ARTICLE II

Declaration of Principles and State Policies

Principles
Section 2. The Philippines renounces war as an instrument of national policy, adopts
the generally accepted principles of international law as part of the law of the land and
adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with
all nations.
Section 10. The State shall promote social justice in all phases of national
development.
Section 18. The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.

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

ARTICLE IX
Constitutional Commissions
B. The Civil Service Commission
(not found)

ARTICLE XIII
Social Justice and Human Rights
Labor
Section 3. The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment
opportunities for all.
Women
Section 14. The State shall protect working women by providing safe and healthful
working conditions, taking into account their maternal functions, and such facilities and
opportunities that will enhance their welfare and enable them to realize their full
potential in the service of the nation.
EN BANC
G.R. No. L-21278 December 27, 1966
FEATI UNIVERSITY, petitioner, vs.
HON. JOSE S. BAUTISTA, Presiding Judge of the Court of Industrial Relations
and FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondents.
----------------------------------------
G.R. No. L-21462 December 27, 1966
FEATI UNIVERSITY, petitioner-appellant, vs.
FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondent-appellee.
----------------------------------------
G.R. No. L-21500 December 27, 1966
FEATI UNIVERSITY, petitioner-appellant, vs.
FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondent-appellee.
Industrial Peace Act; Court of Industrial Relations; Jurisdiction; Entities not
organized for profit.—The Industrial Court has no jurisdiction to take cognizance of
charges of unfair labor practice filed against certain entities which are not organized,
maintained and operated for profit and which do not declare dividends to stockholders.
Same; Educational institutions organized for profit.—The Industrial Court has
jurisdiction over unfair labor practice charges against educational institutions, like the
Far Eastern " University, that are organized, operated and maintained for profit. The
Industrial Peace Act is applicable to any organization or entity—whatever may be its
purpose when it was created—that is operated for profit or gain.
Industrial Peace Act; Meaning of "employer".—Congress, in the Industrial Peace
Act, did not intend to give a complete definition of "employer", but rather it intended the
definition in section 2(c) of the law to be complementary to what is commonly
understood as employer. It intended that the term "employer" be understood in a broad
meaning.
Same; Educational institutions.—Educational institutions, that are operated for
profit, are included within the term "employer" as contemplated in the Industrial Peace
Act, since they are not among the exceptions mentioned in section 2(c) of the law.
Same; Lexical definition of employer.—The lexical definition of "employer" is one
who employs; one who uses; one who engages or keeps in service. To employ is to
provide work and pay for the service, to engage one's service.
Same.—An employer is one who employs the services of others; one for whom
employees work and who pays their wages or salaries. An employer includes any
person acting in the interest of an employer directly or indirectly. A university that
engaged the services of professors, provided them work and paid them compensation
or salary for their services is an employer even if it considers itself a mere "lessee" of
the services of said professors.
Same; Industrial establishments.—Section 2(c) of the Industrial Peace Act does
not state that the employers included in the definition of the term "employer" are only
and exclusively "industrial establishments". On the contrary, the term embraces all
employers except those specifically excluded therein.
Same.—The Industrial Peace Act does not refer exclusively to industrial
establishments and does not confine its application thereto.
Same.—For purposes of the Industrial Peace Act, a university is an industrial
establishment because it is operated for profit and it employs persons who work to earn
a living. The term "industry", for purposes of labor laws, should be given a broad
meaning so as to cover all enterprises which are operated for profit and which engage
the services of persons who work to earn a living.
Same; Employee under the Industrial Peace Act.—Under section 2(d) of the
Industrial Peace Act, the term "employee" embraces not only those who are usually
and ordinarily considered as employees but also those who have ceased as employees
as a consequence of a labor dispute. An employee is one who is engaged in the service
of another; who performs services for another; who works for salary or wages.
Same.—Professors and instructors, who are under contract to teach particular
courses and are paid for their services, are employees under the Industrial Peace Act.
Teachers are employees.
Same.—Striking professors and instructors of a university are employees
because striking employees retain their status as employees.
Same; Independent contractors; Evidence; Judicial notice.—Professors and
instructors are not independent contractors. The Court may take judicial notice that a
university controls the work of the members of its faculty; that it prescribes the courses
or subjects that they teach and the time and place for teaching; that the professor's
work is characterized by regularity and continuity for a fixed duration; that professors
are compensated for their services by wages and salaries, rather than by a share of
the profits; that professors or instructors cannot substitute others to do their work
without the consent of the university; and that they can be laid off if their work is
unsatisfactory. All these indicate that the university has control over their work and that
they are, therefore, employees and not independent contractors.
Same.—Under the Industrial Peace Act independent contractors are included in
the term "employee".
Same; Right to unionize.—University professors and instructors, as employees,
have the right to unionize. The right of employees to self-organization is guaranteed by
the Constitution. Said right would exist even if there is no Industrial Peace Act and
regardless of whether the employers are engaged in commerce or not.
Same; Meaning of labor dispute.—The test of whether a controversy comes
within the definition of "labor dispute" depends on whether the controversy involves or
concerns "terms, tenure or condition of employment" or "representation". Where the
labor union of professors and instructors employed in a university made certain
demands and declared a strike thereafter and filed a charge of unfair labor practice
against the university, a labor dispute existed between the said union and the university.
Same; Presidential certification of labor dispute to the Industrial Court.—
To certify a labor dispute to the Industrial Court is the prerogative of the President. The
Supreme Court will not interfere with such prerogative, much less curtail its exercise.
Same; Jurisdiction of Industrial Court over certified case.—The Industrial Court's
jurisdiction in a certified case is exclusive. Once the jurisdiction is acquired pursuant to
the Presidential certification, the Industrial Court may exercise its broad powers as
provided in Commonwealth Act No. 103. All phases of the labor dispute and the
employer-employee relationship may be threshed out before the Industrial Court. It may
issue such orders as may be necessary to make effective the exercise of its jurisdiction.
The parties may appeal to the Supreme Court from the order of the Industrial Court.
Same; Jurisdiction to issue a "return to work" order.— The provision in section
10 of the Industrial Peace Act, empowering the Industrial Court to issue an order "fixing
the terms of employment" are broad enough to authorize that Court to order the strikers
to return to work and the employer to readmit them.
Same.—When a case is certified to the Industrial Court by the President of the
Philippines, the Court is granted authority to find a solution to the labor dispute. The
solution, which the Court has found, under the authority of the Presidential certification
and conformable thereto, cannot be questioned.
Same.—The Industrial Court may order the strikers to work, pending the
determination of the union demands that impelled the strike.
Same; Replacements.—Employees, who took the place of strikers, do not
displace them as employees. Strikers maintain their status as employees of the
employer. A return-to-work order cannot be considered as an impairment of the contract
entered into by an employer with replacements.
Same; Propriety of "return to work order" before passing upon the legality of the
strike.—Under the facts of the case at bar, it was held that the Industrial Court acted
correctly in issuing a return-to-work order before resolving the issue of the legality or
illegality of the strike.
Same; Effect of termination of employment contract.—A return-to-work order is
proper, although the contracts of the strikers with their employer had expired. The
status of the strikers as employees became fixed because of the unfair labor practices
of their employer, which caused the strike. The strikers continued to be employees of
the employer forpurposes of the labor dispute, notwithstanding the subsequent
termination of their contracts with the employer.
Contempt; Jurisdiction of Industrial Court to punish contempt.—The Industrial
Court may punish direct or indirect contempts. It may order the arrest of an alleged
contemner.
Same; Judgment; Execution; Effectivity of awards and orders of Industrial
Court.—In cases involving strikers and lockouts, the Industrial Court may compel
compliance or obedience to its award, order or decision even if the award, order or
decision is still appealable. The power of the Industrial Court to punish for contempt an
act of disobedience to its award, order or decision, even if not yet f. inal, is a special
one and is exercised only in cases involving strikes and lockouts.
Same.—Noncompliance by the employer with a return-to-work order constitutes
contempt of court. The employer may be arrested pursuant to section 19 of
Commonwealth Act No. 103.
ORIGINAL ACTION in the Supreme Court. Certiorari and prohibition with preliminary
injunction.
PETITIONS for review by certiorari of certain orders and resolutions of the Court of
Industrial Relations.
ZALDIVAR, J.:
This Court, by resolution, ordered that these three cases be considered together, and
the parties were allowed to file only one brief for the three cases.
On January 14, 1963, the President of the respondent Feati University Faculty Club-
PAFLU — hereinafter referred to as Faculty Club — wrote a letter to Mrs. Victoria L.
Araneta, President of petitioner Feati University — hereinafter referred to as University
— informing her of the organization of the Faculty Club into a registered labor union.
The Faculty Club is composed of members who are professors and/or instructors of the
University. On January 22, 1963, the President of the Faculty Club sent another letter
containing twenty-six demands that have connection with the employment of the
members of the Faculty Club by the University, and requesting an answer within ten
days from receipt thereof. The President of the University answered the two letters,
requesting that she be given at least thirty days to study thoroughly the different phases
of the demands. Meanwhile counsel for the University, to whom the demands were
referred, wrote a letter to the President of the Faculty Club demanding proof of its
majority status and designation as a bargaining representative. On February 1, 1963,
the President of the Faculty Club again wrote the President of the University rejecting
the latter's request for extension of time, and on the same day he filed a notice of strike
with the Bureau of Labor alleging as reason therefor the refusal of the University to
bargain collectively. The parties were called to conferences at the Conciliation Division
of the Bureau of Labor but efforts to conciliate them failed. On February 18, 1963, the
members of the Faculty Club declared a strike and established picket lines in the
premises of the University, resulting in the disruption of classes in the University.
Despite further efforts of the officials from the Department of Labor to effect a settlement
of the differences between the management of the University and the striking faculty
members no satisfactory agreement was arrived at. On March 21, 1963, the President
of the Philippines certified to the Court of Industrial Relations the dispute between the
management of the University and the Faculty Club pursuant to the provisions of
Section 10 of Republic Act No. 875.
In connection with the dispute between the University and the Faculty Club and certain
incidents related to said dispute, various cases were filed with the Court of Industrial
Relations — hereinafter referred to as CIR. The three cases now before this Court
stemmed from those cases that were filed with the CIR.
CASE NO. G.R. NO. L-21278
On May 10, 1963, the University filed before this Court a "petition for certiorari and
prohibition with writ of preliminary injunction", docketed as G.R. No. L-21278, praying:
(1) for the issuance of the writ of preliminary injunction enjoining respondent Judge
Jose S. Bautista of the CIR to desist from proceeding in CIR Cases Nos. 41-IPA, 1183-
MC, and V-30; (2) that the proceedings in Cases Nos. 41-IPA and 1183-MC be
annulled; (3) that the orders dated March 30, 1963 and April 6, 1963 in Case No. 41-
IPA, the order dated April 6, 1963 in Case No. 1183-MC, and the order dated April 29,
1963 in Case No. V-30, all be annulled; and (4) that the respondent Judge be ordered
to dismiss said cases Nos. 41-IPA, 1183-MC and V-30 of the CIR.
On May 10, 1963, this Court issued a writ of preliminary injunction, upon the University's
filing a bond of P1,000.00, ordering respondent Judge Jose S. Bautista as Presiding
Judge of the CIR, until further order from this Court, "to desist and refrain from further
proceeding in the premises (Cases Nos. 41-IPA, 1183-MC and V-30 of the Court of
Industrial Relations)."1 On December 4, 1963, this Court ordered the injunction bond
increased to P100,000.00; but on January 23, 1964, upon a motion for reconsideration
by the University, this Court reduced the bond to P50,000.00.
A brief statement of the three cases — CIR Cases 41-IPA, 1183-MC and V-30 —
involved in the Case G.R. No. L-21278, is here necessary.
CIR Case No. 41-IPA, relates to the case in connection with the strike staged by the
members of the Faculty Club. As we have stated, the dispute between the University
and the Faculty Club was certified on March 21, 1963 by the President of the Philippines
to the CIR. On the strength of the presidential certification, respondent Judge Bautista
set the case for hearing on March 23, 1963. During the hearing, the Judge endeavored
to reconcile the part and it was agreed upon that the striking faculty members would
return to work and the University would readmit them under a status quo arrangement.
On that very same day, however, the University, thru counsel filed a motion to dismiss
the case upon the ground that the CIR has no jurisdiction over the case, because (1)
the Industrial Peace Act is not applicable to the University, it being an educational
institution, nor to the members of the Faculty Club, they being independent contractors;
and (2) the presidential certification is violative of Section 10 of the Industrial Peace
Act, as the University is not an industrial establishment and there was no industrial
dispute which could be certified to the CIR. On March 30, 1963 the respondent Judge
issued an order denying the motion to dismiss and declaring that the Industrial Peace
Act is applicable to both parties in the case and that the CIR had acquired jurisdiction
over the case by virtue of the presidential certification. In the same order, the
respondent Judge, believing that the dispute could not be decided promptly, ordered
the strikers to return immediately to work and the University to take them back under
the last terms and conditions existing before the dispute arose, as per agreement had
during the hearing on March 23, 1963; and likewise enjoined the University, pending
adjudication of the case, from dismissing any employee or laborer without previous
authorization from the CIR. The University filed on April 1, 1963 a motion for
reconsideration of the order of March 30, 1963 by the CIR en banc, and at the same
time asking that the motion for reconsideration be first heard by the CIR en banc.
Without the motion for reconsideration having been acted upon by the CIR en banc,
respondent Judge set the case for hearing on the merits for May 8, 1963. The University
moved for the cancellation of said hearing upon the ground that the court en
banc should first hear the motion for reconsideration and resolve the issues raised
therein before the case is heard on the merits. This motion for cancellation of the
hearing was denied. The respondent Judge, however, cancelled the scheduled hearing
when counsel for the University manifested that he would take up before the Supreme
Court, by a petition for certiorari, the matter regarding the actuations of the respondent
Judge and the issues raised in the motion for reconsideration, specially the issue
relating to the jurisdiction of the CIR. The order of March 30, 1963 in Case 41-IPA is
one of the orders sought to be annulled in the case, G.R. No. L-21278.
Before the above-mentioned order of March 30, 1963 was issued by respondent Judge,
the University had employed professors and/or instructors to take the places of those
professors and/or instructors who had struck. On April 1, 1963, the Faculty Club filed
with the CIR in Case 41-IPA a petition to declare in contempt of court certain parties,
alleging that the University refused to accept back to work the returning strikers, in
violation of the return-to-work order of March 30, 1963. The University filed, on April
5,1963, its opposition to the petition for contempt, denying the allegations of the Faculty
Club and alleging by way of special defense that there was still the motion for
reconsideration of the order of March 30, 1963 which had not yet been acted upon by
the CIR en banc. On April 6, 1963, the respondent Judge issued an order stating that
"said replacements are hereby warned and cautioned, for the time being, not to disturb
nor in any manner commit any act tending to disrupt the effectivity of the order of March
30,1963, pending the final resolution of the same."2 On April 8, 1963, there placing
professors and/or instructors concerned filed, thru counsel, a motion for reconsideration
by the CIR en banc of the order of respondent Judge of April 6, 1963. This order of April
6, 1963 is one of the orders that are sought to be annulled in case G.R. No. L-21278.
CIR Case No. 1183-MC relates to a petition for certification election filed by the Faculty
Club on March 8, 1963 before the CIR, praying that it be certified as the sole and
exclusive bargaining representative of all the employees of the University. The
University filed an opposition to the petition for certification election and at the same
time a motion to dismiss said petition, raising the very same issues raised in Case No.
41-IPA, claiming that the petition did not comply with the rules promulgated by the CIR;
that the Faculty Club is not a legitimate labor union; that the members of the Faculty
Club cannot unionize for collective bargaining purposes; that the terms of the individual
contracts of the professors, instructors, and teachers, who are members of the Faculty
Club, would expire on March 25 or 31, 1963; and that the CIR has no jurisdiction to
take cognizance of the petition because the Industrial Peace Act is not applicable to
the members of the Faculty Club nor to the University. This case was assigned to Judge
Baltazar Villanueva of the CIR. Before Judge Villanueva could act on the motion to
dismiss, however, the Faculty Club filed on April 3, 1963 a motion to withdraw the
petition on the ground that the labor dispute (Case No. 41-IPA) had already been
certified by the President to the CIR and the issues raised in Case No. 1183-MC were
absorbed by Case No. 41-IPA. The University opposed the withdrawal, alleging that
the issues raised in Case No. 1183-MC were separate and distinct from the issues
raised in Case No. 41-IPA; that the questions of recognition and majority status in Case
No. 1183-MC were not absorbed by Case No. 41-IPA; and that the CIR could not
exercise its power of compulsory arbitration unless the legal issue regarding the
existence of employer-employee relationship was first resolved. The University prayed
that the motion of the Faculty Club to withdraw the petition for certification election be
denied, and that its motion to dismiss the petition be heard. Judge Baltazar Villanueva,
finding that the reasons stated by the Faculty Club in the motion to withdraw were well
taken, on April 6, 1963, issued an order granting the withdrawal. The University filed,
on April 24, 1963, a motion for reconsideration of that order of April 6, 1963 by the
CIR en banc. This order of April 6, 1963 in Case No. 1183-MC is one of the orders
sought to be annulled in the case, G.R. No. L-21278, now before Us.
CIR Case No. V-30 relates to a complaint for indirect contempt of court filed against the
administrative officials of the University. The Faculty Club, through the Acting Chief
Prosecutor of the CIR, filed with the CIR a complaint docketed as Case No. V-30,
charging President Victoria L. Araneta, Dean Daniel Salcedo, Executive Vice-President
Rodolfo Maslog, and Assistant to the President Jose Segovia, as officials of the
University, with indirect contempt of court, reiterating the same charges filed in Case
No. 41-IPA for alleged violation of the order dated March 30, 1963. Based on the
complaint thus filed by the Acting Chief Prosecutor of the CIR, respondent Judge
Bautista issued on April 29, 1963 an order commanding any officer of the law to arrest
the above named officials of the University so that they may be dealt with in accordance
with law, and the same time fixed the bond for their release at P500.00 each. This order
of April 29, 1963 is also one of the orders sought to be annulled in the case, G.R. No.
L-2l278.
The principal allegation of the University in its petition for certiorari and prohibition with
preliminary injunction in Case G.R. No. L-21278, now before Us, is that respondent
Judge Jose S. Bautista acted without, or in excess of, jurisdiction, or with grave abuse
of discretion, in taking cognizance of, and in issuing the questioned orders in, CIR
Cases Nos. 41-IPA 1183-MC and V-30. Let it be noted that when the petition
for certiorari and prohibition with preliminary injunction was filed on May 10, 1963 in
this case, the questioned order in CIR Cases Nos. 41-IPA, 1183-MC and V-30 were
still pending action by the CIR en banc upon motions for reconsideration filed by the
University.
On June 10, 1963, the Faculty Club filed its answer to the petition for certiorari and
prohibition with preliminary injunction, admitting some allegations contained in the
petition and denying others, and alleging special defenses which boil down to the
contentions that (1) the CIR had acquired jurisdiction to take cognizance of Case No.
41-IPA by virtue of the presidential certification, so that it had jurisdiction to issue the
questioned orders in said Case No. 41-IPA; (2) that the Industrial Peace Act (Republic
Act 875) is applicable to the University as an employer and to the members of the
Faculty Club as employees who are affiliated with a duly registered labor union, so that
the Court of Industrial Relations had jurisdiction to take cognizance of Cases Nos.
1183-MC and V-30 and to issue the questioned orders in those two cases; and (3) that
the petition for certiorari and prohibition with preliminary injunction was prematurely
filed because the orders of the CIR sought to be annulled were still the subjects of
pending motions for reconsideration before the CIR en banc when said petition
for certiorari and prohibition with preliminary injunction was filed before this Court.
CASE G.R. NO. L-21462
This case, G.R. No. L-21462, involves also CIR Case No. 1183-MC. As already stated
Case No. 1183-MC relates to a petition for certification election filed by the Faculty Club
as a labor union, praying that it be certified as the sole and exclusive bargaining
representative of all employees of the University. This petition was opposed by the
University, and at the same time it filed a motion to dismiss said petition. But before
Judge Baltazar Villanueva could act on the petition for certification election and the
motion to dismiss the same, Faculty Club filed a motion to withdraw said petition upon
the ground that the issue raised in Case No. 1183-MC were absorbed by Case No. 41-
IPA which was certified by the President of the Philippines. Judge Baltazar Villanueva,
by order April 6, 1963, granted the motion to withdraw. The University filed a motion for
reconsideration of that order of April 6, 1963 by the CIR en banc. That motion for
reconsideration was pending action by the CIR en banc when the petition
for certiorariand prohibition with preliminary injunction in Case G.R. no. L-21278 was
filed on May 10, 1963. As earlier stated this Court, in Case G.R. No. L-21278, issued a
writ of preliminary injunction on May 10, 1963, ordering respondent Judge Bautista,
until further order from this Court, to desist and refrain from further proceeding in the
premises (Cases Nos. 41-IPA, 1183-MC and V-30 of the Court of Industrial Relations).
On June 5, 1963, that is, after this Court has issued the writ of preliminary injunction in
Case G.R. No. L-21278, the CIR en banc issued a resolution denying the motion for
reconsideration of the order of April 6, 1963 in Case No. 1183-MC.
On July 8, 1963, the University filed before this Court a petition for certiorari, by way of
an appeal from the resolution of the CIR en banc, dated June 5, 1963, denying the
motion for reconsideration of the order of April 6, 1963 in Case No. 1183-MC. This
petition was docketed as G.R. No. L-21462. In its petition for certiorari, the University
alleges (1) that the resolution of the Court of Industrial Relations of June 5, 1963 was
null and void because it was issued in violation of the writ of preliminary injunction
issued in Case G.R. No. L-21278; (2) that the issues of employer-employee
relationship, the alleged status as a labor union, majority representation and
designation as bargaining representative in an appropriate unit of the Faculty Club
should have been resolved first in Case No. 1183-MC prior to the determination of the
issues in Case No. 41-IPA and therefore the motion to withdraw the petition for
certification election should not have been granted upon the ground that the issues in
the first case have been absorbed in the second case; and (3) the lower court acted
without or in excess of jurisdiction in taking cognizance of the petition for certification
election and that the same should have been dismissed instead of having been ordered
withdrawn. The University prayed that the proceedings in Case No. 1183-MC and the
order of April 6, 1963 and the resolution of June 5, 1963 issued therein be annulled,
and that the CIR be ordered to dismiss Case No. 1183-MC on the ground of lack of
jurisdiction.
The Faculty Club filed its answer, admitting some, and denying other, allegations in the
petition for certiorari; and specially alleging that the lower court's order granting the
withdrawal of the petition for certification election was in accordance with law, and that
the resolution of the court en banc on June 5, 1963 was not a violation of the writ of
preliminary injunction issued in Case G.R. No. L-21278 because said writ of injunction
was issued against Judge Jose S. Bautista and not against the Court of Industrial
Relations, much less against Judge Baltazar Villanueva who was the trial judge of Case
No. 1183-MC.
CASE G.R. NO. L-21500
This case, G.R. No. L-21500, involves also CIR Case No. 41-IPA. As earlier stated,
Case No. 41-IPA relates to the strike staged by the members of the Faculty Club and
the dispute was certified by the President of the Philippines to the CIR. The University
filed a motion to dismiss that case upon the ground that the CIR has no jurisdiction over
the case, and on March 30, 1963 Judge Jose S. Bautista issued an order denying the
motion to dismiss and declaring that the Industrial Peace Act is applicable to both
parties in the case and that the CIR had acquired jurisdiction over the case by virtue of
the presidential certification; and in that same order Judge Bautista ordered the strikers
to return to work and the University to take them back under the last terms and
conditions existing before the dispute arose; and enjoined the University from
dismissing any employee or laborer without previous authority from the court. On April
1, 1963, the University filed a motion for reconsideration of the order of March 30, 1963
by the CIR en banc. That motion for reconsideration was pending action by the CIR en
banc when the petition for certiorari and prohibition with preliminary injunction in Case
G.R. No. L-21278 was filed on May 10, 1963. As we have already stated, this Court in
said case G.R. No. L-21278, issued a writ of preliminary injunction on May 10, 1963
ordering respondent Judge Jose S. Bautista, until further order from this Court, to desist
and refrain from further proceeding in the premises (Cases Nos. 41-IPA, 1183-MC and
V-30 of the Court of Industrial Relations).
On July 2, 1963, the University received a copy of the resolution of the CIR en banc,
dated May 7, 1963 but actually received and stamped at the Office of the Clerk of the
CIR on June 28, 1963, denying the motion for reconsideration of the order dated March
30, 1963 in Case No. 41-IPA.
On July 23, 1963, the University filed before this Court a petition for certiorari, by way
of an appeal from the resolution of the Court of Industrial Relations en banc dated May
7, 1963 (but actually received by said petitioner on July 2, 1963) denying the motion for
reconsideration of the order of March 30, 1963 in Case No. 41-IPA. This petition was
docketed as G.R. No. L-21500. In its petition for certiorari the University alleges (1) that
the resolution of the CIR en banc, dated May 7, 1963 but filed with the Clerk of the CIR
on June 28, 1963, in Case No. 41-IPA, is null and void because it was issued in violation
of the writ of preliminary injunction issued by this Court in G.R. No. L-21278; (2) that
the CIR, through its Presiding Judge, had no jurisdiction to take cognizance of Case
No. 41-IPA and the order of March 30, 1963 and the resolution dated May 7, 1963
issued therein are null and void; (3) that the certification made by the President of the
Philippines is not authorized by Section 10 of Republic Act 875, but is violative thereof;
(4) that the Faculty Club has no right to unionize or organize as a labor union for
collective bargaining purposes and to be certified as a collective bargaining agent within
the purview of the Industrial Peace Act, and consequently it has no right to strike and
picket on the ground of petitioner's alleged refusal to bargain collectively where such
duty does not exist in law and is not enforceable against an educational institution; and
(5) that the return-to-work order of March 30, 1963 is improper and illegal. The petition
prayed that the proceedings in Case No. 41-IPA be annulled, that the order dated
March 30, 1963 and the resolution dated May 7, 1963 be revoked, and that the lower
court be ordered to dismiss Case 41-IPA on the ground of lack of jurisdiction.
On September 10, 1963, the Faculty Club, through counsel, filed a motion to dismiss
the petition for certiorari on the ground that the petition being filed by way of an appeal
from the orders of the Court of Industrial Relations denying the motion to dismiss in
Case No. 41-IPA, the petition for certiorari is not proper because the orders appealed
from are interlocutory in nature.
This Court, by resolution of September 26, 1963, ordered that these three cases (G.R.
Nos. L-21278, L-21462 and L-21500) be considered together and the motion to dismiss
in Case G.R. No. L-21500 be taken up when the cases are decided on the merits after
the hearing.
Brushing aside certain technical questions raised by the parties in their pleadings, We
proceed to decide these three cases on the merits of the issues raised.
The University has raised several issues in the present cases, the pivotal one being its
claim that the Court of Industrial Relations has no jurisdiction over the parties and the
subject matter in CIR Cases 41-IPA, 1183-MC and V-30, brought before it, upon the
ground that Republic Act No. 875 is not applicable to the University because it is an
educational institution and not an industrial establishment and hence not an "employer"
in contemplation of said Act; and neither is Republic Act No. 875 applicable to the
members of the Faculty Club because the latter are independent contractors and,
therefore, not employees within the purview of the said Act.
In support of the contention that being an educational institution it is beyond the scope
of Republic Act No. 875, the University cites cases decided by this Court: Boy Scouts
of the Philippines vs. Juliana Araos, L-10091, Jan. 29, 1958; University of San Agustin
vs. CIR, et al., L-12222, May 28, 1958; Cebu Chinese High School vs. Philippine Land-
Air-Sea Labor Union, PLASLU, L-12015, April 22, 1959; La Consolacion College, et al.
vs. CIR, et al., L-13282, April 22, 1960; University of the Philippines, et al. vs. CIR, et
al., L-15416, April 8, 1960; Far Eastern University vs. CIR, L-17620, August 31, 1962.
We have reviewed these cases, and also related cases subsequent thereto, and We
find that they do not sustain the contention of the University. It is true that this Court
has ruled that certain educational institutions, like the University of Santo Tomas,
University of San Agustin, La Consolacion College, and other juridical entities, like the
Boy Scouts of the Philippines and Manila Sanitarium, are beyond the purview of
Republic Act No. 875 in the sense that the Court of Industrial Relations has no
jurisdiction to take cognizance of charges of unfair labor practice filed against them, but
it is nonetheless true that the principal reason of this Court in ruling in those cases that
those institutions are excluded from the operation of Republic Act 875 is that those
entities are not organized, maintained and operated for profit and do not declare
dividends to stockholders. The decision in the case of University of San Agustin vs.
Court of Industrial Relations, G.R. No. L-12222, May 28, 1958, is very pertinent. We
quote a portion of the decision:
It appears that the University of San Agustin, petitioner herein, is an educational
institution conducted and managed by a "religious non-stock corporation duly
organized and existing under the laws of the Philippines." It was organized not for
profit or gain or division of the dividends among its stockholders, but solely for
religious and educational purposes. It likewise appears that the Philippine
Association of College and University Professors, respondent herein, is a non-stock
association composed of professors and teachers in different colleges and
universities and that since its organization two years ago, the university has adopted
a hostile attitude to its formation and has tried to discriminate, harass and intimidate
its members for which reason the association and the members affected filed the
unfair labor practice complaint which initiated this proceeding. To the complaint of
unfair labor practice, petitioner filed an answer wherein it disputed the jurisdiction
of the Court of Industrial Relations over the controversy on the following grounds:
"(a) That complainants therein being college and/or university professors were
not "industrial" laborers or employees, and the Philippine Association of College
and University Professors being composed of persons engaged in the teaching
profession, is not and cannot be a legitimate labor organization within the
meaning of the laws creating the Court of Industrial Relations and defining its
powers and functions;
"(b) That the University of San Agustin, respondent therein, is not an institution
established for the purpose of gain or division of profits, and consequently, it
is not an "industrial" enterprise and the members of its teaching staff are not
engaged in "industrial" employment (U.S.T. Hospital Employees Association vs.
Sto. Tomas University Hospital, G.R. No. L-6988, 24 May 1954; and San Beda
College vs. Court of Industrial Relations and National Labor Union, G.R. No. L-
7649, 29 October 1955; 51 O.G. (Nov. 1955) 5636-5640);
"(c) That, as a necessary consequence, alleged controversy between therein
complainants and respondent is not an "industrial" dispute, and the Court of
Industrial Relations has no jurisdiction, not only on the parties but also over the
subject matter of the complaint."
The issue now before us is: Since the University of San Agustin is not an institution
established for profit or gain, nor an industrial enterprise, but one established
exclusively for educational purposes, can it be said that its relation with its professors
is one of employer and employee that comes under the jurisdiction of the Court of
Industrial Relations? In other words, do the provisions of the Magna Carta on unfair
labor practice apply to the relation between petitioner and members of respondent
association?
The issue is not new. Thus, in the case of Boy Scouts of the Philippines v. Juliana V.
Araos, G.R. No. L-10091, promulgated on January 29, 1958, this Court, speaking thru
Mr. Justice Montemayor, answered the query in the negative in the following wise:
"The main issue involved in the present case is whether or not a charitable
institution or one organized not for profit but for more elevated purposes, charitable,
humanitarian, etc., like the Boy Scouts of the Philippines, is included in the definition
of "employer" contained in Republic Act 875, and whether the employees of said
institution fall under the definition of "employee" also contained in the same
Republic Act. If they are included, then any act which may be considered unfair
labor practice, within the meaning of said Republic Act, would come under the
jurisdiction of the Court of Industrial Relations; but if they do not fall within the scope
of said Republic Act, particularly, its definitions of employer and employee, then the
Industrial Court would have no jurisdiction at all.
xxx xxx xxx
"On the basis of the foregoing considerations, there is every reason to believe that
our labor legislation from Commonwealth Act No. 103, creating the Court of
Industrial Relations, down through the Eight-Hour Labor Law, to the Industrial
Peace Act, was intended by the Legislature to apply only to industrial employment
and to govern the relations between employers engaged in industry and
occupations for purposes of profit and gain, and their industrial employees, but not
to organizations and entities which are organized, operated and maintained not for
profit or gain, but for elevated and lofty purposes, such as, charity, social service,
education and instruction, hospital and medical service, the encouragement and
promotion of character, patriotism and kindred virtues in youth of the nation, etc.
"In conclusion, we find and hold that Republic Act No. 875, particularly, that portion
thereof regarding labor disputes and unfair labor practice, does not apply to the Boy
Scouts of the Philippines, and consequently, the Court of Industrial Relations had
no jurisdiction to entertain and decide the action or petition filed by respondent
Araos. Wherefore, the appealed decision and resolution of the CIR are hereby set
aside, with costs against respondent."
There being a close analogy between the relation and facts involved in the two
cases, we cannot but conclude that the Court of Industrial Relations has no
 jurisdiction to entertain the complaint for unfair labor practice lodged by respondent It is also noteworthy that in the decisions in the cases of the Boy Scouts of the
association against petitioner and, therefore, we hereby set aside the order and Philippines, the University of San Agustin, the University of Sto. Tomas, and La
resolution subject to the present petition, with costs against respondent association. Consolacion College, this Court was not unanimous in the view that the Industrial
Peace Act (Republic Act No. 875) is not applicable to charitable, eleemosynary or non-
The same doctrine was confirmed in the case of University of Santo Tomas v. Hon.
profit organizations — which include educational institutions not operated for profit.
