1

LABOR AND THE CONSTITUTION

Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the Humanization of laws and
the equalization of social and economic force by the State so that justice in its rational and objectively secular conception
may at least be approximated. Social justice means the promotion of the welfare of all the people, the adoption by the
Government of measures calculated to insure economic stability of all the competent elements of society, throuh the
maintenance of a proper economic and social equilibrium in the interrelations of the members of the community,
constitutionally, throuh the adoption of measures leally justifiable, or extra!constitutionally, throuh the exercise of
powers underlyin the existence of all overnments on the time!honored principle of salus populi est suprema lex.
"#alalan vs. $illiams %G.&. 'o. (!)*+,,, ,- .ecember /0),12
3he State is bound under the #onstitution to afford full protection to labor and when conflictin interests of labor and
capital are to be weihed on the scales of social justice the heavier influence of the latter should be counterbalanced with
the sympathy and compassion the law accords the less privileed wor4inman. 3his is only fair if the wor4er is to be iven
the opportunity and the riht to assert and defend his cause not as a subordinate but as part of manaement with which
he can neotiate on even plane. 3hus labor is not a mere employee of capital but its active and equal partner. "5uente vs.
'(&# %G.&. 'o. //,,/*, ,- 6anuary /00*12
3he cause of social justice is not served by upholdin the interest of petitioners in disreard of the riht of private
respondents. Social justice ceases to be an effective instrument for the "equalization of the social and economic forces"
by the State when it is used to shield wrondoin. $hile it is true that compassion and human consideration should uide
the disposition of cases involvin termination of employment since it affects one7s source or means of livelihood, it should
not be overloo4ed that the benefits accorded to labor do not include compellin an employer to retain the services of an
employee who has been shown to be a ross liability to the employer. 8t should be made clear that when the law tilts the
scale of justice in favor of labor, it is but a reconition of the inherent economic inequality between labor and
manaement. 3he intent is to balance the scale of justice9 to put the two parties on relatively equal positions. 3here may
be cases where the circumstances warrant favorin labor over the interests of manaement but never should the scale be
so tilted if the result is an injustice to the employer, Justicia remini regarda est "6ustice is to be denied to none2. "6amer vs.
'(&# %G.&. 'o. //-:;,, ,< September /00*12
8t is true the #onstitution reards labor as "a primary social economic force." =ut so does it declare that it "reconizes
the indispensable role of the private sector, encouraes private enterprise, and provides incentives to needed
investment." 3he #onstitution bids the State to "afford full protection to labor." =ut it is equally true that "the law, in
protectin the riht7s of the laborer, authorizes neither oppression nor self!destruction of the employer." >nd it is
oppression to compel the employer to continue in employment one who is uilty or to force the employer to remain in
operation when it is not economically in his interest to do so. "Serrano vs. '(&# %G.&. 'o. //*,),, -* 6anuary -,,,12
EMPLOYER-EMPLOYEE RELATIONSHIP
Importance of the existence of an employment relation
> basic factor underlyin the exercise of rihts under the (abor #ode is status of employment. 3he question of
whether employer!employee relationship exists is a primordial consideration before extendin labor benefits under the
wor4men7s compensation, social security, medicare, termination pay and labor relations law. 8t is important in the
determination of who shall be included in a proposed barainin unit because it is the sine qua non, the fundamental and
essential condition that a barainin unit be composed of employees. 5ailure to establish this juridical relationship
between the union members and the employer affects the leality of the union itself. 8t means the ineliibility of the union
members to present a petition for certification election as well as to vote therein. "(a Suerte vs. .irector %/-; S#&> :*012
Tests for the existence of Employer-Employee Relationship South West Disaster Control
8n determinin the existence of employer!employee relationship, the followin elements are enerally considered,
namely? "/2 the selection and enaement of the employee9 "-2 the payment of wages9 ";2 the power of disissal9 and
")2 the power to cont!ol the employees7 conduct!althouh the latter is the most important element. ";< >m. 6ur. ))<2.
