Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-52720 August 19, 1982

UNITED CMC TEXTILE WORKERS UNION, petitioner,

vs.
HON. JACOBO C. CLAVE, HON. BENIGNO L. VIVAR, JR., and CENTRAL TEXTILE MILLS,
INC., respondents.

Wilfredo D. Sarabosing for petitioner.

The Solicitor General for respondents Clave and Vivar, Jr.

Florencio A. Soyangco for respondent Central Textile Mills, Inc.

&

DE CASTRO, J.: 1äwphï1.ñ ët

In this special civil action of certiorari, petitioner seeks to set aside the resolution 1 of respondent
Presidential Executive Assistant Jacobo C. Clave in NLRC Case No. RB-IV-2230-75 entitled "In the
matter of voluntary arbitration between United CMC Textile Workers' Union, Complainant, and Central
Textile Mills, Inc., Respondent," dated September 13, 1979, on the ground that the aforesaid resolution
was allegedly issued with grave abuse of discretion and in excess of jurisdiction, and the resolution 2 of
the same respondent dated December 14, 1979, denying petitioner's motion for reconsideration of the
aforementioned resolution.

The relevant facts which precipitated the firing of this suit, are as stated in the decision dated March
9, 1979 rendered by respondent Clave in the aforecited case, to wit: 1äw phï1.ñët

Records show that in 1970, respondent Central Textile Mills, Inc., and complainant
United CMC Textile Workers Union negotiated and signed a collective bargaining
agreement for a term of three (3) years, Article II, Section 2 thereof providing that: 1äwphï1.ñët

Section 1. Probationary Employment: All new regular employees of

the corporation shall be subject to a probationary period of six (6)
months. Such apprentices as the corporation may engage under the
provisions of R.A. 1826 and the Bureau of Labor Standards,
Department of Labor, are exempted from the provision and shall,
instead be covered by their respective contracts of apprenticeship.

Notwithstanding the above provision, respondent company employed a number of

casual or contractual employees in 1970 prompting complainant union to file a
request for grievance on May 23, 1970, culminating eventually in the change of
status of casual or contractual employees to regular with payment of salary
differentials. Thereafter and until the early part of 1973, respondent company ceased
employing casuals and instead employed new employees to undergo a probationary
period of six (6) months after which they were considered as regular employees with
corresponding hike in their salaries of P.90 a day, the P.50 increase as provided for
in a memorandum agreement entered into sometime in March 1970 as a
consequence of a complaint filed in court by the union against the company for
breach of contract, while the amount of P.40 as embodied in a Return-To-Work
Agreement dated December 21, 1971, as an offshoot of the strike staged by
complainant union.

During the year 1972 up to the early part of 1973, the management religiously
complied with provisions of the CBA, Memorandum Agreement and Return-To-Work
Agreement. However, when a new management took over during the latter part of
1973, respondent company started hiring casuals who were required to sign monthly
contracts upon the termination of which they were laid off for two to three days and
then rehired for another month under a new contract. Complainant union protested
against said practice but to no avail.

Subsequently, some of these casual employees joined the union and signed check-
off authorizations which, however, were not enforced by the company. Hence, on
January 6, 1975, the union filed a complaint with the Department of Labor charging
the company with unfair labor practice acts, as follows: (1) refusal to convert regular
employees Felicitas Nadonga, et al. despite more than two years service to the
company, the violation of the CBA and the Labor Code; (2) non-payment of benefits
contained in the CBA to Felicitas Nadonga, et al. and non-adjustment of their wages;
and (3) understatement of vacation leave pay of Mr. Manuel Fernandez, and illegal
collection/keeping of his leave benefits from the SSS.

During the conciliation stage of the proceedings, the parties agreed in writing to
submit the case for voluntary arbitration and selected Mr. Manuel Dia for that
purpose. On account of the protracted delay caused by the repeated non-
appearance of the company's representative in the scheduled hearing, the voluntary
arbitrator heard the case ex-parte, but later ordered both parties to submit their
respective memoranda together with supporting evidences with which only the union
complied. As stated in the memorandum submitted by the union, five issues were
presented for voluntary arbitration, to wit:

I. Whether or not the following employees namely, (1) Bayani Alcayde, (2) Fortunato
Samson, (3) Antonio Mariano, (4) Ernesto Fabro, (5) Danilo Buban, (6) Jessie
Vergara, (7) Melencio Marcelo, (8) Narciso de Leon, (9) Bernardo Esteban, (10)
Rizalino Bracecina, (11) Remedios de Guia, (12) Isabel de Roxas, (13) Marina
Joban, and (14) Priscilla Jimenez are entitled to be regularized pursuant to the
Collective Bargaining Agreement between the parties;

II. Whether or not the employees named in Issue No. 1 are entitled to the benefits of
the Collective Bargaining Agreement, Memorandum Agreement, and Return-To-
Work Agreement between the parties;

III. Whether or not the names listed in the 'Apendix' are casuals or not;

IV. Whether or not the employees listed under issue No. 3 are entitled to the benefits
contained in the Collective Bargaining Agreement, Memorandum Agreement, and
Return-To-Work Agreement between the parties; and
V. Whether or not the Company committed unfair labor practice.

As regards the first issue, the arbitrator opined that the aforenamed 14 employees
should have been extended regular appointments after passing the six-month
probationary period. Although the CBA stipulates that "all new regular employees
shall undergo a probation employment of six (6) months" without expressly providing
that said employees shall be converted to regular after the lapse of the probationary
period, the arbitrator, viewing the CBA provision "in the light of the antecedent acts of
the company," construed the same as implicative of the company's obligation to
extend regular appointments to probationary employees after the lapse of the
required period.

Conformably to the above conclusion, the arbitrator held that the 14 employees
became entitled as a matter of right to the benefits provided for under the CBA,
Memorandum Agreement and Return-To-Work Agreement between the parties after
undergoing the 6-month probationary employment period.

For insufficiency of evidence, the third and fourth issues were not resolved by the
arbitrator, while anent the fifth issue, no legal ground was found to exist to declare
respondent company guilty of unfair labor practice.

On August 20, 1975, the union filed an unopposed partial motion for reconsideration
of the decision of the voluntary arbitrator who, in an amended decision dated October
3, 1975, ruled thus: 1äwphï1.ñët

In view, therefore, of the uncontested Partial Motion for

Reconsideration filed by the Union and the above consideration, we
are hereby modifying our decision dated August 11, 1970, in the
above entitled case, to the effect that we are setting aside our ruling
on Issues Nos. 3 and 4, and in lieu thereof, we are declaring as it is
hereby declared that the employees listed in Issue No. 3 are not
casuals, and therefore, they are entitled to the benefits of the CBA,
Return-to-Work Agreement, and the Memorandum Agreement of the
parties, six months after they have completed their probationary
employment.

The benefits which are to be enjoyed by the regularized employees

under issue No. 1 shall commence from the completion of the
probationary employment in the Company which is defined in the
CBA.

With respect to Issue No. 5, however, we maintain that the evidence

presented by the Union of its unfair labor practice charge, remained
insufficient to establish a moral certainty that will give us a clear
conscience to declare the Company guilty of the offense charged.

Upon appeal by the Company, the National Labor Relations Commission (NLRC),
First Division, issued a resolution on March 31, 1977, dismissing the appeal for lack
of merit on the ground that the decision of the voluntary arbitrator had become final
and executory pursuant to Article 262 of the New Labor Code. In an order dated
November 24, 1977, the Secretary of Labor affirmed the NLRC decision. Hence, the
instant appeal. 3
Resolving the appeal as well as the motion to dismiss filed by petitioner, respondent Clave issued a
decision 4 dated March 9, 1979, dismissing said appeal and affirming in toto the questioned Order.
However, upon a motion for reconsideration filed by the private-respondent, respondent Clave modified
his decision in the Resolution 5 of September 13, 1979, insofar as the third and fourth issues were
concerned and declared the employees involved under said issues to be apprentices and hence, not
entitled to the benefits provided for in the collective bargaining agreement, the memorandum agreement
and the return-to-work agreement, since they are covered by their respective contracts of apprenticeship.

Unable to obtain a reconsideration of said Resolution, the present recourse was filed, petitioner
claiming that the decision of the voluntary arbitrator is final and is, therefore, no longer appealable,
much less subject to modification. The issues presented by the parties boil down to the question of
whether or not respondent Clave gravely abused his discretion in taking cognizance of private
respondent's appeal and finally resolving the same in said respondent's favor.

The parties are in harmony that pursuant to the provisions of Presidential Decree No. 442, as
amended, otherwise known as the Labor Code of the Philippines, Article 294 of which reads: 1äw phï1.ñët

ART. 294. Application of law enacted prior to this Code. — All actions or claims
accruing prior to the effectivity of this Code shall be determined in accordance with
the laws in force at the time of their accrual.

the applicable law in this case is Presidential Decree No. 21, which is the controlling enactment at
the time the cause of action of petitioner accrued, since it was in the later part of 1973 that private
respondent had allegedly violated the provisions of the collective bargaining agreement entered into
by and between the parties, when said respondent started rehiring casuals who were required to
sign monthly contracts upon the termination of which, they were laid off for two or three days and
then rehired for another month under a new contract, an act allegedly not sanctioned by the
aforementioned bargaining agreement.

Traversing the charge of grave abuse of discretion and/or lack of jurisdiction in entertaining the
appeal, the respondents invoked the provisions of the Ad Hoc NLRC Supplementary Rules and
Regulations, Section 1 of which, snows any aggrieved party in any award, whether voluntary or
compulsory arbitration, to appeal to the National Labor Relations Commission or to the Secretary
(now Minister) of Labor, as the case may be, on the ground, inter alia, that the Arbitrator had
disregarded vital evidence which if considered may substantially change the nature of the
award. 6 Based on the aforecited provision, it is argued that the appeal was properly filed before, and was
rightly entertained by, the Office of the President, which is the last recourse for redress in the
administrative hierarchy, to satisfy the requirement of exhaustion of administrative remedies. It is then
submitted that the questioned resolution of September 13, 1979 should be sustained, the same being
amply supported by substantial evidence on record.

After a careful review and perusal of the entire records of this case, the Court finds the stand of
petitioner meritorious. The very same Ad Hoc NLRC Supplementary Rules and Regulations invoked
by respondents provided in Section 7 thereof, that "an award shall become final and executory
between the parties upon the expiration of the period to appeal and no appeal is made within the
reglementary period," which is, according to Section 2 of the said Rules and Regulations, ten (10)
days from receipt of the award by the aggrieved party. 7 It is the contention of the petitioner, not
rebutted nor denied by the respondents and which is ascertained to be supported by the records of the
case, that the amended decision 8 of the voluntary arbitrator dated October 3, 1975 has lapsed to finality
without an appeal having been timely interposed by the private respondent within the reglementary
period. Having thus become final, even the voluntary arbitrator who rendered it cannot lawfully alter or
modify the same especially where the alteration or modification is material and substantial, the only power
retained being limited to the execution and enforcement of the said final judgment in all of its parts and in
accordance with its express orders. 9

Indeed, as the records reveal, during the hearing held on December 16, 1975 10 incident to the execution
of the judgement, the parties manifested on record that they would be filing a motion for clarification, as
they apparently did file, 11 on the following points, to wit:
1äw phï1.ñët

1) Is wage increase included under Issues No. 1 and No. 2, if yes, when?

2) Who are the employees so called 'casuals', employees referred to in the award
No. 3?

3) When to reckon the six months period?

4) What are the benefits granted pursuant to ruling No. 4 and whether it
contemplates inclusion of wage increase? 12

which were resolved by the voluntary arbitrator on February 26, 1976, as follows: 1äw phï1.ñët

1. That wage increase is part and parcel of the benefits granted in Issues No. 1 & No.
2, which must be enjoyed by the regularized employees six months counted from the
date of their employment in the Company.

2. That the 'casual' employees referred to in the award No. 3 in the previous decision
are limited to the names submitted by the Union during the initial hearing of this case
as reflected in the stenographic notes taken during the hearing of the case. ... (The
names of the employees concerned, their respective dates of employment & Id Nos.
are omitted.)

3. That the six months probationary employment of the called 'casual' should be
reckoned from their respective dates of employment, for purposes of enjoying the
benefits of the CBA, Memorandum Agreement, and Return-to-Work Agreement; and

4. That the benefits to be enjoyed by the so-called 'casuals' are the same as those to
be or are being enjoyed by employees who have become regular including the wage
increases. 13

The motion filed by the private respondent for the reconsideration of the above-resolution of the motion
for clarification was denied by the voluntary arbitrator.

There is further on record the uncontradicted averment that in the subsequent hearings of March 11
and 20, 1976, also incident to the execution of the judgment, private respondent appearing thru
counsel manifested that they be given enough time within which to compute the monetary liabilities
of the company arising from the decision of the voluntary arbitrator as amended. 14

In fine, the Court finds that the decision of the voluntary arbitrator dated August 12, 1975, as
amended by his decision of October 3, 1975, has long become final and executory when private
respondent appealed said decision to the National Labor Relations Commission on July 1, 1976, or
around nine months thereafter.
More importantly, the Court also finds as well-taken petitioner's citation and invocation of Section 19
of the implementing rules and regulations of P.D. 21, likewise not controverted nor traversed by the
respondents, to fortify its claim that the decision of the voluntary arbitrator is final, executory and not
appealable. Said provision reads as follows: 1äw phï1.ñët

Decision of the arbitrator shag be final and executory in the following cases:

1. If the arbitrator is chosen by the parties themselves. 15

xxx xxx xxx

There appears no dispute that the voluntary arbitrator in this case was chosen by the parties
pursuant to their collective bargaining agreement, which declares that the decision of said arbitrator
shall be final and binding. 1äwphï1.ñët

If the Grievance Committee fails to settle the dispute, the corporation and the union
hereby agree to submit the case to arbitration by one disinterested person
acceptable to both sides and whose decision shall be final and binding on all
concerned. (Section 5, Article VI, CBA). 16

The only fair implication from the fact that the collective bargaining agreement between the
Company and the Union, herein private respondent and petitioner respectively, provided for
arbitration as the final step in the settlement of disputes between them, is that the parties took this
step clearly for the purpose of preserving industrial peace and avoiding unnecessary litigation
between them. Their solemn agreement to accept the award to be rendered by the chosen arbitrator
ït¢@lFº

as final, impliedly gave the award the character of a compromise agreement binding upon the
contending parties. As such, the Court sees no reason why the parties, especially the private
respondent, may not be bound by the decision of the aforesaid arbitrator, in the absence of a
showing that the latter has exceeded the powers delegated to him.

WHEREFORE, the questioned resolutions are hereby set aside and the decision of the voluntary
arbitrator is hereby reinstated, with costs against the private respondent.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 96283 February 25, 1992

CHUNG FU INDUSTRIES (PHILIPPINES) INC., its Directors and Officers namely: HUANG KUO-
CHANG, HUANG AN-CHUNG, JAMES J.R. CHEN, TRISTAN A. CATINDIG, VICENTE B.
AMADOR, ROCK A.C. HUANG, JEM S.C. HUANG, MARIA TERESA SOLIVEN and VIRGILIO M.
DEL ROSARIO, petitioners,

vs.
COURT OF APPEALS, HON. FRANCISCO X. VELEZ (Presiding Judge, Regional Trail Court of
Makati [Branch 57]) and ROBLECOR PHILIPPINES, INC., respondents.

ROMERO, J.:

This is a special civil action for certiorari seeking to annul the Resolutions of the Court of
Appeals* dated October 22, 1990 and December 3, 1990 upholding the Orders of July 31, 1990 and
August 23, 1990 of the Regional Trial Court of Makati, Branch 57, in Civil Case No. 90-1335.
Respondent Court of Appeals affirmed the ruling of the trial court that herein petitioners, after
submitting themselves for arbitration and agreeing to the terms and conditions thereof, providing that
the arbitration award shall be final and unappealable, are precluded from seeking judicial review of
subject arbitration award.

It appears that on May 17, 1989, petitioner Chung Fu Industries (Philippines) (Chung Fu for brevity)
and private respondent Roblecor Philippines, Inc. (Roblecor for short) forged a construction
agreement 1 whereby respondent contractor committed to construct and finish on December 31,
1989, petitioner corporation's industrial/factory complex in Tanawan, Tanza, Cavite for and in
consideration of P42,000,000.00. In the event of disputes arising from the performance of subject
contract, it was stipulated therein that the issue(s) shall be submitted for resolution before a single
arbitrator chosen by both parties.

Apart from the aforesaid construction agreement, Chung Fu and Roblecor entered into two (2) other
ancillary contracts, to wit: one dated June 23, 1989, for the construction of a dormitory and support
facilities with a contract price of P3,875,285.00, to be completed on or before October 31,
1989; 2 and the other dated August 12, 1989, for the installation of electrical, water and hydrant
systems at the plant site, commanding a price of P12.1 million and requiring completion thereof one
month after civil works have been finished. 3

However, respondent Roblecor failed to complete the work despite the extension of time allowed it
by Chung Fu. Subsequently, the latter had to take over the construction when it had become evident
that Roblecor was not in a position to fulfill its obligation.

Claiming an unsatisfied account of P10,500,000.00 and unpaid progress billings of P2,370,179.23,

Roblecor on May 18, 1990, filed a petition for Compulsory Arbitration with prayer for Temporary
Restraining Order before respondent Regional Trial Court, pursuant to the arbitration clause in the
construction agreement. Chung Fu moved to dismiss the petition and further prayed for the quashing
of the restraining order.

Subsequent negotiations between the parties eventually led to the formulation of an arbitration
agreement which, among others, provides:

2. The parties mutually agree that the arbitration shall proceed in accordance with
the following terms and conditions: —

xxx xxx xxx

d. The parties mutually agree that they will abide by the decision of
the arbitrator including any amount that may be awarded to either
 party as compensation, consequential damage and/or interest
thereon;

e. The parties mutually agree that the decision of the arbitrator shall
be final and unappealable. Therefore, there shall be no further judicial
recourse if either party disagrees with the whole or any part of the
arbitrator's award.

f. As an exception to sub-paragraph (e) above, the parties mutually

agree that either party is entitled to seek judicial assistance for
purposes of enforcing the arbitrator's award;

xxx xxx xxx 4

(Emphasis supplied)

Respondent Regional Trial Court approved the arbitration agreement thru its Order of May 30, 1990.
Thereafter, Engr. Willardo Asuncion was appointed as the sole arbitrator.

On June 30, 1990, Arbitrator Asuncion ordered petitioners to immediately pay respondent contractor,
the sum of P16,108,801.00. He further declared the award as final and unappealable, pursuant to
the Arbitration Agreement precluding judicial review of the award.

Consequently, Roblecor moved for the confirmation of said award. On the other hand, Chung Fu
moved to remand the case for further hearing and asked for a reconsideration of the judgment award
claiming that Arbitrator Asuncion committed twelve (12) instances of grave error by disregarding the
provisions of the parties' contract.

Respondent lower court denied Chung Fu's Motion to Remand thus compelling it to seek
reconsideration therefrom but to no avail. The trial court granted Roblecor's Motion for Confirmation
of Award and accordingly, entered judgment in conformity therewith. Moreover, it granted the motion
for the issuance of a writ of execution filed by respondent.

Chung Fu elevated the case via a petition for certiorari to respondent Court of Appeals. On October
22,1990 the assailed resolution was issued. The respondent appellate court concurred with the
findings and conclusions of respondent trial court resolving that Chung Fu and its officers, as
signatories to the Arbitration Agreement are bound to observe the stipulations thereof providing for
the finality of the award and precluding any appeal therefrom.

A motion for reconsideration of said resolution was filed by petitioner, but it was similarly denied by
respondent Court of Appeals thru its questioned resolution of December 3, 1990.

Hence, the instant petition anchored on the following grounds:

First

Respondents Court of Appeals and trial Judge gravely abused their discretion and/or
exceeded their jurisdiction, as well as denied due process and substantial justice to
petitioners, — (a) by refusing to exercise their judicial authority and legal duty to
review the arbitration award, and (b) by declaring that petitioners are estopped from
questioning the arbitration award allegedly in view of the stipulations in the parties'
 arbitration agreement that "the decision of the arbitrator shall be final and
unappealable" and that "there shall be no further judicial recourse if either party
disagrees with the whole or any part of the arbitrator's award."

Second

Respondent Court of Appeals and trial Judge gravely abused their discretion and/or
exceeded their jurisdiction, as well as denied due process and substantial justice to
petitioner, by not vacating and annulling the award dated 30 June 1990 of the
Arbitrator, on the ground that the Arbitrator grossly departed from the terms of the
parties' contracts and misapplied the law, and thereby exceeded the authority and
power delegated to him. (Rollo, p. 17)

Allow us to take a leaf from history and briefly trace the evolution of arbitration as a mode of dispute
settlement.

Because conflict is inherent in human society, much effort has been expended by men and
institutions in devising ways of resolving the same. With the progress of civilization, physical combat
has been ruled out and instead, more specific means have been evolved, such as recourse to the
good offices of a disinterested third party, whether this be a court or a private individual or
individuals.

Legal history discloses that "the early judges called upon to solve private conflicts were primarily the
arbiters, persons not specially trained but in whose morality, probity and good sense the parties in
conflict reposed full trust. Thus, in Republican Rome, arbiter and judge (judex) were synonymous.
The magistrate or praetor, after noting down the conflicting claims of litigants, and clarifying the
issues, referred them for decision to a private person designated by the parties, by common
agreement, or selected by them from an apposite listing (the album judicium) or else by having the
arbiter chosen by lot. The judges proper, as specially trained state officials endowed with own power
and jurisdiction, and taking cognizance of litigations from beginning to end, only appeared under the
Empire, by the so-called cognitio extra ordinem." 5

Such means of referring a dispute to a third party has also long been an accepted alternative to
litigation at common law. 6

Sparse though the law and jurisprudence may be on the subject of arbitration in the Philippines, it
was nonetheless recognized in the Spanish Civil Code; specifically, the provisions on compromises
made applicable to arbitrations under Articles 1820 and 1821.7 Although said provisions were
repealed by implication with the repeal of the Spanish Law of Civil Procedure, 8 these and additional ones
were reinstated in the present Civil Code. 9

Arbitration found a fertile field in the resolution of labor-management disputes in the Philippines.
Although early on, Commonwealth Act 103 (1936) provided for compulsory arbitration as the state
policy to be administered by the Court of Industrial Relations, in time such a modality gave way to
voluntary arbitration. While not completely supplanting compulsory arbitration which until today is
practiced by government officials, the Industrial Peace Act which was passed in 1953 as Republic
Act No. 875, favored the policy of free collective bargaining, in general, and resort to grievance
procedure, in particular, as the preferred mode of settling disputes in industry. It was accepted and
enunciated more explicitly in the Labor Code, which was passed on November 1, 1974 as
Presidential Decree No. 442, with the amendments later introduced by Republic Act No. 6715
(1989).
Whether utilized in business transactions or in employer-employee relations, arbitration was gaining
wide acceptance. A consensual process, it was preferred to orders imposed by government upon
the disputants. Moreover, court litigations tended to be time-consuming, costly, and inflexible due to
their scrupulous observance of the due process of law doctrine and their strict adherence to rules of
evidence.

