labor h procedure and jurisdiction

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LABOR LAW: H. PROCEDURE AND JURISDICTION

Prof. Joselito Guianan Chan

LAST-MINUTE NOTES ON THE 2011 BAR EXAMINATION IN LABOR LAW BASED ON THE

SUPREME COURT-PRESCRIBED SYLLABUS


H. PROCEDURE AND JURISDICTION

[These 8-part Notes discuss all topics/sub-topics in the Supreme Court-prescribed Syllabus for Labor Law] ==================================================================

TOPICS UNDER THE SYLLABUS H. PROCEDURE AND JURISDICTION

1. Labor Arbiter a. Jurisdiction b. Effect of self-executing order of reinstatement on backwages c. Requirements to perfect appeal to NLRC

2. National Labor Relations Commission (NLRC) a. Jurisdiction b. Effect of NLRC reversal of Labor Arbiter’s order of reinstatement c. Requirements to perfect appeal to Court of Appeals

3. Bureau of Labor Relations (BLR) – Med Arbiters a. Jurisdiction (Original and Appellate)

4. National Conciliation and Mediation Board (NCMB) a. Conciliation vs. Mediation b. Preventive Mediation

5. DOLE Regional Directors a. Small money claims

6. DOLE Secretary a. Visitorial and Enforcement Powers b. Power to suspend effects of termination

7. Voluntary Arbitrators a. Submission Agreement b. Rule 43, Rules of Court

8. Court of Appeals a. Rule 65, Rules of Court

9. Supreme Court a. Rule 45, Rules of Court

10. Prescription of Actions a. Money claims b. Illegal dismissal c. Unfair labor practice d. Offenses penalized by the Labor Code and IRR issued pursuant thereto

-------------------------------------------------------------------------------------------------------------------------------------------- =========================== TOPIC UNDER THE SYLLABUS: 1. Labor Arbiter a. Jurisdiction =========================== Relevant Provisions: Articles 217 and 128 [b], Labor Code Section 10, R.A. No. 8042, as amended by R.A. No. 10022

1. PRELIMINARY CONSIDERATIONS.

a. Employment relationship, a pre‐requisite for exercise of jurisdiction.

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2 LABOR LAW: H. PROCEDURE AND JURISDICTION


The existence of employer‐employee relationship between the parties‐litigants, or a reasonable causal connection to such relationship1 is a pre‐requisite for the exercise of jurisdiction over a labor dispute by the Labor Arbiters.

b. The Labor Arbiters and the NLRC are not exclusively vested with authority to determine the existence of employer‐employee relationship.

In Republic of the Philippines v. Asiapro Cooperative, [G.R. No. 172101, November 23, 2007], involving the issue of coverage of owners‐members of respondent Cooperative under the Social Security System (SSS), it was held that it is not only the Labor Arbiter or the NLRC who/which has the exclusive jurisdiction to determine the existence of the employer‐employee relationship. The Social Security Commission (SSC) has also that power.

Additionally, the Med‐Arbiter may also exercise the power to determine existence of employer‐employee relationship.

c. In cases of money claims of OFWs, Labor Arbiters may exercise jurisdiction even absent the employment relationship.

In Santiago v. CF Sharp Crew Management, Inc., [G.R. No. 162419, July 10, 2007], it was held that a seafarer who has already signed a POEA‐approved employment contract but was not deployed overseas and, therefore, there is no employer‐employee relationship, may file his monetary claims case with the Labor Arbiter. This is because the jurisdiction of Labor Arbiters is not limited to claims arising from employer‐employee relationships. Under Section 10 of R. A. No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995), as amended by Section 7 of R.A. No. 10022 (March 8, 2010), the Labor Arbiter may exercise the claims of OFWs arising out of an employer‐employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment, including claims for actual, moral, exemplary and other forms of damage.

d. Labor Arbiters have jurisdiction even if the case is filed by the heirs of the OFW. This was the ruling in Medline Management, Inc. v. Roslinda, [G.R. No. 168715, September 15, 2010]. As heirs,

the wife and son of Juliano Roslinda, the deceased OFW, have the personality to file the claim for death compensation, reimbursement of medical expenses, damages and attorney's fees before the Labor Arbiter of the NLRC.

e. Nature of jurisdiction of Labor Arbiters is original and exclusive. The jurisdiction conferred by Article 217 to the Labor Arbiters is both original and exclusive, meaning, no other

officers or tribunals can take cognizance of, or hear and decide, any of the cases therein enumerated.

f. Exceptions to the original and exclusive jurisdiction of Labor Arbiters. The following are the exceptions: 1. When the Secretary of Labor and Employment or the President exercises his power under Article 263 [g] of

the Labor Code to assume jurisdiction over national interest cases and decide them himself; or 2. When the NLRC exercises its power of compulsory arbitration over national interest cases that are certified

to it by the Secretary of Labor and Employment pursuant to the exercise by the latter of his certification power under the same Article 263 [g]; or

3. When the parties agree to submit the case to voluntary arbitration before a Voluntary Arbitrator or Panel of Voluntary Arbitrators who, under Articles 261 and 262 of the Labor Code, are also possessed of original and exclusive jurisdiction to hear and decide cases mutually submitted to them by the parties for arbitration and adjudication.

The Labor Arbiters do not have jurisdiction over the cases mentioned above which are taken cognizance of by said other labor officials or tribunals under specific provisions of the Labor Code.

g. Reasonable causal connection rule – the rule in case of conflict of jurisdiction between labor court and regular court.

Under this rule, if there is a reasonable causal connection between the claim asserted and the employer‐employee relations, then the case is within the jurisdiction of labor courts.2

In the absence of such nexus, it is the regular courts that have jurisdiction.3

h. Labor disputes, not subject to barangay conciliation. Labor cases are not subject to the conciliation proceedings prescribed under Presidential Decree No. 1508

requiring the submission of disputes before the Barangay Lupong Tagapayapa prior to their filing with the court or other government offices. Requiring conciliation of labor disputes before the barangay courts would defeat the very salutary purposes of the law. Instead of simplifying labor proceedings designed at expeditious settlement or referral to the proper courts or offices to decide it finally, the conciliation of the issues before the Barangay Lupong Tagapayapa would only duplicate the conciliation proceedings and unduly delay the disposition of labor cases.4

i. Labor Arbiter has no injunction power; the NLRC has. While the NLRC is expressly granted the power to issue an injunction or a restraining order in labor disputes

under Article 218 [e], there is no express, or even implied, grant of similar power to Labor Arbiters in the Labor Code.

1 Known as Reasonable Causal Connection Rule. 2 Dai-ichi Electronics Manufacturing Corporation v. Villarama, Jr. G.R. No. 112940, Nov. 21, 1994, 238 SCRA 267, 271. 3 San Miguel Corporation v. Etcuban, G. R. No. 127639, Dec. 3, 1999. 4 Montoya v. Escayo, G.R. Nos. 82211-12, March 21, 1989, 171 SCRA 442.



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j. Power to conduct ocular inspection. The Labor Arbiters or their duly authorized representatives, have the power to conduct ocular inspections, at

any time during working hours, on any establishment, building, ship or vessel, place or premises, including any work, material, implement, machinery, appliance or any object therein, and ask any employee, laborer, or any person, as the case may be, for any information or data concerning any matter or question relative to the object of the investigation.5

2. JURISDICTION OF LABOR ARBITERS. The following provisions of laws grant jurisdiction to the Labor Arbiters: 1. Article 217 of the Labor Code; 2. Article 128 [b] of the Labor Code; and 3. Section 10 of R.A. No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995) as amended in 2010 by

R.A. No. 10022 [March 8, 2010].

2.1. CASES UNDER ARTICLE 217,

The following are cases falling under the original and exclusive jurisdiction of Labor Arbiters under Article 217 of the Labor Code:

1. Unfair labor practice (ULP) cases; 2. Termination disputes (Illegal dismissal cases); 3. Money claims involving an amount exceeding P5,000.00; 4. Money claims raised in illegal dismissal cases (regardless of amount); 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 the Labor Code, including questions involving the legality of

strikes and lockouts; and

Exceptions: 1. Claims for Employees’ Compensation (EC), Social Security (SS), PhilHealth6 and maternity benefits. Reason:

Jurisdiction over EC, SS and maternity benefits is lodged with the Social Security Commission. Jurisdiction over PhilHealth is vested with the Philippine Health Insurance Corporation (PHIC).

2. Cases involving interpretation or implementation of CBA and interpretation or enforcement of company personnel policies. Reason: Jurisdiction over these cases is vested with the Grievance Machinery and Voluntary Arbitration. If erroneously filed with the Labor Arbiter, they 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.7

2.2. CASES UNDER ARTICLE 128 [b], LABOR CODE.

Article 128 [b] involves the exercise of the visitorial and enforcement powers by the DOLE Secretary. The jurisdiction over cases arising from the inspection of establishments is vested with the DOLE Regional Director, except in cases where the employer contests the findings of the labor inspectors8 and raises issues supported by documentary proofs which were not considered in the course of inspection. These contested cases falling under this exception clause in paragraph [b] of Article 128 fall under the jurisdiction of the Labor Arbiter.

2.3. CASES OF OFWs UNDER ARTICLE SECTION 10, R.A. NO. 8042, AS AMENDED BY R.A. NO. 10022.

The Labor Arbiter has original and exclusive jurisdiction over monetary claims of OFWs, to wit: 1. Those arising out of an employer‐employee relationship; 2. Those arising by virtue of any law; 3. Those arising from a contract involving Filipino workers for overseas deployment; 4. Claims for actual, moral, exemplary and other forms of damages.

3. UNFAIR LABOR PRACTICE CASES.

a. All ULPs that may be committed by both the employers and labor organizations. The Labor Arbiter has original and exclusive jurisdiction over the civil aspect of all ULPs that may be committed

by either the employers9 or the labor organizations.10 The criminal aspect thereof falls under the jurisdiction of the regular court.

b. Unfair labor practice acts. Under the Labor Code, there are only five (5) provisions related to unfair labor practices, to wit: 1. Article 247 which describes the concept of unfair labor practices and prescribes the procedure for their

prosecution; 2. Article 248 which enumerates the unfair labor practices that may be committed by employers; 3. Article 249 which enumerates the unfair labor practices that may be committed by labor organizations;

5 Article 219 of the Labor Code. 6 Formerly known as medicare. 7 See paragraph [c] of Article 217, Labor Code. 8 labor employment and enforcement officer. 9 Under Article 248, Labor Code. 10 Under Article 249, Labor Code.



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4. Article 261 which considers violations of the CBA as no longer unfair labor practices unless the same are gross in character which means flagrant and/or malicious refusal to comply with the economic provisions thereof.

5. Article 263 [c] which refers to union‐busting involving the dismissal from employment of union officers duly elected in accordance with the union constitution and by‐laws, where the existence of the union is threatened thereby.

4. JURISDICTION OVER TERMINATION DISPUTES (ILLEGAL DISMISSAL CASES).

a. Labor officials who may take cognizance of termination disputes. An examination of the Labor Code shows that the following officials have the power to take cognizance of

termination disputes in the exercise of their original and exclusive jurisdiction: 1. Labor Arbiters under paragraph [a] (2) of Article 217; 2. Voluntary Arbitrators or panels of Voluntary Arbitrators under Articles 261 and 262; 3. The Secretary of Labor and Employment, in the exercise of his assumption power in national interest

cases. Under paragraph [g] of Article 263, he may take cognizance of termination disputes that are included or subsumed in the case/s over which he has assumed jurisdiction.

4. The NLRC, in national interest cases certified to it for compulsory arbitration by the Secretary of Labor and Employment under the same Article 263 [g]. Such certified cases may include or subsume the issue of termination of employment the legality of which the NLRC may validly decide upon.

b. Termination case is not a grievable issue. In Navarro III v. Damasco, [G.R. No. 101875, July 14, 1995], the Supreme Court held that a termination case is

not a grievable issue that must be submitted to the grievance machinery. In another case, San Miguel Corporation v. NLRC, [G.R. No. 108001, March 15, 1996, 255 SCRA 133, 140], it

was similarly held that dismissals do not call for the interpretation or enforcement of company personnel policies and so they may not be considered grievable or arbitrable by virtue of Article 217 [c].

In Maneja v. NLRC, [G.R. No. 124013, June 5, 1998, 290 SCRA 603], it was declared that termination cases fall under the original and exclusive jurisdiction of the Labor Arbiters, not of the Voluntary Arbitrators. The dismissal of petitioner does not fall within the phrase “grievances arising from the interpretation or implementation of collective bargaining agreement and those arising from the interpretation or enforcement of company personnel policies,” the jurisdiction of which pertains to the grievance machinery or thereafter, to a voluntary arbitrator or panel of voluntary arbitrators.

In Negros Metal Corp. v. Lamayo, [G.R. No. 186557, August 25, 2010]. It was held that termination disputes should be brought before a Labor Arbiter, except when the parties, under Article 262, unmistakably express that they agree to submit the same to voluntary arbitration.

5. JURISDICTION OVER MONEY CLAIMS.

a. Money claims under par. (a), [3] and [6] of Article 217; classification. Money claims falling within the original and exclusive jurisdiction of the Labor Arbiters are those mentioned in

paragraph [a], Nos. 3 and 6 of Article 217. They may be classified as follows: 1. Any money claim, regardless of amount, accompanied with a claim for reinstatement; or 2. Any money claim, regardless of whether accompanied with a claim for reinstatement, exceeding the

amount of five thousand pesos (P5,000.00) per claimant. The money claim in No. 1 above presupposes that it proceeds from a termination case, it being accompanied

with a claim for reinstatement. Hence, it falls within the jurisdiction of the Labor Arbiter since it is principally a termination dispute.

The money claim in No. 2 above does not necessarily arise from or involve a termination case but because the amount exceeds P5,000.00, it falls within the jurisdiction of the Labor Arbiter. If the amount does not exceed P5,000.00, it is, under Article 129, the DOLE Regional Director or his duly authorized hearing officers who have jurisdiction to take cognizance thereof.

b. Money claims must arise out of employer‐employee relationship. As a general rule, money claims of workers that are not connected with or do not arise out of employer‐

employee relationship fall within the jurisdiction of the regular courts. The money claims of workers referred to in paragraph 3 of Article 217 of the Labor Code embrace those which arise out of or in connection with the employer‐employee relationship, or some aspect or incident of such relationship.11

Clearly, the jurisdiction of the Labor Arbiter is not limited to money claims arising out of an illegal dismissal case, but all money claims arising out of employer‐employee relationships.12

Sonza v. ABS‐CBN Broadcasting Corporation, [G.R. No. 138051, June 10, 2004] Since petitioner is not an employee but an independent contractor, his monetary claims for the recovery of

unpaid talent fees, 13th month pay, separation pay, service incentive leave, signing bonus, travel allowance, and amounts

11 San Miguel Corporation v. NLRC, 161 SCRA 719. 12 Nation Broadcasting Corporation v. NLRC, [G.R. No. 116184, October 2, 1997, 280 SCRA 65, 68-69].



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due under the Employee Stock Option Plan of the respondent company do not fall under the jurisdiction of the Labor Arbiter but cognizable by the regular court.

Consulta v. CA, [G.R. No. 145443, March 18, 2005] The claim for unpaid commissions filed by the Managing Associate of an entity engaged in health care business,

was declared beyond the jurisdiction of the Labor Arbiter because there was no employer‐employee relationship between the parties. Her remedy is to file an ordinary civil action in the regular court to litigate her claim.

Other illustrative cases where money claims were held not to have arisen from the employment relationship are as follows:

1. A personal loan from a company president to an employee is not within the ambit of the jurisdiction of the Labor Arbiter.13

2. Claim of employee for a cash prize under a program of the company was held beyond the jurisdiction of the Labor Arbiter.14 But in another case, the claim by an employee for a house and lot prize as top salesman was held within the jurisdiction of the Labor Arbiter.15

3. Unpaid salaries, allowances and per diem of the President of a company are included in intra‐corporate dispute, hence, not cognizable by the Labor Arbiter.16 But a money claim of a corporate officer who is, at the same time, a regular employee is not an intra‐corporate dispute, hence, cognizable by the Labor Arbiter.17

4. Money claims of an independent contractor consisting of unpaid commissions and reimbursements fall beyond the jurisdiction of the Labor Arbiter.18

5. An action to enforce liability arising from a breach of trust, as well as to recover any amount allegedly misappropriated, must be brought before the regular courts.19

5.1. MONEY CLAIMS UNDER ARTICLE 128 OF THE LABOR CODE.

a. Visitorial and enforcement powers of DOLE Secretary under Article 128. Article 128 enunciates the visitorial and enforcement powers of the DOLE Secretary or any of his duly

authorized representatives.

b. Requisites for the valid exercise of the visitorial and enforcement powers under Article 128. For the valid exercise of the visitorial and enforcement powers provided under Article 128 [b], the following

requisites should concur: 1. The employer‐employee relationship should still exist; 2. The findings in question were made in the course of inspection by the labor employment and

enforcement officers or industrial safety engineers; and 3. The employees have not yet initiated any claim or complaint with the DOLE Regional Director under

Article 129, or the Labor Arbiter, under Article 217. The existence of the employment relationship at the time of the initiation of the action under Article 128 [b] is

essential. Based on this requisite, the Supreme Court, in the 2006 case of EJR Crafts Corp. v. Hon. CA, [G.R. No. 154101, March 10, 2006], disagreed with the contention of petitioner that the Labor Arbiter, and not the DOLE Regional Director, has jurisdiction over this case. It held that considering that there still exists an employer‐employee relationship between petitioner and private respondents and that the case involves violations of the labor standard provisions of the Labor Code, the DOLE Regional Director has jurisdiction to hear and decide the instant case in conformity with Article 128 [b] of the Labor Code.

Rizal Security & Protective Services, Inc. v. Hon. Maraan, [G.R. No. 124915, February 18, 2008] The Supreme Court ruled here that what is material to consider is that at the time of the filing of the complaints

or claims for payment of monetary benefits with the DOLE Regional Office, the complainants were still employees of petitioner company. Thus, the Supreme Court said that considering that it is uncontroverted that there still existed an employer‐employee relationship between petitioner Rizal Security and private respondents at the time of filing of the complaint on 19 May 1995, and that the case is one involving violations of labor standard provisions of the Labor Code, it is the DOLE Regional Director who has jurisdiction over the case.

c. Labor Arbiters have jurisdiction if employment relationship no longer exists at the time of the initiation of the action under Article 128.

If at the time of the initiation of the action under Article 128 [b], the employer‐employee relationship had already ceased to exist, it is not the DOLE Regional Director but the Labor Arbiter who has jurisdiction over the same, as emphasized in the case of Batong Buhay Gold Mines, Inc. v. Sec. Dela Serna, [G.R. No. 86963, August 6, 1999, 370 Phil. 872].

13 Food Traders House, Inc. v. NLRC, G.R. No. 120677, Dec. 21, 1998, 300 SCRA 360; See also Pondoc v. NLRC, G.R. No. 116347, Oct. 3, 1996, 262 SCRA 632. 14 San Miguel Corporation v. NLRC, 161 SCRA 719. 15 Pepsi-Cola Bottling Company v. Martinez, 112 SCRA 578. 16 Cagayan de Oro Coliseum, Inc. v. Minister of Labor and Employment, G.R. No. 71589, Dec. 17, 1990. 17 Gregorio Araneta University Foundation v. Teodoro, G.R. No. 75583, Nov. 8, 1988, 167 SCRA 79. 18 Sara v. Agarrado, G.R. No. L-73199, Oct. 26, 1988, 166 SCRA 625. 19 Dacanay v. NLRC, G.R. No. 107277, Aug. 9, 1996, 260 SCRA 486.



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d. Labor Arbiters have no jurisdiction even if the amount of the monetary claim exceeds P5,000.00. After the amendment of Article 128 [b] of the Labor Code by R. A. No. 7730, jurisprudence affirmed the rule

that the visitorial and enforcement powers of the DOLE Secretary under Article 128 are no longer bound by the restrictive effect of Articles 129 and 217 insofar as the amount of monetary claims is concerned.

Allied Investigation Bureau, Inc. v. Secretary of Labor and Employment, [G.R. No. 122006, November 24, 1999, 377 Phil. 80], It was ruled here that while it is true that under Articles 129 and 217 of the Labor Code, the Labor Arbiter has

jurisdiction to hear and decide cases where the aggregate money claims of each employee exceeds P5,000.00, said provisions of law do not contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor or his duly authorized representatives.

Ex‐Bataan Veterans Security Agency, Inc. v. The Secretary of Labor Laguesma, [G.R. No. 152396, November 20, 2007] It was held in this case that the Regional Director validly assumed jurisdiction over the money claims of private

respondents even if the claims exceeded P5,000 because such jurisdiction was exercised in accordance with Article 128 [b] of the Labor Code and the case does not fall under the exception clause.20

e. Labor Arbiters may still have jurisdiction over contested cases under the exception clause in Article 128 [b].

The exception clause in Article 128 [b], as amended by R. A. No. 7730, states:

“xxx. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection.”

3 elements to divest DOLE Regional Director of jurisdiction and confer it with Labor Arbiter: (1) that the employer contests the findings of the labor regulations officer and raises issues thereon; (2) that in order to resolve such issues, there is a need to examine evidentiary matters; and (3) that such matters are not verifiable in the normal course of inspection.21 Resultantly, if the said elements are present and, therefore, the labor standards case is covered by said

exception clause, then the Regional Director will have to endorse the case to the appropriate Labor Arbiters of the Arbitration Branch of the NLRC.

5.2. MONEY CLAIMS COGNIZABLE BY DOLE REGIONAL DIRECTORS UNDER ARTICLE 129.

Under Article 129 of the Labor Code, DOLE Regional Directors or his duly authorized hearing officers, are empowered, in a summary proceeding, to hear and decide claims for recovery of wages and other monetary claims and benefits, including legal interest, provided the following requisites concur:

1. The claim must arise from employer‐employee relationship; 2. The claimant does not seek reinstatement; and 3. The aggregate money claim of each employee does not exceed P5,000.00.22 Absent any of the requisites mentioned above will divest the Regional Directors of their authority to hear and

decide said money claims. Consequently, the jurisdiction thereover is vested upon the Labor Arbiters.23

6. JURISDICTION OVER CLAIMS FOR DAMAGES.

a. Labor Arbiters have jurisdiction over claims for damages. It is now a well‐settled rule that claims for damages as well as attorney’s fees in labor cases are cognizable by

the Labor Arbiters, to the exclusion of all other courts. Rulings to the contrary are deemed abandoned or modified accordingly.24 No matter how designated, for as long as the action primarily involves an employer‐employee relationship, the labor court has jurisdiction over any damage claims.

b. Claims for damages of OFWs. Claims for actual, moral, exemplary and other forms of damages that may be lodged by overseas Filipino

workers are cognizable by the Labor Arbiters.25

7. JURISDICTION OVER LEGALITY OF STRIKES AND LOCKOUTS.

a. Jurisdiction over strikes or lockouts not affecting national interest. In general, the Labor Arbiter has the power to determine questions involving the legality or illegality of a strike

or lockout, upon the filing of a proper complaint and after due proceedings. The employer, in case of a strike, or the union, in case of a lockout, may file the proper petition with the Labor

Arbiter to seek a declaration of the illegality thereof.26

20 See also V.L. Enterprises v. Hon. CA, [G.R. No. 167512, March 12, 2007]. 21 Ex-Bataan Veterans Security Agency, Inc. v. The Secretary of Labor Laguesma, [G.R. No. 152396, November 20, 2007]; See also See also Section 1 [b], Rule III of the Rules on the Disposition of Labor Standards Cases in the Regional Offices [September 16, 1987]. 22 M. Ramirez Industries v. Secretary of Labor and Employment, G.R. No. 89894, Jan. 3, 1997, 266 SCRA 111, 128; Ubay Arrastre and Stevedoring Services, Inc. v. Trajano, G.R. No. 106813, Nov. 25, 1993, 228 SCRA 189. 23 Paragraph [a] 6, Article 217, Labor Code; South Motorists Enterprises v. Tosoc, G.R. No. 87449, Jan. 23, 1990, 181 SCRA 386. 24 Primero v. Intermediate Appellate Court, [G.R. No. L-72644, December 14, 1987, 156 SCRA 435], 25 Section 10, Republic Act No. 8042; Section 58, Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995. 26 No. 26, Guidelines Governing Labor Relations.



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b. Jurisdiction over strikes or lockouts affecting national interest. Jurisdiction over strikes or lockouts in industries affecting the national interest is vested with the DOLE

Secretary and not with the Labor Arbiter, under Article 263 [g] of the Labor Code. Thus, the DOLE Secretary may assume jurisdiction thereover and decide it himself or certify it to the NLRC for compulsory arbitration.

c. Voluntary arbitration of strike or lockout cases may be done at any stage thereof. Before or at any stage of the compulsory arbitration process in a strike or lockout case before a Labor Arbiter or

the DOLE Secretary in assumed cases or the NLRC in certified cases, the parties may still opt to submit their dispute to voluntary arbitration.27 If the issue of legality or illegality of a strike or lockout is submitted by the parties to voluntary arbitration, the jurisdiction to resolve said issue belongs exclusively to the Voluntary Arbitrator or panel of Voluntary Arbitrators.28

d. Jurisdiction over prohibited activities committed during strikes or lockouts. Cases arising from any violations of Article 264 of the Labor Code regarding the commission of prohibited acts

in the course of a strike or lockout fall within the original and exclusive jurisdiction of the Labor Arbiter.29

e. Jurisdiction over criminal cases arising from strikes or lockouts. Jurisdiction over criminal cases which may have arisen as a consequence of the strike or lockout falls under the

jurisdiction of the regular courts.

8. OTHER ISSUES AFFECTING THE EXERCISE OF JURISDICTION BY LABOR ARBITERS.

Jurisprudence enunciates a number of rulings on issues and controversies not expressly covered by any provisions of the Labor Code but which may or may not fall within the jurisdiction of the Labor Arbiters. Some of them are as follows:

1. Termination of corporate officers and their monetary claims; 2. Issues involving employees in government‐owned and/or controlled corporations; 3. Issues involving an alien party; 4. Cases involving entities immune from suit; 5. Application of the doctrine of forum non conveniens; 6. Cases involving priests and ministers; 7. Effect of rehabilitation receivership on jurisdiction in labor cases; 8. Cases involving overseas Filipino workers; 9. Wage distortion cases; 10. Enforcement of labor standards laws; 11. Claims of domestic or househelpers; 12. Enforcement of compromise agreement; 13. Issues cognizable by grievance machinery or voluntary arbitration; 14. Issues involving cooperatives; 15. Issues involving local water utilities districts; 16. Quasi‐delict or tort cases; 17. Criminal and civil liabilities arising from violations of Article 241; 18. Claims or counter‐claims of employers against employees; 19. Constitutionality of CBA provisions; 20. Tax deductions as money claim; 21. Issuance by RTC of Writ of Habeas Data in relation to a labor case;

8.1. JURISDICTION OVER TERMINATION OF CORPORATE OFFICERS (INTRA‐CORPORATE DISPUTES).

a. Labor Arbiters have no jurisdiction over termination of a corporate officer which is in the nature of an intra‐corporate dispute.

It is a settled rule that jurisdiction over the subject matter is conferred by law. The determination of the rights of a director and corporate officer dismissed from his employment as well as the corresponding liability of a corporation, if any, is an intra‐corporate dispute subject to the jurisdiction of the regular courts and not of Labor Arbiters.30

b. New doctrine is that “corporate officers” refer only to those mentioned in the Corporation Code and the By‐Laws; all other officers not so mentioned are deemed employees.

Matling Industrial and Commercial Corp. v. Coros, [G.R. No. 157802, October 13, 2010]. It is now the prevailing rule, as enunciated in this 2010 case of Matling, that only the following should be

considered “corporate officers”: 1. Those expressly mentioned in Section 25, specifically the three (3) officers which a corporation must have,

namely: president, secretary, and treasurer; and 2. Those expressly mentioned and provided for in the By‐Laws. Thus, the creation of an office pursuant to or under a By‐Law enabling provision is not enough to make a

position a corporate office. Consequently the only officers of a corporation were those given that character either by the

27 Article 263 [h], Labor Code. 28 No. 019, Primer on Strike, Picketing and Lockout. 29 Article 217[5], Labor Code). 30 Okol v. Slimmers World International, G.R. No. 160146, Dec. 11, 2009.



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Corporation Code or by the By‐Laws; the rest of the corporate officers could be considered only as employees or subordinate officials.31

Locsin v. Nissan Lease Phils., Inc., [G.R. No. 185567, October 20, 2010] Petitioner Locsin was undeniably Chairman of the Board and Executive Vice President and Treasurer, and was

elected to these positions by respondent company’s Board of Directors pursuant to its By‐laws. As such, he was a corporate officer, not an employee, based on the submitted facts in this case and on Presidential Decree 902‐A, and Section 25 of Batas Pambansa Blg. 69, or the Corporation Code. Even as Executive Vice‐President/Treasurer, petitioner Locsin already acted as a corporate officer because such position is provided for in respondent company’s By‐Laws. Consequently, it was ruled in this case that the Labor Arbiter has no jurisdiction over his termination case since it is in the nature of an intra‐corporate dispute, an issue cognizable by the Regional Trial Court under Section 5 of Republic Act No. 8799 (Securities Regulation Code).

c. Rulings in Tabang and Nacpil, no longer controlling. The following rulings have been abandoned per Matling: 1. Purificacion G.Tabang v. NLRC, [G.R. No. 121143, January 21, 1997, 266 SCRA 462, 468], where it was ruled

that “(a) corporate officer’s dismissal is always a corporate act, or an intra‐corporate controversy, and the nature is not altered by the reason or wisdom with which the Board of Directors may have in taking such action. Also, an intra‐corporate controversy is one which arises between a stockholder and the corporation. There is no distinction, qualification, nor any exemption whatsoever. The provision is broad and covers all kinds of controversies between stockholders and corporations.” In this case, the petitioner’s dual positions at the time of her dismissal, that of Medical Director and Hospital Administrator of private respondent Pamana Golden Care Medical Center in Calamba, Laguna, are expressly provided under the By‐Laws.

