Republic of the Philippines On June 16, 1986, the Regional Director directed two of his Labor Standard and
SUPREME COURT Welfare Officers to inspect the records of the petitioner to ascertain the truth of
Manila
EN BANC
G.R. No. 78909 June 30, 1989
MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO,
President, petitioner,
vs.
THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL
DlRECTOR OF LABOR, REGION X, respondents.
MEDIALDEA, J.:
This is a petition for certiorari seeking the annulment of the Decision of the
respondent Secretary of Labor dated September 24, 1986, affirming with
modification the Order of respondent Regional Director of Labor, Region X, dated
August 4, 1986, awarding salary differentials and emergency cost of living
allowances (ECOLAS) to employees of petitioner, and the Order denying
petitioner's motion for reconsideration dated May 13, 1987, on the ground of
grave abuse of discretion.
Petitioner is a semi-government hospital, managed by the Board of Directors of
the Cagayan de Oro Women's Club and Puericulture Center, headed by Mrs.
Antera Dorado, as holdover President. The hospital derives its finances from the
club itself as well as from paying patients, averaging 130 per month. It is also
partly subsidized by the Philippine Charity Sweepstakes Office and the Cagayan
De Oro City government.
Petitioner has forty-one (41) employees. Aside from salary and living allowances,
the employees are given food, but the amount spent therefor is deducted from
their respective salaries (pp. 77-78, Rollo).
On May 23, 1986, ten (10) employees of the petitioner employed in different
capacities/positions filed a complaint with the Office of the Regional Director of
Labor and Employment, Region X, for underpayment of their salaries and
ECOLAS, which was docketed as ROX Case No. CW-71-86.
the allegations in the complaints (p. 98, Rollo). Payrolls covering the periods of
May, 1974, January, 1985, November, 1985 and May, 1986, were duly submitted
for inspection.
On July 17, 1986, the Labor Standard and Welfare Officers submitted their report
confirming that there was underpayment of wages and ECOLAs of all the
employees by the petitioner, the dispositive portion of which reads:
IN VIEW OF THE FOREGOING, deficiency on wage and
ecola as verified and confirmed per review of the respondent
payrolls and interviews with the complainant workers and all
other information gathered by the team, it is respectfully
recommended to the Honorable Regional Director, this office,
that Antera Dorado, President be ORDERED to pay the
amount of SIX HUNDRED FIFTY FOUR THOUSAND SEVEN
HUNDRED FIFTY SIX & 01/100 (P654,756.01), representing
underpayment of wages and ecola to the THIRTY SIX (36)
employees of the said hospital as appearing in the attached
Annex "F" worksheets and/or whatever action equitable under
the premises. (p. 99, Rollo)
Based on this inspection report and recommendation, the Regional Director
issued an Order dated August 4, 1986, directing the payment of P723,888.58,
representing underpayment of wages and ECOLAs to all the petitioner's
employees, the dispositive portion of which reads:
WHEREFORE, premises considered, respondent Maternity
and Children Hospital is hereby ordered to pay the above-
listed complainants the total amount indicated opposite each
name, thru this Office within ten (10) days from receipt
thereof. Thenceforth, the respondent hospital is also ordered
to pay its employees/workers the prevailing statutory
minimum wage and allowance.
SO ORDERED. (p. 34, Rollo)
Petitioner appealed from this Order to the Minister of Labor and Employment,
Hon. Augusto S. Sanchez, who rendered a Decision on September 24, 1986,
modifying the said Order in that deficiency wages and ECOLAs should be
computed only from May 23, 1983 to May 23, 1986, the dispositive portion of
which reads:
 WHEREFORE, the August 29, 1986 order is hereby
MODIFIED in that the deficiency wages and ECOLAs should
only be computed from May 23, 1983 to May 23, 1986. The
case is remanded to the Regional Director, Region X, for
recomputation specifying the amounts due each the
complainants under each of the applicable Presidential
Decrees. (p. 40, Rollo)
On October 24, 1986, the petitioner filed a motion for reconsideration which was
denied by the Secretary of Labor in his Order dated May 13, 1987, for lack of
merit (p. 43 Rollo).
The instant petition questions the all-embracing applicability of the award
involving salary differentials and ECOLAS, in that it covers not only the hospital
employees who signed the complaints, but also those (a) who are not signatories
to the complaint, and (b) those who were no longer in the service of the hospital
at the time the complaints were filed.
Petitioner likewise maintains that the Order of the respondent Regional Director
of Labor, as affirmed with modifications by respondent Secretary of Labor, does
not clearly and distinctly state the facts and the law on which the award was
based. In its "Rejoinder to Comment", petitioner further questions the authority of
the Regional Director to award salary differentials and ECOLAs to private
respondents, (relying on the case of Encarnacion vs. Baltazar, G.R. No. L-16883,
March 27, 1961, 1 SCRA 860, as authority for raising the additional issue of lack
of jurisdiction at any stage of the proceedings, p. 52, Rollo), alleging that the
original and exclusive jurisdiction over money claims is properly lodged in the
Labor Arbiter, based on Article 217, paragraph 3 of the Labor Code.
The primary issue here is whether or not the Regional Director had jurisdiction
over the case and if so, the extent of coverage of any award that should be
forthcoming, arising from his visitorial and enforcement powers under Article 128
of the Labor Code. The matter of whether or not the decision states clearly and
distinctly statement of facts as well as the law upon which it is based, becomes
relevant after the issue on jurisdiction has been resolved.
This is a labor standards case, and is governed by Art. 128-b of the Labor Code,
as amended by E.O. No. 111. Labor standards refer to the minimum
requirements prescribed by existing laws, rules, and regulations relating to
wages, hours of work, cost of living allowance and other monetary and welfare
benefits, including occupational, safety, and health standards (Section 7, Rule I,
Rules on the Disposition of Labor Standards Cases in the Regional Office, dated
September 16, 1987). 1 Under the present rules, a Regional Director
exercises both visitorial and enforcement power over labor standards cases, and
is therefore empowered to adjudicate money claims, provided there still exists an
employer-employee relationship, and the findings of the regional office is not
contested by the employer concerned.
Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional
Director's authority over money claims was unclear. The complaint in the present
case was filed on May 23, 1986 when E.O. No. 111 was not yet in effect, and the
prevailing view was that stated in the case of Antonio Ong, Sr. vs. Henry M.
Parel, et al., G.R. No. 76710, dated December 21, 1987, thus:
. . . the Regional Director, in the exercise of his visitorial and
enforcement powers under Article 128 of the Labor Code, has
no authority to award money claims, properly falling within the
jurisdiction of the labor arbiter. . . .
. . . If the inspection results in a finding that the employer has
violated certain labor standard laws, then the regional director
must order the necessary rectifications. However, this does
not include adjudication of money claims, clearly within the
ambit of the labor arbiter's authority under Article 217 of the
Code.
The Ong case relied on the ruling laid down in Zambales Base Metals Inc. vs.
The Minister of Labor, et al., (G.R. Nos. 73184-88, November 26, 1986, 146
SCRA 50) that the "Regional Director was not empowered to share in the original
and exclusive jurisdiction conferred on Labor Arbiters by Article 217."
We believe, however, that even in the absence of E. O. No. 111, Regional
Directors already had enforcement powers over money claims, effective under
P.D. No. 850, issued on December 16, 1975, which transferred labor standards
cases from the arbitration system to the enforcement system.
To clarify matters, it is necessary to enumerate a series of rules and provisions of
law on the disposition of labor standards cases.
Prior to the promulgation of PD 850, labor standards cases were an exclusive
function of labor arbiters, under Article 216 of the then Labor Code (PD No. 442,
as amended by PD 570-a), which read in part:
Art. 216. Jurisdiction of the Commission. The Commission
shall have exclusive appellate jurisdiction over all cases
decided by the Labor Arbiters and compulsory arbitrators.
 The Labor Arbiters shall have exclusive jurisdiction to hear xxx xxx xxx
and decide the following cases involving all workers whether
agricultural or non-agricultural. (b) The Secretary of
Labor or his duly
xxx xxx xxx authorized
representatives shall
(c) All money claims of workers, involving have the power to order
and administer, after
non-payment or underpayment of wages,
overtime compensation, separation pay, due notice and
maternity leave and other money claims hearing, compliance
arising from employee-employer relations, with the labor standards
except claims for workmen's provisions of this Code
compensation, social security and based on the findings of
medicare benefits; labor regulation officers
or industrial safety
engineers made in the
(d) Violations of labor standard laws; course of inspection,
and to issue writs of
xxx xxx xxx execution to the
appropriate authority for
the enforcement of their
(Emphasis supplied) order.

The Regional Director exercised visitorial rights only under then Article 127 of the
Code as follows:
ART. 127. Visitorial Powers. The Secretary of Labor or his
duly authorized representatives, including, but not restricted,
to the labor inspectorate, shall have access to employers'
records and premises at any time of the day or night
whenever work is being undertaken therein, and the right to
copy therefrom, to question any employee and investigate any
fact, condition or matter which may be necessary to determine
violations or in aid in the enforcement of this Title and of any
Wage Order or regulation issued pursuant to this Code.
With the promulgation of PD 850, Regional Directors were given enforcement
powers, in addition to visitorial powers. Article 127, as amended, provided in part:
xxx xxx xxx
Labor Arbiters, on the other hand, lost jurisdiction over labor standards cases.
Article 216, as then amended by PD 850, provided in part:
SEC. 22. Article 216 of the Code is hereby amended to read
as follows:
Art. 216. 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:

SEC. 10. Article 127 of the Code is hereby amended to read xxx xxx xxx
as follows:
(3) All money claims of
Art. 127. Visitorial and enforcement workers involving non-
powers. payment or
underpayment of
 wages, overtime or violations of labor
premium standard
compensation, laws discovered in the
maternity or service course of inspection or
incentive leave, complaints where
separation pay and employer-employee
other money claims relations still exist;
arising from employer-
employee relations, xxx xxx xxx
except claims for
employee's
compensation, social 2. The following cases are under
security and medicare the exclusive original jurisdiction of
benefits and as the Conciliation Section of the Regional
otherwise provided in Office:
Article 127 of this Code.
a) Labor standards
xxx xxx xxx cases where employer-
employee
relations no longer
(Emphasis supplied) exist;

Under the then Labor Code therefore (PD 442 as amended by PD 570-a, as xxx xxx xxx
further amended by PD 850), there were three adjudicatory units: The Regional
Director, the Bureau of Labor Relations and the Labor Arbiter. It became
necessary to clarify and consolidate all governing provisions on jurisdiction into 6. The following cases are certifiable to the
one document. 2 On April 23, 1976, MOLE Policy Instructions No. 6 was issued, Labor Arbiters:
and provides in part (on labor standards cases) as follows:
a) Cases not settled by
POLICY INSTRUCTIONS NO. 6 the Conciliation Section
of the Regional Office,
namely:
TO: All Concerned

1) labor standard cases

SUBJECT: DISTRIBUTION OF JURISDICTION OVER where employer-
LABOR CASES employee relations no
longer exist;
xxx xxx xxx
xxx xxx xxx
1. The following cases are under
the exclusive original jurisdiction of the (Emphasis supplied)
Regional Director.

MOLE Policy Instructions No. 7 (undated) was likewise subsequently issued,

a) Labor standards
enunciating the rationale for, and the scope of, the enforcement power of the
cases arising from Regional Director, the first and second paragraphs of which provide as follows:
 POLICY INSTRUCTIONS NO. 7
TO: All Regional Directors
SUBJECT: LABOR STANDARDS CASES
Under PD 850, labor standards cases have been taken from
the arbitration system and placed under the enforcement
system, except where a) questions of law are involved as
determined by the Regional Director, b) the amount involved
exceeds P100,000.00 or over 40% of the equity of the
employer, whichever is lower, c) the case requires evidentiary
matters not disclosed or verified in the normal course of
inspection, or d) there is no more employer-employee
relationship.
The purpose is clear: to assure the worker the rights and
benefits due to him under labor standards laws without having
to go through arbitration. The worker need not litigate to get
what legally belongs to him. The whole enforcement
machinery of the Department of Labor exists to insure its
expeditious delivery to him free of charge. (Emphasis
supplied)
Under the foregoing, a complaining employee who was denied his rights and
benefits due him under labor standards law need not litigate. The Regional
Director, by virtue of his enforcement power, assured "expeditious delivery to him
of his rights and benefits free of charge", provided of course, he was still in the
employ of the firm.
After PD 850, Article 216 underwent a series of amendments (aside from being
re-numbered as Article 217) and with it a corresponding change in the jurisdiction
of, and supervision over, the Labor Arbiters:
1. PD 1367 (5-1-78) gave Labor
Arbiters exclusive jurisdiction
over unresolved issues in collective
bargaining, etc., and those cases arising
from employer-employee relations duly
indorsed by the Regional Directors. (It also
removed his jurisdiction over moral or
other damages) In other words, the Labor
Arbiter entertained cases certified to him.
(Article 228, 1978 Labor Code.)
2. PD 1391 (5-29-78) all regional units
of the National Labor Relations
Commission (NLRC) were integrated into
the Regional Offices Proper of the Ministry
of Labor; effectively transferring direct
administrative control and supervision over
the Arbitration Branch to the Director of the
Regional Office of the Ministry of Labor.
"Conciliable cases" which were thus
previously under the jurisdiction of the
defunct Conciliation Section of the
Regional Office for purposes of conciliation
or amicable settlement, became
immediately assignable to the Arbitration
Branch for joint conciliation and
compulsory arbitration. In addition, the
Labor Arbiter had jurisdiction even over
termination and labor-standards cases
that may be assigned to them for
compulsory arbitration by the Director of
the Regional Office. PD 1391 merged
conciliation and compulsory arbitration
functions in the person of the Labor
Arbiter. The procedure governing the
disposition of cases at the Arbitration
Branch paralleled those in the Special
Task Force and Field Services Division,
with one major exception: the Labor Arbiter
exercised full and untrammelled authority
in the disposition of the case, particularly in
the substantive aspect, his decisions and
orders subject to review only on appeal to
the NLRC. 3
3. MOLE Policy Instructions No. 37
Because of the seemingly overlapping
functions as a result of PD 1391, MOLE
Policy Instructions No. 37 was issued on
October 7, 1978, and provided in part:
POLICY INSTRUCTIONS NO. 37
TO: All Concerned
SUBJECT: ASSIGNMENT OF CASES TO LABOR
ARBITERS
Pursuant to the provisions of Presidential
Decree No. 1391 and to insure speedy
disposition of labor cases, the following
guidelines are hereby established for the
information and guidance of all concerned.
1. Conciliable Cases.
Cases which are conciliable per se i.e., (a)
labor standards cases where employer-
employee relationship no longer exists; (b)
cases involving deadlock in collective
bargaining, except those falling under P.D.
823, as amended; (c) unfair labor practice
cases; and (d) overseas employment
cases, except those involving overseas
seamen, shall be assigned by the Regional
Director to the Labor Arbiter for conciliation
and arbitration without coursing them
through the conciliation section of the
Regional Office.
2. Labor Standards
Cases.
Cases involving violation of labor
standards laws where employer- employee
relationship still exists shall be assigned to
the Labor Arbiters where:
a) intricate questions of
law are involved; or
b) evidentiary matters
not disclosed or verified
in the normal course of
inspection by labor
regulations officers are
required for their proper
disposition.
3. Disposition of Cases.
When a case is assigned to a Labor
Arbiter, all issues raised therein shall be
resolved by him including those which are
originally cognizable by the Regional
Director to avoid multiplicity of
proceedings. In other words, the whole
case, and not merely issues involved
therein, shall be assigned to and resolved
by him.
xxx xxx xxx
(Emphasis supplied)
4. PD 1691(5-1-80) original and
exclusive jurisdiction
over unresolved issues in collective
bargaining and money claims,
which includes moral or other damages.
Despite the original and exclusive jurisdiction of labor arbiters
over money claims, however, the Regional Director
nonetheless retained his enforcement power, and remained
empowered to adjudicate uncontested money claims.
5. BP 130 (8-21-8l) strengthened
voluntary arbitration. The decree also
returned the Labor Arbiters as part of the
NLRC, operating as Arbitration Branch
thereof.
6. BP 227(6-1- 82) original and
exclusive jurisdiction over questions
involving legality of strikes and lock-outs.
The present petition questions the authority of the Regional Director to issue the
Order, dated August 4, 1986, on the basis of his visitorial and enforcement
powers under Article 128 (formerly Article 127) of the present Labor Code. It is
contended that based on the rulings in the Ong vs. Parel (supra) and
the Zambales Base Metals, Inc. vs. TheMinister of Labor (supra) cases, a
Regional Director is precluded from adjudicating money claims on the ground
that this is an exclusive function of the Labor Arbiter under Article 217 of the
present Code.
On August 4, 1986, when the order was issued, Article 128(b) 4 read as follows:
(b) The Minister of Labor or his duly
authorized representatives shall have the
power to order and administer, after due
notice and hearing, compliance with the
labor standards provisions of this Code
based on the findings of labor regulation
officers or industrial safety engineers made
in the course of inspection, and to issue
writs of execution to the appropriate
authority for the enforcement of their order,
except in cases where the employer
contests the findings of the labor
regulations officer and raises issues which
cannot be resolved without considering
evidentiary matters that are not verifiable
in the normal course of inspection.
(Emphasis supplied)
On the other hand, Article 217 of the Labor Code as amended by P.D. 1691,
effective May 1, 1980; Batas Pambansa Blg. 130, effective August 21, 1981; and
Batas Pambansa Blg. 227, effective June 1, 1982, inter alia, provides:
ART. 217. Jurisdiction of Labor Arbiters and the Commission.
(a) The Labor Arbiters shall have the original and
exclusive jurisdiction to hear and decide within thirty (30)
working days after submission of the case by the parties for
decision, the following cases involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving
wages, hours of work and other terms and
conditions of employment;
3. All money claims of workers, including
those based on non-payment or
underpayment of wages, overtime
compensation, separation pay and other
benefits provided by law or appropriate
agreement, except claims for employees'
compensation, social security, medicare
and maternity benefits;
4. Cases involving household services;
and
5. Cases arising from any violation of
Article 265 of this Code, including
questions involving the legality of strikes
and lock-outs. (Emphasis supplied)
The Ong and Zambales cases involved workers who were still connected with the
company. However, in the Ong case, the employer disputed the adequacy of the
evidentiary foundation (employees' affidavits) of the findings of the labor
standards inspectors while in the Zambales case, the money claims which arose
from alleged violations of labor standards provisions were not discovered in the
course of normal inspection. Thus, the provisions of MOLE Policy Instructions
Nos. 6, (Distribution of Jurisdiction Over Labor Cases) and 37 (Assignment of
Cases to Labor Arbiters) giving Regional Directors adjudicatory powers over
uncontested money claims discovered in the course of normal inspection,
provided an employer-employee relationship still exists, are inapplicable.
In the present case, petitioner admitted the charge of underpayment of wages to
workers still in its employ; in fact, it pleaded for time to raise funds to satisfy its
obligation. There was thus no contest against the findings of the labor inspectors.
Barely less than a month after the promulgation on November 26, 1986 of the
Zambales Base Metals case, Executive Order No. 111 was issued on December
24, 1986, 5 amending Article 128(b) of the Labor Code, to read as follows:
(b) THE PROVISIONS OF ARTICLE 217
OF THIS CODE TO THE CONTRARY
NOTWITHSTANDING AND IN CASES
WHERE THE RELATIONSHIP OF
EMPLOYER-EMPLOYEE STILL EXISTS,
the Minister of Labor and Employment or
his duly authorized representatives shall
have the power to order and administer,
after due notice and hearing, compliance
with the labor standards provisions of this
Code AND OTHER LABOR LEGISLATION
based on the findings of labor regulation
officers or industrial safety engineers made
in the course of inspection, and to issue
writs of execution to the appropriate
authority for the enforcement of their
orders, except in cases where the
employer contests the findings of the labor
 regulation officer and raises issues which
cannot be resolved without considering
evidentiary matters that are not verifiable
in the normal course of inspection.
(Emphasis supplied)
As seen from the foregoing, EO 111 authorizes a Regional Director to order
compliance by an employer with labor standards provisions of the Labor Code
and other legislation. It is Our considered opinion however, that the inclusion of
the phrase, " The provisions of Article 217 of this Code to the contrary
notwithstanding and in cases where the relationship of employer-employee still
exists" ... in Article 128(b), as amended, above-cited,
merely confirms/reiterates the enforcement adjudication authority of the Regional
Director over uncontested money claims in cases where an employer-employee
relationship still exists. 6
Viewed in the light of PD 850 and read in coordination with MOLE Policy
Instructions Nos. 6, 7 and 37, it is clear that it has always been the intention of
our labor authorities to provide our workers immediate access (when still feasible,
as where an employer-employee relationship still exists) to their rights and
benefits, without being inconvenienced by arbitration/litigation processes that
prove to be not only nerve-wracking, but financially burdensome in the long run.
Note further the second paragraph of Policy Instructions No. 7 indicating that the
transfer of labor standards cases from the arbitration system to the enforcement
system is
. . to assure the workers the rights and benefits due to him
under labor standard laws, without having to go through
arbitration. . .
so that
. . the workers would not litigate to get what legally belongs to
him. .. ensuring delivery . . free of charge.
Social justice legislation, to be truly meaningful and rewarding to our workers,
must not be hampered in its application by long-winded arbitration and litigation.
Rights must be asserted and benefits received with the least inconvenience.
Labor laws are meant to promote, not defeat, social justice.
This view is in consonance with the present "Rules on the Disposition of Labor
Standard Cases in the Regional Offices " 7 issued by the Secretary of Labor,
Franklin M. Drilon on September 16, 1987.
Thus, Sections 2 and 3 of Rule II on "Money Claims Arising from Complaint
Routine Inspection", provide as follows:
Section 2. Complaint inspection. All such complaints shall
immediately be forwarded to the Regional Director who shall
refer the case to the appropriate unit in the Regional Office for
assignment to a Labor Standards and Welfare Officer (LSWO)
for field inspection. When the field inspection does not
produce the desired results, the Regional Director shall
summon the parties for summary investigation to expedite the
disposition of the case. . . .
Section 3. Complaints where no employer-employee
relationship actually exists. Where employer-employee
relationship no longer exists by reason of the fact that it has
already been severed, claims for payment of monetary
benefits fall within the exclusive and original jurisdiction of the
labor arbiters. . . . (Emphasis supplied)
Likewise, it is also clear that the limitation embodied in MOLE Policy Instructions
No. 7 to amounts not exceeding P100,000.00 has been dispensed with, in view
of the following provisions of pars. (b) and (c), Section 7 on "Restitution", the
same Rules, thus:
xxx xxx xxx
(b) Plant-level restitutions may be effected
for money claims not exceeding Fifty
Thousand (P50,000.00). . . .
(c) Restitutions in excess of the
aforementioned amount shall be effected
at the Regional Office or at the worksite
subject to the prior approval of the
Regional Director.
which indicate the intention to empower the Regional Director to award money
claims in excess of P100,000.00; provided of course the employer does not
contest the findings made, based on the provisions of Section 8 thereof:
Section 8. Compromise agreement. Should the parties
arrive at an agreement as to the whole or part of the dispute,
said agreement shall be reduced in writing and signed by the
 parties in the presence of the Regional Director or his duly
authorized representative.
E.O. No. 111 was issued on December 24, 1986 or three (3) months after the
promulgation of the Secretary of Labor's decision upholding private respondents'
salary differentials and ECOLAs on September 24, 1986. The amendment of the
visitorial and enforcement powers of the Regional Director (Article 128-b) by said
E.O. 111 reflects the intention enunciated in Policy Instructions Nos. 6 and 37 to
empower the Regional Directors to resolve uncontested money claims in cases
where an employer-employee relationship still exists. This intention must be
given weight and entitled to great respect. As held in Progressive Workers'
Union, et. al. vs. F.P. Aguas, et. al. G.R. No. 59711-12, May 29, 1985, 150 SCRA
429:
. . The interpretation by officers of laws which are entrusted to
their administration is entitled to great respect. We see no
reason to detract from this rudimentary rule in administrative
law, particularly when later events have proved said
interpretation to be in accord with the legislative intent. ..
The proceedings before the Regional Director must, perforce, be upheld on the
basis of Article 128(b) as amended by E.O. No. 111, dated December 24, 1986,
this executive order "to be considered in the nature of a curative statute with
retrospective application." (Progressive Workers' Union, et al. vs. Hon. F.P.
Aguas, et al. (Supra); M. Garcia vs. Judge A. Martinez, et al., G.R. No. L- 47629,
May 28, 1979, 90 SCRA 331).
We now come to the question of whether or not the Regional Director erred in
extending the award to all hospital employees. We answer in the affirmative.
The Regional Director correctly applied the award with respect to those
employees who signed the complaint, as well as those who did not sign the
complaint, but were still connected with the hospital at the time the complaint was
filed (See Order, p. 33 dated August 4, 1986 of the Regional Director, Pedrito de
Susi, p. 33, Rollo).
The justification for the award to this group of employees who were not
signatories to the complaint is that the visitorial and enforcement powers given to
the Secretary of Labor is relevant to, and exercisable over establishments, not
over the individual members/employees, because what is sought to be achieved
by its exercise is the observance of, and/or compliance by, such
firm/establishment with the labor standards regulations. Necessarily, in case of
an award resulting from a violation of labor legislation by such establishment, the
entire members/employees should benefit therefrom. As aptly stated by then
Minister of Labor Augusto S. Sanchez:
. . It would be highly derogatory to the rights of the workers, if
after categorically finding the respondent hospital guilty of
underpayment of wages and ECOLAs, we limit the award to
only those who signed the complaint to the exclusion of the
majority of the workers who are similarly situated. Indeed, this
would be not only render the enforcement power of the
Minister of Labor and Employment nugatory, but would be the
pinnacle of injustice considering that it would not only
discriminate but also deprive them of legislated benefits.
. . . (pp. 38-39, Rollo).
This view is further bolstered by the provisions of Sec. 6, Rule II of the "Rules on
the Disposition of Labor Standards cases in the Regional Offices" (supra)
presently enforced, viz:
SECTION 6. Coverage of complaint inspection. A
complaint inspection shall not be limited to the specific
allegations or violations raised by the complainants/workers
but shall be a thorough inquiry into and verification of the
compliance by employer with existing labor standards and
shall cover all workers similarly situated. (Emphasis supplied)
However, there is no legal justification for the award in favor of those employees
who were no longer connected with the hospital at the time the complaint was
filed, having resigned therefrom in 1984, viz:
1. Jean (Joan) Venzon (See Order, p. 33, Rollo)
2. Rosario Paclijan
3. Adela Peralta
4. Mauricio Nagales
5. Consesa Bautista
6. Teresita Agcopra
7. Felix Monleon
8. Teresita Salvador
9. Edgar Cataluna; and
10. Raymond Manija ( p.7, Rollo)
The enforcement power of the Regional Director cannot legally be upheld in
cases of separated employees. Article 129 of the Labor Code, cited by petitioner
(p. 54, Rollo) is not applicable as said article is in aid of the enforcement power of
the Regional Director; hence, not applicable where the employee seeking to be
paid underpayment of wages is already separated from the service. His claim is
purely a money claim that has to be the subject of arbitration proceedings and
therefore within the original and exclusive jurisdiction of the Labor Arbiter.

