REPUBLIC ACT NO.
8042 On June 16, 1986, the Regional Director directed two of his Labor Standard
Migrant Workers and Overseas Filipinos Act of 1995
An act to institute the policies of overseas employment and establish a higher
standard of protection and promotion of the welfare of migrant workers, their
families and overseas Filipinos in distress, and for other purposes.
G.R. No. 78909 June 30, 1989
MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L.
DORADO, President, petitioner,
vs.
THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL
DlRECTOR OF LABOR, REGION X, respondents.
MEDIALDEA, J.:
This is a petition for certiorari seeking the annulment of the Decision of the
respondent Secretary of Labor dated September 24, 1986, affirming with
modification the Order of respondent Regional Director of Labor, Region X,
dated August 4, 1986, awarding salary differentials and emergency cost of
living allowances (ECOLAS) to employees of petitioner, and the Order
denying petitioner's motion for reconsideration dated May 13, 1987, on the
ground of grave abuse of discretion.
Petitioner is a semi-government hospital, managed by the Board of Directors
of the Cagayan de Oro Women's Club and Puericulture Center, headed by
Mrs. Antera Dorado, as holdover President. The hospital derives its finances
from the club itself as well as from paying patients, averaging 130 per month.
It is also partly subsidized by the Philippine Charity Sweepstakes Office and
the Cagayan De Oro City government.
Petitioner has forty-one (41) employees. Aside from salary and living
allowances, the employees are given food, but the amount spent therefor is
deducted from their respective salaries (pp. 77-78, Rollo).
On May 23, 1986, ten (10) employees of the petitioner employed in different
capacities/positions filed a complaint with the Office of the Regional Director
of Labor and Employment, Region X, for underpayment of their salaries and
ECOLAS, which was docketed as ROX Case No. CW-71-86.
and Welfare Officers to inspect the records of the petitioner to ascertain the
truth of the allegations in the complaints (p. 98, Rollo). Payrolls covering the
periods of May, 1974, January, 1985, November, 1985 and May, 1986, were
duly submitted for inspection.
On July 17, 1986, the Labor Standard and Welfare Officers submitted their
report confirming that there was underpayment of wages and ECOLAs of all
the employees by the petitioner, the dispositive portion of which reads:
IN VIEW OF THE FOREGOING, deficiency on wage and
ecola as verified and confirmed per review of the respondent
payrolls and interviews with the complainant workers and all
other information gathered by the team, it is respectfully
recommended to the Honorable Regional Director, this office,
that Antera Dorado, President be ORDERED to pay the
amount of SIX HUNDRED FIFTY FOUR THOUSAND
SEVEN HUNDRED FIFTY SIX & 01/100 (P654,756.01),
representing underpayment of wages and ecola to the
THIRTY SIX (36) employees of the said hospital as
appearing in the attached Annex "F" worksheets and/or
whatever action equitable under the premises. (p. 99, Rollo)
Based on this inspection report and recommendation, the Regional Director
issued an Order dated August 4, 1986, directing the payment of P723,888.58,
representing underpayment of wages and ECOLAs to all the petitioner's
employees, the dispositive portion of which reads:
WHEREFORE, premises considered, respondent Maternity
and Children Hospital is hereby ordered to pay the above-
listed complainants the total amount indicated opposite each
name, thru this Office within ten (10) days from receipt
thereof. Thenceforth, the respondent hospital is also ordered
to pay its employees/workers the prevailing statutory
minimum wage and allowance.
SO ORDERED. (p. 34, Rollo)
Petitioner appealed from this Order to the Minister of Labor and Employment,
Hon. Augusto S. Sanchez, who rendered a Decision on September 24, 1986,
modifying the said Order in that deficiency wages and ECOLAs should be
computed only from May 23, 1983 to May 23, 1986, the dispositive portion of
which reads:
 WHEREFORE, the August 29, 1986 order is hereby
MODIFIED in that the deficiency wages and ECOLAs should
only be computed from May 23, 1983 to May 23, 1986. The
case is remanded to the Regional Director, Region X, for
recomputation specifying the amounts due each the
complainants under each of the applicable Presidential
Decrees. (p. 40, Rollo)
On October 24, 1986, the petitioner filed a motion for reconsideration which
was denied by the Secretary of Labor in his Order dated May 13, 1987, for
lack of merit (p. 43 Rollo).
The instant petition questions the all-embracing applicability of the award
involving salary differentials and ECOLAS, in that it covers not only the
hospital employees who signed the complaints, but also those (a) who are not
signatories to the complaint, and (b) those who were no longer in the service
of the hospital at the time the complaints were filed.
Petitioner likewise maintains that the Order of the respondent Regional
Director of Labor, as affirmed with modifications by respondent Secretary of
Labor, does not clearly and distinctly state the facts and the law on which the
award was based. In its "Rejoinder to Comment", petitioner further questions
the authority of the Regional Director to award salary differentials and
ECOLAs to private respondents, (relying on the case of Encarnacion vs.
Baltazar, G.R. No. L-16883, March 27, 1961, 1 SCRA 860, as authority for
raising the additional issue of lack of jurisdiction at any stage of the
proceedings, p. 52, Rollo), alleging that the original and exclusive jurisdiction
over money claims is properly lodged in the Labor Arbiter, based on Article
217, paragraph 3 of the Labor Code.
The primary issue here is whether or not the Regional Director had jurisdiction
over the case and if so, the extent of coverage of any award that should be
forthcoming, arising from his visitorial and enforcement powers under Article
128 of the Labor Code. The matter of whether or not the decision states clearly
and distinctly statement of facts as well as the law upon which it is based,
becomes relevant after the issue on jurisdiction has been resolved.
This is a labor standards case, and is governed by Art. 128-b of the Labor
Code, as amended by E.O. No. 111. Labor standards refer to the minimum
requirements prescribed by existing laws, rules, and regulations relating to
wages, hours of work, cost of living allowance and other monetary and welfare
benefits, including occupational, safety, and health standards (Section 7, Rule
I, Rules on the Disposition of Labor Standards Cases in the Regional Office,
dated September 16, 1987). 1 Under the present rules, a Regional Director
exercises both visitorial and enforcement power over labor standards cases,
and is therefore empowered to adjudicate money claims, provided there
still exists an employer-employee relationship, and the findings of the regional
office is not contested by the employer concerned.
Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional
Director's authority over money claims was unclear. The complaint in the
present case was filed on May 23, 1986 when E.O. No. 111 was not yet in
effect, and the prevailing view was that stated in the case of Antonio Ong, Sr.
vs. Henry M. Parel, et al., G.R. No. 76710, dated December 21, 1987, thus:
. . . the Regional Director, in the exercise of his visitorial and
enforcement powers under Article 128 of the Labor Code,
has no authority to award money claims, properly falling
within the jurisdiction of the labor arbiter. . . .
. . . If the inspection results in a finding that the employer has
violated certain labor standard laws, then the regional
director must order the necessary rectifications. However,
this does not include adjudication of money claims, clearly
within the ambit of the labor arbiter's authority under Article
217 of the Code.
The Ong case relied on the ruling laid down in Zambales Base Metals Inc. vs.
The Minister of Labor, et al., (G.R. Nos. 73184-88, November 26, 1986, 146
SCRA 50) that the "Regional Director was not empowered to share in the
original and exclusive jurisdiction conferred on Labor Arbiters by Article 217."
We believe, however, that even in the absence of E. O. No. 111, Regional
Directors already had enforcement powers over money claims, effective
under P.D. No. 850, issued on December 16, 1975, which transferred labor
standards cases from the arbitration system to the enforcement system.
To clarify matters, it is necessary to enumerate a series of rules and provisions
of law on the disposition of labor standards cases.
Prior to the promulgation of PD 850, labor standards cases were an exclusive
function of labor arbiters, under Article 216 of the then Labor Code (PD No.
442, as amended by PD 570-a), which read in part:
Art. 216. Jurisdiction of the Commission. The Commission
shall have exclusive appellate jurisdiction over all cases
decided by the Labor Arbiters and compulsory arbitrators.
 The Labor Arbiters shall have exclusive jurisdiction to hear
and decide the following cases involving all workers whether
agricultural or non-agricultural.
xxx xxx xxx
(c) All money claims of workers, involving
non-payment or underpayment of wages,
overtime compensation, separation pay,
maternity leave and other money claims
arising from employee-employer relations,
except claims for workmen's compensation,
social security and medicare benefits;
(d) Violations of labor standard laws;
xxx xxx xxx
(Emphasis supplied)
The Regional Director exercised visitorial rights only under then Article 127 of
the Code as follows:
ART. 127. Visitorial Powers. The Secretary of Labor or his
duly authorized representatives, including, but not restricted,
to the labor inspectorate, shall have access to employers'
records and premises at any time of the day or night
whenever work is being undertaken therein, and the right to
copy therefrom, to question any employee and investigate
any fact, condition or matter which may be necessary to
determine violations or in aid in the enforcement of this Title
and of any Wage Order or regulation issued pursuant to this
Code.
With the promulgation of PD 850, Regional Directors were given enforcement
powers, in addition to visitorial powers. Article 127, as amended, provided in
part:
SEC. 10. Article 127 of the Code is hereby amended to read
as follows:
Art. 127. Visitorial and enforcement powers.
xxx xxx xxx
(b) The Secretary of Labor or his duly authorized repre entatives shall have
the power to order and administer, after due notice and hearing, compliance
with the labor standards provisions of this Code based on the findings of labor
regulation officers or industrial safety engineers made in the course of
inspection, and to issue writs of execution to the appropriate authority for the
enforcement of their order.
xxx xxx xxx
Labor Arbiters, on the other hand, lost jurisdiction over labor standards cases.
Article 216, as then amended by PD 850, provided in part:
SEC. 22. Article 216 of the Code is hereby amended to read as follows:
Art. 216. Jurisdiction of Labor Arbiters and the Commission. (a) The Labor
Arbiters shall have exclusive jurisdiction to hear and decide the following
cases involving all workers, whether agricultural or non-agricultural:
xxx xxx xxx
(3) All money claims of workers involving non-payment or underpayment of
wages, overtime or premium comensation, maternity or service incentive
leave, separation pay and other money claims arising from employer-
employee relations, except claims for employee's compensation, social
security and medicare benefits and as otherwise provided in Article 127 of this
Code.
xxx xxx xxx
(Emphasis supplied)
Under the then Labor Code therefore (PD 442 as amended by PD 570-a, as
further amended by PD 850), there were three adjudicatory units: The
Regional Director, the Bureau of Labor Relations and the Labor Arbiter. It
became necessary to clarify and consolidate all governing provisions on
jurisdiction into one document. 2 On April 23, 1976, MOLE Policy Instructions
No. 6 was issued, and provides in part (on labor standards cases) as follows:
POLICY INSTRUCTIONS NO. 6
TO: All Concerned
SUBJECT: DISTRIBUTION OF JURISDICTION OVER LABOR CASES
xxx xxx xxx
1. The following cases are under the exclusive original jurisdiction of the
Regional Director.
a) Labor standards cases arising from violations of labor stanard
laws discovered in the course of inspection or compaints where employer-
employee relations still exist;
xxx xxx xxx
2. The following cases are under the exclusive original jurisdiction of
the Conciliation Section of the Regional Office:
a) Labor standards cases where employer-employee relatins no longer exist;
xxx xxx xxx
6. The following cases are certifiable to the Labor Arbiters:
a) Cases not settled by the Conciliation Section of the Regional Office,
namely:
1) labor standard cases where employer-employee relations no longer exist;
xxx xxx xxx
(Emphasis supplied)
MOLE Policy Instructions No. 7 (undated) was likewise subsequently issued,
enunciating the rationale for, and the scope of, the enforcement power of the
Regional Director, the first and second paragraphs of which provide as
follows:
POLICY INSTRUCTIONS NO. 7
TO: All Regional Directors
SUBJECT: LABOR STANDARDS CASES
Under PD 850, labor standards cases have been taken from
the arbitration system and placed under the enforcement
system, except where a) questions of law are involved as
determined by the Regional Director, b) the amount involved
exceeds P100,000.00 or over 40% of the equity of the
employer, whichever is lower, c) the case requires
evidentiary matters not disclosed or verified in the normal
course of inspection, or d) there is no more employer-
employee relationship.
The purpose is clear: to assure the worker the rights and
benefits due to him under labor standards laws without
having to go through arbitration. The worker need not litigate
to get what legally belongs to him. The whole enforcement
machinery of the Department of Labor exists to insure its
expeditious delivery to him free of charge. (Emphasis
supplied)
Under the foregoing, a complaining employee who was denied his rights and
benefits due him under labor standards law need not litigate. The Regional
Director, by virtue of his enforcement power, assured "expeditious delivery to
him of his rights and benefits free of charge", provided of course, he was still
in the employ of the firm.
After PD 850, Article 216 underwent a series of amendments (aside from
being re-numbered as Article 217) and with it a corresponding change in the
jurisdiction of, and supervision over, the Labor Arbiters:
1. PD 1367 (5-1-78) gave Labor Arbiters exclusive jurisdiction
over unresolved issues in collective bargaining, etc., and those cases arising
from employer-employee relations duly indorsed by the Regional Directors. (It
also removed his jurisdiction over moral or other damages) In other words,
the Labor Arbiter entertained cases certified to him. (Article 228, 1978 Labor
Code.)
2. PD 1391 (5-29-78) all regional units of the National Labor Relations
Commission (NLRC) were integrated into the Regional Offices Proper of the
Ministry of Labor; effectively transferring direct administrative control and
supervision over the Arbitration Branch to the Director of the Regional Office
of the Ministry of Labor. "Conciliable cases" which were thus previously under
the jurisdiction of the defunct Conciliation Section of the Regional Office for
purposes of conciliation or amicable settlement, became immediately
