LABOR LAW II – PART 1

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

ART. III, Sec. 8:

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

ART. IX-B, Sec. 12 (?):

Section 2.
1. The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including
government-owned or controlled corporations with original charters.
2. Appointments in the civil service shall be made only according to merit and fitness to be determined, as far as
practicable, and, except to positions which are policy-determining, primarily confidential, or highly technical, by
competitive examination.
3. No officer or employee of the civil service shall be removed or suspended except for cause provided by law.
4. No officer or employee in the civil service shall engage, directly or indirectly, in any electioneering or partisan political
campaign.
5. The right to self-organization shall not be denied to government employees.
6. Temporary employees of the Government shall be given such protection as may be provided by law.

ART. XIII, Sec. 3 & 14:

Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment
and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities,
including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living
wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary
modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of
production and the right of enterprises to reasonable returns to investments, and to expansion and growth.
Section 14. The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal
functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service
of the nation.

LABOR CODE (RENUMBERED) ARTS. 3, 218-231, 290

Article 3. Declaration of basic policy. The State shall afford protection to labor, promote full employment, ensure equal work opportunities
regardless of sex, race or creed and regulate the relations between workers and employers. The State shall assure the rights of workers
to self-organization, collective bargaining, security of tenure, and just and humane conditions of work.

Article 218. Powers of the Commission. The Commission shall have the power and authority:
To promulgate rules and regulations governing the hearing and disposition of cases before it and its regional branches, as well as those
pertaining to its internal functions and such rules and regulations as may be necessary to carry out the purposes of this Code; (As
amended by Section 10, Republic Act No. 6715, March 21, 1989)
To administer oaths, summon the parties to a controversy, issue subpoenas requiring the attendance and testimony of witnesses or the
production of such books, papers, contracts, records, statement of accounts, agreements, and others as may be material to a just
determination of the matter under investigation, and to testify in any investigation or hearing conducted in pursuance of this Code;
To conduct investigation for the determination of a question, matter or controversy within its jurisdiction, proceed to hear and determine
the disputes in the absence of any party thereto who has been summoned or served with notice to appear, conduct its proceedings or
any part thereof in public or in private, adjourn its hearings to any time and place, refer technical matters or accounts to an expert and to
accept his report as evidence after hearing of the parties upon due notice, direct parties to be joined in or excluded from the
proceedings, correct, amend, or waive any error, defect or irregularity whether in substance or in form, give all such directions as it may
deem necessary or expedient in the determination of the dispute before it, and dismiss any matter or refrain from further hearing or from
determining the dispute or part thereof, where it is trivial or where further proceedings by the Commission are not necessary or desirable;
and
To hold any person in contempt directly or indirectly and impose appropriate penalties therefor in accordance with law.
A person guilty of misbehavior in the presence of or so near the Chairman or any member of the Commission or any Labor Arbiter as to
obstruct or interrupt the proceedings before the same, including disrespect toward said officials, offensive personalities toward others, or
refusal to be sworn, or to answer as a witness or to subscribe an affidavit or deposition when lawfully required to do so, may be
summarily adjudged in direct contempt by said officials and punished by fine not exceeding five hundred pesos (P500) or imprisonment
not exceeding five (5) days, or both, if it be the Commission, or a member thereof, or by a fine not exceeding one hundred pesos (P100)
or imprisonment not exceeding one (1) day, or both, if it be a Labor Arbiter.
The person adjudged in direct contempt by a Labor Arbiter may appeal to the Commission and the execution of the judgment shall be
suspended pending the resolution of the appeal upon the filing by such person of a bond on condition that he will abide by and perform
the judgment of the Commission should the appeal be decided against him. Judgment of the Commission on direct contempt is
immediately executory and unappealable. Indirect contempt shall be dealt with by the Commission or Labor Arbiter in the manner
prescribed under Rule 71 of the Revised Rules of Court; and (As amended by Section 10, Republic Act No. 6715, March 21, 1989)
To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require the performance of a
particular act in any labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable damage to any party or
render ineffectual any decision in favor of such party: Provided, That no temporary or permanent injunction in any case involving or
growing out of a labor dispute as defined in this Code shall be issued except after hearing the testimony of witnesses, with opportunity
for cross-examination, in support of the allegations of a complaint made under oath, and testimony in opposition thereto, if offered, and
only after a finding of fact by the Commission, to the effect:
That prohibited or unlawful acts have been threatened and will be committed and will be continued unless restrained, but no injunction or
temporary restraining order shall be issued on account of any threat, prohibited or unlawful act, except against the person or persons,
association or organization making the threat or committing the prohibited or unlawful act or actually authorizing or ratifying the same
after actual knowledge thereof;
That substantial and irreparable injury to complainant’s property will follow;
That as to each item of relief to be granted, greater injury will be inflicted upon complainant by the denial of relief than will be inflicted
upon defendants by the granting of relief;
That complainant has no adequate remedy at law; and
That the public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection.
Such hearing shall be held after due and personal notice thereof has been served, in such manner as the Commission shall direct, to all
known persons against whom relief is sought, and also to the Chief Executive and other public officials of the province or city within
which the unlawful acts have been threatened or committed, charged with the duty to protect complainant’s property: Provided, however,
that if a complainant shall also allege that, unless a temporary restraining order shall be issued without notice, a substantial and
irreparable injury to complainant’s property will be unavoidable, such a temporary restraining order may be issued upon testimony under
oath, sufficient, if sustained, to justify the Commission in issuing a temporary injunction upon hearing after notice. Such a temporary
restraining order shall be effective for no longer than twenty (20) days and shall become void at the expiration of said twenty (20) days.
No such temporary restraining order or temporary injunction shall be issued except on condition that complainant shall first file an
undertaking with adequate security in an amount to be fixed by the Commission sufficient to recompense those enjoined for any loss,
expense or damage caused by the improvident or erroneous issuance of such order or injunction, including all reasonable costs,
together with a reasonable attorney’s fee, and expense of defense against the order or against the granting of any injunctive relief sought
in the same proceeding and subsequently denied by the Commission.
The undertaking herein mentioned shall be understood to constitute an agreement entered into by the complainant and the surety upon
which an order may be rendered in the same suit or proceeding against said complainant and surety, upon a hearing to assess
damages, of which hearing, complainant and surety shall have reasonable notice, the said complainant and surety submitting
themselves to the jurisdiction of the Commission for that purpose. But nothing herein contained shall deprive any party having a claim or
cause of action under or upon such undertaking from electing to pursue his ordinary remedy by suit at law or in equity: Provided, further,
That the reception of evidence for the application of a writ of injunction may be delegated by the Commission to any of its Labor Arbiters
who shall conduct such hearings in such places as he may determine to be accessible to the parties and their witnesses and shall
submit thereafter his recommendation to the Commission. (As amended by Section 10, Republic Act No. 6715, March 21, 1989)
Article 219. Ocular inspection. The Chairman, any Commissioner, Labor Arbiter or their duly authorized representatives, may, at any
time during working hours, conduct an ocular inspection on any establishment, building, ship or vessel, place or premises, including any
work, material, implement, machinery, appliance or any object therein, and ask any employee, laborer, or any person, as the case may
be, for any information or data concerning any matter or question relative to the object of the investigation.
Article 220. Compulsory arbitration. The Commission or any Labor Arbiter shall have the power to ask the assistance of other
government officials and qualified private citizens to act as compulsory arbitrators on cases referred to them and to fix and assess the
fees of such compulsory arbitrators, taking into account the nature of the case, the time consumed in hearing the case, the professional
standing of the arbitrators, the financial capacity of the parties, and the fees provided in the Rules of Court.] (Repealed by Section 16,
Batas Pambansa Bilang 130, August 21, 1981)
Article 221. Technical rules not binding and prior resort to amicable settlement. In any proceeding before the Commission or any of the
Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this
Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in
each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process. In any
proceeding before the Commission or any Labor Arbiter, the parties may be represented by legal counsel but it shall be the duty of the
Chairman, any Presiding Commissioner or Commissioner or any Labor Arbiter to exercise complete control of the proceedings at all
stages.
Any provision of law to the contrary notwithstanding, the Labor Arbiter shall exert all efforts towards the amicable settlement of a labor
dispute within his jurisdiction on or before the first hearing. The same rule shall apply to the Commission in the exercise of its original
jurisdiction. (As amended by Section 11, Republic Act No. 6715, March 21, 1989)
Article 222. Appearances and Fees.
Non-lawyers may appear before the Commission or any Labor Arbiter only:
If they represent themselves; or
If they represent their organization or members thereof.
No attorney’s fees, negotiation fees or similar charges of any kind arising from any collective bargaining agreement shall be imposed on
any individual member of the contracting union: Provided, However, that attorney’s fees may be charged against union funds in an
amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and void. (As
amended by Presidential Decree No. 1691, May 1, 1980)
Chapter III
APPEAL
Article 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any
or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on
any of the following grounds:
If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
If the decision, order or award was secured through fraud or coercion, including graft and corruption;
If made purely on questions of law; and
If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant.
In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award
in the judgment appealed from.
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is
concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same
terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The
posting of a bond by the employer shall not stay the execution for reinstatement provided herein.
To discourage frivolous or dilatory appeals, the Commission or the Labor Arbiter shall impose reasonable penalty, including fines or
censures, upon the erring parties.
In all cases, the appellant shall furnish a copy of the memorandum of appeal to the other party who shall file an answer not later than ten
(10) calendar days from receipt thereof.
The Commission shall decide all cases within twenty (20) calendar days from receipt of the answer of the appellee. The decision of the
Commission shall be final and executory after ten (10) calendar days from receipt thereof by the parties.
Any law enforcement agency may be deputized by the Secretary of Labor and Employment or the Commission in the enforcement of
decisions, awards or orders. (As amended by Section 12, Republic Act No. 6715, March 21, 1989)
Article 224. Execution of decisions, orders or awards.
The Secretary of Labor and Employment or any Regional Director, the Commission or any Labor Arbiter, or Med-Arbiter or Voluntary
Arbitrator may, motu proprio or on motion of any interested party, issue a writ of execution on a judgment within five (5) years from the
date it becomes final and executory, requiring a sheriff or a duly deputized officer to execute or enforce final decisions, orders or awards
of the Secretary of Labor and Employment or regional director, the Commission, the Labor Arbiter or med-arbiter, or voluntary
arbitrators. In any case, it shall be the duty of the responsible officer to separately furnish immediately the counsels of record and the
parties with copies of said decisions, orders or awards. Failure to comply with the duty prescribed herein shall subject such responsible
officer to appropriate administrative sanctions.
The Secretary of Labor and Employment, and the Chairman of the Commission may designate special sheriffs and take any measure
under existing laws to ensure compliance with their decisions, orders or awards and those of the Labor Arbiters and voluntary arbitrators,
including the imposition of administrative fines which shall not be less than P500.00 nor more than P10,000.00. (As amended by Section
13, Republic Act No. 6715, March 21, 1989)
Article 225. Contempt powers of the Secretary of Labor. In the exercise of his powers under this Code, the Secretary of Labor may hold
any person in direct or indirect contempt and impose the appropriate penalties therefor.
Title III
BUREAU OF LABOR RELATIONS
Article 226. Bureau of Labor Relations. The Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of the
Department of Labor, shall have original and exclusive authority to act, at their own initiative or upon request of either or both parties, on
all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labor-management relations in
all workplaces, whether agricultural or non-agricultural, except those arising from the implementation or interpretation of collective
bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration.
The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to extension by agreement of the parties. (As
amended by Section 14, Republic Act No. 6715, March 21, 1989).
Article 227. Compromise agreements. Any compromise settlement, including those involving labor standard laws, voluntarily agreed
upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon
the parties. The National Labor Relations Commission or any court, shall not assume jurisdiction over issues involved therein except in
case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or
coercion.
Article 228. Indorsement of cases to Labor Arbiters.
Except as provided in paragraph (b) of this Article, the Labor Arbiter shall entertain only cases endorsed to him for compulsory arbitration
by the Bureau or by the Regional Director with a written notice of such indorsement or non-indorsement. The indorsement or non-
indorsement of the Regional Director may be appealed to the Bureau within ten (10) working days from receipt of the notice.
The parties may, at any time, by mutual agreement, withdraw a case from the Conciliation Section and jointly submit it to a Labor Arbiter,
except deadlocks in collective bargaining.] (Repealed by Section 16, Batas Pambansa Bilang 130, August 21, 1981)
Article 229. Issuance of subpoenas. The Bureau shall have the power to require the appearance of any person or the production of any
paper, document or matter relevant to a labor dispute under its jurisdiction, either at the request of any interested party or at its own
initiative.
Article 230. Appointment of bureau personnel. The Secretary of Labor and Employment may appoint, in addition to the present
personnel of the Bureau and the Industrial Relations Divisions, such number of examiners and other assistants as may be necessary to
carry out the purpose of the Code. (As amended by Section 15, Republic Act No. 6715, March 21, 1989)
Article 231. Registry of unions and file of collective bargaining agreements. The Bureau shall keep a registry of legitimate labor
organizations. The Bureau shall also maintain a file of all collective bargaining agreements and other related agreements and records of
settlement of labor disputes and copies of orders and decisions of voluntary arbitrators. The file shall be open and accessible to
interested parties under conditions prescribed by the Secretary of Labor and Employment, provided that no specific information
submitted in confidence shall be disclosed unless authorized by the Secretary, or when it is at issue in any judicial litigation, or when
public interest or national security so requires.
Within thirty (30) days from the execution of a Collective Bargaining Agreement, the parties shall submit copies of the same directly to
the Bureau or the Regional Offices of the Department of Labor and Employment for registration, accompanied with verified proofs of its
posting in two conspicuous places in the place of work and ratification by the majority of all the workers in the bargaining unit. The
Bureau or Regional Offices shall act upon the application for registration of such Collective Bargaining Agreement within five (5) calendar
days from receipt thereof. The Regional Offices shall furnish the Bureau with a copy of the Collective Bargaining Agreement within five
(5) days from its submission.
The Bureau or Regional Office shall assess the employer for every Collective Bargaining Agreement a registration fee of not less than
one thousand pesos (P1,000.00) or in any other amount as may be deemed appropriate and necessary by the Secretary of Labor and
Employment for the effective and efficient administration of the Voluntary Arbitration Program. Any amount collected under this provision
shall accrue to the Special Voluntary Arbitration Fund.
The Bureau shall also maintain a file and shall undertake or assist in the publication of all final decisions, orders and awards of the
Secretary of Labor and Employment, Regional Directors and the Commission. (As amended by Section 15, Republic Act No. 6715,
March 21, 1989)

Article 290. Offenses. Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall prescribe in three
(3) years.
All unfair labor practice arising from Book V shall be filed with the appropriate agency within one (1) year from accrual of such unfair
labor practice; otherwise, they shall be forever barred.

2011 NLRC RULES OF PROCEDURE ***

1. FEATI v. BAUTISTA; Dec 27, 1966
G.R. No. L-21278      December 27, 1966 President of the Philippines certified to the Court of Industrial
Relations the dispute between the management of the University
FEATI UNIVERSITY, petitioner,
and the Faculty Club pursuant to the provisions of Section 10 of
vs.
Republic Act No. 875.
HON. JOSE S. BAUTISTA, Presiding Judge of the Court of
Industrial Relations and FEATI UNIVERSITY FACULTY CLUB- In connection with the dispute between the University and the
PAFLU, respondents. Faculty Club and certain incidents related to said dispute, various
cases were filed with the Court of Industrial Relations —
----------------------------------------
hereinafter referred to as CIR. The three cases now before this
G.R. No. L-21462      December 27, 1966 Court stemmed from those cases that were filed with the CIR.

