People v. Julio Pomar / GR No.

L-22008 / November 3, 1924 /

Johnson, J; / Validity of Section 13 & 15 of Act No. 3071 as to the
states exercise of police power.
F: Defendant (Pomar) runs a tobacco manufacturing company; People &
Macaria (Defendant-Appellant) is an employee of the former. Pomar is
accused of not paying Macaria what is due to her, regular wages, as she
was on pregnancy leave (P80). Pomar is arguing that the provisions of Act
3071, is void and unconstitutional. CFI ruled in favor of Macaria, P50, and
imprisonment if insolvent. Pomar now appeals, raising that CFI erred in
not declaring Sec. 13 to be unconstitutional, Sec 13 gives women the
right to be paid while on pregnancy, 30 days prior and another 30 postpregnancy. Defendants main argument is that he is deprived of
his liberty to contract, which the constitution of the Philippine
Islands guarantees to every citizen his liberty and one of his
liberties is the liberty to contract.
I: Whether or not the provisions of sections 13 and 15 of Act No.
3071 are a reasonable and lawful exercise of the police power of
the state.
R: Unconstitutional, CFIs ruling revoked. The rule in this
jurisdiction is, that the contracting parties may establish any
agreements, terms, and conditions they may deem advisable,
provided they are not contrary to law, morals or public policy.
(Art. 1255, Civil Code.)
The police power of the state is a growing and expanding power. As
civilization develops and public conscience becomes awakened, the police
power may be extended, as has been demonstrated in the growth of
public sentiment with reference to the manufacture and sale of
intoxicating liquors. But that power cannot grow faster than the
fundamental law of the state, nor transcend or violate the express
inhibition of the people's law the constitution. If the people desire to
have the police power extended and applied to conditions and things
prohibited by the organic law, they must first amend that law.
In other words, said section creates a term or condition in every
contract made by every person, firm, or corporation with any
woman who may, during the course of her employment, become
pregnant, and a failure to include in said contract the terms fixed
to a fine and imprisonment. Clearly, therefore, the law has
deprived, every person, firm, or corporation owning or managing

a factory, shop or place of labor of any description within the

Philippine Islands, of his right to enter into contracts of
employment upon such terms as he and the employee may agree
upon. The law creates a term in every such contract, without the
consent of the parties.

WEST COAST HOTEL Co. v. PARRISH / 300 US 379 (1937)

F: In 1913, the state of Washington enacted a minimum to protect women
and minorities. The Respondent (Elsie Parrish), an employee of the
Petitioner (West Coast Hotel Co.), was paid sub-minimum wage and filed
suit to recover the balance between her wage and the minimum wage set
by state statute. The lower state courts ruled the statute unconstitutional,
but the Washington State Supreme Court overturned this decision and
ruled in favor of Parrish. The Petitioner appealed this decision to the
United States Supreme Court on the basis that a state set minimum wage
violates the "liberty of contract constructed by the Fifth Amendment of
the U.S. Constitution as applied by the Fourteenth Amendment.
I: Does the minimum wage law violate the liberty of contract
construed under the Fifth Amendment as applied by the
Fourteenth Amendment?
R: HUGHES: This case calls for a re-examination of the precedent
established by Adkins v. Childrens Hospital (1923) which overturned
Washington D.C.s minimum wage under the Fifth Amendment due to the
change in economic conditions (the Great Depression).Both cases involve
the freedom of contract, however the 4 th and the 14th Amendment does
not mention contracts, it only speaks of liberty and places a limit on
liberty by due process of law. As such, regulation which is reasonable in
relation to its subject and is adopted in the interests of the community is
due process. This limitation of liberty in particular governs the freedom of
contract. There is no absolute freedom to do as one wills or to contract
as one chooses, because liberty implies the absence of arbitrary restraint,
not immunity from reasonable regulation imposed in the interests of the
community. This allows for state intervention when the state holds a
particular interest of protection; especially when the parties to a contact
do not stand one quality, such as in an employer/employee relationship
DISSENTING OPINION: SUTHERLAND: Economic conditions should not be
grounds for the re-examination of the precedent established by Adkins v.
Childrens Hospital (1923) because to say that the Constitution changes
with the times and has to potential to not mean something gnow that it
meant with the document was drafted does it a disservice. Considerations
of what the statute will ultimately do, good or bad, should not be
considered by the Court, it must only answer the constitutional
considerations involved. As such, while legislatures are free to recognize
degrees of harm, the statute only applies to women and since the
contractual rights of men and women are the same the statute creates an