As early as the 1920's, this Court declared:

In the Philippines fortunately, the attitude of the courts toward arbitration agreements
is slowly crystallizing into definite and workable form. . . . The rule now is that unless
the agreement is such as absolutely to close the doors of the courts against the
parties, which agreement would be void, the courts will look with favor upon such
amicable arrangements and will only with great reluctance interfere to anticipate or
nullify the action of the arbitrator. 10

That there was a growing need for a law regulating arbitration in general was acknowledged when
Republic Act No. 876 (1953), otherwise known as the Arbitration Law, was passed. "Said Act was
obviously adopted to
supplement — not to supplant — the New Civil Code on arbitration. It expressly declares that "the
provisions of chapters one and two, Title XIV, Book IV of the Civil Code shall remain in force." 11

In recognition of the pressing need for an arbitral machinery for the early and expeditious settlement
of disputes in the construction industry, a Construction Industry Arbitration Commission (CIAC) was
created by Executive Order No. 1008, enacted on February 4, 1985.

In practice nowadays, absent an agreement of the parties to resolve their disputes via a particular
mode, it is the regular courts that remain the fora to resolve such matters. However, the parties may
opt for recourse to third parties, exercising their basic freedom to "establish such stipulation, clauses,
terms and conditions as they may deem convenient, provided they are not contrary to law, morals,
good customs, public order or public policy." 12 In such a case, resort to the arbitration process may
be spelled out by them in a contract in anticipation of disputes that may arise between them. Or this
may be stipulated in a submission agreement when they are actually confronted by a dispute.
Whatever be the case, such recourse to an extrajudicial means of settlement is not intended to
completely deprive the courts of jurisdiction. In fact, the early cases on arbitration carefully spelled
out the prevailing doctrine at the time, thus: ". . . a clause in a contract providing that all matters in
dispute between the parties shall be referred to arbitrators and to them alone is contrary to public
policy and cannot oust the courts of Jurisdiction." 13

But certainly, the stipulation to refer all future disputes to an arbitrator or to submit an ongoing
dispute to one is valid. Being part of a contract between the parties, it is binding and enforceable in
court in case one of them neglects, fails or refuses to arbitrate. Going a step further, in the event that
they declare their intention to refer their differences to arbitration first before taking court action, this
constitutes a condition precedent, such that where a suit has been instituted prematurely, the court
shall suspend the same and the parties shall be directed forthwith to proceed to arbitration. 14

A court action may likewise be proven where the arbitrator has not been selected by the parties. 15

Under present law, may the parties who agree to submit their disputes to arbitration further provide
that the arbitrators' award shall be final, unappealable and executory?

Article 2044 of the Civil Code recognizes the validity of such stipulation, thus:
 Any stipulation that the arbitrators' award or decision shall be final is valid, without
prejudice to Articles 2038, 2039 and 2040.

Similarly, the Construction Industry Arbitration Law provides that the arbitral award "shall be final and
inappealable except on questions of law which shall be appealable to the Supreme Court." 16

Under the original Labor Code, voluntary arbitration awards or decisions were final, unappealable
and executory. "However, voluntary arbitration awards or decisions on money claims, involving an
amount exceeding One Hundred Thousand Pesos (P100,000.00) or forty-percent (40%) of the paid-
up capital of the respondent employer, whichever is lower, maybe appealed to the National Labor
Relations Commission on any of the following grounds: (a) abuse of discretion; and (b) gross
incompetence." 17 It is to be noted that the appeal in the instances cited were to be made to the
National Labor Relations Commission and not to the courts.

With the subsequent deletion of the above-cited provision from the Labor Code, the voluntary
arbitrator is now mandated to render an award or decision within twenty (20) calendar days from the
date of submission of the dispute and such decision shall be final and executory after ten (10)
calendar days from receipt of the copy of the award or decision by the parties. 18

Where the parties agree that the decision of the arbitrator shall be final and unappealable as in the
instant case, the pivotal inquiry is whether subject arbitration award is indeed beyond the ambit of
the court's power of judicial review.

We rule in the negative. It is stated explicitly under Art. 2044 of the Civil Code that the finality of the
arbitrators' award is not absolute and without exceptions. Where the conditions described in Articles
2038, 2039 and 2040 applicable to both compromises and arbitrations are obtaining, the arbitrators'
award may be annulled or rescinded. 19 Additionally, under Sections 24 and 25 of the Arbitration Law,
there are grounds for vacating, modifying or rescinding an arbitrator's award. 20 Thus, if and when the
factual circumstances referred to in the above-cited provisions are present, judicial review of the
award is properly warranted.

What if courts refuse or neglect to inquire into the factual milieu of an arbitrator's award to determine
whether it is in accordance with law or within the scope of his authority? How may the power of
judicial review be invoked?

This is where the proper remedy is certiorari under Rule 65 of the Revised Rules of Court. It is to be
borne in mind, however, that this action will lie only where a grave abuse of discretion or an act
without or in excess of jurisdiction on the part of the voluntary arbitrator is clearly shown. For "the
writ of certiorari is an extra-ordinary remedy and that certiorari jurisdiction is not to be equated with
appellate jurisdiction. In a special civil action of certiorari, the Court will not engage in a review of the
facts found nor even of the law as interpreted or applied by the arbitrator unless the supposed errors
of fact or of law are so patent and gross and prejudicial as to amount to a grave abuse of discretion
or an exces de pouvoir on the part of the arbitrator." 21

Even decisions of administrative agencies which are declared "final" by law are not exempt from
judicial review when so warranted. Thus, in the case of Oceanic Bic Division (FFW), et al. v. Flerida
Ruth P. Romero, et al., 22 this Court had occasion to rule that:

. . . Inspite of statutory provisions making "final" the decisions of certain

administrative agencies, we have taken cognizance of petitions questioning these
decisions where want of jurisdiction, grave abuse of discretion, violation of due
 process, denial of substantial justice or erroneous interpretation of the lawwere
brought to our attention . . . 23 (Emphasis ours).

It should be stressed, too, that voluntary arbitrators, by the nature of their functions, act in a quasi-
judicial capacity. 24 It stands to reason, therefore, that their decisions should not be beyond the scope
of the power of judicial review of this Court.

In the case at bar, petitioners assailed the arbitral award on the following grounds, most of which
allege error on the part of the arbitrator in granting compensation for various items which apparently
are disputed by said petitioners:

1. The Honorable Arbitrator committed grave error in failing to apply the terms and
conditions of the Construction Agreement, Dormitory Contract and Electrical
Contract, and in using instead the "practices" in the construction industry;

2. The Honorable Arbitrator committed grave error in granting extra compensation to

Roblecor for loss of productivity due to adverse weather conditions;

3. The Honorable Arbitrator committed grave error in granting extra compensation to

Roblecor for loss due to delayed payment of progress billings;

4. The Honorable Arbitrator committed grave error in granting extra compensation to

Roblecor for loss of productivity due to the cement crisis;

5. The Honorable Arbitrator committed grave error in granting extra compensation to

Roblecor for losses allegedly sustained on account of the failed coup d'état;

6. The Honorable Arbitrator committed grave error in granting to Roblecor the

amount representing the alleged unpaid billings of Chung Fu;

7. The Honorable Arbitrator committed grave error in granting to Roblecor the

amount representing the alleged extended overhead expenses;

8. The Honorable Arbitrator committed grave error in granting to Roblecor the

amount representing expenses for change order for site development outside the
area of responsibility of Roblecor;

9. The Honorable Arbitrator committed grave error in granting to Roblecor the cost of
warehouse No. 2;

10. The Honorable Arbitrator committed grave error in granting to Roblecor extra
compensation for airduct change in dimension;

11. The Honorable Arbitrator committed grave error in granting to Roblecor extra
compensation for airduct plastering; and

12. The Honorable Arbitrator committed grave error in awarding to Roblecor

attorney's fees.

After closely studying the list of errors, as well as petitioners' discussion of the same in their Motion
to Remand Case For Further Hearing and Reconsideration and Opposition to Motion for
Confirmation of Award, we find that petitioners have amply made out a case where the voluntary
arbitrator failed to apply the terms and provisions of the Construction Agreement which forms part of
the law applicable as between the parties, thus committing a grave abuse of discretion. Furthermore,
in granting unjustified extra compensation to respondent for several items, he exceeded his powers
— all of which would have constituted ground for vacating the award under Section 24 (d) of the
Arbitration Law.

But the respondent trial court's refusal to look into the merits of the case, despite prima
facie showing of the existence of grounds warranting judicial review, effectively deprived petitioners
of their opportunity to prove or substantiate their allegations. In so doing, the trial court itself
committed grave abuse of discretion. Likewise, the appellate court, in not giving due course to the
petition, committed grave abuse of discretion. Respondent courts should not shirk from exercising
their power to review, where under the applicable laws and jurisprudence, such power may be
rightfully exercised; more so where the objections raised against an arbitration award may properly
constitute grounds for annulling, vacating or modifying said award under the laws on arbitration.

WHEREFORE, the petition is GRANTED. The Resolutions of the Court of Appeals dated October
22, 1990 and December 3, 1990 as well as the Orders of respondent Regional Trial Court dated July
31, 1990 and August 23, 1990, including the writ of execution issued pursuant thereto, are hereby
SET ASIDE. Accordingly, this case is REMANDED to the court of origin for further hearing on this
matter. All incidents arising therefrom are reverted to the status quo ante until such time as the trial
court shall have passed upon the merits of this case. No costs.

SO ORDERED.

[G.R. No. 50110. September 21, 1990.]

ETERNIT EMPLOYEES AND WORKERS UNION, Petitioner, v. VOLUNTARY ARBITRATOR, HON.

JESUS DE VEYRA AND ETERNIT CORPORATION, Respondents.

Pedro D. Dictado and Benito P. Fabie for Petitioner.

Sycip, Salazar, Feliciano, Hernandez & Castillo for Private Respondent.

DECISION

MEDIALDEA, J.:

This petition for certiorari under Rule 65 seeks the annulment of the order of the voluntary arbitrator dated
January, 1979 which denied petitioner’s claim for overtime pay in NLRC Case No. RV-047, entitled, "Eternit
Employees and Workers Union, Petitioner v. Eternit Corporation, Respondent." cralaw virt ua1aw li bra ry

The facts of this case are as follows: cha nrob 1es vi rtua l 1aw lib rary

Petitioner is a labor union of workers employed in respondent corporation which is engaged in the
manufacture of asbestos cement products. The petitioner union and respondent corporation entered into a
collective bargaining agreement which was renewed for a term of three (3) years from August 1, 1975 to
July 31, 1978.
Due to the failure of respondent corporation to implement some of the provisions of the CBA, petitioner
union filed a complaint with the then Ministry of Labor. The case was thereafter certified for voluntary
arbitration.

At the preliminary hearing before the voluntary arbitrator, petitioner agreed to submit the following issues
for resolution:
jgc: chan robles. com.ph

"1. The privilege of buying second class sheets.

2. Overtime work on Saturday — 4 hours from August 1, 1975 to December 31, 1975.

3. Cash value of unused vacation and sick leave in 1976.

4. Right of 23 employees ordered reinstated by NLRC to vacation and sick leave for 1976.

5. Right of these same 23 employees to 13th month pay.

6. Right of these same 23 employees to P2.00 adjustment pay." (p. 22, Rollo).

On March 16, 1978, the voluntary arbitrator, Dean Jesus de Veyra, rendered an award granting the claims of
petitioner union except claims No. 2 on overtime pay and No. 6 on the right of 23 employees to adjustment
pay.

On April 11, 1978, petitioner union filed a motion to re-open the case on issue No. 2 concerning overtime
pay on the ground of newly discovered evidence. The arbitrator granted the motion and allowed petitioner to
present its evidence on the overtime work of the employees. chanrobles vi rt ual lawli bra ry

In January, 1979, voluntary arbitrator de Veyra issued an order, the dispositive portion of which states: jgc:chanrobles. com.ph

"In view of the foregoing, this Arbitrator must reiterate this conclusion reached in the main award that as far
as issue No. 2 is concerned, on the right to overtime pay for work on the Saturdays of August to December,
1975, no satisfactory evidence has been presented." (p. 21, Rollo).

Hence, the instant petition is filed with the petitioner alleging grave abuse of discretion on the part of the
voluntary arbitrator in issuing the assailed order.

Petitioner union contends that the voluntary arbitrator erred in requiring petitioner to present evidence on
its claim for overtime pay since the respondent company had admitted that it had in fact overpaid
petitioner’s claim for overtime work; that the findings and conclusions of respondent arbitrator are belied by
the evidence presented by petitioner, to wit, the joint affidavit of the employees and time cards in the
company.

Respondent voluntary arbitrator made the following findings and conclusions in his order: jgc:c han robles. com.ph

"This Arbitrator allowed Petitioner to present evidence only on issue No. 2 which was the reception of
evidence that the members of Petitioner Union actually worked for four hours on the 22 Saturday from
August, 1975 to December 31, 1975. The only evidence presented by Petitioner on this point are Exhibits E
to E-589 which are the weekly time cards of some of the employees plus a joint affidavit by 150 of the
employees of Respondent claiming that they had worked for four hours on 22 Saturdays aforementioned. . .
. The time cards presented numbering 589 are defective in this respect and are of no aid to this Arbitrator:
first, because for 22 Saturdays and 150 employees the best evidence should have been 3,300 time cards. As
Respondent claims it no longer had these time cards in its possession and the 589 time cards were allegedly
‘rescued’ by Petitioner when about to be burned, secondary evidence consisting of the joint affidavit, Exhibit
G, of 150 employees were presented instead. . . . This Arbitrator took the trouble of checking on the time
cards and found the following: chan rob1e s virtual 1aw l ibra ry

Tomas Alvarico — no work on Saturday in week —

September 15 to 21, 1975

Abraham Lumugdang — — ditto —

Jovencio Sibug —"

Rodolfo Morales —"

Ramon Magdaleno —"

Sesinio Salud —"

Gregorio Reyes —"

Reynaldo Manaog —"

Antonio Sta. Ana —"

Raul Corcolo — did not work Saturday on week —

September 8-14, 1975

"These time cards were picked up at random and confirm the contention of Respondent that the claim in the
joint affidavit, Exhibit G, that each of the 150 employees had worked overtime on 22 Saturdays is belied by
the time cards Exhibit E to E-589 of Petitioner. It should be borne in mind that Exhibit G, is a joint affidavit
of 150 employees all claiming under oath having worked 22 Saturdays of August 1, 1975 to December 31,
1975. This is secondary evidence in the absence of the proper time cards. As the ten time cards picked out
at random by this Arbitrator show that at least on one Saturday in August, 1975 to December, 1975 ten of
the employees signatories to the joint affidavit, really did not work on that Saturday, this Arbitrator is now
faced with the fact that the joint affidavit, Exhibit G, contains a falsity, and following the rule in evidence of
falsus in unus est falsus in omnibus, this Arbitrator has no other alternative but to reject Exhibit G, and with
its rejection, Petitioner is left where it had originally started, that no competent evidence has been
presented to support their claim of having worked 22 Saturdays of August to December, 1975. In passing
this Arbitrator would like to reinforce his conclusion that CBA should be given retroactive effect to August,
1975. This conclusion is based on the fact that the CBA in reducing the hours of work from 44 to 40 provides
for ‘no reduction in pay.’ In effect that meant that the average week wage for 6 days would now have to be
divided by 5 instead of six, thus increasing the daily wage of the employee. This conclusion is supported by
Exhibit 5, time card of Alvarico for August, 1975 showing a daily rate of P20.57, whereas his time card,
Exhibit E-589 for August, 1976 shows a daily rate of P28.68. This conclusion is further corroborated by
Exhibit H, official letter of Atty. Ernesto Caluag to the Department of Labor, wherein among other things he
says:chanroble s.com : vi rtua l law lib rary

‘Our employees actually work 40 hours a week only, but this company pays them for 48 hours.’" (pp 19-21,
Rollo).

The petitioner’s contentions are devoid of merit.

The voluntary arbitrator had plenary jurisdiction and authority to interpret the agreement to arbitrate and to
determine the scope of his own authority subject to the certiorari jurisdiction of this Court. In the instant
case, his authority includes not merely the determination of the question of whether or not a claim is to be
granted but also, in the affirmative case, the amount thereof (Sime Darby Pilipinas v. Magsalin, G.R. 90426,
December 15, 1989). Thus, as a rule, the decision of the voluntary arbitrator chosen by the parties is final,
executory and not appealable. This is true especially when the parties have stipulated to that effect in their
submission agreement as in the present case (p. 69, Rollo). This principle strengthens the purpose of
arbitration in preserving industrial peace and in avoiding unnecessary litigation between the parties.

The contention of petitioner union that it does not have the legal obligation to present evidence on its claim
for overtime pay is untenable. It is a basic rule in evidence that each party must prove his affirmative
allegation and therefore, it behooves upon petitioner claiming overtime pay to prove that he is entitled to
the same. Moreover, petitioner’s allegation is contrary to the actuations it had before the voluntary
arbitrator. Records show that after the issuance of the award by the voluntary arbitrator on March 16, 1978
granting the other claims of petitioner, the latter on its own initiative moved to reopen the case and
manifested that it will present newly discovered evidence on its claim for overtime pay (p. 25, Rollo). After
petitioner was allowed to do so by the voluntary arbitrator, it cannot come now to this Court and allege that
it had no legal obligation in the first place to prove that they had rendered overtime work.
Where the petitioner union’s evidence does not satisfactorily establish its cause of action against the
employer, the voluntary arbitrator did not commit arbitrariness in his decision in dismissing the complaint,
when the proceedings had in the case were considered in their totality and the petitioner was given the
opportunity to present its side. Further, the computation of salaries, allowances and even overtime pay of
the workers are factual questions vested with the labor official concerned, who in this case, is the voluntary
arbitrator chosen by the parties pursuant to Article 263 of the Labor Code, as amended. This Court has no
authority in certiorari proceedings to evaluate the sufficiency of evidence before a labor officer (Zamboanga
City Water District v. Bartolome, G.R. No. 66766, December 20, 1985, 140 SCRA 432). In the absence of
any sufficient proof in this case that the voluntary arbitrator gravely abused its discretion, his decision
should be given the highest respect and finality (Mantrade/FMMC Division Employees and Workers’ Union v.
Bacungan, G.R. No. L-48437, September 30, 1986, 144 SCRA 510).

ACCORDINGLY, the petition is DISMISSED and the order of the voluntary arbitrator in NLRC Case No. RV-
047 dated January, 1979 is AFFIRMED.

SO ORDERED.

[G.R. No. 109383. June 15, 1998]

MANILA CENTRAL LINE CORPORATION, petitioner, vs. MANILA

CENTRAL LINE FREE WORKERS UNION-NATIONAL
FEDERATION OF LABOR and the NATIONAL LABOR
RELATIONS COMMISSION, respondents.

DECISION
MENDOZA, J.:

This is a petition for certiorari to set aside the resolution dated October 10, 1991 of
the National Labor Relations Commission in NLRC NCR Case No. 000977-90,
dismissing the appeal of petitioner Manila Central Line Corporation from the order of
Labor Arbiter Donato G. Quinto, Jr., in NLRC NCR Case No. 02-00813-90, as well as
the resolution dated March 11, 1993 of the NLRC, denying reconsideration.
This case arose out of a collective bargaining deadlock between petitioner and
private respondent Manila Central Line Free Workers Union-National Federation of
Labor. The parties collective bargaining agreement had expired on March 15, 1989. As
the parties failed to reach new agreement, private respondent sought the aid of the
National Conciliation and Mediation Board on October 30, 1989, but the deadlock
remained unresolved.
On February 9, 1990, private respondent filed a Petition for Compulsory Arbitration
in the Arbitration Branch for the National Capital Region of the National Labor Relations
Commission.At the initial hearing before the labor arbiter, the parties declared that
conciliation efforts before the NCMB had terminated and it was their desire to submit the
case for compulsory arbitration. Accordingly, they were required to submit their position
papers and proposals, which they did, and in which they indicated portions of their
respective proposals to which they agreed, leaving the rest for arbitration.[1]
On September 28, 1990, the labor arbiter rendered a decision embodying
provisions for a new collective bargaining agreement. The dispositive portion of his
decision reads:

WHEREFORE, the petitioner UNION and the respondent COMPANY are

directed to execute and formalize their new five-year collective bargaining
agreement (CBA) retroactive to the date of expiry of the 1986-1989 CBA by
adopting the provisions in the aforementioned test which incorporated therein
in the disposition set forth by this Arbitrator within thirty (30) days from receipt
of this Decision

SO ORDERED.[2]

Petitioner appealed, but its appeal was denied by the NLRC in its questioned
resolution of October 10, 1991. On March 11, 1993, the NLRC denied petitioners motion
for reconsideration. Hence, this petition with the following assignment of errors:

a) The NLRC erred in affirming the Labor Arbiters decision

1. increasing the commission rate, the incentive pay, the salaries and
wages of the fixed income employees covered by the CBA.

2. granting P500.00 signing bonus to the complainant-appellee; and

3. holding that the effectivity of the renegotiated CBA shall be retroactive to

March 15, 1989, the expiry date of the old CBA

b) There are serious errors in the findings of facts of the Labor Arbiter which
were unqualified affirmed by the NLRC and which justify the review by this
Honorable SUPREME COURT.

c) The NLRC erred in upholding the jurisdiction of the Labor Arbiter; and

d) The NLRC erred in affirming the finalization of the CBA by the Labor Arbiter
in disregard of the provisions agreed upon by the parties.

The petition is without merit. We shall deal with these contentions in the order they
are presented, with the exception of the argument concerning the jurisdiction of the
Labor Arbiter (par. (c)), which we shall treat first since it raises a threshold question.
First. Despite the fact that it agreed with the union to submit their dispute to the
labor arbiter for arbitration, petitioner questions the jurisdiction of the labor arbiter to
render the decision in question. Petitioner contends that the policy of the law now is to
encourage resort to conciliation and voluntary arbitration as Art 250(e) of the Labor
Code provides.
Indeed, the Labor Code formerly provided that if the parties in collective
bargaining fail to reach an agreement, the Bureau of Labor Relations should
call them to conciliation meetings and, if its efforts were not successful, certify
the dispute to a labor arbiter for compulsory arbitrarion.[3] But this was changed
by R.A.No. 6715 which took effect on March 21, 1989. Art 250(e) of the Labor
Code now provides that if effects of conciliation fail, the Board shall encourage
the parties to submit their case to a voluntary arbitrator. With specific
reference to cases involving deadlocks in collective bargaining, Art. 262
provides:

Jurisdiction over other labor disputes The Voluntary Arbitrator or panel of

Voluntary Arbitrators, upon agreement of the parties, shall also hear and
decide all other labor disputes including unfair labor practices and bargaining
deadlocks.