FEATI UNIVERSITY, petitioner-appellant, CASE NO. G.R. NO. L-21278

vs.
On May 10, 1963, the University filed before this Court a "petition
FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondent-
for certiorari and prohibition with writ of preliminary injunction",
appellee.
docketed as G.R. No. L-21278, praying: (1) for the issuance of
---------------------------------------- the writ of preliminary injunction enjoining respondent Judge Jose
S. Bautista of the CIR to desist from proceeding in CIR Cases
G.R. No. L-21500      December 27, 1966 Nos. 41-IPA, 1183-MC, and V-30; (2) that the proceedings in
FEATI UNIVERSITY, petitioner-appellant, Cases Nos. 41-IPA and 1183-MC be annulled; (3) that the orders
vs. dated March 30, 1963 and April 6, 1963 in Case No. 41-IPA, the
FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondent- order dated April 6, 1963 in Case No. 1183-MC, and the order
appellee. dated April 29, 1963 in Case No. V-30, all be annulled; and (4)
that the respondent Judge be ordered to dismiss said cases Nos.
Rafael Dinglasan for petitioner. 41-IPA, 1183-MC and V-30 of the CIR.
Cipriano Cid and Associates for respondents.
On May 10, 1963, this Court issued a writ of preliminary
ZALDIVAR, J.: injunction, upon the University's filing a bond of P1,000.00,
ordering respondent Judge Jose S. Bautista as Presiding Judge
This Court, by resolution, ordered that these three cases be
of the CIR, until further order from this Court, "to desist and refrain
considered together, and the parties were allowed to file only one
from further proceeding in the premises (Cases Nos. 41-IPA,
brief for the three cases.
1183-MC and V-30 of the Court of Industrial Relations)." 1 On
On January 14, 1963, the President of the respondent Feati December 4, 1963, this Court ordered the injunction bond
University Faculty Club-PAFLU — hereinafter referred to as increased to P100,000.00; but on January 23, 1964, upon a
Faculty Club — wrote a letter to Mrs. Victoria L. Araneta, motion for reconsideration by the University, this Court reduced
President of petitioner Feati University — hereinafter referred to the bond to P50,000.00.
as University — informing her of the organization of the Faculty
A brief statement of the three cases — CIR Cases 41-IPA, 1183-
Club into a registered labor union. The Faculty Club is composed
MC and V-30 — involved in the Case G.R. No. L-21278, is here
of members who are professors and/or instructors of the
necessary.
University. On January 22, 1963, the President of the Faculty
Club sent another letter containing twenty-six demands that have CIR Case No. 41-IPA, relates to the case in connection with the
connection with the employment of the members of the Faculty strike staged by the members of the Faculty Club. As we have
Club by the University, and requesting an answer within ten days stated, the dispute between the University and the Faculty Club
from receipt thereof. The President of the University answered the was certified on March 21, 1963 by the President of the
two letters, requesting that she be given at least thirty days to Philippines to the CIR. On the strength of the presidential
study thoroughly the different phases of the demands. Meanwhile certification, respondent Judge Bautista set the case for hearing
counsel for the University, to whom the demands were referred, on March 23, 1963. During the hearing, the Judge endeavored to
wrote a letter to the President of the Faculty Club demanding reconcile the part and it was agreed upon that the striking faculty
proof of its majority status and designation as a bargaining members would return to work and the University would readmit
representative. On February 1, 1963, the President of the Faculty them under a status quo  arrangement. On that very same day,
Club again wrote the President of the University rejecting the however, the University, thru counsel filed a motion to dismiss the
latter's request for extension of time, and on the same day he case upon the ground that the CIR has no jurisdiction over the
filed a notice of strike with the Bureau of Labor alleging as reason case, because (1) the Industrial Peace Act is not applicable to the
therefor the refusal of the University to bargain collectively. The University, it being an educational institution, nor to the members
parties were called to conferences at the Conciliation Division of of the Faculty Club, they being independent contractors; and (2)
the Bureau of Labor but efforts to conciliate them failed. On the presidential certification is violative of Section 10 of the
February 18, 1963, the members of the Faculty Club declared a Industrial Peace Act, as the University is not an industrial
strike and established picket lines in the premises of the establishment and there was no industrial dispute which could be
University, resulting in the disruption of classes in the University. certified to the CIR. On March 30, 1963 the respondent Judge
Despite further efforts of the officials from the Department of issued an order denying the motion to dismiss and declaring that
Labor to effect a settlement of the differences between the the Industrial Peace Act is applicable to both parties in the case
management of the University and the striking faculty members and that the CIR had acquired jurisdiction over the case by virtue
no satisfactory agreement was arrived at. On March 21, 1963, the of the presidential certification. In the same order, the respondent
Judge, believing that the dispute could not be decided promptly, Faculty Club nor to the University. This case was assigned to
ordered the strikers to return immediately to work and the Judge Baltazar Villanueva of the CIR. Before Judge Villanueva
University to take them back under the last terms and conditions could act on the motion to dismiss, however, the Faculty Club
existing before the dispute arose, as per agreement had during filed on April 3, 1963 a motion to withdraw the petition on the
the hearing on March 23, 1963; and likewise enjoined the ground that the labor dispute (Case No. 41-IPA) had already been
University, pending adjudication of the case, from dismissing any certified by the President to the CIR and the issues raised in Case
employee or laborer without previous authorization from the CIR. No. 1183-MC were absorbed by Case No. 41-IPA. The University
The University filed on April 1, 1963 a motion for reconsideration opposed the withdrawal, alleging that the issues raised in Case
of the order of March 30, 1963 by the CIR en banc, and at the No. 1183-MC were separate and distinct from the issues raised in
same time asking that the motion for reconsideration be first Case No. 41-IPA; that the questions of recognition and majority
heard by the CIR en banc. Without the motion for reconsideration status in Case No. 1183-MC were not absorbed by Case No. 41-
having been acted upon by the CIR en banc, respondent Judge IPA; and that the CIR could not exercise its power of compulsory
set the case for hearing on the merits for May 8, 1963. The arbitration unless the legal issue regarding the existence of
University moved for the cancellation of said hearing upon the employer-employee relationship was first resolved. The University
ground that the court en banc should first hear the motion for prayed that the motion of the Faculty Club to withdraw the petition
reconsideration and resolve the issues raised therein before the for certification election be denied, and that its motion to dismiss
case is heard on the merits. This motion for cancellation of the the petition be heard. Judge Baltazar Villanueva, finding that the
hearing was denied. The respondent Judge, however, cancelled reasons stated by the Faculty Club in the motion to withdraw were
the scheduled hearing when counsel for the University manifested well taken, on April 6, 1963, issued an order granting the
that he would take up before the Supreme Court, by a petition withdrawal. The University filed, on April 24, 1963, a motion for
for certiorari, the matter regarding the actuations of the reconsideration of that order of April 6, 1963 by the CIR en banc.
respondent Judge and the issues raised in the motion for This order of April 6, 1963 in Case No. 1183-MC is one of the
reconsideration, specially the issue relating to the jurisdiction of orders sought to be annulled in the case, G.R. No. L-21278, now
the CIR. The order of March 30, 1963 in Case 41-IPA is one of before Us.
the orders sought to be annulled in the case, G.R. No. L-21278.
CIR Case No. V-30  relates to a complaint for indirect contempt of
Before the above-mentioned order of March 30, 1963 was issued court filed against the administrative officials of the University.
by respondent Judge, the University had employed professors The Faculty Club, through the Acting Chief Prosecutor of the CIR,
and/or instructors to take the places of those professors and/or filed with the CIR a complaint docketed as Case No. V-30,
instructors who had struck. On April 1, 1963, the Faculty Club charging President Victoria L. Araneta, Dean Daniel Salcedo,
filed with the CIR in Case 41-IPA a petition to declare in contempt Executive Vice-President Rodolfo Maslog, and Assistant to the
of court certain parties, alleging that the University refused to President Jose Segovia, as officials of the University, with indirect
accept back to work the returning strikers, in violation of the contempt of court, reiterating the same charges filed in Case No.
return-to-work order of March 30, 1963. The University filed, on 41-IPA for alleged violation of the order dated March 30, 1963.
April 5,1963, its opposition to the petition for contempt, denying Based on the complaint thus filed by the Acting Chief Prosecutor
the allegations of the Faculty Club and alleging by way of special of the CIR, respondent Judge Bautista issued on April 29, 1963
defense that there was still the motion for reconsideration of the an order commanding any officer of the law to arrest the above
order of March 30, 1963 which had not yet been acted upon by named officials of the University so that they may be dealt with in
the CIR en banc. On April 6, 1963, the respondent Judge issued accordance with law, and the same time fixed the bond for their
an order stating that "said replacements are hereby warned and release at P500.00 each. This order of April 29, 1963 is also one
cautioned, for the time being, not to disturb nor in any manner of the orders sought to be annulled in the case, G.R. No. L-2l278.
commit any act tending to disrupt the effectivity of the order of
The principal allegation of the University in its petition
March 30,1963, pending the final resolution of the same."2 On
for certiorari and prohibition with preliminary injunction in Case
April 8, 1963, there placing professors and/or instructors
G.R. No. L-21278, now before Us, is that respondent Judge Jose
concerned filed, thru counsel, a motion for reconsideration by the
S. Bautista acted without, or in excess of, jurisdiction, or with
CIR en banc of the order of respondent Judge of April 6, 1963.
grave abuse of discretion, in taking cognizance of, and in issuing
This order of April 6, 1963 is one of the orders that are sought to
the questioned orders in, CIR Cases Nos. 41-IPA 1183-MC and
be annulled in case G.R. No. L-21278.
V-30. Let it be noted that when the petition for certiorari and
CIR Case No. 1183-MC  relates to a petition for certification prohibition with preliminary injunction was filed on May 10, 1963
election filed by the Faculty Club on March 8, 1963 before the in this case, the questioned order in CIR Cases Nos. 41-IPA,
CIR, praying that it be certified as the sole and exclusive 1183-MC and V-30 were still pending action by the CIR en
bargaining representative of all the employees of the University. banc upon motions for reconsideration filed by the University.
The University filed an opposition to the petition for certification
On June 10, 1963, the Faculty Club filed its answer to the petition
election and at the same time a motion to dismiss said petition,
for certiorari and prohibition with preliminary injunction, admitting
raising the very same issues raised in Case No. 41-IPA, claiming
some allegations contained in the petition and denying others,
that the petition did not comply with the rules promulgated by the
and alleging special defenses which boil down to the contentions
CIR; that the Faculty Club is not a legitimate labor union; that the
that (1) the CIR had acquired jurisdiction to take cognizance of
members of the Faculty Club cannot unionize for collective
Case No. 41-IPA by virtue of the presidential certification, so that
bargaining purposes; that the terms of the individual contracts of
it had jurisdiction to issue the questioned orders in said Case No.
the professors, instructors, and teachers, who are members of the
41-IPA; (2) that the Industrial Peace Act (Republic Act 875) is
Faculty Club, would expire on March 25 or 31, 1963; and that the
applicable to the University as an employer and to the members
CIR has no jurisdiction to take cognizance of the petition because
of the Faculty Club as employees who are affiliated with a duly
the Industrial Peace Act is not applicable to the members of the
registered labor union, so that the Court of Industrial Relations
had jurisdiction to take cognizance of Cases Nos. 1183-MC and The Faculty Club filed its answer, admitting some, and denying
V-30 and to issue the questioned orders in those two cases; and other, allegations in the petition for certiorari; and specially
(3) that the petition for certiorari and prohibition with preliminary alleging that the lower court's order granting the withdrawal of the
injunction was prematurely filed because the orders of the CIR petition for certification election was in accordance with law, and
sought to be annulled were still the subjects of pending motions that the resolution of the court en banc on June 5, 1963 was not a
for reconsideration before the CIR en banc when said petition violation of the writ of preliminary injunction issued in Case G.R.
for certiorari and prohibition with preliminary injunction was filed No. L-21278 because said writ of injunction was issued against
before this Court. Judge Jose S. Bautista and not against the Court of Industrial
Relations, much less against Judge Baltazar Villanueva who was
CASE G.R. NO. L-21462
the trial judge of Case No. 1183-MC.
This case, G.R. No. L-21462, involves also CIR Case No. 1183-
CASE G.R. NO. L-21500
MC. As already stated Case No. 1183-MC relates to a petition for
certification election filed by the Faculty Club as a labor union, This case, G.R. No. L-21500, involves also CIR Case No. 41-IPA.
praying that it be certified as the sole and exclusive bargaining As earlier stated, Case No. 41-IPA relates to the strike staged by
representative of all employees of the University. This petition the members of the Faculty Club and the dispute was certified by
was opposed by the University, and at the same time it filed a the President of the Philippines to the CIR. The University filed a
motion to dismiss said petition. But before Judge Baltazar motion to dismiss that case upon the ground that the CIR has no
Villanueva could act on the petition for certification election and jurisdiction over the case, and on March 30, 1963 Judge Jose S.
the motion to dismiss the same, Faculty Club filed a motion to Bautista issued an order denying the motion to dismiss and
withdraw said petition upon the ground that the issue raised in declaring that the Industrial Peace Act is applicable to both
Case No. 1183-MC were absorbed by Case No. 41-IPA which parties in the case and that the CIR had acquired jurisdiction over
was certified by the President of the Philippines. Judge Baltazar the case by virtue of the presidential certification; and in that
Villanueva, by order April 6, 1963, granted the motion to same order Judge Bautista ordered the strikers to return to work
withdraw. The University filed a motion for reconsideration of that and the University to take them back under the last terms and
order of April 6, 1963 by the CIR en banc. That motion for conditions existing before the dispute arose; and enjoined the
reconsideration was pending action by the CIR en banc when the University from dismissing any employee or laborer without
petition for certiorari and prohibition with preliminary injunction in previous authority from the court. On April 1, 1963, the University
Case G.R. no. L-21278 was filed on May 10, 1963. As earlier filed a motion for reconsideration of the order of March 30, 1963
stated this Court, in Case G.R. No. L-21278, issued a writ of by the CIR en banc. That motion for reconsideration was pending
preliminary injunction on May 10, 1963, ordering respondent action by the CIR en banc when the petition for certiorari and
Judge Bautista, until further order from this Court, to desist and prohibition with preliminary injunction in Case G.R. No. L-21278
refrain from further proceeding in the premises (Cases Nos. 41- was filed on May 10, 1963. As we have already stated, this Court
IPA, 1183-MC and V-30 of the Court of Industrial Relations). in said case G.R. No. L-21278, issued a writ of preliminary
injunction on May 10, 1963 ordering respondent Judge Jose S.
On June 5, 1963, that is, after this Court has issued the writ of
Bautista, until further order from this Court, to desist and refrain
preliminary injunction in Case G.R. No. L-21278, the CIR en
from further proceeding in the premises (Cases Nos. 41-IPA,
banc issued a resolution denying the motion for reconsideration of
1183-MC and V-30 of the Court of Industrial Relations).
the order of April 6, 1963 in Case No. 1183-MC.
On July 2, 1963, the University received a copy of the resolution
On July 8, 1963, the University filed before this Court a petition
of the CIR en banc, dated May 7, 1963 but actually received and
for certiorari, by way of an appeal from the resolution of the
stamped at the Office of the Clerk of the CIR on June 28, 1963,
CIR en banc, dated June 5, 1963, denying the motion for
denying the motion for reconsideration of the order dated March
reconsideration of the order of April 6, 1963 in Case No. 1183-
30, 1963 in Case No. 41-IPA.
MC. This petition was docketed as G.R. No. L-21462. In its
petition for certiorari, the University alleges (1) that the resolution On July 23, 1963, the University filed before this Court a petition
of the Court of Industrial Relations of June 5, 1963 was null and for certiorari, by way of an appeal from the resolution of the Court
void because it was issued in violation of the writ of preliminary of Industrial Relations en banc dated May 7, 1963 (but actually
injunction issued in Case G.R. No. L-21278; (2) that the issues of received by said petitioner on July 2, 1963) denying the motion for
employer-employee relationship, the alleged status as a labor reconsideration of the order of March 30, 1963 in Case No. 41-
union, majority representation and designation as bargaining IPA. This petition was docketed as G.R. No. L-21500. In its
representative in an appropriate unit of the Faculty Club should petition for certiorari the University alleges (1) that the resolution
have been resolved first in Case No. 1183-MC prior to the of the CIR en banc, dated May 7, 1963 but filed with the Clerk of
determination of the issues in Case No. 41-IPA and therefore the the CIR on June 28, 1963, in Case No. 41-IPA, is null and void
motion to withdraw the petition for certification election should not because it was issued in violation of the writ of preliminary
have been granted upon the ground that the issues in the first injunction issued by this Court in G.R. No. L-21278; (2) that the
case have been absorbed in the second case; and (3) the lower CIR, through its Presiding Judge, had no jurisdiction to take
court acted without or in excess of jurisdiction in taking cognizance of Case No. 41-IPA and the order of March 30, 1963
cognizance of the petition for certification election and that the and the resolution dated May 7, 1963 issued therein are null and
same should have been dismissed instead of having been void; (3) that the certification made by the President of the
ordered withdrawn. The University prayed that the proceedings in Philippines is not authorized by Section 10 of Republic Act 875,
Case No. 1183-MC and the order of April 6, 1963 and the but is violative thereof; (4) that the Faculty Club has no right to
resolution of June 5, 1963 issued therein be annulled, and that unionize or organize as a labor union for collective bargaining
the CIR be ordered to dismiss Case No. 1183-MC on the ground purposes and to be certified as a collective bargaining agent
of lack of jurisdiction. within the purview of the Industrial Peace Act, and consequently it
has no right to strike and picket on the ground of petitioner's 12222, May 28, 1958, is very pertinent. We quote a portion of the
alleged refusal to bargain collectively where such duty does not decision:
exist in law and is not enforceable against an educational
It appears that the University of San Agustin, petitioner herein, is
institution; and (5) that the return-to-work order of March 30, 1963
an educational institution conducted and managed by a "religious
is improper and illegal. The petition prayed that the proceedings
non-stock corporation duly organized and existing under the laws
in Case No. 41-IPA be annulled, that the order dated March 30,
of the Philippines." It was organized not for profit or gain or
1963 and the resolution dated May 7, 1963 be revoked, and that
division of the dividends among its stockholders, but solely for
the lower court be ordered to dismiss Case 41-IPA on the ground
religious and educational purposes. It likewise appears that the
of lack of jurisdiction.
Philippine Association of College and University Professors,
On September 10, 1963, the Faculty Club, through counsel, filed respondent herein, is a non-stock association composed of
a motion to dismiss the petition for certiorari on the ground that professors and teachers in different colleges and universities and
the petition being filed by way of an appeal from the orders of the that since its organization two years ago, the university has
Court of Industrial Relations denying the motion to dismiss in adopted a hostile attitude to its formation and has tried to
Case No. 41-IPA, the petition for certiorari is not proper because discriminate, harass and intimidate its members for which reason
the orders appealed from are interlocutory in nature. the association and the members affected filed the unfair labor
practice complaint which initiated this proceeding. To the
This Court, by resolution of September 26, 1963, ordered that
complaint of unfair labor practice, petitioner filed an answer
these three cases (G.R. Nos. L-21278, L-21462 and L-21500) be
wherein it disputed the jurisdiction of the Court of Industrial
considered together and the motion to dismiss in Case G.R. No.
Relations over the controversy on the following grounds:
L-21500 be taken up when the cases are decided on the merits
after the hearing. "(a) That complainants therein being college and/or university
professors were not "industrial" laborers or employees, and the
Brushing aside certain technical questions raised by the parties in
Philippine Association of College and University Professors being
their pleadings, We proceed to decide these three cases on the
composed of persons engaged in the teaching profession, is not
merits of the issues raised.
and cannot be a legitimate labor organization within the meaning
The University has raised several issues in the present cases, the of the laws creating the Court of Industrial Relations and defining
pivotal one being its claim that the Court of Industrial Relations its powers and functions;
has no jurisdiction over the parties and the subject matter in CIR
"(b) That the University of San Agustin, respondent therein,
Cases 41-IPA, 1183-MC and V-30, brought before it, upon the
is not  an institution established for the purpose of gain or division
ground that Republic Act No. 875 is not applicable to the
of profits, and consequently, it is not  an "industrial" enterprise and
University because it is an educational institution and not an
the members of its teaching staff are not engaged in "industrial"
industrial establishment and hence not an "employer" in
employment (U.S.T. Hospital Employees Association vs. Sto.
contemplation of said Act; and neither is Republic Act No. 875
Tomas University Hospital, G.R. No. L-6988, 24 May 1954; and
applicable to the members of the Faculty Club because the latter
San Beda College vs. Court of Industrial Relations and National
are independent contractors and, therefore, not employees within
Labor Union, G.R. No. L-7649, 29 October 1955; 51 O.G. (Nov.
the purview of the said Act.
1955) 5636-5640);
In support of the contention that being an educational institution it
"(c) That, as a necessary consequence, alleged controversy
is beyond the scope of Republic Act No. 875, the University cites
between therein complainants and respondent is not an
cases decided by this Court: Boy Scouts of the Philippines vs.
"industrial" dispute, and the Court of Industrial Relations has no
Juliana Araos, L-10091, Jan. 29, 1958; University of San Agustin jurisdiction, not  only on the parties but also over the subject
vs. CIR, et al.,  L-12222, May 28, 1958; Cebu Chinese High
matter of the complaint."
School vs. Philippine Land-Air-Sea Labor Union, PLASLU, L-
12015, April 22, 1959; La Consolacion College, et al. vs. CIR, et The issue now before us is: Since the University of San Agustin is
al.,  L-13282, April 22, 1960; University of the Philippines, et al. not an institution established for profit or gain, nor an industrial
vs. CIR, et al.,  L-15416, April 8, 1960; Far Eastern University vs. enterprise, but one established exclusively for educational
CIR, L-17620, August 31, 1962. We have reviewed these cases, purposes, can it be said that its relation with its professors is one
and also related cases subsequent thereto, and We find that they of employer and employee that comes under the jurisdiction of
do not sustain the contention of the University. It is true that this the Court of Industrial Relations? In other words, do the
Court has ruled that certain educational institutions, like the provisions of the Magna Carta on unfair labor practice apply to
University of Santo Tomas, University of San Agustin, La the relation between petitioner and members of respondent
Consolacion College, and other juridical entities, like the Boy association?
Scouts of the Philippines and Manila Sanitarium, are beyond the
The issue is not new. Thus, in the case of Boy Scouts of the
purview of Republic Act No. 875 in the sense that the Court of
Philippines v. Juliana V. Araos, G.R. No. L-10091, promulgated
Industrial Relations has no jurisdiction to take cognizance of
on January 29, 1958, this Court, speaking thru Mr. Justice
charges of unfair labor practice filed against them, but it is
Montemayor, answered the query in the negative in the following
nonetheless true that the principal reason of this Court in ruling in
wise:
those cases that those institutions are excluded from the
operation of Republic Act 875 is that those entities are not "The main issue involved in the present case is whether or not a
organized, maintained and operated for profit and do not declare charitable institution or one organized not for profit but for more
dividends to stockholders. The decision in the case of University elevated purposes, charitable, humanitarian, etc., like the Boy
of San Agustin vs. Court of Industrial Relations, G.R. No. L- Scouts of the Philippines, is included in the definition of
"employer" contained in Republic Act 875, and whether the
employees of said institution fall under the definition of created for profit but an educational institution and therefore not
"employee" also contained in the same Republic Act. If they are an industrial or business organization.
included, then any act which may be considered unfair labor
In the case of La Consolacion College, et al. vs. CIR, et al.,  G.R.
practice, within the meaning of said Republic Act, would come
No. L-13282, April 22, 1960, this Court repeated the same ruling
under the jurisdiction of the Court of Industrial Relations; but if
when it said:
they do not fall within the scope of said Republic Act, particularly,
its definitions of employer and employee, then the Industrial Court The main issue in this appeal by petitioner is that the industry trial
would have no jurisdiction at all. court committed an error in holding that it has jurisdiction to act in
this case even if it involves unfair labor practice considering that
xxx      xxx      xxx
the La Consolacion College is not a business enterprise but an
"On the basis of the foregoing considerations, there is every educational institution not organized for profit.
reason to believe that our labor legislation from Commonwealth
If the claim that petitioner is an educational institution not
Act No. 103, creating the Court of Industrial Relations, down
operated for profit is true, which apparently is the case, because
through the Eight-Hour Labor Law, to the Industrial Peace Act,
the very court a quo  found that it has no stockholder, nor
was intended by the Legislature to apply only to industrial
capital . . . then we are of the opinion that the same does not
employment and to govern the relations between employers
come under the jurisdiction of the Court of Industrial Relations in
engaged in industry and occupations for purposes of profit and
view of the ruling in the case of Boy Scouts of the Philippines v.
gain, and their industrial employees, but not to organizations and
Juliana V. Araos, G.R. No. L-10091, decided on January 29,
entities which are organized, operated and maintained not for
1958.
profit or gain, but for elevated and lofty purposes, such as,
charity, social service, education and instruction, hospital and It is noteworthy that the cases of the University of San Agustin,
medical service, the encouragement and promotion of character, the University of Santo Tomas, and La Consolacion College, cited
patriotism and kindred virtues in youth of the nation, etc. above, all involve charges of unfair labor practice under Republic
Act No. 875, and the uniform rulings of this Court are that the
"In conclusion, we find and hold that Republic Act No. 875,
Court of Industrial Relations has no jurisdiction over the charges
particularly, that portion thereof regarding labor disputes and
because said Act does not apply to educational institutions that
unfair labor practice, does not apply to the Boy Scouts of the
are not operated or maintained for profit and do not declare
Philippines, and consequently, the Court of Industrial Relations
dividends. On the other hand, in the cases of Far Eastern
had no jurisdiction to entertain and decide the action or petition
University v. CIR, et al.,  G.R. No. L-17620, August 31, 1962, this
filed by respondent Araos. Wherefore, the appealed decision and
Court upheld the decision of the Court of Industrial Relations
resolution of the CIR are hereby set aside, with costs against
finding the Far Eastern University, also an educational institution,
respondent."
guilty of unfair labor practice. Among the findings of fact in said
There being a close analogy between the relation and facts case was that the Far Eastern University made profits from the
involved in the two cases, we cannot but conclude that the Court school year 1952-1953 to 1958-1959. In affirming the decision of
of Industrial Relations has no jurisdiction to entertain the the lower court, this Court had thereby ratified the ruling of the
complaint for unfair labor practice lodged by respondent Court of Industrial Relations which applied the Industrial Peace
association against petitioner and, therefore, we hereby set aside Act to educational institutions that are organized, operated and
the order and resolution subject to the present petition, with costs maintained for profit.
against respondent association.
It is also noteworthy that in the decisions in the cases of the Boy
The same doctrine was confirmed in the case of University of Scouts of the Philippines, the University of San Agustin, the
Santo Tomas v. Hon. Baltazar Villanueva, et al.,  G.R. No. L- University of Sto. Tomas, and La Consolacion College, this Court
13748, October 30, 1959, where this Court ruled that: was not unanimous in the view that the Industrial Peace Act
(Republic Act No. 875) is not applicable to charitable,
In the present case, the record reveals that the petitioner
eleemosynary or non-profit organizations — which include
University of Santo Tomas is not an industry organized for profit
educational institutions not operated for profit. There are
but an institution of learning devoted exclusively to the education
members of this Court who hold the view that the Industrial Peace
of the youth. The Court of First Instance of Manila in its decision
Act would apply also to non-profit organizations or entities — the
in Civil Case No. 28870, which has long become final and
only exception being the Government, including any political
consequently the settled law in the case, found as established by
subdivision or instrumentality thereof, in so far as governmental
the evidence adduced by the parties therein (herein petitioner and
functions are concerned. However, in the Far Eastern University
respondent labor union) that while the University collects fees
case this Court is unanimous in supporting the view that an
from its students, all its income is used for the improvement and
educational institution that is operated for profit comes within the
enlargement of the institution. The University declares no
scope of the Industrial Peace Act. We consider it a settled
dividend, and the members of the corporation who founded it, as
doctrine of this Court, therefore, that the Industrial Peace Act is
ordained in its articles of incorporation, receive no material
applicable to any organization or entity — whatever may be its
compensation for the time and sacrifice they render to the
purpose when it was created — that is operated for profit or gain.
University and its students. The respondent union itself in a case
before the Industrial Court (Case No. 314-MC) has averred that Does the University operate as an educational institution for
"the University of Santo Tomas, like the San Beda College, is an profit? Does it declare dividends for its stockholders? If it does
educational institution operated not for profit but for the sole not, it must be declared beyond the purview of Republic Act No.
purpose of educating young men." (See Annex "B" to petitioner's 875; but if it does, Republic Act No. 875 must apply to it. The
motion to dismiss.). It is apparent, therefore, that on the face of University itself admits that it has declared dividends.3 The CIR in
the record the University of Santo Tomas is not a corporation its order dated March 30, 1963 in CIR Case No. 41-IPA — which
order was issued after evidence was heard — also found that the and pay for; to engage one's service; to hire." (Webster's New
University is not for strictly educational purposes and that "It Twentieth Century Dictionary, 2nd ed., 1960, p. 595). The
realizes profits and parts of such earning is distributed as Workmen's Compensation Act defines employer as including
dividends to private stockholders or individuals (Exh. A and also 1 "every person or association of persons, incorporated or not,
to 1-F, 2-x 3-x and 4-x)" 4 Under this circumstance, and in public or private, and the legal representative of the deceased
consonance with the rulings in the decisions of this Court, above employer" and "includes the owner or lessee of a factory or
cited, it is obvious that Republic Act No. 875 is applicable to establishment or place of work or any other person who is
herein petitioner Feati University. virtually the owner or manager of the business carried on in the
establishment or place of work but who, for reason that there is
But the University claims that it is not an employer within the
an independent contractor in the same, or for any other reason, is
contemplation of Republic Act No. 875, because it is not an
not the direct employer of laborers employed there." [Sec. 39(a)
industrial establishment. At most, it says, it is only a lessee of the
of Act No. 3428.] The Minimum Wage Law states that "employer
services of its professors and/or instructors pursuant to a contract
includes any person acting directly or indirectly in the interest of
of services entered into between them. We find no merit in this
the employer in relation to an employee and shall include the
claim. Let us clarify who is an "employer" under the Act. Section
Government and the government corporations". [Rep. Act No.
2(c) of said Act provides:
602, Sec. 2(b)]. The Social Security Act defines employer as "any
Sec. 2. Definitions.—As used in this Act — person, natural or juridical, domestic or foreign, who carries in the
Philippines any trade, business, industry, undertaking, or activity
(c) The term employer include any person acting in the interest of of any kind and uses the services of another person who is under
an employer, directly or indirectly, but shall not include any labor his orders as regards the employment, except the Government
organization (otherwise than when acting as an employer) or any and any of its political subdivisions, branches or instrumentalities,
one acting in the capacity or agent of such labor organization. including corporations owned or controlled by the Government."
It will be noted that in defining the term "employer" the Act uses (Rep. Act No. 1161, Sec. 8[c]).
the word "includes", which it also used in defining "employee". This Court, in the cases of the The Angat River Irrigation System,
[Sec. 2 (d)], and "representative" [Sec. 2(h)]; and not the word et al. vs. Angat River Workers' Union (PLUM), et al., G.R. Nos. L-
"means" which the Act uses in defining the terms "court" [Sec. 10934 and L-10944, December 28, 1957, which cases involve
2(a)], "labor organization" [Sec. 2(e)], "legitimate labor unfair labor practices and hence within the purview of Republic
organization [Sec. 2(f)], "company union" [Sec. 2(g)], "unfair labor Act No. 875, defined the term employer as follows:
practice" [Sec. 2(i)], "supervisor" [Sec. 2(k)], "strike" [Sec. 2(l)]
and "lock-out" [Sec. 2(m)]. A methodical variation in terminology An employer is one who employs the services of others; one for
is manifest. This variation and distinction in terminology and whom employees work and who pays their wages or salaries
phraseology cannot be presumed to have been the (Black Law Dictionary, 4th ed., p. 618).
inconsequential product of an oversight; rather, it must have been
An employer includes any person acting in the interest of an
the result of a deliberate and purposeful act, more so when we
employer, directly or indirectly (Sec. 2-c, Rep. Act 875).
consider that as legislative records show, Republic Act No. 875
had been meticulously and painstakingly drafted and deliberated Under none of the above definitions may the University be
upon. In using the word "includes" and not "means", Congress did excluded, especially so if it is considered that every professor,
not intend to give a complete definition of "employer", but rather instructor or teacher in the teaching staff of the University, as per
that such definition should be complementary to what is allegation of the University itself, has a contract with the latter for
commonly understood as employer. Congress intended the term teaching services, albeit for one semester only. The University
to be understood in a broad meaning because, firstly, the engaged the services of the professors, provided them work, and
statutory definition includes not only "a principal employer but also paid them compensation or salary for their services. Even if the
a person acting in the interest of the employer"; and, secondly, University may be considered as a lessee of services under a
the Act itself specifically enumerated those who are not included contract between it and the members of its Faculty, still it is
in the term "employer", namely: (1) a labor organization included in the term "employer". "Running through the word
(otherwise than when acting as an employer), (2) anyone acting `employ' is the thought that there has been an agreement on the
in the capacity of officer or agent of such labor organization [Sec. part of one person to perform a certain service in return for
2(c)], and (3) the Government and any political subdivision or compensation to be paid by an employer. When you ask how a
instrumentality thereof insofar as the right to strike for the purpose man is employed, or what is his employment, the thought that he
of securing changes or modifications in the terms and conditions is under agreement to perform some service or services for
of employment is concerned (Section 11). Among these statutory another is predominant and paramount." (Ballentine Law
exemptions, educational institutions are not included; hence, they Dictionary, Philippine ed., p. 430, citing Pinkerton National
can be included in the term "employer". This Court, however, has Detective Agency v. Walker, 157 Ga. 548, 35 A. L. R. 557, 560,
ruled that those educational institutions that are not operated for 122 S.E. Rep. 202).
profit are not within the purview of Republic Act No. 875.5
To bolster its claim of exception from the application of Republic
As stated above, Republic Act No. 875 does not give a Act No. 875, the University contends that it is not state that the
comprehensive but only a complementary definition of the term employers included in the definition of 2 (c) of the Act. This
"employer". The term encompasses those that are in ordinary contention can not be sustained. In the first place, Sec. 2 (c) of
parlance "employers." What is commonly meant by "employer"? Republic Act No. 875 does not state that the employers included
The term "employer" has been given several acceptations. The in the definition of the term "employer" are only and exclusively
lexical definition is "one who employs; one who uses; one who "industrial establishments"; on the contrary, as stated above, the
engages or keeps in service;" and "to employ" is "to provide work term "employer" encompasses all employers except those
specifically excluded by the Act. In the second place, even the Act This definition is again, like the definition of the term "employer"
itself does not refer exclusively to industrial establishments and [Sec. 2(c)], by the use of the term "include", complementary. It
does not confine its application thereto. This is patent inasmuch embraces not only those who are usually and ordinarily
as several provisions of the Act are applicable to non-industrial considered employees, but also those who have ceased as
workers, such as Sec. 3, which deals with "employees' right to employees as a consequence of a labor dispute. The term
self-organization"; Sections 4 and 5 which enumerate unfair labor "employee", furthermore, is not limited to those of a particular
practices; Section 8 which nullifies private contracts contravening employer. As already stated, this Court in the cases of The Angat
employee's rights; Section 9 which relates to injunctions in any River Irrigation System, et al. v. Angat River Workers' Union
case involving a labor dispute; Section 11 which prohibits strikes (PLUM), et al., supra, has defined the term "employer" as "one
in the government; Section 12 which provides for the exclusive who employs the services of others; one for whom employees
collective bargaining representation for labor organizations; work and who pays their wages or salaries. "Correlatively, an
Section 14 which deals with the procedure for collective employee must be one who is engaged in the service of another;
bargaining; Section 17 which treats of the rights and conditions of who performs services for another; who works for salary or
membership in labor organizations; Sections 18, 19, 20 and 21 wages. It is admitted by the University that the striking professors
which provide respectively for the establishment of conciliation and/or instructors are under contract to teach particular courses
service, compilation of collective bargaining contracts, advisory and that they are paid for their services. They are, therefore,
labor-management relations; Section 22 which empowers the employees of the University.
Secretary of Labor to make a study of labor relations; and Section
In support of its claim that the members of the Faculty Club are
24 which enumerates the rights of labor organizations. (See
not employees of the University, the latter cites as authority
Dissenting Opinion of Justice Concepcion in Boy Scouts of the
Francisco's Labor Laws, 2nd ed., p. 3, which states:
Philippines v. Juliana Araos, G.R. No. L-10091, January 29,
1958.) While the term "workers" as used in a particular statute, has been
regarded as limited to those performing physical labor, it has
This Court, in the case of Boy Scouts of the Philippines v.
been held to embrace stenographers and bookkeepers. Teachers
Araos, supra, had occasion to state that the Industrial Peace Act
are not included, however.
"refers only to organizations and entities created and operated for
profits, engaged in a profitable trade, occupation or industry". It It is evident from the above-quoted authority that "teachers" are
cannot be denied that running a university engages time and not to be included among those who perform "physical labor", but
attention; that it is an occupation or a business from which the it does not mean that they are not employees. We have checked
one engaged in it may derive profit or gain. The University is not the source of the authority, which is 31 Am. Jur., Sec. 3, p. 835,
an industrial establishment in the sense that an industrial and the latter cites Huntworth v. Tanner, 87 Wash 670, 152 P.
establishment is one that is engaged in manufacture or trade 523, Ann Cas 1917 D 676. A reading of the last case confirms
where raw materials are changed or fashioned into finished Our view.
products for use. But for the purposes of the Industrial Peace Act
the University is an industrial establishment because it is That teachers are "employees' has been held in a number of
operated for profit and it employs persons who work to earn a cases (Aebli v. Board of Education of City and County of San
living. The term "industry", for the purposes of the application of Francisco, 145 P. 2d 601, 62 Col. App 2.d 706; Lowe & Campbell
our labor laws should be given a broad meaning so as to cover all Sporting Goods Co. v. Tangipahoa Parish School Board, La.
enterprises which are operated for profit and which engage the App., 15 So. 2d 98, 100; Sister Odelia v. Church of St. Andrew,
services of persons who work to earn a living. 263 N. W. 111, 112, 195 Minn. 357, cited in Words and Phrases,
Permanent ed., Vol. 14, pp. 806-807). This Court in the Far
The word "industry" within State Labor Relations Act controlling Eastern University case, supra, considered university instructors
labor relations in industry, cover labor conditions in any field of as employees and declared Republic Act No. 875 applicable to
employment where the objective is earning a livelihood on the them in their employment relations with their school. The
one side and gaining of a profit on the other. Labor Law Sec. 700 professors and/or instructors of the University neither ceased to
et seq. State Labor Relations Board vs. McChesney, 27 N.Y.S. 2d be employees when they struck, for Section 2 of Rep. Act 875
866, 868." (Words and Phrases, Permanent Edition, Vol. 21, 1960 includes among employees any individual whose work has
edition p. 510). ceased as consequence of, or in connection with a current labor
dispute. Striking employees maintain their status as employees of
The University urges that even if it were an employer, still there
the employer. (Western Cartridge Co. v. NLRB, C.C.A. 7, 139 F2d
would be no employer-employee relationship between it and the
855, 858).
striking members of the Faculty Club because the latter are not
employees within the purview of Sec. 2(d) of Republic Act No. The contention of the University that the professors and/or
875 but are independent contractors. This claim is untenable. instructors are independent contractors, because the University
does not exercise control over their work, is likewise untenable.
Section 2 (d) of Republic Act No. 875 provides:
This Court takes judicial notice that a university controls the work
(d) The term "employee" shall include any employee and shall not of the members of its faculty; that a university prescribes the
be limited to the employee of a particular employer unless the act courses or subjects that professors teach, and when and where to
explicitly states otherwise and shall include any individual whose teach; that the professors' work is characterized by regularity and
work has ceased as a consequence of, or in connection with, any continuity for a fixed duration; that professors are compensated
current labor dispute or because of any unfair labor practice and for their services by wages and salaries, rather than by profits;
who has not obtained any other substantially equivalent and that the professors and/or instructors cannot substitute others to
regular employment. do their work without the consent of the university; and that the
professors can be laid off if their work is found not satisfactory. All
these indicate that the university has control over their work; and guaranteed by the Constitution, that said right would exist even if
professors are, therefore, employees and not independent Republic Act No. 875 is repealed, and that regardless of whether
contractors. There are authorities in support of this view. their employers are engaged in commerce or not. Indeed, it is Our
considered view that the members of the faculty or teaching staff
The principal consideration in determining whether a workman is
of private universities, colleges, and schools in the Philippines,
an employee or an independent contractor is the right to control
regardless of whether the university, college or school is run for
the manner of doing the work, and it is not the actual exercise of
profit or not, are included in the term "employees" as
the right by interfering with the work, but the right to control, which
contemplated in Republic Act No. 875 and as such they may
constitutes the test. (Amalgamated Roofing Co. v. Travelers' Ins.
organize themselves pursuant to the above-quoted provision of
Co., 133 N.E. 259, 261, 300 Ill. 487, quoted in Words and
Section 3 of said Act. Certainly, professors, instructors or
Phrases, Permanent ed., Vol. 14, p. 576).
teachers of private educational institutions who teach to earn a
Where, under Employers' Liability Act, A was instructed when and living are entitled to the protection of our labor laws — and one
where to work . . . he is an employee, and not a contractor, such law is Republic Act No. 875.
though paid specified sum per square. (Heine v. Hill, Harris & Co.,
The contention of the University in the instant case that the
2 La. App. 384, 390, in Words and Phrases, loc, cit.) .
members of the Faculty Club can not unionize and the Faculty
Employees are those who are compensated for their labor or Club can not exist as a valid labor organization is, therefore,
services by wages rather than by profits. (People vs. Distributors without merit. The record shows that the Faculty Club is a duly
Division, Smoked Fish Workers Union Local No. 20377, Sup. 7 N. registered labor organization and this fact is admitted by counsel
Y. S. 2d 185, 187 in Words and Phrases, loc, cit.) for the University.5a

Services of employee or servant, as distinguished from those of a The other issue raised by the University is the validity of the
contractor, are usually characterized by regularity and continuity Presidential certification. The University contends that under
of work for a fixed period or one of indefinite duration, as Section 10 of Republic Act No. 875 the power of the President of
contrasted with employment to do a single act or a series of the Philippines to certify is subject to the following conditions,
isolated acts; by compensation on a fixed salary rather than one namely: (1) that here is a labor dispute, and (2) that said labor
regulated by value or amount of work; . . . (Underwood v. dispute exists in an industry that is vital to the national interest.
Commissioner of Internal Revenue, C.C.A., 56 F. 2d 67, 71 in The University maintains that those conditions do not obtain in the
Words and Phrases, op. cit., p. 579.) instant case. This contention has also no merit.

