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took no part.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. L-7349

July 19, 1955

ATOK-BIG WEDGE MUTUAL BENEFIT ASSOCIATION, petitioner,


vs.
ATOK-BIG WEDGE MINING COMPANY, INCORPORATED, respondents.
Pablo C. Sanidad for petitioner.
Roxas and Sarmiento for respondents.
REYES, J. B. L., J.:
On September 4, 1950, the petitioner labor union, the Atok-Big Wedge Mutual Benefit Association, submitted to the AtokBig Wedge Mining Co., Inc. (respondent herein) several demands, among which was an increase of P0.50 in daily wage.
The matter was referred by the mining company to the Court of Industrial Relations for arbitration and settlement (Case
No. 523-V). In the course of conciliatory measures taken by the Court, some of the demands were granted, and others
(including the demand for increased wages) rejected, and so, hearings proceeded and evidence submitted on the latter.
On July 14, 1951, the Court rendered a decision (Record, pp. 25-32) fixing the minimum wage at P2.65 a day with the rice
ration, or P3.20 without rice ration; denying the deduction from such minimum wage, of the value of housing facilities
furnished by the company to the laborers, as well as the efficiency bonus given to them by the company; and ordered that
the award be made effective retroactively from the date of the demand, September 4, 1950, as agreed by the parties.
From this decision, the mining company appealed to this Court (G.R. No. L-5276).
Subsequently, an urgent petition was presented in Court on October 15, 1952 by the Atok-Big Wedge Mining Company
for authority to stop operations and lay off employees and laborers, for the reason that due to the heavy losses, increased
taxes, high cost of materials, negligible quantity of ore deposits, and the enforcement of the Minimum Wage Law, the
continued operation of the company would lead to its immediate bankruptcy and collapse (Rec. pp. 100-109). To avert the
closure of the company and the consequent lay-off of hundreds of laborers and employees, the Court, instead of hearing
the petition on the merits, convened the parties for voluntary conciliation and mediation. After lengthy discussions and
exchange of views, the parties on October 29, 1952 reached an agreement effective from August 4, 1952 to December
31, 1954 (Rec. pp. 18-23). The Agreement in part provides:
I
That the petitioner, Atok-Big Wedge Mining Company, Incorporated, agrees to abide by whatever decision that
the Supreme Court may render with respect to Case No. 523-V (G.R. 5276) and Case No. 523-1 (10) (G.R.
5594).
xxx

xxx

xxx

III
xxx

xxx

xxx

That the petitioner, Atok-Big Wedge Mining Company, Incorporated, and the respondent, Atok-Big Wedge Mutual
Benefit Association, agree that the following facilities heretofore given or actually being given by the petitioner to
its workers and laborers, and which constitute as part of their wages, be valued as follows:

Rice ration
Housing facility
All other facilities such as recreation
facilities, medical treatment to
dependents of laborers, school
facilities, rice ration during off-days,
water, light, fuel, etc., equivalent to at
least

P.55 per
day
40 per day

85 per day

It is understood that the said amount of facilities valued at the abovementioned prices, may be charged in full or partially
by the Atok-Big Wedge Mining Company, Inc., against laborer or employee, as it may see fit pursuant to the exigencies of
its operation.
The agreement was submitted to the Court for approval and on December 26, 1952, was approved by the Court in an
order giving it effect as an award or decision in the case (Rec., p. 24).

Later, Case No. G.R. No. L-5276 was decided by this Court (promulgated March 3, 1953), affirming the decision of the
Court of Industrial Relations fixing the minimum cash wage of the laborers and employees of the Atok-Big Wedge Mining
Co. at P3.20 cash, without rice ration, or P2.65, with rice ration. On June 13, 1953, the labor union presented to the Court
a petition for the enforcement of the terms of the agreement of October 29, 1952, as allegedly modified by the decision of
this Court in G.R. No. L-5276 and the provisions of the Minimum Wage Law, which has since taken effect, praying for the
payment of the minimum cash wage of P3.45 a day with rice ration, or P4.00 without rice ration, and the payment of
differential pay from August 4, 1952, when the award became effective. The mining company opposed the petition
claiming that the Agreement of October 29, 1952 was entered into by the parties with the end in view that the company's
cost of production be not increased in any way, so that it was intended to supersede whatever decision the Supreme
Court would render in G.R. No. L-5276 and the provisions of the Minimum Wage Law with respect to the minimum cash
wage payable to the laborers and employees. Sustaining the opposition, the Court of Industrial Relations, in an order
issued on September 22, 1953 (Rec. pp. 44-49), denied the petition, upon the ground that when the Agreement of the
parties of October 29, 1952 was entered into by them, they already knew the decision of said Court (although subject to
appeal to the Supreme Court) fixing the minimum cash wage at P3.20 without rice ration, or P2.65 with rice ration, as well
as the provisions of the Minimum Wage Law requiring the payment of P4 minimum daily wage in the provinces effective
August 4, 1952; so that the parties had intended to be regulated by their Agreement of October 29, 1952. On the same
day, the Court issued another order (Rec. pp. 50-55), denying the claim of the labor union for payment of an additional 50
per cent based on the basic wage of P4 for work on Sundays and holidays, holding that the payments being made by the
company were within the requirements of the law. Its motion for the reconsideration of both orders having been denied,
the labor union filed this petition for review by certiorari.
The first issue submitted to us arises from an apparent contradiction in the Agreement of October 29, 1952. By paragraph
III thereof, the parties by common consent evaluated the facilities furnished by the Company to its laborers (rice rations,
housing, recreation, medical treatment, water, light, fuel, etc.) at P1.80 per day, and authorized the company to have such
value "charge in full or partially against any laborer or employee as it may see fit"; while in paragraph I, the Company
agreed to abide by the decision of this Court (pending at the time the agreement was had) in G.R. No. L-5594; and as
rendered, the decision was to the effect that the Company could deduct from the minimum wage only the value of the rice
ration.
It is contended by the petitioner union that the two provisions should be harmonized by holding paragraph III (deduction of
all facilities) to be merely provisional, effective only while this Court had not rendered its decision in G.R. No. L-5594; and
that the terms of said paragraph should be deemed superseded by the decision from the time the latter became final,
some four or five months after the agreement was entered into; in consequence, (it is claimed), the laborers became
entitled by virtue of said decision to the prevailing P4.00 minimum wage with no other deduction than that of the rice
ration, or a net cash wage of P3.45.
This contention, in our opinion, is untenable. The intention of the parties could not have been to make the arrangement in
paragraph III a merely provisional arrangement pending the decision of the Supreme Court for "this agreement" was
expressly made retroactive and effective as of August 4, 1952, and to be in force up to and including December 31, 1954"
(Par. IV). When concluded on October 29, 1952, neither party could anticipate the date when the decision of the Supreme
Court would be rendered; nor is any reason shown why the parties should desire to limit the effects of the decision to the
period 1952-1954 if it was to supersede the agreement of October 29, 1952.
To ascertain the true import of paragraph I of said Agreement providing that the respondent company agreed to abide by
whatever decision the Supreme Court would render in G.R. No. L-5276, it is important to remember that, as shown by the
records, the agreement was prompted by an urgent petition filed by the respondent mining company to close operations
and lay-off laborers because of heavy losses and the full enforcement of the Minimum Wage Law in the provinces,
requiring it to pay its laborers the minimum wage of P4; to avoid such eventuality, through the mediation of the Court of
Industrial Relations, a compromise was reached whereby it was agreed that the company would pay the minimum wage
fixed by the law, but the facilities then being received by the laborers would be evaluated and charged as part of the
wage, but without in any way reducing the P2.00 cash portion of their wages which they were receiving prior to the
agreement (hearing of Oct. 28, 1952, CIR, t.s.n. 47). In other words, while it was the objective of the parties to comply with
the requirements of the Minimum Wage Law, it was also deemed important that the mining company should not have to
increase the cash wages it was then paying its laborers, so that its cost of production would not also be increased, in
order to prevent its closure and the lay-off of employees and laborers. And as found by the Court below in the order
appealed from (which finding is conclusive upon us), "it is this eventuality that the parties did not like to happen, when they
have executed the said agreement" (Rec. p. 49). Accordingly, after said agreement was entered into, the Company
started paying its laborers a basic cash or "take-home" wage of P2.20 (Rec. p. 9), representing the difference between P4
(minimum wage) and P1.80 (value of all facilities).
With this background, the provision to abide by our decision in G.R. No. L-5276 can only be interpreted thus: That the
company agreed to pay whatever award this Court would make in said case from the date fixed by the decision (which
was that of the original demand, September 4, 1950) up to August 3, 1952 (the day previous to the effectivity of the
Compromise Agreement) and from August 4, 1954 to December 31, 1954, they are to be bound by their agreement of
October 29, 1952.
This means that during the first period (September 4, 1950 to August 3, 1952), only rice rations given to the laborers are
to be regarded as forming part of their wage and deductible therefrom. The minimum wage was then fixed (by the Court of
Industrial Relations, and affirmed by this Court) at P3.20 without rice ration, or P2.65 with rice ration. Since the
respondent company had been paying its laborers the basic cash or "take-home" wage of P2 prior to said decision and up
to August 3, 1952, the laborers are entitled to a differential pay of P0.65 per working day from September 4, 1950 (the
date of the effectivity of the award in G.R. L-5276) up to August 3, 1952.

From August 4, 1952, the date when the Agreement of the parties of October 29, 1952 became effective (which was also
the date when the Minimum Wage Law became fully enforceable in the provinces), the laborers should be paid a
minimum wage of P4 a day. From this amount, the respondent mining company is given the right to charge each laborer
"in full or partially", the facilities enumerated in par. III of the Agreement; i.e., rice ration at P0.55 per day, housing facility
at P0.40 per day, and other facilities "constitute part of his wages". It appears that the company had actually been paying
its laborers the minimum wage of P2.20 since August 4, 1952; hence they are not entitled to any differential pay from this
date.
Petitioner argues that to allow the deductions stipulated in the Agreement of October 29, 1952 from the minimum daily
wage of P4 would be a waiver of the minimum wage fixed by the law and hence null and void, since Republic Act No. 602,
section 20, provides that "no agreement or contract, oral or written, to accept a lower wage or less than any other under
this Act, shall be valid". An agreement to deduct certain facilities received by the laborers from their employer is not a
waiver of the minimum wage fixed by the law. Wage, as defined by section 2 of Republic Act No. 602, "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." Thus, the law permits the deduction of such facilities from the laborer's minimum wage
of P4, as long as their value is "fair and reasonable". It is not here claimed that the valuations fixed in the Agreement of
October 29, 1952 are not fair and reasonable. On the contrary, the agreement expressly states that such valuations:
"have been arrived at after careful study and deliberation by both representatives of both parties, with the
assistance of their respective counsels, and in the presence of the Honorable Presiding Judge of the Court of
Industrial Relations" (Rec. p. 2).
Neither is it claimed that the parties, with the aid of the Court of Industrial Relations in a dispute pending before it, may not
fix by agreement the valuation of such facilities, without referring the matter to the Department of Labor.
Petitioner also argues that to allow the deductions of the facilities appearing in the Agreement referred to, would
be contrary to the mandate of section 19 of the law, that "nothing in this Act . . . justify an employer . . . in reducing
supplements furnished on the date of enactment.
The meaning of the term "supplements" has been fixed by the Code of Rules and Regulations promulgated by the Wage
Administration Office to implement the Minimum Wage Law (Ch. 1, [c]), as:
extra renumeration or benefits received by wage earners from their employees and include but are not restricted
to pay for vacation and holidays not worked; paid sick leave or maternity leave; overtime rate in excess of what is
required by law; sick, pension, retirement, and death benefits; profit-sharing; family allowances; Christmas, war
risk and cost-of-living bonuses; or other bonuses other than those paid as a reward for extra output or time spent
on the job.
"Supplements", therefore, constitute extra renumeration or special privileges or benefits given to or received by the
laborers over and above their ordinary earnings or wages. Facilities, on the other hand, are items of expense necessary
for the laborer's and his family's existence and subsistence, so that by express provision of the law (sec. 2 [g]) they form
part of the wage and when furnished by the employer are deductible therefrom since if they are not so furnished, the
laborer would spend and pay for them just the same. It is thus clear that the facilities mentioned in the agreement of
October 29, 1952 do not come within the term "supplements" as used in Art. 19 of the Minimum Wage Law.
For the above reasons, we find the appeal from the Order of the Court a quo of September 22, 1953 denying the motion
of the petitioner labor union for the payment of the minimum wage of P3.45 per day plus rice ration, or P4 without rice
ration, to be unmeritorious and untenable.
The second question involved herein relates to the additional compensation that should be paid by the respondent
company to its laborers for work rendered on Sundays and holidays. It is admitted that the respondent company is paying
an additional compensation of 50 per cent based on the basic "cash portion" of the laborer's wage of P2.20 per day; i.e.,
P1.10 additional compensation for each Sunday or holiday's work. Petitioner union insists, however, that this 50 per cent
additional compensation should be computed on the minimum wage of P400 and not on the "cash portion" of the laborer's
wage of P2.20, under the provisions of the Agreement of October 29, 1952 and the Minimum Wage Law.
SEC. 4. Commonwealth Act No. 444 (otherwise known as the Eight Hour Labor Law) provides:
No person, firm, or corporations, business establishment or place or center of labor shall compel an employee or
laborer to work during Sundays and holidays, unless he is paid an additional sum of at least twenty-five per
centum of his regular renumeration:
The minimum legal additional compensation for work on Sundays and legal holidays is, therefore, 25 per cent of the
laborer's regular renumeration. Under the Minimum Wage Law, this minimum additional compensation is P1 a day (25 per
cent of P4, the minimum daily wage).
While the respondent company computes the additional compensation given to its laborers for work on Sundays and
holidays on the "cash portion" of their wages of P2.20, it is giving them 50 per cent thereof, or P1.10 a day. Considering
that the minimum additional compensation fixed by the law is P1 (25 per cent of P4), the compensation being paid by the
respondent company to its laborers is even higher than such minimum legal additional compensation. We, therefore, see
no error in the holding of the Court a quo that the respondent company has not violated the law with respect to the
payment of additional compensation for work rendered by its laborers on Sundays and legal holidays.

Finding no reason to sustain the present petition for review, the same is, therefore, dismissed, with costs against the
petitioner Atok-Big Wedge Mutual Benefit Association.
Bengzon, Acting C.J., Padilla, Montemayor, Reyes, A., Jugo, Bautista Angelo, Labrador, and Concepcion, JJ.,concur.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. L-12444

February 28, 1963

STATES MARINE CORPORATION and ROYAL LINE, INC., petitioners,


vs.
CEBU SEAMEN'S ASSOCIATION, INC., respondent.
Pedro B. Uy Calderon for petitioners.
Gaudioso C. Villagonzalo for respondent.
PAREDES, J.:
Petitioners States Marine Corporation and Royal Line, Inc. were engaged in the business of marine coastwise
transportation, employing therein several steamships of Philippine registry. They had a collective bargaining contract with
the respondent Cebu Seamen's Association, Inc. On September 12, 1952, the respondent union filed with the Court of
Industrial Relations (CIR), a petition (Case No. 740-V) against the States Marine Corporation, later amended on May 4,
1953, by including as party respondent, the petitioner Royal Line, Inc. The Union alleged that the officers and men
working on board the petitioners' vessels have not been paid their sick leave, vacation leave and overtime pay; that the
petitioners threatened or coerced them to accept a reduction of salaries, observed by other shipowners; that after the
Minimum Wage Law had taken effect, the petitioners required their employees on board their vessels, to pay the sum of
P.40 for every meal, while the masters and officers were not required to pay their meals and that because Captain Carlos
Asensi had refused to yield to the general reduction of salaries, the petitioners dismissed said captain who now claims for
reinstatement and the payment of back wages from December 25, 1952, at the rate of P540.00, monthly.
The petitioners' shipping companies, answering, averred that very much below 30 of the men and officers in their employ
were members of the respondent union; that the work on board a vessel is one of comparative ease; that petitioners have
suffered financial losses in the operation of their vessels and that there is no law which provides for the payment of sick
leave or vacation leave to employees or workers of private firms; that as regards the claim for overtime pay, the
petitioners have always observed the provisions of Comm. Act No. 444, (Eight-Hour Labor Law), notwithstanding the fact
that it does not apply to those who provide means of transportation; that the shipowners and operators in Cebu were
paying the salaries of their officers and men, depending upon the margin of profits they could realize and other factors or
circumstances of the business; that in enacting Rep. Act No. 602 (Minimum Wage Law), the Congress had in mind that
the amount of P.40 per meal, furnished the employees should be deducted from the daily wages; that Captain Asensi was
not dismissed for alleged union activities, but with the expiration of the terms of the contract between said officer and the
petitioners, his services were terminated.
A decision was rendered on February 21, 1957 in favor of the respondent union. The motion for reconsideration thereof,
having been denied, the companies filed the present writ of certiorari, to resolve legal question involved. Always bearing in
mind the deep-rooted principle that the factual findings of the Court of Industrial Relations should not be disturbed, if
supported by substantial evidence, the different issues are taken up, in the order they are raised in the brief for the
petitioners.
1. First assignment of error. The respondent court erred in holding that it had jurisdiction over case No. 740-V,
notwithstanding the fact that those who had dispute with the petitioners, were less than thirty (30) in number.
The CIR made a finding that at the time of the filing of the petition in case No. 740-V, respondent Union
had more than thirty members actually working with the companies, and the court declared itself with
jurisdiction to take cognizance of the case. Against this order, the herein petitioners did not file a motion
for reconsideration or a petition for certiorari. The finding of fact made by the CIR became final and
conclusive, which We are not now authorized to alter or modify. It is axiomatic that once the CIR had
acquired jurisdiction over a case, it continues to have that jurisdiction, until the case is terminated (Manila
Hotel Emp. Association v. Manila Hotel Company, et al., 40 O.G. No. 6, p. 3027). It was abundantly
shown that there were 56 members who signed Exhibits A, A-I to A-8, and that 103 members of the Union
are listed in Exhibits B, B-1 to B-35, F, F-1 and K-2 to K-3. So that at the time of the filing of the petition,
the respondent union had a total membership of 159, working with the herein petitioners, who were
presumed interested in or would be benefited by the outcome of the case (NAMARCO v. CIR, L-17804,
Jan. 1963). Annex D, (Order of the CIR, dated March 8, 1954), likewise belies the contention of herein
petitioner in this regard. The fact that only 7 claimed for overtime pay and only 7 witnesses testified, does
not warrant the conclusion that the employees who had some dispute with the present petitioners were
less than 30. The ruling of the CIR, with respect to the question of jurisdiction is, therefore, correct.

