G.R. No.

91980
June 27, 1991
ILAW AT BUKLOD NG MANGGAGAWA (IBM), petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION (First Division), HON. CARMEN TALUSAN and SAN MIGUEL
CORPORATION, respondents.
Facts: Petitioner Union proposed to respondent Company an increase in salary per employee. Increase
25 pesos, negotiated down to 15 pesos. But Respondent only increased salary by 7 pesos. Because of
this wage distortion, the Union went on what they considered a strike by only working 8 hour shifts
from Monday to Friday as opposed to their usual 10-14 hour shifts. There were also 8 hour Saturday
shifts; the extra hours during weekdays were considered Built-in overtime that benefitted the
employer and employees, these working hours was agreed upon for more than 5years. The alleged
strike was considered by the Respondent a slowdown because the decrease in working hours caused
heavy losses. Their CBA expressly stated they were not allowed strike/lockout privileges in the event
of a wage distortion and that it would only have to be subjected to arbitration. Petitioners contended
that they cannot be compelled to work for more than the prescribed 8 hour shift.
Issue: Whether or not the Unions strike/lockout was legal.
Held: No, it was illegal.
By LAW: The rules implementing RA 6727 issued by the Secretary of Labor and Employment - wage
distortions should be first settled voluntarily by the parties and eventually by compulsory arbitration,
declare that, "Any issue involving wage distortion shall not be a ground for a strike/lockout."
By CONTRACT: The Collective Bargaining Agreement between the parties mentions
Section 1.Any and all disputes, disagreements and controversies of any kind between the
COMPANY and the UNION and/or the workers involving or relating to wages, hours of work,
conditions of employment and/or employer-employee relations arising during the effectivity of this
Agreement or any renewal thereof, shall be settled by arbitration in accordance with the procedure set
out in this Article. No dispute, disagreement or controversy which may be submitted to the grievance
procedure in Article IX shall be presented for arbitration unless all the steps of the grievance
procedure are exhausted (Article V Arbitration).
Section 1.The UNION agrees that there shall be no strikes, walkouts, stoppage or
slowdown of work, boycotts, secondary boycotts, refusal to handle any merchandise, picketing, sitdown strikes of any kind, sympathetic or general strikes, or any other interference with any of the
operations of the COMPANY during the terms of this agreement (Article VI).
The partial strike or concerted refusal by the Union members to follow the five-year-old work schedule
which they had therefore been observing, resorted to as a means of coercing correction of "wage
distortions," was therefore forbidden by law and contract and, on this account, illegal.

Slowdown: "strike on the installment plan;" as a willful reduction in the rate of work by concerted
action of workers for the purpose of restricting the output of the employer, in relation to a labor
dispute; as an activity by which workers, without a complete stoppage of work, retard production or
their performance of duties and functions to compel management to grant their demands.

Duncan Assoc. of Detailman-PTGWO vs . Glaxo Wellcome Phils., Inc.

FACTS:Tecson was hired by Glaxo as a medical representative on Oct. 24, 1995. Contract of
employment signed by Tecson stipulates, among others, that he agrees to study and abide by the
existing company rules; to disclose to management any existing future relationship by consanguinity or
affinity with co-employees or employees with competing drug companies and should management find
that such relationship poses a prossible conflict of interest, to resign from the company. Company's
Code of Employee Conduct provides the same with stipulation that management may transfer the
employee to another department in a non-counterchecking position or preparation for employment
outside of the company after 6 months.
Tecson was initially assigned to market Glaxo's products in the Camarines Sur-Camarines Norte area
and entered into a romantic relationship with Betsy, an employee of Astra, Glaxo's competition. Before
getting married, Tecson's District Manager reminded him several times of the conflict of interest but
marriage took place in Sept. 1998. In Jan. 1999, Tecson's superiors informed him of conflict of intrest.
Tecson asked for time to comply with the condition (that either he or Betsy resign from their respective
positions). Unable to comply with condition, Glaxo transferred Tecson to the Butuan-Surigao CityAgusan del Sur sales area. After his request against transfer was denied, Tecson brought the matter to
Glaxo's Grievance Committee and while pending, he continued to act as medical representative in the
Camarines Sur-Camarines Norte sales area. On Nov. 15, 2000, the National Conciliation and
Mediation Board ruled that Glaxo's policy was valid...
ISSUE:Whether or not the policy of a pharmaceutical company prohibiting its employees from
marrying employees of any competitor company is valid
RULING: On Equal Protection, Glaxo has a right to guard its trade secrets, manufacturing formulas,
marketing strategies, and other confidential programs and information from competitors. The
prohibition against pesonal or marital relationships with employees of competitor companies upon
Glaxo's employees is reasonable under the circumstances because relationships of that nature might
compromise the interests of the company. That Glaxo possesses the right to protect its economic
interest cannot be denied.
It is the settled principle that the commands of the equal protection clause are addressed only to the
state or those acting under color of its authority. Corollarily, it has been held in a long array of US
Supreme Court decisions that the equal protection clause erects to shield against merely privately
conduct, however, discriminatory or wrongful.
The company actually enforced the policy after repeated requests to the employee to comply with the
policy. Indeed the application of the policy was made in an impartial and even-handed manner, with
due regard for the lot of the employee.
On Constructive Dismissal
Constructive dismissal is defined as a quitting, an involuntary resignation resorted to when continued
employment becomes impossible, unreasonable or unlikely; when there is demotion in rank, or
diminution in pay; or when a clear discrimination, insensibility, or disdain by an employer becomes
unbearable to the employee. None of these conditions are present in the instant case.
HELD: The challenged policy has been implemented by Glaxo impartially and disinterestedly for a
long period of time. In the case at bar, the record shows that Glaxo gave Tecson several chances to
eliminate the conflict of interest brought about by his relationship with Betsy, but he never availed of
any of them.
DISPOSITIVE:"WHEREFORE, the petition is DENIED for lack of merit."