2. Nacpil v. Intercontinental Broadcasting Corporation, [G.R. No. 144767, March 21, 2002], where petitioner argued that he is not a corporate officer of respondent IBC but an employee thereof since he has not been elected nor appointed as Comptroller and Assistant Manager by the IBC’s Board of Directors. He pointed out that he has actually been appointed as such on January 11, 1995 by the IBC’s General Manager. In support of his argument, petitioner underscored the fact that the IBC’s By‐Laws does not include the position of comptroller in its roster of corporate officers. He, therefore, contended that his dismissal was a controversy falling within the jurisdiction of the labor courts. The High Court, however, found this argument of petitioner untenable. It declared that even assuming that he was in fact appointed by the General Manager, such appointment was subsequently approved by the Board of Directors of respondent IBC. That the position of Comptroller is not expressly mentioned among the officers of IBC in its By‐Laws is of no moment because the IBC’s Board of Directors is empowered under Section 25 of the Corporation Code and under the corporation’s by‐laws to appoint such other officers as it may deem necessary. Consequently, since petitioner’s appointment as comptroller required the approval and formal action of respondent IBC’s Board of Directors to become valid, it is clear, therefore, that petitioner is a corporate officer whose dismissal may be the subject of a controversy cognizable by the SEC under Section 5 [c] of P.D. 902‐A (now by the Regional Trial Court under R. A. No. 8799) which includes and covers controversies involving both the election and appointment of corporate directors, trustees, officers, and managers. Had petitioner been an ordinary employee, such board action would not have been required.

Because the soundness of the dicta enunciated in Nacpil and Tabang therein is not unassailable, as it is “too sweeping and does not accord with reason, justice, and fair play,” the Supreme Court made a definitive holding in the 2010 case of Matling Industrial and Commercial Corp. v. Coros, [supra] that Nacpil and Tabang should no longer be controlling. Thus, it ruled:

“The petitioners’ reliance on Tabang, supra, is misplaced. The statement in Tabang, to the effect that offices not expressly mentioned in the By‐Laws but were created pursuant to a By‐Law enabling provision were also considered corporate offices, was plainly obiter dictum due to the position subject of the controversy being mentioned in the By‐Laws. Thus, the Court held therein that the position was a corporate office, and that the determination of the rights and liabilities arising from the ouster from the position was an intra‐corporate controversy within the SEC’s jurisdiction.

“In Nacpil v. Intercontinental Broadcasting Corporation, which may be the more appropriate ruling, the position subject of the controversy was not expressly mentioned in the By‐Laws, but was created pursuant to a By‐Law enabling provision authorizing the Board of Directors to create other offices that the Board of Directors might see fit to create. The Court held there that the position was a corporate office, relying on the obiter dictum in Tabang.

“Considering that the observations earlier made herein show that the soundness of their dicta is not unassailable, Tabang and Nacpil should no longer be controlling.” [Underscoring supplied].

d. Elements to determine whether a dispute is intra‐corporate or not. In view of the declaration in Matling that the Tabang pronouncement is not controlling because it is too

sweeping and does not accord with reason, justice, and fair play, two (2) elements should be considered in order to determine whether a dispute constitutes an intra‐corporate controversy or not, namely:

31 Gurrea v. Lezama, [G.R. No. L-10556, April 30, 1958, 103 Phil. 553].



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(a) The status or relationship of the parties; and (b) The nature of the question that is the subject of their controversy.

e. The status of an employee (who rose from the ranks) as director and stockholder does not automatically convert his dismissal into an intra‐corporate dispute.

According to Matling, the criteria for distinguishing between corporate officers who may be ousted from office at will, on one hand, and ordinary corporate employees who may only be terminated for just cause, on the other hand, do not depend on the nature of the services performed, but on the manner of creation of the office. In the case of respondent in Matling, he was supposedly at once an employee, a stockholder, and a Director of Matling. The circumstances surrounding his appointment to office must be fully considered to determine whether the dismissal constituted an intra‐corporate controversy or a labor termination dispute. Another consideration is whether his status as Director and stockholder had any relation at all to his appointment and subsequent dismissal as Vice President for Finance and Administration.

Obviously enough, the respondent in Matling was not appointed as Vice President for Finance and Administration because of his being a stockholder or Director of Matling. He had started working for Matling on September 8, 1966, and had been employed continuously for 33 years until his termination on April 17, 2000, first as a bookkeeper, and his climb in 1987 to his last position as Vice President for Finance and Administration had been gradual but steady, as the following sequence indicates: 1966‐Bookkeeper; 1968‐Senior Accountant; 1969‐Chief Accountant; 1972‐Office Supervisor; 1973‐Assistant Treasurer; 1978‐Special Assistant for Finance; 1980‐Assistant Comptroller; 1983‐Finance and Administrative Manager; 1985‐sst. Vice President for Finance and Administration; and 1987 to April 17, 2000‐Vice President for Finance and Administration. Even though he might have become a stockholder of Matling in 1992, his promotion to the position of Vice President for Finance and Administration in 1987 was by virtue of the length of quality service he had rendered as an employee of Matling. His subsequent acquisition of the status of Director/stockholder had no relation to his promotion. Besides, his status of Director/stockholder was unaffected by his dismissal from employment as Vice President for Finance and Administration.

f. A case of an employee who rose from the ranks to become a corporate officer at the time of his dismissal still treated as a regular employee.

In Prudential Bank and Trust Company v. Reyes, [G.R. No. 141093, February 20, 2001], it was held that respondent Assistant Vice‐President who rose from the ranks was a regular employee and is thus entitled to security of tenure; that is, her services may be terminated only for a just or authorized cause. It was established by evidence that she started her employment with the bank when she was appointed Accounting Clerk on July 14, 1963. From that position, she rose to become supervisor. Then in 1982, she was appointed Assistant Vice‐President which she occupied until her illegal dismissal on July 19, 1991. Petitioner bank’s contention that she merely holds an elective position and that, in effect, she is not a regular employee is belied by the nature of her work and her length of service therewith.

g. A corporate officer may also be an employee whose dismissal may vest jurisdiction on the Labor Arbiter. A corporate officer may also be, at the same time, an employee, as held in Rural Bank of Coron [Palawan], Inc.

v. Cortes, [G.R. No. 164888, December 6, 2006]. While, indeed, respondent was the Corporate Secretary of the Rural Bank of Coron, she was also its Financial Assistant and the Personnel Officer of the two other petitioner corporations. The case of Mainland Construction Co., Inc. v. Movilla, [320 Phil, 353 (1995)], instructs that a corporation can engage its corporate officers to perform services under a circumstance which would make them employees. The Labor Arbiter has thus jurisdiction over respondent’s complaint.

h. Transfer of jurisdiction from SEC to regular courts under R. A. No. 8799. Under Section 5 [5.2.] of Republic Act No. 8799 [Securities Regulation Code], the jurisdiction of the Securities

and Exchange Commission (SEC) over all cases enumerated under Section 5 of Presidential Decree No. 902‐A has been transferred to the courts of general jurisdiction or the appropriate Regional Trial Court (RTC). The Supreme Court, in the exercise of its authority, may designate the RTC branches that shall exercise jurisdiction over these cases.

i. Claims for benefits and damages in intra‐corporate cases are cognizable by the regular courts. Any monetary claims being asserted by a corporate officer who is not a mere employee such as unpaid salaries,

commissions, separation pay and backwages, including claims for vacation and sick leaves, 13th month pay, Christmas bonus, medical expenses, car expenses, and other benefits, are not simple labor problems but matters that come within the area of corporate affairs and management, and are, in fact, corporate controversies in contemplation of the Corporation Code and, therefore, the jurisdiction thereover is lodged with the regular courts and not with the Labor Arbiter.32

8.2. JURISDICTION OVER CASES INVOLVING EMPLOYEES OF GOVERNMENT‐OWNED AND/OR CONTROLLED CORPORATIONS.

a. General principles. According to Feliciano v. Commission on Audit, [G.R. No. 147402, January 14, 2004, 419 SCRA 363], there are

two (2) classes of corporations recognized under the 1987 Constitution. The first refers to private corporations created under a general law; the second refers to government‐owned or controlled corporations created by special charters.

32 Okol v. Slimmers World International, G.R. No. 160146, Dec. 11, 2009; Lozon v. NLRC, G.R. No. 107660, Jan. 02, 1995, 240 SCRA 1; Espino v. NLRC, G.R. Nos. 109642-43, Jan. 5, 1995.



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It is now well‐entrenched that the hiring and firing of employees of government owned and/or controlled corporations without original charters are covered by the Labor Code while those with original charters are basically governed by the Civil Service Law, rules and regulations.33

b. Jurisdiction over dismissal of employee for offenses committed while employed by a government‐owned corporation but discovered after it was privatized.

The 2010 case of Luzviminda Ang v. Philippine National Bank, [G.R. No. 178762, June 16, 2010], presents the unique issue of which agency has jurisdiction over petitioner‐employee’s illegal dismissal case since she was dismissed based on offenses which she committed during her employment in respondent PNB while it was still a government‐owned corporation but which were discovered when she was rehired after respondent PNB was privatized. At the time she committed the offenses, the jurisdiction thereover was with the Civil Service Commission (CSC) since respondent bank was a government‐owned corporation, but at the time the offenses were discovered, respondent bank has already been privatized and, therefore, the jurisdiction over the issue of legality or illegality of her dismissal belongs to the Labor Arbiter under the Labor Code.

c. Specific cases.

Casino Labor Association v. CA. [G.R. No. 141020, June 12, 2008]. – In resolving the issue of whether or not the NLRC has jurisdiction over the employer‐employee relationship in Philippine Amusement & Gaming Corporation (PAGCOR), Philippine Casino Operators Corporation (PCOC) and Philippine Special Services Corporation (PSSC), the Supreme Court made the definitive ruling that the respondent corporations were created by an original charter. Consequently, they fall under the jurisdiction of the Civil Service Commission and not the Department of Labor and Employment.

Postigo v. Philippine Tuberculosis Society, Inc., [G.R. No. 155146, January 24, 2006]. –The respondent was incorporated on March 11, 1960 as a non‐profit, benevolent and non‐stock corporation under the Corporation Code. Having been created under the general corporation law instead of a special charter, it was held that respondent is a private and not a government corporation. This notwithstanding the fact that its employees are covered by the GSIS. Extant on the records is the respondent’s admission that although its employees are compulsory members of the GSIS, said employees are not governed by the Civil Service Law but by the Labor Code.

Duty Free Philippines v. Mojica, [G.R. No. 166365, September 30, 2005] – Petitioner DFP was created under Executive Order No. 46 on September 4, 1986 primarily to augment the service facilities for tourists and to generate foreign exchange and revenue for the government. In order for the government to exercise direct and effective control and regulation over the tax and duty free shops, their establishment and operation were vested in the Ministry (now Department) of Tourism (DOT), through its implementing arm, the Philippine Tourism Authority (PTA). All the net profits from the merchandising operations of the shops accrued to the DOT. Accordingly, since DFP is under the exclusive authority of the PTA, it follows that its officials and employees are likewise subject to the Civil Service Law, rules and regulations.

Camporedondo v. NLRC, [G.R. No. 129049, August 6, 1999]. ‐ The Supreme Court ruled that the Philippine National Red Cross (PNRC) is a government‐owned or controlled corporation with its own charter.

BLISS Development Corporation Employees Union (BDCEU) ‐ FDTU Sentro ng Demokratikong Manggagawa (SDM) v. Hon. Pura Ferrer‐Calleja, [G.R. No. 80887, September 30, 1994]. ‐ The Bliss Development Corporation (BDC) is a government‐owned or controlled corporation without an original charter. Hence, the unions or labor organizations therein existing are not covered by Executive Order No. 180 (Providing Guidelines for the Exercise of the Right to Organize of Government Employees, Creating a Public Sector Labor‐Management Council, and for Other Purposes) which became effective on June 01, 2007. They are not required to register under Section 7 of said law as a pre‐condition for filing a petition for certification election.

Boy Scouts of the Philippines v. NLRC, [G.R. No. 80767, April 22, 1991]. ‐ Complaints for illegal dismissal and unfair labor practice lodged by employees against their employer, Boy Scouts of the Philippines (BSP) which was created under Commonwealth Act No. 111 for the educational, civic and social development of the youth, fall outside of the jurisdiction of the Labor Arbiter. BSP is both a “government‐controlled corporation with an original charter” and an instrumentality of the government, despite the fact that its funds are derived principally from membership dues and property rentals.

Trade Unions of the Philippines and Allied Services v. National Housing Corporation, [G.R. No. 49677, May 4, 1989, 173 SCRA 33]. ‐ Employees of the National Housing Corporation (NHC) which was organized in 1959 under Executive Order No. 399, otherwise known as the “Uniform Charter of Government Corporations” (January 1, 1951), are covered by the Labor Code, NHC being a government‐owned and/or controlled corporation without an original charter. There is, therefore, no impediment to the holding of a certification election among the workers of NHC. (See also Juco v. NLRC, G. R. No. 98107, Aug. 18, 1997, 277 SCRA 528).

University of Life Foundation v. Bureau of Labor Relations, [G.R. No. 85050, April 12, 1989]. ‐ The University of Life Foundation is a government‐owned and controlled corporation without an original charter, it having been organized

33 Zamboanga City Water District v. Buat, G.R. No. 104389, May 27, 1994.



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under the Corporation Code. Thus, when the Bureau of Labor Relations assumed jurisdiction over the petition for certification election filed by the union, it acted in accordance with applicable law and latest jurisprudence on the matter.

Lumanta v. NLRC, [G.R. No. 82819, February 8, 1989]. ‐ Food Terminal, Inc. (FTI) is a government‐owned and controlled corporation without original charter, hence, it is the Department of Labor and Employment, and not the Civil Service Commission, which has jurisdiction over the dispute arising from the employment of the petitioners and that, consequently, the terms and conditions of such employment are governed by the Labor Code and not by the Civil Service Law, rules and regulations.

8.3. JURISDICTION OVER DISPUTES INVOLVING AN ALIEN PARTY.

To illustrate ruling case law on this subject, the case of Pakistan International Airlines Corporation v. Ople, [G.R. No. 61594, September 28, 1990], is in point. In this case, two contracts of employment were executed in Manila between Pakistan International Airlines Corporation and two Filipino flight attendants. Paragraph 10 of the contracts embodies the stipulation, among others, that the terms thereof shall be construed and governed by the laws of Pakistan and only the courts of Karachi, Pakistan shall have jurisdiction to consider any matter arising out of or under the agreement. Prior to the expiration of the contracts, the services of the two Filipino flight attendants were terminated. They jointly filed a complaint for illegal dismissal. One of the issues raised is which law should apply and which court has jurisdiction over the dispute.

The Supreme Court, in holding that the Philippine law should apply and that the Philippine court has jurisdiction, declared that petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which, firstly, specifies the law of Pakistan as the applicable law of the agreement and, secondly, lays the venue for settlement of any dispute arising out of or in connection with the agreement “only [in] courts of Karachi, Pakistan.” The first clause of paragraph 10 cannot be invoked to prevent the application of Philippine labor laws and regulations to the subject matter of this case, i.e., the employer‐employee relationship between petitioner PIA and private respondents. The relationship is much affected with public interest and that the otherwise applicable Philippine laws and regulations cannot be rendered illusory by the parties agreeing upon some other law to govern their relationship. Neither may petitioner invoke the second clause of paragraph 10, specifying the Karachi courts as the sole venue for the settlement of disputes between the contracting parties. Even a cursory scrutiny of the relevant circumstances of this case will show the multiple and substantive contacts between law and Philippine courts, on the one hand, and the relationship between the parties, upon the other. The contract was not only executed in the Philippines, it was also performed here, at least partially. Private respondents are Philippine citizens and residents, while petitioner, although a foreign corporation, is licensed to do business (and is actually doing business in the Philippines) and hence, is a resident in the Philippines. Lastly, private respondents were based in the Philippines in between their assigned flights to the Middle East and Europe. All the above contracts point to the Philippine courts and administrative agencies as the proper forum for the resolution of the contractual disputes between the parties. Under these circumstances, paragraph 10 of the employment agreement cannot be given effect so as to oust Philippine agencies and courts of the jurisdiction vested upon them by Philippine law. Finally, and in any event, the petitioner PIA did not undertake to plead and prove the contents of Pakistan law on the matter. It must, therefore, be presumed that the applicable provisions of the law of Pakistan are the same as the applicable provisions of Philippine law.

8.4. JURISDICTION OVER LABOR CASES INVOLVING ENTITIES IMMUNE FROM SUIT.

a. Principle of immunity from suit as applied to labor cases. Immunity is necessary to assure unimpeded performance of the functions of international organizations. The

purpose is “to shield the affairs of international organizations, in accordance with international practice, from political pressure or control by the host country to the prejudice of member States of the organization, and to ensure the unhampered performance of their functions.”34

Southeast Asian Fisheries Development Center v. Acosta, [G.R. Nos. 97468‐70, Sept. 2, 1993, 226 SCRA 49]. In this case, the Supreme Court, in upholding the principle of immunity, cited with approval the opinion of the

then Minister of Justice, thus: “One of the basic immunities of an international organization is immunity from local jurisdiction, i.e., that it is immune from the legal writs and processes issued by the tribunals of the country where it is found. The obvious reason for this is that the subjection of such an organization to the authority of the local courts would afford a convenient medium thru which the host government may interfere in its operations or even influence or control the policies and decisions of the organization; besides, such subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its member‐states.”

Department of Foreign Affairs v. NLRC, [G.R. No. 113191, September 18, 1996, 262 SCRA 39, 43‐44]. This case involves an illegal dismissal case filed against the Asian Development Bank (ADB), it was ruled that

said entity enjoys immunity from legal process of every form and, therefore, the suit against it cannot prosper. And this immunity extends to its officers who also enjoy immunity in respect of all acts performed by them in their official capacity. The Charter and the Headquarters Agreement granting these immunities and privileges to the ADB are treaty covenants and commitments voluntarily assumed by the Philippine government which must be respected.

34 See Lasco, infra; International Catholic Migration Commission v. Calleja, G.R. No. 85750, Sept. 28, 1990, 190 SCRA 130.



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Lasco v. United Nations Revolving Fund for Natural Resources Exploration [UNRFNRE], [G.R. Nos. 109095‐109107, February 23, 1995]. This involves an illegal dismissal case filed against the respondent which is a specialized agency of the United

Nations, the said immunity rule was asserted and reiterated by the Supreme Court. In dismissing the case, the High Court said that being a member of the United Nations and a party to the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations, the Philippine government adheres to the doctrine of immunity granted to the United Nations and its specialized agencies. Both treaties have the force and effect of law.

b. Exception to the rule. In United States v. Hon. Rodrigo, [G.R. No. 79470, February 26, 1990, 182 SCRA 644, 660], where it was held

that when the function of the foreign entity otherwise immune from suit partakes of the nature of a proprietary activity, such as the restaurant services offered at John Hay Air Station undertaken by the United States Government as a commercial activity for profit and not in its governmental capacity, the case for illegal dismissal filed by a Filipino cook working therein is well within the jurisdiction of Philippine courts. The reason is that by entering into the employment contract with the cook in the discharge of its proprietary functions, it impliedly divested itself of its sovereign immunity from suit.

c. Estoppel does not confer jurisdiction over an immune entity. An entity immune from suit cannot be estopped from claiming such diplomatic immunity since estoppel does

not operate to confer jurisdiction to a tribunal that has none over a cause of action.35

8.5. DOCTRINE OF FORUM NON CONVENIENS.

a. Rationale behind the doctrine. Under the international law principle of forum non conveniens, a Philippine court or agency may assume

jurisdiction over the case if it chooses to do so provided the following requisites concur: (1) That the Philippine court is one to which the parties may conveniently resort; (2) That the Philippine court is in a position to make an intelligent decision as to the law and the facts; and (3) That the Philippine court has or is likely to have power to enforce its decision.36

Pacific Consultants International Asia, Inc. v. Schonfeld, [G.R. No. 166920, February 19, 2007]. Petitioners insisted on the application of this principle since the respondent is a Canadian citizen and was a repatriate. In rejecting petitioners’ contention, the Supreme Court cited the following reasons that do not warrant the application of the said principle:

1. The Labor Code does not include forum non conveniens as a ground for the dismissal of the complaint. 2. The propriety of dismissing a case based on this principle requires a factual determination; hence, it is properly

considered as a defense.

The Manila Hotel Corp. and Manila Hotel International Limited v. NLRC, [G.R. No. 120077, October 13, 2000]. This principle was applied in this case. Private respondent Marcelo Santos was an overseas worker employed as

a printer in a printing press in the Sultanate of Oman when he was directly hired by the Palace Hotel, Beijing, People’s Republic of China to work in its print shop. Later, he was terminated due to retrenchment occasioned by business reverses brought about by the political upheaval in China (referring to the Tiananmen Square incident) which severely affected the hotel’s operations. When the case was filed in 1990, petitioner Manila Hotel Corporation (“MHC”) was still a government‐owned and controlled corporation duly organized and existing under the laws of the Philippines; while petitioner Manila Hotel International Company, Limited (“MHICL”) was a corporation duly organized and existing under the laws of Hong Kong. MHC is an “incorporator” of MHICL, owning 50% of its capital stock. By virtue of a “management agreement” with the Palace Hotel (Wang Fu Company Limited), MHICL trained the personnel and staff of the said hotel in Beijing, China.

In holding that the NLRC was a seriously inconvenient forum, the Supreme Court noted that the main aspects of the case transpired in two foreign jurisdictions and the case involves purely foreign elements. The only link that the Philippines has with the case is that the private respondent employee (Marcelo Santos) is a Filipino citizen. The Palace Hotel and MHICL are foreign corporations. Consequently, not all cases involving Filipino citizens can be tried here. Respondent employee was hired directly by the Beijing Palace Hotel, a foreign employer, through correspondence sent to him while he was working at the Sultanate of Oman. He was hired without the intervention of the POEA or any authorized recruitment agency of the government. Hence, the NLRC is an inconvenient forum given that all the incidents of the case ‐ from the time of recruitment, to employment to dismissal ‐ occurred outside the Philippines. The inconvenience is compounded by the fact that the proper defendants, the Palace Hotel and MHICL are not nationals of the Philippines. Neither are they “doing business in the Philippines.” Likewise, the main witnesses, Mr. Shmidt (General Manager of the Palace Hotel) and Mr. Henk (Palace Hotel’s Manager) are non‐residents of the Philippines.

Neither can an intelligent decision be made as to the law governing the employment contract as such was perfected in foreign soil. This calls to fore the application of the principle of lex loci contractus (the law of the place where the contract was made). It must be noted that the employment contract was not perfected in the Philippines. Private respondent employee signified his acceptance thereof by writing a letter while he was in the Sultanate of Oman. This letter was sent to the Palace Hotel in the People’s Republic of China. Neither can the NLRC determine the facts

35 Ebro III v. NLRC, G.R. No. 110187, Sept. 4, 1996, 261 SCRA 399. 36 Bank of America, NT&SA, Bank of America International, Ltd. v. CA, [448 Phil. 181, 196 (2003)] and Communication Materials and Design, Inc. v. CA, [G.R. No. 102223, Aug. 22, 1996, 260 SCRA 673, 695],



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surrounding the alleged illegal dismissal as all acts complained of took place in Beijing, People’s Republic of China. The NLRC was not in a position to determine whether the Tiananmen Square incident truly adversely affected operations of the Palace Hotel as to justify respondent employee’s retrenchment.

Even assuming that a proper decision could be reached by the NLRC, such would not have any binding effect against the employer, the Palace Hotel, which is a corporation incorporated under the laws of China and was not even served with summons. Jurisdiction over its person was not acquired. This is not to say that Philippine courts and agencies have no power to solve controversies involving foreign employers. Neither could it be said that the Supreme Court does not have power over an employment contract executed in a foreign country. If the respondent employee were an “overseas contract worker”, a Philippine forum, specifically the POEA, not the NLRC, would protect him. He is not an “overseas contract worker” a fact which he admits with conviction.

Philippine National Bank v. Cabansag, [G.R. No. 157010, June 21, 2005] Respondent was hired by the Singapore branch of petitioner‐bank while she was a tourist in Singapore in 1998.

Petitioner is a private banking corporation organized and existing under the laws of the Philippines, with principal offices at the PNB Financial Center, Roxas Boulevard, Manila. At that time, the Branch Office has two (2) types of employees: (a) expatriates or the regular employees hired in Manila and assigned abroad including Singapore; and (b) locally (directly) hired. She applied for and was hired as Branch Credit Officer. After her 3‐month probationary period, she was terminated. Subsequently, she filed a complaint before the Labor Arbiter. On appeal to the Supreme Court, one of the issues presented was whether or not the Labor Arbiter has jurisdiction over the instant controversy. The Supreme Court, in answering this issue in the affirmative, ruled that the Labor Arbiter has jurisdiction because the issue here involves the termination of an overseas Filipino worker (OFW). While she may have been directly hired in Singapore by petitioner, however, respondent likewise applied for and secured an Overseas Employment Certificate from the POEA through the Philippine Embassy in Singapore. The Certificate declared her a bona‐fide contract worker in Singapore. Thus, even assuming arguendo that she was considered at the start of her employment as a “direct hire” governed by and subject to the laws, common practices and customs prevailing in Singapore, she subsequently became a contract worker or an OFW who was covered by Philippine labor laws and policies upon certification by the POEA. At the time her employment was illegally terminated, she already possessed the POEA Employment Certificate. Moreover, petitioner admits that it is a Philippine corporation doing business through a branch office in Singapore. Significantly, respondent’s employment by its Singapore branch office had to be approved by the president of the bank whose principal offices were in Manila. This circumstance militates against petitioner’s contention that respondent was “locally hired”; and totally “governed by and subject to the laws, common practices and customs” of Singapore, not of the Philippines. Instead, with more reason does this fact reinforce the presumption that respondent falls under the legal definition of migrant worker, in this case, one deployed in Singapore. Hence, petitioner cannot escape the application of Philippine laws or the jurisdiction of the NLRC and the Labor Arbiter.

Sim v. NLRC, [G.R. No. 157376, October 2, 2007] Citing the said ruling in PNB v. Cabansag, the High Court noted a palpable error in the Labor Arbiter’s

disposition of the case, which was affirmed by the NLRC, with regard to the issue on jurisdiction. It held that it was wrong for the Labor Arbiter to dismiss the case for lack of jurisdiction under its holding that “labor relations system in the Philippines has no extra‐territorial jurisdiction”; that “it is limited to the relationship between labor and capital within the Philippines”; and that “since complainant was hired and assigned in a foreign land, although by a Philippine corporation, it follows that the law that governs their relationship is the law of the place where the employment was executed and her place of work or assignment.”

The petitioner here is Corazon Sim who was initially employed by Equitable PCI‐Bank (respondent) in 1990 as Italian Remittance Marketing Consultant to its Frankfurt Representative Office. Eventually, she was promoted to the position of Manager until September 1999, when she received a letter from Remegio David ‐‐ the Senior Officer, European Head of PCIBank, and Managing Director of PCIB‐ Europe ‐‐ informing her that she was being dismissed due to loss of trust and confidence based on alleged mismanagement and misappropriation of funds. According to the Supreme Court, the Labor Arbiter has jurisdiction not only on the basis of Article 217 of the Labor Code but under Section 10 of Republic Act No. 8042, or the “Migrant Workers and Overseas Filipinos Act of 1995,” as well as Section 62 of the Omnibus Rules and Regulations Implementing R.A. No. 8042. Under these provisions, it is clear that Labor Arbiters have original and exclusive jurisdiction over claims arising from employer‐employee relations, including termination disputes involving all workers, among whom are overseas Filipino workers. (Id.).

8.6. JURISDICTION OVER LABOR CASES INVOLVING PRIESTS AND MINISTERS.

a. Cases over which Labor Arbiters and NLRC have jurisdiction. The fact that a case involves as parties thereto the church and its religious minister does not ipso facto give the

case a religious significance. Simply stated, what is involved in a labor case, say for illegal dismissal, is the relationship of the church, as an employer, and the minister, as an employee ‐ a purely secular matter not related to the practice of faith, worship or doctrines of the church. Hence, Labor Arbiters may validly exercise jurisdiction over said labor case.

Austria v. Hon. NLRC and Cebu City Central Philippines Union Mission Corporation of the Seventh Day Adventist, [G.R. No. 124382, August 16, 1999]

the minister was not excommunicated or expelled from the membership of the church but was terminated from employment based on the grounds cited in Article 282 of the Labor Code. Indeed, the matter of terminating an employee which is purely secular in nature is different from the ecclesiastical act of expelling a member from the



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religious congregation. As such, the State, through the Labor Arbiter and the NLRC, has the right to take cognizance of the case to determine whether the church, as employer, rightfully exercised its management prerogative to dismiss the religious minister as its employee.

b. Ecclesiastical affair, meaning. An ecclesiastical affair involves the relationship between the church and its members and relates to matters of

faith, religious doctrines, worship and governance of the congregation. To be concrete, examples of these so‐called ecclesiastical affairs to which the State cannot meddle, are proceedings for excommunication, ordination of religious ministers, administration of sacraments and other activities with attached religious significance.

