Feati University v.
Bautista the CIR has no jurisdiction over the
G.R. No.L-21278 December 27,
1966
Lessons Applicable: Applicability to
certain specific persons – Professors in
national interest
Laws Applicable:
FACTS:
January 14, 1963: the President of
Feati University Faculty Club (PAFLU)
wrote a letter to Mrs. Victoria L.
Araneta, President of Feati University
informing her that it registered as a
labor union.
January 22, 1963: PAFLU sent a letter
with 26 demands in relation to their
employment and requesting an answer
within 10 days from receipt thereof.
Araneta answered the letters,
requesting that she be given at least 30
days to study thoroughly the different
phases of the demands. Meanwhile
counsel for Feati, wrote a letter to the
President of PAFLU demanding proof
of its majority status and designation
as a bargaining representative
February 1, 1963: the President of
PAFLU rejected the extension of time
and filed a notice of strike with the
Bureau of Labor due to Feati’s refusal
to bargain collectively.
Conciliation Division of the Bureau of
Labor made efforts to conciliate them
but failed.
February 18, 1963: PAFLU declared a
strike and established picket lines in
the premises of Feati resulting in the
disruption of classes in the University.
March 21, 1963: the President of the
Philippines certified to the Court of
Industrial Relations (CIR) the dispute
between Feati and PAFLU pursuant to
the provisions of Section 10 of
Republic Act No. 875.
3 cases were filed with the CIR
41-IPA – PAFLU’s petition to declare in
contempt of court since Feati refused
to accept them back to work in violation
of the return-to-work order of March 30,
1963 and has employed professors
and/or instructors to take their places
1183-MC – PAFLU’s petition for
certification election praying that it be
certified as the sole and exclusive
bargaining representative
Later withdrawn since the Case 41-IPA
had already been certified by the
President to the CIR and has absorbed
the issues herein
V-30 – PAFLU’s complaint for indirect
contempt of court filed against the
administrative officials of the Feati
reiterating Case 41-IPA
May 10, 1963: Feati filed before the SC
a petition for certiorari and prohibition
with writ of preliminary injunction which
was issued upon the Feati's filing a
bond of P50,000 (increased from
P1,000), ordering CIR Judge Jose S.
Bautista to desist and refrain from
further proceeding
March 23, 1963: On the strength of the
presidential certification, Judge
Bautista set the case for hearing
Feati, thru counsel filed a motion to
dismiss the case upon the ground that
employee must be one who is engaged
case, because:
1. the Industrial Peace Act is NOT
applicable to the University, it being an
educational institution, nor to the
members of the Faculty Club, they
being independent contractors
2. the presidential certification is
violative of Section 10 of the Industrial
Peace Act, as the University is not an
industrial establishment and there was
no industrial dispute which could be
certified to the CIR
Judge Bautista denied the motion to
dismiss and ordered the strikers to
return immediately to work and the
University to take them back under the
last terms and conditions existing
before the dispute arose
Without the motion for reconsideration
having been acted upon by the CIR en
banc, Judge Bautista set the case for
hearing on the merits for May 8, 1963
but was cancelled upon Feati’s petition
for certiorari alleging that Judge Jose
S. Bautista acted without, or in excess
of, jurisdiction, or with grave abuse of
discretion, in taking cognizance of, and
in issuing the questioned orders in, CIR
Cases Nos. 41-IPA 1183-MC and V-30
Feati claims that it is not an employer
within the contemplation of R.A. 875,
because it is not an industrial
establishment
Feati also claims that it is only a lessee
of the services of its professors and/or
instructors pursuant to a contract of
services entered into between them
because the University does not
exercise control over their work
ISSUES: W/N Feati can be considered
an employer and PAFLU as an
employee to be covered by R.A. 875
and have right to unionize
HELD: YES. petition for certiorari and
prohibition with preliminary injunction in
Case G.R. No. L-21278 is dismissed
Section 2(c) of R.A. 875:
o The term employer include any
person acting in the interest of an
employer, directly or indirectly, but
shall not include any labor organization
(otherwise than when acting as an
employer) or any one acting in the
capacity or agent of such labor
organization.
§ Congress did not intend to give a
complete definition of "employer", but
rather that such definition should be
complementary to what is commonly
understood as employer
§ Act itself specifically enumerated
those who are not included in the term
"employer" and educational institutions
are not included; hence, they can be
included in the term "employer".
However, those educational institutions
that are not operated for profit are not
within the purview of Republic Act No.
875.
ü Feati realizes profits and parts of
such earning is distributed as dividends
to private stockholders or individuals
§ It embraces not only those who are
usually and ordinarily considered
employees, but also those who have
ceased as employees as a
consequence of a labor dispute.
July 6, 1995
in the service of another; who performs
services for another; who works for
salary or wages
"workers" limited to those performing
physical labor
o embrace stenographers and
bookkeepers
o Teachers are not included
Feati controls the work of the members
of its faculty
o prescribes the courses or subjects
that professors teach, and when and
where to teach
o professors' work is characterized
by regularity and continuity for a fixed
duration
o professors are compensated for
their services by wages and salaries,
rather than by profits
o professors and/or instructors
cannot substitute others to do their
work without the consent of the
university
o professors can be laid off if their
work is found not satisfactory
Moreover, even if university professors
are considered independent
contractors, still they would be covered
by Rep. Act No. 875
professors, instructors or teachers of
private educational institutions who
teach to earn a living are entitled to the
protection of our labor laws — and one
such law is Republic Act No. 875.
The term "labor dispute" includes any
controversy concerning terms, tenure
or conditions of employment, or
concerning the association or
representation of persons in
negotiating, fixing, maintaining,
changing, or seeking to arrange terms
or conditions of employment regardless
of whether the disputants stand in
proximate relation of employer and
employees.
To certify a labor dispute to the CIR is
the prerogative of the President under
the law (Because the strike declared by
the members of the minority union
threatens a major industry of 18,000
students which affects the national
interest), and this Court will not
interfere in, much less curtail, the
exercise of that prerogative. The
jurisdiction of the CIR in a certified
case is exclusive. The parties involved
in the case may appeal to the Supreme
Court from the order or orders thus
issued by the CIR.
Section 10 of Republic Act No. 875
empowers the Court of Industrial
Relations to issue an order "fixing the
terms of employment." This clause is
broad enough to authorize the Court to
order the strikers to return to work and
the employer to readmit them
The return-to-work order cannot be
considered as an impairment of the
contract entered into with the
replacements. Besides, labor contracts
must yield to the common good and
such contracts are subject to the
special laws on labor unions, collective
bargaining, strikes and similar subjects.
Gold City Integrated Port Service,
Inc (INPORT) vs. NLRC
GR No. 103560
Facts: Petitioner’s employees stopped
working and gathered in a mass action
to express their grievances regarding
wages, thirteenth month pay and
hazard pay. Said employees were all
members of the Macajalar Labor Union
— Federation of Free Workers (MLU-
FFW) with whom petitioner had an
existing collective bargaining
agreement.
Petitioner was engaged in stevedoring
and arrastre services at the port of
Cagayan de Oro. The strike paralyzed
operations at said port.
The strikers filed individual notices of
strike (“Kaugalingon nga Declarasyon
sa Pag-Welga”) with the then Ministry
of Labor and Employment.
With the failure of conciliation
conferences between petitioner and
the strikers, INPORT filed a complaint
before the Labor Arbiter for Illegal
Strike with prayer for a restraining
order/preliminary injunction.
The National Labor Relations
Commission issued a temporary
restraining order. Thereafter, majority
of the strikers returned to work, leaving
herein private respondents who
continued their protest.
For not having complied with the formal
requirements in Article 264 of the
Labor Code, 3 the strike staged by
petitioner’s workers on April 30, 1985
was found by the Labor Arbiter to be
illegal. 4 The workers who participated
in the illegal strike did not, however,
lose their employment, since there was
no evidence that they participated in
illegal acts. After noting that petitioner
accepted the other striking employees
back to work, the Labor Arbiter held
that the private respondents should
similarly be allowed to return to work
without having to undergo the required
screening to be undertaken by their
union (MLU-FFW).
As regards the six private respondents
who were union officers, the Labor
Arbiter ruled that they could not have
possibly been “duped or tricked” into
signing the strike notice for they were
active participants in the conciliation
meetings and were thus fully aware of
what was going on. Hence, said union
officers should be accepted back to
work after seeking reconsideration
from herein petitioner. 5
The NLRC affirmed with modification 8
the Arbiter’s decision. It held that the
concerted action by the workers was
more of a “protest action” than a strike.
Private respondents, including the six
union officers, should also be allowed
to work unconditionally to avoid
discrimination. However, in view of the
strained relations between the parties,
separation pay was awarded in lieu of
reinstatement.
Upon petitioner’s motion for
reconsideration, public respondent
modified the above resolution.
The Commission ruled that since
private respondents were not actually
terminated from service, there was no
basis for reinstatement. However, it
awarded six months’ salary as
separation pay or financial assistance
in the nature of “equitable relief.” The
award for backwages was also deleted
for lack of factual and legal basis. In
lieu of backwages, compensation
equivalent to P1,000.00 was given.
Issue: Whether separation pay and
backwages be awarded by public
respondent NLRC to participants of an
illegal strike?
Held: Reinstatement and backwages
or, if no longer feasible, separation
pay, can only be granted if sufficient
bases exist under the law, particularly
after a showing of illegal dismissal.
However, while the union members
may thus be entitled under the law to
be reinstated or to receive separation
pay, their expulsion from the union in
accordance with the collective
bargaining agreement renders the
same impossible.
Ratio: A strike, considered as the most
effective weapon of labor, 13 is defined
as any temporary stoppage of work by
the concerted action of employees as a
result of an industrial or labor dispute.
14 A labor dispute includes any
controversy or matter concerning terms
or 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.
15
Private respondents and their co-
workers stopped working and held the
mass action on April 30, 1985 to press
for their wages and other benefits.
What transpired then was clearly a
strike, for the cessation of work by
concerted action resulted from a labor
dispute.
The complaint before the Labor Arbiter
involved the legality of said strike. The
Arbiter correctly ruled that the strike
was illegal for failure to comply with the
requirements of Article 264 (now Article
263) paragraphs (c) and (f) of the
Labor Code. 16
The individual notices of strike filed by
the workers did not conform to the
notice required by the law to be filed
since they were represented by a union
(MLU-FFW) which even had an
existing collective bargaining
agreement with INPORT.
Neither did the striking workers
observe the strike vote by secret ballot,
cooling-off period and reporting
requirements.
A union officer who knowingly
participates in an illegal strike and any
worker or union officer who knowingly
participates in the commission of illegal
acts during a strike may be declared to
have lost their employment status. 20
An ordinary striking worker cannot be
terminated for mere participation in an
illegal strike. There must be proof that
he committed illegal acts during a
strike. A union officer, on the other
hand, may be terminated from work
when he knowingly participates in an
illegal strike, and like other workers,
when he commits an illegal act during
a strike.
In the case at bench, INPORT
accepted the majority of the striking
workers, including union officers, back
to work. Private respondents were left
to continue with the strike after they
refused to submit to the “screening”
required by the company.
Under Article 264 of the Labor Code, a
worker merely participating in an illegal
strike may not be terminated from his
employment. It is only when he
commits illegal acts during a strike that
he may be declared to have lost his
employment status. Since there
appears no proof that these union
members committed illegal acts during
the strike, they cannot be dismissed.
The striking union members among
private respondents are thus entitled to
reinstatement, there being no just
cause for their dismissal.
However, considering that a decade
has already lapsed from the time the
disputed strike occurred, we find that to
award separation pay in lieu of
reinstatement would be more practical
and appropriate.
No backwages will be awarded to
private respondent-union members as
a penalty for their participation in the
illegal strike. Their continued
participation in said strike, even after
most of their co-workers had returned
to work, can hardly be rewarded by
such an award.
The fate of private respondent-union
officers is different. Their insistence on
unconditional reinstatement or
separation pay and backwages is
unwarranted and unjustified. For
knowingly participating in an illegal
strike, the law mandates that a union
officer may be terminated from
employment. 34
Notwithstanding the fact that INPORT
previously accepted other union
officers and that the screening required
by it was uncalled for, still it cannot be
gainsaid that it possessed the right and
prerogative to terminate the union
officers from service. The law, in using
the word may, grants the employer the
option of declaring a union officer who
participated in an illegal strike as
having lost his employment. 35
Moreover, an illegal strike which, more
often than not, brings about
unnecessary economic disruption and
chaos in the workplace should not be
countenanced by a relaxation of the
sanctions prescribed by law.
The union officers are, therefore, not
entitled to any relief.
SECOND DIVISION
G.R. No. L-37662 July 15, 1975
RADIO COMMUNICATIONS OF THE
PHILIPPINES, INC. (RCPI),
petitioner,
vs.
PHILIPPINE COMMUNICATIONS
ELECTRONICS & ELECTRICITY
WORKERS' FEDERATION (FCWF),
RADIO COMMUNICATIONS OF THE
PHILIPPINES, INC. EMPLOYEES
UNION (RCPIEU), COURT OF
INDUSTRIAL RELATIONS (CIR), and
SPECIAL SHERIFF OF THE COURT
OF INDUSTRIAL RELATIONS,
respondents.
RESOLUTION
BARREDO, J.:
Three incidents arising from Our
decision in this case dated August 30,
1974: (1) Motion for reconsideration
filed by petitioner; (2) Manifestation
and motion for intervention of United
RCPI Communications Labor
Association-Philippine Association of
Free Labor Unions (URCPICLA-
PAFLU); and (3) Prayer for a modified
judgment filed by respondent union,
Philippine Communications,
Electronics & Electricity Workers'
Federation, RCPI Employees' Union
(RCPIEU).
I court had all the earmarks of legality."
In its motion for reconsideration,
petitioner suggests that Our decision
did not resolved squarely the issue of
whether or not respondent Industrial
Court gravely abused its discretion in
declaring petitioner, by its order of
February 15, 1973, as having waived
its right to make an offer of its evidence
and in forthwith considering the matter
of the implementation of the return-to-
work order of April 23, 1968 as directed
in the writ of execution of December
29, 1969 submitted for resolution. It is
claimed that this issue is pivotal, for if it
is resolved in its favor, the ordered
reinstatement of the 167 employees
and workers enumerated in respondent
court's order of October 5, 1973 may
not be complied with until after the
issues of fact regarding their identity
and status as such workers and
employees have been reviewed and
passed upon in the light of the
evidence offered by petitioner at the
hearing. Petitioner invokes Section 20
of Commonwealth Act 103 together
with this Court's injunction in Ang Tibay
vs. CIR, 69 Phil. 365, that the industrial
Court must "use the authorized legal
methods of securing evidence and
informing itself of acts material and
relevant to the controversy" in seeing
to it "that the law is enforced." In other
words, petitioner submits that in
ignoring or refusing to take into
account evidence already in the record
albeit not duly offered, respondent
court sacrificed substance for
technicality.