Petitioner has likewise questioned the order dated August 4, 1986 of the
Regional Director in that it does not clearly and distinctly state the facts and the
law on which the award is based.

We invite attention to the Minister of Labor's ruling thereon, as follows:

Finally, the respondent hospital assails the order under

appeal as null and void because it does not clearly and
distinctly state the facts and the law on which the awards
were based. Contrary to the pretensions of the respondent
hospital, we have carefully reviewed the order on appeal and
we found that the same contains a brief statement of the (a)
facts of the case; (b) issues involved; (c) applicable laws; (d)
conclusions and the reasons therefor; (e) specific remedy
granted (amount awarded). (p. 40, Rollo)

ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED,

as regards all persons still employed in the Hospital at the time of the filing of the
complaint, but GRANTED as regards those employees no longer employed at
that time.

SO ORDERED.
 DECISION
LAUREL, J.:
Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila,
brought before this court this petition for a writ of prohibition against the
respondents, A. D. Williams, as Chairman of the National Traffic Commission;
Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary
of Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of
Manila; and Juan Dominguez, as Acting Chief of Police of Manila.
It is alleged in the petition that the National Traffic Commission, in its resolution of
July 17, 1940, resolved to recommend to the Director of Public Works and to the
Secretary of Public Works and Communications that animal-drawn vehicles be
prohibited from passing along Rosario Street extending from Plaza Calderon de
la Barca to Dasmarias Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m.
to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at
Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., from a period of one
year from the date of the opening of the Colgante Bridge to traffic; that the
Chairman of the National Traffic Commission, on July 18, 1940 recommended to
the Director of Public Works the adoption of the measure proposed in the
resolution aforementioned, in pursuance of the provisions of Commonwealth Act
No. 548 which authorizes said Director of Public Works, with the approval of the
Secretary of Public Works and Communications, to promulgate rules and
regulations to regulate and control the use of and traffic on national roads; that on
August 2, 1940, the Director of Public Works, in his first indorsement to the
Secretary of Public Works and Communications, recommended to the latter the
approval of the recommendation made by the Chairman of the National Traffic
Commission as aforesaid, with the modification that the closing of Rizal Avenue
to traffic to animal-drawn vehicles be limited to the portion thereof extending from
the railroad crossing at Antipolo Street to Azcarraga Street; that on August 10,
1940, the Secretary of Public Works and Communications, in his second
indorsement addressed to the Director of Public Works, approved the
recommendation of the latter that Rosario Street and Rizal Avenue be closed to
traffic of animal-drawn vehicles, between the points and during the hours as
above indicated, for a period of one year from the date of the opening of the
Colgante Bridge to traffic; that the Mayor of Manila and the Acting Chief of Police
of Manila have enforced and caused to be enforced the rules and regulations
thus adopted; that as a consequence of such enforcement, all animal-drawn
vehicles are not allowed to pass and pick up passengers in the places above-
mentioned to the detriment not only of their owners but of the riding public as
well.
It is contended by the petitioner that Commonwealth Act No. 548 by which the
Director of Public Works, with the approval of the Secretary of Public Works and
Communications, is authorized to promulgate rules and regulations for the
regulation and control of the use of and traffic on national roads and streets is
unconstitutional because it constitutes an undue delegation of legislative power.
This contention is untenable. As was observed by this court in Rubi v. Provincial
Board of Mindoro (39 Phil, 660, 700), "The rule has nowhere been better stated
than in the early Ohio case decided by Judge Ranney, and since followed in a
multitude of cases, namely: The true distinction therefore is between the
delegation of power to make the law, which necessarily involves a discretion as
to what it shall be, and conferring an authority or discretion as to its execution, to
be exercised under and in pursuance of the law. The first cannot be done; to the
latter no valid objection can be made. (Cincinnati, W. & Z. R. Co. v. Commrs.
Clinton County, 1 Ohio St., 88.) Discretion, as held by Chief Justice Marshall in
Wayman v. Southard (10 Wheat., 1) may be committed by the Legislature to an
executive department or official. The Legislature may make decisions of
executive departments or subordinate officials thereof, to whom it has committed
the execution of certain acts, final on questions of fact. (U.S. v. Kinkead, 248
Fed., 141.) The growing tendency in the decisions is to give prominence to the
necessity of the case."cralaw virtua1aw library
Section 1 of Commonwealth Act No. 548 reads as follows:jgc:chanrobles.com.ph
"SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and
streets designated as national roads by acts of the National Assembly or by
executive orders of the President of the Philippines, the Director of Public Works,
with the approval of the Secretary of Public Works and Communications, shall
promulgate the necessary rules and regulations to regulate and control the use of
and traffic on such roads and streets. Such rules and regulations, with the
approval of the President, may contain provisions controlling or regulating the
construction of buildings or other structures within a reasonable distance from
along the national roads. Such roads may be temporarily closed to any or all
classes of traffic by the Director of Public Works and his duly authorized
representatives whenever the condition of the road or the traffic thereon makes
such action necessary or advisable in the public convenience and interest, or for
a specified period, with the approval of the Secretary of Public Works and
Communications."cralaw virtua1aw library
The above provisions of law do not confer legislative power upon the Director of
Public Works and the Secretary of Public Works and Communications. The
authority therein conferred upon them and under which they promulgated the
rules and regulations now complained of is not to determine what public policy
demands but merely to carry out the legislative policy laid down by the National
Assembly in said Act, to wit, "to promote safe transit upon and avoid obstructions
on, roads and streets designated as national roads by acts of the National
Assembly or by executive orders of the President of the Philippines" and to close
them temporarily to any or all classes of traffic "whenever the condition of the
road or the traffic makes such action necessary or advisable in the public
convenience and interest." The delegated power, if at all, therefore, is not the
determination of what the law shall be, but merely the ascertainment of the facts
and circumstances upon which the application of said law is to be predicated. To
promulgate rules and regulations on the use of national roads and to determine
when and how long a national road should be closed to traffic, in view of the
condition of the road or the traffic thereon and the requirements of public
convenience and interest, is an administrative function which cannot be directly
discharged by the National Assembly. It must depend on the discretion of some
other government official to whom is confided the duty of determining whether the
proper occasion exists for executing the law. But it cannot be said that the
exercise of such discretion is the making of the law. As was said in Lockes
Appeal (72 Pa. 491): "To assert that a law is less than a law, because it is made
to depend on a future event or act, is to rob the Legislature of the power to act
wisely for the public welfare whenever a law is passed relating to a state of affairs
not yet developed, or to things future and impossible to fully know." The proper
distinction the court said was this: "The Legislature cannot delegate its power to
make the law; but it can make a law to delegate a power to determine some fact
or state of things upon which the law makes, or intends to make, its own action
depend. To deny this would be to stop the wheels of government. There are
many things upon which wise and useful legislation must depend which cannot
be known to the law-making power, and, must, therefore, be a subject of inquiry
and determination outside of the halls of legislation." (Field v. Clark, 143 U. S.
649, 694; 36 L. Ed. 294.)
In the case of People v. Rosenthal and Osmea, G.R. Nos. 46076 and 46077,
promulgated June 12, 1939, and in Pangasinan Transportation v. The Public
Service Commission, G.R. No. 47065, promulgated June 26, 1940, this Court
had occasion to observe that the principle of separation of powers has been
made to adapt itself to the complexities of modern governments, giving rise to the
adoption, within certain limits, of the principle of "subordinate legislation," not only
in the United States and England but in practically all modern governments.
Accordingly, with the growing complexity of modern life, the multiplication of the
subjects of governmental regulations, and the increased difficulty of administering
the laws, the rigidity of the theory of separation of governmental powers has, to a
large extent, been relaxed by permitting the delegation of greater powers by the
legislative and vesting a larger amount of discretion in administrative and
executive officials, not only in the execution of the laws, but also in the
promulgation of certain rules and regulations calculated to promote public
interest.
The petitioner further contends that the rules and regulations promulgated by the
respondents pursuant to the provisions of Commonwealth Act No. 548 constitute
an unlawful interference with legitimate business or trade and abridge the right to
personal liberty and freedom of locomotion. Commonwealth Act No. 548 was
passed by the National Assembly in the exercise of the paramount police power
of the state.
Said Act, by virtue of which the rules and regulations complained of were
promulgated, aims to promote safe transit upon and avoid obstructions on
national roads, in the interest and convenience of the public. In enacting said law,
therefore, the National Assembly was prompted by considerations of public
convenience and welfare. It was inspired by a desire to relieve congestion of
traffic. which is, to say the least, a menace to public safety. Public welfare, then,
lies at the bottom of the enactment of said law, and the state in order to promote
the general welfare may interfere with personal liberty, with property, and with
business and occupations. Persons and property may be subjected to all kinds of
restraints and burdens, in order to secure the general comfort, health, and
prosperity of the state (U.S. v. Gomez Jesus, 31 Phil., 218). To this fundamental
aim of our Government the rights of the individual are subordinated. Liberty is a
blessing without which life is a misery, but liberty should not be made to prevail
over authority because then society will fall into anarchy. Neither should authority
be made to prevail over liberty because then the individual will fall into slavery.
The citizen should achieve the required balance of liberty and authority in his
mind through education and personal discipline, so that there may be established
the resultant equilibrium, which means peace and order and happiness for all.
The moment greater authority is conferred upon the government, logically so
much is withdrawn from the residuum of liberty which resides in the people. The
paradox lies in the fact that the apparent curtailment of liberty is precisely the
very means of insuring its preservation.
The scope of police power keeps expanding as civilization advances. As was
said in the case of Dobbins v. Los Angeles (195 U.S. 223, 238; 49 L. ed. 169),
"the right to exercise the police power is a continuing one, and a business lawful
today may in the future, because of the changed situation, the growth of
population or other causes, become a menace to the public health and welfare,
and be required to yield to the public good." And in People v. Pomar (46 Phil.,
440), it was observed that "advancing civilization is bringing within the police
power of the state today things which were not thought of as being within such
power yesterday. The development of civilization, the rapidly increasing
population, the growth of public opinion, with an increasing desire on the part of
the masses and of the government to look after and care for the interests of the
individuals of the state, have brought within the police power many questions for
regulation which formerly were not so considered."cralaw virtua1aw library
The petitioner finally avers that the rules and regulations complained of infringe
upon the constitutional precept regarding the promotion of social justice to insure
the well-being and economic security of all the people. The promotion of social
justice, however, is to be achieved not through a mistaken sympathy towards any
given group. Social justice is "neither communism, nor despotism, nor atomism,
nor anarchy," but the humanization of laws and the equalization of social and
economic forces by the State so that justice in its rational and objectively secular
conception may at least be approximated. Social justice means the promotion of
the welfare of all the people, the adoption by the Government of measures
calculated to insure economic stability of all the competent elements of society,
through the maintenance of a proper economic and social equilibrium in the
interrelations of the members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-constitutionally, through the
exercise of powers underlying the existence of all governments on the time-
honored principle of salus populi est suprema lex.

Social justice, therefore, must be founded on the recognition of the necessity of

interdependence among divers and diverse units of a society and of the
protection that should be equally and evenly extended to all groups as a
combined force in our social and economic life, consistent with the fundamental
and paramount objective of the state of promoting the health, comfort, and quiet
of all persons, and of bringing about "the greatest good to the greatest
number."cralaw virtua1aw library

In view of the foregoing, the writ of prohibition prayed for is hereby denied, with
costs against the petitioner. So ordered.

Avancea, C.J., Imperial, Diaz. and Horrilleno. JJ. concur.

G.R. No. L-68147 June 30, 1988
AMADA RANCE, MERCEDES LACUESTA, MELBA GUTIERREZ, ESTER
FELONGCO, CATALINO ARAGONES, CONSOLACION DE LA ROSA,
AMANCIA GAY, EDUARDO MENDOZA, ET AL., petitioners,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, POLYBAG
MANUFACTURING CORPORATION, VIRGINIA MALLARI, JOHNNY LEE,
ROMAS VILLAMIN, POLYBAG WORKERS UNION, PONCIANO FERNANDEZ,
AND ANTONIO ANTIQUERA, respondents.
PARAS, J.:
A review of the records shows that a Collective Bargaining Agreement was
entered into on April 30, 1981 by and between respondents Polybag
Manufacturing Corporation and Polybag Workers Union which provides among
others:
ARTICLE V
UNION SECURITY
Any employee within the bargaining agreement who is a
member of the union at the time of the effectivity of this
agreement or becomes a member of the UNION thereafter,
shall during the term thereof or any extention, continue to be a
member in good standing of the UNION as a condition of
continued employment in the COMPANY.
Any employee hired during the effectivity of this agreement
shall, within 30 days after becoming regular join the UNION
and continue to be a member in good standing thereof as a
condition of continued employment in the COMPANY.
On the basis of a board resolution of the UNION, the
COMPANY shall dismiss from the service any member of the
UNION who loses his membership in good standing either by
resignation therefrom or expulsion therefrom for any of the
following causes:
1. Disloyalty to the UNION;
2. Commission of acts inimical to the interest of the UNION;
3. Failure and refusal to pay UNION dues and other
assessments;
4. Conviction for any offense or crime; or
5. Organizing and/or joining another labor organization
claiming jurisdiction similar to that of the UNION.
Provided, however, that in case expulsion proceedings are
instituted against any member of the UNION, pending such
proceedings, the COMPANY, on the basis of a board
resolution of the UNION, shall suspend the member
concerned; and provided further, that the UNION, jointly and
severally with the officers and members of the board voting
for the dismissal or suspension, shall hold and render the
COMPANY, its executive, owners, and officers free from any
and all claims and liabilities. (Rollo, p. 64).
Petitioners herein were among the members of the respondent union who were
expelled by the latter for disloyalty in that they allegedly joined the NAFLU a
large federation. Because of the expulsion, petitioners were dismissed by
respondent Corporation. Petitioners sued for reinstatement and backwages
stating their dismissal was without due process. Losing both in the decisions of
the Labor Arbiter and the National Labor Relations Commission (NLRC), they
elevated their cause to the Supreme Court.
Respondent Polybag Workers Union as already stated expelled 125 members on
the ground of disloyalty and acts inimical to the interests of the Union (Resolution
No. 84, series of 1982, Rollo, p. 16) based on the findings and recommendations
of the panel of investigators. Both the Labor Arbiter and the NLRC found the
Collective Bargaining Agreement and the "Union Security Clause" valid and
considered the termination of the petitioners justified thereunder, for having
committed an act of disloyalty to the Polybag Workers Union by having affiliated
with and having joined the NAFLU, another labor union claiming jurisdiction
similar to the former, while still members of respondent union (Rollo, pp. 45-46).
Among the disputed portions of the NLRC decision is its finding that it has been
substantially proven that the petitioners committed acts of disloyalty to their union
as a consequence of the filing by NAFLU for and in their behalf of the complaint
in question (Rollo, p. 46).
Petitioners insist that their expulsion from the Union and consequent dismissal
from employment have no basis whether factual or legal, because they did not in
fact affiliate themselves with another Union, the NAFLU. On the contrary, they
claim that there is a connivance between respondents Company and Union in
their illegal dismissal in order to avoid the payment of separation pay by
respondent company.
Petitioners' contention that they did not authorize NAFLU to file NLRC-AB Case
No. 6-4275-82 for them is borne out by the records which show that they did not
sign the complaint, neither did they sign any document of membership
application with NAFLU (Rollo, p. 323). Significantly, none of private respondents
was able to present any evidence to the contrary except for one employee who
admitted having authorized NAFLU to file the complaint but only for the purpose
of questioning the funds of the Union (Rollo, p. 216).
Placed in proper perspective, the mere act of seeking help from the NAFLU
cannot constitute disloyalty as contemplated in the Collective Bargaining
Agreement. At most it was an act of self-preservation of workers who, driven to
desperation found shelter in the NAFLU who took the cudgels for them.
It will be recalled that 460 employees were temporarily laid off; some were laid-off
as early as March 22, 1982 although the actual official announcement and notice
of the intended shutdown was made only on May 27, 1982 (Rollo, p. 151). The
laid-off employees did not receive any separation pay because as alleged by
respondent company their dismissal was due to serious business reverses
suffered by it. The only aid offered by the company which was offered when the
disgruntled employees began to discuss among themselves their plight, was a
1/2 sack of rice monthly and P 50.00 weekly. Most of the employees did not avail
themselves of the aid as those who did were allegedly made to sign blank
papers. To aggravate matters, petitioners complained that their pleas for their
union officers to fight for their right to reinstatement, fell on deaf ears. Their union
leaders continued working and were not among those laid-off, which explains the
lack of positive action on the part of the latter to help or even sympathize with the
plight of the members. All they could offer was a statement "marunong pa kayo
sa may-ari ng kumpanya" ("you know more than the company owners") (Rollo, p.
80). Under the circumutances, petitioners cannot be blamed for seeking help
wherever it could be found.
In fact even assuming that petitioners did authorize NAFLU to file the action for
them, it would have been pointless because NAFLU cannot file an action for
members of another union. The proper remedy would be to drop the union as
party to the action and place the names of the employees instead (Lakas v.
Marcelo Enterprises, 118 SCRA 422 [1982]) as what appears to have been done
in this case before the Court.
Petitioners claim that the NLRC erred in ruling that the expulsion proceeding
conducted by the Union was in accordance with its by-laws. Respondent Union
had notified and summoned herein petitioners to appear and explain why they
should not be expelled from the union for having joined and affiliated with
NAFLU.
Petitioners contend that the requisites of due process were not complied with in
that, there was no impartial tribunal or union body vested with authority to
conduct the disciplinary proceeding under the union constitution and by-laws,
and, that complainants were not furnished notice of the charge against them, nor
timely notices of the hearings on the same (Rollo, p. 48).
According to the minutes of the special meeting of the Board of Directors of
respondent Union held on September 14, 1982, the Chairman of the Board of
Directors showed the members of the board, copies of the minutes of the
investigation proceedings of each individual member, together with a
consolidated list of Union members found guilty as charged and recommended
for expulsion as members of the respondent Union. The Board members
examined the minutes and the list (Rollo, p. 219).
It is to be noted, however, that only two (2) of the expelled petitioners appeared
before the investigation panel (Rollo, pp. 203, 235). Most of the petitioners
boycotted the investigation proceedings. They alleged that most of them did not
receive the notice of summons from respondent Union because they were in the
provinces. This fact was not disproved by private respondents who were able to
present only a sample copy of proof of service, Annex "14" (Rollo, p. 215).
Petitioners further claim that they had no Idea that they were charged with
disloyalty; those who came were not only threatened with persecution but also
made to write the answers to questions as dictated to them by the Union and
company representatives. These untoward incidents prompted petitioners to
request for a general investigation with all the petitioners present but their
request was ignored by the panel of investigators (Rollo, pp. 280, 307). Again,
these allegations were not denied by private respondents.
In any event, even if petitioners who were complainants in NLRC-AB Case No. 6-
4275-82 appeared in the supposed investigation proceedings to answer the
charge of disloyalty against them, it could not have altered the fact that the
proceedings were violative of the elementary rule of justice and fair play. The
Board of Directors of respondent union would have acted as prosecutor,
investigator and judge at the same time. The proceeding would have been a
farce under the circumstances (Lit Employees Association v. Court of Industrial
Relations, 116 SCRA 459 [1982] citing Kapisanan ng Mga Manggagawa sa MRR
v. Rafael Hernandez, 20 SCRA 109). The filing of the charge of disloyalty against
petitioners was instigated by the Chairman of the Board of Directors and Acting
Union President, Ponciano Fernandez, in the special meeting of the members of
the Board of Directors as convened by the Union President on August 16, 1982
(Rollo, p. 213). The Panel of Investigators created under the Board's Resolution REVERSED and SET ASIDE; and (2) respondent corporation is ordered: (1) to
No. 83, s. 1982 was composed of the Chairman of the Board, Ponciano reinstate petitioners to their former positions without reduction in rank, seniority
Fernandez, and two (2) members of the Board, Samson Yap and Carmen Garcia and salary; (b) to pay petitioners three-year backwages, without any reduction or
(Rollo, p. 214). It is the same Board that expelled its 125 members in its qualification, jointly and solidarily with respondent Union; and (c) to pay
Resolution No. 84, s. of 1982 (Rollo, p. 219). petitioners exemplary damages of P500.00 each. Where reinstatement is no
longer feasible, respondent corporation and respondent union are solidarily
All told, it is obvious, that in the absence of any full blown investigation of the ordered to pay, considering their length of service their corresponding separation
expelled members of the Union by an impartial body, there is no basis for pay and other benefits to which they are entitled under the law.
respondent Union's accusations.
SO ORDERED.
It is the policy of the state to assure the right of workers to "security of tenure"
(Article XIII, Sec. 3 of the New Constitution, Section 9, Article II of the 1973
Constitution). The guarantee is an act of social justice. When a person has no
property, his job may possibly be his only possession or means of livelihood.
Therefore, he should be protected against any arbitrary deprivation of his job.
Article 280 of the Labor Code has construed security of tenure as meaning that
"the employer shall not terminate the services of an employee except for a just
cause or when authorized by" the code (Bundoc v. People's Bank and Trust
Company, 103 SCRA 599 [1981]). Dismissal is not justified for being arbitrary
where the workers were denied due process (Reyes v. Philippine Duplicators,
Inc., 109 SCRA 489 [1981] and a clear denial of due process, or constitutional
right must be safeguarded against at all times, (De Leon v. National Labor
Relations Commission, 100 SCRA 691 [1980]). This is especially true in the case
at bar where there were 125 workers mostly heads or sole breadwinners of their
respective families.

