Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 124711 November 3, 1998

MARICALUM MINING CORP., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), SIPALAY MINE FREE
LABOR UNION and CECILIO T. SALUDAR, respondents.

PUNO, J.:
Before us is a special civil action on certiorari under Rule 65 of the Rules of Court to
set aside the decision of the National Labor Relations Commission (NLRC) ordering
Maricalum Mining Corporation 1 to reinstate Cecilio Saludar to his former job or
substantially equivalent position with three (3) years backwages without qualification
and deduction, or to pay the sum of P52,010.55.
The records show that on August 17, 1984 a decision was rendered by Labor Arbiter
Ethelwoldo Ovejera in RAB Case No. 06-0610-83 entitled Sipalay Mine Free Labor
Union and Cecilio T. Saludar v. Marinduque Mining and Industrial Corporation which
ordered the reinstatement of illegally dismissed equipment operator Cecilio Saludar.
The decision was not executed as all the assets of Marinduque had been foreclosed by
the Philippine National Bank (PNB) and the Development Bank of the Philippines
(DBP). These assets were subsequently acquired by petitioner Maricalum while
Marinduque had ceased its operations.
Eight years later, Saludar moved for the issuance of a writ of execution against
Maricalum. On April 14, 1993, Executive Labor Arbiter Oscar Uy granted the motion.
Maricalum appealed to the NLRC contending that it is a different entity from
Marinduque which was the only party to the original action. In its May 19, 1994
decision, the NLRC ruled:
(t)he records will show that Maricalum not only voluntarily recognized and
absorbed the services rendered by the workers under the previous
management of Marinduque Mining and Industrial Corporation, but it also
assumed the obligation of Marinduque to its employees.
Besides, this issue was already settled in the earlier and similar case
of Maricalum Mining and Industrial Corporation v. Xerxes Mission, NLRC
Case No. V-0233-91, where we stated:
Likewise, we note from the records that in the Deed of
Transfer from the PNB and DBP of the assets of Marinduque,

Maricalum shall assume liabilities due or owing to any other

person.
Sec. 3, subsection 3.01 of the said deed states:
1. From and after the effectivity date, Maricalum shall be
solely liable (I) . . .; (II) for any other liability due or owing to
any other person (natural or corporate).
The Deed of Transfer was made retroactive to October 1984, when
Maricalum was duly incorporated. Therefore, under the above general
stipulation there can be no doubt that the awards adjudicated in favor of
Leonardo Munion and Julian Montilla in the NLRC decision of January 29,
1987 come within the purview of the liabilities contemplated in the
aforecited provision and is enforceable against Maricalum. We find no
merit in its contention that it assumed only the assets, and not the
liabilities of Marinduque specially in the light of its having voluntarily
recognized and absorbed the services of the workers under the previous
management of Marinduque Mining and Industrial Corporation. It
undertook to rehire the workers of Marinduque or to pay those who cannot
be rehired their corresponding benefits pursuant to the applicable law or
CBA. It is clearly pointless for Maricalum to insist that it is not a successorin-interest of Marinduque Mining and Industrial Corporation, at least in
relation to the tenural rights of the latter's employees and the satisfaction
of the judgment under execution.
Nonetheless, the NLRC held that since more than five (5) years have elapsed the
judgment could be enforced against Maricalum, not by mere motion but by an action
for revival of judgment.
On September 2, 1994, Saludar filed an Action for Revival of Judgment before the
NLRC Regional Arbitration Branch (Bacolod City). 2 Maricalum again moved to dismiss
alleging that: (1) the complaint was not accompanied by a certificate of non-forum
shopping; (2) that the action was cognizable only by regular courts; and (3) that it was
not a party to the original case.
On December 14, 1994, Saludar filed an Opposition to the Motion to Dismiss,
attaching therewith an Affidavit of Compliance with Supreme Court Circular 04-94 on
non-forum shopping. On December 21, 1994, Labor Arbiter Oscar Uy denied
Maricalum's Motion to Dismiss and directed the parties to submit their position
papers. On April 18, 1995, Labor Arbiter Oscar Uy ruled 3 in favor of Saludar. He held
that the certification of non-forum shopping does not apply to cases falling within the
original and exclusive jurisdiction of the NLRC and labor arbiters because the NLRC is
not a court but an agency performing quasi-judicial functions. He also sustained the
jurisdiction of the labor arbiter over action to revive judgment involving illegal
dismissal. The dispositve portion of the Decision states:
Wherefore, premises considered, judgment is hereby rendered ordering
MARICALUM MINING CORPORATION to reinstate complainant CECILIO T.
SALUDAR to his former job or substantially equivalent position with three
(3) years backwages without qualification and deduction, or the sum of

FIFTY TWO THOUSAND TEN and 55/100 PESOS (P52,010.55). (Emphasis

supplied.)
On May 25, 1995, Maricalum appealed the decision of Labor Arbiter Uy 4. On October
27, 1995, the NLRC affirmed this decision. It held:
Aside from the fact that its liability as a successor entity has already been
settled in our decision on May 19, 1994, which is already final and
executory, the necessity of a hearing to implead Maricalum Mining
Corporation in order to enforce and satisfy an award decreed by the NLRC
had already been ruled by the High Court in this wise: 5
Being an incident in the execution of the final judgment
award, NLRC retained jurisdiction and control over the case
and could issue such orders, as were necessary for the
implementation of that award. It is true that DBP was not an
original party and that it was ordered impleaded only after the
Writs of Execution were not satisfied because the properties
levied upon on execution had been foreclosed extrajudicially
by it, DBP had to be impleaded, however, for the proper
satisfaction of a final judgment. Being an incident in the
execution of the final judgment award, NLRC retained
jurisdiction and control over the case and could issue such
orders as were necessary for the implementation of the
award. Its inclusion as a party could not have been
accomplished at the earlier stages of the proceedings because
at the time of the filing of the complaint, private respondent's
cause of action was only against Lirag.
In the light of the foregoing, the assertion of respondent Maricalum Mining
Corporation that impleading it at this stage of the proceedings infringes
upon its constitutional right to due process loses its worth. Especially
where as ruled earlier by this Commission, Maricalum Mining Corporation
"not only voluntarily recognized and absorbed the service rendered by the
workers under the previous management of Marinduque Mining and
Industrial Corporation, but it also assumed the obligations of Marinduque
to its employees, Maricalum Mining Corporation did not even ask for a
reconsideration of the above ruling.
Lastly, we are not persuaded by respondent's version that the present
action had already prescribed. It is undisputed that the original decision
dated August 17, 1984 became final and executory on September 14,
1984 and when the complaint subject hereof was instituted on September
2, 1994, it has not yet prescribed. 6
Hence, this petition with the following issues for resolution:
1. Whether or not Supreme Court Circular No. 04-94 is mandatory and
should apply to NLRC.

2. Whether or not Saludar's complaint for revival of judgment is fatally

defective and null and void, hence did not stop the running of the
prescriptive period.
3. Whether or not complainant Saludar has cause of action against
petitioner in an action for revival of judgment directed against another
entity, Marinduque Mining and Industrial Corporation (MMIC).
4. Whether or not the NLRC-Bacolod has jurisdiction over an action for
revival of judgment. 7
We now consider the issues.
I
The certificate of non-forum shopping as provided by this Court Circular 04-94 is
mandatory and should accompany pleadings filed before the NLRC. Court Circular No.
04-94 is clear and needs no further interpretation,viz:
. . ., the following requirements, in addition to those in pertinent provisions
of the Rules of Court and other existing circulars, shall be strictly complied
with in the filing of complaints, petitions, applications or other initiatory
pleadings in all courts and agencies other than the Supreme Court and the
Court of Appeals, and shall be subject to the sanctions provided
hereunder:
1. The plaintiff, petitioner, applicant or principal party seeking relief in the
complaint, petition, application or other initiatory pleading shall certify
under oath in such original pleading, or in a sworn certificate annexed
thereto and simultaneously therewith, to the truth of the following facts
and undertakings: (a) he has not heretofore commenced any other action
or proceeding involving the same issues in the Supreme Court, the Court
of Appeals, or any other tribunal or agency; (b) to the best of his
knowledge, no such action or proceeding is pending in the Supreme Court,
the Court of Appeals, or any other tribunal or agency; (c) if there is any
such action or proceeding which is either pending or may have been
terminated, he must state the status thereof; and (d) if he should
thereafter learn that a similar action or proceeding has been filed or is
pending before the Supreme Court, the Court of Appeals, or any other
tribunal or agency, he undertakes to report the fact within five (5) days
therefrom to the court or agency wherein the original pleading and sworn
certification contemplated herein have been filed.
xxx xxx xxx
2. Any violation of this Circular shall be a cause for the dismissal of the
complaint, petition, application or other initiatory pleading, upon motion
and after hearing. . . . . (Emphasis supplied.)
The NLRC is a quasi-judicial agency, hence, initiatory pleadings filed before it should
be accompanied by a certificate of non-forum-shopping.

Nevertheless, in Loyola v. Court of Appeals 8, we held that substantial compliance

with the requirement of the certificate of non-forum shopping is sufficient. We
explained:
(s)ubstantial compliance with the Circular is sufficient. This Circular
expanded or broadened the applicability of Circular No. 28-91 of this
Court. In Gabionza vs. Court of Appeals [G.R. No. 112547, Resolution of
July 1994, 234 SCRA 192] this Court held that substantial compliance
therewith is sufficient for:
It is scarcely necessary to add that Circular No. 28-91 must be
so interpreted and applied to achieve the purposes projected
by the Supreme Court when it promulgated that Circular.
Circular No. 28-91 was designed to serve as an instrument to
promote and facilitate an orderly administration of justice and
should not be interpreted with absolute literalness as to
subvert its ultimate and legitimate objective or the goal of all
rules of procedure-which is to achieve substantial justice as
expeditiously as possible.
xxx xxx xxx
The fact that the Circular requires that it be strictly complied with merely
underscores its mandatory nature in that it cannot be dispensed with or
its requirements altogether disregarded, but it does not thereby interdict
substantial compliance with its provisions under justifiable circumstances.
In the case at bar, it is undisputed that respondent Saludar filed an affidavit of
compliance with SC Circular 04-94 on non-forum shopping albeit a little delayed. This
little delay should not defeat the action for revival of judgment which undeniably was
filed within the ten (10) year prescriptive period. Also, the circumstance that
respondent had painstakingly tried to enforce the favorable judgment he obtained
against petitioner for almost ten (10) years but to no avail, should deter us from
strictly construing the provisions of the Circular. A liberal interpretation of the Circular
would be more in keeping with the objectives of procedural rules which is to "secure a
just, speedy and inexpensive disposition of every action and proceeding." 9
II
We do not agree with petitioner Maricalum's contention that Saludar has no cause of
action against it since the judgment sought to be revived was obtained against
Marinduque. The records show that Maricalum voluntarily absorbed Marinduque's
obligations to its employees. The NLRC found that when the Philippine National Bank
(PNB) and Development Bank of the Philippines (DBP) transferred Marinduque's assets
to Maricalum, the Deed of Transfer contained the proviso that "(f)rom and after the
effectivity date, Maricalum shall be solely liable for any liability due or owing to any
other person (natural or corporate)." 10 Marinduque's liability to respondent Saludar
for unpaid backwages adjudicated in RAB Case No. 06-0610-83 way back in 1984
became final when no appeal was interposed by it. This final judgment then formed
part of the liabilities of Marinduque which Maricalum assumed in the Deed of Transfer.
Thus, it is futile for Maricalum to deny liability it had voluntarily assumed.

III
Finally, we reject the contention of Maricalum that NLRC-Bacolod has no jurisdiction
over an action for revival of judgment. In Aldeguer v. Gemelo 11 we held:
The action in the present case is an original action, and not a mere
incident of the primitive suit or a mere auxiliary and supplementary
remedy. It is a new and independent action for the recovery of a debt
evidenced by the original judgment. In other words, it is an action based
on a judgment, or what is called in English an action upon a judgment.
The American doctrine is uniform in the sense that whereas the remedy
of scire facias, which is a mere incident of the original suit, must be
instituted in the court where said suit was brought (34 C.J. 664-615; 23
Cyc., 1444-1445; 2 Freeman on Judgments, 2272-2273; 1 Black on
Judgments, 578), an action upon a judgment must be brought either in the
same court where said judgment was rendered or in the place where the
plaintiff or defendant resides, or in any other place designated by the
statutes which treat of the venue of actions in general.
xxx xxx xxx
. . . The owner of a judgment may . . . use his judgment as a cause of
action, and bring suit thereon in the same court or any court of competent
jurisdiction, and prosecute such suit to final judgment. (Gould v. Hayden,
63 Ind., 443; Palmer v. Glover, 73 Ind., 529; Campbell v. Martin, 87 Ind.,
577. (Becknell et al. v. Becknell, 110 Ind., 47).
xxx xxx xxx
An action on a judgment may be brought in the court which rendered it, or
in any other court having jurisdiction. Thus the action may be brought in
an inferior court on a judgment obtained in a superior one; and,
conversely, an action lies in a superior court upon a judgment rendered in
an inferior one. It was formerly thought that such an action was a local
one, and must be brought in the county where the records remained; but
it is now held that the action may be brought in any county in which
jurisdiction of defendant's person can be obtained. (Emphasis supplied).
Prescinding from the above decision, private respondent Saludar properly instituted
his action for revival in the NLRC which rendered the judgment sought to be revived. It
is well established that regular courts are bereft of jurisdiction to entertain disputes
involving employer-employee relationship.
IN VIEW WHEREOF, the decision of the NLRC in RAB Case No. 06-08-10512-94 is
AFFIRMED. No costs.
SO ORDERED.
Melo, Mendoza and Martinez, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 124013 June 5, 1998

ROSARIO MANEJA, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MANILA MIDTOWN
HOTEL, respondents.

MARTINEZ, J.:
Assailed in this petition for certiorari under Rule 65 of the Revised Rules of Court are
the Resolution 1 dated June 3, 1994 of the respondent National Labor Relations
Commission in NLRC NCR-00-10-05297-90, entitled "Rosario Maneja,Complainant, vs.
Manila Midtown Hotel, Respondent," which dismissed the illegal dismissal case filed by
petitioner against private respondent company for lack of jurisdiction of the Labor
Arbiter over the case; and its Resolution 2 dated October 20, 1995 denying petitioner's
motion for reconsideration.
Petitioner Rosario Maneja worked with private respondent Manila Midtown Hotel
beginning January, 1985 as a telephone operator. She was a member of the National
Union of Workers in Hotels, Restaurants and Allied Industries (NUWHRAIN) with an
existing Collective Bargaining Agreement (CBA) with private respondent.
In the afternoon of February 13, 1990, a fellow telephone operator, Rowena Loleng
received a Request for Long Distance Call (RLDC) form and a deposit of P500.00 from
a page boy of the hotel for a call by a Japanese guest named Hirota Ieda. The call was
unanswered. The P500.00 deposit was forwarded to the cashier. In the evening, Ieda
again made an RLDC and the page boy collected another P500.00 which was also
given to the operator Loleng. The second call was also unanswered. Loleng passed on
the RLDC to petitioner for follow-up. Petitioner monitored the call.
On February 15, 1990, a hotel cashier inquired about the P1,000.00 deposit made by
Ieda. After a search, Loleng found the first deposit of P500.00 inserted in the guest
folio while the second deposit was eventually discovered inside the folder for
cancelled calls with deposit and official receipts.
When petitioner saw that the second RLDC form was not time-stamped, she
immediately placed it inside the machine which stamped the date "February 15,
1990." Realizing that the RLDC was filed 2 days earlier, she wrote and changed the
date to February 13, 1990. Loleng then delivered the RLDC and the money to the
cashier. The second deposit of P500.00 by Ieda was later returned to him.

On March 7, 1990, the chief telephone operator issued a memorandum 3 to petitioner

and Loleng directing the two to explain the February 15 incident. Petitioner and Loleng
thereafter submitted their written explanation. 4
On March 20, 1990, a written report 5 was submitted by the chief telephone operator,
with the recommendation that the offenses committed by the operators concerned
covered violations of the Offenses Subject to Disciplinary Actions (OSDA): (1) OSDA
2.01: forging, falsifying official document(s), and (2) OSDA 1.11: culpable carelessness
negligence or failure to follow specific instruction(s) or established procedure(s).
On March 23, 1990, petitioner was served a notice of dismissal 6 effective April 1,
1990. Petitioner refused to sign the notice and wrote therein "under protest."
Meanwhile, a criminal case 7 for Falsification of Private Documents and Qualified Theft
was filed before the Office of the City Prosecutor of Manila by private respondent
againts Loleng and petitioner. However, the resolution recommending the filing of a
case for estafa was reversed by 2nd Asst. City Prosecutor Virgilio M. Patag.
On October 2, 1990, petitioner filed a complaint for illegal dismissal against private
respondent before the Labor Arbiter. The complaint was later amended to include a
claim for unpaid wages, unpaid vacation leave conversion and moral damages.
Position papers were filed by the parties. Thereafter, the motion to set the case for
hearing filed by private respondent was granted by the Labor Arbiter and trial on the
merits ensued.
In his decision 8 dated May 29, 1992, Labor Arbiter Oswald Lorenzo found that the
petitioner was illegally dismiised. However, in the decision, the Labor Arbiter stated
that:
Preliminary, we hereby state that on the face of the instant complaint, it is
one that revolves on the matter of the implementation and interpretation
of existing company policies, which per the last par. of Art. 217 of the
Labor Code, as amended, is one within the jurisdictional ambit of the
grievance procedure under the CBA and thereafter, if unresolved, one
proper for voluntary arbitration. This observation is re-entrenched by the
fact, that complainant claims she is a member of NUWRAIN with an
existing CBA with respondent hotel.
On this score alone, this case should have dismissed outright.