Baltazar Villanueva, et al., G.R. No. L-13748, October 30, 1959, where this Court ruled
There are members of this Court who hold the view that the Industrial Peace Act would
that:
apply also to non-profit organizations or entities — the only exception being the
In the present case, the record reveals that the petitioner University of Santo Tomas Government, including any political subdivision or instrumentality thereof, in so far as
is not an industry organized for profit but an institution of learning devoted governmental functions are concerned. However, in the Far Eastern University case
exclusively to the education of the youth. The Court of First Instance of Manila in its this Court is unanimous in supporting the view that an educational institution that is
decision in Civil Case No. 28870, which has long become final and consequently operated for profit comes within the scope of the Industrial Peace Act. We consider it a
the settled law in the case, found as established by the evidence adduced by the settled doctrine of this Court, therefore, that the Industrial Peace Act is applicable to
parties therein (herein petitioner and respondent labor union) that while the any organization or entity — whatever may be its purpose when it was created — that
University collects fees from its students, all its income is used for the improvement is operated for profit or gain.
and enlargement of the institution. The University declares no dividend, and the
Does the University operate as an educational institution for profit? Does it declare
members of the corporation who founded it, as ordained in its articles of
dividends for its stockholders? If it does not, it must be declared beyond the purview of
incorporation, receive no material compensation for the time and sacrifice they
Republic Act No. 875; but if it does, Republic Act No. 875 must apply to it. The
render to the University and its students. The respondent union itself in a case
University itself admits that it has declared dividends.3 The CIR in its order dated March
before the Industrial Court (Case No. 314-MC) has averred that "the University of
30, 1963 in CIR Case No. 41-IPA — which order was issued after evidence was heard
Santo Tomas, like the San Beda College, is an educational institution operated not
— also found that the University is not for strictly educational purposes and that "It
for profit but for the sole purpose of educating young men." (See Annex "B" to
realizes profits and parts of such earning is distributed as dividends to private
petitioner's motion to dismiss.). It is apparent, therefore, that on the face of the
stockholders or individuals (Exh. A and also 1 to 1-F, 2-x 3-x and 4-x)"4 Under this
record the University of Santo Tomas is not a corporation created for profit but an
circumstance, and in consonance with the rulings in the decisions of this Court, above
educational institution and therefore not an industrial or business organization.
cited, it is obvious that RA No. 875 is applicable to herein petitioner Feati University.
In the case of La Consolacion College, et al. vs. CIR, et al., G.R. No. L-13282, April 22,
But the University claims that it is not an employer within the contemplation of Republic
1960, this Court repeated the same ruling when it said:
Act No. 875, because it is not an industrial establishment. At most, it says, it is only a
The main issue in this appeal by petitioner is that the industry trial court committed lessee of the services of its professors and/or instructors pursuant to a contract of
an error in holding that it has jurisdiction to act in this case even if it involves unfair services entered into between them. We find no merit in this claim. Let us clarify who
labor practice considering that the La Consolacion College is not a business is an "employer" under the Act. Section 2(c) of said Act provides:
enterprise but an educational institution not organized for profit.
Sec. 2. Definitions.—As used in this Act —
If the claim that petitioner is an educational institution not operated for profit is true,
(c) The term employer include any person acting in the interest of an employer,
which apparently is the case, because the very court a quo found that it has no
directly or indirectly, but shall not include any labor organization (otherwise than
stockholder, nor capital . . . then we are of the opinion that the same does not come
when acting as an employer) or any one acting in the capacity or agent of such
under the jurisdiction of the Court of Industrial Relations in view of the ruling in the
labor organization.
case of Boy Scouts of the Philippines v. Juliana V. Araos, G.R. No. L-10091,
decided on January 29, 1958. It will be noted that in defining the term "employer" the Act uses the word "includes",
which it also used in defining "employee". [Sec. 2 (d)], and "representative" [Sec. 2(h)];
It is noteworthy that the cases of the University of San Agustin, the University of Santo
and not the word "means" which the Act uses in defining the terms "court" [Sec. 2(a)],
Tomas, and La Consolacion College, cited above, all involve charges of unfair labor
"labor organization" [Sec. 2(e)], "legitimate labor organization [Sec. 2(f)], "company
practice under Republic Act No. 875, and the uniform rulings of this Court are that the
union" [Sec. 2(g)], "unfair labor practice" [Sec. 2(i)], "supervisor" [Sec. 2(k)], "strike"
Court of Industrial Relations has no jurisdiction over the charges because said Act does
[Sec. 2(l)] and "lock-out" [Sec. 2(m)]. A methodical variation in terminology is manifest.
not apply to educational institutions that are not operated or maintained for profit and
This variation and distinction in terminology and phraseology cannot be presumed to
do not declare dividends. On the other hand, in the cases of Far Eastern University v.
have been the inconsequential product of an oversight; rather, it must have been the
CIR, et al., G.R. No. L-17620, August 31, 1962, this Court upheld the decision of the
result of a deliberate and purposeful act, more so when we consider that as legislative
Court of Industrial Relations finding the Far Eastern University, also an educational
records show, RA No. 875 had been meticulously and painstakingly drafted and
institution, guilty of unfair labor practice. Among the findings of fact in said case was
deliberated upon. In using the word "includes" and not "means", Congress did not
that the Far Eastern University made profits from the school year 1952-1953 to 1958-
intend to give a complete definition of "employer", but rather that such definition should
1959. In affirming the decision of the lower court, this Court had thereby ratified the
be complementary to what is commonly understood as employer. Congress intended
ruling of the Court of Industrial Relations which applied the Industrial Peace Act to
the term to be understood in a broad meaning because, firstly, the statutory definition
educational institutions that are organized, operated and maintained for profit.
includes not only "a principal employer but also a person acting in the interest of the
employer"; and, secondly, the Act itself specifically enumerated those who are not
included in the term "employer", namely: (1) a labor organization (otherwise than when
acting as an employer), (2) anyone acting in the capacity of officer or agent of such
labor organization [Sec. 2(c)], and (3) the Government and any political subdivision or
instrumentality thereof insofar as the right to strike for the purpose of securing changes
or modifications in the terms and conditions of employment is concerned (Section 11).
Among these statutory exemptions, educational institutions are not included; hence,
they can be included in the term "employer". This Court, however, has ruled that those
educational institutions that are not operated for profit are not within the purview of RA
No. 875.5
As stated above, Republic Act No. 875 does not give a comprehensive but only a
complementary definition of the term "employer". The term encompasses those that
are in ordinary parlance "employers." What is commonly meant by "employer"? The
term "employer" has been given several acceptations. The lexical definition is "one who
employs; one who uses; one who engages or keeps in service;" and "to employ" is "to
provide work and pay for; to engage one's service; to hire." (Webster's New Twentieth
Century Dictionary, 2nd ed., 1960, p. 595). The Workmen's Compensation Act defines
employer as including "every person or association of persons, incorporated or not,
public or private, and the legal representative of the deceased employer" and "includes
the owner or lessee of a factory or establishment or place of work or any other person
who is virtually the owner or manager of the business carried on in the establishment
or place of work but who, for reason that there is an independent contractor in the same,
or for any other reason, is not the direct employer of laborers employed there." [Sec.
39(a) of Act No. 3428.] The Minimum Wage Law states that "employer includes any
person acting directly or indirectly in the interest of the employer in relation to an
employee and shall include the Government and the government corporations". [Rep.
Act No. 602, Sec. 2(b)]. The Social Security Act defines employer as "any person,
natural or juridical, domestic or foreign, who carries in the Philippines any trade,
business, industry, undertaking, or activity of any kind and uses the services of another
person who is under his orders as regards the employment, except the Government
and any of its political subdivisions, branches or instrumentalities, including
corporations owned or controlled by the Government." (Rep. Act No. 1161, Sec. 8[c]).
This Court, in the cases of the The Angat River Irrigation System, et al. vs. Angat River
Workers' Union (PLUM), et al., G.R. Nos. L-10934 and L-10944, December 28, 1957,
which cases involve unfair labor practices and hence within the purview of Republic Act
No. 875, defined the term employer as follows:
An employer is one who employs the services of others; one for whom employees
work and who pays their wages or salaries (Black Law Dictionary, 4th ed., p. 618).
An employer includes any person acting in the interest of an employer, directly or
indirectly (Sec. 2-c, Rep. Act 875).
Under none of the above definitions may the University be excluded, especially so if it
is considered that every professor, instructor or teacher in the teaching staff of the
University, as per allegation of the University itself, has a contract with the latter for
teaching services, albeit for one semester only. The University engaged the services of
the professors, provided them work, and paid them compensation or salary for their
services. Even if the University may be considered as a lessee of services under a
contract between it and the members of its Faculty, still it is included in the term
"employer". "Running through the word `employ' is the thought that there has been an
agreement on the part of one person to perform a certain service in return for
compensation to be paid by an employer. When you ask how a man is employed, or
what is his employment, the thought that he is under agreement to perform some
service or services for another is predominant and paramount." (Ballentine Law
Dictionary, Philippine ed., p. 430, citing Pinkerton National Detective Agency v. Walker,
157 Ga. 548, 35 A. L. R. 557, 560, 122 S.E. Rep. 202).
To bolster its claim of exception from the application of Republic Act No. 875, the
University contends that it is not state that the employers included in the definition of 2
(c) of the Act. This contention can not be sustained. In the first place, Sec. 2 (c) of
Republic Act No. 875 does not state that the employers included in the definition of the
term "employer" are only and exclusively "industrial establishments"; on the contrary,
as stated above, the term "employer" encompasses all employers except those
specifically excluded by the Act. In the second place, even the Act itself does not refer
exclusively to industrial establishments and does not confine its application thereto.
This is patent inasmuch as several provisions of the Act are applicable to non-industrial
workers, such as Sec. 3, which deals with "employees' right to self-organization";
Sections 4 and 5 which enumerate unfair labor practices; Section 8 which nullifies
private contracts contravening employee's rights; Section 9 which relates to injunctions
in any case involving a labor dispute; Section 11 which prohibits strikes in the
government; Section 12 which provides for the exclusive collective bargaining
representation for labor organizations; Section 14 which deals with the procedure for
collective bargaining; Section 17 which treats of the rights and conditions of
membership in labor organizations; Sections 18, 19, 20 and 21 which provide
respectively for the establishment of conciliation service, compilation of collective
bargaining contracts, advisory labor-management relations; Section 22 which
empowers the Secretary of Labor to make a study of labor relations; and Section 24
which enumerates the rights of labor organizations. (See Dissenting Opinion of Justice
Concepcion in Boy Scouts of the Philippines v. Juliana Araos, G.R. No. L-10091,
January 29, 1958.)
This Court, in the case of Boy Scouts of the Philippines v. Araos, supra, had occasion
to state that the Industrial Peace Act "refers only to organizations and entities created
and operated for profits, engaged in a profitable trade, occupation or industry". It cannot
be denied that running a university engages time and attention; that it is an occupation
or a business from which the one engaged in it may derive profit or gain. The University
is not an industrial establishment in the sense that an industrial establishment is one
that is engaged in manufacture or trade where raw materials are changed or fashioned
into finished products for use. But for the purposes of the Industrial Peace Act the
University is an industrial establishment because it is operated for profit and it employs
persons who work to earn a living. The term "industry", for the purposes of the
application of our labor laws should be given a broad meaning so as to cover all
enterprises which are operated for profit and which engage the services of persons who
work to earn a living.
The word "industry" within State Labor Relations Act controlling labor relations in
industry, cover labor conditions in any field of employment where the objective is
earning a livelihood on the one side and gaining of a profit on the other. Labor Law
Sec. 700 et seq. State Labor Relations Board vs. McChesney, 27 N.Y.S. 2d 866,
868." (Words and Phrases, Permanent Edition, Vol. 21, 1960 edition p. 510).
The University urges that even if it were an employer, still there would be no employer-
employee relationship between it and the striking members of the Faculty Club because
the latter are not employees within the purview of Sec. 2(d) of Republic Act No. 875 but
are independent contractors. This claim is untenable.
Section 2 (d) of Republic Act No. 875 provides:
 (d) The term "employee" shall include any employee and shall not be limited to the
employee of a particular employer unless the act explicitly states otherwise and
shall include any individual whose work has ceased as a consequence of, or in
connection with, any current labor dispute or because of any unfair labor practice
and who has not obtained any other substantially equivalent & regular employment.
This definition is again, like the definition of the term "employer" [Sec. 2(c)], by the use
of the term "include", complementary. It embraces not only those who are usually and
ordinarily considered employees, but also those who have ceased as employees as a
consequence of a labor dispute. The term "employee", furthermore, is not limited to
those of a particular employer. As already stated, this Court in the cases of The Angat
River Irrigation System, et al. v. Angat River Workers' Union (PLUM), et al., supra, has
defined the term "employer" as "one who employs the services of others; one for whom
employees work and who pays their wages or salaries. "Correlatively, an employee
must be one who is engaged in the service of another; who performs services for
another; who works for salary or wages. It is admitted by the University that the striking
professors and/or instructors are under contract to teach particular courses and that
they are paid for their services. They are, therefore, employees of the University.
In support of its claim that the members of the Faculty Club are not employees of the
University, the latter cites as authority Francisco's Labor Laws, 2nd ed., p. 3, which
states:
While the term "workers" as used in a particular statute, has been regarded as
limited to those performing physical labor, it has been held to embrace
stenographers and bookkeepers. Teachers are not included, however.
It is evident from the above-quoted authority that "teachers" are not to be included
among those who perform "physical labor", but it does not mean that they are not
employees. We have checked the source of the authority, which is 31 Am. Jur., Sec. 3,
p. 835, and the latter cites Huntworth v. Tanner, 87 Wash 670, 152 P. 523, Ann Cas
1917 D 676. A reading of the last case confirms Our view.
That teachers are "employees' has been held in a number of cases (Aebli v. Board of
Education of City and County of San Francisco, 145 P. 2d 601, 62 Col. App 2.d 706;
Lowe & Campbell Sporting Goods Co. v. Tangipahoa Parish School Board, La. App.,
15 So. 2d 98, 100; Sister Odelia v. Church of St. Andrew, 263 N. W. 111, 112, 195
Minn. 357, cited in Words and Phrases, Permanent ed., Vol. 14, pp. 806-807). This
Court in the Far Eastern University case, supra, considered university instructors as
employees and declared RA No. 875 applicable to them in their employment relations
with their school. The professors and/or instructors of the University neither ceased to
be employees when they struck, for Section 2 of Rep. Act 875 includes among
employees any individual whose work has ceased as consequence of, or in connection
with a current labor dispute. Striking employees maintain their status as employees of
the employer. (Western Cartridge Co. v. NLRB, C.C.A. 7, 139 F2d 855, 858).
The contention of the University that the professors and/or instructors are independent
contractors, because the University does not exercise control over their work, is
likewise untenable. This Court takes judicial notice that a university controls the work
of the members of its faculty; that a university prescribes the courses or subjects that
professors teach, and when and where to teach; that the professors' work is
characterized by regularity and continuity for a fixed duration; that professors are
compensated for their services by wages and salaries, rather than by profits; that the
professors and/or instructors cannot substitute others to do their work without the
consent of the university; and that the professors can be laid off if their work is found
not satisfactory. All these indicate that the university has control over their work; and
professors are, therefore, employees and not independent contractors. There are
authorities in support of this view.
The principal consideration in determining whether a workman is an employee or
an independent contractor is the right to control the manner of doing the work, and
it is not the actual exercise of the right by interfering with the work, but the right to
control, which constitutes the test. (Amalgamated Roofing Co. v. Travelers' Ins. Co.,
133 N.E. 259, 261, 300 Ill. 487, quoted in Words and Phrases, Permanent ed., Vol.
14, p. 576).
Where, under Employers' Liability Act, A was instructed when and where to work .
. . he is an employee, and not a contractor, though paid specified sum per square.
(Heine v. Hill, Harris & Co., 2 La. App. 384, 390, in Words and Phrases, loc, cit.) .
Employees are those who are compensated for their labor or services by wages
rather than by profits. (People vs. Distributors Division, Smoked Fish Workers Union
Local No. 20377, Sup. 7 N. Y. S. 2d 185, 187 in Words and Phrases, loc, cit.)
Services of employee or servant, as distinguished from those of a contractor, are
usually characterized by regularity and continuity of work for a fixed period or one
of indefinite duration, as contrasted with employment to do a single act or a series
of isolated acts; by compensation on a fixed salary rather than one regulated by
value or amount of work; . . . (Underwood v. Commissioner of Internal Revenue,
C.C.A., 56 F. 2d 67, 71 in Words and Phrases, op. cit., p. 579.)
Independent contractors can employ others to work and accomplish contemplated
result without consent of contractee, while "employee" cannot substitute another in
his place without consent of his employer. (Luker Sand & Gravel Co. v. Industrial
Commission, 23 P. 2d 225, 82 Utah, 188, in Words and Phrases, Vol. 14, p. 576).
Moreover, even if university professors are considered independent contractors, still
they would be covered by Rep. Act No. 875. In the case of the Boy Scouts of the
Philippines v. Juliana Araos, supra, this Court observed that Republic Act No. 875 was
modelled after the Wagner Act, or the National Labor Relations Act, of the United
States, and this Act did not exclude "independent contractors" from the orbit of
"employees". It was in the subsequent legislation — the Labor Management Relation
Act (Taft-Harley
Act) — that "independent contractors" together with agricultural laborers, individuals in
domestic service of the home, supervisors, and others were excluded. (See
Rothenberg on Labor Relations, 1949, pp. 330-331).
It having been shown that the members of the Faculty Club are employees, it follows
that they have a right to unionize in accordance with the provisions of Section 3 of the
Magna Carta of Labor (Republic Act No. 875) which provides as follows:
Sec. 3. Employees' right to self-organization.—Employees shall have the right to
self-organization and to form, join or assist labor organizations of their own choosing
for the purpose of collective bargaining through representatives of their own
choosing and to engage in concerted activities for the purpose of collective
bargaining and other mutual aid or protection. . . .
We agree with the statement of the lower court, in its order of March 30, 1963 which is
sought to be set aside in the instant case, that the right of employees to self-
organization is guaranteed by the Constitution, that said right would exist even if
Republic Act No. 875 is repealed, and that regardless of whether their employers are
engaged in commerce or not. Indeed, it is Our considered view that the members of
the faculty or teaching staff of private universities, colleges, and schools in the
Philippines, regardless of whether the university, college or school is run for profit or
not, are included in the term "employees" as contemplated in Republic Act No. 875 and
as such they may organize themselves pursuant to the above-quoted provision of
Section 3 of said Act. Certainly, professors, instructors or teachers of private
educational institutions who teach to earn a living are entitled to the protection of our
labor laws — and one such law is Republic Act No. 875.
The contention of the University in the instant case that the members of the Faculty
Club can not unionize and the Faculty Club can not exist as a valid labor organization
is, therefore, without merit. The record shows that the Faculty Club is a duly registered
labor organization and this fact is admitted by counsel for the University.5a
The other issue raised by the University is the validity of the Presidential certification.
The University contends that under Section 10 of Republic Act No. 875 the power of
the President of the Philippines to certify is subject to the following conditions, namely:
(1) that here is a labor dispute, and (2) that said labor dispute exists in an industry that
is vital to the national interest. The University maintains that those conditions do not
obtain in the instant case. This contention has also no merit.
We have previously stated that the University is an establishment or enterprise that is
included in the term "industry" and is covered by the provisions of Republic Act No.
875. Now, was there a labor dispute between the University and the Faculty Club?
Republic Act No. 875 defines a labor dispute as follows:
The term "labor dispute" includes any controversy concerning terms, tenure or
conditions of employment, or concerning the association or representation of
persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms
or conditions of employment regardless of whether the disputants stand in
proximate relation of employer and employees.
The test of whether a controversy comes within the definition of "labor dispute" depends
on whether the controversy involves or concerns "terms, tenure or condition of
employment" or "representation." It is admitted by the University, in the instant case,
that on January 14, 1963 the President of the Faculty Club wrote to the President of
the University a letter informing the latter of the organization of the Faculty Club as a
labor union, duly registered with the Bureau of Labor Relations; that again on January
22, 1963 another letter was sent, to which was attached a list of demands consisting of
26 items, and asking the President of the University to answer within ten days from date
of receipt thereof; that the University questioned the right of the Faculty Club to be the
exclusive representative of the majority of the employees and asked proof that the
Faculty Club had been designated or selected as exclusive representative by the vote
of the majority of said employees; that on February 1, 1963 the Faculty Club filed with
the Bureau of Labor Relations a notice of strike alleging as reason therefor the refusal
of the University to bargain collectively with the representative of the faculty members;
that on February 18, 1963 the members of the Faculty Club went on strike and
established picket lines in the premises of the University, thereby disrupting the
schedule of classes; that on March 1, 1963 the Faculty Club filed Case No. 3666-ULP
for unfair labor practice against the University, but which was later dismissed (on April
2, 1963 after Case 41-IPA was certified to the CIR); and that on March 7, 1963 a petition
for certification election, Case No. 1183-MC, was filed by the Faculty Club in the
CIR.6 All these admitted facts show that the controversy between the University and
the Faculty Club involved terms and conditions of employment, and the question of
representation. Hence, there was a labor dispute between the University and the
Faculty Club, as contemplated by Republic Act No. 875. It having been shown that the
University is an institution operated for profit, that is an employer, and that there is an
employer-employee relationship, between the University and the members of the
Faculty Club, and it having been shown that a labor dispute existed between the
University and the Faculty Club, the contention of the University, that the certification
made by the President is not only not authorized by Section 10 of Republic Act 875 but
is violative thereof, is groundless.
Section 10 of Republic Act No. 875 provides:
When in the opinion of the President of the Philippines there exists a labor dispute
in an industry indispensable to the national interest and when such labor dispute is
certified by the President to the Court of Industrial Relations, said Court may cause
to be issued a restraining order forbidding the employees to strike or the employer
to lockout the employees, and if no other solution to the dispute is found, the Court
may issue an order fixing the terms and conditions of employment.
This Court had occasion to rule on the application of the above-quoted provision of
Section 10 of Republic Act No. 875. In the case of Pampanga Sugar Development Co.
v. CIR, et al., G.R. No. L-13178, March 24, 1961, it was held:
It thus appears that when in the opinion of the President a labor dispute exists in an
industry indispensable to national interest and he certifies it to the Court of Industrial
Relations the latter acquires jurisdiction to act thereon in the manner provided by
law. Thus the court may take either of the following courses: it may issue an order
forbidding the employees to strike or the employer to lockout its employees, or,
failing in this, it may issue an order fixing the terms and conditions of employment.
It has no other alternative. It can not throw the case out in the assumption that the
certification was erroneous.
xxx xxx xxx
. . . The fact, however, is that because of the strike declared by the members of the
minority union which threatens a major industry the President deemed it wise to
certify the controversy to the Court of Industrial Relations for adjudication. This is
the power that the law gives to the President the propriety of its exercise being a
matter that only devolves upon him. The same is not the concern of the industrial
court. What matters is that by virtue of the certification made by the President the
case was placed under the jurisdiction of said court. (Emphasis supplied)
To certify a labor dispute to the CIR is the prerogative of the President under the law,
and this Court will not interfere in, much less curtail, the exercise of that prerogative.
The jurisdiction of the CIR in a certified case is exclusive (Rizal Cement Co., Inc. v.
Rizal Cement Workers Union (FFW), et al., G.R. No. L-12747, July 30, 1960). Once the
jurisdiction is acquired pursuant to the presidential certification, the CIR may exercise
its broad powers as provided in Commonwealth Act 103. All phases of the labor dispute
and the employer-employee relationship may be threshed out before the CIR, and the
CIR may issue such order or orders as may be necessary to make effective the exercise
of its jurisdiction. The parties involved in the case may appeal to the Supreme Court
from the order or orders thus issued by the CIR.
And so, in the instant case, when the President took into consideration that the
University "has some 18,000 students and employed approximately 500 faculty
members", that `the continued disruption in the operation of the University will
necessarily prejudice the thousand of students", and that "the dispute affects the
national interest",7and certified the dispute to the CIR, it is not for the CIR nor this Court
to pass upon the correctness of the reasons of the President in certifying the labor
dispute to the CIR.
The third issue raised by the University refers to the question of the legality of the return-
to-work order (of March 30, 1963 in Case 41-IPA) and the order implementing the same
(of April 6, 1963). It alleges that the orders are illegal upon the grounds: (1) that
Republic Act No. 875, supplementing Commonwealth Act No. 103, has withdrawn from
the CIR the power to issue a return-to-work order; (2) that the only power granted by
Section 10 of Republic Act No. 875 to the CIR is to issue an order forbidding the
employees to strike or forbidding the employer to lockout the employees, as the case
may be, before either contingency had become a fait accompli; (3) that the taking in by
the University of replacement professors was valid, and the return-to-work order of
March 30, 1963 constituted impairment of the obligation of contracts; and (4) the CIR
could not issue said order without having previously determined the legality or illegality
of the strike.
The contention of the University that Republic Act No. 875 has withdrawn the power of
the Court of Industrial Relations to issue a return-to-work order exercised by it under
Commonwealth Act No. 103 can not be sustained. When a case is certified by the
President to the Court of Industrial Relations, the case thereby comes under the
operation of Commonwealth Act No. 103, and the Court may exercise the broad powers
and jurisdiction granted to it by said Act. Section 10 of Republic Act No. 875 empowers
the Court of Industrial Relations to issue an order "fixing the terms of employment." This
clause is broad enough to authorize the Court to order the strikers to return to work and
the employer to readmit them. This Court, in the cases of the Philippine Marine Officers
Association vs. The Court of Industrial Relations, Compania Maritima, et al.;
and Compañia Martima, et al. vs. Philippine Marine Radio Officers Association and
CIR, et al., G.R. Nos. L-10095 and L-10115, October 31, 1957, declared:
We cannot subscribe to the above contention. We agree with counsel for the
Philippine Radio Officers' Association that upon certification by the President under
Section 10 of Republic Act 875, the case comes under the operation of
Commonwealth Act 103, which enforces compulsory arbitration in cases of labor
disputes in industries indispensable to the national interest when the President
certifies the case to the Court of Industrial Relations. The evident intention of the
law is to empower the Court of Industrial Relations to act in such cases, not only in
the manner prescribed under Commonwealth Act 103, but with the same broad
powers and jurisdiction granted by that act. If the Court of Industrial Relations is
granted authority to find a solution to an industrial dispute and such solution consists
in the ordering of employees to return back to work, it cannot be contended that the
Court of Industrial Relations does not have the power or jurisdiction to carry that
solution into effect. And of what use is its power of conciliation and arbitration if it
does not have the power and jurisdiction to carry into effect the solution it has
adopted? Lastly, if the said court has the power to fix the terms and conditions of
employment, it certainly can order the return of the workers with or without backpay
as a term or condition of employment.
The foregoing ruling was reiterated by this Court in the case of Hind Sugar Co. v. CIR,
et al., G.R. No. L-13364, July 26, 1960.
When a case is certified to the CIR by the President of the Philippines pursuant to
Section 10 of Republic Act No. 875, the CIR is granted authority to find a solution to the
industrial dispute; and the solution which the CIR has found under the authority of the
presidential certification and conformable thereto cannot be questioned (Radio
Operators Association of the Philippines vs. Philippine Marine Radio Officers
Association, et al., L-10112, Nov. 29, 1957, 54 O.G. 3218).
Untenable also is the claim of the University that the CIR cannot issue a return-to-work
order after strike has been declared, it being contended that under Section 10 of
Republic Act No. 875 the CIR can only prevent a strike or a lockout — when either of
this situation had not yet occurred. But in the case of Bisaya Land Transportation Co.,
Inc. vs. Court of Industrial Relations, et al., No. L-10114, Nov. 26, 1957, 50 O.G. 2518,
this Court declared:
There is no reason or ground for the contention that Presidential certification of labor
dispute to the CIR is limited to the prevention of strikes and lockouts. Even after a
strike has been declared where the President believes that public interest demands
arbitration and conciliation, the President may certify the ease for that purpose. The
practice has been for the Court of Industrial Relations to order the strikers to
work, pending the determination of the union demands that impelled the strike.
There is nothing in the law to indicate that this practice is abolished." (Emphasis)
Likewise untenable is the contention of the University that the taking in by it of
replacements was valid and the return-to-work order would be an impairment of its
contract with the replacements. As stated by the CIR in its order of March 30, 1963, it
was agreed before the hearing of Case 41-IPA on March 23, 1963 that the strikers
would return to work under the status quo arrangement and the University would
readmit them, and the return-to-work order was a confirmation of that agreement. This
is a declaration of fact by the CIR which we cannot disregard. The faculty members, by
striking, have not abandoned their employment but, rather, they have only ceased from
their labor (Keith Theatre v. Vachon et al., 187 A. 692). The striking faculty members
have not lost their right to go back to their positions, because the declaration of a strike
is not a renunciation of their employment and their employee relationship with the
University (Rex Taxicab Co. vs. CIR, et al., 40 O.G., No. 13, 138). The employment of
replacements was not authorized by the CIR. At most, that was a temporary expedient
resorted to by the University, which was subject to the power of the CIR to allow to
continue or not. The employment of replacements by the University prior to the
issuance of the order of March 30, 1963 did not vest in the replacements a permanent
right to the positions they held. Neither could such temporary employment bind the
University to retain permanently the replacements.
Striking employees maintained their status as employees of the employer (Western
Castridge Co. v. National Labor Relations Board, C.C.A. 139 F. 2d 855, 858) ; that
employees who took the place of strikers do not displace them as `employees." '
(National Labor Relations Board v. A. Sartorius & Co., C.C.A. 2, 140 F. 2d 203, 206,
207.)
It is clear from what has been said that the return-to-work order cannot be considered
as an impairment of the contract entered into by petitioner with the replacements.
Besides, labor contracts must yield to the common good and such contracts are subject
to the special laws on labor unions, collective bargaining, strikes and similar subjects
(Article 1700, Civil Code).
Likewise unsustainable is the contention of the University that the Court of Industrial
Relations could not issue the return-to-work order without having resolved previously
the issue of the legality or illegality of the strike, citing as authority therefor the case
of Philippine Can Company v. Court of Industrial Relations, G.R. No. L-3021, July 13,
1950. The ruling in said case is not applicable to the case at bar, the facts and
circumstances being very different. The Philippine Can Company case, unlike the
instant case, did not involve the national interest and it was not certified by the
President. In that case the company no longer needed the services of the strikers, nor
did it need substitutes for the strikers, because the company was losing, and it was
imperative that it lay off such laborers as were not necessary for its operation in order
to save the company from bankruptcy. This was the reason of this Court in ruling, in
that case, that the legality or illegality of the strike should have been decided first before
the issuance of the return-to-work order. The University, in the case before Us, does
not claim that it no longer needs the services of professors and/or instructors; neither
does it claim that it was imperative for it to lay off the striking professors and instructors
because of impending bankruptcy. On the contrary, it was imperative for the University
to hire replacements for the strikers. Therefore, the ruling in the Philippine Can case
that the legality of the strike should be decided first before the issuance of the return-
to-work order does not apply to the case at bar. Besides, as We have adverted to, the
return-to-work order of March 30, 1963, now in question, was a confirmation of an
agreement between the University and the Faculty Club during a prehearing
conference on March 23, 1963.
The University also maintains that there was no more basis for the claim of the
members of the Faculty Club to return to their work, as their individual contracts for
teaching had expired on March 25 or 31, 1963, as the case may be, and consequently,
there was also no basis for the return-to-work order of the CIR because the contractual
relationships having ceased there were no positions to which the members of the
Faculty Club could return to. This contention is not well taken. This argument loses
sight of the fact that when the professors and instructors struck on February 18, 1963,
they continued to be employees of the University for the purposes of the labor
controversy notwithstanding the subsequent termination of their teaching contracts, for
Section 2(d) of the Industrial Peace Act includes among employees "any individual
whose work has ceased a consequence of, or in connection with, any current labor
dispute or of any unfair labor practice and who has not obtained any other substantially
equivalent and regular employment."
The question raised by the University was resolved in a similar case in the United
States. In the case of Rapid Roller Co. v. NLRB 126 F. 2d 452, we read:
On May 9, 1939 the striking employees, 84 in number, offered to the company to
return to their employment. The company believing it had not committed any unfair
labor practice, refused the employees' offer and claimed the right to employ others
to take the place of the strikers, as it might see fit. This constituted discrimination in
the hiring and tenure of the striking employees. When the employees went out on a
strike because of the unfair labor practice of the company, their status as employees
for the purpose of any controversy growing out of that unfair labor practice was
fixed. Sec. 2 (3) of the Act. Phelps Dodge Corp. v. National Labor Relations Board,
313 U.S. 177, 61 S. Ct. 845, 85. L. ed. 1271, 133 A.L.R. 1217.
For the purpose of such controversy they remained employees of the company. The
company contended that they could not be their employees in any event since the
"contract of their employment expired by its own terms on April 23, 1939."
In this we think the company is mistaken for the reason we have just pointed out,
that the status of the employees on strike became fixed under Sec. 2 (3) of the Act
because of the unfair labor practice of the company which caused the strike.
The University, furthermore, claims that the information for indirect contempt filed
against the officers of the University (Case No. V-30) as well as the order of April 29,
1963 for their arrest were improper, irregular and illegal because (1) the officers of the
University had complied in good faith with the return-to-work order and in those cases
that they did not, it was due to circumstance beyond their control; (2) the return-to-work
order and the order implementing the same were illegal; and (3) even assuming that
the order was legal, the same was not Yet final because there was a motion to
reconsider it.
Again We find no merit in this claim of Petitioner. We have already ruled that the CIR
had jurisdiction to issue the order of March 30, 1963 in CIR Case 41-IPA, and the return-
to-work provision of that order is valid and legal. Necessarily the order of April 6, 1963
implementing that order of March 30, 1963 was also valid and legal.
Section 6 of Commonwealth Act No. 103 empowers the Court of Industrial Relations of
any Judge thereof to punish direct and indirect contempts as provided in Rule 64 (now
Rule 71) of the Rules of Court, under the same procedure and penalties provided
therein. Section 3 of Rule 71 enumerates the acts which would constitute indirect
contempt, among which is "disobedience or resistance to lawful writ, process, order,
judgment, or command of a court," and the person guilty thereof can be punished after
a written charge has been filed and the accused has been given an opportunity to be
heard. The last paragraph of said section provides:
But nothing in this section shall be so construed as to prevent the court from issuing
process to bring the accused party into court, or from holding him in custody pending
such proceedings.
The provision authorizes the judge to order the arrest of an alleged contemner
(Francisco, et al. v. Enriquez, L-7058, March 20, 1954, 94 Phil., 603) and this,
apparently, is the provision upon which respondent Judge Bautista relied when he
issued the questioned order of arrest.
The contention of petitioner that the order of arrest is illegal is unwarranted. The return-
to-work order allegedly violated was within the court's jurisdiction to issue.
Section 14 of Commonwealth Act No. 103 provides that in cases brought before the
Court of Industrial Relations under Section 4 of the Act (referring to strikes and lockouts)
the appeal to the Supreme Court from any award, order or decision shall not stay the
execution of said award, order or decision sought to be reviewed unless for special
reason the court shall order that execution be stayed. Any award, order or decision that
is appealed is necessarily not final. Yet under Section 14 of Commonwealth Act No.
