G.R. No. 78909 June 30, 1989Maternity Children’s Hospital vs. Secretary ofLabor

EN BANC: MEDIALDEA, J.:

Facts:

Petitioner is a semi-government hospital, managed bythe Board of Directors of the Cagayan de OroWomen's Club and Puericulture Center, headed byMrs. Antera Dorado, as holdover President. Thehospital derives its finances from the club itself as wellas from paying patients, averaging 130 per month. Itis also partly subsidized by the Philippine CharitySweepstakes Office and the Cagayan De Oro Citygovernment.

Petitioner has forty-one (41) employees. Aside fromsalary and living allowances, the employees are givenfood, but the amount spent therefor is deducted fromtheir respective salaries

On May 23, 1986, ten (10) employees of the petitioneremployed in different capacities/positions filed acomplaint with the Office of the Regional Director ofLabor and Employment, Region X, for underpaymentof their salaries and ECOLAS, which was docketed asROX Case No. CW-71-86.

On June 16, 1986, the Regional Director directed twoof his Labor Standard and Welfare Officers to inspectthe records of the petitioner to ascertain the truth ofthe allegations in the complaints. Based on theirinspection report and recommendation, the RegionalDirector issued an Order dated August 4, 1986,directing the payment of P723,888.58, representingunderpayment of wages and ECOLAs to all thepetitioner's employees.

Petitioner appealed from this Order to the Minister ofLabor and Employment, Hon. Augusto S. Sanchez,who rendered a Decision on September 24, 1986,modifying the said Order in that deficiency wages andECOLAs should be computed only from May 23, 1983to May 23, 1986,

On October 24, 1986, the petitioner filed a motion forreconsideration which was denied by the Secretary ofLabor in his Order dated May 13, 1987, for lack ofmerit.

Issue:

Whether or not the Regional Director had jurisdictionover the case and if so, the extent of coverage of anyaward that should be forthcoming, arising from hisvisitorial and enforcement powers under Article 128 ofthe Labor Code.

Held:

This is a labor standards case, and is governed byArt. 128-b of the Labor Code, as amended by E.O.No. 111. Under the present rules, a Regional Directorexercises both visitorial and enforcement power overlabor standards cases, and is therefore empowered toadjudicate money claims, provided there still exists anemployer-employee relationship, and the findings ofthe regional office is not contested by the employerconcerned.

Labor standards refer to the minimum requirementsprescribed by existing laws, rules, and regulationsrelating to wages, hours of work, cost of livingallowance and other monetary and welfare benefits,including occupational, safety, and health standards(Section 7, Rule I, Rules on the Disposition of Labor

Standards Cases in the Regional Office, datedSeptember 16, 1987).

Decision:

ACCORDINGLY, this petition should be dismissed, asit is hereby DISMISSED, as regards all persons stillemployed in the Hospital at the time of the filing of thecomplaint, but GRANTED as regards thoseemployees no longer employed at that time. SOORDERED.

Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras,Feliciano, Gancayco, Padilla, Bidin, Cortes, Griño-Aquino and Regalado, JJ., concur

G.R. No. 132564 October 20, 1999

SAMEER OVERSEAS PLACEMENT AGENCY,INC., petitioner, vs. NATIONAL LABOR RELATIONSCOMMISSION, Third Division, Q.C. and PRISCILAENDOZO, respondents.

FACTS:Private respondent Endozo was employed asdomestic helper in Taiwan. The employment contractwas for a definite period of one (1) year, with six (6)months probationary period. She stayed in Taiwanonly for eleven (11) days as her employer terminatedher services, and sent her home for allegedincompetence. Hence, private respondent filed withthe Philippine Overseas Employment Administration acomplaint against petitioner for illegal dismissal.Consequently, respondent's claim was transferred tothe National Labor Relations Commission, ArbitrationBranch, in San Pablo City.ISSUE:Whether the employer in Taiwan could lawfullyterminate private respondent's employment asdomestic helper for incompetence during theprobationary period of her employment.HELD:

It is an elementary rule in the law on labor relationsthat even a probationary employee is entitled tosecurity of tenure. A probationary employee can notbe terminated, except for cause.

In this case, the employment contract was for adefinite period of one (1) year, with six (6) monthsprobationary period. After only eleven days of work,the employer dismissed private respondent withoutjust cause.

A probationary employee may be terminated on twogrounds: (a) for just cause or (b) when he fails toqualify as a regular employee in accordance withreasonable standards made known by the employerto the employee at the time of his engagement.Under the contract of employment, the employer mayterminate the services of private respondent duringthe probationary period for "being found losing abilityto work." However, "the power of the employer toterminate a probationary employment contract issubject to limitations. First, it must be exercised inaccordance with the specific requirements of thecontract. Secondly, the dissatisfaction of the employermust be real and in good faith, not feigned so as tocircumvent the contract or the law; and thirdly, theremust be no unlawful discrimination in the dismissal."In termination cases, the burden of proving just orvalid cause for dismissing an employee rests on theemployer. In this case, petitioner was not able topresent convincing proof establishing respondentEndozo's alleged incompetence.

G.R. No. 47800 2 December 1940Calalang vs. Williams

FIRST DIVISION, LAUREL (J): 4 CONCUR

Facts:

A resolution by the National Traffice Commission thatanimal drawn vehicles be prohibited from passingalong Rosario Street extending from Plaza Calderonde la Barca to Dasmariñas Street, from 7:30 a.m. to12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and alongRizal Avenue extending from the railroad crossing atAntipolo Street to Echague Street, from 7 a.m. to 11p.m., for a period of one year from the date of theopening of the Colgante Bridge to traffic wasapproved and adopted by the Secretary of PublicWorks and Communications upon indorsement by theDirector of Public Works pursuant to CommonwealthAct 548 with modifications that Rosario Street andRizal Avenue be closed to traffic of animal-drawnvehicles, between the points and during the hours asindicated.

The Mayor of Manila and the Acting Chief of Police ofManila have enforced and caused to be enforced therules and regulations thus adopted. Maximo Calalang,in his capacity as a private citizen and as a taxpayerof Manila, brought before the Supreme Court thepetition for a writ of prohibition against A. D. Williams,as Chairman of the National Traffic Commission;Vicente Fragante, as Director of Public Works; SergioBayan, as Acting Secretary of Public Works andCommunications; Eulogio Rodriguez, as Mayor of theCity of Manila; and Juan Dominguez, as Acting Chiefof Police of Manila.

Issue:

Whether the rules and regulations promulgated by theDirector of Public Works infringe upon theconstitutional precept regarding the promotion ofsocial justice to insure the well-being and economicsecurity of all the people.

Held:

The promotion of social justice is to be achieved notthrough a mistaken sympathy towards any givengroup.

Social justice is "neither communism, nor despotism,nor atomism, nor anarchy," but the humanization oflaws and the equalization of social and economicforces by the State so that justice in its rational andobjectively secular conception may at least beapproximated. Social justice means the promotion ofthe welfare of all the people, the adoption by theGovernment of measures calculated to insureeconomic stability of all the competent elements ofsociety, through the maintenance of a propereconomic and social equilibrium in the interrelationsof the members of the community, constitutionally,through the adoption of measures legally justifiable, orextra-constitutionally, through the exercise of powersunderlying the existence of all governments on thetime-honored principle of salus populi est supremalex.

Social justice, therefore, must be founded on therecognition of the necessity of interdependenceamong divers and diverse units of a society and of theprotection that should be equally and evenly extendedto all groups as a combined force in our social andeconomic life, consistent with the fundamental andparamount objective of the state of promoting thehealth, comfort, and quiet of all persons, and ofbringing about "the greatest good to the greatestnumber."

Decision:

IN VIEW OF THE FOREGOING, the Writ ofProhibition Prayed for is hereby denied, with costsagainst the petitioner. So ordered.

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

G.R. No. L-2089 October 31, 1949JUSTA G. GUIDO, petitioner, vs. RURALPROGRESS ADMINISTRATION, c/o FAUSTINOAGUILAR, Manager, Rural ProgressAdministration,respondent.

TUASON, J.:This a petition for prohibition to prevent the RuralProgress Administration and Judge Oscar Castelo ofthe Court of First Instance of Rizal from proceedingwith the expropriation of the petitioner Justa G.Guido's land, two adjoining lots, part commercial, witha combined area of 22,655 square meters, situated inMaypajo, Caloocan, Rizal, just outside the northManila boundary, on the main street running from thiscity to the north. Four grounds are adduced in supportof the petition, to wit:(1) That the respondent RPA (Rural ProgressAdministration) acted without jurisdiction or corporatepower in filling the expropriation complaint and has noauthority to negotiate with the RFC a loan ofP100,000 to be used as part payment of the value ofthe land.(2) That the land sought to be expropriated iscommercial and therefore excluded within the purviewof the provisions of Act 539.(3) That majority of the tenants have entered with thepetitioner valid contracts for lease, or option to buy atan agreed price, and expropriation would impair thoseexisting obligation of contract.(4) That respondent Judge erred in fixing theprovisional value of the land at P118,780 only and inordering its delivery to the respondent RPA.We will take up only ground No. 2. Our conclusion onthis branch of the case will make superfluous adecision on the other questions raised.Sections 1 and 2 of Commonwealth Act No. 539,copied verbatim, are as follows:SECTION 1. The President of the Philippines isauthorized to acquire private lands or any interesttherein, through purchaser or farms for resale atreasonable prices and under such conditions as hemay fix to theirbona fide tenants or occupants or toprivate individuals who will work the lands themselvesand who are qualified to acquire and own lands in thePhilippines.SEC. 2. The President may designated anydepartment, bureau, office, or instrumentality of theNational Government, or he may organize a newagency to carry out the objectives of this Act. For thispurpose, the agency so created or designated shallbe considered a public corporation.The National Assembly approved this enactment onthe authority of section 4 of Article XIII of theConstitution which, copied verbatim, is as follows:The Congress may authorize, upon payment of justcompensation, the expropriation of lands to besubdivided into small lots and conveyed at cost toindividuals.What lands does this provision have in view? Does itcomprehend all lands regardless of their location,nature and area? The answer is to be found in theexplanatory statement of Delegate Miguel Cuaderno,member of the Constitutional Convention who was theauthor or sponsor of the above-quoted provision. Inthis speech, which was entitled "Large Estates andTrust in Perpetuity" and is transcribed in full inAruego's "The Framing of the Philippine Constitution,"Mr. Cuaderno said:There has been an impairment of public tranquility,and to be sure a continuous of it, because of theexistence of these conflicts. In our folklore theoppression and exploitation of the tenants are vividlyreferred to; their sufferings at the hand of thelandlords are emotionally pictured in our drama; andeven in the native movies and talkies of today, thistheme of economic slavery has been touched upon.In official documents these same conflicts are

narrated and exhaustively explained as a threat tosocial order and stability.But we should go to Rizal inspiration and illuminationin this problem of this conflicts between landlords andtenants. The national hero and his family werepersecuted because of these same conflicts inCalamba, and Rizal himself met a martyr's deathbecause of his exposal of the cause of the tenantclass, because he would not close his eyes tooppression and persecution with his own people asvictims.lawphi1.nêtI ask you, gentlemen of the Convention, knowing thisas you do and feeling deeply as you must feel aregret over the immolation of the hero's life, would younot write in the Constitution the provision on largeestates and trust in perpetuity, so that you would bethe very instrument of Providence to complete thelabors of Rizal to insure domestic tranquility for themasses of our people?If we are to be true to our trust, if it is our purpose indrafting our constitution to insure domestic tranquilityand to provide for the well-being of our people, wecannot, we must fail to prohibit the ownership of largeestates, to make it the duty of the government tobreak up existing large estates, and to provide fortheir acquisition by purchase or through expropriationand sale to their occupants, as has been provided inthe Constitutions of Mexico and Jugoslavia.No amendment was offered and there was no debate.According to Dean Aruego, Mr. Cuaderno's resolutionwas readily and totally approved by the Convention.Mr. Cuaderno's speech therefore may be taken asembodying the intention of the framers of the organiclaw, and Act No. 539 should be construed in amanner consonant with that intention. It is to bepresumed that the National Assembly did not intendto go beyond the constitutional scope of its powers.There are indeed powerful considerations, aside fromthe intrinsic meaning of section 4 of Article XIII of theConstitution, for interpreting Act No. 539 in arestrictive sense. Carried to extremes, this Act wouldbe subversive of the Philippine political and socialstructure. It would be in derogation of individual rightsand the time-honored constitutional guarantee that noprivate property of law. The protection againstdeprivation of property without due process for publicuse without just compensation occupies the forefrontpositions (paragraph 1 and 2) in the Bill for privateuse relieves the owner of his property without dueprocess of law; and the prohibition that "privateproperty should not be taken for public use withoutjust compensation" (Section 1 [par. 2], Article III, ofthe Constitution) forbids necessary implication theappropriation of private property for private uses (29C.J.S., 819). It has been truly said that the assertionof the right on the part of the legislature to take theproperty of and citizen and transfer it to another, evenfor a full compensation, when the public interest is notpromoted thereby, is claiming a despotic power, andone inconsistent with very just principle andfundamental maxim of a free government. (29 C.J.S.,820.)Hand in hand with the announced principle, hereininvoked, that "the promotion of social justice to insurethe well-being and economic security of all the peopleshould be the concern of the state," is a declaration,with which the former should be reconciled, that "thePhilippines is a Republican state" created to secure tothe Filipino people "the blessings of independenceunder a regime of justice, liberty and democracy."Democracy, as a way of life enshrined in theConstitution, embraces as its necessary componentsfreedom of conscience, freedom of expression, andfreedom in the pursuit of happiness. Along with thesefreedoms are included economic freedom andfreedom of enterprise within reasonable bounds andunder proper control. In paving the way for thebreaking up of existing large estates, trust inperpetuity, feudalism, and their concomitant evils, theConstitution did not propose to destroy or underminethe property right or to advocate equal distribution ofwealth or to authorize of what is in excess of one'spersonal needs and the giving of it to another.Evincing much concern for the protection of property,

the Constitution distinctly recognize the preferredposition which real estate has occupied in law forages. Property is bound up with every aspects ofsocial life in a democracy as democracy is conceivedin the Constitution. The Constitution owned inreasonable quantities and used legitimately, plays inthe stimulation to economic effort and the formationand growth of a social middle class that is said to bethe bulwark of democracy and the backbone of everyprogressive and happy country.The promotion of social justice ordained by theConstitution does not supply paramount basis foruntrammeled expropriation of private land by theRural Progress Administration or any othergovernment instrumentality. Social justice does notchampion division of property or equality of economicstatus; what it and the Constitution do guaranty areequality of opportunity, equality of political rights,equality before the law, equality between values givenand received on the basis of efforts exerted in theirproduction. As applied to metropolitan centers,especially Manila, in relation to housing problems, it isa command to devise, among other social measures,ways and means for the elimination of slums,shambles, shacks, and house that are dilapidated,overcrowded, without ventilation. light and sanitationfacilities, and for the construction in their place ofdecent dwellings for the poor and the destitute. As willpresently be shown, condemnation of blighted urbanareas bears direct relation to public safety health,and/or morals, and is legal.In reality, section 4 of Article XIII of the Constitution isin harmony with the Bill of Rights. Without thatprovision the right of eminent domain, inherent in thegovernment, may be exercised to acquire large tractsof land as a means reasonably calculated to solveserious economic and social problem. As Mr. Aruegosays "the primary reason" for Mr. Cuaderno'srecommendation was "to remove all doubts as to thepower of the government to expropriation the thenexisting landed estates to be distributed at costs tothe tenant-dwellers thereof in the event that in thefuture it would seem such expropriation necessary tothe solution of agrarian problems therein."In a broad sense, expropriation of large estates, trustsin perpetuity, and land that embraces a whole town,or a large section of a town or city, bears directrelation to the public welfare. The size of the landexpropriated, the large number of people benefited,and the extent of social and economic reform securedby the condemnation, clothes the expropriation withpublic interest and public use. The expropriation insuch cases tends to abolish economic slavery,feudalistic practices, and other evils inimical tocommunity prosperity and contentment and publicpeace and order. Although courts are not inagreement as to the tests to be applied in determiningwhether the use is public or not, some go far in thedirection of a liberal construction as to hold that publicadvantage, and to authorize the exercise of the powerof eminent domain to promote such public benefit,etc., especially where the interest involved areconsiderable magnitude. (29 C.J.S., 823, 824. Seealso People of Puerto Rico vs. Eastern SugarAssociates, 156 Fed. [2nd], 316.) In some instances,slumsites have been acquired by condemnation. Thehighest court of New York States has ruled that slumclearance and reaction of houses for low-incomefamilies were public purposes for which New YorkCity Housing authorities could exercise the power ofcondemnation. And this decision was followed bysimilar ones in other states. The underlying reasonsfor these decisions are that the destruction ofcongested areas and insanitary dwellings diminishesthe potentialities of epidemic, crime and waste,prevents the spread of crime and diseases tounaffected areas, enhances the physical and moralvalue of the surrounding communities, and promotesthe safety and welfare of the public in general.(Murray vs. La Guardia, 52 N.E. [2nd], 884; GeneralDevelopment Coop. vs. City of Detroit, 33 N.W.[2ND], 919; Weizner vs. Stichman, 64 N.Y.S. [2nd],50.) But it will be noted that in all these case andothers of similar nature extensive areas were involved

and numerous people and the general publicbenefited by the action taken.The condemnation of a small property in behalf of 10,20 or 50 persons and their families does not inure tothe benefit of the public to a degree sufficient to givethe use public character. The expropriationproceedings at bar have been instituted for theeconomic relief of a few families devoid of anyconsideration of public health, public peace and order,or other public advantage. What is proposed to bedone is to take plaintiff's property, which for all weknow she acquired by sweat and sacrifice for her andher family's security, and sell it at cost to a fewlessees who refuse to pay the stipulated rent or leavethe premises.No fixed line of demarcation between what taking isfor public use and what is not can be made; eachcase has to be judge according to its peculiarcircumstances. It suffices to say for the purpose ofthis decision that the case under consideration is farwanting in those elements which make for publicconvenience or public use. It is patterned upon anideology far removed from that consecrated in oursystem of government and embraced by the majorityof the citizens of this country. If upheld, this casewould open the gates to more oppressiveexpropriations. If this expropriation be constitutional,we see no reason why a 10-, 15-, or 25-hectare farmland might not be expropriated and subdivided, andsold to those who want to own a portion of it. To makethe analogy closer, we find no reason why the RuralProgress Administration could not take bycondemnation an urban lot containing an area of1,000 or 2,000 square meters for subdivision into tinylots for resale to its occupants or those who want tobuild thereon.The petition is granted without special findings as tocosts.Moran, C.J., Feria, Bengzon, Padilla andMontemayor, JJ., concur.Paras and Reyes, JJ., concur in the result.

