Assignment for August 25, 2018

Topics: historical development of labor relations policy and rights of workers, statutory source and
interpretation, definitions, employers, employee, overview types and classification of employees,
management prerogatives, NLRC and its composition, jurisdiction, powers and duties, appeal,
execution of orders, rules and procedure
Book Reference: Labor Relations and the Law on Dismissal by Dean Salvador Poquiz
Statutory References:
Art. II, Secs. 2, 10, 18
Art. III, Sec.8
Art. IX-B, Sec. 12
Art. XIII, Sec. 3 & 14
Labor Code (renumbered) Arts. 3, 218-231, 290
2011 NLRC Rules of Procedure
Cases:
Feati vs. Bautista, 18 SCRA 1191, GR L-21278, Dec. 27, 1966
Gold City vs. NLRC, 245 SCRA 627, GR L-103560, Jul. 6, 1995
RCPI vs. Phil. Comm, 65 SCRA 82, GR L-37662, July 15, 1975
Kiok Loy vs. NLRC, 141 SCRA 179, GR L-54334, Jan. 22, 1986
Mayor vs. Macaraig, GR No. 87211, March 5, 1991
Pepsi vs. Gallang, GR no. 89621, Sept. 24, 1991
PAL vs. NLRC, GR no. 120567, March 20, 1998
Spic n Span Services vs. Paje, et.al., GR No. 174084, August 25, 2010
Abbott vs. NLRC, 145 SCRA 206
St. Martin’s Funeral Home vs. NLRC, GR No. 130866, Sept. 16, 1988

Statutory References:

Art. II, Secs. 2, 10, 18

Article 2- Declaration of Principle and State Policy

Section 2. The Philippines renounces war as an instrument of national policy, adopts the
generally accepted principles of international law as part of the law of the land and adheres to the
policy of peace, equality, justice, freedom, cooperation, and amity with all nations.
Section 10. The State shall promote social justice in all phases of national development.
"Social justice is 'neither communism, nor despositism, nor atomism nor anarchy,' but the
humanization of laws and the equalization of social and economic forces by the State so that
justice in its rational and objectively secular conception may at least be approximated.
Social justice means the promotion of the welfare of all the people, the adoption by the
Government of measures calculated to insure economic stability of all the component elements of
society, through the maintenance of a proper economic and social equilibrium in the inter-relations
of the members of the community, constitutionally, through the adoption of measures legally
justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of all
governments on the time-honored principle of salus populi est suprema lex."
Section 18. The State affirms labor as a primary social economic force. It shall protect the rights
of workers and promote their welfare.
Art. III, Sec.8

ARTICLE III BILL OF RIGHTS

Section 8. The right of the people, including those employed in the public and private sectors, to form
unions, associations, or societies for purposes not contrary to law shall not be abridged.cralaw

Art. IX-B, Sec. 12

Art IX -Constitutional Commissions
B The Civil Service Commission
Section 1. (1) The Civil Service shall be administered by the Civil Service Commission composed of a Chairman and two
Commissioners who shall be natural-born citizens of the Philippines and, at the time of their appointment, at least thirty-five
years of age, with proven capacity for public administration, and must not have been candidates for any elective position in
the elections immediately preceding their appointment.
(2) The Chairman and the Commissioners shall be appointed by the President with the consent of the Commission on
Appointments for a term of seven years without reappointment. Of those first appointed, the Chairman shall hold office for
seven years, a Commissioner for five years, and another Commissioner for three years, without reappointment. Appointment
to any vacancy shall be only for the unexpired term of the predecessor. In no case shall any Member be appointed or
designated in a temporary or acting capacity.
Section 2. (1) The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government,
including government-owned or controlled corporations with original charters.
(2) Appointments in the civil service shall be made only according to merit and fitness to be determined, as far as practicable,
and, except as to positions which are policy-determining, primarily confidential, or highly technical, by competitive
examination.
(3) No officer or employee of the civil service shall be removed or suspended except for cause provided by law.
(4) No officer or employee in the civil service shall engage, directly or indirectly, in any electioneering or partisan political
campaign.
(5) The right to self-organization shall not be denied to government employees.
(6) Temporary employees of the Government shall be given such protection as may be provided by law.
Section 3. The Civil Service Commission, as the central personnel agency of the Government, shall establish a career service
and adopt measures to promote morale, efficiency, integrity, responsiveness, progressiveness, and courtesy in the civil service.
It shall strengthen the merit and rewards system, integrate all human resources development programs for all levels and ranks,
and institutionalize a management climate conducive to public accountability. It shall submit to the President and the
Congress an annual report on its personnel programs.
Section 4. All public officers and employees shall take an oath or affirmation to uphold and defend this Constitution.
Section 5. The Congress shall provide for the standardization of compensation of government officials, including those in
government-owned or controlled corporations with original charters, taking into account the nature of the responsibilities
pertaining to, and the qualifications required for their positions.
Section 6. No candidate who has lost in any election shall, within one year after such election, be appointed to any office in
the Government of any government-owned or controlled corporations or in any of its subsidiaries.
Section 7. No elective official shall be eligible for appointment or designation in any capacity to any public office or position
during his tenure.
Unless otherwise allowed by law or by the primary functions of his position, no appointive official shall hold any other office
or employment in the Government or any subdivision, agency or instrumentality thereof, including government-owned or
controlled corporations or their subsidiaries.
Section 8. No elective or appointive public officer or employee shall receive additional, double, or indirect compensation,
unless specifically authorized by law, nor accept without the consent of the Congress, any present, emolument, office, or title
of any kind from any foreign government.
Pensions or gratuities shall not be considered as additional, double, or indirect compensation.
Art. XIII, Sec. 3 & 14
Art X111- SOCIAL JUSTICE AND HUMAN RIGHTS
Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organizations, and peaceful concerted activities, including
the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of
work, and a living wage. They shall also participate in policy and decision-making processes affecting their
rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their
mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor to its
just share in the fruits of production and the right of enterprises to reasonable returns on investments, and to
expansion and growth.
Section 14. The State shall protect working women by providing safe and healthful working conditions,
taking into account their maternal functions, and such facilities and opportunities that will enhance their
welfare and enable them to realize their full potential in the service of the nation.

Feati vs. Bautista, 18 SCRA 1191, GR L-21278, Dec. 27, 1966

Gold City vs. NLRC, 245 SCRA 627, GR L-103560, Jul. 6, 1995
RCPI vs. Phil. Comm, 65 SCRA 82, GR L-37662, July 15, 1975

Kiok Loy vs. NLRC, 141 SCRA 179, GR L-54334, Jan. 22, 1986

Mayor vs. Macaraig, GR No. 87211, March 5, 1991

Pepsi vs. Gallang, GR no. 89621, Sept. 24, 1991

PAL vs. NLRC, GR no. 120567, March 20, 1998

Spic n Span Services vs. Paje, et.al., GR No. 174084, August 25, 2010

Abbott vs. NLRC, 145 SCRA 206

St. Martin’s Funeral Home vs. NLRC, GR No. 130866, Sept. 16, 1988
Labor Code (renumbered) Arts. 3, 218-231, 290