Time and again, this Court has reminded employers that while the power to
dismiss is a normal prerogative of the employer, the same is not without
limitations. The employer is bound to exercise caution in terminating the services
of his employees especially so when it is made upon the request of a labor union
pursuant to the Collective Bargaining Agreement, as in the instant case.
Dismissals must not be arbitrary and capricious. Due process must be observed
in dismissing an employee because it affects not only his position but also his
means of livelihood. Employers should, therefore, respect and protect the rights
of their employees, which include the right to labor (Liberty Cotton Mills Workers
Union v. Liberty Cotton Mills, Inc., 90 SCRA 393 [1979], Resolution).

In the case at bar, the scandalous haste with which respondent corporation
dismissed 125 employees lends credence to the claim that there was connivance
between respondent corporation and respondent Union. It is evident that private
respondents were in bad faith in dismissing petitioners. They, the private
respondents, are guilty of unfair labor practice.

PREMISES CONSIDERED, (1) the decision of respondent National Labor

Relations Commission in NLRC-NCR-11-6881-82 dated April 26, 1984 is
G.R. No. L-43835 March 31, 1981
DOMINGO F. BONDOC, petitioner,
vs.
PEOPLE'S BANK AND TRUST COMPANY, BANK OF THE
PHILIPPINES ISLANDS (Surviving Bank) and JACOBO C.
CLAVE (as Presidential Executive Assitant), respondents.
AQUINO, J.:
This certiorari case involves the issue of whether respondent Presidential Executive
Assistant committed a grave abuse of discretion amounting to lack of jurisdiction in
confirming the abolition of petitioner's position as a department manager in a bank and
the payment to him of separation pay instead of reinstating him with backwages.
Domingo F. Bondoc, who used to be an assistant of Jaime C. Velasquez in the Ayala
Securities Corporation (p. 116, Rollo), joined the People's Bank and Trust Company
on October 1, 1966 upon the recommendation of Velasquez, a director, to Roman
Azanza, the bank president (p. 35, Rollo).
He replaced Ariston Estrada, Jr. (p. 37, Rollo). Bondoc was chosen by the bank' s
board of directors on February 21, 1967 as the first manager of the bank's department
of economic research and statistics which was organized in January, 1967 (Exh. 4 and
5).
That department had only four employees: a stenographer and three clerks who were
formerly employed in the comptroller's office, accounting department and office of the
corporate secretary (p. 117-118, Rollo).
Every year, from 1968 to 1973, Bondoc was elected to the position of department
manager and assistant vice-president by the bank's board of directors at its annual
organizational meeting (Exh. 1-B to 1-F).
On May 15, 1973, Bondoc reported in writing to Manuel Chuidian, a bank director,
certain anomalies committed by the officers of the bank. The Central Bank found that
some officers of the bank utilized its funds for their own interests. Because of those
anomalies, the Monetary Board suspended Benito R. Araneta, a director and vice-
president, and reprimanded the other officers involved, namely, Severino Coronation,
Nicanor O. Corpus, Guillermo D. Teodoro, Feldres G. San Pedro, Carlos Villaluz,
Godofredo Galindez, Fernando Macalanlay and Manuel P. Elepao (pp. 6-8, Rollo).
On September 19, 1973, the board of directors of the People' s Bank, in the course of
its deliberation on the bank' s projected merger with the Bank of the Philippine Islands,
resolved to abolish its department of economic research and statistics which, as
already noted, was headed by Bondoc (p. 35, Rollo).
The board regarded the said department as a redundant unit whose functions could
be performed by other departments. The Bank of P. I., like twenty-three other
commercial banks, has no such department (p. 117, Rollo). Bondoc's four
subordinates were absorbed by the accounting department.
Bondoc was advised of the abolition of his department in the later part of September,
1973. He asked the personnel manager to compute his separation pay. Bondoc was
told that his separation pay was equivalent to seventy-five percent of his salary for
every year of service. It amounted to P10,481.25. However, he was indebted to the
bank in the sum of P13, 493.33 under its car financing plan. (p. 118, Rollo).
Bondoc allegedly told the personnel manager that he would use his separation pay to
liquidate his debt and issue a check for P3,012.08 to cover the balance of his debt. He
requested the personnel manager to expedite the preparation of the bill of sale for the
Toyota car so that he could get the document on the following day. But he did not
show up that day. (p. 118, Rollo).
It is relevant to state that the merger of the two banks was effected in compliance with
the Central Bank's requirement that commercial banks should increase their capital
stock to a minimum of one hundred million pesos through mergers and consolidations
or other lawful means. The merger was approved by the Monetary Board and the
Securities and Exchange Commission. The merger agreement was signed in January,
1974. It was consummated on June 1, 1974.
On November 2, 1973, the People's Bank, pursuant to section 11 of Presidential
Decree No. 21 (creating the ad hoc National Labor Relations Commission), applied
with the Secretary of Labor for clearance to terminate Bondoc's services effective on
November 16 (p. 112, Rollo).
On that same day, November 2, the bank president, Vicente C. Aquino, formally
notified Bondoc of the termination of his services and of the application for clearance.
Bondoc received the notice on November 5 (p. 35, Rollo).
He lost no time in filing with the NLRC his opposition to the termination of his services.
He alleged in his opposition that he was dismissed without cause (p. 114, Rollo).
As all efforts for the amicable settlement of the case were fruitless, it was submitted
for compulsory arbitration.
During the hearing, Bondoc tried to prove that the abolition of his position was a
reprisal for his aforementioned exposure of some anomalies in the bank which
resulted in the suspension or reprimand by the Monetary Board of certain senior
officers of the bank headed by Benito R. Araneta, a nephew of J. Antonio Araneta, the
chairman of the board (p. 48, Rollo).
After hearing, the NLRC arbitrator recommended to the Secretary of Labor the denial
of the application to terminate Bondoc' s employment and ordered the People's Bank
to reinstate him with backwages from November 16, 1973 and with allowances and
other benefits guaranteed by law and without loss of status and seniority rights (pp.
42-43, Rollo).
On appeal, the NLRC (Commissioners Castro, Borromeo and Seno) in its decision of
January 21, 1975 reversed the decision of the arbitrator, approved the clearance for
Bondoc' s dismissal and ordered the People's Bank to pay him seventy-five percent
(75%) of his monthly salary for every year of service in lieu of the one-half month
salary for every year of service fixed in the Termination Pay Law, Republic Act No.
1052, as amended by Republic Act No. 1787 (p. 45, Rollo).
The NLRC adduced as reasons to justify the abolition of Bondoc's position (1) the fact
that his position as manager being confidential in character, the bank had the
prerogative to terminate his employment anytime; (2) Bondoc's department was no
longer necessary to the efficient operation of the bank in view of the merger; (3) the
management is not precluded from undertaking a reorganization or making changes to
meet the demands of the present and (4) in case of mergers, departments or positions
may be abolished or new ones created, as the necessity for them requires (p. 44-45,
Rollo).
Bondoc appealed to the Secretary of Labor. That high official in his resolution of
September 29, 1975 reversed the NLRC' s decision on the grounds that the motivation
for the termination of Bondoc's services was not taken into account by the NLRC and
that the People' s Bank should not have abolished Bondoc's department without prior
clearance. He denied the application for clearance to dismiss Bondoc. (p. 50, Rollo).
He ordered the People' s Bank to reinstate Bondoc to his former position or to any
substantially equivalent position with backwages equivalent to his salary for six
months, it being understood that the Bank of the P. I. has assumed all the liabilities
and obligations of the People's Bank. The Secretary denied the application for
clearance to dismiss Bondoc, (pp. 48-50, Rollo).
From that resolution, the Bank of the P. I., as successor of the People' s Bank,
appealed to the President of the Philippines.
One of the grounds relied upon in that appeal was that Bondoc was convicted of
bigamy, a crime involving moral turpitude (Criminal Case No. 7185, Manila CFI, Exh.
1). The Bank of the P. I. cited Central Bank Circular No. 356, which disqualifies a
person convicted of a crime involving moral turpitude from becoming an officer of a
bank (pp. 213-4, Rollo).
In a decision dated May 17, 1976, Presidential Executive Assistant Jacobo C. Clave
set aside the decisions of the arbitrator and the Secretary and confirmed in toto the
NLRC' s decision (p. 54, Rollo).
The Office of the President held that under the Termination Pay Law an employment
without a definite period may be terminated with or without cause, that the abolition of
Bondoc' s position was a necessary incident of the merger of the two banks and that
his services were no longer indispensable to them. Hence, the clearance for his
removal was authorized. (pp. 52-54, Rollo).
The review of the Presidential decision was sought by Bondoc in the petition which he
filed in this Court on May 27, 1976. This is the fifthdecision to be rendered in his case.
We hold that under the peculiar or particular facts of this case the termination of
Bondoc's employment was lawful and justified and that no grave abuse of discretion
amounting to lack of jurisdiction was committed by the Presidential Executive
Assistant in affirming the NLRC' s decision sustaining the termination of his
employment.
Bondoc was not employed for a fixed period. He held his position of department
manager at the pleasure of the bank' s board of directors. He occupied a managerial
position and his stay therein depended on his retention of the trust and confidence of
the management and whether there was any need for his services.
Although some vindictive motivation might have impelled the abolition of his position,
yet, it is undeniable that the bank's board of directors possessed the power to remove
him and to determine whether the interest of the bank justified the existence of his
department.
Under the old Termination Pay Law, it was held that in the absence of a contract of
employment for a specific period the employer has the right to dismiss his employees
at anytime with or without just cause (De Dios vs. Bristol Laboratories (Phils.), Inc., L-
25530, January 29, 1974, 55 SCRA 349, 358; Jaguar Transportation Co., Inc. vs.
Cornista, L-32959, May 11, 1978, 83 SCRA 77).
It may be noted that under Policy Instructions No. 8 of the Secretary of Labor "the
employer is not required to obtain a previous written clearance to terminate
managerial employees in order to enable him to manage effectively". (See Associated
Citizens Bank vs. Ople, L-4896, February 24, 1981.)
The petitioner invokes the policy of the State to assure the right of "workers" to
security of tenure (Sec. 9, Art. II, Constitution).
That guarantee is an act of social justice. When a person has no property, his job may
possibly be his only possession or means of livelihood. Therefore, he should be
protected against any arbitrary and unjust deprivation of his job.
Article 280 of the Labor Code has construed security of tenure as referring to regular
employment and as meaning that "the employer shallnot terminate the services of an
employee except for a just cause or when authorized by" the Code.
As already noted above, the facts of this case do not warrant the conclusion that
Bondoc's right to security of tenure was oppressively abridged. He knew all along that
his tenure as a department manager rested in the discretion of the bank's board of
directors and that at anytime his services might be dispensed with or his position
might be abolished.
On equitable considerations, we hold that Bondoc should be paid as separation pay
his salary and allowances, if any, for seven months.
WHEREFORE, the decision of respondent Presidential Executive Assistant is affirmed
with the modification that the Bank of the P. I. should pay to the petitioner separation
pay equivalent to his salary and allowances (if any) for seven months. No costs.
G.R. No. L-5621 March 25, 1953
PHILIPPINE MOVIE PICTURES WORKERS' ASSOCIATION, petitioner,
vs.
PREMIERE PRODUCTIONS, INC., respondent.
Cipriano Cid for petitioner.
Salvador C. Bayani for respondent.
BAUTISTA ANGELO, J.:
This is a petition for review of two orders of the Court of Industrial Relations, one
dated November 8, 1951, and the other November 24, 1951, which give authority to
respondent to lay-off forty-four (44) of its employees in accordance with its urgent
petition on condition that, in the event work is available in the future where their ability
may be required, the same workers should be reemployed and that, if after the
termination of the case, the court would find that at the time of their lay off work was
available, the respondent shall pay to them the back wages to which they are entitled.
These two holders were upheld by the court en banc in a resolution dated March 10,
1952, which is also involved in the present petition for review.
On October 2, 1951, respondent filed with the Court of Industrial Relations an urgent
petition seeking authority to lay-off 44 men working in three of its departments, the first
batch to be laid off thirty (30) days after the filing of the petition and the rest 45 days
thereafter, in order that in the intervening period it may finish the filming of its pending
picture. The ground for the lay-off is the financial losses which respondent was
allegedly suffering during the current year.
Petitioner opposed the request alleging that the claim of financial losses has no basis
in fact it being only an act of retaliation on the part of respondent for the strike staged
by the workers days before in an attempt to harass and intimidate them and weaken
and destroy the union to which they belong.
On November 5, 1951, date when the urgent petition was set for hearing, at the
request of counsel for respondent, Hon. Arsenio C. Roldan, presiding judge of the
Court of Industrial Relations, held an ocular inspection of the studios and filming
premises of respondent in the course of which he interrogated about fifteen laborers
who were then present in the place. On the strength of the evidence adduced during
the ocular inspection Judge Roldan issued an order on November 8, 1951, allowing
respondent to lay-off the workers mentioned in its petition with respect to Unit No. 2
and those assigned to the Ground Maintenance Department subject to the condition
that, in the event that work is available in the future, they should be re-employed. With
respect to the workers assigned to Unit No. 1, the hearing was postponed.
A subsequent hearing was held in connection with the workers assigned to Unit. 1 and
on the strength of the evidence submitted by respondent, Judge Roldan again found
the petition justifiable and authorized their lay-off in an order dated November 24,
1951, under the same condition as those contained in his previous order.
Petitioner moved for the reconsideration of both orders dated November 8 and
November 24, 1951, which motion the court en banc denied in a resolution issued on
March 10, 1952. Hence this petition for review.
The only issue submitted to this court for reconsideration is: May the Court of
Industrial Relations authorize the lay off of workers on the basis of an ocular
inspection without receiving full evidence to determine the cause or motive of such
lay-off?
It appears that when the case was called for hearing to look in the merits of the urgent
petition of respondent seeking to lay-off 44 men who were working in three of its
departments on the ground of lack of work and because its business was suffering
financial losses during the current year the court, which was then represented by its
presiding Judge, decided to make an ocular inspection of the studios and filming
premises of respondent following a request made to that effect by its counsel, and in
the course of said inspection Judge Roldan proceeded to interrogate the workers he
found in the place in the presence of the counsel of both parties. The testimony of
those interrogated was taken down and the counsel of both parties were allowed to
cross-examine them. Judge Roldan also proceeded to examine some of the records of
respondent company among them the time cards of some workers which showed that
while the workers reported for work, when their presence was checked they were
found to be no longer in the premises. And on the strength of the findings made by
judge Roldan in this ocular inspection he reached the conclusion that the petition for
lay-off was justified because there was no more work for the laborers to do in
connection with the different jobs given to them. It is now contended that such a
procedure is unfair to the labor union in that it deprived the workers affected of the
opportunity to disprove what apparently was represented to the court during the ocular
inspection which at best may only be the result of prearrangement devised by the
company to justify its claim of lack of work and that what the court should have done
was to make a full-dress investigation if not a formal hearing giving both parties all the
time and opportunity to present their evidence before deciding such an important
matter which affects the position and the only means of livelihood of the workers
affected by the petition. In other words, the petitioning labor union workers were
deprived of their employment without due process of law.
The claim of petitioner that the laborers were not given an opportunity to present their
evidence to disprove the claim of lack of work is disputed by counsel for respondent
company who claims that the labor union had its day in court because its counsel was
present in the investigation or ocular inspection and even presented some witnesses
to protect its interest. The record before the court on this matter is not clear and for
such reason it has no way of determining the truth of both claims. The stenographic
notes taken during the ocular inspection have not been elevated for the reason
undoubtedly that this is a petition for review and the only issue before the court is one
of law. In the face of this confusing situations on an issue which is determinative of the
controversy, the only guide that the court finds is the order of the court of origin which
happily contains a reference to the evidence that it has considered and which has
served as basis for its conclusion resulting in lay-off of the workers in whose behalf the
present petition was brought before this court. We refer to the order of November 8,
1951, subject of the petition for review, wherein Judge Roldan makes express mention
of the evidence can only refer to testimony given by the workers interrogated by him
and to whatever documents he found or examined in the course of such inspection. It
is true, as counsel for respondent avers, that hearing were conducted by the court a
quo on October 8, and 15, 1951, and on November 5, 6, 15, and 21, 1951, but it is
likewise true that those hearings do not necessarily refer to the petition under
consideration but to other matters and incidents which were then before the court for
determination such as the petition of the labor union containing fourteen (14) demands
and the petition of the same union to declare respondent in contempt for having
violated certain directives of the court. At any rate, this matter does not appear clear
and we are inclined to resolve the doubt in favor of labor considering the spirit of our
Constitution.
The right to labor is a constitutional as well as statutory right. Every man has a natural
right to the fruits of his own industry. A man who has been employed to undertake
certain labor and has put into it his time and effort is entitled to be protected. The right
of a person to his labor is deemed to be property within the meaning of constitutional
guarantees. That is his means of livelihood. He cannot be deprived of his labor or
work without due process of law (11 Am. Jur., 333, pp. 1151-1153; 11 Am. Jur.,
section 344. pp. 1168-1171).
Although the Court of Industrial Relations, in the determination of any question or
controversy, may adopt its own rules of procedure and may act according to justice
and equity without regard to technicalities, and for that matter is not bound by any
technical rules of evidence (section 20, Commonwealth Act No. 103), this broad grant
of power should not be interpreted to mean that it can ignore or disregard the
fundamental requirements of due process in the trials and investigation of cases
brought before it for determination. As aptly pointed out by this court, there are certain
cardinal primary rights which the Court of Industrial Relations must respect in the trial
of every labor case. One of them is the right to a hearing which includes the right of
the party interested to present his own case and submit evidence in support thereof
(Manila Trading and Supply Co. vs. Philippine Labor Union, 71 Phil., 124, 129). An
ocular inspection of the establishment or premise involved is proper if the court finds it
necessary, but such is authorized only to help the court in clearing a doubt, reaching a
conclusion, or finding the truth. But it is not the main trial nor should it exclude the
presentation of other evidence which the parties may deem necessary to establish th
eir case. It is merely an auxiliary remedy the law affords the parties or the court to
reach an enlightened determination of the case.
Considering the merits of the controversy before us, we are of the opinion that the
required due process has not been followed. The court a quo merely acted on the
strength of the ocular inspection it conducted in the premises of the respondent
company. The petition for lay-off was predicated on the lack of work and of the further
fact that the company was incurring financial losses. These allegations cannot be
established by a mere inspection of the place of labor specially when such inspection
was conducted at the request of the interested party. As counsel for petitioner says,
such inspection could at best witness "the superficial fact of cessation of work but it
could not be determinative of the larger and more fundamental issue of lack of work
due to lack of funds". This fundamental issue cannot be determined without looking
into the financial situation of the respondent company. In fact, this matter is now being
looked into by the court a quo in connection with the fourteen demands of the labor
union, but before finishing its inquiry it decided to grant the lay-off pending final
determination of the main case. This action is in our opinion premature and has
worked injustice to the laborers.
WHEREFORE, the orders subject of the present petition for review are hereby set
aside, and it is ordered that the cause be remanded to the court of origin for further
proceedings giving to petitioner an opportunity to present its evidence in support of its
opposition to the urgent petition for lay-off of respondent company. No pronouncement
as to costs.
 MASING AND SONS DEVELOPMENT CORPORATION G.R. No. 161787
and
CRISPIN CHAN, Present:
Petitioners, On May 19, 1997, respondent Gregorio P. Rogelio (Rogelio) brought against Chan a
CORONA,C.J., Chairperson,
LEONARDO-DE CASTRO, complaint for retirement pay pursuant to Republic Act No. 7641,[2] in relation to Article
BERSAMIN,
287 of the Labor Code, holiday and rest days premium pay, service incentive leave,
- versus - DEL CASTILLO, and
VILLARAMA, JR., JJ.
13th month pay, cost of living allowances (COLA), underpayment of wages, and
Promulgated:
attorneys fees. On January 20, 1998, Rogelio amended his complaint to include MSDC
GREGORIO P. ROGELIO,
Respondent. April 27, 2011 as a co-respondent. His version follows.
x-----------------------------------------------------------------------------------------x

DECISION
Rogelio was first employed in 1949 by Pan Phil. Copra Dealer, MSDCs predecessor,
BERSAMIN, J.:
which engaged in the buying and selling of copra in Ibajay, Aklan, with its main office

being in Kalibo, Aklan. Masing Chan owned and managed Pan Phil. Copra Dealer, and
In any controversy between a laborer and his master, doubts reasonably arising from
the Branch Manager in Ibajay was a certain So Na. In 1965, Masing Chan changed the
the evidence are resolved in favor of the laborer.
business name of Pan Phil. Copra Dealer to Yao Mun Tek, and appointed Jose

Conanan Yap Branch Manager in Ibajay. In the 1970s, the business name of Yao Mun
We re-affirm this principle, as we uphold the decision of the Court of Appeals
Tek was changed to Aklan Lumber and General Merchandise, and Leon Chan became
(CA) that reversed the uniform finding that there existed no employment relationship
the Branch Manager in Ibajay. Finally, in 1984, Masing Chan adopted the business
between the petitioners, as employers, and the respondent, as employee, made by the
name of Masing and Sons Development Corporation (MSDC), appointing Wynne or
National Labor Relations Commission (NLRC) and the Labor Arbiter (LA).
Wayne Lim (Lim) as the Branch Manager in Ibajay. Crispin Chan replaced his father,

Masing Chan, in 1990 as the manager of the entire business.

