Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 81958 June 30, 1988
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,
vs.
HON. FRANKLIN M. DRILON as Secretary of Labor and Employment, and TOMAS D.
ACHACOSO, as Administrator of the Philippine Overseas Employment Administration,
respondents.
Gutierrez & Alo Law Offices for petitioner.

SARMIENTO, J.:
The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm "engaged principally in the recruitment of Filipino workers, male and
1
female, for overseas placement," challenges the Constitutional validity of Department Order No. 1, Series of 1988, of the

Department of Labor and Employment, in the character of "GUIDELINES GOVERNING THE TEMPORARY
SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in this petition for
certiorari and prohibition. Specifically, the measure is assailed for "discrimination against males or females;" 2 that it "does
not apply to all Filipino workers but only to domestic helpers and females with similar skills;" 3 and that it is violative of the
right to travel. It is held likewise to be an invalid exercise of the lawmaking power, police power being legislative, and not
executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the Constitution, providing for worker
participation "in policy and decision-making processes affecting their rights and benefits as may be provided by law." 4
Department Order No. 1, it is contended, was passed in the absence of prior consultations. It is claimed, finally, to be in
violation of the Charter's non-impairment clause, in addition to the "great and irreparable injury" that PASEI members face
should the Order be further enforced.
On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of Labor and Administrator of the
Philippine Overseas Employment Administration, filed a Comment informing the Court that on March 8, 1988, the
respondent Labor Secretary lifted the deployment ban in the states of Iraq, Jordan, Qatar, Canada, Hongkong, United
States, Italy, Norway, Austria, and Switzerland. * In submitting the validity of the challenged "guidelines," the Solicitor General invokes the police
power of the Philippine State.
It is admitted that Department Order No. 1 is in the nature of a police power measure. The only question is whether or not it is valid under the Constitution.
The concept of police power is well-established in this jurisdiction. It has been defined as the "state authority to enact legislation that may interfere with personal
5
liberty or property in order to promote the general welfare." As defined, it consists of (1) an imposition of restraint upon liberty or

property, (2) in order to foster the common good. It is not capable of an exact definition but has been, purposely, veiled in
general terms to underscore its all-comprehensive embrace.
"Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could be done,
provides enough room for an efficient and flexible response to conditions and circumstances thus assuring the greatest
benefits." 6
It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the Charter. Along with the
taxing power and eminent domain, it is inborn in the very fact of statehood and sovereignty. It is a fundamental attribute of
government that has enabled it to perform the most vital functions of governance. Marshall, to whom the expression has
been credited, 7 refers to it succinctly as the plenary power of the State "to govern its citizens." 8

"The police power of the State ... is a power coextensive with self- protection, and it is not inaptly termed the "law of
overwhelming necessity." It may be said to be that inherent and plenary power in the State which enables it to prohibit all
things hurtful to the comfort, safety, and welfare of society." 9
It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is "rooted in the conception that men in
organizing the state and imposing upon its government limitations to safeguard constitutional rights did not intend thereby
to enable an individual citizen or a group of citizens to obstruct unreasonably the enactment of such salutary measures
calculated to ensure communal peace, safety, good order, and welfare." 10 Significantly, the Bill of Rights itself does not
purport to be an absolute guaranty of individual rights and liberties "Even liberty itself, the greatest of all rights, is not
unrestricted license to act according to one's will." 11 It is subject to the far more overriding demands and requirements of
the greater number.
Notwithstanding its extensive sweep, police power is not without its own limitations. For all its awesome consequences, it
may not be exercised arbitrarily or unreasonably. Otherwise, and in that event, it defeats the purpose for which it is
exercised, that is, to advance the public good. Thus, when the power is used to further private interests at the expense of
the citizenry, there is a clear misuse of the power. 12
In the light of the foregoing, the petition must be dismissed.
As a general rule, official acts enjoy a presumed vahdity. 13 In the absence of clear and convincing evidence to the
contrary, the presumption logically stands.
The petitioner has shown no satisfactory reason why the contested measure should be nullified. There is no question that
Department Order No. 1 applies only to "female contract workers," 14 but it does not thereby make an undue discrimination
between the sexes. It is well-settled that "equality before the law" under the Constitution 15 does not import a perfect
Identity of rights among all men and women. It admits of classifications, provided that (1) such classifications rest on
substantial distinctions; (2) they are germane to the purposes of the law; (3) they are not confined to existing conditions;
and (4) they apply equally to all members of the same class. 16
The Court is satisfied that the classification made-the preference for female workers rests on substantial distinctions.
As a matter of judicial notice, the Court is well aware of the unhappy plight that has befallen our female labor force
abroad, especially domestic servants, amid exploitative working conditions marked by, in not a few cases, physical and
personal abuse. The sordid tales of maltreatment suffered by migrant Filipina workers, even rape and various forms of
torture, confirmed by testimonies of returning workers, are compelling motives for urgent Government action. As precisely
the caretaker of Constitutional rights, the Court is called upon to protect victims of exploitation. In fulfilling that duty, the
Court sustains the Government's efforts.
The same, however, cannot be said of our male workers. In the first place, there is no evidence that, except perhaps for
isolated instances, our men abroad have been afflicted with an Identical predicament. The petitioner has proffered no
argument that the Government should act similarly with respect to male workers. The Court, of course, is not impressing
some male chauvinistic notion that men are superior to women. What the Court is saying is that it was largely a matter of
evidence (that women domestic workers are being ill-treated abroad in massive instances) and not upon some fanciful or
arbitrary yardstick that the Government acted in this case. It is evidence capable indeed of unquestionable demonstration
and evidence this Court accepts. The Court cannot, however, say the same thing as far as men are concerned. There is
simply no evidence to justify such an inference. Suffice it to state, then, that insofar as classifications are concerned, this
Court is content that distinctions are borne by the evidence. Discrimination in this case is justified.
As we have furthermore indicated, executive determinations are generally final on the Court. Under a republican regime, it
is the executive branch that enforces policy. For their part, the courts decide, in the proper cases, whether that policy, or
the manner by which it is implemented, agrees with the Constitution or the laws, but it is not for them to question its
wisdom. As a co-equal body, the judiciary has great respect for determinations of the Chief Executive or his subalterns,
especially when the legislature itself has specifically given them enough room on how the law should be effectively
enforced. In the case at bar, there is no gainsaying the fact, and the Court will deal with this at greater length shortly, that
Department Order No. 1 implements the rule-making powers granted by the Labor Code. But what should be noted is the
fact that in spite of such a fiction of finality, the Court is on its own persuaded that prevailing conditions indeed call for a
deployment ban.
There is likewise no doubt that such a classification is germane to the purpose behind the measure. Unquestionably, it is
the avowed objective of Department Order No. 1 to "enhance the protection for Filipino female overseas workers" 17 this

