BONIFACIO K.

SIA and MANILA GLASS

SUPPLY, petitioners, vs. NATIONAL
LABOR
RELATIONS
COMMISSION,
LABOR ARBITER DOMINADOR B.
SALUDARES,
DEPUTY
SHERIFF
ANTONIO T. DATU and IMELDA B.
DAMASCO, respondents.
QUISUMBING, J.:
These two petitions for certiorari seek to annul the
decision promulgated by public respondent National
Labor Relations Commission (NLRC) on March 21, 1994
in NLRC CA No. L-001159, and its resolution dated May
11, 1994, which denied petitioners respective motions
for reconsideration.
Ms. Imelda Damasco is the petitioner in G.R. No.
115755 and private respondent in G.R. No. 116101. She
was a regular sales clerk in Manila Glass Supply in
Olongapo City.
Manila Glass Supply is private respondent in G.R.
No. 115755 and petitioner in G.R. No. 116101. It is a
sole proprietorship engaged in the sale of glass with
main store in Olongapo City and branch in Metro
Manila. Bonifacio K. Sia is private respondent in G.R.
No. 115755 and petitioner in G.R. No. 116101. He is the
owner of Manila Glass Supply.
Disputing the claim of complainant, respondents
maintain as follows: That sometime in the late part of
August 1992, complainant was instructed by
respondent to report for work in their store in Metro
Manila as there is a necessity for her detail thereat for
reasons that the employees there are new and do not

have the experience and know-how in running the store

specifically with regards (sic) to the sale of glass; that
complainant manifested her objection to such detail for
reasons that her husband is working in Olongapo City
and she does not want to work in Manila; that
thereafter, complainant did not report for work in the
respondents store in Olongapo City, so respondent
sent some of his employees to the house of
complainant but were told that she is sick and cannot
report for work; that sometime in the first week of
January 1993, respondent received a copy of the
instant complaint filed by complainant; that
immediately, respondent thru counsel sent a letter to
complainant directing her to report for work on January
13, 1993 at its store in Olongapo City; that complainant
ignored the letter despite receipt thereof, hence, on
January 15, 1993, respondent again sent complainant
another letter directing her to report for work on
January 22, 1993 but just the same, complainant failed
and refused to report for work; that it is not true as
claimed by complainant that respondent shouted at her
and swiped an ashtray from the table and threw at her
some notebooks. [1]
With regard to the award of attorneys fees the ten
percent (10%) attorneys fees is provided for in Article
111 of the Labor Code. Considering the circumstances
of this case, said award is in order.
WHEREFORE, in G.R. No. 115755, the petition is
GRANTED. The judgment of the Labor Arbiter in favor
of petitioner Imelda B. Damasco dated September 2,
1993 is REINSTATED in full. In G.R. No. 116101, the
petition of Bonifacio K. Sia and Manila Glass Supply is
DISSMISSED for lack of merit. Costs against petitioners
Bonifacio K. Sia and Manila Glass Supply.
SO ORDERED.

MEGASCOPE
GENERAL
SERVICES,
petitioner, vs. NATIONAL LABOR
RELATIONS
COMMISSION,
LABOR
ARBITER ARIEL C. SANTOS, ERLINDA
ARAOJO, LILING C. ARAGO, LUZ P.
BALENA,
ADELA
R.
BAUTISTA,
GEMENA D. CANTA, VICTORINA S.
COLLENA, ELISA H. DE GUZMAN,
YOLANDA J. GOB, JULING R. GOB,
FRANCISCO N. GUMARO, LOURDES P.
MANALO, ROSALINA O. RAMIREZ,
RODRIGO O. RAMIREZ, VENTURA
RAMOS, REYNALDO MAGTANONG,
AURELIA M. SAN JOSE, NESTOR
SERIL, LUIS TUTOL and GENER J. DEL
ROSARIO, respondents.
ROMERO, J.:

Petitioner questions the award of separation pay to

respondent workers after their employment was
terminated when the company ceased operations.
Petitioner Megascope General Services is a sole
proprietorship engaged in contracting out general
services. In 1977, it entered into a landscaping contract
with the System and Structures, Inc. (SSI) which
subcontracted the construction of the National Power
Corporation Housing Village in Bagac, Bataan. In hiring
laborers, petitioner would give them work from five (5)

to ten (10) days as the need arose and there were

periodical gaps in the hiring of employees.[1]
Between February 15, 1977 and January 1, 1989, it
contracted the services of the herein nineteen (19)
private respondents as gardeners, helpers and
maintenance workers. They were deployed at the
National Power Corporation (NPC) in Bagac, Bataan.
Except for Gener J. del Rosario whose employment
ended on April 30, 1989, the work of the other workers
ceased on January 31, 1991. At the time, private
respondents Nestor Seril and Gener J. del Rosario were
receiving P65.00 a day; private respondent Reynaldo
Magtanong, P56.00 a day, and the rest of the private
respondents, P54.00 a day.[2]
Consequently, private respondents filed before
Regional Arbitration Branch No. III in San Fernando,
Pampanga,
a
complaint
for
illegal
dismissal,
underpayment of salaries, nonpayment of five-day
service incentive leave credits and holiday pay against
petitioner and Andres M. David (NLRC Case No. RAB-III04-2096-91).
Petitioner and David countered that private
respondents were hired for a definite period of
employment, the commencement and termination of
which were already known to them; that the two-year
period stipulated in the private respondents' contract
with NPC had expired; that it was the NPC which
requested petitioner and David for an extension on a
monthly basis of the employment of some of the
private respondents; and that the reason for the
termination of private respondents' employment was
the termination itself of petitioner's contract with NPC.
[3]

On October 7, 1992, Labor Arbiter Ariel C. Santos

promulgated his decision finding that, by the nature of

their employment, private respondents were "usually

contractual employees." Nonetheless, he opined, in
view of the length of their service, that private
respondents had attained the status of "regular
contractual employees" who, pursuant to Policy
Instruction No. 20 issued by then Labor Secretary Blas
Ople, "cannot just be terminated after the expiration of
a contract in an area to where they are assigned
without paying them the corresponding separation pay
from the time they have served respondent's
company." He also held that since private respondents'
termination of employment was the result of the
expiration of petitioner's contract with the NPC, there
was no unlawful dismissal. He resolved the complaint
as follows:
"WHEREFORE, respondents MEGASCOPE and ANDRES
DAVID are hereby directed to pay complainants their
separation pay based on one-half month for every year
of service. (Please see Annex 'A').
The other monetary claims of complainants are hereby
DISMISSED for lack of merit.
SO ORDERED."[4]

PHILIPS SEMICONDUCTORS (PHILS.), INC.,

petitioner, vs. ELOISA FADRIQUELA,
respondent.
CALLEJO, SR., J.:

Before us is a petition for review of the Decision [1] of

the Court of Appeals (CA) in CA-G.R. SP No. 52149 and
its Resolution dated January 26, 2000 denying the
motion for reconsideration therefrom.

The petitioner Philips Semiconductors (Phils.), Inc. is

a domestic corporation engaged in the production and
assembly of semiconductors such as power devices, RF
modules, CATV modules, RF and metal transistors and
glass diods. It caters to domestic and foreign
corporations
that
manufacture
computers,
telecommunications equipment and cars.
Aside from contractual employees, the petitioner
employed 1,029 regular workers. The employees were
subjected to periodic performance appraisal based on
output, quality, attendance and work attitude. [2] One
was required to obtain a performance rating of at least
3.0 for the period covered by the performance
appraisal to maintain good standing as an employee.
After garnering a performance rating of 3.4, [8] the
respondents contract was extended for another three
months, that is, from April 5, 1993 to June 4, 1993. [9]
She, however, incurred five absences in the month of
April, three absences in the month of May and four
absences in the month of June. [10] Line supervisor
Shirley F. Velayo asked the respondent why she
incurred the said absences, but the latter failed to
explain her side. The respondent was warned that if
she offered no valid justification for her absences,
Velayo would have no other recourse but to recommend
the non-renewal of her contract. The respondent still
failed to respond, as a consequence of which her
performance
rating
declined
to
2.8.
Velayo
recommended to the petitioner that the respondents
employment
be
terminated
due
to
habitual
absenteeism,[11] in accordance with the Company Rules
and Regulations.[12] Thus, the respondents contract of
employment was no longer renewed.
Finally, we are convinced that it is erroneous for the
Commission to uphold the following findings of the

Labor Arbiter, thus:

Those dialogues of the complainant with the Line
Supervisor, substantially, stand for the notice and
investigation required to comply with due process. The
complainant did not avail of the opportunity to explain
her side to justify her shortcomings, especially, on
absences. She cannot now complain about deprivation
of due process.
Of course, the power to dismiss is a formal prerogative
of the employer. However, this is not without
limitations. The employer is bound to exercise caution
in terminating the services of his employees.
Dismissals must not be arbitrary and capricious. Due
process must be observed in dismissing an employee
because it affects not only his position but also his
means of livelihood. Employers should respect and
protect the rights of their employees which include the
right to labor. (Liberty Cotton Mills Workers Union v.
Liberty Cotton Mills, Inc., 90 SCRA 391 [1979])
To rule that the mere dialogue between private
respondent and petitioner sufficiently complied with the
demands of due process is to disregard the strict
mandate of the law. A conference is not a substitute for
the actual observance of notice and hearing. (Pepsi
Cola Bottling Co., Inc. v. National Labor Relations
Commission, 210 SCRA 277 [1992]) The failure of
private respondent to give petitioner the benefit of a
hearing before she was dismissed constitutes an
infringement on her constitutional right to due process
of law and not to be denied the equal protection of the
laws. The right of a person to his labor is deemed to be
his property within the meaning of the constitutional
guarantee. This is his means of livelihood. He cannot
be deprived of his labor or work without due process of

law. (Batangas Laguna Tayabas Bus Co. v. Court of

Appeals, 71 SCRA 470 [1976])
All told, the court concludes that petitioners dismissal
is illegal because, first, she was dismissed in the
absence of a just cause, and second, she was not
afforded procedural due process. In pursuance of
Article 279 of the Labor Code, we deem it proper to
order the reinstatement of petitioner to her former job
and the payment of her full backwages. Also, having
been compelled to come to court to protect her rights,
we grant petitioners prayer for attorneys fees. [38]
IN LIGHT OF ALL THE FOREGOING, the assailed
decision of the appellate court in CA-G.R. SP No. 52149
is AFFIRMED. The petition at bar is DENIED. Costs
against the petitioner.
SO ORDERED.
Puno, (Chairman), Quisumbing, Austria-Martinez,
and Tinga, JJ., concur.

ARTEMIO J. ROMARES, petitioner, vs.

NATIONAL
LABOR
RELATIONS
COMMISSION and PILMICO FOODS
CORPORATION, respondents.
MARTINEZ, J.:

This is a case of illegal dismissal. The decision of

the Executive Labor Arbiter[1] einstating petitioner was
reversed by the National Labor Relations Commission.
Hence, this appeal.
The antecedent facts as summarized in the decision
of the Executive Labor Arbiter are as follows:
Complainant in his Complaint and Position Paper

alleged that he was hired by respondent in its

Maintenance/Projects/Engineering Department during
the periods and at respective rates as follows:
That having rendered a total service of more than one
(1) year and by operation of law, complainant has
become a regular employee of respondent; That
complainant has performed tasks and functions which
were necessary and desirable in the operation of
respondents business which include painting,
maintenance, repair and other related jobs; That
complainant was never reprimanded nor subjected to
any disciplinary action during his engagement with the
respondent; That without any legal cause or
justification and in the absence of any time to know of
the charge or notice nor any opportunity to be heard,
respondent terminated him; That his termination is
violative to security of tenure clause provided by law;
That complainant be awarded damages and prays that
he be reinstated to his former position, be awarded
backwages, moral and exemplary damages and
attorneys fees.
Respondent on the other hand maintains that
complainant was a former contractual employee of
respondent and as such his employment was covered
by contracts; That complainant was hired as mason in
the Maintenance/Project Department and that he was
engaged only for a specific project under such
department; That complainants services as mason was
not continuous, in fact, he was employed with
International Pharmaceuticals, Inc. in Opol, Misamis
Oriental from January to April 1992; That when his last
contract expired on January 15, 1993, it was no longer
renewed and thereafter, complainant filed this instant
complaint; he prays that this instant petition be
dismissed for lack of merit.[2]

ment can be legally effected, to wit:

SO ORDERED.[4]
On appeal, the NLRC[5] set aside the decision of the
Executive Labor Arbiter and ruled:
Respondent argues that even if the employee was
performing work which is related to the business or
trade of the employer, the employee cannot be
considered a regular employee if his employment is for
a specific project or undertaking and for a fixed period
(Vol. 1, p. 26, supra), hence, the applicable provision is
paragraph 1 and not paragraph 2 of Article 280 of the
Labor Code, as amended (Vol. 2, p. 5, supra).
With the given circumstances, we cannot agree with
the pronouncement of the Executive Labor Arbiter that
it is the intent and spirit of the law that the status of
regular employment is attached to the worker on the
day immediately after the end of his first year of
service (Vol. 1, p. 50, supra).
What is apparently applicable in the case at bar is
paragraph 1 of Article 280 of the Labor Code, as
amended. As clearly shown by evidence, complainants
employment contracts (Vol. 1, pp.39-40, supra), were
for fixed or temporary periods. Thus, when
complainants employment with respondent was
terminated (Vol. 1, p. 41, supra), such cannot be
considered as illegal since the termination was due to
the expiration of the contract.
WHEREFORE, the assailed decision is Vacated and Set
Aside. The complaint is hereby Dismissed for lack of
merit.
SO ORDERED.[6]

Glory Philippines, Inc. vs. Vergara

(2007)

Facts: Petitioner
corporation
manufactures
money-counting machines for export exclusively
for Glory Japan Ltd. (Glory Japan). Petitioner hired
respondents as members of Parts Inspection
Section (PIS) on July 6, 1998 but employment
contracts indicated respondents as Production
Operators for a period of one month and renewed
on a monthly basis. On April 26, 1999, Glory
Japan cancelled its orders such that contractual
employees in the PIS were no longer needed.
Petitioner extended respondents employment
due to their pleas and continued to work until
May 25, 1999 when the security guard informed
them that their employment had been
terminated. Respondents filed complaints for
illegal dismissal.
Issue: Whether or not respondents were regular
employees.
Held: YES. Contrary to petitioners claim that
respondents were project employees whose
employment
was
coterminous
with
the
transaction with Glory Japan, the same was not
indicated in the contracts. As correctly observed
by the Court of Appeals, nothing therein
suggested or even hinted that their employment
was dependent on the continuous patronage of
Glory Japan. The principal test for determining
whether particular employees are properly
characterized as project employees, as
distinguished from regular employees, is

whether or not the project employees were

assigned to carry out a specific project or
undertaking, the duration and scope of which
were specified at the time the employees were
engaged
for
that
project.
Further,
the
employment contracts did not indicate the
duration and scope of the project or undertaking
as required by law. It is not enough that an
employee is hired for a specific project or phase
of work to qualify as a project employee. There
must also be a determination of, or a clear
agreement on, the completion or termination of
the project at the time the employee was
engaged, which is absent in this case.
Project employees are those workers hired (1) for
a specific project or undertaking, and (2) the
completion or termination of such project or
undertaking has been determined at the time of
engagement of the employee.