[G.R. No. 131247.

January 25, 1999]

PRUBANKERS ASSOCIATION, petitioner, vs. PRUDENTIAL BANK & TRUST COMPANY,

respondent.
Facts: On November 18, 1993, the Regional Tripartite Wages and Productivity Board of Region V
issued Wage Order No. RB 05-03 which provided for a Cost of Living Allowance (COLA) to workers
in the private sector who ha[d] rendered service for at least three (3) months before its effectivity, and
for the same period [t]hereafter, in the following categories: SEVENTEEN PESOS AND FIFTY
CENTAVOS (P17.50) in the cities of Naga and Legaspi; FIFTEEN PESOS AND FIFTY CENTAVOS
(P15.50) in the municipalities of Tabaco, Daraga, Pili and the city of Iriga; and TEN PESOS (P10.00)
for all other areas in the Bicol Region.
Subsequently on November 23, 1993, the Regional Tripartite Wages and Productivity Board of Region
VII issued Wage Order No. RB VII-03, which directed the integration of the COLA mandated pursuant
to Wage Order No. RO VII-02-A into the basic pay of all workers. It also established an increase in the
minimum wage rates for all workers and employees in the private sector as follows: by Ten Pesos
(P10.00) in the cities of Cebu, Mandaue and Lapulapu; Five Pesos (P5.00) in the municipalities of
Compostela, Liloan, Consolacion, Cordova, Talisay, Minglanilla, Naga and the cities of Davao, Toledo,
Dumaguete, Bais, Canlaon, and Tagbilaran.
The petitioner then granted a COLA of P17.50 to its employees at its Naga Branch, the only branch
covered by Wage Order No. RB 5-03, and integrated the P150.00 per month COLA into the basic pay
of its rank-and-file employees at its Cebu, Mabolo and P. del Rosario branches, the branches covered
by Wage Order No. RB VII-03.
On June 7, 1994, respondent Prubankers Association wrote the petitioner requesting that the Labor
Management Committee be immediately convened to discuss and resolve the alleged wage distortion
created in the salary structure upon the implementation of the said wage orders. Respondent
Association then demanded in the Labor Management Committee meetings that the petitioner extend
the application of the wage orders to its employees outside Regions V and VII, claiming that the
regional implementation of the said orders created a wage distortion in the wage rates of petitioners
employees nationwide. As the grievance could not be settled in the said meetings, the parties agreed to
submit the matter to voluntary arbitration. The Arbitration Committee formed for that purpose was
composed of the following: public respondent Froilan M. Bacungan as Chairman, with Attys. Domingo
T. Anonuevo and Emerico O. de Guzman as members. The issue presented before the Committee was
whether or not the banks separate and regional implementation of Wage Order No. 5-03 at its Naga
Branch and Wage Order No. VII-03 at its Cebu, Mabolo and P. del Rosario branches, created a wage
distortion in the bank nationwide.
Issue: Whether or not there was a wage distortion.
Held: No. Wage distortion involves four elements:
1. An existing hierarchy of positions with corresponding salary rates 2. A significant change in the
salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one
3. The elimination of the distinction between the two levels 4. The existence of the distortion in the
same region of the country.
In the present case, it is clear that no wage distortion resulted when respondent implemented the
subject Wage Orders in the covered branches. In the said branches, there was an increase in the salary
rates of all pay classes. Furthermore, the hierarchy of positions based on skills, length of service and
other logical bases of differentiation was preserved. In other words, the quantitative difference in
compensation between different pay classes remained the same in all branches in the affected region.
Put differently, the distinction between Pay Class 1 and Pay Class 2, for example, was not eliminated
as a result of the implementation of the two Wage Orders in the said region. Hence, it cannot be said
that there was a wage distortion.
Contrary to petitioners postulation, a disparity in wages between employees holding similar positions
but in different regions does not constitute wage distortion as contemplated by law.