This is what the parties did in this case. After the Board failed to resolve the
bargaining deadlock between parties, the union filed a petition for compulsory arbitration
in the Arbitration Branch of the NLRC. Petitioner joined the petition and the case was
submitted for decision. Although the unions petition was for compulsory arbitration, the
subsequent agreement of petitioner to submit the matter for arbitration in effect made
the arbitration a voluntary one. The essence of voluntary arbitration, after all is that it is
by agreement of the parties, rather than compulsion of law, that a matter is submitted
for arbitration.[4] It does not matter that the person chosen as arbitrator is a labor arbiter
who, under Art 217 of the Labor Code, is charged with the compulsory arbitration of
certain labor cases. There is nothing in the law that prohibits these labor arbiters from
also acting as voluntary arbitrators as long as the parties agree to have him hear and
decide their dispute.
Moreover, petitioner must be deemed to be estopped from questioning the authority
of Labor Arbiter Donato G. Quinto, Jr., to act as voluntary arbitrator and render a
decision in this case. Petitioner agreed together with the union, to refer their dispute for
arbitration to him. It was only after the decision was rendered that petitioner raised the
question of lack of jurisdiction. Even then, petitioner did so only for the first time in a
supplemental memorandum of appeal to the NLRC.[5] As the NLRC, through
Commissioner Romeo B. Putong held, it was too late in the day for petitioner to do
this.[6]
Indeed, it is inconsistent for petitioner to contend, on the other hand, that this case
should have been resolved through voluntary arbitration and, on the other, to follow the
procedure for compulsory arbitration and, appealing the decision of the labor arbiter to
the NLRC and subsequently questioning the latters decision in Luzon Development
Bank v. Luzon Development Bank Employees Association,[7] this case, considered as a
special civil action for certiorari to set aside the decision of a voluntary arbitrator, should
have been referred, as a matter of policy, to the Court of Appeals. However, it was not
evident in the beginning from a cursory consideration of the pleadings that what actually
took place in the labor agency was a proceeding for voluntary arbitration. Accordingly,
so as not to delay the disposition of this case, we have thought on balance that this
case should be retained and decided on the merits.
Second. In par. (a) (1) and par. (b) of its assignment of errors, petitioner questions
factual findings of the labor arbiter and the NLRC. Such findings are generally held to be
binding, and even final, so long as they are substantially supported by evidence in the
record of the case.[8] This is especially so where, as here, the agency and a subordinate
one which heard the case in the first instance are in full agreement as to the facts. [9]
The decisions of both the NLRC and the labor arbiter contain an exhaustive
discussion of the issues, belying petitioners claim that they did not fully consider the
evidence and appreciate what it claims are the dire economic straits it is in. This is
evident from the following portion of the labor arbiters order dated September 28, 1990,
which NLRC adopted:

From the foregoing allegations of the parties and as expound (sic), discussed
and/or argued by them in their respective position paper, the disagreement, or
deadlock, as we say it, focus (sic) and centers on the so called economic
issues particularly on the provisions on Salaries and Wages.

Petitioner-Union proposed that the commission for drivers, conductors and

conductresses shall be 10% and 8%, respectively of their gross collections. In
addition, as incentive pay, it proposed that drivers, conductors and
conductresses shall be entitled to incentive pay as follows: (a) For a quota
of P2,600.00, the incentive should be P40.00; (b) for a quota of P2,875.00, the
incentive should be P50.00 and (c) for a quota of P3,155.00 the incentive pay
should be P60.00.

Further, petitioner-Union, insofar as the fixed income employees are

concerned, they proposed that they should be granted a salary/wage increase
as follows: (a) effective March 15, 1989P12.00; (b) Effective March 15,
1990 P10.00; and (c) effective March 15, 1991 P8.00.

Respondent, on the other hand, proposes that the commission for drivers and
conductor/tresses shall be 8.5% and 6.5% of their gross collection,
respectively. And in addition, these drivers and conductors/tresses shall be
entitled to an incentive pay based on the following quota, to wit: (a) for a quota
of P3,276.00, the incentive pay is P35.00; (b) for a quota of P3,635.00, it is
P45.00; and for a quoa of P3,994.00, it is P55.00. Respondent management
has no proposal insofar as grant of increase/s to fixed income employees
subject of the bargaining unit.

As noted at present under the old CBA, the commission for drivers and
conductor/tresses is 8% and 6%, respectively. During and in the negotiation,
respondent proposes to raise this rate by .5% thus making it 8.5 and 6.5
respectively. Respondent in proposing an increase of .5% justifies the same
by saying that such is only what it can afford as it had been incurring financial
losses as shown by Financial Statement it submitted in evidence. This was
rejected by the union which proposes that the rate of the commission be
raised to 10% and 8% respectively, from 8% and 6%, or an increase by 2%
respectively. The union debunked the claim fo the respondent-company that it
had been financially suffering and had claim (sic) that it had earned profit in all
the years that it had been under operation.

A look at the parties proposal and counter-proposal shows that the union was
demanding that the rate be increased to 10% and 8% from the old rate of 8%
and 6% or an increase of 2% while that of the company effectively increase
the rate by .5% to make the rate at 8.5% and 6.5%. From this, it appears that
the disagreement lies on how much would the increase equivalent to at least
25% for the drivers and at least 33% for the conductor/tresses, while that
which proposed (sic) by the company shows an increase of at least 6% and
8% respectively.The difference between the parties proposal and counter-
proposal is at least 19% and 25%, respectively. With this disagreement in this
difference, it is thought of to be practical and reasonable to meet at the middle
of the difference in the rate by dividing the same into two. Hence, the increase
in the rate should be from the present 8% and 6% to 8.75% and
6.75%.However, in order to make the increase realistic it is opined that it
should be rounded off to the nearest full number that is to 9% and 7%,
respectively.

As regards the incentive pay, the following appears:

OLD CBA RESPONDENTS PROPOSAL UNIONS PROPOSAL
QUOTA INCENTIVE QUOTA INCENTIVE QUOTA INCENTIVE
P2,800.00 P 35.00 P3,276.0 P35.00 P2,600.0 P40.00
0 0
3,100.00 45.00 3,635.00 45.00 2,600.00 50.00
3,400.00 55.00 3,994.00 55.00 3,155.00 60.00
As can be gleaned from the above respondent raised the quota but maintained the
rate for the incentive pay, while the union lowers (sic) the quota and raises (sic) the rate
for the incentive. To the mind of this arbitrator, he deems it proper and fair for both
parties, to adopt the quota as proposed by the respondent and the rate for the incentive
pay as proposed by the union. It is believe (sic) that such is fair and reasonable
because as appearing in the parties proposal and counter proposal, it would seem that
they are trying to out-wit each other. Hence, such would be as follows:

Quota Rate of Incentive Pay

P3,276.00 P40.00

3,635.00 50.00

3,994.00 60.00

Another issue where the parties are in statements (sic) is the matter of increase in
the salary and wages of the fixed income employees covered by the CBA. The Union
proposes an increase of P12.00, P10.00 and P8.00 to be spread in the three-year
period, while the company did not submit a proposal for an increase claiming that it
cannot afford to give any increase as it had suffered financial difficulty. However, as
already discussed earlier where it is found that respondent, as shown by its financial
statement, is not really in the verge of financial collapse, it is believed that it is
reasonable and fair to the parties, particularly to the union that increase would be
mandated. However, we could not adopt in toto the proposal of the union.Instead, we
are to adopt the increase as provided under the old CBA, that is, P6.00 for the first year,
P5.00 for the second year and P4.00 for the third year.[10]
Petitioner contends, however, that the labor arbiter has a duty to indicate in his
order every relevant proof necessary to show that the opposing partys evidence is
superior to that of petitioner. This is not so. The quantum of proof required in
proceedings before administrative agencies is substantial evidence, not overwhelming
or preponderant evidence.[11] The quoted portion of the labor arbiters order shows that
the proposals of the parties as well as petitioners financial statements were carefully
considered by him in arriving at his judgment. As the Solicitor General states:

Nor did respondent NLRC overlook the protestations of the COMPANY that it
is suffering from gargantuan economic trouble. This assertion, however, was
sufficiently refuted by the UNION by presenting proof that the COMPANY had
acquired a bus terminal area in Tunasan. Moreover, the COMPANY had just
imported machines to recondition their old buses. Also, as can be seen in the
1992 Financial Statement of the COMPANY had just imported machines
to recondition their old buses. Also, as can be seen in the1992 Financial
Statement of the COMPANY, it acquired new buses worth
P2,400,000.00. These facts verify the findings of the Labor Arbiter that the
COMPANY is not on the verge of financial collapse.Also, the COMPANY had
offered an increase of .5% but in the same breath, it claims that it can hardly
maintain the commission rate of 8% and 6%. There is a contradiction of facts
right there and then, which considerably weakens its assertions
The increase in commission rate will not really affect the income of the
COMPANY. By their very nature, commissions will only be given to the
employees if the COMPANY receives more income. They are given in the
form of incentives or encouragement so that employees would be inspired to
put a little more industry on their particular tasks. This is unlike salaries and
wages which are fixed amounts and which should be given to the employees
regardless of whether the COMPANY is making any collection or
not. Therefore, the employees are merely asking a percentage of the earnings
of the COMPANY, which they, through their efforts, helped produce.

As regards the incentive pay increase, the COMPANYs financial position was
also taken into consideration. It appears that the COMPANY and the UNION
were trying to outwit each other in their respective proposals. Thus, the
position adopted by the Labor Arbiter - - increasing the quota and the amount
of incentive is a middle ground which is fair to both parties.

The increase in salaries and wages was premised on the findings of the Labor Arbiter
that the COMPANY was not on the verge of financial collapse and that an increase
would be mandated, particularly taking into consideration the inflation or increase in the
cost of living in the subsequent years after the CBA was finalized. In adopting the wage
increase rates provided in the old CBA, the financial condition of the COMPANY as well
as the needs of the employees were taken into consideration. When conclusions of the
Labor Arbiter are sufficiently corroborated by the evidence on record, the same should
be respected by the appellate tribunals since he is in a better position to assess or
evaluate the credibility of the contending parties [CDCP Tollways Operation Employees
and Workers Union v. NLRC, 211 SCRA 58).[12]

Nor is the grant of a P500.00 signing bonus to employees unreasonable or

arbitrary. The amount is a modest sum, to be given by petitioner only once, in order to
make employees finally agree to the new CBA. In ordering payment of this amount, the
labor arbiter acted in accordance with Art. 262-A of the Labor Code which provides in
part:

Procedures. The voluntary Arbitrator or panel of Voluntary Arbitrators shall

have the power to hold hearings, receive evidence and take whatever action
is necessary to resolve the issue or issues subject to dispute, including efforts
to effect a voluntary settlement between parties. (emphasis added)

Third. Petitioner also contends that in ordering a new CBA to be effective on March
15, 1989, the expiry date of the old CBA, the labor arbiter acted contrary to Art. 253-A of
the Labor Code. This provision states, among others, that:

Any agreement on such other provision of the Collective Bargaining

Agreement entered into within six (6) months from the date of the 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.

Art. 253-A refers to collective bargaining agreements entered into by the parties as
a result of their mutual agreement. The CBA in this case, on the other hand, is part of
an arbitral award. As such, it may be made retroactive to the date of expiration of the
previous agreement. As held in St. Lukes Medical Center, Inc. v. Torres:

Finally, 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
properly applied to herein case. As correctly stated by public respondent in his
assailed Order of April 12, 1991 dismissing petitioners Motion for
Reconsideration

Anent the alleged lack of basis for the retroactivity to provisions awarded, we
would stress that the provision of law invoked by the Hospital. Article 253-A of
the Labor Code, speaks of agreements by and between the parties, and not
arbitral awards . . . (p. 818 Rollo).

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. [13]

Indeed, petitioner has not shown that the question of effectivity was not included in
the general agreement of the parties to submit their dispute for arbitration. To the
contrary, as to the order of the labor arbiter states, this question was among those
submitted for arbitration by the parties:

As regards the Effectivity and Duration clause, the company proposes that the
collective bargaining agreement shall take effect only upon its signing and
shall remain in full force and effect for a period of five years. The union
proposes that the agreement shall take effect retroactive to March 15, 1989,
the expiration date of the old CBA.

And after an evaluation of the parties respective contention and argument thereof, it is
believed that the union is fair and reasonable. It is the observation of this Arbitrator that
in almost subsequent CBAs, the effectivity of the renegotiated CBA, usually and most
often is made effective retroactive to the date when the immediately proceeding CBA
expires so as to give a semblance of continuity. Hence, for this particular case, it is
believed that there is nothing wrong adopting the stand of the union, that is that this
CBA be made retroactive effective March 15, 1989.[14]

Fourth. It is finally contended that the labor arbiter disregarded many provisions of
the old CBA which the parties had retained, improved and agreed upon, with the result
that the CBA finalized by the Honorable Labor Arbiter does not reflect the true intention
of the parties.[15] Petitioner does not specify, however, what provisions of the old CBA
were disregarded by the labor arbiter. Consequently, this allegation should simply be
dismissed.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
[G.R. No. L-39686. June 25, 1980.]

VOLKSCHEL LABOR UNION, MARIANO SUAREZ, PEDRO TORRES, JAIME RAMOS, and ANTONIO
GALAN, Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION and PEOPLE’S CAR,
INCORPORATED, Respondents.

DECISION

DE CASTRO, J.:

Petition for review on certiorari of the decision of the National Labor Relations Commission which modified
the award dated February 1, 1974 of the Arbitrator.

The case arose from the complaint for unfair labor practice filed on March 15, 1973 by petitioner against
respondent company on the following grounds: chan rob1es v irt ual 1aw l ibra ry

1. Unjust transfers and suspension of unionists.

2. Gross violation of the collective bargaining agreement, particularly re: agency clause.

3. Refusal to negotiate union grievances in good faith.

Sometime in January, 1973, respondent company in an inter-office memorandum, 1 ordered the transfer of
several employees from the Malabon District Office to the Cebu District and Magna Service, Inc., sister-
company of said Respondent. The union, thru its president, Casiano C. Garcia wrote a letter 2 to Mr. Rene
Oboza, President and General Manager of the Company, seeking a reconsideration of the projected transfer.
On January 9, 1973, the company issued an inter-office memorandum 3 informing the employees concerned
that management is standing firm on its decision to transfer or assign them to the Cebu District and Magna
Services and that they are suspended indefinitely for their refusal to comply with the management’s order,
which suspension will eventually lead to termination from the service for cause after the company secures
the clearance from the Secretary of Labor. With this situation, Casiano Garcia, the union president, again
wrote a letter to the management, requesting for the lifting of the employees’ suspension without loss of
personal rights and privileges and stating that by effecting the transfer of these employees, it would seem
that the company is bent on "busting" the union chapter in Malabon District which tends to demoralize the
members. In reply to said letter, the company, thru Mr. Rene Oboza, averred that the suspension was the
result of the employees’ violation of the Code of Discipline; that the act of suspension was merely an
exercise of management’s prerogative to discipline its employees, calling the attention of Mr. Garcia to Art.
II, Section 1 of the CBA which provides:jgc:c hanro bles. com.ph

"Management rights — The COMPANY retains the sole right to manage its business including the number
and location of factories or plants . . . as well as to suspend, discharge, lay-off or take any disciplinary
action against any employee for just causes . . ." cralaw virtua1aw l ibra ry

and that management was well within its rights in enforcing a provision of the CBA.

The respondent company adduced the reason that the questioned transfer was due to the fact that the
Malabon District Office of the Company had been in a business slump on account of the construction and
subsequent opening of the North Diversion Road at Balintawak, Rizal and other business factors which
forced the company to decide on a retrenchment program involving the reduction of its personnel. It was
also stressed by the company that a careful screening of all the employees’ records was done to avoid
injustice and that the selection of those involved in the retrenchment was made regardless of whether they
were union members or not; that it could have well decided to dismiss its employees at its Malabon Branch
but instead of pursuing such course of action, it gave its employees several options to choose from: chanro b1es vi rtua l 1aw lib ra ry

(1) temporary lay offs with priority of employment at the opening of respondent’s Marikina Branch;

(2) transfer or relocation to any of respondents’ branches or sister corporations; and

(3) permanent termination from employment with separation pay; that some employees accepted and
received respondent’s offer of separation pay; and when herein petitioner-employees opted to remain with
the company, they submitted themselves to its discretion when and where they should be transferred
and/or relocated.

On the other hand, petitioners maintain that the company violated the provision of Art. I, Section 1 of the
Collective Bargaining Agreement, to wit: jgc:chanrobles. com.ph

"UNION RECOGNITION AND CHECK-OFF — Section 1. The COMPANY recognizes the union as the sole and
exclusive bargaining representative for all regular rank and file workers of the COMPANY in the Greater
Manila Area . . ."
cralaw virt ua1aw lib ra ry

Petitioners contend that such transfer involved movement that would take the employees outside the
bargaining unit defined in the agreement. Moreover, in refusing to be transferred to the Magna Services,
Inc. and Cebu District, herein petitioners-employees claim that it would be very difficult to leave their
families behind even if they wanted to, considering the prevailing economic conditions.

Furthermore, petitioner union alleged that the company refused to honor its commitment embodied in Art.
III, Section 3 of the Agreement, "that respondent company bound itself . . . to assist the Union to collect
and hereby guarantees collection of, an agency fee equivalent to the Union membership dues but not
exceeding P4.00 per month from each regular employee . . ., and who is not a member of the Union;" and
since all the employees in the Company, whether they be union or non-union members are entitled to all the
benefits that their bargaining agent was able to secure for them, it is in this light that the Union seeks the
imposition of the Agency fee.

The respondent company considers the issue of agency fee as sub judice since it was raised for resolution
before the Court of First Instance of Rizal in a petition for declaratory relief praying for the proper
construction and interpretation of the provision on agency fee. In answer to this claim, petitioner union
argues that the NLRC has exclusive jurisdiction to resolve the present dispute regarding agency fees in
accordance with PD No. 21.

Pending resolution of the complaint, the company reinstated Godofredo League and Edilberto Vicmudo while
petitioners Suarez, Ramos, Torres and Galan were dismissed for insubordination. After a series of hearings
and submission of the parties’ respective memoranda, the arbitrator rendered an award 4 on February 1,
1974, the dispositive portion of which reads: jgc:chanrob les.c om.ph

"WHEREFORE, and in recapitulation, the respondent company is hereby directed to reinstate Mariano
Suarez, Jaime Ramos, Pedro Torres and Antonio Galan to their usual employment with full backwages from
January 9, 1973 and to pay backwages to Godofredo League and Edilberto Vicmudo corresponding to the
period of their unjust suspension and/or lay-off from January to February, 1973.

"Likewise, the respondent company is ordered to comply with its obligation under Art. III, Section 3 of the
CBA and in this respect, to transmit all agency fees due the union in the amount of P4.00 per capita monthly
from January 1, 1972 up to the present time and to continue to comply with such obligation henceforth till
the expiration of the CBA.

"So Ordered." cralaw virtua 1aw lib rary

From this award, respondent company appealed to the National Labor Commission. Petitioners objected to
the appeal on the grounds that (1) the award had already become final and executory since the appeal was
filed beyond the reglementary period; (2) the award is final and unappealable because of the provision of
the collective bargaining agreement and (3) the award is supported by substantial evidence. On October 17,
1974, the Commission rendered a decision 5 modifying the arbitrator’s award, thus: jgc:chan robles. com.ph

"WHEREFORE, complainants Suarez, Jaime Ramos, Pedro Torres and Antonio Galan are hereby ordered to
comply with respondents directive to reassign or transfer them within fifteen (15) days from receipt of this
decision.

x x x

"The award appealed from is therefore, set aside insofar as it is inconsistent with this decision.

"So Ordered." cralaw virtua 1aw lib rary

Petitioners appealed to the Secretary of Labor on November 14, 1974 and during the pendency thereof, filed
the instant petition for review alleging that they cannot exclusively rely on their appeal to the Secretary of
Labor when they received the disputed decision on November 8, 1974 (after the New Labor Code had
already taken effect on November 1, 1974, repealing PD No. 21); that up to now there are no implementing
rules promulgated yet by the New NLRC created by PD 442 and in order to prevent a grave irreparable
damage to the interest of the petitioners, they must file this appeal by certiorari pursuant to the provision of
the New Labor Code "that the decision of the NLRC involving question of law could he appealed
by certiorari to the Supreme Court." cralaw virtua1aw l ibra ry

The following issues are presented to this Court for resolution: cha nrob 1es vi rtual 1aw lib rary

1. As to whether or not the NLRC has the power to alter or modify the award rendered by a voluntary
arbitrator whose decision is final and executory pursuant to the CBA; and

2. As to whether or not the NLRC could still reverse or modify the voluntary arbitrator’s award despite the
appeal of the private respondent company was filed beyond the reglementary period or in other words the
right to appeal has prescribed.

The petition was given due course on February 24, 1975 and pending receipt of respondent’ s answer, the
Secretary of Labor on March 24, 1975 issued an order 6 denying petitioners’ appeal from the decision of
respondent commission and accordingly enjoined the parties to comply with the disposition set forth in the
said appealed decision.

In support of the first issue raised, petitioners argued that the voluntary arbitrator expressly stated in his
award "that the parties agreed to refer the dispute to the undersigned for voluntary arbitration in
accordance with the CBA;" that said finding was not questioned by respondent company; that the decision
revising the award of the voluntary arbitrator is violative of the CBA which provides: jgc:cha nroble s.com.p h

"There shall be no appeal from an arbitrator’s decision. It shall be final and binding on the UNION, on all
bargaining unit employees and on the COMPANY. The decision shall be such as to be dispositive of the
matter or matters submitted to arbitration . . ." 7

and that the provision in the CBA regarding the grievance machinery as well as the definition of the
bargaining unit specifically delineating a definite place of work would be useless if respondent company
could transfer employees at will even to places not covered by the CBA.

As to the second issue raised, it is the contention of petitioners that the appeal of respondent company from
the arbitrator’s award was filed on March 5, 1974, which is beyond the reglementary period, alleging that
said respondent received the award on February 22, 1974; 8 and for the NLRC now to revise or disturb the
award of the voluntary arbitrator would in effect be going against the very implementing rules it has
promulgated requiring any aggrieved party to file an appeal within 5 days upon receipt of the award, which
rule was adopted on October 18, 1972.