Court has no quarrel that in the midst of the terrible mistreatment Filipina workers have suffered abroad, a ban on
deployment will be for their own good and welfare.
The Order does not narrowly apply to existing conditions. Rather, it is intended to apply indefinitely so long as those
conditions exist. This is clear from the Order itself ("Pending review of the administrative and legal measures, in the
Philippines and in the host countries . . ." 18), meaning to say that should the authorities arrive at a means impressed with
a greater degree of permanency, the ban shall be lifted. As a stop-gap measure, it is possessed of a necessary
malleability, depending on the circumstances of each case. Accordingly, it provides:
9. LIFTING OF SUSPENSION. The Secretary of Labor and Employment (DOLE) may, upon
recommendation of the Philippine Overseas Employment Administration (POEA), lift the suspension in
countries where there are:
1. Bilateral agreements or understanding with the Philippines, and/or,
2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and protection of Filipino
workers. 19
The Court finds, finally, the impugned guidelines to be applicable to all female domestic overseas workers. That it does
not apply to "all Filipina workers" 20 is not an argument for unconstitutionality. Had the ban been given universal
applicability, then it would have been unreasonable and arbitrary. For obvious reasons, not all of them are similarly
circumstanced. What the Constitution prohibits is the singling out of a select person or group of persons within an existing
class, to the prejudice of such a person or group or resulting in an unfair advantage to another person or group of
persons. To apply the ban, say exclusively to workers deployed by A, but not to those recruited by B, would obviously
clash with the equal protection clause of the Charter. It would be a classic case of what Chase refers to as a law that
"takes property from A and gives it to B." 21 It would be an unlawful invasion of property rights and freedom of contract and
needless to state, an invalid act. 22 (Fernando says: "Where the classification is based on such distinctions that make a
real difference as infancy, sex, and stage of civilization of minority groups, the better rule, it would seem, is to recognize its
validity only if the young, the women, and the cultural minorities are singled out for favorable treatment. There would be an
element of unreasonableness if on the contrary their status that calls for the law ministering to their needs is made the
basis of discriminatory legislation against them. If such be the case, it would be difficult to refute the assertion of denial of
equal protection." 23 In the case at bar, the assailed Order clearly accords protection to certain women workers, and not
the contrary.)
It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas deployment. From scattered
provisions of the Order, it is evident that such a total ban has hot been contemplated. We quote:
5. AUTHORIZED DEPLOYMENT-The deployment of domestic helpers and workers of similar skills
defined herein to the following [sic] are authorized under these guidelines and are exempted from the
suspension.
5.1 Hirings by immediate members of the family of Heads of State and Government;
5.2 Hirings by Minister, Deputy Minister and the other senior government officials; and
5.3 Hirings by senior officials of the diplomatic corps and duly accredited international
organizations.
5.4 Hirings by employers in countries with whom the Philippines have [sic] bilateral labor
agreements or understanding.
xxx xxx xxx
7. VACATIONING DOMESTIC HELPERS AND WORKERS OF SIMILAR SKILLS--Vacationing domestic
helpers and/or workers of similar skills shall be allowed to process with the POEA and leave for worksite
only if they are returning to the same employer to finish an existing or partially served employment
contract. Those workers returning to worksite to serve a new employer shall be covered by the
suspension and the provision of these guidelines.

xxx xxx xxx

9. LIFTING OF SUSPENSION-The Secretary of Labor and Employment (DOLE) may, upon
recommendation of the Philippine Overseas Employment Administration (POEA), lift the suspension in
countries where there are:
1. Bilateral agreements or understanding with the Philippines, and/or,
2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and
protection of Filipino workers. 24
xxx xxx xxx
The consequence the deployment ban has on the right to travel does not impair the right. The right to travel is subject,
among other things, to the requirements of "public safety," "as may be provided by law." 25 Department Order No. 1 is a
valid implementation of the Labor Code, in particular, its basic policy to "afford protection to labor," 26 pursuant to the
respondent Department of Labor's rule-making authority vested in it by the Labor Code. 27 The petitioner assumes that it is
unreasonable simply because of its impact on the right to travel, but as we have stated, the right itself is not absolute. The
disputed Order is a valid qualification thereto.
Neither is there merit in the contention that Department Order No. 1 constitutes an invalid exercise of legislative power. It
is true that police power is the domain of the legislature, but it does not mean that such an authority may not be lawfully
delegated. As we have mentioned, the Labor Code itself vests the Department of Labor and Employment with rulemaking
powers in the enforcement whereof. 28
The petitioners's reliance on the Constitutional guaranty of worker participation "in policy and decision-making processes
affecting their rights and benefits" 29 is not well-taken. The right granted by this provision, again, must submit to the
demands and necessities of the State's power of regulation.
The Constitution declares that:
Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment opportunities for all. 30
"Protection to labor" does not signify the promotion of employment alone. What concerns the Constitution more
paramountly is that such an employment be above all, decent, just, and humane. It is bad enough that the country has to
send its sons and daughters to strange lands because it cannot satisfy their employment needs at home. Under these
circumstances, the Government is duty-bound to insure that our toiling expatriates have adequate protection, personally
and economically, while away from home. In this case, the Government has evidence, an evidence the petitioner cannot
seriously dispute, of the lack or inadequacy of such protection, and as part of its duty, it has precisely ordered an indefinite
ban on deployment.
The Court finds furthermore that the Government has not indiscriminately made use of its authority. It is not contested that
it has in fact removed the prohibition with respect to certain countries as manifested by the Solicitor General.
The non-impairment clause of the Constitution, invoked by the petitioner, must yield to the loftier purposes targetted by the
Government. 31 Freedom of contract and enterprise, like all other freedoms, is not free from restrictions, more so in this
jurisdiction, where laissez faire has never been fully accepted as a controlling economic way of life.
This Court understands the grave implications the questioned Order has on the business of recruitment. The concern of
the Government, however, is not necessarily to maintain profits of business firms. In the ordinary sequence of events, it is
profits that suffer as a result of Government regulation. The interest of the State is to provide a decent living to its citizens.
The Government has convinced the Court in this case that this is its intent. We do not find the impugned Order to be
tainted with a grave abuse of discretion to warrant the extraordinary relief prayed for.
WHEREFORE, the petition is DISMISSED. No costs.
SO ORDERED.