Despite the aforequoted preliminary statement, the Labor Arbiter still assumed
jurisdiction "since Labor Arbiters under Article 217 of the same Labor Code, are
conferred original and exclusive jurisdiction of all termination case(sic.)." The
dispositive portion of the decision states that:
WHEREFORE, premises considered, judgment is hereby renrdered as
follows:
(1) Declaring complainant's dismissal by respondent hotel as illegally
effected;

(2) Ordering respondent to immediately reinstate complainant to her

previous position without loss of seniority rights;
(3) Ordering further respondent to pay complainant the full backwages
due her, which is computed as follows:

3/23/90 - 10/31/90 = 7.26/mos.

P2.540 x 7.26/mos. P18,440.40
11/1/90 - 1/7/91 = 2.23/mos.
P3,224.16 x 2.23/mos. 7,189.87
1/8/91 - 4/29/92 = 15.7/mos.
P3,589.16 x 15.7/mos. 56,349.89
P81,980.08
(4) Moreover, respondent is ordered to pay the 13th month pay due the
complainant in the amount of P6,831.67 including moral and exemplary
damages of P15,000.00 and P10,000.00 respectively, as well as attorney's
fees equivalent to ten (10) percent of the total award herein in the amount
of P11,381.17;
(5) Finally, all other claims are hereby dismissed for lack of merit.
SO ORDERED.
Private respondent appealed the decision to the respondent commission on the
ground inter alia that the Laber Arbiter erred in "assuming jurisdiction over the illegal
dismissal case after finding that the case falls within the jurisdictional ambit of the
grievance procedure under the CBA, and if unresolved, proper for voluntary
arbitration."10 An Opposition 11 was filed by petitioner.
In the assailed Resolution 12 dated June 3, 1994, respondent NLRC dismissed the
illegal dismissal case for lack of Jurisdiction of the Labor Arbiter because the same
should have instead been subjected to voluntary arbitration.
Petitioner's motion for reconsideration
merit.

13

was denied by respondent NLRC for lack of

In this petition for certiorari, petitioner ascribes to respondent NLRC grave abuse of
discretion in
1. Ruling that the Labor Arbiter was without jurisdiction over the illegal
dismissal case;

2. Not ruling that private respondent is estopped by laches from

questioning the jurisdiction of the illegal dismissal case;
3. Reversing the decision of the Labor Arbiter based on a technicality
notwithstanding the merits of the case.
Petitioner contents that Article 217(a)(2) and (c) relied upon by respondent NLRC in
divesting the labor arbiter of jurisdiction over the illegal dismissal case, should be
read in conjunction with Article 261 14 of the Labor Code. It is the view of petitioner
that termination cases arising from the interpretation or enforcement policies
pertaining to violations of Offenses Subject to Disciplinary Actions (OSDA), are under
the jurisdiction of the voluntary arbitrator only if these are unresolved in the plantlevel grievance machinery. Petitioner insists that her termination is not an unresolved
grievance as there has been no grievance meeting between the NUWHRAIN union and
the management. The reason for this, petitioner adds, is that it has been a company
practice that termination cases are not anymore referred to the grievance machinery
but directly to the labor arbiter.
In its comment, private respondent argues that the Labor Arbiter should have
dismissed the illegal dismissal case outright after finding that it is within the
jurisdictional ambit of the grievance procedure. Moreover, private respondent states
that the issue of jurisdiction may be raised at any time and at any stage of the
proceedings even on appeal, and is not in estoppel by laches as contended by the
petitioner.
For its part, public respondent, through the Office of the Solicitor General, cited the
ruling of this Court in Sanyo Philippines Workers Union- PSSLU vs. Caizares 15 in
dismissing the case for lack of jurisdiction of the Labor Arbiter.
The legal issue in this case is whether or not the Labor Arbiter has jurisdiction over the
illegal dismissal case.
The respondent Commission, in holding that the Labor Arbiter lacks jurisdiction to
hear the illegal dismissal case, cited as basis therefor Article 217 of the Labor Code,
as amended by Republic Act No. 6715. It said:
White it is conceded that under Article 217(a), Labor Arbiters shall have
original and exclusive jurisdiction over cases involving "termination
disputes," the Supreme Court, in a fairy recent case ruled:
The procedure introduced in RA 6715 of referring certain grievances
originally and exclusively to the grievance machinery, and when not
settled at this level, to a panel of voluntary arbitrators outlined in CBAs
does not only include grievances arising from the interpretation or
implementation of the CBA but applies as well to those arising from the
implementation of company personnel policies. No other body shall take
cognizance of these cases. . . . (Sanyo vs. Caizares, 211 SCRA 361,
372) 16
We Find that the respondent Commission has erroneously interpreted the aforequoted
portion of our ruling in the case of Sanyo, as divesting the Labor Arbiter of jurisdiction
in a termination dispute.

Art. 217 of the Labor Code gives us the clue as to the jurisdiction of the Labor Arbiter,
to wit:
Art. 217. Jurisdiction of Labor Arbiters and the Commission. a) Except as
otherwise provided under this Code the Labor Arbiters shall have original
and exclusive jurisdiction to hear and decided within thirty (30) calendar
days after the submission of the case by the parties for decision without
extension even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement,
those cases that workers may file involving wages,
rates of pay, hours of work and other terms and
conditions of employment;
4. Claims for actual, moral, exemplary and other
forms of damages arising from the employeremployee relations;
5. Cases arising from any violation of Article 264
of this Code, including questions involving the
legality of strikes and lockouts;
6. Except claims for Employees Compensation,
Social Security, Medicare and maternity benefits,
all other claims, arising from employer-employee
relations, including those of persons in domestic
or household service, involving an amount
exceeding five thousand pesos (P5,000.00)
regardless of whether accompanied with a claim
for reinstatement.
b) The commission shall have exclusive appellate jurisdiction over all
cases decided by Labor Arbiters.
c) Cases arising from the interpretation or implementation of collective
bargaining agreements and those arising from the interpretation or
enforcement of company personel policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitration as may be provided in said agreements.
As can be seen from the aforequoted Article, termination cases fall under the original
and exclusive jurisdiction of the Labor Arbiter. It should be noted, however, that in the
opening there appears the phrase: "Except as otherwise provided under this
Code . . . ." It is paragraph (c) of the same Article which respondent Commission has
erroneously interpreted as giving the voluntary arbitrator jurisdiction over the illegal
dismissal case.

However, Article 217 (c) should be read in conjunction with Article 261 of the Labor
Code which grants to voluntary arbitrators original and exclusive jurisdiction to hear
and decide all unresolved grievances arising from the interpretation or
implementation of the collective bargaining agreement and those arising from the
interpretation or enforcement of company personel policies. Note the phrase
"unresolved grievances." In the case at bar, the termination of petitioner is not an
unresolved grievance.
The stance of the Solicitor General in the Sanyo case is totally the reverse of its
posture in the case at bar. InSanyo, the Solicitor General was of the view that a
distinction should be made between a case involving "interpretation or
implementation of Collective Bargaining Agreement" or interpretation or
"enforcement" of company personel policies, on the one hand and a case involving
termination, on the other hand. It argued that the dismissal of the private respondents
does not involve an "interpretation or implementation" of a Collective Bargaining
Agreement or "interpretation or enforcement" of company personel policies but
involves "termination." The Solicitor General further said that where the dispute is just
in the interpretation, implementation or enforcement stage, it may be referred to the
grievance machinery set up the Collective Bargaining Agreement or by voluntary
arbitration. Where there was already actual termination, i.e., violation of rights, it is
already cognizable by the Labor Arbiter. 17 We fully agree with the theory of the
Solicitor General in the Sanyo case, which is radically apposite to its position in this
case.
Moreover, the dismissal of petitioner does not fall within the phrase "grievance arising
from the interpretation or implementation of collective bargaining agreement and
those arising from the interpretation or enforcement of company personel policies,"
the jurisdiction of which pertains to the grievance machinery or thereafter, to a
voluntary arbitrator or panel of voluntary arbitrators. It is to be stressed that under
Article 260 of the Labor Code, which explains the function of the grievance machinery
and voluntary arbitrator. "(T)he parties to a Collective Bargaining Agreement shall
include therein provisions that will ensure the mutual observance of its terms and
conditions. They shall establish a machinery for the adjustment and resolution of
grievances arising from the interpretation or implementation of their Collective
Bargaining Agreement and those arising from the interpretation or enforcement of
company personel policies." Article 260 further provides that the parties to a CBA shall
name or designate their respective representative to the grievance machinery and if
the grievance is unsettled in that level, it shall automatically be refered to the
voluntary arbitrators designated in advance by the parties to a CBA of the union and
the company. It can thus be deduced that only disputes involving the union and the
company shall be referred to the grievance machinery or voluntary arbitrators. 18
In the case at bar, the union does not come into the picture, not having objected or
voiced any dissent to the dismissal of the herein petitioner. The reason for this,
according to petitioner is that "the practice in said Hotel in cases of termination is that
the latter cases are not referred anymore to the grievance committee;" and that "the
terminated employee who wishes to question the legality of his termination usually
goes to the Labor Arbiter for arbitration, whether the termination arose from the
interpretation or enforcement of the company personnel policies or otherwise." 19

As we ruled in Sanyo, "Since there has been an actual termination, the matter falls
within the jurisdiction of the labor Arbiter." The aforequoted doctrine is applicable
foursquare in petitioner's case. The dismissal of the petitioner does not call for the
interpretation or enforcement of company personnel policies but is a termination
dispute which comes under the jurisdiction of the Labor Arbiter.
It should be explained that "company personel policies" are guiding priciples stated in
broad, long-range terms that express the philosophy or beliefs of an organization's top
authority regarding personnel matters. They deal with matters affecting efficiency and
well-being of employees and include, among others, the procedure in the
administration of wages, benefits, promotions, transfer and other personnel
movements which are usually not spelled out in the collective agreement. The usual
source of grievances, however, are the rules and regulations governing disciplinary
actions. 20
The case of Pantranco North Express, Inc. vs. NLRC 21 sheds further light on the issue
of jurisdiction where the Court cited the Sanyo case and quoted the decision of therein
Labor Arbiter Olairez in this manner:
In our honest opinion we have jurisdiction over the complaint on the
following grounds:
First, this is a complaint of illegal dismissal of which original and exclusive
jurisdiction under Article 217 has been conferred to the labor Arbiters. The
interpretation of the CBA or enforcement of the company policy is only
corollary to the complaint of illegal dismissal. Otherwise, an employee
who was on AWOL, or who committed offenses contrary to the personnel
policies(sic) can no longer file a case of illegal discharge is premised on
the interpretation or enforcement of the company policies(sic).
Second. Respondent voluntarily submitted tha case to the jurisdiction of
this labor tribunal. It adduced arguments to the legality of its act, whether
such act may be retirement and/or dismissal, and prayed for reliefs on the
merits of the case. A litigant cannot pray for reliefs on the merits and at
the same time attacks(sic) the jurisdiction of the tribunal. A person cannot
have one's cake and eat it too. . . . .
As to the second ground, petitioner correctly points out that respondent NLRC should
have ruled that private respondent is estopped by laches in questioning the
jurisdiction of the Labor Arbiter.
Clearly, estoppel lies. The issue of jurisdiction was mooted by herein private
respondent's active participation in the proceedings below. In Marquez vs. Secretary of
Labor, 22 the Court said:
. . . . The active participation of the against whom the action was brought,
coupled with his failure to object to the jurisdiction of the court or quasijudicial body where the action is pending, is tantamount to an invocation
of that jurisdiction and a willingness to abide the resolution of the case
and will bar said party from later on impugning the court or body's
jurisdiction.

In the assailed Resolution, 23 respondent NLRC cited La Naval Drug Corporation

vs. Court of Appeals 24 in holding that private respondent is not in estopel. Thus,
The operation of the principle of estoppel on the question of jurisdiction
seemingly depends upon whether the lower court actually had jurisdiction
or not. If it had no jurisdiction, but the case was tried and decided upon
the theory that it had jurisdiction, the parties are not barred, on appeal,
from assailing such jurisdiction, for the same "must exist as a matter of
law, and may not be conferred by consent of the parties or by estoppel" (5
C.J.S., 861-863). However, if the lower court had jurisdiction, and the case
was heard and decided upon a given theory, such, for instance, as that
the court had no jurisdiction, the party who induced it to adopt such
theory will not be permitted, on appeal, to assume an inconsistent
position that the lower court had jurisdiction. Here, the principle of
estoppel applies. The rule that jurisdiction is conferred by law, and does
not depend upon the will of the parties, has no bearing thereon.
(Emphasis ours)
Again, the respondent NLRC has erroneously interpreted our ruling in the La
Naval case. Under the said ruling, estoppel lies in this case. Private respondent is
stopped from questioning the jurisdiction of the Labor Arbiter before the respondent
NLRC having actively participated in the proceedings before the former. At no time
before or during the trial on the merits did private respondent assail the jurisdiction of
the Labor Arbiter. Private respondent took the cue only from the preliminary
statement in the decision of the Labor Arbiter, which was a mere obiter, and raised
the issue of jurisdiction before the Commission. It was then too late. Estoppel had set
in.
Turning now to the merits of the case, We uphold the ruling of the Labor Arbiter that
petitioner was illegally dismissed.
The requisites of a valid dismissal are (1) the dismissal must be for any of the causes
expressed in the Article 282 of the Labor Code, 25 and (2) the employee must be given
an opportunity to be heard and to defend himself. 26 The substantive and procedural
laws must be strictly complied with before a worker can be dismissed from his
employment because what is at stake is not only the employee's position but his
livelihood. 27
Petitioner's dismissal was grounded on culpade carelessness, negligence and failure to
follow specific instruction(s) or established procedure(s) under OSDA 1.11; and,
having forged or falsified official document(s) under OSDA 2.01.
Private respondent blames petitioner for failure to follow established procedure in the
hotel on a guest's request for long distance calls. Petitioner, however, explained that
the usual or established procedures are not followed by the operators and hotel
employees when circumstances warrant. For instance, the RLDC forms and the
deposits are brought by the page boy directly to the operators instead of the cashiers
if the latter are busy and cannot attend to the same. Furthermore, she avers that the
telephone operators are not concious of the serial numbers in the RLDCs and at times,
the used RLDCs are recycled. Even the page boys do not actually check the serial
numbers of all RLDCs in one batch, except for the first and the last.

On the charge of taking of the money by petitioner, it is to be noted that the second
P500.00 deposit made by the Japanese guest Ieda was later discovered to be inserted
in the folder for cancelled calls with deposit and official receipts. Thus, there exists no
basis for personal appropriation by the petitioner of the money involved. Another
reason is the alleged tampering of RLDC No. 862406. 28 While petitioner and her cooperator Loleng admitted that they indeed altered the date appearing therein from
February 15, 1990 to February 13, the same was purposely made to reflect the true
date of the transaction without any malice whatsoever on their part.
As pointed out by Labor Arbiter Oswald b. Lorenzo, thus:
The specifics of the grounds relied by respondent hotel's dismissal of
complainant are those stated in Annex "F" of the latter's POSITION PAPER,
which is the Notice of Dismissal, notably:
1. OSDA 2.01 Forging, falsifying official documents(s)
2. OSDA 1.11 Culpable negligence or failure to follow specific
instruction(s) or established procedure(s)
On this score, we are persuated by the complainant's arguments that
under OSDA 1.11, infractions of this sort is not without qualifications,
which is, that the alleged culpable carelessness, negligence or failure to
follow instruction(s) or established procedure(s), RESULTING IN LOSS OR
DAMAGE TO COMPANY PROPERTY. From the facts obtaining in this case,
there is no quantum of proof whatsoever, except the general allegations in
respondent's POSITION PAPER and other pleadings that loss or damage to
company property resulted from the charged infraction. To our mind, this
is where labor tribunals should come in and help correct interpretation of
company policies which in the enforcement thereof wreaks havoc to the
constitutional guarantee of security of tenure. Apparently, the exercise of
little flexibility by complainant and co-employees which is predicated on
good faith should not be taken against them and more particularly against
the complainant herein. In this case, to sustain the generalized charge of
respondent hotel under OSDA 1.11 would unduly be sanctioning the
imposition of too harsh a penalty which is dismissal.
In the same tenor, the respondent's charge under OSDA 1.11 on the
alleged falsification of private document is also with a qualification, in that
the alleged act of falsification must have been done "IN SUCH A WAY AS
TO MISLEAD THE USER(S) THEREOF." Again, based on the facts of the
complained act, there appeared no one to have been misled on the
change of date from RLDC #862406 FROM 15 TO 13 February 1990.
As a matter of fact, we are in agreement with the jurisprudence cited by
VIRGILIO M. PATAG, the 2nd Asst. City Prosecutor of the City of Manila, who
exculpated complainant MANEJA from the charges of falsification of
private documents and qualified theft under IS No. 90-11083 and marked
Annex. "H" of complainant's POSITION PAPER, when he ruled that an
altercation which makes the document speak the truth cannot be the
foundation of a criminal action. As to the charge of qualified theft, we too
are of the finding, like the city prosecutor above-mentioned that there was

no evidence on the part of MANEJA to have unlawfully taken the P500.00

either from the hotel or from guest IEDA on 13 February 1990 and
moreover, we too, find no evidence that complainant MANEJA had
intention to profit thereby nor had misappropriated the P500.00 in
question. 29
Given the factual circumstances of the case, we cannot deduce dishonesty from the
act and omission of petitioner. Our norms of social justice demand that we credit
employees with the presumption of good faith in the performance of their
duties, 30 especially petitioner who has served private respondent since 1985 up to
1990 without any tinge of dishonesty and was even named "Model Employee" for the
month of April, 1989. 31
Petitioner has been charged with a very serious offense dishonesty. This can
irreparably wreck her life as an employee for no employer will take to its bosom a
dishonest employee. Dismissal is the supreme penalty that can be meted to an
employee and its imposition cannot be justified where the evidence is ambivalent. 32 It
must, therefore, be based on a clear and not on an ambiguous or ambivalent ground.
Any ambiguity or ambivalence on the ground relied upon by an employer in
terminating the services of an employee denies the latter his full right to contest its
legality. Fairness cannot countenance such ambiguity or ambivalence. 33
An employer can terminate the services of an employee only for valid and just causes
which must be supported by clear and convincing evidence. The employer has the
burden of proving that the dismissal was indeed for a valid and just cause. 34 Failure to
do so result in a finding that the dismissal was
unjustified. 35
Finding that there was no just cause for dismissal of petitioner, we now determine if
the rudiments of due process have duly accorded to her.
Well-settled is the dictum that the twin requirements of notice and hearing constitute
the essential elements of due process in the dismissal of employees. It is a cardinal
rule in our jurisdiction that the employer must furnish the employee with two written
notice before the termination of employment can be effected: (a) the first apprises the
employee of the particular acts or omissions for which his dismissal is sought; and, (b)
the second informs the employee of the employer's decision to dismiss him. The
requirement of a hearing, on the other hand, is complied with as long as there was an
opportunity to be heard, and not necessarily that an actual hearing was conducted.36
In the case at bar, petitioner and her co-operator Loleng were issued a memorandum
on March 7, 1990. On March 11, 1990, they submitted their written explanation
thereto. On March 20, 1990, a written report was made with a recommendation that
the offences committed by them were covered by OSDA 1.11 and 2.01. Thereafter, on
March 23, 1990, petitioner was served with a notice of dismissal for said violations
effective April 1, 1990.
An examination of the record reveals that no hearing was ever conducted by private
respondent before petitioner was dismissed. While it may be true that petitioner
submitted a written explanation, no hearing was actually conducted before her
employment was terminated. She was not accorded the opportunity to fully defend
herself.