assignable to the Arbitration Branch for joint conciliation and compulsory
arbitration. In addition, the Labor Arbiter had jurisdiction even over termination
and labor-standards cases that may be assigned to them for compulsory
arbitration by the Director of the Regional Office. PD 1391 merged conciliation
and compulsory arbitration functions in the person of the Labor Arbiter. The
procedure governing the disposition of cases at the Arbitration Branch
paralleled those in the Special Task Force and Field Services Division, with
one major exception: the Labor Arbiter exercised full and untrammelled
authority in the disposition of the case, particularly in the substantive aspect,
his decisions and orders subject to review only on appeal to the NLRC. 3
3. MOLE Policy Instructions No. 37 Because of the seemingly overlapping
functions as a result of PD 1391, MOLE Policy Instructions No. 37 was issued
on October 7, 1978, and provided in part:
POLICY INSTRUCTIONS NO. 37
TO: All Concerned
SUBJECT: ASSIGNMENT OF CASES TO LABOR ARBITERS
Pursuant to the provisions of Presidential Decree No. 1391 and to insure
speedy disposition of labor cases, the following guidelines are hereby
established for the information and guidance of all concerned.
1. Conciliable Cases.
Cases which are conciliable per se i.e., (a) labor standards cases where
employer-employee relationship no longer exists; (b) cases involving
deadlock in collective bargaining, except those falling under P.D. 823, as
amended; (c) unfair labor practice cases; and (d) overseas employment
cases, except those involving overseas seamen, shall be assigned by the
Regional Director to the Labor Arbiter for conciliation and arbitration without
coursing them through the conciliation section of the Regional Office.
2. Labor Standards Cases.
Cases involving violation of labor standards laws where employer- employee
relationship still exists shall be assigned to the Labor Arbiters where:
a) intricate questions of law are involved; or
b) evidentiary matters not disclosed or verified in thenormal course of
inspection by labor regulations offices are required for their proper disposition.
3. Disposition of Cases.
When a case is assigned to a Labor Arbiter, all issuesraised therein shall be
resolved by him including those which are originally cognizable by the
Regional Director to avoid multiplicity of proceedings. In other words, the
whole case,and not merely issues involved therein, shall be assigned to and
resolved by him.
xxx xxx xxx
(Emphasis supplied)
4. PD 1691(5-1-80) original and exclusive
jurisdictionover unresolved issues in collective bargaining and moneyclaims,
which includes moral or other damages.
Despite the original and exclusive jurisdiction of labor arbiters
over money claims, however, the Regional Director
nonetheless retained his enforcement power, and remained
empowered to adjudicate uncontested money claims.
5. BP 130 (8-21-8l) strengthened voluntary arbitration. The decree also
returned the Labor Arbiters as part of the NLRC, operating as Arbitration
Branch thereof.
6. BP 227(6-1- 82) original and exclusive jurisdiction over questions
involving legality of strikes and lock-outs.
The present petition questions the authority of the Regional Director to issue
the Order, dated August 4, 1986, on the basis of his visitorial and enforcement
powers under Article 128 (formerly Article 127) of the present Labor Code. It
is contended that based on the rulings in the Ong vs. Parel (supra) and
the Zambales Base Metals, Inc. vs. TheMinister of Labor (supra) cases, a
Regional Director is precluded from adjudicating money claims on the ground
that this is an exclusive function of the Labor Arbiter under Article 217 of the
present Code.
On August 4, 1986, when the order was issued, Article 128(b) 4 read as
follows:
(b) The Minister of Labor or his duly authorized representatives shall have the
power to order and administer, after due notice and hearing, compliance with
the labor standards provisions of this Code based on the findings of labor
regulation officers or industrial safety engineers made in the course of
inspection, and to issue writs of execution to the appropriate authority for the
enforcement of their order, except in cases where the employer contests the
findings of the labor regulations officer and raises issues which cannot be
resolved without considering evidentiary matters that are not verifiable in the
normal course of inspection. (Emphasis supplied)
On the other hand, Article 217 of the Labor Code as amended by P.D. 1691,
effective May 1, 1980; Batas Pambansa Blg. 130, effective August 21, 1981;
and Batas Pambansa Blg. 227, effective June 1, 1982, inter alia, provides:
ART. 217. Jurisdiction of Labor Arbiters and the Commission.
(a) The Labor Arbiters shall have the original and
exclusive jurisdiction to hear and decide within thirty (30)
working days after submission of the case by the parties for
decision, the following cases involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and other terms
and conditions of employment;
3. All money claims of workers, including those based on non-payment or
underpayment of wages, overtime compensation, separation pay and other
benefits provided by law or appropriate agreement, except claims for
employees' compensation, social security, medicare and maternity benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code, including
questions involving the legality of strikes and lock-outs. (Emphasis supplied)
The Ong and Zambales cases involved workers who were still connected with
the company. However, in the Ong case, the employer disputed the adequacy
of the evidentiary foundation (employees' affidavits) of the findings of the labor
standards inspectors while in the Zambales case, the money claims which
arose from alleged violations of labor standards provisions were not
discovered in the course of normal inspection. Thus, the provisions of MOLE
Policy Instructions Nos. 6, (Distribution of Jurisdiction Over Labor Cases) and
37 (Assignment of Cases to Labor Arbiters) giving Regional Directors
adjudicatory powers over uncontested money claims discovered in the course
of normal inspection, provided an employer-employee relationship still exists,
are inapplicable.
In the present case, petitioner admitted the charge of underpayment of wages
to workers still in its employ; in fact, it pleaded for time to raise funds to satisfy
its obligation. There was thus no contest against the findings of the labor
inspectors.
Barely less than a month after the promulgation on November 26, 1986 of the
Zambales Base Metals case, Executive Order No. 111 was issued on
December 24, 1986, 5 amending Article 128(b) of the Labor Code, to read as
follows:
(b) THE PROVISIONS OF ARTICLE 217 OF THIS CODE TO THE
CONTRARY NOTWITHSTANDING AND IN CASES WHERE THE
RELATIONSHIP OF EMPLOYER-EMPLOYEE STILL EXISTS, the Minister of
Labor and Employment or his duly authorized representatives shall have the
power to order and administer, after due notice and hearing, compliance with
the labor standards provisions of this Code AND OTHER LABOR
LEGISLATION based on the findings of labor regulation officers or industrial
safety engineers made in the course of inspection, and to issue writs of
execution to the appropriate authority for the enforcement of their orders,
except in cases where the employer contests the findings of the labor
regulation officer and raises issues which cannot be resolved without
considering evidentiary matters that are not verifiable in the normal course of
inspection. (Emphasis supplied)
As seen from the foregoing, EO 111 authorizes a Regional Director to order
compliance by an employer with labor standards provisions of the Labor Code
and other legislation. It is Our considered opinion however, that the inclusion
of the phrase, " The provisions of Article 217 of this Code to the contrary
notwithstanding and in cases where the relationship of employer-employee
still exists" ... in Article 128(b), as amended, above-cited,
merely confirms/reiterates the enforcement adjudication authority of the
Regional Director over uncontested money claims in cases where an
employer-employee relationship still exists. 6
Viewed in the light of PD 850 and read in coordination with MOLE Policy
Instructions Nos. 6, 7 and 37, it is clear that it has always been the intention
of our labor authorities to provide our workers immediate access (when still
feasible, as where an employer-employee relationship still exists) to their
rights and benefits, without being inconvenienced by arbitration/litigation
processes that prove to be not only nerve-wracking, but financially
burdensome in the long run.
Note further the second paragraph of Policy Instructions No. 7 indicating that
the transfer of labor standards cases from the arbitration system to the
enforcement system is
. . to assure the workers the rights and benefits due to him
under labor standard laws, without having to go through
arbitration. . .
so that
. . the workers would not litigate to get what legally belongs
to him. .. ensuring delivery . . free of charge.
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. Labor laws are meant to promote, not defeat, social justice.
This view is in consonance with the present "Rules on the Disposition of Labor
Standard Cases in the Regional Offices " 7 issued by the Secretary of Labor,
Franklin M. Drilon on September 16, 1987.
Thus, Sections 2 and 3 of Rule II on "Money Claims Arising from Complaint
Routine Inspection", provide as follows:
Section 2. Complaint inspection. All such complaints shall
immediately be forwarded to the Regional Director who shall
refer the case to the appropriate unit in the Regional Office
for assignment to a Labor Standards and Welfare Officer
(LSWO) for field inspection. When the field inspection does
not produce the desired results, the Regional Director shall
summon the parties for summary investigation to expedite
the disposition of the case. . . .
Section 3. Complaints where no employer-employee
relationship actually exists. Where employer-employee
relationship no longer exists by reason of the fact that it has
already been severed, claims for payment of monetary
benefits fall within the exclusive and original jurisdiction of the
labor arbiters. . . . (Emphasis supplied)
Likewise, it is also clear that the limitation embodied in MOLE Policy
Instructions No. 7 to amounts not exceeding P100,000.00 has been
dispensed with, in view of the following provisions of pars. (b) and (c), Section
7 on "Restitution", the same Rules, thus:
xxx xxx xxx
(b) Plant-level restitutions may be effected for money claims not exceeding
FiftyThousand (P50,000.00). . . .
(c) Restitutions in excess of the aforementioned amount shall be effected at
the Regional Office or at the worksite subject to the prior approval of the
Regional Director.
which indicate the intention to empower the Regional Director to award money
claims in excess of P100,000.00; provided of course the employer does not
contest the findings made, based on the provisions of Section 8 thereof:
Section 8. Compromise agreement. Should the parties arrive at an
agreement as to the whole or part of the dispute, said agreement shall be
reduced in writing and signed by the parties in the presence of the Regional
Director or his duly authorized representative.
E.O. No. 111 was issued on December 24, 1986 or three (3) months after the
promulgation of the Secretary of Labor's decision upholding private
respondents' salary differentials and ECOLAs on September 24, 1986. The
amendment of the visitorial and enforcement powers of the Regional Director
(Article 128-b) by said E.O. 111 reflects the intention enunciated in Policy
Instructions Nos. 6 and 37 to empower the Regional Directors to
resolve uncontested money claims in cases where an employer-employee
relationship still exists. This intention must be given weight and entitled to
great respect. As held in Progressive Workers' Union, et. al. vs. F.P. Aguas,
et. al. G.R. No. 59711-12, May 29, 1985, 150 SCRA 429:
. . The interpretation by officers of laws which are entrusted to their
administration is entitled to great respect. We see no reason to detract from
this rudimentary rule in administrative law, particularly when later events have
proved said interpretation to be in accord with the legislative intent. ..
The proceedings before the Regional Director must, perforce, be upheld on
the basis of Article 128(b) as amended by E.O. No. 111, dated December 24,
1986, this executive order "to be considered in the nature of a curative statute
with retrospective application." (Progressive Workers' Union, et al. vs. Hon.
F.P. Aguas, et al. (Supra); M. Garcia vs. Judge A. Martinez, et al., G.R. No.
L- 47629, May 28, 1979, 90 SCRA 331).
We now come to the question of whether or not the Regional Director erred However, there is no legal justification for the award in favor of those
in extending the award to all hospital employees. We answer in the affirmative. employees who were no longer connected with the hospital at the time the
complaint was filed, having resigned therefrom in 1984, viz:
The Regional Director correctly applied the award with respect to those
employees who signed the complaint, as well as those who did not sign the 1. Jean (Joan) Venzon (See Order, p. 33, Rollo)
complaint, but were still connected with the hospital at the time the complaint 2. Rosario Paclijan
was filed (See Order, p. 33 dated August 4, 1986 of the Regional Director, 3. Adela Peralta
Pedrito de Susi, p. 33, Rollo). 4. Mauricio Nagales
5. Consesa Bautista
The justification for the award to this group of employees who were not 6. Teresita Agcopra
signatories to the complaint is that the visitorial and enforcement powers given 7. Felix Monleon
to the Secretary of Labor is relevant to, and exercisable over establishments, 8. Teresita Salvador
not over the individual members/employees, because what is sought to be 9. Edgar Cataluna; and
achieved by its exercise is the observance of, and/or compliance by, such
firm/establishment with the labor standards regulations. Necessarily, in case 10. Raymond Manija ( p.7, Rollo)
of an award resulting from a violation of labor legislation by such
establishment, the entire members/employees should benefit therefrom. As The enforcement power of the Regional Director cannot legally be upheld in
aptly stated by then Minister of Labor Augusto S. Sanchez: cases of separated employees. Article 129 of the Labor Code, cited by
petitioner (p. 54, Rollo) is not applicable as said article is in aid of the
. . It would be highly derogatory to the rights of the workers, enforcement power of the Regional Director; hence, not applicable where the
if after categorically finding the respondent hospital guilty of employee seeking to be paid underpayment of wages is already separated
underpayment of wages and ECOLAs, we limit the award to from the service. His claim is purely a money claim that has to be the subject
only those who signed the complaint to the exclusion of the of arbitration proceedings and therefore within the original and exclusive
majority of the workers who are similarly situated. Indeed, this jurisdiction of the Labor Arbiter.
would be not only render the enforcement power of the
Minister of Labor and Employment nugatory, but would be the Petitioner has likewise questioned the order dated August 4, 1986 of the
pinnacle of injustice considering that it would not only Regional Director in that it does not clearly and distinctly state the facts and
discriminate but also deprive them of legislated benefits. the law on which the award is based.