8.7. EFFECT OF SUSPENSION OF PAYMENT OF DEBTS (REHABILITATION RECEIVERSHIP) ON JURISDICTION IN LABOR PROCEEDINGS.

a. Jurisdiction is lodged with RTC. The jurisdiction over petition for suspension of payment is lodged with the Regional Trial Court.37 Although the jurisdiction of the SEC over rehabilitation and suspension of payments cases was transferred to

the Regional Trial Courts pursuant to

b. Receivership or liquidation of business, effect on jurisdiction. A stay order issued consequent to the approval of a rehabilitation receivership simply suspends all actions for

claims against a corporation undergoing rehabilitation; it does not work to oust a court of its jurisdiction over a case properly filed before it. The pendency of the rehabilitation proceedings does not affect the Court’s jurisdiction to resolve the case, but merely suspends the execution of its decision.38

c. The suspension embraces all claims and all phases of the suit, including execution. The suspension of all actions covers: 1. all claims against the corporation which is undergoing rehabilitation receivership, whether for damages

founded on a breach of contract of carriage, labor cases, collection suits or any other claims of a pecuniary nature. No exception in favor of labor claims is mentioned in the law.39

2. all phases of the suit, be it before the trial court or any tribunal or before the Supreme Court. No other action may be taken, including the rendition of judgment during the state of suspension. It must be stressed that what are automatically stayed or suspended are the proceedings of a suit and not just the payment of claims during the execution stage after the case has become final and executory. Once the process of rehabilitation, however, is completed, the Court should proceed to complete the proceedings on the suspended actions.40

3. execution of decisions that are already final and executory may be stayed if the corporation has been placed under rehabilitation receivership.41

d. Execution of final decisions during the period of rehabilitation and suspension, null and void. The proceedings before the Labor Arbiter and the order and writ subsequently issued by the NLRC during the

period of rehabilitation receivership are all null and void.42

e. Duration of automatic stay has no limit. The suspension shall last up to the termination of the rehabilitation proceedings.43

Rubberworld (Phils.) Inc. v. NLRC, [G.R. No. 126773, April 14, 1999, 365 Phil. 273] The suspension of all actions for claims against petitioner does not expire after three (3) months. The law does

not provide for the duration of the automatic stay. Hence, the suspensive effect thereof has no time limit and remains in force as long as reasonably necessary to accomplish the purpose of the order.44

f. Remedy is to lodge the labor claims with the Rehabilitation Receiver; exception. Because of the suspension of proceedings, the remedy should be for the employee who claimed to have been

illegally dismissed, to lodge her claim before the duly‐appointed receiver.45

8.8. JURISDICTION OVER CASES OF OVERSEAS FILIPINO WORKERS (OFWs).

a. Conferment of jurisdiction over money claims of migrant workers under R. A. No. 8042, as amended by R.A. No. 10022.

Section 10 of Republic Act No. 8042, as amended, otherwise known as the “Migrant Workers and Overseas Filipinos Act of 1995” (approved on June 7, 1995), conferred original and exclusive jurisdiction upon Labor Arbiters, to hear and decide all claims arising from employer‐employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment, including claims for actual, moral, exemplary and other forms of damages.

b. Labor Arbiters may exercise jurisdiction even absent the employment relationship as when the OFW was not deployed abroad.

37 Section 5.2, R.A. No. 8799, [August 8, 2000]; Philippine Airlines, Inc. v. Philippine Airlines Employees Association [PALEA], G.R. No. 142399, June 19, 2007, Footnote 23. 38 De Castro v. Liberty Broadcasting Network, Inc., G.R. No. 165153, Aug 25, 2010; Negros Navigation Co., Inc. v. CA, G.R. No. 163156, Dec. 10, 2008, 573 SCRA 434, 455. 39 Philippine Airlines, Inc. v. Heirs of Zamora, G.R. No. 164267, Nov. 23, 2007. 40 Philippine Airlines, Inc. v. CA, G.R. No. 123238, July 11, 2005 [Resolution]. 41 Alemar’s Sibal & Sons, Inc. v. NLRC, [G. R. No. 114761, January 19, 2000]. 42 Lingkod Manggagawa sa Rubberworld, Adidas-Anglo v. Rubberworld [Phils.], Inc., [G.R. No. 153882, January 29, 2007] . 43 Section 11, in relation to Section 27, Rule 4 of the Interim Rules of Procedure on Corporate Rehabilitation. 44 See also BF Homes, Inc. v. CA, 190 SCRA 262, 269, Oct. 3, 1990; Tiangco v. Uniwide Sales Warehouse Club, Inc. [G.R. No. 168697, December 14, 2009]. 45 Clarion Printing House, Inc. v. NLRC, [G.R. No. 148372, June 27, 2005].



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The case of Santiago v. CF Sharp Crew Management, Inc., [G.R. No. 162419, July 10, 2007], enunciated that despite the absence of an employer‐employee relationship between petitioner and respondent, the NLRC has jurisdiction over petitioner’s complaint. The petitioner here was not deployed overseas after signing the contract for overseas employment. The jurisdiction of Labor Arbiters is not limited to claims arising from employer‐employee relationships. Based on Section 10 of R. A. No. 8042, Labor Arbiters have jurisdiction not only over money claims arising out of an employer‐employee relationship but also “by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damage xxx.” Considering that petitioner was not able to depart from the airport or seaport in the point of hire, the employment contract did not commence to be effective and no employer‐employee relationship was created between the parties. However, a distinction must be made between the perfection of the employment contract and the commencement of the employer‐employee relationship. The perfection of the contract, which in this case coincided with the date of execution thereof, occurred when petitioner and respondent agreed on the object and the cause, as well as the rest of the terms and conditions set forth therein. The commencement of the employer‐employee relationship would have taken place had petitioner been actually deployed from the point of hire. Thus, even before the start of any employer‐employee relationship, contemporaneous with the perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party. Thus, if the reverse had happened, that is, the seafarer failed or refused to be deployed as agreed upon, he would have been held liable for damages.

c. Monetary or non‐monetary claims; jurisdiction. All monetary claims cases that may be filed by an OFW falls under the original and exclusive jurisdiction of the Labor Arbiter. This includes claims for disability or death benefits. However, causes of action which do not refer to monetary claims under Section 10 of R.A. No. 8042 are required to be dismissed or referred by the Labor Arbiters to the appropriate agency.46 For example, violations of recruitment regulations certainly do not fall under the concept of “monetary claims.” The jurisdiction thereover belongs to the POEA.47

8.9. JURISDICTION OVER WAGE DISTORTION CASES.

a. In organized establishments. In establishments where there are existing CBAs or recognized collective bargaining unions, jurisdiction is

lodged with the Voluntary Arbitrator.48

b. In unorganized establishments. In establishments where there are no certified collective bargaining unions or existing CBAs, the Labor Arbiters

have jurisdiction is vested with Labor Arbiters.49

c. Wage distortion disputes made subject of notice of strike or lockout. Since wage distortion is not a proper ground to stage a strike or lockout, it should be referred to the Labor

Arbiter for adjudication.50

8.10. JURISDICTION OVER ENFORCEMENT OF LABOR STANDARDS LAWS.

a. Jurisdiction in cases under Article 128 of the Labor Code is vested with DOLE Regional Directors. Irrespective of the amount of the violation or claim unearthed in the course of inspection, whether the amount

thereof is below or above P5,000.00, the exercise by the DOLE Secretary of his visitorial and enforcement power under Article 128 [b] is not lost or affected thereby. Hence, the DOLE Regional Directors, being the duly authorized representatives of the DOLE Secretary, has jurisdiction over labor standards violations.

b. No forum‐shopping if employees, during the pendency of the case under Article 128, are dismissed and subsequently filed an illegal dismissal case with the Labor Arbiter.

In Consolidated Broadcasting System, Inc. v. Oberio, [G.R. No. 168424, June 8, 2007], the respondents at first filed an inspection case before the DOLE Regional Director. While the case was pending, respondents were dismissed and consequently filed an illegal dismissal case with the Labor Arbiter. It was held that such filing of the complaint for illegal dismissal does not constitute forum‐shopping. In cases where the complaint for violation of labor standard laws preceded the termination of the employee and the filing of the illegal dismissal case, it would not be in consonance with justice to charge the dismissed employees with engaging in forum‐shopping when the remedy available to them at the time their causes of action arose was to file separate cases before different fora.

8.11. JURISDICTION OVER CLAIMS OF DOMESTIC OR HOUSEHELPERS.

The Labor Arbiter retains jurisdiction over claims that may be filed by domestic or househelpers amounting to more than P5,000.00., despite the deletion of the phrase “cases involving household services” in paragraph 4 of Article 217 effected by Republic Act No. 6715.

8.12. JURISDICTION OVER ENFORCEMENT OF COMPROMISE AGREEMENTS.

46 Section 1, NLRC en banc Resolution No. 1-95, Series of 1995. 47 Philsa International Placement and Services Corporation v. Hon. Secretary of Labor and Employment, [G.R. No. 103144, April 4, 2001]. 48 Article 124, Labor Code, as amended by Section 3, Republic Act No. 6727; Section 7, Chapter II, Implementing Rules of Republic Act No. 6727; Section 1, Rule VII, Rules of Procedure on Minimum Wage Fixing issued by the National Wages and Productivity Commission on 04 June

1990. 49 Id. 50 Section 6 [c], Rule V, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases.



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Labor Arbiters have jurisdiction over the enforcement of compromise agreements when there is non‐compliance by any of the parties thereto pursuant to Article 227 of the Labor Code.51

8.13. JURISDICTION OVER CASES PROPERLY COGNIZABLE BY THE GRIEVANCE MACHINERY OR VOLUNTARY ARBITRATORS.

a. Original and exclusive jurisdiction of Grievance Machinery or Voluntary Arbitrators. Although the Labor Arbiters have original and exclusive jurisdiction to hear and decide the enumerated cases in

Article 217, one should not lose sight of the fact that under the amendatory provisions of R.A. No. 6715, the grievance machinery, under Article 260, has original and exclusive jurisdiction to adjust and resolve the following grievances:

1. those arising from the interpretation or implementation of the CBA; and 2. those arising from the interpretation or enforcement of company personnel policies. If the same are not settled within seven (7) calendar days from the date of their submission, they shall

automatically be referred to a Voluntary Arbitrator or panel of Voluntary Arbitrators who, under Article 261, have the original and exclusive jurisdiction to hear and decide all such unresolved grievances arising from the interpretation or implementation of the CBA and those arising from the interpretation or enforcement of company personnel policies.

This explains the last paragraph of Article 217 which provides that “(c)ases 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.” By so providing, Article 217 acknowledges in no uncertain terms the jurisdiction of the grievance machinery under Article 260 and that of the Voluntary Arbitrator or panel of Voluntary Arbitrators under Article 261 over these issues.

b. Failure to observe grievance procedure; effect. In Central Pangasinan Electric Cooperative, Inc. v. Macaraeg, [G.R. No. 145800, January 22, 2003], the parties

voluntarily agree to submit the issue of illegal dismissal for voluntary arbitration without passing through the grievance machinery. However, before the Supreme Court, this was raised as an issue. The Supreme Court ruled: “At the outset, we hold that the first issue raised in the petition pertaining to the alleged violation of the CBA grievance procedure is moot and academic. The parties’ active participation in the voluntary arbitration proceedings, and their failure to insist that the case be remanded to the grievance machinery, shows a clear intention on their part to have the issue of respondents’ illegal dismissal directly resolved by the Voluntary Arbitrator. We, therefore, find it unnecessary to rule on the matter in light of their preference to bring the illegal dismissal dispute to voluntary arbitration without passing through the grievance machinery.”

8.14. JURISDICTION OVER CASES INVOLVING COOPERATIVES.

a. Members of cooperatives are not employees. Members of a cooperatives are its owners. Issues on the termination of their membership with the cooperative

do not fall within the jurisdiction of the Labor Arbiters.52

b. Labor Arbiters have jurisdiction over illegal dismissal cases of employees of cooperatives. The rule is different with respect to the termination of employment of the employees of the cooperative. The

Labor Arbiters have jurisdiction thereover.

Perpetual Help Credit Cooperative, Inc. v. Faburada, [G.R. No. 121948, October 8, 2001] Petitioner in this case contends that the Labor Arbiter has no jurisdiction to take cognizance of the complaint of

private respondents (who are not members but employees of the cooperative) considering that they failed to submit their dispute to the grievance machinery. The Supreme Court, however, ruled that the Labor Arbiter has jurisdiction. There is no evidence that private respondents are members of petitioner cooperative and even if they are, the dispute is about payment of wages, overtime pay, rest day and termination of employment. Under Article 217 of the Labor Code, these disputes are within the original and exclusive jurisdiction of the Labor Arbiters.

San Miguel Corp. v. Semillano, [G.R. No. 164257, July 5, 2010] Petitioner asserted that the present case is outside the jurisdiction of the labor tribunals because respondent

Vicente Semillano is a member of the Alilgilan Multi‐Purpose Coop (AMPCO), not an employee of petitioner SMC. Petitioner is of the position that the instant dispute is intra‐cooperative in nature falling within the jurisdiction of the Arbitration Committee of the Cooperative Development Authority. AMPCO was contracted by petitioner to supply it with workers to perform the task of segregating bottles, removing dirt therefrom, filing them in designated places, loading and unloading the bottles to and from the delivery trucks, and to perform other tasks as may be ordered by SMC’s officers. Semillano, together with the other respondents, filed the complaint for regularization with petitioner SMC, contending that AMPCO was a mere labor‐only contractor. The High Court declared in this case that AMPCO was a labor‐only contractor and consequently pronounced that all the respondents, including Semillano, were regular employees of petitioner. On this issue of jurisdiction, the High Court ruled that the Labor Arbiter has jurisdiction because precisely, Semillano has joined the others in filing this complaint because it is his position that petitioner SMC is his true employer and liable for all his claims under the Labor Code. 8.15. JURISDICTION OVER CASES INVOLVING LOCAL WATER DISTRICTS.

51 Section 1 (i) of Rule V of the 2005 Revised Rules of Procedure of the NLRC. 52 Applicable to cooperatives organized under R.A. No. 6938, otherwise known as “The Cooperative Code of the Philippines.”



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In Hagonoy Water District v. NLRC, [G.R. No. 81490, August 31, 1988], it was declared that local water districts are quasi‐public corporations and, therefore, the dismissal of their employees are governed by the civil service laws, rules and regulations.

However, although the Labor Arbiter has no jurisdiction, the Supreme Court, in Zamboanga City Water District v. Buat, [G.R. No. 104389, May 27, 1994], did not allow petitioner to belatedly raise the issue of jurisdiction before it, considering that it never raised said issue before the Executive Labor Arbiter, the NLRC or even before the Supreme Court in another related case. In fact, it was petitioner itself which filed the complaint before the Executive Labor Arbiter and sought affirmative relief therefrom and participated actively in the proceedings therein. Although jurisdiction over strikes and dismissals of employees in local water districts is lodged not with the NLRC but with the Civil Service Commission, here, the petitioner is already estopped from assailing the jurisdiction of the NLRC and is, therefore, bound to respect all the proceedings therein.

8.16. JURISDICTION OVER CRIMINAL AND CIVIL ACTIONS ARISING FROM VIOLATIONS OF ARTICLE 241.

By express provision of Article 241 of the Labor Code, both criminal and civil liabilities arising from violations of the rights and conditions of membership in a labor organization enumerated in said Article shall continue to be under the jurisdiction of ordinary courts.53

This provision should be distinguished from Article 247 of the Labor Code which vests jurisdiction upon the Labor Arbiters over the civil aspect of unfair labor practice cases, including damages, attorney’s fees and other affirmative reliefs.54

8.17. JURISDICTION OVER QUASI‐DELICT OR TORT CASES.

Labor Arbiters have no jurisdiction over quasi‐delict or tort cases.

Tolosa v. NLRC, [G.R. No. 149578, April 10, 2003] A complaint was lodged with the Labor Arbiter but the Supreme Court ruled that the Labor Arbiter has no

jurisdiction over the case because it was established that the same was in the nature of an action based on a quasi‐delict or tort, it being evident that the issue presented therein involved the alleged gross negligence of the co‐employees (shipmates) of Captain Tolosa, the deceased husband of petitioner, with whom Captain Tolosa had no employer‐employee relationship.

8.18. JURISDICTION OVER CLAIMS OR COUNTER‐CLAIMS OF EMPLOYERS.

Bañez v. Valdevilla, [G.R. No. 128024, May 9, 2000, 331 SCRA 584] The jurisdiction of Labor Arbiters and the NLRC under Article 217 is comprehensive enough to include claims for

all forms of damages “arising from the employer‐employee relations.” By this clause, Article 217 should apply with equal force to the claim of an employer for actual damages against its dismissed employee, where the basis for the claim arises from or is necessarily connected with the fact of termination, and should be entered as a counter‐claim in the illegal dismissal case. This is in accord with paragraph 6 of Article 217 [a], which covers “all other claims, arising from employer‐employee relations.”

Domondon v. NLRC, [G.R. No. 154376, September 30, 2005, 471 SCRA 559] The private respondent‐employer was allowed to assert its counter‐claim for damages against petitioner‐

employee in the same case before the Labor Arbiter because it appears that the same arose out of the parties’ employer‐employee relations. It was declared therein that the Labor Arbiter has jurisdiction to take cognizance of said counter‐claim.

Philippine Rural Reconstruction Movement [PRRM] v. Pulgar, [G.R. No. 169227, July 5, 2010] A monetary claim of the employer which has not been asserted before the Labor Arbiter, cannot be belatedly

raised. The records in this case indicates that respondent employee (Pulgar), a manager of petitioner (PRRM), has not yet returned the money he took from the PRRM’s branch office – the Tayabas Bay Field Office (TBFO) – in Quezon Province which he deposited in his name. Unfortunately for PRRM, it never raised as an issue the money allegedly still in Pulgar’s custody in the proceedings before the Labor Arbiter, or even before the NLRC. The rule is well‐settled that points of law, theories, issues and arguments not adequately brought to the attention of the trial court need not be, and ordinarily will not be considered by a reviewing court as they cannot be raised for the first time on appeal because this would be offensive to the basic rules of fair play, justice and due process.

8.19. JURISDICTION OVER CONSTITUTIONALITY OF CBA PROVISIONS. Halagueńa v. Philippine Airlines, Inc., [G.R. No. 172013, October 2, 2009] The Labor Arbiter has no jurisdiction to decide the constitutionality of a CBA provision. It is the Regional Trial

Court which is possessed of that jurisdiction. Petitioners were employed as female flight attendants of respondent Philippine Airlines (PAL) on different dates

prior to November 22, 1996. They are members of the Flight Attendants and Stewards Association of the Philippines

53 Last paragraph, Article 241, Labor Code. 54 Article 247, Labor Code.



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(FASAP), a labor organization certified as the sole and exclusive bargaining representative of the flight attendants, flight stewards and pursers of respondent. On July 11, 2001, respondent and FASAP entered into a Collective Bargaining Agreement incorporating the terms and conditions of their agreement for the years 2000 to 2005, hereinafter referred to as PAL‐FASAP CBA. Section 144, Part A of the PAL‐FASAP CBA, provides that: “A. For the Cabin Attendants hired before 22 November 1996:

xxx “3. Compulsory Retirement “Subject to the grooming standards provisions of this Agreement, compulsory retirement shall be fifty-five (55) for females and sixty (60) for males. xxx.”

In a letter dated July 22, 2003, petitioners and several female cabin crews manifested that the aforementioned CBA provision on compulsory retirement is discriminatory, and demanded for an equal treatment with their male counterparts. This demand was reiterated in a letter by petitioners' counsel addressed to respondent demanding the removal of gender discrimination provisions in the coming re‐negotiations of the PAL‐FASAP CBA.

On July 29, 2004, petitioners filed a Special Civil Action for Declaratory Relief with Prayer for the Issuance of Temporary Restraining Order and Writ of Preliminary Injunction with the Regional Trial Court (RTC) of Makati City, Branch 147, docketed as Civil Case No. 04‐886, against respondent for the invalidity of Section 144, Part A of the PAL‐FASAP CBA.

In ruling that the RTC has jurisdiction, the Supreme Court observed that from the petitioners' allegations and relief prayed for in its petition, it is clear that the issue raised is whether Section 144, Part A of the PAL‐FASAP CBA is unlawful and unconstitutional. Here, the petitioners' primary relief in Civil Case No. 04‐886 is the annulment of Section 144, Part A of the PAL‐FASAP CBA, which allegedly discriminates against them for being female flight attendants. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC, pursuant to Section 19 (1) of Batas Pambansa Blg. 129, as amended. Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals.

The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the application of the Constitution, labor statutes, law on contracts and the Convention on the Elimination of All Forms of Discrimination Against Women, and the power to apply and interpret the constitution and CEDAW is within the jurisdiction of trial courts, a court of general jurisdiction.

In Georg Grotjahn GMBH & Co. v. Isnani, [G.R. No. 109272, August 10, 1994, 235 SCRA 216, 221], the Court held that not every dispute between an employer and employee involves matters that only Labor Arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi‐judicial powers. The jurisdiction of Labor Arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer‐employee relationship which can only be resolved by reference to the Labor Code, other labor statutes, or their collective bargaining agreement.

Not every controversy or money claim by an employee against the employer or vice‐versa is within the exclusive jurisdiction of the Labor Arbiter. Actions between employees and employer where the employer‐employee relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court. Here, the employer‐employee relationship between the parties is merely incidental and the cause of action ultimately arose from different sources of obligation, i.e., the Constitution and CEDAW.

Thus, where the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the labor arbiter and the NLRC. 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.

If the regular courts are divested of jurisdiction over the case, then which tribunal or forum shall determine the constitutionality or legality of the assailed CBA provision?

The Court holds that the grievance machinery and voluntary arbitrators do not have the power to determine and settle the issues at hand. They have no jurisdiction and competence to decide constitutional issues relative to the questioned compulsory retirement age. Their exercise of jurisdiction is futile, as it is like vesting power to someone who cannot wield it.

Although the CBA provides for a procedure for the adjustment of grievances, such referral to the grievance machinery and thereafter to voluntary arbitration would be inappropriate to the petitioners, because the union and the management have unanimously agreed to the terms of the CBA and their interest is unified.

8.20. TAX DEDUCTIONS FROM BENEFITS DUE AN EMPLOYEE, COGNIZABLE BY THE LABOR ARBITER AS A MONEY CLAIM.

Santos v. Servier Philippines, Inc., [G.R. No. 166377, November 28, 2008] Raised here as an issue is whether the Labor Arbiter has jurisdiction to rule on the legality of the deductions

made by respondent employer from petitioner’s total retirement benefits for taxation purposes. Both the Labor Arbiter and the NLRC ruled that this issue is beyond their jurisdiction. The Supreme Court, however, ruled that contrary to the



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Labor Arbiter and NLRC’s conclusions, petitioner’s claim for illegal deduction falls within the tribunal’s jurisdiction. It is noteworthy that petitioner demanded the completion of her retirement benefits, including the amount withheld by respondent for taxation purposes. The issue of deduction for tax purposes is intertwined with the main issue of whether or not petitioner’s benefits have been fully given her. It is, therefore, a money claim arising from the employer‐employee relationship, which clearly falls within the jurisdiction of the Labor Arbiter and the NLRC.55

8.21. ISSUANCE BY RTC OF WRIT OF HABEAS DATA IN RELATION TO A LABOR CASE. Manila Electric Company v. Lim, [G.R. No. 184769, October 5, 2010] The poser in this case sought to be addressed by the ruling in this case is: “May an employee invoke the

remedies available under such writ where an employer decides to transfer her workplace on the basis of copies of an anonymous letter posted therein ─ imputing to her disloyalty to the company and calling for her to leave, which imputation it investigated but fails to inform her of the details thereof?” This was answered in the NEGATIVE.

Respondent Lim is an administrative clerk at petitioner Meralco. On June 4, 2008, an anonymous letter was posted at the door of the Metering Office of the Administration building of MERALCO Plaridel, Bulacan Sector, at which respondent is assigned, denouncing respondent. The letter reads:

“Cherry Lim: “MATAPOS MONG LAMUNIN LAHAT NG BIYAYA NG MERALCO, NGAYON NAMAN AY

GUSTO MONG PALAMON ANG BUONG KUMPANYA SA MGA BUWAYA NG GOBYERNO. KAPAL NG MUKHA MO, LUMAYAS KA RITO, WALANG UTANG NA LOOB….” Copies of the letter were also inserted in the lockers of MERALCO linesmen. Informed about it, respondent

reported the matter on June 5, 2008 to the Plaridel Station of the Philippine National Police. By reason of this anonymous letter, petitioner directed the transfer of respondent to its Alabang Sector in

Muntinlupa. Respondent objected to the transfer, claiming that the “punitive” nature of the transfer amounted to a denial of due process. She cited as reason the grueling travel from her residence in Pampanga to Alabang and back entails, as well as the violation of the provisions on job security of their Collective Bargaining Agreement (CBA). She thus requested for the deferment of the implementation of her transfer pending resolution of the issues she raised. Not receiving any response from petitioner, respondent filed a petition for the issuance of a writ of habeas data against petitioners before the Regional Trial Court (RTC) of Bulacan where she alleged that petitioners’ unlawful act and omission consisting of their continued failure and refusal to provide her with details or information about the alleged report which MERALCO purportedly received concerning threats to her safety and security amount to a violation of her right to privacy in life, liberty and security, correctible by habeas data. Respondent thus prayed for the issuance of a writ commanding petitioners to file a written return containing the following:

a) a full disclosure of the data or information about respondent in relation to the report purportedly received by petitioners on the alleged threat to her safety and security; the nature of such data and the purpose for its collection;

b) the measures taken by petitioners to ensure the confidentiality of such data or information; and c) the currency and accuracy of such data or information obtained. A TRO was issued by the RTC but petitioners moved for the dismissal of the petition and recall of the TRO on

the grounds that, inter alia, resort to a petition for writ of habeas data was not in order; and the RTC lacked jurisdiction over the case which properly belongs to the NLRC.

After due proceedings, the RTC issued a decision granting the prayers of respondent including the issuance of a writ of preliminary injunction directing petitioners to desist from implementing respondent’s transfer until such time that petitioners comply with the disclosures required. It justified its ruling by declaring that, inter alia, recourse to a writ of habeas data should extend not only to victims of extra‐legal killings and political activists but also to ordinary citizens, like respondent whose rights to life and security are jeopardized by petitioners’ refusal to provide her with information or data on the reported threats to her person. In ruling in favor of the petitioners, the Supreme Court reasoned:

“Respondent’s plea that she be spared from complying with MERALCO’s Memorandum directing her reassignment to the Alabang Sector, under the guise of a quest for information or data allegedly in possession of petitioners, does not fall within the province of a writ of habeas data.

“Section 1 of the Rule on the Writ of Habeas Data provides: ‘Section 1. Habeas Data. – The writ of habeas data is a remedy available

to any person whose right to privacy in life, liberty or security is violated or threatened by an unlawful act or omission of a public official or employee or of a private individual or entity engaged in the gathering, collecting or storing of data or information regarding the person, family, home and correspondence of the aggrieved party. (emphasis and underscoring supplied)’ “The habeas data rule, in general, is designed to protect by means of judicial complaint the

image, privacy, honor, information, and freedom of information of an individual. It is meant to provide a forum to enforce one’s right to the truth and to informational privacy, thus safeguarding the constitutional guarantees of a person’s right to life, liberty and security against abuse in this age of information technology.

55 See also Intercontinental Broadcasting Corporation [IBC[ v. Amarilla, [G.R. No. 162775, October 27, 2006, 505 SCRA 687].



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“It bears reiteration that like the writ of amparo, habeas data was conceived as a response, given the lack of effective and available remedies, to address the extraordinary rise in the number of killings and enforced disappearances. Its intent is to address violations of or threats to the rights to life, liberty or security as a remedy independently from those provided under prevailing Rules.

“Castillo v. Cruz, [G.R. No. 182165, November 25, 2009, 605 SCRA 628, 635], underscores the emphasis laid down in Tapuz v. del Rosario, [G. R. No. 182484, June 17, 2008, 554 SCRA 768, 784], that the writs of amparo and habeas data will NOT issue to protect purely property or commercial concerns nor when the grounds invoked in support of the petitions therefor are vague or doubtful. Employment constitutes a property right under the context of the due process clause of the Constitution. It is evident that respondent’s reservations on the real reasons for her transfer ‐ a legitimate concern respecting the terms and conditions of one’s employment ‐ are what prompted her to adopt the extraordinary remedy of habeas data. Jurisdiction over such concerns is inarguably lodged by law with the NLRC and the Labor Arbiters.

“In another vein, there is no showing from the facts presented that petitioners committed any unjustifiable or unlawful violation of respondent’s right to privacy vis‐a‐vis the right to life, liberty or security. To argue that petitioners’ refusal to disclose the contents of reports allegedly received on the threats to respondent’s safety amounts to a violation of her right to privacy is at best speculative. Respondent in fact trivializes these threats and accusations from unknown individuals in her earlier‐quoted portion of her July 10, 2008 letter as ‘highly suspicious, doubtful or are just mere jokes if they existed at all.’ And she even suspects that her transfer to another place of work ‘betray[s] the real intent of management]’ and could be a ‘punitive move.’ Her posture unwittingly concedes that the issue is labor‐related.”

