St. Martin Funeral Homes vs NLRC (1998) G.R.

130866

Facts:

Private respondent alleges that he started working as Operations Manager of

petitioner St. Martin Funeral Home on February 6, 1995. However, there was no contract of

employment executed between him and petitioner nor was his name included in the semi-

monthly payroll.

On January 22, 1996, he was dismissed from his employment for allegedly

misappropriating P38,000.00. Petitioner on the other hand claims that private respondent

was not its employee but only the uncle of Amelita Malabed, the owner of petitioner St.

Martins Funeral Home and in January 1996, the mother of Amelita passed away, so the

latter took over the management of the business.

Amelita made some changes in the business operation and private respondent and

his wife were no longer allowed to participate in the management thereof. As a

consequence, the latter filed a complaint charging that petitioner had illegally terminated

his employment.

The labor arbiter rendered a decision in favor of petitioner declaring that no employer-

employee relationship existed between the parties and therefore his office had no

jurisdiction over the case.

Issue:

WON the decision of the NLRC are appealable to the Court of Appeals.

Held:

NLRC decisions are appealable to the Court of Appeals. In view of the increasing

number of labor disputes that find their way to the Supreme Court, the legislative changes

introduced over the years into the provisions of P.D. 442 (Labor Code of the Philippines) and

B.P. 129 (Judiciary Reorganization Act of 1980) and the present state of the law where there

is no provision for appeals from the decision of the NLRC, the Court saw the need for

reassessment of this procedural aspect.

The Court noted that there may have been an oversight in the course of the

deliberations on R.A. 7902, amending B.P. 129, or an imprecision in the terminology used
therein as from the records, Congress had intended to provide for judicial review of the

adjudication of the NLRC in labor cases by the Supreme Court, but there was an

inaccuracy in the term used for the intended mode of review.

The Court is, therefore, of the considered opinion that ever since appeals from the

NLRC to the SC were eliminated, the legislative intendment was that the special civil action

for certiorari was and still is the proper vehicle for judicial review of decisions of the NLRC.

The use of the word appeal in relation thereto and in the instances we have noted

could have been a lapsus plumae because appeals by certiorari and the original action for

certiorari are both modes of judicial review addressed to the appellate courts. The

important distinction between them, however, and with which the Court is particularly

concerned here is that the special civil action for certiorari is within the concurrent original

jurisdiction of this Court and the Court of Appeals; whereas to indulge in the assumption

that appeals by certiorari to the SC are allowed would not subserve, but would subvert, the

intention of the Congress as expressed in the sponsorship speech on Senate Bill No. 1495.

Therefore, all references in the amended Section 9 of B.P No. 129 to supposed appeals from

the NLRC to the Supreme Court are interpreted and hereby declared to mean and refer to

petitions for certiorari under Rule 65. Consequently, all such petitions should henceforth be

initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of

courts as the appropriate forum for the relief desired.

VIRGILIO KAWACHI, et al. v. DOMINIE DEL QUERO GR No. 163768 March 27, 2007

TINGA, J.:

LA STILL HAS JURISDICTION OVER CLAIMS FOR DAMAGES ARISING FROM

INCIDENTS WITH REASONABLE CAUSAL CONNECTION WITH EMPLOYEE-EMPLOYER

RELATIONSHIP

FACTS:

Kawachi hired Del Quero as a clerk of A/J Raymundo Pawnshop, Inc. On August 10,

2002, Kawachi scolded Del Quero in front of many people about the way she treated the

customers of the pawnshop and afterwards terminated Del Quero from employment
without affording her due process. Del Quero charged Virgilio Kawachi, Julius Kawachi and

A/J Raymundo Pawnshop, Inc., with illegal dismissal, non-execution of a contract of

employment, violation of minimum wage law, and non-payment of overtime pay.

A few months after, Del Quero filed an action for damages against Virgilio and Julius

Kawachi before the MeTC of Quezon City. Del Quero claimed that the August 10, 2002

incident had caused her to suffer serious embarrassment and shame so that she could not

do anything but cry because of the shameless way by which she was terminated from the

service.

The Kawachis then moved for the dismissal of the complaint on the grounds of lack of

jurisdiction and forumshopping or splitting causes of action.

MeTC RULING: DENIED the Motion for Dismissal

It ruled that no causal connection appeared between Del Queros cause of action and

the employer-employee relations between the parties. The Kawachis filed a petition for

certiorari.

RTC RULING: AFFIRMED the MeTC

It upheld the jurisdiction of the MeTC over Del Queros complaint for damages. The

employees action for damages based on slanderous remarks uttered by the employer was

within the regular courts jurisdiction since the complaint did not allege any unfair labor

practice on the part of the employer.

ISSUE:

Do the regular courts have jurisdiction over the claim for damages?

SC RULING:

NO. The NLRC has jurisdiction over Del Queros complaint for illegal dismissal and

damages arising therefrom. She cannot be allowed to file separate or independent civil

action for damages where the alleged injury has a reasonable connection to her termination

from employment. Consequently, the action for damages filed before the MeTC must be

dismissed. Jurisprudence has developed the reasonable causal connection rule. Under this

rule, if there is a reasonable causal connection between the claim asserted and the

employer-employee relations, then the case is within the jurisdiction of the labor courts; in
the absence of such nexus, it is the regular courts that have jurisdiction. In the instant

case, the allegations of Del Quero in her complaint for damages show that her injury was

the offshoot of Kawachis immediate harsh reaction as her administrative superior to the

supposedly sloppy manner by which she had discharged her duties. The allegations in Del

Queros complaint unmistakably relate to the manner of her alleged illegal dismissal. The

Court further notes that for a single cause of action, the dismissed employee cannot be

allowed to sue in two forums: one, before the labor arbiter for reinstatement and recovery of

back wages; and two, before a court of justice for recovery of damages. Suing in the manner

described is known as splitting a cause of action, a practice engendering multiplicity of

actions.

Petitioners: EMER MILAN, RANDY MASANGKAY, WILFREDO JAVIER, RONALDO

DAVID, BONIFACIO MATUNDAN, NORA MENDOZA, ET AL., (Milan et.al)

Respondents: NATIONAL LABOR RELATIONS COMMISSION, SOLID MILLS, INC.,

AND/OR PHILIP ANG

Petition: Petition for Review of CA Decision

Ponente: LEONEN

FACTS:

1. Milan et.al are Solid Mills, Inc.s (Solid Mills) employees. They are represented by the

National Federation of Labor Unions (NAFLU), their collective bargaining agent.

2. As Solid Mills employees, Milan et.al. and their families were allowed to occupy SMI

Village, a property owned by Solid Mills. According to Solid Mills, this was [o]ut of

liberality and for the convenience of its employees . . . [and] on the condition that the

employees would vacate the premises anytime the Company deems fit.

3. In September 2003, Milan et.al were informed that effective October 10, 2003, Solid

Mills would cease its operations due to serious business losses. NAFLU recognized

Solid Mills closure due to serious business losses in the memorandum of agreement

dated September 1, 2003. The memorandum of agreement provided for Solid Mills

grant of separation pay less accountabilities, accrued sick leave benefits, vacation
 leave benefits, and 13th month pay to the employees. The agreement was entered into

with full knowledge by the parties of their rights under the law and they bound

themselves not to conduct any concerted action of whatsoever kind, otherwise the

grant of financial assistance as discussed above will be withheld.

4. Solid Mills filed its Department of Labor and Employment termination report on

September 2, 2003.

5. Later, Solid Mills, through Alfredo Jingco, sent to Milan et.al individual notices to

vacate SMI Village.

6. Milan et.al. were no longer allowed to report for work by October 10, 2003. They were

required to sign a memorandum of agreement with release and quitclaim before their

vacation and sick leave benefits, 13th month pay, and separation pay would be

released. Employees who signed the memorandum of agreement were considered to

have agreed to vacate SMI Village, and to the demolition of the constructed houses

inside as condition for the release of their termination benefits and separation pay.

Milan et.al. refused to sign the documents and demanded to be paid their benefits

and separation pay.

7. Hence, they filed complaints before the Labor Arbiter for alleged non-payment of

separation pay, accrued sick and vacation leaves, and 13th month pay. They argued

that their accrued benefits and separation pay should not be withheld because their

payment is based on company policy and practice. Moreover, the 13th month pay is

based on law, specifically, Presidential Decree No. 851. Their possession of Solid Mills

property is not an accountability that is subject to clearance procedures. They had

already turned over to Solid Mills their uniforms and equipment when Solid Mills

ceased operations.

8. On the other hand, Solid Mills argued that Milan et.al.s complaint was premature

because they had not vacated its property.

9. The Labor Arbiter ruled in favor of Milan et.al. According to the Labor Arbiter, Solid

Mills illegally withheld petitioners benefits and separation pay. The memorandum of

agreement dated September 1, 2003 stated no condition to the effect that petitioners

must vacate Solid Mills property before their benefits could be given to them. Milan
 et.al.s possession should not be construed as theiraccountabilities that must be

cleared first before the release of benefits. er.

10. Silodd Mills appealed to the National Labor Relations Commission. The

National Labor Relations Commission affirmed part of the decision but reversed and

set aside another part and decided that Milan et.al.s monetary claims in the form of

separation pay, accrued 13th month pay for 2003, accrued vacation and sick leave

pays are held in abeyance pending compliance of their accountabilities to respondent

company by turning over the subject lots they respectively occupy at SMI Village

Sucat Muntinlupa City, Metro Manila to Solid Mills. Linga and four other were already

paid their respective separation pays and benefits. Meanwhile, Teodora Mahilom

already retired long before Solid Mills closure. She was already given her retirement

benefits.

11. The National Labor Relations Commission ruled that because of petitioners

failure to vacate Solid Mills property, Solid Mills was justified in withholding their

benefits and separation pay.35 Solid Mills granted the petitioners the privilege to

occupy its property on account of petitioners employment. 36 It had the prerogative to

terminate such privilege.37 The termination of Solid Mills and petitioners employer-

employee relationship made it incumbent upon petitioners to turn over the property

to Solid Mills.

12. The Court of Appeals ruled that Solid Mills act of allowing its employees to

make temporary dwellings in its property was a liberality on its part. It may be

revoked any time at its discretion.

ISSUE: Whether or not an employer is allowed to withhold terminal pay and benefits

pending the employees return of its properties

RULING/RATIO: Yes. The fact that majority of NAFLUs members were not occupants of

respondent Solid Mills property is evidence that possession of the property was not

contemplated in the agreement. Accountabilities should be interpreted to refer only to

accountabilities that were incurred by petitioners while they were performing their duties
as employees at the worksite. Moreover, applicable laws, company practice, or policies do

not provide that 13th month pay, and sick and vacation leave pay benefits, may be withheld

pending satisfaction of liabilities by the employee.

Requiring clearance before the release of last payments to the employee is a standard

procedure among employers, whether public or private. Clearance procedures are

instituted to ensure that the properties, real or personal, belonging to the employer but are

in the possession of the separated employee, are returned to the employer before the

employees departure.

As a general rule, employers are prohibited from withholding wages from employees (Art.

116, Labor Code). The Labor Code also prohibits the elimination or diminution of benefits

(Art. 100, Labor Code).

However, our law supports the employers institution of clearance procedures before the

release of wages. As an exception to the general rule that wages may not be withheld and

benefits may not be diminished, the Labor Code provides: Art. 113. Wage deduction. No

employer, in his own behalf or in behalf of any person, shall make any deduction from the

wages of his employees, except:

1. In cases where the worker is insured with his consent by the employer, and the

deduction is to recompense the employer for the amount paid by him as premium on

the insurance;

2. For union dues, in cases where the right of the worker or his union to check-off has

been recognized by the employer or authorized in writing by the individual worker

concerned; and

3. In cases where the employer is authorized by law or regulations issued by the

Secretary of Labor and Employment.

The Civil Code provides that the employer is authorized to withhold wages for debts due:

Article 1706. Withholding of the wages, except for a debt due, shall not be made by the
employer. Debt in this case refers to any obligation due from the employee to the

employer. It includes any accountability that the employee may have to the employer.

There is no reason to limit its scope to uniforms and equipment, as petitioners would argue.

More importantly, respondent Solid Mills and NAFLU, the union representing petitioners,

agreed that the release of petitioners benefits shall be less accountabilities.

Accountabilities of employees are personal. They need not be uniform among all employees

in order to be included in accountabilities incurred by virtue of an employer-employee

relationship. Milan et.al. do not categorically deny Solid Mills ownership of the property,

and they do not claim superior right to it. What can be gathered from the findings of the

Labor Arbiter, National Labor Relations Commission, and the Court of Appeals is that Solid

Mills allowed the use of its property for the benefit of Milan et.al. as its employees. Milan

et.al were merely allowed to possess and use it out of Solid Mills liberality. The employer

may, therefore, demand the property at will.

DISPOSITIVE: Solid Mills won.

DOCTRINE: An employer is allowed to withhold terminal pay and benefits pending the

employees return of its properties. As a general rule, No employer, in his own behalf or in

behalf of any person, shall make any deduction from the wages of his employees. The

following cases are considered exceptions:

1. In cases where the worker is insured with his consent by the employer, and the

deduction is to recompense the employer for the amount paid by him as premium on

the insurance;

2. For union dues, in cases where the right of the worker or his union to check-off has

been recognized by the employer or authorized in writing by the individual worker

concerned; and

3. In cases where the employer is authorized by law or regulations issued by the

Secretary of Labor and Employment.

SANTIAGO v. CF SHARP CREW MANAGEMENT G.R. No. 162419 July 10, 2007 TINGA,

J.:

JURISDICTION OF LABOR ARBITER DOCTRINE: The jurisdiction of labor arbiters is not

limited to claims arising from employer-employee relationships.

FACTS:

In 1998, Paul Santiago signed a new contract of employment with CF Sharp Crew

Mgmt., Inc., with the duration of nine (9) months. He was assured of a monthly salary of

US$515.00, overtime pay and other benefits. Santiago was to be deployed on board the

"MSV Seaspread". A week before the scheduled date of departure, Capt. Pacifico Fernandez,

CF Sharps Vice President, sent a fax to the captain of "MSV Seaspread telling the latter

that he received calls from various individuals about the possibility that Santiago may jump

ship in Canada like his brother did before him. Santiago was thus told that he would not be

leaving for Canada anymore, but he was reassured that he might be considered for

deployment at some future date. Consequently, Santiago filed a complaint for illegal

dismissal, damages, and attorney's fees against CF Sharp and its foreign principal. In

defense, CF Sharp contends that there is no employer-employee relationship between

petitioner and respondent because under the POEA Standard Contract, the employment

contract shall commence upon actual departure of the seafarer from the airport or seaport

at the point of hire. In the absence of an employer employee relationship between the

parties, the claims for illegal dismissal, actual damages, and attorneys fees should be

dismissed as the NLRC does not have jurisdiction over the same.

LA RULING: The labor arbiter held respondent liable

NLRC RULING: (NLRC) ruled that there is no employer-employee relationship between

petitioner and respondent because under the Standard Terms and Conditions Governing

the Employment of Filipino Seafarers on Board Ocean Going Vessels (POEA Standard

Contract), the employment contract shall commence upon actual departure of the seafarer

from the airport or seaport at the point of hire and with a POEA-approved contract. In the

absence of an employer-employee relationship between the parties, the claims for illegal

dismissal, actual damages, and attorneys fees should be dismissed.

 CA RULING: It agreed with the NLRCs finding that petitioners non-deployment was a

valid exercise of respondents management prerogative.

ISSUE:

Does the NLRC have jurisdiction over the case?

SC RULING:

YES. The jurisdiction of labor arbiters is not limited to claims arising from employer-

employee relationships. Section 10 of R.A. No. 8042 (Migrant Workers Act), provides that:

Sec. 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor

Arbiters of the National Labor Relations Commission (NLRC) shall have the original and

exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of

the complaint, the claims arising out of an employer-employee relationship or by virtue of

any law or contract involving Filipino workers for overseas deployment including claims for

actual, moral, exemplary and other forms of damages. x x x Since the present petition

involves the employment contract entered into by petitioner for overseas employment, his

claims are cognizable by the labor arbiters of the NLRC.

PHILIPPINE NATIONAL BANK v. FLORENCE O. CABANSAG G.R. No. 157010 June 21,

2005 PANGANIBAN, J.:

DOCTRINE:

Philippine government requires non-Filipinos working in the country to first obtain a local

work permit in order to be legally employed here. That permit, however, does not

automatically mean that the non-citizen is thereby bound by local laws only, as averred by

petitioner. It does not at all imply a waiver of ones national laws on labor. Absent any clear

and convincing evidence to the contrary, such permit simply means that its holder has a

legal status as a worker in the issuing country. All Filipino workers, whether employed

locally or overseas, enjoy the protective mantle of Philippine labor and social legislations.

Our labor statutes may not be rendered ineffective by laws or judgments promulgated, or

stipulations agreed upon, in a foreign country.

FACTS:
 Florence Cabansag] arrived in Singapore as a tourist. She applied for employment,

with the Singapore Branch of the Philippine National Bank. At the time, too, the Branch

Office had two (2) types of employees: (a) expatriates or the regular employees, hired in

Manila and assigned abroad including Singapore, and (b) locally (direct) hired. Tobias,

General Manager found her eminently qualified recommending the appointment of Florence

O. Cabansag, for the position which was approved. She then filed an Application, with the

Ministry of Manpower of the Government of Singapore, for the issuance of an Employment

Pass as an employee of the Singapore PNB Branch. Her application was approved for a

period of two (2) years. Cabansag submitted to Ruben C. Tobias, her initial Performance

Report. Ruben C. Tobias was so impressed with the Report that he made a notation and, on

said Report: GOOD WORK. However, in the evening, she was told by two (2) co-employees

that Ruben C. Tobias has asked them to tell Florence O. Cabansag to resign from her job.

Tobias confirmed the veracity of the information, with the explanation that her resignation

was imperative as a cost-cutting measure of the Bank. She then asked Ruben C. Tobias

that she be furnished with a Formal Advice from the PNB Head Office in Manila. However,

Tobias flatly refused. Florence O. Cabansag did not submit any letter of resignation. Tobias

again summoned Florence O. Cabansag to his office and demanded that she submit her

letter of resignation. For failure thereof, she received a letter from Ruben C. Tobias

terminating her employment with the Bank.

LA RULING:

Rendered finding respondents guilty of Illegal dismissal. NLRC RULING: the NLRC

affirmed that Decision.

CA RULING:

CA noted that petitioner bank had failed to adduce in evidence the Singaporean law

supposedly governing the latters employment Contract with respondent. CA found that the

Contract had actually been processed by the Philippine Embassy in Singapore and

approved by POEA, which then used that Contract as a basis for issuing an Overseas

Employment Certificate in favor of respondent. Even though respondent secured an

employment pass from the Singapore Ministry of Employment, she did not thereby waive

Philippine labor laws, or the jurisdiction of the labor arbiter or the NLRC over her
Complaint for illegal dismissal. Finally, the CA held that PNB had failed to establish a just

cause for the dismissal of respondent.

ISSUE:

Whether or not the arbitration branch of the NLRC in the National Capital Region has

jurisdiction over the instant controversy;

SC RULING:

YES. The jurisdiction of labor arbiters and the NLRC is specified in Article 217

More specifically, Section 10 of RA 8042 reads in part: SECTION 10. Money Claims.

Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National

Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to

hear and decide, within ninety (90) calendar days after the filing of the complaint, the

claims arising out of an employer-employee relationship or by virtue of any law or contract

involving Filipino workers for overseas deployment including claims for actual, moral,

exemplary and other forms of damages. Based on the foregoing provisions, labor arbiters

clearly have original and exclusive jurisdiction over claims arising from employer-employee

relations, including termination disputes involving all workers, among whom are overseas

Filipino workers (OFW). Prior to employing respondent, petitioner had to obtain an

employment pass for her from the Singapore Ministry of Manpower. Similarly, the Philippine

government requires non-Filipinos working in the country to first obtain a local work

permit in order to be legally employed here. That permit, however, does not automatically

mean that the non-citizen is thereby bound by local laws only, as averred by petitioner. It

does not at all imply a waiver of ones national laws on labor. Absent any clear and

convincing evidence to the contrary, such permit simply means that its holder has a legal

status as a worker in the issuing country. Under Philippine law, this document authorized

her working status in a foreign country and entitled her to all benefits and processes under

our statutes. Thus, even assuming arguendo that she was considered at the start of her

employment as a direct hire governed by and subject to the laws, common practices and

customs prevailing in Singapore[17] she subsequently became a contract worker or an OFW

who was covered by Philippine labor laws and policies upon certification by the POEA.

Undeniably, respondent was employed by petitioner in its branch office in Singapore.

Admittedly, she is a Filipino and not a legal resident of that state. She thus falls within the

category of migrant worker or overseas Filipino worker. As such, it is her option to choose

the venue of her Complaint against petitioner for illegal dismissal. The law gives her two

choices: (1) at the Regional Arbitration Branch (RAB) where she resides or (2) at the RAB

where the principal office of her employer is situated. Since her dismissal by petitioner,

respondent has returned to the Philippines -- specifically to her residence at Filinvest II,

Quezon City. Thus, in filing her Complaint before the RAB office in Quezon City, she has

made a valid choice of proper venue.

Notice and Hearing Not Complied With; No Valid Cause for Dismissal. Cabansag was

Illegally Dismissed.

EX-BATAAN VETERANS SECURITY AGENCY, INC., (EBVSAI) v. THE SECRETARY OF

LABOR BIENVENIDO E. LAGUESMA G.R. No. 152396 November 20, 2007 CARPIO, J.:

THE VISITORIAL AND ENFORCEMENT POWERS OF THE DOLE REGIONAL DIRECTOR

CAN BE EXERCISED EVEN WHERE THE INDIVIDUAL CLAIM EXCEEDS P5,000

DOCTRINE: While it is true that under Articles 129 and 217 of the Labor Code, the LA has

jurisdiction to hear and decide cases where the aggregate money claims of each employee

exceeds P5,000.00, said provisions of law do not contemplate nor cover the visitorial and

enforcement powers of the Secretary of Labor or his duly authorized representatives.

Rather, said powers are defined and set forth in Article 128 of the Labor Code.

FACTS:

Private respondents are EBVSAI's employees who instituted a complaint for

underpayment of wages against EBVSAI before the Regional Office (RO) of DOLE.

Consequently, RO conducted a complaint inspection of EBVSAIs Plant where several labor

law violations were noted. On the same day, the RO issued a notice of hearing requiring

EBVSAI and private respondents to attend. After the hearing, the Regional Director (RD)

ordered EBVSAI to pay Php 763,927.85 to the affected employees. EBVSAI filed a motion for

reconsideration and alleged that under Articles 129 and 217(6) of the Labor Code, the

Labor Arbiter, not the Regional Director, has exclusive and original jurisdiction over the
case because the individual monetary claim of private respondents exceeds P5,000. RD

denied the motion stating that, pursuant to RA 7730, the limitations under Articles 129

and 217(6) of the Labor Code no longer apply to the Secretary of Labor's visitorial and

enforcement powers under Article 128(b). The Secretary of Labor or his duly authorized

representatives are now empowered to hear and decide, in a summary proceeding, any

matter involving the recovery of any amount of wages and other monetary claims arising

out of employer-employee relations at the time of the inspection.

DOLE SECRETARY RULING: It affirmed the Directors decision on the ground that

pursuant to RA 7730, the Court's decision in the Servando case is no longer controlling

insofar as the restrictive effect of Article 129 on the visitorial and enforcement power of the

Secretary of Labor is concerned.

CA RULING: affirmed DOLE Secretary ruling

ISSUE: Whether the Secretary of Labor or his duly authorized representatives have

jurisdiction over the money claims of private respondents which exceed P5,000? SC

RULING: YES. In Allied Investigation Bureau, Inc. v. Sec. of Labor, SC ruled that while it is

true that under Articles 129 and 217 of the Labor Code, the LA has jurisdiction to hear and

decide cases where the aggregate money claims of each employee exceeds P5,000.00, said

provisions of law do not contemplate nor cover the visitorial and enforcement powers of the

Secretary of Labor or his duly authorized representatives. Rather, said powers are defined

and set forth in Article 128 of the Labor Code (as amended by R.A. No. 7730) thus: (b)

Notwithstanding the provisions of Article[s] 129 and 217 of this Code to the contrary, and

in cases where the relationship of employer-employee still exists, the Secretary of Labor and

Employment or his duly authorized representatives shall have the power to issue

compliance orders to give effect to [the labor standards provisions of this Code and other]

labor legislation based on the findings of labor employment and enforcement officers or

industrial safety engineers made in the course of inspection. However, if the labor

standards case is covered by the exception clause in Article 128(b) of the Labor Code, then

the RD will have to endorse the case to the appropriate Arbitration Branch of the NLRC. In

order to divest the RD or his representatives of jurisdiction, the following elements must be

present: (a) that the employer contests the findings of the labor regulations officer and
raises issues thereon; (b) that in order to resolve such issues, there is a need to examine

evidentiary matters; and (c) that such matters are not verifiable in the normal course of

inspection. The rules also provide that the employer shall raise such objections during the

hearing of the case or at any time after receipt of the notice of inspection results.

LAPANDAY AGRICULTURAL DEVT. CORP. vs. CA

G.R. No. 112139, January 31, 2000

GONZAGA-REYES, J.

FACTS:

This is a petition for review on Certiorari of the decision of the CA which affirmed the

decision of RTC on the case entitled Commando Security Service Agency vs. Lapanday Dev.

Corp.

On June 1986, plaintiff Commando Security Service Agency, Inc., and defendant

Lapanday Agricultural Development Corporation entered into a Guard Service Contract.

Plaintiff provided security guards in defendant's banana plantation.

On June 16, 1984, Wage Order No. 5 was promulgated directing an increase of P3.00

per day on the minimum wage of workers in the private sector and a P5.00 increase on the

ECOLA. This was followed on November 1, 1984 by Wage Order No. 6 which further

increased said minimum wage by P3.00 on the ECOLA.

Plaintiff demanded that its Guard Service Contract with defendant be upgraded in

compliance with Wage Order Nos. 5 and 6. Defendant refused. Their Contract expired on

June 6, 1986 without the rate adjustment called for Wage Order Nos. 5 and 6 being

implemented. Defendant opposed the Complaint by raising the following defenses: (1) the

rate adjustment is the obligation of the plaintiff as employer of the security guards; (2)

assuming its liability, the sum it should pay is less in amount; and (3) the Wage Orders

violate the impairment clause of the Constitution.

RTC decided in favor of the plaintiff. Petitioner filed a motion for reconsideration which was

denied.

ISSUE:
 1. Whether or not the money claims fall under the jurisdiction of NLRC.

2. Whether or not the petitioner is liable to the for the wage adjustment provided under

Wage Order No. 5 and 6.

HELD:

1. RTC has jurisdiction over the subject matter of the present case. It is well settled in

the law and jurisprudence that where no employer-employee relationship exists

between the parties and no issue involved which may be resolved by reference to the

Labor Code, other labor statutes or any CBA, it is the RTC that has jurisdiction. In

its complaint private respondent is not seeking relief under the Labor Code but seeks

payment of sum of money and damages on account of breach of obligation under

their Guard Service Agreement.

2. No, the petitioner is not liable. It is only when contractor pays the increases

mandated that it can claim an adjustment from the principal to cover the increases

payable to the security guards. The liability of the petitioner to reimburse the

respondent only arises if and when respondent actually pays its employees the

increases granted by wage orders.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated May

24, 1993 is REVERSED and SET ASIDE. The complaint of private respondent COMMANDO

SECURITY SERVICE AGENCY, INC. is hereby DISMISSED.

BEBIANO M. BAEZ v. HON. DOWNEY C. VALDEVILLA and ORO MARKETING, INC.

G.R. No. 128024 May 9, 2000 GONZAGA-REYES, J.:

DOCTRINE: By the designating clause "arising from the employer-employee relations"

Article 217 should apply with equal force to the claim of an employer for actual damages

against its dismissed employee, where the basis for the claim arises from or is necessarily

connected with the fact of termination, and should be entered as a counterclaim in the

illegal dismissal case. This is, of course, to distinguish from cases of actions for damages

where the employer-employee relationship is merely incidental and the cause of action

proceeds from a different source of obligation. Thus, the jurisdiction of regular courts was

upheld where the damages, claimed for were based on tort, malicious prosecution, or
breach of contract, as when the claimant seeks to recover a debt from a former employee or

seeks liquidated damages in enforcement of a prior employment contract.

FACTS:

Bebiano Baez was the sales operations manager of Oro Marketing in its branch in

Iligan City Oro "indefinitely suspended" petitioner and the latter filed a complaint for illegal

dismissal with NLRC. Baez alleged a modus operandi used by Oro Marketing. herein:

Defendant canvassed customers personally or through salesmen of plaintiff which were

hired or recruited by him. If said customer decided to buy items from plaintiff on

installment basis, defendant, without the knowledge of said customer and plaintiff, would

buy the items on cash basis at ex-factory price, a privilege not given to customers, and

thereafter required the customer to sign promissory notes and other documents using the

name and property of plaintiff, purporting that said customer purchased the items from

plaintiff on installment basis. Thereafter, defendant collected the installment payments

either personally or through Venus Lozano, a Group Sales Manager of plaintiff but also

utilized by him as secretary in his own business for collecting and receiving of installments,

purportedly for the plaintiff but in reality on his own account or business. The collection

and receipt of payments were made inside the Iligan City branch using plaintiffs facilities,

property and manpower. That accordingly plaintiffs sales decreased and reduced to a

considerable extent the profits which it would have earned. LA RULING: Labor Arbiter

found petitioner to have been illegally dismissed.

NLRC RULING: dismissed the same for having been filed out of time. Elevated by

petition for certiorari before the Supreme Court, the case was dismissed on technical

grounds[3]; and that even if all the procedural requirements for the filing of the petition

were met, it would still be dismissed for failure to show grave abuse of discretion on the

part of the NLRC. Oro filed a complaint for damages before RTC Misamis Oriental which

prayed for the payment of loss of profit and/or unearned income and expenses of litigation.

Baez filed a motion to dismiss the above complaint. He interposed in the court below that

the action for damages, having arisen from an employer-employee relationship, was

squarely under the exclusive original jurisdiction of the NLRC. He accused Oro Marketing of

splitting causes of action, stating that the latter could very well have included the instant
claim for damages in its counterclaim before the Labor Arbiter. He also pointed out that the

civil action of private respondent is an act of forum-shopping.

RTC RULING: A perusal of the complaint which is for damages does not ask for any

relief under the Labor Code. The Court believes such cause of action is within the realm of

civil law, and jurisdiction over the controversy belongs to the regular courts.

ISSUE:

Whether RTC has jurisdiction over the case.

SC RULING:

NO. Article 217(a), paragraph 4 of the Labor Code, ART. 217. Jurisdiction of Labor

Arbiters and the Commission. 4. Claims for actual, moral, exemplary and other forms of

damages arising from the employer-employee relations; The above provisions are a result of

the amendment by Section 9 of R.A. No. 6715, which put to rest the earlier confusion as to

who between Labor Arbiters and regular courts had jurisdiction over claims for damages as

between employers and employees. By the designating clause "arising from the employer-

employee relations" Article 217 should apply with equal force to the claim of an employer for

actual damages against its dismissed employee, where the basis for the claim arises from or

is necessarily connected with the fact of termination, and should be entered as a

counterclaim in the illegal dismissal case. In the case before us, private respondent's claim

against petitioner for actual damages arose from a prior employer-employee relationship. In

the first place, private respondent would not have taken issue with petitioner's "doing

business of his own" had the latter not been concurrently its employee. Second, and more

importantly, to allow respondent court to proceed with the instant action for damages

would be to open anew the factual issue of whether petitioner's installment sale scheme

resulted in business losses and the dissipation of private respondent's property. This issue

has been duly raised and ruled upon in the illegal dismissal case. The Labor Arbiter,

however, found to the contrary ---that no business losses may be attributed to petitioner as

in fact, it was by reason of petitioner's installment plan that the sales of the Iligan branch

reached its highest record level. Evidently, the lawmaking authority had second thoughts

about depriving the Labor Arbiters and the NLRC of the jurisdiction to award damages in

labor cases because that setup would mean duplicity of suits, splitting the cause of action
and possible conflicting findings and conclusions by two tribunals on one and the same

claim. This is, of course, to distinguish from cases of actions for damages where the

employer-employee relationship is merely incidental and the cause of action proceeds from

a different source of obligation. Thus, the jurisdiction of regular courts was upheld where

the damages, claimed for were based on tort, malicious prosecution, or breach of contract,

as when the claimant seeks to recover a debt from a former employee or seeks liquidated

damages in enforcement of a prior employment contract. Furthermore, the Labor Arbiter

has jurisdiction to award not only the reliefs provided by labor laws, but also damages

governed by the Civil Code.

Del Monte v. Zaldivar

GR 158620

October 11, 2006

FACTS:

1. Associated Labor Union (ALU) is the EBA of plantation workers of petitioner Del

Monte Philippines, Inc. (Del Monte) in Bukidnon.

2. Respondent Nena Timbal (Timbal), is a rank-and-file employee of Del Monte

plantation in Bukidnon, is also a member of ALU.

3. Del Monte and ALU entered into a CBA - term of five (5) years (1 September

1988 to 31 August 1993).