In refutation of petitioners’ contentions, respondent company alleged that the award rendered by the
arbitrator is not the decision contemplated in and provided for in the CBA; that the fact that petitioners’
appeal to the Secretary of Labor was still pending when they filed the instant petition clearly divests this
Court from taking cognizance of the present case; that the NLRC’s rule dated October 18, 1972 was
expressly repealed by its subsequent supplementary rule issued on January 26, 1973 which reads in part,
thus:jgc:chanro bles. com.ph

"Section 2. Appeal may be brought to the Commission within ten (10) days upon receipt of the Award by the
aggrieved party." 9

It was stressed by said respondent that the provision in the collective bargaining agreement is subordinate
to the will of the state or the law; that is to say, if appeal is provided for or available under the law, said
remedy cannot be foreclosed by mere stipulation of the parties.

Arbitrator Alexander Guray stated in his award that the parties had earlier sought to settle their differences
internally pursuant to the grievance machinery provided in their agreement; and when their efforts to
resolve the problem failed, the parties agreed to refer the dispute to a voluntary arbitrator. A perusal of the
records however show that on May 11, 1973, the Mediation-fact finding report submitted by Mediator Jose
Collado, Jr. contained the following data: 10

"II. Issue remained non-conciliatory.

III. No Mutual Agreement for voluntary arbitration.

IV. Referred to NLRC for Compulsory Arbitration." cralaw virtua1aw l ibra ry

The designation of Guray was thus as "Compulsory Arbitrator," 11 and the proceedings accordingly were
actually that of compulsory arbitration with the right of appeal. However, because of respondent company’s
failure to perfect its appeal on time, the National Labor Relations Commission was divested of its jurisdiction
to entertain the appeal.

The records show that the respondent company’s appeal to the Commission was filed on March 5, 1974 and
was received by the Bureau of Labor Relations Division on March 6, 1974. 12 It was admitted by said
respondent that its counsel received a copy of the arbitrator’s award on February 22, 1974 and applying
Section 2 of the NLRC Rules and Regulations providing for a ten-day period to appeal from receipt of the
award, it is very clear by mathematical computation that the appeal was filed out of time; hence, the award
attained finality.

It is a well-settled rule that an award or judgment becomes final and executory upon the expiration of the
period to appeal and no appeal was made within the reglementary period. The basic rule of finality of
judgment is applicable indiscriminately to one and all since the rule is grounded on fundamental
consideration of public policy and sound practice that at the risk of occasional error, the judgment of courts
and award of quasi-judicial agencies must become final at some definite date fixed by law. 13

The lapse of the appeal period deprives courts of jurisdiction to alter a final judgment. In the instant case,
the decision of the Commission 14 modifying the award of the arbitrator is null and void for having been
issued without jurisdiction and authority, the appeal taken thereto not having been filed on time. The
perfection of an appeal within the reglementary period is not only mandatory but jurisdictional. 15

Respondent Company’s contention that it filed its appeal within the reglementary period should not be given
weight. Such allegation is not fully substantiated. There is here an apparent miscomputation by counsel of
the appeal period which will not arrest the course of the same nor prevent the finality of the judgment, in
simply stating that he filed the appeal on time, otherwise, the definite and executory character of the
judgment would be left to the whim of the losing party, when it is in the interest of everyone that the date
when judgments become final should remain fixed and ascertainable. 16

In view of the above conclusion reached, there is no further need to discuss the merits of the dismissal of
the employees for insubordination. The award having attained finality, becomes the law of the case, and
must be complied with, no matter how erroneous it may be.
It may also be pertinent to state that even if the proceedings herein be considered as in the nature of a
voluntary arbitration as so held by the Arbitrator in his award, for reasons not quite clear from the records,
the award appealed from shall be final and binding between the parties. The award of voluntary Arbitrators
acting within the scope of their authority determines the rights of the parties, and their decisions have the
same legal effects as a judgment of the Court. Such decisions on matters of fact and law are conclusive, and
all matters in the award are thenceforth res judicata, on the theory that the matter has been adjudged by
the tribunal which the parties have agreed to make final as tribunal of last resort. 17

WHEREFORE, the decision dated October 17, 1974 of the National Labor Relations Commission and the
Order dated March 24, 1975 of the Secretary of Labor are hereby set aside and the award of the arbitrator is
reinstated in toto. This decision is immediately executory. No pronouncement as to costs.

SO ORDERED.
[G.R. No. L-48437. September 30, 1986.]

MANTRADE/FMMC DIVISION EMPLOYEES AND WORKERS UNION (represented by PHILIPPINE

SOCIAL SECURITY LABOR UNION — PSSLU Fed. — TUCP), Petitioner, v. ARBITRATOR FROILAN M.
BACUNGAN and MANTRADE DEVELOPMENT CORPORATION, Respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; VOLUNTARY ARBITRATORS; DECISIONS SUBJECT TO
JUDICIAL REVIEW. — The contentions of respondent corporation have been ruled against in the decision of
this court in the case of Oceanic Bic Division (FFW) v. Romero, promulgated on July 16, 1984, wherein it
stated: . . . "A voluntary arbitrator by the nature of her functions acts in a quasijudicial capacity. There is no
reason why her decisions involving interpretation of law should be beyond this court’s review. Administrative
officials are presumed to act in accordance with law and yet we do not hesitate to pass upon their work
where a question of law is involved or where a showing of abuse of discretion in their officials acts is
properly raised in petitions for certiorari." (130 SCRA 392, 399, 400-401)

2. ID.; ID.; GRANT FOR HOLIDAY PAY MONTHLY PAID EMPLOYEES; ISSUE SETTLED IN THE CASES OF
INSULAR BANK OF ASIA AND AMERICA EMPLOYEES’ UNION VS. INCIONG, [132 SCRA 633], AND
CHARTERED BANK EMPLOYEES UNION VS. OPLE [141 SCRA 9]. — Respondent arbitrator opined that
respondent corporation does not have any legal obligation to grant its monthly salaried employees holiday
pay, unless it is argued that the pertinent section of the Rule and Regulations implementing Section 94 of
the Labor Code is not in conformity with the law, and thus, without force and effect. This issue was
subsequently decided on October 24, 1984 by a division of this court in the case of Insular Bank of Asia and
American Employees’ Union (IBAAEU) v. Inciong, wherein it held as follows: "We agree with petitioner’s
contention that Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No. 9 issued by
the then Secretary of Labor are null and void since in the guise of clarifying the Labor Code’s provisions on
holiday pay, they in effect amended them enlarging the scope of their exclusion (p. 11, rec.). . . . "From the
above-cited provisions, it is clear that monthly paid employees are not excluded from the benefits of holiday
pay. However, the implementing rules on holiday pay promulgated by the then Secretary of Labor excludes
monthly paid employees from the said benefits by inserting under Rule IV, Book III of the implementing
rules, section 2, which provides that: ‘employees who are uniformly paid by the month, irrespective of the
number of working days therein , with the salary of not less than the statutory or established minimum
wage shall be presumed to be paid for all days in the month whether worked or not." (132 SCRA 663, 672-
673) This ruling was reiterated by the court en banc on August 28, 1985 in the case of Chartered Bank
Employees Association v. Ople, wherein it added that: "The questioned Sec. 2, Rule IV, Book III of the
Integrated Rules and the Secretary’s Policy Instruction No. 9 add another excluded group, namely
‘employees who are uniformly paid by the month’. While additional exclusion is only in the form of a
presumption that all monthly paid employees have already been paid holiday paid, it constitutes a taking
away or a deprivation which must be in the law if it is to be valid. An administrative interpretation which
diminishes the benefits of labor more than what the statute delimits or withholds is obviously ultra vires."
(138 SCRA 273, 282. See also CBTC Employees Union v. Clave, January 7, 1986, 141 SCRA 9.)

3. REMEDIAL LAW; SPECIAL CIVIL ACTION; MANDAMUS; APPROPRIATE EQUITABLE REMEDY IN CASE AT
BAR. — Respondent corporation contends that mandamus does not lie to compel the performance of an act
which the law does not clearly enjoin as a duty. True it is also that mandamus is not proper to enforce a
contractual obligation, the remedy being an action for specific performance (Province of Pangasinan v.
Reparations Commission, November 29, 1977, 80 SCRA 376). In the case at bar, however, in view of the
above-cited subsequent decisions of this Court clearly defining the legal duty to grant holiday pay to
monthly salaried employees, mandamus is an appropriate equitable remedy (Dionisio v. Paterno, July 23,
1980, 98 SCRA 677; Gonzales v. Government Service Insurance System, September 10, 1981, 107 SCRA
492).

DECISION

FERIA, J.:

This is a petition for Certiorari and Mandamus filed by petitioner against arbitrator Froilan M. Bacungan and
Mantrade Development Corporation arising from the decision of respondent arbitrator, the dispositive part of
which reads as follows: jgc:chan robles. com.ph

"CONSIDERING ALL THE ABOVE, We rule that Mantrade Development Corporation is not under legal
obligation to pay holiday pay (as provided for in Article 94 of the Labor Code in the third official Department
of Labor edition) to its monthly paid employees who are uniformly paid by the month, irrespective of the
number of working days therein, with a salary of not less than the statutory or established minimum wage,
and this rule is applicable not only as of March 2, 1976 but as of November 1, 1974." cralaw vi rtua 1aw lib rary

Petitioner questions the validity of the pertinent section of the Rules and Regulations Implementing the
Labor Code as amended on which respondent arbitrator based his decision.

On the other hand, respondent corporation has raised procedural and substantive objections. It contends
that petitioner is barred from pursuing the present action in view of Article 263 of the Labor Code, which
provides in part that "voluntary arbitration awards or decisions shall be final, inappealable, and executory,"
as well as the rules implementing the same; the pertinent provision of the Collective Bargaining Agreement
between petitioner and respondent corporation; and Article 2044 of the Civil Code which provides that "any
stipulation that the arbitrators’ award or decision shall be final, is valid, without prejudice to Articles 2038,
2039, and 2040." Respondent corporation further contends that the special civil action of certiorari does not
lie because respondent arbitrator is not an "officer exercising judicial functions" within the contemplation of
Rule 65, Section 1, of the Rules of Court; that the instant petition raises an error of judgment on the part of
respondent arbitrator and not an error of jurisdiction; that it prays for the annulment of certain rules and
regulations issued by the Department of Labor, not for the annulment of the voluntary arbitration
proceedings; and that appeal by certiorari under Section 29 of the Arbitration Law, Republic Act No. 876, is
not applicable to the case at bar because arbitration in labor disputes is expressly excluded by Section 3 of
said law.chanrob les law li bra ry : red

These contentions have been ruled against in the decision of this Court in the case of Oceanic Bic Division
(FFW) v. Romero, promulgated on July 16, 1984, wherein it stated: jgc:chan roble s.com.p h

"We agree with the petitioner that the decisions of voluntary arbitrators must be given the highest respect
and as a general rule must be accorded a certain measure of finality. This is especially true where the
arbitrator chosen by the parties enjoys the first rate credentials of Professor Flerida Ruth Pineda Romero,
Director of the U.P. Law Center and an academician of unquestioned expertise in the field of Labor Law. It is
not correct, however, that this respect precludes the exercise of judicial review over their decisions. Article
262 of the Labor Code making voluntary arbitration awards final, inappealable and executory, except where
the money claims exceed P100,000.00 or 40% of the paid-up capital of the employer or where there is
abuse of discretion or gross incompetence refers to appeals to the National Labor Relations Commission and
not to judicial review.

"In spite of statutory provisions making ‘final’ the decisions of certain administrative agencies, we have
taken cognizance of petitions questioning these decisions where want of jurisdiction, grave abuse of
discretion, violation of due process, denial of substantial justice, or erroneous interpretation of the Law were
brought to our attention. . . .

x x x
"A voluntary arbitrator by the nature of her functions acts in a quasi-judicial capacity. There is no reason
why her decisions involving interpretation of law should be beyond this Court’s review. Administrative
officials are presumed to act in accordance with law and yet we do not hesitate to pass upon their work
where a question of law is involved or where a showing of abuse of discretion in their official acts is properly
raised in petitions for certiorari." (130 SCRA 392, 399, 400-401)

In denying petitioner’s claim for holiday pay, respondent arbitrator stated that although monthly salaried
employees are not among those excluded from receiving such additional pay under Article 94 of the Labor
Code of the Philippines, to wit: chan rob les vi rtual lawlib rary

ART. 94. Right to holiday pay. — (a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid
compensation equivalent to twice his regular rate; and

(c) As used in this Article, "holiday" includes: New Year’s Day, Maundy Thursday, Good Friday, the ninth of
April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and
the thirtieth of December, and the day designated by law for holding a general election.

they appear to be excluded under Sec. 2, Rule IV, Book III of the Rules and Regulations implementing said
provision which reads thus: chan rob1 es virt ual 1aw li bra ry

SEC. 2. Status of employees paid by the month. — Employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a salary of not less than the statutory or
established minimum wage shall be presumed to be paid for all days in the month whether worked or not.

Respondent arbitrator further opined that respondent corporation does not have any legal obligation to grant
its monthly salaried employees holiday pay, unless it is argued that the pertinent section of the Rules and
Regulations implementing Section 94 of the Labor Code is not in conformity with the law, and thus, without
force and effect.

This issue was subsequently decided on October 24, 1984 by a division of this Court in the case of Insular
Bank of Asia and America Employees’ Union (IBAAEU) v. Inciong, wherein it held as follows: jgc:c hanrobles. com.ph

"WE agree with the petitioner’s contention that Section 2, Rule IV, Book III of the implementing rules and
Policy Instruction No. 9, issued by the then Secretary of Labor are null and void since in the guise of
clarifying the Labor Code’s provisions on holiday pay, they in effect amended them by enlarging the scope of
their exclusion (p. 11, rec.)

"Article 94 of the Labor Code, as amended by P.D. 850, provides: c han rob1es v irt ual 1aw l ibra ry

‘Art. 94. Right to holiday pay. — (a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly employing less than ten (10) workers . . .’

"The coverage and scope of exclusion of the Labor Code’s holiday pay provisions is spelled out under Article
82 thereof which reads: chan rob1e s virtual 1aw l ibra ry

‘Art. 82. Coverage. — The provision of this Title shall apply to employees in all establishments and
undertakings, whether for profit or not, but not to government employees, managerial employees, field
personnel, members of the family of the employer who are dependent on him for support, domestic helpers,
persons, in the personal service of another, and workers who are paid by results as determined by the
Secretary of Labor in appropriate regulations.’

x x x

"From the above-cited provisions, it is clear that monthly paid employees are not excluded from the benefits
of holiday pay. However, the implementing rules on holiday pay promulgated by the then Secretary of Labor
excludes monthly paid employees from the said benefits by inserting under Rule IV, Book III of the
implementing rules, Section 2, which provides that: ‘employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a salary of not less than the statutory or
established minimum wage shall be presumed to be paid for all days in the month whether worked or not.’"
(132 SCRA 663, 672-673).

This ruling was reiterated by the Court en banc on August 28, 1985 in the case of Chartered Bank
Employees Association v. Ople, wherein it added that: cha nrob les vi rtu alawlibra ry cha nro bles. com:chan roble s.com. ph

"The questioned Sec. 2, Rule IV, Book III of the Integrated Rules and the Secretary’s Policy Instruction No.
9 add another excluded group, namely ‘employees who are uniformly paid by the month.’ While the
additional exclusion is only in the form of a presumption that all monthly paid employees have already been
paid holiday pay, it constitutes a taking away or a deprivation which must be in the law if it is to be valid. An
administrative interpretation which diminishes the benefits of labor more than what the statute delimits or
withholds is obviously ultra vires." (138 SCRA 273, 282. See also CBTC Employees Union v. , Clave, January
7, 1986, 141 SCRA 9.)

Lastly, respondent corporation contends that mandamus does not lie to compel the performance of an act
which the law does not clearly enjoin as a duty. True it is also that mandamus is not proper to enforce a
contractual obligation, the remedy being an action for specific performance (Province of Pangasinan v.
Reparations Commission, November 29, 1977, 80 SCRA 376). In the case at bar, however, in view of the
above cited subsequent decisions of this Court clearly defining the legal duty to grant holiday pay to monthly
salaried employees, mandamus is an appropriate equitable remedy (Dionisio v. Paterno, July 23, 1980, 98
SCRA 677; Gonzales v. Government Service Insurance System, September 10, 1981, 107 SCRA 492).

WHEREFORE, the questioned decision of respondent arbitrator is SET ASIDE and respondent corporation is
ordered to GRANT holiday pay to its monthly salaried employees. No costs.

SO ORDERED.
[G.R. No. L-48437. September 30, 1986.]

MANTRADE/FMMC DIVISION EMPLOYEES AND WORKERS UNION (represented by PHILIPPINE

SOCIAL SECURITY LABOR UNION — PSSLU Fed. — TUCP), Petitioner, v. ARBITRATOR FROILAN M.
BACUNGAN and MANTRADE DEVELOPMENT CORPORATION, Respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; VOLUNTARY ARBITRATORS; DECISIONS SUBJECT TO
JUDICIAL REVIEW. — The contentions of respondent corporation have been ruled against in the decision of
this court in the case of Oceanic Bic Division (FFW) v. Romero, promulgated on July 16, 1984, wherein it
stated: . . . "A voluntary arbitrator by the nature of her functions acts in a quasijudicial capacity. There is no
reason why her decisions involving interpretation of law should be beyond this court’s review. Administrative
officials are presumed to act in accordance with law and yet we do not hesitate to pass upon their work
where a question of law is involved or where a showing of abuse of discretion in their officials acts is
properly raised in petitions for certiorari." (130 SCRA 392, 399, 400-401)

2. ID.; ID.; GRANT FOR HOLIDAY PAY MONTHLY PAID EMPLOYEES; ISSUE SETTLED IN THE CASES OF
INSULAR BANK OF ASIA AND AMERICA EMPLOYEES’ UNION VS. INCIONG, [132 SCRA 633], AND
CHARTERED BANK EMPLOYEES UNION VS. OPLE [141 SCRA 9]. — Respondent arbitrator opined that
respondent corporation does not have any legal obligation to grant its monthly salaried employees holiday
pay, unless it is argued that the pertinent section of the Rule and Regulations implementing Section 94 of
the Labor Code is not in conformity with the law, and thus, without force and effect. This issue was
subsequently decided on October 24, 1984 by a division of this court in the case of Insular Bank of Asia and
American Employees’ Union (IBAAEU) v. Inciong, wherein it held as follows: "We agree with petitioner’s
contention that Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No. 9 issued by
the then Secretary of Labor are null and void since in the guise of clarifying the Labor Code’s provisions on
holiday pay, they in effect amended them enlarging the scope of their exclusion (p. 11, rec.). . . . "From the
above-cited provisions, it is clear that monthly paid employees are not excluded from the benefits of holiday
pay. However, the implementing rules on holiday pay promulgated by the then Secretary of Labor excludes
monthly paid employees from the said benefits by inserting under Rule IV, Book III of the implementing
rules, section 2, which provides that: ‘employees who are uniformly paid by the month, irrespective of the
number of working days therein , with the salary of not less than the statutory or established minimum
wage shall be presumed to be paid for all days in the month whether worked or not." (132 SCRA 663, 672-
673) This ruling was reiterated by the court en banc on August 28, 1985 in the case of Chartered Bank
Employees Association v. Ople, wherein it added that: "The questioned Sec. 2, Rule IV, Book III of the
Integrated Rules and the Secretary’s Policy Instruction No. 9 add another excluded group, namely
‘employees who are uniformly paid by the month’. While additional exclusion is only in the form of a
presumption that all monthly paid employees have already been paid holiday paid, it constitutes a taking
away or a deprivation which must be in the law if it is to be valid. An administrative interpretation which
diminishes the benefits of labor more than what the statute delimits or withholds is obviously ultra vires."
(138 SCRA 273, 282. See also CBTC Employees Union v. Clave, January 7, 1986, 141 SCRA 9.)

3. REMEDIAL LAW; SPECIAL CIVIL ACTION; MANDAMUS; APPROPRIATE EQUITABLE REMEDY IN CASE AT
BAR. — Respondent corporation contends that mandamus does not lie to compel the performance of an act
which the law does not clearly enjoin as a duty. True it is also that mandamus is not proper to enforce a
contractual obligation, the remedy being an action for specific performance (Province of Pangasinan v.
Reparations Commission, November 29, 1977, 80 SCRA 376). In the case at bar, however, in view of the
above-cited subsequent decisions of this Court clearly defining the legal duty to grant holiday pay to
monthly salaried employees, mandamus is an appropriate equitable remedy (Dionisio v. Paterno, July 23,
1980, 98 SCRA 677; Gonzales v. Government Service Insurance System, September 10, 1981, 107 SCRA
492).

DECISION

FERIA, J.:

This is a petition for Certiorari and Mandamus filed by petitioner against arbitrator Froilan M. Bacungan and
Mantrade Development Corporation arising from the decision of respondent arbitrator, the dispositive part of
which reads as follows: jgc:chan robles. com.ph

"CONSIDERING ALL THE ABOVE, We rule that Mantrade Development Corporation is not under legal
obligation to pay holiday pay (as provided for in Article 94 of the Labor Code in the third official Department
of Labor edition) to its monthly paid employees who are uniformly paid by the month, irrespective of the
number of working days therein, with a salary of not less than the statutory or established minimum wage,
and this rule is applicable not only as of March 2, 1976 but as of November 1, 1974." cralaw vi rtua 1aw lib rary

Petitioner questions the validity of the pertinent section of the Rules and Regulations Implementing the
Labor Code as amended on which respondent arbitrator based his decision.

On the other hand, respondent corporation has raised procedural and substantive objections. It contends
that petitioner is barred from pursuing the present action in view of Article 263 of the Labor Code, which
provides in part that "voluntary arbitration awards or decisions shall be final, inappealable, and executory,"
as well as the rules implementing the same; the pertinent provision of the Collective Bargaining Agreement
between petitioner and respondent corporation; and Article 2044 of the Civil Code which provides that "any
stipulation that the arbitrators’ award or decision shall be final, is valid, without prejudice to Articles 2038,
2039, and 2040." Respondent corporation further contends that the special civil action of certiorari does not
lie because respondent arbitrator is not an "officer exercising judicial functions" within the contemplation of
Rule 65, Section 1, of the Rules of Court; that the instant petition raises an error of judgment on the part of
respondent arbitrator and not an error of jurisdiction; that it prays for the annulment of certain rules and
regulations issued by the Department of Labor, not for the annulment of the voluntary arbitration
proceedings; and that appeal by certiorari under Section 29 of the Arbitration Law, Republic Act No. 876, is
not applicable to the case at bar because arbitration in labor disputes is expressly excluded by Section 3 of
said law.chanrob les law li bra ry : red

These contentions have been ruled against in the decision of this Court in the case of Oceanic Bic Division
(FFW) v. Romero, promulgated on July 16, 1984, wherein it stated: jgc:chan roble s.com.p h

"We agree with the petitioner that the decisions of voluntary arbitrators must be given the highest respect
and as a general rule must be accorded a certain measure of finality. This is especially true where the
arbitrator chosen by the parties enjoys the first rate credentials of Professor Flerida Ruth Pineda Romero,
Director of the U.P. Law Center and an academician of unquestioned expertise in the field of Labor Law. It is
not correct, however, that this respect precludes the exercise of judicial review over their decisions. Article
262 of the Labor Code making voluntary arbitration awards final, inappealable and executory, except where
the money claims exceed P100,000.00 or 40% of the paid-up capital of the employer or where there is
abuse of discretion or gross incompetence refers to appeals to the National Labor Relations Commission and
not to judicial review.