G.R. No. 96169

September 24, 1991
EMPLOYERS CONFEDERATION OF THE PHILIPPINES, petitioner, vs. NATIONAL
WAGES AND PRODUCTIVITY COMMISSION AND REGIONAL TRIPARTITE WAGES
AND PRODUCTIVITY BOARD-NCR, TRADE UNION CONGRESS OF THE PHILIPPINES,
respondents.
Facts: The Employers Confederation of the Philippines (ECOP) is questioning the validity of Wage
Order No. NCR-01-A dated October 23, 1990 of the Regional Tripartite Wages and Productivity
Board, National Capital Region, promulgated pursuant to the authority of Republic Act No. 6727. This
act sets out not only an increase in the minimum wage, but also sets salary ceilings as stated:
Section 1. Upon the effectivity of this Wage Order, all workers and employees in the private sector in
the National Capital Region already receiving wages above the statutory minimum wage rates up to
one hundred and twenty-five pesos (P125.00) per day shall also receive an increase of seventeen pesos
(P17.00) per day.
ECOP insists that wage is a legislative function and Republic Act No. 6727 delegated to the regional
boards no more "than the power to grant minimum wage adjustments" and "in the absence of clear
statutory authority, the boards may no more than adjust "floor wages."
The Solicitor General argues that Republic Act No. 6727 is intended to correct "wage distortions" and
the salary-ceiling method (of determining wages) is meant, precisely, to rectify wage distortions.
Issue: Whether or not the Board has authority through RA 6727 to include salary-ceilings in their
Wage Orders.
Held: Yes, it can. The Court is inclined to agree with the Government. In the National Wages and
Productivity Commission's Order of November 6, 1990, the Commission noted that the determination
of wages has generally involved two methods, the "floor-wage" method and the "salary-ceiling"
method.
The Court is not convinced that the Regional Board of the National Capital Region, in decreeing an
across-the-board hike, performed an unlawful act of legislation. It is true that wage-fixing, like rate
constitutes an act Congress; it is also true, however, that Congress may delegate the power to fix rates
provided that, as in all delegations cases, Congress leaves sufficient standards.
The salary cap method was found to be reasonable as it has since been Government policy.

Floor wages - involves the fixing of determinate amount that would be added to the prevailing
statutory minimum wage.
Salary ceilings - wage adjustment is applied to employees receiving a certain denominated salary
ceiling.

[G.R. No. 140689.

February 17, 2004]
BANKARD EMPLOYEES UNION-WORKERS ALLIANCE TRADE UNIONS, petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION and BANKARD, INC., respondents.
Facts: Respondent Company classifies their employees from rank I V with their own respective
salaries distinct and dependent on each rank. Its Board of Directors approved a New Salary Scale,
increasing the salaries of new employees from all classifications to compete with the hiring rates of the
labor market. Accordingly, the salaries of employees who fell below the new minimum rates were also
adjusted to reach such rates under their levels.
Petitioner Union wanted the Company to include an increase in the salary of their old regular
employees as well but was sadly denied. They filed for a notice of strike but this was averted when the
dispute was certified by the Secretary of Labor and Employment for compulsory arbitration.
Petitioner claims that the order creates a wage distortion as the old salary gaps between the different
classifications of employees were still reflected by the adjusted salary rates.
Issue: Whether or not this constitutes as a wage distortion.
Held: No it doesnt. Wage distortion was is a situation where an increase in prescribed wage rates
results in the elimination or severe contraction of intentional quantitative differences in wage or salary
rates between and among employee groups in an establishment as to effectively obliterate the
distinctions embodied in such wage structure based on skills, length of service, or other logical bases
of differentiation.
The four elements of wage distortion, to wit:
(1.) An existing hierarchy of positions with corresponding salary rates;
(2) A significant change in the salary rate of a lower pay class without a concomitant increase in the
salary rate of a higher one;
(3) The elimination of the distinction between the two levels; and
(4) The existence of the distortion in the same region of the country.
In the case at bar, the first and the third elements are missing.
Employees cannot create their own independent classification and use it as a basis to demand an
across-the-board increase in salary.
It is thus clear that there is no hierarchy of positions between the newly hired and regular employees
of Bankard.
While seniority may be a factor in determining the wages of employees, it cannot be made the sole
basis in cases where the nature of their work differs.

[G.R. No. 166647.

Pag-asa Steel Works v. CA

March 31, 2006]

Facts: RTWPB issued a Wage Order providing for an increase of 13 pesos in the salaries of employees
receiving the minimum wage and a consequent increase in the rate to 198. Subsequent to this,
petitioner-company and the Union entered into a Collective Bargaining Agreement which granted an
increase of 15 pesos for the first year, 25 for the second year and 30 for the third year. Months later, a
wage order was issued by the NCR providing for a 25 pesos increase in the salary of employees
receiving the minimum wage and increased the minimum wage to 223.50. Petitioner paid the 25 pesos
increase to all its employees. A year after, the employees were granted the second year increase
provided in the CBA. On that same year, a wage order was issued which provided for the setting of the
new minimum wage at 250.00 or an increase of 26 pesos. The Union then requested the company to
implement the latest wage order. Petitioner company rejected, claiming that since none of the
employees were receiving a daily salary rate lower than 250 and there was no wage distortion, it was
not obliged to grant the wage increase.
Issue: Whether or not the company was obliged to grant the wage increase under the Wage Order
issued as a matter of practice
Ruling: No. It is not obliged to grant the wage increase. The wage order provides that only those in the
private sector in the NCR receiving the daily minimum wage rate of 223 per day would receive an
increase, thereby setting the wage rate to 250 pesos. There is no dispute that when the wage order was
issued, the lowest paid employee of the company was receiving a wage higher than 250 pesos. As such,
employees had not right to demand for the increase.