9. SUMMARY OF OTHER ISSUES BEYOND JURISDICTION OF THE LABOR ARBITERS OR NLRC. In addition to the foregoing, other issues over which the Labor Arbiters or NLRC have no jurisdiction may be

summed up as follows: 1. Claims for Employees Compensation, Social Security, Medicare (now PhilHealth) and maternity benefits.56 2. Replevin intertwined with a labor dispute.57 3. Violation of training agreement.58 4. Claim for liquidated damages for breach of a contractual obligation, including the issue of liability in

suretyship.59 5. Sale of property being levied on execution having been done in bad faith.60 6. Contempt involving a judge of the regular court.61 7. Injunction filed by a third party with the regular court against the sheriff enforcing a decision in a labor

case.62 8. Claim of employee for cash prize offered under the Innovation Program of a company which, although

arising from employer‐employee relationship, requires the application of the general civil law on contracts.63

9. Action initiated by employer against an employee for sum of money and damages for cost of repair jobs made on an employee’s personal car as well as for the purchase price of parts and vehicles.64

10. Claims for commissions and certain reimbursements made by an independent contractor.65 11. Violations of labor laws which are penal in nature. Examples are illegal recruitment cases,66 or criminal

offenses or felonies committed in the course of strikes and lockouts.67 12. Insolvency proceedings in the enforcement of the workers’ preference ordained under Article 110 of the

Labor Code. 13. Exercise of equity jurisdiction to enjoin activities for purposes of compelling an employer to ignore a clear

mandate of the law.68 14. Administrative action against the licensee or holder of authority cognizable by the POEA which could

proceed independently from the criminal action.69 15. Review of recruitment violations and other related cases decided by the POEA. The Secretary of Labor and

Employment has exclusive appellate jurisdiction over these cases.70

56 Article 217 [6], Labor Code. 57 Basaya, Jr. v. Militante, G.R. No. L-75837, Dec. 11, 1987, 156 SCRA 299. 58 Singapore Airlines v. Hon. Ernani Cruz Pano, G.R. No. L-47739, June 22, 1983; 122 SCRA 671. 59 Singapore Airlines v. Hon. Ernani Cruz Pano, G.R. No. L-47739, June 22, 1983; 122 SCRA 671. 60 Asian Footwear & Rubber Corporation v. Soriano, G.R. Nos. 71695-703, May 20, 1986, 142 SCRA 49. 61 Tolentino v. Inciong, G.R. No. L-36385, July 25, 1979, 91 SCRA 563. 62 Philippine Association of Free Labor Unions [PAFLU] v. Salas, G.R. No. 39084, Feb. 23, 1988, 158 SCRA 53. 63 San Miguel Corporation v. NLRC, G.R. No. 80774, May 31, 1988, 161 SCRA 719. 64 Molave Motor Sales, Inc. v. Laron, G.R. No. 65377, May 28, 1984, 129 SCRA 485. 65 Sara v. Agarrado, G.R. No. L-73199, Oct. 26, 1988, 166 SCRA 625. 66 Section 10, Rule X, Book II, Rules and Regulations Governing Overseas Employment 67 Article 264, Labor Code. 68 Bulletin Publishing Corporation v. Sanchez, G.R. No. 74425, Oct. 7, 1986, 144 SCRA 678. 69 Section 12, Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995. 70 Section 1, Rule IV, Book VI, Rules and Regulations Governing Overseas Employment.



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============================== TOPIC UNDER THE SYLLABUS: 1. Labor Arbiter b. Effect of self-executing order of reinstatement on backwages ============================== Relevant Provision: Article 223, Labor Code 1. REINSTATEMENT ASPECT OF LABOR ARBITER’S DECISION, SELF‐EXECUTORY OR IMMEDIATELY EXECUTORY EVEN

PENDING APPEAL.

a. Only the reinstatement ordered by the Labor Arbiter is self‐executory. It must be stressed at the outset that it is only the reinstatement ordered by the Labor Arbiter which is self‐

executory (or immediately executory) in character. If the reinstatement is ordered by the NLRC on appeal, or the Court of Appeals or the Supreme Court, it is not self‐executory and a writ of execution is necessary to implement and execute it.

Article 223 of the Labor Code is clear that the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal.

b. 2 options of the employer. The employer has 2 options both of which speaks of reinstatement: 1. Actual reinstatement (reinstatement to former position under the same terms and conditions prevailing

prior to his dismissal or separation or if position is no longer available, to a substantially equivalent position); or

2. Payroll reinstatement. It must be noted that the employer has no way of preventing reinstatement.. The posting of a bond by the

employer shall not stay the execution for reinstatement. c. Effect if employer does not reinstate. In case the employer failed to reinstate (actually or in the payroll) the employee ordered reinstated by the Labor Arbiter, the prevailing rule is enunciated in the en banc decision in Garcia v. Philippine Airlines, Inc., [G.R. No. 164856, January 20, 2009].

Test under the Garcia doctrine. Under the said case of Garcia, the test to determine the liability of the employer (who did not reinstate the

employee pending appeal) to pay the wages of the dismissed employee covering the period from the time he was ordered reinstated by the Labor Arbiter to the reversal of the Labor Arbiter’s decision either by the NLRC, the Court of Appeals or the High Court, is two‐fold, to wit:

(1) There must be actual delay or the fact that the order of reinstatement pending appeal was not executed prior to its reversal; and

(2) The delay must not be due to the employer’s unjustified act or omission. If the delay is due to the employer’s unjustified refusal, the employer may still be required to pay the salaries notwithstanding the reversal of the Labor Arbiter’s decision.

In other words, after the Labor Arbiter’s decision is reversed by a higher tribunal, the employee may be barred

from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer.

In this Garcia case, while respondent Philippine Airlines (PAL) was undergoing rehabilitation receivership, an illegal dismissal case was filed by petitioners against respondent PAL which was decided by the Labor Arbiter in their favor. On appeal, the NLRC reversed the ruling of the Labor Arbiter and held that their dismissal was valid. Resolving the issue of whether petitioners may collect their wages during the period between the Labor Arbiter’s order of reinstatement pending appeal and the NLRC decision overturning that of the Labor Arbiter, now that respondent PAL has terminated and exited from rehabilitation proceedings, the Supreme Court held that PAL is not obligated to pay such wages in the light of the pendency of the rehabilitation proceedings which effectively prevented it from complying with the reinstatement ordered by the Labor Arbiter.

d. The rulings in Roquero and Genuino have been modified. As a result of the Garcia doctrine, the rulings in Roquero v. Philippine Airlines, [G.R. No. 152329, April 22,

2003] and Genuino v. NLRC, [G.R. Nos. 142732‐33, December 4, 2007] have been expressly modified. In Roquero, the dismissal of the employee was held valid by the Labor Arbiter. On appeal to the NLRC, the

Labor Arbiter’s decision was reversed and consequently, the dismissed employee was ordered reinstated. The employee did not appeal from that decision of the NLRC but filed a motion for the issuance of a writ of execution of the order of



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reinstatement. The Labor Arbiter granted the motion but the employer refused to comply with the said order on the ground that it has filed a Petition for Review before the Supreme Court. Subsequently, the dismissal of the employee was held valid by the Supreme Court. But it held that the unjustified refusal of the employer to reinstate the dismissed employee entitles the latter to the payment of his salaries effective from the time the employer failed to reinstate him despite the issuance of a writ of execution. Unless there is a restraining order issued, it is ministerial upon the Labor Arbiter to implement the order of reinstatement. In the case at bar, no restraining order was granted. Thus, it was mandatory on the employer to actually reinstate the dismissed employee or reinstate him in the payroll. Having failed to do so, the former must pay the latter the salaries he is entitled to, as if he was reinstated, from the time of the decision of the NLRC until the finality of the decision of the Supreme Court.

The ruling in Roquero [supra] was qualified by the Supreme Court in its ruling in the 2007 case of Genuino v. NLRC, [G.R. Nos. 142732‐33, December 4, 2007], on the issue of whether the dismissed employee who is reinstated in the payroll and not actually to his former position has the obligation to refund what he has received as and by way of salaries during his payroll reinstatement if and when his dismissal is held valid and legal on appeal. In this case, the Supreme Court had taken the view that “(i)f the decision of the Labor Arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid, then the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries he/she received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her employer under existing laws, collective bargaining agreement provisions, and company practices. However, if the employee was reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation received for actual services rendered without need of refund. Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her dismissal is based on a just cause, then she is not entitled to be paid the salaries stated in item no. 3 of the fallo of the September 3, 1994 NLRC Decision.”

Consequent to the Garcia doctrine, the Supreme Court reaffirmed the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. It settles the view that the Labor Arbiter's order of reinstatement is immediately executory and the employer has to either re‐admit them to work under the same terms and conditions prevailing prior to their dismissal, or to reinstate them in the payroll, and that failing to exercise the options in the alternative, employer must pay the employee’s salaries. The spirit of the rule on reinstatement pending appeal animates the proceedings once the Labor Arbiter issues the decision containing an order of reinstatement. The immediacy of its execution needs no further elaboration. Reinstatement pending appeal necessitates its immediate execution during the pendency of the appeal, if the law is to serve its noble purpose. At the same time, any attempt on the part of the employer to evade or delay its execution, as observed in Panuncillo71 and as what actually transpired in Kimberly Clark,72 Composite Enterprises, Inc.,73 Air Philippines74 and Roquero [supra], should not be countenanced.

Aboc v. Metropolitan Bank and Trust Company, [G.R. Nos. 170542‐43, December 13, 2010] This case answers the lingering question on the entitlement of an employee to reinstatement wages and benefits during the time when he was under payroll reinstatement as ordered by the Labor Arbiter until the reversal of the Labor Arbiter’s ruling by the NLRC on appeal. In this case, the employee was reinstated in the payroll upon order of the Labor Arbiter who found his dismissal illegal. On appeal, the NLRC set aside and reversed the decision of the Labor Arbiter but ordered respondent Metrobank to pay Aboc reinstatement wages from July 12, 1999 (date of decision of the Labor Arbiter) to September 16, 1999; salary increase from January 2000 to June 2001; Christmas bonus for the year 2000; 13th month pay differential for the year 2000; and salary differential for July and August 2001. The NLRC explained that petitioner Aboc was entitled to receive these monetary awards because he was included in the payroll by respondent Metrobank as he was ordered reinstated by the Labor Arbiter. This ruling was affirmed by the Court of Appeals.

In affirming the said ruling on the monetary awards, the Supreme Court ruled that they are warranted under Article 223 of the Labor Code and jurisprudence. It cannot be denied that respondent Metrobank opted to reinstate petitioner Aboc in its payroll. Since Metrobank chose payroll reinstatement for Aboc, he then became a reinstated regular employee. This means that he was restored to his previous position as a regular employee without loss of seniority rights and other privileges appurtenant thereto. His payroll reinstatement put him on equal footing with the other regular Metrobank employees insofar as entitlement to the benefits given under the CBA is concerned.

The fact that the decision of the Labor Arbiter was reversed on appeal has no controlling significance. The rule is that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until final reversal by the higher court.75

e. The principle of reinstatement pending appeal as well as the Roquero doctrine (now Garcial doctrine) apply only in case there is a finding of illegality of dismissal by the Labor Arbiter.

In the 2009 case of Lansangan v. Amkor Technology Philippines, Inc., [G.R. No. 177026, January 30, 2009], it was held that the principle of reinstatement pending appeal as well as the Roquero doctrinal ruling find application only

71 Panuncillo v. CAP Philippines, Inc., [G.R. No. 161305, February 9, 2007]. 72 Kimberly Clark (Phils), Inc. v. Facundo, [G.R. No. 144885, July 26, 2006 (Unsigned Resolution)]. 73 Composite Enterprises, Inc. v. Caparoso, [G.R. No. 159919, August 8, 2007, 529 SCRA 470]. 74 Air Philippines Corp. v. Zamora, [G.R. No. 148247, August 7, 2006]. 7575 Citing College of the Immaculate Conception v. NLRC & Atty. Marius F. Carlos, Ph.D., G.R. No. 167563, March 22, 2010.



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in case there is a finding of illegality of dismissal by the Labor Arbiter. The petitioners in this case were found by the Labor Arbiter to have committed a dishonest act and, therefore, ruled that their dismissal was valid and legal but he ordered their reinstatement to their former positions without backwages “as a measure of equitable and compassionate relief” owing mainly to petitioners’ prior unblemished employment records, show of remorse, harshness of the penalty and defective attendance monitoring system of respondent.

Based on the foregoing facts, the Supreme Court noted that Roquero, as well as Article 223 of the Labor Code on which the appellate court also relied, finds no application in the present case. Article 223 concerns itself with an interim relief, granted to a dismissed or separated employee while the case for illegal dismissal is pending appeal, as what happened in Roquero. It does not apply where there is no finding of illegal dismissal, as in the present case. Petitioners are not entitled to full backwages as their dismissal was not found to be illegal. Agabon v. NLRC, [G.R. No. 158693, Nov. 17, 2004], so states ‐ payment of backwages and other benefits is justified only if the employee was unjustly dismissed.

f. The concept of reinstatement pending appeal under Article 223 contemplates all kinds of illegal dismissal cases.

In the 2010 case of C. Alcantara & Sons, Inc. v. CA, [G.R. No. 155109, September 29, 2010], the CA denied the reinstatement of the ordinary union members who participated in the illegal strike but whose dismissal was found to have been illegally effected since they did not commit any illegal acts in the course of the strike. The CA justified its denial by ruling that the reinstatement pending appeal provided under Article 223 contemplates illegal dismissal or termination cases and not cases under Article 264 (Prohibited Activities [in Strikes and Lockouts]). The Supreme Court, however, pronounced that this perceived distinction does not find support in the provisions of the Labor Code. The grounds for termination under Article 264 are based on prohibited acts that employees could commit during a strike. On the other hand, the grounds for termination under Articles 282 to 284 are based on the employee’s conduct in connection with his assigned work. Still, Article 217, which defines the powers of Labor Arbiters, vests in the latter jurisdiction over all termination cases, whatever be the grounds given for the termination of employment. Consequently, Article 223, which provides that the decision of the Labor Arbiter reinstating a dismissed employee shall immediately be executory pending appeal, cannot but apply to all terminations irrespective of the grounds on which they are based. ============================== TOPIC UNDER THE SYLLABUS: 1. Labor Arbiter c. Requirements to perfect appeal to NLRC ==============================

Relevant Provision: Article 223, Labor Code

1. PRELIMINARY CONSIDERATIONS.

a. Appeal, defined. The term “appeal” refers to the elevation by an aggrieved party to an agency vested with appellate authority of

any decision, resolution or order disposing the principal issues of a case rendered by an agency vested with original jurisdiction, undertaken by filing a memorandum of appeal.76 .

Appeal is not a constitutional right but a mere statutory privilege. Hence, parties who seek to avail of it must comply with the statutes or rules allowing it.77 However, while the right to appeal is a statutory and not a natural right, it is nonetheless an essential part of our judicial system. Courts are, therefore, advised to proceed with caution so as not to deprive a party of the right to appeal. Litigants should have the amplest opportunity for a proper and just disposition of their cause ‐ free, as much as possible, from the constraints of procedural technicalities.78

b. Motion for reconsideration of a Labor Arbiter’s decision, not allowed. A motion for reconsideration is unavailing as a remedy against a decision of the Labor Arbiter. The Labor

Arbiter should treat the said motion as an appeal to the NLRC.79

Millennium Erectors Corporation v. Magallanes, [G.R. No. 184362, November 15, 2010] Petitioner here contends that the Labor Arbiter’s decision dismissing the complaint for illegal dismissal had

become final and executory following respondent’s failure to perfect his appeal to the NLRC, maintaining that the requirements for perfection of an appeal and for proof of service are not mere rules of technicality which may easily be set aside. The Supreme Court, however, ruled that the NLRC did not err in treating respondent’s motion for reconsideration as an appeal, the presence of some procedural flaws including the lack of verification and proof of service notwithstanding.

76 Section 1 [b], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 77 Philux, Inc. v. NLRC, G.R. No. 151854, Sept. 3, 2008. 78 Novelty Philippines, Inc. v. CA, G.R. No. 146125, Sept. 17, 2003; Labad v. University of Southeastern Philippines, G.R. No. 139665, Aug. 9, 2001, 362 SCRA 510. 79 Reyes v. Maxim’s Tea House, G.R. No. 140853, Feb. 27, 2003; Cayena v. NLRC, G.R. No. 76137, Feb. 18, 1991.



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c. “Petition for Relief” treated as appeal. Petitioner company in New Pacific Timber & Supply Co., Inc. v. NLRC, [G.R. No. 124224, March 17, 2000],

contends that the appeal initiated by private respondents denominated as “Petition for Relief” is not the proper mode of seeking a review of the decision rendered by the Labor Arbiter. According to the petitioner, nowhere in the Labor Code or in the NLRC Rules of Procedure is there such a pleading. Rather, the remedy of a party aggrieved by an unfavorable ruling of the Labor Arbiter is to appeal said judgment to the NLRC. The Supreme Court disagreed with this contention and allowed the said pleading to be treated as a valid appeal in the interest of substantial justice. And this, notwithstanding the fact that the said “Petition for Relief” was filed way beyond the 10‐calendar day reglementary period.

2. GROUNDS FOR APPEAL TO THE COMMISSION (NLRC).

a. Grounds for appeal under Article 223. The appeal to the NLRC may be entertained only on any of the following grounds: a. If there is a prima facie evidence of abuse of discretion on the part of the Labor Arbiter; b. If the decision, order or award was secured through fraud or coercion, including graft and corruption; c. If made purely on questions of law; and/or d. If serious errors in the findings of fact are raised which, if not corrected, would cause grave or irreparable damage or injury to the appellant.80

b. NLRC has certiorari power. The first ground above regarding prima facie evidence of abuse of discretion on the part of the Labor Arbiter is

actually an exercise of certiorari power by the NLRC. The case of Triad Security & Allied Services, Inc. v. Ortega, [G.R. No. 160871, February 6, 2006], expressly recognizes this certiorari power of the NLRC.81

3. PERFECTION OF APPEAL.

a. Requisites for perfection of appeal. The following are the requisites for perfection of an appeal to the NLRC from the decision, order or award of

the Labor Arbiter:82 a. The appeal should be filed within the reglementary period; b. The appeal should be verified by appellant himself in accordance with Section 4, Rule 7 of the Rules of Court; c. There should be proof of payment of the required appeal fee; d. A cash or surety bond should be posted if judgment involves monetary award; e. The appeal should be accompanied by a memorandum of appeal in three (3) legibly typewritten copies which shall state the grounds relied upon and the arguments in support thereof, the relief prayed for, a statement of the date when the appellant received the appealed decision, resolution or order and a certificate of non‐forum shopping; and

f. There should be proof of service of the appeal memorandum on the other party.83

b. Effect of perfection of appeal. Once an appeal is filed, the Labor Arbiter loses jurisdiction over the case. All pleadings and motions pertaining

to the appealed case should thereafter be addressed to and filed with the Commission.84 The only exception is on the reinstatement aspect of the Labor Arbiter’s decision. The perfection of the appeal

shall not affect his continued exercise of jurisdiction over this particular aspect of his decision. Resultantly, he shall continue to have jurisdiction over the enforcement and execution of his reinstatement order even at the time when the appeal from his decision was timely filed and duly perfected. The pendency of the appeal before the Commission (NLRC) does not affect his jurisdiction to so implement his reinstatement order.

c. Perfection of appeal, mandatory and jurisdictional. Perfection of an appeal in the manner and within the reglementary period prescribed by law is not only

mandatory but jurisdictional. It is not only a mere technicality. Non‐compliance with such legal requirements is fatal. Failure to perfect an appeal as required by the Rules has the effect of rendering the judgment final and executory, hence, unappealable.85

Consequently, the NLRC has no authority to entertain an appeal which was not perfected, much less to reverse the decision of the Labor Arbiter.86

3.1. REGLEMENTARY PERIOD TO PERFECT THE APPEAL.

a. Reglementary period is ten (10) calendar days. The shortened period of ten (10) days fixed by Article 223 contemplates calendar days and not working days.87

80 Articles 129 and 223, Labor Code; Section 2[d], Rule VI, 2005 Revised Rules of Procedure of the NLRC. 81 See also Metro Drug Distribution, Inc. v. Metro Drug Corporation Employees Association-FFW, [G.R. No. 142666, September 26, 2005]. 82 As provided under Section 4[a], Rule VI of the 2005 Revised Rules of Procedure of the NLRC. 83 Bristol Myers Squibb [Phils.], Inc. v. Viloria, G.R. No. 148156, Sept. 27, 2004. 84 Section 9, Rule VI Ibid.. 85 Delgado v. CA, G.R. No. 137881, Dec. 21, 2004; Corporate Inn Hotel v. Lizo, G.R. No. 148279, May 27, 2004; Sapitan v. JB Line Bicol Express, Inc., G.R. No. 163775, Oct. 19, 2007. 86 Gaudia v. NLRC, G.R. No. 109371, Nov. 18, 1999. 87 RJL Martinez Fishing Corporation v. NLRC, G.R. Nos. L-63550-51, Jan. 31, 1984.



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b. When to reckon start of running of the 10‐calendar day reglementary period. The ten (10) calendar day reglementary period to appeal should be counted from the date of receipt of the

decision, award or order by the counsel or representative of record and not from the date of receipt thereof by the party.88

c. Effect of failure to appeal within the 10‐calendar day reglementary period. Failure to bring an appeal within the period prescribed by the rules renders the judgment appealed from final

and executory by operation of law.89 Consequently, the prevailing party is entitled as a matter of right, to a writ of execution and the issuance

thereof becomes a ministerial duty which may be compelled through the remedy of mandamus.90 d. Some principles on reglementary period. Some noteworthy principles affecting the 10‐calendar day reglementary period are as follows: 1. Saturdays, Sundays and legal holidays included in reckoning the 10‐calendar day reglementary period.91 2. Date of mailing of appeal memorandum is the date of its filing.92 3. Exceptions to the 10‐calendar day period rule.

i. 10th day falling on a Saturday.93 ii. 10th day falling on a Sunday or holiday.94 iii. NLRC’s power to waive defect in substance or form under Article 218 [c].95 iv. Reliance on erroneous notice of decision.96 v. Appeal from decisions of Labor Arbiters on third‐party claims – ten (10) working days.97 vi. Appeal from decisions of Labor Arbiters in direct contempt cases – five (5) calendar days.98 vii. Allowing the appeal for some compelling reasons and to subserve justice.99

4. Motion for extension of time to perfect an appeal, not allowed.100 5. Motion for extension of time to file memorandum of appeal, not allowed.101 6. Motion for extension of time to file appeal bond, not allowed.102 e. Rationale behind the rule on non‐extension of period to appeal. To extend the period of appeal is to prolong the resolution of the case, a circumstance which would give the

employer the opportunity to wear out the energy and meager resources of the worker to the point that he would be constrained to give up for less than what he deserves in law.103

f. Reglementary period of appeal from decisions of DOLE Regional Directors under Article 129 of the Labor Code.

The reglementary period within which appeal to the NLRC may be instituted by any or both parties from the decisions, awards or orders of the DOLE Regional Directors or his duly authorized Hearing Officers is five (5) calendar days from receipt thereof.104

If the 5th day falls on a Saturday, Sunday or a holiday, the last day to perfect the appeal shall be the next working day.105 3.2. APPEAL FEE.

a. Appeal fee, amount thereof. The appellant is required to pay an appeal fee of P150.00 to the Regional Arbitration Branch or Regional Office,

and the official receipt of such payment should be attached to the records of the case.106 b. Latest rule: payment of appeal docket fee is both mandatory and jurisdictional. 1. The 2010 case of Saint Louis University, Inc. v. Cobarrubias, [G.R. No. 187104, August 3, 2010], re‐

asserted the rule that the payment of appeal docket fee is both mandatory and jurisdictional. This case involves an appeal from the decision of a Voluntary Arbitrator to the Court of Appeals (CA) under Rule 43 of the Rules of Court. In the 2000 case of Workers of Antique Electric Cooperative, Inc. v. NLRC, [G.R. No. 120062, June 8, 2000], it was ruled that an appeal is perfected only when there is proof of payment of the appeal fee. This has been the consistent ruling in a plethora of case.

88 Section 6, Rule III, 2005 Revised Rules of Procedure of the NLRC; Flexo Mfg. Corp. v. NLRC, G.R. No. L-55971, Feb. 28, 1985, 135 SCRA 145; Lynx Industries Contractor, Inc. v. Tala, G.R. No. 164333, Aug. 24, 2007. 89 Chronicle Securities Corporation v. NLRC, G.R. No. 157907, Nov. 25, 2004. 90 Henry Clyde Abbott v. NLRC, G.R. No. L-65173, Oct. 27, 1986, 145 SCRA 206. 91 Judy Philippines, Inc. v. NLRC, G. R. No. 111934, April 29, 1998; SM Agri and General Machineries v. NLRC, G.R. No. 74806, Jan. 9, 1989. 92 GSIS v. NLRC, [G.R. No. 180045, November 17, 2010]. 93 Judy Philippines, Inc. v. NLRC, [G.R. No. 111934, April 29, 1998] 94 Serrano v. CA, G.R. No. 139420, Aug. 15, 2001; See also Remington Industrial Sales Corp. v. Castaneda, G.R. Nos. 169295-96, Nov. 20, 2006. 95 New Pacific Timber & Supply Co., Inc. v. NLRC, G. R. No. 124224, March 17, 2000. 96 Firestone Tire and Rubber Company of the Philippines v. Lariosa, [G.R. No. L-70479, February 27, 1987]. 97 Section 2, Rule VI, NLRC Manual on Execution of Judgment. 98 Article 218 [d], as amended by Republic Act No. 6715, March 21, 1989; Section 1, Rule IX, 2005 Revised Rules of Procedure of the NLRC. 99 Chronicle Securities Corporation v. NLRC, [G.R. No. 157907, November 25, 2004]; Manaban v. Sarphil Corporation, [G.R. No. 150915, April 11, 2005]. 100 ; Bristol Myers Squibb [Phils.], Inc. v. Viloria, G.R. No. 148156, Sept. 27, 2004. 101 Bunagan v. Sentinel Watchman & Protective Agency, Inc., [G.R. No. 144376, September 13, 2006]; Section 3, Rule VI, Old Rules of Procedure of the NLRC; Section 1, Rule VI, 2005 Revised Rules of Procedure of the NLRC 102 Lamzon v. NLRC, [G.R. No. 113600, May 28, 1999, 307 SCRA 665; 367 Phil. 169, 177]. 103 Globe General Services and Security Agency v. NLRC, G.R. No. 106477, Oct. 23, 1995. 104 Article 129, Labor Code; Section 1, Rule VI, 2005 Revised Rules of Procedure of the NLRC. 105 Section 1, Rule VI, Ibid.; Bristol Myers Squibb [Phils.], Inc. v. Viloria, G.R. No. 148156, Sept. 27, 2004. 106 Section 5, Rule VI, 2005 Revised Rules of Procedure of the NLRC.



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c. Exceptions to the rule on payment of appellate court docket fees. The following are recognized exceptions to the strict observance of the rule on docket fees: (1) most persuasive

and weighty reasons; (2) to relieve a litigant from an injustice not commensurate with his failure to comply with the prescribed procedure; (3) good faith of the defaulting party by immediately paying within a reasonable time from the time of the default; (4) the existence of special or compelling circumstances; (5) the merits of the case; (6) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; (7) a lack of any showing that the review sought is merely frivolous and dilatory; (8) the other party will not be unjustly prejudiced thereby; (9) fraud, accident, mistake or excusable negligence without the appellant's fault; (10) peculiar, legal and equitable circumstances attendant to each case; (11) in the name of substantial justice and fair play; (12) importance of the issues involved; and (13) exercise of sound discretion by the judge, guided by all the attendant circumstances.107

3.3. APPEAL BOND; REQUIRED ONLY IN CASE OF MONETARY AWARD.

a. Perfection of appeal in case of monetary judgment. An appeal from a decision involving a monetary award may be perfected only upon the posting of a cash or

surety bond.108 The logical purpose of an appeal bond is to insure during the period of appeal against any occurrence that

would defeat or diminish recovery under the judgment if it is subsequently affirmed. It also validates and justifies, at least on a prima facie basis, an interpretation that would limit the amount of the bond to the aggregate of the sums awarded other than in the concept of moral and exemplary damages. This is consistent with the State’s constitutional mandate to afford full protection to labor in order to forcefully and meaningfully underscore labor as a primary social and economic force.109

b. Some principles on bond requirement. 1. Bond should be posted within the 10‐calendar day reglementary period.110 2. If a party failed to perfect his appeal by the non‐payment of the appeal bond within the 10‐calendar day

period provided by law, the decision of the Labor Arbiter becomes final and executory upon the expiration of the said reglementary period.111

3. The posting of bond is both mandatory and jurisdictional; non‐posting thereof is fatal.112 4. Remedy of employee in case employer failed to post bond is to file a motion to dismiss appeal.113 5. Award of damages and attorney’s fees excluded from the computation of bond.114 6. No monetary award, no appeal bond required.115 7. Labor Arbiter’s decisions or orders should state the amount awarded.116 8. If the amount of the monetary award is not included in the judgment, the appeal bond is not required to be

posted.117 9. In case of conflict between the body and the fallo of the decision, the latter should prevail.118 10. Bond is not required to entertain a motion for reconsideration.119 11. Surety bond must be issued by an accredited bonding company.120 12. The bond posted should be in effect until final disposition of the case.121 13. Real property bond in lieu of cash or surety bond allowed.122 14. Posting of a bank certification or a bank guarantee, not sufficient compliance with the bond

requirement.123 15. Long Christmas holiday, not an excuse for late filing of bond.124

c. Motion to reduce bond, requisites. The general rule is that the bond that should be posted should be equivalent to the monetary award of the

Labor Arbiter.125 A motion to reduce bond, however, is allowed provided that the following conditions are complied with, to wit: (1) The motion to reduce bond should be based on meritorious grounds; and (2) A reasonable amount in relation to the monetary award should be posted by the appellant.126

d. Some principles on Motion to Reduce Bond. 1. The motion to reduce bond must be filed within the reglementary period.127 2. The filing of a motion to reduce bond even during the reglementary period does not stay the finality of the

decision.128

107 Saint Louis University, Inc. v. Cobarrubias, G.R. No. 187104, Aug. 3, 2010, citing Lim v. Delos Santos, G.R. No. 172574, July 31, 2009, 594 SCRA 607, 616-617. 108 Borja Estate v. Spouses R. Ballad, G.R. No. 152550, June 8, 2005, 498 Phil. 694. 109 Forever Security & General Services v. Flores, G.R. No. 147961, Sept. 7, 2007. 110 Gaudia v. NLRC, G.R. No. 109371, Nov. 18, 1999; Lamzon v. NLRC, G.R. No. 113600, May 28, 1999, 307 SCRA 665; 367 Phil. 169, 177. 111 Santos v. Velarde, G.R. No. 140753, April 30, 2003; Borja Estate v. Spouses Ballad G.R. No. 152550, June 8, 2005, 459 SCRA 657, 667. 112 Quiambao v. NLRC, G.R. No. 91935, March 4, 1996, 324 Phil. 455; Aquino v. NLRC, G.R. No. 98108, Sept. 3, 1993, 226 SCRA 76. 113 Diaz v. Nora, G.R. No. 89324, Oct. 11, 1990. 114 Navarro v. NLRC, [G.R. No. 116464, March 1, 2000]. 115 Aba v. NLRC, G.R. No. 122627, July 28, 1999. 116 Section 14, Rule V, 2005 Revised Rules of Procedure of the NLRC. 117 Vergara v. NLRC, G.R. No. 117196, Dec. 5, 1997, 282 SCRA 486. 118 Mendoza, Jr. v. San Miguel Foods, Inc., [G.R. No. 158684, May 16, 2005]. 119 Cadalin v. Hon. CA, [G.R. No. 168923, November 28, 2008]. 120 Section 6, Rule VI, 2005 Rules of Procedure of the NLRC. 121 Section 6, Rule VI of the 2005 Rules of Procedure of the NLRC; AFP General Insurance Corp. v. Molina, [G.R. No. 151133, June 30, 2008]. 122 UERM-Memorial Medical Center v. NLRC, [G.R. No. 110419, March 3, 1997, 269 SCRA 70]. 123 Cordova v. Keysa’s Boutique, [G.R. No. 156379, September 16, 2005]. 124 Mary Abigail’s Food Services, Inc. v. CA, [G.R. No. 140294, May 9, 2005]. 125 Ramirez v. Hon. CA, G.R. No. 182626, Dec. 4, 2009. 126 Section 6, Rule VI of the 2005 Revised Rules of Procedure of the NLRC. 127 Coral Point Development Corporation v. NLRC, G. R. No. 129761, Feb. 28, 2000; Times Transportation Company, Inc. v. Sotelo, G.R. No. 163786, Feb. 16, 2005; Stolt-Nielsen Marine Services, Inc. v. NLRC, G.R. No. 147623, Dec. 13, 2005. 128 Coral Point Development Corporation v. NLRC, supra; Stolt-Nielsen Marine Services, Inc. v. NLRC, G.R. No. 147623, Dec. 13, 2005.