G.R. No. L-45748 April 5, 1939People vs. Vera ReyesEN BANC, IMPERIAL, J.:

Facts:

The defendant was charged in the Court of FirstInstance of Manila by the assistant city fiscal with aviolation of Act No. 2549, as amended by Acts Nos.3085 and 3958. The information alleged that fromSeptember 9 to October 28, 1936, and for the sometime after, the accused, in his capacity as presidentand general manager of the Consolidated Mines,having engaged the services of Severa Velasco deVera as stenographer, at an agreed salary of P35 amonth willfully and illegally refused to pay the salaryof said stenographer corresponding to the above-mentioned period of time, which was long due andpayable, in spite of her repeated demands.

The accused interposed a demurrer on the groundthat the facts alleged in the information do notconstitute any offense, and that even if they did, thelaws penalizing it are unconstitutional. After thehearing, the court sustained the demurrer, declaringunconstitutional the last part of section 1 of Act No.2549 as last amended by Act No. 3958 for the reasonthat it violates the constitutional prohibition againstimprisonment for debt, and dismissed the case.

The last part of Section 1 of Act No. 2549, aslast amended by section 1 of Act No. 3958considers as illegal the refusal of anemployer to pay when he can do so, thesalaries of his employers or laborers on the15th or last day of every month or onSaturday of every week, with only two daysextension, and the non-payment of the

salary within the period specified isconsidered as a violation of the law. Thesame act exempts from criminalresponsibility the employer who, havingfailed to pay the salary, should provesatisfactorily that it was impossible to makesuch payment.

The fiscal appealed from said order. In this appeal theSolicitor-General contends that the court erred indeclaring Act No. 3958 unconstitutional, and indismissing the cause.

Issue:

Whether or not the last part of Sec. 1 of Act No. 2594as amended by Act No. 3958 is constitutional andvalid.

Held:

We hold that the last part of section 1 of Act No. 2549,as last amended by section 1 of Act No. 3958, isvalid. We do not believe that this constitutionalprovision has been correctly applied in this case. Aclose perusal of the last part of section 1 of Act No.2549, as amended by section 1 of Act No. 3958, willshow that its language refers only to the employerwho, being able to make payment, shall abstain orrefuse to do so, without justification and to theprejudice of the laborer or employee. An employer socircumstanced is not unlike a person who defraudsanother, by refusing to pay his just debt. In both casesthe deceit or fraud is the essential elementconstituting the offense. The first case is a violation ofAct No. 3958, and the second is estafa punished bythe Revised Penal Code. In either case the offendercannot certainly invoke the constitutional prohibitionagainst imprisonment for debt.

Police power is the power inherent in a government toenact laws, within constitutional limits, to promote theorder, safety, health, morals, and general welfare ofsociety. In the exercise of this power the Legislaturehas ample authority to approve the disputed portion ofAct No. 3958 which punishes the employer who,being able to do so, refuses to pay the salaries of hislaborers or employers in the specified periods of time.Undoubtedly, one of the purposes of the law is tosuppress possible abuses on the part of employerswho hire laborers or employees without paying themthe salaries agreed upon for their services, thuscausing them financial difficulties. Without this law,the laborers and employees who earn meagersalaries would be compelled to institute civil actionswhich, in the majority of cases, would cost them morethan that which they would receive in case of adecision in their favor.

Decision:

We hold that the last part of section 1 of Act No. 2549,as last amended by section 1 of Act No. 3958, isvalid, and we reverse the appealed order withinstructions to the lower court to proceed with the trialof the criminal case until it is terminated, withoutspecial pronouncement as to costs in this instance.So ordered.

Avanceña, C. J., Villa-Real, Diaz, Laurel, Concepcion,and Moran, JJ., concur

P.I. Manufacturing v. P.I. ManufacturingSupervisors and Foremen AssociationGR No. 1672174 February 2008Sandoval-Gutierrez, J.

Facts: RA 6640 was signed into law on 10 December1987, providing, among others, an increase in thestatutory minimum wage and salary rates ofemployees and workers in the private sector. Itprovides that the minimum wage of workers andemployees in the private sector shall be increased byP10, except those outside Manila who shall receivean increase of P11, provided those that are alreadyreceiving above the minimum wage shall receive anincrease of P10. PI Manufacturing Supervisors andForemen Association (PIMASUFA) entered into a newCBA whereby the supervisors were granted anincrease of P625 per month and the foremen, P475per month. The increases were made to retroact to 12May 1987, or prior to the passage of RA 6640. Theapplication of said CBA resulted in a wage distortion,which prompted the PIMASUFA together with theNational Labor Union to file a case against PIMA forviolation of RA 6640. PIMA asseverates that the TheCompany and Supervisors and Foremen Contractabsolves, quitclaims, and releases the company forany monetary claim that the supervisors and theforemen may have previous to the signing of theagreement on 17 December 1987.

The Labor Arbiter ruled in favor of PIMASUFA andordered PIMA to give the PIMASUFA members wageincreases equivalent to 13.5% of their basic pay. TheCA affirmed, but raised the wage increase to 18.5%.

Issues:1. W/N the PIMASUFA, by signing The

Company and Supervisors and ForemenContract, has waived any benefit it may haveunder RA 6640.

2. W/N the 13.5% increase in the supervisorsand foremen’s basic salary should beincreased to 18.5% to correct the wagedistortion brought about by theimplementation of RA 6640.

Held:

1. NO. The increase resulting from any wagedistortion brought about by the implementation of thenew minimum wage law is not waivable.2. NO. Although there was a wage distortion, thesame was cured or remedied when PIMASUFAentered into the 1987 CBA with PIMA after theeffectivity of RA 6640. The 1987 CBA increased themonthly salaries of the supervisors by P626 andP475, which re-establishes the gap not only betweensupervisors and foremen but also between them andthe rank-and-file employees. Such gap as re-established by virtue of the CBA is more than asubstantial compliance with RA 6640. Moreover,requiring PIMA to pay 18.5%, over and above thenegotiated wage increases provided under the 1987CBA, is highly unfair and oppressive to the former.

A CBA constitutes the law between the parties whenfreely and voluntarily entered into. It was not shownthat PIMASUFA was coerced or forced by PIMA tosign the 1987 CBA. All of its 13 officers signed theCBA with the assistance of NLU. They signed it fullyaware of the passage of RA 6640. The duty tobargain requires that the parties deal with each otherwith open and fair minds. PIMASUFA cannot invokethe beneficial provisions of the 1987 CBA butdisregard the concessions it voluntarily extends toPIMA.Quitclaims by laborers are generally frowned upon ascontrary to public policy and are held to be ineffectiveto bar recovery for the full measure of the worker’srights. The reason for the rule is that the employerand the employee do not stand on the same footing.

Article 1149 of the Civil Code states that: When thelaw sets, or authorizes the setting of a minimum wagefor laborers, and a contract is agreed upon by which alaborer accepts a lower wage, he shall be entitled torecover the deficiency.

According to RA 6727, wage distortion is a situationwhere an increase in prescribed wage results in theelimination or severe contraction of intentionalquantitative differences in wage or salary ratesbetween and among employee groups in anestablishment as to effectively obliterate thedistinctions embodied in such wage structure basedon skills, length of service, or other logical bases ofdifferentiation. Otherwise stated, wage distortionmeans the disappearance or virtual disappearance ofpay differentials between lower and higher positionsin an enterprise because of compliance with a wageorder.

The goal of collective bargaining is the making ofagreements that will stabilize business conditions andfix fair standards of working conditions

People vs. PomarG.R. No. L-22008November 3, 1924

EN BANC, JOHNSON, J.:

Facts:

On the 26th day of October, 1923, the prosecutingattorney of the City of Manila presented a complaint inthe Court of First Instance, accusing the defendant ofa violation of section 13 in connection with section 15of Act No. 3071 of the Philippine Legislature. Thecomplaint alleged that the defendant being themanager and person in charge of La Flor de laIsabela (a tobacco factory) failed and refused to payMacaria Fajardo (employed as cigar maker) the sumof P80 to which she was entitled as her regular wageson time of delivery and confinement by reason ofpregnancy depite and over the demands to do so.

To said complaint, the defendant demurred, allegingthat the facts therein contained did not constitute anoffense. The demurrer was overruled, whereupon thedefendant answered and admitted at the trial all of theallegations contained in the complaint, and contendedthat the provisions of said Act No. 3071, upon whichthe complaint was based were illegal, unconstitutionaland void.

Upon a consideration of the facts charged in thecomplaint and admitted by the defendant, theHonorable C. A. Imperial, judge, found the defendantguilty of the alleged offense described in thecomplaint, and sentenced him to pay a fine of P50, inaccordance with the provisions of section 15 of saidAct, to suffer subsidiary imprisonment in case ofinsolvency, and to pay the costs. From that sentencethe defendant appealed.

Issue:

Whether or not the provisions of sections 13 and 15 ofAct No. 3071 are a reasonable and lawful exercise ofthe police power of the state.

Held:

The provisions of section 13, of Act No. 3071 of thePhilippine Legislature, are unconstitutional and void,in that they violate and are contrary to the provisionsof the first paragraph of section 3 of the Act ofCongress of the United States of August 29, 1916.

Said section 13 was enacted by the Legislature of thePhilippine Islands in the exercise of its supposedpolice power, with the praiseworthy purpose ofsafeguarding the health of pregnant women laborersin "factory, shop or place of labor of any description,"and of insuring to them, to a certain extent,reasonable support for one month before and onemonth after their delivery. It has been said that theparticular statute before us is required in the interest

of social justice for whose end freedom of contractmay lawfully be subjected to restraint.

The right to liberty includes the right to enter intocontracts and to terminate contracts. One citizencannot be compelled to give employment to anothercitizen, nor can anyone be compelled to be employedagainst his will. The Act of 1893, now underconsideration, deprives the employer of the right toterminate his contract with his employee. Clearly,therefore, the law has deprived, every person, firm, orcorporation owning or managing a factory, shop orplace of labor of any description within the PhilippineIslands, of his right to enter into contracts ofemployment upon such terms as he and theemployee may agree upon. The law creates a term inevery such contract, without the consent of theparties. Such persons are, therefore, deprived of theirliberty to contract. The constitution of the PhilippineIslands guarantees to every citizen his liberty and oneof his liberties is the liberty to contract.

Every law for the restraint and punishment of crimes,for the preservation of the public peace, health, andmorals, must come within this category. But the state,when providing by legislation for the protection of thepublic health, the public morals, or the public safety, issubject to and is controlled by the paramountauthority of the constitution of the state, and will notbe permitted to violate rights secured or guaranteedby that instrument or interfere with the execution ofthe powers and rights guaranteed to the people undertheir law — the constitution.

The police power of the state is a growing andexpanding power. But that power cannot grow fasterthan the fundamental law of the state, nor transcendor violate the express inhibition of the people's law —the constitution. If the people desire to have the policepower extended and applied to conditions and thingsprohibited by the organic law, they must first amendthat law.

It will also be noted from an examination of saidsection 13, that it takes no account of contracts for theemployment of women by the day nor by the piece.The law is equally applicable to each case. It willhardly be contended that the person, firm orcorporation owning or managing a factory, shop orplace of labor, who employs women by the day or bythe piece, could be compelled under the law to pay forsixty days during which no services were rendered.

Decision:

The rule in this jurisdiction is, that the contractingparties may establish any agreements, terms, andconditions they may deem advisable, provided theyare not contrary to law, morals or public policy. (Art.1255, Civil Code.)

Therefore, the sentence of the lower court is herebyrevoked, the complaint is hereby dismissed, and thedefendant is hereby discharged from the custody ofthe law, with costs de oficio. So ordered.

Street, Malcolm, Avanceña, Villamor, Ostrand andRomualdez, JJ., concur

79 PHIL. 40G.R. No. L-1206 October 30, 1947THE MANILA ELECTRIC COMPANY, petitioner,vs. THE PUBLIC UTILITIES EMPLOYEES'ASSOCIATION, respondent.

FERIA, J.:This is an appeal by certiorari under Rule 44 of theRules of Court interposed by the petitioner ManilaElectric Company against the decision of July 15,

1946 of the Court of Industrial Relations, which readsas follows:Although the practice of the company, according tothe manifestations of counsel for said company, hasbeen to grant one day vacationwith pay to everyworkingman who had worked for sevenconsecutivedays including Sundays, the Courtconsiders justified the oppositionpresented by theworkingmen to the effect that they need Sundaysandholidays for the observance of their religion andfor rest. The Court,therefore, orders the respondentcompany to pay 50 per cent increasefor overtimework done on ordinary days and 50 per cent increasefor work done during Sundays and legal holidaysirrespective of the numberof days they work duringthe week.The appellant contends that the said decision of theCourt of IndustrialRelations is against the provision ofsection 4, Commonwealth Act No. 444, which readsas follows:No person, firm, or corporation, businessestablishment or place or center of labor shall compelan employee or laborer to work during Sundays andlegal holidays, unless he is paid an additionalsum ofat least twenty-five per centum of his regularremuneration: Provided, however, Thast thisprohibition shall not apply to publicutilities performingsome public service such as supplying gas,electricity,power, water, or providing means of transportationorcommunication.After a careful consideration of the issue involved inthis appeal, we are of the opinion and so hold that thedecision of the Court of Industrial Relations iserroneous od contrary to the clear and expressprovision of the above quoted provisions. The powerof theCourt to settle industrial disputes betweencapital and labor, which include the fixing of wages ofemployees or laborers, granted by the generalprovisions of section 1 of Commonwealth Act No.103, has beenrestricted by the above quoted specialprovisions of Commonwealth ActNo. 444, in thesense that public utilities supplying electricity,gas,power, water, or providing means of transportation orcommunication may compel their employees orlaborers to work duringSundays and legal holidayswithout paying them an additional compensation ofnot less than 25 per cent of their regular remunerationon said days.Since the provisions of the above quoted section 4,are plain and unambiguous and convey a clear anddefinite meaning, there is no need of resorting to therules of statutory interpretation orconstruction in orderto determine the intention of the Legislature.Saidsection 1 consists of two parts: the first, which is theenactmentclause, prohibits a person, firm orcorporation, business establishment,or place orcenter of labor from compelling an employee orlaborer towork during Sundays and legal holidays,unless the former pays thelatter an additional sum ofat least twenty five per centum of his regularremuneration; and the second part, which is anexception,exempts public utilities performing somepublic service, such assupplying gas, electricity,power, water or providing means oftransportation orcommunication, from the prohibition establishedin theenactment clause. As the appellant is a public utilitythat supplies the electricity and provides means oftransportation to the public, it is evident that theappellant is exempt from the qualifiedprohibitionestablished in the enactment clause, and may compelits employees or laborers to work during Sundays andlegal holidays without paying them said extracompensation.To hold that the exception or second part of section 4,CommonwealthAct No. 444, only exempts publicutilities mentioned therein from the prohibition tocompel employees or laborers to work duringSundaysand legal holidays, but not from theobligation to pay them an extraor additionalcompensation for compelling them to work duringthosedays, is to make the exception meaningless or asuperfluity, thatis, an exception to a general rule thatdoes not exist, because theprohibition in theenactment clause is not an absolute prohibitionto

