G.R. No. L-69870 November 29, 1988 NATIONAL SERVICE CORPORATION (NASECO) AND ARTURO L.

PEREZ, petitioners,
vs.THE HONORABLE THIRD DIVISION, NATIONAL LABOR RELATIONS COMMISSION, MINISTRY OF LABOR AND
EMPLOYMENT, MANILA AND EUGENIA C. CREDO, respondents

Eugenia C. Credo was an employee of the National Service Corporation (NASECO), a domestic corporation
which provides security guards as well as messengerial, janitorial and other similar manpower services to the
Philippine National Bank (PNB) and its agencies. She was first employed as a lady guard .Through the years,
she was promoted to Clerk Typist, then Personnel Clerk until she became Chief of Property and
Records.However,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
memorandum, regarding certain entry procedures in the company's Statement of Billings Adjustment. and when
[Credo] was called by Lloren to his office to explain further the said instructions, [Credo] showed resentment
and behaved in a scandalous manner by shouting and uttering remarks of disrespect in the presence of her co-
employees." Afterwhich, Credo was called to meet Arturo L. Perez, then Acting 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 date, Credo was placed on "Forced
Leave" status for 1 5 days, effective 8 November 1983. 3Before 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 Branch,
National Capital Region, Ministry of Labor and Employment, Manila, against NASECO for placing her on
forced leave, without due process. 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. 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 National Labor
Relations Commission (NLRC) 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

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.

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.

G.R. No. 86773 February 14, 1992 SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-AQUACULTURE DEPARTMENT
(SEAFDEC-AQD), DR. FLOR LACANILAO (CHIEF), RUFIL vs. NATIONAL LABOR RELATIONS COMMISSION and JUVENAL
LAZAGA, respondents. CUEVAS (HEAD, ADMINISTRATIVE DIV.), BEN DELOS REYES (FINANCE OFFICER), petitioners,

SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries Development

Center, organized through an agreement entered into in Bangkok, Thailand. private respondent Juvenal Lazaga
was employed as a Research Associate an a probationary basis by the SEAFDEC-AQD and was appointed
Senior External Affairs Officer on January 5, 1983 with a monthly basic salary of P8,000.00 and a monthly
allowance of P4,000.00. Thereafter, he was appointed to the position of Professional III and designated as Head
of External Affairs Office with the same pay and benefits. On May 8, 1986, petitioner Lacanilao in his capacity
as Chief of SEAFDEC-AQD sent a notice of termination to private respondent informing him that due to the
financial constraints being experienced by the department, his services shall be terminated at the close of office
hours on May 15, 1986 and that he is entitled to separation benefits equivalent to one (1) month of his basic
salary for every year of service plus other benefits (Rollo, p. 153).

Upon petitioner SEAFDEC-AQD's failure to pay private respondent his separation pay, the latter filed on
March 18, 1987 a complaint against petitioners for non-payment of separation benefits plus moral damages and
attorney's fees with the Arbitration Branch of the NLRC (Annex "C" of Petition for Certiorari). Petitioners in
their answer with counterclaim alleged that the NLRC has no jurisdiction over the case inasmuch as the
SEAFDEC-AQD is an international organization and that private respondent must first secure clearances from
the proper departments for property or money accountability before any claim for separation pay will be paid,
and which clearances had not yet been obtained by the private respondent. the labor arbiter rendered a decision,
the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered ordering respondents:

1. To pay complainant P126,458.89, plus legal interest thereon computed from May 16, 1986
until full payment thereof is made, as separation pay and other post-employment benefits;

2. To pay complainant actual damages in the amount of P50,000, plus 10% attorney's fees.

All other claims are hereby dismissed.

Thereafter, petitioners instituted this petition for certiorari alleging that the NLRC has no jurisdiction to hear
and decide respondent Lazaga's complaint since SEAFDEC-AQD is immune from suit owing to its
international character and the complaint is in effect a suit against the State which cannot be maintained without
its consent.

WHEREFORE, finding SEAFDEC-AQD to be an international agency beyond the jurisdiction of the courts or
local agency of the Philippine government, the questioned decision and resolution of the NLRC dated July 26,
1988 and January 9, 1989, respectively, are hereby REVERSED and SET ASIDE for having been rendered
without jurisdiction. No costs.

G.R. No. 158539, January 15, 2009 INDUSTRIAL & TRANSPORT EQUIPMENT,INC.and/or RAYMOND JARINA,
Petitioners, vs. TOMAS TUGADE and CRESENCIO TUGADE, Respondents.

Petitioner is a corporation engaged in the business of motor vehicle repair. Private

respondents, Tomas Tugade and his brother Cresencio Tugade, were hired on November 14,
1978 and on May 11, 1984, respectively, by petitioner corporation. Tomas was employed as a
diesel mechanic, while Cresencio was the officer-in-charge at petitioners shop
on Visayas Avenue.

On March 28, 1998, Felix P. Broqueza, petitioners Personnel and Administration

Manager issued a memorandum against Engr. Fernando Fabros and respondents Tomas
and Cresencio Tugade, suspending them for ten (10) working days from March 30, 1998 to April
11, 1998 for disobedience, incompetence and gross negligence. The memorandum stated, among
others, that the three employees released the vehicle to Mr. Cabel, despite the instructions made
by the Company president not to release the same, unless and until he made full settlement of his
obligation which remained unpaid since 1996.After the lapse of ten (10) days suspension or
on April 12, 1998, the Tugades allegedly did not report for work and were considered absent
without leave. On April 13, 1998, another memorandum was issued by Felix Broqueza directing
him to make the necessary explanation why he failed to report for work. On April 16, 1996,
however, the Tugades filed a complaint for illegal dismissal with prayer for payment of
separation pay in lieu of reinstatement, backwages and damages against petitioner.[1]
On September 28, 1998, Labor Arbiter Potenciano S. Caezares rendered his Decision,
dismissing the complaint for lack of merit but awarding separation pay of P56,680,
the dispositive portion of which reads:

Both parties appealed the decision of the Labor Arbiter to the NLRC which rendered a decision on July
30, 1999 that reversed the Labor Arbiter by ruling that respondents were illegally dismissed and ordering
payment of backwages and separation pay. The motion for reconsideration filed by petitioners was also denied
by the NLRC in a Resolution dated September 20, 1999.The Court of Appeals, as stated, affirmed the NLRC
decision.

On July 8, 2003, petitioners filed the present petition for review on certiorari with prayer for the
issuance of a temporary restraining order and/or writ of preliminary injunction assailing the Decision and
Resolution of the Court of Appeals.

THE COURT OF APPEALS SERIOUSLY ERRED IN DECLARING THAT RESPONDENTS

WERE ILLEGALLY DISMISSED FROM EMPLOYMENT.

II
 THE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE PAYMENT OF
BACKWAGES AND SEPARATION PAY TO RESPONDENTS.

Dismissal connotes a permanent severance or complete separation of the worker from the service on the
initiative of the employer regardless of the reasons therefor.[2] Based on the foregoing, it can hardly be said that
respondents were dismissed from employment rather than merely temporarily suspended. Nowhere in the
proceedings or pleadings filed before the Labor Arbiter or the NLRC did respondents dispute that they were
merely suspended from March 30, 1998 to April 11, 1998. As shown by the contents of the memorandum
issued to respondents, they were not dismissed but merely suspended from employment.

This piece of evidence clearly disproves the finding of the Court of Appeals that respondents were
terminated from employment supposedly based on a memorandum prohibiting their entry into the company
premises. A settled exception to the rule generally sustaining the factual determination of the Court of Appeals
is when it disregards a vitalevidence in reaching its finding. This obtains here.

There is also no dispute that petitioners instructed the respondents not to release the vehicle of Mr.
Faustino Cabel unless and until the latter has completely settled his obligations with the company. However,
despite the fact that Mr. Cabel failed to settle his obligations and in clear defiance of the petitioners order,
respondents released the car to Mr. Cabel. Petitioners were clearly acting within their rights in suspending
respondents.

In numerous cases, this Court has sustained the right of employers to exercise their management
prerogatives to discipline erring employees, thus:

However, petitioner loses sight off the fact that the right of an employer to regulate all
aspects of employment is well settled. This right, aptly called management prerogative, gives
employers the freedom to regulate, according to their discretion and best judgment, all aspects of
employment, including work assignment, working methods, processes to be followed, working
regulations, transfer of employees, work supervision, lay-off of workers and the discipline,
dismissal and recall of workers. In general, management has the prerogative to discipline its
employees and to impose appropriate penalties on erring workers pursuant to company rules and
regulations.[3]

Therefore, the complaint for illegal dismissal filed by respondents was premature, since even after the
expiration of their suspension period, they refused, despite due notice, to report to work. In fact, in their
Memorandum of Appeal, respondents admitted having received petitioners return-to-work memorandum which,
however, became futile because they hastily filed the complaint for illegal dismissal.

Since there was no dismissal to speak of, there is no basis to award any backwages to
respondents. Under Article 279 of the Labor Code, an employee is entitled to reinstatement and backwages only
if he was illegally dismissed.

The decision of the Labor Arbiter is, therefore, sustained, finding that respondents abandoned their
positions by failing to return to work despite management directives to do so, and awarding separation pay
of P56,680 each to respondents.

Nevertheless, this Court agrees with the Court of Appeals that petitioners failed to follow the
requirements of notices after respondents abandoned their positions.Respondents are therefore entitled to an
additional award of P30,000 each in accordance with the doctrine in the Agabon[4] case.
 WHEREFORE, the Decision dated March 14, 2003 and the Resolution dated May 29, 2003 of the Court
of Appeals are hereby MODIFIED. The decision of the National Labor Relations Commission dated July 30,
1999 is REVERSED and the Decision of the Labor Arbiter dated September 28, 1998 is REINSTATED
with MODIFICATION, awarding separation pay to respondents in the amount of P56,680 each plus P30,000
each in accordance with the Agabon doctrine.

G.R. No. 176085 February 8, 2012 FEDERICO S. ROBOSA, ROLANDO E. PANDY, NOEL D. ROXAS, ALEXANDER ANGELES,
VERONICA GUTIERREZ, FERNANDO EMBAT, and NANETTE H. PINTO, Petitioners, vs.NATIONAL LABOR RELATIONS
COMMISSION (First Division), CHEMO-TECHNISCHE MANUFACTURING, INC. and its responsible officials led by
FRANKLIN R. DE LUZURIAGA, and PROCTER & GAMBLE PHILIPPINES, INC., Respondents.
GR NO.:G.R. No. 176085
DATE: February 8, 2012

PETITIONER: FREDERICO ROBOSA et al.- rank and file employees of respondent, officers of the union
RESPONDENT:Chemo-Technische Manufacturing, Inc. (CTMI) – acquired by Proctor and Gamble

FACTS:
CTMI Employees Union-DFA, led by the petitioners filed a petition for certification election at CTMI to be certified as the
exclusive bargaining agent of the company. It failed to garner the votes required. Later on, respondent issued a
memorandum demobilizing its sales territories and abolishing its system of truck-sales representatives while
simultaneously informing the sales group of a new system(Salon Business Groups). Petitioner union asked for the
withdrawal of respondent’s directives but the latter ignored it. Instead it issued a notice of termination of employment
of sales drivers due to the abolition of their position.
Petitioners filed a complaint for illegal dismissal and unfair labor practices against CTMI, it also moved for the issuance
of a writ of preliminary injunction and/or TRO. During the compulsory arbitration proceedings, the union was prompted
to file it to the NLRC which then issued a TRO. It was upgraded to a writ of preliminary injunction when the respondent
refused to comply. Respondent moved for consideration but was denied by the NLRC who then directed Labor Arbiter
Cristeta Tamayo to hear the motion for contempt as urged by the union.
The NLRC heard the contempt charge but issued its dismissal. Petitioner moved for reconsideration and subsequently
sought relief from the CA. However, the CA opined that the dismissal is not subject to review by an appellate court.
Hence this petition raising the issues.

ISSUE:
(1) whether the NLRC has contempt powers;
(2) whether the dismissal of a contempt charge is appealable; and
(3) whether the NLRC committed grave abuse of discretion in dismissing the contempt charge against the respondents

HELD:

1.) Under Article 218 of the Labor Code, the NLRC (and the labor arbiters) may hold any offending party in contempt,
directly or indirectly, and impose appropriate penalties in accordance with law. The Labor Code, however, requires the
labor arbiter or the Commission to deal with indirect contempt in the manner prescribed under Rule 71 of the Rules of
Court.

Rule 71 of the Rules of Court does not require the labor arbiter or the NLRC to initiate indirect contempt proceedings
before the trial court. This mode is to be observed only when there is no law granting them contempt powers.Article
218(d) of the Labor Code, the labor arbiter or the Commission is empowered or has jurisdiction to hold the offending
party or parties in direct or indirect contempt. The petitioners, therefore, have not improperly brought the indirect
contempt charges against the respondents before the NLRC.

2.) The CA held that the NLRCs dismissal of the contempt charges against the respondents amounts to an acquittal in a
criminal case and is not subject to appeal. This ruling is grounded on prevailing jurisprudence.

The case cited Misonjr. v. Subido where Justice Reyes stressed “the contempt proceeding far from being a civil action is
of a criminal nature and of summary character in which the court exercises but limited jurisdiction. It was then explicitly
held: Hence, as in criminal proceedings, an appeal would not lie from the order of dismissal of, or an exoneration from, a
charge of contempt of court.”

