In the CAB, the alleged independent

“BROTHERHOOD” LABOR UNITY MOVEMENT vs contractors were paid a lump sum representing
HON. ZAMORA (1991) only the salaries the workers were entitled to,
arrived at by adding the salaries of each worker
FACTS: which depend on the volume of work they had
accomplished individually. Therefore, there is no
independent contractor-contractee
 Petitioners-members of “Brotherhood Labor relationship.
Unit Movement of the Philippines” (BLUM),
worked as “cargadores” or “pahinante” since
WHEREFORE, PETITION IS GRANTED.
1961 at the SMC Plant. Sometime in January
1969, the petitioner workers – numbering 140
organized themselves and engaged in union
activities. HAWAIIAN-PHILIPPINE COMPANY vs
GULMATICO (1994)
 Believing that they are entitled to overtime
and holiday pay, the petitioners aired their
FACTS:
gripes and grievances but it was not heeded by
the respondents. One of the union member was
dismissed from work. Hence, the petitioners  Respondent-Union, the National Federation
filed a complaint of unfair labor practice against of Sugar Workers-Food and General Trades,
respondent SMC on the ground of illegal filed an action against petitioner Hawaiian Phil
dismissal. Co. for claims under RA 809 (The Sugar Act of
1952). Respondent Union alleged that they
 On the other hand, SMC argued that the have never availed of the benefits due them
complainant are not or have never been their
under the law.
employees but they are the employees of the
Guaranteed Labor Contractor, an independent  Under the said act: “the proceeds of any
labor contracting firm increase in participation granted to planters
under this Act and above their present share
 Labor Arbiter Nestor Lim rendered a shall be divided between the planter and his
decision in favor of the complainants which
laborers in the following proportions. 60% of
was affirmed by the NLRC
the increase participation for the laborers and
 On appeal, the Secretary set aside the NLRC 40% for the planters.
ruling stressing the absence of an employer-
 Petitioner argued that respondent Labor
employee relationship
Arbiter Gulmatico has no jurisdiction over the
case considering their case does not fall under
Issue: Whether an employer-employee
those enumerated in Article 217 of the Labor
relationship exists between petitioners and
Code which provides the jurisdiction of Labor
respondent San Miguel Corporation
Arbiters and the Commission. Further,
petitioner contends that it has no ER-EE
HELD: YES
relationship with the respondent sugar workers
In determining the existence of an employer-
and that respondent union has no cause of
employee relationship, the elements that are
action because it is the planters-employers
generally considered are the following: (a) the
who is liable to pay the worker’s share under
selection and engagement of the employee; (b) the
LOI No. 854.
payment of wages; (c) the power of dismissal; and
(d) the employer's power to control the employee
Issue1: Whether public respondent Labor Arbiter
with respect to the means and methods by which
has jurisdiction to hear and decide the case
the work is to be accomplished. It is the called
against petitioner
"control test" that is the most important element
HELD: NO
While jurisdiction over controversies involving
In the CAB, petitioners worked continuously and
agricultural workers has been transferred from the
exclusively for an average of 7 years for the
Court of Agrarian Relations to the Labor Arbiters
company. Considering the length of time that the
under the Labor Code, said transferred jurisdiction
petitioners have worked, there is justification to
is however, not without limitations. The
conclude that they were engaged to perform
controversy must fall under one of the cases
activities necessary or desirable in the usual
enumerated under the Labor Code which arise out
business of trade of the respondent. Hence,
of or are in connection with an ER-EE relationship
petitioners are considered “regular employees.”
In the CAB, there is no ER-EE relationship between
Even assuming that there is a contract of
petitioner company and respondent union. Hence,
employment executed between SMC and the said
respondent Labor Arbiter has no jurisdiction to
labor contractor, the court ruled that Guaranteed
hear and decide the case against petitioner.
and Reliable Labor contractors have neither
substantial capital nor investment to qualify as an
Issue1: Whether respondent union has a cause of
independent contractor under the law. The
action
premises, tools and equipments used by the
HELD: NO
petitioners in their jobs are all supplied by the
To have a cause of action, the claimant must show
respondent SMC. It is only the manpower or labor
that he has a legal right and the respondent a
force which the alleged contractors supply,
correlative duty in respect thereof, which the latter
suggesting the existence of a "labor only"
violated by some wrongful act or omission.
contracting scheme prohibited by law
In the instant case, it would show that the
It is important to emphasize that that in a truly
payment of the worker’s share is liability of the
independent contractor-contractee relationship, the
planters-employers, and not of the petitioner
fees are paid directly to the manpower agency in
milling company. It is disputed that petitioner
lump sum without indicating or implying that the
milling company has already distributed to its
basis of such lump sum is the salary per worker
planters their respective shares. Hence, it has
multiplied by the number of workers assigned to
fulfilled its part and has nothing more to do with
the company.
the subsequent contribution by the planters of the
worker’s share.

WHEREFORE, PETITION IS GRANTED.
DAYAG vs HON. CENIZARES, JR. (1998)
FACTS:
 Petitioners were hired to work as tower
crane operators by one Alfredo Young, a
building contractor doing business in the name
of Young’s construction. In 1991, they were
transferred to Cebu City to work for Young’s
Shoemart Cebu Project. Petitioner William
Dayag asked permission to go to Manila to
attend family matters and was allowed to do so
but was not paid for January 23-30 due to his
accountability for the loss of certain
construction tools. The other petitioners left due
to harassment by Young. Thereafter, petitioners
banded together and filed a complaint against
Young before the NCR Arbitration Branch NLRC
which was assigned to Labor Arbiter Cenizares.
 Young filed a “Motion to transfer the case”
to the Regional Arbitration Branch, Region VII of
the NLRC. He contended that the case should
be filed in Cebu City because there is where the
workplace of the petitioners.
 Petitioners opposed the same, arguing that
all of them are from Metro Manila and that they
could not afford trips to Cebu. Besides, they
claimed that respondent’s main office is in
Corinthian Garden in QC.
 Labor Arbiter Cenizares GRANTED Young’s
“motion to transfer the case in Cebu.”
 Petitioners appealed to NLRC but it was
dismissed. Hence, they filed a MFR and this
time the Commission SET ASIDE it’s previous
decision and remanded the case to the original
arbitration branch of the NCR for further
proceedings.
 Young filed his own MFR and the NLRC
reinstated it’s first decision directing the
transfer of the case to Cebu City.
Issue: Whether the Labor Arbiter acted with grave
abuse of discretion when it entertained Young’s
motion to transfer
HELD: NO
The SC ruled that litigations should, as much as
possible, be decided on the merits and not
technicalities. Petitioners were able to file an
opposition on the “motion to transfer case” which
was considered by Labor Arbiter Cenizares. Hence,
there is no showing that they have been unduly
prejudiced by the motion’s failure to give notice
and hearing.
However, Young cannot derive comfort from this
petition. The SC held that the question of venue
relates more to the convenience of the parties
rather than upon the substance and merits of the
case. This is to assure convenience for the plaintiff
and his witness and to promote the ends of justice
under the principle that “the State shall afford
protection to labor.” The reason for this is that
the worker, being the economically-disadvantaged
party, the nearest governmental machinery to
settle the dispute must be placed at his immediate
disposal, and the other party is not to be given the
choice of another competent agency sitting in
another place as this will unduly burden the former
In the instant case, the ruling specifying the NCR
Arbitration Branch as the venue of the present
action cannot be considered oppressive to Young
because his residence in Corinthian Gardens also
serves as his correspondent office. Hearing the
case in Manila would clearly expedite the
proceedings and bring speedy resolution to the
instant case.
WHEREFORE, PETITION IS GRANTED.
NATIONAL UNION OF BANK EMPLOYEES vs
LAZARO (1988)
FACTS:
 The Commercial Bank and Trust Company
entered into a collective bargaining agreement
with Commercial Bank and Trust Company
Union, representing the file and rank of the
bank with a membership of over 1,000
employees
 In 1980, the union, together with the
National Union of Bank EEs submitted to bank
management proposals for the negotiation of a
new collective bargaining agreement. The
following day, however, the bank suspended
negotiations with the union. The bank entered
into a merger with BPI which assumed all
assets and liabilities.
 The Union went to the CFI Manila, presided
over by respondent Judge Lazaro, and filed a
complaint for specific performance, damages,
and preliminary injunction against private
respondents.
 Private Respondent filed a “Motion to
Dismiss” on the ground of lack of jurisdiction of
the court. Respondent Judge dismissed the
case on the ground that the complaint partook
of unfair labor practice dispute and jurisdiction
over which is vested in the labor arbiter.
Issue: Whether courts may take cognizance of
claims for damages arising from labor controversy
HELD: NO
The SC sustained the dismissal of the case
and held that the act complained of involves
collecting bargaining which is categorized to be an
unfair labor practice. Under the Labor Code, “all
cases involving unfair labor practices shall be
under the jurisdiction of the labor arbiters.”
As correctly held by the respondent court, an
unfair labor practice controversy is within the
original and exclusive jurisdiction of the Labor
Arbiters and the exclusive appellate jurisdiction of
the NLRC. Jurisdiction is conferred by law and
not necessarily by the nature of action. In the
CAB, PD No. 442, as amended by Batas Blg. 70,
has vested jurisdiction upon the Labor Arbiters, a
jurisdiction the courts may not assume.
WHEREFORE, PETITION DENIED
DY vs NLRC (1986)
FACTS:
 Private Respondent Carlito H. Vailoces was
the manager of the Rural Bank of Ayungon
(Negros Oriental). He was also a director and
stockholder of the bank.
 In 1983, a special stockholder’s meeting
was called for the purpose of electing the
members of the bank’s Board of Directors.
Petitioner Lorenzo Dy was elected president.
Vailoces was not re-elected as bank manager.
 Vailoces filed a complaint for illegal
dismissal and damages with the Ministry of
 Labor and Employment against Lorenzo Dy
asserting that Dy, after obtaining control of the
majority stock of the bank, called an illegal
stockholder’s meeting and elected a Board of
Directors controlled by him; and that he was
illegally dismissed as manager, without giving
him the opportunity to be heard first.
 Dy denied the charge of illegal dismissal
and pointed out that Vailoces’ position was an
elective one, and he was not re-elected as bank
manager because of the Board’s loss of
confidence in him brought about by his
absenteeism and negligence in the
performance of his duties
 The Executive Labor Arbiter ruled that
Vailoces was illegally dismissed because he was
not afforded due process of law. NLRC affirmed
the decision of the Labor Arbiter because of the
appeal of the petitioners was filed late.
Issue: Whether the election of the Directors were
validly held
HELD: YES
Under PD No. 902-A, “Controversies in the election
or appointments of directors, trustees, officers or
managers of such corporations, partnerships or
associations, are explicitly declared to be within the
original and exclusive jurisdiction of the Securities
and Exchange Commission.”
In the CAB, it shows that the controversy between
the parties is intra-corporate in nature because it
revolves around the election of directors, officers or
managers of the Rural Bank of Ayungon, the
relation between and among its stockholders, and
between them and the corporation. It is well settled
that the decision of a tribunal not vested with
appropriate jurisdiction is null and void.
Therefore, the judgment of the Labor Arbiter and
the NLRC are void for lack of jurisdiction.
WHEREFORE, PETITION IS GRANTED
ESPINO vs NLRC and PAL (1995)
FACTS:
 Petitioner Leslie W. Espino was the Exec.
Vice President-Chief Operating Officer of
respondent Phil Airlines (PAL) when his service
was terminated in 1990 as a result of the
findings of the panels created by then President
Corazon C. Aquino to investigate the
administrative charges filed against him. It
appears that petitioner and other several senior
officers of PAL were charged for their
involvement in 4 cases, labeled as “Goldair,”
“Robelle,” “Kabash/Primavera,” and “Middle
East.”
 The PAL Board of Directors issued separate
resolutions wherein Espino was considered
resign from the service effective immediately
for loss of confidence
 Espino filed a complaint for “illegal
dismissal” against PAL with the NLRC,
Arbitration Branch, NCR.
 PAL argued that board resolutions cannot be
reviewed by the NLRC and that the recourse of
the petitioner Espino should have been
addressed by way of appeal, to the OP.
 Labor Arbiter Cresencio J. Ramos rendered a
decision in favor of petitioner Espino
 PAL asserted that the Labor Arbiter’s
decision is null and void for lack of jurisdiction
over the subject matter as it is the SEC, and not
the NLRC which has jurisdiction over involving
dismissal or removal of corporate officers.
 NLRC promulgated a resolution and this
time ruled in favor of PAL on the ground of lack
of jurisdiction
 Petitioner Espino contended that it is the
NLRC that has jurisdiction over the case as it
involves the termination of a regular employee
and involves claim for backwages and other
benefits and damages
Issue: Whether the NLRC has jurisdiction over the
complaint filed by the petitioner for illegal
dismissal
HELD: NO
Under P.D. No. 902-A, it is the Securities and
Exchange Commission and not the NLRC that has
original and exclusive jurisdiction over cases
involving the removal from employment of
corporate officers. Under the said decree, the SEC
has the exclusive and original jurisdiction to hear
and decide cases involving “Controversies in the
election or appointments of directors, trustees,
officers or managers of such corporations,
partnerships or associations.”
It has been ruled that a corporate officer’s
dismissal is always a corporate act and/or an intra-
corporate controversy and that nature is not
altered by the reason or wisdom which the Board
of Directors may have in taking such action.
Evidently, this intra-corporate controversy must be
place under the specialized competence and
expertise of the SEC.
The fact that petitioner sought payment of his
backwages, other benefits, as well as damages
and attorney's fees in his complaint for illegal
dismissal will not operate to prevent the SEC from
exercising its jurisdiction under PD 902-A. As to the
contention of Espino that PAL is estopped from
questioning the jurisdiction of the NLRC, it is well-
settled that jurisdiction over the subject matter is
conferred by law and the question of lack of
jurisdiction may be raised anytime even on appeal.
WHERFORE, PETITION IS DENIED
MAINLAND CONSTRUCTION CO., INC. vs
MOVILLA (1995)
FACTS:
 Ernest Movilla, who was a CPA during his
lifetime, was hired by Mainland in 1977.
Thereafter, he was promoted to the position of
Administrative Officer. He has a monthly salary
of P4,700.00/month and he was registered with
SSS as an employee of petitioner corporation
 In 1991, The DOLE conducted a routine
inspection on petitioner corporation and found
that it committed some irregularities in the
conduct of its business. On the basis of its
findings, DOLE ordered petitioner corporation
to pay its 13 employees, which included
Movilla, an amount representing their
salaries, holiday pay, service incentive leave
pay differentials, unpaid wages and 13th month
pay. All the employees listed in the DOLE’s
order were paid by petitioner except
Movilla.
 Movilla filed a case against petitioner with
the DOLE in Davao City. However, in 1992,
Movilla died while the case was being tried.
Hence, he was substituted by his heirs, private
respondents herein.
  The Labor Arbiter dismissed the complaint
on the ground that the controversy is intra-
corporate in nature hence it is the SEC who has
jurisdiction over and not the Labor Arbiter.
 On appeal, the NLRC reversed the Labor
Arbiter and ruled that the case was one which
involved a labor dispute, thus the NLRC has
jurisdiction to resolve the case
Issue: Whether the NLRC has jurisdiction over the
controversy and not the SEC
HELD: YES
The NLRC has jurisdiction over the case. The fact
that the parties involved in the controversy are all
stockholders and the corporation does not
necessarily place the dispute within the jurisdiction
of SEC. In order that the SEC can take cognizance
of a case, the controversy must pertain to factors
such as the status or relationship of the parties or
the nature of the question that is the subject of
their controversy. Furthermore, it does not
necessarily follow that every conflict between
corporation and its stockholders can only be
resolve by the SEC.
In the CAB, the claim for unpaid wages and
separation pay involves a labor dispute. It does not
involve an intra-corporate matter, even when it is
between a stockholder and a corporation. It relates
to an ER-EE relationship which is distinct from the
corporate relationship of one with the other.
Therefore, since the complaint of Movilla involves a
labor dispute, it is the NLRC which has jurisdiction
over the CAB.
WHEREFORE, PETITION IS DENIED
PEPSI-COLA BOTTLING COMPANY vs HON.
MARTINEZ (1982)
FACTS:
 Respondent Abraham Tumala, Jr. was
salesman petitioner company in Davao City. In
the annual “Sumakwel” contest conducted by
the company, he was declared the winner of the
“Lapu-Lapu Award” for his performance as top
salesman of the year, an award which entitled
him to a prize of a house and lot. Petitioner
company, despite demands, have unjustly
refused to deliver said prize.
 It was alleged that in 1980, petitioner
company, in a manner oppressive to labor and
without prior clearance from the Ministry of
Labor, arbitrarily and illegally terminated his
employment. Hence, Tumala filed a complaint in
the CFI Davao and prayed that petitioner be
ordered to deliver his prize of house and lot or
its cash equivalent, and to pay his back salaries
and separation benefits.
 Petitioner moved to dismiss the complaint
on grounds of lack of jurisdiction. Respondent
Tumala maintains that the controversy is triable
exclusively by the court of general jurisdiction
Issue: Whether it is the court of general
jurisdiction and not the Labor Arbiter that has
exclusive jurisdiction over the recovery of unpaid
salaries, separation and damages
HELD: NO
SC ruled that the Labor Arbiter has exclusive
jurisdiction over the case. Jurisdiction over the
subject matter is conferred by the sovereign
authority which organizes the court; and it is given
by law. Jurisdiction is never presumed; it
must be conferred by law in words that do
not admit of doubt.
Under the Labor Code, the NLRC has the exclusive
jurisdiction over claims, money or otherwise,
arising from ER-EE relations, except those
expressly excluded therefrom. The claim for the
said prize unquestionable arose from an ER-EE
relation and, therefore, falls within the coverage of
P.D. 1691, which speaks of “all claims arising from
ER-EE relations, unless expressly excluded by this
Code. To hold that Tumala’s claim for the prize
should be passed upon by the regular courts of
justice would be to sanction split jurisdiction and
multiplicity of suits which are prejudicial to the
orderly of administration of justice.
WHEREFORE, PETITION IS GRANTED.
SAN MIGUEL CORP. vs NLRC (1988)
FACTS:
 Petitioner San Miguel Corporation (SMC)
sponsored an Innovation Program which grant
cash rewards to all “SMC employees who
submit to the corporation ideas and
suggestions found to beneficial to the
corporation.
 Private Respondent Rustico Vega, who is a
mechanic in the Bottling Department of the
SMC submitted an innovation proposal which
supposed to eliminate certain defects in the
quality and taste of the product “San Miguel
Beer Grande.”
 Petitioner Corporation did not accept the
said proposal and refused Mr. Vega’s
subsequent demands for cash award under the
innovation program. Hence, Vega filed a
complaint with the then Ministry of Labor and
Employment in Cebu. He argued that his
proposal had been accepted by the methods
analyst and was implemented by the SMC and
it finally solved the problem of the Corporation
in the production of Beer Grande.
 Petitioner denied of having approved Vega’s
proposal. It stated that said proposal was
turned down for “lack of originality” and the
same, even if implemented, could not achieve
the desire result. Further, petitioner
Corporation alleged that the Labor Arbiter had
no jurisdiction.
 The Labor Arbiter dismissed the
complaint for lack of jurisdiction because the
claim of Vega is “not a necessary incident of his
employment” and does not fall under Article
217 of the Labor Code. However, in a gesture
of compassion and to show the government’s
concern for the working man, the Labor Arbiter
ordered petitioner to pay Vega P2,000 as
“financial assistance.” Both parties assailed
said decision of the Labor Arbiter. The NLRC
set aside the decision of the Labor Arbiter and
ordered SMC to pay complainant the amount of
P60,000
Issue: Whether the Labor Arbiter and the
Commission has jurisdiction over the money claim
filed by private respondent
HELD: NO
The Labor Arbiter and the Commission has no
jurisdiction over the money claim of Vega.
The court ruled that the money claim of private
respondent Vega arose out of or in connection with
his employment with petitioner. However, it is not
enough to bring Vega’s money claim within the
original and exclusive jurisdiction of Labor Arbiters.
In the CAB, the undertaking of petitioner SMC to
grant cash awards to employees could ripen into an
enforceable contractual obligation on the part of
petitioner SMC under certain circumstances.
Hence, the issue whether an enforceable contract
had arisen between SMC and Vega, and whether it
has been breached, are legal questions that labor
legislations cannot resolved because it’s recourse is
the law on contracts.
Where the claim is to be resolved not by reference
to the Labor Code or other labor relations statute or
a collective bargaining agreement BUT by the
general civil law, the jurisdiction over the dispute
belongs to the regular courts of justice and not to
the Labor Arbiter and NLRC.
WHEREFORE, PETITION IS GRANTED
SUARIO vs BPI (1989)
FACTS:
 Petitioner Leonardo D. Suario was the head
of the loan section of respondent BPI in 1976.
During his employment he pursued his studies
of law with the consent of the BPI
 Sometime in March 1976, Suario verbally
requested the then VP and Branch Manager, Mr.
Armando N. Guilatico, for a 6-month leave of
absence without pay in order for him to take the
pre-bar review in Manila. Mr. Guilatico informed
Suario that there would be no problem as to the
requested leave of absence. Sometime in May
1976, Suario received a verbal notice from the
new Branch Manager, Mr. Vicente Casino, that
he was approved only a 30 day LOA. However,
Mr Guilatico, then assigned in Head Office as VP
advised Mr. Casino to inform Suario to avail the
30-day LOA and proceed to Manila since the
request would be ultimately granted. Suario
availed the 30-day LOA and proceeded to
Manila. During the 1st week of August, he
received a letter ordering him to report back for
work since his request was disapproved. He
decided not to report back because of the
considerable expenses already incurred in
Manila. Hence, he received a application for a
clearance to terminate on the ground of
resignation/or abandonment. Suario failed to
file his opposition because he was busy taking
up the review
 During the 1st week of December 1976,
Suario went to respondent BPI but was verbally
informed that he was already dismissed. He
wrote a letter to the respondent bank
requesting for a written and formal advise as to
his real status. The lawyers of BPI replied that
his services is terminated. Therefore, Suario
filed a complaint for separation pay, damages
and attorney’s fees against the BPI on the
ground that he was illegally dismissed.
 The Labor Arbiter ordered BPI to pay
Suario’s claim for separation pay. His claim for
damages and attorney’s fee were dismissed for
lack of merit
 On appeal, NLRC affirmed the decision of
the Labor Arbiter
Issue1: Whether NLRC has no authority to
entertain claims for moral and other forms of
damages
HELD:NO
P.D. 1691, a decree which substantially reenacted
Article 217 of the Labor Code in its original form,
nullified P.D. 1367 and restored to the Labor
Arbiters and the NLRC their jurisdiction to award all
kinds of damages in cases arising from ER-EE
relationship.
Issue2: Whether petitioner Suario is entitled to his
claim for moral damages
HELD: NO
Although it is already settled that Labor Arbiters
are allowed to award moral and other forms of
damages arising from ER-EE relations, it is
consistently ruled that in the absence of a wrongful
act or omission or of fraud or bad faith, moral
damages cannot be awarded
The SC did not find any bad faith or fraud on the
part of the bank officials who denied the
petitioner’s request for 6 months’ leave of absence
without pay. He was merely given personal
assurances which could be reconsidered in later
developments. There is no evidence that they
meant to deceive the petitioner.
Therefore, the fact that petitioner’s request was
denied, does not entitle him to damages.
WHEREFORE, PETITION DENIED.
SOCO vs MERCANTILE CORP. OF DAVAO
(1987)
FACTS:
 Respondent Mercantile Corp is engaged in
the sale and distribution of Ice Cream in Davao.