In this connection, it may be well to
bear in mind, that the reasons why
respondent court felt compelled to act
as it did are explained in its order of
February 15, 1973 thus:
All these aforestated pleadings were
set for hearing on January 29, 1973.
After the parties made clear their
respective positions on the issues
involved, the Court gave the counsel
for respondent until February 3, 1973
within which to submit his offer of
exhibits in writing and the counsel for
petitioner three (3) days after receipt of
the offer in writing within which to file
his objections. Both counsel were also
given by the Court ten (10) days from
submission of the objection within
which to submit simultaneous
memoranda (t. s. n., pp. 2-6, Jan. 29,
1973).
Considering that February 3, 1973, had
already lapsed without respondents
having as yet submitted its offer of
exhibits, despite the so many chances
given to it, there is now valid reason to
grant the urgent motion of petitioner.
(Page 58, Rollo.)
As We have said in Our decision, "(a)
bare recital of the above facts renders
undeniable the far-from-commendable
efforts of petitioner to set at naught a
return-to-work order. Considering that it
is of a peremptory character and its
execution was long overdue, the
challenged actuation of respondent
It is not true then that We have not
resolved the issue referred to. Indeed,
all that need be added here is that
while it is true that labor cases,
especially those involving claims for
compensation due the workers, must
be resolved on the basis of all material
facts, and it is the inescapable duty of
all parties concerned, including the
court, to disregard all technical rules in
barring1 and discovering them, on the
other hand, it is as important that said
cases must be decided on time for the
obvious reason that the claimants are
not in a position to engage in any long
drawn proceedings without risking
either their wherewithal or their
convictions. The Courts cannot leave
the progress of the case to the
convenience of the parties, particularly,
the employer who can afford to keep it
dragging. Accordingly, where the
inquiry into the material facts is
unreasonably delayed by unwarranted
and unexplained actuations of any of
the parties, no abuse of discretion is
committed by the court if it deems the
right of such offending party to present
his factual side of the issue waived.
This is particularly true in the case at
bar, for, as the record shows, the order
of reinstatement which has remained
unobeyed by petitioner to this day was
issued more than seven years ago and
was in fact already nearing five years
old when the above-quoted order of
February 15, 1973 had to be issued in
exasperation by respondent court. The
duty of the court spoken of in Ang
Tibay to ferret out all facts necessary
for the just determination of the rights
of the parties without regard to
technical rules ceases when the court
is disabled by the very indifference and
inattention, if not disregard, of a party
of the orders of the court designed to
expedite proceedings already being
protracted through maneuvers of the
same party.
Besides, it is noteworthy that petitioner
did not even care to move for the
reconsideration of the order in
question. Taking the court for granted,
it merely went ahead and made its
required offer of evidence, at long last,
eighteen days late. If only to make all
and sundry understand that no one can
thus trifle with the court with impunity,
petitioner should suffer the
consequences of its patent lack of
diligence in the protection of its interest
which it has coupled with inexplicable
failure to accord the orders of the court
due attention, considering it was
undertaking a task of vital public
interest, the implementation of a
peremptory return-to-work order it had
issued five years back.
It is of no consequence that
respondent union's motion to strike out
the offer of evidence belatedly filed by
petitioner was not resolved by
respondent court. The fact of the
matter is that said offer had already
been deemed waived by the court.
Procedurally, therefore, there was no
need to strike out something that had
not been included legally in the record.
In view of the foregoing considerations,
and for the reason that the arguments
of petitioner relative to Presidential
Decree No. 21 have been more than
adequately discussed in Our decision,
petitioner's motion is denied for lack of
merit.
II
The motion to intervene of URCPICLA-
PAFLU is likewise without merit. Aside
from the fact that it had already
intervened in the court below but later
on did nothing to protect its pretended
rights relative to the orders assailed
here, on the merits, its position suffers
from the same fatal defect of the
motion for reconsideration of petitioner
in that it is premised on erroneous
assumptions regarding the objective
and purpose of Presidential Decree
No. 21. The members of movant union
were hired or employed by petitioner in
open violation of the order of
reinstatement of the Industrial Court
and as such they cannot have any
legal standing as employees protected
by said Presidential Decree. It would
be absurd if an employer were to be
required to seek prior clearance from
the Department of Labor before he can
layoff workers he has hired as
substitutes for strikers subsequently
ordered reinstated by the courts,
particularly if the employer has, as in
the instant case, hired said substitutes
in violation of a restraining order not to
hire anyone without the permission of
the court. The motion to intervene is,
therefore, denied.
III
It is the plea of respondent unions for
modification of Our decision that
deserves favorable consideration. The
prayer is for Us to include in the
judgment an award of backwages to
the employees and laborers
concerned, in addition to their
immediate reinstatement. The plea is
opposed by petitioner upon the ground
that the issue of payment of
backwages was neither raised in nor
passed upon by the Industrial Court
and is, in fact, not even touched in the
previous pleadings of the parties in the
instant case. Additionally, it is averred
that the matter is now actually being
looked into by the National Labor
Relations Board, hence it is not
necessary for this Court to take it up.
We are of the considered opinion that,
indeed, the award prayed for is in
order. The fact that nothing was done
in the court below about it is not a valid
objection to the granting thereof.
Neither can its denial be justified just
because it was not expressly
demanded by respondents before Our
decision was handed down. Such
award is such a logical and
inescapable consequence of the order
of reinstatement that actually one is
incomplete without the other.
We are not dealing here with
backwages to be paid to workers who
are being ordered reinstated as a
consequence of a finding by the court
that their suspension or dismissal by
their employer is illegal, which, of
course, is dependent on the sound
discretion of the court. (Union of
Philippine Education Employees vs.
Philippine Education Company, 91
Phil. 93.) In the present instance, what
is involved is a failure to comply with,
nay a veiled defiance by respondent of
a return-to-work order of the Industrial
Court issued seven years ago. Worse,
from all appearances, such continued
resistance of petitioner to said
peremptory order can hardly evoke
sympathy. To begin with, its attempt to
question the identity of those entitled to
reinstatement claiming that they were
not actually in their employ at the time
of the declaration of the strike sounds
hollow. It is inconceivable that
strangers and outsiders would try to be
taken in such a surreptitious manner.
Neither can the allegation that
petitioner has presented evidence of
abandonment prior to the strike and of
resignations subsequent thereto be of
help to petitioner. Voluntary
abandonment of work before a strike is
too unusual to be readily credible
whereas purported resignations after a
strike and during the pendency of
protracted reinstatement proceedings
are at least suspect and do not affect
the employee status of the persons
concerned, unless there is patent
evidence that the pretended
abandonment or resignation was due
to another employment.2 Moreover,
the proceedings below had been
stalled by transparent dilatory moves of
petitioner which are basically
irreconcilable with the attitude of
cooperativeness and obedience an
employer is expected to maintain at all
times towards orders of the court
issued by virtue of powers expressly
granted to it by law. (Section 10,
Republic Act 875; Section 19,
Commonwealth Act 103.)
The Industrial Court had no discretion
in the matter. There was no
controversial issue of fault it had to
decide. It was a plain case of exacting
the most natural sanction for a
defiance of its order. If it overlooked
the award, seemingly engrossed as it
was in resolving the issue of identity of
the strikers raised by petitioner, that
was plain error which it is within Our
prerogative to correct motu propio, as
We do in appeals by writ of error in
respect to a manifest error not
assigned nor discussed by appellant in
his brief. (Section 7, Rule 51.)
Employees and workers deprived of
their means of livelihood in defiance of
a judicial order the legality of which is
beyond dispute do not have to remind
the court of their right to get
compensated of their lost earnings
upon their actual reinstatement. Award
thereof should come as a matter of
course. For us not to rule on this point
now only to leave it for action by the
National Labor Relations Board and
thereby give rise to another possible
appeal to Us is to unnecessarily
lengthen even more the tortuous road
already travelled by respondents in
their effort to get what has been
rightfully due them since years ago.
We would be recreant to our
constitutional duty to give protection to
labor that way.
IV
Taking all circumstances of this case
into account, We find no justifiable
reason why We cannot apply here in
respect to the amount of the award the
ruling in Feati University Club vs. Feati
University, G. R. No. L-35103, Aug. 15,
1974, wherein We said:
As to the amount of backwages, the
Court applies the precedent recently
set in Mercury Drug Co. vs. CIR (L-
23357, April 30, 1974, applied in
NASSCO vs. CIR, L-31852 & L-32724,
June 28, 1974 and Almira, et al vs. B.
F. Goodrich Phil., Inc., L-34974, July
25, 1974.) of fixing the amount of
backwages to a just and reasonable
level without qualification or deduction
so as to avoid protracted delay in the
execution of the award for backwages
due to extended hearings and
unavoidable delays and difficulties
encountered in determining the
earnings of the laid-off employees
ordered to be reinstated with
backwages during the pendency of the
case for purposes of deducting the
same from the gross backwages
awarded.
As has been noted, this formula of
awarding reasonable net backwages
without deduction or qualification
relieves the employees from proving or
disproving their earnings during their
lay-off and the employers from
submitting counterproofs, and obviates
the twin evils of idleness on the part of
the employee who would "with folded
arms, remain inactive in the
expectation that a windfall would come
to him" (Itogon Suyoc Mines, Inc. vs.
Sangilo-Itogon Workers Union, 24
SCRA 873 (1968), cited in Diwa ng
Pagkakaisa vs. Filtex International
Corp., 43 SCRA 287 (1972) per
Makalintal, now C.J.) and attrition and
protracted delay in satisfying such
award on the part of unscrupulous
employers who have seized upon the
further proceedings to determine the
actual earnings of the wrongfully
dismissed or laid-off employees to hold
unduly extended hearings for each and
every employee awarded backwages
and thereby render practically nugatory
such award and compel the employees
to agree to unconscionable settlements
of their backwages award in order to
satisfy their dire need. See La
Campana Food Products, Inc. vs. CIR,
28 SCRA 314 (1969) and Kaisahan ng
Mga Manggagawa vs. La Campana
Food Products, Inc., 36 SCRA 142
(1970).1äwphï1.ñët
This formula of making a flat award for
a given period has been adopted in
subsequent cases.3 Accordingly, each
of the 167 members of respondent
unions named in the decision under
review and found by the Industrial
Court to be entitled to reinstatement
should be paid backwages for two
years, without any deduction or
qualification, at the respective rates of
compensation they were receiving at
the time of the strike, November 17,
1967. It goes without saying that all
those who can be shown by
incontestible evidence to have died
prior to the date of the strike shall be
disregarded, but the heirs of those who
have died after the strike shall receive
the respective proportional amounts
due their predecessors-in-interest as of
the time of death, if the same occurred
less than two years from the date of
the strike, and the full two-years
backwages, if after two years from said
date. Any amount paid by reason or on
the occasion of supposed resignations
after the strike shall not be deducted.
Before closing, it must be mentioned
that the Court understands that
notwithstanding that its decision of
August 30, 1974 is immediately
executory, the employees concerned
have not yet been reinstated up to
now. Petitioner is warned that the
pendency of the present incidents is no
excuse for its failure to comply
immediately with said decision and
appropriate action would have to be
taken to protect the dignity of the court,
if such attitude continues.
WHEREFORE, the motion for
reconsideration of petitioner dated
September 16, 1974 as well as the
motion to intervene of URCPICLA-
PAFLU of October 16, 1974 are both
denied for lack of merit. On the other
hand, the motion of respondent
RCPIEU of November 6, 1974 for
modification of judgment is granted, if
only to complete Our decision, which
cannot be final without such award
being included therein. Petitioner is
ordered to pay the 167 employees and
workers of petitioner enumerated in the
lndustrial Court's order of October
5,1973 backwages for two years,
without any deduction or qualification,
pursuant to the tenor of the above
opinion. This resolution is also
immediately executory.
Antonio, Aquino and Concepcion Jr.,
JJ., concur.
Kiok Loy v. NLRC 141 SCRA 179
(1986)
Doctrine: Unfair labor practice is
committed when it is shown that the
respondent employer, after having
been served with a written bargaining
proposal by the petitioning Union, did
not even bother to submit an answer or
reply to the said proposal.
Facts:
· The Pambansang Kilusang
Paggawa, a legitimate late labor
federation, won and was subsequently
certified in a resolution by the Bureau
of Labor Relations as the sole and
exclusive bargaining agent of the rank-
and-file employees of Sweden Ice
Cream Plant.
· The Union furnished the
Company with two copies of its
proposed collective bargaining
agreement. At the same time, it
requested the Company for its counter
proposals. Both requests were ignored
and remained unacted upon by the
Company.
· Thereafter, the Union filed a
"Notice of Strike", with the Bureau of
Labor Relations (BLR) on ground of
unresolved economic issues in
collective bargaining.
· Conciliation proceedings then
followed during the thirty-day statutory
cooling-off period. But all attempts
towards an amicable settlement failed.
· The case was brought to the
National Labor Relations Commission
(NLRC) for compulsory arbitration
pursuant to Presidential Decree No.
823, as amended. But the Company
requested for a lot of postponements.
NLRC ruled that respondent Sweden
Ice Cream is guilty of unjustified refusal
to bargain, in violation of Section (g)
Article 248 (now Article 249), of P.D.
442, as amended.
Issue: Whether the Company is guilty
of unfair labor practice for refusal to
bargain
Held: Yes. Petition dismissed for lack
of merit.
· Collective bargaining is one of
the democratic frameworks under the
New Labor Code, designed to stabilize
the relation between labor and
management and to create a climate of
sound and stable industrial peace. It is
a mutual responsibility of the employer
and the Union and is characterized as
a legal obligation.
· Article 249, par. (g) of the Labor
Code makes it an unfair labor practice
for an employer to refuse "to meet and
convene promptly and expeditiously in
good faith for the purpose of
negotiating an agreement with respect
to wages, hours of work, and all other
terms and conditions of employment
including proposals for adjusting any
grievance or question arising under
such an agreement and executing a
contract incorporating such agreement,
if requested by either party.
· The mechanics of collective
bargaining are set in motion only when
the following jurisdictional
preconditions are present, namely,
o (1) possession of the status of
majority representation of the
employees' representative in
accordance with any of the means of
selection or designation provided for by
the Labor Code;
o (2) proof of majority representation;
and
o (3) a demand to bargain under
Article 251, par. (a) of the New Labor
Code.
· A Company's refusal to make
counter proposal if considered in
relation to the entire bargaining
process, may indicate bad faith since
the Union's request for a counter
proposal is left unanswered. Besides,
petitioner Company's approach and
attitude-stalling the negotiation by a
series of postponements, non-
appearance at the hearing conducted,
and undue delay in submitting its
financial statements, lead to no other
conclusion except that it is unwilling to
negotiate and reach an agreement with
the Union.
