
arbitration would be inappropriate to the petitioners, because the union and the
management have unanimously agreed to the terms of the CBA and their interest is
unified. In Pantranco North Express, Inc., v. NLRC, 259 SCRA 161 (1996), this
Court held that: x x x Hence, only disputes involving the union and the company
shall be referred to the grievance machinery or voluntary arbitrators. In the instant
case, both the union and the company are united or have come to an agreement
regarding the dismissal of private respondents. No grievance between them exists
which could be brought to a grievance machinery. The problem or dispute in the
present case is between the union and the company on the one hand and some union
and non-union members who were dismissed, on the other hand. The dispute has to
be settled before an impartial body. The grievance machinery with members
designated by the union and the company cannot be expected to be impartial against
the dismissed employees. Due process demands that the dismissed workers’
grievances be ventilated before an impartial body. x x x.
Same; Same; Same; Words and Phrases; Interpretation, as defined in Black’s
Law Dictionary, is the art of or process of discovering and ascertaining the meaning
of a statute, will, contract, or other written document.—The trial court in this case is
not asked to interpret Section 144, Part A of the PAL-FASAP CBA. Interpretation,
as defined in Black’s Law 
300Dictionary, is the art of or process of discovering and ascertaining the
meaning of a statute, will, contract, or other written document. The provision
regarding the compulsory retirement of flight attendants is not ambiguous and does
not require interpretation. Neither is there any question regarding the implementation
of the subject CBA provision, because the manner of implementing the same is clear
in itself. The only controversy lies in its intrinsic validity.
Same; Same; Same; Contracts; Doctrine of Party Autonomy; Counter-
balancing the principle of autonomy of contracting parties is the equally general
affected with public policy, are deemed written into the contract—the governing
principle is that parties may not contract away applicable provisions of law
especially peremptory provisions dealing with matters heavily impressed with public
interest.—Although it is a rule that a contract freely entered between the parties
should be respected, since a contract is the law between the parties, said rule is not
absolute. In Pakistan International Airlines Corporation v. Ople, 190 SCRA 90
(1990), this Court held that: The principle of party autonomy in contracts is not,
however, an absolute principle. The rule in Article 1306, of our Civil Code is that the
contracting parties may establish such stipulations as they may deem convenient,
“provided they are not contrary to law, morals, good customs, public order or public
policy.” Thus, counter-balancing the principle of autonomy of contracting parties is
the equally general rule that provisions of applicable law, especially provisions
relating to matters affected with public policy, are deemed written into the contract.
Put a little differently, the governing principle is that parties may not contract away
applicable provisions of law especially peremptory provisions dealing with matters
heavily impressed with public interest. The law relating to labor and employment is
clearly such an area and parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting
with each other.
Same; Same; Same; Same; The relations between capital and labor are not
merely contractual—they are so impressed with public interest that labor contracts
must yield to the common good.—The relations between capital and labor are not
merely contractual. They are so impressed with public interest that labor contracts
must yield to the common good. x x x The supremacy of the law over contracts is
explained by the fact that labor contracts are not ordinary contracts; these are imbued
with public interest and therefore are subject to the police power of the state. It
should not be 
6
 301taken to mean that retirement provisions agreed upon in the CBA are
absolutely beyond the ambit of judicial review and nullification. A CBA, as a labor
contract, is not merely contractual in nature but impressed with public interest. If the
retirement provisions in the CBA run contrary to law, public morals, or public
policy, such provisions may very well be voided.
Same; Same; Same; The question as to whether a provision of a Collective
Bargaining Agreement is discriminatory or not is a question of fact which would
require the presentation and reception of evidence by the parties in order for the
trial court to ascertain the facts of the case and whether said provision violates the
Constitution, statutes and treaties.—The rule is settled that pure questions of fact
may not be the proper subject of an appeal by certiorari under Rule 45 of the
Revised Rules of Court. This mode of appeal is generally limited only to questions of
law which must be distinctly set forth in the petition. The Supreme Court is not a
trier of facts. The question as to whether said Section 114, Part A of the PAL-
FASAP CBA is discriminatory or not is a question of fact. This would require the
presentation and reception of evidence by the parties in order for the trial court to
ascertain the facts of the case and whether said provision violates the Constitution,
statutes and treaties. A full-blown trial is necessary, which jurisdiction to hear the
same is properly lodged with the the RTC. Therefore, a remand of this case to the
RTC for the proper determination of the merits of the petition for declaratory relief is
just and proper.
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
   The facts are stated in the opinion of the Court.
  Kapunan, Lotilla, Flores, Garcia & Castillo for petitioners.
  Office of the General Counsel for respondent.
PERALTA, J.:
Before this Court is a petition for review on certiorariunder Rule 45 of the Rules
of Court seeking to annul and set aside the
302Decision1 and the Resolution2 of the Court of Appeals (CA) in CA-G.R. SP. No.
86813.
 Petitioners were employed as female flight attendants of respondent Philippine
Airlines (PAL) on different dates prior to November 22, 1996. They are members of
the Flight Attendants and Stewards Association of the Philippines (FASAP), a labor
organization certified as the sole and exclusive certified as the sole and exclusive
bargaining representative of the flight attendants, flight stewards and pursers of
respondent.
On July 11, 2001, respondent and FASAP entered into a Collective Bargaining
Agreement3 incorporating the terms and conditions of their agreement for the years
2000 to 2005, hereinafter referred to as PAL-FASAP CBA.
Section 144, Part A of the PAL-FASAP CBA, provides that:
“A. For the Cabin Attendants hired before 22 November 1996:
xxxx
3. Compulsory Retirement
Subject to the grooming standards provisions of this Agreement, compulsory
retirement shall be fifty-five (55) for females and sixty (60) for males. x x x.”
In a letter dated July 22, 2003,4 petitioners and several female cabin crews
manifested that the aforementioned CBA provision on compulsory retirement is
discriminatory, and demanded for an equal treatment with their male counterparts.
This demand was reiterated in a letter5 by petitioners’ counsel addressed to respon-
_______________
1 Penned by Associate Justice Salvador J. Valdez, Jr., with Associate Justice
Mariano C. Del Castillo and Associate Justice Magdangal M. De Leon.,
concurring; Rollo, pp. 52-71.
2 Id., at pp. 73-74.
3 Rollo, pp. 146-193.
4 Id., at pp. 507-509.
5 Id., at pp. 510-512.
303dent demanding the removal of gender discrimination provisions in the coming
re-negotiations of the PAL-FASAP CBA.
On July 12, 2004, Robert D. Anduiza, President of FASAP submitted their 2004-
2005 CBA proposals6 and manifested their willingness to commence the collective
bargaining negotiations between the management and the association, at the soonest
possible time.
On July 29, 2004, petitioners filed a Special Civil Action for Declaratory Relief
with Prayer for the Issuance of Temporary Restraining Order and Writ of
Preliminary Injunction7 with the Regional Trial Court (RTC) of Makati City, Branch
147, docketed as Civil Case No. 04-886, against respondent for the invalidity of
Section 144, Part A of the PAL-FASAP CBA. The RTC set a hearing on petitioners’
application for a TRO and, thereafter, required the parties to submit their respective
memoranda.
On August 9, 2004, the RTC issued an Order 8 upholding its jurisdiction over the
present case. The RTC reasoned that:
“In the instant case, the thrust of the Petition is Sec. 144 of the subject CBA
which is allegedly discriminatory as it discriminates against female flight attendants,
in violation of the Constitution, the Labor Code, and the CEDAW. The allegations in
the Petition do not make out a labor dispute arising from employer-employee
relationship as none is shown to exist. This case is not directed specifically against
respondent arising from any act of the latter, nor does it involve a claim against the
respondent. Rather, this case seeks a declaration of the nullity of the questioned
provision of the CBA, which is within the Court’s competence, with the allegations
in the Petition constituting the bases for such relief sought.”
The RTC issued a TRO on August 10, 2004, 9 enjoining the respondent for
implementing Section 144, Part A of the PAL-FASAP CBA.
_______________
7
 6 Rollo, pp. 513-528.
7 Id., at pp. 124-135.
8 Rollo, pp. 204-205.
9 Id., at p. 206.
304
The respondent filed an omnibus motion10 seeking reconsideration of the order
overruling its objection to the jurisdiction of the RTC the lifting of the TRO. It
further prayed that the (1) petitioners’ application for the issuance of a writ of
preliminary injunction be denied; and (2) the petition be dismissed or the
proceedings in this case be suspended.
On September 27, 2004, the RTC issued an Order 11directing the issuance of a
writ of preliminary injunction enjoining the respondent or any of its agents and
representatives from further implementing Sec. 144, Part A of the PAL-FASAP CBA
pending the resolution of the case.
Aggrieved, respondent, on October 8, 2004, filed a Petition for Certiorari and
Prohibition with Prayer for a Temporary Restraining Order and Writ of Preliminary
Injunction12 with the Court of Appeals (CA) praying that the order of the RTC, which
denied its objection to its jurisdiction, be annuled and set aside for having been
issued without and/or with grave abuse of discretion amounting to lack of
jurisdiction.
The CA rendered a Decision, dated August 31, 2005, granting the respondent’s
petition, and ruled that:
“WHEREFORE, the respondent court is by us declared to have NO
JURISDICTION OVER THE CASE BELOW and, consequently, all the
proceedings, orders and processes it has so far issued therein are ANNULED and
SET ASIDE. Respondent court is ordered to DISMISS its Civil Case No. 04-886.
SO ORDERED.”
Petitioner filed a motion for reconsideration, 13 which was denied by the CA in its
Resolution dated March 7, 2006.
Hence, the instant petition assigning the following error:
_______________
10 Id., at pp. 207-241.
11 Id., at pp. 302-304.
12 Rollo, pp. 305-348.
13 Id., at pp. 425-450.
305
THE COURT OF APPEALS’ CONCLUSION THAT THE SUBJECT MATTER IS
A LABOR DISPUTE OR GRIEVANCE IS CONTRARY TO LAW AND
JURISPRUDENCE.
The main issue in this case is whether the RTC has jurisdiction over the
petitioners’ action challenging the legality or constitutionality of the provisions on
the compulsory retirement age contained in the CBA between respondent PAL and
FASAP.
Petitioners submit that the RTC has jurisdiction in all civil actions in which the
subject of the litigation is incapable of pecuniary estimation and in all cases not
within the exclusive jurisdiction of any court, tribunal, person or body exercising
judicial or quasi-judicial functions. The RTC has the power to adjudicate all
controversies except those expressly witheld from the plenary powers of the court.
Accordingly, it has the power to decide issues of constitutionality or legality of the
provisions of Section 144, Part A of the PAL-FASAP CBA. As the issue involved is
constitutional in character, the labor arbiter or the National Labor Relations
Commission (NLRC) has no jurisdiction over the case and, thus, the petitioners pray
that judgment be rendered on the merits declaring Section 144, Part A of the PAL-
FASAP CBA null and void.
Respondent, on the other hand, alleges that the labor tribunals have jurisdiction
over the present case, as the controversy partakes of a labor dispute. The dispute
concerns the terms and conditions of petitioners’ employment in PAL, specifically
their retirement age. The RTC has no jurisdiction over the subject matter of
petitioners’ petition for declaratory relief because the Voluntary Arbitrator or panel
of Voluntary Arbitrators have original and exclusive jurisdiction to hear and decide
all unresolved grievances arising from the interpretation or implementation of the
CBA. Regular courts have no power to set and fix the terms and conditions of
employment. Finally, respondent alleged that petitioners’ prayer before this Court to
resolve their petition for declaratory relief on the merits is procedurally improper and
baseless.
The petition is meritorious.306
Jurisdiction of the court is determined on the basis of the material allegations of
the complaint and the character of the relief prayed for irrespective of whether
plaintiff is entitled to such relief.14
In the case at bar, the allegations in the petition for declaratory relief plainly
show that petitioners’ cause of action is the annulment of Section 144, Part A of the
PAL-FASAP CBA. The pertinent portion of the petition recites:
CAUSE OF ACTION
24. Petitioners have the constitutional right to fundamental equality with men
under Section 14, Article II, 1987 of the Constitution and, within the specific context
of this case, with the male cabin attendants of Philippine Airlines.