2. Second assignment of error. The CIR erred in holding, that inasmuch as in the shipping articles, the herein
petitioners have bound themselves to supply the crew with provisions and with such "daily subsistence as shall be
mutually agreed upon" between the master and the crew, no deductions for meals could be made by the
aforesaid petitioners from their wages or salaries.
3. Third assignment of error. The CIR erred in holding that inasmuch as with regard to meals furnished to crew
members of a vessel, section 3(f) of Act No. 602 is the general rule, which section 19 thereof is the exception, the
cost of said meals may not be legally deducted from the wages or salaries of the aforesaid crew members by the
herein petitioners.
4. Fourth assignment of error. The CIR erred in declaring that the deduction for costs of meals from the wages
or salaries after August 4, 1951, is illegal and same should be reimbursed to the employee concerned, in spite of
said section 3, par. (f) of Act No. 602.
It was shown by substantial evidence, that since the beginning of the operation of the petitioner's business, all the crew of
their vessels have been signing "shipping articles" in which are stated opposite their names, the salaries or wages they
would receive. All seamen, whether members of the crew or deck officers or engineers, have been furnished free meals
by the ship owners or operators. All the shipping articles signed by the master and the crew members, contained, among
others, a stipulation, that "in consideration of which services to be duly performed, the said master hereby agrees to pay
to the said crew, as wages, the sums against their names respectively expressed in the contract; and to supply them with
provisions as provided herein ..." (Sec. 8, par. [b], shipping articles), and during the duration of the contract "the master of
the vessel will provide each member of the crew such daily subsistence as shall be mutually agreed daily upon between
said master and crew; or, in lieu of such subsistence the crew may reserve the right to demand at the time of execution of
these articles that adequate daily rations be furnished each member of the crew." (Sec. 8, par. [e], shipping articles). It is,
therefore, apparent that, aside from the payment of the respective salaries or wages, set opposite the names of the crew
members, the petitioners bound themselves to supply the crew with ship's provisions, daily subsistence or daily rations,
which include food.
This was the situation before August 4, 1951, when the Minimum Wage Law became effective. After this date, however,
the companies began deducting the cost of meals from the wages or salaries of crew members; but no such deductions
were made from the salaries of the deck officers and engineers in all the boats of the petitioners. Under the existing laws,
therefore, the query converges on the legality of such deductions. While the petitioners herein contend that the deductions
are legal and should not be reimbursed to the respondent union, the latter, however, claims that same are illegal and
reimbursement should be made.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable
Court, without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of
facts. 1wph1.t
We hold that such deductions are not authorized. In the coastwise business of transportation of passengers and freight,
the men who compose the complement of a vessel are provided with free meals by the shipowners, operators or agents,
because they hold on to their work and duties, regardless of "the stress and strain concomitant of a bad weather,
unmindful of the dangers that lurk ahead in the midst of the high seas."
Section 3, par. f, of the Minimum Wage Law, (R.A. No. 602), provides as follows
(f) Until and unless investigations by the Secretary of Labor on his initiative or on petition of any interested party
result in a different determination of the fair and reasonable value, the furnishing of meals shall be valued at not
more than thirty centavos per meal for agricultural employees and not more than forty centavos for any other
employees covered by this Act, and the furnishing of housing shall be valued at not more than twenty centavos
daily for agricultural workers and not more than forty centavos daily for other employees covered by this Act.
Petitioners maintain, in view of the above provisions, that in fixing the minimum wage of employees, Congress took into
account the meals furnished by employers and that in fixing the rate of forty centavos per meal, the lawmakers had in
mind that the latter amount should be deducted from the daily wage, otherwise, no rate for meals should have been
provided.
However, section 19, same law, states
SEC. 19. Relations to other labor laws and practices. Nothing in this Act shall deprive an employee of the right
to seek fair wages, shorter working hours and better working conditions nor justify an employer in violating any
other labor law applicable to his employees, in reducing the wage now paid to any of his employees in excess of
the minimum wage established under this Act, or in reducing supplements furnished on the date of enactment.
At first blush, it would appear that there exists a contradiction between the provisions of section 3(f) and section 19 of
Rep. Act No. 602; but from a careful examination of the same, it is evident that Section 3(f) constitutes the general rule,
while section 19 is the exception. In other words, if there are no supplements given, within the meaning and contemplation
of section 19, but merely facilities, section 3(f) governs. There is no conflict; the two provisions could, as they should be
harmonized. And even if there is such a conflict, the respondent CIR should resolve the same in favor of the safety and
decent living laborers (Art. 1702, new Civil Code)..

It is argued that the food or meals given to the deck officers, marine engineers and unlicensed crew members in question,
were mere "facilities" which should be deducted from wages, and not "supplements" which, according to said section 19,
should not be deducted from such wages, because it is provided therein: "Nothing in this Act shall deprive an employee of
the right to such fair wage ... or in reducing supplements furnished on the date of enactment." In the case of Atok-Big
Wedge Assn. v. Atok-Big Wedge Co., L-7349, July 19, 1955; 51 O.G. 3432, the two terms are defined as follows
"Supplements", therefore, constitute extra remuneration or special privileges or benefits given to or received by
the laborers over and above their ordinary earnings or wages. "Facilities", on the other hand, are items of expense
necessary for the laborer's and his family's existence and subsistence so that by express provision of law (Sec.
2[g]), they form part of the wage and when furnished by the employer are deductible there from, since if they are
not so furnished, the laborer would spend and pay for them just the same.
In short, the benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic
or ordinary earning or wage, is supplement; and when said benefit or privilege is part of the laborers' basic wages, it is a
facility. The criterion is not so much with the kind of the benefit or item (food, lodging, bonus or sick leave) given, but its
purpose. Considering, therefore, as definitely found by the respondent court that the meals were freely given to crew
members prior to August 4, 1951, while they were on the high seas "not as part of their wages but as a necessary matter
in the maintenance of the health and efficiency of the crew personnel during the voyage", the deductions therein made for
the meals given after August 4, 1951, should be returned to them, and the operator of the coastwise vessels affected
should continue giving the same benefit..
In the case of Cebu Autobus Company v. United Cebu Autobus Employees Assn., L-9742, Oct. 27, 1955, the company
used to pay to its drivers and conductors, who were assigned outside of the City limits, aside from their regular salary, a
certain percentage of their daily wage, as allowance for food. Upon the effectivity of the Minimum Wage Law, however,
that privilege was stopped by the company. The order CIR to the company to continue granting this privilege, was upheld
by this Court.
The shipping companies argue that the furnishing of meals to the crew before the effectivity of Rep. Act No. 602, is of no
moment, because such circumstance was already taken into consideration by Congress, when it stated that "wage"
includes the fair and reasonable value of boards customarily furnished by the employer to the employees. If We are to
follow the theory of the herein petitioners, then a crew member, who used to receive a monthly wage of P100.00, before
August 4, 1951, with no deduction for meals, after said date, would receive only P86.00 monthly (after deducting the cost
of his meals at P.40 per meal), which would be very much less than the P122.00 monthly minimum wage, fixed in
accordance with the Minimum Wage Law. Instead of benefiting him, the law will adversely affect said crew member. Such
interpretation does not conform with the avowed intention of Congress in enacting the said law.
One should not overlook a fact fully established, that only unlicensed crew members were made to pay for their meals or
food, while the deck officers and marine engineers receiving higher pay and provided with better victuals, were not. This
pictures in no uncertain terms, a great and unjust discrimination obtaining in the present case (Pambujan Sur United Mine
Workers v. CIR, et al., L-7177, May 31, 1955).
Fifth, Sixth and Seventh assignments of error. The CIR erred in holding that Severino Pepito, a boatsman, had
rendered overtime work, notwithstanding the provisions of section 1, of C.A. No. 444; in basing its finding of the alleged
overtime, on the uncorroborated testimony of said Severino Pepito; and in ordering the herein petitioners to pay him.
Severino Pepito was found by the CIR to have worked overtime and had not been paid for such services. Severino Pepito
categorically stated that he worked during the late hours of the evening and during the early hours of the day when the
boat docks and unloads. Aside from the above, he did other jobs such as removing rusts and cleaning the vessel, which
overtime work totalled to 6 hours a day, and of which he has not been paid as yet. This statement was not rebutted by the
petitioners. Nobody working with him on the same boat "M/V Adriana" contrawise. The testimonies of boatswains of other
vessels(M/V Iruna and M/V Princesa), are incompetent and unreliable. And considering the established fact that the work
of Severino Pepito was continuous, and during the time he was not working, he could not leave and could not completely
rest, because of the place and nature of his work, the provisions of sec. 1, of Comm. Act No. 444, which states "When the
work is not continuous, the time during which the laborer is not working and can leave his working place and can rest
completely shall not be counted", find no application in his case.
8. Eighth assignment of error. The CIR erred in ordering petitioners to reinstate Capt. Carlos Asensi to his former
position, considering the fact that said officer had been employed since January 9, 1953, as captain of a vessel belonging
to another shipping firm in the City of Cebu.
The CIR held
Finding that the claims of Captain Carlos Asensi for back salaries from the time of his alleged lay-off on March 20,
1952, is not supported by the evidence on record, the same is hereby dismissed. Considering, however, that
Captain Asensi had been laid-off for a long time and that his failure to report for work is not sufficient cause for his
absolute dismissal, respondents are hereby ordered to reinstate him to his former job without back salary but
under the same terms and conditions of employment existing prior to his lay-off, without loss of seniority and other
benefits already acquired by him prior to March 20, 1952. This Court is empowered to reduce the punishment
meted out to an erring employee (Standard Vacuum Oil Co., Inc. v. Katipunan Labor Union, G.R. No. L-9666, Jan.
30, 1957). This step taken is in consonance with section 12 of Comm. Act 103, as amended." (p. 16, Decision,
Annex 'G').
The ruling is in conformity with the evidence, law and equity.

Ninth and Tenth assignments of error. The CIR erred in denying a duly verified motion for new trial, and in overruling
petitioner's motion for reconsideration.
The motion for new trial, supported by an affidavit, states that the movants have a good and valid defense and the same
is based on three orders of the WAS (Wage Administration Service), dated November 6, 1956. It is alleged that they
would inevitably affect the defense of the petitioners. The motion for new trial is without merit. Having the said wage
Orders in their possession, while the case was pending decision, it was not explained why the proper move was not taken
to introduce them before the decision was promulgated. The said wage orders, dealing as they do, with the evaluation of
meals and facilities, are irrelevant to the present issue, it having been found and held that the meals or food in question
are not facilities but supplements. The original petition in the CIR having been filed on Sept. 12, 1952, the WAS could
have intervened in the manner provided by law to express its views on the matter. At any rate, the admission of the three
wage orders have not altered the decision reached in this case.
IN VIEW HEREOF, the petition is dismissed, with costs against the petitioners.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Dizon, Regala and Makalintal, JJ.,
concur.

[G.R. No. 118506. April 18, 1997]

NORMA MABEZA, petitioner, vs. NATIONAL


SUPREME, respondents.

LABOR

RELATIONS

COMMISSION,

PETER

NG/HOTEL

DECISION
KAPUNAN, J.:
This petition seeking the nullification of a resolution of public respondent National Labor Relations Commission dated
April 28, 1994 vividly illustrates why courts should be ever vigilant in the preservation of the constitutionally enshrined
rights of the working class. Without the protection accorded by our laws and the tempering of courts, the natural and
historical inclination of capital to ride roughshod over the rights of labor would run unabated.
The facts of the case at bar, culled from the conflicting versions of petitioner and private respondent, are illustrative.
Petitioner Norma Mabeza contends that around the first week of May, 1991, she and her co-employees at the Hotel
Supreme in Baguio City were asked by the hotel's management to sign an instrument attesting to the latter's compliance
[1]
[2]
with minimum wage and other labor standard provisions of law. The instrument provides:
JOINT AFFIDAVIT
We, SYLVIA IGANA, HERMINIGILDO AQUINO, EVELYN OGOY, MACARIA JUGUETA, ADELAIDA NONOG,
NORMA MABEZA, JONATHAN PICART and JOSE DIZON, all of legal ages (sic), Filipinos and residents of
Baguio City, under oath, depose and say:
1. That we are employees of Mr. Peter L. Ng of his Hotel Supreme situated at No. 416 Magsaysay Ave., Baguio City;
2. That the said Hotel is separately operated from the Ivy's Grill and Restaurant;
3. That we are all (8) employees in the hotel and assigned in each respective shifts;
4. That we have no complaints against the management of the Hotel Supreme as we are paid accordingly and that we are
treated well.
5. That we are executing this affidavit voluntarily without any force or intimidation and for the purpose of informing the
authorities concerned and to dispute the alleged report of the Labor Inspector of the Department of Labor and
Employment conducted on the said establishment on February 2, 1991.
IN WITNESS WHEREOF, we have hereunto set our hands this 7th day of May, 1991 at Baguio City, Philippines.
(Sgd.)
SYLVIA IGAMA

(Sgd.)
HERMINIGILDO AQUINO

(Sgd)
MACARIA JUGUETA

(Sgd.)
ADELAIDA NONOG

(Sgd)
JONATHAN PICART

(Sgd.)
EVELYN OGOY
(Sgd.)
NORMA MABEZA
(Sgd.)
JOSE DIZON

SUBSCRIBED AND SWORN to before me this 7th day of May, 1991, at Baguio City, Philippines.

Asst. City Prosecutor


Petitioner signed the affidavit but refused to go to the City Prosecutor's Office to swear to the veracity and contents of
the affidavit as instructed by management. The affidavit was nevertheless submitted on the same day to the Regional
Office of the Department of Labor and Employment in Baguio City.
As gleaned from the affidavit, the same was drawn by management for the sole purpose of refuting findings of the
Labor Inspector of DOLE (in an inspection of respondent's establishment on February 2, 1991) apparently adverse to the
[3]
private respondent.
After she refused to proceed to the City Prosecutor's Office - on the same day the affidavit was submitted to the
Cordillera Regional Office of DOLE - petitioner avers that she was ordered by the hotel management to turn over the keys
[4]
to her living quarters and to remove her belongings from the hotel premises. According to her, respondent strongly
[5]
chided her for refusing to proceed to the City Prosecutor's Office to attest to the affidavit. She thereafter reluctantly filed
a leave of absence from her job which was denied by management. When she attempted to return to work on May 10,
1991, the hotel's cashier, Margarita Choy, informed her that she should not report to work and, instead, continue with her
unofficial leave of absence. Consequently, on May 13, 1991, three days after her attempt to return to work, petitioner filed
a complaint for illegal dismissal before the Arbitration Branch of the National Labor Relations Commission - CAR Baguio
City. In addition to her complaint for illegal dismissal, she alleged underpayment of wages, non-payment of holiday pay,
service incentive leave pay, 13th month pay, night differential and other benefits. The complaint was docketed as NLRC
Case No. RAB-CAR-05-0198-91 and assigned to Labor Arbiter Felipe P. Pati.
Responding to the allegations made in support of petitioner's complaint for illegal dismissal, private respondent Peter
[6]
Ng alleged before Labor Arbiter Pati that petitioner "surreptitiously left (her job) without notice to the management" and
that she actually abandoned her work. He maintained that there was no basis for the money claims for underpayment
[7]
and other benefits as these were paid in the form of facilities to petitioner and the hotel's other employees. Pointing to
the Affidavit of May 7, 1991, the private respondent asserted that his employees actually have no problems with
management. In a supplemental answer submitted eleven (11) months after the original complaint for illegal dismissal was
filed, private respondent raised a new ground, loss of confidence, which was supported by a criminal complaint for
[8]
Qualified Theft he filed before the prosecutor's office of the City of Baguio against petitioner on July 4, 1991.
On May 14, 1993, Labor Arbiter Pati rendered a decision dismissing petitioner's complaint on the ground of loss of
confidence. His disquisitions in support of his conclusion read as follows:
It appears from the evidence of respondent that complainant carted away or stole one (1) blanket, 1 piece
bedsheet, 1 piece thermos, 2 pieces towel (Exhibits '9', '9-A,' '9-B,' '9-C' and '10' pages 12-14 TSN, December 1,
1992).
In fact, this was the reason why respondent Peter Ng lodged a criminal complaint against complainant for
qualified theft and perjury. The fiscal's office finding a prima facie evidence that complainant committed the
crime of qualified theft issued a resolution for its filing in court but dismissing the charge of perjury (Exhibit '4' for
respondent and Exhibit 'B-7' for complainant). As a consequence, complainant was charged in court for the said
crime (Exhibit '5' for respondent and Exhibit 'B-6' for the complainant).
With these pieces of evidence, complainant committed serious misconduct against her employer which is one of
the just and valid grounds for an employer to terminate an employee (Article 282 of the Labor Code as
[9]
amended).
[10]

On April 28, 1994, respondent NLRC promulgated its assailed Resolution affirming the Labor Arbiter's decision.
[11]
The resolution substantially incorporated the findings of the Labor Arbiter. Unsatisfied, petitioner instituted the instant
[12]
special civil action for certiorari under Rule 65 of the Rules of Court on the following grounds:
1.

WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION
COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF
DISCRETION IN ITS FAILURE TO CONSIDER THAT THE ALLEGED LOSS OF CONFIDENCE IS A
FALSE CAUSE AND AN AFTERTHOUGHT ON THE PART OF THE RESPONDENT-EMPLOYER
TO JUSTIFY, ALBEIT ILLEGALLY, THE DISMISSAL OF THE COMPLAINANT FROM HER
EMPLOYMENT;

2.

WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION
COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF
DISCRETION IN ADOPTING THE RULING OF THE LABOR ARBITER THAT THERE WAS NO
UNDERPAYMENT OF WAGES AND BENEFITS ON THE BASIS OF EXHIBIT "8" (AN UNDATED
SUMMARY OF COMPUTATION PREPARED BY ALLEGEDLY BY RESPONDENT'S EXTERNAL
ACCOUNTANT) WHICH IS TOTALLY INADMISSIBLE AS AN EVIDENCE TO PROVE PAYMENT
OF WAGES AND BENEFITS;

3.

WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION
COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF
DISCRETION IN FAILING TO CONSIDER THE EVIDENCE ADDUCED BEFORE THE LABOR
ARBITER AS CONSTITUTING UNFAIR LABOR PRACTICE COMMITTED BY THE RESPONDENT.

The Solicitor General, in a Manifestation in lieu of Comment dated August 8, 1995 rejects private respondent's
[13]
principal claims and defenses and urges this Court to set aside the public respondent's assailed resolution.
We agree.
It is settled that in termination cases the employer bears the burden of proof to show that the dismissal is for just
[14]
cause, the failure of which would mean that the dismissal is not justified and the employee is entitled to reinstatement.