GR 181972 (2009)
Philippine Hoteliers, Inc. vs National Union of Workers

Facts:
Wage Order No. 9 approved by the Regional Tripartite Wages and Productivity Board (RTWPB) of the
NCR took effect stating that all private sector workers and employees in the NCR daily wage rates of
P250.00 up to P290.00 shall receive an emergency cost of living allowance in the amount of P30.00
per day. Dusit Hotel did not follow the wage order contesting that the retroactive increases they
implement could raise the hotel employees daily salary rates above P290.00, consequently, placing said
employees beyond the coverage of WO No. 9. National Union of Workers argued on the fact that its
CBA with Dusit Hotel does not contain any provision on creditability, thus, Dusit Hotel cannot credit
the salary increases as compliance with the ECOLA required to be paid under WO No. 9.
Issue:
Whether or not the 144 hotel employees were still entitled to ECOLA granted by WO No. 9 despite the
increases in their salaries.
Ruling:
Court holds that the retroactive salary increases should be taken into account in the determination of
which hotel employees were entitled to ECOLA under WO No. 9. After applying the salary increases
retroactive to 1 January 2001, 82 hotel employees still had daily salary rates between P250.00 and
P290.00, thus, entitling them to receive the first tranch of ECOLA, equivalent to P15.00 per day,
beginning 5 November 2001, the date of effectivity of WO No. 9, until 31 December 2001. Following
the second round of salary increases retroactive to 1 January 2002, all the hotel employees were
already receiving daily salary rates above P290.00, hence, leaving no one qualified to receive ECOLA.
Receipt by the 82 hotel employees of their shares from the service charges collected by Dusit Hotel
shall not be deemed payment of their ECOLA from 5 November 2001 to 31 December 2001.

G.R. No. 100222-23.

September 14, 1993
RAJAH HUMABON HOTEL, INC. vs. HON. CRESENCIANO TRAJANO et. al
Facts: Subsequent to the initial pleading filed by respondent-employees before the regional director of
DOLE for redress in regard to underpaid wages and non-payment of benefits, petitioners were
instructed to allow the inspection of the employment records of respondents on April 4, 1989.
However, no inspection could be done on that date on account of the picket staged by other workers.
At the re-scheduled examination after closure of petitioners' business on April 16, 1989, instead of
presenting the payrolls and daily time records of private respondents, petitioner Peter Po submitted a
motion to dismiss on the supposition that the regional director has no jurisdiction over the case because
the employer-employee relationship had been served as a result of the closure of petitioners' business,
apart from the fact that each of the claims of private respondents exceeded the jurisdictional limit of
P5,000.00 pegged by Republic Act No. 6715 or the New Labor Relations Law.

Issue: Who between the regional director of DOLE and the labor arbiter has jurisdictional competence
over the complaint of private respondents? To answer this will be to evaluate what will be the
applicable law to the complaint, Executive Order No. 111 or Republic Act No. 6715?

Ruling: Section 2 of EO No. 111, promulgated on December 24, 1986, which amended Article 128(b)
of the Labor Code gives concurrent jurisdiction to both the Secretary of Labor (or the various regional
directors) and the labor arbiters over money claims among the other cases mentioned by Article 217 of
the Labor Code. This provision merely confirms/reiterates the enforcement/adjudication authority of
the Regional Director over uncontested money claims in cases where an employer-employee
relationship still exists.
However, with the enactment of Republic Act No. 6715, which took effect on March 21, 1989 or seven
days after the complaint at bar was filed on March 14, 1989, Articles 129 and 217 of the Labor Code
were amended, there is no doubt that the regional directors can try money claims only if the following
requisites concur: (1) the claim is presented by an employee or person employed in domestic or
household service, or househelper under the code; (2) the claimant, no longer being employed, does
not seek reinstatement; and (3) the aggregate money claim of the employee or housekeeper does not
exceed five thousand pesos (P5,000.00). Thus, the power to hear and decide employees' claims arising
from employer-employee relations, exceeding P5,000.00 for each employee should be left to the Labor
Arbiter as the exclusive repository of the power to hear and decide such claims.
In the instant case, a simple examination of the labor arbiter's impugned order dated September 25,
1989 readily shows that the aggregate claims of each of the twenty-five employees of petitioner are
above the amount of P5,000.00 fixed by Republic Act No. 6715. Therefore, the regional director had
no jurisdiction over the case. Hence, the petition is granted and the public respondent is directed to
refer the workers' money claims to the appropriate Labor Arbiter for proper disposition.