arbitrary discrimination based on sex. This implies that the bargaining

abilities of women and men are not equal because of gender which is
inherently untrue. Justices BUTLER, MCREYNOLDS, and VAN DEVANTER
also dissented.
SUMMARY OF LEGAL PRINCIPLES: This case involves the legal principle of
freedom on contract as established by the Fifth Amendment. However
the 5th and 14th Amendments do not reference contracts but instead state
that liberty cannot be deprived without due process of law. While due
process of law is yet another abstract term the court defined it in
reference to contracts: regulation which is reasonable to its subject and
is adopted in the interests of the community is due process. In other
words, legislatures can place limits on liberty, specifically freedom of
contract, as long as the regulation is not arbitrary and reasonable to the
extent that is protects the interests of the community as a whole. Since
legislatures are free to recognize degrees of harm, regulations can be
made to address the varying degrees, such as a minimum wage for
women.

ACCFA v. ACCFA WORKERS ASSOCIATION & CRI / GR No. L-21484 &

23605 / November 29, 1969 / Makalintal, J.: / Governmental
function, proprietary function, constituent function, ministrant
function
F: The Agricultural Credit and Cooperative Financing Administration
(ACCFA) was a government agency created under Republic Act No. 821.
The Land Reform Code (Republic Act No. 3844) reorganized and changed
its name to the Agricultural Credit Administration. A collective bargaining
agreement was entered into between ACCFA and its two unions. The
Union declared a strike and, together with its mother union, the
Confederation of Unions in Government Corporations and Offices
(CUGCO) filed a case with the Court of Industrial Relations (CIR) for unfair
labor practice. During the pendency of this case, the unions filed a
petition for certification election with the CIR. In both instances, ACCFA
challenges the jurisdiction of the CIR arguing that is engaged in
governmental functions
I: Whether or not ACA is a government entity, therefore its UNION
may not strike.
Yes. The Unions have no bargaining rights with ACA. EO 75
placed ACA under the LRPA and by virtue of RA 3844 the
implementation of the Land Reform Program of the government
is a governmental function NOT a proprietary function. Being
such, ACA can no longer step down to deal privately with said
unions as it may have been doing when it was still ACCFA.
However, the growing complexities of modern society have
rendered the classification of the governmental functions as
unrealistic, if not obsolete. Ministerial and governmental
functions continue to lose their well-defined boundaries and are
absorbed within the activities that the government must
undertake in its sovereign capacity if it to meet the increasing
social challenges of the times and move towards a greater
socialization of economic forces.
This is contrary to Section 11 of Republic Act No. 875, which provides:
"SEC. 11. Prohibition Against Strike in the Government. The terms and
conditions of employment in the Government, including any political
subdivision or instrumentality thereof, are governed by law and it is
declared to be the policy of this Act that employees therein shall not
strike for the purposes of securing changes or modification in their terms

and conditions of employment. Such employees may belong to any labor

organization which does not impose the obligation to strike or to join in
strike: Provided, However, that this section shall apply only to
employees employed in governmental functions of the
Government including but not limited to governmental
corporations."

Bengzon vs. Drilon / GR No. 103524 / 1992-04-15 / Guttierez, Jr. J.:

/ Vested Right to Accrued Pension
F: Republic Act No. 1797, as amended, was enacted to provide the
Justices of the Supreme Court and of the Court of Appeals retirement
pensions. Eventually, President Marcos issued Presidential Decree 644
modifying the pensions to be fixed to the then prevailing salary rates,
instead of giving them automatic readjustment feature (i.e. pension to
increase or decrease as the salary at the time increases or decreases),
like what they had previously in RA 1797. Having the impression that PD
644 repealed RA 1797, which resulted to the discrimination against
retired members of the Judiciary in terms of pension rates; Congress
approved House Bill No. 16297 (HB 16297) to restore the automatic
readjustment feature. However, President Aquino vetoed the bill for it
would allegedly disrupt the compensation standardization. It turned out
however, that absent its publication, PD 644 has never become a valid
law, making HB 16297 superfluous for RA 1797 was still in effect.
Additionally, the veto on HB 16297 produced no effect. Pursuant to such,
Congress included in the General Appropriations Bill (GAB) for Fiscal Year
1992 certain appropriations for the Judiciary intended for the payment of
the adjusted pension rates. President Aquino vetoed particular provisions
in GAB.
I: WON the veto deprives the retired Justices of their rights to the
pensions due them.
R: Retired Justices have vested right to the accrued pensions due
to them pursuant to RA 1791. Compliance with the statutory
prerequisite for retirement grants vested right to retire and draw
salary, and may not, thereafter, be revoked or impaired.
As Justice Cruz aptly stated in Teodoro J. Santiago v. COA, (G.R. No. 92284,
July 12, 1991):
"Retirement laws should be interpreted liberally in favor of the retiree
because their intention is to provide for his sustenance, and hopefully
even comfort, when he no longer has the stamina to continue earning his
livelihood. After devoting the best years of his life to the public service, he
deserves the appreciation of a grateful government as best concretely
expressed in a generous retirement gratuity commensurate with the
value and length of his services. That generosity is the least he should
expect now that his work is done and his youth is gone. Even as he feels
the weariness in his bones and glimpses the approach of the lengthening

