company alleges that it has opted to consider the P0.

80 daily wage increase cranad(roughly P22 per month) as partial compliance with the requirements of said decree, so that it is obliged to pay only the balance of P38 per month. In effect, the payment of the additional P60 covers both the requirements of the decree and the negotiated wage increase of P0.80 daily. Respondent company asserts that since there was already a meeting of the minds between the parties as early as April 2, 1977 about the wage increases which were made retroactive to April 1, 1977, it fell well within the exemption provided for in the Rules Implementing P.D. 1123, as follows: Section 1. Coverage. These rules shall apply to all employers except the following: xxx (k) Those that have granted in addition to the allowance under P.D. 525, at least P60.00 monthly wage increase on or after January 1, 1977, provided that those who paid less than this amount shall pay the difference. On the other hand, petitioner maintains that the living allowance under P.D. 1123 cranad(originally P.D. 525) is distinct and separate from the negotiated wage increase of P0.80 daily [pp. 6 & 96, rec.]. In fact, it adds, when the CBA was signed by the parties on September 3, 1977, the respondent company was fully aware of the effectivity of P.D. 1123 and had already been paying the increased allowance provided therein [p. 94, rec.]. Hence, the respondent company acted in bad faith when it refused to pay the negotiated wage increase in violation of the collective bargaining agreement and the respondent company is guilty of unfair labor practice, pursuant to the following provisions of the Labor Code: Article 248. Unfair Labor Practices of Employers. It shall be unfair labor practice for an employer: xxx Petition for Certiorari to review the decision dated September 1, 1978 of respondent Commission which sustained the position of respondent employer and dismissed the case for lack of merit. It appears from the records that the petitioner, in anticipation of the expiration of their 1973-1976 collective bargaining agreement on July 31,1976, and as an initial step for its renewal, submitted to the respondent company a set of bargaining proposals dated June 2, 1976. Negotiations were held thereafter between the parties; but because of an impasse, the complainant cranad(petitioner herein) filed on September 15, 1976 a complaint with the Department of Labor praying that the parties therein be assisted in concluding a collective agreement. Notwithstanding the complaint, the parties nevertheless continued their negotiations. On September 3, 1977, the private respondent and petitioner concluded and signed a collective bargaining agreement which, among other things, provided for a 3-stage wage increase for all rank and file employees. The terms of the agreement on wage increase, which were retroactive to April 1, 1977, follow: (a) Effective April 1, 1977, EIGHTY CENTAVOS [P0.80] will be added to the basic daily wages of all said employees. (b) Effective April 1, 1978, FIFTY CENTAVOS [P0.50] will be added to the basic daily wages of all said employees. (c) Effective April 1, 1979, FIFTY CENTAVOS [P0.50] will be added to the basic daily wages of all said employees. Meanwhile, on April 21, 1977, P.D. 1123 was enacted to take effect on May 1, 1977 providing for an increase by P60.00 in the living allowance ordained by P.D. 525. This increase was implemented effective May 1, 1977 by the respondent company, as shown by Memorandum No. 6-77 of the respondent companys General Manager to all employees dated April 23, 1977 cranad(p. 12, rec.). The controversy arose when the petitioner union sought the implementation of the negotiated wage increase of P0.80 as provided for in the collective bargaining agreement. The respondent (J) To violate a collective bargaining agreement. On February 13, 1978, the petitioner filed a complaint dated February 10, 1978 for unfair labor practice and violation of the CBA against the respondent company [pp. 13-16, rec.]. On May 30, 1978, an Order [p. 18, rec.] was issued by Labor Arbiter Conrado B. Maglaya, the dispositive portion of which reads as follows: WHEREFORE, premises considered, and by authority of Article 263 of the Labor Code as amended, let this case be, as it is hereby, DISMISSED and the same is referred to the parties or disputants for them to resolve their disputes, grievances or matters arising from the implementation, application or interpretation of their Collective Bargaining Agreement in accordance with the Machinery established in the CBA. From this order, both parties appealed to the respondent Commission. Petitioner filed its appeal on June 28, 1978 [pp. 31-34, rec.] assailing the order of Labor Arbiter Maglaya as contrary to law and the evidence adduced during the hearing, which constitutes grave abuse of discretion amounting to lack of jurisdiction. It avers that the matter had already been taken up on grievance but the respondent company refused to implement the P0.80 wage increase under the CBA, and that it further refuses to submit to voluntary arbitration. Hence, it prays for the setting aside of the Labor Arbiters Order and for the parties to submit to voluntary arbitration as provided for in their CBA and the provisions of the Labor Code. On the other hand, respondent company filed on July 5, 1978 a partial appeal [pp. 19-27, rec.], accepting the dismissal of the complaint but assailing that portion of the Labor Arbiters Order declaring the subject matter as grievable and therefore threshable under the parties CBA. Its prayer was for affirmance of the dismissal, reversal of the referral to the parties for threshing out under their CBA, and for a declaration that it has not committed an unfair labor practice nor violated the CBA. On September 1, 1978, the respondent Commission cranad(Second Division) promulgated its decision, setting aside the order appealed from and entering a new one dismissing the case for

FIRST DIVISION [G.R. No. L-50320 : July 31, 1981.] PHILIPPINE APPAREL WORKERS UNION, Petitioners, vs. THE NATIONAL LABOR RELATIONS COMMISSION and PHILIPPINE APPAREL, INC., Respondents.

DECISION

MAKASIAR, J.:

obvious lack of merit. The dismissal is predicated on the opinion [p. 45, rec.] of the Undersecretary of Labor when he said: xxx If as you said, management and labor had agreed on April 2, 1977 to grant an amount of P27.00 cranad(roughly) per month to its employees retroactive to April 1, 1977, then the exemption is squarely in point, notwithstanding that the CBA was signed in May or June. This must be so for reason that on April 7, 1977, there was already the meeting of the minds of the parties and for legal purposes, the contract was already perfected as of said date. Said the respondent Commission: We fully subscribe to this view. It needs no further elaboration to demonstrate that by the facts and the terms of the law, the respondent has to pay each of the employees concerned a total of P60.00 monthly for it to satisfy payment of both the wage increase and the allowance. In resume, we find the refusal of the respondent to submit to voluntary arbitration to be validly grounded and, therefore, not constitutive of unfair labor practice. We further find to be untenable the complainants claim for full payment of both the P0.80 daily wage increase under the CBA and the P60 allowance under P.D. 1123 [pp. 45 -46, rec.]. Petitioner than filed its motion for reconsideration but the NLRC en banc dismissed the same in its resolution of February 8, 1979 [pp. 48-54, rec.], pursuant to Section 7, Rule II of the Rules and Regulations Implementing P.D. No. 1391, which became effective on September 15, 1978 and provides thus Sec. 7. Decisions of the Commissions. There shall henceforth be no appeal from such decisions to the Minister of Labor except as provided in P.D. 1367 and its implementing rules concerning appeals to the Prime Minister, and the decisions of the Commission en banc or any of its Decisions shall be final and executory. Hence, the instant petition. Petitioner maintains that private respondent violated the CBA and committed an ULP when it refused to pay the negotiated wage increase of P0.80 daily effective April 1, 1977, to the employees within the bargaining unit. Private respondents, however, contend that there was no violation of the CBA and that its application of the negotiated wage increase as partial compliance with P.D. 1123 is well within the provisions of the latter. A perusal of the CBA shows that it was made and entered into on the 3rd day of September, 1977 by and between the parties herein cranad(pl. see p. 1 of Annex B at p. 7 of NLRC rec.) although the first year of its increase was retroactive to April 1, 1977. At the time it was perfected and signed by the parties, P.D. 1123 was already in force and effect. A sample pay advice [p. 11 insert, rec.] and the Memorandum No. 6-77 dated April 23, 1977 [p. 12, rec.] signed by the General Manager of respondent company show that the said P.D. was implemented by respondent company on May 1, 1977. On the other hand, there is nothing in the records to indicate that the negotiated wage increases were granted or paid before May, 1977. Hence, it cannot be said that the respondent Company falls within the exceptions provided for in paragraph cranad(k) of the rules implementing P.D. 1123. At the time the said P.D. took effect, there was neither a perfected contract nor an actual payment of the said increase. There was therefore no grant of said increases as yet, despite the contrary opinion expressed in the letter of Undersecretary of Labor Amado G. Inciong. The said letter dated May 13, 1977 [p. 33, NLRC rec.] of Undersecretary Inciong is based on a wrong premise and misrepresentation on the part of respondent company. It was alleged in the letter of respondent company that the wage increases were agreed upon by the company and the bargaining union on April 2, 1977 in recognition of the imperative need for employees to

cope up with inflation brought about by, among others, another increase in oil price [p. 31, NLRC rec.]. It was not, however stated that at the time the said letter was written, negotiations were still being held on other unresolved economic and non -economic bargaining items and it was only on September 3, 1977 when they reached agreement thereon [pl. see p. 7 of p rivate respondents Memorandum, p. 107, rec.]. There was therefore no binding contract between the parties before September 3, 1977. For if any essential item is left open for future consideration, there is no binding contract, and an agreement to reach an agreement imposes no obligation on the parties thereto [17 Am. Jur., 2d 362]. Such being the case, and without actual payment of the agreed P0.80 wage increase, there could have been no grant of wage increases within the contemplation of paragraph K, Section 1 of the Rules Implementing P.D. 1123 to place the respondent company within the purview of the exemption provided for in the said rules. Consequently, its refusal to implement the P0.80 wage increase for the first year of the CBA constitutes a violation thereof and makes the respondent company guilty of unfair labor practice. The respondent company is also guilty of bad faith when it signed the CBA on September 3, 1977 without in any way letting the petitioner union know that it was going to apply part of the allowances being paid under P.D. 1123 to the wage increases provided for in the CBA. Between the time of the implementation of P.D. 1123 on May 1, 1977 and the signing of the CBA on September 3, 1977, nothing was said between the parties about the wage increase despite the fact that negotiations were still going on between the parties. The exchange of letters between the respondent company and Labor Undersecretary Inciong appears to have been concealed from the union. According to the respondent Commission, the wage increase cranad(however) was not immediately implemented because Mr. Alfred Flug who was to bring home funds was still in the United States [p. 40, rec.]. It was only upon arrival from the U.S.A. on January 19, 1978 of Robert Flug, son of said Alfred Flug, that the union had an inkling that the company will not pay the negotiated wage increase. At this point the CBA was already perfected and signed by the parties, so that its terms and stipulations have the force of law between them. A collective bargaining agreement is the law between the parties cranad(Kapisanan ng mga Manggagawa sa La Suerte-FOITAF vs. Noriel, 77 SCRA 414). In the construction or interpretation of such a contract, the primary purpose and guideline and indeed the very foundation of all the rules for such construction or interpretation is the intention of the parties cranad(17 Am. Jur. 2d., 631). What was the intention of the parties relative to the wage increases? A cursory reading of the CBA indicates that the benefits provided therein are not exclusive of other benefits, as may be gleaned from the provisions of its Section 4, Article XIV [p. 42 of the CBA at p. 6, NLRC rec.], which speaks of any other benefits or privileges which are not expressly provided in this Agreement, even if now accorded or hereafter accorded to the employees and workers, shall be deemed purely acts of grace . cra . Likewise, in the accompanying Memorandum of Understanding [pp. 82-83, NLRC rec.] dated September 3, 1977, the parties have agreed as follows: 1. As long as it does not contravene the law and its implementing rules and regulations the COMPANY agrees to effect a uniform and indiscriminate wage increase in the salaries of its employees within the bargaining unit represented by the UNION regardless of their position and pay rates, in the event that the government shall direct another increase(s) in the statutory minimum wage fixed under P.D 928 within the period of three years from the signing of this instrument. The uniform increase contemplated in this instrument will be equivalent to the amount of the statutory wage increase or adjustment. The bases of the dissent of Madame Justice Herrera are that: I. The P0.80 per day increase was already granted as early as April 2, 1977 when the company agreed to give wage increases to its employees effective April 1, 1977.

Hence, such grant should be credited against the emergency cost of living allowance cranad(ECOLA) provided for by P.D. 1123. II. The Departments cranad(Labor) view on the matter of exemptions from P.D. 1123 should be given weight since it was not interpreting or construing a statute but explaining the extent of its own rule. III. It is inequitable that an employer who has granted increases in pay to his employees on a given day is further ordered to give additional increases one, two or three days thereafter. IV. Social justice requires that the broader requirements of a stable economy should be taken into account in resolving conflicts between labor and management. I There is no controversy that the first years wage increase under the CBA was supposed to retroact to April 1, 1977. There is likewise no question that had the company paid the eighty centavos daily increase in April 1977, the conclusion would have been unquestionable that such negotiated wage increase cranad(NWI) should be credited against the emergency cost of living allowance cranad(ECOLA) under P.D. 1123. The question arose because, first, there was no such payment either before or after the effectivity of P.D. 1123 on May 1, 1977; and second, because there was no binding contract to speak of on May 1, 1977. It is conceded that the word grant in its broader sense may include to agree or assent to; to allow to be fulfilled; to accord; to bestow or confer; and is synonymous with concede which means to agree on the idea of bestowal or acknowledgment especially of a right or privilege chanroblesvirtualawlibrary(Woods vs. Reilly, 211 S.W. 2d 591, 597). Such being the case, the grant could be said to have been made at the time of the agreement, although there may not have been payment as yet. But the question is, when was the inception or actual birth of the agreement? The company contends that it was on April 2, 1977, whereas the Union alleges that it was only on September 3, 1977, the date of the CBA. Paragraph 1 of the CBA reads: This agreement, made and entered into this 3rd day of September 1977 . cra . chanroblesvirtualawlibrary(p. 7, NLRC rec.). On the other hand, there is nothing in the record to indicate that the P0.80 wage increase was indeed agreed upon on April 2, 1977. Aside from the self-serving statements of the company in its various communications cranad(pp. 121, 125 and 128, rec.) and pleadings cranad(pp. 73 and 102, rec.), the only other reference to said date is found on the second paragraph of page 1 of the Memorandum of Understanding dated September 3, 1977 cranad(p. 82, NLRC rec.) which, however, does not mention anything about the 80-centavo increase effective April 1, 1977. In fact, the said paragraph speaks of the companys commitment to effect uniform and indiscriminate wage increases among its employees within the bargaining unit represented by the union in the event that the government shall, within a period of three cranad(3) years from execution hereof, direct additional increases in the statutory minimum wage fixed under P.D. 928. In other words, what was agreed upon on April 2, 1977, was a conditional increase contingent upon the governments increasing of the statutory minimum wage then prevailing. Is it not possible that the companys decision to give the P0.80 daily increase effective April 1, 1977 was influenced by the knowledge that it could be absorbed by the additional ECOLA provided for by P.D. 1123, and that such decision was definitely made after receipt of the letter dated July 15, 1977 of then Undersecretary Inciong cranad(p. 130, rec.)? In any case, the company admits that after April 1977 there were negotiations on other unresolved economic and non-economic bargaining items and it was only on September 3, 1977 when they reached agreement thereon. chanroblesvirtualawlibrary(p. 107, rec.).

This brings us to no other conclusion that the agreement was born only on September 3, 1977: Mere preliminary negotiations as to the terms of an agreement do not constitute a contract. A complete contract is effected generally only by an agreement as to all the terms which the parties intend to introduce into the contract, and where such is the intention of the parties, by the execution of a formal written instrument embodying those terms chanroblesvirtualawlibrary(17 C.J.S. 390). Where preliminary negotiations are consummated by a written contract, or an oral agreement is evidenced by a subsequent agreed memorandum in writing, the writing supersedes all previous understandings and the intent of the parties must be ascertained therefrom . cra . chanroblesvirtualawlibrary(17 C.J.S. 750). In the light of the foregoing, there was therefore no grant of the wage increase as of May 1, 1977 to enable the company to avail of the exemption under P.D. 1123. II It is also conceded that the Department of Labor had the right to construe the word grant as used in its rules implementing P.D. 1123, and its explanation regarding the exemptions to P.D. 1123 should be given weight. However, when it is based on misrepresentations as to the existence of an agreement between the parties, the same cannot be applied. At any rate, the opinion of then Undersecretary Inciong about the matter is based on the wrong premise that there was already an agreement cranad(If as you said management and labor agreed on April 2, 1977 . cra ., p. 33, NLRC rec.). There is no such agreement perfected on April 2, 1977. There is no distinction between interpretation and explaining the extent and scope of the law; because where one explains the intent and scope of a statute, he is interpreting it. The construction or explanation of then Undersecretary Inciong is not only wrong as it was purely based on a misapprehension of facts, but also unlawful because it goes beyond the scope of the law as hereinafter demonstrated. III The CBA entered into between the parties on September 3, 1977 created certain obligations between the parties which they are bound to keep without being ordered to do so. The principle of equity need not even come in, for unless fraud, mistake or the like is set up, a court will not disturb contract rights as evidenced by a writing which purports to express the intention or will of the parties . cra . chanroblesvirtualawlibrary(27 Am. Jur. 594). A cursory reading of the CBA dated September 3, 1977 reveals the following intentions of the parties: a. That the wage increases thereunder should be staggered for a 3-year period retroactive to April 1, 1977 cranad(see page 2 of Private Respondents Memorandum, p 102, rec.); and b. That such wage increases are exclusive of any statutory increase in the minimum wage, obliging the company to effect a uniform and indiscriminate wage increase equivalent to the increase or adjustment in the minimum wage that may be decreed within a period of three years from the signing of the instrument on September 3, 1977 cranad(see par. 1 of the Memorandum of Understanding, p. 83, NLRC rec.). The staggered wage increase will not be achieved if the same were to be absorbed by the P60increase in the ECOLA. For a computation of NWI under the CBA will approximately amount to the following: First year P0.80 daily or approximately P22/mo. Second year .50 daily or approximately 13.75/mo. Third year .50 daily or approximately 13.75/mo.