Independent contractors can employ others to work and We have previously stated that the University is an establishment
accomplish contemplated result without consent of contractee, or enterprise that is included in the term "industry" and is covered
while "employee" cannot substitute another in his place without by the provisions of Republic Act No. 875. Now, was there a labor
consent of his employer. (Luker Sand & Gravel Co. v. Industrial dispute between the University and the Faculty Club?
Commission, 23 P. 2d 225, 82 Utah, 188, in Words and Phrases,
Republic Act No. 875 defines a labor dispute as follows:
Vol. 14, p. 576).
The term "labor dispute" includes any controversy concerning
Moreover, even if university professors are considered
terms, tenure or conditions of employment, or concerning the
independent contractors, still they would be covered by Rep. Act
association or representation of persons in negotiating, fixing,
No. 875. In the case of the Boy Scouts of the Philippines v.
maintaining, changing, or seeking to arrange terms or conditions
Juliana Araos, supra, this Court observed that Republic Act No.
of employment regardless of whether the disputants stand in
875 was modelled after the Wagner Act, or the National Labor
proximate relation of employer and employees.
Relations Act, of the United States, and this Act did not exclude
"independent contractors" from the orbit of "employees". It was in The test of whether a controversy comes within the definition of
the subsequent legislation — the Labor Management Relation Act "labor dispute" depends on whether the controversy involves or
(Taft-Harley concerns "terms, tenure or condition of employment" or
Act) — that "independent contractors" together with agricultural "representation." It is admitted by the University, in the instant
laborers, individuals in domestic service of the home, supervisors, case, that on January 14, 1963 the President of the Faculty Club
and others were excluded. (See Rothenberg on Labor Relations, wrote to the President of the University a letter informing the latter
1949, pp. 330-331). of the organization of the Faculty Club as a labor union, duly
registered with the Bureau of Labor Relations; that again on
It having been shown that the members of the Faculty Club are
January 22, 1963 another letter was sent, to which was attached
employees, it follows that they have a right to unionize in
a list of demands consisting of 26 items, and asking the President
accordance with the provisions of Section 3 of the Magna Carta of
of the University to answer within ten days from date of receipt
Labor (Republic Act No. 875) which provides as follows:
thereof; that the University questioned the right of the Faculty
Sec. 3. Employees' right to self-organization.—Employees shall Club to be the exclusive representative of the majority of the
have the right to self-organization and to form, join or assist labor employees and asked proof that the Faculty Club had been
organizations of their own choosing for the purpose of collective designated or selected as exclusive representative by the vote of
bargaining through representatives of their own choosing and to the majority of said employees; that on February 1, 1963 the
engage in concerted activities for the purpose of collective Faculty Club filed with the Bureau of Labor Relations a notice of
bargaining and other mutual aid or protection. . . . strike alleging as reason therefor the refusal of the University to
bargain collectively with the representative of the faculty
We agree with the statement of the lower court, in its order of members; that on February 18, 1963 the members of the Faculty
March 30, 1963 which is sought to be set aside in the instant Club went on strike and established picket lines in the premises of
case, that the right of employees to self-organization is the University, thereby disrupting the schedule of classes; that on
March 1, 1963 the Faculty Club filed Case No. 3666-ULP for dispute and the employer-employee relationship may be threshed
unfair labor practice against the University, but which was later out before the CIR, and the CIR may issue such order or orders
dismissed (on April 2, 1963 after Case 41-IPA was certified to the as may be necessary to make effective the exercise of its
CIR); and that on March 7, 1963 a petition for certification jurisdiction. The parties involved in the case may appeal to the
election, Case No. 1183-MC, was filed by the Faculty Club in the Supreme Court from the order or orders thus issued by the CIR.
CIR.6 All these admitted facts show that the controversy between
And so, in the instant case, when the President took into
the University and the Faculty Club involved terms and conditions
consideration that the University "has some 18,000 students and
of employment, and the question of representation. Hence, there
employed approximately 500 faculty members", that `the
was a labor dispute between the University and the Faculty Club,
continued disruption in the operation of the University will
as contemplated by Republic Act No. 875. It having been shown
necessarily prejudice the thousand of students", and that "the
that the University is an institution operated for profit, that is an
dispute affects the national interest",7 and certified the dispute to
employer, and that there is an employer-employee relationship,
the CIR, it is not for the CIR nor this Court to pass upon the
between the University and the members of the Faculty Club, and
correctness of the reasons of the President in certifying the labor
it having been shown that a labor dispute existed between the
dispute to the CIR.
University and the Faculty Club, the contention of the University,
that the certification made by the President is not only not The third issue raised by the University refers to the question of
authorized by Section 10 of Republic Act 875 but is violative the legality of the return-to-work order (of March 30, 1963 in Case
thereof, is groundless. 41-IPA) and the order implementing the same (of April 6, 1963). It
alleges that the orders are illegal upon the grounds: (1) that
Section 10 of Republic Act No. 875 provides:
Republic Act No. 875, supplementing Commonwealth Act No.
When in the opinion of the President of the Philippines there 103, has withdrawn from the CIR the power to issue a return-to-
exists a labor dispute in an industry indispensable to the national work order; (2) that the only power granted by Section 10 of
interest and when such labor dispute is certified by the President Republic Act No. 875 to the CIR is to issue an order forbidding
to the Court of Industrial Relations, said Court may cause to be the employees to strike or forbidding the employer to lockout the
issued a restraining order forbidding the employees to strike or employees, as the case may be, before either contingency had
the employer to lockout the employees, and if no other solution to become a fait accompli; (3) that the taking in by the University of
the dispute is found, the Court may issue an order fixing the terms replacement professors was valid, and the return-to-work order of
and conditions of employment. March 30, 1963 constituted impairment of the obligation of
contracts; and (4) the CIR could not issue said order without
This Court had occasion to rule on the application of the above-
having previously determined the legality or illegality of the strike.
quoted provision of Section 10 of Republic Act No. 875. In the
case of Pampanga Sugar Development Co. v. CIR, et al.,  G.R. The contention of the University that Republic Act No. 875 has
No. L-13178, March 24, 1961, it was held: withdrawn the power of the Court of Industrial Relations to issue a
return-to-work order exercised by it under Commonwealth Act No.
It thus appears that when in the opinion of the President a labor
103 can not be sustained. When a case is certified by the
dispute exists in an industry indispensable to national interest and
President to the Court of Industrial Relations, the case thereby
he certifies it to the Court of Industrial Relations the latter
comes under the operation of Commonwealth Act No. 103, and
acquires jurisdiction to act thereon in the manner provided by law.
the Court may exercise the broad powers and jurisdiction granted
Thus the court may take either of the following courses: it may
to it by said Act. Section 10 of Republic Act No. 875 empowers
issue an order forbidding the employees to strike or the employer
the Court of Industrial Relations to issue an order "fixing the terms
to lockout its employees, or, failing in this, it may issue an order
of employment." This clause is broad enough to authorize the
fixing the terms and conditions of employment. It has no other
Court to order the strikers to return to work and the employer to
alternative. It can not throw the case out in the assumption that
readmit them. This Court, in the cases of the Philippine Marine
the certification was erroneous.
Officers Association vs. The Court of Industrial Relations,
xxx      xxx      xxx Compania Maritima, et al.; and Compañia Martima, et al. vs.
Philippine Marine Radio Officers Association and CIR, et al., G.R.
. . . The fact, however, is that because of the strike declared by Nos. L-10095 and L-10115, October 31, 1957, declared:
the members of the minority union which threatens a major
industry the President deemed it wise to certify the controversy to We cannot subscribe to the above contention. We agree with
the Court of Industrial Relations for adjudication. This is the counsel for the Philippine Radio Officers' Association that upon
power that the law gives to the President the propriety of its certification by the President under Section 10 of Republic Act
exercise being a matter that only devolves upon him. The same is 875, the case comes under the operation of Commonwealth Act
not the concern of the industrial court. What matters is that by 103, which enforces compulsory arbitration in cases of labor
virtue of the certification made by the President the case was disputes in industries indispensable to the national interest when
placed under the jurisdiction of said court. (Emphasis supplied) the President certifies the case to the Court of Industrial
Relations. The evident intention of the law is to empower the
To certify a labor dispute to the CIR is the prerogative of the Court of Industrial Relations to act in such cases, not only in the
President under the law, and this Court will not interfere in, much manner prescribed under Commonwealth Act 103, but with the
less curtail, the exercise of that prerogative. The jurisdiction of the same broad powers and jurisdiction granted by that act. If the
CIR in a certified case is exclusive (Rizal Cement Co., Inc. v. Court of Industrial Relations is granted authority to find a solution
Rizal Cement Workers Union (FFW), et al., G.R. No. L-12747, to an industrial dispute and such solution consists in the ordering
July 30, 1960). Once the jurisdiction is acquired pursuant to the of employees to return back to work, it cannot be contended that
presidential certification, the CIR may exercise its broad powers the Court of Industrial Relations does not have the power or
as provided in Commonwealth Act 103. All phases of the labor jurisdiction to carry that solution into effect. And of what use is its
power of conciliation and arbitration if it does not have the power place of strikers do not displace them as `employees." ' (National
and jurisdiction to carry into effect the solution it has adopted? Labor Relations Board v. A. Sartorius & Co., C.C.A. 2, 140 F. 2d
Lastly, if the said court has the power to fix the terms and 203, 206, 207.)
conditions of employment, it certainly can order the return of the
It is clear from what has been said that the return-to-work order
workers with or without backpay as a term or condition of
cannot be considered as an impairment of the contract entered
employment.
into by petitioner with the replacements. Besides, labor contracts
The foregoing ruling was reiterated by this Court in the case must yield to the common good and such contracts are subject to
of Hind Sugar Co. v. CIR, et al.,  G.R. No. L-13364, July 26, 1960. the special laws on labor unions, collective bargaining, strikes and
similar subjects (Article 1700, Civil Code).
When a case is certified to the CIR by the President of the
Philippines pursuant to Section 10 of Republic Act No. 875, the Likewise unsustainable is the contention of the University that the
CIR is granted authority to find a solution to the industrial dispute; Court of Industrial Relations could not issue the return-to-work
and the solution which the CIR has found under the authority of order without having resolved previously the issue of the legality
the presidential certification and conformable thereto cannot be or illegality of the strike, citing as authority therefor the case
questioned (Radio Operators Association of the Philippines vs. of Philippine Can Company v. Court of Industrial Relations, G.R.
Philippine Marine Radio Officers Association, et al., L-10112, No. L-3021, July 13, 1950. The ruling in said case is not
Nov. 29, 1957, 54 O.G. 3218). applicable to the case at bar, the facts and circumstances being
very different. The Philippine Can Company case, unlike the
Untenable also is the claim of the University that the CIR cannot
instant case, did not involve the national interest and it was not
issue a return-to-work order after strike has been declared, it
certified by the President. In that case the company no longer
being contended that under Section 10 of Republic Act No. 875
needed the services of the strikers, nor did it need substitutes for
the CIR can only prevent a strike or a lockout — when either of
the strikers, because the company was losing, and it was
this situation had not yet occurred. But in the case of Bisaya Land
imperative that it lay off such laborers as were not necessary for
Transportation Co., Inc. vs. Court of Industrial Relations, et al.,
its operation in order to save the company from bankruptcy. This
No. L-10114, Nov. 26, 1957, 50 O.G. 2518, this Court declared:
was the reason of this Court in ruling, in that case, that the legality
There is no reason or ground for the contention that Presidential or illegality of the strike should have been decided first before the
certification of labor dispute to the CIR is limited to the prevention issuance of the return-to-work order. The University, in the case
of strikes and lockouts. Even after a strike has been declared before Us, does not claim that it no longer needs the services of
where the President believes that public interest demands professors and/or instructors; neither does it claim that it was
arbitration and conciliation, the President may certify the ease for imperative for it to lay off the striking professors and instructors
that purpose. The practice has been for the Court of Industrial because of impending bankruptcy. On the contrary, it was
Relations to order the strikers to work,  pending the determination imperative for the University to hire replacements for the strikers.
of the union demands that impelled the strike. There is nothing in Therefore, the ruling in the Philippine Can case that the legality of
the law to indicate that this practice is abolished." (Emphasis the strike should be decided first before the issuance of the
supplied) return-to-work order does not apply to the case at bar. Besides,
as We have adverted to, the return-to-work order of March 30,
Likewise untenable is the contention of the University that the 1963, now in question, was a confirmation of an agreement
taking in by it of replacements was valid and the return-to-work between the University and the Faculty Club during a prehearing
order would be an impairment of its contract with the conference on March 23, 1963.
replacements. As stated by the CIR in its order of March 30,
1963, it was agreed before the hearing of Case 41-IPA on March The University also maintains that there was no more basis for
23, 1963 that the strikers would return to work under the status the claim of the members of the Faculty Club to return to their
quo  arrangement and the University would readmit them, and the work, as their individual contracts for teaching had expired on
return-to-work order was a confirmation of that agreement. This is March 25 or 31, 1963, as the case may be, and consequently,
a declaration of fact by the CIR which we cannot disregard. The there was also no basis for the return-to-work order of the CIR
faculty members, by striking, have not abandoned their because the contractual relationships having ceased there were
employment but, rather, they have only ceased from their labor no positions to which the members of the Faculty Club could
(Keith Theatre v. Vachon et al., 187 A. 692). The striking faculty return to. This contention is not well taken. This argument loses
members have not lost their right to go back to their positions, sight of the fact that when the professors and instructors struck on
because the declaration of a strike is not a renunciation of their February 18, 1963, they continued to be employees of the
employment and their employee relationship with the University University for the purposes of the labor controversy
(Rex Taxicab Co. vs. CIR, et al., 40 O.G., No. 13, 138). The notwithstanding the subsequent termination of their teaching
employment of replacements was not authorized by the CIR. At contracts, for Section 2(d) of the Industrial Peace Act includes
most, that was a temporary expedient resorted to by the among employees "any individual whose work has ceased a
University, which was subject to the power of the CIR to allow to consequence of, or in connection with, any current labor dispute
continue or not. The employment of replacements by the or of any unfair labor practice and who has not obtained any other
University prior to the issuance of the order of March 30, 1963 did substantially equivalent and regular employment."
not vest in the replacements a permanent right to the positions
The question raised by the University was resolved in a similar
they held. Neither could such temporary employment bind the
case in the United States. In the case of Rapid Roller Co. v.
University to retain permanently the replacements.
NLRB 126 F. 2d 452, we read:
Striking employees maintained their status as employees of the
On May 9, 1939 the striking employees, eighty-four in number,
employer (Western Castridge Co. v. National Labor Relations
offered to the company to return to their employment. The
Board, C.C.A. 139 F. 2d 855, 858) ; that employees who took the
company believing it had not committed any unfair labor practice, the Act (referring to strikes and lockouts) the appeal to the
refused the employees' offer and claimed the right to employ Supreme Court from any award, order or decision shall not stay
others to take the place of the strikers, as it might see fit. This the execution of said award, order or decision sought to be
constituted discrimination in the hiring and tenure of the striking reviewed unless for special reason the court shall order that
employees. When the employees went out on a strike because of execution be stayed. Any award, order or decision that is
the unfair labor practice of the company, their status as appealed is necessarily not final. Yet under Section 14 of
employees for the purpose of any controversy growing out of that Commonwealth Act No. 103 that award, order or decision, even if
unfair labor practice was fixed. Sec. 2 (3) of the Act. Phelps not yet final, is executory, and the stay of execution is
Dodge Corp. v. National Labor Relations Board, 313 U.S. 177, 61 discretionary with the Court of Industrial Relations. In other words,
S. Ct. 845, 85. L. ed. 1271, 133 A.L.R. 1217. the Court of Industrial Relations, in cases involving strikes and
lockouts, may compel compliance or obedience of its award,
For the purpose of such controversy they remained employees of
order or decision even if the award, order or decision is not yet
the company. The company contended that they could not be
final because it is appealed, and it follows that any disobedience
their employees in any event since the "contract of their
or non-compliance of the award, order or decision would
employment expired by its own terms on April 23, 1939."
constitute contempt against the Court of Industrial Relations
In this we think the company is mistaken for the reason we have which the court may punish as provided in the Rules of Court.
just pointed out, that the status of the employees on strike This power of the Court of Industrial Relations to punish for
became fixed under Sec. 2 (3) of the Act because of the unfair contempt an act of non-compliance or disobedience of an award,
labor practice of the company which caused the strike. order or decision, even if not yet final, is a special one and is
exercised only in cases involving strikes and lockouts. And there
The University, furthermore, claims that the information for is reason for this special power of the industrial court because in
indirect contempt filed against the officers of the University (Case the exercise of its jurisdiction over cases involving strikes and
No. V-30) as well as the order of April 29, 1963 for their arrest lockouts the court has to issue orders or make decisions that are
were improper, irregular and illegal because (1) the officers of the necessary to effect a prompt solution of the labor dispute that
University had complied in good faith with the return-to-work order caused the strike or the lockout, or to effect the prompt creation of
and in those cases that they did not, it was due to circumstance a situation that would be most beneficial to the management and
beyond their control; (2) the return-to-work order and the order the employees, and also to the public — even if the solution may
implementing the same were illegal; and (3) even assuming that be temporary, pending the final determination of the case.
the order was legal, the same was not Yet final because there Otherwise, if the effectiveness of any order, award, or decision of
was a motion to reconsider it. the industrial court in cases involving strikes and lockouts would
Again We find no merit in this claim of Petitioner. We have be suspended pending appeal then it can happen that the
already ruled that the CIR had jurisdiction to issue the order of coercive powers of the industrial court in the settlement of the
March 30, 1963 in CIR Case 41-IPA, and the return-to-work labor disputes in those cases would be rendered useless and
provision of that order is valid and legal. Necessarily the order of nugatory.
April 6, 1963 implementing that order of March 30, 1963 was also The University points to Section 6 of Commonwealth Act No. 103
valid and legal. which provides that "Any violation of any order, award, or decision
Section 6 of Commonwealth Act No. 103 empowers the Court of of the Court of Industrial Relations shall after such order, award or
Industrial Relations of any Judge thereof to punish direct and decision has become final, conclusive and executory  constitute
indirect contempts as provided in Rule 64 (now Rule 71) of the contempt of court," and contends that only the disobedience of
Rules of Court, under the same procedure and penalties provided orders that are final (meaning one that is not appealed) may be
therein. Section 3 of Rule 71 enumerates the acts which would the subject of contempt proceedings. We believe that there is no
constitute indirect contempt, among which is "disobedience or inconsistency between the above-quoted provision of Section 6
resistance to lawful writ, process, order, judgment, or command of and the provision of Section 14 of Commonwealth Act No. 103. It
a court," and the person guilty thereof can be punished after a will be noted that Section 6 speaks of order, award or decision
written charge has been filed and the accused has been given an that is executory. By the provision of Section 14 an order, award
opportunity to be heard. The last paragraph of said section or decision of the Court of Industrial Relations in cases involving
provides: strikes and lockouts are immediately executory, so that a violation
of that order would constitute an indirect contempt of court.
But nothing in this section shall be so construed as to prevent the
court from issuing process to bring the accused party into court, We believe that the action of the CIR in issuing the order of arrest
or from holding him in custody pending such proceedings. of April 29, 1963 is also authorized under Section 19 of
Commonwealth Act No. 103 which provides as follows:
The provision authorizes the judge to order the arrest of an
alleged contemner (Francisco, et al. v. Enriquez, L-7058, March SEC. 19. Implied condition in every contract of employment.—In
20, 1954, 94 Phil., 603) and this, apparently, is the provision upon every contract of employment whether verbal or written, it is an
which respondent Judge Bautista relied when he issued the implied condition that when any dispute between the employer
questioned order of arrest. and the employee or laborer has been submitted to the Court of
Industrial Relations for settlement or arbitration pursuant to the
The contention of petitioner that the order of arrest is illegal is provisions of this Act . . . and pending award, or decision by the
unwarranted. The return-to-work order allegedly violated was Court of such dispute . . . the employee or laborer shall not strike
within the court's jurisdiction to issue. or walk out of his employment when so enjoined by the Court
after hearing and when public interest so requires, and if he has
Section 14 of Commonwealth Act No. 103 provides that in cases
already done so, that he shall forthwith return to it, upon order of
brought before the Court of Industrial Relations under Section 4 of
the Court, which shall be issued only after hearing when public
interest so requires or when the dispute cannot, in its opinion, be We hold that the CIR acted within its jurisdiction when it ordered
promptly decided or settled; and if the employees or laborers fail the arrest of the officers of the University upon a complaint for
to return to work, the Court may authorize the employer to accept indirect contempt filed by the Acting Special Prosecutor of the
other employees or laborers. A condition shall further be implied CIR in CIR Case V-30, and that order was valid. Besides those
that while such dispute . . . is pending, the employer shall refrain ordered arrested were not yet being punished for contempt; but,
from accepting other employees or laborers, unless with the having been charged, they were simply ordered arrested to be
express authority of the Court, and shall permit the continuation in brought before the Judge to be dealt with according to law.
the service of his employees or laborers under the last terms and Whether they are guilty of the charge or not is yet to be
conditions existing before the dispute arose. . . . A violation by the determined in a proper hearing.
employer or by the employee or laborer of such an order or the
Let it be noted that the order of arrest dated April 29, 1963 in CIR
implied contractual condition set forth in this section shall
Case V-30 is being questioned in Case G.R. No. L-21278 before
constitute contempt of the Court of Industrial Relations and shall
this Court in a special civil action for certiorari. The University did
be punished by the Court itself in the same manner with the same
not appeal from that order. In other words, the only question to be
penalties as in the case of contempt of a Court of First
resolved in connection with that order in CIR Case V-30 is
Instance. . . .
whether
the CIR had jurisdiction, or had abused its discretion, in issuing Case G.R. No. L-21278. After all, the University wanted CIR Case
that order. We hold that the CIR had jurisdiction to issue that 1183-MC dismissed, and the withdrawal of the petition for
order, and neither did it abuse its discretion when it issued that certification election had in a way produced the situation desired by
order. the University. After considering the arguments adduced by the
University in support of its petition for certiorari by way of appeal in
In Case G.R. No. L-21462 the University appealed from the order
Case G.R. No. L-21278, We hold that the CIR did not commit any
of Judge Villanueva of the CIR in Case No. 1183-MC, dated April
error when it granted the withdrawal of the petition for certification
6, 1963, granting the motion of the Faculty Club to withdraw its
election in Case No. 1183-MC. The principal case before the CIR is
petition for certification election, and from the resolution of the
Case No. 41-IPA and all the questions relating to the labor disputes
CIR en banc, dated June 5, 1963, denying the motion to
between the University and the Faculty Club may be threshed out,
reconsider said order of April 6, 1963. The ground of the Faculty
and decided, in that case.
Club in asking for the withdrawal of that petition for certification
election was because the issues involved in that petition were In Case G.R. No. L-21500 the University appealed from the order
absorbed by the issues in Case 41-IPA. The University opposed of the CIR of March 30, 1963, issued by Judge Bautista, and from
the petition for withdrawal, but at the same time it moved for the the resolution of the CIR en banc promulgated on June 28, 1963,
dismissal of the petition for certification election. denying the motion for the reconsideration of that order of March
30, 1963, in CIR Case No. 41-IPA. We have already ruled that the
It is contended by the University before this Court, in G.R. L-
CIR has jurisdiction to issue that order of March 30, 1963, and
21462, that the issues of employer-employee relationship
that order is valid, and We, therefore, hold that the CIR did not err
between the University and the Faculty Club, the alleged status of
in issuing that order of March 30, 1963 and in issuing the
the Faculty Club as a labor union, its majority representation and
resolution promulgated on June 28, 1963 (although dated May 7,
designation as bargaining representative in an appropriate unit of
1963) denying the motion to reconsider that order of March 30,
the Faculty Club should have been resolved first in Case No.
1963.
1183-MC prior to the determination of the issues in Case No. 41-
IPA, and, therefore, the motion to withdraw the petition for IN VIEW OF THE FOREGOING, the petition for certiorari and
certification election should not have been granted upon the prohibition with preliminary injunction in Case G.R. No. L-21278 is
ground that the issues in the first case were absorbed in the dismissed and the writs prayed for therein are denied. The writ of
second case. preliminary injunction issued in Case G.R. No. L-21278 is
dissolved. The orders and resolutions appealed from, in Cases
We believe that these contentions of the University in Case G.R.
Nos. L-21462 and L-21500, are affirmed, with costs in these three
No. L-21462 have been sufficiently covered by the discussion in this
cases against the petitioner-appellant Feati University. It is so
decision of the main issues raised in the principal case, which is
ordered.
 2. GOLD CITY v. NLRC; July 6, 1995
2. G
3.
G.R. No. 103560 July 6, 1995 (NLRC) assailing the latter's decision in "Gold City Integrated
Port Services, Inc. v. Adelo Ebuna, et al." (NLRC RAB X Case
GOLD CITY INTEGRATED PORT SERVICE, INC.
No. 5-0405-85) with twenty-seven private respondents (G.R.
(INPORT), petitioner,
No. 103599).1 This petition has been consolidated with G.R. No.
vs.
103599 where the petitioners are the private respondents in
NATIONAL LABOR RELATIONS COMMISSION (Fifth Division)
instant case and the private respondent is INPORT. For the
ADELO EBUNA, EMMANUEL VALMORIDA, RODOLFO
sake of clarity, INPORT shall be denominated in the case at
PEREZ, ROGER ZAGADO, MARCOS GANZAN, AND REY
bench as the petitioner and the employees as private
VALLE, (WILFREDO DAHAN, ROGELIO VILLAFUERTE,
respondents.
WILFREDO AMPER, RICARDO ABA, YOLITO AMBUS, FIDEL
CALIO, VICENTE CAHATOL, SOTECO CUENCA, NICOLAS Instant case arose from the following facts:
DALAGUAN, BALBINO FAJARDO, ROLANDO JAMILA,
Early in the morning of April 30, 1985, petitioner's employees
RICARDO LAURETO, RUDY LAURETO, QUIRICO LEJANIO,
stopped working and gathered in a mass action to express their
OSCAR LAPINIG, FELIPE LAURETE, JESUSTUDY OMISOL,
grievances regarding wages, thirteenth month pay and hazard
ZOSIMO OMISOL, PEDRO SUAREZ, SATURNINO SISIBAN
pay. Said employees were all members of the Macajalar Labor
and MANUEL YANEZ), respondents.
Union — Federation of Free Workers (MLU-FFW) with whom
G.R. No. 103599 July 6, 1995 petitioner had an existing collective bargaining agreement.
ADELO EBUNA, WILFREDO DAHAN, RICARDO LAURETO, Petitioner was engaged in stevedoring and arrastre services at
REY VALLE, VICENTE CAHATOL, MARCOS GANZAN, the port of Cagayan de Oro. The strike paralyzed operations at
RODOLFO PEREZ, ROEL SAA, ROGELIO VILLAFUERTE, said port.
MANUEL YANEZ, WILFREDO AMPER, QUIRECO LEJANO,
On the same morning, the strikers filed individual notices of
EMMANUEL VALMORIA, ROLANDO JAMILLA, NICOLAS
strike ("Kaugalingon nga Declarasyon sa Pag-Welga") with the
DALAGUAN, BALBINO FAJARDO, PEDRO SUAREZ, ELPIDIO
then Ministry of Labor and Employment.
ESTROGA, RUBEN PAJO, JESUSTODY OMISOL, RICARDO
ABA, FIDEL CALIO, SATURNINO SESYBAN, RUDY With the failure of conciliation conferences between petitioner
LAURETO, OSCAR LAPINIG, FELIPE LAURENTE, ROGER and the strikers, INPORT filed a complaint before the Labor
ZAGADO, SOTECO CUENCA, FIDEL ESLIT, ZOSIMO Arbiter for Illegal Strike with prayer for a restraining
OMISOL, ANGEL BERNIDO, and MICHAEL order/preliminary injunction.
YAGOTYOT, petitioners,
vs. On May 7, 1985, the National Labor Relations Commission
NATIONAL LABOR RELATIONS COMMISSION, FIFTH issued a temporary restraining order. Thereafter, majority of the
DIVISION, and GOLD CITY INTEGRATED PORT SERVICES, strikers returned to work, leaving herein private respondents
INC. (INPORT), respondents. who continued their protest.2
Counsel for private respondents filed a manifestation that
petitioner required prior screening conducted by the MLU-FFW
ROMERO, J.: before the remaining strikers could be accepted back to work.
Should separation pay and backwages be awarded by public Meanwhile, counsel for the Macajalar Labor Union (MLU-FFW)
respondent NLRC to participants of an illegal strike? This is the filed a "Motion to Drop Most of the Party Respondents From the
core issue to be decided in these two petitions. Above Entitled Case." The 278 employees on whose behalf the
motion was filed, claimed that they were duped or tricked into
Gold City Integrated Port Service, Inc. (INPORT) filed a petition
signing the individual notices of strike. After discovering this
for certiorari against the National Labor Relations Commission
deception and verifying that the strike was staged by a minority
of the union officers and members and without the approval of, separation pay or financial assistance in the nature of "equitable
or consultation with, majority of the union members, they relief." The award for backwages was also deleted for lack of
immediately withdrew their notice of strike and returned to work. factual and legal basis. In lieu of backwages, compensation
equivalent to P1,000.00 was given.
The petitioner INPORT, not having interposed any objection, the
Labor Arbiter, in his decision dated July 23, 1985, granted their The dispositive portion of the assailed Resolution reads:
prayer to be excluded as respondents in the complaint for illegal
WHEREFORE, the resolution of January 14, 1991
strike. Moreover, petitioner's complaint was directed against the
is Modified reducing the award for separation pay to six (6)
31 respondents who did not return to work and continued with
months each in favor of respondents, inclusive of lawful benefits
the strike.
as well as those granted under the CBA, if any, based on the
For not having complied with the formal requirements in Article latest salary of respondents, as and by way of financial
264 of the Labor Code,3 the strike staged by petitioner's workers assistance while the award for backwages is Deleted and Set
on April 30, 1985 was found by the Labor Arbiter to be Aside. In lieu thereof, respondents are granted compensation
illegal.4 The workers who participated in the illegal strike did not, for their sudden loss of employment in the sum of P1,000.00
however, lose their employment, since there was no evidence each. The motion of respondents to implead PPA as third-party
that they participated in illegal acts. After noting that petitioner respondent is Noted. Except for this modification the rest of the
accepted the other striking employees back to work, the Labor decision sought to be reconsidered shall stand. 11
Arbiter held that the private respondents should similarly be
In the instant petitions for certiorari, petitioner alleges that public
allowed to return to work without having to undergo the required
respondent Commission committed grave abuse of discretion in
screening to be undertaken by their union (MLU-FFW).
awarding private respondents separation pay and backwages
As regards the six private respondents who were union officers, despite the declaration that the strike was illegal.
the Labor Arbiter ruled that they could not have possibly been
On the other hand, private respondents, in their petition, assail
"duped or tricked" into signing the strike notice for they were
the reduction of separation pay and deletion of backwages by
active participants in the conciliation meetings and were thus
the NLRC as constituting grave abuse of discretion.
fully aware of what was going on. Hence, said union officers
should be accepted back to work after seeking reconsideration They also allege that the Resolution of January 14, 1991 could
from herein petitioner.5 not be reconsidered after the unreasonable length of time of
eleven months.
The dispositive portion of the decision reads:
Before proceeding with the principal issues raised by the
IN VIEW OF THE FOREGOING, it is hereby ordered that the
parties, it is necessary to clarify public respondent's statements
strike undertaken by the officers and majority union members of
concerning the strike staged by INPORT's employees.
Macajalar Labor Union-FFW is ILLEGAL contrary to Article 264
of the Labor Code, as amended. Our conclusion on the In its resolution dated January 14, 1991, the NLRC held that the
employment status of the illegal strikers is subject to our facts prevailing in the case at bench require a relaxation of the
discussion above.6 rule that the formal requisites for a declaration of a strike are
mandatory. Furthermore, what the employees engaged in was
Both petitioner and private respondents filed motions for
more of a spontaneous protest action than a strike. 12
reconsideration, which public respondent NLRC treated as
appeals.7 Nevertheless, the Commission affirmed the Labor Arbiter's
decision which declared the strike illegal.
On January 14, 1991, the NLRC affirmed with modification8 the
Arbiter's decision. It held that the concerted action by the A strike, considered as the most effective weapon of labor, 13 is
workers was more of a "protest action" than a strike. Private defined as any temporary stoppage of work by the concerted
respondents, including the six union officers, should also be action of employees as a result of an industrial or labor
allowed to work unconditionally to avoid discrimination. dispute. 14 A labor dispute includes any controversy or matter
However, in view of the strained relations between the parties, concerning terms or conditions of employment or the
separation pay was awarded in lieu of reinstatement. The association or representation of persons in negotiating, fixing,
decretal portion of the Resolution reads: maintaining, changing or arranging the terms and conditions of
employment, regardless of whether or not the disputants stand
WHEREFORE, the decision appealed from is Affirmed with
in the proximate relation of employers and employees. 15
modification in accordance with the foregoing resolution.
Complainant INPORT is hereby ordered, in lieu of Private respondents and their co-workers stopped working and
reinstatement, to pay respondents the equivalent of twelve (12) held the mass action on April 30, 1985 to press for their wages
months salaries each as separation pay. Complainant is further and other benefits. What transpired then was clearly a strike, for
ordered to pay respondents two (2) years backwages based on the cessation of work by concerted action resulted from a labor
their last salaries, without qualification or deduction. The appeal dispute.
of complainant INPORT is Dismissed for lack of merit.9
The complaint before the Labor Arbiter involved the legality of
Upon petitioner's motion for reconsideration, public respondent said strike. The Arbiter correctly ruled that the strike was illegal
modified the above resolution on December 12, 1991. 10 for failure to comply with the requirements of Article 264 (now
Article 263) paragraphs (c) and (f) of the Labor Code. 16
The Commission ruled that since private respondents were not
actually terminated from service, there was no basis for The individual notices of strike filed by the workers did not
reinstatement. However, it awarded six months' salary as conform to the notice required by the law to be filed since they
were represented by a union (MLU-FFW) which even had an remaining union officers after the latter sought reconsideration
existing collective bargaining agreement with INPORT. from INPORT. 22
Neither did the striking workers observe the strike vote by secret The NLRC on January 14, 1991, modified the above decision by
ballot, cooling-off period and reporting requirements. ordering INPORT to pay private respondents the equivalent of
twelve months in salary as separation pay in lieu of
As we stated in the case of National Federation of Sugar
reinstatement and two years' backwages. 23
Workers v. Ovejera, 17 the language of the law leaves no room
for doubt that the cooling-off period and the seven-day strike On reconsideration, public respondent modified its original
ban after the strike-vote report were intended to be award and reduced the separation pay to six months, deleted
mandatory. 18 the award for backwages and instead awarded P1,000.00 as
compensation for their sudden loss of employment. 24
Article 265 of the Labor Code reads, inter alia:
Under the law, an employee is entitled to reinstatement and to
(i)t SHALL be unlawful for any labor organization . . . to declare
his full backwages when he is unjustly dismissed. 25
a strike . . . without first having filed the notice required in the
preceding Article or without the necessary strike vote first Reinstatement means restoration to a state or condition from
having been obtained and reported to the Ministry. (Emphasis which one had been removed or separated. Reinstatement and
ours) backwages are separate and distinct reliefs given to an illegally
dismissed employee. 26
In explaining the above provision, we said:
Separation pay is awarded when reinstatement is not possible,
In requiring a strike notice and a cooling-off period, the avowed
due, for instance, to strained relations between employer and
intent of the law is to provide an opportunity for mediation and
employee.
conciliation. It thus directs the MOLE to exert all efforts at
mediation and conciliation to effect a voluntary settlement' It is also given as a form of financial assistance when a worker
during the cooling-off period. . . . is dismissed in cases such as the installation of labor saving
devices, redundancy, retrenchment to prevent losses, closing or
xxx xxx xxx
cessation of operation of the establishment, or in case the
The cooling-off period and the 7-day strike ban after the filing of employee was found to have been suffering from a disease
a strike-vote report, as prescribed in Art. 264 of the Labor Code, such that his continued employment is prohibited by law. 27
are reasonable restrictions and their imposition is essential to
Separation pay is a statutory right defined as the amount that an
attain the legitimate policy objectives embodied in the law. We
employee receives at the time of his severance from the service
hold that they constitute a valid exercise of the police power of
and is designed to provide the employee with the wherewithal
the state. 19
during the period that he is looking for another employment. 28 It
From the foregoing, it is patent that the strike on April 30, 1985 is oriented towards the immediate future, the transitional period
was illegal for failure to comply with the requirements of the law. the dismissed employee must undergo before locating a
replacement job. 29
The effects of such illegal strikes, outlined in Article 265 (now
Article 264) of the Labor Code, make a distinction between Hence, an employee dismissed for causes other than those
workers and union officers who participate therein. cited above is not entitled to separation pay. 30 Well-settled is it
that separation pay shall be allowed only in those instances
A union officer who knowingly participates in an illegal strike where the employee is validly dismissed
and any worker or union officer who knowingly participates in for causes other than serious misconduct or those reflecting on
the commission of illegal acts during a strike may be declared to his moral character. 31
have lost their employment status. 20 An ordinary striking worker
cannot be terminated for mere participation in an illegal strike. Backwages, on the other hand, is a form of relief that restores
There must be proof that he committed illegal acts during a the income that was lost by reason of unlawful dismissal. 32
strike. A union officer, on the other hand, may be terminated
It is clear from the foregoing summary of legal provisions and
from work when he knowingly participates in an illegal strike,
jurisprudence that there must generally be unjust or illegal
and like other workers, when he commits an illegal act during a
dismissal from work, before reinstatement and backwages may
strike.
be granted. And in cases where reinstatement is not possible or
In the case at bench, INPORT accepted the majority of the when dismissal is due to valid causes, separation pay may be
striking workers, including union officers, back to work. Private granted.
respondents were left to continue with the strike after they
Private respondents contend that they were terminated for
refused to submit to the "screening" required by the company. 21
failure to submit to the controversial "screening" requirement.
The question to be resolved now is what these remaining
Public respondent Commission took the opposite view and held:
strikers, considering the circumstances of the case, are entitled
to receive under the law, if any. As the evidence on record will show, respondents were not
actually terminated from the service. They were merely made to
Are they entitled, as they claim, to reinstatement or separation
submit to a screening committee as a prerequisite for
pay and backwages?
readmission to work. While this condition was found not wholly
In his decision, the Labor Arbiter ordered INPORT to justified, the fact remains that respondents who are resistant to
reinstate/accept the remaining workers as well as to accept the such procedure are partly responsible for the delay in their
readmission back to work. Thus, We find justifiable basis in
further modifying our resolution of January 14, 1991 in The union officers are, therefore, not entitled to any relief.
accordance with the equities of the case.
However, the above disquisition is now considered moot and
We shall therefore recall the award for backwages for lack of academic and cannot be effected in view of a manifestation filed
factual and legal basis. The award for separation pay shall by INPORT dated May 15, 1987. 36 In said Manifestation, it
likewise (be) reasonably reduced. Normally, severance benefit attached a Certification by the President of the Macajalar Labor
is granted as an alternative remedy to reinstatement. And since Union (MLU-FFW) to the effect that the private
there is no dismissal to speak of, there is no basis for awarding respondents/remaining strikers have ceased to be members of
reinstatement as a legal remedy. In lieu thereof, We shall grant said union. The MLU-FFW had an existing collective bargaining
herein respondents separation pay as and by way of financial agreement with INPORT containing a union security clause.
assistance in the nature of an "equitable relief". 33 Article 1, Section 2(b) of the CBA provides:
We find that private respondents were indeed dismissed when The corporation shall discharge, dismiss or terminate any
INPORT refused to accept them back to work after the former employee who may be a member of the Union but loses his
refused to submit to the "screening" process. good standing with the Union and or corporation, upon proper
notice of such fact made by the latter; provided, however, . . .
Applying the law (Article 264 of the Labor Code) which makes a
after they shall have received the regular appointment as a
distinction, we differentiate between the union members and the
condition for his continued employment with the
union officers among private respondents in granting the reliefs
corporation. . . . 37
prayed for.
Since private respondents (union members) are no longer
Under Article 264 of the Labor Code, a worker merely
members of the MLU, they cannot be reinstated. In lieu of
participating in an illegal strike may not be terminated from his
reinstatement, which was a proper remedy before May 1987
employment. It is only when he commits illegal acts during a
when they were dismissed from the union, we award them
strike that he may be declared to have lost his employment
separation pay. We find that to award one month salary for
status. Since there appears no proof that these union members
every year of service until 1985, after April of which year they no
committed illegal acts during the strike, they cannot be
longer formed part of INPORT's productive work force partly
dismissed. The striking union members among private
through their own fault, is a fair settlement.
respondents are thus entitled to reinstatement, there being no
just cause for their dismissal. Finally, there is no merit in INPORT's statement that a
Resolution of the NLRC cannot be modified upon
However, considering that a decade has already lapsed from
reconsideration after the lapse of an unreasonable period of
the time the disputed strike occurred, we find that to award
time. Under the present circumstances, a period of eleven
separation pay in lieu of reinstatement would be more practical
months is not an unreasonable length of time. The Resolution of
and appropriate.
the public respondent dated January 14, 1991 did not acquire
No backwages will be awarded to private respondent-union finality in view of the timely filing of a motion for reconsideration.
members as a penalty for their participation in the illegal strike. Hence, the Commission's modified Resolution issued on
Their continued participation in said strike, even after most of December 12, 1991 is valid and in accordance with law.
their co-workers had returned to work, can hardly be rewarded
In sum, reinstatement and backwages or, if no longer feasible,
by such an award.
separation pay, can only be granted if sufficient bases exist
The fate of private respondent-union officers is different. Their under the law, particularly after a showing of illegal dismissal.
insistence on unconditional reinstatement or separation pay and However, while the union members may thus be entitled under
backwages is unwarranted and unjustified. For knowingly the law to be reinstated or to receive separation pay, their
participating in an illegal strike, the law mandates that a union expulsion from the union in accordance with the collective
officer may be terminated from employment. 34 bargaining agreement renders the same impossible.

Notwithstanding the fact that INPORT previously accepted other The NLRC's award of separation pay as "equitable relief" and
union officers and that the screening required by it was uncalled P1,000.00 as compensation should be deleted, these being
for, still it cannot be gainsaid that it possessed the right and incompatible with our findings detailed above.
prerogative to terminate the union officers from service. The
WHEREFORE, from the foregoing premises, the petition in G.R.
law, in using the word may, grants the employer the option of
No. 103560 ("Gold City Integrated Port Service Inc. v. National
declaring a union officer who participated in an illegal strike as
Labor Relations Commission, et al.") is GRANTED. One month
having lost his employment. 35
salary for each year of service until 1985 is awarded to private
Moreover, an illegal strike which, more often than not, brings respondents who were not union officers as separation pay. The
about unnecessary economic disruption and chaos in the petition in G.R. No. 103599 ("Adelo Ebuna, et al. v. National
workplace should not be countenanced by a relaxation of the Labor Relations Commission, et al.") is DISMISSED for lack of
sanctions prescribed by law. merit. No costs.
SO ORDERED
 RCPI v. Phil. Comm.; July 15, 1975

[G.R. No. L-37662. July 15, 1975.]