Petitioners Masing and Sons Development Corporation (MSDC) and Crispin

Chan assail the October 24, 2003 decision,[1] whereby the CA reversed the decision
In all that time, Rogelio worked as a laborer in the Ibajay Branch, along with twelve other
dated January 28, 2000 of the NLRC that affirmed the decision of the LA (dismissing
employees. In January 1974, Rogelio was reported for Social Security System (SSS)
the claim of the respondent for retirement benefits on the ground that he had not been
coverage. After paying contributions to the SSS for more than 10 years, he became
employed by the petitioners but by another employer).
entitled to receive retirement benefits from the SSS. Thus, in 1991, he availed himself

of the SSS retirement benefits, and in order to facilitate the grant of such benefits, he
Antecedents
entered into an internal arrangement with Chan and MSDC to the effect that MSDC
would issue a certification of his separation from employment notwithstanding that he

would continue working as a laborer in the Ibajay Branch. In substantiation, Rogelio submitted the January 19, 1998 affidavits of his co-workers,

namely: Domingo Guevarra,[4] Juanito Palomata,[5] and Ambrosio Seeres,[6] whereby

The certification reads as follows:[3] they each declared under oath that Rogelio had already been working at the Ibajay

Branch by the time that MSDCs predecessor had hired them in the 1950s to work in
CRISPIN AMIGO CHAN COPRA DEALER
IBAJAY, AKLAN that branch; and that MSDC and Chan had continuously employed them until their own

August 10, 1991 retirements, that is, Guevarra in 1994, and Palomata and Seeres in 1997. They thereby

CERTIFICATION OF SEPARATION FROM EMPLOYMENT corroborated the history of MSDC and the names of the various Branch Managers as

To whom it may concern: narrated by Rogelio, and confirmed that like Rogelio, they did not receive any retirement

This is to certify that my employee, GREGORIO P. ROGELIO benefits from Chan and MSDC upon their retirement.
bearing SSS ID No. 07-0495213-7 who was first covered effective
January, 1974 up to June 30, 1989 inclusive, is now officially
separated from my employ effective the 1st of July, 1989.
In their defense, MSDC and Chan denied having engaged in copra buying in Ibajay,
Please be guided accordingly.
insisting that they did not ever register in such business in any government
(SGD.) CRISPIN AMIGO CHAN
Proprietor agency. They asserted that Lim had not been their agent or employee, because he had

SSS ID No. 07-0595800-4 been an independent copra buyer. They averred, however, that Rogelio was their former

employee, hired on January 3, 1977 and retired on June 30, 1989;[7] and that Rogelio

On March 17, 1997, Rogelio was paid his last salary. Lim, then the Ibajay Branch was thereafter employed by Lim starting from July 1, 1989 until the filing of the

Manager, informed Rogelio that he was deemed retired as of that date. Chan confirmed complaint.

to Rogelio that he had already reached the compulsory retirement age when he went to

the main office in Kalibo to verify his status. Rogelio was then 67 years old. MSDC and Chan submitted the affidavit of Lim, whereby Lim stated that Rogelio was

one of his employees from 1989 until the termination of his services. [8] They also

Considering that Rogelio was supposedly receiving a daily salary of P70.00 submitted SSS Form R-1A, Lims SSS Report of Employee-Members (showing that

until 1997, but did not receive any 13th month pay, service incentive leave, premium pay Rogelio and Palomata were reported as Lims employees);[9] Lims application for

for holidays and rest days and COLA, and even any retirement benefit from MSDC upon registration as copra buyer;[10] Chans affidavit;[11] and the affidavit of Guevarra[12] and

his retirement in March 1997, he commenced his claim for such pay and benefits. Seeres,[13] whereby said affiants denied having executed or signed the January 19,

1998 affidavits submitted by Rogelio.


In his affidavit, Guevarra recanted the statement attributed to him that he had
been employed by Chan and MSDC, and declared that he had been an employee of
[14]
Lim. Likewise, Guevarras daughter executed an affidavit, averring that his father had
been an employee of Lim and that his father had not signed the affidavit dated January
19, 1998.
On April 5, 1999, the LA dismissed the complaint against Chan and MSDC, ruling thus:
From said evidence, it is our considered view that there
exists no employer-employee relationship between the parties
effective July 1, 1989 up to the date of the filing of the instant
complaint complainant was an employee of Wynne O. Lim. Hence,
his claim for retirement should have been filed against the latter for
he admitted that he was the employer of herein complainant in his
sworn statement dated June 9, 1998.
Complainants claim for retirement benefits against herein
respondents under RA No. 7641 has been barred by prescription
considering the fact that it partakes of the nature of a money claim
which prescribed after the lapse of three years after its accrual.
The rest of the claims are also dismissed for the same
accrued during complainants employment with Wynne O. Lim.
WHEREFORE, PREMISES CONSIDERED, this case is
hereby DISMISSED for lack of merit.
SO ORDERED.[15]
Rogelio appealed, but the NLRC affirmed the decision of the LA on January 28,
2000, observing that there could be no double retirement in the private sector; that with
the double retirement, Rogelio would be thereby enriching himself at the expense of the
Government; and that having retired in 1991, Rogelio could not avail himself of the
benefits under Republic Act No. 7641 entitled An Act Amending Article 287 of
Presidential Decree No. 442, As Amended, Otherwise Known as The Labor Code Of
The Philippines, By Providing for Retirement Pay to Qualified Private Sector Employees
in the Absence Of Any Retirement Plan in the Establishment, which took effect only on
January 7, 1993.[16]
The NLRC denied Rogelios motion for reconsideration.
Ruling of the CA
Rogelio commenced a special civil action for certiorari in the CA, charging the NLRC
with grave abuse of discretion in denying to him the benefits under Republic Act No.
7641, and in rejecting his money claims on the ground of prescription.
On October 24, 2003, the CA promulgated its decision,[17] holding that Rogelio had
substantially established that he had been an employee of Chan and MSDC, and that
the benefits under Republic Act No. 7641 were apart from the retirement benefits that a
qualified employee could claim under the Social Security Law, conformably with the
ruling in Oro Enterprises, Inc. v. NLRC (G.R. No. 110861, November 14, 1994, 238
SCRA 105).
The CA decreed:
WHEREFORE, premises considered, the Decision of the
public respondent NLRC is hereby VACATED and SET ASIDE.
This case is remanded to the Labor Arbiter for the proper
computation of the retirement benefits of the petitioner based on
Article 287 of the Labor Code, as amended, to be pegged at the
minimum wage prevailing in Ibajay, Aklan as of March 17, 1997,
and attorneys fees based on the same. Without costs.
 therefore, that his filing was timely considering that the CA received his petition
SO ORDERED.
for certiorari at 2:44 oclock in the afternoon of March 17, 2003.

Chan and MSDCs motion for reconsideration was denied by the CA.
The petitioners insistence, that the issuance of the entry of judgment with

respect to the NLRCs decision precluded Rogelio from filing a petition for certiorari, was
Issues
unwarranted. It ought to be without debate that the finality of the NLRCs decision was

of no consequence in the consideration of whether or not he could bring a special civil

In this appeal, Chan and MSDC contend that the CA erred: (a) in taking
action for certiorari within the period of 60 days for doing so under Section 4, Rule
cognizance of Rogelios petition for certiorari despite the decision of the NLRC having
65, Rules of Court, simply because the question being thereby raised was jurisdictional.
become final and executory almost two months before the petition was filed; (b) in

concluding that Rogelio had remained their employee from July 6, 1989 up to March 17, II
Respondent remained the petitioners
1997; and (c) in awarding retirement benefits and attorneys fees to Rogelio. employee despite his supposed separation

Ruling Did Rogelio remain the employee of the petitioners from July 6, 1989 up to

March 17, 1997?

The petition for review is barren of merit.

The issue of whether or not an employer-employee relationship existed

I
Certiorari was timely commenced in the CA between the petitioners and the respondent in that period was essentially a question of

fact.[18] In dealing with such question, substantial evidence that amount of relevant

Anent the first error, the Court finds that the CA did not err in taking evidence which a reasonable mind might accept as adequate to justify a conclusion[19] is

cognizance of the petition for certiorari of Rogelio. sufficient. Although no particular form of evidence is required to prove the existence of

the relationship, and any competent and relevant evidence to prove the relationship may

Based on the records, Rogelio received the NLRCs denial of his motion for be admitted,[20] a finding that the relationship exists must nonetheless rest on substantial

reconsideration on January 16, 2003. He then had 60 days from January 16, 2003, or evidence.

until March 17, 2003, within which to file his petition for certiorari. It is without doubt,

Generally, the Court does not review errors that raise factual questions,
primarily because the Court is not a trier of facts. However, where, like now, there is a
conflict between the factual findings of the Labor Arbiter and the NLRC, on the one
hand, and those of the CA, on the other hand,[21] it is proper, in the exercise of our equity
jurisdiction, to review and re-evaluate the factual issues and to look into the records of
the case and re-examine the questioned findings.
The CA delved on and resolved the issue of the existence of an employer-
employee relationship between the petitioners and the respondent thusly:
As to the factual issue, the petitioners evidence consists of his own
statements and those of his alleged co-worker from 1950 until
1997, Juanito Palomata, who unlike his former co-workers
Domingo Guevarra and Ambrosio Seeres, did not disown the
Sinumpaang Salaysay he executed, in corroboration of petitioners
allegations; and the Certification dated August 10, 1991 stating that
petitioner was first placed under coverage of the SSS in January
1974 to June 30, 1989 and was separated from service effective
July 1, 1989, a certification executed by respondent Crispin Amigo
Chan which, petitioner maintains, was only intended for his
application for retirement benefits with the SSS.
Private respondents evidence, on the other hand, consisted of
respondent Crispin Amigo Chans counter statements as well as
documentary evidence consisting of (1) Wayne Lims Affidavit
which petitioner acknowledged in his Reply dated July 11, 1998,
par. 8, admitting to being the employer of petitioner from July 1,
1989 until the filing of the complaint; (2) Certification dated October
22, 1991 showing petitioners employment with respondents to
have been between January 3, 1977 until July 1, 1989; (3)
Affidavits of Guevarra and Seeres disowning their signatures in the
affidavits submitted in evidence by the petitioner; (4) SSS report
executed by Wayne Lim of his initial list of employees as of July 1,
1989 which includes the petitioner. On appeal, the respondents
further submitted documentary evidence showing that Wayne Lim
registered his business name on July 11, 1989 and apparently
went into business buying copra.
At this point, we should note the following factual
discrepancies in the evidence on hand: First, the respondents
issued certificates stating the commencement of petitioners
employment on different dates, i.e. January 1974 and January
1977, although the earlier date referred only to the period when
petitioner was first placed under the coverage of the SSS,
which need not necessarily refer to the commencement of his
employment. Secondly, while respondent Crispin Amigo Chan
denied having ever engaged in copra buying in Ibajay, the
certificates he issued both dated in 1991 state otherwise, for
he declared himself as a copra dealer with address in Ibajay.
Then there is the statement of the petitioner that Wayne Lim
was the respondents manager in their branch office in Ibajay
since 1984, a statement that respondents failed to
disavow. Instead, respondents insisted on their non
sequitur argument that they had never engaged in copra
buying activities in Ibajay, and that Wayne Lim was in
business all by himself in regard to such activity.
The denial on respondents part of their copra buying activities in
Ibajay begs the obvious question: What were petitioner and his
witness Juanito Palomata then doing for respondents as laborers in
Ibajay prior to July 1, 1989? Indeed, what did petitioner do for the
respondents as the latters laborer prior to July 1, 1989, which
was different from what he did after said date? The records
showed that he continued doing the same job, i.e. as laborer and
trusted employee tasked with the responsibility of getting money
from the Kalibo office of respondents which was used to buy copra
and pay the employees salaries. He did not only continue doing the
same thing but he apparently did the same at or from the same
place, i.e. the bodega in Ibajay, which his co-worker Palomata
believed to belong to the respondent Masing & Sons. Since
respondents admitted to employing petitioner from 1977 to 1989,
we have to conclude that, indeed, the bodega in Ibajay was owned
by respondents at least prior to July 1, 1989 since petitioner had
consistently stated that he worked for the respondents continuously
in their branch office in Ibajay under different managers
and nowhere else.
We believe that the respondents strongest evidence in regard
to the alleged separation of petitioner from service effective
July 1, 1989 would be the affidavit of Wayne Lim, owning to
being the employer of petitioner since July 1, 1989 and the
SSS report that he executed listing petitioner as one of his
employees since said date. But in light of the
incontrovertible physical reality that petitioner and his co-
workers did go to work day in and day out for such a long
period of time, doing the same thing and in the same place,
without apparent discontinuity, except on paper, these
documents cannot be taken at their face value. We note that
Wayne Lim apparently inherited, at least on paper, ten (10)
employees of respondent Crispin Amigo Chan, including
petitioner, all on the same day, i.e. on July 1, 1989. We note,
too, that while there exists an initial report of employees to the
 SSS by Wayne Lim, no other document apart from his affidavit
and business registration was offered by respondents to
bolster their contention, irrespective of the fact that Wayne
Lim was not a party respondent. What were the circumstances
underlying such alleged mass transfer of
employment? Unfortunately, the evidence for the respondents
does not provide us with ready answers. We could conclude
that respondents sold their business in Ibajay and assets to
Wayne Lim on July 1, 1989; however, as pointed out above,
respondent Crispin Amigo Chan himself said that he was a
copra dealer from Ibajay in August and October of 1991.
Whether or not he was registered as a copra buyer is
immaterial, given that he declared himself a copra dealer and
had apparently engaged in the activity of buying copra, as
shown precisely by the employment of petitioner and
Palomata. If Wayne Lim, from being the respondents manager
in Ibajay became an independent businessman and took over
the respondents business in Ibajay along with all their
employees, why did not the respondents simply state that fact
for the record? More importantly, why did the petitioner and
Palomata continue believing that Wayne Lim was only the
respondents manager? Given the long employment of
petitioner with the respondents, was it possible for him and
his witness to make such mistake? We do not think so. In case
of doubt, the doubt is resolved in favor of labor, in favor of the
safety and decent living for the laborer as mandated by Article
1702 of the Civil Code. The reality of the petitioners toil speaks
louder than words. xxx[22]
We agree with the CAs factual findings, because they were based on the
evidence and records of the case submitted before the LA. The CA essentially complied
with the guidepost that the substantiality of evidence depends on both its quantitative
and its qualitative aspects.[23] Indeed, the records substantially established that Chan
and MSDC had employed Rogelio until 1997. In contrast, Chan and MSDC failed to
adduce credible substantiation of their averment that Rogelio had been Lims employee
from July 1989 until 1997. Credible proof that could outweigh the showing by Rogelio to
the contrary was demanded of Chan and MSDC to establish the veracity of their
allegation, for their mere allegation of Rogelios employment under Lim did not constitute
[24]
evidence, but they did not submit such proof, sadly failing to discharge their burden of
proving their own affirmative allegation.[25] In this regard, as we pointed out at the start,
the doubts reasonably arising from the evidence are resolved in favor of the laborer in
any controversy between a laborer and his master.
III
Respondent entitled to retirement benefits
from the petitioners
Article 287 of the Labor Code, as amended by Republic Act No. 7641,
provides:
Article 287. Retirement. Any employee may be retired upon
reaching the retirement age established in the collective bargaining
agreement or other applicable employment contract.
In case of retirement, the employee shall be entitled to
receive such retirement benefits as he may have earned under
existing laws and any collective bargaining agreement and other
agreements; Provided, however, That an employees retirement
benefits under any collective bargaining and other agreements
shall not be less than those provided herein.
In the absence of a retirement plan or agreement
providing for retirement benefits of employees in the
establishment, an employee upon reaching the age of sixty
(60) years or more, but not beyond sixty-five (65) years which
is hereby declared the compulsory retirement age, who has
served at least five (5) years in the said establishment, may
retire and shall be entitled to retirement pay equivalent to at
least one-half (1/2) month salary for every year of service, a
fraction of at least six (6) months being considered as one
whole year.
Unless the parties provide for broader inclusions, the
term one-half (1/2) month salary shall mean fifteen (15) days
plus one-twelfth (1/12) of the 13th month pay and the cash
equivalent of not more than five (5) days of service incentive
leaves.
Retail, service and agricultural establishments or
operations employing not more than ten (10) employees or workers
are exempted from the coverage of this provision.
 Violation of this provision is hereby declared unlawful and
subject to the penal provisions provided under Article 288 of this WHEREFORE, the Court denies the petition for review on certiorari, and
Code.
affirms the decision promulgated on October 24, 2003 in CA-G.R. SP No.75983.

Was Rogelio entitled to the retirement benefits under Article 287 of the Labor
Costs of suit to be paid by the petitioners.
Code, as amended by Republic Act No. 7641?

