G.R. No.

164032 January 19, 2009

LOLITA A. LOPEZ, et. al. petitioner,
vs.
QUEZON CITY SPORTS CLUB, INC., respondents.

FACTS: The Kasapiang Manggagawa sa Quezon City Sports Club (union) averred that it was
ordered to submit a new information sheet. It immediately wrote a letter addressed to the
general manager to inquire about the information sheet, only to be insulted by the latter. The
members of the union were not paid their salaries on 30 June 1997. On 4 July 1997, the union
wrote a letter to the management for the release of the members’ salaries and grant of wage
increases mandated by the CBA. When its letter went unanswered, the union filed a notice of
strike and fter conducting a strike vote, it staged a strike on 12 August 1997. On 16 August
1997, the QCSC placed some of its employees under temporary lay-off status due to
redundancy. The Kasapiang Manggagawa sa Quezon City Sports Club (union) filed a complaint
for unfair labor practice against QCSC on 12 November 1997. Labor Arbiter Joel S. Lustria
promulgated a decision finding QCSC guilty of unfair labor practice and ordering it to pay the
affected employees their separation pay, backwages, and salary increase, totaling
P27,504,864.46. QCSC filed an appeal and a motion for reduction of the appeal bond to
P4,000,000.00. NLRC ordered the posting of an additional P6,000,000.00 bond and rendered a
decision granting the appeal and reversing the Lustria decision. Petitioners appealed to the
Court of Appeal but it was also denied.

ISSUE: (1) Whether or not the simultaneous filing of the motion to reduce the appeal bond and
posting of the reduced amount of bond within the reglementary period for appeal constitute
substantial compliance with Article 223 of the Labor Code? (2) Whether or not the decision of
the NLRC is valid?

HELD: On the first issue, the Court ruled that the posting of the amount of P4,000,000.00
simultaneously with the filing of the motion to reduce the bond to that amount, as well as the
filing of the memorandum of appeal, all within the reglementary period, altogether constitute
substantial compliance with the Rules. it is provided on Article 223 of the Labor Code and
Sections 4(a) and 6 of Rule VI of the New Rules of Procedure of the NLRC, as amended, that
appeals involving monetary awards are perfected only upon compliance with the following
mandatory requisites, namely: (1) payment of the appeal fees; (2) filing of the memorandum of
appeal; and (3) payment of the required cash or surety bond; and that no motion to reduce shall
be entertained except on meritorious grounds and upon the posting of a bond in a reasonable
amount in relation to the monetary award. Furthermore, based on existing jurisprudence, the
bond requirement on appeals involving monetary awards had been and could be relaxed in
meritorious cases such as: (1) there was substantial compliance with the Rules; (2) the
surrounding facts and circumstances constitute meritorious grounds to reduce the bond; (3) a
liberal interpretation of the requirement of an appeal bond would serve the desired objective of
resolving controversies on the merits; or (4) the appellants, at the very least, exhibited their
willingness and/or good faith by posting a partial bond during the reglementary period.

On the second issue, the Court ruled that the NLRC erred in setting aside the Lustria’s decision,
as well as in deleting the award of backwages and separation pay, despite the finding that the
affected employees had been constructively dismissed. In the notice of strike, the union did not
state in particular the acts which allegedly constitute unfair labor practice. By virtue of the "no-
strike no lockout" provision in the CBA, the union was prohibited from staging an economic
strike. However, while the strike by the union was held illegal, only the union officers were
declared as having lost their employment status. In effect, the other union members who had
merely participated in the strike but had not committed any illegal acts were not dismissed from
employment. The grant of backwages and separation pay, in Lustria’s decision, not premised on
the declaration of the illegality of the strike but on the finding that these affected employees
were constructively dismissed from work, as evidenced by the layoffs effected by the company.
Therefore, the Lustria decision should be upheld and therefore reinstated except as regards the
four petitioners who were declared having lost their employment status.

G.R. No. 164856 January 20, 2009

JUANITO A. GARCIA and ALBERTO J. DUMAGO, Petitioners,
vs.
PHILIPPINE AIRLINES, INC., Respondent.

FACTS: An administrative charge was filed by PAL against its employees-herein petitioners
after they were allegedly caught in the act of sniffing shabu when a team of company security
personnel and law enforcers raided the PAL Technical Center’s Toolroom Section. After due
notice, PAL dismissed petitioners for transgressing the PAL Code of Discipline, prompting them
to file a complaint for illegal dismissal and damages which was resolved by the Labor Arbiter in
their favor, thus ordering PAL to immediately comply with the reinstatement aspect of the
decision. Prior to the promulgation of the Labor Arbiter’s decision, the SEC placed PAL which
was suffering from severe financial losses. From the Labor Arbiter’s decision, PAL appealed to
the NLRC which reversed said decision of the Labor Arbiter and dismissed petitioners’
complaint for lack of merit. Petitioners’ Motion for Reconsideration was denied and Entry of
Judgment was issued. Subsequently, the Labor Arbiter issued a Writ of Execution respecting
the reinstatement aspect of his decision, and he issued a Notice of Garnishment. PAL
thereupon moved to quash the Writ and to lift the Notice while petitioners moved to release the
garnished amount. In a related move, PAL filed an Urgent Petition for Injunction with the NLRC
which affirmed the validity of the Writ and the Notice issued by the Labor Arbiter but suspended
and referred the action to the Rehabilitation Receiver for appropriate action. PAL elevated the
matter to the appellate court which reversed the NLRC’s decision. Hence, this petition.

ISSUES: (1) whether or not a subsequent finding of a valid dismissal removes the basis for
implementing the reinstatement aspect of a labor arbiter’s decision? and (2) whether or not the
impossibility to comply with the reinstatement order due to corporate rehabilitation provides a
reasonable justification for the failure to exercise the options under Article 223 of the Labor
Code?

HELD: Since petitioners’ claim against PAL is a money claim for their wages during the
pendency of PAL’s appeal to the NLRC, this should have been suspended pending the
rehabilitation proceedings. It was then suspended while ongoing rehabilitation. In view of the
termination of the rehabilitation proceedings, the Court now proceeds to resolve the remaining
issue for consideration.

As to the first issue, the court held that a subsequent finding of a valid dismissal removes the
basis for implementing the reinstatement aspect of a labor arbiter’s decision.
Based on jurisprudential trend applying par 3 of Article 223 of the Labor Code which provides
that “In any event, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, insofar as the reinstatement aspect is concerned, shall immediately be executory,
pending appeal. The employee shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely
reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for
reinstatement provided herein.” The view as maintained in a number of cases is that “Even if the
order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of
the employer to reinstate and pay the wages of the dismissed employee during the period of
appeal until reversal by the higher court.” On the other hand, if the employee has been
reinstated during the appeal period and such reinstatement order is reversed with finality, the
employee is not required to reimburse whatever salary he received for he is entitled to such,
more so if he actually rendered services during the period. The provision of Article 223 is clear
that an award for reinstatement shall be immediately executory even pending appeal and the
posting of a bond by the employer shall not stay the execution for reinstatement. The legislative
intent is quite obvious, i.e., to make an award of reinstatement immediately enforceable, even
pending appeal. To require the application for and issuance of a writ of execution as
prerequisites for the execution of a reinstatement award would certainly betray and run counter
to the very object and intent of Article 223. The reason is simple.

As to the second issue, the Court held that the peculiar predicament of a corporate rehabilitation
rendered it impossible for respondent to exercise its option under the circumstances. The spirit
of the rule on reinstatement pending appeal animates the proceedings once the Labor Arbiter
issues the decision containing an order of reinstatement. Reinstatement pending appeal
necessitates its immediate execution during the pendency of the appeal, if the law is to serve its
noble purpose. At the same time, any attempt on the part of the employer to evade or delay its
execution, should not be countenanced. After the labor arbiter’s decision is reversed by a higher
tribunal, the employee may be barred from collecting the accrued wages, if it is shown that the
delay in enforcing the reinstatement pending appeal was without fault on the part of the
employer. The new NLRC Rules of Procedure, now require the employer to submit a report of
compliance within 10 calendar days from receipt of the Labor Arbiter’s decision, disobedience to
which clearly denotes a refusal to reinstate. It is apparent that there was inaction on the part of
respondent to reinstate them, but whether such omission was justified depends on the onset of
the exigency of corporate rehabilitation. It is settled that upon appointment by the SEC of a
rehabilitation receiver, all actions for claims before any court, tribunal or board against the
corporation shall ipso jure be suspended. Case law recognizes that unless there is a restraining
order, the implementation of the order of reinstatement is ministerial and mandatory. This
injunction or suspension of claims by legislative fiat partakes of the nature of a restraining order
that constitutes a legal justification for respondent’s non-compliance with the reinstatement
order. Respondent’s failure to exercise the alternative options of actual reinstatement and
payroll reinstatement was thus justified. Such being the case, respondent’s obligation to pay the
salaries pending appeal, as the normal effect of the non-exercise of the options, did not attach.

G.R. No. 178647 February 13, 2009

GENERAL SANTOS COCA-COLA PLANT FREE WORKERS UNION-TUPAS, Petitioner,
vs.
COCA-COLA BOTTLERS PHILS., INC. (GENERAL SANTOS CITY), THE COURT OF
APPEALS and THE NATIONAL LABOR RELATIONS COMMISSION, Respondents.

FACTS: Sometime in the late 1990s, CCBPI experienced a significant decline in profitability due
to the Asian economic crisis, decrease in sales, and tougher competition. To curb the negative
effects on the company, it implemented three (3) waves of an Early Retirement Program and
also there was an inter-office memorandum mandating to put on hold all requests for hiring to fill
in vacancies in both regular and temporary positions in Head Office and in the Plants. This
prompted petitioner to negotiate with the Labor Management Committee for filling up the
vacancies with permanent employees. No resolution was reached on the matter. Faced with the
"freeze hiring" directive, CCBPI Gen San engaged the services of JLBP Services Corporation, a
company in the business of providing labor and manpower services, including janitorial services,
messengers, and office workers to various private and government offices.
Petitioner then filed with the National Conciliation and Mediation Board a Notice of Strike on the
ground of alleged unfair labor practice committed by CCBPI Gen San for contracting-out
services regularly performed by union members. The Secretary of Labor issued an Order
enjoining the threatened strike and certifying the dispute to the NLRC for compulsory arbitration.
The NLRC ruled that CCBPI was not guilty of unfair labor practice for contracting out jobs to
JLBP. Petitioner filed a motion for reconsideration which the NLRC denied. The CA also denied
the petition for certiorari as well as the motion for reconsideration. Hence, this petition.

ISSUE: Whether or not the act of contracting-out services from JLBP constitutes unfair labor
practices?

HELD: Under Rule 45 of the Revised Rules on Civil Procedure, only questions of law may be
raised in a Petition for Review on Certiorari. There is a question of law if the issue raised is
capable of being resolved without need of reviewing the probative value of the evidence. An
examination of the issues raised by petitioner reveals that they are questions of fact. The issues
raised, i.e., whether JLBP is an independent contractor, whether CCBPI’s contracting-out of
jobs to JLBP amounted to unfair labor practice, and whether such action was a valid exercise of
management prerogative, call for a re-examination of evidence, which is not within the ambit of
SC’s jurisdiction. Moreover, factual findings of the NLRC, an administrative agency deemed to
have acquired expertise in matters within its jurisdiction, are generally accorded not only respect
but finality especially when such factual findings are affirmed by the CA.

Furthermore, the court found no reversible error in the assailed Decision. It is true that the
NLRC erroneously concluded that the contracting- out of jobs in CCBPI Gen San was due to the
“Going-to-Market” system, which actually affected CCBPI’s sales and marketing departments,
and had nothing to do with petitioner’s complaint. However, this does not diminish the NLRC’s
finding that JLBP was a legitimate, independent contractor and that CCBPI Gen San engaged
the services of JLBP to meet business exigencies created by the freeze-hiring directive of the
CCBPI Head Office.
The lower court found, based on the evidence, that CCBPI did not engage in labor-only
contracting and that the company’s action to contract-out the services and functions performed
by Union members was not directed at the members’ right to self-organization; therefore, it was
not guilty of unfair labor practice.
Article 248 of the Labor Code provides that unfair labor practice refers to acts that violate the
workers’ right to organize. The prohibited acts are related to the workers’ right to self-
organization and to the observance of a CBA. Without that element, the acts, even if unfair, are
not unfair labor practices.

G.R. No. 167141 March 13, 2009

SAMAHAN NG MGA MANGGAGAWA SA SAMMA-LAKAS SA INDUSTRIYA NG
KAPATIRANG HALIGI NG ALYANSA (SAMMA-LIKHA), Petitioner,
vs.
SAMMA CORPORATION, Respondent.

FACTS: Petitioner SAMMA-LIKHA filed a petition for certification election in the DOLE.
Respondent moved for the dismissal of the petition. Med-arbiter Arturo V. Cosuco ordered the
dismissal of the petition. Petitioner moved for reconsideration.
Meanwhile, respondent filed a petition for cancellation of petitioner’s union registration in the
DOLE. Crispin D. Dannug, Jr., Officer-in-Charge/Regional Director of DOLE, issued a resolution
revoking the charter certificate of petitioner as local chapter of LIKHA Federation.

Going back to the case, Acting Secretary Manuel G. Imson, treating the motion for
reconsideration as an appeal, rendered a decision reversing the order of the med-arbiter. Thus,
he directed the holding of a certification election among the rank-and-file employees of
respondent. Respondent then filed its comment on the motion for reconsideration of petitioner,
asserting that the order of the med-arbiter could only be reviewed by way of appeal and not by a
motion for reconsideration. Respondent filed its motion for reconsideration which was denied.
Respondent filed a petition for certiorari in the CA which was reversed by the latter as well as
the motion for reconsideration. Hence, this petition.

ISSUES: (1) whether or not a certificate for non-forum shopping is required in a petition for
certification election?; (2) whether or not petitioner’s motion for reconsideration which was
treated as an appeal should not have been given due course for failure to attach proof of service
on respondent?; and (3) whether or not petitioner had the legal personality to file the petition for
certification election?

HELD: On the first issue, the requirement for a certificate of non-forum shopping refers to
complaints, counter-claims, cross-claims, petitions or applications where contending parties
litigate their respective positions regarding the claim for relief of the complainant, claimant,
petitioner or applicant. A certification proceeding, even though initiated by a "petition," is not a
litigation but an investigation of a non-adversarial and fact-finding character. Therefore, there is
no requirement for a certificate of non-forum shopping in a petition for certification election.

On the second issue, according to the implementing rules as amended by D.O. No. 9, “the
appeal shall be under oath and shall consist of a memorandum of appeal specifically stating the
grounds relied upon by the appellant with the supporting arguments and evidence. The appeal
shall be deemed not filed unless accompanied by proof of service thereof to appellee.” The
motion for reconsideration was properly treated as an appeal because it substantially complied
with the formal requisites of the latter. The lack of proof of service was not fatal as respondent
had actually received a copy of the motion.

On the third issue, LIKHA was granted legal personality as a federation under certificate of
registration no. 92-1015-032-11638-FED-LC. Subsequently, petitioner as its local chapter was
issued its charter certificate no. 2-01. With certificates of registration issued in their favor, they
are clothed with legal personality as legitimate labor organizations. Such legal personality
cannot thereafter be subject to collateral attack, but may be questioned only in an independent
petition for cancellation of certificate of registration. Even though the petitioner’s charter
certificate was initially revoked by the DOLE, the Petitioner still moved for the reconsideration
and the resolution does not attained finality yet. Thus, Petitioner still has its legal personality.

It was ruled that the employer, as a mere bystander, has no legal standing in a certification
election as it cannot oppose the petition or appeal the Med-Arbiter's orders related thereto.

G.R. Nos. 171618-19 March 20, 2009

JACKBILT INDUSTRIES, INC., Petitioner,
vs.
JACKBILT EMPLOYEES WORKERS UNION-NAFLU-KMU, Respondent.

FACTS: Due to the adverse effects of the Asian economic crisis on the construction industry,
petitioner Jackbilt Industries, Inc. decided to temporarily stop its business of producing concrete
hollow blocks, compelling most of its employees to go on leave for six months. Respondent
Jackbilt Employees Workers Union-NAFLU-KMU immediately protested the temporary
shutdown. Because its collective bargaining agreement with petitioner was expiring during the
period of the shutdown, respondent claimed that petitioner halted production to avoid its duty to
bargain collectively. Accordingly, respondent went on strike. Its officers and members picketed
petitioner’s main gates and deliberately prevented persons and vehicles from going into and out
of the compound. The petitioner filed a petition for injunction with a prayer for the issuance of a
TRO in the NLRC. The NLRC issued a TRO directing the respondents to refrain from preventing
access to petitioner’s property. However, the respondent union violated order. Thus, the NLRC
ordered the issuance of a writ of preliminary injunction. Meanwhile, petitioner dismissed the
concerned officers and members and barred them from entering its premises. Respondent then
filed complaints for illegal lockout, runaway shop and damages, unfair labor practice, illegal
dismissal and attorney’s fees, and refusal to bargain. Petitioner, on the other hand, asserted
that because respondent conducted a strike without observing the procedural requirements
provided in Article 263 of the Labor Code, the strike was illegal. The labor arbiter dismissed the
complaints for illegal lockout and unfair labor practice for lack of merit. However, because
petitioner did not file a petition to declare the strike illegal before terminating respondent’s
officers and employees, it was found guilty of illegal dismissal. The NLRC, on appeal, modified
the decision of the labor arbiter. It held that only petitioner should be liable for monetary awards
granted to respondent’s officers and members. Both petitioner and respondent moved for
reconsideration but they were denied for lack of merit. Petitioner assailed decision of the NLRC
via a petition for certiorari in the CA. The CA dismissed the petition but modified the decision of
the NLRC. Because most of affected employees were union members, the CA held that the
temporary shutdown was moved by anti-union sentiments. Petitioner was therefore guilty of
unfair labor practice and, consequently, was ordered to pay respondent’s officers and
employees backwages and separation pay. Petitioner moved for reconsideration but it was
denied. Hence, this petition.

ISSUE: Whether or not the filing of a petition with the labor arbiter to declare a strike illegal is a
condition sine qua non for the valid termination of employees who commit an illegal act in the
course of such strike?

HELD: The principle of conclusiveness of judgment, embodied in the Rules of Court, holds that
the parties to a case are bound by the findings in a previous judgment with respect to matters
actually raised and adjudged therein. Article 264(e) of the Labor Code prohibits any person
engaged in picketing from obstructing the free ingress to and egress from the employer’s
premises. Since respondent was found in to have prevented the free entry into and exit of
vehicles from petitioner’s compound, respondent’s officers and employees clearly committed
illegal acts in the course of the strike. The use of unlawful means in the course of a strike
renders such strike illegal. Therefore, pursuant to the principle of conclusiveness of judgment,
strike was ipso facto illegal and a petition to declare the strike illegal was thus unnecessary.
Consequently, the Court held the legality of the dismissal of respondent’s officers and
employees based on Article 264 of the Labor Code which provides that an employer may
terminate employees found to have committed illegal acts in the course of a strike.
G.R. No. 167614 March 24, 2009
ANTONIO M. SERRANO, Petitioner,
vs.
Gallant MARITIME SERVICES, INC. and MARLOW NAVIGATION CO., INC., Respondents.

FACTS: Petitioner Serrano was hired by Gallant Maritime Services, Inc. and Marlow Navigation
Co., Ltd. (respondents) under a Philippine Overseas Employment Administration (POEA)-
approved Contract of Employment with the following terms and conditions: (1) Duration of
Contract: 12 months; (2) Position: Chief Officer; (3) Basic monthly salary: US$ 1,400.00; (4)
Hours of work: 48 hrs/week; (5) Overtime: US$700.00/month; and (6) Vacation leave with pay: 7
days/month. On the date of his departure, petitioner was constrained to accept a downgraded
employment contract for the position of Second Officer with a monthly salary of US$1,000.00,
upon the assurance and representation of respondents that he would be made Chief Officer by
the end of April 1998. Respondents did not deliver on their promise to make petitioner Chief
Officer. Hence, petitioner refused to stay on as Second Officer and was repatriated to the
Philippines. Petitioner's employment contract was for a period of 12 months but at the time of
his repatriation, he had served only 2 months and 7 days of his contract, leaving an unexpired
portion of 9 months and 23 days. Petitioner filed a Complaint against respondents for
constructive dismissal and for payment of his money claims in the total amount of
US$26,442.73 as well as moral and exemplary damages and attorney's fees. The LA rendered
a Decision declaring the dismissal of petitioner illegal and awarding him monetary benefits. In
awarding petitioner a lump-sum salary of US$8,770.00, the LA based his computation on the
salary period of three months only -- rather than the entire unexpired portion of 9 months and 23
days of petitioner's employment contract - applying the subject clause. However, the LA applied
the salary rate based on basic, overtime, and vacation leave pay provided in the contract.
Respondents appealed to the NLRC on the legality of the dismissal. While petitioner also
appealed to the NLRC on the sole issue that the LA erred in not applying the ruling that in case
of illegal dismissal, OFWs are entitled to their salaries for the unexpired portion of their
contracts. The NLRC modified the LA Decision on the lump-sum salary awarded to the
petitioner. Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the
constitutionality of the subject clause. The NLRC denied the motion. Petitioner filed a Petition for
Certiorari with the CA which was granted. The CA affirmed the NLRC ruling on the reduction of
the applicable salary rate; however, the CA skirted the constitutional issue raised by petitioner.
His Motion for Reconsideration having been denied by the CA, petitioner brings his cause to the
SC.

ISSUES: (1) Whether or not the court shall grant migrant workers back wages equal to the
unexpired portion of his contract?; (2) Whether or not the court should have decided on the
constitutional issue raised by the petitioner?; and (3) Whether or not the court shall include the
award of overtime and vacation pay provided in the contract?

HELD: On the first and second issues, when the Court is called upon to exercise its power of
judicial review of the acts of its co-equals, such as the Congress, it does so only when these
conditions obtain: (1) that there is an actual case or controversy involving a conflict of rights
susceptible of judicial determination; (2) that the constitutional question is raised by a proper
party and at the earliest opportunity; and (3) that the constitutional question is the very lis mota
of the case, otherwise the Court will dismiss the case or decide the same on some other
ground. Without a doubt, there exists in this case an actual controversy directly involving
petitioner who is personally aggrieved that the labor tribunals and the CA computed his
monetary award based on the salary period of three months only as provided under the subject
clause. The constitutional challenge is also timely. It should be borne in mind that the
requirement that a constitutional issue be raised at the earliest opportunity entails the
interposition of the issue in the pleadings before a competent court, such that, if the issue is not
raised in the pleadings before that competent court, it cannot be considered at the trial and, if
not considered in the trial, it cannot be considered on appeal. Records disclose that the issue on
the constitutionality of the subject clause was first raised, not in petitioner's appeal with the
NLRC, but in his Motion for Partial Reconsideration with said labor tribunal, and reiterated in his
Petition for Certiorari before the CA. Nonetheless, the issue is deemed seasonably raised
because it is not the NLRC but the CA which has the competence to resolve the constitutional
issue. The CA was therefore remiss in failing to take up the issue in its decision. The third
condition that the constitutional issue be critical to the resolution of the case likewise obtains
because the monetary claim of petitioner to his lump-sum salary for the entire unexpired portion
of his 12-month employment contract, and not just for a period of three months, strikes at the
very core of the subject clause.

On the issue of constitutionality of RA 8042, the Court held that it is unconstitutional.

The prohibition on Section 10, Article III of the Constitution is aligned with the general principle
that laws newly enacted have only a prospective operation, and cannot affect acts or contracts
already perfected; however, as to laws already in existence, their provisions are read into
contracts and deemed a part thereof. The enactment of RA No. 8042 in 1995 preceded the
execution of the employment contract between petitioner and respondents in 1998. Hence, it
cannot be argued that R.A. No. 8042, particularly the subject clause, impaired the employment
contract of the parties. Furthermore, the law was enacted in the exercise of the police power of
the State to regulate a business, profession or calling, particularly the recruitment and
deployment of OFWs, with the noble end in view of ensuring respect for the dignity and well-
being of OFWs wherever they may be employed. The Court held that RA 8042 does not violate
the non-impairment clause provided in the constitution.

Rights provided in Section 1, Article II of the Constitution are not absolute but subject to the
inherent power of Congress to incorporate, when it sees fit, a system of classification into its
legislation; however, to be valid, the classification must comply with these requirements: 1) it is
based on substantial distinctions; 2) it is germane to the purposes of the law; 3) it is not limited
to existing conditions only; and 4) it applies equally to all members of the class. Based on
existing jurisprudence, it was held that Congress retains its wide discretion in providing for a
valid classification, and its policies should be accorded recognition and respect by the courts of
justice except when they run afoul of the Constitution. The deference stops where the
classification violates a fundamental right, or prejudices persons accorded special protection by
the Constitution. When these violations arise, the Court must discharge its primary role as the
vanguard of constitutional guaranties, and require a stricter and more exacting adherence to
constitutional limitations. Rational basis should not suffice. Imbued with the obligation to afford
protection to labor, the Court in the present case employs the standard of strict judicial scrutiny,
for it perceives in the subject clause a suspect classification prejudicial to OFWs. A closer
examination reveals that the subject clause has a discriminatory intent against, and an invidious
impact on, OFWs at two levels: (1) OFWs with fixed-period employment contracts of less than
one year; which in case of illegal dismissal, they are entitled to their salaries for the entire
unexpired portion of their contract; and (2) OFWs with fixed-period employment contracts of one
year or more; which in case of illegal dismissal, they are entitled to monetary award equivalent
to only 3 months of the unexpired portion of their contracts. To illustrate the disparity even more
vividly, the Court assumes a hypothetical OFW-A with an employment contract of 10 months at
a monthly salary rate of US$1,000.00 and a hypothetical OFW-B with an employment contract
of 15 months with the same monthly salary rate of US$1,000.00. Both commenced work on the
same day and under the same employer, and were illegally dismissed after one month of work.
Under the subject clause, OFW-A will be entitled to US$9,000.00, equivalent to his salaries for
the remaining 9 months of his contract, whereas OFW-B will be entitled to only US$3,000.00,
equivalent to his salaries for 3 months of the unexpired portion of his contract, instead of
US$14,000.00 for the unexpired portion of 14 months of his contract, as the US$3,000.00 is the
lesser amount. In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term
employment who were illegally discharged were treated alike in terms of the computation of
their money claims: they were uniformly entitled to their salaries for the entire unexpired portions
of their contracts. But with the enactment of R.A. No. 8042, specifically the adoption of the
subject clause, illegally dismissed OFWs with an unexpired portion of one year or more in their
employment contract have since been differently treated in that their money claims are subject
to a 3-month cap, whereas no such limitation is imposed on local workers with fixed-term
employment. The Court concludes that the subject clause contains a suspect classification in
that, in the computation of the monetary benefits of fixed-term employees who are illegally
discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one
year or more in their contracts, but none on the claims of other OFWs or local workers with
fixed-term employment. The subject clause singles out one classification of OFWs and burdens
it with a peculiar disadvantage. There being a suspect classification involving a vulnerable
sector protected by the Constitution, the Court now subjects the classification to a strict judicial
scrutiny, and determines whether it serves a compelling state interest through the least
restrictive means. What constitutes compelling state interest is measured by the scale of rights
and powers arrayed in the Constitution and calibrated by history. It is akin to the paramount
interest of the state for which some individual liberties must give way, such as the public interest
in safeguarding health or maintaining medical standards, or in maintaining access to information
on matters of public concern. In the present case, the Court dug deep into the records but found
no compelling state interest that the subject clause may possibly serve. The Government has
failed to discharge its burden of proving the existence of a compelling state interest that would
justify the perpetuation of the discrimination against OFWs under the subject clause. Assuming
that the purpose of the subject clause is to protect the employment of OFWs by mitigating the
solidary liability of placement agencies, such callous and cavalier rationale will have to be
rejected. There can never be a justification for any form of government action that alleviates the
burden of one sector, but imposes the same burden on another sector, especially when the
favored sector is composed of private businesses such as placement agencies, while the
disadvantaged sector is composed of OFWs whose protection no less than the Constitution
commands. The idea that private business interest can be elevated to the level of a compelling
state interest is odious. Moreover, even if the purpose of the subject clause is to lessen the
solidary liability of placement agencies vis-a-vis their foreign principals, there are mechanisms
already in place that can be employed to achieve that purpose without infringing on the
constitutional rights of OFWs.

The Court, therefore, held that the subject clause violates petitioner's right to substantive due
process, for it deprives him of property, consisting of monetary benefits, without any existing
valid governmental purpose. The subject clause also does not state or imply any definitive
governmental purpose; and it is for that precise reason that the clause violates not just
petitioner's right to equal protection, but also her right to substantive due process under Section
1, Article III of the Constitution. The subject clause being unconstitutional, petitioner is entitled to
his salaries for the entire unexpired period of nine months and 23 days of his employment
contract, pursuant to law and jurisprudence prior to the enactment of R.A. No. 8042.

On the Third Issue, the Court held that the claim for the day's leave pay for the unexpired
portion of the contract is unwarranted. The word salaries in Section 10(5) does not include
overtime and leave pay. For seafarers like petitioner, DOLE Department Order No. 33, series
1996 provides a Standard Employment Contract of Seafarers, in which salary is understood as
the basic wage, exclusive of overtime, leave pay and other bonuses; whereas overtime pay is
compensation for all work "performed" in excess of the regular eight hours, and holiday pay is
compensation for any work "performed" on designated rest days and holidays. By the foregoing
definition alone, there is no basis for the automatic inclusion of overtime and holiday pay in the
computation of petitioner's monetary award, unless there is evidence that he performed work
during those periods.

G.R. No. 109002 April 12, 2000

DELA SALLE UNIVERSITY, petitioner, vs. DELA SALLE UNIVERSITY EMPLOYEES
ASSOCIATION (DLSUEA) and BUENAVENTURA MAGSALIN, respondents.

G.R. No. 110072 April 12, 2000

DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION-NATIONAL FEDERATION OF
TEACHERS AND EMPLOYEES UNION (DLSUEA-NAFTEU), petitioner, vs. DELA SALLE
UNIVERSITY and BUENAVENTURA MAGSALIN, respondents.

FACTS: Dela Salle University and Dela Salle University Employees Association — National
Federation of Teachers and Employees Union (DLSUEA-NAFTEU), which is composed of
regular non-academic rank and file employees, entered into a CBA with a life span of 3 years.
During the freedom period, the Union initiated negotiations with the University for a new CBA
which, however, turned out to be unsuccessful. Hence, the Union filed a Notice of Strike. After
several conciliation-mediation meetings, a partial CBA was thereafter executed by the parties.
The parties then entered into a Submission Agreement, identifying the remaining unresolved
issues for arbitration. The voluntary arbitrator then rendered decision which was assailed by
both parties. They both filed their respective motions for reconsideration which, however, were
not entertained by the voluntary arbitrator. The University then filed a petition for certiorari with
temporary restraining order and/or preliminary injunction assailing the decision of the voluntary
arbitrator. The Union also filed a petition for certiorari.

ISSUES: (1) Whether or not the CSC, disciple officers & CSB’s employees are included in the
University’s rank-and-file bargaining unit? (2) Whether or not a union shop clause should be
included in the parties’ CBA? (3) Whether or not Last-in-First-out is valid in cases of
retrenchment? (4) Whether or not the University may be required to grant a second round of
wage increase? (5) Whether or not the University should approve the deloading of union
president, leave benefits and indefinite union leave with pay? (6) Whether or not the multi-
sectoral committee in the University is the legitimate group which determines and scrutinizes the
annual salary increases and fringe benefits of the employees of the University? and (7) whether
or not the 70% share in the incremental tuition proceeds is the only source of salary increases
and fringe benefits of the employees?