26. Petitioners have the statutory right to equal work and employment
opportunities with men under Article 3, Presidential Decree No. 442, The Labor
Code and, within the specific context of this case, with the male cabin attendants of
Philippine Airlines.
27. It is unlawful, even criminal, for an employer to discriminate against women
employees with respect to terms and conditions of employment solely on account of
their sex under Article 135 of the Labor Code as amended by Republic Act No. 6725
or the Act Strengthening Prohibition on Discrimination Against Women.
28. This discrimination against Petitioners is likewise against the Convention on
the Elimination of All Forms of Discrimination Against Women (hereafter,
“CEDAW”), a multilateral convention that the Philippines ratified in 1981. The
Government and its agents, including our courts, not only must condemn all forms of
8
discrimination against women, but must also implement measures towards its
elimination.
29. This case is a matter of public interest not only because of Philippine Airlines’
violation of the Constitution and existing laws, but also because it highlights the fact
that twenty-three years after the Philippine Senate ratified the CEDAW,
discrimination against women continues.
_______________
14 Polomolok Water District v. Polomolok General Consumers Association, Inc.,
G.R. No. 162124, October 18, 2007, 536 SCRA 647, 651.
307
31. Section 114, Part A of the PAL-FASAP 2000-20005 CBA on compulsory
retirement from service is invidiously discriminatory against and manifestly
prejudicial to Petitioners because, they are compelled to retire at a lower age (fifty-
five (55) relative to their male counterparts (sixty (60).
33. There is no reasonable, much less lawful, basis for Philippine Airlines to
distinguish, differentiate or classify cabin attendants on the basis of sex and thereby
arbitrarily set a lower compulsory retirement age of 55 for Petitioners for the sole
reason that they are women.
37. For being patently unconstitutional and unlawful, Section 114, Part A of the
PAL-FASAP 2000-2005 CBA must be declared invalid and stricken down to the
extent that it discriminates against petitioner.
38. Accordingly, consistent with the constitutional and statutory guarantee of
equality between men and women, Petitioners should be adjudged and declared
entitled, like their male counterparts, to work until they are sixty (60) years old.
PRAYER
WHEREFORE, it is most respectfully prayed that the Honorable Court:
c. after trial on the merits:
(I) declare Section 114, Part A of the PAL-FASAP 2000-2005 CBA
INVALID, NULL and VOID to the extent that it discriminates against
Petitioners; x x x x”
From the petitioners’ allegations and relief prayed for in its petition, it is clear
that the issue raised is whether Section 144, Part A of the PAL-FASAP CBA is
unlawful and unconstitutional. Here, the petitioners’ primary relief in Civil Case No.
04-886 is the annulment of Section 144, Part A of the PAL-FASAP CBA, which
allegedly discriminates against them for being female flight attendants. The subject
of litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC,
pursuant to Section 19 (1) of Batas Pambansa Blg. 129, as amended. 15 Being an
ordinary civil action, the same is beyond the jurisdiction of labor tribunals.
_______________
15 Regional Trial Courts shall exercise exclusive original jurisdiction in all civil
actions in which the subject of the litigation is incapable of pecuniary estimation.
308
The said issue cannot be resolved solely by applying the Labor Code. Rather, it
requires the application of the Constitution, labor statutes, law on contracts and the
Convention on the Elimination of All Forms of Discrimination Against
Women,16 and the power to apply and interpret the constitution and CEDAW is
within the jurisdiction of trial courts, a court of general jurisdiction. In Georg
Grotjahn GMBH & Co. v. Isnani,17 this Court held that not every dispute between an
employer and employee involves matters that only labor arbiters and the NLRC can
resolve in the exercise of their adjudicatory or quasi-judicial powers. The jurisdiction
of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to
disputes arising from an employer-employee relationship which can only be resolved
by reference to the Labor Code, other labor statutes, or their collective bargaining
agreement.
Not every controversy or money claim by an employee against the employer or
vice-versa is within the exclusive jurisdiction of the labor arbiter. Actions between
employees and employer where the employer-employee relationship is merely
incidental and the cause of action precedes from a different source of obligation is
within the exclusive jurisdiction of the regular court. 18 Here, the employer-employee
relationship between the parties is merely incidental and the cause of action
ultimately arose from different sources of obligation, i.e., the Constitution and
CEDAW.
Thus, where the principal 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
_______________
16 Otherwise known as “Bill of Rights for Women” was adopted in December
1979 by the UN General Assembly, it is regarded as the most comprehensive
international treaty governing the rights of women. The Philippines became a
signatory thereto a year after its adoption by the UN and in 1981, the country ratified
it.
17 G.R. No. 109272, August 10, 1994, 235 SCRA 217, 221. (Emphasis
supplied.)
18 Eviota v. Court of Appeals, G.R. No. 152121, July 29, 2003, 407 SCRA 394,
402.
309and 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. Clearly, such claims fall outside the area of competence or
expertise ordinarily ascribed to labor arbiters and the NLRC and the rationale for
granting jurisdiction over such claims to these agencies disappears. 19
9
 If We divest the regular courts of jurisdiction over the case, then which tribunal
or forum shall determine the constitutionality or legality of the assailed CBA
provision?
This Court holds that the grievance machinery and voluntary arbitrators do not
have the power to determine and settle the issues at hand. They have no jurisdiction
and competence to decide constitutional issues relative to the questioned compulsory
retirement age. Their exercise of jurisdiction is futile, as it is like vesting power to
someone who cannot wield it.
In Gonzales v. Climax Mining Ltd.,20 this Court affirmed the jurisdiction of courts
over questions on constitutionality of contracts, as the same involves the exercise of
judicial power. The Court said:
“Whether the case involves void or voidable contracts is still a judicial question.
It may, in some instances, involve questions of fact especially with regard to the
determination of the circumstances of the execution of the contracts. But the
resolution of the validity or voidness of the contracts remains a legal or judicial
question as it requires the exercise of judicial function. It requires the ascertainment
of what laws are applicable to the dispute, the interpretation and application of those
laws, and the rendering of a judgment based thereon. Clearly, the dispute is not a
mining conflict. It is essentially judicial. The complaint was not merely for the
determination of rights under the mining contracts since the very validity of those
contracts is put in issue.”
_______________
19 San Miguel Corporation v. National Labor Relations Commission,No. L-
80774, May 31, 1988, 161 SCRA 719, 730.
20 492 Phil. 682, 695; 452 SCRA 607, 623 (2005).
310     In Saura v. Saura, Jr.,21 this Court emphasized the primacy of the regular
court’s judicial power enshrined in the Constitution that is true that the trend is
towards vesting administrative bodies like the SEC with the power to adjudicate
matters coming under their particular specialization, to insure a more knowledgeable
solution of the problems submitted to them. This would also relieve the regular
courts of a substantial number of cases that would otherwise swell their already
clogged dockets. But as expedient as this policy may be, it should not deprive
the courts of justice of their power to decide ordinary cases in accordance with the
general laws that do not require any particular expertise or training to interpret
and apply. Otherwise, the creeping take-over by the administrative agencies of the
judicial power vested in the courts would render the judiciary virtually impotent in
the discharge of the duties assigned to it by the Constitution.
To be sure, in Rivera v. Espiritu,22 after Philippine Airlines (PAL) and PAL
Employees Association (PALEA) entered into an agreement, which includes the
provision to suspend the PAL-PALEA CBA for 10 years, several employees
questioned its validity via a petition for certiorari directly to the Supreme Court.
They said that the suspension was unconstitutional and contrary to public policy.
Petitioners submit that the suspension was inordinately long, way beyond the
maximum statutory life of 5 years for a CBA provided for in Article 253-A of the
Labor Code. By agreeing to a 10-year suspension, PALEA, in effect, abdicated the
workers’ constitutional right to bargain for another CBA at the mandated time.
 In that case, this Court denied the petition for certiorari, ruling that there is
available to petitioners a plain, speedy, and adequate remedy in the ordinary course
of law. The Court said that while the petition was denominated as one
for certiorari and prohibition,
_______________
21 G.R. No. 136159, September 1, 1999, 313 SCRA 465, 474. (emphasis
supplied.)
22 G.R. No. 135547, January 23, 2002, 374 SCRA 351.
311its object was actually the nullification of the PAL-PALEA agreement. As such,
petitioners’ proper remedy is an ordinary civil action for annulment of contract, an
action which properly falls under the jurisdiction of the regional trial courts.
The change in the terms and conditions of employment, should Section 144 of
the CBA be held invalid, is but a necessary and unavoidable consequence of the
principal relief sought, i.e., nullification of the alleged discriminatory provision in
the CBA. Thus, it does not necessarily follow that a resolution of controversy that
would bring about a change in the terms and conditions of employment is a labor
dispute, cognizable by labor tribunals. It is unfair to preclude petitioners from
invoking the trial court’s jurisdiction merely because it may eventually result into a
change of the terms and conditions of employment. Along that line, the trial court is
not asked to set and fix the terms and conditions of employment, but is called upon
to determine whether CBA is consistent with the laws.
Although the CBA provides for a procedure for the adjustment of grievances,
such referral to the grievance machinery and thereafter to voluntary arbitration would
be inappropriate to the petitioners, because the union and the management have
unanimously agreed to the terms of the CBA and their interest is unified.
In Pantranco North Express, Inc., v. NLRC,23 this Court held that:
“x x x Hence, only disputes involving the union and the company shall be referred to
the grievance machinery or voluntary arbitrators.
In the instant case, both the union and the company are united or have come to an
agreement regarding the dismissal of private respondents. No grievance between
them exists which could be brought to a grievance machinery. The problem or
dispute in the present case is between the union and the company on the one hand
and some union and non-union members who were dismissed, on the other hand. The
dispute has to be
_______________
23 G.R. No. 95940, July 24, 1996, 259 SCRA 161, 168, citing Sanyo Philippines
Workers Union-PSSLU v. Cañizares, G.R. No. 101619, July 8, 1992, 211 SCRA
361.
10
312settled before an impartial body. The grievance machinery with members
designated by the union and the company cannot be expected to be impartial against
the dismissed employees. Due process demands that the dismissed workers’
grievances be ventilated before an impartial body. x x x.
Applying the same rationale to the case at bar, it cannot be said that the “dispute” is
between the union and petitioner company because both have previously agreed
upon the provision on “compulsory retirement” as embodied in the CBA. Also, it
was only private respondent on his own who questioned the compulsory retirement.
x x x.”
In the same vein, the dispute in the case at bar is not between FASAP and
respondent PAL, who have both previously agreed upon the provision on the
compulsory retirement of female flight attendants as embodied in the CBA. The
dispute is between respondent PAL and several female flight attendants who
questioned the provision on compulsory retirement of female flight attendants. Thus,
applying the principle in the aforementioned case cited, referral to the grievance
machinery and voluntary arbitration would not serve the interest of the petitioners.
Besides, a referral of the case to the grievance machinery and to the voluntary
arbitrator under the CBA would be futile because respondent already implemented
Section 114, Part A of PAL-FASAP CBA when several of its female flight
attendants reached the compulsory retirement age of 55.
Further, FASAP, in a letter dated July 12, 2004, addressed to PAL, submitted its
association’s bargaining proposal for the remaining period of 2004-2005 of the PAL-
FASAP CBA, which includes the renegotiation of the subject Section 144. However,
FASAP’s attempt to change the questioned provision was shallow and superficial, to
say the least, because it exerted no further efforts to pursue its proposal. When
petitioners in their individual capacities questioned the legality of the compulsory
retirement in the CBA before the trial court, there was no showing that FASAP, as
their representative, endeavored to adjust, settle or negotiate with PAL for the
removal of the difference in compulsory age retirement between its female and male
flight attendants, particularly those employed before November 22, 1996. Without
FASAP’s  RTC’s order, petitioners sought relief before this Court through the instant petition
313active participation on behalf of its female flight attendants, the utilization of the
