Labor Law 2 reviewer

BOOK FIVE – LABOR RELATIONS (POLICY AND

DEFINITIONS)
Cases:

1. PAL vs. NLRC. G.R. No. 85985. August 13, 1993.

- To achieve industrial peace, the employees must be granted their just participation in the
discussion of matters affecting their rights. It is the policy of the State to promote the
enlightenment of workers concerning their rights and obligations as employees. The
New Code of Discipline containing disciplinary measures cannot be implemented in the
absence of full cooperation of the employees as it affects their rights, duties and welfare.
Management cannot exclude labor in the deliberation and adoption of rules and
regulations that will affect them. Workers have the right to participate in decision and
policy making process affecting their rights, duties and welfare.
- Participation in Decision-Making Process –
- A line must be drawn between management prerogatives regarding business
operations per se and those which affect the rights of the employees. In treating
the latter, management should see to it that its employees are at least properly
informed of its decisions or modes of action. Indeed, industrial peace cannot be
achieved if the employees are denied their just participation in the discussion of
matters affecting their rights.
- with the approval of Republic Act No. 6715, amending Article 211 of the Labor Code,
that the law explicitly considered it a State policy "(t)o ensure the participation of
workers in decision and policy-making processes affecting their... rights, duties and
welfare." However, even in the absence of said clear provision of law, the exercise of
management prerogatives was never considered boundless. Thus, in Cruz vs.
Medina (177 SCRA 565 [1989]), it was held that management's prerogatives must...
be without abuse of discretion.
- The Association recognizes the right of the Company to determine matters of
management policy and Company operations and to direct its manpower.
Management of the Company includes the right to organize, plan, direct and control
operations, to hire, assign employees... to work, transfer employees from one
department to another, to promote, demote, discipline, suspend or discharge
employees for just cause; to lay-off employees for valid and legal causes, to
introduce new or improved methods or facilities or to change existing... methods or
facilities and the right to make and enforce Company rules and regulations to carry
out the functions of management.
- whatever disciplinary measures are adopted cannot be properly implemented in the
absence of full cooperation of the employees. Such cooperation cannot be attained if
 the employees are restive on account of their being left out in the determination... of
cardinal and fundamental matters affecting their employment.

2. HALAGUEÑA vs. PAL. G.R. No.172013.

- Issue:

Whether or not the regular courts has jurisdiction over the case.

Ruling:
Yes. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable by
the RTC. Being an ordinary civil action, the same is beyond the jurisdiction of labor
tribunals.
- Not every controversy or money claim by an employee against the employer or vice-
versa is within the exclusive jurisdiction of the labor arbiter. Actions between
employees and employer where the employer-employee relationship is merely
incidental and the cause of action precedes from a different source of obligation is
within the exclusive jurisdiction of the regular court. 
- Being an ordinary civil action, the same is beyond the jurisdiction of labor
tribunals.The said issue cannot be resolved solely by applying the Labor Code.
Rather, it requires the application of the Constitution, labor statutes, law on contracts
and the Convention on the Elimination of All Forms of Discrimination Against
Women, and the power to apply and interpret the constitution and CEDAW is within
the jurisdiction of trial courts, a court of general jurisdiction. In GeorgGrotjahn GMBH
& Co. v. Isnani, this Court held that not every dispute between an employer and
employee involves matters that only labor arbiters and the NLRC can resolve in the
exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of labor
arbiters and the NLRC under Article 217 of the Labor Code is limited to dispute
arising from an employer-employee relationship which can only be resolved by
reference to the Labor Code other labor statutes, or their collective bargaining
agreement.
- Principles:
- The said issue cannot be resolved solely by applying the Labor Code. Rather, it
requires the application of the Constitution, labor statutes, law on contracts and the
Convention on the Elimination of All Forms of Discrimination Against Women,[16]
and the... power to apply and interpret the constitution and CEDAW is within the
jurisdiction of trial courts, a court of general jurisdiction.
- In Georg Grotjahn GMBH & Co. v. Isnani,[17] this Court held that not every dispute
between an employer and... employee involves matters that only labor arbiters and
the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers.
The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code
is limited to disputes arising from an... employer-employee relationship which can
only be resolved by reference to the Labor Code, other labor statutes, or their
collective bargaining agreement.
- Not every controversy or money claim by an employee against the employer or vice-
versa is within the exclusive jurisdiction of the labor arbiter. Actions between
employees and employer where the employer-employee relationship is merely
 incidental and the cause of action precedes... from a different source of obligation is
within the exclusive jurisdiction of the regular court
- Here, the employer-employee relationship between the parties is merely incidental
and the cause of action ultimately arose from different sources of... obligation, i.e.,
the Constitution and CEDAW.
- Thus, where 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.
- esolution 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
- This Court holds that the grievance machinery and voluntary arbitrators do not have
the power to determine and settle the issues at hand. They have no jurisdiction and
competence to decide constitutional issues relative to the questioned compulsory
retirement age.
- In Gonzales v. Climax Mining Ltd.,[20] this Court affirmed the jurisdiction of courts
over questions on constitutionality of contracts, as the same involves the exercise of
judicial power.
- But the resolution of the... validity or voidness of the contracts remains a legal or
judicial question as it requires the exercise of judicial function. It requires the
ascertainment of what laws are applicable to the dispute, the interpretation and
application of those laws, and the rendering of a... judgment based thereon
- To be sure, in Rivera v. Espiritu... this Court denied the petition for certiorari, ruling
that there is available to petitioners a plain, speedy, and adequate remedy in the
ordinary course of law. The Court said that while the petition was denominated as
one for certiorari and prohibition, its object... was actually the nullification of the PAL-
PALEA agreement. As such, petitioners' proper remedy is an ordinary civil action for
annulment of contract, an action which properly falls under the jurisdiction of the
regional trial courts.
- The change in the terms and conditions of employment, should Section 144 of the
CBA be held invalid, is but a necessary and unavoidable consequence of the
principal relief sought, i.e., nullification of the alleged discriminatory provision in the
CBA. Thus, it does not... necessarily follow that a resolution of controversy that
would bring about a change in the terms and conditions of employment is a labor
dispute, cognizable by labor tribunals.
- n Pantranco North Express, Inc., v. NLRC,[23] this Court held that:... x x x Hence,
only disputes involving the union and the company shall be referred to the grievance
machinery or voluntary arbitrators.
- the dispute in the case at bar is not between FASAP and respondent PAL, who have
both previously agreed upon the provision on the compulsory retirement of female
flight attendants as embodied in the CBA. The dispute is between respondent PAL
and several female... flight attendants who questioned the provision on compulsory
retirement of female flight attendants
- Thus, applying the principle in the aforementioned case cited, referral to the
grievance machinery and voluntary arbitration would not serve the interest of the...
petitioners.
 - The trial court in this case is not asked to interpret Section 144, Part A of the PAL-
FASAP CBA.
- The provision regarding the compulsory retirement of flight attendants is not
ambiguous and does not require interpretation. Neither is there any question
regarding the implementation of the subject CBA provision, because the manner of...
implementing the same is clear in itself. The only controversy lies in its intrinsic
validity.
- Although it is a rule that a contract freely entered between the parties should be
respected, since a contract is the law between the parties, said rule is not absolute.
- In Pakistan International Airlines Corporation v. Ople,[25] this Court held that:
- The principle of party autonomy in contracts is not, however, an absolute principle.
The rule in Article 1306, of our Civil Code is that the contracting parties may
establish such stipulations as they may deem convenient, "provided they are not
contrary to law,... morals, good customs, public order or public policy." Thus,
counter-balancing the principle of autonomy of contracting parties is the equally
general rule that provisions of applicable law, especially provisions relating to
matters affected with public policy, are deemed written... into the contract. Put a little
differently, the governing principle is that parties may not contract away applicable
provisions of law especially peremptory provisions dealing with matters heavily
impressed with public interest. The law relating to labor and employment is... clearly
such an area and parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting with
each other.
- Moreover, the relations between capital and labor are not merely contractual. They
are so impressed with public interest that labor contracts must yield to the common
good.x x x [26] The supremacy of the law over contracts is explained by the fact
that... labor contracts are not ordinary contracts; these are imbued with public
interest and therefore are subject to the police power of the state.[27] It should not
be taken to mean that retirement provisions agreed upon in the CBA are absolutely
beyond the... ambit of judicial review and nullification. A CBA, as a labor contract, is
not merely contractual in nature but impressed with public interest. If the retirement
provisions in the CBA run contrary to law, public morals, or public policy, such
provisions may very well be... voided.[28]
-

3. SMC Employees Union-PTGWO vs. Bersamira. G.R. No. 87700 June 13, 1990.

- A labor dispute includes any controvery 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 or employment,
regardless of whether the disputants stand in the proximate
relation of employer and employee.
- What the Union seeks is to regularize the status of the
employees contracted by Liparcon and D’Rite and that they be
absorbed into the working unit of San Miguel. In this wise, the
matter dwells on the working relationship between the said
employees and San Miguel. Terms, tenure and conditions of their
employment and the arrangement of those terms are thus
involved bringing the matter within the purview of a labor
dispute. Further, the Union also seeks to represent the workers,
who have signed for union membership, for the purpose of
collecting bargaining. Obvious then is that representation and
association, for the purpose of negotiating the conditions of
employment are also involved. In fact, the injunction sought by
San Miguel was precisely also to prevent such representation.
Again, the matter of representation falls squarely within the
ambit of a labor dispute.
As the case is indisputably linked with a labor dispute,
jurisdiction belongs to labor tribunals.
- Principles:
- As in the first notice of strike, conciliatory meetings were held on the second notice. 
Subsequently, the two (2) notices of strike were consolidated and several conciliation
conferences were held to settle the dispute before the National Conciliation and
- Mediation Board (NCMB) of DOLE (Annex G, Petition).
- Beginning 14 February 1989 until 2 March 1989, series of pickets were staged by
Lipercon and D'Rite workers in various SMC plants and offices.
- On 6 March 1989, SMC filed a verified Complaint for Injunction and Damages before
respondent Court to enjoin the Union from:... a.  representing and/or acting for and in
behalf of the employees of LIPERCON and/or D'RITE for the purposes of collective
bargaining;... b.  calling for and holding a strike vote to compel plaintiff to hire the
employees or workers of LIPERCON and D'RITE;... c. inciting, instigating and/or
inducing the employees or workers of LIPERCON and D'RITE to demonstrate and/or
picket at the plants and offices of plaintiff within the bargaining unit referred to in the
CBA, x x x;... d.  staging a strike to compel plaintiff to hire the employees or workers
of LIPERCON and D'RITE;... e. using the employees or workers of LIPERCON AND
D'RITE to man the strike area and/or picket lines and/or barricades which the
defendants may set up at the plants and offices of plaintiff within the bargaining unit
referred to in the CBA x x... x ;... f.  intimidating, threatening with bodily harm and/or
molesting the other employees and/or contract workers of plaintiff, as well as those
persons lawfully transacting business with plaintiff at the work places within the
 bargaining unit referred to... in the CBA, x x x , to compel plaintiff to hire the
employees or workers of LIPERCON and D'RITE;... g. blocking, preventing,
prohibiting, obstructing and/or impeding the free ingress to, and egress from, the
work places within the bargaining unit referred to in the CBA x x , to compel plaintiff
to hire the employees or workers of LIPERCON and
- D'RITE.
- h. preventing and/or disrupting the peaceful and normal operation of plaintiff at the
work places within the bargaining unit referred to in the CBA.  Annex "C" hereof, to
compel plaintiff to hire the employees or workers of
- LIPERCON and D'RITE.  (Annex H, Petition)
- Respondent Court found the Complaint sufficient in form and substance and issued
a Temporary Restraining Order for the purpose of maintaining the status quo, and
set the application for Injunction for hearing.
- In the meantime, on 13 March 1989, the Union filed a Motion to Dismiss SanMig's
Complaint on the ground of lack of jurisdiction over the case/nature of the action,
which motion was opposed by SanMig.  That Motion was denied by... respondent
Judge in an Order dated 11 April 1989.
- After several hearings on SanMig's application for injunctive relief, where the parties
presented both testimonial and documentary evidence, on 25 March 1989, respond-
ent Court issued the questioned Order (Annex A, Petition) granting the application
and enjoining... the Union from committing the acts complained of, supra. 
Accordingly, on 29 March 1989, respondent Court issued the corresponding Writ of
Preliminary Injunction after SanMig had posted the required bond of P100,000.00 to
answer... for whatever damages petitioners may sustain by reason thereof.
- In issuing the Injunction, respondent Court rationalized:
- The absence of employer-employee relationship negates the existence of labor
dispute.  Verily, this court has jurisdiction to take cognizance of plaintiff's grievance.
- The evidence so far presented indicates that plaintiff has contracts for services with
Lipercon and D'Rite.  The application and contract for employment of the defendants'
witnesses are either with Lipercon or
- D'Rite.  What could be discerned is that there is no employer-employee relationship
between plaintiff and the contractual workers employed by Lipercon and D'Rite. 
This, however, does not mean that a... final determination regarding the question of
the existence of employer-employee relationship has already been made.  To finally
resolve this dispute, the court must extensively consider and delve into the manner
of selection and engagement of the putative... employee; the mode of payment of
wages; the presence or absence of a power of dismissal; and the presence or
absence of a power to control the putative employee's conduct.  This necessitates a
full-blown trial.  If the acts complained of are... not restrained, plaintiff would,
undoubtedly, suffer irreparable damages.  Upon the other hand, a writ of injunction
does not necessarily expose defendants to irreparable damages.
- Evidently, plaintiff has established its right to the relief demanded.  (p. 21, Rollo)
- Anchored on grave abuse of discretion, petitioners are now before us seeking
nullification of the challenged Writ.  On 24 April 1989, we issued a Temporary
Restraining Order enjoining the implementation of the Injunction issued by
respondent
- Court.  The Union construed this to mean that "we can now strike," which it
superimposed on the Order and widely circulated to entice the Union membership to
 go on strike.  Upon being apprised thereof, in a Resolution of 24 May 1989, we...
required the parties to "RESTORE the status quo ante declaration of strike" (p. 262
Rollo).
- In the meantime, however, or on 2 May 1989, the Union went on strike.  Apparently,
some of the contractual workers of Lipercon and D'Rite had been laid off.  The strike
adversely affected thirteen (13) of the... latter's plants and offices.
- On 3 May 1989, the National Conciliation and Mediation Board (NCMB) called the
parties to conciliation.  The Union stated that it would lift the strike if the thirty (30)
Lipercon and D'Rite employees were recalled, and discussion... on their other
demands, such as wage distortion and appointment of coordinators, were made. 
Effected eventually was a Memorandum of Agreement between SanMig and the
Union that "without prejudice to the outcome of G.R. No. 87700 (this case) and
- Civil Case No. 57055 (the case below), the laid-off individuals x x x shall be recalled
effective 8 May 1989 to their former jobs or equivalent positions under the same
terms and conditions prior to lay-off" (Annex 15, SanMig
- Comment).  In turn, the Union would immediately lift the pickets and return to work.
- After an exchange of pleadings, this Court, on 12 October 1989, gave due course to
the Petition and required the parties to submit their memoranda simultaneously, the
last of which was filed on 9 January 1990.
- The focal issue for determination is whether or not respondent Court correctly
assumed jurisdiction over the present controversy and properly issued the Writ of
Preliminary Injunction.  Crucial to the resolution of that question, is the matter of
whether or... not the case at bar involves, or is in connection with, or relates to a
labor dispute.  An affirmative answer would bring the case within the original and
exclusive jurisdiction of labor tribunals to the exclusion of the regular Courts.
- Petitioners take the position that "it is beyond dispute that the controversy in the
court a quo involves or arose out of a labor dispute and is directly connected or
interwoven with the cases pending with the NCMB-DOLE, and is thus beyond the
ambit of the... public respondent's jurisdiction.  That the acts complained of (i.e., the
mass concerted action of picketing and the reliefs prayed for by the private
respondent) are within the competence of labor tribunals, is beyond question" (pp. 6-
7,... Petitioners' Memo).
-
4. PAFLU vs. Salas. G.R. No. L-39084. February 23, 1988.

- ISSUE:

Whether or not the CFI has the jurisdiction to issue the injunctive relief in levying prope
rties pursuant to a writ of execution in  a labor case decision.

HELD:

Yes. It is clear that Civil Case No. 18460 is an ordinary civil action for damages, not a lab
or dispute. The case is directed against the provincial sheriff and the recovery of damage
s is sought against the bond provided for Section 17, Rule 39 of the Rules of Court gover
ning execution and satisfaction of judgments.

- Even if the act complained of by the private respondent arose from a labor dispute betwe
en the petitioner and another party, the inevitable conclusion remains the same — there i
s no labor dispute between the petitioner and the private respondent. Civil Case No. 1846
0 has no direct bearing with the case filed with the industrial court. The civil case remain
s distinct from the labor dispute pending with the CIR. There being no labor dispute bet
ween the petitioner and the private respondent, the Court of First Instance has the jurisd
iction to issue the injunctive relief sought by the private respondent in Civil Case No. 184
60.The latter case can proceed independently of the case pending in the Court of Industri
al Relations.
- Issue: Whether or not the CFI has the jurisdiction to issue the injunctive relief questioned
by the petitioner.
- Ruling: Yes. The case is directed against the provincial sheriff and the recovery of
damages is sought against the bond provided for Section 17, Rule 39 of the Rules of
Court governing execution and satisfaction of judgments. Even if the act complained of
by the private respondent arose from a labor dispute between the petitioner and another
party, the inevitable conclusion remains the same — there is no labor dispute between
the petitioner and the private respondent. The case has no direct bearing with the case
flied with the industrial court. The civil case remains distinct from the labor dispute
pending with the CIR. Under Commonwealth Act No. 103, the law creating the Court of
Industrial Relations, the jurisdiction of the industrial court is limited to labor disputes. i.e.,
problems and controversies pertaining to the relationship between employer and
employee. From the foregoing, it is clear that the jurisdiction of the CIR can be invoked
only when there is a dispute arising between or affecting employers and employees, or
when an employer-employee relationship exists between the parties. There being no
labor dispute between the petitioner and the private respondent, the Court of First
Instance has the jurisdiction to issue the injunctive relief sought by the private
respondent. The latter case can proceed independently of the case pending in the Court
of Industrial Relations.