Consultations or conferences may not be a substitute for the actual holding of a

hearing. Every opportunity and assistance must be accorded to the employee by the
management to enable hom to prepare adequately for his defense, including legal
representation. 37 Considering that petitioner denied having allegedly taken the
second P500.00 deposit of the Japanese guest which was eventually found; and,
having made the alteration of the date on the second RLDC merely to reflect the true
date of the transaction, these circumstances should have at least warranted a
separate hearing to enable petitioner to fully ventilate her side. Absent such hearing,
petitioner's right to due process was clearly violated. 38
It bears stressing that a worker's employment is properly in the constitutional sense.
He cannot be deprived of his work without due process of law. Substantive due
process mandates that an employee can only be dismissed based on just or
authorized causes. Procedural due process requires further that he can only be
dismissed after he has been given an opportunity to be heard. The import of due
process necessitates the compliance of these two aspects.
Accordingly, we hold that the labor arbiter did not err in awarding full backwages in
view of this finding that petitioner was dismissed without just cause and without due
process.
We ruled in the case of Bustamante vs. NLRC 39 that the amount of backwages to be
awarded to an illegally dismissed employee must be computed from the time he was
dismissed to the time he is actually reinstated, without deducting the earnings he
derived elsewhere pending the resolution of the case.
Petitioner is likewise entitled to the thirteenth-month pay. Presidential Decree No.851,
as amended by Memorandum Order No. 28, provides that employees are entitled to
the thirteenth-month pay benefit regardless of their designation and irrespective of
the method by which their wages are paid. 40
The award of moral and exemplary damages to petitioner is also warranted where
there is lack of due process in effecting the dismissal.
Where the termination of the services of an employee is attended by fraud or bad
faith on the part of the employer, as when the latter knowingly made false allegations
of a supposed valid cause when none existed, moral and exemplary damages may be
awarded in favor of the former. 41
The anti-social and oppressive abuse of its right to investigate and dismiss its
employees constitute a violation of Article 1701 of the New Civil Code which prohibits
acts of oppression by either capital or labor against the other, and Article 21 on
human relations. The grant of moral damages to the employees by reason of such
conduct on the part of the company is sanctioned by Article 2219, No. 10 of the Civil
Code, which allows recovery of such damages in actions reffered to in Article 21. 42
The award of attorney's fees amounting to ten percent (10%) of the total award by the
labor arbiter is justified under Article 111 of the Labor Code.
WHEREFORE, premises considered, the petition is GRANTED and the assailed
resolutions of the respondent National Labor Relations Commission dated June 3, 1994

and October 20, 1995 are hereby REVERSED AND SET ASIDE. The decision dated May
29, 1992 of the Labor Arbiter is therefore REINSTATED.
SO ORDERED.
Regalado, Puno and Martinez, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 100158 June 2, 1992

ST. SCHOLASTICA'S COLLEGE, petitioner,
vs.
HON. RUBEN TORRES, in his capacity as SECRETARY OF LABOR AND
EMPLOYMENT, and SAMAHANG NG MANGGAGAWANG PANG-EDUKASYON SA
STA. ESKOLASTIKA-NAFTEU, respondents.

BELLOSILLO, J.:
The principal issue to be resolved in this recourse is whether striking union members
terminated for abandonment of work after failing to comply with return-to-work orders
of the Secretary of Labor and Employment (SECRETARY, for brevity) should by law be
reinstated.
On 20 July 1990, petitioner St. Scholastica's College (COLLEGE, for brevity) and private
respondent Samahan ng Manggagawang Pang-Edukasyon sa Sta. Eskolastika-NAFTEU
(UNION, for brevity) initiated negotiations for a first-ever collective bargaining
agreement. A deadlock in the negotiations prompted the UNION to file on 4 October
1990 a Notice of Strike with the Department of Labor and Employment (DEPARTMENT,
for brevity), docketed as NCMB-NCR-NS-10-826.
On 5 November 1990, the UNION declared a strike which paralyzed the operations of
the COLLEGE. Affecting as it did the interest of the students, public respondent
SECRETARY immediately assumed jurisdiction over the labor dispute and issued on the
same day, 5 November 1990, a return-to-work order. The following day, 6 November
1990, instead of returning to work, the UNION filed a motion for reconsideration of the
return-to-work order questioning inter alia the assumption of jurisdiction by the
SECRETARY over the labor dispute.
On 9 November 1990, the COLLEGE sent individual letters to the striking employees
enjoining them to return to work not later than 8:00 o'clock A.M. of 12 November 1990
and, at the same time, giving notice to some twenty-three (23) workers that their

return would be without prejudice to the filing of appropriate charges against them. In
response, the UNION presented a list of (6) demands to the COLLEGE in a dialogue
conducted on 11 November 1990. The most important of these demands was the
unconditional acceptance back to work of the striking employees. But these were
flatly rejected.
Likewise, on 9 November 1990, respondent SECRETARY denied reconsideration of his
return-to-work order and sternly warned the striking employees to comply with its
terms. On 12 November 1990, the UNION received the Order.
Thereafter, particularly on 14 and 15 November 1990, the parties held conciliation
meetings before the National Conciliation and Mediation Board where the UNION
pruned down its demands to three (3), viz.: that striking employees be reinstated
under the same terms and conditions before the strike; that no retaliatory or
disciplinary action be taken against them; and, that CBA negotiations be continued.
However, these efforts proved futile as the COLLEGE remained steadfast in its position
that any return-to-work offer should be unconditional.
On 16 November 1990, the COLLEGE manifested to respondent SECRETARY that the
UNION continued to defy his return-to-work order of 5 November 1990 so that
"appropriate steps under the said circumstances" may be undertaken by him. 1
On 23 November 1990, the COLLEGE mailed individual notices of termination to the
striking employees, which were received on 26 November 1990, or later. The UNION
officers and members then tried to return to work but were no longer accepted by the
COLLEGE.
On 5 December 1990, a Complaint for Illegal Strike was filed against the UNION, its
officers and several of its members before the National Labor Relations Commission
(NLRC), docketed as NLRC Case No. 00-12-06256-90.
The UNION moved for the enforcement of the return-to-work order before respondent
SECRETARY, citing "selective acceptance of returning strikers" by the COLLEGE. It also
sought dismissal of the complaint. Since then, no further hearings were conducted.
Respondent SECRETARY required the parties to submit their respective position
papers. The COLLEGE prayed that respondent SECRETARY uphold the dismissal of the
employees who defied his return-to-work order.
On 12 April 1991, respondent SECRETARY issued the assailed Order which, inter
alia, directed the reinstatement of striking UNION members, premised on his finding
that no violent or otherwise illegal act accompanied the conduct of the strike and that
a fledgling UNION like private respondent was "naturally expected to exhibit unbridled
if inexperienced enthusiasm, in asserting its existence". 2 Nevertheless, the aforesaid
Order held UNION officers responsible for the violation of the return-to-work orders of
5 and 9 November 1990 and, correspondingly, sustained their termination.
Both parties moved for partial reconsideration of the Order, with petitioner COLLEGE
questioning the wisdom of the reinstatement of striking UNION members, and private
respondent UNION, the dismissal of its officers.

On 31 May 1991, in a Resolution, respondent SECRETARY denied both motions. Hence,

this Petition for Certiorari, with Prayer for the Issuance of a Temporary Restraining
Order.
On 26 June 1991, We restrained the SECRETARY from enforcing his assailed Orders
insofar as they directed the reinstatement of the striking workers previously
terminated.
Petitioner questions the assumption by respondent SECRETARY of jurisdiction to
decide on termination disputes, maintaining that such jurisdiction is vested instead in
the Labor Arbiter pursuant to Art. 217 of the Labor Code, thus
Art. 217. Jurisdiction of Labor Arbiters and the Commission. (a) Except
as otherwise provided under this Code, the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide, within thirty (30)
calendar days after the submission of the case by the parties for decision
without extension, the following cases involving all workers, whether
agricultural or non-agricultural: . . . 2. Termination disputes . . . 5. Cases
arising from any violation of Article 264 of this Code, including questions
on the legality of strikes and lock-outs . . .
In support of its position, petitioner invokes Our ruling in PAL v. Secretary of Labor and
Employment 3 where We held:
The labor Secretary exceeded his jurisdiction when he restrained PAL from
taking disciplinary measures against its guilty employees, for, under Art.
263 of the Labor Code, all that the Secretary may enjoin is the holding of
the strike but not the company's right to take action against union officers
who participated in the illegal strike and committed illegal acts.
Petitioner further contends that following the doctrine laid down in Sarmiento v.
Tuico 4 and Union of Filipro Employees v. Nestle Philippines, Inc., 5 workers who refuse
to obey a return-to-work order are not entitled to be paid for work not done, or to
reinstatement to the positions they have abandoned of their refusal to return thereto
as ordered.
Taking a contrary stand, private respondent UNION pleads for reinstatement of its
dismissed officers considering that the act of the UNION in continuing with its picket
was never characterized as a "brazen disregard of successive legal orders", which was
readily apparent in Union Filipro Employees v. Nestle Philippines, Inc., supra, nor was
it a willful refusal to return to work, which was the basis of the ruling in Sarmiento v.
Tuico, supra. The failure of UNION officers and members to immediately comply with
the return-to-work orders was not because they wanted to defy said orders; rather,
they held the view that academic institutions were not industries indispensable to the
national interest. When respondent SECRETARY denied their motion for
reconsideration, however, the UNION intimated that efforts were immediately initiated
to fashion out a reasonable return-to-work agreement with the COLLEGE, albeit, if
failed.
The issue on whether respondent SECRETARY has the power to assume jurisdiction
over a labor dispute and its incidental controversies, causing or likely to cause a strike
or lockout in an industry indispensable to the national interest, was already settled

in International Pharmaceuticals, Inc. v. Secretary of Labor and

Employment. 6 Therein, We ruled that:
. . . [T]he Secretary was explicitly granted by Article 263 (g) of the Labor
Code the authority to assume jurisdiction over a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to the
national interest, and decide the same accordingly. Necessarily, this
authority to assume jurisdiction over the said labor dispute must include
and extend to all questions and include and extend to all questions and
controversies arising therefrom, including cases over which the Labor
Arbiter has exclusive jurisdiction.
And rightly so, for, as found in the aforesaid case, Article 217 of the Labor Code did
contemplate of exceptions thereto where the SECRETARY is authorized to assume
jurisdiction over a labor dispute otherwise belonging exclusively to the Labor Arbiter.
This is readily evident from its opening proviso reading "(e)xcept as otherwise
provided under this Code . . .
Previously, We held that Article 263 (g) of the Labor Code was broad enough to give
the Secretary of Labor and Employment the power to take jurisdiction over an issue
involving unfair labor practice. 7
At first glance, the rulings above stated seem to run counter to that of PAL v.
Secretary of Labor and Employment, supra, which was cited by petitioner. But the
conflict is only apparent, not real.
To recall, We ruled in the latter case that the jurisdiction of the Secretary of Labor and
Employment in assumption and/or certification cases is limited to the issues that are
involved in the disputes or to those that are submitted to him for resolution. The
seeming difference is, however, reconcilable. Since the matter on the legality or
illegality of the strike was never submitted to him for resolution, he was thus found to
have exceeded his jurisdiction when he restrained the employer from taking
disciplinary action against employees who staged an illegal strike.
Before the Secretary of Labor and Employment may take cognizance of an issue which
is merely incidental to the labor dispute, therefore, the same must be involved in the
labor disputed itself, or otherwise submitted to him for resolution. If it was not, as was
the case in PAL v. Secretary or Labor and Employment, supra, and he nevertheless
acted on it, that assumption of jurisdiction is tantamount to a grave abuse of
discretion. Otherwise, the ruling in International Pharmaceuticals, Inc. v. Secretary of
Labor and Employment, supra, will apply.
The submission of an incidental issue of a labor dispute, in assumption and/or
certification cases, to the Secretary of Labor and Employment for his resolution is thus
one of the instances referred to whereby the latter may exercise concurrent
jurisdiction together with the Labor Arbiters.
In the instant petition, the COLLEGE in its Manifestation, dated 16 November 1990,
asked the "Secretary of Labor to take the appropriate steps under the said
circumstances." It likewise prayed in its position paper that respondent SECRETARY
uphold its termination of the striking employees. Upon the other hand, the UNION
questioned the termination of its officers and members before respondent SECRETARY

by moving for the enforcement of the return-to-work orders. There is no dispute then
that the issue on the legality of the termination of striking employees was properly
submitted to respondent SECRETARY for resolution.
Such an interpretation will be in consonance with the intention of our labor authorities
to provide workers immediate access to their rights and benefits without being
inconvenienced by the arbitration and litigation process that prove to be not only
nerve-wracking, but financially burdensome in the long run. Social justice legislation,
to be truly meaningful and rewarding to our workers, must not be hampered in its
application by long-winded arbitration and litigation. Rights must be asserted and
benefits received with the least inconvenience. For, labor laws are meant to promote,
not defeat, social justice (Maternity Children's Hospital v. Hon. Secretary of
Labor ). 8 After all, Art. 4 of the Labor Code does state that all doubts in the
implementation and interpretation of its provisions, including its implementing rules
and regulations, shall be resolved in favor of labor.
We now come to the more pivotal question of whether striking union members,
terminated for abandonment of work after failing to comply strictly with a return-towork order, should be reinstated.
We quote hereunder the pertinent provisions of law which govern the effects of
defying a return-to-work order:
1. Article 263 (g) of the Labor Code
Art. 263. Strikes, picketing, and lockouts. . . . (g) When, in his opinion,
there exists a labor dispute causing or likely to cause a strike or lockout in
an industry indispensable to the national interest, the Secretary of Labor
and Employment may assume jurisdiction over the dispute and decide it
or certify the same to the Commission for compulsory arbitration. Such
assumption or certification shall have the effect of automatically enjoining
the intended or impending strike or lockout as specified in the assumption
or certification order. If one has already taken place at the time of
assumption or certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout. The Secretary of Labor and
Employment or the Commission may seek the assistance of law
enforcement agencies to ensure compliance with this provision as well as
with such orders as he may issue to enforce the same . . . (as amended by
Sec. 27, R.A. 6715; emphasis supplied).
2. Article 264, same Labor Code
Art. 264. Prohibited activities. (a) No labor organization or employer
shall declare a strike or lockout without first having bargained collectively
in accordance with Title VII of this Book or without first having filed the
notice required in the preceding Article or without the necessary strike or
lockout vote first having been obtained and reported to the Ministry.
No strike or lockout shall be declared after assumption of jurisdiction by
the President or the Minister or after certification or submission of the

dispute to compulsory or voluntary arbitration or during the pendency of

cases involving the same grounds for the strike or lockout
. . . (emphasis supplied).
Any worker whose employment has been terminated as consequence of
an unlawful lockout shall be entitled to reinstatement with full back
wages. Any union officer who knowingly participates in an illegal strike
and any worker or union officer who knowingly participates in the
commission of illegal acts during a strike may be declared to have lost his
employment status: Provided, That mere participation of a worker in a
lawful strike shall not constitute sufficient ground for termination of his
employment, even if a replacement had been hired by the employer
during such lawful strike . . . (emphasis supplied).
3. Section 6, Rule IX, of the New Rules of Procedure of the NLRC (which took effect on
31 August 1990)
Sec. 6. Effects of Defiance. Non-compliance with the certification order
of the Secretary of Labor and Employment or a return to work order of the
Commission shall be considered an illegal act committed in the course of
the strike or lockout and shall authorize the Secretary of Labor and
Employment or the Commission, as the case may be, to enforce the
same under pain or loss of employment status or entitlement to full
employment benefits from the locking-out employer or backwages,
damages and/or other positive and/or affirmative reliefs, even to criminal
prosecution against the liable parties . . . (emphasis supplied).
Private respondent UNION maintains that the reason they failed to immediately
comply with the return-to-work order of 5 November 1990 was because they
questioned the assumption of jurisdiction of respondent SECRETARY. They were of the
impression that being an academic institution, the school could not be considered an
industry indispensable to national interest, and that pending resolution of the issue,
they were under no obligation to immediately return to work.
This position of the UNION is simply flawed. Article 263 (g) of the Labor Code provides
that if a strike has already taken place at the time of assumption, "all striking . . .
employees shall immediately return to work." This means that by its very terms, a
return-to-work order is immediately effective and executory notwithstanding the filing
of a motion for reconsideration (University of Sto. Tomas v. NLRC). 9 It must be strictly
complied with even during the pendency of any petition questioning its validity (Union
of Filipro Employees v. Nestle Philippines, Inc., supra). After all, the assumption and/or
certification order is issued in the exercise of respondent SECRETARY's compulsive
power of arbitration and, until set aside, must therefore be immediately complied
with.
The rationale for this rule is explained in University of Sto. Tomas v. NLRC, supra,
citing Philippine Air Lines Employees Association v. Philippine Air Lines, Inc., 10 thus
To say that its (return-to-work order) effectivity must wait affirmance in a
motion for reconsideration is not only to emasculate it but indeed to
defeat its import, for by then the deadline fixed for the return to work