grievance machinery or voluntary arbitration would be pointless.
The trial court in this case is not asked to interpret Section 144, Part A of the
PAL-FASAP CBA. Interpretation, as defined in Black’s Law Dictionary, is the art of
or process of discovering and ascertaining the meaning of a statute, will, contract, or
other written document.24 The provision regarding the compulsory retirement of
flight attendants is not ambiguous and does not require interpretation. Neither is
there any question regarding the implementation of the subject CBA provision,
because the manner of implementing the same is clear in itself. The only controversy
lies in its intrinsic validity.
Although it is a rule that a contract freely entered between the parties should be
respected, since a contract is the law between the parties, said rule is not absolute.
In Pakistan International Airlines Corporation v. Ople,25this Court held that:
“The principle of party autonomy in contracts is not, however, an absolute principle.
The rule in Article 1306, of our Civil Code is that the contracting parties may
establish such stipulations as they may deem convenient, “provided they are not
contrary to law, morals, good customs, public order or public policy.” Thus, counter-
balancing the principle of autonomy of contracting parties is the equally general rule
that provisions of applicable law, especially provisions relating to matters affected
with public policy, are deemed written into the contract. Put a little differently, the
governing principle is that parties may not contract away applicable provisions of
law especially peremptory provisions dealing with matters heavily impressed with
public interest. The law relating to labor and employment is clearly such an area and
parties are not at liberty to insulate themselves and their relationships from the
impact of labor laws and regulations by simply contracting with each other.”
_______________
24 Fifth Edition, p. 734.
25 G.R.No. 61594, September 28, 1990, 190 SCRA 90, 99.
314     Moreover, the relations between capital and labor are not merely contractual.
They are so impressed with public interest that labor contracts must yield to the
common good.x x x26 The supremacy of the law over contracts is explained by the
fact that labor contracts are not ordinary contracts; these are imbued with public
interest and therefore are subject to the police power of the state. 27 It should not be
taken to mean that retirement provisions agreed upon in the CBA are absolutely
beyond the ambit of judicial review and nullification. A CBA, as a labor contract, is
not merely contractual in nature but impressed with public interest. If the retirement
provisions in the CBA run contrary to law, public morals, or public policy, such
provisions may very well be voided.28
Finally, the issue in the petition for certiorari brought before the CA by the
respondent was the alleged exercise of grave abuse of discretion of the RTC in taking
cognizance of the case for declaratory relief. When the CA annuled and set aside the
for review under Rule 45. A perusal of the petition before Us, petitioners pray for the
declaration of the alleged discriminatory provision in the CBA against its female
flight attendants.
This Court is not persuaded. The rule is settled that pure questions of fact may
not be the proper subject of an appeal by certiorari under Rule 45 of the Revised
Rules of Court. This mode of appeal is generally limited only to questions of law
which must be distinctly set forth in the petition. The Supreme Court is not a trier of
facts.29
The question as to whether said Section 114, Part A of the PAL-FASAP CBA is
discriminatory or not is a question of fact. This
_______________
26 New Civil Code, Art. 1700.
11
 27 Villa v. National Labor Relations Commission, G.R. No. 117043, January 14,
1998, 284 SCRA 105, 127, 128.
28 Cainta Catholic School v. Cainta Catholic School Employees Union
(CCSEU), G.R. No. 151021, May 4, 2006, 489 SCRA 468, 485.
29 Far East Bank & Trust Co. v. Court of Appeals, 326 Phil. 15, 18; 256 SCRA
15, 18 (1996).
315would require the presentation and reception of evidence by the parties in order
for the trial court to ascertain the facts of the case and whether said provision violates
the Constitution, statutes and treaties. A full-blown trial is necessary, which
jurisdiction to hear the same is properly lodged with the the RTC. Therefore, a
remand of this case to the RTC for the proper determination of the merits of the
petition for declaratory relief is just and proper.
WHEREFORE, the petition is PARTLY GRANTED. The Decision and
Resolution of the Court of Appeals, dated August 31, 2005 and March 7, 2006,
respectively, in CA-G.R. SP. No. 86813 are REVERSED and SET ASIDE. The
Regional Trial Court of Makati City, Branch 147 is DIRECTED to continue the
proceedings in Civil Case No. 04-886 with deliberate dispatch.
SO ORDERED.
Ynares-Santiago (Chairperson), Chico-Nazario, Velasco, Jr. and Nachura,
JJ., concur.
Petition partly granted, judgment and resolution reversed and set aside.
Notes.—The rule is that jurisdiction over the subject matter is determined by the
law in force at the time of the commencement of the action. In March 1982, labor
arbiters had jurisdiction over all cases involving employer-employee relations
including money claims arising out of any law or contracts involving Filipino
workers for overseas employment. (Erectors, Inc. vs. National Labor Relations
Commission, 256 SCRA 629 [1996])
The signing bonus is a grant motivated by the goodwill generated when a CBA is
successfully negotiated and signed between the employer and the union. (Philippine
Appliance Corporation [PHILACOR] vs. Court of Appeals, 430 SCRA 525 [2004])
——o0o—— 
G.R. No. 87700. June 13, 1990.*
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL
S.L. BORBON II, HERMINIA REYES, MARCELA PURIFICACION, ET AL.,
petitioners, vs. HON. JESUS G. BERSAMIRA, IN HIS CAPACITY AS
PRESIDING JUDGE OF BRANCH 166, RTC, PASIG, and SAN MIGUEL
CORPORATION, respondents.
Labor Law; Labor dispute exists when the controversy concerns the terms and
conditions of employment.—While it is SanMig’s submission that no employer-
employee relationship exists between itself, on the one hand, and the contractual
workers of Lipercon and D’Rite on the other, a labor dispute can nevertheless exist
“regardless of whether the disputants stand in the proximate relationship of employer
and 
________________
*
 SECOND DIVISION.
3
 Pages 54 to 56, Rollo.
497
VOL. 186, JUNE 13, 1990  497 
San Miguel Corp. Employees Union-PTGWO vs. Bersamira
employee” (Article 212 [1] Labor Code, supra) provided the controversy
concerns, among others, the terms and conditions of employment or a “change” or
“arrangement” thereof (ibid). Put differently, and as defined by law, the existence of
a labor dispute is not negatived by the fact that the plaintiffs and defendants do not
stand in the proximate relation of employer and employee.
Same; Jurisdiction; Civil Law; Claim for damages interwoven with labor
dispute between the parties, to be ventilated before administrative machinery.—The
claim of SanMig that the action below is for damages under Articles 19, 20 and 21 of
the Civil Code would not suffice to keep the case within the jurisdictional boundaries
of regular Courts. That claim for damages is interwoven with a labor dispute existing
between the parties and would have to be ventilated before the administrative
machinery established for the expeditious settlement of those disputes. To allow the
action filed below to prosper would bring about “split jurisdiction” which is
obnoxious to the orderly administration of justice (Philippine Communications,
Electronics and Electricity Workers Federation vs. Hon. Nolasco, L-24984, 29 July
1968, 24 SCRA 321).
SPECIAL CIVIL ACTION for certiorari and prohibition to review the orders of the
Regional Trial Court of Pasig, Metro Manila, Br. 166. Bersamira, J.
The facts are stated in the opinion of the Court.
     Romeo C. Lagman for petitioners.
     Jardeleza, Sobreviñas, Diaz, Mayudini & Bodegon for respondents.
MELENCIO-HERRERA, J.:
Respondent Judge of the Regional Trial Court of Pasig, Branch 166, is taken to task
by petitioners in this special civil action for certiorari and Prohibition for having
issued the challenged Writ of Preliminary Injunction on 29 March 1989 in Civil Case
No. 57055 of his Court entitled "San Miguel Corporation vs. SMCEU-PTGWO, et
als." 
12
Petitioners' plea is that said Writ was issued without or in excess of jurisdiction and
with grave abuse of discretion, a labor dispute being involved. Private respondent
San Miguel Corporation (SanMig. for short), for its part, defends the Writ on the
ground of absence of any employer-employee relationship between it and the
contractual workers employed by the companies Lipercon Services, Inc. (Lipercon)
and D'Rite Service Enterprises (D'Rite), besides the fact that the Union is bereft of
personality to represent said workers for purposes of collective bargaining. The
Solicitor General agrees with the position of SanMig.
The antecedents of the controversy reveal that:
Sometime in 1983 and 1984, SanMig entered into contracts for merchandising
services with Lipercon and D'Rite (Annexes K and I, SanMig's Comment,
respectively). These companies are independent contractors duly licensed by the
Department of Labor and Employment (DOLE). SanMig entered into those contracts
to maintain its competitive position and in keeping with the imperatives of
efficiency, business expansion and diversity of its operation. In said contracts, it was
expressly understood and agreed that the workers employed by the contractors were
to be paid by the latter and that none of them were to be deemed employees or agents
of SanMig. There was to be no employer-employee relation between the contractors
and/or its workers, on the one hand, and SanMig on the other.
Petitioner San Miguel Corporation Employees Union-PTWGO (the Union, for
brevity) is the duly authorized representative of the monthly paid rank-and-file
employees of SanMig with whom the latter executed a Collective Bargaining
Agreement (CBA) effective 1 July 1986 to 30 June 1989 (Annex A, SanMig's
Comment). Section 1 of their CBA specifically provides that "temporary,
probationary, or contract employees and workers are excluded from the bargaining
unit and, therefore, outside the scope of this Agreement."
In a letter, dated 20 November 1988 (Annex C, Petition), the Union advised SanMig
that some Lipercon and D'Rite workers had signed up for union membership and
sought the regularization of their employment with SMC. The Union alleged that this
group of employees, while appearing to be contractual workers supposedly
independent contractors, have been continuously working for SanMig for a period
ranging from six (6) months to fifteen (15) years and that their work is neither casual
nor seasonal as they are performing work or activities necessary or desirable in the
usual business or trade of SanMig. Thus, it was contended that there exists a "labor-
only" contracting situation. It was then demanded that the employment status of
these workers be regularized.  to compel plaintiff to hire the employees or workers of
On 12 January 1989 on the ground that it had failed to receive any favorable
response from SanMig, the Union filed a notice of strike for unfair labor practice,
CBA violations, and union busting (Annex D, Petition).  the free ingress to, and egress from, the work places within the
On 30 January 1989, the Union again filed a second notice of strike for unfair labor
practice (Annex F, Petition). 
As in the first notice of strike. Conciliatory meetings were held on the second notice.
Subsequently, the two (2) notices of strike were consolidated and several conciliation
conferences were held to settle the dispute before the National Conciliation and
Mediation Board (NCMB) of DOLE (Annex G, Petition). 
Beginning 14 February 1989 until 2 March 1989, series of pickets were staged by
Lipercon and D'Rite workers in various SMC plants and offices. 
On 6 March 1989, SMC filed a verified Complaint for Injunction and Damages
before respondent Court to enjoin the Union from: 
a. representing and/or acting for and in behalf of the employees of
LIPERCON and/or D'RITE for the purposes of collective
bargaining; 
b. calling for and holding a strike vote, to compel plaintiff to hire
the employees or workers of LIPERCON and D'RITE; 
c. inciting, instigating and/or inducing the employees or workers of
LIPERCON and D'RITE to demonstrate and/or picket at the plants
and offices of plaintiff within the bargaining unit referred to in the
CBA,...; 
d. staging a strike to compel plaintiff to hire the employees or
workers of LIPERCON and D'RITE; 
e. using the employees or workers of LIPERCON AND D'RITE to
man the strike area and/or picket lines and/or barricades which the
defendants may set up at the plants and offices of plaintiff within
the bargaining unit referred to in the CBA ...; 
f. intimidating, threatening with bodily harm and/or molesting the
other employees and/or contract workers of plaintiff, as well as
those persons lawfully transacting business with plaintiff at the
work places within the bargaining unit referred to in the CBA, ...,
LIPERCON and D'RITE; 
g. blocking, preventing, prohibiting, obstructing and/or impeding
13
 bargaining unit referred to in the CBA .., to compel plaintiff to hire Presence or absence of a power to control the putative employee's
the employees or workers of LIPERCON and D'RITE;  conduct. This necessitates a full-blown trial. If the acts complained
of are not restrained, plaintiff would, undoubtedly, suffer
h. preventing and/or disrupting the peaceful and normal operation irreparable damages. Upon the other hand, a writ of injunction
of plaintiff at the work places within the bargaining unit referred to does not necessarily expose defendants to irreparable damages. 
in the CBA, Annex 'C' hereof, to compel plaintiff to hire the
employees or workers of LIPERCON and D'RITE. (Annex H, Evidently, plaintiff has established its right to the relief demanded.
Petition)  (p. 21, Rollo) 