103 that award, order or decision, even if not yet final, is executory, and the stay of
execution is discretionary with the Court of Industrial Relations. In other words, the
Court of Industrial Relations, in cases involving strikes and lockouts, may compel
compliance or obedience of its award, order or decision even if the award, order or
decision is not yet final because it is appealed, and it follows that any disobedience or
non-compliance of the award, order or decision would constitute contempt against the
Court of Industrial Relations which the court may punish as provided in the Rules of
Court. This power of the Court of Industrial Relations to punish for contempt an act of
non-compliance or disobedience of an award, order or decision, even if not yet final, is
a special one and is exercised only in cases involving strikes and lockouts. And there
is reason for this special power of the industrial court because in the exercise of its
jurisdiction over cases involving strikes and lockouts the court has to issue orders or
make decisions that are necessary to effect a prompt solution of the labor dispute that
caused the strike or the lockout, or to effect the prompt creation of a situation that would
be most beneficial to the management and the employees, and also to the public —
even if the solution may be temporary, pending the final determination of the case.
Otherwise, if the effectiveness of any order, award, or decision of the industrial court in
cases involving strikes and lockouts would be suspended pending appeal then it can
happen that the coercive powers of the industrial court in the settlement of the labor
disputes in those cases would be rendered useless and nugatory.
The University points to Section 6 of Commonwealth Act No. 103 which provides that
"Any violation of any order, award, or decision of the Court of Industrial Relations shall
after such order, award or decision has become final, conclusive
and executory constitute contempt of court," and contends that only the disobedience
of orders that are final (meaning one that is not appealed) may be the subject of
contempt proceedings. We believe that there is no inconsistency between the above-
quoted provision of Section 6 and the provision of Section 14 of Commonwealth Act
No. 103. It will be noted that Section 6 speaks of order, award or decision that
is executory. By the provision of Section 14 an order, award or decision of the Court of
Industrial Relations in cases involving strikes and lockouts are immediately executory,
so that a violation of that order would constitute an indirect contempt of court.
We believe that the action of the CIR in issuing the order of arrest of Apri 29, 1963 is
also authorized under Section 19 of Commonwealth Act No. 103 which provides as
follows:
SEC. 19. Implied condition in every contract of employment.—In every contract of
employment whether verbal or written, it is an implied condition that when any dispute
between the employer and the employee or laborer has been submitted to the Court
of Industrial Relations for settlement or arbitration pursuant to the provisions of this
Act . . . and pending award, or decision by the Court of such dispute . . . the employee
or laborer shall not strike or walk out of his employment when so enjoined by the
Court after hearing and when public interest so requires, and if he has already done
so, that he shall forthwith return to it, upon order of the Court, which shall be issued
only after hearing when public interest so requires or when the dispute cannot, in its
opinion, be promptly decided or settled; and if the employees or laborers fail to return
to work, the Court may authorize the employer to accept other employees or laborers.
A condition shall further be implied that while such dispute . . . is pending, the
employer shall refrain from accepting other employees or laborers, unless with the
express authority of the Court, and shall permit the continuation in the service of his
employees or laborers under the last terms and conditions existing before the dispute
arose. . . . A violation by the employer or by the employee or laborer of such an order
or the implied contractual condition set forth in this section shall constitute contempt
of the Court of Industrial Relations & shall be punished by the Court itself in the same
manner w/the same penalties as in the case of contempt of a CFI. . . .
We hold that the CIR acted within its jurisdiction when it ordered the arrest of the officers
of the University upon a complaint for indirect contempt filed by the Acting Special
Prosecutor of the CIR in CIR Case V-30, and that order was valid. Besides those
ordered arrested were not yet being punished for contempt; but, having been charged,
they were simply ordered arrested to be brought before the Judge to be dealt with
according to law. Whether they are guilty of the charge or not is yet to be determined
in a proper hearing.
Let it be noted that the order of arrest dated April 29, 1963 in CIR Case V-30 is being
questioned in Case G.R. No. L-21278 before this Court in a special civil action
for certiorari. The University did not appeal from that order. In other words, the only
question to be resolved in connection with that order in CIR Case V-30 is whether the
CIR had jurisdiction, or had abused its discretion, in issuing that order. We hold that the
CIR had jurisdiction to issue that order, and neither did it abuse its discretion when it
issued that order.
In Case G.R. No. L-21462 the University appealed from the order of Judge Villanueva
of the CIR in Case No. 1183-MC, dated April 6, 1963, granting the motion of the Faculty
Club to withdraw its petition for certification election, and from the resolution of the
CIR en banc, dated June 5, 1963, denying the motion to reconsider said order of April
6, 1963. The ground of the Faculty Club in asking for the withdrawal of that petition for
certification election was because the issues involved in that petition were absorbed by
the issues in Case 41-IPA. The University opposed the petition for withdrawal, but at
the same time it moved for the dismissal of the petition for certification election.
It is contended by the University before this Court, in G.R. L-21462, that the issues of
employer-employee relationship between the University and the Faculty Club, the
alleged status of the Faculty Club as a labor union, its majority representation and
designation as bargaining representative in an appropriate unit of the Faculty Club
should have been resolved first in Case No. 1183-MC prior to the determination of the
issues in Case No. 41-IPA, and, therefore, the motion to withdraw the petition for
certification election should not have been granted upon the ground that the issues in
the first case were absorbed in the second case.
We believe that these contentions of the University in Case G.R. No. L-21462 have
been sufficiently covered by the discussion in this decision of the main issues raised in
the principal case, which is Case G.R. No. L-21278. After all, the University wanted CIR
Case 1183-MC dismissed, and the withdrawal of the petition for certification election
had in a way produced the situation desired by the University. After considering the
arguments adduced by the University in support of its petition for certiorari by way of
appeal in Case G.R. No. L-21278, We hold that the CIR did not commit any error when
it granted the withdrawal of the petition for certification election in Case No. 1183-MC.
The principal case before the CIR is Case No. 41-IPA and all the questions relating to
the labor disputes between the University and the Faculty Club may be threshed out,
and decided, in that case.
In Case G.R. No. L-21500 the University appealed from the order of the CIR of March
30, 1963, issued by Judge Bautista, and from the resolution of the CIR en
banc promulgated on June 28, 1963, denying the motion for the reconsideration of that
order of March 30, 1963, in CIR Case No. 41-IPA. We have already ruled that the CIR
has jurisdiction to issue that order of March 30, 1963, and that order is valid, and We,
therefore, hold that the CIR did not err in issuing that order of March 30, 1963 and in
issuing the resolution promulgated on June 28, 1963 (although dated May 7, 1963)
denying the motion to reconsider that order of March 30, 1963.
IN VIEW OF THE FOREGOING, the petition for certiorari and prohibition with
preliminary injunction in Case G.R. No. L-21278 is dismissed and the writs prayed for
therein are denied. The writ of preliminary injunction issued in Case G.R. No. L-21278
is dissolved. The orders and resolutions appealed from, in Cases Nos. L-21462 and L-
21500, are affirmed, with costs in these three cases against the petitioner-appellant
Feati University. It is so ordered.
Footnotes
1
As quoted from the writ of preliminary injunction issued by this Court.
2
As quoted from the order of April 6, 1963.
3
Petitioner's brief p. 29; also pp. 8-9 petitioner's reply brief.
4
See order as copied on p. 118 of petitioner's brief.
5
We have pointed out that this is not a unanimous view of this Court.
5a
See p. 140, Record of G. R. No. L-21278.
6
Petitioner's Brief, pp. 1, 2, 3, 7 and 8.
7
Words in quotation marks are as quoted from the letter of certification of the President
dated March 21, 1963 addressed to the Presiding Judge of the CIR.
THIRD DIVISION
G.R. No. 103560 July 6, 1995
GOLD CITY INTEGRATED PORT SERVICE, INC. (INPORT), petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION (Fifth Division) ADELO EBUNA,
EMMANUEL VALMORIDA, RODOLFO PEREZ, ROGER ZAGADO, MARCOS
GANZAN, AND REY VALLE, (WILFREDO DAHAN, ROGELIO VILLAFUERTE,
WILFREDO AMPER, RICARDO ABA, YOLITO AMBUS, FIDEL CALIO, VICENTE
CAHATOL, SOTECO CUENCA, NICOLAS DALAGUAN, BALBINO FAJARDO,
ROLANDO JAMILA, RICARDO LAURETO, RUDY LAURETO, QUIRICO LEJANIO,
OSCAR LAPINIG, FELIPE LAURETE, JESUSTUDY OMISOL, ZOSIMO OMISOL,
PEDRO SUAREZ, SATURNINO SISIBAN and MANUEL YANEZ), respondents.
G.R. No. 103599 July 6, 1995
ADELO EBUNA, WILFREDO DAHAN, RICARDO LAURETO, REY VALLE, VICENTE
CAHATOL, MARCOS GANZAN, RODOLFO PEREZ, ROEL SAA, ROGELIO
VILLAFUERTE, MANUEL YANEZ, WILFREDO AMPER, QUIRECO LEJANO,
EMMANUEL VALMORIA, ROLANDO JAMILLA, NICOLAS DALAGUAN, BALBINO
FAJARDO, PEDRO SUAREZ, ELPIDIO ESTROGA, RUBEN PAJO, JESUSTODY
OMISOL, RICARDO ABA, FIDEL CALIO, SATURNINO SESYBAN, RUDY
LAURETO, OSCAR LAPINIG, FELIPE LAURENTE, ROGER ZAGADO, SOTECO
CUENCA, FIDEL ESLIT, ZOSIMO OMISOL, ANGEL BERNIDO, and MICHAEL
YAGOTYOT, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, FIFTH
DIVISION, and GOLD CITY INTEGRATED PORT SERVICES, INC. (INPORT),
respondents.
Labor Law; Strikes; A strike is defined as any temporary stoppage of work by the
concerted action of employees as a result of an industrial or labor dispute; What a labor
dispute includes.—A strike, considered as the most effective weapon of labor, is
defined as any temporary stoppage of work by the concerted action of employees as a
result of an industrial or labor dispute. A labor dispute includes any controversy or
matter concerning terms or conditions of employment or the association or
representation of persons in negotiating, fixing, maintaining, changing or arranging the
terms and conditions of employment, regardless of whether or not the disputants stand
in the proximate relation of employers and employees.
Same; Same; What transpired on April 30, 1985 was clearly a strike for the
cessation of work by concerted action resulted from a labor dispute.—Private
respondents and their co-workers stopped working and held the mass action on April
30, 1985 to press for their wages and other benefits. What transpired then was clearly
a strike, for the cessation of work by concerted action resulted from a labor dispute.
Same; Same; Arbiter correctly ruled that the strike was illegal for failure to comply
with the requirements of Article 264 paragraph (c) and (f) of the Labor Code.—The
complaint before the Labor Arbiter involved the legality of said strike. The Arbiter
correctly ruled that the strike was illegal for failure to comply with the requirements of
Article 264 (now Article 263) paragraphs (c) and (f) of the Labor Code.
Same; Same; The language of the law leaves no room for doubt that the cooling-
off period and the seven-day strike ban after the strikevote report were intended to be
mandatory.—As we stated in the case of
National Federation of Sugar Workers v. Ovejera, the language of the law leaves
no room for doubt that the cooling-off period and the seven-day strike ban after the
strike-vote report were intended to be mandatory.
Same; Same; The strike on April 30, 1985 was illegal for failure to comply with
the requirements of the law.—From the foregoing, it is patent that the strike on April 30,
1985 was illegal for failure to comply with the requirements of the law.
Same; Same; Distinction between workers and union officers who participated in
illegal strikes.—A union officer who knowingly participates in an illegal strike and any
worker or union officer who knowingly participates in the commission of illegal acts
during a strike may be declared to have lost their employment status. An ordinary
striking worker cannot be terminated for mere participation in an illegal strike. There
must be proof that he committed illegal acts during a strike. A union officer, on the other
hand, may be terminated from work when he knowingly participates in an illegal strike,
and like other workers, when he commits an illegal act during a strike.
Same; Dismissal; Reinstatement; An employee is entitled to reinstatement and
to his full backwages when he is unjustly dismissed.—Under the law, an employee is
entitled to reinstatement and to his full backwages when he is unjustly dismissed.
Same; Same; Same; Reinstatement and backwages are separate and distinct
reliefs given to an illegally dismissed employee.—Rein-statement means restoration to
a state or condition from which one had been removed or separated. Reinstatement
and backwages are separate and distinct reliefs given to an illegally dismissed
employee.
Same; Same; Well-settled is it that separation pay shall be allowed only in those
instances where the employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character.—Hence, an employee dismissed
for causes other than those cited above is not entitled to separation pay. Well-settled
is it that separation pay shall be allowed only in those instances where the employee is
validly dismissed for causes other than serious misconduct or those reflecting on his
moral character.
Same; Same; Backwages; Backwages is a form of relief that restores the income
that was lost by reason of unlawful dismissal.—Backwages, on the other hand, is a
form of relief that restores the income that was lost by reason of unlawful dismissal.
Same; Same; Same; There must generally be unjust or illegal dismissal from
work, before reinstatement and backwages may be granted.—It is clear from the
foregoing summary of legal provisions and jurisprudence that there must generally be
unjust or illegal dismissal from work, before reinstatement and backwages may be
granted. And in cases where reinstatement is not possible or when dismissal is due to
valid causes, separation pay may be granted.
Same; Same; A worker merely participating in an illegal strike may not be
terminated from his employment.—Under Article 264 of the Labor Code, a worker
merely participating in an illegal strike may not be terminated from his employment. It
is only when he commits illegal acts during a strike that he may be declared to have
lost his employment status. Since there appears no proof that these union members
committed illegal acts during the strike, they cannot be dismissed. The striking union
members among private respondents are thus entitled to reinstatement, there being no
just cause for their dismissal.
Same; Same; For knowingly participating in an illegal strike, the law mandates
that a union officer may be terminated from employ-ment.—The fate of private
respondent-union officers is different. Their insistence on unconditional reinstatement
or separation pay and backwages is unwarranted and unjustified. For knowingly
participating in an illegal strike, the law mandates that a union officer may be terminated
from employment.
Same; Same; The law, in using the word “may,” grants the employer the option
of declaring a union officer who participated in an illegal strike as having lost his
employment.—Notwithstanding the fact that INPORT previously accepted other union
officers and that the screening required by it was uncalled for, still it cannot be gainsaid
that it possessed the right and prerogative to terminate the union officers from service.
The law, in using the word may, grants the employer the option of declaring a union
officer who participated in an illegal strike as having lost his employment.
SPECIAL CIVIL ACTIONS in the Supreme Court. Certiorari.
ROMERO, J.:
Should separation pay and backwages be awarded by public respondent NLRC to
participants of an illegal strike? This is the core issue to be decided in these two
petitions.
Gold City Integrated Port Service, Inc. (INPORT) filed a petition for certiorari against
the National Labor Relations Commission (NLRC) assailing the latter's decision in
"Gold City Integrated Port Services, Inc. v. Adelo Ebuna, et al." (NLRC RAB X Case
No. 5-0405-85) with twenty-seven private respondents (G.R. No. 103599).1 This
petition has been consolidated with G.R. No. 103599 where the petitioners are the
private respondents in instant case and the private respondent is INPORT. For the sake
of clarity, INPORT shall be denominated in the case at bench as the petitioner and the
employees as private respondents.
Instant case arose from the following facts:
Early in the morning of April 30, 1985, petitioner's employees stopped working and
gathered in a mass action to express their grievances regarding wages, thirteenth
month pay and hazard pay. Said employees were all members of the Macajalar Labor
Union — Federation of Free Workers (MLU-FFW) with whom petitioner had an existing
collective bargaining agreement.
Petitioner was engaged in stevedoring and arrastre services at the port of Cagayan de
Oro. The strike paralyzed operations at said port.
On the same morning, the strikers filed individual notices of strike ("Kaugalingon nga
Declarasyon sa Pag-Welga") with the then Ministry of Labor and Employment.
With the failure of conciliation conferences between petitioner and the strikers, INPORT
filed a complaint before the Labor Arbiter for Illegal Strike with prayer for a restraining
order/preliminary injunction.
On May 7, 1985, the National Labor Relations Commission issued a temporary
restraining order. Thereafter, majority of the strikers returned to work, leaving herein
private respondents who continued their protest.2
Counsel for private respondents filed a manifestation that petitioner required prior
screening conducted by the MLU-FFW before the remaining strikers could be accepted
back to work.
Meanwhile, counsel for the Macajalar Labor Union (MLU-FFW) filed a "Motion to Drop
Most of the Party Respondents From the Above Entitled Case." The 278 employees on
whose behalf the motion was filed, claimed that they were duped or tricked into signing
the individual notices of strike. After discovering this deception and verifying that the
strike was staged by a minority of the union officers and members and without the
approval of, or consultation with, majority of the union members, they immediately
withdrew their notice of strike and returned to work.
The petitioner INPORT, not having interposed any objection, the Labor Arbiter, in his
decision dated July 23, 1985, granted their prayer to be excluded as respondents in the
complaint for illegal strike. Moreover, petitioner's complaint was directed against the 31
respondents who did not return to work and continued with the strike.
For not having complied with the formal requirements in Article 264 of the Labor
Code,3 the strike staged by petitioner's workers on April 30, 1985 was found by the
Labor Arbiter to be illegal.4 The workers who participated in the illegal strike did not,
however, lose their employment, since there was no evidence that they participated in
illegal acts. After noting that petitioner accepted the other striking employees back to
work, the Labor Arbiter held that the private respondents should similarly be allowed to
return to work without having to undergo the required screening to be undertaken by
their union (MLU-FFW).
As regards the six private respondents who were union officers, the Labor Arbiter ruled
that they could not have possibly been "duped or tricked" into signing the strike notice
for they were active participants in the conciliation meetings and were thus fully aware
of what was going on. Hence, said union officers should be accepted back to work after
seeking reconsideration from herein petitioner.5
The dispositive portion of the decision reads:
IN VIEW OF THE FOREGOING, it is hereby ordered that the strike undertaken by
the officers and majority union members of Macajalar Labor Union-FFW is ILLEGAL
contrary to Article 264 of the Labor Code, as amended. Our conclusion on the
employment status of the illegal strikers is subject to our discussion above.6
Both petitioner and private respondents filed motions for reconsideration, which public
respondent NLRC treated as appeals.7
On January 14, 1991, the NLRC affirmed with modification8 the Arbiter's decision. It
held that the concerted action by the workers was more of a "protest action" than a
strike. Private respondents, including the six union officers, should also be allowed to
work unconditionally to avoid discrimination. However, in view of the strained relations
between the parties, separation pay was awarded in lieu of reinstatement. The decretal
portion of the Resolution reads:
WHEREFORE, the decision appealed from is Affirmed with modification in
accordance with the foregoing resolution. Complainant INPORT is hereby ordered,
in lieu of reinstatement, to pay respondents the equivalent of twelve (12) months
salaries each as separation pay. Complainant is further ordered to pay respondents
two (2) years backwages based on their last salaries, without qualification or
deduction. The appeal of complainant INPORT is Dismissed for lack of merit.9
Upon petitioner's motion for reconsideration, public respondent modified the above
resolution on December 12, 1991. 10
The Commission ruled that since private respondents were not actually terminated from
service, there was no basis for reinstatement. However, it awarded six months' salary
as separation pay or financial assistance in the nature of "equitable relief." The award
for backwages was also deleted for lack of factual and legal basis. In lieu of backwages,
compensation equivalent to P1,000.00 was given.
The dispositive portion of the assailed Resolution reads:
WHEREFORE, the resolution of January 14, 1991 is Modified reducing the award
for separation pay to six (6) months each in favor of respondents, inclusive of lawful
benefits as well as those granted under the CBA, if any, based on the latest salary
of respondents, as and by way of financial assistance while the award for
backwages is Deleted and Set Aside. In lieu thereof, respondents are granted
compensation for their sudden loss of employment in the sum of P1,000.00 each.
The motion of respondents to implead PPA as third-party respondent is Noted.
 Except for this modification the rest of the decision sought to be reconsidered shall
stand. 11
In the instant petitions for certiorari, petitioner alleges that public respondent
Commission committed grave abuse of discretion in awarding private respondents
separation pay and backwages despite the declaration that the strike was illegal.
On the other hand, private respondents, in their petition, assail the reduction of
separation pay and deletion of backwages by the NLRC as constituting grave abuse of
discretion.
They also allege that the Resolution of January 14, 1991 could not be reconsidered
after the unreasonable length of time of eleven months.
Before proceeding with the principal issues raised by the parties, it is necessary to
clarify public respondent's statements concerning the strike staged by INPORT's
employees.
In its resolution dated January 14, 1991, the NLRC held that the facts prevailing in the
case at bench require a relaxation of the rule that the formal requisites for a declaration
of a strike are mandatory. Furthermore, what the employees engaged in was more of
a spontaneous protest action than a strike. 12
Nevertheless, the Commission affirmed the Labor Arbiter's decision which declared the
strike illegal.
A strike, considered as the most effective weapon of labor, 13 is defined as any
temporary stoppage of work by the concerted action of employees as a result of an
industrial or labor dispute. 14 A labor dispute includes any controversy or matter
concerning terms or conditions of employment or the association or representation of
persons in negotiating, fixing, maintaining, changing or arranging the terms and
conditions of employment, regardless of whether or not the disputants stand in the
proximate relation of employers and employees. 15
Private respondents and their co-workers stopped working and held the mass action
on April 30, 1985 to press for their wages and other benefits. What transpired then was
clearly a strike, for the cessation of work by concerted action resulted from a labor
dispute.
The complaint before the Labor Arbiter involved the legality of said strike. The Arbiter
correctly ruled that the strike was illegal for failure to comply with the requirements of
Article 264 (now Article 263) paragraphs (c) and (f) of the Labor Code. 16
The individual notices of strike filed by the workers did not conform to the notice
required by the law to be filed since they were represented by a union (MLU-FFW)
which even had an existing collective bargaining agreement with INPORT.
Neither did the striking workers observe the strike vote by secret ballot, cooling-off
period and reporting requirements.
17
As we stated in the case of National Federation of Sugar Workers v. Ovejera, the
language of the law leaves no room for doubt that the cooling-off period and the seven-
day strike ban after the strike-vote report were intended to be mandatory. 18
Article 265 of the Labor Code reads, inter alia:
(i)t SHALL be unlawful for any labor organization . . . to declare a strike . . . without
first having filed the notice required in the preceding Article or without the necessary
strike vote first having been obtained and reported to the Ministry. (Emphasis ours)
In explaining the above provision, we said:
In requiring a strike notice and a cooling-off period, the avowed intent of the law
is to provide an opportunity for mediation and conciliation. It thus directs the
MOLE to exert all efforts at mediation and conciliation to effect a voluntary
settlement' during the cooling-off period. . . .
xxx xxx xxx
The cooling-off period and the 7-day strike ban after the filing of a strike-vote
report, as prescribed in Art. 264 of the Labor Code, are reasonable restrictions
and their imposition is essential to attain the legitimate policy objectives
embodied in the law. We hold that they constitute a valid exercise of the police
power of the state. 19
From the foregoing, it is patent that the strike on April 30, 1985 was illegal for failure to
comply with the requirements of the law.
The effects of such illegal strikes, outlined in Article 265 (now Article 264) of the Labor
Code, make a distinction between workers and union officers who participate therein.
A union officer who knowingly participates in an illegal strike and any worker or union
officer who knowingly participates in the commission of illegal acts during a strike may
be declared to have lost their employment status. 20 An ordinary striking worker cannot
be terminated for mere participation in an illegal strike. There must be proof that he
committed illegal acts during a strike. A union officer, on the other hand, may be
terminated from work when he knowingly participates in an illegal strike, and like other
workers, when he commits an illegal act during a strike.
In the case at bench, INPORT accepted the majority of the striking workers, including
union officers, back to work. Private respondents were left to continue with the strike
after they refused to submit to the "screening" required by the company. 21
The question to be resolved now is what these remaining strikers, considering the
circumstances of the case, are entitled to receive under the law, if any.
Are they entitled, as they claim, to reinstatement or separation pay and backwages?
In his decision, the Labor Arbiter ordered INPORT to reinstate/accept the remaining
workers as well as to accept the remaining union officers after the latter sought
reconsideration from INPORT. 22
The NLRC on January 14, 1991, modified the above decision by ordering INPORT to
pay private respondents the equivalent of twelve months in salary as separation pay in
lieu of reinstatement and two years' backwages. 23
On reconsideration, public respondent modified its original award and reduced the
separation pay to six months, deleted the award for backwages and instead awarded
P1,000.00 as compensation for their sudden loss of employment. 24
Under the law, an employee is entitled to reinstatement and to his full backwages when
he is unjustly dismissed. 25
Reinstatement means restoration to a state or condition from which one had been
removed or separated. Reinstatement and backwages are separate and distinct reliefs
given to an illegally dismissed employee. 26
Separation pay is awarded when reinstatement is not possible, due, for instance, to
strained relations between employer and employee.
It is also given as a form of financial assistance when a worker is dismissed in cases
such as the installation of labor saving devices, redundancy, retrenchment to prevent
losses, closing or cessation of operation of the establishment, or in case the employee
was found to have been suffering from a disease such that his continued employment
is prohibited by law. 27
Separation pay is a statutory right defined as the amount that an employee receives at
the time of his severance from the service and is designed to provide the employee
with the wherewithal during the period that he is looking for another employment. 28 It
is oriented towards the immediate future, the transitional period the dismissed
employee must undergo before locating a replacement job. 29
Hence, an employee dismissed for causes other than those cited above is not entitled
to separation pay. 30Well-settled is it that separation pay shall be allowed only in those
instances where the employee is validly dismissed
for causes other than serious misconduct or those reflecting on his moral character. 31
Backwages, on the other hand, is a form of relief that restores the income that was lost
by reason of unlawful dismissal. 32
It is clear from the foregoing summary of legal provisions and jurisprudence that there
must generally be unjust or illegal dismissal from work, before reinstatement and
backwages may be granted. And in cases where reinstatement is not possible or when
dismissal is due to valid causes, separation pay may be granted.
Private respondents contend that they were terminated for failure to submit to the
controversial "screening" requirement.
Public respondent Commission took the opposite view and held:
As the evidence on record will show, respondents were not actually terminated from
the service. They were merely made to submit to a screening committee as a
prerequisite for readmission to work. While this condition was found not wholly
justified, the fact remains that respondents who are resistant to such procedure are
partly responsible for the delay in their readmission back to work. Thus, We find
justifiable basis in further modifying our resolution of January 14, 1991 in
accordance with the equities of the case.
We shall therefore recall the award for backwages for lack of factual and legal basis.
The award for separation pay shall likewise (be) reasonably reduced. Normally,
severance benefit is granted as an alternative remedy to reinstatement. And since
there is no dismissal to speak of, there is no basis for awarding reinstatement as a
legal remedy. In lieu thereof, We shall grant herein respondents separation pay as
and by way of financial assistance in the nature of an "equitable relief". 33
We find that private respondents were indeed dismissed when INPORT refused to
accept them back to work after the former refused to submit to the "screening" process.
Applying the law (Article 264 of the Labor Code) which makes a distinction, we
differentiate between the union members and the union officers among private
respondents in granting the reliefs prayed for.
Under Article 264 of the Labor Code, a worker merely participating in an illegal strike
may not be terminated from his employment. It is only when he commits illegal acts
during a strike that he may be declared to have lost his employment status. Since there
appears no proof that these union members committed illegal acts during the strike,
they cannot be dismissed. The striking union members among private respondents are
thus entitled to reinstatement, there being no just cause for their dismissal.
However, considering that a decade has already lapsed from the time the disputed
strike occurred, we find that to award separation pay in lieu of reinstatement would be
more practical and appropriate.
No backwages will be awarded to private respondent-union members as a penalty for
their participation in the illegal strike. Their continued participation in said strike, even
after most of their co-workers had returned to work, can hardly be rewarded by such an
award.
The fate of private respondent-union officers is different. Their insistence on
unconditional reinstatement or separation pay and backwages is unwarranted and
unjustified. For knowingly participating in an illegal strike, the law mandates that a union
officer may be terminated from employment. 34
Notwithstanding the fact that INPORT previously accepted other union officers and that
the screening required by it was uncalled for, still it cannot be gainsaid that it possessed
the right and prerogative to terminate the union officers from service. The law, in using
the word may, grants the employer the option of declaring a union officer who
participated in an illegal strike as having lost his employment. 35
Moreover, an illegal strike which, more often than not, brings about unnecessary
economic disruption and chaos in the workplace should not be countenanced by a
relaxation of the sanctions prescribed by law.
The union officers are, therefore, not entitled to any relief.
However, the above disquisition is now considered moot and academic and cannot be
effected in view of a manifestation filed by INPORT dated May 15, 1987. 36 In said
Manifestation, it attached a Certification by the President of the Macajalar Labor Union
(MLU-FFW) to the effect that the private respondents/remaining strikers have ceased
to be members of said union. The MLU-FFW had an existing collective bargaining
agreement with INPORT containing a union security clause. Article 1, Section 2(b) of
the CBA provides:
The corporation shall discharge, dismiss or terminate any employee who may be a
member of the Union but loses his good standing with the Union and or corporation,
upon proper notice of such fact made by the latter; provided, however, . . . after they
shall have received the regular appointment as a condition for his continued
employment with the corporation. . . . 37
Since private respondents (union members) are no longer members of the MLU, they
cannot be reinstated. In lieu of reinstatement, which was a proper remedy before May
1987 when they were dismissed from the union, we award them separation pay. We
find that to award one month salary for every year of service until 1985, after April of
which year they no longer formed part of INPORT's productive work force partly through
their own fault, is a fair settlement.
Finally, there is no merit in INPORT's statement that a Resolution of the NLRC cannot
be modified upon reconsideration after the lapse of an unreasonable period of time.
Under the present circumstances, a period of eleven months is not an unreasonable
length of time. The Resolution of the public respondent dated January 14, 1991 did not
acquire finality in view of the timely filing of a motion for reconsideration. Hence, the
Commission's modified Resolution issued on December 12, 1991 is valid and in
accordance with law.
In sum, reinstatement and backwages or, if no longer feasible, separation pay, can only
be granted if sufficient bases exist under the law, particularly after a showing of illegal
dismissal. However, while the union members may thus be entitled under the law to be
reinstated or to receive separation pay, their expulsion from the union in accordance
with the collective bargaining agreement renders the same impossible.
The NLRC's award of separation pay as "equitable relief" and P1,000.00 as
compensation should be deleted, these being incompatible with our findings detailed
above.
WHEREFORE, from the foregoing premises, the petition in G.R. No. 103560 ("Gold
City Integrated Port Service Inc. v. National Labor Relations Commission, et al.") is
GRANTED. One month salary for each year of service until 1985 is awarded to private
respondents who were not union officers as separation pay. The petition in G.R. No.
103599 ("Adelo Ebuna, et al. v. National Labor Relations Commission, et al.") is
DISMISSED for lack of merit. No costs. SO ORDERED.
Footnotes
1 Namely, Adelo Ebuna, Wilfredo Dahan, Ricardo Laureto, Rey Valle, Vicente Cahatol,
Marcos Ganzan, Rodolfo Perez, Roel Saa, Rogelio Villafuerte, Manuel Yanez, Wilfredo
Amper, Quireco Lejano, Emmanuel Valmoria, Rolando Jamilla, Nicolas Dalaguan,
Balbino Fajardo, Pedro Suarez, Elpidio Estroga, Ruben Pajo, Jesustody Omisol,
Ricardo Aba, Fidel Calio, Saturnino Sesyban, Rudy Laureto, Oscar Lapinig, Felipe
Laurente, Roger Zagado, Soteco Cuenca, Fidel Eslit, Zosimo Omisol, Angel Bernido
and Michael Yagotyot.
2 Of the thirty-one remaining strikers, four have already died, leaving the twenty-seven
respondents herein.
3 Now Article 263.
4 Decision of Executive Labor Arbiter Ildefonso O. Agbuya, dated July 23, 1985, NLRC
RABX Case No. 5-0405-85. Rollo, p. 57.
5 Decision of the Labor Arbiter, p. 11; Rollo, p. 66.
6 Ibid., p. 66.
7 On May 20, 1987, petitioner filed a Manifestation to the effect that the 32 remaining
striking employees have ceased to be members of the Macajalar Labor Union — FFW,
per Certification dated May 15, 1987 by the President of MLU-FFW. Rollo, p. 84.
8 Resolution penned by Presiding Commissioner Musib M. Buat and concurred in by
Commissioner Leon G. Gonzaga, Jr., Commissioner Oscar N. Abella, on leave. Rollo,
p. 85.
9 Rollo, p. 105.
10 Penned by Presiding Commissioner Musib M. Buat, with Commissioners Oscar N.
Abella and Leon G. Gonzaga, Jr., concurring. Rollo, p. 119.
11 Rollo, p. 124.
12 Rollo, pp. 96-98.
13 Bisig ng Manggagawa sa Concrete Aggregates Inc. v. NLRC, G.R. No. 105090,
September 16, 1993, 226 SCRA 499; Ilaw at Buklod ng Manggagawa v. NLRC, G.R.
No. 91980, June 27, 1991, 198 SCRA 586.
14 Labor Code, Article 212 (0).
15 Labor Code, Article 212 (1).
16 Article 264. Strikes, picketing, and lockouts. —
(c) In cases of bargaining deadlocks, the certified or duly recognized bargaining
representative may file a notice of strike . . . with the Ministry at least thirty (30) days
before the intended date thereof. In cases of unfair labor practices, the period of strike
shall be shortened to fifteen (15) days; and in the absence of a duly certified or
recognized bargaining representative, the notice of strike may be filed by any legitimate
labor organization in behalf of its members.
xxx xxx xxx
(f) A decision to declare a strike must be approved by at least two-thirds (2/3) of the
total union membership in the bargaining unit concerned obtained by secret ballot in
meetings or referenda. . . . In every case, the union . . . shall furnish the Ministry the
results of the voting at least seven (7) days before the intended strike . . . , subject to
the cooling-off period herein provided. (Emphasis supplied)
17 G.R. No. L-59743, May 31, 1982, 114 SCRA 354.
18 Ibid., p. 365.
19 Ibid., at p. 367.
20 Labor Code, Article 265 (now Article 264).
21 The screening was allegedly requested by the Macajalar Labor Union of petitioner
INPORT upon the belief that a competing union, the National Federation of Labor,
influenced its members into staging the strike. INPORT points out that it agreed to the
screening requirement because it merely wanted to avoid further friction with the union
(MLU-FFW). Rollo, pp. 120-121.