Study NLRC - Powers and Duties

Cases:

1. Deltaventures Resources, Inc. vs. Cabato. G.R. No. 118216. March 9, 2000.
- it must be noted that the Labor Code in Article 254 explicitly prohibits issuance of a
temporary or permanent injunction or restraining order in any case involving or growing out
 of labor disputes by any court or other entity (except as otherwise provided in Arts. 218 and
264). As correctly observed by court a quo, the main issue and the subject of the amended
complaint for injunction are questions interwoven with the execution of the Commission's
decision. No doubt the aforecited prohibition in Article 254 is applicable.1âwphi1

- The broad powers granted to the Labor Arbiter and to the National Labor Relations
Commission by Articles 217, 218 and 224 of the Labor Code can only be interpreted as
vesting in them jurisdiction over incidents arising from, in connection with or relating to labor
disputes, as the controversy under consideration, to the exclusion of the regular courts.

- Basic as a hornbook principle, jurisdiction over the subject matter of a case is conferred by
law and determined by the allegations in the complainant which comprise a concise
18 

statement of the ultimate facts constituting the petitioner's cause of action. Thus we have
19 

held that:

- Jurisdiction over the subject-matter is determined upon the allegations made in the
complainant, irrespective of whether the plaintiff is entitled or not entitled to recover upon the
claim asserted therein - a matter resolved only after and as a result of the trial.  20

2. Dy vs. NLRC. GR No. L-68544. October 27, 1986.

- It is the Securities and Exchange Commission (SEC) and not the National Labor
RelationsCommission (NLRC) that has jurisdiction over a dispute involving the
termination of a bank manager as aresult of his non- reelection, thereto, as prescribed in
the Bank’s by –laws.
- It is no hindrance to SEC jurisdiction that a person raises in his complaint the issues that
he wasillegally dismissed and asks for remuneration where complainant is not a mere
employee but astockholder and officer of the corporation

3. Cosare vs. Broadcom. G.R. No. 201298. February 5, 2014.

-  An intra-corporate controversy, which falls within the jurisdiction

of regular courts, has been regarded in its broad sense to pertain to
disputes that involve any of the following relationships: (1) between
the corporation, partnership or association and the public; (2)
between the corporation, partnership or association and the state
in so far as its franchise, permit or license to operate is concerned;
(3) between the corporation, partnership or association and its
stockholders, partners, members or officers; and (4) among the
stockholders, partners or associates, themselves.Settled
jurisprudence, however, qualifies that when the dispute involves a
charge of illegal dismissal, the action may fall under the
jurisdiction of the LAs upon whose jurisdiction, as a rule, falls
 termination disputes and claims for damages arising from
employer-employee relations as provided in Article 217 of the
Labor Code. Consistent with this jurisprudence, the mere fact that
Cosare was a stockholder and an officer of Broadcom at the time
the subject controversy developed failed to necessarily make the
case an intra-corporate dispute.
- In Matling Industrial and Commercial Corporation v. Coros,the
Court distinguished between a "regular employee" and a "corporate
officer" for purposes of establishing the true nature of a dispute or
complaint for illegal dismissal and determining which body has
jurisdiction over it. Succinctly, it was explained that "[t]he
determination of whether the dismissed officer was a regular
employee or corporate officer unravels the conundrum" of whether
a complaint for illegal dismissal is cognizable by the LA or by the
RTC. "In case of the regular employee, the LA has jurisdiction;
otherwise, the RTC exercises the legal authority to adjudicate.
- Applying the foregoing to the present case, the LA had the
original jurisdiction over the complaint for illegal dismissal
because Cosare, although an officer of Broadcom for being its AVP
for Sales, was not a "corporate office er" as the term is defined by
law.
- There are three specific officers whom a corporation must have
under Section 25 of the Corporation Code. These are the president,
secretary and the treasurer. The number of officers is not limited to
these three. A corporation may have such other officers as may be
provided for by its by-laws like, but not limited to, the vice-
president, cashier, auditor or general manager. The number of
corporate officers is thus limited by law and by the corporations by-
laws.
- In Tabang v. NLRC, the Court also made the following
pronouncement on the nature of corporate offices: there are two
circumstances which must concur in order for an individual to be
considered a corporate officer, as against an ordinary employee or
officer, namely: (1) the creation of the position is under the
corporations charter or by-laws; and (2) the election of the officer
is by the directors or stockholders. It is only when the officer
 claiming to have been illegally dismissed is classified as such
corporate officer that the issue is deemed an intra-corporate
dispute which falls within the jurisdiction of the trial courts.
- The Court emphasized in King of Kings Transport, Inc. v. Mamac
553 Phil. 108 the standards to be observed by employers in
complying with the service of notices prior to termination:

The first written notice to be served on the employees should

contain the specific causes or grounds for termination against
them, and a directive that the employees are given the opportunity
to submit their written explanation within a reasonable period.
"Reasonable opportunity" under the Omnibus Rules means every
kind of assistance that management must accord to the employees
to enable them to prepare adequately for their defense. This should
be construed as a period of at least five (5) calendar days from
receipt of the notice to give the employees an opportunity to study
the accusation against them, consult a union official or lawyer,
gather data and evidence, and decide on the defenses they will raise
against the complaint. Moreover, in order to enable the employees
to intelligently prepare their explanation and defenses, the notice
should contain a detailed narration of the facts and circumstances
that will serve as basis for the charge against the employees. A
general description of the charge will not suffice. Lastly, the notice
should specifically mention which company rules, if any, are
violated and/or which among the grounds under Art. 282 is being
charged against the employees.
- The only officers who are specifically listed, and thus with offices
that are created under Broadcoms by-laws are the following: the
President, Vice-President, Treasurer and Secretary. Although a
blanket authority provides for the Boards appointment of such
other officers as it may deem necessary and proper, the
respondents failed to sufficiently establish that the position of AVP
for Sales was created by virtue of an act of Broadcoms board, and
that Cosare was specifically elected or appointed to such position
by the directors. No board resolutions to establish such facts form
part of the case records.
4. Suario vs. BPI. G.R. No. L-50459. August 25, 1989.

- ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters shall
have exclusive jurisdiction to hear and decide the following cases involving all workers,
whether agricultural or non-agricultural:
- (1) Unfair labor practice cases;
- (2) Unresolved issues in collective bargaining including those which involve wages, hours of
work, and other terms and conditions of employment duly indorsed by the Bureau in
accordance with the provisions of this Code;
- (3) All money claims of workers involving non-payment or underpayment of wages, overtime
or premium compensation, maternity or service incentive leave, separation pay and other
money claims arising from employer-employee relation, except claims for employee's
compensation, social security and medicare benefits and as otherwise provided in Article
128 of this Code;
- (4) Cases involving household services; and
- (5) All other cases arising from employer-employee relationship unless expressly excluded
by this Code.
- (b) The Commission shall have exclusive appellate jurisdiction over all cases decided by
Labor Arbiters, compulsory arbitrators, and voluntary arbitrators in appropriate casino
provided in Article 263 of this Code. ...

In the case of Guita v. Court of Appeals (139 SCRA 576 [1985]), we stated that:

Moral damages may be awarded to compensate one for diverse injuries such as
mental anguish, besmirched reputation, wounded feelings and social humiliation. It is
however not enough that such injuries have arisen; it is essential that they have
sprung from a wrongful act or omission of the defendant which was the proximate
cause thereof.

Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and
similar injury. Though incapable of pecuniary computation, moral damages may be
recovered if they are the proximate result of the defendant's wrongful act or
omission. (Civil Code, Article 2217).

In a long line of cases, we have consistently ruled that in the absence of a wrongful
act or omission or of fraud or bad faith, moral damages cannot be awarded. . . (R & B
Surety and Insurance Co., Inc. v. IAC, 129 SCRA 736, 743.) (p. 580)

The case of Primero v. IAC states the distinction between the two seemingly disparate causes of
action, to wit:

It is clear that the question of the legality of the act of dismissal is intimately related to
the issue of the legality of the manner by which that act of dismissal was performed.
But while the Labor Code treats of the nature of, and the remedy available as
regards the first the employee's separation from employment it does not at all deal
with the second the manner of that separation which is governed exclusively by the
Civil Code. In addressing the first issue, the Labor Arbiter applies the Labor Code; in
addressing the second, the Civil Code. And this appears to be the plain and patent
intendment of the law. For apart from the reliefs expressly set out in the Labor Code
 flowing from illegal dismiss from employment, no other damages may be awarded to
an illegally dismiss employee other than those specified by the Civil Code. Hence,
the fact that the issue of whether or not moral or other damages were suffered by an
employee and in the affirmative, the amount that should properly be awarded to him
in the circumstances is determined under the provisions of the Civil Code and not the
Labor Code. ... (P. 445)

As held in the case of Rubio v. Court of Appeals (141 SCRA 488 [1986]):

xxx xxx xxx

In a long line of cases, we have consistently ruled that in the absence of a wrongful
act or omission or of fraud or bad faith, moral damages cannot be awarded and that
the adverse result of an action does not per se make the action wrongful and subject
the actor to have payment of damages, for the law could not have meant to impose a
penalty on the right to litigate

This limitation on jurisdiction did not last long. This Court in the case of Ebon v. De Guzman, (113
SCRA 52 [1982]) explained:

Evidently, the lawmaking authority had second thoughts about depriving the Labor
Arbiters and the NLRC of the jurisdiction to award damages in labor cases because
that set up would mean duplicity of suits, splitting the cause of action and possible
conflicting findings and conclusions by two tribunals on one and the same claim.

So, on May 1, 1980, Presidential Decree No. 1691 (which substantially reenacted
Article 217 in its original form) nullified Presidential Decree No. 1367 and restored to
the Labor Arbiters and the NLRC their jurisdiction to award all kinds of damages in
cases arising from employer-employee relations (Pepsi-Cola Bottling Company of the
Philippines v. Martinez, G.R. No. 58877).

It is now well settled that money claims of workers provided by law over which the labor arbiter has
original and exclusive jurisdiction are comprehensive enough to include claims for moral damages of
a dismissed employee against his employer. (Vargas v. Akai Phil. Inc., 156 SCRA 531 [1987]).

On the issue whether or not the petitioner is entitled to his claim for moral damages, we are
constrained to decide in the negative. The case of Primero v. Intermediate Appellate Court, (156
SCRA 435 [1987]) expounded on this matter, to wit:

5. UERM Employees Association vs. Secretary of Labor. G.R. No. 75838. August 31, 1989.

- Article 263 of the Labor Code, paragraph (g) provides:

- (g) When in his opinion there exists a labor dispute causing or likely to cause strikes or
lockouts adversely affecting the national interest, such as may occur in but not limited to
public utilities, companies engaged in the generation or distribution of energy, banks,
hospitals, and export-oriented industries, including those within export processing zones, the
Minister of Labor and Employment shall 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 return to work and the employer shall immediately resume operations and
readmit all workers under the same terms and conditions prevailing before the strike or
lockout. . . . . (Italics supplied.)
- With respect to service of orders and/or decisions, Rule 13 of the Rules of Court states:
- SEC. 2. Papers to be filed and served. - Every order required by its terms to be served,
every pleading subsequent to the complaint, every written motion other than one which may
be heard ex parte, and every written notice, appearance, demand, offer of judgment or
similar papers shall be filed with the court, and served upon the parties affected thereby. If
any of such parties has appeared by an attorney or attorneys, service upon him shall be
made upon his attorneys or one of them, unless service upon the party himself is ordered by
the court. Where one attorney appears for several parties, he shall only be entitled to one
copy of any paper served upon him by the opposite side.
- Article 262 of the Labor Code provides that voluntary arbitration awards or decisions shall be
final, unappealable and executory. Under similar circumstances, this Court held that the
decision of the voluntary arbitrator should be immediately implemented for nothing could be
clearer than the fact that private respondent had no choice but to comply with said
decision .   The union could have appealed under Section 5, Rule XI of the implementing
23

rules of the Labor Code to the National Labor Relations Commission within ten (10) days
from receipt of the voluntary arbitrator's decision, on the grounds of abuse of discretion and
gross incompetence of the voluntary arbitrator, but petitioner did not only fail to avail itself of
said remedy but its members also had received the P 20 salary increase for 1984.   Hence,
24

the respondent Minister could not have decreed an award any thing more than what was
granted by the voluntary arbitrator. His June 6, 1986 decision is but a reiteration thereof.

6. JGB and Associates vs. NLRC. G.R. No. 109390 March 7, 1996.
- Employees enjoy security of tenure; they can only be dismissed for just cause and only after
due process.  If an employee is dismissed without just cause, he is entitled to reinstatement
5

with backwages up to the time of his actual reinstatement,  if the contract of employment is
6

not for a definite period; or to the payment of his salaries corresponding to the unexpired
portion of the employment contract, if the contract is for a definite period.  If the dismissal is
7

for a just cause but it was made without due process, the employee is entitled to the
payment of an indemnity. 8

-  We have already held in a number of cases  that a deed of release or quitclaim can not bar
4

an employee from demanding what is legally due him. The reason for this is that the
employee does not really stand on an equal footing with his employer. In some cases he
may be so penurious that he is willing to bargain even rights secured to him by law. There is
good reason for applying this ruling here because private respondent was made to sign the
deed of quitclaim in this case on the same day he was dismissed. He was in a foreign
country and he had no one to help him. In three days he was due for repatriation to the
Philippines. He had no means of questioning his employer's acts. He had no choice but to
accept what was being offered to him. Necessitous men are not free men.

7. BPI Employees Union – ALU vs. NLRC. G.R. No. L 69746-47. March 31, 1989.

Art. 222. Appearances and Fees.- . . .

 (b) No attorney's fees, negotiation fees or similar charges of any kind arising from
any collective bargaining negotiations or conclusions of the collective agreement
shall be imposed on any individual member of the contracting union: Provided,
however, that attorney's fees may be charged against union funds in an amount to
be agreed upon by the parties. Any contract, agreement or arrangement of any sort
to the contrary shall be null and void.

- The Court reads the afore-cited provision as prohibiting the payment of attorney's
fees only when it is effected through forced contributions from the workers from their
own funds as distinguished from the union funds. The purpose of the provision is to
prevent imposition on the workers of the duty to individually contribute their
respective shares in the fee to be paid the attorney for his services on behalf of the
union in its negotiations with the management. The obligation to pay the attorney's
fees belongs to the union and cannot be shunted to the workers as their direct
responsibility. Neither the lawyer nor the union itself may require the individual
workers to assume the obligation to pay the attorney's fees from their own pockets.
So categorical is this intent that the law also makes it clear that any agreement to the
contrary shall be null and void ab initio.

8. Dayag vs. Canizares. G.R. No. 124193. March 6, 1998

- Section 1. Venue. (a) All cases which Labor Arbiters have authority to
hear and decide may be filed in the Regional Arbitration Branch
having jurisdiction over the workplace of the complainant/petitioner.
- For purposes of venue, workplace shall be understood as the place or
locality where the employee is regularly assigned when the cause of
action arose. It shall include the place where the employee is
supposed to report back after a temporary detail, assignment or
travel. In the case of field employees, as well as ambulant or itinerant
workers, their workplace is where they are regularly assigned, or
where they are supposed to regularly receive their salaries/wages or
work instructions from, and report the results of their assignment to,
their employers.
-  Section 4. Hearing of Motion. Except for motions which the court
may act upon without prejudicing the rights of the adverse party,
every written motion shall be set for hearing by the applicant.
- Every written motion required to be heard and the notice of the
hearing thereof shall be served in such a manner as to ensure its
receipt by the other party at least three (3) days before the date of the
hearing, unless the court for good cause sets the hearing on shorter
notice.
- Section 5. Notice of hearing. The notice of hearing shall be addressed
to all parties concerned, and shall specify the time and date of the
 hearing which must not be later than ten (10) days after the filing of
the motion.
- citing Sweet Lines vs. Teves,[14] held that:
- "An agreement will not be held valid where it practically negates the
action of the claimant, such as the private respondents herein. The
philosophy underlying the provisions on transfer of venue of actions
is the convenience of the plaintiffs as well as his witnesses and to
promote the ends of justice. Considering the expense and trouble a
passenger residing outside Cebu City would incur to prosecute a claim
in the City of Cebu, he would probably decide not to file the action at
all. The condition will thus defeat, instead of enhance, the ends of
justice. Upon the other hand, petitioner had branches or offices in the
respective ports of call of the vessels and could afford to litigate in any
of these places. Hence, the filing of the suit in the CFI of Misamis
Oriental, as was done in the instant case will not cause inconvenience
to, much less prejudice petitioner."
- In the recent case of Sulpicio Lines, Inc. vs. NLRC[12] this Court held
that the question of venue essentially pertains to the trial and relates
more to the convenience of the parties rather than upon the substance
and merits of the case. It underscored the fact that the permissive
rules underlying provisions on venue are intended to assure
convenience for the plaintiff and his witnesses and to promote the
ends of justice. With more reason does the principle find applicability
in cases involving labor and management because of the doctrine
well-entrenched in our jurisdiction that the State shall afford full
protection to labor. The Court held that Section 1(a), Rule IV of the
NLRC Rules of Procedure on Venue was merely permissive. In its
words:
- "This provision is obviously permissive, for the said section uses the
word 'may,' allowing a different venue when the interests of
substantial justice demand a different one. In any case, as stated
earlier, the Constitutional protection accorded to labor is a
paramount and compelling factor, provided the venue chosen is not
altogether oppressive to the employer."
-

9. Philtranco vs. NLRC. G.R. No. 124100. April 1, 1998.

- Sulpicio Lines, Inc. vs. NLRC  is exactly in point. In said case, we held that:
7
 - Section 1, Rule IV of the 1990 NLRC Rules additionally provides that, "for purposes of
venue, workplace shall be understood as the place or locality where the employee is
regularly assigned when the cause of action arose." Since the private respondent's regular
place of assignment is the vessel MV Cotabato Princess which plies the Manila-Estancia-
Iloilo-Zamboanga-Cotabato route, we are of the opinion that Labor Arbiter Arthur L. Amansec
was correct in concluding that Manila could be considered part of the complainant's territorial
workplace.