Yap, C.J., Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes and GrioAquino, JJ., concur.
Gutierrez, Jr. and Medialdea, JJ., are on leave.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 77875 February 4, 1993

PHILIPPINE AIRLINES, INC., petitioner,
vs.
ALBERTO SANTOS, JR., HOUDIEL MAGADIA, GILBERT ANTONIO, REGINO DURAN, PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION, and THE
NATIONAL LABOR RELATIONS COMMISSION, respondents.
Fortunato Gupit, Jr., Solon R. Garcia, Rene B. Gorospe, Bienvinodo T. Jamoralin, jr. and Paulino D. Ungos, Jr. for petitioner.
Adolpho M. Guerzon for private respondents.

REGALADO, J.:
The instant petition for certiorari seeks to set aside the decision of The National Labor Relations Commission (NLRC) in NLRC Case No. 4-1206-85, promulgated
1
on December 11, 1986, containing the following disposition:

WHEREFORE, in view of the foregoing consideration, the Decision appealed from is set aside and
another one entered, declaring the suspension of complainants to be illegal and consequently,
respondent PAL is directed to pay complainants their salaries corresponding to the respective period(s) of
their suspension, and to delete the disciplinary action from complainants' service records. 2
These material facts recited in the basic petition are virtually undisputed and we reproduce the same hereunder:
1. Individual respondents are all Port Stewards of Catering Sub-Department, Passenger Services
Department of petitioner. Their duties and responsibilities, among others, are:
Prepares meal orders and checklists, setting up standard equipment in accordance with
the requirements of the type of service for each flight; skiing, binning, and inventorying of
Commissary supplies and equipment.
2. On various occasions, several deductions were made from their salary. The deductions represented
losses of inventoried items charged to them for mishandling of company properties . . . which respondents
resented. Such that on August 21, 1984, individual respondents, represented by the union, made a formal
notice regarding the deductions to petitioner thru Mr. Reynaldo Abad, Manager for Catering. . . .
3. As there was no action taken on said representation, private respondents filed a formal grievance on
November 4, 1984 pursuant to the grievance machinery Step 1 of the Collective Bargaining Agreement
between petitioner and the union. . . . The topics which the union wanted to be discussed in the said
grievance were the illegal/questionable salary deductions and inventory of bonded goods and
merchandise being done by catering service personnel which they believed should not be their duty.
4. The said grievance was submitted on November 21, 1984 to the office of Mr. Reynaldo Abad, Manager
for Catering, who at the time was on vacation leave. . . .

5. Subsequently, the grievants (individual respondents) thru the shop steward wrote a letter on December
5, 1984 addressed to the office of Mr. Abad, who was still on leave at the time, that inasmuch as no reply
was made to their grievance which "was duly received by your secretary" and considering that petitioner
had only five days to resolve the grievance as provided for in the CBA, said grievance as believed by
them (private respondents) was deemed resolved in their favor. . . .
6. Upon Mr. Abad's return on December 7, 1984, he immediately informed the grievants and scheduled a
meeting on December 12, 1984. . . .
7. Thereafter, the individual respondents refused to conduct inventory works. Alberto Santos, Jr. did not
conduct ramp inventory on December 7, 10 and 12. Gilbert Antonio did not conduct ramp inventory on
December 10. In like manner, Regino Duran and Houdiel Magadia did not conduct the same on
December 10 and 12.
8. At the grievance meeting which was attended by some union representatives, Mr. Abad resolved the
grievance by denying the petition of individual respondents and adopted the position that inventory of
bonded goods is part of their duty as catering service personnel, and as for the salary deductions for
losses, he rationalized:
1. It was only proper that employees are charged for the amount due to mishandling of
company property which resulted to losses. However, loss may be cost price 1/10 selling
price.
9. As there was no ramp inventory conducted on the mentioned dates, Mr. Abad, on January 3, 1985
wrote by an inter-office memorandum addressed to the grievants, individual respondents herein, for them
to explain on (sic) why no disciplinary action should be taken against them for not conducting ramp
inventory. . . .
10. The directive was complied with . . . . The reason for not conducting ramp inventory was put forth as:
4. Since the grievance step 1 was not decided and no action was done by your office
within 5 days from November 21, 1984, per provision of the PAL-PALEA CBA, Art. IV,
Sec. 2, the grievance is deemed resolved in PALEA's favor.
11. Going over the explanation, Mr. Abad found the same unsatisfactory. Thus, a penalty of suspension
ranging from 7 days to 30 days were (sic) imposed depending on the number of infractions committed. *
12. After the penalty of suspension was meted down, PALEA filed another grievance asking for lifting of,
or at least, holding in abeyance the execution of said penalty. The said grievance was forthwith denied but
the penalty of suspension with respect to respondent Ramos was modified, such that his suspension
which was originally from January 15, 1985 to April 5, 1985 was shortened by one month and was lifted
on March 5, 1985. The union, however, made a demand for the reimbursement of the salaries of
individual respondents during the period of their suspension.
13. Petitioner stood pat (o)n the validity of the suspensions. Hence, a complaint for illegal suspension was
filed before the
Arbitration Branch of the Commission, . . . Labor Arbiter Ceferina J. Diosana, on March 17, 1986, ruled in
favor of petitioner by dismissing the complaint. . . . 3
Private respondents appealed the decision of the labor arbiter to respondent commission which rendered the aforequoted
decision setting aside the labor arbiter's order of dismissal. Petitioner's motion for reconsideration having been denied, it
interposed the present petition.
The Court is accordingly called upon to resolve the issue of whether or not public respondent NLRC acted with grave
abuse of discretion amounting to lack of jurisdiction in rendering the aforementioned decision.
Evidently basic and firmly settled is the rule that judicial review by this Court in labor cases does not go so far as to
evaluate the sufficiency of the evidence upon which the labor officer or office based his or its determination, but is limited
to issues of jurisdiction and grave abuse of discretion. 4 It has not been shown that respondent NLRC has unlawfully