1. LABOR DISPUTES; IMMEDIATE RESOLUTION; PARTIES
RADIO COMMUNICATIONS OF THE PHILIPPINES, INC.
MAY NOT UNDULY DELAY. — Labor disputes must be decided
(RCPI), Petitioner, v. PHILIPPINE COMMUNICATIONS
on time for the obvious reason that the claimants are not in a
ELECTRONICS & ELECTRICITY WORKERS’ FEDERATION
position to engage in any long-drawn proceedings without risking
(FCWF), RADIO COMMUNICATIONS OF THE PHILIPPINES,
either their wherewithal or other convictions. The courts cannot
INC. EMPLOYEES UNION (RCPIEU), COURT OF INDUSTRIAL
leave the progress of the case to the convenience of the parties,
RELATIONS (CIR), and SPECIAL SHERIFF OF THE COURT OF
particularly the employer who can afford to keep it dragging.
INDUSTRIAL RELATIONS, Respondents.
Accordingly, where the inquiry into the material facts is
unreasonably delayed by unwarranted and unexplained
SYNOPSIS
actuations of any of the parties, no abuse of discretion is
From a decision of this Court directing the execution of a return- committed by the court if it deems the right of the offending party
to-work order issued as far back as 1968, the following incidents to present his factual side of the issue waived.
arose: the petitioner filed a motion for reconsideration on the
ground that the Court did not squarely resolve the issue of 2. ID.; ID.; ID.; CASE AT BAR. — Where as in the case at bar,
whether the respondent court committed grave abuse of petitioner did not submit its offer of exhibits despite many
discretion in issuing the return-to-work order without the formal chances given it, the Court may consider said right to have been
offer of evidence by petitioner; the United RCPI Communications waived and the implementation of the return-to-work order
Labor Association-Philippine Association of Free Labor Unions (unobeyed by petitioner for five years) as amended for resolution.
(URCPICLA-PAFLU) filed a manifestation and a motion for
intervention; and respondent union (RCPIEU) prayed to include in 3. ID.; ID.; ID.; NON-RESOLUTION OF MOTION TO STRIKE
the judgment an award for backwages. OUT OFFER OF EVIDENCE BELATEDLY FILED IS OF NO
CONSEQUENCE. — It is of no consequence that respondent
The Court denied the motion for reconsideration and the motion union’s motion to strike out the offer of evidence belatedly filed,
to intervene and modified its judgment, ruling that: (1) respondent was not resolved by respondent court before submitting for
court did not commit grave abuse of discretion is issuing the resolution the implementation of the return-to-work order. The
order without the formal offer of evidence on the part of the fact of the matter is that said offer had already been deemed
petitioner since petitioner was given several chances to make the waived by the court. Procedurally, therefore, there was no need
offer but he failed to do so:(2) members of intervenor-union were to strike out something that had not been included legally in the
hired in open violation of the order of reinstatement of the record.
Industrial Court and as such they do not have any legal standing
as employees protected by Presidential Decree No. 21; and (3) 4. ID.; EMPLOYEES HIRED IN VIOLATION OF RETURN-TO-
the award for backwages is a logical and inescapable WORK ORDER DO NOT HAVE LEGAL STANDING. — Where
consequence of the order of reinstatement that actually one is the members of the union were hired or employed by the
incomplete without the other. employer in open violation of the order of reinstatement of the
Industrial Court, they can not have any legal standing as
employees protected by Presidential Decree 21. It would be
SYLLABUS absurd if an employer were to be required to seek prior clearance
from the Department of Labor before he can lay-off workers he
has hired as substitutes for strikers subsequently ordered COURTS AND ADMINISTRATIVE AGENCIES. — While a
reinstated by the courts, particularly if the employer has hired counsel is expected to employ all the energies at his command to
said substitutes in violation of a restraining order not to hire defend the rights of his clients and should be commended for his
anyone without the permission of the court. zeal, nonetheless he should be aware that a certain stage in
litigation, the appropriate course is to defer to an order of an
5. ID.; BACKWAGES AS CONSEQUENCE OF inferior court or administrative agency unless duly set aside. The
REINSTATEMENT; AWARD, A MATTER OF COURSE. — rule of law cannot be satisfied with anything less. Nor is there any
Award for backwages is a logical and inescapable consequence justification for a member of the bar indiscriminately seizing upon
of the order of reinstatement that actually one is incomplete any doctrine that might at most yield a colorable appearance of
without the other. Employees and workers deprived of their validity to a legal argument, so that his client would have no
means of livelihood in defiance of a judicial order, the legality of reason to feel that he is less than wholehearted in his handling of
which is beyond dispute, do not have to remind the court of their a case. The honor of the profession requires that on matters of
right to get compensated of their lost earnings upon their actual law, it is a client who should yield to the lawyer and not the other
reinstatement. way around.

6. ID.; ID.; COMPUTATION; RATIONALE. — As held in Feati

University Club v. Feati University, G.R. No. L-35103, August 15,
1974: "As to the amount of backwages, the Court applies the RESOLUTION
precedent recently set in Mercury Drug Co. v. CIR (L-23357) April
30, 1974, applied in NASSCO v. CIR, L-31852 & L-32724, June
28, 1974 and Almira, Et Al., v. BF Goodrich Phil. Inc., L-34974,
July 25, 1974 of fixing the amount of backwages to a just and
BARREDO, J.:
reasonable level without qualification or deduction so as to avoid
protracted delay in the execution of the award of backwages due
to extended hearings and unavoidable delays and difficulties
encountered in determining the earnings of the laid-off employers
ordered to be reinstated with backwages during the pendency of Three incidents arising from Our decision in this case dated
the case for purposes of deducting the same from the gross August 30, 1974: (1) Motion for reconsideration filed by petitioner;
backwages awarded."cralaw virtua1aw library (2) Manifestation and motion for intervention of United RCPI
Communications Labor Association-Philippine Association of
7. ID.; ID.; ID.; ID.; PRINCIPLE APPLIED.—Each of the 167 Free Labor Unions (URCPICLA-PAFLU); and (3) Prayer for a
members of respondent unions in the instant case who were modified judgment filed by respondent union, Philippine
found by the Industrial Court to be entitled to reinstatement Communications, Electronics & Electricity Workers’ Federation,
should be paid backwages for two years, without any deduction RCPI Employees’ Union (RCPIEU).
or qualification, at the respective rates of compensation they were I
receiving at the time of the strike. However, all those who can be
shown by incontestible evidence to have died prior to the date of
the strike shall be disregarded, but the heirs of those who have
died after the strike shall receive the respective proportional In its motion of reconsideration, petitioner suggests that Our
amounts due their predecessors-in-interest as of the time of decision did not resolve squarely the issue of whether or not
death, if the same occured less than two years from date of the respondent Industrial Court gravely abused its discretion in
strike, and the full two-years backwages, if after two years from declaring petitioner, by its order of February 15, 1973, as having
said date. Any amount paid by reason or on the occasion of waived its right to make an offer of its evidence and in forth with
supposed resignation after the strike shall not be deducted. considering the matter of the implementation of the return-to-work
order of April 13, 1968 as directed in the writ of execution of
FERNANDO, J., concurring:chanrob1es virtual 1aw library December 29, 1969 submitted for resolution. It is claimed that this
issue is pivotal, for if it is resolve in its favor, the ordered
1. CONSTITUTIONAL LAW; NON-IMPAIRMENT OF reinstatement of the 167 employees and workers enumerated in
PROTECTION TO LABOR CLAUSE IN CASE AT BAR. — By the respondent court’s order of October 5, 1973 may not be complied
reinstatement of the members of RCPI Employees Union, the with until after the issues of the fact regarding their identity and
temporary employees hired in violation of return-to-work order status as such workers and employees have been reviewed and
who ought to be aware of the transitory character of their passed upon in the light of the evidence offered by petitioner at
employment do not suffer any loss of whatever contractual the hearing. Petitioner invokes Section 20 of the Commonwealth
entered by them with the employer. By reinstatement of the Act 103 together with this Court’s injunction in Ang Tibay v. CIR,
members of RCPI Employees Union there is fealty to the concept 69 Phil. 365,, that the Industrial Court must "use the authorized
of a compassionate society which is even more marked under the legal methods of securing evidence and informing itself of acts
present Constitution. Also, from the constitutional standpoint, that material and relevant to the controversy" in seeing to it "that the
is to render clear that in appropriate cases, the declaration of law is enforced." In other words, petitioner submits that in
principles and state policies have a mandatory force of their own ignoring or refusing to take into account evidence already in the
and are not just mere statements of noble platitudes or glittering record albeit not duly offered, respondent court sacrificed
generalities unrelated to reality. substance for technicality.

2. ATTORNEYS; DEFERENCE TO ORDERS OF INFERIOR In this connection, it may be well to bear in mind, that the reasons
why respondent court felt compelled to act as it did are explained due attention, considering it was undertaking a task of vital public
in its order of February 15, 1973 thus:jgc:chanrobles.com.ph interest, the implementation of a peremptory return-to-work order
it had issued five years back.
"All these aforestated pleadings were set for hearing on January
29, 1973. After the parties made clear their respective positions It is of no consequence that respondent union’s motion to strike
on the issues involved, the Court gave the counsel for respondent out the offer of evidence belatedly filed by petitioner was not
until February 3, 1973 within which to submit his offer of exhibits resolved by respondent court. The fact of the matter is that said
in writing and the counsel for petitioner three (3) days after offer had already been deemed waived by the court.
receipt of the offer in writing within which to file his objections. Procedurally, therefore, there was no need to strike out
Both counsel were also given by the Court ten (10) days from something that had not been included legally in the record.
submission of the objection within which to submit simultaneous
memoranda (t. s. n., pp. 2-6, Jan. 29, 1973). In view of the foregoing considerations, and for the reason that
the arguments of petitioner relative to Presidential Decree No. 21
Considering that February 3, 1973, had already lapsed without have been more than adequately discussed in Our decision,
respondents having as yet submitted its offer of exhibits, despite petitioner’s motion is denied for lack of merit.
the so many chances given to it, there is now valid reason to
II
grant the urgent motion of petitioner." (Page 58, Rollo.)

As We have said in Our decision," (a) bare recital of the above

facts renders undeniable the far-from-commendable efforts of The motion to intervene of URCPICLA-PAFLU is likewise without
petitioner to set at naught a return-to-work order. Considering that merit. Aside from the fact that it had already intervened in the
it is of a peremptory character and its execution was long court below but later on did nothing to protect its pretended rights
overdue, the challenged actuation of respondent court had all the relative to the orders assailed here, on the merits, its position
earmarks of legality." It is not true then that We have not resolved suffers from the same fatal defect of the motion for
the issue referred to. Indeed, all that need be added here is that reconsideration of petitioner in that it is premised on erroneous
while it is true that labor cases, especially those involving claims assumptions regarding the objective and purpose of Presidential
for compensation due the workers, must be resolved on the basis Decree No. 21. The members of movant union were hired or
of all material facts, and it is the inescapable duty of all parties employed by petitioner in open violation of the order of
concerned, including the court, to disregard all technical rules in reinstatement of the Industrial Court and as such they cannot
barring 1 and discovering them, on the other hand, it is as have any legal standing as employees protected by said
important that said cases must be decided on time for the Presidential Decree. It would be absurd if an employer were to be
obvious reason that the claimants are not in a position to engage required to seek prior clearance from the Department of Labor
in any long drawn proceedings without risking either their before he can layoff workers he has hired as substitutes for
wherewithal or their convictions. The Courts cannot leave the strikers subsequently ordered reinstated by the courts,
progress of the case to the convenience of the parties, particularly if the employer has, as in the instant case, hired said
particularly, the employer who can afford to keep it dragging. substitutes in violation of a restraining order not to hire anyone
Accordingly, where the inquiry into the material facts is without the permission of the court. The motion to intervene is,
unreasonably delayed by unwarranted and unexplained therefore, denied.
actuations of any of the parties, no abuse of discretion is
committed by the court if it deems the right of such offending III
party to present his factual side of the issue waived.

This is particularly true in the case at bar, for, as the record It is the plea of respondent unions for modification of Our decision
shows, the order of reinstatement which has remained unobeyed that deserves favorable consideration. The prayer is for Us to
by petitioner to this day was issued more than seven years ago include in the judgment an award of backwages to the employees
and was in fact already nearing five years old when the above- and laborers concerned, in addition to their immediate
quoted order of February 15, 1973 had to be issued in reinstatement. The plea is opposed by petitioner upon the ground
exasperation by respondent court. The duty of the court spoken that the issue of payment of backwages was neither raised in nor
of in Ang Tibay to ferret out all facts necessary for the just passed upon by the Industrial Court and is, in fact, not even
determination of the rights of the parties without regard to touched in the previous pleadings of the parties in the instant
technical rules ceases when the court is disabled by the very case. Additionally, it is averred that the matter is now actually
indifference and inattention, if not disregard, of a party of the being looked into by the National Labor Relations Board, hence it
orders of the court designed to expedite proceedings already is not necessary for this Court to take it up.
being protracted through maneuvers of the same party.
We are of the considered opinion that, indeed, the award prayed
Besides, it is noteworthy that petitioner did not even care to move for is in order. The fact that nothing was done in the court below
for the reconsideration of the order in question. Taking the court about it is not a valid objection to the granting thereof. Neither
for granted, it merely went ahead and made its required offer of can its denial be justified just because it was not expressly
evidence, at long last, eighteen days late. If only to make all and demanded by respondents before Our decision was handed
sundry understand that no one can thus trifle with the court with down. Such award is such a logical and inescapable
impunity, petitioner should suffer the consequences of its patent consequence of the order of reinstatement that actually one is
lack of diligence in the protection of its interest which it has incomplete without the other.
coupled with inexplicable failure to accord the orders of the court
We are not dealing here with backwages to be paid to workers recently set in Mercury Drug Co. v. CIR (L-23357, April 30, 1974,
who are being ordered reinstated as a consequence of a finding applied in NASSCO v. CIR, L-31852 & L-32724, June 28, 1974
by the court that their suspension or dismissal by their employer and Almira, Et. Al. v. B. F. Goodrich Phil., Inc., L-34974, July 25,
is illegal, which, of course, is dependent on the sound discretion 1974.) of filing the amount of backwages to a just and reasonable
of the court. (Union of Philippine Education Employees v. level without qualification or deduction so as to avoid protracted
Philippine Education Company, 91 Phil. 93.) In the present delay in the execution of the award for backwages due to
instance, what is involved is a failure to comply with, nay a veiled extended hearings and unavoidable-delays and difficulties
defiance by respondent of a return-to-work order of the Industrial encountered in determining the earnings of the laid-off employees
Court issued seven years ago. Worse, from all appearances, ordered to be reinstated with backwages during the pendency of
such continued resistance of petitioner to said peremptory order the case for purposes of deducting the same from the gross
can hardly evoke sympathy. To begin with, its attempt to question backwages awarded.
the identity of those entitled to reinstatement claiming that they
were not actually in their employ at the time of the declaration of "As has been noted, this formula of awarding reasonable net
the strike sounds hollow. It is inconceivable that strangers and backwages without deduction or qualification relieves the
outsiders would try to be taken in in such a surreptitious manner. employees from proving or disproving their earning during their
Neither can the allegation that petitioner has presented evidence lay-off and the employers from submitting counterproofs, and
of abandonment prior to the strike and of resignations obviates the twin evils of idleness on the part of the employee
subsequent thereto be of help to petitioner. Voluntary who would ‘with folded arms, remain inactive in the expectation
abandonment of work before a strike is too unusual to be readily that a windfall would come to him’ (Itogon Suyoc Mines, Inc. v.
credible whereas purported resignations after a strike and during Sangilo-Itogon Workers Union, 24 SCRA 873 (1968), cited in
the pendency of protracted reinstatement proceedings are at Diwa ng Pagkakaisa v. Filtex International Corp., 43 SCRA 287
least suspect and do not affect the employee status of the (1972) per Makalintal, now C.J.) and attrition and protracted delay
persons concerned, unless there is patent evidence that the in satisfying such award on the part of unscrupulous employers
pretended abandonment or resignation was due to another who have seized upon the further proceedings to determine the
employment. 2 Moreover, the proceedings below had been actual earnings of the wrongfully dismissed or laid-off employees
stalled by transparent dilatory moves of petitioner which are to hold unduly extended hearings for each and every employee
basically irreconcilable with the attitude of cooperativeness and awarded backwages and thereby render practically nugatory
obedience an employer is expected to maintain at all times such award and compel the employees to agree to
towards orders of the court issued by virtue of powers expressly unconscionable settlements of their backwages award in order to
granted to it by law. (Section 10, Republic Act 875; Section 19, satisfy their dire need. (See La Campana Food Products, Inc. v.
Commonwealth Act 103.). CIR, 28 SCRA 314 (1969) and Kaisahan ng Mga Manggagawa v.
La Campana Food Products, Inc., 36 SCRA 142 (1970)."cralaw
The Industrial Court had no discretion in the matter. There was virtua1aw library
no controversial issue of fault it had to decide. It was a plain case
of exacting the most natural sanction for a defiance of its order. If This formula of making a flat award for a given period has been
it overlooked the award, seemingly engrossed as it was in adopted in subsequent cases. 3 Accordingly, each of the 167
resolving the issue of identity of the strikers raised by petitioner, members of respondent unions named in the decision under
that was plain error which it is within Our prerogative to correct review and found by the Industrial Court to be entitled to
motu propio, as We do in appeals by writ of error in respect to a reinstatement should be paid backwages for two years, without
manifest error not assigned nor discussed by appellant in his any deduction or qualification, at the respective rates of
brief. (Section 7, Rule 51.) Employees and workers deprived of compensation they were receiving at the time of the strike,
their means of livelihood in defiance of a judicial order the legality November 17, 1967. It goes without saying that all those who can
of which is beyond dispute do not have to remind the court of be shown by incontestible evidence to have died prior to the date
their right to get compensated of their lost earnings upon their of the strike shall be disregarded, but the heirs of those who have
actual reinstatement, Award thereof should come as a matter of died after the strike shall receive the respective proportional
course. For Us not to rule on this point now only to leave it for amounts due their predecessors-in-interest as of the time of
action by the National Labor Relations Board and thereby give death, if the same occurred less than two years from the date of
rise to another possible appeal to Us is to unnecessarily lengthen the strike, and the full two-years backwages, if after two years
even more the tortuous road already travelled by respondents in from said date. Any amount paid by reason or on the occasion of
their effort to get what has been rightfully due them since years supposed resignations after the strike shall not be deducted.
ago. We would be recreant to our constitutional duty to give
protection to labor that way. Before closing, it must be mentioned that the Court understands
that notwithstanding that its decision of August 30, 1974 is
IV
immediately executory, the employees concerned have not yet
been reinstated up to now. Petitioner is warned that the pendency
of the present incidents is no excuse for its failure to comply
Taking all circumstances of this case into account, We find no immediately with said decision and appropriate action would have
justifiable reason why We cannot apply here in respect to the to be taken to protect the dignity of the court, if such attitude
amount of the award the ruling in Feati University Club v. Feati continues.
University, G. R. No. L-35103, Aug. 15, 1974, wherein We
said:jgc:chanrobles.com.ph WHEREFORE, the motion for reconsideration of petitioner dated
September 16, 1974 as well as the motion to intervene of
"As to the amount of backwages, the Court applies the precedent URCPICLA-PAFLU of October 16, 1974 are both denied for lack
of merit. On the other hand, the motion of respondent RCPIEU of plausibility. As is made clear in the resolution, it could not survive
November 6, 1974 for modification of judgment is granted, if only the test of a rigorous analysis. What is more, it was previously
to complete Our decision, which cannot be final without such considered and rejected as set forth in Justice Barredo’s opinion.
award being included therein. Petitioner is ordered to pay the 167 Nonetheless, several sessions were devoted to considering the
employees and workers of petitioner enumerated in the Industrial motion for intervention and the modification of the decision. When
Court’s order of October 5, 1973 backwages for two v ears, a consensus was reached, it was apparent that the approach
without any deduction or qualification, pursuant to the tenor of the followed by Justice Barredo was the focal point on which all could
above opinion. This resolution is also immediately executory. agree. It was deemed best therefore for him to speak for the rest
of us.
Antonio, Aquino and Concepcion Jr., JJ., concur.
2. It is readily apparent that with insistence of petitioner on the
Separate Opinions
claim of an alleged denial of procedural due process being
FERNANDO, J., concurring:chanrob1es virtual 1aw library indicative not so much of reliance on applicable precedents but
as a further excuse for delay, what did call for further reflection
It has been observed, and not without justification, that the was the motion to intervene of a union representing the
solution of labor controversies taxes to the utmost the ingenuity of temporary employees of petitioner and the plea for the
courts and arbiters for what may serve to do justice in the implementation of the decision rendered so that an award of
instance may later prove to be inconvenient of later application to backwages be granted. Candor compels the admission that there
analogous fact situations. For in no other kind of litigation is there were some misgivings on my part as to the possible adverse
a greater need for sizing up situations, very often unique in consequences to the farmer set of workers once the order for
character and thus not likely to repeat themselves. Care is to be reinstatement is implemented. If it were a case solely of
taken therefore that while the conclusion reached in any litigation management being made to bear the burden for failure to
with its essentially peculiar circumstances may commend itself, implement an order of respondent Court, then no problem arises.
the doctrine announced does not deviate from the main stream of It was its fault and it had no one else to blame. Certainly it could
juristic thought. It is to the credit of the opinion of Justice Barredo and should be held accountable. Nonetheless, as pointed out in
that there is adherence to prescribed norms governing labor- our resolution, the temporary labor force ought to have been
management relations. It is impressed with an even greater aware of the transitory character of their employment. At any rate,
significance for it manifests in no uncertain terms that this Court I do not think that our resolution can he construed to mean any
is not likely to tolerate such conduct as that displayed by loss of whatever contractual right may have been entered by
petitioner when all these past years it persistently refused to obey them with petitioner. That is a matter which to my mind is not
respondent Court’s order for immediate reinstatement. Such covered by what is decided today. It is in that sense that for me
intransigence is unjustified even if sought to be cloaked under a there is no possible objection to the ground that the protection to
claim of a denial of procedural due process. Such behavior is labor is less than it should be 4 or that the principle of social
antithetical to the rule of law. What was stressed in Philippine justice is disregarded. 5 On this point, what for me is most
Associations of Free Labor Unions v. Salvador 1 comes to mind. creditable in our resolution is that the long-suffering employees
Thus: "Law stands for order, for the peaceful and systematic and laborers, who in the past has been battling in vain against the
adjustment of frictions and conflicts unavoidable in a modern wall of resistance put up by petitioner, would at long last receive
society with its complexities and clashing interests. The their due. Once again. there is fealty to the concept of a
instrumentality for such balancing or harmonization is the compassionate society which is even more marked under the
judiciary and other agencies exercising quasi-judicial powers. present Constitution. 6 Also, from the constitutional standpoint,
When judicial or quasi-judicial tribunals speak, what they decree that is to render clear that in appropriate cases, the declaration of
must be obeyed, what they ordain must be followed. A party principles and state policies 7 have a mandatory force of their
dissatisfied may ask for a reconsideration and, if denied, may go own and are not just mere statements of noble platitudes or
on to a higher tribunal. As long as the orders stand unmodified, glittering generalities unrelated to reality.
however, they must, even if susceptible to well-founded doubts
on jurisdictional grounds, be faithfully complied with." 2 At the 3. One last word. There is, of course, the expectation that
very least, petitioner ought to have complied if not at the first counsel should employ all the energies at one’s command in the
opportunity, after it was notified of our decision promulgated on defense of the rights of his clients. His zeal is to be commended.
August 30, 1974. 3 It did not turn out that way. Our resolution He will not be true to his calling if such qualities are lacking in his
then appropriately takes it to task. I concur and add a few words. advocacy. Nonetheless, there should be awareness likewise that
at a certain stage in litigation, the appropriate course, as a matter
1. At the outset, may I refer to what led our Division to assign of fact the only course, is to defer to an order of an inferior court
another member to pen the resolution, when the usual practice is or administrative agency unless duly set aside. The rule of law, to
for the ponente to speak for the Tribunal in passing upon a repeat, cannot be satisfied with anything less. Nor is there any
motion for reconsideration. As set forth by Justice Barredo in his justification for a member of the bar indiscriminately seizing upon
opening paragraph, three pleadings were filed after the any doctrine that might at most yield a colorable appearance of
promulgation of our judgment: (1) the motion for reconsideration validity to a legal argument, so that his client would have no
filed by petitioner, (2) the manifestation and motion for reason to feel that he is less than wholehearted in his handling of
intervention of United RCPI Communications Labor Association, a case. The honor of the profession requires that on matters of
and (3) the motion for modification of the decision filed by law, it is a client who should yield to the lawyer and not the other
respondent union. The points of law raised did call for further way around.
study. The allegation of denial of procedural due process has had
to be inquired into, even if impressed at the most with deceptive
There is on my part, to repeat, full agreement with what has been so ably and clearly said by Justice Barredo.

Kiok Loy v. NLRC; Jan. 22, 1986

KIOK LOY, doing business under the name and style SWEDEN Pambansang Kilusan ng Paggawa (Union for short), a
ICE CREAM PLANT, Petitioner, v. NATIONAL LABOR legitimate labor federation, won and was subsequently certified
RELATIONS COMMISSION (NLRC) and PAMBANSANG in a resolution dated November 29, 1978 by the Bureau of
KILUSAN NG PAGGAWA (KILUSAN), Respondents. Labor Relations as the sole and exclusive bargaining agent of
the rank-and-file employees of Sweden Ice Cream Plant
Ablan and Associates for Petitioner. (Company for short). The Company’s motion for reconsideration
of the said resolution was denied on January 25, 1978.
Abdulcadir T. Ibrahim for Private Respondent.
Thereafter, and more specifically on December 7, 1978, the
DECISION
Union furnished 4 the Company with two copies of its proposed
CUEVAS, J.: collective bargaining agreement. At the same time, it requested
the Company for its counter proposals, Eliciting no response to
Petition for CERTIORARI to annul the decision 1 of the National the aforesaid request, the Union again wrote the Company
Labor Relations Commission (NLRC) dated July 20, 1979 which reiterating its request for collective bargaining negotiations and
found petitioner Sweden Ice Cream guilty of unfair labor for the Company to furnish them with its counter proposals.
practice for unjustified refusal to bargain, in violation of par. (g) Both requests were ignored and remained unacted upon by the
of Article 249 2 of the New Labor Code, 3 and declared the draft Company.
proposal of the Union for a collective bargaining agreement as
the governing collective bargaining agreement between the Left with no other alternative in its attempt to bring the Company
employees and the management. to the bargaining table, the Union, on February 14, 1979, filed a
"Notice of Strike", with the Bureau of Labor Relations (BLR) on
The pertinent background facts are as follows:chanrob1es ground of unresolved economic issues in collective bargaining.
virtual 1aw library 5

In a certification election held on October 3, 1978, the Conciliation proceedings then followed during the thirty-day
statutory cooling-off period. But all attempts towards an finding of unfair labor practice for refusal to bargain is not
amicable settlement failed, prompting the Bureau of Labor supported by law and the evidence considering that it was only
Relations to certify the case to the National Labor Relations on May 24. 1979 when the Union furnished them with a copy of
Commission (NLRC) for compulsory arbitration pursuant to the proposed Collective Bargaining Agreement and it was only
Presidential Decree No. 823, as amended. The labor arbiter, then that they came to know of the Union’s demands; and
Andres Fidelino, to whom the case was assigned, set the initial finally, that the Collective Bargaining Agreement approved and
hearing for April 29, 1979. For failure however, of the parties to adopted by the National Labor Relations Commission is
submit their respective position papers as required, the said unreasonable and lacks legal basis.
hearing was cancelled and reset to another date. Meanwhile,
the Union submitted its position paper. The Company did not, The petition lacks merit. Consequently, its dismissal is in order.
and instead requested for a resetting which was granted. The
Company was directed anew to submit its financial statements Collective bargaining which is defined as negotiations towards a
for the years 1976, 1977, and 1978. collective agreement, 6 is one of the democratic frameworks
under the New Labor Code, designed to stabilize the relation
The case was further reset to May 11, 1979 due to the between labor and management and to create a climate of
withdrawal of the Company’s counsel of record, Atty. Rodolfo sound and stable industrial peace. It is a mutual responsibility of
dela Cruz. On May 24, 1978, Atty. Fortunato Panganiban the employer and the Union and is characterized as a legal
formally entered his appearance as counsel for the Company obligation. So much so that Article 249, par. (g) of the Labor
only to request for another postponement allegedly for the Code makes it an unfair labor practice for an employer to refuse
purpose of acquainting himself with the case. Meanwhile, the "to meet and convene promptly and expeditiously in good faith
Company submitted its position paper on May 28, 1979. for the purpose of negotiating an agreement with respect to
wages, hours of work, and all other terms and conditions of
When the case was called for hearing on June 4, 1979 as employment including proposals for adjusting any grievance or
scheduled, the Company’s representative, Mr. Ching, who was question arising under such an agreement and executing a
supposed to be examined, failed to appear. Atty. Panganiban contract incorporating such agreement, if requested by either
then requested for another postponement which the labor party."cralaw virtua1aw library
arbiter denied. He also ruled that the Company has waived its
right to present further evidence and, therefore, considered the While it is a mutual obligation of the parties to bargain, the
case submitted for resolution. employer, however, is not under any legal duty to initiate
contract negotiation. 7 The mechanics of collective bargaining is
On July 18, 1979, labor arbiter Andres Fidelino submitted its set in motion only when the following jurisdictional preconditions
report to the National Labor Relations Commission. On July 20, are present, namely, (1) possession of the status of majority
1979, the National Labor Relations Commission rendered its representation of the employees’ representative in accordance
decision, the dispositive portion of which reads as follows: with any of the means of selection or designation provided for
by the Labor Code; (2) proof of majority representation; and (3)
a demand to bargain under Article 251, par. (a) of the New
"WHEREFORE, the respondent Sweden Ice Cream is hereby
Labor Code . . . all of which preconditions are undisputedly
declared guilty of unjustified refusal to bargain, in violation of
present in the instant case.
Section (g) Article 248 (now Article 249), of P.D. 442, as
amended. Further, the draft proposal for a collective bargaining
From the over-all conduct of petitioner company in relation to
agreement (Exh. "E") hereto attached and made an integral part
the task of negotiation, there can be no doubt that the Union
of this decision, sent by the Union (Private respondent) to the
has a valid cause to complain against its (Company’s) attitude,
respondent (petitioner herein) and which is hereby found to be
the totality of which is indicative of the latter’s disregard of, and
reasonable under the premises, is hereby declared to be the
failure to live up to, what is enjoined by the Labor Code — to
collective agreement which should govern the relationship
bargain in good faith.
between the parties herein.
We are in total conformity with respondent NLRC’s
SO ORDERED." (Words in parenthesis supplied)
pronouncement that petitioner Company is GUILTY of unfair
labor practice. It has been indubitably established that (1)
Petitioner now comes before Us assailing the aforesaid decision
respondent Union was a duly certified bargaining agent; (2) it
contending that the National Labor Relations Commission acted
made a definite request to bargain, accompanied with a copy of
without or in excess of its jurisdiction or with grave abuse of
the proposed Collective Bargaining Agreement, to the Company
discretion amounting to lack of jurisdiction in rendering the
not only once but twice which were left unanswered and
challenged decision. On August 4, 1980, this Court dismissed
unacted upon; and (3) the Company made no counter proposal
the petition for lack of merit. Upon motion of the petitioner,
whatsoever all of which conclusively indicate lack of a sincere
however, the Resolution of dismissal was reconsidered and the
desire to negotiate. 8 A Company’s refusal to make counter
petition was given due course in a Resolution dated April 1,
proposal if considered in relation to the entire bargaining
1981.
process, may indicate bad faith and this is specially true where
the Union’s request for a counter proposal is left unanswered. 9
Petitioner Company now maintains that its right to procedural
Even during the period of compulsory arbitration before the
due process has been violated when it was precluded from
NLRC, petitioner Company’s approach and attitude — stalling
presenting further evidence in support of its stand and when its
the negotiation by a series of postponements, non-appearance
request for further postponement was denied. Petitioner further
at the hearing conducted, and undue delay in submitting its
contends that the National Labor Relations Commission’s
financial statements, lead to no other conclusion except that it is is not prepared to affix its imprimatur to such an illegal scheme
unwilling to negotiate and reach an agreement with the Union. and dubious maneuvers.
Petitioner has not at any instance, evinced good faith or
willingness to discuss freely and fully the claims and demands Neither are WE persuaded by petitioner-company’s stand that
set forth by the Union much less justify its opposition thereto. 10 the Collective Bargaining Agreement which was approved and
adopted by the NLRC is a total nullity for it lacks the company’s
The case at bar is not a case of first impression, for in the consent, much less its argument that once the Collective
Herald Delivery Carriers Union (PAFLU) v. Herald Publications Bargaining Agreement is implemented, the Company will face
11 the rule had been laid down that "unfair labor practice is the prospect of closing down because it has to pay a staggering
committed when it is shown that the respondent employer, after amount of economic benefits to the Union that will equal if not
having been served with a written bargaining proposal by the exceed its capital. Such a stand and the evidence in support
petitioning Union, did not even bother to submit an answer or thereof should have been presented before the Labor Arbiter
reply to the said proposal. This doctrine was reiterated anew in which is the proper forum for the purpose.
Bradman v. Court of Industrial Relations 12 wherein it was
further ruled that "while the law does not compel the parties to We agree with the pronouncement that it is not obligatory upon
reach an agreement, it does contemplate that both parties will either side of a labor controversy to precipitately accept or
approach the negotiation with an open mind and make a agree to the proposals of the other. But an erring party should
reasonable effort to reach a common ground of agreement." not be tolerated and allowed with impunity to resort to schemes
feigning negotiations by going through empty gestures. 13 More
As a last-ditch attempt to effect a reversal of the decision so, as in the instant case, where the intervention of the National
sought to be reviewed, petitioner capitalizes on the issue of due Labor Relations Commission was properly sought for after
process claiming, that it was denied the right to be heard and conciliation efforts undertaken by the BLR failed. The instant
present its side when the Labor Arbiter denied the Company’s case being a certified one, it must be resolved by the NLRC
motion for further postponement. pursuant to the mandate of P.D. 873, as amended, which
authorizes the said body to determine the reasonableness of
Petitioner’s aforesaid submittal failed to impress Us. the terms and conditions of employment embodied in any
Considering the various postponements granted in its behalf, Collective Bargaining Agreement. To that extent, utmost
the claimed denial of due process appeared totally bereft of any deference to its findings of reasonableness of any Collective
legal and factual support. As herein earlier stated, petitioner had Bargaining Agreement as the governing agreement by the
not even honored respondent Union with any reply to the latter’s employees and management must be accorded due respect by
successive letters, all geared towards bringing the Company to this Court.
the bargaining table. It did not even bother to furnish or serve
the Union with its counter proposal despite persistent requests WHEREFORE, the instant petition is DISMISSED. The
made therefor. Certainly, the moves and overall behavior of temporary restraining order issued on August 27, 1980, is
petitioner-company were in total derogation of the policy LIFTED and SET ASIDE. No pronouncement as to costs.
enshrined in the New Labor Code which is aimed towards
expediting settlement of economic disputes. Hence, this Court SO ORDERED.
ZAPANTA, RUSTICO L. DIOKNO, LOURDES C. JAVIER,
IRINEO B. BARNALDO, ROGELIO I. RAYALA, ERNESTO G.
LADRINO III, IRENEA E. CENIZA, BERNABE S. BATUHAN,
5. Mayor v. Macaraig; March 5, 1991 MUSIB M. BUAT, L.B. GONZAGA, JR. and OSCAR
ABELLA, Respondents.
[G.R. No. 87211. March 5, 1991.]
[G.R. No. 91730. March 5, 1991.]
JOVENCIO L. MAYOR, Petitioner, v. HON. CATALINO
MACARAIG, HON. GUILLERMO CARAGUE, HON. RIZALINA JOVENCIO L. MAYOR, Petitioner, v. HON. CATALINO
CAJUCOM, HON. FRANKLIN DRILON, Respondents. LOURDES MACARAEG, HON. GUILLERMO CARAGUE, HON. RIZALINA
A. SALES and RICARDO OLAIREZ, Petitioners-Intervenors. CAJOCUM, and the HONORABLE SECRETARY OF
LABOR, Respondents.
[G.R. No. 90044. March 5, 1991.]
[G.R. No. 94518. March 5, 1991.]
PASCUAL V. REYES, Petitioner, v. HON. FRANKLIN
DRILON, Respondents. ROLANDO D. GAMBITO, Petitioner, v. THE SECRETARY OF
LABOR AND EMPLOYMENT and THE EXECUTIVE
[G.R. No. 91547. March 5, 1991.] SECRETARY, Respondents.