%31o determine whether a person who performs wor4 for another is the latter7s employee or an independent
contractor, the 'ational (abor &elations relies on 7the riht to control7 test. @nder this test an employer!employee
relationship exist where the person for whom the services are performed reserves the riht to control not only the end to
be achieved, but also the manner and means to be used in reachin the end. "(A' vs. Bhilippine Cusicians Guild %G.&.
'o. /-<+-1 citin @nited 8nsurance #ompany, /,+, '(&= 'o. //<.2
%31he relationship between jeepney ownersDoperators on one hand and jeepney drivers on the other under the
boundary system is that of employer!employee and not of lessor!lessee. $e explained that in the lease of chattels, the
lessor loses complete control over the chattel leased althouh the lessee cannot be rec4less in the use thereof, otherwise
he would be responsible for the damaes to the lessor. 8n the case of jeepney ownersDoperators and jeepney drivers, the
former exercise supervision and control over the latter. 3he manaement of the business is in the owner7s hands. 3he
owner as holder of the certificate of public convenience must see to it that the driver follows the route prescribed by the
franchisin authority and the rules promulated as reards its operation. 'ow, the fact that the drivers do not receive fixed
waes but et only that in excess of the so!called "boundary" they pay to the ownerDoperator is not sufficient to withdraw
the relationship between them from that of employer and employee. $e have applied by analoy the abovestated doctrine
to the relationships between bus ownerDoperator and bus conductor, auto!calesa ownerDoperator and driver, and recently
between taxi ownersDoperators and taxi drivers. Hence, petitioners are undoubtedly employees of private respondent
because as taxi drivers they perform activities which are usually necessary or desirable in the usual business or trade of
their employer. "6ardin vs. '(&# %G.&. 'o. //0-:+, -; 5ebruary -,,,12
3he case of Bajarillo vs. SSS, invo4ed by the public respondent as authority for the rulin that a "joint fishin venture"
existed between private respondent and petitioners is not applicable in the instant case. 3here is neither liht of control
nor actual exercise of such riht on the part of the boat!owners in the Bajarillo case, where the #ourt found that the pilots
therein are not under the order of the boat!owners as reards their employment9 that they o out to sea not upon
directions of the boat!owners, but upon their own volition as to when, how lon and where to o fishin9 that the boat!
owners do not in any way control the crew!members with whom the former have no relationship whatsoever9 that they
simply join every trip for which the pilots allow them, without any reference to the owners of the vessel9 and that they only
share in their own catch produced by their own efforts.
3he aforementioned circumstances obtainin in Bajarillo do not exist in the instant case. 3he conduct of the fishin
operations was undisputably shown by the testimony of >lipio &ua, the patronDpilot of *D= Sandyman 88, to be under the
2
control and supervision of private respondent7s operations manaer. Catters dealin on the fixin of the schedule of the
fishin trip and the time to return to the fishin port were shown to be the preroative of private respondent. $hile
performin the fishin operations, petitioners received instructions via a sinle!side band radio from private respondent7s
operations manaer who called the patronDpilot in the mornin. 3hey are told to report their activities, their position, and
the number of tubes of fish!catch in one day. #learly thus, the conduct of the fishin operations was monitored by private
respondent thru the patronDpilot of *D= Sandyman 88 who is responsible for disseminatin the instructions to the crew
members. "&ua vs. '(&# %G.&. 'o. (!*-:<)!:/, -- 6anuary /00,12
3he business venture operated under Geminesse Enterprise did not result in an employer!employee relationship
between petitioners and private respondent. $hile it is true that the receipt of a percentae of net profits constitutes only
prima facie evidence that the recipient is a partner in the business, the evidence in the case at bar controverts an
employer!employee relationship between the parties. 8n the first place, private respondent had a voice in manaement of
the affairs of the sales force. Secondly, petitioner 3ocaoFs admissions militate aainst an employer!employee relationship.