HELD: (1) The court ruled that the said CSC and discipline officers are not confidential
employees. The service record of a computer operator reveals that his duties are basically
clerical and non-confidential in nature. As to the discipline officers, based on the nature of their
duties, they are not confidential employees and should therefore be included in the bargaining
unit of rank-and-file employees. But the employees of the College of St. Benilde should be
excluded from the bargaining unit of the rank-and-file employees of Dela Salle University,
because the two educational institutions have their own separate juridical personality and no
sufficient evidence was shown to justify the piercing of the veil of corporate fiction.
(2) It was held that a union shop provision in addition to the existing maintenance of
membership clause in the collective should be included. The legal protection granted to a right
to refrain from joining a union is withdrawn by operation of law, where a labor union and an
employer have agreed on a closed shop, by virtue of which the employer may employ only
members of the collective bargaining union, and the employees must continue to be members
of the union for the duration of the contract in order to keep their jobs.

(3) It was ruled that as an exercise of management prerogative, the University has the right to
adopt valid and equitable grounds as basis for terminating or transferring employees. A valid
exercise of management prerogative is one which, among others, covers: work assignment,
working methods, time, supervision of workers, transfer of employees, work supervision, and
the discipline, dismissal and recall of workers. Except as provided for, or limited by special laws,
an employer is free to regulate, according to his own discretion and judgment, all aspects of
employment."

(4) The Court found that the voluntary arbitrator committed grave abuse of discretion amounting
to lack or excess of jurisdiction. The standard proof of a company's financial standing is its
financial statements duly audited by independent and credible external auditors. The financial
capability of a company cannot be based on its proposed budget because a proposed budget
does not reflect the true financial condition of a company and more importantly, the use of a
proposed budget as proof of a company's financial condition would be susceptible to abuse by
scheming employers who might be merely feigning dire financial condition in their business
ventures in order to avoid granting salary increases and fringe benefits to their employees.

(5) It was ruled that there being no justifiable reason for the granting of the deloading of union
president, leave benefits and indefinite union leave with pay.

(6) During the parties' negotiations for a new CBA, the Union demanded for a 25% and 40%
salary increase for the second and third years, respectively. The University's counter-proposal
was for a 10% increase for the third year. After the meeting of the multi-sectoral committee on
budget, which is composed of students, parents, faculty, administration and union, the
University granted across-the-board salary increases of 11.3% and 19% for the second and
third years, respectively. Assuming for the sake of argument that the said committee is the
group responsible for determining wage increases and fringe benefits, the committee's
determination must still be based on duly audited financial statements.

(7) The Court deemed that any determination of this issue is unnecessary and irrelevant, in view
of the rulings on the 4th and preceding issues and there being no evidence presented before
the voluntary arbitrator that the University held incremental tuition fee proceeds from which any
wage increase or fringe benefit may be satisfied.

G.R. No. 89920 October 18, 1990

UNIVERSITY OF STO. TOMAS, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, UST FACULTY UNION, respondents.

FACT: The University of Sto. Tomas (UST) terminated the employment of all 16 union officers
and directors of respondent UST Faculty Union on the ground that in publishing or causing to be
published in Strike the libelous and defamatory attacks against the Father Rector, has
committed the offenses of grave misconduct, serious disrespect to a superior and conduct
unbecoming a faculty member. As a result of the dismissal of said employees, some faculty
members staged mass leaves of absence and several days thereafter, disrupting classes in all
levels at the University. The faculty union filed a complaint for illegal dismissal and unfair labor
practice with the DOLE. The labor arbiter certified the matter to the Secretary of Labor and
Employment for a possible suspension of the effects of termination. Secretary Franklin Drilon
subsequently issued an order suspending the termination of the 16 employees. Petitioner UST
filed a motion for reconsideration. Secretary Drilon issued another order modifying his previous
order, ordering UST to readmit all its faculty members under the same terms and conditions
prevailing prior to the present dispute. The NLRC subsequently caned the parties to a
conference. The respondent union filed before the NLRC a motion to implement the orders of
the Honorable Secretary of Labor and Employment; while petitioner filed its opposition to the
private respondent's motion. The NLRC issued a resolution, which is the subject of this petition
for certiorari.

ISSUES: Whether or not the order of the alternative remedies of actual reinstatement or payroll
reinstatement of the dismissed faculty members is proper? Whether or not the University can be
required to pay full backwages of the dismissed employees? Whether or not NLRC is correct
when it arrogated upon itself the exercise of the right and prerogatives reposed by law to the
petitioner university in the latter’s capacity as employer?

HELD: (1) It was held that it was error for the NLRC to order the alternative remedies of payroll
reinstatement or actual reinstatement. However, the order did not amount to grave abuse of
discretion. Such error is merely an error of judgment which is not correctible by a special civil
action for certiorari. The NLRC was only trying its best to work out a satisfactory ad hoc solution
to a festering and serious problem. The payroll reinstatement will actually minimize the
petitioners’ problems in the payment of full backwages.

(2) A return-to-work order is immediately effective and executory despite the filing of a motion
for reconsideration by the petitioner. Additionally, although the Secretary's order was modified,
the return-to-work portion of the earlier order which states that "the faculty members should be
admitted under the same terms and conditions prevailing prior to the dispute" was affirmed.
Since the factual findings of quasi-judicial agencies like the NLRC are generally accorded not
only respect but even finality if such findings are supported by substantial evidence. There is no
showing that such substantial evidence is not present. The reinstated faculty members' refusal
to assume their substantially equivalent academic assignments does not contravene the
Secretary's return-to-work order. They were merely insisting on being given actual teaching
loads, on the return-to-work order being followed. It was found that their persistence justified as
they are rightfully and legally entitled to actual reinstatement. Since the petitioner failed to
comply with the Secretary's order of actual reinstatement, it was adjudged that the NLRC's
award of backwages until actual reinstatement is correct.

(3) The hiring, firing, transfer, demotion and promotion of employees are traditionally Identified
as management prerogatives. However, these are not absolute prerogatives. They are subject
to limitations found in law, a CBA, or general principles of fair play and justice. Article 263(g) is
one such limitation provided by law. To the extent that Art. 263(g) calls for the admission of all
workers under the same terms and conditions prevailing before the strike, the petitioner
University is restricted from exercising its generally unbounded right to transfer or reassign its
employees. The petitioner manifests the fear that if the temporarily reinstated faculty members
will be allowed to handle actual teaching assignments in the classroom, the latter would take
advantage of the situation by making the classroom the forum not for the purpose of imparting
knowledge to the students but for the purpose of assailing and lambasting the administration.
There may be a basis for such a fear. However, such a fear is speculative and does not warrant
a deviation from the principle that the dismissed faculty members must be actually reinstated
pending resolution of the labor dispute.

G.R. No. 155639 April 22, 2009

JANUARIA A. RIVERA, Petitioner, vs. UNITED LABORATORIES, INC., Respondent.

FACTS: Rivera commenced employment with respondent UNILAB as senior manufacturing

pharmacist. She later became Director of UNILAB's Manufacturing Division. UNILAB then
adopted a comprehensive retirement plan supported by a retirement fund, consisting of Trust
Fund A where it would put in its contributions for the account of the member-employee and
Trust Fund B consisting of the contributions of the members themselves. A member is
compulsorily retired upon reaching the normal retirement date which is the date when the
member has reached age 60 or has completed 30 years of service, whichever comes first. In
1988, Rivera completed 30 years of service and UNILAB retired her pursuant to the terms of the
plan. Based on her monthly salary and at one month's terminal basic salary for every year of
service, Rivera's total retirement benefits amounted to P1,047,331.33. Rivera's accrued
retirement benefits under Trust Fund A and Trust Fund B were withdrawn from the retirement
fund and deposited in Trust Fund C, a special account from which she could make withdrawals
as she pleased. At Rivera's request, UNILAB allowed her to continue working for the company;
she was even promoted to the position of Asst. Vice-President. She rendered service to the
company until the end of 1992, at which time, Rivera retired from employment with the
company. The company then amended its retirement plan, providing, among others, for an
increase in retirement benefits from 1 month to 1.5 months of terminal basic salary for every
year of service. The amendment also provides that the effective date of normal or mandatory
retirement from the Plan is 30 days after an employee reaches his/her 60th birthday. Rivera
then asked that her retirement benefits be increased in accordance with the amended
retirement program based on her terminal basic salary, multiplied by her thirty four (34) years of
service with the company. UNILAB denied Rivera’s request explaining that the upgrade of the
retirement benefit formula which occurred after her retirement shall not be applied to her.

ISSUE: Whether or not Rivera is entitled to the upgraded retirement benefit?

HELD: Retirement in its ordinary signification is the termination of an employee’s service upon
reaching retirement age. Prior to the Retirement Pay Law (R.A. 7641), Article 287 of the Labor
Code simply provided that - Any employee may be retired upon reaching the retirement age
established in the CBA or other applicable employment contract;… the employee shall be
entitled to receive such retirement benefits as he may have earned under existing laws and any
collective bargaining or other agreement. Section 13 of the Rules to Implement the Labor Code,
on the other hand, provided that – In the absence of any CBA or other applicable agreement
concerning terms and conditions of employment which provides for retirement at an older age,
an employee may be retired upon reaching the age of sixty (60) years. Thus, her retirement was
governed by the applicable agreement which was the UNILAB retirement plan. Under the terms
of this pre-1992 plan, her retirement was mandatory as she had reached 30 years of service. A
twist in Rivera’s case is that she continued working beyond the compulsory separation from
service that resulted from her retirement. Whether she could or could not resume working with
the company is, as a rule, a consensual matter for the parties to agree upon, limited only by
company policies and the applicable terms of the retirement plan. Her employment terms under
this renewed employment are based on what she and the company agreed upon. Whether
these terms included renewed coverage in the retirement plan is an evidentiary gap that could
have been conclusively shown by evidence of deductions of contributions to the plan after 1988.
Two indicators, however, tell us that no such coverage took place. The first is that the terms of
the retirement plan, before and after its 1992 amendment, continued to exclude those who have
rendered 30 years of service or have reached 60 years of age. Therefore, the plan could not
have covered her. The second is the absence of evidence of, or of any demand for, any
reimbursement of what Rivera would have paid as contributions to the plan had her coverage
and deductions continued after 1988. Thus, we conclude that her renewed service did not have
the benefit of any retirement plan coverage.

G.R. No. 165407 June 5, 2009

HERMINIGILDO INGUILLO and ZENAIDA BERGANTE, Petitioners, vs. FIRST PHILIPPINE
SCALES, Inc. and/or AMPARO POLICARPIO, Manager, Respondents.

FACTS: First Philippine Scales, Inc. (FPSI) employed Bergante and Inguillo as assemblers. In
1991, FPSI and First Philippine Scales Industries Labor Union (FPSILU) entered into a CBA.
Bergante and Inguillo, who were members of FPSILU. During the lifetime of the CBA, Bergante,
Inguillo and several FPSI employees joined another union, the Nagkakaisang Lakas ng
Manggagawa (NLM), which was affiliated with a federation called KATIPUNAN. NLM-
KATIPUNAN allegedly erroneously collected P90,000.00 from the employees. Notices of
garnishment were issued to United Coconut Planters Bank and to FPSI for the latter to hold for
FPSILU the earnings of Grutas and Inguillo to the extent of P13,032.18. Resultantly, the amount
of P5,140.55 was collected. Inguillo then filed with the NLRC a complaint against FPSI and/or
Policarpio for illegal withholding of salary and damages. Respondents then terminated the
services of 8 employees including Grutas, Inguillo and Bergante. Subsequently, 2 separate
complaints for illegal dismissal, reinstatement and damages were filed against respondents.

ISSUE: Whether or not the termination of the employees is legal and valid?

HELD: The Labor Code of the Philippines has several provisions under which an employee may
be validly terminated, namely: (1) just causes under Article 282; (2) authorized causes under
Article 283; (3) termination due to disease under Article 284; and (4) termination by the
employee or resignation under Article 285. While the said provisions did not mention as ground
the enforcement of the Union Security Clause in the CBA, the dismissal from employment
based on the same is recognized and accepted by the court. "Union security" is a generic term,
which is applied to and comprehends "closed shop," "union shop," "maintenance of
membership" or any other form of agreement which imposes upon employees the obligation to
acquire or retain union membership as a condition affecting employment. In terminating the
employment of an employee by enforcing the Union Security Clause, the employer needs only
to determine and prove that: (1) the union security clause is applicable; (2) the union is
requesting for the enforcement of the union security provision in the CBA; and (3) there is
sufficient evidence to support the union's decision to expel the employee from the union or
company. It was found that all the requisites have been sufficiently met.

However, it was emphasized that the enforcement of union security clauses is authorized by
law, provided such enforcement is not characterized by arbitrariness, and always with due
process. There are two (2) aspects which characterize the concept of due process: substantive
and procedural. Procedural due process in the dismissal of employees requires notice and
hearing. The employer must furnish the employee two written notices before termination may be
effected. The first notice apprises the employee of the particular acts or omissions for which his
dismissal is sought, while the second notice informs the employee of the employer’s decision to
dismiss him. The requirement of a hearing, on the other hand, is complied with as long as there
was an opportunity to be heard, and not necessarily that an actual hearing was conducted. In
this case, the required two notices that must be given to herein petitioners Bergante and Inguillo
were lacking. The records are bereft of any notice that would have given a semblance of
substantial compliance on the part of herein respondents. As for the requirement of a hearing or
conference, it was held that respondents also failed to substantially comply with the same.

The power to dismiss is a normal prerogative of the employer. However, this is not without
limitation. The employer is bound to exercise caution in terminating the services of his
employees especially so when it is made upon the request of a labor union pursuant to the
Collective Bargaining Agreement. Dismissals must not be arbitrary and capricious. Due process
must be observed in dismissing an employee because it affects not only his position but also his
means of livelihood. Employers should respect and protect the rights of their employees, which
include the right to labor.

G.R. No. 165756 June 5, 2009

HOTEL ENTERPRISES OF THE PHILIPPINES, INC. (HEPI), owner of Hyatt Regency
Manila, Petitioner, vs. SAMAHAN NG MGA MANGGAGAWA SA HYATT-NATIONAL UNION
OF WORKERS IN THE HOTEL AND RESTAURANT AND ALLIED INDUSTRIES (SAMASAH-
NUWHRAIN), Respondent.

FACTS: Respondent Union is the certified collective bargaining agent of the rank-and-file
employees of Hyatt Regency Manila. In 2001, HEPI’s hotel business suffered a slump due to
the local and international economic slowdown. An audited financial report made by Sycip
Gorres Velayo (SGV) & Co. indicated that the hotel suffered a gross operating loss amounting
to P16,137,217.00 in 2001, a staggering decline compared to its P48,608,612.00 gross
operating profit in year 2000. Allegedly, the management initially decided to cost-cut by
implementing energy-saving schemes: prioritizing acquisitions/purchases; reducing work weeks
in some of the hotel’s departments; directing the employees to avail of their vacation leaves;
and imposing a moratorium on hiring employees for the year 2001 whenever practicable. The
Union then filed a notice of strike due to a bargaining deadlock before the National Conciliation
Mediation Board (NCMB). In the course of the proceedings, HEPI submitted its economic
proposals for the rank-and-file employees included manning and staffing standards for the 248
regular rank-and-file employees which was accepted by the Union. Hence, a new CBA was
signed.

Subsequently, HEPI decided to implement a downsizing scheme after studying the operating
costs of its different divisions to determine the areas where it could obtain significant savings.
The some positions were identified as redundant or in excess of what was required for the
hotel’s actual operation given the prevailing poor business condition. The effect was to be a
reduction of the hotel’s rank-and file employees from the agreed number of 248 down to just
150 but it would generate estimated savings of around P9,981,267.00 per year. However, it was
opposed by the Union. Despite its opposition, a list of the positions declared redundant and to
be contracted out was given by the management to the Union. Notices of termination were,
likewise, sent to 48 employees whose positions were to be retrenched or declared as
redundant. A notice of termination was also submitted by the management to the DOLE
indicating the names, positions, addresses, and salaries of the employees to be terminated.
Thereafter, the hotel management engaged the services of independent job contractors. Some
employees, including one Union officer, who were affected by the downsizing plan were
transferred to other positions in order to save their employment. The Union then filed a notice of
strike based on unfair labor practice (ULP) against HEPI and when into strike on May 10, 2002.

ISSUE: Whether or not the strike conducted by the Labor Union due to ULP is valid?

HELD: Retrenchment is the reduction of work personnel usually due to poor financial returns,
aimed to cut down costs for operation particularly on salaries and wages. Redundancy, on the
other hand, exists where the number of employees is in excess of what is reasonably
demanded by the actual requirements of the enterprise. Both are forms of downsizing and are
often resorted to by the employer during periods of business recession, industrial depression, or
seasonal fluctuations, and during lulls in production occasioned by lack of orders, shortage of
materials, conversion of the plant for a new production program, or introduction of new methods
or more efficient machinery or automation. Retrenchment and redundancy are valid
management prerogatives, provided they are done in good faith and the employer faithfully
complies with the substantive and procedural requirements laid down by law and jurisprudence.
For a valid retrenchment, the following requisites must be complied with: (1) the retrenchment is
necessary to prevent losses and such losses are proven; (2) written notice to the employees
and to the DOLE at least one month prior to the intended date of retrenchment; and (3) payment
of separation pay equivalent to one-month pay or at least one-half month pay for every year of
service, whichever is higher. In case of redundancy, the employer must prove that: (1) a written
notice was served on both the employees and the DOLE at least one month prior to the
intended date of retrenchment; (2) separation pay equivalent to at least one month pay or at
least one month pay for every year of service, whichever is higher, has been paid; (3) good faith
in abolishing the redundant positions; and (4) adoption of fair and reasonable criteria in
ascertaining which positions are to be declared redundant and accordingly abolished. It is the
employer who bears the onus of proving compliance with these requirements, retrenchment and
redundancy being in the nature of affirmative defenses. Otherwise, the dismissal is not justified.
In the case at bar, petitioner justifies the downsizing scheme on the ground of serious business
losses it suffered in 2001. Some positions had to be declared redundant to cut losses. Our labor
laws only allow retrenchment or downsizing as a valid exercise of management prerogative if all
other else fail. But in this case, petitioner did implement various cost-saving measures and even
transferred some of its employees to other viable positions just to avoid the premature
termination of employment of its affected workers. It was when the same proved insufficient and
the amount of loss became certain that petitioner had to resort to drastic measures to stave off
P9,981,267.00 in losses, and be able to survive. If we see reason in allowing an employer not to
keep all its employees until after its losses shall have fully materialized, with more reason
should we allow an employer to let go of some of its employees to prevent further financial slide.

In any event, it was held that an employer’s good faith in implementing a redundancy program is
not necessarily destroyed by availment of the services of an independent contractor to replace
the services of the terminated employees. We have previously ruled that the reduction of the
number of workers in a company made necessary by the introduction of the services of an
independent contractor is justified when the latter is undertaken in order to effectuate more
economic and efficient methods of production.

Procedurally, a strike to be valid must comply with the following requisites: (a) a notice of strike
filed with the DOLE 30 days before the intended date thereof or 15 days in case of ULP; (b) a
strike vote approved by a majority of the total union membership in the bargaining unit
concerned obtained by secret ballot in a meeting called for that purpose; and (c) a notice to the
DOLE of the results of the voting at least seven (7) days before the intended strike. The
requirements are mandatory and failure of a union to comply therewith renders the strike illegal.
In this case, respondent fully satisfied the procedural requirements prescribed by law.
Substantively, however, there appears to be a problem. A valid and legal strike must be based
on "strikeable" grounds, because if it is based on a "non-strikeable" ground, it is generally
deemed an illegal strike. Corollarily, a strike grounded on ULP is illegal if no acts constituting
ULP actually exist. As an exception, even if no such acts are committed by the employer, if the
employees believe in good faith that ULP actually exists, then the strike held pursuant to such
belief may be legal. Here, respondent Union went on strike in the honest belief that petitioner
was committing ULP. Thus, even if technically there was no legal ground to stage a strike based
on ULP, since the attendant circumstances support the belief in good faith that petitioner’s
retrenchment scheme was structured to weaken the bargaining power of the Union, the strike,
by exception, may be considered legal.

G.R. No. 174316 June 23, 2009

TEODORICO S. MIRANDA, JR., Petitioner, vs. ASIAN TERMINALS, INC. (ATI) and COURT
OF APPEALS, Respondents.

FACTS: Petitioner Miranda was employed by respondent ATI as Checker I. He also became a
member of the Associated Port Checkers and Workers Union (APCWU). The petitioner, who
was then the Vice President of the union, was appointed to the position of Shop Steward. The
Shop Steward is a field representative of both the company and the union and acts as an
independent arbiter of all complaints brought to his attention. Roger P. Silva, the President of
APCWU, wrote a letter to the petitioner regarding the recall of his designation as the union Shop
Steward due to loss of trust and confidence in him, pursuant to the "Agreement Amending the
MPSI (Marina Port Services, Inc.) - APCWU CBA" due to refusing to heed the union president’s
reminders concerning his "chronic absenteeism" that "is hurting the interest of the Union
members as they are left with no responsible union officer when summoned for investigation
concerning alleged infractions of company rules. Upon the conclusion of the investigation, the
grievance committee issued its report recommending to ATI the recall of the petitioner as Shop
Steward and for his reversion to his former position of Checker I, in accordance with the CBA.
Then the management effective immediately recalls the designation of Miranda as Shop
Steward.

The petitioner first filed a complaint against Roger Silva praying for his reinstatement as Shop
Steward. The petitioner likewise filed a series of complaints for unfair labor practice, which was
later amended to illegal demotion with a claim for reduction or diminution in pay, against
respondent ATI and APCWU. While the cases filed by the petitioner were pending, the petitioner
was re-assigned from the position of Checker I to Checker I Mobile, which is lower in rank than
Checker I. He was further re-assigned to Vessel Operation Checker, which is designated only to
Checker Grades II and III and which positions were only assigned to casual Checkers. The
petitioner then filed a second complaint against the respondent for unfair labor practice, illegal
demotion and reduction and diminution of pay. A third complaint for Unfair Labor Practice and
Illegal Demotion was then filed by the petitioner which was later amended to illegal demotion in
rank and discrimination, amounting to constructive dismissal.

ISSUES: (1) whether the petitioner should be reinstated to the position of Shop Steward and (2)
whether the case has been rendered moot and academic.

HELD: The premise that the union Shop Steward is a position within the respondent company
provides a faulty foundation to an already convoluted case. A cursory look at the responsibilities
of a shop steward leads to the conclusion that it is a position within the union, and not within the
company. A shop steward is appointed by the union in a shop, department, or plant and serves
as representative of the union, charged with negotiating and adjustment of grievances of
employees with the supervisor of the employer. Even in Section 2 of Rule XIX of the
Implementing Rules of Book V of the Labor Code, as amended, the shop steward is understood
to be a union officer who plays an important role in the grievance procedure. In the case at bar,
the duties and responsibilities of the Shop Steward stated in the CBA between the union and
the respondent company, as well as the manner of the appointment and designation of the
Shop Steward show that the shop steward is a union position and not a position within the
company. Since the Shop Steward is a union position, the controversy surrounding his recall
from his position as Shop Steward becomes a dispute within the union. An "Internal Union
Dispute" or intra-union conflict” refers to a conflict within or inside a labor union. It includes all
disputes or grievances arising from any violation of or disagreement over any provision of the
constitution and by-laws of a union, including any violation of the rights and conditions of union
membership provided for in the Code. The records show that sometime after the appointment of
the petitioner to union Shop Steward, the petitioner, along with other union members, had
complaints with the manner in which the union leadership was handling the affairs of the union.
At the same time, there were also complaints about the petitioner’s habitual absenteeism and
his inability to perform his duties as union Shop Steward. When a grievance committee was
created to investigate these complaints, the petitioner refused to participate. This led to the
recall of petitioner as the union Shop Steward. The Med-Arbiter, as affirmed by the Secretary of
Labor, ruled that there was neither cause nor due process in the recall of the petitioner from the
position of union Shop Steward. He found that the claim of loss of trust and confidence due to
the petitioner’s alleged absenteeism was not substantiated and that the recall was not approved
by the Board of Directors of the union, as required by the APCWU Constitution and By-Laws.
The facts and findings of the Med-Arbiter and the Secretary of Labor are generally conclusive
on appeal. This Court is not a trier of facts and it is not its function to examine and evaluate the
probative value of all evidence presented to the concerned tribunal which formed the basis of its
impugned decision, resolution or order. Petitioner cannot be reinstated to Shop Steward
because his eventual separation from respondent ATI made reinstatement unfeasible.
Employment with respondent ATI and membership in the union are required in order to occupy
the position of Shop Steward. But the petitioner is neither a member of the union nor employed
with respondent ATI. He was already retrenched from respondent ATI and his retrenchment was
finally settled through the execution of a Quit Claim and Release which was executed. It may
seem that the outcome of this case provides no relief for the petitioner despite his invalid
removal from the position of union Shop Steward, but the reinstatement of the petitioner could
not be forced into the present circumstances because the petitioner is no longer employed by
the respondent company. It is a fact that we cannot avoid and must consider in resolving this
case. He was already compensated for his retrenchment from ATI, and he released respondent
ATI from any and all claims or liability with respect to his separation from employment due to
retrenchment. To order the respondent company to reinstate the petitioner to his employment in
ATI would render the Quit Claim and Release nugatory. The events which have taken place
during the pendency of the case have rendered the present petition moot and academic.

A.C. No. 4763 March 20, 2003

DR. GIL Y. GAMILLA, NORMA S. CALAGUAS, IRMA E. POTENCIANO, EDITHA OCAMPO,
LUZ DE GUZMAN, GLICERIA BALDRES, FERDINAND LIMOS, MA. LOURDES C. MEDINA,
HIDELITA GABO, CORAZON CUI, REMEDIOS T. GARCIA, RENE ARNEJO, RENE LUIS
TADLE, LAURA ABARA, PHILIP AGUINALDO, BENEDICTA ALAVA, LEONCIO CASAL,
CARMELITA ESPINA, ZENAIDA FAMORCA, CELSO NIERA, CESAR REYES, NATIVIDAD
SANTOS and MAFEL YSRAEL, complainants, vs. ATTY. EDUARDO J. MARIÑO JR.,
respondent.

FACTS: Sometime in 1986 respondent Atty. Mariño Jr. as president of the UST Faculty Union
and other union officers entered into a CBA with the management of UST for the provision of
economic benefits amounting to P35 million. The 1986 CBA expired in 1988 but efforts to forge
a new one unfortunately failed. In 1989 the faculty members of UST went on strike and as a
counter-measure UST terminated the employment of 16 officers and directors of the UST
Faculty Union including respondent. The administration of UST and the UST Faculty Union
entered into a compromise agreement for the payment of P7M from which P5M was intended to
settle the back wages and other claims of the dismissed employees who were earlier ordered
reinstated by the Court, and the sum of P2M to satisfy the remaining obligations of UST under
the 1986 CBA. In 1992 UST and the UST Faculty Union executed a memorandum of agreement
to settle the salary increases and other benefits under the CBA effective 1988 for a total of
P42M. It was agreed that the benefits accruing from 1 June 1991 to 31 October 1992 were to be
taken from the sum of P42M which UST would release directly to the faculty members, while the
remainder of the P42M package would be ceded by UST to the UST Faculty Union which would
then disburse the balance to cover the benefits from 1 November 1992 to 31 May 1993. The
memorandum of agreement also charged the amount of P2M agreed upon in the 1990
compromise agreement as well as the attorney's fees of Atty. Mariño worth P4.2M against the
P42M outlay. Complainants as members of the UST Faculty Union questioned the alleged lack
of transparency among the officers and directors of the union in the management and
disbursement of the monetary benefits for the faculty members. Complainants filed the instant
complaint for disbarment against Atty. Mariño accusing him of (a) compromising their
entitlements under the 1986 CBA without the knowledge, consent or ratification of the union
members, and worse, for only P2,000,000.00 when they could have received more than
P9,000,000.00; (b) failing to account for the P7,000,000.00 received by him and other officers
and directors in the UST Faculty Union under the 1990 compromise agreement; (c) lack of
transparency in the administration and distribution of the remaining balance of the
P42,000,000.00 package under the 1992 memorandum of agreement; (d) refusal to remit and
account for the P4,200,000.00 in favor of the faculty members although the amount was
denominated as attorney's fees.

ISSUE: Whether or not Respondent must be reprimanded from practice of law due to
misconduct?

HEDL: There are ethical lapses on the part of respondent Atty. Eduardo J. Mariño Jr. in the
manner by which he secured the P7M by virtue of the compromise agreement and the P4.2
attorney's fees under the memorandum of agreement. Although the record shows that the
Bureau of Labor Relations found respondent as having adequately accounted for the
disbursement of the funds which the UST Faculty Union received through the series of
agreements with the management of UST, the Court believes that Atty. Mariño failed to avoid
conflict of interests, first, when he negotiated for the compromise agreement wherein he played
the diverse roles of union president, union attorney and interested party being one of the
dismissed employees seeking his own restitution, and thereafter, when he obtained the
attorney's fees of P4,200,000.00 without full prior disclosure of the circumstances justifying such
claim to the members of the UST Faculty Union. As one of the sixteen (16) union officers and
directors seeking compensation from the University of Santo Tomas for their illegal dismissal,
respondent was involved in obvious conflict of interests when in addition he chose to act as
concurrent lawyer and president of the UST Faculty Union in forging the compromise
agreement. The test of conflict of interest among lawyers is "whether the acceptance of a new
relation will prevent an attorney from the full discharge of his duty of undivided fidelity and
loyalty to his client or invite suspicion of unfaithfulness or double-dealing in the performance
thereof."15 In the same manner, it is undoubtedly a conflict of interests for an attorney to put
himself in a position where self-interest tempts, or worse, actually impels him to do less than his
best for his client.
Thus it has been held that an attorney or any other person occupying fiduciary relations
respecting property or persons is utterly disabled from acquiring for his own benefit the property
committed to his custody for management.16 This rule is entirely independent of whether fraud
has intervened as in fact no fraud need be shown; no excuse will be heard from an attorney
because the rule stands on the moral obligation to refrain from placing oneself in positions that
ordinarily excite conflict between self-interest and integrity. Necessarily, a lawyer cannot
continue representing a client in an action or any proceeding against a party even with the
client's consent after the lawyer brings suit in his own behalf against the same defendant if it is
uncertain whether the defendant will be able to satisfy both judgments. No doubt, a lawyer is not
authorized to have financial stakes in the subject matter of the suit brought in behalf of his client.

G.R. No. 168406 July 13, 2009

CLUB FILIPINO, INC. and ATTY. ROBERTO F. DE LEON, Petitioners, vs. BENJAMIN
BAUTISTA, RONIE SUALOG, JOEL CALIDA, JOHNNY ARINTO AND ROBERTO DE
GUZMAN, Respondents.

FACTS: Petitioner Club Filipino, Inc. is a non-stock, non profit corporation duly formed,
organized and existing under Philippine laws, with petitioner Atty. Roberto F. de Leon as its
president. Respondents Ronnie Sualog, Joel Calida, Johnny Arinto and Roberto de Guzman, on
the other hand, were former officers and members of the Club Filipino Employees Association.
The union and the company had a CBA which expired on May 31, 2000. Prior to the expiration
of the CBA and within the freedom period, the union made several demands for negotiation. No
negotiations, however, took place for various reasons proffered by the company, among them
the illness of the chairman of the management panel. The union then filed a notice of strike on
the grounds of bargaining deadlock and failure to bargain. The company formally responded to
the demands of the union when it submitted the first part of its economic counter-proposal; the
second part was submitted on May 11, 2001. Meanwhile, on May 4, 2001, the union conducted
a strike vote under the supervision of the DOLE. In response to the company’s counter-
proposal, the union sent the company its improved proposal, but the company refused to
improve on its offer. This prompted the union to stage a strike on May 26, 2001 on the ground of
a CBA bargaining deadlock. The company then filed a petition to declare the strike illegal.