Monthly total for 3 years P49.50 Thus, it will be seen that because the resultant total in the monthly-wage increase over the 3year period under the CBA is less than P60.00, the same will always be covered by the ECOLA, and there will be no occasion for a staggered increase during the period other than what the law may provide which is not the intention of the parties. It is submitted that had the parties intended that to be the end, they should have incorporated the same in their CBA or in their Memorandum of Understanding. It is also apparent that the crediting of the NWI in the ECOLA was an afterthought on the part of the company. If not, then the company was in bad faith when it did not mention its plan to credit the NWI to the ECOLA during the negotiations prior to the signing of the CBA on September 3, 1977, as soon as it received the opinion of then Undersecretary Inciong in his letter of July 13, 1977 cranad(p. 130, rec.). IV It is submitted that the principle of social justice will be better served by upholding the protectionto-labor policy guaranteed by the Constitution. The Honorable Chief Justice Enrique M. Fernando, in explaining the concept of social justice, wrote: What is thus stressed is that a fundamental principle as social justice, identified as it is with the broad scope of the police power, has an even more basic role to play in aiding those whose lives are spent in toil, with destitution an ever-present threat, to attain a certain degree of economic well-being. Precisely, through the social justice coupled with the protection to labor provisions, the government is enabled to pursue an active and militant policy to give reality and substance to the proclaimed aspiration of a better life and more decent living conditions for all. It is in that spirit that in 1969, in Del Rosario vs. Delos Santos cranad(L-20586, March 21, 1969, 22 SCRA 1196), reference was made to what the social justice concept signifies in the realistic language of the late President Magsaysay: He who has less in life should have more in law. After tracing the course of decisions which spoke uniformly to the effect that the tenancy legislation, now on the statute books, is not vitiated by constitutional infirmity, the Del Rosario opinion made clear why it is easily understandable from the enactment of the Constitution with its avowed concern for those who have less in life, [that] the constitutionality of such legislation has been repeatedly upheld. What is sought to be accomplished by the above fundamental principle is to assure the effectiveness of the communitys effort to assist the economically underprivileged. For under existing conditions, without succor and support, they might not, unaided, be able to secure justice for themselves chanroblesvirtualawlibrary(Fernando, Enrique M., Constitution of the Philippines, pp. 80-81 [1974]). More than elusive justice, survival is the daily problem of the worker and his family. The employer is not faced with such a problem. More often than not, the employer dissipates part of his income or profit in pleasures of the flesh and gambling aside from luxuries, fabulous parties and conspicuous consumption. The stability of the economy does not depend on the employer alone, but on government economic policies concerning productivity in all areas and not only in the clothing or textile industries. There is not even an intimation that the company is losing. It is the living wage of the workers which is the basis of a stable economy. If the company cannot pay a living wage, it has no business operating at the expense of the lives of its workers from the very start. The preservation of the lives of the citizens is a basic duty of the State, more vital than the preservation of the profits of the corporation. When the State is engaged in a life-and-death struggle, like war or rebellion, it is the citizen worker who fights in defense of the State and for the preservation of the existence of corporations and businesses within its territorial confines. When the life of the State is threatened from within and without, it is the citizen, not the corporation or business enterprise, that mans the weapons of war and march into battle.

To invoke the nebulous term stable economy to justify rejection of the claims of the workers as against the assets of the employer, is to regard human life as more expendable than corporate capital. There is nothing in the Constitution that expressly guarantees the viability of business enterprises much less assuring them of profits. V Moreover, it must be pointed out that the Secretary of Labor has exceeded his authority when he included paragraph cranad(k) in Section 1 of the Rules Implementing P.D. 1123. Section 1 of said decree spells out the scope of its benefits, as follows: Section 1. In the Private Sector. In the private sector, an across-the-board increase of sixty pesos cranad(P60.00) in emergency allowance as provided in P.D. 525 shall be paid by all employers to their employees effective 1 May 1977. Accordingly, the monthly emergency allowance under P.D. 525 is hereby amended as follows: a) For workers being paid P50.00 P110 b) For workers being paid P30.00 90 c) For workers being paid P15.00 75. To implement P.D. 1123, the then Secretary of Labor was authorized in Section 4 of the same decree to issue appropriate rules and regulations. Such authority is quoted hereunder: Sec. 4. The Secretary of Labor and the Commissioner of the Budget shall issue appropriate rules and regulations to implement this Decree for their respective sectors. Under such rules and regulations, distressed employers whether public or private may be exempted while in such condition in the interest of development and employment. By virtue of such rule-making authority, the Secretary of Labor issued on May 1, 1977 a set of rules which exempts not only distressed employers cranad(see paragraph 1, Section 1 as well as Sections 6, 7, 8 and 9 of said rules) but also those who have granted in addition to the allowance under P.D. 525, at least P60.00 monthly wage increase on or after January 1, 1977, provided that those who paid less than this amount shall pay the difference cranad(see paragraph k of said rules). Clearly, the inclusion of paragraph k contravenes the statutory authority granted to the Secretary of Labor, and the same is therefore void, as ruled by this Court in a long line of cases among which are: 1. Teozon vs. Members of the Board of Administrators, PVA cranad(33 SCRA 585, 588-589): The recognition of the power of administrative officials to promulgate rules in the administration of the statute, necessarily limited to what is provided for in the legislative enactment, may be found in the early case of United States vs. Barrios decided in 1908. Then came in a 1914 decision, United States vs. Tupasi Molina cranad(29 Phil. 119) delineation of the scope of such competence. Thus: Of course the regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and for the sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself cannot be extended. So long, however, as the regulations relate solely to carrying into effect the provisions of the law, they are valid. In 1936, in People vs. Santos, this Court expressed its disapproval of an administrative order that would amount to an excess of the regulatory power vested in an administrative official. We reaffirmed such a doctrine in a 1951 decision, where we again made clear that where an administrative order betrays inconsistency or repugnancy to the provisions of the Act, the mandate of the Act must prevail and must be followed. Justice Barrera, speaking for the Court in Victorias Milling Inc. vs. Social Security Commission, citing Parker as well as Davis did tersely sum up the matter thus: A rule is binding on the Courts so long as the

procedure fixed for its promulgation is followed and its scope is within the statutory authority granted by the legislature, even if the courts are not in agreement with the policy stated therein or its innate wisdom . cra . On the other hand, administrative interpretation of the law is at best merely advisory, for it is the courts that finally determine what the law means. It cannot be otherwise as the Constitution limits the authority of the President, in whom all executive power resides, to take care that the laws be faithfully executed. No lesser administrative executive office or agency then can, contrary to the express language of the Constitution, assert for itself a more extensive prerogative. Necessarily, it is bound to observe the constitutional mandate. There must be strict compliance with the legislative enactment. Its terms must be followed. The statute requires adherence to, not departure from its provisions. No deviation is allowable. In the terse language of the present Chief Justice, an administrative agency cannot amend an act of Congress. Respondents can be sustained, therefore, only if it could be shown that the rules and regulations promulgated by them were in accordance with what the Veterans Bill of Rights provides chanroblesvirtualawlibrary(Emphasis supplied). 2. Santos vs. Hon. Estenzo, et al. cranad(109 Phil. 419): It is of elementary knowledge that an act of Congress cannot be amended by a rule promulgated by the Workers Compensation Commission. 3. Hilado vs. Collector of Internal Revenue cranad(100 Phil. 295): It seems too clear for serious argument that an administrative officer cannot change a law enacted by Congress. A regulation that is merely an interpretation of the statute when once determined to have been erroneous becomes a nullity. 4. Sy Man vs. Jacinto & Fabros cranad(93 Phil. 1093): . cra . We also find and hold that the memorandum order of the Insular Collector of Customs of August 18, 1947, is void and of no effect, not only because it has not been duly approved by the Department Head and fully published as required by Section 551 of the Revised Administrative Code but also because it is inconsistent with law . cra . chanroblesvirtualawlibrary(Emphasis supplied). 5. Olsen & Co., Inc. vs. Aldenese and Trinidad cranad(43 Phil. 259): The important question here involved is the construction of Sections 6, 7 and 11 of Act No. 2613 of the Philippine Legislature, and Section 9 of the Tobacco Inspection Regulations, promulgated by Administrative Order No. 35. It must be conceded that the authority of the Collector of Internal Revenue to make any rules and regulations must be founded upon some legislature act, and that they must follow and be within the scope and purview of the act. In the light of the foregoing, paragraph cranad(k) of the Rules Implementing P.D. 1123 must be declared void. Consequently, the argument about crediting the NWI against the ECOLA has no more leg to stand on and must perforce fall. It is also obvious that the negotiated wage increases provided for in the CBA are intended to be distinct and separate from any other benefit or privilege that may be forthcoming to the workers. The respondent company must perforce pay both the benefits under P.D. 1123 and the CBA. Its refusal to pay the wage increase provided for in the latter constitutes a question that should have been settled before a voluntary arbitrator. Moreover, in case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer cranad(Insular Lumber Co. vs. CA, 80 SCRA 28, citing Art. 1702, Civil Code of the Philippines).

Consequently, We find that the respondent Commission acted with grave abuse of discretion when it dismissed petitioners case and upheld the private respondents posture in the absence of substantial evidence in support thereof. WHEREFORE, THE WRIT OF CERTIORARI IS HEREBY GRANTED, THE DECISION OF THE RESPONDENT COMMISSION IS HEREBY SET ASIDE, AND PRIVATE RESPONDENT IS HEREBY DIRECTED TO PAY, IN ADDITION TO THE INCREASED ALLOWANCE PROVIDED FOR IN P.D. 1123, THE NEGOTIATED WAGE INCREASE OF P0.80 DAILY EFFECTIVE APRIL 1, 1977 AS WELL AS ALL OTHER WAGE INCREASES EMBODIED IN THE COLLECTIVE BARGAINING AGREEMENT, TO ALL COVERED EMPLOYEES. COSTS AGAINST PRIVATE RESPONDENT. THIS DECISION IS IMMEDIATELY EXECUTORY. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

On April 27, 1992, Flaviano L. Ramos informed petitioner that respondent company was having financial difficulties and could only grant petitioner's request if he changed the effective date of his retirement from July 16, 1992 to April 30, 1992. Being in urgent financial need, petitioner agreed and thus crossed out the date, July 16, 1992, on a photocopy of his letter, changing it to April 30, 1992. Respondent company issued to petitioner four (4) checks in the aggregate amount of P351,375.00, broken down as follows: P13,260.20 as salary advance; P21,994.91 as salary advance; P100,000.00 as partial advance payment of retirement benefits; and P216,119.89 as full payment for the outstanding balance of his retirement benefits. Dissatisfied, petitioner filed a complaint seeking payment of the following: WHEREFORE, it is respectfully prayed that after hearing, respondents be condemned to pay jointly and severally to the Complainant: a) P425,663.42 as actual damages;

G.R. No. 118743 October 12, 1998 ERNESTO E. MARTINEZ, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, GMCR, INC. (Formerly GLOBE MACKAY CABLE & RADIO CORP.), and MARK ANTHONY JAVIER, respondents.

MENDOZA, J.: This is a petition for certiorari to set aside the decision of the National Labor Relations Commission in NLRC NCR Case No. 005452-93 on the ground that it was rendered with grave abuse of its discretion. The dispositive portion of the assailed decision leads as follows: WHEREFORE, the decision appealed from is hereby MODIFIED. The awards of merit increase, retirement pay differential are hereby REDUCED respectively, to P29,515.50, P63,247.50 and P6,826.82. The awards of unpaid salaries and other fringe benefits are hereby SET ASIDE. SO ORDERED.
1

b) P400,000.00 as moral damages; c) P200,000.00 as exemplary damages; d) P150,000.00 as attorney's fees; 5 On July 26, 1993, Labor Arbiter Arthur L. Amansec rendered a decision ordering respondent company as follows: WHEREFORE, Judgment is hereby rendered ordering the respondents company (sic) to pay to the complainant the following: A. P425,663.42 in unpaid salaries; underpayment of retirement benefits; other fringe benefits and additional economic benefits; B. P25,000.00 as moral damages; C. Ten percent (10%) attorney's fees. SO ORDERED. 6 Respondent company appealed to the NLRC which, on November 23, 1994, rendered a decision, the dispositive portion of which is set forth at the beginning of this opinion. First. Petitioner contends that under the collective bargaining agreement, the option to retire is granted to retiring employees and not to the company and, therefore, private respondents cannot vary the effective date of his retirement. On the other hand, private respondents deny that petitioner can claim the benefits of the collective bargaining agreement considering that he is a managerial employee. Thus, the question is whether petitioner, who is a managerial employee, can claim retirement benefits under the collective bargaining agreement, Art. XXIX of which provides: Sec. 1. An employee shall be entitled to a retirement benefit plan under the following conditions: (a) an employee may retire at his option any time after such employee shall have attained the age of Fifty Years (50) and whose term of service is ten (10) years or more, and an employee may retire at his option upon completing twenty-five (25) years of service. (b) The employee must retire under this plan at the time such employee attains the age of Sixty-Five (65). 7 The Labor Code provides:

It appears that on June 10, 1977, respondent GMCR, Inc. employed petitioner as assistant credit and collection manager. At the inception of petitioner's employment, respondent company made it clear that employees who were not eligible for membership in the bargaining unit and, therefore, not entitled to the benefits under the collective bargaining agreement, would be paid benefits which were at least equivalent to, if not higher than, those provided in the collective bargaining agreement. 2 On September 22, 1981, respondent company promoted petitioner to credit and collection manager, a position he held until the day of his retirement. In the course of his employment, petitioner received annual salary increases based on merit and/or performance. Although the annual salary increases were not given on the exact due dates, they were retroactively applied to the start of the evaluation period. However, much to his surprise, petitioner received no salary increase for the period immediately prior to his retirement. While two (2) of his subordinates were given salary increases of twentytwo percent (22%) and twenty-one percent (21%) for the period from September 16, 1990 to September 16, 1991, he was not given a performance evaluation and consequently not granted any salary increase. Petitioner was examined by Dr. Florencio A. Chavez, the company physician and a pulmonary and cardiology specialist, and found to be suffering from a "severe restrictive and obstructive pulmonary defect with no reversible component." 3 He was advised to rest for 120 days. Petitioner took the physician's advice and went on sick leave from March 1 until July 15, 1992. In a letter, dated April 10, 1992, to respondent Mark Anthony Javier, president of respondent company, petitioner applied for optional retirement benefits under the collective bargaining agreement. He stated that since he would have been in the service of the company for fifteen years on June 10, 1992, he wished to retire effective July 16, 1992, on which date "the long term sick leave availment as per advice by the company's physician shall have expired." 4 On April 22, 1992, petitioner asked for the advance payment of his salary for the period April 16, 1992 to July 15, 1992. On April 24, 1992, he asked Flaviano L. Ramos, Senior Vice President and Treasurer, for an advance payment of his retirement benefits in the amount of P100,000.00.

Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. 8 As we recently held in United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma: 9 . . . [T]here is a rational basis for prohibiting managerial employees from forming or joining labor organizations. As Justice Davide, Jr., himself a constitutional commissioner, said in his ponencia in Philips Industrial Development, Inc. v. NLRC: In the first place, all these employees, with the exception of the service engineers and the sales force personnel, are confidential employees. Their classification as such is not seriously disputed by PEOFFW; the five (5) previous CBAs between PIDI and PEO-FFW explicitly considered them as confidential employees. By the very nature of their functions, they assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union equally applies to them. In Bulletin Publishing Co., Inc. v. Hon. Augusto Sanchez, this Court elaborated on this rationale, thus: . . . The rationale for this inhibition has been stated to be, because if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interests. The Union can also become company-dominated with the presence of managerial employees in Union membership. To be sure, the Court in Philips Industrial was dealing with the right of confidential employees to organize. But the same reason for denying them the right to organize justifies even more the ban on managerial employees from forming unions. After all, those who qualify as top or middle managers are executives who receive from their employers information that not only is confidential but also is not generally available to the public, or to their competitors, or to other employees. It is hardly necessary to point out that to say that the first sentence of Art. 245 is unconstitutional would be to contradict the decision in that case. 10 Accordingly, managerial employees cannot, in the absence of an agreement to the contrary, be allowed to share in the concessions obtained by the labor union through collective negotiation. Otherwise, they would be exposed to the temptation of colluding with the union during the negotiations to the detriment of the employer. However, there is nothing to prevent the employer from granting benefits to managerial employees equal to or higher than those afforded to union members. There can be no conflict of interest where the employer himself voluntarily agrees to grant such benefits to managerial employees. In the case at bar, at the beginning of petitioner's employment, he was told that those who are not covered by the CBA would nevertheless be entitled to benefits which would be, if not higher, at least equivalent to those provided in the CBA. 11 That private respondents made such a promise to petitioner is not denied by them.