SO ORDERED.
The CA held so in its decision, to wit:

Having reached the conclusion that petitioner was an employee of

the respondents from 1950 to March 17, 1997, and considering his
uncontroverted allegation that in the Ibajay branch office where he
was assigned, respondents employed no less than 12 workers at
said later date, thus affording private respondents no relief from the
duty of providing retirement benefits to their employees, we see no
reason why petitioner should not be entitled to the retirement
benefits as provided for under Article 287 of the Labor Code, as
amended. The beneficent provisions of said law, as applied in Oro
Enterprises Inc. v. NLRC, is apart from the retirement benefits that
can be claimed by a qualified employee under the social security
law. Attorneys fees are also granted to the petitioner. But the
monetary benefits claimed by petitioner cannot be granted on the
basis of the evidence at hand.[26]

We concur with the CAs holding. The third paragraph of the aforequoted

provision of the Labor Code entitled Rogelio to retirement benefits as a necessary

consequence of the finding that Rogelio was an employee of MSDC and Chan. Indeed,

there should be little, if any, doubt that the benefits under Republic Act No. 7641, which

was enacted as a labor protection measure and as a curative statute to respond, in part

at least, to the financial well-being of workers during their twilight years soon following

their life of labor, can be extended not only from the date of its enactment but

retroactively to the time the employment contracts started.[27]

G.R. No. 144664 March 15, 2004
ASIAN TRANSMISSION CORPORATION, petitioner,
vs.
The Hon. COURT OF APPEALS, Thirteenth Division, HON. FROILAN M.
BACUNGAN as Voluntary Arbitrator, KISHIN A. LALWANI, Union, Union
representative to the Panel Arbitrators; BISIG NG ASIAN TRANSMISSION
LABOR UNION (BATLU); HON. BIENVENIDO T. LAGUESMA in his capacity as
Secretary of Labor and Employment; and DIRECTOR CHITA G. CILINDRO in her
capacity as Director of Bureau of Working Conditions, respondents.
DECISION
CARPIO-MORALES, J.:
Petitioner, Asian Transmission Corporation, seeks via petition for certiorari under Rule
65 of the 1995 Rules of Civil Procedure the nullification of the March 28, 2000
Decision1 of the Court of Appeals denying its petition to annul 1) the March 11, 1993
"Explanatory Bulletin"2 of the Department of Labor and Employment (DOLE) entitled
"Workers Entitlement to Holiday Pay on April 9, 1993, Araw ng Kagitingan and Good
Friday", which bulletin the DOLE reproduced on January 23, 1998, 2) the July 31,
1998 Decision3 of the Panel of Voluntary Arbitrators ruling that the said explanatory
bulletin applied as well to April 9, 1998, and 3) the September 18, 19984 Resolution of
the Panel of Voluntary Arbitration denying its Motion for Reconsideration.
The following facts, as found by the Court of Appeals, are undisputed:
The Department of Labor and Employment (DOLE), through Undersecretary
Cresenciano B. Trajano, issued an Explanatory Bulletin dated March 11, 1993 wherein
it clarified, inter alia, that employees are entitled to 200% of their basic wage on April
9, 1993, whether unworked, which[,] apart from being Good Friday [and, therefore, a
legal holiday], is also Araw ng Kagitingan [which is also a legal holiday]. The
bulletin reads:
Despite the explanatory bulletin, petitioner [Asian Transmission Corporation] opted to
pay its daily paid employees only 100% of their basic pay on April 9, 1998.
Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested.
In accordance with Step 6 of the grievance procedure of the Collective Bargaining
Agreement (CBA) existing between petitioner and BATLU, the controversy was
submitted for voluntary arbitration. x x x x On July 31, 1998, the Office of the Voluntary
Arbitrator rendered a decision directing petitioner to pay its covered employees "200%
and not just 100% of their regular daily wages for the unworked April 9, 1998 which
covers two regular holidays, namely, Araw ng Kagitignan and Maundy Thursday."
(Emphasis and underscoring supplied)
Subject of interpretation in the case at bar is Article 94 of the Labor Code which reads:
ART. 94. Right to holiday pay. - (a) Every worker shall be paid his regular daily wage
during regular holidays, except in retail and service establishments regularly
employing less than ten (10) workers;
(b) The employer may require an employee to work on any holiday but such
employee shall be paid a compensation equivalent to twice his regular rate;
and
(c) As used in this Article, "holiday" includes: New Years Day, Maundy
Thursday, Good Friday, the ninth of April, the first of May, the twelfth of
June, the fourth of July, the thirtieth of November, the twenty-fifth and
thirtieth of December and the day designated by law for holding a general
election,
which was amended by Executive Order No. 203 issued on June 30, 1987, such that
the regular holidays are now:
1. New Years Day January 1

2. Maundy Thursday Movable Date

"On the correct payment of holiday compensation on April 9, 1993 which apart from
being Good Friday is also Araw ng Kagitingan, i.e., two regular holidays falling on
the same day, this Department is of the view that the covered employees are entitled 3. Good Friday Movable Date
to at least two hundred percent (200%) of their basic wage even if said holiday is
unworked. The first 100% represents the payment of holiday pay on April 9, 1993 as
4. Araw ng Kagitingan April 9 (Bataan and Corregidor Day)
Good Friday and the second 100% is the payment of holiday pay for the same date as
Araw ng Kagitingan.
5. Labor Day May 1
Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both
Maundy Thursday and Araw ng Kagitingan x x x x 6. Independence Day June 12

7. National Heroes Day Last Sunday of August

 8. Bonifacio Day November 30 WAS LAID TO REST BY THE REISSUANCE OF THE SAID EXPLANATORY
BULLETIN
9. Christmas Day December 25
III
10. Rizal Day December 30
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION IN UPHOLDING THE VALIDITY OF THE
In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the
EXPLANATORY BULLETIN EVEN WHILE ADMITTING THAT THE SAID BULLEITN
Voluntary Arbitrator held that Article 94 of the Labor Code provides for holiday pay for
WAS NOT AN EXAMPLE OF A JUDICIAL, QUASI-JUDICIAL, OR ONE OF THE
every regular holiday, the computation of which is determined by a legal formula which
RULES AND REGULATIONS THAT [Department of Labor and Employment] DOLE
is not changed by the fact that there are two holidays falling on one day, like on April
MAY PROMULGATE
9, 1998 when it was Araw ng Kagitingan and at the same time was Maundy Thursday;
and that that the law, as amended, enumerates ten regular holidays for every year
should not be interpreted as authorizing a reduction to nine the number of paid regular IV
holidays "just because April 9 (Araw ng Kagitingan) in certain years, like 1993 and
1998, is also Holy Friday or Maundy Thursday."
WHETHER OR NOT THE SECRETARY OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT (DOLE) BY ISSUING EXPLANATORY BULLETIN DATED MARCH
In the assailed decision, the Court of Appeals upheld the findings of the Voluntary 11, 1993, IN THE GUISE OF PROVIDING GUIDELINES ON ART. 94 OF THE
Arbitrator, holding that the Collective Bargaining Agreement (CBA) between petitioner LABOR CODE, COMMITTED GRAVE ABUSE OF DISCRETION, AS IT LEGISLATED
and BATLU, the law governing the relations between them, clearly recognizes their AND INTERPRETED LEGAL PROVISIONS IN SUCH A MANNER AS TO CREATE
intent to consider Araw ng Kagitingan and Maundy Thursday, on whatever date they OBLIGATIONS WHERE NONE ARE INTENDED BY THE LAW
may fall in any calendar year, as paid legal holidays during the effectivity of the CBA
and that "[t]here is no condition, qualification or exception for any variance from the
V
clear intent that all holidays shall be compensated."5

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED

The Court of Appeals further held that "in the absence of an explicit provision in law
GRAVE ABUSE OF DISCRETION IN SUSTAINING THE SECRETARY OF THE
which provides for [a] reduction of holiday pay if two holidays happen to fall on the
DEPARTMENT OF LABOR IN REITERATING ITS EXPLANATORY BULLETIN
same day, any doubt in the interpretation and implementation of the Labor Code
DATED MARCH 11, 1993 AND IN ORDERING THAT THE SAME POLICY
provisions on holiday pay must be resolved in favor of labor."
OBTAINED FOR APRIL 9, 1998 DESPITE THE RULINGS OF THE SUPREME
COURT TO THE CONTRARY
By the present petition, petitioners raise the following issues:
VI
I
WHETHER OR NOT RESPONDENTS ACTS WILL DEPRIVE PETITIONER OF
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED PROPERTY WITHOUT DUE PROCESS BY THE "EXPLANATORY BULLETIN" AS
GRAVE ABUSE OF DISCRETION IN ERRONEOUSLY INTERPRETING THE TERMS WELL AS EQUAL PROTECTION OF LAWS
OF THE COLLECTIVE BARGAINING AGREEMENT BETWEEN THE PARTIES AND
SUBSTITUTING ITS OWN JUDGMENT IN PLACE OF THE AGREEMENTS MADE
The petition is devoid of merit.
BY THE PARTIES THEMSELVES

At the outset, it bears noting that instead of assailing the Court of Appeals Decision by
II
petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure,
petitioner lodged the present petition for certiorari under Rule 65.
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION IN HOLDING THAT ANY DOUBTS ABOUT THE
[S]ince the Court of Appeals had jurisdiction over the petition under Rule 65, any
VALIDITY OF THE POLICIES ENUNCIATED IN THE EXPLANATORY BULLETIN
alleged errors committed by it in the exercise of its jurisdiction would be errors of
judgment which are reviewable by timely appeal and not by a special civil action
of certiorari. If the aggrieved party fails to do so within the reglementary period, and
the decision accordingly becomes final and executory, he cannot avail himself of the
writ of certiorari, his predicament being the effect of his deliberate inaction.
The appeal from a final disposition of the Court of Appeals is a petition for review
under Rule 45 and not a special civil action under Rule 65 of the Rules of Court, now
Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. Rule 45 is
clear that the decisions, final orders or resolutions of the Court of Appeals in any
case, i.e., regardless of the nature of the action or proceeding involved, may be
appealed to this Court by filing a petition for review, which would be but a continuation
of the appellate process over the original case. Under Rule 45 the reglementary period
to appeal is fifteen (15) days from notice of judgment or denial of motion for
reconsideration.
As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the
enjoyment of ten paid regular holidays.9 The provision is mandatory,10 regardless of
whether an employee is paid on a monthly or daily basis.11Unlike a bonus, which is a
management prerogative,12 holiday pay is a statutory benefit demandable under the
law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact
that two holidays fall on the same date should not operate to reduce to nine the ten
holiday pay benefits a worker is entitled to receive.
It is elementary, under the rules of statutory construction, that when the language of
the law is clear and unequivocal, the law must be taken to mean exactly what it
says.13 In the case at bar, there is nothing in the law which provides or indicates that
the entitlement to ten days of holiday pay shall be reduced to nine when two holidays
fall on the same day.

xxx Petitioners assertion that Wellington v. Trajano14 has "overruled" the DOLE March 11,
1993 Explanatory Bulletin does not lie. In Wellington, the issue was whether monthly-
paid employees are entitled to an additional days pay if a holiday falls on a Sunday.
For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must
This Court, in answering the issue in the negative, observed that in fixing the monthly
show that he has no plain, speedy and adequate remedy in the ordinary course of law
salary of its employees, Wellington took into account "every working day of the
against its perceived grievance. A remedy is considered "plain, speedy and adequate"
year including the holidays specified by law and excluding only Sunday." In the instant
if it will promptly relieve the petitioner from the injurious effects of the judgment and
case, the issue is whether daily-paid employees are entitled to be paid for two regular
the acts of the lower court or agency. In this case, appeal was not only available but
holidays which fall on the same day.15
also a speedy and adequate remedy.6

In any event, Art. 4 of the Labor Code provides that all doubts in the implementation
The records of the case show that following petitioners receipt on August 18, 2000 of
and interpretation of its provisions, including its implementing rules and regulations,
a copy of the August 10, 2000 Resolution of the Court of Appeals denying its Motion
shall be resolved in favor of labor. For the working mans welfare should be the
for Reconsideration, it filed the present petition for certiorari on September 15, 2000,
primordial and paramount consideration.16
at which time the Court of Appeals decision had become final and executory, the 15-
day period to appeal it under Rule 45 having expired.
Moreover, Sec. 11, Rule IV, Book III of the Omnibus Rules to Implement the Labor
Code provides that "Nothing in the law or the rules shall justify an employer in
Technicality aside, this Court finds no ground to disturb the assailed decision.
withdrawing or reducing any benefits, supplements or payments for unworked regular
holidays as provided in existing individual or collective agreement or employer practice
Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that or policy."17
the State shall afford protection to labor.7 Its purpose is not merely "to prevent
diminution of the monthly income of the workers on account of work interruptions. In
From the pertinent provisions of the CBA entered into by the parties, petitioner had
other words, although the worker is forced to take a rest, he earns what he should
obligated itself to pay for the legal holidays as required by law. Thus, the 1997-1998
earn, that is, his holiday pay."8 It is also intended to enable the worker to participate in
CBA incorporates the following provision:
the national celebrations held during the days identified as with great historical and
cultural significance.
ARTICLE XIV
PAID LEGAL HOLIDAYS
Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last
Sunday of August), Bonifacio Day (November 30) and Rizal Day (December 30) were
declared national holidays to afford Filipinos with a recurring opportunity to The following legal holidays shall be paid by the COMPANY as required by law:
commemorate the heroism of the Filipino people, promote national identity, and
deepen the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to
1. New Years Day (January 1st)
celebrate the contributions of the working class to the development of the nation, while
the religious holidays designated in Executive Order No. 203 allow the worker to
celebrate his faith with his family. 2. Holy Thursday (moveable)
 3. Good Friday (moveable)

4. Araw ng Kagitingan (April 9th)

5. Labor Day (May 1st)

6. Independence Day (June 12th)

7. Bonifacio Day [November 30]

8. Christmas Day (December 25th)

9. Rizal Day (December 30th)

10. General Election designated by law, if declared public non-working

holiday

11. National Heroes Day (Last Sunday of August)

Only an employee who works on the day immediately preceding or after a regular
holiday shall be entitled to the holiday pay.

A paid legal holiday occurring during the scheduled vacation leave will result in holiday
payment in addition to normal vacation pay but will not entitle the employee to another
vacation leave.

Under similar circumstances, the COMPANY will give a days wage for November 1st
and December 31st whenever declared a holiday. When required to work on said
days, the employee will be paid according to Art. VI, Sec. 3B hereof.18

WHEREFORE, the petition is hereby DISMISSED.