"In spite of statutory provisions making ‘final’ the decisions of certain administrative agencies, we have
taken cognizance of petitions questioning these decisions where want of jurisdiction, grave abuse of
discretion, violation of due process, denial of substantial justice, or erroneous interpretation of the Law were
brought to our attention. . . .

x x x

"A voluntary arbitrator by the nature of her functions acts in a quasi-judicial capacity. There is no reason
why her decisions involving interpretation of law should be beyond this Court’s review. Administrative
officials are presumed to act in accordance with law and yet we do not hesitate to pass upon their work
where a question of law is involved or where a showing of abuse of discretion in their official acts is properly
raised in petitions for certiorari." (130 SCRA 392, 399, 400-401)

In denying petitioner’s claim for holiday pay, respondent arbitrator stated that although monthly salaried
employees are not among those excluded from receiving such additional pay under Article 94 of the Labor
Code of the Philippines, to wit: chan rob les vi rtual lawlib rary

ART. 94. Right to holiday pay. — (a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid
compensation equivalent to twice his regular rate; and

(c) As used in this Article, "holiday" includes: New Year’s Day, Maundy Thursday, Good Friday, the ninth of
April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and
the thirtieth of December, and the day designated by law for holding a general election.

they appear to be excluded under Sec. 2, Rule IV, Book III of the Rules and Regulations implementing said
provision which reads thus: chan rob1 es virt ual 1aw li bra ry

SEC. 2. Status of employees paid by the month. — Employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a salary of not less than the statutory or
established minimum wage shall be presumed to be paid for all days in the month whether worked or not.

Respondent arbitrator further opined that respondent corporation does not have any legal obligation to grant
its monthly salaried employees holiday pay, unless it is argued that the pertinent section of the Rules and
Regulations implementing Section 94 of the Labor Code is not in conformity with the law, and thus, without
force and effect.

This issue was subsequently decided on October 24, 1984 by a division of this Court in the case of Insular
Bank of Asia and America Employees’ Union (IBAAEU) v. Inciong, wherein it held as follows: jgc:c hanrobles. com.ph

"WE agree with the petitioner’s contention that Section 2, Rule IV, Book III of the implementing rules and
Policy Instruction No. 9, issued by the then Secretary of Labor are null and void since in the guise of
clarifying the Labor Code’s provisions on holiday pay, they in effect amended them by enlarging the scope of
their exclusion (p. 11, rec.)

"Article 94 of the Labor Code, as amended by P.D. 850, provides: c han rob1es v irt ual 1aw l ibra ry

‘Art. 94. Right to holiday pay. — (a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly employing less than ten (10) workers . . .’

"The coverage and scope of exclusion of the Labor Code’s holiday pay provisions is spelled out under Article
82 thereof which reads: chan rob1e s virtual 1aw l ibra ry

‘Art. 82. Coverage. — The provision of this Title shall apply to employees in all establishments and
undertakings, whether for profit or not, but not to government employees, managerial employees, field
personnel, members of the family of the employer who are dependent on him for support, domestic helpers,
persons, in the personal service of another, and workers who are paid by results as determined by the
Secretary of Labor in appropriate regulations.’

x x x

"From the above-cited provisions, it is clear that monthly paid employees are not excluded from the benefits
of holiday pay. However, the implementing rules on holiday pay promulgated by the then Secretary of Labor
excludes monthly paid employees from the said benefits by inserting under Rule IV, Book III of the
implementing rules, Section 2, which provides that: ‘employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a salary of not less than the statutory or
established minimum wage shall be presumed to be paid for all days in the month whether worked or not.’"
(132 SCRA 663, 672-673).

This ruling was reiterated by the Court en banc on August 28, 1985 in the case of Chartered Bank
Employees Association v. Ople, wherein it added that: cha nrob les vi rtu alawlibra ry cha nro bles. com:chan roble s.com. ph

"The questioned Sec. 2, Rule IV, Book III of the Integrated Rules and the Secretary’s Policy Instruction No.
9 add another excluded group, namely ‘employees who are uniformly paid by the month.’ While the
additional exclusion is only in the form of a presumption that all monthly paid employees have already been
paid holiday pay, it constitutes a taking away or a deprivation which must be in the law if it is to be valid. An
administrative interpretation which diminishes the benefits of labor more than what the statute delimits or
withholds is obviously ultra vires." (138 SCRA 273, 282. See also CBTC Employees Union v. , Clave, January
7, 1986, 141 SCRA 9.)

Lastly, respondent corporation contends that mandamus does not lie to compel the performance of an act
which the law does not clearly enjoin as a duty. True it is also that mandamus is not proper to enforce a
contractual obligation, the remedy being an action for specific performance (Province of Pangasinan v.
Reparations Commission, November 29, 1977, 80 SCRA 376). In the case at bar, however, in view of the
above cited subsequent decisions of this Court clearly defining the legal duty to grant holiday pay to monthly
salaried employees, mandamus is an appropriate equitable remedy (Dionisio v. Paterno, July 23, 1980, 98
SCRA 677; Gonzales v. Government Service Insurance System, September 10, 1981, 107 SCRA 492).

WHEREFORE, the questioned decision of respondent arbitrator is SET ASIDE and respondent corporation is
ordered to GRANT holiday pay to its monthly salaried employees. No costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 88626 October 12, 1990

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, petitioner,

vs.
VOLUNTARY ARBITRATOR ALBERTO MONTEMAYOR, MA. EMMA J. TOTESORA, MIRICAR
A. MARCOS and MA. LOURDES U. MACABENTA, respondents.

David T. Paradero and Nicanor G. Nuevas for petitioner.

Antonio C. Azarcon for private respondents.

REGALADO, J.:

This petition for certiorari impugns the resolution dated February 14, 1989 of Voluntary Arbitrator Alberto Montemayor, and his order dated
May 12, 1989 denying petitioner's motion for the reconsideration thereof, in the case entitled "Re: Voluntary Arbitration of the Complaints of
Ma. Emma J. Totesora, Miricar A. Marcos and Maria Lourdes U. Macabenta."

The factual backdrop of the case is summarized by the Solicitor General, which summary we quote
with approval, thus:

The case at bar concerns the complaints of three Traffic Operators of petitioner
Philippine Long Distance Telephone Company at its Davao Exchange. Herein private
respondents Ma. Emma J. Totesora and Miricar A. Marcos were regular employees
who were dismissed for allegedly placing free long distance calls from Davao to
Manila. The employment of private respondent Maria Lourdes U. Macabenta,
allegedly on probationary status, was terminated on the ground that she failed to
meet the minimum requirements for permanent employment.

As regular Traffic Operators at petitioner's Davao Office, it was the main function of
respondents Totesora and Marcos to process long distance calls. It appears that, on
different dates, said respondents were caught passing free long distance calls to
Manila. Asked to explain, Ms. Totesora stated that it was not altogether a free call;
that she just allowed the parties to talk a little longer without timing the entire call. For
her part, Ms. Marcos admitted placing a free call to her brot(h)er in Manila whom she
had not heard of for some time. Finding their explanations unsatisfactory, petitioner
company terminated their services.

With respect to respondent Macabenta, petitioner claimed that she was employed by
the Company effective June 2, 1986 as probationary Traffic Operator at its Davao
Exchange; that her probationary status was for three month; that Ms. Macabenta
failed to meet the minimum requirement for regularization; that as a result thereof,
her employment was terminated effective June 17, 1986. Ms. Macabenta, on the
other hand, claimed that she worked continuously for petitioner from April 1985 to
August 18, 1986, and that, consequently, she should have been regularized long
before. Hence, her termination from the service was illegal.

The Union to which the dismissed employees belong and petitioner company agreed
in writing to submit their dispute to voluntary arbitration and be bound by the decision
of the Voluntary Arbitrator. 1

After hearing, Voluntary Arbitrator Montemayor issued the assailed resolution which reads as
follows:

A. — On the issue of the validity of the dismissal of Ma. Emma

Totesora and Ms. Miricar Marcos in my personal observation based
on the records submitted, I found Ms. Totesora and Ms. Marcos to
have violated company regulations. However, it is my opinion, that
outright dismissal is too drastic for a first offense. I recommended,
instead, a transfer of assignment in the company. This arrangement, I
 believe, is a good compromise considering that while the company is
for outright dismissal of the employees concerned, the union is asking
for the return of the said employees to their original positions.

B. — On the legality of the termination of the probationary

employment of Ms. Maria Lourdes Macabenta cannot understand
why the company waited for a year before they decided that Ms.
Macabenta should undergo probationary employment. The records
showed that she was employed since April 1985 and yet she did not
undergo probationary employment until June 2, 1986. I also noted
that during her employment for that period there were no serious
complaints about her performance. Personally, I find the delay of the
probation period unusual. Because of this dilemma I believe that
justice and fair play can only he attained by retaining Ms. Macabenta
as an employee but not necessarily as a traffic operator. 2

Petitioner's motion for reconsideration having been denied, the instant petition was filed with the
following assignment of errors:

Respondent Atty. Montemayor committed a grave abuse of discretion when it (sic)

ordered for the reinstatement of respondents Totesora and Marcos who committed
acts inimical to the interest of the petitioner which were valid causes for their
dismissal, and to the positions other than that from which they were dismissed.

II

Respondent Atty. Montemayor committed a grave abuse of discretion when it (sic)

considered respondent Macabenta as a regular employee and ordered her
reinstatement not to her former position. 3

Arbitrator Montemayor made a finding that private respondents Totesora and Marcos did violate
company regulations consisting of their acts of passing free calls. A finding was also made of private
respondent Macabenta being a regular employee. We are inclined not to disturb these findings
which are uncontroverted and supported by the evidence on record. Basic is the rule that judicial
review by this Court in labor cases does not go so far as to evaluate the sufficiency of the evidence
upon which the labor officer or office based his or its determination but are limited to issues of
jurisdiction or grave abuse of discretion. 4

The only issues, therefore, that are to be resolved in this petition are (1) whether or not there was
grave abuse of discretion on the part of public respondent in ordering the reinstatement of private
respondents, taking into consideration the aforementioned findings; and (2) whether or not the
resolution of public respondent is, first and foremost, subject to judicial review.

Apropos of the power of judicial review, while decisions of voluntary arbitrators are given the Highest
respect and accorded a certain measure of finality, this does not preclude the exercise of judicial
review over such decisions. 5 A voluntary arbitrator, by the nature of his functions, acts in a quasi-
judicial capacity. There is no reason why his decisions involving interpretations of law should be
beyond the Supreme Court's review. Administrative officials are presumed to act in accordance with
law and yet the Court does not hesitate to pass upon their work where a question of law is involved
or where there is a showing of abuse of authority or discretion in their official acts. 6
In the case at bar, we hold that the voluntary arbitrator gravely abused his discretion in ordering the
reinstatement of private respondents Totesora and Marcos. Petitioner was legally justified in
dismissing the latter. Private respondents' conduct rendered them unworthy of the trust and
confidence demanded of them by their employer. Considering that an employer is entitled to
terminate the services of employees for just cause and acts of dishonesty have been held to be
sufficient grounds for dismissal, private respondents Totesora and Marcos did not have any right to
be reinstated. 7 The employer's obligation to give his workers just compensation and treatment
carries with it the corollary right to expect from the workers adequate work, diligence and good
conduct. 8

While, as a rule, the Supreme Court leans over backwards to help workers and employees continue
with their employment or to mitigate the penalties imposed on them, acts of dishonesty in handling
company property are a different matter. 9 As aptly pointed out by petitioner:

... Long distance call is the very lifeblood of the petitioner, there is no doubt about
this. To fraudulently and dishonestly deprive the petitioner of long distance calls,
therefore, is not only clearly inimical to the petitioner, but very destructive as well.

xxx xxx xxx

Petitioner agrees that there are times when outright dismissal is too drastic for a first
offense. In fact, petitioner's rules and regulations on certain offenses like tardiness,
drinking, fighting, etc. provide dismissal only on the second and third infraction. But
there should be a distinction as to the nature of the offense. On pet(t)y offenses as
cited above, petitioner is one with Atty. Montemayor that dismissal is too drastic for
the first offense. But definitely not if the nature of the offense goes to the very heart
and essence of the company, as in the case at bar, and especially if the offender has
shown propensity for dishonesty.

Kindly please take note that Ms. Totesora when she committed the act for which she
was dismissed was only barely two (2) years after becoming a regular employee. On
the other hand, Ms. Marcos was barely a month a regular employee when she was
caught passing (a) free long distance call. And to think that these two were
thoroughly drilled on Company procedures and regulations before being hired.

Furthermore, petitioner respectfully submits that Atty. Montemayor in effect is

encouraging the petitioner's traffic operators to defraud the petitioner of legitimate
revenues by passing free long distance calls since anyway they will not be,
dismissed outright if they will be caught for the first time, assuming they will be
caught at all. This should not be allowed. 10

In the ultimate analysis, dismissal of a dishonest employee is in the best interest not only of
management but also of labor. As a measure of self-protection against acts inimical to its interest, a
company has the right to dismiss its erring employees. The law never intended to impose unjust
situations on either labor or management. 11

With respect to private respondent Macabenta's case, on the other hand, we hold that her dismissal
was not justified and, therefore, her reinstatement is in order. Her reinstatement should, however, be
to the position she was occupying before her dismissal. Having been employed by petitioner for
more than a year, she automatically became a regular employee regardless of the fact that her
status at the commencement of her employment was supposedly that of a casual employee as
claimed by petitioner.
Article 280 of the Labor Code is clear on the matter, to wit:

ART. 280. Regular and Casual Employment. — The provisions of written agreement
to the contrary notwithstanding and regardless of the oral agreements of the parties,
an employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment has been fixed for
a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment is for the
duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists (Emphasis supplied).

Besides, we believe that private respondent Macabenta is also circumstanced under the first
paragraph of the aforequoted provision. Being a traffic operator, she was assigned to perform tasks
which are necessary or desirable in the usual business or trade of petitioner company which is
engaged in the telecommunications industry. On both considerations, her employment should,
therefore, be deemed to be that of a regular employee.

WHEREFORE, the petition for certiorari is GRANTED in part in the sense that the directive of the
labor arbiter for the reinstatement of private respondents Totesora and Marcos is set aside, and
DENIED with respect to petitioner's complaint against private respondent Macabenta's
reinstatement. Petitioner is hereby ordered to reinstate private respondent Macabenta to her former
position or to a substantially equivalent position without loss of seniority rights, and to pay her
backwages not exceeding three (3) years without qualification or deduction conformably with case
law prevailing during the period involved in this case.

This judgment is immediately executory.

SO ORDERED.

G.R. No. 85279 July 28, 1989

SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), DIONISION T. BAYLON,

RAMON MODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO DE ALDAY, SERGIO
ARANETA, PLACIDO AGUSTIN, VIRGILIO MAGPAYO, petitioner,
vs.
THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. CEZAR C. PERALEJO,
RTC, BRANCH 98, QUEZON CITY, respondents.

Vicente T. Ocampo & Associates for petitioners.

CORTES, J:
Primarily, the issue raised in this petition is whether or not the Regional Trial Court can enjoin the
Social Security System Employees Association (SSSEA) from striking and order the striking
employees to return to work. Collaterally, it is whether or not employees of the Social Security
System (SSS) have the right to strike.

The antecedents are as follows:

On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City a complaint for
damages with a prayer for a writ of preliminary injunction against petitioners, alleging that on June 9,
1987, the officers and members of SSSEA staged an illegal strike and baricaded the entrances to
the SSS Building, preventing non-striking employees from reporting for work and SSS members
from transacting business with the SSS; that the strike was reported to the Public Sector Labor -
Management Council, which ordered the strikers to return to work; that the strikers refused to return
to work; and that the SSS suffered damages as a result of the strike. The complaint prayed that a
writ of preliminary injunction be issued to enjoin the strike and that the strikers be ordered to return
to work; that the defendants (petitioners herein) be ordered to pay damages; and that the strike be
declared illegal.

It appears that the SSSEA went on strike after the SSS failed to act on the union's demands, which
included: implementation of the provisions of the old SSS-SSSEA collective bargaining agreement
(CBA) on check-off of union dues; payment of accrued overtime pay, night differential pay and
holiday pay; conversion of temporary or contractual employees with six (6) months or more of
service into regular and permanent employees and their entitlement to the same salaries,
allowances and benefits given to other regular employees of the SSS; and payment of the children's
allowance of P30.00, and after the SSS deducted certain amounts from the salaries of the
employees and allegedly committed acts of discrimination and unfair labor practices [Rollo, pp. 21-
241].

The court a quo, on June 11, 1987, issued a temporary restraining order pending resolution of the
application for a writ of preliminary injunction [Rollo, p. 71.] In the meantime, petitioners filed a
motion to dismiss alleging the trial court's lack of jurisdiction over the subject matter [Rollo, pp. 72-
82.] To this motion, the SSS filed an opposition, reiterating its prayer for the issuance of a writ of
injunction [Rollo, pp. 209-222]. On July 22,1987, in a four-page order, the court a quo denied the
motion to dismiss and converted the restraining order into an injunction upon posting of a bond, after
finding that the strike was illegal [Rollo, pp. 83- 86]. As petitioners' motion for the reconsideration of
the aforesaid order was also denied on August 14, 1988 [Rollo, p. 94], petitioners filed a petition
for certiorari and prohibition with preliminary injunction before this Court. Their petition was docketed
as G.R. No. 79577. In a resolution dated October 21, 1987, the Court, through the Third Division,
resolved to refer the case to the Court of Appeals. Petitioners filed a motion for reconsideration
thereof, but during its pendency the Court of Appeals on March 9,1988 promulgated its decision on
the referred case [Rollo, pp. 130-137]. Petitioners moved to recall the Court of Appeals' decision. In
the meantime, the Court on June 29,1988 denied the motion for reconsideration in G.R. No. 97577
for being moot and academic. Petitioners' motion to recall the decision of the Court of Appeals was
also denied in view of this Court's denial of the motion for reconsideration [Rollo, pp. 141- 143].
Hence, the instant petition to review the decision of the Court of Appeals [Rollo, pp. 12-37].

Upon motion of the SSS on February 6,1989, the Court issued a temporary restraining order
enjoining the petitioners from staging another strike or from pursuing the notice of strike they filed
with the Department of Labor and Employment on January 25, 1989 and to maintain the status
quo [Rollo, pp. 151-152].
The Court, taking the comment as answer, and noting the reply and supplemental reply filed by
petitioners, considered the issues joined and the case submitted for decision.

The position of the petitioners is that the Regional Trial Court had no jurisdiction to hear the case
initiated by the SSS and to issue the restraining order and the writ of preliminary injunction, as
jurisdiction lay with the Department of Labor and Employment or the National Labor Relations
Commission, since the case involves a labor dispute.

On the other hand, the SSS advances the contrary view, on the ground that the employees of the
SSS are covered by civil service laws and rules and regulations, not the Labor Code, therefore they
do not have the right to strike. Since neither the DOLE nor the NLRC has jurisdiction over the
dispute, the Regional Trial Court may enjoin the employees from striking.

In dismissing the petition for certiorari and prohibition with preliminary injunction filed by petitioners,
the Court of Appeals held that since the employees of the SSS, are government employees, they are
not allowed to strike, and may be enjoined by the Regional Trial Court, which had jurisdiction over
the SSS' complaint for damages, from continuing with their strike.

Thus, the sequential questions to be resolved by the Court in deciding whether or not the Court of
Appeals erred in finding that the Regional Trial Court did not act without or in excess of jurisdiction
when it took cognizance of the case and enjoined the strike are as follows:

1. Do the employees of the SSS have the right to strike?

2. Does the Regional Trial Court have jurisdiction to hear the case initiated by the SSS and to enjoin
the strikers from continuing with the strike and to order them to return to work?

These shall be discussed and resolved seriatim

The 1987 Constitution, in the Article on Social Justice and Human Rights, provides that the State
"shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right to strike in accordance with law" [Art. XIII, Sec.
31].

By itself, this provision would seem to recognize the right of all workers and employees, including
those in the public sector, to strike. But the Constitution itself fails to expressly confirm this
impression, for in the Sub-Article on the Civil Service Commission, it provides, after defining the
scope of the civil service as "all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with original charters," that
"[t]he right to self-organization shall not be denied to government employees" [Art. IX(B), Sec. 2(l)
and (50)]. Parenthetically, the Bill of Rights also provides that "[tlhe right of the people, including
those employed in the public and private sectors, to form unions, associations, or societies for
purposes not contrary to law shall not abridged" [Art. III, Sec. 8]. Thus, while there is no question that
the Constitution recognizes the right of government employees to organize, it is silent as to whether
such recognition also includes the right to strike.

Resort to the intent of the framers of the organic law becomes helpful in understanding the meaning
of these provisions. A reading of the proceedings of the Constitutional Commission that drafted the
1987 Constitution would show that in recognizing the right of government employees to organize, the
commissioners intended to limit the right to the formation of unions or associations only, without
including the right to strike.

Thus, Commissioner Eulogio R. Lerum, one of the sponsors of the provision that "[tlhe right to self-
organization shall not be denied to government employees" [Art. IX(B), Sec. 2(5)], in answer to the
apprehensions expressed by Commissioner Ambrosio B. Padilla, Vice-President of the Commission,
explained:

MR. LERUM. I think what I will try to say will not take that long. When we proposed
this amendment providing for self-organization of government employees, it does not
mean that because they have the right to organize, they also have the right to strike.
That is a different matter. We are only talking about organizing, uniting as a union.
With regard to the right to strike, everyone will remember that in the Bill of Rights,
there is a provision that the right to form associations or societies whose purpose is
not contrary to law shall not be abridged. Now then, if the purpose of the state is to
prohibit the strikes coming from employees exercising government functions, that
could be done because the moment that is prohibited, then the union which will go on
strike will be an illegal union. And that provision is carried in Republic Act 875. In
Republic Act 875, workers, including those from the government-owned and
controlled, are allowed to organize but they are prohibited from striking. So, the fear
of our honorable Vice- President is unfounded. It does not mean that because we
approve this resolution, it carries with it the right to strike. That is a different matter.
As a matter of fact, that subject is now being discussed in the Committee on Social
Justice because we are trying to find a solution to this problem. We know that this
problem exist; that the moment we allow anybody in the government to strike, then
what will happen if the members of the Armed Forces will go on strike? What will
happen to those people trying to protect us? So that is a matter of discussion in the
Committee on Social Justice. But, I repeat, the right to form an organization does not
carry with it the right to strike. [Record of the Constitutional Commission, vol. 1, p.
569].