Now Art. 287 of the Labor Code, as amended by R.A. No. 7641, 12 provides: Art. 287. Retirement. Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided, however, That an employee's retirement benefit under any collective bargaining and other agreements shall not be less than those provided herein. In the absence of a retirement plan or agreement, providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Unless the parties provide far broader inclusions, the term "one-half (1/2) month salary" shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. Retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers are exempted from the coverage of this provision. Violation of this provision is hereby declared unlawful and subject to the penal provisions under Article 288 of this Code. Thus, respondent company's agreement to extend the benefits of the CBA to petitioner constitutes the "applicable employment contract" under this provision of the Labor Code, pursuant to which petitioner may claim retirement benefits. Second. The next question to be resolved is when petitioner should be deemed to have retired from respondent company. In ruling that respondent company could vary the effective date of petitioner's retirement, the labor commission explained: [T]he respondent company had a right to insist that the effectivity date of his retirement be, not July 16, 1992, which was advantageous for him, but April 30, 1992, which was more advantageous for it. The fact that it imposed, as a condition for the advance partial payment of the complainant's retirement benefit, that the effectivity date of his retirement be changed to April 30, 1992, and that the complainant agreed to the condition because of his urgent need for money, does not affect the validity of their agreement in the absence of mistake, violence, intimidation, undue influence or fraud (Article 1330, Civil Code). The mere fact that an agreement was disadvantageous to one of the parties does not avoid it. Moreover, the release to the complainant, of the check for P13,260.92 in response to his request for the advance payment of his salaries from May 1, 1992 to July 16, 1992 does not signify the approval of his request because, as stated in the note of FL Ramos to "Susan", such request was still subject to "certain approvals". Thus, the complainant is not entitled to salaries and fringe benefits from May 1, 1992 to July 16, 1992. 13 We agree with this ruling. Petitioner assented to change the date of his retirement from July 16, 1992 to April 30, 1992 in consideration of obtaining an advance payment of P100,000.00 on his retirement pay. Such agreement is valid. As has been held:

Not all waiver and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. 14 The fact that respondent company still paid petitioner salaries after July 16, 1992 does not detract from the fact that petitioner voluntarily agreed to advance the date of his retirement. Neither is petitioner's entitlement to a long term sick leave which he claims was yet to expire on July 16, 1992 a reason for holding the new date of his retirement invalid. By changing the date of his retirement from July 16, 1992 to April 30, 1992 in exchange for an advance of P100,000.00 on his retirement pay, petitioner waived his right to insist on July 16, 1992 as the effective date of his retirement. Third. Private respondents argue that petitioner is barred from instituting this action on the ground of estoppel, having signed a document entitled "Release, Waiver and Quitclaim" in favor of respondent company. This document states that in consideration of the release of retirement benefits to petitioner, he was discharging the company, its stockholders, directors, agents, or employees from liability for any sum of money or other obligations. This document is an invalid waiver and cannot bar petitioner from bringing the present action. Unlike petitioner's waiver of the original date of his retirement, the consideration for which is the advance on his retirement benefits, the "Release, Waiver and Quitclaim" does not purport to have been made by petitioner for valuable consideration. Petitioner was, as a matter of right, entitled to his retirement benefits. Private respondents cannot condition their release to a quitclaim executed by petitioner. For this reason, we affirm the general rule against quitclaims of laborers' benefits: Even if voluntarily executed, agreements are invalid if they are contrary to public policy. This is elementary. The protection of labor is one of the policies laid down by the Constitution not only by specific provision but also as part of social justice. . . . The subordinate position of the individual employees vis--vis management renders him especially vulnerable to its blandishments and importunings, and even intimidations, that may result in his improvidently if reluctantly signing over benefits to, which he is clearly entitled. Recognizing this danger, we have consistently held that quitclaims of the workers' benefits will not estop them from asserting them just the same on the ground that public policy prohibits such waivers. 15 Fourth. With regard to petitioner's claim for salary increase, the NLRC held: The complainant's allegations relative to his right to a salary or merit increase from 1991 to 1992 were not successfully refuted by the respondents, whose contention that his performance during the year in question was evaluated and that he was found undeserving of a salary or merit increase is not supported by any evidence. Thus, it appears that there was unlawful discrimination on the part of the respondents in not giving the complainant a salary or merit increase in the year in question, which justifies the award of salary or merit increase. However, the award of merit increase should be, not 20%, but 18%, which is the average of the merit increase the complainant received from 1988 to 1990, or the amount of P4,216. 50 monthly. 16

We agree with this ruling. The amount of P4,216.50 should, however, be multiplied by seven and one-half months considering that the period covered is from September 16, 1991 to April 30, 1992. This would entitle petitioner to the amount of P31,623.75 as merit increase, and not P29,515.50, as computed by the NLRC. We likewise affirm the ruling of the NLRC denying petitioner's claim for P168,660.00 representing salaries which he would have allegedly earned had he been rehired by respondent company as a contractual employee. There is no evidence to show that respondent promised to rehire petitioner. The mere fact that another employee was rehired by respondent company after he had retired due to physical disability is not proof that petitioner was likewise given the same offer. As for petitioner's claim for moral damages, we find no basis for such an award. . . . [W]hile no proof of pecuniary loss is necessary in order that moral damages may be awarded, the amount of indemnity being left to the discretion of the court (Art. 2216), it is, nevertheless, essential that the claimant satisfactorily prove the existence of the factual basis of the damage (Art. 2217) and its causal relation to defendant's acts. This is so because moral damages, though incapable of pecuniary estimation, are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer. 17 Petitioner's allegations of "sleepless nights" and "serious mental anxieties" due to the "unlawful, malicious and fraudulent actuations of the respondents" in his complaint 18 have not been duly proven. Nor has it been shown that respondent company acted in gross and evident bad faith so as to entitle petitioner to an award of attorney's fees under Art. 2208(5) of the Civil Code. WHEREFORE, the decision of the National Labor Relations Commission is AFFIRMED with the MODIFICATION that the award of merit increase should be increased to P31,623.75. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-20303 September 27, 1967

REPUBLIC SAVINGS BANK (now REPUBLIC BANK), petitioner, vs. COURT OF INDUSTRIAL RELATIONS, ROSENDO T. RESUELLO, BENJAMIN JARA, FLORENCIO ALLASAS, DOMINGO B. JOLA, DIOSDADO S. MENDIOLA, TEODORO DE LA CRUZ, NARCISO MACARAEG and MAURO A. ROVILLOS, respondents. Lichauco, Picaso & Agcaoili and R. Santayana for petitioner. G. E. Fajardo for respondents.

employees. But so far, Mr. President, you have just let this thing passed through. As a matter of fact, you have even promoted these women like Misses Pacita Mato and Edita Castro. These women are of questionable characters, Mr. President, and should have had no place in the Bank as managers or even as mere employees. We know Mr. President, because it is an open secret in the Bank, that you have illicit relations with one of them Miss Edita Castro. As top officer and as father of the employees of the Bank, you have shown this bad example to your employees. Mr. President, we are really ashamed of you. (2) That you have allowed the practice of nepotism in this Bank. You have employed relatives of yours like Honorio Ravida; Bienvenido Ravida; Antonio Racelis; Jesus Antonio; and Argentina Racelis. Not only that Mr. President. You have also given those nieces and nephews of yours good positions at the expense of the more capable employees. Mr. President, if we have to mention all of them, one page will not be enough. (3) With regards to promotion, you have given more preferences to your close relatives. When the Bank advocated the sending of pensionados to States, you have only limited your choice among your nieces, nephews, and querida, namely, Miss Argentina Racelis, Mr. Jesus Antonio, Miss Edita Castro, and her brother-in-law, Mr. Pedro Garcia, Jr. In doing this, Mr. President, you have only lowered the reputation and standing of the Republic Savings Bank. There is really no sense in sending high school and B.S.E. graduates to States to study advanced banking. Because of this silly decision, it took one pensionado six months and cost the Bank a total of P10,000.00 just to study Christmas savings. That subject is very simple; one need not go to States to study savings; that you know full well, Mr. President. The reason why you sent Miss Castro to States was because you were also there. Are we not right? (4) That you Mr. President, tolerated and still tolerating grave dishonesty in this Bank as evidenced by the following irregularities and anomalies; (a) In one of our branches, around P200,000.00 was mulcted and embezzled by a certain Maximo Donado by doctoring the ledgers and records of that particular office. To the present, the amount is still increasing and some more are being dug up from the records everyday ever since its discovery in February 1957. In this case you dismissed Mr. M. Donado, immediately. But this was all that you did. If you have to go back to the history of the case, you will find out that your beloved nieces and nephews are also involved having been managers of that particular office. Another nephew, the Vice President-Operations, then Vice President, Personnel, was also involved for valid reasons that he did not even shift this particular employee to other branches or departments since the beginning when it has been the policy of the Bank to reshuffle its personnel. If you want to know why your good nephew did not transfer this employee, we will tell you. "Your good nephew has eaten too many baskets of delicious alimango." Mr. President, if there is someone to be blamed in this particular case, it is your good nephews and nieces for their gross negligence. (b) Aside from the one mentioned above, we have also Mr. Rodolfo Francisco, who in April 1955, maliciously withdraw (sic) P970.00 in two withdrawal slips from the account of one depositor in one of our provincial offices, inserting his name as co-depositor in the savings account ledger.

CASTRO, J.: The vital issue in this case is whether the dismissal of the eight (8) respondent employees by the petitioner Republic Bank (hereinafter referred to as the Bank) constituted an unfair labor practice within the meaning and intendment of the Industrial Peace Act (Republic Act 875). The Court of Industrial Relations (CIR) found it did and its decision is now on appeal before us. The Bank maintains that the discharge was for cause. The Bank had in its employ the respondents Rosendo T. Resuello, Benjamin Jara, Florencio Allasas, Domingo B. Jola, Diosdado S. Mendiola, Teodoro de la Cruz, Narciso Macaraeg and Mauro A. Rovillos. On July 12, 1958 it discharged Jola and, a few days after (July 18, 1958), the rest of respondents, for having written and published "a patently libelous letter . . . tending to cause the dishonor, discredit or contempt not only of officers and employees of this bank, but also of your employer, the bank itself." The letter referred to was a letter-charge which the respondents had written to the bank president, demanding his resignation on the grounds of immorality, nepotism in the appointment and favoritism as well as discrimination in the promotion of bank employees. The letter, dated July 9, 1958, is hereunder reproduced in full: Mr. Ramon Racelis President, Republic Savings Bank Manila "Dear Mr. President: We, the undersigned, on behalf of all our members and employees of the Republic Savings Bank, who have in our hearts only the most honest and sincere motive to conserve and protect the interest of the institution and its 200,000 depositors, do hereby, demand the much needed resignation of His Excellency, Mr. Ramon Racelis as President and Member of the Board of Directors of the Bank. Mr. President, you have already, in so many occasions, placed the Bank on the verge of danger, that now we deem it right and justifiable for you to leave this Bank and let other more capable presidents continue the work you have not well accomplished. In the above instance, we are presenting charges which in our humble contention properly justifies incapacity on your part to continue and assume the position as top executive of the huge institution: (1) That you Mr. President, have tolerated and practiced immorality in this Bank. We have been expecting you to do something about this malpractice which is very disgraceful and affects the morale of the hundreds of your

(c) In January 1958, Mr. Jose de los Santos expended and approved representation expense in the amount of P300.00 in one of our provincial offices. (d) Mr. Federico M. Dabu, the ex-cashier and now Personnel Manager, incurred a shortage in the amount of P1,240.00 in the course of the audit on August 3, 1954. (e) Mr. Jose S. Guevara, Vice-President on Personnel have (sic) been accepting bribe moneys. One of these amounts to P4,000.00 which was delivered by a messenger sometime during the last quarter of 1957. Mr. President, the anomalies are only a partial list of the irregularities which so far you have not acted upon. This type of people should have been fired out from the Bank; yet on the contrary, you promoted them to higher and responsible positions, thus, resulting in the demoralization of the more capable employees. Mr. President, we hope that you have still a little sense of decency and propriety left. So, for goodsake and for the welfare of the Bank, DO RESIGN NOW as President and as Member of the Board of Directors of the Republic Savings Bank. Very respectfully yours, (Sgd.) Rosendo T. Resuello President, RSB Supervisors' Union (FFW), (Sgd.) Benjamin Jara Vice-President RSB Supervisors' Union (FFW) (Sgd.) Florencio Allasas Treasurer, RSB Supervisors' Union (FFW) (Sdg) Domingo B. Jola Chairman, Executive Committee, RSB Employees' Union (FFW) (Sgd.) Diosdado S. Mendiola Vice-President, RSB Employees Union (FFW) (Sgd.) Teodoro de la Cruz Member, Executive Committee, RSB Employees' Union (FFW) (Sgd.) Angelino Quiambao President, RSB Security Guard Union (FFW) (Sgd.) Narciso Macaraeg Vice-President, RSB Security Guard Union (FFW) (Sgd.) Alfredo Bautista Treasurer, RSB Security Guard Union (FFW) (Sgd.) Pacifico A. Argao PRO, RSB Employees' Union (FFW) (Sgd.) Toribio B. Garcia Secretary, RSB Security Guard Union (FFW) (Sgd.) Mauro A. Rovillos Member, Executive Committee, RSB Supervisors' Union (FFW) Copies of this letter were admittedly given to the chairman of the board of directors of the Bank, and the Governor of the Central Bank. At the instance of the respondents, prosecutor A. Tirona filed a complaint in the CIR on September 15, 1958, alleging that the Bank's conduct violated section 4(a) (5) of the Industrial

Peace Act which makes it an unfair labor practice for an employer "to dismiss, discharge or otherwise prejudice or discriminate against an employee for having filed charges or for having given or being about to give testimony under this Act." The Bank moved for the dismissal of the complaint, contending that respondents were discharged not for union activities but for having written and published a libelous letter against the bank president. The court denied the motion on the basis of its decision in another case 1 in which it ruled that section 4(a) (5) applies to cases in which an employee is dismissed or discriminated against for having filed "any charges against his employer." Whereupon the case was heard. In 1960, however, this Court overruled the decision of the CIR in the Royal Interocean case and held that "the charge, the filing of which is the cause of the dismissal of the employee, must be related to his right to self-organization in order to give rise to unfair labor practice on the part of the employer," because "under subsection 5 of section 4(a), the employee's (1) having filed charges or (2) having given testimony or (3) being about to give testimony, are modified by 'under this Act' appearing after the last item."2 The Bank therefore renewed its motion to dismiss, but the court held the motion in abeyance and proceeded with the hearing. On July 4, 1962 the court rendered a decision finding the Bank guilty of unfair labor practice and ordering it to reinstate the respondents, with full back wages and without loss of seniority and other privileges. This decision was affirmed by the court en banc on August 9, 1962. Relying upon Royal Interocean Lines v. CIR,3 and Lakas ng Pagkakaisa sa Peter Paul v. CIR, the Bank argues that the court should have dismissed the complaint because the discharge of the respondents had nothing to do with their union activities as the latter in fact admitted at the hearing that the writing of the letter-charge was not a "union action" but merely their "individual" act.
4

It will avail the Bank none to gloat over this admission of the respondents. Assuming that the latter acted in their individual capacities when they wrote the letter-charge they were nonetheless protected for they were engaged in concerted activity, in the exercise of their right of self-organization that includes concerted activity for mutual aid and protection, 5 interference with which constitutes an unfair labor practice under section 4(a)(1). This is the view of some members of this Court. For, as has been aptly stated, the joining in protests or demands, even by a small group of employees, if in furtherance of their interests as such, is a concerted activity protected by the Industrial Peace Act. It is not necessary that union activity be involved or that collective bargaining be contemplated.6 Indeed, when the respondents complained against nepotism, favoritism and other management practices, they were acting within an area marked out by the Act as a proper sphere of collective bargaining. Even the reference to immorality was not irrelevant as it was made to support the respondents' other charge that the bank president had failed to provide wholesome working conditions, let alone a good moral example, for the employees by practicing discrimination and favoritism in the appointment and promotion of certain employees on the basis of illicit relations or blood relationship with them. In many respects, the case at bar is similar to National Labor Relations Board v. Phoenix Mutual Life Insurance Co.7 The issue in that case was whether an insurance company was guilty of an unfair labor practice in interfering with this right of concerted activity by discharging two agents employed in a branch office. The cashier of that office had resigned. The ten agents employed there held a meeting and agreed to join in a letter to the home office objecting to the transfer to their branch office of a cashier from another branch office to fill the position. They discussed also the question whether to recommend the promotion of the assistant cashier of their office as the proper alternative. They then chose one of their number to compose a draft of the letter and submit it to them for further discussion, approval and signature. The agent selected to write the letter and another were discharged for their activities in this respect as being, so their notices stated, completely unpleasant and far beyond the periphery of their responsibility. In holding the company liable for unfair labor practice, the Circuit Court of Appeals said:

A proper construction is that the employees shall have the right to engage in concerted activities for their mutual aid or protection even though no union activity be involved, for collective bargaining be contemplated. Here Davis and Johnson and other salesmen were properly concerned with the identity and capability of the new cashier. Conceding they had no authority to appoint a new cashier or even recommend anyone for the appointment, they had a legitimate interest in acting concertedly in making known their views to management without being discharged for that interest. The moderate conduct of Davis and Johnson and the others bore a reasonable relation to conditions of their employment. It was therefore an unfair labor practice for respondent to interfere with the exercise of the right of Davis and Johnson and the other salesmen to engage in concerted activities for their mutual aid or protection. Other members of this Court agreed with the CIR that the Bank's conduct violated section 4(a) (5) which makes it an unfair labor practice for an employer to dismiss an employee for having filed charges under the Act. Some other members of this Court believe, without necessarily expressing approval of the way the respondents expressed their grievances, that what the Bank should have done was to refer the letter-charge to the grievance committee. This was its duty, failing which it committed an unfair labor practice under section 4(a) (6). For collective bargaining does not end with the execution of an agreement. It is a continuous process. The duty to bargain imposes on the parties during the term of their agreement the mutual obligation "to meet and confer promptly and expeditiously and in good faith . . . for the purpose of adjusting any grievances or question arising under such agreement"8 and a violation of this obligation is, by section 4 (a) (6) and (b) (3) an unfair labor practice.9 As Professors Cox and Dunlop point out: Collective bargaining . . . normally takes the form of negotiations when major conditions of employment to be written into an agreement are under consideration and of grievance committee meetings and arbitration when questions arising in the administration of an agreement are at stake.10 Instead of stifling criticism, the Bank should have allowed the respondents to air their grievances. Good faith bargaining required of the Bank an open mind and a sincere desire to negotiate over grievances.11 The grievance committee, created in the collective bargaining agreements, would have been an appropriate forum for such negotiation. Indeed, the grievance procedure is a part of the continuous process of collective bargaining. 12 It is intended to promote, as it were, a friendly dialogue between labor and management as a means of maintaining industrial peace. The Bank defends its action by invoking its right to discipline for what it calls the respondents' libel in giving undue publicity to their letter-charge. To be sure, the right of selforganization of employees is not unlimited,13 as the right of an employer to discharge for cause14 is undenied. The Industrial Peace Act does not touch the normal exercise of the right of an employer to select his employees or to discharge them. It is directed solely against the abuse of that right by interfering with the countervailing right of self-organization.15 But the difficulty arises in determining whether in fact the discharges are made because of such a separable cause or because of some other activities engaged in by employees for the purpose of collective bargaining.16 It is for the CIR, in the first instance, to make the determination, "to weigh the employer's expressed motive in determining the effect on the employees of management's otherwise equivocal act."17 For the Act does not undertake the impossible task of specifying in precise and unmistakable language each incident which constitutes an unfair labor practice. Rather, it leaves to the court the work of applying the Act's general prohibitory language in the light of infinite combinations of events which may be charged as violative of its terms. 18 As the Circuit Court of Appeals puts it: Determining the legality of a dismissal necessarily involves an appraisal of the employer's motives. In these cases motivations are seldom expressly avowed and avowals are not always candid. There thus must be a measure of reliance on the

administrative agency knowledgeable in labor-management relations and on the Trial Examiner who receives the evidence firsthand and is therefore in a unique position to determine the credibility of the witnesses. Where Examiner and Board are in agreement there is an increased presumption in favor of their resolution of the issue.19 What we have just essayed underscores at once the difference between Royal Interocean and Lakas ng Pagkakaisa on the one hand and this case on the other. In Royal Interocean, the employee's letter to the home office, for writing which she was dismissed, complained of the local manager's "inconsiderate and untactful attitude"20 a grievance which, the court found, "had nothing to do with or did not arise from her union activities." Nor did the court find evidence of discriminatory discharge in Lakas ng Pagkakaisa as the letter, which the employee wrote to the mother company in violation of the local company's rule, denounced "wastage of company funds." In contrast, the express finding of the court in this case was that the dismissal of the respondents was made on account of the letter they had written, in which they demanded the resignation of the bank president for a number of reasons touching labor-management relations reasons which not even the Bank's judgment that the respondents had committed libel could excuse it for making summary discharges21 in disregard of its duty to bargain collectively. In final sum and substance, this Court is in unanimity that the Bank's conduct, identified as an interference with the employees' right of self-organization, or as a retaliatory action, and/or as a refusal to bargain collectively, constituted an unfair labor practice within the meaning and intendment of section 4(a) of the Industrial Peace Act. ACCORDINGLY, the decision of July 4, 1962 and the resolution of August 9, 1962 of the Court of Industrial Relations are affirmed, at petitioner's cost.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION

Petitioner's second motion for reconsideration of the above Order was likewise denied by the third assailed Order dated January 9, 1996, as follows: 5 WHEREFORE, PREMISES CONSIDERED, our Order of 21 November 1995 is hereby affirmed en toto, subject to the afore-mentioned clarification on the issue of Sunday work. No further motions of this nature shall be entertained by this Office. The parties are given another ten (10) days from receipt hereof to submit their respective position papers and evidences (sic) relative to the issue of the legality of strike and termination of the union officers. The Facts Anticipating the expiration of their Collective Bargaining Agreement on July 31, 1995, petitioner and private respondent negotiated the terms and conditions of employment to be contained in a new CBA. The negotiation between the two parties was participated in by the National Conciliation and Mediation Board (NCMB) and the Office of the Secretary of Labor and Employment. Some items in the new CBA were amicably arrived at and agreed upon, but others were unresolved. To settle the unresolved issues, eight meetings between the parties were conducted. Because the parties failed to reach any significant progress in these meetings, petitioner declared a deadlock. On July 24, 1995, petitioner filed a notice of strike. Six (6) conciliation meetings conducted by the NCMB failed to settle the parties' differences. Then, the parties held marathon meetings at the plant level, but this remedy proved also unavailing. During a strike vote on August 16, 1995, the members of petitioner opted for a walkout. Private respondent then filed with the Department of Labor and Employment (DOLE) a petition for assumption of jurisdiction in accordance with Article 263 (g) of the Labor Code. In an Order dated August 22, 1995, public respondent assumed jurisdiction "over the entire labor dispute at Caltex (Philippines) Inc.," with the following disposition: 6 WHEREFORE ABOVE PREMISES CONSIDERED, this Office hereby assumes jurisdiction over the entire labor dispute at Caltex (Philippines) Inc. pursuant to Article 263 (g) of the Labor Code, as amended. Accordingly, any strike or lockout, whether actual or intended, is hereby enjoined. The parties are further directed to cease and desist from committing any and all acts which might exacerbate the situation. To expedite the resolution of the instant dispute, the parties are further directed to submit their respective position papers and evidence within ten (10) days from receipt hereof. In defiance of the above Order expressly restraining any strike or lockout, petitioner began a strike and set up a picket in the premises of private respondent on August 25, 1995. Thereafter, several company notices directing the striking employees to return to work were issued, but the members of petitioner defied them and continued their mass action. In the course of the strike, DOLE Undersecretary Bienvenido Laguesma interceded and conducted several conciliation meetings between the contending parties. He was able to convince the members of the union to return to work and to enter into a memorandum of agreement with private respondent. On September 9, 1995, the picket lines were finally lifted. Thereafter, the contending parties filed their position papers pertaining to unresolved issues. 7 Because of the strike, private respondent terminated the employment of some officers of petitioner union. The legality of these dismissals brought additional contentious issues. 8

G.R. No. 123782 September 16, 1997 CALTEX REFINERY EMPLOYEES ASSOCIATION (CREA), petitioner, vs. HON. JOSE S. BRILLANTES, in his capacity as Acting Secretary of the Department of Labor and Employment, and CALTEX (PHILIPPINES), Inc., respondents. RESOLUTION

PANGANIBAN, J.: Unless shown to be clearly whimsical, capricious or arbitrary, the orders or resolutions of the secretary of labor and employment resolving conflicts on what should be the contents of a collective bargaining agreement will be respected by this Court. We realize that, oftentimes, such orders and resolutions are based neither on definitive shades of black or white, nor on what is legally right or wrong. Rather, they are grounded largely on what is possible, fair and reasonable under the peculiar circumstances of each case. Statement of the Case Petitioner Caltex Refinery Employees Association (CREA) seeks through Rule 65 of the Rules of Court "reversal or modification" of three orders of public respondent, then Acting Secretary of Labor and Employment Jose S. Brillantes, in Case No. OS-AJ-0044-95 1 entitled "In re: Labor Dispute at Caltex (Phils.), Inc." The disposition of the first assailed Order 2 of public respondent dated October 9, 1995 reads: 3 WHEREFORE, ON THE BASIS OF THE FOREGOING, the Caltex Refinery Employees Association and Caltex Philippines, Inc. are hereby directed to execute a new collective bargaining agreement embodying therein the appropriate dispositions above spelled out including those subject of previous agreements. Provisions in the old CBA, or existing benefits subject of Company policy or practice not otherwise modified or improved herein are deemed maintained. New demands not otherwise touched upon or disposed of are hereby denied. The motions for reconsideration and clarification of the above Order filed by both petitioner and private respondent were denied in the second assailed Order dated November 21, 1995, which disposed: 4 WHEREFORE, except the modifications hereinabove set forth, the Order dated 9 October 1995 is hereby affirmed. Moreover, pursuant to the Agreement reached by the parties on 13 September 1995 for this Office to commence the proceedings concerning the legality of strike and the termination of the union officers, after the resolution of the CBA issues, both parties are hereby directed to submit their position papers and evidence within ten (10) days from receipt of a copy of this Order. For this purpose, Atty. Tito F. Genilo is hereby designated as Hearing Officer and authorized as such, to immediately conduct hearings and receive evidence and, thereafter, submit his report and recommendations thereon.

Again, the parties tried to resolve their differences through conciliation. Failing to come to any substantial agreement, the parties stopped further negotiation and, on September 13, 1995, decided to refer the problem to the secretary of labor and employment: 9 It appearing that the possibility of an amicable settlement appears remote, the parties agreed to submit their respective position paper and evidence simultaneously on 27 September 1995 at the Office of the Secretary. The parties further agreed that there will be no extension of time for filing and no further pleading will be filed. The decision of the Secretary of Labor and Employment will be rendered on or before October 9, 1995. The proceedings concerning the legal issues involving the legality of strike and the termination of the Union officers will be commenced by the Office of the Secretary after the resolution of the CBA issues. As already stated, public respondent issued as scheduled on October 9, 1995 the assailed Order resolving the deadlock, followed by two more assailed Orders on November 21, 1995 and January 16, 1996 disposing of the motions for reconsideration/clarification of both parties. Dissatisfied with these Orders issued by public respondent, petitioner sought remedy from this Court. After realizing the urgency of the case and after meticulously reviewing the Petition dated February 23, 1996; Comment by the private respondent dated April 16, 1996 which was adopted as its own by the public respondent; Reply by the petitioner dated September 7, 1996; Rejoinder dated October 3, 1996 and Sur-Rejoinder dated November 12, 1996, the Court resolved to give due course to the petition and to consider the case submitted for resolution without requiring memoranda from the parties. The Issues Petitioner does not specifically pinpoint the issues it wants the Court to rule upon. It appears, however, that petitioner questions public respondent's resolution of five issues in the CBA, specifically on wage increase, union security clause, retirement benefits or application of the new retirement plan, signing bonus and grievance and arbitration machineries. Private respondent, on the other hand, submits this lone issue: 10 Whether or not the Honorable Secretary of Labor and Employment committed grave abuse of discretion in resolving the instant labor dispute. The Court's Ruling The petition is partly meritorious. Preliminary Matter: Certiorari in Labor Cases At the outset, we must reiterate several settled rules in a petition for certiorari involving labor cases. First, the factual findings of quasi-judicial agencies (such as the Department of Labor and Employment), when supported by substantial evidence, are binding on this Court and entitled to great respect, considering the expertise of these agencies in their respective fields. 11 It is wellestablished that findings of these administrative agencies are generally accorded not only respect but even finality. 12 Second, substantial evidence in labor cases is such amount of relevant evidence which a reasonable mind will accept as adequate to justify a conclusion. 13 Third, in Flores vs. National Labor Relations Commission of Rule 65 as an extraordinary remedy:
14

It should be noted, in the first place, that the instant petition is a special civil action for certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use is available only and restrictively in truly exceptional cases those wherein the action of an inferior court, board or officer performing judicial or quasi-judicial acts is challenged for being wholly void on grounds of jurisdiction. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. It does not include correction of public respondent NLRC's evaluation of the evidence and factual findings based thereon, which are generally accorded not only great respect but even finality. No question of jurisdiction whatsoever is being raised and/or pleaded in the case at bench. Instead, what is being sought is a judicial re-evaluation of the adequacy or inadequacy of the evidence on record, which is certainly beyond the province of the extraordinary writ of certiorari. Such demand is impermissible for it would involve this Court in determining what evidence is entitled to belief and the weight to be assigned it. As we have reiterated countless times, judicial review by this Court in labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the proper labor officer or office based his or its determination but is limited only to issues of jurisdiction or grave abuse of discretion amounting to lack of jurisdiction. We shall thus use the foregoing time-tested standards in deciding this petition. 1. Wage Increase The main assailed Order dated October 9, 1995 resolved the ticklish demand for wage increase as follows: 15 With this in mind and taking into view similar factors as financial capacity, position in the industry, package of existing benefits, inflation rate, seniority, and maintenance of the wage differentiation between and among the various classes of employees within the entire Company, this Office hereby finds the following improved benefits fair, reasonable and equitable: 1. Wage increases Effective August 1, 1995 14% Effective August 1, 1996 14% Effective August 1, 1997 13% 2. meal subsidy P 15.00 In denying the motions for reconsideration/clarification of the above award, public respondent ruled in the challenged Order dated November 21, 1995: 16 First, on the matter of wages, we find no compelling reasons to alter or modify our award after having sufficiently passed upon the same arguments raised by both parties in our previous Order. The subsequent agreement on a package of wage increases at Shell Company, adverted to by the Union as the usual yardstick for purposes of developing its own package of improved wage increases, would not be sufficient basis to grant the same increases to the Union members herein considering that other factors, among which is employment size, were carefully taken into account. While it is true that inflation has direct impact on wage increases, it is not quite accurate to state that inflation "as of September 1995" is already registered at 11.8%. The truth of the matter is that the average inflation for the first ten (10) months was only 7.496% and Central Bank projections indicate that it will take a 13.5% inflation for November and December to record an

we explained the role and function

average inflation of 8.5% for the year. We, therefore, maintain the reasonableness of the package of wage increases that we awarded. Petitioner belittles the awarded increases. It insists that the increase should be ruled on the basis of four factors: "(a) the economic needs of the [u]nion's members; (b) the [c]ompany's financial capacity; (c) the bargaining history between the [u]nion and the [c]ompany; and (d) the traditional parity in wages between Caltex and Shell Refinery Employees." 17 Petitioner contends that the "inflation rate rose to 11.8% in September [1995], rose further in October, and is still a double-digit figure at the time of this writing." Therefore, public respondent's so-called "improved benefits" are in reality "retrogressive." 18 Petitioner tries to show private respondent's "immense financial capacity" by citing Caltex's "Banaba Housing Up-grading" which would cost "not less than P200,000,000.00" 19 Petitioner does "not begrudge" private respondent's "pampering of its [r]efinery [m]anagers and supervisors," but asks that the rank and file employees be "not left too far behind." 20 Petitioner maintains that the salaries of Shell Refinery employees be used as a "reference point" in upgrading the compensation of private respondent's employees because these two companies are in the "same industry and their refineries are both in Batangas." Thus, the wage increase of petitioner's members should be "15%/15%/15%." 21 Private respondent counters with a "proposed 9% 7% 7% increase for the same period with automatic adjustment should the increase fall short of the inflation rate." Hence, the Secretary's award of "14% 14% 13%" increase really comes "closer to the Union's position." 22 Petitioner's arguments fail to impress us. First, the matter of inflation rate was clearly addressed in public respondent's Order dated November 21, 1995. Contrary to petitioners undocumented claim of 11.8% inflation in September of 1995, the "truth of the matter is that the average inflation for the first ten (10) months was only 7.496%, and Central Bank projections indicate that it will take a 13.5% inflation for November and December to record an average inflation of 8.5% for the year." 23 Second, private respondent's financial capacity has been insufficiently explained in its Comment dated April 16, 1996 in which it stated that the Banaba "upgrading" should not be construed as a yardstick of its financial standing: 24 It is equally amazing how the Union (petitioner) desperately justifies their demands by comparing the "upgrading cost" of the Company's (private respondent) Banaba Housing Facilities, a matter totally unrelated to the case, to the cost of their demands. The Union not only errs in its choice of yardstick of the Company's capacity to pay, it likewise displays its ignorance of the Banaba Housing Program . The Banaba Housing Facility is not a benefit. It is an integral part of an indispensable requirement for smooth Plant operations and assurance of an emergency response crew in times of calamities and accidents. Employees who are required to stay in the housing facility are members of the Refinery's emergency response organization. It is also not a case of "upgrading." The Banaba Housing Facility was built in 1954. A significant number of its structure are dilapidated and in dire need of rehabilitation and preservation. Finally, Banaba is not a yardstick of the Company's capacity to pay, but rather, an eloquent demonstration of the Company's will to survive and remain globally competitive. The above reasoning convinces us that such upgrading should not be equated with private respondent's financial capacity to pay the proposed wage increase, but should be evaluated as a business judgment "to survive and remain globally competitive." We believe that the standard proof of a company's financial standing is its financial statements duly audited by independent and credible external auditors. 25 Third, the traditional parity in wages used by petitioner to justify its proposal is flimsy and trivial. Aside from its bare allegation of "similarity" in salaries and locations, petitioner did not proffer any substantial reason to impute grave abuse of discretion on the part of the

public respondent. On the other hand, we find private respondent's discussion of this matter reasonable, as the following shows: 26 It is further amazing that the Union continues to use an outmoded concept of the "Shell yardstick" and "relative parities in wages" to justify an imperative need for them to keep their traditional edge in pay over their industry counterparts. It is not just a matter of being above the rest. Sound compensation principle of higher productivity equals higher pay, as well as, recent developments in the industry have negated this argument. Both Shell and Petron continue to benefit from increasing manpower productivity. Shell, for instance, produces 155,000 barrels per day on a 120 manpower complement of operatives and rank and file; while the Company only produces 65,000 barrels per day with its 221 manpower complement. In addition, the counterpart union at Shell incurs an average overtime rate of 37%, as a percentage of base pay; the Union's overtime rate is 102%. Thus, the issue is productivity, not sales, and so far, the Company's Refinery is not as productive as Shell's or Petron's. To ask for relative parity in the face of this reality is not only unreasonable, it is likewise illogical. As it is, the wage increase of 14%, 14% and 13% will result in an average basic salary of P23,510,00 at the end of the three-year cycle. The resulting pay is excessive and disproportionately high compared with the value of the jobs within the bargaining unit. Stated differently, this average salary will be unreasonably high for the skills and qualifications needed for the job. Even now, with an average monthly salary (prior to the DOLE awarded CBA increases) of P16,010 plus overtime, holiday and other premiums way above those mandated by law, the Union members are already the highest paid in the Philippines, in terms of gross income. The alleged "similarity" in the situation of Caltex and Shell cannot be considered a valid ground for a demand of wage increase, in the absence of a showing that the two companies are also similar in "substantial aspects," as discussed above. Private respondent is merely asking that an employee should be paid on the basis of work done. If such employee is absent on a certain day, he should not, as a rule, be paid wages for that day. And if the employee has worked only for a portion of a day, he is not entitled to the pay corresponding to a full day. A contrary precept would ultimately result in the financial ruin of the employer. The age-old general rule governing relations between labor and capital, or management and employee, is "a fair day's wage for a fair day's work." If no work is performed by the employee, there can be no wage or pay unless, of course, the laborer was ready, willing and able to work but was locked out, dismissed, suspended or otherwise illegally prevented from working. 27 True, union members have the right to demand wage increases through their collective force; but it is equally cogent that they should also be able to justify an appreciable increase in wages. We observe that private respondent's detailed allegations on productivity are unrebutted. It is noteworthy that petitioner ignored this argument of private respondent and based its demand for wage increase not on the ground that they were as productive as the Shell employees. Thus, we cannot attribute grave abuse of discretion to public respondent. 2. Union Security Clause In the impugned Order dated October 9, 1995, public respondent's contested resolution on the "union [security] clause" reads: 28 The relevant provisions found in Article III of the CBA, which hereby read, thus: Sec. 1. Employees of the COMPANY who at the signing of this Agreement are members of the UNION and those who subsequently become members thereof shall maintain their membership with the UNION for the duration of this Agreement as a condition of employment.