would, in the ordinary course, have already passed and hence can no
longer be affirmed insofar as the time element is concerned.
Moreover, the assumption of jurisdiction by the Secretary of Labor and Employment
over labor disputes involving academic institutions was already upheld in Philippine
School of Business Administration v. Noriel 11 where We ruled thus:
There is no doubt that the on-going labor dispute at the school adversely
affects the national interest. The school is a duly registered educational
institution of higher learning with more or less 9,000 students. The ongoing work stoppage at the school unduly prejudices the students and will
entail great loss in terms of time, effort and money to all concerned. More
important, it is not amiss to mention that the school is engaged in the
promotion of the physical, intellectual and emotional well-being of the
country's youth.
Respondent UNION's failure to immediately comply with the return-to-work order of 5
November 1990, therefore, cannot be condoned.
The respective liabilities of striking union officers and members who failed to
immediately comply with the return-to-work order is outlined in Art. 264 of the Labor
Code which provides that any declaration of a strike or lockout after the Secretary of
Labor and Employment has assumed jurisdiction over the labor dispute is considered
an illegal. act. Any worker or union officer who knowingly participates in a strike
defying a return-to-work order may, consequently, "be declared to have lost his
employment status."
Section 6 Rule IX, of the New Rules of Procedure of the NLRC, which provides the
penalties for defying a certification order of the Secretary of Labor or a return-to-work
order of the Commission, also reiterates the same penalty. It specifically states that
non-compliance with the aforesaid orders, which is considered an illegal act, "shall
authorize the Secretary of Labor and Employment or the Commission . . . to enforce
the same under pain of loss of employment status." Under the Labor Code,
assumption and/or certification orders are similarly treated.
Thus, we held in Sarmiento v. Tuico, supra, that by insisting on staging the restrained
strike and defiantly picketing the company premises to prevent the resumption of
operations, the strikers have forfeited their right to be readmitted, having abandoned
their positions, and so could be validly replaced.
We recently reiterated this stance in Federation of Free Workers v. Inciong, 12 wherein
we cited Union of Filipro Employees v. Nestle Philippines, Inc., supra, thus
A strike undertaken despite the issuance by the Secretary of Labor of an
assumption or certification order becomes a prohibited activity and thus
illegal, pursuant to the second paragraph of Art. 264 of the Labor Code as
amended . . . The union officers and members, as a result, are deemed to
have lost their employment status for having knowingly participated in an
illegal act.

Despite knowledge of the ruling in Sarmiento v. Tuico, supra, records of the case
reveal that private respondent UNION opted to defy not only the return-to-work order
of 5 November 1990 but also that of 9 November 1990.
While they claim that after receiving copy of the Order of 9 November 1990 initiatives
were immediately undertaken to fashion out a return-to-work agreement with
management, still, the unrebutted evidence remains that the striking union officers
and members tried to return to work only eleven (11) days after the conciliation
meetings ended in failure, or twenty (20) days after they received copy of the first
return-to-work order on 5 November 1990.
The sympathy of the Court which, as a rule, is on the side of the laboring classes
(Reliance Surety & Insurance Co., Inc. v. NLRC), 13 cannot be extended to the striking
union officers and members in the instant petition. There was willful disobedience not
only to one but two return-to-work orders. Considering that the UNION consisted
mainly of teachers, who are supposed to be well-lettered and well-informed, the Court
cannot overlook the plain arrogance and pride displayed by the UNION in this labor
dispute. Despite containing threats of disciplinary action against some union officers
and members who actively participated in the strike, the letter dated 9 November
1990 sent by the COLLEGE enjoining the union officers and members to return to work
on 12 November 1990 presented the workers an opportunity to return to work under
the same terms and conditions or prior to the strike. Yet, the UNION decided to ignore
the same. The COLLEGE, correspondingly, had every right to terminate the services of
those who chose to disregard the return-to-work orders issued by respondent
SECRETARY in order to protect the interests of its students who form part of the youth
of the land.
Lastly, the UNION officers and members also argue that the doctrine laid down
in Sarmiento v. Tuico, supra, and Union of Filipro Employees v. Nestle, Philippines, Inc.,
supra, cannot be made applicable to them because in the latter two cases, workers
defied the return-to-work orders for more than five (5) months. Their defiance of the
return-to-work order, it is said, did not last more than a month.
Again, this line of argument must be rejected. It is clear from the provisions above
quoted that from the moment a worker defies a return-to-work order, he is deemed to
have abandoned his job. It is already in itself knowingly participating in an illegal act.
Otherwise, the worker will just simply refuse to return to his work and cause a
standstill in the company operations while retaining the positions they refuse to
discharge or allow the management to fill (Sarmiento v. Tuico, supra). Suffice it to say,
in Federation of Free Workers v. Inciong, supra, the workers were terminated from
work after defying the return-to-work order for only nine (9) days. It is indeed
inconceivable that an employee, despite a return-to-work order, will be allowed in the
interim to stand akimbo and wait until five (5) orders shall have been issued for their
return before they report back to work. This is absurd.
In fine, respondent SECRETARY gravely abused his discretion when he ordered the
reinstatement of striking union members who refused to report back to work after he
issued two (2) return-to-work orders, which in itself is knowingly participating in an
illegal act. The Order in question is, certainly, contrary to existing law and
jurisprudence.

WHEREFORE, the Petition for Certiorari is hereby GRANTED. The Order of 12 April 1991
and the Resolution 31 May 1991 both issued by respondent Secretary of Labor and
Employment are SET ASIDE insofar as they order the reinstatement of striking union
members terminated by petitioner, and the temporary restraining order We issued on
June 26, 1991, is made permanent.
No costs.
SO ORDERED.
Cruz, Grio-Aquino and Medialdea, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-26461

November 27, 1968

ASSOCIATED LABOR UNION, petitioner,

vs.
JUDGE JOSE C. BORROMEO and ANTONIO LUA doing business under the name
CEBU HOME & INDUSTRIAL SUPPLY, respondents.
Seno, Mendoza, Ruiz and Associates for petitioner.
Diores and Escareal Law Office for respondents.
CONCEPCION, C.J.:
Original action for certiorari and prohibition, with preliminary injunction, to annul writs
of preliminary injunction issued in Case No. R-9414 of the Court of First Instance of
Cebu, entitled "Cebu Home and Industrial Supply and Antonio Lua vs. Associated
Labor Union", and to restrain the Honorable Jose C. Borromeo, as Judge of that Court,
from hearing said case.
Petitioner herein, Associated Labor Union hereinafter referred to as ALU is a duly
registered labor organization. Among the members thereof are employees of Superior
Gas and Equipment Company of Cebu, Inc. hereinafter referred to as SUGECO a
domestic corporation with offices at Juan Luna Street, Cebu City and a factory plant in
Basak, Mandaue, province of Cebu. On January 1, 1965, ALU and SUGECO entered into
a collective bargaining contract, effective up to January 1, 1966. Negotiations for the
renewal of the contract between ALU and SUGECO were begun prior to the date last
mentioned. While said negotiations were going on, late in February, 1966, twelve (12)
SUGECO employees resigned from ALU. Thereupon, the negotiations stopped. On
March 1, 1966, ALU wrote SUGECO requesting that the twelve (12) resigned
employees be not allowed to report for work unless they produced a clearance from
ALU;1 but this request was immediately rejected by SUGECO, upon the ground that it
would cause irreparable injury, that the bargaining contract had lapsed already, and
that SUGECO could no longer demand said clearance from its employees. SUGECO

intimated, however, that, should the twelve (12) men rejoin ALU, negotiations "for the
renewal of the collective bargaining contract" could be resumed.
On the same date, ALU wrote SUGECO charging that the latter was bargaining in bad
faith and that its supervisors had campaigned for the resignation of ALU members, as
well as serving notice that, unless these unfair labor practice acts were stopped
immediately and a collective bargaining contract between SUGECO and ALU forthwith
entered into, the latter would declare a strike and establish the corresponding picket
lines "in any place where your business may be found." Counsel for SUGECO replied to
the ALU, on March 3, 1966, stating that, with the resignation of the aforementioned
ALU members, ALU no longer represented the majority of the SUGECO employees for
purposes of negotiation and recognition.
On March 4, 1966, ALU struck and picketed the SUGECO plant in Mandaue. The next
day, March 5, SUGECO commenced Civil Case No. R-9221 of the Court of First Instance
of Cebu, against ALU, to restrain the same from picketing said plant and the SUGECO
offices at Cebu City and elsewhere in the Philippines. Forthwith, the Honorable
Amador E. Gomez, as Judge of the Court of First Instance of Cebu, Branch II, caused to
be issued, ex parte, the writ of preliminary injunction prayed for by SUGECO.
On the same date,2 ALU preferred, in the Court of Industrial Relations hereinafter
referred to as CIR unfair labor practice charges against SUGECO, its general manager,
Concepcion Y. Lua hereinafter referred to as Mrs. Lua and its two (2) supervisors,
alleging, inter alia, that these respondents had coerced and exerted pressure upon the
aforementioned ALU members to resign, as they did resign from ALU, and that their
resignations were seized upon by SUGECO to refuse further negotiations with ALU. On
April 29, 1966, an acting prosecutor of the CIR filed therein against SUGECO the
corresponding complaint for unfair labor practice.3
Meanwhile, ALU had moved for a reconsideration of the order of Judge Gomez, dated
March 5, 1966, sanctioning the issuance of the writ of preliminary injunction against
ALU. This motion was later denied by Judge Jose C. Borromeo, who presided Branch IV
of the Court of First Instance of Cebu.4 Hence, on May 9, 1966, ALU instituted Case No.
L-25999 of the Supreme Court, for certiorari and prohibition, with preliminary
injunction, against Judges Gomez and Borromeo and the SUGECO, and prayed therein
that the CFI of Cebu be declared without jurisdiction over the subject-matter of said
Case No. R-9221; that the writ of preliminary injunction therein issued be annulled;
that Judges Gomez and Borromeo be directed to dismiss said case; and that,
meanwhile, they be ordered to desist from further proceedings in said case, and from
enforcing the writ aforementioned. On May 16, 1966, we issued the writ of preliminary
injunction sought by ALU in L-25999. Subsequently, or on February 9, 1967, we
rendered judgment therein in favor of ALU, annulling the writ of preliminary injunction
issued in said Case No. R-9221, on March 5, 1966, directing respondent Judges to
dismiss the same, and declaring permanent the writ of preliminary injunction issued
by us on May 16, 1966.
Soon after the issuance of the latter writ, ALU resumed the picketing of the SUGECO
plant in Mandaue. Moreover, it began to picket the house of Mrs. Lua, SUGECO's
general manager, and her husband Antonio Lua hereinafter referred to as Mr. Lua
at Abellana Street, Cebu City, and the store of the Cebu Home and Industrial Supply
hereinafter referred to as Cebu Home at Gonzalez Street, Cebu City. The Cebu

Home, which belongs to and is managed by Mr. Lua, deals in general merchandise,
among which are oxygen, acetylene and cooking gas produced by SUGECO. On June
21, 1966, Cebu Home and Mr. Lua hereinafter referred to as respondents filed a
complaint, docketed as Civil Case No. 9414 of the CFI of Cebu, against ALU, to restrain
the latter from picketing the store and residence aforementioned and to recover
damages. Thereupon, Judge Borromeo issued an order requiring the ALU to show
cause why the writ sought should not be issued. In a memorandum filed on June 25,
1966 and a motion to dismiss dated June 29, 1966, the ALU assailed the Court's
jurisdiction to hear the case upon the ground that it had grown out of a labor dispute.
This, notwithstanding, on June 30, 1966, Judge Borromeo issued an order the
dispositive part of which reads:
WHEREFORE, upon filing of a bond by the petitioners5 in the amount of P3,000.00 to
answer for damages which the respondent6 may be entitled, let a writ of preliminary
injunction be issued, restraining the respondent, its officers, employees, agents or
persons acting in its behalf:
1) From picketing the office of the Cebu Home and Industrial Supply in Gonzales
Street, Cebu City and the residence of the petitioner Antonio Lua in Abellana Street,
Cebu City;
2) From preventing the employees of the petitioners from entering inside or going out
the office of the Cebu Home and Industrial Supply and the residence of the petitioner
Antonio Lua;
3) From stopping the car, truck or other vehicles entering or going out the office of
Cebu Home and Industrial Supply and the residence of Antonio Lua;
4) From preventing the sale and distribution by the petitioners of its merchandise in
connection with its business; and
5) From performing acts which cause disturbance of the tranquility and privacy of the
petitioner and his family.
On July 4, 1966, respondents herein moved to amend the foregoing order so as to
broaden its scope. Upon the other hand, on July 6, 1966, ALU sought a reconsideration
of said order and the lifting of the writ of preliminary injunction issued on June 30,
1966. Acting upon a motion to amend of respondents herein, Judge Borromeo issued,
on July 22, 1966, another order, from which we quote:
Considering the evidence presented and the facts stated in the previous order of the
Court, it is believed that the petition is justified and that the acts complained of, if not
restrained, will render the writ of preliminary injunction ineffective.
WHEREFORE, in connection with the writ of preliminary injunction which was
previously issued, the respondent union, its members, agents or persons acting in its
behalf are hereby restrained:
a) From preventing the petitioners, their employees or representatives from unloading
their merchandise and other supplies coming from Manila or other places and from
hauling them from the waterfront for the purpose of delivering them to the place of
the petitioners;

b) From preventing the petitioners or their representatives from delivering and loading
their empty tanks and other supplies to the boat or other means of transportation for
Manila or other places; and
c) From preventing, obstructing or molesting the petitioners, their employees or
representatives from performing acts in connection with their business.
On July 25, 1966, Judge Borromeo denied ALU's motion to dismiss Case No. R-9414
and to reconsider his order and dissolve the writ of preliminary injunction of June 30,
1966. Thereupon, or on August 26, 1966, ALU commenced the present action
for certiorari and prohibition with preliminary injunction, to annul the writs of
preliminary injunction issued, on June 30 and July 22, 1966, in Case No. R-9414 and to
restrain the lower court from hearing the same.
ALU maintains that the lower Court has no jurisdiction over Case No. R-9414 because
it had grown out of a labor dispute, is intimately connected with an unfair labor
practice case pending before the CIR and involves a strike the injunction against
which had already been lifted by the Supreme Court in G.R. No. L-25999. 7 Moreover,
ALU claims that even if the lower court had jurisdiction over Case No. R-9414, the
writs of preliminary injunction issued therein are null and void, not only because of
said lack of jurisdiction, but, also, because it failed to observe the requirements of
Sec. 9(f) of Republic Act No. 875, as well as the provisions of Sec. 9 (d) (5) of the same
Act, requiring findings of facts on matters enumerated therein.
Upon the other hand, respondents argue that the issue in the lower court does not fall
within the jurisdiction of the CIR, there being no employer-employee relationship and
"no labor dispute" between the ALU members and Cebu Home; and that, at any rate,
the SUGECO products distributed and sold by Cebu Home, came, not from the
SUGECO plant in Mandaue, but from other parts of the Philippines. Respondents
further deny that the residence of Mr. Lua was being used as a place to store and refill
SUGECO gas for resale.
Respondents' pretense is untenable. To begin with, Section 5 (a) of Republic Act No.
8758 vests in the Court of Industrial Relations exclusive jurisdiction over the
prevention of any unfair labor practice. Moreover, for an issue "concerning terms,
tenure or conditions of employment, or concerning the association or representation
of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms
or conditions of employment" to partake of the nature of a "labor dispute", it is not
necessary that "the disputants stand in the proximate relation of employer and
employee."9
Then, again, in order to apply the provisions of Sec. 9 of Republic Act No. 875,
governing the conditions under which "any restraining order" or "temporary or
permanent injunction" may issue in any "case involving or growing out of a labor
dispute", it is not indispensable that the persons involved in the case be "employees
of the same employer", although this is the usual case. Sec. 9,10 likewise, governs
cases involving persons: 1) "who are engaged in the same industry, trade, craft, or
occupation"; or 2) "who ... have direct or indirect interests therein", or 3) "who are
members of the same or an affiliated organization of employers or employees"; or 4)
"when the case involves any conflicting or competing interests in a "labor dispute" (as
hereinbefore defined) or "persons participating or interested" therein (as hereinafter

defined)". Furthermore, "a person or association shall be held to be a person

participating or interested in a labor dispute if relief is sought against him or it" and
"he or it isengaged in the same industry, trade, craft, or occupation in which such
dispute occurs, or has a direct or indirectinterest therein, or is a member, officer, or
agent of any association composed in whole or in part of employees or employers
engaged in such industry, trade, craft, or occupation."11
Now, then, there is no dispute regarding the existence of a labor dispute between the
ALU and SUGECO-Cebu; that SUGECO's general manager, Mrs. Lua, is the wife of the
owner and manager of Cebu Home, Antonio Lua; and that Cebu Home is engaged in
the marketing of SUGECO products. It is, likewise, clear that as managing member of
the conjugal partnership between him and his wife, Mr. Lua has an interest in the
management by Mrs. Lua of the business of SUGECO and in the success or failure of
her controversy with the ALU, considering that the result thereof may affect the
condition of said conjugal partnership. Similarly, as a distributor of SUGECO products,
the Cebu Home has, at least, an indirect interest in the labor dispute between
SUGECO and the ALUand in Case No. R-9221. In other words, respondents herein have
an indirect interest in said labor dispute, for which reason, we find that Section 9 of
Republic Act No. 875 squarely applies to Case No. R-9414.
Thus, in Goldfinger v. Feintuch,12 it was held:
Within the limits of peaceful picketing, however, picketing may be carried on not only
against the manufacturer but against a non-union product sold by one in unity of
interest with the manufacturer who is in the same business for profit. Where a
manufacturer pays less than union wages, both it and the retailers who sell its
products are in a position to undersell competitors who pay the higher scale, and this
may result in unfair reduction of the wages of union members. Concededly the
defendant union would be entitled to picket peacefully the plant of the manufacturer.
Where the manufacturer disposes of the product through retailers in unity of interest
with it,13 unless the union may follow the product to the place where it is sold and
peacefully ask the public to refrain from purchasing it, the union would be deprived of
a fair and propermeans of bringing its plea to the attention of the public.
Besides, the ALU introduced evidence to the effect that the SUGECO products had
been brought to Cebu Home and were being distributed in the latter, as a means to
circumvent, defeat or minimize the adverse effects of the picketing conducted in the
SUGECO plant and offices in Mandaue and Cebu City respectively by ALU. It is true
that respondents averred that said products were purchased by Cebu
Home before the strike was declared against SUGECO and that some of said products
were obtained from SUGECO in other parts of the country; but, even if true, these
circumstances did not place the picketing of the Cebu Home beyond the pale of the
aforesaid Section 9 of Republic Act No. 875 because, as distributor of SUGECO
products, Cebu Home was engaged in the same trade as SUGECO. Neither does the
claim that some SUGECO products marketed by Cebu Home had come, not from the
Mandaue plant, but from other parts of the Philippines, detract from the applicability
of said provisions, considering that ALU had struck against SUGECO and had
announced, as early as March 1, 1966 or three (3) days before it struck its intent
to picket "any place where your business may be found" and that SUGECO in Cebu is
a sister company of SUGECO elsewhere in the Philippines.