4. Timbal, along with four other employees (collectively, co-employees), were charged by

ALU for disloyalty to the union, particularly for encouraging defections to a rival

union, National Federation of Labor (NFL).

5. The charge was contained in a Complaint (25 March 1993), which specifically alleged:

That on July 13, 1991 Nena Timbal personally recruited other bonafide members of

the ALU to attend NFL seminars and has actually attended these seminars together

with the other ALU members - matter was referred to a body within the ALU

organization named Disloyalty Board.

6. The charge against Timbal was supported by an affidavit (23 March 1993) by Gemma

Artajo (Artajo) also a Del Monte employee (alleged that she was personally informed

by Timbal on 13 July 1991 that a seminar was to be conducted by the NFL on the

following day, that when Artajo demurred from attending, Timbal assured her that

she would be given honorarium for P500.00 if she were to attend the NFL meeting

and bring new recruits).

7. Artajo admitted having attended the NFL meeting together with her own recruits,

including Paz Piquero (Piquero), and alleged that she was given P500.00 by Timbal.

8. Timbals answer: denying the allegations in the complaint and the averments in

Artajos Affidavit, further alleges that her husband, Modesto Timbal, had filed a

complaint against Artajo for collection of a sum of money six (6) days before Artajo

executed her affidavit, that the allegations against her were purportedly committed

nearly two (2) years earlier, and that Artajos act was motivated by hate and revenge.

9. ALU Disloyalty Board Timbal and co-employees were guilty of acts or conduct

inimical to the interests of ALU, recommended the expulsion of Timbal and co-

employees from membership in ALU, and their dismissal from Del Monte in

accordance with the Union Security Clause in the existing CBA between ALU and Del

Monte.

10. 17 June 1993, Del Monte terminated Timbal and her co-employees effective 19

June 1993, noting that the termination was upon demand of [ALU] pursuant to

Sections 4 and 5 of Article III of the current Collective Bargaining Agreement.

11. Timbal and her co-employees filed separate complaints against Del Monte

and/or its Personnel Manager Warfredo C. Balandra and ALU with the Regional

Arbitration Branch (RAB) of the National Labor Relations Commission (NLRC) for

illegal dismissal, unfair labor practice and damages.

12. Labor Arbiter 5 of them were illegally dismissed, ordered reinstatement,

payment of backwages, etc. ----- DEL MONTE appealed in the NLRC.

13. NLRC reversed LA, 5 of them were validly dismissed.

 14. CA ONLY Timbal was illegally dismissed (from LA: statements of Gemma

Artajo, ALUs sole witness against her, should not be given weight because Artajo had

an ax[e] to grind at the time when she made the adverse statements against her).

15. DEL MONTE IN ITS APPEAL: new witness, Piquero who is a disinterested

witness against Timbal, asserts that it had, from the incipience of these proceedings

consistently prayed that in the event that it were found with finality that the

dismissal of Timbal and the others is illegal, ALU should be made liable to Del Monte

pursuant to the CBA. The Court of Appeals is faulted for failing to rule upon such

claim.

ISSUES: WON Timbals dismissal, which is based on the CBA provision (disloyalty to ALU),

is legal, when theres a closed shop policy. no! still illegally dismissed.

HELD/RATIO:

In order for the Court to be able to appreciate Piqueros testimony as basis for finding

Timbal guilty of disloyalty, it is necessary that the fact of such testimony must have been

duly established before the NLRC-RAB, the NLRC, or at the very least, even before the

Court of Appeals.

Moreover, despite the fact that the apparent record of Piqueros testimony was appended to

ALUs position paper, the position paper itself does not make any reference to such

testimony, or even to Piqueros name for that matter. The position paper observes that [t]his

testimony of [Artajo] was directly corroborated by her actual attendance on July 14, 1992 at

the agreed [venue], but no mention is made that such testimony was also directly

corroborated by Piquero. Then again, it was only Artajo, and not Piquero, who executed an

affidavit recounting the allegations against Timbal.

Indeed, we are inclined to agree with Timbals observation in her Comment on the present

petition that from the time the complaint was filed with the NLRC-RAB, Piqueros name and

testimony were invoked for the first time only in Del Montes motion for reconsideration

before the Court of Appeals. Other than the handwritten reference made in the raw

stenographic notes attached to ALUs position paper before the NLRC-RAB, Piqueros name
or testimony was not mentioned either by ALU or Del Monte before any of the pleadings

filed before the NLRC-RAB, the NLRC, and even with those submitted to the Court of

Appeals prior to that courts decision.

In order for the Court to be able to appreciate Piqueros testimony as basis for finding

Timbal guilty of disloyalty, it is necessary that the fact of such testimony must have been

duly established before the NLRC-RAB, the NLRC, or at the very least, even before the

Court of Appeals. It is only after the fact of such testimony has been established that the

triers of fact can come to any conclusion as to the veracity of the allegations in the

testimony.

It should be mentioned that the Disloyalty Board, in its Resolution finding Timbal guilty of

disloyalty, did mention that Artajos testimony was corroborated by Paz Piquero who

positively identified and testified that Nena Timbal was engaged in recruitment of ALU

members at [Del Monte] to attend NFL seminars.

The Disloyalty Board may have appreciated Piqueros testimony in its own finding that

Timbal was guilty, yet the said board cannot be considered as a wholly neutral or

dispassionate tribunal since it was constituted by the very organization that stood as the

offended party in the disloyalty charge. Without impugning the integrity of ALU and the

mechanisms it has employed for the internal discipline of its members, we nonetheless hold

that in order that the dismissal of an employee may be validated by this Court, it is

necessary that the grounds for dismissal are justified by substantial evidence as duly

appreciated by an impartial trier of facts.The existence of Piqueros testimony was

appreciated only by the Disloyalty Board, but not by any of the impartial tribunals which

heard Timbals case. The appreciation of such testimony by the Disloyalty Board without

any similar affirmation or concurrence by the NLRC-RAB, the NLRC, or the Court of

Appeals, cannot satisfy the substantive due process requirement as a means of upholding

Timbals dismissal.

SAN MIGUEL CORPORATION vs NATIONAL LABOR RELATIONS COMMISSION and

RUSTICO VEGA G.R. No. 80774, May 31, 1988

FACTS:
San Miguel Corporation sponsored an Innovation Program and under which, the

management undertook to grant cash awards to all SMC employees except higher-ranked

personnel who submit to the Corporation ideas and suggestions found to be beneficial to

the Corporation. Rustico Vega then submitted a proposal but was not accepted. Vega filed a

complaint against the company with the Regional Arbitration Branch No. VII, contending

that he should be paid 60,000 since his idea was implemented. The petitioner in his

answer stated that they turned down the proposal for lack of originality. The labor Arbiter

dismissed the complaint on the ground that the money claim is not a necessary incident of

his employment. Upon appeal of Vega to the NLRC, it ordered the petitioner to pay the

60,0000. Petitioner then seek to annul the judgment on the ground that the Labor Arbiter

and NLRC have no jurisdiction over the case.

ISSUE:

Whether or not the fact that the money claim of an employee arose out of or in connection

with employment relation with his company, is enough to bring such money claim within

the original and exclusive jurisdiction of Labor Arbiter.

HELD:

No, just because the claim arises from employer-employee relationship, it does not follow

that it is automatically within the jurisdiction of the Labor Arbiter.

The companys undertaking, though unilateral in origin, could nonetheless ripen into an

enforceable contractual (facio ut des) obligation on the part of petitioner Corporation under

certain circumstances. Thus, whether or not an enforceable contract, albeit implied arid

innominate, had arisen between petitioner Corporation and private respondent Vega in the

circumstances of this case, and if so, whether or not it had been breached, are

preeminently legal questions, questions not to be resolved by referring to labor legislation

and having nothing to do with wages or other terms and conditions of employment, but

rather having recourse to our law on contracts.

If the relief sought is to be resolved not by reference to the Labor Code or other labor

relations statute or a collective bargaining agreement but by the general civil law, the

jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor

Arbiter and the NLRC. In such situations, resolution of the dispute requires expertise, not
in labor management relations nor in wage structures and other terms and conditions of

employment, but rather in the application of the general civil law.

PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented by its Plant

General Manager ANTHONY B. SIAN, ELEAZAR LIMBAB, IRENEO BALTAZAR & JORGE

HERAYA v. HON. LOLITA O. GAL-LANG, SALVADOR NOVILLA, ALEJANDRO OLIVA,

WILFREDO CABAAS & FULGENCIO LEGO G.R. No. 89621 September 24, 1991 CRUZ,

J.:

DOCTRINE: Not every controversy involving workers and their employers can be resolved

only by the labor arbiters. This will be so only if there is a "reasonable causal connection"

between the claim asserted and employee-employer relations to put the case under the

provisions of Article 217. Absent such a link, the complaint will be cognizable by the

regular courts of justice in the exercise of their civil and criminal jurisdiction.

FACTS:

The private respondents were employees of the Pepsi who were suspected of

complicity in the irregular disposition of empty Pepsi Cola bottles. Pepsi filed a criminal

complaint for theft against them but this was later withdrawn and substituted with a

criminal complaint for falsification of private documents. After a preliminary investigation,

the complaint was dismissed. The dismissal was affirmed by the Office of the Provincial

Prosecutor. Meantime, allegedly after an administrative investigation, the private

respondents were dismissed by the petitioner company As a result, they lodged a complaint

for illegal dismissal with NLRC in Tacloban City.

NLRC RULING:

Mandated reinstatement with damages. In addition, they instituted in the Regional

Trial Court of Leyte, a separate civil complaint against the petitioners for damages arising

from what they claimed to be their malicious prosecution. Pepsi moved to dismiss the civil

complaint on the ground that the trial court had no jurisdiction over the case because it

involved employee-employer relations.

RTC RULING:
 the respondent judge, acting on the motion for reconsideration, reinstated the

complaint, saying it was "distinct from the labor case for damages now pending before the

labor courts. Pepsi invoke Article 217 of the Labor Code and a number of decisions of this

Court to support their position that the private respondents civil complaint for damages

falls under the jurisdiction of the labor arbiter.

ISSUE:

Whether the RTC has jurisdiction over the case?

SC RULING:

YES. Not every controversy involving workers and their employers can be resolved

only by the labor arbiters. This will be so only if there is a "reasonable causal connection"

between the claim asserted and employee-employer relations to put the case under the

provisions of Article 217. Absent such a link, the complaint will be cognizable by the

regular courts of justice in the exercise of their civil and criminal jurisdiction. EXAMPLES

OF CASES: 1.) In Medina v. Castro-Bartolome, 3 two employees filed in the Court of First

Instance of Rizal a civil complaint for damages against their employer for slanderous

remarks made against them by the company president. Theirs is a simple action for

damages for tortious acts allegedly committed by the defendants. Such being the case, the

governing statute is the Civil Code and not the Labor Code. It results that the orders under

review are based on a wrong premise. 2.) In Singapore Airlines Ltd. v. Pao, 4 where the

plaintiff was suing for damages for alleged violation by the defendant of an "Agreement for a

Course of Conversion Training at the Expense of Singapore Airlines Limited. Petitioner

seeks protection under the civil laws and claims no benefits under the Labor Code. The

primary relief sought is for liquidated damages for breach of a contractual obligation. 3.) In

Molave Sales, Inc. v. Laron, 6 the same Justice held for the Court that the claim of the

plaintiff against its sales manager for payment of certain accounts pertaining to his

purchase of vehicles and automotive parts, repairs of such vehicles, and cash advances

from the corporation was properly cognizable by the Regional Trial Court because "although

a controversy is between an employer and an employee, the Labor Arbiters have no

jurisdiction if the Labor Code is not involved."

Singapore Airlines vs. Hon.Ernani Cruz-Pano G.R. No. L-47739 June 22, 1983

Facts:

Private Respondent Carlos Cruz was offered employment by petitioner as Engineer

Officer with the opportunity to undergo a training course. Cruz signed the Agreement with

his co-respondent Villanueva, as surety. Claiming that Cruz had applied for "leave without

pay" and had gone on leave without approval of the application during the second year of

the Period of five years, petitioner filed suit for damages against Cruz and his surety,

Villanueva, for violation of the terms and conditions of the aforesaid Agreement. Petitioner

sought the payment of the following sums. Cruz denied any breach of contract contending

that at no time had he been required by petitioner to agree to a straight service of five years

under Clause 4 of the Agreement and that he left the service on "valid compassionate

grounds stated to and accepted by the company so that no damages may be awarded

against him. Respondent Judge issued the assailed Order dismissing the complaint,

counterclaim and crossclaim for lack of jurisdiction because the present case involved a

money claim arising from an employer-employee relation or at the very least a case arising

from employer-employee relations, which under Art. 216 of the Labor Code is vested

exclusively with the Labor Arbiters of the National Labor Relations Commission.

Issue:

Whether or not the case is properly cognizable by Courts of justice.

Ruling:

Yes. While seemingly petitioner's claim for damages arises from employer-employee

relations, and the latest amendment to Article 217 of the Labor Code under PD No. 1691

and BP Blg. 130 provides that all other claims arising from employer-employee relationship

are cognizable by Labor Arbiters, in essence, petitioner's claim for damages is grounded on

the "wanton failure and refusal" without just cause of private respondent Cruz to report for

duty despite repeated notices served upon him of the disapproval of his application for leave

of absence without pay. This, coupled with the further averment that Cruz "maliciously and

with bad faith" violated the terms and conditions of the conversion training course
agreement to the damage of petitioner removes the present controversy from the coverage of

the Labor Code and brings it within the purview of Civil Law. The complaint was anchored

not on the abandonment per se by private respondent Cruz of his job as the latter was not

required in the Complaint to report back to work but on the manner and consequent effects

of such abandonment of work translated in terms of the damages which petitioner had to

suffer.

MONTAO v. VERCELES G.R. No.168583 July 26, 2010 DEL CASTILLO, J.

DOCTRINE: Section 226 of the Labor Code clearly provides that the BLR and the Regional

Directors of DOLE have concurrent jurisdiction over inter-union and intra-union disputes.

Such disputes include the conduct or nullification of election of union and workers

association officers. It is true that under the Implementing Rules, redress must first be

sought within the organization itself in accordance with its constitution and by-laws.

However, this requirement is not absolute but yields to exception under varying

circumstances.

FACTS:

Atty. Montao worked as legal assistant of FFW Legal Center. Subsequently, he joined

the union of rank-and-file employees, the FFW Staff Association, and eventually became the

employees union president in July 1997. In November 1998, he was likewise designated

officer-in-charge of FFW Legal Center. During the 21st National Convention and Election of

National Officers of FFW, Atty. Montao was nominated for the position of National Vice-

President. In a letter dated May 25, 2001, however, the Commission on Election (FFW

COMELEC), informed him that he is not qualified for the position as his candidacy violates

the 1998 FFW Constitution and By-Laws. Atty. Montao thus filed an Urgent Motion for

Reconsideration praying that his name be included in the official list of candidates. Election

ensued on May 26-27, 2001 in the National Convention held at Subic International Hotel,

Olongapo City. Despite the pending motion for reconsideration with the FFW COMELEC,

and strong opposition and protest of respondent Atty. Ernesto C. Verceles (Atty. Verceles), a

delegate to the convention and president of University of the East Employees Association
(UEEA-FFW) which is an affiliate union of FFW, the convention delegates allowed Atty.

Montaos candidacy. He emerged victorious and was proclaimed as the National Vice-

President. Atty. Verceles, as President of UEEA-FFW and officer of the Governing Board of

FFW, filed before the BLR a petition for the nullification of the election of Atty. Montao as

FFW National Vice-President. He alleged that, as already ruled by the FFW COMELEC, Atty.

Montao is not qualified to run for the position the FFW Constitution and By-Laws prohibits

federation employees from sitting in its Governing Board. Claiming that Atty. Montaos

premature assumption of duties and formal induction as vice-president will cause serious

damage, Atty. Verceles likewise prayed for injunctive relief. Atty. Montao filed his Comment

with Motion to Dismiss on the grounds that the Regional Director of the Department of

Labor and Employment (DOLE) and not the BLR has jurisdiction over the case; that the

filing of the petition was premature due to the pending and unresolved protest before the

FFW COMELEC; and that, Atty. Verceles has no legal standing to initiate the petition not

being the real party in interest. BLR RULING:

The BLR, in its Order dated August 20, 2001, did not give due course to Atty.

Montaos Motion to Dismiss but ordered the latter to submit his answer to the petition

pursuant to the rules. The parties thereafter submitted their respective pleadings and

position papers. On May 8, 2002, the BLR rendered a Decision dismissing the petition for

lack of merit. While it upheld its jurisdiction over the intra-union dispute case and

affirmed, as well, Atty. Verceles legal personality to institute the action as president of an
affiliate union of FFW, the BLR ruled that there were no grounds to hold Atty. Montao

unqualified to run for National Vice-President of FFW. It held that the applicable provision

in the FFW Constitution and By-Laws to determine whether one is qualified to run for office

is not Section 76 of Article XIX but Section 26 of Article VIII thereof. The BLR opined that

there was sufficient compliance with the requirements laid down by this applicable

provision and, besides, the convention delegates unanimously decided that Atty. Montao

was qualified to run for the position of National Vice-President. Atty. Verceles filed a Motion

for Reconsideration but it was denied by the BLR.

CA RULING:
 CA set aside the BLRs Decision. While it agreed that jurisdiction was properly lodged

with the BLR, that Atty. Verceles has legal standing to institute the petition, and that the

applicable provision of FFW Constitution and By-Laws is Section 26 of Article VIII and not

Section 76 of Article XIX, the CA however ruled that Atty. Montao did not possess the

qualification requirement under paragraph (d) of Section 26 that candidates must be an

officer or member of a legitimate labor organization. According to the CA, since Atty.

Montao, as legal assistant employed by FFW, is considered as confidential employee,

consequently, he is ineligible to join FFW Staff Association, the rank-and-file union of FFW.

The CA, thus, granted the petition and nullified the election of Atty. Montao as FFW

National Vice-President. Montao raised before the SC the claim that the BLR has no

jurisdiction over cases involving protests and petitions for annulment of results of elections

as such jurisdiction is expressly conferred by law to the Regional Directors of the DOLE. He

also reiterated that the petition was prematurely filed and thus must be dismissed for

failure to exhaust all remedies as mandated by the implementing rules of the Labor Code.

ISSUES:

(1) Does the BLR have jurisdiction to decide election contests despite express

provision of law granting said jurisdiction?

(2) Was the petition by respondent prematurely filed?

RULING:

(1) Yes. We find no merit in petitioners claim that under Section 6 of Rule XV in

relation to Section 1 of Rule XIV of Book V of the Omnibus Rules Implementing the Labor

Code, it is the Regional Director of the DOLE and not the BLR who has jurisdiction over

election protests. Section 226 of the Labor Code clearly provides that the BLR and the

Regional Directors of DOLE have concurrent jurisdiction over inter-union and intra-union

disputes. Such disputes include the conduct or nullification of election of union and

workers association officers. There is, thus, no doubt as to the BLRs jurisdiction over the

instant dispute involving member-unions of a federation arising from disagreement over the

provisions of the federations constitution and by-laws. We agree with BLRs observation

that: Rule XVI lays down the decentralized intra-union dispute settlement mechanism.

Section 1 states that any complaint in this regard shall be filed in the Regional Office where
the union is domiciled. The concept of domicile in labor relations regulation is equivalent to

the place where the union seeks to operate or has established a geographical presence for

purposes of collective bargaining or for dealing with employers concerning terms and

conditions of employment. The matter of venue becomes problematic when the intra-union

dispute involves a federation, because the geographical presence of a federation may

encompass more than one administrative region. Pursuant to its authority under Article

226, this Bureau exercises original jurisdiction over intra-union disputes involving

federations. It is well-settled that FFW, having local unions all over the country, operates in

more than one administrative region. Therefore, this Bureau maintains original and

exclusive jurisdiction over disputes arising from any violation of or disagreement over any

provision of its constitution and by-laws.

(2) No. There is likewise no merit to petitioners argument that the petition should

have been immediately dismissed due to a pending and unresolved protest before the FFW

COMELEC pursuant to Section 6, Rule XV, Book V of the Omnibus Rules Implementing the

Labor Code. It is true that under the Implementing Rules, redress must first be sought

within the organization itself in accordance with its constitution and by-laws. However, this

requirement is not absolute but yields to exception under varying circumstances. In the

case at bench, Atty. Verceles made his protest over Atty. Montaos candidacy during the

plenary session before the holding of the election proceedings. The FFW COMELEC,

notwithstanding its reservation and despite objections from certain convention delegates,

allowed Atty. Montaos candidacy and proclaimed him winner for the position. Under the

rules, the committee on election shall endeavour to settle or resolve all protests during or

immediately after the close of election proceedings and any protest left unresolved shall be

resolved by the committee within five days after the close of the election proceedings. A day

or two after the election, Atty. Verceles made his written/formal protest over Atty. Montaos

candidacy/proclamation with the FFW COMELEC. He exhausted the remedies under the

constitution and by-laws to have his protest acted upon by the proper forum and even

asked for a formal hearing on the matter. Still, the FFW COMELEC failed to timely act

thereon. Thus, Atty. Verceles had no other recourse but to take the next available remedy to

protect the interest of the union he represents as well as the whole federation, especially so
that Atty. Montao, immediately after being proclaimed, already assumed and started to

perform the duties of the position. Consequently, Atty. Verceles properly sought redress

from the BLR so that the right to due process will not be violated. To insist on the contrary

is to render the exhaustion of remedies within the union as illusory and vain. As regards

the issue of whether Atty. Montao is qualified to run as FFW National President in view of

the prohibition established in Section 76, Article XIX of the 1998 FFW Constitution and By-

Laws, the SC concurred with the CA that Atty. Montao is not qualified to run for the

position but not for failure to meet the requirement specified under Section 26 (d) of Article

VIII of FFW Constitution and By-Laws. We note that the CAs declaration of the illegitimate

status of FFW Staff Association is proscribed by law, owing to the preclusion of collateral

attack. We nonetheless resolve to affirm the CAs finding that Atty. Montao is disqualified to

run for the position of National Vice-President in view of the proscription in the FFW

Constitution and By-Laws on federation employees from sitting in its Governing Board.

Accordingly, the election of Atty. Montao as FFW Vice-President is null and void.

G.R. No. 87297 August 5, 1991

ALFREDO VELOSO and EDITO LIGUATON petitioners,

vs.

DEPARTMENT OF LABOR AND EMPLOYMENT, NOAHS ARK SUGAR CARRIERS AND

WILSON T. GO, respondents.

DOCTRINE: The law looks with disfavor upon quitclaims and releases by employees who are

inveigled or pressured into signing them by unscrupulous employers seeking to evade their

legal responsibilities. On the other hand, there are legitimate waivers that represent a

voluntary settlement of laborers claims that should be respected by the courts as the law

between the parties.

FACTS:

the petitioners, along with several co-employees, filed a complaint against the private

respondent for unfair labor practices, underpayment, and non-payment of overtime,

holiday, and other benefits. This was decided in favor of the complainants on October

6,1987. The motion for reconsideration, which was treated as an appeal, was dismissed in a

resolution dated February 17, 1988.

the private respondent filed a motion for reconsideration and recomputation of the

amount awarded to the petitioners. On April 15, 1988, while the motion was pending,

petitioner Alfredo Veloso, through his wife Connie, signed a Quitclaim and Release for and

in consideration of P25,000.00, 1 and on the same day his counsel, Atty. Gaga Mauna,

manifested Satisfaction of Judgment by receipt of the said sum by Veloso. 2 For his part,

petitioner Liguaton filed a motion to dismiss dated July 16, 1988, based on a Release and

Quitclaim dated July 19,1988 , 3 for and in consideration of the sum of P20,000.00 he

acknowledged to have received from the private respondent.

the petitioners claim that they were forced to sign their respective releases in favor of

their employer, the herein private respondent, by reason of their dire necessity. The latter,

for its part, insists that the petitioner entered into the compromise agreement freely and

with open eyes and should not now be permitted to reject their solemn commitments.

These releases were later impugned by the petitioners on September 20, 1988, on the

ground that they were constrained to sign the documents because of their extreme

necessity. In an Order dated December 16, 1988, the Undersecretary of Labor rejected

their contention and ruled:

IN VIEW THEREOF, complainants Motion to Declare Quitclaim Null and Void is hereby

denied for lack of merit and the compromise agreements/settlements dated April 15, 1988

and July 19, 1988 are hereby approved. Respondents motion for reconsideration is hereby

denied for being moot and academic.

Reconsideration of the order having been denied on March 7, 1989, the petitioners have

come to this Court on certiorari.

RULING: The Court had deliberated on the issues and the arguments of the parties and

finds that the petition must fail. The exception and not the rule shall be applied in this

case.

The case cited is not apropos because the quitclaims therein invoked were secured by

the employer after it had already lost in the lower court and were subsequently rejected by
this Court when the employer invoked it in a petition for certiorari. By contrast, the

quitclaims in the case before us were signed by the petitioners while the motion for

reconsideration was still pending in the DOLE, which finally deemed it on March 7, 1989.

Furthermore, the quitclaims in the cited case were entered into without leave of the lower

court whereas in the case at bar the quitclaims were made with the knowledge and

approval of the DOLE, which declared in its order of December 16, 1988, that the

compromise agreement/settlements dated April 15, 1988 and July 19, 1988 are hereby

approved.

It is also noteworthy that the quitclaims were voluntarily and knowingly made by

both petitioners even if they may now deny this. In the case of Veloso, the quitclaim he had

signed carried the notation that the sum stated therein had been paid to him in the

presence of Atty. Gaga Mauna, his counsel, and the document was attested by Atty.

Ferdinand Magabilin, Chief of the Industrial Relations Division of the National Capitol

Region of the DOLE. In the case of Liguaton, his quitclaim was made with the assistance of

his counsel, Atty. Leopoldo Balguma, who also notarized it and later confirmed it with the

filing of the motion to dismiss Liguatons complaint.

The same Atty. Balguma is the petitioners counsel in this proceeding. Curiously, he is now

challenging the very same quitclaim of Liguaton that he himself notarized and invoked as

the basis of Liguatons motion to dismiss, but this time for a different reason. whereas he

had earlier argued for Liguaton that the latters signature was a forgery, he has abandoned

that contention and now claims that the quitclaim had been executed because of the

petitioners dire necessity.

Dire necessity is not an acceptable ground for annulling the releases, especially

since it has not been shown that the employees had been forced to execute them. It has not

even been proven that the considerations for the quitclaims were unconscionably low and

that the petitioners had been tricked into accepting them. While it is true that the writ of

execution dated November 24, 1987, called for the collection of the amount of P46,267.92

each for the petitioners, that amount was still subject to recomputation and modification as

the private respondents motion for reconsideration was still pending before the DOLE. The

fact that the petitioners accepted the lower amounts would suggest that the original award
was exorbitant and they were apprehensive that it would be adjusted and reduced. In any

event, no deception has been established on the part of the Private respondent that would

justify the annulment of the Petitioners quitclaims.

Liberty Flour Mills Employees vs Liberty Flour

G.RN - 58768 December 29, 1989

Cruz, J:

Facts:

On February 6, 1974, respondent Philippine Labor Alliance Council (PLAC) and Liberty

Flour entered into a 3-year CBA effective January 1, 1974 providing for a daily wage

increase of PhP2.00 for 1974, PhP1.00 for 1975 and PhP1.00 for 1976. The parties also

agreed to establish a union shop by imposing membership in good standing for the

duration of CBA as a condition for continued employment of workers. PLAC complained

against the company for non-payment of E-COLA under P.D. 525. A similar complaint was

filed on March 4, 1975, this time by petitioners who apparently were veering away from

PLAC. Evaristo and Biascan, after organizing a union, filed for a certification election

among rank-and-file employees. PLAC then expelled the two for disloyalty and demanded

their dismissal by the respondent company, who complied on May 20, 1975. The claims for

E-COLA was dismissed as it was already absorbed by the wage increase. The termination

case in relation to back wages was also dismissed.

Issue:

Whether or not E_COLA was also absorbed in the wage increases and won dismissal of

Evaristo and Biascan was illegal.

Ruling:

The company agreed to grant the emergency allowance even before the obligation was

imposed by government (P.D. 525). What the petitioners claim they are being made to waive

is the additional allowance but the truth is they are not entitled to because they are already

enjoying the stipulated increases.

As with the case of illegal dismissal, the CBA concluded in 1974 was certifiable and in fact

certified in April 11, 1975 while the two were dismissed on may 20, 1975. Evidence show

that after the cancellation of the registration certificate of the Federation of Democratic

Labor Unions, no other union contested the exclusive representation of the PLAC,

consequently there was no more legal impediment that stood on the way of its validity and

enforceability of the provisions of the collective bargaining agreement entered into by and

between respondent corporation and respondent union. Once it was duly entered into and

signed by the parties, a collective bargaining agreement becomes effective as between the

parties regardless of won the same has been certified by the BLR.

SAN MIGUEL CORP EMPLOYEES UNION VS SAN MIGUEL PACKING EMPLOYEES

UNION . G.R. No. 171153

Topic: Union Registration Requirements

QUICKIE SUMMARY: SM Packing Employees Union is a LOCAL or CHAPTER of PDMP

which seeks to be an INDEPENDENT LABOR ORGANIZATION. For its registration AS A

CHAPTER, the applicable law to them is the D.O. No. 9 which no longer requires the

submission of the names of at least 20% of all its employees in the bargaining unit. San Mig

Corp Union claims that SM Packing failed to meet the requirements set forth by Art 234 of

the Labor Code which mandates the submission of the 20% names and that the

Implementing Rules of D.O. No. 9 is violative of Art 234 of the Labor Code because it

provides a less stringent rule (which does not require the submission of the 20% names).

SC ruled that the requirements for the registration of an INDEPENDENT LABOR UNION

and the requirements for the creation of a LOCAL or CHAPTER are different. Since SM

Packing seeks to be a legitimate labor organization, D.O No. 9 is not the one applicable, but

Art 234 of the Labor Code.

FACTS:

Petitioner is the incumbent bargaining agent for the bargaining unit comprised of the

regular monthly-paid rank and file employees of the three divisions of San Miguel
Corporation namely San Miguel Corporate Staff Unit (SMCSU), San Miguel Brewing

Philippines (SMBP), and the San Miguel Packaging Products (SMPP)

Respondent is registered as a chapter of Pambansang Diwa ng Manggagawang

Pilipino.Thereafter, respondent filed three separate petitions for certification election to

represent SMPP, SMCSU, and SMBP. All three petitions were dismissed, on the ground that

the separate petitions fragmented a single bargaining unit.

Petitioner filed with the DOLE-NCR a petition seeking the cancellation of respondents

registration and its dropping from the rolls of legitimate labor organizations. Petitioner

accused respondent of committing fraud and falsification, and non-compliance with

registration requirements in obtaining its certificate of registration. It raised allegations that

respondent violated Articles 239(a), (b) and (c) and 234(c) of the Labor Code.

DOLE-NCR Regional Director Maximo B. Lim found that respondent did not comply with

the 20% membership requirement and, thus, ordered the cancellation of its certificate of

registration and removal from the rolls of legitimate labor organizations

Bureau of Labor Relations: Reversed DOLE NCR and declared that SM Packing Employees

shall hereby remain in the roster of legitimate labor organizations

CA affirmed BLR

Petitioners contention: Petitioner posits that respondent is required to submit a list of

members comprising at least 20% of the employees in the bargaining unit before it may

acquire legitimacy, citing Article 234(c) of the Labor Code. Petitioner also insists that the

20% requirement for registration of respondent must be based not on the number of

employees of a single division, but in all three divisions of the company in all the offices and

plants of SMC since they are all part of one bargaining unit. Petitioner thus maintains that

respondent, in any case, failed to meet this 20% membership requirement since it based its

membership on the number of employees of a single division only, namely, the SMPP.

ISSUE:

W/N SM Packing Employees met the requirements and thus, must remain a

legitimate labor organization

RULING:
 NO, SM Packing Employees failed to meet the requirement. Hence, they cannot be

declared as a legitimate labor organization

RATIO: A perusal of the records reveals that respondent is registered with the BLR

as a local or chapter of PDMP. The applicable Implementing Rules (Department Order

No. 9) enunciates a two-fold procedure for the creation of a chapter or a local. The first

involves the affiliation of an independent union with a federation or national union or

industry union. The second, finding application in the instant petition, involves the direct

creation of a local or a chapter through the process of chartering. The Implementing Rules

stipulate that a local or chapter may be directly created by a federation or national union.

Petitioner insists that Section 3 of the Implementing Rules, as amended by

Department Order No. 9, violated Article 234 of the Labor Code when it provided for less

stringent requirements for the creation of a chapter or local. Article 234 of the Labor

Code provides that an independent labor organization acquires legitimacy only upon its

registration with the BLR: xxx 3) The names of all its members comprising at least twenty

percent (20%) of all the employees in the bargaining unit where it seeks to operate; xxx

It is emphasized that the foregoing pertains to the registration of an independent

labor organization, association or group of unions or workers.