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3. The full amount of the monetary award should still be posted even if the appellant has filed a motion to reduce bond.129

4. If neither bond nor motion to reduce bond is filed within the reglementary period, the decision becomes final and executory.130

5. Reduction of bond, not a matter of right.131 6. Liberal construction and relaxation of rule on posting of appeal bond.132

(a) there was substantial compliance with the Rules; (b) surrounding facts and circumstances constitute meritorious grounds to reduce the bond; (c) a liberal interpretation of the requirement of an appeal bond would serve the desired objective of

resolving controversies on the merits; or (d) the appellants, at the very least, exhibited their willingness and/or good faith by posting a partial bond

during the reglementary period.133 6. The failure to post the bond must be caused by a third party, not by the appellant himself.134 7. Alternative remedy is to pay partial appeal bond while motion to reduce bond is pending with the NLRC.135 8. Partial bond posted must not be inadequate.136 9. The partial bond must be posted during the reglementary period.137 10. Posting of bond together with the motion for reconsideration of NLRC decision held valid.138 11. NLRC may grant additional time to post bond after denial of motion to reduce bond.139 12. Motion for extension of time to file bond must be filed within the reglementary period.140 13. Inaccuracy in the computation of monetary awards must be proved.141 14. Financial difficulties or financial incapacity, not sufficient grounds to reduce the bond.142 15. Cooperatives are not exempted from posting bond.143 16. Monetary award in foreign currency necessarily requires that the peso equivalent be computed at the

official conversion rate on the date of the rendition of the decision. Hence, anything less would inevitably result in an inadequate or deficient bond and would necessarily result in the non‐perfection of an appeal before the NLRC.144

3.4. MEMORANDUM OF APPEAL.

a. Memorandum of appeal, requisites. The appeal should be accompanied by a memorandum of appeal in three (3) legibly typewritten copies which

shall state the grounds relied upon and the arguments in support thereof, the relief prayed for, a statement of the date when the appellant received the appealed decision, resolution or order and a certificate of non‐forum shopping with proof of service on the other party of such memorandum of appeal.145

b. Some principles on Memorandum of Appeal. 1. Lack of verification in an appeal, not fatal nor jurisdictional. 146 2. Mere notice of appeal, insufficient. 147 3. Only complainants who signed the memorandum of appeal are deemed to have appealed the Labor Arbiter’s decision.148

4. Failure to allege material date in the appeal memorandum, not fatal. 149 5. Failure to attach a certificate of non‐forum shopping in the appeal memorandum, fatal.150 6. Belated filing of the certificate of non‐forum shopping, fatal.151

3.5. PROOF OF SERVICE TO ADVERSE PARTY.

a. Effect of failure to serve a copy to adverse party. While Section 4 [a], Rule VI of the 2005 Revised Rules of Procedure of the NLRC requires proof of service on the

other party of the appeal, non‐compliance therewith, however, will present no obstacle to the perfection of the appeal; nor does it amount to a jurisdictional defect to the NLRC’s taking cognizance thereof.152

It has long been settled that mere failure to serve a copy of a memorandum of appeal upon the opposing party does not bar the NLRC from entertaining an appeal.153

129 Ramirez v. Hon. CA, G.R. No. 182626, Dec. 4, 2009. 130 Globe General Services and Security Agency v. NLRC, [G.R. No. 106477, October 23, 1995, 249 SCRA 408, 414-415]. 131 Nicol v. Footjoy Industrial Corp., G.R. No. 159372, July 27, 2007. 132 Intertranz Container Lines, Inc. v. Bautista, [G.R. No. 187693, July 13, 2010]. 133 Forever Security & General Services v. Flores, G.R. No. 147961, Sept. 7, 2007; Ciudad Fernandina v. Court of Appeals, G.R. No. 166594, July 20, 2006, 495 SCRA 807. 134 Mary Abigail’s Food Services, Inc. v. CA, G.R. No. 140294, May 9, 2005. 135 Rosewood Processing, Inc. v. NLRC, [G.R. Nos. 116476-84, May 21, 1998, 290 SCRA 408; 352 Phil. 1013]; Pasig Cylinder Mfg., Corp. v. Rollo, [G.R. No. 173631, September 8, 2010]. 136 Sapitan v. JB Line Bicol Express, Inc., [G.R. No. 163775, October 19, 2007], 137 Colby Construction and Management Corp. v. NLRC, [G.R. No. 170099, November 28, 2007]. 138 Postigo v. Philippine Tuberculosis Society, Inc. (PTSI), [G.R. No. 155146, January 24, 2006, 479 SCRA 628, 635]. 139 Buenaobra v. Lim King Guan, [G. R. No. 150147, January 20, 2004]. 140 Lamzon v. NLRC, [G.R. No. 113600, May 28, 1999, 307 SCRA 665; 367 Phil. 169, 177]. 141 Times Transportation Company, Inc. v. Sotelo, [G.R. No. 163786, February 16, 2005]. 142 Times Transportation Company, Inc. v. Sotelo, supra citing Biogenerics Marketing and Research Corporation v. NLRC, G.R. No. 122725, Sept. 8, 1999, 372 Phil. 653, 661. 143 Balagtas Multi-Purpose Cooperative, Inc. v. CA, [G.R. No. 159268, October 27, 2006]. 144 Dela Cruz v. Golar Maritime Services, Inc., [G.R. No. 141277, December 16, 2005]. 145 Section 4[a], Rule VI, Ibid.; Bristol Myers Squibb [Phils.], Inc. v. Viloria, G.R. No. 148156, Sept. 27, 2004. 146 Millennium Erectors Corporation v. Magallanes, [G.R. No. 184362, November 15, 2010]; Gaerlan v. NLRC, G.R. No. L-66526, Sept. 28, 1984, 132 SCRA 402. 147 Section 4[b], Rule VI, 2005 Revised Rules of Procedure of the NLRC; Bristol Myers Squibb [Phils.], Inc. v. Viloria, supra. 148 Solgus Corp. v. Hon. CA, [G.R. No. 157488, February 6, 2007]. 149 Del Mar Domestic Enterprises v. NLRC, G.R. No. 108731, Dec. 10, 1997. 150 Section 4(a), Rule VI of The New Rules of Procedure of the NLRC. 151 Mandaue Galleon Trade, Inc. v. Isidto, [G.R. No. 181051, July 5, 2010]. 152 PNCC v. NLRC, G.R. No. 103670, July 10, 1998, 292 SCRA 266; C. W. Tan Mfg. v. NLRC, G.R. No. 79596, Feb. 10, 1989. 153 Sunrise Manning Agency, Inc. v. NLRC, G.R. No. 146703, Nov. 18, 2004; Pagdonsalan v. NLRC, G.R. No. L-63701, Jan. 31, 1980, 127 SCRA 463; Millennium Erectors Corporation v. Magallanes, [G.R. No. 184362, November 15, 2010].



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======================================== TOPIC UNDER THE SYLLABUS: 2. National Labor Relations Commission (NLRC) a. Jurisdiction ======================================== Relevant Provision: Articles 217 [b], 218 [e], 223 and 263 [g], Labor Code 2005 Revised Rules of Procedure of the NLRC 1. JURISDICTION OF THE COMMISSION (NLRC).

a. Kinds of jurisdiction. The NLRC exercises two (2) kinds of jurisdiction:

1. Original jurisdiction; and 2. Exclusive appellate jurisdiction.154

2. ORIGINAL JURISDICTION.

The NLRC exercises original jurisdiction over the following cases:

a. Injunction in ordinary labor disputes 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.155

b. Injunction in strikes or lockouts under Article 264 of the Labor Code.156 c. Labor disputes causing or likely to cause a strike or lockout in an industry indispensable to the national

interest, certified to it by the Secretary of Labor and Employment for compulsory arbitration.157

3. EXCLUSIVE APPELLATE JURISDICTION. The NLRC exercises exclusive appellate jurisdiction over the following:

a. All cases decided by the Labor Arbiters.158 b. Contempt cases decided by the Labor Arbiters.159 c. Cases decided by the DOLE Regional Directors or the duly authorized hearing officers of the

Department of Labor and Employment involving recovery of wages, simple money claims and other benefits under Article 129 of the Labor Code.

4. SIGNIFICANT DISTINCTION BETWEEN JURISDICTION OF LABOR ARBITERS AND NLRC.

The NLRC does not have original jurisdiction over the cases enumerated in Article 217 over which Labor

Arbiters have original and exclusive jurisdiction. Thus, if a claim does not fall within the original and exclusive jurisdiction of the Labor Arbiter, the NLRC cannot have appellate jurisdiction thereover.160 ======================================== TOPIC UNDER THE SYLLABUS: 2. National Labor Relations Commission (NLRC) b. Effect of NLRC reversal of Labor Arbiter’s order of reinstatement ======================================== Relevant Provision: Article 223, Labor Code 1. EFFECTS OF THE REVERSAL BY THE NLRC OF THE LABOR ARBITER’S ORDER OF REINSTATEMENT. a. Meaning of reversal. Reversal by the NLRC of the Labor Arbiter’s order of reinstatement means that the NLRC found the finding of illegality of the dismissal of the employee by the Labor Arbiter as not valid. Hence, the employer’s position that the dismissal is valid and legal is affirmed. b. Effects of reversal.

The following are the effects:

154 Section 1, Rule VII, 2005 Revised Rules of Procedure of the NLRC. 155 Article 218 [e], Labor Code; Section 1, Rule XI, Ibid.. 156 Section 2, Rule XI, Ibid.. 157 Article 263 [g], Labor Code; Rule IX, Ibid.. 158 Article 217 [b], Labor Code. 159 Section 1, Rule XXIII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, Feb. 17, 2003; Section 1, Rule X, Ibid.. 160 Pondoc v. NLRC, G. R. No. 116347, Oct. 3, 1996, 262 SCRA 632.



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1. On backwages ‐ The employer, as a general rule, has to pay the so‐called “reinstatement wages” of the employee from the time he was ordered reinstated by the Labor Arbiter until the reversal by the NLRC of such reinstatement order. The exception is when there exists justifiable reason for not effecting actual or payroll reinstatement pending appeal, as enunciated under the Garcia doctrine.161 (See discussion under Sub‐Topic [b] (Effect of self‐executing order of reinstatement on backwages), Labor Arbiter above).

2. On reinstatement – If the employee was, pending appeal, reinstated either to his former position/substantially equivalent position or in the payroll, the reversal of the reinstatement ordered by the Labor Arbiter will not affect such reinstatement if the employee elevates his case to the Court of Appeals or subsequently, to the Supreme Court. However, if the employee no longer elevates the case to the Court of Appeals or to the Supreme Court, the reversal shall mean the end of the litigation, hence, the reinstatement of the employee should cease as a matter of course upon the finality of the reversal decision of the NLRC.

======================================== TOPIC UNDER THE SYLLABUS: 2. National Labor Relations Commission (NLRC) c. Requirements to perfect appeal to Court of Appeals ======================================== Relevant Provision: Article 223, Labor Code Rule 65, Revised Rules of Court 1. NO APPEAL FROM NLRC DECISIONS.

a. No statutory grant of right to appeal from NLRC decisions. The syllabus for labor law prescribes as a topic “Requirements to Perfect Appeal to Court of Appeals.” However,

it bears noting that under the present state of the law, there is no provision for appeals from the decisions of the NLRC. While Article 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 (10) calendar days from receipt thereof.

Instead, the present Article 223, as last amended by Section 12 of R. A. No. 6715, merely provides that the NLRC shall decide all cases within twenty (20) days from receipt of the answer of the appellee, and that such decision shall be final and executory after ten (10) calendar days from receipt thereof by the parties.

When the issue was raised in St. Martin Funeral Home v. NLRC, [G.R. No. 130866, September 16, 1998], on the argument that the Supreme Court has no jurisdiction to review the decisions of the NLR since there is no legal provision for appellate review thereof, the Supreme Court nevertheless rejected this thesis. It held that there is an underlying power of the courts to scrutinize the acts of the NLRC 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. 2. MOTION FOR RECONSIDERATION, AN INDISPENSABLE REQUISITE.

a. The filing of a Motion for Reconsideration of the NLRC decision is an indispensable pre‐requisite. Pursuant to said St. Martin ruling, and as sanctioned by subsequent decisions of the Supreme Court, the

remedy of the aggrieved party is to timely file a motion for reconsideration of the NLRC’s decision as a precondition for any further or subsequent remedy and then seasonably avail of the special civil action of certiorari under Rule 65 for which said Rule has now fixed the reglementary period of sixty (60) days from notice of the decision.162

Technically, therefore, the decisions of the NLRC are not appealable to any higher or superior court or tribunal. However, judicial review of the decisions of an administrative quasi‐judicial body like the NLRC may still be had on the grounds of lack of jurisdiction, grave abuse of discretion, serious error of law, fraud or collusion by way of a special civil action for certiorari under Rule 65 of the Revised Rules of Court.163

This principle was further underscored in the 2008 case of Solas v. Power & Telephone Supply Phils., Inc., [G.R. No. 162332, August 28, 2008]. Stating that respondents must be disabused of their belief that since no appeal may be taken from the NLRC decision, then the same can no longer be altered, the High Court cited Panuncillo v. CAP Philippines, Inc., [G.R. No. 161305, February 9, 2007, 515 SCRA 323], where it was held that while under the sixth (6th) paragraph of Article 223 of the Labor Code, the decision of the NLRC becomes final and executory “after the lapse of ten calendar days from receipt thereof by the parties,” the adverse party is not precluded from assailing it via a petition for certiorari under Rule 65 before the Court of Appeals and then to the Supreme Court via a petition for review under Rule 45.

161 Garcia v. Philippine Airlines, Inc., [G.R. No. 164856, January 20, 2009 (En Banc)]. 162 Section 4, Rule 65, 1997 Rules of Civil Procedure. 163 Confederation of Citizens Labor Unions v. NLRC, G.R. Nos. L-38955-56, Oct. 31, 1974; San Miguel Corporation v. Secretary of Labor, G.R. No. L-39195, May 16, 1975; Scott v. Inciong, G.R. No. L-38868, Dec. 29, 1975.



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b. Some principles on Motion for Reconsideration of the NLRC decision. 1. Motion for Reconsideration (MR) of the NLRC decision, not found in the law but in the NLRC Rules.164 2. The MR should be filed within ten (10) calendar days from receipt of the decision, resolution or order.165 3. The MR should be under oath.166 4. Only one MR from the same party shall be entertained.167 5. The MR is mandatory and jurisdictional.168 6. The MR is the plain and adequate remedy referred to in Section 1, Rule 65 of the Rules of Court.169 7. Parties cannot arrogate to themselves the determination of whether to file an MR or not.170 8. Late filing of motion for reconsideration may be excused.171 9. With the first MR which the NLRC granted, there is no need for the parties to file another MR before

bringing up the matter to the CA.172 10. Decision may have become final and executory for one party but not for the other who seasonably filed an

MR.173 11. Changing of theory on motion for reconsideration, not allowed.174 12. Prematurity, proper ground for failure to file a motion for reconsideration.175 Prematurity is the proper nomenclature to describe the ground to be invoked for failure to exhaust

administrative remedies. A premature action constitutes a fatal infirmity. c. Exceptions to the rule on exhaustion of administrative remedies. It bears to stress that the principle of exhaustion of administrative remedies under which the Motion for

Reconsideration falls, is not an iron‐clad rule. this principle may be disregarded under the following circumstances:176 (1) When there is a violation of due process; (2) When the issue involved is purely a legal question; (3) When the administrative action is patently illegal amounting to lack or excess of jurisdiction; (4) When there is estoppel on the part of the administrative agency concerned; (5) When there is irreparable injury; (6) When the respondent is a department secretary whose acts as an alter ego of the President bear the

implied and assumed approval of the latter; (7) When to require exhaustion of administrative remedies would be unreasonable; (8) When it would amount to a nullification of a claim; (9) When the subject matter is a private land in land case proceedings; (10) When the rule does not provide a plain, speedy and adequate remedy; (11) When there are circumstances indicating the urgency of judicial intervention; (12) When no administrative review is provided by law; (13) Where the rule of qualified political agency applies; (14) When the issue of non‐exhaustion of administrative remedies has been rendered moot; (15) Where the order is a patent nullity, as where the court a quo has no jurisdiction;177 (16) Where the questions raised in the certiorari proceedings have been duly raised and passed upon by the

lower court, or are the same as those raised and passed upon in the lower court;178 (17) Where there is an urgent necessity for the resolution of the question and any further delay would

prejudice the interests of the Government or of the petitioner or the subject matter of the action is perishable.

(18) Where, under the circumstances, a motion for reconsideration would be useless;179 (19) Where petitioner was deprived of due process and there is extreme urgency for relief. (20) Where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the

trial court is improbable. (21) Where the proceedings in the lower court are a nullity for lack of due process. (22) Where the proceedings was ex parte or in which the petitioner had no opportunity to object. (23) Where the issue raised is one purely of law or where public interest is involved.180

3. RULE 65 CERTIORARI PETITION TO CA FROM NLRC DECISIONS.

a. Certiorari, nature. In cases where the decision of the NLRC is rendered without or in excess of jurisdiction, or with grave abuse of

discretion amounting to lack or excess of jurisdiction, the aggrieved party may elevate the case to the Court of Appeals

164 Section 15, Rule VII , 2005 Revised Rules of Procedure of the NLRC. 165 Section 15, Rule VII thereof. 166 Id. 167 Id. 168 Pilipino Telephone Corporation v. National Telecommunications Commission, G.R. No. 138295, Aug. 28, 2003, 410 SCRA 82, 88; Lopez de la Rosa Development Corporation v. CA, [G.R. No. 148470, April 29, 2005]. 169 (Seagull Shipmanagement and Transport, Inc. v. NLRC, G.R. No. 123619, June 8, 2000; See also Mandaue Dinghow Dimsum House Co., Inc. v. NLRC, G.R. No. 161134, March 3, 2008; PLDT v. Buna, G.R. No. 143688, Aug. 17, 2007. 170 Metro Transit Organization, Inc. v. CA, [G.R. No. 142133, November 19, 2002]. 171 Remington Industrial Sales Corp. v. Castaneda, [G.R. Nos. 169295-96, November 20, 2006]. 172 Crystal Shipping, Inc. v. Natividad, [G.R. No. 154798, October 20, 2005]. 173 Arandilla, Jr. v. Mindanao Electric Cooperative, Inc. (MAGELCO), [G.R. No. 157329, July 28, 2005]. 174 Cocomangas Hotel Beach Resort v. Visca, [G.R. No. 167045, August 29, 2008]. 175 Peftok Integrated Services, Inc. v. NLRC, G.R. No. 124841, July 31, 1998; Jamer v. NLRC, G.R. No. 112630, Sept. 5, 1997. 176 See Laguna CATV Network, Inc. v. Maraan, [G.R. No. 139492, November 19, 2002], as cited in Social Security Commission v. Court of Appeals, [G.R. No. 152058, September 27, 2004]. 177 Mandaue Dinghow Dimsum House Co., Inc. v. NLRC, [G.R. No. 161134, March 3, 2008]. 178 Miguel v. JCT Group, Inc., supra; Kiamco v. NLRC, G.R. No. 129449, June 29, 1999. 179 PLDT v. Imperial, G.R. No. 149379, June 15, 2006; Midas Touch Food Corp. v. NLRC, G.R. No. 111639, July 29, 1996, 259 SCRA 652. 180 Id.



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not by way of ordinary appeal but by and through the special civil action for certiorari provided under Rule 65 thereof, as amended by the 1997 Rules of Civil Procedure [effective July 1, 1997].

b. Some principles on Rule 65 certiorari petition. 1. Certiorari may be filed even if the NLRC decision has become final and executory.181 2. Certiorari petition under Rule 65 is cognizable by the CA and not by the SC182. 3. Period within which to file certiorari petitions – 60 days.183 4. The 60‐day period is inextendible.184 5. The 60‐day period is reckoned from receipt of the decision by counsel, not by party.185

========================================= TOPIC UNDER THE SYLLABUS: 3. Bureau of Labor Relations (BLR) – Med Arbiters a. Jurisdiction (Original and Appellate) ========================================= Relevant Provision: Article 226, Labor Code 1. JURISDICTION OF THE BUREAU OF LABOR RELATIONS (BLR) AND LABOR RELATIONS DIVISIONS (LRD) IN THE DOLE

REGIONAL OFFICES. a. Concurrent jurisdiction of the BLR and LRD. The Bureau of Labor Relations (BLR) and the Labor Relations Divisions (LRD) in the Regional Offices have

concurrent jurisdiction. Atty. Montaño v. Atty. Verceles, [G.R. No. 168583, July 26, 2010] The High Court pointed out that Article 226 of the Labor Code clearly provides that the BLR and the Regional

Directors of DOLE have concurrent jurisdiction over inter‐union and intra‐union disputes. Such disputes include the conduct or nullification of election of union and workers’ association officers. There is, thus, no doubt as to the BLR’s jurisdiction over the instant dispute involving member‐unions of a federation arising from disagreement over the provisions of the federation’s constitution and by‐laws.

b. Original and exclusive jurisdiction. The BLR and the Labor Relations Divisions in the DOLE regional offices have concurrent original and exclusive

authority to act, at their own initiative (motu proprio) or upon request of either or both parties, on the following controversies:

a. All inter‐union conflicts; b. All intra‐union conflicts; and c. All disputes, grievances or problems arising from or affecting labor‐management relations in all workplaces, whether agricultural or non‐agricultural, except those arising from the implementation or interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration.186

Such concurrent jurisdiction applies in the following specific actions: 1. Application for registration of labor unions; and 2. Petition for cancellation of union registration. 187 As far as complaints for examination of union’s books of accounts is concerned, the Rules of Procedure

on Mediation‐Arbitration purposely and expressly separated or distinguished examinations of union accounts from the genus of intra‐union conflicts and provided a different procedure for the resolution of the same. Original jurisdiction over complaints for examinations of union accounts is vested on the Regional Director and appellate jurisdiction over decisions of the former is lodged with the BLR.188

c. Administrative functions. In addition to the afore‐mentioned controversies over which they have concurrent original and exclusive

jurisdiction, the BLR and the Labor Relations Divisions in the DOLE regional offices likewise have concurrent jurisdiction over the following administrative functions:

1. Registration of labor unions; 2. Keeping of registry of labor unions;

181 Tomas Claudio Memorial College, Inc. v. CA, G.R. No. 152568, Feb. 16, 2004. 182 St. Martin Funeral Home v. NLRC, [G.R. No. 130866, September 16, 1998, 295 SCRA 494 (En Banc)]. 183 See Section 4, Rule 65, as amended by Circular No. 39-98 [effective Sept. 1, 1998] and further amended by A. M. No. 00-2-03-SC [effective Sept. 1, 2000]. 184 See Section 4, Rule 65, as amended by Circular No. 39-98 [effective Sept. 1, 1998] and further amended by A. M. No. 00-2-03-SC [effective Sept. 1, 2000]. 185 Section 6[a], Rule III of the 2005 Revised Rules of Procedure of the NLRC; Ginete v. Sunrise Manning Agency, [G.R. No. 142023, June 21, 2001]. 186 Article 226, Labor Code; Policy Instructions No. 6; Villaor v. Trajano, G.R. No. 69188, Sept. 23, 1986. 187 Section 1, Rule II, Rules of Procedure on Mediation-Arbitration. 188 Section 1, Rule II, Rules of Procedure on Mediation-Arbitration; La Tondeña Workers Union v. The Hon. Secretary of Labor and Employment, G.R. No. 96821, Dec. 09, 1994.



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3. Maintenance and custody of the files of Collective Bargaining Agreements (CBAs) and other related agreements.

4. Records of settlement of labor disputes; and 5. Copies of orders and decisions of Voluntary Arbitrators.189

2. APPELLATE JURISDICTION.

a. Rules on appeals. The following are the rules on appeals with respect to the BLR: 1. Intra‐union disputes ‐ Decisions of Med‐Arbiters in intra‐union disputes are appealable to the BLR.190 2. Inter‐union disputes ‐ Decisions of the Med‐Arbiter in inter‐union disputes (certification elections) are not

appealable to the BLR but to the DOLE Secretary.191 3. The BLR exercises appellate jurisdiction over all cases originating from the DOLE Regional Director

involving the following issues: a. Union registration; b. Cancellation of certificates of union registration; and c. Complaints for examination of union’s books of accounts.192

As far as cancellation of union registration is concerned, in case the decision is rendered by the BLR Director in the exercise of his original jurisdiction, the same may be appealed to the Office of the DOLE Secretary by any party within the same period of ten (10) days, copy furnished the opposing party.193

b. Reglementary period for appeal.

The decision of the Med‐Arbiter and DOLE Regional Director may be appealed to the BLR by any of the parties within ten (10) days from receipt thereof, copy furnished the opposing party. The decision of the BLR Director in the exercise of his original jurisdiction may be appealed to the Office of the DOLE Secretary by any party within the same period, copy furnished the opposing party. The appeal shall be verified under oath and shall consist of a memorandum of appeal specifically stating the grounds relied upon by the appellant, with supporting arguments and evidence.194

c. Finality of the decision of the BLR or Office of the DOLE Secretary. The decision of the Bureau of Labor Relations or the Office of the DOLE Secretary shall become final and

executory after ten (10) days from receipt thereof by the parties, unless a motion for its reconsideration is filed by any party therein within the same period. Only one (1) motion for reconsideration of the decision of the Bureau of Labor Relations or the Office of the DOLE Secretary in the exercise of their appellate jurisdiction shall be allowed.195

3. INTER‐UNION OR INTRA‐UNION DISPUTES.

a. Inter‐union or representation disputes. An “inter‐union dispute” or “representation dispute” refers to a case involving a petition for certification

election filed by a duly registered labor organization which is seeking to be recognized as the sole and exclusive bargaining agent of the rank‐and‐file employees or supervisory employees, as the case may be, in the appropriate bargaining unit of a company, firm or establishment.196

b. Intra‐union or internal union disputes. An “intra‐union dispute” or “internal union dispute” refers to any conflict between and among union members,

including grievances arising from any violation of the rights and conditions of membership, violation of or disagreement over any provision of the union’s constitution and by‐laws or disputes arising from chartering or affiliation of a union.197

c. Coverage of intra‐union disputes. Intra‐union disputes shall include: (1) Cancellation of registration of a labor organization filed by its members or by another labor organization; (2) Conduct of election of union and workers’ association officers or nullification of election of union and

workers’ association officers; (3) Audit/accounts examination of union or workers’ association funds; (4) Deregistration of collective bargaining agreements; (5) Validity/invalidity of union affiliation or disaffiliation; (6) Validity/invalidity of acceptance/non‐acceptance for union membership; (7) Validity/invalidity of impeachment/expulsion of officers or members of the union or workers’ association; (8) Validity/invalidity of voluntary recognition; (9) Opposition to application for union and CBA registration; (10) Violations of or disagreements over any provision in the constitution and by‐laws of a union or workers’

association; (11) Disagreements over chartering or registration of labor organizations and collective bargaining agreements;

189 Article 231, Labor Code. 190 Section 1 [1], Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases. 191 See Article 259 of the Labor Code. 192 Section 2, Rule II, Rules of Procedure on Mediation-Arbitration. 193 Section 16, Rule XI, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 194 Section 16, Rule XI, Book V, Ibid.. 195 Section 21, Rule XI, Book V, Ibid.. 196 Section 1 [9], Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases; Diokno v. Hon. Cacdac, G.R. No. 168475, July 4, 2007; Bautista v. CA, G.R. 123375, Feb. 28, 2005, 452 SCRA 406, 420. 197 Section 1 [bb], Rule I, Book V, Ibid.; Diokno v. Hon. Cacdac, supra; Bautista v. CA, supra.