She admitted that, li4e her who owned Geminesse Enterprise, private respondent only received commissions and
transportation and representation allowances and not a fixed salary. 8f indeed petitioner 3ocano was private respondentFs
employer, it is difficult to believe that they shall receive the same income in the business. 8n a partnership, each partner
must share in the profits and losses of the venture, except that the industrial partner shall not be liable for losses. >s an
industrial partner, private respondent had the riht to demand for a formal accountin of the business and to receive her
share in the profit. "3ocao vs. #> %G.&. 'o. /-*),<, ,) Gctober -,,,12
3he barbershop claims it had no control over its barbers. 3he power to control refers to the existence of the power
and not necessarily to the actual exercise thereof, nor is it essential for the employer to actually supervise the
performance of duties of the employee. 8t is enouh that the employer has the riht to exercise the power. >s to the
Hcontrol test,I the followin facts indubitably reveal that the respondent company wielded control over the wor4
performance of petitioners9 in that "/2 they wor4ed in the barber shop owned and operated by the respondents9 "-2 that
they were required to report daily and observe definite hours of wor49 ";2 they were not free to accept other employment
elsewhere but devoted their full time wor4in at the 'ew (oo4s =arber Shop for all the fifteen "/<2 years they have wor4ed
until >pril /<, /00<9 ")2 that some have wor4er with respondentFs since the early /0:,Fs9 "<2 that petitioner Batricia 'as
was instructed by the respondents to watch the other six ":2 petitioners in their daily tas4. #ertainly, respondent company
was clothed with the power to dismiss any or all of them for just and vald cause. Betitioners were unaruably performin
wor4 necessary and desiriable in the business of respondent company. "#orporal vs. '(&# %G.&. 'o. /-0;/<, ,- Gctober
-,,,12
a!or "nly Contractor #is-$-#is an Independent Contractor
8n (EG838C>3E 6G= #G'3&>#38'G, no employer!employee relationship exists between the employees of the job
contractor and the principal employer. Even then, the principal employer becomes jointly and severally liable with the job
contractor for the payment of the employees7 waes whenever the contractor fails to pay the same. 8n such case, the law
creates an employer!employee relationship between the principal employer and the job contractor7s employees for a
limited purpose, that is, to ensure that the employees are paid their waes. Gther than the payment of waes, the
principal employer is not responsible for any claim made by the employees.
Gn the other hand, in (>=G&!G'(J #G'3&>#38'G, an employer!employee relationship is created by law between
the principal employer and the employees of the labor!only contractor. 8n this case, the labor!only contractor is considered
merely an aent of the principal employer. 3he principal employer is responsible to the employees of the labor!only
contractor as if such employees had been directly employed by the principal employer. 3he principal employer therefore
becomes solidarily liable with the labor!only contractor for all the rihtful claims of the employees. "B#8 >utomation vs.
'(&# %G& 'o. //<0-,, /00:1
%asis of ia!ility
3he distinction between >rticles /,: and /,* was in the fact that >rticle /,: deals with "labor!only" contractin.
Here, by operation of law, the contractor is merely considered as an aent of the employer, who is deemed "responsible
to the wor4ers to the same extent as if the latter were directly employed by him." Gn the other hand, >rticle /,* deals with
"job contractin." 8n the latter situation, while the contractor himself is the direct employer of the employees, the employer
is deemed, by operation of law, as an indirect employer.
8n other words, the phrase "not an employer" found in >rticle /,* must be read in conjunction with >rticle /,:. >
contrary interpretation would render the provisions of >rticle /,* meaninless considerin that everytime an employer
enaes a contractor, the latter is always actin in the interest of the former, whether directly or indirectly, in relation to his
employees.
8t should be recalled that a findin that a contractor is a "labor!only" contractor is equivalent to declarin that there is
an employer!employee relationship between the owner of the project and the employees of the "labor!only" contractor
">ssociated >nlo!>merican 3obacco #orp. v. #lave, G.&. 'o. <,0/<, ;, >uust /00,, /+0 S#&> /-*9 8ndustrial 3imber
#orp. v. '(&#, G.&. 'o. +;:/:, -, 6anuary /0+0, /:0 S#&> ;)/2. 3his is evidently because, as heretofore stated, the
"labor!only" contractor is considered as a mere aent of an employer. 8n contrast, in "job contractin," no employer!
employee relationship exists between the owner and the employees of his contractor. 3he owner of the project is not the
direct employer but merely an indirect employer, by operation of law, of his contractor7s employees.
"=auio vs. '(&# %G.&. 'o. *0,,), ,) Gctober /00/12
&equisites for allowable job contractin? "8 >&C 5ree #apital2
/. INDEPENDENT business.