CEFERINO E. DULAY, ROSARIO G. ENCARNACION and Ma. Luisa Y . Cortes for petitioner-intervenor Sales in G.R. No.
DANIEL LUCAS, JR., Petitioner, v. HON. CATALINO 87211.
MACARAIG, JR., as Executive Secretary, HON. GUILLERMO N.
CARAGUE, as Secretary of Budget and Management, HON. Jose C . Espinas for petitioners in G.R. Nos. 90044 & 91730.
DIONISIO DE LA SERNA, as Acting Secretary of Labor &
Employment, BARTOLOME CARALE, VICENTE S.E. VELOSO Magtanggol C . Gunigundo for petitioners in G.R. No. 91547.
III, ROMEO B. TUOMO, EDNA BONTO PEREZ, DOMINGO H.
 changing the official stations of the Commission’s divisions; and
even those prescribing higher or other qualifications for the
SYLLABUS
positions of Commissioner which, if at all, should operate only
prospectively, not to mention the fact that the petitioners (in G.R.
No. 91547) have asserted without dispute that they possess the
1. CONSTITUTIONAL LAW; BILL OF RIGHTS; SECURITY OF new qualifications — none of these can be said to work so
TENURE; SCOPE. — Security of tenure is a protected right under essential or radical a revision of the nature, powers and duties of
the Constitution. The right is secured to all employees in private the NLRC as to justify a conclusion that the Act in truth did not
as well as in public employment. "No officer or employee in the merely declare vacant but actually abolished the offices of
civil service," the Constitution declares, "shall be removed or commissioners and created others in their place.
suspended except for cause provided by law."cralaw virtua1aw
library 6. ID.; ID.; DID NOT ABOLISH THE POSITIONS OF LABOR
ARBITERS; INCUMBENTS CONSTITUTIONALLY
2. ID.; ID.; ID.; ABOLITION OF OFFICE; A RECOGNIZED GUARANTEED SECURITY OF TENURE CANNOT BE
CAUSE FOR REMOVAL OR TERMINATION OF EMPLOYMENT. DEFEATED BY THE PROVISION FOR HIGHER OR OTHER
— A recognized cause for removal or termination of employment QUALIFICATIONS THAN WERE PRESCRIBED UNDER THE
of a Government officer or employee is the abolition by law of his OLD LAW. — Similar considerations yield the same conclusion as
office as a result of reorganization carried out by reason of far as the positions of Labor Arbiters are concerned, there being
economy or to remove redundancy of functions, or clear and no essential inconsistency on that score between Republic Act
explicit constitutional mandate for such termination of No. 6715 and the old law. The Labor Arbiters continue to exercise
employment. the same basic power and function: the adjudication, in the first
instance, of certain classes of labor disputes. Their original and
3. ID.; ID.; ID.; ID.; A PREROGATIVE OF THE LEGISLATURE; exclusive jurisdiction remains substantially the same under both
QUALIFICATION. — Abolition of an office is obviously not the the old law and the new. Again, their incumbents’ constitutionally
same as the declaration that office is vacant. While it is guaranteed security of tenure cannot be defeated by the provision
undoubtedly a prerogative of the legislature to abolish certain for higher or other qualifications than were prescribed under the
offices, it can not be conceded the power to simply pronounce old law; said provision can only operate prospectively and as to
those offices vacant and thereby effectively remove the new appointees to positions and Deputy Executive Director, or
occupants or holders thereof from the civil service. Such an act that anything inheres in these positions that would preclude their
would constitute, on its face, an infringement of the constitutional incumbents from being named Executive Clerk and Deputy
guarantee of security of tenure, and will have to be struck down Executive Clerks.
on that account. It can not be justified by the professed "need to
professionalize the higher levels of officialdom invested with 8. ID.; ID.; COMMISSIONERS’ INCUMBENTS’ REMOVAL IN
adjudicatory powers and functions, and to upgrade their CASE AT BAT IS UNCONSTITUTIONAL AND VOID; PAYMENT
qualifications, ranks, and salaries or emoluments."cralaw OF ALL SALARIES, BENEFITS AND EMOLUMENTS
virtua1aw library ACCRUING TO THEM FOR THE UNEXPIRED PORTIONS OF
THEIR SIX-YEAR TERMS AND RETIREMENT BENEFITS,
4. ID.; ID.; ID.; ID.; NEITHER EXPRESS NOR IMPLIED IN RA ORDERED. — The removal of petitioners as Commissioners of
6715. — It is immediately apparent that there is no express the NLRC is ruled unconstitutional and void; however, to avoid
abolition in RA 6715 of the petitioners’ positions. So, justification displacement of any of the incumbent Commissioners now
must be sought, if at all, in an implied abolition thereof; i.e., that serving, it not appearing that any of them is unfit or has given
resulting from an irreconcilable inconsistency between the nature, cause for removal, and conformably to the alternative prayer of
duties and functions of the petitioners’ offices under the old rules the petitioners themselves, it is ORDERED that said petitioners
and those corresponding thereto under the new law. An be paid all salaries, benefits and emoluments accruing to them for
examination of the relevant provisions of RA 6715, with a view to the unexpired portions of their six-year terms and allowed to enjoy
discovering the changes thereby effected on the nature, retirement benefits under applicable laws, pursuant to RA No. 910
composition, powers, duties and functions of the Commission and and this Court’s Resolution in Ortiz v. Commission on Elections,
the Commissioners, the Executive Director, the Deputy Executive G.R. No. 79857, 161 SCRA 812.
Director, and the Labor Arbiters under the prior legislation, fails to
disclose such essential inconsistencies. 9. ID.; ID.; NLRC EXECUTIVE DIRECTOR AND DEPUTY
EXECUTIVE DIRECTOR; INCUMBENTS’ REMOVAL IN CASE
5. LABOR AND SOCIAL LEGISLATIONS; REPUBLIC ACT NO. AT BAR IS UNCONSTITUTIONAL AND VOID;
6715, AMENDING THE LABOR CODE (P.D. 441); DID NOT REINSTATEMENT AS EXECUTIVE CLERK AND DEPUTY
ABOLISH THE NATIONAL LABOR RELATIONS COMMISSION EXECUTIVE CLERK, RESPECTIVELY, WITH OPTION TO
(NLRC), OR CHANGE ITS CHARACTER AS A SUPERVISORY RETIRE, IN EITHER CASE WITH FULL BACK SALARIES,
AND ADJUDICATORY BODY. — Republic Act No. 6715 not EMOLUMENTS AND BENEFITS, ORDERED. — The removal of
abolish the NLRC, or change its essential character as a petitioner Pascual Y. Reyes and petitioner-in-intervention Eugenio
supervisory and adjudicatory body. Under said Act, as under the L. Sagmit, Jr. as NLRC Executive Director and Deputy Executive
former law, the NLRC continues to act collegially, whether it Director, respectively, is likewise declared uuconstitutional and
performs administrative or rule-making functions or exercises void, and they are ordered reinstated as Executive Clerk and
appellate jurisdiction to review decisions and final orders of the Deputy Executive Clerk, respectively, unless they opt for
Labor Arbiters. The provisions conferring a somewhat greater retirement, in either case with full back salaries, emoluments and
measure of autonomy; requiring that its membership be drawn benefits from the date of their removal to that of their
from tripartite sectors (workers, employees and the public sector);
reinstatement.
Jovencio Ll. Mayor, a member of the Philippine Bar for fifteen (15)
10. ID.; ID.; LABOR ARBITERS; INCUMBENTS’ REMOVAL IS years, was appointed Labor Arbiter in 1986 after he had,
ILLEGAL; REINSTATEMENT WITH FULL BACK SALARIES, according to him, met the prescribed qualifications and passed "a
EMOLUMENTS AND BENEFITS, ORDERED. — Petitioners- rigid screening process." Fearing that he would be removed from
intervenors Lourdes A. Sales and Ricardo Olairez and petitioner office on account of the expected reorganization, he filed in this
Rolando D. Gambito, having also been illegally removed as Labor Court the action now docketed as G.R. No. 87211. His fears
Arbiters, are ordered reinstated to said positions with full back proved groundless, however. He was in fact reappointed a Labor
salaries, emoluments and benefits from the dates of their removal Arbiter on March 8, 1990. Hence, as he himself says, the case
up to the time they are reinstated. became moot as to him.chanrobles lawlibrary : rednad
DECISION
Like Mayor, both intervenors Lourdes A. Sales and Ricardo N.
Olairez were appointed Labor Arbiters in 1986, but unlike Mayor,
NARVASA, J.: were not among the one hundred fifty-one (151) Labor Arbiters
reappointed by the President on March 8, 1990.

G.R. No. 90044; Pascual Y . Reyes; and Intervenor Eugenio I .

Sagmit, Jr.
Five (5) special civil actions are hereby jointly decided because
they involve one common, fundamental issue, the constitutionality
At the time of the effectivity of R.A. No. 6715, Pascual Y. Reyes
of Republic Act No. 6715, effective March 21, 1989, in so far as it
was holding the office of Executive Director of the National Labor
declares vacant "all positions of the Commissioners, Executive
Relations Commission in virtue of an appointment extended to
Labor Arbiters and Labor Arbiters of the National Labor Relations
him on May 30, 1975. As specified by Administrative Order No.
Commission," and operates to remove the incumbents upon the
10 of the Secretary of Labor, dated July 14, 1975, the functions of
appointment and qualification of their successors. The law is
his office were "to take charge of all administrative matters of the
entitled, "AN ACT TO EXTEND PROTECTION TO LABOR,
Commission and to have direct supervision over all units and
STRENGTHEN THE CONSTITUTIONAL RIGHTS OF
personnel assigned to perform administrative tasks;" and Article
WORKERS TO SELF-ORGANIZATION, COLLECTIVE
213 of the Labor Code, as amended, declared that the "Executive
BARGAINING AND PEACEFUL CONCERTED ACTIVITIES,
Director, assisted by a Deputy Executive Director, shall exercise
FOSTER INDUSTRIAL PEACE AND HARMONY, PROMOTE
the administrative functions of the Commission." Reyes states
THE PREFERENTIAL USE OF VOLUNTARY MODES OF
that he has been "a public servant for 42 years," and "is about to
SETTLING LABOR DISPUTES AND REORGANIZE THE
retire at sixty-five (65)," in 1991.chanrobles virtual lawlibrary
NATIONAL LABOR RELATIONS COMMISSION, AMENDING
PRESIDENTIAL DECREE NO. 441, AS AMENDED,
The petitioner-in-intervention, Eugenio I. Sagmit, Jr., was Reyes’
OTHERWISE KNOWN AS THE LABOR CODE OF THE
Deputy Executive Director, appointed as such on October 27,
PHILIPPINES, APPROPRIATING FUNDS THEREFOR AND
1987 after twenty-five (25) years of government service.
FOR OTHER PURPOSES." 1 The provision directly dealing with
the reorganization of the National Labor Relations Commission is
Both Reyes and Sagmit were informed that they had been
Section 35. It reads as follows: 2
separated from employment upon the effectivity of R.A. No. 6715,
pursuant to a Memorandum-Order issued by then Secretary of
"SEC. 35. Equity of the Incumbent. — Incumbent career officials
Labor Franklin Drilon on August 17, 1989 to the effect that the
and rank-and-file employees of the National Labor Relations
offices of Executive Director and Deputy Executive Director had
Commission not otherwise affected by the Act shall continue to
been abolished by Section 35, in relation to Section 5 of said Act,
hold office without need of reappointment. However, consistent
and "their functions transferred to the Chairman, aided by the
with the need to professionalize the higher levels of officialdom
Executive Clerk."cralaw virtua1aw library
invested with adjudicatory powers and functions, and to upgrade
their qualifications, ranks, and salaries or emoluments, all
Reyes moved for reconsideration on August 29, 1989, but when
positions of the Commissioners, Executive Labor Arbiters and
no action was allegedly taken thereon, he instituted the action at
Labor Arbiters of the present National Labor Relations
bar, G.R. No. 90044. Sagmit was afterwards granted leave to
Commission are hereby declared vacant. However, subject
intervene in the action.
officials shall continue to temporarily discharge their duties and
functions until their successors shall have been duly appointed
G.R. No. 91547: Ceferino Dulay, Rosario G. Encarnacion, and
and qualified."cralaw virtua1aw library
Daniel M. Lucas
The first of these five consolidated cases was filed by Labor
Petitioners Rosario G. Encarnacion and Daniel M. Lucas, Jr. were
Arbiter Jovencio Ll. Mayor on March 8, 1989. In the year that
appointed National Labor Relations Commissioners on October
followed, eight other officers of the Commission, as initiators of
20, 1986, after the Commission was reorganized pursuant to
their own separate actions or as intervenors, joined Mayor in the
Executive Order No. 47 of President Aquino. Later, or more
attempt to invalidate the reorganization and to be reinstated to
precisely on November 19, 1986, Lucas was designated
their positions in the Government service.chanrobles.com.ph :
Presiding Commissioner of the Commission’s Second Division;
virtual law library
and Commissioner Ceferino E. Dulay was appointed Presiding
Commissioner of the Third Division.
G.R. No. 87211: Jovencio Mayor; and Intervenors Lourdes A.
Sales and Ricardo Olairez
Executive Order No. 252, issued by the President on July 25, 1986." He complains that he was effectively removed from his
1987, amended Article 215 of the Labor Code by providing that position as a result of the designation of the full complement of
"the Commissioners appointed under Executive Order No. 47 Commissioners in and to all Five Divisions of the NLRC by
dated September 10, 1986 shall hold office for a term of six (6) Administrative Order No. 161 dated November 18, 1989, issued
years . . (but of those thus appointed) three shall hold office for by Labor Secretary Drilon.
four (4) years, and three for two (2) years . . without prejudice to
reappointment." Under Executive Order No. 252, the terms of G.R. No. 94518: Rolando D. Gambito
Encarnacion and Lucas would expire on October 23, 1992, and
that of Dulay, on December 18, 1992. Rolando Gambito passed the bar examinations in 1971, joined
the Government service in 1974, serving for sixteen years in the
On November 18,1989, R.A. No. 6715 being then already in Department of Health, and as Labor Arbiter in the Department of
effect, the President extended to Encarnacion, Lucas and Dulay Labor and Employment from October, 1986. He was not included
new appointments as Commissioners of the NLRC despite the in the list of newly appointed Labor Arbiters released on March 8,
fact that, according to them, they had not been served with notice 1990; and his attempt to obtain are consideration of his exclusion
of the termination of their services as incumbent commissioners, therefrom and bring about his reinstatement as Labor Arbiter was
and no vacancy existed in their positions. Their new appointments unavailing.
were submitted to Congress, but since Congress adjourned on
December 22, 1989 without approving their appointments, said The Basic Issue
appointments became functus officio.
A number of issues have been raised and ventilated by the
No other appointments were thereafter extended to Encarnacion petitioners in their separate pleadings. They may all be reduced
and Dulay. Lucas was however offered the position of Assistant to one basic question, relating to the constitutionality of the
Regional Director by Secretary Drilon and then by Acting provisions of Republic Act No. 6715 DECLARING VACANT "all
Secretary Dionisio de la Serna (by letter dated January 9, 1990 positions of the Commissioners, Executive Labor Arbiters and
which referred to his appointment as such Assistant Regional Labor Arbiters of the present National Labor Relations
Director supposedly "issued by the President on November 8, Commission," 3 according to which the public respondents —
1989"). Lucas declined the offer, believing it imported a demotion.
1) considered as effectively separated from the service inter alia,
They all pray that their removal be pronounced unconstitutional all holders of said positions at the time of the effectivity of said
and void and they be declared Commissioners lawfully in office, Republic Act No. 6715, including the positions of Executive
or, alternatively, that they be paid all salaries, benefits and Director and Deputy Executive Director of the Commission, and
emoluments accruing to them for the unexpired portions of their
six-year terms and allowed to enjoy retirement benefits under 2) consequently, thereafter caused the appointment of other
applicable laws (pursuant to R.A. 910 and the Resolution re persons to the new positions specified in said statute: of
Judge Mario Ortiz, G.R. No. 78951, June 28, 1988). Chairman, Commissioners, Executive Clerk, Deputy Executive
Clerk, and Labor Arbiters of the reorganized National Labor
Of the incumbent Commissioners as of the effectivity of R.A. Relations Commission. The old positions were declared vacant
6715, six (6) were reappointed, namely: (1) Hon. Edna Bonto because, as the statute states, of "the need to professionalize the
Perez (as Presiding Commissioner, Second Division [NCB]), (2) higher levels of officialdom invested with adjudicatory powers and
Domingo H. Zapanta (Associate Commissioner, Second Division), functions, and to upgrade their qualifications, ranks, and salaries
(3) Lourdes C. Javier (Presiding Commissioner, Third Division or emoluments."cralaw virtua1aw library
[Luzon except NCR]), (4) Ernesto G. Ladrido III (Presiding
Commissioner, Fourth Division [Visayas]), (5) Musib M. Buat As everyone knows, security of tenure is a protected right under
(Presiding Commissioner, Fifth Division [Mindanao]), and (6) the Constitution. The right is secured to all employees in private
Oscar N. Abella (Associate Commissioner, Fifth Division). Other as well as in public employment. "No officer or employee in the
members appointed to the reorganized Commission were Vicente civil service," the Constitution declares, "shall be removed or
S.E. Veloso III, Romeo B. Putong, Rustico L. Diokno, Ireneo B. suspended except for cause provided by law." 4 There can
Bernardo, Rogelio I. Rayala, Irenea E. Ceniza, Bernabe S. scarcely be any doubt that each of the petitioners —
Batuhan, and Leon G. Gonzaga, Jr. Appointed Chairman was commissioner, administrative officer, or labor arbiter — falls within
Hon. Bartolome Carale, quondam Dean of the College of Law of the concept of an "officer or employee in the civil service" since
the University of the Philippines.chanrobles.com.ph : virtual law the civil service "embraces all branches, subdivisions,
library instrumentalities, and agencies of the Government, including
government-owned or controlled corporations with original
G.R. No. 91730: Conrado Maglaya charters." 5 The Commissioners thus had the right to remain in
office until the expiration of the terms for which they had been
Petitioner Conrado Maglaya alleges that he has been "a member appointed, unless sooner removed "for cause provided by law."
of the Philippine Bar for thirty-six (36) years of which 31 years . . So, too, the Executive Director and Deputy Executive Director,
(had been) devoted to public service, the last 24 years in the field and the Labor Arbiters had the right to retain their positions until
of labor relations law;" that he was appointed Labor Arbiter on the age of compulsory retirement, unless sooner removed "for
May 30, 1975 and "was retained in such position despite the cause provided by law." None of them could be deemed to be
reorganization under the Freedom Constitution of 1986 . . (and) serving at the pleasure of the President.chanrobles law library :
later promoted to and appointed by the President as red
Commissioner of the . . (NLRC) First Division on October 23,
Now, a recognized cause for removal or termination of
employment of a Government officer or employee is the abolition "Five (5) members each shall be chosen from among the
by law of his office as a result of reorganization carried out by nominees of the workers and employers organizations,
reason of economy or to remove redundancy of functions, or clear respectively. The Chairman and the four (4) remaining members
and explicit constitutional mandate for such termination of shall come from the public sector, with the latter to be chosen
employment. 6 Abolition of an office is obviously not the same as from among the recommendees of the Secretary of Labor and
the declaration that office is vacant. While it is undoubtedly a Employment."cralaw virtua1aw library
prerogative of the legislature to abolish certain offices, it can not
be conceded the power to simply pronounce those offices vacant However, once they assume office, "the members nominated by
and thereby effectively remove the occupants or holders thereof the workers and employers organizations shall divest themselves
from the civil service. Such an act would constitute, on its face, an of any affiliation with or interest in the federation or association to
infringement of the constitutional guarantee of security of tenure, which they belong."cralaw virtua1aw library
and will have to be struck down on that account. It can not be
justified by the professed "need to professionalize the higher B. Allocation of Powers Between NLRC En Banc and its Divisions
levels of officialdom invested with adjudicatory powers and
functions, and to upgrade their qualifications, ranks, and salaries Another amendment was made in respect of the allocation of
or emoluments."  powers and functions between the Commission en banc, on the
one hand, and its divisions, on the other. Both under the old and
The Constitution does not, of course, ordain the abolition of the the amended law, the Commission was vested with rule-making
petitioners’ positions or their removal from their offices; and there and administrative authority, as well as adjudicatory and other
is no claim that the petitioners’ separation from the service is due powers, functions and duties, and could sit en banc or in divisions
to a cause other than RA 6715. The inquiry therefore should be of three (3) members each. But whereas under the old law, the
whether or not RA 6715 has worked such an abolition of the cases to be decided en banc and those by a division were
petitioners’ offices, expressly or impliedly. This is the only mode determined by rules laid down by the Commission with the
by which, under the circumstances, the petitioners’ removal from approval of the ex officio Chairman (the Secretary of Labor) —
their positions may be defended and sustained.chanrobles law said Commission, in other words, then exercised both
library administrative and adjudicatory powers — the law now, as
amended by RA 6715, provides that —
It is immediately apparent that there is no express abolition in RA
6715 of the petitioners’ positions. So, justification must be sought, 1) the Commission "shall sit en banc only for purposes of
if at all, in an implied abolition thereof; i.e., that resulting from an promulgating rules and regulations governing the hearing and
irreconcilable inconsistency between the nature, duties and disposition of cases before any of its divisions and regional
functions of the petitioners’ offices under the old rules and those branches and formulating policies affecting its administration and
corresponding thereto under the new law. An examination of the operations;" but
relevant provisions of RA 6715, with a view to discovering the
changes thereby effected on the nature, composition, powers, 2) it "shall exercise its adjudicatory and all other powers, functions
duties and functions of the Commission and the Commissioners, and duties through its divisions."cralaw virtua1aw library
the Executive Director, the Deputy Executive Director, and the
Labor Arbiters under the prior legislation, fails to disclose such C. Official Stations, and Appellate Jurisdiction over Fixed Territory
essential inconsistencies.
Other changes related to the official station of the Commission
1. Amendments as Regards the NLRC and the Commissioners and its divisions, and the territory over which the divisions could
exercise exclusive appellate jurisdiction.
First, as regards the National Labor Relations Commissioners.
1. Under the old law, the Commission en banc and its divisions
A. Nature and Composition of the Commission, Generally had their main office in Metropolitan Manila; and appeals could be
taken to them from decisions of Labor Arbiters regardless of the
1. Prior to its amendment by RA 6715, Article 213 of the Labor regional office whence the case originated.
Code envisaged the NLRC as being an integral part of the
Department of Labor and Employment. "There shall," it said, "be a 2. Under the law now, the First and Second Divisions have their
National Labor Relations Commission in the Department of Labor official station in Metropolitan Manila and "handle cases coming
and Employment . ..’ RA 6715 would appear to have made the from the National Capital Region;" the Third Division has its main
Commission somewhat more autonomous. Article 213 now office also in Metropolitan Manila but would have appellate
declares that, "There shall be a National Labor Relations jurisdiction over "cases from other parts of Luzon;" and the Fourth
Commission which shall be attached to the Department of Labor and Fifth Divisions have their main offices in Cebu and Cagayan
and Employment for program coordination only . . .."cralaw de Oro City, and exercise jurisdiction over cases "from the
virtua1aw library Visayas and Mindanao," respectively; and the appellate authority
of the divisions is exclusive "within their respective territorial
2. Tripartite representation was to a certain extent restored in the jurisdiction."cralaw virtua1aw library
Commission. The same Section 213, as amended, now provides
that the Chairman and fourteen (14) members composing the D. Qualifications and Tenure of Commissioners
NLRC shall be chosen from the workers’, employers’ and the
public sectors, as follows:jgc:chanrobles.com.ph Revisions were also made by RA 6715 with respect to the
qualifications and tenure of the National Labor Relations
Commissioners. (3) All money claims of workers, including those based on non-
payment or underpayment of wages, overtime compensation,
Prescribed by the old law as qualifications for commissioners — separation pay and other benefits provided by law or appropriate
appointed for a term of six (6) years — were that they (a) be agreement, except claims for employees’ compensation, social
members of the Philippine bar, and (b) have at least five years’ security, medicare and maternity benefits;
experience in handling labor-management relations. 7
(4) Cases involving household services; and
RA 6715, on the other hand, requires (a) membership in the bar,
(b) engagement in the practice of law for at least 15 years, (c) at (5) Cases arising from any violation of Article 265 of this Code,
least five years’ experience or exposure in the field of labor- including questions involving the legality of strikes and lockouts.
management relations, and (d) preferably, residence in the region
where the commissioner is to hold office. The commissioners Some changes were introduced by RA 6715, indicated by italics
appointed shall hold office during good behavior until they reach in the enumeration which shortly follows. The exclusive, original
the age of sixty-five (65) years, unless they are sooner removed jurisdiction of Labor Arbiters now embraces the following cases
for cause as provided by law or become incapacitated to involving all workers, whether agricultural or non-
discharge the duties of their office. agricultural:chanrob1es virtual 1aw library

2. Amendments Regarding Executive Labor Arbiters and Labor (1) Unfair labor practice cases;
Arbiters
(2) Termination disputes;
A. Qualifications
(3) If accompanied with a claim for reinstatement, those cases
The old law provided for one hundred fifty (150) labor arbiters that workers may file involving wages, rates of pay, hours of work
assigned to the different regional offices or branches of the and other terms and conditions of employment;
Department of Labor and Employment (including sub-regional
branches or provincial extension units), each regional branch (4) Claims for actual, moral, exemplary and other forms of
being headed by an Executive Labor Arbiter. RA 6715 does not damages arising from the employer-employee relations; 8
specify any fixed number of labor arbiters, but simply provides
that there shall be as many labor arbiters as may be necessary (5) Cases arising from any violation of Article 264 of this Code,
for the effective and efficient operation of the Commission. including questions involving the legality of strikes and lockouts;

The old law declared that Executive Labor Arbiters and Labor (6) Except claims for employees compensation, social security,
Arbiters should be members of the Bar, with at least two (2) years medicare and maternity benefits, all other claims arising from
experience in the field of labor management relations. They were employer-employee relations, including those of persons in
appointed by the President upon recommendation of the domestic or household service, involving an amount exceeding
Chairman, and were "subject to the Civil Service Law, rules and five thousand pesos (P5,000.00), whether or not accompanied
regulations."cralaw virtua1aw library with a claim for reinstatement.

On the other hand, RA 6715 requires that the "Executive Labor Now, as before, the Labor Arbiters are given thirty (30) calendar
Arbiters and Labor Arbiters shall likewise be members of the days after the submission of the case by the parties to decide the
Philippine Bar," but in addition "must have been in the practice of case, without extension, except that the present statute stresses
law in the Philippines for at least seven (7) years, with at least that "even in the absence of stenographic notes," the period to
three (3) years experience or exposure in the field of labor- decide is still thirty days, without extension.
management relations." For "purposes of reappointment,"
however, "incumbent Executive Labor Arbiters and Labor Arbiters Furthermore, RA 6715 provides that "Cases arising from the
who have been engaged in the practice of law for at least five (5) interpretation or implementation of collective bargaining
years may be considered as already qualified." They are agreements and those arising from the interpretation or
appointed by the President, on recommendation of the Secretary enforcement of company personnel policies shall be disposed of
of Labor and Employment, and are subject to the Civil Service by the Labor Arbiter by referring the same to the grievance
Law, rules and regulations. machinery and voluntary arbitration as may be provided in said
agreements."cralaw virtua1aw library
B. Exclusive Original Jurisdiction
3. Amendments as Regards the Executive Director and Deputy
Before the effectivity of RA 6715, the exclusive original jurisdiction Executive Director
of labor arbiters comprehended the following cases involving all
workers, whether agricultural or non-agricultural:chanrob1es Prior to RA 6715, there was, as earlier stated, an Executive
virtual 1aw library Director, assisted by a Deputy Executive Director, who was
charged with the "exercise (of) the administrative functions of the
(1) Unfair labor practice cases; Commission." 9 More particularly, his chief functions were "to
take charge of all administrative matters of the Commission and
(2) Those that workers may file involving wages, hours of work to have direct supervision over all units and personnel assigned
and other terms and conditions of employment; to perform administrative tasks." 10 Although not so stated in the
law, in the performance of their functions, the Executive Director
and the Deputy Executive Director were obviously themselves 3. The position titles of "Executive Clerk" and "Deputy Executive
subject to the supervision and control of the head of office, the ex Clerk(s)" provided for in RA 6715 are obviously not those of
officio Chairman of the National Labor Relations Commission (the newly-created offices, but new appellations or designations given
Secretary of Labor), or the Commission itself.chanrobles.com.ph : to the existing positions of Executive Director and Deputy
virtual law library Executive Director. There is no essential change from the
prescribed and basically administrative duties of these positions
Under RA 6715, the Secretary of Labor is no longer ex officio and, at the same time, no mention in the Act of the former titles,
Chairman of the Commission. There has been created the office from which the logical conclusion is that what was intended was
of Chairman, who "shall have the administrative supervision over merely a change in nomenclature, not an express or implied
the Commission and its regional branches and all its personnel, abolition. Neither does the Act specify the qualifications for
including the Executive Labor Arbiters and Labor Arbiters." In this Executive Clerk and Deputy Executive Clerks. There is no reason
function, the law says, he shall be "aided by the Executive Clerk to suppose that these could be higher than those for Executive
of the Commission."cralaw virtua1aw library Director and Deputy Executive Director, or that anything inheres
in these positions that would preclude their incumbents from
The Executive Clerk appears to be the officer who used to be being named Executive Clerk and Deputy Executive Clerks.
known under the old law as the Executive Director. The office of
Executive Director is nowhere mentioned in RA 6715. Said WHEREFORE, the petitions are, as they must be, GRANTED,
Executive Clerk is given the additional responsibility of assisting and the following specific dispositions are hereby
the Commission en banc and the First Division, in performing RENDERED:chanrob1es virtual 1aw library
"such similar or equivalent functions and duties as are discharged
by the Clerk of Court . . of the Court of Appeals." The positions of 1. In G.R. No. 91547, and G.R. No. 91730, the removal of
Deputy Executive Clerks have also been created whose main role petitioners Rosario G. Encarnacion, Daniel M. Lucas, Jr.,
is to assist the other divisions of the Commission (the second, Ceferino E. Dulay, and Conrado Maglaya as Commissioners of
third, fourth and fifth) "in the performance of such similar or the NLRC is ruled unconstitutional and void; however, to avoid
equivalent functions and duties as are discharged by the . . . displacement of any of the incumbent Commissioners now
Deputy Clerk(s) of the Court of Appeals."cralaw virtua1aw library serving, it not appearing that any of them is unfit or has given
cause for removal, and conformably to the alternative prayer of
Summing up — the petitioners themselves, it is ORDERED that said petitioners
be paid all salaries, benefits and emoluments accruing to them for
1. Republic Act No. 6715 did not abolish the NLRC, or change its the unexpired portions of their six-year terms and allowed to enjoy
essential character as a supervisory and adjudicatory body. retirement benefits under applicable laws, pursuant to RA No. 910
Under said Act, as under the former law, the NLRC continues to and this Court’s Resolution in Ortiz v. Commission on Elections,
act collegially, whether it performs administrative or rule-making G.R. No. 79857, 161 SCRA 812;
functions or exercises appellate jurisdiction to review decisions
and final orders of the Labor Arbiters. The provisions conferring a This disposition does not involve or apply to respondent Hon.
somewhat greater measure of autonomy; requiring that its Bartolome Carale, who replaced the Secretary of Labor as ex
membership be drawn from tripartite sectors (workers, employees officio Chairman of the NLRC pursuant to RA 6715, none of the
and the public sector); changing the official stations of the petitioners having been affected or in any manner prejudiced by
Commission’s divisions; and even those prescribing higher or his appointment and incumbency as such;
other qualifications for the positions of Commissioner which, if at
all, should operate only prospectively, not to mention the fact that 2. In G.R. No. 90044, the removal of petitioner Pascual Y. Reyes
the petitioners (in G.R. No. 91547) have asserted without dispute and petitioner-in-intervention Eugenio L. Sagmit, Jr. as NLRC
that they possess the new qualifications — none of these can be Executive Director and Deputy Executive Director, respectively, is
said to work so essential or radical a revision of the nature, likewise declared uuconstitutional and void, and they are ordered
powers and duties of the NLRC as to justify a conclusion that the reinstated as Executive Clerk and Deputy Executive Clerk,
Act in truth did not merely declare vacant but actually abolished respectively, unless they opt for retirement, in either case with full
the offices of commissioners and created others in their place. back salaries, emoluments and benefits from the date of their
removal to that of their reinstatement; and
2. Similar considerations yield the same conclusion as far as the
positions of Labor Arbiters are concerned, there being no 3. In G.R. Nos. 87211, and 94518, petitioners-intervenors
essential inconsistency on that score between Republic Act No. Lourdes A. Sales and Ricardo Olairez and petitioner Rolando D.
6715 and the old law. The Labor Arbiters continue to exercise the Gambito, having also been illegally removed as Labor Arbiters,
same basic power and function: the adjudication, in the first are ordered reinstated to said positions with full back salaries,
instance, of certain classes of labor disputes. Their original and emoluments and benefits from the dates of their removal up to the
exclusive jurisdiction remains substantially the same under both time they are reinstated.cralawnad
the old law and the new. Again, their incumbents’ constitutionally
guaranteed security of tenure cannot be defeated by the provision No pronouncement as to costs.
for higher or other qualifications than were prescribed under the
old law; said provision can only operate prospectively and as to SO ORDERED.
new appointees to positions regularly vacated; and there is,
besides, also no showing that the petitioning Arbiters do not
qualify under the new law.
6. Pepsi v. Gallang; Sep. 24, 1991

[G.R. No. 89621. September 24, 1991.]

PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC.,

represented by its Plant General Manager ANTHONY B. SIAN,
ELEAZAR LIMBAB, IRENEO BALTAZAR & JORGE
HERAYA, Petitioners, v. HON. LOLITA O. GAL-LANG,
SALVADOR NOVILLA, ALEJANDRO OLIVA, WILFREDO
CABAÑAS & FULGENCIO LEGO, Respondents.

Aurelio D. Menzon, for Petitioners.

Mario P. Nicolasora co-counsel, for Petitioners.

Papiano L. Santo for Private Respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR ARBITER;

SCOPE OF POWER; RULE. — It must be stressed that not
every controversy involving workers and their employers can be
resolved only by the labor arbiters. This will be so only if there is
a "reasonable causal connection" between the claim asserted
and employee-employer relations to put the case under the
provisions of Article 217. Absent such a link, the complaint will
be cognizable by the regular courts of justice in the exercise of
their civil and criminal jurisdiction.

2. REMEDIAL LAW; CIVIL PROCEDURE; COMPLAINT FOR

DAMAGE FOR MALICIOUS PROSECUTION FILED BY
EMPLOYEES AGAINST EMPLOYERS; COGNIZABLE BY
REGULAR COURTS OF JUSTICE; CASE AT BAR. — The
case now before the Court involves a complaint for damages for
malicious prosecution which was filed with the Regional Trial
Court of Leyte by the employees of the defendant company. It
does not appear that there is a "reasonable causal connection"
between the complaint and the relations of the parties as
employer and employees. The complaint did not arise from such
relations and in fact could have arisen independently of an
employment relationship between the parties. No such
relationship or any unfair labor practice is asserted. What the
employees are alleging is that the petitioners acted with bad
faith when they filed the criminal complaint which the Municipal
Trial Court said was intended "to harass the poor employee"
and the dismissal of which was affirmed by the Provincial
Prosecutor "for lack of evidence to establish even a slightest court and not to the labor arbiter. Obviously, the claim arose
probability that all the respondents herein have committed the from employee-employer relations and so came under Article
crime imputed against them." This is a matter which the labor 217 of the Labor Code which then provided as
arbiter has no competence to resolve as the applicable law is follows:chanrob1es virtual 1aw library
not the Labor Code but the Revised Penal Code.
ART. 217. Jurisdiction of Labor Arbiters and the Commission. —
(a) The Labor Arbiters shall have the original and exclusive
DECISION jurisdiction to hear and decide within thirty (30) working days
after submission of the case by the parties for decision, the
CRUZ, J.: following cases involving all workers, whether agricultural or
non-agricultural:chanrob1es virtual 1aw library

1. Unfair labor practice cases;

The question now before us has been categorically resolved in
2. Those that workers may file involving wages, hours of work
earlier decisions of the Court that a little more diligent research
and other terms and conditions of employment;
would have disclosed to the petitioners. On the basis of those
cases and the facts now before us, the petition must be
3. All money claims of workers, including those based on non-
denied.chanrobles.com.ph : virtual law library
payment or underpayment of wages, overtime compensation,
separation pay and other benefits provided by law or
The private respondents were employees of the petitioner who
appropriate agreement, except claims for employees’
were suspected of complicity in the irregular disposition of
compensation, social security, medicare and maternity benefits;
empty Pepsi Cola bottles. On July 16, 1987, the petitioners filed
a criminal complaint for theft against them but this was later
4. Cases involving household services; and
withdrawn and substituted with a criminal complaint for
falsification of private documents. On November 26, 1987, after
5. Cases arising from any violation of Article 265 of this Code,
a preliminary investigation conducted by the Municipal Trial
including questions involving the legality of strikes and lockouts.
Court of Tanauan, Leyte, the complaint was dismissed. The
dismissal was affirmed on April 8, 1988, by the Office of the
(b) The Commission shall have exclusive appellate jurisdiction
Provincial Prosecutor.
over all cases decided by Labor Arbiters. 2
Meantime, allegedly after an administrative investigation, the
It must be stressed that not every controversy involving workers
private respondents were dismissed by the petitioner company
and their employers can be resolved only by the labor arbiters.
on November 23, 1987. As a result, they lodged a complaint for
This will be so only if there is a "reasonable causal connection"
illegal dismissal with the Regional Arbitration Branch of the
between the claim asserted and employee-employer relations to
NLRC in Tacloban City on December 1, 1987, and demanded
put the case under the provisions of Article 217. Absent such a
reinstatement with damages. In addition, they instituted in the
link, the complaint will be cognizable by the regular courts of
Regional Trial Court of Leyte, on April 1988, a separate civil
justice in the exercise of their civil and criminal jurisdiction.
complaint against the petitioners for damages arising from what
they claimed to be their malicious prosecution.
In Medina v. Castro-Bartolome, 3 two employees filed in the
Court of First Instance of Rizal a civil complaint for damages
The petitioners moved to dismiss the civil complaint on the
against their employer for slanderous remarks made against
ground that the trial court had no jurisdiction over the case
them by the company president. On the order dismissing the
because it involved employee-employer relations that were
case because it came under the jurisdiction of the labor arbiters,
exclusively cognizable by the labor arbiter. The motion was
Justice Vicente Abad Santos said for the Court:chanrob1es
granted on February 6, 1989. On July 6, 1989, however, the
virtual 1aw library
respondent judge, acting on the motion for reconsideration,
reinstated the complaint, saying it was "distinct from the labor
It is obvious from the complaint that the plaintiffs have not
case for damages now pending before the labor courts." The
alleged any unfair labor practice. Theirs is a simple action for
petitioners then came to this Court for relief.
damages for tortuous acts allegedly committed by the
defendants. Such being the case, the governing statute is the
The petitioners invoke Article 217 of the Labor Code and a
Civil Code and not the Labor Code. It results that the orders
number of decisions of this Court to support their position that
under review are based on a wrong premise.chanrobles.com.ph
the private respondents’ civil complaint for damages falls under
: virtual law library
the jurisdiction of the labor arbiter. They particularly cite the
case of Getz Corporation v. Court of Appeals, 1 where it was
In Singapore Airlines Ltd. v. Paño, 4 where the plaintiff was
held that a court of first instance had no jurisdiction over the
suing for damages for alleged violation by the defendant of an
complaint filed by a dismissed employee "for unpaid salary and
"Agreement for a Course of Conversion Training at the Expense
other employment benefits, termination pay and moral and
of Singapore Airlines Limited," the jurisdiction of the Court of
exemplary damages."cralaw virtua1aw library
First Instance of Rizal over the case was questioned. The Court,
citing the earlier case of Quisaba v. Sta. Ines Melale Veneer
We hold at the outset that the case is not in point because what
and Plywood, Inc., 5 declared through Justice
was involved there was a claim arising from the alleged illegal
Herrera:chanrob1es virtual 1aw library
dismissal of an employee, who chose to complain to the regular
 employers has been absorbed into the original and exclusive
Stated differently, petitioner seeks protection under the civil jurisdiction of Labor Arbiters.
laws and claims no benefits under the Labor Code. The primary
x       x       x
relief sought is for liquidated damages for breach of a
contractual obligation. The other items demanded are not labor
benefits demanded by workers generally taken cognizance of in
labor disputes, such as payment of wages, overtime For it cannot be presumed that money claims of workers which
compensation or separation pay. The items claimed are the do not arise out of or in connection with their employer-
natural consequences flowing from breach of an obligation, employee relationship, and which would therefore fall within the
intrinsically a civil dispute. general jurisdiction of the regular courts of justice, were
intended by the legislative authority to be taken away from the
In Molave Sales, Inc. v. Laron, 6 the same Justice held for the jurisdiction of the courts and lodged with Labor Arbiters on an
Court that the claim of the plaintiff against its sales manager for exclusive basis. The Court, therefore, believes and so holds that
payment of certain accounts pertaining to his purchase of the "money claims of workers" referred to in paragraph 3 of
vehicles and automotive parts, repairs of such vehicles, and Article 217 embraces money claims which arise out of or in
cash advances from the corporation was properly cognizable by connection with the employer-employee relationship, or some
the Regional Trial Court of Dagupan City and not the labor aspect or incident of such relationship. Put a little differently,
arbiter, because "although a controversy is between an that money claims of workers which now fall within the original
employer and an employee, the Labor Arbiters have no and exclusive jurisdiction of Labor Arbiters are those money
jurisdiction if the Labor Code is not involved."cralaw virtua1aw claims which have some reasonable causal connection with the
library employer-employee relationship (Ibid.).

The latest ruling on this issue is found in San Miguel The case now before the Court involves a complaint for
Corporation v. NLRC, 7 where the above cases are cited and damages for malicious prosecution which was filed with the
the changes in Article 217 are recounted. That case involved a Regional Trial Court of Leyte by the employees of the defendant
claim of an employee for a P60,000.00 prize for a proposal company. It does not appear that there is a "reasonable causal
made by him which he alleged had been accepted and connection" between the complaint and the relations of the
implemented by the defendant corporation in the processing of parties as employer and employees. The complaint did not arise
one of its beer products. The claim was filed with the labor from such relations and in fact could have arisen independently
arbiter, who dismissed it for lack of jurisdiction but was reversed of an employment relationship between the parties. No such
by the NLRC on appeal. In setting aside the appealed decision relationship or any unfair labor practice is asserted. What the
and dismissing the complaint, the Court observed through employees are alleging is that the petitioners acted with bad
Justice Feliciano:chanrob1es virtual 1aw library faith when they filed the criminal complaint which the Municipal
Trial Court said was intended "to harass the poor employees"
It is the character of the principal relief sought that appears and the dismissal of which was affirmed by the Provincial
essential, in this connection. Where such principal relief is to be Prosecutor "for lack of evidence to establish even a slightest
granted under labor legislation or a collective bargaining probability that all the respondents herein have committed the
agreement, the case should fall within the jurisdiction of the crime imputed against them." This is a matter which the labor
Labor Arbiter and the NLRC, even though a claim for damages arbiter has no competence to resolve as the applicable law is
might be asserted as an incident to such claim. not the Labor Code but the Revised Penal Code.chanrobles
lawlibrary : rednad
x       x       x
"Talents differ, all is well and wisely put," so observed the
philosopher-poet. 8 So it must be in the case we here decide.
Where the claim to the principal relief sought is to be resolved
not by reference to the Labor Code or other labor relations WHEREFORE, the order dated July 6, 1989, is AFFIRMED and
statute or a collective bargaining agreement but by the general the petition DENIED, with costs against the petitioner.
civil law, the jurisdiction over the dispute belongs to the regular
courts of justice and not to the Labor Arbiter and the NLRC. In SO ORDERED.
such situations, resolution of the dispute requires expertise, not
in labor management relations nor in wage structures and other
terms and conditions of employment, but rather in the
application of the general civil law. Clearly, such claims fall
outside the area of competence or expertise ordinarily ascribed
to Labor Arbiters and the NLRC and the rationale for granting
jurisdiction over such claims to these agencies disappears.
x       x       x

While paragraph 3 above refers to "all money claims of

workers," it is not necessary to suppose that the entire universe
of money claims that might be asserted by workers against their
7. PAL v. NLRC, March 20, 1998
G.R. No. 120567. March 20, 1998
PHILIPPINE AIRLINES, INC., Petitioner, v. , NATIONAL LABOR
RELATIONS COMMISSION, FERDINAND PINEDA and
GODOFREDO CABLING, Respondents.
DECISION
MARTINEZ, J.:
Can the National Labor Relations Commission (NLRC), even
without a complaint for illegal dismissal filed before the labor
arbiter, entertain an action for injunction and issue such writ
enjoining petitioner Philippine Airlines, Inc. from enforcing its
Orders of dismissal against private respondents, and ordering
petitioner to reinstate the private respondents to their previous
positions?
This is the pivotal issue presented before us in this petition for
certiorari under Rule 65 of the Revised Rules of Court which
seeks the nullification of the injunctive writ dated April 3,1995
issued by the NLRC and the Order denying petitioner's motion for
reconsideration on the ground that the said Orders were issued in
excess of jurisdiction.
Private respondents are flight stewards of the petitioner. Both
were dismissed from the service for their alleged involvement in
the April 3, 1993 currency smuggling in Hong Kong.
Aggrieved by said dismissal, private respondents filed with the
NLRC a petition1 for injunction praying that:
"I. Upon filing of this Petition, a temporary restraining order be
issued, prohibiting respondents (petitioner herein) from effecting
or enforcing the Decision dated Feb. 22, 1995, or to reinstate
petitioners temporarily while a hearing on the propriety of the
issuance of a writ of preliminary injunction is being undertaken;
"II. After hearing, a writ of preliminary mandatory injunction be
issued ordering respondent to reinstate petitioners to their former
positions pending the hearing of this case, or, prohibiting
respondent from enforcing its Decision dated February 22,1995
while this case is pending adjudication;
"III. After hearing, that the writ of preliminary injunction as to the
reliefs sought for be made permanent, that petitioners be
awarded full backwages, moral damages of PHP 500,000.00
each and exemplary damages of PHP 500,000.00 each,
attorneys fees equivalent to ten percent of whatever amount is
awarded, and the costs of suit."
On April 3, 1995, the NLRC issued a temporary mandatory
injunction2 enjoining petitioner to cease and desist from enforcing
its February 22, 1995 Memorandum of dismissal. In granting the grave and irreparable injury" is enjoinable as private respondents
writ, the NLRC considered the following facts, to wit: are left "with no speedy and adequate remedy at law'"except the
issuance of a temporary mandatory injunction; (3) the NLRC is
x x x that almost two (2) years ago, i.e. on April 15, 1993, the
empowered under Article 218 (e) of the Labor Code not only to
petitioners were instructed to attend an investigation by
restrain any actual or threatened commission of any or all
respondents Security and Fraud Prevention Sub-Department
prohibited or unlawful acts but also to require the performance of
regarding an April 3, 1993 incident in Hongkong at which Joseph
a particular act in any labor dispute, which, if not restrained or
Abaca, respondents Avionics Mechanic in Hongkong was
performed forthwith, may cause grave or irreparable damage to
intercepted by the Hongkong Airport Police at Gate 05 xxx the
any party; and (4) the temporary mandatory power of the NLRC
ramp area of the Kai Tak International Airport while xxx about to
was recognized by this Court in the case of Chemo-Technicshe
exit said gate carrying a xxx bag said to contain some 2.5 million
Mfg., Inc. Employees Union,DFA, et.al. vs. Chemo-Technische
pesos in Philippine Currencies. That at the Police Station, Mr.
Mfg., Inc. [G.R. No. 107031, January 25,1993].
Abaca claimed that he just found said plastic bag at the Skybed
Section of the arrival flight PR300/03 April 93, where petitioners On May 4,1995, petitioner moved for reconsideration3 arguing
served as flight stewards of said flight PR300; x x the petitioners that the NLRC erred:
sought a more detailed account of what this HKG incident is all
1. in granting a temporary injunction order when it has no
about; but instead, the petitioners were administratively charged,
jurisdiction to issue an injunction or restraining order since this
a hearing on which did not push through until almost two (2) years
may be issued only under Article 218 of the Labor Code if the
after, i.e. on January 20, 1995 xxx where a confrontation between
case involves or arises from labor disputes;
Mr. Abaca and petitioners herein was compulsorily arranged by
the respondents disciplinary board at which hearing, Abaca was 2. in granting a temporary injunction order when the termination of
made to identify petitioners as co-conspirators; that despite the private respondents have long been carried out;
fact that the procedure of identification adopted by respondents
Disciplinary Board was anomalous as there was no one else in 3. ..in ordering the reinstatement of private respondents on the
the line-up (which could not be called one) but petitioners xxx basis of their mere allegations, in violation of PAL's right to due
Joseph Abaca still had difficulty in identifying petitioner Pineda as process;
his co-conspirator, and as to petitioner Cabling, he was implicated 4. ..in arrogating unto itself management prerogative to discipline
and pointed by Abaca only after respondents Atty. Cabatuando its employees and divesting the labor arbiter of its original and
pressed the former to identify petitioner Cabling as co- exclusive jurisdiction over illegal dismissal cases;
conspirator; that with the hearing reset to January 25, 1995, Mr.
Joseph Abaca finally gave exculpating statements to the board in 5. ..in suspending the effects of termination when such action is
that he cleared petitioners from any participation or from being the exclusively within the jurisdiction of the Secretary of Labor;
owners of the currencies, and at which hearing Mr. Joseph Abaca
6. ..in issuing the temporary injunction in the absence of any
volunteered the information that the real owner of said money
irreparable or substantial injury to both private respondents.
wasone who frequented his headquarters in Hongkong to which
information, the Disciplinary Board Chairman, Mr. Ismael Khan, On May 31,1995, the NLRC denied petitioner's motion for
opined forthe need foranother hearing to go to the bottom of the reconsideration, ruling:
incident; that from said statement, it appeared that Mr. Joseph
Abaca was the courier, and had another mechanic in Manila who The respondent (now petitioner), for one, cannot validly claim that
hid the currency at the planes skybed for Abaca to retrieve in we cannot exercise our injunctive power under Article 218 (e) of
Hongkong, which findings of how the money was found was the Labor Code on the pretext that what we have here is not a
previously confirmed by Mr. Joseph Abaca himself when he was labor dispute as long as it concedes that as defined by law, a(l)
first investigated by the Hongkong authorities; that just as Labor Dispute includes any controversy or matter
petitioners thought that they were already fully cleared of the concerning terms or conditions of employment. . If security of
charges, as they no longer received any summons/notices on the tenure, which has been breached by respondent and which,
intended additional hearings mandated by the Disciplinary Board, precisely, is sought to be protected by our temporary mandatory
they were surprised to receive on February 23, 1995 xxx a injunction (the core of controversy in this case) is not a term or
Memorandum dated February 22, 1995 terminating their services condition of employment, what then is?
for alleged violation of respondents Code of Discipline effective xxx
immediately; that sometime xxx first week of March, 1995,
petitioner Pineda received another Memorandum from Anent respondents second argument x x x, Article 218 (e) of the
respondent Mr. Juan Paraiso, advising him of his termination Labor Code x x x empowered the Commission not only to issue a
effective February 3, 1995, likewise for violation of respondents prohibitory injunction, but a mandatory (to require the
Code of Discipline; x x x" performance) one as well. Besides, as earlier discussed, we
already exercised (on August 23,1991) this temporary mandatory
In support of the issuance of the writ of temporary injunction, the injunctive power in the case of Chemo-Technische Mfg., Inc.
NLRC adopted the view that: (1) private respondents cannot be Employees Union-DFA et.al. vs. Chemo-Technishe Mfg., Inc., et.
validly dismissed on the strength of petitioner's Code of Discipline al. (supra) and effectively enjoined one (1) month old dismissals
which was declared illegal by this Court in the case of PAL, Inc. by Chemo-Technische and that our aforesaid mandatory exercise
vs. NLRC, (G.R. No. 85985), promulgated August 13, 1993, for of injunctive power, when questioned through a petition for
the reason that it was formulated by the petitioner without the certiorari, was sustained by the Third Division of the Supreme
participation of its employees as required in R.A. 6715, amending court per its Resolution dated January 25,1993.
Article 211 of the Labor Code; (2) the whimsical, baseless and
premature dismissals of private respondents which "caused them xxx
Respondents fourth argument that petitioner's remedy for their of a particular act in any labor dispute which, if not restrained or
dismissals is 'to file an illegal dismissal case against PAL which performed forthwith, may cause grave or irreparable damage to
cases are within the original and exclusive jurisdiction of the any party or render ineffectual any decision in favor of such party;
Labor Arbiter' is ignorant . In requiring as a condition for the x x x." (Emphasis Ours)
issuance of a 'temporary or permanent injunction'- '(4) That
Complementing the above-quoted provision, Sec. 1, Rule XI of
complainant has no adequate remedy at law;' Article 218 (e) of
the New Rules of Procedure of the NLRC, pertinently provides as
the Labor Code clearly envisioned adequacy , and not
follows:
plain availability of a remedy at law as an alternative bar to the
issuance of an injunction. An illegal dismissal suit (which takes, "Section 1. Injunction in Ordinary Labor Dispute.-A preliminary
on its expeditious side, three (3) years before it can be disposed injunction or a restraining order may be granted by the
of) while available as a remedy under Article 217 (a) of the Labor Commission through its divisions pursuant to the provisions of
Code, is certainly not an 'adequate; remedy at law. Ergo, it paragraph (e) of Article 218 of the Labor Code, as amended,
cannot, as an alternative remedy, bar our exercise of that when it is established on the bases of the sworn allegations in the
injunctive power given us by Article 218 (e) of the Code. petition that the acts complained of, involving or arising from any
labor dispute before the Commission, which, if not restrained or
xxx xxx xxx
performed forthwith, may cause grave or irreparable damage to
Thus, Article 218 (e), as earlier discussed [which empowers this any party or render ineffectual any decision in favor of such party.
Commission 'to require the performance of a particular act' (such
xxx xxx xxx
as our requiring respondent 'to cease and desist from enforcing'
its whimsical memoranda of dismissals and 'instead to reinstate The foregoing ancillary power may be exercised by the Labor
petitioners to their respective position held prior to their subject Arbiters only as an incident to the cases pending before them in
dismissals') in 'any labor dispute which, if not xxx performed order to preserve the rights of the parties during the pendency of
forthwith, may cause grave and irreparable damage to any party'] the case, but excluding labor disputes involving strikes or
stands as the sole 'adequate remedy at law' for petitioners here. lockout. 7 (Emphasis Ours)
Finally, the respondent, in its sixth argument claims that even if its From the foregoing provisions of law, the power of the NLRC to
acts of dismissing petitioners 'may be great, still the same is issue an injunctive writ originates from "any labor dispute" upon
capable of compensation', and that consequently, 'injunction need application by a party thereof, which application if not granted
not be issued where adequate compensation at law could be "may cause grave or irreparable damage to any party or render
obtained'. Actually, what respondent PAL argues here is that we ineffectualany decision in favor of such party."
need not interfere in its whimsical dismissals of petitioners as,
after all, it can pay the latter its backwages. x x x The term "labor dispute" is defined as "any controversy or matter
concerning terms and conditions of employment or the
But just the same, we have to stress that Article 279 does not association or representation of persons in negotiating, fixing,
speak alone of backwages as an obtainable relief for illegal maintaining, changing, or arranging the terms and conditions of
dismissal; that reinstatement as well is the concern of said law, employment regardless of whether or not the disputants stand in
enforceable when necessary, through Article 218 (e) of the Labor the proximate relation of employers and
Code (without need of an illegal dismissal suit under Article 217 employees."8cräläwvirtualibräry
(a) of the Code) if such whimsical and capricious act of illegal
dismissal will 'cause grave or irreparable injury to a party'. x x x The term "controversy" is likewise defined as "a litigated
" 4cräläwvirtualibräry question; adversary proceeding in a court of law; a civil action or
suit, either at law or in equity; a justiciable
Hence, the present recourse. dispute."9cräläwvirtualibräry
Generally, injunction is a preservative remedy for the protection of A "justiciable controversy" is "one involving an active antagonistic
one's substantive rights or interest. It is not a cause of action in assertion of a legal right on one side and a denial thereof on the
itself but merely a provisional remedy, an adjunct to a main suit. It other concerning a real, and not a mere theoretical question or
is resorted to only when there is a pressing necessity to avoid issue."10cräläwvirtualibräry
injurious consequences which cannot be remedied under any
standard of compensation. The application of the injunctive writ Taking into account the foregoing definitions, it is an essential
rests upon the existence of an emergency or of a special reason requirement that there must first be a labor dispute between the
before the main case be regularly heard. The essential conditions contending parties before the labor arbiter. In the present case,
for granting such temporary injunctive relief are that the complaint there is no labor dispute between the petitioner and private
alleges facts which appear to be sufficient to constitute a proper respondents as there has yet been no complaint for illegal
basis for injunction and that on the entire showing from the dismissal filed with the labor arbiter by the private respondents
contending parties, the injunction is reasonably necessary to against the petitioner.
protect the legal rights of the plaintiff pending the The petition for injunction directly filed before the NLRC is in
litigation.5 Injunction is also a special equitable relief granted only reality an action for illegal dismissal. This is clear from the
in cases where there is no plain, adequate and complete remedy allegations in the petition which prays for: reinstatement of private
at law.6cräläwvirtualibräry respondents; award of full backwages, moral and exemplary
In labor cases, Article 218 of the Labor Code empowers the damages; and attorney's fees. As such, the petition should have
NLRC- been filed with the labor arbiter who has the original and exclusive
jurisdiction to hear and decide the following cases involving all
"(e) To enjoin or restrain any actual or threatened commission of workers, whether agricultural or non-agricultural:
any or all prohibited or unlawful acts or to require the performance
(1) Unfair labor practice; is patently erroneous. An "adequate" remedy at law has been
defined as one "that affords relief with reference to the matter in
(2) Termination disputes;
controversy, and which is appropriate to the particular
(3) If accompanied with a claim for reinstatement, those cases circumstances of the case."13 It is a remedy which is equally
that workers may file involving wages, rates of pay, hours of work beneficial, speedy and sufficient which will promptly relieve the
and other terms and conditions of employment; petitioner from the injurious effects of the acts complained
of.14cräläwvirtualibräry
(4) Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations; Under the Labor Code, the ordinary and proper recourse of an
illegally dismissed employee is to file a complaint for illegal
(5) Cases arising from any violation of Article 264 of this Code, dismissal with the labor arbiter.15 In the case at bar, private
including questions involving the legality of strikes and lockouts; respondents disregarded this rule and directly went to the NLRC
and through a petition for injunction praying that petitioner be enjoined
(6) Except claims for employees compensation, social security, from enforcing its dismissal orders. In Lamb vs. Phipps,16 we
medicare and maternity benefits, all other claims arising from ruled that if the remedy is specifically provided by law, it is
employer-employee relations, including those of persons in presumed to be adequate. Moreover, the preliminary mandatory
domestic or household service, involving an amount exceeding injunction prayed for by the private respondents in their petition
five thousand pesos (P 5,000.00), whether or not accompanied before the NLRC can also be entertained by the labor arbiter who,
with a claim for reinstatement.11cräläwvirtualibräry as shown earlier, has the ancillary power to issue preliminary
injunctions or restraining orders as an incident in the cases
The jurisdiction conferred by the foregoing legal provision to the pending before him in order to preserve the rights of the parties
labor arbiter is both original and exclusive, meaning, no other during the pendency of the case.17cräläwvirtualibräry
officer or tribunal can take cognizance of, hear and decide any of
the cases therein enumerated. The only exceptions are where the Furthermore, an examination of private respondents' petition for
Secretary of Labor and Employment or the NLRC exercises the injunction reveals that it has no basis since there is no showing of
power of compulsory arbitration, or the parties agree to submit the any urgency or irreparable injury which the private respondents
matter to voluntary arbitration pursuant to Article 263 (g) of the might suffer. An injury is considered irreparable if it is of such
Labor Code, the pertinent portions of which reads: constant and frequent recurrence that no fair and reasonable
redress can be had therefor in a court of law,18 or where there is
"(g) When, in his opinion, there exists a labor dispute causing or no standard by which their amount can be measured with
likely to cause a strike or lockout in an industry indispensable to reasonable accuracy, that is, it is not susceptible of mathematical
the national interest, the Secretary of Labor and Employment may computation. It is considered irreparable injury when it cannot be
assume jurisdiction over the dispute and decide it or certify the adequately compensated in damages due to the nature of the
same to the Commission for compulsory arbitration. Such injury itself or the nature of the right or property injured or when
assumption or certification shall have the effect of automatically there exists no certain pecuniary standard for the measurement of
enjoining the intended or impending strike or lockout as specified damages.19cräläwvirtualibräry
in the assumption or certification order. If one has already taken
place at the time of assumption or certification, all striking or In the case at bar, the alleged injury which private respondents
locked out employees shall immediately resume operations and stand to suffer by reason of their alleged illegal dismissal can be
readmit all workers under the same terms and conditions adequately compensated and therefore, there exists no
prevailing before the strike or lockout. The Secretary of Labor and "irreparable injury," as defined above which would necessitate the
Employment or the Commission may seek the assistance of law issuance of the injunction sought for. Article 279 of the Labor
enforcement agencies to ensure compliance with this provision as Code provides that an employee who is unjustly dismissed from
well as with such orders as he may issue to enforce the same. employment shall be entitled to reinstatement, without loss of
seniority rights and other privileges, and to the payment of full
xxx" backwages, inclusive of allowances, and to other benefits or their
monetary equivalent computed from the time his compensation
On the other hand, the NLRC shall have
was withheld from him up to the time of his actual reinstatement.
exclusive appellate jurisdiction over all cases decided by labor
arbiters as provided in Article 217(b) of the Labor Code. In short, The ruling of the NLRC that the Supreme Court upheld its power
the jurisdiction of the NLRC in illegal dismissal cases is appellate to issue temporary mandatory injunction orders in the case of
in nature and, therefore, it cannot entertain the private Chemo-Technische Mfg., Inc. Employees Union-DFA, et.al. vs.
respondents' petition for injunction which challenges the dismissal Chemo-Technische Mfg., Inc. et.al., docketed as G.R. No.
orders of petitioner. Article 218(e) of the Labor Code does not 107031, is misleading. As correctly argued by the petitioner, no
provide blanket authority to the NLRC or any of its divisions to such pronouncement was made by this Court in said case. On
issue writs of injunction, considering that Section 1 of Rule XI of January 25,1993, we issued a Minute Resolution in the subject
the New Rules of Procedure of the NLRC makes injunction only case stating as follows:
an ancillary remedy in ordinary labor disputes"12cräläwvirtualibräry
"Considering the allegations contained, the issues raised and the
Thus, the NLRC exceeded its jurisdiction when it issued the arguments adduced in the petition for certiorari , as well as the
assailed Order granting private respondents' petition for injunction comments of both public and private respondents thereon, and
and ordering the petitioner to reinstate private Respondents. the reply of the petitioners to private respondent's motion to
dismiss the petition, the Court Resolved to DENY the same for
The argument of the NLRC in its assailed Order that to file an
being premature."
illegal dismissal suit with the labor arbiter is not an "adequate"
remedy since it takes three (3) years before it can be disposed of,
It is clear from the above resolution that we did not in anyway
sustain the action of the NLRC in issuing such temporary
mandatory injunction but rather we dismissed the petition as the
NLRC had yet to rule upon the motion for reconsideration filed by
peitioner. Thus, the minute resolution denying the petition for
being prematurely filed.
Finally, an injunction, as an extraordinary remedy, is not favored
in labor law considering that it generally has not proved to be an
effective means of settling labor disputes.20 It has been the policy
of the State to encourage the parties to use the non-judicial
process of negotiation and compromise, mediation and
arbitration.21 Thus, injunctions may be issued only in cases of
extreme necessity based on legal grounds clearly established, 8. Spic ‘n Span Services v. Paje; Aug 25, 2010
after due consultations or hearing and when all efforts at
conciliation are exhausted which factors, however, are clearly [G.R. No. 174084 : August 25, 2010]
absent in the present case.
SPIC N' SPAN SERVICES CORPORATION, PETITIONER, VS.
WHEREFORE, the petition is hereby GRANTED. The assailed GLORIA PAJE, LOLITA GOMEZ, MIRIAM CATACUTAN,
Orders dated April 3,1995 and May 31,1995, issued by the ESTRELLA ZAPATA, GLORIA SUMANG, JULIET DINGAL, MYRA
National Labor Relations Commission (First Division), in NLRC AMANTE, AND FE S. BERNANDO, RESPONDENTS.
NCR IC No. 000563-95, are hereby REVERSED and SET ASIDE.
DECISION
SO ORDERED.