neglected the performance of an act which the law specifically enjoins it to perform as a duty or has otherwise unlawfully
excluded petitioner from the exercise of a right to which it is entitled.
The instant case hinges on the interpretation of Section 2, Article IV of the PAL-PALEA Collective Bargaining Agreement,
(hereinafter, CBA), to wit:
Sec. 2 Processing of Grievances
xxx xxx xxx
STEP 1 Any employee who believes that he has a justifiable grievance shall take the matter up with his
shop steward. If the shop steward feels there is justification for taking the matter up with the Company, he
shall record the grievance on the grievance form heretofore agreed upon by the parties. Two (2) copies of
the grievance form properly filled, accepted, and signed shall then be presented to and discussed by the
shop steward with the division head. The division head shall answer the grievance within five (5) days
from the date of presentation by inserting his decision on the grievance form, signing and dating same,
and returning one copy to the shop steward. If the division head fails to act within the five (5)-day
regl(e)mentary period, the grievance must be resolved in favor of the aggrieved party. If the division
head's decision is not appealed to Step II, the grievance shall be considered settled on the basis of the
decision made, and shall not be eligible for further appeal. 5 (Emphasis ours.)
Petitioner submits that since the grievance machinery was established for both labor and management as a vehicle to
thresh out whatever problems may arise in the course of their relationship, every employee is duty bound to present the
matter before management and give the latter an opportunity to impose whatever corrective measure is possible. Under
normal circumstances, an employee should not preempt the resolution of his grievance; rather, he has the duty to observe
the status quo. 6
Citing Section 1, Article IV of the CBA, petitioner further argues that respondent employees have the obligation, just as
management has, to settle all labor disputes through friendly negotiations. Thus, Section 2 of the CBA should not be
narrowly interpreted. 7 Before the prescriptive period of five days begins to run, two concurrent requirements must be met,
i.e., presentment of the grievance and its discussion between the shop steward and the division head who in this case is
Mr. Abad. Section 2 is not self-executing; the mere filing of the grievance does not trigger the tolling of the prescriptive
period. 8
Petitioner has sorely missed the point.
It is a fact that the sympathy of the Court is on the side of the laboring classes, not only because the Constitution imposes
such sympathy, but because of the one-sided relation between labor and capital. 9 The constitutional mandate for the
promotion of labor is as explicit as it is demanding. The purpose is to place the workingman on an equal plane with
management with all its power and influence in negotiating for the advancement of his interests and the defense of
his rights. 10 Under the policy of social justice, the law bends over backward to accommodate the interests of the working
class on the humane justification that those with less privileges in life should have more privileges in law. 11
It is clear that the grievance was filed with Mr. Abad's secretary during his absence. 12 Under Section 2 of the CBA
aforequoted, the division head shall act on the grievance within five (5) days from the date of presentation thereof,
otherwise "the grievance must be resolved in favor of the aggrieved party." It is not disputed that the grievants knew that
division head Reynaldo Abad was then "on leave" when they filed their grievance which was received by Abad's secretary.
13
This knowledge, however, should not prevent the application of the CBA.
On this score, respondent NLRC aptly ruled:
. . . Based on the facts heretofore narrated, division head Reynaldo Abad had to act on the grievance of
complainants within five days from 21 November 1984. Therefore, when Reynaldo Abad, failed to act
within the reglementary period, complainants, believing in good faith that the effect of the CBA had
already set in, cannot be blamed if they did not conduct ramp inventory for the days thereafter. In this
regard, respondent PAL argued that Reynaldo Abad was on leave at the time the grievance was
presented. This, however, is of no moment, for it is hard to believe that everything under Abad's authority
would have to stand still during his absence from office. To be sure, it is to be expected that someone has
to be left to attend to Abad's duties. Of course, this may be a product of inadvertence on the part of PAL
management, but certainly, complainants should not be made to suffer the consequences. 14

Contrary to petitioner's submission, 15 the grievance of employees is not a matter which requires the personal act of Mr.
Abad and thus could not be delegated. Petitioner could at least have assigned an officer-in-charge to look into the
grievance and possibly make his recommendation to Mr. Abad. It is of no moment that Mr. Abad immediately looked into
the grievance upon returning to work, for it must be remembered that the grievants are workingmen who suffered salary
deductions and who rely so much on their meager income for their daily subsistence and survival. Besides, it is
noteworthy that when these employees first presented their complaint on August 21, 1984, petitioner failed to act on it. It
was only after a formal grievance was filed and after Mr. Abad returned to work on December 7, 1984 that petitioner
decided to turn an ear to their plaints.
As respondent NLRC has pointed out, Abad's failure to act on the matter may have been due to petitioner's inadvertence,
16
but it is clearly too much of an injustice if the employees be made to bear the dire effects thereof. Much as the latter
were willing to discuss their grievance with their employer, the latter closed the door to this possibility by not assigning
someone else to look into the matter during Abad's absence. Thus, private respondents should not be faulted for believing
that the effects of the CBA in their favor had already stepped into the controversy.
If the Court were to follow petitioner's line of reasoning, it would be easy for management to delay the resolution of labor
problems, the complaints of the workers in particular, and hide under the cloak of its officers being "on leave" to avoid
being caught by the 5-day deadline under the CBA. If this should be allowed, the workingmen will suffer great injustice for
they will necessarily be at the mercy of their employer. That could not have been the intendment of the pertinent provision
of the CBA, much less the benevolent policy underlying our labor laws.
ACCORDINGLY, on the foregoing premises, the instant petition is hereby DENIED and the assailed decision of
respondent National Labor Relations Commission is AFFIRMED. This judgment is immediately executory.
SO ORDERED.
Narvasa, C.J., Feliciano, Nocon and Campos, Jr., JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-13778