compel a laborer or employee to work during Sundaysand legal holidays. The prohibition to compel alaborer or employee to workduring those days isqualified by the clause "unless he is paid anadditionalsum of at least twenty five per centum of his regularremuneration," which is inseparable from theprohibition whichthey qualify and of which they are apart and parcel. The secondportion of section 1 is inreality an exception and not a provisoalthough it isintroduced by the word "provided"; and it iselementalthat an exception takes out of an enactmentsomething which wouldotherwise be part of thesubject matter of it.To construe section 4, Commonwealth Act No. 444,as exempting public utilities, like the appellant, fromthe obligation to pay the additional remunerationrequired by said section 4 should they compel theiremployees or laborers to work on Sundays andlegalholidays, would not make such exception a classlegislation, violative of the constitutional guaranty ofequal protectionof the laws (section 1 [1] Art. III of ourConstitution). For itis a well-settled rule inconstitutional law that a legislation which affects withequal force all persons of the same class andnotthose of another, is not a class legislation anddoes not infringesaid constitutional guaranty of equalprotection of the laws, if thedivision into classes is notarbitrary and is based on differenceswhich areapparent and reasonable. (Magonn vs. Illinois TrustSavings Bank, 170 N. S., 283, 294;State vs. Garbroski, 111 Iowa, 496; 56 L. R. A., 570.)And it is evident that the division made by section 4,of Commonwealth Act No. 444, of persons, firms, andcorporations into two classes: one composed of publicutilities performing somepublic service such assupplying gas, electricity, power, water orprovidingmeans of transportation; and another composed ofpersons,firms, and corporations which are not publicutilities and do notperform said public service , is notarbitrary and is based ondifferences which areapparent and reasonable.The division is not arbitrary, and the basis thereof isreasonable. Public utilities exempted from theprohibition set forth in the enactment clause of section4, Commonwealth Act No. 444, are required toperform a continuous service including Sundaysandlegal holidays to the public, since the public goodso demands,and are not allowed to collect an extracharge for services performed on those days; whilethe others are not required to do so and are free tooperate or not their shops, business, or industries onSundays and legal holidays. If they operateandcompel their laborers to work on those days it isbut just andnatural that they should pay an extracompensation to them, because it is to be presumedthat they can make money or business by operatingon those days even if they have to pay such extraremuneration. It would be unfair for the law to compelpublicutilities like the appellant to pay an additional orextra compensation to laborers whom they have tocompel to work duringSundays and legal holidays, inorder to perform a continuous service to the public. Torequire public utilities performingservice to do so,would be tantamount to penalize them forperformingpublic service during said days in compliance withtherequirement of the law and public interest.The conclusion on which the dissenting opinion isbased, which is alsosubstantially the basis of theresolution of the lower court, is that "As to them[referring to public utilities like the petitioner] section4of Commonwealth Act No. 444 may be considered asnot having been enacted at all. . . . Therefore, whenthere is a labor dispute as in the present case, andthe dispute is submitted to the Court of IndustrialRelations for decision or settlement, the court is freeto providewhat it may deem just and more beneficialto the interested parties,and that freedom to settleand decide the case certainly includesthe power togrant additional compensation to workers who workonSundays and holidays. The general power grantedby section 1, 4, and13 of Commonwealth Act No. 103,are not affected in any way or senseby section 4 ofCommonwealth Act No. 444."

This conclusion finds no support in law, reason orlogic. It is a well settled rule of statutory constructionadopted by courts of last resort in the States that ifone statute enacts some thing in general terms,andafterwards another statute is passed on the samesubject, whichalthough expressed in affirmativelanguage introduces special conditions or restrictions,the subsequent statute will usually be consideredasrepealing by implication the former regarding thematter covered by the subsequent act; and morespecially so when the latter act is expressed innegative terms , as where for example it prohibits acertain thing for being done, or where it declares thata given act shall be performed in a certain mannerand not otherwise. (See Black on Interpretation ofLaws, 2d ed., p. 354, and Sutherland, StatutoryConstruction, 3d ed., Vol. 1, section 1922, and casestherein cited.)In accordance with this rule, the provision ofCommonwealth Act No. 103 which confers upon theCourt of Industrial Relations power to settle disputebetween employers and employees in general,including those relating to compulsion of laborers towork on Sundays and legalholidays and additionalcompensation for those working on those days,shouldbe considered as impliedly repealed by section 4 ofAct No. 444,which limits or restricts the minimum ofthe additional compensationand specifies thepersons, firms or corporation who may be requered topay said compensation. That is, that the Court ofIndustrial Relations may, under the provision of saidsection 4, order a person, firm orcorporation orbusiness establishment or place or center of laborwhocompel an employee or laborer to work onSundays and legal holidays,to pay him an additionalcompensation of at least 25 per centum of his regularremuneration; but said court can not require publicutilities performing public service mentioned therein topay saidextra compensation to laborers andemployees required by them towork on Sundays andlegal holidays, because the necessity of publicserviceso requires.lawphil.netIt is evident that the principal purpose of theLegislature in enactingsaid section 4, is not only torestrict the general power of the Court of IndustrialRelations granted by Act No. 103, to fix theminimumadditional compensation which an employermay be required to pay a laborer compelled to workon those days, but principally to exemptpublic utilitiesaffected with public interest, from the payment ofsuchadditional compensation. If it were the intention of thelawmakersin enacting section 4 of the Act No. 444 tofix the limit of the minimum of additionalcompensation of laborers working on those days,withoutexempting the public utilities, that is, leavingintact the general power of the court to require thepublic utilities to pay said additional compensation,the law would have only provided, in substance, thatallemployers are prohibited from compelling theirlaborers to work onSundays and legal holidayswithout paying them an additional compensationof notless than 50 per cent of their regular remuneration.That the intention of the Legislature is to exempt thepublic utilitiesunder consideration from the prohibitionset forth in the enactmentclause of section 4, Act No.444, is supported by the provision ofsection 19 of ActNo. 103. As amended this section provides "that withexception of employers engaged in the operation ofpublic services orin the business coupled with a publicinterest, employers will notbe allowed to engage theservices of the strike breakers within fifteendays afterthe declaration of the strike; which shows a contrariosensu that public utilities performing public servicesare permitted to engage the services of strikebreakers within fifteen days, that is,immediately uponthe declaration of the strike. The same public interest,the reason of the exception in the above quotedprovision, underlies the exception provided in section4, of Act No. 444.Therefore, the ruling of the Court of IndustrialRelations quoted in the first part of this decisionappealed from, being contrary to law, is set aside. Soordered.

Paras, Pablo, Hilado, Bengzon, Briones, Padilla, andTuason, JJ., concur.

G.R. No. L-10107 February 4, 1916Cerezo vs. Atlantic Gulf & Pacific CompanyEN BANC: TRENT, J.:

Facts:

Jorge Ocumen (plaintiff’s son and only means ofsupport) was an employee of the defendant as a daylaborer on the 8th of July, 1913, assisting in layinggas pipes on Calle Herran in the City of Manila. Thedigging of the trench was completed both ways fromthe cross-trench in Calle Paz, and the pipes were laidtherein up to that point. The men of the deceased'sgang were filling the west end, and there was no workin the progress at the east end of the trench. Shortlyafter the deceased entered the trench at the east endto answer a call of nature, the bank caved in, buryinghim to his neck in dirt, where he died before he couldbe released. It has not been shown that the deceasedhad received orders from the defendant to enter thetrench at this point; nor that the trench had beenprepared by the defendant as a place to be used as awater-closet; nor that the defendant acquiesced in theusing of this place for these purposes. At the time ofthe accident the place where the deceased's duty ofrefilling the trench required him to be was at the westend. There is no contention that there was any dangerwhatever in the refilling of the trench.

The plaintiff insists that the defendant was negligentin failing to shore or brace the trench at the placewhere the accident occurred. While, on the otherhand, the defendant urges (1) that it was under noobligation, in so far as the deceased was concerned,to brace the trench, in the absence of a showing thatthe soil was of a loose character or the place itselfwas dangerous, and (2) that although the relation ofmaster and servant may not have ceased, for the timebeing, to exist, the defendant was under no duty tothe deceased except to do him no intentional injury,and to furnish him with a reasonably safe place towork.

Judgment was entered in a favor of the plaintiff for thesum of P1,250, together with interest and costs.Defendant appealed.

Issue:

Whether or not the plaintiff has the right to recoverbased on the Employers' Liability Act (Act No. 1874)or the Civil Code.

Held:

Act No. 1874 is essentially a copy of theMassachusetts Employers' Liability Act, it having beenoriginally enacted in that jurisdiction in 1887. TheMassachusetts statute was "copied verbatim, withsome variations of detail, from the English statute.

We agree with the Supreme Court of Massachusettsthat the Act should be liberally construed in favor ofemployees. The main purpose of the Act was toextend the liability of employers and to render themliable in damages for certain classes of personalinjuries for which it was thought they were liable underthe law prior to the passage of the Act.

We do not doubt that it was, prior to the passage ofAct No. 1874 and still is, the duty of the employer inthis jurisdiction to perform those duties, in referenceto providing reasonably safe places, and safe andsuitable ways, works, and machinary, etc., So, to thisextent, the first subsection of section 1 of the Act issimply declaratory of the law as it stood previous to

the enactment. Standing in this form, it is quite clearthat it was not intended that all rights to compensationand of action against employers by injured employeesor their representatives must be brought under begoverned by the Act.

Assuming that the excavation for the gas pipe iswithin the category of "ways, works, or machineryconnected with the used in the business of thedefendant, " we are of the opinion that recoverycannot be had under the Act for the reason that, aswe have indicated, the deceased was at a placewhere he had no right to be at the time he met hisdeath. His work did not call him there, nor is it shownthat he was permitted there tacitly or otherwise. Underthe Anglo-American law the applicable to such a setof facts is that the master is not responsible, underthe Employers' Liability Act, for accidents to hisemployees when they are outside the scope of theiremployment for purpose of their own.

The case under consideration does not fall within theexceptions of Art 1105 of the Civil code. Mentioned.After providing a reasonably safe place in and aboutwhich the deceased was required to work, thedefendant's liability was then limited to those eventswhich could have been foreseen. Article 1902provides that a person who, by an act or omissioncauses damage to another when there is fault ornegligence shall be obliged to repair the damage sodone. Article 1903 after providing for the liability ofprincipals for the acts of their employees, agents, orthese for whom they are otherwise responsible,provides that such liability shall cease when thepersons mentioned therein prove that they employedall the diligence of a good father of a family to avoidthe damage. We have then, on the one hand,nonliability of an employer for events which could notbe foreseen (article 1105), and where he hasexercised the care of a good father of a family (article1903), and, on the other hand, his liability where faultor negligence may be attributed to him (article 1902).

The cause of Ocumen's death was not the weight ofthe earth which fell upon him, but was due tosuffocation. The accident was of a most unusualcharacter. Experience and common sensedemonstrate that ordinarily no danger to employees isto be anticipated from such a trench as that inquestion. The fact that the walls had maintainedthemselves for a week, without indication of theirgiving way, strongly indicates that the necessity forbracing or shoring the trench was remote. To requirethe company to guard against such an accident as theone in question would virtually compel it to shore upevery foot of the miles of trenches dug by it in the cityof Manila for the gas mains. Upon a full considerationof the evidence, we are clearly of the opinion thatordinary care did not require the shoring of the trenchwalls at the place where the deceased met his death.The event properly comes within the class of thosewhich could not be foreseen; and, therefore, thedefendant is not liable under the Civil Code.

Effect upon the Law in this country

The act was not intended to curtail the any of therights which an employee had under the pre-existinglaw. Under the act, the defense of contributorynegligence would defeat an action for damages.

Decision:

Having reached the conclusions above set forth, it isunnecessary to inquire into the right of the plaintiff tobring and maintain this action.

For the foregoing reasons the judgment appealedfrom is reversed and the complaint dismissed, withoutcosts. So ordered.

Arellano, C.J., Torres, Johnson and Araullo, JJ.,Concur

G.R. No. 96169 September 24, 1991EMPLOYERS CONFEDERATION OF THEPHILIPPINES vs. NATIONAL WAGES ANDPRODUCTIVITY COMMISSION

Facts:

On October 15, 1990, the Regional Board of theNational Capital Region issued Wage Order No.NCR-01, increasing the minimum wage by P17.00daily in the National Capital Region. The Trade UnionCongress of the Philippines (TUCP) moved forreconsideration; so did the Personnel ManagementAssociation of the Philippines (PMAP). ECOPopposed.

On October 23, 1990, the Board issued Wage OrderNo. NCR01-A, amending Wage Order No. NCR-01. Itprovides that all workers and employees in the privatesector in the National Capital Region alreadyreceiving wages above the statutory minimum wagerates up to one hundred and twenty-five pesos(P125.00) per day shall also receive an increase ofseventeen pesos (P17.00) per day.

ECOP appealed to the National Wages andProductivity Commission contending that the board'sgrant of an "across-the-board" wage increase toworkers already being paid more than existingminimum wage rates (up to P125.00 a day) as analleged excess of authority. ECOP further alleges thatunder the Republic Act No. 6727, the boards mayonly prescribe "minimum wages," not determine"salary ceilings." ECOP likewise claims that RepublicAct No. 6727 is meant to promote collectivebargaining as the primary mode of settling wages,and in its opinion, the boards can not preemptcollective bargaining agreements by establishingceilings.

On November 6, 1990, the Commission promulgatedan Order, dismissing the appeal for lack of merit. OnNovember 14, 1990, the Commission deniedreconsideration. ECOP then, elevated the case viapetition for review on certiorari to the Supreme Court.

Issue:

The main issue in this case is whether Wage OrderNo. NCR-01-A providing for new wage rates, as wellas authorizing various Regional Tripartite Wages andProductivity Boards to prescribe minimum wage ratesfor all workers in the various regions, and for aNational Wages and Productivity Commission toreview, among other functions, wage levelsdetermined by the boards is valid.

Ruling:

The Supreme Court ruled in favor of the NationalWages and Productivity Commission and RegionalTripartite Wages and Productivity Board-NCR, TradeUnion Congress of the Philippines and denied thepetition of ECOP.

The Supreme Court held that Republic Act No. 6727was intended to rationalize wages, first, by providingfor full-time boards to police wages round-the-clock,and second, by giving the boards enough powers toachieve this objective. The Court is of the opinion thatCongress meant the boards to be creative in resolvingthe annual question of wages without labor andmanagement knocking on the legislature's door atevery turn..The Court's opinion is that if Republic No. 6727intended the boards alone to set floor wages, the Actwould have no need for a board but an accountant tokeep track of the latest consumer price index, or

better, would have Congress done it as the needarises, as the legislature, prior to the Act, has done sofor years. The fact of the matter is that the Act soughta "thinking" group of men and women bound bystatutory standards. The Court is not convinced thatthe Regional Board of the National Capital Region, indecreeing an across-the-board hike, performed anunlawful act of legislation. It is true that wage-firing,like rate-fixing, constitutes an act Congress; it is alsotrue, however, that Congress may delegate the powerto fix rates provided that, as in all delegations cases,Congress leaves sufficient standards. As this Courthas indicated, it is impressed that the above-quotedstandards are sufficient, and in the light of the floor-wage method's failure, the Court believes that theCommission correctly upheld the Regional Board ofthe National Capital Region.

G.R. No. 71813 July 20, 1987Abella vs. NLRC

EN BANC: PARAS (J), 13 CONCUR

Facts:

Ricardo Dionele, Sr. (private respondent) has been aregular farm worker since 1949 in Hacienda Danao-Ramona located in Ponteverde, Negros Occidential.Said farm land was leased to Rosalina Abella(petitioner) for a period of ten (10) years, renewablefor another ten years.

Upon the expiration of her leasehold rights, petitionerdismissed Ricardo and another co-employee.

Private respondents filed a complaint against thepetitioner at the Ministry of Labor and Employment forovertime pay, illegal dismissal and reinstatement withbackwages. After presenting their respectiveevidence, the Labor Arbiter ruled that the dismissal iswarranted by the cessation of business, but grantedthe private respondents’ separation pay.

Petitioner filed a motion for reconsideration but thesame was denied. Hence, the present petition.

Issue:

Whether or not private respondents are entitled toseparation pay.

Held:

The petition is devoid of merit.

Article 284 of the Labor code provides that “theemployer may also terminate the employment of anyemployee due to the installation of labor-savingdevices, redundancy, retrenchment to prevent lossesor the closing or cessation of operation of theestablishment or undertaking unless the closing is forthe purpose of circumventing the provisions of thistitle, by serving a written notice on the workers andthe Ministry of Labor and Employment at least monthbefore the intended date thereof. In case oftermination due to the installation of labor-savingdevices or redundancy, the worker affected therebyshall be entitled to a separation pay equivalent to atleast his one month pay or to at least one month payfor every year of service, whichever is higher. In caseof retrenchment to prevent losses and in cases ofclosure or cessation of operations of establishment orundertaking not due to serious business losses orfinancial reverses, the separation pay shall beequivalent to one month pay or at least one-halfmonth pay for every year of service whichever ishigher. A fraction of at least six months shall beconsidered one whole year."

The purpose of the said article is obvious: theprotection of the workers whose employment isterminated because of the closure of establishmentand reduction of personnel. Without said law,employees like private respondents in the case at bar

will lose the benefits to which they are entitled for thenumber of years served. Although they wereabsorbed by the new management of the hacienda, inthe absence of any showing that the latter hasassumed the responsibilities of the former employer,they will be considered as new employees and theyears of service behind them would amount tonothing.

In any event, it is well-settled that in theimplementation and interpretation of the provisions ofthe Labor Code and its implementing regulations, theworkingman’s welfare should be the primordial andparamount consideration.

Decision:The instant petition is hereby dismissed and thedecision of the Labor Arbiter and the Resolution of theMinistry of Labor and Employment are herebyaffirmed.