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(12) Violations of the rights and conditions of membership in a union or workers’ association; (13) Violations of the rights of legitimate labor organizations, except interpretation of collective bargaining

agreements; (14) Such other disputes or conflicts involving the rights to self‐organization, union membership and collective

bargaining – (a) between and among legitimate labor organizations; (b) between and among members of a union or workers’ association.198

4. OTHER RELATED LABOR RELATIONS DISPUTES.

a. Related labor relations dispute, meaning. “Related labor relations dispute” refers to any conflict between a labor union and the employer or any

individual, entity or group that is not a labor union or workers’ association.199

b. Coverage of other related labor relations disputes. Other related labor relations disputes include: (1) cancellation of registration of unions and workers’ associations; and (2) a petition for interpleader.200

c. Interpleader, meaning. “Interpleader” refers to a proceeding brought by a party against two or more parties with conflicting claims,

compelling the claimants to litigate between and among themselves their respective rights to the claim, thereby relieving the party so filing from suits they may otherwise bring against it.201

5. MED‐ARBITER.

a. Med‐Arbiter; jurisdiction. The “Med‐Arbiter” refers to an officer in the DOLE Regional Office or in the Bureau of Labor Relations (BLR)

authorized to hear and decide the following cases: 1. representation cases; 2. inter‐union disputes; 3. intra‐union disputes; and 4. other related labor relations disputes.202 5.

b. Med‐Arbiter has no jurisdiction over cancellation of union registration cases. Specifically excepted from the jurisdiction of Med‐Arbiters are cases involving the cancellation of union

registration.203 The same devolves upon the DOLE Regional Director or the BLR Director, in the exercise of their original jurisdiction.

c. Some principles on the jurisdiction of Med‐Arbiters. 1. The Med‐Arbiter has authority to decide on the issue of whether an employer‐employee relationship

exists.204 2. He is also empowered to decide other issues related to the eligibility of employees to vote.205 3. He cannot order the re‐negotiation of a CBA, his authority being confined to the determination of the

exclusive bargaining agent in the bargaining unit.206 4. He is possessed of the power to issue temporary restraining order and the writ of injunction in appropriate

cases.207 5. Factual findings of Med‐Arbiters are accorded great respect.208 6. He may, upon his own initiative or on motion of any interested party, issue a writ of execution on a

judgment within five (5) years from the date it becomes final and executory, requiring the Sheriff or a duly deputized officer to execute or enforce the same.209

6. RULE ON 30% SUPPORT REQUIREMENT TO FILE A COMPLAINT OR PETITION.

a. Requirement of 30% union support in case of complaint affecting entire membership. Where the issue involves the entire membership of the labor organization, the complaint or petition is required

to be supported by at least thirty percent (30%) of its members.210 However, this 30% support requirement needed to report violations of rights and conditions of union

membership, as found in the last paragraph of Article 241 of the Labor Code, need not be strictly observed.211 It is thus not mandatory.212

198 Section 1, Rule XI, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 199 Section 1 [rr], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 200 Section 2, Rule XI, Book V, Ibid.. 201 Section 1 [z], Rule I, Book V, Ibid.. 202 Section 1 [ii], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 203 Id. 204 M. Y. San Biscuits, Inc. v. Laguesma, G.R. No. 95011, April 22, 1991. 205 Central Negros Electric Cooperative, Inc. v. Secretary of Labor, G.R. No. 94045, Sept. 13, 1991. 206 FFW v. Noriel, G.R. Nos. L-47182-83, Oct. 30, 1978, 86 SCRA 132. 207 Dinio v. Laguesma, [G.R. No. 108475, June 9, 1997, 273 SCRA 109]. 208 Furusawa Rubber Philippines, Inc. v. Secretary of Labor and Employment, G. R. No. 121241, Dec. 10, 1997, 282 SCRA 635. 209 Section 1, Rule XXIV, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 210 Section 4, Rule XI, Book V, Rules to Implement the Labor Code. 211 Verceles v. Bureau of Labor Relations-Department of Labor and Employment, [G.R. No. 152322, February 15, 2005]. 212 Rodriguez v. Director, Bureau of Labor Relations, [G.R. Nos. L-76579-82 and L-80504, August 31, 1988, 165 SCRA 239].



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b. 30% not required if entire union membership is not involved. The 30% requirement is not necessary if the issue does not involve the entire membership of the union.213

============================================ TOPIC UNDER THE SYLLABUS: 4. National Conciliation and Mediation Board (NCMB) a. Conciliation vs. Mediation b. Preventive Mediation ============================================

Relevant Provisions: 1. Executive Order No. 126, [Reorganizing the Ministry of Labor and Employment and for Other Purposes] (January 30, 1987)

2. Executive Order No. 251[Creating the NCMB] (July 25, 1987) Both issued by President Corazon C. Aquino

1. NATIONAL CONCILIATION AND MEDIATION BOARD (NCMB).

a. The “Board” under the Labor Code. The word “Board” as used in the Labor Code refers to the National Conciliation and Mediation Board

(NCMB).214 It is an agency attached to the Department of Labor and Employment principally in‐charge of the settlement of labor disputes through conciliation, mediation and of the promotion of voluntary approaches to labor dispute prevention and settlement.215

b. Conciliator‐Mediator. A “Conciliator‐Mediator” refers to an officer of the NCMB whose principal function is to assist in the settlement

and disposition of labor‐management disputes through conciliation and preventive mediation, including the promotion and encouragement of voluntary approaches to labor disputes prevention and settlement.216

c. NCMB is not a quasi‐judicial agency. According to the 2009 case of Tabigue v. International Copra Export Corporation, [G.R. No. 183335, December

23, 2009], based on the functions of the NCMB, as enumerated in Section 22 of Executive Order No. 126 (the Reorganization Act of the Ministry of Labor and Employment), it cannot be considered a quasi‐judicial agency.

d. Not being a quasi‐judicial agency, NCMB’s rulings are not cognizable by the Court of Appeals. This was the holding in the same case of Tabigue [supra]. Hence, NCMB’s decisions cannot be elevated to the

Court of Appeals under Rule 43 of the Rules of Court.

2. CONCILIATION AND MEDIATION.

a. Conciliation or mediation, meaning. Both the terms “conciliation” and “mediation” refer to a process whereby a third person usually called

Conciliator (in case of conciliation) or Mediator (in case of mediation), intervenes in a dispute involving two or more conflicting parties for the purpose of reconciling their differences or persuading them into adjusting or settling their dispute. The Conciliator or Mediator normally does not make or render any decision, his role being confined to the functions afore‐described.

b. Jurisdiction over conciliation, mediation and voluntary arbitration cases. Originally, conciliation, mediation and voluntary arbitration functions are vested with the Bureau of Labor

Relations. These functions, however, were all absorbed by the NCMB under the law which created it.217

c. Distinction between conciliation and mediation. Generally, there is no marked distinctions between conciliation and mediation. The reason is that In both cases, a neutral third party (called Conciliator or Mediator) is tasked to assist two or more opposing parties in finding appropriate resolution to a dispute.

Philippine law and jurisprudence do not embody any specific distinctions between these two as in fact, there appears to be no universal definition of these widely accepted alternative mode of dispute resolution.

In other jurisdictions, however, the principal distinction between conciliation and mediation lies on the extent of the power and authority granted to the neutral third party.

In mediation, the Mediator normally facilitates a deliberation or discussion of the issues between the parties. He may or may not offer any opinions on the strength and weaknesses of each party's position and arguments. Thus, mediation may be classified into two, namely:

1. Facilitative Mediation where the Mediator does not make or offer any opinion; or 2. Evaluative Mediation where the Mediator offers an opinion which is not binding on the parties. It bears stressing, however, that regardless of which of the 2 methods above is chosen, the Mediator is

not empowered to impose his will on the parties.

213 See Section 1 of Rule XIV of the Implementing Rules of Book V ; See also Diokno v. Hon. Cacdac, [G.R. No. 168475, July 4, 2007]. 214 Section 1 [e], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 215 Section 1[15], Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases. 216 Section 1 [k], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 217 See Section 22 of Executive Order No. 126, [Reorganizing the Ministry of Labor and Employment and for Other Purposes] promulgated on January 30, 1987 by President Corazon C. Aquino, as amended by Section 4 of Executive Order No. 251 promulgated on July 25, 1987, creating

the NCMB.



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In conciliation, the Conciliator is given more power and authority in that he may not only offer an opinion on the issues at hand but may actually make a binding opinion thereon provided the parties stipulate in advance thereon. His opinion is based on the facts and the law involved in the controversy before him. It may thus be observed that conciliation is more formal than mediation in the sense that the former’s opinion, unlike the latter’s, may be binding on the parties, although it may be merely temporary in character.

c. Privileged nature of the information in conciliation and mediation proceedings. Any information and statements made at conciliation proceedings should be treated as a privileged

communication and thus may not be used as an evidence in any proceedings. They are inadmissible in evidence. Conciliators and similar officials are not allowed to testify in any court or body regarding any matters taken up at conciliation proceedings conducted by them.218

The privileged nature of the communication applies not only in cases of conciliation and mediation proceedings before the BLR, its Med‐Arbiters or any of its hearing officers but also in similar proceedings conducted by other labor officials, such as the Conciliators‐Mediators of the NCMB as well as the Labor Arbiters and the Commissioners of the NLRC.

For instance, in modifying the award of annual salary increases given by the Secretary of Labor and Employment to the employees under the CBA, in the case of Nissan Motors Philippines, Inc. v. Secretary of Labor and Employment, [G.R. Nos. 158190‐91, June 21, 2006], the Supreme Court pointed out that it cannot sanction the award made by the public respondent DOLE Secretary based ostensibly on the revelation of the NCMB Administrator that was sourced from the confidential position given to him by petitioner company. The reason for this is simple. Article 233 of the Labor Code prohibits the use in evidence of any confidential information given during conciliation proceedings. The NCMB Administrator clearly breached this provision of law.

3. PREVENTIVE MEDIATION.

a. NCMB’s authority to effect conversion of a notice of strike/lockout into a preventive mediation case. “Preventive mediation,” as a remedy, is not found in the Labor Code. But under the law which created the NCMB, one of its functions is to provide preventive mediation to disputing parties.219

This remedy covers potential labor disputes that are the subject of a formal or informal request for conciliation and mediation assistance sought by either or both parties or upon the initiative of the NCMB to avoid the occurrence of actual labor disputes.220

b. Some principles on preventive mediation. 1. Filing of notice of preventive mediation, first step to submit case for preventive mediation. It is only after

this step that a submission agreement may be entered into by the parties concerned.221 2. Only certified or duly recognized bargaining representatives may file a notice or request for preventive

mediation in cases of bargaining deadlocks and unfair labor practices.222 3. Notice of preventive mediation is different from the notice to strike or lockout.

c. Authority to convert a notice of strike/lockout into a preventive mediation case. The NCMB has the authority to convert a notice of strike/lockout filed by the union into a preventive mediation

case under any of the following circumstances: 1. When the issues raised in the notice of strike/lockout are not strikeable in character. 2. When the party which filed the notice of strike/lockout asks for the conversion. 3. When both parties to a labor dispute mutually agree to have it subjected to preventive mediation

proceeding. 4.

d. Conversion of a notice of strike/lockout into a preventive mediation case results in its dismissal. Once a notice of strike/lockout is converted into a preventive mediation case, it will be dropped from the

docket of notices of strike/lockout. Once dropped therefrom, a strike/lockout can no longer be legally staged based on the same notice. The conversion has the effect of dismissing the notice.

e. Strike is illegal if staged after conversion of the notice of strike into a preventive mediation case. A case in point is Philippine Airlines, Inc. v. Secretary of Labor and Employment, [G.R. No. 88210, January 23,

1991, 193 SCRA 223], where the strike was declared illegal for lack of a valid notice of strike in view of the NCMB’s conversion of said notice into a preventive mediation case.

It is clear, according to San Miguel Corporation v. NLRC, [G.R. No. 119293, June 10, 2003], that the moment the NCMB orders the preventive mediation in a strike case, the union thereupon loses the notice of strike it had filed. Consequently, if it still defiantly proceeds with the strike while mediation is on‐going, the strike is illegal.223

218 Article 233, Labor Code; Section 2, Rule XXII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [February 17, 2003]. 219 Section 22, Executive Order No. 126. 220 Section 1 [20], Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases; See also Section 1 [mm], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [February 17, 2003]. 221 Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, [G.R. Nos. 174040-41, September 22, 2010]. 222 Id.; Section 3, Rule IV of the NCMB Manual of Procedure. 223 NUWHRAIN v. NLRC, [G.R. No. 125561, March 6, 1998, 287 SCRA 192]; Philcom Employees Union v. Philippine Global Communications, [G.R. No. 144315, July 17, 2006].



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=========================== TOPIC UNDER THE SYLLABUS: 5. DOLE Regional Directors a. Small money claims ===========================


1. SMALL MONEY CLAIMS (OR SIMPLE MONEY CLAIMS).

a. Claims that may be recovered. Article 129 contemplates the recovery of wages and other monetary claims and benefits, including legal

interest, owing to an employee or person employed in domestic or household service or househelper under the Labor Code, arising from employer‐employee relations.

b. Requisites for the valid exercise of jurisdiction by DOLE Regional Directors or Hearing Officers under Article 129.

The following requisites must concur: (1) The claim is presented by an employee or person employed in domestic or household service or

househelper under the code; (2) The claimant whose employment has been severed does not seek reinstatement; and (3) The aggregate money claim of the employee or househelper does not exceed P5,000.00.224 In the absence of any of the aforesaid three (3) requisites, the Labor Arbiters have original and exclusive

jurisdiction over all claims arising from employer‐employee relations, other than claims for employees’ compensation, social security, PhilHealth and maternity benefits.225

c. Jurisdiction when total monetary claim exceeds P5,000.00. Article 217 [a] (6) grants jurisdiction to the Labor Arbiters over all monetary claims arising from employer‐

employee relations, including those of persons in domestic or household service, if the total amount thereof exceeds five thousand pesos (P5,000.00), regardless of whether accompanied with a claim for reinstatement.226

In case of numerous claimants, the individual claim should not exceed P5,009.00.227

d. When claim does not exceed P5,000.00 but employee prays for reinstatement. Even if the individual claims of the employees do not exceed P5,000.00, if they include claims for

reinstatement, the matter falls within the original and exclusive jurisdiction of the Labor Arbiter.228 In other words, if the monetary claim is asserted as part of an illegal dismissal case, the amount of monetary claim becomes immaterial since the principal action is the illegal dismissal which appropriately falls under the jurisdiction of the Labor Arbiter.

e. Effect of claiming separation pay in lieu of reinstatement as an alternative remedy. In the event that what the complainant under Article 129 asserts as an accompanying remedy to his monetary

claim is not the remedy of reinstatement but the payment of separation pay in lieu of reinstatement, the DOLE Regional Director or DOLE Hearing Officer has no jurisdiction thereover since the principal action remains the illegality of the dismissal.

f. Employment relationship should no longer exist at the time of the initiation of the complaint for monetary claim under Article 129.

If the employment relationship still exists at the time of the filing of the complaint, the case necessarily falls under the coverage of Article 128 where it is a pre‐requisite that such relationship should still exist at the time of the initiation of the complaint.

If the employment relationship no longer exists, the complaint falls under Article 129 for as long as the terminated employee does not raise the issue of legality of his dismissal or asserts any claim for reinstatement and merely confines his complaint only on his monetary claims which should not exceed P5,000.00.

Once the employer‐employee relationship has already ceased and the legality of the dismissal is raised and reinstatement is sought, jurisdiction thereover necessarily falls under the Labor Arbiter by virtue of Article 217 of the Labor Code. And such jurisdiction covers the recovery of monetary and other benefits consequent to such dismissal.229

g. Appeals from decisions of the DOLE Regional Director under Article 129. 1. Appeal is to the NLRC and not to the DOLE Secretary. 2. Basis of the appeal is Article 129 and not Article 223 of the Labor Code. 3. Reglementary period of appeal is 5 calendar days. 4. Motion for extension of the reglementary period, not allowed. 5. Grounds for appeal and requisites for perfection of appeal to the NLRC are similar to those of appeals from

decisions of the Labor Arbiters under Article 223 of the Labor Code.

224 Albay I Electric Cooperative, Inc. v. Martinez, Sr., [G.R. No. 95559, November 9, 1993, 227 SCRA 606]. 225 See also Section 1 [a], Rule XI, Book III, Rules to Implement the Labor Code; Rajah Humabon Hotel, Inc. v. Trajano, G.R. No. 100455, Sept. 17, 1993, 226 SCRA 394. 226 Cinderella Marketing Corporation v. NLRC, G.R. No. 112535, June 22, 1998. 227 Albay I Electric Cooperative, Inc. v. Martinez, Sr., [supra]. 228 M. Ramirez Industries v. Secretary of Labor, G.R. No. 89894, Jan. 3, 1997, 266 SCRA 111. 229 Oreshoot Mining Corporation v. Hon. Arellano, G.R. Nos. 75746-48, Dec. 14, 1987.



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================================= TOPIC UNDER THE SYLLABUS: 6. DOLE Secretary a. Visitorial and Enforcement Powers =================================


1. VISITORIAL AND ENFORCEMENT POWERS.

a. 3 separate powers treated in Article 128. The three (3) kinds of power treated in Article 128 are as follows: 1. Visitorial power which is embodied in paragraph [a] thereof; 2. Enforcement power which is treated in paragraphs [b] and [c] thereof; and 3. Appellate power or power of review which is found in the sub‐paragraph of paragraph [b] thereof.

b. Nature of the visitorial and enforcement powers. The visitorial and enforcement powers granted to the DOLE Secretary or his duly authorized representatives

are in the nature of a quasi‐judicial power.230

c. Subject of the visitorial and enforcement powers. The subject of the visitorial and enforcement powers granted to the DOLE Secretary or his duly authorized

representatives under Article 128 is the establishment which is under inspection and not the employees thereof.

Maternity Children’s Hospital v. Secretary of Labor, [G.R. No. 78909, June 30, 1989]. According to this case, any awards granted are not confined to employees who signed the complaint inspection

but are equally applicable to all those who were employed by the establishment concerned at the time the complaint was filed, even if they were not signatories thereto. The reason is that the visitorial and enforcement powers are relevant to, and may be exercised over, establishments, not over individual employees thereof, to determine compliance by such establishments with labor standards laws.

d. Duly authorized representatives being referred to in Article 128. The DOLE Regional Directors are the duly “authorized representatives” of the DOLE Secretary referred to in

Article 128 of the Labor Code. 231

1.1. VISITORIAL POWER UNDER ARTICLE 128.

The visitorial power covers and includes: a. access to employer’s records and premises at any time of the day or night, whenever work is being

undertaken therein; and b. the right:

1. to copy from said records; 2. to question any employee and investigate any fact, condition or matter which may be necessary to

determine violations or which may aid in the enforcement of the Labor Code and of any labor law, wage order, or rules and regulations issued pursuant thereto.232

1.2. ENFORCEMENT POWER UNDER ARTICLE 128.

The enforcement power includes: a. to issue compliance orders to give effect to the labor standards provisions of the Labor Code and other

labor legislations based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection.

b. to issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection.233

c. to order stoppage of work or suspension of operations of any unit or department of an establishment when non‐compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace. Within twenty‐four (24) hours, a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation.234

d. to require employers, by appropriate regulations, to keep and maintain such employment records as may be necessary in aid of his visitorial and enforcement powers under the Labor Code.235

1.3. APPEAL TO THE DOLE SECRETARY.

a. Grant of appellate power to the DOLE Secretary, a new provision in Article 128 [b].

230 Dole Philippines, Inc. v. Esteva, G.R. No. 161115, Nov. 30, 2006. 231 San Miguel Corporation v. The Hon. CA, G.R. No. 146775, Jan. 30, 2002 232 Article 128 [a], Labor Code; Section 1, Rule X, Book III, Rules to Implement the Labor Code, as amended by Department Order No. 7-A, Series of 1995. 233 Article 128 [b], Labor Code. 234 Article 128 [c], Ibid.; Section 3 [a] and [b], Rule X, Book III, Rules to Implement the Labor Code. 235 Article 128 [f], Labor Code.



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The appeal from the order of the DOLE Regional Director issued under Article 128 should be made to the DOLE Secretary.236

b. Reglementary period. Ten (10) calendar days from receipt of a copy of the order of the DOLE Regional Director.237

c. Grounds for appeal.

The aggrieved party may appeal to the Secretary of Labor and Employment the order of the Regional Director on any of the following grounds:

1. there is a prima facie evidence of abuse of discretion on the part of the Regional Director; 2. the order was secured through fraud, coercion or graft and corruption; 3. the appeal is made purely on questions of law; or 4. serious errors in the findings of facts were committed which, if not corrected, would cause grave and

irreparable damage or injury to the appellant.238 2. REQUISITES FOR THE VALID EXERCISE OF THE VISITORIAL AND ENFORCEMENT POWERS UNDER ARTICLE 128, AS AMENDED.

Three (3) requisites should concur: a. The employer‐employee relationship should still exist; b. The findings in question were made in the course of inspection by the labor employment and enforcement

officers or industrial safety engineers; and c. The employees have not yet initiated any claim or complaint with the DOLE Regional Director under Article

129, or the Labor Arbiter, under Article 217. 2.1. FIRST REQUISITE: EMPLOYMENT RELATIONSHIP SHOULD STILL EXIST AT THE TIME OF THE INITIATION OF THE

ACTION UNDER ARTICLE 128 [B]. a. Existence of employer‐employer relationship, essential.

EJR Crafts Corp. v. Hon. CA, [G.R. No. 154101, March 10, 2006] It was held that considering that there still exists an employer‐employee relationship between petitioner and

private respondents and that the case involves violations of the labor standard provisions of the Labor Code, the DOLE Regional Director has jurisdiction to hear and decide the instant case in conformity with Article 128 [b] of the Labor Code. 239

Rizal Security & Protective Services, Inc. v. Hon. Maraan, [G.R. No. 124915, February 18, 2008]. The Supreme Court ruled that what is material to consider is that at the time of the filing of the complaints or

claims for payment of monetary benefits with the DOLE Regional Office, the complainants were still employees of petitioner company.

b. Labor Arbiter has jurisdiction in the absence of employment relationship. Batong Buhay Gold Mines, Inc. v. Sec. Dela Serna, [G.R. No. 86963, August 6, 1999, 370 Phil. 872]. If at the time of the initiation of the action under Article 128 [b], the employer‐employee relationship had

already ceased to exist, it is not the DOLE Regional Director but the Labor Arbiter who has jurisdiction over the same.

2.2. SECOND REQUISITE: THE FINDINGS SHOULD BE MADE IN THE COURSE OF INSPECTION. Under the second of the three (3) requisites for the valid exercise of the visitorial and enforcement power

under Article 128 [b], it is essential that the findings in question were made in the course of inspection by the labor employment and enforcement officers or industrial safety engineers. 2.3. THIRD REQUISITE: NO ACTION ON THE SAME VIOLATION OF LABOR STANDARD LAWS HAS YET BEEN FILED

UNDER EITHER ARTICLES 129 OR 217 OF THE LABOR CODE. Corollary to the second requisite above is the third (3rd) requisite that the affected employees should not have

initiated yet any claim or complaint on the violation of the labor standards provisions of the law with either the DOLE Regional Director under Article 129, or the Labor Arbiter, under Article 217 of the Labor Code. This is as it should be because once the complaint has already been taken cognizance of by the DOLE Regional Director under Article 129. or by the Labor Arbiter under Article 217, jurisdiction attaches thereto and will not be lost as a result of the findings made in the course of inspection by the labor employment and enforcement officers or industrial safety engineers. 236 See Article 128 [b], Labor Code. 237 Section 1, Rule IV of the Rules on the Disposition of Labor Standards Cases in the Regional Offices; See also University of Immaculate Concepcion, v. Secretary of Labor and Employment, [G.R. No. 143557, June 25, 2004]. 238 Section 2, Rule IV, Rules on the Disposition of Labor Standards Cases in the Regional Offices. 239 See also Bay Haven, Inc. v. Abuan, [G.R. No. 160859, July 30, 2008].



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3. JURISDICTIONAL DISTINCTIONS AMONG ARTICLES 128 [B], 129 AND 217.

1. On the nature of the proceedings and the concomitant powers granted. Article 128 [b] involves the exercise of visitorial and enforcement powers by the DOLE Secretary or his duly authorized representatives (referring to DOLE Regional Directors). Article 129 involves the exercise of adjudicatory power over monetary claims not exceeding P5,000.00 and not accompanied by any claim for reinstatement by the DOLE Regional Directors or any of the duly authorized hearing officers of DOLE. Article 217 involves the exercise by the Labor Arbiters of their quasi‐judicial power to hear and decide monetary claims exceeding P5,000.00 regardless of whether accompanied with a claim for reinstatement.

2. On the person or officer granted the powers. Article 128 [b] grants the power specifically to the DOLE Secretary or his duly authorized representatives (referring to DOLE Regional Directors). Article 129 grants the power specifically to the DOLE Regional Directors or any of the duly authorized hearing officers of DOLE. Article 217 grants the power specifically to the Labor Arbiters of the NLRC.

3. On the subject matter. Article 128 [b] applies to inspection cases involving any violations of the labor standards provisions of the Labor Code and other labor legislations regardless of the amount of monetary claims involved. Moreover, it is not only confined to monetary claims but also includes violations of occupational safety and health standards. Article 129 applies to monetary claims whose total amount does not exceed P5,000.00. Article 217 applies to monetary claims exceeding P5,000.00.

4. On the accompanying claim for reinstatement.

Article 128 [b] applies only to inspection cases without any accompanying claim for reinstatement. Article 129 applies only when the monetary claim is not accompanied by any issue involving reinstatement. Article 217 applies to monetary claims exceeding P5,000.00, irrespective of whether or not accompanied by a claim for reinstatement.

5. On the party initiating the action.

Article 128 [b] contemplates situations where the case for violation of labor standards laws and other labor legislations arose from the routine inspection conducted by the labor employment and enforcement officer or industrial safety engineers of the DOLE, with or without a complaint initiated by an interested party. Here, it is the DOLE which generally initiates the action motu proprio. Article 129 contemplates situations where there is a complaint initiated by an interested party for recovery of wages, simple money claims and other benefits. Here, it is the complainant (aggrieved employee) who initiates the action. Article 217 contemplates situations where a complaint is initiated by a worker or employee. Here, it is the complainant who initiates the action.

6. On the existence of employer‐employee relationship. Article 128 [b] is applicable only when the employer‐employee relationship still exists. In case the relationship no longer exists, monetary claims may fall either under the exclusive and original jurisdiction of the Labor Arbiters when the total amount exceeds P5,000.00 or under the exclusive and original jurisdiction of the DOLE Regional Director if the total amount thereof does not exceed P5,000.00. Accordingly, if on the face of the complaint, it can be ascertained that the employer‐employee relationship no longer exists, the case, whether or not accompanied by an allegation of illegal dismissal, should immediately be endorsed by the DOLE Regional Director to any of the Labor Arbiters of the NLRC. (Section 3, Rule II, Rules on the Disposition of Labor Standards Cases in the Regional Offices, Sept. 16, 1987). Article 129 is applicable when the employer‐employee relationship no longer exists and the money claim arose from said relationship and the total amount thereof does not exceed P5,000.00. Article 217 is applicable irrespective of whether or not the employer‐employee relationship still exists for as long as the claim arose from the said relationship and the total amount of the monetary claims exceeds P5,000.00. 7. On the remedy of appeal, how taken. Article 128 [b] grants appeal from the order issued by the duly authorized representative of the DOLE Secretary to the latter. Article 129 grants appeal from the decision of the Regional Director or any of the duly authorized hearing officers of DOLE to the NLRC. Article 217 grants appeal from the decision of the Labor Arbiter to the NLRC.

8. On the reglementary period of appeal. Article 128 [b] prescribes no specific reglementary period for appeal. The law is silent on this matter. However, under the Rules on the Disposition of Labor Standards Cases in the Regional Offices issued on September 16, 1987 by the



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DOLE Secretary, the reglementary period is fixed at ten (10) calendar days from receipt of the order. (See Section 1, Rule IV thereof). Article 129 prescribes the reglementary period of five (5) calendar days from receipt of a copy of the decision or resolution by a party within which to perfect the appeal. Article 217 does not contain any provision on the reglementary period for appeal. However, Article 223 of the Labor Code prescribes the reglementary period of ten (10) calendar days from receipt of the decision, award or order of the Labor Arbiter, within which to perfect the appeal.

9. On requirement of posting of bond to perfect the appeal. Article 128 [b] requires that in case the order subject of the appeal involves monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the DOLE Secretary in the amount equivalent to the monetary award in the order appealed from. Article 129 is silent on the requirement of bond; hence, this is not required to perfect the appeal. Article 217 does not embody the provision requiring posting of bond to perfect the appeal. It is provided for in Article 223 of the Labor Code.

10. On the grounds for appeal. Article 128 [b] does not specify the grounds for appeal. But Section 2, Rule IV of the Rules on the Disposition of Labor Standards Cases in the Regional Offices [September 16, 1987], which implements Article 128 [b] (prior to its amendment by R.A. No. 7730 on June 2, 1994), enumerates the following grounds:

a. there is a prima facie evidence of abuse of discretion on the part of the Regional Director; b. the Order was secured through fraud, coercion or graft and corruption; c. the appeal is made purely on questions of law; or d. serious errors in the findings of fact were committed which, if not corrected, would cause grave or

irreparable damage or injury to the appellant. The above‐cited grounds still apply even after the amendment of Article 128 [b] by R. A. No. 7730.

Article 129 expressly makes reference to the grounds provided in Article 223 [infra] of the Labor Code as applicable to appeals brought thereunder. Article 217 does not contain the grounds but those mentioned in Article 223 are applicable to appeals from decisions, awards or orders of the Labor Arbiter.