. . . (pp. 38-39, Rollo). We invite attention to the Minister of Labor's ruling thereon, as follows:

This view is further bolstered by the provisions of Sec. 6, Rule II of the "Rules Finally, the respondent hospital assails the order under
on the Disposition of Labor Standards cases in the Regional Offices" (supra) appeal as null and void because it does not clearly and
presently enforced, viz: distinctly state the facts and the law on which the awards
were based. Contrary to the pretensions of the respondent
SECTION 6. Coverage of complaint inspection. A hospital, we have carefully reviewed the order on appeal and
complaint inspection shall not be limited to the specific we found that the same contains a brief statement of the (a)
allegations or violations raised by the complainants/workers facts of the case; (b) issues involved; (c) applicable laws; (d)
but shall be a thorough inquiry into and verification of the conclusions and the reasons therefor; (e) specific remedy
compliance by employer with existing labor standards and granted (amount awarded). (p. 40, Rollo)
shall cover all workers similarly situated. (Emphasis supplied)
ACCORDINGLY, this petition should be dismissed, as it is hereby
DISMISSED, as regards all persons still employed in the Hospital at the time
of the filing of the complaint, but GRANTED as regards those employees no
longer employed at that time.
SO ORDERED.
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco,
Padilla, Bidin, Cortes, Grio-Aquino and Regalado, JJ., concur.
Maternity Childrens Hospital vs. Secretary of Labor G.R. No. 78909 June 30
1984
Facts: Petitioner is a semi-government hospital, managed by the Board of
Directors of the Cagayan de Oro Women's Club and Puericulture Center,
headed by Mrs. Antera Dorado, as holdover President. The hospital derives
its finances from the club itself as well as from paying patients, averaging 130
per month. It is also partly subsidized by the Philippine Charity Sweepstakes
Office and the Cagayan De Oro City government. Petitioner has forty-one (41)
employees. Aside from salary and living allowances, the employees are given
food, but the amount spent therefor, is deducted from their respective salaries
(pp. 77-78, Rollo). On May 23, 1986, ten (10) employees of the petitioner
employed in different capacities/positions filed a complaint with the Office of
the Regional Director of Labor and Employment, Region X, for underpayment
of their salaries and ECOLAS, which was docketed as ROX Case No. CW-
71-86. The Regional Director issued and order based on the reports of the
Labor Standard and Welfare Officers, directing payment of P723, 888.58
representing underpayment of wages and ECOLAs to all the petitioners
employees. Petitioner appealed to the Minister of Labor and Employment
which modified the decision as to the period for the payment ECOLAs only. A
motion for reconsideration was filed by petitioner and was denied by the
Secretary of Labor.
Issue: Whether or not that the salaries of the petitioner including the ECOLAS
included on the labor standards prescribed by law.
Held: Labor standards refer to the minimum requirements prescribed by
existing laws, rules, and regulations relating to wages, hours of work, cost of
living allowance and other monetary and welfare benefits, including
occupational, safety, and health standards (Section 7, Rule I, Rules on the
Disposition of Labor Standards Cases in the Regional Office, dated
September 16, 1987). CALALANG v. WILLIAMS 70 PHIL 726, GR No. 47800
December 2, 1940 FACTS: The National Traffic Commission resolved that
animal-drawn vehicles be prohibited from passing along some major streets
such a Rizal Ave. in Manila for a period of one year from the date of the
opening of the Colgante Bridge to traffic. The Secretary of Public Works
approved the resolution on August 10,1940. The Mayor of Manila and the
Acting Chief of Police of Manila have enforced the rules and regulation. As a
consequence, all animal-drawn vehicles are not allowed to pass and pick up
passengers in the places above mentioned to the detriment not only of their
owners but of the riding public as well. ISSUE: Does the rule infringe upon
the constitutional precept regarding the promotion of social justice? What is
Social Justice? HELD: No. The regulation aims to promote safe transit and
avoid obstructions on national roads in the interest and convenience of the
public. Persons and property may be subject to all kinds of restraints and
burdens in order to secure the general comfort, health, and prosperity of the
State. To this fundamental aims of the government, the rights of the individual
are subordinated. Social justice is neither communism, nor despotism, nor
atomism, nor anarchy, but the humanization of laws and the equalization of
social and economic forces by the State so that justice in its rational and
objectively secular conception may at least be approximated. Social justice
means the promotion of the welfare of all the people, the adoption by the
Government of measures calculated to insure economic stability of all the
competent elements of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of the members of the
community, constitutionally, through the adoption of measures legally
justifiable, or extra-constitutionally, through the exercise of powers underlying
the existence of all governments on the time-honored principles of Salus
Populi est Suprema Lex.(Justice Laurel) People vs. Vera Reyes G..R. No. L-
45748 April 5, 1939 Imperial, J. Facts: Defendant was charged in the Court of
First Instance of Manila by the assistant city fiscal with a violation of Act No.
2549, as amended by Acts Nos. 3085 and 3958. The information alleged that
from September 9 to October 28, 1936, the accused, in his capacity as
president and general manager of the Consolidated Mines, having engaged
the services of Severa Velasco de Vera as stenographer, at an agreed salary
of P35 a month willfully and illegally refused to pay the salary of said
stenographer corresponding to the above-mentioned period of time, which
was long due and payable, in spite of her repeated demands. After the
hearing, the court sustained the demurrer, declaring unconstitutional the last
part of section 1 of Act No. 2549 as last amended by Act No. 3958, which
considers as an offense the facts alleged in the information, for the reason
that it violates the constitutional prohibition against imprisonment for debt, and
dismissed the case, with costs de oficio. The fiscal appealed from said order.
In the appeal, the Solicitor-General contends that the court erred in declaring
Act No. 3958 unconstitutional, and in dismissing the cause. The last part of
section 1 of Act No. 2549, as last amended by section 1 of Act No. 3958
considers as illegal the refusal of an employer to pay, when he can do so, the
salaries of his employees or laborers on the fifteenth or last day of every
month or on Saturday of every week, with only two days extension, and the
nonpayment of the salary within the periods specified is considered as a
violation of the law. The same Act exempts from criminal responsibility the
employer who, having failed to pay the salary, should prove satisfactorily that
it was impossible to make such payment. Issue: Whether the last part of
section 1 of Act No. 2549 as last amended by Act No. 3958 is constitutional
and valid. Held: The court held that this provision is null because it violates
the provision of section 1 (12), Article III, of the Constitution, which provides
that no person shall be imprisoned for debt. We do not believe that this
constitutional provision has been correctly applied in this case. A close
perusal of the last part of section 1 of Act No. 2549, as amended by section 1
of Act No. 3958, will show that its language refers only to the employer who,
being able to make payment, shall abstain or refuse to do so, without
justification and to the prejudice of the laborer or employee. An employer so
circumstanced is not unlike a person who defrauds another, by refusing to pay
his just debt. In both cases the deceit or fraud is the essential element
constituting the offense. The first case is a violation of Act No. 3958, and the
second is estafa punished by the Revised Penal Code. In either case the
offender cannot certainly invoke the constitutional prohibition against
imprisonment for debt. The Court of Appeal held that the last part of section 1
of Act No. 2549, as last amended by section 1 of Act No. 3958, is valid, and
reversed the appealed order with instructions to the lower court to proceed
with the trial of the criminal case until it is terminated, without special
pronouncement as to costs in this instance. People vs Pomar G.R. No. L-
22008 November 3, 1924 Johnson, J. FACTS Julio Pomar, manager and
person-in-charge of a tobacco factory, employed Macaria Fajardo as cigar-
maker. She was granted vacation leave beginning July 16, 1923 by reason of
pregnancy. On October 26, 1923, a case was filed against defendant Pomar
for failing to pay Fajardo her regular wages corresponding to 30 days before
and 30 days after her delivery and confinement, in accordance with Act 3071.
Defendant Pomar contended that his act does not constitute any offense
because Act No. 3071 unconstitutional. ISSUE WON Act 3071 is valid and
constitutional HELD No. Act 3071 is unconstitutional. While it is contended
that the Act is within the police power of the State, it cannot be exercised in
contravention of the constitution. The right to enter into lawful contracts
constitutes one of the liberties of the people of the State. If that right be struck
down or arbitrarily interfered with, there is substantial imprisonment of the
people under the Constitution. The right to enter into lawful contracts is as
essential to the laborer as it is to the capitalist. A citizen cannot be compelled
to give employment to another citizen nor can anyone be employed against
his will. Liberty includes the right to labor but also to refuse to labor and
consequently the right to labor or for labor and to terminate such contracts
and to refuse to make such contracts.
G.R. No. 85279 July 28, 1989
SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA),
DIONISION T. BAYLON, RAMON MODESTO, JUANITO MADURA,
REUBEN ZAMORA, VIRGILIO DE ALDAY, SERGIO ARANETA, PLACIDO
AGUSTIN, VIRGILIO MAGPAYO, petitioner,
vs.
THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON.
CEZAR C. PERALEJO, RTC, BRANCH 98, QUEZON CITY, respondents.
Vicente T. Ocampo & Associates for petitioners.
CORTES, J:
Primarily, the issue raised in this petition is whether or not the Regional Trial
Court can enjoin the Social Security System Employees Association (SSSEA)
from striking and order the striking employees to return to work. Collaterally,
it is whether or not employees of the Social Security System (SSS) have the
right to strike.
The antecedents are as follows:
On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City
a complaint for damages with a prayer for a writ of preliminary injunction
against petitioners, alleging that on June 9, 1987, the officers and members
of SSSEA staged an illegal strike and baricaded the entrances to the SSS
Building, preventing non-striking employees from reporting for work and SSS
members from transacting business with the SSS; that the strike was reported
to the Public Sector Labor - Management Council, which ordered the strikers
to return to work; that the strikers refused to return to work; and that the SSS
suffered damages as a result of the strike. The complaint prayed that a writ of
preliminary injunction be issued to enjoin the strike and that the strikers be
ordered to return to work; that the defendants (petitioners herein) be ordered
to pay damages; and that the strike be declared illegal.
It appears that the SSSEA went on strike after the SSS failed to act on the
union's demands, which included: implementation of the provisions of the old
SSS-SSSEA collective bargaining agreement (CBA) on check-off of union
dues; payment of accrued overtime pay, night differential pay and holiday pay;