G.R. No. 78782 December 1, 1987Euro-Linea Phil, Inc. vs. NLRC

FIRST DIVISION, PARAS, (J):

Facts:

Petitioner Euro-Linea Phil, Inc hired privaterespondent Pastoral as shipping expediter on aprobationary basis for a period of six months. Prior tohiring by petitioner, Pastoral had been employed byFitscher Manufacturing Corporation also as shippingexpediter. On 4 February 1984, Pastoral received amemorandum terminating his probationaryemployment in view of his failure “to meet theperformance standards set by the company”. Pastoralfiled a complaint for illegal dismissal againstpetitioner. On 19 July 1985, the Labor Arbiter foundpetitioner guilty of illegal dismissal. Petitionerappealed the decision to the NLRC on 5 August 1985but the appeal was dismissed. Hence the petition forreview seeking to reverse and set aside the resolutionof public respondent NLRC, affirming the decision ofthe Labor Arbiter, which ordered the reinstatement ofcomplainant with six months backwages.

Issue:

Whether or not the National Labor RelationsCommission acted with grave abuse of discretionamounting to excess of jurisdiction in ruling againstthe dismissal of the respondent, a temporary orprobationary employee, by his employer.

Held:

Although a probationary or temporary employee has alimited tenure, he still enjoys the constitutionalprotection of security of tenure.

Furthermore, what makes the dismissal highlysuspicious is the fact that while petitioner claims thatrespondent was inefficient, it retained his servicesuntil the last remaining two weeks of the six monthsprobationary employment. No less important is thefact that private respondent had been a shippingexpediter for more than one and a half years beforehe was absorbed by petitioner. It therefore appearsthat the dismissal in question is without sufficientjustification.

It must be emphasized that the prerogative ofmanagement to dismiss or lay-off an employee mustbe done without abuse of discretion, for what is atstake is not only petitioner's position but also hismeans of livelihood. The right of an employer to freelyselect or discharge his employees is subject toregulation by the State, basically in the exercise of itsparamount police power.

Decision:

In the instant case, it is evident that the NLRCcorrectly applied Article 282 in the light of theforegoing and that its resolution is not tainted withunfairness or arbitrariness that would amount to graveabuse of discretion or lack of jurisdiction (RosarioBrothers Inc. v. Ople, 131 SCRA 73 [1984]).PREMISES CONSIDERED, the petition isDISMISSED for lack of merit, and the resolution of theNLRC is affirmed. SO ORDERED.

G.R. No. L-58639 August 12, 1987

CEBU ROYAL PLANT (SAN MIGUELCORPORATION), vs.THE HONORABLE DEPUTY MINISTER OF LABORand RAMON PILONES

FACTS:

Ramon Pilones, private respondent, was employed onFebruary 16, 1978 on a probationary period ofemployment for six (6) months with petitioner CRP.After said period, he underwent medical examinationfor qualification as regular employee but the resultsshowed that he is suffering from PTB minimal.Consequently, he was informed of the termination ofhis employment by respondent since his illness wasnot curable within 6 months.

Pilones complained against his termination before theMinistry of Labor which dismissed the same. Thedismissal was reversed by the public respondent whoordered the reinstatement and payment of backwages.

Granting reinstatement, the public respondent arguesthat Pilones was already a permanent employee atthe time of his dismissal and so was entitled tosecurity of tenure. The alleged ground for his removal,to wit, “pulmonary tuberculosis minimal,” was notcertified as incurable within six months as to justify hisseparation and that the petitioner should have firstobtained a clearance, as required by the regulationsthen in force, for the termination of his employment.

CRP claims that the private respondent was still onprobation at the time of his dismissal and so had nosecurity of tenure. The dismissal was necessary forthe protection of the public health, as he was handlingingredients in the processing of soft drinks which werebeing sold to the public.

ISSUE: Whether the dismissal was proper.

HELD:

No. The dismissal was not proper. Under Article 282of the Labor Code, “an employee who is allowed towork after a probationary period shall be considered aregular employee.” Pilones was already on permanentstatus when he was dismissed on August 21, 1978, orfour days after he ceased to be a probationer. Assuch, he could validly claim the security of tenureguaranteed to him by the Constitution and the LaborCode.

The petitioner claims it could not have dismissed theprivate respondent earlier because the x-rayexamination was made only on August 17, 1978, andthe results were not immediately available. Thatexcuse is untenable. We note that when the petitionerhad all of six months during which to conduct suchexamination, it chose to wait until exactly the last dayof the probation period.

The applicable rule on the ground for dismissalinvoked against him is Section 8, Rule I, Book VI, ofthe Rules and Regulations Implementing the Labor

Code which states that “the employer shall notterminate his employment unless there is acertification by a competent public health authoritythat the disease is of such nature or at such a stagethat it cannot be cured within a period of six (6)months even with proper medical treatment.” Therecord does not contain the certification required bythe above rule. Hence, dismissal was illegal.

It is also worth noting that the petitioner’s applicationfor clearance to terminate the employment of theprivate respondent was filed with the Ministry of Laboronly on August 28, 1978, or seven days after hisdismissal. As the NLRC has repeatedly and correctlysaid, the prior clearance rule (which was in force atthat time) was not a “trivial technicality.” It required“not just the mere filing of a petition or the mereattempt to procure a clearance” but that “the saidclearance be obtained prior to the operative act oftermination.

Although we must rule in favor of his reinstatement,this must be conditioned on his fitness to resume hiswork, as certified by competent authority.

**Another Doctrine under Sec4 of Labor Code onconstruction:

Concern for the lowly worker who, often at the mercyof his employers, must look up to the law for hisprotection. Fittingly, that law regards him withtenderness and even favor and always with faith andhope in his capacity to help in shaping the nation’sfuture. It is error to take him for granted. He deservesour abiding respect. How society treats him willdetermine whether the knife in his hands shall be acaring tool for beauty and progress or an angryweapon of defiance and revenge. The choice isobvious, of course. If we cherish him as we should,we must resolve to lighten “the weight of centuries” ofexploitation and disdain that bends his back but doesnot bow his head.

G.R. No. L-2779 October 18, 1950DANIEL SANCHEZ, ET AL., plaintiffs-appellees,vs. HARRY LYONS CONSTRUCTION, INC., ETAL., defendants-appellants.

MORAN, C. J.:

This case originated in the Municipal Court of Manilaupon a complaint filed on March 9, 1948, by theherein appellees as plaintiffs, against the hereinappellants as defendants, for the sum of P2,210 plusinterest, which plaintiffs claimed as one monthadvance pat due them. On April 28, 1948, the partiesentered into a stipulation of facts upon which saidmunicipal court rendered judgment for the plaintiffs.Upon denial of their motion for reconsideration of thisjudgment, the defendants filed an appeal to the Courtof First Instance of Manila, wherein the partiessubmitted the case upon the same facts agreed uponin the Municipal Court. On October 2, 1948, the Courtof First Instance of Manila rendered its decisionholding for plaintiffs, as follows:

Wherefore judgment is hereby rendered —1. Ordering defendant Material Distributors, Inc. topay plaintiff Enrique Ramirez the sum of P360 andplaintiff Juan Ramirez the sum of P250 with legalinterest on each of the said sums from the date of thefiling of the complaint in the Municipal Court of Manilauntil the date of full payment thereof; and2. Ordering defendant Harry Lyons Construction, Inc.to pay plaintiff Daniel Sanchez the sum of P250, andplaintiff Mariano Javier, Venancio Diaz, EstebanBautista, Faustino Aquillo, Godofredo Diamante,Marcial Lazaro, Ambrosio de la Cruz, and MarcelinoMaceda the sum of P150 each, with legal interest oneach of the said sums from the date of the filing of thecomplaint in the Municipal Court of Manila until thedate of full payment thereof.

One half of the costs is to be paid by MaterialDistributors, Inc. and the other half by Harry LyonsConstruction, Inc.

From this judgment, defendants filed an appeal withthis court purely upon a question of law. Thestipulation of facts entered into by the parties on April28, 1948, is as follows:

STIPULATION OF FACTS.Come now the plaintiffs and the defendants, by theirrespective undersigned attorneys and to thisHonorable Court, respectfully submit the followingstipulation of facts:

1. That the plaintiffs were respectively employed asfollows:

EMPLOYED BY DEFENDANT MATERIALDISTRIBUTORS, INC.Name Date of Position SalaryemploymentEnrique Ramirez .............. 12/16/46 WarehousemanP450 a mo.Juan Ramirez ................... do do 250 a mo.NOTE. — The salary of Enrique Ramirez was laterreduced to P360 per month. This was the amount hewas receiving at the time of his dismissal.

EMPLOYED BY DEFENDANT HARRY LYONSCONSTRUCTION, INC.

Daniel Sanchez ................ 1/1/47 Carpenter- P250 amo.ForemanMariano Javier ................. ....do..................Guard................. 5 a dayVenancio Diaz ................. ....do..................do....................... 5 a dayEsteban Bautista ............ ....do..................do....................... 5 a dayFaustino Aquillo ............ ....do..................do....................... 5 a dayGodofredo Diamante ..... ....do..................do....................... 5 a dayMarcial Lazaro ................ ....do..................do....................... 5 a dayAmbrosio de la Cruz ..... ....do..................do....................... 5 a dayMarcelino Macada ........ ....do..................do....................... 5 a dayas per contracts of employment, copies of which areattached to defendants' answer marked Exhibits 1 to11 inclusive2. That in said contracts of employment the plaintiffagreed as follows:"I accept the foregoing appointment, and inconsideration thereof I hereby agree that suchemployment may be terminated at any time, withoutprevious notice, and I further agree that salary andwages, shall be computed and paid at the ratespecified up to the date of such termination."Also in consideration of such employment I herebyexpressly waive the benefit of article 302 of the Codeof Commerce and that of any other law, ruling, orcustom which might require notice of discharge orpayment of salary or wages after date of thetermination of such employment."3. That the plaintiffs were dismissed by thedefendants on December 31, 1947 without onemonths' previous notice.4. That each of the plaintiffs demanded payment ofone month's salary from the defendants and that thelatter refused to pay the same.WHEREFORE, it is respectfully prayed that judgmenton the foregoing stipulation of facts be rendered bythis Honorable Court.

The points in issue herein are: first, whether plaintiffs,both those paid on a monthly and daily basis, areentitled to the benefit granted in article 302 of theCode of Commerce; and secondly, if they are so

entitled, was their waiver of such benefits legal andvalid?

Article 302 of the Code of Commerce reads asfollows:ART. 302. In cases in which no special time is fixed inthe contracts of service, any one of the parties theretomay cancel it, advising the other party thereof onemonth in advance.The factor or shop clerk shall be entitled, in suchcase, to the salary due for said month.

It is a clear doctrine, as gleaned from the provision ofthe law and settled jurisprudence, 1 that in amercantile contract of service in which no special timeis fixed, any one of the parties may cancel saidcontract upon giving of a one-month notice, calleda mesada, to the other party. The law gives an addedproviso that in the case of factors or shop clerks,these shall be entitled to salary during this one monthof standing notice. In any case, the one-month noticemust be given to any employee, whether factor, shopclerk or otherwise, so long as the two conditionsconcur, namely, that no special time is fixed in thecontract of service, and that said employee is acommercial employee. And when such notice is notgiven under these conditions, not only the factor orshop clerk but any employee discharged withoutcause, is entitled to indemnity which may be onemonth's salary. 2In the instant case, there lies no doubt that plaintiffsare commercial employees of appellant corporations,rendering service as warehousemen, carpenter-foreman and guards. There is likewise no doubt ascan be seen from the contracts of employmentsubmitted as exhibits, that no special time has beenfixed in the contracts of services between plaintiffs-appellees and defendants-appellants. The statedcomputation or manner of payment, whether monthlyor daily, does not represent nor determine a specialtime of employment. Thus, a commercial employeemay be employed for one year and yet receive hissalary on the daily or weekly or monthly or otherbasis.Appellants allege that the use of the word "temporary"in the contracts of services of some of the plaintiffsshows that their employment was with a term, and theterm was "temporary, on a day to day basis." Therecord discloses that this conclusion is unwarranted.The contracts simply say — "You are herebyemployed as temporary guard with a compensation atthe rate of P5 a day . . . ." The word "temporary" asused herein does not mean the special time fixed inthe contracts referred to in article 302 of the Code ofCommerce. The daily basis therein stipulated is forthe computation of pay, and is not necessarily theperiod of employment. Hence, this Court holds thatplaintiffs-appellants come within the purview of article302 of the Code of Commerce.Now, as the second question, namely, the validity ofplaintiffs' waiver of the benefits given them by saidarticle 302. This court holds that such a waiver, madein advance, is void as being contrary to public policy.Granting that the "mesada" given in article 302 of theCode of Commerce, is for the bilateral benefit of bothemployer and employee, nevertheless, this does notpreclude the finding that a waiver of such "mesada" inadvance by the employee is contrary to public policy.Public policy, with regard to labor, is clearly stated inarticle II, section 5, of the Philippine Constitution,which reads —The promotion of social justice to insure the well-being and economic security of all the people shouldbe the concern of the State.and article XIV, section 6, which reads —The State shall afford protection to labor, especially toworking women and minors, and shall regulate therelations between land-owner and tenant, andbetween labor and capital in industry and inagriculture. . . .Article 302 of the Code of Commerce must be appliedin consonance with these provisions of ourconstitution. In the matter of employment bargaining,there is no doubt that the employer stands on higher

footing than the employee. First of all, there is greatersupply than demand for labor. Secondly, the need foremployment by labor comes from vital and evendesperate, necessity. Consequently, the law mustprotect labor, at least, to the extent of raising him toequal footing in bargaining relations with capital andto shield him from abuses brought about by thenecessity for survival. It is safe to presume therefore,that an employee or laborer who waives in advanceany benefit granted him by law does so, certainly notin his interest or through generosity but under theforceful intimidation of urgent need, and hence, hecould not have so acted freely and voluntarily.

For all the foregoing, this court hereby affirms thedecision of the lower court, with costs againstappellants.

Ozaeta, Paras, Feria, Pablo, Tuason, Bengzon andReyes, JJ., concur.

G.R. No. L-48926 December 14, 1987Sosito vs. Aguinaldo Development Corp.FIRST DIVISION: CRUZ, J.:

Facts:

Petitioner Manuel Sosito was employed in 1964 bythe private respondent, a logging company, and wasin charge of logging importation, with a monthly salaryof P675.00, 1 when he went on indefinite leave withthe consent of the company on January 16, 1976.

On July 20, 1976, the private respondent, through itspresident, announced a retrenchment program andoffered separation pay to employees in the activeservice as of June 30, 1976, who would tender theirresignations not later than July 31, 1976. Thepetitioner decided to accept this offer and sosubmitted his resignation on July 29, 1976, "to availhimself of the gratuity benefits" promised. However,his resignation was not acted upon and he was nevergiven the separation pay he expected. The petitionercomplained to the Department of Labor, where hewas sustained by the labor arbiter. The company wasordered to pay Sosito the sum of P 4,387.50,representing his salary for six and a half months. Onappeal to the National Labor Relations Commission,this decision was reversed and it was held that thepetitioner was not covered by the retrenchmentprogram.

Issue:

Whether or not the petitioner is covered by theretrenchment program and thus entitled to separationbenefits.

Held:

It is clear from the memorandum that the offer ofseparation pay was extended only to those who werein the active service of the company as of June 30,1976. It is equally clear that the petitioner was noteligible for the promised gratuity as he was notactually working with the company as of the said date.Being on indefinite leave, he was not in the activeservice of the private respondent although, if onewere to be technical, he was still in its employ. Evenso, during the period of indefinite leave, he was notentitled to receive any salary or to enjoy any otherbenefits available to those in the active service.

We note that under the law then in force the privaterespondent could have validly reduced its work forcebecause of its financial reverses without the obligationto grant separation pay. This was permitted under theoriginal Article 272(a), of the Labor Code, which wasin force at the time. To its credit, however, thecompany voluntarily offered gratuities to those who

would agree to be phased out pursuant to the termsand conditions of its retrenchment program, inrecognition of their loyalty and to tide them over theirown financial difficulties. The Court feels that suchcompassionate measure deserves commendationand support but at the same time rules that it shouldbe available only to those who are qualified therefore.We hold that the petitioner is not one of them.

While the Constitution is committed to the policy ofsocial justice and the protection of the working class,it should not be supposed that every labor dispute willbe automatically decided in favor of labor.Management also has its own rights which, as such,are entitled to respect and enforcement in the interestof simple fair play. Out of its concern for those withless privileges in life, this Court has inclined moreoften than not toward the worker and upheld hiscause in his conflicts with the employer. Suchfavoritism, however, has not blinded us to the rule thatjustice is in every case for the deserving, to bedispensed in the light of the established facts and theapplicable law and doctrine.

Decision:

WHEREFORE, the petition is DISMISSED and thechallenged decision AFFIRMED, with costs againstthe petitioner. SO ORDERED.

Teehankee, C.J., Narvasa, Paras and Gancayco, JJ.,concur.