SO ORDERED.
G.R. No. 101535 January 22, 1993
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, petitioner,
vs.
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, SECOND
DIVISION, PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, RAUL
ABRICO, RODRIGO VASALLO, EDUARDO A. SIBBALUCA, and BENIGNO M.
MANASIS, respondents.
CAMPOS, JR., J.:
Subject of this petition is the Resolution* of the National Labor Relations Commission
(NLRC) affirming the decision of the Philippine Overseas Employment Administration
(POEA) which held herein petitioner Philippine National Construction Corporation
(PNCC) liable to private respondents Raul Abrico, Rodrigo Vasallo, Eduardo A.
Sibbaluca, and Benigno M. Manasis for salary, overtime pay, vacation and sick leave,
and completion bonus differentials.
The facts are as follows:
Herein private respondents Raul C. Abrico, Rodrigo Vasallo, Eduardo A. Sibbaluca,
and Benigno M. Manasis were deployed by herein petitioner for overseas employment
to Iraq as security guards pursuant to individual appointment contracts dated April 15,
1985. These were submitted to the POEA and were validated by the latter on April 22,
1985. The contracts provided for a US$350.00/month salary.
However, on May 12, 1985, a second overseas contract was executed by the PNCC
which was accepted by private respondents. It modified the April 15, 1985 contract by
providing for a monthly salary of US$260.00 for the same position. The contract was
for a two-year period. When the period lapsed, private respondents were repatriated
and were extended local employment. However, all of them filed their voluntary
resignation effective August 31, 1987 so that they could avail of more benefits under
the Retirement Program offered by the PNCC.
On August 17, 1987, private respondents filed a complaint before the POEA for,
among others, (a) nonpayment of promotional pay increase for Raul C. Abrico and
Rodrigo J. Vasallo; (b) underpayment of salaries, overtime pay, bonuses, night
differential pay, sick leave and vacation leave benefits; (c) assigning Friday overtime
guarding duties to non-guards.
In disposing of the complaint, the POEA ruled as follows:
"The issues to be resolved in these are:
1. Whether or not herein complainants are entitled to salary and overtime pay
differentials.
2. Whether or not herein complainants are entitled to vacation leave and sick leave
differentials, bonus differential and night shift differential.
3. Whether or not complainants Raul Abrico and Rodrigo J. Vasallo are entitled to
promotional pay differential.
This Office, after a thorough examination of the allegations as well as the evidence of
the parties finds the answer of the first issue to be affirmative, affirmative also to the
second issue as far as vacation and sick leaves (sic) differentials as well as bonus
differential are concerned and negative as to the rest of the issues.
x x x The only dispute which remains unsolved is whether or not the monthly salary of
herein complainants is US$350.00 a month or US$260.00.
As correctly invoked by complainants paragraph (1) of Article 34 of the Labor Code
prohibits the substitution or alteration of employment contracts approved and verified
by the Department of Labor from the time (of) the actual signing thereof by the parties
up to and including the period of expiration of the same without the approval of the
Department of Labor.
With regard to the first issue in this case the approved contract of employment of the
herein complainants with the respondent is US$350.00 a month. This can be inferred
from the POEA approved contract of employment and by the certification issued by
respondent's chief recruiting officer. This being so, herein complainants have the right
to be paid as monthly salaries the aforementioned amount.
Complainants having been granted voluntarily by the respondent a two-hour daily
overtime (Exh. "G", "G-1") during the durations of their contract, are also entitled to be
paid thereto based on the monthly salaries of US$350.00 and not US$260.00.
In connection with the second issues of vacation and sick leaves (sic) differentials as
well as bonus differential, there being no refutation from the respondent of the
allegation of the complainants that they were paid the said benefits in accordance with
the monthly rate they were receiving while working in Iraq, that is US$260.00, instead
of US$350.00, their salary rate in their approved employment contract, this Office finds
it proper to award the complainants the difference of the two (2) aforementioned
amounts as far as their vacation and sick leaves (sic) benefits as well as completion
bonus are concerned. Subparagraph a of paragraph seven of the master employment
contract of the respondent in its Iraq project during the year 1985 provides a vacation
leave of 20 days and sick leave of 10 days or a total of thirty (30) days leave for each
of their employee for twelve (12) months service. The said leaves (sic) benefits are
commutable to cash at the rate of 100% of the employee's salary at the end of
employees foreign assignment (subpar. c par. 7, respondent's Master Employment
Contract). Respondent's master employment contract also provides for completion
bonus of fifteen (15) days for every year of service (par. 15). Respondent having paid
the complainants the said benefits in accordance with the monthly rate they actually
received while working in Iraq, this Office finds it proper for the respondent to pay to
complainants the difference of the two aforementioned amounts."[1]
From the decision of the POEA, the PNCC appealed to the NLRC. It alleged that the
POEA erred in applying Article 34(i) of the Labor Code; and in holding that the notice
of employment, dated April 15, 1985, providing for a monthly salary of US$350.00 was
the actual overseas employment contract instead of the one dated May 12, 1985
which provided for a salary of US$260.00/month.
In affirming the POEA decision, the NLRC stated:
"x x x suffice it to state that in its aforestated Rejoinder respondent-appellant
corporation admitted as "xxx beyond question xxx that the contracts dated April 15,
1985 were amended or modified on May 12, 1985" (Rollo 60), the latter sans "xxx the
approval of the Department of Labor xxx" and/or the POEA, thus within the context of
prohibited practices under Art. 34 (i) of the Labor Code, as amended.
As validated by the POEA, the approved employment contracts of complainants-
appellees were for US$350.00 a month salary. Ms. Solis certified to the aforesaid
salary as PNCC Recruitment Head (Rollo 25-28); also, as per POEA Accreditation
Department certification dated 25 June 1987. (Rollo 24).
xxxxxxxxx
Relative to the last assignment of error, respondent-appellant corporation insists that
the POEA('s) basis for the computation of the awarded differentials are erroneous for
being without evidentiary basis or contrary to the evidence.
It must be noted that complainants-appellees presented its (sic) claims (Annex "M",
"N", "O", "P"; Rollo 122-136, 73-98) for differentials in overtime pay, sick leave and
vacation leave benefits and completion bonus, as well as its (sic) Exhibits "G" and "G-
1", all of which served as POEA bases for entitlement (Rollo 181, 182) to the several
money claims; and the formula bases for the aforestated computation were detailed
besides, in the assailed decision (pages 6, 7; Rollo 179, 180).
The record is bereft however, of evidence of compliance with the aforesaid
employment contracts relative to the aforesaid claims.
Absolutely no evidence appears to have been submitted for respondents-appellants
relative to satisfaction of the aforementioned claims: whether of payments for any
overtime as authorized and rendered, or availment of leave benefits or its computation
(sic) to cash, etc., where the pertinent employment records, particularly disbursements
for services rendered, as well as for fringe benefits usually are for the account of the
deploying employer."[2]
A Motion for Reconsideration of this Resolution having been denied on August 23,
1991, petitioner filed this petition for certiorari alleging that the public respondents
committed grave abuse of discretion amounting to lack or excess of jurisdiction in
holding that the notice of employment dated April 15, 1985 was the actual employment
contract and that Article 34(i) of the Labor Code was applicable.
We find no sufficient ground to annul the decision of the NLRC due to a capricious and
whimsical exercise of judgment. The petitioner's claim that the public respondent
NLRC gravely abused its discretion in holding that the private respondents were
entitled to a monthly salary of US$350.00 pursuant to the April 15, 1985 employment
contract has not been adequately substantiated. One of the axioms governing judicial
review through certiorari is that the administrative decision may properly be annulled
or set aside only upon clear showing that the administrative official or tribunal has
acted with grave abuse of discretion.[3]
The assailed NLRC decision which affirmed the POEA ruling was based on the
exhibits presented by the parties, among which were the confirmation letters [4] issued
to each of the private respondents and the certification[5] issued by the POEA on June
25, 1987 stating that the approved rate for the position of a company guard for the
PNCC was US$350.00/month. More importantly, the NLRC relied upon the admission
made by the PNCC. Thus, it held:
"x x x suffice it to state that in its aforestated Rejoinder respondent-appellant
corporation admitted [underscoring supplied] as "xxx beyond question xxx that the
contracts dated April 12, 1985 were amended or modified on May 12, 1985" (Rollo
60), the latter sans "xxx the approval of the Department of Labor xxx" and/or the
POEA, thus within the context of prohibited practices under Art. 34 (i) of the Labor
Code, as amended."[6]
The PNCC now finds fault in that decision by saying that the April 15, 1985 document
was but a mere notice/offer of employment. Petitioner alleges further that it was never
signed and accepted by private respondents. Consequently, it never became a
binding contract between the parties concerned. Petitioner further stated that the real
contract of employment was the one executed on May 12, 1985 which provided for a
monthly salary of US$260.00 and which was accepted by private respondents.
While the allegations of the PNCC may cast doubt on the real nature of the April 12,
1985 document, our Civil Code[7]states:
"In case of doubt, all labor legislation and all labor contracts shall be construed in favor
of the safety and decent living for the laborers."
The mandate of the law for a liberal interpretation of labor contracts in favor of the
working man was applied in the case of Ditan vs. POEA Administrator[8] where We
made the following pronouncement:
"A strict interpretation of the cold facts before us might support the position taken by
the respondents. However, we are dealing here not with an ordinary transaction but
with a labor contract which deserves special treatment and a liberal interpretation in
favor of the worker x x x the Constitution mandates the protection of labor and the
sympathetic concern of the State for the working class conformably to the social
justice policy. x x x
xxx xxx
Under the policy of social justice, the law bends over backward to accommodate the
interests of the working class on the humane justification that those with less
privileges in life should have more privileges in law. x x x."
WHEREFORE, in view of the foregoing, the questioned Resolution of the NLRC is
hereby AFFIRMED. Consequently, this petition is DISMISSED. With costs.
SO ORDERED.
 FIRST DIVISION
[G.R. No. 79560 : December 3, 1990.]
191 SCRA 823
ANDRES E. DITAN, Petitioner, vs. PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION ADMINISTRATOR, NATIONAL
LABOR RELATIONS COMMISSION, ASIAWORLD RECRUITMENT,
INC., AND/OR INTRACO SALES CORPORATION, Respondents.
DECISION
CRUZ, J.:
The petitioner had the rare experience of being taken hostage in 1984, along
with a number of his co-workers, by the rebels in Angola. His captivity for
more than two months and the events that followed his release are the
subject of the present petition.
Andres E. Ditan was recruited by private respondent Intraco Sales
Corporation, through its local agent, Asia World, the other private
respondent, to work in Angola as a welding supervisor. The contract was for
nine months, at a monthly salary of US$1,100.00 or US$275.00 weekly, and
contained the required standard stipulations for the protection of our
overseas workers.
Arriving on November 30, 1984, in Luanda, capital of Angola, the petitioner
was assigned as an ordinary welder in the INTRACO central maintenance
shop from December 2 to 25, 1984. On December 26, 1984, he was
informed, to his distress, that would be transferred to Kafunfo, some 350
kilometers east of Luanda. This was the place where, earlier that year, the
rebels had attacked and kidnapped expatriate workers, killing two Filipinos
in the raid. Naturally, Ditan was reluctant to go. However, he was assured
by the INTRACO manager that Kafunfo was safe and adequately protected
by government troops; moreover and this was more persuasive he was
told he would be sent home if he refused the new assignment. In the end,
with much misgiving, he relented and agreed.: nad
On December 29, 1984, his fears were confirmed. The Unita rebels attacked
the diamond mining site where Ditan was working and took him and sixteen
other Filipino hostages, along with other foreign workers. The rebels and
their captives walked through jungle terrain for 31 days to the Unita
stronghold near the Namibian border. They trekked for almost a thousand
kilometers. They subsisted on meager fare. Some of them had diarrhea.
Their feet were blistered. It was only on March 16, 1985, that the hostages
were finally released after the intercession of their governments and the
International Red Cross. Six days later, Ditan and the other Filipino hostages
were back in the Philippines. 1
The repatriated workers had been assured by INTRACO that they would be
given priority in re-employment abroad, and eventually eleven of them were
taken back. Ditan having been excluded, he filed in June 1985 a complaint
against the private respondents for breach of contract and various other
claims. Specifically, he sought the amount of US$4,675.00, representing his
salaries for the unexpired 17 weeks of his contract; US$25,000.00 as war
risk bonus; US$2,196.50 as the value of his lost belongings; US$1,100 for
unpaid vacation leave; and moral and exemplary damages in the sum of
US$50,000.00, plus attorney's fees.
All these claims were dismissed by POEA Administrator Tomas D. Achacoso
in a decision dated January 27, 1987. 2 This was affirmed in toto by
respondent NLRC in a resolution dated July 14, 1987, 3 which is now being
challenged in this petition.
Going over the record, we find that the public respondent correctly rejected
the petitioner's claim for paid vacation leave. The express stipulation in
Clause 5 of the employment contract reads:
Should the Employee enter into a further 9 to 12 months contract at the
completion contract, he will be entitled to one month's paid vacation before
commencement of his second or subsequent contract.
It appears that the petitioner had not entered into a second contract with
the employer after the expiration of the first. Such re-employment was not
a matter of right on the part of the petitioner but dependent on the need for
his skills in another project the employer might later be undertaking.
As regards the cost of his belongings, the evidence shows that they were not
really lost but in fact returned to him by the rebels prior to their release. If
he had other properties that were not recovered, there was no proof of their
loss that could support his allegations. They were therefore also properly
rejected.:-cralaw
We find, though, that the claims for breach of contract and war risk bonus
deserve a little more reflection in view of the peculiar circumstances of this
case.
The fact that stands out most prominently in the record is the risk to which
the petitioner was subjected when he was assigned, after his reluctant
consent, to the rebel-infested region of Kafunfo. This was a dangerous area.
This same place had earlier been the target of a rebel attack that had
resulted in the death of two Filipino workers and the capture of several
others. Knowing all this, INTRACO still pressured Ditan into agreeing to be
transferred to that place, dismissing his initial objection and, more
important, threatening to send him home if he refused.
We feel that in failing to provide for the safety of the petitioner, the private
respondents were clearly remiss in the discharge of one of the primary duties
of the employer. Worse, they not only neglected that duty but indeed
deliberately violated it by actually subjecting and exposing Ditan to a real
and demonstrated danger. It does not help to argue that he was not forced
to go to Kafunfo and had the option of coming home. That was a cruel choice,
to say the least. The petitioner had gone to that foreign land in search of a
better life that he could share with his loved ones after his stint abroad. That
choice would have required him to come home empty-handed to the
disappointment of an expectant family.
It is not explained why the petitioner was not paid for the unexpired portion
of his contract which had 17 more weeks to go. The hostages were
immediately repatriated after their release, presumably so they could
recover from their ordeal. The promise of INTRACO was that they would be
given priority in re-employment should their services be needed. In the
particular case of the petitioner, the promise was not fulfilled. It would seem
that his work was terminated, and not again required, because it was really
intended all along to assign him only to Kafunfo.:-cralaw
The private respondents stress that the contract Ditan entered into called for
his employment in Angola, without indication of any particular place of
assignment in the country. This meant he agreed to be assigned to work
anywhere in that country, including Kafunfo. When INTRACO assigned Ditan
to that place in the regular course of its business, it was merely exercising
its rights under the employment contract that Ditan had freely entered into.
Hence, it is argued, he cannot now complain that there was a breach of that
contract for which he is entitled to monetary redress.
The private respondents also reject the claim for war risk bonus and point
out that POEA Memorandum Circular No. 4, issued pursuant to the
mandatory war risk coverage provision in Section 2, Rule VI, of the POEA
Rules and Regulations on Overseas Employment, categorizing Angola as a
war risk took effect only on February 6, 1985, "after the petitioner's
deployment to Angola on November 27, 1984." Consequently, the stipulation
could not be applied to the petitioner as it was not supposed to have a
retroactive effect.
A strict interpretation of the cold facts before us might support the position
taken by the respondents. However, we are dealing here not with an ordinary
transaction but with a labor contract which deserves special treatment and
a liberal interpretation in favor of the worker. As the Solicitor General
observes in his Comment supporting the petitioner, the Constitution
mandates the protection of labor and the symp athetic concern of the State
for the working class conformably to the social justice policy. This is a
command we cannot disregard in the resolution of the case before us.
The paramount duty of this Court is to render justice through law. The law
in this case allows two opposite interpretations, one strictly in favor of the
employers and the other liberally in favor of the worker. The choice is
obvious. We find, considering the totality of the circumstances attending this
case, that the petitioner is entitled to relief.
The petitioner went to Angola prepared to work as he had promised in
accordance with the employment contract he had entered into in good faith
with the private respondents. Over his objection, he was sent to a dangerous
assignment and as he feared was taken hostage in a rebel attack that
prevented him from fulfilling his contract while in captivity. Upon his release,
he was immediately sent home and was not paid the salary corresponding
to the unexpired portion of his contract. He was immediately repatriated with
the promise that he would be given priority in re-employment, which never
came. To rub salt on the wound, many of his co-hostages were re-employed
as promised. The petitioner was left only with a bleak experience and nothing
to show for it except dashed hopes and a sense of rejection.
In these circumstances, the Court feels that the petitioner should be paid the
salary corresponding to the 17 unserved weeks of his contract, which was
terminated by the private respondents despite his willingness to work out
the balance of his term. In addition, to assuage the ordeal he underwent
while in captivity by the rebels, the Court has also decided in its discretion
to award him nominal damages in the sum of P20,000.00. This is not
payment of the war risk claim which, as earlier noted, was not provided for
in the employment contract in question, or indemnification for any loss
suffered by him. This is but a token of the tenderness of the law towards the
petitioning workman vis-a-vis the private respondents and their more
comfortable resources.: nad
Under the policy of social justice, the law bends over backward to
accommodate the interests of the working class on the humane justification
that those with less privileges in life should have more privileges in law. That
is why our judgment today must be for the petitioner.
WHEREFORE, the challenged resolution of the NLRC is hereby MODIFIED.
The private respondents are hereby DIRECTED jointly and severally to pay
the petitioner: a) the current equivalent in Philippine pesos of US$4,675.00,
representing his unpaid salaries for the balance of the contract term; b)
nominal damages in the amount of P20,000.00; and c) 10% attorney's fees.
No costs.
SO ORDERED.
Narvasa, Gan
G.R. No. 75704 July 19, 1989
RUBBERWORLD (PHILS.), INC. and ELPIDIO HIDALGO, petitioners,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION)
and NESTOR MALABANAN, respondents.
MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking
the annulment of the decision of the respondent National Labor Relations
Commission dated June 17, 1986 (p. 23, Rollo) in NLRC NCR Case No. 6-
2158-84 entitled "Nestor Malabanan and Jonathan Transmil, Complainants,
versus Rubberworld (Phils.), Inc. and Elpidio Hidalgo, Respondents,"
reversing the decision of the Labor Arbiter which dismissed the complaint for
illegal dismissal for lack of merit.
The antecedent facts are as follows:
Respondent Malabanan was employed by petitioner Rubberworld (Phils.),
Inc. on September 25,1978 as an ordinary clerk. In May, 1980, he was
promoted to the position of production scheduler with a corresponding salary
increase. He was again transferred to the Inventory Control Section as stock
clerk on September 1, 1983.
On April 6,1984, Elpidio Hidalgo, the Plant I General Manager of petitioner
company, received a copy of the Financial Audit Report from the Internal
Audit Department of the company showing a significant material variance
between the year-end actual inventory and that of the Cards (SC)/EDP
Control Records. As a result thereof, Noel Santiago, Section Head of the
Inventory Control Section, where respondent Malabanan was assigned,
conducted an investigation of the reported discrepancies in the stock cards
upon the request of the Plant General Manager. Santiago then submitted his
report to the general manager recommending the dismissal of respondent
Malabanan.
Consequently, Malabanan's case was endorsed to the Human Resources
Division of petitioner company, which conducted a reinvestigation on the
matter and which affirmed the recommendation of the Inventory Control
Section Head for the termination of employment of respondent Malabanan.
On June 6, 1984, respondent Malabanan was dismissed by petitioner
company.
On June 16, 1984, respondent Malabanan, along with another complainant
named Jonathan Transmit, filed a complaint for unfair labor practice and
illegal dismissal against petitioner company alleging that they (respondent
Malabanan and complainant Transmil) were members of the monthly
salaried employees' union affiliated with TUPAS; that petitioner company
forced them to disaffiliate from the union; and that due to their refusal to
resign from the union, they were ultimately dismissed from employment by
petitioner company.
Petitioner company on the other hand, denied complainants' allegations and
averred that respondent Malabanan's dismissal was due to gross and
habitual neglect of his duty and not due to his union affiliation.
During the hearing of the case, the other complainant, Jonathan Transmil
withdrew from the case since he already found another employment abroad.
On January 30, 1985, the Labor Arbiter rendered a decision (pp. 17- 22,
Rollo), the dispositive portion of which reads:
WHEREFORE, premises considered, this case should be,
as it is hereby, DISMISSED, for lack of merit.
SO ORDERED.
Respondent Malabanan appealed from the adverse decision to the
respondent Commission. On June 17, 1986, respondent Commission
reversed the appealed decision of the Labor Arbiter and stated, inter alia:
Confronted with this factual backgrounds, we find
ourselves inclined to the view that the appealed decision
merits a reversal.
xxx
WHEREFORE, premises considered, the appealed
decision should be, as it is hereby REVERSED.
Consequently, the respondents are directed to reinstate
complainant Nestor Malabanan to his former position as
 production scheduler, with full backwages from the time he
was illegally terminated up to actual reinstatement, without
loss of seniority rights and benefits appurtenant thereto.
SO ORDERED. (pp. 23-27, Rollo)
The petitioner company moved for a reconsideration on the ground that the
respondent Commission's decision is not in accordance with facts and
evidence on record. On July 23, 1986, the said motion for reconsideration
was denied.
On September 3, 1986, petitioner filed the instant petition contending that
the respondent Commission committed grave abuse of discretion amounting
to lack of jurisdiction in reversing the Labor Arbiter's decision.
The two issues to be resolved in the instant case are: (1) whether or not the
dismissal of respondent Malabanan is tainted with unfair labor practice; and
(2) whether or not a just and valid cause exists for the dismissal of private
respondent Malabanan.
Petitioner alleges that the National Labor Relations Commission gravely
erred in concluding that the demotion of Malabanan from production
scheduler to a stock clerk at the Stock and Inventory Section was intended
to discourage Malabanan from union membership. It argued that the Labor
Arbiter was correct in finding that the private respondent had not shown
ample proof to the effect that he was a member of a labor organization prior
to his transfer to another position.
We believe that the foregoing contentions are impressed with merit. Art. 248
of the Labor Code, PD No. 442, as amended, provides:
Art. 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
The question of whether an employee was dismissed because of his union
activities is essentially a question of fact as to which the findings of the
administrative agency concerned are conclusive and binding if supported by
substantial evidence. Substantial evidence has been defined as such
relevant evidence as a reasonable mind might accept as adequate to
support a conclusion. It means such evidence which affords a substantial
basis from which the fact in issue can be reasonably inferred (Philippine
Metal Foundries, Inc. v. Court of Industrial Relations, et. al., No. L- 34948-
49, May 15, 1979, 90 SCRA 135). The findings of the Labor Arbiter on the
non-existence of unfair labor practice on the part of the company are more in
accord and supported by the evidence submitted by the parties in the instant
case, to wit:
Complainant had stated that he was a member of the
monthly salaried employees union affiliated with TUPAS.
He, however, offered no proof to support his allegation. In
fact, no evidence was presented to prove the existence of
such union. We (note] from the records that, as the usual
practice, in cases like this one, complainant is usually
supported by the union of which he is a member. And
ordinarily, the union itself is impleaded as a co-
complainant. Such circumstances, surprisingly, [are] not
present in this case. In fact, complainant categorically
alleged that he had solicited the services of the PAFLU
Labor Union in filing this case. It is, indeed, surprising that
complainant had to solicit the help of a labor union
(PAFLU) of which he was not a member instead of
soliciting the aid of the labor union (TUPAS) of which he
was allegedly a member. These circumstances alone
[destroy] the credibility of complainant's allegations. (p. 21,
Rollo).
Nowhere in the records can We find that the company actually performed
positive acts to restrain the union participation of private respondent. For
one, it is doubtful whether Malabanan was really engaged in the organization
of a labor union affiliated with the federation TUPAS. The only evidence
presented by him to prove this contention is his affidavit and that of his
father. It is therefore, not in accordance with ordinary experience and
common practice that the private respondent pursued his battle alone,
without the aid and support of his co-members in the union and his
federation especially in a case of serious nature as this one involving
company intervention with union activity.
As a rule, it is the prerogative of the company to promote, transfer or even
demote its employees to other positions when the interests of the company
reasonably demand it. Unless there are instances which directly point to
interference by the company with the employees' right to self-organization,
the transfer of private respondent should be considered as within the bounds
allowed by law. Furthermore, although private respondent was transferred to
a lower position, his original rank and salary remained undiminished, which
fact was not refuted or questioned by private respondent.
In view of the foregoing conclusions of the Labor Arbiter, We are compelled
to agree with the latter that the petitioner company did not commit any unfair
labor practice in transferring and thereafter dismissing private respondent.
The remaining issue to be resolved on this point is whether the dismissal of
respondent Malabanan was for a just and lawful cause. Article 282 of the
Labor Code, as amended, provides:
Article 282. Termination by employer. An employer may
terminate an employment for any of the following just
causes:
xxx
b) Gross and habitual neglect by the employee of his
duties;
x x x.
Petitioner contends that private respondent Malabanan was guilty of gross
negligence when he caused the posting of incorrect entries in the stock card
without counter checking the actual movement status of the items at the
warehouse, thereby resulting into unmanageable inaccuracies in the data
posted in the stock cards. The respondent Commission correctly ruled:
Penultimately, even assuming for the sake of argument
that herein complainant 'posted entries in the stock card
without counter checking the actual movement status of
the items at the warehouse, thereby resulting in an
inaccurate posting of data on the stock cards," to our
impression does not constitute as a just cause for
dismissal. Records show that he was only transferred to
the Inventory Control Section on September 1, 1983 and
was not so familiar and experienced as a stock clerk, and
prior to his transfer, the record shows no derogatory
records in terms of his performance. His failure to carry out
efficiently his duties as a stock clerk is not so gross and
habitual. In other words he was not notoriously negligent
to warrant his severance from the service. Considering
that there is nothing on record that shows that he wilfully
defied instructions of his superior with regards to his duties
and that he gained personal benefit of the discrepancy, his
dismissal is unwarranted. (p. 26, Rollo).
It does not appear that private respondent Malabanan is an incorrigible
offender or that what he did inflicted serious damage to the company so
much so that his continuance in the service would be patently inimical to the
employer's interest. Assuming, in gratia argumenti that the private
respondent had indeed committed the said mistakes in the posting of
accurate data, this was only his first infraction with regard to his duties. It
would thus be cruel and unjust to mete out the drastic penalty of dismissal,
for it is not proportionate to the gravity of the misdeed.
In fact, the promotion of the private respondent from the position of ordinary
clerk to production scheduler establishes the presumption that his
performance of his work is acceptable to the company. The petitioner even
admitted that it was due to heavy financial and business reverses that the
company assigned the private respondent to the position of Stock Clerk and
not because of his unsatisfactory performance as production scheduler (p. 6,
Rollo). It has been held that there must be fair and reasonable criteria to be
used in selecting employees to be dismissed (Asiaworld Publishing House,
Inc. v. Ople, No. L-56398, July 23, 1987, 152 SCRA 219).
It is worthy to note that the prerogative of management to dismiss or lay-off
an employee must be done without abuse of discretion, for what is at stake
is not only petitioner's position, but also his means of livelihood. This is so
because the preservation of the lives of the citizens is a basic duty of the
State, more vital than the peservation of corporate profits (Euro-Linea, Phils.,
Inc. v. NLRC, L-75782, December 1, 1987,156 SCRA 79).
The law regards the worker with compassion. Our society is a
compassionate one. Where a penalty less punitive would suffice, whatever
missteps may be committed by the worker should not be visited by the
supreme penalty of dismissal. This is not only because of the law's concern
for the working man. There is in addition, his family to consider. After all,
labor determinations should not only be secundum rationem but also
secundum caritatem (Almira, et al., v. BF Goodrich Philippines, Inc., et al.,
G.R. No. L-34974, July 25, 1974, 58 SCRA 120).

ACCORDINGLY, the petition is DISMISSED for lack of merit. However, the

decision of the public respondent is hereby MODIFIED to the effect that
petitioner company is ordered to reinstate private respondent Nestor
Malabanan to the position of stock clerk or substantially equivalent position,
with the same rank and salary he is enjoying at the time of his termination,
with three years backwages and without loss of seniority rights and benefits
appurtenant thereto.

Should the reinstatement of the private respondent as herein ordered be

rendered impossible by the supervention of circumstances which prevent the
same, the petitioner is further ordered to pay private respondent separation
pay equivalent to one (1) month's salary for every year of service rendered,
computed at his last rate of salary.

SO ORDERED.
G.R. No. L-69870 November 29, 1988 the company's Statement of Billings Adjustment. Said charges alleged that
Credo "did not comply with Lloren's instructions to place some
NATIONAL SERVICE CORPORATION (NASECO) AND ARTURO L. corrections/additional remarks in the Statement of Billings Adjustment; and
PEREZ, petitioners, when [Credo] was called by Lloren to his office to explain further the said
vs. instructions, [Credo] showed resentment and behaved in a scandalous
THE HONORABLE THIRD DIVISION, NATIONAL LABOR RELATIONS manner by shouting and uttering remarks of disrespect in the presence of
COMMISSION, MINISTRY OF LABOR AND EMPLOYMENT, MANILA her co-employees." 2
AND EUGENIA C. CREDO, respondents.
On 7 November 1983, Credo was called to meet Arturo L. Perez, then Acting
G.R. No. 70295 November 29,1988 General Manager of NASECO, to explain her side before Perez and
NASECO's Committee on Personnel Affairs in connection with the
administrative charges filed against her. After said meeting, on the same
EUGENIA C. CREDO, petitioner, date, Credo was placed on "Forced Leave" status for 1 5 days, effective 8
vs. November 1983. 3
NATIONAL LABOR RELATIONS COMMISSION, NATIONAL SERVICES
CORPORATION AND ARTURO L. PEREZ, respondents.
Before the expiration of said 15-day leave, or on 18 November 1983, Credo
filed a complaint, docketed as Case No. 114944-83, with the Arbitration
The Chief Legal Counsel for respondents NASECO and Arturo L. Perez. Branch, National Capital Region, Ministry of Labor and Employment, Manila,
against NASECO for placing her on forced leave, without due process. 4
Melchor R. Flores for petitioner Eugenia C. Credo.
Likewise, while Credo was on forced leave, or on 22 November 1983,
NASECO's Committee on Personnel Affairs deliberated and evaluated a
number of past acts of misconduct or infractions attributed to her. 5 As a
PADILLA, J.: result of this deliberation, said committee resolved:

Consolidated special civil actions for certiorari seeking to review the 1. That, respondent [Credo] committed the following
decision * of the Third Division, National Labor Relations Commission in offenses in the Code of Discipline, viz:
Case No. 11-4944-83 dated 28 November 1984 and its resolution dated 16
January 1985 denying motions for reconsideration of said decision. OFFENSE vs. Company Interest & Policies