conversion of temporary or contractual employees with six (6) months or more
of service into regular and permanent employees and their entitlement to the
same salaries, allowances and benefits given to other regular employees of
the SSS; and payment of the children's allowance of P30.00, and after the
SSS deducted certain amounts from the salaries of the employees and
allegedly committed acts of discrimination and unfair labor practices [Rollo,
pp. 21-241].
The court a quo, on June 11, 1987, issued a temporary restraining order
pending resolution of the application for a writ of preliminary injunction [Rollo,
p. 71.] In the meantime, petitioners filed a motion to dismiss alleging the trial
court's lack of jurisdiction over the subject matter [Rollo, pp. 72-82.] To this
motion, the SSS filed an opposition, reiterating its prayer for the issuance of
a writ of injunction [Rollo, pp. 209-222]. On July 22,1987, in a four-page order,
the court a quo denied the motion to dismiss and converted the restraining
order into an injunction upon posting of a bond, after finding that the strike
was illegal [Rollo, pp. 83- 86]. As petitioners' motion for the reconsideration of
the aforesaid order was also denied on August 14, 1988 [Rollo, p. 94],
petitioners filed a petition for certiorari and prohibition with preliminary
injunction before this Court. Their petition was docketed as G.R. No. 79577.
In a resolution dated October 21, 1987, the Court, through the Third Division,
resolved to refer the case to the Court of Appeals. Petitioners filed a motion
for reconsideration thereof, but during its pendency the Court of Appeals on
March 9,1988 promulgated its decision on the referred case [Rollo, pp. 130-
137]. Petitioners moved to recall the Court of Appeals' decision. In the
meantime, the Court on June 29,1988 denied the motion for reconsideration
in G.R. No. 97577 for being moot and academic. Petitioners' motion to recall
the decision of the Court of Appeals was also denied in view of this Court's
denial of the motion for reconsideration [Rollo, pp. 141- 143]. Hence, the
instant petition to review the decision of the Court of Appeals [Rollo, pp. 12-
37].
Upon motion of the SSS on February 6,1989, the Court issued a temporary
restraining order enjoining the petitioners from staging another strike or from
pursuing the notice of strike they filed with the Department of Labor and
Employment on January 25, 1989 and to maintain the status quo [Rollo, pp.
151-152].
The Court, taking the comment as answer, and noting the reply and
supplemental reply filed by petitioners, considered the issues joined and the
case submitted for decision.
The position of the petitioners is that the Regional Trial Court had no
jurisdiction to hear the case initiated by the SSS and to issue the restraining
order and the writ of preliminary injunction, as jurisdiction lay with the
Department of Labor and Employment or the National Labor Relations
Commission, since the case involves a labor dispute.
On the other hand, the SSS advances the contrary view, on the ground that
the employees of the SSS are covered by civil service laws and rules and
regulations, not the Labor Code, therefore they do not have the right to strike.
Since neither the DOLE nor the NLRC has jurisdiction over the dispute, the
Regional Trial Court may enjoin the employees from striking.
In dismissing the petition for certiorari and prohibition with preliminary
injunction filed by petitioners, the Court of Appeals held that since the
employees of the SSS, are government employees, they are not allowed to
strike, and may be enjoined by the Regional Trial Court, which had jurisdiction
over the SSS' complaint for damages, from continuing with their strike.
Thus, the sequential questions to be resolved by the Court in deciding
whether or not the Court of Appeals erred in finding that the Regional Trial
Court did not act without or in excess of jurisdiction when it took cognizance
of the case and enjoined the strike are as follows:
1. Do the employees of the SSS have the right to strike?
2. Does the Regional Trial Court have jurisdiction to hear the case initiated by
the SSS and to enjoin the strikers from continuing with the strike and to order
them to return to work?
These shall be discussed and resolved seriatim
I abridged. Now then, if the purpose of the state is to prohibit
The 1987 Constitution, in the Article on Social Justice and Human Rights,
provides that the State "shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law" [Art. XIII, Sec.
31].
By itself, this provision would seem to recognize the right of all workers and
employees, including those in the public sector, to strike. But the Constitution
itself fails to expressly confirm this impression, for in the Sub-Article on the
Civil Service Commission, it provides, after defining the scope of the civil
service as "all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with
original charters," that "[t]he right to self-organization shall not be denied to
government employees" [Art. IX(B), Sec. 2(l) and (50)]. Parenthetically, the
Bill of Rights also provides that "[tlhe right of the people, including those
employed in the public and private sectors, to form unions, associations, or
societies for purposes not contrary to law shall not abridged" [Art. III, Sec. 8].
Thus, while there is no question that the Constitution recognizes the right of
government employees to organize, it is silent as to whether such recognition
also includes the right to strike.
Resort to the intent of the framers of the organic law becomes helpful in
understanding the meaning of these provisions. A reading of the proceedings
of the Constitutional Commission that drafted the 1987 Constitution would
show that in recognizing the right of government employees to organize, the
commissioners intended to limit the right to the formation of unions or
associations only, without including the right to strike.
Thus, Commissioner Eulogio R. Lerum, one of the sponsors of the provision
that "[tlhe right to self-organization shall not be denied to government
employees" [Art. IX(B), Sec. 2(5)], in answer to the apprehensions expressed
by Commissioner Ambrosio B. Padilla, Vice-President of the Commission,
explained:
MR. LERUM. I think what I will try to say will not take that
long. When we proposed this amendment providing for self-
organization of government employees, it does not mean that
because they have the right to organize, they also have the
right to strike. That is a different matter. We are only talking
about organizing, uniting as a union. With regard to the right
to strike, everyone will remember that in the Bill of Rights,
there is a provision that the right to form associations or
societies whose purpose is not contrary to law shall not be
the strikes coming from employees exercising government
functions, that could be done because the moment that is
prohibited, then the union which will go on strike will be an
illegal union. And that provision is carried in Republic Act 875.
In Republic Act 875, workers, including those from the
government-owned and controlled, are allowed to organize
but they are prohibited from striking. So, the fear of our
honorable Vice- President is unfounded. It does not mean
that because we approve this resolution, it carries with it the
right to strike. That is a different matter. As a matter of fact,
that subject is now being discussed in the Committee on
Social Justice because we are trying to find a solution to this
problem. We know that this problem exist; that the moment
we allow anybody in the government to strike, then what will
happen if the members of the Armed Forces will go on strike?
What will happen to those people trying to protect us? So that
is a matter of discussion in the Committee on Social Justice.
But, I repeat, the right to form an organization does not carry
 with it the right to strike. [Record of the Constitutional
Commission, vol. 1, p. 569].
It will be recalled that the Industrial Peace Act (R.A. No. 875), which was
repealed by the Labor Code (P.D. 442) in 1974, expressly banned strikes by
employees in the Government, including instrumentalities exercising
governmental functions, but excluding entities entrusted with proprietary
functions:
.Sec. 11. Prohibition Against Strikes in the Government.
The terms and conditions of employment in the
Government, including any political subdivision or
instrumentality thereof, are governed by law and it is declared
to be the policy of this Act that employees therein shall not
strike for the purpose of securing changes or modification in
their terms and conditions of employment. Such employees
may belong to any labor organization which does not impose
the obligation to strike or to join in strike: Provided, however,
That this section shall apply only to employees employed in
governmental functions and not those employed in
proprietary functions of the Government including but not
limited to governmental corporations.
No similar provision is found in the Labor Code, although at one time it
recognized the right of employees of government corporations established
under the Corporation Code to organize and bargain collectively and those in
the civil service to "form organizations for purposes not contrary to law" [Art.
244, before its amendment by B.P. Blg. 70 in 1980], in the same breath it
provided that "[t]he terms and conditions of employment of all government
employees, including employees of government owned and controlled
corporations, shall be governed by the Civil Service Law, rules and
regulations" [now Art. 276]. Understandably, the Labor Code is silent as to
whether or not government employees may strike, for such are excluded from
its coverage [Ibid]. But then the Civil Service Decree [P.D. No. 807], is equally
silent on the matter.
On June 1, 1987, to implement the constitutional guarantee of the right of
government employees to organize, the President issued E.O. No. 180 which
provides guidelines for the exercise of the right to organize of government
employees. In Section 14 thereof, it is provided that "[t]he Civil Service law
and rules governing concerted activities and strikes in the government service
shall be observed, subject to any legislation that may be enacted by
Congress." The President was apparently referring to Memorandum Circular
No. 6, s. 1987 of the Civil Service Commission under date April 21, 1987
which, "prior to the enactment by Congress of applicable laws concerning
strike by government employees ... enjoins under pain of administrative
sanctions, all government officers and employees from staging strikes,
demonstrations, mass leaves, walk-outs and other forms of mass action which
will result in temporary stoppage or disruption of public service." The air was
thus cleared of the confusion. At present, in the absence of any legislation
allowing government employees to strike, recognizing their right to do so, or
regulating the exercise of the right, they are prohibited from striking, by
express provision of Memorandum Circular No. 6 and as implied in E.O. No.
180. [At this juncture, it must be stated that the validity of Memorandum
Circular No. 6 is not at issue].
But are employees of the SSS covered by the prohibition against strikes?
The Court is of the considered view that they are. Considering that under the
1987 Constitution "[t]he civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including government-
owned or controlled corporations with original charters" [Art. IX(B), Sec. .2(l)
see also Sec. 1 of E.O. No. 180 where the employees in the civil service are
denominated as "government employees"] and that the SSS is one such
government-controlled corporation with an original charter, having been
created under R.A. No. 1161, its employees are part of the civil service
[NASECO v. NLRC, G.R. Nos. 69870 & 70295, November 24,1988] and are
covered by the Civil Service Commission's memorandum prohibiting strikes.
This being the case, the strike staged by the employees of the SSS was
illegal.