-. accordin to his own ACCOUNT.
;. @nder his own RESPONSIBILITY.
). >ccordin to his own METHOD of conductin business.
<. "!ee from the control of the principal except as to the result.
:. Sufficient Ca#ital or investment in the form of tools, equipment, materials, wor4 premises "TEM $o!%2.
Core importantly, the petitioners, individually or collectively, did not have substantial capital or investment in the form
of tools, equipment, wor4 premises and other materials which is necessary in the conduct of the business of the
respondent company. $hat the petitioners owned were only combs, scissors, razors, nail cutters, nail polishers, nippers K
nothin else. =y no standard can these be considered substantial capital necessary to operate a barbershop. "#orporal
vs. '(&# %G.&. 'o. /-0;/<, ,- Gctober -,,,12
Su!stantial Capital or In#estment The &eri and 'u(i )erox cases
3
%81n the case of 'eri vs. '(&#, we held that in order to be considered as a job contractor it is enouh that a
contractor has substantial capital. 8n other words, once substantial capital established it is no loner necessary for the
contractor to show evidence that it has investment in the form of tools, equipment, machineries, wor4 premises, amon
others. 3he rational for this is that >rticle /,: of the (abor #ode does not require that the contractor possess both
substantial capital and investment in the form of tools, equipment, machineries, wor4 premises, amon others. 3he
decision of the #ourt in 'eri, thus, states?
&espondent =## need not prove that it made investments in the form of tools, equipment, machineries,
and wor4 premises, amon others9 because it has established that it has sufficient capitalization. 3he (abor
>rbiter and the '(&# both determined that =## had a capital stoc4 of B/ million fully subscribed and paid for.
=## is therefore a hihly capitalized venture and cannot be deemed enaed in "labor!only" contractin.
However, in declarin that =uildin #are #orporation ""=##"2 was an independent contractor, the #ourt considered
not only the fact that it had substantial capitalization. 3he #ourt noted that =## carried on an independent business and
undertoo4 the performance of its contract accordin to its own manner and method, free from the control and supervision
of its principal in all matters except as to the results thereof. 3he #ourt li4ewise mentioned that the employees of =##
were enaed to perform specific special services for its principal. 3hus, the #ourt ruled that =## was an independent
contractor.
3he #ourt further clarified the import of the 'eri decision in the subsequent case of Bhilippine 5uji Lerox #orporation
vs. '(&#. 8n the said case, petitioner 5uji Lerox implored the #ourt to apply the 'eri doctrine to its alleed job!contractor,
S4illpower, 8nc., and declare the same as an independent contractor. 5uji Lerox alleed that S4illpower, 8nc. was a hihly
capitalized venture reistered with the Securities and Exchane #ommission, the .epartment of (abor and Employment,
and the Social Security System with assets exceedin B<,,,,,,,,.,, possessin at least -0 typewriters, office equipment
and service vehicles, and its own pool of employees with -< cler4s assined to its clients on a temporary basis. .espite
the evidence presented by 5uji Lerox the #ourt refused to apply the 'eri case and explained?
Betitioners cite the case of 'eri v. '(&#, in which it was held that the =uildin #are #orporation "=##2
was an independent contractor on the basis of findin that it had substantial capital, althouh there was no
evidence that it had investments in the form of tools, equipment, machineries and wor4 premises. =ut the #ourt
in that case considered not only the capitalization of the =## but also the fact that =## was providin specific
special services "radioDtelex operator and janitor2 to the employer9 that in another case, the #ourt had already
found that =## was an independent contractor9 that =## retained control over the employees and the
employer was actually just concerned with the end!result9 that =## had the power to reassin the employees
and their deployment was not subject to the approval of the employer9 and that =## was paid in lump sum for
the services it rendered. 3hese features of that case ma4e it distinuishable from the present one.