It will be recalled that the Industrial Peace Act (R.A. No. 875), which was repealed by the Labor
Code (P.D. 442) in 1974, expressly banned strikes by employees in the Government, including
instrumentalities exercising governmental functions, but excluding entities entrusted with proprietary
functions:

.Sec. 11. Prohibition Against Strikes in the Government. — The terms and conditions
of employment in the Government, including any political subdivision or
instrumentality thereof, are governed by law and it is declared to be the policy of this
Act that employees therein shall not strike for the purpose of securing changes or
modification in their terms and conditions of employment. Such employees may
belong to any labor organization which does not impose the obligation to strike or to
join in strike: Provided, however, That this section shall apply only to employees
employed in governmental functions and not those employed in proprietary functions
of the Government including but not limited to governmental corporations.

No similar provision is found in the Labor Code, although at one time it recognized the right of
employees of government corporations established under the Corporation Code to organize and
bargain collectively and those in the civil service to "form organizations for purposes not contrary to
law" [Art. 244, before its amendment by B.P. Blg. 70 in 1980], in the same breath it provided that
"[t]he terms and conditions of employment of all government employees, including employees of
government owned and controlled corporations, shall be governed by the Civil Service Law, rules
and regulations" [now Art. 276]. Understandably, the Labor Code is silent as to whether or not
government employees may strike, for such are excluded from its coverage [Ibid]. But then the Civil
Service Decree [P.D. No. 807], is equally silent on the matter.

On June 1, 1987, to implement the constitutional guarantee of the right of government employees to
organize, the President issued E.O. No. 180 which provides guidelines for the exercise of the right to
organize of government employees. In Section 14 thereof, it is provided that "[t]he Civil Service law
and rules governing concerted activities and strikes in the government service shall be observed,
subject to any legislation that may be enacted by Congress." The President was apparently referring
to Memorandum Circular No. 6, s. 1987 of the Civil Service Commission under date April 21, 1987
which, "prior to the enactment by Congress of applicable laws concerning strike by government
employees ... enjoins under pain of administrative sanctions, all government officers and employees
from staging strikes, demonstrations, mass leaves, walk-outs and other forms of mass action which
will result in temporary stoppage or disruption of public service." The air was thus cleared of the
confusion. At present, in the absence of any legislation allowing government employees to strike,
recognizing their right to do so, or regulating the exercise of the right, they are prohibited from
striking, by express provision of Memorandum Circular No. 6 and as implied in E.O. No. 180. [At this
juncture, it must be stated that the validity of Memorandum Circular No. 6 is not at issue].

But are employees of the SSS covered by the prohibition against strikes?

The Court is of the considered view that they are. Considering that under the 1987 Constitution "[t]he
civil service embraces all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with original charters" [Art.
IX(B), Sec. .2(l) see also Sec. 1 of E.O. No. 180 where the employees in the civil service are
denominated as "government employees"] and that the SSS is one such government-controlled
corporation with an original charter, having been created under R.A. No. 1161, its employees are
part of the civil service [NASECO v. NLRC, G.R. Nos. 69870 & 70295, November 24,1988] and are
covered by the Civil Service Commission's memorandum prohibiting strikes. This being the case, the
strike staged by the employees of the SSS was illegal.

The statement of the Court in Alliance of Government Workers v. Minister of Labor and
Employment [G.R. No. 60403, August 3, 1:983, 124 SCRA 11 is relevant as it furnishes the rationale
for distinguishing between workers in the private sector and government employees with regard to
the right to strike:

The general rule in the past and up to the present is that 'the terms and conditions of
employment in the Government, including any political subdivision or instrumentality
thereof are governed by law" (Section 11, the Industrial Peace Act, R.A. No. 875, as
amended and Article 277, the Labor Code, P.D. No. 442, as amended). Since the
terms and conditions of government employment are fixed by law, government
workers cannot use the same weapons employed by workers in the private sector to
secure concessions from their employers. The principle behind labor unionism in
private industry is that industrial peace cannot be secured through compulsion by
law. Relations between private employers and their employees rest on an essentially
voluntary basis. Subject to the minimum requirements of wage laws and other labor
and welfare legislation, the terms and conditions of employment in the unionized
private sector are settled through the process of collective bargaining. In government
employment, however, it is the legislature and, where properly given delegated
power, the administrative heads of government which fix the terms and conditions of
employment. And this is effected through statutes or administrative circulars, rules,
 and regulations, not through collective bargaining agreements. [At p. 13; Emphasis
supplied].

Apropos is the observation of the Acting Commissioner of Civil Service, in his position paper
submitted to the 1971 Constitutional Convention, and quoted with approval by the Court in Alliance,
to wit:

It is the stand, therefore, of this Commission that by reason of the nature of the public
employer and the peculiar character of the public service, it must necessarily regard
the right to strike given to unions in private industry as not applying to public
employees and civil service employees. It has been stated that the Government, in
contrast to the private employer, protects the interest of all people in the public
service, and that accordingly, such conflicting interests as are present in private labor
relations could not exist in the relations between government and those whom they
employ. [At pp. 16-17; also quoted in National Housing Corporation v. Juco, G.R. No.
64313, January 17,1985,134 SCRA 172,178-179].

E.O. No. 180, which provides guidelines for the exercise of the right to organize of government
employees, while clinging to the same philosophy, has, however, relaxed the rule to allow
negotiation where the terms and conditions of employment involved are not among those fixed by
law. Thus:

.SECTION 13. Terms and conditions of employment or improvements thereof, except

those that are fixed by law, may be the subject of negotiations between duly
recognized employees' organizations and appropriate government authorities.

The same executive order has also provided for the general mechanism for the settlement of labor
disputes in the public sector to wit:

.SECTION 16. The Civil Service and labor laws and procedures, whenever
applicable, shall be followed in the resolution of complaints, grievances and cases
involving government employees. In case any dispute remains unresolved after
exhausting all the available remedies under existing laws and procedures, the parties
may jointly refer the dispute to the [Public Sector Labor- Management] Council for
appropriate action.

Government employees may, therefore, through their unions or associations, either petition the
Congress for the betterment of the terms and conditions of employment which are within the ambit of
legislation or negotiate with the appropriate government agencies for the improvement of those
which are not fixed by law. If there be any unresolved grievances, the dispute may be referred to the
Public Sector Labor - Management Council for appropriate action. But employees in the civil service
may not resort to strikes, walk-outs and other temporary work stoppages, like workers in the private
sector, to pressure the Govemment to accede to their demands. As now provided under Sec. 4, Rule
III of the Rules and Regulations to Govern the Exercise of the Right of Government- Employees to
Self- Organization, which took effect after the instant dispute arose, "[t]he terms and conditions of
employment in the government, including any political subdivision or instrumentality thereof and
government- owned and controlled corporations with original charters are governed by law and
employees therein shall not strike for the purpose of securing changes thereof."

II
The strike staged by the employees of the SSS belonging to petitioner union being prohibited by law,
an injunction may be issued to restrain it.

It is futile for the petitioners to assert that the subject labor dispute falls within the exclusive
jurisdiction of the NLRC and, hence, the Regional Trial Court had no jurisdiction to issue a writ of
injunction enjoining the continuance of the strike. The Labor Code itself provides that terms and
conditions of employment of government employees shall be governed by the Civil Service Law,
rules and regulations [Art. 276]. More importantly, E.O. No. 180 vests the Public Sector Labor -
Management Council with jurisdiction over unresolved labor disputes involving government
employees [Sec. 16]. Clearly, the NLRC has no jurisdiction over the dispute.

This being the case, the Regional Trial Court was not precluded, in the exercise of its general
jurisdiction under B.P. Blg. 129, as amended, from assuming jurisdiction over the SSS's complaint
for damages and issuing the injunctive writ prayed for therein. Unlike the NLRC, the Public Sector
Labor - Management Council has not been granted by law authority to issue writs of injunction in
labor disputes within its jurisdiction. Thus, since it is the Council, and not the NLRC, that has
jurisdiction over the instant labor dispute, resort to the general courts of law for the issuance of a writ
of injunction to enjoin the strike is appropriate.

Neither could the court a quo be accused of imprudence or overzealousness, for in fact it had
proceeded with caution. Thus, after issuing a writ of injunction enjoining the continuance of the strike
to prevent any further disruption of public service, the respondent judge, in the same order,
admonished the parties to refer the unresolved controversies emanating from their employer-
employee relationship to the Public Sector Labor - Management Council for appropriate action
[Rollo, p. 86].

III

In their "Petition/Application for Preliminary and Mandatory Injunction," and reiterated in their reply
and supplemental reply, petitioners allege that the SSS unlawfully withheld bonuses and benefits
due the individual petitioners and they pray that the Court issue a writ of preliminary prohibitive and
mandatory injunction to restrain the SSS and its agents from withholding payment thereof and to
compel the SSS to pay them. In their supplemental reply, petitioners annexed an order of the Civil
Service Commission, dated May 5, 1989, which ruled that the officers of the SSSEA who are not
preventively suspended and who are reporting for work pending the resolution of the administrative
cases against them are entitled to their salaries, year-end bonuses and other fringe benefits and
affirmed the previous order of the Merit Systems Promotion Board.

The matter being extraneous to the issues elevated to this Court, it is Our view that petitioners'
remedy is not to petition this Court to issue an injunction, but to cause the execution of the aforesaid
order, if it has already become final.

WHEREFORE, no reversible error having been committed by the Court of Appeals, the instant
petition for review is hereby DENIED and the decision of the appellate court dated March 9, 1988 in
CA-G.R. SP No. 13192 is AFFIRMED. Petitioners' "Petition/Application for Preliminary and
Mandatory Injunction" dated December 13,1988 is DENIED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
 FIRST DIVISION

G.R. No. 87676 December 20, 1989

REPUBLIC OF THE PHILIPPINES, represented by the NATIONAL PARKS DEVELOPMENT

COMMITTEE, petitioner,
vs.
THE HON. COURT OF APPEALS and THE NATIONAL PARKS DEVELOPMENT SUPERVISORY
ASSOCIATION & THEIR MEMBERS, respondents.

Bienvenido D. Comia for respondents.

GRIÑO-AQUINO, J.:

The Regional Trial Court of Manila, Branch III, dismissed for lack of jurisdiction, the petitioner's
complaint in Civil Case No. 88- 44048 praying for a declaration of illegality of the strike of the private
respondents and to restrain the same. The Court of Appeals denied the petitioner's petition for
certiorari, hence, this petition for review.

The key issue in this case is whether the petitioner, National Parks Development Committee
(NPDC), is a government agency, or a private corporation, for on this issue depends the right of its
employees to strike.

This issue came about because although the NPDC was originally created in 1963 under Executive
Order No. 30, as the Executive Committee for the development of the Quezon Memorial, Luneta and
other national parks, and later renamed as the National Parks Development Committee under
Executive Order No. 68, on September 21, 1967, it was registered in the Securities and Exchange
Commission (SEC) as a non-stock and non-profit corporation, known as "The National Parks
Development Committee, Inc."

However, in August, 1987, the NPDC was ordered by the SEC to show cause why its Certificate of
Registration should not be suspended for: (a) failure to submit the General Information Sheet from
1981 to 1987; (b) failure to submit its Financial Statements from 1981 to 1986; (c) failure to register
its Corporate Books; and (d) failure to operate for a continuous period of at least five (5) years since
September 27, 1967.

On August 18, 1987, the NPDC Chairman, Amado Lansang, Jr., informed SEC that his Office had
no objection to the suspension, cancellation, or revocation of the Certificate of Registration of NPDC.

By virtue of Executive Order No. 120 dated January 30, 1989, the NPDC was attached to the
Ministry (later Department) of Tourism and provided with a separate budget subject to audit by the
Commission on Audit.

On September 10, 1987, the Civil Service Commission notified NPDC that pursuant to Executive
Order No. 120, all appointments and other personnel actions shall be submitted through the
Commission.
Meanwhile, the Rizal Park Supervisory Employees Association, consisting of employees holding
supervisory positions in the different areas of the parks, was organized and it affiliated with the
Trade Union of the Philippines and Allied Services (TUPAS) under Certificate No. 1206.

On June 15, 1987, two collective bargaining agreements were entered into between NPDC and
NPDCEA (TUPAS local Chapter No. 967) and NPDC and NPDCSA (TUPAS Chapter No. 1206), for
a period of two years or until June 30, 1989.

On March 20, 1988, these unions staged a stake at the Rizal Park, Fort Santiago, Paco Park, and
Pook ni Mariang Makiling at Los Banos, Laguna, alleging unfair labor practices by NPDC.

On March 21, 1988, NPDC filed in the Regional Trial Court in Manila, Branch III, a complaint against
the union to declare the strike illegal and to restrain it on the ground that the strikers, being
government employees, have no right to strike although they may form a union.

On March 24, 1988, the lower court dismissed the complaint and lifted the restraining order for lack
of jurisdiction. It held that the case "properly falls under the jurisdiction of the Department of Labor,"
because "there exists an employer-employee relationship" between NPDC and the strikers, and "that
the acts complained of in the complaint, and which plaintiff seeks to enjoin in this action, fall under
paragraph 5 of Article 217 of the Labor Code, ..., in relation to Art. 265 of the same Code, hence,
jurisdiction over said acts does not belong to this Court but to the Labor Arbiters of the Department
of Labor." (p. 142, Rollo.).

Petitioner went to the Court of Appeals on certiorari (CA-G.R. SP No. 14204). On March 31, 1989,
the Court of appeals affirmed the order of the trial court, hence, this petition for review. The petitioner
alleges that the Court of Appeals erred:

1) in not holding that the NPDC employees are covered by the Civil Service Law; and

2) in ruling that petitioner's labor dispute with its employees is cognizable by the
Department of Labor.

We have considered the petition filed by the Solicitor General on behalf of NPDC and the comments
thereto and are persuaded that it is meritorious.

In Jesus P. Perlas, Jr. vs. People of the Philippines, G.R. Nos. 84637-39, August 2, 1989, we ruled
that the NPDC is an agency of the government, not a government-owned or controlled corporation,
hence, the Sandiganbayan had jurisdiction over its acting director who committed estafa. We held
thus:

The National Parks Development Committee was created originally as an Executive

Committee on January 14,1963, for the development of the Quezon Memorial,
Luneta and other national parks (Executive Order No. 30). It was later designated as
the National Parks Development Committee (NPDC) on February 7, 1974 (E.O. No.
69). On January 9, 1966, Mrs. Imelda R. Marcos and Teodoro F. Valencia were
designated Chairman and Vice- Chairman respectively (E.O. No. 3). Despite an
attempt to transfer it to the Bureau of Forest Development, Department of Natural
Resources, on December 1, 1975 (Letter of Implementation No. 39, issued pursuant
to PD No. 830, dated November 27, 1975), the NPDC has remained under the Office
of the President (E.O. No. 709, dated July 27, 1981).
 Since 1977 to 1981, the annual appropriations decrees listed NPDC as a regular
government agency under the Office of the President and allotments for its
maintenance and operating expenses were issued direct to NPDC (Exh. 10-A Perlas,
Item No. 2, 3). (Italics ours.)

Since NPDC is a government agency, its employees are covered by civil service rules and
regulations (Sec. 2, Article IX, 1987 Constitution). Its employees are civil service employees (Sec.
14, Executive Order No. 180).

While NPDC employees are allowed under the 1987 Constitution to organize and join unions of their
choice, there is as yet no law permitting them to strike. In case of a labor dispute between the
employees and the government, Section 15 of Executive Order No. 180 dated June 1, 1987 provides
that the Public Sector Labor- Management Council, not the Department of Labor and Employment,
shall hear the dispute. Clearly, the Court of Appeals and the lower court erred in holding that the
labor dispute between the NPDC and the members of the NPDSA is cognizable by the Department
of Labor and Employment.

WHEREFORE, the petition for review is granted. The decision of the Court of Appeals in CA-G.R.
SP No. 14204 is hereby set aside. The private respondents' complaint should be filed in the Public
Sector Labor-Management Council as provided in Section 15 of Executive Order No. 180. Costs
against the private respondents.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 95445 August 6, 1991

MANILA PUBLIC SCHOOL TEACHERS ASSOCIATION, FIDEL FABABIER MERLIN

ANONUEVO, MINDA GALANG and other teacher-members so numerous similarly
situated, petitioners-appellants,
vs.
THE HON. PERFECTO LAGUIO JR., in his capacity as Presiding Judge of the Regional Trial
Court of Manila, Branch 18, HON. ISIDRO CARIÑO, in his capacity as Secretary of Education,
Culture and Sports and the HON. ERLINDA LOLARGA in her capacity as Manila City Schools
Superintendent, respondents-appellees.

G.R No. 95590 August 6, 1991

ALLIANCE OF CONCERNED TEACHERS (ACT), ENRIQUE D. TORRES, RODRIGO G.

NATIVIDAD, FRANCISCO A. NERECINA, EVA V. FERIA, LUCIA R. CARRASCO, LEO R.
RAMBOYONG, ZENEIDA PEREZ, MARIA ACEJO AND OTHER SIMILARLY SITUATED PUBLIC
SCHOOL TEACHERS TOO NUMEROUS TO BE IMPLEADED, petitioners,
vs.
HON. ISIDRO CARIÑO in his capacity as Secretary of Education, Culture and Sports and HON.
GUILLERMO CARAGUE, in his capacity as Secretary of Budget and
Management, respondents.
Free Legal Assistance Group, Movement of Attorneys for Brotherhood Integrity & Nationalism and
Union of Lawyers and Advocates for petitioners in G.R. No. 95590.
Gregorio Fabros for petitioners in G.R. No. 95445.

NARVASA, J.:

The series of events that touched off these cases started with the so-called "mass action"
undertaken by some 800 public school teachers, among them members of the petitioning
associations in both cases, on September 17, 1990 to "dramatize and highlight"1 the teachers' plight
resulting from the alleged failure of the public authorities to act upon grievances that had time and
again been brought to the latter's attention.

The petition in G.R. No. 95590 alleges in great detail the character and origins of those grievances
as perceived by the petitioners, and the attempts to negotiate their correction;2 these are more
briefly, but quite adequately and with no sacrifice of relevant content, set forth in the petition in G.R.
No. 954451, portions of which are quoted hereunder without necessarily affirming their objective
truth or correctness:

3. Together with other teachers embracing the Teachers and Employees Consultative
Council (TECC) and the Alliance of Concerned Teachers, the petitioners, in accordance with
their Constitution and By-Laws, resolved to engage in mass concerted actions, after peaceful
dialogues with the heads of the Department of the Budget and Management, Senate and
House of Representatives in public hearings as well as after exhausting all administrative
remedies, to press for, among other things, the immediate payment of due chalk, clothing
allowances, 13th month pay for 1989 arising from the implementation of the Salary
Standardization Law, the recall of DECS Order 39 s. 1990 directing the oversizing of classes
and overloading of teachers pursuant to the cost-cutting measures of the government, the
hiring of 47,000 new teachers to ease the overload of existing teachers, the return of the
additional 1% real property taxes collected by local government units to education purposes
to be administered by the Local School Boards, and consequent recall of DBM Circulars
Nos. 904 and 9011 and local budget circular No. 47 consistent with RA 5447 and the new
Constitution mandating that education shall enjoy the highest budgetary priority in the
national budget, and other equally important demands; The dialogues and conferences
initiated by the petitioners and other teacher organizations were as early as March 14, 1989,
March 14, 1990, April 23, 1990, May 28, 1990, June 5, 1990, September 3, 1990 and
September 14, 1990 with the Civil Service Commission, the Senate and House of
Representatives, Department of Budget and Management and the Department of Education,
Culture and Sports, but all these did not result in the granting of the demands of the
petitioners, leaving them with no other recourse but to take direct mass action such as the
one they engaged in three weeks ago.

4. On September 14, 1990, the petitioners and other teachers in other cities and
municipalities in Metro Manila, staged a protest rally at the DECS premises without
disrupting classes as a last call for the government to negotiate the granting of demands. No
response was made by the respondent Secretary of Education, despite the demonstration,
so the petitioners began the ongoing protest mass actions on September, 17,1990. ...3

September 17, 1990 fell on a Monday, which was also a regular school day. There is no question
that the some 800 teachers who joined the mass action did not conduct their classes on that day;
instead, as alleged in the petition in G.R. No. 95590,4 they converged at the Liwasang Bonifacio in
the morning whence they proceeded to the National Office of the Department of Education, Culture
and Sport (DECS) for a whole-day assembly. At about 1:00 o'clock p.m., three representatives of the
group were allowed to see the respondent Secretary of Education who "brushed aside their
grievances," warned them that they would lose their jobs for going on illegal and unauthorized mass
leave. Upon leaving said respondent's presence, they were handed an order directing all participants
in the mass action to return to work in 24 hours or face dismissal, and a memorandum directing the
DECS officials concerned to initiate dismissal proceedings against those who did not comply and to
hire their replacements.5 Those directives notwithstanding, the mass actions continued into the
week, with more teachers joining in the days that followed. In its issue of September 19, 1990, the
newspaper Manila Standard reported that the day previous, the respondent Secretary of Education
had relieved 292 teachers who did not return to their classes. The next day, however, another daily,
Newsday, reported that the Secretary had revoked its dismissal order and instead placed 56 of the
292 teachers under preventive suspension, despite which the protesters' numbers had swelled to
4,000.6

On the record, what did happen was that, based on reports submitted by the principals of the various
public schools in Metro Manila, the respondent Secretary of Education had filed motu
proprio administrative complaints against the teachers who had taken part in the mass actions and
defied the return-to-work order on assorted charges like grave misconduct, gross neglect of duty,
gross violation of the Civil Service Law, absence without official leave, etc., and placed them under
90-day preventive suspension. The respondents were served copies of the charge sheets and given
five (5) days to submit answer or explanation. Later, on October 8, 1990, the respondent Secretary
constituted an investigating committee of four (4) to determine and take the appropriate course of
action on the formal charges and designated the special prosecutors on detail with the DECS to
handle their prosecution during the formal hearings.7

On October 11, 1990, the respondent Secretary of Education rendered the first of his now
questioned decisions on the administrative complaints. In Case No. DECS 90-002, he found twenty
(20) respondent teachers guilty of the charges preferred against them and dismissed them from
office, effective immediately.8 In the other investigations that followed and as of December 3, 1990,
658 teachers were dismissed, 40 were suspended for one (1) year, 33 for nine (9) months, and 122
for six (6) months; 398 were exonerated.9

Earlier, on September 19, 1990, the petitioners in G.R. No. 95445 had filed with the Regional Trial
Court of Manila Branch 18, a petition10 for prohibition, declaratory relief and preliminary mandatory
injunction to restrain the implementation of the return-to-work order of September 17, 1990 and the
suspension or dismissal of any teacher pursuant thereto and to declare said order null and void.
Issuance ex-parte of a temporary restraining order was sought, but seeing no compelling reason
therefor, the Regional Trial Court instead set the application for preliminary injunction for hearing,
and heard the same, on September 24, 1990. Thereafter and following the submission of
memorandums by the parties, said Court rendered judgment declaring the assailed return-to-work
order valid and binding, and dismissing the petition for lack of merit.11

Review of said judgment is sought in G. R. No. 95445.