Respondent Court found the Complaint sufficient in form and substance and issued a Anchored on grave abuse of discretion, petitioners are now before us seeking
Temporary Restraining Order for the purpose of maintaining the status quo, and set nullification of the challenged Writ. On 24 April 1989, we issued a Temporary
the application for Injunction for hearing.  Restraining Order enjoining the implementation of the Injunction issued by
respondent Court. The Union construed this to mean that "we can now strike," which
In the meantime, on 13 March 1989, the Union filed a Motion to Dismiss SanMig's it superimposed on the Order and widely circulated to entice the Union membership
Complaint on the ground of lack of jurisdiction over the case/nature of the action, to go on strike. Upon being apprised thereof, in a Resolution of 24 May 1989, we
which motion was opposed by SanMig. That Motion was denied by respondent required the parties to "RESTORE the status quo ante declaration of strike" (p. 2,62
Judge in an Order dated 11 April 1989.  Rollo). 

After several hearings on SanMig's application for injunctive relief, where the parties In the meantime, however, or on 2 May 1989, the Union went on strike. Apparently,
presented both testimonial and documentary evidence on 25 March 1989, respondent some of the contractual workers of Lipercon and D'Rite had been laid off. The strike
Court issued the questioned Order (Annex A, Petition) granting the application and adversely affected thirteen (13) of the latter's plants and offices. 
enjoining the Union from Committing the acts complained of, supra. Accordingly,
on 29 March 1989, respondent Court issued the corresponding Writ of Preliminary On 3 May 1989, the National Conciliation and Mediation Board (NCMB) called the
Injunction after SanMig had posted the required bond of P100,000.00 to answer for parties to conciliation. The Union stated that it would lift the strike if the thirty (30)
whatever damages petitioners may sustain by reason thereof.  Lipercon and D'Rite employees were recalled, and discussion on their other
demands, such as wage distortion and appointment of coordinators, were made.
In issuing the Injunction, respondent Court rationalized:  Effected eventually was a Memorandum of Agreement between SanMig and the
Union that "without prejudice to the outcome of G.R. No. 87700 (this case) and Civil
The absence of employer-employee relationship negates the Case No. 57055 (the case below), the laid-off individuals ... shall be recalled
existence of labor dispute. Verily, this court has jurisdiction to take effective 8 May 1989 to their former jobs or equivalent positions under the same
cognizance of plaintiff's grievance.  terms and conditions prior to "lay-off" (Annex 15, SanMig Comment). In turn, the
Union would immediately lift the pickets and return to work. 
The evidence so far presented indicates that plaintiff has contracts
for services with Lipercon and D'Rite. The application and contract After an exchange of pleadings, this Court, on 12 October 1989, gave due course to
for employment of the defendants' witnesses are either with the Petition and required the parties to submit their memoranda simultaneously, the
Lipercon or D'Rite. What could be discerned is that there is no last of which was filed on 9 January 1990. 
employer-employee relationship between plaintiff and the
contractual workers employed by Lipercon and D'Rite. This, The focal issue for determination is whether or not respondent Court correctly
however, does not mean that a final determination regarding the assumed jurisdiction over the present controversy and properly issued the Writ of
question of the existence of employer-employee relationship has Preliminary Injunction to the resolution of that question, is the matter of whether, or
already been made. To finally resolve this dispute, the court must not the case at bar involves, or is in connection with, or relates to a labor dispute. An
extensively consider and delve into the manner of selection and affirmative answer would bring the case within the original and exclusive
engagement of the putative employee; the mode of payment of jurisdiction of labor tribunals to the exclusion of the regular Courts. 
wages; the presence or absence of a power of dismissal; and the
14
Petitioners take the position that 'it is beyond dispute that the controversy in the on the other, a labor dispute can nevertheless exist "regardless of whether the
court a quo involves or arose out of a labor dispute and is directly connected or disputants stand in the proximate relationship of employer and employee" (Article
interwoven with the cases pending with the NCMB-DOLE, and is thus beyond the 212 [1], Labor Code, supra) provided the controversy concerns, among others, the
ambit of the public respondent's jurisdiction. That the acts complained of (i.e., the terms and conditions of employment or a "change" or "arrangement" thereof (ibid).
mass concerted action of picketing and the reliefs prayed for by the private Put differently, and as defined by law, the existence of a labor dispute is not negative
respondent) are within the competence of labor tribunals, is beyond question" (pp. 6- by the fact that the plaintiffs and defendants do not stand in the proximate relation of
7, Petitioners' Memo).  employer and employee. 