In the case at bar, the private respondent initially claimed that petitioner abandoned her job when she failed to return
to work on May 8, 1991. Additionally, in order to strengthen his contention that there existed sufficient cause for the
termination of petitioner, he belatedly included a complaint for loss of confidence, supporting this with charges that
[15]
petitioner had stolen a blanket, a bedsheet and two towels from the hotel. Appended to his last complaint was a suit for
qualified theft filed with the Baguio City prosecutor's office.
From the evidence on record, it is crystal clear that the circumstances upon which private respondent anchored his
claim that petitioner "abandoned" her job were not enough to constitute just cause to sanction the termination of her
services under Article 283 of the Labor Code. For abandonment to arise, there must be concurrence of two things: 1) lack
[16]
[17]
of intention to work; and 2) the presence of overt acts signifying the employee's intention not to work.
In the instant case, respondent does not dispute the fact that petitioner tried to file a leave of absence when she
learned that the hotel management was displeased with her refusal to attest to the affidavit. The fact that she made this
attempt clearly indicates not an intention to abandon but an intention to return to work after the period of her leave of
absence, had it been granted, shall have expired.
Furthermore, while absence from work for a prolonged period may suggest abandonment in certain instances, mere
absence of one or two days would not be enough to sustain such a claim. The overt act (absence) ought to unerringly
[18]
point to the fact that the employee has no intention to return to work, which is patently not the case here. In fact,
several days after she had been advised to take an informal leave, petitioner tried to resume working with the hotel, to no
avail. It was only after she had been repeatedly rebuffed that she filed a case for illegal dismissal. These acts militate
against the private respondent's claim that petitioner abandoned her job. As the Solicitor General in his manifestation
observed:
Petitioner's absence on that day should not be construed as abandonment of her job. She did not report
because the cashier told her not to report anymore, and that private respondent Ng did not want to see her in the
hotel premises. But two days later or on the 10th of May, after realizing that she had to clarify her employment
[19]
status, she again reported for work. However, she was prevented from working by private respondents.
We now come to the second cause raised by private respondent to support his contention that petitioner was validly
dismissed from her job.
Loss of confidence as a just cause for dismissal was never intended to provide employers with a blank check for
terminating their employees. Such a vague, all-encompassing pretext as loss of confidence, if unqualifiedly given the seal
of approval by this Court, could readily reduce to barren form the words of the constitutional guarantee of security of
tenure. Having this in mind, loss of confidence should ideally apply only to cases involving employees occupying
positions of trust and confidence or to those situations where the employee is routinely charged with the care and custody
of the employer's money or property. To the first class belong managerial employees, i.e., those vested with the powers
or prerogatives to lay down management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees or effectively recommend such managerial actions; and to the second class belong cashiers,
auditors, property custodians, etc., or those who, in the normal and routine exercise of their functions, regularly handle
significant amounts of money or property. Evidently, an ordinary chambermaid who has to sign out for linen and other
hotel property from the property custodian each day and who has to account for each and every towel or bedsheet utilized
by the hotel's guests at the end of her shift would not fall under any of these two classes of employees for which loss of
confidence, if ably supported by evidence, would normally apply. Illustrating this distinction, this Court, in Marina Port
[20]
Services, Inc. vs. NLRC, has stated that:
To be sure, every employee must enjoy some degree of trust and confidence from the employer as that is one
reason why he was employed in the first place. One certainly does not employ a person he distrusts. Indeed,
even the lowly janitor must enjoy that trust and confidence in some measure if only because he is the one who
opens the office in the morning and closes it at night and in this sense is entrusted with the care or protection of
the employer's property. The keys he holds are the symbol of that trust and confidence.
By the same token, the security guard must also be considered as enjoying the trust and confidence of his
employer, whose property he is safeguarding. Like the janitor, he has access to this property. He too, is
charged with its care and protection.
Notably, however, and like the janitor again, he is entrusted only with the physical task of protecting that
property. The employer's trust and confidence in him is limited to that ministerial function. He is not entrusted, in
the Labor Arbiter's words, 'with the duties of safekeeping and safeguarding company policies, management
instructions, and company secrets such as operation devices.' He is not privy to these confidential matters,
which are shared only in the higher echelons of management. It is the persons on such levels who, because
they discharge these sensitive duties, may be considered holding positions of trust and confidence. The security
[21]
guard does not belong in such category.
More importantly, we have repeatedly held that loss of confidence should not be simulated in order to justify what
would otherwise be, under the provisions of law, an illegal dismissal. "It should not be used as a subterfuge for causes
which are illegal, improper and unjustified. It must be genuine, not a mere afterthought to justify an earlier action taken in
[22]
bad faith."
In the case at bar, the suspicious delay in private respondent's filing of qualified theft charges against petitioner long
after the latter exposed the hotel's scheme (to avoid its obligations as employer under the Labor Code) by her act of filing
illegal dismissal charges against the private respondent would hardly warrant serious consideration of loss of confidence
as a valid ground for dismissal. Notably, the Solicitor General has himself taken a position opposite the public respondent
and has observed that:
If petitioner had really committed the acts charged against her by private respondents (stealing supplies of
respondent hotel), private respondents should have confronted her before dismissing her on that ground. Private
respondents did not do so. In fact, private respondent Ng did not raise the matter when petitioner went to see

him on May 9, 1991, and handed him her application for leave. It took private respondents 52 days or up to July
4, 1991 before finally deciding to file a criminal complaint against petitioner, in an obvious attempt to build a case
against her.
The manipulations of private respondents should not be countenanced.

[23]

Clearly, the efforts to justify petitioner's dismissal - on top of the private respondent's scheme of inducing his
employees to sign an affidavit absolving him from possible violations of the Labor Code - taints with evident bad faith and
deliberate malice petitioner's summary termination from employment.
Having said this, we turn to the important question of whether or not the dismissal by the private respondent of
petitioner constitutes an unfair labor practice.
The answer in this case must inevitably be in the affirmative.
The pivotal question in any case where unfair labor practice on the part of the employer is alleged is whether or not
the employer has exerted pressure, in the form of restraint, interference or coercion, against his employee's right to
institute concerted action for better terms and conditions of employment. Without doubt, the act of compelling employees
to sign an instrument indicating that the employer observed labor standards provisions of law when he might have not,
together with the act of terminating or coercing those who refuse to cooperate with the employer's scheme constitutes
unfair labor practice. The first act clearly preempts the right of the hotel's workers to seek better terms and conditions of
employment through concerted action.
We agree with the Solicitor General's observation in his manifestation that "[t]his actuation... is analogous to the
[24]
situation envisaged in paragraph (f) of Article 248 of the Labor Code" which distinctly makes it an unfair labor practice
"to dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give
[25]
testimony" under the Labor Code. For in not giving positive testimony in favor of her employer, petitioner had reserved
not only her right to dispute the claim and proffer evidence in support thereof but also to work for better terms and
conditions of employment.
For refusing to cooperate with the private respondent's scheme, petitioner was obviously held up as an example to all
of the hotel's employees, that they could only cause trouble to management at great personal inconvenience. Implicit in
the act of petitioner's termination and the subsequent filing of charges against her was the warning that they would not
only be deprived of their means of livelihood, but also possibly, their personal liberty.
This Court does not normally overturn findings and conclusions of quasi-judicial agencies when the same are ably
supported by the evidence on record. However, where such conclusions are based on a misperception of facts or where
they patently fly in the face of reason and logic, we will not hesitate to set aside those conclusions. Going into the issue of
petitioner's money claims, we find one more salient reason in this case to set things right: the labor arbiter's evaluation of
the money claims in this case incredibly ignores existing law and jurisprudence on the matter. Its blatant one-sidedness
simply raises the suspicion that something more than the facts, the law and jurisprudence may have influenced the
decision at the level of the Arbiter.
Labor Arbiter Pati accepted hook, line and sinker the private respondent's bare claim that the reason the monetary
benefits received by petitioner between 1981 to 1987 were less than minimum wage was because petitioner did not factor
[26]
in the meals, lodging, electric consumption and water she received during the period in her computations. Granting that
meals and lodging were provided and indeed constituted facilities, such facilities could not be deducted without the
employer complying first with certain legal requirements. Without satisfying these requirements, the employer simply
cannot deduct the value from the employee's wages. First, proof must be shown that such facilities are customarily
furnished by the trade. Second, the provision of deductible facilities must be voluntarily accepted in writing by the
[27]
employee. Finally, facilities must be charged at fair and reasonable value.
These requirements were not met in the instant case. Private respondent "failed to present any company policy or
[28]
guideline to show that the meal and lodging . . . (are) part of the salary;" he failed to provide proof of the employee's
[29]
written authorization; and, he failed to show how he arrived at the valuations.
Curiously, in the case at bench, the only valuations relied upon by the labor arbiter in his decision were figures
furnished by the private respondent's own accountant, without corroborative evidence. On the pretext that records prior to
the July 16, 1990 earthquake were lost or destroyed, respondent failed to produce payroll records, receipts and other
relevant documents, where he could have, as has been pointed out in the Solicitor General's manifestation, "secured
[30]
certified copies thereof from the nearest regional office of the Department of Labor, the SSS or the BIR."
More significantly, the food and lodging, or the electricity and water consumed by the petitioner were not facilities but
supplements. A benefit or privilege granted to an employee for the convenience of the employer is not a facility. The
criterion in making a distinction between the two not so much lies in the kind (food, lodging) but the
[31]
purpose. Considering, therefore, that hotel workers are required to work different shifts and are expected to be available
at various odd hours, their ready availability is a necessary matter in the operations of a small hotel, such as the private
respondent's hotel.
It is therefore evident that petitioner is entitled to the payment of the deficiency in her wages equivalent to
the full wage applicable from May 13, 1988 up to the date of her illegal dismissal.
Additionally, petitioner is entitled to payment of service incentive leave pay, emergency cost of living allowance, night
differential pay, and 13th month pay for the periods alleged by the petitioner as the private respondent has never been
able to adduce proof that petitioner was paid the aforestated benefits.
However, the claims covering the period of October 1987 up to the time of filing the case on May 13, 1988 are barred
by prescription as P.D. 442 (as amended) and its implementing rules limit all money claims arising out of employer[32]
employee relationship to three (3) years from the time the cause of action accrues.

We depart from the settled rule that an employee who is unjustly dismissed from work normally should be reinstated
without loss of seniority rights and other privileges. Owing to the strained relations between petitioner and private
respondent, allowing the former to return to her job would only subject her to possible harassment and future
embarrassment. In the instant case, separation pay equivalent to one month's salary for every year of continuous service
with the private respondent would be proper, starting with her job at the Belfront Hotel.
In addition to separation pay, backwages are in order. Pursuant to R.A. 6715 and our decision in Osmalik
[33]
Bustamante, et al. vs. National Labor Relations Commission, petitioner is entitled to full backwages from the time of her
illegal dismissal up to the date of promulgation of this decision without qualification or deduction.
Finally, in dismissal cases, the law requires that the employer must furnish the employee sought to be terminated
from employment with two written notices before the same may be legally effected. The first is a written notice containing
a statement of the cause(s) for dismissal; the second is a notice informing the employee of the employer's decision to
terminate him stating the basis of the dismissal. During the process leading to the second notice, the employer must give
the employee ample opportunity to be heard and defend himself, with the assistance of counsel if he so desires.
Given the seriousness of the second cause (qualified theft) of the petitioner's dismissal, it is noteworthy that the
private respondent never even bothered to inform petitioner of the charges against her. Neither was petitioner given the
opportunity to explain the loss of the articles. It was only almost two months after petitioner had filed a complaint for
illegal dismissal, as an afterthought, that the loss was reported to the police and added as a supplemental answer to
petitioner's complaint. Clearly, the dismissal of petitioner without the benefit of notice and hearing prior to her termination
violated her constitutional right to due process. Under the circumstances, an award of One Thousand Pesos (P1,000.00)
on top of payment of the deficiency in wages and benefits for the period aforestated would be proper.
WHEREFORE, premises considered, the RESOLUTION of the National Labor Relations Commission dated April 24,
1994 is REVERSED and SET ASIDE, with costs. For clarity, the economic benefits due the petitioner are hereby
summarized as follows:
1)
Deficiency wages and the applicable ECOLA from May 13, 1988 up to the date of petitioner's illegal
dismissal;
2)

Service incentive leave pay; night differential pay and 13th month pay for the same period;

3)
Separation pay equal to one month's salary for every year of petitioner's continuous service with the
private respondent starting with her job at the Belfront Hotel;
4)
Full backwages, without qualification or deduction, from the date of petitioner's illegal dismissal up to the
[34]
date of promulgation of this decision pursuant to our ruling in Bustamante vs. NLRC.
5)

P1.000.00.

SO ORDERED.
Padilla, Bellosillo and Vitug, JJ., concur.
Hermosisima, Jr., J., on leave.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. L-58870 December 18, 1987
CEBU INSTITUTE OF TECHNOLOGY (CIT), petitioner,
vs.
HON. BLAS OPLE, in his capacity as Minister, Ministry of Labor and Employment, JULIUS ABELLA, ARSENIO
ABELLANA, RODRIGO ALIWALAS, ZOSIMO ALMOCERA, GERONIDES ANCOG, GREGORIO ASIA, ROGER
BAJARIAS, BERNARDO BALATAYO, JR., BASILIO CABALLES, DEMOCRITO TEVES, VOLTAIRE DELA CERNA,
ROBERTO COBARRUBIAS, VILMA GOMEZ CHUA, RUBEN GALLITO, EDGARDO CONCEPCION, VICTOR
COQUILLA, JOSE DAKOYKOY, PATERNO WONG, EVELYN LACAYA, RODRIGO GONZALES, JEOGINA GOZO,
MIGUEL CABALLES, CONSUELO JAVELOSA, QUILIANO LASCO, FRANKLIN LAUTA, JUSTINIANA LARGO,
RONALD LICUPA, ALAN MILANO, MARIA MONSANTO, REYNALDO NOYNAY, RAMON PARADELA, NATALIO
PLAZA, LUZPURA QUIROGA, NOE RODIS, COSMENIA SAAVEDRA, LEONARDO SAGARIO, LETICIA SERRA,
SIEGFREDO TABANAG, LUCINO TAMAOSO, DANILO TERANTE, HELEN CALVO TORRES, ERNESTO
VILLANUEVA, DOLORES VILLONDO, EDWARD YAP, ROWENA VIVARES, DOLORES SANANAM, RODRIGO
BACALSO, YOLANDA TABLANTE, ROMERO BALATUCAN, CARMELITA LADOT, PANFILO CANETE, EMMANUEL
CHAVEZ, JR., SERGIO GALIDO, ANGEL COLLERA, ZOSIMO CUNANAN, RENE BURT LLANTO, GIL BATAYOLA,
VICENTE DELANTE, CANDELARIO DE DIOS, JOSE MA. ESTELLA, NECITA TRINIDAD, ROTELLO ILUMBA,
TEODORICO JAYME, RAYMUNDO ABSIN, RUDY MANEJA, REYNA RAMOS, ANASTACIA BLANCO, FE
DELMUNDO, ELNORA MONTERA, MORRISON MONTESCLAROS, ELEAZAR PANIAMOGAN, BERNARDO PILAPIL,
RODOLFO POL, DEMOSTHENES REDOBLE, PACHECO ROMERO, DELLO SABANAL, SARAH SALINAS, RENATO
SOLATORIO, EDUARDO TABLANTE, EMMANUEL TAN, FELICISIMO TESALUNA, JOSE VERALLO, JR.,
MAGDALENO VERGARA, ESMERALDA ABARQUEZ, MAC ARTHUR DACUYCUY ACOMPANADA, TRINIDAD
ADLAWAN, FE ELIZORDO ALCANTARA, REOSEBELLA AMPER, ZENAIDA BACALSO, ELIZA BADANA, GEORGIA
BAS, ERLINDA BURIAS, ELDEFONSO BURIAS, CORAZON CASENAS, REGINO CASTANEDA, GEORGE CATADA,
CARMENCITA G. CHAVEZ, LORETIA CUNANAN, FLORES DELFIN, TERESITA ESPINO, ELVIE GALANZA,

AMADEA GALELA, TERESITA. JUNTILLA, LEONARDA KAPUNGAN, ADORACION LANAWAN, LINDA LAYAO,
GERARDO LAYSON, VIRGILIO LIBETARIO, RAYMOND PAUL LOGARTA, NORMA LUCERO, ANATOLIA MENDEZ,
ELIODORO MENDEZ, JUDALINE MONTE, ELMA OCAMPO, ESTEFA OLIVARES, GEORGE ORAIS, CRISPINA
PALANG, GRETA PEGARIDO, MELBA QUIACHON, REMEDIOS QUIROS, VIRGINIA RANCES, EDNA DELOS
REYES, VICENTE TAN, EMERGENCIA ROSELL, JULIETA TATING, MERCIA TECARRO, FELISA VERGARA,
WEMINA VILLACIN, MACRINA YBARSABAL, MILAGROS CATALAN, JULIETA AQUINDE, SONIA ARTIAGA, MA.
TERESITA OBANDO, ASUNCION ABAYAN, ESTHER CARREON, ECHEVARRE, BUENAFE SAMSON,
CONCEPCION GONZALES, VITALIANA VENERACION, LEONCIA ABELLAR, REYNITA
VILLACARLOS. respondents.
No. L-68345 December 18, 1987
DIVINE WORD COLLEGE OF LEGAZPI, petitioner,
vs.
The Honorable Deputy Minister of Labor and Employment, VICENTE LEOGARDO, JR., the HONORABLE
REGIONAL DIRECTOR (Regional Office No. 5) of the Ministry of Labor & Employment GERARDO S. CASTILLO,
CECILIA MANUEL and other alleged complainants, respondents.
Nos. L-69224-5 December 18, 1987
FAR EASTERN UNIVERSITY EMPLOYEES LABOR UNION, petitioner,
vs.
FAR EASTERN UNIVERSITY and the NATIONAL LABOR RELATIONS COMMISSION, respondents.
No. 70832 December 18, 1987
GREGORIO T. FABROS, ROGELIO B. DE GUZMAN, CRESENCIANO ESPINO, JOSE RAMOS SUNGA, BAYLON
BANEZ FERNANDO ELESTERIO, ISMAEL TABO, AMABLE TUIBEO CELSO TUBAY, RAFAEL HERNANDEZ,
GERONIMO JASARENO, MEL BALTAZAR, MA. LOURDES PASCUAL, T. DEL ROSARIO ACADEMY TEACHERS
and EMPLOYEES ASSOCIATION, DENNIS MONTE, BECKY TORRES, LOIDA VELASCO, ROMLY NERY, DAISY N.
AMPIG, PATRICIO DOLORES, ROGELIO RAMIREZ, and NILDA L. SEVILLA, petitioners,
vs.
The HON. JAIME C. LAYA, in his capacity as Minister of Education, Culture and Sports, respondents.
No. L-76524 December 18, 1987
JASMIN BISCOCHO, ROWENA MARIANO, AGNES GALLEGO, MA. ANA ORDENES, ISABEL DE LEON,
LUZVIMINDA FIDEL, MARIQUIT REYES, SOTERA ORTIZ, ANGELINA ROXAS, BITUIN DE PANO, ELIZABETH
ORDEN, APOLLO ORDEN, GUILLERMA CERCANO, IMELDA CARINGAL, EFREN BATIFORA, ROSIE VALDEZ,
DELIA QUILATEZ, FELIX RODRIGUEZ, OSCAR RODRIGUEZ, JOVITA CEREZO, JOSEFINA BONDOC, BELEN
POSADAS, DOLORES PALMA, ANTONINA CRUS, CONRADO BANAYAT, TERESITA LORBES, and CORAZON
MIRANDA, petitioners,
vs.
THE HONORABLE AUGUSTO SANCHEZ, in his capacity as Minister of Labor and Employment, ESPIRITU SANTO
PAROCHIAL SCHOOL AND ESPIRITU SANTO PAROCHIAL SCHOOL FACULTY ASSOCIATION, respondents.
No. 76596 December 18, 1987
RICARDO C. VALMONTE and CORAZON BADIOLA, petitioners,
vs.
THE HONORABLE AUGUSTO SANCHEZ, in his capacity as Minister of Labor and Employment, ESPIRITU SANTO
PAROCHIAL SCHOOL FACULTY ASSOCIATION, and ESPIRITU SANTO PAROCHIAL SCHOOL, respondents.

