[G.R. No. 108961. November 27, 1998.

CITIBANK,
N.A., petitioner, vs. COURT OF APPEALS (Third
Division), and CITIBANK INTEGRATED GUARDS
LABOR ALLIANCE (CIGLA) SEGATUPAS/FSM
LOCAL CHAPTER No. 1394, respondents.

SYLLABUS

1. LABOR CODE; EMPLOYMENT; EMPLOYER-EMPLOYEE

RELATIONSHIP; TESTS THEREOF. — This Court has held in
many cases that "in determining the existence ofan
employer-employee relationship, the following elements are
generally considered: 1) the selection and engagement of the
employee; 2) the payment of wages; 3) the power of dismissal;
and 4) the employer's power to control the employee with
respect to the means and methods by which the work is to be
accomplished. AEcIaH

2. ID.; LABOR & SOCIAL LEGISLATION; LABOR ARBITER;

JURISDICTION. — It has been decided also that the Labor
Arbiter has no jurisdiction over a claim filed where no
employer-employee relationship existed between a company
and the security guards assigned to it by security service
contractor. In this case, it was the security agency El Toro that
recruited, hired and assigned the watchmen to their
place of work. It was the security agency that was answerable
to Citibank for the conduct of its guards. SCIcTD
3. REMEDIAL LAW; CIVIL PROCEDURE; JURISDICTION;
DETERMINED BY THE ALLEGATIONS OF THE COMPLAINT. —
It is a basic rule of procedure that "jurisdiction ofthe court over
the subject matter of the action is determined by the
allegations of the complaint, irrespective of whether or not the
plaintiff is entitled to recover upon all or some of the claims
asserted therein. The jurisdiction of the court cannot be made
to depend upon the defenses set up in the answer or upon the
motion to dismiss, for otherwise, the question of jurisdiction
would almost entirely depend upon the defendant." "What
determines the jurisdiction of the court is the nature ofthe
action pleaded as appearing from the allegations in the
complaint. The averments therein and the character of the
relief sought are the ones to be consulted."

4. ID.; ID.; ID.; ID.; CASE AT BAR. — In the complaint filed with
the trial court, petitioner alleged that in 1983, it entered into
a contract with El Toro, a security agency, for security and
protection service. The parties renewed the contract yearly
until April 22, 1990. Petitioner further alleged that from June
11, 1990, until the filing of the complaint. El Toro security
guards formerly assigned to guard Citibank premises loitered
around the bank's premises in large groups and threatened to
stage a strike, which would hamper its operations and the
normal conduct of its business and that the bank would suffer
damages should a strike push through. On the basis of the
allegations of the complaint, it is safe to conclude that the
dispute involved is a civil one, not a labor dispute. Consequently,
we rule that jurisdiction over the subject matter of the
complaint lies with the regional trial court.

D E CI S IO N

PARDO, J : p

The Case

The case before the Court is a petition for review

on certiorari seeking to reverse and set aside the
decision of the Court of Appeals 1 and its resolution denying
reconsideration 2 , ruling that it is the labor tribunal, not the
regional trial court, that has jurisdiction over the complaint for
injunction and damages filed by petitioner with the regional
trial court. cdll

The Facts

In 1983, Citibank and El Toro Security Agency, Inc. (hereafter

El Toro) entered into a contract for the latter to provide
security and protective services to safeguard and protect the
bank's premises, situated at 8741 Paseo de Roxas, Makati,
Metro Manila. Under the contract, El Tore obligated itself to
provide the services of security guards to safeguard and protect
the premises and property of Citibank against theft, robbery or
any other unlawful acts committed by any person or persons,
and assumed responsibility for losses and/or damages that may
be incurred by Citibank due to or as a result of the
negligence of El Toro or any of its assigned personnel. 4
Citibank renewed the security contract with El Toro yearly
until 1990. On April 22, 1990, the contract
between Citibank and El Toro expired.

On June 7, 1990, respondent Citibank Integrated Guards

Labor Alliance-SEGA-TUPAS/FSM (hereafter CIGLA) filed with
National Conciliation and Mediation Board (NCMB) a request
for preventive mediation citing Citibank as respondent therein
giving as issues for preventive mediation the following:

a) Unfair labor practice;

b) Dismissal of union officers/members; and

c) Union busting.

On June 10, 1990, petitioner of Citibank served on El Toro a

written notice that the bank would not renew anymore the
service agreement with the latter.
Simultaneously, Citibank hired another security agency, the
Golden Pyramid Security Agency, to render security services
at Citibank's premises.

On the same date, June 10, 1990, respondent CIGLA filed a

manifestation with the NCMB that it was converting its request
for preventive mediation into a notice ofstrike for failure of the
parties to reach a mutually acceptable settlement of the issues,
which it followed with a supplemental notice of strike alleging
as supplemental issue the mass dismissal of all union officers
and members.

On June 11, 1990, security guards of El Toro who were

replaced by guards of the Golden Pyramid Security Agency
considered the non-renewal of El Toro's service agreement
with Citibank as constituting a lockout and/or a mass dismissal.
They threatened to go on strike against Citibank and picket its
premises.

In fact, security guards formerly assigned to Citibank under the

expired agreement loitered around and near
the Citibank premises in large groups of from twenty (20) and
at times fifty (50) persons.

On June 14, 1990, respondent CIGLA filed a notice of strike

directed at the premises of the Citibank main office.

Faced with the prospect of disruption of its business operations,

on June 5, 1990, petitioner Citibank filed with the Regional
Trial Court, Makati, a complaint for injunction and
damages. 5 The complaint sought to enjoin CIGLA and any
person claiming membership therein from striking or otherwise
disrupting the operations ofthe bank.

On June 18, 1990, respondent CIGLA filed with the

trial court a motion to dismiss the complaint. The motion
alleged that:

a) The Court had no jurisdiction, this being labor

dispute.

b) The guards were employees of the bank.

c) There were pending cases/labor disputes

between the guards and the bank at the
different agencies of the
 Department of Labor and Employment
(DOLE).

d) The bank was guilty of forum shopping in filing

the complaint with the Regional
Trial Court after submitting itself voluntarily
to the jurisdiction of the different
agencies of the DOLE.

By order dated August 19, 1990, the trial court denied

respondent CIGLA's motion to dismiss. The relevant
portion of the order reads as follows:

"Plaintiff in its Opposition alleged that

jurisdiction of the court is determined by the
allegations of the complaints. In the plaintiff's
complaint there are allegations, which negate any
employer-employee relationship between it and the
CIGLA members; however the Court could not dismiss
the case and lift the restraining order without first
threshing out the same at the trial of the case.

The Court finding the grounds alleged in the

defendant's motion well taken, the motion is hereby
denied.

SO ORDERED."

In due time, respondent CIGLA filed with the trial court a

motion for reconsideration of the above-mentioned order. On
October 1, 1990, the trial court denied the motion.

Subsequently, respondent CIGLA filed with the trial court its

answer to the complaint, and averred as special and
affirmative defense lack of jurisdiction of the courtover the
subject matter of the case. Treating the averment as motion to
dismiss, on April 27, 1991, the lower court issued an order
denying the motion. The lower courtstated:

"The Court noted in defendant's

Memorandum of Authorities that they made no
mention who among the parties — the plaintiff bank
or the defendants union — paid their wages or salaries
and who has the power to dismiss them.

Defendants also alleged that the complaint states no

valid cause of action as plaintiff's allegations are purely
anchored on conjectures and conclusions and not based
on ultimate facts.

Plaintiff in its Opposition alleged that it is a

well-settled rule, that in a motion to dismiss based on
the ground that the complaint fails to state a
cause of action, the question submitted to the court for
determination is the sufficiency of the allegation in the
complaint itself. Plaintiff also alleged that the
defendants disputed the jurisdiction of the court, the
parties having employer-employee relationship; this
mere allegation did not serve to automatically deprive
the court of its jurisdiction duly conferred by the
allegations of the complaint; in the opinion of the
defendants, a labor dispute exists, the court is duty
bound to find out if such circumstances really exist.

The Court weighing the evidence and jurisprudence in

support of the respective contention of the parties, and
 finding that in the case at bar, plaintiff seeks to recover
pecuniary damages, the Court gives more credence to
the decisions cited by the plaintiff, hence the special
and affirmative defenses alleged in the answer treated
as a 'Motion to Dismiss' is hereby denied." Cdpr

On May 24, 1991 respondent CIGLA filed with

the Court of Appeals a petition for certiorari with preliminary
injunction 6 assailing the validity of the proceedings had before
the regional trial court.

After due proceedings, on March 31, 1992,

the Court of Appeals promulgated its decision in CIGLA's favor,
the dispositive portion of which states:

"WHEREFORE, the Writ of Certiorari is GRANTED, and

the proceedings before respondent Judge more
particularly the challenged orders are declared null and
void and respondent Judge is enjoined from taking any
further action in Civil Case No. 90-1612 except for the
purpose of dismissing it. Following, however, the
disposition in San Miguel Corporation Employees
Union vs. Bersamira, the status
quo ante declaration of strike shall be observed
pending the proceedings in the National Conciliation
and Mediation Board, Department of Labor and
Employment, National Capital Region (Annex
A of Petition). No Costs.

SO ORDERED."
On April 29, 1992, petitioner Citibank filed a motion for
reconsideration of the decision. On February 12, 1993,
the Court of Appeals denied the motion, finding that the
arguments in the motion for reconsideration are but a rehash,
if not a repetition, of the arguments in its comments, which
had been considered by the Court in its decision.

Hence, the petitioner's recourse to this Court.

The Issue

The basic issue involved is whether it is the labor tribunal or the

regional trial court that has jurisdiction over the subject
matter of the complaint filed by Citibank with the trial court.

Petitioner's Submission

Petitioner Citibank contends that there is no

employer-employee relationship between Citibank and the
security guards represented by respondent CIGLA and that
there is no "labor dispute" in the subject controversy. The
security guards were employees of El Toro security agency,
not of Citibank. Its service contract with Citibankhad expired
and not renewed.

The Court's Ruling

We sustain the petitioner's contention. This Court has held in

many cases that "in determining the existence of an
employer-employee relationship, the following elements are
generally considered: 1) the selection and engagement of the
employee; 2) the payment of wages; 3) the power of dismissal;
and 4) the employer's power to control the employee with
respect to the means and methods by which the work is to be
accomplished". 7 It has been decided also that the Labor Arbiter
has no jurisdiction over a claim filed where no
employer-employee relationship existed between a company
and the security guards assigned to it by a security service
contractor. 8 In this case, it was the security agency El Toro
that recruited, hired and assigned the watchmen to their
place of work. It was the security agency that was answerable
to Citibank for the conduct of its guards.

The question arises. Is there a labor dispute

between Citibank and the security guards,
members of respondent CIGLA, regardless of whether they
stand in the relationof employer and employees? Article 212,
paragraph 1 of the Labor Code provides the definition of a
"labor dispute". It "includes any controversy or matter
concerning terms of conditions of employment or the
association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and
conditionsof employment, regardless of whether the disputants
stand in the proximate relation of employer and employee."

If at all, the dispute between the Citibank and El Toro security

agency is one regarding the termination or non-renewal of the
contract of services. This is a civil dispute. 9El Toro was an
independent contractor. Thus, no employer-employee
relationship existed between Citibank and the security guards
members of the union in the security agency who were assigned
to secure the bank's premises and property. Hence, there was
no labor dispute and no right to strike against the bank.

It is a basic rule of procedure that

"jurisdiction of the court over the subject matter of the action
is determined by the allegations of the complaint,
irrespective ofwhether or not the plaintiff is entitled to recover
upon all or some of the claims asserted therein. The
jurisdiction of the court can not be made to depend upon the
defenses set up in the answer or upon the motion to dismiss, for
otherwise, the question of jurisdiction would almost entirely
depend upon the defendant." 10 "What determines the
jurisdiction of the court is the nature of the action pleaded as
appearing from the allegations in the complaint. The averments
therein and the characterof the relief sought are the ones to be
consulted." 11

In the complaint filed with the trial court, petitioner alleged

that in 1983, it entered into a contract with El Toro, a
security agency, for security and protection service. The parties
renewed the contract yearly until April 22, 1990. Petitioner
further alleged that from June 11, 1990, until the filing of the
complaint, El Toro security guards formerly assigned to
guard Citibank premises loitered around the bank's premises in
large groups and threatened to stage a strike, which would
hamper its operations and the normal conduct of its business
and that the bank would suffer damages should a strike push
through. cdasia
On the basis of the allegations of the complaint, it is safe to
conclude that the dispute involved is a civil one, not a labor
dispute. 12 Consequently, we rule that jurisdiction over the
subject matter of the complaint lies with the regional
trial court.