For, a similar reason, in American Brake Shoe Co. v. District Lodge 9 of International
Association of Machinists,14the Supreme Court of Pennsylvania ruled:
Where corporate employer had separate plants in Missouri and Pennsylvania, and
labor dispute existed atMissouri plant, but not at the Pennsylvania plant, peaceful
picketing at Pennsylvania plant by members of union representing employees
at Missouri plant was not an unfair labor practice as defined by Labor Management
Relations Act....15
In the language of the American Jurisprudence:16
It seems now generally agreed that a state cannot either by its common law or by
statute prohibit the peaceful picketing of a place of business solely on the ground that
the picketing is carried on by personsnot employed therein. The United States
Supreme Court has held that the constitutional guaranty of free speech is infringed by
the judicial policy of a state to forbid peaceful picketing on the ground that it is being
conducted by strangers to the employer affected, that is, by persons not in the
relation of employer and employee with him. Rules limiting picketing to the occasion
of a labor dispute are not offended by the act of a union having a grievance against
a manufacturer in picketing a retail establishment in which its products are sold when
there is a unity of interest between the manufacturer and the retailer; this is true even
when the shopkeeper is the sole person required to run his business. And the right of
employees on strike at one plant of an employer to picket another plant of the same
employer has been upheld even though some of the employees of the picketed plant
as a result refused to work despite a no-strike agreement. Also, a union may picket a
retail store selling goods made in a nonunion factory between which and the union
there is an industrial dispute, provided there is a unity of interest between the retailer
and the manufacturer.17
Apart from the foregoing, it will be recalled that, prior to the expiration of the
collective bargaining contract between ALU and SUGECO, on January 1, 1966,
negotiations had started for the renewal of said contract; that during said
negotiations, late in February 1966, twelve (12) SUGECO employees resigned from
ALU, owing according to charges preferred by ALU and confirmed by a complaint
filed by a CIR prosecutor to unfair labor practices allegedly committed by SUGECO
and its supervisors who, it was also claimed, had induced and coerced said employees
to quit the ALU, which they did; that, thereupon, SUGECO stopped negotiating with
ALU alleging that, with the resignation of said twelve (12) members, ALU no longer
represented a majority of the SUGECO employees; that on March 4, 1966, ALU
declared a strike and picketed the SUGECO plant in Mandaue; that the next day,
SUGECO filed Case No. R-9221 of the CFI of Cebu, which forthwith issued a writ of
preliminary injunction restraining ALU from picketing, not only the plant, but, also, the
SUGECO offices elsewhere in the Philippines; that said injunction was dissolved by the
Supreme Court on May 16, 1966;18 and that the premises of respondents herein were
not picketed until after our injunction was enforced, subsequently to May 16, 1966.
This factual background reveals that, from sometime before January 1, 1966 when
negotiations for the renewal of the collective bargaining agreement between SUGECO
and ALU were begun to sometime after May 16, 1966,19 or, at least, from late in
February 1966 when the aforementioned unfair labor practices were allegedly
committed by SUGECO to sometime before June 21, 1966,20 there was ample

opportunity to store SUGECO products in respondents' premises. There was, therefore,

reasonable ground for the ALU to believe or suspect that SUGECO was using said
premises to circumvent and blunt the ALU strike and picketing in the SUGECO plant in
Mandaue or to defeat or offset the adverse effects of both.
Respondent Judge seemed to be of the opinion that, for the subject-matter of Case No.
9414 to be within the exclusive jurisdiction of the CIR, it was necessary to
establish, as a fact, the truth of ALU's contention that respondents' premises were
being used as an outlet for SUGECO products.
Such view suffers from a basic flaw. It overlooks the fact that the jurisdiction of a court
or quasi-judicial or administrative organ is determined by the issues raised by the
parties, not by their success or failure in proving the allegations in their respective
pleadings.21 Said view would require the reception of proof, as a condition precedent
to the assumption of jurisdiction, when precisely jurisdiction must
exist before evidence can be taken, since the authority to receive it is in itself an
exercise of jurisdiction. Moreover, it fails to consider that, to affect the jurisdiction of
said court, or organ, the main requirement is that the issue raised be a genuine one.
In other words, the question posed must be one that is material to the right of action
or which could affect the result of the dispute or controversy.22 Such is, manifestly, the
nature of ALU's contention in the lower court, which should have, accordingly, granted
the motion to dismiss and lifted the writs of preliminary injunction complained of.
Finally, respondents herein have not alleged, let alone proved, that the conditions
enumerated in Section 9 (d) of Republic Act No. 875,23 as a prerequisite to an
injunction in labor disputes, have been complied with. Such failure is, as has been
repeatedly held24 fatal to the validity of said injunction.
WHEREFORE, the orders of respondent Judge dated June 30, and July 22, 1966 and the
writs of preliminary injunction issued in accordance therewith are hereby declared null
and void ab initio, with costs against respondents herein, the Cebu Home and
Industrial Supply and Antonio Lua. It is so ordered.
Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando and Capistrano,
JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-45513-14 January 6, 1978
IN THE MATTER OF PETITION FOR DIRECT CERTIFICATION OR CERTIFICATION
ELECTION. FIRESTONE TIRE & RUBBER COMPANY EMPLOYEES' UNION
(FEU), petitioner,
vs.
THE HON. FRANCISCO L. ESTRELLA, as Acting Director of the Bureau of Labor

Relations, FIRESTONE TIRE & RUBBER COMPANY OF THE PHILIPPINES and

ASSOCIATED LABOR UNIONS (ALU), respondents.
FIRESTONE TIRE & RUBBER COMPANY EMPLOYEES UNION, represented by
Romulo Ramos as President,petitioner,
vs.
THE HON. FRANCISCO L. ESTRELLA, as Acting Director of the Bureau of Labor
Relations, and ASSOCIATED LABOR UNIONS (ALU), respondents.
Avelino D. Latosa for petitioner.
Venerando B. Briones for private respondent.

ANTONIO, J.:
Petition to set aside two Resolutions issued by respondent Acting Director Francisco L.
Estrella of the Bureau of Labor Relations in BLR Cases Nos. A-070-76 and 2106-76.
The petition alleges that on June 21, 1973, the National Labor Relations Commission
certified a three-year collective bargaining agreement between respondents
Associated Labor Union (ALU) and Firestone Tire & Rubber Company of the Philippines.
Said collective bargaining agreement was to be effective from February 1, 1973 to
January 31, 1976.
On February 1, 1974, the aforementioned respondents entered into a "Supplemental
Agreement" extending the fife of the collective bargaining agreement for one year,
making it effective up to January 31, 1977. The extension was not ratified by the
covered employees nor submitted to the Department of Labor for classification.
Within the sixty-day period prior to the original expiry date of the agreement, some
233 out of about 400 rank-and-file employees of respondent Company resigned from
respondent ALU. subsequently, the number of these employees who resigned from the
union was increased to 276 and, by way of letter to the Director of the Bureau of
Labor Relations, they requested for the issuance of a certificate of registration in favor
of petitioner Firestone Tire & Rubber Company Employees' Union (FEU).
On January 28, 1976, Registration Permit No. 8571-IP was issued to petitioner FEU. On
February 10, 1976, ten (10) days after the original expiry date of the collective
bargaining agreement, petitioner FEU filed a petition with the Bureau of Labor
Relations for direct certification or certification election, 1 with the written consent of
308 employees, or 77% of the 400-man bargaining unit.
On February 20, 1976, respondent ALU filed with the Bureau of Labor Relations a
petition for the cancellation of the registration certificate of petitioner FEU, 2 alleging
that at the time of FEU's registration, respondent ALU was the recognized and certified
collective bargaining agent in the unit, and that FEU had not submitted the required
sworn statement that there is no recognized or certified collective bargaining agent
therein.

On February 23, 1976, respondent ALU prayed for the dismissal of R04-MED-143-76 on
the grounds, among others, that it has a pending petition for the cancellation of FEU's
registration certificate and that there is an existing collective bargaining agreement,
due to expire on January 31, 1977, which constitutes a valid bar to the holding of a
certification election.
Respondent Company likewise opposed the holding of a certification election on the
ground, however, that the petition therefor was filed late, considering that it was filed
ten (10) days after the expiry date of the collective bargaining agreement.
On April 6, 1976, the Med-Arbiter issued an Order granting the petition for certification
election, Respondents ALU and the Company filed separate appeals from the order
before the Bureau of Labor Relations.
The Order of the Med-Arbiter was affirmed by the Honorable Director Carmelo C.
Noriel on September 23, 1976, and Motions for Reconsideration were filed by ALU and
the Company on October 1, 1976.
On January 25, 1977, respondent Acting BLR Director Francisco L. Estrella issued a
Resolution reversing the Order of the Med-Arbiter which was affirmed by Director
Noriel, and holding:
... that there indeed exists a prejudicial question involving the very legal
personality of the petitioner union. In BLR Case No. 210676, the validity of
the registration certificate of petitioner is at issue. It is therefore obvious
that the present representation question should wait for the final
disposition of the issue on petitioner's legal personality, if only to forestall
what may prove to be unnecessary proceedings. 3
The issue of whether or not there was an existing collective bargaining agreement
which serves as a bar to the holding of a certification election was not resolved by
respondent Acting Director Francisco L. Estrella.
On June 8, 1976, BLR Case No. 2106-76 for the cancellation of petitioner FEU's
certificate of registration was dismissed by the Med-Arbiter. Respondents ALU and the
Company appealed to the Bureau of Labor Relations, but the appeals were dismissal
by Director Carmelo C. Noriel. Motions for Reconsideration were filed by the same
respondents and on January 25, 1977, respondent Acting Director Franco L. Estrella
entered a Resolution reversing the decision of Director Noriel and revoking the
certificate of registration of petitioner FEU. Respondent Acting Director Estrella ruled
that according to Section 4, Rule II, Book V of the Rules of Implementing the Labor
Code, no union may be registered when there is in the bargaining unit a or certified
collective bargaining agent. The Acting Director found that there was such a
bargaining agent in the unit (ALU), and that there was in fact a collective bargaining
agreement which was yet to expire on January 31, 1977. On that score, it was held
that FEU's application for registration was premature, and that it should have waited
for the expiration of the collective bargaining agreement.
The two Resolution issued by Respondent Acting Director Francisco L. Estrella are
subject of the instant petition for review by way of certiorari.

It is petitioner's contention that the issue of whether or not there was an existing
contract or collective agreement to validity bar the holding of a certification election
should have been resolved by respondent Acting Director in BLR Case No. A-070-76,
as it was already intertwined with the issue of petitioner's legal personality as assailed
in BLR Case No. 2106-76. According to petitioner, 'if the petition for certification
election in this case is not barred by the contract in question, then the registration
certificate of petitioner, acquired as it was within the sixty-day freedom period of such
contract must, of necessity, be likewise not barred or denied as premature." Likewise,
petitioner alleges that 'there being no pronouncement on the applicability of the
'contract bar' rule in this case, the cancellation of the registration certificate of
petitioner is devoid of legal basis, hence it was done by the respondent BLR Acting
Director in grave abuse of discretion."
Further, it is petitioner's stand that the Acting Director erred in concluding that the
collective bargaining agreement was to expire on January 31, 1977, for which n he
held that petitioner's application for registration was premature. The expiry date of
January 31, 1977, according to petitioner, was unauthorized because the extension of
the contract for a period of one year was not certified by the Department of Labor and
was "used to foil the constitutional right of the workers to self-organization and to
engage in collective bargaining."
The petition prays that the Resolutions of respondent Acting Director, both dated
January 25, 1977, be set aside, and the orders/decisions of Director Carmelo C. Noriel,
dated September 23, 1976 and October 8, 1976, be affirmed.
Respondent Firestone Tire and Rubber Company of the Philippines filed its Comment
to the instant petition, contending, mainly, that petitioner FEU had no legal
personality as a union because its non-compliance with Section 4, Rule 11, Book V of
the Rules and Regulations Implementing the Labor Code is sufficient ground for the
cancellation of its registration certificate.
Respondent ALU likewise filed its Comment, reiterating the contention that FEU had no
legal personality to ask for a direct certification or certification election because its
certificate of registration was obtained fraudulently and has, in fact, been cancelled.
In the meantime, due to the fact that the collective bargaining agreement had already
expired, respondent ALU demanded that respondent Company negotiate with it for a
new agreement. The Company requested for specific advice on the proper course of
action from the department of Labor. In response to the request, the Department
answered that "in the absence of any adjudication from competent authority and in
accordance with existing jurisprudence
... there is no legal impediment for (the) Company to negotiate a new
collective bargaining agreement with the Associated Labor Unions.
Accordingly, a new collective bargaining agreement was entered into between ALU
and the Company on April 1, 1977.
It appears that on January 31, 1977, FEU filed with Regional Office No. 4 Case No. R04MED-808-77, a petition for direct certification/certification election, utilizing its
questioned Registration Permit No. 8571-IP, dated January 26, 1976.

We find this petition meritorious. In BLR Case No. 2160-76, Director Carmelo C. Noriel,
resolving the pivotal issue of whether or not the failure of FEU to submit "a sworn
statement ... to the effect that there is no recognized or certified collective bargaining
agent in the bargaining unit condemned warrants the revocation of its registration,
said:
This Bureau answers in the negative.
... notwithstanding the existence of a certified or recognized collective
bargaining agent, the policy of this Office sanctions a registration of new
union during the freedom period especially if it has become apparent that
a substantial number of union members has decide(, to form a new labor
organization, as aptly illustrated in the case at bar. If the rule were
otherwise, no recourse whatsoever hall be accorded to members of a
bargaining unit who would like to make a free choice of their bargaining
representative, thereby placing the constitutional rights of the workers to
self-organization and collective bargaining in mockery, if not, in utter
illusion.
This view is supported by precedents, it seems to be the better view that a contract
does not operate as a bar to representation proceedings, where it is shown that
because of a schism in the union the contract can no longer serve to promote
industrial stability, and the direction of the election is in the interest of industrial
stability as well as in the interest of the employees' right in the selection of their
bargaining representatives. 4 Basic to the contract bar rule is the proposition that the
delay of the right to select representatives can be justified only where stability is
deemed paramount. Excepted from the contract bar rule are certain types of
contracts which do not foster industrial stability, such as contracts where the Identity
of the representative is in doubt. Any stability derived from such contracts must be
subordinated to the employees' freedom of choice because it does not establish the
type of industrial peace contemplated by the law. 5
In the case at bar, it is doubtful if any contract that may have been entered into
between respondent ALU and respondent Company will foster stability in the
bargaining unit, in view of the fact that a substantial number of the employees therein
have resigned from ALU and joined petitioner FEU. At any rate, this is a matter that
must be finally determined by means of a certification election.
In Foamtex Labor Union-TUPAS vs. Noriel,

We said:

... The question of whether or not the disaffiliation was validly made
appears not to be of much significance, considering that the petition for
direct certification is supported by eighty (80) out of a total of one
hundred twenty (120) of the rank and file employees of the unit. Pursuant
to Article 256 of the Labor Code, 'if there is any reasonable doubt as to
whom the employees have chosen as their representative for the purpose
of collective bargaining, the Bureau shall order a secret ballot election to
be conducted by the Bureau to ascertain who is the freely chosen
representative of the employees concerned, ... It is very clear from the
aforementioned circumstances that there is actually a reasonable doubt

as to whom the employees have chosen as their representative for the

purpose of collective bargaining.
As to whether or not the disaffiliation was actually and validly made, or
whether Foamtex Labor Union of respondent Belga is the true collective
bargaining representative of the employee are questions that need not be
resolved independently of each other. Such questions may be answered
once and for all the moment is determined, by means of the secret ballot
election, the union to which the majority of the employees have really
reposed their allegiance. The important factor here is the true choice of
the employees, and . the most expeditious and effective manner of
determining this is by means of the certification election, as it is for this
very reason that such procedure has been incorporated in the law. To
order that a separate secret ballot election be conducted for the purpose
of determining the question of policy, i.e., whether or not the majority of
the employees desire to disaffiliate from the mother union, should be
merely a circuitous way of ascertaining the majority's true choice.
As observed PAFLU v. Bureau of labor Relation (69 SCRA 132, 139), a
certification election for the collective bargaining process is one of the
fairest and most effective way of determining which labor organization
can truly represent the working force. It is a fundamental postulate that
the will of the majority, if given in an honest election with freedom on the
part of the voters to make their choice, is controlling. No better device can
assure the institution of industrial democracy with the two parties to a
business enterprise, management and labor, establishing a regime of selfrule.
Similarly, in Philippine Labor Alliance Council (PLAC) vs. Bureau of Labor Relations, et
al., 7 it was held that once the fact of disaffiliation has been demonstrated beyond
doubt, a certification election is the most expeditious way of determining which labor
organization is to be the exclusive bargaining representative.
It appearing that the extension of the life of the collective bargaining agreement for a
period of one year was not certified by the Bureau of Labor Relations, it cannot,
therefore, also bar the certification election. Only a certified collective bargaining
agreement would serve as a bar to such election. 8
Corollarily, therefore, petitioner's application for registration was not premature, as it
need not have waited for the expiration of the one-year extension, the agreement
having expired on January 31, 1976.
WHEREFORE the instant petition for certiorari is granted. The two Resolutions, both
dated January 25, 1977 in BLR Cases Nos. A060-76 and 2106-76 are hereby
REVERSED and set aside. Costs against private respondents.
Barredo, Actg. (Chairman), Aquino, Concepcion, Jr. and Guerrero, JJ., concur.
Fernando (Chairman) and Santos, JJ., are on leave.
Guerrero, J., was designated to sit in the Second Division.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 92391 July 3, 1992

PHILIPPINE FRUITS AND VEGETABLE INDUSTRIES, INC., petitioner,
vs.
HON. RUBEN D. TORRES, in his capacity as Secretary of the Department of
Labor and Employment and TRADE UNION OF THE PHILIPPINES AND ALLIED
SERVICES (TUPAS), respondents.