Sec. 2. Members of the UNION who cease to be members of the UNION in good standing by reason of resignation or expulsion shall not be retained in the employment of the COMPANY. xxx xxx xxx are sought to be amended by the Union, to read as follows: Sec. 1. Employees of the Company who at the signing of this Agreement are members of the Union and those who subsequently become members thereof shall maintain their membership in GOOD STANDING with the Union for the duration of this Agreement as a condition of CONTINUOUS employment. Sec. 2. PURSUANT TO THE FOREGOING, ANY UNION MEMBER WHO CEASES TO BE SUCH MEMBER ON GROUNDS PROVIDED IN ITS CONSTITUTION AND BY-LAWS SHALL, UPON PRIOR WRITTEN NOTICE BY THE UNION TO THE COMPANY, BUT SUBJECT TO THE OBSERVANCE OF DUE PROCESS AND THE EXPRESS RATIFICATION OF THE MAJORITY OF THE UNION MEMBERSHIP, BE DISMISSED FROM EMPLOYMENT BY THE COMPANY; PROVIDED, HOWEVER, THAT THE UNION SHALL HOLD THE COMPANY FREE AND BLAMELESS FROM ANY LIABILITY IN THE EVENT THAT THE EMPLOYEE IN ANY MANNER QUESTIONS HIS DISMISSAL. The proposed amendment of the Union gives the same substantial effect as the existing provision. Rather, the same tackles more on procedure which, to our belief, is already sufficiently provided under its constitution and bylaws. Insofar as Union security is concerned, this is sufficiently addressed by the present provisions in the CBA. Hence, we find we are not competent to arbitrarily incorporate any modification thereof. We are convinced that any amendment on this matter should be a product of mutual concern and agreement. 29 Petitioner contends that the foregoing disposition leaving to the parties the decision on the union security clause issue is "contrary to the whole idea of assumption of jurisdiction." Petitioner argues that in spite of the provisions on the "union security clause," it may expel a member only on any of three grounds: non-payment of dues, subversion, or conviction for a crime involving moral turpitude. If the employee's act does not constitute any of these three grounds, the member would continue to be employed by private respondent. Thus, the disagreement between petitioner and private respondent on this issue is not only "procedural" but also "substantial." 30 On the other hand, private respondent argues that nothing prevents petitioner from expelling its members; however, termination of employment should be based only on these three grounds agreed upon in the existing CBA. Further, private respondent explains that petitioner's citation of Article 249 (a) 31 of the Labor Code is out of context. It adds that the cited section provides only for the right of a union to prescribe its own rules with respect to the acquisition and retention of membership, and that upholding the arguments of petitioner would make the private respondent a policeman of the union. 32 We agree with petitioner. The disagreement between petitioner and private respondent on the union security clause should have been definitively resolved by public respondent. The labor secretary should take cognizance of an issue which is not merely incidental to but essentially involved in the labor dispute itself, or which is otherwise submitted to him for resolution. 33 In this case, the parties have submitted the issue of the union security clause for public respondent's disposition. But the secretary of labor has given no valid reason for avoiding the said issue; he merely points out that this issue is a procedural matter. Such vacillation clearly sidesteps the nature of the union security clause as one intended to strengthen the contracting union and to protect it from the fickleness or perfidy of its own members. Without such safeguard, group solidarity becomes uncertain; the union becomes gradually weakened and increasingly vulnerable to company machinations. In this security clause lies the strength of the union during

the enforcement of the collective bargaining agreement. It is this clause that provides labor with substantial power in collective bargaining. The secretary of labor assumed jurisdiction over this labor dispute in an industry indispensable to national interest, precisely to settle once and for all the disputes over which he has jurisdiction at his level. In not performing his duty, the secretary of labor committed a grave abuse of discretion. 3. New Retirement Plan Public respondent's contested resolution on "retirement benefits (application of the new retirement plan)" in the Order dated November 21, 1995 reads: 34 Third, the matter of retirement benefits deserves a second look considering that the concerned employees were already previously granted the option to choose between the old and the new plan at the time the latter was initiated and they chose to be covered under the Old Plan. To accede to the Union's demand to cover them under the new plan entails a different arrangement under a new scheme and likewise requires the approval of a Board of Trustees. It is, therefore, understood that the new Retirement Plan does not apply to the more or less 40 employees being sought by the Union to be covered under the New Plan. Petitioner contends that "40 of its members who are still covered by the Old Retirement Plan because they were not able to exercise the option to shift to the New Retirement Plan, for one reason or another, when such option was given in the past" are included in the New Retirement Plan. Petitioner argues that the exclusion of forty employees from the New Plan constitutes grave abuse of discretion for three reasons. First, "it is a case of the left hand taking away, so to speak, what the right hand had given." Second, the change "was done for a very shallow reason." The new scheme was no longer new, "as the New Retirement Plan had been in place for at least two years." Third, in not applying the New Retirement Plan to the 40 employees, public respondent was perpetrating his department's discriminatory practice. 35 Private respondent counters that "these 40 or so employees have opted to remain covered by the old plan despite opportunities given them in 1985 to shift to the New Plan." 36 We hold that public respondent did not commit grave abuse of discretion in respecting the free and voluntary decision of the employees in regard to the Provident Plan and the irrevocable onetime option provided for in the New Retirement Plan. Although the union has every right to represent its members in the negotiation regarding the terms and conditions of their employment, it cannot negate their wishes on matters which are purely personal and individual to them. In this case, the forty employees freely opted to be covered by the Old Plan; their decision should be respected. The company gave them every opportunity to choose, and they voluntarily exercised their choice. The union cannot pretend to know better; it cannot impose its will on them. 4. Grievance Machinery and Arbitration The public respondent's contested resolution on "grievance and arbitration machineries" in the Order dated November 21, 1995 reads: 37 Seventh, we are constrained to take a closer look at the existing procedure concerning grievance in relation to the modifications being proposed by the Union. In this regard, we affirm our resolution to shorten the periods to process/resolve grievances based on existing practice from (45) days to (30) days at the first step and (10) days to seven (7) days at the second step which is the level of the VP for Manufacturing. We further reviewed the steps through which a grievance may be processed and in line with the principle to expedite the early resolution of grievances, we find that the establishment of a joint Council as an additional step in the grievance procedure, may only serve to protract the proceeding and, therefore, no longer necessary. Instead, the unresolved grievance, if, not settled within (7) days at the level of the VP for Manufacturing, shall automatically be referred

by both parties to voluntary arbitration in accordance with R.A. 6715. As to the number of Arbitrators for which the Union proposes to employ only one instead of a panel of three Arbitrators, we find it best to leave the matter to the agreement of both parties. Finally, we hereby advise the parties that the list of accredited voluntary arbitrators is now being maintained and disseminated by the National Conciliation and Mediation Board and no longer by the Bureau of Labor Relations. Petitioner contends that public respondent "derailed the grievance and arbitration scheme proposed by the Union." 38 Petitioner argues that the proposed "Grievance Settlement Council" is intended to "supplement the effort of the Vice President for Manufacturing in reviewing the grievance elevated to him, so that instead of acting alone . . . he will be obliged to convoke a conference of the Council to afford the grievant a thorough hearing." Petitioner's recommendation for a "single arbitrator is based on the proposition that if voluntary arbitration should be resorted to at all, this recourse should entail the least possible expense." 39 Private respondent counters that the disposition on the grievance machinery is likewise "fair and reasonable under the circumstances and in fact was merely a reiteration of the (u)nion's position during the conciliation meetings conducted by Undersecretary Bienvenido Laguesma." 40 No particular setup for a grievance machinery is mandated by law. Rather, Article 260 of the Labor Code, as incorporated by RA 6715, provides for only a single grievance machinery in the company to settle problems arising from "interpretation or implementation of their collective bargaining agreement and those arising from the interpretation or enforcement of company personnel policies." Article 260, as amended, reads: Art. 260. Grievance Machinery and Voluntary Arbitration. The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies. All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the Collective Bargaining Agreement. For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in the agreement a procedure for the selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement, which shall act with same force and effect as if the Arbitrator or panel of Arbitrators has been selected by the parties as described above. We believe that the procedure described by public respondent sufficiently complies with the minimum requirement of the law. Public respondent even provided for two steps in hearing grievances prior to their referral to arbitration. The parties will decide on the number of arbitrators who may hear a dispute only when the need for it arises. Even the law itself does not specify the number of arbitrators. Their alternatives whether to have one or three arbitrators have their respective advantages and disadvantages. In this matter, cost is not the only consideration; full deliberation on the issues is another, and it is best accomplished in a hearing conducted by three arbitrators. In effect, the parties are afforded the latitude to decide for themselves the composition of the grievance machinery as they find appropriate to a particular

situation. At bottom, we cannot really impute grave abuse of discretion to public respondent on this issue. 5. Signing Bonus The public respondent's contested resolution on the "signing bonus" in the Order dated November 21, 1995 reads: 41 Fifth, specifically on the issue of whether the signing bonus is covered under the "maintenance of existing benefits" clause, we find that a clarification is indeed imperative. Despite the expressed provision for a signing bonus in the previous CBA, we uphold the principle that the award for a signing bonus should partake the nature of an incentive and premium for peaceful negotiations and amicable resolution of disputes which apparently are not present in the instant case. Thus, we are constrained to rule that the award of signing bonus is not covered by the "maintenance of existing benefits" clause. Petitioner asseverates that the "signing bonus is an existing benefit embodied in the old CBA." 42 It explains that public respondent erred in removing the award of a signing bonus which is "given not only as an incentive for peaceful negotiations and amicable settlement of disputes but also as an extra award to the workers following the settlement of a CBA dispute by whatever means."
43

Private respondent disagrees, contending that a signing bonus is not awarded when CBA negotiations "result in a strike." There are two reasons therefor: First, "the grant of a signing bonus is a matter of discretion and cannot be demanded as a matter of right;" and second the signing bonus is meant as an incentive for a peaceful negotiation. Once these negotiations result in a strike, an illegal one at that, the basis or rationale for such an award is lost." 44 Although proposed by petitioner, 45 the signing bonus was not accepted by private respondent. 46 Besides, a signing bonus is not a benefit which may be demanded under the law. Rather, it is now claimed by petitioner under the principle of "maintenance of existing benefits" of the old CBA. However, as clearly explained by private respondent, a signing bonus may not be demanded as a matter of right. If it is not agreed upon by the parties or unilaterally offered as an additional incentive by private respondent, the condition for awarding it must be duly satisfied. In the present case, the condition sine qua non for its grant a non-strike was not complied with. In fact, private respondent categorically sated in its counter-proposal to the exclusion of those agreed upon before that the new collective bargaining agreement would constitute the only agreement between the parties, as follows: Sec. 4. Scope of Agreement. The terms and conditions of employment of the employees within the appropriate bargaining unit are embodied in this Agreement. On the other hand, all such benefits which are not expressly provided for in this Agreement, but which are now being accorded, may in the future be accorded, or might have been previously accorded to employees, by the COMPANY shall be deemed as purely discretionary or pure acts of grace and magnanimity on the part of the COMPANY in each particular case, and the continuance or repetition thereof now or in the future, no matter how long or how often, shall not be construed as establishing a right for the employee and/or obligation on the part of the COMPANY. 47 This provision on the scope of the agreement is further buttressed by the clause on waiver:
48

The parties acknowledge that during the negotiations which resulted in the execution of this Agreement, each of them had the unlimited opportunity to make demands and proposals with respect to any and all subjects and matters proper for collective bargaining and not prohibited by law; and the parties further acknowledge that the understandings and agreements arrived at by them after the exercise of that right and unlimited opportunity

are fully set forth in this Agreement. Therefore, the COMPANY and the UNION during the life of this Agreement, each voluntarily and unqualifiedly waives the right and each agrees that the other shall not be obligated to bargain collectively with respect to any subject or matter referred to or covered in this Agreement or with respect to any subject or matter not specifically referred to or covered in this Agreement even though such subject or matter may not have been within the knowledge or contemplation of either or both parties at the time they negotiated or signed this Agreement. Epilogue We have carefully reviewed the assailed Orders. Other than his failure to rule on the issue of union security, the secretary of labor cannot be indicted for grave abuse of discretion amounting to want or excess of jurisdiction. Basically, there is grave abuse of discretion amounting to lack of jurisdiction where the respondent board, tribunal or officer exercising judicial functions exercised its judgment in a capricious, whimsical, arbitrary or despotic manner. However, it has also been said that grave abuse is committed when "the lower court acted capriciously, and whimsically or the petitioner's contention appears td be clearly tenable or the broader interest of justice or public policy [so] require . . . ." Also, grave abuse of discretion is committed when the board, tribunal or officer exercising judicial function fails to consider evidence adduced by the parties. 49 In Saballa vs. National Labor Relations Commission, administrative body must be drawn:
50

nay, of black and white but one of wisdom, cogency and compromise as to what is possible, fair and reasonable under the circumstances. WHEREFORE, premises considered, the petition is partly GRANTED. The assailed Orders are AFFIRMED with the modification that the issue on the union security clause be REMANDED to the Department of Labor and Employment for definite resolution within one month from the finality of this Decision. No costs. SO ORDERED.

we ruled on how a decision of an

The Court has previously held that judges and arbiters should draw up their decisions and resolutions with due care, and make certain that they truly and accurately reflect their conclusions and their final dispositions. . . . The same thing goes for the findings of fact made by the NLRC, as it is a settled rule that such findings are entitled to great respect and even finality when supported by substantial evidence, otherwise, they shall be struck down for being whimsical and capricious and arrived at with grave abuse of discretion. It is a requirement of due process and fair play that the parties to a litigation be informed of how it was decided, with an explanation of the factual and legal reasons that led to the conclusions of the court. A decision that does not clearly and distinctly state the facts and the law of which it is based leaves the parties in the dark as to how it was reached and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the court for review by a higher tribunal. In the present case, the foregoing requirement has been sufficiently met. Petitioner's claim of grave abuse of discretion is anchored on the simple fact that public respondent adopted largely the proposals of private respondent. It should be understood that bargaining is not equivalent to an adversarial litigation where rights and obligations are delineated and remedies applied. It is simply a process of finding a reasonable solution to a conflict and harmonizing opposite positions into a fair and reasonable compromise. When parties agree to submit unresolved issues to the secretary of labor for his resolution, they should not expect their positions to be adopted in toto. It is understood that they defer to his wisdom and objectivity in insuring industrial peace. And unless they can clearly demonstrate bias, arbitrariness, capriciousness or personal hostility on the part of such public officer, the Court will not interfere or substitute the said officer's judgment with its own. In this case, it is possible that this Court, or some its members at least, may even agree with the wisdom of petitioner's claims. But unless grave abuse of discretion is cogently shown, this Court will refrain from using its extraordinary power of certiorari to strike down decisions and orders of quasi-judicial officers specially tasked by law to settle administrative questions and disputes. This is particularly true in the resolution of controversies in collective bargaining agreements where the question is rarely one of legal right or wrong

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 148303 October 17, 2002

Panel of Voluntary Arbitrators. Petitioners filed their opposition, contending that the RTC has jurisdiction since the complaint raises purely constitutional and legal issues. On September 8, 1999, the RTC dismissed the complaint for lack of jurisdiction, thus: "This Court originally is of the honest belief that the issue involved in the instant case is more constitutional than labor. It was convinced that the dispute involves violation of employees constitutional rights to self-incrimination, due process and security of tenure. Hence, the issuance of the Temporary Restraining Order. "However, based on the pleadings and pronouncements of the parties, a close scrutiny of the issues would actually reveal that the main issue boils down to a labor dispute. The company implemented a new drug abuse policy whereby all its employees should undergo a drug test under pain of penalty for refusal. The employees who are the union members questioned the implementation alleging that: can they be compelled t o undergo the drug test even against their will, which violates their right against self-incrimination? At this point, the issue seems constitutional. But if we go further and ask the reason for their refusal to undergo the drug test, the answer is because the policy was formulated and implemented without proper consultation with the union members. So that, the issue here boils down to a labor dispute between an employer and employees. xxxxxxxxx "Clearly, in the case at bar, the constitutional issue is closely related or intertwined with the labor issue, so much so that this Court is inclined to believe that it has no jurisdiction but the NLRC."2 Petitioners filed a motion for reconsideration but was denied, prompting them to file with this Court a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended. They alleged that in dismissing their complaint for lack of jurisdiction, the RTC gravely abused its discretion. On November 24, 1999, this Court referred the petition to the Court of Appeals for consideration and adjudication on the merits or any other action as it may deem appropriate. On December 28, 2000, the Appellate Court rendered its Decision 3 dismissing the petition, thus: "Settled is the rule that the remedy against a final order is an appeal, and not a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure. The party aggrieved does not have the option to substitute the special civil action of certiorari under Rule 65 for the remedy of appeal. The existence and availability of the right of appeal are antithetical to the availment of the special civil action of certiorari. And while the special civil action of certiorari may be resorted to even if the remedy of appeal is available, it must be shown that the appeal is inadequate, slow, insufficient and will not promptly relieve a party from the injurious effects of the order complained of, or where the appeal is ineffective. "Inasmuch as only questions of law are raised by petitioners in assailing the Order of respondent Judge dismissing their complaint for injunction, the proper remedy, therefore, is appeal to the Supreme Court by petition for review on certiorari in accordance with Rule 45 of the 1997 Rules of Civil Procedure. Other than the bare, stereotyped allegation in the petition that there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law available to the petitioner herein whose right has been violated, petitioners have not justified their resort to Rule 65 of the 1997 Rules of Civil Procedure. xxxxxxxxx