"Ainoya vs. '(&# %G.&. 'o. /-:<+:, ,- 5ebruary -,,,12
ia!ility of indirect employer for unpaid salaries*+ages
3he joint and several liability of the employer or principal was enacted to ensure compliance with the provisions of
the #ode, principally those on statutory minimum wae. 3he contractor or subcontractor is made liable by virtue of his or
her status as a direct employer, and the principal as the indirect employer of the contractor7s employees. 3his liability
facilitates, if not uarantees, payment of the wor4ers7 compensation, thus, ivin the wor4ers ample protection as
mandated by the /0+* #onstitution. 3his is not unduly burdensome to the employer. Should the indirect employer be
constrained to pay the wor4ers, it can recover whatever amount it had paid in accordance with the terms of the service
contract between itself and the contractor.
$ithal, fairness li4ewise dictates that the indirect employer should not, however, be held liable for wae differentials
incurred while the complainants were assined to other companies. @nder these cited provisions of the (abor #ode,
should the contractor fail to pay the waes of its employees in accordance with law, the indirect employer, is jointly and
severally liable with the contractor, but such responsibility should be understood to be limited to the extent of the wor4
performed under the contract, in the same manner and extent that he is liable to the employees directly employed by him.
3his liability of petitioner covers the payment of the wor4ers7 performance of any wor4, tas4, job or project. So lon as the
wor4, tas4, job or project has been performed for indirect employer7s benefit or on its behalf, the liability accrues for such
period even if, later on, the employees are eventually transferred or reassined elsewhere.
$e repeat? 3he indirect employer7s liability to the contractor7s employees extends only to the period durin which
they were wor4in for the petitioner, and the fact that they were reassined to another principal necessarily ends such
responsibility. 3he principal is made liable to his indirect employees, because it can protect itself from irresponsible
contractors by withholdin such sums and payin them directly to the employees or by requirin a bond from the
contractor or subcontractor for this purpose.
"&osewood Brocessin, 8nc. vs. '(&# %G.&. 'os. //:)*:!+), -/ Cay /00+12
ia!ility of indirect employer for unpaid !ac,+ages and separation pay
Similarly, the solidary liability for payment of bac4 waes and separation pay is limited, under >rticle /,:, "to the
extent of the wor4 performed under the contract"9 under >rticle /,*, to "the performance of any wor4, tas4, job or project"9
and under >rticle /,0, to "the extent of their civil liability under this #hapter %on payment of waes1."
3hese provisions cannot apply to the indirect employer, considerin that the complainants were no loner wor4in for
or assined to it when they were illeally dismissed. 5urthermore, an order to pay bac4 waes and separation pay is
invested with a punitive character, such that an indirect employer should not be made liable without a findin that it had
committed or conspired in the illeal dismissal.
3he liability arisin from an illeal dismissal is unli4e an order to pay the statutory minimum wae, because the
wor4ers7 riht to such wae is derived from law. 3he proposition that payment of bac4 waes and separation pay should
be covered by >rticle /,0, which holds an indirect employer solidarily responsible with his contractor or subcontractor for
"any violation of any provision of this #ode," would have been tenable if there were proof there was none in this case that
the principalDemployer had conspired with the contractor in the acts ivin rise to the illeal dismissal.
"&osewood Brocessin, 8nc. vs. '(&# %G.&. 'os. //:)*:!+), -/ Cay /00+12
ia!ility of indirect employer for statutory +age increases
%31he liability of the petitioner to reimburse the respondent only arises if and when contractor actually pays its
employees the increases ranted by $ae Grder 'os. < and :. Bayment, which means not only the delivery of money but
also the performance, in any other manner, of the obliation, is the operative fact which will entitle either of the solidary
debtors to see4 reimbursement for the share which corresponds to each of the debtors. "(apanday >ricultural
.evelopment #orp. vs. #> %G.&. 'o. //-/;0, ;/ 6anuary -,,,12
Jurisdiction of la!or courts
4
%$1here the claim to the principal relief souht is to be resolved not by reference to the (abor #ode or other labor
relations statute or a collective barainin areement but by the eneral civil law, the jurisdiction over the dispute belons
to the reular courts of justice and not to the (abor >rbiter and the '(&#. 8n such situations, resolution of the dispute
requires expertise, neither in labor manaement relations nor in wae structures and other terms and conditions of
employment, but rather in the application of the eneral civil law. #learly, such claims fall outside the area of competence
or expertise ordinarily ascribed to (abor >rbiters and the '(&# and the rationale for rantin jurisdiction over such claims
to these aencies disappears. "SC# vs. '(&# %G.&. 'o. +,**), /:/ S#&> */012
%B1etitioner see4s protection under the civil laws and claims no benefits under the labor #ode. 3he primary relief
souht is for liquidated damaes for breach of a contractual obliation. 3he other items demanded are not labor benefits
demanded by wor4ers enerally ta4en conizance of in labor disputes, such as payment of waes, overtime
compensation or separation pay. 3he items claimed are the natural consequences flowin from breach of an obliation,
intrinsically a civil dispute. "Sinapore >irlines vs. BaMo %G.&. 'o. )**;012
Betitioner filed the third!party claim before the court a quo by reason of a writ of execution issued by the '(&#!#>&
Sheriff aainst a property to which it claims ownership. 3he writ was issued to enforce and execute the commission7s
decision in '(&# #ase 'o. ,/:< "8lleal .ismissal and @(B2 aainst Green Countain 5arm, &oberto Gnpin and >lmus
>labe.