- From the foregoing, it is obvious that the filing of the complaint with the National Capital
Region Arbitration Branch was proper, Manila being considered as part of Nieva's workplace
by reason of his plying the Legaspi City — Pasay City route.

-  In Dayag vs. NLRC,  this Court held that:

6

- This provision is obviously permissive, for the said section uses the word "may," allowing a
different venue when the interests of substantial justice demand a different one. In any case,
as stated earlier, the Constitutional protection accorded to labor is a paramount and
compelling factor, provided the venue chosen is not altogether oppressive to the employer.

- the labor arbiter, in finding that Nieva did not abandon his job, held that:

- Complainant categorically stated in his position paper and Sinumpaang Salaysay that on 15

October 1989 he was instructed by Epifanio Llado, respondent company's administrative
officer, not to drive his vehicle until the case filed by the PC Colonel arising from the
vehicular accident is settled. This assertion repeatedly made by complainant was never
refuted by respondent. Such being the case, the respondent cannot conveniently contend
that the absence of complainant was without permission. 9

- he labor arbiter considered Nieva's absence from work as not equivalent to abandonment.
We agree. Time and again, we have held that the immediate filing of a complaint for illegal
dismissal by an employee, as in this case, is inconsistent with abandonment. 1

Study:
Articles 229-232 of the Labor Code
Cases:
VENUE

1. Dayag vs. Canizares. G.R. No. 124193. March 6, 1998

2. Philtranco vs. NLRC. G.R. No. 124100. April 1, 1998. DONE

APPEAL
3. Borja Estate vs. Ballad. G.R. No. 152550. June 8, 2005.
- Thus, it is clear from the foregoing that the appeal from any decision, award or order of the
Labor Arbiter to the NLRC shall be made within ten (10) calendar days from receipt of such
decision, award or order, and must be under oath, with proof of payment of the required
appeal fee accompanied by a memorandum of appeal. In case the decision of the Labor
Arbiter involves a monetary award, the appeal is deemed perfected only upon the posting of
a cash or surety bond also within ten (10) calendar days from receipt of such decision in an
amount equivalent to the monetary award.3

- The intention of the lawmakers to make the bond an indispensable requisite for the
perfection of an appeal by the employer is underscored by the provision that an appeal may
be perfected "only upon the posting of a cash or surety bond." The word "only" makes it
perfectly clear that the lawmakers intended the posting of a cash or surety bond by the
employer to be the exclusive means by which an employer’s appeal may be considered
completed.36 The law however does not require its outright payment, but only the posting of a
bond to ensure that the award will be eventually paid should the appeal fail. What petitioners
have to pay is a moderate and reasonable sum for the premium of such bond.

- Rule VI of the New Rules of Procedure of the NLRC implements this Article with its Sections
1, 3, 5, 6 and 7 providing pertinently as follows:
- Section. 1. Periods of Appeal.- Decisions, awards, or orders of the Labor Arbiter and the
POEA Administrator shall be final and executory unless appealed to the Commission by any
or both parties within ten (10) calendar days from receipt of such decisions, awards or orders
of the Labor Arbiter or of the Administrator, and in case of a decision of the Regional Director
or his duly authorized Hearing Officer within five (5) calendar days from receipt of such
decisions, awards or orders . . .
- Section 3. Requisites for Perfection of Appeal.–(a) The appeal shall be filed within the
reglementary period as provided in Sec. 1 of this Rule; shall be under oath with proof of
payment of the required appeal fee and the posting of a cash or surety bond as provided in
Sec. 5 of this Rule; shall be accompanied by memorandum of appeal which shall state the
grounds relied upon and the arguments in support thereof; the relief prayed for; and a
statement of the date when the appellant received the appealed decision, order or award
and proof of service on the other party of such appeal.
- A mere notice of appeal without complying with the other requisite aforestated shall not stop
the running of the period for perfecting an appeal.
- Section 5. Appeal Fee.— The appellant shall pay an appeal fee of One hundred (₱100.00)
pesos to the Regional Arbitration Branch, Regional Office, or to the Philippine Overseas
Employment Administration and the official receipt of such payment shall be attached to the
records of the case.
- Section 6. Bond.— In case the decision of the Labor Arbiter, the Regional Director or his duly
authorized Hearing Officer involves a monetary award, an appeal by the employer shall be
perfected only upon the posting of a cash or surety bond, which shall be in effect until final
disposition of the case, issued by a reputable bonding company duly accredited by the
Commission or the Supreme Court in an amount equivalent to the monetary award,
exclusive of damages and attorney’s fees.

- The Commission may, in justifiable cases and upon Motion of the Appellant, reduce the
amount of the bond. The filing of the motion to reduce bond shall not stop the running of the
period to perfect appeal.
 - Section 7. No extension of Period.- No motion or request for extension of the period within
which to perfect an appeal shall be allowed.

- Thus, it is clear from the foregoing that the appeal from any decision, award or order of the
Labor Arbiter to the NLRC shall be made within ten (10) calendar days from receipt of such
decision, award or order, and must be under oath, with proof of payment of the required
appeal fee accompanied by a memorandum of appeal. In case the decision of the Labor
Arbiter involves a monetary award, the appeal is deemed perfected only upon the posting of
a cash or surety bond also within ten (10) calendar days from receipt of such decision in an
amount equivalent to the monetary award.3

- he word "may", on the other hand refers to the perfection of an appeal as optional on the part
of the defeated party, but not to the posting of an appeal bond, if he desires to appeal. 38

- Evidently, the posting of a cash or surety bond is mandatory. And the perfection of an appeal
in the manner and within the period prescribed by law is not only mandatory but
jurisdictional.39 To extend the period of the appeal is to delay the case, a circumstance which
would give the employer the chance to wear out the efforts and meager resources of the
worker to the point that the latter is constrained to give up for less than what is due him. 40 As
ratiocinated in the case of Viron Garments Mftg. v. NLRC:41

- The requirement that the employer post a cash or surety bond to perfect its/his appeal is
apparently intended to assure the workers that if they prevail in the case, they will receive the
money judgment in their favor upon the dismissal of the employer’s appeal. It was intended
to discourage employers from using an appeal to delay, or even evade, their obligation to
satisfy their employees’ just and lawful claims.

- In the case at bar, while the petitioners’ Appeal Memorandum and Motion for Reduction of

Bond, which was annexed thereto, were both filed on time, 43 the appeal was not perfected by
reason of the late filing and deficiency of the amount of the bond for the monetary award with
no explanation offered for such delay and inadequacy.

- As there was no appeal bond filed together with the Appeal Memorandum within the ten (10)-
day period provided by law for the perfection of appeal, it follows that no appeal from the
decision of the Labor Arbiter had been perfected. 44 Accordingly, the Decision of the Labor
Arbiter became final and executory upon the expiration of the reglementary period.

4. McBurnie vs. Ganzon. G.R. No. 178034. October 17, 2013.

- At the outset, the Court emphasizes that second and subsequent

motions for reconsideration are, as a general rule,
prohibited.Section 2, Rule 52 of the Rules of Court provides that
n]o second motion for reconsideration of a judgment or final
resolution by the same party shall be entertained. The rule rests on
the basic tenet of immutability of judgments.t some point, a
 decision becomes final and executory and, consequently, all
litigations must come to an end
- The general rule, however, against second and subsequent motions
for reconsideration admits of settled exceptions. In a line of cases,
the Court has then entertained and granted second motions for
reconsideration n the higher interest of substantial justice,as
allowed under the Internal Rules when the assailed decision is
legally erroneous,patently unjust and potentially capable of causing
unwarranted and irremediable injury or damage to the parties. In
Tirazona v. Philippine EDS Techno-Service, Inc. (PET, Inc.), we
also explained that a second motion for reconsideration may be
allowed in instances of xtraordinarily persuasive reasons and only
after an express leave shall have been obtained.In Apo Fruits
Corporation v. Land Bank of the Philippines, we allowed a second
motion for reconsideration as the issue involved therein was a
matter of public interest, as it pertained to the proper application
of a basic constitutionally-guaranteed right in the government
implementation of its agrarian reform program.In San Miguel
Corporation v. NLRC, the Court set aside the decisions of the LA
and the NLRC that favored claimants-security guards upon the
Court review of San Miguel Corporation second motion for
reconsideration.In Vir-Jen Shipping and Marine Services, Inc. v.
NLRC, et al., the Court en banc reversed on a third motion for
reconsideration the ruling of the Court Division on therein private
respondentsclaim for wages and monetary benefits.
- In League of Cities of the Philippines (LCP) v. Commission on
Elections, we reiterated a ruling that when a motion for leave to file
and admit a second motion for reconsideration is granted by the
Court, the Court therefore allows the filing of the second motion for
reconsideration.In such a case, the second motion for
reconsideration is no longer a prohibited pleading. Similarly in this
case, there was then no reason for the Court to still consider the
respondent's second motion for reconsideration as a prohibited
pleading, and deny it plainly on such ground.The Court intends to
remedy such error through this resolution.
- The crucial issue in this case concerns the sufficiency of the appeal
bond that was posted by the respondents. The present rule on the
matter is Section 6, Rule VI of the 2011 NLRC Rules of Procedure,
which was substantially the same provision in effect at the time of
the respondents appeal to the NLRC, and which reads: No motion
to reduce bond shall be entertained except on meritorious grounds
and upon the posting of a bond in a reasonable amount in relation
to the monetary award. The filing of the motion to reduce bond
without compliance with the requisites in the preceding paragraph
shall not stop the running of the period to perfect an appeal.
- While the CA, in this case, allowed an appeal bond in the reduced
amount of P10,000,000.00 and then ordered the case remand to
the NLRC, this Court Decision dated September 18, 2009 provides
otherwise, as it reads in part: While the bond may be reduced upon
motion by the employer, this is subject to the conditions that (1)
the motion to reduce the bond shall be based on meritorious
grounds; and (2) a reasonable amount in relation to the monetary
award is posted by the appellant, otherwise the filing of the motion
to reduce bond shall not stop the running of the period to perfect
an appeal.The qualification effectively requires that unless the
NLRC grants the reduction of the cash bond within the 10-day
reglementary period, the employer is still expected to post the cash
or surety bond securing the full amount within the said 10-day
period.If the NLRC does eventually grant the motion for reduction
after the reglementary period has elapsed, the correct relief would
be to reduce the cash or surety bond already posted by the
employer within the 10-day period.
- LABOR LAW: suspension of the period to perfect the
appeal upon the filing of a motion to reduce bond

To clarify, the prevailing jurisprudence on the matter provides that

the filing of a motion to reduce bond, coupled with compliance with
the two conditions emphasized in Garcia v. KJ Commercial for the
grant of such motion, namely, (1) a meritorious ground, and (2)
posting of a bond in a reasonable amount, shall suffice to suspend
the running of the period to perfect an appeal from the labor
 arbiter decision to the NLRC. To require the full amount of the
bond within the 10-day reglementary period would only render
nugatory the legal provisions which allow an appellant to seek a
reduction of the bond.
- The rule that the filing of a motion to reduce bond shall not stop
the running of the period to perfect an appeal is not absolute. The
Court may relax the rule. In Intertranz Container Lines, Inc. v.
Bautista, the Court held: Jurisprudence tells us that in labor cases,
an appeal from a decision involving a monetary award may be
perfected only upon the posting of cash or surety bond.The Court,
however, has relaxed this requirement under certain exceptional
circumstances in order to resolve controversies on their
merits.These circumstances include: (1) fundamental consideration
of substantial justice; (2) prevention of miscarriage of justice or of
unjust enrichment; and (3) special circumstances of the case
combined with its legal merits, and the amount and the issue
involved.
- LABOR LAW: allowance of the reduction of appeal bonds

Time and again, the Court has cautioned the NLRC to give Article
223 of the Labor Code, particularly the provisions requiring bonds
in appeals involving monetary awards, a liberal interpretation in
line with the desired objective of resolving controversies on the
merits.
- Although the general rule provides that an appeal in labor cases
from a decision involving a monetary award may be perfected only
upon the posting of a cash or surety bond, the Court has relaxed
this requirement under certain exceptional circumstances in order
to resolve controversies on their merits.These circumstances
include: (1) the fundamental consideration of substantial justice;
(2) the prevention of miscarriage of justice or of unjust enrichment;
and (3) special circumstances of the case combined with its legal
merits, and the amount and the issue involved. Guidelines that are
applicable in the reduction of appeal bonds were also explained in
Nicol v. Footjoy Industrial Corporation. The bond requirement in
appeals involving monetary awards has been and may be relaxed in
 meritorious cases, including instances in which (1) there was
substantial compliance with the Rules, (2) surrounding facts and
circumstances constitute meritorious grounds to reduce the bond,
(3) a liberal interpretation of the requirement of an appeal bond
would serve the desired objective of resolving controversies on the
merits, or (4) the appellants, at the very least, exhibited their
willingness and/or good faith by posting a partial bond during the
reglementary period.
- To ensure that the provisions of Section 6, Rule VI of the NLRC
Rules of Procedure that give parties the chance to seek a reduction
of the appeal bond are effectively carried out, without however
defeating the benefits of the bond requirement in favor of a
winning litigant, all motions to reduce bond that are to be filed with
the NLRC shall be accompanied by the posting of a cash or surety
bond equivalent to 10% of the monetary award that is subject of the
appeal, which shall provisionally be deemed the reasonable amount
of the bond in the meantime that an appellant motion is pending
resolution by the Commission.In conformity with the NLRC Rules,
the monetary award, for the purpose of computing the necessary
appeal bond, shall exclude damages and attorney fees. Only after
the posting of a bond in the required percentage shall an appellant
period to perfect an appeal under the NLRC Rules be deemed
suspended.

5. Roche Philippines vs NLRC. G.R. No. 83335 October 5, 1989

- Petitioners next assail the legality of the order of reinstatement made by the respondent
commission by citing San Miguel Corporation vs. NLRC   where this Court found that
11

reinstatement was improper whenever the termination of an employee was due to breach of
trust and confidence. Quoting certain passages from the decision of this Court in the
subsequent case of Wenphil Corporation vs. NLRC and Mallare,   petitioners tried to
12

buttress this line of reasoning by stating that the termination of an employee was proper
since "it would be highly prejudicial to the interests of the employer to impose on him the
services of an employee who has been shown to be guilty of the charges that warranted his
dismissal from employment."  13

-  In Wenphil, the employee was dismissed for his insubordination since he had flagrantly
violated company policy by engaging in a brawl with another employee within the company
premises. Likewise, in San Miguel Corporation, the employee was dismissed for having
misappropriated company funds. The said funds were disbursed by the company to be used
in posting bail for the said employee when the latter was criminally charged with damage to
 property through reckless imprudence. Upon the dismissal of the case, the employee
deposited the cash bond in his account instead of returning the said amount to the company.
No reasonable explanation was given by him when confronted by his superiors. Considering
the gravity of the offenses, taken together with the evidence presented against the said
employees, this Court found their dismissal to be proper.
-  Hence, the failure of the petitioner to prove such fact "necessarily means that the dismissal
is not justified, and, therefore, the employee is entitled to be reinstated in accordance with
the mandate of Article 280 of the New Labor Code."   Subsequent pronouncements of this
14

Court reiterate this doctrine. For instance, in Dabuet vs. Roche Pharmaceuticals,   this Court
15

held that reinstatement must follow as a matter of right whenever the management has been
found guilty of illegal dismissal.

- The collective bargaining agreement entered into between the management and the union
provides for an optional retirement program for employees who have been with the company
for fifteen (15) consecutive years. The company undertook to pay the basic pay for one
month multiplied by the number of years the employee has served the company for the first
15 years and a month and a half's basic salary for every year for the subsequent years.