2011 NLRC Rules of Procedure

Cases:
Feati vs. Bautista, 18 SCRA 1191, GR L-21278, Dec. 27, 1966

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-21278 December 27, 1966
FEATI UNIVERSITY, petitioner,
vs.
HON. JOSE S. BAUTISTA, Presiding Judge of the Court of Industrial Relations and FEATI
UNIVERSITY FACULTY CLUB-PAFLU, respondents.
----------------------------------------
G.R. No. L-21462 December 27, 1966
FEATI UNIVERSITY, petitioner-appellant,
vs.
FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondent-appellee.
----------------------------------------
G.R. No. L-21500 December 27, 1966
FEATI UNIVERSITY, petitioner-appellant,
vs.
FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondent-appellee.
Rafael Dinglasan for petitioner.
Cipriano Cid and Associates for respondents.
ZALDIVAR, J.:
This Court, by resolution, ordered that these three cases be considered together, and the parties were
allowed to file only one brief for the three cases.
On January 14, 1963, the President of the respondent Feati University Faculty Club-PAFLU — hereinafter
referred to as Faculty Club — wrote a letter to Mrs. Victoria L. Araneta, President of petitioner Feati
University — hereinafter referred to as University — informing her of the organization of the Faculty Club
into a registered labor union. The Faculty Club is composed of members who are professors and/or
instructors of the University. On January 22, 1963, the President of the Faculty Club sent another letter
containing twenty-six demands that have connection with the employment of the members of the Faculty
Club by the University, and requesting an answer within ten days from receipt thereof. The President of the
University answered the two letters, requesting that she be given at least thirty days to study thoroughly the
different phases of the demands. Meanwhile counsel for the University, to whom the demands were
referred, wrote a letter to the President of the Faculty Club demanding proof of its majority status and
designation as a bargaining representative. On February 1, 1963, the President of the Faculty Club again
wrote the President of the University rejecting the latter's request for extension of time, and on the same day
he filed a notice of strike with the Bureau of Labor alleging as reason therefor the refusal of the University
to bargain collectively. The parties were called to conferences at the Conciliation Division of the Bureau of
Labor but efforts to conciliate them failed. On February 18, 1963, the members of the Faculty Club declared
a strike and established picket lines in the premises of the University, resulting in the disruption of classes in
the University. Despite further efforts of the officials from the Department of Labor to effect a settlement of
the differences between the management of the University and the striking faculty members no satisfactory
agreement was arrived at. On March 21, 1963, the President of the Philippines certified to the Court of
Industrial Relations the dispute between the management of the University and the Faculty Club pursuant to
the provisions of Section 10 of Republic Act No. 875.
In connection with the dispute between the University and the Faculty Club and certain incidents related to
said dispute, various cases were filed with the Court of Industrial Relations — hereinafter referred to as
CIR. The three cases now before this Court stemmed from those cases that were filed with the CIR.
CASE NO. G.R. NO. L-21278
On May 10, 1963, the University filed before this Court a "petition for certiorari and prohibition with writ
of preliminary injunction", docketed as G.R. No. L-21278, praying: (1) for the issuance of the writ of
preliminary injunction enjoining respondent Judge Jose S. Bautista of the CIR to desist from proceeding in
CIR Cases Nos. 41-IPA, 1183-MC, and V-30; (2) that the proceedings in Cases Nos. 41-IPA and 1183-MC
be annulled; (3) that the orders dated March 30, 1963 and April 6, 1963 in Case No. 41-IPA, the order dated
April 6, 1963 in Case No. 1183-MC, and the order dated April 29, 1963 in Case No. V-30, all be annulled;
and (4) that the respondent Judge be ordered to dismiss said cases Nos. 41-IPA, 1183-MC and V-30 of the
CIR.
On May 10, 1963, this Court issued a writ of preliminary injunction, upon the University's filing a bond of
P1,000.00, ordering respondent Judge Jose S. Bautista as Presiding Judge of the CIR, until further order
from this Court, "to desist and refrain from further proceeding in the premises (Cases Nos. 41-IPA, 1183-
MC and V-30 of the Court of Industrial Relations)."1 On December 4, 1963, this Court ordered the
injunction bond increased to P100,000.00; but on January 23, 1964, upon a motion for reconsideration by
the University, this Court reduced the bond to P50,000.00.
A brief statement of the three cases — CIR Cases 41-IPA, 1183-MC and V-30 — involved in the Case G.R.
No. L-21278, is here necessary.
CIR Case No. 41-IPA, relates to the case in connection with the strike staged by the members of the Faculty
Club. As we have stated, the dispute between the University and the Faculty Club was certified on March
21, 1963 by the President of the Philippines to the CIR. On the strength of the presidential certification,
respondent Judge Bautista set the case for hearing on March 23, 1963. During the hearing, the Judge
endeavored to reconcile the part and it was agreed upon that the striking faculty members would return to
work and the University would readmit them under a status quo arrangement. On that very same day,
however, the University, thru counsel filed a motion to dismiss the case upon the ground that the CIR has no
jurisdiction over the 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; and (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. On March
30, 1963 the respondent Judge issued an order denying the motion to dismiss and declaring that the
Industrial Peace Act is applicable to both parties in the case and that the CIR had acquired jurisdiction over
the case by virtue of the presidential certification. In the same order, the respondent Judge, believing that the
dispute could not be decided promptly, 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, as per agreement had
during the hearing on March 23, 1963; and likewise enjoined the University, pending adjudication of the
case, from dismissing any employee or laborer without previous authorization from the CIR. The University
filed on April 1, 1963 a motion for reconsideration of the order of March 30, 1963 by the CIR en banc, and
at the same time asking that the motion for reconsideration be first heard by the CIR en banc. Without the
motion for reconsideration having been acted upon by the CIR en banc, respondent Judge set the case for
hearing on the merits for May 8, 1963. The University moved for the cancellation of said hearing upon the
ground that the court en banc should first hear the motion for reconsideration and resolve the issues raised
therein before the case is heard on the merits. This motion for cancellation of the hearing was denied. The
respondent Judge, however, cancelled the scheduled hearing when counsel for the University manifested
that he would take up before the Supreme Court, by a petition for certiorari, the matter regarding the
actuations of the respondent Judge and the issues raised in the motion for reconsideration, specially the issue
relating to the jurisdiction of the CIR. The order of March 30, 1963 in Case 41-IPA is one of the orders
sought to be annulled in the case, G.R. No. L-21278.
Before the above-mentioned order of March 30, 1963 was issued by respondent Judge, the University had
employed professors and/or instructors to take the places of those professors and/or instructors who had
struck. On April 1, 1963, the Faculty Club filed with the CIR in Case 41-IPA a petition to declare in
contempt of court certain parties, alleging that the University refused to accept back to work the returning
strikers, in violation of the return-to-work order of March 30, 1963. The University filed, on April 5,1963,
its opposition to the petition for contempt, denying the allegations of the Faculty Club and alleging by way
of special defense that there was still the motion for reconsideration of the order of March 30, 1963 which
had not yet been acted upon by the CIR en banc. On April 6, 1963, the respondent Judge issued an order
stating that "said replacements are hereby warned and cautioned, for the time being, not to disturb nor in any
manner commit any act tending to disrupt the effectivity of the order of March 30,1963, pending the final
resolution of the same."2 On April 8, 1963, there placing professors and/or instructors concerned filed, thru
counsel, a motion for reconsideration by the CIR en banc of the order of respondent Judge of April 6, 1963.
This order of April 6, 1963 is one of the orders that are sought to be annulled in case G.R. No. L-21278.
CIR Case No. 1183-MC relates to a petition for certification election filed by the Faculty Club on March 8,
1963 before the CIR, praying that it be certified as the sole and exclusive bargaining representative of all the
employees of the University. The University filed an opposition to the petition for certification election and
at the same time a motion to dismiss said petition, raising the very same issues raised in Case No. 41-IPA,
claiming that the petition did not comply with the rules promulgated by the CIR; that the Faculty Club is not
a legitimate labor union; that the members of the Faculty Club cannot unionize for collective bargaining
purposes; that the terms of the individual contracts of the professors, instructors, and teachers, who are
members of the Faculty Club, would expire on March 25 or 31, 1963; and that the CIR has no jurisdiction to
take cognizance of the petition because the Industrial Peace Act is not applicable to the members of the
Faculty Club nor to the University. This case was assigned to Judge Baltazar Villanueva of the CIR. Before
Judge Villanueva could act on the motion to dismiss, however, the Faculty Club filed on April 3, 1963 a
motion to withdraw the petition on the ground that the labor dispute (Case No. 41-IPA) had already been
certified by the President to the CIR and the issues raised in Case No. 1183-MC were absorbed by Case No.
41-IPA. The University opposed the withdrawal, alleging that the issues raised in Case No. 1183-MC were
separate and distinct from the issues raised in Case No. 41-IPA; that the questions of recognition and
majority status in Case No. 1183-MC were not absorbed by Case No. 41-IPA; and that the CIR could not
exercise its power of compulsory arbitration unless the legal issue regarding the existence of employer-
employee relationship was first resolved. The University prayed that the motion of the Faculty Club to
withdraw the petition for certification election be denied, and that its motion to dismiss the petition be
heard. Judge Baltazar Villanueva, finding that the reasons stated by the Faculty Club in the motion to
withdraw were well taken, on April 6, 1963, issued an order granting the withdrawal. The University filed,
on April 24, 1963, a motion for reconsideration of that order of April 6, 1963 by the CIR en banc. This
order of April 6, 1963 in Case No. 1183-MC is one of the orders sought to be annulled in the case, G.R. No.
L-21278, now before Us.
CIR Case No. V-30 relates to a complaint for indirect contempt of court filed against the administrative
officials of the University. The Faculty Club, through the Acting Chief Prosecutor of the CIR, filed with the
CIR a complaint docketed as Case No. V-30, charging President Victoria L. Araneta, Dean Daniel Salcedo,
Executive Vice-President Rodolfo Maslog, and Assistant to the President Jose Segovia, as officials of the
University, with indirect contempt of court, reiterating the same charges filed in Case No. 41-IPA for
alleged violation of the order dated March 30, 1963. Based on the complaint thus filed by the Acting Chief
Prosecutor of the CIR, respondent Judge Bautista issued on April 29, 1963 an order commanding any officer
of the law to arrest the above named officials of the University so that they may be dealt with in accordance
with law, and the same time fixed the bond for their release at P500.00 each. This order of April 29, 1963 is
also one of the orders sought to be annulled in the case, G.R. No. L-2l278.
The principal allegation of the University in its petition for certiorari and prohibition with preliminary
injunction in Case G.R. No. L-21278, now before Us, is that respondent 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. Let it be noted that when the
petition for certiorari and prohibition with preliminary injunction was filed on May 10, 1963 in this case,
the questioned order in CIR Cases Nos. 41-IPA, 1183-MC and V-30 were still pending action by the CIR en
banc upon motions for reconsideration filed by the University.
On June 10, 1963, the Faculty Club filed its answer to the petition for certiorari and prohibition with
preliminary injunction, admitting some allegations contained in the petition and denying others, and alleging
special defenses which boil down to the contentions that (1) the CIR had acquired jurisdiction to take
cognizance of Case No. 41-IPA by virtue of the presidential certification, so that it had jurisdiction to issue
the questioned orders in said Case No. 41-IPA; (2) that the Industrial Peace Act (Republic Act 875) is
applicable to the University as an employer and to the members of the Faculty Club as employees who are
affiliated with a duly registered labor union, so that the Court of Industrial Relations had jurisdiction to take
cognizance of Cases Nos. 1183-MC and V-30 and to issue the questioned orders in those two cases; and (3)
that the petition for certiorari and prohibition with preliminary injunction was prematurely filed because the
orders of the CIR sought to be annulled were still the subjects of pending motions for reconsideration before
the CIR en banc when said petition for certiorari and prohibition with preliminary injunction was filed
before this Court.
CASE G.R. NO. L-21462
This case, G.R. No. L-21462, involves also CIR Case No. 1183-MC. As already stated Case No. 1183-MC
relates to a petition for certification election filed by the Faculty Club as a labor union, praying that it be
certified as the sole and exclusive bargaining representative of all employees of the University. This petition
was opposed by the University, and at the same time it filed a motion to dismiss said petition. But before
Judge Baltazar Villanueva could act on the petition for certification election and the motion to dismiss the
same, Faculty Club filed a motion to withdraw said petition upon the ground that the issue raised in Case
No. 1183-MC were absorbed by Case No. 41-IPA which was certified by the President of the Philippines.
Judge Baltazar Villanueva, by order April 6, 1963, granted the motion to withdraw. The University filed a
motion for reconsideration of that order of April 6, 1963 by the CIR en banc. That motion for
reconsideration was pending action by the CIR en banc when the petition for certiorariand prohibition with
preliminary injunction in Case G.R. no. L-21278 was filed on May 10, 1963. As earlier stated this Court, in
Case G.R. No. L-21278, issued a writ of preliminary injunction on May 10, 1963, ordering respondent
Judge Bautista, until further order from this Court, to desist and refrain from further proceeding in the
premises (Cases Nos. 41-IPA, 1183-MC and V-30 of the Court of Industrial Relations).
On June 5, 1963, that is, after this Court has issued the writ of preliminary injunction in Case G.R. No. L-
21278, the CIR en banc issued a resolution denying the motion for reconsideration of the order of April 6,
1963 in Case No. 1183-MC.
On July 8, 1963, the University filed before this Court a petition for certiorari, by way of an appeal from the
resolution of the CIR en banc, dated June 5, 1963, denying the motion for reconsideration of the order of
April 6, 1963 in Case No. 1183-MC. This petition was docketed as G.R. No. L-21462. In its petition
for certiorari, the University alleges (1) that the resolution of the Court of Industrial Relations of June 5,
1963 was null and void because it was issued in violation of the writ of preliminary injunction issued in
Case G.R. No. L-21278; (2) that the issues of employer-employee relationship, the alleged status as a labor
union, majority representation and designation as bargaining representative in an appropriate unit of the
Faculty Club should have been resolved first in Case No. 1183-MC prior to the determination of the issues
in Case No. 41-IPA and therefore the motion to withdraw the petition for certification election should not
have been granted upon the ground that the issues in the first case have been absorbed in the second case;
and (3) the lower court acted without or in excess of jurisdiction in taking cognizance of the petition for
certification election and that the same should have been dismissed instead of having been ordered
withdrawn. The University prayed that the proceedings in Case No. 1183-MC and the order of April 6, 1963
and the resolution of June 5, 1963 issued therein be annulled, and that the CIR be ordered to dismiss Case
No. 1183-MC on the ground of lack of jurisdiction.
The Faculty Club filed its answer, admitting some, and denying other, allegations in the petition
for certiorari; and specially alleging that the lower court's order granting the withdrawal of the petition for
certification election was in accordance with law, and that the resolution of the court en banc on June 5,
1963 was not a violation of the writ of preliminary injunction issued in Case G.R. No. L-21278 because said
writ of injunction was issued against Judge Jose S. Bautista and not against the Court of Industrial
Relations, much less against Judge Baltazar Villanueva who was the trial judge of Case No. 1183-MC.
CASE G.R. NO. L-21500
This case, G.R. No. L-21500, involves also CIR Case No. 41-IPA. As earlier stated, Case No. 41-IPA
relates to the strike staged by the members of the Faculty Club and the dispute was certified by the President
of the Philippines to the CIR. The University filed a motion to dismiss that case upon the ground that the
CIR has no jurisdiction over the case, and on March 30, 1963 Judge Jose S. Bautista issued an order denying
the motion to dismiss and declaring that the Industrial Peace Act is applicable to both parties in the case and
that the CIR had acquired jurisdiction over the case by virtue of the presidential certification; and in that
same order Judge Bautista ordered the strikers to return to work and the University to take them back under
the last terms and conditions existing before the dispute arose; and enjoined the University from dismissing
any employee or laborer without previous authority from the court. On April 1, 1963, the University filed a
motion for reconsideration of the order of March 30, 1963 by the CIR en banc. That motion for
reconsideration was pending action by the CIR en banc when the petition for certiorari and prohibition with
preliminary injunction in Case G.R. No. L-21278 was filed on May 10, 1963. As we have already stated,
this Court in said case G.R. No. L-21278, issued a writ of preliminary injunction on May 10, 1963 ordering
respondent Judge Jose S. Bautista, until further order from this Court, to desist and refrain from further
proceeding in the premises (Cases Nos. 41-IPA, 1183-MC and V-30 of the Court of Industrial Relations).
On July 2, 1963, the University received a copy of the resolution of the CIR en banc, dated May 7, 1963 but
actually received and stamped at the Office of the Clerk of the CIR on June 28, 1963, denying the motion
for reconsideration of the order dated March 30, 1963 in Case No. 41-IPA.
On July 23, 1963, the University filed before this Court a petition for certiorari, by way of an appeal from
the resolution of the Court of Industrial Relations en banc dated May 7, 1963 (but actually received by said
petitioner on July 2, 1963) denying the motion for reconsideration of the order of March 30, 1963 in Case
No. 41-IPA. This petition was docketed as G.R. No. L-21500. In its petition for certiorari the University
alleges (1) that the resolution of the CIR en banc, dated May 7, 1963 but filed with the Clerk of the CIR on
June 28, 1963, in Case No. 41-IPA, is null and void because it was issued in violation of the writ of
preliminary injunction issued by this Court in G.R. No. L-21278; (2) that the CIR, through its Presiding
Judge, had no jurisdiction to take cognizance of Case No. 41-IPA and the order of March 30, 1963 and the
resolution dated May 7, 1963 issued therein are null and void; (3) that the certification made by the
President of the Philippines is not authorized by Section 10 of Republic Act 875, but is violative thereof; (4)
that the Faculty Club has no right to unionize or organize as a labor union for collective bargaining purposes
and to be certified as a collective bargaining agent within the purview of the Industrial Peace Act, and
consequently it has no right to strike and picket on the ground of petitioner's alleged refusal to bargain
collectively where such duty does not exist in law and is not enforceable against an educational institution;
and (5) that the return-to-work order of March 30, 1963 is improper and illegal. The petition prayed that the
proceedings in Case No. 41-IPA be annulled, that the order dated March 30, 1963 and the resolution dated
May 7, 1963 be revoked, and that the lower court be ordered to dismiss Case 41-IPA on the ground of lack
of jurisdiction.
On September 10, 1963, the Faculty Club, through counsel, filed a motion to dismiss the petition
for certiorari on the ground that the petition being filed by way of an appeal from the orders of the Court of
Industrial Relations denying the motion to dismiss in Case No. 41-IPA, the petition for certiorari is not
proper because the orders appealed from are interlocutory in nature.
This Court, by resolution of September 26, 1963, ordered that these three cases (G.R. Nos. L-21278, L-
21462 and L-21500) be considered together and the motion to dismiss in Case G.R. No. L-21500 be taken
up when the cases are decided on the merits after the hearing.
Brushing aside certain technical questions raised by the parties in their pleadings, We proceed to decide
these three cases on the merits of the issues raised.
The University has raised several issues in the present cases, the pivotal one being its claim that the Court of
Industrial Relations has no jurisdiction over the parties and the subject matter in CIR Cases 41-IPA, 1183-
MC and V-30, brought before it, upon the ground that Republic Act No. 875 is not applicable to the
University because it is an educational institution and not an industrial establishment and hence not an
"employer" in contemplation of said Act; and neither is Republic Act No. 875 applicable to the members of
the Faculty Club because the latter are independent contractors and, therefore, not employees within the
purview of the said Act.
In support of the contention that being an educational institution it is beyond the scope of Republic Act No.
875, the University cites cases decided by this Court: Boy Scouts of the Philippines vs. Juliana Araos, L-
10091, Jan. 29, 1958; University of San Agustin vs. CIR, et al., L-12222, May 28, 1958; Cebu Chinese High
School vs. Philippine Land-Air-Sea Labor Union, PLASLU, L-12015, April 22, 1959; La Consolacion
College, et al. vs. CIR, et al., L-13282, April 22, 1960; University of the Philippines, et al. vs. CIR, et al., L-
15416, April 8, 1960; Far Eastern University vs. CIR, L-17620, August 31, 1962. We have reviewed these
cases, and also related cases subsequent thereto, and We find that they do not sustain the contention of the
University. It is true that this Court has ruled that certain educational institutions, like the University of
Santo Tomas, University of San Agustin, La Consolacion College, and other juridical entities, like the Boy
Scouts of the Philippines and Manila Sanitarium, are beyond the purview of Republic Act No. 875 in the
sense that the Court of Industrial Relations has no jurisdiction to take cognizance of charges of unfair labor
practice filed against them, but it is nonetheless true that the principal reason of this Court in ruling in those
cases that those institutions are excluded from the operation of Republic Act 875 is that those entities are not
organized, maintained and operated for profit and do not declare dividends to stockholders. The decision in
the case of University of San Agustin vs. Court of Industrial Relations, G.R. No. L-12222, May 28, 1958, is
very pertinent. We quote a portion of the decision:
It appears that the University of San Agustin, petitioner herein, is an educational institution conducted and
managed by a "religious non-stock corporation duly organized and existing under the laws of the
Philippines." It was organized not for profit or gain or division of the dividends among its stockholders, but
solely for religious and educational purposes. It likewise appears that the Philippine Association of College
and University Professors, respondent herein, is a non-stock association composed of professors and
teachers in different colleges and universities and that since its organization two years ago, the university
has adopted a hostile attitude to its formation and has tried to discriminate, harass and intimidate its
members for which reason the association and the members affected filed the unfair labor practice
complaint which initiated this proceeding. To the complaint of unfair labor practice, petitioner filed an
answer wherein it disputed the jurisdiction of the Court of Industrial Relations over the controversy on the
following grounds:
"(a) That complainants therein being college and/or university professors were not "industrial" laborers or
employees, and the Philippine Association of College and University Professors being composed of persons
engaged in the teaching profession, is not and cannot be a legitimate labor organization within the meaning
of the laws creating the Court of Industrial Relations and defining its powers and functions;
"(b) That the University of San Agustin, respondent therein, is not an institution established for the purpose
of gain or division of profits, and consequently, it is not an "industrial" enterprise and the members of its
teaching staff are not engaged in "industrial" employment (U.S.T. Hospital Employees Association vs. Sto.
Tomas University Hospital, G.R. No. L-6988, 24 May 1954; and San Beda College vs. Court of Industrial
Relations and National Labor Union, G.R. No. L-7649, 29 October 1955; 51 O.G. (Nov. 1955) 5636-5640);
"(c) That, as a necessary consequence, alleged controversy between therein complainants and respondent is
not an "industrial" dispute, and the Court of Industrial Relations has no jurisdiction, not only on the parties
but also over the subject matter of the complaint."
The issue now before us is: Since the University of San Agustin is not an institution established for profit or
gain, nor an industrial enterprise, but one established exclusively for educational purposes, can it be said
that its relation with its professors is one of employer and employee that comes under the jurisdiction of the
Court of Industrial Relations? In other words, do the provisions of the Magna Carta on unfair labor practice
apply to the relation between petitioner and members of respondent association?
The issue is not new. Thus, in the case of Boy Scouts of the Philippines v. Juliana V. Araos, G.R. No. L-