BRION, J.:
Before the Court is the petition for review on certiorari[1]  filed by
Spic N' Span Services Corporation (SNS) to seek the reversal of
the October 25, 2004 Decision[2] and the August 2, 2006
Resolution[3] of the Court of Appeals (CA) in CA-G.R. SP No.
83215, entitled "Gloria Paje, Lolita Gomez, Miriam Catacutan,
Estrella Zapata, Gloria Sumang, Juliet Dingal, Myra Amante and Fe
S. Bernardo v. National Labor Relations Commission, Spic N Span
Service Corporation and Swift Foods, Inc."
Background Facts

Swift Foods, Inc. (Swift) is a subsidiary of RFM Corporation that

manufactures and processes meat products and other food
products.  SNS's business is to supply manpower services to its
clients for a fee. Swift and SNS have a contract to promote Swift
products.

Inocencio Fernandez, Edelisa F. David, Thelma Guardian, Juliet C.

Dingal, Fe S. Bernardo, Lolita Gomez, Myra Amante, Miriam S.
Catacutan, Gloria O. Sumang, Gloria O. Paje, and Estrella Zapata
(complainants) worked as Deli/Promo Girls of Swift products in
various supermarkets in Tarlac and Pampanga. They were all
dismissed from their employment on February 28, 1998.  They filed
two complaints for illegal dismissal against SNS and Swift before
the National Labor Relations Commission (NLRC) Regional
Arbitration Branch III, San Fernando, Pampanga, docketed as Case
Nos. 03-9131-98 and 07-9295-98.  These cases were subsequently
consolidated.

After two unsuccessful conciliation hearings, the Labor Arbiter

ordered the parties to submit their position papers.  Swift filed its
position paper; SNS did not.[4]  The complainants' position papers
were signed by Florencio P. Peralta who was not a lawyer and who
claimed to be the complainants' representative, although he never
showed any proof of his authority to represent them.

In their position papers, the complainants alleged that they were

employees of Swift and SNS, and their services were terminated REQUIREMENTS OF LAW."
without cause and without due process.  The termination came on
the day they received their notices; thus, they were denied the III.  WHETHER OR NOT THE HONORABLE COURT OF
procedural due process requirements of notice and hearing prior to APPEALS COMMITTED SERIOUS ERROR IN "REMANDING THE
their termination of employment.[5]  Swift, in its position paper, CASE TO THE LABOR ARBITER FOR THE COMPUTATION OF
moved to dismiss the complaints on the ground that it entered into THE MONEY CLAIMS OF THE RESPONDENTS, TO WIT: 1)
an independent labor contract with SNS for the promotion of its BACKWAGES, 2) SEPARATION PAY, AND 3) SERVICE
products; it alleged that the complainants were the employees of INCENTIVE LEAVE," DESPITE THE FACT THAT NOWHERE IN
SNS, not of Swift.[6] THE DECISIONS OF THE LABOR ARBITER, THE NATIONAL
LABOR RELATIONS COMMISSION, AND COURT OF APPEALS
The Labor Arbiter[7] found SNS to be the agent of Swift, and IS IT STATED THAT HEREIN RESPONDENTS WERE
ordered SNS and Swift to jointly and severally pay Edelisa David ILLEGALLY DISMISSED."[13]
P115,637.50 and Inocencio Fernandez P192,197.50, representing
THE COURT'S RULING
their retirement pay and service incentive leave pay.  He dismissed,
without prejudice, the claims of the other complainants because
they failed to verify their position paper.  He also denied all other We find the petition unmeritorious.
claims for lack of factual basis.[8]
SNS submits that since respondents did not sign the verification in
Both Swift and the complainants appealed to the NLRC. Swift filed their position paper, the CA erred when it ruled that the NLRC
a memorandum of appeal, while the complainants filed a partial committed grave abuse of discretion in dismissing the respondents'
memorandum of appeal.[9] complaints. SNS stressed the importance of a signature in a
pleading, and harped on the respondents' failure to sign their
The NLRC denied the complainants' appeal for lack of merit.[10]  It position paper. [14]  This, to SNS, is fatal to the respondents' case.
dismissed the complaint against Swift, and ordered SNS to pay
Edelisa David a total of P256,620.13, and Inocencio Fernandez a We do not agree with SNS.
total of P280,912.63, representing backwages, separation pay, and
service incentive leave pay.  It dismissed all other claims for lack of As we previously explained in Torres v. Specialized Packaging
merit.  Thereafter, Edelisa David and Inocencio Fernandez agreed Development Corporation,[15] where only two of the 25 real parties-
to a settlement, and their cases were thus closed.[11] in-interest signed the verification, the verification by the two could
be sufficient assurance that the allegations in the petition were
The complainants whose claims were dismissed, namely, Gloria made in good faith, are true and correct, and are not speculative.
Paje, Lolita Gomez, Miriam Catacutan, Estrella Zapata, Gloria The lack of a verification in a pleading is only a formal defect, not a
Sumang, Juliet Dingal, Myra Amante, and Fe S. Bernardo jurisdictional defect, and is not necessarily fatal to a case.[16]  The
(respondents), moved for the reconsideration of the NLRC's ruling. primary reason for requiring a verification is simply to ensure that
This time, they were represented by the Public Attorney's Office.  the allegations in the pleading are done in good faith, are true and
The NLRC denied their motion.[12] correct, and are not mere speculations.[17]

The respondents then sought relief with the CA through a petition The CA, in its assailed decision, cited Philippine Telegraph and
for certiorari, based on the alleged grave abuse of discretion Telephone Corporation v. NLRC[18] to emphasize that in labor
committed by the NLRC.  The CA found the petition meritorious, in cases, the deciding authority should use every reasonable means
its assailed decision of October 25, 2004, and ruled that the to speedily and objectively ascertain the facts, without regard to
respondents' failure to sign the verification in their position paper technicalities of law and procedure. Technical rules of evidence are
was a formal defect that was not fatal to their case. It concluded not strictly binding in labor cases.[19]
that SNS was merely an agent of Swift; thus, the latter should not
be exempt from liability. It ordered the remand of the case to the In the hierarchy observed in the dispensation of justice, rules of
Labor Arbiter for the computation of the respondents' backwages, procedure can be disregarded in order to serve the ends of justice. 
separation pay, and service incentive leave pay. SNS and Swift This was explained by Justice Bernando P. Pardo, in Aguam v.
filed their motions for reconsideration which the CA denied. Court of Appeals,[20] when he said -

SNS is now before us on a petition for review on certiorari, and Litigations must be decided on their merits and not on technicality.
submits the following - Every party litigant must be afforded the amplest opportunity for the
proper and just determination of his cause, free from the
I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS unacceptable plea of technicalities. Thus, dismissal of appeals
COMMITTED SERIOUS ERROR WHEN IT RULED THAT THE purely on technical grounds is frowned upon where the policy of the
NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN court is to encourage hearings of appeals on their merits and the
DISMISSING THE CLAIMS OF HEREIN RESPONDENTS "ON rules of procedure ought not to be applied in a very rigid, technical
THE GROUND OF NON-SIGNING OF THE POSITION PAPER." sense; rules of procedure are used only to help secure, not override
substantial justice. It is a far better and more prudent course of
II. WHETHER OR NOT THE HONORABLE COURT OF APPEALS action for the court to excuse a technical lapse and afford the
COMMITTED SERIOUS ERROR IN HOLDING THAT ALTHOUGH parties a review of the case on appeal to attain the ends of justice
THE RESPONDENTS WERE NOT REPRESENTED BY A rather than dispose of the case on technicality and cause a grave
LAWYER BUT BY ONE WHO IS NOT A MEMBER OF THE BAR, injustice to the parties, giving a false impression of speedy disposal
SAID FACT IS "SUFFICIENT JUSTIFICATION FOR THE of cases while actually resulting in more delay, if not a miscarriage
PETITIONERS' FAILURE TO COMPLY WITH THE of justice.[21]
 Significantly, SNS did not raise the question of the CA's failure to
We should remember, too, that certain labor rights assume state that the respondents had been illegally dismissed.  At this
preferred positions in our legal hierarchy.  Under the Constitution point, it is too late for SNS to raise the issue.
and the Labor Code, the State is bound to protect labor and assure
the rights of workers to security of tenure.[22] Article 4 of the Labor Nothing on record indicates the reason for the respondents'
Code provides that all doubts in the implementation and termination from employment, although the fact of termination was
interpretation of its provisions (including its implementing rules and never disputed.  Swift denied liability on the basis of its contract
regulations) shall be resolved in favor of labor.  The Constitution, on with SNS.  The contract was not presented before the Labor
the other hand, characterizes labor as a primary social economic Arbiter, although Swift averred that under the contract, SNS would
force.  The State is bound to "protect the rights of workers and supply promo girls, merchandisers and other promotional personnel
promote their welfare,"[23]  and the workers are "entitled to security to handle all promotional aspects and merchandising strategy of
of tenure, humane conditions of work, and a living wage."[24] Under Swift.[31]  We can assume, for lack of proof to the contrary, that the
these fundamental guidelines, respondents' right to security of respondents' termination from employment was illegal since neither
tenure is a preferred constitutional right that technical infirmities in SNS nor Swift, as employers, presented any proof that their
labor pleadings cannot defeat. termination from employment was legal.  Upon proof of termination
of employment, the employer has the burden of proof that the
1. SNS submits that the CA committed a serious error in ruling that dismissal was valid; absent this proof, the termination from
the respondents' representative's non-membership in the bar is employment is deemed illegal, as alleged by the dismissed
sufficient justification for their failure to comply with the employees.
requirements of the law.  SNS argues that this ruling excuses the
employment of a non-lawyer and places the acts of the latter on the 3. In order that a labor relationship can be categorized as
same level as those of a member of the Bar.[25]   Our Labor Code legitimate/permissible job contracting or as prohibited labor-only
allows a non-lawyer to represent a party before the Labor Arbiter contracting, the totality of the facts and the surrounding
and the Commission,[26] but provides limitations: Non-lawyers may circumstances of the relationship ought to be considered.[32]  Every
appear before the Commission or any Labor Arbiter only: (1) If they case is unique and has to be assessed on the basis of its facts and
represent themselves; or (2) If they represent their organization or of the features of the relationship in question.  In permissible job
members thereof.[27]  Thus, SNS concludes that the respondents' contracting, the principal agrees to put out or farm out with a
representative had no personality to appear before the Labor contractor or subcontractor the performance or completion of a
Arbiter or the NLRC, and his representation for the respondents specific job, work or service within a definite or predetermined
should produce no legal effect. period, regardless of whether such job, work or service is to be
performed or completed within or outside the premises of the
Our approach to these arguments is simple as the problem boils principal.  The test is whether the independent contractor has
down to a balance between a technical rule and protected contracted to do the work according to his own methods and
constitutional interests. The cited technical infirmity cannot defeat without being subject to the principal's control except only as to the
the respondents' preferred right to security of tenure which has results, he has substantial capital, and he has assured the
primacy over technical requirements. Thus, we affirm the CA's contractual employees entitlement to all labor and occupational
ruling on this point, without prejudice to whatever action may be safety and health standards, free exercise of the right to self-
taken against the representative, if he had indeed been engaged in organization, security of tenure, and social and welfare benefits.[33]
the unauthorized practice of law.
The CA found SNS to be Swift's agent, and explained its ruling as
follows[34] -
2. SNS also claims serious error on the part of the CA in remanding
the case to the Labor Arbiter, for computation of the respondents'
To be legitimate, contracting or subcontracting must satisfy the
backwages, separation pay and service incentive leave pay despite
following requirements: 1)  The contractor or subcontractor carries
the fact that nowhere in the decisions of the Labor Arbiter, the
on a distinct and independent business and undertakes to perform
NLRC, and CA was there any finding that respondents had been
the job, work or service on its own account and under its own
illegally dismissed.
responsibility, according to its own manners and methods, and free
from the control and direction of the principal in all matters
We find this to be the first argument of its kind from SNS, and, in
connected with the performance of the work except as to the results
fact, is the first ever submission from SNS before it filed a motion
thereof; 2)  the contractor or subcontractor has substantial capital
for reconsideration with the CA. To recall, SNS did not file its
or investment; and 3)  the agreement between the principal and
position paper before the labor arbiter, nor did it file its appeal
contractor or subcontractor assures the contractual employees'
before the NLRC; only Swift and the complainants did.[28]  It was
entitlement to all labor and occupational safety and health
only Swift, too, that filed its comment to the herein respondents'
standards, free exercise of right to self-organization, security of
petition for certiorari.[29]
tenure, and social and welfare benefit (Vinoya v. NLRC, 324 SCRA
469).
The records do not show if SNS filed its memorandum before the
CA, although SNS filed a motion for reconsideration of the CA
The parties failed to attach a copy of the agreement entered into
decision.  It then claimed that the CA erred in ruling that the NLRC
between SNS and Swift. Neither did they attach a copy of the
committed grave abuse of discretion when it dismissed
financial statement of SNS.  Thus, we are constrained to rule on the
respondents' claim; that a petition for certiorari under Rule 65 of the
issue involved on the basis of the findings of both the Labor Arbiter
Rules of Court is not the proper remedy to correct the NLRC's
and the NLRC.
alleged grave abuse of discretion; and that the respondents were
bound by the mistakes of their non-lawyer representative.[30] 
The Labor Arbiter, in finding that SNS was merely a labor-only
contractor, cited the following reasons:  First, the agreement amount at P30,000.00 for each of the respondents.
between SNS and Swift shows that the latter exercised control over
the promo girls and/or merchandisers through the services of WHEREFORE, premises considered, we hereby AFFIRM the Court
coordinators.  Second, it cannot be said that SNS has substantial of Appeals' October 25, 2004 Decision and August 2, 2006
capital.  Third, the duties of the petitioners were directly related, Resolution in CA-G.R. SP No. 83215, with the modification that
necessary and vital to the day-to-day operations of Swift.  Lastly, nominal damages in the amount of P30,000.00 should additionally
the uniform and identification cards used by the petitioners were be paid to each of the respondents, for violation of their procedural
subject to the approval of Swift. due process rights.  Costs against the petitioner.

The NLRC, on the other hand, in finding that SNS is an SO ORDERED.

independent contractor gave the following reasons:  First, there is
no evidence that Swift exercised the power of control over the
petitioners.  Rather, it is SNS who exercised direct control and 9. ABBOTT v NLRC, 145 SCRA 206
supervision over the nature and performance of the works of herein
petitioners.  Second, by law, Swift and SNS have distinct and G.R. No. 76959 October 12, 1987
separate juridical personality from each other. ABBOTT LABORATORIES (PHILIPPINES), INC., and JAIME C.
VICTA petitioners,
The decision of the NLRC is bereft of explanation as to the vs.
existence of circumstances that would make SNS an independent NATIONAL LABOR RELATIONS COMMISISON and ALBERT
contractor as would exempt the "principal" from liabilities to the BOBADILLA respondents.
employees.

Nowhere in the decision of both the Labor Arbiter and the NLRC
GUTIERREZ, JR., J.:
shows that SNS had full control of the means and methods of the
performance of their work.  Moreover, as found by the Labor This is a petition for review on certiorari of the decision of
Arbiter, there was no evidence that SNS has substantial capital or respondent National Labor Relations Commission (NLRC) which
investment.  Lastly, there was no finding by the Labor Arbiter nor set aside the Labor Arbiter's decision dismissing the complaint and
the NLRC that the agreement between the principal (Swift) and instead entered a new decision ordering the complainant's
contractor (SNS) assures the contractual employees' entitlement to reinstatement with full backwages from the date of his termination
all labor and occupational safety and health standards, free until his actual reinstatement.
exercise of right to self-organization, security of tenure, and social
and welfare benefit. The antecedent facts as found by the labor Arbiter and reiterated
in the NLRC decision are undisputed:
In view of the foregoing, we conclude that the requisites above- Complainant Bobadilla started his employment with respondent
mentioned are not obtaining in the present case.  Hence, SNS is company sometime in May 1982. After undergoing training, in
considered merely an agent of Swift which does not exempt the September, 1982, competent was designated professional medical
latter from liability. representative (PMR) and was assigned to cover the sales territory
comprising of Sta. Cruz, Binondo and a part of Quiapo and
We note that the present decision does not affect the settlement Divisoria, of the Metro Manila district. In connection with the
entered into between Edeliza David and Inocencio Fernandez, on respondent company's marketing and sales operations, it has
the one hand and SNS, on the other.  As held by the NLRC, their been its policy and established practice of undertaking
complaints are considered closed and terminated. employment movements and/or reassignments from one territorial
area to another as the exigencies of its operations require and to
WHEREFORE, premises considered, the instant petition is hereby hire only applicant salesmen, including professional medical
GRANTED.  The Resolutions of the NLRC dated January 11, 2002 representatives (PMRs) who are willing to take provincial
and December 23, 2003 are SET ASIDE in so far as the dismissal assignments, at least insofar as male applicants were concerned.
of the petitioners' case is concerned and in so far as Swift is found Likewise, respondent company had made reassignments or
not liable for the payment of the petitioners' money claims. transfers of sales personnel which included PMRs from one
territorial area of responsibility to another on a more or less regular
The present case is hereby REMANDED to the Labor Arbiter for basis.
the computation of the money claims of the petitioners, to wit: 1)
Backwages; 2) Separation Pay; and 3) Service Incentive Leave In complainant's application for employment with respondent
Pay. company, he agreed to the following: 1) that if employed he win
accept assignment in the provinces and/or cities anywhere in the
The settlement of the claims of David and Fernandez is not affected Philippines; 2) he is willing and can move into and live in the
by this decision. territory assigned to him; and (3) that should any answer or
statement in his application for employment be found false or
incorrect, he will be subject to immediate dismissal, if then
We fully agree with this ruling.  What we have before us, therefore, employed.
is a case of illegal dismissal perpetrated by a principal and its illegal
contractor-agent.  Thus, we affirm the ruling of the CA with the On 22 July 1983, respondent Victa called competent to his office
modification that the respondents are also entitled to nominal and informed the latter that he was being transferred effective 1
damages, for violation of their due process rights to notice and August 1983 to the newly opened Cagayan territory comprising the
hearing, pursuant to our ruling in Agabon v. NLRC.[35]  We peg this provinces of Cagayan, Nueva Vizcaya and Isabela. The transfer
order was made formal in a memorandum dated 29 July 1983. When asked to comment on the petition as counsel for NLRC, the
Among the reasons given for complainant's selection as PMR for Solicitor General, assisted by Assistant Solicitor General Zoilo A.
the Cagayan territory were: The territory required a veteran and Andin and Trial Attorney Alexander Q. Gesmundo, agreed with the
seasoned PMR who can operate immediately with minimum petitioners' stand that the dismissal of the private respondent from
training and supervision. Likewise, a PMR who can immediately his employment was for valid reasons.
exploit the vast business potential of the area.
The main issue in this case is whether or not Albert Bobadilla
In a letter dated 1 August 1983, which was received by Abbott on could be validly dismissed from his employment on the ground of
4 August 1983, competent, thru his lawyer, objected to the transfer insubordination for refusing to accept his new assignment.
on the grounds that it was not only a demotion but also personal
We are constrained to answer in the affirmative.
and punitive in nature without basis legally and factually.
The hiring, firing, transfer, demotion, and promotion of employees
On 8 August 1983, Victa issued another inter-office
has been traditionally Identified as a management prerogative
correspondence to competent, giving the latter up to 15 August
subject to limitations found in law, a collective bargaining
1983 within which to comply with the transfer order, otherwise his
agreement, or general principles of fair play and justice. This is a
would be dropped from the payroll for having abandoned his job.
function associated with the employer's inherent right to control
When competent failed to report to his new assignment, Abbott
and manage effectively its enterprise. Even as the law is solicitous
assigned thereat Fausto Antonio T. Tibi another PED PMR who
of the welfare of employees, it must also protect the right of an
was priorly covering the provinces of Nueva Ecija and Tarlac.
employer to exercise what are clearly management prerogatives.
Meanwhile, complainant filed applications for vacation leave from The free who of management to conduct its own business affairs
2 to 9 August 1983, and then from 10 to 13 August 1983. And on to achieve its purpose cannot be denied. (See Dangan vs.
18 August 1983, he filed the present complaint. National Labor Relations Commission, 127 SCRA 706).
After due consideration of the evidence adduced by the parties, As a general rule, the right to transfer or reassign an employee is
the Arbiter below ruled for the respondent on the ground that the recognized as an employer's exclusive right and the prerogative of
complainant is guilty of gross insubordination. (pp. 17-19, Rollo; management.
pp. 1-3, NLRC decision)
We agree with the Labor Arbiter's conclusions that:
On appeal, the respondent National Labor Relations Commission
Settled is the rule in this regard that an employer, except when
reversed the Arbiter's decision and held that herein petitioners had
cited by special laws, has the right to regulate, according to his
no valid and justifiable reason to dismiss the complainant. The
own discretion and judgment, all aspects of employment, which
National Labor Relations Commission ordered the latter's
includes, among others, hiring, work assignments, place and
reinstatement with backwages.
manner of work, working regulations and transfer of employees in
A motion for reconsideration subsequently filed by the petitioners accordance with his operational demands and requirements. This
was denied. right flows from ownership and from the established rule that labor
law does not authorize the substitution of judgment of the
On September 8, 1986, the petitioners filed their second motion for
employer in the conduct of his business, unless it is shown to be
reconsideration which was not favorably acted upon by respondent
contrary to law, morals or public policy (NLU vs. Insular-Yebana
National Labor Relations Commission as the record of the case
Tobacco Corp., 2 SCRA 924, 931; and Republic Savings Bank vs.
had already been transmitted to the labor arbiter for the execution
Court of Industrial Relations, 21 SCRA 226, 235).
of its decision.
... Abbott, in accordance with the demands and requirements of its
On December 16, 1986, the petitioners and the private respondent
marketing and sales operations, adopted a policy to hire only sales
agreed before the labor arbiter that the former would bring the
applicants who are willing to accept assignments in the provinces
case before this Court.
anywhere in the Philippines, and to move into and live in the
Hence, this present petition. territory assigned to them.

Petitioners assigned as errors the following: The existence and implementation of this policy are clearly
discernible from the questions appearing in the application form
... [R]espondent NLRC acted in excess of jurisdiction and/or grave under the heading:"TO BE FILLED BY SALES APPLICANTS
abuse of discretion in that — ONLY," and the fact that Abbott, depending upon the needs of its
a] Respondent NLRC disregarded settled law and altered the marketing and sales operations, periodically made transfers or
parties' contract when it stated that private respondent's prior reassignment of its sales people.
consent was necessary for the validity of his transfer, rendering his Complainant was precisely hired because he manifested at the
consequent dismissal for insubordination illegal. outset as a job applicant his willingness to follow the conditions of
b] Granting arguendo that prior consent of an employee is required his employment. In line with the policy, as practiced, Abbott, thru
for the validity of his transfer to another territory, private Jaime Victa, issued an inter-office correspondence transferring
respondent had explicitly given such prior consent as a condition complainant to a newly opened sales territory-the Cagayan
for his hiring and continued employment by petitioner Abbott, Region, comprising the provinces of Cagayan, Nueva Vizcaya and
Isabela. According to respondents, complainant was selected as
c] Respondent NLRC abused its discretion when it declared PMR for the region primarily because he was a veteran and
private respondent's dismissal illegal despite his clear and willfull seasoned PMR who can operate immediately with minimum
insubordination. (pp. 7, 10 and 11, Rollo). training and supervision.
That complainant is a veteran and seasoned PMR is admitted. In
fact, it is even conceded by respondents that complainant was the
leader of his peers in PED as indicated in the letter dated 20
December 1982 of Jaime Victa to complainant. That the Cagayan
Region is relatively inaccessible cannot be debated. That the
territory needed a responsible PMR who could work under the
least supervision is a judgment of respondents. And that this
judgment was arrived at upon consultations among the PED
Marketing Manager Jaime Victa, the Director for Administration
Francisco Lim, and the General Manager A. C. Bout has been
proven by respondents.
10. ST. MARTIN’S FUNERAL HOMES v. NLRC; Sept. 16,
It appearing, therefore, that the order to transfer complainant is
1988
based upon a judgment of his employer Abbott, which judgment to
transfer is in the with a company practice which is not contrary to G.R. No. 130866 September 16, 1998
law, morals or public policy, hence, beyond the competence of this
office to question, the refusal of complainant to obey the lawful ST. MARTIN FUNERAL HOME, petitioner,
order of Abbott is gross insubordination — a valid cause for vs.
dismissal. NATIONAL LABOR RELATIONS COMMISSION and
BIENVENIDO ARICAYOS, respondents.
Complainant asserted that the true reason for his transfer was the
personal ill motives on the part of respondent Victa who resented REGALADO, J.:
the derogatory remarks attributed to him, as purportedly shown in The present petition for certiorari stemmed from a complaint for
Victa's memoranda dated 20 December 1982 and 26 April 1983. illegal dismissal filed by herein private respondent before the
However, a cursory reading of said memoranda in question who National Labor Relations Commission (NLRC), Regional
show that the same were legitimately issued by Victa in the Arbitration Branch No. III, in San Fernando, Pampanga. Private
exercise of his functions as PED Manager. And the fact that respondent alleges that he started working as Operations
complainant never lifted a finger to formally question said Manager of petitioner St. Martin Funeral Home on February 6,
memoranda is a mute admission on his part that the allegations 1995. However, there was no contract of employment executed
therein are true. between him and petitioner nor was his name included in the
Complainant also alleged that his transfer was a demotion. semi-monthly payroll. On January 22, 1996, he was dismissed
However, no explanation was given much less any evidence from his employment for allegedly misappropriating P38,000.00
presented in support of the allegation. On the other hand, it is clear which was intended for payment by petitioner of its value added
that there was no change in complainant's position and salary, tax (VAT) to the Bureau of Internal Revenue (BIR). 1
privileges and benefits he was receiving while in Manila. With Petitioner on the other hand claims that private respondent was
respect to the sales commission, Abbott claimed that had not its employee but only the uncle of Amelita Malabed, the owner
complainant accepted the assignment, he could have earned more of petitioner St. Martin's Funeral Home. Sometime in 1995,
because the sales prospects in the Cagayan Territory, which private respondent, who was formerly working as an overseas
comprises Nueva Vizcaya, Isabela and Cagayan Province were contract worker, asked for financial assistance from the mother of
much higher than the territory assigned to him in Manila. Besides, Amelita. Since then, as an indication of gratitude, private
the assignment offered an important avenue for future promotion, respondent voluntarily helped the mother of Amelita in overseeing
respondent concluded. (pp. 6-9, Labor Arbiter's decision). the business.
Therefore, Bobadilla had no valid reason to disobey the order of In January 1996, the mother of Amelita passed away, so the latter
transfer. He had tacitly given his consent thereto when he acceded then took over the management of the business. She then
to the petitioners' policy of hiring sales staff who are willing to be discovered that there were arrears in the payment of taxes and
assigned anywhere in the Philippines which is demanded by the other government fees, although the records purported to show
petitioners' business. that the same were already paid. Amelita then made some
By the very nature of his employment, a drug salesman or medical changes in the business operation and private respondent and his
representative is expected to travel. He should anticipate wife were no longer allowed to participate in the management
reassignment according to the demands of their business. It would thereof. As a consequence, the latter filed a complaint charging
be a poor drug corporation which cannot even assign its that petitioner had illegally terminated his employment.2
representatives or detail men to new markets calling for opening or Based on the position papers of the parties, the labor arbiter
expansion or to areas where the need for pushing its products is rendered a decision in favor of petitioner on October 25, 1996
great. More so if such reassignments are part of the employment declaring that no employer-employee relationship existed
contract. between the parties and, therefore, his office had no jurisdiction
WHEREFORE, the petition is hereby GRANTED. The questioned over the case. 3
decision of the National Labor Relations Commission is SET Not satisfied with the said decision, private respondent appealed
ASIDE. The decision of the labor Arbiter dated April 16,1985 is to the NLRC contending that the labor arbiter erred (1) in not
REINSTATED. giving credence to the evidence submitted by him; (2) in holding
SO ORDERED. that he worked as a "volunteer" and not as an employee of St.
Martin Funeral Home from February 6, 1995 to January 23, 1996,
or a period of about one year; and (3) in ruling that there was no Rule has now fixed the reglementary period of sixty days from
employer-employee relationship between him and petitioner.4 notice of the decision. Curiously, although the 10-day period for
finality of the decision of the NLRC may already have lapsed as
On June 13, 1997, the NLRC rendered a resolution setting aside
contemplated in Section 223 of the Labor Code, it has been held
the questioned decision and remanding the case to the labor
that this Court may still take cognizance of the petition
arbiter for immediate appropriate proceedings.5 Petitioner then
for certiorari on jurisdictional and due process considerations if
filed a motion for reconsideration which was denied by the NLRC
filed within the reglementary period under Rule 65. 14
in its resolution dated August 18, 1997 for lack of merit,6 hence
the present petition alleging that the NLRC committed grave Turning now to the matter of judicial review of NLRC decisions,
abuse of discretion.7 B.P. No. 129 originally provided as follows:
Before proceeding further into the merits of the case at bar, the Sec. 9. Jurisdiction. — The Intermediate Appellate Court shall
Court feels that it is now exigent and opportune to reexamine the exercise:
functional validity and systemic practicability of the mode of
(1) Original jurisdiction to issue writs of mandamus,
judicial review it has long adopted and still follows with respect to
prohibition, certiorari, habeas corpus, and quo warranto, and
decisions of the NLRC. The increasing number of labor disputes
auxiliary writs or processes, whether or not in aid of its appellate
that find their way to this Court and the legislative changes
jurisdiction;
introduced over the years into the provisions of Presidential
Decree (P.D.) No. 442 (The Labor Code of the Philippines and (2) Exclusive original jurisdiction over actions for annulment of
Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary judgments of Regional Trial Courts; and
Reorganization Act of 1980) now stridently call for and warrant a
reassessment of that procedural aspect. (3) Exclusive appellate jurisdiction over all final judgments,
decisions, resolutions, orders, or awards of Regional Trial Courts
We prefatorily delve into the legal history of the NLRC. It was first and quasi-judicial agencies, instrumentalities, boards, or
established in the Department of Labor by P.D. No. 21 on commissions, except those falling within the appellate jurisdiction
October 14, 1972, and its decisions were expressly declared to of the Supreme Court in accordance with the Constitution, the
be appealable to the Secretary of Labor and, ultimately, to the provisions of this Act, and of subparagraph (1) of the third
President of the Philippines. paragraph and subparagraph (4) of the fourth paragraph of
Section 17 of the Judiciary Act of 1948.
On May 1, 1974, P.D. No. 442 enacted the Labor Code of the
Philippines, the same to take effect six months after its The Intermediate Appellate Court shall have the power to try
promulgation. 8 Created and regulated therein is the present cases and conduct hearings, receive evidence and perform any
NLRC which was attached to the Department of Labor and and all acts necessary to resolve factual issues raised in cases
Employment for program and policy coordination only.9 Initially, falling within its original and appellate jurisdiction, including the
Article 302 (now, Article 223) thereof also granted an aggrieved power to grant and conduct new trials or further proceedings.
party the remedy of appeal from the decision of the NLRC to the
Secretary of Labor, but P.D. No. 1391 subsequently amended These provisions shall not apply to decisions and interlocutory
said provision and abolished such appeals. No appellate review orders issued under the Labor Code of the Philippines and by the
has since then been provided for. Central Board of Assessment Appeals. 15