ISSUE: whether or not the strike staged by respondents was legal?

HELD: Rule XXII, Section 4 of the Omnibus Rules Implementing the Labor Code states: In
cases of bargaining deadlocks, the notice shall, as far as practicable, further state the
unresolved issues in the bargaining negotiations and be accompanied by the written proposals
of the union, the counter-proposals of the employer and the proof of a request for conference to
settle differences. In cases of unfair labor practices, the notice shall, as far as practicable, state
the acts complained of, and efforts taken to resolve the dispute amicably. In the instant case,
the union cannot be faulted for its omission of not attaching the counter-proposal of the
company in the notice of strike it submitted to the NCMB as there was no such counter-
proposal. To recall, the union filed a notice of strike on April 6, 2001 after several requests to
start negotiations but it was only on April 22, 2001 when the company formally responded to the
union by submitting the first part of its counter-proposal. Worse, it took the company another 3
weeks to complete it by submitting on May 11, 2001 the second part of its counter-proposal.
The Implementing Rules use the words "as far as practicable." In this case, attaching the
counter-proposal of the company to the notice of strike of the union was not practicable. Indeed,
compliance with the requirement was impossible because no counter-proposal existed at the
time the union filed a notice of strike. The law does not exact compliance with the impossible.
Nemo tenetur ad impossibile.

Moreover, it is hornbook doctrine that a mere finding of the illegality of the strike should not be
automatically followed by the wholesale dismissal of the strikers from employment. The law is
clear: Any union officer who knowingly participates in an illegal strike and any worker or union
officer who knowingly participates in the commission of illegal acts during a strike may be
declared to have lost his employment status. Note that the verb "participates" is preceded by the
adverb "knowingly." This reflects the intent of the legislature to require "knowledge" as a
condition sine qua non before a union officer can be dismissed from employment for
participating in an illegal strike. The provision is worded in such a way as to make it very difficult
for employers to circumvent the law by arbitrarily dismissing employees in the guise of
exercising management prerogative. This is but one aspect of the State’s constitutional and
statutory mandate to protect the rights of employees to self-organization.

G.R. No. 177594 July 23, 2009

UNIVERSITY OF SAN AGUSTIN, INC. Petitioners, vs. UNIVERSITY OF SAN AGUSTIN
EMPLOYEES UNION- FFW, Respondent.

FACTS: Petitioner forged with the University of San Agustin Employees Union-FFW a CBA
effective for 5 years. Among other things, the parties agreed to include a provision on salary
increases based on the incremental tuition fee increases or tuition incremental proceeds (TIP)
and pursuant to Republic Act No. 6728, The Tuition Fee Law. It appears that for the School
Year 2001-2002, the parties disagreed on the computation of the salary increases. Respondent
refused to accept petitioner’s proposed across-the-board salary increase of P1,500 per month
and its subtraction from the computation of the TIP of the scholarships and tuition fee discounts
it grants to deserving students and its employees and their dependents. Respondent likewise
rejected petitioner’s interpretation of the term "salary increases" as referring not only to the
increase in salary but also to corresponding increases in other benefits. Respondent argued that
the provision in question referred to "salary increases" alone, hence, the phrase "P1,500.00 or
80% of the TIP, whichever is higher," should apply only to salary increases and should not
include the other increases in benefits received by employees.
Resort to the existing grievance machinery having failed, the parties agreed to submit the case
to voluntary arbitration.

ISSUE: Whether or not the salary increase of P1500 or 80% of the TIP is correct?

HELD: Sec. 3, Art. VIII of the 2000-20005 CBA reads: “Salary Increases. The following shall be
the increases under this Agreement:
SY 2000-2001 – P2,000.00 per month, across the board.
SY 2001-2002 – P1,500.00 per month or 80% of the TIP, whichever is higher, across the
board.
SY 2002-2003 – P1,500.00 per month or 80% of the TIP, whichever is higher, across the
board. (Emphasis supplied)
It is a familiar and fundamental doctrine in labor law that the CBA is the law between the parties
and they are obliged to comply with its provisions. If the terms of a contract, in this case the
CBA, are clear and leave no doubt upon the intention of the contracting parties, the literal
meaning of their stipulations shall control. A reading of the above-quoted provision of the CBA
shows that the parties agreed that 80% of the TIP or at the least the amount of P1,500 is to be
allocated for individual salary increases. The CBA does not speak of any other benefits or
increases which would be covered by the employees’ share in the TIP, except salary increases.
The CBA reflects the incorporation of different provisions to cover other benefits such as
Christmas bonus (Art. VIII, Sec. 1), service award (Art. VIII, Sec.5), leaves (Article IX),
educational benefits (Sec.2, Art. X), medical and hospitalization benefits (Secs. 3, 4 and 5, Art.
10), bereavement assistance (Sec. 6, Art. X), and signing bonus (Sec. 8, Art. VIII), without
mentioning that these will likewise be sourced from the TIP. Thus, petitioner’s belated claim that
the 80% TIP should be taken to mean as covering ALL increases and not merely the salary
increases as categorically stated in Sec. 3, Art. VIII of the CBA does not lie. In the present case,
petitioner could have, during the CBA negotiations, opposed the inclusion of or renegotiated the
provision allotting 80% of the TIP to salary increases alone, as it was and is not under any
obligation to accept respondent’s demands hook, line and sinker. Art. 252 of the Labor Code is
clear on the matter: The duty to bargain collectively means the performance of a mutual
obligation to meet and convene promptly and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours, of work and all other terms and
conditions of employment including proposals for adjusting any grievances or questions arising
under such agreement and executing a contract incorporating such agreements if requested by
either party but such duty does not compel any party to agree to a proposal or to make any
concession. The records are thus bereft of any showing that petitioner had made it clear during
the CBA negotiations that it intended to source not only the salary increases but also the
increases in other employee benefits from the 80% of the TIP. Absent any proof that petitioner’s
consent was vitiated by fraud, mistake or duress, it is presumed that it entered into the CBA
voluntarily, had full knowledge of the contents thereof, and was aware of its commitments under
the contract. Even a perusal of the law will show that it does not make 70% as the mandated
ceiling. Unmistakably, what the law sets is the minimum, not the maximum percentage, and
there is even a 10% portion the disposition of which the law does not regulate. Hence, if
academic institutions wish to allot a higher percentage for salary increases and other benefits,
nothing in the law prohibits them from doing so.

G.R. No. 181531 July 31, 2009

NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED
INDUSTRIES- MANILA PAVILION HOTEL CHAPTER (NUWHRAIN-MPHC), Petitioner, vs.
SECRETARY OF LABOR AND EMPLOYMENT, BUREAU OF LABOR RELATIONS,
HOLIDAY INN MANILA PAVILION HOTEL LABOR UNION (HIMPHLU) AND ACESITE
PHILIPPINES HOTEL CORPORATION, Respondents.

FACTS: A certification election was conducted among the rank-and-file employees of

respondent Holiday Inn Manila Pavilion Hotel. In view of the significant number of segregated
votes, NUHWHRAIN-MPHC and HIMPHLU, referred the case back to Med-Arbiter Ma.
Simonette Calabocal to decide which among those votes would be opened and tallied. 11 votes
were initially segregated because they were cast by dismissed employees, albeit the legality of
their dismissal was still pending before the CA. 6 other votes were segregated because the
employees who cast them were already occupying supervisory positions at the time of the
election. Still 5 other votes were segregated on the ground that they were cast by probationary
employees and, pursuant to the existing CBA, such employees cannot vote.
ISSUES: Whether employees on probationary status at the time of the certification elections
should be allowed to vote? Whether HIMPHLU was able to obtain the required majority for it to
be certified as the exclusive bargaining agent?

HELD: In a certification election, all rank and file employees in the appropriate bargaining unit,
whether probationary or permanent are entitled to vote. Collective bargaining covers all aspects
of the employment relation and the resultant CBA negotiated by the certified union binds all
employees in the bargaining unit. Hence, all rank and file employees, probationary or
permanent, have a substantial interest in the selection of the bargaining representative. The
Code makes no distinction as to their employment status as basis for eligibility in supporting the
petition for certification election. The law refers to "all" the employees in the bargaining unit. All
they need to be eligible to support the petition is to belong to the "bargaining unit."

It bears reiteration that the true importance of ascertaining the number of valid votes cast is for it
to serve as basis for computing the required majority, and not just to determine which union won
the elections. Prescinding from the Court’s ruling that all the probationary employees’ votes
should be deemed valid votes while that of the supervisory employees should be excluded, it
follows that the number of valid votes cast would increase – from 321 to 337. Under Art. 256 of
the Labor Code, the union obtaining the majority of the valid votes cast by the eligible voters
shall be certified as the sole and exclusive bargaining agent of all the workers in the appropriate
bargaining unit. This majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least 170.
HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not able to
obtain a majority vote. Having declared that no choice in the certification election conducted
obtained the required majority, it follows that a run-off election must be held to determine which
between HIMPHLU and petitioner should represent the rank-and-file employees.

WHEREFORE, the petition is GRANTED.

G.R. No. 162355

STA. LUCIA EAST COMMERCIAL CORP., petitioner, vs. HON. SECRETARY OF LABOR
AND EMPLOYMENT and STA. LUCIA EAST COMMERCIAL CORP. WORKERS
ASSOCIATION, respondent.

FACTS: Confederated Labor Union of the Philippines (CLUP), in behalf of its chartered
local, instituted a petition for certification election among the regular rank-and-file
employees of Sta. Lucia East Commercial Corp. and its Affiliates. Med-Arbiter Bactin
ordered the dismissal of the petition due to inappropriateness of the bargaining unit.
CLUP-SLECC and its Affiliates Workers Union then reorganized itself and re-registered
as CLUP-Sta. Lucia East Commercial Corporation Workers Association (CLUP-
SLECCWA), limiting its membership to the rank-and-file employees of Sta. Lucia East
Commercial Corporation. CLUP-SLECCWA then filed the instant petition. It alleged that
SLECC employs about 115 employees and that more than 20% of employees belonging
to the rank-and-file category are its members. CLUP-SLECCWA claimed that no
certification election has been held among them within the last 12 months prior to the
filing of the petition, and while there is another union registered covering the same
employees, namely SMSLEC, it has not been recognized as the exclusive bargaining
agent of SLECC’s employees. Subsequently, SLECC filed a motion to dismiss the
petition. It averred that it has voluntarily recognized SMSLEC as the exclusive
bargaining agent of its regular rank-and-file employees, and that collective bargaining
negotiations already commenced between them. Then a CBA between SMSLEC and
SLECC was ratified by its rank-and-file employees and registered with DOLE.
ISSUE: Whether or not certification election must be conducted in the SLECC?

HELD: Article 212(g) of the Labor Code defines a labor organization as “any union or
association of employees which exists in whole or in part for the purpose of collective
bargaining or of dealing with employers concerning terms and conditions of
employment.” Upon compliance with all the documentary requirements, the Regional
Office or Bureau shall issue in favor of the applicant labor organization a certificate
indicating that it is included in the roster of legitimate labor organizations. Any applicant
labor organization shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the
certificate of registration. The concepts of a union and of a legitimate labor organization
are different from, but related to, the concept of a bargaining unit. A bargaining unit is a
“group of employees of a given employer, comprised of all or less than all of the entire
body of employees, consistent with equity to the employer, indicated to be the best
suited to serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law.” However, employees in two corporations cannot be
treated as a single bargaining unit even if the businesses of the two corporations are
related. The inclusion in the union of disqualified employees is not among the grounds
for cancellation of registration, unless such inclusion is due to misrepresentation, false
statement or fraud under the circumstances enumerated in Sections (a) to (c) of Article
239 of the Labor Code.1[10] Thus, CLUP-SLECC and its affiliates workers union, having
been validly issued a certificate of registration, should be considered as having acquired
juridical personality which may not be attacked collaterally. The proper procedure for
SLECC is to file a petition for cancellation of certificate of registration of CLUP-SLECC
and its affiliates’ workers union and not to immediately commence voluntary recognition
proceedings with SMSLEC.

WHEREFORE, petition is denied.

G.R. No. 166879

A. SORIANO AVIATION, petitioner, vs. EMPLOYEES ASSOCIATION OF A. SORIANO
AVIATION, JULIUS S. VARGAS, IN HIS CAPACITY AS UNION PRESIDENT, REYNALDO
ESPERO, JOSEFINO ESPINO, GALMIER BALISBIS, GERARDO BUNGABONG,
LAURENTE BAYLON, JEFFREY NERI, ARTURO INES, REYNALDO BERRY, RODOLFO
RAMOS, OSWARD ESPION, ALBERT AGUILA, RAYMONG BARCO, REYNANTE AMIMITA,
SONNY BAWASANTA, MARNIMUAN AND RAMIR LICUANAN, respondent.

FACTS: A. Soriano Aviation and Employees Association of A. Soriano Aviation entered into a
CBA effective January 1, 1997 up to December 31, 1999. The CBA included a “No-Strike, No-
Lock-out” clause. On May 1 & 12, and June 12, 1997, which were legal holidays and peak
season for the company, eight mechanics-members of respondent Union, its herein co-
respondents refused to render overtime work. Petitioner treated the refusal to work as a
concerted action which is a violation of the “No-Strike, No-Lockout” clause in the CBA. It thus
meted the workers a 30-day suspension. It also filed a complaint for illegal strike against them
which was later dismissed at its instance in order to give way to settlement, without prejudice to
its re-filing should settlement be unavailing. As despite conciliation no amicable settlement of
the dispute was arrived at, the Union went on strike.

1
ISSUE: whether the strike staged by respondents is illegal due to the alleged commission of
illegal acts and violation of the “No Strike-No Lockout” clause of the CBA? whether individual
respondents are deemed to have lost their employment status on account thereof?

HELD: The first strike or the mechanics’ refusal to work on 3 consecutive holidays was
prompted by their disagreement with the management-imposed new work schedule. Having
been grounded on a non-strikeable issue and without complying with the procedural
requirements, then the same is a violation of the “No Strike-No Lockout Policy” in the existing
CBA. Respecting the second strike, where the Union complied with procedural requirements,
the same was not a violation of the “No Strike- No Lockout” provisions, as a “No Strike-No
Lockout” provision in the CBA is a valid stipulation but may be invoked only by employer when
the strike is economic in nature or one which is conducted to force wage or other concessions
from the employer that are not mandated to be granted by the law. It would be inapplicable to
prevent a strike which is grounded on unfair labor practice. In the present case, the Union
believed in good faith that petitioner committed unfair labor practice when it went on strike on
account of the 30-day suspension meted to the striking mechanics, dismissal of a union officer
and perceived union-busting, among others. Be that as it may, the Court holds that the second
strike became invalid due to the commission of illegal action in its course. It is hornbook
principle that the exercise of the right of private sector employees to strike is not absolute.
Indeed, even if the purpose of a strike is valid, the strike may still be held illegal where the
means employed are illegal. Among such limits are the prohibited activities under Article 264 (e)
of the Labor Code which states that no person engaged in picketing shall: a.) commit any act of
violence, coercion, or intimidation; b.) obstruct the free ingress to or egress from the employer's
premises for lawful purposes; or c.) obstruct public thoroughfares. The Union members’
repeated name-calling, harassment and threats of bodily harm directed against company
officers and non-striking employees and, more significantly, the putting up of placards, banners
and streamers with vulgar statements imputing criminal negligence to the company, which put to
doubt reliability of its operations, come within the purview of illegal acts under Art. 264 and
jurisprudence.

As to the issue of loss of employment of those who participated in the illegal strike, the liability
for prohibited acts has thus to be determined on an individual basis.

WHEREFORE, the petition is GRANTED.

G.R. No. 164205 September 3, 2009

OLDARICO S. TRAVEÑO, ROVEL A. GENELSA, RUEL U. VILLARMENTE, ALFREDO A.
PANILAGAO, CARMEN P. DANILA, ELIZABETH B. MACALINO, RAMIL P. ALBITO,
REYNALDO A. LADRILLO, LUCAS G. TAMAYO, DIOSDADO A. AMORIN, RODINO C.
VASQUEZ, GLORIA A. FELICANO, NOLE E. FERMILAN, JOSELITO B. RENDON,
CRISTETA D. CAÑA, EVELYN D. ARCENAL and JEORGE M. NONO, Petitioners, vs.
BOBONGON BANANA GROWERS MULTI-PURPOSE COOPERATIVE, TIMOG
AGRICULTURAL CORPORATION, DIAMOND FARMS, INC., and DOLE ASIA PHILIPPINES,
Respondents.

FACTS: in 1992, respondent Timog Agricultural Corporation (TACOR) and respondent Diamond
Farms, Inc. (DFI) hired Oldarico Traveño and 16 others to work at a banana plantation which
covered lands previously planted with rice and corn but whose owners had agreed to convert
into a banana plantation upon being convinced that TACOR and DFI could provide the needed
capital, expertise, and equipment. Petitioners helped prepare the lands for the planting of
banana suckers and eventually carried out the planting as well. Petitioners asseverated that
while they worked under the direct control of supervisors assigned by TACOR and DFI, these
companies used different schemes to make it appear that petitioners were hired through
independent contractors, including individuals, unregistered associations, and cooperatives; that
the successive changes in the names of their employers notwithstanding, they continued to
perform the same work under the direct control of TACOR and DFI supervisors; and that under
the last scheme adopted by these companies, the nominal individual contractors were required
to, as they did, join a cooperative and thus became members of respondent Bobongon Banana
Growers Multi-purpose Cooperative. Sometime in 2000, above-named respondents began
utilizing harassment tactics to ease them out of their jobs. Without first seeking the approval of
the DOLE, they changed their compensation package from being based on a daily rate to a
pakyawan rate that depended on the combined productivity of the "gangs" they had been
grouped into. Soon thereafter, they stopped paying their salaries, prompting them to stop
working. Three separate complaints for illegal dismissal were filed by petitioners, individually
and collectively, with the NLRC against said respondents including respondent Dole Asia
Philippines as it then supposedly owned TACOR, for unpaid salaries, overtime pay, 13th month
pay, service incentive leave pay, damages, and attorney’s fees.

ISSUE: whether DFI and DPI should be held solidarily liable with the Cooperative for petitioners’
illegal dismissal and money claims?

HELD: Job contracting or subcontracting refers to an arrangement whereby a principal agrees

to farm out with a contractor or subcontractor the performance of a specific job, work or service
within a definite or predetermined period, regardless whether such job, work or service is to be
performed or completed within or outside the premises of the principal. The present case does
not involve such an arrangement. DFI did not farm out to the Cooperative the performance of a
specific job, work, or service. Instead, it entered into a Banana Production and Purchase
Agreement with the Cooperative, under which the Cooperative would handle and fund the
production of bananas and operation of the plantation covering lands owned by its members in
consideration of DFI’s commitment to provide financial and technical assistance as needed,
including the supply of information and equipment in growing, packing, and shipping bananas.
The Cooperative would hire its own workers and pay their wages and benefits, and sell
exclusively to DFI all export quality bananas produced that meet the specifications agreed upon.
To the Court, the Contract between the Cooperative and DFI, far from being a job contracting
arrangement, is in essence a business partnership that partakes of the nature of a joint venture.
The rules on job contracting are, therefore, inapposite. Petitioners’ claim of employment
relationship with the Cooperative’s herein co-respondents must be assessed on the basis of
four standards, viz: (a) the manner of their selection and engagement; (b) the mode of payment
of their wages; (c) the presence or absence of the power of dismissal; and (d) the presence or
absence of control over their conduct. Most determinative among these factors is the so-called
"control test." There is nothing in the records which indicates the presence of any of the
foregoing elements of an employer-employee relationship. There being no employer-employee
relationship between petitioners and the Cooperative’s co-respondents, the latter are not
solidarily liable with the Cooperative for petitioners’ illegal dismissal and money claims.

WHEREFORE, the petition is DISMISSED.

G.R. No. 169940 September 14, 2009

UNIVERSITY OF SANTO TOMAS, Petitioner, vs. SAMAHANG MANGGAGAWA NG UST
(SM-UST), Respondent.
FACTS: The parties were negotiating on the CBA for academic years 2001 through 2006 and
the problem arose from the economic provisions of the CBA Proposals for the AY 2001-2002. It
has been determined that from the tuition fees for the AY in question, petitioner earned an
increment of P101,036,330.37. Under R.A. 6728, 70% of that amount or P68,775,831.15 should
be allotted for payment of salaries, wages, allowances and other benefits of teaching and non-
teaching personnel except administrators who are principal stockholders of the school. Of the
amount P68,775,831.15, an aggregate of P15,475,000.00 or 22.5 % was allocated to the
university’s non-teaching or non-academic personnel while the amount of P45 million or 65.43%
was allocated to the teaching personnel. After distribution of the respective shares of the
teaching and non-teaching personnel, there remained a balance of P300,831.00. In addition to
the salary increase, signing and Christmas bonuses, the Court of Appeals also extended to
respondent’s members fringe benefits for AY 2001-2002 amounting to P28,837,780.00, which
benefits petitioner has been giving its non-teaching employees in the past, and which are
included in the DOLE Secretary’s. These fringe benefits would have to be obtained from
sources other than the incremental tuition fee proceeds of P68,775,831.15, since only
P15,475,000.00 thereof was set aside for the non-teaching personnel; the rest was allocated to
the teaching personnel. Moreover, appellate court granted an increase in the signing bonus
from the DOLE Secretary’s award of P10,000.00, to P18,000.00.

ISSUE: (1) Whether respondent’s members’ individual acceptance of the award and the
resulting payments made by petitioner operate as a ratification of the DOLE Secretary’s award
which renders the case moot? (2) Whether it is unlawful for the Court of Appeals to have
required it to source the award of fringe benefits from the school’s other income since R.A. 6728
does not compel schools to allocate more than 70% of the incremental tuition fee increase for
the salaries and benefits of its employees? (3) Whether the Court of Appeal’s award of
additional signing bonus is proper?

HELD: (1) The Court found that such do not operate as a ratification of the DOLE Secretary’s
award; nor a waiver of their right to receive further benefits, or what they may be entitled to
under the law. Respondent’s members were merely constrained to accept payment at the time.
Christmas was then just around the corner, and the union members were in no position to resist
the temptation to accept much-needed cash for use during the most auspicious occasion of the
year. Time and again, it was held that necessitous men are not, truly speaking, free men; but to
answer a present emergency, will submit to any terms that the crafty may impose upon them.
Besides, as individual components of a union possessed of a distinct and separate corporate
personality, respondent’s members should realize that in joining the organization, they have
surrendered a portion of their individual freedom for the benefit of all the other members; they
submit to the will of the majority of the members in order that they may derive the advantages to
be gained from the concerted action of all. Since the will of the members is personified by its
board of directors or trustees, the decisions it makes should accordingly bind them. Precisely, a
labor union exists in whole or in part for the purpose of collective bargaining or of dealing with
employers concerning terms and conditions of employment. What the individual employee may
not do alone, as for example obtain more favorable terms and conditions of work, the labor
organization, through persuasive and coercive power gained as a group, can accomplish better.

(2) Fringe benefits are included in the DOLE Secretary’s award and being so, it cannot now
argue otherwise. Since it abides by the DOLE Secretary’s award, which it finds "fair and
equitable," it must raise the said amount through sources other than incremental tuition fee
proceeds.
(3) The Court found the award to be unwarranted under the circumstances. A signing bonus is a
grant motivated by the goodwill generated when a CBA is successfully negotiated and signed
between the employer and the union. In the instant case, no CBA was successfully negotiated
by the parties. It is only because petitioner prays for the Court to affirm in toto the DOLE
Secretary’s Order that it shall allow an award of signing bonus. There would have been no other
basis to grant it if petitioner had not so prayed. We shall take it as a manifestation of petitioner’s
liberality, which it cannot now allow to withdraw. A bonus is a gratuity or act of liberality of the
giver. When petitioner filed the instant petition seeking the affirmance of the DOLE Secretary’s
Order in its entirety, assailing only the increased amount of the signing bonus awarded, it is
considered to have unqualifiedly agreed to grant the original award to the respondent union’s
members.

WHEREFORE, the petition is PARTIALLY GRANTED.

G.R. Nos. 178034 & 178117; G.R. Nos. 186984-85 September 18, 2009
ANDREW JAMES MCBURNIE, Petitioner, vs. EULALIO GANZON, EGI-MANAGERS, INC.
and E. GANZON, INC., Respondents.
FACTS: Petitioner Andrew James McBurnie, an Australian national, signed a five-year
employment contract as Executive Vice-President of respondent EGI Manager’s, Inc., through
its President respondent Eulalio Ganzon. McBurnie’s responsibilities were to oversee the
general management of the company’s hotels and resorts within the Philippines, supervise the
present and future constructions of its hotel and resort properties; review the operational
performance of the hotels and resorts; and make recommendations to improve profitability,
efficiency and reputation, and to engage other hotel management groups, if necessary.
Petitioner featured in an accident that fractured his skull and necessitated his confinement at the
Makati Medical Center. While recuperating from his injuries in Australia, petitioner was informed
by respondent Ganzon that his services were no longer needed since the project had been
permanently discontinued. Thus, petitioner filed a complaint for illegal dismissal with prayer for
the payment of his salary and benefits for the unexpired term of the contract, damages and
attorney’s fees. Labor Arbiter rendered a decision declaring petitioner’s dismissal illegal and
ordering respondents to pay the salary and benefits for the unexpired term of the contract. 10
days after receipt of the Labor Arbiter’s decision, respondents filed before the NLRC a
Memorandum of Appeal and Motion to Reduce Bond, and posted the amount of the bond. The
NLRC denied the motion to reduce bond and ordered respondents to post an additional bond.
Instead of complying with the order of the NLRC, respondents filed a petition for certiorari and
prohibition with the CA. A TRO effective for 60 days was issued enjoining the NLRC from
enforcing its Orders.

ISSUE: Whether or not the rules on perfection of appeal must be strictly complied?

HELD: Article 223 of the Labor Code provides that: Decisions, awards, or orders of the Labor
Arbiter are final and executory unless appealed to the Commission by any or both parties within
ten (10) calendar days from receipt of such decisions, awards, or orders. x x x In case of a
judgment involving a monetary award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable bonding company duly accredited by
the Commission in the amount equivalent to the monetary award in the judgment appealed
from. The posting of a bond is indispensable to the perfection of an appeal in cases involving
monetary awards from the decision of the Labor Arbiter. The lawmakers clearly intended to
make the bond a mandatory requisite for the perfection of an appeal by the employer as inferred
from the provision that an appeal by the employer may be perfected "only upon the posting of a
cash or surety bond." The filing of the bond is not only mandatory but a jurisdictional
requirement as well, that must be complied with in order to confer jurisdiction upon the NLRC.
Non-compliance therewith renders the decision of the Labor Arbiter final and executory. The
jurisdictional principle and the mandatory nature of the appeal bond posted within the 10-day
reglementary period are reaffirmed by the New Rules of Procedure of the NLRC. Thus, it
behooves the Court to give utmost regard to the legislative and administrative intent to strictly
require the employer to post a cash or surety bond securing the full amount of the monetary
award within the 10 day reglementary period. Nothing in the Labor Code or the NLRC Rules of
Procedure authorizes the posting of a bond that is less than the monetary award in the
judgment, or would deem such insufficient posting as sufficient to perfect the appeal. The failure
of the respondents to comply with the requirement of posting a bond equivalent in amount to the
monetary award is fatal to their appeal. For filing their motion only on the final day within which
to perfect an appeal, respondents cannot be allowed to seek refuge in a liberal application of the
rules. Under such circumstance, there is neither way for the NLRC to exercise its discretion to
grant or deny the motion, nor for the respondents to post the full amount of the bond, without
risk of summary dismissal for non-perfection of appeal.
WHEREFORE, the petition is GRANTED.

G.R. No. 172013 October 2, 2009

PATRICIA HALAGUEÑA, MA. ANGELITA L. PULIDO, MA. TERESITA P. SANTIAGO,
MARIANNE V. KATINDIG, BERNADETTE A. CABALQUINTO, LORNA B. TUGAS, MARY
CHRISTINE A. VILLARETE, CYNTHIA A. STEHMEIER, ROSE ANNA G. VICTA, NOEMI R.
CRESENCIO, and other flight attendants of PHILIPPINE AIRLINES, Petitioners, vs.
PHILIPPINE AIRLINES INCORPORATED, Respondent.

FACTS: Petitioners were employed as female flight attendants of respondent PAL on different
dates prior to November 22, 1996. They are members of the Flight Attendants and Stewards
Association of the Philippines (FASAP), a labor organization certified as the sole and exclusive
certified as the sole and exclusive bargaining representative of the flight attendants, flight
stewards and pursers of respondent. Respondent and FASAP then entered into a CBA
incorporating the terms and conditions of their agreement for the years 2000 to 2005. Section
144, Part A of the PAL-FASAP CBA, provides that: “A. For the Cabin Attendants hired before 22
November 1996: x x x x 3. Compulsory Retirement - Subject to the grooming standards
provisions of this Agreement, compulsory retirement shall be fifty-five (55) for females and sixty
(60) for males. x x x.” Petitioners filed a Special Civil Action for Declaratory Relief with Prayer for
the Issuance of Temporary Restraining Order and Writ of Preliminary Injunction with the RTC of
Makati City, Branch 147 against respondent for the invalidity of Section 144, Part A of the PAL-
FASAP CBA.

ISSUE: Whether the RTC has jurisdiction over the petitioners' action challenging the legality or
constitutionality of the provisions on the compulsory retirement age contained in the CBA
between respondent PAL and FASAP? Whether Section 144, Part A of the PAL-FASAP CBA is
unlawful and unconstitutional?

HELD: The Court held that the jurisdiction of labor arbiters and the NLRC under Article 217 of
the Labor Code is limited to disputes arising from an employer-employee relationship which can
only be resolved by reference to the Labor Code, other labor statutes, or their CBA. Here, the
employer-employee relationship between the parties is merely incidental and the cause of
action ultimately arose from different sources of obligation, i.e., the Constitution and CEDAW.
Thus, where the principal relief sought is to be resolved not by reference to the Labor Code or
other labor relations statute or a CBA but by the general civil law, the jurisdiction over the
dispute belongs to the regular courts of justice and not to the labor arbiter and the NLRC. This
Court held that the grievance machinery and voluntary arbitrators do not have the power to
determine and settle the issues at hand. They have no jurisdiction and competence to decide
constitutional issues relative to the questioned compulsory retirement age. Hence, only disputes
involving the union and the company shall be referred to the grievance machinery or voluntary
arbitrators. In the case at bar, the dispute is not between FASAP and respondent PAL, who
have both previously agreed upon the provision on the compulsory retirement of female flight
attendants as embodied in the CBA. The dispute is between respondent PAL and several
female flight attendants who questioned the provision on compulsory retirement of female flight
attendants. Thus, referral to the grievance machinery and voluntary arbitration would not serve
the interest of the petitioners.

The rule is settled that pure questions of fact may not be the proper subject of an appeal by
certiorari. This mode of appeal is generally limited only to questions of law which must be
distinctly set forth in the petition. The Supreme Court is not a trier of facts. The question as to
whether Section 114, Part A of the PAL-FASAP CBA is discriminatory or not being a question of
fact that would require a full-blown trial which jurisdiction to hear the same is properly lodged
with the the RTC, is therefore, remanded to the RTC for the proper determination of the merits
of the petition for declaratory relief is just and proper.