10091, promulgated on January 29, 1958, this Court, speaking thru Mr. Justice Montemayor, answered the
query in the negative in the following wise:
"The main issue involved in the present case is whether or not a charitable institution or one organized not
for profit but for more elevated purposes, charitable, humanitarian, etc., like the Boy Scouts of the
Philippines, is included in the definition of "employer" contained in Republic Act 875, and whether the
employees of said institution fall under the definition of "employee" also contained in the same Republic
Act. If they are included, then any act which may be considered unfair labor practice, within the meaning of
said Republic Act, would come under the jurisdiction of the Court of Industrial Relations; but if they do not
fall within the scope of said Republic Act, particularly, its definitions of employer and employee, then the
Industrial Court would have no jurisdiction at all.
xxx xxx xxx
"On the basis of the foregoing considerations, there is every reason to believe that our labor legislation from
Commonwealth Act No. 103, creating the Court of Industrial Relations, down through the Eight-Hour Labor
Law, to the Industrial Peace Act, was intended by the Legislature to apply only to industrial employment
and to govern the relations between employers engaged in industry and occupations for purposes of profit
and gain, and their industrial employees, but not to organizations and entities which are organized, operated
and maintained not for profit or gain, but for elevated and lofty purposes, such as, charity, social service,
education and instruction, hospital and medical service, the encouragement and promotion of character,
patriotism and kindred virtues in youth of the nation, etc.
"In conclusion, we find and hold that Republic Act No. 875, particularly, that portion thereof regarding
labor disputes and unfair labor practice, does not apply to the Boy Scouts of the Philippines, and
consequently, the Court of Industrial Relations had no jurisdiction to entertain and decide the action or
petition filed by respondent Araos. Wherefore, the appealed decision and resolution of the CIR are hereby
set aside, with costs against respondent."
There being a close analogy between the relation and facts involved in the two cases, we cannot but
conclude that the Court of Industrial Relations has no jurisdiction to entertain the complaint for unfair labor
practice lodged by respondent association against petitioner and, therefore, we hereby set aside the order
and resolution subject to the present petition, with costs against respondent association.
The same doctrine was confirmed in the case of University of Santo Tomas v. Hon. Baltazar Villanueva, et
al., G.R. No. L-13748, October 30, 1959, where this Court ruled that:
In the present case, the record reveals that the petitioner University of Santo Tomas is not an industry
organized for profit but an institution of learning devoted exclusively to the education of the youth. The
Court of First Instance of Manila in its decision in Civil Case No. 28870, which has long become final and
consequently the settled law in the case, found as established by the evidence adduced by the parties therein
(herein petitioner and respondent labor union) that while the University collects fees from its students, all its
income is used for the improvement and enlargement of the institution. The University declares no dividend,
and the members of the corporation who founded it, as ordained in its articles of incorporation, receive no
material compensation for the time and sacrifice they render to the University and its students. The
respondent union itself in a case before the Industrial Court (Case No. 314-MC) has averred that "the
University of Santo Tomas, like the San Beda College, is an educational institution operated not for profit
but for the sole purpose of educating young men." (See Annex "B" to petitioner's motion to dismiss.). It is
apparent, therefore, that on the face of the record the University of Santo Tomas is not a corporation created
for profit but an educational institution and therefore not an industrial or business organization.
In the case of La Consolacion College, et al. vs. CIR, et al., G.R. No. L-13282, April 22, 1960, this Court
repeated the same ruling when it said:
The main issue in this appeal by petitioner is that the industry trial court committed an error in holding that
it has jurisdiction to act in this case even if it involves unfair labor practice considering that the La
Consolacion College is not a business enterprise but an educational institution not organized for profit.
If the claim that petitioner is an educational institution not operated for profit is true, which apparently is the
case, because the very court a quo found that it has no stockholder, nor capital . . . then we are of the
opinion that the same does not come under the jurisdiction of the Court of Industrial Relations in view of the
ruling in the case of Boy Scouts of the Philippines v. Juliana V. Araos, G.R. No. L-10091, decided on
January 29, 1958.
It is noteworthy that the cases of the University of San Agustin, the University of Santo Tomas, and La
Consolacion College, cited above, all involve charges of unfair labor practice under Republic Act No. 875,
and the uniform rulings of this Court are that the Court of Industrial Relations has no jurisdiction over the
charges because said Act does not apply to educational institutions that are not operated or maintained for
profit and do not declare dividends. On the other hand, in the cases of Far Eastern University v. CIR, et
al., G.R. No. L-17620, August 31, 1962, this Court upheld the decision of the Court of Industrial Relations
finding the Far Eastern University, also an educational institution, guilty of unfair labor practice. Among the
findings of fact in said case was that the Far Eastern University made profits from the school year 1952-
1953 to 1958-1959. In affirming the decision of the lower court, this Court had thereby ratified the ruling of
the Court of Industrial Relations which applied the Industrial Peace Act to educational institutions that are
organized, operated and maintained for profit.
It is also noteworthy that in the decisions in the cases of the Boy Scouts of the Philippines, the University of
San Agustin, the University of Sto. Tomas, and La Consolacion College, this Court was not unanimous in
the view that the Industrial Peace Act (Republic Act No. 875) is not applicable to charitable, eleemosynary
or non-profit organizations — which include educational institutions not operated for profit. There are
members of this Court who hold the view that the Industrial Peace Act would apply also to non-profit
organizations or entities — the only exception being the Government, including any political subdivision or
instrumentality thereof, in so far as governmental functions are concerned. However, in the Far Eastern
University case this Court is unanimous in supporting the view that an educational institution that is
operated for profit comes within the scope of the Industrial Peace Act. We consider it a settled doctrine of
this Court, therefore, that the Industrial Peace Act is applicable to any organization or entity — whatever
may be its purpose when it was created — that is operated for profit or gain.
Does the University operate as an educational institution for profit? Does it declare dividends for its
stockholders? If it does not, it must be declared beyond the purview of Republic Act No. 875; but if it does,
Republic Act No. 875 must apply to it. The University itself admits that it has declared dividends.3 The CIR
in its order dated March 30, 1963 in CIR Case No. 41-IPA — which order was issued after evidence was
heard — also found that the University is not for strictly educational purposes and that "It realizes profits
and parts of such earning is distributed as dividends to private stockholders or individuals (Exh. A and also
1 to 1-F, 2-x 3-x and 4-x)"4 Under this circumstance, and in consonance with the rulings in the decisions of
this Court, above cited, it is obvious that Republic Act No. 875 is applicable to herein petitioner Feati
University.
But the University claims that it is not an employer within the contemplation of Republic Act No. 875,
because it is not an industrial establishment. At most, it says, it is only a lessee of the services of its
professors and/or instructors pursuant to a contract of services entered into between them. We find no merit
in this claim. Let us clarify who is an "employer" under the Act. Section 2(c) of said Act provides:
Sec. 2. Definitions.—As used in this Act —
(c) 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.
It will be noted that in defining the term "employer" the Act uses the word "includes", which it also used in
defining "employee". [Sec. 2 (d)], and "representative" [Sec. 2(h)]; and not the word "means" which the Act
uses in defining the terms "court" [Sec. 2(a)], "labor organization" [Sec. 2(e)], "legitimate labor organization
[Sec. 2(f)], "company union" [Sec. 2(g)], "unfair labor practice" [Sec. 2(i)], "supervisor" [Sec. 2(k)], "strike"
[Sec. 2(l)] and "lock-out" [Sec. 2(m)]. A methodical variation in terminology is manifest. This variation and
distinction in terminology and phraseology cannot be presumed to have been the inconsequential product of
an oversight; rather, it must have been the result of a deliberate and purposeful act, more so when we
consider that as legislative records show, Republic Act No. 875 had been meticulously and painstakingly
drafted and deliberated upon. In using the word "includes" and not "means", 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. Congress intended the term to be understood in a broad meaning
because, firstly, the statutory definition includes not only "a principal employer but also a person acting in
the interest of the employer"; and, secondly, the Act itself specifically enumerated those who are not
included in the term "employer", namely: (1) a labor organization (otherwise than when acting as an
employer), (2) anyone acting in the capacity of officer or agent of such labor organization [Sec. 2(c)], and
(3) the Government and any political subdivision or instrumentality thereof insofar as the right to strike for
the purpose of securing changes or modifications in the terms and conditions of employment is concerned
(Section 11). Among these statutory exemptions, educational institutions are not included; hence, they can
be included in the term "employer". This Court, however, has ruled that those educational institutions that
are not operated for profit are not within the purview of Republic Act No. 875.5
As stated above, Republic Act No. 875 does not give a comprehensive but only a complementary definition
of the term "employer". The term encompasses those that are in ordinary parlance "employers." What is
commonly meant by "employer"? The term "employer" has been given several acceptations. The lexical
definition is "one who employs; one who uses; one who engages or keeps in service;" and "to employ" is "to
provide work and pay for; to engage one's service; to hire." (Webster's New Twentieth Century Dictionary,
2nd ed., 1960, p. 595). The Workmen's Compensation Act defines employer as including "every person or
association of persons, incorporated or not, public or private, and the legal representative of the deceased
employer" and "includes the owner or lessee of a factory or establishment or place of work or any other
person who is virtually the owner or manager of the business carried on in the establishment or place of
work but who, for reason that there is an independent contractor in the same, or for any other reason, is not
the direct employer of laborers employed there." [Sec. 39(a) of Act No. 3428.] The Minimum Wage Law
states that "employer includes any person acting directly or indirectly in the interest of the employer in
relation to an employee and shall include the Government and the government corporations". [Rep. Act No.
602, Sec. 2(b)]. The Social Security Act defines employer as "any person, natural or juridical, domestic or
foreign, who carries in the Philippines any trade, business, industry, undertaking, or activity of any kind and
uses the services of another person who is under his orders as regards the employment, except the
Government and any of its political subdivisions, branches or instrumentalities, including corporations
owned or controlled by the Government." (Rep. Act No. 1161, Sec. 8[c]).
This Court, in the cases of the The Angat River Irrigation System, et al. vs. Angat River Workers' Union
(PLUM), et al., G.R. Nos. L-10934 and L-10944, December 28, 1957, which cases involve unfair labor
practices and hence within the purview of Republic Act No. 875, defined the term employer as follows:
An employer is one who employs the services of others; one for whom employees work and who pays their
wages or salaries (Black Law Dictionary, 4th ed., p. 618).
An employer includes any person acting in the interest of an employer, directly or indirectly (Sec. 2-c, Rep.
Act 875).
Under none of the above definitions may the University be excluded, especially so if it is considered that
every professor, instructor or teacher in the teaching staff of the University, as per allegation of the
University itself, has a contract with the latter for teaching services, albeit for one semester only. The
University engaged the services of the professors, provided them work, and paid them compensation or
salary for their services. Even if the University may be considered as a lessee of services under a contract
between it and the members of its Faculty, still it is included in the term "employer". "Running through the
word `employ' is the thought that there has been an agreement on the part of one person to perform a certain
service in return for compensation to be paid by an employer. When you ask how a man is employed, or
what is his employment, the thought that he is under agreement to perform some service or services for
another is predominant and paramount." (Ballentine Law Dictionary, Philippine ed., p. 430, citing Pinkerton
National Detective Agency v. Walker, 157 Ga. 548, 35 A. L. R. 557, 560, 122 S.E. Rep. 202).
To bolster its claim of exception from the application of Republic Act No. 875, the University contends that
it is not state that the employers included in the definition of 2 (c) of the Act. This contention can not be
sustained. In the first place, Sec. 2 (c) of Republic Act No. 875 does not state that the employers included in
the definition of the term "employer" are only and exclusively "industrial establishments"; on the contrary,
as stated above, the term "employer" encompasses all employers except those specifically excluded by the
Act. In the second place, even the Act itself does not refer exclusively to industrial establishments and does
not confine its application thereto. This is patent inasmuch as several provisions of the Act are applicable to
non-industrial workers, such as Sec. 3, which deals with "employees' right to self-organization"; Sections 4
and 5 which enumerate unfair labor practices; Section 8 which nullifies private contracts contravening
employee's rights; Section 9 which relates to injunctions in any case involving a labor dispute; Section 11
which prohibits strikes in the government; Section 12 which provides for the exclusive collective bargaining
representation for labor organizations; Section 14 which deals with the procedure for collective bargaining;
Section 17 which treats of the rights and conditions of membership in labor organizations; Sections 18, 19,
20 and 21 which provide respectively for the establishment of conciliation service, compilation of collective
bargaining contracts, advisory labor-management relations; Section 22 which empowers the Secretary of
Labor to make a study of labor relations; and Section 24 which enumerates the rights of labor organizations.
(See Dissenting Opinion of Justice Concepcion in Boy Scouts of the Philippines v. Juliana Araos, G.R. No.
L-10091, January 29, 1958.)
This Court, in the case of Boy Scouts of the Philippines v. Araos, supra, had occasion to state that the
Industrial Peace Act "refers only to organizations and entities created and operated for profits, engaged in a
profitable trade, occupation or industry". It cannot be denied that running a university engages time and
attention; that it is an occupation or a business from which the one engaged in it may derive profit or gain.
The University is not an industrial establishment in the sense that an industrial establishment is one that is
engaged in manufacture or trade where raw materials are changed or fashioned into finished products for
use. But for the purposes of the Industrial Peace Act the University is an industrial establishment because it
is operated for profit and it employs persons who work to earn a living. The term "industry", for the
purposes of the application of our labor laws should be given a broad meaning so as to cover all enterprises
which are operated for profit and which engage the services of persons who work to earn a living.
The word "industry" within State Labor Relations Act controlling labor relations in industry, cover labor
conditions in any field of employment where the objective is earning a livelihood on the one side and
gaining of a profit on the other. Labor Law Sec. 700 et seq. State Labor Relations Board vs. McChesney, 27
N.Y.S. 2d 866, 868." (Words and Phrases, Permanent Edition, Vol. 21, 1960 edition p. 510).
The University urges that even if it were an employer, still there would be no employer-employee
relationship between it and the striking members of the Faculty Club because the latter are not employees
within the purview of Sec. 2(d) of Republic Act No. 875 but are independent contractors. This claim is
untenable.
Section 2 (d) of Republic Act No. 875 provides:
(d) The term "employee" shall include any employee and shall not be limited to the employee of a particular
employer unless the act explicitly states otherwise and shall include any individual whose work has ceased
as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice
and who has not obtained any other substantially equivalent and regular employment.
This definition is again, like the definition of the term "employer" [Sec. 2(c)], by the use of the term
"include", complementary. 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. The term "employee",
furthermore, is not limited to those of a particular employer. As already stated, this Court in the cases of The
Angat River Irrigation System, et al. v. Angat River Workers' Union (PLUM), et al., supra, has defined the
term "employer" as "one who employs the services of others; one for whom employees work and who pays
their wages or salaries. "Correlatively, an employee must be one who is engaged in the service of another;
who performs services for another; who works for salary or wages. It is admitted by the University that the
striking professors and/or instructors are under contract to teach particular courses and that they are paid for
their services. They are, therefore, employees of the University.
In support of its claim that the members of the Faculty Club are not employees of the University, the latter
cites as authority Francisco's Labor Laws, 2nd ed., p. 3, which states:
While the term "workers" as used in a particular statute, has been regarded as limited to those performing
physical labor, it has been held to embrace stenographers and bookkeepers. Teachers are not included,
however.
It is evident from the above-quoted authority that "teachers" are not to be included among those who
perform "physical labor", but it does not mean that they are not employees. We have checked the source of
the authority, which is 31 Am. Jur., Sec. 3, p. 835, and the latter cites Huntworth v. Tanner, 87 Wash 670,
152 P. 523, Ann Cas 1917 D 676. A reading of the last case confirms Our view.
That teachers are "employees' has been held in a number of cases (Aebli v. Board of Education of City and
County of San Francisco, 145 P. 2d 601, 62 Col. App 2.d 706; Lowe & Campbell Sporting Goods Co. v.
Tangipahoa Parish School Board, La. App., 15 So. 2d 98, 100; Sister Odelia v. Church of St. Andrew, 263
N. W. 111, 112, 195 Minn. 357, cited in Words and Phrases, Permanent ed., Vol. 14, pp. 806-807). This
Court in the Far Eastern University case, supra, considered university instructors as employees and declared
Republic Act No. 875 applicable to them in their employment relations with their school. The professors
and/or instructors of the University neither ceased to be employees when they struck, for Section 2 of Rep.
Act 875 includes among employees any individual whose work has ceased as consequence of, or in
connection with a current labor dispute. Striking employees maintain their status as employees of the
employer. (Western Cartridge Co. v. NLRB, C.C.A. 7, 139 F2d 855, 858).
The contention of the University that the professors and/or instructors are independent contractors, because
the University does not exercise control over their work, is likewise untenable. This Court takes judicial
notice that a university controls the work of the members of its faculty; that a university prescribes the
courses or subjects that professors teach, and when and where to teach; that the professors' work is
characterized by regularity and continuity for a fixed duration; that professors are compensated for their
services by wages and salaries, rather than by profits; that the professors and/or instructors cannot substitute
others to do their work without the consent of the university; and that the professors can be laid off if their
work is found not satisfactory. All these indicate that the university has control over their work; and
professors are, therefore, employees and not independent contractors. There are authorities in support of this
view.
The principal consideration in determining whether a workman is an employee or an independent contractor
is the right to control the manner of doing the work, and it is not the actual exercise of the right by
interfering with the work, but the right to control, which constitutes the test. (Amalgamated Roofing Co. v.
Travelers' Ins. Co., 133 N.E. 259, 261, 300 Ill. 487, quoted in Words and Phrases, Permanent ed., Vol. 14, p.
576).
Where, under Employers' Liability Act, A was instructed when and where to work . . . he is an employee,
and not a contractor, though paid specified sum per square. (Heine v. Hill, Harris & Co., 2 La. App. 384,
390, in Words and Phrases, loc, cit.) .
Employees are those who are compensated for their labor or services by wages rather than by profits.
(People vs. Distributors Division, Smoked Fish Workers Union Local No. 20377, Sup. 7 N. Y. S. 2d 185,
187 in Words and Phrases, loc, cit.)
Services of employee or servant, as distinguished from those of a contractor, are usually characterized by
regularity and continuity of work for a fixed period or one of indefinite duration, as contrasted with
employment to do a single act or a series of isolated acts; by compensation on a fixed salary rather than one
regulated by value or amount of work; . . . (Underwood v. Commissioner of Internal Revenue, C.C.A., 56 F.
2d 67, 71 in Words and Phrases, op. cit., p. 579.)
Independent contractors can employ others to work and accomplish contemplated result without consent of
contractee, while "employee" cannot substitute another in his place without consent of his employer. (Luker
Sand & Gravel Co. v. Industrial Commission, 23 P. 2d 225, 82 Utah, 188, in Words and Phrases, Vol. 14, p.
576).
Moreover, even if university professors are considered independent contractors, still they would be covered
by Rep. Act No. 875. In the case of the Boy Scouts of the Philippines v. Juliana Araos, supra, this Court
observed that Republic Act No. 875 was modelled after the Wagner Act, or the National Labor Relations
Act, of the United States, and this Act did not exclude "independent contractors" from the orbit of
"employees". It was in the subsequent legislation — the Labor Management Relation Act (Taft-Harley
Act) — that "independent contractors" together with agricultural laborers, individuals in domestic service of
the home, supervisors, and others were excluded. (See Rothenberg on Labor Relations, 1949, pp. 330-331).
It having been shown that the members of the Faculty Club are employees, it follows that they have a right
to unionize in accordance with the provisions of Section 3 of the Magna Carta of Labor (Republic Act No.
875) which provides as follows:
Sec. 3. Employees' right to self-organization.—Employees shall have the right to self-organization and to
form, join or assist labor organizations of their own choosing for the purpose of collective bargaining
through representatives of their own choosing and to engage in concerted activities for the purpose of
collective bargaining and other mutual aid or protection. . . .
We agree with the statement of the lower court, in its order of March 30, 1963 which is sought to be set
aside in the instant case, that the right of employees to self-organization is guaranteed by the Constitution,
that said right would exist even if Republic Act No. 875 is repealed, and that regardless of whether their
employers are engaged in commerce or not. Indeed, it is Our considered view that the members of the
faculty or teaching staff of private universities, colleges, and schools in the Philippines, regardless of
whether the university, college or school is run for profit or not, are included in the term "employees" as
contemplated in Republic Act No. 875 and as such they may organize themselves pursuant to the above-
quoted provision of Section 3 of said Act. Certainly, 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 contention of the University in the instant case that the members of the Faculty Club can not unionize
and the Faculty Club can not exist as a valid labor organization is, therefore, without merit. The record
shows that the Faculty Club is a duly registered labor organization and this fact is admitted by counsel for
the University.5a
The other issue raised by the University is the validity of the Presidential certification. The University
contends that under Section 10 of Republic Act No. 875 the power of the President of the Philippines to
certify is subject to the following conditions, namely: (1) that here is a labor dispute, and (2) that said labor
dispute exists in an industry that is vital to the national interest. The University maintains that those
conditions do not obtain in the instant case. This contention has also no merit.
We have previously stated that the University is an establishment or enterprise that is included in the term
"industry" and is covered by the provisions of Republic Act No. 875. Now, was there a labor dispute
between the University and the Faculty Club?
Republic Act No. 875 defines a labor dispute as follows:
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.
The test of whether a controversy comes within the definition of "labor dispute" depends on whether the
controversy involves or concerns "terms, tenure or condition of employment" or "representation." It is
admitted by the University, in the instant case, that on January 14, 1963 the President of the Faculty Club
wrote to the President of the University a letter informing the latter of the organization of the Faculty Club
as a labor union, duly registered with the Bureau of Labor Relations; that again on January 22, 1963 another
letter was sent, to which was attached a list of demands consisting of 26 items, and asking the President of
the University to answer within ten days from date of receipt thereof; that the University questioned the