CORTES, J.:
Six cases involving various private schools, their teachers and non-teaching school personnel, and even parents with
children studying in said schools, as well as the then Minister of Labor and Employment, his Deputy, the National Labor
Relations Commission, and the then Minister of Education, Culture and Sports, have been consolidated in this single
Decision in order to dispose of uniformly the common legal issue raised therein, namely, the allocation of the incremental
proceeds of authorized tuition fee increases of private schools provided for in section 3 (a) of Presidential Decree No. 451,
and thereafter, under the Education Act of 1982 (Batas Pambansa Blg. 232).
Specifically, the common problem presented by these cases requires an interpretation of section 3(a) of Pres. Decree No.
451 which states:
SEC. 3. Limitations. The increase in tuition or other school fees or other charges as well as the new
fees or charges authorized under the next preceding section shall be subject to the following conditions;

(a) That no increase in tuition or other school fees or charges shall be approved unless sixty (60%)per
centum of the proceeds is allocated for increase in salaries or wages of the members of the faculty and all
other employees of the school concerned, and the balance for institutional development, student
assistance and extension services, and return to investments: Provided That in no case shall the return to
investments exceed twelve (12%) per centum of the incremental proceeds;
xxx xxx xxx
In addition, there is also a need for a pronouncement on the effect of the subsequent enactment of B.P. Blg. 232 which
provides for the allocation of tuition fee increases in section 42 thereof.
In a nutshell, the present controversy was precipitated by the claims of some school personnel for allowances and other
benefits and the refusal of the private schools concerned to pay said allowances and benefits on the ground that said
items should be deemed included in the salary increases they had paid out of the 60% portion of the proceeds from tuition
fee increases provided for in section 3 (a) of Pres. Decree No. 451. The interpretation and construction of laws being a
matter of judicial power and duty [Marbury v. Madison, 1 Cranch 137 (1803); Endencia v. David, 93 Phil. 696 (1953)], this
Court has been called upon to resolve the controversy.
In the process of reading and at times, having to decipher, the numerous pleadings filed in the six cases, the Court found
that the main issue has been approached by the parties from almost diametrical points, thereby bringing into focus three
sub-issues: first, whether or not allowances and other fringe benefits of faculty members and other school employees may
be charged against the 60% portion of the tuition fee increases provided for in section 3(a) of Pres. Dec. No. 451: second,
whether or not the same items may be charged against said portion under the provisions of B.P. Blg. 232: and, third,
whether or not schools and their employees may enter into a collective bargaining agreement allocating more than 60% of
said incremental proceeds for salary increases and other benefits of said employees. After these sub-issues have been
resolved, the Court will tackle the other incidents attending the individual cases, seriatim.
The factual antecedents that brought these cases before this Tribunal are as follows:
I.. FACTUAL BACKGROUND OF EACH CASE
A.
CEBU INSTITUTE OF TECHNOLOGY CASE
This case originated from a Complaint filed with the Regional Office No. VII of the Ministry of Labor on February 11, 1981
against petitioner Cebu Institute of Technology (CIT) by private respondents, Panfilo Canete, et al., teachers of CIT, for
non-payment of: a) cost of living allowances (COLA) under Pres. Dec. Nos. 525, 1123, 1614, 1678 and 1713, b) thirteenth
(13th) month pay differentials and c) service incentive leave. By virtue of an Order issued by the then Deputy Minister of
Labor Carmelo C. Noriel, a labor-management committee composed of one representative each from the Ministry of
Labor and Employment (MOLE), the Minister of Education, Culture and Sports (MECS), and two representatives each
from CIT and from the teachers was created. Said committee was to ascertain compliance with the legal requirements for
the payment of COLA, thirteenth (13th) month pay and service incentive leave [Rollo, p. 84].
The position taken by CIT during the conference held by the labor management committee was that it had paid the
allowances mandated by various decrees but the same had been integrated in the teacher's hourly rate. It alleged that the
payment of COLA by way of salary increases is in line with Pres. Dec. No. 451. It also claimed in its position paper that it
had paid thirteenth month pay to its employees and that it was exempt from the payment of service incentive leave to its
teachers who were employed on contract basis [Rollo, pp. 85-86].
After the report and recommendation of the committee, herein public respondent, then Minister of Labor and Employment
issued the assailed Order dated September 29, 1981 and held that the basic hourly rate designated in the Teachers'
Program is regarded as the basic hourly rate of teachers exclusive of the COLA, and that COLA should not be taken from
the 60% incremental proceeds of the approved increase in tuition fee. The dispositive portion of the Order reads:
PREMISES CONSIDERED, CIT is hereby ordered to pay its teaching staff the following:
1) COLA under P.D.'s 525 and 1123 from February 1978 up to 1981;
2) COLA under P.D.'s l6l4,1634,1678 and l7l3;and
3) Service incentive leave from l978 up to l981.
CIT is further directed to integrate into the basic salaries of its teachers and (sic) COLA under P.D.'s 525
and 1123 starting on January 1981, pursuant to P.D. 1751. For purposes of integration, the hourly rate
shown in its Teachers' Program for school year 198182 shall be considered as the basic hourly rate.
SO ORDERED.

Petitioner assails the aforesaid Order in this Special Civil Action of certiorari with Preliminary Injunction and/or Restraining
Order. The Court issued a Temporary Restraining Order on December 7, 1981 against the enforcement of the questioned
Order of the Minister of Labor and Employment.
B.
DIVINE WORD COLLEGE OF LEGAZPI CASE
Upon a complaint filed by ten faculty members for alleged non-compliance by herein petitioner Divine Word College of
Legazpi with, among others, Pres. Dec. No. 451, i.e., allowances were charged to the 60% incremental proceeds of tuition
fee increase, the Labor Regulation Section of Regional Office No. V (Legazpi City) of the Ministry of Labor and
Employment conducted an inspection of the employment records of said school. On the basis of the report on the special
inspection that the school did not comply with Pres. Dec. No. 451, herein respondent Regional Director issued an Order
dated May 30, 1983, requiring compliance by the Divine Word College. The latter filed a Memorandum of Appeal from
said Order which the Regional Director treated as a Motion for Reconsideration. Upon failure of the school to comply with
the aforesaid Order, another Order (August 2, 1983) was issued by herein respondent Regional Director requiring herein
petitioner to pay the faculty members- complainants (herein private respondents) the amounts indicated therein or the
total sum of Six Hundred Seventeen Thousand Nine Hundred Sixty Seven Pesos and Seventy Seven Centavos (P
617,967.77). Petitioner's Motion for Reconsideration of the Order was denied.
On appeal, the respondent Deputy Minister of Labor and Employment affirmed the Order of the Regional Director, viz:
xxx xxx xxx
Coming now to the substantial merit of the case, we share the view that the emergency allowances due
the complainants under the several presidential decrees (PD's 525, 1123, etc.) cannot be charged by the
respondent against the 60% of the incremental proceeds from increase in tuition fees authorized under
PD 451, not only because as per decision of the Supreme Court (UE vs. UE Faculty Association, et. al.,
G.R. No. 57387, September 30, 1982) said allowances whether mandated by law or secured by collective
bargaining should be taken only from the return to investment referred to in the decree if the school has
no other resources to grant the allowances but not from the 60% incremental proceeds, but also because
to hold otherwise would, to our mind, inevitably result in the loss of one benefit due the complainants-that
is the salary or wage increase granted them by PD 451.
In other words, we believe that by paying the complainants' allowances out of the 60% incremental
proceeds intended for their salary increase they are practically being deprived of one benefit-their share in
the 60% incremental proceeds in terms of salary or wage increase.
WHEREFORE, for the reasons abovestated, the Order appealed from is hereby AFFIRMED, and the
appeal DISMISSED, for lack of merit.
SO ORDERED.
(Annex "K " to Petition; Rollo, p. 108, 110).
This special civil action of certiorari and Prohibition with Preliminary Injunction questions the interpretation of, and
application by the respondent Deputy Minister, of the provisions of Pres. Dec. No. 45 1, as set forth in the assailed Order.
On March 25, 1985, after considering the allegations, issues and arguments adduced in the Petition as well as the
Comment thereon of the public respondent and dispensing with the private respondents' Comment, the Court resolved to
dismiss the Petition for lack of merit (Rollo, p. 198). On April 26, 1985, petitioner filed a Motion for Reconsideration with
Motion to Consider the Case En Banc. On June 26, 1985 the First Division of the Court referred the case to the Court En
Banc for consolidation with G.R. No. 70832, entitled "Gregorio T. Fabros, et al vs. Hon. Jaime C. Laya, etc. " since it
involves the same issue on the application of 60% incremental proceeds of authorized tuition fee increases [Rollo, p. 235].
The Court EN BANC resolved to accept the case. (Resolution of July 16, 1985). These cases were further consolidated
with other cases involving the same issues.
C.
FAR EASTERN UNIVERSITY CASE
On December 17, 1978, petitioner Union filed with the Ministry of Labor and Employment a complaint against respondent
University for non-payment of legal holiday pay and under-payment of the thirteenth (13th) month pay. On July 7, 1979,
while the case was pending, the Union President, in his personal capacity, filed another complaint for violation of Pres.
Dec. No. 451 against the same respondent.
The two cases were forthwith consolidated and jointly heard and tried. On March 10, 1980, Labor Arbiter Ruben A. Aquino
promulgated a decision the dispositive portion of which is quoted hereunder:
RESPONSIVE TO THE FOREGOING, respondent is hereby directed, within ten (10) days from receipt
hereof, to:

1. To (sic) pay the paid legal holidays that it withdrew since January 14, 1976 up to the present; and
2. Pay the 13th month pay differential of complainant's for the covered period December 16, 1975 to
December 17, 1978, date of filing of complaint for non-payment of legal holiday pay and under payment of
the 13th month pay, and thereafter. Barred forever are money claims beyond three (3) years from the
time the course (sic) of action occurred. Respondent's formula on transportation allowance which was
deducted from the 13th month pay is thus subject to this prescriptive period, for purposes of computation
of differentials for the 13th month pay.
The claim under PD 451 is hereby dismissed for lack of merit.
SO ORDERED.
(Annex " E " to Petition; Rollo, p. 55, 65-66).
Both parties appealed the decision of the Labor Arbiter. On September 18, 1984, the respondent Commission disposed of
the appeal in the following manner:
RESPONSIVE TO THE FOREGOING, the Decision of Labor Arbiter Ruben A. Aquino in the instant case
dated March 10, 1980 is hereby Modified in the sense that complainant's claims for legal holiday pay and
13th month pay are likewise dismissed for lack of merit and the dismissal of the claim under P.D. 451 is
hereby Affirmed en (sic) toto.
(Annex "A" to Petition: Rollo, p. 24, 35).
Petitioner's Motion for Reconsideration dated September 29, 1984 was denied for lack of merit on November 8, 1984.
Before this Court is the petition on certiorari filed by the Union assailing the abovementioned decision of the
Commissioner.
D.
FABROS CASE
This petition is in the nature of a class suit brought by petitioners in behalf of the faculty members and other employees of
more than 4000 private schools nationwide. Petitioners seek to enjoin the implementation of paragraphs 7 to 7.5 of MECS
Order No. 5, series of 1985 on the ground that the said order is null and void for being contrary to Pres. Dec. No. 451 and
the rulings of the Supreme Court in the cases of University of the East v. UE Faculty Association [G.R. No. L-57387,
September 20, 1982, 117 SCRA 5541, University of Pangasinan Faculty Union v. University of Pangasinan and
NLRC [G.R. No. 63122, February 20, 1984, 127 SCRA 691 ], St. Louis University Faculty Club v. NLRC and St. Louis
University [G.R. No. 65585, September 28, 1984, 132 SCRA 380].
On September 11, 1982, Batas Pambansa Blg. 232 (Education Act of 1982) was signed into law. On the matter of tuition
and other school fees of private schools, section 42 of said law provides as follows:
Sec. 42. Tuition and other School Fees. Each private School shall determine its rate of tuition and
other school fees or charges. The rates and charges adopted by schools pursuant to this provision shall
be collectible, and their application or use authorized subject to rules and regulations promulgated by the
Ministry of Education, Culture and Sports. (Emphasis supplied).
Invoking section 42 of B.P. Blg. 232, among others, as its legal basis, the then Minister of Education Jaime C. Laya
promulgated on April 1, 1985 the disputed MECS Order No. 25, s. 1985 entitled Rules and Regulations To Implement the
Provisions of B.P. Blg. 232. The Education Act of 1982, Relative to Student Fees for School Year 1985-1986. The
relevant portions of said Order are quoted hereunder:
7. Application or Use of Tuition and
Other School Fees or Charges.
7.1. The proceeds from tuition fees and other school charges as well as other income of each school shall
be treated as an institutional fund which shall be administered and managed for the support of school
purposes strictly: Provided, That for the purpose of generating additional financial resources or income for
the operational support and maintenance of each school two or more schools may pool their institutional
funds, in whole or in part, subject to the prior approval of their respective governing boards.
7.2. Tuition fees shag be used to cover the general expenses of operating the school in order to allow it to
meet the minimum standards required by the Ministry or any other higher standard, to which the school
aspires. They may be used to meet the costs of operation for maintaining or improving the quality of
instruction/training/research through improved facilities and through the payment of adequate and
competitive compensation for its faculty and support personnel, including compliance with mandated
increases in personnel compensation and/or allowance.

7.3. Tuition fees shag be used to cover minimum and necessary costs including the following: (a)
compensation of school personnel such as teaching or academic staff, school administrators, academic
non-teaching personnel, and non-academic personnel, (b) maintenance and operating expenses,
including power and utilities, rentals, depreciation, office supplies; and (c) interest expenses and
installment payments on school debts.
7.4. Not less than sixty (60) percent of the incremental tuition proceeds shall be used for salaries or
wages, allowances and fringe benefits of faculty and support staff, including cost of living allowance,
imputed costs of contributed services, thirteenth (13th) month pay, retirement fund contributions, social
security, medicare, unpaid school personnel claims and payments as may be prescribed by mandated
wage orders. collective bargaining agreements and voluntary employer practices, Provided That
increases in fees specifically authorized for the purposes listed in paragraph 4.3.3 hereof shall be used
entirely for those purposes. (Italics supplied).
7.5. Other student fees and charges as may be approved, including registration, library, laboratory,
athletic, application, testing fees and charges shall be used exclusively for the indicated purposes,
including (a) the acquisition and maintenance of equipment, furniture and fixtures, and buildings, (b) the
payment of debt amortization and interest charges on debt incurred for school laboratory, athletic, or other
purposes, and (c) personal services and maintenance and operating expenses incurred to operate the
facilities or services for which fees and charges are collected.
The Petition prayed for the issuance of a temporary restraining order which was granted by this Court after hearing. The
dispositive portion of the resolution dated May 28, 1985 reads as follows:
After due consideration of the allegations of the petition dated May 22, 1985 and the arguments of the
parties, the Court Resolved to ISSUE, effective immediately and continuing until further orders from this
Court, a TEMPORARY RESTRAINING ORDER enjoining the respondent from enforcing or implementing
paragraphs 7.4 to 7.5 of MECS Order No. 25, s. 1985, which provide for the use and application of sixty
per centum (60%) of the increases in tuition and other school fees or charges authorized by public
respondent for the school year 1985-1986 in a manner inconsistent with section 3(a), P.D. No. 451,
(which allocates such 60% of the increases exclusively "for increases in salaries or wages of the
members of the faculty and other employees of the school concerned.") and directing accordingly that
such 60% of the authorized increases shall be held in escrow by the respective colleges and universities,
i.e., shall be kept intact and not disbursed for any purpose pending the Court's resolution of the issue of
the validity of the aforementioned MECS Order in question.
(Rollo, p. 21).
In the same resolution, the Philippine Association of Colleges and Universities (PACU) was impleaded as respondent.
Subsequent to the issuance of this resolution, four (4) schools, represented in this petition, moved for the lifting of the
temporary restraining order as to them. In separate resolutions, this Court granted their prayers.
Ateneo de Manila University, De La Sale University (Taft Avenue) and De La Salle University-South, through their
respective counsels, manifested that for the school year 1985-1986, tuition fee increase was approved by the MECS and
that on the basis of Pres. Dec. No. 451, 60% of the tuition fee increases shall answer for salary increase. However, a
budgeted salary increase, exclusive of living allowances and other benefits, was approved for the same school year which
when computed amounts to more than the 60%.
This Court granted the motions in separate resolutions lifting the temporary restraining order with respect to these schools
in order that they may proceed with the implementation of the general salary increase for their employees.
In the case of St. Louis University, its Faculty Club, Administrative Personnel Association and the University itself joined in
a petition seeking for leave that 49% of the increase in tuition and other fees for school year 1985-1986 be released.
Petitioners manifested that the remaining balance shall continue to be held in escrow by the University.
In a resolution dated January 28, 1986, the Court resolved as follows:
Accordingly, the Temporary Restraining Order issued by this Court on May 28, 1985 is hereby ordered
LIFTED with respect to Saint Louis University of Baguio City in order that it may proceed immediately with
the implementation of salary increases for its employees.
D.
BISCOCHO CASE
The Espiritu Santo Parochial School and the Espiritu Santo Parochial School Faculty Association were parties to a labor
dispute which arose from a deadlock in collective bargaining. The parties entered into conciliation proceedings. The union
went on strike after efforts at the conciliation failed. Subsequently, a return to work agreement was forged between the
parties and both agreed to submit their labor dispute to the jurisdiction of the Minister of Labor.