3.) No. The assailed NLRC ruling did not commit grave abuse of discretion. It rightly avoided probing into issues which
would clearly be in excess of its jurisdiction for they are issues involving the merits of the case which are by law within
the original and exclusive jurisdiction of the labor arbiter.The NLRC can inquire into them only on appeal after the merits
of the case shall have been adjudicated by the labor arbiter.An act of a court or tribunal may only be considered as
committed in grave abuse of discretion when it was performed in a capricious or whimsical exercise of judgment which
is equivalent to lack of jurisdiction.

We resolve the petition for review on certiorari[1] seeking the reversal of the resolutions of the Court of Appeals
(CA) rendered on February 24, 2006[2] and December 14, 2006[3] in CA-G.R. SP No. 80436.

G.R. No. 125298 February 11, 1999 CMP FEDERAL SECURITY AGENCY, INC., petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, LABOR ARBITER CRESENCIANO R. INIEGO, and FERNANDO CARANTO, RESTY REMITTERE,
REYNALDO ROSALES, ANTONIO TAPAR, NARCISO CLARO, SIONY MANOS, BALDO VIODOR and DAWAY WAHAB,
respondents.
CMP FEDERAL SECURITY AGENCY INC. seeks in this petition for certiorari to annul, for having been
rendered with grave abuse of discretion amounting to lack or excess of jurisdiction, the 26 October 1995
Decision of the National Labor Relations Commission in NLRC NCR CA 007480-94, Fernando Caranto, et al.
v. CMP Federal Security Agency, Inc., et al.,[1] affirming with modifications the decision of the Labor Arbiter
and ordering herein petitioner to pay private respondents wage differentials, 13th month pay, holiday pay and
service incentive leave pay; and, its Resolution of 29 November 1995 denying reconsideration.
CMP Federal Security Agency Inc. (CMP hereon) is in the business of providing detective and security
services. Among its employees were herein private respondent security guards Fernando Caranto, Resty
Remittere, Reynaldo Rosales, Antonio Tapar, Narciso Claro, Siony Manos, Baldo Viodor and Daway
Wahab,[2] all assigned at the Maalikaya Health Complex in Quezon City.
On 10 March 1994 private respondents filed complaints for illegal deduction, underpayment and/or non-
payment of wages, premium pay for holiday, rest day and night shift differential pay, 13th month pay, service
incentive leave pay, separation pay, allowance and unfair labor practice against CMP, [3] Carolina Mabanta Piao
and Ponciano Mabanta Sr. Private respondent Fernando Caranto later amended his complaint to include illegal
dismissal[4] after he was relieved from his post at the Maalikaya Health Complex by CMP, allegedly upon
request of the client.
The case was initially set for mandatory conference or conciliation on 29 March 1994. It was reset to 11
April 1994 by agreement of the parties to give them adequate time to explore the possibility of amicable
settlement. Thereafter the hearing was reset several times with Labor Arbiter Cresencio R. Iniego directing the
parties each time to submit their respective position papers and other documentary evidence. Efforts at
settlement failed.
When the case was finally called for hearing on 23 May 1994 private respondents filed their position paper
and other documentary evidence in compliance with the Labor Arbiters orders. On the other hand, CMP moved
for another postponement which the Labor Arbiter denied. Thereafter, the case was deemed submitted for
decision. It was only on 13 June 1994 that CMP presented its position paper.
On 22 July 1994 the Labor Arbiter rendered a decision in favor of private respondents ordering CMP to
reinstate Fernando Caranto with full back wages, pay salary differentials to all private respondents, plus
attorneys fees.
Both parties appealed to the NLRC. Private respondents, in their Partial Appeal, alleged that the Labor
Arbiter erred in excluding the awards for service incentive leave pay, holiday pay, overtime pay and illegal
deductions. CMP for its part argued that the Labor Arbiter erred in holding that CMP did not submit any
position paper despite his repeated orders; in ruling that the non-filing of the position paper amounted to an
admission of liability by CMP; and, in deciding the case solely on the basis of the position paper and evidence
submitted by complainants.
In its assailed Decision of 26 October 1995 the NLRC denied CMPs appeal, granted private
respondents Partial Appeal and modified the decision of the Labor Arbiter by including in the computation of
monetary awards holiday pay, service incentive leave pay, 13th month pay, overtime pay and reimbursement for
illegal deductions. The dispositive portion reads -

WHEREFORE xxx the appealed decision is xxx modified. Respondent CMP Federal Security

2. The individual respondents Carolina Mabanta Piad and Ponciano Mabanta are held liable in their official
capacity.

3. The other findings stand affirmed.

Its motion for reconsideration having been denied by the NLRC through its Resolution of 29 November
1995, petitioner CMP now comes to us through the present petition imputing grave abuse of discretion on the
NLRC: (a) in holding that private respondent Caranto was illegally dismissed, basing its findings solely on
surmises and baseless conclusion that petitioner resorted to retaliatory
acts; and, (b) in granting the money claims ofprivate respondents on the unfounded presumption that since
petitioner failed to submit its position paper it is deemed to have admitted the charges in the complaint.
The issues are: (a) whether the NLRC committed grave abuse of discretion amounting to lack or excess of
jurisdiction in holding that private respondent Fernando Caranto was illegally dismissed by CMP; and, (b)
whether in granting all the money claims of private respondents CMP was denied due process.
Well-settled is the rule that the findings of the NLRC, except when there is grave abuse of discretion, are
practically conclusive on this Court. It is only when the NLRCs findings are bereft of any substantial support
from the records that the Court may step in and proceed to make its own independent evaluation of the
facts.[5] We see no cogent reason to deviate from this rule.
On the legality of Carantos dismissal, the NLRC held -

On the other hand, respondents [CMP] contention that complainant Fernando Caranto abandoned his work is
without sufficient basis. The plea of abandonment is inconsistent with his immediate filing of a complaint for
illegal dismissal with prayer for reinstatement. It is illogical for an employee to abandon his work and then
immediately seek reinstatement. (Judric Canning Corp. v. Inciong, 115 SCRA 887). Moreover, respondents
failed to prove by evidence that Caranto was indeed absent without leave.[6]

CMP insists that Caranto was never really dismissed but was merely relieved from his post at Maalikaya
Health Complex upon request of the Manager, and transferred by CMP to SM-Feati; that
two (2) specialorders were allegedly sent by CMP to Caranto informing him of his relief from guard duties at
Maalikaya and his assignment at SM-Feati but despite receipt of these orders he failed to report at CMP office;
that a follow-up letter was likewise addressed to him requiring him to show cause why he should not be
dismissed, which he never answered; and, that his refusal to accept a new assignment and his prolonged absence
justify the presumption that he voluntarily abandoned his job.
In termination cases like the one before us, the burden of proving that the dismissal of the employee was
for a valid or authorized cause rests on the employer[7] and failure to discharge that duty would mean that the
dismissal is not justified and therefore illegal.[8] The same principle was reiterated by this Court in Golden
Donuts Inc. v. NLRC[9] when it ruled that the employer carries the burden of proof in showing just cause for
terminating the services of an employee.
In the instant case, CMP failed to present evidence to justify Caranto's dismissal. We have scoured the
records but could not find any letter, memorandum or correspondence between CMP and the management of
Maalikaya Health Complex dealing with the latters alleged request for Carantos relief from guard duties at
Maalikaya Health Complex, nor the two (2) special orders supposedly sent by CMP to Caranto: the first order,
informing him of his relief from his post at Maalikaya Health Complex, and the other, reassigning him to SM-
Feati; neither the follow-up letter by CMP requiring Caranto to explain and show cause why his services
shouldnot be terminated. We could not find any evidence, for that matter, which would clearly and convincingly
show that Caranto was absent without any valid reason and with no intention of returning to work.
Apparently, CMP failed to discharge its burden of proof. Its allegation that Caranto was merely relieved
and reassigned is empty and self-serving, too insufficient to establish a just and valid cause for his dismissal as
employee. To allow an employer to terminate the employment of his worker based merely on allegations
without proof places the latter in an uncertain situation. He is at the sole mercy of his employer who, in this
case, has emasculated his right to a security of tenure.
Contrariwise, when Caranto was relieved from his post on 6 May 1994 he immediately pursued his claim
against CMP by amending his complaint six (6) days after to include illegal dismissal among his charges. This
can hardly be expected from one who has voluntarily "abandoned" his job, as claimed by CMP. The immediate
filing of a complaint for illegal dismissal against the employer is a clear indication that the employee has not
given up on his work.[10]
As already stated above, CMP failed to justify Carantos dismissal thereby rendering it
illegal. Consequently, no grave abuse of discretion was committed by the NLRC in upholding the decision of
the Labor Arbiter ordering Carantos reinstatement.
On the second issue, CMP maintains that both the Labor Arbiter and the
NLRC gravely abused their discretion in granting the money claims of private respondents, alleging that a
reading of the Labor Arbiters decision and that of the NLRC clearly shows that only the pleadings and evidence
submitted by private respondents were taken into consideration while those presented by CMP were completely
ignored, in clear violation of its constitutional right to due process.
Before resolving the merit of the argument, it may be worth to mention the nature of the proceedings before
labor courts in relation to the requirements of due process. Under Art. 221 of the Labor Code, technical rules of
evidence prevailing in courts of law or equity are not controlling in any proceeding before the NLRC or the
Labor Arbiter. Both are mandated to use every and all reasonable means to ascertain the facts in each case
speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due
process.[11]
While administrative tribunals exercising quasi-judicial powers, like the NLRC and Labor Arbiters, are free
from the rigidity of certain procedural requirements, they are nonetheless bound by law and practice to observe
the fundamental and essential requirements of due process. The standard of due process that must be met in
administrative tribunals allows a certain degree of latitude as long as fairness is not ignored. [12] Hence, it
is not legally objectionable, for being violative of due process, for the Labor Arbiter to resolve a case based
solely on the position papers, affidavits or documentary evidence submitted by the parties. The affidavits of
witnesses in such case may take the place of their direct testimony.[13]
 Set against the records of this case, CMP's claim that it was deprived of its right to be heard readily
collapses. The earlier narration of facts clearly demonstrates that the parties were repeatedly ordered by the
Labor Arbiter to submit their position papers together with the affidavits of their witnesses and other evidence
in support thereof - first on 11 April 1994, then on 22 April 1994, and finally on 6 May 1994. During the 23
May 1994 conference CMP, instead of complying with the order requiring it to submit its position paper, moved
for another postponement which was denied. It was only on 13 June 1994, after the case was submitted for
resolution, that CMP finally presented its position paper. Having been given ample opportunity to put forth its
case, CMP has only itself to blame or, better still, its counsel who was then present, for its failure to do so
within the extended period.
A party before the Labor Arbiter which had a chance to present its side during a period of more than one
(1) month, and despite repeated extensions of time given to enable it to present its position paper still failed to
meet its final deadline, cannot claim denial of due process[14]if subsequently the Labor Arbiter disregarded its
position paper belatedly filed.
Moreover, CMP had all the chances to ventilate its arguments in its appeal to the NLRC where, in fact, it
submitted a memorandum, presented its position paper and supporting documents allegedly ignored by the
Labor Arbiter, as well as a motion for reconsideration - which documents were considered by that Labor
Tribunal in the course of resolving the case.[15] Consequently, the alleged defect in the proceedings before the
Labor Arbiter, if there be any, was deemed cured.
The fact that the NLRC in its decision made no reference to the position paper and evidence of petitioner
does not mean that they were not considered. It is simply that the NLRC agreed with the Labor Arbiters
findings and conclusions and found nothing substantial in petitioners position paper and documentary evidence
to warrant a reversal of those findings and conclusions.
The essence of due process is simply an opportunity to be heard or, as applied to administrative
proceedings, an opportunity to explain ones side or an opportunity to seek reconsideration of the action or ruling
complained of.[16] Where, as in this case, the party has had ample opportunity to present its side of the
controversy not only before the Labor Arbiter but also the NLRC on appeal, it cannot thereafter interpose lack
of due process for what the fundamental law abhors is simply the absolute absence of opportunity to be heard.
Finally, while it may be true that in labor cases stringent rules of procedure may be dispensed with in the
interest of justice, it does not mean that a party litigant is at liberty to completely disregard or ignore the rules,
particularly those relating to the periods for filing of
pleadings. In this connection, if we are to sustain petitioners argument that it was denied due process when its
position paper and documentary evidence were not considered by the Labor Arbiter in deciding the case, we
will in effect put a premium on the undesirable practice of filing position papers late and only after the case has
already been submitted for decision.
WHEREFORE, the petition is DISMISSED. The Decision of the National Labor Relations Commission
dated 26 October 1995 affirming with modifications the Decision of the Labor Arbiter and ordering petitioner
CMP FEDERAL SECURITY AGENCY, INC., to pay private respondents FERNANDO CARANTO, RESTY
REMITTERE, REYNALDO ROSALES, ANTONIO TAPAR, NARCISO CLARO, SIONY MANOS, BALDO
VIODOR and DAWAY WAHAB wage differentials, 13th month pay, holiday pay and service incentive leave
pay as earlier quoted in this Decision, and its Resolution of 29 November 1995 denying petitioners Motion for
Reconsideration, are AFFIRMED. Costs against petitioner.
SO ORDERED.
G.R. No. 187317 April 11, 2013 CARLITO C. ENCINAS, Petitioner, vs. PO1 ALFREDO P. AGUSTIN, JR., and PO1 JOEL S.
CAUBANG, Respondents.