Baltazar vs. San Miguel Brewery Inc

[G .R. No. L-23076 February 27,
1969]

Facts: The petitioner is the salesman-in-charge

of San Miguel Brewery, Inc. in Dagupan
warehouse with a monthly pay of P240.00, P5.00
per diem and a commission of P0.75 per case
sold. On October 9, 1956, 8 days after Baltazar
was appointed as the salesman-in-charge, the
regular employees in Dagupan warehouse went
on strike because of unjust treatment. Baltazar
was recalled to appellants Manila Office on the

13th of October, 1956 upon the order of his

superior and conduct an investigation. The
investigation
found
that
the
employees
grievances were well founded. The next day, the
strikers returned to their work voluntarily. On
October 15, the petitioner was informed that he
was not to return to Dagupan anymore but he
still reported to work at the main office from
October 16 to November 2, 1956 waiting for
assignment. From November 3 to December 19
on the same year, he absented himself from work
without consent from his superiors and without
advising them or anybody else of the reason for
his prolonged absence. He was dismissed from
work because of petitioners unauthorized
absence and if the company would consider its
health, welfare and retirement plan requiring sick
leave, still the petitioner did inexcusable actions
since sick leave, to be considered authorized and
excusable, must be certified to by the company
physician and the appellant-company informed
that Baltazar was dismissed effective November
30, 1956. Baltazar initiated a complaint which the
trial court ruled that Baltazars dismissal was
justified but, however, ordering San Miguel
Brewery Inc. to pay Baltazar one month
separation pay, plus the cash value of 6 months
accumulated sick leave.
Issue: Whether or not the petitioner is entitled to
one month separation pay and the cash value of
6 months accumulated sick leave.
Held: No, the petitioner is not entitled to one
month separation pay and the cash value of 6

months accumulated sick leave. Under the

Marcaida vs. Philippine Education Company 53
O.G. No. 23, RA 1052 makes reference to
termination of employment, instead of dismissal,
to exclude employees separated from the service
for causes attributable to their own fault. It is
limited in its operation, to cases of employment
without definite period. When the employment is
for a fixed duration, the employer may terminate
it even before the expiration of a stipulated
period, should there be a substantial breach of
obligations by the employee; in which event the
latter is not entitles to advance notice or
separation pay. it would patently, be absurd to
grant a right thereto to an employee guilty of the
same breach of obligation, when the employment
is without a definite period, as if he were entitled
to greater protection than employees engaged
for a fixed duration. In connection with the
question of whether or not petitioner is entitled
to the cash value of 6 months accumulated sick
leave, it appears that while under the last
paragraph of Article 5 of appellants Rules and
Regulations of Health, Welfare and Retirement
Plan, unused sick leave may be accumulated up
to a maximum of 6 months, the same is not
commutable or payable in cash upon the
employees option.

Wellington
Investment
&
Manufacturing
Corporation
vs.
Trajano [G.R. No. 114698 July 3,

1995]

Facts: By virtue of the routine inspection

conducted by a Labor Enforcement Officer,
Wellington Flour Mills owned by the petitionercompany was found non-payment of regular
holidays falling on a Sunday for monthly-paid
employees. Wellington argued that the monthlypaid employees already includes holiday pay for
all regular holidays and there is no legal basis for
the finding of alleged non-payment of regular
holidays falling on a Sunday. It further contends
that it pays its monthly paid employees a fixed
monthly compensation using the 314 factor
which undeniably covers and already includes
payment for all the working days in a month as
well as all the 10 un-worked regular holidays
within a year. The Regional Director ordered the
petitioner to pay the employees additional
compensation corresponding to 4 extra working
days. However, the petitioner argued that the
company, using the 314 factor already gave
complete payment of all compensation due to its
workers. Petitioner appealed and was acted on by
the respondent Undersecretary. But still, Regional
Directors decision was affirmed. Hence, this
petition.
Issue: Whether
or
not
a
monthly-paid
employees,
receiving
a
fixed
monthly
compensation, is entitled to an additional pay
aside from his usual holiday pay whenever a
regular holiday falls on a Sunday.
Held: Regional Directors decision, affirmed by
the Undersecretary, is nullified and set aside.

Every worker should be paid his regular daily

wage during regular holidays; except in retail and
service establishments regularly employing less
than 10 workers, even if the worker does not
work on these regular holidays. The Wellington
had been paying its employees a salary of not
less than the statutory minimum wage and that
the monthly salary, thus, paid was not less than
the statutory minimum wage multiplied by 365
days divided by 12. Apparently the monthly
salary was fixed by Wellington to provide for
compensation for every working day of the year
including holidays specified by law and excluding
only Sundays. Wellington leaves no day
unaccounted for, it is paying for all the days of a
year with the exception only of 51 Sundays.

Songco vs. NLRC [G.R. No. L-50999

March 23, 1990]
Facts: Zuellig (M) Inc. filed with the Department
of Labor (Regional Office No. 4) a clearance to
terminate the services of petitioners Jose Songco,
Romeo Cipres and Amancio Manuel due to
alleged financial losses. However, the petitioners
argued that the company is not suffering any
losses and the real reason for their termination
was their membership in the union. At the last
hearing of the case, the petitioner manifested
that they no longer contesting their dismissal,
however, they argued that they should be
granted a separation pay. Each of the petitioners
was receiving a monthly salary of P40, 000.00

plus commissions for every sale they made.

Under the CBA entered by the Zuellig Inc. and
the petitioners, in Article XIV, Section 1(a), Any
employee, who is separated from employment
due to old age, sickness, death or permanent layoff not due to the fault of said employee shall
receive from the company a retirement gratuity
in an amount equivalent to one months salary
per year of service. One month of salary as used
in this paragraph shall be deemed equivalent to
the salary at date of retirement; years of service
shall be deemed equivalent to total service
credits, a fraction of at least six months being
considered one year, including probationary
employment. Other basis for petitioners
contention are Article 284 of the Labor Code with
regards to reduction of personnel and Sections
9(b) and 10 of Rule 1, Book VI of the Rules
Implementing the Labor Code. The Labor Arbiter
rendered his decision directing the company to
pay the complainants separation pay equivalent
to their one month salary (exclusive of
commissions, allowances, etc.) for every year of
service that they have worked with the company.
The petitioners appealed to the NLRC but it was
denied. Petitioner Romeo Cipres filed a Notice of
Voluntary Abandonment and Withdrawal of
petition contending that he had received, to his
full and complete satisfaction, his separation pay.
Hence, this petition.
Issue: Whether or not earned sales commissions
and allowances should be included in the
monthly salary of petitioners for the purpose of

computation of their separation pay.

Held: The petition is granted. Petitioners
contention that in arriving at the correct and
legal amount of separation pay due to them,
whether under the Labor Code or the CBA, their
basic salary, earned sales commissions and
allowances should be added together. Insofar as
whether the allowances should be included in the
monthly salary of petitioners for the purpose of
computation of their separation pay is concerned,
this has been settled in the case of Santos vs.
NLRC, 76721, in the computation of backwages
and separation pay, account must be taken not
only of the basic salary of petitioner but also of
her
transportation
and
emergency
living
allowances. In the issue of whether commission
should be included in the computation of their
separation pay, it is proper to define first
commission. Blacks Law Dictionary defined
commission as the recompensed, compensation
or reward of an agent, salesman, executor,
trustees, receiver, factor, broker or bailee, when
the same is calculated as a percentage on the
amount of his transactions or on the profit to the
principal. The nature of the work of a salesman
and the reason for such type of remuneration for
services rendered demonstrate clearly that the
commission are part of petitioners wage and
salary. Some salesmen do not receive any basic
salary but depend on commission and allowances
or commissions alone, are part of petitioners
wage and salary. Some salesman do not received
any basic salary but depend on commission and

allowances or commissions alone, although an

employer-employee relationship exist. In Soriano
v. NLRC, it is ruled then that, the commissions
also claimed by petitioner (override commission
plus net deposit incentive) are not properly
includible in such base figure since such
commissions must be earned by actual market
transactions attributable to petitioner. Applying
this by analogy, since the commissions in the
present case were earned by actual market
transactions attributable to petitioners, these
should be included in their separation pay. In the
computation thereof, what should be taken into
account is the average commissions earned
during their last year of employment.

State Marine Corporation vs. Cebu

Seamens Association [G.R. No. L12444 February 28, 1963]

Facts: The petitioners were engaged in the

business of marine coastwise transportation.
They had a CBA with the Cebu Seamens
Association. On September 12, 1952, the
respondent union filed a complaint against the
petitioners alleging 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
then to accept the 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 P0.40 for every meal, while the

masters and officers were required to pay their
meals and that because the captain had refused
to yield to the general reduction of salaries, the
petitioners dismissed the captain. The petitioner,
on their defense, stated that they have suffered a
financial losses in the operation of their vessels
and there is no law which provides for the
payment of sick leave or vacation leave to
employees of private firms; that with regards to
their overtime pay, they have always observed
the Eight-hour labor Law and that overtime does
not apply to those who provide means of
transportation. The decision ruled in favor of the
respondent union. Hence, this petition.
Issue: Whether or not the required meals which
the petitioner company deducted from the salary
of the employees is considered as facilities, and
not supplements.
Held: Supplements
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 laborers and his familys
existence and subsistence so that by express
provisions of law, 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 them just the same.
It is argued that the food or meal 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 Section 19 of
the Minimum Wage Law, should not be deducted
from such wages. It was found out that the meals
were freely given to crew members prior to the
effectivity of the Minimum Wage Law 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 members
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 should continue giving the
benefits. Wherefore, the petition is dismissed,
finding out that the meals or food in question are
not facilities but supplements.

Mabeza vs. NLRC [G.R. No. 118506

April 18, 1997]
P

Facts: Petitioner Norma Mabeza and her coemployees at the Hotel Supreme in Baguio City
were asked by the hotels management to sign
an instrument attesting to the latters compliance
with minimum wage and other labor standard
provision. The instrument provides that they
have no complaints against the management of
the Hotel Supreme as they are paid accordingly
and that they are treated well. The petitioner
signed the affidavit but refused to go to the Citys
Prosecutors Office to confirm the veracity and
contents of the affidavit as instructed by
management. That same day, as she refused to

go to the City Prosecutors Office, she was

ordered by the hotel management to turn over
the keys to her living quarters and to remove her
belongings to the hotels premises. She then filed
a leave of absence which was denied by her
employer. She attempted to return to work but
the hotels cashier told her that she should not
report to work and instead continue with her
unofficial leave of absence. Three days after her
attempt to return to work, she filed a complaint
against the management for illegal dismissal
before the Arbitration Branch of the NLRC in
Baguio City. In addition to that, she alleged
underpayment of wages, non-payment of holiday
pay, service incentive leave pay, 13th month
pay, night differential and other benefits. Peter
Ng, in their Answer, argued that her unauthorized
leave of absence from work is the ground for her
dismissal. He even maintained that her alleged of
underpayment and non-payment of benefits had
no legal basis. He raises a new ground of loss of
confidence, which was supported by his filing of
criminal case for the alleged qualified theft of the
petitioner. The Labor Arbiter ruled in favor of the
hotel management on the ground of loss of
confidence. She appealed to the NLRC which
affirmed the Labor Arbiters decision. hence, this
petition.
Issue: Whether or not the dismissal by the
private respondent of petitioner constitutes an
unfair labor practice.
Held: The NLRCs decision is reversed. 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 employees 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
standard provisions of the law when he might not
have, together with the act of terminating or
coercing those who refuse to cooperate with the
employees scheme constitutes unfair labor
practice. The labor arbiters contention that the
reason for the monetary benefits received by the
petitioner between 1981 to 1987 were less than
the minimum wage was because petitioner did
not factor in the meals, lodging, electric
consumption and water she received during the
period of 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 employees ages. First,
proof must be shown that such facilities are
customarily furnished by the trade. Second, the
provision of deductible facilities must be
voluntary accepted in writing by the employee.
Finally, facilities must be charged at fair and
reasonable value. These requirements were not
met in the instant case. Private respondent failed
to present any company policy to show that the

meal and lodging are part of the salary. He also

failed to provide proof of the employees written
authorization and he failed to show how he
arrived at the valuations. More significantly, the
food and lodging, or 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 but
the purpose. Considering, therefore, that hotel
workers are required to work on 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 respondents hotel.

Vinta Maritime Company vs. NLRC

[ G.R. No. 113911 January 23, 1998]
Facts: Leonides Basconsillo, private respondent,
filed a complaint with the Philippine Overseas
Employment Administration IPOEA) for illegal
dismissal against Vinta Maritime Co. Inc. and
Elkano Ship Management, Inc. petitioners alleged
that Leonides was dismissed for his gross
negligence and incompetent performance as
chief engineer of the M/V Boracay. The POEA
ruled that private respondent was illegally
dismissed. On appeal, the NLRC affirmed the
POEA. Likewise, the NLRC denied the motion for
reconsideration. Hence, this petition.
Issue: Whether or not private respondent is

illegally dismissed.
Held: The absence of a valid cause for
termination in this case is apparent. For an
employees dismissal to be valid, 1) the dismissal
must be for a valid cause and 2) the employee
must be afforded due process. Petitioners allege
that private respondent was dismissed because
of his incompetence, enumerating incidents in
proof thereof. However, this is contradicted by
private respondents seamans book which states
that his discharge was due to an emergency
leave. Moreover, his alleged incompetence is
belied by the remarks made by petitioners in the
same book that private respondents services
were highly recommended and that his conduct
and ability were rated very good . Petitioners
allegation that such remark and ratings were
given
to
private
respondent
as
an
accommodation for future employment fails to
persuade. The Court cannot consent to such an
accommodation, even if the allegation were true,
as it is a blatant misrepresentation. It cannot
exculpate
petitioners
based
on
such
misrepresentation. When petitioners issued the
accommodation, they must have known its
possible repercussions.
Due process, the second element for a valid
dismissal, requires notice and hearing. Before the
employee can be dismissed under Art. 282, the
Code requires the service of a written notice
containing a statement of the cause/s of
termination and giving said employee ample
opportunity to be heard and to defend himself. A

notice of termination in writing is further required

if the employees dismissal is decided upon. The
employer must furnish the worker with two
written notices before termination of employment
can be legally effected: (1) notice which apprises
the employee of the particular acts or omissions
for which his dismissal is sought and (2)
subsequent notice which informs the employee of
the employers decision to dismiss. The twin
requirements of notice and hearing constitute the
essential elements of due process, and neither of
these elements can be eliminated without
running afoul of the constitutional guaranty.
Illegally dismissed workers are entitled to the
payment of their salaries corresponding to the
unexpired portion of their employment where the
employment is for a definite period. Conformably,
the administrator and the NLRC properly awarded
private respondent salaries for the period of the
effectivity of his contract.

Millares vs. NLRC [G.R. No. 110524

July 29, 2002]
Facts: Douglas Millares was employed by ESSO
International through its local manning agency,
Trans-Global, in 1968 as a machinist. In 1975, he
was promoted as Chief Engineer which position
he occupied until he opted to retire in 1989. In
1989, petitioner Millares filed a leave of absence
and applied for optional retirement plan under
the Consecutive Enlistment Incentive Plan (CEIP)
considering that he had already rendered more

than twenty years of continuous service. Esso

International denied Millares request for optional
retirement on the following grounds, to wit:
1) he was employed on a contractual basis
2) his contract of enlistment (COE) did not
provide for retirement before the age of sixty
years;
3) he did not comply with the requirement for
claiming benefits under the CEIP, i.e., to submit a
written advice to the company of his intention to
terminate his employment within thirty days from
his last disembarkation date.
Subsequently, after failing to return to work after
the expiration of his leave of absence, Millares
was dropped from the roster of crew members
effective September 1, 1989. On the other hand,
petitioner Lagda was employed by Esso
International as wiper/oiler in 1969. He was
promoted as Chief Engineer in 1980, a position
he continued to occupy until his last COE expired
in 1989. In 1989, Lagda likewise filed a leave of
absence and applied to avail of the optional early
retirement plan in view of his twenty years
continuous service in the company. Trans-global
similarly denied Lagdas request for availment of
the optional early retirement scheme on the
same grounds upon which Millares request was
denied. Unable to return for contractual sea
service after his leave of absence expire, Lagda
was also dropped from the roster of crew
members effective September 1, 1989.
Millares and Lagda filed a complaint-affidavit for
illegal dismissal and non-payment of employee

benefits against private respondents Esso

International and Trans-Global before the POEA.
The POEA rendered a decision dismissing the
complaint for lack of merit. On appeal, NLRC
affirmed the decision of the POEA dismissing the
complaint. NLRC rationcinated that Millares and
Lagda, as seamen and overseas contract workers
are not covered by the term regular
employment as defined under Article 280 of the
Labor Code. The POEA, which is tasked with
protecting the rights of the Filipino workers for
overseas employment to fair and equitable
recruitment and employment practices and to
ensure their welfare, prescribes a standard
employment contract for seamen on board
ocean-going vessels for a fixed period but in no
case to exceed twelve months.
Issue: Whether or not seafarers are considered
regular employees under Article 280 of the Labor
Code
Held: No, It is for the mutual interest of both the
seafarer and the employer why the employment
status must be contractual only or for a certain
period of time. Quoting Brent School Inc. v.
Zamora, 1990, and Pablo Coyoca v. NLRC, 1995,
the Supreme Court ruled that seafarers are
considered contractual employees. They can not
be considered as regular employees under Article
280 of the Labor Code. Their employment is
governed by the contracts they sign everytime
they are rehired and their employment is
terminated when the contract expires. Their
employment is contractually fixed for a certain

period of time. They fall under the exception of

Article 280 whose employment has been fixed for
a specific project or undertaking the completion
or termination of which has been determined at
the time of engagement of the employee or
where the work or services to be performed is
seasonal in nature and the employment is for the
duration of the season.