EN BANC
G.R. No. 87211 March 5, 1991
JOVENCIO L. MAYOR petitioner,
vs.
HON. CATALINO MACARAIG, HON.
GUILLERMO CARAGUE, HON.
RIZALINA CAJUCOM, HON.
FRANKLIN DRILON, respondents.
LOURDES A. SALES and RICARDO
OLAIREZ, petitioners-intervenors.
G.R. No. 90044 March 5, 1991
PASCUAL V. REYES, petitioner,
vs.
HON. FRANKLIN DRILON,
respondent.
G.R. No. 91547 March 5, 1991
CEFERINO E. DULAY, ROSARIO G.
ENCARNACION and DANIEL LUCAS,
JR., petitioners,
vs.
HON. CATALINO MACARAIG, JR., as
Executive Secretary, HON.
GUILLERMO N. CARAGUE, as
Secretary of Budget and Management,
HON. DIONISIO DE LA SERNA, as
Acting Secretary of Labor &
Employment, BARTOLOME CARALE,
VICENTE S.E. VELOSO III, ROMEO
B. TUOMO, EDNA BONTO PEREZ,
DOMINGO H. ZAPANTA, RUSTICO L.
DIOKNO, LOURDES C. JAVIER,
IRINEO B. BARNALDO, ROGELIO I.
RAYALA, ERNESTO G. LADRINO III,
IRENEA E. CENIZA, BERNABE S.
BATUHAN, MUSIB M. BUAT, L.B.
GONZAGA, JR. and OSCAR ABELLA,
respondents.
G.R. No. 91730 March 5, 1991
CONRADO B. MAGLAYA, petitioner,
vs.
HON. CATALINO MACARAEG, HON.
GUILLERMO CARAGUE, HON.
RIZALINA CAJOCUM, and the
HONORABLE SECRETARY OF
LABOR, respondents.
G.R. No. 94518 March 5, 1991
ROLANDO D. GAMBITO, petitioner,
vs.
THE SECRETARY OF LABOR AND
EMPLOYMENT and THE EXECUTIVE
SECRETARY, respondents.
Ma. Luisa Y. Cortes for petitioner-
intervenor Sales in G.R. No. 87211.
Jose C. Espinas for petitioners in G.R.
Nos. 90044 & 91730.
Magtanggol C. Gunigundo for
petitioners in G.R. No. 91547.
NARVASA, J.:
Five (5) special civil actions are hereby
jointly decided because they involve
one common, fundamental issue, the
constitutionality of Republic Act No.
6715, effective March 21, 1989, in so
far as it declares vacant "all positions
of the Commissioners, Executive Labor
Arbiters and Labor Arbiters of the
National Labor Relations Commission,"
and operates to remove the
incumbents upon the appointment and
qualification of their successors. The
law is entitled, "AN ACT TO EXTEND
PROTECTION TO LABOR,
STRENGTHEN THE
CONSTITUTIONAL RIGHTS OF
WORKERS TO SELF-
ORGANIZATION, COLLECTIVE
BARGAINING AND PEACEFUL
CONCERTED ACTIVITIES, FOSTER
INDUSTRIAL PEACE AND
HARMONY, PROMOTE THE
PREFERENTIAL USE OF
VOLUNTARY MODES OF SETTLING
LABOR DISPUTES AND RE-
ORGANIZE THE NATIONAL LABOR
RELATIONS COMMISSION,
AMENDING PRESIDENTIAL DECREE
NO. 441, AS AMENDED,
OTHERWISE KNOWN AS THE
LABOR CODE OF THE PHILIPPINES,
APPROPRIATING FUNDS
THEREFOR AND FOR OTHER
PURPOSES."1 The provision directly
dealing with the reorganization of the
National Labor Relations Commission
is Section 35. It reads as follows:2
Sec. 35. Equity of the Incumbent.
— Incumbent career officials and rank-
and-file employees of the National
labor Relations Commission not
otherwise affected by the Act shall
continue to hold office without need of
reappointment. However, consistent
with the need to professionalize the
higher levels of officialdom invested
with adjudicatory powers and functions,
and to upgrade their qualifications,
ranks, and salaries or emoluments, all
positions of the Commissioners,
Executive Labor Arbiters and Labor
Arbiters of the present National Labor
Relations Commission are hereby
declared vacant. However, subject
officials shall continue to temporarily
discharge their duties and functions
until their successors shall have been
duly appointed and qualified.
The first of these five consolidated
cases was filed by Labor Arbiter
Jovencio Ll. Mayor on March 8, 1989.
In the year that followed, eight other
officers of the Commission, as initiators
of their own separate actions or as
intervenors, joined Mayor in the
attempt to invalidate the reorganization
and to be reinstated to their positions in
the Government service.
G.R. No. 87211: Jovencio Mayor; and
Intervenors Lourdes A. Sales and
Ricardo Olairez
Jovencio Ll. Mayor, a member of the
Philippine Bar for fifteen (15) years,
was appointed Labor Arbiter in 1986
after he had, according to him, met the
prescribed qualifications and passed "a
rigid screening process." Fearing that
he would be removed from office on
account of the expected
reorganization, he filed in this Court the
action now docketed as G.R. No.
87211. His fears proved groundless,
however. He was in fact reappointed a
Labor Arbiter on March 8, 1990.
Hence, as he himself says, the case
became moot as to him.
Like Mayor, both intervenors Lourdes
A. Sales and Ricardo N. Olairez were
appointed Labor Arbiters in 1986, but
unlike Mayor, were not among the one
hundred fifty-one (151) Labor Arbiters
reappointed by the President on March
8, 1990.
G.R. No. 90044; Pascual Y Reyes; and
Intervenor Eugenio L Sagmit, Jr.
At the time of the effectivity of R.A. No.
6715, Pascual Y. Reyes was holding
the office of Executive Director of the
National Labor Relations Commission
in virtue of an appointment extended to
him on May 30, 1975. As specified by
Administrative Order No. 10 of the
Secretary of Labor, dated July 14,
1975, the functions of his office were
"to take charge of all administrative
matters of the Commission and to have
direct supervision overall units and
personnel assigned to perform
administrative tasks;" and Article 213 of
the Labor Code, as amended, declared
that the "Executive Director, assisted
by a Deputy Executive Director, shall
exercise the administrative functions of
the Commission." Reyes states that he
has been "a public servant for 42
years," and "is about to retire at sixty-
five (65)," in 1991.
The petitioner-in-intervention, Eugenio
I. Sagmit, Jr., was Reyes' Deputy
Executive Director, appointed as such
on October 27, 1987 after twenty-five
(25) years of government service.
Both Reyes and Sagmit were informed
that they had been separated from
employment upon the effectivity of R.A.
No. 6715, pursuant to a Memorandum-
Order issued by then Secretary of
Labor Franklin Drilon on August 17,
1989 to the effect that the offices of
Executive Director and Deputy
Executive Director had been abolished
by Section 35, in relation to Section 5
of said Act, and "their functions
transferred to the Chairman, aided by
the Executive Clerk.
Reyes moved for reconsideration on
August 29, 1989, but when no action
was allegedly taken thereon, he
instituted the action at bar, G.R. No.
90044. Sagmit was afterwards granted
leave to intervene in the action.
G.R. No. 91547: Ceferino Dulay,
Rosario G. Encarnacion, and Daniel M.
Lucas
Petitioners Rosario G. Encarnacion
and Daniel M. Lucas, Jr. were
appointed National Labor Relations
Commissioners on October 20, 1986,
after the Commission was reorganized
pursuant to Executive Order No. 47 of
President Aquino. Later, or more
precisely on November 19, 1986,
Lucas was designated Presiding
Commissioner of the Commission's
Second Division; and Commissioner
Ceferino E. Dulay was appointed
Presiding Commissioner of the Third
Division.
Executive Order No. 252, issued by the
President on July 25, 1987, amended
Article 215 of the Labor Code by
providing that "the Commissioners
appointed under Executive Order No.
47 dated September 10, 1986 shall
hold office for a term of six (6) years . .
. (but of those thus appointed) three
shall hold office for four (4) years, and
three for two (2) years . . . without
prejudice to reappointment." Under
Executive Order No. 252, the terms of
Encarnacion and Lucas would expire
on October 23, 1992, and that of
Dulay, on December 18, 1992.
On November 18, 1989, R.A. No. 6715
being then already in effect, the
President extended to Encarnacion,
Lucas and Dulay new appointments as
Commissioners of the NLRC despite
the fact that, according to them, they
had not been served with notice of the
termination of their services as
incumbent commissioners, and no
vacancy existed in their positions. Their
new appointments were submitted to
Congress, but since Congress
adjourned on December 22, 1989
without approving their appointments,
said appointments became functus
officio.
No other appointments were thereafter
extended to Encarnacion and Dulay.
Lucas was however offered the
position of Assistant Regional Director
by Secretary Drilon and then by Acting
Secretary Dionisio de la Serna (by
letter dated January 9, 1990 which
referred to his appointment as such
Assistant Regional Director supposedly
"issued by the President on November
8, 1989"). Lucas declined the offer,
believing it imported a demotion.
They all pray that their removal be
pronounced unconstitutional and void
and they be declared Commissioners
lawfully in office, or, alternatively, that
they be paid all salaries, benefits and
emoluments accruing to them for the
unexpired portions of their six-year
terms and allowed to enjoy retirement
benefits under applicable laws
(pursuant to R.A. 910 and the
Resolution re Judge Mario Ortiz, G. R.
No. 78951, June 28, 1988).
Of the incumbent Commissioners as of
the effectivity of R.A. 6715, six (6) were
reappointed, namely: (1) Hon. Edna
Bonto Perez (as Presiding
Commissioner, Second Division NCR]),
(2) Domingo H. Zapanta (Associate
Commissioner, Second Division), (3)
Lourdes C. Javier (Presiding
Commissioner, Third Division [Luzon
except NCR]), (4) Ernesto G. Ladrido
III (Presiding Commissioner, Fourth
Division [Visayas]), (5) Musib M. Buat
(Presiding Commissioner, Fifth Division
[Mindanao]), and (6) Oscar N. Abella
(Associate Commissioner, Fifth
Division). Other members appointed to
the reorganized Commission were
Vicente S.E. Veloso III, Romeo B.
Putong, Rustico L. Diokno, Ireneo B.
Bernardo, Rogelio I. Rayala, Irenea E.
Ceniza, Bernabe S. Batuhan, and Leon
G. Gonzaga, Jr. Appointed Chairman
was Hon. Bartolome Carale, quondam
Dean of the College of Law of the
University of the Philippines.
G.R. No. 91730: Conrado Maglaya
Petitioner Conrado Maglaya alleges
that he has been "a member of the
Philippine Bar for thirty-six (36) years
of which 31 years . . . (had been)
devoted to public service, the last 24
years in the field of labor relations law;"
that he was appointed Labor Arbiter on
May 30, 1975 and "was retained in
such position despite the
reorganization under the Freedom
Constitution of 1986 . . . (and) later
promoted to and appointed by the
President as Commissioner of the . . .
(NLRC) First Division on October 23,
1986." He complains that he was
effectively removed from his position
as a result of the designation of the full
complement of Commissioners in and
to all Five Divisions of the NLRC by
Administrative Order No. 161 dated
November 18, 1989, issued by Labor
Secretary Drilon.
G.R. No. 94518: Rolando D. Gambito
Rolando Gambito passed the bar
examinations in 1971, joined the
Government service in 1974, serving
for sixteen years in the Department of
Health, and as Labor Arbiter in the
Department of Labor and Employment
from October, 1986. He was not
included in the list of newly appointed
Labor Arbiters released on March 8,
1990; and his attempt to obtain a
recosideration of his exclusion
therefrom and bring about his
reinstatement as Labor Arbiter was
unavailing.
The Basic Issue
A number of issues have been raised
and ventilated by the petitioners in their
separate pleadings. They may all be
reduced to one basic question, relating
to the constitutionality of the provisions
of Republic Act No. 6715 DECLARING
VACANT "all positions of the
Commissioners, Executive Labor
Arbiters and Labor Arbiters of the
present National Labor Relations
Commission,"3 according to which the
public respondents —
1) considered as effectively
separated from the service inter alia, all
holders of said positions at the time of
the effectivity of said Republic Act No.
6715, including the positions of
Executive Director and Deputy
Executive Director of the Commission,
and
2) consequently, thereafter
caused the appointment of other
persons to the new positions specified
in said statute: of Chairman
Commissioners, Executive Clerk,
Deputy Executive Clerk, and Labor
Arbiters of the reorganized National
Labor Relations Commission. The old
positions were declared vacant
because, as the statute states, of "the
need to professionalize the higher
levels of officialdom invested with
adjudicatory powers and functions, and
to upgrade their qualifications, ranks,
and salaries or emoluments."
As everyone knows, security of tenure
is a protected right under the
Constitution.1âwphi1 The right is
secured to all employees in privates as
well as in public employment. "No
officer or employee in the civil service,"
the Constitution declares, "shall be
removed or suspended except for
cause provided by law."4
There can scarcely be any doubt that
each of the petitioners — effected on the nature, composition,
commissioner, administrative officer, or
labor arbiter — falls within the concept
of an "officer or employee in the civil
service" since the civil service
"embraces all branches, subdivisions,
instrumentalities, and agencies of the
Government, including government—
owned or controlled corporations with
original charters."5 The Commissioners
thus had the right to remain of office
until the expiration of the terms for
which they had been appointed, unless
sooner removed "for cause provided by
law." So, too, the Executive Director
and Deputy Executive Director, and the
Labor Arbiters had the right to retain
their positions until the age of
compulsory retirement, unless sooner
removed "for cause provided by law."
None of them could be deemed to be
serving at the pleasure of the
President.
Now, a recognized cause for several or
termination of employment of a
Government officer or employee is the
abolition by law of his office as a result
of reorganization carried out by reason
of economy or to remove redundancy
of functions, or clear and explicit
constitutional mandate for such
termination of employment.6 Abolition
of an office is obviously not the same
as the declaration that that office is
vacant. While it is undoubtedly a
prerogative of the legislature to abolish
certain offices, it can not be conceded
the power to simply pronounce those
offices vacant and thereby effectively
remove the occupants or holders
thereof from the civil service. Such an
act would constitute, on its face, an
infringement of the constitutional
guarantee of security of tenure, and will
have to be struck down on that
account. It can not be justified by the
professed "need to professionalize the
higher levels of officialdom invested
with adjudicatory powers and functions,
and to upgrade their qualifications,
ranks, and salaries or emoluments."
The Constitution does not, of course,
ordain the abolition of the petitioners'
positions of their removal from their
offices; and there is no claim that the
petitioners' separation from the service
is due to a cause other than RA 6715.