Under Article 223, the following are the grounds for appeal: a. If there is a prima facie evidence of abuse of discretion on the part of the Labor Arbiter; b. If the decision, order or award was secured through fraud or coercion, including graft and corruption; c. If made purely on questions of law; and/or d. If serious errors in the findings of fact are raised which, if not corrected, would cause grave or irreparable damage or injury to the appellant. (Articles 129 and 223, Labor Code; Section 2[d], Rule VI, 2005 Revised Rules of Procedure of the NLRC).

11. On the period to decide appeal and finality of decision. Article 128 [b] does not prescribe the period within which to decide the appeal and when such decision will become final and executory. However, its implementing rules, while not providing the period within which the decision should be rendered, mention that the decisions, orders or resolutions of the DOLE Secretary shall become final and executory after ten (10) calendar days from receipt thereof. (See Section 5, Rule V, Rules on the Disposition of Labor Standards Cases in the Regional Offices).

Article 129 mentions expressly that the NLRC should resolve the appeal within ten (10) calendar days from the submission of the last pleading required or allowed under its rules, which period is different from that provided under Article 223 which is within twenty (20) calendar days. With respect to the finality of the decision on the appealed case, Article 223 provides that the same shall be final and executory after ten (10) calendar days from receipt thereof by the parties.

Article 217 does not embody the provision on the period within which to decide appealed cases or the period within which such decision shall become final and executory. These matters are provided under Article 223 of the Labor Code. ===================================== TOPIC UNDER THE SYLLABUS: 6. DOLE Secretary b. Power to suspend effects of termination =====================================

Relevant Provision: Article 277 [b], Labor Code

1. SUSPENSION OF THE EFFECTS OF TERMINATION.

a. Power to suspend effects of termination. One of the extraordinary powers granted to the Secretary of Labor and Employment is his power under Article

277 [b] of the Labor Code to suspend the effects of termination effected by an employer which he may exercise even pending resolution of the legality or validity thereof in an appropriate proceeding.

Article 128– Visitorial and Enforcement Power



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b. Grounds. The DOLE Secretary may suspend the effects of termination pending resolution of the dispute in the event of a

prima facie finding by the appropriate official of the DOLE before whom the dispute is pending that: 1. the termination may cause a serious labor dispute; or 2. the termination is in implementation of a mass lay‐off.240

c. Rationale for suspending the effects of termination. The obvious purpose behind this rule is to bring the parties back to the status quo ante litem, that is, their state

of relationship prior to the termination. In this way, the workers will be litigating the issue of the validity or legality of their termination on more or less equal footing with the employer since they will not be deprived of their wages while the litigation is on‐going.

d. Reinstatement pending resolution of the termination dispute. Suspension of the effects of termination will necessarily result in the immediate reinstatement of the

terminated employees. An order of reinstatement pending resolution of the case may thus be issued by the Secretary of Labor and Employment pursuant to this power. (No. 12, Briefing Paper on R. A. 6715).

e. Who are the “appropriate officials” referred to in Article 277 [b]? The particular portion of Article 277 [b] on suspension of the effects of termination empowers the

“appropriate official” of the Department of Labor and Employment before whom the “dispute” is pending, to make the “prima facie” finding that the termination may cause a serious labor dispute or is in implementation of a mass lay‐off which finding is a pre‐requisite to the issuance by the Secretary of Labor and Employment of the order suspending the effects of the termination.

The said provision does not specify who this “appropriate official” is. A dissection of the Labor Code indicates that the following officials have the power to take cognizance of termination disputes in the exercise of their original and exclusive jurisdiction:

1. Labor Arbiters under paragraph [a] (2) of Article 217; 2. Voluntary Arbitrators or panels of Voluntary Arbitrators under Articles 261 and 262; 3. The Secretary of Labor and Employment, in the exercise of his assumption power in national interest cases.

Under paragraph [g] of Article 263, he may take cognizance of termination disputes that are included in the case/s over which he assumes jurisdiction thereunder.

4. The NLRC, in national interest cases certified to it for compulsory arbitration by the Secretary of Labor and Employment under the same Article 263 [g].

f. Case where DOLE Secretary ordered both the suspension of the effects of termination and the return to work of employees pursuant to a certification order issued under Article 263 [g].

University of Sto. Tomas v. NLRC and UST Faculty Union, [G.R. No. 89920, October 18, 1990] In this case, all the sixteen (16) officers and directors of the faculty union were terminated on the grounds of

grave misconduct, serious disrespect to a superior and conduct unbecoming a faculty member. As a result of said dismissal, some faculty members staged mass leaves of absence for several days, disrupting classes in all levels at the university. The faculty union filed a complaint for illegal dismissal and unfair labor practice with the Labor Arbiter who, on a prima facie showing that the termination was causing a serious labor dispute, certified the matter to the Secretary of Labor and Employment for a possible suspension of the effects of termination. On the basis of this, DOLE Secretary Franklin Drilon issued an order suspending the effects of the termination of the union officers and directors and ordering the university “to accept them back to work under the same terms and conditions prevailing prior to their dismissal.” Later, on the basis of a petition for assumption or certification filed by the university, Secretary Drilon modified said order by certifying the labor dispute to the NLRC for compulsory arbitration pursuant to Article 263 [g] of the Labor Code. He accordingly ordered the university to readmit all its faculty members, including the 16 union officers and directors, under the same terms and conditions prevailing prior to the dispute.

Based on the foregoing, it may be said that suspension of the effects of termination has the same effect as assumption or certification as far as the reinstatement of the affected employees is concerned. =========================== TOPIC UNDER THE SYLLABUS: 7. Voluntary Arbitrators Jurisdiction ===========================

Relevant Provisions: Articles 217 [c], 260, 261 and 262, Labor Code

NOTE: ALTHOUGH NOT PRESCRIBED IN THE SYLLABUS, A DISCUSSION ON THE JURISDICTION OF THE VOLUNTARY ARBITRATOR, VIS‐À‐VIS THE GRIEVANCE MACHINERY/PROCEDURE AND LABOR ARBITER IS NECESSARY, TO FULLY APPRECIATE THIS TOPIC ON VOLUNTARY ARBITRATORS.

1. JURISDICTION OF GRIEVANCE MACHINERY.

240 Article 277 [b], Labor Code, as amended by Section 33, R. A. No. 6715.



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Submission of an issue to the grievance machinery, as a general rule, is the first step before voluntary arbitration may be resorted to by the parties. The grievance machinery has jurisdiction over the following grievances:

1. Interpretation and implementation of the CBA; and 2. Interpretation and enforcement of company personnel policies.241 If these two cases are unresolved within 7 days from their submission for resolution by the Grievance

Committee, they shall be forwarded to a Voluntary Arbitrator for voluntary arbitration. 2. JURISDICTION OF VOLUNTARY ARBITRATORS.

a. Original and exclusive jurisdiction. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have exclusive and original jurisdiction over the

following cases: 1. Unresolved grievances arising from the interpretation or implementation of the collective bargaining

agreement (CBA). 2. Unresolved grievances arising from the interpretation or enforcement of company personnel policies. 3. Violations of the CBA which are not gross in character. 4. Wage distortion issues arising from the application of any wage orders in organized establishments. 5. Other labor disputes, including unfair labor practices and bargaining deadlocks, upon agreement of the

parties.242 6. Unresolved grievances arising from the interpretation and implementation of the Productivity Incentive

Programs under R. A. No. 6971. b. Some principles on jurisdiction of Voluntary Arbitrators. 1. Cases cognizable by Voluntary Arbitrators but filed with the Labor Arbiters, DOLE Regional Offices or NCMB

should be referred to the Voluntary Arbitrators mutually chosen by the parties.243 They are required to immediately dispose and refer the same to the appropriate grievance machinery or voluntary arbitration provided in the CBA.244

2. Cases cognizable by Voluntary Arbitrators but filed with the regular courts should be dismissed.245 3. WHEN A CASE DOES NOT INVOLVE THE PARTIES TO A CBA – THE EMPLOYER AND THE BARGAINING UNION

‐ IT IS NOT SUBJECT TO VOLUNTARY ARBITRATION. Only disputes involving the union and the company shall be referred to the grievance machinery or voluntary arbitrators.246

TERMINATION DISPUTES. 4. A termination dispute is not a grievable issue; hence, grievance machinery and Voluntary Arbitrators have

no jurisdiction over this issue. Termination cases do not call for the interpretation or enforcement of company personnel policies and so they may not be considered grievable or arbitrable.247

5. In termination cases, if the bargaining union is not named a party to the illegal dismissal suit either because it failed to object to the dismissal of the employee or the suit was initiated by the employee alone, without the assistance of his union, Voluntary Arbitrator has no jurisdiction thereover.248

6. Even if it is the policy of the State to promote voluntary arbitration as a mode of settling disputes, this does not foreclose the filing of a termination case with the Labor Arbiter.249

7. To confer jurisdiction with the Voluntary Arbitrator over termination disputes, there must be express agreement between employer and the bargaining agent to submit the termination case to voluntary arbitration.250

8. Even if the CBA provides that termination disputes are grievable, the same is merely discretionary on the part of the parties thereto.251

9. The Voluntary Arbitrator has no jurisdiction over cases involving the termination of employment effected pursuant to the provision of a union security clause.252

10. Even on the issue of termination of employment due to retirement under the retirement plan provided under the CBA, it has been held that the Labor Arbiter and not the Voluntary Arbitrator who has jurisdiction thereover.253

MONEY CLAIMS CASES. 11. The Voluntary Arbitrators have original and exclusive jurisdiction over money claims “arising from the

interpretation or implementation of the CBA and, those arising from the interpretation or enforcement of

241 Article 260, Labor Code. 242 See Articles 261 and 262, Labor Code. 243 , See paragraph 2, Article 261, as amended by R.A. No. 6715 and implemented by Department Order No. 40-03; See 244 Par. 2, Article 261, Labor Code; Section 4, Rule XIX, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 245 Union of Nestle Workers Cagayan de Oro Factory v. Nestle Philippines, Inc., [G.R. No. 148303, October 17, 2002]. 246 Tabigue v. International Copra Export Corporation, [G.R. No. 183335, December 23, 2009]. 247 See Article 217 [c]; San Miguel Corporation v. NLRC, [G.R. No. 108001, March 15, 1996, 255 SCRA 133, 140]. 248 Maneja v. NLRC, [G.R. No. 124013, June 5, 1998, 290 SCRA 603], Pantranco North Express, Inc. v. NLRC, [G.R. No. 95940, July 24, 1996] and Atlas Farms, Inc. v. NLRC, [G.R. No. 142244, November 18, 2002]. 249 Vivero v. CA, [G.R. No. 138938, October 24, 2000, 344 SCRA 268, 281]. 250 Landtex Industries v. CA, [G.R. No. 150278, August 9, 2007]. 251 Vivero v. CA, [supra]. 252 Sanyo Philippines Workers Union-PSSLU v. Canizares, [G.R. No. 101619, July 8, 1992]. 253 Pantranco North Express, Inc. v. NLRC, [G.R. No. 95940, July 24, 1996].



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company personnel policies,” under Article 261. The Labor Arbiters’ jurisdiction over money claims cases is limited only to those arising from statutes or contracts other than a CBA.254

STRIKES AND LOCKOUTS. 12. The Voluntary Arbitrators may hear and decide issue of legality of strikes or lockouts for as long as the

parties mutually agree to submit it to voluntary arbitration.255 VIOLATIONS OF A CBA. 13. Ordinary violation of a CBA which involves non‐economic provisions thereof is not ULP and should be

resolved as a grievance or grievable issue properly cognizable under the grievance machinery and voluntary arbitration provisions of a CBA. If the violation of the CBA is gross in character, i.e., the refusal to comply with the economic provisions thereof is flagrant and/or malicious, it should be treated as an unfair labor practice and thus may be taken cognizance of by the Labor Arbiter under Article 217 or by the Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, under Article 262 of the Labor Code.

WAGE DISTORTION CASES. 14. Jurisdictional over wage distortion cases depends on whether the establishment is organized or

unorganized. If organized, the Voluntary Arbitrator has jurisdiction. If unorganized, the Labor Arbiter has jurisdiction.256

ENFORCEMENT OF DECISIONS OF VOLUNTARY ARBITRATORS.

15. Both parties to a voluntary arbitration proceeding are required to comply voluntarily and faithfully with the decision rendered therein.257

16. The Voluntary Arbitrator may issue a writ of execution requiring either the sheriff of the NLRC or the regular courts or any public official whom the parties may have designated in their Submission Agreement, to execute the final decision.

17. In the absence of the Voluntary Arbitrator or, in case of his incapacity, the motion for the issuance of a writ of execution should be filed with the Labor Arbiter in the region having jurisdiction over the workplace. The filing of a motion for the issuance of a writ of execution is without prejudice to any other action which the aggrieved party may take against the non‐complying party such as a motion for contempt or imposition of fines and penalties.258

c. Powers and duties of Voluntary Arbitrators.

The Voluntary Arbitrator shall have the following powers: 1. To require any person to attend hearing/s; 2. To subpoena witnesses and receive documents when the relevancy of the testimony and the materiality

thereof have been demonstrated to the arbitrator; 3. To take whatever action is necessary to resolve the issue/s subject of the dispute; 4. To issue a writ of execution to enforce final decisions and in connection therewith, it shall be his duty to:

4.1. see to it that his decision is fully satisfied; 4.2. inquire into the correctness of the execution of his final decision; 4.3. consider whatever supervening event that may transpire during such execution; 4.4. determine every question of fact and law which may be involved in the execution.259

3. LATEST RULE: DOLE SECRETARY MAY ACT AS VOLUNTARY ARBITRATOR.

a. Administrative Intervention for Dispute Avoidance (AIDA). A new form of dispute settlement by the DOLE Secretary was enunciated in DOLE Circular No. 1, Series of 2006

issued on August 11, 2006. This recourse is separate from the established dispute resolution modes of mediation, conciliation and arbitration under the Labor Code, and is an alternative to other voluntary modes of dispute resolution such as the voluntary submission of a dispute to the Regional Director for mediation, to the NCMB for preventive mediation, or to the intervention of a regional or local tripartite peace council for the same purpose.260

b. Parties who may request for the DOLE Secretary’s intervention. Either or both the employer and the certified collective bargaining agent (or the representative of the

employees where there is no certified bargaining agent) may voluntarily bring to the Office of the DOLE Secretary, through a Request for Intervention, any potential or ongoing dispute defined below.261

254 See Article 217 [c]; Del Monte Philippines, Inc. v. Saldivar, [G.R. No. 158620, October 11, 2006]. 255 Pursuant to and on the strength of Article 262. 256 Article 124, Labor Code, as amended by Section 3, R.A. No. 6727; Section 7, Chapter II, Implementing Rules of R.A. No. 6727; Section 7, Chapter II, Implementing Rules of R.A. No. 6727; Section 1, Rule VII, Rules of Procedure on Minimum Wage Fixing issued by the National Wages

and Productivity Commission on 04 June 1990. 257 Section 8, Rule VII, NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings [Oct. 15, 2004]; Luzon Development Bank v. Association of Luzon Development Bank Employees, G.R. No. 120319, Oct. 9, 1995. 258 Section 1, Rule VIII, NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings [Oct. 15, 2004]; See also Article 262-A, Labor Code; Section 8, Rule XIX, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series

of 2003, [Feb. 17, 2003]. 259 Section 3, Rule V, NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings [Oct. 15, 2004]. 260 No. 1, DOLE Circular No. 1, Series of 2006. 261 Id..



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c. Potential or ongoing dispute. A potential or ongoing dispute refers to: 1. a live and active dispute; 2. that may lead to a strike or lockout or to massive labor unrest; and 3. is not the subject of any complaint or notice of strike or lockout at the time a Request for Intervention is

made.262 d. Pre‐requisite to intervention by the DOLE Secretary. The Office of the Secretary or the Regional Director, in the proper case, shall proceed to intervene after the

parties shall have manifested that: 1. they voluntarily submit their potential or ongoing dispute to intervention by the Office of the DOLE

Secretary; 2. there is no pending notice of strike or lockout or any related complaint in relation to their potential or

ongoing dispute; 3. they shall refrain from any strike or lockout or any form of work stoppage or from filing any related

complaint while the Secretary's intervention is in effect; and 4. they shall abide by the agreement reached, whose terms may be enforced through the appropriate writs

issued by the DOLE Secretary. All agreements settling the dispute should be in writing and signed by the parties as well as the official who

mediated the dispute.263 4. NEW RULE: DOLE REGIONAL DIRECTORS AND ASSISTANT REGIONAL DIRECTORS MAY ACT AS EX‐OFFICIO

VOLUNTARY ARBITRATORS. Department Order No. 83‐07, Series of 2007 [June 8, 2007] designated all DOLE Regional Directors and Assistant

Regional Directors as Ex‐Officio Voluntary Arbitrators (EVAs) to have jurisdiction over the following issues: 1. Grievances arising from the interpretation or implementation of the CBAs; 2. Grievances from the interpretation or enforcement of company personnel policies; 3. Voluntary arbitration cases referred by the DOLE Secretary under the DOLE’s Administrative Intervention for

Dispute Avoidance (AIDA) initiative (provided under DOLE Circular No. 1, Series of 2006, [supra]); 4. Upon agreement of the parties, any other labor dispute as may be submitted by the parties.

5. PHILIPPINE ARBITRATION LAW, NOT APPLICABLE TO LABOR CASES.

Republic Act No. 876, [“The Arbitration Law”] does not apply to voluntary arbitration of labor cases.

6. ALTERNATIVE DISPUTE RESOLUTION ACT OF 2004, NOT APPLICABLE TO LABOR CASES. Republic Act No. 9285 [“Alternative Dispute Resolution Act of 2004”] approved on April 2, 2004, does not apply

to labor cases. =========================== TOPIC UNDER THE SYLLABUS: 7. Voluntary Arbitrators a. Submission Agreement =========================== 1. SUBMISSION AGREEMENT.

a. Initiation of arbitration. An arbitration may be initiated either by way of: 1. A Submission Agreement; or • 2. A Demand or Notice to Arbitrate invoking the arbitration clause in the CBA; or • 3. An Appointment from the NCMB. Sometimes, both the Submission Agreement and the Notice to Arbitrate are used interchangeably.264 b. Submission Agreement, defined. A “Submission Agreement” refers to a written agreement by the parties submitting their case for arbitration,

containing a statement of the issues, the name of their chosen Voluntary Arbitrator and a stipulation and an undertaking to abide by and comply with the resolution that may be rendered therein, including the cost of arbitration.265

c. Contents of a Submission Agreement. The Submission Agreement should contain, among others, the following stipulations: 1. An agreement to submit the case to arbitration;

262 Id.. 263 No. 4, Ibid.. 264 No. 54, NCMB Primer on Grievance Settlement and Voluntary Arbitration. 265 Section 1[i], Rule II, NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings [Oct. 15, 2004].



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2. The specific issue/s to be arbitrated; 3. The name/s of the Voluntary Arbitrator or panel of Voluntary Arbitrators; 4. The names, addresses and contact numbers of the parties; 5. The agreement to perform or abide by the decision that may be rendered therein by the Voluntary

Arbitrator or panel of Voluntary Arbitrators.266

2. NOTICE TO ARBITRATE.

a. Notice to Arbitrate, defined. A “Notice to Arbitrate” refers to a formal demand made by one party to the other for the arbitration of a

particular dispute in the event of refusal by one party in a CBA to submit the same to arbitration.267

b. Submission to arbitration through Notice to Arbitrate. If after exhausting the grievance procedure, the grievance remains unresolved and one party refuses to submit

the same to voluntary arbitration, the following procedure should be observed: 1. A Notice to Arbitrate should be served upon the refusing or unwilling party, copy furnished the permanent

Voluntary Arbitrator, if one is named in the CBA, and the NCMB Regional Branch having jurisdiction over the workplace;

2. After the lapse of the seven‐day period within which to respond to the Notice to Arbitrate, the permanent Voluntary Arbitrator shall immediately commence the arbitration proceedings;

3. In the absence of a permanent Voluntary Arbitrator named in the CBA, the NCMB shall appoint a Voluntary Arbitrator who shall immediately commence the arbitration proceedings upon receipt of such appointment.268

c. Contents of a Notice to Arbitrate. The Notice to Arbitrate should contain, among others, the following: 1. The names, addresses and contact numbers of the party upon whom the notice is made; 2. The arbitration clause of the CBA; 3. The specific issue/s or dispute/s to be arbitrated; 4. The relief sought; and 5. The name, address and contact numbers of the party initiating or requesting the arbitration.269

d. Submission agreement and notice to arbitrate, distinguished. “Submission Agreement” is sometimes called a “stipulation” or an “agreement to arbitrate.” It is used where

there is no previous agreement to arbitrate. The submission agreement which must be signed by both parties, describes an existing dispute. It often names the arbitrator, prescribes the procedure in the hearing and sometimes contains considerable details of the arbitrator’s authority and other matters which the parties wish to control. A submission agreement is more appropriate in interest disputes since collective bargaining agreements generally do not provide for the arbitration of such disputes that may arise in the future. Submission agreement is often entered into after the dispute has materialized and the issues can already be defined.

However, a “Demand” or a “Notice of Intent to Arbitrate” or simply a “Notice to Arbitrate,” is more applicable to rights disputes because collective bargaining agreements are required under Republic Act No. 6715, to provide for a grievance procedure and a voluntary arbitration clause with respect to disputes arising from the application or interpretation of the CBA or the interpretation or enforcement of company personnel policies. Thus, it is perfectly valid to stipulate in the CBA on an “agreement to arbitrate” future disputes that may arise under and during the term thereof. If a dispute is covered by such an arbitration clause, arbitration may be initiated unilaterally by one party by serving upon the other a written demand or notice of intent to arbitrate.270

e. Some principles in connection with Submission Agreement. 1. Parties to a case may still choose to execute a submission agreement even if there is already an arbitration

clause in the CBA. 2. Parties not impleaded in the case are not bound by the decision rendered by the Voluntary Arbitrator.271

=========================== TOPIC UNDER THE SYLLABUS: 7. Voluntary Arbitrators a. Rule 43, Rules of Court ===========================

1. JUDICIAL REVIEW OF DECISIONS OF VOLUNTARY ARBITRATORS.

a. Decisions are final and executory. As a general rule, decisions or awards of Voluntary Arbitrators are final, inappealable and executory after ten

(10) calendar days from receipt of a copy thereof by the parties.272

266 Section 5, Rule IV, Ibid.. 267 Section 1[j], Rule II, Ibid.. 268 Section 6, Rule IV, Ibid.. 269 Section 7, Rule IV, Ibid.. 270 No. 55, NCMB Primer on Grievance Settlement and Voluntary Arbitration. 271 Temic Automotive Philippines, Inc. v. Temic Automotive Philippines, Inc. Employees Union – FFW, [G.R. No. 186965, December 23, 2009]. 272 Article 262-A, Labor Code; No. 107, NCMB Primer on Grievance Settlement and Voluntary Arbitration.



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b. Judicial review. It is well‐settled a rule, however, that the findings of fact and law made by the Voluntary Arbitrator may be

reviewed by the court.273 Judicial review is justified in certain cases,274 to wit: The Voluntary Arbitrator’s decisions or awards may be contested on the following grounds: 1. Lack or want of jurisdiction; 2. Grave abuse of discretion; 3. Violation of due process; 4. Denial of substantive justice; 5. Erroneous interpretation of the law.275 c. Some principles in the judicial review of decisions of the Voluntary Arbitrators. 1. Factual findings of Voluntary Arbitrators accorded not only respect but finality.276 2. Voluntary Arbitrator acts in a quasi‐judicial capacity, although he is not a part of a government unit or a

personnel of the Department of Labor and Employment.277 3. The mode is ordinary appeal under Rule 43 of the 1997 Rules of Civil Procedure.278 4. Period of appeal is 15 days.279 5. Payment of appeal docket fee within prescribed period, both mandatory and jurisdictional.280 6. Appeal will be dismissed if erroneously filed under Rule 65 instead of Rule 43. It must be noted that Rule 65

petition for certiorari is not a substitute for a lapsed appeal.281 =========================== TOPIC UNDER THE SYLLABUS: 8. Court of Appeals a. Rule 65, Rules of Court =========================== 1. RULE 65 CERTIORARI PETITION TO CA FROM NLRC DECISIONS.

a. Certiorari, nature. A decision of the NLRC may be elevated to the Court of Appeals by way of Rule 65 Petition for Certiorari in

cases where such decision is rendered: 1. without jurisdiction; or 2. in excess of jurisdiction; or 3. with grave abuse of discretion amounting to lack or excess of jurisdiction. b. Some principles on Rule 65 certiorari petition. 1. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the

commission of grave abuse of discretion amounting to lack or excess of jurisdiction.282 2. The right to file a special civil action of certiorari is neither a natural right nor a part of due process. A writ of

certiorari is a prerogative writ, never demandable as a matter of right, never issued except in the exercise of judicial discretion.283

3. The jurisdiction of the CA to review a decision of the NLRC in a petition for certiorari does not include the correctness of its evaluation of the evidence or of its factual findings which are generally accorded not only respect but also finality, but is confined to issues of jurisdiction or grave abuse of discretion. The judicial review does not go as far as to examine and assess the evidence of the parties and to weigh the probative value thereof.284

4. Certiorari may be filed even if the NLRC decision has become final and executory.285 5. Certiorari petition under Rule 65 is cognizable by the CA and not by the SC.286 7. Period within which to file certiorari petitions – 60 days which is inextindible.287 8. 60‐day period computed from notice of the judgment, order or resolution. In case a motion for

reconsideration or new trial is timely filed, whether such motion is required or not, the 60‐day period shall be counted from notice of the denial of said motion.288

9. The 60‐day period is reckoned from receipt of the decision by counsel, not by party.289 273 Continental Marble Corporation v. NLRC, G.R. No. L-43825, May 9, 1988. 274 Unicraft Industries International Corporation v. CA, G.R. No. 134903, March 26, 2001. 275 Sime Darby Pilipinas, Inc. v. Magsalin, G.R. No. 90426, Dec. 15, 1989; No. 107, NCMB Primer on Grievance Settlement and Voluntary Arbitration. 276 Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, G.R. No. 145561, June 15, 2005; National Steel Corporation v. CA, G.R. No. 134468, Aug. 29, 2002; Colegio de San Juan de Letran - Calamba v. Villas, [G.R. No. 137795, March 26, 2003]. 277 Luzon Development Bank v. Association of Luzon Development Bank Employees, [G.R. No. 120319, October 6, 1995]; Oceanic Bic Division (FFW) v. Romero, No. L-43890, July 16, 1984, 130 SCRA 392, 400; See also Ludo & Luym Corporation v. Saornido, G.R. No.

140960, Jan. 20, 2003, 395 SCRA 451, 458. 278 Luzon Development Bank, [supra]; Alcantara, Jr. v. CA, [G.R. No. 143397, August 6, 2002]; See Leyte IV Electric Cooperative, Inc. v. LEYECO IV Employees Union-ALU, G.R. No. 157775, October 19, 2007; Centro Escolar University Faculty and Allied Workers-Independent Union v.

Court of Appeals, [G.R. No. 165486, May 31, 2006, 490 SCRA 61, 69-70]. 279 Section 1, in relation to Section 4, of Rule 43, Rules of Court. 280 Saint Louis University, Inc. v. Cobarrubias, [G.R. No. 187104, August 3, 2010]; Ruby Shelter Builders and Realty Development Corporation v. Formaran III, G.R. No. 175914, Feb. 10, 2009, 578 SCRA 283, 297; Ruiz v. Delos Santos, G.R. No. 166386, Jan. 27, 2009, 577 SCRA 29, 43. 281 Manila Midtown Hotel v. VA Borromeo, [G.R. No. 138305, September 22, 2004], 282 Odango v. NLRC, G.R. No. 147420, June 10, 2004. 283 German Machineries Corporation v. Endaya, G.R. No. 156810, Nov. 25, 2004; Nunal v. Commission on Audit, G.R. No. 78648, Jan. 24, 1989, 169 SCRA 356, 363. 284 Sea Power Shipping Enterprises, Inc. v. CA, G.R. No. 138270, June 28, 2001, 412 Phil. 603; Permex, Inc. v. NLRC, G.R. No. 125031, Jan. 24, 2000; Aquino v. CA, G.R. No. 149404, Sept. 15, 2006. 285 Tomas Claudio Memorial College, Inc. v. CA, G.R. No. 152568, Feb. 16, 2004. 286 St. Martin Funeral Home v. NLRC, [G.R. No. 130866, September 16, 1998, 295 SCRA 494 (En Banc)]. 287 See Section 4, Rule 65, as amended by Circular No. 39-98 [effective Sept. 1, 1998] and further amended by A. M. No. 00-2-03-SC [effective Sept. 1, 2000]; Labao v. Flores, G.R. No. 187984, Nov. 15, 2010; Laguna Metts Corporation v. CA, G.R. No. 185220, July 27, 2009, 594 SCRA

139, 143, citing De Los Santos v. CA, G.R. No. 147912, April 26, 2006, 488 SCRA 351; Yutingco v. CA, 435 Phil. 83, 91 [2002]. 288 Tirazona v. CA, G.R. No. 169712, March 13, 2008.