Petitioner, who was employed as driver of
respondent’s delivery van, was the President
MERCO Employees Labor Union, an affiliate of
the Federation of Free Workers (FFW).
 An investigation was conducted due to
reports that Soco was carrying on his union
activities during working hours. It appears that
on January 1979, Soco was ordered to deliver
ice cream at Imperial Hotel and Your Goody
Mart, but he deviated from his usual route and
went to his co-employee, who was then off
duty. The personnel officer advised Soco to
report to his office to explain his unauthorized
deviation but Soco did not comply. MERCO
wrote to FFW asking for a grievance conference
but Soco refused to attend in his belief that
such in unnecessary. Hence, MERCO suspended
Soco for 5 days for violation of Company Rule
No. 19(a).
 On February 13, 1979, Soco, after making
deliveries of ice cream, went to the Office of
the SPFL Union. The Manager of MERCO saw
the company vehicle parked along the street.
He called two of his co-employees and took out
the rotor of the van. When Soco came out of
the building, he was unable to start the engine
and called for company assistance. Again, he
was advised to report to the office to explain
but refused to do so. He also refused to attend
in the grievance conference.
 Soco filed a complaint for Unfair Labor
Practice against MERCO alleging that the 5
days suspension imposed on him was on
account of his union activities. On the other
hand, MERCO filed an “application for
clearance to terminate the services of Soco.”
These 2 cases were consolidated and tried
jointly as agreed by the contending parties
 The Regional Director granted MERCO’s
application to terminate employment of
petitioner and dismissed the Soco’s complaint
 for unfair labor practice
 On appeal, the Deputy Minister of Labor
affirmed
 Petitioner Soco argued that under Policy No.
6 of the Ministry of Labor and Employment
(MOLE), the Regional Director has no
jurisdiction to hear and decide unfair labor
practice cases because such belongs to the
Conciliation Section of the Regional Office of the
MOLE. In short, such cases should be first
resolved by the Labor Arbiter and not the
Regional Director. Furthermore, Soco asserts
that the Deputy Minister of Labor violated the
constitutional provision of security of tenure of
employees and that assuming that he violated
the company rule, he cannot be dismissed
because his violation only minimal and did not
hamper the operations of MERCO.
Issue1: Whether the Regional Director has no
authority to decide the unfair labor practice cases
HELD1: NO
After voluntarily submitting a cause and
encountering an adverse decision on the merits,
it’s too late for the loser to question the jurisdiction
or the power of the court.
In the CAB, in the initial hearing conducted by the
Regional Director, it was agreed by the parties to
consolidate the 2 cases considering that both cases
concern the same parties and the issues involved
are interrelated. Petitioner Soco obviously accepted
the jurisdiction of the Regional Director by
presenting his evidence. By having asked for
affirmative relief, without challenging the Regional
Director's power to hear and try his complaint for
unfair labor practice, he cannot rightfully now
challenge the resolution made in said cases by the
same Director, based on the latter's alleged lack of
jurisdiction.
Issue2: Whether petitioner can avail the security
of tenure
HELD2:
It is the prerogative of an employer company to
prescribe reasonable rules and regulations
necessary or proper for the conduct of its business
and to provide certain disciplinary measures in
order to implement said rules and to assure that
the same would be complied with. A rule
prohibiting employees from using company
vehicles for private purpose without authority from
management is, from our viewpoint, a reasonable
one.
The Court is not unmindful of the fact that
petitioner has, as he says, been employed with
petitioner Company for eighteen (18) years. On this
singular consideration, the Court deems it
proper to afford some equitable relief to
petitioner due to the past services rendered
by him to MERCO. Thus, it is but appropriate that
petitioner should be given by respondent MERCO,
separation pay, equivalent to one month salary for
every year of his service to said Company.
WHEREFORE, PETITION IS DENIED but MERCO
is nevertheless, ordered to grant Soco his
separation pay.
DEPARTMENT OF AGRICULTURE vs NLRC
(1993)
FACTS:
 Petitioner DOA and Sultan Security Agency
entered into a contract for security services to
be provided by the latter to the said
government entity. In September 13, 1990,
several guards of the Sultan Security Agency
filed a complaint for underpayment of wages,
non-payment of 13th month pay, uniform
allowances, night shift differential pay, holiday
pay and overtime pay, as well as for damages
against the DOA and the Sultan Security
Agency before the Regional Arbitration Branch
in Cagayan De Oro City
 The Labor Arbiter found DOA jointly and
severally liable with Sultan Agency for the
payment of money claim of the guards
 The Labor Arbiter issued a “Writ of
Execution” commanding the City Sheriff to
enforce and execute the judgment against the
DOA and Sultan. The City Sheriff levied on
execution 3 motor vehicles of the DOA
 Petitioner DOA filed a “petition for
injunction, prohibition and mandamus, with
prayer for preliminary injunction” with the
NLRC Cagayan De Oro. It argued that the writ
of execution was effected without the Labor
Arbiter having duly acquired jurisdiction over
the DOA. Hence, its decision was null and void.
It also pointed out that the attachment of its
property would jeopardize its governmental
functions to the prejudice of the public good
 NLRC --- dismissed the petition for
injunction for lack of basis and a Temporary
Stay of Execution is issued for a period of 2
months but not extendible.
 DOA charges NLRC for grave abuse of
discretion for refusing to quash the writ of
execution. It argued that money claims against
the Department falls under the exclusive
jurisdiction of the Commission on Audit.
Further, the DOA asserts that the NLRC has
disregarded the cardinal rule on the non-
suability of the State.
NLRC, on the other hand, argue that petitioner has
impliedly waived its immunity from suit by
concluding a service contract with Sultan Security
Agency
Issue: Whether the DOA can be sued
HELD:
Under the Constitution, it says that “the State
cannot be sued without its consent.” This simply
means that a sovereign is exempt from suit on the
ground that there can be no legal right as against
the authority that makes the law on which the
right depends. This doctrine is also called “the
royal prerogative of dishonesty” because it grants
the State the prerogative to defeat any legitimate
claim against it by simply invoking its non-suability
This rule is not really absolute for it does not say
that state may not be sued under any
circumstances. The State’s consent may be given
expressly or impliedly. Express consent may be
made through a general law or special law. On the
other hand, Implied consent is when the State
itself commences litigation, thus opening itself to a
counterclaim, or when it enters into a contract
In the CAB, the claims of the security guards
arising from the Contract for Service, clearly
constitute money claims. Under Act No. 3083, a
general law, the State consents and submits to be
sued upon any moneyed claim involving liability
arising from contract, express or implied. However,
the money claim must first be brought to the
Commission on Audit
WHEREFORE, PETITION IS GRANTED
 HAGONOY WATER DISTRICT vs NLRC (1988)
FACTS:
 Private Respondent Dante Villanueva was
employed as service foreman by petitioner
Hagonoy when he was indefinitely suspended
and thereafter dismissed for abandonment of
work and conflict of interest
 Villanueva filed a complaint for illegal
dismissal, illegal suspension and underpayment
of wages and emergency cost of living
allowance against Hagonoy with the Ministry of
Labor and Employment in San Fernando,
Pampanga
 Petitioner Hagonoy moved for dismissal on
the ground of lack of jurisdiction. Being
government entity, its personnel are governed
by the provisions of the Civil Service Law and
not by the Labor Code. And the protests
concerning the lawlessness of dismissal from
service fall within the jurisdiction of the Civil
Service Commission and not the Ministry of
Labor and Employment.
 The Labor Arbiter rendered a decision on
favor of Villanueva
 NLRC affirmed the decision of the Labor
Arbiter. A “Writ of Execution” was issued by the
Labor Arbiter to garnish petitioner Hagonoy’s
deposits with the planters Development Bank.
 Hagonoy filed a “Motion to Quash the Writ of
Execution with Application for Writ of
Preliminary Injunction”. NLRC denied the
application.
Issue: Whether local water districts are GOCC
whose employees are subject to the provisions of
the Civil Service Law
HELD: YES
The Labor Arbiter, in asserting that it has
jurisdiction over the employees of Hagonoy, relied
on P.D. No. 198, known as “Provincial Water Utilities
Act of 1973” which exempts employees of water
districts from the application of the Civil Service
Law. However, the Labor Arbiter failed to take into
account that P.D. 1479 wiped away the said
exemption
Moreover, the NLRC relied upon Article 9, Section 2,
of the 1987 Constitution which provides that:
“[T]he Civil Service embraces ... government
owned or controlled corporations with original
charters.”
At the time the dispute in the CAB arose, and at the
time the Labor Arbiter rendered its decision (which
is on March 17, 1986), the applicable law is that the
Labor Arbiter has no jurisdiction to render a
decision that he in fact rendered. By the time the
NLRC rendered its decision (August 20, 1987), the
1987 Constitution has already come into effect. The
SC believes that the 1987 Constitution does not
operate retroactively as to confer jurisdiction upon
the Labor Arbiter to render a decision, which was
before outside the scope of its competence.
Therefore, a decision rendered by the Labor Arbiter
without jurisdiction over the case is a complete
nullity, vesting no rights and imposing no liabilities.
Villanueva, if he so wishes, may refile this
complaint in an appropriate
WHEREFORE, PETITION IS GRANTED
Sadol vs. Pilipinas Kao, Inc., et al (1990)
Facts:
Petitioner was dismissed from work by private
respondents who are owners of Vega & Co., private
recruitment agency, with assignment at
respondent PKI. He filed a complaint for
reinstatement and backwages with the DOLE in
Cagayan de Oro City. The Labor Arbiter ruled in
favor of Sadol and ordered respondents to pay
petitioner’s separation pay “at one month for
every year of service.” Both parties appealed but
respondent’s appeal was filed out of time. The
appeal of respondent was dismissed for having
been filed out of time.
Issue: Whether the respondent has lost the right
to appeal
HELD: YES
A party, who failed to appeal on time from a
decision of the Labor Abiter to the NLRC, may still
participate in a separate appeal timely filed by the
adverse party by a Motion for Reconsideration of
the NLRC decision. In the CAB, there is no question
that respondents failed to file a timely appeal from
the decision of the Labor Arbiter. Hence, having
lost the right to appeal, the respondent may
choose to file a Motion for Reconsideration instead.
St. Martin Funeral Homes vs. NLRC and B.
Aricayos (1998)
Facts:
P. respondent was dismissed from work by
petitioner for allegedly misappropriating
P38,000.00. Hence, a complaint was filed for illegal
dismissal before the NLRC. Petitioner argued that
respondent was not its employee. The Labor
Arbiter ruled in favor of petitioner declaring that no
employer-employee relationship between the
parties and therefore his office had no jurisdiction
over the case. On appeal, the NLRC set aside the
questioned decision and remanding the case to the
labor arbiter for immediate appropriate
proceedings.
Issue: Whether or not the decision of the NLRC
are appealable to the Court of Appeals.
Held: YES
The Supreme Court clarified and stressed that ever
since appeals from the NLRC to the Supreme Court
were eliminated, the legislative intendment is that
the special civil action of certiorari was and still the
proper vehicle for judicial review of decisions of the
NLRC. The concurrent original jurisdiction of the
Supreme Court can be availed of only under
compelling and exceptional circumstances.
To further explain, (1) the way to review NLRC
decision is through the special civil action of
certiorari under Rule 65; (2) the jurisdiction of such
action belongs both to the SC and CA; but (3) in
line with the doctrine of hierarchy, of courts, the
petition should be initially presented to the lower
court of the two courts, that is the Court of
Appeals.
Sunshine Transportation Inc. vs NLRC and R.
Santos (1996)
Facts:
P. respondent Santos was dismissed from work as a
bus driver by Petitioner for failing to submit a
written explanation why he failed to report for his
scheduled trip. Respondent filed a complaint with
the Labor Arbiter for illegal dismissal. The Labor
Arbiter ruled in favor of the petitioner and
dismissed the complaint. This was affirmed by the
NLRC but granted Santps money claims.
Unsatisfied with the decision, petitioner elevated
the case to the SC charging the NLRC with grave
abuse of discretion.
Issue: Whether the petitioner may avail the
special civil action for certiorari?
Held: NO
A petition for certiorari should be preceded by
exhaustion of administrative remedies. Under said
doctrine, a motion for reconsideration must first be
filed before the special action for certiorari may be
availed of. In the case at bench, the petitioner
make a claim that it filed a motion for the
reconsideration of the challenged decision before it
came to us through this action.
Midas Touch Food Corp. vs NLRC and Iris Fe
Isaac (1996)
Facts:
Respondent Iris Fe Isaac was dismissed as
operations manager by petitioner for alleged lack
of self confidence. Respondent filed a complaint for
illegal dismissal before the Labor Arbiter which
rendered a decision in favor of petitioner finding
the said dismissal to be valid. However, petitioner
was ordered to pay the complainants there
separation pay, etc. Both parties appealed to the
NLRC and the decision of the Labor Arbiter was
reversed, this time ruling in favor of Isaac. Hence,
petitioner elevated the case to the SC assailing the
decision of the NLRC.
Issue: Whether the petitioner may avail the
special civil action for certiorari?
Held: YES
The rule requiring motion for reconsideration
before filing a petition for certiorari “admits of
certain exceptions, among which is the finding that
under the circumstances of the case, a motion for
reconsideration would be useless.”
In this case, the Supreme Court found it quite
impossible for the NLRC to reverse itself under the
foregoing facts and so, a motion for reconsideration
will be deemed useless.
Alindao vs Hon. Hoson (1996)
Facts:
Petitioner applied for employment for Saudi Arabia
through private respondent Hisham General
Services Contractor. She paid a placement fee of
P15,000.00 without receipt. When she arrived in
Saudi arrived in Saudi Arabia, she was made to
work as a domestic helper. Because of unfair
working conditions, she worked at several
residences until she saved enough money to return
home. When she arrived in the Philippines, she filed
with POEA a complaint against Hisham for breach
of contract. The POEA rendered a decision
suspending Hisham and to pay petitioner her
money claims. Hisham appealed to the NLRC and
filed a MFR with the POEA. The NLRC affirmed the
decision of the POEA. Hisham now argues that the
order cannot be enforced because the MFR was still
pending with the POEA. Respondent POEA
administrator Joson find the MFR of Hisham to be
meritorious. Hence, petitioner elevated this case to
the SC
Issue: Whether the petitioner may avail the
special civil action for certiorari without first filing a
motion for reconsideration?
Held: YES
It has been held that the requirement of a motion
for reconsideration may be dispensed with in the
following instances: (1) when the issue raised is
one purely of law; (2) where public interest is
involved; (3) in cases of urgency; and (4) where
special circumstances warrant immediate or more
direct action.
On the other hand, among the accepted
exceptions to the rule on exhaustion of
administrative remedies are: (1) where the
question in dispute is purely a legal one; and (2)
where the controverted act is patently illegal or
was performed without jurisdiction or in excess of
jurisdiction.
The petition involves a pure question of law and
the challenged order is void for want of jurisdiction
on the part of respondent Joson.
Metro Transit Organization vs. CA, et al.
(2002)
Facts:
Respondent Ruperto Evangelista, a cash assistant
in the treasury division of the petitioner, was
dismissed from work for being alleged to be
responsible for the loss of tokens. He was
terminated for lack of trust and confidence.
Evangelista filed a case for illegal dismissal. The
Labor Arbiter ruled in his favor and ordered his
reinstatement with payment of full backwages.
This was affirmed by the NLRC. Hence, petitioner
directly filed with the Court of Appeals a petition
for certiorari under Rule 65. The CA, on the other
hand, affirmed the ruling of both the labor arbiter
and NLRC, holding that a motion for
reconsideration is necessary before resorting to a
petition for certioarari.
Issue: Whether the petitioner may elevate the
case before the CA without first filing a motion for
reconsideration with the NLRC?
Held: NO
Generally, certiorari as a special civil action will not
lie unless a motion for reconsideration is filed
before the respondent tribunal to allow it an
opportunity to correct its imputed errors. However,
the following have been recognized as exceptions
to the rule:
(1) when the issue raised is one purely of law; (2)
where public interest is involved; (3) in cases of
urgency; and (4) where special circumstances
warrant immediate or more direct action.
On the other hand, among the accepted
exceptions to the rule on exhaustion of
administrative remedies are: (1) where the
question in dispute is purely a legal one; and (2)
where the controverted act is patently illegal or
was performed without jurisdiction or in excess of
jurisdiction.
To dispense with a motion for reconsideration,
there must a be concrete, compelling and valid
reason for the failure to comply with the
requirement.
MAI Philippines, Inc. vs. NLRC, et al (1987)
Facts:
The Regional Director declared that petitioner
illegally dismissed its Customer Engineering
Manager Rodolfo Nolasco. It ordered petitioner to
reinstate Nolasco and to pay him his full
backwages. The petitioner complied to pay
Nolasco but declined to reinstate him. Nolasco
filed a complaint with the Labor Arbiter to recover
damages. The Labor Arbiter dismissed the
complaint for being a duplication of the earlier
labor case involving the same parties. Nolasco
received the notice of the Labor Arbiter’s decision
12 days after. He filed an appeal before the NLRC.
Petitioner opposed the appeal and contended that
it should be dismissed because it was filed out of
time. NLRC ruled that since the order of the
Regional Director requiring reinstatement of
Nolasco with full back wages had already become
final and executory, attacks against that order "on
the merits or in substance can no longer be
entertained
Issue: Whether the NLRC committed grave abuse
of discretion
Held: YES
The NLRC committed grave abuse of discretion in
refusing to take account of the fact, as shown in
the record, that the appeal of Nolasco was late
because it was not filed within the reglementary
period
No acceptable reason has been advanced by
Nolasco, and none appears upon the record, to
excuse his tardiness in the taking of the appeal.
Petitioner's opposition to the appeal should have
been sustained, and the NLRC should never have
taken cognizance of the appeal.
PAL vs. NLRC (1989)
Facts:
Private respondent Dolina completed his training
course with PAL as pilot. He was given temporary
appointment for 6 months as Limited First Officer.
He applied for regularization as First Officer and
undergoes the required psychological examination
wherein his "Adaptability Rating" was found to be
"unacceptable" and the Pilot Acceptance
Qualifications Board finds him not qualified for
regular employment in the Company. Dolina was
placed under preventive suspension; hence he filed
a complaint for illegal dismissal.
The Labor Arbiter found the dismissal of Dolina
justified, hence, PAL discontinued the payment of
Dolina’s salary. Dolina objected on the ground that
the discontinuance an “earlier agreement” that he
would be kept in the payroll until the case was
finally resolved by arbitration. On appeal, the NLRC
affirmed the decision of the Labor Arbiter but
ordered the company to continue paying Dolina’s
salary since the arbitration case was not yet over.
Issue: Whether the NLRC committed grave abuse
of discretion in holding that Dolina was entitled to
his salaries "until this case is finally resolved."
Held: YES
The order of the NLRC to continue paying Dolina his
salary was an abuse of discretion. The clause
"pending final resolution of the case by arbitration"
should be understood to be limited only to the
proceedings before the Labor Arbiter, such that
when the latter rendered his decision, the case was
finally resolved by arbitration.
Pacific Mills, Inc. vs. NLRC (1990)
Facts:
In the case of Pacific Mills, Inc. vs. NLRC (1988), the
SC dismissed the petition on the ground that
petitioner failed to show that the NLRC committed
grave abuse of discretion. The entry of judgment
having been effected, the NLRC, in the process of
execution, made a computation of the award to the
private respondents. Petitioner filed a “motion to
stay execution/reconsideration citing supervening
events that affect the computation of the award”
as follows:
(1) The computation on separation pay did not
consider the length of service of each complainant
as borne out from the records; (2) The computation
did not consider the wage exemptions granted the
petitioner-respondent company; (3) The
computation included payment of awards to a
respondent who had already been recalled to
active duty, one who was already paid in a case
separately filed, and another who was already
paid; (4) All the capital assets of the petitioner
have already been attached and/or otherwise
foreclosed.
The NLRC denied the motion and ordered
immediate implementation of the partial writ of
execution
Issue: Whether the execution of a final judgment
of the NLRC may be stayed in view of supervening
events.
Held: YES
Generally, one a judgment becomes final and
executory, it canno longer be disturbed, altered or
modified. The principle, however, admits of
exceptions as in cases where, because of
supervening events, it becomes imperative, in the
higher interest of justice, to direct its modification
in order to harmonize the disposition with the
prevailing circumstances or whenever it is
necessary to accomplish the aims of justice.
There can be no question that the supervening
events cited by petitioner would certainly affect
the computation of the award in the decision of the
NLRC. It is the duty of the NLRC to consider the
same and inquire into the correctness of the
execution, as such supervening events may affect
such execution.
Yupangco Cotton Mills, Inc. vs. CA (2002)
Facts:
Petitioner contended that a sheriff of the NLRC
“erroneously and unlawfully levied” certain
properties which it claims as its own. It filed a 3rd
party claim with the Labor Arbiter and recovery of
property and damages with the RTC. The RTC
dismissed the case. In the CA, the court dismissed
the petition on the ground of forum shopping and
that the proper remedy was appeal in due course,
not certiorari or mandamus. Petitioner filed a MFR
and argued that the filing of a complaint for accion
reinvindicatoria with the RTC was proper because it
is a remedy specifically granted to an owner
(whose properties were subjected to a writ of
execution to enforce a decision rendered in a labor
dispute in which it was not a party). The MFR was
denied. Hence, petitioner filed this appeal.
Issue: Whether the CA has jurisdiction over the
case
Held: YES
A third party whose property has been levied upon
by a sheriff to enforce a decision against a
judgment debtor is afforded with several
alternative remedies to protect its interests. The
third party may avail himself of alternative
remedies cumulatively, and one will not preclude
the third party from availing himself of the other
alternative remedies in the event he failed in the
remedy first availed of.
Thus, a third party may avail himself of the
following alternative remedies:
 a) File a third party claim with the sheriff of the
Labor Arbiter, and
b) If the third party claim is denied, the third
party may appeal the denial to the NLRC.
Even if a third party claim was denied, a third
party may still file a proper action with a
competent court to recover ownership of the
property illegally seized by the sheriff.
The filing of a third party claim with the Labor
Arbiter and the NLRC did not preclude the
petitioner from filing a subsequent action for
recovery of property and damages with the
Regional Trial Court. And, the institution of such
complaint will not make petitioner guilty of forum
shopping.
Nova vs. Judge Sancho Dames II (2001)
Facts:
Complainant Greogorio S. Nova filed with the NLRC
complaint for illegal dismissal against R.A.
Broadcasting Corporation represented by its Vice
President for Operations Vilma J. Barcelona and
Station Manager Deo Trinidad. The Labor Arbiter
rendered judgment in favor of Nova and ordered
R.A. Broadcasting to pay his separation pay and
full backwages. NLRC affirmed such decision and
denied the MFR filed by R.A. Construction on the
ground that it was filed out of time. The NLRC
issued an alias writ of execution and the property
of Sps. Barcelona was scheduled in an auction sale.
The said spouses filed with the RTC Camarines
Norte action for damages with prayer of TRO to
restrain the NLRC from conducting the scheduled
public auction. The RTC granted the TRO. Nova
argued that under the Labor Code, issuance of the
TRO or preliminary injunction in a case arising from
labor dispute is prohibited.
Issue: Whether the RTC cannot issue injunction
against NLRC?
Held: YES
Regular courts have no jurisdiction to hear and
decide questions which arise and are incidental to
the enforcement of decisions, orders or awards
rendered in labor cases by appropriate officers and
tribunals of the DOLE. Corollarily, any controversy
in the execution of the judgment shall be referred
to the tribunal which issued the writ of execution
since it has the inherent power to control its own
processes in order to enforce its judgments and
orders.
True, an action for damages lies within the
jurisdiction of a regional trial court. However, the
RTC has no jurisdiction to issue a TRO in labor
cases. The SC finds respondent Judge guilty of
gross ignorance of the law.