In the exercise of his power to assume jurisdiction, the Ministry of Labor and Employment issued an Order dated April 14,
1986 which provides for the following:
IN CONSIDERATION OF ALL THE FOREGOING, the Ministry hereby declares the strike staged by the
Union to be legal and orders the following:
a) the School to submit the pertinent record of employment of Romualdo Noriego to the Research and
Information Division of the NLRC for computation of his underpayment of wages and for the parties to
abide by the said computation;
b) the School to submit all pertinent record of collections of tuition fee increases for school year (sic)
1982-1983, 1983-1984 and 1984-1985 to the Research and Information Division of the NLRC for proper
computation and for equal distribution of the amount to all employees and teachers during the
abovementioned school year (sic) as their salary adjustment under P.D. 461;
c) the parties to wait for the final resolution of the illegal dismissal (case) docketed as NLRC NCR Case
No. 5-1450-85 and to abide by the said resolution;
d) to furnish the MECS a copy of this order for them to issue the guidelines in the implementation of
PRODED Program;
e) the parties to execute a collective bargaining agreement with an economic package equivalent to 90%
of the proceeds from tuition fee increases for school year 1985-1986 and another 90% for school year
1986-1987 and 85% for school year 1987-1988. The amount aforementioned shall be divided equally to
all members of the bargaining unit as their respective salary adjustments. Such other benefits being
enjoyed by the members of the bargaining unit prior to the negotiation of the CBA shall remain the same
and shall not be reduced.
f) the School to deduct the amount equivalent to ten (10%) per cent of the backwages payable to all
members of the bargaining unit as negotiation fee and to deliver the same to the Union Treasurer for
proper disposition (Emphasis supplied).
SO ORDERED.
(Rollo, pp. 16-17)
Pursuant to the said order, private respondent Union agreed to incorporate in their proposed collective bargaining
agreement (CBA) with the School the following:
2) The Union and School Administration will incorporate the following in their CBA 1) The computation of the tuition fee increase shall be gross to gross from which the
corresponding percentage of 90% will be taken. The resulting amount will be divided
among 141.5 employees for 1985-86 and 132.5 employees for 1986-87.
1/2 of the resulting increase will be added to basic and divided by 13.3 to arrive at
monthly increase in basic. The other 1/2 will be divided by 12.3 to arrive at monthly
increase in living allowance.
xxx xxx xxx
4) xxx
Upon request/demand of the Union, School win deduct from backwages of managerial employees and
others outside the bargaining unit what Union win charge its own members in the form of attorney's fees,
special assessment and union dues/agency fee.
5) The signing of the CBA and payment of backwages and others shall be on November 26, 1986 at the
Espiritu Santo Parochial School Library.
(Rollo, pp. 3-4).
The herein petitioners, Jasmin Biscocho and 26 others, all employees and faculty members of the respondent School,
filed the present petition for prohibition to restrain the implementation of the April 14, 1986 Order of respondent Labor
Minister as well as the agreements arrived at pursuant thereto. They contend that said Order and agreements affect their
rights to the 60% incremental proceeds under Pres. Dec. No. 451 which provide for the exclusive application of the 60%
incremental proceeds to basic salary.
Acting on the petitioners' prayer, this Court immediately issued a temporary restraining order on November 25, 1986 ". . .
enjoining the respondents from enforcing, implementing and proceeding with the questioned order of April 14, 1986 and

collective bargaining agreement executed between respondents Union and the School Administration in pursuance
thereof." [Rollo, p. 20].
F.
VALMONTE CASE
This Petition was filed by parents with children studying at respondent school, Espiritu Santo Parochial School to nullify
the Order dated April 14, 1986 issued by public respondent, then Minister of Labor and Employment, specifically
paragraphs (e) and (f) thereof, quoted in the Biscocho case.
The award contained in the said Order is the result of the assumption of jurisdiction by the public respondent over a labor
dispute involving the private respondents school and faculty association. The latter had earlier filed a notice of strike
because of a bargaining deadlock on the demands of its members for additional economic benefits. After numerous
conciliation conferences held while the union was on strike, the parties voluntarily agreed that the public respondent shall
assume jurisdiction over all the disputes between them. As to the subject matter of the instant case, the public respondent
found that the latest proposals of the respondent school was to give 85% of the proceeds from tuition fee increases for the
school years to be divided among the teachers and employees as salary adjustments. What the respondent faculty
association offered to accept was a package of 95% for school year 1985-1986, 90% for school year 1986- 1987. The
respondent school offered to strike the middle of the two positions, hence the Order complained of by the petitioners [See
Annex "A", Petition; Rollo, pp. 9, 14-15; Comment of the Respondent Faculty Association: Rollo, p. 26].
II. RESOLUTION OF THE COMMON LEGAL ISSUE
This long-drawn controversy has sadly placed on the balance diverse interests, opposed yet intertwined, and all
deserving, and demanding, the protection of the State. On one arm of the balance hang the economic survival of private
schools and the private school system, undeniably performing a complementary role in the State's efforts to maintain an
adequate educational system in the country. Perched precariously on the other arm of the same balance is the muchneeded financial uplift of schoolteachers, extolled for all times as the molders of the minds of youth, hence of every
nation's future. Ranged with them with needs and claims as insistent are other school personnel. And then, anxiously
waiting at the sidelines, is the interest of the public at large, and of the State, in the continued availability to all who desire
it, high-standard education consistent with national goals, at a reasonable and affordable price.
Amidst these opposing forces the task at hand becomes saddled with the resultant implications that the interpretation of
the law would bear upon such varied interests. But this Court can not go beyond what the legislature has laid down. Its
duty is to say what the law is as enacted by the lawmaking body. That is not the same as saying what the law should be
or what is the correct rule in a given set of circumstances. It is not the province of the judiciary to look into the wisdom of
the law nor to question the policies adopted by the legislative branch. Nor is it the business of this Tribunal to remedy
every unjust situation that may arise from the application of a particular law. It is for the legislature to enact remedial
legislation if that be necessary in the premises. But as always, with apt judicial caution and cold neutrality, the Court must
carry out the delicate function of interpreting the law, guided by the Constitution and existing legislation and mindful of
settled jurisprudence. The Court's function is therefore limited, and accordingly, must confine itself to the judicial task of
saying what the law is, as enacted by the lawmaking body.
FIRST SUB-ISSUE
A. Whether or not allowances and other fringe benefits of employees may be charged against the 60%
portion of the incremental proceeds provided for in sec. 3(a) of Pres. Dec. No. 451.
1. Arguments raised in the Cebu Institute of Technology case
In maintaining its position that the salary increases it had paid to its employees should be considered to have included the
COLA, Cebu Institute of Technology (CIT) makes reference to Pres. Dec. No. 451 and its Implementing Rules. The line of
reasoning of the petitioner appears to be based on the major premise that under said decree and rules, 60% of the
incremental proceeds from tuition fee increases may be applied to salaries, allowances and other benefits of teachers and
other school personnel. In support of this major premise, petitioner cites various implementing rules and regulations of the
then Minister of Education, Culture and Sports, to the effect that 60% of the incremental proceeds may be applied to
salaries, allowances and other benefits for members of the faculty and other school personnel [Petition citing
Implementing Rules and Regulations of Pres. Dec. No. 451 of various dates; Rollo, pp. 318-320]. Petitioner concludes
that the salary increases it had granted the CIT teachers out of the 60% portion of the incremental proceeds of its tuition
fee increases from 1974-1980 pursuant to Pres. Dec. No. 451 and the MECS implementing rules and regulations must be
deemed to have included the COLA payable to said employees for those years [Rollo, pp. 911].
With leave of Court, the Philippine Association of Colleges and Universities, filed its Memorandum as Intervenor in
support of the proposition that schools may pay the COLA to faculty members and other employees out of the 60% of the
increase in tuition fees. In addition to the arguments already set forth in the memorandum of the petitioner CIT, intervenor
PACU attacks the Decision of this Court in University of the East v. University of the East Faculty Association et. all G.R.
No. 57387 as "not doctrinal" and inapplicable to the CIT case. The Court held in the UE case, which was promulgated on
September 30, 1982, during the pendency of these cases, that:

... allowances and benefits should be chargeable to the return to investment referred to in Sec. 3(a), if the
schools should happen to have no other resources than incremental proceeds of authorized tuition fee
increases ... (See Dispositive Portion of the Decision)
Intervenor PACU alleges that the aforecited U.E. decision does not categorically rule that COLA and other fringe benefits
should not be charged against the 60% incremental proceeds of the authorized tuition fee increase.
The Solicitor General, on the other hand, argues in support of the Order of the public respondent that Pres. Dec. No. 451
allocates the 60% proceeds of tuition fee increases exclusively for salary increases of teachers and non- teaching
supportive personnel of the school concerned, and that the Decree does not provide that said salary increases would take
the place of the COLA [Rollo, p. 244-245]. He cites as authority for this stance, two (2) memoranda of the then President
dated June 6, 1978 and March 30, 1979 both of which provide that the 60% incremental proceeds of tuition fee increases
"shall be allocated for the increase in the salaries of teachers and supportive personnel. " Anent the U.E. case, the
Solicitor General states that the Supreme Court in deciding said case took note of the stand of the Office of the President
that the 60% incremental proceeds shall be solely applied to salaries of faculty members and employees.
On August 7, 1986, considering the supervening events, including the change of administration, that have transpired
during the pendency of these cases, the Court required the Solicitor General to state whether or not he maintains the
action and position taken by his predecessor-in-office. In his Compliance with said Resolution, the Solicitor General
Manifested the position that:
a. If the tuition fee increase was collected during the effectivity oil Presidential Decree No. 451, 60%
thereof shall answer exclusively for salary increase of school personnel. Other employment benefits shall
be covered by the 12% allocated for return of investment, this is in accordance with the ruling of this
Honorable Court in University of the East vs. U.E. Faculty Association, et. al (117 SCRA 554), ... and
reiterated in University of Pangasinan Faculty Union v. University of Pangasinan, et. al. (127 SCRA 691)
and St. Louis Faculty Club u. NLRC (132 SCRA 380).
b. If the salary increase was collected during the effectivity of Batas Pambansa Blg. (sic) 232, 60%
thereof shall answer not only for salary increase of school personnel but also for other employment
benefits.
(Rollo, at pp. 513-514)
2. Arguments raised in the Divine Word College Case
Petitioner Divine Word College of Legazpi (DWC) advances the theory that the COLA, 13th month pay and other
personnel benefits decreed by law, must be deemed chargeable against the 60% portion allocated for increase of salaries
or wages of faculty and all other school employees. In support of this stance, petitioner points out that said personnel
benefits are not included in the enumeration of the items for which the balance (less 60%) or 40% portion of the
incremental proceeds may be alloted under section 3(a) of Pres. Dec. No. 451 [Rollo, pp. 29-30. Petitioner likewise cites
the interpretation of the respondent Minister of Education, Culture and Sports embodied in the Implementing Rules and
Regulations of P.D. 451, DEC Issuance, May 13, 1987; Rollo, p. 30], that the 60% incremental proceeds of authorized
tuition fee increases may be applied to increases in emoluments and/or benefits for members of faculty, including staff
and administrative employees of the school as the valid interpretation of the law, as against that made by the respondent
Deputy Minister of Labor in the assailed Order. If the latter interpretation is upheld, petitioner would go as far as
questioning the constitutionality of Pres. Dec. No. 451 upon the ground that the same discriminates against the petitioner
and other private schools as a class of employers. According to the petitioner, the discrimination takes the form of
requiring said class of employers to give 60% of their profits to their employees in addition to the COLA mandated by law,
while other employers have to contend only with salary increases and COLA [Petition; Rollo, p. 46].
With regard to the Decision of this Court in the U.E. case, petitioner claims exemption therefrom upon the ground that the
Court's interpretation of a law cannot be applied retroactively to parties who have relied upon the previous administrative
interpretation which has not been declared invalid or unconstitutional [Petition; Rollo, pp. 50-51 1. Petitioner further argues
on this point that if the court had intended to invalidate the MECS interpretation of the Decree, it should have positively
stated so in the Decision [Petition; Rollo, p. 50].
The Comment of the public respondents cite as settled jurisprudence applicable to the case at bar, the ruling of this Court
in the U.E. case, supra, which was reiterated in the subsequent cases of University of Pangasinan Faculty Union v.
University of Pangasinan et all and St. Louis Faculty Club v. NLRC, et al.
Public respondents Deputy Minister of Labor and Employment and Regional Director of the MOLE (Region V) likewise
attack the validity of the Revised Implementing Rules and Regulations of Pres. Dec. No. 451 cited by the petitioner insofar
as said rules direct the allotment of the 60% of incremental proceeds from tuition fee hikes for retirement plan, faculty
development and allowances. They argue that said rules and regulations were invalid for having been promulgated in
excess of the rule-making authority of the then Minister of Education under Pres. Dec. No. 451 which mandates that the
60% of incremental proceeds from tuition fee hikes should be allotted solely for salary increases [Comment; Rollo, pp.
184-185]. Finally, with respect to the issue on the allege unconstitutionality of Pres. Dec. No. 451, the public respondents
posit that a legislation (such as Pres. Dec. No. 451) which affects a particular class does not infringe the constitutional
guarantee of equal protection of the law as long as it applies uniformly and without discrimination to everyone of that class
[Comment; Rollo, p. 14].

3. Arguments raised in the Far Eastern University case


It is the petitioner's contention that in respect of Pres. Dec. No. 451, the decision of the NLRC is a defiance of the rulings
of this Court in the cases of University of the East v. U.E. Faculty, Association et al. and of University of Pangasinan
Faculty Union v. University of Pangasinan and NLRC (supra). The Union submits that monetary benefits, other than
increases in basic salary, are not chargeable to the 60% incremental proceeds.
The respondent University in its Comment dated June 13, 1982 refers to Article 97(f) of the Labor Code which provides a
definition of the term "wages" to support its position that "salaries or wages" as used in Pres. Dec. No. 451 should be
interpreted to include other benefits in terms of money.
As mentioned in the Cebu Institute of Technology case, the Solicitor General filed its Compliance with this Court's
resolution dated August 7, 1986 requiring him to manifest whether public respondents maintain the position they have
taken in these consolidated cases. The resolution of September 25, 1986 required petitioners to Comment on said
Compliance.
The Comment dated December 6, 1986 was received by this Court after petitioner Union was required to show cause why
no disciplinary action should be taken against them for failure to comply earlier. The Union agreed with the position taken
by the Solicitor General that under Pres. Dec. No. 451, 60% of the tuition fee increases, shall answer exclusively for
salary increase. However, it expressed disagreement with the opinion that during the effectivity of B.P. Blg. 232, the 60%
ncremental proceeds shall answer not only for salary increases but also for other employment benefits. The Union argues
that whereas "Pres. Dec. No. 451 is a law on a particular subject, viz., increase of tuition fee by educational institutions
and how such increase shall be allocated B.P. Blg. 232 is not a law on a particular subject of increase of tuition fee . . . ; at
most it is a general legislation on tuition fee as it touches on such subject in general, " [Comment on Compliance; Rollo, p.
376], Suppletory to its argument that B.P. Blg. 232 did not impliedly repeal Pres. Dec. No. 451, the Union also invokes the
principle that a special or particular law cannot be repealed by a general law.
RESOLUTION OF THE FIRST SUB-ISSUE
This Court has consistently held, beginning with the University of the East case, that if the schools have no resources
other than those derived from tuition fee increases, allowances and benefits should be charged against the proceeds of
tuition fee increases which the law allows for return on investments under section 3(a) of Pres. Dec. No. 451, therefore,
not against the 60% portion allocated for increases in salaries and wages (See 117 SCRA at 571). This ruling was
reiterated in the University of Pangasinan case and in the Saint Louis University case.
There is no cogent reason to reverse the Court's ruling in the aforecited cases. Section 3(a) of Pres. Dec. No. 451
imposes among the conditions for the approval of tuition fee increases, the allocation of 60% per cent of the incremental
proceeds thereof for increases in salaries or wages of school personnel and not for any other item such as allowances or
other fringe benefits. As aptly put by the Court in University of Pangasinan Faculty Union v. University of Pangasinan,
supra:
... The sixty (60%) percent incremental proceeds from the tuition increase are to be devoted entirely to
wage or salary increases which means increases in basic salary. The law cannot be construed to include
allowances which are benefits over and above the basic salaries of the employees. To charge such
benefits to the 60% incremental proceeds would be to reduce the increase in basic salary provided by
law, an increase intended also to help the teachers and other workers tide themselves and their families
over these difficult economic times. [Italics supplied] (127 SCRA 691, 702).
This interpretation of the law is consistent with the legislative intent expressed in the Decree itself, i.e., to alleviate the sad
plight of private schools and that of their personnel wrought by slump in enrollment and increasing operational costs on
the part of the schools, and the increasing costs of living on the part of the personnel (Preamble, Pres. Dec. No. 451).
While coming to the aid of the private school system by simplifying the procedure for increasing tuition fees, the Decree
imposes as a condition for the approval of any such increase in fees, the allocation of 60% of the incremental proceeds
thereof, to increases in salaries or wages of school personnel. This condition makes for a quid pro quo of the approval of
any tuition fee hike by a school, thereby assuring the school personnel concerned, of a share in its proceeds. The
condition having been imposed to attain one of the main objectives of the Decree, which is to help the school personnel
cope with the increasing costs of living, the same cannot be interpreted in a sense that would diminish the benefit granted
said personnel.
In the light of existing laws which exclude allowances from the basic salary or wage in the computation of the amount of
retirement and other benefits payable to an employee, this Court will not adopt a different meaning of the terms "salaries
or wages" to mean the opposite, i.e. to include allowances in the concept of salaries or wages.
As to the alleged implementing rules and regulations promulgated by the then MECS to the effect that allowances and
other benefits may be charged against the 60% portion of the proceeds of tuition fee increases provided for in Section
3(a) of Pres. Dec. No. 45 1, suffice it to say that these were issued ultra vires, and therefore not binding upon this Court.
The rule-making authority granted by Pres. Dec. No. 451 is confined to the implementation of the Decree and to the
imposition of limitations upon the approval of tuition fee increases, to wit:
SEC. 4. Rules and Regulations. The Secretary of Education and Culture is hereby authorized,
empowered and directed to issue the requisite rules and regulations for the effective implementation of