PARAS, J.:
This petition for review on certiorari with prayer for the issuance of a temporary
restraining order and/or preliminary injunction assails the following:
(1) The Resolution dated December 12, 1989 of public respondent Secretary of
Labor 1 affirming on appeal the Order dated March 7, 1989 issued by Med-Arbiter
Danilo T. Basa, and certifying private respondent Trade Union of the Philippines and
Allied Services (or TUPAS) as the sole and exclusive bargaining agent of all regular
rank-and-file and seasonal workers at Philippine Fruits and Vegetable Industries, Inc.
(or PFVII), petitioner herein; and
(2) The Order dated February 8, 1990 issued by public respondent Secretary of
Labor 2 denying petitioner's Urgent Motion for Reconsideration.
Petitioner PFVII contends the questioned resolution and order are null and void as they
are contrary to law and have been issued with grave abuse of discretion, and having
no other plain, speedy and adequate remedy in the ordinary course of law, it filed with
this Court the petition now at hand.
The facts of the case are well-stated in the Comment filed by the Solicitor General,
and are thus reproduced hereunder, as follows:
On October 13, 1988, Med-Arbiter Basa issued an Order granting the
petition for Certification election filed by the Trade Union of the Philippines
and Allied Services (TUPAS). Said order directed the holding of a
certification election among the regular and seasonal workers of the
Philippine Fruits and Vegetables, Inc. (p. 42, NLRC, Records).
After a series of pre-election conferences, all issues relative to the conduct
of the certification election were threshed out except that which pertains
to the voting qualifications of the hundred ninety four (194) workers
enumerated in the lists of qualified voters submitted by TUPAS.

After a late submission by the parties of their respective position papers,

Med-Arbiter Basa issued an Order dated December 9, 1988 allowing 184
of the 194 questioned workers to vote, subject to challenge, in the
certification election to be held on December 16, 1989. Copies of said
Order were furnished the parties (p. 118, NLRC, Records) and on
December 12, 1988 the notice of certification election was duly posted.
One hundred sixty eight (168) of the questioned workers actually voted on
election day.
In the scheduled certification election, petitioner objected to the
proceeding, through a Manifestation (p. 262, NLRC, Records) filed with the
Representation Officer before the close of the election proceedings. Said
Manifestation pertinently reads:
The posting of the list of eligible voters authorized to
participate in the certification election was short of the five (5)
days provided by law considering that it was posted only on
December 12, 1988 and the election was held today,
December 16, 1988 is only four days prior to the scheduled
certification election.
By agreement of petitioner and TUPAS, workers whose names were
inadvertently omitted in the list of qualified voters were allowed to vote,
subject to challenge (p. 263, NLRC, Records). Thirty eight of them voted
on election day.
Initial tally of the election results excluding the challenged votes showed
the following:
Total No. of the Votes 291
Yes votes 40
No votes 38
Spoiled 7
Challenged (Regular) 38

Total No. of Votes Cast 123

On January 6, 1989, Management and TUPAS agreed to have the 36
challenged votes of the regular rank-and-file employees opened and a
canvass thereof showed:
Yes votes 20
No votes 14
Spoiled 4

Total 38
Added to the initial election results of December 16, 1988, the canvass of
results showed:

Yes 60
No 52
Spoiled 11

Total 123
Based on the foregoing results, the yes votes failed to obtain the majority
of the votes cast in said certification election, hence, the necessity of
opening the 168 challenged votes to determine the true will of the
employees.
On January 20, 1989, petitioner filed a position paper arguing against the
opening of said votes mainly because said voters are not regular
employees nor seasonal workers for having allegedly rendered work for
less than 180 days.
Trade Union of the Philippines and Allied Services (TUPAS), on the other
hand, argued that the employment status of said employees has been
resolved when Labor Arbiter Ricardo N. Martinez, in his Decision dated
November 26, 1988 rendered in NLRC Case No. Sub-Rab-01-09-7-0087-88,
declared that said employees were illegally dismissed.
In an Order dated February 2, 1989 (pp. 278-280, NLRC, Records) MedArbiter Basa ordered the opening of said 168 challenged votes upon his
observation that said employees were illegally dismissed in accordance
with the foregoing Decision of Labor Arbiter Martinez. As canvassed, the
results showed
Yes votes 165
No votes 0
Spoiled 3

Total 168
On February 23, 1989, petitioner formally filed a Protest (pp.
284-287, NLRC, Records) claiming that the required five day posting of
notice was not allegedly complied with and that the list of qualified voters
so posted failed to include fifty five regular workers agreed upon by the
parties as qualified to vote. The Protest further alleged that voters who
were ineligible to vote were allowed to vote.
Med-Arbiter Basa, in his Order dated March 7, 1989, dismissed said Protest
which Order was affirmed on appeal in the Resolution dated December 12,
1989 of then Secretary of Labor, Franklin Drillon.
Petitioner's Motion for Reconsideration was denied for lack of merit in
public respondent's Order dated February 28, 1990.
(pp. 84-88, Rollo) 3
The instant petition has, for its Assignment of Errors, the following:

(1) The Honorable Secretary of Labor and Employment acted with grave
abuse of discretion amounting to lack of jurisdiction and committed
manifest error in upholding the certification of TUPAS as the sole
bargaining agent mainly on an erroneous ruling that the protest against
the canvassing of the votes cast by 168 dismissed workers was filed
beyond the reglementary period.
(2) The Honorable Secretary of Labor committed an abuse of discretion in
completely disregarding the issue as to whether or not non-regular
seasonal workers who have long been separated from employment prior
to the filing of the petition for certification election would be allowed to
vote and participate in a certification election. 4
The Court finds no merit in the petition.
For it is to be noted that the formal protest of petitioner PFVII was filed beyond the
reglementary period. A close reading of Sections 3 and 4, Rule VI, Book V of the
Implementing Rules of the Labor Code, which read as follows:
Sec. 3. Representation officer may rule on any-on-the-spot questions.
The Representation officer may rule on any on-the-spot question arising
from the conduct of the election. The interested party may however, file a
protest with the representation officer before the close of the
proceedings.
Protests not so raised are deemed waived. Such protest shall be
contained in the minutes of the proceedings. (Emphasis supplied)
Sec. 4. Protest to be decided in twenty (20) working days. Where the
protest is formalized before the med-arbiter with five (5) days after the
close of the election proceedings, the med-arbiter shall decide the same
within twenty (20) working days from the date of formalization. If not
formalized within the prescribed period, the protest shall be deemed
dropped. The decision may be appealed to the Bureau in the same
manner and on the same grounds as provided under Rule V. (Emphasis
supplied)
would readily yield, as a matter of procedure, the following requirements in order that
a protest filed thereunder would prosper, to wit:
(1) The protest must be filed with the representation officer and made of
record in the minutes of the proceedings before the close of election
proceedings, and
(2) The protest must be formalized before the Med-Arbiter within five (5)
days after the close of the election proceedings.
The records before Us quite clearly disclose the fact that petitioner, after filing a
manifestation of protest on December 16, 1988, election day, only formalized the
same on February 20, 1989, or more than two months after the close of election
proceedings (i.e., December 16, 1988). We are not persuaded by petitioner's
arguments that election proceedings include not only casting of votes but necessarily

includes canvassing and appreciation of votes cast and considering that the
canvassing and appreciation of all the votes cast were terminated only on February
16, 1989, it was only then that the election proceedings are deemed closed, and thus,
when the formal protest was filed on February 20, 1989, the five-day period within
which to file the formal protest still subsisted and its protest was therefore formalized
within the reglementary period. 5
As explained correctly by the Solicitor General, the phrase "close of election
proceedings" as used in Sections 3 and 4 of the pertinent Implementing Rules refers
to that period from the closing of the polls to the counting and tabulation of the votes
as it could not have been the intention of the Implementing Rules to include in the
term "close of the election proceedings" the period for the final determination of the
challenged votes and the canvass thereof, as in the case at bar which may take a very
long period. 6 Thus, if a protest can be formalized within five days after a final
determination and canvass of the challenged votes have been made, it would result in
an undue delay in the affirmation of the employees' expressed choice of a bargaining
representative. 7
Petitioner would likewise bring into issue the fact that the notice of certification
election was posted only on December 12, 1988 or four days before the scheduled
elections on December 16, 1988, instead of the five-day period as required under
Section 1 of Rule VI, Book V of the Implementing Rules. But it is not disputed that a
substantial number, or 291 of 322 qualified voters, of the employees concerned were
informed, thru the notices thus posted, of the elections to be held on December 16,
1988, and that such employees had in fact voted accordingly on election day. Viewed
thus in the light of the substantial participation in the elections by voter-employees,
and further in the light of the all-too settled rule that in interpreting the Constitution's
protection to labor and social justice provisions and the labor laws and rules and
regulations implementing the constitutional mandate, the Supreme Court adopts the
liberal approach which favors the exercise of labor rights, 8 We find the lack of one
day in the posting of notices insignificant, and hence, not a compelling reason at all in
nullifying the elections.
As regards the second assignment of error, the public respondent Secretary of Labor
did not completely disregard the issue as to the voting rights of the alleged separated
employees for precisely, he affirmed on appeal the findings of the Med-Arbiter when
he ruled
The election results indicate that TUPAS obtained majority of the valid
votes cast in the election 60 plus 165, or a total of 225 votes out of a
possible total of 291.
WHEREFORE, premises considered, the appeal is hereby denied and the
Med-Arbiter's order dated 7 March 1989 affirmed. Petitioner TUPAS is
hereby certified as the sole and exclusive bargaining agent of all regular
rank-and-file and seasonal workers at Philippine Fruits and Vegetable
Industries, Inc. 9 (p. 26, Rollo)
At any rate, it is now well-settled that employees who have been improperly laid off
but who have a present, unabandoned right to or expectation of re-employment, are
eligible to vote in certification elections. 10 Thus, and to repeat, if the dismissal is

under question, as in the case now at bar whereby a case of illegal dismissal and/or
unfair labor practice was filed, the employees concerned could still qualify to vote in
the elections. 11
And finally, the Court would wish to stress once more the rule which it has consistently
pronounced in many earlier cases that a certification election is the sole concern of
the workers and the employer is regarded as nothing more than a bystander with no
right to interfere at all in the election. The only exception here is where the employer
has to file a petition for certification election pursuant to Article 258 of the Labor Code
because it is requested to bargain collectively. Thus, upon the score alone of the
"Bystander Rule", the instant petition would have been dismissed outright.
WHEREFORE, the petition filed by Philippine Fruits and Vegetable Industries, Inc.
(PFVII) in hereby DISMISSED for lack of merit.
SO ORDERED.
Narvasa, C.J., Padilla, Regalado and Nocon, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-54334 January 22, 1986
KIOK LOY, doing business under the name and style SWEDEN ICE CREAM
PLANT, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG
KILUSAN NG PAGGAWA (KILUSAN), respondents.
Ablan and Associates for petitioner.
Abdulcadir T. Ibrahim for private respondent.

CUEVAS, J.:
Petition for certiorari to annul the decision 1 of the National Labor Relations
Commission (NLRC) dated July 20, 1979 which found petitioner Sweden Ice Cream
guilty of unfair labor practice for unjustified refusal to bargain, in violation of par. (g)
of Article 249 2 of the New Labor Code, 3 and declared the draft proposal of the Union
for a collective bargaining agreement as the governing collective bargaining
agreement between the employees and the management.
The pertinent background facts are as follows:
In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa
(Union for short), a legitimate late labor federation, won and was subsequently

certified in a resolution dated November 29, 1978 by the Bureau of Labor Relations as
the sole and exclusive bargaining agent of the rank-and-file employees of Sweden Ice
Cream Plant (Company for short). The Company's motion for reconsideration of the
said resolution was denied on January 25, 1978.
Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the
Company with two copies of its proposed collective bargaining agreement. At the
same time, it requested the Company for its counter proposals. Eliciting no response
to the aforesaid request, the Union again wrote the Company reiterating its request
for collective bargaining negotiations and for the Company to furnish them with its
counter proposals. Both requests were ignored and remained unacted upon by the
Company.
Left with no other alternative in its attempt to bring the Company to the bargaining
table, the Union, on February 14, 1979, filed a "Notice of Strike", with the Bureau of
Labor Relations (BLR) on ground of unresolved economic issues in collective
bargaining. 5
Conciliation proceedings then followed during the thirty-day statutory cooling-off
period. But all attempts towards an amicable settlement failed, prompting the Bureau
of Labor Relations to certify the case to the National Labor Relations Commission
(NLRC) for compulsory arbitration pursuant to Presidential Decree No. 823, as
amended. The labor arbiter, Andres Fidelino, to whom the case was assigned, set the
initial hearing for April 29, 1979. For failure however, of the parties to submit their
respective position papers as required, the said hearing was cancelled and reset to
another date. Meanwhile, the Union submitted its position paper. The Company did
not, and instead requested for a resetting which was granted. The Company was
directed anew to submit its financial statements for the years 1976, 1977, and 1978.
The case was further reset to May 11, 1979 due to the withdrawal of the Company's
counsel of record, Atty. Rodolfo dela Cruz. On May 24, 1978, Atty. Fortunato
Panganiban formally entered his appearance as counsel for the Company only to
request for another postponement allegedly for the purpose of acquainting himself
with the case. Meanwhile, the Company submitted its position paper on May 28, 1979.
When the case was called for hearing on June 4, 1979 as scheduled, the Company's
representative, Mr. Ching, who was supposed to be examined, failed to appear. Atty.
Panganiban then requested for another postponement which the labor arbiter denied.
He also ruled that the Company has waived its right to present further evidence and,
therefore, considered the case submitted for resolution.
On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National
Labor Relations Commission. On July 20, 1979, the National Labor Relations
Commission rendered its decision, the dispositive portion of which reads as follows:
WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty
of unjustified refusal to bargain, in violation of Section (g) Article 248 (now
Article 249), of P.D. 442, as amended. Further, the draft proposal for a
collective bargaining agreement (Exh. "E ") hereto attached and made an
integral part of this decision, sent by the Union (Private respondent) to the
respondent (petitioner herein) and which is hereby found to be reasonable

under the premises, is hereby declared to be the collective agreement

which should govern the relationship between the parties herein.
SO ORDERED. (Emphasis supplied)
Petitioner now comes before Us assailing the aforesaid decision contending that the
National Labor Relations Commission acted without or in excess of its jurisdiction or
with grave abuse of discretion amounting to lack of jurisdiction in rendering the
challenged decision. On August 4, 1980, this Court dismissed the petition for lack of
merit. Upon motion of the petitioner, however, the Resolution of dismissal was
reconsidered and the petition was given due course in a Resolution dated April 1,
1981.
Petitioner Company now maintains that its right to procedural due process has been
violated when it was precluded from presenting further evidence in support of its
stand and when its request for further postponement was denied. Petitioner further
contends that the National Labor Relations Commission's finding of unfair labor
practice for refusal to bargain is not supported by law and the evidence considering
that it was only on May 24, 1979 when the Union furnished them with a copy of the
proposed Collective Bargaining Agreement and it was only then that they came to
know of the Union's demands; and finally, that the Collective Bargaining Agreement
approved and adopted by the National Labor Relations Commission is unreasonable
and lacks legal basis.
The petition lacks merit. Consequently, its dismissal is in order.
Collective bargaining which is defined as negotiations towards a collective
agreement, 6 is one of the democratic frameworks under the New Labor Code,
designed to stabilize the relation between labor and management and to create a
climate of sound and stable industrial peace. It is a mutual responsibility of the
employer and the Union and is characterized as a legal obligation. So much so that
Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an
employer to refuse "to meet and convene promptly and expeditiously in good faith for
the purpose of negotiating an agreement with respect to wages, hours of work, and all
other terms and conditions of employment including proposals for adjusting any
grievance or question arising under such an agreement and executing a contract
incorporating such agreement, if requested by either party.
While it is a mutual obligation of the parties to bargain, the employer, however, is not
under any legal duty to initiate contract negotiation. 7 The mechanics of collective
bargaining is set in motion only when the following jurisdictional preconditions are
present, namely, (1) possession of the status of majority representation of the
employees' representative in accordance with any of the means of selection or
designation provided for by the Labor Code; (2) proof of majority representation; and
(3) a demand to bargain under Article 251, par. (a) of the New Labor Code . ... all of
which preconditions are undisputedly present in the instant case.
From the over-all conduct of petitioner company in relation to the task of negotiation,
there can be no doubt that the Union has a valid cause to complain against its
(Company's) attitude, the totality of which is indicative of the latter's disregard of, and
failure to live up to, what is enjoined by the Labor Code to bargain in good faith.