Gstensibly the complaint before the trial court was for the recovery of possession and injunction, but in essence it
was an action challenin the leality or propriety of the levy vis!a!vis the alias writ of execution, includin the acts
performed by the (abor >rbiter and the .eputy Sheriff implementin the writ. 3he complainant was in effect a motion to
quash the writ of execution of a decision rendered on a case properly within the jurisdiction of the (abor >rbiter, to wit?
8lleal .ismissal and @(B. #onsiderin the factual settin, it is then loical to conclude that the subject matter of the third
party claim is but an incident of the labor case, a matter beyond the jurisdiction of reional trial courts.
Brecedents abound confirmin the rule that said courts have no labor jurisdiction to act on labor cases or various
incidents arisin therefrom, includin the execution of decisions, awards or orders. 6urisdiction to try and adjudicate such
cases pertains exclusively to the proper labor official concerned under the .epartment of (abor and Employment. 3o hold
otherwise is to sanction split jurisdiction which is obnoxious to the orderly administration of justice.
Betitioner failed to realize that by filin its third!party claim with the deputy sheriff, it submitted itself to the jurisdiction
of the #ommission actin throuh the (abor >rbiter. 8t failed to perceive the fact that what it is really controvertin is the
decision of the (abor arbiter and not the act of the deputy sheriff in executin said order issued as a consequence of said
decision rendered.
6urisdiction once acquired is not lost upon the instance of the parties but continues until the case is terminated.
$hatever irreularities attended the issuance and execution of the alias writ of execution should be referred to the same
administrative tribunal which rendered the decision. 3his is because any court which issued a writ of execution has the
inherent power, for the advancement of justice, to correct errors of its ministerial officers and to control its own processes.
".eltaventures &esources, 8nc. vs. #abato %G.&. 'o. //+-/:, ,0 Carch -,,,12
a!or Dispute
-a!or dispute- includes any contro#ersy or matter concerning terms or conditions of employment or the
association or representation of persons in negotiating. fixing. maintaining. changing or arranging the terms and
conditions of employment. regardless of +hether the disputants stand in the proximate relation of employer and
employee/ %>rticle -/- "l2 of the (abor #ode1
$hile it is SC#7s submission that no employer!employee relationship exists between itself, on the one hand, and the
contractual wor4ers of (ipercon and .7&ite on the other, a labor dispute can nevertheless exist "reardless of whether the
disputants stand in the proximate relationship of employer and employee" ">rticle -/- %/1, (abor #ode, supra2 provided
the controversy concerns, amon others, the terms and conditions of employment or a "chane" or "arranement"
thereof "ibid2. But differently, and as defined by law, the existence of a labor dispute is not neative by the fact that the
plaintiffs and defendants do not stand in the proximate relation of employer and employee.
3hat a labor dispute, as defined by the law, does exist herein is evident. >t bottom, what the @nion see4s is to
reularize the status of the employees contracted by (ipercon and .7&ite in effect, that they be absorbed into the wor4in
unit of SanCi. 3his matter definitely dwells on the wor4in relationship between said employees vis!a!vis SanCi.