The inquiry therefore should be
whether or not RA 6715 has worked
such an abolition of the petitioners'
offices, expressly or impliedly. This is
the only mode by which, under the
circumstances, the petitioners' removal
from their positions may be defended
and sustained.
It is immediately apparent that there is
no express abolition in RA 6715 of the
petitioners' positions. So, justification
must be sought, if at all, in an implied
abolition thereof; i.e., that resulting
from an irreconcilable inconsistency
between the nature, duties and
functions of the petitioners' offices
under the old rules and those
corresponding thereof under the new
law. An examination of the relevant
provisions of RA 6715, with a view to
discovering the changes thereby
powers, duties and functions of the
Commission and the Commissioners,
the Executive Director, the Deputy
Executive Director, and the labor
Arbiters under the prior legislation, fails
to disclose such essential
inconsistencies.
1. Amendments as Regards
the NLRC and the Commissioners
First, as regards the National Labor
Relations Commissioners.
A. Nature and Composition of
the Commission, Generally
1. Prior to its amendment by
RA 6715, Article 213 of the Labor Code
envisaged the NLRC as being an
integral part of the Department of labor
and Employment. "There shall," it said,
"be a National Labor Relations
Commission in the Department of
Labor and Employment . . . ." RA 6715
would appear to have made the
Commission somewhat more
autonomous. Article 213 now declares
that, "There shall be a National labor
Relations Commission which shall be
attached to the Department of labor
and Employment for program
coordination only . . . ."
2. Tripartite representation
was to a certain extent restored in the
Commission. The same Section 213,
as amended, now provides that the
Chairman and fourteen (14) members
composing the NLRC shall be chosen
from the workers', employers' and the
public sectors, as follows:
Five (5) members each shall be
chosen from among the nominees of
the workers and employers
organization, respectively. The
Chairman and the four (4) remaining
members shall come from the public
sector, with the latter to be chosen
from among the recommendees of the
Secretary of Labor and Employment.
However, once they assume office,"
the members nominated by the
workers and employers organizations
shall divest themselves of any
affiliations with or interest in the
federation or association to which they
belong."
B. Allocation of Powers
Between NLRC En Banc and its
Divisions
Another amendment was made in
respect of the allocation of powers and
functions between the Commission en
banc, on the one hand, and its
divisions, on the other. Both under the
old and the amended law, the
Commission was vested with rule-
making and administrative authority, as
well as adjudicatory and other powers,
functions and duties, and could sit en
banc or in divisions of three (3)
members each. But whereas under the
old law, the cases to be decided en
banc and those by a division were
determined by rules laid down by the
Commission with the approval of the ex
officio, Chairman (the Secretary of
labor) — said Commission, in other
words, then exercise both
administrative and adjudicatory powers
— the law now, as amended by RA
6715, provides that —
1) the Commission "shall sit
en banc only for purposes of
promulgating rules and regulations
governing the hearing and disposition
of cases before any of its divisions and
regional branches and formulating
policies affecting its administration and
operations;" but
2) it "shall exercise its
adjudicatory and all other powers,
functions and duties through its
divisions."
C. Official Stations, and
Appellate Jurisdiction over Fixed
Territory
Other changes related to the official
station of the Commission and its
divisions, and the territory over which
the divisions could exercise exclusive
appellate jurisdiction.
1. Under the old law, the
Commission en banc and its divisions
had their main office in Metropolitan
Manila; and appeals could be taken to
them from decisions of Labor Arbiters
regardless of the regional office
whence the case originated.
2. Under the law now, the
First and Second Divisions have their
official station in Metropolitan Manila
and "handle cases coming from the
National Capital Region;" the Third
Division has its main office also in
Metropolitan Manila but would have
appellate jurisdiction over "cases from
other parts of Luzon;" and the Fourth
and Fifth Divisions have their main
offices in Cebu and Cagayan de Oro
City, and exercise jurisdiction over
cases "from the Visayas and
Mindanao," respectively; and the
appellate authority of the divisions is
exclusive "within their respective
territorial jurisdiction."
D. Qualifications and Tenure
of Commissioners
Revisions were also made by RA 6715
with respect to the qualifications and
tenure of the National Labor Relations
Commissioners.
Prescribed by the old law as
qualifications for commissioners —
appointed for a term of six (6) years —
were that they (a) by members of the
Philippine bar, and (b) have at least
five years' experience in handling
labor-management relations.7
RA 6715, on the other hand, requires
(a) membership in the bar, (b)
engagement in the practice of law for
at least 15 years, (c) at least five years'
experience or exposure in the field of
labor-management relations, and (d)
preferably, residence in the region
where the commissioner is to hold
office. The commissioners appointed
shall hold office during good behavior
until they reach the age of sixty-five
(65) years, unless they are sooner
removed for cause as provided by law
or become incapacited to discharge the
duties of their office.
2. Amendments Regarding
Executive Labor Arbiters and Labor
Arbiters
A. Qualifications
The old provided for one hundred fifty
(150) labor arbiters assigned to the
different regional offices or branches of
the Department of Labor and
Employment (including sub-regional
branches or provincial extension units),
each regional branch being headed by
an Executive Labor Arbiter. RA 6715
does not specify any fixed number of
labor arbiters, but simply provides that
there shall be as many labor arbiters
as may be necessary for the effective
and efficient operation of the
Commission.
The old law declared that Executive
Labor Arbiters and Labor Arbiters
should be members of the Bar, with at
least two (2) years experience in the
field of labor management relations.
They were appointed by the President
upon recommendation of the
Chairman, and were "subject to the
Civil Service Law, rules and
regulations."
On the other hand, RA 6715 requires
that the "Executive Labor Arbiters and
Labor Arbiters shall likewise be
members of the Philippine Bar," but in
addition "must have been in the
practice of law in the Philippines for at
least seven (7) years, with at least
three (3) years experience or exposure
in the field of labor-management
relations." For "purposes of
reappointment," however, "incumbent
Executive Labor Arbiters and Labor
Arbiters who have been engaged in the
practice of law for at least five (5) years
may be considered as already
qualified." They are appointed by the
President, on recommendation of the
Secretary of Labor and Employment,
and are subject to the Civil Service
Law, rules and regulations.
B. Exclusive Original
Jurisdiction
Before the effectivity of RA 6715, the
exclusive original jurisdiction of labor
arbiters comprehended the following
cases involving all workers, whether
agricultural or non-agricultural:
(1) Unfair labor practice
cases;
(2) Those that workers may
file involving wages, hours of work and
other terms and conditions of
employment;
(3) All money claims of
workers, including those based on non-
payment or underpayment of wages,
overtime compensation, separation pay
and other benefits provided by law or
appropriate agreement, except claims
for employees' compensation, social
security, medicare and maternity
benefits;
(4) Cases involving household
services; and
(5) Cases arising from any
violation of Article 265 of this Code,
including questions involving the
legality of strikes and lockouts.
Some changes were introduced by RA
6715, indicated by italics in the
enumeration which shortly follows. The
exclusive, original jurisdiction of Labor
Arbiters now embraces the following
involving all workers, whether
agricultural or non-agricultural:
(1) Unfair labor practice
cases;
(2) Termination disputes;
(3) If accompanies 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;8
(5) Cases arising from any
violation of Article 264 of this Code,
including questions involving the
legality of strikes and lockouts;
(6) Except claims for
employees compensation, social
security, medicare and maternity
benefits, all other claims arising from
employer-employee relations, including
those of persons in domestic or
household service, involving an
amount exceeding five thousand pesos
(P5,000.00), whether or not
accompanies with a claim for
reinstatement.
Now, as before, the Labor Arbiters are
given thirty (30) calendar days after the
submission of the case by the parties
to decide the case, without extension,
except that the present statute stresses
that "even in the absence of
stenographic notes," the period to
decide is still thirty days, without
extension.
Furthermore, RA 6715 provides that
"Cases arising from the interpretation
or implementation of collective
bargaining agreements and those
arising from the interpretation or
enforcement of company personnel
policies shall be disposed of by the
Labor Arbiter by referring the same to
the grievance machinery and voluntary
arbitration as may be provided in said
agreements."
3. Amendments as Regards
the Executive Director and Deputy
Executive Director
Prior to RA 6715, there was, as earlier
stated, an Executive Director, assisted
by a Deputy Executive Director, who
was charged with the "exercise (of) the
administrative functions of the
Commission."9 More particularly, his
chief functions were "to take charge of
all administrative matters of the
Commission and to have direct
supervision over all units and
personnel assigned to perform
administrative tasks."10 Although not
so stated in the law, in the performance
of their functions, the Executive
Director and the Deputy Executive
Director were obviously themselves
subject to the supervision and control
of the head of office, the ex officio
Chairman of the National Labor
Relations Commission (the Secretary
of Labor), or the Commission itself.
Under RA 6715, the Secretary of Labor
is no longer ex officio Chairman of the
Commission. There has been created
the office of Chairman, who "shall have
the administrative supervision over the
Commission and its regional branches
and all its personnel, including the
Executive Labor Arbiters and Labor
Arbiters." In this function, the law says,
he shall be "aided by the Executive
Clerk of the Commission."
The Executive Clerk appears to be the
officer who used to be known under the
old law as the Executive Director. The
office of Executive Director is nowhere
mentioned in RA 6715. Said Executive
Clerk is given the additional
responsibility of assisting the
Commission en banc and the First
Division, in performing "such similar or
equivalent functions and duties as are
discharged by the Clerk of Court . . . of
the Court of Appeals." The position of
Deputy Executive Clerks have also
been created whose main role is to
assist the other divisions of the
Commission (the second, third, fourth
and fifth) "in the performance of such
similar or equivalent functions and
duties as are discharged by the . . .
Deputy Clerk(s) of the Court of
Appeals."
Summing up —
1. Republic Act No. 6715 did
not abolish the NLRC, or change its
essential character as a supervisory
and adjudicatory body. Under said Act,
as under the former law, the NLRC
continues to act collegially, whether it
performs administrative or rule-making
functions or exercises appellate
jurisdiction to review decisions and
final orders of the Labor Arbiters. The
provisions conferring a somewhat
greater measure of autonomy;
requiring that its membership be drawn
from tripartite sectors (workers,
employees and the public sector);
changing the official stations of the
Commission's divisions, and even
those prescribing higher or other
qualifications for the positions of
Commissioner which, if at all, should
operate only prospectively, not to
mention the fact that the petitioners (in
G.R. No. 91547) have asserted without
dispute that they possess the new
qualifications — none of these can be
said to work so essential or radical a
revision of the nature, powers and
duties of the NLRC as to justify a
conclusion that the Act in truth did not
merely declare vacant but actually
abolished the offices of commissioners
and created others in their place.
2. Similar considerations
yield the same conclusion as far as the
positions of Labor Arbiters are
concerned, there being no essential
inconsistency on that score between
Republic Act No. 6715 and the old law.
The Labor Arbiters continue to exercise
the same basic power and function: the
adjudication, in the first instance, of
certain classes of labor disputes. Their
original and exclusive jurisdiction
remains substantially the same under
both the old law and the new. Again,
their incumbents' constitutionally
guaranteed security of tenure cannot
be defeated by the provision for higher
or other qualifications than were
prescribed under the old law; said
provision can only operate
prospectively and as to new
appointees to positions regularly
vacated; and there is, besides, also no
showing that the petitioning Arbiters do
not qualify under the new law.
3. The position titles of
"Executive Clerk" and "Deputy
Executive Clerk(s)" provided for in RA
6715 are obviously not those of newly-
created offices, but new appellations or
designations given to the existing
positions of Executive Director and
Deputy Executive Director. There is no
essential change from the prescribed
and basically administrative duties of
these positions and, at the same time,
no mention in the Act of the former
titles, from which the logical conclusion
is that what was intended was merely a
change in nomenclature, not an
express or implied abolition. Neither
does the Act specify the qualifications
for Executive Clerk and Deputy
Executive Clerks. There is no reason to
suppose that these could be higher
than those for Executive Director and
Deputy Executive Director, or that
anything inheres in these positions that
would preclude their incumbents from
being named Executive Clerk and
Deputy Executive Clerks.
WHEREFORE, the petitions are, as
they must be, GRANTED , and the
following specific dispositions are
hereby RENDERED:
1. In G.R. No. 91547, and
G.R. No. 91730, the removal of
petitioners Rosario G. Encarnacion,
Daniel M. Lucas, Jr., Ceferino E.
Dulay, and Conrado Maglaya as
Commissioners of the NLRC is ruled
unconstitutional and void; however, to
avoid displacement of any of the
incumbent Commissioners now
serving, it not appearing that any of
them is unfit or has given cause for
removal, and conformably to the
alternative prayer of the petitioners
themselves, it is ORDERED that said
petitioners be paid all salaries, benefits
and emoluments accruing to them for
the unexpired portions of their six-year
terms and allowed to enjoy retirement
benefits under applicable laws,
pursuant to RA No. 910 and this
Court's Resolution in Ortiz vs.
Commission on Elections, G.R. No.
79857, 161 SCRA 812;
This disposition does not involve or
apply to respondent Hon. Bartolome
Carale, who replaced the Secretary of
Labor as ex officio Chairman of the
NLRC pursuant to RA 6715, none of
the petitioners having been affected or
in any manner prejudiced by his
appointment and incumbency as such;
2. In G.R. No. 90044, the
removal of petitioner Pascual Y. Reyes
and petitioner-in-intervention Eugenio
L. Sagmit, Jr. as NLRC Executive
Director and Deputy Executive
Director, respectively, is likewise
declared unconstitutional and void, and
they are ordered reinstated as
Executive Clerk and Deputy Executive
Clerk, respectively, unless they opt for
retirement, in either case with full back
salaries, emoluments and benefits from
the date of their removal to that of their
reinstatement; and
3. In G.R. Nos. 87211, and
94518, petitioners-intervenors Lourdes
A. Sales and Ricardo Olairez and
petitioner Rolando D. Gambito, having
also been illegally removed as Labor
Arbiters, are ordered reinstated to said
positions with full back salaries,
emoluments and benefits from the
dates of their removal up to the time
they are reinstated.
No pronouncement as to costs.
SO ORDERED.
FIRST DIVISION
G.R. No. 89621 September
24, 1991
PEPSI COLA DISTRIBUTORS OF
THE PHILIPPINES, INC., represented
by its Plant General Manager
ANTHONY B. SIAN, ELEAZAR
LIMBAB, IRENEO BALTAZAR &
JORGE HERAYA, petitioners,
vs.
HON. LOLITA O. GAL-LANG,
SALVADOR NOVILLA, ALEJANDRO
OLIVA, WILFREDO CABAÑAS &
FULGENCIO LEGO, respondents.
Aurelio D. Menzon for petitioners.
Mario P. Nicolasora co-counsel for
petitioners.