TOYOTA MOTOR PHIL. CORP vs. TOYOTA
MOTOR PHIL. CORP LABOR UNION (1997)
FACTS:
Toyota Motor Phil Corp. Labor Union filed a petition
for certification election with Dept. of Labor, for all
rank-and-file employees of the petitioner Toyota
Motor Corp. Petitioner seek the denial of the
holding of the certification election on 2 grounds:
(1) the union, being “process of registration” had
no legal personality to file the same as it was not a
legitimate labor organization at the time the
petition was file; and (2) that the union was
composed of both rank-and-file and supervisory
employees in violation of the law. The Med-Arbiter
dismissed the petition for certification election in
favor with the grounds stated by petitioner.
However, on appeal, the Secretary of Labor set
aside the decision of the Me-Arbiter and ordered
the holding of the certification election contending
that the union was already a legitimate labor
organization at the time of the filing of the petition
evidenced by a certificate of registration.
Issue: Whether the Secretary of Labor committed
grave abuse of discretion in directing the
certification election
Held: YES. Petition Granted.
A labor organization composed of both rank-and-
file and supervisory employees is no labor
organization at all. It cannot, for any guise or
purpose, be a legitimate labor organization. Not
being one, an organization which carries a mixture
of rank-and-file and supervisory employees cannot
possess any of the rights of a legitimate labor
organization, including the right to file a
petition for certification election for the
purpose of collective bargaining.
In the given case, as respondent union's
membership list contains the names of at least 27
supervisory employees in Level Five positions, the
union could not, prior to purging itself of its
supervisory employee members, attain the status
of a legitimate labor organization. Not being one, it
cannot possess the requisite personality to file a
petition for certification election. The union's
composition being in violation of the Labor Code's
Prohibition of unions composed of supervisory and
rank-and-file employees, it could not possess the
requisite personality to file for recognition as a
legitimate labor organization.
ATLAS LITHOGRAPHIC SERVICE vs.
LAGUESMA (1992)
FACTS:
A petition for certification election was filed by
private respondents “Kampil-Katipunan” on behalf
of the “supervisors union”, a union where the
supervisory, administrative personnel, production,
accounting and confidential employees of the
petitioner were affiliated. Petitioner opposed the
petition on the ground that Kampil Katipunan
cannot represent the supervisory employees for
the purpose of collective bargaining because said
Kampil Katipunan also represents the rank-and-file
employees union. The Med-Arbiter rendered a
decision in favor of the private respondent. On
appeal, the Secretary of Labor affirmed the
decision of the Med-Arbiter. Petitioner now argue
that to allow the supervisory employees to affiliate
with the Kampil Katipunan is tantamount to
allowing the circumvention of the “principle of the
separation of unions” under Art. 245 of the Labor
Code.
Issue: Whether a local union of supervisory
employees may be allowed to affiliate with a
national federation of labor organizations of rank-
and-file employees for purpose of CBA?
Held: NO. Petition Granted
We agree with the petitioner's contention that a
conflict of interest may arise in the areas of
discipline, collective bargaining and strikes.
Members of the supervisory union might refuse to
carry out disciplinary measures against their co-
member rank-and-file employees.
Under Article 245 of the Labor Code as
amended by Rep. Act No. 6715 provides:
Art. 245. Ineligibility of managerial employees
to join any labor organization: right of
supervisory employees. — Managerial
employees are not eligible to join, assist or form
any labor organization. Supervisory employees
shall not be eligible for membership in a labor
 organization of the rank-and-file employees but
may join, assist or form separate labor
organizations of their own.
The Court construes Article 245 to mean that
supervisors shall not be given an occasion to
bargain together with the rank-and-file against the
interests of the employer regarding terms and
conditions of work. Thus, if the intent of the law is
to avoid a situation where supervisors would merge
with the rank and-file or where the supervisors'
labor organization would represent conflicting
interests, then a local supervisors' union should not
be allowed to affiliate with the national federation
of union of rank-and-file employees where that
federation actively participates in union activity in
the company.
SOUTHERN PHILIPPINES FEDERATION OF
LABOR vs. HON. FERRER-CALLEJA (1989)
FACTS:
Petitioner SPF filed with the DOLE a petition for
certification election among the rank-and-file
employees of private respondent Apex Minong Co.
The Med-Arbiter granted the petition and directed
the holding of the certification election. During the
pre-election conference, petitioner union objected
to the inclusion in the list of workers prepared by
Apex the following: (1) employees occupying the
positions of Supervisor I, II and III; (2) employees
under confidential/special payrolls; and (3)
employees who were not paying dues. According to
petitioner, the mentioned employees were
disqualified from participating in the certification
election since the Supervisors were managerial
employees while the last two were disqualified by
virtue of their non-membership in the Union and
their exclusion from the benefits of the collective
bargaining agreement. After the certification of
election was conducted, respondent Union filed an
“urgent motion to open the challenged ballots.”
The Med-Arbiter granted the motion and directed
the challenged ballots be opened and inventoried.
Petitioner appealed to the BLR wherein respondent
Director Ferrer-Calleja dismissed said appeal and
affirmed the decision of the Med-Arbiter and
ordered that the 197 ballots should be opened and
canvassed. As a consequence of the opening and
canvass of the challenged ballots, the Med-Arbiter
Issue: Whether respondent Director committed
grave abuse of discretion in not excluding the 197
employees from voting in the certification election
Held: NO
The functions of the questioned positions are not
managerial in nature because they only execute
approved and established policies leaving little or
no discretion at all whether to implement the said
policies or not. The respondent Director, therefore,
did not commit grave abuse of discretion in
dismissing the petitioner's appeal from the Med-
Arbiter's Order to open and count the challenged
ballots in denying the petitioner's motion for
reconsideration and in certifying the respondent
Union as the sole and exclusive bargaining
representative of the rank-and-file employees of
respondent Apex .
As regards the employees in the confidential
payroll, the petitioner has not shown that the
nature of their jobs is classified as managerial
except for its allegation that they are considered by
management as occupying managerial positions
and highly confidential. Neither can payment or
non-payment of union dues be the determining
factor of whether the challenged employees should
be excluded from the bargaining unit since the
union shop provision in the CBA applies only to
newly hired employees but not to members of the
bargaining unit who were not members of the
union at the time of the signing of the CBA. It is,
therefore, not impossible for employees to be
members of the bargaining unit even though they
are non-union members or not paying union dues.
NATIONAL ASSOCIATION OF TRADE UNIONS
vs. HON. TORRES (1994)
FACTS:
Petitioner NATU filed a petition for certification
election to determine the “exclusive bargaining
representative” of respondent’s bank employees
occupying supervisory positions. The Bank moved
to dismiss on the ground that said supervisory
employees were actually managerial/confidential
employees, thus, they are ineligible to join, assist
or form a union. The Med-Arbiter granted the
petition and directed the holding of the
certification election. The Bank appealed to the
Secretary of Labor. Said court partially granted the
appeal ruling that the Department Managers,
Assistant Managers, Branch Managers, Cashiers
and Controllers are declared managerial
employees and cannot join the union of the
supervisors.
Issue: Whether
Held:
Petitioner concludes that subject employees are
not managerial employees but supervisors. Even
assuming that they are confidential employees,
there is no legal prohibition against confidential
employees who are not performing managerial
functions to form and join a union. A confidential
employee is one entrusted with confidence on
delicate matters, or with the custody, handling, or
care and protection of the employer's property.
While Art. 245 of the Labor Code singles out
managerial employees as ineligible to join, assist
or form any labor organization, under the doctrine
of necessary implication, confidential employees
are similarly disqualified.
MERALCO vs. HON. QUISUMBING (1999)
FACTS:
A petition for certification election was filed by the
labor organization of staff and technical employees
of MERALCO seeking to represent regular
employees of MERALCO. MERALCO contended that
those in the Patrol Division and Treasury Security
Service Section, since these employees are tasked
with providing security to the company, they are
not eligible to join the rank and file bargaining unit.
The Med-Arbiter ruled that having been excluded
from the existing Collective Bargaining Agreement
for rank and file employees, these employees have
the right to form a union of their own, except those
employees performing managerial functions. The
Secretary of Labor affirmed said order.
Issue: Whether security guards may join rank-
and-file or supervisors union
Held:
Under the old rules, security guards were barred
from joining a labor organization of the rank and
file, under RA 6715, they may now freely join a
labor organization of the rank and file or that of
the supervisory union, depending on their rank. By
accommodating supervisory employees, the
Secretary of Labor must likewise apply the
provisions of RA 6715 to security guards by
favorably allowing them free access to a labor
organization, whether rank and file or supervisory,
in recognition of their constitutional right to self-
organization.
MARIANO vs. ROYAL INTEROCEAN LINES
(1961)
FACTS
 Petitioner Ermidia A. Mariano was a
stenographer-typist and filing clerk of
respondent when she was dismissed from work.
She sent a letter to the managing directors of
the company in HK through its manager in the
Philippines, respondent J.V. Kamerling. In the
letter, she complained about Kamerling’s
“inconsiderate and untactful attitude” towards
the employees under him and the clients of the
company. Kamerling adviced petitioner that her
letter had been forwarded to the managing
directors in HK and that said directors believed
that it was impossible to maintain her in the
company.
 Petitioner sought reconsideration of her
dismissal from the managing directors in HK but
received no answer to any of her 5 letters.
 The Company finally offered a “compromise
settlement” with the petitioner whereby she
would be paid a sum equivalent to 6 months
salary, provided that she would sign a quitclaim
embodying a provision that she would release
the company from any liability arising from her
employment. Not satisfied with the
compromise, the petitioner filed a complaint for
unfair labor practice against the company.
The CIR rendered judgment holding the
company guilty of unfair labor practice and
ordered them to reinstate petitioner to her
former position.
 The company filed with the SC a petition to
review the decision of the CIR. The SC ruled in
favor of the company. Hence, this appeal.
Issue: Whether the petitioner was guilty of unfair
labor practice in dismissing the respondent
Held: NO. Petition Denied.
As the respondent's dismissal has no relation to
union activities and the charges filed by her against
the petitioner had nothing to do with or did not
arise from her union activities, the dismissal did not
constitute Unfair Labor Practice. Despite the
employees right to self organization, the employer
still retains his inherent right to discipline his
employees, “his normal prerogrative to hire or
dismiss them.” In this case, the court ruled that the
dismissal of the employee was unjustified, but the
employer did not commit Unfair Labor Practice
because the act has no union connection.
WISE AND CO. INC. vs. WISE AND CO. INC.
EMPLOYEES UNION (1989)
FACTS:
 The management issued a Memorandum
Circular introducing a profit-sharing scheme for
its managers and supervisors.
 Respondent Union wrote to petitioner to ask
that the union members be allowed to
participate in the profit-sharing program. The
management denied the request on the ground
that such participation was not provided in the
CBA
 When renegotiation of the CBA was
approaching, the management wrote to the
Union that it was willing to consider including
the union members in the profit-sharing
scheme provided that the negotiations would
be concluded prior to December 1987
 Sometime later, the company distributed
the profit-sharing benefit not only to the
managers and supervisors but also to all rank-
and-file employees not covered by the CBA
because they were excluded from the definition
of bargaining unit.
 This caused the respondent Union to file a
notice of strike alleging that petitioner was
guilty of unfair labor practice because the
union were discriminated against in the grant
of the profit sharing benefits
Issue: Whether the grant by management of
profit sharing benefits to its non-union member
employees is discriminatory against its workers
who are union members and amounts to ULP?
Held: NO. Petition Granted
There can be no discrimination committed by
petitioner as the situation of the union employees
are different and distinct from the non-union
employees. Discrimination per se is not unlawful.
There can be no discrimination where the
employees concerned are not similarly situated.
The grant by petitioner of profit sharing benefits to
the employees outside the "bargaining unit" falls
under the ambit of its managerial prerogative. It
appears to have been done in good faith and
without ulterior motive. More so when as in this
case there is a clause in the CBA where the
employees are classified into those who are
members of the union and those who are not. In
the case of the union members, they derive their
benefits from the terms and conditions of the CBA
contract which constitute the law between the
contracting parties. Both the employer and the
union members are bound by such agreement.
PHIL. GRAPHIC ARTS INC. vs. NLRC (1988)
FACTS:
 In October 1984, petitioner corporation was
forced by economic circumstances to require
its workers to go on mandatory vacation leave
in batches of seven or nine for periods ranging
from 15, 30, to 45 days. The workers were paid
while on leave but the pay was charged against
their respective earned leaves.
 As a result, the private respondents filed
complaints for unfair labor practice and
discrimination.
Issue: Whether the forced vacation leave without
pay constitutes unfair labor practice
Held: NO. Petition Granted
There was no unfair labor practice in this case.
Private respondents never questioned the
existence of an economic crisis but, in fact,
admitted its existence. There is basis for the
petitioner's contentions that the reduction of work
schedule was temporary, that it was taken only
after notice and consultations with the workers and
supervisors, that a consensus was reached on how
to deal with deteriorating economic conditions and
reduced sales and that the temporary reduction of
working days was a more humane solution instead
of a retrenchment and reduction of personnel. The
petitioner further points out that this is in
consonance with the CBA between the employer
and its employees.
Likewise, the forced leave was enforced neither in a
malicious, harsh, oppressive, vindictive nor wanton
manner, or out of malice or spite. Hence, ULP is not
committed.
DABUET vs. ROCHE PHARMACEUTICALS
(1987)
FACTS:
 The petitioners, all officers of the Roche
Products Labor Union, wrote the respondent
company expressing their grievances and
seeking formal conference with management
regarding the previous dismissal of the union’s
president and vice-president.
 At the meeting, instead of discussing the
problems affecting the labor union and
management, the company’s general manager
allegedly berated the petitioners for writing the
said letter and called the letter and the person
who prepared it “stupid.”
 Feeling that he was the one alluded to, since
he had prepared the letter, the counsel for the
labor union filed a case for “Grave Slander”
against the general manager. The charge was
based on the affidavit executed by the
petitioners.
 In turn, the company and the manager filed
a complaint for “Perjury” against petitioners
alleging that their affidavit contained false
statements
 The company construed the execution by
petitioners of the affidavit as an “act of breach
of trust and confidence.” Hence, they were
suspended and later on dismissed.
Issue: Whether respondent company, in
terminating the employment of the petitioners
without just and lawful cause, committed an unfair
labor practice.
Held: YES. Petition Granted
Respondent company had committed unfair labor
practice in dismissing the petitioners without just
and valid cause. Their dismissal, under the
circumstances, amounted to interference with, and
restraint or coercion of, the petitioners in the
exercise of their right to engage in concerted
activities for their mutual aid and protection
Breach of trust and confidence, the grounds alleged
for petitioners' dismissal, "must not be
indiscriminately used as a shield to dismiss an
employee arbitrarily.
MADRIGAL & CO. vs. HON. ZAMORA (1987)
FACTS:
 In December 1973, respondent Madrigal
Central Office Employees Union sought for the
renewal of its CBA with the petitioner company.
It proposed a wage increase of P200.00 a
month, an allowance of P100.00 a month, and
other economic benefits.
 By an alleged resolution of its stockholders,
the petitioner reduced its capital stock from
765,000 shares to 267,366 shares. Petitioner
alleged that because of the desire of the
stockholders to phase out the operations of the
Madrigal & Co. due to lack of business
incentives and prospect, it had to reduce its
capital stock and effected a retrenchment
policy (downsizing) of its employees and
operations
 Petitioner applied for clearance to terminate
the services of a number of employees
pursuant to its retrenchment program.
Respondent union filed a complaint of illegal
lockout against the petitioner.
 Respondent Union filed a complaint for ULP.
Issue: Whether the “mass-lay off” of petitioner
due to alleged income loss constitutes ULP
Held: YES. Petition Denied
The petitioner’s “capital reduction efforts,” to
camouflage the fact that it has been making
profits, and to justify the “mass lay-off of its
employees,” especially union members, were an
ULP which can neither be countenanced nor
condoned.
Petitioner, confronted with the demand of the
union for wage increases, decided to evade its
responsibility towards the employees by a devised
capital reduction. While the reduction in capital
stock created a need for retrenchment, it was just
a mask for the purge of union members, who, by
then, had agitated for wage increases. In the face
of the petitioner company's piling profits, the
unionists had the right to demand for such salary
adjustments.
Retrenchment can only be availed of if the
company is losing or meeting financial reverses in
its operation. Thus the mass lay-off or dismissal of
the employees under the guise of retrenchment
policy is a lame excuse and a veritable smoke-
screen of its scheme to bust the Union and thus
unduly disturb the employment tenure of the
employees concerned, which act is certainly an
ULP.
COMPLEX ELECTRONICS UNION. vs. NLRC
(1999)
FACTS:
 Complex Electronics Corporation was a
subcontractor of electronic products. Its
customers were foreign-based companies with
different product lines. One of its customers is
the Lite-On Philippines Electronics Co.
 Complex received a message from Lite-On
Philippines requiring it to lower its price by
10%. Complex informed Lite-On that such
request was not feasible as they were already
incurring losses at the present prices of their
products. Complex informed the employees
that it was left with no alternative but to close
down the operations of the Lite-On Line. The
company promised that it would follow the law
by giving 1 month notice and retrenchment
pay.
 Sometime later, the machinery, equipment
and materials being used for production at
Complex were pulled-out from the company
premises and transferred to the premises of
Ionics Circuit, Inc. in Laguna. The following
day, Complex totally closed its operation.
 The Complex Employees Union filed a
complaint for ULP, illegal closure/illegal lockout
and money claims. It claims that business has
not ceased at Complex but was merely
transferred to Ionics, a runaway shop, which is
an act constituting ULP. To prove that Ionics
was just a runaway shop, petitioner asserts
that Complex owns the majority of the shares
comprising the increased capital stock of
Ionics. The Union alleged that the reason for
 the closure of the establishment was due to the
union activities of the employees.
Issue: Whether Complex Electronics Corp.
committed ULP
HELD: NO
Resorting to a runaway shop is ULP. A “runaway
shop” is defined as an industrial plant moved by its
owners from one location to another to escape
union labor regulations or state laws, but the term
is also used to describe a plant removed to a new
location in order to discriminate against employees
at the old plant because of their union activities. It
is one wherein the employer moves its business to
another location or it temporarily closes its
business for anti-union purposes.
In this case, Ionics was not set up for the purpose
of transferring the business of Complex. At the
time the labor dispute arose, Ionics was already
existing as an independent company. It cannot,
therefore, be said that the temporary closure in
Complex and its subsequent transfer of business to
Ionics was for anti-union purposes.
We, likewise, disagree with the Union that there
was in this case an illegal lockout/illegal dismissal.
Lockout is the temporary refusal of employer to
furnish work as a result of an industrial or labor
dispute. It may be manifested by the employer's
act of excluding employees who are union
members.
PROGRESSIVE DEVP’T CO. vs. CIR (1977)
FACTS:
 The Araneta Coliseum Employees
Association (ACEA) in behalf of 48 members,
filed for ULP against petitioner Progressive
Devpt Corp., its officers, and the Progressive
Employees Union (PEU).
 The complainants alleged that they were
dismissed because they refused to resign from
the ACEA and to affiliate with the PEU.
 There is evidence that the Progressive
Employees Union became inactive after the
death of Atty. Reonista the former counsel of
the Progressive Development Corporation. This
shows that the Progressive Employees Union
was organized to camouflage the petitioner
corporation's dislike for the Araneta Coliseum
Employees Association and to stave off the
latter's recognition. Further, the PEU did not
conclude and enter into a CBA with the
management.
Issue: Whether the dismissal of the employees
constitutes ULP
Held: YES
The dismissal of employees because of their refusal
to resign from their union and to join the union
favorable to the employer constitutes ULP. Under
the circumstances and equity of the case, and
considering the length of time and the union-
busting activities of petitioner, the individual
complainants are granted back wages for five (5)
years without qualification or deduction.
BATAAN SHIPYARD vs. NLRC (1988)
FACTS:
 The National Federation of Labor Unions
(NAFLU) is a labor organization in petitioner
Bataan Shipyard & Engineering Co., Inc. The
Company has thousand employees in its
payroll and more than a hundred of them
belong to the said labor organization.
 Sometime before 1984, the Company filed
with the NLRC an “application for the
retrenchment” of 285 of its employees on the
ground that the firm had been incurring heavy
losses. In the meantime, some employees who
had been on sick leave earlier were considered
retrenched. All of those so retrenched happen
to be officers and members of the NAFLU.
Issue: Whether the Company is guilty of
discriminatory acts in the selection of employees
to be retrenched
Held: YES.
The retrenchment undertaken by the Company is
valid. However, the manner in which this is
exercised should not be tainted with abuse of
discretion. Labor is a person's means of livelihood.
He cannot be deprived of his labor or work without
due process of law. The retrenchment of
employees who belong to a particular union, with
no satisfactory justification why said employees
were singled out, constitutes ULP.
In this case, the Company had indeed been
discriminatory in selecting the employees who
were to be retrenched. All of the retrenched
employees are officers and members of the NAFLU.
It leads Us to conclude that the firm had been
discriminating against membership in the NAFLU,
an act which amounts to interference in the
employees' exercise of their right of self-
organization. This interference is considered an act
of ULP
TANDUAY DISTILLERY LABOR UNION vs. NLRC
(1987)
FACTS:
 Tanduay Distillery, Inc. (TDI) and Tanduay
Distillery Labor Union (TDLU) entered into a
CBA which contained a “union security clause,”
which provided: “All workers who are or may
during the effectivity of this Contract, become
members of the Union in accordance with its
Constitution and By-Laws shall, as a condition
of their continued employment, maintain
membership in good standing in the Union for
the duration of the agreement.”
 While the CBA was still in effect, a number
of the TDLU, joined another union, the
Kaisahan Ng Manggagawang Pilipino (KAMPIL)
and organized its local chapter in TDI.
 The TDLU required those who disaffiliated
to explain why they should not be punished for
“disloyalty.” TDLU created a committee to
investigate its erring members. The committee
recommended that the disaffiliating members
be expelled and that they should be terminated
from service in pursuant to the union security
clause. Acting on said request, the company
terminated the employment of the disaffiliating
union members.
Issue: Whether the dismissal of the disaffiliating
members pursuant to a security clause constitutes
ULP
Held: NO
The private respondents cannot escape the effects
of the security clause of their own applicable CBA.
Union Security Clauses in CBA, if freely and
voluntarily entered into, are valid and binding.
Thus, the dismissal of an employee by the
company pursuant to a labor union’s demand in
accordance with a union security agreement does
not constitute ULP.
The respondent employer did nothing but to put in
force their agreement when it separated the herein
complainants upon the recommendation of said
union. Such a stipulation is not only necessary to
maintain loyalty and preserve the integrity of the
union but is allowed by the Magna Charta of Labor
when it provided that while it is recognized that an
employee shall have the right to self-organization,
it is at the same time postulated that such right
shall not injure the right of the labor organization to
prescribe its own rules with respect to the
acquisition or retention of membership therein
In Villar v. Inciong, we held that "petitioners,
although entitled to disaffiliation from their union
and to form a new organization of their own must
however, suffer the consequences of their
separation from the union under the security clause
of the CBA"
MABEZA vs. NLRC (1997)
FACTS:
 Petitioner Norma Mabeza contends that she
and her co-employees at the Hotel Supreme in
Baguio City were asked by the hotel's
management to sign an instrument wherein it
states that they are in compliance with
minimum wage and other labor standard
provisions of law.
 Petitioner signed the affidavit but refused to
go to the City Prosecutor's Office to swear to
the truth of her statement. Her refusal
displeased the employer.
 Thereafter, she was ordered to turn over
the keys to her living quarters and to remove
her belongings from the hotel. Subsequently,
she as charged with of abandonment of job and
stealing of company property; finally she was
dismissed for loss of confidence.