G.R. No. 73681 June 30, 1988Colgate Palmolive Philippines, Inc., vs. Ople

SECOND DIVISION: PARAS, J.:

Facts:

On March 1, 1985, the respondent Union filed aNotice of Strike with the Bureau of Labor Relations(BLR) on ground of unfair labor practice consisting ofalleged refusal to bargain, dismissal of unionofficers/members; and coercing employees to retracttheir membership with the union and restraining non-union members from joining the union.

After efforts at amicable settlement proved unavailing,the Office of the MOLE, upon petition of petitionerassumed jurisdiction over the dispute pursuant toArticle 264 (g) of the Labor Code.

In its position paper, the petitioner pointed out that theinfractions committed by the three salesmen fullyconvinced the company, after investigation of theexistence of just cause for their dismissal, that theirdismissal was carried out pursuant to the inherentright and prerogative of management to disciplneerring employees. Moreover, the petitioner refuted theunion’s charge that the membership in union andrefusal to retract precipitated their dismissal wastotally false and amounted to malicious imputation ofunion busting. Thre respondent union on hte otherhand assailed its answers to the petitioner’s positionpaper.

On August 9,1985, respondent Minister rendered adecision whichfound no merit in the Union's Complaintfor unfair labor practice allegedly committed bypetitioner and that the the three salesmen, PeregrinoSayson, Salvador Reynante & Cornelio Mejia, "notwithout fault" hence "the company has grounds todismiss above named salesmen".

At the same time respondent Minister directly certifiedthe respondent Union as the collective bargaining

agent for the sales force in petitioner company andordered the reinstatement of the three salesmen tothe company on the ground that the employees werefirst offenders.

Petitioner filed a Motion for Reconsideration whichwas denied by respondent Minister in his assailedOrder, dated December 27, 1985. Hence, thispetition.

Issue:

Whether the respondent Minister committed a graveabuse of discretion when, notwithstanding his veryown finding that there was just cause for the dismissalof the three (3) salesmen, he nevertheless orderedtheir reinstatement.

Held:

The respondent Minister has the power to decide alabor dispute in a case assumed by him under Art.264 (g) of the Labor Code.

The order of the respondent Minister to reinstate theemployees despite a clear finding of guilt on their partis not in conformity with law. Reinstatement is simplyincompatible with a finding of guilt. Where the totalityof the evidence was sufficient to warrant the dismissalof the employees the law warrants their dismissalwithout making any distinction between a firstoffender and a habitual delinquent. Under the law,respondent Minister is duly mandated to equallyprotect and respect not only the labor or workers' sidebut also the management and/or employers' side. Thelaw, in protecting the rights of the laborer, authorizesneither oppression nor self-destruction of theemployer. To order the reinstatement of the erringemployees would in effect encourage unequalprotection of the laws as a managerial employee ofpetitioner company involved in the same incident wasalready dismissed and was not ordered to bereinstated. As stated by Us in the case of San MiguelBrewery vs. National Labor Union, "an employercannot legally be compelled to continue with theemployment of a person who admittedly was guilty ofmisfeasance or malfeasance towards his employer,and whose continuance in the service of the latter ispatently inimical to his interest."

Decision:

WHEREFORE, judgment is hereby renderedREVERSING and SETTING ASIDE the Order of therespondent Minister, dated December 27, 1985 forgrave abuse of discretion. However, in view of the factthat the dismissed employees are first offenders,petitioner is hereby ordered to give them separationpay. The temporary restraining order is hereby madepermanent.

SO ORDERED.

Yap, C.J., Melencio-Herrera, Padilla and Sarmiento,JJ., concur.

G.R. No. 155421 July 7, 2004Mendoza vs. Rural Bank of Lucban

FIRST DIVISION: PANGANIBAN, J.:

Facts:

On April 25, 1999, the Board of Directors of the RuralBank of Lucban, Inc., issued Board Resolution Nos.99-52 and 99-53, providing that “in line with the policy

of the bank to familiarize bank employees with thevarious phases of bank operations and furtherstrengthen the existing internal control system, allofficers and employees are subject to reshuffle ofassignments” and that those” affected branchemployees are reshuffled to their new assignmentswithout changes in their compensation and otherbenefits.”

On May 3, 1999, in an undated letter addressed toDaya, the Bank’s Board Chairman, petitioner ElmerMendoza expressed his opinion on the reshufflealleging that "his reshuffling is deemed to be ademotion without any legal basis and thus asking tobe allowed to remain in his position.

On May 10, 1999, Daya replied reitirating that “it wasnever the intention (of the management) todowngrade his position in the bank considering thatdue compensation is maintained and no futurereduction was intended. It was further reiterated thatthe “conduct of reshuffle is also a prerogative of bankmanagement.".

On June 7, 1999, petitioner submitted to the bank'sTayabas branch manager a letter in which he appliedfor a leave of absence from work.

On June 21, 1999, petitioner again submitted a letterasking for another leave of absence for twenty dayseffective on the same date.

On June 24, 1999, while on his second leave ofabsence, petitioner filed a Complaint beforeArbitration Branch No. IV of the National LaborRelations Commission (NLRC). The Complaint -- forillegal dismissal, underpayment, separation pay anddamages -- was filed against the Rural Bank ofLucban and/or its president, Alejo B. Daya; and itsTayabas branch manager, Briccio V. Cada. The casewas docketed as NLRC Case SRAB-IV-6-5862-99-Q.The labor arbiter's June 14, 2000 Decision upheldpetitioner's claims.

On appeal, the NLRC reversed the labor arbiter. In itsJuly 18, 2001 Resolution. After the NLRC denied hisMotion for Reconsideration, petitioner brought beforethe CA a Petition for Certiorari assailing the foregoingResolution.

Finding that no grave abuse of discretion could beattributed to the NLRC, the CA Decision ruled in favorof the private respondent rural bank.

Issue:

Whether or not the the petitioner was constructivelydismissed from employment and that the reshufflingpursuant to Board Res. Nos. 99-52 and 99-53 is avalid exercise of management prerogative.

Held:

The Petition has no merit.

Constructive dismissal is defined as an involuntaryresignation resorted to when continued employment isrendered impossible, unreasonable or unlikely; whenthere is a demotion in rank or a diminution of pay; orwhen a clear discrimination, insensibility or disdain byan employer becomes unbearable to the employee.

Jurisprudence recognizes the exercise ofmanagement prerogatives. For this reason, courtsoften decline to interfere in legitimate businessdecisions of employers. Indeed, labor lawsdiscourage interference in employers' judgments

concerning the conduct of their business. The lawmust protect not only the welfare of employees, butalso the right of employers.

In the pursuit of its legitimate business interest,management has the prerogative to transfer or assignemployees from one office or area of operation toanother -- provided there is no demotion in rank ordiminution of salary, benefits, and other privileges;and the action is not motivated by discrimination,made in bad faith, or effected as a form of punishmentor demotion without sufficient cause. This privilege isinherent in the right of employers to control andmanage their enterprise effectively. The right ofemployees to security of tenure does not give themvested rights to their positions to the extent ofdepriving management of its prerogative to changetheir assignments or to transfer them.

Managerial prerogatives, however, are subject tolimitations provided by law, collective bargainingagreements, and general principles of fair play andjustice.

Decision:

WHEREFORE, this Petition is DENIED, and the June14, 2002 Decision and the September 25, 2002Resolution of the Court of Appeals are AFFIRMED.Costs against petitioner. SO ORDERED.

Davide, Jr., C.J., (Chairman), Ynares-Santiago,Carpio, and Azcuna, JJ., concur.

Gelmart Industries Phils., Inc. vs. NLRCG.R. No. 85668 August 10, 1989

FIRST DIVISION: GANCAYCO, J.:

Facts:

Private respondent Felix Francis started working asan auto-mechanic for petitioner Gelmart IndustriesPhils., Inc. (GELMART) sometime in 1971. As such,his work consisted of the repair of engines andunderchassis, as well as trouble shooting andoverhauling of company vehicles. He is likewiseentrusted with some tools and spare parts infurtherance of the work assigned to him.

On April 11, 1987, private respondent was caught bythe security guards taking out of GELMART'spremises one (1) plastic container filled with about 16ounces of "used' motor oil, without the necessary gatepass to cover the same as required underGELMART's rules and regulations which provides thattheft and/or pilferage of company property merits anoutright termination from employment. By reasonthereof, petitioner was placed under preventivesuspension pending investigation for violation ofcompany rules and regulations on April 13, 1987.

After due investigation, or on May 20, 1987, privaterespondent was found guilty of theft of companyproperty. As a consequence, his services weresevered.

Thereafter, private respondent filed a complaint forillegal dismissal before the NLRC. In a decision datedFebruary 26, 1988, Labor Arbiter Ceferina J. Diosanaruled that private respondent was illegally dismissedand, accordingly, ordered the latter's reinstatementwith full backwages from April 13, 1987 up to the timeof actual reinstatement.

From this decision, GELMART interposed an appealwith the NLRC. In its decision dated October 21,

1988, the NLRC affirmed with modification the rulingof Labor Arbiter Diosana.

On December 12, 1988, GELMART filed before thisCourt a special civil action for certiorari with a prayerfor the issuance of a temporary restraining order.

On January 18, 1989, this Court, without necessarilygiving due course to the petition, issued a temporaryrestraining order enjoining respondents fromenforcing the assailed decision.

Issue:

Whether or not the NLRC committed a grave abuse ofdiscretion for rendering a decision that is contrary tolaw and existing jurisprudence in ordering thereinstatement of private respondent to his formerposition with payment of backwages.

Held:

We find no merit in this petition.

Consistent with the policy of the State to bridge thegap between the underprivileged workingmen and themore affluent employers, the NLRC rightfully tilted thebalance in favor of the workingmen — and this wasdone without being blind to the concomitant right ofthe employer to the protection of his property.

On the other hand, without being too harsh to theemployer, and naively liberal to labor, on the other,the NLRC correctly pointed out that privaterespondent cannot totally escape liability for what ispatently a violation of company rules and regulations.

To reiterate, be it of big or small commercial value,intended to be re-used or altogether disposed of orwasted, the "used" motor oil still remains, in legalcontemplation, the property of GELMART. As such, totake the same out of GELMART's premises withoutthe corresponding gate pass is a violation of thecompany rule on theft and/or pilferage of companyproperty.

In this score, it is very difficult for this Court to discerngrave abuse of discretion on the part of the NLRC inmodifying the appealed decision. The suspensionimposed upon private respondent is a sufficientpenalty for the misdemeanor committed.

Considering that private respondent herein has noprevious derogatory record in his fifteen (15) years ofservice with petitioner GELMART the value of theproperty pilfered (16 ounces of used motor oil) is veryminimal, plus the fact that petitioner failed toreasonably establish that non-dismissal of privaterespondent would work undue prejudice to theviability of their operation or is patently inimical to thecompany's interest, it is more in consonance with thepolicy of the State, as embodied in the Constitution, toresolve all doubts in favor of labor.

Thus, the penalty of preventive suspension wassufficient punishment for the violation under thecircumstance and that complainant-appellee’sdismissal unwarranted.

Decision:

WHEREFORE, in view of the foregoing, the petition isDISMISSED for lack of merit. The, restraining orderissued by this Court on January 18, 1989 enjoiningthe enforcement of the questioned decision of theNational Labor Relations Commission is hereby lifted.No pronouncement as to costs. SO ORDERED.

China Banking Corp., vs. BorromeoG.R. No. 156515 October 19, 2004

SECOND DIVISION: CALLEJO, SR., J.:

Facts:

Respondent Mariano M. Borromeo joined thepetitioner Bank on June 1, 1989 as Manager Level 1assigned at the latter’s Regional Office in Cebu City.Subsequently, the respondent was laterallytransferred to Cagayan de Oro City as BranchManager of the petitioner Bank’s branch thereat.

For the years 1989-1995 he was promoted fromManager Level I to Senior Manager Level II havingconsistently received a "highly satisfactory"performance rating (1989-1990) and a "very good"performance rating (1991-1995). Finally, in 1996, witha "highly satisfactory" performance rating, therespondent was promoted to the position of AssistantVice-President, Branch Banking Group for theMindanao area effective October 16, 1996.

However, prior to his last promotion and thenunknown to the petitioner Bank, the respondent,without authority from the Executive Committee orBoard of Directors, approved several DAUD/BP(Drawn Against Uncollected Deposits/BillsPurchased) accommodations amounting toP2,441,375 in favor of certain Joel Maniwan. Suchchecks, which are not sufficiently funded by cash, aregenerally not honored by banks. Further, suchaccommodations may be granted only by a bankofficer upon express authority from its ExecutiveCommittee or Board of Directors.

Upon knowing of this by the bank authorities, SamuelL. Chiong, First Vice-President and Head-VisayasMindanao Division of the petitioner bank issued amemorandum seeking clarification on issues relativethereto. In reply, the respondent answered thequeries but nonetheless, accepted full responsibilityfor committing an error in judgment, lapses in controland abuse of discretion. However, respondentvehemently denied benefiting therefrom. Apology wasaccorded by the respondent in relation to this andsubsequently tendered his irrevocable resignationeffective May 31, 1997.

His acts having constituted a violation of the Bank’sCode of Ethics, respondent was directed to restitutethe amount of P1,507,736.79 representing 90% of thetotal loss of P1,675,263.10 incurred by the petitionerBank. However, in view of his resignation andconsidering the years of service in the petitionerBank, the management earmarked only P836,637.08from the respondent’s total separation benefits or pay.The said amount would be released upon recovery ofthe sums demanded from Maniwan in a civil case.

Consequently, the respondent, through counsel,made a demand on the petitioner Bank for thepayment of his separation pay and other benefits butthe petitioner Bank maintained its position to withholdthe sum earmarked. Thus, the respondent filed withthe National Labor Relations Commission (NLRC),the complaint for payment of separation pay, mid-yearbonus, profit share and damages against thepetitioner Bank. The Labor Arbiter ruled in favor of thebank. Respondent appealed to the NLRC but itaffirmed in toto the findings of the Labor Arbiter.However, the CA upon petition set aside the NLRCdecision and alleged that repondent was denied hisrights to due process. Hence, this petition.

Issue:

Whether the bank has the prerogative/right to imposethe withholding of respondent’s benefits as what itconsidered the appropriate penalty under thecircumstances pursuant to its company rules andregulations.

Held:

The petition is meritorious. The petitioner Bank wasleft with no other recourse but to impose the ancillarypenalty of restitution in view of his voluntaryseparation from the petitioner Bank. It was certainlywithin the petitioner Bank’s prerogative to impose onthe respondent what it considered the appropriatepenalty under the circumstances pursuant to itscompany rules and regulations.

It is well recognized that company policies andregulations are, unless shown to be grosslyoppressive or contrary to law, generally binding andvalid on the parties and must be complied with untilfinally revised or amended unilaterally or preferablythrough negotiation or by competent authority.Moreover, management has the prerogative todiscipline its employees and to impose appropriatepenalties on erring workers pursuant to companyrules and regulations.The petitioner Bank’s business is essentially imbuedwith public interest and owes great fidelity to thepublic it deals with. It is expected to exercise thehighest degree of diligence in the selection andsupervision of their employees. As a corollary, andlike all other business enterprises, its prerogative todiscipline its employees and to impose appropriatepenalties on erring workers pursuant to companyrules and regulations must be respected. The law, inprotecting the rights of labor, authorized neitheroppression nor self-destruction of an employercompany which itself is possessed of rights that mustbe entitled to recognition and respect.Significantly, the respondent ids not wholly deprivedof his separation benefits but were merely withheldand will be released without delay as soon as thebank has satisfied a judgment in the civil case.

Decision:WHEREFORE, the petition is GRANTED. TheDecision dated July 19, 2002 of the Court of Appealsand its Resolution dated January 6, 2003 in CA-G.R.SP No. 57365 are REVERSED AND SET ASIDE. TheResolution dated October 20, 1999 of the NLRC,affirming the Decision dated February 26, 1999 of theLabor Arbiter, is REINSTATED. SO ORDERED.

Pampanga Bus Company, INC., vs. PAMBUSCOEmployees' Union, Inc.G.R. No. 46739 September 23, 1939EN BANC: MORAN, J.:

Facts:On May 31, 1939, the Court of Industrial Relationsissued an order, directing the petitioner herein,Pampanga Bus Company, Inc., to recruit from therespondent, Pambusco Employees' Union, Inc., newemployees or laborers it may need to replacemembers of the union who may be dismissed fromthe service of the company, with the proviso that, ifthe union fails to provide employees possessing thenecessary qualifications, the company may employany other persons it may desire. This order, insubstance and in effect, compels the company,against its will, to employ preferentially, in its service,the members of the union.

Issue:Whether or not the said order issued by the CIR validand not violative of the right of the employer to selectemployees.

Held:We hold that the court has no authority to issue suchcompulsory order.