Relief

WHEREFORE, the Court hereby GRANTS the petition for

review on certiorari. We REVERSE and SET ASIDE the
decision of the Court of Appeals and its resolution denying
reconsideration in CA-G.R. SP No. 25584, and REMAND the
records of the case to the Regional Trial Court, Makati, for
further proceedings in line with the ruling herein that
jurisdiction over the subject matter of the complaint in Civil
Case No. 90-1612, is vested therein.

No pronouncement as to costs.

||| (Citibank, N.A. v. Court of Appeals, G.R. No. 108961,

[November 27, 1998], 359 PHIL 719-728)

G.R. No. 120567. March 20, 1998.]

PHILIPPINE AIRLINES, INC., petitioner, vs.

NATIONAL LABOR RELATIONS COMMISSION,
FERDINAND PINEDA and GOGFREDO
CABLING, respondents.

Ferdinand D. Macaibay for petitioner.

Factoran Tria & De leon Law Office for private respondents.

SYNOPSIS

Private respondents are flight stewards of the petitioner. Both

were dismissed from the service for their alleged involvement in
the currency smuggling in Hong Kong. Aggrieved by said
dismissal, private respondents filed with the NLRC a petition
for injunction. The NLRC issued a temporary mandatory
injunction enjoining petitioner to cease and desist from
enforcing its Memorandum of Dismissal. Hence, this petition
for certiorari. CaTSEA

The power of the NLRC to issue an injunctive writ originates

from "any labor dispute" upon application by a party thereof,
which application if not granted "may cause grave or
irreparable damage to any party or render ineffectual any
decision in favor of such party." In the present case, there is no
labor dispute between the petitioner and private respondents
as there has yet been no complaint for illegal dismissal filed
with the labor arbiter by the private respondents against the
petitioner. The petition for injunction directly filed before the
NLRC is in reality an action for illegal dismissal. As such, the
petition should have bee filed with the labor arbiter who has the
original and exclusive jurisdiction to hear and decide cases
involving all workers. Thus, the NLRC exceeded its jurisdiction
when it issued the assailed Order granting private respondents'
petition for injunction and ordering the petitioner to reinstate
private respondents.
 SYLLABUS

1. REMEDIAL LAW; PROVISIONAL REMEDIES; INJUNCTION

ELUCIDATED. — Generally, injunction is preservative remedy
for the protection of one's substantive rights or interest. It is
not a cause of action in itself but merely a provisional remedy,
an adjunct to a main suit. It is resorted to only when there is a
pressing necessity to avoid injurious consequences which cannot
be remedied under any standard of compensation. The
application of the injunctive writ rests upon the existence of an
emergency or of a special reason before the main case be
regularly heard. The essential conditions for granting such
temporary injunctive relief are that the complaint alleges facts
which appear to be sufficient to constitute a proper basis for
injunction and that on the entire showing from the contending
parties, the injunction is reasonably necessary to protect the
legal rights of the plaintiff pending the litigation. Injunction is
also a special equitable relief granted only in cases where there
is no plain, adequate and complete remedy at law.

2. LABOR AND SOCIAL LEGISLATION; NATIONAL LABOR

RELATIONS COMMISSION; POWER TO ISSUE AN INJUNCTIVE
WRIT ORIGINATES FROM A LABOR DISPUTE. — In labor cases,
under Article 218 of the Labor Code and Sec. 1, Rule XI of the
New Rules of Procedure of the NLRC, the power of the NLRC to
issue an injunctive writ originates from "any labor dispute"
upon application by a party thereof, which application if not
granted "may cause grave or irreparable damage to any party
or render ineffectual any decision in favor of such party."
3. ID.; LABOR DISPUTE, DEFINED. — The term "labor dispute"
is defined as "any controversy or matter concerning terms and
conditions of employment or the association or representation
or persons in negotiating, fixing, maintaining, changing, or
arranging the terms and conditions of employment regardless
of whether or not the disputants stand in the proximate
relation of employers and employees." The term "controversy" is
likewise defines as "a litigated question; adversary proceeding in
a court of law; a civil action or suit, either at law or in equity; a
justiciable dispute." A "justiciable controversy" is one involving
an active antagonistic assertion of a legal right on one side and
denial thereof on the other concerning a real, and not a mere
theoretical question or issue."

4. ID.; LABOR ARBITER; ORIGINAL & EXCLUSIVE

JURISDICTION OVER ACTIONS FOR ILLEGAL DISMISSAL. —
The petition for injunction directly filed before the NLRC is in
reality an action for illegal dismissal. As such, the petition
should have been filed with the labor arbiter who has the
original and exclusive jurisdiction to hear and decide cases
involving all workers, whether agricultural or non-agricultural
under Art. 217 (a) of the Labor Code. The jurisdiction
conferred being both original andexclusive means no other
officer or tribunal can take cognizance of, hear and decide any
of the cases therein enumerated. The only exceptions are where
the Secretary of Labor and Employment or the NLRC exercises
the power of compulsory arbitration, or the parties agree to
submit the matter to voluntary arbitration pursuant to Article
263 (g) of the Labor Code. AaCEDS

5. ID.; NLRC; JURISDICTION; APPELLATE NATURE. — The

NLRC shall have exclusive appellate jurisdiction over all cases
decided by labor arbiters as provided in Article 217(b) of the
Labor Code. Hence, the jurisdiction of the NLRC in illegal
dismissal cases is appellate in nature and, therefore, it cannot
entertain the private respondents' petition for injunction which
challenges the dismissal orders of petitioner. Article 218(e) of
the Labor Code does not provide blanket authority to the NLRC
or any of its divisions to issue writs of injunction, considering
that Section 1 of Rule XI of the New Rules of Procedure of the
NLRC makes injunction only an ancillary remedy in ordinary
labor disputes."

6. ID.; ADEQUATE REMEDY; CASE AT BAR. — An "adequate"

remedy at law has been defined as one "that affords relief with
reference to the matter in controversy, and which is
appropriate to the particular circumstances of the case." It is a
remedy which is equally beneficial, speedy and sufficient which
will promptly relieve the petitioner from the injurious effects of
the acts complained of. Under the Labor Code, the ordinary
and proper recourse of an illegally dismissed employees is to file
a complaint for illegal dismissal with the labor arbiter. In Lamb
vs. Phipps, we ruled that if the remedy is specifically provided
by law, it is presumed to be adequate. Moreover, the
preliminary mandatory injunction prayed for the private
respondents in their petition before the NLRC can also be
entertained by the labor arbiter who, as shown earlier, has the
ancillary power to issue preliminary injunctions or restraining
orders as an incident in the cases pending before him in order
to preserve the rights of the parties during the pendency of the
case.

7. REMEDIAL LAW; PROVISIONAL REMEDIES; INJUNCTION;

IRREPARABLE INJURY; NOT APPRECIATED IN CASE AT BAR.
— Private respondents' petition for injunction reveals that it
has no basis since there is no showing of any urgency or
irreparable injury which the private respondents might suffer.
An injury is considered irreparable if it is of such constant and
frequent recurrence that no fair and reasonable redress can be
had therefor in a court of law, or where there is no standard by
which their amount can be measured with reasonable accuracy,
that is, it is not susceptible of mathematical computation. It is
considered irreparable injury when it cannot be adequately
compensated in damages due to the nature of the injury itself
or the nature of the right or property injured or when there
exists no certain pecuniary standard for the measurement of
damages. In the case at bar, the alleged injury which private
respondents stand to suffer by reason of their alleged illegal
dismissal can be adequately compensated and therefore, there
exists no "irreparable injury," as defined above which would
necessitate the issuance of the injunction sought for. Article
279 of the Labor Code provides that an employee who is
unjustly dismissed from employment shall be entitled to
reinstatement, without loss of seniority rights and other
privileges, and to the payment of full backwages, inclusive of
allowances, and to other benefits or their monetary equivalent
computed from the time his compensation was withheld from
him up to the time of his actual reinstatement.

8. ID.; ID.; NOT FOUND IN LABOR CASES. — An injunction, as

an extraordinary remedy, is not favored in labor law
considering that it generally has not proved to be an effective
means of settling labor disputes. It has been the policy of the
State to encourage the parties to use the non-judicial process of
negotiation and compromise, mediation and arbitration. Thus,
injunctions may be issued only in cases of extreme necessity
based on legal grounds clearly established, after due
consultations or hearing and when all efforts at conciliation are
exhausted which factors, however, are clearly absent in the
present case.

D E CI S IO N

MARTINEZ, J : p

Can the National Labor Relations Commission (NLRC), even

without a complaint for illegal dismissal filed before the labor
arbiter, entertain an action for injunction and issue such writ
enjoining petitioner Philippine Airlines, Inc. from enforcing its
Orders of dismissal against private respondents, and ordering
petitioner to reinstate the private respondents to their previous
positions?
This is the pivotal issue presented before us in this petition for
certiorari under Rule 65 of the Revised Rules of Court which
seeks the nullification of the injunctive writ dated April 3,
1995 issued by the NLRC and the Order denying petitioner's
motion for reconsideration on the ground that the said Orders
were issued in excess of jurisdiction. LLcd

Private respondents are flight stewards of the petitioner. Both

were dismissed from the service for their alleged involvement in
the April 3, 1993 currency smuggling in Hong Kong.

Aggrieved by said dismissal, private respondents filed with the

NLRC a petition 1 for injunction praying that:

"I. Upon filing of this Petition, a temporary restraining

order be issued, prohibiting respondents (petitioner
herein) from effecting or enforcing the Decision dated
Feb. 22, 1995, or to reinstate petitioners temporarily
while a hearing on the propriety of the issuance of a
writ of preliminary injunction is being undertaken;

"II. After hearing, a writ of preliminary mandatory

injunction be issued ordering respondent to reinstate
petitioners to their former positions pending the
hearing of this case, or, prohibiting respondent from
enforcing its Decision dated February 22, 1995 while
this case is pending adjudication;

"III. After hearing, that the writ of preliminary

injunction as to the reliefs sought for be made
permanent, that petitioners be awarded full backwages,
 moral damages of PHP 500,000.00 each and
exemplary damages of PHP 500,000.00 each,
attorney's fees equivalent to ten percent of whatever
amount is awarded, and the costs of suit."

On April 3, 1995, the NLRC issued a temporary mandatory

injunction 2 enjoining petitioner to cease and desist from
enforcing its February 22, 1995 Memorandum of dismissal. In
granting the writ, the NLRC considered the following facts, to
wit:

". . . that almost two (2) years ago, i.e. on April 15,
1993, the petitioners were instructed to attend an
investigation by respondent's 'Security and Fraud
Prevention Sub-Department' regarding an April 3,
1993 incident in Hongkong at which Joseph Abaca,
respondent's Avionics Mechanic in Hongkong 'was
intercepted by the Hongkong Airport Police at Gate
05 . . . the ramp area of the Kai Tak International
Airport while . . . about to exit said gate carrying a . . .
bag said to contain some 2.5 million pesos in Philippine
Currencies. That at the Police Station, Mr. Abaca
claimed that he just found said plastic bag at the
Skybed Section of the arrival flight PR300/03 April
93,' where petitioners served as flight stewards of said
flight PR300; . . . the petitioners sought 'a more
detailed account of what this HKG incident is all about';
but instead, the petitioners were administratively
charged, 'a hearing' on which 'did not push through'
until almost two (2) years after, i.e. 'on January 20,
1995 . . . where a confrontation between Mr. Abaca
and petitioners herein was compulsorily arranged by
the respondent's disciplinary board' at which hearing,
Abaca was made to identify petitioners as
co-conspirators; that despite the fact that the
procedure of identification adopted by respondent's
Disciplinary Board was anomalous 'as there was no one
else in the line-up (which could not be called one) but
petitioners . . . Joseph Abaca still had difficulty in
identifying petitioner Pineda as his co-conspirator, and
as to petitioner Cabling, he was implicated and pointed
by Abaca only after respondent's Atty. Cabatuando
pressed the former to identify petitioner Cabling as
co-conspirator'; that with the hearing reset to January
25, 1995, 'Mr. Joseph Abaca finally gave exculpating
statements to the board in that he cleared petitioners
from any participation or from being the owners of the
currencies, and at which hearing Mr. Joseph Abaca
volunteered the information that the real owner of said
money was one who frequented his headquarters in
Hongkong to which information, the Disciplinary Board
Chairman, Mr. Ismael Khan,' opined 'for the need for
another hearing to go to the bottom of the incident';
that from said statement, it appeared 'that Mr. Joseph
Abaca was the courier, and had another mechanic in
Manila who hid the currency at the plane's skybed for
Abaca to retrieve in Hongkong, which findings of how
the money was found was previously confirmed by Mr.
Joseph Abaca himself when he was first investigated by
the Hongkong authorities'; that just as petitioners
'thought that they were already fully cleared of the
 charges, as they no longer received any
summons/notices on the intended 'additional hearings'
mandated by the Disciplinary Board,' they were
surprised to receive on February 23, 1995 . . . a
Memorandum dated February 22, 1995' terminating
their services for alleged violation of respondent's Code
of Discipline 'effective, immediately'; that sometime . . .
first week of March, 1995, petitioner Pineda received
another Memorandum from respondent Mr. Juan
Paraiso, advising him of his termination effective
February 3, 1995, likewise for violation of respondent's
Code of Discipline; . . . "