Issue: Whether the dismissal constitutes ULP?
Held: YES
The act of compelling employees to sign an
instrument indicating that the employer observed
labor standards provisions of law when he might
have not, together with the act of terminating or
coercing those who refuse to cooperate with the
employer's scheme constitutes unfair labor
practice. The first act clearly preempts the right of
the hotel's workers to seek better terms and
conditions of employment through concerted
action. In not giving positive testimony in favor of
her employer, petitioner had reserved not only her
right to dispute the claim and proffer evidence in
support thereof but also to work for better terms
and conditions of employment.
RANCE vs. NLRC (1988)
FACTS:
 Polybag Manufacturing Corporation and
Polybag Workers Union entered into a CBA
which provides a union security clause which
states that a union member who loses his
membership in the union shall be dismissed
from service by the company.
 Petitioners, who were members of the
Polybag Workers Union, were expelled by said
union for “disloyalty” for allegedly joining the
National Federation of Labor Union (NAFLU).
Because of the expulsion, petitioners were
dismissed by the Corporation upon the union’s
demand.
 Both the Labor Arbiter and the NLRC found
the CBA and theunion security clause valid and
considered the termination of petitioners
justified.
 Petitioners argue that their dismissal is not
valid because they did not affiliate with the
NAFLU. They claim that there is a connivance
between respondents Company and Union in
their illegal dismissal in order to avoid the
payment of separation pay by respondent
company.
Issue: Whether the act of asking help from
another union constitutes “disloyalty”
Held: NO
The mere act of seeking help from the NAFLU
cannot constitute disloyalty as contemplated in the
Collective Bargaining Agreement. At most it was an
act of self-preservation of workers who, driven to
desperation found shelter in the NAFLU who took
the cudgels for them.
KIOK LOY vs. NLRC (1986)
FACTS:
 In a certification election held, the
Pambansang Kilusang Paggawa, a legitimate
late labor federation, won and was
subsequently certified as the sole and
exclusive bargaining agent of the rank-and-file
employees of Sweden Ice Cream Plant.
 The Union furnished the Company with two
copies of its proposed collective bargaining
agreement. At the same time, it requested the
Company for its counter proposals but the
requests were ignored and remained unacted
upon by the Company.
 As a result, the Union filed a "Notice of
Strike", with the BLR on the ground of
unresolved economic issues in collective
bargaining.
 In the labor arbiter: due to series of
postponements, and non-appearance at the
hearing conducted it ruled that the Company
has waived its right to present further evidence
and, therefore, considered the case submitted
for resolution.
 NLRC: ruled that respondent Sweden Ice
Cream is guilty of unjustified refusal to bargain,
in violation of Section (g) Article 248 (now
Article 249)
Issue: WON respondent is guilty of unjustified
refusal to bargain?
Held: YES
The Court affirmed the NLRC, and ruled that,
petitioner Company is GUILTY of unfair labor
practice, because the jurisdictional preconditions
of Collective Bargaining establish such as:
1. possession of the majority representation;
2. proof of majority representation;
3. a demand to bargain under Article 251,
par. (a)
Collective bargaining which is defined as
negotiations towards a collective agreement, is one
of the democratic frameworks under the New
Labor Code, designed to stabilize the relation
between labor and management and to create a
climate of sound and stable industrial peace. It is a
mutual responsibility of the employer and the
Union and is characterized as a legal obligation.
In the case at bar, (1) respondent Union was a duly
certified bargaining agent; (2) it made a definite
request to bargain, accompanied with a copy of the
proposed Collective Bargaining Agreement, to the
Company not only once but twice which were left
unanswered and unacted upon; and (3) the
Company made no counter proposal whatsoever all
of which conclusively indicate lack of a sincere
desire to negotiate.
From the overall conduct of the company, it is
indubitably shown that it disregarded its obligation
to bargain in good faith.
MERALCO vs. QUISUMBING, MEWA (1999)
FACTS:
 MEWA informed MERALCO of its intention to
re-negotiate the terms&conditions of their
existing CBA
 MEWA submitted its proposal to MERALCO
and the collective bargaining negotiations
proceeded. However, despite the series of
meetings between the negotiating panels of
MERALCO and MEWA, the parties failed to arrive
at "terms and conditions acceptable to both of
them."
 As a result, MEWA filed a Notice of Strike, on
the grounds of bargaining deadlock and ULP
 Secretary of Labor: granted the economic
as well as the political demand of the MEWA,
and ordered to grant the wage increase and to
incorporation into the CBA of all existing
employee benefits.
 MERALCO filed a MR alleging that the
Secretary of Labor did not properly appreciate
the effect of the awarded wages and benefits
on MERALCO's financial viability.
 MEWA likewise filed a motion asking the
Secretary of Labor to reconsider its Order on
the wage increase and other benefits.
Issue: Whether the Secretary's actions have been
reasonable in light of the parties positions and the
evidence they presented.
Held:
The Court ruled that a collective bargaining dispute
such as this one requires due consideration and
proper balancing of the interest of the parties to
the dispute and those who might be affected by the
dispute.
As a rule, affordability and capacity to pay should
be take into account BUT cannot be the sole
yardstick in determining the wage award,
especially in a PUBLIC UTILITY like MERALCO. In
considering a public utility, it must always take into
account the PUBLIC interest aspect. The
MERALCO’s income and the amount of money
available for operating expenses including labor
costs are subject to state regulations. We must also
keep in mind that high operating costs will certainly
and eventually be passed on the consuming public.
SMC UNION vs. HON. CONFESOR (1996)
FACTS:
 Petitioner San Miguel Corporation
Employees Union entered into a CBA with
private respondent San Miguel Corporation
(SMC)
 It provides that the agreement SHALL
REMAIN IN FORCE AND EFFECTIVE until 1992,
and the terms of the agreement shall be for 5
years. from 1989 to 1992.
 For purposes of business expansion, the
SMC would undergo with reconstructing, the
magnolia and the Feeds and livestock Division
were spun-off and become two separate and
distinct corporation. But the CBA remain in
forced and effective.
 During the negotiation the petitioner union
insisted that the bargaining unit of SMC should
still include the employees of the spun-off
corporations, which is the MAGNOLIA and SMFI
and that the renegotiation terms of the CBA
shall be effective ONLY for the remaining period
of 2 years.
 On the other hand the SMC contended that
the members or employees WHO HAD MOVED
TO MAGNOLIA AND SMFI, SHALL
AUTHOMATICALLY CEASED TO BE PART OF THE
BARGAINING UNIT at the SMC, and that the
CBA shall be effective for 3years in accordance
with ART.253-A
 Unable to agree with these issues of
bargaining unit and duration of the CBA,
petitioner union declared a deadlock and filed a
notice of strike.
Held:
Spin-off of Magnolia and San Miguel Foods
Companies from the San Miguel Corporation as
separate corporate entities. Existing CBA included
all four divisions. During the renewal or
renegotiation for two years on the economic
provisions, spin-off corporations were already in
existence. The Union insisted that the employees
of the spun-off corporations were still to be
considered as part of the appropriate bargaining
unit.
Considering the spin-off, the companies would
consequently have their respective and distinctive
concerns in terms of the nature of work, wages,
hours of work and other conditions of
employment. The interests of the employees in
different companies would perforce differ. SMC is
engaged in beer manufacturing; Magnolia with
manufacturing and processing of dairy products;
SM Foods with production of feeds and processing
of chicken. The nature of the products and sales of
business may require diff. Skills which must
necessarily be commensurated by different
compensation packages; different volumes of work
and working conditions. It would then be best to
have separate bargaining units for different
companies where the employees can bargain
separately accdg. to their needs and working
conditions.
SAMAHANG MANGGAGAWA SA TOP FORM
MANUFACTURING UNITED WORKERS OF THE
PHILS. (SMTFM-UWP) vs. NLRC (1998)
FACTS:
 Petitioner Samahang Manggagawa sa Top
Form was the certified collective bargaining
representative of all regular rank and file
employees of private respondent Top Form
Manufacturing Philippines, Inc.
 At the subsequent collective bargaining
negotiations, the union insisted on the
incorporation in the (CBA) of the union proposal
on "automatic across-the-board wage
increase."
  There was a Wage Order granting an
increase of P17.00 per day in the salary of
workers. This was followed by another Wage
Order providing for a P12.00 daily increase in
salary.
 The union requested the implementation of
said wage orders. However, they demanded
that the increase be on an across-the-board
basis.
 Private respondent refused to accede to that
demand. Instead, it implemented a scheme of
increases purportedly to avoid wage distortion.
 The union, wrote private respondent a letter
reiterated that it had agreed to "retain the old
provision of CBA" on the strength of private
respondent's "promise and assurance" of an
across-the-board salary increase should the
government mandate salary increases.
 The union filed a complaint with the NLRC
alleging that private respondent's act of
promise clearly constitutes act of unfair labor
practice through bargaining in bad faith."
Labor Arbiter: denied the complaint for lack of
merit.
NLRC: affirmed the LA
Issue: WON the act of the private respondent
constitute unfair labor practice through bargaining
in BAD FAITH.
Held: NO
The Court ruled that under Article 252 it states that
the duty to bargain "does not compel any party to
agree to a proposal or make any concession." Thus,
petitioner union may not validly claim that the
proposal embodied in the Minutes of the
negotiation forms part of the CBA that it finally
entered into with private respondent.
And by making such promise, private respondent
may not be considered in bad faith or at the very
least, petitioner union had, under the law, the right
and the opportunity to insist on the fulfillment of
the private respondent's promise by demanding its
incorporation in the CBA. "Because the proposal
was never embodied in the CBA, the promise has
remained just that, a promise, the implementation
of which cannot be validly demanded under the
law."
NEW PACIFIC TIMBER vs. NLRC (1988)
FACTS:
 The National Federation of Labor (NFL) was
certified as the sole and exclusive bargaining
representative of all the regular rank-and-file
employees of New Pacific Timber & Supply Co.,
Inc.
 NFL started to negotiate for the employees
in the bargaining unit. However, the same was
allegedly met with stiff resistance by petitioner
Company, so that the former was prompted to
file a complaint for ULP on the ground of refusal
to bargain collectively.
 Labor Arbiter: issued an order declaring
(a) herein petitioner Company guilty of ULP; and
(b) the CBA proposals submitted by the NFL as
the CBA between the regular rank-and-file
employees in the bargaining unit and petitioner
Company.
 NLRC: dismissed the complaint for lack of
merit.
 A "Petition for Relief" was filed in behalf of
186 of the private respondents "Mariano J. Akilit
and 350 others". In their petition, they claimed
that they were "wrongfully excluded from
enjoying the benefits under the CBA since the
agreement with NFL and petitioner Company
limited the CBA's implementation to only the
142 rank-and-file employees enumerated."
 NLRC declared that the 186 excluded
employees "form part and parcel of the then
existing rank-and-file bargaining unit" and
were, therefore, entitled to the benefits under
the CBA.
 Petitioners argues that the private
respondents are not entitled to the benefits
under the CBA because employees hired after
the term of a CBA are not parties to the
agreement, and therefore, may not claim
benefits thereunder, even if they subsequently
become members of the bargaining unit.
 As for the term of the CBA, petitioner
maintains that Article 253 of the Labor Code
refers to the continuation in full force and
effect of the previous CBA's terms and
conditions. By necessity, it could not possibly
refers to terms and conditions which, as
expressly stipulated, ceased to have force and
effect.
Issue: WON the private respondent are entitled to
the benefits under the CBA.
Held:
It is clear from the above provision of law that until
a new Collective Bargaining Agreement has been
executed by and between the parties, they are
duty-bound to keep the status quo and to continue
in full force and effect the terms and conditions of
the existing agreement. The law does not provide
for any exception nor qualification as to which of
the economic provisions of the existing agreement
are to retain force and effect, therefore, it must be
understood as encompassing all the terms and
conditions in the said agreement.
In the case at bar, no new agreement was entered
into by and between petitioner Company and NFL
pending appeal of the decision in NLRC Case No.
RAB-IX-0334-82; nor were any of the economic
provisions and/or terms and conditions pertaining
to monetary benefits in the existing agreement
modified or altered. Therefore, the existing CBA in
its entirety continues to have legal effect.
Court has held that when a collective bargaining
contract is entered into by the union representing
the employees and the employer, even the non-
member employees are entitled to the benefits of
the contract. To accord its benefits only to
members of the union without any valid reason
would constitute undue discrimination against
nonmembers. 22 It is even conceded, that a
laborer can claim benefits from the CBA entered
into between the company and the union of which
he is a member at the time of the conclusion of the
agreement, after he has resigned from the said
union.
PAL vs. NLRC (1993)
FACTS:
 The Philippine Airlines, Inc. (PAL) completely
revised its 1966 Code of Discipline.
Subsequently, some of the employees were
subjected to disciplinary measures for alleged
violation of revised code.
 Philippine Airlines Employees Association
(PALEA) filed a complaint before the (NLRC) for
"ULP with arbitrary implementation of PAL's
Code of Discipline without notice and prior
discussion with Union by Management." PALEA
 contended that PAL was guilty of ULP because
the copies of the Code had been circulated in
limited numbers; that being penal in nature the
Code must conform with the requirements of
sufficient publication, and that the Code was
arbitrary, oppressive, and prejudicial to the
rights of the employees.
 PAL filed a “motion to dismiss” the
complaint, asserting its prerogative as an
employer to prescribe rules and regulations
regarding employees' conduct in carrying out
their duties and functions.
 Labor Arbiter: dismissed the complaint
and ruled that no ULP had been committed and
no bad faith in adopting the Code.
 NLRC: found no evidence of ULP and
affirmed the dismissal of the complaint.
Issue: Whether or not the formulation of a Code of
Discipline among employees is a shared
responsibility of the employer and the employees.
Held: YES
The Court upheld the union’s right, and ruled that,
the management should see to it that its
employees are at least properly informed of its
decisions or modes of action, because the
implementation of the provisions may result in the
deprivation of an employees means of livelihood
which is a property right.
And the CBA may not be interpreted as cession of
employees right to participate in the deliberation of
matters which may affects their rights and the
formulation of a code of discipline.
ALHAMBRA CIGAR CO vs. ALHAMBRA UNION
FACTS:
 Respondent Alhambra Employees'
Association ,a legitimate labor organization,
filed a petition in which it is prayed that said
union be certified as the sole and exclusive
bargaining agent for all the employees in the
administrative, sales, engineering and
dispensary departments of the “Alhambra Cigar
and Cigarette Manufacturing Company.”
 The petition is opposed by the Company and
another legitimate labor organization, the
Federacion Obrera de la Industria Tabaquera de
Filipinas (FOITAF).
 They alleged that there is an existing CBA
between the company and the FOITAF which
constitutes a bar to the instant certification
proceeding.
 Petitioner contends that all the employees
paid in the administrative, sales, engineering,
and dispensary departments constitute an
appropriate unit which is an employer unit
Issue: WON the lower court erred in holding that
all the employees in the administrative, sales, and
dispensary departments of petitioner company,
with the exception of the supervisors, security
guards, and confidential employees therein,
constitute an appropriate separate collective
bargaining unit.
Held:
The Court ruled that, no reason to disturb said
finding of the lower court that, said employees in
the administrative, sales, and dispensary
departments perform work which have nothing to
do with production and maintenance, unlike those
in the raw leaf (manlalasi), cigar, cigarette, packing
(precinteria), and engineering and garage
departments whose functions involve production
and maintenance, they have a community of
interest which justifies their formation or existence
as a separate appropriate collective bargaining
unit.
PAGKAKAISA NG MGA MANGGAGAWA SA
TRIUMPH INTERNATIONAL-UNITED LUMBER
AND GENERAL WORKERS OF THE PHILS. vs.
FERRER-CALLEJA
FACTS:
 The petitioner is the recognized collective
bargaining agent of the rank-and-file
employees of Triumph International with which
the latter has a valid and existing collective
bargaining agreement effective up to
September 24, 1989.
 In 1987, a petition for certification election
was filed by the respondent union with the
Department of Labor and Employment.
 a motion to dismiss the petition for
certification election was filed by Triumph
International on the grounds that the
respondent union cannot lawfully represent
managerial employees and that the petition
cannot prosper by virtue of the contract-bar
rule.
 But the Labor Arbiter issued an order
granting the petition for certification election
and directing the holding of a certification
election to determine the sole and exclusive
bargaining representative of all monthly-paid
administrative, technical, confidential and
supervisory employees of Triumph
International.
Issue: Whether or not the public respondent
gravely abused its discretion in ordering the
immediate holding of a certification election
among the workers sought to be represented by
the respondent union.
Held:
Where the supervisory employees sought to be
represetned by the union are actually NOT
INVOLVED in policy making, and their
recommendatory powers are not even instantly
effective since they are subject to review by at
least three (3) managers (dept. mgr., personnel
mgr. And general manager), then it is evident that
these employees doe not possess managerial
status.
The fact that their work designations are
either managerial or supervisory is of no
moment, considering that it is the nature of
their functions and NOT SAID
NOMENCLATURES which determines their
respective status.
A careful examination of the records of this case
reveals no evidence that rules out the
commonality or community of interest among the
rank-and-file members of the petitioners, and the
herein declared rank-and-file members of the
respondent union. Instead of forming another
bargaining unit, the law requires them to be
members of the existing one. The ends of
unionism are better served if all the rank-
and-file members with substantially the
same interests and who invoke their right to
self-organization are part of a single unit so
they can deal with their ER with JUST ONE
AND YET POTENT VOICE. The Ees bargaining
power with management is strengthened
thereby.
In the case at bar, there is no dispute that the
petitioner is the exclusive bargaining
representative of the rank-and-file employees of
Triumph International.
BARBIZON PHILS INC. vs. NAGKAKAISANG
SUPERVISOR NG BARBIZON PHILS (1996)
FACTS:
 Petitioner Phil. Lingerie Corp. (now Barbizon
Philippines Inc.) filed a “petition for certification
election” among its rank-and-file employees. As
a consequence thereof, 2 unions sought
recognition:
( 11 PHILIPPINE LINGERIE WORKERS
UNION-ALAB and
( 11 BUKLOD NG MANGGAGAWA NG
PHILIPPINE LINGERIE CORPORATION
 PLW Union moved for the exclusion of a
number of employees who were allegedly
holding “supervisory positions.”
Med-Arbiter: denied the said motion.
BLR: affirmed the Med-Arbiter and ordered the
election to be conducted.
 A certification election was conducted with
the votes of "supervisors and confidential"
employees being challenged.
 PLW UNION filed an election protest. In
the meantime, BUKLOD moved for the opening
of the challenged ballots.
BLR: denied the protest and ruled that the alleged
supervisors are not managerial employees. The
petitioner was certified as the sole and exclusive
bargaining representative of all the regular rank-
and-file employees of Barbizon Philippines, Inc.
(formerly Philippine Lingerie Corporation).
 BUKLOD was certified as the sole and
exclusive bargaining representative of all the
rank-and-file employees of Barbizon Phils
(former PLC)
 While the CBA was still in force, several
employees organized themselves into the
“Nagkakaisang Supervisors Ng Barbizon
Philippines, Inc. (NSBPI)” and the
“Nagkakaisang Excluded Monthly Paid
Employees Ng Barbizon, Philippines, Inc.
(NEMPEBPI)” allegedly because they were
excluded from the coverage of the existing CBA
between petitioner Barbizon and BUKLOD.
 Petitioner Barbizon alleged that the
“petitions for certification election” filed by the
Nagkakaisang Supervisor ng Barbizon
Philippines, Inc. — NAFLU (NSBPI) must
necessarily fail because the employees
designated as "supervisors" cannot legally form
a supervisors' union. Being part of the rank and
file, petitioner avers that said employees belong
to the "employer wide unit," which is the
appropriate bargaining unit of all its rank and
file employees and which is represented by the
BUKLOD.
 The Secretary of Labor granted the petition
for certification election filed by NSBPI
ISSUE: Whether the Undersecretary of Labor
committed grave abuse of discretion in granting
NSBPI's petition for certification election
HELD: YES
It has been the policy of the BLR to encourage the
formation of an employer unit unless circumstances
otherwise require. In other words, one employer
enterprise constitutes only one bargaining unit.
The more solid the employees are, the stronger is
their bargaining capacity.
However, the "one union — one company" rule is
not without exception. The exclusion of the subject
employees from the rank-and-file bargaining unit
and the CBA is indefinitely a "compelling reason"
for it completely deprived them of the chance to
bargain collectively with petitioner and are thus
left with no recourse but to group themselves into
a separate and distinct bargaining unit and form
their own organization.
The usual exception, of course, is where the
employer unit has to give way to the other units
like the craft unit, plant unit, or a subdivision
thereof; the recognition of these exceptions takes
into accountant the policy to assure employees of
the fullest freedom in exercising their rights.
Otherwise stated, the one company-one union
policy must yield to the right of the employees to
form unions or associations for purposes not
contrary to law, to self-organization and to enter
into collective bargaining negotiations, among
others, which the Constitution guarantees.
INDOPHIL TEXTILE MILL WORKERS UNION vs.
VOLUNTARY ARBITRATOR CALICA (1992)
FACTS:
 Petitioner Indophil Textile Mills Union and
respondent Indophil Textile Mills, Inc. executed
a CBA
 Indophil Acrylic Manufacturing Corp. was
formed and registered with the SEC. It became
operational and hired workers according to its
criteria and standards.
 The petitioner union contends the plant
facilities built and set up by Acrylic should be
considered as an extension or expansion of the
facilities of respondent Company. In other
words, it is the petitioner's contention that
Acrylic is part of the Indophil bargaining unit;
that the creation of the Indophil Acrylic is a
device of respondent Indophil Textile to evade
the application of the CBA between the union
and the company to Acrylic people.
 On the other hand, respondent Indophil
Textile submits that it is a juridical entity
separate and distinct from Acrylic and cited
the case of Diatagon Labor Federations vs.
Ople, which ruled that 2 corporations cannot be
treated as single bargaining unit even if their
business are related.
Voluntary Arbitrator: ruled in favor of the
respondent and found that the provision in the CBA
between Indophil Textile Inc. and Indophil Textile
Union does not extend to the employees of
Indophil Acrylic Corp
Issue: Whether the voluntary arbitrator
committed grave abuse of discretion in failing to
disregard the corporate entity of Indophil Acrylic
Held: NO
Acrylic Indophil Corporation cannot be considered
an extension of Indophil Corporation, as to cover in
one bargaining unit all employees thereof. Note
separate corporate entities: doctrine of piercing
the veil of corporate entity not applied.
The fact that the businesses of private respondent
and Acrylic are related, that some of the
employees of the private respondent are the same
persons manning and providing for auxilliary
services to the units of Acrylic, and that the
physical plants, offices and facilities are situated in
the same compound, it is our considered opinion
that these facts are not sufficient to justify the
piercing of the corporate veil of Acrylic.
Hence, the Acrylic not being an extension or
expansion of private respondent, the rank-and-file
employees working at Acrylic should not be
recognized as part of, and/or within the scope of
the petitioner, as the bargaining representative of
private respondent.
NATIONAL CONGRESS OF UNIONS IN THE
SUGAR INDUSTRY OF THE PHILS (NACUSIP)
vs.
HON. FERRER-CALLEJA (1992)
FACTS:
 Dacongcogon Sugar and Rice Milling Co.
entered into a CBA with respondent National
Federation of Sugar Workers (NFSW)
 When the CBA expired, it was extended for
another 3 years with reservation to negotiate
for its amendment, particularly on wage
increases, hours of work, and other terms and
conditions of employment.
 However, a deadlock in negotiation ensued
on the matter of wage increases and optional
retirement. In order to obviate friction and
tension, the parties agreed on a suspension to
provide a cooling-off period to give them time
to evaluate and further study their positions.