However, the creation of a branch, local or chapter is treated differently. This Court,

in the landmark case of Progressive Development Corporation v. Secretary, Department of

Labor and Employment, declared that when an unregistered union becomes a branch,

local or chapter, some of the aforementioned requirements for registration are no

longer necessary or compulsory. Whereas an applicant for registration of an

independent union is mandated to submit, among other things, the number of

employees and names of all its members comprising at least 20% of the employees in

the bargaining unit where it seeks to operate, as provided under Article 234 of the Labor

Code and Section 2 of Rule III, Book V of the Implementing Rules, the same is no longer

required of a branch, local or chapter. The intent of the law in imposing less

requirements in the case of a branch or local of a registered federation or national union is

to encourage the affiliation of a local union with a federation or national union in order to

increase the local unions bargaining powers respecting terms and conditions of labor.

DISPOSITIVE: San Miguel Corp Union won. The Certificate of Registration of San

Miguel Packaging Union is ORDERED CANCELLED, and DROPPED from the rolls of

legitimate labor organizations.

DOCTRINE: When an unregistered union becomes a branch, local or chapter, some of

the requirements for registration are no longer necessary or compulsory. Whereas an

applicant for registration of an independent union is mandated to submit, among other

things, the number of employees and names of all its members comprising at least 20% of

the employees in the bargaining unit where it seeks to operate.

DEVELOPMENT CORPORATION-PIZZA HUT,petitioner, PROGRESSIVE vs. HON.

BIENVENIDO LAGUESMA, in his capacity as Undersecretary of Labor, and

NAGKAKAISANG LAKAS NG MANGGAGAWA (NLM)-KATIPUNAN,respondents.

FACTS:

On July 9, 1993, Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan (respondent

Union) filed a petition for certification election with the Department of Labor (National

Capital Region) in behalf of the rank and file employees of the Progressive Development

Corporation (Pizza Hut)

Petitioner filed on August 20, 1993, a verified Motion to Dismiss the petition alleging fraud,

falsification and misrepresentation in the respondent. Unions registration making it void

and invalid: a) respondent Unions registration was tainted with false, forged, double or

multiple signatures of those who allegedly took part in the ratification of the respondent

Unions constitution and by-laws and in the election of its officers that there were two sets

of supposed attendees to the alleged organizational meeting that was alleged to have taken

place on June 26, 1993; that the alleged chapter is claimed to have been supported by 318

members when in fact the persons who actually signed their names were much less; and b)

while the application for registration of the charter was supposed to have been approved in

the organizational meeting held onJune 27, 1993, the charter certification issued by the
federation KATIPUNAN was datedJune 26, 1993or one (1) day prior to the formation of the

chapter, thus, there were serious falsities in the dates of the issuance of the charter

certification and the organization meeting of the alleged chapter.

On August 30, 1993, petitioner filed a Petition seeking the cancellation of the Unions

registration on the grounds of fraud and falsification, docketed as BIR Case No. 8-21-83.

Motion was likewise filed by petitioner with the Med-Arbiter requesting suspension of

proceedings in the certification election case until after the prejudicial question of the

Unions legal personality is determined in the proceedings for cancellation of registration.

However, in an Order dated September29, 1993,6Med-Arbiter Rasidali C. Abdullah directed

the holding of a certification election among petitioners rank and file employees.

appeal to the office of the Secretary of Labor, Labor Undersecretary Bienvenido E.

Laguesma in a Resolution dated December 29, 1993 denied the same.

motion for reconsideration of the public respondents resolution was denied.

ISSUE1:

whether or not, after the necessary papers and documents have been filed by a labor

organization, recognition by the Bureau of Labor Relations merely becomes a ministerial

function.

RULING1:

Art. 234. Requirements of registration. Any applicant labor organization, association or

group of unions or workers shall acquire legal personality and shall be entitled to the rights

and privileges granted by law to legitimate labor organizations upon issuance of the

certificate of registration based on the following requirements: (a) Fifty pesos (P50.00)

registration fee; (b) The names of its officers, their addresses, the principal address of the

labor organization, the minutes of the organizational meetings and the list of the workers

who participated in such meetings; (c) The names of all its members comprising at least

twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;

(d) If the applicant union has been in existence for one or more years, copies of its annual

financial reports; and (e) Four (4) copies of the constitution and by-laws of the applicant

union, minutes of its adoption or ratification, and the list of the memberswho participated

in it.
A more than cursory reading of the aforecited provisions clearly indicates that the

requirements embodied therein are intended as preventive measures against the

commission of fraud. After a labor organization has filed the necessary papers and

documents for registration, it becomes mandatory for the Bureau of Labor Relations to

check if the requirements under Article 234 have been sedulously complied with.

falsification and seriousirregularities, especially those appearing on the face of the

application and the supporting documents, a labor organization should be denied

recognition as a legitimate labor organization. And if a certificate of recognition has been

issued, the propriety of the labor organizations registration could be assailed directly

through cancellation of registration proceedings in accordance with Articles 238 and 239 of

the Labor Code, or indirectly, by challenging its petition for the issuance of an order for

certification election.

Such requirements are a valid exercise of the police power, because the activities in which

labor organizations, associations and unions of workers are engaged directly affect the

public interest and should be protected.

the employer needs the assurance that the union it is dealing with is a bona fide

organization, one which has not submitted false statements or misrepresentations to the

Bureau. Clearly, fraud, falsification and misrepresentation in obtaining recognition as a

legitimate labor organization are contrary to the Med-Arbiters conclusion not merely

collateral issues. The invalidity of respondent Unions registration would negate its legal

personality to participate in certification election.

Once a labor organization attains the status of a legitimate labor organization it begins to

possess all of the rights and privileges granted by law to such organizations.

Inasmuch as the legal personality of respondent Union had been seriously challenged, it

would have been more prudent for the Med-Arbiter and public respondent to have granted

petitioners request for the suspension of proceedings in the certification election case, until

the issue of the legality of the Unions registration shall have been resolved. Failure ofthe

Med-Arbiter and public respondent to heed the request constituted a grave abuse of

discretion.
TROPICAL HUT EMPLOYEES UNION-CGW vs. TROPICAL HUT FOOD MARKET, INC.

G.R. No. L-43495-99, 20 January 1990

FACTS:

The rank and file workers of the Tropical Hut Food Market Incorporated organized a

local union called the Tropical Hut Employees Union, known for short as the THEU, elected

their officers, adopted their constitution and by-laws and immediately sought affiliation

with the National Association of Trade Unions (NATU). The NATU accepted the THEU

application for affiliation. Following such affiliation with NATU, Registration Certificate was

issued by the Department of Labor in the name of the Tropical Hut Employees Union

NATU. It appears, however, that NATU itself as a labor federation, was not registered with

the Department of Labor.

Company and THEU-NATU entered into a new Collective Bargaining which

incorporated the previous union-shop security clause and the attached check-off

authorization form. NATU received a letter jointly signed by the incumbent officers of the

local union informing the NATU that THEU was disaffiliating from the NATU federation. On

despite being given the chance to affirm their membership with THEU-NATU, they did not.

The union security clause set forth in the CBA was enforced which says membership is a

condition of continued employment. And they were dismissed.

ISSUE:

Whether or not disaffiliation is a violation of union security clause and be the basis of

the dismissal of the employees.

HELD:

No. The union security clause embodied in the Collective Bargaining Agreement

cannot be used to justify the dismissals meted to petitioners since it is not applicable to the

circumstances obtaining in this case. The CBA imposes dismissal only in case an employee

is expelled from the union for joining another federation or for forming another union or

who fails or refuses to maintain membership therein. The case at bar does not involve the

withdrawal of merely some employees from the union but of the whole THEU itself from its

federation. Clearly, since there is no violation of the union security provision in the CBA,

there was no sufficient ground to terminate the employment of said employees.

 In view of the fact that the dispute revolved around the mother federation and its

local, with the company suspending and dismissing the workers at the instance of the

mother federation then, the companys liability should be limited to the immediate

reinstatement of the workers. And since their dismissals were effected without previous

hearing and at the instance of NATU, this federation should be held liable to the petitioners

for the payment of their backwages, as what We have ruled in the Liberty Cotton Mills Case.

BENGUET CONSOLIDATED, INC. vs. BCI EMPLOYEES & WORKERS UNION-PAFLU,

PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS, CIPRIANO CID and JUANITO

GARCIA

G.R. No. L-24711,; Apr 30, 1968

FACTS:

On June 23, 1959, the Benguet-Balatoc Workers Union (BBWU), for and in behalf of

all Benguet Consolidated, Inc (BENGUET) employees in its mines and milling establishment

located at Balatoc, Antamok and Acupan, Mt. Province, entered into a Collective Bargaining

Contract (CONTRACT) with BENGUET. The CONTRACT was stipulated to be effective for a

period of 4-1/2 years, or from June 23, 1959 to December 23, 1963. It likewise embodied a

No-Strike, No-Lockout clause.

3 years later, or on April 6, 1962, a certification election was conducted by the

Department of Labor among all the rank and file employees of BENGUET in the same

collective bargaining units. BCI EMPLOYEES & WORKERS UNION (UNION) obtained more

than 50% of the total number of votes, defeating BBWU. The Court of Industrial Relations

certified the UNION as the sole and exclusive collective bargaining agent of all BENGUET

employees as regards rates of pay, wages, hours of work and such other terms and

conditions of employment allowed them by law or contract.

Later on, the UNION filed a notice of strike against BENGUET. UNION members who

were BENGUET employees in the mining camps at Acupan, Antamok and Balatoc, went on

strike. The strike was attended by violence, some of the workers and executives of the
BENGUET were prevented from entering the premises and some of the properties of the

BENGUET were damaged as a result of the strike. Eventually, the parties agreed to end the

dispute. BENGUET and UNION executed the AGREEMENT. PAFLU placed its conformity

thereto. About a year later or on January 29, 1964, a collective bargaining contract was

finally executed between UNION-PAFLU and BENGUET.

Meanwhile, BENGUET sued UNION, PAFLU and their Presidents to recover the

amount the former incurred for the repair of the damaged properties resulting from the

strike. BENGUET also argued that the UNION violated the CONTRACT which has a

stipulation not to strike during the effectivity thereof.

Defendants unions and their presidents defended that: (1) they were not bound by

the CONTRACT which BBWU, the defeated union, had executed with BENGUET; (2) the

strike was due, among others, to unfair labor practices of BENGUET; and (3) the strike was

lawful and in the exercise of the legitimate rights of UNION-PAFLU under Republic Act 875.

The trial court dismissed the complaint on the ground that the CONTRACT,

particularly the No-Strike clause, did not bind defendants. BENGUET interposed the

present appeal.

ISSUE:

Did the Collective Bargaining Contract executed between Benguet and BBWU on June 23,

1959 and effective until December 23, 1963 automatically bind UNION-PAFLU upon its

certification, on August 18, 1962, as sole bargaining representative of all BENGUET

employees

RULING:

NO. BENGUET erroneously invokes the so-called Doctrine of Substitution referred

to in General Maritime Stevedores Union v. South Sea Shipping Lines where it was ruled

that:

We also hold that where the bargaining contract is to run for more than two years,

the principle of substitution may well be adopted and enforced by the CIR to the effect that

after two years of the life of a bargaining agreement, a certification election may be allowed

by the CIR, that if a bargaining agent other than the union or organization that executed
the contract, is elected, said new agent would have to respect said contract, but that it may

bargain with the management for the shortening of the life of the contract if it considers it

too long, or refuse to renew the contract pursuant to an automatic renewal clause.

BENGUETs reliance upon the Principle of Substitution is totally misplaced. This

principle, formulated by the NLRB as its initial compromise solution to the problem facing

it when there occurs a shift in employees union allegiance after the execution of a

bargaining contract with their employer, merely states that even during the effectivity of a

collective bargaining agreement executed between employer and employees thru their agent,

the employees can change said agent but the contract continues to bind them up to its

expiration date. They may bargain however for the shortening of said expiration date.

In formulating the substitutionary doctrine, the only consideration involved was the

employees (principal) interest in the existing bargaining agreement. The agents (union)

interest never entered the picture. The majority of the employees, as an entity under the

statute, is the true party in interest to the contract, holding rights through the agency of

the union representative. Thus, any exclusive interest claimed by the agent is defeasible at

the will of the principal. The substitutionary doctrine only provides that the employees

cannot revoke the validly executed collective bargaining contract with their employer by the

simple expedient of changing their bargaining agent. And it is in the light of this that the

phrase said new agent would have to respect said contract must be understood. It only

means that the employees, thru their new bargaining agent, cannot renege on their

collective bargaining contract, except of course to negotiate with management for the

shortening thereof.

The substitutionary doctrine cannot be invoked to support the contention that a

newly certified collective bargaining agent automatically assumes all the personal

undertakings like the no-strike stipulation here in the collective bargaining agreement

made by the deposed union. When BBWU bound itself and its officers not to strike, it could

not have validly bound also all the other rival unions existing in the bargaining units in

question. BBWU was the agent of the employees, not of the other unions which possess

distinct personalities.
 UNION, as the newly certified bargaining agent, could always voluntarily assume all

the personal undertakings made by the displaced agent. But as the lower court found,

there was no showing at all that, prior to the strike, UNION formally adopted the existing

CONTRACT as its own and assumed all the liabilities imposed by the same upon BBWU.

Defendants were neither signatories nor participants in the CONTRACT.

Everything binding on a duly authorized agent, acting as such, is binding on the

principal; not vice-versa, unless there is mutual agency, or unless the agent expressly binds

himself to the party with whom he contracts. Here, it was the previous agent who expressly

bound itself to the other party, BENGUET. UNION, the new agent, did not assume this

undertaking of BBWU.

Since defendants were not contractually bound by the no-strike clause in the

CONTRACT, for the simple reason that they were not parties thereto, they could not be

liable for breach of contract to plaintiff.

WHEREFORE, the judgment of the lower court appealed from is hereby affirmed.

TANCINCO vs CALLEJA Who may vote> election of officers

FACTS:

Private respondents are the prime organizers of ITM-MEA. While said respondents

were preparing to file a petition for direct certification of the Union as the sole and exclusive

bargaining agent of ITM's bargaining unit, the union's Vice-President, was promoted to the

position of Department Head, thereby disqualifying him for union membership. Said

incident, led to a strike spearheaded by Lacanilao group, respondents. Another group

however, led by petitioners staged a strike inside the company premises. After 4 days the

strike was settled. On May 10, 1986 an agreement was entered into by the representatives

of the management, Lacanilao group and the Tancinco group the relevant terms of which

states that all monthly employees shall be united under one union, the ITM Month

Employees Association (ITM-MEA) to be affiliated with ANGLO. The management of ITM

recognizes ANGLO as the sole and exclusive bargaining agent of all the monthly-paid

employees; However, during the pre-election conference attended by MOLE officers, ANGLO
through its National Secretary, made a unilateral ruling excluding some 56 employees

consisting of the Manila office employees, members of Iglesia ni Kristo, non-time card

employees, drivers of Mrs. Salazar and the cooperative employees of Mrs. Salazar.

The election of officers was conducted, the 56 employees in question participated but

their votes were segregated without being counted. Lacanilao's group won. Lacanilao

garnered 119 votes with a margin of 3 votes over Tancinco prompting petitioners to make a

protest.

BLR ruled holding the exclusion of the 56 employees as arbitrary, whimsical, and

wanting in legal basis but set aside the challenged order on the ground that 51 of 56

challenged voters were not yet union members at the time of the election per April 24, 1986

list submitted before the Bureau.

ISSUE:

WON the 56 employees have the right to vote even though some of them are not

included in the list of union members submitted to the Bureau.

HELD: YES

RATIO:

Submission of the employees names with the BLR as qualified members of the union

is not a condition sine qua non to enable said members to vote in the election of union's

officers.

It finds no support in fact and in law. Per public respondent's findings, the April 24,

1986 list consists of 158 union members only wherein 51 of the 56 challenged voters'

names do not appear. It is true that under article 242(c) of the Labor Code, as amended,

only members of the union can participate in the election of union officers. The question

however of eligibility to vote may be determined through the use of the applicable payroll

period and employee's status during the applicable payroll period. The payroll of the month

next preceding the labor dispute in case of regular employees and the payroll period at or

near the peak of operations in case of employees in seasonal industries.

 It can also be shown that their act of joining the election by casting their votes is a

clear manifestation of their intention to join the union. They must therefore be considered

ipso facto members.

Said employees having exercised their right to unionism by joining ITM-MEA their

decision is paramount. Their names could not have been included in the list of employee

submitted on April 24, 1986 to the Bureau of Labor for the agreement to join the union was

entered into only on May 10, 1986. Indeed the election was supervised by the Department

of Labor where said 56 members were allowed to vote. Private respondents never challenged

their right to vote then

ASSOCIATED LABOR UNION VS CALLEJA

179 SCRA 127

[May 5, 1989]

NATURE

Special civil action for certiorari and prohibition

FACTS

-The associated Labor Unions (ALU) informed GAW Trading, Inc. (GAWTI) that majority of

the latters employees have authorized ALU to be their sole and exclusive bargaining

representative, and requested GAW Trading Inc., for a conference for the execution of an
initial CBA. GAWTI recognized ALU as the sole and exclusive bargaining agent for

the majority of its employees and for which it set the time for conference and/or negotiation

at 4PM on May 12, 1986 at the Pillsbury Office, Aboitiz Building Juan Luna Street, Cebu

City. On May 15, 1986, ALU in behalf of the majority of the employees of GAW Trading Inc.

and GAWTI signed and executed the CBA.

-In the meantime, the Southern Philippines Federation of Labor (SPFL) together with

Nagkahiusang Mamumuo sa GAW (NAMGAW) undertook a Strike after it failed to get the

management of GAWTI to sit for a conference respecting its demands in an effort to

pressure GAWTI to make a turnabout of its standing recognition of ALU as the sole and

exclusive bargaining representative of its employees, as to which strike GAWTI filed a

petition for Restraining Order/Preliminary Injunction, and which strike Labor Arbiter

Tumamak held as illegal.

-On May 19, 1986, GAW Lumad Labor Union (GALLU-PSSLU) Federation filed a

Certification Election petition but as found by Med-Arbiter Cumba, without having complied

with the subscription requirement for which it was merely considered an intervenor until

compliance thereof in the other petition for direct recognition as bargaining agent filed on

MAy 28, 1986 by southern Philippines Federation of Labor (SPFL)

-In the meantime, CBA executed by ALU and GAWTI was duly filed with the MOLE, Cebu

city. Nevertheless, Med-Arbiter Cumba ruled for the holding of a certification election in all

branches of GAWTI in Cebu City, as to which ALU filed MFR, which was treated as an

appeal. So the entire record of subject certification case was forwarded for the Director,

Bureau of Labor Relations (BLR), MOLE, Manila.

-BLR Director Trajano, granted ALUs appeal (MFR) and set aside the questioned Med-

Arbiter, on the ground that the CBA has been effective and valid and the contract bar rule

applicable; Philippine Social Security Labor Union (PSSLU) and Southern Philippines

Federation of Labor (SPFL) filed MFR, supplemented by the Submission of Additional

Evidence. GAWTI and ALU opposed. Trajanos decision was reversed by herein public

respondent Calleja. ALU filed MFR but was denied. Hence this petition.

-Calleja ordered the holding of a certification election ruling that the contract bar rule

relied upon by her predecessor Trajano does not apply in the present case. Calleja ruled

that CBA is defective because it was not duly submitted in accordance with Sec. I, Rule IX,

Book V of the Implementing Rules of BP 130. Theres no proof that CBA has been posted in

at least 2 conspicuous places in the establishment at least 5 days before its ratification and

that it has been ratified by the majority of the employees in the bargaining unit.

ISSUE

WON Calleja erred in reversing Trajanos ruling and ordering the holding of a certification

election.

HELD

NO

The CBA in question is defective.

-The mechanics of collective bargaining are set in motion only when the following

jurisdictional preconditions are present: (1) possession of the status of majority

representation by the employees representative in accordance with any of the means of

selection and/or designation provided for by the Labor Code; (2) proof of majority

representation; and

(3) a demand to bargain under Art.256, par. (a) of the Labor Code4

-The standing of ALU as an exclusive bargaining representative is dubious. The recognition

by GAWTI appears to have been based on the self-serving claim of ALU that it had the

support of the majority of the employees in the bargaining unit.

-In cases where the then Minister of Labor directly certified the union as the bargaining

representative, SC voided such certification where there was a failure to properly determine

with legal certainty whether the union enjoyed a majority representation. In such a case,

the holding of a certification election at a proper time would not necessarily be a mere

formality as there was a compelling reason not to directly and unilaterally certify a union

-CBA was defective also because of: [a] the failure of GAWTI to post the CBA in at least 2

conspicuous places in the establishment at least 5 days before its ratification, [b] the

finding of Calleja that 181 of the 281 4 Art. 256. Representation issue in organized

establishments. In organized establishments, when a verified petitionquestioning the

majority status of the incumbent bargainingagent is filed before the DOLE within the 60-

day period beforethe expiration of a CBA, the Med-Arbiter shall automaticallyorder an

election by secret ballot when the verified petition issupported by the written consent of at

least 25% of all the EEsin the appropriate bargaining unit. To have a valid election, atleast

a majority of all eligible voters in the unit must have casttheir votes. The labor union

receiving the majority of the validvotes cast shall be certified as the exclusive bargaining

agentof all the workers in the unit. When an election which providesfor three or more

choices results in no choice receiving a majority of the valid votes cast, a run-off election

shall be conducted between the labor unions receiving the two highestnumber of votes:

Provided,That the total number of votes for all contending unions is at least 50% of the

number of votes cast. workers who ratified the same now strongly and vehemently deny

and/or repudiate the alleged negotiations and ratification of the CBA.

-Finally, the inapplicability of the contract bar rule is further underscored by the fact that

when the disputed agreement was filed before the Labor Regional Office on May 27, 1986, a

petition for certification election had already been filed on May 19, 1986. Although the

petition was not supported by the signatures of 30% of the workers in the bargaining unit,

it was enough to initiate certification election.

Disposition

Public respondents order for the conduct of a certification election among the rank-and-file

workers of respondent GAW Trading Inc. is AFFIRMED

KAPATIRAN SA MEAT AND CANNING DIVISION (TUPAS) vs. FERRER CALLEJA, BLR

DIRECTOR G.R. No. 82914, June 20, 1988 Ponente: Justice Grino

FACTS:

From 1984 - 1987, TUPAS was the sole and exclusive bargaining representative of the

workers in the Meat and Canning Division of the Universal Robina Corporation (company)

with a 3 year CBA which is to expire by Nov. 15 1987. Within the 60 day period prior to the

expiration of the CBA, Tupas filed an amended notice of strike to pressure the company to

extend, renew or negotiate a new CBA. NEW ULO, composed mostly of workers belonging

to the Iglesia ni Kristo, registered as a labor union. The TUPAS staged a strike. The

company was able to obtain an injunction against the strike, resulting to the return to work

for the parties to negotiate the CBA. NEW ULO, claiming that it has "the majority of the

daily wage rank and file employees numbering 191," filed a petition for a certification

election at the Bureau of Labor Relations. TUPAS moved to dismiss the petition for being

defective in form and that the members of the NEW ULO were mostly members of the

Iglesia ni Kristo sect which three (3) years previous refused to affiliate with any labor union.

It also accused the company of using the NEW ULO to defeat TUPAS' bargaining rights. The

Med Arbiter ordered for the holding of the election within 20 days. TUPAS appealed to the

BLR. In the meantime, it was able to negotiate a 3 year CBA with the company. (CBA signed

1987- expiration Nov 15. 1990) Respondent Calleja dismissed the appeal, hence, this

petition alleging grave abuse of discretion(GAD) amounting to lack or excess of jurisdiction

on the part of the respondent in affirming the Med-

Arbiters order for a certification of election.

ISSUE:

WON Calleja, in affirming the Med- Arbiters order, performed his function with GAD

amounting to lack or excess of jurisdiction over the said case.

RULING:

No. The SC, in deciding the case, cited Victoriano vs. Elizalde Rope Workers' Union,

59 SCRA 54. It said that upholding the right of members of the IGLESIA NI KRISTO sect

not to join a labor union for being contrary to their religious beliefs, does not bar the

members of that sect from forming their own union. The public respondent correctly

observed that the "recognition of the tenets of the sect ... should not infringe on the basic

right of self-organization granted by the constitution to workers, regardless of religious

affiliation. The fact that TUPAS was able to negotiate a new CBA with ROBINA within the

60-day freedom period of the existing CBA, does not foreclose the right of the rival union,

NEW ULO, to challenge TUPAS' claim to majority status, by filing a timely petition for

certification election on October 13, 1987 before TUPAS' old CBA expired on November 15,

1987 and before it signed a new CBA with the company on December 3, 1987. As pointed

out by Med-Arbiter Abdullah, a "certification election is the best forum in ascertaining the

majority status of the contending unions wherein the workers themselves can freely choose

their bargaining representative thru secret ballot." Since it has not been shown that this

order is tainted with unfairness, this Court will not thwart the holding of a certification

election.

013 ATLAS LITHOGRAPHIC SERVICES, INC., petitioner, vs. UNDERSECRETARY

BIENVENIDO E. LAGUESMA (Department of Labor and Employment) and ATLAS

LITHOGRAPHIC SERVICES, INC. SUPERVISORY, ADMINISTRATIVE, PERSONNEL,

PRODUCTION, ACCOUNTING AND CONFIDENTIAL EMPLOYEES ASSOCIATION-

KAISAHAN NG MANGGAWANG PILIPINO (KAMPIL-KATIPUNAN)

[G.R. No. 96566; January 6, 1992]

NOTES: (if applicable)

Petition for review under Rule 65

Note: since this case was mentioned under the For Reference part, please take time to

read the brief history of the amendments on the Labor Code.

Please take note of the difference from the Industrial Peace Act -> 1974 Labor Code -> 1989

Labor Code

Ind Peace Act 3 types of employees

1974 LC only managerial and rank-and-file

1989 back to Ind Peace Act; included supervisory emps.

FACTS:

On July 16, 1990, the supervisory, administrative personnel, production, accounting

and confidential employees of Atlas Lithographic Services Inc (ALSI) affiliated with

Kaisahan ng Manggagawang Pilipinom a national labor organization. The local union

adopted the name ALSI-SAPPACEA-KAMPIL, which shall hereafter refer to as the

supervisors union.

Kampil-Katipunan filed on behalf of the supervisors union a petition for certification

election so that it could be the sole and exclusive bargaining agent of the supervisory

employees. ALSI opposed the petition claiming that under Art. 245 of the Labor Code,

Kampil-Katipunana cannot represent the supervisory employees for collective bargaining

purposes because it also represents the rank-and-file employees union.

On September 18, 1990, the Med-Arbiter issued an order allowing the certification

election. ALSI appealed but such appeal was denied. Hence, this petition for certiorari.

ISSUE(S):

1. WON, under Art. 245 of the Labor Code, a local union of supervisory employees may

be allowed to affiliate with a national federation of labor organization of rank-and-file

employees where such federation represents its affiliates in the collective bargaining

negotiation with the same employer of the supervisors and in the implementation of the

CBAs.

HELD: NO, supervisors are not prohibited from forming their own union. What the law

prohibits is their membership in a labor organization of rank-and-file employees or their

joining in a federation of rank-and-file employees that includes the very local union which

they are not allowed to directly join.

RATIO:

ALSIs arguments:

1. KAMPIL-KATIPUNAN already represents its rank-and-file employees and, therefore, to

allow the supervisors of those employees to affiliate with the private respondent is

tantamount to allowing the circumvention of the principle of the separation of unions

under Article 245 of the Labor Code.

2. It further argues that the intent of the law is to prevent a single labor organization

from representing different classes of employees with conflicting interests.

KAMPIL-KATIPUNANs arguments:

1. Despite affiliation with a national federation, the local union does not lose its

personality which is separate, and distinct from the national federation. [Adamson &

Adamson vs. CIR (1984)]

2. It maintains that Rep. Act No. 6715 contemplates the principle laid down by this

Court in the Adamson case interpreting Section 3 of Rep. Act No. 875 (the Industrial Peace

Act) on the right of a supervisor's union to affiliate. The private respondent asserts that the

legislature must have noted the Adamson ruling then prevailing when it conceived the

reinstatement in the present Labor Code of a similar provision on the right of supervisors to

organize.

DISCUSSION:

The basis of the Adamson case is R.A. No. 875 (Industrial Peace Act) where employees

were classified into three groups, namely: 1) managerial employees; 2) supervisors; and 3)

rank-and-file employees. Supervisors who were considered employees in relation to their

employer could join a union but not a union of rank-and-file employees.

With the enactment in 1974 of the Labor Code (Pres Decree No. 442), employees were

classified into managerial and rank-and-file employees. Neither the category of supervisors

nor their right to organize under the old statute were recognized. So that, in Bulletin

Publishing Corporation v. Sanchez (144 SCRA 628 [1986]), the Court interpreted the
superseding labor law to have removed from supervisors the right to unionize among

themselves. The Court ruled:

In the light of the factual background of this case, We are constrained to hold that

the supervisory employees of petitioner firm may not, under the law, form a supervisors

union, separate and distinct from the existing bargaining unit (BEU), composed of the rank-

and-file employees of the Bulletin Publishing Corporation. It is evident that most of the

private respondents are considered managerial employees. Also, it is distinctly stated in

Section 11, Rule II, of the Omnibus Rules Implementing the Labor Code, that supervisory

unions are presently no longer recognized nor allowed to exist and operate as such. (pp.

633, 634)

In Section 11, Rule II, Book V of the Omnibus Rules implementing Pres. Decree No. 442,

the supervisory unions existing since the effectivity of the New Code in January 1, 1975

ceased to operate as such and the members who did not qualify as managerial employees

under this definition in Article 212 (k) therein became eligible to form, to join or assist a

rank-and-file union.

A revision of the Labor Code undertaken by the bicameral Congress brought about

the enactment of Rep. Act No. 6715 in March 1989 in which employees were reclassified

into three groups, namely: (1) the managerial employees; (2) supervisors; and (3) the rank

and file employees. Under the present law, the category of supervisory employees is once

again recognized. Hence, Art. 212 (m) states:

(m) . . . Supervisory employees are those who, in the interest of the employer, effectively

recommend such managerial actions if the exercise of such authority is not merely

routinary or clerical in nature but requires the use of independent judgment. . . .

The rationale for the amendment is the government's recognition of the right of

supervisors to organize with the qualification that they shall not join or assist in the

organization of rank-and-file employees. The reason behind the Industrial Peace Act

provision on the same subject matter has been adopted in the present statute. The interests

of supervisors on the one hand, and the rank-and-file employees on the other, are separate

and distinct. The functions of supervisors, being recommendatory in nature, are more
identified with the interests of the employer. The performance of those functions may, thus,

run counter to the interests of the rank-and-file.

This intent of the law is made clear in the deliberations of the legislators on then Senate

Bill 530 now enacted as Rep. Act No. 6715.

The definition of managerial employees was limited to those having authority to hire

and fire while those who only recommend effectively the hiring or firing or transfers of

personnel would be considered as closer to rank-and-file employees. The exclusion,

therefore, of middle level executives from the category of managers brought about a third

classification, the supervisory employees. These supervisory employees are allowed to form

their own union but they are not allowed to join the rank-and-file union because of conflict

of interest (Journal of the Senate, First Regular Session, 1987, 1988, Volume 3,

p. 2245).

In terms of classification, however, while they are more closely identified with the rank-and-

file they are still not allowed to join the union of rank-and-file employees. The peculiar role

of supervisors is such that while they are not managers, when they recommend action

implementing management policy or ask for the discipline or dismissal of subordinates,

they identify with the interests of the employer and may act contrary to the interests of the

rank-and-file.

The Court agrees with ALSIs contention that a conflict of interest may arise in the areas of

discipline, collective bargaining and strikes. Members of the supervisory union might refuse

to carry out disciplinary measures against their co-member rank-and-file employees. And

also, in the event of a strike, the national federation might influence the supervisors union

to conduct a sympathy strike on the sole basis of affiliation.

The Court construes Article 245 to mean that, as in Section 3 of the Industrial Peace Act,

supervisors shall not be given an occasion to bargain together with the rank-and-file

against the interests of the employer regarding terms and conditions of work.

The Court emphasizes that the limitation is not confined to a case of supervisors wanting to

join a rank-and-file local union. The prohibition extends to a supervisors' local union

applying for membership in a national federation the members of which include local

unions of rank-and-file employees. The intent of the law is clear especially where, as in the
case at bar, the supervisors will be co-mingling with those employees whom they directly

supervise in their own bargaining unit.

There is no question about this intendment of the law. There is, however, in the present

case, no violation of such a guarantee to the employee. Supervisors are not prohibited from

forming their own union. What the law prohibits is their membership in a labor

organization of rank-and-file employees (Art. 245, Labor Code) or their joining a national

federation of rank-and-file employees that includes the very local union which they are not

allowed to directly join.

NOTE: Before this case was resolved, ALSI caved in to the pressure and was no longer

interested to pursue this case. SC just said the employer is free to grant whatever

concession it wishes to give to its employees unilaterally or through negotiations. However,

the resolutions issued by DOLE were still struck down.

WHEREFORE, the petition is hereby GRANTED. The private respondent is disqualified from

affiliating with a national federation of labor organizations which includes the petitioner's

rank-and-file employees.

Philips Industrial Development, Inc. vs NLRC

Facts:

- PIDI is a domestic corporation engaged in the manufacturing and marketing of electronic

products. Since 1971, it had a total of 6 collective bargaining agreements with private

respondent Philips Employees Organization-FFW (PEO-FFW), a registered labor union and

the certified bargaining agent of all rank and file employees of PIDI.