In support of the issuance of the writ of temporary injunction,

the NLRC adopted the view that: (1) private respondents
cannot be validly dismissed on the strength of petitioner's Code
of Discipline which was declared illegal by this Court in the case
of PAL, Inc. vs. NLRC, (G.R. No. 85985), promulgated August
13, 1993, for the reason that it was formulated by the
petitioner without the participation of its employees as
required in R.A. 6715, amending Article 211 of the Labor
Code; (2) the whimsical, baseless and premature dismissals of
private respondents which "caused them grave and irreparable
injury" is enjoinable as private respondents are left "with no
speedy and adequate remedy at law" except the issuance of a
temporary mandatory injunction; (3) the NLRC is empowered
under Article 218 (e) of the Labor Code not only to restrain
any actual or threatened commission of any or all prohibited or
unlawful acts but also to require the performance of a
particular act in any labor dispute, which, if not restrained or
performed forthwith, may cause grave or irreparable damage
to any party; and (4) the temporary mandatory power of the
NLRC was recognized by this Court in the case of
Chemo-Technische Mfg., Inc. Employees Union, DFA, et. al. vs.
Chemo-Technische Mfg., Inc. [G.R. No. 107031, January 25,
1993].

On May 4, 1995, petitioner moved for

reconsideration 3 arguing that the NLRC erred:

1. . . . in granting a temporary injunction order

when it has no jurisdiction to issue an
injunction or restraining order since this may
be issued only under Article 218 of the Labor
Code if the case involves or arises from labor
disputes;

2. . . . in granting a temporary injunction order

when the termination of private respondents
have long been carried out;

3. . . . in ordering the reinstatement of private

respondents on the basis of their mere
allegations, in violation of PAL's right to due
process;

4 . . . . in arrogating unto itself management

prerogative to discipline its employees
and divesting the labor arbiter of its original
 and exclusive jurisdiction over illegal dismissal
cases;

5. . . . in suspending the effects of termination

when such action is exclusively within the
jurisdiction of the Secretary of Labor;

6 . . . . in issuing the temporary injunction in the

absence of any irreparable or substantial
injury to both private respondents.

On May 31, 1995, the NLRC denied petitioner's motion for

reconsideration, ruling: LLcd

"The respondent (now petitioner), for one, cannot

validly claim that we cannot exercise our injunctive
power under Article 218 (e) of the Labor Code on the
pretext that what we have here is not a labor dispute
as long as it concedes that as defined by law, a"(1)
'Labor Dispute' includes any controversy or matter
concerning terms or conditions of employment." If
security of tenure, which has been breached by
respondent and which, precisely, is sought to be
protected by our temporary mandatory injunction (the
core of controversy in this case) is not a "term or
condition of employment", what then is?

xxx xxx xxx

Anent respondent's second argument . . ., Article 218

(e) of the Labor Code . . . empowered the Commission
not only to issue a prohibitory injunction, but a
mandatory ("to require the performance") one as well.
Besides, as earlier discussed, we already exercised (on
August 23, 1991) this temporary mandatory
injunctive power in the case of "Chemo-Technische Mfg.,
Inc. Employees Union-DFA et. al. vs. Chemo-Technische
Mfg., Inc., et. al." (supra) and effectively enjoined one (1)
month old dismissals by Chemo-Technische and that
our aforesaid mandatory exercise of injunctive power,
when questioned through a petition for certiorari, was
sustained by the Third Division of the Supreme court
per its Resolution dated January 25, 1993.

xxx xxx xxx

Respondent's fourth argument that petitioner's remedy

for their dismissals is 'to file an illegal dismissal case
against PAL which cases are within the original and
exclusive jurisdiction of the Labor Arbiter' is ignorant.
In requiring as a condition for the issuance of a
'temporary or permanent injunction'- '(4) That
complainant has no adequate remedy at law;' Article
218 (e) of the Labor Code clearly
envisioned adequacy, and not plain availability of a
remedy at law as an alternative bar to the issuance of
an injunction. An illegal dismissal suit (which takes, on
its expeditious side, three (3) years before it can be
disposed of) while available as a remedy under Article
217 (a) of the Labor Code, is certainly not an 'adequate;
remedy at law. Ergo, it cannot, as an alternative
remedy, bar our exercise of that injunctive power given
us by Article 218 (e) of the Code.

xxx xxx xxx

Thus, Article 218 (e), as earlier discussed [which
empowers this Commission 'to require the performance
of a particular act' (such as our requiring respondent
'to cease and desist from enforcing' its whimsical
memoranda of dismissals and 'instead to reinstate
petitioners to their respective position held prior to
their subject dismissals') in 'any labor dispute which, if
not . . . performed forthwith, may cause grave and
irreparable damage to any party'] stands as the sole
'adequate remedy at law' for petitioners here.

Finally, the respondent, in its sixth argument claims

that even if its acts of dismissing petitioners 'may be
great, still the same is capable of compensation', and
that consequently, 'injunction need not be issued where
adequate compensation at law could be obtained'.
Actually, what respondent PAL argues here is that we
need not interfere in its whimsical dismissals of
petitioners as, after all, it can pay the latter its
backwages . . .

But just the same, we have to stress that Article 279

does not speak alone of backwages as an obtainable
relief for illegal dismissal; that reinstatement as well is
the concern of said law, enforceable when necessary,
through Article 218 (e) of the Labor Code (without
need of an illegal dismissal suit under Article 217 (a) of
the Code) if such whimsical and capricious act of illegal
dismissal will 'cause grave or irreparable injury to a
party'. . . ." 4
Hence, the present recourse.

Generally, injunction is a preservative remedy for the

protection of one's substantive rights or interest. It is not a
cause of action in itself but merely a provisional remedy, an
adjunct to a main suit. It is resorted to only when there is a
pressing necessity to avoid injurious consequences which cannot
be remedied under any standard of compensation. The
application of the injunctive writ rests upon the existence of an
emergency or of a special reason before the main case be
regularly heard. The essential conditions for granting such
temporary injunctive relief are that the complaint alleges facts
which appear to be sufficient to constitute a proper basis for
injunction and that on the entire showing from the contending
parties, the injunction is reasonably necessary to protect the
legal rights of the plaintiff pending the litigation. 5 Injunction is
also a special equitable relief granted only in cases where there
is no plain, adequate and complete remedy at law. 6

In labor cases, Article 218 of the Labor Code empowers the

NLRC —

"(e) To enjoin or restrain any actual or threatened

commission of any or all prohibited or unlawful acts or
to require the performance of a particular act in any
labor dispute which, if not restrained or performed
forthwith, may cause grave or irreparable damage to
any party or render ineffectual any decision in favor of
such party; . . . (Emphasis Ours)
Complementing the above-quoted provision, Sec. 1, Rule XI of
the New Rules of Procedure of the NLRC, pertinently provides
as follows:

"Section 1. Injunction in Ordinary Labor Dispute. — A

preliminary injunction or a restraining order may be
granted by the Commission through its divisions
pursuant to the provisions of paragraph (e) of Article
218 of the Labor Code, as amended, when it is
established on the bases of the sworn allegations in the
petition that the acts complained of, involving or
arising from any labor dispute before the Commission,
which, if not restrained or performed forthwith, may
cause grave or irreparable damage to any party or
render ineffectual any decision in favor of such party.

xxx xxx xxx

The foregoing ancillary power may be exercised by the

Labor Arbiters only as an incident to the cases pending
before them in order to preserve the rights of the
parties during the pendency of the case, but excluding
labor disputes involving strikes or lockout. 7 (Emphasis

Ours)

From the foregoing provisions of law, the power of the NLRC to

issue an injunctive writ originates from "any labor dispute"
upon application by a party thereof, which application if not
granted "may cause grave or irreparable damage to any party
or render ineffectual any decision in favor of such party."

The term "labor dispute" is defined as "any controversy or

matter concerning terms and conditions of employment or the
association or representation of persons in negotiating, fixing,
maintaining, changing, or arranging the terms and conditions
of employment regardless of whether or not the disputants
stand in the proximate relation of employers and employees." 8

The term "controversy" is likewise defined as "a litigated

question; adversary proceeding in a court of law; a civil action
or suit, either at law or in equity; a justiciable dispute." 9

A "justiciable controversy" is "one involving an active

antagonistic assertion of a legal right on one side and a denial
thereof on the other concerning a real, and not a mere
theoretical question or issue." 10

Taking into account the foregoing definitions, it is an essential

requirement that there must first be a labor dispute between
the contending parties before the labor arbiter. In the present
case, there is no labor dispute between the petitioner and
private respondents as there has yet been no complaint for
illegal dismissal filed with the labor arbiter by the private
respondents against the petitioner.

The petition for injunction directly filed before the NLRC is in

reality an action for illegal dismissal. This is clear from the
allegations in the petition which prays for; reinstatement of
private respondents; award of full backwages, moral and
exemplary damages; and attorney's fees. As such, the petition
should have been filed with the labor arbiter who has the
original and exclusive jurisdiction to hear and decide the
following cases involving all workers, whether agricultural or
non-agricultural:
 (1) Unfair labor practice;

(2) Termination disputes;

(3) If accompanied with a claim for reinstatement,

those cases that workers may file involving
wages, rates of pay, hours of work and other
terms and conditions of employment;

(4) Claims for actual, moral, exemplary and other

forms of damages arising from the
employer-employee relations;

(5) Cases arising from any violation of Article 264

of this Code, including questions involving the
legality of strikes and lockouts; and

(6) Except claims for employees compensation,

social security, medicare and maternity
benefits, all other claims arising from
employer-employee relations, including those
of persons in domestic or household service,
involving an amount exceeding five thousand
pesos (P5,000.00), whether or not
accompanied with a claim for
reinstatement. 11

The jurisdiction conferred by the foregoing legal provision to

the labor arbiter is both original and exclusive, meaning, no
other officer or tribunal can take cognizance of, hear and
decide any of the cases therein enumerated. The only exceptions
are where the Secretary of Labor and Employment or the
NLRC exercises the power of compulsory arbitration, or the
parties agree to submit the matter to voluntary arbitration
pursuant to Article 263 (g) of the Labor Code, the pertinent
portions of which reads:

"(g) When, in his opinion, there exists a labor dispute

causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the
Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the
same to the Commission for compulsory arbitration.
Such assumption or certification shall have the effect of
automatically enjoining the intended or impending
strike or lockout as specified in the assumption or
certification order. If one has already taken place at the
time of assumption or certification, all striking or
locked out employees shall immediately resume
operations and readmit all workers under the same
terms and conditions prevailing before the strike or
lockout. The Secretary of Labor and Employment or
the Commission may seek the assistance of law
enforcement agencies to ensure compliance with this
provision as well as with such orders as he may issue to
enforce the same.

xxx xxx xxx"

On the other hand, the NLRC shall have

exclusive appellate jurisdiction over all cases decided by labor
arbiters as provided in Article 217(b) of the Labor Code. In
short, the jurisdiction of the NLRC in illegal dismissal cases is
appellate in nature and, therefore, it cannot entertain the
private respondents' petition for injunction which challenges
the dismissal orders of petitioner. Article 218(e) of the Labor
Code does not provide blanket authority to the NLRC or any of
its divisions to issue writs of injunction, considering that Section
1 of Rule XI of the New Rules of Procedure of the NLRC makes
injunction only an ancillary remedy in ordinary labor
disputes" 12

Thus, the NLRC exceeded its jurisdiction when it issued the

assailed Order granting private respondents' petition for
injunction and ordering the petitioner to reinstate private
respondents.