The statement of the Court in Alliance of Government Workers v. Minister of
Labor and Employment [G.R. No. 60403, August 3, 1:983, 124 SCRA 11 is
relevant as it furnishes the rationale for distinguishing between workers in the
private sector and government employees with regard to the right to strike:
The general rule in the past and up to the present is that 'the
terms and conditions of employment in the Government,
including any political subdivision or instrumentality thereof
are governed by law" (Section 11, the Industrial Peace Act,
R.A. No. 875, as amended and Article 277, the Labor Code,
P.D. No. 442, as amended). Since the terms and conditions
of government employment are fixed by law, government
workers cannot use the same weapons employed by workers
in the private sector to secure concessions from their
employers. The principle behind labor unionism in private
industry is that industrial peace cannot be secured through
compulsion by law. Relations between private employers and
their employees rest on an essentially voluntary basis.
Subject to the minimum requirements of wage laws and other
 labor and welfare legislation, the terms and conditions of
employment in the unionized private sector are settled
through the process of collective bargaining. In government
employment, however, it is the legislature and, where
properly given delegated power, the administrative heads of
government which fix the terms and conditions of
employment. And this is effected through statutes or
administrative circulars, rules, and regulations, not through
collective bargaining agreements. [At p. 13; Emphasis
supplied].
Apropos is the observation of the Acting Commissioner of Civil Service, in his
position paper submitted to the 1971 Constitutional Convention, and quoted
with approval by the Court in Alliance, to wit:
It is the stand, therefore, of this Commission that by reason
of the nature of the public employer and the peculiar
character of the public service, it must necessarily regard the
right to strike given to unions in private industry as not
applying to public employees and civil service employees. It
has been stated that the Government, in contrast to the
private employer, protects the interest of all people in the
public service, and that accordingly, such conflicting interests
as are present in private labor relations could not exist in the
relations between government and those whom they employ.
[At pp. 16-17; also quoted in National Housing Corporation v.
Juco, G.R. No. 64313, January 17,1985,134 SCRA 172,178-
179].
E.O. No. 180, which provides guidelines for the exercise of the right to
organize of government employees, while clinging to the same philosophy,
has, however, relaxed the rule to allow negotiation where the terms and
conditions of employment involved are not among those fixed by law. Thus:
.SECTION 13. Terms and conditions of employment or
improvements thereof, except those that are fixed by law,
may be the subject of negotiations between duly recognized
employees' organizations and appropriate government
authorities.
The same executive order has also provided for the general mechanism for
the settlement of labor disputes in the public sector to wit:
.SECTION 16. The Civil Service and labor laws and
procedures, whenever applicable, shall be followed in the
resolution of complaints, grievances and cases involving
government employees. In case any dispute remains
unresolved after exhausting all the available remedies under
existing laws and procedures, the parties may jointly refer the
dispute to the [Public Sector Labor- Management] Council for
appropriate action.
Government employees may, therefore, through their unions or associations,
either petition the Congress for the betterment of the terms and conditions of
employment which are within the ambit of legislation or negotiate with the
appropriate government agencies for the improvement of those which are not
fixed by law. If there be any unresolved grievances, the dispute may be
referred to the Public Sector Labor - Management Council for appropriate
action. But employees in the civil service may not resort to strikes, walk-outs
and other temporary work stoppages, like workers in the private sector, to
pressure the Govemment to accede to their demands. As now provided under
Sec. 4, Rule III of the Rules and Regulations to Govern the Exercise of the
Right of Government- Employees to Self- Organization, which took effect after
the instant dispute arose, "[t]he terms and conditions of employment in the
government, including any political subdivision or instrumentality thereof and
government- owned and controlled corporations with original charters are
governed by law and employees therein shall not strike for the purpose of
securing changes thereof."
II
The strike staged by the employees of the SSS belonging to petitioner union
being prohibited by law, an injunction may be issued to restrain it.
It is futile for the petitioners to assert that the subject labor dispute falls within
the exclusive jurisdiction of the NLRC and, hence, the Regional Trial Court
had no jurisdiction to issue a writ of injunction enjoining the continuance of the
strike. The Labor Code itself provides that terms and conditions of
employment of government employees shall be governed by the Civil Service
Law, rules and regulations [Art. 276]. More importantly, E.O. No. 180 vests
the Public Sector Labor - Management Council with jurisdiction over
unresolved labor disputes involving government employees [Sec. 16]. Clearly,
the NLRC has no jurisdiction over the dispute.
This being the case, the Regional Trial Court was not precluded, in the
exercise of its general jurisdiction under B.P. Blg. 129, as amended, from
assuming jurisdiction over the SSS's complaint for damages and issuing the
injunctive writ prayed for therein. Unlike the NLRC, the Public Sector Labor -
Management Council has not been granted by law authority to issue writs of
injunction in labor disputes within its jurisdiction. Thus, since it is the Council,
and not the NLRC, that has jurisdiction over the instant labor dispute, resort
to the general courts of law for the issuance of a writ of injunction to enjoin the
strike is appropriate.
Neither could the court a quo be accused of imprudence or overzealousness,
for in fact it had proceeded with caution. Thus, after issuing a writ of injunction
enjoining the continuance of the strike to prevent any further disruption of
public service, the respondent judge, in the same order, admonished the
parties to refer the unresolved controversies emanating from their employer-
employee relationship to the Public Sector Labor - Management Council for
appropriate action [Rollo, p. 86].
III
In their "Petition/Application for Preliminary and Mandatory Injunction," and
reiterated in their reply and supplemental reply, petitioners allege that the SSS
unlawfully withheld bonuses and benefits due the individual petitioners and
they pray that the Court issue a writ of preliminary prohibitive and mandatory
injunction to restrain the SSS and its agents from withholding payment thereof
and to compel the SSS to pay them. In their supplemental reply, petitioners
annexed an order of the Civil Service Commission, dated May 5, 1989, which
ruled that the officers of the SSSEA who are not preventively suspended and
who are reporting for work pending the resolution of the administrative cases
against them are entitled to their salaries, year-end bonuses and other fringe
benefits and affirmed the previous order of the Merit Systems Promotion
Board.
The matter being extraneous to the issues elevated to this Court, it is Our view
that petitioners' remedy is not to petition this Court to issue an injunction, but
to cause the execution of the aforesaid order, if it has already become final.
WHEREFORE, no reversible error having been committed by the Court of
Appeals, the instant petition for review is hereby DENIED and the decision of
the appellate court dated March 9, 1988 in CA-G.R. SP No. 13192 is
AFFIRMED. Petitioners' "Petition/Application for Preliminary and Mandatory
Injunction" dated December 13,1988 is DENIED.
SO ORDERED.
SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), DIONISION T. BAYLON,
RAMONMODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO DE ALDAY, SERGIO
ARANETA, PLACIDOAGUSTIN, VIRGILIO MAGPAYO, petitioner,vs.THE COURT OF
APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. CEZAR C. PERALEJO, RTC, BRANCH98,
QUEZON CITY, respondents.
G.R. No. 85279July 28, 1989
Facts:
On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City a complaint for damages
with a prayer for a writ of preliminary injunction against petitioners, alleging that on June 9, 1987, the officers
and members of SSSEA staged an illegal strike and baricaded the entrances to the SSS Building,
preventing non-striking employeesfrom reporting for work and SSS members from transacting business
with the SSS; that the strike was reported to thePublic Sector Labor - Management Council, which ordered
the strikers to return to work; that the strikers refused toreturn to work; and that the SSS suffered damages
as a result of the strike. The complaint prayed that a writ of preliminary injunction be issued to enjoin the
strike and that the strikers be ordered to return to work; that thedefendants (petitioners herein) be ordered
to pay damages; and that the strike be declared illegal. It appears that the SSSEA went on strike after the
SSS failed to act on the union's demands, which included:implementation of the provisions of the old SSS-
SSSEA collective bargaining agreement (CBA) on check-off of uniondues; payment of accrued overtime
pay, night differential pay and holiday pay; conversion of temporary or contractualemployees with six (6)
months or more of service into regular and permanent employees and their entitlement to thesame
salaries, allowances and benefits given to other regular employees of the SSS; and payment of the
children'sallowance of P30.00, and after the SSS deducted certain amounts from the salaries of the
employees and allegedlycommitted acts of discrimination and unfair labor practices.
Issue:
Whether or not employees of the Social Security System (SSS) have the right to strike.
Held:
The 1987 Constitution, in the Article on Social Justice and Human Rights, provides that the State "shall
guarantee therights of all workers to self-organization, collective bargaining and negotiations, and peaceful
concerted activities,including the right to strike in accordance with law" [Art. XIII, Sec. 31]. Resort to the
intent of the framers of the organic law becomes helpful in understanding the meaning of theseprovisions.
A reading of the proceedings of the Constitutional Commission that drafted the 1987 Constitution
wouldshow that in recognizing the right of government employees to organize, the commissioners
intended to limit the rightto the formation of unions or associations only, without including the right to
strike. Considering that under the 1987 Constitution "the civil service embraces all branches, subdivisions,
instrumentalities,and agencies of the Government, including government-owned or controlled
corporations with original charters" [Art.IX(B), Sec. .2(l) see also Sec. 1 of E.O. No. 180 where the
employees in the civil service are denominated as"government employees"] and that the SSS is one such
government-controlled corporation with an original charter,having been created under R.A. No. 1161, its
employees are part of the civil service [NASECO v. NLRC, G.R. Nos.69870 & 70295, November
24,1988] and are covered by the Civil Service Commission's memorandum prohibitingstrikes. This being
the case, the strike staged by the employees of the SSS was illegal.Victoriano, an Iglesia ni Cristo member,
has been an employee of the Elizalde Rope Factory since 1958. He was alsoa member of the EPWU.
Under the CBA between ERF and EPWU, a close shop agreement is being enforced whichmeans that
employment in the factory relies on the membership in the EPWU; that in order to retain employment in

MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID,
DAVID P. PASCUAL, RAQUEL ESTILLER, ALBERT HALLARE, EDMUND
M. CORTEZ, JOSELITO O. AGDON GEORGE P. LIGUTAN JR., CELSO M.
YAZAR, ALEX G. CORPUZ, RONALD M. DELFIN, ROWENA M.
TABAQUERO, CORAZON C. DELOS REYES, ROBERT G. NOORA,
MILAGROS O. LEQUIGAN, ADRIANA F. TATLONGHARI, IKE
CABANDUCOS, COCOY NOBELLO, DORENDA CANTIMBUHAN,
ROBERT MARCELO, LILIBETH Q. MARMOLEJO, JOSE E. SALES,
ISABEL MAMAUAG, VIOLETA G. MONTES, ALBINO TECSON, MELODY
V. GRUELA, BERNADETH D. AGERO, CYNTHIA DE VERA, LANI R.
CORTEZ, MA. ISABEL B. CONCEPCION, DINDO VALERIO, ZENAIDA
MATA, ARIEL DEL PILAR, MARGARET CECILIA CANOZA, THELMA
SEBASTIAN, MA. JEANETTE CERVANTES, JEANNIE RAMIL, ROZAIDA
PASCUAL, PINKY BALOLOA, ELIZABETH VENTURA, GRACE S. PARDO
& RICO TIMOSA, petitioners vs. NATIONAL LABOR RELATIONS
COMMISSION & FAR EAST BANK AND TRUST COMPANY, respondents.
DECISION
PANGANIBAN, J.:
The Magna Carta for Disabled Persons mandates that qualified disabled
persons be granted the same terms and conditions of employment as
qualified able-bodied employees. Once they have attained the status of
regular workers, they should be accorded all the benefits granted by law,
notwithstanding written or verbal contracts to the contrary. This treatment is
rooted not merely on charity or accommodation, but on justice for all.
The Case
Challenged in the Petition for Certiorari[1] before us is the June 20, 1995
Decision[2] of the National Labor Relations Commission (NLRC),[3] which
affirmed the August, 22 1994 ruling of Labor Arbiter Cornelio L.
Linsangan. The labor arbiters Decision disposed as follows:[4]
WHEREFORE, judgment is hereby rendered dismissing the above-
mentioned complaint for lack of merit.
Also assailed is the August 4, 1995 Resolution[5] of the NLRC, which
denied the Motion for Reconsideration.
The Facts
The facts were summarized by the NLRC in this wise:[6]
Complainants numbering 43 (p. 176, Records) are deaf-mutes who were
hired on various periods from 1988 to 1993 by respondent Far East Bank
and Trust Co. as Money Sorters and Counters through a uniformly worded
agreement called Employment Contract for Handicapped Workers. (pp. 68 &
69, Records) The full text of said agreement is quoted below:
EMPLOYMENT CONTRACT FOR HANDICAPPED WORKERS
This Contract, entered into by and between:
FAR EAST BANK AND TRUST COMPANY, a universal banking corporation
duly organized and existing under and by virtue of the laws of the
Philippines, with business address at FEBTC Building, Muralla, Intramuros,
Manila, represented herein by its Assistant Vice President, MR. FLORENDO
G. MARANAN, (hereinafter referred to as the BANK);
- and -
________________, ________________ years old, of legal age,
_____________, and residing at __________________ (hereinafter referred
to as the (EMPLOYEE).
WITNESSETH: That
WHEREAS, the BANK, cognizant of its social responsibility, realizes that
there is a need to provide disabled and handicapped persons gainful
employment and opportunities to realize their potentials, uplift their socio-
economic well being and welfare and make them productive, self-reliant and
useful citizens to enable them to fully integrate in the mainstream of society;
WHEREAS, there are certain positions in the BANK which may be filled-up
by disabled and handicapped persons, particularly deaf-mutes, and the
BANK ha[s] been approached by some civic-minded citizens and authorized
government agencies [regarding] the possibility of hiring handicapped
workers for these positions;
WHEREAS, the EMPLOYEE is one of those handicapped workers who
[were] recommended for possible employment with the BANK;
NOW, THEREFORE, for and in consideration of the foregoing premises and
in compliance with Article 80 of the Labor Code of the Philippines as
amended, the BANK and the EMPLOYEE have entered into this
Employment Contract as follows:
1. The BANK agrees to employ and train the EMPLOYEE, and the
EMPLOYEE agrees to diligently and faithfully work with the BANK,
as MoneySorter and Counter.
2. The EMPLOYEE shall perform among others, the following duties and
responsibilities:
i Sort out bills according to color;
ii. Count each denomination per hundred, either manually or with the aid of a
counting machine;
iii. Wrap and label bills per hundred;
iv. Put the wrapped bills into bundles; and
v. Submit bundled bills to the bank teller for verification.
3. The EMPLOYEE shall undergo a training period of one (1) month, after
which the BANK shall determine whether or not he/she should be allowed to
finish the remaining term of this Contract.
4. The EMPLOYEE shall be entitled to an initial compensation of P118.00
per day, subject to adjustment in the sole judgment of the BANK, payable
every 15th and end of the month.
5. The regular work schedule of the EMPLOYEE shall be five (5) days per
week, from Mondays thru Fridays, at eight (8) hours a day. The EMPLOYEE
may be required to perform overtime work as circumstance may warrant, for
which overtime work he/she [shall] be paid an additional compensation of
125% of his daily rate if performed during ordinary days and 130% if
performed during Saturday or [a] rest day.
6. The EMPLOYEE shall likewise be entitled to the following benefits:
i. Proportionate 13th month pay based on his basic daily wage.
ii. Five (5) days incentive leave.
iii. SSS premium payment.
7. The EMPLOYEE binds himself/herself to abide [by] and comply with all
the BANK Rules and Regulations and Policies, and to conduct
himself/herself in a manner expected of all employees of the BANK.
8. The EMPLOYEE acknowledges the fact that he/she had been employed
under a special employment program of the BANK, for which reason the
standard hiring requirements of the BANK were not applied in his/her
case. Consequently, the EMPLOYEE acknowledges and accepts the fact
that the terms and conditions of the employment generally observed by the
BANK with respect to the BANKs regular employee are not applicable to the
EMPLOYEE, and that therefore, the terms and conditions of the
EMPLOYEEs employment with the BANK shall be governed solely and
exclusively by this Contract and by the applicable rules and regulations that
the Department of Labor and Employment may issue in connection with the
employment of disabled and handicapped workers. More specifically, the
EMPLOYEE hereby acknowledges that the provisions of Book Six of the
Labor Code of the Philippines as amended, particularly on regulation of
employment and separation pay are not applicable to him/her.
9. The Employment Contract shall be for a period of six (6) months or from
____ to ____ unless earlier terminated by the BANK for any just or
reasonable cause. Any continuation or extension of this Contract shall be in
writing and therefore this Contract will automatically expire at the end of its
terms unless renewed in writing by the BANK.
IN WITNESS WHEREOF, the parties, have hereunto affixed their
signature[s] this ____ day of _________________, ____________ at
Intramuros, Manila, Philippines.
In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989
another two (2); in 1990, nineteen (19); in 1991 six (6); in 1992, six (6) and
in 1993, twenty-one (21). Their employment[s] were renewed every six
months such that by the time this case arose, there were fifty-six (56) deaf-
mutes who were employed by respondent under the said employment
agreement. The last one was Thelma Malindoy who was employed in 1992
and whose contract expired on July 1993.
xxxxxxxxx
Disclaiming that complainants were regular employees, respondent Far East
Bank and Trust Company maintained that complainants who are a special
class of workers the hearing impaired employees were hired temporarily
under [a] special employment arrangement which was a result of overtures 8. JOSELITO O. AGDON Intramuros 5 NOV 90 17 NOV 93
made by some civic and political personalities to the respondent Bank; that
complainant[s] were hired due to pakiusap which must be considered in the 9. GEORGE P. LIGUTAN, JR. Intramuros 6 SEPT 89 19 JAN 94
light of the context of the respondent Banks corporate philosophy as well as
its career and working environment which is to maintain and strengthen a
10. CELSO M. YAZAR Intramuros 8 FEB 93 8 AUG 93
corps of professionals trained and qualified officers and regular employees
who are baccalaureate degree holders from excellent schools which is an
unbending policy in the hiring of regular employees; that in addition to this, 11. ALEX G. CORPUZ Intramuros 15 FEB 93 15 AUG 93
training continues so that the regular employee grows in the corporate
ladder; that the idea of hiring handicapped workers was acceptable to them 12. RONALD M. DELFIN Intramuros 22 FEB 93 22 AUG 93
only on a special arrangement basis; that it adopted the special program to
help tide over a group of handicapped workers such as deaf-mutes like the 13. ROWENA M. TABAQUERO Intramuros 22 FEB 93 22 AUG 93
complainants who could do manual work for the respondent Bank; that the
task of counting and sorting of bills which was being performed by tellers 14. CORAZON C. DELOS REYES Intramuros 8 FEB 93 8 AUG 93
could be assigned to deaf-mutes; that the counting and sorting of money are
tellering works which were always logically and naturally part and parcel of
15. ROBERT G. NOORA Intramuros 15 FEB 93 15 AUG 93
the tellers normal functions; that from the beginning there have been no
separate items in the respondent Bank plantilla for sorters or counters; that
the tellers themselves already did the sorting and counting chore as a 16. MILAGROS O. LEQUIGAN Intramuros 1 FEB 93 1 AUG 93
regular feature and integral part of their duties (p. 97, Records); that through
the pakiusap of Arturo Borjal, the tellers were relieved of this task of 17. ADRIANA F. TATLONGHARI Intramuros 22 JAN 93 22 JUL 93
counting and sorting bills in favor of deaf-mutes without creating new
positions as there is no position either in the respondent or in any other bank 18. IKE CABANDUCOS Intramuros 24 FEB 93 24 AUG 93
in the Philippines which deals with purely counting and sorting of bills in
banking operations. 19. COCOY NOBELLO Intramuros 22 FEB 93 22 AUG 93