22 Rollo, p. 66.
23 Rollo, p. 105.
24 Rollo, p. 124.
25 Labor Code, Article 279.
26 Torillo v. Leogardo, G.R. No. 77205, May 27, 1991, 197 SCRA 471; Indophil Acrylic
Mfg. Corp. v. NLRC, G.R. No. 96488, September 27, 1993, 226 SCRA 723.
27 Labor Code, Articles 283 and 284; Lemery Savings and Loan Bank v. NLRC, G.R.
No. 96439, January 27, 1992, 205 SCRA 492; Banco Filipino Savings and Mortgage
Bank v. NLRC, G.R. No. 82135, August 20, 1990, 188 SCRA 700.
28 A Prime Security Services Inc. v. NLRC, G.R. No. 93476, March 19, 1993, 220
SCRA 142 citing PLDT v. NLRC 164 SCRA 671, Del Castillo v. NLRC, 176 SCRA 229
and Cosmopolitan Funeral Homes v. Maalat, 187 SCRA 108; Aquino v. NLRC, G.R.
No. 87653, February 11, 1992, 206 SCRA 118.
29 Escareal v. NLRC, G.R. No. 99359, September 2, 1992, 213 SCRA 472.
30 Article 279 and 282; Rule 1, Section 7, Book VI, Omnibus Implementing Rules of
the Labor Code.
31 PLDT v. NLRC, G.R. No. L-80609, Aug. 23, 1988, 164 SCRA 671; Sampaguita
Garments Corp. v. NLRC, G.R. No. 102406, June 17, 1994, 233 SCRA 260; Cathedral
School of Technology, G.R. No. 101483, October 13, 1991, 214 SCRA 551; Baguio
Country Club v. NLRC, G.R. No. 102397, September 4, 1992, 213 SCRA 664.
32 Escareal v. NLRC, 213 SCRA 472.
33 Rollo, p. 123.
34 Labor Code, Article 264.
35 Article 264.
(a) . . . Any union officer who knowingly participates in an illegal strike and any worker
or union officer who knowingly participates in the commission of illegal acts during a
strike MAY be declared to have lost his employment status: Provided, That mere
participation of a worker in a lawful strike shall not constitute sufficient ground for
termination of his employment, even if a replacement had been hired by the employer
during such lawful strike
36 Rollo, p. 84.
37 Petition, p. 15; Rollo, p. 15.
SECOND DIVISION
G.R. No. L-37662 July 15, 1975
RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), petitioner,
vs. PHILIPPINE COMMUNICATIONS ELECTRONICS & ELECTRICITY WORKERS'
FEDERATION (FCWF), RADIO COMMUNICATIONS OF THE PHILIPPINES, INC.
EMPLOYEES UNION (RCPIEU), COURT OF INDUSTRIAL RELATIONS (CIR), and
SPECIAL SHERIFF OF THE COURT OF INDUSTRIAL RELATIONS, respondents.
Labor laws; Court of Industrial Relations; Labor court is not bound by technical
rules of evidence.—While it is true that labor cases, especially those involving claims
for compensation due the workers, must be resolved on the basis of all material facts,
and it is the inescapable duty of all parties concerned, including the court, to disregard
all technical rules in barring and discovering them, on the other hand, it is as important
that said cases must be decided on time for the obvious reason that the claimants are
not in a position to engage in any long drawn proceedings without risking either their
wherewithal or their convictions. The courts cannot leave the progress of the case to
the convenience of the parties, particularly, the employer who can afford to keep it
dragging. Accordingly, where the inquiry into the material facts is unreasonably delayed
by unwarranted and unexplained actuations of any of the parties, no abuse of discretion
is committed by the court if it deems the right of such offending party to present his
factual side of the issue waived.
Same; Presidential Decree No. 21; Scabs illegally hired by the employer do not
enjoy the protection of Presidential Decree No. 21.—The members of movant union
were hired or employed by petitioner in open violation of the order of reinstatement of
the Industrial Court and as such they cannot have any legal standing as employees
protected by Presidential Decree No. 21. It would be absurd if an employer were to be
required to seek prior clearance from the Department of Labor before he can layoff
workers he has hired as substitutes for strikers subsequently ordered reinstated by the
courts, particularly if the employer has, as in the instant case, hired said substitutes in
violation of a restraining order not to hire anyone without the permission of the court.
The motion to intervene is, therefore, denied.
Same; Labor relations; Reinstatement; Backwages; Employees not reinstated in
defiance of court order are entitled to backwages.—Employees and workers deprived
of their means of livelihood in defiance of a judicial order the legality of which is beyond
dispute do not have to remind the court of their right to get compensated of their lost
earnings upon their actual reinstatement. Award thereof should come as a matter of
course. For Us not to rule on this point now only to leave it for action by the National
Labor Relations Board and thereby give rise to another possible appeal to Us is to
unnecessarily lengthen even more the tortuous road already travelled by respondents
in their effort to get what has been rightfully due them since years ago. We would be
recreant to our constitutional duty to give protection to labor that way.
Same; Same; Same; Same; Court may set fix amounts of backwages without
any reference to deductions.—As to the amount of backwages, the Court applies the
precedent recently set in Mercury Drug Co. vs. CIR (L-23357, April 30, 1974, applied
in NASSCO vs. CIR, L-31852 & L-32724, June 28, 1974 and Almira, et al. vs. B.F.
Goodrich Phil, Inc., L-34974, July 25, 1974.) of fixing the amount of backwages to a
just and reasonable level without qualification or deduction so as to avoid protracted
delay in the execution of the award for backwages due to extended hearings and
unavoidable delays and difficulties encountered in determining the earnings of the laid-
off employees ordered to be reinstated with backwages during the pendency of the
case for purposes of deducting the same from the gross backwages awarded.
FERNANDO, J., Concurring:
Constitutional law; Protection to labor; Social justice;Reinstatement of laborers
long deprived of employment is in accord with the Constitutional policy of protecting
labor and promoting social justice.—Candor compels the admission that there were
some misgivings on my part as to the possible adverse consequences to the former set
of workers once the order for reinstatement is implemented. If it were a case solely of
management being made to bear the burden for failure to implement an order of
respondent Court, then no problem arises. It was its fault and it had no one else to
blame. Certainly it could and should be held accountable. Nonetheless, as pointed out
in our resolution, the temporary labor force ought to have been aware of the transitory
character of their employment. At any rate, I do not think that our resolution can be
construed to mean any loss of whatever contractual right may have been entered by
them with petitioner. That is a matter which to my mind is not covered by what is decided
today. It is in that sense that for me there is no possible objection to the ground that the
protection to labor is less than it should be or that the principle of social justice is
disregarded. On this point, what for me is most creditable in our resolution is that the
long-suffering employees and laborers, who in the past had been battling in vain against
the wall of resistance put up by petitioner, would at long last receive their due.
Attorneys; Duty of counsel, at a certain point of litigation, to concede to the
decision of the court.—There is the expectation that counsel should employ all the
energies at one’s command in the defense of the rights of his clients. His zeal is to be
commended. He will not be true to his calling if such qualities are lacking in his
advocacy. Nonetheless, there should be awareness likewise that a certain stage in
litigation, the appropriate course, as a matter of fact the only course, is to defer to an
order of an inferior court or administrative agency unless duly set aside. The rule of law,
to repeat, cannot be satisfied with anything less. Nor is there any justification for a
member of the bar indiscriminately seizing upon any doctrine that might at most yield a
colorable appearance of validity to a legal argument, so that his client would have no
reason to feel that he is less than wholehearted in his handling a case. The honor of
the profession requires that on matters of law, it is a client who should yield to the lawyer
and not the other way around.
RESOLUTION
BARREDO, J.:
Three incidents arising from Our decision in this case dated August 30, 1974: (1) Motion
for reconsideration filed by petitioner; (2) Manifestation and motion for intervention of
United RCPI Communications Labor Association-Philippine Association of Free Labor
Unions (URCPICLA- PAFLU); and (3) Prayer for a modified judgment filed by
respondent union, Philippine Communications, Electronics & Electricity Workers'
Federation, RCPI Employees' Union (RCPIEU).
I
In its motion for reconsideration, petitioner suggests that Our decision did not resolved
squarely the issue of whether or not respondent Industrial Court gravely abused its
discretion in declaring petitioner, by its order of February 15, 1973, as having waived
its right to make an offer of its evidence and in forthwith considering the matter of the
implementation of the return-to-work order of April 23, 1968 as directed in the writ of
execution of December 29, 1969 submitted for resolution. It is claimed that this issue is
pivotal, for if it is resolved in its favor, the ordered reinstatement of the 167 employees
and workers enumerated in respondent court's order of October 5, 1973 may not be
complied with until after the issues of fact regarding their identity and status as such
workers and employees have been reviewed and passed upon in the light of the
evidence offered by petitioner at the hearing. Petitioner invokes Section 20 of
Commonwealth Act 103 together with this Court's injunction in Ang Tibay vs. CIR, 69
Phil. 365, that the industrial Court must "use the authorized legal methods of securing
evidence and informing itself of acts material and relevant to the controversy" in seeing
to it "that the law is enforced." In other words, petitioner submits that in ignoring or
refusing to take into account evidence already in the record albeit not duly offered,
respondent court sacrificed substance for technicality.
In this connection, it may be well to bear in mind, that the reasons why respondent court
felt compelled to act as it did are explained in its order of February 15, 1973 thus:
All these aforestated pleadings were set for hearing on January 29, 1973. After the
parties made clear their respective positions on the issues involved, the Court gave
the counsel for respondent until February 3, 1973 within which to submit his offer of
exhibits in writing and the counsel for petitioner three (3) days after receipt of the
offer in writing within which to file his objections. Both counsel were also given by
the Court ten (10) days from submission of the objection within which to submit
simultaneous memoranda (t. s. n., pp. 2-6, Jan. 29, 1973).
Considering that February 3, 1973, had already lapsed without respondents having
as yet submitted its offer of exhibits, despite the so many chances given to it, there
is now valid reason to grant the urgent motion of petitioner. (Page 58, Rollo.)
As We have said in Our decision, "(a) bare recital of the above facts renders undeniable
the far-from-commendable efforts of petitioner to set at naught a return-to-work order.
Considering that it is of a peremptory character and its execution was long overdue,
the challenged actuation of respondent court had all the earmarks of legality." It is not
true then that We have not resolved the issue referred to. Indeed, all that need be added
here is that while it is true that labor cases, especially those involving claims for
compensation due the workers, must be resolved on the basis of all material facts, and
it is the inescapable duty of all parties concerned, including the court, to disregard all
technical rules in barring1 and discovering them, on the other hand, it is as important
that said cases must be decided on time for the obvious reason that the claimants are
not in a position to engage in any long drawn proceedings without risking either their
wherewithal or their convictions. The Courts cannot leave the progress of the case to
the convenience of the parties, particularly, the employer who can afford to keep it
dragging. Accordingly, where the inquiry into the material facts is unreasonably delayed
by unwarranted and unexplained actuations of any of the parties, no abuse of discretion
is committed by the court if it deems the right of such offending party to present his
factual side of the issue waived.
This is particularly true in the case at bar, for, as the record shows, the order of
reinstatement which has remained unobeyed by petitioner to this day was issued more
than seven years ago and was in fact already nearing five years old when the above-
quoted order of February 15, 1973 had to be issued in exasperation by respondent
court. The duty of the court spoken of in Ang Tibay to ferret out all facts necessary for
the just determination of the rights of the parties without regard to technical rules ceases
when the court is disabled by the very indifference and inattention, if not disregard, of
a party of the orders of the court designed to expedite proceedings already being
protracted through maneuvers of the same party.
Besides, it is noteworthy that petitioner did not even care to move for the
reconsideration of the order in question. Taking the court for granted, it merely went
ahead and made its required offer of evidence, at long last, eighteen days late. If only
to make all and sundry understand that no one can thus trifle with the court with
impunity, petitioner should suffer the consequences of its patent lack of diligence in the
protection of its interest which it has coupled with inexplicable failure to accord the
orders of the court due attention, considering it was undertaking a task of vital public
interest, the implementation of a peremptory return-to-work order it had issued five
years back.
It is of no consequence that respondent union's motion to strike out the offer of evidence
belatedly filed by petitioner was not resolved by respondent court. The fact of the matter
is that said offer had already been deemed waived by the court. Procedurally, therefore,
there was no need to strike out something that had not been included legally in the
record.
In view of the foregoing considerations, and for the reason that the arguments of
petitioner relative to Presidential Decree No. 21 have been more than adequately
discussed in Our decision, petitioner's motion is denied for lack of merit.
II
The motion to intervene of URCPICLA-PAFLU is likewise without merit. Aside from the
fact that it had already intervened in the court below but later on did nothing to protect
its pretended rights relative to the orders assailed here, on the merits, its position
suffers from the same fatal defect of the motion for reconsideration of petitioner in that
it is premised on erroneous assumptions regarding the objective and purpose of
Presidential Decree No. 21. The members of movant union were hired or employed by
petitioner in open violation of the order of reinstatement of the Industrial Court and as
such they cannot have any legal standing as employees protected by said Presidential
Decree. It would be absurd if an employer were to be required to seek prior clearance
from the Department of Labor before he can layoff workers he has hired as substitutes
for strikers subsequently ordered reinstated by the courts, particularly if the employer
has, as in the instant case, hired said substitutes in violation of a restraining order not
to hire anyone without the permission of the court. The motion to intervene is, therefore,
denied.
III
It is the plea of respondent unions for modification of Our decision that deserves
favorable consideration. The prayer is for Us to include in the judgment an award of
backwages to the employees and laborers concerned, in addition to their immediate
reinstatement. The plea is opposed by petitioner upon the ground that the issue of
payment of backwages was neither raised in nor passed upon by the Industrial Court
and is, in fact, not even touched in the previous pleadings of the parties in the instant
case. Additionally, it is averred that the matter is now actually being looked into by the
National Labor Relations Board, hence it is not necessary for this Court to take it up.
We are of the considered opinion that, indeed, the award prayed for is in order. The
fact that nothing was done in the court below about it is not a valid objection to the
granting thereof. Neither can its denial be justified just because it was not expressly
demanded by respondents before Our decision was handed down. Such award is such
a logical and inescapable consequence of the order of reinstatement that actually one
is incomplete without the other.
We are not dealing here with backwages to be paid to workers who are being ordered
reinstated as a consequence of a finding by the court that their suspension or dismissal
by their employer is illegal, which, of course, is dependent on the sound discretion of
the court. (Union of Philippine Education Employees vs. Philippine Education
Company, 91 Phil. 93.) In the present instance, what is involved is a failure to comply
with, nay a veiled defiance by respondent of a return-to-work order of the Industrial
Court issued seven years ago. Worse, from all appearances, such continued resistance
of petitioner to said peremptory order can hardly evoke sympathy. To begin with, its
attempt to question the identity of those entitled to reinstatement claiming that they
were not actually in their employ at the time of the declaration of the strike sounds
hollow. It is inconceivable that strangers and outsiders would try to be taken in such a
surreptitious manner. Neither can the allegation that petitioner has presented evidence
of abandonment prior to the strike and of resignations subsequent thereto be of help to
petitioner. Voluntary abandonment of work before a strike is too unusual to be readily
credible whereas purported resignations after a strike and during the pendency of
protracted reinstatement proceedings are at least suspect and do not affect the
employee status of the persons concerned, unless there is patent evidence that the
pretended abandonment or resignation was due to another employment.2 Moreover,
the proceedings below had been stalled by transparent dilatory moves of petitioner
which are basically irreconcilable with the attitude of cooperativeness and obedience
an employer is expected to maintain at all times towards orders of the court issued by
virtue of powers expressly granted to it by law. (Section 10, Republic Act 875; Section
19, Commonwealth Act 103.)
The Industrial Court had no discretion in the matter. There was no controversial issue
of fault it had to decide. It was a plain case of exacting the most natural sanction for a
defiance of its order. If it overlooked the award, seemingly engrossed as it was in
resolving the issue of identity of the strikers raised by petitioner, that was plain error
which it is within Our prerogative to correct motu propio, as We do in appeals by writ of
error in respect to a manifest error not assigned nor discussed by appellant in his brief.
(Section 7, Rule 51.) Employees and workers deprived of their means of livelihood in
defiance of a judicial order the legality of which is beyond dispute do not have to remind
the court of their right to get compensated of their lost earnings upon their actual
reinstatement. Award thereof should come as a matter of course. For us not to rule on
this point now only to leave it for action by the National Labor Relations Board and
thereby give rise to another possible appeal to Us is to unnecessarily lengthen even
more the tortuous road already travelled by respondents in their effort to get what has
been rightfully due them since years ago. We would be recreant to our constitutional
duty to give protection to labor that way.
IV
Taking all circumstances of this case into account, We find no justifiable reason why
We cannot apply here in respect to the amount of the award the ruling in Feati
University Club vs. Feati University, G. R. No. L-35103, Aug. 15, 1974, wherein We
said:
As to the amount of backwages, the Court applies the precedent recently set
in Mercury Drug Co. vs. CIR (L-23357, April 30, 1974, applied in NASSCO vs. CIR,
L-31852 & L-32724, June 28, 1974 and Almira, et al vs. B. F. Goodrich Phil., Inc.,
L-34974, July 25, 1974.) of fixing the amount of backwages to a just and reasonable
level without qualification or deduction so as to avoid protracted delay in the
execution of the award for backwages due to extended hearings and unavoidable
delays and difficulties encountered in determining the earnings of the laid-off
employees ordered to be reinstated with backwages during the pendency of the
case for purposes of deducting the same from the gross backwages awarded.
As has been noted, this formula of awarding reasonable net backwages without
deduction or qualification relieves the employees from proving or disproving their
earnings during their lay-off and the employers from submitting counterproofs, and
obviates the twin evils of idleness on the part of the employee who would "with
folded arms, remain inactive in the expectation that a windfall would come to him"
(Itogon Suyoc Mines, Inc. vs. Sangilo-Itogon Workers Union, 24 SCRA 873 (1968),
cited in Diwa ng Pagkakaisa vs. Filtex International Corp., 43 SCRA 287 (1972) per
Makalintal, now C.J.) and attrition and protracted delay in satisfying such award on
the part of unscrupulous employers who have seized upon the further proceedings
to determine the actual earnings of the wrongfully dismissed or laid-off employees
to hold unduly extended hearings for each and every employee awarded
backwages and thereby render practically nugatory such award and compel the
employees to agree to unconscionable settlements of their backwages award in
order to satisfy their dire need. See La Campana Food Products, Inc. vs. CIR, 28
SCRA 314 (1969) and Kaisahan ng Mga Manggagawa vs. La Campana Food
Products, Inc., 36 SCRA 142 (1970).1äwphï1.ñët
This formula of making a flat award for a given period has been adopted in subsequent
cases.3 Accordingly, each of the 167 members of respondent unions named in the
decision under review and found by the Industrial Court to be entitled to reinstatement
should be paid backwages for two years, without any deduction or qualification, at the
respective rates of compensation they were receiving at the time of the strike,
November 17, 1967. It goes without saying that all those who can be shown by
incontestible evidence to have died prior to the date of the strike shall be disregarded,
but the heirs of those who have died after the strike shall receive the respective
proportional amounts due their predecessors-in-interest as of the time of death, if the
same occurred less than two years from the date of the strike, and the full two-years
backwages, if after two years from said date. Any amount paid by reason or on the
occasion of supposed resignations after the strike shall not be deducted.
Before closing, it must be mentioned that the Court understands that notwithstanding
that its decision of August 30, 1974 is immediately executory, the employees concerned
have not yet been reinstated up to now. Petitioner is warned that the pendency of the
present incidents is no excuse for its failure to comply immediately with said decision
and appropriate action would have to be taken to protect the dignity of the court, if such
attitude continues.
WHEREFORE, the motion for reconsideration of petitioner dated September 16, 1974
as well as the motion to intervene of URCPICLA-PAFLU of October 16, 1974 are both
denied for lack of merit. On the other hand, the motion of respondent RCPIEU of
November 6, 1974 for modification of judgment is granted, if only to complete Our
decision, which cannot be final without such award being included therein. Petitioner is
ordered to pay the 167 employees and workers of petitioner enumerated in the
lndustrial Court's order of October 5,1973 backwages for two years, without any
deduction or qualification, pursuant to the tenor of the above opinion. This resolution is
also immediately executory. Antonio, Aquino and Concepcion Jr., JJ., concur.
Separate Opinions
FERNANDO, J., concurring:
It has been observed, and not without justification, that the solution of labor
controversies taxes to the utmost the ingenuity courts and arbiters for what may serve
to do justice in the instance may later prove to be inconvenient of later application
analogous fact situations. For in no other kind of litigation is there a greater need for
sizing up situations, very often unique in character and thus not likely to repeat
themselves. Care is to be taken therefore that while the conclusion reached in any
litigation with its essentially peculiar circumstances may commend itself, the doctrine
announced does not deviate from the main stream of juristic thought. It is to the credit
of the opinion of Justice Barredo that there is adherence to prescribed norms governing
labor-management relations. It is impressed with an even greater significance for it
manifests in no uncertain terms that this Court is not likely to tolerate such conduct as
that displayed by petitioner when all these past years it persistently refused to obey
respondent Court's order for immediate reinstatement. Such intransigence is unjustified
even if sought to be cloaked under a claim of a denial of procedural due process. Such
behavior is antithetical to the rule of law. What was stressed in Philippine Associations
of Free Labor Unions v. Salvador1 comes to mind. Thus: "Law stands for order, for the
peaceful and systematic adjustment of frictions and conflicts unavoidable in a modern
society with its complexities and clashing interests. The instrumentality for such
balancing or harmonization is the judiciary and other agencies exercising quasi-judicial
powers. When judicial or quasi-judicial tribunals speak, what they decree must be
obeyed, what they ordain must be followed. A party dissatisfied may ask for a
reconsideration and, if denied, may go on to a higher tribunal. As long as the orders
stand unmodified however, they must, even if susceptible to well-founded doubts on
jurisdictional grounds, be faithfully complied with.2 At the very least, petitioner ought to
have complied if not at the first opportunity, after it was notified of our decision
promulgated on August 30, 1974.3 It did not turn out that way. Our resolution then
appropriately takes it to task. I concur and add a few words.
1. At the outset, may I refer to what led our Division to assign another member to pen
the resolution, when the usual practice is for the ponente to speak for the Tribunal in
passing upon a motion for reconsideration. As set forth by Justice Barredo in his
opening paragraph, three pleadings were filed after the promulgation of our judgment:
(1) the motion for reconsideration filed by petitioner, (2) the manifestation and motion
for intervention of United RCPI Communications Labor Association, and (3) the motion
for modification of the decision filed by respondent union. The points of law raised did
call for further study. The allegation of denial of procedural due process has had to be
inquired into, even if impressed at the most with deceptive plausibility. As is made clear
in the resolution, it could not survive the test of a rigorous analysis. What is more, it was
previously considered and rejected as set forth in Justice Barredo's opinion.
Nonetheless, several sessions were devoted to considering the motion for intervention
and the modification of the decision. When a consensus was reached, it was apparent
that the approach followed by Justice Barredo was the focal point on which all could
agree. It was deemed best therefore for him to speak for the rest of us.
2. It is readily apparent that with insistence of petitioner on the claim of an alleged denial
of procedural due process being indicative not so much of reliance on applicable
precedents but as a further excuse for delay, what did call for further reflection was the
motion to intervene of a union representing the temporary employees of petitioner and
the plea for the implementation of the decision rendered so that an award of backwages
be granted. Candor compels the admission that there were some misgivings on my part
as to the possible adverse consequences to the former set of workers once the order
for reinstatement is implemented. If it were a case solely of management being made
to bear the burden for failure to implement an order of respondent Court, then no
problem arises. It was its fault and it had no one else to blame. Certainly it could and
should be held accountable. Nonetheless, as pointed out in our resolution, the
temporary labor force ought to have been aware of the transitory character of their
employment. At any rate, I do not think that our resolution can be construed to mean
any loss of whatever contractual right may have been entered by them with petitioner.
That is a matter which to my mind is not covered by what is decided today. It is in that
sense that for me there is no possible objection to the ground that the protection to
labor is less than it should be4 or the principle of social justice is disregarded.5 On this
point, what for me is most creditable in our resolution is that the long-suffering
employees and laborers, who in the past had been battling in vain against the wall of
resistance put up by petitioner, would at long last receive their due. Once again, there
is fealty to the concept of a compassionate society which is even more marked under
the present Constitution.6 Also, from the constitutional standpoint, that is to render clear
that in appropriate cases, the declaration of principles and state policies7 have a
mandatory force of their own and are not just mere statements of noble platitudes or
glittering generalities unrelated to reality.
3. One last word. There is, of course, the expectation that counsel should employ all
the energies at one's command in the defense of the rights of his clients. His zeal is to
be commended. He will not be true to his calling if such qualities are lacking in his
advocacy. Nonetheless, there should be awareness likewise that at a certain stage in
litigation, the appropriate course, as a matter of fact the only course, is to defer to an
order of an inferior court or administrative agency unless duly set aside. The rule of law,
to repeat, cannot be satisfied with anything less. Nor is there any justification for a
member of the bar indiscriminately seizing upon any doctrine that might at most yield a
colorable appearance of validity to a legal argument, so that his client would have no
reason to feel that he is less than wholehearted in his handling of a case. The honor of
the profession requires that on matters of law, it is a client who should yield to the lawyer
and not the other way around.
There is on my part, to repeat, full agreement with what has been so ably and clearly
said by Justice Barredo.
Separate Opinions
FERNANDO, J., concurring:
It has been observed, and not without justification, that the solution of labor
controversies taxes to the utmost the ingenuity courts and arbiters for what may serve
to do justice in the instance may later prove to be inconvenient of later application
analogous fact situations. For in no other kind of litigation is there a greater need for
sizing up situations, very often unique in character and thus not likely to repeat
themselves. Care is to be taken therefore that while the conclusion reached in any
litigation with its essentially peculiar circumstances may commend itself, the doctrine
announced does not deviate from the main stream of juristic thought. It is to the credit
of the opinion of Justice Barredo that there is adherence to prescribed norms governing
labor-management relations. It is impressed with an even greater significance for it
manifests in no uncertain terms that this Court is not likely to tolerate such conduct as
that displayed by petitioner when all these past years it persistently refused to obey
respondent Court's order for immediate reinstatement. Such intransigence is unjustified
even if sought to be cloaked under a claim of a denial of procedural due process. Such
behavior is antithetical to the rule of law. What was stressed in Philippine Associations
of Free Labor Unions v. Salvador1 comes to mind. Thus: "Law stands for order, for the
peaceful and systematic adjustment of frictions and conflicts unavoidable in a modern
society with its complexities and clashing interests. The instrumentality for such
balancing or harmonization is the judiciary and other agencies exercising quasi-judicial
powers. When judicial or quasi-judicial tribunals speak, what they decree must be
obeyed, what they ordain must be followed. A party dissatisfied may ask for a
reconsideration and, if denied, may go on to a higher tribunal. As long as the orders
stand unmodified however, they must, even if susceptible to well-founded doubts on
jurisdictional grounds, be faithfully complied with.2 At the very least, petitioner ought to
have complied if not at the first opportunity, after it was notified of our decision
promulgated on August 30, 1974.3 It did not turn out that way. Our resolution then colorable appearance of validity to a legal argument, so that his client would have no
appropriately takes it to task. I concur and add a few words. reason to feel that he is less than wholehearted in his handling of a case. The honor of
the profession requires that on matters of law, it is a client who should yield to the lawyer
1. At the outset, may I refer to what led our Division to assign another member to pen
and not the other way around.
the resolution, when the usual practice is for the ponente to speak for the Tribunal in
passing upon a motion for reconsideration. As set forth by Justice Barredo in his There is on my part, to repeat, full agreement with what has been so ably and clearly
opening paragraph, three pleadings were filed after the promulgation of our judgment: said by Justice Barredo.
(1) the motion for reconsideration filed by petitioner, (2) the manifestation and motion
Footnotes
for intervention of United RCPI Communications Labor Association, and (3) the motion
for modification of the decision filed by respondent union. The points of law raised did 1 East Asiatic Company, Inc. vs. Court of Industrial Relations, L-29068, August 31,
call for further study. The allegation of denial of procedural due process has had to be 1971, 40 SCRA 521.
inquired into, even if impressed at the most with deceptive plausibility. As is made clear 2 cf.: Firestone Filipinas Employees Association vs. Firestone Tire and Rubber Co.,
in the resolution, it could not survive the test of a rigorous analysis. What is more, it was December 10, 1974, 61 SCRA 339; Feati University vs. Bautista, December 27, 1966,
previously considered and rejected as set forth in Justice Barredo's opinion. 18 SCRA 1191; Urgelio vs. Osme_¤_a, Feb. 28, 1964, 10 SCRA 253; Insular Sugar
Nonetheless, several sessions were devoted to considering the motion for intervention Refining Co. vs CIR, May 31, 1963, 8 SCRA 271; PHILSUGIN vs. CIR, Sept. 29, 1960,
and the modification of the decision. When a consensus was reached, it was apparent 109 Phil. 452; Garcia vs. LASEDECO, Aug. 31, 1954, 95 Phil. 698.
that the approach followed by Justice Barredo was the focal point on which all could 3 Mercury Drug Co. vs. CIR, L-23357, April 30, 1974, applied in NASSCO vs. CIR, L-
agree. It was deemed best therefore for him to speak for the rest of us. 31852 & L-32724, June 28, 1974 and Almira, et al. vs. B. F. Goodrich Phil., Inc., L-
34974, July 25, 1974.
2. It is readily apparent that with insistence of petitioner on the claim of an alleged denial
FERNANDO, J., concurring:
of procedural due process being indicative not so much of reliance on applicable
1 L-29471, September 28, 1968, 25 SCRA 393.
precedents but as a further excuse for delay, what did call for further reflection was the
2 Ibid, 403.
motion to intervene of a union representing the temporary employees of petitioner and
3 Radio Communications of the Philippines v. Phil. Communications Electronics and
the plea for the implementation of the decision rendered so that an award of backwages
Electricity Workers Federation, L-37662, August 30, 1974, 58 SCRA 762.
be granted. Candor compels the admission that there were some misgivings on my part
4 According to Article II, Section 9 of the Constitution: "The State shall afford protection
as to the possible adverse consequences to the former set of workers once the order
to labor, promote full employment and equality in employment, ensure equal work
for reinstatement is implemented. If it were a case solely of management being made
opportunities regardless of sex, race, or creed, and regulate the relations between
to bear the burden for failure to implement an order of respondent Court, then no
workers and employers. The State shall assure the rights of workers to self-
problem arises. It was its fault and it had no one else to blame. Certainly it could and
organization, collective bargaining, security of tenure, and just and humane conditions
should be held accountable. Nonetheless, as pointed out in our resolution, the
of work. The State may provide for compulsory arbitration." .
temporary labor force ought to have been aware of the transitory character of their
5 According to Article II, Section 6 of the Constitution: "The State shall promote social
employment. At any rate, I do not think that our resolution can be construed to mean
justice to ensure the dignity, welfare, and security of all the people. Towards this end,
any loss of whatever contractual right may have been entered by them with petitioner.
the State shall regulate the acquisition, ownership, use, enjoyment and disposition of
That is a matter which to my mind is not covered by what is decided today. It is in that
private property, and equitably diffuse property ownership and profits." .
sense that for me there is no possible objection to the ground that the protection to
6 Cf. Philippine Air Lines, Inc. vs. Philippine Air Lines Employees Association (PALEA),
labor is less than it should be4 or the principle of social justice is disregarded.5 On this
L-24626, June 28, 1974, 57 SCRA 489 and Almira vs. B.F. Goodrich Philippines, Inc.
point, what for me is most creditable in our resolution is that the long-suffering
L-34974, July 25, 1974, 58 SCRA 120..
employees and laborers, who in the past had been battling in vain against the wall of
7 Article II of the Constitution.
resistance put up by petitioner, would at long last receive their due. Once again, there
is fealty to the concept of a compassionate society which is even more marked under
the present Constitution.6 Also, from the constitutional standpoint, that is to render clear
that in appropriate cases, the declaration of principles and state policies7 have a
mandatory force of their own and are not just mere statements of noble platitudes or
glittering generalities unrelated to reality.
3. One last word. There is, of course, the expectation that counsel should employ all
the energies at one's command in the defense of the rights of his clients. His zeal is to
be commended. He will not be true to his calling if such qualities are lacking in his
advocacy. Nonetheless, there should be awareness likewise that at a certain stage in
litigation, the appropriate course, as a matter of fact the only course, is to defer to an
order of an inferior court or administrative agency unless duly set aside. The rule of law,
to repeat, cannot be satisfied with anything less. Nor is there any justification for a
member of the bar indiscriminately seizing upon any doctrine that might at most yield a
SECOND DIVISION
G.R. No. L-54334 January 22, 1986
KIOK LOY, doing business under the name and style SWEDEN ICE CREAM
PLANT, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC) and
PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN), respondents.
Labor Law; Unfair Labor Practice; Collective Bargaining Agreement; Collective
bargaining, concept of.—Collective bargaining which is defined as negotiations towards
a collective agreement, is one of the democratic frameworks under the New Labor
Code, designed to stabilize the relation between labor and management and to create
a climate of sound and stable industrial peace. It is a mutual responsibility of the
employer and the Union and is characterized as a legal obligation. So much so that
Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer
to refuse “to meet and convene promptly and expeditiously in good faith for the purpose
of negotiating an agreement with respect to wages, hours of work, and all other terms
and conditions of employment including proposals for adjusting any grievance or
question arising under such an agreement and executing a contract incorporating such
agreement, if requested by either party.”
Same; Same; Same; Same; Preconditions for setting in motion mechanics of
collective bargaining.—While it is a mutual obligation of the parties to bargain, the
employer, however, is not under any legal duty to initiate contract negotiation. The
mechanics of collective bargaining is set in motion only when the following jurisdictional
preconditions are present, namely, (1) possession of the status of majority
representation of the employees’ representative in accordance with any of the means
of selection or designation provided for by the Labor Code; (2) proof of majority
representation; and (3) a demand to bargain under Article 251, par. (a) of the New
Labor Code . . . . all of which preconditions are undisputedly present in the instant case.