On the other hand, SanMig denies the existence of any employer-employee That a labor dispute, as defined by the law, does exist herein is evident. At bottom,
relationship and consequently of any labor dispute between itself and the Union. what the Union seeks is to regularize the status of the employees contracted by
SanMig submits, in particular, that "respondent Court is vested with jurisdiction and Lipercon and D'Rite in effect, that they be absorbed into the working unit of SanMig.
judicial competence to enjoin the specific type of strike staged by petitioner union This matter definitely dwells on the working relationship between said employees
and its officers herein complained of," for the reasons that:  vis-a-vis SanMig. Terms, tenure and conditions of their employment and the
arrangement of those terms are thus involved bringing the matter within the purview
A. The exclusive bargaining representative of an employer unit of a labor dispute. Further, the Union also seeks to represent those workers, who
cannot strike to compel the employer to hire and thereby create an have signed up for Union membership, for the purpose of collective bargaining.
employment relationship with contractual workers, especially were SanMig, for its part, resists that Union demand on the ground that there is no
the contractual workers were recognized by the union, under the employer-employee relationship between it and those workers and because the
governing collective bargaining agreement, as excluded from, and demand violates the terms of their CBA. Obvious then is that representation and
therefore strangers to, the bargaining unit.  association, for the purpose of negotiating the conditions of employment are also
involved. In fact, the injunction sought by SanMig was precisely also to prevent such
B. A strike is a coercive economic weapon granted the bargaining representation. Again, the matter of representation falls within the scope of a labor
representative only in the event of a deadlock in a labor dispute dispute. Neither can it be denied that the controversy below is directly connected
over 'wages, hours of work and all other and of the employment' of with the labor dispute already taken cognizance of by the NCMB-DOLE (NCMB-
the employees in the unit. The union leaders cannot instigate a NCR- NS-01- 021-89; NCMB NCR NS-01-093-83). 
strike to compel the employer, especially on the eve of certification
elections, to hire strangers or workers outside the unit, in the hope Whether or not the Union demands are valid; whether or not SanMig's contracts with
the latter will help re-elect them.  Lipercon and D'Rite constitute "labor-only" contracting and, therefore, a regular
employer-employee relationship may, in fact, be said to exist; whether or not the
C. Civil courts have the jurisdiction to enjoin the above because Union can lawfully represent the workers of Lipercon and D'Rite in their demands
this specie of strike does not arise out of a labor dispute, is an against SanMig in the light of the existing CBA; whether or not the notice of strike
abuse of right, and violates the employer's constitutional liberty to was valid and the strike itself legal when it was allegedly instigated to compel the
hire or not to hire. (SanMig's Memorandum, pp. 475-476, Rollo).  employer to hire strangers outside the working unit; — those are issues the resolution
of which call for the application of labor laws, and SanMig's cause's of action in the
Court below are inextricably linked with those issues. 
We find the Petition of a meritorious character. 
The precedent in Layno vs. de la Cruz (G.R. No. L-29636, 30 April 1965, 13 SCRA
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any 738) relied upon by SanMig is not controlling as in that case there was no
controversy or matter concerning terms and conditions of employment or the controversy over terms, tenure or conditions, of employment or the representation of
association or representation of persons in negotiating, fixing, maintaining, changing, employees that called for the application of labor laws. In that case, what the
or arranging the terms and conditions of employment, regardless of whether the petitioning union demanded was not a change in working terms and conditions, or
disputants stand in the proximate relation of employer and employee."  the representation of the employees, but that its members be hired as stevedores in
the place of the members of a rival union, which petitioners wanted discharged
While it is SanMig's submission that no employer-employee relationship exists notwithstanding the existing contract of the arrastre company with the latter union.
between itself, on the one hand, and the contractual workers of Lipercon and D'Rite
15
Hence, the ruling therein, on the basis of those facts unique to that case, that such a
demand could hardly be considered a labor dispute. 