G.R. No. 95590 is a parallel original proceeding for prohibition, mandamus and certiorari grounded
on the same state of facts and instituted for substantially the same purpose i.e., the invalidation of
the return-to-work order of the respondent Secretary of Education and all orders of suspension
and/or dismissal thereafter issued by said respondent against the teachers who had taken part in the
mass actions of September 17, 1990 and the days that followed.
Both cases were ordered consolidated by Resolution issued on October 25, 1990,12 and separate
comments were filed by the Solicitor General on behalf of the public respondents, in G.R. No. 95445
on October 31, 1990, and in G.R. No. 95590 on December 5, 1990.13 On November 20, 1990 the
parties were heard in oral argument on the petitioners' united pleas for a temporary restraining
order/mandatory injunction to restore the status quo ante and enjoin the public respondents from
continuing with the issuance of suspension orders and proceeding with the administrative cases
against the teachers involved in the mass actions.

Said pleas were denied by the Court in its Resolution of December 18, 1990,14 and a motion for
reconsideration filed by the petitioners in G.R. No. 95590 was likewise denied.

In two separate but identically-worded motions filed on their behalf by Atty. Froilan M.
Bacungan,15 the following persons, to wit: Florita D. Guazon, Elisea G. Lazo, Gonzala G. Sioson,
Esperanza Valero, Nenita Pangilinan, Ramon David, Aurora Bosi, Encarnita David, Socorro Sentin,
Crispulo Santos, Rodriguez Bagana, Rodolfo D. Bacsal, Ruben Bersamina, Rodolfo Arroyo, Irene
Gadil, Rebecca Roldan, Rosita Samson, Priscilla Avendia, Arturo Cabuhat, Rosalinda Caoili,
Angelina Corpuz, Purisima Lena, Elsie Somera, Dedaica Jusay, Teresita Partoza, Gloria Salvador,
Catherine San Agustin, Nestor Aguirre, Lorenzo Real, Celia Ronquillo, Vicente Carranza, Jessie
Villanueva, Yolanda Alura, Clara Alvarez, Danilo Llamas, Ladera Panita Myrna, Sena, Zenaida
Ligon, Daisy S. Conti, Danilo Caballes, Susan Maragat, Roberto Manlangit and Elizabeth T. Aguirre,
seek leave to withdraw as parties in G.R. No. 95590. These movants claim that they are such parties
although not individually so named in the petition in said case, being among those referred to in its
title as "other similarly situated public school teachers too numerous to be impleaded," who had
been administratively charged, then preventively suspended and/or dismissed in the wake of the
mass actions of September 1990. They assert that since this Court is not a trier of facts, they have
opted to appeal the questioned decisions or actuations of the respondent Secretary of Education to
the Civil Service Commission where they believe they will have "... all the opportunity to introduce
evidence on how (Secretary) Cariño violated their constitutional rights to due process of law ...
security of tenure and ... peaceably to assemble and petition the government for redress of
grievances ...."

An opposition to the first motion was filed16 which, briefly, contended that, as this Court had already
found that the petitioners had gone on an unlawful strike and that public respondent Cariño's acts
were prima facie lawful, the motion was either an attempt at forum-shopping or meant to avoid the
"inevitable outcome" of issues already pending final determination by the Court.

The Court's Resolution of December 18, 1990, supra, denying the petitioners' plea for restoration of
the status quo ante and to restrain/enjoin further suspensions of, and the initiation or continuation of,
administrative proceedings against the teachers involved, is based on the following postulates:

(1) the undenied indeed, the pleaded and admitted fact that about 800 teachers, among
them the individual petitioners and other unnamed but "similarly situated" members of the
petitioning associations in both cases, unauthorizedly absented themselves from their
classes on a regular schoolday, September 17, 1990, in order to participate in a "mass
action" to dramatize their grievances concerning, in the main, the alleged failure of the public
authorities, either to implement at all or to implement in a just and correct manner, certain
laws and measures intended to benefit them materially;

(2) the fact, too, that in the days that followed, more mass actions for the same purpose were
undertaken, notwithstanding a return-to-work order issued by the respondent Secretary of
Education; more teachers joined the so-called "peaceful assemblies" on September 18, 1990
and the number rising to 4,000 on September 19, 1990;17
 (3) that from the pleaded and admitted facts, these "mass actions" were to all intents and
purposes a strike; they constituted a concerted and unauthorized stoppage of, or absence
from, work which it was the teachers' duty to perform, undertaken for essentially economic
reasons;

(4) that this court had already definitively ruled that employees in the public (civil) service,
unlike those in the private sector, do not have the right to strike, although guaranteed the
right to self-organization, to petition Congress for the betterment of employment terms and
conditions and to negotiate with appropriate government agencies for the improvement of
such working conditions as are not fixed by law;18

(5) that upon the foregoing premises, it was prima facie lawful and within his statutory
authority for the respondent Secretary of Education to take the actions complained of, to wit:
issue a return-to-work order, prefer administrative charges against, and place under
preventive suspension, those who failed to comply with said order, and dismiss from the
service those who failed to answer or controvert the charges;19

The Court has not since been presented with any consideration of law or established fact that would
impair the validity of these postulates or preclude continued reliance thereon for the purpose of
resolving the present petitions on their merits.

The underlying issue here is due process; not whether the petitioners have a right to strike, which it
is clear they do not, however justifiable their reasons, nor whether or not there was in fact such a
strike, it being equally evident from the pleadings that there was, and there being no dispute about
this. What therefore, is brought before the Court is the question of whether or not any rights of the
petitioners under the due process clause of the Constitution as it applies to administrative
proceedings were violated in the initiation, conduct, or disposition of the investigations complained
of.

Indeed, what the petitioners in G.R. No. 95590 proclaim about denial of due process being their
"paramount complaint" ... "central to their prayer for interlocutory relief'20 could as well be said of the
merits of their main cause as of their plea for a restraining order pendente lite or a preliminary
injunction.

There are, however, insuperable obstacles to the Court's taking up that issue and resolving it in
these cases. Said issue is not ripe for adjudication by this Court in the exercise of its review
jurisdiction; and this, for the obvious reason that it is one of fact. The petitions and subsequent
pleadings of the petitioners allege facts and circumstances which, it is claimed, show denial of due
process, citing as supposedly "representative samples"21among others: (a) that teachers were
dismissed on the sole basis of unsworn reports of their principals and without evidence of their
alleged failure to obey the return-to-work order; (b) that the charge sheets failed to specify the
particular charges or offenses allegedly committed; (c) that some teachers were not furnished sworn
complaints, and others were suspended without any formal charges; (d) that teachers who
attempted to return within a reasonable time after notice of the return-to-work order were not
accepted back; and similar allegations.

These are however denied and disputed by the public respondents, who set forth their own version,
initially in their separate Comments in both cases and, later and in greater detail, in their
Consolidated Memorandum of December 3, 1990, supra, from which the following passages are
quoted:
(6) Petitioners in G.R. No. 95545 and G.R. No. 95590 admit engaging in a strike (referred by
semantic interplay as "concerted activity" or "mass action") directed against public
respondent Cariño beginning September 17, 1990, MPSTA Petition, pp. 3, 9; ACT Petition,
pp. 1516).

To avoid the disruption of classes, public respondent Cariño, also on September 17, 1990,
issued a 'return to work order' reminding striking workers that in law, they cannot engage in
strike and warning them that dismissal proceedings will be instituted against them if they do
not return to work with 24 hours from their walkout (MPSTA Petition, p. 4; ACT Petition, p.
15) and a memorandum to DECS officials instructing them to notify the striking teachers to
return to work within 24 hours from their walkout and to initiate dismissal proceedings against
those who defy the return to work order as well as to hire temporary replacements, MPSTA
Petition, p. 4; ACT Petition, pp. 15-16).

The striking teachers who did not heed the return-to-work order were administratively
charged and preventively suspended for ninety days for grave misconduct, gross neglect of
duty, insubordination, refusal to perform official duty, absence without leave beginning
September 17, 1990 and other violations of Civil Service Law, rules and regulations. All of
striking teachers were served with the suspension orders and the change sheets notifying
them of the charges and giving them five (5) days from receipt of the charge sheets within
which to file their respective answers.

With the filing of the administrative complaints and the receipt of the answers of some of the
teachers involved, public respondent Carino on October 8, 1990 issued a Memorandum
forming an Investigation Committee composed of Atty, Reno Capinpin of DECS
Administrative Services as Chairman Dr. Alberto Mendoza, representing the Division
Supervisors, Atty. Evangeline de Castro, representing the City Superintendent of Schools of
Manila, and Atty. Isaias Meleto representing the National PPSTA Organization, as members.
Copy of the aforesaid Memorandum is hereto attached as Annex "I."

The committee was authorized to meet everyday, even as Special Prosecutors from the
Department of justice on detail with the DECS were designated to handle the prosecution
during the formal hearings. (Ibid.)

Petitioners in GR No. 95545' and 'G.R. No. 95590' admit having received the charge sheets
and notices of preventive suspension wherein they were given five days from receipt of the
charges within which to file their answers (MPSTA Petition, p. 4-1 ACT Petition, p. 16,
Annexes x , to , AA ).

xxx xxx xxx

... Many striking teachers received their preventive suspension orders and the charge sheets
from their respective principals when they visited their schools. Many refused to receive and
sign receipt therefor; others tore up the preventive suspension orders and charge sheets in
front of their principals. Instead, they took the occasion to belittle and insult the substitute
teachers who took over their classrooms temporarily.

The striking teachers were given a period of five days to file their Answers in line with Sec. 8,
Rule III of Rules on Administrative Disciplinary Cases in CSC Memorandum Circular No. 46,
s. 1989. The motion for extension of time to file Answer was denied by DECS Task Force
because it was dilatory the alleged reason being that Atty. Fabros is handling 2,000 cases of
teachers. The DECS was constrained by Sec. 38(d) of P.D. 807 and Sec. 8 of the
Memorandum Circular mentioned which mandate that administrative cases must be decided
within 30 days from the filing of the charges. Another reason was that many refused to
receive the notice of charges. Also, to delay the resolution of the cases was to their
disadvantage.

Moreover, another reason proferred was that the Regional Trial Court (RTC) of Manila still
had to act on the petition before it. However, the Motion was filed AFTER the RTC Manila
had already dismissed the Petition.

Nevertheless, answers to the administrative complaints started pouring in at the DECS, as

prepared personally by the striking teachers or by their lawyers.

After initial assessments of the reports coming in from the principals of the schools
concerned and the answers of the striking teachers, the DECS Special Task Force prepared
on October 9, 1990 and submitted to respondent Secretary Carino the Guidelines and
Criteria as to the nature of the evidence to be assessed and the corresponding penalty to be
imposed against the striking teachers, which was approved by respondent Secretary Carino
on the same day. A copy of the aforesaid Guidelines and Criteria is hereto attached as
Annex "2." Thereafter, the DECS Special Task Force proceeded with its task of investigating
the cases against the striking teachers.

Those who refused to sign the DECS return-to-work order, the preventive suspension orders
and the charge sheets, some even tearing up the documents presented to them by their
principals were considered by the DECS Special Task Force as having waived their right to
be heard; their cases had to be resolved on the basis of the records. Nevertheless, the
DECS Special Task Force summoned the principals concerned, who then testified under
oath confirming their reports on the absences of the striking teachers. Some clarificatory
questions were asked of them on the manner of the service of the DECS orders and the
situation obtaining in their schools.

For those who answered the charge sheets, the DECS Special Task Force set the
administrative cases for hearing. Many of the striking teachers refused to appear at the
hearings but preferred to submit their case on the basis of their answers.

With regard to those who attended the hearings, each of the absent or striking teachers was
investigated and asked questions under oath on their answers and the reasons for their
absences and/or joining the teachers' strike. Some teachers reiterated their answers to the
charge sheets, either giving justifiable reasons for their absences on the days mentioned or
maintaining their stubborn stand that they have all the right to absent themselves from
classes in the exercise of their constitutional right to join mass action to demand from the
government what are supposedly due them. Still the DECS Special Task Force was not
satisfied with their written answers and explanation during the hearings. The principals of the
striking teachers were summoned and they confirmed under oath their reports of absences
and/or on teachers joining the strike.

After having conducted fully their investigations, the DECS Special Task Force submitted in
series their investigation reports and recommendation for each category of striking teachers
to respondent Secretary Carino. The investigation reports, together with their supporting
documents, submitted by the DECS Special Task Force indicated clearly the manner and
conduct of the administrative hearings, the nature and weight of the evidence adduced, and
the correspondingly penalty or exoneration recommended.
 On the bases of the investigation reports and recommendations of the DECS Special Task
Force, and after evaluating the reports and its documents attached, respondent Secretary
Carino promulgated the decisions either for exoneration, suspension or dismissal. Copies of
the DECS decisions of exoneration, suspension or dismissal were forwarded to the principals
of the striking teachers concerned. Those exonerated were allowed to resume their duties
and received their back salaries. Some of the teachers either suspended or dismissed have
already received the copies of the decisions, either personally or through mail.

xxx xxx x x x22

This copious citation is made, not to suggest that the Court finds what is stated therein to be true
and the contrary averments of the petitions to be false, but precisely to stress that the facts upon
which the question of alleged denial of due process would turn are still in issue, actively
controverted, hence not yet established.

It is not for the Court, which is not a trier of facts, as the petitioners who would now withdraw
correctly put it, to make the crucial determination of what in truth transpired concerning the disputed
incidents. Even if that were within its competence, it would be at best a monumental task. At any
rate, the petitioners cannot-as it seems they have done lump together into what amounts to a class
action hundreds of individual cases, each with its own peculiar set of facts, and expect a ruling that
would justly and correctly resolve each and everyone of those cases upon little more than general
allegations, frontally disputed as already pointed out, of incidents supposedly "representative" of
each case or group of cases.

This case illustrates the error of precipitate recourse to the Supreme Court, especially when
numerous parties desparately situated as far as the facts are concerned gather under the umbrella
of a common plea, and generalization of what should be alleged with particularity becomes
unavoidable. The petitioners' obvious remedy was NOT to halt the administrative proceedings but,
on the contrary, to take part, assert and vindicate their rights therein, see those proceedings through
to judgment and if adjudged guilty, appeal to the Civil Service Commission; or if, pending said
proceedings, immediate recourse to judicial authority was believed necessary because the
respondent Secretary or those acting under him or on his instructions were acting without or in
excess of jurisdiction, or with grave abuse of discretion, to apply, not directly to the Supreme Court,
but to the Regional Trial Court, where there would be an opportunity to prove the relevant facts
warranting corrective relief.

Parties-litigant are duty bound to observe the proper order of recourse through the judicial hierarchy;
they by-pass the rungs of the judicial ladder at the peril of their own causes.23 This Court is a court
of last resort. Its review jurisdiction is limited to resolving questions of law where there is no dispute
of the facts or the facts have already been determined by lower tribunals, except only in criminal
actions where capital penalties have been imposed.

WHEREFORE, both petitioners are DISMISSED, without prejudice to any appeals, if still timely, that
the individual petitioners may take to the Civil Service Commission on the matters complained of.
The motions to withdraw, supra, are merely NOTED, this disposition rendering any express ruling
thereon unnecessary. No pronouncement as to costs.

SO ORDERED.

EN BANC
 [G.R. No. 124540. November 14, 1997]

MERLINDA JACINTO, ADELINA AGUSTIN, SUSAN AGUSTIN, EVELYN

ATIENZA, NIDA BALANE, ANICIA CARLOS, CELEDONIA
CARLOS, LIWANAG CASTILLO, JOSEFINA DE GUZMAN,
MINERVA GARCIA, MARIA GATDULA, ALICIA GUNDA, AURORA
LOPEZ, CARMENCITA MANANSALA, ERLINDA MARTINEZ,
LOLITA NAVARRETE, GUADALUPE PANERGO, MARIA PULGA,
PAZ SERRA and VIRGINIA ZAMORA, petitioners, vs. HON.
COURT OF APPEALS; THE CIVIL SERVICE COMMISSION; and
THE SECRETARY OF EDUCATION, CULTURE AND
SPORTS, respondents.

DECISION
PANGANIBAN, J.:

While we recognize and appreciate the toil and hardship of our public
schoolteachers in fulfilling the states responsibility of educating our children,
and realize their inadequately addressed plight as compared to other
professionals, we have the equal task of promoting the larger public interest
which withholds from them and other similarly situated government workers
the right to engage in mass actions resulting in work stoppages for any
purpose. Although the Constitution vests in them the right to organize, to
assemble peaceably and to petition the government for a redress of
grievances, there is no like express provision granting them the right to
strike. Rather, the constitutional grant of the right to strike is restrained by the
proviso that its exercise shall be done in accordance with law.

The Case

Before us is a petition for review under Rule 45 of the Rules of Court

seeking to set aside the November 27, 1995 Decision of the Court of
[1]

Appeals in CA-G.R. SP No. 37596, which found no grave abuse of discretion

[2]

on the part of the Civil Service Commission (CSC) in issuing its

resolutions disposing of the separate appeals and motions for
[3]

reconsideration of herein petitioners. The dispositive portions of most of the

CSC resolutions, with the exception of the name of the appellant concerned,
uniformly read:
WHEREFORE, foregoing premises considered, the Commission hereby resolves to
find Susan Agustin guilty of Conduct Prejudicial to the Best Interest of the
Service. She is meted out the penalty of six (6) months suspension without
pay. Agustin is now automatically reinstated in the service without payment of back
salaries.
[4]

As regards Petitioner Merlinda Jacinto, the decretal portion of the

resolution pertaining to her case reads:

WHEREFORE, foregoing premises considered, the Commission hereby resolves to

find Merlinda Jacinto guilty of Violation of Reasonable Office Rules and
Regulations. She is hereby meted out the penalty of reprimand. She is automatically
reinstated in the service without payment of back salaries. [5]

In a Resolution dated March 29, 1996, Respondent Court of Appeals

[6]

denied the petitioners motion for reconsideration.

The Facts

The following are the antecedents of the case as narrated by the Court of
Appeals, which we find substantiated by the records:

Petitioners are public school teachers from various schools in Metropolitan

Manila. Between the period September 17 to 21, 1990, they incurred unauthorized
absences in connection with the mass actions then staged; and on September 17, 1990,
DECS Secretary Isidro Cario immediately issued a return-to-work order worded as
follows:

TO: ALL PUBLIC SCHOOL TEACHERS AND OTHER DECS PERSONNEL

SUBJECT: RETURN TO WORK ORDER

Under Civil service law and rules, strikes, unauthorized mass leaves and other forms
of mass actions by civil servants which disrupt public services are strictly prohibited.

Those of you who are engaged in the above-mentioned prohibited acts are therefore
ordered, in the interest of public service, to return to work within 24 hours from your
walkout otherwise dismissal proceedings shall be instituted against
you. (Underscoring supplied).
The directive was ignored by petitioners. Consequently, on separate dates, Secretary
Cario issued formal charges and preventive suspension orders against them. They
were administratively charged with gross misconduct; gross neglect of duty, etc. for
joining unauthorized mass actions; ignoring report-to-work directives; unjustified
abandonment of teaching posts; non-observance of Civil Service law, rules and
regulations; non-compliance with reasonable office rules and regulations; and
incurring unauthorized absences without leave, etc. An investigation committee was
then created by Sec. Cario to look into the matter. However, during the investigation,
petitioners did not file their answers or controvert the charges against them. As a
consequence, Sec. Cario, in his decisions found them guilty as charged and imposed
the penalty of dismissal, except with respect to petitioners Merlinda Jacinto and
Adelina Agustin who were meted only six (6) months suspension.

The decisions were appealed to the Merit Systems Protection Board (MSPB) which
dismissed the appeals for lack of merit and then to the Civil Service Commission
which set aside the Orders of the MSPB in the contested resolutions. The Civil
Service Commission, in separate resolutions, found the petitioners (except Merlinda
Jacinto) guilty of Conduct Prejudicial to the Best Interest of the Service; imposed
upon them the penalty of six (6) months suspension without pay; and automatically
reinstated them to the service without payment of back salaries x x x. In the case of
Petitioner Merlinda Jacinto, the CSC found her guilty of Violation of Reasonable
Office Rules and Regulations; imposed upon her the penalty of reprimand; and
automatically reinstated her in the service without payment of back salaries x x x.

Acting on the motions for reconsideration, the CSC rendered the assailed resolutions
denying the motions for lack of merit.[7]

Petitioners initially questioned the CSC resolutions directly before this

Court in petitions docketed as G.R. Nos. 118252 to 118271. In accordance
with Revised Administrative Circular 1-95, we referred them to the Court of
Appeals.
Respondent Court found that the petitioners absented themselves from
their classes in furtherance of or in connection with the mass action for the
purpose of pressuring the government to grant their demands. Citing the
resolution of this Court in MPSTA vs. Laguio that the mass actions staged by
[8]

the public schoolteachers from September 17 to September 19, 1990, were to

all intents and purposes a strike, it denied the petition, since the right to strike
did not extend to civil service employees. In the case of Merlinda Jacinto,
Respondent Court found no error on the part of the CSC in finding her guilty of
violation of reasonable office rules and regulations. Neither did it find the
petitioners entitled to backwages for the period of their preventive suspension,
as they were not exonerated of the charges against them.
Hence, this petition. [9]

Issues

Petitioners raise the following grounds for their appeal:

I. The Respondent Court of Appeals committed grave abuse of discretion when it

upheld the resolutions of the Civil Service Commission that penalized all the
petitioners whose only offense (except Jacinto) was to exercise their constitutional
right peaceably to assemble and petition the government for redress of grievances.

II. The Respondent Court of Appeals committed grave abuse of discretion when it
upheld the resolutions of the Civil Service Commission that penalized Petitioner
Jacinto for an alleged offense which has no basis whatsoever thereby violating her
right to security of tenure.