this Decree. He may, in addition to the requirements and limitations provided for under Sections 2 and 3
hereof, impose other requirements and limitations as he may deem proper and reasonable.
The power does not allow the inclusion of other items in addition to those for which 60% of the proceeds of tuition fee
increases are allocated under Section 3(a) of the Decree.
Rules and regulations promulgated in accordance with the power conferred by law would have the force and effect of law
[Victorias Milling Company, Inc. v. Social Security Commission, 114 Phil. 555 (1962)] if the same are germane to the
subjects of the legislation and if they conform with the standards prescribed by the same law [People v. Maceren, G.R.
No. L-32166, October 18, 1977, 79 SCRA 450]. Since the implementing rules and regulations cited by the private
schools adds allowances and other benefits to the items included in the allocation of 60% of the proceeds of tuition fee
increases expressly provided for by law, the same were issued in excess of the rule-making authority of said agency, and
therefore without binding effect upon the courts. At best the same may be treated as administrative interpretations of the
law and as such, they may be set aside by this Court in the final determination of what the law means.
SECOND SUB-ISSUE
B. Whether or not allowances and other fringe benefits may be charged against the 60% portion of the incremental
proceeds of tuition fee increases upon the effectivity of the Education Act of 1982 (B.P. Blg. 232).
1. Arguments raised in the Fabros case
In assailing MECS Order No. 25, s. 1985, petitioners argue that the matter of allocating the proceeds from tuition fee
increases is still governed by Pres. Dec. No. 451. It is their opinion that section 42 of B.P. Blg. 232 did not repeal Pres.
Dec. No. 451 for the following reasons: first, there is no conflict between section 42 of B.P. Blg. 232 and section 3(a) of
Pres. Dec. No. 451 or any semblance of inconsistency to deduce a case of a repeal by implication: second, Pres. Dec.
No. 451 is a specific law upon a particular subject-the purposes and distribution of the incremental proceeds of tuition fee
increases, while B.P. Blg. 232 is a general law on the educational system; as such, a specific law is not repealed by a
subsequent general law in the absence of a clear intention; and third, Pres. Dec. No. 451 is still the only law on the
subject of tuition fee increases there being no prescription or provision in section 42 of B.P. Blg. 232 or elsewhere in the
law. They furthermore aver that the disputed MECS Order which imposed additional burdens against the 60% incremental
proceeds of tuition fee increases are not provided in either Pres. Dec. No. 451 or B.P. Blg. 232. The logical result as
intimated by petitioners is that the inclusion of paragraph 7.4 and related paragraphs 7 to 7.3 and 7.5 in the questioned
MECS order contravenes the statutory authority granted to the public respondent, and the same are therefore, void.
Respondent PACU takes the contrary view contending that MECS Order No. 25, s. 1985, complies with the mandate of
section 42 of B.P. Blg. 232 which law had already repealed Pres. Dec. No. 451. PACU notes that theUniversity of the
East case invoked by petitioners is not applicable because the issue in that case does not involve the effect of B.P. Blg.
232 on Pres. Dec. No. 451.
The Solicitor General, representing the public respondent, after giving a summary of the matters raised by petitioner and
respondent PACU, points out that the decisive issue in this case is whether B.P. Big. 232 has repealed Pres. Dec. No.
451 because on the answer to this question depends the validity of MECS Order No. 25, s. 1985. Public respondent holds
the view consistent with that of PACU on the matter of B.P. Blg. 232 having repealed Pres. Dec. No. 451. To support this
contention, the Solicitor General compared the respective provisions of the two laws to show the inconsistency and
incompatibility which would result in a repeal by implication.
RESOLUTION OF THE SECOND SUB-ISSUE
On the matter of tuition fee increases section 42 of B.P. Blg. 232 provides:
SEC. 42. Tuition and Other School Fees. Each private school shall determine its rate of tuition and
other school fees or charges. The rates and charges adopted by schools pursuant to this provision shall
be collectible and their application or use authorized, subject to rules and regulations promulgated by the
Ministry of Education, Culture and Sports. (Emphasis supplied).
The enactment of B.P. Blg. 232 and the subsequent issuance of MECS Order No. 25, s. 1985 revived the old controversy
on the application and use of the incremental proceeds from tuition fee increases. As can be gleaned from the pleadings
and arguments of the parties in these cases, one side, composed of the teachers and other employees of the private
schools, insist on the applicability of section 3(a) of Pres. Dec. No. 451 as interpreted arid applied in the University of the
East, University of Pangasinan and St Louis University cases, while the private schools uphold the view that the matter of
allocating the incremental proceeds from tuition fee increases is governed by section 42 of B.P. Blg. 232 as implemented
by the MECS Rules and Regulations. As stated, the latter's argument is premised on the allegation that B.P. Blg. 232
impliedly repealed Pres. Dec. No. 451.
On the second sub-issue, therefore, this Court upholds the view taken by the Solicitor General in the Fabroscase, that the
decisive issue is whether B.P. Blg. 232 has repealed Pres. Dec. No. 451.
In recognition of the vital role of private schools in the country's educational system, the government has provided
measures to regulate their activities. As early as March 10, 1917, the power to inspect private schools, to regulate their
activities, to give them official permits to operate under certain conditions and to revoke such permits for cause was
granted to the then Secretary of Public Instruction by Act No. 2706 as amended by Act No. 3075 and Commonwealth Act

No. 180. Republic Act No. 6139, enacted on August 31, 1970, provided for the regulation of tuition and other fees charged
by private schools in order to discourage the collection of exorbitant and unreasonable fees. In an effort to simplify the
"cumbersome and time consuming" procedure prescribed under Rep. Act No. 6139 and "to alleviate the sad plight of
private schools," Pres. Dec. No. 451 was enacted on May 11, 1974. While this later statute was being implemented, the
legislative body envisioned a comprehensive legislation which would introduce changes and chart directions in the
educational system, hence, the enactment of B.P. Blg. 232. What then was the effect of B.P. Blg. 232 on Pres. Dec. No.
451?
The Court after comparing section 42 of B.P. Blg. 232 and Pres. Dec. No. 451, particularly section 3(a) thereof, finds
evident irreconcilable differences.
Under Pres. Dec. No. 451, the authority to regulate the imposition of tuition and other school fees or charges by private
schools is lodged with the Secretary of Education and Culture (Sec. 1), where section 42 of B.P. Blg. 232 liberalized the
procedure by empowering each private school to determine its rate of tuition and other school fees or charges.
Pres. Dec. No. 451 provides that 60% of the incremental proceeds of tuition fee increases shall be applied or used to
augment the salaries and wages of members of the faculty and other employees of the school, while B.P. Blg. 232
provides that the increment shall be applied or used in accordance with the regulations promulgated by the MECS.
A closer look at these differences leads the Court to resolve the question in favor of repeal. As pointed out by the Solicitor
General, three aspects of the disputed provisions of law support the above conclusion. First, the legislative authority under
Pres. Dec. No. 451 retained the power to apportion the incremental proceeds of the tuition fee increases; such power is
delegated to the Ministry of Education and Culture under B.P. Blg. 232.Second, Pres. Dec. No. 451 limits the application
or use of the increment to salary or wage increase, institutional development, student assistance and extension services
and return on investment, whereas B.P. Blg. 232 gives the MECS discretion to determine the application or use of the
increments. Third, the extent of the application or use of the increment under Pres. Dec. No. 451 is fixed at the predetermined percentage allocations; 60% for wage and salary increases, 12% for return in investment and the balance of
28% to institutional development, student assistance and extension services, while under B.P. Blg. 232, the extent of the
allocation or use of the increment is likewise left to the discretion of the MECS.
The legislative intent to depart from the statutory limitations under Pres. Dec. No. 451 is apparent in the second sentence
of section 42 of B.P. Blg. 232. Pres. Dec. No. 451 and section 42 of B.P. Blg. 232 which cover the same subject matter,
are so clearly inconsistent and incompatible with each other that there is no other conclusion but that the latter repeals the
former in accordance with section 72 of B.P. Blg. 232 to wit:
Sec. 72. Repealing clause. All laws or parts thereof inconsistent with any provision of this Act shall be
deemed repealed or modified, as the case may be.
Opinion No. 16 of the Ministry of Justice dated January 29, 1985, quoted below, supports the above conclusion:
Both P.D. No. 451 and B.P. Blg. 232 deal with the imposition of tuition and other school fees or charges
and their use and application, although the latter is broader in scope as it covers other aspects of the
education system. We note substantial differences or inconsistencies between the provisions of the two
laws. P.D. No. 451 prescribes certain limitations in the increase of tuition and other school fees and their
application, whereas the latter law, B.P. Blg. 232 s silent on the matter. Under P.D. 451, rates of
tuition/school fees need prior approval of the Secretary of Education, Culture (now Minister of Education,
Culture and Sports), who also determines the reasonable rates for new school fees, whereas under B.P.
Blg. 232, each private school determines its rate of tuition and other school fees or charges. P.D. No. 451
authorizes the Secretary of Education and Culture to issue requisite rules and regulations to implement
the said Decree and for that purpose, he is empowered to impose other requirements and limitations as
he may deem proper and reasonable in addition to the limitations prescribed by the Decree for increases
in tuition fees and school charges, particularly, the limitations imposed in the allocation of increases in
fees and charges, whereas under B.P. Blg. 232, the collection and application or use of rates and charges
adopted by the school are subject to rules and regulations promulgated by the Ministry of Education,
Culture and Sports without any mention of the statutory limitations on the application or use of the fees or
charges. The authority granted to private schools to determine its rates of tuition and unconditional
authority vested in the Ministry of Education, Culture and Sports to determine by rules and regulations the
collection and application or use of tuition or fees rates and charges under B.P. Big. 232 constitute
substantial and irreconcilable incompatibility with the provisions of P.D. No. 451, which should be for that
reason deemed to have been abrogated by the subsequent legislation.
Moreover, B.P. Blg. 232 is a comprehensive legislation dealing with the establishment and maintenance
of an integrated system of education and as such, covers the entire subject matter of the earlier law, P.D.
No. 451. The omission of the limitations or conditions imposed in P.D. No. 451 for increases in tuition fees
and school charges is an indication of a legislative intent to do away with the said limitations or conditions.
(Crawford, supra, p. 674). It has also been said that
an act which purports to set out in full all that it intends to contain, operates as a repeal of
anything omitted which was contained in the old act and not included in the amendatory
act." (People vs. Almuete 69 SCRA 410; People vs. Adillo 68 SCRA 90) (Ministry of
Justice, Op. No. 16, s. 1985).

Having concluded that under B.P. Big. 232 the collection and application or use of tuition and other school fees are
subject only to the limitations under the rules and regulations issued by the Ministry, the crucial point now shifts to the said
implementing rules.
The guidelines and regulations on tuition and other school fees issued after the enactment of B.P. Blg. 232 consistently
permit the charging of allowances and other benefits against the 60% incremental proceeds. Such was the tenor in the
MECS Order No. 23, s. 1983; MECS Order No. 15, s. 1984; MECS Order No. 25, s. 1985; MECS Order No. 22, s. 1986;
and DECS Order No. 37, s. 1987. The pertinent portion of the latest order reads thus:
In any case of increase at least sixty percent (60%) of the incremental proceeds should be allocated for
increases in or provisions for salaries or wages, allowances and fringe benefits of faculty and other staff,
including accruals to cost of living allowance, 13th month pay, social security, medicare and retirement
contribution and increases as may be provided in mandated wage orders, collective bargaining
agreements or voluntary employer practices.
The validity of these orders, particularly MECS Order No. 25, s. 1985, is attacked on the ground that the additional
burdens charged against ". . . the 60% of the proceeds of the increases in tuition fees constitute both as [sic] an excess of
statutory authority and as (sic) a substantial impairment of the accrued, existing and protected rights and benefits of the
members of faculty and non-academic personnel of private schools." Memorandum for Petitioners, Rollo, p. 1911.
Petitioners alleged that these additional burdens under the MECS Order are not provided in the law itself, either in section
42 of B.P. Blg. 232 or section 3(a) of Pres. Dec. No. 451, except increases in salaries in the latter provision.
Section 42 of B.P. Blg. 232 grants to the Minister of Education (now Secretary of Education) rule-making authority to fill in
the details on the application or use of tuition fees and other school charges. In the same vein is section 70 of the same
law which states:
SEC. 70. Rule-making Authority. The Minister of Education, Culture and Sports charged with the
administration and enforcement of this Act, shall promulgate the necessary implementing rules and
regulations.
Contrary to the petitioners' insistence that the questioned rules and regulations contravene the statutory authority granted
to the Minister of Education, this Court finds that there was a valid exercise of rule-making authority.
The statutory grant of rule-making power to administrative agencies like the Secretary of Education is a valid exception to
the rule on non-delegation of legislative power provided two conditions concur, namely: 1) the statute is complete in itself,
setting forth the policy to be executed by the agency, and 2) said statute fixes a standard to which the latter must conform
[Vigan Electric Light Co., Inc. v. Public Service Commission, G.R. No. L-19850, January 30, 1964, and Pelaez v. Auditor
General, G. R. No. L-23825, December 24, 1965].
The Education Act of 1982 is "an act providing for the establishment and maintenance of an integrated system for
education " with the following basic policy:
It is the policy of the State to establish and maintain a complete, adequate and integrated system of
education relevant to the goals of national development. Toward this end, the government shall ensure,
within the context of a free and democratic system, maximum contribution of the educational system to
the attainment of the following national development goals:
1. To achieve and maintain an accelerating rate of economic development and social progress;
2. To assure the maximum participation of all the people in the attainment and enjoyment of the benefits
of such growth; and
3. To achieve and strengthen national unity and consciousness and preserve, develop and promote
desirable cultural, moral and spiritual values in a changing world.
The State shall promote the right of every individual to relevant quality education, regardless of sex, age,
creed, socioeconomic status, physical and mental conditions, racial or ethnic origin, political or other
affiliation. The State shall therefore promote and maintain equality of access to education as well as the
enjoyment of the benefits of education by all its citizens.
The State shall promote the right of the nation's cultural communities in the exercise of their right to
develop themselves within the context of their cultures, customs, traditions, interests and belief, and
recognizes education as an instrument for their maximum participation in national development and in
ensuring their involvement in achieving national unity. (Section 3, Declaration of Basic Policy).
With the foregoing basic policy as well as, specific policies clearly set forth in its various provisions, the Act is complete in
itself and does not leave any part of the policy-making, a strictly legislative function, to any administrative agency.
Coming now to the presence or absence of standards to guide the Minister of Education in the exercise of rule-making
power, the pronouncement in Edu v. Ericta [G.R. No. L-32096, October 24, 1970, 35 SCRA 481, 497] is relevant:

The standard may be either expressed or implied. If the former, the non-delegation objection is easily
met. The standard though does not have to be spelled out specifically. It could be implied from the policy
and purpose of the act considered as a whole. In the Reflector Law, clearly the legislative objective is
public safety. What is sought to be attained as in Calalang v. Williams is "safe transit upon the roads."
(Italics supplied).
Thus, in the recent case of Tablarin et al. v. Hon. Gutierrez, et al. (G.R. No. 78164, July 31, 1987], the Court held that the
necessary standards are set forth in Section 1 of the 1959 Medical Act, i.e., "the standardization and regulation of medical
education" as well as in other provisions of the Act. Similarly, the standards to be complied with by Minister of Education
in this case may be found in the various policies set forth in the Education Act of 1982.
MECS Order No. 25, s. 1985 touches upon the economic relationship between some members and elements of the
educational community, i.e., the private schools and their faculty and support staff. In prescribing the minimum percentage
of tuition fee increments to be applied to the salaries, allowances and fringe benefits of the faculty and support staff, the
Act affects the economic status and the living and working conditions of school personnel, as well as the funding of the
private schools.
The policies and objectives on the welfare and interests of the various members of the educational community are found
in section 5 of B.P. Blg. 232. which states:
SEC. 5. Declaration of Policy and Objectives. It is likewise declared government policy to foster, at all
times, a spirit of shared purposes and cooperation among the members and elements of the educational
community, and between the community and other sectors of society, in the realization that only in such
an atmosphere can the true goals and objectives of education be fulfilled.
Moreover, the State shall:
1. Aid and support the natural right and duty of parents in the rearing of the youth through the educational
system.
2. Promote and safeguard the welfare and interests of the students by defining their rights and
obligations, according them privileges, and encouraging the establishment of sound relationships
between them and the other members of the school community.
3. Promote the social and economic status of an school personnel, uphold their rights, define their
obligations, and improve their living and working conditions and career prospects.
4. Extend support to promote the viability of those institutions through which parents, students and school
personnel seek to attain their educational goals.
On the other hand, the policy on the funding of schools in general, are laid down in section 33:
SEC. 33. Declaration of Policy. It is hereby declared to be a policy of the State that the national
government shall contribute to the financial support of educational programs pursuant to the goals of
education as declared in the Constitution. Towards this end, the government shall:
1. Adopt measures to broaden access to education through financial assistance and other forms of
incentives to schools, teachers, pupils and students; and
2. Encourage and stimulate private support to education through, inter alia, fiscal and other assistance
measures.
Given the abovementioned policies and objectives, there are sufficient standards to guide the Minister of Education in
promulgating rules and regulations to implement the provisions of the Education Act of 1982, As in
the Ericta and Tablarin cases, there is sufficient compliance with the requirements of the non-delegation principle.
THIRD SUB-ISSUE
C. Whether or not schools and their employees may enter into a collective bargaining agreement
allocating more than 60% of said incremental proceeds for salary increases and other benefits of said
employees.
1. Arguments raised in the Biscocho and Valmonte cases
Assailed by the petitioners in the Biscocho and the Valmonte cases is the Order of the respondent Minister of Labor
directing the execution of a CBA between the school and the respondent Espiritu Santo Parochial School Faculty
Association which provides for an economic package equivalent to 90% of the proceeds of tuition fee increases for school
year 1985-1986, another 90% for school year 1986-1987 and 85% for school year 1987-1988. Pursuant to said Order,
petitioners in the Biscocho case alleged that the parties had agreed to incorporate in their CBA a provision which allocates
one-half (1/2) of the 90% portion of the proceeds or 45% to increases in the monthly basic salaries and the other one-half
(1/2) or 45% to increases in monthly living allowance.