This is a Rule 45 Petition for Review on Certiorari assailing the Decision dated 20 November 20081 and
Resolution dated 30 March 20092 issued by the Court of Appeals (CA). Affirming the findings of the Civil
Service Commission (CSC), the CA found petitioner Carlito C. Encinas (petitioner) administratively liable for
grave misconduct and conduct prejudicial to the best interest of service- offenses proscribed by Section 46(b)(4)
and (27), Book V of Executive Order No. 292, or the Administrative Code of 1987 - and affirmed his dismissal.

The relevant facts are summarized as follows:

Respondents were then both holding positions as Fire Officer I in Nueva Ecija. They claim that on 11 March
2000, at around 9:00 p.m., petitioner – who was then Provincial Fire Marshall of Nueva Ecija – informed them
that unless they gave him five thousand pesos (₱5,000), they would be relieved from their station at Cabanatuan
City and transferred to far-flung areas. Respondent Alfredo P. Agustin (Agustin) would supposedly be
transferred to the Cuyapo Fire Station (Cuyapo), and respondent Joel S. Caubang (Caubang) to Talugtug Fire
Station (Talugtug). Fearing the reassignment, they decided to pay petitioner. On 15 March 2000, in the house of
a certain "Myrna," respondents came up short and managed to give only two thousand pesos (₱2,000),
prompting petitioner to direct them to come up with the balance within a week. When they failed to deliver the
balance, petitioner issued instructions effectively reassigning respondents Agustin and Caubang to Cuyapo and
Talugtug, respectively.3

Based on the above-narrated circumstances, respondents filed with the Bureau of Fire Protection (BFP) a letter-
complaint (BFP Complaint) on 27 March 2000 for illegal transfer of personnel under Republic Act (R.A.) No.
6975 or the Department of Interior and Local Government (DILG) Act of 1990.4 The record is not clear as to
why this Complaint was later docketed by the BFP for preliminary investigation for violation of R.A. No. 3019
or the Anti-Graft and Corrupt Practices Act.5 The BFP Complaint provides in pertinent part:

Chief Inspector Carlito C. Encinas relieved us from our present assignment and transferred us to different far
places without any cause and due process of law based from the BFP Manual (Republic Act 6975)

The reason why he relieved us was due to our failure to give the money he was asking from both of us in the
amount of Five Thousand Pesos (₱5,000) in exchange for our present assignment to be retained.

x x x.

On 12 April and 25 April 2000, on the basis of similar facts, respondents likewise filed with the CSC Regional
Office in San Fernando, Pampanga (CSCRO), as well as with the CSC Field Office in Cabanatuan City,6 their
Joint Affidavit/Complaint (CSCRO Complaint).7 This time, they accused petitioner of violation of Section 4(c)
of R.A. No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees. The
relevant portion of the CSCRO Complaint provides:

6. That we executed this affidavit to file a complaint against C. Insp. Carlito C. Encinas BFP for violation of
Section 4 (C) R.A. 6713, that is "Justness and sincerity. - Public officials and employees shall remain true to the
people at all times. They must act with justness and sincerity and shall not discriminate against anyone,
especially the poor and the underprivileged. They shall at all times respect the rights of others, and shall refrain
from doing acts contrary to law, good morals, good customs, public policy, public order, public safety and
public interest."

The CSCRO Complaint erroneously pertained to the above-quoted provision as Section 4(c), but it should be
denoted as Section 4(A)(c).

On 27 October 2000, after a fact-finding investigation was conducted in connection with his alleged extortion
activities, petitioner was formally charged with dishonesty, grave misconduct, and conduct prejudicial to the
best interest of service. He was required to file an answer within five (5) days from notice.8 The Formal Charge
specifically reads in part:
WHEREFORE, Carlito C. Encinas is hereby formally charged with the offenses of Dishonesty, Grave
Misconduct and Conduct Prejudicial to the Best Interest of the Service. Accordingly, he is given five (5) days
from receipt hereof to submit to this Office a written answer under oath, together with the affidavits of his
witnesses and documentary evidence, if any, and a statement whether or not he elects a formal investigation. He
is advised of his right to the assistance of his counsel of his own choice.9

Although it was not specifically mentioned in the records, the offenses of dishonesty, grave misconduct, and
conduct prejudicial to the best interest of service can be found in Section 46(b)(1), (4) and (27), Book V,
respectively, of the Administrative Code of 1987.10 The record does not indicate whether petitioner was
formally charged with violation of R.A. No. 6713.

BFP Complaint

In answer to the BFP Complaint against him, petitioner claimed that in an alleged Confidential Investigation
Report dated 31 July 2000 (Confidential Report), no copy of which was attached to the record, 11 the
investigating body recommended that charges against him be dropped for insufficiency of evidence. Instead, it
recommended that respondents be charged with conducting unauthorized fire safety inspection and engaging in
the sale of fire extinguishers, both in violation of the rules.

It appears on record that the Internal Audit Services (IAS) of the BFP issued a Resolution dated 05 July
2005,12recommending that the administrative complaint against petitioner be dismissed for insufficiency of
evidence.13The IAS ruled that the reassignment of respondents was within the ambit of authority of the head of
office. Thus, said reassignment may have been ordered as long as the exigencies of the service so
required.14 The Resolution dated 05 July 2005 states in pertinent part:

The re-assignment of the complainants is within the ambit of authority, CSC Resolution No. 93402 dated 11
February 1993, the commission ruled as follows:

"That reassignment may be ordered by the head of office of the duly authority [sic] representative when the
exigencies of the service so require but subject to the condition that there will be no reduction in rank, status or
salary, further on Bongbong vs Paracaldo (57 SCRA 623) the supreme court ruled held [sic] that "on general
principle petitioner may be transferred as to the exigencies of the service require". x x x

In view of the documents on record, the undersigned investigator finds no sufficient ground to warrant the filing
of appropriate administrative offense against the respondent.

WHEREFORE, premises considered, this office (IAS) most respectfully recommends that the administrative
complaint against C/INSP CARLITO ENCINAS, BFP be dismissed for insufficiency of evidence.

CSCRO Complaint

In his Answer to the formal charge of dishonesty, grave misconduct, and conduct prejudicial to the best interest
of service,15 petitioner claimed that the CSCRO Complaint was an offshoot of the reassignment of respondents.
He alleged that they were reassigned after it was discovered that they had conducted a fire safety inspection of
establishments within Nueva Ecija without any mission order. In relation to this operation, they supposedly sold
fire extinguishers to the owners of the establishments they had inspected.16 He cited the alleged Confidential
Report in which the investigating body recommended the dropping of charges against him.17 He further added
that, in view of his exemplary and faithful service, the then-incumbent governor even requested the continuance
of his stint as Provincial Fire Marshall of Nueva Ecija.18 In his Position Paper,19 petitioner claimed that
respondents’ transfer had been made in compliance with the directive of Supt. Simeon C. Tutaan (Supt. Tutaan)
and pursuant to law.20
 CSCRO Ruling

Subsequently, the CSCRO issued its Decision dated 30 July 2004,21 finding petitioner administratively liable for
grave misconduct and conduct prejudicial to the best interest of service, and ordered his dismissal from service.

The CSCRO ruled that respondents, through their respective testimonies, were able to establish the fact that
petitioner demanded from them the amount of ₱5,000 in exchange for their non-reassignment to far-flung fire
stations.22 The fact that they did not present any document to show that petitioner received ₱2,000 did not
preclude a finding of administrative liability.23 The consistency of their oral testimonies already constituted
substantial evidence. Granting that they committed illegal acts prior to their reassignment, this allegation
nevertheless did not rebut their claims that petitioner had extorted money from them. The admission of Supt.
Tutaan that he gave instructions for their reassignment did not disprove the accusation of extortion, but merely
established that there was indeed an order to reassign them.24

Petitioner filed a Motion for Reconsideration.25 He argued that the Sworn Statements of his witnesses should
have been given weight instead of respondents’ testimonies. He explained that Mrs. Angelina Calanoc (Mrs.
Calanoc), owner of Reynand Gas Dealer, confirmed that respondents had conducted a physical inspection of her
establishment, after which they recommended that she pay conveyance permit fees as a requisite for the
issuance of a Fire Safety Certificate.26 Also, Carlito Umali confirmed that he had indeed accompanied petitioner
when the latter investigated the Complaint filed by Mrs. Calanoc against respondents.27 Furthermore, Myrna
Villanueva – the owner of the house where respondents supposedly paid petitioner ₱2,000 – claimed that she
did not know them personally or recall either petitioner or respondents ever visiting her house.28 Likewise, Supt.
Tutaan confirmed that he had instructed petitioner to cause the transfer of respondents.29 The latter also argued
that the BFP Complaint had already been dismissed by virtue of the Confidential Report, and that the dismissal
had already served as a bar to the further prosecution of any administrative charge against him.30

The Motion, however, was subsequently denied by the CSCRO in its Order dated 19 May 2006.31 It affirmed its
previous ruling that the statements of petitioner’s witnesses were incompetent and immaterial, having failed to
disprove that petitioner had indeed extorted money from respondents.32 It likewise rejected the argument of res
judicata proffered by petitioner and ruled that the dismissal of the BFP Complaint by virtue of the Confidential
Report was not a judgment on the merits rendered by a competent tribunal. Furthermore, the Confidential
Report was the result of the recommendation of a fact-finding committee formed to determine the veracity of
the Complaint charging petitioner with extortion, unjustified transfer of BFP personnel, and malversation of
funds.33Res judicata cannot be raised as a defense, since the dismissal of the BFP Complaint did not constitute a
bar by former judgment.34

Aggrieved, petitioner filed an Appeal Memorandum35 with the CSC main office. In his Appeal, he argued that
respondents were guilty of forum-shopping for having filed two (2) separate administrative Complaints before
the CSCRO on the one hand, and before the BFP/DILG on the other.36 Petitioner argued that respondents failed
to attach a certificate of non-forum shopping to either Complaint.37 Moreover, the CSCRO should not have
entertained the Complaint filed before it, considering that it already knew of the then-pending investigation
conducted by the BFP/DILG.38

Petitioner further argued that the CSCRO only had appellate jurisdiction or authority to decide cases brought
before it by the head of agency or, in this case, the BFP.39 He explained that the administrative Complaint was
investigated and heard by the BFP/DILG. The BFP department head or fire director, Rogelio F. Asignado, by
virtue of the Resolution dated 05 July 2005, dismissed the complaint for insufficiency of evidence.40 On the
basis of the dismissal of the case, and there being no appeal or petition filed pertaining thereto, the CSCRO
Complaint should have been dismissed as well.41 Petitioner further argued that the CSCRO erred in concluding
that the resolution of the fact-finding committee was not a judgment on the merits.42 The BFP being an agency
of the government, any decision or resolution it arrives at is also a judgment on the merits.43
Petitioner likewise reiterated his previous arguments on the appreciation of the testimonies of his
witnesses.44 He alleged that on 09 June 2006, respondent Agustin executed an Affidavit of Desistance in the
former’s favor and was no longer interested in pursuing the case against him.45

In answer to the Appeal Memorandum, the CSCRO argued that there was no forum-shopping, considering that
the BFP Complaint was based on a different cause of action.46 The Complaint, which pertained to the alleged
illegal transfer of personnel under R.A. No. 6975, was docketed for preliminary investigation of the alleged
violation of the Anti-Graft and Corrupt Practices Act or R.A. No. 3019.47 The CSCRO further argued that there
could be no res judicata, since the dismissal of the BFP Complaint by virtue of the Resolution dated 05 July
200548 was not a judgment on the merits rendered by a competent tribunal. The dismissal was, instead, the
result of the recommendation of the preliminary investigators of the Internal Audit Service (IAS) of the BFP.49

CSC Ruling

Petitioner’s appeal was subsequently denied by CSC in its Resolution No. 080941 dated 19 May 2008 (CSC
Resolution).50 It ruled that there was no forum-shopping committed by respondents, and that substantial
evidence existed to hold petitioner administratively liable for grave misconduct and conduct prejudicial to the
best interest of the service.