The argument of the NLRC in its assailed Order that to file an

illegal dismissal suit with the labor arbiter is not an "adequate"
remedy since it takes three (3) years before it can be disposed
of, is patently erroneous. An "adequate" remedy at law has been
defined as one "that affords relief with reference to the matter
in controversy, and which is appropriate to the particular
circumstances of the case." 13 It is a remedy which is equally
beneficial, speedy and sufficient which will promptly relieve the
petitioner from the injurious effects of the acts complained
of. 14

Under the Labor Code, the ordinary and proper recourse of an

illegally dismissed employee is to file a complaint for illegal
dismissal with the labor arbiter. 15 In the case at bar, private
respondents disregarded this rule and directly went to the
NLRC through a petition for injunction praying that petitioner
be enjoined from enforcing its dismissal orders. In Lamb
vs. Phipps, 16 we ruled that if the remedy is specifically
provided by law, it is presumed to be adequate. Moreover, the
preliminary mandatory injunction prayed for by the private
respondents in their petition before the NLRC can also be
entertained by the labor arbiter who, as shown earlier, has the
ancillary power to issue preliminary injunctions or restraining
orders as an incident in the cases pending before him in order
to preserve the rights of the parties during the pendency of the
case. 17

Furthermore, an examination of private respondents' petition

for injunction reveals that it has no basis since there is no
showing of any urgency or irreparable injury which the private
respondents might suffer. An injury is considered irreparable if
it is of such constant and frequent recurrence that no fair and
reasonable redress can be had therefor in a court of law, 18 or
where there is no standard by which their amount can be
measured with reasonable accuracy, that is, it is not susceptible
of mathematical computation. It is considered irreparable
injury when it cannot be adequately compensated in damages
due to the nature of the injury itself or the nature of the right
or property injured or when there exists no certain pecuniary
standard for the measurement of damages. 19

In the case at bar, the alleged injury which private respondents

stand to suffer by reason of their alleged illegal dismissal can be
adequately compensated and therefore, there exists no
"irreparable injury," as defined above which would necessitate
the issuance of the injunction sought for. Article 279 of the
Labor Code provides that an employee who is unjustly dismissed
from employment shall be entitled to reinstatement, without
loss of seniority rights and other privileges, and to the payment
of full backwages, inclusive of allowances, and to other benefits
or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his
actual reinstatement.

The ruling of the NLRC that the Supreme Court upheld its
power to issue temporary mandatory injunction orders in the
case of Chemo-Technische Mfg., Inc. Employees Union-DFA, et.
al. vs. Chemo-Technische Mfg., Inc. et. al., docketed as G.R. No.
107031, is misleading. As correctly argued by the petitioner,
no such pronouncement was made by this Court in said case.
On January 25, 1993, we issued a Minute Resolution in the
subject case stating as follows:

"Considering the allegations contained, the issues raised

and the arguments adduced in the petition for
certiorari, as well as the comments of both public and
private respondents thereon, and the reply of the
petitioners to private respondent's motion to dismiss
the petition, the Court Resolved to DENY the same for
being premature." LLcd

It is clear from the above resolution that we did not in anyway

sustain the action of the NLRC in issuing such temporary
mandatory injunction but rather we dismissed the petition as
the NLRC had yet to rule upon the motion for reconsideration
filed by petitioner. Thus, the minute resolution denying the
petition for being prematurely filed.

Finally, an injunction, as an extraordinary remedy, is not

favored in labor law considering that it generally has not
proved to be an effective means of settling labor disputes. 20 It

has been the policy of the State to encourage the parties to use
the non-judicial process of negotiation and compromise,
mediation and arbitration. 21Thus, injunctions may be issued
only in cases of extreme necessity based on legal grounds clearly
established, after due consultations or hearing and when all
efforts at conciliation are exhausted which factors, however, are
clearly absent in the present case.

WHEREFORE, the petition is hereby GRANTED. The assailed

Orders dated April 3, 1995 and May 31, 1995, issued by the
National Labor Relations Commission (First Division), in NLRC
NCR IC No. 000563-95, are hereby REVERSED and SET
ASIDE.

SO ORDERED.

||| (Philippine Airlines, Inc. v. National Labor Relations

Commission, G.R. No. 120567, [March 20, 1998], 351 PHIL
172-188)

G.R. No. 159577. May 3, 2006.]

 CHARLITO PEÑARANDA, petitioner, vs.
BAGANGA PLYWOOD CORPORATION and
HUDSON CHUA, respondents.

D E CI S IO N

PANGANIBAN, C.J : p

Managerial employees and members of the managerial staff are

exempted from the provisions of the Labor Code on labor
standards. Since petitioner belongs to this class of employees, he
is not entitled to overtime pay and premium pay for working
on rest days.

The Case

Before us is a. Petition for Review 1 under Rule 45 of the Rules

of Court, assailing the January 27, 2003 2 and July 4,
2003 3 Resolutions of the Court of Appeals (CA) in CA-G.R. SP
No. 74358. The earlier Resolution disposed as follows:

"WHEREFORE, premises considered, the instant

petition is hereby DISMISSED." 4

The latter Resolution denied reconsideration.

On the other hand, the Decision of the National Labor Relations

Commission (NLRC) challenged in the CA disposed as follows:

"WHEREFORE, premises con considered, the decision of

the Labor Arbiter below awarding overtime pay and
premium pay for rest day to complainant is
 herebyREVERSED and SET ASIDE, and the complaint
in the above-entitled case, dismissed for lack of
merit. 5

The Facts

Sometime in June 1999, Petitioner Charlito Peñaranda was

hired as an employee of Baganga Plywood Corporation (BPC) to
take charge of the operations and maintenance of its steam
plant boiler. 6 In May 2001, Peñaranda filed a Complaint for
illegal dismissal with money claims against BPC and its general
manager, Hudson Chua, before the NLRC. 7

After the parties failed to settle amicably, the labor

arbiter 8 directed the parties to file their position papers and
submit supporting documents. 9 Their respective allegations are
summarized by the labor arbiter as follows:

"[Peñaranda] through counsel in his position paper

alleges that he was employed by respondent [Banganga]
on March 15, 1999 with a monthly salary of
P5,000.00 as Foreman/Boiler Head/Shift Engineer
until he was illegally terminated on December 19,
2000. Further, [he] alleges that his services [were]
terminated without the benefit of due process and valid
grounds in accordance with law. Furthermore, he was
not paid his overtime pay, premium pay for working
during holidays/rest days, night shift differentials and
finally claimed for payment of damages and attorney's
fees having been forced to litigate the present
complaint. SITCEA
 "Upon the other hand, respondent [BPC] is a domestic
corporation duly organized and existing under
Philippine laws and is represented herein by its General
Manager HUDSON CHUA, [the] individual respondent.
Respondents thru counsel allege that complainant's
separation from service was done pursuant to Art. 283
of the Labor Code. The respondent [BPC] was on
temporary closure due to repair and general
maintenance and it applied for clearance with the
Department of Labor and Employment, Regional Office
No. XI to shut down and to dismiss employees (par. 2
position paper). And due to the insistence of herein
complainant he was paid his separation benefits
(Annexes C and D, ibid). Consequently, when
respondent [BPC] partially reopened in January 2001,
[Peñaranda] failed to reapply. Hence, he was, not
terminated from employment much less illegally. He
opted to severe employment when he insisted payment
of his separation benefits. Furthermore, being a
managerial employee he is not entitled to overtime pay
and if ever he rendered services beyond the normal
hours of work, [there] was no office order/or
authorization for him to do so. Finally, respondents
allege that the claim for damages has no legal and
factual basis and that they instant complaint must
necessarily fail for lack of merit.'' 10

The labor arbiter ruled that there was no illegal dismissal and
that petitioner's Complaint was premature because he was still
employed by BPC. 11 The temporary closure of BPC's plant did
not terminate his employment, hence, he need not reapply
when the plant reopened.

According to the labor arbiter, petitioner's money claims for

illegal dismissal was also weakened by his quitclaim and
admission during the clarificatory conference that he accepted
separation benefits, sick and vacation leave conversions and
thirteenth month pay. 12

Nevertheless, the labor arbiter found petitioner entitled to

overtime pay, premium pay for working on rest days, and
attorney's fees in the total amount of P21,257.98.13

Ruling of the NLRC

Respondents filed an appeal to the NLRC, which deleted the

award of overtime pay and premium pay for working on rest
days. According to the Commission, petitioner was not entitled
to these awards because he was a managerial employee. 14

Ruling of the Court of Appeals

In its Resolution dated January 27, 2003, the CA dismissed

Peñaranda's Petition for Certiorari. The appellate court held
that he failed to: 1) attach copies of the pleading submitted
before the labor arbiter and NLRC; and 2) explain why the
filing and service of the Petition was not done by personal
service. 15

In its later Resolution dated July 4, 2003, the CA denied

reconsideration on the ground that petitioner still failed to
submit the pleadings filed before the NLRC. 16

Hence this Petition. 17

 The Issues

Petitioner states the issues in this wise:

"The [NLRC] committed grave abuse of discretion

amounting to excess or lack of jurisdiction when it
entertained the APPEAL of the respondent[s] despite
the lapse of the mandatory period of TEN DAYS.

"The [NLRC] committed grave abuse of discretion

amounting to an excess or lack of jurisdiction when it
rendered the assailed RESOLUTIONS dated May 8,
2002 and AUGUST 16, 2002 REVERSING AND
SETTING ASIDE the FACTUAL AND LEGAL FINDINGS
of the [labor arbiter] with respect to the following:

"I. The finding of the [labor arbiter] that

[Peñaranda] is a regular, common employee
entitled to monetary benefits under Art. 82 [of
the Labor Code].

"II. The finding that [Peñaranda] is entitled to

the payment of OVERTIME PAY and OTHER
MONETARY BENEFITS." 18

The Court's Ruling

The Petition is not meritorious.

Preliminary Issue:
Resolution on the Merits

The CA dismissed Peñaranda's Petition on purely technical

grounds particularly with regard to the failure to submit
supporting documents. CHATcE
In Atillo v. Bombay, 19 the Court held that the crucial issue is
whether the documents accompanying the petition before the
CA sufficiently supported the allegations therein. Citing this
case, Piglas Kamao v. NLRC 20 stayed the dismissal of an appeal
in the exercise of its equity jurisdiction to order the
adjudication on the merits.

The Petition filed with the CA shows a prima facie case.

Petitioner attached his evidence to challenge the finding that he
was a managerial employee. 21 IN his Motion for
Reconsideration, petitioner also submitted the pleadings before
the labor arbiter in an attempt to comply with the CA
rules. 22 Evidently, the CA could have ruled on the Petition on
the basis of these attachments. Petitioner should be deemed in
substantial compliance with the procedural requirements.

Under these extenuating circumstances, the Court does not

hesitate to grant liberality in favor of petitioner and to tackle
his substantive arguments in the present case. Rules of
procedure must be adopted to help promote, not frustrate,
substantial justice. 23 The Court frowns upon the practice of
dismissing cases purely on procedural grounds. 24 Considering
that there was substantial compliance, 25 a liberal
interpretation of procedural rules in this labor case is more in
keeping with the constitutional mandate to secure social
justice. 26

First Issue:
Timeliness of Appeal
Under the Rules of Procedure of the NLRC, an appeal from the
decision of the labor arbiter should he filed within 10 days from
receipt thereof. 27

Petitioner's claim that respondents filed their appeal beyond

the required period is not substantiated. In the pleadings before
us, petitioner fails to indicate when respondents received the
Decision of the labor arbiter. Neither did the petitioner attach a
copy of the challenged appeal. Thus, this Court has no means to
determine from the records when the 10-day period
commenced and terminated. Since petitioner utterly failed to
support his claim that respondents' appeal was filed out of time,
we need not belabor that point. The parties alleging have the
burden of substantiating their allegations. 28

Second Issue:
Nature of Employment

Petitioner claims that he was not a managerial employee, and

therefore, entitled to the award granted by the labor arbiter.