UNION OF NESTLE WORKERS CAGAYAN DE ORO FACTORY (UNWCF for brevity), represented by its President YURI P. BERTULFO and officers, namely, DEXTER E. AGUSTIN, DANTE S. SEAREZ, EDDIE P. OGNIR, JEFFREY C. RELLIQUETE, ENRIQUITO B. BUAGAS, EDWIN P. SALVAA, RAMIL B. MONSANTO, JERRY A. TABILIRAN, ARNOLD A. TADLAS, REYQUE A. FACTURA, NAPOLEON S. GALERINA, JR., TOLENTINO T. MICABALO and EDDIE O. MACASOCOL, petitioners, vs. NESTLE PHILPPINES, INC., represented by its President JUAN B. SANTOS, RUDY P. TRILLANES, Factory Manager, Cagayan de Oro City Branch and FRANCIS L. LACSON, Cagayan de Oro City Human Resources Manager, respondents. DECISION SANDOVAL-GUTIERREZ, J.: Before us is a petition for review on certiorari 1 challenging the Decision of the Court of Appeals dated December 28, 2000 and its Resolution dated April 19, 2001 in CA GR-SP No. 56656, "Union of Nestle Workers Cagayan de Oro Factory, et al. vs. Nestle Philippines, Inc. et al." On August 1, 1999, Nestle Philippines, Inc. (Nestle) adopted Policy No. HRM 1.8, otherwise known as the "Drug Abuse Policy." Pursuant to this policy, the management shall conduct simultaneous drug tests on all employees from different factories and plants. Thus, on August 17, 1999, drug testing commenced at the Lipa City factory, then followed by the other factories and plants. However, there was resistance to the policy in the Nestle Cagayan de Oro factory. Out of 496 employees, only 141 or 28.43% submitted themselves to drug testing. On August 20, 1999, the Union of Nestle Workers Cagayan de Oro Factory and its officers, petitioners, wrote Nestle challenging the implementation of the policy and branding it as a mere subterfuge to defeat the employees constitutional rights. Nestle claimed that the policy is in keeping with the governments thrust to eradicate the proliferation of drug abuse, explaining that the company has the right: (a) to ensure that its employees are of sound physical and mental health and (b) to terminate the services of an employee who refuses to undergo the drug test. On August 23, 1999, petitioners filed with the Regional Trial Court (RTC), Branch 40, Cagayan de Oro City, a complaint for injunction with prayer for the issuance of a temporary restraining order against Nestle, Rudy P. Trillanes, Factory Manager of the Cagayan de Oro City Branch, and Francis L. Lacson, Cagayan de Oro City Human Resources Manager (respondents herein), docketed as Civil Case No. 99-471. On August 24, 1999, the RTC issued a temporary restraining order enjoining respondents from proceeding with the drug test. Forthwith, they filed a motion to dismiss the complaint on the ground that the RTC has no jurisdiction over the case as it involves a labor dispute or enforcement of a company personnel policy cognizable by the Voluntary Arbitrator or

"It is noteworthy that petitioners have not disputed the allegations in paragraph 28 of private respondents Comment on the petition that drug testing of the entire workforce of Nestle Cagayan de Oro factory, including herein petitioners, submitted themselves to the drug test required by management and was confirmed free from illegal drug abuse. In view thereof, the instant petition, which prays for an injunction of the drug test of the Nestle Cagayan de Oro factory workers, had become moot and academic. The remedy of injunction could no longer be entertained because the act sought to be prevented had been consummated." Petitioners sought reconsideration but to no avail. Hence this petition for review on certiorari. Petitioners raise the following issues for our resolution: I. Whether the Regional Trial Court has jurisdiction over petitioners suit for injunction; and II. Whether petitioners resort to certiorari under Rule 65 is in ord er. On the first issue, we hold that petitioners insistence that the RTC has jurisdiction over their complaint since it raises constitutional and legal issues is sorely misplaced. The fact that the complaint was denominated as one for injunction does not necessarily mean that the RTC has jurisdiction. Well-settled is the rule that jurisdiction is determined by the allegations in the complaint.4 The pertinent allegations of petitioners amended complaint read: "x x x x x x x x x 5. Plaintiffs are aggrieved employees of the Nestle Philippines, Inc. who are subjected to the new policy of the management for compulsory Drug Test, without their consent and approval; xxxxxxxxx 8. That the said policy was implemented last August 1, 1999, and the Union was only informed last August 20, 1999, during a meeting held on that day, that all employees who are assigned at the CDO Factory will be compulsorily compelled to undergo drug test, whether they like it or not, without even informing the Union on this new policy adopted by the Management and no guidelines was set pertaining to this drug test policy. 9. That there was no consultation made by the management or even consultation from the employees of this particular policy, as the nature of the policy is punitive in character, as refusal to submit yourself to drug test would mean suspension from work for four (4) to seven (7) days, for the first refusal to undergo drug test and dismissal for second refusal to undergo drug test, hence, they were not afforded due process x x x; xxxxxxxxx 12. That it is not the question of whether or not the person will undergo the drug test but it is the manner how the drug test policy is being implemented by the management which is arbitrary in character. xxxxxxxxx 16. That the exercise of management prerogative to implement the said drug test, even against the will of the employees, is not absolute but subject to the limitation imposed by law x x x;"5 It is indubitable from the foregoing allegations that petitioners are not per se questioning "whether or not the person will undergo the drug test" or the constitutionality or legality of the Drug Abuse Policy. They are assailing the manner by which respondents are

implementing the policy. According to them, it is "arbitrary in character" because: (1) the employees were not consulted prior to its implementation; (2) the policy is punitive inasmuch as an employee who refuses to abide with the policy may be dismissed from the service; and (3) such implementation is subject to limitations provided by law which were disregarded by the management. Is the complaint, on the basis of its allegations, cognizable by the RTC? Respondent Nestles Drug Abuse Policy states that "(i)llegal drugs and use of regulated drugs beyond the medically prescribed limits are prohibited in the workplace. Illegal drug use puts at risk the integrity of Nestle operations and the safety of our products. It is detrimental to the health, safety and work-performance of employees and is harmful to the welfare of families and the surrounding community."6 This pronouncement is a guiding principle adopted by Nestle to safeguard its employees welfare and ensure their efficiency and well-being. To our minds, this is a company personnel policy. In San Miguel Corp. vs. NLRC,7 this Court held: "Company personnel policies are guiding principles stated in broad, long-range terms that express the philosophy or beliefs of an organizations top authority regarding personnel matters. They deal with matter affecting efficiency and well-being of employees and include, among others, the procedure in the administration of wages, benefits, promotions, transfer and other personnel movements which are usually not spelled out in the collective agreement." Considering that the Drug Abuse Policy is a company personnel policy, it is the Voluntary Arbitrators or Panel of Voluntary Arbitrators, not the RTC, which exercises jurisdiction over this case. Article 261 of the Labor Code, as amended, pertinently provides: Art. 261. Jurisdiction of Voluntary Arbitrators or Panel of Voluntary Arbitrators. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies x x x." (Emphasis supplied) With respect to the second issue raised by petitioners, what they should have interposed is an appeal to the Court of Appeals, not a petition for certiorari which they initially filed with this Court, since the assailed RTC order is final. 8 Certiorari is not a substitute for an appeal.9 For certiorari to prosper, it is not enough that the trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction, as alleged by petitioners. The requirement that there is no appeal, nor any plain, speedy and adequate remedy in the ordinary course of law must likewise be satisfied. 10 We must stress that the remedy of appeal was then available to petitioners, but they did not resort to it. And while this Court in exceptional instances allowed a partys availment of certiorari instead of appeal, we find that no such exception exists here. WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision of the Court of Appeals dated December 28, 2000 and its Resolution dated April 19, 2001 in CA GR-SP No. 56656 are affirmed. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 140960 January 20, 2003

a. the 214 complainants, as listed in the Annex A, shall be considered regular employees of the respondents six (6) months from the first day of service at CLAS; b. the said complainants, being entitled to the CBA benefits during the regular employment, are awarded a) sick leave, b) vacation leave & c) annual wage and salary increases during such period in the amount of FIVE MILLION SEVEN HUNDRED SEVEN THOUSAND TWO HUNDRED SIXTY ONE PESOS AND SIXTY ONE CENTAVOS (P5,707,261.61) as computed in "Annex A"; c. the respondents shall pay attorneys fees of ten (10) percent of the total award; d. an interest of twelve (12) percent per annum or one (1) percent per month shall be imposed to the award from the date of promulgation until fully paid if only to speed up the payment of these long over due CBA benefits deprived of the complaining workers. Accordingly, all separation and/or retirement benefits shall be construed from the date of regularization aforementioned subject only to the appropriate government laws and other social legislation. SO ORDERED.
3

LUDO & LUYM CORPORATION, petitioner, vs. FERDINAND SAORNIDO as voluntary arbitrator and LUDO EMPLOYEES UNION (LEU) representing 214 of its officers and members, respondents. QUISUMBING, J.: This petition for review on certiorari seeks to annul and set aside the decision of the Court of Appeals promulgated on July 6, 1999 and its Order denying petitioners motion for reconsideration in CA-G.R. SP No. 44341. The relevant facts as substantially recited by the Court of Appeals in its decision are as follows: Petitioner LUDO & LUYM CORPORATION (LUDO for brevity) is a domestic corporation engaged in the manufacture of coconut oil, corn starch, glucose and related products. It operates a manufacturing plant located at Tupas Street, Cebu City and a wharf where raw materials and finished products are shipped out. In the course of its business operations, LUDO engaged the arrastre services of Cresencio Lu Arrastre Services (CLAS) for the loading and unloading of its finished products at the wharf. Accordingly, several arrastre workers were deployed by CLAS to perform the services needed by LUDO. These arrastre workers were subsequently hired, on different dates, as regular rankand-file employees of LUDO every time the latter needed additional manpower services. Said employees thereafter joined respondent union, the LUDO Employees Union (LEU), which acted as the exclusive bargaining agent of the rank-and-file employees. On April 13, 1992, respondent union entered into a collective bargaining agreement with LUDO which provides certain benefits to the employees, the amount of which vary according to the length of service rendered by the availing employee. Thereafter, the union requested LUDO to include in its members period of service the time during which they rendered arrastre services to LUDO through the CLAS so that they could get higher benefits. LUDO failed to act on the request. Thus, the matter was submitted for voluntary arbitration. The parties accordingly executed a submission agreement raising the sole issue of the date of regularization of the workers for resolution by the Voluntary Arbitrator. In its decision dated April 18, 1997, the Voluntary Arbitrator ruled that: (1) the respondent employees were engaged in activities necessary and desirable to the 2 business of petitioner, and (2) CLAS is a labor-only contractor of petitioner. It disposed of the case thus: WHEREFORE, in view of the foregoing, this Voluntary Arbitrator finds the claims of the complainants meritorious and so hold that:
1

In due time, LUDO filed a motion for reconsideration, which was denied. On appeal, the Court of Appeals affirmed in toto the decision of the Voluntary Arbitrator, thus: WHEREFORE, finding no reversible error committed by respondent voluntary arbitrator, the instant petition is hereby DISMISSED. SO ORDERED.
4

Hence this petition. Before us, petitioner raises the following issues: I WHETHER OR NOT BENEFITS CONSISTING OF SALARY INCREASES, VACATION LEAVE AND SICK LEAVE BENEFITS FOR THE YEARS 1977 TO 1987 ARE ALREADY BARRED BY PRESCRIPTION WHEN PRIVATE RESPONDENTS FILED THEIR CASE IN JANUARY 1995; II WHETHER OR NOT A VOLUNTARY ARBITRATOR CAN AWARD 5 BENEFITS NOT CLAIMED IN THE SUBMISSION AGREEMENT. Petitioner contends that the appellate court gravely erred when it upheld the award of benefits which were beyond the terms of submission agreement. Petitioner asserts that the arbitrator must confine its adjudication to those issues submitted by the parties for arbitration, which in this case is the sole issue of the date of regularization of the workers. Hence, the award of benefits by the arbitrator was done in excess of 6 jurisdiction. Respondents, for their part, aver that the three-year prescriptive period is reckoned only from the time the obligor declares his refusal to comply with his obligation in clear and unequivocal terms. In this case, respondents maintain that LUDO merely

promised to review the company records in response to respondents demand for adjustment in the date of their regularization without making a categorical statement 7 of refusal. On the matter of the benefits, respondents argue that the arbitrator is empowered to award the assailed benefits because notwithstanding the sole issue of the date of regularization, standard companion issues on reliefs and remedies are deemed incorporated. Otherwise, the whole arbitration process would be rendered 8 purely academic and the law creating it inutile. The jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators and Labor Arbiters is clearly defined and specifically delineated in the Labor Code. The pertinent provisions of the Labor Code, read: Art. 217. Jurisdiction of Labor Arbiters and the Commission. --- (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: 1. Unfair labor practice cases: 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wage, rates of pay, hours of work and other terms and conditions of employment; 4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; xxx Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement. The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes, grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and refer the same to the Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement. Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks."

In construing the above provisions, we held in San Jose vs. NLRC, that the jurisdiction of the Labor Arbiter and the Voluntary Arbitrator or Panel of Voluntary Arbitrators over the cases enumerated in the Labor Code, Articles 217, 261 and 262, 10 can possibly include money claims in one form or another. Comparatively, in 11 Reformist Union of R.B. Liner, Inc. vs. NLRC, compulsory arbitration has been defined both as "the process of settlement of labor disputes by a government agency which has the authority to investigate and to make an award which is binding on all the parties, and as a mode of arbitration where the parties are compelled to accept the resolution of their dispute through arbitration by a third party (emphasis 12 supplied)." While a voluntary arbitrator is not part of the governmental unit or labor departments personnel, said arbitrator renders arbitration services provided for under labor laws. Generally, the arbitrator is expected to decide only those questions expressly delineated by the submission agreement. Nevertheless, the arbitrator can assume that he has the necessary power to make a final settlement since arbitration is the 13 final resort for the adjudication of disputes. The succinct reasoning enunciated by the CA in support of its holding, that the Voluntary Arbitrator in a labor controversy has jurisdiction to render the questioned arbitral awards, deserves our concurrence, thus: In general, the arbitrator is expected to decide those questions expressly stated and limited in the submission agreement. However, since arbitration is the final resort for the adjudication of disputes, the arbitrator can assume that he has the power to make a final settlement. Thus, assuming that the submission empowers the arbitrator to decide whether an employee was discharged for just cause, the arbitrator in this instance can reasonable assume that his powers extended beyond giving a yes-or-no answer and included the power to reinstate him with or without back pay. In one case, the Supreme Court stressed that "xxx the Voluntary Arbitrator had plenary jurisdiction and authority to interpret the agreement to arbitrate and to determine the scope of his own authority subject only, in a proper case, to the certiorari jurisdiction of this Court. The Arbitrator, as already indicated, viewed his authority as embracing not merely the determination of the abstract question of whether or not a performance bonus was to be granted but also, in the affirmative case, the amount thereof. By the same token, the issue of regularization should be viewed as twotiered issue. While the submission agreement mentioned only the determination of the date or regularization, law and jurisprudence give the voluntary arbitrator enough leeway of authority as well as adequate prerogative to accomplish the reason for which the law on voluntary arbitration was created speedy labor justice. It bears stressing that the underlying reason why this case arose is to settle, once and for all, the ultimate question of whether respondent employees are entitled to higher benefits. To require them to file another action for payment of such benefits would certainly undermine labor proceedings and contravene the 14 constitutional mandate providing full protection to labor. As regards petitioners contention that the money claim in this case is barred by prescription, we hold that this contention is without merit. So is petitioners stance that the benefits claimed by the respondents, i.e., sick leave, vacation leave and 13thmonth pay, had already prescribed, considering the three-year period for the

institution of monetary claims. Such determination is a question of fact which must be ascertained based on the evidence, both oral and documentary, presented by the parties before the Voluntary Arbitrator. In this case, the Voluntary Arbitrator found that prescription has not as yet set in to bar the respondents claims for the monetary benefits awarded to them. Basic is the rule that findings of fact of administrative and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great respect but even 16 finality. Here, the Voluntary Arbitrator received the evidence of the parties first-hand. No compelling reason has been shown for us to diverge from the findings of the Voluntary Arbitrator, especially since the appellate court affirmed his findings, that it took some time for respondent employees to ventilate their claims because of the repeated assurances made by the petitioner that it would review the company records and determine therefrom the validity of the claims, without expressing a categorical denial of their claims. As elucidated by the Voluntary Arbitrator: The respondents had raised prescription as defense. The controlling law, as ruled by the High Court, is: "The cause of action accrues until the party obligated refuses xxx to comply with his duty. Being warded off by promises, the workers not having decided to assert [their] right[s], [their] causes of action had not acc rued" (Citation omitted.) Since the parties had continued their negotiations even after the matter was raised before the Grievance Procedure and the voluntary arbitration, the respondents had not refused to comply with their duty. They just wanted the complainants to present some proofs. The complainants cause of action had not therefore accrued yet. Besides, in the earlier voluntary arbitration case aforementioned involving exactly the same issue and employees similarly situated as the complainants, the same defense was raised and dismissed by Honorable Thelma Jordan, Voluntary Arbitrator. In fact, the respondents promised to correct their length of service and grant them the back CBA benefits if the complainants can prove they are entitled rendered the former in estoppel, barring them from raising the defense of laches or prescription. To hold otherwise amounts to rewarding the respondents for their duplicitous representation and abet them in a dishonest 17 scheme against their workers. Indeed, as the Court of Appeals concluded, under the equitable principle of estoppel, it will be the height of injustice if we will brush aside the employees claims on a mere technicality, especially when it is petitioners own action that prevented them from interposing the claims within the prescribed period. WHEREFORE, the petition is denied. The appealed decision of the Court of Appeals in CA-G.R. SP No. 44341 and the resolution denying petitioners motion for reconsideration, are AFFIRMED. Costs against petitioner. SO ORDERED.

15

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-43890 July 16, 1984 OCEANIC BIC DIVISION (FFW), PABLITO ORDANOSO, petitioners, vs. FLERIDA RUTH P. ROMERO AS VOLUNTARY ARBITRATOR. OCEANIC BIC MANUFACTURING, and GLICERIO LEDESMA, respondents. Jaime D. Lauron for petitioners. Siguion Reyna, Montecillo & Ongsiako Law Office for respondents.