The CSC explained that the CSCRO Complaint was for violation of R.A. No. 6713, while the BFP Complaint
was for violation of R.A. No. 6975.51 It further ruled that, although both Complaints were anchored on a similar
set of facts, there was no identity of causes of action: thus, even if they were successively filed before different
fora, no forum-shopping existed.52 Although an investigation was then ongoing at the BFP when the CSCRO
took cognizance of the case, no forum-shopping resulted. A perusal of the proceedings conducted at the BFP
shows that only a preliminary investigation was initiated by the IAS-BFP, a fact-finding committee that
recommended the dismissal of the case, which was accordingly approved by the fire director. The approval of
this recommendation cannot be regarded as one based on merits. Otherwise, it would bar the filing of another
case, particularly, with the CSCRO.53

With regard to petitioner’s administrative liability, the CSC found that because of the nature of the case –
extortion of money – hardly any documentary evidence could be gathered to prove the act complained of. As
expected, the CSCRO based its findings on the written and oral testimonies of the parties and their witnesses, as
well as on the circumstances surrounding the incident. Respondents clearly established that petitioner had
demanded ₱5,000 in exchange for their reassignment.54 The CSC further ruled that it was contrary to human
nature for respondents, who were merely rank-and-file employees, to impute such a grave act to their boss.
Their disparity in rank would show that respondents could not have fabricated their charges.55 It further ruled
that the withdrawal of the complaint would not result in their outright dismissal or absolve the person
complained of from administrative liability.56

Aggrieved yet again, petitioner filed a Rule 43 Petition with the CA. His main argument was that the CSC erred
in not dismissing respondents’ Complaint despite the absence of a certification of non-forum shopping and
respondent’s actual forum-shopping, as well as the lack of substantial evidence to hold him administratively
liable.57

In his Rule 43 Petition, petitioner claimed that a certificate of non-forum shopping attached to a complaint is a
mandatory requirement as stated in Section 8, Rule I of the Uniform Rules on Administrative Cases.58 He
argued that the causes of action in the two Complaints were similar. With regard to the proceedings before the
CSC, aside from respondents’ sole charge of violation of R.A. No. 6713, also included were charges of
dishonesty, grave misconduct, and conduct prejudicial to the best interest of service. Petitioner reasoned that the
additional offenses charged were equivalent to a violation of R.A. No. 6975, so the issues investigated were
substantially the same.59
In relation to his administrative liability, petitioner argued that the testimonies of respondents should not be
given weight, as their credibility had been rendered questionable by their dismissal from the service. 60 Also,
they had already withdrawn their Complaints against him, as stated in their Affidavit of Desistance
(Affidavit),61 in which they admitted that the cases were filed out of a misapprehension of facts and a
misunderstanding between the parties.62

Significantly, respondent Caubang denounced the supposed execution of the Affidavit. He claimed that he did
not sign it, and that his purported signature therein was a forgery.63

CA Ruling

Subsequently, the CA, in its assailed Decision,64 denied petitioner’s appeal. The CA ruled that it was not the
letter-complaint filed by respondents that commenced the administrative proceedings against petitioner; instead,
it was the formal charge filed by Atty. Marasigan-De Lima. The letter-complaint merely triggered the CSCRO’s
fact-finding investigation. Considering that the Complaint was initiated by the proper disciplining authority, it
need not contain a certification of non-forum-shopping.65

The CA similarly ruled that respondents’ act of simultaneously filing Complaints against petitioner both at the
CSC and the BFP did not constitute forum-shopping. While it was conceded that the two Complaints were
founded on the same set of facts involving the same parties, they were nonetheless based on different causes of
action—more specifically, the BFP Complaint was for alleged violation of R.A. No. 3019, while the CSC
Complaint was for violation of the provisions of R.A. No. 6713.66 Furthermore, the doctrine of res judicata
applies only to judicial or quasi-judicial proceedings, not to the exercise of administrative powers.67

With regard to the administrative liability of petitioner, the CA found that substantial evidence supported the
CSC’s findings.68 It likewise ruled that the testimonies of the witnesses of petitioner were incompetent and
immaterial, as these could prove something else entirely, but did not disprove petitioner’s extortion.69 Also, the
withdrawal of a complaint does not result in outright dismissal or discharge a person from any administrative
liability.70

Petitioner filed a Motion for Reconsideration,71 but the CA denied it in its assailed Resolution dated 30 March
2009.72

Petitioner is now before this Court arguing the following: (1) the CA erred in affirming the CSC Resolution and
in ruling that respondents were not guilty of forum-shopping; and (2) substantial evidence does not exist to hold
petitioner administratively liable for grave misconduct and conduct prejudicial to the best interest of the service.

In their Comment, respondents counter that a certificate of non-forum shopping is not required if the one who
files the formal charge is the head of agency.73 They further argue that the case filed with the BFP was in the
nature of violation under R.A. No. 3019, whereas the case filed before the CSC was in violation of R.A. No.
6713. A single act may result in two or more unlawful transgressions punishable under different laws.74 As to
the matter of administrative liability, the CSC’s findings, especially when affirmed by the CA, are binding upon
this Court.75

Issues

Based on the submissions of both parties, the following main issues are presented for resolution by this Court:

I. Whether or not respondents are guilty of forum-shopping.

II. Whether the CA erred in ruling that substantial evidence exists to hold petitioner administratively
liable for grave misconduct and conduct prejudicial to the best interest of service.
 The Court’s Ruling

The Petition is devoid of merit. We rule that petitioner is administratively liable for grave misconduct and
conduct prejudicial to the best interest of the service under the Administrative Code of 1987; thus, we affirm his
dismissal from service.

Discussion

I.

Respondents are not guilty of forum-shopping.

Petitioner argues that respondents are guilty of forum-shopping for filing two allegedly identical Complaints in
violation of the rules on forum-shopping.76 He explains that dishonesty, grave misconduct, and conduct
prejudicial to the best interest of the service—charges included in the CSCRO Complaint—were charges that
were equivalent to the BFP Complaint, the subject of which was his alleged violation of R.A. 6975 or illegal
transfer of personnel.77

We do not agree with petitioner. In Yu v. Lim,78 this Court enumerated the requisites of forum-shopping as
follows:

Forum-shopping exists when the elements of litis pendentia are present or where a final judgment in one case
will amount to res judicata in another. Litis pendentia requires the concurrence of the following requisites: (1)
identity of parties, or at least such parties as those representing the same interests in both actions; (2) identity of
rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and (3) identity with respect
to the two preceding particulars in the two cases, such that any judgment that may be rendered in the pending
case, regardless of which party is successful, would amount to res judicata in the other case.79 (Emphasis
supplied)

Applying the foregoing requisites to this case, we rule that the dismissal of the BFP Complaint does not
constitute res judicata in relation to the CSCRO Complaint. Thus, there is no forum-shopping on the part of
respondents.

Res judicata means "a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by
judgment." It lays down the rule that an existing final judgment or decree on the merits, rendered without fraud
or collusion by a court of competent jurisdiction upon any matter within its jurisdiction, is conclusive of the
rights of the parties or their privies in all other actions or suits, in the same or any other judicial tribunal of
concurrent jurisdiction, on the points and matters in issue in the first suit.80

In order that res judicata may bar the institution of a subsequent action, the following requisites must concur: (a)
the former judgment must be final; (b) it must have been rendered by a court having jurisdiction over the
subject matter and the parties; (c) it must be a judgment on the merits; and (d) there must be between the first
and the second actions (i) identity of parties, (ii) identity of subject matter, and (iii) identity of cause of action.81

A judgment may be considered as one rendered on the merits "when it determines the rights and liabilities of the
parties based on the disclosed facts, irrespective of formal, technical or dilatory objections;"or when the
judgment is rendered "after a determination of which party is right, as distinguished from a judgment rendered
upon some preliminary or formal or merely technical point."82

In this case, there is no "judgment on the merits" in contemplation of the definition above. The dismissal of the
BFP Complaint in the Resolution dated 05 July 2005 was the result of a fact-finding investigation for purposes
of determining whether a formal charge for an administrative offense should be filed. Hence, no rights and
liabilities of parties were determined therein with finality.

The CA was correct in ruling that the doctrine of res judicata applies only to judicial or quasi-judicial
proceedings, and not to the exercise of administrative powers.83 Administrative powers here refer to those
purely administrative in nature,84 as opposed to administrative proceedings that take on a quasi-judicial
character.85

In administrative law, a quasi-judicial proceeding involves (a) taking and evaluating evidence; (b) determining
facts based upon the evidence presented; and (c) rendering an order or decision supported by the facts
proved.86 The exercise of quasi-judicial functions involves a determination, with respect to the matter in
controversy, of what the law is; what the legal rights and obligations of the contending parties are; and based
thereon and the facts obtaining, the adjudication of the respective rights and obligations of the parties.87 In
Bedol v. Commission on Elections,88 this Court declared:

Quasi-judicial or administrative adjudicatory power on the other hand is the power of the administrative agency
to adjudicate the rights of persons before it. It is the power to hear and determine questions of fact to which the
legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in
enforcing and administering the same law. The administrative body exercises its quasi-judicial power when it
performs in a judicial manner an act which is essentially of an executive or administrative nature, where the
power to act in such manner is incidental to or reasonably necessary for the performance of the executive or
administrative duty entrusted to it. In carrying out their quasi-judicial functions the administrative officers or
bodies are required to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and
draw conclusions from them as basis for their official action and exercise of discretion in a judicial nature.

The Court has laid down the test for determining whether an administrative body is exercising judicial or
merely investigatory functions: adjudication signifies the exercise of the power and authority to adjudicate upon
the rights and obligations of the parties. Hence, if the only purpose of an investigation is to evaluate the
evidence submitted to an agency based on the facts and circumstances presented to it, and if the agency is not
authorized to make a final pronouncement affecting the parties, then there is an absence of judicial discretion
and judgment.89

In this case, an analysis of the proceedings before the BFP yields the conclusion that they were purely
administrative in nature and constituted a fact-finding investigation for purposes of determining whether a
formal charge for an administrative offense should be filed against petitioner.

It can be gleaned from the Resolution dated 05 July 2005 itself that the purpose of the BFP proceedings was to
determine whether there was sufficient ground to warrant the filing of an appropriate administrative offense
against petitioner. To recall, the Resolution dated 05 July 2005 states:

The re-assignment of the complainants is within the ambit of authority, CSC Resolution No. 93402 dated 11
February 1993, the commission ruled as follows:

"That reassignment may be ordered by the head of office of the duly authority [sic] representative when the
exigencies of the service so require but subject to the condition that there will be no reduction in rank, status or
salary, further on Bongbong vs Paracaldo (57 SCRA 623) the supreme court ruled held [sic] that "on general
principle petitioner may be transferred as to the exigencies of the service require". x x x

In view of the documents on record, the undersigned investigator finds no sufficient ground to warrant the filing
of appropriate administrative offense against the respondent.
WHEREFORE, premises considered, this office (IAS) most respectfully recommends that the administrative
complaint against C/INSP CARLITO ENCINAS, BFP be dismissed for insufficiency of evidence.90 (Emphases
supplied)

The proceedings before the BFP were merely investigative, aimed at determining the existence of facts for the
purpose of deciding whether to proceed with an administrative action. This process can be likened to a public
prosecutor’s preliminary investigation, which entails a determination of whether there is probable cause to
believe that the accused is guilty, and whether a crime has been committed.

The Ruling of this Court in Bautista v. Court of Appeals91 is analogously applicable to the case at bar. In that
case, we ruled that the preliminary investigation conducted by a public prosecutor was merely inquisitorial and
was definitely not a quasi-judicial proceeding:

A closer scrutiny will show that preliminary investigation is very different from other quasi-judicial
proceedings. A quasi-judicial body has been defined as "an organ of government other than a court and other
than a legislature which affects the rights of private parties through either adjudication or rule-making."

xxxx

On the other hand, the prosecutor in a preliminary investigation does not determine the guilt or innocence of the
accused. He does not exercise adjudication nor rule-making functions. Preliminary investigation is merely
inquisitorial, and is often the only means of discovering the persons who may be reasonably charged with a
crime and to enable the fiscal to prepare his complaint or information. It is not a trial of the case on the merits
and has no purpose except that of determining whether a crime has been committed and whether there is
probable cause to believe that the accused is guilty thereof. While the fiscal makes that determination, he cannot
be said to be acting as a quasi-court, for it is the courts, ultimately, that pass judgment on the accused, not the
fiscal. (Emphases supplied)

This principle is further highlighted in MERALCO v. Atilano,92 in which this Court clearly reiterated that a
public prosecutor, in conducting a preliminary investigation, is not exercising a quasi-judicial function. In a
preliminary investigation, the public prosecutor inspects the records and premises, investigates the activities of
persons or entities coming under the formers’ jurisdiction, or secures or requires the disclosure of information
by means of accounts, records, reports, statements, testimony of witnesses, and production of documents. In
contrast, judicial adjudication signifies the exercise of power and authority to adjudicate upon the rights and
obligations of concerned parties, viz.:

This is reiterated in our ruling in Spouses Balangauan v. Court of Appeals, Special Nineteenth Division, Cebu
City, where we pointed out that a preliminary investigation is not a quasi-judicial proceeding, and the DOJ is
not a quasi-judicial agency exercising a quasi-judicial function when it reviews the findings of a public
prosecutor regarding the presence of probable cause. A quasi-judicial agency performs adjudicatory functions
when its awards determine the rights of parties, and its decisions have the same effect as a judgment of a court."
This is not the case when a public prosecutor conducts a preliminary investigation to determine probable cause
to file an information against a person charged with a criminal offense, or when the Secretary of Justice reviews
the former's orders or resolutions" on determination of probable cause.

In Odchigue-Bondoc, we ruled that when the public prosecutor conducts preliminary investigation, he thereby
exercises investigative or inquisitorial powers. Investigative or inquisitorial powers include the powers of an
administrative body to inspect the records and premises, and investigate the activities of persons or entities
coming under his jurisdiction, or to secure, or to require the disclosure of information by means of accounts,
records, reports, statements, testimony of witnesses, and production of documents. This power is distinguished
from judicial adjudication which signifies the exercise of power and authority to adjudicate upon the rights and
obligations of concerned parties. Indeed, it is the exercise of investigatory powers which sets a public
prosecutor apart from the court. (Emphasis supplied)

Indeed, the public prosecutor exercises investigative powers in the conduct of a preliminary investigation to
determine whether, based on the evidence presented, further action should be taken through the filing of a
criminal complaint in court. Similarly, in the instant case, the BFP exercised its investigative or fact-finding
function to determine whether, based on the facts and the evidence presented, further administrative action—in
the form of a formal charge—should be taken against petitioner. In neither instance is there in adjudication upon
the rights, obligations, or liabilities of the parties before them.

With the above disquisition, we rule that the dismissal of the BFP Complaint cannot operate as res judicata.
Therefore, forum-shopping is unavailing in this case.

II.

The CA was correct in ruling that there was substantial evidence to hold petitioner administratively liable for
grave misconduct and conduct prejudicial to the best interest of the service.