As the case is indisputably linked with a labor dispute, jurisdiction belongs to the
labor tribunals. As explicitly provided for in Article 217 of the Labor Code, prior to
its amendment by R.A. No. 6715 on 21 March 1989, since the suit below was
instituted on 6 March 1989, Labor Arbiters have original and exclusive jurisdiction
to hear and decide the following cases involving all workers including "1. unfair
labor practice cases; 2. those that workers may file involving wages, hours of work
and other terms and conditions of employment; ... and 5. cases arising from any
violation of Article 265 of this Code, including questions involving the legality of
striker and lockouts. ..." Article 217 lays down the plain command of the law. 

The claim of SanMig that the action below is for damages under Articles 19, 20 and
21 of the Civil Code would not suffice to keep the case within the jurisdictional
boundaries of regular Courts. That claim for damages is interwoven with a labor
dispute existing between the parties and would have to be ventilated before the
administrative machinery established for the expeditious settlement of those disputes.
To allow the action filed below to prosper would bring about "split jurisdiction"
which is obnoxious to the orderly administration of justice (Philippine
Communications, Electronics and Electricity Workers Federation vs. Hon. Nolasco,
L-24984, 29 July 1968, 24 SCRA 321).  PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU),
We recognize the proprietary right of SanMig to exercise an inherent management
prerogative and its best business judgment to determine whether it should contract
out the performance of some of its work to independent contractors. However, the
rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law
(Section 3, Article XIII, 1987 Constitution) equally call for recognition and
protection. Those contending interests must be placed in proper perspective and
equilibrium.  judgments.
WHEREFORE, the Writ of certiorari is GRANTED and the Orders of respondent
Judge of 25 March 1989 and 29 March 1989 are SET ASIDE. The Writ of
Prohibition is GRANTED and respondent Judge is enjoined from taking any further
action in Civil Case No. 57055 except for the purpose of dismissing it. The status
quo ante declaration of strike ordered by the Court on 24 May 1989 shall be
observed pending the proceedings in the National Conciliation Mediation Board-
Department of Labor and Employment, docketed as NCMB-NCR-NS-01-02189 and
NCMB-NCR-NS-01-093-83. No costs.  Same; Same; Same; Jurisdiction; Jurisdiction of the Court of ln-dustrial
SO ORDERED.
No. L-39084. February 23, 1988.*
petitioner, vs. EMILIO V. SALAS, Judge of the Court of First Instance of Rizal,
Seventh Judicial District, Branch I, Pasig, Rizal and WONG KING YUEN,
respondents.
Labor; Civil Law; Damages; The civil case directed against the provincial
sheriff and the recovery of damages being sought against the bond is an ordinary
action for damages, not a labor dispute.—It is clear that Civil Case No. 18460 is an
ordinary civil action for damages, not a labor dispute. The case is directed against the
provincial sheriff and the recovery of damages is sought against the bond provided
for Section 17, Rule 39 of the Rules of Court governing execution and satisfaction of
Same; Same; Same; Even if the act complained of arose from a labor dispute
between petitioner union and another party, there is no labor dispute between them,
as the civil case remains distinct from the labor dispute.—Even if the act complained
of by the private respondent arose from a labor dispute between the petitioner and
another party, the inevitable conclusion remains the same—there is no labor dispute
between the petitioner and the private respondent. Civil Case No. 18460 has no
direct bearing with the case filed with the industrial court. The civil case remains
distinct from the labor dispute pending with the CIR.
Relations is limited to labor disputes.—UnderCommonwealth Act No. 103, the law
creating the Court of Industrial Relations, the jurisdiction of the industrial court is
limited to labor disputes, i.e., problems and controversies pertaining to the
relationship between employer and employee.