G.R. No. 174641

NATIONAL MINES and ALLIED WORKERS UNION (NAMAWU) vs MARCOPPER
MINING CORPORATION
FACTS: On April 1, 1996, the DENR ordered the indefinite suspension of MARCOPPERs operations
for causing damage to the environment of the Province of Marinduque by spilling the companys mine
waste or tailings from an old underground impounding area into the Boac River, in violation of its
Environmental Compliance Certificate (ECC).
NAMAWU was the exclusive bargaining representative of the rank-and-file workers of
MARCOPPER. On April 10, 1996, it filed a complaint with the Regional Arbitration Branch No. IV of
the NLRC against MARCOPPER for nonpayment of wages, separation pay, damages, and attorneys
fees; the case is hereinafter referred to as the environmental incident case. NAMAWU claimed that due
to the indefinite suspension of MARCOPPERs operations, its members were not paid the wages due
them for six months (from April 12, 1996 to October 12, 1996) under Rule X, Book III, Section 3(b) of
the Implementing Rules and Regulations of the Labor Code. It further claimed that its members are
also entitled to be paid their separation pay pursuant to their collective bargaining agreement with
MARCOPPER and pursuant to Book IV, Rule I, 4(b) of the Labor Codes implementing rules.
MARCOPPER denied liability, contending that NAMAWU had not been authorized by the individual
employees the real parties-in-interest to file the complaint; and that the complaint should be dismissed
for lack of certification of non-forum shopping, for the pendency of another action between the same
parties, and for lack of factual and legal basis.
ISSUE: WON NAMAWU was in did Forum Shopping?
YES, both the previous and the present cases are between the same parties NAMAWU and
MARCOPPER. Both cases refer to termination of employment and its consequences. In fact, the
payment of separation pay that NAMAWU seeks in the present case was considered by the NLRC in
its decision in the illegal strike case, although the award was stricken out by the CA when the illegal
strike case was brought to it for review. Thus, the two cases are intimately intertwined in the
consideration made by the tribunals a quo as well as in point of time as our discussions below will
show. If they differ at all, the difference lies only in the grounds and circumstances of termination since
the illegality of NAMAWUs strike of February 27, 1995 is not under consideration in the present case,
having been laid to rest by the final and executory decision of this Court of July 12, 2000.
ISSUE: WON the Employees were illegally dismissed?
RULING: QUALIFY, The employment of the NAMAWU officers and members had been declared
terminated on March 7, 1995 as a result of their failure to return to work after their strike of February
27, 1995. Thereafter, the illegal strike litigation commenced, resulting in a decision by the NLRC on
November 11, 1996 declaring the strike illegal. Apart from confirming the termination of the services
of the union officers, the NLRC declared.
However, We take judicial notice of the fact that due to the environmental incident involving spillage
of mine waste and tailings, the Deparment of Environment and Natural Resources ordered the
cessation of operation of the Company on April 1, 1996 rendering the workers out of work, which to
this time, is already beyond the allowable period of six (6) months temporary suspension of operation
under Article 286 of the Labor Code. This being so, said Union members are entitled to separation pay
in lieu of reinstatement.
Let it be stressed that the grant of separation pay shall include all the Union members, the grant of the
same being based on their termination of employment by operation of law. The 13 officers of the
Union whom we declared to have lost their employment status and the 44 Union members who retired
are excluded from the grant of the separation pay. Reduced in figure (sic) there are 562 Union
members who are entitled to separation pay.
In contrast with the above, the case of the three other employees Apollo V. Saet, Rogelio Regencia and
Jose Romasanta who were in MARCOPPERs employ at the time of the suspension of operations on
April 12, 1996 and for whom MARCOPPER properly posted an appeal bond before the NLRC is
another matter. We find the CA decision ordering the NLRC to give due course to the MARCOPPER

appeal to be correct as the appeal has not in fact been heard and considered; their case, in other words,
is still very much alive. The continued viability of their case and the dictates of strict legality require
that we now remand the case to the NLRC, as the CA did, for consideration on appeal.
We recognize, however, that their case has now dragged on for more than a decade since its inception
on April 10, 1996.As we had done in past similar situations and cases we deem it the better recourse in
the interest of speedy justice and fair play to directly resolve their case at our level in order to finally
settle the dispute once and for all. We therefore proceed now to its consideration.
Thus, as of that date (June 21, 1996), the temporary suspension of operations that started on April 12,
1996 became permanent so that MARCOPPER did not have to wait for the end of the six-month
suspension of operations before the services of the three employees were deemed terminated. In Labor
Code terms, the cancellation of the ECC on June 21, 1996 amounted to a company closure governed
by Article 283 of the Labor Code the provision that governs the relationship of employers and
employees in closure situations. Under the circumstances, we can only conclude that the general no
work, no pay rule should prevail with respect to employees wages during the suspension period,
subject to existing CBA terms on leave credits and similar benefits of employees.
Because the initial suspension of operations that the DENR imposed eventually turned into an
involuntary closure as discussed above, Article 283 of the Labor Code comes into play entitling the
three remaining employees the payment of separation pay computed under the terms of that Article.
The termination of employment date, for separation pay purposes, should be computed from June 21,
1996 and not from October 12, 1996 (or six months from the April 12, 1996 suspension of operation
date); June 21, 1996 must be the closure date as it is from this date that MARCOPPER, by law, ceased
to have any authority to conduct its mining operations.
In the absence of any showing that NAMAWU could represent other similarly situated employees who
are not its members, we cannot consider these other employees (whose circumstances have never been
discussed and who all remain unnamed) to be covered by the terms of this Decision.