Thus, to repeat, under the present state of the law, there is no Subsequently, and as it presently reads, this provision was
provision for appeals from the decision of the NLRC. 10 The amended by R.A. No. 7902 effective March 18, 1995, to wit:
present Section 223, as last amended by Section 12 of R.A. No. Sec. 9. Jurisdiction. — The Court of Appeals shall exercise:
6715, instead merely provides that the Commission shall decide
all cases within twenty days from receipt of the answer of the (1) Original jurisdiction to issue writs of mandamus,
appellee, and that such decision shall be final and executory after prohibition, certiorari, habeas corpus, and quo warranto, and
ten calendar days from receipt thereof by the parties. auxiliary writs or processes, whether or not in aid of its appellate
jurisdiction;
When the issue was raised in an early case on the argument that
this Court has no jurisdiction to review the decisions of the NLRC, (2) Exclusive original jurisdiction over actions for annulment of
and formerly of the Secretary of Labor, since there is no legal judgments of Regional Trial Courts; and
provision for appellate review thereof, the Court nevertheless
(3) Exclusive appellate jurisdiction over all final judgments,
rejected that thesis. It held that there is an underlying power of
decisions, resolutions, orders or awards of Regional Trial Courts
the courts to scrutinize the acts of such agencies on questions of
and quasi-judicial agencies, instrumentalities, boards or
law and jurisdiction even though no right of review is given by
commissions, including the Securities and Exchange
statute; that the purpose of judicial review is to keep the
Commission, the Social Security Commission, the Employees
administrative agency within its jurisdiction and protect the
Compensation Commission and the Civil Service Commission,
substantial rights of the parties; and that it is that part of the
except those falling within the appellate jurisdiction of the
checks and balances which restricts the separation of powers and
Supreme Court in accordance with the Constitution, the Labor
forestalls arbitrary and unjust adjudications. 11
Code of the Philippines under Presidential Decree No. 442, as
Pursuant to such ruling, and as sanctioned by subsequent amended, the provisions of this Act, and of subparagraph (1) of
decisions of this Court, the remedy of the aggrieved party is to the third paragraph and subparagraph (4) of the fourth paragraph
timely file a motion for reconsideration as a precondition for any of Section 17 of the Judiciary Act of 1948.
further or subsequent remedy, 12 and then seasonably avail of the
The Court of Appeals shall have the power to try cases and
special civil action of certiorari under Rule 65, 13 for which said
conduct hearings, receive evidence and perform any and all acts
necessary to resolve factual issues raised in cases falling within Court of Appeals. However, because of the aforementioned
its original and appellate jurisdiction, including the power to grant amendment by transposition, also supposedly excluded are cases
and conduct new trials or further proceedings. Trials or hearings falling within the appellate jurisdiction of the Supreme Court in
in the Court of Appeals must be continuous and must be accordance with the Labor Code. This is illogical and
completed within, three (3) months, unless extended by the Chief impracticable, and Congress could not have intended that
Justice. procedural gaffe, since there are no cases in the Labor Code the
decisions, resolutions, orders or awards wherein are within
It will readily be observed that, aside from the change in the name
the appellate jurisdiction of the Supreme Court or of any other
of the lower appellate court, 16 the following amendments of the
court for that matter.
original provisions of Section 9 of B.P. No. 129 were effected by
R.A. No. 7902, viz.: A review of the legislative records on the antecedents of R.A. No.
7902 persuades us that there may have been an oversight in the
1. The last paragraph which excluded its application to the Labor
course of the deliberations on the said Act or an imprecision in
Code of the Philippines and the Central Board of Assessment the terminology used therein. In fine, Congress did intend to
Appeals was deleted and replaced by a new paragraph granting
provide for judicial review of the adjudications of the NLRC in
the Court of Appeals limited powers to conduct trials and hearings
labor cases by the Supreme Court, but there was an inaccuracy
in cases within its jurisdiction.
in the term used for the intended mode of review. This conclusion
2. The reference to the Labor Code in that last paragraph was which we have reluctantly but prudently arrived at has been
transposed to paragraph (3) of the section, such that the original drawn from the considerations extant in the records of Congress,
exclusionary clause therein now provides "except those falling more particularly on Senate Bill No. 1495 and the Reference
within the appellate jurisdiction of the Supreme Court in Committee Report on S. No. 1495/H. No. 10452. 18
accordance with the Constitution, the Labor Code of the
In sponsoring Senate Bill No. 1495, Senator Raul S. Roco
Philippines under Presidential Decree No. 442, as amended, the
delivered his sponsorship speech 19 from which we reproduce the
provisions of this Act, and of subparagraph (1) of the third
following excerpts:
paragraph and subparagraph (4) of the fourth paragraph of
Section 17 of the Judiciary Act of 1948." (Emphasis supplied). The Judiciary Reorganization Act, Mr. President, Batas
Pambansa Blg. 129, reorganized the Court of Appeals and at the
3. Contrarily, however, specifically added to and included among
same time expanded its jurisdiction and powers. Among others,
the quasi-judicial agencies over which the Court of Appeals shall
its appellate jurisdiction was expanded to cover not only final
have exclusive appellate jurisdiction are the Securities and
judgment of Regional Trial Courts, but also all final judgment(s),
Exchange Commission, the Social Security Commission, the
decisions, resolutions, orders or awards of quasi-judicial
Employees Compensation Commission and the Civil Service
agencies, instrumentalities, boards and commissions, except
Commission.
those falling within the appellate jurisdiction of the Supreme Court
This, then, brings us to a somewhat perplexing impassè, both in in accordance with the Constitution, the provisions of BP Blg. 129
point of purpose and terminology. As earlier explained, our mode and of subparagraph 1 of the third paragraph and subparagraph 4
of judicial review over decisions of the NLRC has for some time of Section 17 of the Judiciary Act of 1948.
now been understood to be by a petition for certiorari under Rule
Mr. President, the purpose of the law is to ease the workload of
65 of the Rules of Court. This is, of course, a special original
the Supreme Court by the transfer of some of its burden of review
action limited to the resolution of jurisdictional issues, that is, lack
of factual issues to the Court of Appeals. However, whatever
or excess of jurisdiction and, in almost all cases that have been
benefits that can be derived from the expansion of the appellate
brought to us, grave abuse of discretion amounting to lack of
jurisdiction of the Court of Appeals was cut short by the last
jurisdiction.
paragraph of Section 9 of Batas Pambansa Blg. 129 which
It will, however, be noted that paragraph (3), Section 9 of B.P. No. excludes from its coverage the "decisions and interlocutory
129 now grants exclusive appellate jurisdiction to the Court of orders issued under the Labor Code of the Philippines and by the
Appeals over all final adjudications of the Regional Trial Courts Central Board of Assessment Appeals.
and the quasi-judicial agencies generally or specifically referred to
Among the highest number of cases that are brought up to the
therein except, among others, "those falling within
Supreme Court are labor cases. Hence, Senate Bill No. 1495
the appellate jurisdiction of the Supreme Court in accordance
seeks to eliminate the exceptions enumerated in Section 9 and,
with . . . the Labor Code of the Philippines under Presidential
additionally, extends the coverage of appellate review of the
Decree No. 442, as amended, . . . ." This would necessarily
Court of Appeals in the decision(s) of the Securities and
contradict what has been ruled and said all along that appeal
Exchange Commission, the Social Security Commission, and the
does not lie from decisions of the NLRC. 17 Yet, under such
Employees Compensation Commission to reduce the number of
excepting clause literally construed, the appeal from the NLRC
cases elevated to the Supreme Court. (Emphases and
cannot be brought to the Court of Appeals, but to this Court by
corrections ours)
necessary implication.
x x x           x x x          x x x
The same exceptive clause further confuses the situation by
declaring that the Court of Appeals has no appellate jurisdiction Senate Bill No. 1495 authored by our distinguished Colleague
over decisions falling within the appellate jurisdiction of the from Laguna provides the ideal situation of drastically reducing
Supreme Court in accordance with the Constitution, the the workload of the Supreme Court without depriving the litigants
provisions of B.P. No. 129, and those specified cases in Section of the privilege of review by an appellate tribunal.
17 of the Judiciary Act of 1948. These cases can, of course, be
properly excluded from the exclusive appellate jurisdiction of the
In closing, allow me to quote the observations of former Chief The Court is, therefore, of the considered opinion that ever since
Justice Teehankee in 1986 in the Annual Report of the Supreme appeals from the NLRC to the Supreme Court were eliminated,
Court: the legislative intendment was that the special civil action
of certiorari  was and still is the proper vehicle for judicial review
. . . Amendatory legislation is suggested so as to relieve the
of decisions of the NLRC. The use of the word "appeal" in relation
Supreme Court of the burden of reviewing these cases which
thereto and in the instances we have noted could have been
present no important issues involved beyond the particular fact
a lapsus plumae because appeals by certiorari and the original
and the parties involved, so that the Supreme Court may wholly
action for certiorari are both modes of judicial review addressed to
devote its time to cases of public interest in the discharge of its
the appellate courts. The important distinction between them,
mandated task as the guardian of the Constitution and the
however, and with which the Court is particularly concerned here
guarantor of the people's basic rights and additional task
is that the special civil action of certiorari is within the concurrent
expressly vested on it now "to determine whether or not there has
original jurisdiction of this Court and the Court of
been a grave abuse of discretion amounting to lack of jurisdiction
Appeals; 23 whereas to indulge in the assumption that appeals
on the part of any branch or instrumentality of the Government.
by certiorari to the Supreme Court are allowed would not
We used to have 500,000 cases pending all over the land, Mr. subserve, but would subvert, the intention of Congress as
President. It has been cut down to 300,000 cases some five years expressed in the sponsorship speech on Senate Bill No. 1495.
ago. I understand we are now back to 400,000 cases. Unless we
Incidentally, it was noted by the sponsor therein that some
distribute the work of the appellate courts, we shall continue to
quarters were of the opinion that recourse from the NLRC to the
mount and add to the number of cases pending.
Court of Appeals as an initial step in the process of judicial review
In view of the foregoing, Mr. President, and by virtue of all the would be circuitous and would prolong the proceedings. On the
reasons we have submitted, the Committee on Justice and contrary, as he commendably and realistically emphasized, that
Human Rights requests the support and collegial approval of our procedure would be advantageous to the aggrieved party on this
Chamber. reasoning:

x x x           x x x          x x x On the other hand, Mr. President, to allow these cases to be

appealed to the Court of Appeals would give litigants the
Surprisingly, however, in a subsequent session, the following advantage to have all the evidence on record be reexamined and
Committee Amendment was introduced by the said sponsor and reweighed after which the findings of facts and conclusions of
the following proceedings transpired: 20 said bodies are correspondingly affirmed, modified or reversed.
Senator Roco. On page 2, line 5, after the line "Supreme Court in Under such guarantee, the Supreme Court can then apply strictly
accordance with the Constitution," add the phrase "THE LABOR the axiom that factual findings of the Court of Appeals are final
CODE OF THE PHILIPPINES UNDER P.D. 442, AS AMENDED." and may not be reversed on appeal to the Supreme Court. A
So that it becomes clear, Mr. President, that issues arising from perusal of the records will reveal appeals which are factual in
the Labor Code will still be appealable to the Supreme Court. nature and may, therefore, be dismissed outright by minute
The President. Is there any objection? (Silence) Hearing none, resolutions. 24
the amendment is approved. While we do not wish to intrude into the Congressional sphere on
Senator Roco. On the same page, we move that lines 25 to 30 be the matter of the wisdom of a law, on this score we add the
deleted. This was also discussed with our Colleagues in the further observations that there is a growing number of labor cases
House of Representatives and as we understand it, as approved being elevated to this Court which, not being a trier of fact, has at
in the House, this was also deleted, Mr. President. times been constrained to remand the case to the NLRC for
resolution of unclear or ambiguous factual findings; that the Court
The President. Is there any objection? (Silence) Hearing none, of Appeals is procedurally equipped for that purpose, aside from
the amendment is approved. the increased number of its component divisions; and that there is
undeniably an imperative need for expeditious action on labor
Senator Roco. There are no further Committee amendments, Mr.
cases as a major aspect of constitutional protection to labor.
President.
Therefore, all references in the amended Section 9 of B.P. No.
Senator Romulo. Mr. President, I move that we close the period
129 to supposed appeals from the NLRC to the Supreme Court
of Committee amendments.
are interpreted and hereby declared to mean and refer to petitions
The President. Is there any objection? (Silence) Hearing none, for certiorari under Rule 65. Consequently, all such petitions
the amendment is approved. (Emphasis supplied). should hence forth be initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts as the
x x x           x x x          x x x appropriate forum for the relief desired.
Thereafter, since there were no individual amendments, Senate Apropos to this directive that resort to the higher courts should be
Bill No. 1495 was passed on second reading and being a certified made in accordance with their hierarchical order, this
bill, its unanimous approval on third reading followed. 21 The pronouncement in Santiago vs. Vasquez, et al. 25 should be taken
Conference Committee Report on Senate Bill No. 1495 and into account:
House Bill No. 10452, having theretofore been approved by the
House of Representatives, the same was likewise approved by One final observation. We discern in the proceedings in this case
the Senate on February 20, 1995, 22 inclusive of the dubious a propensity on the part of petitioner, and, for that matter, the
formulation on appeals to the Supreme Court earlier discussed. same may be said of a number of litigants who initiate recourses
before us, to disregard the hierarchy of courts in our judicial
system by seeking relief directly from this Court despite the fact
that the same is available in the lower courts in the exercise of
their original or concurrent jurisdiction, or is even mandated by
law to be sought therein. This practice must be stopped, not only
because of the imposition upon the precious time of this Court but
also because of the inevitable and resultant delay, intended or
otherwise, in the adjudication of the case which often has to be
remanded or referred to the lower court as the proper forum
under the rules of procedure, or as better equipped to resolve the
issues since this Court is not a trier of facts. We, therefore,
reiterate the judicial policy that this Court will not entertain direct
resort to it unless the redress desired cannot be obtained in the
appropriate courts or where exceptional and compelling
circumstances justify availment of a remedy within and calling for 11. U-bix Corp. v. Valerie Hollero; July 13, 2015
the exercise of our primary jurisdiction. G.R. No. 199660, July 13, 2015
WHEREFORE, under the foregoing premises, the instant petition U-BIX CORPORATION AND EDILBERTO B.
for certiorari is hereby REMANDED, and all pertinent records BRAVO, Petitioners, v. VALERIE ANNE H.
thereof ordered to be FORWARDED, to the Court of Appeals for HOLLERO, Respondent.
appropriate action and disposition consistent with the views and
ruling herein set forth, without pronouncement as to costs. RESOLUTION

SO ORDERED. DEL CASTILLO, J.:

This is a Petition for Review on Certiorari1 of the Court of Appeals
(CA) Decision2 dated August 9, 2011 and Resolution3 dated
December 7, 2011 in CA-G.R. SP No. 117199, which affirmed the
National Labor Relations Commission (NLRC) Resolution4 dated
June 29, 2010 and Resolution5 dated September 27, 2010
denying the appeal of petitioners U-Bix Corporation and Edilberto
B. Bravo (petitioners) from Labor Arbiter Enrique S. Flores, Jr.'s
(Labor Arbiter Flores) Order6 dated April 16, 2010 approving the
recomputation of the monetary award in favor of respondent
Valerie Anne, H. Hollero (respondent) and ordering the issuance
of a writ of execution.
 
Factual Antecedents

Petitioners filed a complaint against respondent for

reimbursement of training costs plus interest, exemplary
damages, attorney's fees and litigation expenses, docketed as
NLRC-NCR-Case No. 00-05-03696-97. On the other hand,
respondent filed against petitioners a complaint for illegal
dismissal, unpaid wages, backwages, moral and exemplary
damages, and attorney's fees, docketed as NLRC-NCR-Case No.
00-08-05988-97. The two complaints were later on consolidated.

In a Decision7 dated February 8, 1999, the Labor Arbiter found

respondent's dismissal to be valid; she was also ordered to
reimburse the amount spent by petitioners for her training, with
interest at the rate of 12% per annum.8

On appeal, the NLRC reversed the Labor Arbiter's Decision.

Finding respondent to have been illegally dismissed, it awarded
her backwages from the date of her dismissal up to the date of
the NLRC Decision and separation pay in lieu of reinstatement
due to strained relations. Anent petitioners' complaint for
reimbursement, the NLRC held that the same is one for collection
of sum of money over which it has no jurisdiction. Hence, the
dispositive portion of the NLRC Resolution dated July 12, 1999:9
WHEREFORE, premises considered, the assailed decision dated
February 8, 1999, is hereby REVERSED and SET ASIDE and a
new one entered as follows:
A. Dismissing the complaint of the [petitioner] U-BFX Accordingly, Labor Arbiter Flores issued a Writ of
CORPORATION, in NLRC NCR Case No. 00-05-03696-97 for Execution23 dated April 20, 2010.
lack of jurisdiction; and
Ruling of the National Labor Relations Commission
B. Finding the dismissal of [respondent] Valerie Anne H. Hollero
in NLRC NCR Case No. 00-08-05988-97 to be illegal thereby Petitioners filed before the NLRC a Notice and Memorandum of
ordering [petitioners] U-BIX CORPORATION/Edilberto B. Bravo Appeal.24 At the same time, they posted a corresponding
to pay the former the following: supersedeas bond issued by Mapfre Insular Insurance
Corporation (Mapfre) in the amount of P3,270,512.82.
1. Subsequently, petitioners also filed an Omnibus Motion to Quash
Backwage P520,000.00   Writ of Execution and to Lift Order of Garnishment.
s
2.
In a Resolution25 dated June 29, 2010, the NLRC denied for lack
Separation 60,000.00; and
of merit petitioners' Appeal and their Omnibus Motion to Quash
Pay
Writ of Execution and to Lift Order of Garnishment.
TOTAL P580,000.00  
With respect to the appeal, the NLRC held that the supersedeas
All other claims for damages are dismissed for insufficiency of bond posted by petitioners has no force and effect, viz.:
evidence.

SO ORDERED.10 A perusal of the bond, however, revealed that the Certification of

Accreditation and Authority of Jose Midas P. Marquez, Supreme
Petitioners' Petition for Certiorari before the CA was dismissed Court Administrator, covers an authority to transact surety
through a Decision11 dated January 8, 2007. Since petitioners' business in relation to CIVIL/SPECIAL PROCEEDINGS CASES
motion for reconsideration thereto was likewise denied by the ONLY filed/pending before the Regional Trial Courts of Caloocan
CA,12 they elevated the case before this Court. City, City of Manila, Las Piñas City, Makati City, Marikina City,
Mandaluyong City, Muntinlupa City, Parañaque City, Pasay City,
In a Decision13 dated October 31, 2008, the Court affirmed the CA Pasig City and Quezon City x x x.26 Clearly, the authority does not
Decision. This became final and executory on March 12, 2009.14 include labor cases filed before the NLRC. Thus, as far as the
NLRC is concerned, the [s]upersedeas bond posted by U-Bix
Subsequently, respondent filed a Motion for Issuance of Writ of Corporation has no force and effect.
Execution before the Labor Arbiter.15 In the course of the pre-
execution conferences, petitioners moved for the recomputation Assuming only that it is authorized, it failed to present proof of
of the monetary award. Acting on the same, Labor Arbiter security deposit or collateral securing the bond as required by
Elizabeth C. Avedoso (Labor Arbiter Avedoso) came up with a re- Section 6(c) of Rule 6, NLRC Rules of Procedure. U-Bix failed to
computed total monetary award of P3,330,512.82.16 Petitioners perfect its appeal. Therefore, the Order appealed from has
opposed this re-computation for lack of legal basis.17 Thus, a attained finality.27
second re-computation in the reduced amount of
P3,270,512.8218 was presented to the parties in a conference
held on February 18, 2010. Still, they failed to reach an Anent the Motion to Quash Writ of Execution and to Lift Order of
agreement. Garnishment, it held as follows:

In the meantime, respondent filed a Supplemental Motion for As mentioned earlier, the Order approving the judgment award
Issuance of Writ of Execution19 to which petitioners filed an has become final and executory, thus, the issuance of the writ of
Opposition.20 execution is proper. There is nothing more left to be done except
its execution.28
Ruling of the Labor Arbiter

In an Order21 dated April 16, 2010, Labor Arbiter Flores found the Hence:
recomputation of the total award at P3,270,512.82 correct.
Hence, he ruled:
WHEREFORE, premises considered, the Appeal, Omnibus
Motion to Quash Writ of Execution and to Lift Order of
Finding the Motion for Issuance of Writ of Execution to be well Garnishment filed by U-Bix Corporation and Edilberto Bravo
taken, the same is hereby GRANTED. are DENIED for lack of merit.

WHEREFORE, the corresponding Writ of Execution be issued SO ORDERED.29

pursuant to the re-computed monetary award in the amount of
P3,270,512.8[2].
  Petitioners moved for reconsideration which was dismissed in a
SO ORDERED.22 Resolution30 dated September 27, 2010.

Ruling of the Court of Appeals

Thus, petitioners sought recourse from the CA through a Petition Our Ruling
for Certiorari with Prayer for the Issuance of Temporary
Restraining Order and/or Writ of Preliminary Injunction. They
The Petition has no merit.
imputed upon the NLRC grave abuse of discretion amounting to
lack or in excess of jurisdiction when it denied their appeal
Perfection of an appeal in the manner
outright on the ground that the supersedeas bond accompanying
the appeal has no force and effect. They argue that: (1) Mapfre is
and within the period prescribed by law
is not only mandatory and jurisdictional
a bonding company accredited by this Court and the NLRC; (2)
petitioner Bravo's signature in the indemnity agreement
and failure to conform to the rules will
render the judgment sought to be
constitutes his personal guarantee of the supersedeas bond; and
(3) the grounds relied upon in their memorandum of appeal are
reviewed final and unappealable.
meritorious.31
Petitioners argue that the CA erred in concluding that the
supersedeas bond they posted was irregular and therefore has no
In a Decision32 dated August 9, 2011, the CA denied the Petition.
force and effect based on the OCA certification that Mapfre's
Citing Article 22333 of the Labor Code and Section 634 Rule VI of
authority to transact business as a bonding company refers only
the New Rules of Procedure of the NLRC, it emphasized that the
to civil and special cases. They call attention to the
filing of a supersedeas bond for the perfection of an appeal is
Memorandum39 dated June 8, 2010 issued by the NLRC's Legal
mandatory and jurisdictional. In this case, the CA found the
and Enforcement Division for the information and guidance of all
supersedeas bond posted by petitioners to be irregular in view of
Presiding/Commissioners and Executive/Labor Arbiters regarding
the Certification of Accreditation and Authority issued by the
the list of bonding companies accredited by this Court with
Office of the Court Administrator (OCA) that Mapfre's authority to
respect to criminal and civil cases, which include Mapfre.
transact business was limited only to Civil/Special cases and
Petitioners assert that the NLRC's endorsement of the said list to
does not cover labor cases. Besides, the said court found no
all Presiding Commissioners and Executive/Labor Arbiters could
meritorious ground to relax the requirement of posting a
only mean that the bonding companies therein listed can also well
supersedeas bond. Thus:
be considered for labor cases.

WHEREFORE, in view of the foregoing premises, the petition The Court agrees with petitioners. In the 2013 Guidelines for
filed in this case is hereby DENIED for lack of merit. The Accreditation of Surety Companies40 of the NLRC, one of the
Resolutions issued by the Third Division of the National Labor requirements for the accreditation of a bonding company is the
Relations Commission dated June 29, 2010 and September 27, submission of a valid Certificate of Accreditation and Authority
2010 in NLRC NCR Case No. 00-05-03696-97 is hereby issued by the OCA. Upon a bonding company's submission of the
AFFIRMED. same and compliance with the other requirements, the Legal and
Enforcement Division of the NLRC shall furnish all
SO ORDERED.35 Presiding/Commissioners and Deputy/ Executive Clerks of Court
a copy of the Certificate of Accreditation and Authority and a list
of accredited surety companies and their agents. While the said
As petitioners' Motion for Reconsideration36 was likewise denied guidelines were issued only in 2013, it is logical to conclude that
in a Resolution37 dated December 7, 2011, they are now before the Memorandum dated June 8, 2010 was for the same purpose
this Court through this Petition for Review on Certiorari. mentioned, i.e., to furnish all Presiding/Commissioners and
Executive/Labor Arbiters a list of accredited bonding companies.
Issues For one, the said Memorandum was issued by the Legal and
Enforcement Division to all Presiding/Commissioners and
  Executive/Labor Arbiters or similar to what is outlined under the
THE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE aforementioned guidelines. For another, and as aptly pointed out
ERROR IN AFFIRMING THE NLRC'S DECISION DISMISSING by petitioners, there could have been no other plausible reason
OUTRIGHT PETITIONERS' APPEAL ON THE GROUND THAT for the said issuance but to apprise the concerned labor officials
THE ACCOMPANYING SUPERSEDEAS BOND WAS INVALID, of the list of bonding companies which they may consider in
CONSIDERING THAT: transacting business in their respective offices.
A. MAPFRE INSULAR INSURANCE
Nevertheless, the Court still finds that petitioners failed to comply
CORPORATION IS A BONDING COMPANY
with the bond requirement in perfecting their appeal. Article 223 of
ACCREDITED BY BOTH THE NLRC AND
the Labor Code provides in part:
THE SUPREME COURT.
B. PETITIONER BRAVO'S SIGNATURE IN THE
Article 223. Appeal. Decisions, awards, or orders of the Labor
INDEMNITY AGREEMENT CONSTITUTES
Arbiter are final and executory unless appealed to the
HIS PERSONAL GUARANTEE OF THE
Commission by any or both parties within ten (10) calendar days
SUPERSEDEAS BOND.
from receipt of such decisions, awards, or orders. x x x
C. PETITIONERS' MEMORANDUM OF APPEAL
IS IMPRESSED WITH MERIT SUCH THAT A xxxx
RESOLUTION OF THE SUBSTANTIAL
ISSUES RAISED THEREIN WAS In case of a judgment involving a monetary award, an appeal by
WARRANTED.38 the employer may be perfected only upon the posting of a cash or
surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the In the same vein, petitioners are clutching at straws in impressing
monetary award in the judgment appealed from. (Emphasis upon this Court that petitioner Bravo, in signing the Indemnity
supplied) Agreement in his personal capacity, has already bound himself to
be jointly and severally liable with Mapfre for the monetary award
and this has the effect of securing the bond. Suffice it to say that
In case of a surety bond, the applicable Section 6, Rule VI of the "[t]he obvious purpose of an appeal bond is to ensure, during the
2005 Revised Rules of Procedure of the NLRC requires that the period of appeal, against any occurrence that would defeat or
same should be accompanied by original and certified true copies diminish recovery by the aggrieved employees under the
of the following: judgment if subsequently affirmed."42 To the Court's mind, the
a joint declaration under oath by the employer, his counsel and intention in requiring a security deposit or collateral to secure the
the bonding company, attesting that the bond posted is bond, apart from the indemnity agreement between the employer-
genuine, and shall be in effect until final disposition of the case; appellant and the bonding company, is to further ensure recovery
by the employee of the judgment award should the same be
an indemnity agreement between the employer-appellant and affirmed, in any and all eventualities. This is also in keeping with
bonding company; the purpose of the bond requirement which is to "discourage
proof of security deposit or collateral securing the bond; employers from using the appeal to delay, or even evade, their
provided, that a check shall not be considered as an obligation to satisfy their employee's possible just and lawful
acceptable security; claims."43 Besides, it is an ail-too familiar rule in statutory
construction that when a rule is clear and unambiguous,
a certificate of authority from the Insurance Commission; interpretation need not be resorted to.44 Since Section 6, Rule VI
certificate of registration from the Securities Exchange of the 2005 NLRC Rules of Procedure requires that a surety bond
Commission; should be accompanied by both an indemnity agreement and
proof of security deposit or collateral securing the bond, among
certificate of authority to transact surety business from the others, that two must be presented. The submission of one
Office of the President; cannot be considered sufficient as to dispense with the other. No
certificate of accreditation and authority from the Supreme resort to any interpretation is necessary, there is only room for
Court; and application.45

notarized board resolution or secretary's certificate from the It is a settled rule that "the perfection of an appeal in the
bonding company showing its authorized signatories and their manner and within the period prescribed by law is, not only
specimen signatures. mandatory, but jurisdictional, and failure to conform to the rules
will render the judgment sought to be reviewed final and
Here, petitioners did not submit any proof of security deposit or unappealable."46 As can be gleaned from the foregoing,
collateral securing the bond. They themselves admit this in their petitioners failed to perfect their appeal in the manner prescribed
Petition by stating that they no longer attached a separate by the rules. Hence and as correctly ruled by the NLRC and
document of security deposit or collateral securing the bond affirmed by the CA, the April 16, 2010 Order of Labor Arbiter
because Mapfre did not find it necessary to require them to give a Flores approving the recomputation of the money award and
security deposit and/or collateral. According to them, Mapfre finds ordering the issuance of a writ of execution has already attained
it sufficient that the Indemnity Agreement attached to the finality and this warranted the dismissal of petitioners' appeal
Memorandum of Appeal was signed by petitioner Bravo, the therefrom before the NLRC.
president of petitioner U-Bix, in his personal capacity.
It is worth stating that indeed in several cases, the Court -
The Court, however, cannot accept such flimsy excuse of relaxed the rigid application of the rules of procedure to afford the
petitioners. parties the opportunity to fully ventilate their cases on the merits.
This is in line with the time honored principle that cases should be
It must be noted that right from the start, petitioners were well decided only after giving all the parties the chance to argue their
represented by counsel who is presumed to know the explicit causes and defenses. Technicality and procedural imperfections
requirement under the aforementioned Section 6 that a surety should thus not serve as bases of decisions. In that way, the ends
bond should be accompanied by a proof of security deposit or of justice would be better served. For indeed, the general
collateral. Hence, petitioners cannot reason out that they were not objective of procedure is to facilitate the application of justice to
able to submit the same because Mapfre did not require them to the rival claims of contending parties, bearing always in mind that
give such a deposit or collateral. What appears here instead is procedure is not to hinder but to promote the administration of
that while petitioners seem to be aware of the said requirement, justice.47
they risked dispensing with the same and chose to stand by the
alleged word of Mapfre that they need not submit any proof of
security deposit or collateral. It is well to remind petitioners that It must be emphasized, however, that "the policy of liberal
parties are not at a liberty to choose which rule of technicality to interpretation is qualified by the requirement that there must be
comply with or not. To stress, "[t]he requirements for perfecting an exceptional circumstances to allow the relaxation of the rules.
appeal must, as a rule, be strictly followed. Such requirements Absent exceptional circumstances, [the Court adheres] to the rule
are considered indispensable interdictions against needless delay that certain procedural precepts must remain inviolable x x
and are necessary for the orderly discharge of the judicial x."48 After all, an "appeal is not a constitutional right, but a mere
business."41 statutory privilege. Thus, parties who seek to avail themselves of
it must comply with the statutes or rules allowing it."49 The Court up to that point.
adheres to the strict interpretation of the rule in this case in the
absence of exceptional circumstance or compelling reason to We may also view the proper computation of backwages (whether
depart from the same. based on reinstatement or an order of separation pay) in terms of
the life of the employment relationship itself.
The questioned recomputation of monetary award is in order.
When reinstatement is ordered, the employment relationship
Petitioners argue that the recomputation of the monetary award in continues. Once the illegally dismissed employee is reinstated,
the sum of P3,270,512.82 is erroneous. In particular, they assail any compensation and benefits thereafter received stem from the
the computation of backwages from the time of respondent's employee's continued employment. In this instance, backwages
dismissal up to the finality of the Court's October 31, 2008 are computed only up until the reinstatement of the employee
Decision in the illegal dismissal case on March 12, 2009. They since after the reinstatement, the employee begins to receive
point out that full backwages is computed from the time an compensation from his resumed employment.
illegally dismissed employee's compensation is withheld up to the
time of his actual reinstatement. And since the July 12, 1999 When there is an order of separation pay (in lieu of reinstatement
Decision of the NLRC awarded separation pay in lieu of or when the reinstatement aspect is waived or subsequently
reinstatement, petitioners argue that backwages should no longer ordered in light of a supervening event making the award of
accrue beyond the date of the said NLRC Decision. This is reinstatement no longer possible), the employment relationship is
because when the NLRC awarded separation pay in lieu of terminated only upon the finality of the decision ordering the
reinstatement in its Decision, the employment tie between separation pay. The finality of the decision cuts-off the
petitioners and respondent was already effectively severed. employment relationship and represents the final settlement of
the rights and obligations of the parties against each other.
This Court has already meticulously explained in Bani Rural Bank Hence, backwages no longer accumulate upon the finality of the
Inc. v. De Guzman50 that: decision ordering the payment of separation pay since the
employee is no longer entitled to any compensation from the
employer by reason of the severance of his
The computation of separation pay is based on the length of the employment.51 (Citations omitted; emphases and underscoring
employee's service; and the computation of backwages is based supplied)
on the actual period when the employee was unlawfully prevented
from working.
Clearly, therefore, respondent is entitled to backwages computed
The basis of computation of backwages from the time she was illegally dismissed up to the date of the
finality of the Court's October 31, 2008 Decision in the illegal
The computation of backwages depends on the final awards dismissal case on March 12, 2009. The Court, thus, finds the
adjudged as a consequence of illegal dismissal, in that: subject recomputation of money award to be in order.

First, when reinstatement is ordered, the general concept under WHEREFORE, premises considered, the Petition is
Article 279 of the Labor Code, as amended, computes the hereby DENIED. The Decision dated August 9, 2011 and the
backwages from the time of dismissal until the employee's Resolution dated December 7, 2011 of the Court of Appeals in
reinstatement. The computation of backwages (and similar CA-G.R. SP No. 117199 are hereby AFFIRMED.
benefits considered part of the backwages) can even continue
beyond the decision of the labor arbiter or NLRC and ends only SO ORDERED.
when the employee is actually reinstated.

Second, when separation pay is ordered in lieu of reinstatement

(in the event that this aspect of the case is disputed) or
reinstatement is waived by the employee (in the event that the
payment of separation pay, in lieu, is not disputed), backwages is
computed from the time of dismissal until the finality of the
decision ordering separation pay.

Third, when separation pay is ordered after the finality of the

decision ordering the reinstatement by reason of a supervening
event that makes the award of reinstatement no longer possible x
x x backwages is computed from the time of dismissal until the
finality of the decision ordering separation pay.

The above computation of backwages, when separation pay is

ordered, has been the Court's consistent ruling. In Session
Delights Ice Cream and Fast Foods v. Court Appeals Sixth
Division, we explained that the finality of the decision becomes
the reckoning point because in allowing separation pay, the final
decision effectively declares that the employment relationship
ended so that separation pay and backwages are to be computed