- In the first CBA, the supervisors (referred to in RA 875), confidential employees, security

guards, temporary employees and sales representatives were excluded in the bargaining

unit. In the second to the fifth, the sales force, confidential employees and heads of small

units, together with the managerial employees, temporary employees and security

personnel were excluded from the bargaining unit. The confidential employees are the

division secretaries of light/telecom/data and consumer electronics, marketing managers,

secretaries of the corporate planning and business manager, fiscal and financial system
manager and audit and EDP manager, and the staff of both the General Management and

the Personnel Department.

- In the sixth CBA, it was agreed that the subject of inclusion or exclusion of service

engineers, sales personnel and confidential employees in the coverage of the bargaining unit

would be submitted for arbitration. The parties failed to agree on a voluntary arbitrator and

the Bureau of Labor Relations endorsed the petition to the Executive Labor Arbiter of the

NCR for compulsory arbitration.

- March 1998, Labor Arbiter: A referendum will be conducted to determine the will of the

service engineers and sales representatives as to their inclusion or exclusion in the

bargaining unit. It was also declared that the Division Secretaries and all staff of general

management, personnel and industrial relations department, secretaries of audit, EDP,

financial system are confidential employees are deemed excluded in the bargaining unit.

- PEO-FFW appealed to the NLRC; NLRC declared PIDI's Service Engineers, Sales Force,

division secretaries, all Staff of General Management, Personnel and Industrial Relations

Department, Secretaries of Audit, EDP and Financial Systems are included within the rank

and file bargaining unit, citing the Implementing Rules of E.O 111 and Article 245 of the

Labor Code (all workers, except managerial employees and security personnel, are qualified

to join or be a part of the bargaining unit)

Issue:

-Whether service engineers, sales representatives and confidential employees of petitioner

are qualified to be part of the existing bargaining unit

- Whether the "Globe Doctrine" should be applied

Held:

NLRC decision is set aside while the decision of the Executive Labor Arbiter is reinstated.

Confidential employees are excluded from the bargaining unit while a referendum will be

conducted to determine the will of the service engineers and sales representatives as to

their inclusion or exclusion from the bargaining unit, but those who are holding

supervisory positions or functions are ineligible to join a labor organization of the rank and

file employees but may join, assist or form a separate labor organization of their own.

Ratio:
The exclusion of confidential employees:

The rationale behind the ineligibility of managerial employees to form, assist or join a

labor union equally applies to confidential employees. With the presence of managerial

employees in a union, the union can become company-dominated as their loyalty cannot be

assured. In Golden Farms vs Calleja, the Court states that confidential employees, who

have access to confidential information, may become the source of undue advantage.

As regards to the sales representatives and service engineers, according to the OSG, there

is no doubt that they are entitled to form a union as they are not disqualified by law from

doing so.

Globe Doctrine:

Globe Doctrine states that in determining the proper bargaining unit, the express will

or desire of the employees shall be considered, they should be allowed to determine for

themselves what union to join or form. The best way is through a referendum, as decreed

by the Executive Labor Arbiter. However, in this case, since the only issue is the employees'

inclusion in or exclusion from the bargaining unit in question, the Globe Doctrine has no

application in this case. The doctrine applies only in instance of evenly balanced claims by

competitive groups for the right to be established as the bargaining unit. (many unions

'competing' to be the bargaining representative?)

Metrolab Industries Inc. vs. Roldan Confesor

FACTS:

Herein petitioner Metrolab Industries represented by the private respondent Metro

Drug Corp. a labor organization representing the petitioners employees. After the CBA

between the parties expired, negotiations for new CBA ended into deadlock. Both parties

failed to settle their dispute hence the order issued by the Secretary of Labor and

Employment that any strike or acts that might exacerbate the situation is ceased and

ordered the parties to execute a new CBA. Later, the petitioner moved two lay-off acts to its

rank and file employees and was opposed by the union. Petitioner assailed that the move

was temporary and exercise of its management prerogative. Herein public respondent
declared that the petitioners act illegal and issued two resolution of cease and desist

stating that the move exacerbate and caused conflict to the case at bar. Included on the last

resolution issued by the public respondent which states that executive secretaries are

excluded from the closed-shop provision of the CBA, not from the bargaining unit. A

petition for certiorari seeking the annulment of the Resolution and Omnibus Resolution of

Roldan-Confesor on grounds that they were issued with grave abuse of discretion and

excess of jurisdiction.

ISSUE:

WON executive secretaries must be included as part of the bargaining unit of rank and file

employees.

RULING:

NO. By recognizing the expanded scope of the right to self-organization, the intent of

the court was to delimit the types of employees excluded from the close shop provisions, not

from the bargaining unit. The executive secretaries of General Manager and the

Management Committees should not only be exempted from the closed-shop provision but

should not be permitted to join in the bargaining unit of the rank and file employees as well

as on the grounds that the executive secretaries are confidential employees , having access

to vital labor information.

As stated in several cases, confidential employees are prohibited and disqualified to

join any bargaining unit since the very nature of the functions are to assist and act in a

confidential capacity, or to have access to confidential matters of, persons who exercise

managerial functions in the field of labor relations. Finally, confidential employees cannot

be classified as rank and file from the very nature of their work. Excluding confidential

employees from the rank and file of bargaining unit, therefore, is not tantamount to

discrimination.

Therefore, executive secretaries of petitioners

General Manager and its Management Committee are permanently excluded from the

bargaining unit of petitioners rank and file employees.

SAN MIGUEL UNION VS. LAGUESMA

NOVEMBER 13, 2013 ~ VBDIAZ

G.R. No. 110399 August 15, 1997

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L.

PONCE, President V. HONORABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS

UNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE DANILO L. REYNANTE

IN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL CORPORATION

FACTS:

Petitioner union filed before DOLE a Petition for Direct Certification or Certification

Election among the supervisors and exempt employees of the SMC Magnolia Poultry

Products Plants of Cabuyao, San Fernando and Otis.

Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification

election among the abovementioned employees of the different plants as one bargaining

unit.

San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal,

pointing out, among others, the Med-Arbiters error in grouping together all three (3)

separate plants, into one bargaining unit, and in including supervisory levels 3 and above

whose positions are confidential in nature.

The public respondent, Undersecretary Laguesma, granted respondent companys

Appeal and ordered the remand of the case to the Med-Arbiter of origin for determination of

the true classification of each of the employees sought to be included in the appropriate

bargaining unit.

Upon petitioner-unions motion, Undersecretary Laguesma granted the

reconsideration prayed for and directed the conduct of separate certification elections

among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt

employees in each of the three plants at Cabuyao, San Fernando and Otis.

ISSUE:

1. Whether Supervisory employees 3 and 4 and the exempt employees of the company

are considered confidential employees, hence ineligible from joining a union.

 2. If they are not confidential employees, do the employees of the three plants constitute

an appropriate single bargaining unit.

RULING:

(1) On the first issue, this Court rules that said employees do not fall within the term

confidential employees who may be prohibited from joining a union.

They are not qualified to be classified as managerial employees who, under Article 245 of

the Labor Code, are not eligible to join, assist or form any labor organization. In the very

same provision, they are not allowed membership in a labor organization of the rank-and-

file employees but may join, assist or form separate labor organizations of their own.

Confidential employees are those who (1) assist or act in a confidential capacity, (2) to

persons who formulate, determine, and effectuate management policies in the field of labor

relations. The two criteria are cumulative, and both must be met if an employee is to be

considered a confidential employee that is, the confidential relationship must exist

between the employee and his supervisor, and the supervisor must handle the prescribed

responsibilities relating to labor relations.

The exclusion from bargaining units of employees who, in the normal course of their duties,

become aware of management policies relating to labor relations is a principal objective

sought to be accomplished by the confidential employee rule. The broad rationale behind

this rule is that employees should not be placed in a position involving a potential conflict

of interests. Management should not be required to handle labor relations matters through

employees who are represented by the union with which the company is required to deal

and who in the normal performance of their duties may obtain advance information of the

companys position with regard to contract negotiations, the disposition of grievances, or

other labor relations matters.

The Court held that if these managerial employees would belong to or be affiliated with a

Union, the latter might not be assured of their loyalty to the Union in view of evident

conflict of interest. The Union can also become company-dominated with the presence of

managerial employees in Union membership.

An important element of the confidential employee rule is the employees need to use labor

relations information. Thus, in determining the confidentiality of certain employees, a key

question frequently considered is the employees necessary access to confidential labor

relations information.

(2) The fact that the three plants are located in three different places, namely, in Cabuyao,

Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial.

Geographical location can be completely disregarded if the communal or mutual interests of

the employees are not sacrificed.

An appropriate bargaining unit may be defined as a group of employees of a given

employer, comprised of all or less than all of the entire body of employees, which the

collective interest of all the employees, consistent with equity to the employer, indicate to be

best suited to serve the reciprocal rights and duties of the parties under the collective

bargaining provisions of the law.

A unit to be appropriate must effect a grouping of employees who have substantial, mutual

interests in wages, hours, working conditions and other subjects of collective bargaining.

TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED v. TAGAYTAY

HIGHLANDS EMPLOYEES UNION-PGTWO G.R. No. 142000 January 22, 2003 CARPIO

MORALES, J: GROUNDS FOR CANCELLATION OF UNION REGISTRATION

DOCTRINE: After a certificate of registration is issued to a union, its legal personality

cannot be subject to collateral attack. It may be questioned only in an independent petition

for cancellation in accordance with Section 5 of Rule V, Book IV of the "Rules to Implement

the Labor Code." The grounds for cancellation of union registration are provided for under

Article 239 of the Labor Code. The inclusion in a union of disqualified employees is not

among the grounds for cancellation, unless such inclusion is due to misrepresentation,

false statement or fraud under the circumstances enumerated in Sections (a) and (c) of

Article 139 of above-quoted Article 239 of the Labor Code. THEU, having been validly issued

a certificate of registration, should be considered to have already acquired juridical

personality which may not be assailed collaterally. As for petitioner's allegation that some of
the signatures in the petition for certification election were obtained through fraud, false

statement and misrepresentation, the proper procedure is, as reflected above, for it to file a

petition for cancellation of the certificate of registration, and not to intervene in a petition

for certification election.

FACTS:

On October 16, 1997, the Tagaytay Highlands Employees Union (THEU) Philippine

Transport and General Workers Organization (PTGWO), Local Chapter No. 776, a legitimate

labor organization said to represent majority of the rank- and-file employees of Tagaytay

Highlands International Golf Club Incorporated (THIGCI), filed a petition for certification

election before the DOLE Mediation- Arbitration Unit, Regional Branch No. IV. THIGCI, in

its Comment, opposed THEUs petition for certification election on the ground that the list

of union members submitted by it was defective and fatally flawed as it included the names

and signatures of supervisors, resigned, terminated and absent without leave (AWOL)

employees, as well as employees of The Country Club, Inc., a corporation distinct and

separate from THIGCI; and that out of the 192 signatories to the petition, only 71 were

actual rank-and-file employees of THIGCI. THIGCI thus submitted a list of the names of its

71 actual rank-and-file employees to the petition for certification election. And it therein

incorporated a tabulation showing the number of signatories to said petition whose

membership in the union was being questioned as disqualified and the reasons for

disqualification.

THEU asserted that it complied with all the requirements for valid affiliation and

inclusion in the roster of legitimate labor organizations pursuant to DOLE Department

Order No. 9, series of 1997, on account of which it was duly granted a Certification of

Affiliation by DOLE on October 10, 1997; and that Section 5, Rule V of said Department

Order provides that the legitimacy of its registration cannot be subject to collateral attack,

and for as long as there is no final order of cancellation, it continues to enjoy the rights

accorded to a legitimate organization. Therefore, the Med-Arbiter should, pursuant to

Article 257 of the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09,

automatically order the conduct of a certification election. On January 28, 1998, DOLE

Med-Arbiter Anastacio Bactin ordered the holding of a certification election. THIGCI

appealed to the Office of the DOLE Secretary which, by Resolution of June 4, 1998, set

aside the said Med-Arbiters Order and accordingly dismissed the petition for certification

election on the ground that there is a "clear absence of community or mutuality of

interests," it finding that THEU sought to represent two separate bargaining units

(supervisory employees and rank-and- file employees) as well as employees of two separate

and distinct corporate entities. Upon Motion for Reconsideration by THEU, DOLE

Undersecretary Rosalinda Dimalipis-Baldoz, by authority of the DOLE Secretary, issued

DOLE Resolution of November 12, 1998 setting aside the June 4, 1998 Resolution

dismissing the petition for certification election. She held that since THEU is a local

chapter, the twenty percent (20%) membership requirement is not necessary for it to

acquire legitimate status, hence, "the alleged retraction and withdrawal of support by 45 of

the 70 remaining rank-and-file members . . . cannot negate the legitimacy it has already

acquired before the petition". THIGCIs Motion for Reconsideration was denied by the DOLE

Undersecretary hence it filed a petition for certiorari with the CA.

The CA denied THIGCIs Petition for Certiorari and affirmed the DOLE Resolution

dated November 12, 1998. It held that while a petition for certification election is an

exception to the innocent bystander rule, hence, the employer may pray for the dismissal of

such petition on the basis of lack of mutuality of interests of the members of the union as

well as lack of employer-employee relationship and petitioner failed to adduce substantial

evidence to support its allegations.

ISSUE:

Whether the unions legal personality can be subject to collateral attack after a

certificate of registration is issued SC RULING:

NO. Petition is DENIED, and the records of the case are remanded to the office of

origin. While above-quoted Article 245 expressly prohibits supervisory employees from

joining a rank-and-file union, it does not provide what would be the effect if a rank-and-file

union counts supervisory employees among its members, or vice-versa. Citing Toyota which

held that "a labor organization composed of both rank-and-file and supervisory employees

is no labor organization at all," and the subsequent case of Progressive Development Corp.

Pizza Hut v. Ledesma20 which held that: "The Labor Code requires that in organized and
unorganized establishments, a petition for certification election must be filed by a legitimate

labor organization. The acquisition of rights by any union or labor organization, particularly

the right to file a petition for certification election, first and foremost, depends onwhether or

not the labor organization has attained the status of a legitimate labor organization. In the

case before us, the Med-Arbiter summarily disregarded the petitioners prayer that the

former look into the legitimacy of the respondent Union by a sweeping declaration that the

union was in the possession of a charter certificate so that for all intents and purposes,

Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate organization,"21 (Underscoring

and emphasis supplied). We also do not agree with the ruling of the respondent Secretary of

Labor that the infirmity in the membership of the respondent union ca n b e re m e d ie d

in "the pr e - el ect i on con f er en ce thru the exclusioninclusion proceedings wherein

those employees who are occupying rank-and-file positions will be excluded from the list of

eligible voters." After a certificate of registration is issued to a union, its legal personality

cannot be subject to collateral attack. It may be questioned only in an independent petition

for cancellation in accordance with Section 5 of Rule V, Book IV of the "Rules to Implement

the Labor Code" (Implementing Rules) which section reads: Sec. 5. Effect of registration.

The labor organization or workers association shall be deemed registered and vested with

legal personality on the date of issuance of its certificate of registration. Such legal

personality cannot thereafter be subject to collateral attack, but may be questioned only in

an independent petition for cancellation in accordance with these Rules. (Emphasis

supplied) The inclusion in a union of disqualified employees is not among the grounds for

cancellation, unless such inclusion is due to misrepresentation, false statement or fraud

under the circumstances enumerated in Sections (a) and (c) of Article 239 of above-quoted

Article 239 of the Labor Code. THEU, having been validly issued a certificate of registration,

should be considered to have already acquired juridical personality which may not be

assailed collaterally. As for petitioners allegation that some of the signatures in the petition

for certification election were obtained through fraud, false statement and

misrepresentation, the proper procedure is, as reflected above, for it to file a petition for

cancellation of the certificate of registration, and not to intervene in a petition for

certification election.
 Regarding the alleged withdrawal of union members from participating in the

certification election, this Courts following ruling is instructive: "[T]he best forum for

determining whether there were indeed retractions from some of the laborers is in

thecertification election itself wherein the workers can freely express their choice in a secret

ballot. Suffice it to say that the will of the rank-and-file employees should in every possible

instance be determined by secret ballot rather than by administrative or quasi-judicial

inquiry. Such representation and certification election cases are not to be taken as

contentious litigations for suits but as mere investigations of a non-adversary, fact-finding

character as to which of the competing unions represents the genuine choice of the workers

to be their sole and exclusive collective bargaining representative with their employer." As

for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie

given, as found by the court a quo, its failure to present substantial evidence that the

assailed employees are actually occupying supervisory positions. While petitioner submitted

a list of its employees with their corresponding job titles and ranks, there is nothing

mentioned about the supervisors respective duties, powers and prerogatives that would

show that they can effectively recommend managerial actions which require the use of

independent judgment. As this Court put it in Pepsi-Cola Products Philippines, Inc. v.

Secretary of Labor: Designation should be reconciled with the actual job description of

subject employees x x x The mere fact that an employee is designated manager does not

necessarily make him one. Otherwise, there would be an absurd situation where one can

be given the title just to be deprived of the right to be a member of a union. In the case of

National Steel Corporation vs. Laguesma (G. R. No. 103743, January 29, 1996), it was

stressed that: What is essential is the nature of the employees function and not the

nomenclature or titlegiven to the job which determines whether the employee has rank-and-

file or managerial status or whether he is a supervisory employee. (Emphasis supplied).

G.R. No. L-25291January 30, 1971

THE INSULAR LIFE ASSURANCE CO., LTD., EMPLOYEES ASSOCIATION-NATU, FGU

INSURANCE GROUP WORKERS and EMPLOYEES ASSOCIATION-NATU, and INSULAR

LIFE BUILDING EMPLOYEES ASSOCIATION-NATU, petitioners,

vs.

THE INSULAR LIFE ASSURANCE CO., LTD., FGU INSURANCE GROUP, JOSE M. OLBES

and COURT OF INDUSTRIAL RELATIONS, respondents.

Facts:

The Insular Life Assurance Co., Ltd., Employees Association-NATU, FGU Insurance

Group Workers & Employees Association-NATU, and Insular Life Building Employees
Association-NATU (hereinafter referred to as the Unions), while still members of the

Federation of Free Workers (FFW), entered into separate collective bargaining

agreements with the Insular Life Assurance Co., Ltd. and the FGU Insurance Group

(hereinafter referred to as the Companies).

Two of the lawyers of the Unions then were Felipe Enaje and Ramon Garcia; the latter

was formerly the secretary-treasurer of the FFW and acting president of the unions.

Garcia, as such acting president, in a circular issued in his name and signed by him,

tried to dissuade the members of the Unions from disaffiliating with the FFW and

joining the National Association of Trade Unions (NATU), to no avail. The two left the

FFW and were employed with the Anti-Dummy Board of DOJ. Unions jointly

submitted proposals to the Companies but these were snagged by a deadlock on the

issue of union shop, hence, filed a notice of strike and was dropped subsequently.

Meanwhile, eighty-seven unionists were reclassified as supervisors without increase

in salary nor in responsibility. These employees resigned from the Unions.

Strikers were given letters by the companies but still continued except those

convinced to desist. Some management men tried to break thru, it was successful

but caused injury to the management. Hence, companies filed for criminal charges

however it was dismissed except 3 involving some light injuries.

 At any rate, because of the issuance of writ of prelim. injunction, the employees

report back to work. However the 83 strikers were initially rejected, the rest were

admitted.

CIR prosecutor filed a complaint for unfair labor practice against the Companies

alleging that they interfere with the members of the Unions in the exercise of their

right to concerted action, by sending out individual letters to abandon their strike

and return to work, with a promise of some stated benefits and, subsequently, by

warning them that they might be replaced; and discriminating against the members

of the Unions as regards readmission to work after the strike on the basis of their

union membership and degree of participation in the strike.

Issue:

WON the respondent company committed unfair labor practice for the dismissal of the

union members exercising their right to strike.

Held:

Yes. All the above-detailed activities are unfair labor practices because they tend to

undermine the concerted activity of the employees, an activity to which they are entitled

free from the employers molestation. Although the union is on strike, the employer is still

under obligation to bargain with the union as the employees bargaining representative.

Indeed, when the respondents offered reinstatement and attempted to bribe the strikers ,

so they would abandon the strike and return to work, they were guilty of strike-breaking

and/or union-busting and, consequently, of unfair labor practice. It is equivalent to an

attempt to break a strike for an employer to offer reinstatement to striking employees

individually, when they are represented by a union, since the employees thus offered

reinstatement are unable to determine what the consequences of returning to work would

be.

The record shows that not a single dismissed striker was given the opportunity to defend

himself against the supposed charges against him. As earlier mentioned, when the striking

employees reported back for work, the respondents refused to readmit them unless they

first secured the necessary clearances; but when all, except three, were able to secure and
subsequently present the required clearances, the respondents still refused to take them

back.

Indeed, the individual cases of dismissed officers and members of the striking unions

do not indicate sufficient basis for dismissal. petition was reversed and set aside.

Hacienda Fatima v. National Federation Digest

Hacienda Fatima v. National Federation

Facts:

The petitioner disfavored the fact that the private respondent employees have formed

a union. When the union became the collective bargaining representative in the certification

election, the petitioner refused to sit down to negotiate a CBA. Moreover, the respondents

were not given work for a month amounting to unjustified dismissal. As a result, the

complainants staged a strike to protest but was settled through a memorandum of

agreement which contained a list of those considered as regular employees for the payroll.

The NLRC held that there was illegal dismissal and this was affirmed by the Court of

Appeals.

Issue:

W/N the employees are regular workers

RULING:

Yes, they are regular and not seasonal employees. For them to be excluded as

regulars, it is not enough that they perform work that is seasonal in nature but they also

are employed for the duration of one season. The evidence only proved the first but not the

second requirement.

The ruling in Mercado v. NLRC is not applicable since in that case, the workers were

merely required to perform phases of agricultural work for a definite period of time, after

which, their services are available to other employers. The management's sudden change of

assignment reeks of bad faith, it is likewise guilty of ULP.

MERALCO VS QUISUMBING

GRN 127598 JANUARY 27, 1999

YNARES-SANTIAGO, J:.

FACTS:

The court directed the parties to execute a CBA incorporating the terms among which

are the following modifications among others: Wages: PhP 1,900 for 1995-1996;

Retroactivity: December 28, 1996-Dec. 1999, etc. Dissatisfied, some members of the union

filed a motion for intervention/reconsideration. Petitioner warns that is the wage increase of

Php2,000.00 per month as ordered is allowed, it would pass the cost covering such increase

to the consumers through an increase rate of electricity. On the retroactivity of the CBA

arbitral award, the parties reckon the period as when retroaction shall commence.

ISSUE:

Whether or not retroactivity of arbitral awards shall commence at such time as

granted by Secretary.

RULING:

In St. Lukes Medical vs Torres, a deadlock developed during CBA negotiations

between management unions. The Secretary assumed jurisdiction and ordered the

retroaction of the CBA to the date of expiration of the previous CBS. The Court ratiocinated

thus: In the absence of a specific provision of law prohibiting retroactive of the effectivity of

arbitral awards issued by the Secretary pursuant to article 263(g) of the Labor Code, public

respondent is deemed vested with the plenary and discretionary powers to determine the

effectivity thereof.

In general, a CBA negotiated within six months after the expiration of the existing CBA

retroacts to the day immediately following such date and if agreed thereafter, the effectivity

depends on the agreement of the parties. On the other hand, the law is silent as to the

retroactivity of a CBA arbitral award or that granted not by virtue of the mutual agreement
of the parties but by intervention of the government. In the absence of a CBA, the

Secretarys determination of the date of retroactivity as part of his discretionary powers over

arbitral awards shall control.

Wherefore, the arbitral award shall retroact from December 1, 1995 to November 30,

1997; and the award of wage is increased from Php1,900 to Php2,000.

Mabeza vs NLRC () 271 SCRA 670

Facts:

Petitioner Norma Mabeza contends that on the first week of May 1991, she and her

coemployees at the Hotel Supreme in Baguio City were asked by the hotel's management to

sign an instrument attesting to the latter's compliance with minimum wage and other labor

standard provisions of law. Petitioner signed the affidavit but refused to go to the City

Prosecutor's Office to swear to the veracity and contents of the affidavit as instructed by

management. The affidavit was nevertheless submitted on the same day to the Regional

Office of the Department of Labor and Employment in Baguio City. The affidavit was drawn

by management for the sole purpose of refuting findings of the Labor Inspector of DOLE

apparently adverse to the private respondent. After she refused to proceed to the City

Prosecutor's Office, petitioner states that she was ordered by the hotel management to turn

over the keys to her living quarters and to remove her belongings from the hotel premises.

According to her, respondent strongly chided her for refusing to proceed to the City

Prosecutor's Office to attest to the affidavit. She thereafter reluctantly filed a leave of

absence from her job which was denied by management. When she attempted to return to

work on May 1991, the hotel's cashier informed her that she should not report to work and,

instead, continue with her unofficial leave of absence. Consequently, three days after her

attempt to return to work, petitioner filed a complaint for illegal dismissal before the

Arbitration Branch of the National Labor Relations Commission CAR Baguio City. In

addition to her complaint for illegal dismissal, she alleged underpayment of wages, non-

payment of holiday pay, service incentive leave pay, 13th month pay, night differential and

other benefits. Responding to the allegations for illegal dismissal, private respondent Peter

Ng alleged before Labor Arbiter that petitioner surreptitiously left her job without notice to
the management and that she actually abandoned her work. He maintained that there was

no basis for the money claims for underpayment and other benefits as these were paid in

the form of facilities to petitioner and the hotel's other employees. Labor Arbiter dismissed

the complaint. On April 1994, respondent NLRC promulgated its assailed Resolution

affirming the Labor Arbiter's decision.

Issue:

WON the employers exerted pressure, in the form of restraint, interference or

coercion, against his employee's right to institute concerted action for better terms and

conditions of employment constitutes unfair labor practice.

Held:

The Court ruled that there was unfair labor practice. Without doubt, the act of

compelling employees to sign an instrument indicating that the employer observed labor

standards provisions of law when he might have not, together with the act of terminating or

coercing those who refuse to cooperate with the employer's scheme constitutes unfair labor

practice. The first act clearly preempts the right of the hotel's workers to seek better terms

and conditions of employment through concerted action. For refusing to cooperate with the

private respondent's scheme, petitioner was obviously held up as an example to all of the

hotel's employees, that they could only cause trouble to management at great personal

inconvenience. Implicit in the act of petitioner's termination and the subsequent filing of

charges against her was the warning that they would not only be deprived of their means of

livelihood, but also possibly, their personal liberty. Granting that meals and lodging were

provided and indeed constituted facilities, such facilities could not be deducted without the

employer complying first with certain legal requirements. Without satisfying these

requirements, the employer simply cannot deduct the value from the employee's wages.

First, proof must be shown that such facilities are customarily furnished by the trade.

Second, the provision of deductible facilities must be voluntarily accepted in writing by the

employee. Finally, facilities must be charged at fair and reasonable value. These

requirements were not met in the instant case. More significantly, the food and lodging, or

the electricity and water consumed by the petitioner were not facilities but supplements. A

benefit or privilege granted to an employee for the convenience of the employer is not a
facility. The criterion in making a distinction between the two not so much lies in the kind

(food, lodging) but the purpose. Considering that hotel workers are required to work

different shifts and are expected to be available at various odd hours, their ready

availability is a necessary matter in the operations of a small hotel, such as the private

respondent's hotel.

Labor Relations Case Digest: Complex Electric V. NLRC (1999) G.R. No. 121315 July

19, 1999

G.R. No. 121315 July 19, 1999

Lessons Applicable: Unfair Labor Practice

Laws Applicable:

FACTS:

Complex Electronics Corporation was engaged in the manufacture of electronic

products. It was actually a subcontractor of electronic products where its customers gave

their job orders, sent their own materials and consigned their equipment to it.

The rank and file workers of Complex were organized into a union known as the

Complex Electronics Employees Association

Complex received a facsimile message from Lite-On Philippines Electronics Co.,

requiring it to lower its price by 10%.

o Complex informed its Lite-On personnel that such request of lowering their selling price

by 10% was not feasible as they were already incurring losses at the present prices of their

products.

o Complex regretfully informed the employees that it was left with no alternative but to

close down the operations of the Lite-On Line

retrenchment will not take place until after 1 month

try to prolong the work for as many people as possible for as long as it can

retrenchment pay as provided for by law i.e. half a month for every year of service in

accordance with Article 283 of the Labor Code of Philippines.

 Complex filed a notice of closure of the Lite-On Line with the Department of Labor

and Employment (DOLE) and the retrenchment of the ninety-seven (97) affected employees.

Union filed a notice of strike with the National Conciliation and Mediation Board

In the evening of April 6, 1992, the machinery, equipment and materials being used

for production at Complex were pulled-out from the company premises and transferred to

the premises of Ionics Circuit, Inc. (Ionics) at Cabuyao, Laguna.

o Fearful that the machinery, equipment and materials would be rendered inoperative and

unproductive due to the impending strike of the workers, the customers ordered their pull-

out and transfer to Ionics.

o Complex was compelled to cease operations

o Ionics contended that it was an entity separate and distinct from Complex and had been

in existence since July 5, 1984 or eight (8) years before the labor dispute arose at Complex.

Like Complex, it was also engaged in the semi-conductor business where the machinery,

equipment and materials were consigned to them by their customers

o President of Complex was also the President of Ionics, the latter denied having Qua as

their owner since he had no recorded subscription of P1,200,00.00 in Ionics as claimed by

the Union. Ionics further argued that the hiring of some displaced workers of Complex was

an exercise of management prerogatives.

complaint was, thereafter, filed with the Labor Arbitration Branch of the NLRC for

unfair labor practice, illegal closure/illegal lockout, money claims for vacation leave, sick

leave, unpaid wages, 13th month pay, damages and attorney's fees. The Union alleged that

the pull-out of the machinery, equipment and materials from the company premises, which

resulted to the sudden closure of the company was in violation of Section 3 and 8, Rule

XIII, Book V of the Labor Code of the Philippines and the existing CBA

Labor Arbiter: reinstate the 531 above-listed employees to their former position;

charge of slowdown strike filed by respondent Complex against the union is hereby

dismissed for lack of merit.

NLRC: pay 531 complainants equivalent to one month pay in lieu of notice and

separation pay equivalent to one month pay for every year of service and a fraction of six

months considered as one whole year.

ISSUE: W/N there was ULP

HELD:

NO.

A "runaway shop" is defined as an industrial plant moved by its owners from one

location to another to escape union labor regulations or state laws, but the term is also

used to describe a plant removed to a new location in order to discriminate against

employees at the old plant because of their union activities.

o It is one wherein the employer moves its business to another location or it temporarily

closes its business for anti-union purposes

o relocation motivated by anti-union animus rather than for business reasons

o Ionics was not set up merely for the purpose of transferring the business of Complex. At

the time the labor dispute arose at Complex, Ionics was already existing as an independent

company.

o The Union failed to show that the primary reason for the closure of the establishment

was due to the union activities of the employees.

o The mere fact that one or more corporations are owned or controlled by the same or

single stockholder is not a sufficient ground for disregarding separate corporate

personalities.

No illegal lockout/illegal dismissal

o closure, therefore, was not motivated by the union activities of the employees, but rather

by necessity since it can no longer engage in production without the much needed

materials, equipment and machinery.

o The determination to cease operation is a prerogative of management that is usually not

interfered with by the State as no employer can be required to continue operating at a loss

simply to maintain the workers in employment.

personal liability of Lawrence Qua- absence of malice or bad faith, a stockholder or

an officer of a corporation cannot be made personally liable for corporate liabilities.

We see no valid and cogent reason why petitioner should not be likewise sanctioned

for its failure to serve the mandatory written notice. Under the attendant facts, we find the

amount of P5,000.00, to be just and reasonable.

176. Standard Chartered Bank Employees Union vs Confessor

Facts:Bank and the Union signed a five-year collective bargaining agreement (CBA) with a

provision to renegotiate the terms thereof on the third year. Prior to the expiration of the

three-year period but within the sixty-day freedom period, the Union initiated the

negotiations. On February 18, 1993, the Union, through its President, Eddie L.

Divinagracia, sent a letter containing its proposals covering political provisions and thirty-

four (34) economic provisions. The Bank attached its counter-proposal to the non-economic

provisions proposed by the Union. The Bank posited that it would be in a better position to

present its counter-proposals on the economic items after the Union had presented its

justifications for the economic proposals.

Before the commencement of the negotiation, the Union, through Divinagracia, suggested to

the Banks Human Resource Manager and head of the negotiating panel, Cielito Diokno,

that the bank lawyers should be excluded from the negotiating team. The Bank acceded.

Meanwhile, Diokno suggested to Divinagracia that Jose P. Umali, Jr., the President of the

National Union of Bank Employees (NUBE), the federation to which the Union was affiliated,

be excluded from the Unions negotiating panel. However, Umali was retained as a member

thereof.

Except for the provisions on signing bonus and uniforms, the Union and the Bank failed to

agree on the remaining economic provisions of the CBA. The Union declared a deadlock. On

the other hand, the Bank filed a complaint for Unfair Labor Practice (ULP) and Damages

before the Arbitration Branch of the National Labor Relations Commission (NLRC) in

Manila. It contended that the Union demanded "sky high economic demands," indicative of

blue-sky bargaining. Further, the Union violated its no strike- no lockout clause by filing a

notice of strike before the NCMB. Considering that the filing of notice of strike was an illegal

act, the Union officers should be dismissed.