right of the Faculty Club to be the exclusive representative of the majority of the employees and asked proof
that the Faculty Club had been designated or selected as exclusive representative by the vote of the majority
of said employees; that on February 1, 1963 the Faculty Club filed with the Bureau of Labor Relations a
notice of strike alleging as reason therefor the refusal of the University to bargain collectively with the
representative of the faculty members; that on February 18, 1963 the members of the Faculty Club went on
strike and established picket lines in the premises of the University, thereby disrupting the schedule of
classes; that on March 1, 1963 the Faculty Club filed Case No. 3666-ULP for unfair labor practice against
the University, but which was later dismissed (on April 2, 1963 after Case 41-IPA was certified to the CIR);
and that on March 7, 1963 a petition for certification election, Case No. 1183-MC, was filed by the Faculty
Club in the CIR.6 All these admitted facts show that the controversy between the University and the Faculty
Club involved terms and conditions of employment, and the question of representation. Hence, there was a
labor dispute between the University and the Faculty Club, as contemplated by Republic Act No. 875. It
having been shown that the University is an institution operated for profit, that is an employer, and that there
is an employer-employee relationship, between the University and the members of the Faculty Club, and it
having been shown that a labor dispute existed between the University and the Faculty Club, the contention
of the University, that the certification made by the President is not only not authorized by Section 10 of
Republic Act 875 but is violative thereof, is groundless.
Section 10 of Republic Act No. 875 provides:
When in the opinion of the President of the Philippines there exists a labor dispute in an industry
indispensable to the national interest and when such labor dispute is certified by the President to the Court
of Industrial Relations, said Court may cause to be issued a restraining order forbidding the employees to
strike or the employer to lockout the employees, and if no other solution to the dispute is found, the Court
may issue an order fixing the terms and conditions of employment.
This Court had occasion to rule on the application of the above-quoted provision of Section 10 of Republic
Act No. 875. In the case of Pampanga Sugar Development Co. v. CIR, et al., G.R. No. L-13178, March 24,
1961, it was held:
It thus appears that when in the opinion of the President a labor dispute exists in an industry indispensable to
national interest and he certifies it to the Court of Industrial Relations the latter acquires jurisdiction to act
thereon in the manner provided by law. Thus the court may take either of the following courses: it may issue
an order forbidding the employees to strike or the employer to lockout its employees, or, failing in this, it
may issue an order fixing the terms and conditions of employment. It has no other alternative. It can not
throw the case out in the assumption that the certification was erroneous.
xxx xxx xxx
. . . The fact, however, is that because of the strike declared by the members of the minority union which
threatens a major industry the President deemed it wise to certify the controversy to the Court of Industrial
Relations for adjudication. This is the power that the law gives to the President the propriety of its exercise
being a matter that only devolves upon him. The same is not the concern of the industrial court. What
matters is that by virtue of the certification made by the President the case was placed under the jurisdiction
of said court. (Emphasis supplied)
To certify a labor dispute to the CIR is the prerogative of the President under the law, 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 (Rizal Cement Co., Inc. v. Rizal Cement Workers Union (FFW), et al., G.R. No. L-12747, July
30, 1960). Once the jurisdiction is acquired pursuant to the presidential certification, the CIR may exercise
its broad powers as provided in Commonwealth Act 103. All phases of the labor dispute and the employer-
employee relationship may be threshed out before the CIR, and the CIR may issue such order or orders as
may be necessary to make effective the exercise of its jurisdiction. The parties involved in the case may
appeal to the Supreme Court from the order or orders thus issued by the CIR.
And so, in the instant case, when the President took into consideration that the University "has some 18,000
students and employed approximately 500 faculty members", that `the continued disruption in the operation
of the University will necessarily prejudice the thousand of students", and that "the dispute affects the
national interest",7and certified the dispute to the CIR, it is not for the CIR nor this Court to pass upon the
correctness of the reasons of the President in certifying the labor dispute to the CIR.
The third issue raised by the University refers to the question of the legality of the return-to-work order (of
March 30, 1963 in Case 41-IPA) and the order implementing the same (of April 6, 1963). It alleges that the
orders are illegal upon the grounds: (1) that Republic Act No. 875, supplementing Commonwealth Act No.
103, has withdrawn from the CIR the power to issue a return-to-work order; (2) that the only power granted
by Section 10 of Republic Act No. 875 to the CIR is to issue an order forbidding the employees to strike or
forbidding the employer to lockout the employees, as the case may be, before either contingency had
become a fait accompli; (3) that the taking in by the University of replacement professors was valid, and the
return-to-work order of March 30, 1963 constituted impairment of the obligation of contracts; and (4) the
CIR could not issue said order without having previously determined the legality or illegality of the strike.
The contention of the University that Republic Act No. 875 has withdrawn the power of the Court of
Industrial Relations to issue a return-to-work order exercised by it under Commonwealth Act No. 103 can
not be sustained. When a case is certified by the President to the Court of Industrial Relations, the case
thereby comes under the operation of Commonwealth Act No. 103, and the Court may exercise the broad
powers and jurisdiction granted to it by said Act. 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. This Court, in
the cases of the Philippine Marine Officers Association vs. The Court of Industrial Relations, Compania
Maritima, et al.; and Compañia Martima, et al. vs. Philippine Marine Radio Officers Association and CIR,
et al., G.R. Nos. L-10095 and L-10115, October 31, 1957, declared:
We cannot subscribe to the above contention. We agree with counsel for the Philippine Radio Officers'
Association that upon certification by the President under Section 10 of Republic Act 875, the case comes
under the operation of Commonwealth Act 103, which enforces compulsory arbitration in cases of labor
disputes in industries indispensable to the national interest when the President certifies the case to the Court
of Industrial Relations. The evident intention of the law is to empower the Court of Industrial Relations to
act in such cases, not only in the manner prescribed under Commonwealth Act 103, but with the same broad
powers and jurisdiction granted by that act. If the Court of Industrial Relations is granted authority to find a
solution to an industrial dispute and such solution consists in the ordering of employees to return back to
work, it cannot be contended that the Court of Industrial Relations does not have the power or jurisdiction to
carry that solution into effect. And of what use is its power of conciliation and arbitration if it does not have
the power and jurisdiction to carry into effect the solution it has adopted? Lastly, if the said court has the
power to fix the terms and conditions of employment, it certainly can order the return of the workers with or
without backpay as a term or condition of employment.
The foregoing ruling was reiterated by this Court in the case of Hind Sugar Co. v. CIR, et al., G.R. No. L-
13364, July 26, 1960.
When a case is certified to the CIR by the President of the Philippines pursuant to Section 10 of Republic
Act No. 875, the CIR is granted authority to find a solution to the industrial dispute; and the solution which
the CIR has found under the authority of the presidential certification and conformable thereto cannot be
questioned (Radio Operators Association of the Philippines vs. Philippine Marine Radio Officers
Association, et al., L-10112, Nov. 29, 1957, 54 O.G. 3218).
Untenable also is the claim of the University that the CIR cannot issue a return-to-work order after strike has
been declared, it being contended that under Section 10 of Republic Act No. 875 the CIR can only prevent a
strike or a lockout — when either of this situation had not yet occurred. But in the case of Bisaya Land
Transportation Co., Inc. vs. Court of Industrial Relations, et al., No. L-10114, Nov. 26, 1957, 50 O.G. 2518,
this Court declared:
There is no reason or ground for the contention that Presidential certification of labor dispute to the CIR is
limited to the prevention of strikes and lockouts. Even after a strike has been declared where the President
believes that public interest demands arbitration and conciliation, the President may certify the ease for that
purpose. The practice has been for the Court of Industrial Relations to order the strikers to work, pending
the determination of the union demands that impelled the strike. There is nothing in the law to indicate that
this practice is abolished." (Emphasis supplied)
Likewise untenable is the contention of the University that the taking in by it of replacements was valid and
the return-to-work order would be an impairment of its contract with the replacements. As stated by the CIR
in its order of March 30, 1963, it was agreed before the hearing of Case 41-IPA on March 23, 1963 that the
strikers would return to work under the status quo arrangement and the University would readmit them, and
the return-to-work order was a confirmation of that agreement. This is a declaration of fact by the CIR
which we cannot disregard. The faculty members, by striking, have not abandoned their employment but,
rather, they have only ceased from their labor (Keith Theatre v. Vachon et al., 187 A. 692). The striking
faculty members have not lost their right to go back to their positions, because the declaration of a strike is
not a renunciation of their employment and their employee relationship with the University (Rex Taxicab
Co. vs. CIR, et al., 40 O.G., No. 13, 138). The employment of replacements was not authorized by the CIR.
At most, that was a temporary expedient resorted to by the University, which was subject to the power of
the CIR to allow to continue or not. The employment of replacements by the University prior to the issuance
of the order of March 30, 1963 did not vest in the replacements a permanent right to the positions they held.
Neither could such temporary employment bind the University to retain permanently the replacements.
Striking employees maintained their status as employees of the employer (Western Castridge Co. v.
National Labor Relations Board, C.C.A. 139 F. 2d 855, 858) ; that employees who took the place of strikers
do not displace them as `employees." ' (National Labor Relations Board v. A. Sartorius & Co., C.C.A. 2,
140 F. 2d 203, 206, 207.)
It is clear from what has been said that the return-to-work order cannot be considered as an impairment of
the contract entered into by petitioner 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 (Article 1700, Civil Code).
Likewise unsustainable is the contention of the University that the Court of Industrial Relations could not
issue the return-to-work order without having resolved previously the issue of the legality or illegality of the
strike, citing as authority therefor the case of Philippine Can Company v. Court of Industrial Relations, G.R.
No. L-3021, July 13, 1950. The ruling in said case is not applicable to the case at bar, the facts and
circumstances being very different. The Philippine Can Company case, unlike the instant case, did not
involve the national interest and it was not certified by the President. In that case the company no longer
needed the services of the strikers, nor did it need substitutes for the strikers, because the company was
losing, and it was imperative that it lay off such laborers as were not necessary for its operation in order to
save the company from bankruptcy. This was the reason of this Court in ruling, in that case, that the legality
or illegality of the strike should have been decided first before the issuance of the return-to-work order. The
University, in the case before Us, does not claim that it no longer needs the services of professors and/or
instructors; neither does it claim that it was imperative for it to lay off the striking professors and instructors
because of impending bankruptcy. On the contrary, it was imperative for the University to hire replacements
for the strikers. Therefore, the ruling in the Philippine Can case that the legality of the strike should be
decided first before the issuance of the return-to-work order does not apply to the case at bar. Besides, as
We have adverted to, the return-to-work order of March 30, 1963, now in question, was a confirmation of an
agreement between the University and the Faculty Club during a prehearing conference on March 23, 1963.
The University also maintains that there was no more basis for the claim of the members of the Faculty Club
to return to their work, as their individual contracts for teaching had expired on March 25 or 31, 1963, as the
case may be, and consequently, there was also no basis for the return-to-work order of the CIR because the
contractual relationships having ceased there were no positions to which the members of the Faculty Club
could return to. This contention is not well taken. This argument loses sight of the fact that when the
professors and instructors struck on February 18, 1963, they continued to be employees of the University for
the purposes of the labor controversy notwithstanding the subsequent termination of their teaching contracts,
for Section 2(d) of the Industrial Peace Act includes among employees "any individual whose work has
ceased a consequence of, or in connection with, any current labor dispute or of any unfair labor practice and
who has not obtained any other substantially equivalent and regular employment."
The question raised by the University was resolved in a similar case in the United States. In the case of
Rapid Roller Co. v. NLRB 126 F. 2d 452, we read:
On May 9, 1939 the striking employees, eighty-four in number, offered to the company to return to their
employment. The company believing it had not committed any unfair labor practice, refused the employees'
offer and claimed the right to employ others to take the place of the strikers, as it might see fit. This
constituted discrimination in the hiring and tenure of the striking employees. When the employees went out
on a strike because of the unfair labor practice of the company, their status as employees for the purpose of
any controversy growing out of that unfair labor practice was fixed. Sec. 2 (3) of the Act. Phelps Dodge
Corp. v. National Labor Relations Board, 313 U.S. 177, 61 S. Ct. 845, 85. L. ed. 1271, 133 A.L.R. 1217.
For the purpose of such controversy they remained employees of the company. The company contended that
they could not be their employees in any event since the "contract of their employment expired by its own
terms on April 23, 1939."
In this we think the company is mistaken for the reason we have just pointed out, that the status of the
employees on strike became fixed under Sec. 2 (3) of the Act because of the unfair labor practice of the
company which caused the strike.
The University, furthermore, claims that the information for indirect contempt filed against the officers of
the University (Case No. V-30) as well as the order of April 29, 1963 for their arrest were improper,
irregular and illegal because (1) the officers of the University had complied in good faith with the return-to-
work order and in those cases that they did not, it was due to circumstance beyond their control; (2) the
return-to-work order and the order implementing the same were illegal; and (3) even assuming that the order
was legal, the same was not Yet final because there was a motion to reconsider it.
Again We find no merit in this claim of Petitioner. We have already ruled that the CIR had jurisdiction to
issue the order of March 30, 1963 in CIR Case 41-IPA, and the return-to-work provision of that order is
valid and legal. Necessarily the order of April 6, 1963 implementing that order of March 30, 1963 was also
valid and legal.
Section 6 of Commonwealth Act No. 103 empowers the Court of Industrial Relations of any Judge thereof
to punish direct and indirect contempts as provided in Rule 64 (now Rule 71) of the Rules of Court, under
the same procedure and penalties provided therein. Section 3 of Rule 71 enumerates the acts which would
constitute indirect contempt, among which is "disobedience or resistance to lawful writ, process, order,
judgment, or command of a court," and the person guilty thereof can be punished after a written charge has
been filed and the accused has been given an opportunity to be heard. The last paragraph of said section
provides:
But nothing in this section shall be so construed as to prevent the court from issuing process to bring the
accused party into court, or from holding him in custody pending such proceedings.
The provision authorizes the judge to order the arrest of an alleged contemner (Francisco, et al. v. Enriquez,
L-7058, March 20, 1954, 94 Phil., 603) and this, apparently, is the provision upon which respondent Judge
Bautista relied when he issued the questioned order of arrest.
The contention of petitioner that the order of arrest is illegal is unwarranted. The return-to-work order
allegedly violated was within the court's jurisdiction to issue.
Section 14 of Commonwealth Act No. 103 provides that in cases brought before the Court of Industrial
Relations under Section 4 of the Act (referring to strikes and lockouts) the appeal to the Supreme Court
from any award, order or decision shall not stay the execution of said award, order or decision sought to be
reviewed unless for special reason the court shall order that execution be stayed. Any award, order or
decision that is appealed is necessarily not final. Yet under Section 14 of Commonwealth Act No. 103 that
award, order or decision, even if not yet final, is executory, and the stay of execution is discretionary with
the Court of Industrial Relations. In other words, the Court of Industrial Relations, in cases involving strikes
and lockouts, may compel compliance or obedience of its award, order or decision even if the award, order
or decision is not yet final because it is appealed, and it follows that any disobedience or non-compliance of
the award, order or decision would constitute contempt against the Court of Industrial Relations which the
court may punish as provided in the Rules of Court. This power of the Court of Industrial Relations to
punish for contempt an act of non-compliance or disobedience of an award, order or decision, even if not yet
final, is a special one and is exercised only in cases involving strikes and lockouts. And there is reason for
this special power of the industrial court because in the exercise of its jurisdiction over cases involving
strikes and lockouts the court has to issue orders or make decisions that are necessary to effect a prompt
solution of the labor dispute that caused the strike or the lockout, or to effect the prompt creation of a
situation that would be most beneficial to the management and the employees, and also to the public —
even if the solution may be temporary, pending the final determination of the case. Otherwise, if the
effectiveness of any order, award, or decision of the industrial court in cases involving strikes and lockouts
would be suspended pending appeal then it can happen that the coercive powers of the industrial court in the
settlement of the labor disputes in those cases would be rendered useless and nugatory.
The University points to Section 6 of Commonwealth Act No. 103 which provides that "Any violation of
any order, award, or decision of the Court of Industrial Relations shall after such order, award or decision
has become final, conclusive and executory constitute contempt of court," and contends that only the
disobedience of orders that are final (meaning one that is not appealed) may be the subject of contempt
proceedings. We believe that there is no inconsistency between the above-quoted provision of Section 6 and
the provision of Section 14 of Commonwealth Act No. 103. It will be noted that Section 6 speaks of order,
award or decision that is executory. By the provision of Section 14 an order, award or decision of the Court
of Industrial Relations in cases involving strikes and lockouts are immediately executory, so that a violation
of that order would constitute an indirect contempt of court.
We believe that the action of the CIR in issuing the order of arrest of April 29, 1963 is also authorized under
Section 19 of Commonwealth Act No. 103 which provides as follows:
SEC. 19. Implied condition in every contract of employment.—In every contract of employment whether
verbal or written, it is an implied condition that when any dispute between the employer and the employee
or laborer has been submitted to the Court of Industrial Relations for settlement or arbitration pursuant to
the provisions of this Act . . . and pending award, or decision by the Court of such dispute . . . the employee
or laborer shall not strike or walk out of his employment when so enjoined by the Court after hearing and
when public interest so requires, and if he has already done so, that he shall forthwith return to it, upon order
of the Court, which shall be issued only after hearing when public interest so requires or when the dispute
cannot, in its opinion, be promptly decided or settled; and if the employees or laborers fail to return to work,
the Court may authorize the employer to accept other employees or laborers. A condition shall further be
implied that while such dispute . . . is pending, the employer shall refrain from accepting other employees or
laborers, unless with the express authority of the Court, and shall permit the continuation in the service of
his employees or laborers under the last terms and conditions existing before the dispute arose. . . . A
violation by the employer or by the employee or laborer of such an order or the implied contractual
condition set forth in this section shall constitute contempt of the Court of Industrial Relations and shall be
punished by the Court itself in the same manner with the same penalties as in the case of contempt of a
Court of First Instance. . . .
We hold that the CIR acted within its jurisdiction when it ordered the arrest of the officers of the University
upon a complaint for indirect contempt filed by the Acting Special Prosecutor of the CIR in CIR Case V-30,
and that order was valid. Besides those ordered arrested were not yet being punished for contempt; but,
having been charged, they were simply ordered arrested to be brought before the Judge to be dealt with
according to law. Whether they are guilty of the charge or not is yet to be determined in a proper hearing.
Let it be noted that the order of arrest dated April 29, 1963 in CIR Case V-30 is being questioned in Case
G.R. No. L-21278 before this Court in a special civil action for certiorari. The University did not appeal
from that order. In other words, the only question to be resolved in connection with that order in CIR Case
V-30 is whether the CIR had jurisdiction, or had abused its discretion, in issuing that order. We hold that the
CIR had jurisdiction to issue that order, and neither did it abuse its discretion when it issued that order.
In Case G.R. No. L-21462 the University appealed from the order of Judge Villanueva of the CIR in Case
No. 1183-MC, dated April 6, 1963, granting the motion of the Faculty Club to withdraw its petition for
certification election, and from the resolution of the CIR en banc, dated June 5, 1963, denying the motion to
reconsider said order of April 6, 1963. The ground of the Faculty Club in asking for the withdrawal of that
petition for certification election was because the issues involved in that petition were absorbed by the
issues in Case 41-IPA. The University opposed the petition for withdrawal, but at the same time it moved
for the dismissal of the petition for certification election.
It is contended by the University before this Court, in G.R. L-21462, that the issues of employer-employee
relationship between the University and the Faculty Club, the alleged status of the Faculty Club as a labor
union, its majority representation and designation as bargaining representative in an appropriate unit of the
Faculty Club should have been resolved first in Case No. 1183-MC prior to the determination of the issues
in Case No. 41-IPA, and, therefore, the motion to withdraw the petition for certification election should not
have been granted upon the ground that the issues in the first case were absorbed in the second case.
We believe that these contentions of the University in Case G.R. No. L-21462 have been sufficiently
covered by the discussion in this decision of the main issues raised in the principal case, which is Case G.R.
No. L-21278. After all, the University wanted CIR Case 1183-MC dismissed, and the withdrawal of the
petition for certification election had in a way produced the situation desired by the University. After
considering the arguments adduced by the University in support of its petition for certiorari by way of
appeal in Case G.R. No. L-21278, We hold that the CIR did not commit any error when it granted the
withdrawal of the petition for certification election in Case No. 1183-MC. The principal case before the CIR
is Case No. 41-IPA and all the questions relating to the labor disputes between the University and the
Faculty Club may be threshed out, and decided, in that case.
In Case G.R. No. L-21500 the University appealed from the order of the CIR of March 30, 1963, issued by
Judge Bautista, and from the resolution of the CIR en banc promulgated on June 28, 1963, denying the
motion for the reconsideration of that order of March 30, 1963, in CIR Case No. 41-IPA. We have already
ruled that the CIR has jurisdiction to issue that order of March 30, 1963, and that order is valid, and We,
therefore, hold that the CIR did not err in issuing that order of March 30, 1963 and in issuing the resolution
promulgated on June 28, 1963 (although dated May 7, 1963) denying the motion to reconsider that order of
March 30, 1963.
IN VIEW OF THE FOREGOING, the petition for certiorari and prohibition with preliminary injunction in
Case G.R. No. L-21278 is dismissed and the writs prayed for therein are denied. The writ of preliminary
injunction issued in Case G.R. No. L-21278 is dissolved. The orders and resolutions appealed from, in
 Cases Nos. L-21462 and L-21500, are affirmed, with costs in these three cases against the petitioner-
appellant Feati University. It is so ordered.
Concepcion, C.J., Dizon, Regala, Makalintal, Bengzon, J.P., Sanchez and Castro, JJ., concur.
Reyes, J.B.L., J., concurs but reserves his vote on the teacher's right to strike.