On the substantive issue, petitioner claims that the findings are based on a misapprehension of facts. The
dismissal of respondents from service allegedly placed their credibility in question.93

We do not agree. We find petitioner administratively liable for his act of demanding ₱5,000 from respondents in
exchange for their non-reassignment.

At the outset, we stress the settled rule that the findings of fact of administrative bodies will not be interfered
with by the courts in the absence of grave abuse of discretion on the part of the former, or unless the
aforementioned findings are not supported by substantial evidence.94 These factual findings carry even more
weight when affirmed by the CA, in which case they are accorded not only great respect, but even finality.
These findings are binding upon this Court, unless it is shown that the administrative body has arbitrarily
disregarded or misapprehended evidence before the latter to such an extent as to compel a contrary conclusion,
had the evidence been properly appreciated.95 This rule is rooted in the doctrine that this Court is not a trier of
facts.96 By reason of the special knowledge and expertise of administrative agencies over matters falling under
their jurisdiction, they are in a better position to pass judgment on those matters.97

This Court will not disturb the factual findings of both the CSC and the CA, absent any compelling reason to do
so. The conclusion reached by the administrative agencies involved – after their own thorough investigations
and hearings, as well as their consideration of the evidence presented before them and their findings thereon,
especially when affirmed by the CA – must now be regarded with great respect and finality by this Court.

We rule that the alleged dismissal of respondents from the service would not suffice to discredit them as
witnesses. In People v. Dominguez,98 this Court had occasion to rule that even a prior criminal conviction does
not by itself suffice to discredit a witness; the testimony of that witness must be assayed and scrutinized in
exactly the same way the testimonies of other witnesses must be examined for their relevance and
credibility.99 In Gomez v. Gomez-Samson,100 this Court echoed its previous pronouncement that even convicted
criminals are not excluded from testifying as long as, having organs of sense, they "can perceive and perceiving
can make known their perceptions to others."101

This pronouncement is even more significant in this case, as what petitioner is alleging is not any past criminal
conviction of respondents, but merely their dismissal from the service.102 Scrutinizing the testimonies of
respondents, we find, as did both the CSC and the CA, that these testimonies carry more weight than
petitioner’s self-serving statements and blanket denials.
Respondents, through their testimonies, were able to establish that petitioner told them that unless they paid him
₱5,000, they would be re-assigned to far-flung areas. The consistency of their testimonies was further bolstered
by the fact that they had been cross-examined by petitioner’s counsel. Petitioner was unable to rebut their
claims other than by mere denials. Even the admission of Supt. Tutaan that he gave the instructions to reassign
respondents cannot disprove the latter’s claims. As regards the testimonies of the witnesses of petitioner, we
hold that even these testimonies are irrelevant in disproving the alleged extortion he committed, as these were
mainly related to respondents’ supposed illegal activities, which are not the issue in this case.

Even assuming that an Affidavit of Desistance was indeed executed by respondents, petitioner is still not
exonerated from liability. The subsequent reconciliation of the parties to an administrative proceeding does not
strip the court of its jurisdiction to hear the administrative case until its resolution. Atonement, in administrative
cases, merely obliterates the personal injury of the parties and does not extend to erase the offense that may
have been committed against the public service.103 The subsequent desistance by respondents does not free
petitioner from liability, as the purpose of an administrative proceeding is to protect the public service based on
the time-honored principle that a public office is a public trust.104 A complaint for malfeasance or misfeasance
against a public servant of whatever rank cannot be withdrawn at any time for whatever reason by a
complainant, as a withdrawal would be "anathema to the preservation of the faith and confidence of the
citizenry in their government, its agencies and instrumentalities."105 Administrative proceedings "should not be
made to depend on the whims and caprices of complainants who are, in a real sense, only witnesses therein."106

In view of the foregoing, we rule that petitioner’s act of demanding money from respondents in exchange for
their non-reassignment constitutes grave misconduct. We have defined grave misconduct as follows:

Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful
behavior or gross negligence by a public officer; and the misconduct is grave if it involves any of the additional
elements of corruption, such as willful intent to violate the law or to disregard established rules, which must be
established by substantial evidence.107 (Emphasis supplied)

Furthermore, petitioner’s acts likewise constitute conduct prejudicial to the best interest of the service. In
Philippine Retirement Authority v. Rupa108 this Court elaborated on the specific acts that constitute the grave
offense of conduct prejudicial to the best interest of the service, considering that no concrete description is
provided under the Civil Service Law and rules.1âwphi1 The Court outlined therein following acts:
misappropriation of public funds, abandonment of office, failure to report back to work without prior notice,
failure to keep in safety public records and property, making false entries in public documents, and falsification
of court orders.109

Applying this principle to the present case, we hold that petitioner's offense is of the same gravity or odiousness
as that of the aforementioned acts and would likewise amount to conduct prejudicial to the best interest of the
service.

As to the imposable penalty, grave misconduct is a grave offense punishable by dismissal even for the first
offense.110 The penalty of dismissal includes forfeiture of retirement benefits, except accrued leave credits, and
perpetual disqualification from reemployment in government service and bar from taking civil service
examinations.111 On the other hand, conduct prejudicial to the best interest of the service is likewise a grave
offense, but with a less severe penalty of suspension of six ( 6) months and one ( 1) day to one ( 1) year for the
first offense and dismissal for the second offense.112

Considering that petitioner was found guilty of two (2) offenses, then the penalty of dismissal from the service-
the penalty corresponding to the most serious offense-was properly imposed.113
WHEREFORE, in view of the foregoing, this petition is hereby DENIED. The Decision dated 20 November
2008 and the Resolution dated 30 March 2009 issued by the CA in CA-G.R. SP No. 104074 are hereby
AFFIRMED.

SO ORDERED.

G.R. No. 140374 November 27, 2002 JANE C. ABALOS, BERNARDO A. BAMBICO, MANUEL G. MALAG, WILFREDO R.
SOTELO, PERCIVAL B. AGRITO, RICHARD M. BALAN-EG, and EDGARDO S. NILLO petitioners, vs.PHILEX MINING
CORPORATION, respondent.

This petition for review assails the decision[1] dated July 30, 1999 of the Court of Appeals in CA-G.R. SP
No. 50167, which affirmed the order[2] dated December 11, 1998 of Arbitrator Juan Valdez of the National
Conciliation and Mediation Board, Cordillera Administrative Region, Baguio City. That order partially
modified an earlier one dated March 5, 1994,[3] by directing respondent Philex Mining Corporation to pay
petitioners their separation pay in lieu of reinstatement.
The factual antecedent are uncomplicated.
A manpower audit conducted by respondent Philex, for brevity, revealed that 241 of its employees were
redundant. Thus, Philex undertook a retrenchment program that resulted in the termination of petitioners
employment effective June 30, 1993. Consequently, petitioners filed a case for illegal dismissal against
respondent. The case was submitted for arbitration through a submission agreement coursed through the
National Conciliation and Mediation Board, Cordillera Administrative Region, Baguio City.
On March 5, 1994, Voluntary Arbitrator Juan Valdez rendered his decision, concluding that:

IN THE LIGHT OF THE FOREGOING, Respondent is hereby ordered to reinstate the Complainants and
Intervenors to their former positions with back wages without loss of seniority and privileges within 10 days
from receipt hereof except the two employees namely Pedro Otgalon and Miguel Guyapat who have applied for
and granted early retirement; provided that the amount of separation pay already received by them shall be
deducted from their backwages; and provided further that should the backwages of the employee concerned be
less than the amount of separation pay received, the employee concerned shall refund to Respondent the balance
thereof; and for Respondent to pay to Counsel of the Complainants and Intervenors 10% each of the total
amount of backwages due the employees represented by them as attorneys fees. No award of damages.

SO ORDERED.[4]

Philex appealed to this Court and the case was remanded to the Court of Appeals. On July 22, 1997, the
appellate court promulgated its decision, thus:

In view of the foregoing, we rule that, while there was indeed a valid reason for retrenchment, the means
employed were disadvantageous, thus inequitable, to the affected workers. The fact that these workers signed
quitclaims and received their separation pay would not estop them from seeking reinstatement. The Supreme
Court said: The reason why quitclaims are commonly frowned upon as contrary to public policy, and why they
are held to be ineffective to bar claims for the full measure of the workers legal rights, is the fact that the
employer and the employee obviously do not stand on the same footing. (Marcos vs. National Labor Relations
Commission, G.R. No. 111744, 248 SCRA 146 [1995]).

WHEREFORE, the petition is dismissed for lack of merit.

SO ORDERED.[5]

Philex elevated the case to the Supreme Court via a petition for review on certiorari, which we denied in a
resolution dated January 14, 1998. Entry of judgment was made on April 27, 1998.
On August 14, 1998, Philex filed a manifestation and motion for leave to offer separation pay to
petitioners, in lieu of reinstatement, before the Office of Voluntary Arbitrator Juan Valdez.Philex alleged that
petitioners positions no longer existed and that there arose strained relations between the parties that effectively
barred reinstatement.
Arbitrator Juan Valdez granted Philexs motion in his order dated December 11, 1998, thus:

In the light of the foregoing, Respondent is ordered to pay the Complainants and Intervenors the amounts of
backwages and separation pay stated above less the total amount of salary they received as a result of their
reinstatement thru payroll from November 24, 1997 to date within twenty (20) days from receipt hereof plus ten
percent (10%) thereof as attorneys fees, otherwise this Office will direct the proper Sheriff to execute this
Order.

SO ORDERED.[6]

Consequently, petitioners filed a petition for certiorari with the Court of Appeals on the ground that
Arbitrator Juan Valdez acted without or in excess of jurisdiction. On July 30, 1990, the Court of Appeals
dismissed the petition and affirmed the order of Arbitrator Valdez. It likewise denied the petitioners motion for
reconsideration.
Hence, this petition for review, anchored on a single assignment of error:

THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN AFFIRMING THE DECEMBER 11,
1998 ORDER OF VOLUNTARY ARBITRATOR JUAN B. VALDEZ ALTERING AND MODIFYING
HIS MARCH 5, 1994 DECISION WHICH HAD ALREADY BECOME FINAL AND EXECUTORY ON
APRIL 27, 1998.[7]

Petitioners aver that when the March 5, 1994 order directing their reinstatement became final and
executory, Arbitrator Valdez no longer had jurisdiction to modify the same. According to them, an order that
has become final and executory can no longer be modified or altered.
Petitioners further insist that Philex failed to sufficiently establish (1) that there were supervening events
which rendered enforcement of the final order unjust, and (2) that the positions vacated by them no longer
existed and there were no similar positions available for them. Petitioners point out that Philex did not conduct
any investigation as to the manner and purpose of the abolition of their former positions. They also assert that
Philex subcontracted to outsiders the work previously performed by the retrenched employees, which proved
that there was no need to abolish their positions.
As to the alleged strained relations between the parties, petitioners maintain that this was also not proven
adequately. Petitioners submit that for this doctrine to apply, it must be shown that the affected employees
occupied positions of trust and confidence, or that the employees differences with their employer are of such
nature or degree as to preclude reinstatement. Petitioners argue that neither of these conditions is present in this
case.
For its part, respondent contends that it presented evidence showing the impossibility and inappropriateness
of reinstatement, which justify the modification of the March 5, 1994 arbitration order. Arbitrator Valdez found
proof of this fact and upon appeal, the Court of Appeals declared said finding as sufficiently supported by
evidence. Invoking the principle embodied in Compania Maritima, Inc. vs. Court of Appeals,[8] respondent
avers that this factual finding must be accorded great weight, in the absence of any showing that it is whimsical,
capricious, or arbitrary.
A basic tenet in our rules of procedure is that an award that is final and executory cannot be amended or
modified anymore. Nothing is more settled in law than that once a judgment attains finality it thereby becomes
immutable and unalterable. It may no longer be modified in any respect, even if the modification is meant to
correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the
modification is attempted to be made by the court rendering it or by the highest court of the land. [9] However,
this rule is subject to exceptions as stated in the case of David vs. CA, 316 SCRA 710 (1999), cited by
respondent:

One exception is that where facts and/or events transpire after a decision has become executory, which facts
and/or events present a supervening cause or reason which renders the final and executory decision no longer
enforceable. Under the law, the court may modify or alter a judgment even after the same has become executory
whenever circumstances transpire rendering its execution unjust and inequitable, as where certain facts and
circumstances justifying or requiring such modification or alteration transpired after the judgment has become
final and executory.[10]

In David, we held also that where an execution order [which] has been issued is still pending, all
proceedings on the execution are still proceedings in the suit.[11] As such, modification of the execution of such
judgment is allowed.
In Torres vs. National Labor Relations Commission, 330 SCRA 311 (2000), this Court ruled that:

Execution is the final stage of litigation, the end of the suit. It cannot be frustrated except for serious reasons
demanded by justice and equity. In this jurisdiction, the rule is that when a judgment becomes final and
executory, it is the ministerial duty of the court to issue a writ of execution to enforce the judgment. A writ of
execution may however be refused on equitable grounds as when there was a change in the situation of the
parties that would make execution inequitable or when certain circumstances, which transpired after judgment
became final, rendered execution of judgment unjust. The fact that the decision has become final does not
preclude a modification or an alteration thereof because even with the finality of judgment, when its execution
becomes impossible or unjust, it may be modified or altered to harmonize the same with justice and the
facts (emphasis supplied). [12]