On September 10, 1974, a memorandum was issued by Ledesma to some workers, among them Ordanoso, warning them of their low average performance with the advice to perform on the average performance level. On October 3, 1974, Ledesma terminated Ordanoso's services in the company because of his below average performance rating. Thereafter, the following events transpired: On October 4, 1974, complainant union (FFW Oceanic BIC Manufacturing Chapter), through its union president, Alfonso Leonids sent a letter dated October 3, 1974, to the Management of the respondent company wherein the union asked the company for a grievance conference in order to discuss the dismissal of complainant Pablito Ordanoso effective October 4, 1974. Apparently, the parties failed to reach an amicable settlement in the grievance conference. On October 25, 1974, the complainants (the local union and Pablito Ordanoso) filed a complaint with the NLRC, Dept. of Labor, docketed as NLRC Case No. Lr-6538. In the said complaint, the complainants charged the respondents company and Ledesma for: 1. Unfair Labor Practice; 2. Unjust and illegal dismissal of complainant Pabiko Ordanoso; 3. Violation of the CBA 4. Violation of P.D. No. 21 and its Implementing Rules. xxx xxx xxx IV The afore-mentioned complaint (bearing another case no. Lr43174) was finally disposed of by the conciliator of the Dept. of Labor, Regional Office No. IV, on January 16, 1975, by referring back the case to the parties for exhaustion of the grievance procedure in accordance with the CBA. ... V On January 20, 1975, the Federation of Free Workers, the mother federation of complainant union, sent a letter to the management of respondent company wherein the Federation suggested three (3) names to select from, as voluntary arbitrator. The parties failed to mutually select any of the three named in said letter but later selected Atty. Flerida Ruth P. Romero of the U.P. Law Center, Diliman, Quezon City. ... (Petition, Rollo, pp. 5-6). After due hearing, the voluntary arbitrator issued her decision dated April 30, 1976 upholding the company's actions. The dispositive portion of the decision reads: xxx xxx xxx

GUTIERREZ, JR., J.: In this petition for review on certiorari, we are asked to interpret Section 1 1 of Presidential Decree No. 21, ("Creating A National Labor Relations Commission And For Other Purposes") in relation to Sections 1, 3, and 10 of the Implementing Instructions No. 1 dated November 9, 1972 issued by the then ad hoc National Labor Relations Commission. The provisions refer to the clearance requirements for the dismissal, lay-off, or termination from employment of an employee by his employer. The facts of the case are not in dispute. Petitioner Pablito Ordanoso entered into a contract of temporary employment for the period of six (6) months beginning from October 3, 1973 to April 3, 1974 with the respondent corporation. Incorporated in the contract is a stipulation that "it is understood that the company has the right to separate you from its employ at anytime within the above period should your services not be satisfactory." When the contract expired on April 3, 1974, Ordanoso entered into another 6-month contract of employment, this time as probationary worker with the respondent company, from April 4, 1974 to October 4, 1974. A note to the effect that "this extension of your employment contract is being given with formal advice that you improve on your performance" was added to the stipulation which formed part of the first contract. The respondent company through "group leaders" conducts periodic performance ratings on the workers. The results are considered for the workers' conversion from probationary to regular permanent employment. The criteria for performance ratings were cooperation, attendance, quality of work, skill, initiative and interest in work, leadership, obedience and intelligence. In the case of Ordanoso, Mr. Glicerio Ledesma, production manager, explained that the aforestated note attached to his contract of employment shows that Ordanoso's performance rating during his first six months employment in the company was "just passing." Subsequent performance ratings of Ordanoso by his group leaders submitted to Mr. Ledesma showed that his work performance was not satisfactory. Hence, in the memorandum prepared by Ledesma on workers' performance ratings which he sent to K. Bachmann, Jr., general manager, Ordanoso's name was included among those with below average performance. On the following day, Ledesma sent a memorandum to Ordanoso, telling him to improve his performance as he only attained a 2.75 rating

Ipinapasya ng Tagahatol na ang pagtitiwalag kay Ordanoso ay hindi unfair labor practice, hindi labag sa collective bargaining contract at sa P.D. No. 21 o sa alituntunin nito, sapagkat hindi nauukol sa kanya ang pangangailangan ng written clearance bago magtanggal ng isang manggagawa. Isinagawa sa siyudad ng Quezon nitong ika-30 ng Abril, 1976. The respondents raise a jurisdictional issue. They contend that this Court does not have the power to review the voluntary arbitrator's award on the ground that: 1) Presidential Decree No. 442, (Labor Code) precludes this Court from reviewing voluntary arbitration awards save on special circumstances which are not present in the instant case; and 2) the nature of voluntary arbitration awards should be considered final. Petitioner Ordanoso was dismissed on October 4, 1974. He filed the complaint for illegal dismissal with the Department of Labor on October 25, 1974. Article 294 of the Labor Code, as amended provides: "All actions or claims accruing prior to the effectivity of this Code shall be determined in accordance with the laws in force at the time of their accrual." The law applicable in the instant case is Presidential Decree No. 21. In fact, the voluntary arbitrator herself admits this fact in her decision when she said: "Noong itiniwalag si Ordanoso noong ika-4 ng Oktubre, 1974, ang batas na umiiral ukol sa pagtatanggal ng mga tauhan ng mga bahay-kalakal ay ang Presidential Decree No. 21 at mga alituntunin nito ... Anent the proposition that voluntary arbitration awards should be considered final, the respondents cite American precedents: The nature of an arbitrator's award is that it is equivalent to the first law of the parties. It is so because the disputants have willingly and contractually consented that the will of the arbitrator shall be substituted in place of theirs. For, after all, the parties have mutually reposed their trust and confidence in the honesty, integrity, competence and capability of the arbitrator. Such being the case, the role of the reviewer of a voluntary arbitration award is very limited, It merely acts as a guardian to see to it that no serious miscarriage of justice may be perpetuated or that public order or public policy might be subverted. The refusal of courts to review the merits of an arbitration award is the proper approach to an arbitration under collective bargaining agreements. The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards. (Margetta v. Pam Pam Corporation, 354 F. Supp. 158, 1973), p. 160; cited in Fernandez, Labor Arbitration [1975], p. 355. xxx xxx xxx The refusal of courts to review the merits of an arbitration award is the proper approach to an arbitration under collective bargaining agreements. The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards. (Union Emp. Div., Etc. v. Columbia

Typographical Union No. 101, 353 F. Supp. 1348); (1973), p. 1349; cited in Fernandez, Ibid., pp. 355-356; We hold that the District Court misconstrued its mandate. The duty of the courts is not to determine whether a prima facie case on the merits has been put forth by the party seeking arbitration. It is not the province of the court to look into the facts of the case. (Chambers v. Beaunit Corp., 404 F. 2d 128, Sanitary Corp. v. Local 7, International Brotherhood of Operative Potters, 358 F. 2d 455, 458 (6th Cir. 1966). The arbitrator is not to be viewed as a special master who will be called in after a prima facie case on the merits has been made out. (Local No. 6, M. & P. Int. U. of Am. v. Boyd G. Heminger, Inc., 483 F. 2d 129):(1973), p. 131. xxx xxx xxx It is particularly understood that the arbitral process in collective bargaining presupposes that the parties wanted the informed judgment of an arbitrator, precisely for the reason that judges cannot provide it. Therefore, a court asked to enforce a promise to arbitrate should ordinarily refrain from involving itself in the interpretation of the substantive provisions of the contract. (Morris v. Werner Continental, Inc. 466 F.2d (1185); (1972), pp. 1190-1191, Ibid.) We agree with the petitioner that the decisions of voluntary arbitrators must be given the highest respect and as a general rule must be accorded a certain measure of finality. This is especially true where the arbitrator chosen by the parties enjoys the first rate credentials of Professor Flerida Ruth Pineda Romero, Director of the U.P. Law Center and an academician of unquestioned expertise in the field of Labor Law. It is not correct, however, that this respect precludes the exercise of judicial review over their decisions. Article 262 of the Labor Code making voluntary arbitration awards final, inappealable, and executory except where the money claims exceed P100,000.00 or 40% of paid-up capital of the employer or where there is abuse of discretion or gross incompetence refers to appeals to the National Labor Relations Commission and not to judicial review. Inspite of statutory provisions making "final" the decisions of certain administrative agencies, we have taken cognizance of petitions questioning these decisions where want of jurisdiction, grave abuse of discretion, violation of due process, denial of substantial justice, or erroneous interpretation of the law were brought to our attention. There is no provision for appeal in the statute creating the Sandiganbayan but this has not precluded us from examining decisions of this special court brought to us in proper petitions. Thus, we have ruled: Yanglay raised a jurisdictional question which was not brought up by respondent public officials. He contends that this Court has no jurisdiction to review the decisions of the NLRC and the Secretary of Labor 'under the principle of separation of powers' and that judicial review is not provided for in Presidential Decree No. 21. That contention is a flagrant error. 'It is generally understood that as to administrative agencies exercising quasi-judicial or legislative power there is an underlying power in the courts to scrutinize the acts of such agencies on questions of law and jurisdiction even

though no right of review is given by statute (73 C.J.S. 506, note 56). The purpose of judicial review is to keep the administrative agency within its jurisdiction and protect substantial rights of parties affected by its decisions'(73 C.J.S. 507, Sec. 165). It is part of the system of checks and balances which restricts the separation of powers and forestalls arbitrary and unjust adjudications. Judicial review is proper in case of lack of jurisdiction, grave abuse of discretion, error of law, fraud or collusion (Timbancaya vs. Vicente, 62 O.G. 9424; Macatangay vs. Secretary of Public Works and Communications, 63 O.G. 11236; Ortua vs. Singson Encarnacion, 59 Phil. 440). "The courts may declare an action or resolution of an administrative authority to be illegal (1) because it violates or fails to comply with some mandatory provision of the law or (2) because it is corrupt, arbitrary or capricious" (Borromeo vs. City of Manila and Rodriguez Lanuza, 62 Phil. 512, 516; Villegas vs. Auditor General, L-21352, November 29,1966, 18 SCRA 877, 891). [San Miguel Corporation v. Secretary of Labor, 64 SCRA 601]. xxx xxx xxx It is now settled rule that under the present Labor Code, (Presidential Decree No. 442, as amended [1974] if lack of power or arbitrary or improvident exercise of authority be shown, thus giving rise to a jurisdictional question, this Court may, in appropriate certiorari proceedings, pass upon the validity of the decisions reached by officials or administrative agencies in labor controversies. So it was assumed in Maglasang v. Ople, (L-38813, April 29, 1975, 63 SCRA 508). It was explicitly announced in San Miguel Corporation v. Secretary of Labor, (L-39195, May 16, 1975, 64 SCRA 56) the opinion being penned by Justice Aquino. Accordingly, cases of that character continue to find a place in our docket. (Cf. United Employees Union of Gelmart Industries v. Noriel, L-40810, Oct. 3, 1975, 67 SCRA 267). The present suit is of that category. [Kapisanan ng mga Manggagawa sa La SuerteFoitaf vs. Noriel, 77 SCRA 415-416]. A voluntary arbitrator by the nature of her functions acts in a quasi-judicial capacity, There is no reason why her decisions involving interpretation of law should be beyond this Court's review. Administrative officials are presumed to act in accordance with law and yet we do not hesitate to pass upon their work where a question of law is involved or where a showing of abuse of authority or discretion in their official acts is properly raised in petitions for certiorari. On the merits of the petition, the petitioner questions the voluntary arbitrator's decision that under Presidential Decree No. 21, petitioner Ordanoso was properly dismissed by the respondent company without a written clearance from the Secretary of Labor, to wit: xxx xxx xxx

Nang itiniwalag si Ordanoso noong ika-4 ng Oktubre, 1974, ang batas na umiiral ukol sa pagtatanggal ng mga tauhan sa mga bahay-kalakal ay ang Presidential Decree No. 21 at mga alituntunin nito. Ayon sa ikalabing-isang talata ng nasabing batas, walang pangasiwaan na maaring magtanggal ng kanilang mga regular na empleado na nakapanungkulan na nang isang taon nang walang written clearance ng Kalihim ng Paggawa. Ano naman ang pakahulugan ng batas sa taguring regular na empleado? Ayon sa Implementing Instructions No. 1 na nagpapaliwanag sa nasabing ikalabing-isang talata ng P.D. No. 21, ang regular na empleado ay yaong manggagawa na nakapaglingkod na nang hindi kukulangin sa labingdalawang buwan sa loob ng nakaraang magkasunod na dalawang taon bago natanggal ang nasabing manggagawa, kahit anupaman ang taguri ng pangasiwaan sa kaniyang pagkakahirang. Alalaong baga, upang mataguriang regular na empleado, kailangan ay una, ang manggagawa ay kawani na ng bahay-kalakal nang hindi kukulangin sa dalawang taon nang nakararaan, at ikalawa, siya ay nakapaglingkod na nang hindi kukulangin sa kabuuang labindalawang buwan na hindi kailangang magkakasunod sa loob noong nasabing dalawang taon bago naganap ang pagtitiwalag. Kapag mapatunayan ng isang manggagawa na ang dalawang pangangailangang iyan ay nasa kanya, siya ay masasabing regular na empleado at hindi siya kagyat na matatanggal nang walang written clearance ng Kagawaran ng Paggawa. Kung ang manggagawang itiniwalag ay kulang sa isang pangangailangang iyan, siya'y hindi regular na empleado at hindi na kailangan ang written clearance upang siya ay matanggal. Mapapansin na ang manggagawang higit na matagal ang panunungkulan ang siyang tinatangkilik ng batas. Matapos ang paliwanag na iyan, mamamalas na si Ordanoso ay hindi regular na empleado, sapagkat isang taon pa lamang siyang naglilingkod sa bahay-kalakal ng Oceanic Commercial, Inc. Kung gayon, hindi kailangan ang written clearance upang siya ay matanggal ng pangasiwaan. Hindi nalalabag sa batas ang gayong pagtitiwalag sa kanya nang walang written clearance " The petitioner takes exception to the voluntary arbitrator's conclusions on the interpretation to be given Section 3 of Implementing Instruction No.1 xxx xxx xxx Pag-ukulan naman natin ng pansin ang isa pang matuwid ng manananggol ring nag-uusig. Ayon raw sa Seksiyon 1(d) ng Alituntunin, kailangan rin ng "clearance" lahat ng mga pagtanggal ng manggagawa na hindi nasasaklaw ng Seksiyon 3 nito. Ang Seksiyon 3 naman ay nililista ang mga pangyayari na kailangan lamang magharap ng ulat ang kompanya at hindi "clearance". Isa na rito ay ang pagtiwalag ng empleado na kulang ng isang taon ang panunungkulan. Kung gayon raw, mapaghuhulo na kapag isang taon o higit nang isang taon paninilbihan, hindi nga ulat lamang ang kailangan kung hindi 'clearance' na.

Ipinalabas na si Ordanoso ay nasasakop sa kalagayang iyan na ang paglilingkod niya ay kulang ng isang taon kaya't hindi ulat lamang ang kailangan kung hindi "clearance" na sapagkat isang taon o nahigit na siyang naglilingkod, Hindi naman tumpak ang pakahulugan ng kabilang panig sa batas na pinag-uukulan ng pansin Malinaw at tiyak ang pangungusap ng Seksiyon 1 ng Alituntunin na "clearance" ang kailangan kapag ang ititiwalag ay regular na empleyado na nanilbihan na ng isa man lamang taon. Kung paghambingin ang hulo lamang (implication) ng manananggol ng nag-uusig at ang tiyak na salita ng batas na "regular na empleado," ang lulong matimbang ay ang tiyak at tahas na pananalita. Hindi kailangan ng "clearance" sa pagtanggal ng kahi't sino lamang na empleado na nakapaglingkod nang higit sa isang taon. Kailangang siya ay "regular na empleado", lalu't lalo na kapag ang empleado ay pangsamantala lamang o dili kaya'y "probationary." Siya ay dagling sinusubok pa lamang kaya't kung sa panahon ng pagsusubok ay mapatunayang hindi sila mahusay, maaari silang tanggalin kaagad nang walang 'clearance' kapag humantong na sa katapusan na napagkasunduang panahon. Ganyan na nga mismo ang ginagawa ng bahay-kalakal na Oceanic Bic Manufacturing nang humantong na ang katapusan ng pangalawang anim na buwan at hindi sili nasisiyahan sa paglilingkod ni Ordanoso. (Emphasis supplied) In ascertaining the mandatory nature and the ambit of the clearance requirements before termination of employees may be effected, we start with the statutory provision found in Section 11 of Presidential Decree No. 21 which provides: No employers may shut down his establishment or dismiss or terminate the services of regular employees with at least one year of service without the written clearance of the Secretary of labor. The pertinent provisions of the Implementing Instructions No. 1 are as follows: Section 1. When Clearance Required. Every employer shall secure a written prior clearance from the Secretary of labor for any of the following cases irrespective of whether the employer complies with the requirements of existing laws on the service of notice terminating the services of an employee and the payment of severance pay; (a) All dismissals, with or without just cause, of regular employees with at least one (1) year of service; xxx xxx xxx xxx xxx xxx (d) Any termination of employment, suspension or lay-off not otherwise covered by Section 3 of these instructions. xxx xxx xxx Section 3. When Reports Required. Every employer shall submit a report in the form and manner prescribed by this issuance on the

following termination of employment, suspension, lay-off or shutdown which may be effected by the employer without the prior clearance of the Secretary of Labor. xxx xxx xxx (b) All dismissals, suspensions, or lay-offs of employees with less than one (1) year of service; (Emphasis supplied). Under the definition in Section 1 of the Implementing Instructions, a regular employee is one with an aggregate service of at least twelve months for the last two consecutive years prior to the proposed termination. Ordanoso was not a regular employee but a probationary employee when his services were terminated. It appears clear from the law that he was not covered by the requirement of a written prior clearance from the Secretary of Labor. Neither was he covered by Section 3 of the implementing rules which requires a report, not a prior clearance, whenever an employee with less than one year of service is dismissed, suspended, or laid-off. Ordanoso had slightly more than one year of service. There is a hiatus or gap in the clearance and reporting requirements provided by the administrative regulations. As a general rule, such a gap should be resolved in favor of the dismissed worker. For an employee who has served one year and one day not to have the minimal protection of at least a report on the cause of his dismissal while those who have served less than a year are entitled to such a report also appears incongruous. In this particular case, however, the poor job performance of Ordanoso is documented. The hearings before the respondent arbitrator establish that the respondent employer did not act arbitrarily or even wrongly in declaring Ordanoso's work performance as below the required ratings. During his first six months as a temporary employee when he should have exerted extra efforts to prove his capability for permanent employment, he was at the bottom or barely passing ratings of the required performance. He had to be placed on another six months' trial period as a probationary worker. During this second period, he clearly failed to make the grade. Ordanoso was given sufficient warnings each time that his job performance was unsatisfactory. There is no issue of due process violations. The petitioners concentrated on the failure of the employer to get a prior clearance from the Secretary of Labor and did not discuss the significance of the reporting requirements at all. Under the facts of this case and the applicable law, such a prior clearance was not necessary. It would also be most unfair to the employer to compel it to keep a below average worker simply because ambiguity in administrative requirements for clearances or reports depending on the length of service and employment status of a worker results in its not being instructed clearly to either report a dismisssal already effected or seek prior clearance before the dismissal. Considering the foregoing, we affirm the findings of the respondent voluntary arbitrator. WHEREFORE, the instant petition is DISMISSED for lack of merit. The Kapasiyahan of the voluntary arbitrator is AFFIRMED. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

I AM APPEALING TO ALL OFFICERS AND MEMBERS OF ZMEU TO WITHDRAW YOUR PARTICIPATION IN THE ATHLETICS BEING ORGANIZED BY MANAGEMENT. THIS IS A FARCE AND BALOONY I WANT YOU TO SEE ME IF YOU HAVE ANY PROBLEM WITH THE ANNOUNCEMENT. PRESIDENT

G.R. No. L-82088 October 13, 1989 ZAMBOANGA WOOD PRODUCTS, INC., petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION, NATIONAL FEDERATION OF LABOR, DIONISIO ESTIOCA and THE STRIKERS, respondents. Siguion Reyna, Montecillo & Ongsiako and Ramon C. Fernandez for petitioner. Jose C. Espinas for private respondents.