Papiano L. Santo for private
respondents.
CRUZ, J.:
The question now before us has been
categorically resolved in earlier
decisions of the Court that a little more
diligent research would have disclosed
to the petitioners. On the basis of those
cases and the facts now before us, the
petition must be denied.
The private respondents were
employees of the petitioner who were
suspected of complicity in the irregular
disposition of empty Pepsi Cola bottles.
On July 16, 1987, the petitioners filed a
criminal complaint for theft against
them but this was later withdrawn and
substituted with a criminal complaint for
falsification of private documents. On
November 26, 1987, after a preliminary
investigation conducted by the
Municipal Trial Court of Tanauan,
Leyte, the complaint was dismissed.
The dismissal was affirmed on April 8,
1988, by the Office of the Provincial
Prosecutor.
Meantime, allegedly after an
administrative investigation, the private
respondents were dismissed by the
petitioner company on November 23,
1987. As a result, they lodged a
complaint for illegal dismissal with the
Regional Arbitration Branch of the
NLRC in Tacloban City on December
1, 1987, and decisions manded
reinstatement with damages. In
addition, they instituted in the Regional
Trial Court of Leyte, on April 4, 1988, a
separate civil complaint against the
petitioners for damages arising from
what they claimed to be their malicious
prosecution.
The petitioners moved to dismiss the
civil complaint on the ground that the
trial court had no jurisdiction over the
case because it involved employee-
employer relations that were
exclusively cognizable by the labor
arbiter. The motion was granted on
February 6, 1989. On July 6, 1989,
however, the respondent judge, acting
on the motion for reconsideration,
reinstated the complaint, saying it was
"distinct from the labor case for
damages now pending before the labor
courts." The petitioners then came to
this Court for relief.
The petitioners invoke Article 217 of
the Labor Code and a number of
decisions of this Court to support their
position that the private respondents
civil complaint for damages falls under
the jurisdiction of the labor arbiter.
They particularly cite the case of Getz
Corporation v. Court of Appeals,1
where it was held that a court of first
instance had no jurisdiction over the
complaint filed by a dismissed
employee "for unpaid salary and other
employment benefits, termination pay
and moral and exemplary damages."
We hold at the outset that the case is
not in point because what was involved
there was a claim arising from the
alleged illegal dismissal of an
employee, who chose to complain to
the regular court and not to the labor
arbiter. Obviously, the claim arose from
employee-employer relations and so
came under Article 217 of the Labor
Code which then provided as follows:
ART. 217. Jurisdiction of Labor Arbiters
and the Commission. — (a) The Labor
Arbiters shall have the original and
exclusive jurisdiction to hear and
decide within thirty (30) working days
after submission of the case by the
parties for decision, the following cases
involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice
cases;
2. Those that workers may
file involving wages, hours of work and
other terms and conditions of
employment;
3. All money claims of
workers, including those based on non-
payment or underpayment of wages,
overtime compensation, separation pay
and other benefits provided by law or
appropriate agreement, except claims
for employees' compensation, social
security, medicare and maternity
benefits;
4. Cases involving household
services; and
5. Cases arising from any
violation of Article 265 of this Code,
including questions involving the
legality of strikes and lockouts.
(b) The Commission shall have
exclusive appellate jurisdiction over all
cases decided by labor Arbiters.2
It must be stressed that not every
controversy involving workers and their
employers can be resolved only by the
labor arbiters. This will be so only if
there is a "reasonable causal
connection" between the claim
asserted and employee-employer
relations to put the case under the
provisions of Article 217. Absent such
a link, the complaint will be cognizable
by the regular courts of justice in the
exercise of their civil and criminal
jurisdiction.
In Medina v. Castro-Bartolome,3 two
employees filed in the Court of First
Instance of Rizal a civil complaint for
damages against their employer for
slanderous remarks made against
them by the company president. On
the order dismissing the case because
it came under the jurisdiction of the
labor arbiters, Justice Vicente Abad
Santos said for the Court:
It is obvious from the complaint that the
plaintiffs have not alleged any unfair
labor practice. Theirs is a simple action
for damages for tortious acts allegedly
committed by the defendants. Such
being the case, the governing statute is
the Civil Code and not the Labor Code.
It results that the orders under review
are based on a wrong premise.
In Singapore Airlines Ltd. v. Paño,4
where the plaintiff was suing for
damages for alleged violation by the
defendant of an "Agreement for a
Course of Conversion Training at the
Expense of Singapore Airlines
Limited," the jurisdiction of the Court of
First Instance of Rizal over the case
was questioned. The Court, citing the
earlier case of Quisaba v. Sta. Ines
Melale Veneer and Plywood, Inc.,5
declared through Justice Herrera:
Stated differently, petitioner seeks
protection under the civil laws and
claims no benefits under the Labor
Code. The primary relief sought is for
liquidated damages for breach of a
contractual obligation. The other items
demanded are not labor benefits
demanded by workers generally taken
cognizance of in labor disputes, such
as payment of wages, overtime
compensation or separation pay. The
items claimed are the natural
consequences flowing from breach of
an obligation, intrinsically a civil
dispute.
In Molave Sales, Inc. v. Laron,6 the
same Justice held for the Court that the
claim of the plaintiff against its sales
manager for payment of certain
accounts pertaining to his purchase of
vehicles and automotive parts, repairs
of such vehicles, and cash advances
from the corporation was properly
cognizable by the Regional Trial Court
of Dagupan City and not the labor
arbiter, because "although a lodged with Labor Arbiters on an
controversy is between an employer
and an employee, the Labor Arbiters
have nojurisdiction if the Labor Code is
not involved."
The latest ruling on this issue is found
in San Miguel Corporation v. NLRC,7
where the above cases are cited and
the changes in Article 217 are
recounted. That case involved a claim
of an employee for a P60,000.00 prize
for a proposal made by him which he
alleged had been accepted and
implemented by the defendant
corporation in the processing of one of
its beer products. The claim was filed
with the labor arbiter, who dismissed it
for lack of jurisdiction but was reversed
by the NLRC on appeal. In setting
aside the appealed decision and
dismissing the complaint, the Court
observed through Justice Feliciano:
It is the character of the principal relief
sought that appears essential, in this
connection. Where such principal relief
is to be granted under labor legislation
or a collective bargaining agreement,
the case should fall within the
jurisdiction of the Labor Arbiter and the
NLRC, even though a claim for
damages might be asserted as an
incident to such claim.
xxx xxx xxx
Where the claim to the principal relief
sought is to be resolved not by
reference to the Labor Code or other
labor relations statute or a collective
bargaining agreement but by the
general civil law, the jurisdiction over
the dispute belongs to the regular
courts of justice and not to the Labor
Arbiter and the NLRC. In such
situations, resolution of the dispute
requires expertise, not in labor
management relations nor in wage
structures and other terms and
conditions of employment, but rather in
the application of the general civil law.
Clearly, such claims fall outside the
area of competence or expertise
ordinarily ascribed to Labor Arbiters
and the NLRC and the rationale for
granting jurisdiction over such claims to
these agencies disappears.
xxx xxx xxx
While paragraph 3 above refers to "all
money claims of workers," it is not
necessary to suppose that the entire
universe of money claims that might be
asserted by workers against their
employers has been absorbed into the
original and exclusive jurisdiction of
Labor Arbiters.
xxx xxx xxx
For it cannot be presumed that money
claims of workers which do not arise
out of or in connection with their
employer-employee relationship, and
which would therefore fall within the
general jurisdiction of the regular
courts of justice, were intended by the
legislative authority to be taken away
from the jurisdiction of the courts and
exclusive basis. The Court, therefore,
believes and so holds that the 'money
claims of workers" referred to in
paragraph 3 of Article 217 embraces
money claims which arise out of or in
connection with the employer-
employee relationship, or some aspect
or incident of such relationship. Put a
little differently, that money claims of
workers which now fall within the
original and exclusive jurisdiction of
Labor Arbiters are those money claims
which have some reasonable causal
connection with the employer-
employee relationship (Ibid.).
The case now before the Court
involves a complaint for damages for
malicious prosecution which was filed
with the Regional Trial Court of Leyte
by the employees of the defendant
company. It does not appear that there
is a "reasonable causal connection"
between the complaint and the
relations of the parties as employer
and employees. The complaint did not
arise from such relations and in fact
could have arisen independently of an
employment relationship between the
parties. No such relationship or any
unfair labor practice is asserted. What
the employees are alleging is that the
petitioners acted with bad faith when
they filed the criminal complaint which
the Municipal Trial Court said was
intended "to harass the poor
employees" and the dismissal of which
was affirmed by the Provincial
Prosecutor "for lack of evidence to
establish even a slightest probability
that all the respondents herein have
committed the crime imputed against
them." This is a matter which the labor
arbiter has no competence to resolve
as the applicable law is not the Labor
Code but the Revised Penal Code.
"Talents differ, all is well and wisely
put," so observed the philosopher-
poet.8 So it must be in the case we
here decide.
WHEREFORE, the order dated July 6,
1989, is AFFIRMED and the petition
DENIED, with costs against the
petitioner.
SO ORDERED.
Narvasa (Chairman), Griño-Aquino and
Medialdea, JJ., concur.
PAL vs NLRC 1998
Facts:
Private respondents (Ferdinand Pineda
and Godofredo Cabling) 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. One
person in the name of Joseph Abaca
was intercepted at the airport carrying
a bag containing 2.5 million pesos who
allegedly found said plastic bag at the
Skybed section of arrival flight
PR300/03 where private respondents
served as flight attendants. After
having been implicated by Abaca in the
incident before the respondent’s
disciplinary board, it is was Abaca
himself who gave exculpating
statements to the same board and
declared that the private respondents
were not the owners of the said
currencies. 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,’
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 find out that
they were terminated by PAL.
Aggrieved by said
dismissal, private respondents filed
with the NLRC a petition 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."
The NLRC issued the writ of injunction.
PAL moved for reconsideration on the
ground that 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
and thereby divesting the labor arbiter
of its original and exclusive jurisdiction
over illegal dismissal cases .
Issue: W/N the NLRC acted with grave
abuse of discretion on issuing the writ
of injunction
Held:
Yes.
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.
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.
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."
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 (P 5,000.00),
whether or not accompanied with a
claim for reinstatement.
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.
On the other hand, the NLRC shall
have exclusive appellate jurisdiction
over all cases decided by laborarbiters
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
LaborCode 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.
THIRD DIVISION
SPIC N SPAN SERVICES
CORPORATION,
Petitioner, VS.
GLORIA PAJE, LOLITA GOMEZ,
MIRIAM CATACUTAN, ESTRELLA
ZAPATA, GLORIA SUMANG, JULIET
DINGAL, MYRA AMANTE, and FE S.
BERNANDO,
August 25, 2010
BRION, J.:
Before the Court is the petition for
review on certiorari[1] filed by Spic N
Span Services Corporation (SNS) to
seek the reversal of the October 25,
2004 Decision[2] and the August 2,
2006 Resolution[3] of the Court of
Appeals (CA) in CA-G.R. SP No.
83215, entitled "Gloria Paje, Lolita
Gomez, Miriam Catacutan, Estrella
Zapata, Gloria Sumang, Juliet Dingal,
Myra Amante and Fe S. Bernardo v.
National Labor Relations Commission,
Spic N Span Service Corporation and
Swift Foods, Inc.
BACKGROUND FACTS
Swift Foods, Inc. (Swift) is a subsidiary
of RFM Corporation that manufactures
and processes meat products and
other food products. SNSs business is
to supply manpower services to its
clients for a fee. Swift and SNS have a
contract to promote Swift products.
Inocencio Fernandez, Edelisa F. David,
Thelma Guardian, Juliet C. Dingal, Fe
S. Bernardo, Lolita Gomez, Myra
Amante, Miriam S. Catacutan, Gloria
O. Sumang, Gloria O. Paje, and
Estrella Zapata (complainants) worked
as Deli/Promo Girls of Swift products in
various supermarkets in Tarlac and
Pampanga. They were all dismissed
from their employment on February 28,
1998. They filed two complaints for
illegal dismissal against SNS and Swift
before the National Labor Relations
Commission (NLRC) Regional
Arbitration Branch III, San Fernando,
Pampanga, docketed as Case Nos. 03-
9131-98 and 07-9295-98. These cases
were subsequently consolidated.
After two unsuccessful conciliation
hearings, the Labor Arbiter ordered the
parties to submit their position papers.
Swift filed its position paper; SNS did
not.[4] The complainants position
papers were signed by Florencio P.
Peralta who was not a lawyer and who
claimed to be the complainants
representative, although he never
showed any proof of his authority to
represent them.
In their position papers, the
complainants alleged that they were
employees of Swift and SNS, and their
services were terminated without
cause and without due process. The
termination came on the day they
received their notices; thus, they were
denied the procedural due process
requirements of notice and hearing
prior to their termination of
employment.[5] Swift, in its position
paper, moved to dismiss the
complaints on the ground that it
entered into an independent labor
contract with SNS for the promotion of
its products; it alleged that the
complainants were the employees of
SNS, not of Swift.[6]
The Labor Arbiter[7] found SNS to be
the agent of Swift, and ordered SNS
and Swift to jointly and severally pay
Edelisa David P115,637.50 and
Inocencio Fernandez P192,197.50,
representing their retirement pay and
service incentive leave pay. He
dismissed, without prejudice, the
claims of the other complainants
because they failed to verify their
position paper. He also denied all other
claims for lack of factual basis.[8
Both Swift and the complainants
appealed to the NLRC. Swift filed a
memorandum of appeal, while the
complainants filed a partial
memorandum of appeal.[9]
The NLRC denied the complainants
appeal for lack of merit.[10] It
dismissed the complaint against Swift,
and ordered SNS to pay Edelisa David
a total of P256,620.13, and Inocencio
Fernandez a total of P280,912.63,
representing backwages, separation
pay, and service incentive leave pay. It
dismissed all other claims for lack of
merit. Thereafter, Edelisa David and
Inocencio Fernandez agreed to a
settlement, and their cases were thus
closed.[11]
The complainants whose claims were
dismissed, namely, Gloria Paje, Lolita
Gomez, Miriam Catacutan, Estrella
Zapata, Gloria Sumang, Juliet Dingal,
Myra Amante, and Fe S. Bernardo
(respondents), moved for the
reconsideration of the NLRCs ruling.
This time, they were represented by
the Public Attorneys Office. The NLRC
denied their motion.[12]
The respondents then sought relief
with the CA through a petition for
certiorari, based on the alleged grave
abuse of discretion committed by the
NLRC. The CA found the petition
meritorious, in its assailed decision of
October 25, 2004, and ruled that the
respondents failure to sign the
verification in their position paper was
a formal defect that was not fatal to
their case. It concluded that SNS was
merely an agent of Swift; thus, the
latter should not be exempt from
liability. It ordered the remand of the
case to the Labor Arbiter for the
computation of the respondents
backwages, separation pay, and
service incentive leave pay. SNS and
Swift filed their motions for
reconsideration which the CA denied.