Meteoro et al v. Creative Creatures

FACTS
CREATIVE Creatures, Inc. is a business that primarily caters to the production design requirements of
ABS-CBN. CREATIVE hired the 33 PETITIONERS as artists, carpenters, and welders to design,
create, assemble, set-up and dismantle the props of production sets. PETITIONERS filed complaints
for non-payment and illegal deductions with DOLE-NCR. The benefits allegedly unpaid were the
night-shift differential, overtime, holiday, 12th month, premium (Sunday and/or rest day), SIL, and
paternity leave pay, and other benefits.
a.During investigation, the labor inspector noted that records were not made available, and that
CREATIVE claimed the PETITIONERS were independent talent workers.
b.In their position paper, CREATIVE argued that DOLE had no jurisdiction since there is an absence
of an employer-employee relationship, as PETITIONERS were free-lance
On Apr. 1999 PETITIONERS filed complaints for illegal dismissal with payment with the NLRC. On
Oct. 1999, DOLE Regional Director issued an Order in the DOLE-NCR case, directing CREATIVE to
pay the money claims (totaling P2.7 Million). The Regional Director sustained PETITIONERs claim
(1) of an employer-employee relationship, and (2) that they were regular employees, and that (3)
DOLE had jurisdiction. On appeal, the DOLE Secretary affirmed the Regional Director. She anchored
DOLEs jurisdiction on the agencys visitorial and enforcement powers.
On May 2005, The CA declared the DOLE decisions as null and void. It noted that under art. 128, the
Regional Director may be divested of jurisdiction when the respondent disputes the existence of an
employer-employee relationship, as in this case. It no longer referred the case to the NLRC as there
was one pending already.
ISSUE: WON the DOLE was divested of jurisdiction, i.e. the case falls within the exception clause in
art. 128(b) of the Labor Code.
HELD: YES. Petition dismissed; CA decision, affirmed. The case falls within the exclusive jurisdiction
of the NLRC.
The DOLE Secretary or her authorized representative has jurisdiction to enforce compliance with labor
standards under their broad visitorial and enforcement powers in art. 128. Legislative history: Art. 128
has gone through several amendments. In Servandos v. SOLE, the Court held that the DOLE did not
have visitorial and enforcement powers when the amounts claimed exceed P5,000. This would later be
reversed in Guico v. Quisumbing, Allied Investigation v. SOLE, and Cireneo v. Bowling. In any event,
the issue was settled by R.A. No. 7730, which freed art. 128(b) from the jurisdiction restrictions in art.
129 and 217.
Nevertheless, the power of the Regional Director to hear and decide monetary claims is not absolute.
Under art. 128(b), there is an exception clause, which divests the DOLE of jurisdiction when the
following elements all concur: (1) the employer contests and raises issues with the findings of the
inspector; (2) in order to resolve the issues, there is a need to examine evidentiary matters; and (3) the
matters are not verifiable in the normal course of inspection.
The CA correctly applied the exception clause: (1) CREATIVE registered its objection during
inspection and in its position paper, and it continues to contest the DOLE jurisdiction; (2) there is a
need to examine evidentiary matters, since the four-fold test involves questions of fact; (3) the key
requirement, that the evidentiary matters are not verifiable in the normal course of inspection, is also
present, since while the check vouchers could be readily verified, the claims of CREATIVE that the
PETITIONERS were not working exclusively for them could not.
To contest does not mean to simply raise lack of jurisdiction, but to question the findings of the
inspection. In sum, because the three requisites have been met, the DOLE Reg. Director should have
endorsed the case to the NLRC.

G.R. No. 161794,

June 16, 2009
NESTOR J. BALLADARES, ET. AL. VS. PEAK VENTURES CORPORATION AND
YANGCO MARKET OWNERS ASSOCIATION
Ponente: J. Nachura
FACTS: Balladares and co-petitioners were hired as security guards by Peak Ventures and were
assigned at the premises of Yangco Market. They filed a complaint for underpayment of wages against
Peak Ventures with the DOLE. The Regional Director of DOLE rendered judgment in favor of
petitioners and ruled that Peak Ventures and Yangco Market are solidarily liable to petitioners, said
decision was upheld by Secretary of Labor. On certiorari, the Court of Appeals, ruled that Regional
Director has no jurisdiction over the case because the claims of each petitioners exceeded PHP5,000,
therefore power to adjudicate such claims belong to the Labor Arbiter.
ISSUE: Did the Regional Director correctly assume jurisdiction over the case?
LAW: Art. 128 of the Labor Code on Visitorial and Enforcement Powers
RULING: Yes, the Regional Director correctly assume jurisdiction over the case. The complaint
involved underpayment of wages. In order to verify the allegations in the complaint, DOLE conducted
an inspection which yielded proof of violations of labor standards. By nature of the complaint and
from the result of the inspection the authority of the DOLE under Art. 128 of Labor Code came into
play regardless of monetary value of claims involved. The Secretary of Labor or his duly authorized
representatives is now empowered to hear and decide in summary proceeding, any matter involving the
recovery of amount of wages and other monetary claims arising out of employer-employee relationship
at the time of inspections, even if the amount of money claims exceed PHP5000.
OPINION: The Regional Director correctly assumed jurisdiction over the money claims of petitioners
even if the claims exceeded PHP5,000. Said jurisdiction was in accordance with Art. 128(b) of the
Labor Code and the case does not fall under the exception clause. We must take note that the doctrine
in the Servando case is no longer controlling upon the amendment of Art. 128 by RA 7730, Secretary
of Labor or his duly authorized representative is now empowered to hear and decide money claims
arisingout of employer-employee relationship at the time of inspection. In this case, Peak Ventures did
not contest the findings of Regional Director, it even admitted before the Court of Appeals that
petitioners were not paid correct wages and as a defense tried to pass the buck to Yangco Market,
therefore the case does not fall under the exceptions provided in Art. 128 (b) of the Labor Code which
would have divested Regional Director of jurisdiction over the case.