- The provisions of the collective bargaining agreement must be respected since its terms and
conditions "constitute the law between the parties." Those who are entitled to its benefits can
invoke its provisions. In the event that an obligation therein imposed is not fulfilled, the
aggrieved party has the right to go to court for redress. 16

DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES

6. Salinas vs. NLRC. G.R. No. 114671. November 24, 1999.
- It is basic and irrefragable rule that in carrying out and interpreting the provisions of the
Labor Code and its implementing regulations, the workingman's welfare should be the
primordial and paramount consideration. The interpretation herein made gives meaning and
substance to the liberal and compassionate spirit of the law enunciated in Article 4 of Labor
Code that "all doubts in the implementation and interpretation of the provisions of the Labor
Code including its implementing rules and regulations shall be resolved in favor of labor".  19

- It is significant to note that the notice of termination requirement has been retained under
Section 6.1 of D.O. No. 19, viz: 
17

- 6.1. Requirements of labor and social legislations. — (a) The construction company and the
general contractor and/or subcontractor referred to in Sec. 2.5 shall be responsible for the
workers in its employ on matters of compliance with the requirements of existing laws and
regulations on hours of work, wages, wage-related benefits, health, safety and social welfare
benefits, including submission to the DOLE-Regional Office of Work Accident/Illness Report,
Monthly Report on Employees' Terminations/Dismissals/Suspensions and other reports. . . .
(Emphasis supplied)
 - The mandate in Article 281 of the Labor Code, which pertinently prescribes that the
"provisions of written agreement to the contrary notwithstanding and regardless of the oral
agreements of the parties, an employment shall be deemed to be regular where the
employee has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer" and that "any employee who has rendered at
least one year of service, whether such service is continuous or broken shall be considered a
regular employee with respect to the activity in which he is employed and his employment
shall continue while such actually exists," should apply in the case of petitioner
(Samson).  15

- With regard to the issue on non-exhaustion of administrative remedies, the Court hold that
the failure of petitioners to interpose a motion for reconsideration of the NLRC decision
before coming to this Court was not a fatal omission. The exhaustion of administrative
remedies doctrine is not a hard and fast rule and does not apply where the issue is purely a
legal one.   A motion for reconsideration as a prerequisite for the bringing of an action under
22

Rule 65 may be dispensed with where the issue is purely of law, as in this case.   At all
23

events and in the interest of substantial justice, especially in cases involving the rights of
workers, procedural lapses, if any, may be disregarded to enable the Court to examine and
resolve the conflicting rights and responsibilities of the parties. This liberality is warranted in
the case at bar, especially since it has been shown that the intervention of the Court is
necessary for the protection of the herein petitioner(s). 2

EXECUTION
7. Session Delights Ice Cream and Fast Foods vs. CA. G.R. No. 172149. February 8, 2010.

- We state at the outset that, as a rule, we frown upon any delay in

the execution of final and executory decisions, as the immediate
enforcement of the parties rights, confirmed by a final decision, is a
major component of the ideal administration of justice. We admit,
however, that circumstances may transpire rendering delay
unavoidable. One such occasion is when the execution of the final
judgment is not in accord with what the final judgment decrees in
its dispositive portion. Just as the execution of a final judgment is a
matter of right for the winning litigant who should not be denied
the fruits of his or her victory, the right of the losing party to give,
perform, pay, and deliver only what has been decreed in the final
judgment should also be respected.
- That a judgment should be implemented according to the terms of
its dispositive portion is a long and well-established rule. Otherwise
stated, it is the dispositive portion that categorically states the
rights and obligations of the parties to the dispute as against each
other. Thus, it is the dispositive portion which the entities charged
with the execution of a final judgment that must be enforced to
ensure the validity of the execution.
- A companion to the above rule on the execution of a final judgment
is the principle of its immutability. Save for recognized exceptions,
a final judgment may no longer be altered, amended or modified,
even if the alteration, amendment or modification is meant to
correct what is perceived to be an erroneous conclusion of fact or
law and regardless of what court, be it the highest Court of the
land, renders it. Any attempt on the part of the responsible entities
charged with the execution of a final judgment to insert, change or
add matters not clearly contemplated in the dispositive portion
violates the rule on immutability of judgments.
- A distinct feature of the judgment under execution is that the
February 8, 2001 labor arbiter decision already provided for the
computation of the payable separation pay and backwages due, and
did not literally order the computation of the monetary awards up
to the time of the finality of the judgment. The private respondent,
too, did not contest the decision through an appeal. The petitioners
argument to confine the awards to what the labor arbiter stated in
the dispositive part of his decision is largely based on these
established features of the judgment.
- rticle 279 of the Labor Code, as amended, which reads:
-
x x x An employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to
his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his
actual reinstatement.
- Principles: Just as the execution of a final judgment is a matter of right for the...
winning litigant who should not be denied the fruits of his or her victory, the right of
the losing party to give, perform, pay, and deliver only what has been decreed in the
final judgment should also be respected.
 - principle of its immutability.
- a final judgment may no longer be altered, amended or modified, even if the
alteration, amendment or modification is... meant to correct what is perceived to be
an erroneous conclusion of fact or law and regardless of what court, be it the highest
Court of the land, renders it.
- A source of misunderstanding in implementing the final decision in this case
proceeds from the way the original labor arbiter framed his decision. The decision
consists essentially of two parts.
- The first is that part of the decision that cannot now be disputed because it has been
confirmed with finality. This is the finding of the illegality of the dismissal and the
awards of separation pay in lieu of reinstatement, backwages, attorney's fees, and
legal... interests.
- The second part is the computation of the awards made. On its face, the
computation the labor arbiter made shows that it was time-bound as can be seen
from the figures used in the computation. This part, being merely a computation of
what the first part of the decision... established and declared, can, by its nature, be
re-computed. This is the part, too, that the petitioner now posits should no longer be
re-computed because the computation is already in the labor arbiter's decision that
the CA had affirmed. The public and private respondents, on... the other hand, posit
that a re-computation is necessary because the relief in an illegal dismissal decision
goes all the way up to reinstatement if reinstatement is to be made, or up to the
finality of the decision, if separation pay is to be given in lieu reinstatement.

Titles III & IV of Book 5 (Arts. 226 to 242)

Cases:

(Registration)
1. MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD
(MSMGUWP),bet al. vs. CRESENCIO J. RAMOS. G.R. No. 113907. February 28, 2000.
- There is nothing irregular in the temporary designation of an NLRC Commissioner from one division to
complete another division, for the law empowers the Chairman to make temporary assignments whenever
the required concurrence is not met; The territorial divisions of the National Labor Relations Commission do
not confer exclusive jurisdiction to each division and are merely designed for administrative efficiency .—
- Collective Bargaining Agreements; Union Security Clauses; Due Process; Although union security clauses
embodied in the collective bargaining agreement may be validly enforced and dismissals pursuant thereto
may likewise be valid, this does not erode the fundamental requirement of due process .
- An employer cannot rely merely upon a labor federation’s allegations in terminating union officers expelled
by the federation for allegedly committing acts of disloyalty and lor inimical to the interest of the federation
and in violation of its Constitution and By-Laws—the company must also inquire into the cause of the
expulsion and whether or not the federation had sufficient grounds to effect the same .
- Same; The right of an employee to be informed of the charges against him and to reasonable opportunity
to present his side in a controversy with either the company or his own union is not wiped away by a union
security clause or a union shop clause in a collective bargaining agreement
- Even assuming that a federation had valid grounds to expel union officers, due process requires that these
union officers be accorded a separate hearing by the company.—– 
- Intra-Union Disputes; Illegal Dismissal; While it is true that the issue of expulsion of local union officers is
originally between the local union and the federation, hence, intraunion in character, the issue is later on
converted into a termination dispute when the company dismisses the union officers from work without the
benefit of a separate notice and hearing; Notwithstanding the fact that the dismissal was at the instance of
a labor federation which undertook to hold the company free from any liability resulting from such a
dismissal, the company may still be held liable if it was remiss in its duty to accord the would-be dismissed
employees their right to be heard on the matter.

- The Supreme Court will not uphold erroneous conclusions of the National Labor Relations Commission as
when it finds insufficient or insubstantial evidence on record to support those factual; findings, or when it is
perceived that far too much is coneluded, inferred or deduced from the bare or incomplete facts appearing
of record.—–It is well-settled that findings of facts of the NLRC are entitled to great respect and are
generally binding on this Court, but it is equally well-settled that the Court will not uphold erroneous
conclusions of the NLRC as when the Court finds insufficient or insubstantial evidence on record to support
those factual findings. The same holds true when it is perceived that far too much is concluded, inferred or
deduced from the bare or incomplete facts appearing of record.
- A local union has the right to disaffiliate from its mother union or declare its autonomy, and such
disaffiliation cannot be considered disloyalty; In the absence of specific provisions in the federation’s
constitution prohibiting disaffiliation or the declaration of autonomy of a local union, a local union may
dissociate from its parent union

- ; Unfair Labor Practices; Even if the allegations of unfair labor practice are subsequently found out to be
untrue, the presumption of legality of the strike prevails .—–On the submission that the strike was illegal for
being grounded on a non-strikeable issue, that is, the intra-union conflict between the federation and the
local union, it bears reiterating that when respondent company dismissed the union officers, the issue was
transformed into a termination dispute and brought respondent company into the picture. Petitioners
believed in good faith that in dismissing them upon request by the federation, respondent company was
guilty of unfair labor practice in that it violated the petitioner’s right to self-organization. The strike was
staged to protest respondent company’s act of dismissing the union officers. Even if the allegations of unfair
- A no strike, no lockout provision can only be invoked when the strike is economic in nature, i.e., to force
wage or other concessions from the employer which he is not required by law to grant .—–Another reason
why the Labor Arbiter declared the strike illegal is due to the existence of a no strike, no lockout provision in
the CBA. Again, such a ruling is erroneous. A no strike, no lock out provision can only be invoked when the
strike is economic in nature, i.e. to force wage or other concessions from the employer which he is not
required by law to grant. Such a provision cannot be used to assail the legality of a strike which is grounded
on unfair labor practice, as was the honest belief of herein petitioners. Again, whether or not there was
indeed unfair labor practice does not affect the strike.
- Where violence was committed on both sides during a strike, such violence cannot be a ground for
declaring the strike as illegal .—–On the allegation of violence committed in the course of the strike, it must
be remembered that the Labor Arbiter and the Commission found that “the parties are agreed that there
were violent incidents x x x resulting to injuries to both sides, the union and management.” The evidence on
record show that the violence cannot be attributed to the striking employees alone for the company itself
employed hired men to pacify the strikers. With violence committed on both sides, the management and the
employees, such violence cannot be a ground for declaring the strike as illegal.
- Requisites.—–Jurisprudence holds that for abandonment of work to exist, it is essential (1) that the
employee must have failed to report for work or must have been absent without valid or justifiable reason;
and (2) that there must have been a clear intention to sever the employer-employee relationship manifested
by some overt acts. Deliberate and unjustified refusal on the part of the employee to go back to his work
post and resume his employment must be established. Absence must be accompanied by overt acts
unerringly pointing to the fact that the employee simply does not want to work anymore. And the burden of
proof to show that there was unjustified refusal to go back to work rests on the employer.
- The filing of a complaint for illegal dismissal is inconsistent with the allegation of abandonment. —–This
Court has ruled that an employee who took steps to protest his lay-off cannot be said to have abandoned
his work. The filing of a complaint for illegal dismissal is inconsistent with the allegation of abandonment. In
the case under consideration, the petitioners did, in fact, file a complaint when they were refused
reinstatement by respondent company.
 - Union Security Clauses; Unfair Labor Practices; Due Process; Dismissals pursuant to union security clauses
are valid and legal subject only to the requirement of due process; Dismissal of an employee by the
company pursuant to a labor union’s demand in accordance with a union security agreement does not
constitute unfair labor practice.—–Anent public respondent’s finding that there was no unfair labor practice
on the part of respondent company and federation officers, the Court sustains the same. As earlier
discussed, union security clauses in collective bargaining agreements, if freely and voluntarily entered into,
are valid and binding. Corrolarily, dismissals pursuant to union security clauses are valid and legal subject
only to the requirement of due process, that is, notice and hearing prior to dismissal. Thus, the dismissal of
an employee by the company pursuant to a labor union’s demand in accordance with a union security
agreement does not constitute unfair labor practice.

2. PROGRESSIVE DEVELOPMENT CORPORATION vs. SECRETARY OF LABOR AND

EMPLOYMENT. G.R. No. 96425. February 4, 1992.

- ; Certification Election; Court has repeatedly stressed that the holding of a certification election is based on
a statutory policy that cannot be circumvented. The workers must be allowed to freely express their choice
in a determination where everything is open to their sound judgment and the possibility of fraud and
misrepresentation is eliminated.
- Article 242 enumerates the exclusive rights of a legitimate labor organization among which is the right to be
certified as the exclusive representative of all the employees in an appropriate collective bargaining unit for
purposes of collective bargaining.—But while Article 257 cited by the Solicitor General directs the automatic
conduct of a certification election in an unorganized establishment, it also requires that the petition for
certification election must be filed by a legitimate labor organization. Article 242 enumerates the exclusive
rights of a legitimate labor organization among which is the right to be certified as the exclusive
representative of all the employees in an appropriate collective bargaining unit for purposes of collective
bargaining.
- legitimate labor organization as "any labor organization duly registered with the DOLE and  includes any
branch or local thereof." (Italics supplied) Rule I, Section 1(j), Book V of the Implementing Rules likewise
defines a legitimate labor organization as "any labor organization duly registered with the DOLE
and includes any branch, local or affiliate thereof."
- A labor organization acquires legitimacy only upon registration with the BLR

- But when an unregistered union becomes a branch, local or chapter of a federation, some of the
aforementioned requirements for registration are no longer required.
- ; The intent of the law in imposing lesser requirements in the case of a branch or local of a registered
federation or national union is to encourage the affiliation of a local union with a federation, or national
union in order to increase the local union's bargaining powers respecting terms and conditions of labor.—
Undoubtedly, the intent of the law in imposing lesser requirements in the case of a branch or local of a
registered federation or national union is to encourage the affiliation of a local union with a federation or
national union in order to increase the local union's bargaining powers respecting terms and conditions of
labor.
- ; The certification and attestation requirements are preventive measures against the commission of fraud. —
The certification and attestation requirements are preventive measures against the commission of fraud.
They likewise afford a measure of protection to unsuspecting employees who may be lured into joining
unscrupulous or fly-by-night unions whose sole purpose is to control union funds or to use the union for
dubious ends.
- Requirements before a local or chapter becomes a legitimate labor organization. —A local or chapter
therefore becomes a legitimate labor organization only upon submission of the following to the BLR: 1) A
charter certificate, within 30 days from its issuance by the labor federation or national union, and 2) The
constitution and by-laws, a statement on the set of officers, and the books of accounts all of which are
certified under oath by the secretary or treasurer, as the case may be, of such local or chapter, and attested
to by its president. Absent compliance with these mandatory requirements, the local or chapter does not
become a legitimate labor organization.
 - Failure of the secretary of PDEU-Kilusan to certify the required documents under oath is fatal to its
acquisition of a legitimate status. —In the case at bar, the failure of the secretary of PDEU-Kilusan to certify
the required documents under oath is fatal to its acquisition of a legitimate status.
- Where the petition for certification election was filed by the federation which is merely an agent, the
petition is deemed to be filed by the chapter, the principal which must be a legitimate labor organization.—
At this juncture, it is important to clarify the relationship between the mother union and the local union. In
the case of Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 66 SCRA 512 [1975]), the Court
held that the mother union, acting for and in behalf of its affiliate, had the status of an agent while the local
union remained the basic unit of the association, free to serve the common interest of all its members
- subject only to the restraints imposed by the constitution and by-laws of the association. Thus, where as in
this case the petition for certification election was filed by the federation which is merely an agent, the
petition is deemed to be filed by the chapter, the principal, which must be a legitimate labor organization.
The chapter cannot merely rely on the legitimate status of the mother union.

(Effect of Filing of Registration Documents)

3. SAN MIGUEL CORPORATION vs. MANDAUE PACKING PRODUCTS PLANTS-SAN

PACKAGING PRODUCTS –SAN MIGUEL CORPORATION MONTHLIES RANK-ANDFILE
UNION – FFW (MPPP-SMPP-SMAMRFU-FFW). G.R. No. 152356. August 16, 2005.