Same; Same; Same; Same; Company’s refusal to make counter-proposal to the
union’s proposed collective bargaining agreement, an indication of its bad faith.—We
are in total conformity with respondent NLRC’s pronouncement that petitioner
Company is GUILTY of unfair labor practice. It has been indubitably established that
(1) respondent Union was a duly certified bargaining agent; (2) it made a definite
request to bargain, accompanied with a copy of the proposed Collective Bargaining
Agreement, to the Company not only once but twice which were left unanswered and
unacted upon; and (3) the Company made no counter proposal whatsoever all of which
conclusively indicate lack of a sincere desire to negotiate. A Company’s refusal to make
counter proposal if considered in relation to the entire bargaining process, may indicate
bad faith and this is specially true where the Union’s request for a counter proposal is
left unanswered. Even during the period of compulsory arbitration before the NLRC,
petitioner Company’s approach and attitude—stalling the negotiation by a series of
postponements, non-appearance at the hearing conducted, and undue delay in
submitting its financial statements, lead to no other conclusion except that it is unwilling
to negotiate and reach an agreement with the Union. Petitioner has not at any instance,
evinced good faith or willingness to discuss freely and fully the claims and demands set
forth by the Union much less justify its opposition thereto.
Same; Same; Same; Same; When unfair labor practice, committed; Case at
bar.—The case at bar is not a case of first impression, for in the Herald Delivery Carriers
Union (PAFLU) vs. Herald Publications the rule had been laid down that “unfair labor
practice is committed when it is shown that the respondent employer, after having been
served with a written bargaining proposal by the petitioning Union, did not even bother
to submit an answer or reply to the said proposal. This doctrine was reiterated anew in
Bradman vs. Court of Industrial Relations wherein it was further ruled that “while the
law does not compel the parties to reach an agreement, it does contemplate that both
parties will approach the negotiation with an open mind and make a reasonable effort
to reach a common ground of agreement”.
Same; Same; Same; Due process; Denial of due process, not a case of, where
the employer’s failure to be heard was due to the various postponements granted to it
and failure to reply to the union’s successive letters to bring the company to the
bargaining table.—Petitioner’s aforesaid submittal failed to impress Us. Considering the
various postponements granted in its behalf, the claimed denial of due process
appeared totally bereft of any legal and factual support. As herein earlier stated,
petitioner had not even honored respondent Union with any reply to the latter’s
successive letters, all geared towards bringing the Company to the bargaining table. It
did not even bother to furnish or serve the Union with its counter proposal despite
persistent requests made therefor. Certainly, the moves and over-all behavior of
petitioner-company were in total derogation of the policy enshrined in the New Labor
Code which is aimed towards expediting settlement of economic disputes. Hence, this
Court is not prepared to affix its imprimatur to such an illegal scheme and dubious
maneuvers.
Same; Same; Same; Employer should not be allowed with impunity to resort to
schemes feigning negotiations by going through empty gestures; Findings of NLRC of
reasonableness of any collective bargaining agreement, accorded respect.—We agree
with the pronouncement that it is not obligatory upon either side of a labor controversy
to precipitately accept or agree to the proposals of the other. But an erring party should
not be tolerated and allowed with impunity to resort to schemes feigning negotiations
by going through empty gestures. More so, as in the instant case, where the
intervention of the National Labor Relations Commission was properly sought for after
conciliation efforts undertaken by the BLR failed.
The instant case being a certified one, it must be resolved by the NLRC pursuant
to the mandate of P.D. 873, as amended, which authorizes the said body to determine
the reasonableness of the terms and conditions of employment embodied in any
Collective Bargaining Agreement. To that extent, utmost deference to its findings of
reasonableness of any Collective Bargaining Agreement as the governing agreement
by the employees and management must be accorded due respect by this Court.
PETITION for certiorari to review the decision of the National Labor Relations
Commission.
CUEVAS, J.:
Petition for certiorari to annul the decision 1 of the National Labor Relations
Commission (NLRC) dated July 20, 1979 which found petitioner Sweden Ice Cream
guilty of unfair labor practice for unjustified refusal to bargain, in violation of par. (g) of
Article 2492 of the New Labor Code, 3 and declared the draft proposal of the Union for
a collective bargaining agreement as the governing collective bargaining agreement
between the employees and the management.
The pertinent background facts are as follows:
In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa
(Union for short), a legitimate late labor federation, won and was subsequently certified
in a resolution dated November 29, 1978 by the Bureau of Labor Relations as the sole
and exclusive bargaining agent of the rank-and-file employees of Sweden Ice Cream
Plant (Company for short). The Company's motion for reconsideration of the said
resolution was denied on January 25, 1978.
Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the
Company with two copies of its proposed collective bargaining agreement. At the same
time, it requested the Company for its counter proposals. Eliciting no response to the
aforesaid request, the Union again wrote the Company reiterating its request for
collective bargaining negotiations and for the Company to furnish them with its counter
proposals. Both requests were ignored and remained unacted upon by the Company.
Left with no other alternative in its attempt to bring the Company to the bargaining table,
the Union, on February 14, 1979, filed a "Notice of Strike", with the Bureau of Labor
Relations (BLR) on ground of unresolved economic issues in collective bargaining. 5
Conciliation proceedings then followed during the thirty-day statutory cooling-off period.
But all attempts towards an amicable settlement failed, prompting the Bureau of Labor
Relations to certify the case to the National Labor Relations Commission (NLRC) for
compulsory arbitration pursuant to Presidential Decree No. 823, as amended. The labor
arbiter, Andres Fidelino, to whom the case was assigned, set the initial hearing for April
29, 1979. For failure however, of the parties to submit their respective position papers
as required, the said hearing was cancelled and reset to another date. Meanwhile, the
Union submitted its position paper. The Company did not, and instead requested for a
resetting which was granted. The Company was directed anew to submit its financial
statements for the years 1976, 1977, and 1978.
The case was further reset to May 11, 1979 due to the withdrawal of the Company's
counsel of record, Atty. Rodolfo dela Cruz. On May 24, 1978, Atty. Fortunato
Panganiban formally entered his appearance as counsel for the Company only to
request for another postponement allegedly for the purpose of acquainting himself with
the case. Meanwhile, the Company submitted its position paper on May 28, 1979.
When the case was called for hearing on June 4, 1979 as scheduled, the Company's
representative, Mr. Ching, who was supposed to be examined, failed to appear. Atty.
Panganiban then requested for another postponement which the labor arbiter denied.
He also ruled that the Company has waived its right to present further evidence and,
therefore, considered the case submitted for resolution.
On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National
Labor Relations Commission. On July 20, 1979, the National Labor Relations
Commission rendered its decision, the dispositive portion of which reads as follows:
WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty of
unjustified refusal to bargain, in violation of Section (g) Article 248 (now Article 249),
of P.D. 442, as amended. Further, the draft proposal for a collective bargaining
agreement (Exh. "E ") hereto attached and made an integral part of this decision,
sent by the Union (Private respondent) to the respondent (petitioner herein) and
which is hereby found to be reasonable under the premises, is hereby declared to
be the collective agreement which should govern the relationship between the
parties herein.
SO ORDERED. (Emphasis supplied)
Petitioner now comes before Us assailing the aforesaid decision contending that the
National Labor Relations Commission acted without or in excess of its jurisdiction or
with grave abuse of discretion amounting to lack of jurisdiction in rendering the
challenged decision. On August 4, 1980, this Court dismissed the petition for lack of
merit. Upon motion of the petitioner, however, the Resolution of dismissal was
reconsidered and the petition was given due course in a Resolution dated April 1, 1981.
Petitioner Company now maintains that its right to procedural due process has been
violated when it was precluded from presenting further evidence in support of its stand
and when its request for further postponement was denied. Petitioner further contends
that the National Labor Relations Commission's finding of unfair labor practice for
refusal to bargain is not supported by law and the evidence considering that it was only
on May 24, 1979 when the Union furnished them with a copy of the proposed Collective
Bargaining Agreement and it was only then that they came to know of the Union's
demands; and finally, that the Collective Bargaining Agreement approved and adopted
by the National Labor Relations Commission is unreasonable and lacks legal basis.
The petition lacks merit. Consequently, its dismissal is in order.
Collective bargaining which is defined as negotiations towards a collective
agreement,6 is one of the democratic frameworks under the New Labor Code, designed
to stabilize the relation between labor and management and to create a climate of
sound and stable industrial peace. It is a mutual responsibility of the employer and the
Union and is characterized as a legal obligation. So much so that Article 249, par. (g)
of the Labor Code makes it an unfair labor practice for an employer to refuse "to meet
and convene promptly and expeditiously in good faith for the purpose of negotiating an
agreement with respect to wages, hours of work, and all other terms and conditions of
employment including proposals for adjusting any grievance or question arising under
such an agreement and executing a contract incorporating such agreement, if
requested by either party.
While it is a mutual obligation of the parties to bargain, the employer, however, is not
under any legal duty to initiate contract negotiation.7 The mechanics of collective
bargaining is set in motion only when the following jurisdictional preconditions are
present, namely, (1) possession of the status of majority representation of the
employees' representative in accordance with any of the means of selection or
designation provided for by the Labor Code; (2) proof of majority representation; and
(3) a demand to bargain under Article 251, par. (a) of the New Labor Code . ... all of
which preconditions are undisputedly present in the instant case.
From the over-all conduct of petitioner company in relation to the task of negotiation,
there can be no doubt that the Union has a valid cause to complain against its
(Company's) attitude, the totality of which is indicative of the latter's disregard of, and
failure to live up to, what is enjoined by the Labor Code — to bargain in good faith.
We are in total conformity with respondent NLRC's pronouncement that petitioner
Company is GUILTY of unfair labor practice. It has been indubitably established that
(1) respondent Union was a duly certified bargaining agent; (2) it made a definite
request to bargain, accompanied with a copy of the proposed Collective Bargaining
Agreement, to the Company not only once but twice which were left unanswered and
unacted upon; and (3) the Company made no counter proposal whatsoever all of which
conclusively indicate lack of a sincere desire to negotiate. 8 A Company's refusal to
make counter proposal if considered in relation to the entire bargaining process, may
indicate bad faith and this is specially true where the Union's request for a counter
proposal is left unanswered. 9 Even during the period of compulsory arbitration before
the NLRC, petitioner Company's approach and attitude-stalling the negotiation by a
series of postponements, non-appearance at the hearing conducted, and undue delay
in submitting its financial statements, lead to no other conclusion except that it is
unwilling to negotiate and reach an agreement with the Union. Petitioner has not at any
instance, evinced good faith or willingness to discuss freely and fully the claims and SO ORDERED.
demands set forth by the Union much less justify its opposition thereto. 10
Concepcion, Jr., (Chairman), Abad Santos, Escolin and Alampay, JJ., concur.
The case at bar is not a case of first impression, for in the Herald Delivery Carriers
Footnotes
Union (PAFLU) vs. Herald Publications 11 the rule had been laid down that "unfair labor
practice is committed when it is shown that the respondent employer, after having been 1 Pages 23-26, Rollo.
served with a written bargaining proposal by the petitioning Union, did not even bother 2 Previously Article 248 renumbered as Article 249 by Batas Pambansa Blg. 70, May
to submit an answer or reply to the said proposal This doctrine was reiterated anew 1, 1980.
in Bradman vs. Court of Industrial Relations 12 wherein it was further ruled that "while
the law does not compel the parties to reach an agreement, it does contemplate that 3 P.D. 442, as amended.
both parties will approach the negotiation with an open mind and make a reasonable 4 Thru a letter attached thereto to BLR Resolution.
effort to reach a common ground of agreement
5 BLR-S-2-692-79.
As a last-ditch attempt to effect a reversal of the decision sought to be reviewed,
petitioner capitalizes on the issue of due process claiming, that it was denied the right 6 Pampanga Bus Co. vs. Pambusco Employees, 68 Phil. 541.
to be heard and present its side when the Labor Arbiter denied the Company's motion 7 National Labor Relations Board vs. Columbian Enameling & Stamping Co., 306 U.S.
for further postponement. 292 '83 L. Ed. 660,59 Ct 501 (1939).
Petitioner's aforesaid submittal failed to impress Us. Considering the various 8 National Labor Relations Board vs. George Piling & Sons Co., 119 F. (2nd) 32.
postponements granted in its behalf, the claimed denial of due process appeared totally
bereft of any legal and factual support. As herein earlier stated, petitioner had not even 9 Teller, II Labor Disputes & Collective Bargaining 889, citing Glove Cotton Mills vs.
honored respondent Union with any reply to the latter's successive letters, all geared NLRB 103 F. (2nd) 91.
towards bringing the Company to the bargaining table. It did not even bother to furnish 10 Herald Delivery Carriers Union (PAFLU) vs. Herald Publications, Inc., 55 SCRA 713
or serve the Union with its counter proposal despite persistent requests made therefor. (1974), citing NLRB vs. Piling & Sons, Co., 119 F. (2nd) 32 (1941).
Certainly, the moves and overall behavior of petitioner-company were in total
derogation of the policy enshrined in the New Labor Code which is aimed towards 11 55 SCRA 713 (1974).
expediting settlement of economic disputes. Hence, this Court is not prepared to affix 12 78 SCRA 10 (1977), citing Prof. Archibald Cox, "The Duty to Bargain in Good Faith",
its imprimatur to such an illegal scheme and dubious maneuvers. 71 Harv. Law Rev. 1401, 1405 (1934).
Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining 13 Rothenberg on Labor Relations, p. 435m citing NLRB vs. Boss Mfg. Co., 107 F.
Agreement which was approved and adopted by the NLRC is a total nullity for it lacks (2nd) 574; NLRB vs. Sunshine Mining Co., 110 F (2nd) 780; NLRB vs. Condenser
the company's consent, much less its argument that once the Collective Bargaining Corp., 128 F. (2nd) 67.
Agreement is implemented, the Company will face the prospect of closing down
because it has to pay a staggering amount of economic benefits to the Union that will
equal if not exceed its capital. Such a stand and the evidence in support thereof should
have been presented before the Labor Arbiter which is the proper forum for the
purpose.
We agree with the pronouncement that it is not obligatory upon either side of a labor
controversy to precipitately accept or agree to the proposals of the other. But an erring
party should not be tolerated and allowed with impunity to resort to schemes feigning
negotiations by going through empty gestures.13 More so, as in the instant case, where
the intervention of the National Labor Relations Commission was properly sought for
after conciliation efforts undertaken by the BLR failed. The instant case being a certified
one, it must be resolved by the NLRC pursuant to the mandate of P.D. 873, as
amended, which authorizes the said body to determine the reasonableness of the terms
and conditions of employment embodied in any Collective Bargaining Agreement. To
that extent, utmost deference to its findings of reasonableness of any Collective
Bargaining Agreement as the governing agreement by the employees and
management must be accorded due respect by this Court.
WHEREFORE, the instant petition is DISMISSED. The temporary restraining order
issued on August 27, 1980, is LIFTED and SET ASIDE.
No pronouncement as to costs.
EN BANC
G.R. No. 87211 March 5, 1991
JOVENCIO L. MAYOR petitioner, vs.HON. CATALINO MACARAIG, HON.
GUILLERMO CARAGUE, HON. RIZALINA CAJUCOM, HON. FRANKLIN
DRILON, respondents. LOURDES A. SALES and RICARDO OLAIREZ, petitioners-
intervenors.
G.R. No. 90044 March 5, 1991
PASCUAL V. REYES, petitioner, vs.HON. FRANKLIN DRILON, respondent.
G.R. No. 91547 March 5, 1991
CEFERINO E. DULAY, ROSARIO G. ENCARNACION and DANIEL LUCAS,
JR., petitioners, vs. HON. CATALINO MACARAIG, JR., as Executive Secretary,
HON. GUILLERMO N. CARAGUE, as Secretary of Budget and Management,
HON. DIONISIO DE LA SERNA, as Acting Secretary of Labor & Employment,
BARTOLOME CARALE, VICENTE S.E. VELOSO III, ROMEO B. TUOMO, EDNA
BONTO PEREZ, DOMINGO H. ZAPANTA, RUSTICO L. DIOKNO, LOURDES C.
JAVIER, IRINEO B. BARNALDO, ROGELIO I. RAYALA, ERNESTO G. LADRINO
III, IRENEA E. CENIZA, BERNABE S. BATUHAN, MUSIB M. BUAT, L.B.
GONZAGA, JR. and OSCAR ABELLA, respondents.
G.R. No. 91730 March 5, 1991
CONRADO B. MAGLAYA, petitioner, vs. HON. CATALINO MACARAEG, HON.
GUILLERMO CARAGUE, HON. RIZALINA CAJOCUM, and the HONORABLE
SECRETARY OF LABOR, respondents.
G.R. No. 94518 March 5, 1991
ROLANDO D. GAMBITO, petitioner, vs. THE SECRETARY OF LABOR AND
EMPLOYMENT and THE EXECUTIVE SECRETARY, respondents.
Labor Law; Republic Act 6715; National Labor Relations Commission; RA 6715,
did not abolish the NLRC, or change its essential character as a supervisory and
adjudicatory body.—Republic Act No. 6715 did not abolish the NLRC, or change its
essential character as a supervisory and adjudicatory body. Under said Act, as under
the former law, the NLRC continues to act collegially, whether it performs administrative
or rule-making functions or exercises appellate jurisdiction to review decisions and final
orders of the Labor Arbiters. The provisions conferring a somewhat greater measure of
autonomy; requiring that its membership be drawn from tripartite sectors (workers,
employees and the public sector); changing the official stations of the Commission’s
divisions; and even those prescribing higher or other qualifications for the positions of
Commissioner which, if at all, should operate only prospectively, not to mention the fact
that the petitioners (in G.R. No. 91547) have asserted without dispute that they possess
the new qualifications—none of these can be said to work so essential or radical a
revision of the nature, powers and duties of the NLRC as to justify a conclusion that the
Act in truth did not merely declare vacant but actually abolished the offices of
commissioners and created others in their place.
Same; Same; Same; Labor Arbiters; Under RA 6715, Labor Arbiters shall
continue to exercise the same basic power and function: the adjudication, in the first
instance, of certain classes of labor disputes.—Similar considerations yield the same
conclusion as far as the positions of Labor Arbiters are concerned, there being no
essential inconsistency on that score between Republic Act No. 6715 and the old law.
The Labor Arbiters continue to exercise the same basic power and function: the
adjudication, in the first instance, of certain classes of labor disputes. Their original and
exclusive jurisdiction remains substantially the same under both the old law and the
new. Again, their incumbents’ constitutionally guaranteed security of tenure cannot be
defeated by the provision for higher or other qualifications than were prescribed under
the old law; said provision can only operate prospectively and as to new appointees to
positions regularly vacated; and there is, besides, also no showing that the petitioning
Arbiters do not qualify under the new law.
NARVASA, J.:
Five (5) special civil actions are hereby jointly decided because they involve one
common, fundamental issue, the constitutionality of Republic Act No. 6715, effective
March 21, 1989, in so far as it declares vacant "all positions of the Commissioners,
Executive Labor Arbiters and Labor Arbiters of the National Labor Relations
Commission," and operates to remove the incumbents upon the appointment and
qualification of their successors. The law is entitled, "AN ACT TO EXTEND
PROTECTION TO LABOR, STRENGTHEN THE CONSTITUTIONAL RIGHTS OF
WORKERS TO SELF-ORGANIZATION, COLLECTIVE BARGAINING AND
PEACEFUL CONCERTED ACTIVITIES, FOSTER INDUSTRIAL PEACE AND
HARMONY, PROMOTE THE PREFERENTIAL USE OF VOLUNTARY MODES OF
SETTLING LABOR DISPUTES AND RE-ORGANIZE THE NATIONAL LABOR
RELATIONS COMMISSION, AMENDING PRESIDENTIAL DECREE NO. 441, AS
AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES,
APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES."1The
provision directly dealing with the reorganization of the National Labor Relations
Commission is Section 35. It reads as follows:2
Sec. 35. Equity of the Incumbent. — Incumbent career officials and rank-and-file
employees of the National labor Relations Commission not otherwise affected by
the Act shall continue to hold office without need of reappointment. However,
consistent with the need to professionalize the higher levels of officialdom invested
with adjudicatory powers and functions, and to upgrade their qualifications, ranks,
and salaries or emoluments, all positions of the Commissioners, Executive Labor
Arbiters and Labor Arbiters of the present National Labor Relations Commission
are hereby declared vacant. However, subject officials shall continue to temporarily
discharge their duties and functions until their successors shall have been duly
appointed and qualified.
The first of these five consolidated cases was filed by Labor Arbiter Jovencio Ll. Mayor
on March 8, 1989. In the year that followed, eight other officers of the Commission, as
initiators of their own separate actions or as intervenors, joined Mayor in the attempt to
invalidate the reorganization and to be reinstated to their positions in the Government
service.
G.R. No. 87211: Jovencio Mayor; and Intervenors Lourdes A. Sales and Ricardo
Olairez
Jovencio Ll. Mayor, a member of the Philippine Bar for fifteen (15) years, was appointed
Labor Arbiter in 1986 after he had, according to him, met the prescribed qualifications
and passed "a rigid screening process." Fearing that he would be removed from office
on account of the expected reorganization, he filed in this Court the action now
docketed as G.R. No. 87211. His fears proved groundless, however. He was in fact
reappointed a Labor Arbiter on March 8, 1990. Hence, as he himself says, the case
became moot as to him.
Like Mayor, both intervenors Lourdes A. Sales and Ricardo N. Olairez were appointed
Labor Arbiters in 1986, but unlike Mayor, were not among the one hundred fifty-one
(151) Labor Arbiters reappointed by the President on March 8, 1990.
G.R. No. 90044; Pascual Y Reyes; and Intervenor Eugenio L Sagmit, Jr.
At the time of the effectivity of R.A. No. 6715, Pascual Y. Reyes was holding the office
of Executive Director of the National Labor Relations Commission in virtue of an
appointment extended to him on May 30, 1975. As specified by Administrative Order
No. 10 of the Secretary of Labor, dated July 14, 1975, the functions of his office were
"to take charge of all administrative matters of the Commission and to have direct
supervision overall units and personnel assigned to perform administrative tasks;" and
Article 213 of the Labor Code, as amended, declared that the "Executive Director,
assisted by a Deputy Executive Director, shall exercise the administrative functions of
the Commission." Reyes states that he has been "a public servant for 42 years," and
"is about to retire at sixty-five (65)," in 1991.
The petitioner-in-intervention, Eugenio I. Sagmit, Jr., was Reyes' Deputy Executive
Director, appointed as such on October 27, 1987 after twenty-five (25) years of
government service.
Both Reyes and Sagmit were informed that they had been separated from employment
upon the effectivity of R.A. No. 6715, pursuant to a Memorandum-Order issued by then
Secretary of Labor Franklin Drilon on August 17, 1989 to the effect that the offices of
Executive Director and Deputy Executive Director had been abolished by Section 35,
in relation to Section 5 of said Act, and "their functions transferred to the Chairman,
aided by the Executive Clerk.
Reyes moved for reconsideration on August 29, 1989, but when no action was allegedly
taken thereon, he instituted the action at bar, G.R. No. 90044. Sagmit was afterwards
granted leave to intervene in the action.
G.R. No. 91547: Ceferino Dulay, Rosario G. Encarnacion, and Daniel M. Lucas
Petitioners Rosario G. Encarnacion and Daniel M. Lucas, Jr. were appointed National
Labor Relations Commissioners on October 20, 1986, after the Commission was
reorganized pursuant to Executive Order No. 47 of President Aquino. Later, or more
precisely on November 19, 1986, Lucas was designated Presiding Commissioner of
the Commission's Second Division; and Commissioner Ceferino E. Dulay was
appointed Presiding Commissioner of the Third Division.
Executive Order No. 252, issued by the President on July 25, 1987, amended Article
215 of the Labor Code by providing that "the Commissioners appointed under
Executive Order No. 47 dated September 10, 1986 shall hold office for a term of six (6)
years . . . (but of those thus appointed) three shall hold office for four (4) years, and
three for two (2) years . . . without prejudice to reappointment." Under Executive Order
No. 252, the terms of Encarnacion and Lucas would expire on October 23, 1992, and
that of Dulay, on December 18, 1992.
On November 18, 1989, R.A. No. 6715 being then already in effect, the President
extended to Encarnacion, Lucas and Dulay new appointments as Commissioners of
the NLRC despite the fact that, according to them, they had not been served with notice
of the termination of their services as incumbent commissioners, and no vacancy
existed in their positions. Their new appointments were submitted to Congress, but
since Congress adjourned on December 22, 1989 without approving their
appointments, said appointments became functus officio.
No other appointments were thereafter extended to Encarnacion and Dulay. Lucas was
however offered the position of Assistant Regional Director by Secretary Drilon and
then by Acting Secretary Dionisio de la Serna (by letter dated January 9, 1990 which
referred to his appointment as such Assistant Regional Director supposedly "issued by
the President on November 8, 1989"). Lucas declined the offer, believing it imported a
demotion.
They all pray that their removal be pronounced unconstitutional and void and they be
declared Commissioners lawfully in office, or, alternatively, that they be paid all salaries,
benefits and emoluments accruing to them for the unexpired portions of their six-year
terms and allowed to enjoy retirement benefits under applicable laws (pursuant to R.A.
910 and the Resolution re Judge Mario Ortiz, G. R. No. 78951, June 28, 1988).
Of the incumbent Commissioners as of the effectivity of R.A. 6715, six (6) were
reappointed, namely: (1) Hon. Edna Bonto Perez (as Presiding Commissioner, Second
Division NCR]), (2) Domingo H. Zapanta (Associate Commissioner, Second Division),
(3) Lourdes C. Javier (Presiding Commissioner, Third Division [Luzon except NCR]),
(4) Ernesto G. Ladrido III (Presiding Commissioner, Fourth Division [Visayas]), (5)
Musib M. Buat (Presiding Commissioner, Fifth Division [Mindanao]), and (6) Oscar N.
Abella (Associate Commissioner, Fifth Division). Other members appointed to the
reorganized Commission were Vicente S.E. Veloso III, Romeo B. Putong, Rustico L.
Diokno, Ireneo B. Bernardo, Rogelio I. Rayala, Irenea E. Ceniza, Bernabe S. Batuhan,
and Leon G. Gonzaga, Jr. Appointed Chairman was Hon. Bartolome
Carale, quondam Dean of the College of Law of the University of the Philippines.
G.R. No. 91730: Conrado Maglaya
Petitioner Conrado Maglaya alleges that he has been "a member of the Philippine Bar
for thirty-six (36) years of which 31 years . . . (had been) devoted to public service, the
last 24 years in the field of labor relations law;" that he was appointed Labor Arbiter on
May 30, 1975 and "was retained in such position despite the reorganization under the
Freedom Constitution of 1986 . . . (and) later promoted to and appointed by the
President as Commissioner of the . . . (NLRC) First Division on October 23, 1986." He
complains that he was effectively removed from his position as a result of the
designation of the full complement of Commissioners in and to all Five Divisions of the
NLRC by Administrative Order No. 161 dated November 18, 1989, issued by Labor
Secretary Drilon.
G.R. No. 94518: Rolando D. Gambito
Rolando Gambito passed the bar examinations in 1971, joined the Government service
in 1974, serving for sixteen years in the Department of Health, and as Labor Arbiter in
the Department of Labor and Employment from October, 1986. He was not included in
the list of newly appointed Labor Arbiters released on March 8, 1990; and his attempt
to obtain a recosideration of his exclusion therefrom and bring about his reinstatement
as Labor Arbiter was unavailing.
The Basic Issue
A number of issues have been raised and ventilated by the petitioners in their separate
pleadings. They may all be reduced to one basic question, relating to the
constitutionality of the provisions of Republic Act No. 6715 DECLARING VACANT "all
positions of the Commissioners, Executive Labor Arbiters and Labor Arbiters of the
present National Labor Relations Commission,"3 according to which the public
respondents —
1) considered as effectively separated from the service inter alia, all holders of said
positions at the time of the effectivity of said Republic Act No. 6715, including the
positions of Executive Director and Deputy Executive Director of the Commission, and
2) consequently, thereafter caused the appointment of other persons to the new
positions specified in said statute: of Chairman Commissioners, Executive Clerk,
Deputy Executive Clerk, and Labor Arbiters of the reorganized National Labor Relations
Commission. The old positions were declared vacant because, as the statute states, of
"the need to professionalize the higher levels of officialdom invested with adjudicatory
powers and functions, and to upgrade their qualifications, ranks, and salaries or
emoluments."
As everyone knows, security of tenure is a protected right under the
Constitution.1âwphi1 The right is secured to all employees in privates as well as in
public employment. "No officer or employee in the civil service," the Constitution
declares, "shall be removed or suspended except for cause provided by law."4
There can scarcely be any doubt that each of the petitioners — commissioner,
administrative officer, or labor arbiter — falls within the concept of an "officer or
employee in the civil service" since the civil service "embraces all branches,
subdivisions, instrumentalities, and agencies of the Government, including
government—owned or controlled corporations with original charters."5 The
Commissioners thus had the right to remain of office until the expiration of the terms for
which they had been appointed, unless sooner removed "for cause provided by law."
So, too, the Executive Director and Deputy Executive Director, and the Labor Arbiters
had the right to retain their positions until the age of compulsory retirement, unless
sooner removed "for cause provided by law." None of them could be deemed to be
serving at the pleasure of the President.
Now, a recognized cause for several or termination of employment of a Government
officer or employee is the abolition by law of his office as a result of reorganization
carried out by reason of economy or to remove redundancy of functions, or clear and
explicit constitutional mandate for such termination of employment.6 Abolition of an
office is obviously not the same as the declaration that that office is vacant. While it is
undoubtedly a prerogative of the legislature to abolish certain offices, it can not be
conceded the power to simply pronounce those offices vacant and thereby effectively
remove the occupants or holders thereof from the civil service. Such an act would
constitute, on its face, an infringement of the constitutional guarantee of security of
tenure, and will have to be struck down on that account. It can not be justified by the
professed "need to professionalize the higher levels of officialdom invested with
adjudicatory powers and functions, and to upgrade their qualifications, ranks, and
salaries or emoluments."
The Constitution does not, of course, ordain the abolition of the petitioners' positions of
their removal from their offices; and there is no claim that the petitioners' separation
from the service is due to a cause other than RA 6715. The inquiry therefore should be
whether or not RA 6715 has worked such an abolition of the petitioners' offices,
expressly or impliedly. This is the only mode by which, under the circumstances, the
petitioners' removal from their positions may be defended and sustained.
It is immediately apparent that there is no express abolition in RA 6715 of the
petitioners' positions. So, justification must be sought, if at all, in an implied abolition
thereof; i.e., that resulting from an irreconcilable inconsistency between the nature,
duties and functions of the petitioners' offices under the old rules and those
corresponding thereof under the new law. An examination of the relevant provisions of
RA 6715, with a view to discovering the changes thereby effected on the nature,
composition, powers, duties and functions of the Commission and the Commissioners,
the Executive Director, the Deputy Executive Director, and the labor Arbiters under the
prior legislation, fails to disclose such essential inconsistencies.
1. Amendments as Regards the NLRC and the Commissioners
First, as regards the National Labor Relations Commissioners.
A. Nature and Composition of the Commission, Generally
1. Prior to its amendment by RA 6715, Article 213 of the Labor Code envisaged the
NLRC as being an integral part of the Department of labor and Employment. "There
shall," it said, "be a National Labor Relations Commission in the Department of Labor
and Employment . . . ." RA 6715 would appear to have made the Commission
somewhat more autonomous. Article 213 now declares that, "There shall be a National
labor Relations Commission which shall be attached to the Department of labor and
Employment for program coordination only . . . ."
2. Tripartite representation was to a certain extent restored in the Commission. The
same Section 213, as amended, now provides that the Chairman and fourteen (14)
members composing the NLRC shall be chosen from the workers', employers' and the
public sectors, as follows:
Five (5) members each shall be chosen from among the nominees of the workers
and employers organization, respectively. The Chairman and the four (4) remaining
members shall come from the public sector, with the latter to be chosen from among
the recommendees of the Secretary of Labor and Employment.
However, once they assume office," the members nominated by the workers and
employers organizations shall divest themselves of any affiliations with or interest in
the federation or association to which they belong."
B. Allocation of Powers Between NLRC En Banc and its Divisions
Another amendment was made in respect of the allocation of powers and functions
between the Commission en banc, on the one hand, and its divisions, on the other.
Both under the old and the amended law, the Commission was vested with rule-making
and administrative authority, as well as adjudicatory and other powers, functions and
duties, and could sit en banc or in divisions of three (3) members each. But whereas
under the old law, the cases to be decided en banc and those by a division were
determined by rules laid down by the Commission with the approval of the ex officio,
Chairman (the Secretary of labor) — said Commission, in other words, then
exercise bothadministrative and adjudicatory powers — the law now, as amended by
RA 6715, provides that —
1) the Commission "shall sit en banc only for purposes of promulgating rules and
regulations governing the hearing and disposition of cases before any of its
divisions and regional branches and formulating policies affecting its administration
and operations;" but
2) it "shall exercise its adjudicatory and all other powers, functions and duties
through its divisions."
C. Official Stations, and Appellate Jurisdiction over Fixed Territory
Other changes related to the official station of the Commission and its divisions, and
the territory over which the divisions could exercise exclusive appellate jurisdiction.
1. Under the old law, the Commission en banc and its divisions had their main office
in Metropolitan Manila; and appeals could be taken to them from decisions of Labor
Arbiters regardless of the regional office whence the case originated.
 2. Under the law now, the First and Second Divisions have their official station in
Metropolitan Manila and "handle cases coming from the National Capital Region;"
the Third Division has its main office also in Metropolitan Manila but would have
appellate jurisdiction over "cases from other parts of Luzon;" and the Fourth and
Fifth Divisions have their main offices in Cebu and Cagayan de Oro City, and
exercise jurisdiction over cases "from the Visayas and Mindanao," respectively; and
the appellate authority of the divisions is exclusive "within their respective territorial
jurisdiction."
D. Qualifications and Tenure of Commissioners
Revisions were also made by RA 6715 with respect to the qualifications and tenure of
the National Labor Relations Commissioners.