Article 82 of the Labor Code exempts managerial employees

from the coverage of labor standards. Labor standards provide
the working conditions of employees, including entitlement to
overtime pay and premium pay for working on rest
days. 29 Under this provision, managerial employees are "those
whose primary duty consists of the management of the
establishment in which they are employed or of a department
or subdivision." 30
The Implementing Rules of the Labor Code state that
managerial employees are those who meet the following
conditions:

"(1) Their primary duty consists of the management of

the establishment in which they are employed or of a
department or subdivision thereof;

"(2) They customarily and regularly direct the work of

two or more employees therein;

"(3) They have the authority to hire or fire other

employees of lower rank; or their suggestions and
recommendations as to the hiring and firing and as to
the promotion or any other change of status of other
employees are given particular weight." 31

The Court disagrees with the NLRC's finding that petitioner

was a managerial employee. However, petitioner was a member
of the managerial staff, which also takes him out of the
coverage of labor standards. Like managerial employees, officers
and member of the managerial staff are not entitled to the
provisions of law on labor standards. 32 The Implementing
Rules of the Labor Code define members of a managerial staff
as those with the following duties and responsibilities:

"(1) The primary duty consists of the performance of

work directly related to management policies of the
employer; TSacID

"(2) Customarily and regularly exercise discretion and

independent judgment;
"(3) (i) Regularly and directly assist a proprietor or a
managerial employee whose primary duty consists of
the management of the establishment in which he is
employed or subdivision thereof; or (ii) execute under
general supervision work along specialized or technical
lines requiring special training, experience, or
knowledge; or (iii) execute under general supervision
special assignments and tasks; and

"(4) who do not devote more than 20 percent of their

hours worked in a workweek to activities which are not
directly and closely related to the performance of the
work described in paragraphs (1), (2), and (3)
above." 33

"1. To supply the required and continuous steam to all

consuming units at minimum cost.

"2. To supervise, check and monitor manpower

workmanship as well as operation of boiler and
accessories.

"3. To evaluate performance of machinery and

manpower.

"4. To follow-up supply of waste and other materials

for fuel.

"5. To train new employees for effective and safety

white working.

"6. Recommend parts and suppliers purchases.

"7. To recommend personnel actions such as:

promotion, or disciplinary action.
 "8. To check water from the boiler, feedwater and
softener, regenerate softener if beyond hardness
limit.

"9. Implement Chemical Dosing.

"10. Perform other task as required by the superior

from time to time." 34

The foregoing enumeration, particularly items, 1, 2, 3, 5 and

7 illustrates that petitioner was a member of the managerial
staff. His duties and responsibilities conform to the definition of
a member of a managerial staff under the Implementing Rules.

Petitioner supervised the engineering section of the steam plant

boiler. His work involved overseeing the operation of the
machines and the performance of the workers in the
engineering section. This work necessarily required the use of
discretion and independent judgment to ensure the proper
functioning of the steam plant boiler. As supervisor, petitioner
is deemed a member of the managerial staff. 35

Noteworthy, even petitioner admitted that he was a supervisor.

In his Position Paper, he stated that he was the foreman
responsible for the operation of the boiler. 36The

term foreman implies that he was the representative of

management over the workers and the operation of the
department. 37 Petitioner's evidence also showed that he was
the supervisor of the steam plant. 38 His classification as
supervisors is further evident from the manner his salary was
paid. He belonged to the 10% of respondent's 354 employees
who were paid on a monthly basis; the others were paid only on
a daily basis. 39

On the basis of the foregoing, the Court finds no justification to

award overtime pay and premium pay for rest days to
petitioner. EHSTDA

WHEREFORE, the Petition is DENIED. Costs against petitioner.

SO ORDERED.

||| (Peñaranda v. Baganga Plywood Corp., G.R. No. 159577,

[May 3, 2006], 522 PHIL 640-653)

G.R. No. 169717. March 16, 2011.]

SAMAHANG MANGGAGAWA
SA CHARTER CHEMICAL SOLIDARITY OF UNIONS
IN THE PHILIPPINES FOR EMPOWERMENT AND
REFORMS (SMCC-SUPER), ZACARRIAS JERRY
VICTORIO-Union
President, petitioner, vs. CHARTER CHEMICAL A
ND COATING CORPORATION, respondent.

DECISION

DEL CASTILLO, J : p

The right to file a petition for certification election is

accorded to a labor organization provided that it complies
with the requirements of law for proper registration. The
inclusion of supervisory employees in a labor organization
seeking to represent the bargaining unit of rank-and-file
employees does not divest it of its status as a legitimate labor
organization. We apply these principles to this case. EaHATD

This Petition for Review on Certiorari seeks to reverse

and set aside the Court of Appeal's March 15, 2005
Decision 1 in CA-G.R. SP No. 58203, which annulled and set
aside the January 13, 2000 Decision 2 of the Department
of Labor and Employment (DOLE) in OS-A-6-53-99
(NCR-OD-M-9902-019) and the September 16, 2005
Resolution 3 denying petitioner union's motion for
reconsideration.

Factual Antecedents

On February 19, 1999, Samahang

Manggagawa sa Charter Chemical Solidarity of Unions in
the Philippines for Empowerment and Reforms (petitioner
union) filed a petition for certification election among the
regular rank-and-file employees of Charter Chemical and
Coating Corporation (respondent company) with the
Mediation Arbitration Unit of the DOLE, National Capital
Region.

On April 14, 1999, respondent company filed an

Answer with Motion to Dismiss 4 on the ground that
petitioner union is not a legitimate labor organization
because of (1) failure to comply with the documentation
requirements set by law, and (2) the inclusion of supervisory
employees within petitioner union. 5

Med-Arbiter's Ruling

On April 30, 1999, Med-Arbiter Tomas F. Falconitin

issued a Decision 6 dismissing the petition for certification
election. The Med-Arbiter ruled that petitioner union is not
a legitimate labor organization because
the Charter Certificate, "Sama-samang Pahayag ng
Pagsapi at Authorization," and "Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at
Nagratipika sa Saligang Batas" were not executed under
oath and certified by the union secretary and attested to by
the union president as required by Section 235 of the Labor
Code 7 in relation to Section 1, Rule VI of Department
Order (D.O.) No. 9, series of 1997. The union registration
was, thus, fatally defective.

The Med-Arbiter further held that the list of

membership of petitioner union consisted of 12 batchman,
mill operator and leadman who performed supervisory
functions. Under Article 245 of the Labor Code,said
supervisory employees are prohibited from joining petitioner
union which seeks to represent the rank-and-file employees
of respondent company.

As a result, not being a legitimate labor organization,

petitioner union has no right to file a petition for
certification election for the purpose of collective bargaining.

Department of Labor and Employment's Ruling

 On July 16, 1999, the DOLE initially issued a
Decision 8 in favor of respondent company dismissing
petitioner union's appeal on the ground that the latter's
petition for certification election was filed out of time.
Although the DOLE ruled, contrary to the findings of the
Med-Arbiter, that the charter certificate need not be
verified and that there was no independent evidence
presented to establish respondent company's claim that
some members of petitioner union were holding supervisory
positions, the DOLE sustained the dismissal of the petition
for certification after it took judicial notice that another
union, i.e., Pinag-isang Lakas Manggagawa
sa Charter Chemical and Coating Corporation, previously
filed a petition for certification election on January 16,
1998. The Decision granting the said petition became final
and executory on September 16, 1998 and was remanded
for immediate implementation. Under Section 7, Rule XI
of D.O. No. 9, series of 1997, a motion for intervention
involving a certification election in an unorganized
establishment should be filed prior to the finality of the
decision calling for a certification election. Considering that
petitioner union filed its petition only on February 14, 1999,
the same was filed out of time. DaScHC

On motion for reconsideration, however, the DOLE

reversed its earlier ruling. In its January 13, 2000 Decision,
the DOLE found that a review of the records indicates that
no certification election was previously conducted in
respondent company. On the contrary, the prior
certification election filed by Pinag-isang Lakas Manggagawa
sa Charter Chemical and Coating Corporation was, likewise,
denied by the Med-Arbiter and, on appeal, was dismissed by
the DOLE for being filed out of time. Hence, there was no
obstacle to the grant of petitioner union's petition for
certification election, viz.:

WHEREFORE, the motion for reconsideration is

hereby GRANTED and the decision of this Office dated
16 July 1999 is MODIFIED to allow the certification
election among the regular rank-and-file employees
of Charter Chemical and Coating Corporation with the
following choices:

1. Samahang Manggagawa
sa Charter Chemical-Solidarity of Unions in the
Philippines for Empowerment and Reform
(SMCC-SUPER); and

2. No Union.

Let the records of this case be remanded to the

Regional Office of origin for the immediate conduct of a
certification election, subject to the usual pre-election
conference.

SO DECIDED. 9

Court of Appeal's Ruling

On March 15, 2005, the CA promulgated the assailed

Decision, viz.:

WHEREFORE, the petition is hereby GRANTED. The

assailed Decision and Resolution dated January 13,
 2000 and February 17, 2000 are hereby [ANNULLED]
and SET ASIDE.

SO ORDERED. 10

In nullifying the decision of the DOLE, the appellate court

gave credence to the findings of the Med-Arbiter that
petitioner union failed to comply with the documentation
requirements under the Labor Code. It, likewise, upheld the
Med-Arbiter's finding that petitioner union consisted of both
rank-and-file and supervisory employees. Moreover, the CA
held that the issues as to the legitimacy of petitioner union
may be attacked collaterally in a petition for certification
election and the infirmity in the membership of petitioner
union cannot be remedied through the exclusion-inclusion
proceedings in a pre-election conference pursuant to the
ruling in Toyota Motor Philippines v. Toyota Motor
Philippines Corporation Labor Union. 11 Thus, considering
that petitioner union is not a legitimate labor organization,
it has no legal right to file a petition for certification election.

Issues

Whether . . . the Honorable Court of Appeals committed

grave abuse of discretion tantamount to lack of
jurisdiction in granting the respondent [company's]
petition forcertiorari (CA G.R. No. SP No. 58203) in
spite of the fact that the issues subject of the
respondent company['s] petition was already settled
with finality and barred from being re-litigated.
 II

Whether . . . the Honorable Court of Appeals committed

grave abuse of discretion tantamount to lack of
jurisdiction in holding that the alleged mixture of
rank-and-file and supervisory employee[s] of
petitioner [union's] membership is [a] ground for the
cancellation of petitioner [union's] legal personality and
dismissal of [the] petition for certification election.

III

Whether . . . the Honorable Court of Appeals committed

grave abuse of discretion tantamount to lack of
jurisdiction in holding that the alleged failure to certify
under oath the local charter certificate issued by its
mother federation and list of the union membership
attending the organizational meeting [is a ground] for
the cancellation of petitioner [union's] legal personality
as a labor organization and for the dismissal of the
petition for certification election. 12 DSHcTC

Petitioner Union's Arguments

Petitioner union claims that the litigation of the issue

as to its legal personality to file the subject petition for
certification election is barred by the July 16, 1999 Decision
of the DOLE. In this decision, the DOLE ruled that petitioner
union complied with all the documentation requirements
and that there was no independent evidence presented to
prove an illegal mixture of supervisory and rank-and-file
employees in petitioner union. After the promulgation of this
Decision, respondent company did not move for
reconsideration, thus, this issue must be deemed settled.

Petitioner union further argues that the lack of

verification of its charter certificate and the alleged illegal
composition of its membership are not grounds for the
dismissal of a petition for certification election under Section
11, Rule XI of D.O. No. 9, series of 1997, as amended, nor
are they grounds for the cancellation of a union's registration
under Section 3, Rule VIII of said issuance. It contends that
what is required to be certified under oath by the local
union's secretary or treasurer and attested to by the local
union's president are limited to the union's constitution and
by-laws, statement of the set of officers, and the books of
accounts.

Finally, the legal personality of petitioner union cannot

be collaterally attacked but may be questioned only in an
independent petition for cancellation pursuant to Section 5,
Rule V, Book IV of the Rules to Implement the Labor
Code and the doctrine enunciated in Tagaytay Highlands
International Golf Club Incorporated v. Tagaytay Highlands
Employees Union-PTGWO. 13

Respondent Company's Arguments

Respondent company asserts that it cannot be

precluded from challenging the July 16, 1999 Decision of
the DOLE. The said decision did not attain finality because
the DOLE subsequently reversed its earlier ruling and, from
 this decision, respondent company timely filed its motion for
reconsideration.

On the issue of lack of verification of

the charter certificate, respondent company notes that
Article 235 of the Labor Code and Section 1, Rule VI of
theImplementing Rules of Book V, as amended by D.O. No. 9,
series of 1997, expressly requires that the charter certificate
be certified under oath.