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=========================== TOPIC UNDER THE SYLLABUS: 9. Supreme Court a. Rule 45, Rules of Court ===========================

1. APPEAL FROM THE COURT OF APPEALS TO THE SUPREME COURT – BY PETITION FOR REVIEW ON CERTIORARI UNDER RULE 45.

a. Rule 45 petitions, the mode of elevating a case from the Court of Appeals to the Supreme Court. Since the Court of Appeals has jurisdiction over the petition for certiorari under Rule 65 that may be filed

before it from the decisions of the NLRC, any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by means of a timely appeal to the Supreme Court and not by a special civil action of certiorari. Such appeal from a final disposition of the Court of Appeals is a petition for review on certiorari under Rule 45 and not a special civil action of certiorari under Rule 65 of the Rules of Court.

b. Some principles on Rule 45, Rules of Court. 1. Reglementary period to appeal is 15 days from notice of judgment or denial of the motion for

reconsideration.290 2. A petition for certiorari under Rule 65 cannot be a substitute for a lost appeal under Rule 45; hence, it should

be dismissed.291 3. A party cannot file a petition both under Rules 45 and 65.292

============================ TOPIC UNDER THE SYLLABUS: 10. Prescription of Actions a. Money claims b. Illegal dismissal c. Unfair labor practice d. Offenses penalized by the Labor Code and IRR issued pursuant thereto ============================

1. PRESCRIPTIVE PERIOD OF MONEY CLAIMS CASES.

a. Prescriptive period is three (3) years under Article 291 of the Labor Code. The prescriptive period of all money claims and benefits arising from employer‐employee relations is 3 years

from the time the cause of action accrued; otherwise, they shall be forever barred.293

b. All money claims of workers prescribe in 3 years. Article 291 contemplates all money claims arising from employer‐employee relationship, including: 1. Money claims arising from the CBA.294 2. Money claims of Overseas Filipino Workers (OFWs).295 3. Incremental proceeds from tuition increases.296

2. PRESCRIPTIVE PERIOD OF ILLEGAL DISMISSAL CASES.

a. Legal basis is not Article 291 of the Labor Code but Article 1146 of the Civil Code. The 3‐year prescriptive period in Article 291 solely applies to money claims but not to illegal dismissal cases

which are not in the nature of money claims. The prescriptive period of illegal dismissal cases is 4 years under Article 1146 of the Civil Code.297

3. PRESCRIPTIVE PERIOD OF UNFAIR LABOR PRACTICE (ULP) CASES.

a. Prescriptive period of ULP cases is 1 year (Article 290, Labor Code). The prescriptive period for all complaints involving unfair labor practices is one (1) year from the time the acts

complained of were committed; otherwise, they shall be forever barred.298

b. Pre‐requisite for prosecution of criminal cases. Before a criminal action for ULP may be filed, it is a condition sine qua non that a final judgment finding that an

unfair labor practice act was committed by the respondent should first be secured or obtained in the labor or administrative case initiated before the Labor Arbiter or the Voluntary Arbitrator, as the case may be.299 Final judgment is one that finally disposes of the action or proceeding. For instance, if the remedy of appeal is available but no appeal is

289 Ginete v. Sunrise Manning Agency, [G.R. No. 142023, June 21, 2001]. 290 Asian Transmission Corporation v. CA, G.R. No. 144664, March 15, 2004; See also Tirazona v. CA, G.R. No. 169712, March 13, 2008; San Miguel Corporation v. CA, G.R. No. 146775, Jan. 30, 2002, 375 SCRA 311, 315. 291 Malayang Kapisanan ng Manggagawa sa Associated Anglo American Tobacco Corp. [MAKAMANGGAGAWA] v. Associated Anglo American Tobacco Corp., G.R. No. 156613, Feb. 18, 2008; New Ever Marketing, Inc. v. CA, G.R. No. 140555, July 14, 2005, 463 SCRA 284, 293-294. 292 Nagkahiusang Mamumuo sa Picop Resources, Inc.-Southern Philippines Federation of Labor [NAMAPRI-SPFL] v. The Hon. CA, G.R. Nos. 148839-40, Nov. 2, 2006; See also Panganiban v. Tara Trading Shipmanagement, Inc., [G.R. No. 187032, October 18, 2010]. 293 Section 1, Rule II, Book VII, Rules to Implement the Labor Code; E. Ganzon, Inc. v. NLRC, G.R. No. 123769, Dec. 22, 1999; Surima v. NLRC, G.R. No. 121147, June 26, 1998. 294 Cadalin v. POEA, [G.R. Nos. 104776, 104911-14 and 105029-32, December 05, 1994]. 295 Degamo v. Avantgarde Shipping Corp., [G.R. No. 154460, November 22, 2005]; Southeastern Shipping v. Navarra, Jr., [G.R. No. 167678, June 22, 2010]; Medline Management, Inc. v. Roslinda, [G.R. No. 168715, September 15, 2010]. 296 University of Pangasinan v. Confesor, G. R. No. 109977, Sept. 5, 1997; Cebu Institute of Technology v. Ople, G.R. No. L-58870, April 15, 1988, 160 SCRA 503. 297 Callanta v. Carnation Philippines, [G.R. No. 70615, February 29, 1986]; See also PLDT v. Pingol, [G.R. No. 182622, September 8, 2010]; Azcor Manufacturing, Inc. v. NLRC, G.R. No. 117963, Feb. 11, 1999; Premiere Development Bank v. NLRC, G.R. No. 114695, July 23, 1998;

Hagonoy Rural Bank, Inc. v. NLRC, G.R. No. 122075, Jan. 28, 1998, 285 SCRA 297. 298 Paragraph 2, Article 290, Labor Code; Section 2, Rule II, Book VII, Rules to Implement the Labor Code. 299 As provided under Article 247 of the Labor Code.



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made, then, the judgment is deemed final and executory. If an appeal is made, then the final judgment rendered by the last tribunal, say the Supreme Court, to which the case was elevated should be the reckoning factor.

c. Interruption of prescriptive period of offenses. As far as ULP cases are concerned, the running of the one (1) year prescriptive period is interrupted during the

pendency of the administrative proceeding.300

d. Evidentiary value of the final judgment in the labor case. In ULP cases, the final judgment in the administrative case cannot be presented as evidence of the facts proven

therein or as evidence of the guilt of the respondent therein. Its evidentiary or probative value is confined merely in proving the fact of compliance with the condition sine qua non prescribed by law, i.e., that a final judgment has been secured in the administrative proceeding finding that an unfair labor practice act was in fact committed by the respondent.301

4. PRESCRIPTIVE PERIOD OF OFFENSES PENALIZED UNDER THE LABOR CODE AND ITS IMPREMENTING RULES AND REGULATIONS (IRR).

a. Prescriptive period is 3 years (Article 290, Labor Code). The prescriptive period of all criminal offenses penalized under the Labor Code and the Rules to Implement the

Labor Code is three (3) years from the time of commission thereof.

b. Consequence of non‐compliance with prescriptive period under Article 290. Failure to initiate or file the criminal action or complaint within the prescriptive period shall forever bar such

action.

c. Illegal dismissal is not an “offense” under Article 290. The act of the employer in dismissing an employee without cause, although a violation of the Labor Code and

its implementing rules, does not amount to an “offense” as this term is understood and contemplated under Article 290.302

5. ACCRUAL OF CAUSE OF ACTION.

a. Cause of action, elements. The prescriptive period provided under the law commences to run only upon the accrual of the cause of

action. The three (3) elements of a cause of action are as follows: 1. A right in favor of the plaintiff by whatever means and under whatever law it arises or is created; 2. An obligation on the part of the named defendant to respect or not to violate such right; and 3. An act or omission on the part of such defendant violative of the right of the plaintiff or constituting a

breach of the obligation of the defendant to the plaintiff.303

b. When a cause of action accrues. An action does not accrue until the party obligated to do or perform an act, refuses, expressly or impliedly, to

comply with the duty. Generally, without a demand for compliance and the consequent refusal by the party obligated to comply therewith, the cause of action cannot be deemed to have accrued.

5.1. ACCRUAL OF CAUSE OF ACTION IN MONEY CLAIMS CASES.

a. Meaning of “accrued” cause of action in money claims cases under Article 291; general rule. The general rule is that all money claims arising from an employer‐employee relationship shall be filed within

three (3) years from the time the cause of action accrued; otherwise, they shall be forever barred. This means that if it is established that the benefits being claimed have been withheld from the employee for a period longer than three (3) years, the amount pertaining to the period beyond the three‐year prescriptive period is barred by prescription. The amount that can only be demanded by the aggrieved employee shall be limited to the amount of the benefits withheld within three (3) years before the filing of the complaint.304

b. Exception. A cause of action for money claims accrues upon the categorical denial of a claim. In other words, to properly

construe Article 291, it is essential to ascertain the time when the third (3rd) element of a cause of action transpired. Stated differently, in the computation of the 3‐year prescriptive period, a determination must be made as to the period when the act constituting a violation of the workers’ right to the benefits being claimed was committed. For if the cause of action accrued more than three (3) years before the filing of the money claim, such cause of action has already prescribed in accordance with Article 291.305

Serrano v. CA, [G.R. No. 139420, August 15, 2001, 363 SCRA 223]. It was declared here that the cause of action of petitioner has not yet prescribed. The antecedent facts indicate

that from 1974 to 1991, respondent Maersk‐Filipinas Crewing, Inc., the local agent of respondent foreign corporation, A.P. Moller, deployed petitioner Serrano as a seaman to Liberian, British and Danish ships. As petitioner was on board a

300 Id. 301 Id. 302 Callanta v. Carnation Philippines, Inc., G.R. No. 70615, Feb. 29, 1986. 303 “J” Marketing Corporation v. Taran, G.R. No. 163924, June 18, 2009, 589 SCRA 428, 440, citing Auto Bus Transport System, Inc. v. Bautista, G.R. No. 156367, May 16, 2005; Mendoza v. NLRC, G.R. No. 122481, March 5, 1998, 287 SCRA 51. 304 Far East Agricultural Supply, Inc. v. Lebatique, G.R. No. 162813, Feb. 12, 2007. 305 Article 291, Labor Code; Degamo v. Avantgarde Shipping Corp., [G.R. No. 154460, November 22, 2005].



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ship most of the time, respondent Maersk offered to send portions of petitioner’s salary to his family in the Philippines. The amounts would be sent by money order. Petitioner agreed to such arrangement and from 1977 to 1978, he instructed respondent Maersk to send money orders to his family. Respondent Maersk deducted the amounts of these money orders totaling HK$4,600.00 and £1,050.00 Sterling Pounds from petitioner’s salary. Respondent Maersk also deducted various amounts from his salary for Danish Social Security System (SSS), welfare contributions, ship club, and SSS Medicare.

It appears that petitioner’s family failed to receive the money orders petitioner sent through respondent Maersk. Upon learning this in 1978, petitioner demanded that respondent Maersk pay him the amounts the latter deducted from his salary. Respondent Maersk assured him that they would look into the matter, then assigned him again to board one of its vessels. Whenever he returned to the Philippines, petitioner would go to the office of respondent Maersk to follow up his money claims but he would be told to return after several weeks as respondent Maersk needed time to verify its records and to bring up the matter with its principal employer, respondent A.P. Moller. Meantime, respondent Maersk would hire him again to board another one of its vessels for about a year. Finally, in October 1993, petitioner wrote to respondent Maersk demanding immediate payment to him of the total amount of the money orders deducted from his salary from 1977 to 1978. On November 11, 1993, respondent A.P. Moller replied to petitioner that it keeps accounting documents only for a certain number of years, thus data on his money claims from 1977 to 1978 were no longer available. Likewise, it claimed that it had no outstanding money orders. A.P. Moller declined petitioner’s demand for payment. In ruling that the cause of action has not yet prescribed, the Supreme Court declared:

“The facts in the case at bar are similar to the Baliwag case (Baliwag Transit, Inc. v. Ople, [G. R. No. 57642, March 16, 1989]). Petitioner repeatedly demanded payment from respondent Maersk but similar to the actuations of Baliwag Transit in the above cited case, respondent Maersk warded off these demands by saying that it would look into the matter until years passed by. In October 1993, Serrano finally demanded in writing payment of the unsent money orders. Then and only then was the claim categorically denied by respondent A.P. Moller in its letter dated November 22, 1993. Following the Baliwag Transit ruling, petitioner’s cause of action accrued only upon respondent A.P. Moller’s definite denial of his claim in November 1993. Having filed his action five (5) months thereafter or in April 1994, it was held that it was filed within the three‐year (3) prescriptive period provided in Article 291 of the Labor Code.”

Philippine National Construction Corporation [PNCC] v. NLRC, [G.R. No. 100353, October 22, 1999]. The complainant was not dismissed but merely asked to go on vacation in May, 1985. It was only on August 16,

1989 that he was informed of the termination of his services. Hence, it was held that when he brought his complaint in 1989, his cause of action was not yet barred by prescription. It was within the three‐year prescriptive period under Article 291 of the Labor Code.

Degamo v. Avantgarde Shipping Corp., [G.R. No. 154460, November 22, 2005]. Petitioner OFW was repatriated to the Philippines on March 4, 1995 due to an accident requiring surgery and

hospitalization. Immediately upon his arrival, petitioner reported to respondent Avantgarde’s office, but since it was a Saturday and there was no one to assist him, he went to his relatives in Cebu and was operated at Metro Cebu Community Hospital. Later, on December 24, 1997, petitioner asked Avantgarde to pay his sickness benefits. On January 6, 1998, Avantgarde replied that it could no longer act on petitioner’s claim as he had deviated from the legal procedure and, should he wish, he could personally follow‐up with its foreign principal, Johnson Management, Pte., Ltd. On March 4, 1998 and May 5, 1998, petitioner wrote a letter to Sembawang regarding his claim. Sembawang did not reply.

On March 2, 2001, petitioner lodged a complaint for payment of disability benefits and other money claims against the respondents with the Labor Arbiter who dismissed the case on the ground of prescription. On appeal, the NLRC likewise ruled that petitioner’s cause of action had prescribed as a mere letter of demand would not toll the prescriptive period for filing the complaint. Petitioner’s motion for reconsideration was denied.

In affirming the said ruling, the Supreme Court ruled that a cause of action accrues upon the categorical denial of the claim. Consequently, petitioner’s cause of action accrued only on January 6, 1998, when Avantgarde denied his claim and so breached its obligation to petitioner. Petitioner could not have a cause of action prior to this date because his earlier requests were warded off by indefinite promises. Unfortunately, the complaint filed in this case on March 2, 2001 was already beyond the three‐year prescriptive period mandated by the Labor Code.

c. Different prescriptive rule for service incentive leave. The Supreme Court clarified in Auto Bus Transport System, Inc. v. Bautista, [G.R. No. 156367, May 16, 2005],

the correct reckoning of the prescriptive period for service incentive leave, considering that “the service incentive leave is a curious animal in relation to other benefits granted by the law to every employee” because “in the case of service incentive leave, the employee may choose to either use his leave credits or commute them to their monetary equivalent if not exhausted at the end of the year. Furthermore, if the employee entitled to service incentive leave does not use or commute the same, he is entitled upon his resignation or separation from work to the commutation of his accrued service incentive leave.”

Applying Article 291 of the Labor Code as well as the three (3) elements of a cause of action [supra], the Supreme Court ruled:



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“Correspondingly, it can be conscientiously deduced that the cause of action of an entitled employee to claim his service incentive leave pay accrues from the moment the employer refuses to remunerate its monetary equivalent if the employee did not make use of said leave credits but instead chose to avail of its commutation. Accordingly, if the employee wishes to accumulate his leave credits and opts for its commutation upon his resignation or separation from employment, his cause of action to claim the whole amount of his accumulated service incentive leave shall arise when the employer fails to pay such amount at the time of his resignation or separation from employment.

“Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive leave, we can conclude that the three (3)‐year prescriptive period commences, not at the end of the year when the employee becomes entitled to the commutation of his service incentive leave, but from the time when the employer refuses to pay its monetary equivalent after demand of commutation or upon termination of the employee’s services, as the case may be.

XXX

“In the case at bar, respondent had not made use of his service incentive leave nor demanded for its commutation until his employment was terminated by petitioner. Neither did petitioner compensate his accumulated service incentive leave pay at the time of his dismissal. It was only upon his filing of a complaint for illegal dismissal, one month from the time of his dismissal, that respondent demanded from his former employer commutation of his accumulated leave credits. His cause of action to claim the payment of his accumulated service incentive leave thus accrued from the time when his employer dismissed him and failed to pay his accumulated leave credits.

“Therefore, the prescriptive period with respect to his claim for service incentive leave pay only commenced from the time the employer failed to compensate his accumulated service incentive leave pay at the time of his dismissal. Since respondent had filed his money claim after only one month from the time of his dismissal, necessarily, his money claim was filed within the prescriptive period provided for by Article 291 of the Labor Code.” [Underscoring supplied]

Following the ruling in Auto Bus [supra], it was held in Far East Agricultural Supply, Inc. v. Lebatique, [G.R. No. 162813, February 12, 2007], that Lebatique timely filed his claim for service incentive leave pay, considering that in this situation, the prescriptive period commences at the time he was terminated. On the other hand, his claim regarding non‐payment of overtime pay since he was hired in March 1996 is a different matter. In the case of overtime pay, he can only demand for the overtime pay withheld for the period within three (3) years preceding the filing of the complaint on March 20, 2000.

d. Filing of a case with grievance machinery tolls the running of the prescriptive period. A monetary claim cannot be considered to have prescribed if within the 3‐year period, it was submitted to the

grievance committee as provided under the CBA.306

5.2. ACCRUAL OF CAUSE OF ACTION IN ILLEGAL DISMISSAL CASES.

It is settled that in illegal dismissal cases, the cause of action accrues from the time the employment of the worker was unjustly terminated. Thus, as a general rule, the 4‐year prescriptive period shall be counted and computed from the date of the employee’s dismissal up to the date of the filing of complaint for unlawful termination of employment.307

Baliwag Transit, Inc. v. Ople, [G.R. No. 57642, March 16, 1989]. A bus of petitioner Baliwag Transit driven by the respondent driver figured in an accident with a train of the

Philippine National Railways (PNR) on August 10, 1974. This resulted to the death of eighteen (18) passengers and caused serious injuries to fifty‐six (56) other passengers. The bus itself also sustained extensive damage. The bus company instituted a complaint against the PNR. The latter was held liable for its negligence in the decision rendered on April 6, 1977. The respondent driver was absolved of any contributory negligence. However, the driver was also prosecuted for multiple homicide and multiple serious physical injuries, but the case was provisionally dismissed in March 1980 for failure of the prosecution witness to appear at the scheduled hearing. Soon after the PNR decision was rendered, the driver renewed his license and sought reinstatement with Baliwag Transit. He was advised to wait until his criminal case was terminated. He repeatedly requested for reinstatement thereafter, but to no avail, even after termination of the criminal case against him. Finally, on May 2, 1980, he demanded reinstatement in a letter signed by his counsel. On May 10, 1980, petitioner Baliwag Transit replied that he could not be reinstated as his driver’s license had already been revoked and his driving was “extremely dangerous to the riding public.” This prompted respondent driver to file on July 29, 1980, a formal complaint with the Ministry of Labor and Employment for illegal dismissal against Baliwag Transit praying for reinstatement with backwages and emergency cost‐of‐living allowance. The complaint was dismissed by the Regional Director308 on the ground of prescription under Article 291 of the Labor Code. This was reversed by then Labor and Employment Minister Blas F. Ople. On appeal to the Supreme Court, it was ruled that the action has not yet prescribed at the time of the filing of the complaint, viz.:

“We hold that the private respondent’s right of action could not have accrued from the mere fact of the occurrence of the mishap on August 10, 1974, as he was not considered

306 Central Negros Electric Cooperative, Inc. [CENECO] v. NLRC, [G.R. No. 106246, September 1, 1994]. 307 Ramos v. Our Lady of Peace School, G.R. No. L-55950 Dec. 26, 1984, 218 Phil. 708, 712; Baliwag Transit, Inc. v. Ople, infra. 308 It was the Regional Director who has jurisdiction over illegal dismissal cases at that time.



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automatically dismissed on that date. At best, he was deemed suspended from his work, and not even by positive act of the petitioner but as a result of the suspension of his driver’s license because of the accident. There was no apparent disagreement then between (respondent driver) Hughes and his employer. As the private respondent was the petitioner’s principal witness in its complaint for damages against the Philippine National Railways, we may assume that Baliwag Transit and Hughes were on the best of terms when the case was being tried. Hence, there existed no justification at that time for the private respondent to demand reinstatement and no opportunity warrant (sic) either for the petitioner to reject that demand.

“We agree with private respondent that May 10, 1980 is the date when his cause of action accrued, for it was then that the petitioner denied his demand for reinstatement and so committed that act or omission ‘constituting a breach of the obligation of the defendant to the plaintiff.’ The earlier requests by him having been warded off with indefinite promises, and the private respondent not yet having decided to assert his right, his cause of action could not be said to have then already accrued. The issues had not yet been joined, so to speak. This happened only when the private respondent finally demanded reinstatement on May 2, 1980, and his demand was categorically rejected by the petitioner on May 10, 1980.”

Victory Liner, Inc. v. Race, [G.R. No. 164820, March 28, 2007]. The rule was reiterated here that the 4‐year prescriptive period shall commence to run only upon the accrual of

the cause of action of the worker. In this case, the respondent‐employee was a bus driver who figured in an accident on the night of August 24, 1994. As a consequence thereof, respondent suffered a fractured left leg and was rushed to a hospital where he was operated on and confined from August 24, 1994 up to October 10, 1994. One (1) month after his release from the said hospital, the respondent was confined again for further treatment of his fractured left leg at another hospital. His confinement therein lasted a month. In January 1998, the respondent, still limping heavily, went to the petitioner’s office to report for work. He was, however, informed by the petitioner that he was considered resigned from his job. In holding that the cause of action of respondent has not yet prescribed, the Supreme Court stated that The respondent must be considered as unjustly terminated from work in January 1998 since this was the first time he was informed by the petitioner that he was deemed resigned from his work. Thus, it was only at this time that the respondent’s cause of action accrued. Consequently, the respondent’s filing of complaint for illegal dismissal on 1 September 1999 was well within the four‐year prescriptive period.

6. INTERRUPTION OF RUNNING OF PRESCRIPTIVE PERIOD.

Like other causes of action, the prescriptive period for money claims is subject to interruption, and in the absence of an equivalent Labor Code provision for determining whether the said period may be interrupted, Article 1155 of the Civil Code may be applied.309

The said provision states: “Article 1155. The prescription of actions is interrupted when they are filed before the Court,

when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor.” Thus, the prescription of an action is interrupted by: (a) the filing of an action; (b) a written extrajudicial demand by the creditor; and (c) a written acknowledgment of the debt by the debtor.

Intercontinental Broadcasting Corp. v. Panganiban, [G.R. No. 151407, February 6, 2007]. In this case, while the filing earlier by respondent of a civil case for non‐payment of his unpaid commissions

could have interrupted the running of the 3‐year prescriptive period, its consequent dismissal by the Court of Appeals due to lack of jurisdiction effectively canceled the tolling of the prescriptive period within which to file his money claim, leaving respondent in exactly the same position as though no civil case had been filed at all. The running of the 3‐year prescriptive period not having been interrupted by the filing of the civil case, respondent’s cause of action had already prescribed on September 2, 1991, three (3) years after his cessation of employment on September 2, 1988. Consequently, when respondent filed his complaint for illegal dismissal, separation pay, retirement benefits and damages in July 24, 1996, his claim clearly had already been barred by prescription.

PLDT v. Pingol, [G.R. No. 182622, September 8, 2010]. Respondent was dismissed by petitioner on January 1, 2000. Respondent Pingol cited the same date of

dismissal in his complaint before the Labor Arbiter. The Labor Arbiter dismissed his complaint on the ground of prescription because at the time he filed it on March 29, 2004, four (4) years and three (3) months had already elapsed. Respondent, however, claimed that between 2001 and 2003, he made follow‐ups with PLDT management regarding his benefits. This, to his mind, tolled the running of the prescriptive period. Citing the same Article 1155 and following the ruling in Intercontinental Broadcasting [supra], the Supreme Court held that respondent’s cause of action had already prescribed because he never made any written extrajudicial demand. Neither did petitioner make any written acknowledgment of its alleged obligation. Thus, respondent’s claimed “follow‐ups” could not have validly tolled the

309 Intercontinental Broadcasting Corp. v. Panganiban, [G.R. No. 151407, February 6, 2007]; See also De Guzman v. CA, G.R. No. 132257, Oct. 12, 1998, 297 SCRA 743; 358 Phil. 397, 407-408.

Article 291 – Money Claims



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running of the prescriptive period. More so when respondent never presented any proof to substantiate his allegation of follow‐ups.

7. PRINCIPLE OF PROMISSORY ESTOPPEL AS APPLIED TO LABOR CASES.

a. Principle of promissory estoppel, an exception to Article 291. The principle of promissory estoppel is a recognized exception to the three‐year prescriptive period enunciated

in Article 291 of the Labor Code.310 Promissory estoppel may arise from the making of a promise, even though without consideration, if it was

intended that the promise should be relied upon, as in fact it was relied upon, and if a refusal to enforce it would virtually sanction the perpetration of fraud or would result in other injustice.311

b. Elements of promissory estoppel. In order to make out a claim of promissory estoppel, a party bears the burden of establishing the following

elements: (1) a promise was reasonably expected to induce action or forbearance; (2) such promise did, in fact, induce such action or forbearance; and (3) the party suffered detriment as a result.312

Accessories Specialist, Inc. v. Alabanza, [G.R. No. 168985, July 23, 2008]. All the foregoing requisites of promissory estoppel are present in this case. Respondent is the wife of Jones

Alabanza, former Vice‐President, Manager and Director of petitioner (ASI), who died without receiving his money claims consisting in unpaid salaries, separation pay and 13th month pay. Jones rendered outstanding services for the petitioners from 1975 to October 1997. On October 17, 1997, Jones was compelled by the owner of ASI, herein petitioner Tadahiko Hashimoto, to file his involuntary resignation on the ground that ASI allegedly suffered losses due to lack of market and incurred several debts caused by a slam in the market. At the time of his resignation, Jones had unpaid salaries for eighteen (18) months from May 1995 to October 1997 equivalent to P396,000.00 and US$38,880.00. He was likewise not paid his separation pay commensurate to his 21 years of service in the amount of P462,000.00 and US$45,360.00 and 13th month pay amounting to P33,000.00. Jones demanded payment of his money claims upon resignation but ASI informed him that it would just settle first the money claims of the rank‐ and‐file employees, and his claims will be paid thereafter. Knowing the predicament of the company, Jones patiently waited for his turn to be paid. Several demands were made by Jones but ASI just kept on assuring him that he will be paid his monetary claims. Jones died on August 5, 2002 and failed to receive the same.

In holding that the principle of promissory estoppel applies to this case, the Supreme Court noted that Jones relied on the promise of ASI that he would be paid as soon as the claims of all the rank‐and‐file employees had been paid. If not for this promise that he had held on to until the time of his death, there is no reason why he would delay filing the complaint before the Labor Arbiter. Thus, there is ample justification not to follow the prescriptive period imposed under Article 291 of the Labor Code. Great injustice will be committed if the employee’s claims would be brushed aside on a mere technicality, especially when it was petitioner’s own action that prevented respondent from interposing the claims within the required period.

8. DOCTRINE OF LACHES AS APPLIED TO LABOR CASES.

a. Concept. Laches is the failure for an unreasonable and unexplained length of time to do that which, in exercising due

diligence, could or should have been done earlier. It is negligence or omission to assert a right within a reasonable time, warranting the presumption that the party entitled to assert it either has abandoned or has declined to assert it. The doctrine of laches or “stale demands” is based upon the ground of public policy which requires, for the peace of society, discouragement of stale claims. And unlike the statute of limitations, it is not a mere question of time but is principally a question of inequity or unfairness of permitting a right or claim to be enforced or asserted.313

Thus, the doctrine of laches presumes that the party guilty of negligence had the opportunity to do what should have been done but failed to do so. Conversely, if the said party did not have the occasion to assert the right, then he cannot be adjudged guilty of laches. Laches is not concerned with the mere lapse of time; rather the party must have been afforded an opportunity to pursue his claim in order that the delay may sufficiently constitute laches.314

In labor cases, laches may be applied only upon the most convincing evidence of deliberate inaction, for the rights of laborers are protected under the social justice provisions of the Constitution and under the Civil Code.315

b. Laches and prescription, distinguished. Laches is a doctrine in equity while prescription is based on law. Our courts are basically courts of law, not

courts of equity. Thus, laches cannot be invoked to resist the enforcement of an existing legal right. It is a long standing principle that equity follows the law. Courts exercising equity jurisdiction are bound by rules of law and have no arbitrary discretion to disregard them.

Laches cannot be invoked to bar a cause of action which was filed within the prescriptive period allowed by law. Thus, where the claim was filed within the 3‐year statutory period, recovery therefor cannot be barred by laches.

310 Accessories Specialist, Inc. v. Alabanza, G.R. No. 168985, July 23, 2008. 311 Ramos v. Central Bank of the Philippines, G.R. No. L-29352, Oct. 4, 1971, 41 SCRA 565. 312 Mendoza v. CA, G.R. No. 116710, June 25, 2001, 412 Phil. 14, 29. 313 Gandara Mill Supply v. NLRC, G.R. No. 126703, Dec. 29, 1998; Premiere Development Bank v. NLRC, G.R. No. 114695, July 23, 1998. 314 Placewell International Services Corp. v. Camote, G.R. No. 169973, June 26, 2006; Juco v. Heirs of Tomas Siy Chung Fu, G.R. No. 150233, Feb. 16, 2005, 451 SCRA 464, 471-472; Premiere Development Bank v. NLRC, supra. 315 Hagonoy Rural Bank, Inc. v. NLRC, G.R. No. 122075, Jan. 28, 1998, 285 SCRA 297.



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Courts should never apply the doctrine of laches earlier than the expiration of time limited for the commencement of actions at law.316

Chua v. CA, [G.R. No. 125837, October 6, 2004]. It was held here that there is no laches where there is no proof that private respondent‐employees had failed

or neglected to assert their right, considering that they filed their claim within the period prescribed by law. Placewell International Services Corp. v. Camote, [G.R. No. 169973, June 26, 2006]. The doctrine of laches was not applied since respondent filed his claim within the 3‐year prescriptive period for

the filing of money claims set forth in Article 291 of the Labor Code.

END OF DISCUSSION ON TOPIC H. PROCEDURE AND JURISDICTION

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316 Mendoza v. NLRC, G. R. No. 122481, March 5, 1998.



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