III. The Respondent Court of Appeals committed grave abuse of discretion when it
upheld the resolutions of the Civil Service Commission that denied petitioners their
right to backwages covering the period when they were illegally not allowed to
teach.[10]

Preliminarily, we note that the remedy resorted to by petitioners is a

petition for review under Rule 45 of the Rules of Court which, however, allows
only questions of law. Jurisprudence has extended this remedy to questions
[11]

of fact in exceptional cases. Where the issues raised involve lack of

[12]

jurisdiction or grave abuse of discretion as in this case, the Rules provide for a
different remedy -- Rule 65. In the interest of substantial justice, however, we
hereby decide to deal with this petition as one filed under Rule 45, as
denominated in its prefatory paragraph, and treat the grave abuse of
discretion on the part of Respondent Court of Appeals as allegations of
reversible errors.

The Courts Ruling

The petition, which fails to convince us, merits only dismissal.

First Issue: Improper Exercise of the Right to Peaceful Assembly and to
Petition for a Redress of Grievances

There is no question as to the petitioners rights to peaceful assembly to

petition the government for a redress of grievances and, for that matter, to
organize or form associations for purposes not contrary to law, as well as to
engage in peaceful concerted activities. These rights are guaranteed by no
less than the Constitution, particularly Sections 4 and 8 of the Bill of Rights,
[13] [14]

Section 2(5) of Article IX, and Section 3 of Article XIII. Jurisprudence

[15] [16]

abounds with hallowed pronouncements defending and promoting the peoples

exercise of these rights.As early as the onset of this century, this Court,
in U.S. vs. Apurado, already upheld the right to assembly and petition and
[17]

even went as far as to acknowledge:

It is rather to be expected that more or less disorder will mark the public assembly of
the people to protest against grievances whether real or imaginary, because on such
occasions feeling is always wrought to a high pitch of excitement, and the greater the
grievance and the more intense the feeling, the less perfect, as a rule, will be the
disciplinary control of the leaders over their irresponsible followers. But if the
prosecution be permitted to seize upon every instance of such disorderly conduct by
individual members of a crowd as an excuse to characterize the assembly as a
seditious and tumultuous rising against the authorities, then the right to assemble and
to petition for redress of grievances would become a delusion and a snare and the
attempt to exercise it on the most righteous occasion and in the most peaceable
manner would expose all those who took part therein to the severest and most
unmerited punishment, if the purposes which they sought to attain did not happen to
be pleasing to the prosecuting authorities. If instances of disorderly conduct occur on
such occasions, the guilty individuals should be sought out and punished therefor, but
the utmost discretion must be exercised in drawing the line
between disorderlyand seditious conduct and between an essentially peaceable
assembly and a tumultuous uprising. [18]

Primicias vs. Fugoso further sustained the supremacy of the freedoms of

[19]

speech and of assembly over comfort and convenience in the use of streets or
parks. Although the Court opined that the exercise of the rights of free speech
and of peaceful assembly to petition the government for redress of grievances
is not absolute for it may be so regulated that it shall not be injurious to the
equal enjoyment of others having equal rights, nor injurious to the rights of the
community or society, regulation was limited to the mayors reasonable
discretion in issuing a permit to determine or specify only the streets or public
places to be used for the purpose and to provide adequate and proper
policing to minimize the risk of disorder. Quoting Justice Brandeis in his
concurring opinion in Whitney vs. California, the Court said: [20]

Fear of serious injury cannot alone justify suppression of free speech and assembly. x
x x To justify suppression of free speech there must be reasonable ground to fear that
serious evil will result if free speech is practiced. There must be reasonable ground to
believe that the danger apprehended is imminent. There must be reasonable ground to
believe that the evil to be prevented is a serious one x x x.

xxxxxxxxx

x x x The fact that speech is likely to result in some violence or in destruction of

property is not enough to justify its suppression. There must be the probability of
serious injury to the state. x x x

This limitation was strictly applied in Reyes vs. Bagatsing, in which the
[21]

Court [was] called upon to protect the exercise of the cognate rights to free
speech and peaceful assembly, arising from the denial of a permit. In that
case, retired Justice J.B.L. Reyes, on behalf of the Anti-Bases Coalition,
sought a permit from the mayor of Manila to hold a march and a rally starting
from Luneta, proceeding through Roxas Boulevard to the gates of the U.S.
Embassy, to be attended by local and foreign participants to the International
Conference for General Disarmament, World Peace and the Removal of All
Foreign Military Bases. The Manila mayor denied them the permit due to
police intelligence reports which strongly militate against the advisability of
issuing such permit at this time and at the place applied for. In reversing the
mayor, this Court stated that to justify limitations on freedom of assembly,
there must be proof of sufficient weight to satisfy the clear and present
danger test. Thereafter, the Court proceeded to summarize the rules on
[22]

assembly and petition, making the clear-and-present danger rule the

[23]

standard for refusing or modifying the grant of a permit. But it stressed that the
presumption must be to incline the weight of the scales of justice on the side
of such rights [of free speech and peaceable assembly], enjoying as they do
precedence and primacy.
Philippine Blooming Mills Employees Organization vs. Philippine Blooming
Mills Co., Inc., which was promulgated after the proclamation of martial law,
[24]

further underscored the supremacy of these basic constitutional rights, this

time over property rights. Speaking through Mr. Justice Makasiar, the Court
explained:
x x x the primacy of human rights -- freedom of expression, of peaceful assembly and
of petition for redress of grievances -- over property rights has been
sustained. Emphatic reiteration of this basic tenet as a coveted boon -- at once the
shield and armor of the dignity and worth of the human personality, the all-consuming
ideal of our enlightened civilization -- becomes [o]ur duty, if freedom and social
justice have any meaning at all for him who toils so that capital can produce economic
goods that can generate happiness for all. To regard the demonstration against police
officers, not against the employer, as evidence of bad faith in collective bargaining
and hence a violation of the collective bargaining agreement and a cause for the
dismissal from employment of the demonstrating employees, stretches unduly the
compass of the collective bargaining agreement, is a potent means of inhibiting
speech and therefore inflicts a moral as well as mortal wound on the constitutional
guarantees of free expression, of peaceful assembly and of petition. [25]

Specifically, the right of civil servants to organize themselves was

positively recognized in Association of Court of Appeals Employees (ACAE)
vs. Ferrer-Calleja. But, as in the exercise of the rights of free expression and
[26]

of assembly, there are standards for allowable limitations such as the

legitimacy of the purposes of the association, the overriding considerations
[27]

of national security and the preservation of democratic institutions. [28]

As regards the right to strike, the Constitution itself qualifies its exercise
with the proviso in accordance with law. This is a clear manifestation that the
state may, by law, regulate the use of this right, or even deny certain sectors
such right. Executive Order 180 which provides guidelines for the exercise of
[29]

the right of government workers to organize, for instance, implicitly endorsed

an earlier CSC circular which enjoins under pain of administrative sanctions,
all government officers and employees from staging strikes, demonstrations,
mass leaves, walkouts and other forms of mass action which will result in
temporary stoppage or disruption of public service, by stating that the Civil
[30]

Service law and rules governing concerted activities and strikes in the
government service shall be observed. [31]

It is also settled in jurisprudence that, in general, workers in the public

sector do not enjoy the right to strike. Alliance of Government Workers vs.
Minister of Labor and Employment rationalized the proscription thus:
[32]

The general rule in the past and up to the present is that the terms and conditions of
employment in the Government, including any political subdivision or instrumentality
thereof are governed by law. x x x.Since the terms and conditions of government
employment are fixed by law, government workers cannot use the same weapons
employed by the workers in the private sector to secure concessions from their
employers. The principle behind labor unionism in private industry is that industrial
peace cannot be secured through compulsion by law. Relations between private
employers and their employees rest on an essentially voluntary basis. Subject to the
minimum requirements of wage laws and other labor and welfare legislation, the
terms and conditions of employment in the unionized private sector are settled
through the process of collective bargaining. In government employment, however, it
is the legislature and, where properly given delegated power, the administrative heads
of government which fix the terms and conditions of employment. And this is effected
through statutes or administrative circulars, rules, and regulations, not through
collective bargaining agreements. [33]

After delving into the intent of the framers of the Constitution, the Court
affirmed the above rule in Social Security System Employees Association
(SSSEA) vs. Court of Appeals and explained:
[34]

Government employees may, therefore, through their unions or associations, either

petition the Congress for the betterment of the terms and conditions of employment
which are within the ambit of legislation or negotiate with the appropriate government
agencies for the improvement of those which are not fixed by law. If there be any
unresolved grievances, the dispute may be referred to the Public Sector Labor-
Management Council for appropriate action. But employees in the civil service may
not resort to strikes, walkouts and other temporary work stoppages, like workers in the
private sector, to pressure the Government to accede to their demands. As now
provided under Sec. 4, Rule III of the Rules and Regulations to Govern the Exercise
of the Right of Government Employees to Self-Organization, which took effect after
the instant dispute arose, [t]he terms and conditions of employment in the
government, including any political subdivision or instrumentality thereof and
government-owned and controlled corporations with original charters are governed by
law and employees therein shall not strike for the purpose of securing changes
[thereto]. [35]

We now come to the case before us. Petitioners, who are public
schoolteachers and thus government employees, do not seek to establish that
they have a right to strike. Rather, they tenaciously insist that their absences
during certain dates in September 1990 were a valid exercise of their
constitutional right to engage in peaceful assembly to petition the government
for a redress of grievances. They claim that their gathering was not a strike;
therefore, their participation therein did not constitute any offense. MPSTA vs.
Laguio and ACT vs. Cario, in which this Court declared that these mass
[36] [37]

actions were to all intents and purposes a strike; they constituted a concerted
and unauthorized stoppage of, or absence from, work which it was the
teachers duty to perform, undertaken for essentially economic reasons,
should not principally resolve the present case, as the underlying facts are
allegedly not identical.
Strike, as defined by law, means any temporary stoppage of work by the
concerted action of employees as a result of an industrial or labor dispute. A [38]

labor dispute includes any controversy or matter concerning terms and

conditions of employment; or the association or representation of persons in
negotiating, fixing, maintaining, changing or arranging the terms and
conditions of employment, regardless of whether the disputants stand in the
proximate relation of employers and employees. With these premises, we
[39]

now evaluate the circumstances of the instant petition.

It cannot be denied that the mass action or assembly staged by the
petitioners resulted in the non-holding of classes in several public schools
during the corresponding period.Petitioners do not dispute that the grievances
for which they sought redress concerned the alleged failure of public
authorities -- essentially, their employers -- to fully and justly implement
certain laws and measures intended to benefit them materially, such as:
1. Immediate release of P680 million Secondary Education Fund (SEF) fringe benefits
of teachers under Section 17 of Republic Act 6758.
2. Clothing allowance at P500 to P1,000 per teachers [sic] under the General
Appropriations Act of 1990
3. DMB Circular 904
4. Increase in minimum wage to P5,000 for teachers.[40]
And probably to clothe their action with permissible character, they also [41]

raised national issues such as the removal of the U.S. bases and the
repudiation of foreign debt. In Balingasan vs. Court of Appeals, however, this
[42]

Court said that the fact that the conventional term strike was not used by the
participants to describe their common course of action was insignificant, since
the substance of the situation, and not its appearance, was deemed
controlling.[43]

Moreover, the petitioners here, except Merlinda Jacinto, were not

penalized for the exercise of their right to assemble peacefully and to petition
the government for a redress of grievances. Rather, the Civil Service
Commission found them guilty of conduct prejudicial to the best interest of the
service for having absented themselves without proper authority, from their
schools during regular school days, in order to participate in the mass protest,
their absence ineluctably resulting in the non-holding of classes and in the
deprivation of students of education, for which they were responsible. Had
petitioners availed themselves of their free time -- recess, after classes,
weekends or holidays -- to dramatize their grievances and to dialogue with the
proper authorities within the bounds of law, no one -- not the DECS, the CSC
or even this Court -- could have held them liable for the valid exercise of their
constitutionally guaranteed rights. As it was, the temporary stoppage of
classes resulting from their activity necessarily disrupted public services, the
very evil sought to be forestalled by the prohibition against strikes by
government workers. Their act by its nature was enjoined by the Civil Service
law, rules and regulations, for which they must, therefore, be made
answerable.

Second Issue: Violation by Petitioner Jacinto of Reasonable Office Rules

and Regulations

Petitioner Jacinto, for her part, pleads for exoneration. She asks the Court
to reexamine and give due weight to the certification issued by her school
[44]

principal that she met her class on September 20, 1990 but failed to sign in
the attendance logbook. Stated elsewise, Jacinto wants us to scrutinize
firsthand a document already ruled upon by the Civil Service Commission and
the Court of Appeals to be of doubtful credibility. Time and again, we have
held that findings of administrative agencies, which have acquired expertise
because their jurisdiction is confined to specific matters, are accorded not only
respect but even finality particularly when affirmed by the appellate
[45]

tribunal. It is not a function of this Court to examine and evaluate the probative
value of the evidence proffered in the concerned forum, which formed the
basis of the latters impugned decision, resolution or order, absent a clear
[46]

showing of arbitrariness and want of any rational basis therefor. In the [47]

instant case, we find no sufficient reason to reverse the findings of the CSC.
In any event, as observed by the Commission, said certification, dated
December 19, 1990, was belatedly submitted by Petitioner Jacinto only with
her motion for reconsideration of the CSC resolution promulgated September
21, 1993; thus it was correctly rejected as a newly discovered
evidence. Additionally, the Commission explained:

x x x such certification contradicts the allegation that she filed an application for
leave. If she was really present on September 20, 1990, there would have been no
need for her to file an application for leave.Apparently, this is a vain effort to present
documents of doubtful credibility just to have Jacinto exonerated of the charges
against her.[48]

The futility of the tactics of Petitioner Jacinto to evade culpability is further

exemplified by her contradictory assertions. In a sworn explanation submitted
to Secretary Cario, she claimed that she left the school premises on the day in
question, because she was emotionally and mentally depressed, and went to
see a physician. In her motion for reconsideration before the CSC, she
[49]

submitted the above certification to the effect that she was not absent. Now, in
assailing the Commissions decision to reprimand her for violation of
reasonable office rules and regulations in not filing an application for leave of
absence, she invokes Sec. 15, Rule XVI of the Civil Service rules, which
provides:

Sec. 15. Applications for vacation leave of absence for one full day or more shall be
submitted on the prescribed form for action by the proper chief of agency in advance,
whenever possible, of the effective date of such leave.

She contends that the filing of an application for vacation leave need not
always be in advance of the effective date thereof. Clearly, her present
[50]

stance is diametric to her illness justification before the DECS. In the latter
case, it is Section 16 of said rules that is pertinent:

Sec. 16. All applications for sick leaves of absence for one full day or more shall be
on the prescribed form and shall be filed immediately upon the employees return from
such leave. Notice of absence, however, should be sent to the immediate supervisor
and/or to the office head. x x x

The regulation requires (1) the filing of the application for sick leave on the
prescribed form immediately upon the employees return from such leave and
(2) a notice of absence to be sent to the immediate supervisor and/or office
head. But the Commission found that the records are bereft of any showing
that Jacinto asked permission from school authorities to go out of school
premises and seek medical attention outside nor did she file an application for
sick leave x x x. Hence, its conclusion that petitioner violated reasonable
[51]

office rules and regulations.

The totality of the evidence on record sustains the findings and
conclusions of the Commission, as affirmed by the Court of Appeals. We have
no reason to reverse them. The Civil Service rules clearly provide that
violation of reasonable office rules and regulations, on first offense, carries the
penalty of reprimand. [52]

Third Issue: No Right to Backwages

 Petitioners anchor their claim for backwages on the supposed illegality of
(1) their preventive suspension upon the filing of the charges against them
and (2) the immediate execution of the DECS Secretarys decisions ordering
their dismissal.
The charges against petitioners consisted of the following: (1) grave
misconduct; (2) gross neglect of duty; (3) gross violation of Civil Service law,
rules and regulations and reasonable office regulations; (4) refusal to perform
official duty; (5) gross insubordination; (6) conduct prejudicial to the best
interest of the service; and (7) absence without approved leave. These were
based on their alleged unauthorized participation in the mass actions in
September 1990, disregard of report-to-work directives, unjustified
abandonment of teaching posts, unauthorized absences without leave, and
other similar violations reported to the DECS Secretary by their respective
school supervisors. [53]

We find that the charges filed against petitioners warranted their

preventive suspension from the service, as provided under Section 51,
Chapter 7 (on Discipline) of the Administrative Code, which reads:

Sec. 51. Preventive Suspension. -- The proper disciplining authority may preventively
suspend any subordinate officer or employee under his authority pending an
investigation, if the charge against such officer or employee involves dishonesty,
oppression or grave misconduct, or neglect in the performance of duty, or if there are
reasons to believe that the respondent is guilty of charges which would warrant his
removal from the service.

The petitioners alleged lapses, initially found substantiated by the DECS,

qualify as grave misconduct or neglect in the performance of duty under the
above rule. Thus, former Education Secretary Cario had the legal authority to
suspend them pending further investigation.
The Secretarys immediate execution of his decisions imposing the penalty
of dismissal finds legal basis in Sec. 47 (2) of the Civil Service law which [54]

provides:

Sec. 47. Disciplinary Jurisdiction. -- x x x.

(2) The Secretaries and heads of agencies and instrumentalities, provinces, cities and
municipalities shall have jurisdiction to investigate and decide matters involving
disciplinary action against officers and employees under their jurisdiction. Their
decisions shall be final in case the penalty imposed is suspension for not more than
thirty days or fine in an amount not exceeding thirty days salary. In case the decision
rendered by a bureau or office head is appealable to the Commission, the same may be
initially appealed to the department and finally to the Commission and pending
appeal, the same shall be executory except when the penalty is removal, in which case
the same shall be executory only after confirmation by the Secretary concerned.

As can be gleaned from the above, the department secretarys decision

confirming the removal of an officer or employee under his jurisdiction is
executory in character, i.e. such decision may be immediately executed even
pending further remedy, such as an appeal, by the dismissed officer or
[55]

employee. In the case at bar, it was already the final judgments of Secretary
Cario which were forthwith carried out. The aforequoted statutory provision
rules out the alleged illegality of the actions of the DECS Secretary.
In any event, the rule is settled that backwages may be granted only to
those who have been illegally dismissed and thenceforth ordered reinstated,
or to those acquitted of the charge against them. Even a pardoned convicted
[56]

employee is not automatically entitled to backpay. Monsanto vs. Factoran

Jr. established the general rule that -- while pardon has been commonly
[57]

regarded as eliminating the existence of guilt so that in the eyes of the law the
offender is as innocent as though he never committed the offense -- such
exoneration does not operate for all purposes. It does not erase the fact of the
commission of the offense and the conviction therefor. It frees the convict from
all penalties and legal disabilities and restores to him all his civil rights; but
unless expressly grounded on the persons innocence, it does not ipso
facto restore him to public office necessarily relinquished or forfeited by
reason of the conviction.Pardon does not generally result in automatic
reinstatement because the offender has to apply for reappointment; neither is
he entitled to backpay. [58]

Thus, in Sabello vs. DECS, although we reinstated the petitioner-

[59]

pardonee to his previous position in the interest of justice and equity, we did
not grant him backwages since he was lawfully separated from the
government service upon his conviction for an offense. We reiterated that the
right to backwages was afforded only to those who were illegally dismissed
but thereafter ordered reinstated, or to those otherwise acquitted of the charge
against them.
Again, in City Mayor of Zamboanga vs. Court of Appeals, we said that
[60]

back salaries may be ordered paid to an officer or employee only if he is

exonerated of the charge against him and his suspension or dismissal is
found and declared to be illegal. Hence, in Garcia vs. Chairman, Commission
on Audit, we said that if the pardon is based on the innocence of the
[61]

individual, it affirms this innocence and makes him a new man and as
innocent as if he had not been found guilty of the offense charged. In that
[62]

case, Garcia was found administratively liable for dishonesty. He was,

however, acquitted by the trial court of the complaint for qualified theft based
on the very same acts. The acquittal was founded not on lack of proof beyond
reasonable doubt but on the fact that he did not commit the offense imputed to
him. This Court said that after having been declared innocent of the criminal
complaint, which had the same basis as the administrative charge, for all legal
purposes the petitioner should not be considered to have left his office, so that
he was entitled to all the rights and privileges that accrued to him by virtue of
the office held, including backwages. He was restored to his office ipso
facto upon the issuance of the clemency. The grant of backwages was
justified to afford relief to [the] petitioner who [was] innocent from the start and
to make reparation for what he [had] suffered as a result of his unjust
dismissal from the service. [63]

However, in Balingasan, finding that petitioners therein indeed participated

in the unlawful mass actions for which they were similarly meted suspension,
the Court opined that they were not completely exonerated of the charges
against them. They were denied back salaries because they had given ground
for their suspension. This means that being found liable for a lesser offense is
not equivalent to exoneration from the original complaint against the
concerned public officer or employee. Balingasan referred to the earlier case
of Yacia vs. City of Baguio, in which this Court denied the claim of an
[64]

employee for backwages for the period during which he was not allowed to
work because of the execution of the CSC decision dismissing him for
dishonesty, even though, on appeal, his penalty was reduced to a fine
equivalent to six months pay.
Based on the above premises, petitioners demand for backwages cannot
be granted, for they had given cause for their suspension -- their unjustified
abandonment of classes to the prejudice of their students. Although they were
eventually found guilty only of conduct prejudicial to the best interest of the
service, and not grave misconduct or other offense warranting their dismissal
from the service, they were not fully innocent of the charges against them.
We find the case of Petitioner Jacinto different, however. The Civil Service
Commission found her culpable only of violation of reasonable office rules and
regulations, for not having asked permission from school authorities to leave
the school premises and seek medical attention and for not filing an
application for sick leave for approval by the school authorities. There was no
proof that she joined the mass actions which caused prejudice to the school
system. In Balingasan, this Court, after finding that Rodolfo Mariano was not
involved in the mass actions but was absent because he attended the wake
and burial of his grandmother in Ilocos Sur without however the benefit of an
approved leave of absence, held that [t]o deny petitioner Mariano his back
wages during his suspension would be tantamount to punishing him after his
exoneration from the charges which caused his dismissal from the
service, i.e. participation in the unlawful mass actions. Therefore, in line
with Balingasan, we likewise grant back salaries to Petitioner Jacinto who did
not join the illegal activity.
WHEREFORE, in view of the foregoing, the petition is
hereby DENIED and the assailed Decision of the Court of Appeals is
hereby AFFIRMED with the modification that Petitioner Merlinda Jacinto is
granted backwages, without deduction or qualification, from the time she was
suspended until her actual reinstatement, the total of which, consistent with
prevailing jurisprudence, should not exceed five years.
[65]

SO ORDERED.