It also contends that petitioner union is not a

legitimate labor organization because its composition is a
mixture of supervisory and rank-and-file employees in
violation of Article 245 of the Labor Code.Respondent
company maintains that the ruling in Toyota Motor
Philippines vs. Toyota Motor Philippines Labor
Union 14continues to be good case law. Thus, the illegal
composition of petitioner union nullifies its legal personality
to file the subject petition for certification election and its
legal personality may be collaterally attacked in the
proceedings for a petition for certification election as was
done here. CAaSHI

Our Ruling

The petition is meritorious.

The issue as to the legal personality of

petitioner union is not barred by the July
16, 1999 Decision of the DOLE.
 A review of the records indicates that the issue as to
petitioner union's legal personality has been timely and
consistently raised by respondent company before the
Med-Arbiter, DOLE, CA and now this Court. In its July 16,
1999 Decision, the DOLE found that petitioner union
complied with the documentation requirements of the
Labor Code and that the evidence was insufficient to
establish that there was an illegal mixture of supervisory and
rank-and-file employees in its membership. Nonetheless, the
petition for certification election was dismissed on the
ground that another union had previously filed a petition for
certification election seeking to represent the same
bargaining unit in respondent company. Upon motion for
reconsideration by petitioner union on January 13, 2000,
the DOLE reversed its previous ruling. It upheld the right of
petitioner union to file the subject petition for certification
election because its previous decision was based on a
mistaken appreciation of facts. 15 From this adverse decision,
respondent company timely moved for reconsideration by
reiterating its previous arguments before the Med-Arbiter
that petitioner union has no legal personality to file the
subject petition for certification election.

The July 16, 1999 Decision of the DOLE, therefore,

never attained finality because the parties timely moved for
reconsideration. The issue then as to the legal personality of
petitioner union to file the certification election was properly
raised before the DOLE, the appellate court and now this
Court.
The charter certificate need not be
certified under oath by the local union's
secretary or treasurer and attested to by
its president.

Preliminarily, we must note that Congress enacted

Republic Act (R.A.) No. 9481 16 which took effect on June
14, 2007. 17 This law introduced substantial amendments
to the Labor Code. However, since the operative facts in this
case occurred in 1999, we shall decide the issues under the
pertinent legal provisions then in force (i.e., R.A. No.
6715, 18 amending Book V of the Labor Code,and the rules
and regulations 19 implementing R.A. No. 6715, as
amended by D.O. No. 9, 20 series of 1997) pursuant to our
ruling in Republic v. Kawashima Textile Mfg., Philippines,
Inc. 21

In the main, the CA ruled that petitioner union failed

to comply with the requisite documents for registration
under Article 235 of the Labor Code and its implementing
rules. It agreed with the Med-Arbiter that
the Charter Certificate, Sama-samang Pahayag ng Pagsapi
at Authorization, and Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at
Nagratipika sa Saligang Batas were not executed under oath.
Thus, petitioner union cannot be accorded the status of a
legitimate labor organization.

We disagree.
 The then prevailing Section 1, Rule VI of the
Implementing Rules of Book V, as amended by D.O. No. 9,
series of 1997, provides:

Section 1. Chartering and creation of a local

chapter. — A duly registered federation or national
union may directly create a local/chapter by
submitting to the Regional Office or to the Bureau two
(2) copies of the following:

(a) A charter certificate issued by the federation or

national union indicating the creation or establishment
of the local/chapter;

(b) The names of the local/chapter's officers, their

addresses, and the principal office of the local/chapter;
and

(c) The local/chapter's constitution and by-laws

provided that where the local/chapter's constitution
and by-laws [are] the same as [those] of the federation
or national union, this fact shall be indicated
accordingly. IDTcHa

All the foregoing supporting requirements shall be

certified under oath by the Secretary or the Treasurer
of the local/chapter and attested to by its President.

As readily seen, the Sama-samang Pahayag ng Pagsapi at

Authorization and Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at
Nagratipika sa Saligang Batas are not among the documents
that need to be submitted to the Regional Office or Bureau of
Labor Relations in order to register a labor organization. As
to the charter certificate, the above-quoted rule indicates
that it should be executed under oath. Petitioner union
concedes and the records confirm that its charter certificate
was not executed under oath. However, in San Miguel
Corporation (Mandaue Packaging Products Plants) v.
Mandaue Packing Products Plants-San Miguel Corporation
Monthlies Rank-and-File
Union-FFW (MPPP-SMPP-SMAMRFU-FFW), 22 which was
decided under the auspices of D.O. No. 9, Series of 1997, we
ruled —

In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon.

Laguesma, 331 Phil. 356 (1996), the Court ruled that
it was not necessary for the charter certificate to be
certified and attested by the local/chapter
officers. Id. While this ruling was based on the
interpretation of the previous Implementing Rules
provisions which were supplanted by the 1997
amendments, we believe that the same doctrine obtains
in this case. Considering that the charter certificate is
prepared and issued by the national union and not the
local/chapter, it does not make sense to have the
local/chapter's officers . . . certify or attest to a
document which they had no hand in the preparation
of. 23 (Emphasis supplied)

In accordance with this ruling, petitioner

union's charter certificate need not be executed under oath.
Consequently, it validly acquired the status of a legitimate
labor organization upon submission of (1)
its charter certificate, 24 (2) the names of its officers, their
addresses, and its principal office, 25 and (3) its constitution
and by-laws 26 — the last two requirements having been
executed under oath by the proper union officials as borne
out by the records.

The mixture of rank-and-file and

supervisory employees in petitioner
union does not nullify its legal
personality as a legitimate labor
organization.

The CA found that petitioner union has for its

membership both rank-and-file and supervisory employees.
However, petitioner union sought to represent the
bargaining unit consisting of rank-and-file employees.
Under Article 245 27 of the Labor Code,supervisory
employees are not eligible for membership in a labor
organization of rank-and-file employees. Thus, the appellate
court ruled that petitioner union cannot be considered a
legitimate labor organization pursuant toToyota Motor
Philippines v. Toyota Motor Philippines Corporation Labor
Union 28 (hereinafter Toyota).

Preliminarily, we note that petitioner union questions

the factual findings of the Med-Arbiter, as upheld by the
appellate court, that 12 of its members, consisting of
batchman, mill operator and leadman, are supervisory
employees. However, petitioner union failed to present any
rebuttal evidence in the proceedings below after respondent
company submitted in evidence the job descriptions 29 of the
aforesaid employees. The job descriptions indicate that the
aforesaid employees exercise recommendatory managerial
actions which are not merely routinary but require the use of
independent judgment, hence, falling within the definition of
supervisory employees under Article 212 (m) 30 of the
Labor Code.For this reason, we are constrained to agree with
the Med-Arbiter, as upheld by the appellate court, that
petitioner union consisted of both rank-and-file and
supervisory employees. TDCAHE

Nonetheless, the inclusion of the aforesaid supervisory

employees in petitioner union does not divest it of its status
as a legitimate labor organization. The appellate court's
reliance on Toyota is misplaced in view of this Court's
subsequent ruling in Republic v. Kawashima Textile Mfg.,
Philippines, Inc. 31 (hereinafterKawashima).
In Kawashima, we explained at length how and why
the Toyota doctrine no longer holds sway under the altered
state of the law and rules applicable to this case, viz.:

R.A. No. 6715 omitted specifying the exact effect any

violation of the prohibition [on the co-mingling of
supervisory and rank-and-file employees] would bring
about on the legitimacy of a labor organization.

It was the Rules and Regulations Implementing R.A. No.

6715 (1989 Amended Omnibus Rules) which supplied
the deficiency by introducing the following amendment
to Rule II (Registration of Unions):
 "Sec. 1. Who may join unions. — . . . Supervisory
employees and security guards 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;
Provided, that those supervisory employees who
are included in an existing rank-and-file
bargaining unit, upon the effectivity of Republic
Act No. 6715, shall remain in that unit . . . ."
(Emphasis supplied.)

and Rule V (Representation Cases and Internal-Union

Conflicts) of the Omnibus Rules, viz.:

"Sec. 1. Where to file. — A petition for

certification election may be filed with the
Regional Office which has jurisdiction over the
principal office of the employer. The petition shall
be in writing and under oath.

Sec. 2. Who may file. — Any legitimate labor

organization or the employer, when requested to
bargain collectively, may file the petition.

The petition, when filed by a legitimate labor

organization, shall contain, among others:

xxx xxx xxx

(c) description of the bargaining unit which

shall be the employer unit unless
circumstances otherwise require; and
provided further, that the appropriate
bargaining unit of the rank-and-file
 employees shall not include supervisory
employees and/or security
guards." (Emphasis supplied.)

By that provision, any questioned mingling will prevent

an otherwise legitimate and duly registered labor
organization from exercising its right to file a petition
for certification election.

Thus, when the issue of the effect of mingling was

brought to the fore in Toyota, the Court, citing Article
245 of the Labor Code, as amended by R.A. No. 6715,
held:

"Clearly, based on this provision, 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. It becomes
necessary, therefore, anterior to the granting of
an order allowing a certification election, to
inquire into the composition of any labor
organization whenever the status of the labor
organization is challenged on the basis of Article
245 of the Labor Code. EaIDAT

xxx xxx xxx

 In the case at bar, as respondent union's
membership list contains the names of at least
twenty-seven (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." (Emphasis supplied)

In Dunlop, in which the labor organization that filed a

petition for certification election was one for
supervisory employees, but in which the membership
included rank-and-file employees, the Court reiterated
that such labor organization had no legal right to file a
certification election to represent a bargaining unit
composed of supervisors for as long as it counted
rank-and-file employees among its members.

It should be emphasized that the petitions for

certification election involved
in Toyota and Dunlop were filed on November 26,
1992 and September 15, 1995, respectively; hence,
the 1989 Rules was applied in both cases.

But then, on June 21, 1997, the 1989 Amended

Omnibus Rules was further amended by Department
Order No. 9, series of 1997 (1997 Amended Omnibus
Rules). Specifically, the requirement under Sec. 2(c) of
the 1989 Amended Omnibus Rules — that the
petition for certification election indicate that the
bargaining unit of rank-and-file employees has not
been mingled with supervisory employees — was
removed. Instead, what the 1997 Amended Omnibus
Rules requires is a plain description of the bargaining
unit, thus:

Rule XI

Certification Elections

xxx xxx xxx

Sec. 4. Forms and contents of petition. — The

petition shall be in writing and under oath and
shall contain, among others, the following: . . . (c)
The description of the bargaining unit.

In Pagpalain Haulers, Inc. v. Trajano, the Court had

occasion to uphold the validity of the 1997 Amended
Omnibus Rules, although the specific provision involved
therein was only Sec. 1, Rule VI, to wit:

"Section 1. Chartering and creation of a

local/chapter. — A duly registered federation or
national union may directly create a
local/chapter by submitting to the Regional
Office or to the Bureau two (2) copies of the
following: a) a charter certificate issued by the
federation or national union indicating the
creation or establishment of the local/chapter; (b)
the names of the local/chapter's officers, their
addresses, and the principal office of the
local/chapter; and (c) the local/chapter's
constitution and by-laws; provided that where
the local/chapter's constitution and by-laws is
 the same as that of the federation or national
union, this fact shall be indicated accordingly.

All the foregoing supporting requirements shall

be certified under oath by the Secretary or the
Treasurer of the local/chapter and attested to by
its President."

which does not require that, for its creation and

registration, a local or chapter submit a list of its
members.

Then came Tagaytay Highlands Int'l. Golf Club, Inc. v.

Tagaytay Highlands Employees Union-PGTWO in
which the core issue was whether mingling affects the
legitimacy of a labor organization and its right to file a
petition for certification election. This time, given the
altered legal milieu, the Court abandoned the view
in Toyota andDunlop and reverted to its
pronouncement in Lopez that while there is a
prohibition against the mingling of supervisory and
rank-and-file employees in one labor organization, the
Labor Code does not provide for the effects thereof.
Thus, the Court held that after a labor organization has
been registered, it may exercise all the rights and
privileges of a legitimate labor organization. Any
mingling between supervisory and rank-and-file
employees in its membership cannot affect its
legitimacy for that is not among the grounds for
cancellation of its registration, unless such mingling
was brought about by misrepresentation, false
statement or fraud under Article 239 of the Labor
Code. ATcaEH

In San Miguel Corp. (Mandaue Packaging Products

Plants) v. Mandaue Packing Products Plants-San
Miguel Packaging Products-San Miguel Corp. Monthlies
Rank-and-File Union-FFW, the Court explained that
since the 1997 Amended Omnibus Rules does not
require a local or chapter to provide a list of its
members, it would be improper for the DOLE to deny
recognition to said local or chapter on account of any
question pertaining to its individual members.