Ditan vs. POEA Administrator [G.R.

No. 79560 December 3, 1990]
Facts: Andres E. Ditan was recruited by private
respondent Intraco Sales Corporation, through its
local agent, Asia World, the other private
respondent, to work in Angola as a welding
supervisor. The contract was for nine months, at
a monthly salary of US$1,100.00 or US$275.00
weekly, and contained the required standard
stipulations for the protection of our overseas
workers. Arriving on November 30, 1984, in
Luanda, capital of Angola, the petitioner was
assigned as an ordinary welder in the INTRACO
central maintenance shop from December 2 to
25, 1984. On December 26, 1984, he was
informed, to his distress that would be
transferred to Kafunfo, some 350 kilometers east
of Luanda. This was the place where, earlier that
year, the rebels had attacked and kidnapped
expatriate workers, killing two Filipinos in the
raid. Naturally, Ditan was reluctant to go.
However, he was assured by the INTRACO
manager that Kafunfo was safe and adequately

protected by government troops; moreover, he

was told he would be sent home if he refused the
new assignment. In the end, with much
misgiving, he relented and agreed. On December
29, 1984, his fears were confirmed. The Unita
rebels attacked the diamond mining site where
Ditan was working and took him and sixteen
other Filipino hostages, along with other foreign
workers. The rebels and their captives walked
through jungle terrain for 31 days to the Unita
stronghold near the Namibian border. They
trekked for almost a thousand kilometers. They
subsisted on meager fare. Some of them had
diarrhea. Their feet were blistered. It was only on
March 16, 1985, that the hostages were finally
released after the intercession of their
governments and the International Red Cross. Six
days later, Ditan and the other Filipino hostages
were back in the Philippines. The repatriated
workers had been assured by INTRACO that they
would be given priority in re-employment abroad,
and eventually eleven of them were taken back.
Ditan having been excluded, he filed in June 1985
a complaint against the private respondents for
breach of contract and various other claims.
Specifically,
he
sought
the
amount
of
US$4,675.00, representing his salaries for the
unexpired
17
weeks
of
his
contract;
US$25,000.00 as war risk bonus; US$2,196.50 as
the value of his lost belongings; US$1,100 for
unpaid vacation leave; and moral and exemplary
damages in the sum of US$50,000.00, plus
attorney's fees.

All these claims were dismissed by POEA

Administrator Tomas D. Achacoso in a decision
dated January 27, 1987. 2 This was affirmed in
toto by respondent NLRC in a resolution dated
July 14, 1987, 3 which is now being challenged in
this petition.
Issue: Whether or not this case is within NLRC
jurisdictiona and if Ditan is entitled to any relief?
Held: Yes. The fact that stands out most
prominently in the record is the risk to which the
petitioner was subjected when he was assigned,
after his reluctant consent, to the rebel-infested
region of Kafunfo. This was a dangerous area.
The petitioner had gone to that foreign land in
search of a better life that he could share with his
loved ones after his stint abroad. That choice
would have required him to come home emptyhanded to the disappointment of an expectant
family. It is not explained why the petitioner was
not paid for the unexpired portion of his contract
which had 17 more weeks to go. The hostages
were immediately repatriated after their release,
presumably so they could recover from their
ordeal. The promise of INTRACO was that they
would be given priority in re-employment should
their services be needed. In the particular case of
the petitioner, the promise was not fulfilled. It
would seem that his work was terminated, and
not again required, because it was really
intended all along to assign him only to Kafunfo.
The private respondents stress that the contract
Ditan entered into called for his employment in
Angola, without indication of any particular place

of assignment in the country. This meant he

agreed to be assigned to work anywhere in that
country, including Kafunfo. When INTRACO
assigned Ditan to that place in the regular course
of its business, it was merely exercising its rights
under the employment contract that Ditan had
freely entered into. Hence, it is argued, he cannot
now complain that there was a breach of that
contract for which he is entitled to monetary
redress. The private respondents also reject the
claim for war risk bonus and point out that POEA
Memorandum Circular No. 4, issued pursuant to
the mandatory war risk coverage provision in
Section 2, Rule VI, of the POEA Rules and
Regulations
on
Overseas
Employment,
categorizing Angola as a war risk took effect only
on February 6, 1985"after the petitioner's
deployment to Angola on November 27, 1984."
Consequently, the stipulation could not be
applied to the petitioner as it was not supposed
to have a retroactive effect.

PHILSA International Placement &

Services Corporation vs. Honorable
Secretary of Labor and Employment
[G.R. No. 103144 April 4, 2001]
Facts: Philsa is a domestic corporation engaged
in the recruitment of workers for overseas
employment. Sometime in January 1985, private
respondents, who were recruited by petitioner for
employment in Saudi Arabia, were required to
pay placement fees in the amount of P5,000.00
for private respondent Rodrigo L. Mikin and

P6,500.00 each for private respondents Vivencio

A. de Mesa and Cedric P. Leyson. After the
execution of their respective work contracts,
private respondents left for Saudi Arabia on
January 29, 1985. They then began work for AlHejailan Consultants A/E, the foreign principal of
petitioner. While in Saudi Arabia, private
respondents were allegedly made to sign a
second contract which changed some of the
provisions of their original contract resulting in
the reduction of some of their benefits and
privileges. They were again allegedly forced by
their foreign employer to sign a third contract
which increased their work hours from 48 hours
to 60 hours a week without any corresponding
increase in their basic monthly salary. When they
refused to sign this third contract, the services of
private respondents were terminated by AlHejailan and they were repatriated to the
Philippines.
In a decision dated July 26, 1989 , the NLRC
modified the appealed decision of the POEA
Adjudication Office by deleting the award of
salary deductions and differentials. The awards to
private respondents were deleted by the NLRC
considering that these were not raised in the
complaint filed by private respondents. Private
respondents then elevated the July 26, 1989
decision of the NLRC to the Supreme Court in a
petition for review for certiorari where it was
docketed as G.R. No. 89089. However, in a
Resolution dated October 25, 1989, the petition
was dismissed outright for "insufficiency in form

and substance, having failed to comply with the

Rules of Court and Circular No. 1-88 requiring
submission of a certified true copy of the
questioned resolution dated August 23, 1989.
Almost simultaneous with the promulgation of
the August 31, 1988 decision of the POEA on
private respondents' money claims, the POEA
issued a separate Order dated August 29, 1988
resolving the recruitment violations aspect of
private respondents' complaint. In this Order, the
POEA found petitioner guilty of illegal exaction,
contract substitution, and unlawful deduction.
Under the POEA Rules and Regulations, the
decision of the POEA thru the LRO suspending or
canceling a license or authority to act as a
recruitment agency may be appealed to the
Ministry (now Department) of Labor and
Employment. Accordingly, after the denial of its
motion for reconsideration, petitioner appealed
the August 31, 1988 Order to the Secretary of
Labor and Employment. However, in an Order
dated September 13, 1991, public respondent
Secretary of Labor and Employment affirmed in
toto the assailed Order. Petitioner filed a Motion
for Reconsideration but this was likewise denied
in an Order dated November 25, 1991.
Issues:
(1) Whether or not the public respondent has
acted without or in excess of jurisdiction, or with
grave abuse of discretion in holding petitioner
liable for illegal deductions/withholding of
salaries for the supreme court itself has already
absolved petitioner from this charge.

(2) Whether or not the petitioner can be held

liable for illegal exaction as POEA Memorandum
Circular No. 11, Series of 1983, which
enumerated the allowable fees which may be
collected from applicants, is void for lack of
publication.

Held:

(1) Petitioner is correct in stating that the July 26,

1989 Decision of the NLRC has attained finality
by reason of the dismissal of the petition for
certiorari assailing the same. However, the said
NLRC Decision dealt only with the money claims
of private respondents arising from employeremployee relations and illegal dismissal and as
such, it is only for the payment of the said money
claims
that
petitioner is
absolved. The
administrative sanctions, which are distinct and
separate from the money claims of private
respondents, may still be properly imposed by
the POEA. In fact, in the August 31, 1988
Decision of the POEA dealing with the money
claims of private respondents, the POEA
Adjudication Office precisely declared that
"respondent's liability for said money claims is
without prejudice to and independent of its
liabilities for the recruitment violations aspect of
the case which is the subject of a separate
Order."
The fact that petitioner has been absolved by
final judgment for the payment of the money
claim to private respondent de Mesa does not
mean that it is likewise absolved from the

administrative sanctions which may be imposed

as a result of the unlawful deduction or
withholding of private respondents' salary. The
POEA thus committed no grave abuse of
discretion in finding petitioner administratively
liable
of
one
count
of
unlawful
deduction/withholding of salary.

Pacific Asia Overseas Shipping

Corporation vs. NLRC [G.R. No.
76595 May 6, 1988]
Facts: Pacific
Asia
Overseas
Shipping
Corporation (Pascor), petitioner seeks the
annulment and setting aside of the Resolutions of
the public respondent National Labor Relations
Commission (NLRC) dated 14 August 1986 and
19 November 1986, denying Pascor's appeal for
having been filed out of time and denying its
Motion for Reconsideration, respectively. Private
respondent Teodoro Rances sometime in March
1984, was engaged by petitioner Pascor as Radio
Operator of a vessel belonging to Pascor's foreign
principal, the Gulf-East Ship Management
Limited. Four (4) months later, and after having
been transferred from one vessel to another four
times for misbehavior and inability to get along
with officers and crew members of each of the
vessels, the foreign principal terminated the
services of private respondent Rances citing the
latter's poor and incorrigible work attitude and
incitement of others to insubordination. Petitioner
Pascor filed a complaint against private

respondent
with
the
Philippine
Overseas
Employment Administration (POEA) for acts
unbecoming a marine officer and for, character
assassination.
On 4 September 1985, the POEA found private
respondent liable for inciting another officer or
seaman to insubordination and challenging a
superior officer to a fist fight and imposed six (6)
months suspension for each offense or a total of
twelve (12) months suspension, with a warning
that commission of the same or similar offense in
the future would be met with a stiffer disciplinary
sanction. The POEA decision passed over sub
silentio the counterclaim of private respondent.
In its answer filed on 11 December 1985,
petitioner Pascor made four principal arguments:
that the copy of the Dubai decision relied upon
by private respondent could not be considered as
evidence,
not
having
been
properly
authenticated; that Pascor was not a party to the
Dubai court proceedings; that the POEA had no
jurisdiction over cases for the enforcement of
foreign judgments; and that the claim had
already been resolved in POEA, having been
there dismissed as a counterclaim. In a decision
dated 14 April 1986, the POEA held petitioner
Pascor liable to pay private respondent Rances
the amount of US$ 1,500.00 "at the prevailing
rate of exchange at the time of payment." This
decision was served on petitioner's counsel on 18
April 1986, which counsel filed a 'Memorandum
on Appeal and/or Motion for Reconsideration" on
29 April 1986.

Issue: Whether or not POEA denial of petitioner's

appeal and Motion for Reconsideration is within
its jurisdiction in rendering decision of its Orders
dated 14 August and 19 November 1986?
Held: The court conclude that the POEA acted
without or in excess of jurisdiction in rendering its
Decision dated 14 April 1986 and its Order dated
20 May 1986, and that public respondent NLRC
similarly acted without or in excess of jurisdiction
in rendering its Orders dated 14 August 1986 and
19 November 1986 denying petitioner's appeal
and Motion for Reconsideration. This, however, is
without prejudice to the right of respondent
Rances to initiate another proceeding before the
POEA against petitioner Pascor, this time on the
basis alone of the contract of employment which
existed between said respondent and petitioner
or
petitioner's
foreign
principal;
there,
respondent Rances may seek to show that he is
still entitled to the allotments which he claims
were not remitted by his employer to his wife.
ACCORDINGLY, the Petition for certiorari is
GRANTED and the Resolutions of public
respondent NLRC dated 14 August 1986 and 19
November 1986 are hereby NULLIFIED and SET
ASIDE. The Temporary Restraining Order issued
by this Court on 8 December 1986 is hereby
made PERCENT. No pronouncement as to costs.

People vs. Arabia [G.R. No. 13843136 September 12, 2001]

Facts: In October 1992, private complainants

Violeta de la Cruz, Remelyn Jacinto, Teresita

Lorenzo, Rolando Rustia and Noel de la Cruz were

introduced by the latter's mother, private
complainant Pelagia de la Cruz, to appellant
Dioscora Arabia, a recruiter of job applicants for a
factory in Taiwan.
They all saw appellants at Quezon City where the
appellants convinced them and other applicants
to apply for jobs in Taiwan that would give them a
monthly pay. Service fees for processing and
placement, private complainants were told by
appellants Arabia and Tomas, would be P16,
000.00 for each of them.
Each of the private complainants give certain
amount to Arabia at the latter's residence and in
the presence of Tomas. Arabia, however, did not
issue any receipt upon her assurance that she
would not fool them. Various requirements, such
as pictures, passports and bio-data, were
submitted also by private complainants.
However, private complainants were not able to
leave for Taiwan because appellants told them
that the person who was supposed to accompany
them to Taiwan did not arrive. The departure date
was thus reset but private complainants were still
unable to leave.
Private complainants asked for the return of their
money as they were no longer interested in
working abroad. They were informed by Arabia's
sister, however, that appellants were arrested by
the NBI and detained at the Quezon City Jail.
Records also showed that appellants were neither
licensed nor authorized to recruit workers for
overseas employment.

Issue: Whether
the
accused-appellants
committed illegal recruitment in large scale.
Held: Large-scale illegal recruitment has the
following
essential
elements:The
accused
undertook recruitment activity defined under
Article 13 or any prohibited practice under Art. 34
of the Labor Code, he did not have the license or
the authority to lawfully engage in the
recruitment and placement of workers and he
committed the same against three or more
persons, individually or as a group.
These essential elements are present in this
case. Accused-appellants recruited at least four
persons, giving them the impression that they
had the capability to send them to Taiwan for
employment. They collected various amounts
allegedly for recruitment and placement fees
without license or authority to do so. It is settled
that the fact that an accused in an illegal
recruitment case did not issue the receipts for
amounts received from the complainants has no
bearing on his culpability so long as complainants
show through their respective testimonies and
affidavits that the accused was involved in the
prohibited recruitment. Thus, the accusedappellants were guilty of illegal recruitment in
large scale.

People vs. Sagaydo [G.R. No.

124671-75 September 29, 2000]
Facts: Accused Linda Sagayado was convicted
before the regional trial court of illegal

recruitment in large scale and fur charges of

estafa. Complainants Gina Cleto, Rogelio Tebeb,
Nata Pita and Jessie Bolinao recounted that the
accused Sagayado propsed and encourage them
for employment abroad in Korea. Complainants
gave their respective payments to the accused
for the processing of their travel papers and
passport. They were assured of their flight and of
employment abroad. However, months have
passed but their flight never pushed through.
They then inquired at the Baguio POEA office
whether the accused was a license recruiter to
which they receive certification that the accused
was not a license recruiter.
In her defense, the accused denied having
recruited any of the private complainants. She
claimed that they came to her voluntarily after
being informed that she was able to send her
three (3) sons to Korea. While accused admitted
having received money from complainants Gina
Cleto and Naty Pita, she said she used their
money to buy their plane tickets. Gina and Naty
were not able to leave because the Korean
government imposed a visa requirement
beginning January, 1992. When asked why she
was not able to return the money of Gina and
Naty, accused said that she returned the plane
tickets to the Tour Master travel Agency for
refund but said agency did not make
reimbursements. With respect to complainants
Jessie Bolinao and Rogelio Tibeb, the accused
denied having received money from them.
Issue: Whether or not the accused is guilty of

illegal recruitment in large scale.