Issue: Whether or not the Union was able to substantiate its claim of unfair labor practice

against the Bank arising from the latters alleged interference with its choice of negotiator;

surface bargaining; making bad faith non-economic proposals; and refusal to furnish the

Union with copies of the relevant data;

Ruling: ART. 243. COVERAGE AND EMPLOYEES RIGHT TO SELF-ORGANIZATION. All

persons employed in commercial, industrial and agricultural enterprises and in religious,

charitable, medical or educational institutions whether operating for profit or not, shall

have the right to self-organization and to form, join, or assist labor organizations of their

own choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant

workers, self-employed people, rural workers and those without any definite employers may

form labor organizations for their mutual aid and protection.

Article 248(a) of the Labor Code, considers it an unfair labor practice when an employer

interferes, restrains or coerces employees in the exercise of their right to self-organization or

the right to form association. The right to self-organization necessarily includes the right to

collective bargaining. Parenthetically, if an employer interferes in the selection of its

negotiators or coerces the Union to exclude from its panel of negotiators a representative of

the Union, and if it can be inferred that the employer adopted the said act to yield adverse

effects on the free exercise to right to self-organization or on the right to collective

bargaining of the employees, ULP under Article 248(a) in connection with Article 243 of the

Labor Code is committed. In order to show that the employer committed ULP under the

Labor Code, substantial evidence is required to support the claim. Substantial evidence has

been defined as such relevant evidence as a reasonable mind might accept as adequate to

support a conclusion.

The circumstances that occurred during the negotiation do not show that the suggestion

made by Diokno to Divinagracia is an anti-union conduct from which it can be inferred that

the Bank consciously adopted such act to yield adverse effects on the free exercise of the

right to self-organization and collective bargaining of the employees, especially considering

that such was undertaken previous to the commencement of the negotiation and

simultaneously with Divinagracias suggestion that the bank lawyers be excluded from its

negotiating panel. It is clear that such ULP charge was merely an afterthought. The

accusation occurred after the arguments and differences over the economic provisions

became heated and the parties had become frustrated.

The Duty to Bargain Collectively

Surface bargaining is defined as going through the motions of negotiating without any

legal intent to reach an agreement. The Union has not been able to show that the Bank had

done acts, both at and away from the bargaining table, which tend to show that it did not

want to reach an agreement with the Union or to settle the differences between it and

the Union. Admittedly, the parties were not able to agree and reached a

deadlock. However, it is herein emphasized that the duty to bargain does not compel

either party to agree to a proposal or require the making of a concession. Hence, the

parties failure to agree did not amount to ULP under Article 248(g) for violation of the duty

to bargain.

Estoppel not Applicable In the Case at Bar

The approval of the CBA and the release of signing bonus do not necessarily mean that

the Union waived its ULP claim against the Bank during the past negotiations. After all,

the conclusion of the CBA was included in the order of the SOLE, while the signing bonus

was included in the CBA itself.

The Union Did Not Engage In Blue-Sky Bargaining

The Bank failed to show that the economic demands made by the Union were exaggerated

or unreasonable. The minutes of the meeting show that the Union based its economic

proposals on data of rank and file employees and the prevailing economic benefits received

by bank employees from other foreign banks doing business in the Philippines and other

branches of the Bank in the Asian region.

In sum, we find that the public respondent did not act with grave abuse of discretion

amounting to lack or excess of jurisdiction when it issued the questioned order and

resolutions. While the approval of the CBA and the release of the signing bonus did not

estop the Union from pursuing its claims of ULP against the Bank, we find that the latter

did not engage in ULP. We, likewise, hold that the Union is not guilty of ULP.

GENERAL MILLING CORPORATION vs HON. COURT OF APPEALS, GENERAL MILLING

CORPORATION INDEPENDENT LABOR UNION (GMC-ILU), and RITO MANGUBAT

G.R. No. 146728 February 11, 2004

FACTS: In its two plants located at Cebu City and Lapu-Lapu City, petitioner General

Milling Corporation (GMC) employed 190 workers. They were all members of private

respondent General Milling Corporation Independent Labor Union. On April 28, 1989, GMC

and the union concluded a collective bargaining agreement (CBA) which included the issue

of representation effective for a term of three years. The day before the expiration of the

CBA, the union sent GMC a proposed CBA, with a request that a counter-proposal be

submitted within ten (10) days. However, GMC had received collective and individual letters

from workers who stated that they had withdrawn from their union membership, on

grounds of religious affiliation and personal differences. Believing that the union no longer

had standing to negotiate a CBA, GMC did not send any counter-proposal.

On December 16, 1991, GMC wrote a letter to the unions officers, Rito Mangubat and

Victor Lastimoso. The letter stated that it felt there was no basis to negotiate with a union

which no longer existed, but that management was nonetheless always willing to dialogue

with them on matters of common concern and was open to suggestions on how the

company may improve its operations. In answer, the union officers wrote a letter dated

December 19, 1991 disclaiming any massive disaffiliation or resignation from the union

and submitted a manifesto, signed by its members, stating that they had not withdrawn

from the union.

NLRC held that the action of GMC in not negotiating was ULP.
ISSUE: WON the company (GMC) should have entered into collective bargaining with the

union

HELD: The law mandates that the representation provision of a CBA should last for

five years. The relation between labor and management should be undisturbed until the

last 60 days of the fifth year. Hence, it is indisputable that when the union requested for

a renegotiation of the economic terms of the CBA on November 29, 1991, it was still the

certified collective bargaining agent of the workers, because it was seeking said

renegotiation within five (5) years from the date of effectivity of the CBA on

December 1, 1988. The unions proposal was also submitted within the prescribed 3-

year period from the date of effectivity of the CBA, albeit just before the last day of

said period. It was obvious that GMC had no valid reason to refuse to negotiate in good

faith with the union. For refusing to send a counter-proposal to the union and to bargain

anew on the economic terms of the CBA, the company committed an unfair labor practice

under Article 248 of the Labor Code.

ART. 253-A. Terms of a collective bargaining agreement. Any Collective Bargaining

Agreement that the parties may enter into shall, insofar as the representation aspect is

concerned, be for a term of five (5) years. No petition questioning the majority status of

the incumbent bargaining agent shall be entertained and no certification election shall be

conducted by the Department of Labor and Employment outside of the sixty-day period

immediately before the date of expiry of such five year term of the Collective Bargaining

Agreement. All other provisions of the Collective Bargaining Agreement shall be

renegotiated not later than three (3) years after its execution.

ART. 248. Unfair labor practices of employers. It shall be unlawful for an employer to

commit any of the following unfair labor practice:

(g) To violate the duty to bargain collectively as prescribed by this Code;

Under Article 252 abovecited, both parties are required to perform their mutual obligation

to meet and convene promptly and expeditiously in good faith for the purpose of negotiating

an agreement. The union lived up to this obligation when it presented proposals for a new

CBA to GMC within three (3) years from the effectivity of the original CBA. But GMC failed
in its duty under Article 252. What it did was to devise a flimsy excuse, by questioning the

existence of the union and the status of its membership to prevent any negotiation.

ART. 250. Procedure in collective bargaining. The following procedures shall be

observed in collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the

other party with a statement of its proposals. The other party shall make a reply thereto not

later than ten (10) calendar days from receipt of such notice.

GMCs failure to make a timely reply to the proposals presented by the union is indicative of

its utter lack of interest in bargaining with the union. Its excuse that it felt the union no

longer represented the workers, was mainly dilatory as it turned out to be utterly baseless.

Failing to comply with the mandatory obligation to submit a reply to the unions proposals,

GMC violated its duty to bargain collectively, making it liable for unfair labor practice.

UST FACULTY UNION v. UNIVERSITY OF SANTO TOMAS, ET AL G.R. No. 180892 April

7, 2009 VELASCO, JR., J.: DOCTRINE: The onus probandi falls on the shoulders of

petitioner to establish or substantiate such claims by the requisite quantum of evidence. In

labor cases as in other administrative proceedings, substantial evidence or such relevant

evidence as a reasonable mind might accept as sufficient to support a conclusion is

required. In the petition at bar, petitioner miserably failed to adduce substantial evidence as

basis for the grant of relief.

FACTS:

University of Santo Tomas Faculty Union (USTFU) wrote a letter to all its members

informing them of a General Assembly (GA) that was to be held on October 5, 1996. The

then incumbent president of the USTFU was Atty. Eduardo J. Mario, Jr. The letter

contained an agenda for the GA which included an election of officers. Secretary General of

the UST, issued a Memorandum allowing the request of the Faculty Clubs of the university

to hold a convocation. Members of the faculties of the university attended the convocation,

including members of the USTFU, without the participation of the members of the UST
administration. During the convocation, an election for the officers of the USTFU was

conducted by a group called the Reformist Alliance. Upon learning that the convocation was

intended to be an election, members of the USTFU walked out. Meanwhile, an election was

conducted among those present. Gil Gamilla and other faculty members (Gamilla Group)

were elected as the president and officers, respectively, of the union. Thus, there were two

(2) groups claiming to be the USTFU: the Gamilla Group and the group led by Atty. Mario,

Jr. (Mario Group). Mario Group filed a complaint for ULP against the UST with the

Arbitration Branch. It also filed a complaint with the Office of the Med-Arbiter of the

Department of Labor and Employment (DOLE), praying for the nullification of the election

of the Gamilla Group as officers of the USTFU. Collective Bargaining Agreement (CBA) was

entered into by the Gamilla Group and the UST. The CBA superseded an existing CBA

entered into by the UST and USTFU Gamilla, accompanied by the barangay captain in the

area padlocked the office of the USTFU. Afterwards, an armed security guard of the UST

was posted in front of the USTFU office.

MED-ARBITER: election of the Gamilla group as null and void and ordering that this group

cease and desist from performing the duties and responsibilities of USTFU officers.

ARBITRATION BRANCH: dismissed the complaint for lack of merit. The acts of UST which

USTFU complained of as ULP were the following: (1) allegedly calling for a convocation of

faculty members which turned out to be an election of officers for the faculty union; (2)

subsequently dealing with the Gamilla Group in establishing a new CBA; and (3) the

assistance to the Gamilla Group in padlocking the USTFU office. LABOR ARBITERS

RULING: He explained that the alleged Memorandum dated October 2, 1996 merely granted

the request of faculty members to hold such convocation. By USTFUs own admission, no

member of the UST administration attended or participated in the convocation. As to the

CBA, the labor arbiter ruled that when the new CBA was entered into, (1) the Gamilla

Group presented more than sufficient evidence to establish that they had been duly elected

as officers of the USTFU; and (2) the ruling of the med-arbiter that the election of the

Gamilla Group was null and void was not yet final and executory.

ISSUE:
 Whether herein respondents are guilty of Unfair Labor Practice despite abundance of

evidence showing that Unfair Labor Practices were indeed committed.

SC RULING:

No. UST is not guilty of ULP. Petitioner claims that respondents violated paragraphs

(a) and (d) of Art. 248 of the Code which provide: Article 248. Unfair labor practices of

employers.It shall be unlawful for an employer to commit any of the following unfair labor

practices: (a) To interfere with, restrain or coerce employees in the exercise of their right to

self-organization; x x x x (d) To initiate, dominate, assist or otherwise interfere with the

formation or administration of any labor organization, including the giving of financial or

other support to it or its organizers or supporters. The general principle is that one who

makes an allegation has the burden of proving it. While there are exceptions to this general

rule, in the case of ULP, the alleging party has the burden of proving such ULP. Such

principle finds justification in the fact that ULP is punishable with both civil and/or

criminal sanctions In order to show that the employer committed ULP under the Labor

Code, substantial evidence is required to support the claim. Substantial evidence has been

defined as such relevant evidence as a reasonable mind might accept as adequate to

support a conclusion. In no way can the contents of the memorandum be interpreted to

mean that faculty members were required to attend the convocation. Not one coercive term

was used in the memorandum to show that the faculty club members were compelled to

attend such convocation. And the phrase "we are allowing them to hold a convocation"

negates any idea that the UST would participate in the proceedings. The Gamilla Group

was not validly elected into office, there was no reason to believe that the members of the

Gamilla Group were not the validly elected officers and directors of USTFU. As to the

padlocking of the USTFU office, it must be emphasized that based on the Certification of

Sibug, Cardenas was merely present, with Brgy. Captain, at the padlocking of the USTFU

office. The Certification also stated that Sibug himself also padlocked the USTFU office and

that he was neither harassed nor coerced by the padlocking group. Clearly, Cardenas mere

presence cannot be equated to a positive act of "aiding" the Gamilla Group in securing the

USTFU office. Petitioner, however, fails to enumerate such objectionable actions of the UST.

Again, petitioner fails to present substantial evidence in support of its claim.

Malayang Samahan ng mga Manggagawa sa M. Greenfield (MSMGOUWP) v. Ramos,

NLRC [G.R. No. 113907, February 28, 2000]

FACTS:

Petitioner MSMS, (local union) is an affiliate of ULGWP (federation). A local union

election was held under the action of the federation. The defeated candidates filed a petition

for impeachment. The local union held a general membership meeting. Several union

members failed to attend the meeting. The local union requested the company to deduct the

union fines from the wage of those union members who failed to attend the general

membership meeting. The Secretary General of the federation disapproved the resolution

imposing the Php50 fine. The company then sent a reply to petitioners request stating it

cannot deduct fines without going against certain laws. The imposition of the fine became

the subject of a bitter disagreement between the Federation and the local union

culminating to the latters declaration of general autonomy from the former. The federation

asked the company to stop the remittance of the local unions share in the education funds.

The company led a complaint of interpleader with the DOLE. The federation called a

meeting placing the local union under trusteeship and appointing an administrator.

Petitioner union officers received letters from the administrator requiring them to explain

why they should not be removed from the office and expelled from union membership. The

officers were expelled from the federation. The federation advised the company of the

expulsion of the 30 union officers and demanded their separation pursuant to the Union

Security Clause in the CBA. The Federation filed a notice of strike with the NCMB to compel

the company to effect the immediate termination of the expelled union officers. Under the

pressure of a strike, the company terminated the 30 union officers from employment. The

petitioners filed a notice of strike on the grounds of discrimination; interference; mass

dismissal of union officers and shop stewards; threats, coercion and intimidation ; and

union busting. The petitioners prayed for the suspension of the effects of their termination.

Secretary Drilon dismissed the petition stating it was an intra-union matter. Later, 78

union shop stewards were placed under preventive suspension. The union members staged
a walk-out and officially declared a strike that afternoon. The strike was attended by

violence.

ISSUES:

1. Whether or not the company was illegal dismissal.

2. Whether or not the strike was illegal.

3. Whether or not petitioners can be deemed to have abandoned their work.

HELD:

1. Yes. The charges against respondent company proceeds from onemain issue the

termination of several employees upon the demand of the federation pursuant to the union

security clause. Although the union security clause may be validly enforced, such must

comply with due process. In this case, petitioner union officers were expelled for allegedly

committing acts of disloyalty to the federation. The company did not inquire into the cause

of the expulsion and merely relied upon the federations allegations. The issue is not a

purely intra-union matter as it was later on converted into a termination dispute when the

company dismissed the petitioners from work without the benefit of a separate notice and

hearing. Although it started as an intra-union dispute within the exclusive jurisdiction of

the BLR, to remand the same to the BLR would intolerably delay the case and the Labor

Arbiter could rule upon it. As to the act of disaffiliation by the local union; it is settled that

a local union has the right to disaffiliate from its mother union in the absence of specific

provisions in the federations constitution prohibiting such. There was no such provision in

federation ULGWPs constitution.

2. No. As to the legally of the strike; it was based on the termination dispute and petitioners

believed in good faith in dismissing them, the company was guilty of ULP. A no-strike, no

lockout provision in the CBA can only be invoked when the strike is economic. As to the

violence, the parties agreed that the violence was not attributed to the striking employees

alone as the company itself hired men to pacify the strikers. Such violence cannot be a

ground for declaring the strike illegal.

3. As to the dismissal of the petitioners; respondents failed to prove that there was

abandonment absent any proof of petitioners intention to sever the employee-employer

relationship.

G.R. No. 167892 October 27, 2006

ST. JOHN COLLEGES, INC., petitioner, vs. ST. JOHN ACADEMY FACULTY AND

EMPLOYEES UNIO

Petitioner St. John Colleges, Inc. (SJCI) is a domestic corporation which owns and operates

the St. Johns Academy (later renamed St. John Colleges) in Calamba, Laguna. Prior to

1998, the Academy offered a secondary course only. The high school then employed about

80 teaching and non-teaching personnel who were members of the St. John Academy

Faculty & Employees Union (Union).

CBA was set to expire

During the ensuing collective bargaining negotiations, SJCI rejected all the proposals of the

Union for an increase in workers benefits. This resulted to a bargaining deadlock which led

to the holding of a valid strike by the Union

SJCI and the Union, through the efforts of the National Conciliation and Mediation Board

(NCMB), agreed to refer the labor dispute to the Secretary of Labor and Employment (SOLE)

for assumption of jurisdiction:

After which, the strike ended and classes resumed. Subsequently, the SOLE issued an

Order dated January 19, 1998 assuming jurisdiction over the labor dispute pursuant to

Article 263 of the Labor Code

Pending resolution of the labor dispute before the SOLE, the Board of Directors of SJCI

approved on February 22, 1998 a resolution recommending the closure of the high school

which was approved by the stockholders on even date. the reason was because of the

irreconcilable differences between the school management and the Academys Union

particularly the safety of our students and the financial aspect of the ongoing CBA

negotiations.
25 employees conducted a protest action within the perimeter of the high school. The Union

filed a notice of strike with the NCMB

On May 19, 1998, SJCI filed a petition to declare the strike illegal before the NLRC which

was docketed as NLRC Case No. RAB-IV-5-10035-98-L. It claimed that the strike was

conducted in violation of the procedural requirements for holding a valid strike under the

Labor Code.

On May 21, 1998, the 25 employees filed a complaint for unfair labor practice (ULP), illegal

dismissal and non-payment of monetary benefits against SJCI before the NLRC which was

docketed as RAB-IV-5-10039-98-L. The Union members alleged that the closure of the high

school was done in bad faith in order to get rid of the Union and render useless any

decision of the SOLE on the CBA deadlocked issues.

LAbor arbiter held the strike invlid and the loss of employment of the 25 employees; he also

dismissed the unions ULP and illegal dismissal complaint after the favorable decision of the

Labor Arbiter, SJCI resolved to reopen the high school for school year 1999-2000. However,

it did not restore the high school teaching and non-teaching employees it earlier terminated.

On July 23, 1999, the SOLE denied SJCIs motions to dismiss and certified the CBA

deadlock case to the NLRC. It ordered the consolidation of the CBA deadlock case with the

ULP, illegal dismissal, and illegal strike cases which were then pending appeal before the

NLRC.

NLRC reversed the decision of the LA and held that there sa ULP illegal dismissal,and there

was no strike

CA affirmed

Issue:

1. w/n it was ULP when it closed down the school

2. w/n there was illegal strike

Held:

Petitioenr is guilty of ULP and illegal dismissal; there was no illegal strike as the

respondents were dismissed and not employers when they did the strike
Under Article 283 of the Labor Code, the following requisites must concur for a valid

closure of the business: (1) serving a written notice on the workers at least one (1) month

before the intended date thereof; (2) serving a notice with the DOLE one month before the

taking effect of the closure; (3) payment of separation pay equivalent to one (1) month or at

least one half (1/2) month pay for every year of service, whichever is higher, with a fraction

of at least six (6) months to be considered as a whole year; and (4) cessation of the

operation must be bona fide

the finding of the NLRC, which was affirmed by the Court of Appeals, that SJCI closed the

high school in bad faith is supported by substantial evidence and is, thus, binding on this

Court. Consequently, SJCI is liable for ULP and illegal dismissal.

The two decisive factors in determining whether SJCI acted in bad faith are (1) the

timing of, and reasons for the closure of the high school, and (2) the timing of, and the

reasons for the subsequent opening of a college and elementary department, and,

ultimately, the reopening of the high school department by SJCI after only one year from its

closure.

Prior to the closure of the high school by SJCI, the parties agreed to refer the 1997

CBA deadlock to the SOLE for assumption of jurisdiction under Article 263 of the Labor

Code. As a result, the strike ended and classes resumed. it closed its school allegedly

because of irreconcilable differenc between school and union and to circumvent the Unions

right to collective bargaining and its members right to security of tenure. By admitting that

the closure was due to irreconcilable differences between the Union and school

management, specifically, the financial aspect of the ongoing CBA negotiations, SJCI in

effect admitted that it wanted to end the bargaining deadlock and eliminate the problem of

dealing with the demands of the Union. This is precisely what the Labor Code abhors and

punishes as unfair labor practice since the net effect is to defeat the Unions right to

collective bargaining.

SJCI claims it had no choice but to refuse the Unions demands which thereafter led to the

holding of a strike on November 10, 1998. It argues that the Unions alleged illegal financial

demands was a valid justification for the closure of the high school considering that it was

financially incapable of meeting said demands

As already discussed,As to tSJCs contention that the demand of union is unreasonable,

neither party is obliged to give-in to the others excessive or unreasonable demands during

collective bargaining,

The Labor Code does not authorize the employer to close down the establishment on the

ground of illegal or excessive demands of the Union. Instead, aside from the remedy of

submitting the dispute for voluntary or compulsory arbitration, the employer may file a

complaint for ULP against the Union for bargaining in bad faith. If found guilty, this gives

rise to civil and criminal liabilities and allows the employer to implement a lock out, but not

the closure of the establishment resulting to the permanent loss of employment of the

whole workforce.

In fine, SJCI undermined the Labor Codes system of dispute resolution by closing down the

high school while the 1997 CBA negotiations deadlock issues were pending resolution

before the SOLE. The closure was done in bad faith for the purpose of defeating the Unions

right to collective bargaining.

he fact that after one year from the time it closed its high school, SJCI opened a college and

elementary department, and reopened its high school department showed that it never

intended to cease operating as an educational institution.

e agree with the findings of the NLRC and CA that the protest actions of the Union cannot

be considered a strike because, by then, the employer-employee relationship has long

ceased to exist because of the previous closure of the high school on March 31, 1998.

In sum, the timing of, and the reasons for the closure of the high school and its reopening

after only one year from the time it was closed down, show that the closure was done in bad

faith for the purpose of circumventing the Unions right to collective bargaining and its

members right to security of tenure. Consequently, SJCI is liable for ULP and illegal

dismissal.

ALLIED FREE WORKERS UNION VS C. MARITIMA et al.

19 SCRA 258

[JAN.31, 1967]

NATURE
Petitions for review by certiorari of CIR decision

FACTS

-This is a consolidation of 3 cases involving both parties

-Respondent Compania Maritima (MARITIMA), a local corp. engaged in shipping entered

into a contract for lease of services with petitioner Allied Free Workers Union (AFWU), a

duly registered legitimate labor union. In the contract, it was stipulated that AFWU will do

and perform all the work of stevedoring and arrastre services of all vessels or boats of

MARITIMA in Iligan City; that the contract is good and valid for 1 month starting Aug.12,

1952, but may be renewed by agreement of the parties with the reservation that MARITIMA

has the right to revoke said contract even before the expiration of the term, if and when

AFWU fails to render good service.

-Towards the end of 1953, MARITIMA complained to AFWU of unsatisfactory and inefficient

service. To remedy the situation, MARITIMA was forced to hire extra laborers from among

stand-by workers not affiliated to any union.

-On July 1954, AFWU sent a written proposal to MARITIMA for a CBA, but the latter did

not reply. Thereafter, AFWU instituted an action in the CIR praying that it be certified as

the sole and exclusive bargaining unit composed of all the laborers doing arrastre and

stevedoring work for MARITIMA, to which action MARITIMA answered, alleging lack of

EREE relationship. On Aug.1954, MARITIMA informed AFWU of the termination of the

contract because of the inefficient service rendered by the latter which had adversely

affected its business. The termination was to take effect as of Sept.1, 1954. MARITIMA then

contracted with the Iligan Stevedoring Union for the arrastre and stevedoring work. The

latter agreed to perform the work subject to the same terms and conditions of the contract

with AFWU. The new agreement was to be carried out on Sept.1, 1954.

-On Aug.26, 1954, AFWU charged MARITIMA of unfair labor practices (ULPs) before the

CIR. MARITIMA answered, again denying the ER-EE relationship between the parties. On

Sept.9, 1954, MARITIMA filed an action to rescind the contract, enjoin AFWU members

from doing arrastre and stevedoring work in connection with its vessels, and for recovery of

damages against AFWU and its officers. The CFI ordered the rescission of the contract and
permanently enjoined AFWU members from performing work in connection with

MARITIMAs vessels.

AFWU was later able to secure a writ of preliminary injunction ordering the maintenance of

the status quo prior to Jan.6, 1961. Thus, after Jan.18, 1961, AFWU laborers were again

back doing the same work as before.

-On Nov.4, 1963, after almost 10 years, the CFI finally rendered its decision: In pursuance

of the provisions of Sec.12 of R.A. 875 and the Rules of this court on certification election,

the Honorable Secretary of Labor or any of his authorized representative is hereby

requested to conduct certification election among all the workers and/or stevedores working

in the wharf of Iligan City who are performing stevedoring and arrastre service aboard

Compania Maritima vessels docking at Iligan City port in order to determine their

representative for collective bargaining with the employer, whether these desire to be

represented by the petitioner Allied Free Workers Union or neither; and upon termination of

the said election, the result thereof shall forthwith be submitted to this court for further

consideration. From this ruling, both parties appealed, AFWU claiming that it should be

declared outright as the majority union while MARITIMA contends that said court could not

even have correctly ordered a certification election considering that there was an absence of

ER-EE relationship between it and said laborers.

ISSUE

WON the order of a certification election by the CIR was proper. (WON there was an ER-EE

relationship between AFWU and MARITIMA)

HELD

NO. Before a certification election can be held, there must exist an ER-EE relationship

between the ER and the petitioner union. Ratio The duty to bargain collectively exists only

between the employer and its employees. Where there is no duty to bargain collectively, it

is not proper to hold certification elections in connection therewith. Reasoning In its

findings, the CIR observed that after the rescission, the AFWU laborers continued working

in accordance with the cabo system, which was the prevailing custom in the place. Under

this system, the union was an independent contractor. The CIR also made a finding that

prior to the contract between MARITIMA and AFWU, the former had an oral arrastre and
stevedoring agreement with another union, the Iligan Laborers Union (ILU), which

agreement was also based on the cabo system. After unsatisfactory service, MARITIMA

cancelled this oral contract and entered into a new contract with AFWU, the terms and

conditions of which were similar to the oral contract with ILU. The written contract between

AFWU and MARITIMA was signed under the assurance by AFWU that the same

arrangement previously had with the former union regarding performance and execution of

arrastre and stevedoring contract be followed in accordance with the custom of such kind of

work in Iligan. Thus, petitioner union operated as a labor contractor under the so-called

cabo system.

-From these findings, Insofar as the working agreement was concerned, there was no real

difference between the contract and the prior oral agreement. Both were based on the

cabo system. Hence, since the parties observed the cabo system after the rescission of

the contract, and since the characteristics of said system show that the contracting union

was an independent contractor, it is reasonable to assume that AFWU continued being an

independent contractor of MARITIMA. And, being an independent contractor, it could not

qualify as an employee. With more reason would this be true with respect to the laborers.

Moreover, there is no evidence at all regarding the characteristics of the working

arrangement between AFWU and MARITIMA after the termination of the CONTRACT. All we

have to go on is the court a quos finding that the cabo system was observed-a system

that negatives employment relationship.

-Since the only function of a certification election is to determine, with judicial sanction,

which union shall be the official representative or spokesman of the employees will be,

there being no ER-EE relationship between the parties disputants, it follows that there is

neither a duty to bargain collectively. Thus, the order for certification election in question

cannot be sustained.

Disposition

Appealed decision of the CIR is AFFIRMED insofar as it dismissed the charge of ULP, but

REVERSED and SET ASIDE insofar as it ordered the holding of a certification election. The

petition for certification election should be DISMISSED.

DIVINE WORD UNIVERSITY OF TACLOBAN VS SECRETARY OF LABOR

GR NO 91915

J. ROMERO

FACTS:

On Sept 6, 1984 the med-arbiter certified the Divine Word University Employees Union as

the sole and exclusive bargaining agent of the Divine Word University. The union submitted

its proposals on March 7, 1985. The Universitys reply requested that a preliminary

conference be held on May 28, 1985. Before the conference the VP of the union resigned

and withdrew the proposals hence the PC was cancelled.

After three years, the affiliate of the union, Associated Labor Union, requested a conference

with the University for the purposes of continuing the bargaining negotiations. Not having

heard from the university, a follow up request was sent and warned the university from

intereference. The university maintained it silence.

The union thereafter filed a notice of strike on the grounds of bargaining deadlock and ULP,

refusal to bargain, discrimination and coercion. Conferences were held after the filing of the

notice of strike and the parties came to an agreement.

It was found however, that the university filed for a petition for certification election one

hour before the agreement was concluded.

The union then submitted proposals which were again ignored by the university. Marathon

conciliations were held to no avail.

The Sec of Labor assumed jurisdiction and directed that all striking workers to report back

to work within 24 hours.

The med-arbiter issued an order directing the conduct of the certification election. To

Which the Sec of Labor directed to hold in abeyance. The Sec of Labor dismissed the cases

of ULP filed by the union and the university.

ISSUE:

Whether or not certification election can be held after CBA was agreed upon after 5 years.

HELD:
An employer who is requested to bargain collectively may file a petition for certification

election any time except upon clear showing the existence of either:

1) petition is filed within one year from the issuance of a final certification election result

OR

2) when a bargaining deadlock had been submitted to conciliation or arbitration or had

become the subject of a valid notice of strike or lockout.

Deadlock is the counteraction of things producing entire stoppage: a state of inaction or of

neutralization caused by the opposition of persons or factions. There is a deadlock when

there is a complete blocking or stoppage resulting from the action of equal and opposed

forces.

The records of the case shows that there was no reasonable effort at good faith bargaining

on the part of the university.

Procedure:

1) proposal

2) conference in case of differences

3) conciliation

4) the parties are prohibited from exercising acts which would impede or disrupt the early

settlement of the case

5) exert efforts for amicable settlement

The union after submitting proposals which were ignored by the university, remained

passive. Technically, the university has the right to file the petition for certification election

as there was no bargaining deadlock. However such right was forfeited by its inaction.

BENGUET CONSOLIDATED, INC. vs. BCI EMPLOYEES & WORKERS UNION-PAFLU,

PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS, CIPRIANO CID and JUANITO

GARCIA

G.R. No. L-24711,; Apr 30, 1968

FACTS:
On June 23, 1959, the Benguet-Balatoc Workers Union (BBWU), for and in behalf of all

Benguet Consolidated, Inc (BENGUET) employees in its mines and milling establishment

located at Balatoc, Antamok and Acupan, Mt. Province, entered into a Collective Bargaining

Contract (CONTRACT) with BENGUET. The CONTRACT was stipulated to be effective for a

period of 4-1/2 years, or from June 23, 1959 to December 23, 1963. It likewise embodied a

No-Strike, No-Lockout clause.

3 years later, or on April 6, 1962, a certification election was conducted by the Department

of Labor among all the rank and file employees of BENGUET in the same collective

bargaining units. BCI EMPLOYEES & WORKERS UNION (UNION) obtained more than 50%

of the total number of votes, defeating BBWU. The Court of Industrial Relations certified the

UNION as the sole and exclusive collective bargaining agent of all BENGUET employees as

regards rates of pay, wages, hours of work and such other terms and conditions of

employment allowed them by law or contract.

Later on, the UNION filed a notice of strike against BENGUET. UNION members who were

BENGUET employees in the mining camps at Acupan, Antamok and Balatoc, went on

strike. The strike was attended by violence, some of the workers and executives of the

BENGUET were prevented from entering the premises and some of the properties of the

BENGUET were damaged as a result of the strike. Eventually, the parties agreed to end the

dispute. BENGUET and UNION executed the AGREEMENT. PAFLU placed its conformity

thereto. About a year later or on January 29, 1964, a collective bargaining contract was

finally executed between UNION-PAFLU and BENGUET.

Meanwhile, BENGUET sued UNION, PAFLU and their Presidents to recover the amount the

former incurred for the repair of the damaged properties resulting from the strike.

BENGUET also argued that the UNION violated the CONTRACT which has a stipulation not

to strike during the effectivity thereof.

Defendants unions and their presidents defended that: (1) they were not bound by the

CONTRACT which BBWU, the defeated union, had executed with BENGUET; (2) the strike

was due, among others, to unfair labor practices of BENGUET; and (3) the strike was lawful

and in the exercise of the legitimate rights of UNION-PAFLU under Republic Act 875.
The trial court dismissed the complaint on the ground that the CONTRACT, particularly the

No-Strike clause, did not bind defendants. BENGUET interposed the present appeal.