In Deltaventures Resources Inc. vs. Cabato, 327 SCRA 521 (2000), we held that jurisdiction once acquired
is not lost upon the instance of the parties but continues until the case is terminated.[13] The power of a voluntary
arbitrator to issue a writ of execution carries with it the power to inquire into the correctness of its execution and
to consider whatever supervening events transpire during execution.[14] Therefore, we are in agreement with the
appellate court that a voluntary arbitrator has jurisdiction to amend the mode of executing an award if and when
the case merits such amendment.
However, we find respondents reliance on the doctrine of strained relations misplaced. In Mercury Drug
Corporation vs. Quijano,[15] we stated that said doctrine is inapplicable to a situation where the employee has no
say in the operation of the employers business. Petitioners herein are part of the rank-and-file workforce; they
are cooks, miners, helpers and mechanics of the respondent.[16] As held also in the Mercury Drug case:

To protect labors security of tenure, we emphasize that the doctrine of strained relations should be strictly
applied so as not to deprive an illegally dismissed employee of his right to reinstatement. Every labor dispute
almost always results in strained relations and the phrase cannot be given an overarching interpretation,
otherwise an unjustly dismissed employee can never be reinstated.[17]

Considering the circumstances in the present case, we find that the only issue to be resolved is whether the
supervening events are grave enough to warrant a modification in the execution of the judgment. Both the
voluntary arbitrator and the Court of Appeals found that reinstatement is no longer possible due to the fact that
respondent has been continuously suffering business losses and reducing the number of its employees pending
litigation, and so the positions held by petitioners were abolished as a cost-cutting measure.[18] Petitioners argue,
however, that to excuse the respondent from reinstating the petitioners would be to allow it to do indirectly what
it was not allowed to do directly the retrenchment of the petitioners. They add that what is so scheming about
this ploy is that respondent now tries to justify its refusal to reinstate the petitioners by its very own act of
abolishing their positions.[19]
Despite our sympathy for the workers plight, however, we find no legal support for their opposition to the
conclusion and findings of the voluntary arbitrator and the Court of Appeals. On record, there is no showing
that the abolition of the petitioners positions was capricious or whimsical. The appellate court, as well as the
voluntary arbitrator, based their decisions on applicable law and the evidence. As confirmed by the appellate
court, the voluntary arbitrator also found that petitioners reinstatement had become not only inappropriate but
also impossible.
Regrettably, petitioners now raise questions the determination of which would require the Court to look
into the evidence adduced by the parties. This cannot be done in a petition for review on certiorari. It is outside
its purview under Rule 45 of the 1997 Rules of Court. Factual findings of labor officials who are deemed to
have acquired expertise in matters within their respective jurisdiction are generally accorded not only respect
but even finality, and bind us when supported by substantial evidence.[20] It is not our function to assess and
evaluate the evidence all over again, particularly where the findings of both the arbitrator and the Court of
Appeals coincide. Thus, in this case, absent a showing of an error of law committed by the court below, or of
whimsical or capricious exercise of its judgment, or a demonstrable lack of basis for its conclusions, we may
not disturb its factual findings,[21] much less reverse its judgment outright.
WHEREFORE, the instant petition is DENIED. The decision dated July 30, 1999 of the Court of Appeals
in CA-G.R. SP No. 50167, sustaining the order dated December 11, 1998 of the Arbitrator of the National
Conciliation and Mediation Board, Cordillera Administrative Region, Baguio City, is AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
G.R. No. 141471 September 18, 2000 COLEGIO DE SAN JUAN DE LETRAN, petitioner, vs. ASSOCIATION OF
EMPLOYEES AND FACULTY OF LETRAN and ELEONOR AMBAS, respondents
This is a petition for review on certiorari seeking the reversal of the Decision of the Court of Appeals,
promulgated on 9 August 1999, dismissing the petition filed by Colegio de San Juan de Letran (hereinafter,
"petitioner") and affirming the Order of the Secretary of Labor, dated December 2, 1996, finding the petitioner
guilty of unfair labor practice on two (2) counts.
The facts, as found by the Secretary of Labor and affirmed by the Court of Appeals, are as follows:

"On December 1992, Salvador Abtria, then President of respondent union, Association of Employees and
Faculty of Letran, initiated the renegotiation of its Collective Bargaining Agreement with petitioner Colegio de
San Juan de Letran for the last two (2) years of the CBA's five (5) year lifetime from 1989-1994. On the same
year, the union elected a new set of officers wherein private respondent Eleanor Ambas emerged as the newly
elected President (Secretary of Labor and Employment's Order dated December 2, 1996, p. 12).

Ambas wanted to continue the renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the
CBA was already prepared for signing by the parties. The parties submitted the disputed CBA to a referendum
by the union members, who eventually rejected the said CBA (Ibid, p. 2).

Petitioner accused the union officers of bargaining in bad faith before the National Labor Relations Commission
(NLRC). Labor Arbiter Edgardo M. Madriaga decided in favor of petitioner. However, the Labor Arbiter's
decision was reversed on appeal before the NLRC (Ibid, p. 2).
On January 1996, the union notified the National Conciliation and Mediation Board (NCMB) of its intention to
strike on the grounds (sic) of petitioner's: non-compliance with the NLRC (1) order to delete the name of Atty.
Federico Leynes as the union's legal counsel; and (2) refusal to bargain (Ibid, p. 1).

On January 18, 1996, the parties agreed to disregard the unsigned CBA and to start negotiation on a new five-
year CBA starting 1994-1999. On February 7, 1996, the union submitted its proposals to petitioner, which
notified the union six days later or on February 13, 1996 that the same had been submitted to its Board of
Trustees. In the meantime, Ambas was informed through a letter dated February 15, 1996 from her superior that
her work schedule was being changed from Monday to Friday to Tuesday to Saturday. Ambas protested and
requested management to submit the issue to a grievance machinery under the old CBA (Ibid, p. 2-3).

Due to petitioner's inaction, the union filed a notice of strike on March 13, 1996. The parties met on March 27,
1996 before the NCMB to discuss the ground rules for the negotiation. On March 29, 1996, the union received
petitioner's letter dismissing Ambas for alleged insubordination. Hence, the union amended its notice of strike
to include Ambas' dismissal. (Ibid, p. 2-3).

On April 20, 1996, both parties again discussed the ground rules for the CBA renegotiation. However, petitioner
stopped the negotiations after it purportedly received information that a new group of employees had filed a
petition for certification election (Ibid, p. 3).

On June 18, 1996, the union finally struck. On July 2, 1996, public respondent the Secretary of Labor and
Employment assumed jurisdiction and ordered all striking employees including the union president to return to
work and for petitioner to accept them back under the same terms and conditions before the actual strike.
Petitioner readmitted the striking members except Ambas. The parties then submitted their pleadings including
their position papers which were filed on July 17, 1996 ( Ibid, pp. 2-3).

On December 2, 1996, public respondent issued an order declaring petitioner guilty of unfair labor practice on
two counts and directing the reinstatement of private respondent Ambas with backwages. Petitioner filed a
motion for reconsideration which was denied in an Order dated May 29, 1997 (Petition, pp. 8-9)."[1]

Having been denied its motion for reconsideration, petitioner sought a review of the order of the Secretary
of Labor and Employment before the Court of Appeals. The appellate court dismissed the petition and affirmed
the findings of the Secretary of Labor and Employment. The dispositive portion of the decision of the Court of
Appeals sets forth:

WHEREFORE, foregoing premises considered, this Petition is DISMISSED, for being without merit in fact and
in law.

With cost to petitioner.

SO ORDERED.[2]

Hence, petitioner comes to this Court for redress.

Petitioner ascribes the following errors to the Court of Appeals:
I

THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF
DISCRETION IN AFFIRMING THE RULING OF THE SECRETARY OF LABOR AND EMPLOYMENT
WHICH DECLARES PETITIONER LETRAN GUILTY OF REFUSAL TO BARGAIN (UNFAIR LABOR
PRACTICE) FOR SUSPENDING THE COLLECTIVE BARGAINING NEGOTIATIONS WITH
RESPONDENT AEFL, DESPITE THE FACT THAT THE SUSPENSION OF THE NEGOTIATIONS WAS
BROUGHT ABOUT BY THE FILING OF A PETITION FOR CERTIFICATION ELECTION BY A RIVAL
UNION WHO CLAIMED TO COMMAND THE MAJORITY OF THE EMPLOYEES WITHIN THE
BARGAINING UNIT.

II

THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF
DISCRETION IN AFFIRMING THE RULING OF THE SECRETARY OF LABOR AND EMPLOYMENT
WHICH DECLARES PETITIONER LETRAN GUILTY OF UNFAIR LABOR PRACTICE FOR
DISMISSING RESPONDENT AMBAS, DESPITE THE FACT THAT HER DISMISSAL WAS CAUSED BY
HER INSUBORDINATE ATTITUDE, SPECIFICALLY, HER REFUSAL TO FOLLOW THE PRESCRIBED
WORK SCHEDULE.[3]

The twin questions of law before this Court are the following: (1) whether petitioner is guilty of unfair
labor practice by refusing to bargain with the union when it unilaterally suspended the ongoing negotiations for
a new Collective Bargaining Agreement (CBA) upon mere information that a petition for certification has been
filed by another legitimate labor organization? (2) whether the termination of the union president amounts to an
interference of the employees' right to self-organization?
The petition is without merit.
After a thorough review of the records of the case, this Court finds that petitioner has not shown any
compelling reason sufficient to overturn the ruling of the Court of Appeals affirming the findings of the
Secretary of Labor and Employment. It is axiomatic that the findings of fact of the Court of Appeals are
conclusive and binding on the Supreme Court and will not be reviewed or disturbed on appeal. In this case, the
petitioner failed to show any extraordinary circumstance justifying a departure from this established doctrine.
As regards the first issue, Article 252 of the Labor Code defines the meaning of the phrase "duty to bargain
collectively," as follows:

Art. 252. Meaning of duty to bargain collectively. - The duty to bargain collectively means the performance of a
mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating
an agreement with respect to wages, hours of work and all other terms and conditions of employment including
proposals for adjusting any grievances or questions arising under such agreement and executing a contract
incorporating such agreements if requested by either party but such duty does not compel any party to agree to a
proposal or to make any concession.

Noteworthy in the above definition is the requirement on both parties of the performance of the mutual
obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an
agreement. Undoubtedly, respondent Association of Employees and Faculty of Letran (AEFL) (hereinafter,
"union") lived up to this requisite when it presented its proposals for the CBA to petitioner on February 7,
1996. On the other hand, petitioner devised ways and means in order to prevent the negotiation.
Petitioner's utter lack of interest in bargaining with the union is obvious in its failure to make a timely reply
to the proposals presented by the latter. More than a month after the proposals were submitted by the union,
petitioner still had not made any counter-proposals. This inaction on the part of petitioner prompted the union to
file its second notice of strike on March 13, 1996.Petitioner could only offer a feeble explanation that the Board
of Trustees had not yet convened to discuss the matter as its excuse for failing to file its reply. This is a clear
violation of Article 250 of the Labor Code governing the procedure in collective bargaining, to wit:

Art. 250. Procedure in collective bargaining. - The following procedures shall be observed in collective
bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a
statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from
receipt of such notice.[4]