Petitioners specified when each of them was hired and dismissed, viz:[7] 20. DORENDA CATIMBUHAN Intramuros 15 FEB 93 15 AUG 93

NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed 21. ROBERT MARCELO West 31 JUL 93[8] 1 AUG 93

1. MARITES BERNARDO Intramuros 12 NOV 90 17 NOV 93 22. LILIBETH Q. MARMOLEJO West 15 JUN 90 21 NOV 93

2. ELVIRA GO DIAMANTE Intramuros 24 JAN 90 11 JAN 94 23. JOSE E. SALES West 6 AUG 92 12 OCT 93

3. REBECCA E. DAVID Intramuros 16 APR 90 23 OCT 93 24. ISABEL MAMAUAG West 8 MAY 92 10 NOV 93

4. DAVID P. PASCUAL Bel-Air 15 OCT 88 21 NOV 94 25. VIOLETA G. MONTES Intramuros 2 FEB 90 15 JAN 94

5. RAQUEL ESTILLER Intramuros 2 JUL 92 4 JAN 94 26. ALBINO TECSON Intramuros 7 NOV 91 10 NOV 93

6. ALBERT HALLARE West 4 JAN 91 9 JAN 94 27. MELODY V. GRUELA West 28 OCT 91 3 NOV 93

7. EDMUND M. CORTEZ Bel-Air 15 JAN 91 3 DEC 93 28. BERNADETH D. AGERO West 19 DEC 90 27 DEC 93
29. CYNTHIA DE VERA Bel-Air 26 JUN 90 3 DEC 93
30. LANI R. CORTEZ Bel-Air 15 OCT 88 10 DEC 93
31. MA. ISABEL B. CONCEPCION West 6 SEPT 90 6 FEB 94
32. DINDO VALERIO Intramuros 30 MAY 93 30 NOV 93
33. ZENAIDA MATA Intramuros 10 FEB 93 10 AUG 93
34. ARIEL DEL PILAR Intramuros 24 FEB 93 24 AUG 93
35. MARGARET CECILIA CANOZA Intramuros 27 JUL 90 4 FEB 94
36. THELMA SEBASTIAN Intramuros 12 NOV 90 17 NOV 93
37. MA. JEANETTE CERVANTES West 6 JUN 92 7 DEC 93
38. JEANNIE RAMIL Intramuros 23 APR 90 12 OCT 93
39. ROZAIDA PASCUAL Bel-Air 20 APR 89 29 OCT 93
40. PINKY BALOLOA West 3 JUN 91 2 DEC 93
41. ELIZABETH VENTURA West 12 MAR 90 FEB 94 [SIC]
42. GRACE S. PARDO West 4 APR 90 13 MAR 94
43. RICO TIMOSA Intramuros 28 APR 93 28 OCT 93
As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against
herein petitioners. Hence, this recourse to this Court.[9]
The Ruling of the NLRC
In affirming the ruling of the labor arbiter that herein petitioners could not
be deemed regular employees under Article 280 of the Labor Code, as
amended, Respondent Commission ratiocinated as follows:
We agree that Art. 280 is not controlling herein. We give due credence to the
conclusion that complainants were hired as an accommodation to [the]
recommendation of civic oriented personalities whose employment[s] were
covered by xxx Employment Contract[s] with special provisions on duration
of contract as specified under Art. 80. Hence, as correctly held by the Labor
Arbiter a quo, the terms of the contract shall be the law between the
parties.[10]
The NLRC also declared that the Magna Carta for Disabled Persons was
not applicable, considering the prevailing circumstances/milieu of the case.
Issues
In their Memorandum, petitioners cite the following grounds in support of
their cause:
I. The Honorable Commission committed grave abuse of discretion in
holding that the petitioners - money sorters and counters working in a bank -
were not regular employees.
II. The Honorable Commission committed grave abuse of discretion in
holding that the employment contracts signed and renewed by the
petitioners - which provide for a period of six (6) months - were valid.
III. The Honorable Commission committed grave abuse of discretion in not
applying the provisions of the Magna Carta for the Disabled (Republic Act
No. 7277), on proscription against discrimination against disabled
persons.[11]
In the main, the Court will resolve whether petitioners have become
regular employees.
This Courts Ruling
The petition is meritorious. However, only the employees, who worked
for more than six months and whose contracts were renewed are deemed
regular. Hence, their dismissal from employment was illegal.
 Preliminary Matter: Propriety of Certiorari
Respondent Far East Bank and Trust Company argues that a review of
the findings of facts of the NLRC is not allowed in a petition for
certiorari.Specifically, it maintains that the Court cannot pass upon the
findings of public respondents that petitioners were not regular employees.
True, the Court, as a rule, does not review the factual findings of public
respondents in a certiorari proceeding. In resolving whether the petitioners
have become regular employees, we shall not change the facts found by the
public respondent. Our task is merely to determine whether the NLRC
committed grave abuse of discretion in applying the law to the established
facts, as above-quoted from the assailed Decision.
Main Issue: Are Petitioners Regular Employees?
Petitioners maintain that they should be considered regular employees,
because their task as money sorters and counters was necessary and
desirable to the business of respondent bank. They further allege that their
contracts served merely to preclude the application of Article 280 and to bar
them from becoming regular employees.
Private respondent, on the other hand, submits that petitioners were
hired only as special workers and should not in any way be considered as part
of the regular complement of the Bank.[12] Rather, they were special workers
under Article 80 of the Labor Code. Private respondent contends that it never
solicited the services of petitioners, whose employment was merely an
accommodation in response to the requests of government officials and civic-
minded citizens. They were told from the start, with the assistance of
government representatives, that they could not become regular employees
because there were no plantilla positions for money sorters, whose task used
to be performed by tellers. Their contracts were renewed several times, not
because of need but merely for humanitarian reasons. Respondent submits
that as of the present, the special position that was created for the petitioners
no longer exist[s] in private respondent [bank], after the latter had decided not
to renew anymore their special employment contracts.
At the outset, let it be known that this Court appreciates the nobility of
private respondents effort to provide employment to physically impaired
individuals and to make them more productive members of society. However,
we cannot allow it to elude the legal consequences of that effort, simply
because it now deems their employment irrelevant. The facts, viewed in light
of the Labor Code and the Magna Carta for Disabled Persons, indubitably
show that the petitioners, except sixteen of them, should be deemed regular
employees. As such, they have acquired legal rights that this Court is duty-
bound to protect and uphold, not as a matter of compassion but as a
consequence of law and justice.
The uniform employment contracts of the petitioners stipulated that they
shall be trained for a period of one month, after which the employer shall
determine whether or not they should be allowed to finish the 6-month term of
the contract. Furthermore, the employer may terminate the contract at any
time for a just and reasonable cause. Unless renewed in writing by the
employer, the contract shall automatically expire at the end of the term.
According to private respondent, the employment contracts were
prepared in accordance with Article 80 of the Labor Code, which provides:
ART. 80. Employment agreement. Any employer who employs handicapped
workers shall enter into an employment agreement with them, which
agreement shall include:
(a) The names and addresses of the handicapped workers to be employed;
(b) The rate to be paid the handicapped workers which shall be not less than
seventy five (75%) per cent of the applicable legal minimum wage;
(c) The duration of employment period; and
(d) The work to be performed by handicapped workers.
The employment agreement shall be subject to inspection by the Secretary
of Labor or his duly authorized representatives.
The stipulations in the employment contracts indubitably conform with
the aforecited provision. Succeeding events and the enactment of RA No.
7277 (the Magna Carta for Disabled Persons),[13] however, justify the
application of Article 280 of the Labor Code.
Respondent bank entered into the aforesaid contract with a total of 56
handicapped workers and renewed the contracts of 37 of them. In fact, two of
them worked from 1988 to 1993. Verily, the renewal of the contracts of the
handicapped workers and the hiring of others lead to the conclusion that their
tasks were beneficial and necessary to the bank. More important, these facts
show that they were qualified to perform the responsibilities of their
positions. In other words, their disability did not render them unqualified or
unfit for the tasks assigned to them.
 In this light, the Magna Carta for Disabled Persons mandates that
a qualified disabled employee should be given the same terms and conditions
of employment as a qualified able-bodied person. Section 5 of the Magna
Carta provides:
Section 5. Equal Opportunity for Employment.No disabled person shall be
denied access to opportunities for suitable employment. A qualified disabled
employee shall be subject to the same terms and conditions of employment
and the same compensation, privileges, benefits, fringe benefits, incentives
or allowances as a qualified able bodied person.
The fact that the employees were qualified disabled persons necessarily
removes the employment contracts from the ambit of Article 80. Since the
Magna Carta accords them the rights of qualified able-bodied persons, they
are thus covered by Article 280 of the Labor Code, which provides:
ART. 280. Regular and Casual Employment. -- The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the
work or services to be performed is seasonal in nature and the employment
is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That, any employee who has rendered at
least one year of service, whether such service is continuous or broken,
shall be considered as regular employee with respect to the activity in which
he is employed and his employment shall continue while such activity exists.
The test of whether an employee is regular was laid down in De Leon v.
NLRC,[14] in which this Court held:
The primary standard, therefore, of determining regular employment is the
reasonable connection between the particular activity performed by the
employee in relation to the usual trade or business of the employer. The test
is whether the former is usually necessary or desirable in the usual business
or trade of the employer. The connection can be determined by considering
the nature of the work performed and its relation to the scheme of the
particular business or trade in its entirety. Also if the employee has been
performing the job for at least one year, even if the performance is not
continuous and merely intermittent, the law deems repeated and continuing
need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is
considered regular, but only with respect to such activity, and while such
activity exists.
Without a doubt, the task of counting and sorting bills is necessary and
desirable to the business of respondent bank. With the exception of sixteen
of them, petitioners performed these tasks for more than six months. Thus,
the following twenty-seven petitioners should be deemed regular
employees:Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David
P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O.
Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel
Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth
D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion,
Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes,
Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace
S. Pardo.
As held by the Court, Articles 280 and 281 of the Labor Code put an end
to the pernicious practice of making permanent casuals of our lowly
employees by the simple expedient of extending to them probationary
appointments, ad infinitum.[15] The contract signed by petitioners is akin to a
probationary employment, during which the bank determined the employees
fitness for the job. When the bank renewed the contract after the lapse of the
six-month probationary period, the employees thereby became regular
employees.[16] No employer is allowed to determine indefinitely the fitness of
its employees.
As regular employees, the twenty-seven petitioners are entitled to
security of tenure; that is, their services may be terminated only for a just or
authorized cause. Because respondent failed to show such cause,[17] these
twenty-seven petitioners are deemed illegally dismissed and therefore entitled
to back wages and reinstatement without loss of seniority rights and other
privileges.[18] Considering the allegation of respondent that the job of money
sorting is no longer available because it has been assigned back to the tellers
to whom it originally belonged,[19] petitioners are hereby awarded separation
pay in lieu of reinstatement.[20]
Because the other sixteen worked only for six months, they are not
deemed regular employees and hence not entitled to the same benefits.
Applicability of the Brent Ruling
 Respondent bank, citing Brent School v. Zamora[21] in which the Court
upheld the validity of an employment contract with a fixed term, argues that
the parties entered into the contract on equal footing. It adds that the
petitioners had in fact an advantage, because they were backed by then
DSWD Secretary Mita Pardo de Tavera and Representative Arturo Borjal.
We are not persuaded. The term limit in the contract was premised on
the fact that the petitioners were disabled, and that the bank had to determine
their fitness for the position. Indeed, its validity is based on Article 80 of the
Labor Code. But as noted earlier, petitioners proved themselves to
be qualified disabled persons who, under the Magna Carta for Disabled
Persons, are entitled to terms and conditions of employment enjoyed
by qualified able-bodied individuals; hence, Article 80 does not apply because