The general right to make a contract in relation toone's business is an essential part of the liberty of thecitizens protected by the due-process clause of theConstitution. The right of the laborer to sell his laborto such person as he may choose is, in its essence,the same as the right of an employer to purchaselabor from any person whom it chooses. Theemployer and the employee have thus an equality ofright guaranteed by the Constitution.Section of Commonwealth Act No. 213 confers uponlabor organizations the right "to collective bargainingwith employers for the purpose of seeking betterworking and living conditions, fair wages, and shorterworking hours for laborers, and, in general, topromote the material, social and moral well-being oftheir members." This provision in granting to laborunions merely the right of collective bargaining,impliedly recognizes the employer's liberty to enter ornot into collective agreements with them. Indeed, weknow of no provision of the law compelling suchagreements. Such a fundamental curtailment offreedom, if ever intended by law upon grounds ofpublic policy, should be effected in a manner that isbeyond all possibility of doubt. The suprememandates of the Constitution should not be looselybrushed aside. As held by the Supreme Court of theUnited States in Hitchman Coal & Co. vs. Mitchell(245 U. S., 229; 62 Law. ed., 260, 276):

Decision:Thus considered, the order appealed from is herebyreversed, with costs against the respondentPambusco Employees' Union, Inc.

G.R. No. L-6846 July 20, 1955GREGORIO ARANETA EMPLOYEES UNION, ETC.,ET AL., petitioners, vs. ARSENIO C. ROLDAN, ETAL., respondents.

JUGO, J.:

This is a petition for certiorari to review the Resolutionof the Court of Industrial Relations dated March 31,1953. Associate Judge Jose S. Bautista of said court,in his order of February 10, 1953, states the facts ofthe case substantially as follows:

The Agricultural Division of the Gregorio Araneta, Inc.,was established in 1947 with a capital of P200,000.The total investment in that Division in 1953 wasabout P3,000,000. To reduce this overcapitalization,the Board of Directors felt that it was necessary eitherto invite fresh capital from outside or to adopt aretrenchment policy. When Heacock and Companyrefused the invitation to invest in the enterprise, theBoard took the alternative of retrenchment.The Board decided not to import as muchmerchandise as usual. It also reduced credits. Allthese plans required a reduction in the volume ofbusiness necessitating likewise a reduction ofpersonnel and caused the laying off of 17 employees.The selection of those to be laid off was made by atechnical man and approved by the Board. Theseemployees were given one month separation pay,except Nicolas Gonzalez who refused to receive it.The reorganization of the Agricultural Division wasadopted by unanimous resolution of the Board ofDirectors as a consequence of the retrenchmentpolicy. This was adopted even before the petitioner,"Gregorio Araneta Employees' Union", was organizedand; consequently, it was never directed against theunion. Judge Bautista adds: ". . . Considering this fact,and taking into account all the circumstances of thiscase, especially the actual reduction of business ofsaid Division, the court fails to find sufficientjustification for altering the action of the Board ofDirectors regarding those employees, who receivedtheir severance pay".Judge Bautista, however, believed that Gonzalesshould not have been separated because his workwas shifted to another employee by the name ofAugusto Achacoso, who was thus overburdened.Both parties filed their respective motions forreconsideration with the court en banc. The latter

modified the decision of Associate Judge Bautista inits resolution of March 31, 1953, prepared by thePresiding Judge Arsenio C. Roldan and concurred inby Associate Judges Modesto Castillo and Juan L.Lantin. The modification consists only in holding thatthe laying off of Gonzalez was also legal. JudgeBautista dissented with regard to the separation ofGonzalez, giving the same reasons he gave in hisoriginal opinion.We find no reason for disturbing the decision of theCourt of Industrial Relations, en banc. The laying offof the 17 employees was due to the retrenchmentpolicy which the Company had to adopt in order toreduce the overcapitalization and minimize expenses.The volume of business was considerably reduced.It should be noted that the retrenchment policy wasadopted before even the organization of thepetitioning union. It was not, therefore, aimed at theUnion or any of its members for union or laboractivities. It was not an unfair labor practice.In view of the foregoing, the petition is denied, withoutpronouncement as to costs. It is so ordered.Bengzon, Acting C. J., Padilla, Montemayor, Reyes,A., Bautista Angelo, Labrador, Concepcion, andReyes, J. B. L., JJ., concur.

Philippine Sheet Metal Workers Union vs CIRG..R. No. L-2028April 28, 1949

Facts:

This is a petition for certiorari to review an order of theCourt of Industrial Relations on the ground that thesame was rendered in excess of jurisdiction and withgrave abuse of discretion.

On March 1, 1985, the respondent Union filed aNotice of Strike with the Bureau of Labor Relations(BLR) on ground of unfair labor practice consisting ofalleged refusal to bargain, dismissal of unionofficers/members; and coercing employees to retracttheir membership with the union and restraining non-union members from joining the union.

The said order was issued of said court involving anindustrial dispute between the respondent company(a corporation engaged in the manufacture of tinplates, aluminum sheets, etc.) and its laborers someof whom belong to the Philippine Sheet MetalWorkers' Union (CLO) and some to the Liberal LaborUnion.

The dispute was over certain demands made uponthe company by the laborers, one of the demands,being for the recall of eleven workers who had beenlaid off. Temporarily taken back on certain conditionspending final determination of the controversy, theseeleven workers were in the end ordered retained inthe decision handed down by the court on February19, 1947.

The petitioner tried to prove that the 11 laborers werelaid off by the respondent company due to their unionactivities.

On February 10, 1947, that is, nine days before thedecision came down, filed a motion in the case,asking for authority to lay off at least 15 workers in itscan department on the ground that the installation andoperation of nine new labor-saving machines in saiddepartment had rendered the services of the saidworkers unnecessary.

Issue:

W/N the firing of the laborers due to their unionactivities is valid?

Held:

Yes. The right to reduce personnel should, of course,not be abused. It should not be made a pretext foreasing out laborers on account of their union

activities. But neither should it be denied when it isshows that they are not discharging their duties in amanner consistent with good discipline and theefficient operation of an industrial enterprise.

The petitioner contends that the order complained ofwas made with grave abuse of discretion and inexcess of jurisdiction in that it is contrary to thepronouncement made by the lower court in itsdecision in the main case where it disapproved of thedismissal of eleven workers "with whom themanagement is displeased due to their unionactivities." It appears, however, that thepronouncement was made upon a distinct set of facts,which are different from those found by the court inconnection with the present incident, and that verydecision, in ordering the reinstatement of the elevenlaborers, qualifies the order by saying that thoselaborers are to be retained only "until the occurrenceof facts that may give rise to a just cause of theirlaying off or dismissal, or there is evidence ofsufficient weight to convince the Court that theirconduct is not satisfactory."

After a careful review of the record, we find that theCourt of Industrial Relations has neither exceeded itsjurisdiction nor committed grave abuse of discretion inrendering the order complained of. The petition forcertiorari is, therefore, denied, but without costsagainst the petitioner for the reasons stated in itsmotion to litigate as pauper.

TIONG KING, petitioner,vs.COURT OF INDUSTRIAL RELATIONS and THENATIONAL TAILOR'S ASSOCIATION, respondents

G.R. No. L-3587December 21, 1951

Facts:

Gaw Pun So owned and operated a tailor shop knownas the Army Shirt Factory, located in his own house atNos. 231-245 Soler Street, Manila. In January, 1948,he had a labor dispute with his personnel and,pending the case in the Court of Industrial Relations,Gaw Pun So, irked and worried by the incidents oflitigation, thought of dissolving the business andselling the sewing machines. Tiong King offered totake over the business by leasing the place and thesewing machines. The transfer was put in writing.Tiong King continued the Army Shirt Factory from themonth of February with the same employees had byGaw Pun So. This transfer was known to thepersonnel, so much so that the latter, as petitioner inthe pending dispute in the Court of IndustrialRelations, prayed that Tiong King be included as arespondent. In due time, the National TailorsAssociation entered that all cases were terminatedagainst the respondents. This agreement was dulyapproved by the Court of Industrial Relations.

On April 27, 1948, Tiong King filed a petition in theCourt of Industrial Relations Case No. 117-V-3,alleging that since he operated his shop in February,1948, he had continually suffered losses; that as thereremained only very little of the capital originallyinvested, and that he was definitely closing the shopon May 30, 1948. Tiong King accordingly prayed thathe be allowed to close his tailor shop and businessfrom six o'clock in the afternoon of May 29, 1948. OnMay 29, 1948, Presiding Judge Arsenio C. Roldan ofthe Court of Industrial Relations issued an orderenjoining Tiong King not to close his factory and notto dismiss, suspend or lay off any laborer or employeewithout previous authority of said court.

Upon petitioner for reconsideration filed by counsel forTiong King, the Court of Industrial Relationspromulgated a resolution dated May 27, 1949,allowing Tiong King to close his business and shop,subject to the condition that, upon reopening thesame, his former personnel would be taken back.

Upon motion for reconsideration filed by counsel forthe National Tailor's Association, the Court ofIndustrial Relations, promulgated a resolution datedOctober 31, 1949, reaffirming their stand on theresolution of the Court of Industrial Relations underdate of July 1, 1949.

The present appeal by certiorari was taken by TiongKing against the last resolution of the Court ofIndustrial Relations.

Issue:

Whether he was the owner or operator thereof andhad the right to file the petition in the Court ofIndustrial Relations to close the tailor’s shop?

Held:

Upon this point, it is only sufficient to recall that theNational Tailors Association entered into a stipulationwith Tiong King alone whereby they agreed that allcases against the former owners of the business wereterminated. That Tiong King was conceded to be theowner and operator of the army shirt factory at thetime his petition to close it was filed, is conclusivelyborne out by the fact that Presiding Judge Roldan inhis decision of January 13, 1949, ordered Tiong King,and not Gaw Pun So, to pay the salaries and wagesof the personnel.

It is contended, however, that "If at all the court hasapproved of the agreement between the NationalTailors' Association and Mr. Tiong King it wasbecause — 'this arrangement is a very good solutionto the present conflict as it is advantageous not onlyto the union but also the management, and, is inconsonance with the contract entered into betweenthe management and the new workers." Thiscontention is followed with the remark that theapproval of said agreement did not include a findingthat Tiong King was either the owner or the lessee ofthe Army Shirt Factory. We are unable to agree. Inentering into the agreement with the National TailorsAssociation, Tiong King acted in his own behalf,regardless of the former owners of the business.Indeed, it was covenanted that all the cases againstthe latter were deemed terminated. Considerations offair play and justice demand that Tiong King be giventhe full legal effect of said agreement which before thesanction of the Court of Industrial Relations.

There being no question that Tiong King's capitalinvested in the Army Shirt Factory was almostexhausted at the time of the filing of his petition toclose it, said petition must necessity be granted. It isadmitted by all the Judges of the Court of IndustrialRelations that an employer may close his business,provided the same is done in good faith and is duebeyond his control. To rule otherwise, would beoppressive and inhuman.

Wherefore, reversing the resolution of the Court ofIndustrial Relations dated October 31, 1949, wehereby affirm the resolution of said court dated May27, 1949. So ordered without costs.

Bengzon, Montemayor, Jugo, and Bautista Angelo,JJ., concur.

G.R. No. L-20987 June 23, 1965PHILIPPINE LAND-AIR-SEA LABOR UNION(PLASLU) ET AL., petitioners, vs. CEBUPORTLAND CEMENT COMPANY, ETAL., respondents.

REYES, J.B.L., J.:

Petition for review of an order of the Court of industrialRelations of December 8, 1962 denying a motion ofPetitioners Union and individual members thereof to

reopen CIR Case No. 241-V (2), decided March 17,1960.

The petitioners had originally instituted the case in theCourt of Industrial Relations to secure an orderdirecting the respondent Cebu Portland CementCompany to pay overtime compensation anddifferentials to the individual petitioners, for workperformed as security guards on Saturdays after theenactment of the Forty Hours a Week Law (Rep. Act1880), starting from March 22, 1958, when theCompany stopped paying overtime compensation forwork on Saturdays even if done in excess of the 40weekly hours of work prescribed in said Republic Act.The Company resisted the claim, alleging thatpetitioners had no cause of action because they werenot covered by the law invoked, as implemented byExecutive Order No. 251.At the hearing, the parties submitted a stipulation offacts; and on March 17, 1960 the Industrial Courtissued an order finding that, pursuant to the opinion ofthe Civil Service Commissioner, dated August 23,1957, and that of the Executive Secretary, datedOctober 23, 1957, security guards are not within thecoverage of Republic Act No. 1880 (Forty Hours aWeek Law), and are not entitled to overtimecompensation. This order of the hearing judge wasaffirmed, and reconsideration thereof denied, by thecourt en banc on May 10, 1960.Over two years later, on April 3, 1962, petitionersherein, through new counsel, made it of record thattheir former attorney had not been authorized by themto enter into the so-called stipulations of facts in thecase, and particularly that said counsel had not beenauthorized to stipulate, as he did, that the individualpetitioners were required by the Company to Work 56hours a week "due to the nature of their services andin the interest of public service," which petitionerstermed a stipulation of legal conclusions.On April 5, 1962, petitioners, by their new counsel,filed a petition to reopen case No. 241-V(20), allegingthat the order of March 17, 1960 was not inaccordance with law; that the Stipulation of Factstherein was merely a stipulation of legal conclusionsnot binding on petitioners; that the order of dismissalby the court was based on administrative opinionsthat had been since overruled and superseded bysubsequent rulings of the administrative authorities,particularly that issued on August 23, 1960 by theExecutive Secretary, by authority of the President,ruling that security guards in government-owned orcontrolled corporations discharging proprietaryfunctions are not excluded from the benefits of the 40-hour week law (R.A. 1880); that the Auditor General,by memorandum Circular No. 438 of November 29,1960, had implemented said ruling of the ExecutiveSecretary; and that the Supreme Court, in G.R. No. L-16984, Manila Port Service vs. C.I.R., promulgatedJune 30, 1961, had ruled that under Republic Act No.1880 and Executive Order No. 251 work on Saturdaymay be counted for overtime purposes if during thepreceding 5 days (Monday to Friday) the laborers oremployees had worked the required minimum of 40hours, which was allegedly the case of petitioningsecurity guards.Upon opposition of the respondent Company, theIndustrial Court, by order of July 17, 1962, denied themotion to reopen, reasoning that the order of March17, 1960 constituted res judicata, and that under theruling of this Supreme Court in Pepsi-Cola BottlingCo. vs. Philippine Labor Organizations, L-3506,January 31, 1951, a proceeding may, be reopenedonly upon grounds coming into existence after theorder rendered by the C.I.R., grounds not alreadylitigated and decided, and not available to the partiesat the former proceeding.Their motion to reconsider this last ruling having beenrejected, petitioners brought the case to us for review.In this appeal, it is insisted, on behalf of the appellantlaborers, that the order of March 17, 1960 now underappeal was erroneous and unwarranted in law, andthat the Industrial Court exceeded its jurisdiction whenit held that the exemption from the 40-hour week law,"where the exigencies of the service so require",

applies to security guards, instead of holding that itsapplication is limited only to workers in offices andentities performing governmental functions.Erroneous or not, the order of March 17, 1960 haslong become final and executory, and is beyond ourpower to alter. The appellants could have secured areview of the correctness of this order by seasonableappeal, which they failed to do for reasons notapparent in the record. No reason or excuse is givenwhy they allowed more than two years to elapsebefore adopting remedial steps.The argument that former counsel for the workers hadno authority to stipulate that petitioners were requiredto work 56 hours a week without overtimecompensation due to the nature of their work andduties and in the interest of public service, becausethe same is a legal conclusion, is untenable. Thereasons why the petitioners-appellants were requiredto work are matters of fact, and within the power ofcounsel to stipulate without special authority(Rodriguez vs. Santos, 55 Phil. 721), not being acompromise. That the facts as agreed upon wereunfavorable to the clients does not detract from thebinding effect of the stipulation, and it has beenrepeatedly held that clients are bound by the acts andeven the mistakes of counsel in procedural technique(Montes vs. Court of First Instance of Tayabas, 48Phil. 640; Islas vs. Platon, 47 Phil. 162; Re Filart, 40Phil. 205).Appellants lay stress on the last portion of section 17of Commonwealth Act No. 103 creating the Court ofIndustrial Relations and defining its powers. Said legalprecept, invoked here and in the court below, is to theeffect:That at any time during the effectiveness of an award,order or decision the Court may, on application of aninterested party, and after due hearing alter, modify inwhole or in part, or set aside such award, order ordecision, or reopen any question involved therein.The difficulty lies in reconciling this provision with thewell established rules of res judicata and thepreclusive effect of final adjudications. It is clear that ifwe interpret it is conferring on the C.I.R. unconditionalpower to reopen finally adjudicated cases, itsdecisions and orders could never, be relied upon asfinal; conflicts between capital and labor would beinterminable; and industrial planning would becomeimpossible.The rulings of the Supreme Court have establishedthe conditions for reopening under section 17 of C.A.103: if must be upon grounds not already directly orindirectly litigated, and the grounds must not beavailable to the parties in the previous proceedings;and the reopening must not affect the period alreadyelapsed at the time the order to be reopened wasissued.Thus, in Pepsi Cola Bottling Co. vs. Philippine LaborOrganization, G.R. No. L-3506, January 31, 1951, thisCourt held:Petitioner invokes Section 17 of Commonwealth ActNo. 103 to the effect that "... at any time during theeffectiveness of an award, order or decision, theCourt may, on application of an interested party, andafter due hearing alter, modify in whole or in part, orset aside any such award, order or decision, orreopen any question involved therein." Under thisprovision, a proceeding may be reopened only upongrounds coming into existence after the order ordecision was rendered by the Court of IndustrialRelations, but not upon grounds which had alreadybeen directly or indirectly litigated and decided by saidcourt, nor upon grounds available to the parties at theformer proceedings and not availed of by any of them.To hold otherwise may give way to vicious andvexatious repetition of proceedings.And in Nahag vs. Roldan, 94 Phil. 88, it was ruled:While the above section (17) apparently authorizesthe modification of an award at any time during itseffectiveness, there is nothing in its wording tosuggest that such modification may be authorizedeven after the order for execution of the award hasalready become final, with respect, of course, to theperiod that had already elapsed at the time the orderas issued. To read such authority into the law would

make of litigations between capital and labor anendless affair, with the Industrial Court acting like amodern Penelope, who puts off her suitors byunraveling every night what she has woven by day.Such a result could not have been contemplated bythe Act creating said Court. (Nahag vs. Roldan, 94Phil. 88, 91)