WHEREFORE, the petition is PARTLY GRANTED.

G.R. No. 143088 January 24, 2006

PHILIPPINE AIRLINES, INC., MANOLO AQUINO, JORGE MA. CUI, JR. and PATRICIA
CHIONG, Petitioners, vs. FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF THE
PHILIPPINES (FASAP) and LEONARDO BHAGWANI, Respondents.

FACTS: Respondent FASAP and Leonardo Bhagwani filed a complaint for unfair labor practice,
illegal suspension and illegal dismissal against petitioners before the Labor Arbiter of the NLRC.
The Labor Arbiter rendered a decision holding that PAL committed unfair labor practice and
illegal dismissal of Bhagwani and, consequently, ordered the payment of damages. The NLRC
later modified the decision of the Labotr Arbiter. Subsequently, Petitioners appealed to the CA.
When petitioners filed a petition for certiorari, it was accompanied by a Certification of Non-
Forum Shopping executed by Cesar R. Lamberte and Susan Del Carmen. The certification,
however, was without proof that the two affiants had authority to sign in behalf of petitioners. As
a result, the CA dismissed the case for failure to show the authority of affiants to sign for PAL
and for failure of the other petitioners to join in the execution of the certification. A motion for
reconsideration was filed with a Secretary’s Certificate attached evidencing that affiants Cesar
R. Lamberte and Susan Del Carmen have been authorized by Board of Directors. Despite this
submission, the CA denied the motion for reconsideration. Hence, this petition.

ISSUE: Whether or not CA is correct in dismissing the case due to non-compliance with the
attachment of certificate of non-forum shopping?

HELD: A certification of non-forum shopping is necessary in filing petitions for certiorari under
the Rules of Court. It further requires it to be executed by the corresponding petitioner or
petitioners. As no distinction is made as to which party must execute the certificate, this
requirement is made to apply to both natural and juridical entities. When the petitioner is a
corporation, the certification should be executed by a natural person. Furthermore, not just any
person can be called upon to execute the certification, although such a person may have
personal knowledge of the facts to be attested to. Thus, only individuals vested with authority by
a valid board resolution may sign the certificate of non-forum shopping in behalf of a
corporation. In addition, the Court has required that proof of said authority must be attached.
Failure to provide a certificate of non-forum shopping is sufficient ground to dismiss the petition.
Likewise, the petition is subject to dismissal if a certification was submitted unaccompanied by
proof of the signatory’s authority. The required certification of non-forum shopping must be valid
at the time of filing of the petition. An invalid certificate cannot be remedied by the subsequent
submission of a Secretary’s Certificate that vests authority only after the petition had been filed.

WHEREFORE, the petition is DENIED.

G.R. No. 171587 October 13, 2009

EASTERN SHIPPING LINES, INC., Petitioner, vs. FERRER D. ANTONIO, Respondent.

FACTS: Respondent was hired by petitioner to work as a seaman on board its various vessels.
Respondent started as an Apprentice Engineer on December 12, 1981 and worked in
petitioner's various vessels where he was assigned to different positions. The last position he
held was that of 3rd Engineer on board petitioner's vessel M/V Eastern Venus, where he worked
until February 22, 1996. On February 13, 1996, while in Yokohama, Japan and still in the
employ of petitioner, he suffered a fractured left transverse process of the fourth lumbar
vertebra. He consulted a doctor in Osaka, Japan and was advised to rest for a month. He was
later examined by the company doctor and declared fit to resume work. However, he was not
admitted back to work. Being in dire financial need at that time to support his family, he applied
for an optional retirement on January 16, 1997 but was disapproved by the petitioner.
Consequently, respondent filed a complaint for payment of optional retirement benefits against
petitioner before the DOLE.

ISSUE: Whether respondent shall be granted the optional retirement benefit being applied for
under the gratuity plan of petitioner?

HELD: The age of retirement is primarily determined by the existing agreement or employment
contract. In the absence of such agreement, the retirement age shall be fixed by law. Under the
Labor Code, the mandated compulsory retirement age is set at 65 years, while the minimum
age for optional retirement is set at 60 years. In the case at bar, there is a retirement gratuity
plan between the petitioner and the respondent. Under Paragraph B of the plan, a shipboard
employee, upon his written request, may retire from service if he has reached the eligibility age
of 60 years. While under Paragraph C, it will be the exclusive prerogative and sole option of the
company to retire any covered employee who shall have rendered at least 15 years of credited
service for land-based employees and 3,650 days actually on board vessel for shipboard
personnel. Records show that respondent was only 41 years old when he applied for optional
retirement, which was 19 years short of the required eligibility age. Thus, he cannot claim either
of the optional retirement benefits under the plan as a matter of right.

It is also worth to note that respondent, being a seaman, is not entitled to the payment of
separation pay. It is clear that seafarers are considered contractual employees. Thus, they are
not entitled to reinstatement or payment of separation pay or backwages. However, the Court
held that financial assistance may be allowed as a measure of social justice and exceptional
circumstances, and as an equitable concession. In the present case, for having been deprived
of continued employment with petitioner's vessel, respondent opted to apply for optional
retirement. Records also show that respondent's seaman's book, as duly noted and signed by
the captain of the vessel was marked "Very Good," and "recommended for hire." Respondent
had no derogatory record on file over his long years of service with the petitioner. Thus, ends of
social and compassionate justice would be served best if respondent will be given some
equitable relief. The award of P100,000.00 to respondent as financial assistance is , therefore,
deemed equitable under the circumstances.

WHEREFORE, the petition is GRANTED.

G.R. No. 182836 October 13, 2009

CONTINENTAL STEEL MANUFACTURING CORPORATION, Petitioner, vs. HON.
ACCREDITED VOLUNTARY ARBITRATOR ALLAN S. MONTAÑO and NAGKAKAISANG
MANGGAGAWA NG CENTRO STEEL CORPORATION-SOLIDARITY OF UNIONS IN THE
PHILIPPINES FOR EMPOWERMENT AND REFORMS (NMCSC-SUPER), Respondents.

FACTS: Hortillano, an employee of petitioner Continental Steel and a member of respondent

Union filed on 9 January 2006, a claim for Paternity Leave, Bereavement Leave and Death and
Accident Insurance for dependent, pursuant to the CBA concluded between Continental and the
Union. The claim was based on the death of Hortillano’s unborn child. Hortillano’s wife had a
premature delivery while she was in the 38th week of pregnancy. According to the Certificate of
Fetal Death, the female fetus died during labor due to fetal Anoxia secondary to uteroplacental
insufficiency. Continental Steel immediately granted Hortillano’s claim for paternity leave but
denied his claims for bereavement leave and other death benefits, consisting of the death and
accident insurance.

ISSUE: Whether or not the CBA is clear and unambiguous so that the literal and legal meaning
of death should be applied such that only one with juridical personality can die and a dead fetus
never acquired a juridical personality?

HELD: As identified, the elements for bereavement leave under Article X, Section 2 of the CBA
are: (1) death; (2) the death must be of a dependent; and (3) legitimate relations of the
dependent to the employee. The requisites for death and accident insurance under Article XVIII,
Section 4(3) of the CBA are same with the above elements with additional element of
presentation of the proper legal document to prove such death.

Death has been defined as the cessation of life. Life is not synonymous with civil personality.
One need not acquire civil personality first before he/she could die. Even a child inside the
womb already has life. As such, then the cessation thereof even prior to the child being
delivered, qualifies as death. A dependent is "one who relies on another for support; one not
able to exist or sustain oneself without the power or aid of someone else." Under said general
definition, even an unborn child is a dependent of its parents. Additionally, the CBA did not
provide a qualification for the child dependent. Therefore, child shall be understood in its more
general sense, which includes the unborn fetus in the mother’s womb. The term legitimate
merely addresses the dependent child’s status in relation to his/her parents. A legitimate child is
a product of, and, therefore, implies a valid and lawful marriage. The children conceived or born
during the marriage of the parents are legitimate. Hortillano and his wife were validly married
and that their child was conceived during said marriage, hence, making said child legitimate
upon her conception. Hortillano was also able to comply with the fourth element entitling him to
death and accident insurance under the CBA or the presentation of the death certificate of his
unborn child. Given the existence of all the requisites for bereavement leave and other death
benefits under the CBA, Hortillano’s claims for the same should have been granted by
Continental Steel.

IN VIEW WHEREOF, the Petition is DENIED.

G.R. No. 160236 October 16, 2009
"G" HOLDINGS, INC., Petitioner,
vs.
NATIONAL MINES AND ALLIED WORKERS UNION Local 103 (NAMAWU); SHERIFFS
RICHARD H. APROSTA and ALBERTO MUNOZ, all acting Sheriffs; DEPARTMENT OF
LABOR AND EMPLOYMENT, Region VI, Bacolod District Office, Bacolod City, Respondents.

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court
assailing the October 14, 2003 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No.
75322.

FACTS: The petitioner, "G" Holdings, Inc. (GHI), is a domestic corporation primarily engaged in
the business of owning and holding shares of stock of different companies. It was registered
with the Securities and Exchange Commission on August 3, 1992. Private respondent, National
Mines and Allied Workers Union Local 103 (NAMAWU), was the exclusive bargaining agent of
the rank and file employees of Maricalum Mining Corporation (MMC), an entity operating a
copper mine and mill complex at Sipalay, Negros Occidental.

On October 2, 1992, pursuant to a Purchase and Sale Agreement6 executed between GHI and
Asset Privatization Trust (APT), the former bought ninety percent (90%) of MMC’s shares and
financial claims. These financial claims were converted into three Promissory Notes issued by
MMC in favor of GHI totaling P500M and secured by mortgages over MMC’s properties.

Upon the signing of the Purchase and Sale Agreement and upon the full satisfaction of the
stipulated down payment, GHI immediately took physical possession of the mine site and its
facilities, and took full control of the management and operation of MMC.

Almost four years thereafter, or on August 23, 1996, a labor dispute (refusal to bargain
collectively and unfair labor practice) arose between MMC and NAMAWU, with the latter
eventually filing with the National Conciliation and Mediation Board of Bacolod City a notice of
strike. Then Labor Secretary later assumed jurisdiction over the dispute and ruled in favor of
NAMAWU. In his July 30, 1997 Order in OS-AJ-10-96-014 (Quisumbing Order), Secretary
Quisumbing declared that the lay-off (of workers) implemented on May 7, 1996 and October 7,
1996 was illegal and that MMC committed unfair labor practice. He then ordered the
reinstatement of the laid-off workers, with payment of full backwages and benefits, and directed
the execution of a new collective bargaining agreement (CBA) incorporating the terms and
conditions of the previous CBA providing for an annual increase in the workers’ daily wage.

On May 11, 2001, then Acting Department of Labor and Employment (DOLE) Secretary, now
also an Associate Justice of this Court, Arturo D. Brion, on motion of NAMAWU, directed the
issuance of a partial writ of execution (Brion Writ), and ordered the DOLE sheriffs to proceed to
the MMC premises for the execution of the same. Much later, in 2006, this Court, in G.R. Nos.
157696-97, entitled Maricalum Mining Corporation v. Brion and NAMAWU, affirmed the
propriety of the issuance of the Brion Writ.
The Brion Writ was not fully satisfied because MMC’s resident manager resisted its
enforcement. On motion of NAMAWU, then DOLE Secretary Patricia A. Sto. Tomas ordered the
issuance of the July 18, 2002 Alias Writ of Execution and Break-Open Order (Sto. Tomas Writ).
On October 11, 2002, the respondent acting sheriffs, the members of the union, and several
armed men implemented the Sto. Tomas Writ, and levied on the properties of MMC located at
its compound in Sipalay, Negros Occidental.
On October 14, 2002, GHI filed with the Regional Trial Court (RTC) of Kabankalan City, Negros
Occidental, Special Civil Action (SCA) No. 1127 for Contempt with Prayer for the Issuance of a
Temporary Restraining Order (TRO) and Writ of Preliminary Injunction and to Nullify the
Sheriff’s Levy on Properties. GHI contended that the levied properties were the subject of a
Deed of Real Estate and Chattel Mortgage, dated September 5, 1996 executed by MMC in
favor of GHI to secure the aforesaid P550M promissory notes; that this deed was registered on
February 24, 2000; and that the mortgaged properties were already extrajudicially foreclosed in
July 2001 and sold to GHI as the highest bidder on December 3, 2001, as evidenced by the
Certificate of Sale dated December 4, 2001.

The trial court issued ex parte a TRO effective for 72 hours, and set the hearing on the
application for a writ of injunction. On October 17, 2002, the trial court ordered the issuance of a
Writ of Injunction (issued on October 18, 2002) enjoining the DOLE sheriffs from further
enforcing the Sto. Tomas Writ and from conducting any public sale of the levied-on properties,
subject to GHI’s posting of a P5M bond.

Aggrieved, NAMAWU filed with the CA a petition for certiorari under Rule 65, assailing the
October 17, 18 and December 4, 2002 orders of the RTC, the appellate court rendered a
Decision setting aside the RTC issuances and directing the immediate execution of the Sto.
Tomas Writ. The CA ruled, among others, that the circumstances surrounding the execution of
the September 5, 1996 Deed of Real Estate and Chattel Mortgage yielded the conclusion that
the deed was sham, fictitious and fraudulent; that it was executed two weeks after the labor
dispute arose in 1996, but surprisingly, it was registered only on February 24, 2000, immediately
after the Court affirmed with finality the Quisumbing Order. The CA also found that the
certificates of title to MMC’s real properties did not contain any annotation of a mortgage lien,
and, suspiciously, GHI did not intervene in the long drawn-out labor proceedings to protect its
right as a mortgagee of virtually all the properties of MMC. The CA further ruled that the
subsequent foreclosure of the mortgage was irregular, effected precisely to prevent the
satisfaction of the judgment against MMC. It noted that the foreclosure proceedings were
initiated in July 2001, shortly after the issuance of the Brion Writ; and, more importantly, the
basis for the extrajudicial foreclosure was not the failure of MMC to pay the mortgage debt, but
its failure "to satisfy any money judgment against it rendered by a court or tribunal of competent
jurisdiction, in favor of any person, firm or entity, without any legal ground or reason.

ISSUE: Whether or not the mortgage and sale agreement between GHI and MMC is valid and
would prevent the satisfaction of the claims of NAMAWU because of unfair labor practice?

RULING: The mortgage was not a sham.

Republic etc., v. "G" Holdings, Inc. acknowledged the existence of the Purchase and Sale
Agreement between the APT and the GHI, and recounts the facts attendant to that transaction,
as follows:
The series of negotiations between the petitioner Republic of the Philippines, through the APT
as its trustee, and "G" Holdings culminated in the execution of a purchase and sale agreement
on October 2, 1992. Under the agreement, the Republic undertook to sell and deliver 90% of the
entire issued and outstanding shares of MMC, as well as its company notes, to "G" Holdings
in consideration of the purchase price of P673,161,280. It also provided for a down payment of
P98,704,000 with the balance divided into four tranches payable in installment over a period of
ten years."
The "company notes" mentioned therein were actually the very same three (3) Promissory
Notes amounting to P550M, issued by MMC in favor of GHI. As already adverted to above,
these notes uniformly contained stipulations "establishing and constituting" mortgages over
MMC’s real and personal properties.
It may be remembered that APT acquired the MMC from the PNB and the DBP. Then, in
compliance with its mandate to privatize government assets, APT sold the aforesaid MMC
shares and notes to GHI. To repeat, this Court has recognized this Purchase and Sale
Agreement in Republic, etc., v. "G" Holdings, Inc.
The participation of the Government, through APT, in this transaction is significant. Because the
Government had actively negotiated and, eventually, executed the agreement, then the
transaction is imbued with an aura of official authority, giving rise to the presumption of
regularity in its execution. This presumption would cover all related transactional acts and
documents needed to consummate the privatization sale, inclusive of the Promissory Notes. It is
obvious, then, that the Government, through APT, consented to the "establishment and
constitution" of the mortgages on the assets of MMC in favor of GHI, as provided in the notes.
Accordingly, the notes (and the stipulations therein) enjoy the benefit of the same presumption
of regularity accorded to government actions. Given the Government consent thereto, and
clothed with the presumption of regularity, the mortgages cannot be characterized as sham,
fictitious or fraudulent. It is difficult to conceive that these mortgages, already existing in 1992,
almost four (4) years before NAMAWU filed its notice of strike, were a "fictitious" arrangement
intended to defraud NAMAWU. After all, they were agreed upon long before the seeds of the
labor dispute germinated.

We are not unmindful, however, of the fact that the labor claims of NAMAWU, acknowledged by
this Court in Maricalum, still await final execution. As success fades from NAMAWU’s efforts to
execute on the properties of MMC, which were validly foreclosed by GHI, we see that NAMAWU
always had, and may still have, ample supplemental remedies found in Rule 39 of the Rules of
Court in order to protect its rights against MMC.

G.R. No. 177024 October 30, 2009

THE HERITAGE HOTEL MANILA (OWNED AND OPERATED BY GRAND PLAZA HOTEL
CORPORATION) Petitioner,
vs.
PINAG-ISANG GALING AT LAKAS NG MGA MANGGAGAWA SA HERITAGE MANILA
(PIGLAS-HERITAGE), Respondent

This case is about a company’s objections to the registration of its rank and file union for non-
compliance with the requirements of its registration.

FACTS: Sometime in 2000, certain rank and file employees of petitioner Heritage Hotel Manila
(petitioner company) formed the "Heritage Hotel Employees Union" (the HHE union). The
Department of Labor and Employment-National Capital Region (DOLE-NCR) later issued a
certificate of registration to this union.
Subsequently, the HHE union filed a petition for certification election that petitioner company
opposed alleging that the HHE union misrepresented itself to be an independent union, when it
was, in truth, a local chapter of the National Union of Workers in Hotel and Restaurant and
Allied Industries (NUWHRAIN) and the company also filed a petition for the cancellation of the
HHE union’s registration certificate.

The Med-Arbiter granted the HHE union’s petition for certification election. Petitioner company
appealed it and filed a motion for reconsideration which was both denied respectively,
prompting it to file a petitioin for certiorari with the CA.On October 12, 2001 the Court of Appeals
issued a writ of injunction against the holding of the HHE union’s certification election, effective
until the petition for cancellation of that union’s registration shall have been resolved with finality.
The decision of the Court of Appeals became final when the HHE union withdrew the petition for
review that it filed with this Court.

On December 10, 2003 certain rank and file employees of petitioner company held a meeting
and formed another union, the respondent Pinag-Isang Galing at Lakas ng mga Manggagawa
sa Heritage Manila (the PIGLAS union). This union applied for registration with the DOLE-NCR
and got its registration certificate on February 9, 2004. Two months later, the members of the
first union, the HHE union, adopted a resolution for its dissolution. The HHE union then filed a
petition for cancellation of its union registration.
On September 4, 2004 respondent PIGLAS union filed a petition for certification election that
petitioner company also opposed, alleging that the new union’s officers and members were also
those who comprised the old union. According to the company, the employees involved formed
the PIGLAS union to circumvent the Court of Appeals’ injunction against the holding of the
certification election sought by the former union. Despite the company’s opposition, however,
the Med-Arbiter granted the petition for certification election.
On December 6, 2004, petitioner Company filed a petition to cancel the union registration of
respondent PIGLAS union. The company claimed that the union made fatal misrepresentation in
its application for union registration and committed “dual unionism" which is a ground for
canceling a union’s registration.

ISSUE: Whether or not the new Union can have a valid certification election?

RULING: The charge that a labor organization committed fraud and misrepresentation in
securing its registration is a serious charge and deserves close scrutiny. Once such charge is
proved, the labor union acquires none of the rights accorded to registered organizations. Here,
the discrepancies in the number of union members or employees stated in the various
supporting documents that respondent PIGLAS union submitted to labor authorities can be
explained. While it appears in the minutes of the December 10, 2003 organizational meeting
that only 90 employees responded to the roll call at the beginning, it cannot be assumed that
such number could not grow to 128 as reflected on the signature sheet for attendance. There is
also nothing essentially mysterious or irregular about the fact that only 127 members ratified the
union’s constitution and by-laws when 128 signed the attendance sheet. It cannot be assumed
that all those who attended approved of the constitution and by-laws. Any member had the right
to hold out and refrain from ratifying those documents or to simply ignore the process.
At any rate, the Labor Code and its implementing rules do not require that the number of
members appearing on the documents in question should completely dovetail. For as long as
the documents and signatures are shown to be genuine and regular and the constitution and by-
laws democratically ratified, the union is deemed to have complied with registration
requirements.
Petitioner company claims that respondent PIGLAS union was required to submit the names of
all its members comprising at least 20 percent of the employees in the bargaining unit. Yet the
list it submitted named only 100 members notwithstanding that the signature and attendance
sheets reflected a membership of 127 or 128 employees. This omission, said the company,
amounted to material misrepresentation that warranted the cancellation of the union’s
registration.
But, as the labor authorities held, this discrepancy is immaterial. A comparison of the
documents shows that, except for six members, the names found in the subject list are also in
the attendance and signature sheets. Notably, the bargaining unit that respondent PIGLAS
union sought to represent consisted of 250 employees. Only 20 percent of this number or 50
employees were required to unionize. Here, the union more than complied with such
requirement. And last, the fact that some of respondent PIGLAS union’s members were also
members of the old rank and file union, the HHE union, is not a ground for canceling the new
union’s registration. The right of any person to join an organization also includes the right to
leave that organization and join another one.

G.R. No. 155125 December 4, 2009

YSS EMPLOYEES UNION - PHILIPPINE TRANSPORT AND GENERAL WORKERS
ORGANIZATION, Petitioner,
vs.
YSS LABORATORIES, INC., Respondent
It is a Petition for Review on Certiorari filed by petitioner YSS Employees Union (YSSEU) –
Philippine Transport and General Workers Organization seeking to reverse and set aside the
Decision dated 26 November 2001 and the Resolution dated 29 August 2002 of the Court of
Appeals in CA-G.R. SP No. 66095 nullifying the Orders of the Secretary of the Department of
Labor and Employment (DOLE) dated 11 May 2001 and 9 June 2001 which enjoined the strike
staged by petitioner, and ordered respondent YSS Laboratories Inc. (YSS Laboratories) to
accept the workers back to their work, including those who were retrenched from employment
due to serious business losses.

FACTS: YSS Laboratories is a domestic corporation engaged in the pharmaceutical business.

YSSEU is a duly registered labor organization and the sole and exclusive bargaining
representative of the rank and file employees of YSS Laboratories.

In order to arrest escalating business losses, YSS Laboratories implemented a retrenchment

program which affected 11 employees, nine were officers and members of YSSEU. Initially,
these employees were given the option to avail themselves of the early retirement program of
the company. When no one opted to retire early, YSS Laboratories exercised its option to
terminate the services of its employees. Copies of the Notices of Termination were filed with
DOLE on 19 March 2001 and were served to concerned employees on 20 March 2001.
Claiming that YSS Laboratories was guilty of discrimination and union-busting in carrying out
the said retrenchment program, YSSEU decided to hold a strike. The Secretary of Labor to
finally intervene in order to put an end to a prolonged labor dispute, the Secretary of Labor
deemed that the continuation of the labor dispute was inimical to national interest. Thus, in an
Order dated 11 May 2001, the Secretary of Labor certified the labor dispute to the National
Labor Relations Commission (NLRC) for compulsory arbitration. Accordingly, all striking workers
were thereby directed to return to work within 24 hours from their receipt of the said Order, and
YSS Laboratories to accept them under the terms and conditions prevailing before the strike.
YSS Laboratories, however, refused to fully comply with the directive of the Secretary of Labor.
YSS Laboratories argued that nine union officers and members who were previously terminated
from service pursuant to a valid retrenchment should be excluded from the operation of the
return-to-work order. It also asserted that the union officers11 who participated in the purported
illegal strike should likewise not be allowed to be back to their employment for they were
deemed to have already lost their employment status. YSSEU, for its part, moved that YSS
Laboratories be cited for contempt for refusing to admit the 18 workers back to work. In addition,
YSSEU prayed for the award of backwages in favor of these employees who were not permitted
by YSS Laboratories to return to their respective stations despite the Secretary of Labor’s
directive. Acting on the aforesaid motions, the Secretary of Labor, on 9 June 2001, granted the
motion of YSSEU and thus issued an Order directing YSS Laboratories to immediately accept
back to work the nine retrenched employees and the nine union officers who initiated the
alleged illegal strike pending determination of the validity of the retrenchment and illegal strike
cases. Unyielding, YSS Laboratories brought a Petition for Certiorari before the Court of
Appeals, seeking to annul the certification order and the return-to-work order issued by the
Secretary of Labor. On 26 November 2001, the Court of Appeals rendered a Decision granting
the Petition and reversing the assailed Orders dated 11 May 2001 and 9 June 2001, as they
found that YSS Laboratories validly carried out its retrenchment program, which effectively
severed the concerned employees’ employment with the company.

ISSUE: Whether or not the retrenched employees should be excluded from the operation to the
return work order?

RULING: YSS Laboratories’ vigorous insistence on the exclusion of the retrenched employees
from the coverage of the return-to-work order seriously impairs the authority of the Secretary of
Labor to forestall a labor dispute that he deems inimical to the national economy. The Secretary
of Labor is afforded plenary and broad powers, and is granted great breadth of discretion to
adopt the most reasonable and expeditious way of writing finis to the labor dispute. The
Secretary of Labor directed YSS Laboratories to accept all the striking workers back to work; the
Secretary did not exceed his jurisdiction, or gravely abuse the same. By harping on the validity
of the retrenchment and on the exclusion of the retrenched employees from the coverage of the
return-to-work order, YSS Laboratories undermines the underlying principle embodied in Article
263(g) of the Labor Code on the settlement of labor disputes -- that assumption and certification
orders are executory in character and are to be strictly complied with by the parties, even during
the pendency of any petition questioning their validity. Accepting back the workers in this case is
not a matter of option, but of obligation mandated by law for YSS Laboratories to faithfully
comply with. Its compulsory character is mandated, not to cater to a narrow segment of society,
or to favor labor at the expense of management, but to serve the greater interest of society by
maintaining the economic equilibrium.

G.R. No. 181357 February 2, 2010

MALAYAN EMPLOYEES ASSOCIATION-FFW and RODOLFO MANGALINO, Petitioners,
vs.
MALAYAN INSURANCE COMPANY, INC., Respondent.

The petitioner Malayan Employees Association-FFW (union) asks a petition for certiorari to set
aside the June 26, 2007 decision and the November 29, 2007 resolution of the CA in CA-G.R.
SP No. 80691, ruling that the suspension imposed by the respondent Malayan Insurance
Company, Inc. (company) on union member Rodolfo Mangalino (Mangalino) is valid. Mangalino
was suspended for taking a union leave without the prior authority of his department head and
despite a previous disapproval of the requested leave.

FACTS: A provision in the union’s CBA with the company allows union officials to avail of union
leaves with pay for a total of "ninety-man" days per year for the purpose of attending grievance
meetings, Labor-Management Committee meetings, annual National Labor Management
Conferences, labor education programs and seminars, and other union activities.
The company issued a rule in November 2002 requiring not only the prior notice that the CBA
expressly requires, but prior approval by the department head before the union and its members
can avail of union leave. Union officer Mangalino, filed union leave applications in January and
February, 2004. His department head disapproved the applications because the department
was undermanned at that time.
Despite the disapproval, Mangalino proceeded to take the union leave. He said he believed in
good faith that he had complied with the existing company practice and with the procedure set
forth in the CBA. The company responded by suspending him for one week and, thereafter, for
a month, for his second offense in February 2004.

After all internal remedies failed, the union went to the National Conciliation and Mediation
Board for preventive mediation. It adjudged the suspension of Mr. Rodolfo Mangalino’s on first
availment of union leave invalid while the second suspension valid but illicit in terms of penalty
of thirty (30) days suspension. We consider the honesty of the same (believing in good faith) as
mitigating circumstances and reduced the suspension from thirty seven (37) days to ten (10)
days only. Henceforth, the Complainant is entitled to twenty seven (27) days back wages.

The company appealed the decision to the CA on May 12, 2005, it granted the company’s
petition and upheld the validity of Mangalino’s suspension on the basis of the company’s
prerogative to prescribe reasonable rules to regulate the use of union leaves.

ISSUE: Whether or not the CA committed grave abuse of discretion when, despite the clear
terms of the CBA grant of union leaves, it disregarded the evidence on record and recognized
that the company’s use of its management prerogative as justification was proper.

RULING: While it is true that the union and its members have been granted union leave
privileges under the CBA, the grant cannot be considered separately from the other provisions
of the CBA, particularly the provision on management prerogatives where the CBA reserved for
the company the full and complete authority in managing and running its business. The court
see nothing in the wordings of the union leave provision that removes from the company the
right to prescribe reasonable rules and regulations to govern the manner of availing of union
leaves, particularly the prerogative to require prior approval. Precisely, prior notice is expressly
required under the CBA so that the company can appropriately respond to the request for leave.
In this sense, the rule requiring prior approval only made express what is implied in the terms of
the CBA. The doubt in resolving any interpretative conflict is settled by subsequent
developments in the course of the parties’ implementation of the CBA, specifically, by the
establishment of the company regulation in November 2002 requiring prior approval before the
union leave can be used. The union accepted this regulation without objection since its
promulgation which is more than a year before the present dispute arose and the rule on its face
is not unreasonable, oppressive, nor violative of CBA terms.

G.R. No. 172927 February 11, 2010

RONILO SORREDA, Petitioner,
vs.
CAMBRIDGE ELECTRONICS CORPORATION,1 Respondent.

This petition seeks to reverse and set aside the May 26, 2005 decision of the CA in CA-G.R. SP
No. 77303 and its resolution denying reconsideration. The CA affirmed the resolution of the
National Labor Relations Commission (NLRC) in NLRC NCR CA No. 028156-01 declaring that
petitioner Ronilo Sorreda was not a regular employee of respondent Cambridge Electronics
Corporation.

FACTS: On May 8, 1999, petitioner was hired by respondent as a technician for a period of 5
months. Five weeks into the job, petitioner met an accident in which his left arm was crushed by
a machine and had to be amputated. Petitioner claimed that, shortly after his release from the
hospital, officers of respondent company called him to a meeting with his common-law wife,
father and cousin. There he was assured a place in the company as a regular employee for as
long as the company existed and as soon as he fully recovered from his injury. In September
1999, after he recovered from his injury, petitioner reported for work. Instead of giving him
employment, they made him sign a memorandum of resignation to formalize his separation from
the company in the light of the expiration of his five-month contract. This prompted petitioner to
file a complaint for illegal dismissal. He claimed that respondent failed to comply with the terms
of the contract of perpetual employment which was perfected in June 1999 when he was called
to a meeting by management. He prayed that respondent be made to pay compensatory,11
moral12 and exemplary damages and attorney’s fees for default or breach of contract.

The labor arbiter held that he had jurisdiction to hear and decide the case as it involved the
employer-employee relationship of the contending parties. He ruled that petitioner who had
been employed on a per-project basis became a regular employee by virtue of the contract of
perpetual employment.

Both petitioner and respondent appealed to the NLRC. The NLRC agreed with respondent. It
found that petitioner was not a regular employee; thus, he was neither illegally dismissed nor
entitled to reinstatement and backwages. Petitioner sued for compensatory damages because
of the accident that befell him. As the contract for per-project employment had already expired,
the issue no longer fell under the jurisdiction of the labor arbiter and NLRC.

Aggrieved, petitioner filed a petition for certiorari; The CA concluded that the NLRC did not
commit any reversible error in finding that the labor arbiter had no jurisdiction over the case.
Thus, this petition.