Prescribed by the old law as qualifications for commissioners — appointed for a term
of six (6) years — were that they (a) by members of the Philippine bar, and (b) have at
least five years' experience in handling labor-management relations.7
RA 6715, on the other hand, requires (a) membership in the bar, (b) engagement in the
practice of law for at least 15 years, (c) at least five years' experience or exposure in
the field of labor-management relations, and (d) preferably, residence in the region
where the commissioner is to hold office. The commissioners appointed shall hold office
during good behavior until they reach the age of sixty-five (65) years, unless they are
sooner removed for cause as provided by law or become incapacited to discharge the
duties of their office.
2. Amendments Regarding Executive Labor Arbiters and Labor Arbiters
A. Qualifications
The old provided for one hundred fifty (150) labor arbiters assigned to the different
regional offices or branches of the Department of Labor and Employment (including
sub-regional branches or provincial extension units), each regional branch being
headed by an Executive Labor Arbiter. RA 6715 does not specify any fixed number of
labor arbiters, but simply provides that there shall be as many labor arbiters as may be
necessary for the effective and efficient operation of the Commission.
The old law declared that Executive Labor Arbiters and Labor Arbiters should be
members of the Bar, with at least two (2) years experience in the field of labor
management relations. They were appointed by the President upon recommendation
of the Chairman, and were "subject to the Civil Service Law, rules and regulations."
On the other hand, RA 6715 requires that the "Executive Labor Arbiters and Labor
Arbiters shall likewise be members of the Philippine Bar," but in addition "must have
been in the practice of law in the Philippines for at least seven (7) years, with at least
three (3) years experience or exposure in the field of labor-management relations." For
"purposes of reappointment," however, "incumbent Executive Labor Arbiters and Labor
Arbiters who have been engaged in the practice of law for at least five (5) years may
be considered as already qualified." They are appointed by the President, on
recommendation of the Secretary of Labor and Employment, and are subject to the
Civil Service Law, rules and regulations.
B. Exclusive Original Jurisdiction
Before the effectivity of RA 6715, the exclusive original jurisdiction of labor arbiters
comprehended the following cases involving all workers, whether agricultural or non-
agricultural:
(1) Unfair labor practice cases;
(2) Those that workers may file involving wages, hours of work and other terms and
conditions of employment;
(3) All money claims of workers, including those based on non-payment or
underpayment of wages, overtime compensation, separation pay and other benefits
provided by law or appropriate agreement, except claims for employees'
compensation, social security, medicare and maternity benefits;
(4) Cases involving household services; and
(5) Cases arising from any violation of Article 265 of this Code, including questions
involving the legality of strikes and lockouts.
Some changes were introduced by RA 6715, indicated by italics in the enumeration
which shortly follows. The exclusive, original jurisdiction of Labor Arbiters now
embraces the following involving all workers, whether agricultural or non-agricultural:
(1) Unfair labor practice cases;
(2) Termination disputes;
(3) If accompanies with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;
(4) Claims for actual, moral, exemplary and other forms of damages arising from
the employer-employee relations;8
(5) Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts;
(6) Except claims for employees compensation, social security, medicare and
maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00), whether or not accompanies with a
claim for reinstatement.
Now, as before, the Labor Arbiters are given thirty (30) calendar days after the
submission of the case by the parties to decide the case, without extension, except that
the present statute stresses that "even in the absence of stenographic notes," the
period to decide is still thirty days, without extension.
Furthermore, RA 6715 provides that "Cases arising from the interpretation or
implementation of collective bargaining agreements and those arising from the
interpretation or enforcement of company personnel policies shall be disposed of by
the Labor Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements."
3. Amendments as Regards the Executive Director and Deputy Executive Director
Prior to RA 6715, there was, as earlier stated, an Executive Director, assisted by a
Deputy Executive Director, who was charged with the "exercise (of) the administrative
functions of the Commission."9 More particularly, his chief functions were "to take
charge of all administrative matters of the Commission and to have direct supervision
over all units and personnel assigned to perform administrative tasks."10 Although not
so stated in the law, in the performance of their functions, the Executive Director and
the Deputy Executive Director were obviously themselves subject to the supervision
and control of the head of office, the ex officio Chairman of the National Labor Relations
Commission (the Secretary of Labor), or the Commission itself.
Under RA 6715, the Secretary of Labor is no longer ex officio Chairman of the
Commission. There has been created the office of Chairman, who "shall have the
administrative supervision over the Commission and its regional branches and all its
personnel, including the Executive Labor Arbiters and Labor Arbiters." In this function,
the law says, he shall be "aided by the Executive Clerk of the Commission."
The Executive Clerk appears to be the officer who used to be known under the old law
as the Executive Director. The office of Executive Director is nowhere mentioned in RA
6715. Said Executive Clerk is given the additional responsibility of assisting the
Commission en banc and the First Division, in performing "such similar or equivalent
functions and duties as are discharged by the Clerk of Court . . . of the Court of
Appeals." The position of Deputy Executive Clerks have also been created whose main
role is to assist the other divisions of the Commission (the second, third, fourth and fifth)
"in the performance of such similar or equivalent functions and duties as are discharged
by the . . . Deputy Clerk(s) of the Court of Appeals."
Summing up —
1. Republic Act No. 6715 did not abolish the NLRC, or change its essential character
as a supervisory and adjudicatory body. Under said Act, as under the former law,
the NLRC continues to act collegially, whether it performs administrative or rule-
making functions or exercises appellate jurisdiction to review decisions and final
orders of the Labor Arbiters. The provisions conferring a somewhat greater
measure of autonomy; requiring that its membership be drawn from tripartite sectors
(workers, employees and the public sector); changing the official stations of the
Commission's divisions, and even those prescribing higher or other qualifications
for the positions of Commissioner which, if at all, should operate only prospectively,
not to mention the fact that the petitioners (in G.R. No. 91547) have asserted without
dispute that they possess the new qualifications — none of these can be said to
work so essential or radical a revision of the nature, powers and duties of the NLRC
as to justify a conclusion that the Act in truth did not merely declare vacant but
actually abolished the offices of commissioners and created others in their place.
2. Similar considerations yield the same conclusion as far as the positions of Labor
Arbiters are concerned, there being no essential inconsistency on that score
between Republic Act No. 6715 and the old law. The Labor Arbiters continue to
exercise the same basic power and function: the adjudication, in the first instance,
of certain classes of labor disputes. Their original and exclusive jurisdiction remains
substantially the same under both the old law and the new. Again, their incumbents'
constitutionally guaranteed security of tenure cannot be defeated by the provision
for higher or other qualifications than were prescribed under the old law; said
provision can only operate prospectively and as to new appointees to positions
regularly vacated; and there is, besides, also no showing that the petitioning
Arbiters do not qualify under the new law.
3. The position titles of "Executive Clerk" and "Deputy Executive Clerk(s)" provided
for in RA 6715 are obviously not those of newly-created offices, but new
appellations or designations given to the existing positions of Executive Director
and Deputy Executive Director. There is no essential change from the prescribed
and basically administrative duties of these positions and, at the same time, no
mention in the Act of the former titles, from which the logical conclusion is that what
was intended was merely a change in nomenclature, not an express or implied
abolition. Neither does the Act specify the qualifications for Executive Clerk and
Deputy Executive Clerks. There is no reason to suppose that these could be higher
than those for Executive Director and Deputy Executive Director, or that anything
inheres in these positions that would preclude their incumbents from being named
Executive Clerk and Deputy Executive Clerks.
WHEREFORE, the petitions are, as they must be, GRANTED , and the following
specific dispositions are hereby RENDERED:
1. In G.R. No. 91547, and G.R. No. 91730, the removal of petitioners Rosario G.
Encarnacion, Daniel M. Lucas, Jr., Ceferino E. Dulay, and Conrado Maglaya as
Commissioners of the NLRC is ruled unconstitutional and void; however, to avoid
displacement of any of the incumbent Commissioners now serving, it not appearing
that any of them is unfit or has given cause for removal, and conformably to the
alternative prayer of the petitioners themselves, it is ORDERED that said petitioners
be paid all salaries, benefits and emoluments accruing to them for the unexpired
portions of their six-year terms and allowed to enjoy retirement benefits under
applicable laws, pursuant to RA No. 910 and this Court's Resolution in Ortiz vs.
Commission on Elections, G.R. No. 79857, 161 SCRA 812;
This disposition does not involve or apply to respondent Hon. Bartolome Carale,
who replaced the Secretary of Labor as ex officio Chairman of the NLRC pursuant
to RA 6715, none of the petitioners having been affected or in any manner
prejudiced by his appointment and incumbency as such;
2. In G.R. No. 90044, the removal of petitioner Pascual Y. Reyes and petitioner-in-
intervention Eugenio L. Sagmit, Jr. as NLRC Executive Director and Deputy
Executive Director, respectively, is likewise declared unconstitutional and void, and
they are ordered reinstated as Executive Clerk and Deputy Executive Clerk,
respectively, unless they opt for retirement, in either case with full back salaries,
emoluments and benefits from the date of their removal to that of their
reinstatement; and
3. In G.R. Nos. 87211, and 94518, petitioners-intervenors Lourdes A. Sales and
Ricardo Olairez and petitioner Rolando D. Gambito, having also been illegally
removed as Labor Arbiters, are ordered reinstated to said positions with full back
salaries, emoluments and benefits from the dates of their removal up to the time
they are reinstated. No pronouncement as to costs. SO ORDERED.
Footnotes
1
Emphasis supplied.
2
Emphasis supplied.
3
Sec. 35: SEE footnote 1 and related text.
4
Art. IX, B, Sec. 2(3); and as regards private employment, ART. XII, Sec. 3 inter
alia provides that all workers "shall be entitled to security of tenure, humane conditions
or work, and a living wage. . . ."
5
Art. IX, B, Sec. 2(1), 1987 Constitution.
6
Dario v. Mison, G.R. No. 81954 (and G.R. Nos. 81967, 82023, 83737, 85310, 85335
and 86241), Aug. 8, 1989, citing Ginson v. Municipality of Murcia, 157 SCRA 1; de la
Llana v. Alba, 112 SCRA 294; Cruz v. Primicias, 23 SCRA 998; see also Manalang v.
Quitoriano, 96 Phil. 903, 907 holding inter alia that RA 761 had expressly abolished the
Placement Bureau and, by necessary implication, the office of Director thereof.
7
But of those first appointed, three were to hold office for four (4) years and another
three, for two (2) years, without prejudice to reappointment.
8
Even prior to RA 6715, the grant jurisdiction to labor arbiters by Article 217 of the
Labor Code, as amended, has been held to be sufficiently comprehensive to include
claims for moral and exemplary damages resulting from illegal dismissal. Primero v.
IAC, 156 SCRA 435; Sagmit v. Subido, 133 SCRA 359; Getz. v. CA, 116 SCRA 86;
Cardinal Industries v. Vallejos, 114 SCRA 47; Aguda v. Vallejos, 113 SCRA 69; Pepsi-
Cola Bottling Co. v. Martinez, 112 SCRA 578.
9
Art. 213, Labor Code, as amended.
10
Administrative Order No. 10 of the Secretary of Labor, dated July 14, 1975.
FIRST DIVISION
G.R. No. 89621 September 24, 1991
PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented by its
Plant General Manager ANTHONY B. SIAN, ELEAZAR LIMBAB, IRENEO
BALTAZAR & JORGE HERAYA, petitioners, vs. HON. LOLITA O. GAL-LANG,
SALVADOR NOVILLA, ALEJANDRO OLIVA, WILFREDO CABAÑAS &
FULGENCIO LEGO, respondents.
Civil Law; Labor Law; Jurisdiction; Not every controversy involving workers and their
employers can be resolved only by the labor arbiters; There must be a reasonable
causal connection between the claim asserted and employee-employer relations to put
the case under the provisions of Article 217.—It must be stressed that not every
controversy involving workers and their employers can be resolved only by the labor
arbiters. This will be so only if there is a “reasonable causal connection” between the
claim asserted and employee-employer relations to put the case under the provisions
of Article 217. Absent such a link, the complaint will be cognizable by the regular courts
of justice in the exercise of their civil and criminal jurisdiction.
Same; Same; Same; Same; Although a controversy is between an employer and
an employee, the Labor Arbiters have no jurisdiction if the Labor Code is not involved.—
ln Molave Motor Sales, Inc. v. Laron, the same Justice held for the Court that the claim
of the plaintiff against its sales manager for payment of certain accounts pertaining to
his purchase of vehicles and automotive parts, repairs of such vehicles, and cash
advances from the corporation was properly cognizable by the RTC of Dagupan City
and not the labor arbiter, because “although a controversy is between an employer and
an employee, the Labor Arbiters have no jurisdiction if the Labor Code is not involved.”
Same; Same; Same; Same; No reasonable causal connection between the
complaint and the relations of the parties as employer and employees in the case at
bar.—The case now before the Court involves a complaint for damages for malicious
prosecution which was filed with the Regional Trial Court of Leyte by the employees of
the defendant company. It does not appear that there is a “reasonable causal
connection” between the complaint and the relations of the parties as employer and
employees. The complaint did not arise from such relations and in fact could have
arisen independently of an employment relationship between the parties. No such
relationship or any unfair labor practice is asserted. What the employees are alleging
is that the petitioners acted with bad faith when they filed the criminal complaint which
the Municipal Trial Court said was intended “to harass the poor employees” and the
dismissal of which was affirmed by the Provincial Prosecutor “for’ lack of evidence to
establish even a slightest probability that all the respondents herein have committed
the crime imputed against them.” This is a matter which the labor arbiter has no
competence to resolve as the applicable law is not the Labor Code but the Revised
Penal Code. PETITION for review from the decision of the RTC of Palo, Leyte.
CRUZ, J.
The question now before us has been categorically resolved in earlier decisions of the
Court that a little more diligent research would have disclosed to the petitioners. On the
basis of those cases and the facts now before us, the petition must be denied.
The private respondents were employees of the petitioner who were suspected of
complicity in the irregular disposition of empty Pepsi Cola bottles. On July 16, 1987, the
petitioners filed a criminal complaint for theft against them but this was later withdrawn
and substituted with a criminal complaint for falsification of private documents. On
November 26, 1987, after a preliminary investigation conducted by the Municipal Trial
Court of Tanauan, Leyte, the complaint was dismissed. The dismissal was affirmed on
April 8, 1988, by the Office of the Provincial Prosecutor.
Meantime, allegedly after an administrative investigation, the private respondents were
dismissed by the petitioner company on November 23, 1987. As a result, they lodged
a complaint for illegal dismissal with the Regional Arbitration Branch of the NLRC in
Tacloban City on December 1, 1987, and decisions manded reinstatement with
damages. In addition, they instituted in the Regional Trial Court of Leyte, on April 4,
1988, a separate civil complaint against the petitioners for damages arising from what
they claimed to be their malicious prosecution.
The petitioners moved to dismiss the civil complaint on the ground that the trial court
had no jurisdiction over the case because it involved employee-employer relations that
were exclusively cognizable by the labor arbiter. The motion was granted on February
6, 1989. On July 6, 1989, however, the respondent judge, acting on the motion for
reconsideration, reinstated the complaint, saying it was "distinct from the labor case for
damages now pending before the labor courts." The petitioners then came to this Court
for relief.
The petitioners invoke Article 217 of the Labor Code and a number of decisions of this
Court to support their position that the private respondents civil complaint for damages
falls under the jurisdiction of the labor arbiter. They particularly cite the case of Getz
Corporation v. Court of Appeals,1 where it was held that a court of first instance had no
jurisdiction over the complaint filed by a dismissed employee "for unpaid salary and
other employment benefits, termination pay and moral and exemplary damages."
We hold at the outset that the case is not in point because what was involved there was
a claim arising from the alleged illegal dismissal of an employee, who chose to complain
to the regular court and not to the labor arbiter. Obviously, the claim arose from
employee-employer relations and so came under Article 217 of the Labor Code which
then provided as follows:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor
Arbiters shall have the original and exclusive jurisdiction to hear and decide within
thirty (30) working days after submission of the case by the parties for decision, the
following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and other terms and
conditions of employment;
3. All money claims of workers, including those based on non-payment or
underpayment of wages, overtime compensation, separation pay and other benefits
provided by law or appropriate agreement, except claims for employees'
compensation, social security, medicare and maternity benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code, including questions
involving the legality of strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all cases
decided by labor Arbiters.2
It must be stressed that not every controversy involving workers and their employers
can be resolved only by the labor arbiters. This will be so only if there is a "reasonable
causal connection" between the claim asserted and EE-ER relations to put the case
under the provisions of Article 217. Absent such a link, the complaint will be cognizable
by the regular courts of justice in the exercise of their civil and criminal jurisdiction.
In Medina v. Castro-Bartolome,3 two employees filed in the CFI of Rizal a civil complaint
for damages against their employer for slanderous remarks made against them by the
company president. On the order dismissing the case because it came under the
jurisdiction of the labor arbiters, Justice Vicente Abad Santos said for the Court:
 It is obvious from the complaint that the plaintiffs have not alleged any unfair labor
practice. Theirs is a simple action for damages for tortious acts allegedly committed
by the defendants. Such being the case, the governing statute is the Civil Code and
not the Labor Code. It results that the orders under review are based on a wrong
premise.
In Singapore Airlines Ltd. v. Paño,4 where the plaintiff was suing for damages for
alleged violation by the defendant of an "Agreement for a Course of Conversion
Training at the Expense of Singapore Airlines Limited," the jurisdiction of the CFI of
Rizal over the case was questioned. The Court, citing the earlier case of Quisaba v.
Sta. Ines Melale Veneer and Plywood, Inc.,5 declared through Justice Herrera:
Stated differently, petitioner seeks protection under the civil laws and claims no
benefits under the Labor Code. The primary relief sought is for liquidated damages
for breach of a contractual obligation. The other items demanded are not labor
benefits demanded by workers generally taken cognizance of in labor disputes,
such as payment of wages, overtime compensation or separation pay. The items
claimed are the natural consequences flowing from breach of an obligation,
intrinsically a civil dispute.
In Molave Sales, Inc. v. Laron,6 the same Justice held for the Court that the claim of the
plaintiff against its sales manager for payment of certain accounts pertaining to his
purchase of vehicles and automotive parts, repairs of such vehicles, and cash
advances from the corporation was properly cognizable by the RTC of Dagupan City
and not the labor arbiter, because "although a controversy is between an employer and
an employee, the Labor Arbiters have no jurisdiction if the Labor Code is not involved."
The latest ruling on this issue is found in San Miguel Corporation v. NLRC,7 where the
above cases are cited and the changes in Article 217 are recounted. That case involved
a claim of an employee for a P60,000.00 prize for a proposal made by him which he
alleged had been accepted and implemented by the defendant corporation in the
processing of one of its beer products. The claim was filed with the labor arbiter, who
dismissed it for lack of jurisdiction but was reversed by the NLRC on appeal. In setting
aside the appealed decision and dismissing the complaint, the Court observed through
Justice Feliciano:
It is the character of the principal relief sought that appears essential, in this
connection. Where such principal relief is to be granted under labor legislation or a
collective bargaining agreement, the case should fall within the jurisdiction of the
Labor Arbiter and the NLRC, even though a claim for damages might be asserted as
an incident to such claim.
xxx xxx xxx
Where the claim to the principal relief sought is to be resolved not by reference to the
Labor Code or other labor relations statute or a collective bargaining agreement but
by the general civil law, the jurisdiction over the dispute belongs to the regular courts
of justice and not to the Labor Arbiter and the NLRC. In such situations, resolution of
the dispute requires expertise, not in labor management relations nor in wage
structures and other terms and conditions of employment, but rather in the application
of the general civil law. Clearly, such claims fall outside the area of competence or
expertise ordinarily ascribed to Labor Arbiters and the NLRC and the rationale for
granting jurisdiction over such claims to these agencies disappears.
xxx xxx xxx
While paragraph 3 above refers to "all money claims of workers," it is not necessary
to suppose that the entire universe of money claims that might be asserted by workers
against their employers has been absorbed into the original and exclusive jurisdiction
of Labor Arbiters.
xxx xxx xxx
For it cannot be presumed that money claims of workers which do not arise out of or
in connection with their employer-employee relationship, and which would therefore
fall within the general jurisdiction of the regular courts of justice, were intended by the
legislative authority to be taken away from the jurisdiction of the courts and lodged
with Labor Arbiters on an exclusive basis. The Court, therefore, believes and so holds
that the 'money claims of workers" referred to in paragraph 3 of Article 217 embraces
money claims which arise out of or in connection with the employer- employee
relationship, or some aspect or incident of such relationship. Put a little differently,
that money claims of workers which now fall within the original and exclusive
jurisdiction of Labor Arbiters are those money claims which have some reasonable
causal connection with the employer-employee relationship (Ibid.).
The case now before the Court involves a complaint for damages for malicious
prosecution which was filed with the Regional Trial Court of Leyte by the employees of
the defendant company. It does not appear that there is a "reasonable causal
connection" between the complaint and the relations of the parties as employer and
employees. The complaint did not arise from such relations and in fact could have
arisen independently of an employment relationship between the parties. No such
relationship or any unfair labor practice is asserted. What the employees are alleging
is that the petitioners acted with bad faith when they filed the criminal complaint which
the Municipal Trial Court said was intended "to harass the poor employees" and the
dismissal of which was affirmed by the Provincial Prosecutor "for lack of evidence to
establish even a slightest probability that all the respondents herein have committed
the crime imputed against them." This is a matter which the labor arbiter has no
competence to resolve as the applicable law is not the Labor Code but the RPC.
"Talents differ, all is well and wisely put," so observed the philosopher-poet.8 So it must
be in the case we here decide. WHEREFORE, the order dated July 6, 1989, is
AFFIRMED and the petition DENIED, with costs against the petitioner. SO ORDERED.
Footnotes
1 116 SCRA 86.
2 This has since been amended by Sec. 9, R.A. 6715, effective March 21, 1989, to read as follows:
ART. 217. Jurisdiction of Labor Arbiters and the Commission.-4a) Except as otherwise provided under
this Code the LA shall have original and exclusive jurisdiction to hear and decide within 30 calendar days
after the submission of the case by the parties for decision without extension, even in the absence of
stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those case that workers may file involving wages, rates
of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the ER-EE relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality
of strike and lockouts; and
6. Except claims for EEs Compensation, Social Security, Medicare & maternity benefits, all other claims,
arising from ER-EE relations, including those of persons in domestic or household service, involving an
amount exceeding P5,000.00 regardless of whether accompanied w/a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction diction over all cases decided by LAs.
(c) Cases arising from the interpretation or implementation of collective bargaining agreement and those
arising from the interpretation or enforcement of company personnel policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be
provided in said agreements.
3 116 SCRA 597.
4 122 SCRA 671.
5 58 SCRA 771.
6 129 SCRA 719.
7 161 SCRA 719.
8 "The Mountain and the Squirrel," by Ralph Waldo Emerson.
SECOND DIVISION
G.R. No. 120567 March 20, 1998
PHILIPPINE AIRLINES, INC., petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, FERDINAND PINEDA and GOGFREDO CABLING, respondents.
Labor Law; Remedial Law; Injunctions; Injunction is not a cause of action in itself
but merely a provisional remedy, an adjunct to a main suit.—Generally, injunction is a
preservative remedy for the protection of one’s substantive rights or interest. It is not a
cause of action in itself but merely a provisional remedy, an adjunct to a main suit. It is
resorted to only when there is a pressing necessity to avoid injurious consequences
which cannot be remedied under any standard of compensation. The application of the
injunctive writ rests upon the existence of an emergency or of a special reason before
the main case be regularly heard. The essential conditions for granting such temporary
injunctive relief are that the complaint alleges facts which appear to be sufficient to
constitute a proper basis for injunction and that on the entire showing from the
contending parties, the injunction is reasonably necessary to protect the legal rights of
the plaintiff pending the litigation. Injunction is also a special equitable relief granted
only in cases where there is no plain, adequate and complete remedy at law.
Same; Same; Same; The power of the National Labor Relations Commission to
issue an injunction writ originates from “any labor dispute” upon application by a party
thereof, which application if not granted “may cause grave or irreparable damage to
any party or render ineffectual any decision in favor of such party”; Labor dispute
Defined.—From the foregoing provisions of law, the power of the NLRC to issue an
injunctive writ originates from “any labor dispute” upon application by a party thereof,
which application if not granted “may cause grave or irreparable damage to any party
or render ineffectual any decision in favor of such party.” The term “labor dispute” is
defined as “any controversy or matter concerning terms and conditions of employment
or the association or representation of persons in negotiating, fixing, maintaining,
changing, or arranging the terms and conditions of employment regardless of whether
or not the disputants stand in the proximate relation of employers and employees.”
Same; Same; Same; Controversy and justiciable controversy defined.—The
term “controversy” is likewise defined as “a litigated question; adversary proceeding in
a court of law; a civil action or suit, either at law or in equity; a justiciable dispute.” A
“justiciable controversy” is “one involving an active antagonistic assertion of a legal right
on one side and a denial thereof on the other concerning a real, and not a mere
theoretical question or issue.”
Same; Same; Same; It is an essential requirement that there must first be a labor
dispute between the contending parties before the labor arbiter.—Taking into account
the foregoing definitions, it is an essential requirement that there must first be a labor
dispute between the contending parties before the labor arbiter. In the present case,
there is no labor dispute between the petitioner and private respondents as there has
yet been no complaint for illegal dismissal filed with the labor arbiter by the private
respondents against the petitioner.
Same; Same; Same; NLRC exceeded its jurisdiction when it issued the assailed
Order granting private respondents’ petition for injunction and ordering the petitioner to
reinstate private respondents.—On the other hand, the NLRC shall have
exclusive appellate jurisdiction over all cases decided by labor arbiters as provided in
Article 217(b) of the Labor Code. In short, the jurisdiction of the NLRC in illegal
dismissal cases is appellate in nature and, therefore, it cannot entertain the private
respondents’ petition for injunction which challenges the dismissal orders of petitioner.
Article 218(e) of the Labor Code does not provide blanket authority to the NLRC or any
of its divisions to issue writs of injunction, considering that Section 1 of Rule XI of the
New Rules of Procedure of the NLRC makes injunction only an ancillary remedy in
ordinary labor disputes.” Thus, the NLRC exceeded its jurisdiction when it issued the
assailed Order granting private respondents’ petition for injunction and ordering the
petitioner to reinstate private respondents.
Same; Same; Same; Under the Labor Code, the ordinary and proper recourse of
an illegally dismissed employee is to file a complaint for illegal dismissal with the labor
arbiter.—Under the Labor Code, the ordinary and proper recourse of an illegally
dismissed employee is to file a complaint for illegal dismissal with the labor arbiter. In
the case at bar, private respondents disregarded this rule and directly went to the NLRC
through a petition for injunction praying that petitioner be enjoined from enforcing its
dismissal orders. In Lamb vs. Phipps, we ruled that if the remedy is specifically provided
by law, it is presumed to be adequate. Moreover, the preliminary mandatory injunction
prayed for by the private respondents in their petition before the NLRC can also be
entertained by the labor arbiter who, as shown earlier, has the ancillary power to issue
preliminary injunctions or restraining orders as an incident in the cases pending before
him in order to preserve the rights of the parties during the pendency of the case.
Same; Same; Same; When an injury is considered irreparable.—An injury is
considered irreparable if it is of such constant and frequent recurrence that no fair and
reasonable redress can be had therefor in a court of law, or where there is no standard
by which their amount can be measured with reasonable accuracy, that is, it is not
susceptible of mathematical computation. It is considered irreparable injury when it
cannot be adequately compensated in damages due to the nature of the injury itself or
the nature of the right or property injured or when there exists no certain pecuniary
standard for the measurement of damages.
Same; Same; Same; An injunction, as an extraordinary remedy, is not favored in
Labor Law.—An injunction, as an extraordinary remedy, is not favored in labor law
considering that it generally has not proved to be an effective means of settling labor
disputes. It has been the policy of the State to encourage the parties to use the
nonjudicial process of negotiation and compromise, mediation and arbitration. Thus,
injunctions may be issued only in cases of extreme necessity based on legal grounds
clearly established, after due consultations or hearing and when all efforts at
conciliation are exhausted which factors, however, are clearly absent in the present
case. SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
MARTINEZ, J.:
Can the National Labor Relations Commission (NLRC), even without a complaint for
illegal dismissal tiled before the labor arbiter, entertain an action for injunction and issue
such writ enjoining petitioner Philippine Airlines, inc. from enforcing its Orders of
dismissal against private respondents, and ordering petitioner to reinstate the private
respondents to their previous positions?
This is the pivotal issue presented before us in this petition for certiorari under Rule 65
of the Revised Rules of Court which seeks the nullification of the injunctive writ dated
April 3, 1995 issued by the NLRC and the Order denying petitioner's motion for
reconsideration on the ground that the said Orders were issued in excess of jurisdiction.
Private respondents are flight stewards of the petitioner. Both were dismissed from the
service for their alleged involvement in the April 3, 1993 currency smuggling in Hong
Kong.
Aggrieved by said dismissal, private respondents filed with the NLRC a petition1 for
injunction praying that:
I. Upon filing of this Petition, a temporary restraining order be issued, prohibiting
respondents (petitioner herein) from effecting or enforcing the Decision dated Feb.
22, 1995, or to reinstate petitioners temporarily while a hearing on the propriety of
the issuance of a writ of preliminary injunction is being undertaken;
 II. After hearing, a writ of preliminary mandatory injunction be issued ordering
respondent to reinstate petitioners to their former positions pending the hearing of
this case, or, prohibiting respondent from enforcing its Decision dated February 22,
1995 while this case is pending adjudication;
III. After hearing, that the writ of preliminary injunction as to the reliefs sought for be
made permanent, that petitioners be awarded full backwages, moral damages of
PHP 500,000.00 each and exemplary damages of PHP 500,000.00 each, attorney's
fees equivalent to ten percent of whatever amount is awarded, and the costs of suit.
On April 3, 1995, the NLRC issued a temporary mandatory injunction 2 enjoining
petitioner to cease and desist from enforcing its February 22, 1995 Memorandum of
dismissal. In granting the writ, the NLRC considered the following facts, to wit:
. . . that almost two (2) years ago, i.e. on April 15, 1993, the petitioners were
instructed to attend an investigation by respondent's "Security and Fraud
Prevention Sub-Department" regarding an April 3, 1993 incident in Hongkong at
which Joseph Abaca, respondent's Avionics Mechanic in Hongkong "was
intercepted by the Hongkong Airport Police at Gate 05 . . . the ramp area of the Kai
Tak International Airport while . . . about to exit said gate carrying a . . . bag said to
contain some 2.5 million pesos in Philippine Currencies. That at the Police Station.
Mr. Abaca claimed that he just found said plastic bag at the Skybed Section of the
arrival flight PR300/03 April 93," where petitioners served as flight stewards of said
flight PR300; . . the petitioners sought "a more detailed account of what this HKG
incident is all about"; but instead, the petitioners were administratively charged, "a
hearing" on which "did not push through" until almost two (2) years after, i.e, "on
January 20, 1995 . . . where a confrontation between Mr. Abaca and petitioners
herein was compulsorily arranged by the respondent's disciplinary board" at which
hearing, Abaca was made to identify petitioners as co-conspirators; that despite the
fact that the procedure of identification adopted by respondent's Disciplinary Board
was anomalous "as there was no one else in the line-up (which could not be called
one) but petitioners . . . Joseph Abaca still had difficulty in identifying petitioner
Pineda as his co-conspirator, and as to petitioner Cabling, he was implicated and
pointed by Abaca only after respondent's Atty. Cabatuando pressed the former to
identify petitioner Cabling as co-conspirator"; that with the hearing reset to January
25, 1995, "Mr. Joseph Abaca finally gave exculpating statements to the board in
that he cleared petitioners from any participation or from being the owners of the
currencies, and at which hearing Mr. Joseph Abaca volunteered the information that
the real owner of said money was one who frequented his headquarters in
Hongkong to which information, the Disciplinary Board Chairman, Mr. Ismael Khan,"
opined "for the need for another hearing to go to the bottom of the incident"; that
from said statement, it appeared "that Mr. Joseph Abaca was the courier, and had
another mechanic in Manila who hid the currency at the plane's skybed for Abaca
to retrieve in Hongkong, which findings of how the money was found was previously
confirmed by Mr. Joseph Abaca himself when he was first investigated by the
Hongkong authorities"; that just as petitioners "thought that they were already fully
cleared of the charges, as they no longer received any summons/notices on the
intended "additional hearings" mandated by the Disciplinary Board," they were
surprised to receive "on February 23, 1995. . . a Memorandum dated February 22,
1995" terminating their services for alleged violation of respondent's Code of
Discipline "effective immediately"; that sometime . . . first week of March, 1995,
petitioner Pineda received another Memorandum from respondent Mr. Juan
Paraiso, advising him of his termination effective February 3, 1995, likewise for
violation of respondent's Code of Discipline; . . .
In support of the issuance of the writ of temporary injunction, the NLRC adapted the
view that: (1) private respondents cannot be validly dismissed on the strength of
petitioner's Code of Discipline which was declared illegal by this Court in the ease
at PAL, Inc. vs. NLRC, (G.R. No. 85985), promulgated August 13, 1993, for the reason
that it was formulated by the petitioner without the participation of its employees as
required in R.A. 6715, amending Article 211 of the Labor Code; (2) the whimsical,
baseless and premature dismissals of private respondents which "caused them grave
and irreparable injury" is enjoinable as private respondents are left "with no speedy and
adequate remedy at law" except the issuance of a temporary mandatory injunction; (3)
the NLRC is empowered under Article 218 (e) of the Labor Code not only to restrain
any actual or threatened commission of any or all prohibited or unlawful acts but also
to require the performance of a particular act in any labor dispute, which, if not
restrained or performed forthwith, may cause grave or irreparable damage to any party;
and (4) the temporary power of the NLRC was recognized by this Court in the case
of Chemo-Technische Mfg., Inc. Employees Union, DFA, et. al. vs. Chemo-Technische
Mfg., Inc. [G.R. No. 107031, January 25, 1993].
On May 4, 1995, petitioner moved for reconsideration3 arguing that the NLRC erred:
1. . . . in granting a temporary injunction order when it has no jurisdiction to issue
an injunction or restraining order since this may be issued only under Article 218 of
the Labor Code if the case involves or arises from labor disputes;
2. . . . in granting a temporary injunction order when the termination of private
respondents have long been carried out;
3. . . . in ordering the reinstatement of private respondents on the basis of their mere
allegations, in violation of PAL's right to due process:
4. . . . in arrogating unto itself management prerogative to discipline its employees
and divesting the labor arbiter of its original and exclusive jurisdiction over illegal
dismissal cases;
5. . . . in suspending the effects of termination when such action is exclusively within
the jurisdiction of the Secretary of Labor;
6. . . . in issuing the temporary injunction in the absence of any irreparable or
substantial injury to both private respondents.