Hence, a Labor Management Council was set up
and convened, with a representative of the
Department of Labor and Employment, acting
as chairman, to resolve the issues.
 Petitioner filed filed a “petition for direct
certification or certification election” among the
rank and file workers of Dacongcogon.
 Respondent NSFW moved to dismiss the
petition on the grounds that the petition was
filed out of time and that there is a deadlocked
of CBA negotiation
Med-Arbiter: denied the Motion to Dismiss and
direct the conduct of a certification election among
rank-and-file employees
BLR: set aside the order of the Med-Arbiter and
ruled in favor of respondent
Issue: Whether the BLR committed grave abuse of
discretion?
Held: NO. Petition Denied.
The “Deadlock Bar” Rule simply provides that a
petition for certification election can only be
entertained if there is no pending bargaining
deadlock submitted to conciliation or arbitration or
had become the subject of a valid notice of strike
or lockout. The principal purpose is to ensure
stability in the relationship of the workers and the
management.
It is a rule in this jurisdiction that only a certified
CBA — i.e., an agreement duly certified by the BLR
may serve as a bar to certification elections.
This rule simply provides that a petition for
certification election or a motion for intervention
can only be entertained within sixty days prior to
the expiry date of an existing collective bargaining
agreement. Otherwise put, the rule prohibits the
filing of a petition for certification election during
the existence of a CBA except within the freedom
period, as it is called, when the said agreement is
about to expire. The purpose, obviously, is to
ensure stability in the relationships of the workers
and the management by preventing frequent
modifications of any CBA earlier entered into by
them in good faith and for the stipulated original
period.
ASSOCIATED LABOR UNIONS (ALU) vs.
HON. FERRER-CALLEJA (1989)
FACTS:
 GAW Trading, Inc. recognized ALU as the
sole and exclusive bargaining agent for the
majority of its employees. A CBA was executed.
 In the meantime, Southern Philippines
Federation of Labor (SPFL) together with
Nagkaisang Mamumuo sa GAW (NAMGAW)
undertook a Strike after it failed to get GAW
Trading Inc. to sit for a conference respecting
its demands in an effort to pressure GAW
Trading Inc. to make a turnabout of its standing
recognition of ALU as the sole and exclusive
bargaining representative of its employees
 GAW Trading Inc. filed a TRO
Labor Arbiter: held the strike as illegal
 GAW Lumad Labor Union (GALLU-PSSLU)
Federation ... filed a Certification Election
petition
Med-Arbiter: ruled for the holding of a
certification election in all branches of GAW
Trading Inc.
BLR: granted ALU’s appeal (MR) and reversed the
Med-Arbiter on the ground that the CBA has been
effective and valid and the contract bar rule
applicable
 SPFL filed a MR to the BR
BLR: reversed its previous decision and ordered
the holding of a certification election among the
rank-and-file workers of GAW Trading, Inc. and
ruled that the “contract-bar rule” does not apply in
this case because the CBA involved is defective as
it was not duly submitted in accordance with the
Implementing Rules. xxx “There is no proof tending
to show that the CBA has been posted in at least 2
conspicuous places in the establishment at least 5
days before its ratification and that it has been
ratified by the majority of the employees in the
bargaining unit.
Issue: Whether the contract-bar rule is applicable
in this case?
HELD: NO
Wind no reversible error in the challenged decision
of respondent director. A careful consideration of
the facts culled from the records of this case,
yields the conclusion that the collective bargaining
agreement in question is indeed defective hence
unproductive of the legal effects attributed to it by
the former director in his decision which was
subsequently and properly reversed.
To be a bar to a certification election, the CBA
must be adequate in that it comprise substantial
terms and conditions of employment
CAPITOL MEDICAL CENTER OF CONCERNED
EMPLOYEES-UNIFIED FILIPINO SERVICE
WORKERS vs. HON. LAGUESMA (1997)
FACTS:
 Respondent CMC Employees Assoc.-Alliance
of Filipino Workers filed a “petition for
certification election” among the rank-and-file
employees of the Capitol Medical Center (CMC).
After the election, respondent union was held as
the sole and exclusive bargaining
representative of the rank and file employees at
CMC.
 Respondent Union invited the CMC to the
bargaining table by submitting its economic
proposal for a CBA. However, CMC refused to
negotiate and instead challenged the union’s
legal personality through a “petition for
cancellation of the certificate of registration.”
Respondent union was left with no other
recourse but to file a “notice of strike” against
CMC for ULP. This eventually led to a strike.
 In the meantime, petitioner Capitol Medical
Center Employees-Unified Filipino Service
Workers filed a “petition for certification
election” among the rank-and-file employees of
the CMC. It alleged in its petition that a
certification election can now be conducted as
more that 12 months have lapsed since the last
certification election was held and that no CBA
was executed before.
 Respondent union opposed the petition and
moved for its dismissal. It contended that it is
the certified bargaining agent of the rank-and-
file employees of the CMC Hospital.
 Petitioner claims that since there is no
evidence on record that there exists a CBA
deadlock, the law allowing the conduct of a
certification election after twelve months must
be given effect in the interest of the right of the
workers to freely choose their sole and
exclusive bargaining agent
The Secretary of Labor: dismissed the petition
for certification election and directed CMC to
negotiate a CBA with respondent union
Issue: Whether there is a bargaining deadlock
between CMC and respondent union, before the
filing of petitioner of a petition for certification
election
HELD: NONE
There is a deadlock when there is a complete
blocking or stoppage resulting from the action of
equal and opposed forces . . . . The word is
synonymous with the word impasse, which . .
"presupposes reasonable effort at good faith
bargaining which, despite noble intentions, does
not conclude in agreement between the parties."
While it is true that, in the case at bench, one year
had lapsed since the time of declaration of a final
certification result, and that there is no collective
bargaining deadlock, public respondent did not
commit grave abuse of discretion when it ruled in
respondent union's favor since the delay in the
forging of the CBA could not be attributed to the
fault of the latter.
If the law proscribes the conduct of a certification
election when there is a bargaining deadlock
submitted to conciliation or arbitration, with more
reason should it not be conducted if, despite
attempts to bring an employer to the negotiation
table by the "no reasonable effort in good faith" on
the employer certified bargaining agent, there was
to bargain collectively. It is only just and equitable
that the circumstances in this case should be
considered as similar in nature to a "bargaining
deadlock" when no certification election could be
held.
KAISAHAN NG MANGGAGAWANG PILIPINO
(KAMPIL-KATIPUNAN) vs. HON. TRAJAN0
(1991)
FACTS:
 National Federation of Labor Union (NAFLU)
was declared by the BLR the exclusive
bargaining agent of all rank-and-file employees
of Viron Garments
 More than 4 years after, another union,
KAMPIL-Katipunan, filed with the BLR a
“petition for certification election” with the
support of more than 30% of the workers
VIRON.
 Despite NAFLU’s opposition, the Med-Arbiter
ordered the holding of a certification election,
citing the fact that since the certification of
NAFLU in 1981 as the sole bargaining agent, no
CBA has been concluded.
 NAFLU appealed, contending that at the
time the petition for certification election was
filed, it was in the process of collective
bargaining with VIRON; that in fact a deadlock
in negotiations prompted it to file a notice of
strike; that these circumstances barred a
petition for certification election, pursuant to
the Rules Implementing the Labor Code.
BLR: upheld NAFLU’s contentions and dismissed
the petition for certification election.
Issue: Whether KAMPIL’s petition for certification
election is barred by the alleged bargaining
deadlock between NAFLU and VIRON
HELD: NO
For a bargaining deadlock to bar a petition for
certification election, such deadlock must have
been submitted to conciliation or arbitration, or
must have been the subject of a valid strike or
lockout notice before – not after – the filing of the
petition for certification election.
The records do not show that there was a
bargaining deadlock prior to the filing of the
petition for certification election. When NAFLU was
proclaimed the exclusive bargaining representative
of all VIRON employees up to when KAMPIL filed
its petition for certification election or a period of
more than four (4) years, no collective bargaining
agreement was ever executed, and no deadlock
ever arose from negotiations between NAFLU and
VIRON resulting in conciliation proceedings or the
filing of a valid strike notice. In the case, the
strikes and submission to compulsory arbitration
took place after the filing of the petition for
certification election
LA SUERTE CIGAR & CIGARETTE FACTORY vs.
DIRECTOR OF THE BLR (1983)
FACTS:
 The La Suerte Cigar and Cigarette Factory
Provincial and Metro Manila Sales Force
Association applied for and was granted
chapter status by the National Association of
Trade Unions (NATU)
 Sometime later, 31 local union members
signed a joint letter withdrawing their
membership in NATU.
 The local union and NATU filed a petition for
certification election.
 The company opposed on the ground that it
was not supported by at least 30% (now 25%)
 of the proposed bargaining unit because (a) of
the alleged 48 members of the local union, 31
had withdrawn prior to the filing of the petition,
and (b) 14 of the alleged members of the union
were not employees of the company but were
independent contractors. The BLR director
denied the company’s objection
Issue: Whether the withdrawal of 31 unions from
NATU affected the petition for certification election
insofar as the 30% requirement is concerned
HELD: YES
The SC reversed the BLR, it appearing that the 31
union members has withdrawn their support to the
petition BEFORE the filing of said petition. It would
be otherwise if the withdrawal was made AFTER the
filing of the petition for it would then be presumed
that the withdrawal was not free and voluntary. The
presumption would arise that the withdrawal was
procured through duress, coercion or for valuable
consideration. In other words, the distinction must
be that withdrawals made before the filing of the
petition are presumed voluntary unless there is
convincing proof to the contrary, whereas
withdrawals made after the filing of the petition are
deemed involuntary.
The reason for such distinction is that if the
withdrawal or retraction is made before the filing of
the petition, the names of employees supporting
the petition are supposed to be held secret to the
opposite party. Logically, any such withdrawal or
retraction shows voluntariness in the absence of
proof to the contrary. Moreover, it becomes
apparent that such employees had not given
consent to the filing of the petition, hence the
subscription requirement has not been met.
We hold and rule that the 14 members of
respondent local union are dealers or independent
contractors. They are not employees of petitioner
company. With the withdrawal by 31 members of
their support to the petition prior to or before the
filing thereof, making a total of 45, the remainder
of 3 out of the 48 alleged to have supported the
petition can hardly be said to represent the union.
REYES vs. TRAJANO (1992)
FACTS:
 The BLR authorized the conduct of
certification election among the employees of
Tri-Union Industries Corporation. The competing
unions were the TUEU-OLALIA and TUPAS.
 Of the 384 workers initially deemed to be
qualified voters, only 240 actually took part in
the election. Among the 240 who cast their
votes, 141 were members of the Iglesia ni Kristo
(INK)
 The ballots provided for 2 choices: (a)
TUPAS; (b) TUEU-OLALIA; and (c) NO UNION.
 The challenged votes were those cast by the
141 INK members. They were segregated and
excluded from the final count because the
competing unions agreed earlier that the INK
members should not be allowed to vote
“because they are not members of any union
and refused to participate in the previous
certification election.”
 The INK employees protested the exclusion
of their votes. They filed a petition to cancel the
election alleging that it “was not fair” and the
result thereof did “not reflect the true
sentiments of the majority of the employees.”
 TUEU-OLALIA opposed the petition. It
contended that petitioners “do not have legal
personality to protest the results of the election
because they are not members of either the
contending unions, but of the INK which
prohibits its followers to, on religious grounds,
from joining or forming any labor organization.
Med-Arbiter: seeing no merit in the INK
employees’ petition, certified the TUEU-OLALIA as
the sole and exclusive bargaining agent of the
rank-and-file employees.
BLR: denied the appeal of the petitioner
Issue: Whether the INK members may vote in the
certification election
HELD: YES
Logically, the right NOT to join, affiliate with, or
assist any union, and to disaffiliate or resign from a
labor organization, is subsumed in the right to join,
affiliate with, or assist any union, and to maintain
membership therein. The right to form or join a
labor organization necessarily includes the right to
refuse or refrain from exercising said right. It is
self-evident that just as no one should be denied
the exercise of a right granted by law, so also, no
one should be compelled to exercise such a
conferred right. The fact that a person has opted to
acquire membership in a labor union does not
preclude his subsequently opting to renounce such
membership.
In the Certification Election, all members of the
unit, whether union members or not, have the
right to vote. Union membership is not
prerequisite. If majority of the unit members do not
want a union, as expressed in the certification
election, such majority decision must be
respected. Hence, the INK members may vote.
NATIONAL FEDERATION OF LABOR vs.
SECRETARY OF LABOR (1998)
FACTS:
 A certification election was conducted
among the rank-and-file employees of the Hijo
Plantation, Inc. (HPI).
 Petitioner NFL (National Federation of
Labor) was chosen as the bargaining agent of
its rank-and-file employees
 Protests filed by the company and three
other unions against the results of the election
on the ground that the certification election
was marred by massive fraud and irregularities
because number of employees were not able to
cast their votes because they were not properly
notified of the date
Labor Secretary: denied the petition to annul the
election and instead certified petitioner NFL as the
sole and exclusive bargaining representative of the
rank-and-file employees of private respondent HPI.
 However, on motion of HPI, the Secretary of
Labor, reversed his resolution. NFL’s MR was
denied. Hence, this petition
Issue: Whether the DOLE should not have given
due course to private respondent's petition for
annulment of the results of the certification
election.
HELD:
The SC ruled in favor of the NFL. The workers in
this case were denied this opportunity. Not only
were a substantial number of them disfranchised,
there were, in addition, allegations of fraud and
other irregularities which put in question the
integrity of the election. Workers wrote letters and
made complaints protesting the conduct of the
election. The Report of Med-Arbiter Pura who
investigated these allegations found the allegations
of fraud and irregularities to be true.
The SC invalidated the certification election upon a
showing of disfranchisement, lack of secrecy in the
voting and bribery. The workers' right to self-
organization as enshrined in both the Constitution
and Labor Code would be rendered nugatory if their
right to choose their collective bargaining
representative were denied. Indeed, the policy of
the Labor Code favors the holding of a certification
election as the most conclusive way of choosing
the labor organization to represent workers in a
collective bargaining unit. In case of doubt, the
doubt should be resolved in favor of the holding of
a certification election.
DE LEON vs. NATIONAL LABOR UNION (1989)
FACTS:
 De Leon was employed by La Tondeña, Inc.
at the Maintenance Section of its Engineering
Department where his work consisted mainly of
painting & other odd jobs related to
maintenance. He was paid on a daily basis
through petty cash vouchers.
 After more than 1 year of service, De Leon
requested to be included in the payroll of
regular workers. Company’s response was to
dismiss him from his employment. De Leon
demanded reinstatement but company refused
repeatedly.
 De Leon filed a complaint for illegal
dismissal, reinstatement & payment of
backwages
 LA: found for De Leon & declared the
dismissal as illegal. He ruled that De Leon was
not a mere casual employee but a regular
employee.
 NLRC: reversed LA. MR denied. Hence, this
appeal.
ISSUE: WON De Leon was mere casual employee
Held: NO, reversal of the decision was erroneous
Under Art. 281 of the LC, the primary standard of
determining a regular employment is the
reasonable connection bet. the particular activity
performed by the employee in relation to the usual
business or trade of the employer. Also, if the
employee has been performing the job for at least
1 year, even if the performance is not continuous
or merely intermittent, the law deems the repeated
& continuing need for its performance as sufficient
evidence for the necessity if not indispensability of
that activity to the business.
In this case, the records reveal that De Leon’s tasks
assigned to him included not only the painting of
building as claimed by the respondent but also
cleaning & oiling machines, even operating a
drilling machine & other odd jobs.
- A regular employee, Tanque, attested in
his affidavit that De Leon worked w/ him as
maintenance man when there was no
painting job.
- In its comment, company confirmed the
veracity of De Leon’s claim when it admitted
that he was occasionally instructed to do
other odd things in connection w/ the
maintenance while he was waiting for
materials he would need in his job or when
he had finished early the one assigned to
him
 The law demands that the nature & entirety
of the activities performed by the employee be
considered.
 Furthermore, the petitioner performed his
work of painting & maintenance activities
during his employment which lasted for more
than 1 year, until early Jan., 1983 when he
demanded to be regularized but was dismissed.
 The fact that he was rehired weeks after
shows that it can not be denied that his
activities as regular painter & maintenance man
still exist.
 What determines whether a certain
employment is regular or casual is not the
will & word of employer to which the
desperate worker often accedes nor the
procedure of hiring or manner of payment
of salary. It is the nature of the activities
performed in relation to the particular
business or trade considering all
circumstances, & in some cases the length
of time of its performance & its continued
existence. There was an obvious devious
dismissal of De Leon to evade the obligations of
petitioner to the worker.
Petition granted.
PICKETING AND
OTHER CONCERTED ACTIVITIES
DE LEON vs. NATIONAL LABOR UNION (1957)
FACTS:
 Petitioner Narcisa B. de Leon is the owner of
a parcel of land in Manila. She leased said land
to the Filipino Theatrical Enterprises, Inc., The
lease contract provided that the De Leon would
become the owner of the building, together
with all the equipment and accessories, at the
expiration of the lease
 Before the expiration of the lease, the
Filipino theatrical notified its EEs of their
termination. After the expiration of the lease,
the theater building was turned over to De
Leon who immediately demolished the
building, and on the same site she constructed
the new Dalisay Theater Building;
 The theatre was opened, with a new set of
personnel, retaining only the services of four
old EEs; Said theater was operated jointly by
the motion picture firms LVN Pictures, Inc.,
Premier Productions and the Sampaguita
Pictures, Inc., as lessees thereof.
 30 persons, all members of the NLU,
picketed at the said theater by walking to and
from on the sidewalk fronting the lobby of the
theater and displaying placards
 Defendants during the picketing tried to
persuade patrons or customers of the Dalisay
Theater to refrain from buying tickets or seeing
the show. Plaintiffs sought to recover damages
and an injunctive relief in the court.
Issue: Whether the picketing of the EEs are illegal
HELD: NO
The Court finds that the acts of the defendants
were not such as to disturb the public peace at the
place. There was no clear and present danger of
destruction to life or property or of other forms of
breach of the peace.
There was no existence of a relationship of
employers and employees between plaintiffs and
defendants, although defendants' purpose in
picketing plaintiffs was for the defendants'
reinstatement of their services in the new Dalisay
Theater under the new Management.
Picketing peacefully carried out is not illegal even
in the absence of employer-employee relationship,
for peaceful picketing is a part of the freedom of
speech guaranteed by the Constitution.
LIWAYWAY PUBLICATIONS, INC. vs.
PERMANENT CONCRETE WORKERS UNION
(1981)
FACTS:
 Liwayway Publications, Inc. was the 2nd sub-
lessee of the premises of the respondent
Permanent Concrete Products, Inc, in Manila
 The EEs of Permanent Concrete declared a
strike. For unknown reason, they picketed,
stopped and prohibited Liwayway’s truck from
entering the compound to load newsprint from
its bodega. The union members also
intimidated the and threatened to harm the
Liwayway’s EEs who were in the truck.
 Liwayway filed an action for damages and
injunction against the union in the CFI Manila
 CFI: issued preliminary injunction and
award damages to the ER.
 The union contends that the CFI has no
jurisdiction over the case because the case
arose out of labor dispute and that their
picketing is an extension of freedom of speech
guaranteed by the Constitution
Issue: Whether Liwayway is a third-party or an
innocent bystander whose right has been invaded
and, therefore entitled to protection by regular
courts
HELD: YES
We find and hold that there is no connection
between the Liwayway Publications, Inc. and the
striking Union
Although picketing is not prohibited , a picketing
labor union has no right to prevent employees of
another company from getting in and out of its
rented premises, otherwise it will be held liable for
damages for its act against innocent bystanders.
PHIL BLOOMING MILLS EMPLOYEES ORG. vs.
PHIL BLOOMING MILLS INC. (1973)
FACTS:
 The workers of respondent Blooming Mills
Inc. planned a demonstration in Malacanang to
protest alleged abuses of the Pasig Police
 Upon learning of this plan, the Company
management called a meeting with the union
officers
 The Company officers warned the union
officers that the planned demonstration would
be in violation of the “no strike clause” of the
CBA.
 The union officers asserted that the
demonstration had nothing to do with the
Company with which the Union had no dispute
 When the workers proceeded with the
demonstration despite the pleas of the
Company, it filed an ULP case against the Union
and its officers for violation of the “no strike
clause” of the CBA
 CIR: declared the Union and its officers
guilty if bargaining in bad faith for violating the
CBA and ordered the dismissal of the union
officers
Issue: Whether the Union and its officers were
rightfully dismissed the respondent company?
HELD: NO. CIR reversed.
The demonstration held by the EEs before the
Malacanag was against alleged abuses of some
Pasig Policemen and not against the ER. Said
demonstration was purely and completely an
exercise of freedom of expression. They are only in
the exercise of their civil and political rights for
their mutual aid and protection from what they
believed are police excesses.
GREAT PACIFIC LIFE EMPLOYEES UNION vs.
GREAT PACIFIC LIFE ASSURANCE CORP. (1999)
FACTS:
 Petitioner Great Pacific Life Employees
Union and Respondent Great Pacific Life
Assurance Corporation entered into a CBA.
Before the expiration of the CBA, the parties
submitted their respective proposals and
counter-proposals on its projected renewal.
 The ensuing series of negotiations however
resulted in a deadlock which later on resulted
into a Strike
 The Company required all striking
employees to explain in writing within 48 hours
why no disciplinary action, including possible
dismissal, should be taken against them.
Complying with the order, UNION President
Alan Domingo and some strikers explained that
they did not violate any law as they were
merely exercising their constitutional right to
strike. Petitioner Rodel P. de la Rosa and the
rest of the strikers however ignored the
management directive.
 GREPALIFE found the explanation of
Domingo totally unsatisfactory and considered
de la Rosa as having waived his right to be
heard. Thus, both UNION officers were
terminated. Notwithstanding their dismissal
from employment, Domingo and de la Rosa
continued to lead the members of the striking
union in their concerted action against
management.
 Domingo and de la Rosa sued GREPALIFE
for illegal dismissal, ULP and damages.
 Labor Arbiter: ruled in favor of the EEs
and ordered their reinstatement.
 NLRC: reversed LA and ruled in favor of ER.
Issue: Whether the dismissal of the union officers
is discriminatory constituting ULP?
HELD: NO. NLRC affirmed.
The right to strike, while constitutionally
recognized, is not without legal constrictions.
Under Art. 264 of the LC, ''any worker or union
officer who knowingly participates in the
commission of illegal acts during a strike may be
declared to have lost his employment status."
The decision of respondent GREPALIFE to consider
the union officers as unfit for reinstatement is not
essentially discriminatory and constitutive of an
ULP. Discriminating involves either encouraging
membership in any labor organization or is made
on account of the employee's having given or
being about to give testimony under the Labor
Code. These have not been proved in this case
To elucidate further, there can be no
discrimination where the employees concerned are
not similarly situated. A union officer has larger
and heavier responsibilities than a union member.
Union officers are duty bound to respect the law
and to exhort and guide their members to do the
same; their position mandates them to lead by
example. By committing prohibited activities during
the strike, de la Rosa as Vice President of petitioner
UNION demonstrated a high degree of imprudence
and irresponsibility. Verily, this justifies his
dismissal from employment. Since the objective of
the Labor Code is to ensure a stable but dynamic
and just industrial peace, the dismissal of
undesirable labor leaders should be upheld.
GOLD CITY PORT SERVICE vs. NLRC (1995)
FACTS:
 EEs of petitioner Gold City declared a strike
against the latter. ER filed a complaint for Illegal
Strike with prayer for a restraining
order/preliminary injunction.