ISSUE: Whether or not Ronilo Sorreda is an employee of Cambridge Electronics Corporation.

RULING: The employment from the period May 8, 1999 to October 8, 1999, was clearly a per-
project employee of private respondent, resulting in an employer-employee relationship, thus,
the Labor Arbiter has Jurisdiction. However, his cause of action was based on an alleged
second contract of employment separate and distinct from the per-project employment contract.
He insisted that there was a perfected contract of perpetual employment and that respondent
was liable to pay him damages. The petitioner filed the case only when respondent refused to
rehire him. Petitioner insists on a right to be employed again in respondent company and seeks
a determination of the existence of a new and separate contract that established that right. As
such, his case is within the jurisdiction not of the labor arbiter but of the regular courts. Even
assuming that the labor arbiter had the jurisdiction to decide the case, the Court cannot
countenance petitioner’s claim that a contract of perpetual employment was ever constituted.
The Court recognizes the critical role of private enterprise in nation-building and the
prerogatives of management. A contract of perpetual employment deprives management of its
prerogative to decide whom to hire, fire and promote, and renders inutile the basic precepts of
labor relations. While management may validly waive it prerogatives, such waiver should not be
contrary to law, public order, public policy, morals or good customs. An absolute and unqualified
employment for life in the mold of petitioner’s concept of perpetual employment is contrary to
public policy and good customs, as it unjustly forbids the employer from terminating the services
of an employee despite the existence of a just or valid cause. It likewise compels the employer
to retain an employee despite the attainment of the statutory retirement age, even if the
employee has became a "non-performing asset" or, worse, a liability to the employer. Petition is
denied.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 171231 February 17, 2010
PNCC SKYWAY TRAFFIC MANAGEMENT AND SECURITY DIVISION WORKERS
ORGANIZATION (PSTMSDWO), represented by its President, RENE SORIANO, Petitioner,
vs.
PNCC SKYWAY CORPORATION, Respondent.
DECISION
PERALTA, J.:

Facts: PNCC Skyway Corporation Traffic Management and Security Division Workers'
Organization (PSTMSDWO) is a labor union duly registered with the Department of Labor and
Employment (DOLE). PNCC Skyway Corporation is a corporation duly organized and operating
under and by virtue of the laws of the Philippines.
On November 15, 2002, petitioner and respondent entered into a Collective Bargaining
Agreement (CBA) incorporating the terms and conditions of their agreement which included
vacation leave and expenses for security license provisions.

Petitioner objected to the implementation of the said memorandum. It insisted that the individual
members of the union have the right to schedule their vacation leave.
Due to the disagreement between the parties, petitioner elevated the matter to the DOLE-NCMB
for preventive mediation. For failure to settle the issue amicably, the parties agreed to submit
the issue before the voluntary arbitrator.
Respondent filed a motion for reconsideration, from the decision of the arbitrator which the
voluntary arbitrator denied in the Order7 dated August 11, 2004.
Respondent filed a Petition for Certiorari with Prayer for Temporary Restraining Order and/or
Writ of Preliminary Injunction with the CA, and the CA rendered a Decision dated October 4,
2005,8 annulling and setting aside the decision and order of the voluntary arbitrator.
Petitioner filed a motion for reconsideration, which the CA denied. Hence, the instant petition
assigning errors:
Respondent alleged that the petition was fatally defective due to the lack of authority of its union
president, Rene Soriano, to sign the certification and verification against forum shopping on
petitioner's behalf. It alleged that the authority of Rene Soriano to represent the union was only
conferred on June 30, 2006 by virtue of a board resolution,10 while the Petition for Review had
long been filed on February 27, 2006. Thus, Rene Soriano did not possess the required
authority at the time the petition was filed on February 27, 2006.

Issue: Whether or not Rene Soriano possess the required authority at the time the petition was
filed on February 27, 2006.

Held: In the case at bar, the Supreme Court rule that Rene Soriano has sufficient authority to
sign the verification and certification against forum shopping for the following reasons: First, the
resolution dated June 30, 2006 was merely a reiteration of the authority given to the Union
President to file a case before this Court assailing the CBA violations committed by the
management, which was previously conferred during a meeting held on October 5, 2005. Thus,
it can be inferred that even prior to the filing of the petition before Us on February 27, 2006, the
president of the union was duly authorized to represent the union and to file a case on its behalf.
Second, being the president of the union, Rene Soriano is in a position to verify the truthfulness
and correctness of the allegations in the petition. Third, assuming that Mr. Soriano has no
authority to file the petition on February 27, 2006, the passing on June 30, 2006 of a Board
Resolution authorizing him to represent the union is deemed a ratification of his prior execution,
on February 27, 2006, of the verification and certificate of non-forum shopping, thus curing any
defects thereof.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 163532 March 10, 2010
YOKOHAMA TIRE PHILIPPINES, INC., Petitioner,
vs.
YOKOHAMA EMPLOYEES UNION, Respondent.
RESOLUTION
CARPIO, J.:

Facts: YEU filed before the Regional Office a petition for certification election. YTPI filed before
the Regional Office a petition dated 24 January 2000 for the revocation of YEU’s registration.
YTPI alleged that YEU violated Article 239(a) of the Labor Code: (1) YEU fraudulently included
the signature of a certain Ronald O. Pineda (Pineda) in the organizational documents; (2)
Pineda was not aware of any election of union officers; (3) YEU fraudulently obtained the
employees’ signatures by making them believe that they were signing a petition for a 125%
increase in the minimum wage, not a petition for registration; (4) the employees did not belong
to a single bargaining unit; and (5) YEU fraudulently stated in its organizational meeting minutes
that its second vice president was Bernard David, not Bernardo David.

Issue: Did respondent PIGLAS union commit fraud and misrepresentation in its application for
union registration?

Held: There was evidence that respondent committed fraud and misrepresentation in its failure
to omit the name of Ronald Pineda prior to the filing of the respondents organizational
documents with the Department of Labor and Employment. On the other hand, the Regional
Director held that there was no election of officers that had taken place during
respondent’s alleged organizational meeting as there was no proof of such election.
The Supreme Court will only exercise its power of review in known exceptions such as gross
misappreciation of evidence or a total void of evidence." YTPI failed to show that the Court of
Appeals gravely abused its discretion.
The Court of Appeals held that YTPI had the burden of proving that YEU committed fraud and
misrepresentation:
As the applicant for cancellation, the petitioner naturally had the burden to present proof
sufficient to warrant the cancellation. The petitioner was thus expected to satisfactorily establish
that YEU committed misrepresentations, false statements or fraud in connection with the
election of its officers, or with the minutes of the election of officers, or in the list of votes, as
expressly required in Art. 239, (c), Labor Code.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 149552 March 10, 2010
GENERAL MILLING CORPORATION, Petitioner,
vs.
ERNESTO CASIO, ROLANDO IGOT, MARIO FAMADOR, NELSON LIM, FELICISIMO BOOC,
PROCOPIO OBREGON, JR., and ANTONIO ANINIPOK, Respondents,

and

VIRGILIO PINO, PAULINO CABREROS, MA. LUNA P. JUMAOAS, DOMINADOR BOOC,

FIDEL VALLE, BARTOLOME AUMAN, REMEGIO CABANTAN, LORETO GONZAGA,
EDILBERTO MENDOZA and ANTONIO PANILAG, Respondents.
Facts: On November 30, 1991, IBM-Local 31, through its officers and board members, namely,
respondents Virgilio Pino,4 Paulino Cabreros, Ma. Luna P. Jumaoas, Dominador Booc,
Bartolome Auman, Remegio Cabantan, Fidel Valle, Loreto Gonzaga, Edilberto Mendoza and
Antonio Panilag (Pino, et al.), entered into a Collective Bargaining Agreement (CBA) with GMC.
The effectivity of the said CBA was retroactive to August 1, 1991.5
Gabiana then wrote a letter10 dated March 10, 1992, addressed to Eduardo Cabahug
(Cabahug), GMC Vice-President for Engineering and Plant Administration, informing the
company of the expulsion of Casio, et al. from the union pursuant to the Resolution dated
February 29, 1992 of IBM-Local 31 officers and board members. Gabiana likewise requested
that Casio, et al. "be immediately dismissed from their work for the interest of industrial peace in
the plant."
Pressured by the threatened filing of a suit for unfair labor practice, GMC acceded to Gabiana’s
request to terminate the employment of Casio, et al. GMC issued a Memorandum dated March
24, 1992 terminating the employment of Casio, et al. effective April 24, 1992 and placing the
latter under preventive suspension for the meantime.
On March 27, 1992, Casio, et al., in the name of IBM-Local 31, filed a Notice of Strike with the
NCMB-Regional Office No. VII (NCMB-RO). Casio, et al. alleged as bases for the strike the
illegal dismissal of union officers and members, discrimination, coercion, and union busting. The
NCMB-RO held conciliation proceedings, but no settlement was reached among the parties.12
Casio, et al. next sought recourse from the National Labor Relations Commission (NLRC)
Regional Arbitration Branch VII by filing on August 3, 1992 a Complaint against GMC and Pino,
et al. for unfair labor practice, particularly, the termination of legitimate union officers, illegal
suspension, illegal dismissal, and moral and exemplary damages. Finding that the Case did not
undergo voluntary arbitration, the Labor Arbiter dismissed the case for lack of jurisdiction
Since the dismissal is not for a cause detrimental to the interest of the company, respondent
General Milling Corporation is, nonetheless, ordered to pay separation pay to all [Casio, et al.]
within seven (7) calendar days

Issue: Whether THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT SAID THAT
PETITIONER GMC FAILED TO ACCORD DUE PROCESS TO [Casio, et al.].

Held: The twin requirements of notice and hearing constitute the essential elements of
procedural due process. The law requires the employer to furnish the employee sought to be
dismissed with two written notices before termination of employment can be legally effected: (1)
a written notice apprising the employee of the particular acts or omissions for which his
dismissal is sought in order to afford him an opportunity to be heard and to defend himself with
the assistance of counsel, if he desires, and (2) a subsequent notice informing the employee of
the employer’s decision to dismiss him. This procedure is mandatory and its absence taints the
dismissal with illegality.34
Irrefragably, GMC cannot dispense with the requirements of notice and hearing before
dismissing Casio, et al. even when said dismissal is pursuant to the closed shop provision in the
CBA. The rights of an employee to be informed of the charges against him and to reasonable
opportunity to present his side in a controversy with either the company or his own union are not
wiped away by a union security clause or a union shop clause in a collective bargaining
agreement. An employee is entitled to be protected not only from a company which disregards
his rights but also from his own union the leadership of which could yield to the temptation of
swift and arbitrary expulsion from membership and hence dismissal from his job.35

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 178989 March 18, 2010
EAGLE RIDGE GOLF & COUNTRY CLUB, Petitioner,
vs.
COURT OF APPEALS and EAGLE RIDGE EMPLOYEES UNION (EREU), Respondents.
The Facts
On December 6, 2005, at least 20% of Eagle Ridge’s rank-and-file employee had a meeting
where they organized themselves into an independent labor union, named "Eagle Ridge
Employees Union" (EREU or Union),5 elected a set of officers,6 and ratified7 their constitution
and by-laws.8
On December 19, 2005, EREU formally applied for registration9 and filed BLR Reg. Form No. I-
LO, s. 199810 before the Department of Labor and Employment (DOLE) Regional Office IV (RO
IV). In time, DOLE RO IV granted the application and issued EREU Registration Certificate
(Reg. Cert.) No. RO400-200512-UR-003.
The EREU then filed a petition for certification election in Eagle Ridge Golf & Country Club,
Eagle Ridge opposed this petition,11 followed by its filing of a petition for the cancellation12 of
Registration, Eagle Ridge’s petition ascribed misrepresentation, false statement, or fraud to
EREU in connection with the adoption of its constitution and by-laws, the numerical composition
of the Union, and the election of its officers.
Going into specifics, Eagle Ridge alleged that the EREU declared in its application for
registration having 30 members, when the minutes of its December 6, 2005 organizational
meeting showed it only had 26 members. The misrepresentation was exacerbated by the
discrepancy between the certification issued by the Union secretary and president that 25
members actually ratified the constitution and by-laws on December 6, 2005 and the fact that 26
members affixed their signatures on the documents, making one signature a forgery.
Issue: Whether THERE WAS FRAUD, MISREPRESENTATION AND/OR FALSE
STATEMENT WHICH WARRANT THE CANCELLATION OF CERTIFICATE OF
REGISTRATION OF EREU.28

The Union submitted the required documents attesting to the facts of the organizational
meeting on December 6, 2005, the election of its officers, and the adoption of the
Union’s constitution and by-laws. It submitted before the DOLE Regional Office with its
 Application for Registration and the duly filled out BLR Reg. Form No. I-LO, s. 1998, the
following documents, to wit:
(a) the minutes of its organizational meeting43 held on December 6, 2005
showing 26 founding members who elected its union officers by secret ballot;
(b) the list of rank-and-file employees44 of Eagle Ridge who attended the
organizational meeting and the election of officers with their individual signatures;
(c) the list of rank-and-file employees45 who ratified the union’s constitution and
by-laws showing the very same list as those who attended the organizational
meeting and the election of officers with their individual signatures except the
addition of four employees without their signatures, i.e., Cherry Labajo, Grace
Pollo, Annalyn Poniente and Rowel Dolendo;
(d) the union’s constitution and by-laws46 as approved on December 6, 2005;
(e) the list of officers47 and their addresses;
(f) the list of union members48 showing a total of 30 members; and
(g) the Sworn Statement49 of the union’s elected president and secretary. All the
foregoing documents except the sworn statement of the president and the
secretary were accompanied by Certifications50 by the union secretary duly
attested to by the union president.
The members of the EREU totaled 30 employees when it applied on December 19, 2005
for registration. The Union thereby complied with the mandatory minimum 20%
membership requirement under Art. 234(c). Of note is the undisputed number of 112
rank-and-file employees in Eagle Ridge, as shown in the Sworn Statement of the Union
president and secretary and confirmed by Eagle Ridge in its petition for cancellation.
Upon this light, the Court is inclined to agree with the CA that the BLR did not abuse its
discretion nor gravely err when it concluded that the affidavits of retraction of the members had
no evidentiary weight to warrant the cancellation of the Certificate of Registration.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 167563 March 22, 2010
COLLEGE OF THE IMMACULATE CONCEPTION, Petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ATTY. MARIUS F. CARLOS, PH.D.,
Respondents.

Petitioner College of the Immaculate Conceptionappointed respondent Atty. Marius F. Carlos on

June 1, 1995 as Acting Dean of the Department of Business Administration and Accountancy.
Thereafter, in a letter dated May 23, 1996, petitioner informed respondent of his appointment as
Dean of the Department of Business, Economics and Accountancy effective June 1, 1996 until
May 31, 2000. Respondent served as Dean of said department for the designated term.
In a letter dated May 15, 2000, petitioner reminded respondent that upon the expiration of his
term as Dean, he will be appointed as full-time professor of Law and Accounting without
diminution of his teaching salary as Dean. As promised, on June 1, 2000, respondent was given
eight (8) teaching loads as full-time professor. Respondent then requested for the payment of
overload pay, arguing that the regular full time load of a faculty member is only six. Petitioner, in
a letter dated July 3, 2000, denied respondent's claim for overload pay and explained that
pursuant to the Faculty Manual, a full time faculty member, such as the respondent, is one who
teaches at least twenty-four units or eight (8) teaching loads per semester in the College
Department. In the same letter, petitioner requested the respondent to vacate the Dean's office.
In his written reply, respondent admitted that he was teaching at Araullo University without
written permission because it was unnecessary.
Petitioner replied that there was no demotion in position from Dean to Faculty member, because
respondent’s appointment as Dean was for a fixed period of four (4) years, from June 1, 1996 to
May 31, 2000, as stated in petitioner's letter dated May 23, 1996.
Petitioner refused to accept respondent's explanation that securing petitioner's prior written
permission to teach elsewhere, or to engage in any other remunerative occupation, is
unnecessary. Thus, in its letter3 dated July 17, 2000, petitioner gave respondent two options, to
wit:
1. Remain as a full-time professor, but without teaching loads outside; you may also
continue to practice your profession as a lawyer, provided that any additional cases you
wish to handle should be subject to the prior written approval of the College; or
2. Become a part-time professor with an initial teaching load of fifteen (15) units, and
with complete freedom to teach elsewhere and to practice your profession. This means
that you will lose your tenure as a full-time faculty member; moreover, your teaching
loads in subsequent semesters will depend upon the College's evaluation of your
performance and the teaching loads you will be carrying for that particular semester in
other schools.
Since respondent failed to respond to the aforementioned letter, petitioner again sent a letter to
respondent on September 20, 2000 to give him another chance to choose between the two
foregoing options and to call his attention to Section 16.8, CHED Memorandum No. 19, S. 1998,
In a letter6 dated October 15, 2000, respondent protested the imposition of sanction against him
arising from his part-time teaching of law in another university. He maintained that teaching in
another university is a benefit he enjoyed since July 1, 1999 as an administrator and Dean. He
further said that his part-time teaching benefit cannot be withheld despite his alleged demotion
as a faculty member.
The Labor Arbiter (LA), in his Decision8 dated February 14, 2001, ruled that respondent was
illegally dismissed.
The NLRC ruled that petitioner's non-assignment of teaching load for the respondent was
merely resorted to as a sanction pursuant to Section 16.8 of CHED Memorandum No. 19, series
of 1998. It was clear that respondent's contract as Dean was only for a period of four years,
from June 1, 1996 to May 31, 2000, afterwhich, he would be appointed as a full- time professor
without diminution of salary as a dean. Thus, the LA was incorrect when it directed the
reinstatement of the respondent to his former position as a Dean. The NLRC, likewise, deleted
the award of moral and exemplary damages for lack of factual and legal basis.

Issue: Whether the subsequent reversal of the LA's findings mean that respondent should
reimburse petitioner all the salaries and benefits he received pursuant to the immediate
execution of the LA's erroneous decision ordering his reinstatement as Department Dean?

Held: We rule in the negative, even if the order of reinstatement of the Labor Arbiter is reversed
on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the higher court. On the other
hand, if the employee has been reinstated during the appeal period and such
reinstatement order is reversed with finality, the employee is not required to reimburse
whatever salary he received for he is entitled to such, more so if he actually rendered
services during the period.
It is not disputed at this point that the LA erred in ordering respondent's reinstatement as Dean.
The NLRC ruled that respondent should have been merely reinstated as a full-time law
professor, because the term of his appointment as Dean had long expired. However, such
mistake on the part of the LA cannot, in any way, alter the fact that during the pendency of the
appeal of his decision, his order for respondent's reinstatement as Dean was immediately
executory. Article 223 of the Labor Code explicitly provides.
Public respondents have in their favor the presumption of regularity in the performance of official
duties which petitioners failed to rebut when they did not present evidence to prove partiality,
malice and bad faith. Bad faith can never be presumed; it must be proved by clear and
convincing evidence.

Case Digest_Lolita Lopez et al v Quezon City Sports Club Inc

GR NO. 164032, January 19, 2009

Facts: the Kasapiang Mangagawa sa Quezon City Sports Club (union) filed a complaint for
unfair labor practice against QCSC alleging that the latter committed unfair labor practices. The
Union averred that it was ordered to submit a new information sheet. The members of the union
were not paid their salaries. When the letter went unanswered, the union filed a notice of strike
for violation of Article 248 (a)(c)(e) of the Labor Code, nonpayment of overtime pay, refusal to
hear its grievances, and malicious refusal to comply with the economic provisions of the CBA.
After conducting a strike vote, it staged a strike. The QCSC placed some of its employees
under temporary lay-off status due to redundancy. QCSC also filed a petition for cancellation of
registration against the union contending that the union was not a legitimate labor union as it
had a pending complaint for cancellation of certificate of registration and no valid CBA.
Labor Arbiter promulgated a decision finding QCSC guilty of unfair labor practice. QCSC
appealed from the labor arbiter’s decision. In turn, the union filed a motion to dismiss the appeal
for non-perfection due to failure to post the appeal bond. QCSC filed a motion to dismiss the
appeal for non-perfection due to failure to post the appeal bond. ACSC filed a motion for
reduction of the appeal bond. On January 4, 2000, QCSC filed a supplement to its appeal. The
NLRC dismissed for lack of merit. The CA dismissed the petition too for certiorari.
Issue: Whether or not simultaneous filing of the motion to reduce the appeal bond and posting
of the reduced amount of bond within the reglementary period for appeal constitute substantial
compliance with Article 223 of the Labor Code
Held: The petition is granted in part. At the outset, it should be stressed that the right to appeal
is not a natural right or a part of due process; it is merely a statutory privilege, and may be
exercised only in the manner and in accordance with the provisions of law. The party who seeks
to avail himself of the same must comply with the requirements of the rules. Failing to do so, the
right to appeal is lost.
Article 223 of the Labor Code partly provides that:
Article 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executor
unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the
following grounds:
. If there is prima facie evidence of abuse of discretion on the part of the
Labor Arbiter;
b. If the decision, order or award was secured through fraud or
coercion, including graft and corruption;
c. If made purely on questions of law; and
d. If serious errors in the findings of facts are raised which would cause
grave or irreparable damage or injury to the appellant.
In case of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the
judgment appealed from.
Case Digest_Juanito Garcia v Philippine Airlines Inc
GR No. 164856, January 20, 2009
Facts: The case stemmed from the administrative charge filed by PAL against its employees-
herein petitioners after they were allegedly caught in the act of sniffing shabu when a team of
company security personnel and law enforcers raided the PAL Technical Center’s Toolroom
Section. After due notice, PAL dismissed petitioners for transgressing the PAL Code of
Discipline, prompting them to file a complaint for illegal dismissal and damages, which was
resolved by the Labor Arbiter in their favor, thus ordering PAL to immediately comply with the
reinstatement aspect of the decision.
Respondent appealed to the NLRC, which it reversed said decision and dismissed petitioner’s
complaint for lack of merit.
In a related move, respondent filed an Urgent Petition for Injunction with the NLRC. It affirmed
the validity the Writ and the Notice issued by the Labor Arbiter but suspended and referred the
action to the Rehabilitation Receiver for appropriate action. Respondent elevated the matter to
the appellate court which issued a Decision and Resolution nullifying the NLRC Resolutions.
Issue: Whether or not petitioners may collect wages during the period between the Labor
Arbiter’s order of reinstatement pending appeal and the NLRC decision overturning that of the
Labor Arbiter
Held: Petition is partially granted. The provision of Article 223 is clear that an award for
reinstatement shall be immediately executor even pending appeal and the posting of a bond by
the employer shall not stay the execution for reinstatement. In sum, the obligation to pay the
employee’s salaries upon the employer’s failure to exercise the alternative options under Article
223 of the Labor Code is not a hard and fast rule, considering the inherent constraints of
corporation rehabilitation.

Case Digest_General Santos Coca-Cola Plant Free Workers Union-Tupas v Coca-Cola

Bottlers Phils Inc (General Santos City)

Facts: Sometime in the late 1990s, CCBPI experienced a significant decline in profitability due
to the Asian economic crisis, decrease in sales, and tougher competition. To curb the negative
effects on the company, it implemented three waves of an Early Retirement Program.
Meanwhile there was an inter-office memorandum sent to all of CCBPI’s Plant Human
Resources Managers/Personnel Officers, including those of the CCBPI General Santos Plant
mandating them to put on hold all requests for hiring to fill in vacancies in both regular and
temporary positions in Head office and in the Plants. Because several employees availed of the
early retirement program, vacancies were created in some departments, including the
production department of CCBPI Gen San. This prompted petitioner to negotiate with the Labor
Management Committee for filling up the vacancies with permanent employees. CCBPI Gen
San engaged the services of JLBP Services Corporation. Petitioner filed with the NCMB a
Notice of Strike on the ground of alleged unfair labor practice committed by CCBPI Gen San for
contracting-out services regularly performed by union members. After conciliation and mediation
proceedings, the parties failed to come to an amicable settlement. CCBPI filed a Petition for
Assumption of Jurisdiction. The NLRC decided not in favor of the petitioner so petitioner filed a
motion for reconsideration which the NLRC denied in its resolution. Hence, petitioner filed a
petition for certiorari before the CA. The CA decided upholding the NLRC’s findings that CCBPI
was not guilty of unfair labor practice. Hence, this petition.
Issue: Whether or not CCBPI was guilty of unfair labor practice
Held: The petition is denied. Unfair labor practice refers to “acts that violate the workers’ right
to organize.” The prohibited acts were related to the workers’ right to self-organization and to
the observance of a CBA. Without that element, the acts, even if unfair, are not unfair labor
practices. Both the NLRC and the CA found that petitioner was unable to prove its charge of
unfair labor practice. It was the Union that had the burden of adducing substantial evidence to
support its allegations of unfair labor practice, which burden it failed to discharge.

Case Digest_Samahan ng mga Manggagawa sa Samma-Lakas sa Industriya ng

Kapatirang Haligi ng Alyansa (SAMMA-LIKHA) V Samma Corporation, GR No. 167141
March 13, 2009

Facts: Petitioner SAMMA-LIKHA filed a petition for certification election in the DOLE claiming
that it was a local chapter of the LIKHA Federation, that it sought to represent all the rank-and-
file employees of respondent Samma Corporation, that there was no other legitimate labor
organization representing these rank-and-file employees, that respondent was not a party to any
collective bargaining agreement, and that no certification of consent election had been
conducted within the employer unit for the last 12 months prior to the filing of the petition.
Respondent moved for the dismissal of the petition. Med-Arbiter ordered the dismissal of the
petition. Petitioner moved for reconsideration. Meanwhile, Crispin Dannug Jr, an Officer-in-
Charge/Regional Director of DOLE LIKHA Federation issued a resolution on the ground that
prohibited mixture of supervisory and rank-and-file employees and non-compliance witht e
attestation clause under paragraph 2 of Article 235 of the Labor Code. Petitioner moved for
reconsideration of the resolution. Respondent filed a petition for certiorari. The CA reversed the
same. It denied reconsideration of the resolution. It found that petitioner had no legal standing to
file the petition for certification election. Hence, this petition.
Issue: Whether or not a certificate for non-forum shopping is required in a petition for
certification election
Held: The petition is granted. The Court notes that it is petition, the employer, which has
offered the most tenacious resistance to the holding of a certification election among its
monthly-paid rank-and-file employees. This must not be so, for the choice of a collective
bargaining agent is the sole concern of the employees. The only exception to this rule is where
the employer has to file the petition for certification election pursuant to Article 258 of the Labor
Code because it was requested to bargain collectively, which exception finds no application in
the case before us. Its role in a certification election has aptly been described as that of a mere
bystander. It has no legal standing in a certification election as it cannot oppose the petition or
appeal the Med-Arbiter’s orders related thereto.

Case Digest_Jackbilt Industries Inc v Jackbilt Employees Workers Union-NAFLU-KMU

GR No. 171618-19 March 20, 2009

Facts: Due to the adverse effects of the Asian economics crisis on the construction industry
beginning 1997 petitioner decided to temporarily stop its business, compelling most of its
employees to go on leave for 6 months. Respondent immediately protested the temporary
shutdown. Because its collective bargaining agreement with petition was expiring during the
period of the shutdown, respondent claimed that petition halted production to avoid its duty to
bargain collectively. Respondent went on strike. Petitioner filed a petition for injunction with a
prayer for the issuance of a TRO in the NLRC. It sought to enjoin respondent from obstructing
free entry to and exit from its production facility.
On April 14, 1998, the NLRC issued a TRO directing the respondents to refrain from preventing
access to petitioner’s property. The NLRC ordered the issuance of a writ of preliminary
injunction. Meanwhile, petitioner sent individual memoranda to the officers and members of
respondent who participated in the strike ordering them to explain why they should not be
dismissed for committing illegal acts in the course of a strike. Aggrieved, respondent filed
complaints for illegal lockout, runaway shop and damages, unfair labor practice, illegal dismissal
and attorney’s fees, and refusal to bargain on behalf of its officers and members against
petitioner and its corporate officers. In a decision, the labor arbiter dismissed the complaints for
illegal lockout and unfair labor practice for lack of merit. However, because petitioner did not file
a petition to declare the strike illegal, it was found guilty of illegal dismissal. On appeal, it
modified the decision of the labor arbiter. Both petitioner and respondent moved for
reconsideration but they were both denied for lack of merit. The petitioner assailed the decision
of the NLRC via a petition for certiorari, but the CA dismissed the petition. Thus, this recourse.
Issue: Whether or not the filing of a petition with the labor arbiter to declare a strike illegal is a
condition sine qua non for the valid termination of employees who commit an illegal act in the
course of such strike
Held: The petition is granted. Article 264(e) of the Labor Code prohibits any person engaged in
picketing from obstructing the free ingress to and egress from the employer’s premises. Since
respondent was found by the NLRC to have prevented the free entry into and exit vehicles from
petitioner’s compound, respondent’s officers and employees clearly committed illegal acts in the
course of the March 9, 1998 strike. We uphold the legality of the dismissal of respondent’s
officers and employees. Article 264 of the Labor Code further provides that an employer may
terminate employees found to have committed illegal acts in the course of a strike.

Case Digest_Antonio Serrano v Gallant Maritime Services Inc GR No. 167614 March 24,
2009

Facts: By way of petition, petitioner assails the resolution, entreating this Court to declare the
subject clause in the last clause in the 5th paragraph of Section 10, Republic Act No. 8042 as
violatative of the OFW’s constitutional rights in that it impairs the terms of their contract,
deprives them of equal protection and denies them due process. Petitioner was hired by Gallant
Maritime Services Inc and Marlow Navigation Co., Ltd under a POEA-approved Contract of
Employment.
On March 19, 1998, the date of his departure, petitioner was constrained to accept a
downgraded employment contract for the position of Second Officer with a monthly salary of
US$1000 upon the assurance and representation of respondents that he would be made Chief
Officer by the end of April 1998.
Respondents did not deliver on their promise to make petitioner Chief Officer. Hence, petitioner
refused to stay on as Second Officer and was repatriated to the Philippines on May 26, 1998.
Petitioner’s employment contract was for a period of 12 months, but at the time of his
repatriation, he had served only 2 months and 7 days of his contract. Leaving an unexpired
portion of 9 months and 23 days. Petitioner filed with the Labor Arbiter a complaint against
respondents for constructive dismissal and for payment of his money claims. The Labor Arbiter
decided in favor of the petitioner and ordered the respondents to pay the complainant. The
claims of the complainant for moral and exemplary damages are dismissed for lack of merit. All
other claims are dismissed as well.
The Labor Arbiter based his computation on the salary period of 3 months only rather than the
entire unexpired portion of 9 months and 23 days of petitioner’s employment contract-applying
the subject clause. Petitioner also appealed to the NLRC. In a decision, the NLRC modified the
LA decision. The NLRC corrected the LA’s computation of the lump-sum salary awarded to
petitioner. Petitioner filed a Motion for Partial Reconsideration, but this time he questioned the
constitutionality of the subject clause. The NLRC denied the motion. Petitioner filed a Petition for
Certiorari with the CA. The CA eventually gave due course to it, which granted the petition for
certiorari. In a decision dated December 8, 2004, the CA affirmed the NLRC ruling on the
reduction of the applicable salary rate, however, the CA skirted the constitutional issue raised by
the petitioner. His Motion for Reconsideration having been denied by the CA, petitioner brings
his cause to this Court.
Issue: Whether or not in involving the similar issue of granting unto the migrant worker back
wages equal to the unexpired portion of his contract of employment instead of limiting it to 3
months.
Held: The Court grants the petition. The word salaries in section 10(5) does not include
overtime and leave pay. For seafarers like petitioner, DOLE Department Order No. 33 series
1996, provides a Standard Employment Contract of Seafarers in which salary is understood as
the basic wage, exclusive of overtime, leave pay and other bonuses, whereas overtime pay is
compensation for all work performed in excess of the regular 8 hours, and holiday pay is
compensation for any work performed on designated rest days and holidays. The rendition of
overtime work and the submission of sufficient proof that said was actually performed are
conditions to be satisfied before a seaman could be entitled to overtime pay which should be
computed on the basis of 30% of the basic monthly salary.
But even if the Court were to disregard the timeline, the subject clause may not be declared
unconstitutional on the ground that it impinges on the impairment clause, for the law was
enacted in the exercise of the police power of the State to regulate a business, profession or
calling, particularly the recruitment and deployment of OFWs, with the noble end in view of
ensuring respect for the dignity and well-being of OFWs wherever they may be employed.