xxx
As we have held in the case of Kiok Loy vs. NLRC,[5] the company's refusal to make counter-proposal to the
union's proposed CBA is an indication of its bad faith. Where the employer did not even bother to submit an
answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively.[6] In
the case at bar, petitioner's actuation show a lack of sincere desire to negotiate rendering it guilty of unfair labor
practice.
Moreover, the series of events that transpired after the filing of the first notice of strike in January 1996
show petitioner's resort to delaying tactics to ensure that negotiation would not push through. Thus, on February
15, 1996, or barely a few days after the union proposals for the new CBA were submitted, the union president
was informed by her superior that her work schedule was being changed from Mondays to Fridays to Tuesdays
to Saturdays. A request from the union president that the issue be submitted to a grievance machinery was
subsequently denied. Thereafter, the petitioner and the union met on March 27, 1996 to discuss the ground rules
for negotiation. However, just two days later, or on March 29, 1996, petitioner dismissed the union president for
alleged insubordination. In its final attempt to thwart the bargaining process, petitioner suspended the
negotiation on the ground that it allegedly received information that a new group of employees called the
Association of Concerned Employees of Colegio (ACEC) had filed a petition for certification election. Clearly,
petitioner tried to evade its duty to bargain collectively.
Petitioner, however, argues that since it has already submitted the union's proposals to the Board of
Trustees and that a series of conferences had already been undertaken to discuss the ground rules for negotiation
such should already be considered as acts indicative of its intention to bargain. As pointed out earlier, the
evidence on record belie the assertions of petitioner.
Petitioner, likewise, claims that the suspension of negotiation was proper since by the filing of the petition
for certification election the issue on majority representation of the employees has arose. According to
petitioner, the authority of the union to negotiate on behalf of the employees was challenged when a rival union
filed a petition for certification election. Citing the case of Lakas Ng Manggagawang Makabayan v. Marcelo
Enterprises,[7] petitioner asserts that in view of the pendency of the petition for certification election, it had no
duty to bargain collectively with the union.
We disagree. In order to allow the employer to validly suspend the bargaining process there must be a valid
petition for certification election raising a legitimate representation issue. Hence, the mere filing of a petition for
certification election does not ipso facto justify the suspension of negotiation by the employer. The petition
must first comply with the provisions of the Labor Code and its Implementing Rules. Foremost is that a petition
for certification election must be filed during the sixty-day freedom period. The "Contract Bar Rule" under
Section 3, Rule XI, Book V, of the Omnibus Rules Implementing the Labor Code, provides that: " . If a
collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition
for certification election or a motion for intervention can only be entertained within sixty (60) days prior to the
expiry date of such agreement." The rule is based on Article 232,[8] in relation to Articles 253, 253-A and 256 of
the Labor Code. No petition for certification election for any representation issue may be filed after the lapse of
the sixty-day freedom period. The old CBA is extended until a new one is signed. The rule is that despite the
lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect until
a new CBA shall have been validly executed.[9] Hence, the contract bar rule still applies.[10] The purpose is to
ensure stability in the relationship of the workers and the company by preventing frequent modifications of any
CBA earlier entered into by them in good faith and for the stipulated original period.[11]
In the case at bar, the lifetime of the previous CBA was from 1989-1994. The petition for certification
election by ACEC, allegedly a legitimate labor organization, was filed with the Department of Labor and
Employment (DOLE) only on May 26, 1996. Clearly, the petition was filed outside the sixty-day freedom
period. Hence, the filing thereof was barred by the existence of a valid and existing collective bargaining
agreement. Consequently, there is no legitimate representation issue and, as such, the filing of the petition for
certification election did not constitute a bar to the ongoing negotiation. Reliance, therefore, by petitioner of the
ruling in Lakas Ng Manggagawang Makabayan v. Marcelo Enterprises[12] is misplaced since that case involved
a legitimate representation issue which is not present in the case at bar.
Significantly, the same petition for certification election was dismissed by the Secretary of Labor on
October 25, 1996. The dismissal was upheld by this Court in a Resolution, dated April 21, 1997.[13]
In view of the above, there is no doubt that petitioner is guilty of unfair labor practice by its stern refusal to
bargain in good faith with respondent union.
Concerning the issue on the validity of the termination of the union president, we hold that the dismissal
was effected in violation of the employees' right to self-organization.
To justify the dismissal, petitioner asserts that the union president was terminated for cause, allegedly for
insubordination for her failure to comply with the new working schedule assigned to her, and pursuant to its
managerial prerogative to discipline and/or dismiss its employees. While we recognize the right of the employer
to terminate the services of an employee for a just or authorized cause, nevertheless, the dismissal of employees
must be made within the parameters of law and pursuant to the tenets of equity and fair play. [14] The employer's
right to terminate the services of an employee for just or authorized cause must be exercised in good
faith.[15] More importantly, it must not amount to interfering with, restraining or coercing employees in the
exercise of their right to self-organization because it would amount to, as in this case, unlawful labor practice
under Article 248 of the Labor Code.
The factual backdrop of the termination of Ms. Ambas leads us to no other conclusion that she was
dismissed in order to strip the union of a leader who would fight for the right of her co-workers at the
bargaining table. Ms. Ambas, at the time of her dismissal, had been working for the petitioner for ten (10) years
already. In fact, she was a recipient of a loyalty award. Moreover, for the past ten (10) years her working
schedule was from Monday to Friday. However, things began to change when she was elected as union
president and when she started negotiating for a new CBA. Thus, it was when she was the union president and
during the period of tense and difficult negotiations when her work schedule was altered from Mondays to
Fridays to Tuesdays to Saturdays. When she did not budge, although her schedule was changed, she was
outrightly dismissed for alleged insubordination.[16] We quote with approval the following findings of the
Secretary of Labor on this matter, to wit:

"Assuming arguendo that Ms. Ambas was guilty, such disobedience was not, however, a valid ground to
teminate her employment. The disputed management action was directly connected with Ms. Ambas'
determination to change the complexion of the CBA. As a matter of fact, Ms. Ambas' unflinching position in
faithfully and truthfully carrying out her duties and responsibilities to her Union and its members in getting a
fair share of the fruits of their collective endeavors was the proximate cause for her dismissal, the charge of
insubordination being merely a ploy to give a color of legality to the contemplated management action to
dismiss her. Thus, the dismissal of Ms. Ambas was heavily tainted with and evidently done in bad
faith. Manifestly, it was designed to interfere with the members' right to self-organization.

Admittedly, management has the prerogative to discipline its employees for insubordination. But when the
exercise of such management right tends to interfere with the employees' right to self-organization, it amounts
to union-busting and is therefore a prohibited act. The dismissal of Ms. Ambas was clearly designed to frustrate
the Union in its desire to forge a new CBA with the College that is reflective of the true wishes and aspirations
of the Union members. Her dismissal was merely a subterfuge to get rid of her, which smacks of a pre-
conceived plan to oust her from the premises of the College. It has the effect of busting the Union, stripping it
of its strong-willed leadership. When management refused to treat the charge of insubordination as a grievance
within the scope of the Grievance Machinery, the action of the College in finally dismissing her from the
service became arbitrary, capricious and whimsical, and therefore violated Ms. Ambas' right to due process."[17]
 In this regard, we find no cogent reason to disturb the findings of the Court of Appeals affirming the
findings of the Secretary of Labor and Employment. The right to self-organization of employees must not be
interfered with by the employer on the pretext of exercising management prerogative of disciplining its
employees. In this case, the totality of conduct of the employer shows an evident attempt to restrain the
employees from fully exercising their rights under the law. This cannot be done under the Labor Code.
WHEREFORE, premises considered, the petition is DENIED for lack of merit.
SO ORDERED.

G.R. No. L-41955 December 29, 1977 ELISCO-ELIROL LABOR UNION (NAFLU) and its OFFICERS AND MEMBERS OF THE
BOARD OF DIRECTORS, petitioners vs. CARMELO NORIEL, in his capacity as Director of the Bureau of Labor Relations,
ELIZALDE STEEL CONSOLIDATED, INC. and NATIONAL FEDERATION OF LABOR UNIONS (NAFLU), respondents.

The Court sets aside respondent director's appealed resolution and rules in accordance with the prevailing law
and settled jurisprudence that the petitioner union consisting of the members-employees of respondent
corporation is the principal party to the collective bargaining agreement (rather than the respondent mother
union which is merely its agent) and is therefore entitled to be recognized as the sole and exclusive bargaining
representative entitled to administer and enforce the collective bargaining agreement with the employer
corporation.

The undisputed antecedent facts which gave rise to the present petition are stated in the petition as follows:

2. That sometime on February 1974, petitioner-Elisco Elirol Labor Union (NAFLU), negotiated
and executed a collective bargaining agreement with respondent-Elizalde Steel Consolidated,
Inc.1

3. That upon verification by individual petitioners at the Registration division, Bureau of Labor
Relations, Department of Labor, the Elisco-Elirol Labor Union (NAFLU), the contracting party
in said collective bargaining agreement, was not then registered and therefore not entitled to the
benefits and privileges embodied in said collective bargaining agreement; thus on March 3,
1975, the member of petitioner-appellant union in a general membership meeting decided in a
resolution to register their union to protect and preserve the integrity and inviolability of the
collective bargaining agreement between the Elisco-Elirol Labor Union (NAFLU) and the
Elizalde Steel Consolidated, Inc.

4. That said resolution of the members of petitioner-appellant union was passed upon by the
officers and members of the Board of Directors on May 20, 1975, at a special meeting called for
the purpose, resolution No. 6, s. 1975 was approved requesting the Acting Directors, Registration
Division, Bureau of Labor Relations, to register the union Elisco-Elirol Labor Union (NAFLU).

5. That by virtue of resolution No. 6, Petitioner-appellant union applied for registration with the
Bureau of Labor Relations, hence on May 28, 1975, Certificate of Registration No. 8511-IP was
issued by said Office.

6. That with the issuance of the certificate of registration petitioner-appellant acquired a

personality separate and distinct from any other labor union.

7. That steps were taken by petitioner-appellant to enforce the collective bargaining agreement as
the principal party to the same representing the workers covered by such agreement immediately
after the issuance of the certificate of registration.
8. That on June 10, 1975, at a special meeting called for the purpose, the general membership of
petitioner union decided that their mother union, the National Federation of Labor Unions, can
no longer safeguard the rights of its members insofar as working conditions and other terms of
employment are concerned and that the interest and welfare of petitioner can be served best if it
will stay independent and disaffiliated from said mother union, hence, the general membership
adopted a resolution to disaffiliate from the National Federation of Labor Unions.

9. That on June 11, 1975, petitioner, acting through its President Hilario Riza informed
respondents of said disaffiliation by means of a letter, and subsequently requested respondents to
recognize petitioner as the sole and exclusive bargaining representative of the employees thereof.

10. That respondent without any justifiable reason refused and continues to refuse to recognize
petitioner as the sole and exclusive bargaining representative of its employees, and, now actually
dismissed the petitioner union's officers and board members.2 In this connection, a complaint for
unfair labor practice was filed by petitioners against respondents for the latter's refusal to bargain
collectively with petitioner, which complaint is presently docketed as Case No. LR-RO4-6-1662.

11. That by virtue of said refusal of respondent company to recognize petitioner as the sole and
exclusive bargaining representative of the employees, petitioners filed a petition before the
Bureau of Labor Relations, Department of Labor on July 2, 1975, with Case No. LR-861 against
respondents Elizalde Steel Consolidated, Inc. and the National Federation of Labor Unions be
ordered to stop from presenting itself as the collective bargaining agent and pursuant thereto, a
writ of preliminary mandatory and prohibitory injunction be issued.

12. That on August 19, 1975. the Bureau of Labor Relations, through Med-Arbiter Reynaldo B.
Carta, before whom the case was beard, issued an Order dismissing the petition for lack of merit.

On appeal to respondent Director of the Bureau of Labor Relations, said respondent issued his
Resolution of October 30, 1975 affirming the dismissal of petitioner-union's petition as follows:

On February, 1974 the members of the petitioner union who were then yet affiliated with the
National Association of Free Labor Union negotiated and executed with the respondent company
a collective bargaining agreement with expiry date in November, 1976.

On May 28, 1975, after the same members, by valid resolution of the Board of directors and
approved by the general membership, have formed themselves into an i t organization and
applied for registration as a union, a certificate of registration was issued by the Department of
Labor. And on June 10, 1975 again by a valid resolution the same members disaffiliated with the
NAFLU.

The issue for resolution is —

Which of the two unions should be recognized as the sole and exclusive bargaining
representative of the employees and ultimately recognized to administer and supervise the
enforcement of the collective bargaining agreement.

Petitioner-union contends that it having the necessary interest and being the real party must be
the sole union to be recognized and given authority to bargain with the company.

Setting aside jurisprudence and the collective bargaining agreement of the parties, the
appellant is correct. For to grant to the former mother union (NAFLU) the authority to
administer and enforce their collective bargaining agreement without presumably any
 members in the bargaining unit is quite absurd. But to transfer also the authority to the newly
formed union although the members of the same were the same members who composed then
the local chapter of the mother union is also in violation of the CBA particularly article IV which
is the union security clause, wherein it is a condition for a continued employment in the
company to maintain membership in the Union. Theoreticallytherefore, when the employees
disaffiliated from the mother union and formed themselves into a new union, their status as
employees was also terminated. As such they could not therefore absolutely and legally claim
that they still comprise the majority of the bargaining unit.

Secondly, to vest, upon the new union the authority to bargain is in violation of the whole CBA,
under the theory that when the mother union (NAFLU) entered and executed the same in its
separate and distinct personality aside from the people composing the same. In fine, the CBA
then was executed by and between the company and the (NAFLU) with the latter as an entity
having its own capacity and personality different from the members composing the same.

Lastly, to preserve and avoid unstability and disorder in the labor movement as correctly ruled by
the med-arbiter, the status quo should be preserved, there being no compelling reason to alter the
same.3

Hence, the petition at bar. We find the petition to be clearly meritorious and reverse the appealed resolution.

1. Respondent director correctly perceived in his Resolution that "to grant to the former mother union (NAFLU)
the authority to administer and enforce their collective bargaining agreement without presumably any members
in the bargaining unit is quite absurd" but fell unto the grave error of holding that "When the employees
disaffiliated from the mother union and formed themselves into a new union, their status as employees was also
terminated."

His error was in not perceiving that the employees and members of the local union did not form a new union but
merely registered the local union as was their right. Petitioner Elisco-Elirol Labor Union-NAFLU, consisting of
employees and members of the local union was the principal party to the agreement. NAFLU as the "mother
union" in participation in the execution of the bargaining agreement with respondent company acted merely
as agent of the local union, which remained the basic unit of the association existing principally and freely to
serve the common interest of all its members, including the freedom to disaffiliated when the circumstances so
warranted as in the present case.

2. Contrary to respondent director's misimpression, our jurisprudence fully supports 'petitioner's stand.
In Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.4 , the Court expressly cited and affirmed
the basic principle that "(T)he locals are separate and distinct units primarily designed to secure and maintain an
equality of bargaining power between the employer and their employee-members in the economic struggle for
the fruits of the joint productive effort of labor and capital; and the association of the locals into the national
union (as PAFLU) was in furtherance of the same end.These associations are consensual entities capable of
entering into such legal relations with their members. The essential purpose was the affirmation of the local
unions into a common enterprise to increase by collective action the common bargaining power in respect of the
terms and conditions of labor. Yet the locals remained the basic units of association, free to serve their own and
the common interest of all, subject to the restraints imposed by the Constitution and By-Laws of the Association,
and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which
brought it into existence."

Corollarily, the "substitutionary" doctrine likewise fully supports petitioner's stand. Petitioner union to whom
the employees owe their allegiance has from the beginning expressly avowed that it "does not intend to change
and/or amend the provisions of the present collective bargaining agreement but only to be given the chance to
enforce the same since there is a shift of allegiance in the majority of the employees at respondent company."
As was stressed by the Court in Benguet Consolidated Inc. vs. BCI Employees & W Union-PAFLU5 —

... This principle, formulated by the NLRB as its initial compromise solution to the problem
facing it when there occurs a shift in employees' union allegiance after the execution of a
bargaining contract with their employer, merely states that even during the effectivity of a
collective bargaining agreement executed between employer and employees thru their agent, the
employees can change said agentbut the contract continues to bind then up to its expiration
date. They may bargain however for the shortening of said expiration date.