16
 Same; Same; Same; Same; Jurisdiction of CIR can be invoked only when
there is a dispute arising between or affecting employers and employees, or when an
employer-employee relationship exists between the parties.—From the foregoing, it
is clear that the jurisdiction of the CIR can be invoked only when there is a dispute
arising between or affecting employers and employees, or when an employer-
employee relationship exists between the parties.
_______________
*
 FIRST DIVISION.
54
54  SUPREME COURT REPORTS ANNOTATED  Emilio V. Salas presiding therein, issued an injunctive writ restraining the provincial
Phil. Association of Free Labor Unions (PAFLU) vs. Salas
Same; Same; Same; Same; Absent a labor dispute between the parties, the
Court of First lnstance has jurisdiction to issue the injunctive relief sought.—
There being no labor dispute between the petitioner and the private respondent, the
Court of First Instance has the jurisdiction to issue the injunctive relief sought by the
private respondent in Civil Case No. 18460. The latter case can proceed
independently of the case pending in the Court of Industrial Relations.
PETITION for certiorari to review the decision of the Court of First Instance of
Rizal, Br. I. Salas, J.
The facts are stated in the opinion of the Court.
GANCAYCO, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court. 
The record of the case discloses that the herein petitioner Philippine Association of
Free Labor Unions (PAFLU) is a labor organization registered with the Department
of Labor and Employment. Sometime in 1963, the petitioner filed a Complaint for
unfair labor practice with the then Court of Industrial Relations (CIR) against the
Northwest manufacturing Corporation and a certain Gan Hun. The suit was docketed
as Case No. 3901-ULP.  labor case filed with the CIR and that, accordingly, it is the Court of First Instance
On September 25, 1972, the CIR rendered a Decision in favor of the petitioner labor
organization. Pursuant to a writ of execution issued by the CIR, the provincial sheriff
of Rizal commenced levying the personal properties of the said Gan Hun,
particularly the properties found in his residential apartment unit in San Juan, then a
town of Rizal province.  The sole issue in this case is whether or not the CFI has the jurisdiction to issue the
The herein private respondent Wong King Yuen however, claims that Gan Hun is his
boarder in the apartment unit mentioned earlier and that the properties inside the
apartment unit levied by the provincial sheriff belong to him and not to Gan Hun. 
Thus, on October 18, 1973, the private respondent filed a Complaint for damages
with the then Court of First Instance (CFI) of Rizal against the provincial sheriff. The
suit was docketed as Civil Case No. 18460. The amount of money involved in the
said case is about P24,680.00. 
As sought by the private respondent, the CFI, with the herein respondent Judge
sheriff from proceeding with the sale of the properties in question. 
After having been allowed by the CFI to intervene in Civil Case No. 18460, the
petitioner labor organization sought to dismiss the Complaint on the ground that the
said court had no jurisdiction over the case filed by the private respondent. 1 The
petitioner argued that Civil Case No. 18460 relates to an existing labor dispute and as
such the proper forum for the same is the industrial court. 
In an Order dated July 9, 1974, the CFI denied the Motion to Dismiss filed by the
petitioner. 2 The petitioner sought a reconsideration of the said case but did not
succeed in doing so. 3
On August 8, 1974, the petitioner elevated the case to this Court by way of the
instant Petition.4 The petitioner maintains its stand that the CFI has no jurisdiction
over Civil Case No. 18460. 
In an Answer filed with this Court on August 29, 1974, the private respondent
contends that Civil Case No. 18460 is not a labor dispute recognizable by the
industrial court. The private respondent points out that Civil Case No. 18460 is an
ordinary civil action for damages against the provincial sheriff and directed against
the sheriffs bond required under Section 17, Rule 39 of the Rules of Court. The
private respondent adds that it is an entirely separate proceeding distinct from the
which has jurisdiction over the same.5
After a careful examination of the entire record of the case, We find that instant
Petition to be devoid of merit. 
injunctive relief questioned by the petitioner. We rule in the affirmative. 
17
It is clear that Civil Case No. 18460 is an ordinary civil action for damages, not a
labor dispute. The case is directed against the provincial sheriff and the recovery of
damages is sought against the bond provided for Section 17, Rule 39 of the Rules of
Court governing execution and satisfaction of judgments. 