Case Digest_De La Salle University v De La Salle University Employees Association GR

No. 109002 April 12, 2000

Facts: On December 1986, De La Salle University and De La Salle University Employees

Association entered into a collective bargaining agreement with a life span of 3 years, that is,
from December 23, 1986-December 22, 1989. During the freedom period, or 60 days before
the expiration of the said collective bargaining agreement, the Union initiated negotiations with
the University for a new collective bargaining agreement, which however, turned out to be
unsuccessful, hence the Union filed a Notice of Strike with the National Conciliation and
Mediation Board, National Capital Region. After several conciliation-mediation meetings, 5 out
of the 11 issues raised in the Notice of Strike were resolved by the parties. A partial collective
bargaining agreement was executed by the parties. On March 18, 1991, the parties entered into
a Submission Agreement identifying the 6 unresolved issues. The parties appointed
Buenaventura Magsalin as voluntary arbitrator. The Voluntary Arbitrator is constrained to
respect the original intention of the parties, the same being not contrary to law, morals or public
policy. Subsequently, both parties filed their respective motions for reconsideration which,
however, were not entertained by the voluntary arbitrator.
On March 5, 1993, the University filed with the Second Division of this Court a petition for
certiorari with temporary restraining order and/or preliminary injunction assailing the decision of
the voluntary arbitrator, as having been rendered “in excess of jurisdiction and/or grave abuse of
discretion.”
Likewise, the Union also filed a petition for certiorari with the First Division. Upon motion by the
Solicitor General, both petitions were consolidated and transferred to the Second Division. The
Solicitor General came to the conclusion sufficient evidence to justify the Union’s proposal to
consider the University and the CSB as only one entity because the latter is but a mere integral
part of the university. Hence, this petition.
Issue: Whether or not the voluntary arbitrator committed grave abuse of discretion with
respect to (1) computer operators assigned at the University’s Computer Services Center and
the University’s discipline officers may be considered as confidential employees and should
therefore be excluded from the bargaining unit; (2) a union shop clause should be included in
the parties’ collective bargaining agreement; (3) the denial of the Union’s proposed method of
laying-off employees is proper; (4) the ruling that on the basis of the University’s proposed
budget, the University can no longer be required to grant a second round of wage increases for
the school years 1991-92; (5) the denial of the Union’s proposals on the deloading of the union
president is proper; (6) the finding that the mulit-sectoral committee is the legitimate group
which determines the annual salary increases; and (7) the ruling that 70% share in the
incremental tuition proceeds is the only source of salary increases and fringe benefits of the
employees is proper.
Held: The petitions in the consolidated cases are partially granted. On the first issue, the Court
agrees with the Solicitor General that the express exclusion of the computer operators and
discipline officers from the bargaining unit of rank-and-file employees in the 1986 collective
bargaining agreement does not bar any re-negotiation for the future inclusion of the said
employees in the bargaining unit. On the second issue, the right to join a labor organization
should carry with it the corollary right not to join the same.
On the third issue, the Supreme Court affirms the ruling of the voluntary arbitrator for the
inclusion of a union shop provision in addition to the existing maintenance of membership
clause in the collective bargaining agreement. The right to refrain from joining labor
organizations recognized by Section 3 of the Industrial Peace Act is however limited. The legal
protection granted to such right to refrain from joining is withdrawn by operation of law, where a
labor union and an employer have agreed on a closed shop, by virtue of which the employer
may employ only members of the collective bargaining union, and the employees must continue
to be members of the union for the duration of the contract in order to keep their jobs.
On the fourth issue, the university can no longer be required to grant a second round of wage
increases for the school years 1991-9222 and 1992-93 and charge the same to the incremental
proceeds. The voluntary arbitrator committed grave abuse of discretion amounting to lack of
excess of jurisdiction. On the fifth issue, the Supreme Court agrees with the voluntary
arbitrator’s rejection of the said demands, there being no justifiable reason for the granting of
the same. On the sixth issue, the Court finds that the voluntary arbitrator did not gravely abuse
his discretion on the matter. It appears that during the parties’ negotiations for a new collective
bargaining agreement, the Union demanded for a 25% and 40% salary increase for the 2nd and
3rd years. Assuming for the sake of argument that the said committee is the group responsible
for determining wage increases and fringe benefits, as ruled by the voluntary arbitrator, the
committee’s determination must still be based on duly audited financial statements.
On the secventh issue, the Court deems that any determination of this alleged error is
unnecessary and irrelevant, in view of the rulings on the fourth and preceding issues and there
being no evidence presented before the voluntary arbitrator that the University held incremental
tuition fee proceeds from which any wage increase or fringe benefit may be satisfied.

Case Digest_University of Sto. Tomas v National Labor Relations Commission, UST

Faculty Union, GR No. 89920 October 18, 1990

Facts: On June 19, 1989, the UST terminated the employment of all 16 union officers and
directors of respondent UST Faculty Union on the ground that the libelous and defamatory
attacks against the Father Rector has committed the offenses of grave misconduct, serious
disrespect to a superior and conduct unbecoming a faculty member. As a result of the dismissal
of said employees, some faculty members staged mass leaves of absence on June 28, 1989
and several days thereafter, disrupting classes in all levels at the University.
The faculty union filed a complaint for illegal dismissal and unfair labor practice witht eh DOLE.
The labor arbiter, on a prima facie showing that the termination was causing a serious labor
dispute, certified the matter to the Secretary of Labor and Employment for a possible
suspension of the effects of termination. Secretary Franklin Drilon subsequently issued an order
to accept the employees back to work under the same terms and conditions prevailing prior to
their dismissal. Petitioner UST filed a motion for reconsideration asking the Secretary of Labor
and Employment to either assume jurisdiction over the present case or certify it to the National
Labor Relations Commissions for compulsory arbitration without suspending the effects of the
termination of the 16 dismissed faculty members. Secretary Drilon modified his previous order.
The petitioner filed a motion for clarification which was subsequently withdrawn.
On August 14, 1989, the respondent union filed before the NLRC a motion to implement the
orders of the Honorable Secretary of Labor and Employment and to cite Atty. Joselito Guianan
Chan for contempt. The petitioner filed its opposition to the private respondent’s motion. The
NLRC issued a resolution ordering the university to comply and faithfully abide with the orders
of the Secretary of Labor and Employment. Hence, this petition.
Issue: Whether or not the NLRC gravely abused its discretion amounting to lack or excess of
jurisdiction when it directed the university to pay some of the dismissed faculty members
assigned to handle substantially equivalent academic assignments, full backwages, the date the
faculty members presented themselves for reinstatement up to the date of actual reinstatement
or payroll reinstatement.
Held: The petition is dismissed. The petitioner’s dogmatic insistence issuing substantially
equivalent academic assignments stems from the fact that the teaching loads of the dismissed
professors have already been assigned to other faculty members. It wants us to accept this
remedy as one resorted to in good faith. And yet, the petitioner’s employment of the temporary
restraining order as a pretext to enable it to substitute substantially equivalent academic
assignments even for those who were earlier already reinstated to their actual teaching loads
runs counter to the dictates of fair play.
This Court therefore resolves that the actual reinstatement of the non-reinstated faculty
members, pending resolution of the labor controversy before the NLRC, may take effect at the
start of the second semester of the schoolyear 1990-1991 but not later. With this arrangement,
the petitioner’s reasoning that it will be violating contracts with the faculty members who took
over the dismissed professors’ teaching loads becomes moot considering that, as it alleges in
its petition, it operates on a semestral basis.

Case Digest_Juanaria A. Rivera v United Laboratories Inc GR NO. 155639 April 22, 2009

Facts: Rivera commenced employment with respondent as senior manufacturing pharmacist.

She later became Director of UNILAB’s Manufacturing Division. In 1959, UNILAB adopted a
comprehensive retirement plan supported by a retirement fund, consisting of Trust Fund A
where it would put in its contributions for the account of the member-employee and Trust Fund
B consisting of the contributions of the members themselves. The parties do not dispute that
under the plan, a member is compulsorily retired upon reaching the normal retirement date
which is the date when the member has reached age 60 or has completed 30 years of service,
whichever comes first.
In 1988, Rivera completed 30 years of service and UNILAB retired her pursuant to the terms of
the plan. Based on her monthly salary at that time, and at one month’s terminal basic salary for
every year of service, Rivera’s retirement benefits amounted to P860,473.12 from Trust Fund A
and P186,858.21 from Trust Fund B.
It was withdrawn from the retirement fund and deposited in Trust Fund C, a special account
from which she could make withdrawals as she pleased. At Rivera’s request, UNILAB allowed
her to continue working for the company. She was even promoted to the position of Assistant
Vice-President. She rendered service to the company in this capacity until the end of 1992, at
which time, Rivera retired from employment with the company, as UNILAB put it and as
evidenced by a personnel action notice.
From 1993 to 1994, Rivera served as a personal consultant under contract with the Active
Research and Management Corporation in 1993 and with Fil-Asia Business Consultants in
1994. These are UNILAB’s sister companies which assigned Rivera to render service involving
UNILAB.
Then, the company amended its retirement plan. Rivera asked that her retirement benefits be
increased in accordance with the amended retirement program. UNILAB did not reply to this,
and Rivera made two follow up, reiterating her demand for additional retirement benefits.
UNILAB denied Rivera’s request. Rivera sought relief from the NLRC in an action against
UNILAB for recovery of unpaid retirement pay differential. In defense, UNILAB argued that the
complaint on the ground of prescription.
The Labor Arbiter dismissed the complaint for lack of merit. Rivera elevated the case to the CA
by way of a petition for certiorari under Rule 65 of the Rules of Court. The CA set aside the
assailed decision and resolution of the NLRC but remanded the case to the Labor Arbiter for
hearing on the merits. It found that Rivera’s claim for retirement had not yet prescribed at the
time of its filing. The CA however avoided ruling on the merits of the case by reason of what it
recognized as “an existing controversy as to the crucial fact of when precisely petitioner retired
from respondent company for purposes of determining whether or not she is covered by
respondent’s amended retirement plan so as to fix the amount of retirement benefits.
UNILAB moved for a reconsideration of the CA decision. Rivera, on the other hand, filed a
partial motion for reconsideration. The CA promulgated its resolution denying both motions for
lack of merit. Hence, the present petition.
Issue: Whether or not petitioner is covered by respondent’s amended retirement plan
Held: The court denies the petition and dismiss the claim for unpaid retirement pay differential
for lack of merit.
Retirement as a fact carries with it certain legal effects, one of which is the retired employee’s
termination of the services with the company as of the retirement date, in this case December
31, 1988. With this retirement, her coverage by the UNILAB retirement plan ceased based on
the express terms of the plan. As a consequence, Rivera’s retirement pay was computed; her
accrued retirement benefits under Trust Fund A and Trust Fund B of the plan were withdrawn,
and deposited in Trust Fund C from which she could make withdrawals. In fact, Rivera did
make withdrawals from Trust Fund C. Thus, there is no question that Rivera accepted her
retirement and its benefits in 1988.

Case Digest_Herminigildo Inguillo v First Philippine Scales GR NO. 165407 June 5, 2009

Facts: First Philippine Scales Inc employed Bergante and Inguillo as assemblers. In 1991,
FPSI and First Philippine Scales Industries Labor Unin entered into a Collective Bargaining
Agreement, the duration of which was for a period of 5 years. The members of FPSLU ratified
the CBA in a document entititled RATIPIKASYON NG KASUNDUAN. Berganted and Inguillo
who were member of FPSILU, signed the said document.
During the lifetime of the CBA, Bergante, Inguillo and several FPSI employees joined another
union, the Nagkakaisang Lakas ng Manggagawa (NLM), which was affiliated with a federation
called Katipunan (NLM-KATIPUNAN, for brevity). Subsequently, NLM-KATIPUNAN filed with
the Department of Labor and Employment an intro-union dispute against FPSILU and FPSI. In
said case, the Med-Arbiter decided in favor of FPSILU. It also ordered the officers and
members of NLM-KATIPUNAN to return FPSILU the amount of P90,000 pertaining to the union
dues erroneously collected from the employees. However, as no amount was recovered,
notices of garnishment were issued to UCPB and to FPSI for the latter to hold for FPSILU the
earnings of Domingo Grutas Jr and Inguillo, formerly FPSILU’s President and Secretary for
Finance.
Meanwhile, the executive board and members of the FPSILU addressed a document seeking
the termination of the services of certain employees including petitioner. Inguillo filed with the
NLRC a complaint against FPSI an/or Policarpio for illegal withholding of salary and damages.
Respondent terminated the services of the employees. Consequently, the Labor Arbiter issued
an order dismissing with prejudice the complaints of Go, Shirley Tapang, Yolanda Tapang,
Grutas and Trinidad. Bergante and Inguillo, the remaining complainants, were directed to
submit their respective position papers. The Labor Arbiter dismissed the remaining complaints
of Bergante and Inguillo and held that they were not illegally dismissed.
Bergante and Inguillo appealed before the NLRC, which reversed the Labor Arbiter’s Decision..
In reversing the Labor Arbiter, the NLRC ratiocinated that respondents failed to present
evidence to show that Bergante and Inquillo committed acts inimical to FPSILU’s interest.
Not satisfied with the disposition of their complaints, Bergante and Inquillo filed a petition for
certiorari under Rule 65 of the Rules of Court with the CA. The CA dismissed the petition for
lack of merit. Hence, this appeal.
Issue: Whether or not Bergante and Inquillo were illegally dismissed
Held: The instant petition is denied. The Court holds that while Bergante and Inguillo’s
dismissals were valid pursuant to the enforcement of Union Security Clause, respondents
however did not comply with the requisite procedural due process. While the Court upholds
dismissal pursuant to a union security clause, the same is not without a condition or restriction.
For to allow its untrammeled enforcement would encourage arbitrary dismissal and abuse by
the employer, to the detriment of the employees. Thus, to safeguard the rights of the
employees, the Court said time and again that dismissals pursuant to union security clauses are
valid and legal, subject only the requirement of due process, that is, notice and hearing prior to
dismissal. In like manner, it is emphasized that the enforcement of union security clauses is
authorized by law, provided such enforcement is not characterized by arbitrariness, and always
with due process. There are 2 aspects which characterize the concept of due process under the
Labor Code: one is substantive—whether the termination of employment was based on the
provisions of the Labor Code or in accordance with the prevailing jurisprudence; the other is
procedural—the manner in which the dismissal was effected.

Case Digest_Hotel Enterprises of the Philippines Inc v Samahan ng mga Manggagawa sa

Hyatt-National Union of Workers in the Hotel and Restaurant and Allied Industries
(SAMASAH-NUWHRAIN) GR No. 165756 June 5, 2009

Facts: Respondent Union is a certified collective bargaining agent of the rank-and-file

employees of Hyatt Regency Manila. In 2001, HEPI’s hotel business suffered a slump due to
the local and international economic slowdown, aggravated by events in the United States. An
audited financial report made by SGV indicated that the hotel suffered a gross operating loss.
According to petitioner, the management initially decided to cost-cut by implementing energy-
saving schemes. Meanwhile, the Union filed a notice of strike due to a bargaining deadlock
before the NCMB. In the course of the proceedings, HEPI submitted its economic proposals for
the rank-and-file employees covering the years 2001 and 2003. The Union accepted the
economic proposals. Hence, a new CBA was signed, adopting the manning standards for the
248 rank-and-file employees.
Then, HEPI issued a memorandum offering a Special Limited Voluntary Resignation/Retirement
Program to its regular employees. Employees who were qualified to resign or retire were given
separation packages based on the number of years of service. The vacant positions, as well as
the regular positions vacated, were later filled up with contractual personnel and agency
employees.
Subsequently, petitioner decided to implement a downsizing scheme after studying the
operating costs of its different divisions to determine the areas where it could obtain significant
savings.
On January 24, 2002, petitioner met with respondent Union to formally discuss the downsizing
program. The Union opposed the downsizing plan. On April 12, 2002, the Union filed a notice of
strike based on unfair labor practice against HEPI.
HEPI filed a motion to dismiss the notice of strike which was opposed by the Union. Then, the
Union filed a petition to suspend the effects of termination before the office of Secretary of
Labor. On May 5, 2002, the hotel management began implementing its downsizing plan
immediately terminating 7 employees due to redundancy and 41 more due to retrenchment or
abolition of positions.
A petition to declare the strike illegal was filed by petitioner. Acting Labor Secretary issued an
order certifying the labor dispute to the NLRC for compulsory arbitration and directing the
striking workers, except the 48 workers earlier terminated, to return to work within 24 hours.
HEPI filed a manifestation informing the NLRC of the pending petition to declare the strike
illegal. Because of this, the NLRC issued an order directing Labor Arbiter to immediately
suspend the proceedings in the pending petition to declare the strike illegal and to elevate the
records of the said case for consolidation with the certified case. However, the labor arbiter had
already issued a decision declaring the strike legal. Aggrieved, HEPI filed an appeal ad
cautelam before the NLRC questioning its order. On appeal, the NLRC reversed the labor
arbiter’s decision. The Union filed a petition for certiorari with the CA. But while the petition was
pending, the hotel management issued separate notices of suspension against each of the 12
Union officers involved in the strike.
The CA promulgated the assailed decision, reversing the resolution of the NLRC and reinstating
the decision of the Labor Arbiter which declared the strike valid. The CA also ordered the
reinstatement of the 48 terminated employees on account of the hotel management’s illegal
redundancy and retrenchment scheme and the payment of their backwages from the time they
were illegally dismissed until their actual reinstatement. HEPI moved for reconsideration but the
same was denied for lack of merit. Hence, this petition.
Issue: Whether or not the strike is illegal
Held: The petition is partly granted. The downsizing scheme implemented by petitioner is
hereby declared a valid exercise of management prerogative. Procedurally, a strike to be valid
must comply with Article 263 of the Labor Code. Accordingly, the requisites for a valid strike are:
(a) notice of strike filed with the DOLE 30 days before the intended date thereof or 15 days in
case of ULP; (2) a strike vote approved by a majority of the total union membership in he
bargaining unit concerned obtained by secret ballot in a meeting called for that purpose; and (c)
a notice to the DOLE of the results of the voting at least 7 days before the intended strike. The
requirements are mandatory and failure of a union to comply therewith renders the strike illegal.
In this case, respondent fully satisfied the procedural requirements prescribed by law.
Case Digest_Teodorico S. Miranda Jr v Asian Terminals Inc GR No. 174316 June 23, 2009
Facts: Petitioner was employed by respondent in 1991 as Checker I. He also became a
member of the Associated Port Checkers and Workers Union. On April 10, 1992, the petitioner
was appointed to the position of Shop Steward which is a union position under the payroll of the
company. The CBA between the union and ATI provided for the appointment of a Shop Steward
from among the union members, upon the recommendation of the union president. The Shop
Steward is a field representative of both the company and the union and acts as an independent
arbiter of all complaints brought to his attention.
On December 28, 1993, Roger Silva, President of APCWU, wrote a letter to the petitioner
regarding the recall of his designation as the union Shop Steward. A rift then developed
between the union leadership and certain union members, including the petitioner. In June
1994, the petitioner and some of the members of APCWU sent an undated letter to ATI
protesting the manner in which the APCWU leadership handled the affairs of the union. This led
to the formation of a grievance committee to investigate the complaints against the union
officers, including the petitioner. The petitioner, however, refused to participate in the
investigation.
Upon the conclusion of the investigation, the grievance committee issued its report
recommending to ATI the recall of the petitioner as Shop Steward and for his reversion to his
former position of Checker I, in accordance with the CBA. Acting on the recommendation of the
union, respondent ATI issued a Memorandum to the petitioner regarding his transfer.
The petitioner first filed a complaint against Roger Silva with the DOLE. In an Order issued by
the Med-Arbiter, the petitioner was ordered reinstated to the position of Shop Steward.
On October 3, 1995, the petitioner filed another complaint before the Med-Arbiter involving
money claims in the form of allowances, 13th month pay and attorney’s fees. The complaint was
dismissed by the Med-Arbiter. The petitioner also filed a series of complaints before the NLRC.
The petitioner filed a complaint for unfair labor practice, which was later amended to illegal
demotion with a claim for reduction or diminution in pay, against respondent ATI. Labor Arbiter
issued a Decision which dismissed the case against ATI for lack of cause of action.
While the cases filed by the petitioner were pending, the petitioner was re-assigned from the
position of Checker I to Checker I Mobile, which is lower in rank than Checker I. He was further
re-assigned to Vessel Operation Checker, which is designated only to Checker Grades II and III
and which positions were only assigned to casual Checkers.
The petitioner then filed a second complaint in the NLRC against the respondent for unfair labor
practice, illegal demotion and reduction and diminution of pay. Labor Arbiter dismissed the
complaint. A third complaint for Unfair Labor Practice and Illegal Demotion was filed by the
petitioner against union president. This was also dismissed. The petitioner appealed the order of
Labor Arbiter. The NLRC remanded the case to the office of origin for further proceedings.
Upon remand of the case, the case was re-raffled to Labor Arbiter. He ordered the respondent
to pay the petitioner indemnity in consonance with the Wenphil Doctrine. The dispositive portion
of the decision made matters confusing for the parties since it declared the petitioner to be
constructively dismissed and order the petitioner to be reinstated.
The petitioner then sought the execution of the reinstatement aspect of the decision. The
respondent appealed the decision of Labor Arbiter. The NLRC issued a TRO and declared the
Break Open Order as null and void. Petitioner filed a Petition before the CA. The CA reversed
the assailed decision and ruled that the reinstatement aspect of the labor arbiter’s decision is
immediately executor. However, the confusion remained as to which position the petitioner
should be reinstated. Hence, this petition.
Issue: Whether or not petitioner should be reinstated as Checker I
Held: Petition is dismissed for being moot and academic. The present labor case proceeded
despite the execution of the Quit Claim and Release. However, the resolution of this petition is
inevitably affected by the retrenchment of the petitioner from respondent ATI. Because of the
petitioner’s retrenchment, which was finally settled through the Quit Claim and Release, any
order for the reinstatement of the petitioner to the position of union Shop Steward can no longer
be executed by the union since the petitioner had been retrenched by the company. The
petitioner cannot also be reinstated to the position of Checker I, since he was already
retrenched by the respondent form such position and he released the company from any and all
claims with respect to his retrenchment.
Case Digest_Dr. Gil Y. Gamilla v Atty. Eduardo Mariño Jr A.C. No. 4763 March 20, 2003
Facts: Sometime in 1986 respondent Atty. Mariño Jr, as president of the UST Faculty union and
other union officers entered into a collective bargaining agreement with the management of UST
for the provision of economic benefits. Instead of creating a harmonious relationship between
the contracting parties, the collective bargaining agreement regrettably engendered dispute
arising from the interpretation and implementation thereof.
The 1986 collective bargaining agreement expired in 1988 but efforts to forge a new one
unfortunately failed. In 1989 the faculty members of UST went on strike and as a counter-
measure UST terminated the employment of 16 officers and directors of the UST Faculty Union
including respondent. The dismissal precipitated anew bitter legal battles which were resolved
by the Court in favor of the dismissed employees by ordering their reinstatement with
backwages.
In 1990 Secretary of Labor prescribed the terms and conditions of a 5-year collective bargaining
agreement between UST and the UST Faculty Union retroactive to 1988 when the 1986
collective bargaining agreement expired. In the same year, the administration of UST and the
UST Faculty Union also entered into a compromise agreement for the payment of P7,000,000
from which P5,000,000 was intended to settle the backwages and other claims of the 16 union
officers and directors of the UST Faculty Union. It appears from the record that backwages and
other claims of respondent and other concerned union officers and directors was paid
immediately by UST while the satisfaction of the balance was apparently deferred to some
unspecified time.
In 1992 UST and the UST Faculty Union executed a memorandum of agreement to settle the
salary increases and other benefits under the collective bargaining agreement effective 1988.
In accordance with the memorandum of agreement, UST took care of the disbursement to pay
for the expenses.
Complainants as members of the UST Faculty Union questioned the alleged lack of
transparency among the officers and directors of the union in the management and
disbursement of the monetary benefits for the faculty members.
On July 2, 1997, complainants filed the instant complaint for disbarment against Atty. Mariño
accusing him of compromising their entitlements under the 1986 collective bargaining
agreement without the knowledge, consent or ratification of the union members, failing to
account for the P7,000,000 received by him and other officers and directors, lack of
transparency in the administration and distribution of the remaining balance, and refusal to
remit.
On September 7, 1999, respondent filed his comment on the IBP Report and Resolution and
alleged the same contentions he previously asserted. In the meantime, the Regional Director
found merit and ordered the expulsion of respondent and the other officers and directors of the
union.
The Bureau of Labor Relations in the appeal set aside the order of the Regional Director. On
September 25, 2002 the court received the detailed Report and Recommendation of IBP
Commissioner and the IBP Resolution of the Board of Governors adopting and approving the
Report which recommended the lifting of Atty. Mariño’s suspension from law practice since he
had sufficiently accounted for the funds in question.
Issue: Whether or not respondent should be suspended from the practice of law
Held: Respondent is reprimanded for his misconduct with a warning that a more drastic
punishment will be imposed on him upon a repetition of the same act.
There was lack of notice and transparency in respondent’s dual role as lawyer and president of
the UST Faculty Union when he obtained P4,200,000 as attorney’s fees. Without ruling on the
validity of the collection so as not to pre-empt the decision on this issue, the record does not
show any justification for such huge amount of compensation nor any clear differentiation
between his legal services and his tasks as union president comprising in all probability the
same duties for which he had collected a hefty compensation as attorney for the union.
Case Digest_Club Filipino Inc v Benjamin Bautista GR No. 168406 July 13, 2009
Facts: The union and the company had a CBA which expired on May 31, 2000. Prior to the
expiration of the CBA and within the freedom period, the union made several demands for
negotiation but the company replied that it could not muster a quorum, thus no CBA
negotiations could be held.
Sometime in 2000, the union submitted its formal CBA proposal to the company’s negotiating
panel and repeatedly asked for the start of negotiations. No negotiations, however, took place
for various reasons proffered by the company, among them the illness of the chairman of the
management panel.
In order to compel the company to negotiate, respondents, filed a request for preventive
mediation with the NCMB. Their strategy however failed to bring the management to the
negotiating table.

Case Digest_National Union of Workers In Hotels, Restaurants and Allied Industries v

NLRC GR No. 179402 September 30, 2008

Facts: Petitioner NUWHRAIN is a legitimate labor organization composed of rank-and-file

employees of the Hotel, while respondent is the owner and operator of said Hotel. The Hotel
entered into a CBA with Hi-Manila Pavilion Hotel Labor Union, the exclusive bargaining agent of
the rank-and-file employees of the Hotel. Both parties consented that the representation aspect
and other non-economic provisions of the CBA were to be effective for 5 years or until June 30,
2005; and the economic provisions of the same were to be effective or 3 years. The parties
subsequently re-negotiate the economic provisions of the CBA and extended the term of their
effectivitity for another 2 years.
During the 60-day freedom period, the Hotel and HIMPHLU negotiated the extension of the
provisions of the existing CBA for 2 years. The parties signed the MOA and the employees
ratified it on May 27, 2005.
NUWHRAIN was accorded by the Labor Relatios Divison of the DOLE the status of a legitimate
labor organization. Thereafter, NUWHRAIN exercised the right to challenge the majority status
of the incumbent union, HIMPHLU by filing a petition for certification election.
On June 21, 2005, NUWHRAIN was accorded by the Labor Relations Division of the DOLE the
status of a legitimate labor organization. NUWHRAIN exercised the right to challenge the
majority status of the incumbent union, HIMPHLU by filing a petition for certification election.
The Industrial Relations Division of DOLE allowed the registration of the MOA executed
between HIMPHLU and the Hotel, extending the effectivitity of the existing CBA for another 2
years.
After the lapse of 60-day freedom period, but pending the disposition of the Petition for
Certification Election filed by NUWHRAIN, HIMPHLU served the Hotel with a written demand for
the dismissal of 36 employees forllowing their expulsion from HIMPHLU for alleged acts of
disloyalty and violation of its Constitution and by-laws.
On August 1, 2005, the Hotel issued Disciplinary Action Notices to the 36 employees identified
in the written demand of HIMPHLU. The Notices directed the 36 employees to submit a written
explanation for their alleged acts of disloyalty and violation of the union security clause for which
HIMPHLU sought their dismissal.
The Hotel called the contending unions and the employees concerned for a reconciliatory
conference in an attempt to avoid the dismissal of the 36 employees. NUWHRAIN asserted that
the Hotel committed unfair labor practice when it issued the Notices to the 36 employees who
switched allegiance from HIMPHLU to NUWHRAIN. Respondent insisted that it did not commit
unfair labor practice nor was it liable for moral and exemplary damages.
In a Resolution, the NLRC pronounced that the Hotel was not guilty of unfair labor practice.
NUWHRAIN filed a Motion for Reconsideration of the foregoing NLRC Resolution. It was
denied by the NLRC in another Resolution. Thus, NUWHRAIN filed a Petition for Certiorari
before the CA.
In the meantime, the Certification Election for regular rank and file employees of the Hotel was
held, which HIMPHLU won. It was accordingly certified as the exclusive bargaining agent for
rank and file employees of the Hotel.
The CA promulgated its decision upholding eh resolution of the NLRC. It declared that the
Hotel had acted prudently when it issued the Notice to the 36 employees after HIMPHLU
demanded their dismissal. NUHWRAIN's Motion for Reconsideration was denied. Hence, the
present petition.
Issue: whether or not the hotel had committed unfair labor practice
Held: the instant petition is denied. In the case at bar, NLRC found and the CA is affirmed, that
the officers of the respondent and the Hotel did not make statements that would have
constituted unfair labor practice. Findings of fact of the NLRC are given much weight and are
considered conclusive by this Court. It is only when such findings are not substantially
supported by the records that this Court will step in and make its independent evaluation of the
facts.Considering the expertise of these agencies in matters pertaining to labor disputes, the
findings of administrative agencies of the Department of Labor are generally accorded not only
respect, but also finality.