shadows, he should be able to luxuriate in the thought that he did his task
well, and was rewarded for it."
For as long as these retired Justices are entitled under laws which
continue to be effective, the government cannot deprive them of their
vested right to the payment of their pensions.

Article II State Policies

Section 10. The State shall promote social justice in all phases of
national development.
This policy mandates the state to promote social justice in all phases
of national development. In the fulfillment of this duty, the state must
give preferential attention to the welfare of the less fortunate members of
the community the poor, the underprivileged, whose who have less in
life.
It is discussed fully under Article XIII (Social Justice and Human
Rights.)
Section 18. The State affirms labor as a primary social economic
force. It shall protect the rights of workers and promote their
welfare.

(Art. XIII, Sec. 3) The state shall afford full protection to labor, local
and overseas, organized and unorganized, and promote full employment
and equality of employment opportunities for all.
It shall guarantee 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. They shall be entitled
to security of tenure, humane conditions of work, and a living wage. They
shall also participate in policy and decision-making processes affecting
their rights and benefits as may be provided by law.
The state shall promote the principle of shared responsibility
between workers and employers and the preferential use of voluntary
modes in settling disputes. Including conciliation and shall enforce their
mutual compliance therewith to foster industrial peace.

The state shall regulate the relations between workers and

employers, recognizing th right of labor to its just share in the fruits of
production and the right of enterprises to reasonable returns on
investments, and to expansion and growth.

Calalang v. Williams / GR No. 47800 / 1940-12-02 / Laurel, J: /

Social Justice
F: Road Schedule adjustments. Calalang assails that CA 548, Section 1
gives the Director of Public Works, with the approval of the Secretary of
Public Works and Communications Authorization to promulgate rules and
regulations for the regulation and control of the use of and traffic on
national roads and streets, as being unconstitutional, because it
constitutes undue delegation of legislative power.
I: The petitioner avers that the rules and regulations complained
of infringe upon the constitutional precept regarding the
promotion of social justice to insure the well-being and economic
security of all the people.
R: The promotion of social justice, however, is to be achieved not through
a mistaken sympathy towards any given group. Social justice is "neither
communism, nor despotism, nor atomism, nor anarchy," but the
humanization of laws and the equalization of social and economic forces
by the State so that justice in its rational and objectively secular
conception may at least be approximated. Social justice means the
promotion of the welfare of all the people, the adoption by the
Government of measures calculated to insure economic stability of all the
competent elements of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of the members of
the community, constitutionally, through the adoption of measures legally
justifiable, or extra-constitutionally, through the exercise of powers
underlying the existence of all governments on the time-honored principle
of salus populi est suprema lex.
Social justice, therefore, must be founded on the recognition of
the necessity of interdependence among divers and diverse units
of a society and of the protection that should be equally and
evenly extended to all groups as a combined force in our social
and economic life, consistent with the fundamental and
paramount objective of the state of promoting the health,
comfort, and quiet of all persons, and of bringing about "the
greatest good to the greatest number.