On May 31, 1995, the NLRC denied petitioner's motion for reconsideration, ruling:
"The respondent (now petitioner), for one, cannot validly claim that we cannot
exercise our injunctive power under Article 218 (e) of the Labor Code on the pretext
that what we have here is not a labor dispute as long as it concedes that as defined
by law, a" (l) "Labor Dispute" includes any controversy or matter concerning terms
or conditions of employment." If security of tenure, which has been breached by
respondent and which, precisely, is sought to be protected by our temporary
mandatory injunction (the core of controversy in this case) is not a "term or condition
of employment", what then is?
xxx xxx xxx
Anent respondent's second argument . . . . Article 218 (e) of the Labor Code . . .
empowered the Commission not only to issue a prohibitory injunction, but a
mandatory ("to require the performance") one as well. Besides, as earlier
discussed, we already exercised (on August 23, 1991) this temporary mandatory
injunctive power in the case of "Chemo-Technische Mfg., Inc. Employees Union-
DFA et. al. vs. Chemo-Technische Mfg., Inc., et. al." (supra) and effectively enjoined
one (1) month old dismissals by Chemo-Technische and that our aforesaid
mandatory exercise of injunctive power, when questioned through a petition
for certiorari, was sustained by the Third Division of the Supreme court per its
Resolution dated January 25, 1993.
xxx xxx xxx
 Respondent's fourth argument that petitioner's remedy for their dismissals is "to file
an illegal dismissal case against PAL which cases are within the original and
exclusive jurisdiction of the Labor Arbiter' is ignorant. In requiring as a condition for
the issuance of a "temporary or permanent injunction" — "(4) That complainant has
no adequate remedy at law;" Article 218 (e) of the Labor Code clearly
envisioned adequacy, and not plain availability of a remedy at law as an alternative
bar to the issuance of an injunction. An illegal dismissal suit (which takes, on its
expeditious side, three (3) years before it can be disposed of) while available as a
remedy under Article 217 (a) of the Labor Code, is certainly not an "adequate;
remedy at law, Ergo, it cannot as an alternative remedy, bar our exercise of that
injunctive power given us by Article 218 (e) of the Code.
xxx xxx xxx
Thus, Article 218 (e), as earlier discussed [which empowers this Commission "to
require the performance of a particular act" (such as our requiring respondent "to
cease and desist from enforcing" its whimsical memoranda of dismissals and
"instead to reinstate petitioners to their respective position held prior to their subject
dismissals") in "any labor dispute which, if not . . . performed forthwith, may cause
grave and irreparable damage to any party"] stands as the sole "adequate remedy
at law" for petitioners here.
Finally, the respondent, in its sixth argument claims that even if its acts of dismissing
petitioners "may be great, still the same is capable of compensation", and that
consequently, "injunction need not be issued where adequate compensation at law
could be obtained". Actually, what respondent PAL argues here is that we need not
interfere in its whimsical dismissals of petitioners as, after all, it can pay the latter
its backwages. . . .
But just the same, we have to stress that Article 279 does not speak alone of
backwages as an obtainable relief for illegal dismissal; that reinstatement as well is
the concern of said law, enforceable when necessary, through Article 218 (e) of the
Labor Code (without need of an illegal dismissal suit under Article 217 (a) of the
Code) if such whimsical and capricious act of illegal dismissal will "cause grave or
irreparable injury to a party". . . . .4
Hence, the present recourse.
Generally, injunction is a preservative remedy for the protection of one's substantive
rights or interest. It is not a cause of action in itself but merely a provisional remedy, an
adjunct to a main suit. It is resorted to only when there is a pressing necessity to avoid
injurious consequences which cannot be remedied under any standard of
compensation. The application of the injunctive writ rests upon the existence of an
emergency or of a special reason before the main case be regularly heard. The
essential conditions for granting such temporary injunctive relief are that the complaint
alleges facts which appear to be sufficient to constitute a proper basis for injunction and
that on the entire showing from the contending parties, the injunction is reasonably
necessary to protect the legal rights of the plaintiff pending the litigation.5 Injunction is
also a special equitable relief granted only in cases where there is no plain, adequate
and complete remedy at law.6
In labor cases, Article 218 of the Labor Code empowers the NLRC —
(e) To enjoin or restrain any actual or threatened commission of any or all prohibited
or unlawful acts or to require the performance of a particular act in any labor
dispute which, if not restrained or performed forthwith, may cause grave or
irreparable damage to any party or render ineffectual any decision in favor of such
party; . . ." (Emphasis Ours)
Complementing the above-quoted provision, Sec. 1, Rule XI of the New Rules of
Procedure of the NLRC, pertinently provides as follows:
Sec. 1. Injunction in Ordinary Labor Dispute. — A preliminary injunction or a
restraining order may be granted by the Commission through its divisions pursuant
to the provisions of paragraph (e) of Article 218 of the LC, as amended, when it is
established on the bases of the sworn allegations in the petition that the acts
complained of, involving or arising from any labor dispute before the Commission,
which, if not restrained or performed forthwith, may cause grave or irreparable
damage to any party or render ineffectual any decision in favor of such party.
xxx xxx xxx
The foregoing ancillary power may be exercised by the Labor Arbiters only as an
incident to the cases pending before them in order to preserve the rights of the
parties during the pendency of the case, but excluding labor disputes involving
strikes or lockout. 7 (Emphasis Ours)
From the foregoing provisions of law, the power of the NLRC to issue an injunctive writ
originates from "any labor dispute" upon application by a party thereof, which
application if not granted "may cause grave or irreparable damage to any party or
render ineffectual any decision in favor of such party."
The term "labor dispute" is defined as "any controversy or matter concerning terms and
conditions of employment or the association or representation of persons in negotiating,
fixing. maintaining, changing, or arranging the terms and conditions of employment
regardless of whether or not the disputants stand in the proximate relation of employers
and employees." 8
The term "controversy" is likewise defined as "a litigated question; adversary
proceeding in a court of law; a civil action or suit, either at law or in equity; a justiciable
dispute."9
A "justiciable controversy" is "one involving an active antagonistic assertion of a legal
right on one side and a denial thereof on the other concerning a real, and not a mere
theoretical question or issue." 10
Taking into account the foregoing definitions, it is an essential requirement that there
must first be a labor dispute between the contending parties before the labor arbiter. In
the present case, there is no labor dispute between the petitioner and private
respondents as there has yet been no complaint for illegal dismissal filed with the labor
arbiter by the private respondents against the petitioner.
The petition for injunction directly filed before the NLRC is in reality an action for illegal
dismissal. This is clear from the allegations in the petition which prays for; reinstatement
of private respondents; award of full backwages, moral and exemplary damages; and
attorney's fees. As such, the petition should have been filed with the labor arbiter who
has the original and exclusive jurisdiction to hear and decide the following cases
involving all workers, whether agricultural or non-agricultural:
(1) Unfair labor practice;
(2) Termination disputes;
(3) If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;
(4) Claims for actual, moral, exemplary and other forms of damages arising from
the employer-employee relations;
(5) Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts; and
(6) Except claims for employees compensation, social security, medicare and
maternity benefits, all other claims arising from er-ee relations, including those of
persons in domestic or household service, involving an amount exceeding
P5,000.00, whether or not accompanied with a claim for reinstatement. 11
The jurisdiction conferred by the foregoing legal provision to the labor arbiter is
both original and exclusive, meaning, no other officer or tribunal can take cognizance
of, hear and decide any of the cases therein enumerated. The only exceptions are
where the Secretary of Labor and Employment or the NLRC exercises the power of
compulsory arbitration, or the parties agree to submit the matter to voluntary arbitration
pursuant to Article 263 (g) of the Labor Code, the pertinent portions of which reads:
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a
strike or lockout in an industry indispensable to the national interest, the Secretary
of Labor and Employment may assume jurisdiction over the dispute and decide it
or certify the same to the Commission for compulsory arbitration. Such assumption
or certification shall have the effect of automatically enjoining the intended or
impending strike or lockout as specified in the assumption or certification order. If
one has already taken place at the time of assumption or certification, all striking or
locked out employees shall immediately resume operations and readmit all workers
under the same terms and conditions prevailing before the strike or lockout. The
Secretary of Labor and Employment or the Commission may seek the assistance
of law enforcement agencies to ensure compliance with this provision as well as
with such orders as he may issue to enforce the same.
On the other hand, the NLRC shall have exclusive appellate jurisdiction over all cases
decided by labor arbiters as provided in Article 217(b) of the Labor Code. In short, the
jurisdiction of the NLRC in illegal dismissal cases is appellate in nature and, therefore,
it cannot entertain the private respondents' petition for injunction which challenges the
dismissal orders of petitioner. Article 218(e) of the Labor Code does not provide blanket
authority to the NLRC or any of its divisions to issue writs of injunction, considering that
Section 1 of Rule XI of the New Rules of Procedure of the NLRC makes injunction only
an ancillary remedy in ordinary labor disputes." 12
Thus, the NLRC exceeded its jurisdiction when it issued the assailed Order granting
private respondents' petition for injunction and ordering the petitioner to reinstate
private respondents.
The argument of the NLRC in its assailed Order that to file an illegal dismissal suit with
the labor arbiter is not an "adequate" remedy since it takes three (3) years before it can
be disposed of, is patently erroneous. An "adequate" remedy at law has been defined
as one "that affords relief with reference to the matter in controversy, and which is
appropriate to the particular circumstances of the case." 13 It is a remedy which is
equally, beneficial, speedy and sufficient which will promptly relieve the petitioner from
the injurious effects of the acts complained of. 14
Under the Labor Code, the ordinary and proper recourse of an illegally dismissed
employee is to file a complaint for illegal dismissal with the labor arbiter. 15 In the case
at bar, private respondents disregarded this rule and directly went to the NLRC through
a petition for injunction praying that petitioner be enjoined from enforcing its dismissal
orders. In Lamb vs. Phipps, 16 we ruled that if the remedy is specifically provided by
law, it is presumed to be adequate. Moreover, the preliminary mandatory injunction
prayed for by the private respondents in their petition before the NLRC can also be
entertained by the labor arbiter who, as shown earlier, has the ancillary power to issue
preliminary injunctions or restraining orders as an incident in the cases pending before
him in order to preserve the rights of the parties during the pendency of the case. 17
Furthermore, an examination of private respondents' petition for injunction reveals that
it has no basis since there is no showing of any urgency or irreparable injury which the
private respondents might suffer. An injury is considered irreparable if it is of such
constant and frequent recurrence that no fair and reasonable redress can be had
therefor in a court of law, 18 or where there is no standard by which their amount can
be measured with reasonable accuracy, that is, it is not susceptible of mathematical
computation. It is considered irreparable injury when it cannot be adequately
compensated in damages due to the nature of the injury itself or the nature of the right
or property injured or when there exists no certain pecuniary standard for the
measurement of damages. 19
In the case at bar, the alleged injury which private respondents stand to suffer by reason
of their alleged illegal dismissal can be adequately compensated and therefore, there
exists no "irreparable injury," as defined above which would necessitate the issuance
of the injunction sought for. Art. 279 of the Labor Code provides that an employee who
is unjustly dismissed from employment shall be entitled to reinstatement, without loss
of seniority rights and other privileges, and to the payment of full backwages, inclusive
of allowances, and to other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement.
The ruling of the NLRC that the Supreme Court upheld its power to issue temporary
mandatory injunction orders in the case of Chemo-Technische Mfg., Inc. Employees
Union-DFA, et. al. vs. Chemo-Technische Mfg., Inc. et. al., docketed as G.R. No.
107031, is misleading. As correctly argued by the petitioner, no such pronouncement
was made by this Court in said case. On January 25, 1993, we issued a Minute
Resolution in the subject case stating as follows:
Considering the allegations contained, the issues raised and the arguments adduced
in the petition for certiorari, as well as the comments of both public and private
respondents thereon, and the reply of the petitioners to private respondent's motion
to dismiss the petition, the Court Resolved to DENY the same for being premature.
It is clear from the above resolution that we did not in anyway sustain the action of the
NLRC in issuing such temporary mandatory injunction but rather we dismissed the
petition as the NLRC had yet to rule upon the motion for reconsideration filed by
petitioner. Thus, the minute resolution denying the petition for being prematurely filed.
Finally, an injunction, as an extraordinary remedy, is not favored in labor law
considering that it generally has not proved to be an effective means of settling labor
disputes. 20 It has been the policy of the State to encourage the parties to use the non-
judicial process of negotiation and compromise, mediation and arbitration. 21 Thus,
injunctions may be issued only in cases of extreme necessity based on legal grounds
clearly established, after due consultations or hearing & when all efforts at conciliation
are exhausted which factors, however, are clearly absent in the present case.
WHEREFORE, the petition is hereby GRANTED. The assailed Orders dated April 3,
1995 and May 31, 1995, issued by the NLRC (First Division), in NLRC NCR IC No.
000563-95, are hereby REVERSED and SET ASIDE. SO ORDERED.
Footnotes
5 Del Rosario vs. Court of Appeals, 255 SCRA 152 [1996]
6 Devesa vs. Arbes, 13 Phil. 273 [1909]; Gilchrist vs. Cuddy, et. al., 29 Phil. 542 [1915]
7 See also Pondoc vs. National Labor Relations Commission, 262 SCRA 632, 638 [1996].
8 Article 212(1), Labor Code of the Philippines.
9 Federico B. Moreno, Philippine Law Dictionary, 1982 edition, p. 136.
10 Delumen vs. Republic, 94 Phil. 288, cited in Moreno, supra, p. 336.
11 Article 217 (a), Labor Code of the Philippines.
12 Pondoc vs. NLRC, supra.
13 Mt. Vermon vs. Borman, 100 Ohio St., 2, 75, 125 NE 116 [1919].
14 See Silvestre vs. Torres, 57 Phil. 885.
15 Article 217 (a) Labor Code of the Philippines.
16 22 Phil., 465.
17 Section 1, Rule XI of the New Rules of Procedure of the NLRC. See also Pondoc vs.
NLRC, supra.
18 Allundorff vs. Abrahanson, 38 Phil. 58 cited in Phil. Virginia Tobacco Administration vs. De los
Angeles, 164 SCRA 555 [1988].
THIRD DIVISION
G.R. No. 174084 August 25, 2010
SPIC N' SPAN SERVICES CORPORATION, Petitioner, vs. GLORIA PAJE, LOLITA
GOMEZ, MIRIAM CATACUTAN, ESTRELLA ZAPATA, GLORIA SUMANG, JULIET
DINGAL, MYRA AMANTE, and FE S. BERNANDO, Respondents.
Labor Law; Procedural Rules and Technicalities; Verification; The lack of a
verification in a pleading is only a formal defect, not a jurisdictional defect, and is not
necessarily fatal to a case.—In Torres v. Specialized Packaging Development
Corporation, 433 SCRA 455 (2004), where only two of the 25 real parties-in-interest
signed the verification, the verification by the two could be sufficient assurance that the
allegations in the petition were made in good faith, are true and correct, and are not
speculative. The lack of a verification in a pleading is only a formal defect, not a
jurisdictional defect, and is not necessarily fatal to a case. The primary reason for
requiring a verification is simply to ensure that the allegations in the pleading are done
in good faith, are true and correct, and are not mere speculations.
Same; Same; In the hierarchy observed in the dispensation of justice, rules of
procedure can be disregarded in order to serve the ends of justice.—In the hierarchy
observed in the dispensation of justice, rules of procedure can be disregarded in order
to serve the ends of justice. This was explained by Justice Bernardo P. Pardo,
in Aguam v. Court of Appeals, 332 SCRA 784 (2000), when he said—Litigations must
be decided on their merits and not on technicality. Every party litigant must be afforded
the amplest opportunity for the proper and just determination of his cause, free from
the unacceptable plea of technicalities. Thus, dismissal of appeals purely on technical
grounds is frowned upon where the policy of the court is to encourage hearings of
appeals on their merits and the rules of procedure ought not to be applied in a very
rigid, technical sense; rules of procedure are used only to help secure, not override
substantial justice. It is a far better and more prudent course of action for the court to
excuse a technical lapse and afford the parties a review of the case on appeal to attain
the ends of justice rather than dispose of the case on technicality and cause a grave
injustice to the parties, giving a false impression of speedy disposal of cases while
actually resulting in more delay, if not a miscarriage of justice.
Same; Same; Security of Tenure; Certain labor rights assume preferred positions
in our legal hierarchy; Under fundamental guidelines set out in the Constitution and the
Labor Code, workers’ right to security of tenure is a preferred constitutional right that
technical infirmities in labor pleadings cannot defeat.—We should remember, too, that
certain labor rights assume preferred positions in our legal hierarchy. Under the
Constitution and the Labor Code, the State is bound to protect labor and assure the
rights of workers to security of tenure. Article 4 of the Labor Code provides that all
doubts in the implementation and interpretation of its provisions (including its
implementing rules and regulations) shall be resolved in favor of labor. The
Constitution, on the other hand, characterizes labor as a primary social economic force.
The State is bound to “protect the rights of workers and promote their welfare,” and the
workers are “entitled to security of tenure, humane conditions of work, and a living
wage.” Under these fundamental guidelines, respondents’ right to security of tenure is
a preferred constitutional right that technical infirmities in labor pleadings cannot defeat.
Same; Illegal Dismissals; Upon proof of termination of employment, the employer
has the burden of proof that the dismissal was valid—absent this proof, the termination
from employment is deemed illegal, as alleged by the dismissed employees.—Nothing
on record indicates the reason for the respondents’ termination from
employment, although the fact of termination was never disputed. Swift denied
liability on the basis of its contract with Spic N’ Span Services Corporation (SNS). The
contract was not presented before the Labor Arbiter, although Swift averred that under
the contract, SNS would supply promo girls, merchandisers and other promotional
personnel to handle all promotional aspects and merchandising strategy of Swift. We
can assume, for lack of proof to the contrary, that the respondents’ termination from
employment was illegal since neither SNS nor Swift, as employers, presented any proof
that their termination from employment was legal. Upon proof of termination of
employment, the employer has the burden of proof that the dismissal was valid; absent
this proof, the termination from employment is deemed illegal, as alleged by the
dismissed employees.
Same; Job-Contracting; Labor-Only Contracting; Words and Phrases; In
permissible job contracting, the principal agrees to put out or farm out with a contractor
or subcontractor the performance or completion of a specific job, work or service within
a definite or predetermined period, regardless of whether such job, work or service is
to be performed or completed within or outside the premises of the principal.—In order
that a labor relationship can be categorized as legitimate/permissible job contracting or
as prohibited labor-only contracting, the totality of the facts and the surrounding
circumstances of the relationship ought to be considered. Every case is unique and has
to be assessed on the basis of its facts and of the features of the relationship in
question. In permissible job contracting, the principal agrees to put out or farm out with
a contractor or subcontractor the performance or completion of a specific job, work or
service within a definite or predetermined period, regardless of whether such job, work
or service is to be performed or completed within or outside the premises of the
principal. The test is whether the independent contractor has contracted to do the work
according to his own methods and without being subject to the principal’s control except
only as to the results, he has substantial capital, and he has assured the contractual
employees entitlement to all labor and occupational safety and health standards, free
exercise of the right to self-organization, security of tenure, and social and welfare
benefits. PETITION for review on certiorari of the decision and resolution of the CA.
DECISION
BRION, J.:
Before the Court is the petition for review on certiorari1 filed by Spic N’ Span Services
Corporation (SNS) to seek the reversal of the October 25, 2004 Decision2 and the
August 2, 2006 Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 83215,
entitled "Gloria Paje, Lolita Gomez, Miriam Catacutan, Estrella Zapata, Gloria Sumang,
Juliet Dingal, Myra Amante and Fe S. Bernardo v. National Labor Relations
Commission, Spic N Span Service Corporation and Swift Foods, Inc."
Background Facts
Swift Foods, Inc. (Swift) is a subsidiary of RFM Corporation that manufactures and
processes meat products and other food products. SNS’s business is to supply
manpower services to its clients for a fee. Swift and SNS have a contract to promote
Swift products.
Inocencio Fernandez, Edelisa F. David, Thelma Guardian, Juliet C. Dingal, Fe S.
Bernardo, Lolita Gomez, Myra Amante, Miriam S. Catacutan, Gloria O. Sumang, Gloria
O. Paje, and Estrella Zapata (complainants) worked as Deli/Promo Girls of Swift
products in various supermarkets in Tarlac and Pampanga. They were all dismissed
from their employment on February 28, 1998. They filed two complaints for illegal
dismissal against SNS and Swift before the National Labor Relations Commission
(NLRC) Regional Arbitration Branch III, San Fernando, Pampanga, docketed as Case
Nos. 03-9131-98 and 07-9295-98. These cases were subsequently consolidated.
After two unsuccessful conciliation hearings, the Labor Arbiter ordered the parties to
submit their position papers. Swift filed its position paper; SNS did not.4 The
complainants’ position papers were signed by Florencio P. Peralta who was not a
lawyer and who claimed to be the complainants’ representative, although he never
showed any proof of his authority to represent them.
In their position papers, the complainants alleged that they were employees of Swift
and SNS, and their services were terminated without cause and without due process.
The termination came on the day they received their notices; thus, they were denied
the procedural due process requirements of notice and hearing prior to their termination
of employment.5 Swift, in its position paper, moved to dismiss the complaints on the
ground that it entered into an independent labor contract with SNS for the promotion of
its products; it alleged that the complainants were the employees of SNS, not of Swift.6
The Labor Arbiter7 found SNS to be the agent of Swift, and ordered SNS and Swift to
jointly and severally pay Edelisa David ₱115,637.50 and Inocencio Fernandez
₱192,197.50, representing their retirement pay and service incentive leave pay. He
dismissed, without prejudice, the claims of the other complainants because they failed
to verify their position paper. He also denied all other claims for lack of factual basis.8
Both Swift and the complainants appealed to the NLRC. Swift filed a memorandum of
appeal, while the complainants filed a partial memorandum of appeal.9
10
The NLRC denied the complainants’ appeal for lack of merit. It dismissed the
complaint against Swift, and ordered SNS to pay Edelisa David a total of ₱256,620.13,
and Inocencio Fernandez a total of ₱280,912.63, representing backwages, separation
pay, and service incentive leave pay. It dismissed all other claims for lack of merit.
Thereafter, Edelisa David and Inocencio Fernandez agreed to a settlement, and their
cases were thus closed.11
The complainants whose claims were dismissed, namely, Gloria Paje, Lolita Gomez,
Miriam Catacutan, Estrella Zapata, Gloria Sumang, Juliet Dingal, Myra Amante, and Fe
S. Bernardo (respondents), moved for the reconsideration of the NLRC’s ruling. This
time, they were represented by the Public Attorney’s Office. The NLRC denied their
motion.12
The respondents then sought relief with the CA through a petition for certiorari, based
on the alleged grave abuse of discretion committed by the NLRC. The CA found the
petition meritorious, in its assailed decision of October 25, 2004, and ruled that the
respondents’ failure to sign the verification in their position paper was a formal defect
that was not fatal to their case. It concluded that SNS was merely an agent of Swift;
thus, the latter should not be exempt from liability. It ordered the remand of the case to
the Labor Arbiter for the computation of the respondents’ backwages, separation pay,
and service incentive leave pay. SNS and Swift filed their motions for reconsideration
which the CA denied.
SNS is now before us on a petition for review on certiorari, and submits the following –
I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED
SERIOUS ERROR WHEN IT RULED THAT THE NLRC COMMITTED GRAVE
ABUSE OF DISCRETION IN DISMISSING THE CLAIMS OF HEREIN
RESPONDENTS "ON THE GROUND OF NON-SIGNING OF THE POSITION
PAPER."
II. WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED
SERIOUS ERROR IN HOLDING THAT ALTHOUGH THE RESPONDENTS WERE
NOT REPRESENTED BY A LAWYER BUT BY ONE WHO IS NOT A MEMBER OF
THE BAR, SAID FACT IS "SUFFICIENT JUSTIFICATION FOR THE
PETITIONERS’ FAILURE TO COMPLY WITH THE REQUIREMENTS OF LAW."
III. WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED
SERIOUS ERROR IN "REMANDING THE CASE TO THE LABOR ARBITER FOR
THE COMPUTATION OF THE MONEY CLAIMS OF THE RESPONDENTS, TO
WIT: 1) BACKWAGES, 2) SEPARATION PAY, AND 3) SERVICE INCENTIVE
LEAVE," DESPITE THE FACT THAT NOWHERE IN THE DECISIONS OF THE
LABOR ARBITER, THE NATIONAL LABOR RELATIONS COMMISSION, AND
COURT OF APPEALS IS IT STATED THAT HEREIN RESPONDENTS WERE
ILLEGALLY DISMISSED."13
The Court’s Ruling
We find the petition unmeritorious.
SNS submits that since respondents did not sign the verification in their position paper,
the CA erred when it ruled that the NLRC committed grave abuse of discretion in
dismissing the respondents’ complaints. SNS stressed the importance of a signature in
a pleading, and harped on the respondents’ failure to sign their position paper. 14 This,
to SNS, is fatal to the respondents’ case.
We do not agree with SNS.
As we previously explained in Torres v. Specialized Packaging Development
Corporation,15 where only two of the 25 real parties-in-interest signed the verification,
the verification by the two could be sufficient assurance that the allegations in the
petition were made in good faith, are true and correct, and are not speculative. The lack
of a verification in a pleading is only a formal defect, not a jurisdictional defect, and is
not necessarily fatal to a case.16The primary reason for requiring a verification is simply
to ensure that the allegations in the pleading are done in good faith, are true and correct,
and are not mere speculations.17
The CA, in its assailed decision, cited Philippine Telegraph and Telephone Corporation
v. NLRC18 to emphasize that in labor cases, the deciding authority should use every
reasonable means to speedily and objectively ascertain the facts, without regard to
technicalities of law and procedure. Technical rules of evidence are not strictly binding
in labor cases.19
In the hierarchy observed in the dispensation of justice, rules of procedure can be
disregarded in order to serve the ends of justice. This was explained by Justice
Bernando P. Pardo, in Aguam v. Court of Appeals,20 when he said –
Litigations must be decided on their merits and not on technicality. Every party litigant
must be afforded the amplest opportunity for the proper and just determination of his
cause, free from the unacceptable plea of technicalities. Thus, dismissal of appeals
purely on technical grounds is frowned upon where the policy of the court is to
encourage hearings of appeals on their merits and the rules of procedure ought not to
be applied in a very rigid, technical sense; rules of procedure are used only to help
secure, not override substantial justice. It is a far better and more prudent course of
action for the court to excuse a technical lapse and afford the parties a review of the
case on appeal to attain the ends of justice rather than dispose of the case on
technicality and cause a grave injustice to the parties, giving a false impression of
speedy disposal of cases while actually resulting in more delay, if not a miscarriage of
justice.21
We should remember, too, that certain labor rights assume preferred positions in our
legal hierarchy. Under the Constitution and the Labor Code, the State is bound to
protect labor and assure the rights of workers to security of tenure.22 Article 4 of the
Labor Code provides that all doubts in the implementation and interpretation of its
provisions (including its implementing rules and regulations) shall be resolved in favor
of labor. The Constitution, on the other hand, characterizes labor as a primary social
economic force. The State is bound to "protect the rights of workers and promote their
welfare,"23 and the workers are "entitled to security of tenure, humane conditions of
work, and a living wage."24 Under these fundamental guidelines, respondents’ right to
security of tenure is a preferred constitutional right that technical infirmities in labor
pleadings cannot defeat.
1. SNS submits that the CA committed a serious error in ruling that the respondents’
representative’s non-membership in the bar is sufficient justification for their failure to
comply with the requirements of the law. SNS argues that this ruling excuses the
employment of a non-lawyer and places the acts of the latter on the same level as those
of a member of the Bar.25 Our Labor Code allows a non-lawyer to represent a party
before the Labor Arbiter and the Commission,26 but provides limitations: Non-lawyers
may appear before the Commission or any Labor Arbiter only: (1) If they represent
themselves; or (2) If they represent their organization or members thereof.27Thus, SNS
concludes that the respondents’ representative had no personality to appear before the
Labor Arbiter or the NLRC, and his representation for the respondents should produce
no legal effect.
Our approach to these arguments is simple as the problem boils down to a balance
between a technical rule and protected constitutional interests. The cited technical
infirmity cannot defeat the respondents’ preferred right to security of tenure which has
primacy over technical requirements. Thus, we affirm the CA’s ruling on this point,
without prejudice to whatever action may be taken against the representative, if he had
indeed been engaged in the unauthorized practice of law.
2. SNS also claims serious error on the part of the CA in remanding the case to the
Labor Arbiter, for computation of the respondents’ backwages, separation pay and
service incentive leave pay despite the fact that nowhere in the decisions of the Labor
Arbiter, the NLRC, and CA was there any finding that respondents had been illegally
dismissed.
We find this to be the first argument of its kind from SNS, and, in fact, is the first ever
submission from SNS before it filed a motion for reconsideration with the CA. To recall,
SNS did not file its position paper before the labor arbiter, nor did it file its appeal before
the NLRC; only Swift and the complainants did.28 It was only Swift, too, that filed its
comment to the herein respondents’ petition for certiorari.29
The records do not show if SNS filed its memorandum before the CA, although SNS
filed a motion for reconsideration of the CA decision. It then claimed that the CA erred
in ruling that the NLRC committed grave abuse of discretion when it dismissed
respondents’ claim; that a petition for certiorari under Rule 65 of the Rules of Court is
not the proper remedy to correct the NLRC’s alleged grave abuse of discretion; and
that the respondents were bound by the mistakes of their non-lawyer
representative.30 Significantly, SNS did not raise the question of the CA’s failure to state
that the respondents had been illegally dismissed. At this point, it is too late for SNS to
raise the issue.
Nothing on record indicates the reason for the respondents’ termination from
employment, although the fact of termination was never disputed. Swift denied liability
on the basis of its contract with SNS. The contract was not presented before the Labor
Arbiter, although Swift averred that under the contract, SNS would supply promo girls,
merchandisers and other promotional personnel to handle all promotional aspects and
merchandising strategy of Swift.31 We can assume, for lack of proof to the contrary, that
the respondents’ termination from employment was illegal since neither SNS nor Swift,
as employers, presented any proof that their termination from employment was legal.
Upon proof of termination of employment, the employer has the burden of proof that
the dismissal was valid; absent this proof, the termination from employment is deemed
illegal, as alleged by the dismissed employees.
3. In order that a labor relationship can be categorized as legitimate/permissible job
contracting or as prohibited labor-only contracting, the totality of the facts and the
surrounding circumstances of the relationship ought to be considered.32 Every case is
unique and has to be assessed on the basis of its facts and of the features of the
relationship in question. In permissible job contracting, the principal agrees to put out
or farm out with a contractor or subcontractor the performance or completion of a
specific job, work or service within a definite or predetermined period, regardless of
whether such job, work or service is to be performed or completed within or outside the
premises of the principal. The test is whether the independent contractor has contracted
to do the work according to his own methods and without being subject to the principal’s
control except only as to the results, he has substantial capital, and he has assured the
contractual employees entitlement to all labor and occupational safety and health
standards, free exercise of the right to self-organization, security of tenure, and social
and welfare benefits.33
The CA found SNS to be Swift’s agent, and explained its ruling as follows34 –
To be legitimate, contracting or subcontracting must satisfy the following requirements:
1) The contractor or subcontractor carries on a distinct and independent business and
undertakes to perform the job, work or service on its own account and under its own
responsibility, according to its own manners and methods, and free from the control
and direction of the principal in all matters connected with the performance of the work
except as to the results thereof; 2) the contractor or subcontractor has substantial
capital or investment; and 3) the agreement between the principal and contractor or
subcontractor assures the contractual employees’ entitlement to all labor and
occupational safety and health standards, free exercise of right to self-organization,
security of tenure, and social and welfare benefit (Vinoya v. NLRC, 324 SCRA 469).
The parties failed to attach a copy of the agreement entered into between SNS and
Swift.1âwphi1 Neither did they attach a copy of the financial statement of SNS. Thus,
we are constrained to rule on the issue involved on the basis of the findings of both the
Labor Arbiter and the NLRC.
The Labor Arbiter, in finding that SNS was merely a labor-only contractor, cited the
following reasons: First, the agreement between SNS and Swift shows that the latter
exercised control over the promo girls and/or merchandisers through the services of
coordinators. Second, it cannot be said that SNS has substantial capital. Third, the
duties of the petitioners were directly related, necessary and vital to the day-to-day
operations of Swift. Lastly, the uniform and identification cards used by the petitioners
were subject to the approval of Swift.
The NLRC, on the other hand, in finding that SNS is an independent contractor gave
the following reasons: First, there is no evidence that Swift exercised the power of
control over the petitioners. Rather, it is SNS who exercised direct control and
 9
supervision over the nature and performance of the works of herein petitioners. Second, Id. at 118.
10
by law, Swift and SNS have distinct and separate juridical personality from each other. Resolution of January 11, 2002.
11
Rollo, pp. 29-31.
The decision of the NLRC is bereft of explanation as to the existence of circumstances 12
Id. at 119.
that would make SNS an independent contractor as would exempt the "principal" from 13
Id. at 8.
liabilities to the employees. 14
Id. at 44-50.
Nowhere in the decision of both the Labor Arbiter and the NLRC shows that SNS had 15
G.R. No. 149634, July 6, 2004, 433 SCRA 455.
full control of the means and methods of the performance of their work. Moreover, as 16
Ballao v. Court of Appeals, G.R. No. 162342, October 11, 2006, 504 SCRA 227.
found by the Labor Arbiter, there was no evidence that SNS has substantial capital or 17
Robern Development Corporation v. Judge Quitain, 373 Phil. 773 (1999), citing
investment. Lastly, there was no finding by the Labor Arbiter nor the NLRC that the several cases.
agreement between the principal (Swift) and contractor (SNS) assures the contractual 18
G.R. No. 80600, March 21, 1990, 183 SCRA 451.
employees’ entitlement to all labor and occupational safety and health standards, free 19
Labor Code, Article 221. Technical rules not binding and prior resort to amicable
exercise of right to self-organization, security of tenure, and social and welfare benefit. settlement. - In any proceeding before the Commission or any of the Labor Arbiters,
In view of the foregoing, we conclude that the requisites above-mentioned are not the rules of evidence prevailing in courts of law or equity shall not be controlling, and it
obtaining in the present case.1âwphi1Hence, SNS is considered merely an agent of is the spirit and intention of this Code that the Commission and its members and the
Swift which does not exempt the latter from liability. Labor Arbiters shall use every and all reasonable means to ascertain the facts in each
case speedily and objectively, without regard to technicalities of law or procedure, all
We note that the present decision does not affect the settlement entered into between in the interest of due process.