Case Digest_S.S. Ventures International Inc v S.S. Ventures Labor Union

Facts: Petitioner S.S. Ventures International Inc is in the business of manufacturing sports
shoes. Respondent S.S. Ventures Labor Union is a labor organization registered with the
DOLE.
On March 21, 2000, the Union filed with DOLE a petition for certification election in behalf of the
rank-and-file employees of Ventures. Five hundred forty two signatures, 82 of which belong to
2008.
Terminated Ventures employees, appeared on the basic documents supporting the petition. ON
August 21, 2000, Ventures filed a Petition to cancel the Union's certificate of registration
invoking the grounds set forth in Article 239(a) of the Labor Code. The Union denied committing
the imputed acts of fraud or forgery. In its supplemental reply memorandum filed on March 20,
2001, Ventures cited other instances of fraud and misrepresentation, claiming that the
“affidavits” executed by 82 alleged Union members show that they were deceived into signing
paper minutes or were harrassed to signing their attendance in the organizational meeting.
Ventures added that some employees signed the “affidavits” denying having attended such
meeting.
In a decision, Regional Deirector of DOLE-Region III fournd for Ventures. It resolved to cancel
Certificate Registration No. (RO300-00-02-UR-0003).
Aggrieved, the Union interposed a motion for reconsideration, a recourse which appeared to
have been forwarded to the BLR. Although it would later find this motion to have been belatedly
filed, the BLR, over the objection of Ventures which filed a Motion to Expunge, gave it due
course and treated it as an appeal.
Despite Ventures' motion to expunge the appeal, the BLR Director rendered a decision granting
the Union's appeal and reversing the decision of Dione.
Ventures sought reconsideration fo the above decision but was denied by the BLR. Ventures
then went to the CA on a petition for certiorarti under Rule 65. The CA dismissed Ventures'
petiton. Venturs' motion for reconsideration met a similar fate. Hence, this peition for review
under Rule 45.
Issue: whether or not the inclusion fo the 82 employees in the list of attendees to the January
9, 2000 meeting is an internal matter within the ambit of the worker's right ot self-organization
and outside the sphere of influence of this office and the petitioner
Held: The petition is denied. The right to form, join, or assist a union is specifically protected by
Art. XIII, Section 3 of the Constitution and such right, according to Art. III, Sec. 8 of the
Constitution and Art. 246 of the Labor Code, shall not be abridged. Once registered with the
DOLE, a union is considered a legitimate labor organization endowed with the right and
privileges granted by law to such organization. While a certificate of registration confers a union
with legitimacy with the concomitant right to participate in or ask for certification election in a
bargaining unit, the registration may be canceled or the union may be decertified as the
bargaining unit, in which case the union is divested of the status of a legitimate labor
organization. Among the grounds for cancellation is the commission of any of the acts
enumerated in Art. 239(a) of the Labor Code, such as fraud and misrepresentation in
connection with the adoption or ratification of the union's constitution and like documents.
Whatever misgivings the petitioner may have with regard to the 82 dismissed employees is
better addressed in the inclusion-exclusion proceedings during a pre-election conference. The
issue surrounding the involvement of the 82 employees is a matter of membership or voter
eligibility. It is not a ground to cancel union registration.

Case Digest_Republic of the Philippines Represented by DOLE v Kawashima Textile MFG

Philippines Inc.

Facts: KFWU filed with DOLE a Petition for Certification Election to be conducted in the
bargaining until composed of 145 rank-and-file employees of respondent. Attached to its petition
are a Certificate of Creation of Local/Chapter issued on January 19, 2000 by DOLE, stating that
it submitted to said office a Charter Certificate issued to it by the national federation Phil.
Transport & General Workers Organization, and a Report of Creation of Local/Chapter.

Respondent filed a Motion to Dismiss the petition on the ground that KFWU did not acquire any
legal personality because its membership of mixed rank-and-file and supervisory employees
violated Article 245 of the Labor Code, and its failure to submit its books of account contravened
the ruling of the Court in
Progressive Development Corporation v Secretary, DOLE.
In an Order, Med-Arbiter found KFWU's legal personality defective and dismissed its petition for
certification election. Meanwhile, KFWU appealed to the DOLE which issued a decision granting
the appeal.
The DOLE held that Med-Arbiter Bactin's reliance on the decisions of the Court was misplaced,
for while 245 declares supervisory employees ineligible for membership in a labor organization
for rank-and-file employees, the provision did not state the effect of such prohibited membership
on the legitimacy of the labor organization and its right to file for certification election.
Respondent filed a Motion for Reconsideration but the DOLE denied the same. However, on
appeal by respondent, the CA rendered the decision assailed herein, reversing the August 18,
2000 DOLE. KFWU filed a Motion for Reconsideration but the CA denied it.
The RP filed the present petition to seek closure.
Issue: Whether or not a mixed membership of rank-and-file and supervisory employees in a
union is a ground for the dismissal of a petition for certification election
Held: The petition is granted. In the case at bar, as respondent union's membership list
contains the names of at least twenty-seven (27) supervisory employees in Level Five positions,
the union could not, prior to purging itself of its supervisory employee members, attain the status
of a legitimate labor organization. Not being one, it cannot possess the requisite personality to
file a petition for certification election.n Dunlop, n which the labor organization that filed a
petition for certification election was one for supervisory employees, but in which the
membership included rank-and-file employees, the Court reiterated that such labor organization
had no legal right to file a certification election to represent a bargaining unit composed of
supervisors for as long as it counted rank-and-file employees among its members.
Except when it is requested to bargain collectively, an employer is a mere bystander to any
petition for certification election; such proceeding is non-adversarial and merely investigative, for
the purpose thereof is to determine which organization will represent the employees in their
collective bargaining with the employer. The choice of their representative is the exclusive
concern of the employees; the employer cannot have any partisan interest therein; it cannot
interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it,
note even a mere allegaiton that some employees participating in a petition for certification
election are actually managerial employees will lend an employer legal personality to block the
certification election.

Case Digest_Oscar P. Garcia v Malayan Insurance Co Inc GR NO. 160339 March 14, 2008

Facts: Petitioners were employed as risk inspectors by Malayan Insurance Company Inc.
They were also officers of the Malayan Employees Association-FFW (MEA-FFW)
On December 29, 1999, private respondent issued to petitioner Garcia an Inter-Office
Memorandum giving him 24 hours to explain his involvement in the theft of company property,
consisting of diskettes, logbooks and other documents of the Risk Analysis Section, and to
return the same. Private respondent also issued to petitioner Morales a similar memorandum
but with additional instruction for his preventive suspension for 30 days pending investigation.

In their separate written explanations, petitioners denied their involvement in the theft and
countered that the filing of the charges against them was a form of harassment against their
union MEA-FFW, which was in a deadlock with respondent in the ongoing negotiations over the
terms of their collective bargaining agreement.

After the conduct of an informal administrative hearing, private respondent notified petitioner
Garcia of the termination of his employment for serious misconduct and a violation of the
Company’s Code of Ethics, which under Article 282 of the Labor Code, as amended, justify the
dismissal from the Company.

Petitioners filed before the Labor Arbiter a Complaint for illegal dismissal, illegal suspension,
unfair labor practice, damages and attorney’s fees. The Labor Arbiter dismissed their
Complaint. Petitioners appealed to the National Labor Relations Commission, which affirmed
the LA decision. The NLRC also denied petitioner’s Motion for Reconsideration.

Petitioners filed a Petition for Certiorari with the CA, which dismissed it. Petitioner’s Motion for
Reconsideration was also denied. Hence, the present petition.

Issue: Whether or not respondent company acted with bad faith in terminating the services of
the petitioners

Held: Petition is partly granted. No bad faith can be attributed to private respondent in
dismissing petitioner Morales despite such scant evidence. Its error in the assessment of the
available evidence cannot be equated with bad faith as there is no evidence that it was
animated by malice or ill motive. Hence, its action in dismissing petitioner Morales may have
been illegal, but did not amount to unfair labor practice.

It is noted that while the participation of petitioner Garcia in said theft and cover-up is detailed in
said affidavit, the same cannot be said of the connection of Morales to said incidents. To recall,
petitioner Morales was dismissed for conspiring in the cover-up of the theft. However, it appears
that the only evidence of petitioner Morales's involvement in the cover-up is the statement of De
Guzman that it was said petitioner who instructed him to get a parcel from a third person.

Verily, the Court finds no indication that the CA misappreciated the evidence when it affirmed
the findings of the NLRC and LA against petitioner Garcia.
In fine, the Court sees no compelling reason to disturb the concurrent factual findings of the CA,
NLRC and LA that petitioner Garcia was involved in the theft of respondent's properties and in
the attempt to cover up said act for the same are supported by substantial evidence.

However, the Court finds scant evidence to connect petitioner Morales to the theft or its cover-
up and therefore declares that the CA committed a grievous error in upholding his dismissal.

Case Digest Union of Filipro Employees-Drug, Food and Allied Industries Uniions-
Kilusang Mayo Uno v Nestl Philippines Inc GR NO. 158930-31 March 3, 2008

Facts: UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-file
employees of Nestle belonging to the latter’s Alabang ang Cabuyao plants. On April 4, 2001, as
the existing collective bargaining agreement between Nestle and UFE-DFA-KMU was to end,
the Presidents of the Alabang and Cabuyao Divisions informed Nestle of their intent to open
new CBA for the year 2001-2004. In response, Nestle informed them that it was also preparing
its own counter-proposal and proposed ground rules to govern the impending conduct of the
CBA negotiations.

On May 29, 2001, Nestle reiterated its stance that unilateral grants, one-time company grants,
company-initiated policies and programs, which include but are not limited to the Retirement
Plan, Incidental Straight Duty Pay and Calling Pay Premium, are by their very nature proper
subjects of CBA negotiations and therefore shall be excluded.

Nestle requested NCMB to conduct preventive mediation proceedings between it and UFE-
DFA-KMU owing to an alleged impasse in their dialogue that the parties failed to reach any
agreement on the proposed CBA.

On November 26, 2001, prior to holding the strike, Nestle filed with the DOLE a Petition for
Assumption of Jurisdiction, to assume jurisdiction over the current labor dispute in order to
effectively enjoin any impending strike by the members of the union at the Nestle’s Cabuyao
Plant in Laguna.

On November 29, 2001, Secretary Sto. Tomas issued an order directing the parties to meet and
convene for the discussion of the union proposals and company counter-proposals before the
NCMB. The union sought reconsideration but nonetheless moved for additional time to file its
position paper. Sec. Sto. Tomas denied said motion for reconsideration.

On 7 February 2002, Nestlé and UFE-DFA-KMU filed their respective position papers. Nestlé
addressed several issues concerning economic provisions of the CBA as well as the non-
inclusion of the issue of the Retirement Plan in the collective bargaining negotiations. On the
other hand, UFE-DFA-KMU limited itself to the issue of whether or not the retirement plan was a
mandatory subject in its CBA negotiations.

On 11 February 2002, Sec. Sto. Tomas allowed UFE-DFA-KMU the chance to tender its stand
on the other issues raised by Nestlé but not covered by its initial position paper by way of a
Supplemental Position Paper.

UFE-DFA-KMU, instead of filing the above-mentioned supplement, filed several pleadings.

Thereafter, UFE-DFA-KMU filed a Petition for Certiorari before the Court of Appeals, alleging
that Sec. Sto. Tomas committed grave abuse of discretion amounting to lack or excess of
jurisdiction when she issued the Orders of 11 February 2002 and 8 March 2002.

Secretary of DOLE came out with an order dismissing the charge of unfair labor practice against
the company.

UFE-DFA-KMU moved to reconsider the aforequoted ruling, but such was subsequently denied
on 6 May 2002.

For the second time, UFE-DFA-KMU went to the Court of Appeals via another Petition for
Certiorari seeking to annul the Orders of 02 April 2002 and 06 May 2002 of the Secretary of the
DOLE, having been issued in grave abuse of discretion amounting to lack or excess of
jurisdiction.

On 27 February 2003, the appellate court promulgated its Decision on the twin petitions for
certiorari, ruling entirely in favor of UFE-DFA-KMU.

Both parties appealed the aforequoted ruling. Nestlé essentially assailed that part of the
decision finding the DOLE Secretary to have gravely abused her discretion amounting to lack or
excess of jurisdiction when she ruled that the Retirement Plan was not a valid issue to be
tackled during the CBA negotiations; UFE-DFA-KMU, in contrast, questioned the appellate
court’s decision finding Nestlé free and clear of any unfair labor practice.

Since the motions for reconsideration of both parties were denied by the Court of Appeals in a
joint Resolution dated 27 June 2003, UFE-DFA-KMU and Nestlé separately filed the instant
Petitions for Review on Certiorari under Rule 45 of the Rules of Court, as amended. The union
sought to reverse the CA decision insofar as the appellate court’s failure to find Nestle guilty of
unfair labor practice.

The Court resolved to consolidate the petitions. The decision is now the subject for the union’s
Motion for Partial Reconsideration and Nestle’s Motion for Clarification.

Issue: Whether or not Nestle is guilty of unfair labor practice

Held: Petition is denied with finality.

A read-through of this Court’s Decision reveals that the ambiguity is more ostensible than real.
This Court’s Decision of 22 August 2006 designated marked boundaries as to the implications
of the assailed Orders of the Secretary of the DOLE. We said therein that 1) the Retirement
Plan is still a valid issue for herein parties’ collective bargaining negotiations; 2) the Court of
Appeals committed reversible error in limiting to the issue of the ground rules the scope of the
power of the Secretary of Labor to assume jurisdiction over the subject labor dispute; and 3)
Nestlé is not guilty of unfair labor practice. Nowhere in our Decision did we require parties to
submit to negotiate by themselves the tenor of the retirement benefits of the concerned
employees of Nestlé, precisely because the Secretary of the DOLE had already assumed
jurisdiction over the labor dispute subject of herein petitions. Again, we spell out what
encompass the Secretary’s assumption of jurisdiction power. The Secretary of the DOLE has
been explicitly granted by Article 263(g) of the Labor Code the authority to assume jurisdiction
over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to
the national interest, and decide the same accordingly. And, as a matter of necessity, it includes
questions incidental to the labor dispute; that is, issues that are necessarily involved in the
dispute itself, and not just to that ascribed in the Notice of Strike or otherwise submitted to him
for resolution. In the case at bar, the issue of retirement benefits was specifically what was
presented before the Secretary of the DOLE; hence, We reject Nestlé’s interpretation. Our
decision is crystal and cannot be interpreted any other way. The Secretary having already
assumed jurisdiction over the labor dispute subject of these consolidated petitions, the issue
concerning the retirement benefits of the concerned employees must be remanded back to him
for proper disposition.
All told, in consideration of the points afore-discussed and the fact that no substantial arguments
have been raised by either party, this Court remains unconvinced that it should modify or
reverse in any way its disposition of herein cases in its earlier Decision. The labor dispute
between the Nestle and UFE-DFA-KMU has dragged on long enough. As no other issues are
availing, let this Resolution write an ending to the protracted labor dispute between Nestlé and
UFE-DFA-KMU (Cabuyao Division).

For a charge of unfair labor practice to prosper, it must be shown that Nestlé was motivated by
ill will, "bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to morals,
good customs, or public policy, and, of course, that social humiliation, wounded feelings, or
grave anxiety resulted x x x"27 in disclaiming unilateral grants as proper subjects in their
collective bargaining negotiations. While the law makes it an obligation for the employer and the
employees to bargain collectively with each other, such compulsion does not include the
commitment to precipitately accept or agree to the proposals of the other. All it contemplates is
that both parties should approach the negotiation with an open mind and make reasonable effort
to reach a common ground of agreement.
Herein, the union merely bases its claim of refusal to bargain on a letter28 dated 29 May 2001
written by Nestlé where the latter laid down its position that "unilateral grants, one-time
company grants, company-initiated policies and programs, which include, but are not limited to
the Retirement Plan, Incidental Straight Duty Pay and Calling Pay Premium, are by their very
nature not proper subjects of CBA negotiations and therefore shall be excluded therefrom." But
as we have stated in this Court’s Decision, said letter is not tantamount to refusal to bargain. In
thinking to exclude the issue of Retirement Plan from the CBA negotiations, Nestlé, cannot be
faulted for considering the same benefit as unilaterally granted, considering that eight out of
nine bargaining units have allegedly agreed to treat the Retirement Plan as a unilaterally
granted benefit. This is not a case where the employer exhibited an indifferent attitude towards
collective bargaining, because the negotiations were not the unilateral activity of the bargaining
representative. Nestlé’s desire to settle the dispute and proceed with the negotiation being
evident in its cry for compulsory arbitration is proof enough of its exertion of reasonable effort at
good-faith bargaining.
In the case at bar, Nestle never refused to bargain collectively with UFE-DFA-KMU. The
corporation simply wanted to exclude the Retirement Plan from the issues to be taken up during
CBA negotiations, on the postulation that such was in the nature of a unilaterally granted
benefit. An employer’s steadfast insistence to exclude a particular substantive provision is no
different from a bargaining representative’s perseverance to include one that they deem of
absolute necessity. Indeed, an adamant insistence on a bargaining position to the point where
the negotiations reach an impasse does not establish bad faith.[fn24 p.10] It is but natural that
at negotiations, management and labor adopt positions or make demands and offer proposals
and counter-proposals. On account of the importance of the economic issue proposed by UFE-
DFA-KMU, Nestle could have refused to bargain with the former – but it did not. And the
management’s firm stand against the issue of the Retirement Plan did not mean that it was
bargaining in bad faith. It had a right to insist on its position to the point of stalemate.
The foregoing things considered, this Court replicates below its clear disposition of the issue:
The concept of "unfair labor practice" is defined by the Labor Code as:
ART. 247. CONCEPT OF UNFAIR LABOR PRACTICE AND PROCEDURE FOR
PROSECUTION THEREOF. – Unfair labor practices violate the constitutional right of
workers and employees to self-organization, are inimical to the legitimate interests of
both labor and management, including their right to bargain collectively and otherwise
deal with each other in an atmosphere of freedom and mutual respect, disrupt industrial
peace and hinder the promotion of healthy and stable labor-management relations.
x x x x.
The same code likewise provides the acts constituting unfair labor practices committed
by employers, to wit:
ART. 248. UNFAIR LABOR PRACTICES OF EMPLOYERS. – It shall be unlawful for an
employer to commit any of the following unfair labor practices:
(a) To interfere with, restrain or coerce employees in the exercise of their right to
self-organization;
(b) To require as a condition of employment that a person or an employee shall
not join a labor organization or shall withdraw from one to which he belongs;
(c) To contract out services or functions being performed by union members
when such will interfere with, restrain or coerce employees in the exercise of their
right to self-organization;
(d) To initiate, dominate, assist or otherwise interfere with the formation or
administration of any labor organization, including the giving of financial or other
support to it or its organizers or supporters;
(e) To discriminate in regard to wages, hours of work, and other terms and
conditions of employment in order to encourage or discourage membership in
any labor organization. Nothing in this Code or in any other law shall stop the
parties from requiring membership in a recognized collective bargaining agent as
a condition for employment, except those employees who are already members
of another union at the time of the signing of the collective bargaining agreement.
Employees of an appropriate collective bargaining unit who are not members of
the recognized collective bargaining agent may be assessed a reasonable fee
equivalent to the dues and other fees paid by members of the recognized
collective bargaining agent, if such non-union members accept the benefits under
the collective agreement. Provided, That the individual authorization required
under Article 242, paragraph (o) of this Code shall not apply to the nonmembers
of the recognized collective bargaining agent; [The article referred to is 241, not
242. – CAA]
(f) To dismiss, discharge, or otherwise prejudice or discriminate against an
employee for having given or being about to give testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed by this Code;
(h) To pay negotiation or attorney’s fees to the union or its officers or agents as
part of the settlement of any issue in collective bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers and
agents of corporations associations or partnerships who have actually
participated, authorized or ratified unfair labor practices shall be held criminally
liable. (Emphasis supplied.)
Herein, Nestlé is accused of violating its duty to bargain collectively when it purportedly
imposed a pre-condition to its agreement to discuss and engage in collective bargaining
negotiations with UFE-DFA-KMU.
A meticulous review of the record and pleadings of the cases at bar shows that, of the
two notices of strike filed by UFE-DFA-KMU before the NCMB, it was only on the second
that the ground of unfair labor practice was alleged. Worse, the 7 November 2001 Notice
of Strike merely contained a general allegation that Nestlé committed unfair labor
practice by bargaining in bad faith for supposedly "setting pre-condition in the ground
rules (Retirement issue)." (Notice of Strike of 7 November 2001; Annex "C" of UFE-DFA-
KMU Position Paper; DOLE original records, p. 146.) In contrast, Nestlé, in its Position
Paper, did not confine itself to the issue of the non-inclusion of the Retirement Plan but
extensively discussed its stance on other economic matters pertaining to the CBA. It is
UFE-DFA-KMU, therefore, who had the burden of proof to present substantial evidence
to support the allegation of unfair labor practice.
A perusal of the allegations and arguments raised by UFE-DFA-KMU in the
Memorandum (in G.R. Nos. 158930-31) will readily disclose the need for the
presentation of evidence other than its bare contention of unfair labor practice in order to
make certain the propriety or impropriety of the ULP charge hurled against Nestlé. Under
Rule XIII, Sec. 4, Book V of the Implementing Rules of the Labor Code:
x x x. In cases of unfair labor practices, the notice of strike shall as far as
practicable, state the acts complained of and the efforts to resolve the dispute
amicably." (Emphasis supplied.)
In the case at bar, except for the assertion put forth by UFE-DFA-KMU, neither the
second Notice of Strike nor the records of these cases substantiate a finding of unfair
labor practice. It is not enough that the union believed that the employer committed acts
of unfair labor practice when the circumstances clearly negate even a prima facie
showing to warrant such a belief. (Tiu v. National Labor Relations Commission, G.R. No.
123276, 18 August 1997, 277 SCRA 681, 688.)
Employers are accorded rights and privileges to assure their self-determination and
independence and reasonable return of capital. (Capitol Medical Center, Inc. v. Meris,
G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.) This mass of privileges
comprises the so-called management prerogatives. (Capitol Medical Center, Inc. v.
Meris, G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.) In this connection,
the rule is that good faith is always presumed. As long as the company’s exercise of the
same is in good faith to advance its interest and not for purpose of defeating or
circumventing the rights of employees under the law or a valid agreement, such exercise
will be upheld. (Capitol Medical Center, Inc. v. Meris, G.R. No. 155098, 16 September
2005, 470 SCRA 125, 136.)
There is no per se test of good faith in bargaining. (Hongkong Shanghai Banking
Corporation Employees Union v. National Labor Relations Commission, G.R. No.
125038, 6 November 1997, 281 SCRA 509, 518.) Good faith or bad faith is an inference
to be drawn from the facts. (Hongkong Shanghai Banking Corporation Employees Union
v. National Labor Relations Commission, G.R. No. 125038, 6 November 1997, 281
SCRA 509, 518.) Herein, no proof was presented to exemplify bad faith on the part of
Nestlé apart from mere allegation. Construing arguendo that the content of the
aforequoted letter of 29 May 2001 laid down a pre-condition to its agreement to bargain
with UFE-DFA-KMU, Nestlé’s inclusion in its Position Paper of its proposals affecting
other matters covered by the CBA negates the claim of refusal to bargain or bargaining
in bad faith. Accordingly, since UFE-DFA-KMU failed to proffer substantial evidence that
would overcome the legal presumption of good faith on the part of Nestlé, the award of
moral and exemplary damages is unavailing.
FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF THE PHILIPPINES (FASAP),
Petitioner,
vs.
PHILIPPINE AIRLINES, INC., PATRIA CHIONG and COURT OF APPEALS, Respondents.

Facts:
For resolution is respondent Philippine Airlines, Inc.’s (PAL) Motion for Reconsideration1 of our
Decision of July 22, 2008.
In its Motion for Reconsideration, PAL maintains that it was suffering from financial distress
which justified the retrenchment of more than 1,400 of its flight attendants. This, it argued, was
an established fact. Furthermore, FASAP never assailed the economic basis for the
retrenchment, but only the allegedly discriminatory and baseless manner by which it was carried
out.
PAL asserts that it has presented proof of its claimed losses by attaching its petition for
suspension of payments, as well as the June 23, 1998 Order of the Securities and Exchange
Commission (SEC) approving the said petition for suspension of payments, in its Motion to
Dismiss and/or Consolidation of Case filed with the Labor Arbiter in NLRC-NCR Case No. 06-
05100-98, or the labor case subject of the herein petition.
In the instant Motion for Reconsideration, PAL attached a copy of its audited financial
statements for fiscal years 1996, 1997 and 1998. It justifies the submission before the Court of
Appeals of its 2002-2004, and not the 1996-1998, audited financial statements, to show that as
of the time of their submission with the Court of Appeals, PAL was still under rehabilitation, and
not for the purpose of establishing its financial problems during the retrenchment period.
In the present case, PAL beseeches this Honorable Court to take a second look at the peculiar
facts and circumstances that clearly show that the recall/rehire was done in good faith. These
facts and circumstances make the case of PAL totally different from the other cases decided by
this Honorable Court where it found bad faith on the part of the employer for immediately
rehiring or hiring employees after retrenchment.

Issue:
Won the retrenchment was valid.

Held:

Again, it must be emphasized that in order for a retrenchment scheme to be valid, all of the
following elements under Article 283 of the Labor Code must concur or be present, to wit:
(1) That retrenchment is reasonably necessary and likely to prevent business losses
which, if already incurred, are not merely de minimis, but substantial, serious, actual and
real, or if only expected, are reasonably imminent as perceived objectively and in good
faith by the employer;
(2) That the employer served written notice both to the employees and to the
Department of Labor and Employment at least one month prior to the intended date of
retrenchment;
(3) That the employer pays the retrenched employees separation pay equivalent to one
(1) month pay or at least one-half (½) month pay for every year of service, whichever is
higher;
(4) That the employer exercises its prerogative to retrench employees in good faith for
the advancement of its interest and not to defeat or circumvent the employees’ right to
security of tenure; and,
 (5) That the employer uses fair and reasonable criteria in ascertaining who would be
dismissed and who would be retained among the employees, such as status, efficiency,
seniority, physical fitness, age, and financial hardship for certain workers.
In the absence of one element, the retrenchment scheme becomes an irregular exercise of
management prerogative. The employer’s obligation to exhaust all other means to avoid further
losses without retrenching its employees is a component of the first element as enumerated
above. To impart operational meaning to the constitutional policy of providing full protection to
labor, the employer’s prerogative to bring down labor costs by retrenching must be exercised
essentially as a measure of last resort, after less drastic means have been tried and found
wanting.31
In the instant case, PAL admitted that since the pilots’ strike allegedly created a situation of
extreme urgency, it no longer implemented cost-cutting measures and proceeded directly to
retrench. This being so, it clearly did not abide by all the requirements under Article 283 of the
Labor Code. At the time it was implemented, the retrenchment scheme under scrutiny was not
triggered directly by any financial difficulty PAL was experiencing at the time, nor borne of an
actual implementation of its proposed downsizing of aircraft. It was brought about by – and
resorted to as an immediate reaction to – a pilots’ strike which, in strict point of law and as
herein earlier discussed, may not be considered as a valid reason to retrench, nor may it be
used to excuse PAL for its non-observance of the requirements of the law on retrenchment
under the Labor Code.
On the basis of the foregoing disquisition, we find no further need to discuss the other
arguments advanced by the parties in their pleadings and during the oral arguments.
Therefore, this Court finds no reason to disturb its finding that the retrenchment of the flight
attendants was illegally executed. As held in the Decision sought to be reconsidered, PAL failed
to observe the procedure and requirements for a valid retrenchment. Assuming that PAL was
indeed suffering financial losses, the requisite proof therefor was not presented before the
NLRC which was the proper forum. More importantly, the manner of the retrenchment was not
in accordance with the procedure required by law. Hence, the retrenchment of the flight
attendants amounted to illegal dismissal. Consequently, the flight attendants affected are
entitled to the reliefs provided by law, which include backwages and reinstatement or separation
pay, as the case may be.

MARIVAL TRADING, INC., VIRGINIA A. MANUEL and BEATRICE A. MANUEL,

Petitioners,

NATIONAL LABOR RELATIONS COMMISSION (NLRC) and MA. VIANNEY D. ABELLA,

Facts:
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to reverse the
Decision dated 30 June 2005 of the Court of Appeals in CA-G.R. SP No. 87820 entitled, “Ma.
Vianney D. Abella v. National Labor Relations Commission, Marival Trading, Inc., Virginia A.
Manuel and Beatriz A. Manuel,” which affirmed with modifications the Decision of the National
Labor Relations Commission (NLRC) dated 10 September 2002 and the Decision of the Labor
Arbiter dated 30 May 2001.
Abella worked as chemist/quality controller at herein petitioner Marival Trading Inc. (Marival), for
almost eight years. Marival is a corporation engaged in the production, distribution and sale of
veterinary products, while petitioners Virginia and Beatriz Manuel are its President and Vice
President (VP)-Personnel, respectively.
On 14 July 2000, Ma. Roxanney A. Manuel (Manuel), Vice President and General
Manager of Marival, conducted a staff meeting together with the other officers of the company,
Gregorio Albeza (Albeza) and Ma. Claire Distor (Distor), packaging supervisor and importation
manager, respectively. After the meeting, Manuel asked Albeza and Distor to stay behind to
discuss other matters. She requested two male employees to move some tables and placed
Abella’s belongings on one of these tables. Apparently, while the rearrangement of the tables
was going on, Abella was not in the room. She came in when Manuel, Albeza, and Distor were
already having their own meeting. While Abella was attending to her things, her shoulder bag
fell loudly on the floor, disrupting the officers’ meeting. Manuel approached Abella to ask what
the problem was and the latter expressed her resentment over the fact that the employees were
not informed first before their tables were moved. Manuel asked Abella to leave the room but
she refused to do so. It was only upon Albeza’s prodding that Abella later left the room. Abella
then stayed in the laboratory for the rest of the afternoon.
Three days later, Abella received a memo from Manuel directing her to explain within 24
hours why no disciplinary action should be imposed for her disrespectful insubordination and
unprofessional conduct.
Abella denied the accusations against her. She clarified that her shoulder bag
accidentally fell to the floor, and such should not have caused any offense to the officers
present at the meeting. She maintained that she aired her side regarding the table
rearrangement in a tactful and courteous manner; that the order for her to get out of the room
was unjustified; and that her freedom to lawfully air her grievance in relation to her security of
tenure at work should be respected.
Abella filed a complaint for illegal dismissal with the Labor Arbiter, alleging that she was
dismissed from work without just cause and without due process.
On 30 June 2005, the Court of Appeals rendered a Decision affirming with modification the
NLRC and the Labor Arbiter’s Decisions. The Court of Appeals ruled that Abella’s behavior
amounted to misconduct and disrespect in violation of company rules, but it was not so gross as
to be meted the ultimate penalty of dismissal.

Issue:
WON Abella was illegally dismissed

Held:
Misconduct has been defined as improper or wrong conduct. It is the transgression of
some established and definite rule of action, a forbidden act, a dereliction of duty, willful
character, and implies wrongful intent and not mere error of judgment. The misconduct to be
serious must be of such grave and aggravated character and not merely trivial and unimportant.
Such misconduct, however serious, must nevertheless be in connection with the employee’s
work to constitute just cause for his separation. Thus, for misconduct or improper behavior to
be a just cause for dismissal, (a) it must be serious; (b) must relate to the performance of the
employee’s duties; and (c) must show that the employee has become unfit to continue working
for the employer. Indeed, an employer may not be compelled to continue to employ such
person whose continuance in the service would be patently inimical to his employer’s business.

However, as discussed above, in order to consider it a serious misconduct that would

justify dismissal under the law, it must have been done in relation to the performance of her
duties as would show her unfit to continue working for her employer. The acts complained of,
under the circumstances they were done, did not in any way pertain to her duties as
chemist/quality controller.

This case should be distinguished from the previous cases where we held that the use of
insulting and offensive language constitutes gross misconduct justifying an employee’s
dismissal.
 In the case at bar, records do not show that Abella made any such false and malicious
statements against her superiors. Quite obviously, affiants failed to cite particular acts or
circumstances which would show that Abella was extremely disrespectful to her superior.
Affiants merely alleged that respondent threw her bag and other things noisily and uttered
unpleasant remarks at her employer. Abella merely uttered, “Sana naman next time na
uurungin yung gamit naming (sic), eh sasabihin muna sa amin.” We do not find the
remarks unpleasant. Quite the contrary, the words “SANA NAMAN” which Abella supposedly
uttered, suggest that she was merely making a request or entreaty to her superior for a little
more consideration. The utter lack of respect for her superior was not patent. False and
malicious statements were not made by Abella. Her acts were not intended to malign or to cast
aspersion on Manuel, Marival’s Vice-President and General Manager. The affidavits were not
sufficient to prove Abella’s gross misconduct. Viewed in its context, the act is not of such
serious and grave character to warrant dismissal. Given the factual circumstances of this case,
Abella’s act clearly do not constitute serious misconduct as to justify her dismissal.
After a finding of illegal dismissal herein, we apply the foregoing provision entitling the
employee to reinstatement without loss of seniority rights and other privileges and full
backwages, inclusive of allowances and other benefits or their monetary equivalent
computed from the time the compensation was not paid up to the time of his
reinstatement.