Mackay v. NLRC / GR No. 81262 / 1989.08.25 / Cortes, J.: / Labor

and Social Legislation.
F: Tobias (PR) is an employee of the Globe Mackay and Radio Co.
(Mackay). Mackay discovered fictitious purchases and fraudulent
transactions, upon reporting he was confronted by Hendry (P), and
accused him for the crime, and ordered him to take a forced leave. The
police investigation concluded that PR was innocent, unsatisfied, P hired a
private investigator w/c concluded that P was guilty but highly
recommended that further investigations be made. A second laboratory
crime report was generated by the police, reiterating their previous
findings. Notwithstanding, P Sued PR for estafa, which were all ultimately
dismissed. P was later terminated, which he appealed to the NLRC, which
later on both parties compromised. PR then tried for other employment,
but then P told the new company that Tobias was dismissed for
dishonesty, therefore P filed a civil case for damages on alleged
malicious, oppressive, and abusive acts of P. RTC Manila ruled in favor of
P, CA affirmed.
I: WON P is liable for damages.
R: Affirmed. The trial court, after making a computation of the damages
incurred by Tobias [See RTC Decision, pp. 7-8; Rollo, pp. 154-155],
awarded him the following: eighty thousand pesos (P80,000.00) as actual
damages; two hundred thousand pesos (P200,000.00) as moral damages;
twenty thousand pesos (P20,000.00) as exemplary damages; thirty
thousand pesos (P30,000.00) as attorney's fees; and, costs. It must be
underscored that petitioners have been guilty of committing
several actionable tortious acts, i.e., the abusive manner in
which they dismissed Tobias from work including the baseless
imputation of guilt and the harassment during the investigations;
the defamatory language heaped on Tobias as well as the
scornful remark on Filipinos; the poison letter sent to RETELCO
which resulted in Tobias' loss of possible employment; and, the
malicious filing of the criminal complaints. Considering the extent
of the damage wrought on Tobias, the Court finds that, contrary
to petitioners' contention, the amount of damages awarded to
Tobias was reasonable under the circumstances.
This principle damnum absque injuria, finds no application in this case. It
bears repeating that even granting that petitioners might have had the
right to dismiss Tobias from work, the abusive manner in which that right
was exercised amounted to a legal wrong for which petitioners must now

be held liable. Moreover, the damage incurred by Tobias was not only in
connection with the abusive manner in which he was dismissed but was
also the result of several other quasi-delictual acts committed by
petitioners.

BREW MASTER v. NAFLU, ESTRADA & NLRC / GR No. 119243 /

1997.04.17 / Davide Jr., J.:
F: Estrada (PC) is member of NAFLU (Union), was dismissed by Brew
Master (P) because of his unsatisfactory answer to a month long absence
(AWOP), PC reasoned that he had to bring his children to the province
because his wife abandoned them and that he was unable to report his
absence because he lacks financially. The Labor Arbiter (LA) dismissed
the complaint citing managerial control. Upon appeal to the NLRC, which
reversed LAs decision, citing that prolonged absences, although
unauthorized, may not amount to gross neglect or abandonment of work
to warrant outright termination of employment, as a first offender.
I: WON NLRC committed grave abuse of discretion.
R: Dismissed. Petitioner's finding that complainant was guilty of
abandonment is misplaced. Abandonment as a just and valid ground for
dismissal requires the deliberate, unjustified refusal of the employee to
resume his employment. Two elements must then be satisfied: (1) the
failure to report for work or absence without valid or justifiable reason;
and (2) a clear intention to sever the employer-employee relation. The
second element is the more determinative factor and must be evinced by
overt acts. Likewise, the burden of proof is on the employer to show the
employee's clear and deliberate intent to discontinue his employment
without any intention of returning, mere absence is not sufficient. 9 These
elements are not present here. First, as held above, complainant's
absence was justified under the circumstances. As to the second
requisite, we are not convinced that complainant ever intended to sever
the employer-employee relationship. Complainant immediately
complied with the memo requiring him to explain his absence,
and upon knowledge of his termination, immediately sued for
illegal dismissal. These plainly refuted any claim that he was no
longer interested in returning to work. Without doubt, the
intention is lacking.
While the employer is not precluded from prescribing rules and
regulations to govern the conduct of his employees, these rules and their
implementation must be fair, just and reasonable. It must be
underscored that no less than our Constitution looks with
compassion on the workingman and protects his rights not only
under a general statement of a state policy, but under the Article
on Social Justice and Human Rights, thus placing labor contracts
on a higher plane and with greater safeguards. Verily, relations

between capital and labor are not merely contractual. They are
impressed with public interest and labor contracts must,
perforce, yield to the common good.