 LA: found the strike to be illegal. The
workers who participated in the illegal strike did
not, however, lose their employment, since
there was no evidence that they participated in
illegal acts. As regards the six union officers,
the Labor Arbiter ruled that they could not have
possibly been "duped or tricked" into signing
the strike notice for they were active
participants in the conciliation meetings and
were thus fully aware of what was going on.
Hence, said union officers should be accepted
back to work after seeking reconsideration from
herein petitioner.
 NLRC: affirmed with modification the
Arbiter's decision. It held that the concerted
action by the workers was more of a "protest
action" than a strike. Private respondents,
including the six union officers, should also be
allowed to work unconditionally to avoid
discrimination.
Issue: Whether the union members and officers
were rightfully dismissed?
HELD:
Under Article 264 of the Labor Code, a worker
merely participating in an illegal strike may not be
terminated from his employment. It is only when
he commits illegal acts during a strike that he
may be declared to have lost his employment
status. Since there appears no proof that these
union members committed illegal acts during the
strike, they cannot be dismissed. Hence, they are
entitled to reinstatement.
However, considering that a decade has already
lapsed from the time the disputed strike occurred,
we find that to award separation pay in lieu of
reinstatement would be more practical and
appropriate. No backwages will be awarded to
union members as a penalty for their participation
in the illegal strike.
The fate of Union Officers is different. Their
insistence on unconditional reinstatement or
separation pay and backwages is
unwarranted and unjustified. For knowingly
participating in an illegal strike, the law mandates
that a union officer may be terminated from
employment. The union officers are, therefore, not
entitled to any relief,
WHO DECLARES LOSS OF EMPLOYMENT
STATUS? – The Employer. The law, using the word
“may,” grants the ER the option of declaring a
union officer who participated in an illegal strike as
having lost his employment.
RELIANCE SURETY & INSURANCE INC. vs.
NLRC
FACTS:
 Reliance Surety Insurance Co., Inc., thru its
manager, effected a change in the seating
arrangement of its personnel to avoid
unnecessary loss of productive working time
due to personal and non-work-related
conversations, personal telephone calls and
non-work-connected visits by personnel to
other departments
 4 EEs protested the transfer of their tables
and seats, claiming that the change was
without prior notice and was done merely to
harass them as union members. A heated
discussion ensued, during which said EEs were
alleged to have hurled unprintable insults to
the manager and supervisors. They were
placed under preventive suspension and
dismissed after investigation
 The Company Union filed in behalf of the
dismissed EEs a complaint for illegal dismissal.
 While the complaint for illegal dismissal and
ULP was pending, the union went on strike and
picketed the company premises by forming
human barricades, which effectively obstructed
the free ingress to and egress from its
premises, preventing its officials and
employees from doing their usual duties.
 The Company filed a petition to declare the
strike illegal for failure to observe legal strike
requirements.
 LA: found the strike to be illegal.
 NLRC: affirmed LA. However, it ordered
that the striking union officers be reinstated
without backwages instead of being dismissed.
Issue: Whether strikers who have staged an
“illegal” strike and not marked with good faith
may be reinstated to work.
HELD: NO. NLRC REVERSED.
There is no dispute that the strike in question
was illegal, for failure of the striking personnel to
observe legal strike requirements, to wit: (1) as to
the fifteen-day notice; (2) as to the 2/3 required
vote to strike done by secret ballot; (3) as to
submission of the strike vote to the Department of
Labor at least seven days prior to the strike.
Good faith is a valid defense against claims of
illegality of a strike. We do find, however, not a
semblance of good faith here, but rather, plain
arrogance, pride, and cynicism of certain workers.
CROMWELL COMMERCIAL EMPLOYEES AND
LABORERS UNION vs. CIR (1964)
FACTS:
 Cromwell Commercial Inc. and its Company
Union entered into a CBA, among those agreed
is a salary increase to the permanent EEs and
to restore all salesmen to the status of salary
basis.
 However, the company gave no salary
increase to its employees, except to 3 who
were not union members. The salaries of the
salesmen were not really restored.
 When 2 EEs were dismissed, the Union
struck and picketed the premises of the
company. The company warned the strikers
that they will be dismissed if they will not
return to work because the strike violates the
“no strike clause” in the CBA
 The Union filed with the CIR a ULP case
against the Company.
  CIR: ordered reinstatement to some of the
EEs giving them only half backwages, other
strikers was not awarded any backwages at all,
and there were 3 strikers denied of
reinstatement.
Issue: Whether the EEs that were denied
reinstatement were discriminatorily dismissed,
hence entitled to backwages?
HELD: NO. CIR AFFIRMED
2 types of employees involved in ULP cases:
(1) those who were discriminatorily dismissed
for union activities; and
(2) those who voluntarily went on strike.
Both are entitled to reinstatement. HOWEVER,
although discriminatorily discharged, reinstatement
can be denied because of (1) unlawful conduct or
(2) because of violence.
GR: No BACKWAGES on strike. In an economic
strike, the strikers are not entitled to backwages on
the principle that “a fair day’s wage” accrues only
for a “fair day’s labor”
EXPN: Discriminatorily dismissed EEs received
backpay from the date of the act of discrimination
In the CAB, the EEs denied of reinstatement were
found guilty of acts of violence consisting of hurling
stones which smashed glass windows of the
building of the company and the headlights of a car
and the utterance of obscenities such as "putang
ina."
IF, DURING THE STRIKE, A STRIKING EE HAS
FOUND ANOTHER JOB, IS HE ENTITLED FOR
REINSTATEMENT?
∼ YES. The mere fact that strikers or
dismissed EEs have found such employment
elsewhere is not necessarily a bar to their
reinstatement.
CONSOLIDATED LABOR ASSOCIATION OF THE
PHILS. vs. MARSMAN & CO., INC.,(1964)
FACTS:
 The Union Marsman & Company Employees
and Laborers Association (MARCELA), entered
into a CBA with MARSMAN and COMPANY.
 Despite several meetings, the parties failed
to reach an agreement which is eventually lead
to a strike
 It appears that the strike was attended by
act of violence on the part of certain strikers.
 In the Sec. of Labor, the strikers agreed to
return to work on the promise that the
Company would discuss their demands with
them.
 While the Company admitted some of the
strikers, it REFUSED readmission to others
unless they ceased to be active as union
members. As a result, the strike and picketing
were resumed.
 The Union contends that the strikers were
discriminately dismissed which is an ULP; hence
they are entitled to back wages.
Issue: Whether the strikers are entitled to
backpay.
HELD: NO
The SC ruled that “in an economic strike, the
strikers ARE NOT ENTITLED to backpay, since the
employer SHOULD GET THE EQUIVALENT DAY’S
WORK FOR WHAT HE PAYS HIS EMPLOYEES. During
the time that the strike was an economic one,
complainant had no right to backpay.
COURT’S DISCRETION ON BACKWAGES
Even after finding of ULP by the ER, award of
backwages rests on the Court’s discretion
NAT’L FEDERATION OF LABOR vs. NLRC
(1997)
FACTS:
 Respondent PERMEX Producer and Exporter
Corporation is a Zamboanga City-based
corporation engaged in the business of fish and
tuna export.
 The ER dismissed some of its EEs who
happended to be members of the National
Federation of Labor
 PERMEX contended that the dismissed EEs
were using their union activities to go on
undertime or to justify their constant and
frequent absences which evidently was a
violation of company policy
 As a result, over 200 workers picketed
outside company premises. The gates were
barricaded, thus blocking ingress and egress of
company vehicles, trapping 50 workers inside
and paralyzing company operations.
Additionally, 700 non-striking workers were
prevented from working
 PERMEX filed a complaint to declare the
strike as illegal. Likewise, NFL filed a case
against PERMEX for ULP and damages
 LA: declared the strike illegal and awarded
PERMEX 500K for moral and exemplary
damages.
 NLRC: affirmed LA but deleted the moral
and exemplary damages and instead award
P300T as compensatory damages to PERMEX.
Issue: Whether the NLRC committed GAD
HELD: NO
In order that damages may be recovered, the best
evidence obtainable by the injured party must be
represented. Actual or compensatory damages
cannot be presumed, but must be duly proved,
and so proved with a reasonable degree of
certainty.
If the proof is flimsy and insubstantial, no damages
will be awarded." We consider the amount of
P3000,000.00 just and reasonable under the
circumstances
- KINDS OF EMPLOYMENT -
SINGER SEWING MACHINE CO. vs. DRILON
(1991)
FACTS:
 Respondent union filed a petition for “direct
certification” as the sole and exclusive
bargaining agent of Petitioner Company in
Baguio.
 The Company opposed on the ground that
the union members are actually not
employees but are independent
contractors as evidenced by the collection
agency agreement which they signed.
 Med-Arbiter: finding that there exists an
ER-EE relationship between the union members
and the Company, granted the petition for
certification election
 The Union contended that they "perform
the most desirable and necessary activities for
 the continuous and effective operations of the
business of the petitioner Company" (citing Art.
280 of the LC)
Issue: Whether Art. 280 may be use as a yardstick
in determining the existence of employment
relationship.
HELD: NO
ARTICLE 280  applies where the existence of
ER-EE relationship is NOT THE ISSUE in the dispute.
It merely distinguishes between 2 kinds of EEs, i.e.,
regular employees and casual employees, for
purpose of determining the right of an EE to certain
benefits, to join or form a union, or to security of
tenure.
BAGUIO COUNTRY CLUB CORP vs. NLRC
(1992)
FACTS:
 Private respondent Jimmy Calamba was
employed by petitioner company on a day to
day basis as laborer and dishwasher for a
period of 10 months . He was also hired as a
gardener for more than 1 year when he was
dismissed by the petitioner.
 Calamba filed complaint for illegal dismissal
 LA: declared Calamba as a regular EE and
ordered his reinstatement.
 NLRC: affirmed LA
 Petitioner maintains that private respondent
Calamba was a contractual employee whose
employment was for a fixed and specific period
as set forth and evidenced by the private
respondent's contracts of employment
Issue: Whether Calamba has acquired the status
of regular EE
HELD: YES. NLRC affirmed
The nature of private respondent Colombo's
employment as laborer, gardener, and dishwasher
pertains to a regular employee because they are
necessary or desirable in the usual business of
petitioner as a recreational establishment.
1 “Day-to-Day Contractual” EE becoming
Regular
The repeated re-hiring and continuing need of
service of the EE are sufficient evidence of the
necessity and indispensability of his service to the
ER’s business or trade.
BETA ELECTRIC CORP. vs. NLRC (1990)
FACTS:
 Petitioner Company hired the private
respondent Luzviminda Petilla as clerk typist
effective December 15, 1986 until January 16,
1987. The Co. gave her an extension up to June
30, 1987.
 On June 22, 1987 her services were
terminated without notice or investigation.
Hence, she filed a complaint for illegal
dismissal.
 Petitioner Co. argues mainly that the private
respondent's appointment was TEMPORARY and
hence she may be terminated at will.
Issue: Whether the dismissal is valid?
HELD: NO
An employment may only be said to be TEMPORARY
where it has been fixed for a specific undertaking
the completion and the nature of services to be
performed is SESONAL and the employment is for
the duration of the season.
1 Temporary EE becoming Regular --
A typist-clerk cannot be said as a temporary EE
because it is far from being specific or seasonal;
she is a regular EE because he has been engaged
to perform activities necessary and desirable in the
usual business.
SALAZAR vs. NLRC (1996)
FACTS:
 Petitioner Salazar, was employed as
construction/project engineer by HL Carlos
Construction for the construction of the Monte
de Piedad building in Cubao, Quezon City.
 Salazar received a memorandum issued by
the company’s project manager, informing him
of the termination of his services.
 Salazar filed a complaint for illegal
dismissal, and for non-payment of benefits
 LA: declared that Salazar is not entitled to
separation pay. He was hired as a PROJECT
EMPLOYEE and his services were terminated
due to the completion of the project.
 NLRC affirmed
Issue: Whether Salazar is a project EE and,
therefore, not entitled to separation pay
HELD: YES
GR: Project EEs are entitled to separation pay
EXPN: Project EEs are not entitled to separation
pay if they are terminated as a result of the
completion of the project, regardless of the
projects in which they have been employed.
Salazar’s dismissal was due to the completion of
the construction of the building.
DE JESUS vs. PHILIPPINE NATIONAL
CONSTRUCTION CORP. (1991)
FACTS:
 Petitioner Eugenio De Jesus, was a
carpenter for the respondent Philippine
National Construction Corporation. While on
duty, he vomited blood and was treated at the
Company clinic. After 3months, he reported
back, but he was no longer accepted.
 De Jesus filed a complaint for reinstatement
with backwages and payment legal benefits.
 The Company contended that De Jesus was
hired as a PROJECT EMPLOYEE and his
separation was due to the completion of the
project.
 Salazar contended that he was given
appointments for specific project since 1974 up
to 1984. Hence, he has become a REGULAR EE
and not a PROJECT EE who may be terminated
only for a lawful cause.
Issue: Whether Salazar is considered a regular EE
HELD: YES
A non-project EE is entitled to regular employment
if he has rendered service for more than 10 years.
As such he can not be terminated unless for just
cause.
There are 3 types of non-project employees;
1. Probationary; 2. Regular; and 3. Casual
Based on the action form filed by the petitioner he
is considered as probationary who after 6 months
have achieve a regular status.
MERCADO, SR., vs. NLRC (1991)
FACTS:
 Petitioners were agricultural workers utilized
by private respondents in all the agricultural
phases of work on the 7 1/2 hectares of rice
land and 10 hectares of sugar land owned by
the latter;
 They contended that they started to work in
the farm of private respondents between 1949
and 1979. In any case, their individual
employment exceeds 1 year.
 Petitioners were dismissed from work.
Hence, they filed a complaint for illegal
dismissal
 Private respondent Cruz denied that the said
petitioners were her regular employees and
contended that she engaged their services
through spouses Mercado who supply workers
needed by owners of various farms, but only to
do a particular phase of agricultural work
necessary in rice and sugar production and
after which they would be free to render their
services to other farm owners who need their
services.
Issue: Whether petitioners are considered regular
EEs and, therefore, entitled to benefits.
HELD: NO
Project EEs do not become Regular EEs although
service exceeds 1 year.
Although the workers rendered service for almost
30 years, they cannot be considered as regular or
permanent employee, because of the fact that:
1. They were FREE to work for other
farm owners;
2. They FREE to CONTRACT their
service with other farm owner;
3. They were MERE project
employees, who could be hired by other
farm owners.
Petitioners being project EEs, or, to use the correct
term, seasonal EEs, their employment legally ends
upon the completion of each project the season
BRENT SCHOOL, INC vs. ZAMORA (1990)
FACTS:
 Respondent Doroteo R. Alegre was engaged
as athletic director by Brent School, Inc. for a
fixed and specific term of five (5) years,
 Subsequent subsidiary agreements
reiterated the same terms and conditions,
including the expiry date, as those contained in
the original contract.
 3 months before the expiration of the
stipulated period, Alegre was terminated on the
ground of completion of contract and expiration
of definite period of employment
 Alegre protested that since his services were
necessary and desirable in the usual business
of his ER, and his employment had lasted for 5
years, he had acquired the status of a regular
employee and could not be removed except for
valid cause.
Issue: Whether Alegre was lawfully teminiated?
HELD: YES
Article 280  does not proscribe or prohibit
employment contract with a fixed period,
PROVIDED the same is entered into by the parties
without any force, duress or improper pressure
upon the EE and in the absence of vitiating
consent
Reason: Contracts of employment govern the
relationship of the parties. Any stipulation in the
contract, not contrary to law, morals, good
customs, public order and public policy, is valid,
binding and must be respected.
***This practice is however legally questionable if
done in a more or less continuous basis with the
objective of avoiding regularization as it in effect
circumvents the law on security of tenure of the
workers.
In the CAB, the employment contract is valid,
binding, and must be respected.
PUREFOODS CORP. vs. NLRC (1997)
FACTS:
 Private respondents (numbering 906) were
hired by petitioner Pure Foods Corporation to
work for a fixed period of FIVE MONTHS at its
tuna cannery plant in General Santos City.
 After the expiration of their respective
contracts of employment, their services were
terminated. Hence, they filed a complaint for
illegal dismissal
 LA: dismissed the complaint on the ground
that the private respondents were mere
CONTRACTUAL WORKERS, and not regular
employees; hence, they could not avail of the
law on security of tenure.
 NLRC: reversed LA holding that the private
respondents were regular employees. It
declared that the contract of employment for
five months was a scheme to prevent [private
respondents'] right to security of tenure" and
should therefore be struck down and
disregarded for being contrary to law, public
policy, and morals.
Issue: Whether private respondents are
considered regular EEs?
HELD: YES. NLRC affirmed.
SC struck down as invalid a 5-month contract
involving workers who were performing activities
usually necessary or desirable to the business ‘of
the company.
The practice of hiring workers on uniformly fixed
contract basis of 5 months, only to replace them
upon the expiration of their contracts with other
workers on the same employment duration, was to
circumvent the constitutional guarantee on
security of tenure and, therefore, contrary to public
policy. To uphold the contractual arrangement
between the employer and the workers would in
effect permit the former to avoid hiring permanent
or regular employees by simply hiring them on a
“temporary or casual basis”, thereby violating the
employees’ security of tenure in their jobs.
MANILA ELECTRIC CO. vs. NLRC (1989)
FACTS:
 Complainant Ramon L. Meris was hired by
respondent MERALCO as a PROBATIONARY
EMPLOYEE for 5 months as messenger. His
work among others, was to file pleadings in
court, serve summons for execution, verify or
 follow-up cases in court and other related
matters under the legal department.
 His supervisors were dissatisfied with his
performance for being neglectful of his duties
and he was also uncooperative toward co-
employees and disrespectful to his superiors.
 Ramon received a Memorandum, advising
him of the termination of his probationary
employment.
 LA: ordered the reinstatement of Ramon.
 NLRC: sustained the LA and held that the
dismissal was illegal
Issue: Whether the dismissal of the ER before the
6 months probationary was just and valid?
HELD: YES. NLRC reversed.
The ER has the right to terminate probationary
employment on justifiable causes
A probationary employee may be dismissed for
cause at any time before the expiration of six (6)
months after hiring. If after working for less than
six (6) months, he is found to be unfit for the job,
he can be dismissed. But if he continues to be
employed longer than six (6) months, he ceases to
be a probationary employee and becomes a regular
or permanent employee.
A.M. ORETA & CO., INC. vs. NLRC (1989)
FACTS:
 Private respondent Sixto Grulla was
engaged by Engineering Construction and
Industrial Development Company (ENDECO)
through A.M. Oreta and Co., Inc., as a carpenter
in its projects in Jeddah, Saudi Arabia.
 The contract of employment, which was
entered into was for a period of 12 months.
Grulla left the Philippines for Jeddah, Saudi
Arabia
 Grulla met an accident which fractured his
lumbar vertebra while working at the jobsite. He
was rushed to the New Jeddah Clinic and was
confined there for 12 days. Grulla was
discharged from the hospital and was told that
he could resume his normal duties after
undergoing physical therapy for two weeks.
 Grulla reported back to his Project Manager
and presented a med certificate declaring him
already fit for work. Since then, he started
working again until he received a notice of
termination of his employment. Hence, he filed
a complaint for illegal dismissal
Issue: Whether the EE was lawfully terminated
HELD: NO
A probationary EE cannot be removed except for
cause during the period of probation. Although a
probationary or temporary EE has limited tenure,
he still enjoys “security of tenure.” During his
tenure, or before the contract expires, he cannot be
removed except as provided for by the law.
TERMINATION OF EMPLOYMENT:
Consequences of Termination
MANGGAGAWA NG KOMUNIKASYON SA
PILIPINAS and ANTONIO L. CRUZ vs. NLRC and
PLDT (1992)
FACTS:
 Petitioner Cruz had been an ER of PLDT for
16 years as an installer/repairman when he was
terminated.
 It appears that sometime in August 1985,
Cruz and co-repairman Moldera was instructed
to repair installations located at 325 Acacia
Lane, Mandaluyong. According to PLDT, the
telephone numbers installed on the said
address were actually reinstalled and
functioning at 323 Acacia Lane, Mandaluyong.
This “out-move” of the telephone was
considered illegal by the company there being
no service order. Hence, Cruz was dismissed on
the ground of fraud and serious misconduct.
 Both LA and NLRC arrived at the conclusion
that said EE should be dismissed although with
financial assistance (10K). This was questioned
by the PLDT
Issue: Whether Cruz is entitled to financial
assistance
HELD: YES
The dismissal of Cruz was valid. PLDT complied
with procedural due process prior to termination of
Cruz for violation of company rules involving what
can be considered fraud and dishonesty.
When there is doubt that dishonesty was
committed, financial assistance may still be
awarded to an EE who has rendered long years of
service. Despite the nature of offense, financial
assistance on ground of compassionate justice
may still be given.
PINES CITY EDUCATIONAL CENTER and
EUGENIO BALTAO vs. NLRC (1993)
Mercury Drug Rule Abandoned. Reiterated the
doctrine laid down in Ferrer
FACTS:
 Private respondents were all employed as
teachers on “probationary basis” by petitioner
Pines City Educational Center.
 Said teachers signed contracts of
employment with petitioner for a fixed
duration. Due to the expiration of the contracts
and their poor performance as teachers, they
were notified of not to renew their contracts
anymore.
 The teachers filed a complaint for illegal
dismissal
 LA: ruled in favor of the teachers and
ordered their reinstatement and to pay their
full backwages and other benefits and
privileges without qualification and deduction
from the time they were dismissed up to their
actual reinstatement.
 NLRC: affirmed the LA
Issue: Whether the LA and NLRC are correct in
ordering the reinstatement and payment of full
backwages
HELD: NO. NLRC reversed.
Interim earning should not be deducted from the
awarded backwages. The law provides no
qualification nor does it state that earned income
by the EE during the period of his unjust dismissal
to actual reinstatement should be deducted from
such backwages. When the law does not provide,
the court shall not improvise.
The order for their reinstatement and payment of
full backwages and other benefits and privileges
from the time they were dismissed up to their
actual reinstatement is proper, conformably with
Article 279 of the Labor Code, as amended by RA
6715 which took effect on March 21, 1989.
HOWEVER, in ascertaining the total amount of
backwages payable to them, we go back to the rule
prior to the Mercury Drug rule that the total
amount derived from employment elsewhere by
the employee from the date of dismissal up to the
date of reinstatement, if any, should be
deducted therefrom. We restate the underlying
reason that employees should not be permitted to
enrich themselves at the expense of their
employer. To this extend, our ruling in Alex Ferrer,
et al. vs. NLRC is hereby modified.
BUSTAMANTE vs. NLRC (1996)
Pines City Ruling Abandoned
FACTS:
Evergreen Farms claimed that petitioners are not
entitled to recover backwages because they were
not actually dismissed but their probationary
employment was not converted to permanent
employment; and assuming that petitioners are
entitled to backwages, computation thereof should
not start from cessation of work up to actual
reinstatement, and that salary earned elsewhere
(during the period of illegal dismissal) should be
deducted from the award of such backwages.
HELD:
The “full backwages” amendment by RA 6715 has
NO RETROACTIVE EFFECT; it applies only
prospectively. Hence, the rule is: where the illegal
dismissal happened before the effectivity of RA
6715 (3/21/89), the award of backwages is limited
to 3 years without deduction or qualification. BUT if
the illegal dismissal happened on or after the
effectivity of RA 6715, the award of backwages
should be computed from the time of illegal
dismissal up to actual reinstatement without any
deductions.
WENPHIL CORP. vs. NLRC (1989)
DISMISSAL IS LEGAL: Dismissal is justified, but
because there was no due process, EE is entitled to
indemnification
FACTS:
 Private respondent Roberto Mallare was
hired by Wephil Corp. as a crew member at its
Cubao Branch.