4/19/82 (p. 6, Rollo) It turned out that Estioca's figures were incorrect for the athletic meet budget was P54,000 only. On April 17, 1982, the employees filed a claim for their living allowance before the Labor Arbiter (NLRC Case No. 0178-82). On April 26,1982, Attorney Alberto De la Rosa, resident manager of the Company (whose main office is in Makati, Metro Manila), wrote a letter to Estioca asking him to show cause why no disciplinary action should be taken against him for: a) Spreading false rumors regarding the so called P250,000.00 budget for athletics during this interdepartment games; b) For agitating employees to fight against management's plan and programs of athletic activities which are good for the employees and company; and c) For using company materials and equipment for personal and private use/purpose without authority. (p. 7, Rollo.) Estioca received the letter on April 26, 1982. He answered it on April 27, 1982. On April 30, 1982, he was notified that the Company was terminating his service as personnel supervisor for loss of trust and confidence in him. The termination was duly reported by the Company to the Ministry of Labor and Employment (MOLE). On May 3,1982, the respondent NFL, on behalf of the monthly-paid employees, filed with the Regional Director of the MOLE in Zamboanga City, a notice of strike against the Company for the following grounds: a. Illegal termination of Dionisio Estioca, President of Zambowood Employees Local, National Federation of Labor on April 30, 1982, on account of union activities; b. Unfair labor practice, particularly union busting; c. Non-payment of living allowances; d. Employment of oppressive alien management personnel without proper permit, contrary to law. (p. 8, Rollo.) The Company opposed the notice of strike because the grounds stated in the notice were not valid grounds for a strike, the procedural rules for declaring a strike were not followed and the NFL, had no personality to file the notice because its petition for certification as the collective bargaining agent of the monthly-salaried employees was still pending resolution. (The Company's petition for review [G.R. No. 67343] of the BLR's decision certifying the NFL as bargaining agent of the employees was dismissed by the Supreme Court on July 16, 1984). On May 23, 1982, the respondents struck. On May 25, 1982, the Company issued a written order to the striking employees to return to work immediately or be dismissed, but they paid no heed. On May 27,1982, the Company asked the Minister of Labor to certify the controversy for arbitration.

GRINO-AQUINO, J.: This is the seventh petition to come before this Court involving the parties herein, and the fifth by the herein employer, Zamboanga Wood Products, Inc. (the "Company" for short). Dionisio Estioca was first hired by the petitioner in May 1977 as a clerk in its personnel department. In 1980, he rose to become a personnel aide. On July 1, 1981, he became the Personnel Supervisor, a supervisory and/or managerial position, next in rank to the Personnel Manager. On March 5, 1982, the National Federation of Labor (NFL) of which Estioca was president, filed a petition for direct certification as the sole and exclusive bargaining representative of all the monthly-salaried employees (90 more or less) of the Company "composed of administrative and supervisory personnel which is an appropriate bargaining" unit (See petition in G.R. No. 67343). Over the Company's opposition, the Med Arbiter on August 23, 1982, directly certified the NFL as the sole and exclusive bargaining representative of all the monthly-salaried employees of the Company. The Company appealed but it was dismissed by the Bureau of Labor Relations (BLR). It filed a petition for certiorari in the Supreme Court (G.R. No. 67343). The petition was dismissed for lack of merit on July 16, 1984. On or about April 2, 1982, Estioca posted an announcement on the bulletin board of the employees' coffee shop criticizing the Company for having earmarked the sum of P250,000 for the inter-department athletic tournament (which he called "a farce and baloony") to be held that year, instead of using the money to pay the employees' claims for living allowance. He urged the employees to boycott the sports event. The announcement authored by him, reads: TO ALL ZMEU MEMBERS: GEORGE HAS VERBALLY APPROVED THE RELEASE OF P250,000.00 FOR THE INTER-DEPARTMENT ATHLETICS FOR THIS YEAR ALONE. THE MOST SUDDEN DECISION FOR THAT AMOUNT IS VERY, VERY MUCH SURPRISING ON THE PART OF MANAGEMENT EVER SINCE. THIS IS ENTIRELY A PSYCHOLOGICAL APPROACH TO DIVERT THE MINDS AND THE ATTENTIONS OF THE EMPLOYEES WHO ARE CLAIMING FOR THEIR RIGHTS. REMEMBER, OUR CLAIMS FOR DIFFERENTIAL OF OUR LIVING ALLOWANCE HAS BEEN DENIED BY MANAGEMENT. THEN, WHY SPEND THE P250,000.00 FOR ATHLETICS? GIVE US OUR LIVING ALLOWANCE FIRST BEFORE ANY ADDITIONAL BENEFITS, THIS IS OUR MONEY.

On May 28, 1982, Estioca filed a complaint for illegal dismissal with the NLRC's Arbitration Branch. It was docketed as NLRC Case No. RAB-IX-0216-2. As the strike continued, the company sent letters of termination on June 17, 1982 to the strikers, dismissing them for serious misconduct, willful disobedience, and abandonment. The Company sent a termination report to the MOLE Regional Director in Zamboanga City, and asked that the employees' notice of strike be dismissed for having become moot and academic. On July 9, 1982, the Company filed in the Court of First Instance of Zamboanga City a complaint against the striking employees for damages arising from the unlawful obstruction of its premises and asked the court to issue an injunction against them. The strikers filed a petition for certiorari in the Supreme Court (G.R. No. 61236) alleging lack of jurisdiction of the Court of First Instance over the dispute. On January 31, 1984, We granted the writ of certiorari and permanently enjoined the Court of First Instance from taking further action in the case. The Company refiled its action for damages in the Regional Office of the MOLE in Zamboanga City on May 2,1984. On August 18,1982, the Minister of Labor certified the labor dispute to the NLRC for compulsory arbitration (Certified Case No. 0309). The pertinent portion of the certification reads as follows: IN VIEW OF ALL THE FOREGOING, the labor dispute at Zamboanga Wood Products, Inc., is hereby certified to the National Labor Relations Commission for compulsory arbitration pursuant to Art. 264(6) of the Labor Code of the Philippines. In line with this certification, all striking workers including those terminated by the company, must return to work immediately and Management shall accept all returning workers under the same terms and conditions prevailing previous to the work stoppage. The assistance of the military and police authorities is requested for the effective and orderly implementation of this order. The NLRC is given thirty (30) days from receipt hereof to terminate proceedings. (p. 12, Rollo.) In obedience to the Secretary's order, the strikers tried to return to work on August 19, 1982, but were rebuffed by the Company. Backtracking from its earlier request for compulsory arbitration, the Company filed a motion for reconsideration of the Minister's order on the pretext that there was nothing more to arbitrate because the strikers had been dismissed. When its motion for reconsideration was denied, the Company brought the matter up to this Court on a petition for certiorari (G.R. No. 62893). The petition was dismissed on June 6, 1988. On the other hand, the strikers filed a petition for mandamus in this Court (G.R. No. 64183) to compel the Company to take them back. On September 15, 1988, this Court granted their petition. The dispositive portion of its decision provided: WHEREFORE, the petition for mandamus is granted. Public respondents are hereby ordered to implement their return-to-work order, and private respondent must respect the right of the eighty-one petitioners to resume their respective positions as of the time the strike was called. The question as to the backwages and their seniority rights will be determined in the compulsory arbitration proceeding. This decision is immediately executory. (p. 13, Rollo.) Pursuant thereto the NLRC on September 27, 1988, ordered the Company to readmit the striking employees including those who had been dismissed. The Company alleged that the positions of the dismissed strikers had been filled up. On November 18, 1988, fifteen (15) "replacements" filed a petition for injunction in the NLRC, in Certified Case No. 0306, to enjoin the ertswhile strikers from returning to their jobs. Adopting the report of Commissioner Gabriel Gatchalian who was commissioned to hear the case and its incidents, the NLRC promulgated a decision on June 5,1984, denying the temporary employees' petition for injunction, upholding the legality of the strike, ordering the reinstatement of the workers and Estioca, finding the company guilty of contempt, and ordering it to pay a fine of P10,000. The dispositive portion of the decision provided:

WHEREFORE, judgment is hereby entered as follows: 1. The respondent is declared guilty of unfair labor practice and is ordered to reinstate all the striking workers including Dionisio Estioca to their former positions without loss of seniority and with full backwages from the date they first presented themselves to return to work on 19 August 1982 until their actual reinstatement; respondent is likewise ordered to cease and desist from further committing the unfair labor practice acts on plaintiffs; 2. The petition for injunction filed by the fifteen (15) replacements hired after 19 August 1982 is denied and they are instead ordered to vacate their positions in favor of the returning strikers entitled thereto; and 3. The respondent is declared guilty of contempt and is ordered to pay a fine of Ten Thousand Pesos (P10,000) to this Commission payable within ten (10) days from receipt of the Decision." (p.59, Rollo.) Upon the denial of its motion for reconsideration, the Company filed a petition for certiorari and mandamus in the Supreme Court (G.R. No. 68028) protesting that the decision of the NLRC was rendered without due notice and hearing, hence, in violation of its right to due process. In the meantime, Estioca's complaint for illegal dismissal (RAB- IX-0216-2) had also reached the Supreme Court (G.R. No. 68429) as the Executive Labor Arbiter and the NLRC ordered his reinstatement as personnel supervisor with backwages from April 30, 1982, up to his reinstatement (Annex A, pp. 36-37, Rollo). The Supreme Court consolidated G.R. No. 68028 and G.R. No. 68429, and on October 29,1985, it required the NLRC to hold a formal hearing in Certified Case No. 0309 and NLRC Case No. RAB-IX-0216-2 to determine the legality of the strike and the dismissal of Estioca and other incidental questions. Complying with that directive, the NLRC held hearings where evidence were presented by both sides. On November 6, 1987, the NLRC reiterated its earlier decision dated June 5, 1985 Annex A, pp. 35-40, Rollo). For the fifth time, the Company is before Us seeking relief from the NLRC's decisions. Its petition for certiorari (G.R. No. 82088) alleges that the NLRC gravely abused its discretion in holding that the dismissal of Estioca was illegal; that the company committed unfair labor practice; that the strike on May 23, 1982 was lawful, and that hence, the Company should reinstate the strikers including Estioca. Complying with Our resolution ordering the respondents to comment on the petition, the private respondents filed a comment. The Solicitor General filed no comment for the public respondent failed to comply with Our order to send the records of the case to him. After carefully considering the pleadings of both parties, We are not persuaded to grant the petition. The petitioner's allegation that Estioca's position as personnel supervisor was managerial in nature was not denied by Estioca. As next-in-rank to the personnel manager, he performed, in the latter's absence, the duties and functions of that position. He was authorized to sign and approve sick leaves and vacation leaves of the employees, to hire employees (Exhs. 12 and 14), discipline them, give them assignments, and prepare their work schedules, special trips, and operations. He had no less than 17 employees under his direct supervision (Exh. 22). In view of Estioca's managerial position, the Company contends that its loss of trust and confidence in him was a lawful cause for his dismissal. It argues that Estioca's act of posting a scathing and hostile announcement in the Company's cafeteria, falsely denouncing the Company for its supposed extravagance and fomenting discontent and resentment among the employees on account of the Company's supposed indifference to their claim for increased living allowance, were acts of disloyalty to the management. Although Estioca later apologized for his "intemperate language" and "impetuous action," which he admitted exceeded "the bounds of

tolerable dissent which management has the right to reprove or correct," and expressed regret for "the difficult situation that I have created for the management" (Exh. 23, p. 19, Rollo), the company was not appeased. Was his dismissal justified? Art. 245 of the Labor Code provides that "managerial employees are not eligible to join, assist or form any labor organization." Estioca is, therefore, disqualified to head a union of the rank and file employees. However, RA 6715 which took effect on March 21, 1989 (15 days after its publication in the "Philippines Daily Inquirer") provides that although "supervisory employees shall not be eligible for membership in a labor organization of the rank and file employees," they may, however, " join, assist or form separate labor organization of their own." In the NFL's petition for direct certification as the bargaining representative of the monthlysalaried employees of the Company, it was expressly alleged that said organization is "composed of administrative and supervisory personnel." Consequently, Estioca's leadership of that union was not unlawful as it was not inconsistent with his position as personnel supervisor of the Company. However, his act of posting a bellicose announcement critical of the Company and based on false or erroneous information, was undoubtedly prejudicial to the Company. The Company's reaction was understandable but too harsh in view of Estioca's subsequent apology for his action. We, therefore, agree with the public respondent that Estioca's dismissal from the service was illegal. The other issue that addresses itself to this Court is whether the strike was illegal. The NLRC held that the strike was not illegal: Verily, the test of strike legality are its purpose, the means of execution and compliance with legal requirements. From the evidence it appears that a notice of strike was filed by petitioner on May 3, 1 982 and that a strike vote was taken whereby 79 voted yes while 3 voted no and forthwith reported the same to the Department seven days before the strike commenced on May 23, 1982. Hence, Art. 264 of the Labor Code was complied with. The ground of the strike is stated in the strike notice which charges unfair labor practice on the part of respondent by way of union busting in addition to Estioca's dismissal for union activities. The chronology of events disclose that on March 5, 1982, the union of monthly paid employees filed a petition for certification election with the Bureau of Labor Relations. After the filing of the same, as testified to by Estioca, which was not rebutted by respondent Celso Abastillas and Lilio Navarro, Comptroller and Production Manager, respectively called the employees on separate occasions sometime in April 1982 and asked them to withdraw their membership from the union. Respondent also dismissed Dionisio Estioca, union president, on April 30, 1982, (pp. 37-38, Rollo.) The petitioner alleges that the strike was illegal because long before the union filed the notice of strike the employees' claim for living allowance had already been filed in the Regional Arbitration Branch No. IV as NLRC Case No. RAB-IX-01 78-82 (p. 21, Rollo). Said claim could no longer be invoked as a ground for the declaration of a strike in view of Art. 265 of the Labor Code as amended, which provides: ART. 265. PROHIBITED ACTIVITIES.- x x x. It shall likewise be unlawful to declare a strike or lockout after assumption of jurisdiction by the President or the Minister or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the grounds for the strike or lockout. The rationale of this prohibition, is that once jurisdiction over the dispute has been properly acquired by competent authority, that jurisdiction should not be interfered with by the application of the coercive processes of a strike.

We hold, however, that the illegal dismissal of Estioca and the Company's union-busting efforts were legal grounds for the strike. In fact, the Company did not deny the charge of union busting levelled by the respondents. The NLRC found that ..., as testified to by Estioca, which was not rebutted by respondent, Celso Abastillas and Lilio Navarro, Comptroller and Production Manager, respectively, called the employees on separate occasions sometime in April 1982 and asked them to withdraw their membership from the union. (p. 38, Rollo.) Union busting, or interference with the formation of a union, constitutes an unfair labor practice (Art 248, subpar. 4, Labor Code), hence a valid ground for the declaration of a strike. The Company's refusal to accept the striking workers when they returned to work as directed in the Labor Secretary's return-to-work order dated August 18, 1982, was unjustified. For that reason, the Company is liable to pay the workers backwages. However, in view of the admission in the private respondents' comment that in August 1984 the 81 striking workers were readmitted by the Company (p. 65, Rollo), they are entitled to backwages for the period when they presented themselves for work until they were accepted by the Company in August 1984. WHEREFORE, the petition for certiorari is dismissed. The decision of the National Labor Relations Commission in Certified Case No. 0309 is affirmed with modification by ordering the petitioner Zamboanga Wood Products, Inc. to reinstate the strikers, including Dionisio Estioca, to their former positions without loss of seniority rights and with backwages from August 19,1982 when they offered to report for work, up to August 1984 when they were readmitted by the Company. With respect to Estioca, his backwages shall not exceed a period of three (3) years from April 30, 1982. The fine of P10,000 imposed on the petitioner for its delay in complying with the Secretary's return-to-work order, is affirmed. Costs against the petitioner. SO ORDERED.