In formulating the "substitutionary" doctrine, the only consideration involved as the employees'
interest in the existing bargaining agreement. The agent's interest never entered the picture. In
fact, the justification for said doctrine was:

... that the majority of the employees, as an entity under the statute, is the true party in interest to
the contract, holding rights through the agency of the union representative. Thus, any exclusive
interest claimed by the agent is defeasible at the will of the principal.

3. It need only be mentioned finally that the Secretary of Labor in his decision of April 23, 1976 and order of
January 10, 1977 denying reconsideration in the sister unfair labor practice case and ordering respondent
corporation to immediately lift the suspension and reinstate the complainant officers and board members of
petitioner union6 has likewise adhered to the foregoing basic principles and settled jurisprudence in contrast to
respondent director (as well as therein respondent NLRC which similarly adhered to the archaic and illogical
view that the officers and board members of petitioner local union committed an "act of disloyalty" in
disaffiliating from the mother union when practically all its members had so voted to disaffiliate and the mother
union [as mere agent] no longer had any local union or members to represent), ruling that
"(G)ranting arguendo that the disaffiliation from the NAFLU is a legal cause for expulsion and dismissal, it
could not detract from the fact that only 13 individual complainants out of almost 700 members who
disaffiliated, were singled out for expulsion and recommended for dismissal. The actuation of NAFLU
conclusively constitute discrimination. Since the suspension of the complainants was effected at the instance of
NAFLU, it should be held liable to the payment of back wages."

The Presidential Assistant for Legal Affairs Ronaldo B. Zamora has likewise dismissed as untenable in a similar
case respondents' views that "such maintenance of membership" clause be distorted as "intended for the security
of the union rather than the security of tenure for the workers", ruling that "(W)hat is paramount, as it is
expressly and explicitly emphasize in an exacting language under the New Constitution, is the security of tenure
of the workers, not the security of the union. To impress, therefore, such "maintenance of membership" —
which is intended for the security of the union rather than the security of tenure of the workers — as a bar to
employees' changing their affiliation is not only to infringe on the constitutional right of freedom of association,
but also to trample upon the constitutional right of workers to security of tenure and to render meaningless
whatever "adequate social services" the State may establish or maintain in the field of employment "to
guarantee the enjoyment by the people of a decent standard of living."7

It is expected that with this decision, any suspension or lay-off of the complainants officers and board members
or employees of petitioner union arising from the respondents' misconception of the clearly applicable
principles and jurisprudence upholding the primacy of the employees and their freely chosen local union as the
true party in interest to the collective bargaining agreement will be forthwith rectified and set aside.

ACCORDINGLY, the petition is granted and the appealed resolution is set aside and petitioner local union is
declared to be the sole and exclusive bargaining representative of the employees of respondent corporation
entitled to administer and enforce any subsisting collective bargaining agreement with said employer
corporation. This decision shall be immediately executory upon its promulgation.
 Petitioner Manolo P. Samson seeks the reversal of the orders dated January 22, 2003 and November 17,
2003 issued by Presiding Judge Felix S. Caballes and Acting Presiding Judge Victoriano B. Cabanos,
respectively, of the Regional Trial Court (RTC) of Antipolo City, Branch 71, in relation to Criminal Case No.
02-23183. The assailed orders denied petitioners motion to quash the information for unfair competition filed
against him before said court.[1] Petitioner also prayed that a temporary restraining order and/or preliminary
injunction be issued to enjoin respondent judge from further proceeding with Criminal Case No. 02-23183 until
the resolution of the instant petition. The Court issued a temporary restraining order on February 18, 2004.[2]
The background facts: Petitioner was charged with the crime of unfair competition before the RTC of
Antipolo City in an Information that states:

The undersigned Senior State Prosecutor of the Department of Justice hereby accuses MANOLO P. SAMSON
for violation of Sec. 168.3 (a) in relation to Secs. 123.1 (e), 131.3 and 170 of RA 8293 otherwise known as the
Intellectual Property Code of the Philippines, committed as follows:

That on or about the first week of November 1999 and sometime prior or subsequent thereto, in Cainta, Rizal,
Philippines, and within the jurisdiction of this Honorable Court, above-named accused, owner/proprietor of
ITTI Shoes Corporation located at F.P. Felix Avenue, Cainta, Rizal, did then and there willfully, unlawfully and
feloniously distribute, sell and/or offer for sale CATERPILLAR products such as footwear, garments, clothing,
bags, accessories and paraphernalia which are closely identical to and/or colorable imitations of the authentic
Caterpillar products and likewise using trademarks, symbols and/or designs as would cause confusion, mistake
or deception on the part of the buying public to the damage and prejudice of CATERPILLAR, INC., the prior
adopter, user and owner of the following internationally famous marks: CATERPILLAR, CAT,
CATERPILLAR, CAT, CATERPILLAR & DESIGN, CAT AND DESIGN, WALKING MACHINES and
TRACK-TYPE TRACTOR & DESIGN.

CONTRARY TO LAW.[3]

G.R. No. 161693 June 28, 2005 MANOLO P. SAMSON, petitioner, vs. HON. VICTORIANO B. CABANOS, In his capacity as
Acting Presiding Judge, Regional Trial Court of Antipolo City, Branch 71, PEOPLE OF THE PHILIPPINES and
CATERPILLAR, INC., respondents.

Petitioner moved to quash the information on the ground that the court has no jurisdiction over the offense
charged in the Information. He argued that Section 170 of Republic Act (R.A.) No. 8293[4] provides that the
penalty for violation of Section 168 thereof is imprisonment from two (2) to five (5) years and a fine ranging
from fifty thousand pesos (P50,000.00) to two hundred thousand pesos (P200,000.00), and R.A. No.
7691[5] amending Batas Pambansa (B.P.) Blg. 129[6] vested the Metropolitan Trial Courts (MTC) exclusive
original jurisdiction over all offenses punishable with imprisonment not exceeding six (6) years irrespective of
the amount of the fine.[7] Presiding Judge Felix S. Caballes denied the motion for lack of merit in his order dated
January 22, 2003.[8] Petitioner filed a motion for reconsideration which was likewise denied by Acting Presiding
Judge Victoriano B. Cabanos.[9]
Petitioner filed the instant petition for certiorari before this Court on pure question of law:

Whether or not the respondent Regional Trial Court has jurisdiction over the offenses charged in the subject
information where the penalty therein range from two (2) years to five (5) years, pursuant to Section 170 of
R.A. 8293, in the light of the enactment of Republic Act No. 7691, amending B.P. Blg. 129, which vests
exclusive original jurisdiction on the Metropolitan Trial Courts over all offenses punishable with imprisonment
not exceeding six (6) years irrespective of the amount of fine, in relation to Section 163 of R.A. No. 8293.[10]

Petitioner reiterates his argument before the trial court in support of his motion to quash. He contends that
Section 170 of R.A. No. 8293 provides that the penalty to be imposed upon any person guilty of violation of
Section 168 of the law is imprisonment from two (2) to five (5) years and a fine ranging from fifty thousand
pesos (P50,000.00) to two hundred thousand pesos (P200,000.00). Under Section 2 of R.A. No. 7691, amending
Section 32 of B.P. 129, the MTC shall exercise exclusive original jurisdiction over all offenses punishable with
imprisonment not exceeding six (6) years irrespective of the fine. As petitioner is charged with an offense
penalized by imprisonment not exceeding six (6) years, the jurisdiction to try the case lies with the MTC and
not the RTC. In addition, petitioner submits that the old Trademark Law, R.A. No. 166, conferring jurisdiction
on the Courts of First Instance (now RTC) over complaints for unfair competition, has been repealed by Section
239 of R.A. No. 8293. He cites the Courts decision in Mirpuri vs. Court of Appeals.[11]
The petition must be dismissed.
It appears that petitioner had already raised the same issue and argument before this Court in the case
of Samson vs. Daway,[12] decided on July 21, 2004. That case involved exactly the same facts and issue as in
this case, except that the information for unfair competition against petitioner was filed before the RTC of
Quezon City. We held in that case:

The issues posed for resolution are - (1) Which court has jurisdiction over criminal and civil cases for violation
of intellectual property rights? xxx

Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the criminal penalty for
infringement of registered marks, unfair competition, false designation of origin and false description or
representation, is imprisonment from 2 to 5 years and a fine ranging from Fifty Thousand Pesos to Two
Hundred Thousand Pesos, to wit:

SEC. 170. Penalties. - Independent of the civil and administrative sanctions imposed by law, a criminal penalty
of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty thousand pesos (P50,000.00)
to Two hundred thousand pesos (P200,000.00) shall be imposed on any person who is found guilty of
committing any of the acts mentioned in Section 155 [Infringement], Section 168 [Unfair Competition] and
Section 169.1 [False Designation of Origin and False Description or Representation].

Corollarily, Section 163 of the same Code states that actions (including criminal and civil) under Sections 150,
155, 164, 166, 167, 168 and 169 shall be brought before the proper courts with appropriate jurisdiction under
existing laws, thus -

SEC. 163. Jurisdiction of Court. - All actions under Sections 150, 155, 164 and 166 to 169 shall be brought
before the proper courts with appropriate jurisdiction under existing laws. (Emphasis supplied)

The existing law referred to in the foregoing provision is Section 27 of R.A. No. 166 (The Trademark Law)
which provides that jurisdiction over cases for infringement of registered marks, unfair competition, false
designation of origin and false description or representation, is lodged with the Court of First Instance (now
Regional Trial Court) -

SEC. 27. Jurisdiction of Court of First Instance. - All actions under this Chapter [V - Infringement] and
Chapters VI [Unfair Competition] and VII [False Designatiion of Origin and False Description or
Representation], hereof shall be brought before the Court of First Instance.

We find no merit in the claim of petitioner that R.A. No. 166 was expressly repealed by R.A. No. 8293. The
repealing clause of R.A. No. 8293, reads -

SEC. 239. Repeals. - 239.1. All Acts and parts of Acts inconsistent herewith, more particularly Republic Act
No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised Penal Code;
Presidential Decree No. 49, including Presidential Decree No. 285, as amended, are hereby repealed. (Emphasis
added)
Notably, the aforequoted clause did not expressly repeal R.A. No. 166 in its entirety, otherwise, it would not
have used the phrases parts of Acts and inconsistent herewith; and it would have simply stated Republic Act
No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised Penal Code;
Presidential Decree No. 49, including Presidential Decree No. 285, as amended are hereby repealed. It would
have removed all doubts that said specific laws had been rendered without force and effect. The use of the
phrases parts of Acts and inconsistent herewith only means that the repeal pertains only to provisions which are
repugnant or not susceptible of harmonization with R.A. No. 8293. Section 27 of R.A. No. 166, however, is
consistent and in harmony with Section 163 of R.A. No. 8293. Had R.A. No. 8293 intended to vest jurisdiction
over violations of intellectual property rights with the Metropolitan Trial Courts, it would have expressly stated
so under Section 163 thereof.

Moreover, the settled rule in statutory construction is that in case of conflict between a general law and a special
law, the latter must prevail. Jurisdiction conferred by a special law to Regional Trial Courts must prevail over
that granted by a general law to Municipal Trial Courts.

In the case at bar, R.A. No. 8293 and R.A. No. 166 are special laws conferring jurisdiction over violations of
intellectual property rights to the Regional Trial Court. They should therefore prevail over R.A. No. 7691,
which is a general law. Hence, jurisdiction over the instant criminal case for unfair competition is properly
lodged with the Regional Trial Court even if the penalty therefor is imprisonment of less than 6 years, or from 2
to 5 years and a fine ranging from P50,000.00 to P200,000.00.

In fact, to implement and ensure the speedy disposition of cases involving violations of intellectual property
rights under R.A. No. 8293, the Court issued A.M. No. 02-1-11-SC dated February 19, 2002 designating certain
Regional Trial Courts as Intellectual Property Courts. On June 17, 2003, the Court further issued a Resolution
consolidating jurisdiction to hear and decide Intellectual Property Code and Securities and Exchange
Commission cases in specific Regional Trial Courts designated as Special Commercial Courts.

The case of Mirpuri v. Court of Appeals, invoked by petitioner finds no application in the present case.
Nowhere in Mirpuri did we state that Section 27 of R.A. No. 166 was repealed by R.A. No. 8293. Neither did
we make a categorical ruling therein that jurisdiction over cases for violation of intellectual property rights is
lodged with the Municipal Trial Courts. The passing remark in Mirpuri on the repeal of R.A. No. 166 by R.A.
No. 8293 was merely a backgrounder to the enactment of the present Intellectual Property Code and cannot thus
be construed as a jurisdictional pronouncement in cases for violation of intellectual property rights.

The foregoing ruling is the law of the case and thus lays to rest the issue posed by petitioner. We see no
reason in this case to deviate therefrom. It is a basic legal principle that whatever is once irrevocably established
as the controlling legal rule or decision between the same parties in the case continues to be the law of the case,
whether correct on general principles or not, so long as the facts on which such decision was predicated
continue to be the facts of the case before the court.[13]
IN VIEW WHEREOF, the petition is DISMISSED. The temporary restraining order issued by this Court
on February 18, 2004 is hereby LIFTED.
SO ORDERED.