More to the point is Air Philippines Corporation v.

Bureau of Labor Relations, which involved a petition for
cancellation of union registration filed by the employer
in 1999 against a rank-and-file labor organization on
the ground of mixed membership: the Court therein
reiterated its ruling in Tagaytay Highlands that the
inclusion in a union of disqualified employees is not
among the grounds for cancellation, unless such
inclusion is due to misrepresentation, false statement
or fraud under the circumstances enumerated in
Sections (a) and (c) of Article 239 of the Labor Code.

All said, while the latest issuance is R.A. No. 9481, the
1997 Amended Omnibus Rules, as interpreted by the
Court in Tagaytay Highlands, San Miguel and Air
Philippines,had already set the tone for
it. Toyota and Dunlop no longer hold sway in the
present altered state of the law and the
rules. 32 [Underline supplied]
 The applicable law and rules in the instant case are the
same as those in Kawashima because the present petition for
certification election was filed in 1999 when D.O. No. 9,
series of 1997, was still in effect. Hence, Kawashima applies
with equal force here. As a result, petitioner union was not
divested of its status as a legitimate labor organization even
if some of its members were supervisory employees; it had
the right to file the subject petition for certification election.

The legal personality of petitioner union

cannot be collaterally attacked by
respondent company in the certification
election proceedings.

Petitioner union correctly argues that its legal

personality cannot be collaterally attacked in the
certification election proceedings. As we explained
inKawashima:

Except when it is requested to bargain collectively, an

employer is a mere bystander to any petition for
certification election; such proceeding is
non-adversarial and merely investigative, for the
purpose thereof is to determine which organization will
represent the employees in their collective bargaining
with the employer. The choice of their representative is
the exclusive concern of the employees; the employer
cannot have any partisan interest therein; it cannot
interfere with, much less oppose, the process by filing a
motion to dismiss or an appeal from it; not even a
mere allegation that some employees participating in a
 petition for certification election are actually
managerial employees will lend an employer legal
personality to block the certification election. The
employer's only right in the proceeding is to be notified
or informed thereof.

The amendments to the Labor Code and its

implementing rules have buttressed that policy even
more. 33

WHEREFORE, the petition is GRANTED. The March 15,

2005 Decision and September 16, 2005 Resolution of the
Court of Appeals in CA-G.R. SP No. 58203 areREVERSED
and SET ASIDE. The January 13, 2000 Decision of the
Department of Labor and Employment in OS-A-6-53-99
(NCR-OD-M-9902-019) is REINSTATED. cTSDAH

No pronouncement as to costs.

SO ORDERED.

||| (Samahang Manggagawa sa Charter Chemical-Super v.

Charter Chemical and Coating Corp., G.R. No. 169717, [March
16, 2011], 661 PHIL 175-194)

G.R. No. 187887. September 7, 2011.]

PAMELA FLORENTINA
P. JUMUAD, petitioner, vs. HI-FLYER FOOD, INC.
and/or JESUS R. MONTEMAYOR, respondents.
 DECISION

MENDOZA, J : p

This is a petition for review on certiorari assailing the

April 20, 2009 Decision 1 of the Court of Appeals (CA) in
CA-G.R. SP No. 03346, which reversed the August 10,
2006 Decision 2 and the November 29, 2007
Resolution 3 of the National Labor Relations Commission,
4th Division (NLRC), in NLRC Case No. V-000813-06. The
NLRC Decision and Resolution affirmed in toto the
Decision 4 of the Labor Arbiter Julie C. Ronduque (LA) in
RAB Case No. VII-10-2269-05 favoring the petitioner.

The Facts:

On May 22, 1995, petitioner Pamela Florentina

P. Jumuad (Jumuad) began her employment with
respondent Hi-Flyer Food, Inc. (Hi-Flyer), as management
trainee. Hi-Flyer is a corporation licensed to operate
Kentucky Fried Chicken (KFC) restaurants in the Philippines.
Based on her performance through the
years,Jumuad received several promotions until she became
the area manager for the entire Visayas-Mindanao 1 region,
comprising the provinces of Cebu, Bacolod, Iloilo and Bohol. 5

Aside from being responsible in monitoring her

subordinates, Jumuad was tasked to: 1) be highly visible in
the restaurants under her jurisdiction; 2) monitor and
support day-to-day operations; and 3) ensure that all the
facilities and equipment at the restaurant were properly
maintained and serviced. 6 Among the branches under her
supervision were the KFC branches in Gaisano Mall, Cebu
City (KFC-Gaisano); in Cocomall, Cebu City (KFC-Cocomall);
and in Island City Mall, Bohol (KFC-Bohol).

As area manager, Jumuad was allowed to avail

of Hi-Flyer's car loan program, 7 wherein
forty (40%) percent of the total loanable amount would be
subsidized by Hi-Flyer and the remaining
sixty (60%) percent would be deducted from her salary. It
was also agreed that in the event that she would resign or
would be terminated prior to the payment in full of the said
car loan, she could opt to surrender the car to Hi-Flyer or to
pay the full balance of the loan. 8 DAHEaT

In just her first year as Area Manager, Jumuad gained

distinction and was awarded the 3rd top area manager
nationwide. She was rewarded with a trip to Singapore for
her excellent performance. 9

On October 4, 2004, Hi-Flyer conducted a food safety,

service and sanitation audit at KFC-Gaisano. The audit,
denominated as CHAMPS Excellence Review (CER), revealed
several sanitation violations, such as the presence of rodents
and the use of a defective chiller for the storage
of food. 10 When asked to explain, Jumuadfirst pointed out
that she had already taken steps to prevent the further
infestation of the branch. As to why the branch became
infested with rodents, Jumuadfaulted management's
decision to terminate the services of the branch's pest control
program and to rely solely on the pest control program of
the mall. As for the defective chiller, she explained that it
was under repair at the time of the CER. 11 Soon
thereafter, Hi-Flyer ordered the KFC-Gaisano branch
closed.

Then, sometime in June of 2005, Hi-Flyer audited the

accounts of KFC-Bohol amid reports that certain employees
were covering up cash shortages. As a result, the following
irregularities were discovered: 1) cash shortage amounting to
P62,290.85; 2) delay in the deposits of cash sales by an
average of three days; 3) the presence of two sealed
cash-for-deposit envelopes containing paper cut-outs
instead of cash; 4) falsified entries in the deposit logbook; 5)
lapses in inventory control; and 6) material product
spoilage. 12 In her report regarding the
incident, Jumuad disclaimed any fault in the incident by
pointing out that she was the one responsible for the
discovery of this irregularity. 13

On August 7, 2005, Hi-Flyer conducted another CER,

this time at its KFC-Cocomall branch. Grout and leaks at the
branch's kitchen wall, dried up spills from the marinator, as
well as a live rat under postmix, and signs of rodent
gnawing/infestation were found. 14 This
time, Jumuad explained to management that she had been
busy conducting management team meetings at the other
KFC branches and that, at the date the CER was conducted,
she had no scheduled visit at the KFC-Cocomall branch. 15

Seeking to hold Jumuad accountable for the

irregularities uncovered in the branches under her
supervision, Hi-Flyer sent Jumuad an Irregularities
Report 16 and Notice of Charges 17 which she received on
September 5, 2005. On September 7,
2005 Jumuad submitted her written explanation. 18 On
September 28, 2005, Hi-Flyerheld an administrative
hearing where Jumuad appeared with counsel. Apparently
not satisfied with her explanations, Hi-Flyer served her a
Notice of Dismissal 19dated October 14, 2005, effecting her
termination on October 17, 2005. TESDcA

This prompted Jumuad to file a complaint

against Hi-Flyer and/or Jesus R.
Montemayor (Montemayor) for illegal dismissal before the
NLRC on October 17, 2005, praying for reinstatement and
payment of separation pay, 13th month pay, service
incentive leave, moral and exemplary damages, and
attorney's fees.Jumuad also sought the reimbursement of the
amount equivalent to her forty percent (40%) contribution
to Hi-Flyer's subsidized car loan program.

While the LA found that Jumuad was not completely

blameless for the anomalies discovered, she was of the view
that the employer's prerogative to dismiss or layoff an
employee "must be exercised without abuse of discretion" and
"should be tempered with compassion and
understanding." 20 Thus, the dismissal was too harsh
considering the circumstances. After finding that no serious
cause for termination existed, the LA ruled
that Jumuad was illegally dismissed. The LA disposed:

WHEREFORE, VIEWED FROM THE FOREGOING

PREMISES, judgment is hereby rendered declaring
complainant's dismissal as ILLEGAL. Consequently,
reinstatement not being feasible,
respondents HI-FLYER FOOD, INC. AND OR JESUS R.
MONTEMAYOR are hereby ordered to pay, jointly and
severally, complainant PAMELA FLORENTINA
P. JUMUAD, the total amount of THREE HUNDRED
THIRTY-SIX THOUSAND FOUR HUNDRED PESOS
(P336,400.00), Philippine currency, representing
Separation Pay, within ten (10) days from receipt
hereof, through the Cashier of this Arbitration Branch.

Further, same respondents are ordered to reimburse

complainant an amount equivalent to 40% of the value
of her car loaned pursuant to the car loan entitlement
memorandum.

Other claims are DISMISSED for lack of merit. 21

Both Jumuad and Hi-Flyer appealed to the

NLRC. Jumuad faulted the LA for not awarding backwages
and damages despite its finding that she was illegally
dismissed. Hi-Flyer and Montemayor, on the other hand,
assailed the finding that Jumuad was illegally dismissed and
that they were solidarity liable therefor. They also questioned
the orders of the LA that they pay separation pay and
reimburse the forty percent (40%) of the loan Jumuad paid
pursuant to Hi-Flyer's car entitlement program. HDTSCc

Echoing the finding of the LA that the dismissal

of Jumuad was too harsh, the NLRC affirmed in toto the LA
decision dated August 10, 2006. In addition, the NLRC
noted that even before the Irregularities Report and Notice
of Charges were given to Jumuad on September 5, 2005,
two (2) electronic mails (e-mails) between Montemayor and
officers of Hi-Flyer showed that Hi-Flyer was already
determined to terminate Jumuad. The first e-mail 22 read:

From: Jess R. Montemayor

Sent: Tuesday, August 16, 2005 5:59 PM

To: bebe chaves; Maria Judith N. Marcelo; Jennifer

Coloma Ravela;

Bernard Joseph A. Velasco

Cc: Odjie Belarmino; Jesse D. Cruz

Subject: RE: 049 KFC Cocomall — Food Safety

Risk/Product Quality Violation

I agree if the sanctions are light we should change them.

In the case of Pamela however, the fact that Cebu
Colon store had these violations is not the first time this
incident has happened in her area. The Bohol case was
also in her area and maybe these two incidents is
enough grounds already for her to be terminated or
maybe asked to resign instead of being terminated.
 I know if any Ops person serves expired product this is
ground for termination. I think serving off specs
products such as this lumpy gravy in the case of Coco
Mall should be grounds for termination. How many
customers have we lost due to this lumpy clearly out of
specs gravy? 20 customers maybe.

Jess.

The second e-mail, 23 sent by one Bebe Chaves

of Hi-Flyer to Montemayor and other officers of Hi-Flyer,
reads:

From: bebe chaves

Sent: Sat 9/3/2005 3:45 AM

To: Maria Judith N. Marcelo

CC: Jennifer Coloma Ravela; Goodwin Belarmino; Jess

R. Montemayor

Subject: RE: 049 KFC Cocomall — Food Safety

Risk/Product Quality Violation

Jojo,

Just an update of our meeting yesterday with Jennifer.

After having reviewed the case and all existing
documents, we have decided that there is enough
ground to terminate her services. IR/Jennifer are
working hand in hand to service due notice and close
the case. CHaDIT

According to the NLRC, these e-mails were proof

that Jumuad was denied due process considering that no
matter how she would refute the charges hurled against her,
the decision of Hi-Flyer to terminate her would not
change. 24

Sustaining the order of the LA to

reimburse Jumuad the amount equivalent to 40% of the
value of the car loan, the NLRC explained
that Jumuad enjoyed this benefit during her period of
employment as Area Manager and could have still enjoyed
the same if not for her illegal dismissal. 25

Finally, the NLRC held that the active participation of

Montemayor in the illegal dismissal of Jumuad justified his
solidary liability with Hi-Flyer.