Eugenia C. Credo was an employee of the National Service Corporation No. 3 Any discourteous act to customer, officer and
(NASECO), a domestic corporation which provides security guards as well employee of client company or officer of the Corporation.
as messengerial, janitorial and other similar manpower services to the
Philippine National Bank (PNB) and its agencies. She was first employed OFFENSE vs. Public Moral
with NASECO as a lady guard on 18 July 1975. Through the years, she was
promoted to Clerk Typist, then Personnel Clerk until she became Chief of
Property and Records, on 10 March 1980. 1 No. 7 Exhibit marked discourtesy in the course of
official duties or use of profane or insulting language to
any superior officer.
Sometime before 7 November 1983, Credo was administratively charged by
Sisinio S. Lloren, Manager of Finance and Special Project and Evaluation
Department of NASECO, stemming from her non-compliance with Lloren's OFFENSE vs. Authority
memorandum, dated 11 October 1983, regarding certain entry procedures in
 No. 3 Failure to comply with any lawful order or any
instructions of a superior officer.
2. That, Management has already given due consideration
to respondent's [Credo] scandalous actuations for several
times in the past. Records also show that she was
reprimanded for some offense and did not question it.
Management at this juncture, has already met its
maximum tolerance point so it has decided to put an end
to respondent's [Credo] being an undesirable employee. 6
The committee recommended Credo's termination, with forfeiture of
benefits. 7
On 1 December 1983, Credo was called age to the office of Perez to be
informed that she was being charged with certain offenses. Notably, these
offenses were those which NASECO's Committee on Personnel Affairs
already resolved, on 22 November 1983 to have been committed by Credo.
In Perez's office, and in the presence of NASECO's Committee on Personnel
Affairs, Credo was made to explain her side in connection with the charges
filed against her; however, due to her failure to do so, 8 she was handed a
Notice of Termination, dated 24 November 1983, and made effective 1
December 1983. 9 Hence, on 6 December 1983, Credo filed a supplemental
complaint for illegal dismissal in Case No. 11-4944-83, alleging absence of
just or authorized cause for her dismissal and lack of opportunity to be
heard. 10
After both parties had submitted their respective position papers, affidavits
and other documentary evidence in support of their claims and defenses, on
9 May 1984, the labor arbiter rendered a decision: 1) dismissing Credo's
complaint, and 2) directing NASECO to pay Credo separation pay equivalent
to one half month's pay for every year of service. 11
Both parties appealed to respondent National Labor Relations Commission
(NLRC) which, on 28 November 1984, rendered a decision: 1) directing
NASECO to reinstate Credo to her former position, or substantially
equivalent position, with six (6) months' backwages and without loss of
seniority rights and other privileges appertaining thereto, and 2) dismissing
Credo's claim for attorney's fees, moral and exemplary damages. As a
consequence, both parties filed their respective motions for
reconsideration, 12 which the NLRC denied in a resolution of 16 January
1985. 13
Hence, the present recourse by both parties. In G.R. No. 68970, petitioners
challenge as grave abuse of discretion the dispositive portion of the 28
November 1984 decision which ordered Credo's reinstatement with
backwages. 14Petitioners contend that in arriving at said questioned order,
the NLRC acted with grave abuse of discretion in finding that: 1) petitioners
violated the requirements mandated by law on termination, 2) petitioners
failed in the burden of proving that the termination of Credo was for a valid or
authorized cause, 3) the alleged infractions committed by Credo were not
proven or, even if proved, could be considered to have been condoned by
petitioners, and 4) the termination of Credo was not for a valid or authorized
cause. 15
On the other hand, in G.R. No. 70295, petitioner Credo challenges as grave
abuse of discretion the dispositive portion of the 28 November 1984 decision
which dismissed her claim for attorney's fees, moral and exemplary
damages and limited her right to backwages to only six (6) months. 16
As guidelines for employers in the exercise of their power to dismiss
employees for just causes, the law provides that:
Section 2. Notice of dismissal. Any employer who seeks
to dismiss a worker shall furnish him a written notice
stating the particular acts or omission constituting the
grounds for his dismissal.
xxx xxx xxx
Section 5. Answer and Hearing. The worker may
answer the allegations stated against him in the notice of
dismissal within a reasonable period from receipt of such
notice. The employer shall afford the worker ample
opportunity to be heard and to defend himself with the
assistance of his representative, if he so desires.
Section 6. Decision to dismiss. The employer shall
immediately notify a worker in writing of a decision to
dismiss him stating clearly the reasons therefor. 17
These guidelines mandate that the employer furnish an employee sought to
be dismissed two (2) written notices of dismissal before a termination of
employment can be legally effected. These are the notice which apprises the
employee of the particular acts or omissions for which his dismissal is sought
and the subsequent notice which informs the employee of the employer's
decision to dismiss him.
Likewise, a reading of the guidelines in consonance with the express
provisions of law on protection to labor 18(which encompasses the right to
security of tenure) and the broader dictates of procedural due process
necessarily mandate that notice of the employer's decision to dismiss an
employee, with reasons therefor, can only be issued after the employer has
afforded the employee concerned ample opportunity to be heard and to
defend himself.
In the case at bar, NASECO did not comply with these guidelines in effecting
Credo's dismissal. Although she was apprised and "given the chance to
explain her side" of the charges filed against her, this chance was given so
perfunctorily, thus rendering illusory Credo's right to security of tenure. That
Credo was not given ample opportunity to be heard and to defend herself is
evident from the fact that the compliance with the injunction to apprise her of
the charges filed against her and to afford her a chance to prepare for her
defense was dispensed in only a day. This is not effective compliance with
the legal requirements aforementioned.
The fact also that the Notice of Termination of Credo's employment (or the
decision to dismiss her) was dated 24 November 1983 and made effective 1
December 1983 shows that NASECO was already bent on terminating her
services when she was informed on 1 December 1983 of the charges
against her, and that any hearing which NASECO thought of affording her
after 24 November 1983 would merely be pro forma or an exercise in futility.
Besides, Credo's mere non-compliance with Lorens memorandum regarding
the entry procedures in the company's Statement of Billings Adjustment did
not warrant the severe penalty of dismissal of the NLRC correctly held that:
... on the charge of gross discourtesy, the CPA found in its
Report, dated 22 November 1983 that, "In the process of
her testimony/explanations she again exhibited a conduct
unbecoming in front of NASECO Officers and argued to
Mr. S. S. Lloren in a sarcastic and discourteous manner,
notwithstanding, the fact that she was inside the office of
the Acctg. General Manager." Let it be noted, however,
that the Report did not even describe how the so called
"conduct unbecoming" or "discourteous manner" was done
by complainant. Anent the "sarcastic" argument of
complainant, the purported transcript 19 of the meeting
held on 7 November 1983 does not indicate any sarcasm
on the part of complainant. At the most, complainant may
have sounded insistent or emphatic about her work being
more complete than the work of Ms. de Castro, yet, the
complaining officer signed the work of Ms. de Castro and
did not sign hers.
As to the charge of insubordination, it may be conceded,
albeit unclear, that complainant failed to place same
corrections/additional remarks in the Statement of Billings
Adjustments as instructed. However, under the
circumstances obtaining, where complainant strongly felt
that she was being discriminated against by her superior in
relation to other employees, we are of the considered view
and so hold, that a reprimand would have sufficed for the
infraction, but certainly not termination from services. 20
As this Court has ruled:
... where a penalty less punitive would suffice, whatever
missteps may be committed by labor ought not to be
visited with a consequence so severe. It is not only
because of the law's concern for the working man. There
is, in addition, his family to consider. Unemployment brings
untold hardships and sorrows on those dependent on the
wage-earner. 21
Of course, in justifying Credo's termination of employment, NASECO claims
as additional lawful causes for dismissal Credo's previous and repeated acts
of insubordination, discourtesy and sarcasm towards her superior officers,
alleged to have been committed from 1980 to July 1983. 22
If such acts of misconduct were indeed committed by Credo, they are
deemed to have been condoned by NASECO. For instance, sometime in
1980, when Credo allegedly "reacted in a scandalous manner and raised her
voice" in a discussion with NASECO's Acting head of the Personnel
Administration 23 no disciplinary measure was taken or meted against her.
Nor was she even reprimanded when she allegedly talked 'in a shouting or
yelling manner" with the Acting Manager of NASECO's Building Maintenance
and Services Department in 1980 24 or when she allegedly "shouted" at
NASECO's Corporate Auditor "in front of his subordinates displaying
arrogance and unruly behavior" in 1980, or when she allegedly shouted at
NASECO's Internal Control Consultant in 1981. 25 But then, in sharp contrast
to NASECO's penchant for ignoring the aforesaid acts of misconduct, when
Credo committed frequent tardiness in August and September 1983, she
was reprimanded. 26
Even if the allegations of improper conduct (discourtesy to superiors) were
satisfactorily proven, NASECO's condonation thereof is gleaned from the
fact that on 4 October 1983, Credo was given a salary adjustment for having
performed in the job "at least [satisfactorily]" 27 and she was then rated "Very
Satisfactory" 28as regards job performance, particularly in terms of quality of
work, quantity of work, dependability, cooperation, resourcefulness and
attendance.
Considering that the acts or omissions for which Credo's employment was
sought to be legally terminated were insufficiently proved, as to justify
dismissal, reinstatement is proper. For "absent the reason which gave rise to
[the employee's] separation from employment, there is no intention on the
part of the employer to dismiss the employee concerned." 29 And, as a result
of having been wrongfully dismissed, Credo is entitled to three (3) years of
backwages without deduction and qualification. 30
However, while Credo's dismissal was effected without procedural fairness,
an award of exemplary damages in her favor can only be justified if her
dismissal was effected in a wanton, fraudulent, oppressive or malevolent
manner. 31A judicious examination of the record manifests no such conduct
on the part of management. However, in view of the attendant circumstances
in the case, i.e., lack of due process in effecting her dismissal, it is
reasonable to award her moral damages. And, for having been compelled to
litigate because of the unlawful actuations of NASECO, a reasonable award
for attorney's fees in her favor is in order.
32
In NASECO's comment in G.R. No. 70295, it is belatedly argued that the
NLRC has no jurisdiction to order Credo's reinstatement. NASECO claims
that, as a government corporation (by virtue of its being a subsidiary of the
National Investment and Development Corporation (NIDC), a subsidiary
wholly owned by the Philippine National Bank (PNB), which in turn is a
government owned corporation), the terms and conditions of employment of
its employees are governed by the Civil Service Law, rules and regulations.
In support of this argument, NASECO cites National Housing Corporation vs.
JUCO, 33where this Court held that "There should no longer be any question
at this time that employees of government-owned or controlled corporations
are governed by the civil service law and civil service rifles and regulations."
It would appear that, in the interest of justice, the holding in said case should
not be given retroactive effect, that is, to cases that arose before its
promulgation on 17 January 1985. To do otherwise would be oppressive to
Credo and other employees similarly situated, because under the same
1973 Constitution ,but prior to the ruling in National Housing Corporation vs.
Juco, this Court had recognized the applicability of the Labor Code to, and
the authority of the NLRC to exercise jurisdiction over, disputes involving
terms and conditions of employment in government owned or controlled
corporations, among them, the National Service Corporation
(NASECO).<re||an1w> 34
Furthermore, in the matter of coverage by the civil service of government-
owned or controlled corporations, the 1987 Constitution starkly varies from
the 1973 Constitution, upon which National Housing Corporation vs. Juco is
based. Under the 1973 Constitution, it was provided that:
The civil service embraces every branch, agency,
subdivision, and instrumentality of the Government,
including every government-owned or controlled
corporation. ... 35
On the other hand, the 1987 Constitution provides that:
The civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government,
including government-owned or controlled corporations
with original charter. 36 (Emphasis supplied)
Thus, the situations sought to be avoided by the 1973 Constitution and
expressed by the Court in the National Housing . Corporation case in the
following manner
The infirmity of the respondents' position lies in its
permitting a circumvention or emasculation of Section 1,
Article XII-B of the constitution. It would be possible for a
regular ministry of government to create a host of
subsidiary corporations under the Corporation Code
funded by a willing legislature. A government-owned
corporation could create several subsidiary corporations.
These subsidiary corporations would enjoy the best of two
worlds. Their officials and employees would be privileged
individuals, free from the strict accountability required by
the Civil Service Decree and the regulations of the
 Commission on Audit. Their incomes would not be subject
to the competitive restrains of the open market nor to the
terms and conditions of civil service employment.
Conceivably, all government-owned or controlled
corporations could be created, no longer by special
charters, but through incorporations under the general law.
The Constitutional amendment including such corporations
in the embrace of the civil service would cease to have
application. Certainly, such a situation cannot be allowed
to exist. 37
appear relegated to relative insignificance by the 1987 Constitutional
provision that the Civil Service embraces government-owned or controlled
corporations with original charter; and, therefore, by clear implication, the
Civil Service does not include government-owned or controlled corporations
which are organized as subsidiaries of government-owned or controlled
corporations under the general corporation law.
The proceedings in the 1986 Constitutional Commission also shed light on
the Constitutional intent and meaning in the use of the phrase "with original
charter." Thus
THE PRESIDING OFFICER (Mr.
Trenas) Commissioner Romulo is
recognized.
MR. ROMULO. I beg the indulgence of
the Committee. I was reading the wrong
provision.
I refer to Section 1, subparagraph I which reads:
The Civil Service embraces all branches, subdivisions,
instrumentalities, and agencies of the government,
including government-owned or controlled corporations.
My query: Is Philippine Airlines covered by this provision?
MR. FOZ. Will the Commissioner please state his previous
question?
MR. ROMULO. The phrase on line 4 of
Section 1, subparagraph 1, under the
Civil Service Commission, says:
"including government-owned or
controlled corporations.' Does that
include a corporation, like the Philippine
Airlines which is government-owned or
controlled?
MR. FOZ. I would like to throw a
question to the Commissioner. Is the
Philippine Airlines controlled by the
government in the sense that the
majority of stocks are owned by the
government?
MR. ROMULO. It is owned by the GSIS.
So, this is what we might call a tertiary
corporation. The GSIS is owned by the
government. Would this be covered
because the provision says "including
government-owned or controlled
corporations."
MR. FOZ. The Philippine Airlines was
established as a private corporation.
Later on, the government, through the
GSIS, acquired the controlling stocks. Is
that not the correct situation?
MR. ROMULO. That is true as
Commissioner Ople is about to explain.
There was apparently a Supreme Court
decision that destroyed that distinction
between a government-owned
corporation created under the
Corporation Law and a government-
owned corporation created by its own
charter.
MR. FOZ. Yes, we recall the Supreme
Court decision in the case of NHA vs.
Juco to the effect that all government
corporations irrespective of the manner
of creation, whether by special charter
or by the private Corporation Law, are
deemed to be covered by the civil
service because of the wide-embracing
definition made in this section of the
existing 1973 Constitution. But we recall
the response to the question of
Commissioner Ople that our intendment
in this provision is just to give a general
description of the civil service. We are
not here to make any declaration as to
whether employees of government-
owned or controlled corporations are
barred from the operation of laws, such
as the Labor Code of the Philippines.
MR. ROMULO. Yes.
MR. OPLE. May I be recognized, Mr.
Presiding Officer, since my name has
been mentioned by both sides.
MR. ROMULO. I yield part of my time.
THE PRESIDING OFFICER
(Mr.Trenas). Commissioner Ople is
recognized.
MR. OPLE. In connection with the
coverage of the Civil Service Law in
Section 1 (1), may I volunteer some
information that may be helpful both to
the interpellator and to the Committee.
Following the proclamation of martial
law on September 21, 1972, this issue
of the coverage of the Labor Code of the
Philippines and of the Civil Service Law
almost immediately arose. I am, in
particular, referring to the period
following the coming into force and
effect of the Constitution of 1973, where
the Article on the Civil Service was
supposed to take immediate force and
effect. In the case of LUZTEVECO,
there was a strike at the time. This was
a government-controlled and
government-owned corporation. I think it
was owned by the PNOC with just the
minuscule private shares left. So, the
Secretary of Justice at that time,
Secretary Abad Santos, and myself sat
down, and the result of that meeting was
an opinion of the Secretary of Justice
which 9 became binding immediately on
the government that government
corporations with original charters, such
as the GSIS, were covered by the Civil
Service Law and corporations spun off
from the GSIS, which we called second
generation corporations functioning as
private subsidiaries, were covered by
the Labor Code. Samples of such
second generation corporations were
the Philippine Airlines, the Manila
Hotel and the Hyatt. And that demarcation worked very
well. In fact, all of these companies I have mentioned as
examples, except for the Manila Hotel, had collective
bargaining agreements. In the Philippine Airlines, there
were, in fact, three collective bargaining agreements; one,
for the ground people or the PALIA one, for the flight
attendants or the PASAC and one for the pilots of the
ALPAC How then could a corporation like that be covered
by the Civil Service law? But, as the Chairman of the
Committee pointed out, the Supreme Court decision in the
case of NHA vs. Juco unrobed the whole thing.
Accordingly, the Philippine Airlines, the Manila Hotel and
the Hyatt are now considered under that decision covered
by the Civil Service Law. I also recall that in the
emergency meeting of the Cabinet convened for this
purpose at the initiative of the Chairman of the
Reorganization Commission, Armand Fabella, they agreed
to allow the CBA's to lapse before applying the full force
and effect of the Supreme Court decision. So, we were in
the awkward situation when the new government took
over. I can agree with Commissioner Romulo when he
said that this is a problem which I am not exactly sure we
should address in the deliberations on the Civil Service
Law or whether we should be content with what the
Chairman said that Section 1 (1) of the Article on the Civil
Service is just a general description of the coverage of the
Civil Service and no more.
Thank you, Mr. Presiding Officer.
MR. ROMULO. Mr. Presiding Officer, for
the moment, I would be satisfied if the
Committee puts on records that it is not
their intent by this provision and the
phrase "including government-owned or
controlled corporations" to cover such
companies as the Philippine Airlines.
MR. FOZ. Personally, that is my view.
As a matter of fact, when this draft was
made, my proposal was really to
eliminate, to drop from the provision, the
phrase "including government- owned or
controlled corporations."
MR. ROMULO. Would the Committee
indicate that is the intent of this
provision?
MR. MONSOD. Mr. Presiding Officer, I
do not think the Committee can make
such a statement in the face of an
absolute exclusion of government-
owned or controlled corporations.
However, this does not preclude the
Civil Service Law to prescribe different
rules and procedures, including
emoluments for employees of
proprietary corporations, taking into
consideration the nature of their
operations. So, it is a general coverage
but it does not preclude a distinction of
the rules between the two types of
enterprises.
MR. FOZ. In other words, it is something
that should be left to the legislature to
decide. As I said before, this is just a
general description and we are not
making any declaration whatsoever.
MR. MONSOD. Perhaps if
Commissioner Romulo would like a
definitive understanding of the coverage
and the Gentleman wants to exclude
government-owned or controlled
corporations like Philippine Airlines, then
the recourse is to offer an amendment
as to the coverage, if the Commissioner
does not accept the explanation that
there could be a distinction of the rules,
including salaries and emoluments.
MR. ROMULO. So as not to delay the
proceedings, I will reserve my right to
submit such an amendment.
xxx xxx xxx
THE PRESIDING OFFICE (Mr. Trenas)
Commissioner Romulo is recognized.
MR. ROMULO. On page 2, line 5, I
suggest the following amendment after
"corporations": Add a comma (,) and the
phrase EXCEPT THOSE EXERCISING
PROPRIETARY FUNCTIONS.
THE PRESIDING OFFICER (Mr.
Trenas). What does the Committee say?
SUSPENSION OF SESSION
MR. MONSOD. May we have a
suspension of the session?
 THE PRESIDING OFFICER (Mr.
Trenas). The session is suspended.
It was 7:16 p.m.
RESUMPTION OF SESSION
At 7:21 p.m., the session was resumed.
THE PRESIDING OFFICER (Mr. Trenas). The session is
resumed.
Commissioner Romulo is recognized.
MR. ROMULO. Mr. Presiding Officer, I am amending my
original proposed amendment to now read as follows:
"including government-owned or controlled corporations
WITH ORIGINAL CHARTERS." The purpose of this
amendment is to indicate that government corporations
such as the GSIS and SSS, which have original charters,
fall within the ambit of the civil service. However,
corporations which are subsidiaries of these chartered
agencies such as the Philippine Airlines, Manila Hotel and
Hyatt are excluded from the coverage of the civil service.
THE PRESIDING OFFICER (Mr.
Trenas). What does the Committee say?
MR. FOZ. Just one question, Mr.
Presiding Officer. By the term "original
charters," what exactly do we mean?
MR. ROMULO. We mean that they were
created by law, by an act of Congress,
or by special law.
MR. FOZ. And not under the general
corporation law.
MR. ROMULO. That is correct. Mr.
Presiding Officer.
MR. FOZ. With that understanding and
clarification, the Committee accepts the
amendment.
MR. NATIVIDAD. Mr. Presiding officer,
so those created by the general
corporation law are out.
MR. ROMULO. That is correct: 38
On the premise that it is the 1987 Constitution that governs the instant case
because it is the Constitution in place at the time of decision thereof, the
NLRC has jurisdiction to accord relief to the parties. As an admitted
subsidiary of the NIDC, in turn a subsidiary of the PNB, the NASECO is a
government-owned or controlled corporation without original charter.
Dr. Jorge Bocobo, in his Cult of Legalism, cited by Mr. Justice Perfecto in his
concurring opinion in Gomez vs. Government Insurance Board (L-602,
March 31, 1947, 44 O.G. No. 8, pp. 2687, 2694; also published in 78 Phil.
221) on the effectivity of the principle of social justice embodied in the 1935
Constitution, said:
Certainly, this principle of social justice in our Constitution
as generously conceived and so tersely phrased, was not
included in the fundamental law as a mere popular
gesture. It was meant to (be) a vital, articulate, compelling
principle of public policy. It should be observed in the
interpretation not only of future legislation, but also of all
laws already existing on November 15, 1935. It was
intended to change the spirit of our laws, present and
future. Thus, all the laws which on the great historic event
when the Commonwealth of the Philippines was born,
were susceptible of two interpretations strict or liberal,
against or in favor of social justice, now have to be
construed broadly in order to promote and achieve social
justice. This may seem novel to our friends, the advocates
of legalism but it is the only way to give life and
significance to the above-quoted principle of the
Constitution. If it was not designed to apply to these
existing laws, then it would be necessary to wait for
generations until all our codes and all our statutes shall
have been completely charred by removing every
provision inimical to social justice, before the policy of
 social justice can become really effective. That would be
an absurd conclusion. It is more reasonable to hold that
this constitutional principle applies to all legislation in force
on November 15, 1935, and all laws thereafter passed.

WHEREFORE, in view of the foregoing, the challenged decision of the

NLRC is AFFIRMED with modifications. Petitioners in G.R. No. 69870, who
are the private respondents in G.R. No. 70295, are ordered to: 1) reinstate
Eugenia C. Credo to her former position at the time of her termination, or if
such reinstatement is not possible, to place her in a substantially equivalent
position, with three (3) years backwages, from 1 December 1983, without
qualification or deduction, and without loss of seniority rights and other
privileges appertaining thereto, and 2) pay Eugenia C. Credo P5,000.00 for
moral damages and P5,000.00 for attorney's fees.

If reinstatement in any event is no longer possible because of supervening

events, petitioners in G.R. No. 69870, who are the private respondents in
G.R. No. 70295 are ordered to pay Eugenia C. Credo, in addition to her
backwages and damages as above described, separation pay equivalent to
one-half month's salary for every year of service, to be computed on her
monthly salary at the time of her termination on 1 December 1983.