- The Labor Code itself does not lay down the procedure for the registration of a local or chapter of a labor
organization.—The Labor Code itself does not lay down the procedure for the registration of a local or
chapter of a labor organization. Such has been traditionally provided instead in the Implementing Rules,
particularly in Book V thereof. However, in the last decade or so, significant amendments have been
introduced to Book V, first by Department Order No. 9 which took effect on 21 June 1997, and again by
Department Order No. 40 dated 17 February 2003. The differences in the procedures laid down in these
various versions are significant. However, since the instant petition for certification was filed in 1998, the
Implementing Rules, as amended by Department Order No. 9, should govern the resolution of this petition.
- A less stringent procedure obtains in the registration of a local or chapter than that of a labor organization.
—Preliminarily, we should note that a less stringent procedure obtains in the registration of a local or
chapter than that of a labor organization. Undoubtedly, the intent of the law in imposing lesser
requirements in the case of a branch or local of a registered federation or national union is to encourage the
affiliation of a local union with a federation or national union in order to increase the local union’s bargaining
powers respecting terms and conditions of labor. This policy has remained consistent despite the succeeding
amendments to Book V of the Omnibus Implementing Rules, as contained in Department Orders Nos. 9 and
40.
- Department Order No. 40 has eased the requirements by which a local /chapter may acquire legal
personality; Department Order No. 40 no longer uses the term “local /chapter,” utilizing instead “chartered
local,” which is defined as a “labor organization in the private sector operating at the enterprise level that
acquired legal personality through the issuance of a charter certificate by a duly registered federation or
national union, and reported to the Regional Office.” —Department Order No. 40, now in effect, has eased
the requirements by which a local/chapter may acquire legal personality. Interestingly, Department Order
No. 40 no longer uses the term “local/chapter,” utilizing instead “chartered local,” which is defined as a
“labor organization in the private sector operating at the enterprise level that acquired legal personality
through the issuance of a charter certificate by a duly registered federation or national union, and reported
to the Regional Office.” Clearly under the present rules, the first step to be undertaken in the creation of a
chartered local is the issuance of a charter certificate by the duly registered federation or national union.
Said federation or national union is then obligated to report to the Regional Office the creation of such
chartered local, attaching thereto the charter certificate it had earlier issued.
- While a local/chapter acquires legal personality from the date of the filing of the complete documentary re
quirements, and not from the issuance of a certification to such effect by the Regional Office or Bureau, a
labor organization is deemed to have acquired legal personality only on the date of issuance of its certificate
of registration, which takes place only after the Bureau of Labor Relations or its Regional Offices have
undertaken an evaluation process.—It is evident based on this rule that the local/chapter acquires legal
personality from the date of the filing of the complete documentary requirements, and not from the
 issuance of a certification to such effect by the Regional Office or Bureau. On the other hand, a labor
organization is deemed to have acquired legal personality only on the date of issuance of its certificate of
registration, which takes place only after the Bureau of Labor Relations or its Regional Offices has
undertaken an evaluation process lasting up until thirty (30) days, within which period it approves or denies
the application. In contrast, no such period of evaluation is provided in Department Order No. 9 for the
application of a local/chapter, and more importantly, under it such local/chapter is deemed to acquire legal
personality “from the date of filing” of the documents enumerated under Section 1, Rule VI, Book V.
- Notwithstanding the amendments, it still is good policy to maintain that per Department Order No. 9, the
duty of the Bureau of Labor Relations to recognize the local /chapter upon the submission of the
documentary requirements is not ministerial, insofar as the Bureau is obliged to adjudge the authenticity of
the documents required to be submitted; In ascertaining whether or not to recognize and register the
local/chapter, the Bureau or Regional Office should not look beyond the authenticity and due execution of
the documentary requirements for the creation of the local /chapter as enumerated under Section 1, Rule
VI, Book V of Department Order No. 9. —Notwithstanding the amendments, it still is good policy to maintain
that per Department Order No. 9, the duty of the Bureau of Labor Relations to recognize the local/chapter
upon the submission of the documentary requirements is not ministerial, insofar as the Bureau is obliged to
adjudge the authenticity of the documents required to be submitted. For example, the Bureau is not
mandated to accept just any purported charter certificate matter how spurious it is in appearance. It is
empowered to ascertain whether the submitted charter certificate is genuine, and if finding that said
certificate is fake, deny recognition to the local/chapter. However, in ascertaining whether or not to
recognize and register the local/chapter, the Bureau or Regional Office should not look beyond the
authenticity and due execution of the documentary requirements for the creation of the local/chapter as
enumerated under Section 1, Rule VI, Book V of Department Order No. 9. Since the proper submission of
these documentary requirements is all that is necessary to recognize a local/chapter, it is beyond the
province of the Bureau or Regional Offices to resort to other grounds as basis for denying legal recognition
of the local/chapter. For example, Department Order No. 9 does not require the local/chapter to submit the
names of its members as a condition precedent to its registration. It therefore would be improper to deny
legal recognition to a local/chapter owing to questions pertaining to its individual members since the
local/chapter is not even obliged to submit the names of its individual members prior to registration.
- In regular order, it is the federation or national union, already in possession of legal personality, which
initiates the creation of the local /chapter.—In regular order, it is the federation or national union, already in
possession of legal personality, which initiates the creation of the local/chapter. It issues a charter certificate
indicating the creation or establishment of the local/chapter. It then submits this charter certificate, along
with the names of the local/chapter’s officers, constitution and bylaws to the Regional Office or Bureau. It is
the submission of these documents, certified under oath by the Secretary or Treasurer of the local/chapter
and attested by the President, which vests legal personality in the local/chapter, which is then free to file on
its own a petition for certification election. In this case, the federation in question, the FFW, did not submit
any of these documentary requirements to the Regional Office or Bureau. It did however issue a charter
certificate to the putative local/chapter (herein respondent). Respondent then submitted the charter
certificate along with the other documentary requirements to the Regional Office, but not for the specific
purpose of creating the local/chapter, but for filing the petition for certification election.
- Labor laws are generally construed liberally in favor of labor, especially if doing so affirms the
constitutionally guaranteed right to self-organization. —It could be properly said that at the exact moment
respondent was filing the petition for certification, it did not yet possess any legal personality, since the
requisites for acquisition of legal personality under Section 3, Rule VI of Department Order No. 9 had not
yet been complied with. It could also be discerned that the intention of the Labor Code and its
Implementing Rules that only those labor organizations that have acquired legal personality are capacitated
to file petitions for certification elections. Such is the general rule. Yet there are peculiar circumstances in
this case that allow the Court to rule that respondent acquired the requisite legal personality at the same
time it filed the petition for certification election. In doing so, the Court acknowledges that the strict letter of
the procedural rule was not complied with. However, labor laws are generally construed liberally in favor of
labor, especially if doing so affirms the constitutionally guaranteed right to self-organization.
- Bylaws; Words and Phrases; Bylaws has traditionally been defined as regulations, ordinances, rules or laws
adopted by an association or corporation or the like for its internal governance, including rules for routine
matters such as calling meetings and the like; If those key bylaw provisions on matters such as quorum
requirements, meetings, or on the internal governance of the local /chapter are themselves already provided
for in the constitution, then it would be feasible to overlook the requirement for bylaws. —Bylaws has
traditionally been defined as regulations, ordinances, rules or laws adopted by an association or corporation
or the like for its internal governance, including rules for routine matters such as calling meetings and the
 like. The importance of bylaws to a labor organization cannot be gainsaid. Without such provisions
governing the internal governance of the organization, such as rules on meetings and quorum requirements,
there would be no apparent basis on how the union could operate. Without a set of bylaws which provides
how the local/chapter arrives at its decisions or otherwise wields its attributes of legal personality, then
every action of the local/chapter may be put into legal controversy. However, if those key bylaw provisions
on matters such as quorum requirements, meetings, or on the internal governance of the local/chapter are
themselves already provided for in the constitution, then it would be feasible to overlook the requirement
for bylaws. Indeed in such an event, to insist on the submission of a separate document denominated as
“ByLaws” would be an undue technicality, as well as a redundancy.
- The local/chapter retains a separate legal personality from that of its officers or members that remains
viable notwithstanding any turnover in its officers or members. —In its Memorandum, petitioner alleges that
the bargaining unit that respondent sought to represent is no longer the same because of the dynamic
nature of petitioner’s business, a lot of changes having occurred in the work environment, and that four of
respondent’s officers are no longer connected with petitioner. Assuming that these manifestations are true,
they have no effect on the Court’s ruling that a certification election should be immediately conducted with
respondent as one of the available choices. Petitioner’s bare manifestations adduce no reason why the
certification election should not be conducted forthwith. If there are matters that have arisen since the filing
of the petition that serve to delay or cancel the election, these can be threshed out during the pre-election
conferences. Neither is the fact that some of respondent’s officers have since resigned from petitioner of
any moment. The local/chapter retains a separate legal personality from that of its officers or members that
remains viable notwithstanding any turnover in its officers or members.

4. SAMAHAN NG MGA MANGGAGAWA SA SAMMA-LAKAS SA INDUSTRIYA NG

KAPATIRANG HALIGI NG ALYANSA (SAMMA-LIKHA) vs. SAMMA CORPORATION. G.R.
No. 167141. March 13, 2009.

- Labor Law; Grounds for Dismissal of a Petition for Certification Election; In certification elections, the
employer is a bystander, and it has no right or material interest to assail the certification election.—
Respondent, as employer, had been the one opposing the holding of a certification election among its rank-
and-file employees. This should not be the case. We have already declared that, in certification elections,
the employer is a bystander; it has no right or material interest to assail the certification election.

(Affiliation and Disaffiliation)

5. NATIONAL UNION OF BANK EMPLOYEES (NUBE) vs. PHILNABANK EMPLOYEES

ASSOCIATION (PEMA) AND PHILIPPINE NATIONAL BANK. G.R. No.174287. August 12,
2013.

- ; Labor Unions; The right of the local union to exercise the right to disaffiliate from its mother union is well
settled in this jurisdiction.―The right of the local union to exercise the right to disaffiliate from its mother
union is well settled in this jurisdiction. In MSMG-UWP v. Hon. Ramos, 326 SCRA 428 (2000), We held: A
local union has the right to disaffiliate from its mother union or declare its autonomy. A local union, being a
separate and voluntary association, is free to serve the interests of all its members including the freedom to
disaffiliate or declare its autonomy from the federation which it belongs when circumstances warrant, in
accordance with the constitutional guarantee of freedom of association. The purpose of affiliation by a local
union with a mother union [or] a federation “x x x is to increase by collective action the bargaining power in
respect of the terms and conditions of labor. Yet the locals remained the basic units of association, free to
serve their own and the common interest of all, subject to the restraints imposed by the Constitution and
By-Laws of the Association, and free also to renounce the affiliation for mutual welfare upon the terms laid
down in the agreement which brought it into existence.” Thus, a local union which has affiliated itself with a
federation is free to sever such affiliation anytime and such disaffiliation cannot be considered disloyalty. In
the absence of specific provisions in the federation’s constitution prohibiting disaffiliation or the declaration
of autonomy of a local union, a local may dissociate with its parent union.
6. ASSOCIATED WORKERS UNION-PTGWO vs. NLRC. G.R. No. 87266-69. July 30, 1990.

- NLRC correct in holding that respondent Metro cannot be compelled to fill up vacancies with AWU's
recommendees.—The NLRC was correct there in holding that respon-dent Metro cannot be compelled to fill
up vacancies with AWU's recommendees, as the CBA between AWU and respondent Metro granted the
latter the right to "fill or not to fill-up vacancies"; that the issue of the medically impaired employees had
already been raised in another Notice of Strike filed by AWU against respondent Metro on 16 September
1985, and both parties had agreed to abide by the recommendation and decision of an examining physician
selected by them; and that the existing CBA grants respondent Metro the right to compulsorily retire any
member of AWU who had reached 60 years of age, which right has been exercised by Metro.
- Generally, a labor union may disaffiliate from the mother union to form a local or independent union only
during the 60day freedom period immediately preceding the expiration of the CBA. —While it is true that
AWUM as a local union, being an entity separate and distinct from AWU, is free to serve the interest of all
its members and enjoys the freedom to disaffiliate, such right to disaffiliate may be exercised, and is thus
considered a protected labor activity, only when warranted by circumstances. Generally,  a labor union may
disaffiliate from the mother union to form a local or independent union only during the 60-day freedom
period immediately preceding the expiration of the CBA. Even before the onset of the freedom period (and
despite the closed-shop provision in the CBA between the mother union and management) disaffiliation may
still be carried out, but such disaffiliation must be effected by a majority of the members in the bargaining
unit.
- There is independent basis for holding Metro/ Marina responsible for reinstatement with backwages
accruing throughout the three (3) periods above indicated.— Turning to Metro/Marina, we note that, apart
from the finality of the Court's Resolutions in G.R. Nos. 81256-59 and 82705, there is independent basis for
holding Metro/Marina responsible for reinstatement with backwages accruing throughout the three (3)
periods above indicated. The equitable considerations which lead us to hold Metro/Marina responsible for
onehalf (1/2) of the backwages accruing during the above Second Period relate to the failure of Metro to
accord individual respondents procedural due process by giving them reasonable opportunity to explain their
side before suspending or dismissing them. Such dismissal was accordingly in violation of the Labor Code.
Notwithstanding AWU's closed-shop clause in the CBA, Metro was bound to conduct its own inquiry to
determine the existence of substantial basis for terminating the employment of individual respondents. That
AWU, disregarding the Minister of Labor and Employment's express order, had threatened to go on strike,
and indeed actually went on strike, if Metro had continued with the services of individual respondents,
did not relieve Metro from the duty to accord procedural due process to individual respondents.

(Rights of Union Members)

7. GABRIEL vs. SECRETARY OF LABOR AND EMPLOYMENT. G.R. No. 115949. March 16,
2000.

- ; The system of check-off is primarily for the benefit of the union and only indirectly for the individual
employees.—In check-off, the employer, on agreement with the Union, or on prior authorization from
employees, deducts union dues or agency fees from the latter’s wages and remits them directly to the
union. It assures continuous funding for the labor organization. As this Court has acknowledged, the system
of check-off is primarily for the benefit of the union and only indirectly for the individual
employees.Same; Same; Requisites for the validity of the special assessment for union ’s incidental
expenses, attorney’s fees and representation expenses .—Article 241 has three (3) requisites for the validity
of the special assessment for union’s incidental expenses, attorney’s fees and representation expenses.
These are: 1) authorization by a written resolution of the majority of all the members at the general
membership meeting called for the purpose; (2) secretary’s record of the minutes of the meeting; and (3)
individual written authorization for check off duly signed by the employees concerned.
 - Attorney’s fees may not be deducted or checked off from any amount due to an employee without his
written consent.—Clearly, attorney’s fees may not be deducted or checked off from any amount due to an
employee without his written consent.
- A written individual authorization duly signed by the employee concerned is a condition sine qua non for
such deduction.—Even as early as February 1990, in the case of Palacol vs. Ferrer-Calleja  we said that the
express consent of employees is required, and this consent must be obtained in accordance with the steps
outlined by law, which must be followed to the letter. No shortcuts are allowed. In Stellar Industrial
Services, Inc. vs. NLRC we reiterated that a written individual authorization duly signed by the employee
concerned is a condition sine qua non for such deduction.
- Public respondent did not act with grave abuse of discretion in ruling that the workers through their union
should be made to shoulder the expenses incurred for the services of a lawyer .—From all the foregoing, we
are of the considered view that public respondent did not act with grave abuse of discretion in ruling that
the workers through their union should be made to shoulder the expenses incurred for the services of a
lawyer. And accordingly the reimbursement should be charged to the union’s general fund or account. No
deduction can be made from the salaries of the concerned employees other than those mandated by law.

8. PENINSULA EMPLOYEES UNION v. MICHAEL B. ESQUIVEL. GR NO. 218454. Dec 01,

2016.
- ; Collective Bargaining Agreements; Agency Fee; The recognized collective bargaining union which
successfully negotiated the Collective Bargaining Agreement (CBA) with the employer is given the right to
collect a reasonable fee called “agency fee” from nonunion members who are employees of the appropriate
bargaining unit, in an amount equivalent to the dues and other fees paid by union members, in case they
accept the benefits under the CBA.—The recognized collective bargaining union which successfully
negotiated the CBA with the employer is given the right to collect a reasonable fee called “agency fee” from
nonunion members who are employees of the appropriate bargaining unit, in an amount equivalent to the
dues and other fees paid by union members, in case they accept the benefits under the CBA. While the
collection of agency fees is recognized by Article 259 (formerly Article 248) of the Labor Code, as amended,
the legal basis of the union’s right to agency fees is neither contractual nor statutory, but quasi-contractual,
deriving from the established principle that nonunion employees may not unjustly enrich themselves by
benefiting from employment conditions negotiated by the bargaining union.

- Case law interpreting Article 250(n) and (o) (formerly Article 241) of the Labor Code, as amended,
mandates the submission of three (3) documentary requisites in order to justify a valid levy of increased
union dues.—Case law interpreting Article 250(n) and (o) (formerly Article 241) of the Labor Code, as
amended, mandates the submission of three (3) documentary requisites in order to justify a valid levy of
increased union dues. These are: (a) an authorization by a written resolution of the majority of all the
members at the general membership meeting duly called for the purpose; (b) the secretary’s record of the
minutes of the meeting, which shall include the list of all members present, the votes cast, the purpose of
the special assessment or fees and the recipient of such assessment or fees; and (c) individual written
authorizations for check off duly signed by the employees concerned.
- Collective Bargaining Agreements; Check Off; Jurisprudence states that the express consent of the
employee to any deduction in his compensation is required to be obtained in accordance with the steps
outlined by the law, which must be followed to the letter. Corollarily, no individual check off authorizations
can proceed therefrom, and the submission of the November 2008 check off authorizations becomes
inconsequential. Jurisprudence states that the express consent of the employee to any deduction in his
compensation is required to be obtained in accordance with the steps outlined by the law,  which must be
followed to the letter; however, PEU-NUWHRAIN failed to comply. Thus, the CA correctly ruled that there
is no legal basis to impose union dues and agency fees more than that allowed in the expired CBA,  i.e., at
one percent (1%) of the employee’s monthly basic salary.
9. ASIAN INSTITUTE OF MANAGEMENT vs. ASIAN INSTITUTE OF MANAGEMENT
FACULTY ASSOCIATION. G.R. No. 207971. January 23, 2017.

- , 701 SCRA 589 (2013), the Supreme Court (SC) declared that “[i]n case of alleged inclusion of disqualified
employees in a union, the proper procedure for an employer like petitioner is to directly file a petition for
cancellation of the union’s certificate of registration due to misrepresentation, false statement or fraud
under the circumstances enumerated in Article 239 of the Labor Code, as amended.”—In Holy Child Catholic
School v. Hon. Sto. Tomas, 701 SCRA 589 (2013), this Court declared that “[i]n case of alleged inclusion of
disqualified employees in a union, the proper procedure for an employer like petitioner is to directly file a
petition for cancellation of the union’s certificate of registration due to misrepresentation, false statement or
fraud under the circumstances enumerated in Article 239 of the Labor Code, as amended.” On the basis of
the ruling in the above cited case, it can be said that petitioner was correct in filing a petition for
cancellation of respondent’s certificate of registration. Petitioner’s sole ground for seeking cancellation of
respondent’s certificate of registration — that its members are managerial employees and for this reason, its
registration is thus a patent nullity for being an absolute violation of Article 245 of the Labor Code which
declares that managerial employees are ineligible to join any labor organization — is, in a sense, an
accusation that respondent is guilty of misrepresentation for registering under the claim that its members
are not managerial employees.