Thus, the award of backwages by the Court of Appeals is in order. However, the Court of
Appeals’ period of computation of the award of backwages must be modified.

PHILIPPINE TRANSMARINE G.R. NO. 157975

CARRIERS, INC.,
Petitioner,
FELICISIMO CARILLA, Promulgated:

Facts:
Before us is a Petition for Review on Certiorari filed by Philippine Transmarine Carriers, Inc.
(petitioner) seeking to annul and set aside the Decision of the Court of Appeals (CA) dated
November 26, 2002 and its Resolution dated April 10, 2003 in CA-G.R. SP No. 67220.

On November 18, 1993, Felicisimo Carilla (respondent) was hired by petitioner, a manning
agent, in behalf of its principal, Anglo-Eastern Shipmanagement Ltd., to work as Master on
board MV Handy-Cam Azobe for twelve months. Their approved POEA contract provided that
respondent would get a basic monthly pay of US$1700.00, fixed monthly overtime of
US$765.00, master's allowance of US$170.00 and leave with pay of six days per month or
US$340.00 or a total of US$2,975.00 a month.
On August 25, 1994, respondent filed with the Philippine Overseas and Employment Agency
(POEA) a complaint for illegal dismissal with claims for salaries and other benefits for the
unexpired portion of his contract as well as unremitted allotments and damages. He alleged
that: he was dismissed without notice and hearing and without any valid reason; petitioner's
unlawful act deprived him of his expected monthly benefits for the unexpired portion of his
contract which totaled to US$16,660.00 i.e., US$2975.00 x 5 months and 18 days;
petitioner withheld his allotment for the entire month of May 1994 in the sum of US$1,700 and
from June 1 to 7 in the amount of US$396.67 or a total of US$2,096.67, as well as his accrued
leave pay for the entire time respondent served on the vessel in the amount of US$2,119.33.
Respondent prayed for payment of these amounts, attorney's fees and damages.
Petitioner filed its Answer contending that: respondent's termination was for cause; he failed to
take the necessary steps to ensure the safety of the vessel and its cargo while plying the waters
of South Korea and Keelung port causing petitioner to incur a huge amount of damages on
cargo claims and vessel repairs; respondent's incompetence is therefore penalized with
dismissal; despite the fact that respondent was warned of his lapses, he had not shown any
improvement which forced petitioner to dismiss and replace him with a competent one; thus,
cost had to be incurred. Petitioner asked for moral and exemplary damages and attorneys fees
as its counterclaim.

Issue:

WON the petitioner was illegally terminated

Held:
We find no merit in the petition.

To begin with, the question of whether respondent was dismissed for just cause is a
question of fact which is beyond the province of a petition for review on certiorari. It is
fundamental that the scope of our judicial review under Rule 45 of the Rules of Court is
confined only to errors of law and does not extend to questions of fact. More so, in labor cases
where the doctrine applies with greater force. The LA and the NLRC have ruled on the factual
issues, and these were affirmed by the CA. Thus, they are accorded not only great respect but
also finality, and are deemed binding upon us so long as they are supported by substantial
evidence.
In termination cases, the burden of proof rests upon the employer to show that the dismissal of
the employee is for just cause and failure to do so would mean that the dismissal is not justified.
A dismissed employee is not required to prove his innocence of the charges leveled against him
by his employer. The determination of the existence and sufficiency of a just cause must be
exercised with fairness and in good faith and after observing due process.
Respondent was dismissed because of his alleged incompetence. To prove respondent's
incompetence while on board the vessel, petitioner presented a piece of paper dated June 1,
1994 entitled “Logs of Events During Capt Carilla (sic) Command,” enumerating therein the
alleged incidents where damages to timber products and on the vessel occurred; and the
Senior Officer Evaluation Reports showing respondent's unsatisfactory performance, prepared
by Chief Officer R. Miu and Chief Engineer N.K. Jaggi, who allegedly had served with
respondent and had seen his work on board the vessel.

PILIPINO TELEPHONE CORPORATION, petitioner,

vs.
PILIPINO TELEPHONE EMPLOYEES ASSOCIATION (PILTEA), PELAGIO S. BRIONES II,
GEORGE L. DE LEON, LECEL M. FIDEL, AUGUSTO C. FRANCISCO, OLIVER B. ANTONIO,
RONALDO B. CORONEL, CHRISTOPHER L. HERRERA and GEM TORRES, respondents.
x-----------------------------x
G.R. No. 160094 June 22, 2007
PILIPINO TELEPHONE EMPLOYEES ASSOCIATION (PILTEA), PELAGIO S. BRIONES II,
GEORGE L. DE LEON, and GEM TORRES, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and PILIPINO TELEPHONE
CORPORATION,
Facts:
The Collective Bargaining Agreement (CBA) between the Union and Pilipino Telephone
Corporation (the Company) was due to expire on December 31, 1997. On October 30, 1997, the
Union submitted to the Company its proposals for the renegotiation of the non-representation
aspects of their CBA. As there was a standstill on several issues, the parties submitted their
dispute to the National Conciliation and Mediation Board (NCMB) for preventive mediation.4 The
conciliation proceedings before the NCMB failed.
On July 13, 1998, the Union filed a Notice of Strike5 with the NCMB for unfair labor practice due
to the alleged acts of "restraint and coercion of union members and interference with their right
to self-organization" committed by the Company's Revenue Assurance Department (RAD)
Manager Rosales and its Call Center Department Manager, Manny Alegado, to wit:
1. Requiring employees to execute undated resignation letters prior to regularization as
a condition for continued employment.
2. Preventing employees from displaying Union flags and CBA's slogans.
3. Prohibiting employees from conducting and preventing employees from participating
in Union activities.
4. Requiring employees to render forced overtime to prevent them from attending Union
meetings and activities after office hours.
5. Using vulgar and insulting language such as "Kahit sa puwet n'yo isaksak ang mga
banderang yan!"
6. Threatening employees who join concerted Union activities with disciplinary action.
7. Discouraging employees from participating in Union activities by branding the
activities illegal and prohibited by law.
8. Abuse of Company Rules and Regulations to prevent the free exercise by the Union
and its members of their right to self organization and free expression (e.g. issuing show
cause memos for refusal to render overtime and vandalism).
9. Utilizing security guards to harass employees who participate in Union activities by
requiring the guards to take down the names of employees who participate in the Union
activities.6
The Company filed a petition for Consolidated Assumption of Jurisdiction with the Office of the
Secretary of Labor.
The Labor Arbiter found the strike illegal for having been conducted in defiance of Secretary
Laguesma's August 14, 1998 assumption order and for non-compliance with the procedural
requirements for the conduct of a strike under the Labor Code and its implementing rules.
It is settled that these requirements are mandatory in nature and failure to comply therewith
renders the strike illegal.24
In the case at bar, the Union staged the strike on the same day that it filed its second notice of
strike. The Union violated the seven-day strike ban. This requirement should be observed to
give the Department of Labor and Employment (DOLE) an opportunity to verify whether the
projected strike really carries the approval of the majority of the union members. 25

Issue:
WON the strike was illegal

Held:
Having settled that the subject strike was illegal, we shall now determine the proper penalty to
be imposed on the union officers who knowingly participated in the strike.
Both the Labor Arbiter and the NLRC imposed the penalty of dismissal on the striking union
officers after finding that: a) the strike was illegal for having been conducted in defiance of
Secretary Laguesma's August 14, 1998 Order of assumption of jurisdiction and for non-
compliance with the procedural requirements for the conduct of a strike under the Labor Code
and its implementing rules; b) the grounds relied upon by the Union in its second notice of strike
were substantially the same as those set forth in its first notice of strike; c)
It cannot be overemphasized that strike, as the most preeminent economic weapon of the
workers to force management to agree to an equitable sharing of the joint product of labor and
capital, exert some disquieting effects not only on the relationship between labor and
management, but also on the general peace and progress of society and economic well-being
of the State.

FACULTY ASSOCIATION OF MAPUA INSTITUTE OF TECHNOLOGY (FAMIT), petitioner,

vs.
HON. COURT OF APPEALS, and MAPUA INSTITUTE OF TECHNOLOGY, respondents.

Facts:
This is an appeal to reverse and set aside the Decision1 dated August 21, 2003 and the
Resolution2 dated June 3, 2004 of the Court of Appeals in CA-G.R. SP No. 71479. The
appellate court had reversed the Decision of the Office of the Voluntary Arbitrators. It held that
the incorporation of the new faculty ranking to the 2001 Collective Bargaining Agreement (CBA)
between petitioner and private respondent has been the intention of the parties to the CBA.
The facts in this case are undisputed.
In July 2000, private respondent Mapua Institute of Technology (MIT) hired Arthur Andersen to
develop a faculty ranking and compensation system. On January 29, 2001, in the 5th CBA
negotiation meeting, MIT presented the new faculty ranking instrument to petitioner Faculty
Association of Mapua Institute of Technology (FAMIT).3 The latter agreed to the adoption and
implementation of the instrument, with the reservation that there should be no diminution in rank
and pay of the faculty members.
On April 17, 2001, FAMIT and MIT entered into a new CBA effective June 1, 2001.4 It
incorporated the new ranking for the college faculty in Section 8 of Article V which states that,
"A new faculty ranking shall be implemented in June 2001. However, there shall be no
diminution in the existing rank and the policy ‘same rank, same pay’ shall apply."5
When the CBA took effect, the Vice President for Academic Affairs issued a memorandum to all
deans and subject chairs to evaluate and re-rank the faculty under their supervision using the
new ranking instrument. Eight factors were to be considered and given their corresponding
weights/points according to levels attained per factor. Among these were: (1) educational
attainment; (2) professional honors received; (3) relevant training; (4) relevant professional
experience; (5) scholarly work and creative efforts; (6) award winning works; (7) officership in
relevant technical and professional organizations; and (8) administrative positions held at MIT.6
After a month, MIT called FAMIT’s attention to what it perceived to be flaws or omissions in the
CBA signed by the parties. In a letter7 dated July 5, 2001 to FAMIT, MIT requested for an
amendment of the following CBA annexes – Annex "B" (Faculty Ranking Sheet); Annex "C"
(College Faculty Rates for Permanent Faculty Only); and Annex "D" (H.S. Faculty Rates for
Permanent Faculty Only). MIT claimed that with respect to Annexes "C" and "D," these
contained data under the heading "TOTAL POINTS" that were not germane to the two other
columns in both annexes. With regard to the Faculty Ranking Point Range sheet of the new
faculty ranking instrument, MIT avers that this was inadvertently not attached to the CBA.
FAMIT rejected the proposal. It said that these changes would constitute a violation of the
ratified 2001 CBA and result in the diminution of rank and benefits of FAMIT college faculty. It
argued that the proposed amendment in the ranking system for the college faculty revised the
point ranges earlier agreed upon by the parties and expands the 19 faculty ranks to 23.
Meanwhile, MIT instituted some changes in the curriculum during the school year 2000-2001
which resulted in changes in the number of hours for certain subjects. Thus, MIT adopted a new
formula for determining the pay rates of the high school faculty: Rate/Load x Total Teaching
Load = Salary where total teaching load equals number of classes multiplied by hours of service
per week divided by 3 hours (as practiced, one unit subject is equal to 3 hours service).

Issue:
WHETHER THE PRIVATE RESPONDENT MAY PROPERLY, LEGALLY AND VALIDLY
ALTER, CHANGE AND/OR MODIFY UNILATERAL[L]Y PROVISIONS OF THE
COLLECTIVE [BARGAINING] AGREEMENT (CBA) IT HAD NEGOTIATED, ENTERED
INTO AND SIGNED WITH THE PETITIONER AND SUBSEQUENTLY RATIFIED AND
ENFORCED BY THE PARTIES; AND
II
WHETHER PRIVATE RESPONDENT MAY PROPERLY, LEGALLY AND VALIDLY
CHANGE[,] ALTER AND/OR REPLACE UNILATERAL[L]Y A PROVISION OR
FORMULA EMBODIED IN A PERFECTED, EXISTING AND ALREADY ENFORCED
CBA TO THE PREJUDICE, OR MORE SPECIFICALLY TO THE DIMINUTION OF
SALARY/BENEFITS AND DOWNGRADING OF RANKS, OF ITS COLLEGE AND HIGH
SCHOOL FACULTY.11

Held:
On the first issue, FAMIT avers that MIT’s new proposal on faculty ranking and evaluation for
the college faculty is an unlawful modification, alteration or amendment of the existing CBA
without approval of the contracting parties.
On the other hand, MIT argues that the new faculty ranking instrument was made in good faith
and in the exercise of its inherent prerogative to freely regulate according to its own discretion
and judgment all aspects of employment.
Considering the submissions of the parties, in the light of the existing CBA, we find that the new
point range system proposed by MIT is an unauthorized modification of Annex "C" of the 2001
CBA. It is made up of a faculty classification that is substantially different from the one originally
incorporated in the current CBA between the parties. Thus, the proposed system contravenes
the existing provisions of the CBA, hence, violative of the law between the parties.
Until a new CBA is executed by and between the parties, they are duty-bound to keep the
status quo and to continue in full force and effect the terms and conditions of the existing
agreement. The law does not provide for any exception nor qualification on which economic
provisions of the existing agreement are to retain its force and effect. Therefore, it must be
understood as encompassing all the terms and conditions in the said agreement.13
The CBA during its lifetime binds all the parties. The provisions of the CBA must be respected
since its terms and conditions "constitute the law between the parties." Those who are entitled
to its benefits can invoke its provisions. In the event that an obligation therein imposed is not
fulfilled, the aggrieved party has the right to go to court and ask redress.14 The CBA is the norm
of conduct between petitioner and private respondent and compliance therewith is mandated by
the express policy of the law.15
On the second issue, FAMIT avers that MIT unilaterally modified the CBA formula in
determining the salary of a high school faculty.

CALAMBA MEDICAL CENTER vs.NLRC

Facts:

The Calamba Medical Center (petitioner), a privately-owned hospital, engaged the

services of medical doctors-spouses Ronaldo Lanzanas (Dr. Lanzanas) and Merceditha
Lanzanas (Dr. Merceditha) in March 1992 and August 1995, respectively, as part of its team of
resident physicians. Reporting at the hospital twice-a-week on twenty-four-hour shifts,
respondents were paid a monthly "retainer" of P4,800.00 each.1 It appears that resident
physicians were also given a percentage share out of fees charged for out-patient treatments,
operating room assistance and discharge billings, in addition to their fixed monthly retainer.2

The work schedules of the members of the team of resident physicians were fixed by
petitioner's medical director Dr. Raul Desipeda (Dr. Desipeda). And they were issued
identification cards3 by petitioner and were enrolled in the Social Security System (SSS).4
Income taxes were withheld from them.5

On March 7, 1998, Dr. Meluz Trinidad (Dr. Trinidad), also a resident physician at the hospital,
inadvertently overheard a telephone conversation of respondent Dr. Lanzanas with a fellow
employee, Diosdado Miscala, through an extension telephone line. Apparently, Dr. Lanzanas
and Miscala were discussing the low "census" or admission of patients to the hospital.

Dr. Desipeda whose attention was called to the above-said telephone conversation issued to Dr.
In the meantime, then Sec. Cresenciano Trajano of the Department of Labor and Employment

thus amended his original complaint to include illegal dismissal. His and Dr. Merceditha's
complaints were consolidated and docketed as NLRC CASE NO. RAB-IV-3-9879-98-L. By
Decision of March 23, 1999, Labor Arbiter Antonio R. Macam dismissed the spouses'
complaints for want of jurisdiction upon a finding that there was no employer-employee
relationship between the parties, the fourth requisite or the "control test" in the determination of
an employment bond being absent.

On appeal, the NLRC, by Decision of May 3, 2002, reversed the Labor Arbiter's findings,
Petitioner's motion for reconsideration having been denied, it brought the case to the Court of
Appeals on certiorari. The appellate court, by June 30, 2004 Decision, initially granted
petitioner's petition and set aside the NLRC ruling. However, upon a subsequent motion for
reconsideration filed by respondents, it reinstated the NLRC decision in an Amended In finding
the existence of an employer-employee relationship between the parties, the appellate court
held:

Issue:

the direct supervision and control over the respondents.

Held:

The fact is the petitioner's Medical Director still has to approve the schedule of duties
of the respondents. The respondents stressed that the petitioner's Medical Director
also issues instructions or orders to the respondents relating to the means and
methods of performing their duties, i.e. admission of patients, manner of
characterizing cases, treatment of cases, etc., and may even overrule, review or
revise the decisions of the resident physicians. This was not controverted by the
 petitioner. The foregoing factors taken together are sufficient to constitute the fourth
element, i.e. control test, hence, the existence of the employer-employee relationship. In
denying that it had control over the respondents, the petitioner alleged that the
respondents were free to put up their own clinics or to accept other retainership
agreement with the other hospitals. But, the petitioner failed to substantiate the
allegation with substantial evidence. (Emphasis and underscoring supplied)24

This Court is unimpressed.

Under the "control test," an employment relationship exists between a physician and a hospital if
the hospital controls both the means and the details of the process by which the physician is to
accomplish his task.29

Where a person who works for another does so more or less at his own pleasure and is not
subject to definite hours or conditions of work, and is compensated according to the result of his
efforts and not the amount thereof, the element of control is absent.30

As priorly stated, private respondents maintained specific work-schedules, as determined by

petitioner through its medical director, which consisted of 24-hour shifts totaling forty-eight hours
each week and which were strictly to be observed under pain of administrative sanctions.

That petitioner exercised control over respondents gains light from the undisputed fact that in
the emergency room, the operating room, or any department or ward for that matter,
respondents' work is monitored through its nursing supervisors, charge nurses and orderlies.
Without the approval or consent of petitioner or its medical director, no operations can be
undertaken in those areas. For control test to apply, it is not essential for the employer to
actually supervise the performance of duties of the employee, it being enough that it has the
right to wield the power.31

With respect to respondents' sharing in some hospital fees, this scheme does not sever the
employment tie between them and petitioner as this merely mirrors additional form or another
form of compensation or incentive similar to what commission-based employees receive as
contemplated in Article 97 (f) of the Labor Code, thus:

"Wage" paid to any employee shall mean the remuneration or earning, however
designated, capable of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece, or commission basis, or other method of
calculating the same, which is payable by an employer to an employee under a written
or unwritten contract of employment for work done or to be done, or for services
rendered or to be rendered and includes the fair and reasonable value, as determined by
the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the
employer to the employee. x x x (Emphasis and underscoring supplied),

WHEREFORE, the Decision of the Court of Appeals in CA-G.R. SP No. 75871 is AFFIRMED
with MODIFICATION in that the award by the National Labor Relations Commission of 10% of
the total judgment award as attorney's fees is reinstated. In all other aspects, the decision of the
appellate court is affirmed.
 NAMAWU vs. Marcopper Mining
Facts:
Petitioner is engaged in the exploratation, development and extraction of copper and
other mineral ores by virtue of lease and other contracts with the Philippine government,
through the Bureau of Mines and Geosciences and the Department of Environment and Natural
Resources. It employs more than 1,000 workers.[2] One of petitioners projects is the operation
of the San Antonio Copper Project, an orebody with an estimated life of at least twenty years.
petitioner granted its employees a year-end profit bonus, the amount of which was based on
employment category, i.e., 75% of their monthly salary to rank-and-file, 80% to security guards,
and 90% to staff.
Private respondent National Mines and Allied Workers Union and its local chapter Marcopper
Employees Labor Union (collectively "union") filed on December 26, 1994 a preventive
mediation case with the Department of Labor and Employment Regional Office No. IV, alleging
the following unfair labor practices: violation of collective bargaining agreement concerning job
evaluation and discrimination against rank-and-file in connection with the grant of the profit
bonus.[
The National Conciliation and Mediation Board (NCMB) conducted conciliation proceedings, but
the parties failed to reach a settlement. Thus, respondents filed a Notice of Strike
In a letter dated January 17, 1995, Conciliator-Mediator Wilfredo P. Santos informed the union
that the issues involved in the Notice of Strike are non-strikeable and are appropriate subjects of
the grievance machinery with voluntary arbitration as the terminal
The order was served on the union on February 24 (NAMAWU) and February 25, 1995 (MELU).
Notwithstanding receipt of the order, on February 27, 1995, the union went on strike.
Issue:
Won the legality of the strike and the termination handed down to the striking employees as well
as their entitlement to additional yearend profit bonus for 1994.

Held: . We rule simply that pending arbitration proceedings, petitioner cannot be compelled to
accept the workers who failed to return to work.

We cannot but highlight the national interest involved in the instant case. Petitioner Marcopper
operates the San Antonio Copper Project in Marinduque. The project is financed through long
term loans granted by the Asian Development Bank and its co-financers, in the aggregate
amount of US$40,000,000.00. It also supplies electrical power to the entire province of
Marinduque.[25] In the assumption order of the Secretary, it was emphasized that:c

Any disruption in the operations of the Company will adversely affect its financial status and
consequently its capacity to pay the loans acquired. Considering that the Company’s project is
basically financed by these loans, the continued operation of the project is threatened.
Consequently, the means of livelihood of about 1,500 employees stands to suffer

Furthermore, the government will also be prejudiced by any work stoppage in the Company
since it would mean loss of taxes and foreign exchange earnings from one of the major
contributors of its sources of funds

Any work stoppage will also adversely affect the whole province of Marinduque whose supply of
electrical energy depends on the uninterrupted operations in the Company.[

We note from the records that following petitioners manifestation, as concurred in by the union,
the NLRC issued an Order dated May 31, 1995 holding in abeyance the hearings of the
case[27] until the instant petition for certiorari is resolved.[28] We thus enjoin the NLRC to
expedite the conciliation proceedings, and direct the NLRC to immediately set the case for
hearing and terminate the compulsory arbitration proceedings within sixty (60) days, and to
resolve the dispute within thirty (30) calendar days from submission for resolution thereof.

CONSIDERING THE FOREGOING, the Court Resolved to GRANT the petition. The order of
respondent Acting Secretary of Labor dated March 20, 1995 is hereby SET ASIDE insofar as it
directs petitioner to accept, pending resolution of the issues raised in the compulsory arbitration
proceedings before the NLRC, all returning workers under the same terms and conditions prior
to the work stoppage.

The National Labor Relations Commission is directed to immediately set for hearing NLRC CC
No. 0000106-95 and to terminate the compulsory arbitration proceedings within sixty (60) days,
and to resolve the dispute within thirty (30) calendar days from submission for resolution
thereof.

NUWHRAIN vs. CA

Facts:

The Hotel entered into a Collective Bargaining Agreement with HI-MANILA PAVILION
HOTEL LABOR UNION (HIMPHLU), the exclusive bargaining agent of the rank-and-file
employees of the Hotel. Both parties consented that the representation aspect and other non-
economic provisions of the Collective Bargaining Agreement were to be effective for five years
or until 30 June 2005; and the economic provisions of the same were to be effective for three
years or until 30 June 2003. The parties subsequently re-negotiated the economic provisions of
the Collective Bargaining Agreement and extended the term of their effectivity for another two
years or until 30 June 2005.5

During the 60-day freedom period which preceded the expiration of the Collective Bargaining
Agreement, starting on 1 May 2005 and ending on 30 June 2005, the Hotel and HIMPHLU
negotiated the extension of the provisions of the existing Collective Bargaining Agreement for
two years, effective 1 July 2005 to 30 June 2007. The parties signed the Memorandum of
Agreement on 20 May 2005 and the employees ratified it on 27 May 2005.6

On 21 June 2005, NUWHRAIN was accorded by the Labor Relations Division of the Department
of Labor and Employment (DOLE) the status of a legitimate labor organization.7 Thereafter,
NUWHRAIN exercised the right to challenge the majority status of the incumbent union,
HIMPHLU, by filing a Petition for Certification Election on 28 June 2005.8

On 5 July 2007, the Industrial Relations Division of the DOLE allowed the registration of the
Memorandum of Agreement executed between HIMPHLU and the Hotel, extending the
effectivity of the existing Collective Bargaining Agreement for another two years.9

After the lapse of the 60-day freedom period, but pending the disposition of the Petition for
Certification Election filed by NUWHRAIN, HIMPHLU served the Hotel with a written demand
dated 28 July 200510 for the dismissal of 36 employees following their expulsion from HIMPHLU
for alleged acts of disloyalty and violation of its Constitution and by-laws. An Investigation
Report11 was attached to the said written demand, stating that the 36 employees, who were
members of HIMPHLU, joined NUWHRAIN, in violation of Section 2, Article IV of the Collective
Bargaining Agreement, which provided for a union security clause.
On 1 August 2005, the Hotel issued Disciplinary Action Notices13 (Notices) to the 36 employees
identified in the written demand of HIMPHLU. The Notices directed the 36 employees to submit
a written explanation for their alleged acts of disloyalty and violation of the union security clause
for which HIMPHLU sought their dismissal. NUWHRAIN proceeded to file a Notice of Strike
before the National Conciliation and Mediation Board (NCMB) on 8 September 2005 on the
ground of unfair labor practice under Article 248, paragraphs (a) and (b) of the Labor Code.15
The Secretary of Labor intervened and certified the case for compulsory arbitration with the
NLRC. The case was docketed as NLRC NCR CC No. 000307-05 NCMB NCR NS 09-199-05,
entitled IN RE: Labor Dispute at Manila Pavilion Hotel
Issue: won the dismissal of the 36 employees is tantamount to unfair labor practice.
Held:

Art. 248. Unfair labor practices of employers.

(e) To discriminate in regard to wages, hours of work, and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization. Nothing
in this Code or in any other law shall prevent the parties from requiring membership in a
recognized collective bargaining agent as a condition for employment, except of those
employees who are already members of another union at the time of the signing of the collective
bargaining agreement x x x. (Emphasis supplied.)

The law allows stipulations for "union shop" and "closed shop" as a means of encouraging
workers to join and support the union of their choice in the protection of their rights and interests
vis-à-vis the employer. By thus promoting unionism, workers are able to negotiate with
management on an even playing field and with more persuasiveness than if they were to
individually and separately bargain with the employer.26 In Villar v. Inciong,27 this Court held that
employees have the right to disaffiliate from their union and form a new organization of their
own; however, they must suffer the consequences of their separation from the union under the
security clause of the Collective Bargaining Agreement.

In the present case, the Collective Bargaining Agreement includes a union security provision.28
To avoid the clear possibility of liability for breaching the union security clause of the Collective
Bargaining Agreement and to protect its own interests, the only sensible option left to the Hotel,
upon its receipt of the demand of HIMPHLU for the dismissal of the 36 employees, was to
conduct its own inquiry so as to make its own findings on whether there was sufficient ground to
dismiss the said employees who defected from HIMPHLU. The issuance by the respondent of
the Notices requiring the 36 employees to submit their explanations to the charges against them
was the reasonable and logical first step in a fair investigation. It is important to note that the
Hotel did not take further steps to terminate the 36 employees. Instead, it arranged for
reconciliatory conferences between the contending unions in order to avert the possibility of
dismissing the 36 employees for violation of the union security clause of the Collective
Bargaining Agreement.

Suarez vs. National Steel

Facts:

Respondent National Steel Corporation was engaged in the business of manufacturing steel
products needed for pipe making, ship building, can-making and production of appliances.
Sometime in 1994, respondent suffered substantial financial losses due to an increase in the
volume of steel products manufactured by foreign countries. With this development, respondent
adopted an organizational streamlining program that resulted in the retrenchment of seven
hundred (700) employees in its main plant in Iligan City, among whom were herein petitioners.
At that time, respondent and the National Steel Labor Union-Federation of Free Workers
(NASLU-FFW), the certified collective bargaining agent of respondent's rank-and-file
employees, were negotiating for the renewal of the Collective Bargaining Agreement (CBA)
which expired on June 30, 1994.

On July 18, 1994, respondent sent out individual notices to the seven hundred (700) employees
affected by the retrenchment, including petitioners. The notices specifically stated that their
services were terminated effective August 18, 1994 and they will each receive a separation
package in accordance with the retrenchment program. The separation package consisted of
the following: (1) separation pay equivalent to two (2) months salary for every year of service;
(2) leave balance credits; (3) 13th month pay; and (4) uniform plus rice subsidy differential. After
having been paid their separation benefits, the employees, including herein petitioners, each
executed and signed a release and quitclaim, written in English and containing a translation in
the Visayan dialect in the same document. The release and quitclaims were acknowledged
before a notary public.

On October 27, 1994, respondent and NASLU-FFW signed a new CBA, retroactive to July 1,
1994 and effective until June 30, 1996. Pursuant thereto, the retrenched employees were given
their salary differentials, for which they executed and signed another release and quitclaim.

Nothing was heard from the retrenched employees, until February 1997 or about two and half
years after their separation from the company, when herein petitioners wrote respondent
demanding payment of retirement benefits under the CBA. They claimed that they were
qualified for optional retirement after having rendered services for at least ten (10) years when
they were retrenched on August 18, 1994. Respondent rejected petitioners' claim, forcing
petitioners to file a complaint for payment of retirement benefits against respondent On August
27, 1997, Labor Arbiter Nicodemus Palangan dismissed the complaint for lack of merit.[5] As
expected, petitioners filed an appeal with the NLRC. Subsequently, this appeal was
consolidated with NLRC CA No. M-003666-97, entitled "Abella, et al. vs. National Steel
Corporation and NASLU-FFW,
In a consolidated resolution dated March 12, 1998, the Fifth Division of the NLRC granted the
appeal and reversed the ruling of the Labor Arbiter.

Issue: won the employees is illegally dismissed.

Held:

The present petition was filed with this Court by thirty-nine of hundreds of private petition for
review of the same November 29, 2000 Decision of the CA, Fifteenth Division, subject of this
petition. However, the intervenors' own petition was already denied due to various procedural
infirmities by this Court's Third Division in a Resolution dated November 14, 2001 and their
motion for reconsideration was likewise denied with finality in a Resolution dated March 4,
2002. In their motion for intervention, Maria Theresa Labastida, et al. prayed that "should [this
Court] decide in favor to (sic) the petitioners the same award should also apply to other
complainants-appellants before the 5th Division, NLRC" while Alexander Bongcawel, et al.
prayed that they be allowed to intervene in the proceedings herein and/or be included as
petitioners in this case.

Petitioners contend that they are entitled to retirement benefits in addition to the separation pay
they received from respondent pursuant to Article XIV of the existing CBA providing for
retirement benefits. They likewise call our attention to Aquino v. NLRC,[7] holding that payment
of separation benefits does not exclude payment of retirement benefits in the absence of a
specific prohibition in the retirement plan and the CBA.

For its part, respondent maintains that its retirement plan expressly prohibits the payment of
retirement benefits to employees terminated for cause. Thus, retrenched employees who were
granted their separation package are already precluded from receiving retirement benefits.
Moreover, petitioners executed valid quitclaims.

WHEREFORE, the petition for review is hereby DENIED. The assailed decision and resolution
of the Court of Appeals in CA-G.R. No. 51734 are hereby AFFIRMED. The motions for
intervention are DENIED for lack of merit.

SO ORDERED.