 Mallare had an altercation with a co-
employee, Job Barrameda, as a result of which
he and Barrameda were suspended and later on
served with notice of dismissal.
 Mallare filed a complaint for llegal dismissal.
 LA: dismissed the complaint for lack of
merit.
 NLRC: reversed LA and ordered the
reinstatement of Mallare
 Wenphil prayed for restraining order
alleging that NLRC committed a grave abuse of
discretion. The court issued a restraining order.
 Mallare contended that he was denied due
process because there was no investigation
prior his dismissal.
 According to Wenphil, under the Personnel
Manual of the corp., an investigation shall only
be conducted if the offense committed by the
employee is punishable with the penalty higher
than suspension of fifteen (15) days and the
erring employee requests for an investigation of
the incident. Wenphil alleges that Mallare did
not ask for investigation, hence waived his right
to the investigation.
Issue: Whether Mallare was denied due process,
hence entitled to indemnity
HELD: YES
The contention of Wenphil is untenable.
In the CAB, Mallare received an official notice of his
termination 4 days later after he was dismissed.
His refusal to explain his side cannot be considered
as a waiver of his right to an investigation.
Although in the Personnel Manual, it states that an
erring employee must request for an investigation
it does not thereby mean that the ER is thereby
relieved of the duty to conduct an investigation
before dismissing its EE.
The failure of petitioner to give private respondent
the benefit of a hearing before he was dismissed
constitutes an infringement of his constitutional
right to due process of law and equal protection of
the laws.
A dismissal for a valid reason is legal and
valid, but the ER who does not observe due
process must pay some INDEMNITY for its
breach of legal procedure; the measure of
damages will depend on the facts of the case, and
on the gravity of the omission by the employer
HELLENIC PHIL. SHIPPING INC. vs. EPIFANIO
C. SIETE and NLRC (1991)
Wenphil Doctrine does not apply.
ILLEGAL DISMISSAL: Dismissal is NOT justified; Due
Process not observed.
FACTS:
 Capt. Epifanio Siete was employed as
Master of M/V Houda G by Sultan Shipping Co.,
Ltd.,
 Sometime later, Capt. Wilfredo Lim boarded
the vessel and advised Siete that he had
instructions from the owners to take over its
command for unexplained reason
 Siete filed a complaint for illegal dismissal.
 Petitioner alleged in its answer that Siete
had been dismissed because of his failure to
comply with the instruction of Sultan Shipping
to erase the timber load line on the vessel and
for his negligence in the discharge of the cargo
at Tripoli that endangered the vessel and
stevedores.
 POEA: dismissed the complaint, holding
that there was valid cause for Siete’s removal.
 Siete appealed to the NLRC contending that
he was dismissed without even being informed
of the charges against him or given an
opportunity to refute them.
 NLRC: reversed the POEA holding that the
dismissal violated due process and that the
documents submitted by the petitioner were
hearsay, self-serving, and not verified.
 Hellenic argues that whatever defects
might have tainted the EE’s dismissal were
subsequently cured when the charges against
him were specified and sufficiently discussed in
the position papers submitted by the parties to
the POEA.
Issue: Whether due process was observed by the
ER
HELD: NO
The law requires that the investigation be
conducted before the dismissal, not after. That
omission cannot be corrected by the investigation
later conducted by the POEA. As the Solicitor
General correctly maintained, the due process
requirement in the dismissal process is different
from the due process requirement in the POEA
proceeding. Both requirements must be separately
observed.
While it is true that in Wenphil Corp. vs. NLRC and
Rubberworld (Phils.) vs. NLRC, the lack of due
process before the dismissal of the employee was
deemed corrected by the subsequent
administrative proceedings where the dismissed
employee was given a chance to be heard, those
cases involved dismissals that were later proved to
be for a valid cause. The doctrine in those cases is
not applicable to the case at bar because our
findings here is that the dismissal was not justified.
VIERNES vs. NLRC (2003)
EE entitled to full backwages because he was
illegally dismissed; He is also entitled to
indemnification because due process was not
observed
FACTS:
 Complainants worked as “meter readers”
with Benguet Electric Cooperative when they
were served a notice of termination because of
retrenchment. According to the company, they
need to retrench its personnel because they are
already over staffed.
 The complainants filed for illegal dismissal
contending that they were not apprentices but
regular employees whose services were illegally
and unjustly terminated in a manner that was
whimsical and capricious.
 On the other hand, the respondent invokes
Article 283 of the LC in defense of the
questioned dismissal.
 LA: dismissed the complaints for lack of
merit but ordered the ER to pay the EEs the
amount representing underpayment of their
wages, and to pay indemnity and attorney’s
fees.
 NLRC: modified LA and ordered the
reinstatement of the complainants with
payment of backwages limited to one year and
deleting the award of indemnity and attorney’s
fees.
Issue: Whether NLRC committed grave abuse of
discretion in deleting the award of indemnity
HELD: YES
An ER becomes liable to pay indemnity to a
dismissed EE if the ER fails to comply with the
requirements of due process. The indemnity is in
the form of nominal damages intended not to
penalize the employer but to vindicate or recognize
the employee’s right to procedural due process
which was violated by the employer.
We do not agree with the ruling of the NLRC that
indemnity is incompatible with the award of
backwages. These two awards are based on
different considerations. Backwages are granted on
grounds of equity to workers for earnings lost due
to their illegal dismissal from work. On the other
hand, the award of indemnity is meant to vindicate
or recognize the right of an employee to due
process which has been violated by the employer.
In the CAB, the ER failed to comply with the
provisions of Article 283 of the Labor Code which
requires an employer to serve a notice of dismissal
upon the employees sought to be terminated and
to the Department of Labor, at least one month
before the intended date of termination. Hence, it
is liable to pay indemnity to petitioners. Thus, we
find that the NLRC committed grave abuse of
discretion in deleting the award of indemnity.
PHIL. TOBACCO FLUE-CURING REDRYING
CORP vs. NLRC (1998)
FACTS:
 Petitioner company transferred its tobacco
processing plant in Balintawak, Quezon City to
Candon, Ilocos Sur. The company therein did
not actually close its entire business but merely
relocated its tobacco processing and redrying
operations to another place.
 Two groups of seasonal workers claimed
“separation benefits” after the closure of the
plant in Balintawak. Petitioner refuses to grant
separation pay to the workers belonging to the
first batch (referred to as the Lubat group),
because they had not been given work during
the preceding year and, hence, were no longer
in its employ at the time it closed its
Balintanwak plant. Likewise, it claims
exemption from awarding separation pay to
the second batch (the Luris group), because
the closure of its plant was due to “serious
business losses,” as defined in Article 283 of
the Labor Code.
 LA: ordered petitioner to pay the
complainants their respective separation pay,
equivalent to one-half month pay for every
year of service.
 NLRC: affirmed LA
 When the separation benefits were given to
the complainants, the latter alleged that there
is wrong computation when management did
not consider 3/4 of their length of service as
claimed
 According to petitioner co., the separation
pay of a seasonal worker, who works only for a
fraction of a year, should not be equated with
that of a regular worker. Petitioner submits that
the formula for the computation of a seasonal
worker’s separation pay is “Total No. Of Days
actually worked / Total No. Of Working Days in
One Yeas x Daily Rate x 15 days”
 The complainants claimed that their
separation pay should be based on the actual
number of years they have been in petitioner’s
company.
Issue: Whether the computation adopted by
petitioner company in granting complainants’
separation pay is erroneous
HELD: YES
The amount of separation pay is based on two
factors: the amount of monthly salary and the
number of years of service. Although the Labor
Code provides different definitions as to what
constitutes “one year of service,” Book Six does
not specifically define “one year of service” for
purposes of computing separation pay. However,
Articles 283 and 284 both state in connection with
separation pay that a fraction of at least six
months shall be considered one whole year.
Applying this to the case at bar, we hold that the
amount of separation pay which respondent
members of the Lubat and Luris groups should
receive is one-half (½) their respective average
monthly pay during the last season they worked
multiplied by the number of years they actually
rendered service, provided that they worked for at
least six months during a given year.
The formula that petitioner company proposes,
wherein a year of work is equivalent to actual
rendered for 303 days, is both unfair and
inapplicable, considering that Articles 283 and 284
provide that in connection with separation pay, a
fraction of at least six months shall be considered
one whole year. Under these provisions, an
employee who worked for only six months in a
given year — which is certainly less than 303 days
— is considered to have worked for one whole year.
ASIONICS PHIL. INC. and FRANK YIH vs. NLRC
(1998)
FACTS:
 Asionics Philippines, Inc. ("API"') is a
domestic corporation engaged in the business
of assembling semi-conductor chips and other
electronic products mainly for export.
 Yolanda Boaquina and Juana Gayola started
working for API as material control clerk and as
production operator when they were dismissed
by API
 API entered into a CBA with the Federation
Free Workers ("FFW"). However, a deadlock
ensued and the union decided to file a notice of
strike. API was forced to suspend operations
and Boaquina and Gayola were among the
employee asked to take a leave from work.
 Upon the resolution of the deadlock,
Boaquina and Gayola was directed to report
back to work.
 Inasmuch as its business activity remained
critical, API was constrained to implement a
company-wide retrenchment . Boaquina was
one of those affected by the retrenchment. And
was informed that her services were to be
dispensed with
 Dissatisfied with their union (FFW), Boaquina
and Gayola, together with some of other co-
employees, joined the Lakas ng Manggagawa
sa Pilipinas Labor Union ("Lakas Union"') where
they eventually became members of its Board
of Directors.
 Lakas Union filed a notice of strike against
API on the ground of ULP. API filed a complaint
for illegal strike
 LA: declared the strike staged by Lakas
Union to be illegal and ruled that all the officers
of the Unions at the time of the strike are to
have lost their employment status.
 Boaquina and Gayola filed a complaint for
illegal dismissal against API and its manager
Frank Yih
 LA: held that API is guilty of illegal dismissal
and ordered it to pay private respondent
Yolanda Boaquina separation pay of one-half
(1/2) month pay for every year of service, plus
overtime pay, and to reinstate private
respondent Juana Gayola with full backwages
from the time her salaries were withheld from
her until her actual reinstatement.
 NLRC: reversed LA in holding that API is
guilty of illegal dismissal but ruled that the
strike was illegal.
 Petitioner API argued that that respondents
should not be entitled to separation pay
because of their involvement in the strike which
was declared illegal.
Issue1: Whether private respondents are entitled
to separation pay despite having participated in an
illegal strike?
HELD: YES
The termination of employment of private
respondents was due to the retrenchment policy
adopted by API and not because of the former's
union activities.
Issue2: Whether a stockholder/director/officer of a
corporation can be held liable for the obligation of
the corporation absent of finding of bad faith
HELD: NO
A corporation is a juridical entity with legal
personality separate and distinct from those acting
for and in its behalf and, in general, from the
people comprising it. The rule is that obligations
incurred by the corporation, acting through its
directors, officers and employees, are its sole
liabilities. Nevertheless, being a mere fiction of
law, peculiar situations or valid grounds can exist
to warrant, albeit done sparingly, the disregard of
its independent being and the lifting of the
corporate veil. As a rule, this situation might arise
when a corporation is used to evade a just and due
obligation or to justify a wrong, to shield or
perpetrate fraud, to carry out similar unjustifiable
aims or intentions, or as a subterfuge to commit
injustice and so circumvent the law.
Nothing on record is shown to indicate that Frank
Yih has acted in bad faith or with malice in carrying
out the retrenchment program of the company. His
having been held by the NLRC to be solidarily and
personally liable with API is thus legally unjustified.
WHEREFORE, the questioned decision of the NLRC
is MODIFIED insofar as it holds herein petitioner
Frank Yih personally liable with API.
CUSTODIO vs. MINISTRY OF LABOR AND
EMPLOYMENT (1990)
FACTS:
 Petitioner Victor Custodio worked for
private resp. “First Farmers Milling and
Marketing Assoc.” as Asst. General Manager for
almost 17 years.
 The ER, through its board of directors,
decided to purchase a boiler, the cost of which
would amount to several million pesos. An
evaluation committee was constituted with
petitioner as chairman. A dispute arose
between Custodio and the general manager
regarding the committee's recommendations,
particularly, the brand of boiler recommended,
leading to charges and countercharges of
kickbacks or commissions given to officers and
directors by the suppliers. Because of this,
Cutodio submitted a letter of resignation
 In the board's meeting, Custodio’s letter of
resignation was discussed. The minutes
stated:that the letter of resignation submitted
by Mr. Victor Custodio is irrevocable and he is
considered resigned as soon as the board takes
cognizance of his irrevocable letter of
resignation.
 Custodio expressed his intention to
withdraw his letter of resignation. The
president reported that no letter of withdrawal
has been received. In as much as the Board
believed that it had no choice on the matter it
did not take any action on the resignation
except to take cognizance of it.
 When petitioner went back to work, he was
informed that he was no longer connected with
the company and transaction made by him
shall be void.
 Custodio filed a complaint for illegal
dismissal
 The Co. contends that since his resignation
letter used the word. "irrevocable," his
resignation need not be accepted by private
respondent and could no longer be withdrawn
by petitioner.
Issue: Whether the resignation of Custodio may
be withdrawn?

HELD: YES
The undisputed facts and circumstances support
the conclusion that petitioner's resignation never
became effective. Despite its being termed
"irrevocable," neither the petitioner nor the private
respondent treated it as such.
Resignation is withdrawable even if the EE
has called it irrevocable. But after it is accepted
or approve by the ER, its withdrawal needs the ER’s
consent.
WHEREFORE, the petition is GRANTED. Private
respondent is ORDERED to reinstate petitioner. But,
considering the time that has elapsed, should
petitioner's reinstatement to his former or a
substantially equivalent position be no longer
feasible, he shall be entitled to separation pay
equivalent to one (1) month's salary for every year
of service, in addition to the backwages.
HYATT TAXI SERVICES vs. CATINOY (2001)
FACTS:
 2 union officers, Catinoy and Saturnino, had
a fight inside the union office, an act that
violates company rules and union by-laws. The
union executive board decided to place them on
indefinite suspension and requested the
company, Hyatt Taxi Services Inc., to implement
it. The company place the 2 on preventive
suspension for 30 days
 Catinoy, aggrieved by the preventive
suspension since he was not the aggressor,
filed a complaint for illegal suspension. After the
lapse of 30 days, he reported to work but was
not allowed to resume his duties. He amended
his complaint to include constructive dismissal
 LA: found the Hyatt taxi to be guilty of
illegal preventive suspension and illegal
constructive dismissal
 Hyatt and the union appealed to the NLRC
 NLRC: affirmed LA.. HOWEVER, upon MFR,
the NLRC deleted the award of backwages
because there was no concrete showing that
the complainant was constructively dismissed
 CA: reinstated the LA’s decision
Issue: Whether the private respondent was
constructively dismissed
HELD: YES. CA affirmed.
Preventive suspension beyond 30 days amounts to
constructive dismissal. It shows that respondent
was not taken back by petitioner Hyatt after the 30-
day suspension period. Clearly, constructive
dismissal had already set in when the suspension
went beyond the maximum period allowed by law.
BRION vs. SOUTH PHIL UNION MISSION OF
THE 7TH DAY ADVENTIST CHURCH (1999)
FACTS:
 Petitioner Delfin A. Brion became a member
of respondent South Philippine Union Mission of
the Seventh Day Adventist Church (hereafter
SDA). He became an ordained minister and
president of the Northeastern Mindanao Mission
of the Seventh Day Adventist Church in Butuan
City.
 Respondent SDA claims that due to
corruption charges, Brion was transferred to the
Davao Mission. Thereafter, allegedly due to an
act of indiscretion with a masseuse, petitioner
was demoted to the position of Sabbath School
Director at the Northern Mindanao Mission of
the SDA located at Cagayan de Oro City. Here,
petitioner worked until he retired in 1983. As
was the practice of the SDA, petitioner was
provided a monthly amount as a retirement
benefit.
 Sometime thereafter, Brion got into an
argument with Samuel Sanes, another pastor
of the SDA. This disagreement degenerated
into a rift between Brion and the SDA,
culminating in the establishment by Brion of a
rival religious group which he called the “Home
Church.” He succeeded in enticing a number of
SDA members to become part of his
congregation
 Because of his actions, Brion was
excommunicated by the SDA and his name was
dropped from the Church Record Book. As a
consequence of his “disfellowship,” petitioner’s
monthly retirement benefit was discontinued
by the SDA.
 Brion filed an action for mandamus with the
RTC of Cagayan de Oro City asking that the
SDA restore his monthly retirement benefit.
 RTC: finds in favor of Brion and ordered
SDA to pay the retirement benefits
 CA: reversed RTC and ordered the
dismissal of Brion’s complaint.
Issue: Whether Brion is entitled to retirement
benefits
HELD: YES. We find for petitioner.
Retirement has been defined as a withdrawal from
office, public station, business, occupation, or
public duty. It is the result of a bilateral act of the
parties, a voluntary agreement between the
employer and the employee whereby the latter,
after reaching a certain age, agrees and/or
consents to sever his employment with the former.
In this connection, the modern socio-economic
climate has fostered the practice of setting up
pension and retirement plans for private
employees, initially through their voluntary
adoption by employers, and lately, established by
legislation. Pension schemes, while initially
humanitarian in nature, now concomitantly serve
to secure loyalty and efficiency on the part of
employees, and to increase continuity of service
and decrease the labor turnover by giving to the
employees some assurance of security as they
approach and reach the age at which earning
ability and earnings are materially impaired or at
an end.
Art. 287. Retirement. – Any employee may be
retired upon reaching the retirement age
established in the collective bargaining agreement
or other applicable employment contract.
In case of retirement, the employee shall be
entitled to receive such retirement benefits as he
may have earned under existing laws and any
collective bargaining agreement and other
agreements…
From the above, it can be gleaned that employer
and employee are free to stipulate on retirement
benefits, as long as these do not fall below the
floor limits provided by law.
In the present case, petitioner was adjudged by
the SDA in 1983, to be qualified for retirement,
such that when it began paying petitioner
retirement benefits in said year, it must have been
convinced that petitioner had “devoted his life to
the work of the Seventh-day Adventist Church.”
Having arrived at such a conclusion, it may not
now reverse this finding to the detriment of
petitioner.

UE vs. MINISTRY OF LABOR AND UE FACULTY
ASSOCIATION (1987)
FACTS:
 Labor and Employment directing the
University of the East to pay the faculty
members concerned retirement benefits in
accordance with their collective bargaining
agreement, in addition to the payment of
separation pay according to the Termination
Pay Law.
 The then president of the University of the
East (UE) announced the phase-out of the
College of Secretarial Education and the High
School Department respectively on the grounds
of lack of economic viability and financial
losses.
 The respondent UE Faculty Association
opposed the phaseout, contending that such
action contravened the law because it
constitutes union busting. The private
respondent filed a notice of strike with the
Bureau of Labor Relations (BLR).
 BLR conducted several conciliation
proceedings but when no amicable settlement
was reached, the respondent Minister issued an
order assuming jurisdiction over the case and
directing the BLR to receive evidence in
connection with the dispute.
 Respondent Minister of Labor ruled that the
phaseout of the two departments was arbitrary
and ordered UE to pay all affected faculty
members of the College Secretarial Education
and the High School Department a separation
pay. In addition to the termination pay, the
University is likewise directed to pay retirement
benefits to all affected faculty members who, in
accordance with the collective bargaining
agreement, are retireable prior to or at the time
of the phase-out."
 Petitioner arguesns that the award of
separation pay pursuant to the Termination Pay
Law necessarily excludes retirement benefits.
Issue: Whether the Minister of Labor and
Employment committed grave abuse of discretion
in awarding both retirement benefits and
separation pay to the faculty members affected by
the phase-out.
HELD: NO. We rule for the respondents.
Separation pay arising from a forced termination of
employment and benefits given as a contractual
right due to many years of faithful service are not
necessarily exclude each other.
Clearly, the only situation contemplated in the CBA
wherein an employee shall be precluded from
receiving retirement benefits is when said
employee is not separated from service but
transferred instead from one college or department
to another. There is no provision to the effect that
teachers who are forcibly dismissed are not entitled
to retirement benefits if the MOLE awards them
separation pay. Furthermore, since the above
provision has become in effect part of the
petitioner's policy, the same should be enforced
separately from the provisions of the Termination
Pay Law.
BALIWAG TRANSIT INC. vs. BLAS OPLE (1989)
FACTS:
 Romeo Hughes, a bus driver, met an
accident when the bus he was driving was hit
by a train. His ER sued the railroad company.
Romeo was absolved of contributory
negligence but suspended by his ER
 Soon after the judgment was rendered
against the railroad company, he renewed his
driver’s license and asked for reinstatement.
But he was asked to wait until the criminal case
was decided.
 When the criminal case was dismissed, he
repeated his request for reinstatement but it
was ignored
 Romeo’s lawyer made a formal demand in
writing but it was denied by the ER. Hence,
Romeo filed a formal complaint
 Regional Director: dismissed the
complaint on the ground that it was filed
beyond the prescriptive period prescribe in Art.
291 counted from the date of collision.
Issue: Whether the complaint was filed beyond
the prescriptive period
HELD: NO
Since a 'cause of action' requires, as essential
elements, not only a legal right of the plaintiff and
a correlative obligation of the defendant but also
'an act or omission of the defendant in violation of
said legal right,' the cause of action does not
accrue until the party obligated refuses, expressly
or impliedly, to comply with its duty.
Romeo’s cause of action accrued on May 10, 1980,
when the ER denied his demand for reinstatement.
The earlier requests made by Romeo having been
warded off with indefinite promises, and Romeo
not yet having decided to assert his right, his
cause of action could not be said to have then
already accrued. As Romeo’s complaint was filed
not later than 3 months only after such rejection,
there is no question that his action has prescribed,
whatever prescriptive period is applied.
FULL BACKWAGES
- wages from the time of illegal termination up to
the actual reinstatement
1. Mercury Drug vs. NLRC
- 3 years pay without qualification and
deduction
2. Ferrer vs. NLRC
- wages from time of illegal dismissal to
actual reinstatement MINUS earnings
elsewhere (earnings from the new job
while case is pending)
3. Osmalik Bustamante vs. NLRC
- wages from the time of illegal dismissal up
to actual reinstatement without any
deductions.
Collegio de San Juan de Letran v. Assn. Of
Employees, etc. 340 SCRA 587 (00)
Admittedly, management has the
prerogative to discipline its employees for
insubordination. But when the exercise of such
management right tends to interfere with the
employees' right to self-organization, it amounts
to union-busting and is therefore a prohibited
act. The dismissal of Ms. Ambas was clearly
designed to frustrate the Union in its desire to
forge a new CBA with the College that is
reflective of the true wishes and aspirations of
the Union members. Her dismissal was merely a
subterfuge to get rid of her, which smacks of a
pre-conceived plan to oust her from the
premises of the College. It has the effect of
busting the Union, stripping it of its strong-willed
leadership. When management refused to treat
the charge of insubordination as a grievance
within the scope of the Grievance Machinery,
the action of the College in finally dismissing her
from the service became arbitrary, capricious
and whimsical, and therefore violated Ms.
Ambas' right to due process.
San Miguel Brewery etc. v. Ople, 170 SCRA
25 (89)
Every business enterprise endeavors to
increase its profits. In the process, it may
adopt or devise means designed towards
that goal. In Abott Laboratories vs. NLRC,
164 SCRA 713, We ruled:
"x x x Even as the law is solicitous of the
welfare of the employsee, it must also
protect the right of an employer to exercise
what are clearly management prerogatives.
The free will of management to conduct its
own business affairs to achieve its purpose
cannot be denied."