We are in total conformity with respondent NLRC's pronouncement that petitioner

Company is GUILTY of unfair labor practice. It has been indubitably established that
(1) respondent Union was a duly certified bargaining agent; (2) it made a definite
request to bargain, accompanied with a copy of the proposed Collective Bargaining
Agreement, to the Company not only once but twice which were left unanswered and
unacted upon; and (3) the Company made no counter proposal whatsoever all of
which conclusively indicate lack of a sincere desire to negotiate. 8 A Company's refusal
to make counter proposal if considered in relation to the entire bargaining process,
may indicate bad faith and this is specially true where the Union's request for a
counter proposal is left unanswered. 9 Even during the period of compulsory
arbitration before the NLRC, petitioner Company's approach and attitude-stalling the
negotiation by a series of postponements, non-appearance at the hearing conducted,
and undue delay in submitting its financial statements, lead to no other conclusion
except that it is unwilling to negotiate and reach an agreement with the Union.
Petitioner has not at any instance, evinced good faith or willingness to discuss freely
and fully the claims and demands set forth by the Union much less justify its
opposition thereto. 10
The case at bar is not a case of first impression, for in the Herald Delivery Carriers
Union (PAFLU) vs. Herald Publications11 the rule had been laid down that "unfair labor
practice is committed when it is shown that the respondent employer, after having
been served with a written bargaining proposal by the petitioning Union, did not even
bother to submit an answer or reply to the said proposal This doctrine was reiterated
anew in Bradman vs. Court of Industrial Relations 12 wherein it was further ruled that
"while the law does not compel the parties to reach an agreement, it does
contemplate that both parties will approach the negotiation with an open mind and
make a reasonable effort to reach a common ground of agreement
As a last-ditch attempt to effect a reversal of the decision sought to be reviewed,
petitioner capitalizes on the issue of due process claiming, that it was denied the right
to be heard and present its side when the Labor Arbiter denied the Company's motion
for further postponement.
Petitioner's aforesaid submittal failed to impress Us. Considering the various
postponements granted in its behalf, the claimed denial of due process appeared
totally bereft of any legal and factual support. As herein earlier stated, petitioner had
not even honored respondent Union with any reply to the latter's successive letters,
all geared towards bringing the Company to the bargaining table. It did not even
bother to furnish or serve the Union with its counter proposal despite persistent
requests made therefor. Certainly, the moves and overall behavior of petitionercompany were in total derogation of the policy enshrined in the New Labor Code
which is aimed towards expediting settlement of economic disputes. Hence, this Court
is not prepared to affix its imprimatur to such an illegal scheme and dubious
maneuvers.
Neither are WE persuaded by petitioner-company's stand that the Collective
Bargaining Agreement which was approved and adopted by the NLRC is a total nullity
for it lacks the company's consent, much less its argument that once the Collective
Bargaining Agreement is implemented, the Company will face the prospect of closing
down because it has to pay a staggering amount of economic benefits to the Union
that will equal if not exceed its capital. Such a stand and the evidence in support

thereof should have been presented before the Labor Arbiter which is the proper
forum for the purpose.
We agree with the pronouncement that it is not obligatory upon either side of a labor
controversy to precipitately accept or agree to the proposals of the other. But an
erring party should not be tolerated and allowed with impunity to resort to schemes
feigning negotiations by going through empty gestures. 13 More so, as in the instant
case, where the intervention of the National Labor Relations Commission was properly
sought for after conciliation efforts undertaken by the BLR failed. The instant case
being a certified one, it must be resolved by the NLRC pursuant to the mandate of P.D.
873, as amended, which authorizes the said body to determine the reasonableness of
the terms and conditions of employment embodied in any Collective Bargaining
Agreement. To that extent, utmost deference to its findings of reasonableness of any
Collective Bargaining Agreement as the governing agreement by the employees and
management must be accorded due respect by this Court.
WHEREFORE, the instant petition is DISMISSED. The temporary restraining order
issued on August 27, 1980, is LIFTED and SET ASIDE.
No pronouncement as to costs.
SO ORDERED.
Concepcion, Jr., (Chairman), Abad Santos, Escolin and Alampay, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-69188 September 23, 1986
MIGUEL J. VILLAOR and CECILIO V. BAUTISTA, petitioners,
vs.
HON. CRESENCIANO B. TRAJANO, in his capacity as Director, Bureau of Labor
Relations of the Ministry of Labor and Employment; OCTAVIO A. PINEDA,
RAFAEL SAMSON, EDUARDO C. FLORA, MARIO S. SANTOS and CARLOS
BANDALAN, respondents.
Wenceslao C. Laureta for petitioners.
Bernardino Julve for private respondents.
Porter Puguon for public respondent.

PARAS, J.:
This is a petition to review on certiorari the November 14, 1984 decision of
respondent BLR Director Cresenciano B. Trajano in BLR Case No. A-182-84,

entitled "Miguel J. Villaor, et al., Petitioners vs. Octavio Pineda, et al., Respondents,
and Mario S. Santos, et al., Intervenors," setting aside the Med-Arbiters Orders of June
27, 1984 and August 1, 1984.
The Philippine Air Lines Employees' Association (PALEA) is the bargaining agent of the
workers in the Philippine Air Lines (PAL). The union has a Board of Directors composed
of the president, vice-president, secretary, treasurer and 17 directors elected for a
term of three (3) years by members in "good standing" on the last Thursday of
February of the election year. It has also a Commission on Election (COMELEC) whose
members sit for a term of three (3) years. At present, the COMELEC is composed of
herein respondents Octavio Pineda, as chairman, and Rafael Samson and Edwardo
Flora, as members. The then incumbent president and vice-president were herein
respondents Mario S. Santos and Carlos Bandalan, respectively,
On February 17-23, 1984, in Metro Manila and on February 20, 1984 in Cebu/Mactan
area, PALEA held its election for National Officers. Herein petitioner Miguel J. Villaor
won the election over respondent Mario S. Santos for the presidency, Villaor obtaining
1,954 votes to Santos' 1,809 votes, or a difference of 145 votes. Likewise, herein
petitioner Cecilio V. Bautista won against Carlos V. Bandalan for the position of vicepresident, Bautista garnering 1,264 votes as against Bandalan's 1,220 votes, or a
difference of 44 votes, They were proclaimed on February 25, 1984.
Subsequently, the defeated candidates-respondent Mario S. Santos, for president;
respondent Carlos V. Bandalan, for vice-president; and Antonio Josue, for secretary,
filed their election protests with the PALEA COMELEC within the 30 day reglementary
period, as provided under the Constitution and By-Laws of the Association, on the
grounds that (1) a number of votes in precincts 1, 4 and 4-A were segregated and not
counted; and (2) a substantial number of PALEA members in Cebu/Mactan area were
not able to vote on February 20, 1984 by reason of the voting days having been
reduced from two (February 20-21, 1984) to just one day (February 20, 1984).
Respondent Mario S. Santos filed his protest on March 12, 1984; respondent Carlos
Bandalan filed his protest on February 27, 1984; and Antonio Josue on March 14, 1984,
before PALEA COMELEC composed of the herein other respondents.
Meanwhile, on March 6, 1984, respondent Mario S. Santos sent petitioner Miguel J.
Villaor a letter, the body of which reads
We formally turnover to you PALEA's CBA proposals in the ongoing PALPALEA CBA negotiations. Other pertinent records are either accompanying
these proposals or on file with the office.
Other PALEA properties, including the President's car and another vehicle,
shall also be turned over to you at the appropriate time.
On the CBA negotiation, we would like to inform you that we are filing a
manifestation with the Director-Bureau of Labor Relations in order to
withdraw PALEA's declaration of deadlock. This will give you and the other
officers-elect a free hand to continue with the PAL-PALEA CBA negotiation.
As we have the common objective of protecting and promoting the
interests of our members, we wish you all the luck and best of everything
for our members and our union.

On April 17, 1984, petitioners filed their joint Comment/Answer to the election
protests cases, and two (2) basic issues were joined, to wit:
1. Whether or not the more than 40 to 47 ballots cast by alleged qualified
PALEA members in Precincts 1, 4 and 4-A which were segregated and
invalidated actually resulted in the disenfranchisement of said PALEA
voters; and
2. Whether or not the qualified PALEA voters in the Cebu/Mactan areas
were deprived of their right to vote as a result of the sudden change from
the two day traditional election days in previous years to just one day.
On the basis of the election protests and the Comment/Answer thereto, respondent
PALEA COMELEC members, in a letter dated April 25, 1984, informed the parties that
the ballot boxes in the questioned precincts would be opened and their voters list
retrieved on April 25, 1984 at 10:00 in the morning.
On April 24, 1984, herein petitioners Miguel J. Villaor and Cecilio V. Bautista, and
Ernesto P. Galang filed a complaint/petition with the Regional Office of the Ministry of
Labor and Employment (MOLE) against the PALEA COMELEC members, seeking their
disqualification from their positions as such on the ground of alleged partiality for the
protestants. The Regional Office summoned the parties to appear before Med-Arbiter
Renato D. Parungao "on the 25th of April at 9:30 a. m."
On April 25, 1984, herein petitioners Miguel J. Villaor and Cecilio V. Bautista, and
respondent PALEA COMELEC member Edwardo C. Flora appeared before the MedArbiter who issued an Order "enjoining the respondents from opening the ballot boxes
subject of the controversy." On the same day, at 10:30 a.m., respondents Octavio
Pineda and Rafael Samson proceeded to open the ballot boxes.
On April 27, 1984, respondents, sitting en banc, resolved the election protests, the
dispositive portion of which readsWHEREFORE, AND IN VIEW OF ALL THE FOREGOING, THE PALEA COMELEC
HEREBY RESOLVES, AS IT HEREBY RESOLVED1. To set aside the proclamation dated February 25, 1984 of Miguel J.
Villaor as PALEA President, Cecilio V. Bautista as Vice-President and
Ernesto P. Galang as Secretary;
2. To count the segregated votes of qualified PALEA members, as verified,
in Precincts 1, 4 and 4-A. The counting shall be held on May 4, 1984 at
1300 H at the PALEA COMELEC Office;
3. To hold a special election on May 4, 1984 from 0500 H to 1700 H, in
Cebu/Mactan to allow PALEA members, not able to vote on February 20,
1984, to cast their votes for the positions of President, Vice-President and
Secretary; and
4. To proclaim the winning candidates for PALEA President Vice-President
and Secretary immediately after the election, counting and canvassing of
votes as hereinabove indicated.

SO RESOLVED.
On May 3, 1984, petitioners filed a motion with the Med-Arbiter to cite COMELEC
members for contempt, to suspend them from office, and to annul their Resolution of
April 27, 1984 "for being issued without jurisdiction." On the same day, a notice was
issued directing the parties and the petitioners' counsel to appear for hearing at 1:30
p.m. on May 3 and 4, 1984, On the May 3, 1984 scheduled hearing, none of the
parties appeared, and on the May 4, 1984 scheduled hearing, only the petitioners'
counsel appeared.
In conformity with the Resolution of April 27, 1984, respondents PALEA COMELEC
members counted the segregated ballots in precincts 1, 4 and 4-A on May 4, 1984 and
likewise held on said date a special election in Cebu/Mactan area. As a result of the
election of May 4, 1984, Mario S. Santos, Carlos V. Bandalan and Ernesto Galang, were
proclaimed on May 5, 1984 as the duly elected President, Vice-President and
Secretary respectively by PALEA COMELEC.
On May 8, 1984, Petitioner Miguel J. Villaor filed a motion to annul the May 4, 1984
election and the proclamation of the winners contending that these were "premature"
as no action had yet been taken on the motion to declare the April 27, 1984
Resolution void.
On May 31, 1984, the respondents filed their omnibus answer to the petition and the
subsequent motions filed by the petitioners.
On the same date, May 31, 1984, herein respondents Mario S. Santos and Carlos V.
Bandalan filed their Notice To Admit Intervention (Record, p. 128) in the case filed by
Villaor, et al. against the PALEA COMELEC members. The intervention was allowed
when therein petitioners withdrew their opposition thereto. The intervenors likewise
manifested that they were adopting the position paper filed by the respondents
therein as their own.
On June 5, 1984, petitioners filed a motion for injunction alleging that Mario S. Santos
and "his cohorts" had inveigled the Board of Directors to adopt a resolution including
Santos in the union panel and that as a result thereof, the PAL refused to continue
negotiating with the union.
On June 8, 1984, herein respondents Mario S. Santos and Carlos V. Bandalan filed their
answer in intervention alleging that they were duly proclaimed officers of the union
and the ones recognized by the Board of Directors.
On the same day, June 8, 1984, the Med-Arbiter issued a temporary restraining order
"enjoining the respondents and the intervenors to cease and desist from acting as
PALEA President, Vice-President and Secretary in order to maintain the status quo
prevailing prior to the filing of the instant petition." The Med-Arbiter furthermore
directed them to show cause why injunction should not be granted in favor of the
petitioners. The intervenors filed an opposition on June 19, 1984.
On June 27, 1984, the Med-Arbiter issued a writ of preliminary injunction (Ibid., pp.
116-117) "enjoining both the respondents and intervenors to cease and desist from
further committing the acts complained of until the intra-union conflict and all its
attendant incidents are finally resolved." Moreover, the Med-Arbiter declared that

"Miguel J. Villaor remains as President of the Philippine Airlines Employees' Association

(PALEA) unless ordered otherwise."
The Med-Arbiter, after hearing, issued an Order dated August 1, 1984, (Ibid, pp. 119127) the dispositive portion of which readsWHEREFORE, premises considered the petition is hereby granted and let
an order issue, as it is hereby issued:
a) Declaring respondents Octavio Pineda, Rafael Samson and Edwardo
Flora as disqualified from their office as chairman and members,
respectively, of the PALEA Commission on Elections and ordering them to
desist from further performing their functions as Comelec officers;
b) Declaring as null and void Resolution dated 27 April 1984, promulgated
ex-parte in complete violation of Sec. 6, Article XIX of the PALEA
Constitution and By-laws;
c) Declaring the special election conducted by the respondents (PALEA
Comelec) on 4 May 1984 as invalid and that the results thereof,
proclaiming Mario S. Santos, Carlos V. Bandalan, as President and VicePresident, respectively, as likewise declared null and void;
d) The writ of preliminary injunction dated 27 June 1984, enjoining
intervenors Mario S. Santos and Carlos V. Bandalan as President and VicePresident, of PALEA, but, also from interfering with the on-going CBA
negotiations between the PAL Management and PALEA and also from
interfering in any manner with the operation of the activities of PALEA,
shall continue to remain binding and effective until this intra-union conflict
and its attendant aspects are finally resolved and terminated, in which
case the said injunctive writ shall likewise be dissolved.
Therein respondent PALEA COMELEC members and intervenors Mario S. Santos and
Carlos V. Bandalan appealed the said Order of the Med-Arbiter to the Bureau of Labor
Relations (BLR).
BLR Director Cresenciano B. Trajano, in a decision dated November 14, 1984,
(Ibid., pp. 33-42) set aside the Med-Arbiter's Orders of June 27, 1984 and August 1,
1984, and at the same time dismissed the petition of Miguel J. Villaor and Cecilio V.
Bautista for lack of merit. Hence, the instant petition (Ibid., pp. 56-115).
The First Division of this Court, in a Resolution dated January 16, 1985, resolved
without giving due course to the petition to require the respondents to comment
within ten (10) days from notice thereof (Ibid., p. 203).
In compliance with the said Resolution, private respondents filed their comment
(Ibid., pp. 237-247) on March 18, 1985.
On March 28, 1985, petitioners filed their "Reply" to the comment filed by the private
respondents.