April 29, 1960

PHILIPPINE EDUCATION CO., INC., petitioner,

vs.
UNION OF PHILIPPINE EDUCATION EMPLOYEES (NLU) and THE COURT OF INDUSTRIAL
RELATIONS, respondents.
Marcial Esposo for petitioner.
Eulogio R. Lerum for respondent Union. Jose B. Bolisay for respondent CIR.
MONTEMAYOR, J.:
The Philippine Education Company, Inc. is appealing the order of the Court of Industrial Relations, dated
February 7, 1958, directing it to reinstate its former employee, Ernesto Carpio, to his former or equivalent
position, without backpay, and from the resolution of the same court in banc, dated March 22, 1958, denying
the company's motion for reconsideration.
Ernesto Carpio and other employees of the company, members of the Union of Philippine Education Employees
(NLU) joined a strike staged on January 16, 1953. After the labor dispute was settled, the Industrial Court

ordered the reinstatement of the strikers, including Carpio. The company, however, opposed the reinstatement of
Carpio for the reason that a criminal complaint had been filed against him in the Municipal Court of Manila for
theft of magazines allegedly belonging to the company. He was convicted and sentenced to two months and one
day of arresto mayor. On appeal to the Court of First Instance, Carpio was acquitted on the ground of
reasonable doubt.
The question of Carpio's reinstatement was heard by the Industrial Court where the parties submitted as
evidence the transcript of the stenographic notes taken during the hearing in the criminal case before the Court
of First Instance of Manila, the exhibits presented in said case, as well as the decisions of the Municipal Court
convicting him, and that of the Court of First Instance acquitting him, or rather dismissing the case against him
on reasonable doubt. After said hearing, the Industrial Court agreed with the finding of the Court of First
Instance that the offense had not been proven beyond reasonable doubt and held that Carpio's acquittal entitled
him to reinstatement, though without backpay.
We have examined the aforementioned evidence, and we are inclined to agree with the Municipal Court that
Carpio's guilt had been duly established. At least, the preponderance of evidence was against his innocence. The
question for determination is whether the whether the acquittal of an employee, specially on the ground of
reasonable doubt, in a criminal case for theft involving articles and merchandise belonging to his employer,
entitles said employee to reinstatement.
In the case of National Labor Organization of Employees and Laborers vs. Court of Industrial Relations, 95
Phil., 727; Off. Gaz. (9) 4219, we said:
. . . the acquittal of a employee in a criminal case is no bar to the Court of Industrial Relations, after
proper hearing, finding the same employee guilty of facts inimical to the interests of his employer and
justifying loss of confidence in him by said employer, thereby warranting his dismissal or the refusal of
the Company to reinstate him. The reason for this is not difficult to see. The evidence required by law to
establish guilt and to warrant conviction in a criminal case substantially differs from the evidence
necessary to establish responsibility or liability in a civil or non-criminal case. The difference is in the
amount and weight of evidence and also in degree. In a criminal case, the evidence or proof must be
beyond reasonable doubt while in a civil or non criminal case it is merely preponderance of evidence. In
further support of this principle we may refer to Art. 29 of the New Civil Code (Rep. Act 386) which
provides that when the accused in a criminal case is acquitted on the ground of reasonable doubt a civil
action for damages for the same act or omission may be instituted where only a preponderance of
evidence is necessary to establish liability. From all this it is clear that the Court of Industrial Relations
was justified in denying the petition of Rivas and Tolentino for reinstatement in the cement company,
because of their illegal possession of hand grenades intended by them for purposes of sabotage in
connection with the strike on March 16, 1952.
Then in the case of National Labor Union vs. Standard Vacuum Oil Company, 73 Phil., 279, the City Fiscal
refused to prosecute two employees charged with theft for lack of evidence and yet this Tribunal upheld their
dismissal from the employer company on the ground that their employer had ample reason to distrust them.
The relation of employer and employee, specially where the employee has access to the employer's property in
the form of articles and merchandise for sale, necessarily involves trust and confidence. If said merchandise are
lost and said loss is reasonably attributed to said employee, and he is charged with theft, even if he is acquitted
of the form of articles and merchandise for sale, necessarily involves trust and confidence. If said merchandise
are lost and said loss is reasonably attributed to said employee, and he is charged with theft, even if he is
acquitted of the charge on reasonable doubt, when the employer has lost its confidence in him, it would be
highly unfair to require said employer to continue employing him or to reinstate him, for in that case the former
might find it necessary for its protection to employ another person to watch and keep an eye on him. In the
present case, Carpio was refused reinstatement not because of any union affiliation or activity or because the

company has been guilty of any unfair labor practice. As already stated, Carpio was convicted in the Municipal
Court and although he was acquitted on reasonable doubt in the Court of First Instance, the company had ample
reason to distrust him. Under the circumstances, we cannot in conscience require the company to reemploy or
reinstate him.
In view of the foregoing, the appealed orders of the Industrial Court of February 7, 1958 and March 22, 1958
are hereby reversed. No costs.
Paras, C.J., Bengzon, Bautista Angelo, Labrador, Barrera, and Gutierrez David, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 78090 July 26, 1991
PACIFIC MILLS, INC., petitioner,
vs.
ZENAIDA ALONZO, respondent.
Napoleon L. Apostol for petitioner.

NARVASA, J.:p
From July 30, 1973, Zenaida Alonzo was employed as a ring frame operator in the Pacific Mills, Inc. until September 30, 1982 when she was discharged by
Management.
The record shows that in the early afternoon of September 22, 1982, Zenaida challenged Company Inspector Ernesto Tamondong to a fight, saying: "Putang Ina
mo, lumabas ka, tarantado, kalalaki mong tao, duwag ka . . Ipagugulpi kita sa labas at kaya kitang ipakaladkad dito sa loob ng compound palabas ng gate sa mga
kamag-anak ko." And suiting action to the word, she thereupon boxed Tamondong in the stomach. The motive for the assault was Zenaida's resentment at having
1
been reprimanded, together with other employees, two days earlier by Tamondong for wasting time by engaging in Idle chatter. Tamondong forthwith

reported the incident to the firm's Administrative Manager 2 as well as the Chairman of Barangay Balombato, Quezon City.
3

On September 30, 1982, Zenaida Alonzo was given a Memorandum by the company's Executive Vice President &
General Manager terminating her employment as of October 1, 1982 on various grounds: poor work, habitual absences
and tardiness, wasting time, insubordination and gross disrespect. The service of that memorandum of dismissal on her
was not preceded by any complaint, hearing or other formality. These were apparently considered unnecessary by
Management 4 in view of the provision in the Company Rules and Regulations (embodied in the Collective Bargaining
Agreement between the company and the union representing the employees) that:
Fighting or attempting to inflict harm to another employee, will render (sic) the aggressor to outright
dismissal.
It was only at the hearing of the complaint for illegal dismissal (and non-payment of proportionate 13th month pay)
instituted by Zenaida on October 4, 1982 in the NCR Arbitration Branch, that evidence was presented by the company not
only of the assault by Zenaida on her superior but also of many other violations by her of company rules and regulations,
in an attempt to substantiate the validity of her dismissal from work.