Held: Yes,
Illegal
recruitment
is
deemed
committed in large scale if committed against
three or more person, individually or as a group.
This crime requires proof that the accused: (1)
engaged in the recruitment and placement of
workers defined under Article 13 or in any of the
prohibited activities under Article 34 of the Labor
Code; (2) does not have a license or authority to
lawfully engage in the recruitment and
placement of workers; and (3) committed the
infraction against three or more persons,
individually or as a group.
All the requisites are present in this case. The
accused
representations
to
the
private
complainants that she could send them to Korea
to work as factory workers, constituting a
promise of employment which amounted to
recruitment as defined under Article 13(b) of the
Labor Code. From the testimonies of the private
complainants, there is no denying that accused
gave the complainants the distinct impression
that she had the power or ability to send them
abroad for work such that the latter were
convinced to part with their money in order to be
employed. As against the positive and categorical
testimonies of the complainants, mere denial of
accused cannot prevail. As to the license
requirement, the record showed that accusedappellant did not have the authority to recruit for
employment abroad as the certification issued by
the POEA in Baguio City.

People vs. Chowdury [G.R.

129577-80 February 15, 2000]

No.

Facts: Bulu Chowdury was charged with the

crime of illegal recruitment in large scale by
recruiting Estrella B. Calleja, Melvin C. Miranda
and Aser S. Sasis for employment in Korea.
Evidence
shows
that
accused
appellant
interviewed private complainant in 1994 at
Craftrades office. At that time, he was an
interviewer of Craftrade which was operating
under temporary authority given by POEA
pending the renewal of license. He was charged
based on the fact that he was not registered with
the POEA as employee of Craftrade and he is not
in his personal capacity, licensed to recruit
overseas workers. The complainants also averred
that during their applications for employment for
abroad, the license of Craftrade was already
expired.
For his defense Chowdury testified that he
worked as interviewer at Craftrade from 1990
until 1994. His primary duty was to interview job
applicants for abroad. As a mere employee, he
only followed the instructions given by his
superiors, Mr. Emmanuel Geslani, the agency's
President and General Manager, and Mr.
UtkalChowdury, the agency's Managing Director.
Issue: Whether
or
not
accused-appellant
knowingly and intentionally participated in the
commission of the crime charged.
Held: No, an employee of a company or
corporation engaged in illegal recruitment may

be held liable as principal, together with his

employer, if it is shown that he actively and
consciously participated in illegal recruitment. In
this case, Chowdury merely performed his tasks
under the supervision of its president and
managing director. The prosecution failed to
show that the accused-appellant is conscious and
has an active participation in the commission of
the crime of illegal recruitment. Moreover,
accused-appellant was not aware of Craftrade's
failure to register his name with the POEA and
the prosecution failed to prove that he actively
engaged in recruitment despite this knowledge.
The obligation to register its personnel with the
POEA belongs to the officers of the agency. A
mere employee of the agency cannot be
expected to know the legal requirements for its
operation. The accused-appellant carried out his
duties as interviewer of Craftrade believing that
the agency was duly licensed by the POEA and
he, in turn, was duly authorized by his agency to
deal with the applicants in its behalf. Accusedappellant in fact confined his actions to his job
description. He merely interviewed the applicants
and informed them of the requirements for
deployment but he never received money from
them. Chowdury did not knowingly and
intentionally participated in the commission of
illegal recruitment being merely performing his
task and unaware of illegality of recruitment.

Facilities Management Corporation

vs. Dela Rosa [G.R. No. L-38649

March 26, 1979]

Facts: Leonardo
dela
Rosa
sought
his
reinstatement. with full backwages, as well as the
recovery of his overtime compensation, swing
shift and graveyard shift differentials. Petitioner
alleged that he was employed by respondents as,
painter, houseboy and cashier. He further averred
that from December, 1965 to August, 1966,
inclusive, he rendered overtime services daily
and that this entire period was divided into swing
and graveyard shifts to which he was assigned,
but he was not paid both overtime and night shift
premiums despite his repeated demands from
respondents.
The petitioner, a foreign corporation domiciled
outside the Philippines was ordered by CIR then
to pay the unpaid overtime and premium pay.
However, on certiorari, the petitioner contended
that because it was domiciled outside and not
doing business in Philippines, it could not be sued
in the country.
Issue: Whether or not petitioner has been doing
business in the Philippines so that the service of
summons upon its agent in the Philippines vested
the Court of First Instance of Manila with
jurisdiction.
Held: Yes, the object of Sections 68 and 69 of the
Corporation Law was not to prevent the foreign
corporation from performing single acts, but to
prevent it from acquiring a domicile for the
purpose of business without taking the steps

necessary to render it amenable to suit in the

local courts. It was never the purpose of the
Legislature to exclude a foreign corporation
which happens to obtain an isolated order for
business from the Philippines, from securing
redress in the Philippine courts.
Indeed, if a foreign corporation, not engaged in
business in the Philippines, is not banned from
seeking redress from courts in the Philippines, a
fortiori, that same corporation cannot claim
exemption from being sued in Philippine courts
for acts done against a person or persons in the
Philippines.

Royal Crowne International vs.

NLRC [G.R. No. 78085 October 16,
1989]

Facts: Petitioner, a duly licensed private

employment agency, recruited and deployed
private respondent Virgilio for employment with
ZAMEL as an architectural draftsman in Saudi
Arabia. Service agreement was executed by
private respondent and ZAMEL whereby the
former was to receive per month a salary of
US$500.00 plus US$100.00 as allowance for a
period of one year commencing from the date of
his arrival in Saudi Arabia. However, ZAMEL
terminated
the
employment
of
private
respondent on the ground that his performance
was below par. For three successive days
thereafter, he was detained at his quarters and
was not allowed to report to work until his exit

papers were ready. On February 16, 1984, he

was made to board a plane bound for the
Philippines. Private respondent then filed a
complaint
for
illegal
termination
against
Petitioner Royal Crown Internationale and ZAMEL
with the POEA.
Petitioner contends that there is no provision in
the Labor Code, or the omnibus rules
implementing the same, which either provides for
the "third-party liability" of an employment
agency or recruiting entity for violations of an
employment agreement performed abroad, or
designates it as the agent of the foreign-based
employer for purposes of enforcing against the
latter claims arising out of an employment
agreement. Therefore, petitioner concludes, it
cannot be held jointly and severally liable with
ZAMEL for violations, if any, of private
respondent's service agreement.
Issue: Whether or not petitioner as a private
employment agency may be held jointly and
severally liable with the foreign-based employer
for any claim which may arise in connection with
the implementation of the employment contracts
of the employees recruited and deployed
abroad.
Held: Yes, Petitioner conveniently overlooks the
fact that it had voluntarily assumed solidary
liability
under
the
various
contractual
undertakings it submitted to the Bureau of
Employment Services. In applying for its license
to operate a private employment agency for
overseas recruitment and placement, petitioner

was required to submit, among others, a

document or verified undertaking whereby it
assumed all responsibilities for the proper use of
its license and the implementation of the
contracts of employment with the workers it
recruited
and
deployed
for
overseas
employment. It was also required to file with the
Bureau a formal appointment or agency contract
executed by the foreign-based employer in its
favor to recruit and hire personnel for the former,
which contained a provision empowering it to sue
and be sued jointly and solidarily with the foreign
principal for any of the violations of the
recruitment agreement and the contracts of
employment. Petitioner was required as well to
post such cash and surety bonds as determined
by the Secretary of Labor to guarantee
compliance
with
prescribed
recruitment
procedures, rules and regulations, and terms and
conditions of employment as appropriate.
These contractual undertakings constitute the
legal basis for holding petitioner, and other
private employment or recruitment agencies,
liable jointly and severally with its principal, the
foreign-based employer, for all claims filed by
recruited workers which may arise in connection
with the implementation of the service
agreements or employment contracts.

Manila Terminal Company, Inc. vs.

Court Of Industrial Relations
Facts: On September 1, 1945, Herein petitioner

undertook the arrastre service in some of the

piers in Manilas Port Area at the request and
under the control of the U.S. Army. Petitioner
hired some 30 men as watchmen on 12 hour
shifts at a compensation of P3.00 per day for the
day shift and P6.00 per day for the night shift. On
February 1, 1946, the petitioner began the
postwar operation of the arrastre service at the
present at the request and under the control of
the Bureau of Customs, by virtue of a contract
entered into with Philippine Government. The
watchmen of the petitioner continued in the
service with a number of substitution and
additions, their salaries having been raised
during the month of February to P4.00 per day
for the dayshift and P6.25 per d
Later, some of the members of the Manila
Terminal Relief and Mutual Aid Association, sent a
letter to the Department of Labor, requesting
that the overtime pay be investigated, but
nothing was done by the Department. On May
27, 1947 the petitioner instituted the system of
strict 8 hour shifts. On July 28, 1947 Manila Aid
Association filed an amended petition with the
Court of Industrial Relations praying, among
others, that petitioner be ordered to pay its
watchmen or police force overtime pay from the
commencement of their employment.
The case thereafter alleviated in which Judge
Lanting ruled;
1.) The decision under review should be affirmed
in so far it grants compensation for overtime on
regular days during the period from the date of

entrance to duty to May 24, 1947, such

compensation to consist of the amount that
corresponds to the four hours overtime at the
regular rate and an additional amount of 25 per
cent thereof.
2.) As the compensation for work done on
Sundays and legal holidays, the petitioner should
pay its watchmen the compensation that
corresponds to the overtime (in excess of 8
hours) at the regular rate only.
3.) The watchmen are not entitled to night
differential pay for past service, and therefore the
decision should be reversed.
Hence, this petition, contending that the
agreement under which its police force were paid
certain specific wages for 12 hour shifts, included
overtime compensation.
Issue: Whether or not the agreement under
which its police force were paid certain specific
wages for 12 hour shifts, includes the overtime
compensation?
Held: No. The Court ruled that in times of acute
employment, regardless of its terms and
conditions, their main concern in the first place
being admission to some work. The petitioners
watchmen must have railroaded themselves into
their employment for their subsistence, although
they found themselves required to work for 12
hours a day. True, there was agreement to work,
but it cannot fairly be supposed that they had the
freedom to bargain in any way, much less to
insist in the observance of the 8 hour labor law.
Also, there was no reduction was made in the

salaries which its watchmen received under the

12 hour arrangement. Although, it may be
argued that the salary for the night shift was
lessened, the fact that the rate for the day shift
was increased in a sense tends to militate
against the contention that the salaries given
during the 12 hour shifts included overtime
compensation.
The law gives the Association the right to extra
compensation. And they could not be held to
have impliedly waived such extra compensation,
for the obvious reason that could not have
expressly waived it.
It is high time that all employers were warned
that the public is interested in the strict
enforcement of the Eight Hour Labor Law. This
was designed not only to safeguard the health
and welfare of the laborer or employee, but in a
way to minimize unemployment by forcing
employers, in cases where more than 8 hour
operation is necessary, to utilize different shifts
of laborers or employees working only for 8 hour
each.
The appealed decision, in the form voted by
Judge Lanting, is affirmed, it being understood
that the petitioners watchmen will be entitled to
extra compensation only from the dates they
respectively entered the service of the petitioner.

Luzon Stevedoring Co., Inc. vs.

Luzon Marine Department Union
Facts: Petition for review on certiorari in the

resolution of the Court of Industrial Relations.

Herein respondents filed a petition with the CIR
containing the full recognition of the right of
Collective bargaining, close shop and check off.
Also, that the work performed in excess of 8
hours be paid an overtime pay of 50 per cent the
regular rate of pay, and that work performed on
Sundays and legal holidays be paid double the
regular rate of pay. In one of the hearing of the
case, the Court ruled that the employees are only
entitled to receive overtime pay for work
rendered in excess of 8 hours on ordinary days
including Sundays and legal holidays. Herein
petitioner sought for the reconsideration of the
decision only in so far as it interpreted that the
period during which a seaman is aboard a
tugboat shall be considered as working time for
the purpose of the 8 hours Labor Law.
However, it was denied. Hence, this petition.
Issue: Whether or not the definition for hours of
work as presently applied to dry land laborers
equally applicable to seaman
Held: No. The Court ruled that we do not need to
set for seaman a criterion different from that
applied to laborers on land, that the only thing to
be done is to determine the meaning and scope
of the term working place. A laborer need not
leave the premises of the factory, shop or boat in
order that his period of rest shall not be counted,
it being enough that he cease to work may rest
completely and leave or may leave at his will the
spot where he actually stays while working, to go
somewhere else, whether within or outside the

premises of said factory, shop or boat. If these

requires are complied with, the period of such
rest shall not be counted. Claimants rendered
services to the Company from 6am to 6pm
including Sundays and holidays, which implies
either that said laborers were not given any
recess at all, or that they were not allowed to
leave the spot their working place, or that they
could not rest completely. Resolutions of the
Court of Industrial Relations appealed from are
affirmed with costs against petitioner.

National
Shipyards
And
Steel
Corporation vs. Court of Industrial
Relations
Facts: Petition for review by certiorari of the
orders of the Court of Industrial relations
requiring it to pay its bargeman, Malondras, an
overtime service of 16 hours a day for a period
from January 1, 1954 - December 31, 1956, and
from January 1, 1957 to April 30, 1957, inclusive.
NASSOO, engaged in the business of ship
building and repair that needs a service of a
bargeman. Bargeman are required to stay in their
barges for on call duty, so they are given living
quarters and subsistence allowance of P1.50 per
day during the time they are on board. However,
Malondras filed with the Industrial Court a
complaint for the payment of overtime
compensation because of his exclusion from the
second report of the examiner. The examiner
then submitted an amended report giving

Malondras an average of 16 overtime hours a

day, and recommending the payment to him of
P15, 242.15 as overtime compensation during
the period covered by the report. Hence, this
petition.
Issue: Whether or not respondent Malondras is
entitled to 16 hours a day overtime pay
Held: No. The Court ruled that the correct
criterions in determining whether or not sailors
are entitled to overtime pay is not whether they
were on board and cannot leave ship beyond the
regular eight working hours a day, but whether
they actually rendered service in excess of said
number of hours; In such much as the parties
show that the subsistence allowance is
independent of and has nothing to do with
whatever additional compensation for overtime
work was due the petitioner, the same should not
be deducted from his overtime compensation.
Respondent Malondras should be credited (5)
overtime hours instead of (16) hours a day for
the periods covered by the examiners report.
Order appealed is affirmed with modifications.

Sime Darby Pilipinas vs. NLRC [G.R.

No. 119205, April 15, 1998]
Facts: Petitioner is engaged
of automotive tires, tubes
products. Private respondent
monthly salaried employees
Marikina factory. Beforehand,
workers in Marikina including

in the manufacture
and other rubber
is an association of
of petitioner at its
all company factory
members of private

respondent union worked from 7:45am to 3:45pm

with a 30-minute paid on call lunch break.
Petitioner issued a memorandum to all factorybased employees advising all its monthly salaried
employees in its Marikina Tire Plant, except those
in the Warehouse and Quality Assurance
Department working on shifts.
Private respondent felt affected adversely by the
change in the work schedule and discontinuance
of the 30-minute paid on call lunch break,
hence the filling of complaint for unfair labor
practice, discrimination and evasion of liability.
The Labor Article dismissed the complainant on
the ground that the change in the work schedule
and the elimination of the 30-minute paid lunch
break of factory workers constituted a valid
exercise of management prerogative and did not
decrease the benefits granted to factory workers
as the working time did not go beyond 8 hours.
Hence, this petition.
Issue: Whether or not there was a diminution of
benefits when the 30-minute paid lunch break
was eliminated
Held: The right to fix the work, schedules of the
employees rests principally on their employer.
The petitioner cities as reason for the adjustment
the efficient conduct of its business operations
and its improved production. Since the
employees are no longer required during this
one-hour lunch break, there is no more need for
them to be compensated for this period. The new
work schedule fully complies with the daily work
period of eight (8) hours without violating the

Labor Code. Also, the new schedule applies to all

employees in the factory similarly situated
whether they are union members or not; Even as
the law is solicitous of the welfare of the
employees; it must also protect the right of an
employer
to
exercise
what
are
clearly
management prerogatives; Management retains
the prerogative, whenever exigencies of the
service so require, to change the working hours
of its employees Petition is granted. The
dismissed complaint against petitioner for unfair
labor practice is affirmed.