Congson vs NLRC
Facts:Private respondents were hired on various dates 3 by petitioner as regular piece-rate workers.
They were uniformly paid at a rate of P1.00 per tuna weighing thirty (30) to eighty (80) kilos per
movement. They worked seven (7) days a week.
During the first week of June 1990, petitioner notified his workers of his proposal to reduce the rateper-tuna movement due to the scarcity of tuna. Private respondents resisted petitioner's proposed rate
reduction. When they reported for work the next day, they were informed that they had been replaced
by a new set of workers.
On June 1990, private respondents filed a case against petitioner before the NLRC for underpayment
of wages (non-compliance with Rep. Act Nos. 6640 and 6727) and non-payment of overtime pay, 13th
month pay, holiday pay, rest day pay, and five (5)-day service incentive leave pay; and for constructive
dismissal. With respect to their monetary claims, private respondents charged petitioner with violation
of the minimum wage law, alleging that with petitioner's rates and the scarcity of tuna catches, private
respondents' average monthly earnings each did not exceed ONE THOUSAND PESOS (P1,000.00). In
addition to the amount of P1.00 per 'bariles' per movement herein complainants get the intestines and
liver of the tuna as part of their salary. That for every tuna delivered, herein complainants extract at
least three (3) kilos of intestines and liver. That the minimum prevailing price of tuna intestine and
liver in 1986 to 1990 range from P15.00 to P20.00/kilo. The value of the tuna intestine and liver should
be computed in arriving at the daily wage of herein complainants because the very essence of the
agreement between complainants and respondent is: complainants shall be paid only P1.00 per tuna per
movement BUT the intestines and liver of the tuna delivered shall go to the herein complainants. It
should be noted that tuna intestines and liver are easily disposed of in any public market. What they are
after, in truth and in fact is the tuna intestines and liver which they can easily convert into cash." Quite
clearly, petitioner admits that the P1.00-per-tuna movement is the actual wage rate applied to private
respondents as expressly agreed upon by both parties. Petitioner further admits that private respondents
were entitled to retrieve the tuna intestines and liver as part of their compensation.
Issue: WON the means of payment of the wage is valid.
Held: The means of payment of wage is invalid.
The Labor Code expressly provides:
Article 102. Forms of Payment. No employer shall pay the wages of an employee by means of,
promissory notes vouchers, coupons, tokens, tickets, chits, or any object other than legal tender, even
when expressly requested by the employee. Payment of wages by check or money order shall be
allowed when such manner of payment is customary on the date of effectivity of this Code, or is
necessary because as specified in appropriate regulations to be issued by the Secretary of Labor or as
stipulated in a collective bargaining agreement."
Undoubtedly, petitioner's practice of paying the private respondents the minimum wage by means of
legal tender combined with tuna liver and intestines runs counter to the above cited provision of the
Labor Code. The fact that said method of paying the minimum wage was not only agreed upon by both
parties in the employment agreement but even expressly requested by private respondents, does not
shield petitioner. Article 102 of the Labor Code is clear. Wages shall be paid only by means of legal
tender. The only instance when an employer is permitted to pay wages in forms other than legal tender,
that is, by checks or money order, is when the circumstances prescribed in the second paragraph of
Article 102 are present.

G.R. No. 112546

March 13, 1996
NORTH DAVAO MINING CORPORATION and ASSET PRIVATIZATION TRUST,
petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ANTONIO M.
VILLANUEVA and WILFREDO GUILLEMA, respondents.
FACTS: Petitioner North Davao Mining Corporation (North Davao) was incorporated in 1974 as a
100% privately owned company. Later, the Philippine National Bank (PNB) became part owner
thereof as a result of a conversion into equity of a portion of loans obtained by North Davao from said
bank. On June 30, 1986, PNB transferred all its loans to and equity in North Davao in favor of the
national government which, by virtue of Proclamation No. 50 dated December 8, 1986, later turned
them over to petitioner Asset Privatization Trust (APT). As of December 31, 1990 the national
government hold 81.8% of the common stock and 100% of the preferred stock of said company.
On May 31, 1992, petitioner North Davao completely ceased operations due to serious
business reverses. From 1988 until its closure in 1992, North Davao suffered net losses averaging three
billion pesos (P3,000,000,000.00) per year, for each of the five years prior to its closure. All told, as of
December 31, 1991, or five months prior to its closure, its total liabilities had exceeded its assets by
20,392 billion pesos, Employees were separated and given the equivalent of 12.5 days' pay for every
year of service, computed on their basic monthly pay, However, it appears that, during the life of the
petitioner corporation, from the beginning of its operations in 1981 until its closure in 1992, it had
been giving separation pay equivalent to thirty (30) days' pay for every year of service. Moreover,
inasmuch as the region where North Davao operated was plagued by insurgency and other peace and
order problems, the employees had to collect their salaries at a bank in Tagum, Davao del Norte, some
58 kilometers from their workplace and about 2 1/2 hours' travel time by public transportation; this
arrangement lasted from 1981 up to 1990.
Subsequently, a complaint was filed with respondent Labor Arbiter by respondent Wilfredo
Guillema and 271 other separated employees for: (1) additional separation pay of 17.5 days for every
year of service; (2) back wages equivalent to two days a month; (3) transportation allowance; (4)
hazard pay; (5) housing allowance; (6) food allowance; (7) postemployment medical clearance; and (8)
future medical allowance, all of which amounted to P58,022,878.31 as computed by private
respondent.
Respondent Labor Arbiter rendered a decision ordering petitioner North Davao to pay the
complainants the following:
(a) Additional separation pay of 17.5 days for every year of service;
(b) Backwages equivalent to two (2) days a month times the number of years of service but not to
exceed three (3) years; (c) Transportation allowance at P80 a month times the number of years of
service but not to exceed three (3) years. On appeal, respondent NLRC affirmed the decision in toto.
ISSUE: Is a company which is forced by huge business losses to close its business, legally required to
pay separation benefits to its employees at the time of its closure in an amount equivalent to the
separation pay paid to those who were separated when the company was still a going concern?
1. Whether or not an employer whose business operations ceased due to serious business losses or
financial reverses is obliged to pay separation pay to its employees separated by reason of such
closure.
2. Whether or not time spent in collecting wages in a place other than the place of employment is
compensable notwithstanding that the same is done during official time.
3. Whether or not private respondents are entitled to transportation expenses in the absence of evidence
that these expenses were incurred.
RULING: No, employer whose business operations ceased due to serious business losses or financial
reverses is not obliged to pay separation pay to its employees separated by reason of such closure.
Article 283 governs the grant of separation benefits "in case of closures or cessation of operation" of
business establishments "NOT due to serious business losses or financial reverses . . . Where,
however, the closure was due to business losses as in the instant case, in which the aggregate losses