The petitioners in the two cases seek the nullification of the MOLE Order for exactly opposite reasons. In
theBiscocho case, the controversy springs from what petitioners perceive to be a diminution of the benefits to be received
by the school employees insofar as the CBA allocates only 45% for salary increases instead of 60%, which petitioners
claim to be the portion set aside by Pres. Dec. No. 451 for that purpose. Parenthetically, the case questions the allocation
of the remaining 45% of the 90% economic package under the CBA, to allowances. Stripped down to its essentials, the
question is whether or not the 90% portion of the proceeds of tuition fee increases alloted for the economic package may
be allocated for both salary increases and allowances.
On the other hand, petitioners in the Valmonte case believe that the MOLE cannot order the execution of a CBA which
would allocate more than 60% of the proceeds of tuition fee increases for salary increases of school employees.
Furthermore, petitioners question the authority of the then Minister of Labor and Employment to issue the aforequoted
Order insofar as this allocates the tuition fee increases of the respondent private school. According to them, only the
Minister of Education, Culture and Sports has the authority to promulgate rules and regulations on the use of tuition fees
and increases thereto, pursuant to the provisions of B.P. Blg. 232. They further argue that the assailed Order collides with
the provisions of Pres. Dec. No. 451 insofar as it allocates 90% of the tuition fee increases for salary adjustments of the
members of the bargaining unit which exceeds the 60% of the said increases allocated by the Decree for the same
purpose.
Before delving further into the questions raised, this Court notes that in the Valmonte case, respondent Minister and
respondent Faculty Association raise a procedural objection to the filing of the Petition: the standing of the petitioners to
bring this suit. Both respondents decry the petitioners' lack of the interest required in Rule 65 of the Rules of Court for the
filing of the Petition for certiorari and Prohibition, since the latter do not appear to be in any way aggrieved by the
enforcement of the Order. Petitioners-parents did not even participate in the proceedings below which led to the issuance
of the assailed Order.
This Court finds merit in the respondents' objection. Under Rule 65 of the Rules of Court (Secs. 1 and 2), only a person
aggrieved by the act or proceeding in question may file a petition for certiorari and/or prohibition. TheValmonte petition
fails to indicate how the petitioners would be aggrieved by the assailed Order. It appears that the petitioners are not
parties and never at any time intervened in the conciliation conferences and arbitration proceedings before the respondent
Minister. The parties therein, who stand to be directly affected by the Order of the respondent Minister, do not contest the
validity of said Order. The petition does not even state that petitioners act as representative of the parents' association in
the School or in behalf of other parents similarly situated.
If indeed, petitioners Valmonte and Badiola are aggrieved by the said Order, they should have intervened and moved for a
reconsideration of respondent Minister's Order before filing the instant petition. Petitioners failed to show that the case
falls under any one of the recognized exceptions to the rule that a motion for reconsideration should first be availed of
before filing a petition for certiorari and prohibition.
In view of the foregoing, the resolution of the third sub-issue will be based mainly on the arguments raised in
theBiscocho case.
RESOLUTION OF THE THIRD SUB-ISSUE
The Biscocho case involves the issue on the allocation of the incremental proceeds of the tuition fee increases applied for
by the respondent Espiritu Santo Parochial School for school years 1985-1986, 1986-1987, and 1987-1988. With the
repeal of Pres. Dec. No. 451 by B.P. Blg. 232, the allocation of the proceeds of any authorized tuition fee increase must
be governed by specific rules and regulations issued by the Minister (now Secretary) of Education pursuant to his
broadened rule making authority under section 42 of the new law. Thus, insofar as the proceeds of the authorized tuition
fee increases for school year 1985-1986 are concerned, the allocation must conform with the pertinent section of MECS
Order No. 25, s. 1985, to wit:
7. Application or Use of Tuition and Other School Fees or Charges.
xxx xxx xxx
7.4. Not less than sixty (60) percent of the incremental tuition proceeds shall be used for salaries or
wages, allowances and fringe benefits of faculty and support staff, including cost of living allowance,
imputed costs of contributed services, thirteenth (13th) month pay, retirement fund contributions, social
security, medicare, unpaid school personnel claims, and payments as may be prescribed by mandated
wage orders, collective bargaining agreements and voluntary employer practices:Provided, That
increases in fees specifically authorized for the purposes fisted in paragraph 4.3.3 hereof shall be used
entirely for those purposes.
xxx xxx xxx
With regard to the proceeds of the tuition fee increases for school year 1986-1987, the applicable rules are those
embodied in MECS Order No. 22, s. 1986 which made reference to MECS Order No. 25, s. 1985, the pertinent portion of
which is quoted above.
Finally, as to the proceeds of the tuition fee increases for school year 1987- 1988, DECS Order No. 37, s. 1987 must
apply:

c. Allocation of lncremental Proceeds


(1) In any case of increase at least sixty percent (60%) of the incremental proceeds should be allocated
for increases in or provisions for salaries or wages, allowances and fringe benefits of faculty and other
staff, including accruals to cost of living allowance, 13th month pay, social security, medicare and
retirement contributions and increases as may be provided in mandated wage orders, collective
bargaining agreements or voluntary employer practices.
(2) Provided, that in all cases of increase the allocation of the incremental proceeds shall be without
prejudice to the Supreme Court cases on the interpretation and applicability of existing legislations on
tuition and other fees especially on the allocation and use of any incremental proceeds of tuition and other
fees increases. (Emphasis supplied).
xxx xxx xxx
Based on the aforequoted MECS and DECS rules and regulations which implement BP Blg. 232, the 60% portion of the
proceeds of tuition fee increases may now be allotted for both salaries and allowances and other benefits. The 60% figure
is, however, a minimum which means that schools and their employees may agree on a larger portion, or in this case, as
much as 90% for salaries and allowances and other benefits. This is not in anyway to allow diminution or loss of the
portion allotted for institutional development of the school concerned. Thus, paragraph 7.5 of MECS Order No. 25, series
of 1985 specifically provides that other student fees and charges like registration, library, laboratory or athletic fees shall
be used exclusively for the purposes indicated.
III RESOLUTION OF THE SPECIFIC ISSUES
CEBU INSTITUTE OF TECHNOLOGY CASE
Petitioner assigns three other errors in the petition for certiorari:
1
RESPONDENT MINISTER OF THE MINISTRY OF LABOR AND EMPLOYMENT COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO A DENIAL OF DUE PROCESS OF LAW IN DIRECTLY ISSUING THE ORDER DATED
SEPTEMBER 29,1981 WITHOUT CONDUCTING A FORMAL INVESTIGATION AND ARBITRATION PROCEEDINGS.
2
PUBLIC RESPONDENT ERRED IN NOT DECLARING THAT PETITIONER IS EXEMPTED AND/OR NOT OBLIGED TO
PAY SERVICE INCENTIVE LEAVE.
3
PUBLIC RESPONDENT ERRED IN NOT DECLARING THAT PRIVATE RESPONDENTS' CLAIMS FOR COLA AND
SERVICE INCENTIVE LEAVE ARE FULLY BARRED BY LACHES AND/OR EXTINGUISHED BY PRESCRIPTION.
1. Petitioner assails the Order of the Minister of Labor on the ground that the same was issued without the benefit of a
hearing and was merely based on the report of the labor management committee which is allegedly without power to pass
upon the issues raised. On this premise, petitioner claims that it was denied its right to due process.
Petitioner's contention is without merit. The Labor Management Committee was empowered to investigate the complaint
against the petitioner for non-payment of the cost of living allowance, 13th month pay and service incentive leave from
1974-1981 [Annex "F"; Rollo, p. 37]. In the committee, petitioner was represented by its counsel, registrar and assistant
accountant and in the conferences that were held, the representatives of the petitioner were present. Furthermore, the
petitioner's position paper submitted to the committee reflects that in all the deliberations, it was never denied the right to
present evidence and be heard on all the issues raised, particularly to demonstrate that it had complied with the various
COLA, 13th month pay and service incentive leave decrees. The evidence presented during the conferences and the
position paper of the parties were made the basis of the committee's report and recommendation which in turn became
the basis of the order of the Minister of Labor directing the petitioner to pay the complainants their COLA and service
incentive leave benefits.
It could not therefore be contended that the petitioner was deprived of his right to be heard when it appears on the record
that it was permitted to ventilate its side of the issues. There was sufficient compliance with the requirements of due
process. In the face of the well- settled principle that administrative agencies are not strictly bound by the technical rules
of procedure, this Court dismisses the petitioner's claim that formal investigative and arbitration proceedings should be
conducted. "While a day in court is a matter of right in judicial proceedings, in administrative proceedings it is otherwise
since they rest upon different principles." [Cornejo v. Gabriel and Provincial Board of Rizal, 41 Phil. 188 (1920); Tajonera
v. Lamaroza, G.R. Nos. L-48907 and L-49035, December 19,1981, 110 SCRA 438].
2. Going now to the matter of service incentive leave benefits, petitioner claims that private respondents are engaged by
the school on a contract basis as shown by the individual teachers contract which defines the nature, scope and period of

their employment; hence, they are not entitled to the said benefit according to Rule V of the Implementing Rules and
Regulations of the Labor Code to wit:
Sec. 1. Coverage. This rule [on Service Incentive Leave] shall apply to all employees, except:
xxx xxx xxx
(d) Field personnel and other employees whose performance is unsupervised by the employer including
those who are engaged on task or contract basis, purely commission basis, or those who are paid in a
fixed amount for performing work irrespective of the time consumed in the performance thereof; (MOLE
Rules and Regulations, Rule V, Book III)
The phrase "those who are engaged on task or contract basis" should however, be related with "field personnel " applying
the rule on ejusdem generis that general and unlimited terms are restrained and limited by the particular terms that they
follow, [Vera v. Cuevas, G.R. No. L-33693, May 31, 1979, 90 SCRA 379]. Clearly, petitioner's teaching personnel cannot
be deemed field personnel which refers "to non-agricultural employees who regularly perform their duties away from the
principal place of business or branch office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty. [Par. 3, Article 82, Labor Code of the Philippines]. Petitioner's claim that private
respondents are not entitled to the service incentive leave benefit cannot therefore be sustained.
3. As a last ditch effort to bar private respondents'claims, petitioner asserts that the same are barred by laches and/or
extinguished by prescription according to Article 291 of the Labor Code which provides:
Art. 291. Money claims. All money claims arising from employer-employee , relations accruing during
the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued;
otherwise, they shall be forever barred.
All money claims accruing prior to the effectivity of this Code shall be filed with the appropriate entities
established under this Code within one (1) year from the date of effectivity, and shall be processed or
determined in accordance with implementing rules and regulations of the Code; otherwise, they shall be
forever barred.
xxx xxx xxx
Considering that the complaint alleging non-payment of benefits was filed only on February 11, 1981, petitioner argues
that prescription has already set in.
From the aforequoted provision, it is not fully accurate to conclude that the entire claims for COLA and service incentive
leave are no longer recoverable. This Court finds no reason to disturb the following pronouncement of the Minister of
Labor:
xxx xxx xxx
Simply stated, claims for COLA under P.D. 525, which took effect on August 1, 1974, for the months of
August, September and October 1974 must be filed within one (1) year from November 1, 1974,
otherwise they shall be considered prescribed; claims under the same decree that accrued on or after
November 1, 1974 should be initiated within three (3) years from the date of accrual thereof, otherwise
the same shall be deemed extinguished. Although this particular claim was filed on February 11, 1981,
petitioners herein are entitled to COLA under P.D. 525 from February 1978 up to the present since the
COLA that accrued in February 1978 has not yet prescribed at the time that the claim was filed in
February 1981. In the same vein, petitioners herein should be granted COLA under P.D. 1123 from
February 1978 up to 1981 inasmuch as said decree became effective only on May 11, 1977. Further,
petitioners are entitled to the full amount of COLA provided under P.D.'s 1614, 1634, 1678 and 1713. It
must be pointed out that the earliest of the just cited four (4) decrees, i.e., P.D. 1614, just took effect on
April 1, 1979. Thus, the prescriptive period under Art. 292 of the Labor Code, as amended, does not as
yet apply to money claims under the just mentioned decrees.
DIVINE WORD COLLEGE CASE
In assailing the disputed Order, petitioner contends that the public respondents acted with grave and patent abuse of
discretion amounting to lack of jurisdiction in that:
1. The Regional Director has no jurisdiction over money claims arising from employer-employee
relationship; and
2. The Regional Director and Deputy Minister of Labor adopted the report of the Labor Standards Division
without affording the petitioner the opportunity to be heard.
1. Petitioner school claims that the case at bar is a money claim and should therefore be within the original and exclusive
jurisdiction of the Labor Arbiter pursuant to article 217 of the Labor Code, as amended.

It appears from the record, however, that the original complaint filed by ten (10) faculty members of the Divine Word
College was for non-compliance with Pres. Dec. No. 451 and with Labor Code provisions on service incentive leave,
holiday and rest day pay and which complaint specifically prayed that an inspection of the College be conducted.
Contrary to the petitioner's protestation of lack of jurisdiction, the Secretary of Labor or his duly authorized representatives
(which includes Regional Directors) are accorded the power to investigate complaints for non- compliance with labor laws,
particularly those which deal with labor standards such as payment of wages and other forms of compensation, working
hours, industrial safety, etc. This is provided for in article 128 of the Labor Code, as amended:
Art. 128. Visitorial and enforcement power.
(a) The Secretary of Labor or his duly authorized representatives including labor regulation officers, shall
have access to employers' records and premises at any time of the day or night, whenever work is being
undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact,
condition or matter which may be necessary to determine violations or which may aid in the enforcement
of this Code and of any labor law, wage order or rules and regulations issued pursuant thereto.
(b) The Secretary of Labor or his duly authorized representatives shall have the power to order and
administer, after due notice and hearing, compliance with the labor standards provisions of this Code
based on the findings of labor regulation officers or industrial safety engineers made in the course of
inspection, and to issue writs of execution to the appropriate authority for the enforcement of their order,
except in cases where the employer contests the findings of the labor regulations officer and raises issues
which cannot be resolved without considering evidentiary matters that are not verifiable in the normal
course of inspection. (Emphasis supplied).
Furthermore, Policy Instruction No. 6 which deals with the distribution of jurisdiction over labor cases restates inter alia
that "(L)abor standards cases arising from violation of labor standards laws discovered in the course of inspection or
complaints where employer-employee relations still exist" are under the exclusive original jurisdiction of the Regional
Director.
Even assuming that respondent Regional Director was without jurisdiction to entertain the case at bar, petitioner is now
barred at this stage to claim lack of jurisdiction having actively participated in the proceedings below. Petitioner never
questioned the jurisdiction of the respondent Regional Director.
2. The petitioner claims that it was never afforded the opportunity to be heard and was therefore denied due process.
There is no dispute that an inspection of the College was conducted after a complaint by some faculty members was filed
with the Regional Office of the Ministry of Labor and Employment. A report was submitted on the basis of the findings
contained therein. Petitioner was furnished a copy of said report to which it filed a comment. Finding this to be without
merit, the Regional Director issued an order giving petitioner ten (10) days to manifest its compliance with the findings,
otherwise, another would be issued to enforce payment. Petitioner appealed but instead of resolving the memorandum of
appeal, which the Regional Director treated as a motion for reconsideration, said Director issued another Order dated
August 2, 1983 directing the payment of the employees' share in the sixty (60%) percent incremental proceeds. Petitioner
moved for a reconsideration of the latest order which the Regional Director, however, denied, thereby elevating the case
to the Office of the Minister of Labor and Employment.
The foregoing facts demonstrate that petitioner had the opportunity to refute the report on the inspection conducted. It
submitted a comment thereto, which was in effect its position paper. The arguments therein and evidence attached
thereto were considered by respondent Regional Director in the order issued subsequently. They, therefore, had ample
opportunity to present their side of the controversy.
What due process contemplates is not merely the existence of an actual hearing. The "right to be heard" focuses more on
the substance rather than the form. In the case at bar, petitioner was actually heard through the pleadings that it filed with
the Regional Office V. As it itself admitted in its petition that it was afforded the right to be heard on appeal [See Rollo, p.
581, petitioner cannot therefore insist that it was denied due process.
FAR EASTERN UNIVERSITY CASE
Two other issues are raised in this petition, to wit:
1
WHETHER OR NOT 'TRANSPORTATION ALLOWANCE' SHOULD BE CONSIDERED AS 'EQUIVALENT TO 13THMONTH PAY UNDER PRES. DEC. NO. 851.
2
WHETHER OR NOT LEGAL HOLIDAY PAY BENEFIT COULD BE VALIDLY WITHDRAWN AFTER BEING PRACTICED
CONTINUOUSLY FOR EIGHT (8) MONTHS.

1. The issue on the thirteenth (13th) month pay involves an interpretation of the provisions of Pres. Dec. No. 851 which
requires all employers "to pay all their employees receiving a basic salary of not more than Pl,000 a month, regardless of
the nature of the employment, a 13th- month pay" (Sec. 1). However, "employer[s] already paying their employees a 13thmonth pay or its equivalent are not covered" (Sec. 2). (Emphasis supplied)
The Rules and Regulations Implementing Pres. Dec. No. 851 provide the following:
SEC. 3. Employees. The Decree shall apply to all employers except to: ...
c) Employers already paying their employees 13th-month or more in a calendar year or its equivalent at
the time of this issuance; ...
xxx xxx xxx
The term "its equivalent" as used in paragraph (c) hereof shall include Christmas bonus, mid-year bonus,
profit-sharing payments and other cash bonuses amounting to not less than 1/12th of the basic salary but
shall not include cash and stock dividends, cost of living allowances and all other allowances regularly
enjoyed by the employer, as well as non-monetary benefits. Where an employer pays less than 1/1 2th of
the employees basic salary, the employer shall pay the difference.
In the case at bar, the 13th month pay is paid in the following manner:
FOR REGULAR EMPLOYEES:
Transportation Allowance (TA)
50% of basic for the first year of service plus additional 5% every year thereafter but not to exceed 100%
of basic salary
Christmas Bonus (CB)
50% of basic salary for the first year of service plus additional 5% every year thereafter but not to exceed
100% of basic salary.
For employees who have served the University for more than 10 years, the University pays them
emoluments equivalent to the 14 months salaries.
13th Month Pay Formula:
Monthly Rate x No. of
months served for the year
Less TA/CB = 13th Mo. pay
12 months
FOR CASUAL EMPLOYEES:
13th Month Pay Formula:
Add salaries from 16 December of previous year to 15th December of present year [and] divide by 12 months = 13th Mo.
Pay (Rollo, pp. 60, 72).
The University's answer to the Union's claim of underpayment of the 13th month pay is that the "transportation allowance"
paid to its employees partakes the nature of a mid-year bonus which under section 2 of Pres. Dec. No. 851 and section
3(c) of the Implementing Rules and Regulations is equivalent to the 13th month pay,
The Labor Arbiter ordered FEU to pay the 13th month pay differentials of the complainants reasoning that:
CLEARLY, transportation allowance cannot be considered as equivalent" of 13th month pay as it is
neither a Christmas bonus, mid-year bonus, profit sharing payment, or other cash bonuses, pursuant to
paragraphs (c) and (e), Section 3 of PD 851. The regularity of its payment further cements this
proposition.
PERFORCE, complainants are underpaid of their 13th month pay in an amount equivalent to 50% of their
basic salary for the lst year of service, plus additional 5% every year thereafter but not to exceed 100% of
their basic salary which, per respondent's formula, corresponds to their transportation allowance. (Rollo,
p. 61).