Mercury Drug Coproration vs. NLRC

(G.R. No. 75662)
Facts: Cesar Ladisla was employed by petitioner,
Mercury Drug Corporation as Stock Analyst. On
Aug. 15, 1977, he was apprehended by
representatives of Mercury Drug Corporation
while in the act of pilfering company property. He
admitted
the
guilt
to
the
investigating
representatives. Mercury drug filed an application
for the termination of Ladislas employment.
Private respondent opposed the aforesaid
application for clearance to terminate his
services alleging among others, that his
suspension and proposed dismissal were
unfounded and baseless being premised on the
machinations and incriminatory acts of Ms.
Leonora Suarez and Edgardo Imperial, Manager
and Retail Supervisor, respectively, of petitioner's
Claro M. Recto Branch; and that he was not given

the opportunity to be heard nor allowed to

explain his side before he was summarily
suspended.
However, NLRC ruled that Ladisla should be
reinstated in his former position with full back
wages.
Issue: Whether or not Cesar Ladisla should be
dismissed on the grounds of dishonesty and
breach of contract
Held: Dismissal of a dishonest employee is to
the best interest not only of management but
also of labor. As a measure of self-protection
against acts inimical to its interest, a company
has the right to dismiss its erring employees. An
employer cannot be compelled to continue in
employment an employee guilty of acts inimical
to its interest, justifying loss of confidence in him.
The law does not impose unjust situations on
either labor or management.
While the constitution is committed to the policy
of social justice and the protection of laborers, it
should not be supposed that labor dispute will be
automatically decided in favor of labor.
Management has also its own rights which are
the enforcement of interest of simple fair play.

Hilario vs. NLRC (G.R. No. 119583)

Facts: Petitioner was hired by private respondent

Reynolds Philippines, Inc. (Reynolds) through the
Bob Garon Consultancy, Inc. as personnel
manager of its Cavite plant on December 1,
1984. Sometime in June 1985 he was transferred
to the Head Office to handle various legal

matters. On November 29, 1985, petitioner was

handed a letter by Reynolds personnel informing
him that the company had been incurring
financial losses and as a result, his employment
would be terminated on the ground of
retrenchment, effective January 1, 1986. On
December 5, 1985 petitioner filed a complaint for
illegal dismissal with prayer for reinstatement,
back wages and damages with Labor Arbiter
Nambi.
Issues:
(1) Whether or not the petitioner is entitled to the
payment of back wages for three (3) years from
January 1, 1986 to January 1, 1989 without
deduction and qualification.
(2) Whether or not the petitioner is entitled to
reinstatement.
Held:
(1) Yes. We agree with petitioner that he is
entitled to the payment of back wages for three
(3) years from January 1, 1986 to January 1, 1989
without deduction and qualification. The payment
of back wages is a normal consequence of a
finding that an employee has been illegally
dismissed. Prior to the amendment introduced by
Section 34 of Republic Act No. 6715 to Article 279
of the Labor Code on March 21, 1989, the award
of back wages to an illegally dismissed employee
was limited to a three-year period, without
modification or deduction, following the doctrine
laid down in Mercury Drug Co. Inc. v. Court of
Industrial Relations as refined by Feati University
Faculty Club v. Feati University. Although Republic

Act No. 6715 amended the Labor Code by

providing that an illegally dismissed employee is
entitled to full back wages, inclusive of
allowance, and to his other benefits or their
monetary equivalent computed from the time his
compensation was withheld from him up to the
time of his actual reinstatement, we have ruled
that this amendment has no retroactive effect,
such that the award of back wages to an
employee whose illegal dismissal occurred before
March 21, 1989, such as petitioner herein, is
limited to three (3) years without deduction or
qualification. Petitioner should likewise be paid
his unpaid salary for December 1985, as well as
his Christmas bonus. The rest of petitioner's
money claims have no legal basis.
(2) No. To order the same at this juncture would
no longer serve any logical purpose. As we have
observed in previous cases, if the relationship
between employer and employee has been
unduly strained by reason of their respective
imputations of bad faith to each other, as is quite
evident from the vehement and consistent stand
of private respondent in refusing to reinstate
petitioner, it would be prudent not to order the
same. This is particularly true in cases where the
illegally dismissed employee holds a managerial
or key position, such as petitioner used to hold,
where he can only work effectively if he enjoys
the full trust and confidence of top management.
Inasmuch as reinstatement is no longer feasible,
respondent company is ordered to pay petitioner
separation pay equivalent to one month's salary

for his roughly one year's service.

Colgate-Palmolive Philippines, Inc.

vs. Ople (163 SCRA 323)

Facts: Before us is a Petition for Certiorari

seeking to set aside and annul the Order of
respondent Minister of Labor and Employment
(MOLE) directly certifying private respondent as
the recognized and duly-authorized collective
bargaining agent for petitioner's sales force and
ordering the reinstatement of three employees of
petitioner.
The respondent Union, on the other hand,
reiterated the issue in its Notice to Strike,
alleging that it was duly registered with the
Bureau of Labor Relations with a total
membership of 87 regular salesmen (nationwide)
out of 117 regular salesmen presently employed
by the company as of November 30, 1985. In
addition, it stated that since the registration of
the Union up to the present, more than 213 of
the total salesmen employed are already
members of the Union, leaving no doubt that the
true sentiment of the salesmen was to form and
organize the Colgate Palmolive Salesmen Union.
The Union further alleged that the company is
unreasonably delaying the recognition of the
union because when it was informed of the
organization of the union, and when it was
presented with a set of proposals for a collective
bargaining agreement, the company took an
adversarial stance by secretly distributing a

"survey sheet on union membership" to newly

hired salesmen from the Visayas, Mindanao and
Metro Manila areas. Moreover, District Sales
Managers and Sales Supervisors coerced
salesmen from the Visayas and Mindanao by
requiring them to fill up and/or accomplish said
form by checking answers which were adverse to
the union; that with a handful of the survey
sheets secured by management through
coercion, it now would like to claim that all
salesmen are not in favor of the organization of
the union, which acts are clear manifestations of
unfair labor practices.
Issue: Whether or not the employer can be
compelled to continue with the employment of a
person who is guilty of misfeasance towards his
employer.
Held: No. The order of the respondent Minister to
reinstate the employees despite a clear finding of
guilt on their part is not in conformity with law.
Reinstatement is simply incompatible with a
finding of guilt. Where the totality of the evidence
was sufficient to warrant the dismissal of the
employees the law warrants their dismissal
without making any distinction between a first
offender and a habitual delinquent. Under the
law, the respondent Minister is duly mandated to
equally protect and respect not only the labor or
workers' side but also the management and/or
employers' side. The law, in protecting the rights
of the laborer, authorizes neither oppression nor
self-destruction of the employer. To order the
reinstatement of the erring employees namely,

Mejia, Sayson and Reynante would in effect

encourage unequal protection of the laws as a
managerial employee of the petitioner company
involved in the same incident which was already
dismissed and was not ordered to be reinstated.
As stated in the case of San Miguel Brewery vs.
National Labor Union, "an employer cannot
legally be compelled to continue with the
employment of a person who admittedly was
guilty of misfeasance or malfeasance towards his
employer, and whose continuance in the service
of the latter is patently inimical to his interest.

Century Textile Mills Inc. vs. NLRC

(161 SCRA 528)
Facts: According to Rodolfo Marin (a factory coworker of private respondent Calangi), at around
12:15 AM on June 4, 1983 and within company
premises, he chanced upon Gatchie Torrena (a
machine operator at petitioner's factory) and
noticed the latter mixing some substance with
the drinking water contained in a pitcher from
which Meliton and Santos regularly drank. Before
anyone could take a drink from the pitcher, Marin
reported what he had observed to Meliton who, in
turn, informed Santos of the same. Soon after,
Meliton and Santos took possession of the pitcher
of water and filed a formal report of the incident
with company management. The contents of the
pitcher were subsequently analyzed by chemists
at the Philippine Constabulary Crime Laboratory
at Camp Crame, Quezon City who found the

presence of a toxic chemical (formaldehyde)

therein.
On October 11, 1983, private respondent Calangi
filed a Complaint for illegal dismissal with the
Arbitration Branch, National Capital Region, of
the then Ministry of Labor and Employment.
Among other things, private respondent alleged
in his complaint that prior to his preventive
suspension, neither the company nor any of its
officers furnished him with a copy of their
charges, nor afforded him the opportunity to
answer the same and defend himself.
In a Decision dated August 16, 1984, the Labor
Arbiter dismissed the private respondents
complaint. The Labor Arbiter found that not only
was the evidence against private respondent
Calangi overwhelming and sufficient enough to
justify his dismissal, but that the private
respondent failed inexplicably to deny or
controvert the charges against him.
Issue: Whether or not reinstatement is always
available.
Held: No. In view of the finding of the illegal
dismissal in this case, petitioner Corporation is
liable to private respondent Calangi for payment
of the latter's back wages for three years,
without qualification and deduction. Considering
the circumstances, however, the Court believes
that reinstatement of private respondent to his
former position--or to any other equivalent
position in the company will not serve the both
interests of the parties involved. Petitioner
Corporation should not be compelled to take back

into fold an employee who, at least in the minds

of his employers, poses a significant threat to the
lives
and
safety
of
company
workers.
Consequently, we hold that private respondent
should be given his separation pay in lieu of such
reinstatement. The amount of separation pay
shall be equivalent to the private respondent's
one-half month's salary for every year of service,
to be computed from December 13, 1974 (date
of first employment) until June 10, 1986 (three
years after date of illegal dismissal).

De Leon vs. NLRC (100 SCRA 691)

Facts: The petitioner started working with said

corporation as a messenger way back in 1949.
He held various positions therein, such as
bookkeeper,
accountant,
general
office
supervisor and Assistant-Manager. He then rose
to the position as Assistant Vice PresidentManager (Makati Office) in 1913 and held it
continuously up to 1977. Prior to his dismissal, he
was in the service for more than 28 years.
In October 1976, the petitioner was sent to Korea
on an official business for the respondent
corporation. Before that, the respondent Alfredo
Benedicto, president and general manager of the
corporation, verbally intimated to petitioner that
the latter would soon be appointed as Assistant
Vice President for Finance, preparatory to his
assuming the position of Vice President for
Finance upon the resignation of the then
incumbent. In early November 1976, petitioner
was instructed to attend the staff meeting at

Bacolod every second and fourth Tuesdays of

every month starting January 1977.
The petitioner alleged that he had not at any
time or in any manner applied for retirement and
that the requirement of due process was not
observed, thus making his dismissal illegal and
unjustified. Also, he stated that the respondents
did not explain to him any cause or reason for his
dismissal, that no specific charges were made
against him and no formal investigation was
conducted to afford him opportunity to acquit
himself of any charges. Finally, the money
offered by the corporation does not constitute
estoppel or waiver on his part, considering that
his acceptance was without prejudice to all his
rights resulting from his illegal dismissal.
Issue: Whether or not the acceptance of
separation pay is a bar to contesting the legality
of dismissal.
Held: No. The contention of respondents that
petitioner is barred from contesting the illegality
of his dismissal since he has already received his
separation pay cannot be sustained. Since he
was forced to retire, he suddenly found himself
jobless with a family of eight (8) children to
support. He had no alternative but to accept
what was offered to him; he needed money to
support his family. He had to grab whatever was
offered as he accepted less than what was
offered to show his non-acquiescence to what
amounted to dismissal.
Employees who received their separation pay are
not barred from contesting the legality of their

dismissal. The acceptance of those benefits

would not amount to estoppels. Having been
illegally dismissed, the petitioner is entitled to
reinstatement with back wages corresponding to
a period of three (3) years without qualification
minus the amount of P26, 492. 63 he was forced
to receive as retirement gratuity pay.

Villar vs. Inciong

Facts: AEU under FUR attempted to have a

certification election but due to the opposition of
AEU-PAFLU, the petition was denied by the MedArbiter.
AEU-PAFLU then called a special meeting among
members and it was there decided that an
investigation of certain people would be held
pursuant to the constitution and by-laws of the
Federation, of all of the petitioners and one Felipe
Manlapao, for "continuously maligning, libelling
and slandering not only the incumbent officers
but even the union itself and the federation;"
spreading 'false propaganda' that the union
officers were 'merely appointees of the
management', and for causing divisiveness in the
union.
A Trial Committee was then formed to investigate
the local union's charges against the petitioners
for acts of disloyalty. AEU-PAFLU and the
Company concluded a new CBA which, besides
granting additional benefits to the workers, also
reincorporated the same provisions of the
existing CBA, including the union security clause
reading, to wit:

All members of the UNION as of the signing of

this Agreement shall remain members thereof in
good standing. Therefore, any members who
shall resign, be expelled, or shall in any manner
cease to be a member of the UNION, shall be
dismissed from his employment upon written
request of the UNION to the Company. 2
The petitioners were summoned to appear before
the PAFLU Trial Committee for the aforestated
investigation of the charges filed against them
but they did not attend and instead requested for
a "Bill of Particulars" of the charges which had
been formalized by the AEU-PAFLU officers; they
contend that their actions were merely exerise of
the right to freedom of association.
Issue: Whether or not the Minister acted with
grave abuse of discretion when he affirmed the
decision of the RO4-Officer-in-Charge allowing
the preventive suspension and subsequent
dismissal of petitioners by reason of the exercise
of their right to freedom of association.
Held: It is true that disaffiliation from a labor
union is not open to legal objection. It is implicit
in the freedom of association ordained by the
Constitution. However, a closed shop is a valid
form of union security, and such provision in a
CBA is not a restriction of the right of freedom of
association guaranteed by the Constitution.
Here, the Company and the AEU-PAFLU entered
into a CBA with a union security clause and the
stipulation for closed-shop is clear and
unequivocal and it leaves no room for doubt that
the employer is bound, under the collective

bargaining agreement, to dismiss the employees,

herein petitioners, for non-union membership.
Recognized and salutary is the principle that
when a labor union affiliates with a mother union,
it becomes bound by the laws and regulations of
the parent organization.
When a labor union affiliates with a parent
organization or mother union, or accepts a
charter from a superior body, it becomes subject
to the laws of the superior body under whose
authority the local union functions. The
constitution, by-laws and rules of the parent
body, together with the charter it issues pursuant
thereto to the subordinate union, constitute an
enforceable contract between the parent body
and the subordinate union, and between the
members of the subordinate union inter se.

Diamonon vs. DOLE

Facts: Diamonon was National EVP of NACUSIP

and VP of PACIWU (both unions) and he was
removed from both unions in a resolution
approved during a meeting. He sought
reconsideration and filed two complaintsagainst
private respondent Atty. Zoilo V. de la Cruz, Jr.,
and the National Treasurer of NACUSIP and
PACIWU,Sofia P. Mana-ay. He accused them of
three (3) offenses, the last being abuse of
authority
as
national
officers
of
both
organizations.
On the first case, his removal was held to be null
and void; and the second case was dismissed on
the ground that Petitioner lacked legal

personality to file complaint in view of this

removal from those positions he previously held.
He appealed to the public respondent DOLE and
Laguesma, issued the assailed Order, holding
that petitioner's failure to show in his complaint
that the administrative remedies provided for in
the constitution and by-laws of both unions, have
been exhausted or such remedies are not
available, was fatal to petitioner's cause.
Issue: Whether or not non-exhaustion of
administrative remedies were indeed fatal to his
cause.
Held: Petitioner emphatically stresses that the
only issue on appeal before the DOLE was
petitioner's alleged lack of personality to file the
complaint. When public respondent "switched"
the ground for dismissal of the complaint from
"lack of personality of the [petitioner] to file the
complaint" to "non-exhaustion of administrative
remedies," he staunchly claims that the latter
committed grave abuse of discretion amounting
to lack or excess of jurisdiction. For, in doing so,
the challenged orders "went outside the issues
and purported to adjudicate something upon
which the parties were not heard." The petition
lacks merit.

Cebu Seaman's
Ferrer-Calleja

Association

vs.