Footnotes
1
As quoted from the writ of preliminary injunction issued by this Court.
2
As quoted from the order of April 6, 1963.
3 Petitioner's brief p. 29; also pp. 8-9 petitioner's reply brief.
4
See order as copied on p. 118 of petitioner's brief.
5
We have pointed out that this is not a unanimous view of this Court.
5a
See p. 140, Record of G. R. No. L-21278.
6 Petitioner's Brief, pp. 1, 2, 3, 7 and 8.
7Words in quotation marks are as quoted from the letter of certification of the President dated March 21,
1963 addressed to the Presiding Judge of the CIR.

Gold City vs. NLRC, 245 SCRA 627, GR L-103560, Jul. 6, 1995

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 103560 July 6, 1995

GOLD CITY INTEGRATED PORT SERVICE, INC. (INPORT), petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (Fifth Division) ADELO EBUNA, EMMANUEL
VALMORIDA, RODOLFO PEREZ, ROGER ZAGADO, MARCOS GANZAN, AND REY VALLE,
(WILFREDO DAHAN, ROGELIO VILLAFUERTE, WILFREDO AMPER, RICARDO ABA,
YOLITO AMBUS, FIDEL CALIO, VICENTE CAHATOL, SOTECO CUENCA, NICOLAS
DALAGUAN, BALBINO FAJARDO, ROLANDO JAMILA, RICARDO LAURETO, RUDY
LAURETO, QUIRICO LEJANIO, OSCAR LAPINIG, FELIPE LAURETE, JESUSTUDY OMISOL,
ZOSIMO OMISOL, PEDRO SUAREZ, SATURNINO SISIBAN and MANUEL
YANEZ), respondents.
G.R. No. 103599 July 6, 1995
ADELO EBUNA, WILFREDO DAHAN, RICARDO LAURETO, REY VALLE, VICENTE
CAHATOL, MARCOS GANZAN, RODOLFO PEREZ, ROEL SAA, ROGELIO VILLAFUERTE,
MANUEL YANEZ, WILFREDO AMPER, QUIRECO LEJANO, EMMANUEL VALMORIA,
ROLANDO JAMILLA, NICOLAS DALAGUAN, BALBINO FAJARDO, PEDRO SUAREZ,
ELPIDIO ESTROGA, RUBEN PAJO, JESUSTODY OMISOL, RICARDO ABA, FIDEL CALIO,
SATURNINO SESYBAN, RUDY LAURETO, OSCAR LAPINIG, FELIPE LAURENTE, ROGER
ZAGADO, SOTECO CUENCA, FIDEL ESLIT, ZOSIMO OMISOL, ANGEL BERNIDO, and
MICHAEL YAGOTYOT, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, FIFTH DIVISION, and GOLD CITY
INTEGRATED PORT SERVICES, INC. (INPORT), respondents.

ROMERO, J.:
Should separation pay and backwages be awarded by public respondent NLRC to participants of an illegal
strike? This is the core issue to be decided in these two petitions.
Gold City Integrated Port Service, Inc. (INPORT) filed a petition for certiorari against the National Labor
Relations Commission (NLRC) assailing the latter's decision in "Gold City Integrated Port Services, Inc. v.
Adelo Ebuna, et al." (NLRC RAB X Case No. 5-0405-85) with twenty-seven private respondents (G.R. No.
103599).1 This petition has been consolidated with G.R. No. 103599 where the petitioners are the private
respondents in instant case and the private respondent is INPORT. For the sake of clarity, INPORT shall be
denominated in the case at bench as the petitioner and the employees as private respondents.
Instant case arose from the following facts:
Early in the morning of April 30, 1985, 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.
On the same morning, 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.
On May 7, 1985, 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.2
Counsel for private respondents filed a manifestation that petitioner required prior screening conducted by
the MLU-FFW before the remaining strikers could be accepted back to work.
Meanwhile, counsel for the Macajalar Labor Union (MLU-FFW) filed a "Motion to Drop Most of the Party
Respondents From the Above Entitled Case." The 278 employees on whose behalf the motion was filed,
claimed that they were duped or tricked into signing the individual notices of strike. After discovering this
deception and verifying that the strike was staged by a minority of the union officers and members and
without the approval of, or consultation with, majority of the union members, they immediately withdrew
their notice of strike and returned to work.
The petitioner INPORT, not having interposed any objection, the Labor Arbiter, in his decision dated July
23, 1985, granted their prayer to be excluded as respondents in the complaint for illegal strike. Moreover,
petitioner's complaint was directed against the 31 respondents who did not return to work and continued
with the strike.
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 dispositive portion of the decision reads:
IN VIEW OF THE FOREGOING, it is hereby ordered that the strike undertaken by the officers and
majority union members of Macajalar Labor Union-FFW is ILLEGAL contrary to Article 264 of the Labor
Code, as amended. Our conclusion on the employment status of the illegal strikers is subject to our
discussion above.6
Both petitioner and private respondents filed motions for reconsideration, which public respondent NLRC
treated as appeals.7
On January 14, 1991, the NLRC affirmed with modification8 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. The
decretal portion of the Resolution reads:
WHEREFORE, the decision appealed from is Affirmed with modification in accordance with the foregoing
resolution. Complainant INPORT is hereby ordered, in lieu of reinstatement, to pay respondents the
equivalent of twelve (12) months salaries each as separation pay. Complainant is further ordered to pay
respondents two (2) years backwages based on their last salaries, without qualification or deduction. The
appeal of complainant INPORT is Dismissed for lack of merit.9
Upon petitioner's motion for reconsideration, public respondent modified the above resolution on December
12, 1991. 10
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.
The dispositive portion of the assailed Resolution reads:
WHEREFORE, the resolution of January 14, 1991 is Modified reducing the award for separation pay to six
(6) months each in favor of respondents, inclusive of lawful benefits as well as those granted under the
CBA, if any, based on the latest salary of respondents, as and by way of financial assistance while the award
for backwages is Deleted and Set Aside. In lieu thereof, respondents are granted compensation for their
sudden loss of employment in the sum of P1,000.00 each. The motion of respondents to implead PPA as
third-party respondent is Noted. Except for this modification the rest of the decision sought to be
reconsidered shall stand. 11
In the instant petitions for certiorari, petitioner alleges that public respondent Commission committed grave
abuse of discretion in awarding private respondents separation pay and backwages despite the declaration
that the strike was illegal.
On the other hand, private respondents, in their petition, assail the reduction of separation pay and deletion
of backwages by the NLRC as constituting grave abuse of discretion.
They also allege that the Resolution of January 14, 1991 could not be reconsidered after the unreasonable
length of time of eleven months.
Before proceeding with the principal issues raised by the parties, it is necessary to clarify public
respondent's statements concerning the strike staged by INPORT's employees.
In its resolution dated January 14, 1991, the NLRC held that the facts prevailing in the case at bench require
a relaxation of the rule that the formal requisites for a declaration of a strike are mandatory. Furthermore,
what the employees engaged in was more of a spontaneous protest action than a strike. 12
Nevertheless, the Commission affirmed the Labor Arbiter's decision which declared the strike illegal.
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.
As we stated in the case of National Federation of Sugar Workers v. Ovejera, 17 the language of the law
leaves no room for doubt that the cooling-off period and the seven-day strike ban after the strike-vote report
were intended to be mandatory. 18
Article 265 of the Labor Code reads, inter alia:
(i)t SHALL be unlawful for any labor organization . . . to declare a strike . . . without first having filed the
notice required in the preceding Article or without the necessary strike vote first having been obtained and
reported to the Ministry. (Emphasis ours)
In explaining the above provision, we said:
In requiring a strike notice and a cooling-off period, the avowed intent of the law is to provide an
opportunity for mediation and conciliation. It thus directs the MOLE to exert all efforts at mediation and
conciliation to effect a voluntary settlement' during the cooling-off period. . . .
xxx xxx xxx
The cooling-off period and the 7-day strike ban after the filing of a strike-vote report, as prescribed in Art.
264 of the Labor Code, are reasonable restrictions and their imposition is essential to attain the legitimate
policy objectives embodied in the law. We hold that they constitute a valid exercise of the police power of
the state. 19
From the foregoing, it is patent that the strike on April 30, 1985 was illegal for failure to comply with the
requirements of the law.
The effects of such illegal strikes, outlined in Article 265 (now Article 264) of the Labor Code, make a
distinction between workers and union officers who participate therein.
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. 21
The question to be resolved now is what these remaining strikers, considering the circumstances of the case,
are entitled to receive under the law, if any.
Are they entitled, as they claim, to reinstatement or separation pay and backwages?
In his decision, the Labor Arbiter ordered INPORT to reinstate/accept the remaining workers as well as to
accept the remaining union officers after the latter sought reconsideration from INPORT. 22
The NLRC on January 14, 1991, modified the above decision by ordering INPORT to pay private
respondents the equivalent of twelve months in salary as separation pay in lieu of reinstatement and two
years' backwages. 23
On reconsideration, public respondent modified its original award and reduced the separation pay to six
months, deleted the award for backwages and instead awarded P1,000.00 as compensation for their sudden
loss of employment. 24
Under the law, an employee is entitled to reinstatement and to his full backwages when he is unjustly
dismissed. 25
Reinstatement means restoration to a state or condition from which one had been removed or separated.
Reinstatement and backwages are separate and distinct reliefs given to an illegally dismissed employee. 26
Separation pay is awarded when reinstatement is not possible, due, for instance, to strained relations
between employer and employee.
It is also given as a form of financial assistance when a worker is dismissed in cases such as the installation
of labor saving devices, redundancy, retrenchment to prevent losses, closing or cessation of operation of the
establishment, or in case the employee was found to have been suffering from a disease such that his
continued employment is prohibited by law. 27
Separation pay is a statutory right defined as the amount that an employee receives at the time of his
severance from the service and is designed to provide the employee with the wherewithal during the period
that he is looking for another employment. 28 It is oriented towards the immediate future, the transitional
period the dismissed employee must undergo before locating a replacement job. 29
Hence, an employee dismissed for causes other than those cited above is not entitled to separation
pay. 30Well-settled is it that separation pay shall be allowed only in those instances where the employee is
validly dismissed
for causes other than serious misconduct or those reflecting on his moral character. 31
Backwages, on the other hand, is a form of relief that restores the income that was lost by reason of
unlawful dismissal. 32
It is clear from the foregoing summary of legal provisions and jurisprudence that there must generally be
unjust or illegal dismissal from work, before reinstatement and backwages may be granted. And in cases
where reinstatement is not possible or when dismissal is due to valid causes, separation pay may be granted.
Private respondents contend that they were terminated for failure to submit to the controversial "screening"
requirement.
Public respondent Commission took the opposite view and held:
As the evidence on record will show, respondents were not actually terminated from the service. They were
merely made to submit to a screening committee as a prerequisite for readmission to work. While this
condition was found not wholly justified, the fact remains that respondents who are resistant to such
procedure are partly responsible for the delay in their readmission back to work. Thus, We find justifiable
basis in further modifying our resolution of January 14, 1991 in accordance with the equities of the case.
We shall therefore recall the award for backwages for lack of factual and legal basis. The award for
separation pay shall likewise (be) reasonably reduced. Normally, severance benefit is granted as an
alternative remedy to reinstatement. And since there is no dismissal to speak of, there is no basis for
awarding reinstatement as a legal remedy. In lieu thereof, We shall grant herein respondents separation pay
as and by way of financial assistance in the nature of an "equitable relief". 33
We find that private respondents were indeed dismissed when INPORT refused to accept them back to work
after the former refused to submit to the "screening" process.
Applying the law (Article 264 of the Labor Code) which makes a distinction, we differentiate between the
union members and the union officers among private respondents in granting the reliefs prayed for.
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.
However, the above disquisition is now considered moot and academic and cannot be effected in view of a
manifestation filed by INPORT dated May 15, 1987. 36 In said Manifestation, it attached a Certification by
the President of the Macajalar Labor Union (MLU-FFW) to the effect that the private
respondents/remaining strikers have ceased to be members of said union. The MLU-FFW had an existing
collective bargaining agreement with INPORT containing a union security clause. Article 1, Section 2(b) of
the CBA provides:
The corporation shall discharge, dismiss or terminate any employee who may be a member of the Union but
loses his good standing with the Union and or corporation, upon proper notice of such fact made by the
latter; provided, however, . . . after they shall have received the regular appointment as a condition for his
continued employment with the corporation. . . . 37
Since private respondents (union members) are no longer members of the MLU, they cannot be reinstated.
In lieu of reinstatement, which was a proper remedy before May 1987 when they were dismissed from the
union, we award them separation pay. We find that to award one month salary for every year of service until
1985, after April of which year they no longer formed part of INPORT's productive work force partly
through their own fault, is a fair settlement.
Finally, there is no merit in INPORT's statement that a Resolution of the NLRC cannot be modified upon
reconsideration after the lapse of an unreasonable period of time. Under the present circumstances, a period
of eleven months is not an unreasonable length of time. The Resolution of the public respondent dated
January 14, 1991 did not acquire finality in view of the timely filing of a motion for reconsideration. Hence,
the Commission's modified Resolution issued on December 12, 1991 is valid and in accordance with law.
In sum, 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.
The NLRC's award of separation pay as "equitable relief" and P1,000.00 as compensation should be deleted,
these being incompatible with our findings detailed above.
WHEREFORE, from the foregoing premises, the petition in G.R. No. 103560 ("Gold City Integrated Port
Service Inc. v. National Labor Relations Commission, et al.") is GRANTED. One month salary for each
year of service until 1985 is awarded to private respondents who were not union officers as separation pay.
The petition in G.R. No. 103599 ("Adelo Ebuna, et al. v. National Labor Relations Commission, et al.") is
DISMISSED for lack of merit. No costs.
SO ORDERED.
Feliciano, Melo, Vitug and Francisco, JJ., concur.