The Labor Arbiter found that Alonzo had indeed verbally abused and struck her superior, Tamondong, and rejected her
contention that the assault was not punishable since it was "not work-connected and was provoked/instigated by Ernesto
Tamondong." 5 The Arbiter also declared as "fully established the previous infractions of complainant," these being "a
matter of record and not denied by complainant (Zenaida)."
The Arbiter was of the view, however, that Alonzo was entitled to relief, because (a) the penalty imposed was "harsh and
severe and not commensurate with the offense, . . . suspension of three (3) months . . (being) the proper, just and
reasonable penalty . . .;" and because (b) the company had failed "to investigate complainant before she was dismissed."
The Arbiter thus ordered Pacific Mills, Inc., Zenaida's employer:
. . . to reinstate complainant without loss of seniority rights and to pay her backwages from January 1,
1983 until fully reinstated, the period from October 1, 1982 to December 31, 1982 complainant being
under suspension without pay . . . (as well as) to pay complainant's 13th month pay in the amount of
THREE HUNDRED FIFTY-ONE PESOS ONLY (P351.00).
Acting on the employer's appeal, the National Labor Relations Commission rendered judgment on March 23, 1987,
sustaining the Labor Arbiter's findings. It however limited the award of back wages to Zenaida only to three (3) years, in
accordance with this Court's judgment in Feati University Faculty Club (PAFLU) vs. Feati University, 58 SCRA 396. 6
Pacific Mills Inc. has instituted in this Court the special civil action of certiorari at bar praying for nullification of the
judgment of the NLRC for having been rendered with grave abuse of discretion.
In the comment thereon, 7 required of him by the Court, the Solicitor General opined that:
. . . both the Labor Arbiter and the NLRC apparently failed to take into consideration the fact that Zenaida
Alonzo was dismissed not because of this isolated act (of assault against her superior) but rather because
of numerous and repeated violations of company rules and regulations. It was only this last incident which
compelled Pacific Mills, Inc. to finally terminate her services. It is the totality of the infractions committed
by the employee which should have been considered in determining whether or not there is just cause for
her dismissal.
Zenaida Alonzo was caught several times leaving her place of work to chat with her co-employees. This is
reprehensible conduct since, as ring frame operator, she must be at her post during work hours to prevent
the occurrence of incidents which could damage the machine. The company inspector precisely warned
her against doing this. She had also been repeatedly reprimanded for insubordination, habitual tardiness,
wasting time and not wearing the required company uniform, In spite of these infractions the company
bore with her services and did not see fit to dismiss her. Her assault on the company inspector was
apparently the last straw which compelled Pacific Mills, Inc. to terminate her services.
Accordingly, the Solicitor General recommended "payment of separation pay equivalent to three (3) years backwages but
without reinstatement" and of "proportionate 13th month pay."
For their part, the Chief Legal Officer of the NLRC, 8 and the private respondent, 9 insist that since the dismissal of
Zenaida Alonzo was not preceded by any notice of the charges and a hearing thereon, the judgment of the NLRC must be
sustained.
Decisive of this controversy is the judgment of the Court en banc in Wenphil Corporation v. NLRC, promulgated on
February 8, 1989, 10 in which the following policy pronouncements were made:
The Court holds that the policy of ordering the reinstatement to the service of an employee without loss of
seniority and the payment of his wages during the period of his separation until his actual reinstatement
but not exceeding three (3) years without qualification or deduction, when it appears he was not afforded
due process, although his dismissal was found to be for just and authorized cause in an appropriate
proceeding in the Ministry of Labor and Employment, should be re-examined. It will be highly prejudicial to
the interests of the employer to impose on him the services of an employee who has been shown to be
guilty of the charges that warranted his dismissal from employment. Indeed, it will demoralize the rank
and file if the undeserving, if not undesirable, remains in the service.
Thus in the present case, where the private respondent, who appears to be of violent temper, caused
trouble during office hours and even defied his superiors as they tried to pacify him, should not be

rewarded with reemployment and back wages. It may encourage him to do even worse and will render a
mockery of the rules of discipline that employees are required to observe. Under the circumstances, the
dismissal of the private respondent for just cause should be maintained. He has no right to return to his
former employer.
However, the petitioner (employer) must nevertheless be held to account for failure to extend to private
respondent his right to an investigation before causing his dismissal. The rule is explicit as above
discussed. The dismissal of an employee must be for just or authorized cause and after due process
(Section 1, Rule XIV, Implementing Regulations of the Labor Code). Petitioner committed an infraction of
the second requirement. Thus, it must be imposed a sanction for its failure to give a formal notice and
conduct an investigation as required by law before dismissing . . . (respondent) from employment.
Considering the circumstances of this case petitioner must indemnify the private respondent the amount
of P1,000.00. The measure of tills award depends on the facts of each case and the gravity of the
omission committed by the employer.
The Court perceives no sufficient cause, it has indeed been cited to none by the respondents, to decline to apply the
Wenphil doctrine to the case at bar.
While it is true that Pacific Mills, Inc. had not complied with the requirements of due process prior to removing Zenaida
Alonzo from employment, it is also true that subsequently, in the proceedings before the Labor Arbiter in which Zenaida
Alonzo had of course taken active part, it had succeeded in satisfactorily proving the commission by Zenaida of many
violations of company rules and regulations justifying termination of her employment. Under the circumstances, it is clear
that, as the Solicitor General has pointed out, the continuance in the service of the latter is patently inimical to her
employer's interests and that, citing San Miguel Corporation v. NLRC, 11 the law, in protecting the rights of the laborer
authorizes neither oppression nor self-destruction of the employer. And it was oppressive and unjust in the premises to
require reinstatement of the employee.
WHEREFORE, the petition is granted and the challenged decision of the respondent Commission dated March 23, 1987
and that of the Labor Arbiter thereby affirmed, are NULLIFIED AND SET ASIDE. However, the petitioner is ordered to pay
private respondent a proportionate part of the 13th month pay due her, amounting to P351.00 as well as to indemnify her
in the sum of P1,000.00. No costs.
SO ORDERED.
Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 85985 August 13, 1993

PHILIPPINE AIRLINES, INC. (PAL), petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ISABEL P. ORTIGUERRA and
PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION (PALEA), respondents.
Solon Garcia for petitioner.
Adolpho M. Guerzon for respondent PALEA.