amounted to over P20 billion the Labor Code does not impose any obligation upon the employer to
pay separation benefits, for obvious reasons..
From the evidence on record, the Court find that the hours spent by complainants in collecting salaries
shall be considered compensable hours worked. Considering further the distance between which is 2
1/2 hours by travel and the risks in commuting all the time in collecting complainants salaries, would
justify the granting of backwages equivalent to two (2) days in a month
as prayed for. Corollary to the above findings, and for equitable reasons, we likewise hold respondents
liable for the transportation expenses incurred by complainants at P40.00 round trip fare during pay
days.
WHEREFORE, judgment is hereby rendered MODIFYING the assailed Resolution by SETTING
ASIDE and deleting the award for "additional separation pay of 17.5 days for every year of service",
and AFFIRMING it in all other aspects.

Five J Taxi vs NLRC

FACTS:
Private Respondent Maldigan and Sabsalon was hired by the Petitioner Company as taxi drivers. The
contract was composed of a 24-hour shifting schedule on 4 days. They had to make a boundary from
450 (non-aircon) and 700 (aircon), adding to that are car washing expense and deposit for any
deficiency in the boundary.
Petitioner learned Maldigan has been working for another taxi company, while Sabsalon was held up
by armed passengers.
Sabsalon went back to work but failed to report on several occasions, even leaving his taxi, and
failing to remit his boundary mark.
Respondents requested for the reimbursements of their respective deposits, but petitioner refused
because of the repairs incurred by their vehicles.
Respondent now files complaint for illegal dismissal and deduction
ISSUE: WON deductions were illegal?
HELD:
Yes, the deposits made were illegal.
Article 114 of the Labor Code provides as follows:
Deposits for loss or damage. No employer shall require his worker to make deposits from which
deductions shall be made for the reimbursement of loss of or damage to tools, materials, or equipment
supplied by the employer, except when the employer is engaged in such trades, occupations or business
where the practice of making deposits is a recognized one, or is necessary or desirable as determined
by the Secretary of Labor in appropriate rules and regulations.
(2000) G.R. 119268
Jardin vs NLRC
FACTS:
Petitioners were drivers of private respondent, Philjama International Inc., a domestic corporation
engaged in the operation of "Goodman Taxi." Petitioners used to drive private respondents taxicabs
every other day on a24-hour work schedule under the boundary system. Under this arrangement, the
petitioners earned an average of P400.00 daily.
Nevertheless, private respondent admittedly regularly deducts from petitioners daily earnings the
amount of P30.00 supposedly for the washing of the taxi units. Believing that the deduction is illegal,
petitioners decided to form a labor union to protect their rights and interests.
Upon learning about the plan of petitioners, private respondent refused to let petitioners drive their taxi
cabs when they reported for work on August 6, 1991, and on succeeding days. Petitioners suspected
that they were singled out because they were the leaders and active members of the proposed union.
Aggrieved, petitioners filed with the labor arbiter a complaint against private respondent for unfair
labor practice, illegal dismissal and illegal deduction of washing fees. In a dated August 31, 1992, the
labor arbiter dismissed said complaint for lack of merit.
ISSUE: WON the deduction for the washing of taxi units is illegal.
HELD: The deduction made for the car wash is not illegal.
In Five J Taxi vs. NLRC, the court views that it is not illegal in the context of the law. We note that
after a tour of duty, it is incumbent upon the driver to restore the unit he has driven to the same clean
condition when he took it out. Car washing after a tour of duty is indeed a practice in the taxi industry
and is in fact dictated by fair play. Hence, the drivers are not entitled to reimbursement of washing
charges.