SNS is now before us on a petition for
review on certiorari, and submits the
following
I. WHETHER OR NOT THE
HONORABLE COURT OF APPEALS
COMMITTED SERIOUS ERROR
WHEN IT RULED THAT THE NLRC
COMMITTED GRAVE ABUSE OF
DISCRETION IN DISMISSING THE
CLAIMS OF HEREIN RESPONDENTS
ON THE GROUND OF NON-SIGNING
OF THE POSITION PAPER.
II. WHETHER OR NOT THE
HONORABLE COURT OF APPEALS
COMMITTED SERIOUS ERROR IN
HOLDING THAT ALTHOUGH THE
RESPONDENTS WERE NOT
REPRESENTED BY A LAWYER BUT
BY ONE WHO IS NOT A MEMBER OF
THE BAR, SAID FACT IS
SUFFICIENT JUSTIFICATION FOR
THE PETITIONERS FAILURE TO
COMPLY WITH THE
REQUIREMENTS OF LAW.
III. WHETHER OR NOT THE
HONORABLE COURT OF APPEALS
COMMITTED SERIOUS ERROR IN
REMANDING THE CASE TO THE
LABOR ARBITER FOR THE
COMPUTATION OF THE MONEY
CLAIMS OF THE RESPONDENTS,
TO WIT: 1) BACKWAGES, 2)
SEPARATION PAY, AND 3) SERVICE
INCENTIVE LEAVE, DESPITE THE
FACT THAT NOWHERE IN THE
DECISIONS OF THE LABOR
ARBITER, THE NATIONAL LABOR
RELATIONS COMMISSION, AND
COURT OF APPEALS IS IT STATED
THAT HEREIN RESPONDENTS
WERE ILLEGALLY DISMISSED.[13]
THE COURTS RULING
We find the petition unmeritorious.
SNS submits that since respondents
did not sign the verification in their
position paper, the CA erred when it
ruled that the NLRC committed grave
abuse of discretion in dismissing the
respondents complaints. SNS stressed
the importance of a signature in a
pleading, and harped on the
respondents failure to sign their
position paper. [14] This, to SNS, is
fatal to the respondents case.
We do not agree with SNS.
As we previously explained in Torres v.
Specialized Packaging Development
Corporation,[15] where only two of the
25 real parties-in-interest signed the
verification, the verification by the two
could be sufficient assurance that the
allegations in the petition were made in
good faith, are true and correct, and
are not speculative. The lack of a
verification in a pleading is only a
formal defect, not a jurisdictional
defect, and is not necessarily fatal to a
case.[16] The primary reason for
requiring a verification is simply to
ensure that the allegations in the
pleading are done in good faith, are
true and correct, and are not mere
speculations.[17]
The CA, in its assailed decision, cited
Philippine Telegraph and Telephone
Corporation v. NLRC[18] to emphasize
that in labor cases, the deciding
authority should use every reasonable
means to speedily and objectively
ascertain the facts, without regard to
technicalities of law and procedure.
Technical rules of evidence are not
strictly binding in labor cases.[19]
In the hierarchy observed in the
dispensation of justice, rules of
procedure can be disregarded in order
to serve the ends of justice. This was
explained by Justice Bernando P.
Pardo, in Aguam v. Court of
Appeals,[20] when he said
Litigations must be decided on their
merits and not on technicality. Every
party litigant must be afforded the
amplest opportunity for the proper and
just determination of his cause, free
from the unacceptable plea of
technicalities. Thus, dismissal of
appeals purely on technical grounds is
frowned upon where the policy of the
court is to encourage hearings of
appeals on their merits and the rules of
procedure ought not to be applied in a
very rigid, technical sense; rules of
procedure are used only to help
secure, not override substantial justice.
It is a far better and more prudent
course of action for the court to excuse
a technical lapse and afford the parties
a review of the case on appeal to attain
the ends of justice rather than dispose
of the case on technicality and cause a
grave injustice to the parties, giving a
false impression of speedy disposal of
cases while actually resulting in more
delay, if not a miscarriage of
justice.[21]
We should remember, too, that certain
labor rights assume preferred positions
in our legal hierarchy. Under the
Constitution and the Labor Code, the
State is bound to protect labor and
assure the rights of workers to security
of tenure.[22] Article 4 of the Labor
Code provides that all doubts in the
implementation and interpretation of its
provisions (including its implementing
rules and regulations) shall be resolved
in favor of labor. The Constitution, on
the other hand, characterizes labor as
a primary social economic force. The
State is bound to protect the rights of
workers and promote their welfare,[23]
and the workers are entitled to security
of tenure, humane conditions of work,
and a living wage.[24] Under these
fundamental guidelines, respondents
right to security of tenure is a preferred
constitutional right that technical
infirmities in labor pleadings cannot
defeat.
1. SNS submits that the CA committed
a serious error in ruling that the
respondents representatives non-
membership in the bar is sufficient
justification for their failure to comply
with the requirements of the law. SNS
argues that this ruling excuses the
employment of a non-lawyer and
places the acts of the latter on the
same level as those of a member of
the Bar.[25] Our Labor Code allows a
non-lawyer to represent a party before
the Labor Arbiter and the
Commission,[26] but provides
limitations: Non-lawyers may appear
before the Commission or any Labor
Arbiter only: (1) If they represent
themselves; or (2) If they represent
their organization or members
thereof.[27] Thus, SNS concludes that
the respondents representative had no
personality to appear before the Labor
Arbiter or the NLRC, and his
representation for the respondents
should produce no legal effect.
Our approach to these arguments is
simple as the problem boils down to a
balance between a technical rule and
protected constitutional interests. The
cited technical infirmity cannot defeat
the respondents preferred right to
security of tenure which has primacy
over technical requirements. Thus, we
affirm the CAs ruling on this point,
without prejudice to whatever action
may be taken against the
representative, if he had indeed been
engaged in the unauthorized practice
of law.
2. SNS also claims serious error on the
part of the CA in remanding the case to
the Labor Arbiter, for computation of
the respondents backwages,
separation pay and service incentive
leave pay despite the fact that nowhere
in the decisions of the Labor Arbiter,
the NLRC, and CA was there any
finding that respondents had been
illegally dismissed.
We find this to be the first argument of
its kind from SNS, and, in fact, is the
first ever submission from SNS before
it filed a motion for reconsideration with
the CA. To recall, SNS did not file its
position paper before the labor arbiter,
nor did it file its appeal before the
NLRC; only Swift and the complainants
did.[28] It was only Swift, too, that filed
its comment to the herein respondents
petition for certiorari.[29]
The records do not show if SNS filed
its memorandum before the CA,
although SNS filed a motion for
reconsideration of the CA decision. It
then claimed that the CA erred in ruling
that the NLRC committed grave abuse
of discretion when it dismissed
respondents claim; that a petition for
certiorari under Rule 65 of the Rules of
Court is not the proper remedy to
correct the NLRCs alleged grave
abuse of discretion; and that the
respondents were bound by the
mistakes of their non-lawyer
representative.[30] Significantly, SNS
did not raise the question of the CAs
failure to state that the respondents
had been illegally dismissed. At this
point, it is too late for SNS to raise the
issue.
Nothing on record indicates the reason
for the respondents termination from
employment, although the fact of
termination was never disputed. Swift
denied liability on the basis of its
contract with SNS. The contract was
not presented before the Labor Arbiter,
although Swift averred that under the
contract, SNS would supply promo
girls, merchandisers and other
promotional personnel to handle all
promotional aspects and
merchandising strategy of Swift.[31]
We can assume, for lack of proof to the
contrary, that the respondents
termination from employment was
illegal since neither SNS nor Swift, as
employers, presented any proof that
their termination from employment was
legal. Upon proof of termination of
employment, the employer has the
burden of proof that the dismissal was
valid; absent this proof, the termination
from employment is deemed illegal, as
alleged by the dismissed employees.
3. In order that a labor relationship can
be categorized as
legitimate/permissible job contracting
or as prohibited labor-only contracting,
the totality of the facts and the
surrounding circumstances of the
relationship ought to be
considered.[32] Every case is unique
and has to be assessed on the basis of
its facts and of the features of the
relationship in question. In permissible
job contracting, the principal agrees to
put out or farm out with a contractor or
subcontractor the performance or
completion of a specific job, work or
service within a definite or
predetermined period, regardless of
whether such job, work or service is to
be performed or completed within or
outside the premises of the principal.
The test is whether the independent
contractor has contracted to do the
work according to his own methods
and without being subject to the
principals control except only as to the
results, he has substantial capital, and
he has assured the contractual
employees entitlement to all labor and
occupational safety and health
standards, free exercise of the right to
self-organization, security of tenure,
and social and welfare benefits.[33]
The CA found SNS to be Swifts agent,
and explained its ruling as follows[34]
To be legitimate, contracting or
subcontracting must satisfy the
following requirements: 1) The
contractor or subcontractor carries on a
distinct and independent business and
undertakes to perform the job, work or
service on its own account and under
its own responsibility, according to its
own manners and methods, and free
from the control and direction of the
principal in all matters connected with
the performance of the work except as
to the results thereof; 2) the contractor
or subcontractor has substantial capital
or investment; and 3) the agreement
between the principal and contractor or
subcontractor assures the contractual
employees entitlement to all labor and
occupational safety and health
standards, free exercise of right to self-
organization, security of tenure, and
social and welfare benefit (Vinoya v.
NLRC, 324 SCRA 469).
The parties failed to attach a copy of
the agreement entered into between
SNS and Swift. Neither did they attach
a copy of the financial statement of
SNS. Thus, we are constrained to rule
on the issue involved on the basis of
the findings of both the Labor Arbiter
and the NLRC.
The Labor Arbiter, in finding that SNS
was merely a labor-only contractor,
cited the following reasons: First, the
agreement between SNS and Swift
shows that the latter exercised control
over the promo girls and/or
merchandisers through the services of
coordinators. Second, it cannot be said
that SNS has substantial capital. Third,
the duties of the petitioners were
directly related, necessary and vital to
the day-to-day operations of Swift.
Lastly, the uniform and identification
cards used by the petitioners were
subject to the approval of Swift.
The NLRC, on the other hand, in
finding that SNS is an independent
contractor gave the following reasons:
First, there is no evidence that Swift
exercised the power of control over the
petitioners. Rather, it is SNS who
exercised direct control and
supervision over the nature and
performance of the works of herein
petitioners. Second, by law, Swift and
SNS have distinct and separate
juridical personality from each other.
The decision of the NLRC is bereft of
explanation as to the existence of
circumstances that would make SNS
an independent contractor as would
exempt the principal from liabilities to
the employees.
Nowhere in the decision of both the
Labor Arbiter and the NLRC shows that
SNS had full control of the means and
methods of the performance of their
work. Moreover, as found by the Labor
Arbiter, there was no evidence that
SNS has substantial capital or
investment. Lastly, there was no
finding by the Labor Arbiter nor the
NLRC that the agreement between the
principal (Swift) and contractor (SNS)
assures the contractual employees
entitlement to all labor and
occupational safety and health
standards, free exercise of right to self-
organization, security of tenure, and
social and welfare benefit.
In view of the foregoing, we conclude
that the requisites above-mentioned
are not obtaining in the present case.
Hence, SNS is considered merely an
agent of Swift which does not exempt
the latter from liability.
We note that the present decision does
not affect the settlement entered into
between Edeliza David and Inocencio
Fernandez, on the one hand and SNS,
on the other. As held by the NLRC,
their complaints are considered closed
and terminated.
WHEREFORE, premises considered,
the instant petition is hereby
GRANTED. The Resolutions of the
NLRC dated January 11, 2002 and
December 23, 2003 are SET ASIDE in
so far as the dismissal of the
petitioners case is concerned and in so
far as Swift is found not liable for the
payment of the petitioners money
claims.
The present case is hereby
REMANDED to the Labor Arbiter for
the computation of the money claims of
the petitioners, to wit: 1) Backwages; 2)
Separation Pay; and 3) Service
Incentive Leave Pay.
The settlement of the claims of David
and Fernandez is not affected by this
decision.
We fully agree with this ruling. What we
have before us, therefore, is a case of
illegal dismissal perpetrated by a
principal and its illegal contractor-
agent. Thus, we affirm the ruling of the
CA with the modification that the
respondents are also entitled to
nominal damages, for violation of their
due process rights to notice and
hearing, pursuant to our ruling in
Agabon v. NLRC.[35] We peg this
amount at P30,000.00 for each of the
respondents.
WHEREFORE, premises considered,
we hereby AFFIRM the Court of
Appeals October 25, 2004 Decision
and August 2, 2006 Resolution in CA-
G.R. SP No. 83215, with the
modification that nominal damages in
the amount of P30,000.00 should
additionally be paid to each of the
respondents, for violation of their
procedural due process rights. Costs
against the petitioner.
SO ORDERED.
THIRD DIVISION
G.R. No. 76959 October 12,
1987
ABBOTT LABORATORIES
(PHILIPPINES), INC., and JAIME C.
VICTA petitioners,
vs.
NATIONAL LABOR RELATIONS
COMMISISON and ALBERT
BOBADILLA respondents.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari
of the decision of respondent National
Labor Relations Commission (NLRC)
which set aside the Labor Arbiter's
decision dismissing the complaint and
instead entered a new decision
ordering the complainant's
reinstatement with full backwages from
the date of his termination until his
actual reinstatement.
The antecedent facts as found by the
labor Arbiter and reiterated in the
NLRC decision are undisputed:
Complainant Bobadilla started his
employment with respondent company
sometime in May 1982. After
undergoing training, in September,
1982, competent was designated
professional medical representative
(PMR) and was assigned to cover the
sales territory comprising of Sta. Cruz,
Binondo and a part of Quiapo and
Divisoria, of the Metro Manila district.
In connection with the respondent
company's marketing and sales
operations, it has been its policy and
established practice of undertaking
employment movements and/or
reassignments from one territorial area
to another as the exigencies of its
operations require and to hire only
applicant salesmen, including
professional medical representatives
(PMRs) who are willing to take
provincial assignments, at least insofar
as male applicants were concerned.
Likewise, respondent company had
made reassignments or transfers of
sales personnel which included PMRs
from one territorial area of
responsibility to another on a more or
less regular basis.
In complainant's application for
employment with respondent company,
he agreed to the following: 1) that if
employed he win accept assignment in
the provinces and/or cities anywhere in
the Philippines; 2) he is willing and can
move into and live in the territory
assigned to him; and (3) that should
any answer or statement in his
application for employment be found
false or incorrect, he will be subject to
immediate dismissal, if then employed.