MELO, J.:
In the instant petition for certiorari, the Court is presented the issue of whether or not the formulation of a Code
of Discipline among employees is a shared responsibility of the employer and the employees.
On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline. The
Code was circulated among the employees and was immediately implemented, and some employees were
forthwith subjected to the disciplinary measures embodied therein.
Thus, on August 20, 1985, the Philippine Airlines Employees Association (PALEA) filed a complaint before the
National Labor Relations Commission (NLRC) for unfair labor practice (Case No. NCR-7-2051-85) with the
following remarks: "ULP with arbitrary implementation of PAL's Code of Discipline without notice and prior
discussion with Union by Management" (Rollo, p. 41). In its position paper, PALEA contended that PAL, by its
unilateral implementation of the Code, was guilty of unfair labor practice, specifically Paragraphs E and G of
Article 249 and Article 253 of the Labor Code. PALEA alleged that copies of the Code had been circulated in
limited numbers; that being penal in nature the Code must conform with the requirements of sufficient
publication, and that the Code was arbitrary, oppressive, and prejudicial to the rights of the employees. It
prayed that implementation of the Code be held in abeyance; that PAL should discuss the substance of the
Code with PALEA; that employees dismissed under the Code be reinstated and their cases subjected to further
hearing; and that PAL be declared guilty of unfair labor practice and be ordered to pay damages (pp. 7-14,
Record.)
PAL filed a motion to dismiss the complaint, asserting its prerogative as an employer to prescibe rules and
regulations regarding employess' conduct in carrying out their duties and functions, and alleging that by
implementing the Code, it had not violated the collective bargaining agreement (CBA) or any provision of the
Labor Code. Assailing the complaint as unsupported by evidence, PAL maintained that Article 253 of the Labor
Code cited by PALEA reffered to the requirements for negotiating a CBA which was inapplicable as indeed the
current CBA had been negotiated.
In its reply to PAL's position paper, PALEA maintained that Article 249 (E) of the Labor Code was violated when
PAL unilaterally implemented the Code, and cited provisions of Articles IV and I of Chapter II of the Code as
defective for, respectively, running counter to the construction of penal laws and making punishable any
offense within PAL's contemplation. These provisions are the following:
Sec. 2. Non-exclusivity. This Code does not contain the entirety of the rules and regulations
of the company. Every employee is bound to comply with all applicable rules, regulations,
policies, procedures and standards, including standards of quality, productivity and behaviour,
as issued and promulgated by the company through its duly authorized officials. Any violations
thereof shall be punishable with a penalty to be determined by the gravity and/or frequency of
the offense.
Sec. 7. Cumulative Record. An employee's record of offenses shall be cumulative. The
penalty for an offense shall be determined on the basis of his past record of offenses of any
nature or the absence thereof. The more habitual an offender has been, the greater shall be the
penalty for the latest offense. Thus, an employee may be dismissed if the number of his past
offenses warrants such penalty in the judgment of management even if each offense considered
separately may not warrant dismissal. Habitual offenders or recidivists have no place in PAL. On
the other hand, due regard shall be given to the length of time between commission of individual
offenses to determine whether the employee's conduct may indicate occasional lapses (which
may nevertheless require sterner disciplinary action) or a pattern of incorrigibility.
Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a conference but they failed to appear
at the scheduled date. Interpreting such failure as a waiver of the parties' right to present evidence, the labor

arbiter considered the case submitted for decision. On November 7, 1986, a decision was rendered finding no
bad faith on the part of PAL in adopting the Code and ruling that no unfair labor practice had been committed.
However, the arbiter held that PAL was "not totally fault free" considering that while the issuance of rules and
regulations governing the conduct of employees is a "legitimate management prerogative" such rules and
regulations must meet the test of "reasonableness, propriety and fairness." She found Section 1 of the Code
aforequoted as "an all embracing and all encompassing provision that makes punishable any offense one can
think of in the company"; while Section 7, likewise quoted above, is "objectionable for it violates the rule
against double jeopardy thereby ushering in two or more punishment for the same misdemeanor." (pp. 38-39,
Rollo.)
The labor arbiter also found that PAL "failed to prove that the new Code was amply circulated." Noting that
PAL's assertion that it had furnished all its employees copies of the Code is unsupported by documentary
evidence, she stated that such "failure" on the part of PAL resulted in the imposition of penalties on employees
who thought all the while that the 1966 Code was still being followed. Thus, the arbiter concluded that "(t)he
phrase ignorance of the law excuses no one from compliance . . . finds application only after it has been
conclusively shown that the law was circulated to all the parties concerned and efforts to disseminate
information regarding the new law have been exerted. (p. 39, Rollo.) She thereupon disposed:
WHEREFORE, premises considered, respondent PAL is hereby ordered as follows:
1. Furnish all employees with the new Code of Discipline;
2. Reconsider the cases of employees meted with penalties under the New Code of Discipline
and remand the same for further hearing; and
3. Discuss with PALEA the objectionable provisions specifically tackled in the body of the
decision.
All other claims of the complainant union (is) [are] hereby, dismissed for lack of merit.
SO ORDERED. (p. 40, Rollo.)
PAL appealed to the NLRC. On August 19, 1988, the NLRC through Commissioner Encarnacion, with
Presiding Commissioner Bonto-Perez and Commissioner Maglaya concurring, found no evidence of unfair
labor practice committed by PAL and affirmed the dismissal of PALEA's charge. Nonetheless, the NLRC made
the following observations:
Indeed, failure of management to discuss the provisions of a contemplated code of discipline
which shall govern the conduct of its employees would result in the erosion and deterioration of
an otherwise harmonious and smooth relationship between them as did happen in the instant
case. There is no dispute that adoption of rules of conduct or discipline is a prerogative of
management and is imperative and essential if an industry, has to survive in a competitive
world. But labor climate has progressed, too. In the Philippine scene, at no time in our
contemporary history is the need for a cooperative, supportive and smooth relationship between
labor and management more keenly felt if we are to survive economically. Management can no
longer exclude labor in the deliberation and adoption of rules and regulations that will affect
them.
The complainant union in this case has the right to feel isolated in the adoption of the New Code
of Discipline. The Code of Discipline involves security of tenure and loss of employment a
property right! It is time that management realizes that to attain effectiveness in its conduct
rules, there should be candidness and openness by Management and participation by the
union, representing its members. In fact, our Constitution has recognized the principle of
"shared responsibility" between employers and workers and has likewise recognized the right of
workers to participate in "policy and decision-making process affecting their rights . . ." The latter

provision was interpreted by the Constitutional Commissioners to mean participation in