The main is issue in this appeal is thus reduced to thepoint whether, under the rulings heretofore quoted,appellants have shown new grounds entitling them toa reopening of C.I.R. Case No. 241-V,(20). We are ofthe opinion that they have done so, and that it waserror for the CIR to hold otherwise. In their motion toreopen the proceedings, as well as in the supportingmemoranda, appellants specifically called attention tothe ruling of the Office of the President, dated August23, 1960, extending the benefits of the Forty-HourWeek Law to security guards of government-owned orcontrolled corporations performing proprietaryfunctions; and also to the Memorandum Circular No.438 of the General Auditing Office calling the attentionof "All Managing Heads and Auditors and/orComptrollers of government-owned or controlledcorporations" to the preceding ruling. These executiverulings apparently superseded those of 1957 uponwhich the CIR rested its order denying appellants'right to extra compensation. There is furthermore thedecision of the Industrial Court, rendered on August23, 1962, in Case No. 1389-V, Cenon Francisco, etal. vs. Cebu Portland Cement Co., directing the lattercompany to "pay all petitioners security guards theiradditional overtime compensation for their Saturdayservices from March 22, 1958," contrary to the rulingof March 17, 1960, review of which is now beingsought. All these rulings came after the order ofMarch 17, 1960, that denied overtime pay toappellants herein, and were, therefore, not availablewhen the appellants' case was originally tried andsubmitted. Without in any way anticipating the weightto be accorded to these subsequent rulings, nor howthey would influence the case of appellants, theirincompatibility with the order of March 17, 1960, thatdecided appellants' rights, is apparent, and, therefore,justify a rehearing under the doctrine of the Pepsi-Cola case.Appellee Cebu Portland Cement Company arguesthat it was laches for appellants to have delayed theirmotion to reopen, and that the facts of appellants'case differ from those of Case No. 1389-V. Whetheror not the delay was sufficient to constitute laches,and whether it was inexcusable or not, cannot beinquired into unless appellants' case is first reopened.The same can be said about the alleged differencesbetween their case and Case No. 1389-V.Of course, as pointed out in Nahag vs.Roldan, supra the new award, even if favorable toappellants, must be limited to the period subsequentto that covered by the order of March 17, 1960.WHEREFORE, the orders of the Court of IndustrialRelations denying reopening of Case No. 241-V(20)are revoked and set aside, and the records orderedremanded to the court of origin for further proceedingsin conformity with this decision. Costs will be taxedagainst appellee Cebu Portland Cement Co.Bengzon, C.J., Bautista Angelo, Concepcion,Paredes, Dizon, Regala, Makalintal, Bengzon, J.P.,and Zaldivar, .J.P., concur.Barrera, J., is on leave.

RIZAL EMPIRE INSURANCE GROUP AND/ORSERGIO CORPUS, petitioners,vs.NATIONAL LABOR RELATIONS COMMISSION,TEODORICO L. RUIZ, as Labor Arbiter andROGELIO R. CORIA, respondents.

G.R. No. 73140May 29, 1987

Facts:

In August, 1977, herein private respondent Rogelio R.Coria was hired by herein petitioner Rizal Empire

Insurance Group as a casual employee with a salaryof P10.00 a day. On January 1, 1978, he was made aregular employee, having been appointed as clerk-typist, with a monthly salary of P300.00. Being apermanent employee, he was furnished a copy ofpetitioner company's "General Information, OfficeBehavior and Other Rules and Regulations." In thesame year, without change in his position-designation, he was transferred to the ClaimsDepartment and his salary was increased to P450.00a month. In 1980, he was transferred to theUnderwriting Department and his salary wasincreased to P580.00 a month plus cost of livingallowance, until he was transferred to the FireDepartment as filing clerk. In July, 1983, he wasmade an inspector of the Fire Division with a monthlysalary of P685.00 plus allowances and other benefits.

On October 15, 1983, private respondent Rogelio R.Coria was dismissed from work, allegedly, on thegrounds of tardiness and unexcused absences.Accordingly, he filed a complaint with the Ministry ofLabor and Employment (MOLE), and in a Decisiondated March 14, 1985 (Record, pp. 80-87), LaborArbiter Teodorico L. Ruiz reinstated him to hisposition with back wages. Petitioner filed an appealwith the National labor Relations Commission (NLRC)but, in a Resolution dated November 15, 1985 (Ibid,pp. 31-32), the appeal was dismissed on the groundthat the same had been filed out of time. Hence, theinstant petition.

Issue:

Whether or not NLRC committed a grave abuse ofdiscretion amounting to lack of jurisdiction indismissing petitioner’s appeal on a technicality.

Held:

Rule VIII of the Revised Rules of the National LaborRelations Commission on appeal, provides:

SECTION 1. (a) Appeal. — Decision or orders of alabor Arbiter shall be final and executory unlessappealed to the Commission by any or both of theparties within ten (10) calendar days from receipt ofnotice thereof.

SECTION 6. No extension of period. — No motion orrequest for extension of the period within which toperfect an appeal shall be entertained.

The record shows that the employer (petitionerherein) received a copy of the decision of the LaborArbiter on April 1, 1985. It filed a Motion for Extensionof Time to File Memorandum of Appeal on April 11,1985 and filed the Memorandum of Appeal on April22, 1985. Pursuant to the "no extension policy" of theNational Labor Relations Commission, aforesaidmotion for extension of time was denied in itsresolution dated November 15, 1985 and the appealwas dismissed for having been filed out of time.

The Revised Rules of the National Labor RelationsCommission are clear and explicit and leave no roomfor interpretation. Moreover, it is an elementary rule inadministrative law that administrative regulations andpolicies enacted by administrative bodies to interpretthe law which they are entrusted to enforce, have theforce of law, and are entitled to great respect(Espanol v. Philippine Veterans Administration, 137SCRA 314 [1985]).

Under the above-quoted provisions of the RevisedNLRC Rules, the decision appealed from in this casehas become final and executory and can no longer besubject to appeal.

Even on the merits, the ruling of the Labor Arbiterappears to be correct; the consistent promotions inrank and salary of the private respondent indicate hemust have been a highly efficient worker, who shouldbe retained despite occasional lapses in punctuality

and attendance. Perfection cannot after all bedemanded.

WHEREFORE, this petition is DISMISSED

Philippine Association of Service Expporters, Inc.vs. DrilonG.R. No. 81958 June 30, 1988

EN BANC, SARMIENTO, J:

Facts:The petitioner, Philippine Association of ServiceExporters, Inc. (PASEI), a firm "engaged principally inthe recruitment of Filipino workers for overseasplacement," challenges the Constitutional validity ofDepartment Order No. 1, Series of 1988, of theDepartment of Labor and Employment, in thecharacter of "GUIDELINES GOVERNING THETEMPORARY SUSPENSION OF DEPLOYMENT OFFILIPINO DOMESTIC AND HOUSEHOLDWORKERS," and specifically assailed for"discrimination against males or females;" 2 that it"does not apply to all Filipino workers but only todomestic helpers and females with similar skills;" 3

and that it is violative of the right to travel. It is heldlikewise to be an invalid exercise of the lawmakingpower, police power being legislative, and notexecutive, in character.On May 25, 1988, the Solicitor General, on behalf ofthe respondents Secretary of Labor and Administratorof the Philippine Overseas EmploymentAdministration, filed a Comment informing the Courtthat on March 8, 1988, the respondent LaborSecretary lifted the deployment ban in the states ofIraq, Jordan, Qatar, Canada, Hongkong, UnitedStates, Italy, Norway, Austria, and Switzerland. Insubmitting the validity of the challenged "guidelines,"the Solicitor General invokes the police power of thePhilippine State.Issue:Whether the challenged Department Order is a validregulation in the nature of a police power measureunder the Constitution.Held:The concept of police power is well-established in thisjurisdiction. It has been defined as the "state authorityto enact legislation that may interfere with personalliberty or property in order to promote the generalwelfare." 5 As defined, it consists of (1) an impositionof restraint upon liberty or property, (2) in order tofoster the common good. It is not capable of an exactdefinition but has been, purposely, veiled in generalterms to underscore its all-comprehensive embrace.Its scope, ever-expanding to meet the exigencies ofthe times, even to anticipate the future where it couldbe done, provides enough room for an efficient andflexible response to conditions and circumstancesthus assuring the greatest benefits.It finds no specific Constitutional grant for the plainreason that it does not owe its origin to the Charter.Along with the taxing power and eminent domain, it isinborn in the very fact of statehood and sovereignty. Itis a fundamental attribute of government that hasenabled it to perform the most vital functions ofgovernance. The police power of the State ... is apower coextensive with self- protection. It may be saidto be that inherent and plenary power in the Statewhich enables it to prohibit all things hurtful to thecomfort, safety, and welfare of society.As a general rule, official acts enjoy a presumedvalidity. 13 In the absence of clear and convincingevidence to the contrary, the presumption logicallystands.The petitioner has shown no satisfactory reason whythe contested measure should be nullified. There isno question that Department Order No. 1 applies onlyto "female contract workers," 14 but it does not therebymake an undue discrimination between the sexes. Itis well-settled that "equality before the law" under theConstitution 15 does not import a perfect Identity ofrights among all men and women."Protection to labor" does not signify the promotion ofemployment alone. What concerns the Constitution

more paramountly is that such an employment beabove all, decent, just, and humane. Under thesecircumstances, the Government is duty-bound toinsure that our toiling expatriates have adequateprotection, personally and economically, while awayfrom home. In this case, the Government hasevidence, an evidence the petitioner cannot seriouslydispute, of the lack or inadequacy of such protection,and as part of its duty, it has precisely ordered anindefinite ban on deployment.This Court understands the grave implications thequestioned Order has on the business of recruitment.The concern of the Government, however, is notnecessarily to maintain profits of business firms. Inthe ordinary sequence of events, it is profits thatsuffer as a result of Government regulation. Theinterest of the State is to provide a decent living to itscitizens.Decision:The Government has convinced the Court in this casethat this is its intent. We do not find the impugnedOrder to be tainted with a grave abuse of discretion towarrant the extraordinary relief prayed for.WHEREFORE, the petition is DISMISSED. No costs.SO ORDERED.Yap, C.J., Fernan, Narvasa, Melencio-Herrera, Cruz,Paras, Feliciano, Gancayco, Padilla, Bidin, Cortesand Griño-Aquino, JJ., concur.Gutierrez, Jr. and Medialdea, JJ., are on leave

CBTC Employees Union v. ClaveG.R. No. 49582January 7, 1986

Article 5: Rules and Regulations

Facts:

Petitioner Commercial Bank and Trust CompanyEmployees' Union (CBTC) lodged a complaint withthe Department of Labor, against private respondentbank (Comtrust) for non-payment of the holiday paybenefits provided for under Article 95 (now Article 94)of the Labor Code. Failing to arrive at an amicablesettlement at conciliation level, the parties opted tosubmit their dispute for voluntary arbitration.

On 22 April 1976, the Arbitrator handed down anaward on the dispute in favor of petitioner union. Thenext day, 23 April 1976, the Department of Laborreleased Policy Instructions No. 9, a policy regardingthe implementation of the ten (10) paid legal holidays.

Said bank interposed an appeal to the National LaborRelations Commission (NLRC), contending that theArbitrator demonstrated gross incompetence and/orgrave abuse of discretion when he failed to applyPolicy Instructions No. 9. This appeal was dismissedon 16 August 1976.

Private respondent then appealed to the Secretary ofLabor. On 30 June 1977, the Acting Secretary ofLabor reversed the NLRC decision. On the principalissue of holiday pay, the Acting Secretary, guided byPolicy Instructions No. 9, applied the sameretrospectively, among other things.

Issue:

Whether or not the monthly pay of the coveredemployees already includes what Article 94 of theLabor Code requires as regular holiday pay benefit inthe amount of his regular daily wage.

Ruling:

In excluding the union members the benefits of theholiday pay law, public respondent predicated hisruling on Section 2, Rule IV, Book III of the Rules toimplement Article 94 of the Labor Code promulgatedby the then Secretary of Labor and Policy InstructionsNo. 9.

In Insular Bank of Asia and America Employees'

Union (IBAAEU) vs. Inciong, this Court's SecondDivision, speaking through former Justice Makasiar,expressed the view and declared that the section andinterpretative bulletin are null and void, having beenpromulgated by the then Secretary of Labor in excessof his rule-making authority.

The questioned Section 2, Rule IV, Book III of theIntegrated Rules and the Secretary's PolicyInstruction No. 9 add another excluded group,namely, 'employees who are uniformly paid by themonth'. While the additional exclusion is only in theform of a presumption that all monthly paidemployees have already been paid holiday pay, itconstitutes a taking away or a deprivation which mustbe in the law if it is to be valid. An administrativeinterpretation which diminishes the benefits of labormore than what the statute delimits or withholds isobviously ultra vires.

Ruled in favor of the petitioners. PresidentialExecutive Assistant and the Acting Secretary of laborare set aside, and the award of the Arbitratorreinstated.

G.R. No. L-69870 November 29, 1988NATIONAL SERVICE CORPORATION (NASECO)AND ARTURO L. PEREZ, petitioners,vs. THE HONORABLE THIRD DIVISION, NATIONALLABOR RELATIONS COMMISSION, MINISTRY OFLABOR AND EMPLOYMENT, MANILA ANDEUGENIA C. CREDO, respondents.

FACTS: Respondent National Labor RelationsCommission (NLRC), to which the petitionersappealed, rendered a decision directing NASECO toreinstate Credo to her former position, or substantiallyequivalent position, with six (6) months' backwagesand without loss of seniority rights and otherprivileges appertaining thereto.In NASECO's comment in G.R. No. 70295, it isbelatedly argued that the NLRC has no jurisdiction toorder Credo's reinstatement. NASECO claims that, asa government corporation (by virtue of its being asubsidiary of the National Investment andDevelopment Corporation (NIDC), a subsidiary whollyowned by the Philippine National Bank (PNB), whichin turn is a government owned corporation), the termsand conditions of employment of its employees aregoverned by the Civil Service Law, rules andregulations.

ISSUE: Whether the NLRC has jurisdiction to orderCredo’s reinstatement.

HELD: On the premise that it is the 1987 Constitutionthat governs the instant case because it is theConstitution in place at the time of decision thereof,the NLRC has jurisdiction to accord relief to theparties. As an admitted subsidiary of the NIDC, in turna subsidiary of the PNB, the NASECO is agovernment-owned or controlled corporation withoutoriginal charter.

G.R. No. 98107 August 18, 1997BENJAMIN C. JUCO, petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION andNATIONAL HOUSING CORPORATION,respondents.

FACTS: Juco was hired as project engineer of NHCfrom Nov16, 1970 to May 14, 75. On May 14, he wasseparated from the service for having been implicatedin a crime of theft and/or malversation of public funds.On March25, 1977, Juco filed a complaint for illegaldismissal against NHC with the Department of Labor.Labor Arbiter rendered a decision dismissingcomplaint on the ground that NLRC had nojurisdiction over the case.Juco then elevated the caseto NLRC which rendered a decision reversingdecision of Labor Arbiter. NHC appealed before this

SC. On Jan6, 1989, Juco filed with CSC a complaintfor illegal dismissal, with prelim mandatory injunction.NHC moved for dismissal of complaint on the groundthat CSC has no jurisdiction over case. So, having nojurisdiction, CSC dismissed the case. SubsequentlyJuco also filed with NLRC complaint for illegaldismissal with prelim mandatory injunction. LaborArbiter Caday rendered a decision declaring thatJuco’s dismissal was illegal. NHC appealed beforeNLRC and later on, NLRC reversed the decision ofLabor Arbiter Caday on the ground of lack ofjurisdiction.

ISSUE: Whether NLRC or CSC has jurisdiction overJuco’s case.