3erms, tenure and conditions of their employment and the arranement of those terms are thus involved brinin the
matter within the purview of a labor dispute. 5urther, the @nion also see4s to represent those wor4ers, who have sined
up for @nion membership, for the purpose of collective barainin. SanCi, for its part, resists that @nion demand on the
round that there is no employer!employee relationship between it and those wor4ers and because the demand violates
the terms of their #=>. Gbvious then is that representation and association, for the purpose of neotiatin the conditions
of employment are also involved. 8n fact, the injunction souht by SanCi was precisely also to prevent such
representation. >ain, the matter of representation falls within the scope of a labor dispute. 'either can it be denied that
the controversy below is directly connected with the labor dispute already ta4en conizance of by the '#C=!.G(E.
$hether or not the @nion demands are valid9 whether or not SanCi7s contracts with (ipercon and .7&ite constitute
"labor!only" contractin and, therefore, a reular employer!employee relationship may, in fact, be said to exist9 whether or
not the @nion can lawfully represent the wor4ers of (ipercon and .7&ite in their demands aainst SanCi in the liht of the
existin #=>9 whether or not the notice of stri4e was valid and the stri4e itself leal when it was alleedly instiated to
compel the employer to hire straners outside the wor4in unit9 those are issues the resolution of which call for the
application of labor laws, and SanCi7s cause7s of action in the #ourt below are inextricably lin4ed with those issues.
"SC# Employee @nion!B3G$G vs. Hon. =ersamira %G.&. 'o. +**,,, /00,12
MANA&EMENT PRERO&ATI'ES
>n owner of a business enterprise is iven considerable leeway in manain his business because it is deemed
important to society as a whole that he should succeed. Gur law, therefore, reconizes certain rihts as inherent in the
manaement of business enterprises. 3hese rihts are collectively called manaement preroatives or acts by which one
directin a business is able to control the variables thereof so as to enhance the chances of ma4in a profit. "3oether,
they may be ta4en as the freedom to administer the affairs of a business enterprise such that the costs of runnin it would
be below the expected earnins or receipts. 8n short, the E(=G$ &GGC 8' 3HE N@ES3 5G& B&G583S." "#hu vs.
'(&# %G.&. 'o. /,:/,*, ,- 6une /00)12
8t is noteworthy to state that an employer is free to manae and reulate, accordin to his own discretion and
judment, all phases of employment, which includes hirin, wor4 assinments, wor4in methods, time, place and manner
of wor4, supervision of wor4ers, wor4in reulations, transfer of employees, lay!off of wor4ers, and the discipline,
5
dismissal and recall of wor4. $hile the law reconizes and safeuards this riht of an employer to exercise what are
clearly manaement preroatives, such riht should not be abused and used as a tool of oppression aainst labor. 3he
company7s preroatives must be ELE&#8SE. 8' GGG. 5>83H and with due reard to the rihts of labor. > priori, they
are not absolute preroatives but are S@=6E#3 3G (EG>( (8C83S, #G((E#38AE =>&G>8'8'G >G&EECE'3S and
the GE'E&>( B&8'#8B(ES G5 5>8& B(>J >'. 6@S38#E.