SO ORDERED.
G.R. No. 85279 July 28, 1989
SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA),
DIONISION T. BAYLON, RAMON MODESTO, JUANITO MADURA,
REUBEN ZAMORA, VIRGILIO DE ALDAY, SERGIO ARANETA, PLACIDO
AGUSTIN, VIRGILIO MAGPAYO, petitioner,
vs.
THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON.
CEZAR C. PERALEJO, RTC, BRANCH 98, QUEZON CITY, respondents.
Vicente T. Ocampo & Associates for petitioners.
CORTES, J:
Primarily, the issue raised in this petition is whether or not the Regional Trial
Court can enjoin the Social Security System Employees Association
(SSSEA) from striking and order the striking employees to return to work.
Collaterally, it is whether or not employees of the Social Security System
(SSS) have the right to strike.
The antecedents are as follows:
On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon
City a complaint for damages with a prayer for a writ of preliminary injunction
against petitioners, alleging that on June 9, 1987, the officers and members
of SSSEA staged an illegal strike and baricaded the entrances to the SSS
Building, preventing non-striking employees from reporting for work and SSS
members from transacting business with the SSS; that the strike was
reported to the Public Sector Labor - Management Council, which ordered
the strikers to return to work; that the strikers refused to return to work; and
that the SSS suffered damages as a result of the strike. The complaint
prayed that a writ of preliminary injunction be issued to enjoin the strike and
that the strikers be ordered to return to work; that the defendants (petitioners
herein) be ordered to pay damages; and that the strike be declared illegal.
It appears that the SSSEA went on strike after the SSS failed to act on the
union's demands, which included: implementation of the provisions of the old
SSS-SSSEA collective bargaining agreement (CBA) on check-off of union
dues; payment of accrued overtime pay, night differential pay and holiday
pay; conversion of temporary or contractual employees with six (6) months
or more of service into regular and permanent employees and their
entitlement to the same salaries, allowances and benefits given to other
regular employees of the SSS; and payment of the children's allowance of
P30.00, and after the SSS deducted certain amounts from the salaries of the
employees and allegedly committed acts of discrimination and unfair labor
practices [Rollo, pp. 21-241].
The court a quo, on June 11, 1987, issued a temporary restraining order
pending resolution of the application for a writ of preliminary injunction [Rollo,
p. 71.] In the meantime, petitioners filed a motion to dismiss alleging the trial
court's lack of jurisdiction over the subject matter [Rollo, pp. 72-82.] To this
motion, the SSS filed an opposition, reiterating its prayer for the issuance of
a writ of injunction [Rollo, pp. 209-222]. On July 22,1987, in a four-page
order, the court a quo denied the motion to dismiss and converted the
restraining order into an injunction upon posting of a bond, after finding that
the strike was illegal [Rollo, pp. 83- 86]. As petitioners' motion for the
reconsideration of the aforesaid order was also denied on August 14, 1988
[Rollo, p. 94], petitioners filed a petition for certiorari and prohibition with
preliminary injunction before this Court. Their petition was docketed as G.R.
No. 79577. In a resolution dated October 21, 1987, the Court, through the
Third Division, resolved to refer the case to the Court of Appeals. Petitioners
filed a motion for reconsideration thereof, but during its pendency the Court
of Appeals on March 9,1988 promulgated its decision on the referred case
[Rollo, pp. 130-137]. Petitioners moved to recall the Court of Appeals'
decision. In the meantime, the Court on June 29,1988 denied the motion for
reconsideration in G.R. No. 97577 for being moot and academic. Petitioners'
motion to recall the decision of the Court of Appeals was also denied in view
of this Court's denial of the motion for reconsideration [Rollo, pp. 141- 143].
Hence, the instant petition to review the decision of the Court of Appeals
[Rollo, pp. 12-37].
Upon motion of the SSS on February 6,1989, the Court issued a temporary
restraining order enjoining the petitioners from staging another strike or from
pursuing the notice of strike they filed with the Department of Labor and
Employment on January 25, 1989 and to maintain the status quo [Rollo, pp.
151-152].
The Court, taking the comment as answer, and noting the reply and
supplemental reply filed by petitioners, considered the issues joined and the
case submitted for decision.
The position of the petitioners is that the Regional Trial Court had no
jurisdiction to hear the case initiated by the SSS and to issue the restraining
order and the writ of preliminary injunction, as jurisdiction lay with the
Department of Labor and Employment or the National Labor Relations
Commission, since the case involves a labor dispute.
On the other hand, the SSS advances the contrary view, on the ground that
the employees of the SSS are covered by civil service laws and rules and
regulations, not the Labor Code, therefore they do not have the right to
strike. Since neither the DOLE nor the NLRC has jurisdiction over the
dispute, the Regional Trial Court may enjoin the employees from striking.
In dismissing the petition for certiorari and prohibition with preliminary
injunction filed by petitioners, the Court of Appeals held that since the
employees of the SSS, are government employees, they are not allowed to
strike, and may be enjoined by the Regional Trial Court, which had
jurisdiction over the SSS' complaint for damages, from continuing with their
strike.
Thus, the sequential questions to be resolved by the Court in deciding
whether or not the Court of Appeals erred in finding that the Regional Trial
Court did not act without or in excess of jurisdiction when it took cognizance
of the case and enjoined the strike are as follows:
1. Do the employees of the SSS have the right to strike?
2. Does the Regional Trial Court have jurisdiction to hear the case initiated
by the SSS and to enjoin the strikers from continuing with the strike and to
order them to return to work?
These shall be discussed and resolved seriatim
I the Bill of Rights, there is a provision that the right to form
The 1987 Constitution, in the Article on Social Justice and Human Rights,
provides that the State "shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law" [Art. XIII, Sec.
31].
By itself, this provision would seem to recognize the right of all workers and
employees, including those in the public sector, to strike. But the Constitution
itself fails to expressly confirm this impression, for in the Sub-Article on the
Civil Service Commission, it provides, after defining the scope of the civil
service as "all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with
original charters," that "[t]he right to self-organization shall not be denied to
government employees" [Art. IX(B), Sec. 2(l) and (50)]. Parenthetically, the
Bill of Rights also provides that "[tlhe right of the people, including those
employed in the public and private sectors, to form unions, associations, or
societies for purposes not contrary to law shall not abridged" [Art. III, Sec. 8].
Thus, while there is no question that the Constitution recognizes the right of
government employees to organize, it is silent as to whether such
recognition also includes the right to strike.
Resort to the intent of the framers of the organic law becomes helpful in
understanding the meaning of these provisions. A reading of the
proceedings of the Constitutional Commission that drafted the 1987
Constitution would show that in recognizing the right of government
employees to organize, the commissioners intended to limit the right to the
formation of unions or associations only, without including the right to strike.
Thus, Commissioner Eulogio R. Lerum, one of the sponsors of the provision
that "[tlhe right to self-organization shall not be denied to government
employees" [Art. IX(B), Sec. 2(5)], in answer to the apprehensions
expressed by Commissioner Ambrosio B. Padilla, Vice-President of the
Commission, explained:
MR. LERUM. I think what I will try to say will not take that
long. When we proposed this amendment providing for
self-organization of government employees, it does not
mean that because they have the right to organize, they
also have the right to strike. That is a different matter. We
are only talking about organizing, uniting as a union. With
regard to the right to strike, everyone will remember that in
associations or societies whose purpose is not contrary to
law shall not be abridged. Now then, if the purpose of the
state is to prohibit the strikes coming from employees
exercising government functions, that could be done
because the moment that is prohibited, then the union
which will go on strike will be an illegal union. And that
provision is carried in Republic Act 875. In Republic Act
875, workers, including those from the government-owned
and controlled, are allowed to organize but they are
prohibited from striking. So, the fear of our honorable Vice-
President is unfounded. It does not mean that because we
approve this resolution, it carries with it the right to strike.
 That is a different matter. As a matter of fact, that subject
is now being discussed in the Committee on Social Justice
because we are trying to find a solution to this problem.
We know that this problem exist; that the moment we allow
anybody in the government to strike, then what will happen
if the members of the Armed Forces will go on strike?
What will happen to those people trying to protect us? So
that is a matter of discussion in the Committee on Social
Justice. But, I repeat, the right to form an organization
does not carry with it the right to strike. [Record of the
Constitutional Commission, vol. 1, p. 569].
It will be recalled that the Industrial Peace Act (R.A. No. 875), which was
repealed by the Labor Code (P.D. 442) in 1974, expressly banned strikes by
employees in the Government, including instrumentalities exercising
governmental functions, but excluding entities entrusted with proprietary
functions:
.Sec. 11. Prohibition Against Strikes in the Government.
The terms and conditions of employment in the
Government, including any political subdivision or
instrumentality thereof, are governed by law and it is
declared to be the policy of this Act that employees therein
shall not strike for the purpose of securing changes or
modification in their terms and conditions of employment.
Such employees may belong to any labor organization
which does not impose the obligation to strike or to join in
strike: Provided, however, That this section shall apply
only to employees employed in governmental functions
and not those employed in proprietary functions of the
Government including but not limited to governmental
corporations.
No similar provision is found in the Labor Code, although at one time it
recognized the right of employees of government corporations established
under the Corporation Code to organize and bargain collectively and those in
the civil service to "form organizations for purposes not contrary to law" [Art.
244, before its amendment by B.P. Blg. 70 in 1980], in the same breath it
provided that "[t]he terms and conditions of employment of all government
employees, including employees of government owned and controlled
corporations, shall be governed by the Civil Service Law, rules and
regulations" [now Art. 276]. Understandably, the Labor Code is silent as to
whether or not government employees may strike, for such are excluded
from its coverage [Ibid]. But then the Civil Service Decree [P.D. No. 807], is
equally silent on the matter.
On June 1, 1987, to implement the constitutional guarantee of the right of
government employees to organize, the President issued E.O. No. 180
which provides guidelines for the exercise of the right to organize of
government employees. In Section 14 thereof, it is provided that "[t]he Civil
Service law and rules governing concerted activities and strikes in the
government service shall be observed, subject to any legislation that may be
enacted by Congress." The President was apparently referring to
Memorandum Circular No. 6, s. 1987 of the Civil Service Commission under
date April 21, 1987 which, "prior to the enactment by Congress of applicable
laws concerning strike by government employees ... enjoins under pain of
administrative sanctions, all government officers and employees from
staging strikes, demonstrations, mass leaves, walk-outs and other forms of
mass action which will result in temporary stoppage or disruption of public
service." The air was thus cleared of the confusion. At present, in the
absence of any legislation allowing government employees to strike,
recognizing their right to do so, or regulating the exercise of the right, they
are prohibited from striking, by express provision of Memorandum Circular
No. 6 and as implied in E.O. No. 180. [At this juncture, it must be stated that
the validity of Memorandum Circular No. 6 is not at issue].
But are employees of the SSS covered by the prohibition against strikes?
The Court is of the considered view that they are. Considering that under the
1987 Constitution "[t]he civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including government-
owned or controlled corporations with original charters" [Art. IX(B), Sec. .2(l)
see also Sec. 1 of E.O. No. 180 where the employees in the civil service are
denominated as "government employees"] and that the SSS is one such
government-controlled corporation with an original charter, having been
created under R.A. No. 1161, its employees are part of the civil service
[NASECO v. NLRC, G.R. Nos. 69870 & 70295, November 24,1988] and are
covered by the Civil Service Commission's memorandum prohibiting strikes.
This being the case, the strike staged by the employees of the SSS was
illegal.
The statement of the Court in Alliance of Government Workers v. Minister of
Labor and Employment [G.R. No. 60403, August 3, 1:983, 124 SCRA 11 is
relevant as it furnishes the rationale for distinguishing between workers in
the private sector and government employees with regard to the right to
strike:
 The general rule in the past and up to the present is that
'the terms and conditions of employment in the
Government, including any political subdivision or
instrumentality thereof are governed by law" (Section 11,
the Industrial Peace Act, R.A. No. 875, as amended and
Article 277, the Labor Code, P.D. No. 442, as
amended). Since the terms and conditions of government
employment are fixed by law, government workers cannot
use the same weapons employed by workers in the private
sector to secure concessions from their employers. The
principle behind labor unionism in private industry is that
industrial peace cannot be secured through compulsion by
law. Relations between private employers and their
employees rest on an essentially voluntary basis. Subject
to the minimum requirements of wage laws and other labor
and welfare legislation, the terms and conditions of
employment in the unionized private sector are settled
through the process of collective bargaining. In
government employment, however, it is the legislature
and, where properly given delegated power, the
administrative heads of government which fix the terms
and conditions of employment. And this is effected through
statutes or administrative circulars, rules, and regulations,
not through collective bargaining agreements. [At p. 13;
Emphasis supplied].
Apropos is the observation of the Acting Commissioner of Civil Service, in
his position paper submitted to the 1971 Constitutional Convention, and
quoted with approval by the Court in Alliance, to wit:
It is the stand, therefore, of this Commission that by
reason of the nature of the public employer and the
peculiar character of the public service, it must necessarily
regard the right to strike given to unions in private industry
as not applying to public employees and civil service
employees. It has been stated that the Government, in
contrast to the private employer, protects the interest of all
people in the public service, and that accordingly, such
conflicting interests as are present in private labor
relations could not exist in the relations between
government and those whom they employ. [At pp. 16-17;
also quoted in National Housing Corporation v. Juco, G.R.
No. 64313, January 17,1985,134 SCRA 172,178-179].
E.O. No. 180, which provides guidelines for the exercise of the right to
organize of government employees, while clinging to the same philosophy,
has, however, relaxed the rule to allow negotiation where the terms and
conditions of employment involved are not among those fixed by law. Thus:
.SECTION 13. Terms and conditions of employment or
improvements thereof, except those that are fixed by law,
may be the subject of negotiations between duly
recognized employees' organizations and appropriate
government authorities.
The same executive order has also provided for the general mechanism for
the settlement of labor disputes in the public sector to wit:
.SECTION 16. The Civil Service and labor laws and
procedures, whenever applicable, shall be followed in the
resolution of complaints, grievances and cases involving
government employees. In case any dispute remains
unresolved after exhausting all the available remedies
under existing laws and procedures, the parties may jointly
refer the dispute to the [Public Sector Labor- Management]
Council for appropriate action.
Government employees may, therefore, through their unions or associations,
either petition the Congress for the betterment of the terms and conditions of
employment which are within the ambit of legislation or negotiate with the
appropriate government agencies for the improvement of those which are
not fixed by law. If there be any unresolved grievances, the dispute may be
referred to the Public Sector Labor - Management Council for appropriate
action. But employees in the civil service may not resort to strikes, walk-outs
and other temporary work stoppages, like workers in the private sector, to
pressure the Govemment to accede to their demands. As now provided
under Sec. 4, Rule III of the Rules and Regulations to Govern the Exercise
of the Right of Government- Employees to Self- Organization, which took
effect after the instant dispute arose, "[t]he terms and conditions of
employment in the government, including any political subdivision or
instrumentality thereof and government- owned and controlled corporations
with original charters are governed by law and employees therein shall not
strike for the purpose of securing changes thereof."
II
The strike staged by the employees of the SSS belonging to petitioner union salaries, year-end bonuses and other fringe benefits and affirmed the
being prohibited by law, an injunction may be issued to restrain it. previous order of the Merit Systems Promotion Board.

It is futile for the petitioners to assert that the subject labor dispute falls within The matter being extraneous to the issues elevated to this Court, it is Our
the exclusive jurisdiction of the NLRC and, hence, the Regional Trial Court view that petitioners' remedy is not to petition this Court to issue an
had no jurisdiction to issue a writ of injunction enjoining the continuance of injunction, but to cause the execution of the aforesaid order, if it has already
the strike. The Labor Code itself provides that terms and conditions of become final.
employment of government employees shall be governed by the Civil
Service Law, rules and regulations [Art. 276]. More importantly, E.O. No. 180 WHEREFORE, no reversible error having been committed by the Court of
vests the Public Sector Labor - Management Council with jurisdiction over Appeals, the instant petition for review is hereby DENIED and the decision of
unresolved labor disputes involving government employees [Sec. 16]. the appellate court dated March 9, 1988 in CA-G.R. SP No. 13192 is
Clearly, the NLRC has no jurisdiction over the dispute. AFFIRMED. Petitioners' "Petition/Application for Preliminary and Mandatory
Injunction" dated December 13,1988 is DENIED.
This being the case, the Regional Trial Court was not precluded, in the
exercise of its general jurisdiction under B.P. Blg. 129, as amended, from SO ORDERED.
assuming jurisdiction over the SSS's complaint for damages and issuing the
injunctive writ prayed for therein. Unlike the NLRC, the Public Sector Labor -
Management Council has not been granted by law authority to issue writs of
injunction in labor disputes within its jurisdiction. Thus, since it is the Council,
and not the NLRC, that has jurisdiction over the instant labor dispute, resort
to the general courts of law for the issuance of a writ of injunction to enjoin
the strike is appropriate.

Neither could the court a quo be accused of imprudence or

overzealousness, for in fact it had proceeded with caution. Thus, after
issuing a writ of injunction enjoining the continuance of the strike to prevent
any further disruption of public service, the respondent judge, in the same
order, admonished the parties to refer the unresolved controversies
emanating from their employer- employee relationship to the Public Sector
Labor - Management Council for appropriate action [Rollo, p. 86].

III

In their "Petition/Application for Preliminary and Mandatory Injunction," and

reiterated in their reply and supplemental reply, petitioners allege that the
SSS unlawfully withheld bonuses and benefits due the individual petitioners
and they pray that the Court issue a writ of preliminary prohibitive and
mandatory injunction to restrain the SSS and its agents from withholding
payment thereof and to compel the SSS to pay them. In their supplemental
reply, petitioners annexed an order of the Civil Service Commission, dated
May 5, 1989, which ruled that the officers of the SSSEA who are not
preventively suspended and who are reporting for work pending the
resolution of the administrative cases against them are entitled to their
G.R. Nos. L-58674-77 July 11, 1990
PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. DOMINGO PANIS, Presiding Judge of the Court of First Instance
of Zambales & Olongapo City, Branch III and SERAPIO
ABUG, respondents.
CRUZ, J:
The basic issue in this case is the correct interpretation of Article 13(b) of
P.D. 442, otherwise known as the Labor Code, reading as follows:
(b) Recruitment and placement' refers to any act of
canvassing, enlisting, contracting, transporting, hiring, or
procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally
or abroad, whether for profit or not: Provided, That any
person or entity which, in any manner, offers or promises
for a fee employment to two or more persons shall be
deemed engaged in recruitment and placement.
Four informations were filed on January 9, 1981, in the Court of First
Instance of Zambales and Olongapo City alleging that Serapio Abug, private
respondent herein, "without first securing a license from the Ministry of Labor
as a holder of authority to operate a fee-charging employment agency, did
then and there wilfully, unlawfully and criminally operate a private fee
charging employment agency by charging fees and expenses (from) and
promising employment in Saudi Arabia" to four separate individuals named
therein, in violation of Article 16 in relation to Article 39 of the Labor Code. 1
Abug filed a motion to quash on the ground that the informations did not
charge an offense because he was accused of illegally recruiting only one
person in each of the four informations. Under the proviso in Article 13(b), he
claimed, there would be illegal recruitment only "whenever two or more
persons are in any manner promised or offered any employment for a fee. " 2
Denied at first, the motion was reconsidered and finally granted in the Orders
of the trial court dated June 24 and September 17, 1981. The prosecution is
now before us on certiorari. 3
The posture of the petitioner is that the private respondent is being
prosecuted under Article 39 in relation to Article 16 of the Labor Code;
hence, Article 13(b) is not applicable. However, as the first two cited articles
penalize acts of recruitment and placement without proper authority, which is
the charge embodied in the informations, application of the definition of
recruitment and placement in Article 13(b) is unavoidable.
The view of the private respondents is that to constitute recruitment and
placement, all the acts mentioned in this article should involve dealings with
two or mre persons as an indispensable requirement. On the other hand,
the petitioner argues that the requirement of two or more persons is imposed
only where the recruitment and placement consists of an offer or promise of
employment to such persons and always in consideration of a fee. The other
acts mentioned in the body of the article may involve even only one person
and are not necessarily for profit.
Neither interpretation is acceptable. We fail to see why the proviso should
speak only of an offer or promise of employment if the purpose was to apply
the requirement of two or more persons to all the acts mentioned in the basic
rule. For its part, the petitioner does not explain why dealings with two or
more persons are needed where the recruitment and placement consists of
an offer or promise of employment but not when it is done through
"canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring
(of) workers.
As we see it, the proviso was intended neither to impose a condition on the
basic rule nor to provide an exception thereto but merely to create a
presumption. The presumption is that the individual or entity is engaged in
recruitment and placement whenever he or it is dealing with two or more
persons to whom, in consideration of a fee, an offer or promise of
employment is made in the course of the "canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring (of) workers. "
The number of persons dealt with is not an essential ingredient of the act of
recruitment and placement of workers. Any of the acts mentioned in the
basic rule in Article 13(b) win constitute recruitment and placement even if
only one prospective worker is involved. The proviso merely lays down a rule
of evidence that where a fee is collected in consideration of a promise or
offer of employment to two or more prospective workers, the individual or
entity dealing with them shall be deemed to be engaged in the act of
recruitment and placement. The words "shall be deemed" create that
presumption.
This is not unlike the presumption in article 217 of the Revised Penal Code,
for example, regarding the failure of a public officer to produce upon lawful
demand funds or property entrusted to his custody. Such failure shall
be prima facie evidence that he has put them to personal use; in other
words, he shall be deemed to have malversed such funds or property. In the
instant case, the word "shall be deemed" should by the same token be given
the force of a disputable presumption or of prima facie evidence of engaging
in recruitment and placement. (Klepp vs. Odin Tp., McHenry County 40 ND
N.W. 313, 314.)

It is unfortunate that we can only speculate on the meaning of the

questioned provision for lack of records of debates and deliberations that
would otherwise have been available if the Labor Code had been enacted as
a statute rather than a presidential decree. The trouble with presidential
decrees is that they could be, and sometimes were, issued without previous
public discussion or consultation, the promulgator heeding only his own
counsel or those of his close advisers in their lofty pinnacle of power. The
not infrequent results are rejection, intentional or not, of the interest of the
greater number and, as in the instant case, certain esoteric provisions that
one cannot read against the background facts usually reported in the
legislative journals.

At any rate, the interpretation here adopted should give more force to the
campaign against illegal recruitment and placement, which has victimized
many Filipino workers seeking a better life in a foreign land, and investing
hard- earned savings or even borrowed funds in pursuit of their dream, only
to be awakened to the reality of a cynical deception at the hands of theirown
countrymen.

WHEREFORE, the Orders of June 24, 1981, and September 17, 1981, are
set aside and the four informations against the private respondent reinstated.
No costs.

SO ORDERED.