On 22 July 1983, respondent Victa
called competent to his office and
informed the latter that he was being
transferred effective 1 August 1983 to
the newly opened Cagayan territory
comprising the provinces of Cagayan,
Nueva Vizcaya and Isabela. The
transfer order was made formal in a
memorandum dated 29 July 1983.
Among the reasons given for
complainant's selection as PMR for the
Cagayan territory were: The territory
required a veteran and seasoned PMR
who can operate immediately with
minimum training and supervision.
Likewise, a PMR who can immediately
exploit the vast business potential of
the area.
In a letter dated 1 August 1983, which
was received by Abbott on 4 August
1983, competent, thru his lawyer,
objected to the transfer on the grounds
that it was not only a demotion but also
personal and punitive in nature without
basis legally and factually.
On 8 August 1983, Victa issued
another inter-office correspondence to
competent, giving the latter up to 15
August 1983 within which to comply
with the transfer order, otherwise his
would be dropped from the payroll for
having abandoned his job. When
competent failed to report to his new
assignment, Abbott assigned thereat
Fausto Antonio T. Tibi another PED
PMR who was priorly covering the
provinces of Nueva Ecija and Tarlac.
Meanwhile, complainant filed
applications for vacation leave from 2
to 9 August 1983, and then from 10 to
13 August 1983. And on 18 August
1983, he filed the present complaint.
After due consideration of the evidence
adduced by the parties, the Arbiter
below ruled for the respondent on the
ground that the complainant is guilty of
gross insubordination. (pp. 17-19,
Rollo; pp. 1-3, NLRC decision)
On appeal, the respondent National
Labor Relations Commission reversed
the Arbiter's decision and held that
herein petitioners had no valid and
justifiable reason to dismiss the
complainant. The National Labor
Relations Commission ordered the
latter's reinstatement with backwages.
A motion for reconsideration
subsequently filed by the petitioners
was denied.
On September 8, 1986, the petitioners
filed their second motion for
reconsideration which was not
favorably acted upon by respondent
National Labor Relations Commission
as the record of the case had already
been transmitted to the labor arbiter for
the execution of its decision.
On December 16, 1986, the petitioners
and the private respondent agreed
before the labor arbiter that the former
would bring the case before this Court.
Hence, this present petition.
Petitioners assigned as errors the
following:
... [R]espondent NLRC acted in excess
of jurisdiction and/or grave abuse of
discretion in that —
a] Respondent NLRC
disregarded settled law and altered the
parties' contract when it stated that
private respondent's prior consent was
necessary for the validity of his
transfer, rendering his consequent
dismissal for insubordination illegal.
b] Granting arguendo that
prior consent of an employee is
required for the validity of his transfer
to another territory, private respondent
had explicitly given such prior consent
as a condition for his hiring and
continued employment by petitioner
Abbott,
c] Respondent NLRC abused
its discretion when it declared private
respondent's dismissal illegal despite
his clear and willfull insubordination.
(pp. 7, 10 and 11, Rollo).
When asked to comment on the
petition as counsel for NLRC, the
Solicitor General, assisted by Assistant
Solicitor General Zoilo A. Andin and
Trial Attorney Alexander Q.
Gesmundo, agreed with the petitioners'
stand that the dismissal of the private
respondent from his employment was
for valid reasons.
The main issue in this case is whether
or not Albert Bobadilla could be validly
dismissed from his employment on the
ground of insubordination for refusing
to accept his new assignment.
We are constrained to answer in the
affirmative.
The hiring, firing, transfer, demotion,
and promotion of employees has been
traditionally Identified as a
management prerogative subject to
limitations found in law, a collective
bargaining agreement, or general
principles of fair play and justice. This
is a function associated with the
employer's inherent right to control and
manage effectively its enterprise. Even
as the law is solicitous of the welfare of
employees, it must also protect the
right of an employer to exercise what
are clearly management prerogatives.
The free who of management to
conduct its own business affairs to
achieve its purpose cannot be denied.
(See Dangan vs. National Labor
Relations Commission, 127 SCRA
706).
As a general rule, the right to transfer
or reassign an employee is recognized
as an employer's exclusive right and
the prerogative of management.

We agree with the Labor Arbiter's
conclusions that:
Settled is the rule in this regard that an
employer, except when cited by special
laws, has the right to regulate,
according to his own discretion and
judgment, all aspects of employment,
which includes, among others, hiring,
work assignments, place and manner
of work, working regulations and
transfer of employees in accordance
with his operational demands and
requirements. This right flows from
ownership and from the established
rule that labor law does not authorize
the substitution of judgment of the
employer in the conduct of his
business, unless it is shown to be
contrary to law, morals or public policy
(NLU vs. Insular-Yebana Tobacco
Corp., 2 SCRA 924, 931; and Republic
Savings Bank vs. Court of Industrial
Relations, 21 SCRA 226, 235).
... Abbott, in accordance with the
demands and requirements of its
marketing and sales operations,
adopted a policy to hire only sales
applicants who are willing to accept
assignments in the provinces
anywhere in the Philippines, and to
move into and live in the territory
assigned to them.
The existence and implementation of
this policy are clearly discernible from
the questions appearing in the
application form under the heading:"TO
BE FILLED BY SALES APPLICANTS
ONLY," and the fact that Abbott,
depending upon the needs of its
marketing and sales operations,
periodically made transfers or
reassignment of its sales people.
Complainant was precisely hired
because he manifested at the outset as
a job applicant his willingness to follow
the conditions of his employment. In
line with the policy, as practiced,
Abbott, thru Jaime Victa, issued an
inter-office correspondence transferring
complainant to a newly opened sales
territory-the Cagayan Region,
comprising the provinces of Cagayan,
Nueva Vizcaya and Isabela. According
to respondents, complainant was
selected as PMR for the region
primarily because he was a veteran
and seasoned PMR who can operate
immediately with minimum training and
supervision.
That complainant is a veteran and
seasoned PMR is admitted. In fact, it is
even conceded by respondents that
complainant was the leader of his
peers in PED as indicated in the letter
dated 20 December 1982 of Jaime
Victa to complainant. That the
Cagayan Region is relatively
inaccessible cannot be debated. That
the territory needed a responsible PMR
who could work under the least
supervision is a judgment of
respondents. And that this judgment
was arrived at upon consultations
among the PED Marketing Manager
Jaime Victa, the Director for
Administration Francisco Lim, and the
General Manager A. C. Bout has been
proven by respondents.
It appearing, therefore, that the order to
transfer complainant is based upon a
judgment of his employer Abbott, which
judgment to transfer is in the with a
company practice which is not contrary
to law, morals or public policy, hence,
beyond the competence of this office to
question, the refusal of complainant to
obey the lawful order of Abbott is gross
insubordination — a valid cause for
dismissal.
Complainant asserted that the true
reason for his transfer was the
personal ill motives on the part of
respondent Victa who resented the
derogatory remarks attributed to him,
as purportedly shown in Victa's
memoranda dated 20 December 1982
and 26 April 1983. However, a cursory
reading of said memoranda in question
who show that the same were
legitimately issued by Victa in the
exercise of his functions as PED
Manager. And the fact that complainant
never lifted a finger to formally question
said memoranda is a mute admission
on his part that the allegations therein
are true.
Complainant also alleged that his
transfer was a demotion. However, no
explanation was given much less any
evidence presented in support of the
allegation. On the other hand, it is clear
that there was no change in
complainant's position and salary,
privileges and benefits he was
receiving while in Manila. With respect
to the sales commission, Abbott
claimed that had complainant accepted
the assignment, he could have earned
more because the sales prospects in
the Cagayan Territory, which
comprises Nueva Vizcaya, Isabela and
Cagayan Province were much higher
than the territory assigned to him in
Manila. Besides, the assignment
offered an important avenue for future
promotion, respondent concluded. (pp.
6-9, Labor Arbiter's decision).
Therefore, Bobadilla had no valid
reason to disobey the order of transfer.
He had tacitly given his consent thereto
when he acceded to the petitioners'
policy of hiring sales staff who are
willing to be assigned anywhere in the
Philippines which is demanded by the
petitioners' business.
By the very nature of his employment,
a drug salesman or medical
representative is expected to travel. He
should anticipate reassignment
according to the demands of their
business. It would be a poor drug
corporation which cannot even assign
its representatives or detail men to new
markets calling for opening or
expansion or to areas where the need
for pushing its products is great. More
so if such reassignments are part of
the employment contract.
WHEREFORE, the petition is hereby
GRANTED. The questioned decision of
the National Labor Relations
Commission is SET ASIDE. The
decision of the labor Arbiter dated April
16,1985 is REINSTATED.
SO ORDERED.
EN BANC
G.R. No. 130866 September
16, 1998
ST. MARTIN FUNERAL HOME,
petitioner,
vs.
NATIONAL LABOR RELATIONS
COMMISSION and BIENVENIDO
ARICAYOS, respondents.
REGALADO, J.:
The present petition for certiorari
stemmed from a complaint for illegal
dismissal filed by herein private
respondent before the National Labor
Relations Commission (NLRC),
Regional Arbitration Branch No. III, in
San Fernando, Pampanga. Private
respondent alleges that he started
working as Operations Manager of
petitioner St. Martin Funeral Home on
February 6, 1995. However, there was
no contract of employment executed
between him and petitioner nor was his
name included in the semi-monthly
payroll. On January 22, 1996, he was
dismissed from his employment for
allegedly misappropriating P38,000.00
which was intended for payment by
petitioner of its value added tax (VAT)
to the Bureau of Internal Revenue
(BIR). 1
Petitioner on the other hand claims that
private respondent was not its
employee but only the uncle of Amelita
Malabed, the owner of petitioner St.
Martin's Funeral Home. Sometime in
1995, private respondent, who was
formerly working as an overseas
contract worker, asked for financial
assistance from the mother of Amelita.
Since then, as an indication of
gratitude, private respondent
voluntarily helped the mother of
Amelita in overseeing the business.
In January 1996, the mother of Amelita
passed away, so the latter then took
over the management of the business.
She then discovered that there were
arrears in the payment of taxes and
other government fees, although the
records purported to show that the
same were already paid. Amelita then
made some changes in the business
operation and private respondent and
his wife were no longer allowed to
participate in the management thereof.
As a consequence, the latter filed a
complaint charging that petitioner had
illegally terminated his employment.2
Based on the position papers of the
parties, the labor arbiter rendered a
decision in favor of petitioner on
October 25, 1996 declaring that no
employer-employee relationship
existed between the parties and,
therefore, his office had no jurisdiction
over the case. 3
Not satisfied with the said decision,
private respondent appealed to the
NLRC contending that the labor arbiter
erred (1) in not giving credence to the
evidence submitted by him; (2) in
holding that he worked as a "volunteer"
and not as an employee of St. Martin
Funeral Home from February 6, 1995
to January 23, 1996, or a period of
about one year; and (3) in ruling that
there was no employer-employee
relationship between him and
petitioner.4
On June 13, 1997, the NLRC rendered
a resolution setting aside the
questioned decision and remanding the
case to the labor arbiter for immediate
appropriate proceedings.5 Petitioner
then filed a motion for reconsideration
which was denied by the NLRC in its
resolution dated August 18, 1997 for
lack of merit,6 hence the present
petition alleging that the NLRC
committed grave abuse of discretion.7
Before proceeding further into the
merits of the case at bar, the Court
feels that it is now exigent and
opportune to reexamine the functional
validity and systemic practicability of
the mode of judicial review it has long
adopted and still follows with respect to
decisions of the NLRC. The increasing
number of labor disputes that find their
way to this Court and the legislative
changes introduced over the years into
the provisions of Presidential Decree
(P.D.) No. 442 (The Labor Code of the
Philippines and Batas Pambansa Blg.
(B.P. No.) 129 (The Judiciary
Reorganization Act of 1980) now
stridently call for and warrant a
reassessment of that procedural
aspect.
We prefatorily delve into the legal
history of the NLRC. It was first
established in the Department of Labor
by P.D. No. 21 on October 14, 1972,
and its decisions were expressly
declared to be appealable to the
Secretary of Labor and, ultimately, to
the President of the Philippines.
On May 1, 1974, P.D. No. 442 enacted
the Labor Code of the Philippines, the
same to take effect six months after its
promulgation. 8 Created and regulated
therein is the present NLRC which was
attached to the Department of Labor
and Employment for program and
policy coordination only.9 Initially,
Article 302 (now, Article 223) thereof
also granted an aggrieved party the
remedy of appeal from the decision of
the NLRC to the Secretary of Labor,
but P.D. No. 1391 subsequently
amended said provision and abolished
such appeals. No appellate review has
since then been provided for.
Thus, to repeat, under the present
state of the law, there is no provision
for appeals from the decision of the
NLRC. 10 The present Section 223, as
last amended by Section 12 of R.A.
No. 6715, instead merely provides that
the Commission shall decide all cases
within twenty days from receipt of the
answer of the appellee, and that such
decision shall be final and executory
after ten calendar days from receipt
thereof by the parties.
When the issue was raised in an early
case on the argument that this Court
has no jurisdiction to review the
decisions of the NLRC, and formerly of
the Secretary of Labor, since there is
no legal provision for appellate review
thereof, the Court nevertheless
rejected that thesis. It held that there is
an underlying power of the courts to
scrutinize the acts of such agencies on
questions of law and jurisdiction even
though no right of review is given by
statute; that the purpose of judicial
review is to keep the administrative
agency within its jurisdiction and
protect the substantial rights of the
parties; and that it is that part of the
checks and balances which restricts
the separation of powers and forestalls
arbitrary and unjust adjudications. 11
Pursuant to such ruling, and as
sanctioned by subsequent decisions of
this Court, the remedy of the aggrieved
party is to timely file a motion for
reconsideration as a precondition for
any further or subsequent remedy, 12
and then seasonably avail of the
special civil action of certiorari under
Rule 65, 13 for which said Rule has
now fixed the reglementary period of
sixty days from notice of the decision.
Curiously, although the 10-day period
for finality of the decision of the NLRC
may already have lapsed as
contemplated in Section 223 of the
Labor Code, it has been held that this
Court may still take cognizance of the
petition for certiorari on jurisdictional
and due process considerations if filed
within the reglementary period under
Rule 65. 14
Turning now to the matter of judicial
review of NLRC decisions, B.P. No.
129 originally provided as follows:
Sec. 9. Jurisdiction. — The
Intermediate Appellate Court shall
exercise:
(1) Original jurisdiction to
issue writs of mandamus, prohibition,
certiorari, habeas corpus, and quo
warranto, and auxiliary writs or
processes, whether or not in aid of its
appellate jurisdiction;
(2) Exclusive original
jurisdiction over actions for annulment
of judgments of Regional Trial Courts;
and
(3) Exclusive appellate
jurisdiction over all final judgments,
decisions, resolutions, orders, or
awards of Regional Trial Courts and
quasi-judicial agencies,
instrumentalities, boards, or
commissions, except those falling
within the appellate jurisdiction of the
Supreme Court in accordance with the
Constitution, the provisions of this Act,
and of subparagraph (1) of the third
paragraph and subparagraph (4) of the
fourth paragraph of Section 17 of the
Judiciary Act of 1948.