Footnotes
1 Namely, Adelo Ebuna, Wilfredo Dahan, Ricardo Laureto, Rey Valle, Vicente Cahatol, Marcos Ganzan,
Rodolfo Perez, Roel Saa, Rogelio Villafuerte, Manuel Yanez, Wilfredo Amper, Quireco Lejano, Emmanuel
Valmoria, Rolando Jamilla, Nicolas Dalaguan, Balbino Fajardo, Pedro Suarez, Elpidio Estroga, Ruben Pajo,
Jesustody Omisol, Ricardo Aba, Fidel Calio, Saturnino Sesyban, Rudy Laureto, Oscar Lapinig, Felipe
Laurente, Roger Zagado, Soteco Cuenca, Fidel Eslit, Zosimo Omisol, Angel Bernido and Michael Yagotyot.
2 Of the thirty-one remaining strikers, four have already died, leaving the twenty-seven respondents herein.
3 Now Article 263.
4 Decision of Executive Labor Arbiter Ildefonso O. Agbuya, dated July 23, 1985, NLRC RABX Case No.
5-0405-85. Rollo, p. 57.
5 Decision of the Labor Arbiter, p. 11; Rollo, p. 66.
6 Ibid., p. 66.
7 On May 20, 1987, petitioner filed a Manifestation to the effect that the 32 remaining striking employees
have ceased to be members of the Macajalar Labor Union — FFW, per Certification dated May 15, 1987 by
the President of MLU-FFW. Rollo, p. 84.
8 Resolution penned by Presiding Commissioner Musib M. Buat and concurred in by Commissioner Leon
G. Gonzaga, Jr., Commissioner Oscar N. Abella, on leave. Rollo, p. 85.
9 Rollo, p. 105.
10 Penned by Presiding Commissioner Musib M. Buat, with Commissioners Oscar N. Abella and Leon G.
Gonzaga, Jr., concurring. Rollo, p. 119.
11 Rollo, p. 124.
12 Rollo, pp. 96-98.
13 Bisig ng Manggagawa sa Concrete Aggregates Inc. v. NLRC, G.R. No. 105090, September 16, 1993,
226 SCRA 499; Ilaw at Buklod ng Manggagawa v. NLRC, G.R. No. 91980, June 27, 1991, 198 SCRA 586.
14 Labor Code, Article 212 (0).
15 Labor Code, Article 212 (1).
16 Article 264. Strikes, picketing, and lockouts. —
(c) In cases of bargaining deadlocks, the certified or duly recognized bargaining representative may file a
notice of strike . . . with the Ministry at least thirty (30) days before the intended date thereof. In cases of
unfair labor practices, the period of strike shall be shortened to fifteen (15) days; and in the absence of a
duly certified or recognized bargaining representative, the notice of strike may be filed by any legitimate
labor organization in behalf of its members.
xxx xxx xxx
(f) A decision to declare a strike must be approved by at least two-thirds (2/3) of the total union
membership in the bargaining unit concerned obtained by secret ballot in meetings or referenda. . . . In every
case, the union . . . shall furnish the Ministry the results of the voting at least seven (7) days before the
intended strike . . . , subject to the cooling-off period herein provided. (Emphasis supplied)
17 G.R. No. L-59743, May 31, 1982, 114 SCRA 354.
18 Ibid., p. 365.
19 Ibid., at p. 367.
20 Labor Code, Article 265 (now Article 264).
21 The screening was allegedly requested by the Macajalar Labor Union of petitioner INPORT upon the
belief that a competing union, the National Federation of Labor, influenced its members into staging the
strike. INPORT points out that it agreed to the screening requirement because it merely wanted to avoid
further friction with the union (MLU-FFW). Rollo, pp. 120-121.
22 Rollo, p. 66.
23 Rollo, p. 105.
24 Rollo, p. 124.
25 Labor Code, Article 279.
26 Torillo v. Leogardo, G.R. No. 77205, May 27, 1991, 197 SCRA 471; Indophil Acrylic Mfg. Corp. v.
NLRC, G.R. No. 96488, September 27, 1993, 226 SCRA 723.
27 Labor Code, Articles 283 and 284; Lemery Savings and Loan Bank v. NLRC, G.R. No. 96439, January
27, 1992, 205 SCRA 492; Banco Filipino Savings and Mortgage Bank v. NLRC, G.R. No. 82135, August
20, 1990, 188 SCRA 700.
28 A Prime Security Services Inc. v. NLRC, G.R. No. 93476, March 19, 1993, 220 SCRA 142 citing PLDT
v. NLRC 164 SCRA 671, Del Castillo v. NLRC, 176 SCRA 229 and Cosmopolitan Funeral Homes v.
Maalat, 187 SCRA 108; Aquino v. NLRC, G.R. No. 87653, February 11, 1992, 206 SCRA 118.
29 Escareal v. NLRC, G.R. No. 99359, September 2, 1992, 213 SCRA 472.
30 Article 279 and 282; Rule 1, Section 7, Book VI, Omnibus Implementing Rules of the Labor Code.
31 PLDT v. NLRC, G.R. No. L-80609, Aug. 23, 1988, 164 SCRA 671; Sampaguita Garments Corp. v.
NLRC, G.R. No. 102406, June 17, 1994, 233 SCRA 260; Cathedral School of Technology, G.R. No.
101483, October 13, 1991, 214 SCRA 551; Baguio Country Club v. NLRC, G.R. No. 102397, September 4,
1992, 213 SCRA 664.
32 Escareal v. NLRC, 213 SCRA 472.
33 Rollo, p. 123.
34 Labor Code, Article 264.
35 Article 264.
(a) . . . Any 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
his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute
sufficient ground for termination of his employment, even if a replacement had been hired by the employer
during such lawful strike
36 Rollo, p. 84.
37 Petition, p. 15; Rollo, p. 15.
RCPI vs. Phil. Comm, 65 SCRA 82, GR L-37662, July 15, 1975

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-37662 August 30, 1974

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.

Vicente R. Acsay for petitioner. Ceferino R. Magat for respondent Federation (FCWF). Ricardo L.
Moldez for respondent Union (RCPIEU).

Jose K. Manguiat, Jr. for respondent Court.

FERNANDO, J.:pp

The deficiency of this petition, rather marked in character, seeking as it does to set aside an alias writ of execution of a return-to-work
order of respondent Court Of Industrial Relations,1 issued as far back as 1968, was sought to be remedied by the invocation of
Presidential Decree No. 2l.2 This is shown in its prefatory statement: "Aside from the far reaching effects a decision on the issues
ventilated here will have on future cases, this case has important implications because it involves the application and reconciliation of the
provisions of Presidential Decree No. 21 in relation to the enforcement and execution of a "return to work" order, subject matter of this
petition."3 The reliance is misplaced. It is to misread what it provides and to lose sight of what it seeks to attain. Precisely the norm therein
set forth assures further protection to labor. It certainly would stultify its purpose if it can be utilized as a weapon against the very
employees, who for a period of six years had been denied what was granted them by an order, which on its face was immediately
executory. The petition must fail.

The undisputed facts would dislose why stress was laid on the aforesaid Presidential Decree. It
has all the appearances of a last-ditch attempt. From the very petition itself, it may be gleaned that
as far back as September 19, 1967, respondent Philippine Communications Electronics and
Electricity Workers' Federation presented to the petitioner a set of proposals to be embodied in a
collective bargaining agreement. As the response was negative, the main ground being that there
was already an existing collective labor contract, an impasse resulted. It was sought to be
resolved by the Bureau of Labor Relations of the Department of Labor acting as conciliator. The
attempt was unsuccessful.4 A strike was declared on November 17, 1967. The respondent Court
took over as there was an element of an unfair labor practice. In addition, on January 3, 1968, the
Secretary of Labor sent a communication to respondent Court endorsing the labor dispute under
Section 16(c) of the Minimum Wage Law.5There was on February 15, 1968 a motion filed by
respondent labor Union seeking an order of reinstatement pending the resolution of the case on
the merits. It was granted by respondent Court in a resolution of April 23, 1968.6 Apparently, the
return-to-work order was not complied with, as on December 27, 1969, a writ of execution was
issued by the Clerk of Court of respondent Court requiring the reinstatement of the strikers without
loss of seniority.7 Various legal moves were further resorted to by petitioner with the result of
further delaying the implementation of the return-to-work order.8 That led to the issuance of the
order of February 15, 1973, where it took note of the obvious inability of respondent labor union to
submit documentary exhibits in support of the objection to the reinstatement, with the additional
period of grace to do so until February 3, 1973, within which to submit his offer of exhibits in
writing and the counsel for now respondent union three days after receipt of the offer in writing
within which to file his objections. Then the order continued: "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."9 The case was thus deemed submitted for resolution. Then came the resolution of
October 5, 1973 which is the basis of the alias writ of execution. Its dispositive portion reads as
follows: "[Wherefore], the employees numbering 167, each one named in the dispositive portion of
the above report from pp. 11 to 14 hereof, are those who struck against the company on
November 17, 1967 and who are referred to in the Resolution issued on April 23, 1968, and who
should be re-admitted to their respective work during the pendency of this case. The Clerk of
Court is hereby directed to issue immediately an alias and/or amended writ of execution
incorporating therein the names of the aforementioned strikers." 10 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 that its execution was long
overdue, the challenged actuation of respondent Court had all the earmarks of legality. Nor should
the invocation of Presidential Decree No. 21 change matters any. As earlier pointed out, the
misinterpretation sought to be fastened by petitioner on it would frustrate the salutary objective of
an executive determination to foster further the welfare of labor. This petition, as made mention of
at the outset, must fail.

1. The core of the controversy is the enforcement of a return-to-work order pending the final
outcome of a case with respondent Court. It is, in the categorical language of Chief Justice
Makalintal, speaking for the Court in Philippine Air Lines Employees' Association v. Philippine Air
Lines, Inc., 11 immediately effective and executory, notwithstanding the fact that a motion for its
reconsideration has been filed." 12 He cited in support of the above view the cases of Bachrach
Transportation Company, Inc. v. Rural Transit Shop Employees Association, 13 Philippine Long
Distance Telephone Company v. Free Telephone Workers Union, 14 and Philippine Association of
Free Labor Unions v. Salvador. 15 Its very nature, according to him, "lends itself to no other
construction." 16 In the Philippine Air Lines Employees Association v. Philippine Air Lines,
Inc., case, there was a Presidential certification. It does not call for a different conclusion, just
because this case lacks that feature. In the recently decided Philippine American Management
Company, Inc. v. Philippine American Management Employees Association, 17 it was made clear
that the certification need not be presidential but could proceed from the Secretary of Labor in
accordance with his powers under the Minimum Wage Law. So it happened in this case. The
attempt to cast doubt therefore on the validity of the alias writ of execution is doomed to futility.
What was done by respondent Court was precisely to accord respect to authoritative
pronouncements of this Tribunal.

2. Petitioner would allege, too late, defenses that go into the merits. Even assuming their
plausibility, it would be to lose sight of the fact that the return-to-work order was temporary in
character pending the final outcome of a controversy. It would be again to disregard controlling
precedents if, as petitioner would urge on respondent Court, the return-to-work order failed to take
into consideration what it was pleased to call the termination of employment of some of those
therein covered. For it has been the constant holding of this Tribunal from the leading case of Rex
Taxicab Company v. Court of Industrial Relations, 18 that there can be no inference of separation
from the service arising from the mere fact of participation in a strike. As was stressed by Justice
Laurel: "With reference to the contention that the drivers in question, by declaring a strike, either
voluntarily ceased to be employees of the petitioner or gave just cause for their separation, it need
only be stated that the declaration of a strike does not amount to a renunciation of the
employment relation ... ." 19 In affirming the above principle, he cited two American Supreme Court
decisions: National Labor Relations Board v. Mackay Radio and Telegraph Co. 20 and National
Labor Relations v. Forestall Metallurgical Corporation. 21 Since then, the doctrine has been
reiterated time and time again. 22 3. The flimsy and insubstantial character of the petition is thus
exposed. It sought to escape the fate thus foreordained by inviting the attention of this Tribunal to
what it referred to as legal complications arising from the enforcement of the writ of execution
when considered in connection with Presidential Decree No. 21. 23 After noting that it had to get
replacements during the pendency of this case, now still unresolved after five long years, it cited
Section 11 of Presidential Decree No. 21: "No employer may shut down his establishment or
dismiss or terminate the services of regular employees with at least one year of service without
the written clearance of the Secretary of Labor." It would thus be faced, according to its petition,
"with the legal problem of being exposed to violating the provisions of said decree. This is so,
because in the process of complying immediately with the alias writ of execution, for every number
of petitioners who shall be reinstated to their former positions, the corresponding number of
employees who are now holding such positions will be laid off. And laying off or dismissals cannot
be done without the written clearance of the Secretary of Labor. It is foreseen also that written
clearance shall treat of individual cases of employees to be laid off. The process therefore will
involve the [employee] presenting himself to be returned to work, and the securing of the written
clearance for the dismissal of the employee whom he will replace." 24 It would be hard put,
according to it, to make a choice between a possible charge for contempt on the one hand, and
arrest and detention on the other, if it would appear that there was a violation of Presidential
Decree No. 21. The dilemma is more apparent than real. There is no conflict between the
aforesaid presidential decree and the return-to-work order. This is not the occasion to pass upon
the possible adverse effects, if any, on the situation of the replacements. It might be mentioned
that under the circumstances, their tenure could be made to depend on the outcome of the
pending case and whatever valid orders may be issued in the meanwhile by respondent
Court. 25At any rate, it goes without saying that whatever rights they have must be respected. It
certainly does not rule out giving force and effect to an order of the labor tribunal, unfortunately
until now disregarded. Even on the assumption, then, that difficulties would be attendant on the
faithful observance of the return-to-work order, petitioner has nobody to became but itself. As far
back as April 23, 1968, its obligation was clear Instead of yielding obedience, it employed dilatory
tactics to delay its implementation. It cannot thereafter just simply fold its hands and assert that it
still should be allowed to persist in conduct marked by obstinacy. it could amount, if it were
otherwise, to a party benefiting from its own defiance of a lawful order.

Nor is this the only objection to such a contention reached by petitioner. It could be that it is not
fully cognizant of the pernicious consequences which it would spawn if accorded acceptance. A
presidential decree intended to ameliorate still further the conditions of labor would be subjected
to an interpretation not for its benefit but to enable an employer to continue with a conduct that
cannot be characterized as other than a disdainful indifference to a valid order. If, as seems to be
implied in its petition, it is likewise concerned with the fate of the replacements, there is nothing to
prevent it from continuing their employment. That would be, in a way, to atone for its
intransigence. What is more, it would be to accord genuine respect for the intent of Presidential
Decree No. 21. What cannot be overemphasized is that such a decree which has received the
imprimatur of the present Constitution 26 in consonance with the much more detailed provision
therein contained, intended to make a reality of governmental efforts to, protect labor. It is worded
thus:" The State shall afford protection to labor, promote full employment and equality in
employment, ensure equal work opportunities regardless of sex, race, or creed, and regulate the
relations between workers and employers. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of work.
The State may provide for compulsory arbitration." 27

WHEREFORE, the petition for certiorari is dismissed. This decision is executory. Respondent
Court should take the necessary steps to implement this decision with all promptness and
dispatch. Costs against petitioner.

Zaldivar (Chairman), Barredo, Antonio, Fernandez and Aquino, JJ, concur.

Footnotes

1 The other respondents are Philippine Communications Electronics and Electricity

Workers' Federation (PCWF), Radio Communications of the Philippines, Inc.
Employees Union (RCPIEU) and Special Sheriff of the Court of Industrial
Relations.

2 Presidential Decree No. 21 issued on October 14, 1972 created the National
Labor Relations Board.

3 Petition, 1-2.

4 Vide ibid, pars. 6-10.

5 Vide ibid, pars. 11-15.

6 Vide ibid, par. 16.

7 Vide ibid, par. 17.

8 Vide ibid, par. 18-19.

9 Annex D to Petition.

10 Annex E to Petition.

11 L-32740, March 31, 1971, 38 SCRA 372.

12 Ibid, 377.

13 L-26764, July 25, 1967, 20 SCRA 779.

14 L-25420, March 13, 1968, 22 SCRA 1013.

15 L-29471, September 28, 1968, 25 SCRA 393.

16 38 SCRA 372, 377.

 17 L-35254, January 29, 1973, 49 SCRA 194.

18 70 Phil. 621 (1940).

19 Ibid, 631.

20 304 US 333 (1938).

21 306 US 240 (1939).

22 Cf. San Carlos Milling Co. v. Court of Industrial Relations, L-15453, March 17,
1961, 1 SCRA 734; Elizalde Rope Factory v. Social Security Commission,
L-15163, Feb. 28, 1962, 4 SCRA 512; Cromwell Commercial Employees and
Laborers Union v. Court of Industrial Relations, L-19778, Sept. 30, 1964, 12 SCRA
124; Philippine Steam Navigation Co, v. Philippine Marine Officers Guild, L-20667,
Oct. 29, 1965, 15 SCRA 174; Coronal v. Court of Industrial Relations, L-22359,
Aug. 30, 1968, 24 SCRA 990; The Insular Life Assurance Co., Ltd., Employees
Association NATU v. The Insular Life Assurance Co., Ltd., L-25291, Jan. 30, 1971,
37 SCRA 244; East Asiatic Co., Ltd. v. Court of Industrial Relations,
L-29068, Aug. 31, 1971, 40 SCRA 521; Shell Oil Workers' Union v. Shell Company
of the Philippines, L-28607, Feb. 12, 1972, 43 SCRA 224.

23 Cf. Petition, 27.

24 Ibid, 28-29.

25 Cf. Radio Operators Association v. Philippine Marine Radio Officers, 102 Phil.
526 (1957).

26 According to Article XVII, Section 3, paragraph 2 of the present Constitution:

"All proclamations, orders, decrees, instructions, and acts promulgated, issued, or
done by the incumbent President shall be part of the law of the land, and shall
remain valid, legal, binding, and effective even after lifting of martial law or the
ratification of this constitution, unless modified, revoked, or superseded by
subsequent proclamations, orders, decrees, instructions, or other acts of the
incumbent and explicitly modified or repealed by the regular National Assembly."

27 Article II, Section 9 of the Constitution.

Kiok Loy vs. NLRC, 141 SCRA 179, GR L-54334, Jan. 22, 1986

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-54334 January 22, 1986
KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG KILUSAN NG
PAGGAWA (KILUSAN), respondents.
Ablan and Associates for petitioner.
Abdulcadir T. Ibrahim for private respondent.