petitioners are qualified for their positions. The validation of the limit imposed
on their contracts, imposed by reason of their disability, was a glaring instance
of the very mischief sought to be addressed by the new law.
Moreover, it must be emphasized that a contract of employment is
impressed with public interest.[22] Provisions of applicable statutes are
deemed written into the contract, and the parties are not at liberty to insulate
themselves and their relationships from the impact of labor laws and
regulations by simply contracting with each other. [23] Clearly, the agreement
of the parties regarding the period of employment cannot prevail over the
provisions of the Magna Carta for Disabled Persons, which mandate that
petitioners must be treated as qualified able-bodied employees.
Respondents reason for terminating the employment of petitioners is
instructive. Because the Bangko Sentral ng Pilipinas (BSP) required that cash
in the bank be turned over to the BSP during business hours from 8:00 a.m.
to 5:00 p.m., respondent resorted to nighttime sorting and counting of
money.Thus, it reasons that this task could not be done by deaf mutes
because of their physical limitations as it is very risky for them to travel at
night.[24] We find no basis for this argument. Travelling at night involves risks
to handicapped and able-bodied persons alike. This excuse cannot justify the
termination of their employment.
Other Grounds Cited by Respondent
Respondent argues that petitioners were merely accommodated
employees. This fact does not change the nature of their employment. As
earlier noted, an employee is regular because of the nature of work and the
length of service, not because of the mode or even the reason for hiring them.
Equally unavailing are private respondents arguments that it did not go
out of its way to recruit petitioners, and that its plantilla did not contain their
positions. In L. T. Datu v. NLRC,[25] the Court held that the determination of
whether employment is casual or regular does not depend on the will or word
of the employer, and the procedure of hiring x x x but on the nature of the
activities performed by the employee, and to some extent, the length of
performance and its continued existence.
Private respondent argues that the petitioners were informed from the
start that they could not become regular employees. In fact, the bank adds,
they agreed with the stipulation in the contract regarding this point. Still, we
are not persuaded. The well-settled rule is that the character of employment
is determined not by stipulations in the contract, but by the nature of the work
performed.[26] Otherwise, no employee can become regular by the simple
expedient of incorporating this condition in the contract of employment.
In this light, we iterate our ruling in Romares v. NLRC:[27]
Article 280 was emplaced in our statute books to prevent the circumvention
of the employees right to be secure in his tenure by indiscriminately and
completely ruling out all written and oral agreements inconsistent with the
concept of regular employment defined therein. Where an employee has
been engaged to perform activities which are usually necessary or desirable
in the usual business of the employer, such employee is deemed a regular
employee and is entitled to security of tenure notwithstanding the contrary
provisions of his contract of employment.
xxxxxxxxx
At this juncture, the leading case of Brent School, Inc. v. Zamora proves
instructive. As reaffirmed in subsequent cases, this Court has upheld the
legality of fixed-term employment. It ruled that the decisive determinant in
term employment should not be the activities that the employee is called
upon to perform but the day certain agreed upon the parties for the
commencement and termination of their employment relationship. But this
Court went on to say that where from the circumstances it is apparent that
the periods have been imposed to preclude acquisition of tenurial security by
the employee, they should be struck down or disregarded as contrary to
public policy and morals.
In rendering this Decision, the Court emphasizes not only the
constitutional bias in favor of the working class, but also the concern of the
State for the plight of the disabled. The noble objectives of Magna Carta for
Disabled Persons are not based merely on charity or accommodation, but on
justice and the equal treatment of qualified persons, disabled or not. In the
present case, the handicap of petitioners (deaf-mutes) is not a hindrance to
their work. The eloquent proof of this statement is the repeated renewal of
their employment contracts. Why then should they be dismissed, simply
because they are physically impaired? The Court believes, that, after showing
their fitness for the work assigned to them, they should be treated and granted
the same rights like any other regular employees.
In this light, we note the Office of the Solicitor Generals prayer joining the
petitioners cause.[28]
WHEREFORE, premises considered, the Petition is
hereby GRANTED. The June 20, 1995 Decision and the August 4, 1995
Resolution of the NLRC are REVERSED and SET ASIDE. Respondent Far
East Bank and Trust Company is hereby ORDERED to pay back wages and
separation pay to each of the following twenty-seven (27) petitioners, namely,
Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David P. Pascual,
Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O. Agdon, George
P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta
G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia
de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza,
Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual,
Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo. The NLRC is hereby
directed to compute the exact amount due each of said employees, pursuant
to existing laws and regulations, within fifteen days from the finality of this
Decision.No costs.
SO ORDERED.
Bernardo vs NLRC
GR 122917 07/03/99
Facts:
Petitioners numbering 43 are deafmutes who were hired on various periods
from 1988 to 1993 by respondent Far East Bank and Trust Co. as Money
Sorters and Counters through a uniformly worded agreement called
Employment Contract for Handicapped Workers. Subsequently, they are
dismissed.
Petitioners maintain that they should be considered regular employees,
because their task as money sorters and counters was necessary and
desirable to the business of respondent bank. They further allege that their
contracts served merely to preclude the application of Article 280 and to bar
them from becoming regular employees.
Private respondent, on the other hand, submits that petitioners were hired
only as special workers and should not in any way be considered as part of
the regular complement of the Bank.[12] Rather, they were special
workers under Article 80 of the Labor Code.
Issue: WON petitioners have become regular employees.
Held: The uniform employment contracts of the petitioners stipulated that
they shall be trained for a period of one month, after which the employer
shall determine whether or not they should be allowed to finish the 6-month
term of the contract. Furthermore, the employer may terminate the contract
at any time for a just and reasonable cause. Unless renewed in writing by
the employer, the contract shall automatically expire at the end of the term.
Respondent bank entered into the aforesaid contract with a total of 56
handicapped workers and renewed the contracts of 37 of them. In fact, two
of them worked from 1988 to 1993. Verily, the renewal of the contracts of
the handicapped workers and the hiring of others lead to the conclusion that
their tasks were beneficial and necessary to the bank. More important,
these facts show that they were qualified to perform the responsibilities of
their positions. In other words, their disability did not render them
unqualified or unfit for the tasks assigned to them.
In this light, the Magna Carta for Disabled Persons mandates that
a qualified disabled employee should be given the same terms and
conditions of employment as a qualified able-bodied person. Section 5 of
the Magna Carta provides:
Section 5. Equal Opportunity for Employment.No disabled person shall
be denied access to opportunities for suitable employment. A qualified
disabled employee shall be subject to the same terms and conditions of
employment and the same compensation, privileges, benefits, fringe
benefits, incentives or allowances as a qualified able bodied person.
The fact that the employees were qualified disabled persons necessarily
removes the employment contracts from the ambit of Article 80. Since the
Magna Carta accords them the rights of qualified able-bodied persons, they
are thus covered by Article 280 of the Labor Code, which provides:
ART. 280. Regular and Casual Employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
employer, x x x
The primary standard, therefore, of determining regular employment is the
reasonable connection between the particular activity performed by the
employee in relation to the usual trade or business of the employer. The
test is whether the former is usually necessary or desirable in the usual
business or trade of the employer. The connection can be determined by
considering the nature of the work performed and its relation to the scheme
of the particular business or trade in its entirety. Also if the employee has
been performing the job for at least one year, even if the performance is not
continuous and merely intermittent, the law deems repeated and continuing
need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is
considered regular, but only with respect to such activity, and while such
activity exists.
Respondent bank entered into the aforesaid contract with a total of 56 handicapped
workers and renewed the contracts of 37 of them. In fact, two of them worked from
1988 to 1993. Verily, the renewal of the contracts of the handicapped workers and
the hiring of others lead to the conclusion that their tasks were beneficial and
necessary to the bank. More important, these facts show that they were qualified to
perform the responsibilities of their positions. In other words, their disability did not
render them unqualified or unfit for the tasks assigned to them.
Without a doubt, the task of counting and sorting bills is necessary and desirable to
the business of respondent bank. With the exception of sixteen of them, petitioners
performed these tasks for more than six months.
Petition granted
G.R. No. 81510 March 14, 1990 Moreover, the search and seizure order in question, assuming, ex gratia
argumenti, that it was validly issued, is clearly in the nature of a general
warrant. We have held that a warrant must identify clearly the things to be
HORTENCIA SALAZAR, petitioner, seized, otherwise, it is null and void
vs. For the guidance of the bench and the bar, we reaffirm the following
HON. TOMAS D. ACHACOSO, in his capacity as Administrator of the principles:
Philippine Overseas Employment Administration, and FERDIE 1. Under Article III, Section 2, of the l987 Constitution, it is only judges,
MARQUEZ, respondents. and no other, who may issue warrants of arrest and search:
FACTS: This concerns the validity of the power of the Secretary of Labor to 2. The exception is in cases of deportation of illegal and undesirable
issue warrants of arrest and seizure under Article 38 of the Labor Code, aliens, whom the President or the Commissioner of Immigration may
prohibiting illegal recruitment. order arrested, following a final order of deportation, for the purpose of
On October 21, 1987, Rosalie Tesoro filed with the POEA a complaint deportation.
against petitioner. Having ascertained that the petitioner had no license to
operate a recruitment agency, public respondent Administrator Tomas D.
Achacoso issued his challenged CLOSURE AND SEIZURE ORDER.
The POEA brought a team to the premises of Salazar to implement the
order. There it was found that petitioner was operating Hannalie Dance
Studio. Before entering the place, the team served said Closure and Seizure
order on a certain Mrs. Flora Salazar who voluntarily allowed them entry into
the premises. Mrs. Flora Salazar informed the team that Hannalie Dance
Studio was accredited with Moreman Development (Phil.). However, when
required to show credentials, she was unable to produce any. Inside the
studio, the team chanced upon twelve talent performers practicing a
dance number and saw about twenty more waiting outside, The team
confiscated assorted costumes which were duly receipted for by Mrs.
Asuncion Maguelan and witnessed by Mrs. Flora Salazar.
A few days after, petitioner filed a letter with the POEA demanding the return
of the confiscated properties. They alleged lack of hearing and due process,
and that since the house the POEA raided was a private residence, it was
robbery.
On February 2, 1988, the petitioner filed this suit for prohibition. Although the
acts sought to be barred are already fait accompli, thereby making
prohibition too late, we consider the petition as one for certiorari in view of
the grave public interest involved.

ISSUE: May the Philippine Overseas Employment Administration (or the

Secretary of Labor) validly issue warrants of search and seizure (or arrest)
under Article 38 of the Labor Code?

HELD: PETITION GRANTED. it is only a judge who may issue warrants of

search and arrest. Neither may it be done by a mere prosecuting body.
We reiterate that the Secretary of Labor, not being a judge, may no longer
issue search or arrest warrants. Hence, the authorities must go through the
judicial process. To that extent, we declare Article 38, paragraph (c), of the
Labor Code, unconstitutional and of no force and effect.