On appeal, the Third Division of the National Labor Relations Commission reversed the Labor Arbiter's ruling by
dismissing the complainant's claim for underpayment of the 13th month pay for lack of merit. The NLRC ruled that:
From the above findings and conclusion, it is clear that insofar as employees with ten (10) years of
service or more are concerned, they receive the equivalent of one (1) month pay for Christmas bonus and
another one (1) month pay as transportation allowance or a total of fourteen (14) months salary in a year.
Obviously, this group of employees are fully paid of their 13th month pay and are not therefore subject to
the instant claim. As it is only those with less than ten (10) years of service are included or encompassed
by the Labor Arbiter's resolution on this particular issue. With this clarification, we shall now proceed to
discuss the crux of the controversy, that is, the determination of whether or not the so designated
"transportation allowance" being paid to the employees should be considered among those deemed
equivalent to 13th month pay. As adverted earlier, the Labor Arbiter opined that it cannot be so
considered as the equivalent of 13th month pay.
xxx xxx xxx
In passing upon the issue, we deemed it best to delve deeper into the nature and intendment of the
transportation allowances as designated by both the complainants and the respondent. Complainants
claim that the transportation allowance they enjoy has always been called and termed allowance and
never as bonus since the time the same was given to them. They assert that it simply was intended as an
allowance and not a bonus. It would appear however that complainants do not dispute respondent's stand
that transportation allowance is being paid only every March of each year as distinguished from other
allowances that are being paid on a monthly basis or on a bimonthly basis; that the amount of
transportation allowance to be paid is dependent on the length of service of the employee concerned (i.e.
50% basic in the first year and additional 5% for each succeeding years, etc.); that the said method of
computing the amount of the transportation allowance to be paid the complainants is Identical to that used
in determining Christmas bonus (respondent's exhibit 8) that the reason behind said transportation
allowance is to financially assist employees in meeting their tax obligations as the same become due on
or about the month of March of each year.
xxx xxx xxx
We are inclined to believe and so hold that by the manner by which said transportation allowance is being
paid (only once a year) as well as the method in determining the amount to be paid (similar to Christmas
bonus) and considering further the reason behind said payment (easing the burden of taxpayeremployee), the said transportation allowance given out by respondent while designating as such,
partakes the nature of a mid-year bonus. It bears to note in passing that in providing for transportation
allowance, respondent was not compelled by law nor by the CBA (Annex "A" of respondent's Appeal) as
nowhere in the CBA nor in the Labor Code can be found any provision on transportation allowance. It was
therefore a benefit that stemmed out purely from the voluntary act and generosity of the respondent FEU.
Moreover, said transportation allowance is only being paid once a year. On the other hand, regular
allowances not considered as 13th month pay equivalent under P.D. 851, to our mind, refer to those paid
on regular intervals and catering for specific employees' needs and requirements that recur on a regular
basis. Verily, if the intendment behind the disputed transportation allowance is to answer for the daily
recurring transportation expenses of the employees, the same should have been paid to employees on
regular periodic intervals. All indications, as we see it, point out to conclusion that the disputed
transportation allowance, while dominated as such apparently for lack of better term, is in fact a form of
bonus doled out by the respondent during the month of March every year.
Hence, we hold that it is one of those that can very well be considered as equivalent to the 13th month
pay (Rollo, pp. 73, 74, 75, 76).
This Court sustains the aforequoted view of public respondent. The benefit herein designated as "transportation
allowance" is a form of bonus equivalent to the 13th month pay. Nevertheless, where this does not amount to 1/12 of the
employees basic salary, the employer shall pay the difference.
The evident intention of the law was to grant an additional income in the form of a 13th month pay to employees not
already receiving the same. This Court ruled in National Federation of Sugar Workers (NFSW) v. Ovejera[G.R. No. 59743,
May 31, 1982, 114 SCRA 354].
Otherwise put, the intention was to grant some relief not to all workers but only to the unfortunate
ones not actually paid a 13th month salary or what amounts to it, by whatever name called: but it was not
envisioned that a double burden would be imposed on the employer already paying his employees a 13th
month pay or its equivalent whether out of pure generosity or on the basis of a binding agreement and,
in the latter case, regardless of the conditional character of the grant (such as making the payment
dependent on profit), so long as there is actual payment. Otherwise, what was conceived to be a 13th
month salary would in effect become a 14th or possibly 15th month pay.
xxx xxx xxx
Pragmatic considerations also weigh heavily in favor of crediting both voluntary and contractual bonuses
for the purpose of determining liability for the 13th month pay. To require employers (already giving their

employees a 13th month salary or its equivalent) to give a second 13th month pay would be unfair and
productive of undesirable results. To the employer who had acceded and is already bound to give
bonuses to his employees, the additional burden of a 13th month pay would amount to a penalty for his
munificence or liberality. The probable reaction of one so circumstanced would be to withdraw the
bonuses or resist further voluntary grants for fear that if and when a law is passed giving the same
benefits, his prior concessions might not be given due credit; and this negative attitude would have an
adverse impact on the employees (pp.369,370).
The case of Dole Philippines, Inc. v. Leogardo [G.R. No. 60018, October 23, 1982, 117 SCRA 938 (1982)], citing the
ruling in the above case also pointed out that:
To hold otherwise would be to impose an unreasonable and undue burden upon those employers who had demonstrated
their sensitivity and concern for the welfare of their employees. A contrary stance would indeed create an absurd situation
whereby an employer who started giving his employees the 13th month pay only because of the unmistakable force of the
law would be in a far better position than another who, by his own magnanimity or by mutual agreement, had long been
extending his employees the benefits contemplated under PD No. 851, by whatever nomenclature these benefits have
come to be known. Indeed, PD No. 851, a legislation benevolent in its purpose, never intended to bring about such
oppressive situation. (p. 944)
2. Presidential Decree No. 570-A was issued on November 1, 1974 amending certain articles of Presidential Decree No.
442 (Labor Code of the Philippines promulgated on May 1, 1974 which took effect six months thereafter). Section 28
thereof provides that:
Section 28. A new provision is hereby substituted in lieu of the original provision of Article 258 of the
same Code to read as follows:
Art. 258. Right to holiday pay(a) Every worker shall be paid his regular holidays, except in retail and service establishments regularly
employing less than ten (10) workers;
(b) The term "holiday" as used in this Chapter, shall include: New Year's day, Maundy Thursday, Good
Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November,
the twenty fifth and thirtieth of December and the day designated by law for holding a general election.
(c) When employer may require work on holidays. The employer may require an employee to work on any
holiday but such employee shall be paid a compensation equivalent twice his regular rate.
Presidential Decree No. 850 issued on December 16, 1975 also amending certain articles of Pres. Dec. No. 442 adopted
the aforequoted provision. Two months later, on February 16, 1976, the Rules and Regulations Implementing the Labor
Code, as amended, was released the pertinent portion of which states that:
Section 2. Status of employees paid by the month. Employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a salary of not less than the statutory or
established minimum wage shall be presumed to be paid for all days in the month whether worked or not.
For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage
multiplied by 365 days divided by twelve.
(e) Section 3. Holiday Pay. Every employer shall pay his employees their regular daily wage for any
unworked regular holiday.
As used in the Rule, the term 'holiday' shall exclusively refer to: New Year's Day, Maundy Thursday,
Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of
November, the twenty-fifth and thirtieth of December and the day designated by law for a general election
or national referendum or plebiscite (MOLE Rules and Reg. Book III, Rule IV, sec. 2 (1976).
After one week, on February 23, 1976, the Minister of Labor issued Policy Instruction No. 9, to clarify further the right to
holiday pay, thus:
The Rules Implementing PD 850 have clarified the policy in the implementation of the ten (10) paid legal
holidays. Before PD 850. the number of working days a year in a firm was considered important in
determining entitlement to the benefit. Thus, where an employee was working for at least 313 days, he
was definitely already paid. If he was working for less than 313, there was no certainty whether the ten
(10) paid legal holidays were already paid to him or not.
The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily employees. In the
case of monthly, only those whose monthly salary did not yet include payment for the ten (10) paid legal
holidays are entitled to the benefit.

Under the rules implementing PD 850, this policy has been fully clarified to eliminate controversies on the
entitlement of monthly paid employees. The new determining rule is this: If the monthly paid employee is
receiving not less than P 240, the maximum monthly minimum wage, and his monthly pay is uniform from
January to December, he is presumed to be already paid the ten (10) paid legal holidays. However, if
deductions are made from his monthly salary on account of holidays in months where they occur, then he
is entitled to the ten (10) legal holidays.
These new interpretations must be uniformly and consistently upheld.
This issuance shall take effect immediately.
In the meantime, respondent University paid its employees holiday pay for the following days:
DATE HOLIDAYS PAID
June 9, 1975 for the previous nine legal holidays
August, 1975 for the previous June 12 and July 4
Jan. 14, 1976 or the previous Nov. 30, Dec. 25
and 30 and Jan. 1
After January 14, 1976, however, the University ceased paying the holiday pay allegedly by reason of Policy Instruction
No. 9. Specifically, the University claimed that the monthly salary of its employees was, as of 1976, more than P 240.00
without deductions from their monthly salary on account of holidays in months where they occurred and that therefore, by
virtue of Policy Instruction No. 9, they were no longer entitled to the ten paid legal holidays.
Petitioners, upon the other hand, contend that Policy Instruction No. 9 could not have possibly been the reason that
prompted the University to withdraw such benefits from its faculty and employees because said implementing rule was
issued only on April 23, 1976 or four months later.
The Labor Arbiter ruled in favor of the complainant Union for the reason that ". . . the payment of the 10-paid legal holiday
benefits from June 8, 1975 up to January 14, 1976 is considered an employer practice that can no longer be withdrawn."
[Decision; Rollo, p. 59].
As in the case of the 13th month pay, the NLRC reversed the Labor Arbiter's ruling. The NLRC held that:
Apparently, Arbiter Ruben Aquino concluded that payment by the respondent of the legal holiday pay
preceded the effectivity of the Rules and Regulations Implementing P.D. 850 and which rules took effect
on February 16, 1976. Hence, his conclusion that the payment of the legal holiday pay stemmed out from
company practice and not from law. Tracing back, however, the payments made by respondent of said
holiday pay will show that, if ever, the same was made pursuant to P.D. 570-A which took effect on
November 1, 1974. Noteworthy is the undisputed fact that respondent first paid its employees legal
holiday pay in June 1975 corresponding to nine (9) legal holidays. It bears to note that from the time of
the effectivity of P.D. 570-A which was in November of 1974 up to June of 1975, the time respondent first
paid legal holiday pay for nine (9) legal holidays, there, were indeed more or less nine legal holidays that
transpired to wit: November 30, 1974, December 25, 1974, December 30, 1974, January 1, 1975,
February 27, 1975 (Referendum Day), Maundy Thursday of 1975, Good Friday of 1975, April 9, 1975 and
finally, May 1st of 1975. We are therefore inclined to lend credence to respondent's claim that the
payment of legal holiday pay was in fact made pursuant to law, P.D. 570-A in particular, it is not one that
arose out of company practice or policy.
Finding that said payment was made based on an honest although erroneous interpretation of law, which
interpretation was later on corrected by the issuance (sic) of Policy Instruction No. 9 and which issuance
prompted respondent to withdraw the holiday pay benefits extended to the employees who were paid on
a regular monthly basis, and finding further that under Policy Instructions No. 9, said subject employees
are deemed paid their holiday pay as they were paid on a monthly basis at a wage rate presumably
above the statutory minimum, we believe and so hold that the withdrawal of said holiday pay benefit was
valid and justifiable under the circumstances (Rollo, pp. 33-4).
This Court cannot sustain the foregoing decision of public respondent. Said decision relied on Section 2, Rule IV, Book Ill
of the implementing rules and on Policy Instruction No. 9 which were declared by this Court to be null and void in Insular
Bank of Asia and America Employee's Union (IBAAEU) v. Inciong (G.R. No. 52415, October 23, 1984, 132 SCRA 6631. In
disposing of the issue at hand, this Court reiterates the ruling in that case, to wit:
WE agree with the petitioner's contention that Section 2, Rule IV, Book Ill of the implementing rules and
Policy Instruction No. 9 issued by the then Secretary of Labor are nun and void since in the guise of
clarifying the Labor Code's provision on holiday pay, they in fact amended them by enlarging the scope of
their exclusion.

xxx xxx xxx


It is elementary in the rules of statutory construction that when the language of the law is clear and
unequivocal the law must be taken to mean exactly what it says. In the case at bar, the provisions of the
Labor Code on the entitlement to the benefits of holiday pay are clear and explicit it provides for both
the coverage of and exclusion from the benefits. In Policy Instruction No. 9, the then Secretary of Labor
went as far as to categorically state that the benefit is principally intended for daily paid employees, when
the law clearly states that every worker shall be paid their regular holiday pay. This is a flagrant violation
of the mandatory directive of Article 4 of the Labor Code, which states that "All doubts in the
implementation and interpretation of the provisions of this Code,including its implementing rules and
regulations, shall be resolved in favor of labor. " Moreover, it shall always be presumed that the
legislature intended to enact a valid and permanent statute which would have the most beneficial effect
that its language permits (Orlosky vs. Haskell, 155 A. 112). (pp. 673-4).
BISCOCHO CASE
At issue also in this petition is whether the 60% incremental proceeds may be subjected to attorney's fees, negotiation
fees, agency fees and the like.
The Court notes the fact that there are two classes of employees among the petitioners: (1) those who are members of
the bargaining unit and (2) those who are not members of the bargaining unit. The first class may be further subdivided
into two: those who are members of the collective bargaining agent and those who are not.
It is clear that the questioned Order of the respondent Minister applies only to members of the bargaining unit.The CBA
prepared pursuant to said Order, however, covered employees who are not members of the bargaining unit, although said
CBA had not yet been signed at the time this petition was filed on November 24, 1986. Assuming it was signed thereafter,
the inclusion of employees outside the bargaining unit should be nullified as this does not conform to said order which
directed private respondents to execute a CBA covering only members of the bargaining unit.
Being outside the coverage of respondent Minister's order, and thus, not entitled to the economic package involved
therein, employees who are non- members of the bargaining unit should not be assessed negotiation fees, attorney's
fees, agency fees and the like, for the simple reason that the resulting collective bargaining agreement does not apply to
them. It should be clear, however, that while non-members of the bargaining unit are not entitled to the economic package
provided by said order, they are, in lieu thereof, still entitled to their share in the 60% incremental proceeds of increases in
tuition or other school fees or charges.
As far as assessment of fees against employees of the collective bargaining unit who are not members of the collective
bargaining agent is concerned, Article 249 of the Labor Code, as amended by B.P. Blg. 70, provides the rule:
Art. 249. Unfair labor practices of employers.xxx xxx xxx
(e) ... 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 . . .
Employees of the collective bargaining unit who are not members of the collective bargaining agent have to pay the
foregoing fees if they accept the benefits under the collective bargaining agreement and if such fees are not
unreasonable. Petitioners who are members of the bargaining unit failed to show that the equivalent of ten (10%) percent
of their backwages sought to be deducted is unreasonable.
WHEREFORE, the Court rules:
CEBU INSTITUTE OF TECHNOLOGY CASE
In G.R. No. 58870, the Order of respondent Minister of Labor and Employment dated September 29, 1981 is SUSTAINED
insofar as it ordered petitioner Cebu Institute of Technology to pay its teaching staff the following:
(1) Cost of living allowance under Pres. Dec.Nos.525 and 1123 from February 1978 up to 1981;
(2) Cost of living allowance under Pres. Dec. Nos. 1614, 1634, 1678 and 1713; and
(3) Service incentive leave due them from 1978.
The Temporary Restraining Order issued by this Court on December 7, 1981 is hereby LIFTED and SET ASIDE. No
costs.
DIVINE WORD COLLEGE CASE

The petition in G.R. No. 68345 is DENIED for lack of merit. The questioned Orders of respondent Deputy Minister of
Labor and Employment, dated December 19, 1983 and July 4, 1984 are SUSTAINED insofar as said Orders denied the
payment of the emergency cost of living allowances of private respondents faculty teachers of the Divine Word College of
Legazpi out of the sixty (60%) incremental proceeds of tuition and other school fee increases collected during the
effectivity of Pres. Dec. No. 451. The Rules and Regulations implementing Pres. Dec. No. 451 are hereby declared invalid
for being ultra vires No costs.
FAR EASTERN UNIVERSITY CASE
The Decision of public respondent National Labor Relations Commission dated September 18, 1984
isREVERSED insofar as it affirmed in toto the dismissal of petitioner Far Eastern University Employee Labor Union's claim
under Pres. Dec. No. 451 and its claim for payment of holiday pay. Private respondent Far Eastern University is therefore
ordered to pay its employees the following:
(1) Their sixty (60) percent share in the increases in tuition and other school fees or charges which shall
be allocated exclusively for increase in salaries or wages if the tuition or other school fee increase was
collected during the effectivity of Pres. Dec. No. 451;
(2) Their claim for holiday pay which was withdrawn since January 14, 1976 up to the present.
The Decision of respondent National Labor Relations Commission, however, is SUSTAINED insofar as it denied
petitioner's claim for thirteenth (1 3th month pay. No costs.
FABROS CASE
In G.R. No. 70832, the Petition for certiorari and Prohibition is DISMISSED. MECS Order No. 25. s. 1985, particularly
paragraphs 7.0 to 7.5 thereof, which provide for the use and application of sixty (60%) percent of the increases in tuition
and other school fees or charges, having been issued pursuant to B.P. Blg. 232 which repealed Pres. Dec. No. 451, is
hereby declared VALID. The Temporary Restraining Order issued by this Court dated May 29, 1985 is LIFTED and SET
ASIDE. No costs.
BISCOCHO CASE
The assailed portions of the Order of the Minister of Labor and Employment dated April 14, 1986 are AFFIRMED. The
collective bargaining agreement prepared pursuant thereto should, however, be MODIFIED to cover only members of the
bargaining unit. Only petitioners who are members of the collective bargaining unit, if they accept the benefits under the
resulting collective bargaining agreement, shall be charged ten (10%) percent of the payable backwages as negotiation
fees. The Temporary Restraining Order dated November 25, 1986 is LIFTEDand SET ASIDE. No costs.
VALMONTE CASE
The petition in G.R. No. 76596 is DISMISSED for lack of merit.
Effective September 1, 1982, the application and use of the proceeds from increases in tuition fees and other schools fees
or charges shall be governed by section 42 of B.P. Blg. 232 as implemented by the Rules and Regulations issued by the
then Ministry, now Department of Education, Culture and Sports. SO ORDERED.
Teehankee, C.J., Yap, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Bidin and Sarmiento, JJ., concur.
Fernan, Narvasa, Cruz and Padilla, JJ.,