Facts: A group of deck officers and marine

engineers
organized
themselves
into
an
association and registered the same as a non-

stock corporation known as Cebu Seaman's

Association, Inc. (CSAI) with the Securities and
Exchange Commission (SEC). The same group
subsequently registered its association with the
Bureau of Labor Relations as a labor union known
as the Seamen's Association of the Philippines,
Incorporated (SAPI).
SAPI has an existing collective bargaining
agreement
(CBA)
with
Aboitiz
Shipping
Corporation which remitted checked-off dues to
SAPI. Later on, a group of union members headed
by Manuel Gabayoyo claimed that they are
entitled to the custody of the union dues because
they were elected as the new set of officers
under the supervision of SEC. Another group
headed by Dominica Nacua, claiming that they
were the duly elected set of officers of the union
and therefore entitled to the union dues, filed a
complaint to restrain the group of Gabayoyo from
representing the union. CSAI represented by the
Gabayoyo group, however, claimed that since
Nacua was already expelled as officer/member,
she has no personality to represent the union.
Issue: Whether or not Seamen's Association of
the Philippines is a legitimate labor organization,
and therefore entitled to the custody of the union
dues
Held: No. CSAI is not a legitimate labor
organization because it is only registered with
SEC. It is the registration of the organization with
the Bureau of Labor Relations and not with the
SEC which made it a legitimate labor organization
with rights and privileges granted under the

Labor Code.
On the basis of the evidence presented by the
parties, SAPI, the legitimate labor union,
registered with its office, is not the same
association as CSAI, the corporation, insofar as
their rights under the Labor Code are concerned.
Hence, SAPI and not the CSAI is entitled to the
release and custody of union fees with Aboitiz
Shipping and other shipping companies with
whom it had an existing CBA.
The election of the so-called set of officers
headed by Manuel Gabayoyo was conducted
under the supervision of the SEC. That being the
case, the aforementioned set of officers is of the
CSAI and not of SAPI. It follows, then, that any
proceedings, and actions taken by said set of
officers can not, in any manner, affect the union
and its members.

Furusawa Rubber Philippines Inc.

vs. Secretary of Labor
Facts: FEU-IND filed a petition for certification
election among rank and file employees of
Furusawa. The petitioner moved to dismiss the
petition as the respondents was not a legitimate
labor organization for having submitted a
photocopy of the certificate which has not been
duly authenticated and not supported by other
documentary evidence contrary to law. The MedArbiter found for FEU-IND. Furusawa appealed to
the Secretary of Labor which affirmed the order
of the Med-Arbiter. Furusawas motion was

reconsideration was subsequently denied.

Issue: Whether or not failure of respondent to
submit an original copy of its certificate of
registration disqualifies it to file a certification
election.
Held: NO. The fact that FEU-IND was issued the
certificate of registration is sufficient proof of its
legitimacy. Failure to submit photocopy thereof is
not a fatal defect and does not affect the
legitimate statis of the labor organization. The
granting of the certificate shows that FEU-IND
has complied with the requirements of Art. 134 of
the LC.
The assertion of Furusawa that FEU-IND was not
able to comply with the 20% requirement is
untenable as it has already been found by the
Med-Arbiter that it did.

Ferrer vs. NLRC

Facts: Petitioners were regular and permanent

employees of the Occidental Foundry Corporation
(OFC).
The
Samahang
Manggagawa
ng
Occidental Foundry Corporation-Federation of
Free Workers (SAMAHAN) and the OFC entered
into a collective bargaining agreement (CBA). The
agreement provides that a union member who
fails to retain a membership of good standing
may be dismissed by the employer upon written
request by the union.
Pursuant to this provision, herein petitioners were
dismissed from employment on the ground of
failure to retain membership in good standing. It
was later on found out that the dismissal was due

to an intra-union squabble arising out of the

attempt by the petitioners to oust the elected
union officials.
Upon knowledge of their dismissal, petitioners
volunteered to be admitted as members of the
Federation of Democratic Labor Unions (FEDLU)
who represented them before the DOLE in the
complaint for illegal dismissal against the
company, SAMAHAN and FFW.
Issue: Whether or not petitioners failed to
maintain membership in good standing by
committing acts of disloyalty against SAMAHAN
Held:
No. Petitioners sought the help of the FEDLU only
after they had learned of the termination of their
employment. Their alleged application with
federations other than the FFW can hardly be
considered as disloyalty to the SAMAHAN, nor
may the filing of such applications denote that
petitioners failed to maintain in good standing
their membership in the SAMAHAN. The
SAMAHAN is a different entity from FFW, the
federation to which it belonged. Neither may it be
inferred that petitioners sought disaffiliation from
the FFW for petitioners had not formed a union
distinct
from
that
of
the
SAMAHAN.
Parenthetically, the right of a local union to
disaffiliate from a federation in the absence of
any provision in the federation's constitution
preventing disaffiliation of a local union is legal.
Such right is consistent with the constitutional
guarantee of freedom of association.

Apodaca vs. NLRC, [G.R. No. 80039

April 18, 1989]
Facts: Petitioner was employed in respondent
corporation. On August 28, 1985, respondent
Jose M. Mirasol persuaded petitioner to subscribe
to 1,500 shares of respondent corporation at
P100.00 per share or a total of P150,000.00. He
made an initial payment of P37,500.00. On
September 1, 1975, petitioner was appointed
President and General Manager of the respondent
corporation. However, on January 2, 1986, he
resigned.
On December 19, 1986, petitioner instituted with
the
NLRC
a
complaint
against
private
respondents for the payment of his unpaid
wages, his cost of living allowance, the balance
of his gasoline and representation expenses and
his bonus compensation for 1986. Petitioner and
private respondents submitted their position
papers to the labor arbiter. Private respondents
admitted that there is due to petitioner the
amount of P17,060.07 but this was applied to the
unpaid balance of his subscription in the amount
of P95,439.93. Petitioner questioned the set-off
alleging that there was no call or notice for the
payment of the unpaid subscription and that,
accordingly, the alleged obligation is not
enforceable.
In a decision dated April 28, 1987, the labor
arbiter sustained the claim of petitioner for
P17,060.07 on the ground that the employer has

no right to withhold payment of wages already

earned under Article 103 of the Labor Code. Upon
the appeal of the private respondents to public
respondent NLRC, the decision of the labor
arbiter was reversed in a decision dated
September 18, 1987. The NLRC held that a
stockholder who fails to pay his unpaid
subscription on call becomes a debtor of the
corporation and that the set-off of said obligation
against the wages and others due to petitioner is
not contrary to law, morals and public policy.
Issue: Does the National Labor Relations
Commission (NLRC) have jurisdiction to resolve a
claim for non-payment of stock subscriptions to a
corporation? Assuming that it has, can an
obligation arising therefrom be offset against a
money claim of an employee against the
employer?
Held: First, the NLRC has no jurisdiction to
determine such intra-corporate dispute between
the stockholder and the corporation as in the
matter of unpaid subscriptions. This controversy
is within the exclusive jurisdiction of the
Securities and Exchange Commission.
Second, assuming arguendo that the NLRC may
exercise jurisdiction over the said subject matter
under the circumstances of this case, the unpaid
subscriptions are not due and payable until a call
is made by the corporation for payment. Private
respondents have not presented a resolution of
the board of directors of respondent corporation
calling for the payment of the unpaid
subscriptions. It does not even appear that a

notice of such call has been sent to petitioner by

the respondent corporation.
What the records show is that the respondent
corporation deducted the amount due to
petitioner from the amount receivable from him
for the unpaid subscriptions. No doubt such setoff was without lawful basis, if not premature. As
there was no notice or call for the payment of
unpaid subscriptions, the same is not yet due
and payable.

Radio
Communication
of
the
Philippines Inc. vs. Secretary of
Labor, [G.R. No. 77959 January 9,
1989]
Facts: On May 4, 1981, petitioner, a domestic
corporation engaged in the telecommunications
business, filed with the National Wages Council
an application for exemption from the coverage
of Wage Order No. 1. The application was
opposed
by
respondent
United
RCPI
Communications Labor Association (URCPICLAFUR), a labor organization affiliated with the
Federation of Unions of Rizal (FUR).
Secretary of Labor and Employment issued an
order on August 18, 1986 modifying the order
appealed from by holding petitioner solely liable
to respondent union for 10% of the awarded
amounts as attorney's fees.
Issue: Whether or not public respondents acted
with grave abuse of discretion amounting to lack
of jurisdiction in holding the petitioner solely

liable for "union service fee to respondent

URCPICLA-FUR.
Held: No. Attorney's fee due the oppositor is
chargeable against RCPI. The defaulting employer
or government agency remains liable for
attorney's fees because it compelled the
complainant to employ the services of counsel by
unjustly refusing to recognize the validity of the
claim. (Cristobal vs. ECC)
It is undisputed that oppositor (private
respondent herein) was the counsel on record of
the RCPI employees in their claim for EC0LA
under Wage Order No. 1 since the inception of
the proceedings at the National Wages Council up
to the Supreme Court. It had, therefore, a valid
claim for attorney's fee which it called union
service fee.
As is evident in the compromise agreement,
petitioner was bound to pay only 30% of the
amount due each employee on November 30,
1985, while the balance of 70% would still be the
subject of renegotiation by the parties. Yet,
despite such conditions beneficial to it, petitioner
paid in full the backpay of its employees on
November 29, 1985, ignoring the service fee due
the private respondent. Worse, petitioner
supposedly paid to one Atty. Rodolfo M. Capocyan
the 10% fee that properly pertained to herein
private respondent, an unjustified and baffling
diversion of funds.
Finally, petitioner cannot invoke the lack of an
individual
written
authorization
from
the
employees as a shield for its fraudulent refusal to

pay the service fee of private respondent. Be that

as it may, the lack thereof was remedied and
supplied by the execution of the compromise
agreement whereby the employees, expressly
approved the 10% deduction and held petitioner
RCPI free from any claim, suit or complaint
arising from the deduction thereof. When
petitioner was thereafter again ordered to pay
the 10% fees to respondent union, it no longer
had any legal basis or subterfuge for refusing to
pay the latter.
We agree that the Labor Code in requiring an
individual written authorization as a prerequisite
to wage deductions seeks to protect the
employee against unwarranted practices that
would diminish his compensation without his
knowledge and consent. However, for all intents
and purposes, the deductions required of the
petitioner and the employees do not run counter
to the express mandate of the law since the
same are not unwarranted or without their
knowledge and consent. Also, the deductions for
the union service fee in question are authorized
by law and do not require individual check-off
authorizations.

Escario, et. al. vs. NLRC, [G.R. No.

124055 June 8, 2000]

Facts:
Petitioners
are
merchandisers
of
respondent company. They withdraw stocks from
the warehouse , fix the prices, price-tagging,
displaying the products and inventory. They were
paid by the company through an agent to avoid

liability. They claim that they were under the

control and supervision of the company. They
asked for regularization of their status. They were
then given notice of their termination. The
company
denied
any
employer-employee
relationship. They claim that they used an agent
or
independent
contractors
to
sell
the
merchandise. The Labor Arbiter ruled that there
was an employer-employee relationship. The
NLRC set aside the decision and said that there
was no such relationship. The agent was a
legitimate independent contractor.
Issue: Whether or not the petitioners are
employees of the company.
Held: The Court ruled that there is no employeremployee relationship and that petitioners are
employees of the agent. The agent is a legitimate
independent contractor. Labor-only contractor
occurs only when the contractor merely recruits,
supplies or places workers to perform a job for a
principal. The labor-only contractor doesnt have
substantial capital or investment and the workers
recruited perform activities directly related to the
principal business of the employer. There is
permissible contracting only when the contractor
carries an independent business and undertakes
the contract in his own manner and method, free
from the control of the principal and the
contractor has substantial capital or investment.
The agent, and not the company, also exercises
control over the petitioners. No documents were
submitted to prove that the company exercised
control over them. The agent hired the

petitioners. The agent also pays the petitioners,

no evidence was submitted showing that it was
the company paying them and not the agent. It
was also the agent who terminated their
services. By petitioning for regularization, the
petitioners concede that they are not regular
employees.

Alano vs. Employees' Compensation

Commission (ECC) [G.R. No. L-48594
, March 16, 1988]

Facts: Dedicacion de Vera, a government

employee during her lifetime, worked as principal
of Salinap Community School in San Carlos City,
Pangasinan. Her tour of duty was from 7:30 a.m.
to 5:30 p.m. On November 29, 1976, at 7:00
A.M., while she was waiting for a ride at Plaza
Jaycee in San Carlos City on her way to the
school, she was bumped and run over by a
speeding Toyota mini-bus which resulted in her
instantaneous death. She is survived by her four
sons and a daughter.
On June 27, 1977, Generoso C. Alano, brother of
the deceased, filed the instant claim for income
benefit with the GSIS for and in behalf of the
decedent's children. The claim was, however,
denied on the same date on the ground that the
"injury upon which compensation is being
claimed is not an employment accident satisfying
all the conditions prescribed by law." On July 19,
1977 appellant requested for a reconsideration of
the system's decision, but the same was denied

and he records of the case were elevated to this

Commission for review. (Rollo, p. 12)
Issue: Whether or not the death of Dedicacion
de Vera can be compensable.
Held: In this case, it is not disputed that the
deceased died while going to her place of work.
She was at the place where, as the petitioner
puts it, her job necessarily required her to be if
she was to reach her place of work on time.
There was nothing private or personal about the
school principal's being at the place of the
accident.
She
was
there
because
her
employment required her to be there.
As to the Government Service Insurance
System's manifestation, we hold that it is not
fatal to this case that it was not impleaded as a
party respondent. As early as the case of La O v.
Employees' Compensation Commission, (97 SCRA
782)
up
to
Cabanero
v.
Employees'
Compensation Commission (111 SCRA 413) and
recently, Clemente v. Government Service
Insurance System (G.R. No. L-47521, August
31,1987), this Court has ruled that the
Government Service Insurance System is a
proper party in employees' compensation cases
as the ultimate implementing agency of the
Employees' Compensation Commission. We held
in the aforecited cases that "the law and the
rules refer to the said System in all aspects of
employee compensation including enforcement
of decisions (Article 182 of Implementing
Rules)."

Ilaw at Buklod ng Manggagawa v.

NLRC

Facts: There was a wage order that caused a

wage distortion within the company.
Union then proposed to the mgt. that the wage
distortion be corrected by implementing a 25php
wage increase, which it later lowered to 15php.
The Company, however, only effected a 7php
wage increase. The union considered the mgt.s
move as the company ignoring their demands.
As a result, the union decided to work only for 8
hours per day, against the company practice for
5 years of having the workers work 10 to 14-hour
work shifts.
This caused the company, SMC losses, due to
diminished productivity, prompting it to file a
complaint with the NLRC seeking the declaration
of the said unions activity (strike/slowdown) as
illegal.
Issue: Whether or not said slowdown/strike is
illegal
Held: It is illegal, on several grounds.
The Court concedes the workers right to self
organization and to concerted activities in
exercise of that right. The Court also pointed out
that common examples are strike/temporary
stoppage of work, and picketing.
However, the Court also points out that such
right is not absolute and may be limited by law.
In this case, the Court pointed out that:
The legality of these activities is usually
dependent on the legality of the purposes sought

to be attained and the means employed therefor.

These joint or coordinated activities may be
forbidden or restricted by law or contract.
In the particular instance of "distortions of the
wage structure within an establishment" resulting
from "the application of any prescribed wage
increase by virtue of a law or wage order,"
Section 3 of Republic Act No. 6727 prescribes a
specific, detailed and comprehensive procedure
for the correction thereof, thereby implicitly
excluding strikes or lockouts or other concerted
activities as modes of settlement of the issue.

Sugbanon Rural
Laguesma [2000]

Bank

Inc.,

vs.

Facts: Private respondent SRBI-APSOTEU (Union)

is a legitimate labor organization affiliated with
TUCP. DOLE Regional Office granted a Certificate
of Registration, and thereafter the union filed a
petition for certification election of the
supervisory employees of petitioner SRBI. MedArbiter set the pre-election conference. SRBI,
however filed a motion to dismiss based on 2
grounds:
(1) Members of APSOTEU-TUCP were managerial
or confidential employees thus disqualified from
forming or joining unions (attached job
descriptions)
(2) ALU-TUCP was representing the union, thus
there was a violation of the principle of
separation of unions
Med-Arbiter denied the motion to dismiss and
ordered the certification election. DOLE also

dismissed the subsequent appeal of SRBI, ruling

that APSOTEU-TUCP was a legitimate labor
organization and it had the legal right to
represent its members for collective bargaining
purposes.
Issues:
(1) Whether or not members of the respondent
union are managerial employees and/or highlyplaced confidential employees hence prohibited
by law from joining labor organizations
(2) Whether or not the Med-Arbiter may validly
order the holding of a certification election upon
filing of a petition for certification election,
despite the petitioners appeal pending before
the DOLE Secretary
Held:
(1) No. Art.212(m) of the Labor Code defines
managerial employees as one who is vested
with powers or prerogatives to lay down and
execute management policies and/or hire,
transfer, suspend, lay-off, recall, discharge,
assign or discipline employees. Petitioner argues
that responsibilities of employees involved
constitute the very core of the banking business,
then cited cases (Tabacalera, Panday) where
credit and collection supervisors were deemed as
managerial employees.
In this case, however, petitioners failed to show
that the employees in question (cashiers,
accountants, acting chief of loans department)
were vested with powers to recommend the
hiring and firing of his subordinates. At best they
only had recommendatory functions subject to

review by the banks management.