10. REFORMIST UNION OF R. B. LINER, ET AL. vs. NLRC, ET AL. G.R. No. 120482.
January 27, 1997.

- Compulsory Arbitration; Strikes; When an employer accedes to the peaceful settlement brokered by the

NLRC, agreeing to accept all employees who had not yet returned to work, it waives the issue of the
illegality of the strike.—The private respondents can no longer contest the legality of the strike held by the
petitioners on 13 December 1989, as the private respondents themselves sought compulsory arbitration in
order to resolve that very issue, hence their letter to the Labor Secretary read, in part: This is to request
your good office to certify for compulsory arbitration or to assume jurisdiction over the labor dispute (strike
continuing) between R.B. Liner, Inc. . . . and the Lakas Manggagawa sa Pilipinas . . . The current strike by
Lakas which started on December 13, 1989 even before Certification Election could be held could not be
resolved by the NCR Conciliation-Mediation Division after six meetings/conferences between the parties. The
dispute or strike was settled when the company and the union entered into an agreement on 19 January
1990 where the private respondents agreed to accept all employees who, by then, had not yet returned to
work. By acceding to the peaceful settlement brokered by the NLRC, the private respondents waived the
issue of the illegality of the strike.
- Compulsory Arbitration, Defined.—The very nature of compulsory arbitration makes the settlement binding
upon the private respondents, for compulsory arbitration has been defined both as “the process of
settlement of labor disputes by a government agency which has the authority to investigate and to make an
award which is binding on all the parties,” and as a mode of arbitration where the parties are “compelled to
accept the resolution of their dispute through arbitration by a third party.” Clearly then, the legality of the
strike could no longer be reviewed by the Labor Arbiter, much less by the NLRC, as this had already been
resolved. It was the sole issue submitted for compulsory arbitration by the private respondents, as is
obvious from the portion of their letter quoted above. The case certified by the Labor Secretary to the NLRC
was dismissed after the union and the company drew up the agreement mentioned earlier. This conclusively
disposed of the strike issue.
- Jurisdiction; Neither the Labor Arbiter nor the NLRC could review the same issue passed upon in a certified
case, and their decisions to the contrary are rendered in grave abuse of discretion amounting to excess of
jurisdiction.—The Labor Code provides that the decision in compulsory arbitration proceedings “shall be final
and executory ten (10) calendar days after receipt thereof by the parties.” The parties were informed of the
dismissal of the case in a letter dated 14 February 1990, and while nothing in the record indicates when the
said letter was received by the parties, it is reasonable to infer that more than ten days elapsed—hence, the
 NLRC decision had already become final and executory—before the private respondents filed their complaint
with the Labor Arbiter on 13 July 1990. A final judgment is no longer susceptible to change, revision,
amendment, or reversal. Neither the Labor Arbiter nor the NLRC, therefore, could review the same issue
passed upon in NLRC Certified Case No. 0542, and their decisions to the contrary have been rendered in
grave abuse of discretion amounting to excess of jurisdiction.
- ; Compromise Agreements; While the Supreme Court is not abandoning the rule that “unfair labor practice
acts are beyond and outside the sphere of compromises,” the agreement in the instant case was voluntarily
entered into and represents a reasonable settlement, thus binding upon the parties .—The agreement
entered into by the company and the union, moreover, was in the nature of a compromise
agreement, i.e., “an agreement between two or more persons, who, for preventing or putting an end to a
lawsuit, adjust their difficulties by mutual consent in the manner which they agree on, and which everyone
of them prefers to the hope of gaining, balanced by the danger of losing.” Thus, in the agreement, each
party made concessions in favor of the other to avoid a protracted litigation. While we do not abandon the
rule that “unfair labor practice acts are beyond and outside the sphere of compromises,” the agreement
herein was voluntarily entered into and represents a reasonable settlement, thus it binds the parties.
- Illegal Dismissals; The burden of proving just and valid cause for dismissing employees from employment
rests on the employer, and the latter’s failure to do so results in a finding that the dismissal was unfounded .
—The only barrier then to the petitionersemployees’ reinstatement is their defiance of the Labor Secretary’s
return-to-work order, which the private respondents claim as one reason to validly dismiss the petitioners-
employees. We disagree, however, with the finding that Lakas/Reformist violated the said order. It is upon
the private respondents to substantiate the aforesaid defiance, as the burden of proving just and valid cause
for dismissing employees from employment rests on the employer, and the latter’s failure to do so results in
a finding that the dismissal was unfounded. The private respondents fell short of discharging this burden.
- to satisfactorily establish any violation of the Labor Secretary’s return-to-work order, any contrary finding by
the Labor Arbiter and the NLRC is committed with grave abuse of discretion .—The private respondents thus
failed to satisfactorily establish any violation of the Labor Secretary’s return-to-work order, and
consequently, the Labor Arbiter’s and the NLRC’s contrary finding is not anchored on substantial evidence.
Grave abuse of discretion was thus committed once more.
- Reinstatement; Where there was, in fact, no defiance of the Labor Secretary’s return-to-work order, and no
cause to decree the employees’ dismissal in the first instance, reinstatement of the dismissed employees
can be the only outcome.—As regards the illegal lockout alleged by the petitioners, we agree with the
NLRC’s finding that the petitioners had sufficient basis to believe in good faith that the private respondents
were culpable. The NLRC found this circumstance to justify the petitioners-employees’ reinstatement; we
add that since there was, in fact, no defiance of the Labor Secretary’s return-to-work order, and no cause to
decree the petitioners-employees’ dismissal in the first instance, reinstatement of the dismissed employees
can be the only outcome in this case.
- ; Separation Pay; Separation pay, equivalent to one month’s salary for every year of service, is awarded as
an alternative to reinstatement when the latter is no longer an option, and is computed from the
commencement of employment up to the time of termination, including the imputed service for which the
employee is entitled to back wages, with the salary rate prevailing at the end of the period of putative
service being the basis for computation .—The possibility of reinstatement is a question of fact, and where a
factual determination is indispensable to the complete resolution of the case, this Court usually remands the
case to the NLRC. In view, however, of both parties’ assertion that reinstatement has become impossible
because, as claimed by the petitioners, “the buses were already disposed of”; or as claimed by the private
respondents, R.B. Liner, Inc., had “ceased operations” because “its Certificate of Public Convenience had
expired and was denied renewal,” and further, of “closure of the company” due to “lack of operational
trucks and buses and high costs of units,” there is no need to remand this case to the NLRC. Due to the
infeasibility of reinstatement, the petitioners’ prayer for separation pay must be granted. Separation pay,
equivalent to one month’s salary for every year of service, is awarded as an alternative to reinstatement
when the latter is no longer an option, and is computed from the commencement of employment up to the
time of termination, including the period of imputed service for which the employee is entitled to back
wages. The salary rate prevailing at the end of the period of putative service should be the basis for
computation.
Coverage & ULP
1. Pablo Arizala vs. CA. G.R. Nos. 43633-34. September 14, 1990.

- Supervisors who were already members of a rank-and-file labor organization at the time of the
effectivity of R.A. No. 6715, are authorized to "remain therein." The maintenance by supervisors
of membership in a rank-and-file labor organization even after the enactment of a statute
imposing a prohibition on such membership, is not only not a crime, but is explicitly allowed,
under present law.
- Under the Industrial Peace Act, 1 government-owned or controlled corporations had the duty to
bargain collectively and were otherwise subject to the obligations and duties of employers in the
private sector.2 The Act also prohibited supervisors to become, or continue to be, members of
labor organizations composed of rank-and-file employees, 3 and prescribed criminal sanctions for
breach of the prohibition. 4
- under RA 875 (the Industry Peace Act),   persons "employed in proprietary functions of the
12

Government, including but not limited to governmental corporations," had the right of self-
organization and collective bargaining, including the right to engage in concerted activities to
attain their objectives, e.g. strikes.
- But those "employed in governmental functions" were forbidden to "strike for the purpose of
securing changes or modification in their terms and conditions of employment" or join labor
organizations which imposed on their members the duty to strike. The reason obviously was
that the terms and conditions of their employment were "governed by law" and hence could
not be fixed, altered or otherwise modified by collective bargaining.
- Supervisory employees were forbidden to join labor organizations composed of employees
under them, but could form their own unions. Considered "supervisors' were those 'having
authority in the interest of an employer to hire, transfer, suspend, lay-off, recall, discharge,
assign, recommend, or discipline other employees, or responsibly to direct them, and to
adjust their grievance or effectively to recommend such acts if, in connection with the
foregoing, the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment."  13

- It prohibited such civil service employees who were "employed in governmental functions" to
belong to any labor organization which imposed on their members "the obligation to strike or
to join strikes." And one of the first issuances of the President after the proclamation of
martial law in September, 1972, was General Order No. 5 which inter alia banned strikes in
vital industries," as well as 'all rallies, demonstrations and other forms of group actions."
- The Labor Code of the Philippines, Presidential Decree No. 442, enacted within a year from
effectivity of the 1973 Constitution,   incorporated the proposition that the "terms and
20

conditions of employment of all government employees, including employees of government-

owned and controlled corporations ... (are) governed by the Civil Service Law, rules and
regulations."   It incorporated, too, the constitutional mandate that the salaries of said
21

employees "shall be standardized by the National Assembly."

- The Labor Code,   however "exempted" government employees from the right to self-
22

organization for purposes of collective bargaining. While the Code contained provisions
acknowledging the right of "all persons employed in commercial, industrial and agricultural
enterprises, including religious, medical or educational institutions operating for profit" to
"self-organization and to form, join or assist labor organizations for purposes of collective
bargaining," they "exempted from the foregoing provisions:
- a) security guards;
 - b) government employees, including employees of government government-owned and/ or
controlled corporations;
- c) managerial employees; and
- d) employees of religious, charitable, medical and educational institutions not operating for
profit, provided the latter do not have existing collective agreements or recognized unions at
the time of the effectivity of the code or have voluntarily waived their exemption."
23

- The reason for denying to government employees the right to "self-organization and to form,
join or assist labor organizations for purposes of collective bargaining" is presumably the
same as that under the Industrial Peace Act, i.e., that the terms and conditions of
government employment are fixed by law and not by collective bargaining.

2. University of the Immaculate Conception vs. Secretary of Labor. G.R. NOS. 178085 –
178086. September 14, 2015.

- Art. 282. Termination by employer. An employer may terminate an employment for

any of the following causes:
- (a) Serious misconduct or willful disobedience by the employee of the lawful orders
of his employer or representative in connection with his work;
- (b) Gross and habitual neglect by the employee of his duties;
- (c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
- (d)  Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representatives; and
- (e) Other causes analogous to the foregoing.
- In Cruz v. Court of Appeals,[53] we summarized the guidelines when loss of
confidence constitutes a valid ground for dismissal:
- [T]he language of Article 282(c) of the Labor Code states that the loss of trust and
confidence must be based on willful breach of the trust reposed in the employee by
his employer. Such breach is willful if it is done intentionally, knowingly, and
purposely, without... justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. Moreover, it must be based on substantial
evidence and not on the employer's whims or caprices or suspicions otherwise, the
employee would eternally remain at the mercy... of the employer. Loss of confidence
must not be indiscriminately used as a shield by the employer against a claim that
the dismissal of an employee was arbitrary. And, in order to constitute a just cause
for dismissal, the act complained of must be work-related and shows that... the
employee concerned is unfit to continue working for the employer. In addition, loss of
confidence as a just cause for termination of employment is premised on the fact that
the employee concerned holds a position of responsibility, trust and confidence or
that the employee... concerned is entrusted with confidence with respect to delicate
matters, such as the handling or care and protection of the property and assets of
the employer. The betrayal of this trust is the essence of the offense for which an
employee is penalized
- As a rule, loss of confidence may only be invoked by the employer against an
employee occupying a position of responsibility, trust and confidence[57] — hence,
the first requisite. Ordinarily, this would require us to make a determination with
regard to the... true nature of the Respondent Employees' positions. But given the
 facts of this case, noting in particular the final and executory decision in the
Arbitration Case which deemed Respondent Employees as confidential employees,
we only now need to determine whether confidential... employees hold positions of
trust and confidence.
- The leading case explaining what is a "position of trust and confidence" is Mabeza v.
NLRC,[58] where we held that:
- [L]oss of confidence should ideally apply only to cases involving employees
occupying positions of trust and confidence or to those situations where the
employee is routinely charged with the care and custody of the employer's money or
property. To (he first class... belong managerial employees, i.e., those vested with
the powers or prerogatives to lay down management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees or effectively
recommend such managerial actions; and to the second class... belong cashiers,
auditors, property custodians, etc., or those who, in the normal and routine exercise
of their functions, regularly handle significant amounts of money or property. ..
- A confidential employee is defined as one entrusted with confidence on delicate
matters, or with the custody, handling, or care and protection of the employer's
property.[64] For all intents and purposes, the terms "confidential employee" and
"employee... holding a position of trust and confidence" are synonymous.
Fundamentally, the two categories mentioned in Mabeza are simply subcategories of
the broader category of confidential employees.
- We hold that the willful act of refusing to leave the Union is sufficient basis for UIC to
lose its trust and confidence on Respondent Employees. There was just cause for
dismissing the Respondent Employees. Our conclusion follows the same reasoning
why we finally adopted the... doctrine that confidential employees should be
excluded from the bargaining unit and disqualified from joining any union:[66]
employees should not be placed in a position involving a potential conflict of
interests.[67] In this... regard, the Court of Appeals erred in holding that Respondent
Employees are allowed to join the Union.[68] If Respondent Employees were
allowed to retain their union membership, UIC would not be assured of their loyalty
because of the apparent conflict... between the employees' personal interests and
their duty as confidential employees. Such a result is likely to create an atmosphere
of distrust between UIC and the confidential employees, and it would be nigh
unreasonable to compel UIC to continue in employment persons whom it... no longer
trusts to handle delicate matters.
- As a rule, loss of confidence may only be invoked by the employer against an
employee occupying a position of responsibility, trust and confidence[57] — hence,
the first requisite. Ordinarily, this would require us to make a determination with
regard to the... true nature of the Respondent Employees' positions. But given the
facts of this case, noting in particular the final and executory decision in the
Arbitration Case which deemed Respondent Employees as confidential employees,
we only now need to determine whether confidential... employees hold positions of
trust and confidence.
- Although there is just cause for dismissing the Respondent Employees, we find that
UIC failed to comply with the mandatory two-notice due process requirement. Under
our labor laws, the employer has the burden of proving that the dismissed employee
 has been served two written... notices: (a) one to apprise him of the particular acts or
omissions for which his dismissal is sought, and (b) the other to inform him of the
employer's decision to dismiss him.[73] The first notice must state that the employer
seeks dismissal for the act... or omission charged against the employee; otherwise,
the notice does not comply with the rules.[74] The records show that UIC sent only
one such written notice to Respondent Employees on February 21, 1995, i.e., a
notice of termination effective at... the close of business of the same date.[75] We do
not agree with UIC's submission that the agreement to arbitrate and the request to
comply with the arbitration decision constitute the "first notice" required by law,[76]
considering... that UIC was unable to establish by substantial evidence that these
categorically contain what is legally required to appear in the first notice. In fine, we
agree with the observation of the Court of Appeals that the Respondent Employees
were hastily terminated.[77]

3. Meralco vs. Secretary of Labor. G.R. No. 91902. May 20, 1991.
- While therefore under the old rules, security guards were barred from joining a labor
organization of the rank and file, under RA 6715, they may now freely join a labor
organization of the rank and file or that of the supervisory union, depending on their rank. By
accommodating supervisory employees, the Secretary of Labor must likewise apply
the provisions of RA 6715 to security guards by favorably allowing them free access
to a labor organization, whether rank and file or supervisory, in recognition of their
constitutional right to self-organization.
- Art. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees.—Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist, or form separate labor
organizations of their own. (emphasis ours)
- As will be noted, the second sentence of Art. 245 embodies an amendment
disqualifying supervisory employees from membership in a labor organization of the rank-
and-file employees. It does not include security guards in the disqualification.
- Art. 245. Ineligibility of managerial employees to joint any labor organization.—Managerial
employees are not eligible to join, assist or form any labor organization.
- With the elimination, security guards were thus free to join a rank and file organization.
- Issue: WON security guards may join rank-and-file or supervisors union.
- Held:
- While therefore under the old rules, security guards were barred from
joining a labor organization of the rank and file, under RA 6715, they
may now freely join a labor organization of the rank and file or that of
the supervisory union, depending on their rank.
- We are aware however of possible consequences in the implementation
of the law in allowing security personnel to join labor unions within the
company they serve. The law is apt to produce divided loyalties in the
faithful performance of their duties. Economic reasons would present
the employees concerned with the temptation to subordinate their
duties to the allegiance they owe the union of which they are members,
 aware as they are that it is usually union action that obtains for them
increased pecuniary benefits.
- Thus, in the event of a strike declared by their union, security personnel
may neglect or outrightly abandon their duties, such as protection of
property of their employer and the persons of its officials and
employees, the control of access to the employer’s premises, and the
maintenance of order in the event of emergencies and untoward
incidents.

4. United Pepsi Cola Supervisory Union vs. Laguesma. G.R. No. 122226. March 25, 1998.

- the principle of finality of administrative determination compels respect for the finding
of the Secretary of Labor that route managers are managerial employees as defined
by law in the absence of anything to show that such determination is without...
substantial evidence to support it
- ART. 245. Security guards and other personnel employed for the protection and
security of the person, properties and premises of the employers shall not be eligible
for membership in a labor organization.
- ART. 246. Managerial employees are not eligible to join, assist, and form any labor
organization.
- DOCTRINE: The doctrine of res judicata applies to judicial or quasi-
judicial proceedings and not to the exercise of administrative powers.
Thus, proceedings for certification election are quasi judicial in nature
and, therefore, decisions rendered in such proceedings can attain
finality.