Edeliza David and Inocencio Fernandez, on the one hand and SNS, on the other. As 20
G.R. No. 137672, May 31, 2000, 332 SCRA 784.
held by the NLRC, their complaints are considered closed and terminated. 21
Id. at 789-790.
22
WHEREFORE, premises considered, the instant petition is hereby GRANTED. The Article 3, Labor Code.
23
Resolutions of the NLRC dated January 11, 2002 and December 23, 2003 are SET Article II, Section 18.
24
ASIDE in so far as the dismissal of the petitioners’ case is concerned and in so far as Article XIII, Section 3.
25
Swift is found not liable for the payment of the petitioners’ money claims. Rollo, p. 19.
26
Article 221. – x x x In any proceeding before the Commission or any Labor Arbiter,
The present case is hereby REMANDED to the Labor Arbiter for the computation of the the parties may be represented by legal counsel but it shall be the duty of the Chairman,
money claims of the petitioners, to wit: 1) Backwages; 2) Separation Pay; and 3) any Presiding Commissioner or Commissioner or any Labor Arbiter to exercise
Service Incentive Leave Pay. complete control of the proceedings at all stages.
27
The settlement of the claims of David and Fernandez is not affected by this decision. Article 222.
28
Rollo, p. 118.
We fully agree with this ruling. What we have before us, therefore, is a case of illegal 29
Id. at 120.
dismissal perpetrated by a principal and its illegal contractor-agent. Thus, we affirm the 30
Ibid.
ruling of the CA with the modification that the respondents are also entitled to nominal 31
Id. at 122-123.
damages, for violation of their due process rights to notice and hearing, pursuant to our 32
Sasan, Sr. v. National Labor Relations Commission, G.R. No. 176240, October 17,
ruling in Agabon v. NLRC.35 We peg this amount at ₱30,000.00 for each of the 2008, 569 SCRA 670.
respondents. 33
Section 4(d), Rule VIII-A, Book III of the Omnibus Rules Implementing the Labor
WHEREFORE, premises considered, we hereby AFFIRM the Court of Appeals’ Code.
34
October 25, 2004 Decision and August 2, 2006 Resolution in CA-G.R. SP No. 83215, Rollo, pp. 36-37.
35
with the modification that nominal damages in the amount of ₱30,000.00 should 485 Phil. 248 (2004).
additionally be paid to each of the respondents, for violation of their procedural due
process rights. Costs against the petitioner. SO ORDERED.
Footnotes
1
Rollo, pp. 3-24.
2
Penned by Justice Juan Q. Enriquez, Jr., and concurred in by Justices Salvador J.
Valdez, Jr. and Vicente Q. Roxas; id. at 29-38.
3
Id. at 39-43.
4
Id. at 117.
5
Id. at 46.
6
Supra note 2, at 31-32.
7
Fedriel S. Panganiban.
8
Rollo, p. 117.
FIRST DIVISION
G.R. No. L-65173 October 27, 1986
HENRY CLYDE ABBOTT and PACIFICO ALUNAN, petitioners, vs. THE NATIONAL
LABOR RELATIONS COMMISSION, THE PRESIDENT AND VICE-PRESIDENT
TRAVELLERS LIFE ASSURANCE, AND THE REGIONAL ARBITRATION BRANCH
NO 10, NATIONAL LABOR RELATIONS COMMISSION CAGAYAN DE ORO
CITY, respondents.
Labor Law: Illegal Dismissal Execution; A judgment becomes final and executory
by operation of law; A prevailing party is entitled as a matter of right to a writ of
execution and its issuance is a ministerial duty compellable by mandamus.—In Sawit
vs. Rodas and Daquis vs. Bustos, we heid that a judgment becomes final and executory
by operation of law, not by judicial declaration. Accordingly, finality of judgment
becomes a fact upon the lapse of the reglementary period of appeal if no appeal is
perfected. In such a situation, the prevailing party is entitled as a matter of right to a
writ of execution; and issuance thereof is a ministerial duty; compellable by mandamus.
Same; Same; Same; While the decision has become final and executory and can
no longer be challenged, the manner of its execution can be reviewed by proper
appeal—In the instant case, however, what is sought to be reviewed is not the decision
itself but the manner of its execution. There is a big difference. While it is true that the
decision itself has become final and executory and so can no longer be challenged,
there is no question either that it must be enforced in accordance with its terms and
conditions. Any deviation therefrom can be the subject of a proper appeal.
Same; Same; Same; Same; NLRC, authorized to look into the correctness of the
execution of the decision and to consider supervening events that affect such
execution.—We hold therefore that the National Labor Relations Commission has the
authority to look into the correctness of the execution of the decision in this case and
to consider the supervening events that may affect such execution, like the possible
set-off of the petitioners’ advances or debts against their total claim, their
discontinuance from employment by abandonment or resignation and other relevant
developments. PETITION for certiorari, mandamus and prohibition to review the
decision of the National Labor Relations Commission.
CRUZ, J.:
The factual backdrop of this petition for certiorari mandamus, and prohibition is as
follows:
Petitioners Henry Clyde Abbott and Pacifica Alunan were both regular agency
managers of respondent Travellers Life Assurance of the Philippines, Inc. Without a
written clearance, their services were terminated effective August 16, 1977.1 They then
filed a complaint in the Department of Labor for illegal dismissal back salaries,
commissions and bonuses. 2 A decision was rendered by Labor Arbiter Ildefonso
Agbuya in their favor on August 27, 1978, granting a monetary award of P52,268.80 to
Abbott and P46,315.00 to Alunan and ordering their reinstatement. 3
Upon appeal to respondent Commission, the decision was affirmed on November 9,
198l.4 The motion for reconsideration filed by private respondent on January 26, 1982
was denied by the NLRC on March 24, 1982. 5
On May 25, 1982, after the lapse of eighty-six (86) days, petitioners filed a motion for
execution and recomputation of their money claims. This was opposed on June 26,
1982, private respondent intimating its intention to file a petition for review on certiorari
with the Supreme Court. 6
Petitioners, in a second motion for execution and recomputation dated July 26, 1982,
argued that the opposition was improper, the decision having become final and
executory. 7 In reply, respondent filed a supplemental opposition, saying that: 1) since
June 21, 1978, petitioners had abandoned their work; and 2) petitioners were the ones
actually indebted to respondent because of the advances received by them. 8
Over petitioners' objection, the labor arbiter nonetheless took cognizance of
respondents' opposition and set the case anew for hearing.
On July 19, 1983, the labor arbiter dismissed respondents' opposition, sustaining
petitioners' argument that the decision with respect to the money judgment was already
final and executory. 9 Regarding petitioners' alleged abandonment of work, the labor
arbiter found that the claim was belied by respondents' own admission that petitioners
had indeed reported for work at its regional office in Cagayan de Oro City on June 31,
1978. 10
On August 4, 1983, private respondent appealed to the NLRC and moved to stay
execution. 11 Stressing the finality of the decision, petitioner reiterated its motion for
execution. 12 On August 16, 1983, respondent Commission accepted the appeal and
issued an order restraining the enforcement of the original decision of the labor arbiter
as earlier approved by it. 13
Hence, this petition.
The principal issue raised in this petition is whether or not public respondent gravely
abused its discretion in entertaining the appeal and in issuing the challenged restraining
order.
The Solicitor General observed:
The decision dated March 24, 1982 rendered by respondent Commission denying
the motion for reconsideration and affirming the Labor Arbiter's findings in favor of
petitioners became immediately final and executory upon promulgation thereof.
This is so because said decision is inappealable and cannot be reviewed except
upon petition for certiorari before this Honorable Court. Being final and executory,
execution of said judgment should issue as a matter of right. 14
In Sawit vs. Rodas and Daquis vs. Bustos, we held that a judgment becomes final and
executory by operation of law, not by judicial declaration. 15 Accordingly, finality of
judgment becomes a fact upon the lapse of the reglementary period of appeal if no
appeal is perfected. 16 In such a situation, the prevailing party is entitled as a matter of
right to a writ of execution; 17 and issuance thereof is a ministerial duty, compellable by
mandamus. 18
In the instant case, however, what is sought to be reviewed is not the decision itself but
the manner of its execution. There is a big difference. While it is true that the decision
itself has become final and executory and so can no longer be challenged, there is no
question either that it must be enforced in accordance with its terms and conditions.
Any deviation therefrom can be the subject of a proper appeal.
The fact alone that the labor arbiter, in recomputing the award in the original decision,
raised it from the amount of P98,883.80 to the astonishing sum of P372,451.55 19 is
justification enough for the respondent NLRC to issue the challenged temporary
restraining order. In the meantime, anyway, the petitioners are protected by the
supersedeas bond put up by the respondent in the amount of the recomputed award.20
We hold therefore that the National Labor Relations Commission has the authority to
look into the correctness of the execution of the decision in this case and to consider
the supervening events that may affect such execution, like the possible set-off of the
petitioners' advances or debts against their total claim, their discontinuance from
employment by abandonment or resignation, and other relevant developments.
ACCORDINGLY, the instant petition is dismissed and this case is remanded to the
respondent National Labor Relations Commission for final determination of the award
due the petitioners in the execution of the decision rendered by the labor arbiter on
August 27, 1978, as affirmed by the said Commission on November 9, 1981.
SO ORDERED.
EN BANC
G.R. No. 130866 September 16, 1998
ST. MARTIN FUNERAL HOME, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and BIENVENIDO ARICAYOS, respondents.
Labor Law; Judicial Review; Appeals; Pleadings and Practice; The Court feels that it is
now exigent and opportune to reexamine the functional validity and systemic
practicability of the mode of judicial review it has long adopted and still follows with
respect to decisions of the NLRC.—Before proceeding further into the merits of the
case at bar, the Court feels that it is now exigent and opportune to reexamine the
functional validity and systemic practicability of the mode of judicial review it has long
adopted and still follows with respect to decisions of the NLRC. The increasing number
of labor disputes that find their way to this Court and the legislative changes
introduced over the years into the provisions of P.D. No. 442 (The Labor Code of the
Philippines and Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary Reorganization Act
of 1980) now stridently call for and warrant a reassessment of that procedural aspect.
Same; Same; Same; Jurisdiction; Statutes; The excepting clause provided for in
paragraph (3), Section 9 of BP No. 129, as amended by RA No. 7902, contradicts what
has been ruled and said all along that appeal does not lie from decisions of the NLRC.—
It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now grants
exclusive appellate jurisdiction to the CA over all final adjudications of the RTC and the
quasi-judicial agencies generally or specifically referred to therein except, among
others, “those falling within the appellate jurisdiction of the SC in accordance with x x x
the Labor Code of the Philippines, as amended, x x x.” This would necessarily
contradict what has been ruled and said all along that appeal does not lie from decisions
of the NLRC. Yet, under such excepting clause literally construed, the appeal from the
NLRC cannot be brought to the CA, but to this Court by necessary implication.
Same; Same; Same; Same; There are no cases in the Labor Code the decisions,
resolutions, orders or awards wherein are within the appellate jurisdiction of the
Supreme Court or of any other court for that matter.—The same exceptive clause
further confuses the situation by declaring that the CA has no appellate jurisdiction over
decisions falling within the appellate jurisdiction of the SC in accordance with the
Constitution, the provisions of B.P. No. 129, and those specified cases in Section 17 of
the Judiciary Act of 1948. These cases can, of course, be properly excluded from the
exclusive appellate jurisdiction of the CA. However, because of the aforementioned
amendment by transposition, also supposedly excluded are cases falling within the
appellate jurisdiction of the SC in accordance with the Labor Code. This is illogical and
impracticable, and Congress could not have intended that procedural gaffe, since there
are no cases in the Labor Code the decisions, resolutions, orders or awards wherein
are within the appellate jurisdiction of the SC or of any other court for that matter.
Same; Same; Same; Same; Statutory Construction; A review of the legislative
records on the antecedents of R.A. No. 7902 persuades the Court that there may have
been an oversight in the course of the deliberations on the said Act or an imprecision
in the terminology used therein.—A review of the legislative records on the antecedents
of RA No. 7902 persuades us that there may have been an oversight in the course of
the deliberations on the said Act or an imprecision in the terminology used therein. In
fine, Congress did intend to provide for judicial review of the adjudications of the NLRC
in labor cases by the SC, but there was an inaccuracy in the term used for the intended
mode of review. This conclusion which we have reluctantly but prudently arrived at has
been drawn from the considerations extant in the records of Congress, more particularly
on S.B. No. 1495 and the Reference Committee Report on S. No. 1495/H. No. 10452.
Same; Same; Same; Same; Same; Certiorari; Pleadings and Practice; The
Court is of the considered opinion that ever since appeals from the NLRC to the
Supreme Court were eliminated, the legislative intendment was that the special civil
action of certiorari was and still is the proper vehicle for judicial review of decisions of
the NLRC; Appeals by certiorari and the original action for certiorari are both modes of
judicial review addressed to the appellate courts.—The Court is, therefore, of the
considered opinion that ever since appeals from the NLRC to the Supreme Court were
eliminated, the legislative intendment was that the special civil action of certiorari was
and still is the proper vehicle for judicial review of decisions of the NLRC. The use of
the word “appeal” in relation thereto and in the instances we have noted could have
been a lapsus plumae because appeals by certiorari and the original action for certiorari
are both modes of judicial review addressed to the appellate courts. The important
distinction between them, however, and with which the Court is particularly concerned
here is that the special civil action of certiorari is within the concurrent original
jurisdiction of this Court and the CA; whereas to indulge in the assumption that appeals
by certiorari to the SC are allowed would not subserve, but would subvert, the intention
of Congress as expressed in the sponsorship speech on Senate Bill No. 1495.
Same; Same; Same; Same; Same; Same; Same; Hierarchy of Courts; All
references in the amended Section 9 of B.P. No. 129 to supposed appeals from the
NLRC to the SC are interpreted and hereby declared to mean and refer to petitions for
certiorari under Rule 65—consequently, all such petitions should henceforth be initially
filed in the CA.—While we do not wish to intrude into the Congressional sphere on the
matter of the wisdom of a law, on this score we add the further observations that there
is a growing number of labor cases being elevated to this Court which, not being a trier
of fact, has at times been constrained to remand the case to the NLRC for resolution of
unclear or ambiguous factual findings; that the CA is procedurally equipped for that
purpose, aside from the increased number of its component divisions; and that there is
undeniably an imperative need for expeditious action on labor cases as a major aspect
of constitutional protection to labor. Therefore, all references in the amended Section 9
of B.P. No. 129 to supposed appeals from the NLRC to the SC are interpreted and
hereby declared to mean and refer to petitions for certiorari under Rule 65.
Consequently, all such petitions should henceforth be initially filed in the CA in strict
observance of the doctrine on the hierarchy of courts as the appropriate forum for the
relief desired. SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.
REGALADO, J.:
The present petition for certiorari stemmed from a complaint for illegal dismissal filed
by herein private respondent before the NLRC, Regional Arbitration Branch No. III, in
San Fernando, Pampanga. Private respondent alleges that he started working as
Operations Manager of petitioner St. Martin Funeral Home on February 6, 1995.
However, there was no contract of employment executed between him and petitioner
nor was his name included in the semi-monthly payroll. On January 22, 1996, he was
dismissed from his employment for allegedly misappropriating P38,000.00 which was
intended for payment by petitioner of its value added tax (VAT) to the BIR. 1
Petitioner on the other hand claims that private respondent was not its employee but
only the uncle of Amelita Malabed, the owner of petitioner St. Martin's Funeral Home.
Sometime in 1995, private respondent, who was formerly working as an overseas
contract worker, asked for financial assistance from the mother of Amelita. Since then,
as an indication of gratitude, private respondent voluntarily helped the mother of
Amelita in overseeing the business.
In January 1996, the mother of Amelita passed away, so the latter then took over the
management of the business. She then discovered that there were arrears in the
payment of taxes and other government fees, although the records purported to show
that the same were already paid. Amelita then made some changes in the business
operation and private respondent and his wife were no longer allowed to participate in
the management thereof. As a consequence, the latter filed a complaint charging that
petitioner had illegally terminated his employment.2
Based on the position papers of the parties, the labor arbiter rendered a decision in
favor of petitioner on October 25, 1996 declaring that no ER-EE relationship existed
between the parties and, therefore, his office had no jurisdiction over the case. 3
Not satisfied with the said decision, private respondent appealed to the NLRC
contending that the labor arbiter erred (1) in not giving credence to the evidence
submitted by him; (2) in holding that he worked as a "volunteer" and not as an employee
of St. Martin Funeral Home from February 6, 1995 to January 23, 1996, or a period of
about one year; and (3) in ruling that there was no employer-employee relationship
between him and petitioner.4
On June 13, 1997, the NLRC rendered a resolution setting aside the questioned
decision and remanding the case to the labor arbiter for immediate appropriate
proceedings.5 Petitioner then filed a motion for reconsideration which was denied by
the NLRC in its resolution dated August 18, 1997 for lack of merit,6 hence the present
petition alleging that the NLRC committed grave abuse of discretion.7
Before proceeding further into the merits of the case at bar, the Court feels that it is
now exigent and opportune to reexamine the functional validity and systemic
practicability of the mode of judicial review it has long adopted and still follows with
respect to decisions of the NLRC. The increasing number of labor disputes that find
their way to this Court and the legislative changes introduced over the years into the
provisions of Presidential Decree (P.D.) No. 442 (The Labor Code of the Philippines
and Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary Reorganization Act of 1980)
now stridently call for and warrant a reassessment of that procedural aspect.
We prefatorily delve into the legal history of the NLRC. It was first established in the
Department of Labor by P.D. No. 21 on October 14, 1972, and its decisions were
expressly declared to be appealable to the Secretary of Labor and, ultimately, to the
President of the Philippines.
On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the same to
take effect six months after its promulgation. 8 Created and regulated therein is the
present NLRC which was attached to the Department of Labor and Employment for
program and policy coordination only.9 Initially, Article 302 (now, Article 223) thereof
also granted an aggrieved party the remedy of appeal from the decision of the NLRC
to the Secretary of Labor, but P.D. No. 1391 subsequently amended said provision and
abolished such appeals. No appellate review has since then been provided for.
Thus, to repeat, under the present state of the law, there is no provision for appeals
from the decision of the NLRC. 10 The present Section 223, as last amended by Section
12 of RA No. 6715, instead merely provides that the Commission shall decide all cases
within twenty days from receipt of the answer of the appellee, and that such decision
shall be final and executory after ten calendar days from receipt thereof by the parties.
When the issue was raised in an early case on the argument that this Court has no
jurisdiction to review the decisions of the NLRC, and formerly of the Secretary of Labor,
since there is no legal provision for appellate review thereof, the Court nevertheless
rejected that thesis. It held that there is an underlying power of the courts to scrutinize
the acts of such agencies on questions of law and jurisdiction even though no right of
review is given by statute; that the purpose of judicial review is to keep the
administrative agency within its jurisdiction and protect the substantial rights of the
parties; and that it is that part of the checks and balances which restricts the separation
of powers and forestalls arbitrary and unjust adjudications. 11
Pursuant to such ruling, and as sanctioned by subsequent decisions of this Court, the
remedy of the aggrieved party is to timely file a motion for reconsideration as a
precondition for any further or subsequent remedy, 12 and then seasonably avail of the
special civil action of certiorari under Rule 65, 13 for which said Rule has now fixed the
reglementary period of sixty days from notice of the decision. Curiously, although the
10-day period for finality of the decision of the NLRC may already have lapsed as
contemplated in Section 223 of the Labor Code, it has been held that this Court may
still take cognizance of the petition for certiorari on jurisdictional and due process
considerations if filed within the reglementary period under Rule 65. 14
Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129 originally
provided as follows:
Sec. 9. Jurisdiction. — The Intermediate Appellate Court shall exercise:
(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas
corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of
its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of RTC;&
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders, or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards, or commissions, except those falling within the appellate
jurisdiction of the Supreme Court in accordance with the Constitution, the provisions
of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of
the fourth paragraph of Section 17 of the Judiciary Act of 1948.
The Intermediate Appellate Court shall have the power to try cases and conduct
hearings, receive evidence and perform any and all acts necessary to resolve
factual issues raised in cases falling within its original and appellate jurisdiction,
including the power to grant and conduct new trials or further proceedings.
These provisions shall not apply to decisions and interlocutory orders issued under
the Labor Code and by the Central Board of Assessment Appeals. 15
Subsequently, and as it presently reads, this provision was amended by R.A. No. 7902
effective March 18, 1995, to wit:
Sec. 9. Jurisdiction. — The Court of Appeals shall exercise:
(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas
corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of
its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of RTC;&
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, including the Securities and Exchange
Commission, the Social Security Commission, the Employees Compensation
Commission and the Civil Service Commission, except those falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
Labor Code of the Philippines under Presidential Decree No. 442, as amended, the
provisions of this Act, and of subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.
The Court of Appeals shall have the power to try cases and conduct hearings,
receive evidence and perform any and all acts necessary to resolve factual issues
raised in cases falling within its original and appellate jurisdiction, including the
power to grant and conduct new trials or further proceedings. Trials or hearings in
the Court of Appeals must be continuous and must be completed within, three (3)
months, unless extended by the Chief Justice.
It will readily be observed that, aside from the change in the name of the lower appellate
court, 16 the following amendments of the original provisions of Section 9 of B.P. No.
129 were effected by R.A. No. 7902, viz.:
1. The last paragraph which excluded its application to the Labor Code of the
Philippines and the Central Board of Assessment Appeals was deleted and replaced
by a new paragraph granting the Court of Appeals limited powers to conduct trials and
hearings in cases within its jurisdiction.
2. The reference to the Labor Code in that last paragraph was transposed to paragraph
(3) of the section, such that the original exclusionary clause therein now provides
"except those falling within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of the Philippines under Presidential
Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the
third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948." (Emphasis supplied).
3. Contrarily, however, specifically added to and included among the quasi-judicial
agencies over which the Court of Appeals shall have exclusive appellate jurisdiction
are the Securities and Exchange Commission, the Social Security Commission, the
Employees Compensation Commission and the Civil Service Commission.
This, then, brings us to a somewhat perplexing impassè, both in point of purpose and
terminology. As earlier explained, our mode of judicial review over decisions of the
NLRC has for some time now been understood to be by a petition for certiorari under
Rule 65 of the RoC. This is, of course, a special original action limited to the resolution
of jurisdictional issues, that is, lack or excess of jurisdiction and, in almost all cases that
have been brought to us, grave abuse of discretion amounting to lack of jurisdiction.
It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now grants
exclusive appellate jurisdiction to the Court of Appeals over all final adjudications of the
Regional Trial Courts and the quasi-judicial agencies generally or specifically referred
to therein except, among others, "those falling within the appellate jurisdiction of the
Supreme Court in accordance with . . . the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, . . . ." This would necessarily contradict what
has been ruled and said all along that appeal does not lie from decisions of the
NLRC. 17 Yet, under such excepting clause literally construed, the appeal from the
NLRC cannot be brought to the CA, but to this Court by necessary implication.
The same exceptive clause further confuses the situation by declaring that the Court of
Appeals has no appellate jurisdiction over decisions falling within the appellate
jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of
B.P. No. 129, and those specified cases in Section 17 of the Judiciary Act of 1948.
These cases can, of course, be properly excluded from the exclusive appellate
jurisdiction of the Court of Appeals. However, because of the aforementioned
amendment by transposition, also supposedly excluded are cases falling within the
appellate jurisdiction of the Supreme Court in accordance with the Labor Code. This is
illogical and impracticable, and Congress could not have intended that procedural
gaffe, since there are no cases in the Labor Code the decisions, resolutions, orders or
awards wherein are within the appellate jurisdiction of the Supreme Court or of any
other court for that matter.
A review of the legislative records on the antecedents of R.A. No. 7902 persuades us
that there may have been an oversight in the course of the deliberations on the said
Act or an imprecision in the terminology used therein. In fine, Congress did intend to
provide for judicial review of the adjudications of the NLRC in labor cases by the SC,
but there was an inaccuracy in the term used for the intended mode of review. This
conclusion which we have reluctantly but prudently arrived at has been drawn from the
considerations extant in the records of Congress, more particularly on Senate Bill No.
1495 and the Reference Committee Report on S. No. 1495/H. No. 10452. 18
In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his sponsorship
speech 19 from which we reproduce the following excerpts:
The Judiciary Reorganization Act, Mr. President, B.P. Blg. 129, reorganized the CA
and at the same time expanded its jurisdiction and powers. Among others, its
appellate jurisdiction was expanded to cover not only final judgment of RTC, but
also all final judgment(s), decisions, resolutions, orders or awards of quasi-judicial
agencies, instrumentalities, boards and commissions, except those falling within the
appellate jurisdiction of the SC in accordance with the Constitution, the provisions
of BP Blg. 129 and of subparagraph 1 of the third paragraph and subparagraph 4
of Section 17 of the Judiciary Act of 1948.
Mr. President, the purpose of the law is to ease the workload of the Supreme Court
by the transfer of some of its burden of review of factual issues to the Court of
Appeals. However, whatever benefits that can be derived from the expansion of the
appellate jurisdiction of the Court of Appeals was cut short by the last paragraph of
Section 9 of Batas Pambansa Blg. 129 which excludes from its coverage the
"decisions and interlocutory orders issued under the Labor Code of the Philippines
and by the Central Board of Assessment Appeals.
Among the highest number of cases that are brought up to the Supreme Court
are labor cases. Hence, SB No. 1495 seeks to eliminate the exceptions enumerated
in Section 9 and, additionally, extends the coverage of appellate review of the Court
of Appeals in the decision(s) of the Securities and Exchange Commission, the
Social Security Commission, and the Employees Compensation Commission to
reduce the number of cases elevated to the SC. (Emphases and corrections ours)
xxx xxx xxx
Senate Bill No. 1495 authored by our distinguished Colleague from Laguna
provides the ideal situation of drastically reducing the workload of the SC without
depriving the litigants of the privilege of review by an appellate tribunal.
In closing, allow me to quote the observations of former Chief Justice Teehankee
in 1986 in the Annual Report of the Supreme Court:
. . . Amendatory legislation is suggested so as to relieve the Supreme Court of
the burden of reviewing these cases which present no important issues involved
beyond the particular fact and the parties involved, so that the SC may wholly
devote its time to cases of public interest in the discharge of its mandated task
as the guardian of the Constitution and the guarantor of the people's basic rights
and additional task expressly vested on it now "to determine whether or not there
has been a grave abuse of discretion amounting to lack of jurisdiction on the
part of any branch or instrumentality of the Government.
We used to have 500,000 cases pending all over the land, Mr. President. It has
been cut down to 300,000 cases some five years ago. I understand we are now
back to 400,000 cases. Unless we distribute the work of the appellate courts, we
shall continue to mount and add to the number of cases pending.
In view of the foregoing, Mr. President, and by virtue of all the reasons we have
submitted, the Committee on Justice and Human Rights requests the support and
collegial approval of our Chamber.
xxx xxx xxx
Surprisingly, however, in a subsequent session, the following Committee Amendment
was introduced by the said sponsor and the following proceedings transpired: 20
 Senator Roco. On page 2, line 5, after the line "Supreme Court in accordance with
the Constitution," add the phrase "THE LABOR CODE OF THE PHILIPPINES
UNDER P.D. 442, AS AMENDED." So that it becomes clear, Mr. President, that
issues arising from the Labor Code will still be appealable to the Supreme Court.
The President. Is there any objection? (Silence) Hearing none, the amendment is
approved.
Senator Roco. On the same page, we move that lines 25 to 30 be deleted. This was
also discussed with our Colleagues in the House of Representatives and as we
understand it, as approved in the House, this was also deleted, Mr. President.
The President. Is there any objection? (Silence) Hearing none, the amendment is
approved.
Senator Roco. There are no further Committee amendments, Mr. President.
Senator Romulo. Mr. President, I move that we close the period of Committee
amendments.
The President. Is there any objection? (Silence) Hearing none, the amendment is
approved. (Emphasis supplied). x x x xxx xxx
Thereafter, since there were no individual amendments, Senate Bill No. 1495 was
passed on second reading and being a certified bill, its unanimous approval on third
reading followed. 21 The Conference Committee Report on Senate Bill No. 1495 and
House Bill No. 10452, having theretofore been approved by the House of
Representatives, the same was likewise approved by the Senate on February 20,
1995, 22 inclusive of the dubious formulation on appeals to the SC earlier discussed.
The Court is, therefore, of the considered opinion that ever since appeals from the
NLRC to the Supreme Court were eliminated, the legislative intendment was that the
special civil action of certiorari was and still is the proper vehicle for judicial review of
decisions of the NLRC. The use of the word "appeal" in relation thereto and in the
instances we have noted could have been a lapsus plumae because appeals
by certiorari and the original action for certiorari are both modes of judicial review
addressed to the appellate courts. The important distinction between them, however,
and with which the Court is particularly concerned here is that the special civil action
of certiorari is within the concurrent original jurisdiction of this Court and the Court of
Appeals; 23 whereas to indulge in the assumption that appeals by certiorari to the
Supreme Court are allowed would not subserve, but would subvert, the intention of
Congress as expressed in the sponsorship speech on Senate Bill No. 1495.
Incidentally, it was noted by the sponsor therein that some quarters were of the opinion
that recourse from the NLRC to the Court of Appeals as an initial step in the process of
judicial review would be circuitous and would prolong the proceedings. On the contrary,
as he commendably and realistically emphasized, that procedure would be
advantageous to the aggrieved party on this reasoning:
On the other hand, Mr. President, to allow these cases to be appealed to the Court
of Appeals would give litigants the advantage to have all the evidence on record be
reexamined and reweighed after which the findings of facts and conclusions of said
bodies are correspondingly affirmed, modified or reversed.
Under such guarantee, the Supreme Court can then apply strictly the axiom that
factual findings of the Court of Appeals are final and may not be reversed on appeal
to the Supreme Court. A perusal of the records will reveal appeals which are factual
in nature and may, therefore, be dismissed outright by minute resolutions. 24
While we do not wish to intrude into the Congressional sphere on the matter of the
wisdom of a law, on this score we add the further observations that there is a growing
number of labor cases being elevated to this Court which, not being a trier of fact, has
at times been constrained to remand the case to the NLRC for resolution of unclear or
ambiguous factual findings; that the Court of Appeals is procedurally equipped for that
purpose, aside from the increased number of its component divisions; and that there is
undeniably an imperative need for expeditious action on labor cases as a major aspect
of constitutional protection to labor.
Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed
appeals from the NLRC to the Supreme Court are interpreted and hereby declared to
mean and refer to petitions for certiorari under Rule 65. Consequently, all such petitions
should hence forth be initially filed in the Court of Appeals in strict observance of the
doctrine on the hierarchy of courts as the appropriate forum for the relief desired.
Apropos to this directive that resort to the higher courts should be made in accordance
with their hierarchical order, this pronouncement in Santiago vs. Vasquez, et
al. 25 should be taken into account:
One final observation. We discern in the proceedings in this case a propensity on
the part of petitioner, and, for that matter, the same may be said of a number of
litigants who initiate recourses before us, to disregard the hierarchy of courts in our
judicial system by seeking relief directly from this Court despite the fact that the
same is available in the lower courts in the exercise of their original or concurrent
jurisdiction, or is even mandated by law to be sought therein. This practice must be
stopped, not only because of the imposition upon the precious time of this Court but
also because of the inevitable and resultant delay, intended or otherwise, in the
adjudication of the case which often has to be remanded or referred to the lower
court as the proper forum under the rules of procedure, or as better equipped to
resolve the issues since this Court is not a trier of facts. We, therefore, reiterate the
judicial policy that this Court will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts or where exceptional and
compelling circumstances justify availment of a remedy within and calling for the
exercise of our primary jurisdiction.
WHEREFORE, under the foregoing premises, the instant petition for certiorari is
hereby REMANDED, and all pertinent records thereof ordered to be FORWARDED, to
the Court of Appeals for appropriate action and disposition consistent with the views
and ruling herein set forth, without pronouncement as to costs. SO ORDERED.
Footnotes
10 While Art. 223 bears the epigraph of "Appeal," it actually refers only to decisions, awards, or
orders of the labor arbiter which shall be final and executory unless appealed to the NLRC by any
or both parties within ten calendar days from receipt thereof.
11 San Miguel Corporation vs. Secretary of Labor, et al., G.R. No. L-39195, May 15, 1975, 64
SCRA 56; Scott vs. Inciong, et al. G.R. No. L-38868, December 29, 1975, 68 SCRA 473;
Bordeos, et al., vs. NLRC, et al., G.R. Nos. 115314-23, September 26, 1996, 262 SCRA 424.
12 Zapata vs. NLRC, et al., G.R. No. 77827, July 5, 1989, 175 SCRA 56.
13 See, for instance , Pure Foods Corporation vs. NLRC, et al., G.R. No. 78591, March 21, 1989,
171 SCRA 415.
14 Mantrade, etc. vs. Bacungan, et al., G.R. No. L-48437, September 30, 1986, 144 SCRA 511.
15 75 O.G. 4781, August 29, 1983.
16 EO No. 33 restored the name of the CA, in lieu of the IAC, effective July 28, 1986.
17 The different modes of appeal, that is, by writ of error (Rule 41), petition for review (Rules 42
and 43), and petition for review on certiorari (Rule 45) obviously cannot be availed of because
there is no provision appellate review of NLRC decisions in P.D. No. 442, as amended.
18 All Act Expanding the Jurisdiction of the CA, Amending for the Purpose Section 9 of Batas
Pambansa Blg. 129, known as the Judiciary Reorganization Act of 1980.
23 The RTC also shares that concurrent jurisdiction but that cannot be considered with regard to
the NLRC since they are of the same rank.
25 G.R. Nos. 99289-90, January 27, 1993, 217 SCRA 633. See also Tano, et al. vs. Socrates. et
al., G.R. No. 110249, August 21, 1997, 278 SCRA 155.