Neither were the respondents confidential
employees (requisites: 1. assist and act in
confidential capacity, 2. Persons who formulate,
determine, and effectuate management policies).
The two criteria are cumulative. Article 245 does
not directly prohibit confidential employees but
applies under the doctrine of necessary
implication (because they become aware of
management policies relating to labor relations).
(2) YES. Article 242 (b) LC provides that one of
the rights of a legitimate labor organization is the
right to be certified as the exclusive bargaining
representative
of
all
employees
in
the
appropriate bargaining unit for purposes of
collective bargaining. Article 257 states that
certification election shall be automatically
conducted by the Med-Arbiter upon filing of
petition of legitimate labor organization.
Petitioner argues that giving due course to the
certification election would violate the separation
of unions doctrine (alleges that union is a mere
alter-ego of ALU). This argument must fail.
Petition was filed by APSOTEU-TUCP, a legitimate
labor organization, and not the ALU nor the TUCP
(national labor federation). A local union
maintains its separate personality despite its
affiliation with a larger national federation. There
are nothing in the records to support the
contentions of the petitioner.

Elisco-Elirol Labor Union (NAFLU) vs

Noriel

Facts:
Elisco-Elirol
Labor
Union
(NAFLU)
negotiated and executed a CBA with Elizalde
Steel Consolidated Inc. However, Elisco-Elirol
then was not yet a registered union. In order to
be able to execute the CBA, they had the union
registered, which was granted. They likewise
moved to disaffiliate themselves with NAFLU.
Elizalde, however, refused to recognized them as
the SEBA and it dismissed the officers of the
union because of the union security clause in the
CBA. Elisco-Elirol filed a complaint for unfair labor
practice with the BLR. The BLR dismissed.
Issue: Whether or not Elisco-Elirol is the SEBA
Held: YES. The error of BLR is not perceiving that
the employees and members of the local union
did not form a new union but merely registered
the local union as was their right. Petitioner
Elisco-Elirol Labor Union-NAFLU, consisting of
employees and members of the local union was
the principal party to the agreement. NAFLU as
the mother union" in participating in the
execution of the bargaining agreement with
respondent company acted merely as agent of
the local union, which remained the basic unit of
the association existing principally and freely to
serve the common interest of all its members,
including the freedom to disaffiliate when the
circumstances so warranted as in the present
case.
"(T)he locals are separate and distinct units
primarily designed to secure and maintain an
equality of bargaining power between the

employer and their employee-members in the

economic struggle for the fruits of the joint
productive effort of labor and capital; and the
association of the locals into the national union
(as PAFLU) was in furtherance of the same end.
These associations are consensual entities
capable of entering into such legal relations with
their members. The essential purpose was the
affiliation of the local unions into a common
enterprise to increase by collective action the
common bargaining power in respect of the
terms and conditions of labor. Yet the locals
remained the basic units of association, free to
serve their own and the common interest of all,
subject to the restraints imposed by the
Constitution and By-Laws of the Association, and
free also to renounce the affiliation for mutual
welfare upon the terms laid down in the
agreement which brought it into existence."
(Liberty Cotton Mills Workers Union vs. Liberty
Cotton Mills Inc.)
Such maintenance of the membership clause
could not be so distorted.. What is paramount is
the security of tenure of the workers and not the
security of the union.

Holy Cross of Davao vs. Faculty

Union

Facts: Jean Legaspi, an English teacher and

permanent employee of petitioner school,
submitted an application for the 1999 Manbusho
scholarship
grant,
which
was
granted.

Consequently, she requested petitioner to allow

her to be on study leave with grant-in aid
equivalent to her 18 months salary and
allowance, pursuant to Section 1 Article XIII of
the CBA providing for a faculty development
scholarship for academic personnel. Petitioner
denied her request, claiming that she is not
entitled to grant-in aid, but granted her 12
months study leave without pay.
Legaspi then asked respondent Union KAMAPI to
submit to the Grievance Committee petitioners
refusal to grant her claim for grant-in aid, but the
same was not settled. The union then filed a
complaint for payment of grant-in aid against
petitioner with the NCMB RO.
VA ordered petitioner to pay Legaspis grant-in
aid benefits. CA affirmed VAs Decision.
Issue: Whether or not Jean Legaspi is entitled to
grant-in-aid benefits in the light of the CBA
between the parties.
Held: YES. Any doubt or ambiguity in the
contract (CBA) between management and the
union members should be resolved in favor of
labor. This is pursuant to A1702 CC: in case of
doubt, all labor legislation and all labor legislation
and all labor contracts shall be construed in favor
of the safety and decent living for the laborer.
The CBA provides that the Management shall
grant to all academic personnel a grant-in aid
program,
where
the
academic
teaching
personnel, whenever scholarship opportunities
arise, be afforded a leave of absence to further
their studies in Institutions of Higher Learning

with a grant-in-aid equivalent to their salary and

allowance. The provision needs no interpretation
for they are clear. Contracts which are not
ambiguous are to be interpreted according to
their literal meaning and not beyond their
obvious intendment.

Honda Philippines vs. Samahan ng

Malayang Manggagawa sa Honda
Facts: Honda Phils, Inc (company) and Samahan
ng Malayang Manggagawa sa Honda (union)
started renegotiations of their CBA. When there
was a bargaining deadlock, the union filed a
notice of strike. The company likewise filed a
notice of lockout. SOLE assumed jurisdiction and
ordered both parties to desist from their strike
and lockout.
However, the union subsequently filed a second
notice of strike on the ground of unfair labor
practice, alleging that the company illegally
contracted out work to the detriment of the
workers. The union went on strike. SOLE assumed
jurisdiction and certified the case to NLRC for
compulsory arbitration. The striking employees
were ordered to return to work and management
accepted them back.
Honda then issued a memorandum announcing
its new computation of the 13th and 14th month
pay whereby the 31-day strike shall be
considered unworked days for the purpose of
computing said benefits. The amount equivalent
to 1/12 of the employees basic salary shall be

deducted from the bonuses (because they did not

work for 1 month). Furthermore, Honda wanted a
pro-rata payment of the 13th month pay.
The union opposed said computation because it
was contrary to the Sections 3 and 6 in their
current CBA which mandates that the company
shall maintain the present practice in the
implementation of the 13th month pay and that
the 14th month pay shall be computed in the
same way as the former.
The Bureau of Working Conditions (BWC) sided
with the company. But the issue was unresolved
by the grievance machinery, so it was submitted
for voluntary arbitration. The Voluntary Arbiter
invalidated Hondas computation and ordered the
computation of the benefits based on the full
month basic pay.
Issues:
(1) Whether or not there is ambiguity in the CBA
provisions concerning the 13th and 14th month
pay
(2) Whether or not the proposed computation of
Honda deducting 1/12 of the employees basic
salary from the 13th and 14th month pay and its
pro-rata payment are valid
Held:
(1) YES. A collective bargaining agreement refers
to the negotiated contract between a legitimate
labor organization and the employer concerning
wages, hours of work and all other terms and
conditions of employment in a bargaining unit.
The parties in a CBA may establish such
stipulations, clauses, terms and conditions as

they may deem convenient as long as they are

not contrary to law, morals, good customs, public
order or public policy. Where the CBA is clear and
unambiguous, it becomes the law between the
parties.
However, there are times when the CBA
provisions may become contentious. In this case,
Honda wanted to implement a pro-rated
computation based on the no work, no pay
rule. Honda argues that the phrase present
practice in the CBA refers to the manner of
payment of the bonuses (50% in May and 50% in
December). The union, on the other hand, insists
that the CBA provisions necessarily relate to the
computation of the benefits.
Moreover, it has not been proven that Honda has
been implementing pro-rating of the 13th month
pay before the present case. It is not a company
practice. In fact, there was an implicit acceptance
that prior to the strike, a full month basic pay
computation was the present practice intended
in the CBA. It was the second strike that
prompted the company to adopt the pro-rata
computation.

Metro Drug Distribution vs. Metro

Drug Employee Association (2005)
Facts: Company and Assoc had a CBA with a
grievance procedure. In a letter, the union
president asked to grievable issues re: health
insurance provider and the issue pertaining to
the amendment to the salesmens incentive

scheme which was implemented by Metro Drug.

Even after grievance meetings conducted, both
parties could not reach an agreement. According
to union, it wanted to submit issue to a voluntary
arbitrator (VA) as provided in CBA but the
company despite notice, failed to submit its own
nominees of VA such that union was prompted to
file for ULP before the arbitration branch of
NLRC.
Union: Company violated CBA a) economic
provisions
stemming
from
petitioners
introduction of unilateral changes on the
salesmens incentive scheme and health
insurance provider; b) violations of the duty to
bargain and non-observance of the CBA provision
on grievance machinery.
Company filed certiorari with CA which was
dismissed.
Issue: Whether or not certiorari filed directly
with CA after MTD was denied by Labor Arbiter
was proper? NO
Held: Certiorari was not proper.
Under Rule 65 of the Revised Rules of Civil
Procedure, for a certiorari proceeding to prosper,
there should be a concurrence of the essential
requisites, to wit: (a) the tribunal, board or officer
exercising judicial functions has acted without or
in excess of jurisdiction or with grave abuse of
discretion amounting to lack or in excess of
jurisdiction, and (b) there is no appeal, nor any
plain, speedy and adequate remedy in the
ordinary course of law for the purpose of
annulling or modifying the proceeding.

Under NLRC rules, no appeal may be made of an

order denying MTD. The NLRC rule proscribing
appeal from a denial of a motion to dismiss is
similar to the general rule observed in civil
procedure that an order denying a motion to
dismiss is interlocutory and, hence, not
appealable until final judgment or order is
rendered. The remedy of the aggrieved party in
case of denial of the motion to dismiss is to file
an answer and interpose, as a defense or
defenses, the ground or grounds relied upon in
the motion to dismiss, proceed to trial and, in
case of adverse judgment, to elevate the entire
case by appeal in due course. In order to avail of
the extraordinary writ of certiorari, it is
incumbent upon petitioner to establish that the
denial of the motion to dismiss was tainted with
grave abuse of discretion.
Exhaustion of administrative remedies before a
party is allowed to seek the intervention of the
court, it is a pre-condition that he should have
availed of all the means of administrative
processes afforded him.
Hence, if a remedy within the administrative
machinery can still be resorted to by giving the
administrative
officer
concerned
every
opportunity to decide on a matter that comes
within his jurisdiction, then such remedy should
be exhausted first before the courts judicial
power can be sought. The premature invocation
of courts judicial intervention is fatal to ones
cause of action -The underlying principle of the
rule on exhaustion of administrative remedies

rests on the presumption that the administrative

agency, if afforded a complete chance to pass
upon the matter, will decide the same correctly.
HERE, company's remedy from the order of
denial of its motion to dismiss was to submit its
position paper as ordered by the labor arbiter
and raise the question of supposed lack of
jurisdiction. In the event of unfavorable
judgment, it could thereafter raise the case,
including the issue of jurisdiction, via appeal to
the NLRC as provided for in the Labor Code on
the ground of grave abuse of discretion
amounting to lack or excess of jurisdiction.

Linton Commercial
Hellera

Co.

Inc.

vs

Facts: Linton is a domestic corporation engaged

in the business of importation of steel. On Dec.
17, 1997, through its VP, Desiree Ong, Linton Inc
issued a memorandum addressed to its
employees informing them of the companys
decision to suspend its operations from 18
December 1997 to 5 January 1998 due to the
currency crisis that affected its business
operations. Linton submitted an establishment
termination report to the Department of Labor
and Employment (DOLE) regarding the temporary
closure of the establishment covering the said
period. The companys operation was to resume
on 6 January 1998.
On 7 January 1998, Linton issued another
memorandum informing them that effective 12

January 1998, wherein each worker would be

working on a rotation basis for three working
days only instead for six days a week.
On the same day, Linton submitted an
establishment termination report concerning the
rotation of its workers. Linton proceeded with the
implementation of the new policy without waiting
for its approval by DOLE.
Aggrieved, 68 workers filed a Complaint for
illegal reduction of workdays with the NLRC on 17
July 1998. They pointed out that Linton
implemented the reduction of work hours without
observing Article 283 of the Labor Code, which
required submission of notice thereof to DOLE
one month prior to the implementation of
reduction of personnel.
Linton, on the other hand, contended that the
devaluation of the peso created a negative
impact in international trade and affected their
business because a majority of their raw
materials were imported thus, they suffered a net
loss of P3,569,706.57 primarily due to currency
devaluation and the slump in the market.
Consequently, Linton decided to reduce the
working days of its employees to three (3) days
on a rotation basis as a cost-cutting measure.
On 28 January 2000, the Labor Arbiter rendered a
Decision finding petitioners guilty of illegal
reduction of work hours and directing them to
pay each of the workers.
Petitioners appealed to the NLRC. The NLRC
reversed the decision of the Labor Arbiter. The
NLRC held that an employer has the prerogative

to control all aspects of employment. The NLRC

took judicial notice of the Asian currency crisis in
1997 and 1998 thus finding Lintons decision to
implement a compressed workweek as a valid
exercise of management prerogative. Moreover,
the NLRC ruled that Article 283 of the Labor
Code, which requires an employer to submit a
written notice to DOLE one (1) month prior to the
closure or reduction of personnel, is not
applicable to the instant case because no closure
was undertaken and no reduction of employees
was implemented by Linton.
The workers then filed before the Court of
Appeals a petition for certiorari under Rule 65
assailing the decision of the NLRC and its
resolution
that
denied
their
Motion
for
Reconsideration.
Issue: Whether or not Linton is guilty of illegal
reduction of work hours
Held: Yes. Linton had failed to establish enough
factual basis to justify the necessity of a reduced
workweek and present adequate, credible and
persuasive evidence that it was indeed suffering,
or would imminently suffer, from drastic business
losses. Lintons financial statements for 19971998 showed no indication of financial losses,
and the alleged loss of P3,645,422.00 in 1997
was considered insubstantial considering its total
asset of P1 BILLION.
Jurisprudence provides for the validity of the
reduction of working hours, taking into
consideration
the
ff:
arrangement
was
temporary, it was a more humane solution

instead of retrenchment of personnel, notice and

consultations with workers, consensus on how to
solve problems and sufficient proof that company
was suffering a substantial loss.

Tabas vs. California Manufacturing

Company Inc., [G.R. No. L-80680,
January 26, 1989]
Facts: The petitioners petitioned the National
Labor Relations Commission for reinstatement
and payment of various benefits, including
minimum wage, overtime pay, holiday pay,
thirteen-month pay, and emergency cost of living
allowance pay, against the respondent, the
California Manufacturing Company. California
denied the existence of an employer-employee
relation between the petitioners and the
company and impleaded Livi Manpower Services,
Inc. as a party-respondent.
Petitioners
were
assigned
to
work
as
"promotional
merchandisers"
for
California
pursuant to a manpower supply agreement. The
agreement provided that California "has no
control or supervisions whatsoever over Livi's
workers with respect to how they accomplish
their work or perform California's obligation"; the
Livi "is an independent contractor and nothing
herein contained shall be construed as creating
between California and Livi . . . the relationship of
principal-agent or employer-employee'; that "it is
hereby agreed that it is the sole responsibility of
Livi to comply with all existing as well as future

laws, rules and regulations pertinent to

employment of labor" and that "California is free
and harmless from any liability arising from such
laws or from any accident that may befall
workers and employees of Livi while in the
performance of their duties for California.
It was further expressly stipulated that the
assignment of workers to California shall be on a
"seasonal and contractual basis"; that "cost of
living allowance and the 10 legal holidays will be
charged directly to California at cost "; and that
"payroll for the preceding week shall be delivered
by Livi at California's premises."
The petitioners were then made to sign
employment contracts with durations of six
months, upon the expiration of which they signed
new agreements with the same period. Pending
proceeding they were notified by California that
they would not be rehired. As a result, they filed
an amended complaint charging California with
illegal dismissal.
Issue: Whether or not there exist an employeeemployer relationship between petitioners and
California Manufacturing Company
Held: Yes. The existence of an employeremployees relation is a question of law and being
such, it cannot be made the subject of
agreement. Hence, the fact that the manpower
supply agreement between Livi and California
had specifically designated the former as the
petitioners' employer and had absolved the latter
from any liability as an employer, will not erase
either party's obligations as an employer, if an

employer-employee relation otherwise exists

between the workers and either firm. At any rate,
since the agreement was between Livi and
California, they alone are bound by it, and the
petitioners cannot be made to suffer from its
adverse consequences.
The Court has consistently ruled that the
determination of whether or not there is an
employer-employee relation depends upon four
standards: (1) the manner of selection and
engagement of the putative employee; (2) the
mode of payment of wages; (3) the presence or
absence of a power of dismissal; and (4) the
presence or absence of a power to control the
putative employee's conduct. Of the four, the
right-of-control test has been held to be the
decisive factor.