Both Jumuad and Hi-Flyer sought reconsideration of

the NLRC Decision but their respective motions were denied
on November 29, 2007. 26

Alleging grave abuse of discretion on the part of the

NLRC, Hi-Flyer appealed the case before the CA in Cebu
City.

On April 20, 2009, the CA rendered the subject

decision reversing the decision of the labor tribunal. The
appellate court disposed:

WHEREFORE, in view of the foregoing, the Petition is

GRANTED. The Decision of the National Labor Relations
Commission (4th Division) dated 28 September 2007
in NLRC Case No. V-000813-06 (RAB Case No.
VII-10-2269-05, as well as the Decision dated to
August 2006 of the Honorable Labor Arbiter Julie C.
 Ronduque, and the 29 November 2006 Resolution of
the NLRC denying petitioner's Motion for
Reconsideration dated 08 November 2007, are hereby
REVERSED and SET ASIDE. cDAISC

No pronouncement as to costs.

SO ORDERED. 27

Contrary to the findings of the LA and the NLRC, the

CA was of the opinion that the requirements of substantive
and procedural due process were complied with
affording Jumuad an opportunity to be heard first, when
she submitted her written explanation and then, when she
was informed of the decision and the basis of her
termination. 28 As for the e-mail exchanges between
Montemayor and the officers of Hi-Flyer, the CA opined
that they did not equate to a predetermination ofJumuad's
termination. It was of the view that the e-mail exchanges
were mere discussions between Montemayor and other
officers of Hi-Flyer on whether grounds for disciplinary
action or termination existed. To the mind of the CA, the
e-mails just showed that Hi-Flyer extensively deliberated
the nature and cause of the charges against Jumuad. 29

On the issue of loss of trust and confidence, the CA

considered the deplorable sanitary conditions and the cash
shortages uncovered at three of the seven KFC branches
supervised by Jumuad as enough bases for Hi-Flyer to lose
its trust and confidence in her. 30
 With regard to the reimbursement of the 40% of the
car loan as awarded by the labor tribunal, the CA opined
that the terms of the car loan program did not provide for
reimbursement in case an employee was terminated for just
cause and they, in fact, required that the employee should
stay with the company for at least three (3) years from the
date of the loan to obtain the full 40% subsidy. The CA
further stated that the rights and obligations of the parties
should be litigated in a separate civil action before the
regular courts. 31

The CA also exculpated Montemayor from any liability

since it considered Jumuad's dismissal with a just cause and
it found no evidence that he acted with malice and bad
faith. 32 aDSTIC

Hence, this petition on the following

GROUNDS:

THE HONORABLE COURT OF APPEALS GRAVELY

ERRED IN UPHOLD[ING] AS VALID THE
TERMINATION OF PETITIONER'S SERVICES BY
RESPONDENTS.

THE HONORABLE COURT OF APPEALS GRAVELY

ERRED WHEN IT REVERSED THE DECISION OF THE
NATIONAL LABOR RELATIONS COMMISSION 4TH
DIVISION OF CEBU CITY WHICH AFFIRMED THE
DECISION OF LABOR ARBITER JULIE RENDOQUE.

THE HONORABLE COURT OF APPEALS GRAVELY

ERRED WHEN IT REVERSED THE DECISION OF THE
 NATIONAL LABOR RELATIONS COMMISSION 4TH
DIVISION OF CEBU CITY WHEN IT RULED THAT
PETITIONER IS NOT ENTITLED TO REIMBURSEMENT
OF FORTY PERCENT (40%) OF THE CAR VALUE
BENEFITS.

It is a hornbook rule that factual findings of

administrative or quasi-judicial bodies, which are deemed to
have acquired expertise in matters within their respective
jurisdictions, are generally accorded not only respect but
even finality, and bind the Court when supported by
substantial evidence. 33 While this rule is strictly adhered to
in labor cases, the same rule, however, admits exceptions.
These include: (1) when there is grave abuse of discretion; (2)
when the findings are grounded on speculation; (3) when the
inference made is manifestly mistaken; (4) when the
judgment of the Court of Appeals is based on a
misapprehension of facts; (5) when the factual findings are
conflicting; (6) when the Court of Appeals went beyond the
issues of the case and its findings are contrary to the
admissions of the parties; (7) when the Court of Appeals
overlooked undisputed facts which, if properly considered,
would justify a different conclusion; (8) when the facts set
forth by the petitioner are not disputed by the respondent;
and (9) when the findings of the Court of Appeals are
premised on the absence of evidence and are contradicted by
the evidence on record. 34

In the case at bench, the factual findings of the CA

differ from that of the LA and the NLRC. This divergence of
positions between the CA and the labor tribunal below
constrains the Court to review and evaluate assiduously the
evidence on record. IcDHaT

The petition is without merit.

On whether Jumuad was illegally dismissed, Article

282 of the Labor Code provides:

Art. 282. Termination by Employer. — An employer

may terminate an employment for any of the following
causes:

(a) Serious misconduct or willful

disobedience by the employee of the lawful
orders of his employer or representative in
connection with his work;

(b) Gross and habitual neglect by the

employee of his duties;

(c) Fraud or willful breach by the employee

of the trust reposed in him by his employer
or duly authorized representative;

(d) Commission of a crime or offense by the

employee against the person of his
employer or any immediate member of his
family or his duly authorized representative;
and

(e) Other causes analogous to the

foregoing. cSTHaE

Jumuad was terminated for neglect of duty and

breach of trust and confidence. Gross negligence connotes
want or absence of or failure to exercise slight care or
diligence, or the entire absence of care. It evinces a
thoughtless disregard of consequences without exerting any
effort to avoid them. Fraud and willful neglect of duties
imply bad faith of the employee in failing to perform his job,
to the detriment of the employer and the latter's business.
Habitual neglect, on the other hand, implies repeated failure
to perform one's duties for a period of time, depending upon
the circumstances. It has been said that a single or an
isolated act of negligence cannot constitute as a just cause
for the dismissal of an employee. 35 To be a ground for
removal, the neglect of duty must be
both gross and habitual. 36

On the other hand, breach of trust and confidence, as a

just cause for termination of employment, is premised on
the fact that the employee concerned holds a position of
trust and confidence, where greater trust is placed by
management and from whom greater fidelity to duty is
correspondingly expected. The betrayal of this trust is the
essence of the offense for which an employee is penalized. 37

It should be noted, however, that the finding of guilt or

innocence in a charge of gross and habitual neglect of duty
does not preclude the finding of guilty or innocence in a
charge of breach of trust and confidence. Each of the charges
must be treated separately, as the law itself has treated
them separately. To repeat, to warrant removal from service
for gross and habitual neglect of duty, it must be shown that
the negligence should not merely be gross, but also habitual.
In breach of trust and confidence, so long as it is shown there
is some basis for management to lose its trust and confidence
and that the dismissal was not used as an occasion for abuse,
as a subterfuge for causes which are illegal, improper, and
unjustified and is genuine, that is, not a mere afterthought
intended to justify an earlier action taken in bad faith, the
free will of management to conduct its own business affairs
to achieve its purpose cannot be denied.

After an assiduous review of the facts as contained in

the records, the Court is convinced that Jumuad cannot be
dismissed on the ground of gross and habitual neglect of duty.
The Court notes the apparent neglect of Jumuad of her duty
in ensuring that her subordinates were properly monitored
and that she had dutifully done all that was expected of her
to ensure the safety of the consuming public who continue to
patronize the KFC branches under her jurisdiction.
Had Jumuaddischarged her duties to be highly visible in the
restaurants under her jurisdiction, monitor and support the
day to day operations of the branches and ensure that all the
facilities and equipment at the restaurant were properly
maintained and serviced, the deplorable conditions and
irregularities at the various KFC branches under her
jurisdiction would have been prevented. DacTEH

Considering, however, that over a year had lapsed

between the incidences at KFC-Gaisano and KFC-Bohol, and
that the nature of the anomalies uncovered were each of a
different nature, the Court finds that her acts or lack of
action in the performance of her duties is not born of habit.

Despite saying this, it cannot be denied

that Jumuad willfully breached her duties as to be unworthy
of the trust and confidence of Hi-Flyer. First, there is no
denying that Jumuad was a managerial employee. As
correctly noted by the appellate court, Jumuad executed
management policies and had the power to discipline the
employees of KFC branches in her area. She recommended
actions on employees to the head office. Pertinent is Article
212 (m) of the Labor Code defining a managerial employee
as one who is vested with powers or prerogatives to lay down
and execute management policies and/or hire, transfer,
suspend, lay off, recall, discharge, assign or discipline
employees.

Based on established facts, the mere existence of the

grounds for the loss of trust and confidence justifies
petitioner's dismissal. Pursuant to the Court's ruling in Lima
Land, Inc. v. Cuevas, 38 as long as 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 of his position, a managerial
employee may be dismissed.

In the present case, the CER's reports of Hi-Flyer show

that there were anomalies committed in the branches
managed by Jumuad. On the principle ofrespondeat
superior or command responsibility alone, Jumuad may be
held liable for negligence in the performance of her
managerial duties. She may not have been directly involved
in causing the cash shortages in KFC-Bohol, but her
involvement in not performing her duty monitoring and
supporting the day to day operations of the branches and
ensure that all the facilities and equipment at the restaurant
were properly maintained and serviced, could have truly
prevented the whole debacle from ever occurring.

Moreover, it is observed that rather than taking

proactive steps to prevent the anomalies at her
branches, Jumuad merely effected remedial measures. In the
restaurant business where the health and well-being of the
consuming public is at stake, this does not suffice. Thus, there
is reasonable basis for Hi-Flyer to withdraw its trust in her
and dismissing her from its service. DTISaH

The disquisition of the appellate court on the matter is

also worth mentioning:

In this case, there is ample evidence that private

respondent indeed committed acts justifying loss of
trust and confidence of Hi-Flyer, and eventually, which
resulted to her dismissal from service. Private
respondent's mismanagement and negligence in
supervising the effective operation of KFC branches in
the span of less than a year, resulting in the closure of
KFC-Gaisano due to deplorable sanitary conditions,
cash shortages in KFC-Bohol, in which the said branch,
 at the time of discovery, was only several months into
operation, and the poor sanitation at KFC-Cocomall.
The glaring fact that three (3) out of the seven (7)
branches under her area were neglected cannot be
glossed over by private respondent's explanation that
there was no negligence on her part as the sanitation
problem was structural, that she had been usually busy
conducting management team meetings in several
branches of KFC in her area or that she had no
participation whatsoever in the alleged cash shortages.

xxx xxx xxx

It bears stressing that both the Labor Arbiter and the

NLRC found that private respondent was indeed lax in
her duties. Thus, said the NLRC: ". . . [i]t is Our
considered view that . . . complainant cannot totally
claim that she was not remiss in her duties . . . . 39

As the employer, Hi-Flyer has the right to regulate,

according to its discretion and best judgment, all aspects of
employment, including work assignment, working methods,
processes to be followed, working regulations, transfer of
employees, work supervision, lay-off of workers and the
discipline, dismissal and recall of workers. Management has
the prerogative to discipline its employees and to impose
appropriate penalties on erring workers pursuant to
company rules and regulations. 40

So long as they 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, the
employer's exercise of its management prerogative must be
upheld. 41

In this case, Hi-Flyer exercised in good faith its

management prerogative as there is no dispute that it has
lost trust and confidence in her and her managerial abilities,
to its damage and prejudice. Her dismissal, was therefore,
justified. EICSTa

As for Jumuad's claim for the reimbursement of the

40% of the value of the car loan subsidized by Hi-Flyer under
its car loan policy, the same must also be denied. The rights
and obligations of the parties to a car loan agreement is not
a proper issue in a labor dispute but in a civil one. 42 It
involves the relationship of debtor and creditor rather than
employee-employer relations. 43 Jurisdiction, therefore, lies
with the regular courts in a separate civil action. 44

The law imposes many obligations on the employer

such as providing just compensation to workers, observance
of the procedural requirements of notice and hearing in the
termination of employment. On the other hand, the law also
recognizes the right of the employer to expect from its
workers not only good performance, adequate work and
diligence, but also good conduct and loyalty. The employer
may not be compelled to continue to employ such persons
whose continuance in the service will patently be inimical to
its interests. 45

WHEREFORE, the petition is DENIED.

SO ORDERED.

||| (Jumuad v. Hi-Flyer Food, Inc., G.R. No. 187887, [September

7, 2011], 672 PHIL 730-747)