ISSUE:

Did the Collective Bargaining Contract executed between Benguet and BBWU on June 23,

1959 and effective until December 23, 1963 automatically bind UNION-PAFLU upon its

certification, on August 18, 1962, as sole bargaining representative of all BENGUET

employees

RULING:
NO. BENGUET erroneously invokes the so-called Doctrine of Substitution referred to in

General Maritime Stevedores Union v. South Sea Shipping Lines where it was ruled that:

We also hold that where the bargaining contract is to run for more than two years, the

principle of substitution may well be adopted and enforced by the CIR to the effect that

after two years of the life of a bargaining agreement, a certification election may be allowed

by the CIR, that if a bargaining agent other than the union or organization that executed

the contract, is elected, said new agent would have to respect said contract, but that it may

bargain with the management for the shortening of the life of the contract if it considers it

too long, or refuse to renew the contract pursuant to an automatic renewal clause.

BENGUETs reliance upon the Principle of Substitution is totally misplaced. This principle,

formulated by the NLRB as its initial compromise solution to the problem facing it when

there occurs a shift in employees union allegiance after the execution of a bargaining

contract with their employer, merely states that even during the effectivity of a collective

bargaining agreement executed between employer and employees thru their agent, the

employees can change said agent but the contract continues to bind them up to its

expiration date. They may bargain however for the shortening of said expiration date.

In formulating the substitutionary doctrine, the only consideration involved was the

employees (principal) interest in the existing bargaining agreement. The agents (union)

interest never entered the picture. The majority of the employees, as an entity under the

statute, is the true party in interest to the contract, holding rights through the agency of
the union representative. Thus, any exclusive interest claimed by the agent is defeasible at

the will of the principal. The substitutionary doctrine only provides that the employees

cannot revoke the validly executed collective bargaining contract with their employer by the

simple expedient of changing their bargaining agent. And it is in the light of this that the

phrase said new agent would have to respect said contract must be understood. It only

means that the employees, thru their new bargaining agent, cannot renege on their

collective bargaining contract, except of course to negotiate with management for the

shortening thereof.

The substitutionary doctrine cannot be invoked to support the contention that a newly

certified collective bargaining agent automatically assumes all the personal undertakings

like the no-strike stipulation here in the collective bargaining agreement made by the

deposed union. When BBWU bound itself and its officers not to strike, it could not have

validly bound also all the other rival unions existing in the bargaining units in question.

BBWU was the agent of the employees, not of the other unions which possess distinct

personalities.

UNION, as the newly certified bargaining agent, could always voluntarily assume all the

personal undertakings made by the displaced agent. But as the lower court found, there

was no showing at all that, prior to the strike, UNION formally adopted the existing

CONTRACT as its own and assumed all the liabilities imposed by the same upon BBWU.

Defendants were neither signatories nor participants in the CONTRACT.

Everything binding on a duly authorized agent, acting as such, is binding on the principal;

not vice-versa, unless there is mutual agency, or unless the agent expressly binds himself

to the party with whom he contracts. Here, it was the previous agent who expressly bound

itself to the other party, BENGUET. UNION, the new agent, did not assume this

undertaking of BBWU.

Since defendants were not contractually bound by the no-strike clause in the CONTRACT,

for the simple reason that they were not parties thereto, they could not be liable for breach

of contract to plaintiff.

WHEREFORE, the judgment of the lower court appealed from is hereby affirmed.
 FVC Labor Union- Philippine Transport and General Workers Organization (FVCLU-
PTGWO) v Sama-Samang Nagkakaisang Manggagawa sa FVC Solidarity of Independent
and General Labor Organizations (SANAMA-FVC-SIGLO)
Nov 27, 2009|Brion, J.| Collective Bargaining Agreement; Terms of Contract
Digester: Anna Mickaella Lingat

FACTS:
Petitioner FVCLU-PTGWO is the recognized bargaining agent of the rank-and-file
employees of the FVC Philippines Incorporated. It signed a five-year CBA with the
company (from February 1, 1998 to January 30, 2003).
At the end of the third year of the five-year term and pursuant to the CBA, FVCLU-
PTGWO and the company entered into a renegotitation of the CBA and modified the
CBAs duration.
o Art XXV, Sec 2 of the renegotiated CBA provides that this re-negotiation agreement
shall take effect beginning February 1, 2001 and until May 31, 2003, extending the
original five-year period of the CBA by 4 months.
On January 21, 2003, 9 days before the January 30, 2003 expiration of the originally-
agreed CBA term, Sama-samang Nagkakaisang sa FVC-Solidarity of Independent and
General Labor Organizations (SANAMA-SIGLO) filed before DOLE a petition for
certification election for the same rank-and-file covered by FVCLU-PTGWO.
o FVCLU-PTGWO moved to dismiss the petition on the ground that the certification
election petition was filed outside the freedom period or outside the 60 days before
the expiration of the CBA on May 31, 2003.

Med-Arbiter: Dismissed PCE for being filed outside freedom period counted from the
May 31, 2003 expiry date of the amended CBA.
DOLE Secretary Tomas: reversed Med-Arbiter and ordered the conduct of certification
election. FVCLU-PTGWO moved for the reconsideration.
DOLE Acting Secretary Imson: granted MR; dismissed PCE.
o The amended CBA, which extended the representation aspect of the original CBA by
4 months, had been ratified by members of the bargaining unit some of whom later
organized themselves as SANAMA-SIGLO.
o Since these SANAMA-SIGLO members fully accepted and in fact received the benefits
arising from the amendments, they also accepted the extended term of the CBA and
cannot now file a petition for certification election based on the original CBA
expiration date.
o MR denied.
CA: ruled in favor of SANAMA-SIGLO; reversed DOLEs order.
o While the parties may renegotiate the other provisions (economic and non-economic)
of the CBA, this should not affect the five-year representation aspect of the original
CBA.
 o If the duration of the renegotiated agreement does not coincide with but rather
extends the original five-year term, the same will not adversely affect the right of
another union to challenge the majority status of the incumbent bargaining agent
within 60 days before the lapse of the original five-year term of the CBA.
o In the event that a new union wins in the certification election, such union is
required to honor and administer the renegotitated CBA throughout the excess
period.

RULING: Dismissed petition. Affirmed CAs decision, but nevertheless declare that no
certification election can be enforced as this petition has effectively been abandoned.

Whether the amendment of the CBA extending its term carry with it an extension of
the unions exclusive bargaining status? NO
Whether a PCE may be filed within the freedom period of the original CBA? - YES
PETITIONERS ARGUMENTS:
o The extension of the CBA term also changed the unions exclusive bargaining
representation status and effectively moved the reckoning point of the 60-day
freedom period from January 30 to May 30, 2003.
o Thus, when the term of the CBA was extended, its exclusive bargaining status was
similarly extended so that the freedom period for the filing of a PCE should be
counted back from the expiration of the amended CBA term.
o SANAMA-SIGLO is estopped from questioning the extension of the CBA term under
the amendments because its members are the very same ones who approved the
amendments, including the expiration date of the CBA, and who benefited from these
amendments.
o The representation petition had been rendered moot by a new CBA it entered into
with the company covering the period June 1, 2003 to May 31, 2008.
SANAMA-SIGLO abandoned their desire to contest the representative status of FVCLU-
PTGWO.
o Since the promulgation of the CA decision (three years after the PCE was filed), the
local leaders of SANAMA-SIGLO had stopped reporting to the federation office or
attending meetings. The SANAMA-SIGLO counsel, who is also the national president,
is no longer in the position to pursue the present case because the local union and
its leadership had given up.
o A new CBA had already been signed up by FVCLU-PTGWO and the company.
Nevertheless, the Court still deemed it necessary to resolve the question of law raised
since this exclusive representation status will inevitably recur in the future.

Art 253-A of the Labor Code provides:

 o Terms of a collective bargaining agreement. Any Collective Bargaining Agreement that
the parties may enter into, shall, insofar as the representation aspect is concerned,
be for a term of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside of the sixty day
period immediately before the date of expiry of such five-year term of the Collective
Bargaining Agreement. All other provisions of the Collective Bargaining Agreement
shall be renegotiated not later than three (3) years after its execution.
o Any agreement on such other provisions of the Collective Bargaining Agreement
entered into within six (6) months from the date of expiry of the term of such other
provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day
immediately following such date. If any such agreement is entered into beyond six
months, the parties shall agree on the duration of retroactivity thereof. In case of a
deadlock in the renegotiation of the collective bargaining agreement, the parties may
exercise their rights under this Code.
This provision is implemented through Book V, Rule VIII, Sec 14(b):
o Sec. 14. Denial of the petition; grounds. The Med-Arbiter may dismiss the petition on
any of the following grounds: x x x x
o (b) the petition was filed before or after the freedom period of a duly registered
collective bargaining agreement; provided that the sixty-day period based on the
original collective bargaining agreement shall not be affected by any amendment,
extension or renewal of the collective bargaining agreement.
While the parties may agree to extend the CBAs original five-year term together
with all other CBA provisions, any such amendment or term in excess of five years
will not carry with it a change in the unions exclusive collective bargaining status.
By express provision of the Article 253-A, the exclusive bargaining status cannot go
beyond five years and the representation status is a legal matter not for the workplace
parties to agree upon.
Despite an agreement for a CBA with a life of more than five years, either as an original
provision or by amendment, the bargaining unions exclusive bargaining status is
effective only for five years and can be challenged within sixty (60) days prior to
the expiration of the CBAs first five years.
San Miguel Corp Employees Union PTGWO v Confesor: In the event however, that the
parties, by mutual agreement, enter into a renegotiated contract with a term of three (3)
years or one which does not coincide with the said five-year term and said agreement is
ratified by majority of the members in the bargaining unit, the subject contract is valid
and legal and therefore, binds the contracting parties. The same will however not
adversely affect the right of another union to challenge the majority status of the
incumbent bargaining agent within sixty (60) days before the lapse of the original five (5)
year term of the CBA.

As applied in this case:

 The CBA was originally signed for a period of five years (expires on January 30, 2003),
with a provision for a renegotiation of the CBAs other provisions at the end of the 3 rd
year. Thus, prior to January 30, 2001, the workplace parties sat down for renegotiation
but instead of confining themselves to the economic and non-economic CBA provisions,
also extended the life of the CBA for another four months.
This negotiated extension of the CBA term has no legal effect on the FVCLU-PTGWOs
exclusive bargaining representation status which remained effective only for 5 years
ending on the original expiry date of January 30, 2003.
Hence, sixty days prior to this date, or starting December 2, 2002, SANAMA-SIGLO
could properly field a PCE.
Its petition filed on January 21, 2003 or 9 days before the expiration of the CBA was
seasonable filed.

St. Lukes Medical Center, Inc. vs Torres

G.R. No. 99395 June 29, 1993

Facts: Private respondent SLMCEA-AFW brought to the attention of petitioner via a letter

dated July 4, 1990 that the 1987-1990 was about to expire, and manifested in the process

that private respondent wanted to renew the CBA. This development triggered round-table

talks on which occasions petitioner proposed, among other items, a maximum across-the-

board monthly salary increase of P375.00 per employee, to which proposal private

respondent demanded a P1,500.00 hike or 50% increase based on the latest salary rate of

each employee, whichever is higher.

A deadlock on issues, especially that bearing on across-the-board monthly and meal

allowances followed and to pre-empt the impending strike as voted upon by a majority of

private respondent's membership, petitioner lodged the petition below. The Secretary of

Labor immediately assumed jurisdiction and the parties submitted their respective

pleadings.

On January 28, 1991, public respondent Secretary of Labor issued the Order now under

challenge. Said Order contained a disposition on both the economic and non-economic

issues raised in the petition. One of the rulings in the order is the granting of the

retroactive effect to the enforceability of the CBA.

Petitioner argues that the Order of January 28, 1991 is violative of Article 253-A of the

Labor Code, particularly its provisions on retroactivity. Said Article pertinently provides:
xxx xxx xxx

Any agreement on such other provisions of the collective bargaining agreement entered into

within six (6) months from the date of expiry of the term of such other provisions as fixed in

the collective bargaining agreement, shall retroact to the day immediately following such

date. If any such agreement is entered into beyond six months, the parties shall agree on

the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the

collective bargaining agreement, the parties may exercise their rights under this Code.

Petitioner argues that in granting retroactive effect to the enforceability of the CBA, public

respondent committed an act contrary to the above provision of law, pointing out that the

old CBA expired on July 30, 1990 and the questioned order was issued on January 28,

1991. Petitioner theorizes that following Article 13 of the Civil Code which provides that

there are 30 days in one month, the questioned Order of January 28, 1991 was issued

beyond the six-month period, graphically shown thus:

July 30, 1990 Expiration

July 31 = 1 day

August 1-31, 1990 = 31 days

September 1-30, 1990 = 30 days

October 1-31, 1990 = 31 days

November 1-30, 1990 = 30 days

December 1-31, 1990 = 31 days

January 1-28, 1991 = 28 days

TOTAL = 182 days

(6 months and 2 days)

Private respondent agrees with the Labor Secretary's view that Article 253-A of the Labor

Code does not apply to arbitral awards such as those involved in the instant case.

According to private respondent, Article 253-A of the Labor Code is clear and plain on its

face as referring only to collective bargaining agreements entered into by management and

the certified exclusive bargaining agent of all rank-and-file employees therein within six (6)

months from the expiry of the old CBA.

Issue: Whether or not the CBA should be given retroactive effect.

Held: The effectivity of the Order of January 28, 1991, must retroact to the date of the

expiration of the previous CBA, contrary to the position of petitioner. Under the

circumstances of the case, Article 253-A cannot be property applied to herein case. As

correctly stated by public respondent in his assailed Order of April 12, 1991 dismissing

petitioner's Motion for Reconsideration

Anent the alleged lack of basis for the retroactivity provisions awarded, we would stress that

the provision of law invoked by the Hospital, Article 253-A of the Labor Code, speak of

agreements by and between the parties, and not arbitral awards . . .

Therefore, in the absence of a specific provision of law prohibiting retroactivity of the

effectivity of arbitral awards issued by the Secretary of Labor pursuant to Article 263 (g) of

the Labor Code, such as herein involved, public respondent is deemed vested with plenary

and discretionary powers to determine the effectivity thereof.

NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED

INDUSTRIES- MANILA PAVILION HOTEL CHAPTER, Petitioner, vs. SECRETARY OF

LABOR AND EMPLOYMENT, BUREAU OF LABOR RELATIONS, HOLIDAY INN MANILA

PAVILION HOTEL LABOR UNION AND ACESITE PHILIPPINES HOTEL CORPORATION,

Respondents.

FACTS:

A certification election was conducted among the rank-and-file employees of Holiday Inn

Manila with the following results:

EMPLOYEES IN VOTERS LIST = 353

TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
NO UNION = 1
SPOILED = 3
 SEGREGATED = 22
In view of the significant number of segregated votes, contending unions, petitioner,

NUHWHRAIN-MPHC, and respondent Holiday Inn Manila Pavillion Hotel Labor Union

(HIMPHLU), referred the case back to Med-Arbiter to decide which among those votes would

be opened and tallied. Eleven votes were initially segregated because they were cast by

dismissed employees, albeit the legality of their dismissal was still pending before the Court

of Appeals. Six other votes were segregated because the employees who cast them were

already occupying supervisory positions at the time of the election. Still five other votes

were segregated on the ground that they were cast by probationary employees and,

pursuant to the existing Collective Bargaining Agreement (CBA), such employees cannot

vote. It bears noting early on, however, that the vote of one Jose Gatbonton (Gatbonton), a

probationary employee, was counted.

Med-Arbiter Calabocal ruled for the opening of 17 out of the 22 segregated votes.

Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment

(SOLE), arguing that the votes of the probationary employees should have been opened

considering that probationary employee Gatbontons vote was tallied. And petitioner averred

that respondent HIMPHLU, which garnered 169 votes, should not be immediately certified

as the bargaining agent, as the opening of the 17 segregated ballots would push the

number of valid votes cast to 338 (151 + 169 + 1 + 17), hence, the 169 votes which

HIMPHLU garnered would be one vote short of the majority which would then become 169.

The Secretary of Labor and Employment (SOLE), affirmed the Med-Arbiters Order. In fine,

the SOLE concluded that the certification of HIMPHLU as the exclusive bargaining agent

was proper.

Petitioners MR was denied. CA affirmed the dismissal of the MR.

ISSUES:

Whether employees on probationary status at the time of the certification elections should

be allowed - YES

Whether HIMPHLU was able to obtain the required majority for it to be certified as the

exclusive bargaining agent - NO

HELD:
The inclusion of Gatbontons vote was proper not because it was not questioned but

because probationary employees have the right to vote in a certification election. The votes

of the six other probationary employees should thus also have been counted. In a

certification election, all rank and file employees in the appropriate bargaining unit,

whether probationary or permanent are entitled to vote. This principle is clearly stated in

Art. 255 of the Labor Code. Collective bargaining covers all aspects of the employment

relation and the resultant CBA negotiated by the certified union binds all employees in the

bargaining unit. Hence, all rank and file employees, probationary or permanent, have a

substantial interest in the selection of the bargaining representative. The Code makes no

distinction as to their employment status as basis for eligibility in supporting the petition

for certification election. The law refers to "all" the employees in the bargaining unit. All

they need to be eligible to support the petition is to belong to the "bargaining unit."

For purposes of this section Rule II, Sec. 2 of Department Order No. 40-03, series of 2003,

which amended Rule XI of the Omnibus Rules Implementing the Labor Code, any employee,

whether employed for a definite period or not, shall beginning on the first day of his/her

service, be eligible for membership in any labor organization.

The provision in the CBA disqualifying probationary employees from voting cannot override

the Constitutionally-protected right of workers to self-organization, as well as the provisions

of the Labor Code and its Implementing Rules on certification elections and jurisprudence

thereon.

Prescinding from the principle that all employees are, from the first day of their

employment, eligible for membership in a labor organization, it is evident that the period of

reckoning in determining who shall be included in the list of eligible voters is, in cases

where a timely appeal has been filed from the Order of the Med-Arbiter, the date when the

Order of the Secretary of Labor and Employment, whether affirming or denying the appeal,

becomes final and executory.

During the pendency of the appeal, the employer may hire additional employees. To exclude

the employees hired after the issuance of the Med-Arbiters Order but before the appeal has

been resolved would violate the guarantee that every employee has the right to be part of a

labor organization from the first day of their service.

In the present case, records show that the probationary employees, including

Gatbonton, were included in the list of employees in the bargaining unit submitted by

the Hotel on May 25, 2006 in compliance with the directive of the Med-Arbiter after

the appeal and subsequent motion for reconsideration have been denied by the SOLE,

rendering the Med-Arbiters August 22, 2005 Order final and executory 10 days after

the March 22, 2007 Resolution (denying the motion for reconsideration of the

January 22 Order denying the appeal), and rightly so. Because, for purposes of self-

organization, those employees are, in light of the discussion above, deemed eligible to

vote.

A certification election is the process of determining the sole and exclusive bargaining agent

of the employees in an appropriate bargaining unit for purposes of collective bargaining.

Collective bargaining, refers to the negotiated contract between a legitimate labor

organization and the employer concerning wages, hours of work and all other terms and

conditions of employment in a bargaining unit.

The significance of an employees right to vote in a certification election cannot thus be

overemphasized. For he has considerable interest in the determination of who shall

represent him in negotiating the terms and conditions of his employment.

But while the Court rules that the votes of all the probationary employees should be

included, under the particular circumstances of this case and the period of time

which it took for the appeal to be decided, the votes of the six supervisory employees

must be excluded because at the time the certification elections was conducted, they

had ceased to be part of the rank and file, their promotion having taken effect two

months before the election.

As to whether HIMPHLU should be certified as the exclusive bargaining agent, the Court

rules in the negative. It is well-settled that under the so-called "double majority rule," for

there to be a valid certification election, majority of the bargaining unit must have voted

AND the winning union must have garnered majority of the valid votes cast.
Prescinding from the Courts ruling that all the probationary employees votes should be

deemed valid votes while that of the supervisory employees should be excluded, it follows

that the number of valid votes cast would increase from 321 to 337. Under Art. 256 of the

Labor Code, the union obtaining the majority of the valid votes cast by the eligible voters

shall be certified as the sole and exclusive bargaining agent of all the workers in the

appropriate bargaining unit. This majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at

least 170.

HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not able

to obtain a majority vote. The position of both the SOLE and the appellate court that the

opening of the 17 segregated ballots will not materially affect the outcome of the

certification election as for, so they contend, even if such member were all in favor of

petitioner, still, HIMPHLU would win, is thus untenable.

It bears reiteration that the true importance of ascertaining the number of valid votes cast

is for it to serve as basis for computing the required majority, and not just to determine

which union won the elections. The opening of the segregated but valid votes has thus

become material. To be sure, the conduct of a certification election has a two-fold objective:

to determine the appropriate bargaining unit and to ascertain the majority representation

of the bargaining representative, if the employees desire to be represented at all by anyone.

It is not simply the determination of who between two or more contending unions won, but

whether it effectively ascertains the will of the members of the bargaining unit as to

whether they want to be represented and which union they want to represent them.

Having declared that no choice in the certification election conducted obtained the required

majority, it follows that a run-off election must be held to determine which between

HIMPHLU and petitioner should represent the rank-and-file employees.

A run-off election refers to an election between the labor unions receiving the two (2)

highest number of votes in a certification or consent election with three (3) or more choices,

where such a certified or consent election results in none of the three (3) or more choices

receiving the majority of the valid votes cast; provided that the total number of votes for all

contending unions is at least fifty percent (50%) of the number of votes cast. With 346 votes

cast, 337 of which are now deemed valid and HIMPHLU having only garnered 169 and
petitioner having obtained 151 and the choice "NO UNION" receiving 1 vote, then the

holding of a run-off election between HIMPHLU and petitioner is in order.

PAFLU vs BLR

G.R. No. L-43760

DATED: August 21, 1976

PONENTE: FERNANDO, Acting C.J.

FACTS: In the certification election held on February 27, 1976, respondent Union obtained

429 votes as against 414 of petitioner Union.

Under the Rules and Regulations implementing the present Labor Code, a majority of

the valid votes cast suffices for certification of the victorious labor union as the sole

and exclusive bargaining agent.

The National Association of Free Labor Unions (NAFLU) and the Philippine Association of

Free Labor Unions (PAFLU) were the two contending unions in the certification election for

the exclusive bargaining agent of all the employees of Philippine Blooming Mills.

NAFLU received majority of the votes.

There were four votes cast by employees who did not want any union.

Respondent Union ought to have been certified in accordance with the above

applicable rule.

Petitioner, undeterred, would seize upon the doctrine announced in the case of Allied

Workers Association of the Philippines v. Court of Industrial Relations that spoiled

ballots should be counted in determining the valid votes cast. Considering there were

seventeen spoiled ballots, it is the submission that there was a grave abuse of

discretion on the part of respondent Director.

The Director of Labor Relations issued the corresponding certification for NAFLU. PAFLU

contested the results, claiming that the spoiled ballots should have been 36

counted in determining what would constitute a majority of the votes as ruled by the

Supreme Court in the case of Allied Workers Association of the Philippines v. Court of

Industrial Relations, which was decided under the Industrial Peace Act. The Director issued
a comment on the matter, which that the implementing rules and regulations which were

used in this case is in accord with the present Labor Code.

ISSUE:

1. Whether or not the spoiled ballots should be counted?

2. Whether Director Noriel acted with grave abuse of discretion in granting NAFLU as

the exclusive bargaining agent of all the employees in the Philippine Blooming Mills

HELD:

1. No, they should not. The case cited was decided under the Industrial Peace Act. It

cannot be applied here because the issue arose in 1974, two years after the effectivity

of the present Labor Code. The judiciary can only nullify a rule in conflict with the

statute, which is not the case here.

To further support its conclusion, the court stated that high repute was attached to the

construction placed by the executive officials entrusted with the responsibility of applying a

statute.

Citing two cases:

"The principle that the contemporaneous construction of a statute by the executive

officers of the government, whose duty it is to execute it, is entitled to great respect,

and should ordinarily control the construction of the statute by the courts, is so

firmly embedded in our jurisprudence that no authorities need be cited to support

it."

"Courts will and should respect the contemporaneous construction placed upon a

statute by the executive officers whose duty it is to enforce it, and unless such

interpretation is clearly erroneous will ordinarily be controlled thereby."

1. No, Director Noriel did not act with grave abuse of discretion. Certiorari does

not lie. The conclusion reached by the Court derives support from the deservedly

high repute attached to the construction placed by the executive officials entrusted

with the responsibility of applying a statute.

The Rules and Regulations implementing the present Labor Code were issued by

Secretary Blas Ople of the Department of Labor and took effect on 3 February 1975,
 the present Labor Code having been made known to the public as far back as 1 May

1974, although its date of effectivity was postponed to 1 November 1974.

It would appear then that there was more than enough time for a really serious and

careful study of such suppletory rules and regulations to avoid any inconsistency

with the Code. This Court certainly cannot ignore the interpretation thereafter

embodied in the Rules.

As far back as In re Allen, a 1903 decision, Justice McDonough, as ponente, cited

this excerpt from the leading American case of Pennoyer v. McConnaughy,

decided in 1891: The principle that the contemporaneous construction of a

statute by the executive officers of the government, whose duty it is to execute

it, is entitled to great respect, and should ordinarily control the construction

of the statute by the courts, is so firmly embedded in our jurisprudence that

no authorities need be cited to support it.

There was a paraphrase by Justice Malcolm of such a pronouncement in Molina v.

Rafferty, a 1918 decision: Courts will and should respect the contemporaneous

construction placed upon a statute by the executive officers whose duty it is to

enforce it, and unless such interpretation is clearly erroneous will ordinarily

be controlled thereby.

Since then, such a doctrine has been reiterated in numerous decisions. As was

emphasized by Chief Justice Castro, the construction placed by the office

charged with implementing and enforcing the provisions of a Code should he

given controlling weight.

RULING: WHEREFORE, the petition for certiorari is dismissed. Costs against petitioner

Philippine Association of Free Labor Unions (PAFLU).

G.R. No. 163942; November 11, 2008; NATIONAL UNION OF WORKERS IN THE HOTEL

RESTAURANT AND ALLIED INDUSTRIES (NUWHRAIN-APL-IUF) DUSIT HOTEL NIKKO

CHAPTER, petitioner, vs. THE HONORABLE COURT OF APPEALS (Former Eighth

Division), THE NATIONAL LABOR RELATIONS COMMISSION (NLRC), PHILIPPINE

HOTELIERS INC., owner and operator of DUSIT HOTEL NIKKO and/or CHIYUKI

FUJIMOTO, and ESPERANZA V. ALVEZ, respondents. & G.R. No. 166295; November 11,

2008 NUWHRAIN-DUSIT HOTEL NIKKO CHAPTER, petitioner, vs. SECRETARY OF

LABOR AND EMPLOYMENT and PHILIPPINE HOTELIERS, INC., respondents.;

VELASCO, JR., J.:

FACTS:

National Union of Workers in the Hotel and Restaurant and Allied Industries

(NUWHRAIN-APL-IUF) of the Dusit Hotel Nikko Chapter (Union): certified

bargaining agent of the RF employees of Dusit Nikko Hotel.

Dusit Nikko Hotel: owned and operated by Philippine Hoteliers Inc.

Chiyuki Fujimoto and Esperanza Alvez:Hotels General Manager and Dir. Of

Human Resources

Oct. 24, 2000 Union submitted its CBA negotiation proposals to the Hotel. Parties

however failed to arrive at mutually accepted terms and conditions hence a deadlock

Dec. 20, 2001 Union filed a Notice of strike with the NCMB. Conciliation hearings

were conducted but were unsuccessful . A strike vote was conducted and the Union

decided to wage a strike.

Jan. 17, 2002 Union held a general assembly at the Hotel Basement (members

sported cropped/cleanly shaven heads). More male Union members came to work the

next day with the same hair style. The Hotel prevented them from entering (violation

of Hotels Grooming Standards)

o Union staged a picket outside the Hotel. The Hotel also experienced severe lack

of manpower which forced them to temporarily cease 3 restaurant operations

Jan. 20, 2002 Hotel suspended the Union members, preventively suspending them

and charging them with offenses. The Union filed a second Notice of Strike with

NCMB ( ULP and violation of A248(a) on Illegal Lockout)

 Jan 26, 2002 Hotel terminated 29 Union officers and 61 members and suspended

81 employees for 30 days, 48 for 15 days, 4 for 10 days and 3 for 5 days. The Union

again went on strike

Jan 31, 2002 3rd Notice of Strike (ULDP and union-busting). Secretary of labor

assumed jurisdiction over the dispute giving the Hotel an option to merely reinstate

the dismissed or suspended workers

Feb. 1, 2002 Hotel issued an Inter-Office Memo directing some of the employees to

return to work

NLRC Illegal strike which violated the No Strike, No Lockout provision of the CBA

(failed to comply with the mandatory 30-day cooling-off period and the seven-day

strike ban,)

CA affirmed NLRC

ISSUE: WON the Union conducted an illegal strike

HELD: YES

The Court discussed the 6 categories of an illegal strike according to Ludwig Teller

and how the acts of the Union met the requisites:

1. [when it] is contrary to a specific prohibition of law, such as strike by employees

performing governmental functions; or

2. [when it] violates a specific requirement of law[, such as Article 263 of the Labor Code

on the requisites of a valid strike]; or

3. [when it] is declared for an unlawful purpose, such as inducing the employer to

commit an unfair labor practice against non-union employees; or

4. [when it] employs unlawful means in the pursuit of its objective, such as a

widespread terrorism of non-strikers [for example, prohibited acts under Art. 264(e)

of the Labor Code]; or

 5. [when it] is declared in violation of an existing injunction[, such as injunction,

prohibition, or order issued by the DOLE Secretary and the NLRC under Art. 263 of

the Labor Code]; or

6. [when it] is contrary to an existing agreement, such as a no-strike clause or

conclusive arbitration clause

Consequent liabilities of the Union officers and members for their participation in the illegal

strike

Art. 264(a), paragraph 3 of the Labor Code provides that "[a]ny union officer who

knowingly participates in an illegal strike and any worker or union officer who

knowingly participates in the commission of illegal acts during a strike may be

declared to have lost his employment status x x x."

Distinction between union officers and mere union members. Union officers may

be validly terminated from employment for their participation in an illegal strike,

while union members have to participate in and commit illegal acts for them to lose

their employment status. Thus, it is necessary for the company to adduce proof of the

participation of the striking employees in the commission of illegal acts during the

strikes.

29 Union officers may be dismissed pursuant to A. 264(a) par. 3 which imposes

the penalty of dismissal on any union officer who knowingly participates in an

illegal strike." But theres room for leniency with respect to Union members.

o Hotel proved that the strikers blocked the ingress to and egress from the Hotel.

But it failed to point out the participation of each of the Union members in the

commission of the illegal acts. Hence the 61 members should be reinstated.

Union members who participated in an illegal strike but were not identified to have

committed illegal acts are entitled to be reinstated to their former positions but

without backwages. Hence. The 61 members should be reinstated without backwages

Calamba Medical Center, Inc. vs National Labor Relations Commission

Ronaldo Lanzanas and Merceditha Lanzanas are doctors employed by Calamba Medical

Center, Inc. They are given a retainers fee by the hospital as well as shares from fees

obtained from patients.

One time, Ronaldo was overheard by Dr. Trinidad talking to another doctor about how low

the admission rate to the hospital is. That conversation was reported to Dr. Desipeda who

was then the Medical Director of the hospital.

Eventually Ronaldo was suspended. Ronaldo filed a case for Illegal Suspension in March

1998. In the same month, the rank and file employees organized a strike against the

hospital for unfair labor practices. Desipeda eventually fired Ronaldo for his alleged

participation in the strike, which is not allowed under the Labor Code for he is a

managerial employee. Desipeda also fired Merceditha on the ground that she is the wife of

Ronaldo who naturally sympathizes with him.

The Labor Arbiter ruled that there was no Illegal Suspension for there was no employer-

employee relationship because the hospital has no control over Ronaldo as he is a doctor

who even gets shares from the hospitals earnings.

The National Labor Relations Commission as well as the Court of Appeals reversed the LA.

ISSUE: Whether or not there is an employer-employee relationship?

HELD: Yes. Under the control test, an employment relationship exists between a physician

and a hospital if the hospital controls both the means and the details of the process by

which the physician is to accomplish his task. There is control in this case because of the

fact that Desipeda schedules the hours of work for Ronaldo and his wife.

The doctors are also registered by the hospital under the SSS which is premised on an

employer-employee relationship.

There is Illegal Dismissal committed against Rolando for there was no notice and hearing

held. It was never shown that Rolando joined the strike. But even if he did, he has the right

to do so for he is not a part of the managerial or supervisory employees. As a doctor, their

decisions are still subject to revocation or revision by Desipeda.

There is Illegal Dismissal committed against Merceditha for the ground therefor was not

mentioned in Article 282 of the Labor Code.

When is Control (One of the Four Tests of Employer-Employee Relationship) Absent?

Where a person who works for another does so more or less at his own pleasure and is not

subject to definite hours or conditions of work, and is compensated according to the result

of his efforts and not the amount thereof, the element of control is absent.

G.R. No. 169632 March 28, 2006

UNIVERSITY OF SAN AGUSTIN EMPLOYEES UNION-FFW

vs.
COURT OF APPEALS and UNIVERSITY OF SAN AGUSTIN,

University) is a non-stock, non-profit educational institution.