"management"' (Record of the Constitutional Commission, Vol. II).
In a sense, participation by the union in the adoption of the code if conduct could have
accelerated and enhanced their feelings of belonging and would have resulted in cooperation
rather than resistance to the Code. In fact, labor-management cooperation is now "the thing."
(pp. 3-4, NLRC Decision ff. p. 149, Original Record.)
Respondent Commission thereupon disposed:
WHEREFORE, premises considered, we modify the appealed decision in the sense that the
New Code of Discipline should be reviewed and discussed with complainant union, particularly
the disputed provisions [.] (T)hereafter, respondent is directed to furnish each employee with a
copy of the appealed Code of Discipline. The pending cases adverted to in the appealed
decision if still in the arbitral level, should be reconsidered by the respondent Philippine Air
Lines. Other dispositions of the Labor Arbiter are sustained.
SO ORDERED. (p. 5, NLRC Decision.)
PAL then filed the instant petition for certiorari charging public respondents with grave abuse of discretion in:
(a) directing PAL "to share its management prerogative of formulating a Code of Discipline"; (b) engaging in
quasi-judicial legislation in ordering PAL to share said prerogative with the union; (c) deciding beyond the issue
of unfair labor practice, and (d) requiring PAL to reconsider pending cases still in the arbitral level (p. 7,
Petition; p. 8, Rollo.)
As stated above, the Principal issue submitted for resolution in the instant petition is whether management may
be compelled to share with the union or its employees its prerogative of formulating a code of discipline.
PAL asserts that when it revised its Code on March 15, 1985, there was no law which mandated the sharing of
responsibility therefor between employer and employee.
Indeed, it was only on March 2, 1989, with the approval of Republic Act No. 6715, amending Article 211 of the
Labor Code, that the law explicitly considered it a State policy "(t)o ensure the participation of workers in
decision and policy-making processes affecting the rights, duties and welfare." However, even in the absence
of said clear provision of law, the exercise of management prerogatives was never considered boundless.
Thus, in Cruz vs. Medina (177 SCRA 565 [1989]) it was held that management's prerogatives must be without
abuse of discretion.
In San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25 [1989]), we upheld the
company's right to implement a new system of distributing its products, but gave the following caveat:
So long as a company's management prerogatives are exercised in good faith for the
advancement of the employer's interest and not for the purpose of defeating or circumventing
the rights of the employees under special laws or under valid agreements, this Court will uphold
them.
(at p. 28.)
All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is circumscribed
by limitations found in law, a collective bargaining agreement, or the general principles of fair play and justice
(University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]). Moreover, as enunciated in Abbott Laboratories
(Phil.), vs. NLRC (154 713 [1987]), it must be duly established that the prerogative being invoked is clearly a
managerial one.
A close scrutiny of the objectionable provisions of the Code reveals that they are not purely business-oriented
nor do they concern the management aspect of the business of the company as in the San Miguel case. The

provisions of the Code clearly have repercusions on the employee's right to security of tenure. The
implementation of the provisions may result in the deprivation of an employee's means of livelihood which, as
correctly pointed out by the NLRC, is a property right (Callanta, vs Carnation Philippines, Inc., 145 SCRA 268
[1986]). In view of these aspects of the case which border on infringement of constitutional rights, we must
uphold the constitutional requirements for the protection of labor and the promotion of social justice, for these
factors, according to Justice Isagani Cruz, tilt "the scales of justice when there is doubt, in favor of the worker"
(Employees Association of the Philippine American Life Insurance Company vs. NLRC, 199 SCRA 628 [1991]
635).
Verily, a line must be drawn between management prerogatives regarding business operations per se and
those which affect the rights of the employees. In treating the latter, management should see to it that its
employees are at least properly informed of its decisions or modes action. PAL asserts that all its employees
have been furnished copies of the Code. Public respondents found to the contrary, which finding, to say the
least is entitled to great respect.
PAL posits the view that by signing the 1989-1991 collective bargaining agreement, on June 27, 1990, PALEA
in effect, recognized PAL's "exclusive right to make and enforce company rules and regulations to carry out the
functions of management without having to discuss the same with PALEA and much less, obtain the latter's
conformity thereto" (pp. 11-12, Petitioner's Memorandum; pp 180-181, Rollo.) Petitioner's view is based on the
following provision of the agreement:
The Association recognizes the right of the Company to determine matters of management it
policy and Company operations and to direct its manpower. Management of the Company
includes the right to organize, plan, direct and control operations, to hire, assign employees to
work, transfer employees from one department, to another, to promote, demote, discipline,
suspend or discharge employees for just cause; to lay-off employees for valid and legal causes,
to introduce new or improved methods or facilities or to change existing methods or facilities
and the right to make and enforce Company rules and regulations to carry out the functions of
management.
The exercise by management of its prerogative shall be done in a just reasonable, humane
and/or lawful manner.
Such provision in the collective bargaining agreement may not be interpreted as cession of employees' rights
to participate in the deliberation of matters which may affect their rights and the formulation of policies relative
thereto. And one such mater is the formulation of a code of discipline.
Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the
discussion of matters affecting their rights. Thus, even before Article 211 of the labor Code (P.D. 442) was
amended by Republic Act No. 6715, it was already declared a policy of the State, "(d) To promote the
enlightenment of workers concerning their rights and obligations . . . as employees." This was, of course,
amplified by Republic Act No 6715 when it decreed the "participation of workers in decision and policy making
processes affecting their rights, duties and welfare." PAL's position that it cannot be saddled with the
"obligation" of sharing management prerogatives as during the formulation of the Code, Republic Act No. 6715
had not yet been enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained. While
such "obligation" was not yet founded in law when the Code was formulated, the attainment of a harmonious
labor-management relationship and the then already existing state policy of enlightening workers concerning
their rights as employees demand no less than the observance of transparency in managerial moves affecting
employees' rights.
Petitioner's assertion that it needed the implementation of a new Code of Discipline considering the nature of
its business cannot be overemphasized. In fact, its being a local monopoly in the business demands the most
stringent of measures to attain safe travel for its patrons. Nonetheless, whatever disciplinary measures are
adopted cannot be properly implemented in the absence of full cooperation of the employees. Such
cooperation cannot be attained if the employees are restive on account, of their being left out in the
determination of cardinal and fundamental matters affecting their employment.

WHEREFORE, the petition is DISMISSED and the questioned decision AFFIRMED. No special
pronouncement is made as to costs.
SO ORDERED.
Feliciano, Bidin, Romero and Vitug, JJ., concur.