HELD: Article IX, Section 2 (1) of the 1987Constitution provides: The civil service embraces allbranches, subdivisions, instrumentalities andagencies of the Government, including governmentowned and controlled corporations with originalcharters.In NASECO v NLRC SC had occasion to apply thepresent Constitution in deciding whether or not theemployees of NASECO are covered by the CivilService Law or the Labor Code notwithstanding thatthe case arose at the time when the 1973 Constitutionwas still in effect. It was ruled that the NLRC hasjurisdiction over the employees of NASECO on theground that it is the 1987 Constitution that governsbecause it is the Constitution in place at the time ofthe decision. Furthermore, the new phrase "withoriginal charter" means that government-owned andcontrolled corporations refer to corporations charteredby special law as distinguished from corporationsorganized under the Corporation Code. Thus,NASECO which had been organized under thegeneral incorporation statute and a subsidiary of theNational Investment Development Corporation, whichin turn was a subsidiary of the Philippine NationalBank, is exluded from the purview of the Civil ServiceCommission.The National Housing Corporation is a governmentowned corporation organized in 1959 in accordancewith Executive Order No. 399, otherwise known asthe Uniform Charter of Government Corporation,dated January 1, 1959. Its shares of stock are andhave been one hundred percent (100%) owned by theGovernment from its incorporation under Act 1459,the former corporation law. The government entitiesthat own its shares of stock are the GovernmentService Insurance System, the Social SecuritySystem, the Development Bank of the Philippines, theNational Investment and Development Corporationand the People's Homesite and Housing Corporation.13 Considering the fact that the NHA had beenincorporated under Act 1459, the former corporationlaw, it is but correct to say that it is a government-owned or controlled corporation whose employeesare subject to the provisions of the Labor Code. Thisobservation is reiterated in the recent case of TradeUnion of the Philippines and Allied Services (TUPAS)v. National Housing Corporation, 14 where we heldthat the NHA is now within the jurisdiction of theDepartment of Labor and Employment, it being agovernment-owned and/or controlled corporationwithout an original charter. Furthermore, we also heldthat the workers or employees of the NHC (now NHA)undoubtedly have the right to form unions oremployee's organization and that there is noimpediment to the holding of a certification electionamong them as they are covered by the Labor Code.Thus, the NLRC erred in dismissing petitioner'scomplaint for lack of jurisdiction because the rule nowis that the Civil Service now covers only government-owned or controlled corporations with originalcharters. 15 Having been incorporated under theCorporation Law, its relations with its personnel aregoverned by the Labor Code and come under thejurisdiction of the National Labor RelationsCommission.

TRADE UNIONS OF THE PHILIPPINES ANDALLIED SERVICES, petitioner, vs. NATIONALHOUSING CORPORATION and ATTY. VIRGILIOSY, as Officer-in-Charge of the Bureau of LaborRelations, respondents.

FACTS: July 13, 1977. TUPAS filed petition for theconduct of a certification election with Regional Officeof the DOL to determine exclusive bargainingrepresentative of workers in NHC. It was claimed thatits members comprised majority of employees ofNHC. Petition dismissed by med-arbiter Jimenezholding that NHC "being a government-owned and/orcontrolled corporation its employees/workers areprohibited to form, join or assist any labororganization for purposes of collective bargainingpursuant to the (IRR) of the Labor Code." From thisorder of dismissal, TUPAS appealed to Bureau ofLabor Relations where Dir. Noriel reversed Jimenez’sorder of dismissal and ordered the holding of acertification election. This order was, however, setaside by OIC Sy in his upon a motion forreconsideration of NHC. In the instant petition forcertiorari, TUPAS seeks reversal of said reso andprays that a certification election be held among rankand file employees of NHC.

ISSUE: Whether NHC employees may or areprohibited to form, join or assist any labororganization for purposes of collective bargaining.

HELD: Under the Constitution, the civil serviceembraces all branches, subdivisions, instrumentalitiesand agencies of the government, includinggovernment-owned or controlled corporations withoriginal charters. Consequently, the civil service nowcovers only government owned or controlledcorporations with original or legislative charters, thatis those created by an act of Congress or by speciallaw, and not those incorporated under and pursuantto a general legislation. As We recently held “..., thesituations sought to be avoided by the 1973Constitution and expressed by this Court in theNational Housing Corporation case ... appearrelegated to relative insignificance by the 1987Constitutional provision that the Civil Serviceembraces government-owned controlled corporationswith original charters and therefore, by clearimplication, the Civil Service does not includegovernment-owned or controlled corporations whichare organized as subsidiaries of government-ownedor controlled corporations under the generalcorporation law. “The workers or employees of NHC undoubtedly havethe right to form unions or employees' organizations.The right to unionize or to form organizations is nowexplicitly recognized and granted to employees inboth the governmental and the private sectors. TheBill of Rights provides that "(t)he right of the people,including those employed in the public and privatesectors, to form unions, associations or societies forpurposes not contrary to law shall not be abridged"This guarantee is reiterated in the second paragraphof Section 3, Article XIII, on Social Justice and HumanRights, which mandates that the State "shallguarantee the rights of all workers to self-organization, collective bargaining and negotiations,and peaceful concerted activities, including the rightto strike in accordance with law ...."Specifically with respect to government employees,the right to unionize is recognized in Paragraph (5),Section 2, Article IX B 12 which provides that "(t)heright to self-organization shall not be denied togovernment employees." The rationale of andjustification for this innovation which found expressionin the aforesaid provision was explained by itsproponents as follows: “... The government is in asense the repository of the national sovereignty and,in that respect, it must be held in reverence if not inawe. It symbolizes the unity of the nation, but it doesperform a mundane task as well. It is an employer inevery sense of the word except that terms andconditions of work are set forth through a Civil ServiceCommission. The government is the biggest employer

in the Philippines. There is an employer-employeerelationship and we all know that the accumulatedgrievances of several decades are now beginning toexplode in our faces among government workers whofeel that the rights afforded by the Labor Code, forexample, to workers in the private sector have beeneffectively denied to workers in government in whatlooks like a grotesque, (sic) a caricature of the equalprotection of the laws. For example, ... there weremany occasions under the old government whenwages and cost of living allowances were granted toworkers in the private sector but denied to workers inthe government for some reason or another, and thegovernment did not even state the reasons why. Thegovernment employees were being discriminatedagainst. As a general rule, the majority of the world'scountries now entertain public service unions. Whatthey really add up to is that the employees of thegovernment form their own association. Generally,they do not bargain for wages because these arefixed in the budget but they do acquire a forum where,among other things, professional and self-development is (sic) promoted and encouraged. Theyalso act as watchdogs of their own bosses so thatwhen graft and corruption is committed, generally, it isthe unions who are no longer afraid by virtue of thearmor of self-organization that become the public'sown allies for detecting graft and corruption and forexposing it....”There is, therefore, no impediment to the holding of acertification election among the workers of NHC for itis clear that they are covered by the Labor Code, theNHC being a government-owned and/or controlledcorporation without an original charter. Statutoryimplementation of the last cited section of theConstitution is found in Article 244 of the Labor Code,as amended by Executive Order No. 111, thus: “...Right of employees in the public service. Employeesof the government corporations established under theCorporation Code shall have the right to organize andto bargain collectively with their respective employers.All other employees in the civil service shall have theright to form associations for purposes not contrary tolaw.For employees in corporations and entities coveredby the Labor Code, the determination of the exclusivebargaining representative is particularly governed byArticles 255 to 259 of said Code. Article 256 providesfor the procedure when there is a representation issuein organized establishments, while Article 257 coversunorganized establishments. These Labor Codeprovisions are fleshed out by Rules V to VII, Book Vof the Omnibus Implementing Rules.With respect to other civil servants, that is, employeesof all branches, subdivisions, instrumentalities andagencies of the government including government-owned or controlled corporations with original chartersand who are, therefore, covered by the civil servicelaws, the guidelines for the exercise of their right toorganize is provided for under Executive Order No.180. Chapter IV thereof, consisting of Sections 9 to12, regulates the determination of the "sole andexclusive employees representative"; Under Section12, "where there are two or more duly registeredemployees' organizations in the appropriateorganization unit, the Bureau of Labor Relations shall,upon petition order the conduct of certification electionand shall certify the winner as the exclusiverepresentative of the rank-and-file employees in saidorganizational unit."

Parenthetically, note should be taken of the specificqualification in the Constitution that the State "shallguarantee the rights of all workers to self-organization, collective bargaining, and peacefulconcerted activities, including the right to strike inaccordance with law" and that they shall alsoparticipate in policy and decision-making processesaffecting their rights and benefits as may be providedby law."

LUZON DEVELOPMENT BANK, petitioner, vs.ASSOCIATION OF LUZON DEVELOPMENT BANK

EMPLOYEES and ATTY. ESTER S. GARCIA in hercapacity as VOLUNTARY ARBITRATOR,respondents

G.R. No. 120319October 6, 1995

Facts:

From a submission agreement of the LuzonDevelopment Bank (LDB) and the Association ofLuzon Development Bank Employees (ALDBE) arosean arbitration case to resolve the following issue:whether or not the company has violated theCollective Bargaining Agreement provision and theMemorandum of Agreement dated April 1994, onpromotion.

At a conference, the parties agreed on the submissionof their respective Position Papers on December 1-15, 1994. Atty. Ester S. Garcia, in her capacity asVoluntary Arbitrator, received ALDBE's Position Paperon January 18, 1995. LDB, on the other hand, failedto submit its Position Paper despite a letter from theVoluntary Arbitrator reminding them to do so. As ofMay 23, 1995 no Position Paper had been filed byLDB. On May 24, 1995, without LDB's Position Paper,the Voluntary Arbitrator rendered a decision disposingas follows:

WHEREFORE, finding is hereby made that the Bankhas not adhered to the Collective BargainingAgreement provision nor the Memorandum ofAgreement on promotion. Hence, this petition forcertiorari and prohibition seeking to set aside thedecision of the Voluntary Arbitrator and to prohibit herfrom enforcing the same.

Issue:

Which court has the jurisdiction for the appellatereview of adjudications of all quasi-judicial entities

Held:

Section 9 of B.P. Blg. 129, as amended by RepublicAct No. 7902, provides that the Court of Appeals shallexercise:

(B) Exclusive appellate jurisdiction over all finaljudgments, decisions, resolutions, orders or awards ofRegional Trial Courts and quasi-judicial agencies,instrumentalities, boards or commissions, includingthe Securities and Exchange Commission, theEmployees Compensation Commission and the CivilService Commission, except those falling within theappellate jurisdiction of the Supreme Court inaccordance with the Constitution, the Labor Code ofthe Philippines under Presidential Decree No. 442, asamended, the provisions of this Act, and ofsubparagraph (1) of the third paragraph andsubparagraph (4) of the fourth paragraph of Section17 of the Judiciary Act of 1948.

The voluntary arbitrator no less performs a statefunction pursuant to a governmental power delegatedto him under the provisions therefor in the Labor Codeand he falls, therefore, within the contemplation of theterm "instrumentality" in the aforequoted Sec. 9 ofB.P. 129. The fact that his functions and powers areprovided for in the Labor Code does not place himwithin the exceptions to said Sec. 9 since he is aquasi-judicial instrumentality as contemplated thereinA fortiori, the decision or award of the voluntaryarbitrator or panel of arbitrators should likewise beappealable to the Court of Appeals, in line with theprocedure outlined in Revised Administrative CircularNo. 1-95, just like those of the quasi-judicial agencies,boards and commissions enumerated therein.

This would be in furtherance of, and consistent with,the original purpose of Circular No. 1-91 to provide auniform procedure for the appellate review ofadjudications of all quasi-judicial entities not expressly

excepted from the coverage of Sec. 9 of B.P. 129 byeither the Constitution or another statute. In the samevein, it is worth mentioning that under Section 22 ofRepublic Act No. 876, also known as the ArbitrationLaw, arbitration is deemed a special proceeding ofwhich the court specified in the contract orsubmission, or if none be specified, the Regional TrialCourt for the province or city in which one of theparties resides or is doing business, or in which thearbitration is held, shall have jurisdiction. A party tothe controversy may, at any time within one (1) monthafter an award is made, apply to the court havingjurisdiction for an order confirming the award and thecourt must grant such order unless the award isvacated, modified or corrected.

In effect, this equates the award or decision of thevoluntary arbitrator with that of the regional trial court.Consequently, in a petition for certiorari from thataward or decision, ACCORDINGLY, the Courtresolved to REFER this case to the Court of Appeals.

SO ORDERED.

Republic vs Court of AppealsG..R. No. 87676December 20, 1989

Facts:

The Regional Trial Court of Manila, Branch III,dismissed for lack of jurisdiction, the petitioner'scomplaint in Civil Case No. 88- 44048 praying for adeclaration of illegality of the strike of the privaterespondents and to restrain the same. The Court ofAppeals denied the petitioner's petition for certiorari,hence, this petition for review.

Although the NPDC was originally created in 1963under Executive Order No. 30, as the ExecutiveCommittee for the development of the QuezonMemorial, Luneta and other national parks, and laterrenamed as the National Parks DevelopmentCommittee under Executive Order No. 68, onSeptember 21, 1967, it was registered in theSecurities and Exchange Commission (SEC) as anon-stock and non-profit corporation, known as "TheNational Parks Development Committee, Inc."

However, in August, 1987, the NPDC was ordered bythe SEC to show cause why its Certificate ofRegistration should not be suspended for: (a) failureto submit the General Information Sheet from 1981 to1987; (b) failure to submit its Financial Statementsfrom 1981 to 1986; (c) failure to register its CorporateBooks; and (d) failure to operate for a continuousperiod of at least five (5) years since September 27,1967.

Issue:

W/N the petitioner, National Parks DevelopmentCommittee (NPDC), is a government agency, or aprivate corporation, for on this issue depends the rightof its employees to strike.

Held:

Since NPDC is a government agency, its employeesare covered by civil service rules and regulations(Sec. 2, Article IX, 1987 Constitution). Its employeesare civil service employees (Sec. 14, Executive OrderNo. 180).

While NPDC employees are allowed under the 1987Constitution to organize and join unions of theirchoice, there is as yet no law permitting them tostrike. In case of a labor dispute between theemployees and the government, Section 15 ofExecutive Order No. 180 dated June 1, 1987 providesthat the Public Sector Labor- Management Council,not the Department of Labor and Employment, shallhear the dispute. Clearly, the Court of Appeals and

the lower court erred in holding that the labor disputebetween the NPDC and the members of the NPDSAis cognizable by the Department of Labor andEmployment.

WHEREFORE, the petition for review is granted. Thedecision of the Court of Appeals in CA-G.R. SP No.14204 is hereby set aside. The private respondents'complaint should be filed in the Public Sector Labor-Management Council as provided in Section 15 ofExecutive Order No. 180. Costs against the privaterespondents.

SOCIAL SECURITY SYSTEM EMPLOYEESASSOCIATION (SSSEA), DIONISION T. BAYLON,RAMON MODESTO, JUANITO MADURA, REUBENZAMORA, VIRGILIO DE ALDAY, SERGIOARANETA, PLACIDO AGUSTIN, VIRGILIOMAGPAYO, petitioner, vs. THE COURT OFAPPEALS, SOCIAL SECURITY SYSTEM (SSS),HON. CEZAR C. PERALEJO, RTC, BRANCH 98,QUEZON CITY, respondents.

G.R. No. 85279July 28, 1989

Facts:

On June 11, 1987, the SSS filed with the RegionalTrial Court of Quezon City a complaint for damageswith a prayer for a writ of preliminary injunctionagainst petitioners, alleging that on June 9, 1987, theofficers and members of SSSEA staged an illegalstrike and baricaded the entrances to the SSSBuilding, preventing non-striking employees fromreporting for work and SSS members from transactingbusiness with the SSS; that the strike was reported tothe Public Sector Labor - Management Council, whichordered the strikers to return to work; that the strikersrefused to return to work; and that the SSS suffereddamages as a result of the strike. The complaintprayed that a writ of preliminary injunction be issuedto enjoin the strike and that the strikers be ordered toreturn to work; that the defendants (petitioners herein)be ordered to pay damages; and that the strike bedeclared illegal.

It appears that the SSSEA went on strike after theSSS failed to act on the union's demands, whichincluded: implementation of the provisions of the oldSSS-SSSEA collective bargaining agreement (CBA)on check-off of union dues; payment of accruedovertime pay, night differential pay and holiday pay;conversion of temporary or contractual employeeswith six (6) months or more of service into regular andpermanent employees and their entitlement to thesame salaries, allowances and benefits given to otherregular employees of the SSS; and payment of thechildren's allowance of P30.00, and after the SSSdeducted certain amounts from the salaries of theemployees and allegedly committed acts ofdiscrimination and unfair labor practices.

Issue:

Whether or not employees of the Social SecuritySystem (SSS) have the right to strike.

Held:

The 1987 Constitution, in the Article on Social Justiceand Human Rights, provides that the State "shallguarantee the rights of all workers to self-organization, collective bargaining and negotiations,and peaceful concerted activities, including the rightto strike in accordance with law" [Art. XIII, Sec. 31].Resort to the intent of the framers of the organic lawbecomes helpful in understanding the meaning ofthese provisions. A reading of the proceedings of theConstitutional Commission that drafted the 1987Constitution would show that in recognizing the rightof government employees to organize, thecommissioners intended to limit the right to theformation of unions or associations only, without

including the right to strike.

Considering that under the 1987 Constitution "the civilservice embraces all branches, subdivisions,instrumentalities, and agencies of the Government,including government-owned or controlledcorporations with original charters" [Art. IX(B), Sec..2(l) see also Sec. 1 of E.O. No. 180 where theemployees in the civil service are denominated as"government employees"] and that the SSS is onesuch government-controlled corporation with anoriginal charter, having been created under R.A. No.1161, its employees are part of the civil service[NASECO v. NLRC, G.R. Nos. 69870 & 70295,November 24,1988] and are covered by the CivilService Commission's memorandum prohibitingstrikes. This being the case, the strike staged by theemployees of the SSS was illegal.