On March 29, 1985, the Solicitor General filed his comment. In the same, the Solicitor
General concluded that it is his opinion that respondent BLR Director committed
reversible error in setting aside the Med-Arbiter's Orders, and recommended that the
instant petition be given due course.
Petitioners, in compliance with the Resolution of the First Division of this Court dated
April 22, 1985 (Ibid., p. 273) filed on May 17, 1985 their "Reply" to the "Comment"
filed by the Solicitor General.
Public respondent, in compliance with the June 16, 1985 Resolution of the First
Division of this Court, filed his comment (Ibid., pp. 327-374) on August 8, 1985.
The First Division of this Court, in a Resolution dated August 26,1985 (lbid., p. 374-a)
resolved (a) to give due course to the petition; and (b) to require the parties to submit
simultaneous memoranda within thirty (30) days from notice.
Petitioners filed their memorandum (Ibid., pp. 391-435) on October 28, 1985; Private
respondents filed their memorandum (Ibid., pp. 438-464) on November 5, 1985; and
public respondent, in a "Motion" dated November 19,1985 (Ibid., pp. 462-464),
respectfully moved that the comment he has filed be treated and considered as
memorandum, Said motion was granted by the First Division of this Court in its
Resolution of January 13,1986 (Ibid., p. 476).
The sole issue in this case is
Whether or not the decision of public respondent Bureau of Labor
Relations Director issued on November 14, 1984 was promulgated with
grave abuse of discretion amounting to lack of jurisdiction.
In his Decision of November 14, 1984 (p. 7, Ibid., p. 39), Public respondent BLR
Director Cresenciano B. Trajano, in reversing Med-Arbiter Renato D. Parungos ruling
disqualifying therein respondents as members of the PALEA COMELEC stressed that
the Philippine Constitution assures the right of workers to self-organization and this
right implies the freedom of unions from interference by employers and the
government; that it includes the right of unions to elect their officers in full freedom
and guarantee that the government refrains from any interference which would
restrict this right or impede its lawful exercise; and that "It shall be unlawful for any
person," Article 247 of the Labor Code states, "to unduly interfere with employees and
workers in their exercise of the right to self-organization." With the foregoing as his
premise, he opined that the right of self-organization is impaired when the
government dissolves a union COMELEC and proceeds to resolve an election protest
pending before it.
In this connection, attention is invited to Article 226 of the Labor Code, which readsART. 226. Bureau of Labor Standards.-The Bureau of labor Relations and
the Labor Code relations divisions of the regional offices of the
Department of Labor (now the Ministry of Labor and Employment) shall
have original and exclusive authority to act, at their own initiative or upon
request of either or both parties, on all inter-union and intra-union
conflicts and all disputes arising from or affecting labor-management
relations in all workplaces whether agricultural or non-agricultural, except

those arising from the implementation of collective bargaining

agreements which shall be the subject of grievance procedure and/or
voluntary arbitration.
as supplemented by Policy Instruction No. 6-relating to the distribution of jurisdiction
over labor casesxxx xxx xxx
3. The following cases are under the exclusive original jurisdiction of the
Med-Arbiter Section of the Regional Office:
xxx xxx xxx
b) Intra-union cases.
From the aforequoted provisions, it is safe to conclude that the freedom of the unions
from interference from the government presupposes that there is no inter-union or
intra-union conflict. In the instant case, there is no question that there is an intraunion conflict.
Public respondent further opined that the COMELEC should have been allowed to
discharge its functions without prejudice to the right of petitioners to apply for relief
from the Board of Directors, He averred that under the union constitution, the Board
has the power to remove or discipline, by three-fourths' votes, any union officer
including the president himself or the members of the COMELEC, and accordingly
concluded that only after the remedy failed could the petitioners be allowed to bring
their case to the Med-Arbiter. In short, the petitioners should first exhaust
administrative remedies before bringing their case to the Med-Arbiter.
Anent this opinion of public respondent, petitioners averred that pursuant to Section 4
of Article VII of the PALEA Constitution and By-Laws, which reads:
Section 4-As a fact-finding body, the Chairman and members of the Board
of Inquiry (created by the President) shall have the sole power to conduct
investigation on involving an act specified under Article 18, Section of this
Constitution committed by any officer, member of the board or members
of the Association and submit thereto reports and recommendations
based on their findings to the Board of Directors who shall have the sole
power to render decisions and impose penalty to whoever is guilty.
The Board of Inquiry, created by the President, has the sole power to investigate cases
involving acts committed by any officer, member of the Board or member of the
Association that the power of the Board to remove or discipline any union officer,
including the President himself or the COMELEC members cannot be exercised until
the Board of Inquiry submits its report and recommendation based on their findings on
the acts complained of after due investigation. With this as a premise, petitioners
claim that in their Reply and Opposition dated September 14, 1984, in connection with
the three (3) consolidated cases before Med-Arbiter Napoleon V. Fernando, Nos. NLRLRD-M-6-185-184, NLR-LRD-M6-156-84 and NLR-LRD-N-6-204-84, they called attention
to the fact that they have exhausted administrative remedies provided in the PALEA
Charter-On May 17, 1984, PALEA President Miguel J. Villaor created the Special Board

of Inquiry and appointed Rey Taggueg, as chairman, Ildefonso Medina and Rodolfo de
Guzman, as members, however, the Board refused to approve the newly created
Special Board of Inquiry for fear that they themselves may be the first to be subjected
to investigation for the acts complained of in Case No. NCR-LRD M-6-156-84. This
claim of petitioners was never denied by the private respondents.
Accordingly, there is no question that the Med-Arbiter rightly exercised jurisdiction
over the case.
Section 6 of Article XIX of the PALEA Constitution provides:
Sec. 6. In cases where a situation arises, whereby the losing candidate
does not concede to the result of the election he may, if he so desires,
submit in writing, his protest to the Commission on Election within 30 days
after the proclamation of the winning candidates and the Commission on
Election, sitting en banc, shall hear and decide such protest. ...
From the aforequoted provision, as opined by the Solicitor General, "once a candidate
concedes the election, he is precluded from filing a protest." Private respondent Mario
S. Santos, prior to filing his election protest, in his letter of March 6, 1984 to herein
petitioner Miguel J. Villaor, had already unequivocably conceded the position of
president to the latter.
Likewise, from the aforequoted provision, it is mandatory for the PALEA COMELEC to
set the election protest for appropriate hearing on the issues raised before it could
finally resolve the case. In the instant case, it is undisputed that the PALEA COMELEC,
without conducting any formal hearing on the issues raised, on the basis of the
pleadings of the parties, informed the parties in a letter dated April 23, 1984 that the
ballot boxes in the questioned precincts would be opened and their voters' list
retrieved on April 25, 1984 at 10:00 in the morning. Likewise, on April 27, 1984, the
PALEA COMELEC, without the benefit of formal hearing, resolved the election protest
by setting aside the proclamation dated February 25, 1984 of Miguel J. Villaor as
PALEA President, Cecilio V. Bautista as Vice-President, and Ernesto P. Galang as
Secretary; directing the canvassing of the segregated ballots in precincts 1, 4, and 4A; and directing the holding of a special election in Cebu and Mactan on May 4, 1984.
Besides, it appears that respondents Octavio Pineda and Rafael Samson intentionally
disregarded the summons of Med-Arbiter Renato D. Parungo to appear before him at
9:00 a.m. on April 25, 1984 so that they can carry out their plan to open the ballot
boxes. Please note that the herein petitioners alleged that Med-Arbiter Parungo issued
a restraining order enjoining the respondents, as PALEA COMELEC members, to refrain
from proceeding with their plan to open the ballot boxes. Said restraining order was
personally served on respondent Edwardo Flora who immediately called the PALEA
office and after respondent Octavio Pineda was on the phone, Flora informed him, in
the presence of Med-Arbiter Parungo, about the restraining order served upon them.
Notwithstanding said information, respondents Pineda and Samson went ahead and
opened the ballot boxes as planned. This allegation of petitioners was never denied by
the respondents. Respondent PALEA COMELEC members, likewise disregarded MedArbiter Renato D. Parungos notice for them to appear for hearing at 1:30 p.m. on May
3 and 4, 1984.

The May 4, 1984 special election in Cebu and Mactan is without factual and legal
justification As aptly observed by the Solicitor General, the same was resorted to only
to accommodate the herein other private respondentsThere is absolutely no justification for calling the said May 4, 1984
election. There is no law which allows "piece meal" elections. Obviously,
such move was resorted to by the PALEA Comelec to accommodate
defeated candidates for president and vice-president in the February 20,
1984 election, Mario and Carlos Bandalan (respondent herein), and enable
them to overcome the winning margin of winning candidates therein,
Villaor and Bautista (herein petitioners), who won by only 145 and 44
votes, respectively,
It is the contention of the protestants that a great number of PALEA members were
deprived of their right to vote because it had been the tradition since 1969 to hold
election in Cebu and Mactan for two days; and that the holding of elections for only
one day was done without notice to all PALEA members in said station. On the other
hand, it is the contention of the petitioners that the change was agreed upon by all
the candidates concerned in a conference held at SMCD Office, Nichols Field, on
February 20, 1982. On said controversy, while public respondent found for the
protestants, the Solicitor General is for the petitioners. Be that as it may, it is a fact
that the PALEA COMELEC issued on February 15, 1984 a bulletin announcing that the
elections in that area would be only on February 20, 1984. Hence, it cannot be said
that the voters therein were not duly notified. In addition to this, worth mentioning is
the comment of the Solicitor General, which reads:
... Besides, we do not see how these 103 members could have failed to
know about the one-day election. It was held within the office premises,
and, surely, they must have been told of such fact by the other members
who voted in the election. It would appear that these 193 members simply
did not bother to vote for one reason or another. And we do not see the
necessity of holding a two-day election in said areas with only 500
members, and hold a one day election in Metro Manila area which has
about 4,000 members. That it is the tradition to hold a two-day election in
said areas is not a valid argument. Tradition can always be overturned, as
what happened in the instant case.
The holding of the May 4, 1984 special election, when its legality is still pending
determination by the Med-Arbiter, therefore, further shows the partiality of the
respondent PALEA COMELEC members.
WHEREFORE, the assailed decision of respondent BLR Director is hereby SET ASIDE
and the Orders of June 27, 1984 and August 1, 1984 of Med-Arbiter Renato D. Parungo
are hereby REVIVED.
SO ORDERED.
Feria (Chairman), Fernan, Alampay and Gutierrez, Jr., JJ., concur.

[G.R. No. 140518. December 16, 2004]

MANILA DIAMOND HOTEL EMPLOYEES UNION, petitioner, vs. THE HON.

COURT OF APPEALS, THE SECRETARY OF LABOR AND EMPLOYMENT, and
THE MANILA DIAMOND HOTEL, respondents.
DECISION
AZCUNA, J.:
This petition for review of a decision of the Court of Appeals arose out of a dispute
between the Philippine Diamond Hotel and Resort, Inc. (Hotel), owner of the Manila
Diamond Hotel, and the Manila Diamond Hotel Employees Union (Union). The facts
are as follows:
On November 11, 1996, the Union filed a petition for a certification election so that
it may be declared the exclusive bargaining representative of the Hotels employees
for the purpose of collective bargaining. The petition was dismissed by the
Department of Labor and Employment (DOLE) on January 15, 1997. After a few
months, however, on August 25, 1997, the Union sent a letter to the Hotel informing it
of its desire to negotiate for a collective bargaining agreement. [1] In a letter dated
September 11, 1997, the Hotels Human Resources Department Manager, Mary Anne
Mangalindan, wrote to the Union stating that the Hotel cannot recognize it as the
employees bargaining agent since its petition for certification election had been
earlier dismissed by the DOLE. [2] On that same day, the Hotel received a letter from
the Union stating that they were not giving the Hotel a notice to bargain, but that they
were merely asking for the Hotel to engage in collective bargaining negotiations with
the Union for its members only and not for all the rank and file employees of the
Hotel.[3]
On September 18, 1997, the Union announced that it was taking a strike vote. A
Notice of Strike was thereafter filed on September 29, 1997, with the National
Conciliation and Mediation Board (NCMB) for the Hotels alleged refusal x x x to
bargain and for alleged acts of unfair labor practice. The NCMB summoned both
parties and held a series of dialogues, the first of which was on October 6, 1997.
On November 29, 1997, however, the Union staged a strike against the Hotel.
Numerous confrontations between the two parties followed, creating an obvious strain
between them. The Hotel claims that the strike was illegal and it had to dismiss some
employees for their participation in the allegedly illegal concerted activity. The Union,
on the other hand, accused the Hotel of illegally dismissing the workers. What is
pertinent to this case, however, is the Order issued by the then Secretary of Labor and
Employment Cresenciano B. Trajano assuming jurisdiction over the labor dispute. A
Petition for Assumption of Jurisdiction was filed by the Union on April 2, 1998.
Thereafter, the Secretary of Labor and Employment issued an Order dated April 15,
1998, the dispositive portion of which states:
WHEREFORE, premises considered[,] this Office CERTIFIES the labor dispute at the
Manila Diamond Hotel to the National Labor Relations Commission, for compulsory
arbitration, pursuant to Article 263 (g) of the Labor Code, as amended.
Accordingly, the striking officers and members of the Manila Diamond Hotel
Employees Union --- NUWHRAIN are hereby directed to return to work within twentyfour (24) hours upon receipt of this Order and the Hotel to accept them back under

the same terms and conditions prevailing prior to the strike. The parties are enjoined
from committing any act that may exacerbate the situation.
The Union received the aforesaid Order on April 16, 1998 and its members
reported for work the next day, April 17, 1998. The Hotel, however, refused to accept
the returning workers and instead filed a Motion for Reconsideration of the Secretarys
Order.
On April 30, 1998, then Acting Secretary of Labor Jose M. Espaol, issued the
disputed Order, which modified the earlier one issued by Secretary Trajano. Instead of
an actual return to work, Acting Secretary Espaol directed that the strikers be
reinstated only in the payroll.[4] The Union moved for the reconsideration of this Order,
but its motion was denied on June 25, 1998. Hence, it filed before this Court on
August 26, 1998, a petition for certiorari under Rule 65 of the Rules of Court alleging
grave abuse of discretion on the part of the Secretary of Labor for modifying its earlier
order and requiring instead the reinstatement of the employees in the payroll.
However, in a resolution dated July 12, 1999, this Court referred the case to the Court
of Appeals, pursuant to the principle embodied in National Federation of Labor v.
Laguesma.[5]
On October 19, 1999, the Court of Appeals rendered a Decision dismissing the
Unions petition and affirming the Secretary of Labors Order for payroll
reinstatement. The Court of Appeals held that the challenged order is merely an error
of judgment and not a grave abuse of discretion and that payroll reinstatement is not
prohibited by law, but may be called for under certain circumstances.[6]
Hence, the Union now stands before this Court maintaining that:
THE HONORABLE COURT OF APPEALS GRIEVIOUSLY ERRED IN RULING THAT THE
SECRETARY OF LABORS UNAUTHORIZED ORDER OF MERE PAYROLL REINSTATEMENT
IS NOT GRAVE ABUSE OF DISCRETION[7]
The petition has merit.
The Court of Appeals based its decision on this Courts ruling in University of Santo
Tomas (UST) v. NLRC.[8] There, the Secretary assumed jurisdiction over the labor
dispute between striking teachers and the university. He ordered the striking teachers
to return to work and the university to accept them under the same terms and
conditions. However, in a subsequent order, the NLRC provided payroll reinstatement
for the striking teachers as an alternative remedy to actual reinstatement. True, this
Court held therein that the NLRC did not commit grave abuse of discretion in providing
for the alternative remedy of payroll reinstatement. This Court found that it was
merely an error of judgment, which is not correctible by a special civil action
for certiorari. The NLRC was only trying its best to work out a satisfactory ad
hoc solution to a festering and serious problem.
However, this Court notes that the UST ruling was made in the light of one very
important fact: the teachers could not be given back their academic assignments
since the order of the Secretary for them to return to work was given in the middle of
the first semester of the academic year. The NLRC was, therefore, faced with a
situation where the striking teachers were entitled to a return to work order, but the

university could not immediately reinstate them since it would be impracticable and
detrimental to the students to change teachers at that point in time.
In the present case, there is no showing that the facts called for payroll
reinstatement as an alternative remedy. A strained relationship between the striking
employees and management is no reason for payroll reinstatement in lieu of actual
reinstatement. Petitioner correctly points out that labor disputes naturally involve
strained relations between labor and management, and that in most strikes, the
relations between the strikers and the non-strikers will similarly be tense. [9] Bitter
labor disputes always leave an aftermath of strong emotions and unpleasant
situations. Nevertheless, the government must still perform its function and apply the
law, especially if, as in this case, national interest is involved.
After making the distinction between UST and the present case, this Court now
addresses the issue of whether the Court of Appeals erred in ruling that the Secretary
did not commit any grave abuse of discretion in ordering payroll reinstatement in lieu
of actual reinstatement. This question is answered by the nature of Article 263(g). As
a general rule, the State encourages an environment wherein employers and
employees themselves must deal with their problems in a manner that mutually suits
them best. This is the basic policy embodied in Article XIII, Section 3 of the
Constitution,[10] which was further echoed in Article 211 of the Labor Code. [11] Hence, a
voluntary, instead of compulsory, mode of dispute settlement is the general rule.
However, Article 263, paragraph (g) of the Labor Code, which allows the Secretary
of Labor to assume jurisdiction over a labor dispute involving an industry
indispensable to the national interest, provides an exception:
(g)
When, in his opinion, there exists a labor dispute causing or likely to cause a
strike or lockout in an industry indispensable to the national interest, the Secretary of
Labor and Employment may assume jurisdiction over the dispute and decide it or
certify the same to the Commission for compulsory arbitration. Such assumption or
certification shall have the effect of automatically enjoining the intended or impending
strike or lockout as specified in the assumption or certification order. If one has
already taken place at the time of assumption or certification, all striking or locked out
employees shall immediately return to work and the employer shall immediately
resume operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout. x x x
This provision is viewed as an exercise of the police power of the State. A
prolonged strike or lockout can be inimical to the national economy and, therefore, the
situation is imbued with public necessity and involves the right of the State and the
public to self-protection.[12]
Under Article 263(g), all workers must immediately return to work and all
employers must readmit all of them under the same terms and conditions prevailing
before the strike or lockout. This Court must point out that the law uses the precise
phrase of under the same terms and conditions, revealing that it contemplates only
actual reinstatement. This is in keeping with the rationale that any work stoppage or
slowdown in that particular industry can be inimical to the national economy. It is
clear that Article 263(g) was not written to protect labor from the excesses of
management, nor was it written to ease management from expenses, which it

normally incurs during a work stoppage or slowdown. It was an error on the part of
the Court of Appeals to view the assumption order of the Secretary as a measure to
protect the striking workers from any retaliatory action from the Hotel. This Court
reiterates that this law was written as a means to be used by the State to protect itself
from an emergency or crisis. It is not for labor, nor is it for management.
It is, therefore, evident from the foregoing that the Secretarys subsequent order
for mere payroll reinstatement constitutes grave abuse of discretion amounting to
lack or excess of jurisdiction. Indeed, this Court has always recognized the great
breadth of discretion by the Secretary once he assumes jurisdiction over a labor
dispute. However, payroll reinstatement in lieu of actual reinstatement is a departure
from the rule in these cases and there must be showing of special circumstances
rendering actual reinstatement impracticable, as in the USTcase aforementioned, or
otherwise not conducive to attaining the purpose of the law in providing for
assumption of jurisdiction by the Secretary of Labor and Employment in a labor
dispute that affects the national interest. None appears to have been established in
this case. Even in the exercise of his discretion under Article 236(g), the Secretary
must always keep in mind the purpose of the law. Time and again, this Court has held
that when an official by-passes the law on the asserted ground of attaining a laudable
objective, the same will not be maintained if the intendment or purpose of the law
would be defeated.[13]
WHEREFORE, the petition is GRANTED and the assailed Decision of the Court of
Appeals dated October 19, 1999 is REVERSED and SET ASIDE. The Order dated April
30, 1998 issued by the Secretary of Labor and Employment modifying the earlier
Order dated April 15, 1998, is likewise SET ASIDE. No pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, and Carpio, JJ., concur.