Sosito vs. Aguinaldo Development

Corporation, [G.R. No. L-48926,
December 14, 1987]

Facts: Petitioner Manuel Sosito was employed in

1964 by the private respondent, a logging
company, and was in charge of logging
importation, with a monthly salary of P675.00,
when he went on indefinite leave with the
consent of the company on January 16, 1976. On
July 20, 1976, the private respondent, through its
president, announced a retrenchment program
and offered separation pay to employees in the
active service as of June 30, 1976, who would
tender their resignations not later than July 31,

1976. The petitioner decided to accept this offer

and so submitted his resignation on July 29,
1976, "to avail himself of the gratuity benefits"
promised. However, his resignation was not acted
upon and he was never given the separation pay
he expected. The petitioner complained to the
Department of Labor, where he was sustained by
the labor arbiter. The company was ordered to
pay Sosito the sum of 4,387.50, representing
his salary for six and a half months. On appeal to
the National Labor Relations Commission, this
decision was reversed and it was held that the
petitioner was not covered by the retrenchment
program. Hence this petition.
Issue: Whether or not the petitioner is entitled to
separation
pay
under
the
retrenchment
program?
Held: No. It is clear from the memorandum that
the offer of separation pay was extended only to
those who were in the active service of the
company as of June 30, 1976. It is equally clear
that the petitioner was not eligible for the
promised gratuity as he was not actually working
with the company as of the said date. Being on
indefinite leave, he was not in the active service
of the private respondent although, if one were to
be technical, he was still in its employ. Even so,
during the period of indefinite leave, he was not
entitled to receive any salary or to enjoy any
other benefits available to those in the active
service.
We note that under the law then in force the
private respondent could have validly reduced its

work force because of its financial reverses

without the obligation to grant separation pay.
This was permitted under the original Article
272(a), of the Labor Code, which was in force at
the time. The company voluntarily offered
gratuities to those who would agree to be phased
out pursuant to the terms and conditions of its
retrenchment program, in recognition of their
loyalty and to tide them over their own financial
difficulties.
The
Court
feels
that
such
compassionate measure deserves commendation
and support but at the same time rules that it
should be available only to those who are
qualified therefore. We hold that the petitioner is
not one of them.

Coastal Subic Bay vs. DOLE

Facts: Petitioners rank and file union and

supervisors union both filed for certification
elections with the Med Arbiter.
RnF union insists it is registered by ALU and the
Supervisor union states it is registered with
Associated Professional, Supervisory, Office and
Technical Union (APSOTEU).
Petitioner alleges both are not legitimate and
proposed bargaining units were not organized.
Med Arbiter dismissed both petitions and stated
both organizations belonged to the same
federation.
Secretary reversed stating both have separate
legal personalities and separate certificates of
registration from DOLE, and different sets of
locals,
and
after
having
submitted
the

requirements to BLR, granted the separate

certification elections.
CA affirmed Secretary.
Issues:
(1) Whether or not BLR is the only entity that
may issue registrations. NO
(2) Whether or not supervisory and RnF may file
separate certification elections. YES
(3) Whether or not respondents engaged in
commingling. NO.
Held:
Petitioner
alleges
only
BLR
may
issue
registration. However Art. 235 states the BLR
and/or the Regional Offices may do such. Even
after the amendment the Regional Offices were
not divested of their power, but only that the BLR
will act on such registration made to the Regional
Offices.
Section 5. Effect of registration The labor
organization or workers association shall be
deemed registered and vested with legal
personality on the date of issuance of its
certificate of registration. Such legal personality
cannot thereafter be subject to collateral attack,
but maybe questioned only in an independent
petition for cancellation in accordance with these
Rules.
APSOTEU is a legitimate organization and may
validly issue a charter to its affiliates, and this
stays in effect until cancelled or revoked, and
until then, possess a separate legal personality
from each other., even with the commonalities.
A local union does not owe its existence to the

federation with which it is affiliated. It is a

separate and distinct voluntary association owing
its creation to the will of its members. Mere
affiliation does not divest the local union of its
own personality, neither does it give the mother
federation the license to act independently of the
local union. Hence, local unions are considered
principals while the federation is deemed to be
merely their agent. As such principals, the unions
are entitled to exercise the rights and privileges
of a legitimate labor organization.

Guijarno vs. CIR

Facts: Nineteen employees were dismissed by

Central Santos Lopez Co., Inc upon their
expulsion from United Sugar Workers Union-ILO.
The sugar company assumed that it had to
dismiss the workers by virtue of the closed-shop
provision in the then existing collective
bargaining agreement which states that laborers
who are no longer members of good standing in
the union may be dismissed by the respondent
company if their dismissal is sought by the
union. It argued that it has never committed any
acts of unfair labor practice since the union
sought the dismissal of the said workers; that it
has a solemn obligation to comply with the terms
and conditions of the contract; and that a closedshop agreement is sanctioned under this
jurisdiction for such kind of agreement is
expressly allowed under the provisions of
Republic Act 875 known as the Industrial Peace
Act and the dismissal of complainants is merely

an exercise of a right allowed by said law. It was

established that the terminated workers were
employed long before the collective bargaining
contract has been entered into. The lower courts
held that the dismissal was justifiable under the
closed-shop provision of the collective bargaining
agreement. Hence, this petition for review.
Issue: Whether or nor a closed-shop provision in
a collective bargaining contract is retroactive
Held: NO. In Confederated Sons of Labor v.
Anakan Lumber Co., it was said that "In order
that an employer may be deemed bound, under
a collective bargaining agreement, to dismiss
employees for non-union membership, the
stipulation to this effect must be so clear and
unequivocal as to leave no room for doubt
thereon. An undertaking of this nature is so harsh
that it must be strictly construed, and doubts
must be resolved against the existence of "closed
shop"." Furthermore, it was stated in Freeman
Shirt Manufacturing v. Court of Industrial
Relations that "The closed-shop agreement
authorized under sec. 4, subsec. a(4) of the
Industrial Peace Act applies to persons to be
hired or to employees who are not yet members
of any labor organization. It is inapplicable to
those already in the service who are members of
another union. To hold otherwise, i. e., that the
employees in a company who are members of a
minority union may be compelled to disaffiliate
from their union and join the majority or
contracting union, would render nugatory the
right of all employees to self-organization and to

form, join or assist labor organizations of their

own choosing, a right guaranteed by the
Industrial Peace Act as well as by the
Constitution."
According to the Court, the creation of labor
unions is a means of assuring that fundamental
constitutional objectives such as the protection of
labor (full employment and equality in
employment, ensure equal work opportunities
regardless of sex, race, or creed, and regulate
the relations between workers and employers)
and the promotion of social justice (dignity,
welfare, and security of all the people) would be
achieved. It is the instrumentality through which
an individual laborer who is helpless as against a
powerful employer may, through concerted effort
and activity, achieve the goal of economic wellbeing. That is the philosophy underlying the
Industrial Peace Act.

Ichong vs. Hernandez, GR No. L7995

Facts: Republic Act No. 1180 is entitled "An Act

to Regulate the Retail Business." In effect it
nationalizes the retail trade business.
Petitioner attacks the constitutionality of the Act,
contending that: (1) it denies to alien residents
the equal protection of the laws and deprives of
their liberty and property without due process of
law ; (2) the subject of the Act is not expressed or
comprehended in the title thereof; (3) the Act
violates international and treaty obligations of

the Republic of the Philippines; (4) the provisions

of the Act against the transmission by aliens of
their retail business thru hereditary succession,
and those requiring 100% Filipino capitalization
for a corporation or entity to entitle it to engage
in the retail business, violate the spirit of
Sections 1 and 5, Article XIII and Section 8 of
Article XIV of the Constitution.
In answer, the Solicitor-General and the Fiscal of
the City of Manila contend that: (1) the Act was
passed in the valid exercise of the police power
of the State, which exercise is authorized in the
Constitution in the interest of national economic
survival; (2) the Act has only one subject
embraced in the title; (3) no treaty or
international obligations are infringed; (4) as
regards hereditary succession, only the form is
affected but the value of the property is not
impaired, and the institution of inheritance is only
of statutory origin.
Issue: Whether the conditions which the
disputed law purports to remedy really or
actually exist.
Held: Yes. We hold that the disputed law was
enacted to remedy a real actual threat and
danger to national economy posed by alien
dominance and control of the retail business and
free citizens and country from dominance and
control. Such enactment clearly falls within the
scope of the police power of the State, thru which
and by which it protects its own personality and
insures its security and future. Furthermore, the
law does not violate the equal protection clause

of the Constitution because sufficient grounds

exist for the distinction between alien and citizen
in the exercise of the occupation regulated, nor
the due process of law clause, because the law is
prospective in operation and recognizes the
privilege of aliens already engaged in the
occupation and reasonably protects their
privilege. The wisdom and efficacy of the law to
carry out its objectives appear to us to be plainly
evident as a matter of fact it seems not only
appropriate but actually necessary and that in
any case such matter falls within the prerogative
of the Legislature, with whose power and
discretion the Judicial department of the
Government may not interfere. Moreover, the
provisions of the law are clearly embraced in the
title, and this suffers from no duplicity and has
not misled the legislators or the segment of the
population affected; and that it cannot be said to
be void for supposed conflict with treaty
obligations because no treaty has actually been
entered into on the subject and the police power
may not be curtailed or surrendered by any
treaty or any other conventional agreement.

Free Telephone Workers Union vs.

Minister of Labor, 108 SCRA 757
Facts: On September 14, 1981, there was a
notice of strike with the Ministry of Labor for
unfair labor practices stating the following
grounds:
"1)
Unilateral
and
arbitrary
implementation of a Code of Conduct; 2) Illegal

terminations and suspensions of our officers and

members as a result of the implementation of
said Code of Conduct; and 3) Unconfirmation of
call sick leaves and its automatic treatment as
Absence Without Official Leave of Absence
(AWOL) with corresponding suspensions, in
violation
of
our
Collective
Bargaining
Agreement." After which came, on September 15,
1981, the notification to the Ministry that there
was compliance with the two-thirds strike vote
and other formal requirements of the law and
Implementing
Rules.
Several
conciliation
meetings called by the Ministry followed, with the
petitioner manifesting its willingness to have a
revised Code of Conduct that would be fair to all
concerned but with a plea that in the meanwhile
the Code of Conduct being imposed be
suspended-a position that failed to meet the
approval of private respondent. Subsequently, on
September 25, 1981, the respondent certified the
labor dispute to the National Labor Relations
Commission for compulsory arbitration and
enjoined any strike at the private respondent's
establishment. The labor dispute was set for
hearing by respondent National Labor Relations
Commission on September 28, 1981. There was
in the main an admission of the above relevant
facts by public respondents. Private respondent,
following the lead of petitioner labor union,
explained its side on the controversy regarding
the Code of Conduct, the provisions of which as
alleged in the petition were quite harsh, resulting
in what it deemed indefinite preventive

suspension-apparently the principal cause of the

labor dispute. The very next day after the filing of
the petition, this Court issued the following
resolution:
"Considering
the
allegations
contained, the issues raised and the arguments
adduced in the petition for Certiorari with prayer
for a restraining order, the Court Resolved to (a)
require the respondents to file an [answer], not a
motion to dismiss, on or before Wednesday,
October 7, 1981; and (b) [Set] this case for
hearing on Thursday, October 8, 1981 at 11:00
o'clock in the morning." After the parties were
duly heard, Solicitor General Estelito P. Mendoza
appearing for the public respondents, the case
was considered ripe for decision.
Issue: Whether or not there is undue delegation
to the MOLE.
Held: No. The Delegation to the MOLE of the
power to assume jurisdiction in the labor dispute
was likely to affect the national interest or to
certify the same to the NLRC for arbitration does
not constitute an undue delegation of legislative
powers.
The allegation that there is undue delegation of
legislative powers cannot stand the test of
scrutiny. The power which he would deny the
Minister of Labor by virtue of such principle is for
petitioner labor union within the competence of
the President, who in its opinion can best
determine national interests, but only when a
strike is in progress. Such admission is qualified
by the assumption that the President "can make
law," an assertion which need not be passed

upon in this petition. What possesses significance

for the purpose of this litigation is that it is the
President who "shall have control of the
ministries." It may happen, therefore, that a
single person may occupy a dual position of
Minister and Assemblyman. To the extent,
however, that what is involved is the execution or
enforcement of legislation, the Minister is an
official of the executive branch of the
government. The adoption of certain aspects of a
parliamentary
system
in
the
amended
Constitution does not alter its essentially
presidential character. Article VII on the
presidency starts with this provision: "The
President shall be the head of state and chief
executive of the Republic of the Philippines." Its
last section is an even more emphatic affirmation
that it is a presidential system that obtains in our
government.

PASEI vs. Drilon, 163 SCRA 386

Facts: The petitioner, Philippine Association of

Service Exporters, Inc. (PASEI, for short), a firm
"engaged principally in the recruitment of Filipino
workers, male and female, for overseas
placement," challenges the Constitutional validity
of Department Order No. 1, Series of 1988, of the
Department of Labor and Employment, in the
character of "GUIDELINES GOVERNING THE
TEMPORARY SUSPENSION OF DEPLOYMENT OF
FILIPINO
DOMESTIC
AND
HOUSEHOLD
WORKERS," in this petition for certiorari and
prohibition. The measure is assailed for

"discrimination against males or females," that it

'does not apply to all Filipino workers but only to
domestic helpers and females with similar skills,"
and that it is violative of the right to travel. It was
likewise held to be an invalid exercise of the
lawmaking power, police power being legislative,
and not executive, in character.
In its supplement to the petition, PASEI invokes
Section 3, of Article XIII, of the Constitution,
providing for worker participation "in policy and
decision-making processes affecting their rights
and benefits as may be provided by law." In
addition, it was contended that Department
Order No. 1 was passed in the absence of prior
consultations. It was claimed to be in violation of
the Charter's non-impairment clause, in addition
to the "great and irreparable injury" that PASEI
members face should the Order be further
enforced.
The Solicitor General, on behalf of the respondent
Secretary of Labor and Administrator of the
Philippine Overseas Employment Administration,
invokes the police power of the Philippine State.
Issue: Whether or not deployment ban for
female domestic helpers is valid under our
Constitution.
Held: Yes. It is a valid exercise of police power.
The concept of police power is well-established in
this jurisdiction. It has been defined as the "state
authority to enact legislation that may interfere
with personal liberty or property in order to
promote the general welfare." As defined, it
consists of (1) an imposition of restraint upon

liberty or property, (2) in order to foster the

common good. It is not capable of an exact
definition but has been, purposely, veiled in
general
terms
to
underscore
its
allcomprehensive embrace.
"Its scope, ever-expanding to meet the
exigencies of the times, even to anticipate the
future where it could be done, provides enough
room for an efficient and flexible response to
conditions and circumstances thus assuring the
greatest benefits."
It constitutes an implied limitation on the Bill of
Rights. According to Fernando, it is "rooted in the
conception that men in organizing the state and
imposing upon its government limitations to
safeguard constitutional rights did not intend
thereby to enable an individual citizen or a group
of citizens to obstruct unreasonably the
enactment of such salutary measures calculated
to ensure communal peace, safety, good order,
and welfare." Significantly, the Bill of Rights itself
does not purport to be an absolute guaranty of
individual rights and liberties "Even liberty itself,
the greatest of all rights, is not unrestricted
license to act according to one's will." It is subject
to the far more overriding demands and
requirements of the greater number.