CUEVAS, J.:
Petition for certiorari to annul the decision 1 of the National Labor Relations Commission (NLRC) dated
July 20, 1979 which found petitioner Sweden Ice Cream guilty of unfair labor practice for unjustified
refusal to bargain, in violation of par. (g) of Article 2492 of the New Labor Code, 3 and declared the draft
proposal of the Union for a collective bargaining agreement as the governing collective bargaining
agreement between the employees and the management.
The pertinent background facts are as follows:
In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa (Union for short), a
legitimate late labor federation, won and was subsequently certified in a resolution dated November 29,
1978 by the Bureau of Labor Relations as the sole and exclusive bargaining agent of the rank-and-file
employees of Sweden Ice Cream Plant (Company for short). The Company's motion for reconsideration of
the said resolution was denied on January 25, 1978.
Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the Company with two copies
of its proposed collective bargaining agreement. At the same time, it requested the Company for its counter
proposals. Eliciting no response to the aforesaid request, the Union again wrote the Company reiterating its
request for collective bargaining negotiations and for the Company to furnish them with its counter
proposals. Both requests were ignored and remained unacted upon by the Company.
Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union, on
February 14, 1979, filed a "Notice of Strike", with the Bureau of Labor Relations (BLR) on ground of
unresolved economic issues in collective bargaining. 5
Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all attempts
towards an amicable settlement failed, prompting the Bureau of Labor Relations to certify the case to the
National Labor Relations Commission (NLRC) for compulsory arbitration pursuant to Presidential Decree
No. 823, as amended. The labor arbiter, Andres Fidelino, to whom the case was assigned, set the initial
hearing for April 29, 1979. For failure however, of the parties to submit their respective position papers as
required, the said hearing was cancelled and reset to another date. Meanwhile, the Union submitted its
position paper. The Company did not, and instead requested for a resetting which was granted. The
Company was directed anew to submit its financial statements for the years 1976, 1977, and 1978.
The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of record, Atty.
Rodolfo dela Cruz. On May 24, 1978, Atty. Fortunato Panganiban formally entered his appearance as
counsel for the Company only to request for another postponement allegedly for the purpose of acquainting
himself with the case. Meanwhile, the Company submitted its position paper on May 28, 1979.
When the case was called for hearing on June 4, 1979 as scheduled, the Company's representative, Mr.
Ching, who was supposed to be examined, failed to appear. Atty. Panganiban then requested for another
postponement which the labor arbiter denied. He also ruled that the Company has waived its right to present
further evidence and, therefore, considered the case submitted for resolution.
On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor Relations
Commission. On July 20, 1979, the National Labor Relations Commission rendered its decision, the
dispositive portion of which reads as follows:
WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty of unjustified refusal to bargain,
in violation of Section (g) Article 248 (now Article 249), of P.D. 442, as amended. Further, the draft
proposal for a collective bargaining agreement (Exh. "E ") hereto attached and made an integral part of this
decision, sent by the Union (Private respondent) to the respondent (petitioner herein) and which is hereby
found to be reasonable under the premises, is hereby declared to be the collective agreement which should
govern the relationship between the parties herein.
SO ORDERED. (Emphasis supplied)
Petitioner now comes before Us assailing the aforesaid decision contending that the National Labor
Relations Commission acted without or in excess of its jurisdiction or with grave abuse of discretion
amounting to lack of jurisdiction in rendering the challenged decision. On August 4, 1980, this Court
dismissed the petition for lack of merit. Upon motion of the petitioner, however, the Resolution of dismissal
was reconsidered and the petition was given due course in a Resolution dated April 1, 1981.
Petitioner Company now maintains that its right to procedural due process has been violated when it was
precluded from presenting further evidence in support of its stand and when its request for further
postponement was denied. Petitioner further contends that the National Labor Relations Commission's
finding of unfair labor practice for refusal to bargain is not supported by law and the evidence considering
that it was only on May 24, 1979 when the Union furnished them with a copy of the proposed Collective
Bargaining Agreement and it was only then that they came to know of the Union's demands; and finally,
that the Collective Bargaining Agreement approved and adopted by the National Labor Relations
Commission is unreasonable and lacks legal basis.
The petition lacks merit. Consequently, its dismissal is in order.
Collective bargaining which is defined as negotiations towards a collective agreement,6 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. So much so that 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.
While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty
to initiate contract negotiation.7 The mechanics of collective bargaining is set in motion only when the
following jurisdictional preconditions are present, namely, (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; (2) proof of majority representation; and (3) a demand to
bargain under Article 251, par. (a) of the New Labor Code . ... all of which preconditions are undisputedly
present in the instant case.
From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no doubt
that the Union has a valid cause to complain against its (Company's) attitude, the totality of which is
indicative of the latter's disregard of, and failure to live up to, what is enjoined by the Labor Code — to
bargain in good faith.
We are in total conformity with respondent NLRC's pronouncement that petitioner Company is GUILTY of
unfair labor practice. It has been indubitably established that (1) respondent Union was a duly certified
bargaining agent; (2) it made a definite request to bargain, accompanied with a copy of the proposed
Collective Bargaining Agreement, to the Company not only once but twice which were left unanswered and
unacted upon; and (3) the Company made no counter proposal whatsoever all of which conclusively
indicate lack of a sincere desire to negotiate. 8 A Company's refusal to make counter proposal if considered
in relation to the entire bargaining process, may indicate bad faith and this is specially true where the
Union's request for a counter proposal is left unanswered. 9 Even during the period of compulsory
arbitration before the NLRC, 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. Petitioner has not at any instance, evinced good faith or willingness to discuss freely and fully
the claims and demands set forth by the Union much less justify its opposition thereto. 10
The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU) vs.
Herald Publications 11 the rule had been laid down that "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 This doctrine was reiterated
anew in Bradman vs. Court of Industrial Relations 12 wherein it was further ruled that "while the law does
not compel the parties to reach an agreement, it does contemplate that both parties will approach the
negotiation with an open mind and make a reasonable effort to reach a common ground of agreement
As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitioner capitalizes on the
issue of due process claiming, that it was denied the right to be heard and present its side when the Labor
Arbiter denied the Company's motion for further postponement.
Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements granted in its
behalf, the claimed denial of due process appeared totally bereft of any legal and factual support. As herein
earlier stated, petitioner had not even honored respondent Union with any reply to the latter's successive
letters, all geared towards bringing the Company to the bargaining table. It did not even bother to furnish or
serve the Union with its counter proposal despite persistent requests made therefor. Certainly, the moves
and overall behavior of petitioner-company were in total derogation of the policy enshrined in the New
Labor Code which is aimed towards expediting settlement of economic disputes. Hence, this Court is not
prepared to affix its imprimatur to such an illegal scheme and dubious maneuvers.
Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining Agreement which
was approved and adopted by the NLRC is a total nullity for it lacks the company's consent, much less its
argument that once the Collective Bargaining Agreement is implemented, the Company will face the
prospect of closing down because it has to pay a staggering amount of economic benefits to the Union that
will equal if not exceed its capital. Such a stand and the evidence in support thereof should have been
presented before the Labor Arbiter which is the proper forum for the purpose.
We agree with the pronouncement that it is not obligatory upon either side of a labor controversy to
precipitately accept or agree to the proposals of the other. But an erring party should not be tolerated and
allowed with impunity to resort to schemes feigning negotiations by going through empty gestures.13 More
so, as in the instant case, where the intervention of the National Labor Relations Commission was properly
sought for after conciliation efforts undertaken by the BLR failed. The instant case being a certified one, it
must be resolved by the NLRC pursuant to the mandate of P.D. 873, as amended, which authorizes the said
body to determine the reasonableness of the terms and conditions of employment embodied in any
Collective Bargaining Agreement. To that extent, utmost deference to its findings of reasonableness of any
Collective Bargaining Agreement as the governing agreement by the employees and management must be
accorded due respect by this Court.
WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued on August 27,
1980, is LIFTED and SET ASIDE.
No pronouncement as to costs.
SO ORDERED.
Concepcion, Jr., (Chairman), Abad Santos, Escolin and Alampay, JJ., concur.

Footnotes
 1 Pages 23-26, Rollo.
2 Previously Article 248 renumbered as Article 249 by Batas Pambansa Blg. 70, May 1, 1980.
3 P.D. 442, as amended.
4 Thru a letter attached thereto to BLR Resolution.
5 BLR-S-2-692-79.
6 Pampanga Bus Co. vs. Pambusco Employees, 68 Phil. 541.
7 National Labor Relations Board vs. Columbian Enameling & Stamping Co., 306 U.S. 292 '83 L. Ed.
660,59 Ct 501 (1939).
8 National Labor Relations Board vs. George Piling & Sons Co., 119 F. (2nd) 32.
9 Teller, II Labor Disputes & Collective Bargaining 889, citing Glove Cotton Mills vs. NLRB 103 F. (2nd)
91.
10 Herald Delivery Carriers Union (PAFLU) vs. Herald Publications, Inc., 55 SCRA 713 (1974), citing
NLRB vs. Piling & Sons, Co., 119 F. (2nd) 32 (1941).
11 55 SCRA 713 (1974).
12 78 SCRA 10 (1977), citing Prof. Archibald Cox, "The Duty to Bargain in Good Faith", 71 Harv. Law
Rev. 1401, 1405 (1934).
13 Rothenberg on Labor Relations, p. 435m citing NLRB vs. Boss Mfg. Co., 107 F. (2nd) 574; NLRB vs.
Sunshine Mining Co., 110 F (2nd) 780; NLRB vs. Condenser Corp., 128 F. (2nd) 67.

Mayor vs. Macaraig, GR No. 87211, March 5, 1991

Republic of the Philippines

SUPREME COURT
Manila
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."1The 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 — 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 effected on the nature, composition, 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 bothadministrative 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.
Fernan, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
Sarmiento, Griño-Aquino, Medialdea and Regalado, JJ., concur.
Davide, Jr., J., took no part

Footnotes
1
Emphasis supplied.
2
Emphasis supplied.
3 Sec. 35: SEE footnote 1 and related text.
4
Art. IX, B, Sec. 2(3); and as regards private employment, ART. XII, Sec. 3 inter alia provides that all
workers "shall be entitled to security of tenure, humane conditions or work, and a living wage. . . ."
5
Art. IX, B, Sec. 2(1), 1987 Constitution.
6Dario v. Mison, G.R. No. 81954 (and G.R. Nos. 81967, 82023, 83737, 85310, 85335 and 86241), Aug. 8,
1989, citing Ginson v. Municipality of Murcia, 157 SCRA 1; de la Llana v. Alba, 112 SCRA 294; Cruz v.
Primicias, 23 SCRA 998; see also Manalang v. Quitoriano, 96 Phil. 903, 907 holding inter alia that RA 761
had expressly abolished the Placement Bureau and, by necessary implication, the office of Director thereof.
7
But of those first appointed, three were to hold office for four (4) years and another three, for two (2)
years, without prejudice to reappointment.
8
Even prior to RA 6715, the grant jurisdiction to labor arbiters by Article 217 of the Labor Code, as
amended, has been held to be sufficiently comprehensive to include claims for moral and exemplary
damages resulting from illegal dismissal. Primero v. IAC, 156 SCRA 435; Sagmit v. Subido, 133 SCRA
359; Getz. v. CA, 116 SCRA 86; Cardinal Industries v. Vallejos, 114 SCRA 47; Aguda v. Vallejos, 113
SCRA 69; Pepsi-Cola Bottling Co. v. Martinez, 112 SCRA 578.
9
Art. 213, Labor Code, as amended.
10
Administrative Order No. 10 of the Secretary of Labor, dated July 14, 1975.

Pepsi vs. Gallang, GR no. 89621, Sept. 24, 1991

Republic of the Philippines
SUPREME COURT
Manila
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 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 lodged with Labor Arbiters on an 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.
 Footnotes
1 116 SCRA 86.
2 This has since been amended by Sec. 9, R.A. 6715, effective March 21, 1989, to read as follows:
ART. 217. Jurisdiction of Labor Arbiters and the Commission.-4a) Except as otherwise provided under this
Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide within thirty (30)
calendar days after the submission of the case by the parties for decision without extension, even in the
absence of stenographic notes, the following cases involving all workers, whether agricultural or non-
agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those case 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
strike and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other
claims, arising from employer-employee relations, including those of persons in domestic or household
service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdisction diction over all cases decided by Labor
Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining agreement 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.
3 116 SCRA 597.
4 122 SCRA 671.
5 58 SCRA 771.
6 129 SCRA 719.
7 161 SCRA 719.
8 "The Mountain and the Squirrel," by Ralph Waldo Emerson.

PAL vs. NLRC, GR no. 120567, March 20, 1998

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 120567 March 20, 1998

PHILIPPINE AIRLINES, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, FERDINAND PINEDA and GOGFREDO
CABLING, respondents.