Petitioner Union is the duly recognized collective bargaining unit for teaching and non-
teaching rank-and-file personnel while the other individuals are its officers.

July 27, 2000: parties entered into a 5-year CBA 2 which provided: economic provisions
shall have a period of three (3) years or up to 2003.
Section 3 of Article VIII of the CBA provided for salary increases for 2000-2003 to take
the form of either:
1. lump sum or a
2. percentage of the tuition incremental proceeds (TIP).

CBA contained:

1. "no strike, no lockout" clause and

2. grievance machinery procedure to resolve management-labor disputes,

including a voluntary arbitration mechanism should the grievance committee fail to

satisfactorily settle disputes.

Parties commenced negotiations for the economic provisions for the remaining two years
(SY2003-2004 and SY2004-2005)

Parties could not agree on the manner of computing the TIP, thus they undergo
preventive mediation proceedings NCMB.
 But the impasse was not resolved.

Union declared bargaining deadlock grounded on the parties failure to arrive on the
manner of computing the (70%) of the net TIP to be allotted for salary and other benefits
(SY2003-2004 and SY2004-2005.)

Union filed a Notice of Strike NCMB

University filed:
1. Motion to Strike Out Notice of Strike
2. Refer the Dispute to Voluntary Arbitration,
invoking the "No strike, no lockout" clause of the parties CBA of the parties
NCMB: failed to resolve the Universitys motion.

Parties made a joint request for the SOLE to assume jurisdiction over the dispute.
September 18, 2003: Assumption of Jurisdiction Order5 (AJO) was issued by the SOLE,
September 19, 2003: Union staged a strike.
At 6:45 a.m. Sheriffs serve the AJO on the Union.
Unions vice president, refused to receive the same, citing Union Board Resolution No. 3
naming the union president as the only person authorized to do so.
Sheriffs explained:
1. that even if she refused to acknowledge receipt of the AJO, the same would be considered
served
2. that once the sheriffs post the AJO, it would be considered received by the Union

At 8:45 a.m sheriffs posted copies of the AJO at

1. main gate of University
2. main entrance of its buildings
3. Unions office inside the campus.
At 9:20 a.m. sheriffs served the AJO on the University.

Despite the sheriffs advice, union went ahead with the strike.
At 5:25 p.m union president arrived at the premises and received the AJO from the
sheriffs.

September 24, 2003: University filed:

1. Petition to Declare Illegal Strike
2. Loss of Employment Status NLRC
which the University later on requested to be consolidated with OS-AJ-0032-2003
pending before the SOLE which was granted.

April 6, 2004: SOLE resolved the

1. various economic issues over which the parties had a deadlock in the collective
bargaining,
2. issue of legality/illegality of the September 19, 2003 strike.

The petition to declare the strike illegal is DISMISSED for want of legal and factual basis.
There is no basis to declare loss of employment status on the part of any of the striking
union members.

CA affirmed SOLEs decision on the economic issues, particularly the formula but
reversed the SOLEs ruling as to the legality of the September 19, 2003 strike.

Strike held by the [petitioners] on September 19, 2003 is illegal.

Hence, the union officers are deemed to have lost their employment status.

April 7, 2005: University served notices of termination to the union officers who were
declared by the CA as deemed to have lost their employment status.
April 7, 2005: Union filed with the NCMB a second notice of strike on ground of alleged
union busting.
April 22, 2005: parties again negotiate but it proved futile
April 25, 2005: Union went on strike.

University notified the Union that it was pulling out of the negotiations because of the
strike.

August 23, 2005: CA ruled that:

1. SOLE abused its discretion in resolving the economic issues on the ground that said
issues were proper subject of the grievance machinery as embodied in the parties CBA.
2. directed the parties to refer the economic issues of the CBA to voluntary arbitration.
3. strike conducted by the petitioner Union was illegal
4. its officers were deemed to have lost their employment status.
CAs conclusions were supported by evidence, particularly the Sheriffs Report.
SOLE was remiss in disregarding the sheriffs report.
The sheriffs report stated the union officers refusal to receive the AJO when served on
them
September 16, 2003 Unions Board Resolution No. 3 must not be allowed to circumvent
the standard operating procedure of the Office of the Undersecretary for Labor Relations
which considers AJOs as duly served upon posting of copies on designated places.
Procedure was adopted to prevent the thwarting of AJOs by the simple expedient of
refusal of the parties to receive the same

Union was not able to sufficiently dispute the truth contained in the sheriffs report.
 It was not unreasonable for the CA to conclude that there was a deliberate intent by the
Union and its officers to disregard the AJO and proceed with their strike, which, by their
act of disregarding said AJO made said strike illegal.
AJO was issued by the SOLE pursuant to Article 263(g)

When the SOLE assumes jurisdiction over a labor dispute in an industry indispensable
to national interest or certifies the same to the NLRC for compulsory arbitration, such
assumption or certification shall have the effect of automatically enjoining the intended
or impending strike or lockout.
If one had already taken place, all striking workers shall immediately return to work and
the employer shall immediately resume operations and readmit all workers under the
same terms and conditions prevailing before the strike or lockout.
Trans-Asia Shipping Lines, vs. CA, when the Secretary exercises these powers, he is
granted great breadth of discretion in order to find a solution to a labor dispute.
The most obvious of these powers is the automatic enjoining of an impending strike or
lockout or the lifting thereof if one has already taken place.
Assumption of jurisdiction over a labor dispute, or the certification of the same to the NLRC
for compulsory arbitration, always co-exists with an order for workers to return to work
immediately and for employers to readmit all workers under the same terms and
conditions prevailing before the strike or lockout.

In this case, the AJO was served at 8:45 a.m. of September 19, 2003.
The strikers should have returned to work immediately
But they persisted with their refusal to receive the AJO and waited for their union
president to receive the same at 5:25 p.m.
Unions defiance of the AJO was evident in the sheriffs report:
Atty. Lacerna told the Sheriff that only when the Union president receives the Order at
5:00 p.m. shall the Union recognize the Secretary of Labor as having assumed jurisdiction
over the labor dispute.

No reversible error in the CAs finding:

1. strike of September 19, 2003 was illegal.

2. Union officers were deemed to have lost their employment status for having knowingly
participated in said illegal act.

Unions assertion that the SOLE always gives (24) to the striking workers within which
to return to work, offers no refuge.
Article 263(g) is explicit that if a strike has already taken place at the time of assumption
of jurisdiction or certification, all striking or locked out employees shall immediately
return to work and the employer shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before the strike or lock-out.
 CAs directive for the parties to proceed with voluntary arbitration as provided in their
CBA is illogical.
The issue as to the economic benefits, which included the issue on the formula is one
that arises from the interpretation or implementation of the CBA.
Parties CBA provides for a grievance machinery to resolve any "complaint or
dissatisfaction:
1. arising from the interpretation or implementation of the CBA
2. arising from the interpretation or enforcement of company personnel policies.
CBA provides that should the grievance machinery fail to resolve the grievance or
dispute, the same shall be "referred to a Voluntary Arbitrator for arbitration and final
resolution.
Through no fault of the University these processes were not exhausted because it was
not acted upon by the NCMB.
University has been consistent that the Union must exhaust the grievance machinery
provisions of the CBA which ends in voluntary arbitration.
Universitys stance is consistent with Articles 261 and 262

The parties agreed that practically all disputes including bargaining deadlocks shall
be referred to the grievance machinery which ends in voluntary arbitration.

Moreover, no strike or no lockout shall ensue while the matter is being resolved.

NCMB should have directed the Union to honor its agreement with the University to:

1. exhaust administrative grievance measures and

2. bring the alleged deadlock to voluntary arbitration.

NCMB did not resolve the Universitys motion thus paving the way for the strike on
September 19, 2003 and the deliberate circumvention of the CBAs grievance machinery
and voluntary arbitration provisions.

Failure or refusal of the NCMB and the SOLE to recognize, honor and enforce the
grievance machinery and voluntary arbitration provisions of the parties CBA rendered
said provisions, as well as, Articles 261 and 262 useless and inoperative.
 Union can easily circumvent the grievance machinery and a previous agreement to
resolve differences or conflicts through voluntary arbitration through the simple
expedient of filing a notice of strike.

Management can avoid the grievance machinery and voluntary arbitration provisions of
its CBA by simply filing a notice of lockout.

Liberal Labor Union vs. Philippine Can Company:

Main purpose of management and labor in adopting a procedure in the settlement of their
disputes is to prevent a strike or lockout.

In the case at bench, the University, in filing its Motion to Strike Out Notice of Strike and
to Refer the Dispute to Voluntary Arbitration before the NCMB, was insisting that the
Union abide by the parties CBAs grievance machinery and voluntary arbitration
provisions.

With all the more reasons then should the Union be directed to proceed to voluntary
arbitration.

International Pharmaceuticals, Inc. vs. Secretary:

SOLEs jurisdiction over labor disputes must include and extend to all questions and
controversies arising therefrom, including cases over which the Labor Arbiter has
exclusive jurisdiction.
However, the present case is as an exception
The NCMBs inaction on the Universitys motion to refer the dispute to voluntary
arbitration forced the hand of the University to seek and submit to the jurisdiction of the
SOLE.
Considering that the CBA contained:
1. no strike, no lockout and
2. grievance machinery and
3. voluntary arbitration clauses,
the NCMB:
1. should have declared as not duly filed the Unions Notice of Strike and
2. should have referred the labor dispute to voluntary arbitration pursuant to Article 261
Section 6(c)(i), Rule VI, of the NCMBs Manual specifically provides:
 Section 6. Action on non-strikeable issues - A strike or lockout notice anchored on grounds
involving:

(1) inter-union or intra-union disputes

(2) violation of labor standard laws

(3) pending cases at the DOLE Regional Offices, BLR, NLRC and its appropriate Regional
Branches, NWPC and its Regional Wage Boards, Office of the Secretary, Voluntary Arbitrator,
Court of Appeals and the Supreme Court

(4) execution and enforcement of final orders, decisions, resolutions or awards of no. (3) above
shall be considered not duly filed and the party so filing shall be notified of such finding in
writing by the Regional Branch Director.

On his part, the Conciliator-Mediator shall convince the party concerned to voluntarily
withdraw the notice without prejudice to further conciliation proceedings.

Otherwise, he shall recommend to the Regional Branch Director that the notice be treated
as a preventive mediation case.

xxx xxx xxx

xxx xxx xxx

c. Action on Notices Involving Issues Cognizable by the Grievance Machinery, Voluntary

Arbitration or the National Labor Relations Commission.

i) Disputes arising from the interpretation or implementation of a collective bargaining

agreement or from the interpretation or enforcement of company personnel policies shall be
referred to the grievance machinery as provided for under Art. 261 of the Labor Code xxx
(Emphasis supplied).

Same Article states that the:

1. "Commission,
2. its Regional Offices
3. Regional Directors of the DOLE
Shall:
not entertain disputes, grievances or matters under the exclusive and original
 jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and

shall immediately dispose and refer the same to the Grievance Machinery or Voluntary
Arbitration provided in the CBA."

Article 261 of the Labor Code, in relation to Section 6(c)(i), Rule VI of the NCMB Manual,
provides the manner in which the NCMB must resolve notices of strike that involve non-
strikeable issues.

And whether the notice of strike or lockout involves inter-union or intra-union disputes,
violation of labor standards laws or issues cognizable by the grievance machinery,
voluntary arbitration or the NLRC, the initial step is for the NCMB to consider the notice
of strike as not duly filed.

After the declaration that the notice of strike is "not duly filed," the labor dispute is to be
referred to voluntary arbitration pursuant to Article 261.

The University was:

1. deprived of a remedy that would have enjoined the Union strike

2. left without any recourse except to invoke the jurisdiction of the SOLE.

Court will not allow the no strike, no lockout, grievance machinery and voluntary
arbitration clauses found in CBAs to be circumvented by the simple expedient of filing of
a notice of strike or lockout.
A similar circumvention made possible by the inaction of the NCMB on the Universitys
Motion to Strike Out Notice of Strike and to Refer the Dispute to Voluntary Arbitration
will not be countenanced.
To rule otherwise would render meaningless:
1. Articles 261 and 262

2. voluntary arbitration clauses found in CBAs.

PHIMCO INDUSTRIES vs PILA

G.R. No. 170830 | August 11, 2010

Petitioner: PHIMCO INDUSTRIES, INC.

Respondents: PHIMCO INDUSTRIES LABOR ASSOCIATION (PILA), and individual

members of PILA

FACTS:

Phimco Industries Labor Association (PILA) is the duly authorized bargaining

representative of PHIMCOs daily-paid workers. The 47 individually named

respondents are PILA officers and members.

When the last collective bargaining agreement was about to expire on December

31, 1994, PHIMCO and PILA negotiated for its renewal. The negotiation resulted

in a deadlock on economic issues, mainly due to disagreements on salary

increases and benefits.

On March 9, 1995, PILA filed with NCMB a Notice of Strike on the ground of the

bargaining deadlock. PILA then staged a strike. PHIMCO filed with the NLRC a

petition for preliminary injunction and temporary restraining order (TRO), to

enjoin the strikers from preventing through force, intimidation and coercion

the ingress and egress of non-striking employees into and from the company

premises. NLRC issued an ex-parte TRO, effective for 20 days.

PHIMCO sent a letter to 36 union members, directing them to explain within 24

hours why they should not be dismissed for the illegal acts they committed

during the strike. Three days later the 36 union members were informed of

their dismissal.

PILA filed a complaint for unfair labor practice and illegal dismissal (illegal

dismissal case) with the NLRC. Acting Labor Secretary Jose S. Brillantes

assumed jurisdiction over the labor dispute, and ordered all the striking

employees (except those who were dismissed) to return to work.

 PHIMCO filed a Petition to Declare the Strike Illegal (illegal strike case) with the

NLRC, with a prayer for the dismissal of PILA officers and members who

knowingly participated in the illegal strike. PHIMCO claimed that the strikers

prevented ingress to and egress from the PHIMCO compound, thereby

paralyzing PHIMCOs operations.

Respondents countered that they complied with all the legal requirements for

the staging of the strike, they put up no barricade, and conducted their strike

peacefully, in an orderly and lawful manner, without incident.

ISSUE: Whether strike was legal NO

RATIO:

Despite the validity of the purpose of a strike and compliance with the

procedural requirements, a strike may still be held illegal where the means

employed are illegal. The means become illegal when they come within the

prohibitions under Article 264(e) of the Labor Code which provides: No person

engaged in picketing shall commit any act of violence, coercion or intimidation

or obstruct the free ingress to or egress from the employer's premises for lawful

purposes, or obstruct public thoroughfares.

Based on our examination of the evidence which the LA viewed differently from

the NLRC and the CA, we find the PILA strike illegal. While the strike

undisputably had not been marred by actual violence and patent intimidation,

the picketing that respondent PILA officers and members undertook as part of

their strike activities effectively blocked the free ingress to and egress from

PHIMCOs premises, thus preventing non-striking employees and company

vehicles from entering the PHIMCO compound. In this manner, the picketers

violated Article 264(e) of the Labor Code.

 To strike is to withhold or to stop work by the concerted action of employees as

a result of an industrial or labor dispute. The work stoppage may be

accompanied by picketing. While a strike focuses on stoppage of work, picketing

focuses on publicizing the labor dispute and its incidents to inform the public

of what is happening in the company struck against.

While the right of employees to publicize their dispute falls within the

protection of freedom of expression and the right to peaceably assemble to air,

these rights are by no means absolute. Protected picketing does not extend to

blocking ingress to and egress from the company premises.

Evidence showed how picket was conducted. While the picket was moving, it

was maintained so close to the company gates that it virtually constituted an

obstruction, especially when the strikers joined hands, as described by Aguilar,

or were moving in circles, hand-to-shoulder, as shown by the photographs. The

obstructive nature of the picket was aggravated by the placement of benches,

with strikers standing on top, directly in front of the open wing of the company

gates, clearly obstructing the entry and exit points of the company compound.

Notably, aside from non-strikers who wished to report for work, company

vehicles likewise could not enter and get out of the factory because of the

picket and the physical obstructions the respondents installed.

Also, the manner in which the respondent union officers and members

conducted the picket in the present case had created such an intimidating

atmosphere that non-striking employees and even company vehicles did not

dare cross the picket line, even with police intervention. Those who dared cross

the picket line were stopped.

In the determination of the liabilities of the individual respondents, the

applicable provision is Article 264(a) of the Labor Code: Any union officer who

knowingly participates in an illegal strike and any worker or union officer who
 knowingly participates in the commission of illegal acts during a strike may be

declared to have lost his employment status: Provided, That mere participation

of a worker in a lawful strike shall not constitute sufficient ground for

termination of his employment, even if a replacement had been hired by the

employer during such lawful strike.

HOWEVER, even if strike was illegal, PHIMCO violated the requirements of due

process of the Labor Code when it dismissed the respondents. Employer, despite

the just cause for dismissal, must pay the dismissed workers nominal damages

as indemnity for the violation of the workers right to statutory due process.

CASE TITLE: G & S TRANSPORT CORPORATION vs. TITO S. INFANTE, MELOR

VELASCO, JR., JJ. BORBO, and DANILO CASTAEDA

KEYWORDS:

AVIS TAXI, NAIA concessionaire

DOCTRINE:

A sit-down strike, or more aptly termed as a sympathetic strike, occurred when the

striking employees have no demands or grievances of their own, but they strike for

the purpose of directly or indirectly aiding others, without direct relation to the

advancement of the interest of the strikers.

FACTS

Petitioner was the exclusive coupon taxi concessionaire at the Ninoy Aquino

International Airport (NAIA). Respondents are employed drivers of the petitioner.

G & S claimed to have received from the CBU representative a letter-memorandum

demanding the dismissal from employment of Gonzales and Alzaga both drivers of

petitioner on the ground that they were found guilty of committing acts of disloyalty.

The petitioner dismissed them.

Upon learning of the incident, several drivers of petitioner stopped driving their taxi

cabs apparently in sympathy with their dismissed colleagues. Petitioner alleged that

the work stoppage constituted an illegal strike at the work premises. Furthermore,

petitioner averred that various illegal acts, such as stopping, barring and intimidating

other employees wishing to enter the work premises, were committed by the said

drivers that resulted in the paralyzation of petitioners business operation.

Petitioner ordered the striking workers to return to work but some of the drivers,

including respondents, refused to do so. Petitioner filed an action for illegal strike

before the Labor Arbiter while respondents filed for illegal dismissal.

PETITIONERS CONTENTION

Petitioner maintains that respondents knowingly and deliberately participated in the

illegal activities in the course of an illegal strike by the mere fact that they resolutely

defied the order directing them to report back to work and continued to stay outside

the premises, barricading the gates, heckling and intimidating employees who were

returning to work.

RESPONDENTS CONTENTION

Respondents however aver that there was no iota of evidence that would show that

they have trooped the line of the illegal strikers. Assuming arguendo that they

participated in the illegal strike, respondents argue that they should not be dismissed

because there was no proof that they committed illegal acts during the strike.

LA

Respondents found to have participated in the illegal strike and petitioner was

ordered to pay them separation pay in lieu of reinstatement but without backwages.

NLRC

The NLRC affirmed in toto the ruling of the Labor Arbiter.

CA

The Court of Appeals reversed the decisions of the NLRC and the Labor Arbiter. The

appellate court scored the Labor Arbiter because the latter failed to categorically rule

on the validity of respondents dismissal and instead stood content in simply stating

that respondents should not have been meted out the severest penalty of dismissal

for their inadequacies and wrongful actions. The appellate court went on to declare

respondents dismissal as illegal.

ISSUES

1) Whether or not respondents participated in the illegal strike and

2) Whether or not the order for the payment of separation pay, in lieu of

reinstatement without backwages, is proper.

RULING

1) Yes. No matter by what term the respondents complainants used in describing

their concerted action, i.e. [,] protest, sympathy or mere expression, their joint

action have successfully paralyzed the operations of G & S Transport, and this is

considered a strike.

2) Yes. Article 264 of the Labor Code, in providing for the consequences of an

illegal strike, makes a distinction between union officers and members who

participated therein. Thus, knowingly participating in an illegal strike is a valid

ground for termination of employment of a union officer. The law, however, treats

differently mere union members. Mere participation in an illegal strike is not a

sufficient ground for termination of the services of the union members. In the case at

bar, this Court is not convinced that the affidavits of petitioners witnesses

constitute substantial evidence to establish that illegal acts were committed by

respondents. Nowhere in their affidavits did these witnesses cite the particular illegal
acts committed by each individual respondent during the strike. Notably, no

questions during the hearing were asked relative to the supposed illegal acts.

Under the circumstances, respondents reinstatement without backwages suffices for

the appropriate relief. If reinstatement is no longer possible, given the lapse of

considerable time (17 years) from the occurrence of the strike, the award of

separation pay in lieu of reinstatement, is in order. #CALIPAY

MARIWASA MANUFACTURING v LEOGARDO (Narvasa, 1989)

QUICK FACTS: Dequila, a probationary utility worker of Mariwasa, agreed to have his
probationary period extended for another 3 months after the first 6 months, so that he may
have another chance to improve his performance and qualify as a regular worker. After the
extension, he was terminated.

FACTS:

Joaquin A. Dequila (or Dequilla) was hired on probation by Mariwasa Manufacturing, Inc.
as a general utility worker on January 10, 1979. After 6 months, he was informed that his
work was unsatisfactory and had failed to meet the required standards. To give him another
chance, and with Dequilas written consent, Mariwasa extended Dequilas probationary
period for another three months: from July 10 to October 9, 1979. Dequilas performance,
however, did not improve and Mariwasa terminated his employment at the end of the
extended period.

Dequila filed a complaint for illegal dismissal against Mariwasa and its VP for
Administration, Angel T. Dazo, and violation of Presidential Decrees Nos. 928 and 1389.

DIRECTOR OF MINISTRY OF LABOR: Complaint is dismissed. Termination is justified.

Thus, Dequila appeals to the Minister of Labor.

MINISTER OF LABOR: Deputy Minister Vicente Leogardo, Jr. held that Dequila was already
a regular employee at the time of his dismissal, thus, he was illegally dismissed. (Initial
order: Reinstatement with full backwages. Later amended to direct payment of Dequila's
backwages from the date of his dismissal to December 20, 1982 only.)

ISSUE: WON employer and employee may, by agreement, extend the probationary period of
employment beyond the six months prescribed in Art. 282 of the Labor Code?
RULING: YES, agreements stipulating longer probationary periods may constitute lawful
exceptions to the statutory prescription limiting such periods to six months.

The SC in its decision in Buiser vs. Leogardo, Jr. (1984) said that Generally, the
probationary period of employment is limited to six (6) months. The exception to this
general rule is when the parties to an employment contract may agree otherwise, such as
when the same is established by company policy or when the same is required by the
nature of work to be performed by the employee. In the latter case, there is recognition of
the exercise of managerial prerogatives in requiring a longer period of probationary
employment, such as in the present case where the probationary period was set for
eighteen (18) months, i.e. from May, 1980 to October, 1981 inclusive, especially where the
employee must learn a particular kind of work such as selling, or when the job requires
certain qualifications, skills experience or training.

In this case, the extension given to Dequila could not have been pre-arranged to avoid the
legal consequences of a probationary period satisfactorily completed. In fact, it was ex
gratia, an act of liberality on the part of his employer affording him a second chance to
make good after having initially failed to prove his worth as an employee. Such an act
cannot now unjustly be turned against said employer's account to compel it to keep on its
payroll one who could not perform according to its work standards.

By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived

any benefit attaching to the completion of said period if he still failed to make the grade
during the period of extension. By reasonably extending the period of probation, the
questioned agreement actually improved the probationary employee's prospects of
demonstrating his fitness for regular employment.

Petition granted. Order of Deputy Minister Leogardo reversed. Case for illegal dismissal is
dismissed.

Agabon vs NLRC (2004) G.R. 158693

Facts:

Private respondent Riviera Home Improvements, Inc. is engaged in the business of

selling and installing ornamental and construction materials. It employed petitioners

Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2,

1992 until February 23, 1999 when they were dismissed for abandonment of work.

Petitioners then filed a complaint for illegal dismissal and payment of money claims and on

December 28, 1999, the Labor Arbiter rendered a decision declaring the dismissals illegal

and ordered private respondent to pay the monetary claims.

Issue:

WON respondents dismissal is illegal and if not, entitles them benefits.

Held:

The dismissal is legal and entitles them of payment of benefits. Dismissals based on

just causes contemplate acts or omissions attributable to the employee while dismissals

based on authorized causes involve grounds under the Labor Code which allow the

employer to terminate employees. A termination for an authorized cause requires payment

of separation pay. When the termination of employment is declared illegal, reinstatement

and full back wages are mandated under Article 279. If reinstatement is no longer possible

where the dismissal was unjust, separation pay may be granted. Procedurally, (1) if the

dismissal is based on a just cause under Article 282, the employer must give the employee

two written notices and a hearing or opportunity to be heard if requested by the employee

before terminating the employment: a notice specifying the grounds for which dismissal is

sought a hearing or an opportunity to be heard and after hearing or opportunity to be

heard, a notice of the decision to dismiss; and (2) if the dismissal is based on authorized

causes under Articles 283 and 284, the employer must give the employee and the

Department of Labor and Employment written notices 30 days prior to the effectivity of his

separation. From the foregoing rules four possible situations may be derived: (1) the

dismissal is for a just cause under Article 282 of the Labor Code, for an authorized cause

under Article 283, or for health reasons under Article 284, and due process was observed;

(2) the dismissal is without just or authorized cause but due process was observed; (3) the

dismissal is without just or authorized cause and there was no due process; and (4) the

dismissal is for just or authorized cause but due process was not observed. In the fourth

situation, the dismissal should be upheld. While the procedural infirmity cannot be cured,

it should not invalidate the dismissal. However, the employer should be held liable for non-

compliance with the procedural requirements of due process. The present case squarely

falls under the fourth situation. The dismissal should be upheld because it was established

that the petitioners abandoned their jobs to work for another company. Private respondent,

however, did not follow the notice requirements and instead argued that sending notices to

the last known addresses would have been useless because they did not reside there
anymore. Unfortunately for the private respondent, this is not a valid excuse because the

law mandates the twin notice requirements to the employees last known address. Thus, it

should be held liable for non-compliance with the procedural requirements of due process.

The Court ruled that respondent is liable for petitioners holiday pay, service incentive leave

pay and 13th month pay without deductions. The evident intention of Presidential Decree

No. 851 is to grant an additional income in the form of the 13th month pay to employees

not already receiving the same so as to further protect the level of real wages from the

ravages of world-wide inflation. Clearly, as additional income, the 13th month pay is

included in the definition of wage under Article 97(f) of the Labor Code.

Jaka Food Processing vs. Pacot, G.R. No. 151378, March 28, 2005

Facts:

Respondents Darwin Pacot, Robert Parohinog, David Bisnar, Marlon Domingo, Rhoel
Lescano and Jonathan Cagabcab were earlier hired by petitioner JAKA Foods Processing
Corporation (JAKA, for short) until the latter terminated their employment on August 29,
1997 because the corporation was in dire financial straits. It is not disputed, however,
that the termination was effected without JAKA complying with the requirement under
Article 283 of the Labor Code regarding the service of a written notice upon the employees
and the Department of Labor and Employment at least one (1) month before the intended
date of termination. In time, respondents separately filed with the regional Arbitration
Branch of the National Labor Relations Commission (NLRC) complaints for illegal dismissal,
underpayment of wages and nonpayment of service incentive leave and 13 th month pay
against JAKA and its HRD Manager, Rosana Castelo. After due proceedings, the Labor
Arbiter rendered a decision declaring the termination illegal and ordering JAKA and its
HRD Manager to reinstate respondents with full backwages, and separation pay if
reinstatement is not possible. More specifically the decision dispositively reads: In time,
respondents separately filed with the regional Arbitration Branch of the National Labor
Relations Commission (NLRC) complaints for illegal dismissal, underpayment of wages and
nonpayment of service incentive leave and 13th month pay against JAKA and its HRD
Manager, Rosana Castelo. After due proceedings, the Labor Arbiter rendered a decision
declaring the termination illegal and ordering JAKA and its HRD Manager to reinstate
respondents with full backwages, and separation pay if reinstatement is not possible.

Issues:

Does the absence of the notice of hearing in dismissal due to authorize cause amounts to
illegal dismissal?
Are the dismissed employees, because of companys serious losses, entitled to separation
pay?

Ruling:

A dismissal for just cause under Article 282 implies that the employee concerned has
committed, or is guilty of, some violation against the employer, i.e. the employee has
committed some serious misconduct, is guilty of some fraud against the employer, or, as in
Agabon, he has neglected his duties. Thus, it can be said that the employee himself
initiated the dismissal process. On another breath, a dismissal for an authorized cause
under Article 283 does not necessarily imply delinquency or culpability on the part of the
employee. Instead, the dismissal process is initiated by the employers exercise of his
management prerogative, i.e. when the employer opts to install labor saving devices, when
he decides to cease business operations or when, as in this case, he undertakes to
implement a retrenchment program. The clear-cut distinction between a dismissal for just
cause under Article 282 and a dismissal for authorized cause under Article 283 is further
reinforced by the fact that in the first, payment of separation pay, as a rule, is not required,
while in the second, the law requires payment of separation pay. For these reasons, there
ought to be a difference in treatment when the ground for dismissal is one of the just
causes under Article 282, and when based on one of the authorized causes under Article
283. Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under
Article 282 but the employer failed to comply with the notice requirement, the sanction to
be imposed upon him should be tempered because the dismissal process was, in effect,
initiated by an act imputable to the employee; and (2) if the dismissal is based on an
authorized cause under Article 283 but the employer failed to comply with the notice
requirement, the sanction should be stiffer because the dismissal process was initiated by
the employers exercise of his management prerogative.

It is, therefore, established that there was ground for respondents dismissal, i.e.,
retrenchment, which is one of the authorized causes enumerated under Article 283 of the
Labor Code. Likewise, it is established that JAKA failed to comply with the notice
requirement under the same Article. Considering the factual circumstances in the instant
case and the above ratiocination, we, therefore, deem it proper to fix the indemnity at
P50,000.00. We likewise find the Court of Appeals to have been in error when it ordered
JAKA to pay respondents separation pay equivalent to one (1) month salary for every year of
service. This is because in Reahs Corporation vs. NLRC we made the following declaration:
The rule, therefore, is that in all cases of business closure or cessation of operation or
undertaking of the employer, the affected employee is entitled to separation pay. This is
consistent with the state policy of treating labor as a primary social economic force,
affording full protection to its rights as well as its welfare. The exception is when the
closure of business or cessation of operations is due to serious business losses or financial
reverses; duly proved, in which case, the right of affected employees to separation pay is
lost for obvious reasons. xxx.
Industrial Timber Corp. vs. Ababon, G.R. No. 164518, Janury 25, 2006 and March
28, 2007

Facts:

Industrial Plywood Group Corporation (IPGC) is the owner of a plywood plant located at
Agusan, Pequeo, Butuan City, leased to Industrial Timber Corporation (ITC) on August 30,
1985 for a period of five years. Thereafter, ITC commenced operation of the plywood plant
and hired 387 workers. On March 16, 1990, ITC notified the Department of Labor and
Employment (DOLE) and its workers that effective March 19, 1990 it will undergo a no
plant operation due to lack of raw materials and will resume only after it can secure logs
for milling. Meanwhile, IPGC notified ITC of the expiration of the lease contract in August
1990 and its intention not to renew the same. On June 26, 1990, ITC notified the DOLE
and its workers of the plants shutdown due to the non-renewal of anti-pollution permit
that expired in April 1990. This fact and the alleged lack of logs for milling constrained ITC
to lay off all its workers until further notice. This was followed by a final notice of closure or
cessation of business operations on August 17, 1990 with an advice for all the workers to
collect the benefits due them under the law and CBA. On October 15, 1990, IPGC took
over the plywood plant after it was issued a Wood Processing Plant Permit No. WPR-1004-
081791-042, which included the anti-pollution permit, by the Department of Environment
and Natural Resources (DENR) coincidentally on the same day the ITC ceased operation of
the plant. This prompted Virgilio Ababon, et al. to file a complaint against ITC and IPGC for
illegal dismissal, unfair labor practice and damages. They alleged, among others, that the
cessation of ITCs operation was intended to bust the union and that both corporations are
one and the same entity being controlled by one owner.

Issue:

Whether or not Ababon, et al. were illegally dismissed due to the closure of ITCs business;
and whether they are entitled to separation pay, backwages, and other monetary awards.