Even if the act complained of by the private respondent arose from a labor dispute
between the petitioner and another party, the inevitable conclusion remains the same
— there is no labor dispute between the petitioner and the private respondent. Civil
Case No. 18460 has no direct bearing with the case flied with the industrial court.
The civil case remains distinct from the labor dispute pending with the CIR. 

Under Commonwealth Act No. 103, the law creating the Court of Industrial
Relations, the jurisdiction of the industrial court is limited to labor
disputes. i.e., problems and controversies pertaining to the relationship between
employer and employee. Section I thereof provides as follows — 

Sec. 1. Jurisdiction. — There is created a Court of Industrial

Relations hereinafter called the court, which shall have jurisdiction
over the entire Philippines to consider, investigate, decide and
settle all questions, matters, controversies, or disputes arising
between, and/or affecting employers and employees or
laborers, and regulate the relations between them, . . . . (Emphasis
supplied.) 

From the foregoing, it is clear that the jurisdiction of the CIR can be invoked only
when there is a dispute arising between or affecting employers and employees, or
when an employer-employee relationship exists between the parties. 

There being no labor dispute between the petitioner and the private respondent, the
Court of First Instance 6 has the jurisdiction to issue the injunctive relief sought by
the private respondent in Civil Case No. 18460.7 The latter case can proceed
independently of the case pending in the Court of Industrial Relations. 8

Accordingly, the writ of certiorari sought by the petitioner cannot issue. 

WHEREFORE, in view of the foregoing, the instant Petition for certiorari is hereby
DISMISSED for lack of merit. We make no pronouncement as to costs:

SO ORDERED.

18