The Intermediate Appellate Court shall
have the power to try cases and
conduct hearings, receive evidence
and perform any and all acts necessary
to resolve factual issues raised in
cases falling within its original and
appellate jurisdiction, including the
power to grant and conduct new trials
or further proceedings.
These provisions shall not apply to
decisions and interlocutory orders
issued under the Labor Code of the
Philippines and by the Central Board of
Assessment Appeals. 15
Subsequently, and as it presently
reads, this provision was amended by
R.A. No. 7902 effective March 18,
1995, to wit:
Sec. 9. Jurisdiction. — The Court
of Appeals shall exercise:
(1) Original jurisdiction to
issue writs of mandamus, prohibition,
certiorari, habeas corpus, and quo
warranto, and auxiliary writs or
processes, whether or not in aid of its
appellate jurisdiction;
(2) Exclusive original
jurisdiction over actions for annulment
of judgments of Regional Trial Courts;
and
(3) Exclusive appellate
jurisdiction over all final judgments,
decisions, resolutions, orders or
awards of Regional Trial Courts and
quasi-judicial agencies,
instrumentalities, boards or
commissions, including the Securities
and Exchange Commission, the Social
Security Commission, the Employees
Compensation Commission and the
Civil Service Commission, except
those falling within the appellate
jurisdiction of the Supreme Court in
accordance with the Constitution, the
Labor Code of the Philippines under
Presidential Decree No. 442, as
amended, the provisions of this Act,
and of subparagraph (1) of the third
paragraph and subparagraph (4) of the
fourth paragraph of Section 17 of the
Judiciary Act of 1948.
The Court of Appeals shall have the
power to try cases and conduct
hearings, receive evidence and
perform any and all acts necessary to
resolve factual issues raised in cases
falling within its original and appellate
jurisdiction, including the power to
grant and conduct new trials or further
proceedings. Trials or hearings in the
Court of Appeals must be continuous
and must be completed within, three
(3) months, unless extended by the
Chief Justice.
It will readily be observed that, aside
from the change in the name of the
lower appellate court, 16 the following
amendments of the original provisions
of Section 9 of B.P. No. 129 were
effected by R.A. No. 7902, viz.:
1. The last paragraph which
excluded its application to the Labor
Code of the Philippines and the Central
Board of Assessment Appeals was
deleted and replaced by a new
paragraph granting the Court of
Appeals limited powers to conduct
trials and hearings in cases within its
jurisdiction.
2. The reference to the Labor
Code in that last paragraph was
transposed to paragraph (3) of the
section, such that the original
exclusionary clause therein now
provides "except those falling within the
appellate jurisdiction of the Supreme
Court in accordance with the
Constitution, the Labor Code of the
Philippines under Presidential Decree
No. 442, as amended, the provisions of
this Act, and of subparagraph (1) of the
third paragraph and subparagraph (4)
of the fourth paragraph of Section 17 of
the Judiciary Act of 1948." (Emphasis
supplied).
3. Contrarily, however,
specifically added to and included
among the quasi-judicial agencies over
which the Court of Appeals shall have
exclusive appellate jurisdiction are the
Securities and Exchange Commission,
the Social Security Commission, the
Employees Compensation Commission
and the Civil Service Commission.
This, then, brings us to a somewhat
perplexing impassè, both in point of
purpose and terminology. As earlier
explained, our mode of judicial review
over decisions of the NLRC has for
some time now been understood to be
by a petition for certiorari under Rule
65 of the Rules of Court. This is, of
course, a special original action limited
to the resolution of jurisdictional issues,
that is, lack or excess of jurisdiction
and, in almost all cases that have been
brought to us, grave abuse of
discretion amounting to lack of
jurisdiction.
It will, however, be noted that
paragraph (3), Section 9 of B.P. No.
129 now grants exclusive appellate
jurisdiction to the Court of Appeals over
all final adjudications of the Regional
Trial Courts and the quasi-judicial
agencies generally or specifically
referred to therein except, among
others, "those falling within the
appellate jurisdiction of the Supreme
Court in accordance with . . . the Labor
Code of the Philippines under
Presidential Decree No. 442, as
amended, . . . ." This would necessarily
contradict what has been ruled and
said all along that appeal does not lie
from decisions of the NLRC. 17 Yet,
under such excepting clause literally
construed, the appeal from the NLRC
cannot be brought to the Court of
Appeals, but to this Court by necessary
implication.
The same exceptive clause further
confuses the situation by declaring that
the Court of Appeals has no appellate
jurisdiction over decisions falling within
the appellate jurisdiction of the
Supreme Court in accordance with the
Constitution, the provisions of B.P. No.
129, and those specified cases in
Section 17 of the Judiciary Act of 1948.
These cases can, of course, be
properly excluded from the exclusive
appellate jurisdiction of the Court of
Appeals. However, because of the
aforementioned amendment by
transposition, also supposedly
excluded are cases falling within the
appellate jurisdiction of the Supreme
Court in accordance with the Labor
Code. This is illogical and
impracticable, and Congress could not
have intended that procedural gaffe,
since there are no cases in the Labor
Code the decisions, resolutions, orders
or awards wherein are within the
appellate jurisdiction of the Supreme
Court or of any other court for that
matter.
A review of the legislative records on
the antecedents of R.A. No. 7902
persuades us that there may have
been an oversight in the course of the
deliberations on the said Act or an
imprecision in the terminology used
therein. In fine, Congress did intend to
provide for judicial review of the
adjudications of the NLRC in labor
cases by the Supreme Court, but there
was an inaccuracy in the term used for
the intended mode of review. This
conclusion which we have reluctantly
but prudently arrived at has been
drawn from the considerations extant in
the records of Congress, more
particularly on Senate Bill No. 1495
and the Reference Committee Report
on S. No. 1495/H. No. 10452. 18
In sponsoring Senate Bill No. 1495,
Senator Raul S. Roco delivered his
sponsorship speech 19 from which we
reproduce the following excerpts:
The Judiciary Reorganization Act, Mr.
President, Batas Pambansa Blg. 129,
reorganized the Court of Appeals and
at the same time expanded its
jurisdiction and powers. Among others,
its appellate jurisdiction was expanded
to cover not only final judgment of
Regional Trial Courts, but also all final
judgment(s), decisions, resolutions,
orders or awards of quasi-judicial
agencies, instrumentalities, boards and
commissions, except those falling
within the appellate jurisdiction of the
Supreme Court in accordance with the
Constitution, the provisions of BP Blg.
129 and of subparagraph 1 of the third
paragraph and subparagraph 4 of
Section 17 of the Judiciary Act of 1948.
Mr. President, the purpose of the law is
to ease the workload of the Supreme
Court by the transfer of some of its
burden of review of factual issues to
the Court of Appeals. However,
whatever benefits that can be derived
from the expansion of the appellate
jurisdiction of the Court of Appeals was
cut short by the last paragraph of
Section 9 of Batas Pambansa Blg. 129
which excludes from its coverage the
"decisions and interlocutory orders
issued under the Labor Code of the
Philippines and by the Central Board of
Assessment Appeals.
Among the highest number of cases
that are brought up to the Supreme
Court are labor cases. Hence, Senate
Bill No. 1495 seeks to eliminate the
exceptions enumerated in Section 9
and, additionally, extends the coverage
of appellate review of the Court of
Appeals in the decision(s) of the
Securities and Exchange Commission,
the Social Security Commission, and
the Employees Compensation
Commission to reduce the number of
cases elevated to the Supreme Court.
(Emphases and corrections ours)
xxx xxx xxx
Senate Bill No. 1495 authored by our
distinguished Colleague from Laguna
provides the ideal situation of
drastically reducing the workload of the
Supreme Court without depriving the
litigants of the privilege of review by an
appellate tribunal.
In closing, allow me to quote the
observations of former Chief Justice
Teehankee in 1986 in the Annual
Report of the Supreme Court:
. . . Amendatory legislation is
suggested so as to relieve the
Supreme Court of the burden of
reviewing these cases which present
no important issues involved beyond
the particular fact and the parties
involved, so that the Supreme Court
may wholly devote its time to cases of
public interest in the discharge of its
mandated task as the guardian of the
Constitution and the guarantor of the
people's basic rights and additional
task expressly vested on it now "to
determine whether or not there has
been a grave abuse of discretion
amounting to lack of jurisdiction on the
part of any branch or instrumentality of
the Government.
We used to have 500,000 cases
pending all over the land, Mr.
President. It has been cut down to
300,000 cases some five years ago. I
understand we are now back to
400,000 cases. Unless we distribute
the work of the appellate courts, we
shall continue to mount and add to the
number of cases pending.
In view of the foregoing, Mr. President,
and by virtue of all the reasons we
have submitted, the Committee on
Justice and Human Rights requests the
support and collegial approval of our
Chamber.
xxx xxx xxx
Surprisingly, however, in a subsequent
session, the following Committee
Amendment was introduced by the
said sponsor and the following
proceedings transpired: 20
Senator Roco. On page 2, line 5, after
the line "Supreme Court in accordance
with the Constitution," add the phrase
"THE LABOR CODE OF THE
PHILIPPINES UNDER P.D. 442, AS
AMENDED." So that it becomes clear,
Mr. President, that issues arising from
the Labor Code will still be appealable
to the Supreme Court.
The President. Is there any objection?
(Silence) Hearing none, the
amendment is approved.
Senator Roco. On the same page, we
move that lines 25 to 30 be deleted.
This was also discussed with our
Colleagues in the House of
Representatives and as we understand
it, as approved in the House, this was
also deleted, Mr. President.
The President. Is there any objection?
(Silence) Hearing none, the
amendment is approved.
Senator Roco. There are no further
Committee amendments, Mr.
President.
Senator Romulo. Mr. President, I move
that we close the period of Committee
amendments.
The President. Is there any objection?
(Silence) Hearing none, the
amendment is approved. (Emphasis
supplied).
xxx xxx xxx
Thereafter, since there were no
individual amendments, Senate Bill No.
1495 was passed on second reading
and being a certified bill, its unanimous
approval on third reading followed. 21
The Conference Committee Report on
Senate Bill No. 1495 and House Bill
No. 10452, having theretofore been
approved by the House of
Representatives, the same was
likewise approved by the Senate on
February 20, 1995, 22 inclusive of the
dubious formulation on appeals to the
Supreme Court earlier discussed.
The Court is, therefore, of the
considered opinion that ever since
appeals from the NLRC to the
Supreme Court were eliminated, the
legislative intendment was that the
special civil action of certiorari was and
still is the proper vehicle for judicial
review of decisions of the NLRC. The
use of the word "appeal" in relation
thereto and in the instances we have
noted could have been a lapsus
plumae because appeals by certiorari
and the original action for certiorari are
both modes of judicial review
addressed to the appellate courts. The
important distinction between them,
however, and with which the Court is
particularly concerned here is that the
special civil action of certiorari is within
the concurrent original jurisdiction of
this Court and the Court of Appeals; 23
whereas to indulge in the assumption
that appeals by certiorari to the
Supreme Court are allowed would not
subserve, but would subvert, the
intention of Congress as expressed in
the sponsorship speech on Senate Bill disregard the hierarchy of courts in our
No. 1495. judicial system by seeking relief directly
from this Court despite the fact that the
Incidentally, it was noted by the same is available in the lower courts in
sponsor therein that some quarters the exercise of their original or
were of the opinion that recourse from concurrent jurisdiction, or is even
the NLRC to the Court of Appeals as mandated by law to be sought therein.
an initial step in the process of judicial This practice must be stopped, not only
review would be circuitous and would because of the imposition upon the
prolong the proceedings. On the precious time of this Court but also
contrary, as he commendably and because of the inevitable and resultant
realistically emphasized, that delay, intended or otherwise, in the
procedure would be advantageous to adjudication of the case which often
the aggrieved party on this reasoning: has to be remanded or referred to the
lower court as the proper forum under
On the other hand, Mr. President, to the rules of procedure, or as better
allow these cases to be appealed to equipped to resolve the issues since
the Court of Appeals would give this Court is not a trier of facts. We,
litigants the advantage to have all the therefore, reiterate the judicial policy
evidence on record be reexamined and that this Court will not entertain direct
reweighed after which the findings of resort to it unless the redress desired
facts and conclusions of said bodies cannot be obtained in the appropriate
are correspondingly affirmed, modified courts or where exceptional and
or reversed. compelling circumstances justify
availment of a remedy within and
Under such guarantee, the Supreme calling for the exercise of our primary
Court can then apply strictly the axiom jurisdiction.
that factual findings of the Court of
Appeals are final and may not be WHEREFORE, under the foregoing
reversed on appeal to the Supreme premises, the instant petition for
Court. A perusal of the records will certiorari is hereby REMANDED, and
reveal appeals which are factual in all pertinent records thereof ordered to
nature and may, therefore, be be FORWARDED, to the Court of
dismissed outright by minute Appeals for appropriate action and
resolutions. 24 disposition consistent with the views
and ruling herein set forth, without
While we do not wish to intrude into the pronouncement as to costs.
Congressional sphere on the matter of
the wisdom of a law, on this score we SO ORDERED.
add the further observations that there
is a growing number of labor cases Narvasa, C.J., Davide, Jr., Romero,
being elevated to this Court which, not Bellosillo, Melo, Puno, Vitug, Kapunan,
being a trier of fact, has at times been Mendoza, Panganiban Martinez,
constrained to remand the case to the Quisumbing and Purisima, JJ., concur.
NLRC for resolution of unclear or
ambiguous factual findings; that the
Court of Appeals is procedurally
equipped for that purpose, aside from
the increased number of its component
divisions; and that there is undeniably
an imperative need for expeditious
action on labor cases as a major
aspect of constitutional protection to
labor.
Therefore, all references in the
amended Section 9 of B.P. No. 129 to
supposed appeals from the NLRC to
the Supreme Court are interpreted and
hereby declared to mean and refer to
petitions for certiorari under Rule 65.
Consequently, all such petitions should
hence forth be initially filed in the Court
of Appeals in strict observance of the
doctrine on the hierarchy of courts as
the appropriate forum for the relief
desired.
Apropos to this directive that resort to
the higher courts should be made in
accordance with their hierarchical
order, this pronouncement in Santiago
vs. Vasquez, et al. 25 should be taken
into account:
One final observation. We discern in
the proceedings in this case a
propensity on the part of petitioner,
and, for that matter, the same may be
said of a number of litigants who
initiate recourses before us, to