- ISSUE:
- 1.    whether the route managers at Pepsi-Cola Products Philippines, Inc. are managerial
employees.
- 2.    whether Art. 245, insofar as it prohibits managerial employees from forming, joining or
assisting labor unions, violates Art. III, §8 of the Constitution.
-  
- HELD: YES.
- 1.    Types of Managerial Employees
-  
- "manager" generally refers to "anyone who is responsible for subordinates and other
organizational resources."1 As a class, managers constitute three levels of a pyramid:
-  
- Top management
- ————————
- Middle Management
- ——————————
- First-Line Management (also called Supervisor)
- ====================
- Operatives or Operating Employees
-  
- FIRST-LINE MANAGERS — The lowest level in an organization at which individuals are
responsible for the work of others is called first-line or first-level management. First-line
managers direct operating employees only; they do not supervise other managers. Examples
of first-line managers are the "foreman" or production supervisor in a manufacturing plant,
the technical supervisor in a research department, and the clerical supervisor in a large
office. First-level managers are often called supervisors.
-  
- MIDDLE MANAGERS — The term middle management can refer to more than one level in
an organization. Middle managers direct the activities of other managers and sometimes also
those of operating employees. Middle managers' principal responsibilities are to direct the
activities that implement their organizations' policies and to balance the demands of their
superiors with the capacities of their subordinates. A plant manager in an electronics firm is
an example of a middle manager.
-  
- TOP MANAGERS — Composed of a comparatively small group of executives, top
management is responsible for the overall management of the organization. It establishes
operating policies and guides the organization's interactions with its environment. Typical
titles of top managers are "chief executive officer," "president," and "senior vice-president."
Actual titles vary from one organization to another and are not always a reliable guide to
membership in the highest management classification.2
-  
- As can be seen from this description, a distinction exists between those who have the
authority to devise, implement and control strategic and operational policies (top and
middle managers) and those whose task is simply to ensure that such policies are carried
out by the rank-and-file employees of an organization  (first-level
managers/supervisors). What distinguishes them from the rank-and-file employees is
that they act in the interest of the employer in supervising such rank-and-file employees.
-  
- "Managerial employees" may therefore be said to fall into two distinct categories: the
"managers" per se, who compose the former group described above, and the "supervisors"
who form the latter group. Whether they belong to the first or the second category,
managers, vis-a-vis employers, are, likewise, employees.
-  
- XXXX
-  
- To qualify as managerial employee, there must be a clear showing of the exercise of
managerial attributes under paragraph (m), Article 212 of the Labor Code as
amended. Designations or titles of positions are not controlling.
-  
- XXXX
- Article 212(m) says that "supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of such authority is
not merely routinary or clerical in nature but requires the use of independent judgment."
Thus, their only power is to recommend. Certainly, the route managers in this case more
than merely recommend effective management action. They perform operational, human
resource, financial and marketing functions for the company, all of which involve the laying
down of operating policies for themselves and their teams. For example, with respect to
marketing, route managers, in accordance with B.1.1.1 to B.1.1.9 of the Route Managers
Job Description, are charged, among other things, with expanding the dealership base of
 their respective sales areas, maintaining the goodwill of current dealers, and distributing the
company's various promotional items as they see fit. It is difficult to see how supervisors can
be given such responsibility when this involves not just the routine supervision of operating
employees but the protection and expansion of the company's business vis-a-vis its
competitors.
-  
- While route managers do not appear to have the power to hire and fire people (the evidence
shows that they only "recommended" or "endorsed" the taking of disciplinary action against
certain employees), this is because this is a function of the Human Resources or Personnel
Department of the company.14 And neither should it be presumed that just because they
are given set benchmarks to observe, they are ipso facto supervisors. Adequate control
methods (as embodied in such concepts as "Management by Objectives [MBO]" and
"performance appraisals") which require a delineation of the functions and responsibilities of
managers by means of ready reference cards as here, have long been recognized in
management as effective tools for keeping businesses competitive.
-  
- 2.    No. As already stated, whether they belong to the first category (managers per se) or
the second category (supervisors), managers are employees. Nonetheless, in the United
States, as Justice Puno's separate opinion notes, supervisors have no right to form
unions. They are excluded from the definition of the term "employee"..
- Finally, the question is whether the present ban against managerial employees, as embodied
in Art. 245 (which superseded Art. 246) of the Labor Code, is valid. This provision reads:
-  
- Art. 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. — Managerial employees are not eligible to join, assist or form any
labor organization. Supervisory employees shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.29
-  
- This provision is the result of the amendment of the Labor Code in 1989 by R.A. No. 6715,
otherwise known as the Herrera-Veloso Law. Unlike the Industrial Peace Act or the
provisions of the Labor Code which it superseded, R.A. No. 6715 provides separate
definitions of the terms "managerial" and "supervisory employees," as follows:
-  
- Art. 212. Definitions. . . .
-  
- (m) "managerial employee" is one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire transfer, suspend, lay off, recall, discharge,
assign or discipline employees. Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of such authority is
not merely routinary or clerical in nature but requires the use of independent judgment. All
employees not falling within any of the above definitions are considered rank-and-file
employees for purposes of this Book.
-  
- Although the definition of "supervisory employees" seems to have been unduly restricted to
the last phrase of the definition in the Industrial Peace Act, the legal significance given to
the phrase "effectively recommends" remains the same. In fact, the distinction between top
and middle managers, who set management policy, and front-line supervisors, who are
merely responsible for ensuring that such policies are carried out by the rank and file, is
articulated in the present definition. When read in relation to this definition in Art. 212(m), it
 will be seen that Art. 245 faithfully carries out the intent of the Constitutional Commission in
framing Art. III, §8 of the fundamental law.
-  
- Nor is the guarantee of organizational right in Art. III, §8 infringed by a ban against
managerial employees forming a union. The right guaranteed in Art. III, §8 is subject to the
condition that its exercise should be for purposes "not contrary to law." In the case of Art.
245, there is a rational basis for prohibiting managerial employees from forming or joining
labor organizations. As Justice Davide, Jr., himself a constitutional commissioner, said in his
ponencia in Philips Industrial Development, Inc. v. NLRC:31
-  
- In the first place, all these employees, with the exception of the service engineers and the
sales force personnel, are confidential employees. Their classification as such is not seriously
disputed by PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW explicitly
considered them as confidential employees. By the very nature of their functions, they assist
and act in a confidential capacity to, or have access to confidential matters of, persons who
exercise managerial functions in the field of labor relations. As such, the rationale behind the
ineligibility of managerial employees to form, assist or joint a labor union equally applies to
them.
-  
- In Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez, this Court elaborated on this
rationale, thus:
-  
- . . . The rationale for this inhibition has been stated to be, because if these managerial
employees would belong to or be affiliated with a Union, the latter might not be assured of
their loyalty to the Union in view of evident conflict of interests. The Union can also become
company-dominated with the presence of managerial employees in Union membership.32
-  
- To be sure, the Court in Philips Industrial was dealing with the right of confidential
employees to organize. But the same reason for denying them the right to organize justifies
even more the ban on managerial employees from forming unions. After all, those who
qualify as top or middle managers are executives who receive from their employers
information that not only is confidential but also is not generally available to the public, or to
their competitors, or to other employees. It is hardly necessary to point out that to say that
the first sentence of Art. 245 is unconstitutional would be to contradict the decision in that
case.

5. Sonedco Workers Free Labor Union vs. URC. GR No. 220383. October 5, 2016.

- ISSUES:
- 2016 MAIN DECISION

- 1. Whether or not respondent is guilty of

    

unfair labor practice (ULP).

- 2. Whether or not petitioners, who
    

refused to sign the 2007 and 2008

 waivers, are entitled to the wage
increase and other economic benefits
as a continuing employee benefit
notwithstanding the 2009 CBA
- 3. Whether or not respondent is liable to
    

pay moral and exemplary damages.

-  
- 2017 RESOLUTION
- 4.    Whether or not a P32.00/day wage increase beginning January 1, 2009 to
present should be awarded to petitioners
-  
- RULING:
- 1.  Yes, respondent is guilty of unfair labor practice.
- The Court of Appeals failed to take into account that unfair labor practice not only
involves acts that violate the right to self-organization but also covers several acts
enumerated in Article 259 of the Labor Code, thus:
- ARTICLE 259. [248]Unfair Labor Practices of Employers. — It shall be unlawful
for an employer to commit any of the following unfair labor practices:
- (a) To interfere with, restrain or coerce employees in the exercise of their right
to self-organization;
- xxx xxx xxx
- (e) To discriminate in regard to wages, hours of work and other terms and
conditions of employment in order to encourage or discourage membership in
any labor organization.
- xxx xxx xxx
- (g) To violate the duty to bargain collectively as prescribed by this Code;
- xxx xxx xxx
-  
- Under this provision, an employer is guilty of unfair labor practice when it fails in its duty
to bargain in good faith.
-  
- In ruling that respondent did not commit unfair labor practice, the National Labor
Relations Commission and the Court of Appeals failed to consider the totality of
respondent's acts, which showed that it violated its duty to bargain collectively. This
constitutes unfair labor practice under Article 259 (g) of the Labor Code.
- When petitioners held a conference on May 26, 2003, respondent refused to attend.
Because respondent failed to appear in the conference, petitioners wrote their
demands in a letter sometime in July 2003. The letter included, among others, a
wage increase of P50.00/day from September 2003 to 2006. Instead of explaining its
non-attendance to the conference or making a counter-offer, respondent replied on
August 15, 2003 acknowledging the receipt and contents of the July 2003 letter but
invoking the 2002 Collective Bargaining Agreement as an excuse not to answer
 petitioners' demands to negotiate. This is contrary to Article 261 of the Labor Code,
which requires the other party to reply within 10 days from receipt of the written
demand:
- ARTICLE 261. [250] Procedure in Collective Bargaining. — The following procedures
shall be observed in collective bargaining:
- (a) When a party desires to negotiate an agreement, it shall serve a written notice
upon the other party with a statement of its proposals. The other party shall make a
reply thereto not later than ten (10) calendar days from receipt of such notice[.]
-  
- This was not respondent's only violation of Article 261. Respondent likewise failed to
reply to the collective bargaining agreement proposal sent by petitioners on August
21, 2007. The September 22, 2007 letter, sent with the agreement proposal, also
went unheeded.
-  
- 2.  Yes, petitioners, who refused to sign the 2007 and 2008 waivers, are entitled
to the wage increase and other economic benefits as a continuing employee
benefit notwithstanding the 2009 CBA.
- After SONEDCO Workers Free Labor Union was again declared as the exclusive
bargaining representative in the August 20, 2008 certification election, the 2009
Collective Bargaining Agreement was created to cover 2009 to 2013. 70 Since the
2009 Collective Bargaining Agreement did not include the years 2007 and 2008, the
alleged purpose of the waivers, which was to prevent double compensation, was
already served. It would be unfair for the employees to still not receive the benefits
for 2007 and 2008 simply because they refused to sign a waiver that was already
moot.
- However, there is no need for the continuation of the wage increase for 2007 and
2008 since the 2009 CBA contains wage increase provisions for 2009 to 2013. As
explained in Samahang Manggagawa sa Top Form Manufacturing v. National Labor
Relations Commission, if a proposal is not printed in the collective bargaining
agreement, it cannot be demanded:
- The CBA is the law between the contracting parties — the collective bargaining
representative and the employer-company. Compliance with a CBA is mandated by
the expressed policy to give protection to labor. In the same vein, CBA provisions
should be "construed liberally rather than narrowly and technically, and the courts
must place a practical and realistic construction upon it, giving due consideration to
the context in which it is negotiated and purpose which it is intended to serve." This
is founded on the dictum that a CBA is not an ordinary contract but one impressed
with public interest. It goes without saying, however, that only provisions embodied in
the CBA should be so interpreted and complied with. Where a proposal raised by a
contracting party does not find print in the CBA, it is not a part thereof and the
proponent has no claim whatsoever to its implementation.
-  
- If petitioners wanted the wage increase for 2007 and 2008 to be carried on, the
proper recourse would have been to demand that this be included in the 2009
Collective Bargaining Agreement.
-  
- 3. Yes, respondent is liable to pay moral and exemplary damages.
- Yes. In Nueva Ecija Electric Cooperative, Inc. v. National Labor Relations
Commission, the Supreme Court held:
- Unfair labor practices violate the constitutional rights of workers and employees to
self-organization, are inimical to the legitimate interests of both labor and
management, including their right to bargain collectively and otherwise deal with
each other in an atmosphere of freedom and mutual respect; and disrupt industrial
peace and hinder the promotion of healthy and stable labor-management relations.
As the conscience of the government, it is the Courts sworn duty to ensure that none
trifles with labor rights.
-  
- For this reason, we find it proper in this case to impose moral and exemplary
damages on private respondent.
-  
- 4. Yes, a P32.00/day wage increase beginning January 1, 2009 to present
should be awarded to petitioners.
- Generally, the CBA controls the relationship between the parties. Any benefit not
included in it is not demandable. However, in light of the peculiar circumstances in
this case, the requested wage increase should be granted.
- The wage increase was integrated in the salary of those who signed the waivers.
When the affiants waived their rights, respondent rewarded them with a P32.00/day
wage increase that continues to this day. The respondent company granted this
benefit to its employees to induce them to waive their collective bargaining rights.
This Court has declared this an unfair labor practice. Accordingly, it is illegal to
continue denying the petitioners the wage increase that was granted to employees
who signed the waivers. To rule otherwise will perpetuate the discrimination against
petitioners. All the consequences of the unfair labor practice must be addressed.
- The grant of the P32.00/day wage increase is not an additional benefit outside the
2009 CBA. By granting this increase to petitioners, this Court is eliminating the
discrimination against them, which was a result of respondent's unfair labor practice.
-  
- Principles:
- ARTICLE 259. [248] Unfair Labor Practices of Employers. — It shall be unlawful for
an employer to commit any of the following unfair labor practices:
- (a) To interfere with, restrain or coerce employees in the exercise of their right to
self-organization;
- (e) To discriminate in regard to wages, hours of work and other terms and conditions
of employment in order to encourage or discourage membership in any labor
organization.
- (g) To violate the duty to bargain collectively as prescribed by this Code;... nder this
provision, an employer is guilty of unfair labor practice when it fails in its duty to
bargain in good faith.
- Although it Is well-settled that the findings of fact of quasi-judicial agencies such as
the National Labor Relations Commission are accorded great respect, this rule does
admit exceptions.[45] One of these exceptions is when, as in this case, the Court of
Appeals errs in appreciating the facts. In Culili v. Eastern Telecommunications
Philippines, Inc.:[46]
- While it is true that factual findings made by quasi-judicial and administrative
tribunals, if supported by substantial evidence, are accorded great respect and even
 finality by the courts, this general rule admits of exceptions. When there is a showing
that a palpable and demonstrable mistake that needs rectification has been
committed or when the factual findings were arrived at arbitrarily or in disregard of
the evidence on record, these findings may be examined by the courts.[47]
- In ruling that respondent did not commit unfair labor practice, the National Labor
Relations Commission and the Court of Appeals failed to consider the totality of
respondent's acts, which showed that it violated its duty to bargain collectively. This
constitutes unfair labor practice under Article 259(g) of the Labor Code.
- ARTICLE 263. [252] Meaning of Duty to Bargain Collectively. — The duty to bargain
collectively means the performance of a mutual obligation 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 grievances or questions arising
under such agreement and executing a contract incorporating such agreements if
requested by either party but such duty does not compel any party to agree to a
proposal or to make any concession.
- Respondent repeatedly refused to meet and bargain with SONEDCO Workers Free
Labor Union, the exclusive bargaining agent of its rank-and-file employees. In its
Position Paper[48] before the National Labor Relations Commission, respondent
cited the different instances when petitioners sent it letters trying to set meetings to
discuss a new collective bargaining agreement.[49] Respondent admitted that it
refused to meet with petitioners in light of the 2002 Collective Bargaining Agreement,
which it signed with PACIWU-TUCP, the previous bargaining representative. It
claimed that the 2002 Collective Bargaining Agreement remained in full force and
effect without change until December 31, 2006, despite PACIWU-TUCP losing the
May 17, 2002 certification election to SONEDCO Workers Free Labor Union.[5
- Respondent's argument has no merit. Respondent's reliance on the 2002 Collective
Bargaining Agreement as basis for not negotiating with petitioners is unjustified. The
Collective Bargaining Agreement that respondent invoked had been entered into
when a Petition for Certification Election was already filed.
- In Associated Trade Unions v. Trajano,[50] this Court ruled on the temporary nature
of this type of collective bargaining agreement:
- The Court will not rule on the merits and/or defects of the new CBA and shall only
consider the fact that it was entered into at a time when the petition for certification
election had already been filed by TUP AS and was then pending resolution. The
said CBA cannot be deemed permanent, precluding the commencement of
negotiations by another union with the management. In the meantime however, so
as not to deprive the workers of the benefits of the said agreement, it shall be
recognized and given effect on a temporary basis, subject to the results of the
certification election. The agreement may be continued in force if ATU is certified as
the exclusive bargaining representative of the workers or may be rejected and
replaced in the event that TUP AS emerges as the winne
- Respondent claimed that it refused to bargain with petitioners because the issue of
representation was still pending before the courts. It claimed that when the 2002
Collective Bargaining Agreement expired on December 31, 2006, it had no
bargaining agent to deal with as SONEDCO Workers Free Labor Union had filed
before the Department of Labor and Employment a Petition for Certification Election
on December 6, 2006, which resulted in the absence of a duly elected bargaining
 representative.[52] Respondent claimed it was only on September 25, 2008 that
SONEDCO Workers Free Labor Union was certified by the Department of Labor and
Employment as the exclusive bargaining agent of respondent's rank-and-file
employees.[53]
- This argument fails to persuade.
- The Department of Labor and Employment, in its Order[54] dated May 4, 2007
granting SONEDCO Workers Free Labor Union's second Petition for Certification
Election, illustrated why respondent's argument is untenable:
- Let it be noted that based on the results of the certification election conducted in the
establishment on 17 May 2002, Mediator-Arbiter Sumalinog, declared and certified
SWOFLU as the sole and exclusive bargaining agent of the rank-and-file employees
of SONEDCO. The office of the Secretary affirmed SWOFLU's certification in OS-A-
6-63-01, and the decision became final and executory on 15 April 2003. As such, the
suspension of the running of the one (1) year period referred in Section 3(a) Rule VIII
was automatically lifted on 15 April 2003. Hence, the one (1) year bar cannot be
used to deny the subject petition. Furthermore, despite PACIWU-TUCP's act of
questioning the Office of the Secretary's affirmation before the Court of Appeals by
way of a petition for certiorari, no restraining order was issued to stay the
implementation of the decision.
- In other words, as far as this Office is concerned, SWOFLU is the incumbent sole
and exclusive bargaining agent of the rank-and-file employees of SONEDCO. As
such, there was actually no necessity for SWOFLU to file the subject petition, as its
representation status remains to be effective unless challenged by other legitimate
labor organizations during the freedom period of the CBA that was entered into by
PACIWU-TUCP and employer SONEDCO.
- Incidentally, the Office of the Secretary declared in OS-A-6-63-01 that SWOFLU had
the option to adopt the interim CBA or negotiate with SONEDCO a new CBA.
Whether SWOFLU was able to actually administer the said CBA, or whether it
attempted to negotiate with the employer for a new CBA but was rejected, the issues
are already moot and academic by reason of the expiration of the effectivity of the
agreement.[56] (Emphasis supplied)
- Respondent's duty to bargain with SONEDCO Workers Free Labor Union as the
incumbent bargaining agent is clear. The last paragraph of Article 268 of the Labor
Code states:
- When petitioners held a conference on May 26, 2003, respondent refused to attend.
[57] Because respondent failed to appear in the conference, petitioners wrote their
demands in a letter sometime in July 2003. The letter included, among others, a
wage increase of P50.00/day from September 2003 to 2006.[58] Instead of
explaining its non-attendance to the conference or making a counter-offer,
respondent replied on August 15, 2003 acknowledging the receipt and contents of
the July 2003 letter but invoking the 2002 Collective Bargaining Agreement as an
excuse not to answer petitioners' demands to negotiate.[59] This is contrary to
Article 261 of the Labor Code, which requires the other party to reply within 10 days
from receipt of the written dema
- This was not respondent's only violation of Article 261. Respondent likewise failed to
reply to the collective bargaining agreement proposal sent by petitioners on August
21, 2007.[60] The September 22, 2007 letter, sent with the agreement proposal, also
went unheeded.[61]
- Respondent's reliance on the 2002 Collective Bargaining Agreement is contrary to
jurisprudence. In Associated Labor Unions v. Trajano,[62] this Court explicitly held
that the winning union had the option to either continue the existing collective
bargaining agreement or negotiate a new one:
- If, as a result of the certification election, respondent union or a union other than
petitioner union which executed the interim agreement is certified as the exclusive
bargaining representative of the rank and file employees of respondent company,
then, such union may adopt the interim collective bargaining agreement or negotiate
with management for a new collective bargaining agreement[.][63] (Citations omitted,
emphasis supplied)
- Even if we consider respondent's refusal to bargain as merely a mistake made in
good faith, its subsequent acts show an attempt to restrict petitioners' negotiating
power.
- First, the 2002 Collective Bargaining Agreement was done on May 6, 2002, only
days before the May 17, 2002 certification election. When respondent and PACIWU-
TUCP entered into the 2002 Collective Bargaining Agreement, they had been aware
that a certification election was going to be conducted in a few days. In pushing
through with negotiations instead of waiting for the outcome of the election,
respondent risked needing to renegotiate with a new union if PACIWU-TUCP loses.
It cannot, thus, invoke the hastily concluded 2002 Collective Bargaining Agreement
as an excuse not to bargain with petitioners. If respondent had truly intended to
bargain in good faith, it could have easily waited a few more days to know the result
of the certification election.
- Second, when the 2002 Collective Bargaining Agreement expired in December
2006, the Labor Secretary's Resolution declaring SONEDCO Workers Free Labor
Union as the bargaining agent of respondent's rank-and-file employees was already
final and executory. Respondent's initial basis for refusal to bargain had expired, and
since no temporary restraining order was issued, nothing was legally preventing
respondent from negotiating a new collective bargaining agreement with petitioners.
That it chose to refuse negotiations and instead entered into an agreement with its
employees to essentially waive negotiations for 2007 and 2008 betrays its intention
of limiting petitioners' bargaining power.
- The wording of the waivers shows a clear attempt to limit petitioners' bargaining
power by making them waive the negotiations for 2007 and 2008. In stipulating that
the collective bargaining agreement that would be entered into would only be
effective the year following the 2008 waiver, respondent limited when the collective
bargaining agreement could be deemed effective. Tn other words, respondent asked
petitioners to forego any benefits they might have received under a collective
bargaining agreement in exchange for the company-granted benefits.
- Both the National Labor Relations Commission and the Court of Appeals regarded
the incentives as a magnanimous move because it gave the employees a P16.00
wage increase, P4.00 more than the P12.00 increase under the 2002 Collective
Bargaining Agreement. However, respondent's claim of benevolence falls short: the
wage increase proposed by petitioners in 2007 was P50.00. If a collective bargaining
agreement had been concluded in 2007, employees who signed the waivers would
have lost the chance to receive P34.00 wage increase for that year.
- Lastly, when the 2007 waiver was circulated, respondent already had a copy of
petitioners' agreement proposal. Respondent was aware that petitioners asked for a
 P50.00 wage increase. More importantly, the last bar preventing respondent from
recognizing SONEDCO Workers Free Labor Union as the bargaining agent has
been resolved by the time it issued the waivers. The Petition for Certiorari relative to
the May 17, 2002 certification election was denied with finality by this Court on July
11, 2007.[68] There was no reason to doubt that SONEDCO Workers Free Labor
Union was the sole and exclusive bargaining representative. If respondent did
indeed act in good faith, it would have undergone agreement negotiations with
petitioners. However, respondent incessantly refused to meet with petitioners to
discuss the agreement proposal even after petitioners sent their September 22, 2007
letter.[69] Instead of negotiating the proposed P50.00 wage increase, respondent
granted a P16.00 wage increase on the condition that if a collective bargaining
agreement was to be signed, it would only be effective the succeeding year. In
effect, respondent hindered petitioners' bargaining power when it made them waive
the bargaining efforts for 2007 and 2008.