So long as a company's management
prerogatives are exercised in good faith for
the advancement of the employer's interest
and not for the purpose of defeating or
circumventing the rights of the employees
under special laws or under valid
agreements, this Court will uphold them
(LVN Pictures Workers vs. LVN, 35 SCRA 147;
Phil. American Embroideries vs. Embroidery
and Garment Workers, 26 SCRA 634; Phil.
Refining Co. vs. Garcia, 18 SCRA 110). San
Miguel Corporation's offer to compensate the
members of its sales force who will be
adversely affected by the implementation of
the CDS, by paying them a so-called" back
adjustment commission" to make up for the
commissions they might lose as a result of
the CDS, proves the company's good faith
and lack of intention to bust their union.
Central Pangasinan Electric Corp. Inc.
NLRC, 528 SCRA 146 (07)
[citing Central Pang. V. Macaraeg] It is not
material that they did not “misappropriate
any amount of money, nor incur any
shortage relative to the funds in their
possession.” The basic premise for dismissal
on the ground of loss of confidence is that
the employees concerned hold positions of
trust. The betrayal of this trust is the
essence of the offence for which an
employee is penalized.
Marival Trading Inc. v. NLRC, 525 SCRA 208
(07)
However, as discussed above, in order to
consider it a serious misconduct that would
justify dismissal under the law, it must have
been done in relation to the performance of
her duties as would show her unfit to
continue working for her employer. The acts
complained of, under the circumstances they
were done, did not in any way pertain to her
duties as chemist/quality controller.
Associated Labor Union v. NLRC, 302 SCRA
708 (99) 714-716
There is no question that the employer has
the inherent right to discipline, including that
of dismissing its employees for just causes.
This right is, however, subject to reasonable
regulation by the State in the exercise of its
police power. The finding of the NLRC that an
employee violated the company rules and
regulations is subject to scrutiny by the
Court to determine if the dismissal is justified
and, if so, whether the penalty imposed is
commensurate to the gravity of his offense.
In this case, we agree with the Labor Arbiter
that dismissal would not be proportionate to
the gravity of the offense committed by
petitioner considering the value of the
articles he pilfered and the fact that he had
no previous derogatory record during his
two (2) years of employment in the
company. The Labor Arbiter is certainly
mistaken in regarding the articles taken to
be mere scraps and hence without value to
the company. They were of some value but
not enough to warrant dismissal.
Philippine Long Distance Telephone Co.
Inc. v. NLRC, 303 SCRA 9 (99)
Dismissal is the ultimate penalty that can be
meted to an employee. Where a penalty less
punitive would suffice, whatever missteps
may have been committed by the worker
ought not to be visited with a consequence
so severe such as dismissal from
employment. For, the Constitution
guarantees the right of workers to “security
of tenure.” The misery and pain attendant to
the loss of jobs then could be avoided if
there be acceptance of the view that under
certain circumstances of the case the
workers should not be deprived of their
means of livelihood.
Philips Semiconductors etc., Fadriquela,
427 SCRA 408 (04)
(Doctrinal case, cites PLDT v. NLRC doctrin
above, among other points)
v.
Central Pangasinan Elec. Corp. v.
Macaraeg, 395 SCRA 720 (03)
It is not material that they did not
“misappropriate any amount of money, nor
incur any shortage relative to the funds in
their possession.” The basic premise for
dismissal on the ground of loss of confidence
is that the employees concerned hold
positions of trust. The betrayal of this trust
is the essence of the offence for which an
employee is penalized. In the case at bar,
the respondents held positions of utmost
trust and confidence. As teller and cashier,
respectively, they are expected to possess a
high degree of fidelity. They are entrusted
with a considerable amount of cash.
Respondent de Vera accepted payments
from petitioner’s consumers while
respondent Macaraeg received remittances
for deposit at petitioner’s bank. They did
not live up to their duties and obligations.
Golden Thread Knitting Industries, Inc. v.
NLRC, 304 SeRA 568 (99)
Dismissal is the ultimate penalty that can be
meted to an employee. It must therefore
be based on a clear and not on an
ambiguous or ambivalent ground. From our
assessment of the records, we find that
petitioners exercised their authority to
dismiss without due regard to the pertinent
exacting provisions of the Labor Code. The
right to terminate should be utilized with
extreme caution because its immediate
effect is to put an end to an employee's
present means of livelihood while its distant
effect, upon a subsequent finding of illegal
dismissal, is just as pernicious to the
employer who will most likely be required
to reinstate the subject employee and
grant him full back wages and other benefits.
Cebu Filveneer Corp. v. NLRC, 286 SCRA
556 (98)
In labor-management relations, there can be
no higher penalty than dismissal from
employment. Dismissal severs employment
ties and could well be the economic death
sentence of an employee. Dismissal
prejudices the socio-economic well being of
the employee's family and threatens the
industrial peace. Due to its far reaching
implications, our Labor Code decrees that an
employee cannot be dismissed, except for
the most serious causes. The overly
concern of our laws for the welfare of
employees is in accord with the social justice
philosophy of our Constitution.
Salvador v. Phil. Mining Service Corp., 395
SCRA 729 (03)
To be sure, length of service is taken into
consideration in imposing the penalty to be
meted an erring employee. However, the
case at bar involves dishonesty and pilferage
by petitioner which resulted in respondent’s
loss of confidence in him. Unlike other just
causes for dismissal, trust in an employee,
once lost is difficult, if not impossible, to
regain. Moreover, petitioner was not an
ordinary rank-and-file employee. He
occupied a high position of responsibility. As
foreman and shift boss, he had over-all
control of the care, supervision and
operations of respondent’s entire plant. It
cannot be over-emphasized that there is no
substitute for honesty for sensitive positions
which call for utmost trust. Fairness dictates
that respondent should not be allowed to
continue with the employment of petitioner
who has breached the confidence reposed on
him. As a general rule, employers are
allowed wider latitude of discretion in
terminating the employment of managerial
employees as they perform functions which
require the employer’s full trust and
confidence.
Caoile v. NLRC, 299 SCRA 76 (98)
Now it must be noted the recent decisions of
this Court has distinguished the treatment of
managerial employees from that of rank-and-
file personnel, insofar as the application of
the doctrine of loss of trust and confidence is
concerned. Thus with respect to rank-and-
file personnel, loss of trust and confidence as
ground for valid dismissal requires proof of
involvement in the alleged events in
question, and that mere uncorroborated
assertion and accusations by the employer
will not be sufficient. But, as regards as a
managerial employee, mere existence of a
basis for believing that such employee has
breached the trust of his employer would
suffice for his dismissal. Hence, in the case of
managerial employees, proof beyond
reasonable doubt is not required, it being
sufficient that there is some basis for such
loss of confidence, such as when the
employer has reasonable ground to believe
that the employee concerned is responsible
for the purported misconduct, and the nature
of his participation therein renders him
unworthy of the trust and confidence
demanded by his position.
Habana v. NLRC, 298 SCRA 537 (98)
Voluntary resignation is defined as the
voluntary act of an employee who "finds
himself in a situation where he believes that
personal reasons cannot be sacrificed in
favor of the exigency of the service and he
has no other choice but to disassociate
himself from his employment." 35 In this
case, as indicated in the various memoranda
he received from his superiors, petitioner
was clearly having trouble performing his
job, one which undeniably carries immense
responsibilities. Notable too was petitioner's
failure to see eye with his immediate bosses,
first, Mr. Yokoo and then Mr. Okawa.
Because of these difficulties, it was quite
reasonable for petitioner to think of, and
eventually, relinquishing his position
voluntarily (and get a fat sum as severance
pay in the bargain) instead of waiting to be
fired.
BMG Records (Phil.) Inc. v. Aparecio, 532
SCRA 300 (07)
Resignation is the voluntary act of an
employee who is in a situation where one
believes that personal reasons cannot be
sacrificed in favor of the exigency of the
service, and one has no other choice but to
dissociate oneself from employment. It is a
formal pronouncement or relinquishment of
an office, with the intention of relinquishing
the office accompanied by the act of
relinquishment. As the intent to relinquish
must concur with the overt act of
relinquishment, the acts of the employee
before and after the alleged resignation
must be considered in determining whether
in fact, he or she intended to sever from his
or her employment.
Azcor Manufacturing Inc. v. NLRC, 303
SCRA 26 (99)
To constitute a resignation, it must be
unconditional and with the intent to operate
as such. There must be an intention to
relinquish a portion of the term of office
accompanied by an act of relinquishment.
Metro Transit Organization Inc. v. NRLC,
284 SCRA 308 (98)
Evidently the complainant was asked to
make a choice whether to tender his
resignation or be terminated for his
absences which to our mind is anchored on
justifiable grounds. Such compulsion to
make an unnecessary choice placed undue
and unjustifiable pressure on the employee
who otherwise would not have thought of
leaving his position as Station Teller if he
had not been induced to do so. This being
the case, the resignation filed by the
complainant did not become effective.
Globe Telecom v. Crisologo, 329 SCRA 811
(07)
Resignation is the voluntary act of an
employee who finds herself in a situation
where she believes that personal reasons
cannot be sacrificed in favor of the exigency
of the service and that she has no other
choice but to disassociate herself from
employment. 49
Employees resign for various reasons. A big
salary is certainly no hindrance to a
voluntary cessation of employment. Human
resource studies reveal that various factors
(in and out of the workplace) affect an
employee �s employment decision. 50
In this
instance, respondent would have suffered a
miscarriage had she continued to work. She
obviously resigned for the sake of her child's
well-being, motherhood clearly taking
precedence over her job.
Vicente v. CA 531 SCRA 244 (07)
In voluntary resignation, the employee is
compelled by personal reason(s) to
disassociate himself from employment. It is
done with the intention of relinquishing an
office, accompanied by the act of
abandonment. To determine whether the
employee indeed intended to relinquish such
employment, the act of the employee before
and after the alleged resignation must be
considered.
Phil. Wireless Inc. v. NLRC, 310 SCRA 653 (99)
The Court has held that constructive
dismissal is “an involuntary resignation
resorted to when continued employment is
rendered impossible, unreasonable or
unlikely; when there is a demotion in rank
and/or a diminution in pay; or when a clear
discrimination, insensibility or disdain by an
employer becomes unbearable to the
employee.” In this particular case,
respondent voluntarily resigned from his
employment. He was not pressured into
resigning.
Voluntary resignation is defined as the act of
an employee who “finds himself in
situation where he believes that personal
reasons cannot be sacrificed in favor of the
exigency of the service and he has no other
choice but to disassociate himself from his
employment.
Pascua v. NLRC, 287 SCRA 554 (98)
Basic is the doctrine that resignation must be
voluntary and made with the intention of
relinquishing the office, accompanied with an
act of relinquishment. 30
Based on the
evidence on record, we are more than
convinced that Petitioners Lilia Pascua, Mimi
Macanlalay, Susan C. De Castro and Violeta
Soriano did not voluntarily quit their jobs.
Rather, they were forced to resign or were
summarily dismissed without just cause.
Petitioners � except Victoria L. Santos � listening public to employer's station.
forthwith took steps to protest their layoff
and thus cannot, by any logic, be said to
have abandoned their work.
Azcor Manufacturing Inc. v. NLRC, 303 SCRA
26 (99)
[supra]
Valdez v. NLRC, 286 SCRA 87 (98)
Resignation is defined as the voluntary act of
an employee who finds himself in a situation
where he believes that personal reasons
cannot be sacrificed in favor of the exigency
of the service, and, that he has no other
choice but to disassociate himself from his
employment. Resignation is a formal
pronouncement of relinquishment of an
office. It must be made with the intention of
relinquishing the office accompanied by an
act of relinquishment. 10
The cardinal rule in termination cases is that
the employer bears the burden of proof to
show that the dismissal is for just cause,
failing in which it would mean that the
dismissal is not justified. 11 This rule applies
adversely against herein respondent
company since it has utterly failed to
discharge that onus by the requisite
quantum of evidence.
BMG Records Phil. Inc. v. Aparecio, 532 SCRA
300 (07)
[supra] … the acceptance by petitioners of
Aparecio's resignation rendered the same
effective. [31] Upon such acceptance, it may
not be unilaterally withdrawn without the
consent of petitioners. [32]
When the
employee later signified the intention of
continuing his or her work, it was already up
to the employer to accept the withdrawal of
his or her resignation. The mere fact that the
withdrawal was not accepted does not
constitute illegal dismissal, the acceptance
of the withdrawal of the resignation being
the employer's sole prerogative.
Manila Broadcasting Co. v. NLRC, 294 SCRA
486 (98)
What is involved in this case is an unwritten
company policy considering any employee
who files a certificate of candidacy for any
elective or local office as resigned from the
company. Although §11(b) of R.A. No. 6646
does not require mass media commentators
and announcers such as private respondent
to resign from their radio or TV stations but
only to go on leave for the duration of the
campaign period, we think that the company
may nevertheless validly require them to
a resign as a matter of policy. In this case, the
policy is justified on the following grounds:
Working for the government and the
company at the same time is clearly
disadvantageous and prejudicial to the
rights and interest not only of the company
but the public as well. In the event an
employee wins in an election, he cannot
fully serve, as he is expected to do, the
interest of his employer. The employee has
to serve two (2) employers, obviously
detrimental to the interest of both the
government and the private employer.
In the event the employee loses in the
election, the impartiality and cold neutrality
of an employee as broadcast personality is
suspect, thus readily eroding and adversely
affecting the confidence and trust of the
Phil. Long Distance Telephone Co. Inc. v.
Balbastro, 519 SCRA 233 (07)
As petitioner stated in its pleadings, it is a
telecommunication service company which
provides the country with various
telecommunication services and facilities. Its
operations are a vital part to many
transactions all over the country and abroad,
and private respondent was one of its
telephone operators who used to connect all
these calls. Thus, her patent abuse of her
sick leave privileges is detrimental to
petitioner �s business.
While it is true that compassion and human
consideration should guide the disposition of
cases involving termination of employment
since it affects one's source or means of
livelihood, it should not be overlooked that
the benefits accorded to labor do not include
compelling an employer to retain the
services of an employee who has been
shown to be a gross liability to the employer.
The law in protecting the rights of the
employees authorizes neither oppression
nor self-destruction of the employer. 33
It
should be made clear that when the law tilts
the scale of justice in favor of labor, it is but
a recognition of the inherent economic
inequality between labor and management.
The intent is to balance the scale of justice;
to put the two parties on relatively equal
positions. There may be cases where the
circumstances warrant favoring labor over
the interests of management but never
should the scale be so tilted if the result is an
injustice to the employer. Justitia nemini
neganda est (Justice is to be denied to none).
Gutierrez v. Singer Sewing Machine Co./ 411
SCRA 512 (03)
The penalty imposed on the erring employee
ought to be proportionate to the offense,
taking into account its nature and
surrounding circumstances. In the
application of labor laws, the courts and
other agencies of the government are guided
by the social justice mandate in our
fundamental law.
To be lawful, the cause for termination must
be a serious and grave malfeasance to justify
the deprivation of a means of livelihood. This
is merely in keeping with the spirit of our
Constitution and laws which lean over
backwards in favor of the working class, and
mandate that every doubt must be resolved
in their favor.
Manila Trading and Supply Co./ Inc. v.
Zulueta, 69 Phil. 485 (40) 486-487
an employer cannot legally be compelled to
continue with employment of a person who
admittedly was guilty of misfeasance or
malfeasance towards his employer, and
whose continuance in the service of the
latter is patently inimical to his interests. The
law, in protecting the rights of the laborer,
authorizes neither oppression nor self-
destruction of the employer. There may, of
course, be cases where the suspension or
dismissal of an employee is whimsical or
unjustified or otherwise illegal in which case
he will be protected. Each case will be
scrutinized carefully and the proper
authorities will go to the core of the
controversy and not close their eyes to the
real situation. This is not however the case
here.
Agabon v. NLRC, 442 SCRA 573 (04)
An employee who is clearly guilty of conduct
violative of Article 282 should not be
protected by the Social Justice Clause of the
Constitution. Social justice, as the term
suggests, should be used only to correct an
injustice. As the eminent Justice Jose P.
Laurel observed, social justice must be
founded on the recognition of the necessity
of interdependence among diverse units of a
society and of the protection that should be
equally and evenly extended to all groups as
a combined force in our social and economic
life, consistent with the fundamental and
paramount objective of the state of
promoting the health, comfort, and quiet of
all persons, and of bringing about “the
greatest good to the greatest number.”
PLDT v. Tolentino, 438 SCRA 555 (04)
Well-entrenched is the rule that an illegally
dismissed employee is entitled to
reinstatement as a matter of right. Over the
years, however, the case law developed that
where reinstatement is not feasible,
expedient or practical, as where
reinstatement would only exacerbate the
tension and strained relations between the
parties, or where relationship between the
employer and employee has been unduly
strained by reason of their irreconcilable
differences, particularly where the illegally
dismissed employee held a managerial or
key position in the company, it would be
more prudent to order payment of
separation pay instead of reinstatement.
Some unscrupulous employers, however,
have taken advantage of the overgrowth of
this doctrine of “strained relations” by using
it as a cover to get rid of its employees and
thus defeat their right to job security.
To protect labor’s security of tenure, we
emphasize that the doctrine of “strained
relations” should be strictly applied so as not
to deprive an illegally dismissed employee of
his right to reinstatement. Every labor
dispute almost always results in “strained
relations” and the phrase cannot be given
an overarching interpretation, otherwise, an
unjustly dismissed employee can never be
reinstated.
Perez v. Medical City General Hospital, 484
SCRA 138 (06)
The power to dismiss an employee is a
recognized prerogative that is inherent in
the employer �s right to freely manage and
regulate his business. An employer cannot
be expected to retain an employee whose
lack of morals, respect and loyalty to his
employer or regard for his employer �s rules
and appreciation of the dignity and
responsibility of his office has so plainly and
completely been bared. An employer may
not be compelled to continue to employ a
person whose continuance in service will
patently be inimical to his interest. The
dismissal of an employee, in a way, is a
measure of self-protection. Nevertheless,
whatever acknowledged right the employer
has to discipline his employee, it is still
subject to reasonable regulation by the
State in the exercise of its police power. 11
Thus, it is within the power of this Court not
only to scrutinize the basis for dismissal but
also to determine if the penalty is
commensurate to the offense,
notwithstanding the company rules.
Steel Pipe Corp. v. Bardaje, 522 SCRA (07)
[Citing Almira v. B.F. Goodrich 58 SCRA 120]
[W]here a penalty less punitive would
suffice, whatever missteps may be
committed by labor ought not to be visited
with a consequence so severe. It is not only
because of the law's concern for the
workingman. There is, in addition, his family
to consider. Unemployment brings untold
hardships and sorrows on those dependent
on the wage-earner. The misery and pain
attendant on the loss of jobs then could be
avoided if there be acceptance of the view
that under all circumstances of this case,
petitioners should not be deprived of their
means of livelihood. Nor is this to condone
what had been done by them For all this
while, since private respondent considered
them separated from the service, they had
not been paid. From the strictly juridical
standpoint, it cannot be too strongly
stressed, to follow Davis in his masterly
work, Discretionary Justice, that where a
decision may be made to rest [on] informed
judgment rather than rigid rules, all the
equities of the case must be accorded their
due weight. Finally, labor law
determinations, to quote from Bultmann,
should be not only secundum rationem but
also secundum caritatem .
Fujitsu Computer Products Corp. v. Court of
Appeals, 454 SCRA 737 (05)
The Court is wont to reiterate that while an
employer has its own interest to protect, and
pursuant thereto, it may terminate a
managerial employee for a just cause, such
prerogative to dismiss or lay-off an employee
must be exercised without abuse of
discretion. Its implementation should be
tempered with compassion and
understanding. The employer should bear in
mind that, in the execution of the said
prerogative, what is at stake is not only the
employee’s position, but his very livelihood.
[65]
The Constitution does not condone
wrongdoing by the employee; nevertheless,
it urges a moderation of the sanction that
may be applied to him. [66]
Where a penalty
less punitive would suffice, whatever
missteps may have been committed by the
worker ought not be visited with a
consequence so severe as dismissal from
employment. [67] Indeed, the consistent rule is
that if doubts exist between the evidence
presented by the employer and the
employee, the scales of justice must be tilted
in favor of the latter. The employer must
affirmatively show rationally adequate
evidence that the dismissal was for
justifiable cause.
Ariola v. Philex Mining Corp., 446 SCRA 152
(05)
When the defect is procedural, the dismissal
remains valid because the basis of the
dismissal is not in any way affected by such
defect. The dismissal of an employee who
commits a crime against an employer cannot
be invalidated because of lack of notice of
dismissal to the employee. The lack of
notice does not in any way erase or mitigate
the crime.
Phil. National Bank v. Cabansag, 460 SCRA
514 (05)
As a regular employee, respondent was
entitled to all rights, benefits and privileges
provided under our labor laws. One of her
fundamental rights is that she may not be
dismissed without due process of law. The
twin requirements of notice and hearing
constitute the essential elements of
procedural due process, and neither of these
elements can be eliminated without running
afoul of the constitutional guarantee. [22]
In dismissing employees, the employer must
furnish them two written notices: 1) one to
apprise them of the particular acts or
omissions for which their dismissal is sought;
and 2) the other to inform them of the
decision to dismiss them. As to the
requirement of a hearing, its essence lies
simply in the opportunity to be heard.
Truly, the contracting parties may establish
such stipulations, clauses, terms and
conditions as they want, and their
agreement would have the force of law
between them. However, petitioner
overlooks the qualification that those terms
and conditions agreed upon must not be
contrary to law, morals, customs, public
policy or public order. [30]
As explained earlier,
the employment Contract between petitioner
and respondent is governed by Philippine
labor laws. Hence, the stipulations, clauses,
and terms and conditions of the Contract
must not contravene our labor law
provisions.
Moreover, a contract of employment is
imbued with public interest. The Court has
time and time again reminded parties that
they “are not at liberty to insulate
themselves and their relationships from the
impact of labor laws and regulations by
simply contracting with each other.” [31] Also,
while a contract is the law between the
parties, the provisions of positive law that
regulate such contracts are deemed
included and shall limit and govern the
relations between the parties. [32]
Basic in our jurisprudence is the principle
that when there is no showing of any clear,
valid, and legal cause for the termination of
employment, the law considers the matter a
case of illegal dismissal.
Genuino Ice Co. Inc. v. Magpantay, 493 SCRA
195 (06))
Simply stated, the employer must furnish
the employee a written notice containing a
statement of the cause for termination and
to afford said employee ample opportunity
to be heard and defend himself with the
assistance of his representative, if he so
desires, and the employee must be notified
in writing of the decision dismissing him,
stating clearly the reasons therefor.
Suico v. NLRC, 513 SCRA 325 (07)
Art. 277 (b) in relation to Art. 264 (a) and (e)
recognizes the right to due process of all
workers, without distinction as to the cause
of their termination. Where no distinction is
given, none is construed. Hence, the
foregoing standards of due process apply to
the termination of employment of Suico, et
al. even if the cause therefor was their
supposed involvement in strike-related
violence prohibited under Art. 264 (a)
and (e).
Moreover, the procedure for
termination prescribed under Art. 277(b) and
Rule XXII of the Implementing Rules of Book
V is supplemented by existing company
policy. Art. 277(b) provides that the
procedure for termination prescribed therein
is without prejudice to the adoption by the
employer of company policy on the matter,
provided this conforms with the guidelines
set by the DOLE such as Rule XXII of the
Implementing Rules of Book V. This is
consistent with the established principle that
employers are allowed, under the broad
concept of management prerogative, to
adopt company policies that regulate all
aspects of personnel administration
including the dismissal and recall of workers.
Company policies or practices are binding on
the parties. Some can ripen into an
obligation on the part of the employer, such
as those which confer benefits on employees
or regulate the procedures and
requirements for their termination.
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