FUENTES v. NLRC & AGUSAN PLANTATION / GR No. 110017 /

1997.01.02 / Bellosillo, J.:
F: Petitioners, 75 of them, was terminated by PR because of retrenchment
measures. PR contended that they conducted themselves properly before
terminating. LA ordered PR to pay P salary differentials and attorneys
fees. NLRC reversed upon appeal by PR. P argues now that their dismissal
or retrenchment did not comply with the requirement of Art. 283 of the
Labor Code.
I: WON NLRC committed grave abuse of discretion.
R: We agree with the conclusion of the Labor Arbiter that the termination
of the services of petitioners was illegal as there was no valid
retrenchment. Respondent NLRC committed grave abuse of discretion in
reversing the findings of the Labor Arbiter and ruling that there was
substantial compliance with the law. This Court firmly holds that
measures should be strictly implemented to ensure that such
constitutional mandate on protection to labor is not rendered meaningless
by an erroneous interpretation of applicable laws.
There is no question that an employer may reduce its work force
to prevent losses. However, these losses must be serious, actual
and real. 3 Otherwise, this ground for termination of employment
would be susceptible to abuse by scheming employers who might
be merely feigning losses in their business ventures in order to
ease out employees
Indeed, private respondents failed to prove their claim of
business losses. What they submitted to the Labor Arbiter were
mere
self-serving
documents
and
allegations.
Private
respondents never adduced evidence which would show clearly
the extent of losses they suffered as a result of lack of capital
funding, which failure is fatal to their cause.
We uphold the monetary award of the Labor Arbiter for: (a) the balance of
the separation pay benefits of petitioners equivalent to fifteen (15) days
for every year of service after finding that reinstatement is no longer
feasible under the circumstances, and (b) the salary differentials for
complainants who were relieved during the pendency of the case before
the Labor Arbiter and full back wages for the rest of the complainants.
This is in accord with Art. 279 of the Labor Code as amended by R.A. 6715
under which petitioners who were unjustly dismissed from work shall be
entitled to full back wages inclusive of allowances and other benefits or

their monetary equivalent computed from the time their compensation

was withheld up to the date of this decision.

JAMER & AMORTIZADO v. NLRC & ISETANN / GR No. 112630 /

1997.09.05 / Grave Abuse of Discretion.
F: Both P are dismissed by PR on alleged dishonesty, because of shortage
on sales accounting, they did not report the incident immediately, trying
to reconcile the same, but to no avail. Suspended, and after finding their
answers unsatisfactory, PR dismissed them both. Ps also avers that that
there are others who have access to the vault. LA ruled in favor of Ps, on
their claim that they were illegally dismissed, , and ordered their
reinstatement. PR appealed, and after due re-shuffling of the case, LA
Espiritu Jr. ruled that there were no justification for their dismissal, with
back wages. Dissatisfied PR re-appealed to the NLRC which now
dismissed the complaint. Hence this petition.
I: WON The NLRC committed Grave Abuse of Discretion.
NLRC, did not act with grave abuse of discretion in declaring that
petitioners were legally dismissed from employment. The failure of
petitioners to report to management the aforementioned
irregularities constitute "fraud or willful breach of the trust
reposed in them by their employer or duly authorized
representative" one of the just causes in terminating
employment as provided for by paragraph (c), Article 282 of the
Labor Code, as amended. From the foregoing premises, it is crystal
clear that the failure of petitioners to report the aforequoted shortages
and overages to management as soon as they arose resulted in the
breach of the fiduciary trust reposed in them by respondent company,
thereby causing the latter to lose confidence in them. This warrants their
dismissal.
The cause of social justice is not served by upholding the interest
of petitioners in disregard of the right of private respondents.
Social justice ceases to be an effective instrument for the
"equalization of the social and economic forces" by the State
when it is used to shield wrongdoing. 29 While it is true that
compassion and human consideration should guide the
disposition of cases involving termination of employment since it
affects one's source or means of livelihood, it should not be
overlooked that the benefits accorded to labor do not include
compelling an employer to retain the services of an employee
who has been shown to be a gross liability to the employer. It
should be made clear that when the law tilts the scale of justice
in favor of labor, it is but a recognition of the inherent economic

inequality between labor and management. The intent is to

balance the scale of justice; to put the two parties on relatively
equal positions. There may be cases where the circumstances
warrant favoring labor over the interests of management but
never should the scale be so tilted if the result is an injustice to
the employer, Justicia remini regarda est (Justice is to be denied
to none).