6. Del Monte Philippines Inc. vs Saldivar. G.R. No. 158620. October 11, 2006.
-
Doctrine/s:
- 1. A "closed-shop" may be defined as an enterprise in which, by agreement between the
employer and his employees or their representatives, no person may be employed in
any or certain agreed departments of the enterprise unless he or she is, becomes, and,
for the duration of the agreement, remains a member in good standing of a union entirely
comprised of or of which the employees in interest are a part. A CBA provision for a
closedshop is a valid form of union security and it is not a restriction on the right or
freedom of association guaranteed by the Constitution.
- 2. What the Constitution does recognize is that all workers, whether union members or
not, are "entitled to security of tenure." The guarantee of security of tenure itself is
implemented through legislation, which lays down the proper standards in determining
whether such right was violated. Thus, the employer must observe due process before it
can dismiss an employee.

7. SLORD Development Corporation vs. Noya. February 4, 2019. G.R. No. 232687.

- In Distribution & Control Products, Inc. v. Santos,[62] the Court

has explained that procedural due process consists of the twin
requirements of notice and hearing. The employer must furnish the
employee with two (2) written notices before the termination of
employment can be effected: (1) the first apprises the employee of
the particular acts or omissions for which his dismissal is sought;
and (2) the second informs the employee of the employer's decision
to dismiss him. The requirement of a hearing is complied with as
 long as there was an opportunity to be heard, and not necessarily
that an actual hearing was conducted.[63]
- Notably, in contrast to the factual milieu of PICOP Resources,
Incorporated v. Tañeca,[58] which was relied upon by the CA,
respondent, in this case, did not only solicit support in the
formation of a new union but actually formed and organized a rival
union, BMSDC, outside the freedom period. Similarly, in Tanduay
Distillery Labor Union v. NLRC,[59] the Court ruled that the
organization by union members of a rival union outside the
freedom period, without first terminating their membership in the
union and without the knowledge of the officers of the latter union,
is considered an act of disloyalty, for which the union members
may be sanctioned.[60] As an act of loyalty, a union may require its
members not to affiliate with any other labor union and to consider
its infringement as a reasonable cause for separation, pursuant to
the union security clause in its CBA. Having ratified the CBA and
being members of the union, union members owe fealty and are
required under the union security clause to maintain their
membership in good standing during the term thereof. This
requirement ceases to be binding only during the sixty (60)-day
freedom period immediately preceding the expiration of the CBA,
which enjoys the principle of sanctity or inviolability of contracts
guaranteed by the Constitution.
- Moreover, a closed shop agreement is an agreement whereby an
employer binds himself to hire only members of the contracting union
who must continue to remain members in good standing to keep their
jobs. It is "the most prized achievement of unionism." It adds
membership and compulsory dues. By holding out to loyal members a
promise of employment in the closed shop, it wields group solidarity.
In BPI v. BPI Employees Union-Davao Chapter-Federation of Unions in
BPI Unibank[48] the Court has explained that:
- When certain employees are obliged to join a particular union as a
requisite for continued employment, as in the case of Union Security
Clauses, this condition is a valid restriction of the freedom or right not to
join any labor organization because it is in favor of unionism. This Court,
on occasion, has even held that a union security clause in a CBA is not
 a restriction of the right of freedom of association guaranteed by the
Constitution.
- To validly terminate the employment of an employee through the
enforcement of the union security clause, the following requisites
must concur: (1) the union security clause is applicable; (2) the
union is requesting for the enforcement of the union security
provision in the CBA; and (3) there is sufficient evidence to support
the decision of the union to expel the employee from the union.
- This is consistent with the State policy to promote unionism to
enable workers to negotiate with management on an even playing
field and with more persuasiveness than if they were to individually
and separately bargain with the employer. Thus, the law has
allowed stipulations for "union shop" and "closed shop" as means
of encouraging workers to join and support the union of their
choice in the protection of their rights and interest vis-a-vis the
employer
- "Union security is a generic term which is applied to and
comprehends 'closed shop,' 'union shop,' 'maintenance of
membership' or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as
a condition affecting employment. There is union shop when all
new regular employees are required to join the union within a
certain period for their continued employment. There is
maintenance of membership shop when employees, who are union
members as of the effective date of the agreement, or who
thereafter become members, must maintain union membership as
a condition for continued employment until they are promoted or
transferred out of the bargaining unit, or the agreement is
terminated. A closed shop, on the other hand, may be defined as an
enterprise in which, by agreement between the employer and his
employees or their representatives, no person may be employed in
any or certain agreed departments of the enterprise unless he or
she is, becomes, and, for the duration of the agreement, remains a
member in good standing of a union entirely comprised of or of
which the employees in interest are a part."
8. Insular Life Assurance Co., Ltd. Employees Association vs. The Insular Life Assurance
Co., Ltd. G.R. No. L-25291. January 30, 1971.

- ISSUE: Whether or not respondent company is guilty of ULP

- HELD: YES
- The act of an employer in notifying absent employees individually
during a strike following unproductive efforts at collective bargaining
that the plant would be operated the next day and that their jobs were
open for them should they want to come in has been held to be an unfair
labor practice, as an active interference with the right of collective
bargaining through dealing with the employees individually instead of
through their collective bargaining representatives.
- Although the union is on strike, the employer is still under obligation to
bargain with the union as the employees’ bargaining representative.
- bargain with the union as the employees’ bargaining representative.
- Individual solicitation of the employees or visiting their homes, with the
employer or his representative urging the employees to cease union
activity or cease striking, constitutes unfair labor practice. All the above-
detailed activities are unfair labor practices because they tend to
undermine the concerted activity of the employees, an activity to which
they are entitled free from the employer’s molestation.

9. H. Aronson & Co., Inc. vs. Associated Labor Unions. G.R. No. L-23010. July 9, 1971.
- ISSUE: 1. WON CIR had jurisdiction over the case, and
- 2. WON it erred in finding the petitioners guilty of unfair labor practice
- HELD: 1. Yes. The Court held that CIR had jurisdiction over the case and the petitioners
herein; that it correctly found petitioners guilty of unfair labor practice, and in granting to
the individual respondents the relief set forth in the appealed order. The appealed Order
was affirmed.
- 2. No. The shortening of the corporate life or dissolution of Aronson, and the
subsequent incorporation of the other two petitioners were part and parcel of a plan, or
were intended to accomplish the dismissal of the individual respondents, the Court
concluded. Their contention that the dissolution of Aronson was due to "poor business"
is, upon the record, clearly without merit. The true cause of the termination of the
services of the complainants is their membership with the Associated Labor Union and
their union activities. This finding is supported by the antecedent facts that since its
establishment in 1920 the only instance when the management of the H. Aronson &
Company began to find interference in the conduct of its business affairs was in 1958
when the Associated Labor Union, to which the complainants are affiliated, declared two
strikes wherein the union decisively got what it wanted from the reluctant management.
Attempts were made by the management to break the majority then held by the Union
but it was not successful.
10. Victorias Milling Co., Inc. vs. Victorias Manapla Worker’s Organization-PAFLU. G.R.
No. L-18467. September 30, 1963.

- The above U.S. Supreme Court decision cleared an employer which

discharged employees expelled from the union because  of activities
for a rival union,  from charges of unfair labor practice,  where its
action was based  on a closed-shop contract with a bona fide labor
union entered into and performed in good faith  and valid  in the
state where made.
- Another reason for  enforcing  the  closed-shop agreement is the
principle of sanctity or inviolability of contracts guaranteed by the
Constitution.  As  a matter of principle the provision of the Industrial
Peace Act granting freedom to employees  to organize themselves and
select their representative  for  entering  into bargaining   agreements,
should be subordinated to the constitutional provision protecting  the
sanctity  of contracts.
- The Free Visayan Workers Union conducted an investigation of the 10
dismissed employees prior to their expulsion from the respondent
union and its  recommendation  was for  their   dismissal.  In  this
investigation  it was  found out  that they received the wage increases
on January 14, 1960, but  changed  their  affiliation on February 10,
1960, from the Free Visayan Workers Union to the Philippine
Association  of  Free  Labor  Unions (PAPFLU). Consequently, with
this finding of  the change in their membership and in  view of the
following portion of the existing agreement between the Free Farmers
Union  and the respondent Company:
- "Section 5(a).  All employees who are covered by this agreement as
provided for in Section 4 hereof, who, at the date of the signing of the
agreement, are  member of the union, shall remain members in good
standing as a condition  of continued employment.  Those covered
employees who, at the date of the signing of this agreement, are  not
members of   the  Union, shall  be required to join  and remain
members of the Union in good standing as a condition of continued
employment. * *  *
- "Any laborer or employee who shall join the union in pursuance of the
above requirement and who thereafter shall  resign from the union or
is expelled therefrom for any act contrary to the by-laws, rules and
regulation of the Union, shall  upon  the advise  of the Union to the
 management of the company be dismissed from his employment.  It
is  to be understood, however,  that the  company reserves its right  to
look into the merits of  the expulsion of the laborer or employee
concerned, where his  dismissal from the Company is  sought by the
Union. *  * *"

11. Rommel M. Zambrano vs, Philippine Carpet Manufacturing Corporation. G.R. No.
224099. June 21, 2017.

ISSUES:

1. Whether or not the petitioners were dismissed from employment for a lawful cause.

2. Whether or not the petitioners’ termination from employment constitutes unfair labor practice.

3. Whether or not the quitclaims signed by petitioners are valid and binding.

HELD:

1. Yes. The petitioners were terminated from employment for an authorized cause. In this case, the LA's
findings that Phil Carpet suffered from serious business losses which resulted in its closure were
affirmed in toto by the NLRC, and subsequently by the CA. It is a rule that absent any showing that the
findings of fact of the labor tribunals and the appellate court are not supported by evidence on record or
the judgment is based on a misapprehension of facts, the Court shall not examine anew the evidence
submitted by the parties.

Further, even if the petitioners refuse to consider these losses as serious enough to warrant Phil Carpet's
total and permanent closure, it was a business judgment on the part of the company's owners and
stockholders to cease operations, a judgment which the Court has no business interfering with. The only
limitation provided by law is that the closure must be "bonafide in character and not impelled by a
motive to defeat or circumvent the tenurial rights of employees. Thus, when an employer complies with
the foregoing conditions, the Court cannot prohibit closure "just because the business is not suffering
from any loss or because of the desire to provide the workers continued employment."
2. No. The dismissal of the petitioners did not amount to unfair labor practice. Unfair labor practice
refers to acts that violate the workers' right to organize. There should be no dispute that all the
prohibited acts constituting unfair labor practice in essence relate to the workers' right to self-
organization. Thus, an employer may only be held liable for unfair labor practice if it can be shown that
his acts affect in whatever manner the right of his employees to self-organize.

The general principle is that one who makes an allegation has the burden of proving it. The petitioners
miserably failed to discharge the duty imposed upon them. They did not identify the acts of Phil Carpet,
which, they claimed, constituted unfair labor practice. They did not even point out the specific
provisions, which Phil Carpet violated.

3. Yes. The quitclaims were valid and binding upon the petitioners. Where the person making the waiver
has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is
credible and reasonable, the transaction must be recognized as being a valid and binding undertaking.

In this case, the petitioners question the validity of the quitclaims they signed on the ground that Phil
Carpet's closure was a mere pretense. As the closure of Phil Carpet, however, was supported by
substantial evidence, the petitioners' reason for seeking the invalidation of the quitclaims must
necessarily fail. Further, as aptly observed by the CA, the contents of the quitclaims, which were in
Filipino, were clear and simple, such that it was unlikely that the petitioners did not understand what
they were signing. Finally, the amount they received was reasonable as the same complied with the
requirements of the Labor Code.