MARTINEZ, J.:
Can the National Labor Relations Commission (NLRC), even without a complaint for illegal dismissal tiled
before the labor arbiter, entertain an action for injunction and issue such writ enjoining petitioner Philippine
Airlines, inc. from enforcing its Orders of dismissal against private respondents, and ordering petitioner to
reinstate the private respondents to their previous positions?
This is the pivotal issue presented before us in this petition for certiorari under Rule 65 of the Revised
Rules of Court which seeks the nullification of the injunctive writ dated April 3, 1995 issued by the NLRC
and the Order denying petitioner's motion for reconsideration on the ground that the said Orders were issued
in excess of jurisdiction.
Private respondents are flight stewards of the petitioner. Both were dismissed from the service for their
alleged involvement in the April 3, 1993 currency smuggling in Hong Kong.
Aggrieved by said dismissal, private respondents filed with the NLRC a petition1 for injunction praying that:
I. Upon filing of this Petition, a temporary restraining order be issued, prohibiting respondents (petitioner
herein) from effecting or enforcing the Decision dated Feb. 22, 1995, or to reinstate petitioners temporarily
while a hearing on the propriety of the issuance of a writ of preliminary injunction is being undertaken;
II. After hearing, a writ of preliminary mandatory injunction be issued ordering respondent to reinstate
petitioners to their former positions pending the hearing of this case, or, prohibiting respondent from
enforcing its Decision dated February 22, 1995 while this case is pending adjudication;
III. After hearing, that the writ of preliminary injunction as to the reliefs sought for be made permanent, that
petitioners be awarded full backwages, moral damages of PHP 500,000.00 each and exemplary damages of
PHP 500,000.00 each, attorney's fees equivalent to ten percent of whatever amount is awarded, and the costs
of suit.
On April 3, 1995, the NLRC issued a temporary mandatory injunction 2 enjoining petitioner to cease and
desist from enforcing its February 22, 1995 Memorandum of dismissal. In granting the writ, the NLRC
considered the following facts, to wit:
. . . that almost two (2) years ago, i.e. on April 15, 1993, the petitioners were instructed to attend an
investigation by respondent's "Security and Fraud Prevention Sub-Department" regarding an April 3, 1993
incident in Hongkong at which Joseph Abaca, respondent's Avionics Mechanic in Hongkong "was
intercepted by the Hongkong Airport Police at Gate 05 . . . the ramp area of the Kai Tak International
Airport while . . . about to exit said gate carrying a . . . bag said to contain some 2.5 million pesos in
Philippine Currencies. That at the Police Station. Mr. Abaca claimed that he just found said plastic bag at
the Skybed Section of the arrival flight PR300/03 April 93," where petitioners served as flight stewards of
said flight PR300; . . the petitioners sought "a more detailed account of what this HKG incident is all
about"; but instead, the petitioners were administratively charged, "a hearing" on which "did
not push through" until almost two (2) years after, i.e, "on January 20, 1995 . . . where a confrontation
between Mr. Abaca and petitioners herein was compulsorily arranged by the respondent's disciplinary
board" at which hearing, Abaca was made to identify petitioners as co-conspirators; that despite the fact that
the procedure of identification adopted by respondent's Disciplinary Board was anomalous "as there was no
one else in the line-up (which could not be called one) but petitioners . . . Joseph Abaca still had difficulty in
identifying petitioner Pineda as his co-conspirator, and as to petitioner Cabling, he was implicated and
pointed by Abaca only after respondent's Atty. Cabatuando pressed the former to identify petitioner Cabling
as co-conspirator"; that with the hearing reset to January 25, 1995, "Mr. Joseph Abaca finally gave
exculpating statements to the board in that he cleared petitioners from any participation or from being the
owners of the currencies, and at which hearing Mr. Joseph Abaca volunteered the information that the real
owner of said money was one who frequented his headquarters in Hongkong to which information, the
Disciplinary Board Chairman, Mr. Ismael Khan," opined "for the need for another hearing to go to the
bottom of the incident"; that from said statement, it appeared "that Mr. Joseph Abaca was the courier, and
had another mechanic in Manila who hid the currency at the plane's skybed for Abaca to retrieve in
Hongkong, which findings of how the money was found was previously confirmed by Mr. Joseph Abaca
himself when he was first investigated by the Hongkong authorities"; that just as petitioners "thought that
they were already fully cleared of the charges, as they no longer received any summons/notices on the
intended "additional hearings" mandated by the Disciplinary Board," they were surprised to receive "on
February 23, 1995. . . a Memorandum dated February 22, 1995" terminating their services for alleged
violation of respondent's Code of Discipline "effective immediately"; that sometime . . . first week of
March, 1995, petitioner Pineda received another Memorandum from respondent Mr. Juan Paraiso, advising
him of his termination effective February 3, 1995, likewise for violation of respondent's Code of Discipline;
...
In support of the issuance of the writ of temporary injunction, the NLRC adapted the view that: (1) private
respondents cannot be validly dismissed on the strength of petitioner's Code of Discipline which was
declared illegal by this Court in the ease at PAL, Inc. vs. NLRC, (G.R. No. 85985), promulgated August 13,
1993, for the reason that it was formulated by the petitioner without the participation of its employees as
required in R.A. 6715, amending Article 211 of the Labor Code; (2) the whimsical, baseless and premature
dismissals of private respondents which "caused them grave and irreparable injury" is enjoinable as private
respondents are left "with no speedy and adequate remedy at law" except the issuance of a temporary
mandatory injunction; (3) the NLRC is empowered under Article 218 (e) of the Labor Code not only to
restrain any actual or threatened commission of any or all prohibited or unlawful acts but also to require the
performance of a particular act in any labor dispute, which, if not restrained or performed forthwith, may
cause grave or irreparable damage to any party; and (4) the temporary power of the NLRC was recognized
by this Court in the case of Chemo-Technische Mfg., Inc. Employees Union, DFA, et. al. vs. Chemo-
Technische Mfg., Inc. [G.R. No. 107031, January 25, 1993].
On May 4, 1995, petitioner moved for reconsideration3 arguing that the NLRC erred:
1. . . . in granting a temporary injunction order when it has no jurisdiction to issue an injunction or
restraining order since this may be issued only under Article 218 of the Labor Code if the case involves or
arises from labor disputes;
2. . . . in granting a temporary injunction order when the termination of private respondents have long been
carried out;
3. . . . in ordering the reinstatement of private respondents on the basis of their mere allegations, in violation
of PAL's right to due process:
4. . . . in arrogating unto itself management prerogative to discipline its employees and divesting the labor
arbiter of its original and exclusive jurisdiction over illegal dismissal cases;
5. . . . in suspending the effects of termination when such action is exclusively within the jurisdiction of the
Secretary of Labor;
6. . . . in issuing the temporary injunction in the absence of any irreparable or substantial injury to both
private respondents.
On May 31, 1995, the NLRC denied petitioner's motion for reconsideration, ruling:
"The respondent (now petitioner), for one, cannot validly claim that we cannot exercise our injunctive
power under Article 218 (e) of the Labor Code on the pretext that what we have here is not a labor dispute
as long as it concedes that as defined by law, a" (l) "Labor Dispute" includes any controversy or matter
concerning terms or conditions of employment." If security of tenure, which has been breached by
respondent and which, precisely, is sought to be protected by our temporary mandatory injunction (the core
of controversy in this case) is not a "term or condition of employment", what then is?
xxx xxx xxx
Anent respondent's second argument . . . . Article 218 (e) of the Labor Code . . . empowered the
Commission not only to issue a prohibitory injunction, but a mandatory ("to require the performance") one
as well. Besides, as earlier discussed, we already exercised (on August 23, 1991) this temporary mandatory
injunctive power in the case of "Chemo-Technische Mfg., Inc. Employees Union-DFA et. al. vs. Chemo-
Technische Mfg., Inc., et. al." (supra) and effectively enjoined one (1) month old dismissals by Chemo-
Technische and that our aforesaid mandatory exercise of injunctive power, when questioned through a
petition for certiorari, was sustained by the Third Division of the Supreme court per its Resolution dated
January 25, 1993.
xxx xxx xxx
Respondent's fourth argument that petitioner's remedy for their dismissals is "to file an illegal dismissal case
against PAL which cases are within the original and exclusive jurisdiction of the Labor Arbiter' is ignorant.
In requiring as a condition for the issuance of a "temporary or permanent injunction" — "(4) That
complainant has no adequate remedy at law;" Article 218 (e) of the Labor Code clearly
envisioned adequacy, and not plain availability of a remedy at law as an alternative bar to the issuance of an
injunction. An illegal dismissal suit (which takes, on its expeditious side, three (3) years before it can be
disposed of) while available as a remedy under Article 217 (a) of the Labor Code, is certainly not an
"adequate; remedy at law, Ergo, it cannot as an alternative remedy, bar our exercise of that injunctive power
given us by Article 218 (e) of the Code.
xxx xxx xxx
Thus, Article 218 (e), as earlier discussed [which empowers this Commission "to require the performance of
a particular act" (such as our requiring respondent "to cease and desist from enforcing" its whimsical
memoranda of dismissals and "instead to reinstate petitioners to their respective position held prior to their
subject dismissals") in "any labor dispute which, if not . . . performed forthwith, may cause grave and
irreparable damage to any party"] stands as the sole "adequate remedy at law" for petitioners here.
Finally, the respondent, in its sixth argument claims that even if its acts of dismissing petitioners "may be
great, still the same is capable of compensation", and that consequently, "injunction need not be issued
where adequate compensation at law could be obtained". Actually,
what respondent PAL argues here is that we need not interfere in its whimsical dismissals of petitioners as,
after all, it can pay the latter its backwages. . . .
But just the same, we have to stress that Article 279 does not speak alone of backwages as an obtainable
relief for illegal dismissal; that reinstatement as well is the concern of said law, enforceable when necessary,
through Article 218 (e) of the Labor Code (without need of an illegal dismissal suit under Article 217 (a) of
the Code) if such whimsical and capricious act of illegal dismissal will "cause grave or irreparable injury to
a party". . . . .4
Hence, the present recourse.
Generally, injunction is a preservative remedy for the protection of one's substantive rights or interest. It is
not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. It is resorted to
only when there is a pressing necessity to avoid injurious consequences which cannot be remedied under
any standard of compensation. The application of the injunctive writ rests upon the existence of an
emergency or of a special reason before the main case be regularly heard. The essential conditions for
granting such temporary injunctive relief are that the complaint alleges facts which appear to be sufficient to
constitute a proper basis for injunction and that on the entire showing from the contending parties, the
injunction is reasonably necessary to protect the legal rights of the plaintiff pending the
litigation.5 Injunction is also a special equitable relief granted only in cases where there is no plain, adequate
and complete remedy at law.6
In labor cases, Article 218 of the Labor Code empowers the NLRC —
(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to
require the performance of a particular act in any labor dispute which, if not restrained or performed
forthwith, may cause grave or irreparable damage to any party or render ineffectual any decision in favor of
such party; . . ." (Emphasis Ours)
Complementing the above-quoted provision, Sec. 1, Rule XI of the New Rules of Procedure of the NLRC,
pertinently provides as follows:
Sec. 1. Injunction in Ordinary Labor Dispute. — A preliminary injunction or a restraining order may be
granted by the Commission through its divisions pursuant to the provisions of paragraph (e) of Article 218
of the Labor Code, as amended, when it is established on the bases of the sworn allegations in the petition
that the acts complained of, involving or arising from any labor dispute before the Commission, which, if
not restrained or performed forthwith, may cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party.
xxx xxx xxx
The foregoing ancillary power may be exercised by the Labor Arbiters only as an incident to the cases
pending before them in order to preserve the rights of the parties during the pendency of the case, but
excluding labor disputes involving strikes or lockout. 7 (Emphasis Ours)
From the foregoing provisions of law, the power of the NLRC to issue an injunctive writ originates from
"any labor dispute" upon application by a party thereof, which application if not granted "may cause grave
or irreparable damage to any party or render ineffectual any decision in favor of such party."
The term "labor dispute" is defined as "any controversy or matter concerning terms and conditions of
employment or the association or representation of persons in negotiating, fixing. maintaining, changing, or
arranging the terms and conditions of employment regardless of whether or not the disputants stand in the
proximate relation of employers and employees." 8
The term "controversy" is likewise defined as "a litigated question; adversary proceeding in a court of
law; a civil action or suit, either at law or in equity; a justiciable dispute."9
A "justiciable controversy" is "one involving an active antagonistic assertion of a legal right on one side and
a denial thereof on the other concerning a real, and not a mere theoretical question or issue." 10
Taking into account the foregoing definitions, it is an essential requirement that there must first be a labor
dispute between the contending parties before the labor arbiter. In the present case, there is no labor dispute
between the petitioner and private respondents as there has yet been no complaint for illegal dismissal filed
with the labor arbiter by the private respondents against the petitioner.
The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal. This is
clear from the allegations in the petition which prays for; reinstatement of private respondents; award of full
backwages, moral and exemplary damages; and attorney's fees. As such, the petition should have been filed
with the labor arbiter who has the original and exclusive jurisdiction to hear and decide the following cases
involving all workers, whether agricultural or non-agricultural:
(1) Unfair labor practice;
(2) Termination disputes;
(3) If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates
of pay, hours of work and other terms and conditions of employment;
(4) Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee
relations;
(5) Cases arising from any violation of Article 264 of this Code, including questions involving the legality
of strikes and lockouts; and
(6) Except claims for employees compensation, social security, medicare and maternity benefits, all other
claims arising from employer- employee relations, including those of persons in domestic or household
service, involving an amount exceeding five thousand pesos (P5,000.00), whether or not accompanied with
a claim for reinstatement. 11
The jurisdiction conferred by the foregoing legal provision to the labor arbiter is both original and exclusive,
meaning, no other officer or tribunal can take cognizance of, hear and decide any of the cases therein
enumerated. The only exceptions are where the Secretary of Labor and Employment or the NLRC exercises
the power of compulsory arbitration, or the parties agree to submit the matter to voluntary arbitration
pursuant to Article 263 (g) of the Labor Code, the pertinent portions of which reads:
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration.
Such assumption or certification shall have the effect of automatically enjoining the intended or impending
strike or lockout as specified in the assumption or certification order. If one has already taken place at the
time of assumption or certification, all striking or locked out employees shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing before the strike or
lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law
enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue
to enforce the same.
On the other hand, the NLRC shall have exclusive appellate jurisdiction over all cases decided by labor
arbiters as provided in Article 217(b) of the Labor Code. In short, the jurisdiction of the NLRC in illegal
dismissal cases is appellate in nature and, therefore, it cannot entertain the private respondents' petition for
injunction which challenges the dismissal orders of petitioner. Article 218(e) of the Labor Code does not
provide blanket authority to the NLRC or any of its divisions to issue writs of injunction, considering that
Section 1 of Rule XI of the New Rules of Procedure of the NLRC makes injunction only an ancillary
remedy in ordinary labor disputes." 12
Thus, the NLRC exceeded its jurisdiction when it issued the assailed Order granting private respondents'
petition for injunction and ordering the petitioner to reinstate private respondents.
The argument of the NLRC in its assailed Order that to file an illegal dismissal suit with the labor arbiter is
not an "adequate" remedy since it takes three (3) years before it can be disposed of, is patently erroneous.
An "adequate" remedy at law has been defined as one "that affords relief with reference to the matter in
controversy, and which is appropriate to the particular circumstances of the case." 13 It is a remedy which is
equally, beneficial, speedy and sufficient which will promptly relieve the petitioner from the injurious
effects of the acts complained of. 14
Under the Labor Code, the ordinary and proper recourse of an illegally dismissed employee is to file a
complaint for illegal dismissal with the labor arbiter. 15 In the case at bar, private respondents
disregarded this rule and directly went to the NLRC through a petition for injunction praying that
petitioner be enjoined from enforcing its dismissal orders. In Lamb vs. Phipps, 16 we ruled that if the
remedy is specifically provided by law, it is presumed to be adequate. Moreover, the preliminary
mandatory injunction prayed for by the private respondents in their petition before the NLRC can
also be entertained by the labor arbiter who, as shown earlier, has the ancillary power to issue
preliminary injunctions or restraining orders as an incident in the cases pending before him in order
to preserve the rights of the parties during the pendency of the case. 17
Furthermore, an examination of private respondents' petition for injunction reveals that it has no
basis since there is no showing of any urgency or irreparable injury which the private respondents
might suffer. An injury is considered irreparable if it is of such constant and frequent recurrence that
no fair and reasonable redress can be had therefor in a court of law, 18 or where there is no standard
by which their amount can be measured with reasonable accuracy, that is, it is not susceptible of
mathematical computation. It is considered irreparable injury when it cannot be adequately
compensated in damages due to the nature of the injury itself or the nature of the right or property
injured or when there exists no certain pecuniary standard for the measurement of damages. 19
In the case at bar, the alleged injury which private respondents stand to suffer by reason of their
alleged illegal dismissal can be adequately compensated and therefore, there exists no "irreparable
injury," as defined above which would necessitate the issuance of the injunction sought for. Article
279 of the Labor Code provides that an employee who is unjustly dismissed from employment shall be
entitled to reinstatement, without loss of seniority rights and other privileges, and to the payment of
full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed
from the time his compensation was withheld from him up to the time of his actual reinstatement.
The ruling of the NLRC that the Supreme Court upheld its power to issue temporary mandatory
injunction orders in the case of Chemo-Technische Mfg., Inc. Employees Union-DFA, et. al. vs. Chemo-
Technische Mfg., Inc. et. al., docketed as G.R. No. 107031, is misleading. As correctly argued by the
petitioner, no such pronouncement was made by this Court in said case. On January 25, 1993, we
issued a Minute Resolution in the subject case stating as follows:
Considering the allegations contained, the issues raised and the arguments adduced in the petition
for certiorari, as well as the comments of both public and private respondents thereon, and the reply
of the petitioners to private respondent's motion to dismiss the petition, the Court Resolved to DENY
the same for being premature.
It is clear from the above resolution that we did not in anyway sustain the action of the NLRC in
issuing such temporary mandatory injunction but rather we dismissed the petition as the NLRC had
yet to rule upon the motion for reconsideration filed by petitioner. Thus, the minute resolution
denying the petition for being prematurely filed.
Finally, an injunction, as an extraordinary remedy, is not favored in labor law considering that it
generally has not proved to be an effective means of settling labor disputes. 20 It has been the policy of
the State to encourage the parties to use the non-judicial process of negotiation and compromise,
mediation and arbitration. 21 Thus, injunctions may be issued only in cases of extreme necessity based
on legal grounds clearly established, after due consultations or hearing and when all efforts at
conciliation are exhausted which factors, however, are clearly absent in the present case.
WHEREFORE, the petition is hereby GRANTED. The assailed Orders dated April 3, 1995 and May
31, 1995, issued by the National Labor Relations Commission (First Division), in NLRC NCR IC No.
000563-95, are hereby REVERSED and SET ASIDE.
SO ORDERED.
Regalado, Melo, Puno and Mendoza, JJ., concur.
Footnotes
1 Annex "3", pp. 134-147, Rollo.
2 Annex "A", pp. 19-23, Rollo.
3 Annex "I", pp. 124-133, Rollo.
4 Annex "B", pp. 24-46, Rollo.
5 Del Rosario vs. Court of Appeals, 255 SCRA 152 [1996]
6 Devesa vs. Arbes, 13 Phil. 273 [1909]; Gilchrist vs. Cuddy, et. al., 29 Phil. 542 [1915]
7 See also Pondoc vs. National Labor Relations Commission, 262 SCRA 632, 638 [1996].
8 Article 212(1), Labor Code of the Philippines.
9 Federico B. Moreno, Philippine Law Dictionary, 1982 edition, p. 136.
10 Delumen vs. Republic, 94 Phil. 288, cited in Moreno, supra, p. 336.
11 Article 217 (a), Labor Code of the Philippines.
12 Pondoc vs. NLRC, supra.
13 Mt. Vermon vs. Borman, 100 Ohio St., 2, 75, 125 NE 116 [1919].
14 See Silvestre vs. Torres, 57 Phil. 885.
15 Article 217 (a) Labor Code of the Philippines.
 16 22 Phil., 465.
17 Section 1, Rule XI of the New Rules of Procedure of the NLRC. See also Pondoc vs. NLRC, supra.
18 Allundorff vs. Abrahanson, 38 Phil. 58 cited in Phil. Virginia Tobacco Administration vs. De los
Angeles, 164 SCRA 555 [1988].
19 Phil. Law Dictionary, supra., p. 321.
20 48 Am. Jur. 2d, 2071, p. 437, cited in Azucena. The Labor Code, vol. 2, 1996 ed., p. 430.
21 Ibid., p. 35.

Spic n Span Services vs. Paje, et.al., GR No. 174084, August 25, 2010

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 174084 August 25, 2010
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, Respondents.
DECISION
BRION, J.:
Before the Court is the petition for review on certiorari1 filed by Spic N’ Span Services Corporation (SNS)
to seek the reversal of the October 25, 2004 Decision2 and the August 2, 2006 Resolution3 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. SNS’s 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 Arbiter7 found SNS to be the agent of Swift, and ordered SNS and Swift to jointly and severally
pay Edelisa David ₱115,637.50 and Inocencio Fernandez ₱192,197.50, 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 ₱256,620.13, and Inocencio Fernandez a total of
₱280,912.63, 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 NLRC’s ruling. This time, they were represented by the Public Attorney’s 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 Court’s 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.16The 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. NLRC18 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’ representative’s 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.27Thus, 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 CA’s 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 NLRC’s 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 CA’s 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
principal’s 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 Swift’s agent, and explained its ruling as follows34 –
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.1âwphi1 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.1âwphi1Hence, 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 ₱30,000.00 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 ₱30,000.00 should additionally be paid to each of the respondents, for violation of their
procedural due process rights. Costs against the petitioner.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:
CONCHITA CARPIO MORALES
Associate Justice
LUCAS P. BERSAMIN MARTIN S. VILLARAMA, JR.
Associate Justice Associate Justice
MARIA LOURDES P.A. SERENO
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.
 CONCHITA CARPIO MORALES
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, it is
hereby certified that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court’s Division.
RENATO C. CORONA
Chief Justice

Abbott vs. NLRC, 145 SCRA 206

St. Martin’s Funeral Home vs. NLRC, GR No. 130866, Sept. 16, 1988
G.R. No. 130866 September 16, 1998

ST. MARTIN FUNERAL HOME, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and BIENVENIDO ARICAYOS,
respondents.

FACTS: 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).

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.

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.

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.

private respondent appealed to the NLRC. NLRC remanded the case to LA. MR was filed
by the petitioner which was denied.

RULING:
1) HISTORY: 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.

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.

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.

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.

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 No. 1495.

2) Appeal.
-review of NLRC Decision is through Rule 65.
-jurisdiction: SC AND CA
-by way of hierarchy: the review shall be initially filed before CA.

Republic of the Philippines

SUPREME COURT
Manila
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 No.
1495.
Incidentally, it was noted by the sponsor therein that some quarters were of the opinion that
recourse from the NLRC to the Court of Appeals as an initial step in the process of judicial review
would be circuitous and would prolong the proceedings. On the contrary, as he commendably and
realistically emphasized, that procedure would be advantageous to the aggrieved party on this
reasoning:
On the other hand, Mr. President, to allow these cases to be appealed to the Court of Appeals would
give litigants the advantage to have all the evidence on record be reexamined and reweighed after
which the findings of facts and conclusions of said bodies are correspondingly affirmed, modified or
reversed.
Under such guarantee, the Supreme Court can then apply strictly the axiom that factual findings of
the Court of Appeals are final and may not be reversed on appeal to the Supreme Court. A perusal of
the records will reveal appeals which are factual in nature and may, therefore, be dismissed outright
by minute resolutions. 24
While we do not wish to intrude into the Congressional sphere on the matter of the wisdom of a law,
on this score we add the further observations that there is a growing number of labor cases being
elevated to this Court which, not being a trier of fact, has at times been constrained to remand the
case to the 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 disregard the hierarchy of courts in our judicial system by seeking relief directly from this
Court despite the fact that the same is available in the lower courts in the exercise of their original or
concurrent jurisdiction, or is even mandated by law to be sought therein. This practice must be
stopped, not only because of the imposition upon the precious time of this Court but also because of
the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often
has to be remanded or referred to the lower court as the proper forum under the rules of procedure,
or as better equipped to resolve the issues since this Court is not a trier of facts. We, therefore,
reiterate the judicial policy that this Court will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts or where exceptional and compelling
circumstances justify availment of a remedy within and calling for the exercise of our primary
jurisdiction.
WHEREFORE, under the foregoing premises, the instant petition for certiorari is hereby REMANDED,
and all pertinent records thereof ordered to be FORWARDED, to the Court of Appeals for appropriate
action and disposition consistent with the views and ruling herein set forth, without pronouncement
as to costs.
SO ORDERED.
Narvasa, C.J., Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban
Martinez, Quisumbing and Purisima, JJ., concur.