Ruling:

Under Article 283 of the Labor Code, three requirements are necessary for a valid cessation
of business operations: (a) service of a written notice to the employees and to the DOLE at
least one month before the intended date thereof; (b) the cessation of business must be
bona fide in character; and (c) payment to the employees of termination pay amounting to
one month pay or at least one-half month pay for every year of service, whichever is higher.
As borne out from the records, respondent ITC actually underwent no plant operation
since 19 March 1990 due to lack of log supply. This fact is admitted by complainants
(Minutes of hearing, 28 October 1991). Since then several subsequent incidents prevented
respondent ITC to resume its business operations e.g. expiration and non-renewal of the
wood processing plant permit, anti-pollution permit, and the lease contract on the plywood
plant.
Without the raw materials respondent ITC has nothing to produce. Without the permits it
cannot lawfully operate the plant. And without the contract of lease respondent ITC has no
option but to cease operation and turn over the plant to the lessor. Having established that
ITCs closure of the plywood plant was done in good faith and that it was due to causes
beyond its control, the conclusion is inevitable that said closure is valid. Consequently,
Ababon, et al. could not have been illegally dismissed to be entitled to full backwages.
Thus, we find it no longer necessary to discuss the issue regarding the computation of their
backwages. However, they are entitled to separation pay equivalent to one month pay or at
least one-half month pay for every year of service, whichever is higher. Although the closure
was done in good faith and for valid reasons, The Supreme Court find that ITC did not
comply with the notice requirement. While an employer is under no obligation to conduct
hearings before effecting termination of employment due to authorized cause, however, the
law requires that it must notify the DOLE and its employees at least one month before the
intended date of closure. In the case at bar, ITC notified its employees and the DOLE of the
no plant operation on March 16, 1990 due to lack of raw materials. This was followed by a
shut down notice dated June 26, 1990 due to the expiration of the anti-pollution permit.
However, this shutdown was only temporary as ITC assured its employees that they could
return to work once the renewal is acted upon by the DENR. On August 17, 1990, the ITC
sent its employees a final notice of closure or cessation of business operations to take effect
on the same day it was released. We find that this falls short of the notice requirement for
termination of employment due to authorized cause considering that the DOLE was not
furnished and the notice should have been furnished both the employees and the DOLE at
least one month before the intended date of closure. In Agabon v. National Labor Relations
Commission and Jaka Food Processing Corporation v. Pacot, the Court sustained the
dismissals for just cause under Article 282 and for authorized cause under Article 283 of
the Labor Code, respectively, despite non-compliance with the statutory requirement of
notice and hearing. The grounds for the dismissals in those cases, namely, neglect of duty
and retrenchment, remained valid because the non-compliance with the notice and hearing
requirement in the Labor Code did not undermine the validity of the grounds for the
dismissals. Indeed, to invalidate a dismissal merely because of a procedural defect creates
absurdity and runs counter to public interest. Where the dismissal is based on an
authorized cause under Article 283 of the Labor Code but the employer failed to comply
with the notice requirement, the sanction should be stiff as the dismissal process was
initiated by the employers exercise of his management prerogative, as opposed to a
dismissal based on a just cause under Article 282 with the same procedural infirmity
where the sanction to be imposed upon the employer should be tempered as the dismissal
process was, in effect, initiated by an act imputable to the employee.

Maya Farms Employees Organization v. NLRC, 239 SCRA 508

F: Private respondents Maya Farms, Inc. and Maya Realty and Livestock Corporation belong
to the Liberty Mills group of companies whose undertakings include the operation of a meat
processing plant which produces ham, bacon, cold cuts, sausages and other meat and
poultry products.

Petitioners, on the other hand, are the exclusive bargaining agents of the employees of Maya
Farms, Inc. and the Maya Realty and Livestock Corporation.

On April 12, 1991, private respondents announced the adoption of an early retirement
program as a cost-cutting measure considering that their business operations suffered
major setbacks over the years. The program was voluntary and could be availed of only by
employees with at least eight (8) years of service. Dialogues were thereafter conducted to
give the parties an opportunity to discuss the details of the program. Accordingly, the
program was amended to reduce the minimum requirement of eight (8) years of service to
only five (5) years.

However, the response to the program was nil. There were only a few takers. To avert
further losses, private respondents were constrained to look into the companies'
organizational set-up in order to streamline operations. Consequently, the early retirement
program was converted into a special redundancy program intended to reduce the work
force to an optimum number so as to make operations more viable.

In December 1991, a total of sixty-nine (69) employees from the two companies availed of
the special redundancy program. On January 17, 1992, the two companies sent letters to
sixty-six (66) employees informing them that their respective positions had been declared
redundant. The notices likewise stated that their services would be terminated effective
thirty (30) days from receipt thereof. Separation benefits, including the conversion of all
earned leave credits and other benefits due under existing CBAs were thereafter paid to
those affected.

On January 24, 1992, a notice of strike was filed by the petitioners which accused private
respondents, among others, of unfair labor practice, violation of CBA and discrimination.
Conciliation proceedings were held by the National Conciliation and Mediation Board
(NCMB) but the parties failed to arrive at a settlement.

On February 6, 1992, the two companies filed a petition with the Secretary of Labor and
Employment asking the latter to assume jurisdiction over the case and/or certify the same
for compulsory arbitration. Thus, on February 12, 1992, the then Acting Labor Secretary
(now Secretary) Nieves Confesor certified the case to herein public respondent for
compulsory arbitration.

On March 4, 1992, the parties were called to a hearing to identify the issues involved in the
case. Thereafter, they were ordered to submit their respective position papers.
In their position paper, petitioners averred that in the dismissal of sixty-six (66) union
officers and members on the ground of redundancy, private respondents circumvented the
provisions in their CBA. Petitioners also alleged that the companies' claim that they were in
economic crisis was fabricated because in 1990, a net income of over 83 million pesos was
realized by Liberty Flour Mills Group of Companies. Invoking the workers' constitutional
right to security of tenure, petitioners prayed for the reinstatement of the sixty-six (66)
employees and the payment of attorney's fees as they were constrained to hire the services
of counsel in order to protect the workers' rights.

On their part, private respondents contend that their decision to implement a special
redundancy program was an exercise of management prerogative which could not be
interfered with unless it is shown to be tainted with bad faith and ill motive. Private
respondents explained that they had no choice but to reduce their work force, otherwise,
they would suffer more losses. Furthermore, they denied that the program violated CBA
provisions. NLRC favored the company.

I: WON there was grave abuse of discretion amounting to lack or in excess of jurisdiction
with the factual findings of public respondent

H: The termination of the sixty-six employees was done in accordance with Article 283 of
the Labor Code. The basis for this was the companies' study to streamline operations so as
to make them more viable. Positions which overlapped each other, or which are in excess of
the requirements of the service, were declared redundant. We fully agree with the findings
and conclusions of the public respondent on the issue of termination.

A close examination of the positions retained by management show that said positions such
as egg sorter, debonner were but the minimal positions required to sustain the limited
functions/operations of the meat processing department. In the absence of any evidence to
prove bad faith on the part of management in arriving at such decision, which records on
hand failed to show in instant case, the rationality of the act of management in this regard
must be sustained.

The rule is well-settled that labor laws discourage interference with an employer's judgment
in the conduct of his business. Even as the law is solicitous of the welfare of employees, it
must also protect the right of an employer to exercise what are clearly management
prerogatives. As long as the company's exercise of the same is in good faith to advance its
interest and not for the purpose of defeating or circumventing the rights of employees under
the laws or valid agreements, such exercise will be upheld.

Finally, contrary to petitioners' contention, there is nothing on record to show that the 30-
day notice of termination to the workers was disregarded and that the same substituted
with separation pay by private respondents. As found by public respondent, written notices
of separation were sent to the employees on January 17, 1992. The notices expressly stated
that the termination of employment was to take effect one month from receipt thereof.
Therefore, the allegation that separation pay was given in lieu of the 30-day notice required
by law is baseless. Petition dismissed.

INTERTROD MARITIME vs. NLRC and DE LA CRUZ

DECEMBER 19, 2016 ~ VBDIAZ

G.R. No. 81087 June 19, 1991

INTERTROD MARITIME, INC. and TROODOS SHIPPING CO., petitioners,

vs.

NATIONAL LABOR RELATIONS COMMISSION and ERNESTO DE LA CRUZ, respondents.

FACTS: On 10 May 1982, private respondent Ernesto de la Cruz signed a shipboard

employment contract with petitioner Troodos Shipping Company as principal and petitioner

Intertrod Maritime, Inc., as agent to serve as Third Engineer on board the M/T BREEDEN

for a period of twelve (12) months with a basic monthly salary of US$950.00. 1

Private respondent eventually boarded a sister vessel, M/T AFAMIS and proceeded to work

as the vessels Third Engineer under the same terms and conditions of his employment

contract previously referred to. 2

On 26 August 1982, while the ship (M/T Afamis) was at Port Pylos, Greece, private

respondent requested for relief, due to personal reason. 3 The Master of the ship approved

his request but informed private respondent that repatriation expenses were for his account

and that he had to give thirty (30) days notice in view of the Clause 5 of the employment

contract so that a replacement for him (private respondent) could be arranged. 4

On 30 August 1982, while the vessel was at Port Said in Egypt and despite the fact that it

was only four (4) days after private respondents request for relief, the Master signed him

off and paid him in cash all amounts due him less the amount of US$780.00 for his

repatriation expenses, as evidenced by the wages account signed by the private respondent.

On his return to the Philippines, private respondent filed a complaint with the National

Seamen Board (NSB)(now POEA) charging petitioners for breach of employment contract
and violation of NSB rules and regulations. 6Private respondent alleged that his request

for relief was made in order to take care of a Filipino member of the crew of M/T AFAMIS

who was hospitalized on 25 August 1982 in Athens, Greece. However, the Master of the

ship refused to let him immediately disembark in Greece so that the reason for his request

for relief ceased to exist. Hence, when the Master of the ship forced him to step out in Egypt

despite his protestations to the contrary, there being no more reason to request for relief, an

illegal dismissal occurred and he had no other recourse but to return to the Philippines at

his own expense.

POEA rendered a decision dismissing the complaint for lack of merit. 9 On appeal to the

NLRC, the decision was reversed. Hence, this petition.

ISSUE: Whether or not complainants termination is illegal.

HELD: NO

Article 21(c) of the Labor Code requires that the Philippine Overseas Employment

Administration (formerly NSB) should approve and verify a contract for overseas

Employment. 11 A contract, which is approved by the National Seamen Board, such as the

one in this case, is the law between the contracting parties; and where there is nothing in it

which is contrary to law, morals, good customs, public policy or public order, the validity of

said contract must be sustained. 1

Paragraph 5 of the Employment Contract between petitioners and private respondent

Ernesto de la Cruz provides as follows:

5. That, if the seaman decide to terminate his contract prior to the expiration of the

service period as stated and defined in paragraph 4 of this Employment Contract,

without due cause, he will give the Master thirty (30) days notice and agree to allow

his repatriation expenses to be deducted from wages due him.

When the Master approved his request for relief, the Master emphasized that private

respondent was required to give thirty (30) days notice and to shoulder his own repatriation

expenses. Approval of his request for relief, therefore, did not constitute a waiver by

petitioners of the provisions of the contract, as private respondent would have us believe,
for it was made clear to him that the provisions of the contract, insofar as the thirty (30)

days notice and repatriation expenses were concerned, were to be enforced.

Resignation is the voluntary act of an employee who finds himself in a situation

where he believes that personal reasons cannot be sacrificed in favor of the exigency

of the service, then he has no other choice but to disassociate himself from his

employment. 16 The employer has no control over resignations and so, the

notification requirement was devised in order to ensure that no disruption of work

would be involved by reason of the resignation. This practice has been recognized

because every business enterprise endeavors to increase its profits by adopting a

device or means designed towards that goal.

Resignations, once accepted and being the sole act of the employee, may not be

withdrawn without the consent of the employer. In the instant case, the Master had

already accepted the resignation and, although the private respondent was being required

to serve the thirty (30) days notice provided in the contract, his resignation was already

approved. Private respondent cannot claim that his resignation ceased to be effective

because he was not immediately discharged in Port Pylos, Greece, for he could no longer

unilaterally withdraw such resignation. When he later signified his intention of continuing

his work, it was already up to the petitioners to accept his withdrawal of his resignation.

The mere fact that they did not accept such withdrawal did not constitute illegal dismissal

for acceptance of the withdrawal of the resignation was their (petitioners) sole prerogative.

Once an employee resigns and his resignation is accepted, he no longer has any right

to the job. If the employee later changes his mind, he must ask for approval of the

withdrawal of his resignation from his employer, as if he were re-applying for the job. It will

then be up to the employer to determine whether or not his service would be continued. If

the employer accepts said withdrawal, the employee retains his job. If the employer does

not, as in this case, the employee cannot claim illegal dismissal for the employer has the

right to determine who his employees will be. To say that an employee who has resigned
is illegally dismissed, is to encroach upon the right of employers to hire persons who

will be of service to them.

Under the terms of the employment contract, it is the ships Master who determines where

a seaman requesting relief may be signed off. It is, therefore, erroneous for private

respondent to claim that his resignation was effective only in Greece and that because he

was not immediately allowed to disembark in Greece (as the employer wanted compliance

with the contractual conditions for termination on the part of the employee), the resignation

was to be deemed automatically withdrawn.

PETITION GRANTED.

Serrano, v. CA [ G.R. No. 139420, August 15, 2001]

FACTS: From 1974 to 1991, A Company, the local agent of foreign corporation B Company,

deployed petitioner Serrano as a seaman to Liberian, British and Danish ships. As

petitioners was on board a ship most of the time, respondent Maersk offered to send

portions of petitioners salaryto his family in the Philippines by money order. Petitioner

agreed and from 1977 to 1978, he instructed respondent Maersk to send money orders to

his family. Respondent Maersk also deducted various amounts from hissalary for

Danish Social Security System (SSS), welfare contributions, ship clubs, and SSS medicate.

Petitioners family failed to received the money orders petitioners sent through

respondent Maersk. Upon learning this in 1978, petitioners demanded that

respondent Maersk pay him the amounts the latter deducted from his salary, which request

were ignored. Whenever he returned to the Philippines, petitioners follow up his money

claims but he would be told to return after several weeks while respondent Maersk would

hire him again to board another one of their vessels for about a year.

Finally, in October 1993, petitioner wrote to respondent Maersk demanding immediate

payment to him of the total amount of the money orders deducted from his salary from

1977 to 1978. On November 11, 1993, B company replied to petitioner that they keep

accounting documents only for a certain number of years, thus data on his money claims

from 1977 to 1978 were no longer declined petitioners demand for payment. In April 1994,
petitioners filed a complaint for collection of the total amount of the unsent money orders

and illegal salary deductions against the respondentsMaersk in the Philippine

Overseas Employment Agency (POEA). The NLRCdismissed within three years from the time

the cause of action accrued, otherwise they shall be forever berried.

ISSUE: Did the money claim of petitioner prescribe?

HELD: No. Petitioners cause of action accrued only in 1993 when respondent A.P Moller

wrote to him that its accounting records showed it had no outstanding money orders and

that his case was considered outdated. Thus the three (3) years prescriptive period should

be counted from 1993 and not 1978 and since his complaint was filed in 1994, he claims

that it has not prescribed. It is settled jurisprudence that a cause of action has three

elements, to wit (1) a right in favor of the plaintiff by whatever means and under whatever

law it arises or is created; 2) an obligation on the part of the named defendant to respect or

not to violate such right, and 3) an act or omission on the part of such defendant volatile of

the right of the plaintiff or constituting a branch of the obligation of thedefendant to the

plaintiff. In October 1993, Serrano finally demanded in writing payment of the unsent

money orders. Then and only then was the claim categorically denied by respondent. AP.

Moller in its letter dated November 22, 1993. Following the Baliwag Transit ruling (1989),

petitioners cause of action accrued only upon respondent. AP. Mollers definite denial of his

claim in November 1993. Having filed his action five (5) months thereafter or in April 1994,

we holds that it was filed within the three year (3) prescriptive period provided in Article

291 of the Labor Code.

PLDT v. Pingol, G.R. No. 182622, September 8, 2010

Facts:

In 1979, respondent Roberto R. Pingol (Pingol) was hired by petitioner PLDT in 1979, as a

maintenance technician. On April 13, 1999, while still under the employ of PLDT, Pingol

was admitted at The Medical City, Mandaluyong City, for paranoid personality disorder
due to financial and marital problems. He was discharged from the hospital. Thereafter, he

reported for work but frequently absented himself due to his poor mental condition.

Pingol was absent from work without official leave from September 16, 1999 to December

31, 1999. PLDT, sent him notices with a stern warning that he would be dismissed from

employment if he continued to be absent without official leave pursuant to PLDT Systems

Practice A-007 which provides that Absence without authorized leaves for seven (7)

consecutive days is subject to termination from the service. January 1, 2000, PLDT

terminated his services on the grounds of unauthorized absences and abandonment of

office.

On March 29, 2004, four years later, Pingol filed a Complaint for Constructive Dismissal

and Monetary Claims[6] against PLDT. In his complaint, he alleged that he was hastily

dismissed from his employment on January 1, 2000. In response, PLDT filed a motion to

dismiss claiming, among others, that respondents cause of action had already prescribed

as the complaint was filed four (4) years and three (3) months after his dismissal.

Labor Arbiter (LA) issued an order granting petitioners Motion to Dismiss on the ground of

prescription. As correctly cited by (PLDT), as ruled by the Supreme Court in the case of

Callanta vs. Carnation Phils., 145 SCRA 268, the complaint for illegal dismissal must be

filed within four (4) years from and after the date of dismissal.

The NLRC in its November 15, 2006 Resolution reversed the LAs resolution and favored

Pingol. Let the entire records of the case be REMANDED to the Labor Arbiter a quo for

further proceedings.

Issues:

Whether or not respondent Pingol filed his complaint for constructive dismissal and money

claims within the prescriptive period of four (4) years as provided in Article 1146 of the Civil

Code[11][12] respectively and three (3) years as provided in Article 291 of the Labor Code,

When is the pivotal date when the cause of action of respondent Pingol accrued?

Ruling:

Parties apparently do not dispute the applicable prescriptive period. Article 1146 of the

New Civil Code provides:

Art. 1146. The following actions must be instituted within four years:
(1) Upon an injury to the rights of the plaintiff;

In Callanta v. Carnation,[16] when one is arbitrarily and unjustly deprived of his job or

means of livelihood, the action instituted to contest the legality of one's dismissal from

employment constitutes, in essence, an action predicated "upon an injury to the rights of

the plaintiff," as contemplated under Art. 1146 of the New Civil Code, which must be

brought within four (4) years.

With regard to the prescriptive period for money claims, Article 291 of the Labor Code

states:

Article 291. Money Claims. All money claims arising from employer-employee relations

accruing during the effectivity of this Code shall be filed within three (3) years from the

time the cause of action accrued; otherwise they shall be barred forever.

It is a settled jurisprudence that a cause of action has three (3) elements, to wit: (1) a right

in favor of the plaintiff by whatever means and under whatever law it arises or is created;

(2) an obligation on the part of the named defendant to respect or not to violate such right;

and (3) an act or omission on the part of such defendant violative of the right of the plaintiff

or constituting a breach of the obligation of the defendant to the plaintiff.

Pingol asserts that his complaint was filed within the prescriptive period of four (4) years.

He claims that his cause of action did not accrue on January 1, 2000 because he was not

categorically and formally dismissed or his monetary claims categorically denied by

petitioner PLDT on said date. Further, respondent Pingol posits that the continuous follow-

up of his claim with petitioner PLDT from 2001 to 2003 should be considered in the

reckoning of the prescriptive period.

Petitioner PLDT, on the other hand, contends that respondent Pingol was dismissed from

the service on January 1, 2000 and such fact was even alleged in the complaint he filed

before the LA. He never contradicted his previous admission that he was dismissed on

January 1, 2000. Such admitted fact does not require proof.

The Court agrees with petitioner PLDT. Judicial admissions made by parties in the

pleadings, or in the course of the trial or other proceedings in the same case are conclusive

and so does not require further evidence to prove them. These admissions cannot be

contradicted unless previously shown to have been made through palpable mistake or that
no such admission was made.[18] In Pepsi Cola Bottling Company v. Guanzon,] it was

written: that the dismissal of the private respondent's complaint was still proper since it

is apparent from its face that the action has prescribed. Private respondent himself alleged

in the complaint that he was unlawfully dismissed in 1979 while the complaint was filed

only on November 14, 1984. xxx (Emphasis supplied. Citations omitted.)

Pingol himself alleged the date January 1, 2000 as the date of his dismissal in his

complaint[20] filed on March 29, 2004, exactly four (4) years and three (3) months later.

Respondent never denied making such admission or raised palpable mistake as the reason

therefor. Thus, the petitioner correctly relied on such allegation in the complaint to move for

the dismissal of the case on the ground of prescription.

The Labor Code has no specific provision on when a claim for illegal dismissal or a

monetary claim accrues. Thus, the general law on prescription applies. Article 1150 of the

Civil Code states:

Article 1150. The time for prescription for all kinds of actions, when there is no special

provision which ordains otherwise, shall be counted from the day they may be brought.

(Emphasis supplied)

The day the action may be brought is the day a claim starts as a legal possibility. In the

present case, January 1, 2000 was the date that respondent Pingol was not allowed to

perform his usual and regular job as a maintenance technician. Respondent Pingol cited

the same date of dismissal in his complaint before the LA. As, thus, correctly ruled by the

LA, the complaint filed had already prescribed.

Respondent claims that between 2001 and 2003, he made follow-ups with PLDT

management regarding his benefits. This, to his mind, tolled the running of the prescriptive

period. The rule in this regard is covered by Article 1155 of the Civil Code. Its applicability

in labor cases was upheld in the case of International Broadcasting Corporation v.

Panganiban where it was written:

Like other causes of action, the prescriptive period for money claims is subject to

interruption, and in the absence of an equivalent Labor Code provision for determining

whether the said period may be interrupted, Article 1155 of the Civil Code may be

applied, to wit:
ART. 1155. The prescription of actions is interrupted when they are filed before the Court,

when there is a written extrajudicial demand by the creditors, and when there is any

written acknowledgment of the debt by the debtor. Thus, the prescription of an action is

interrupted by (a) the filing of an action, (b) a written extrajudicial demand by the creditor,

and (c) a written acknowledgment of the debt by the debtor.

Pingol never made any written extrajudicial demand. Neither did petitioner make any

written acknowledgment of its alleged obligation. Thus, the claimed follow-ups could not

have validly tolled the running of the prescriptive period. It is worthy to note that

respondent never presented any proof to substantiate his allegation of follow-ups.

Unfortunately, respondent Pingol has no one but himself to blame for his own predicament.

By his own allegations in his complaint, he has barred his remedy and extinguished his

right of action. Although the Constitution is committed to the policy of social justice and

the protection of the working class, it does not necessary follow that every labor dispute will

be automatically decided in favor of labor. The management also has its own rights. Out of

Its concern for the less privileged in life, this Court, has more often than not inclined, to

uphold the cause of the worker in his conflict with the employer. Such leaning, however,

does not blind the Court to the rule that justice is in every case for the deserving, to be

dispensed in the light of the established facts and applicable law and doctrine.

ASIAN ALCOHOL CORPORATION VS. NATIONAL LABOR RELATIONS COMMISSION

305 SCRA 416 J. PUNO

FACTS

In September, 1991, the Parsons family, who originally owned the controlling stocks

in Asian Alcohol, sold their majority rights to Prior Holdings, Inc. 2. The next month, Prior

Holdings took over its management and operation. 3. To thwart further losses, Prior

Holdings implemented are organizational plan and other cost-saving measures. 4. Some one

hundred seventeen (117) employees out of a total workforce of three hundred sixty (360)

were separated. 5. Seventy two (72) of them occupied redundant positions that were
abolished. Of these positions, twenty one (21) held by union members and fifty one (51) by

nonunion members. 6. The six (6) private respondents are among those union members 5

whose positions were abolished due to redundancy. 7. On December 18, 1992 the six (6)

private respondents filed with the NLRC complaints for illegal dismissal with a prayer for

reinstatement with backwages, moral damages and attorney's fees. 8. They alleged that

Asian Alcohol used the retrenchment program as a subterfuge for union busting. They

claimed that they were singled out for separation by reason of their active participation in

the union. They also asseverated that Asian Alcohol was not bankrupt as it has engaged in

an aggressive scheme of contractual hiring. 9. The executive Labor Arbiter dismissed the

complainants. Private respondents appealed to the NLRC. NLRC ruled in favor of private

respondents. Asian Alcohol moved for reconsideration of the foregoing decision. On

September 25, 1997, the NLRC denied the motion.

ISSUE

Were the private respondents illegally dismissed?

HELD

NO. The right of management to dismiss workers during periods of business

recession and to install labor saving devices to prevent losses is governed by Art. 283 of the

labor Code, as amended. Under Art. 283, retrenchment and redundancy are just causes for

the employer to terminate the services of workers to preserve the viability of the business.

In exercising its right, however, management must faithfully comply with the substantive

and procedural requirements laid down law and jurisprudence. In the instant case, private

respondents never contested the veracity of the audited financial documents proffered by

Asian Alcohol before the Executive Labor Arbiter. Neither did they object to their

admissibility. We find that the reorganizational plan and comprehensive cost-saving

program to turn the business around were not designed to bust the union of the private

respondents. Retrenched were one hundred seventeen (117) employees. Seventy two (72) of

them including private respondents were separated because their positions had become

redundant. Redundancy exists when the service capability of the work force is in excess of

what is reasonably needed to meet the demands on the enterprise. A redundant position is

one rendered superfluous by any number of factors, such as overhiring of workers,

decreased volume of business, dropping of a particular product line previously

manufactured by the company or phasing out of a service activity priorly undertaken by the

business. For the implementation of a redundancy program to be valid, the employer must

comply with the following requisites: 1. written notice served on both the employees and the

Department of Labor and Employment at least one month prior to the intended date of

retrenchment;

KING OF KINGS TRANSPORT INC., CLAIRE DELA FUENTE and MELISSA

LIM, petitioners,

vs.

SANTIAGO O. MAMAC, respondent.

FACTS: Petitioner KKTI is a corporation engaged in public transportation and managed by

Claire Dela Fuente and Melissa Lim. Respondent was a conductor for Don Mariano Transit

Corporation (DMTC). He was one of the few people who established Damayan ng mga

Manggagawa, Tsuper at Conductor-Transport Workers Union. Pending the unions

certification election, respondent was transferred to KKTI. The KKTI employees later

organized the Kaisahan ng mga Kawani sa King of Kings (KKKK) which was registered with

DOLE. Respondent was elected KKKK president.

Upon audit of the October 28, 2001 Conductors Report of respondent, KKTI noted an

irregularity. It discovered that respondent declared several sold tickets as returned tickets

causing KKTI to lose an income of eight hundred and ninety pesos. While no irregularity

report was prepared on the October 28, 2001 incident, KKTI nevertheless asked respondent

to explain the discrepancy. In his letter, respondent said that the erroneous declaration in

his October 28, 2001 Trip Report was unintentional. He explained that during that days

trip, the windshield of the bus assigned to them was smashed; and they had to cut short

the trip in order to immediately report the matter to the police. As a result of the incident,

he got confused in making the trip report.

On November 26, 2001, respondent received a letter terminating his employment effective

November 29, 2001. The dismissal letter alleged that the October 28, 2001 irregularity was
an act of fraud against the company. KKTI also cited as basis for respondents dismissal the

other offenses he allegedly committed since 1999.

After that, he filed an action for illegal dismissal, among other claims. He denied

committing any infraction and alleged that his dismissal was intended to bust union

activities. Moreover, he claimed that his dismissal was effected without due process.

KKTI averred that it had observed due process in dismissing respondent and maintained

that respondent was not entitled to his money claims such as service incentive leave and

13th-month pay because he was paid on commission or percentage basis.

LABOR ARBITER: he was validly dismissed

NLRC: Affirmed. CA held that there was just cause for respondents dismissal. It ruled that

respondents act in declaring sold tickets as returned tickets x x x constituted fraud or acts

of dishonesty justifying his dismissal.

ISSUE: WON respondent was given due process (procedural)

HELD: NO. There was failure to observe the requirements of due process

Due process under the Labor Code involves two aspects: first, substantivethe valid and

authorized causes of termination of employment under the Labor Code; and second,

proceduralthe manner of dismissal.

Section 2(d) of Rule I of Book VI of the Omnibus Rules Implementing the Labor

Code provides:

SEC. 2. Standards of due process; requirements of notice.In all cases of termination of

employment, the following standards of due process shall be substantially observed:

1. For termination of employment based on just causes as defined in Article 282 of the

Code:

(a) A written notice served on the employee specifying the ground or grounds for

termination, and giving said employee reasonable opportunity within which to explain his

side.

(b) A hearing or conference during which the employee concerned, with the assistance of

counsel if he so desires is given opportunity to respond to the charge, present his evidence,

or rebut the evidence presented against him.

(c) A written notice of termination served on the employee, indicating that upon due

consideration of all the circumstances, grounds have been established to justify his

termination.

1. The first written notice to be served on the employees should contain the specific

causes or grounds for termination against them, and a directive that the employees

are given the opportunity to submit their written explanation within a reasonable

period. Reasonable opportunity under the Omnibus Rules means every kind of

assistance that management must accord to the employees to enable them to prepare

adequately for their defense.15 This should be construed as a period of at least five

(5) calendar days from receipt of the notice to give the employees an opportunity to

study the accusation against them, consult a union official or lawyer, gather data and

evidence, and decide on the defenses they will raise against the complaint. Moreover,

in order to enable the employees to intelligently prepare their explanation and

defenses, the notice should contain a detailed narration of the facts and

circumstances that will serve as basis for the charge against the employees. A general

description of the charge will not suffice. Lastly, the notice should specifically

mention which company rules, if any, are violated and/or which among the grounds

under Art. 282 is being charged against the employees.

2. After serving the first notice, the employers should schedule and conduct a hearing

or conference wherein the employees will be given the opportunity to: (1) explain and

clarify their defenses to the charge against them; (2) present evidence in support of

their defenses; and (3) rebut the evidence presented against them by the

management. During the hearing or conference, the employees are given the chance

to defend themselves personally, with the assistance of a representative or counsel of

their choice. Moreover, this conference or hearing could be used by the parties as an

opportunity to come to an amicable settlement.

3. After determining that termination of employment is justified, the employers shall

serve the employees a written notice of termination indicating that: (1) all
 circumstances involving the charge against the employees have been considered; and

(2) grounds have been established to justify the severance of their employment.

Respondent was not issued a written notice charging him of committing an infraction. A

verbal appraisal of the charges against an employee does not comply with the first notice

requirement.

The court observed from the irregularity reports against respondent for his other offenses

that such contained merely a general description of the charges against him. The reports

did not even state a company rule or policy that the employee had allegedly violated.

No hearing was conducted. Regardless of respondents written explanation, a hearing was

still necessary in order for him to clarify and present evidence in support of his defense.

Moreover, respondent made the letter merely to explain the circumstances relating to the

irregularity in his October 28, 2001 Conductors Trip Report. He was unaware that a

dismissal proceeding was already being effected. Thus, he was surprised to receive the

November 26, 2001 termination letter indicating as grounds, not only his October 28, 2001

infraction, but also his previous infractions.

PIONEER TEXTURIZING CORP. and/or JULIANO LIM v. NATIONAL LABOR RELATIONS

COMMISSION, PIONEER TEXTURIZING WORKERS UNION and LOURDES A. DE JESUS

G.R. No. 118651 October 16, 1997

FRANCISCO, J.:

REINSTATEMENT ASPECT OF LAs DECISION DOCTRINE: An award or order for

reinstatement is self-executory, and does not require a writ of execution, much less a

motion for its issuance.

FACTS: Private respondent Lourdes A. de Jesus is petitioners reviser/trimmer since 1980.

As reviser/trimmer, de Jesus based her assigned work on a paper note posted by

petitioners. The petitioners terminated her employment for dishonesty and tampering of

official records and documents with the intention of cheating. De Jesus maintained that

she merely committed a mistake.

LA RULING: Petitioners are guilty of illegal dismissal. Petitioners were accordingly ordered

to reinstate de Jesus to her previous position without loss of seniority rights and with full
backwages from the time of her suspension. NLRC RULING: The NLRC declared that the

status quo between them should be maintained and affirmed the Labor Arbiters order of

reinstatement, but without backwages. The NLRC further directed petitioner to pay de

Jesus her back salaries from the date she filed her motion for execution on September 21,

1993 up to the date of the promulgation of the decision. Petitioners Argument: An order for

reinstatement is not self-executory. They maintain that even if a writ of execution was

issued, a timely appeal coupled by the posting of appropriate supersedeas bond, which they

did in this case, effectively forestalled and stayed execution of the reinstatement order of

the Labor Arbiter.

ISSUE: Is a writ of execution required in an order for reinstatement?

SC RULING: NO. A writ of execution is not required in an order for reinstatement. ART.

223. Appeal. --Decisions, awards, or orders of the Labor Arbiter are final and executory

unless appealed to the Commission by any or both parties within ten (10) calendar days

from receipt of such decisions, awards, or orders. xxx xxx xxx In an event, the decision of

the Labor Arbiter reinstating a dismissed or separated employee, insofar as the

reinstatement aspect is concerned, shall immediately be executory, even pending appeal.

The employee shall either be admitted back to work under the same terms and conditions

prevailing prior to his dismissal or separation or, at the option of the employer, merely

reinstated in the payroll. The posting of a bond by the employer shall not stay the execution

for reinstatement provided herein. xxx xxx xxx Under the said provision of law, the decision

of the Labor Arbiter reinstating a dismissed or separated employee insofar as the

reinstatement aspect is concerned, shall be immediately executory, even pending appeal.

The employer shall reinstate the employee concerned either by: (a) actually admitting him

back to work under the same terms and conditions prevailing prior to his dismissal or

separation; or (b) at the option of the employer, merely reinstating him in the payroll.

Immediate reinstatement is mandated and is not stayed by the fact that the employer has

appealed, or has posted a cash or surety bond pending appeal.