3he power to dismiss an employee is a reconized preroative that is inherent in the employer7s riht to freely
manae and reulate his business. #orollarily, an employer cannot rationally be expected to retain the employment of a
person whose lac4 of morals, respect and loyalty to his employer, reard for his employer7s rules and appreciation of the
dinity and responsibility of his office, has so plainly and completely been bared. He may not be compelled to continue to
employ such person whose continuance in the service will patently be inimical to his employer7s interest. 3he riht of the
company to dismiss an employee is a measure of self!protection. Such riht, however, is subject to reulation by the
State, basically in the exercise of its paramount police power. 3hus, the dismissal of employees must be made within the
parameters of the law and pursuant to the basic tenets of equity, justice and fairplay. 8t must not be done arbitrarily and
without just cause. "Bhilippine!Sinapore 3ransit vs. '(&# %G& 'o. 0<))0, >uust /00*12
Reorgani0ation
3he free will of manaement to conduct its own business affairs to achieve its purpose cannot be denied ">bbot
(aboratories v. '(&#, G.&. 'o. *:0<0, Gctober /-, /0+*, /<) S#&> */;2. Even as the law is solicitous of the welfare of
employees, it must also protect the riht of an employer to exercise what are clearly manaement preroatives. Hence,
manaement is not precluded from underta4in a reoranization within the company or enterin into merers with other
companies to meet the demands of the enterprise. 8n such cases, the company has the preroative to abolish manaerial
and confidential positions or create new ones as the necessity for them requires. "Jap vs. 8chon %G.&. 'o. (!</;/), -/
6une /00,12
"!edience to Company Rules and Regulations
3his #ourt fails to see, however, how these objections and accusations justify the deliberate and obdurate refusal of
the sales representatives to obey the manaement7s simple requirement for submission by all Bremise Sales
&epresentatives "BS&s2 of individual reports or memoranda requirin reflectin taret revenues which is all that G3E
basically required and which it addressed to the employees concerned no less than six ":2 times. 3he #ourt fails to see
how the existence of objections made by the union justify the studied disreard, or wilful disobedience by the sales
representatives of direct orders of their superior officers to submit reports. Surely, compliance with their superiors7
directives could not have foreclosed their demands for the revocation or revision of the new sales policies or rules9 there
was nothin to prevent them from submittin the requisite reports with the reservation to see4 such revocation or revision.
3o sanction disreard or disobedience by employees of a rule or order laid down by manaement, on the pleaded
theory that the rule or order is unreasonable, illeal, or otherwise irreular for one reason or another, would be disastrous
to the discipline and order that it is in the interest of both the employer and his employees to preserve and maintain in the
wor4in establishment and without which no meaninful operation and proress is possible. .eliberate disreard or
disobedience of rules, defiance of manaement authority cannot be countenanced. 3his is not to say that the employees
have no remedy aainst rules or orders they reard as unjust or illeal. 3hey may object thereto, as4 to neotiate thereon,
brin proceedins for redress aainst the employer before the Cinistry of (abor. =ut until and @nless the rules or orders
are declared to be illeal or improper by competent authority, the employees inore or disobey them at their peril. 8t is
impermissible to reverse the process? suspend enforcement of the orders or rules until their leality or propriety shall have
been subject of neotiation, conciliation, or arbitration. "G3E .irectories vs. Sanchez %G.&. 'o. *:-/0, -* Cay /00/12
Transfers
3he situation here presented is of an employer transferrin an employee to another office in the exercise of what it
too4 to be sound business judment and in accordance with pre!determined and established office policy and practice,
and of the latter havin what was believed to be leitimate reasons for declinin that transfer, rooted in considerations of
personal convenience and difficulties for the family. @nder these circumstances, the solution proposed by the employee
herself, of her voluntary termination of her employment and the delivery to her of correspondin separation pay, would
appear to be the most equitable. #ertainly, the #ourt cannot accept the proposition that when an employee opposes his
employer7s decision to transfer him to another wor4 place, there bein no bad faith or underhanded motives on the part of
either party, it is the employee7s wishes that should be made to prevail. 8n adoptin that proposition by way of resolvin
the controversy, the respondent '(&# ravely abused its discretion. "B3 O 3 vs. (aplana %G.&. 'o. *::)<, -; 6uly /00/12
%31he #ourt has reconized and upheld the preroative of manaement to transfer an employee from one office to
another within the business establishment provided that there is no demotion in ran4 or a diminution of his salary, benefits
and other privilees. 3his is a privilee inherent in the employer7s riht to control and manae its enterprise effectively.
Even as the law is solicitous of the employees7 welfare, it cannot inore the riht of the employer to exercise what are
clearly and obviously manaement preroatives. 3he freedom of manaement to conduct its business operations to
achieve its purpose cannot be denied.
=ut li4e all other rihts, there are limits. 3he manaerial preroative to transfer personnel must be exercised without
rave abuse of discretion and puttin to mind the basic elements of justice and fair play. H>A8'G 3HE &8GH3 SHG@(.
'G3 =E #G'5@SE. $83H 3HE C>''E& 8' $H8#H 3H>3 &8GH3 C@S3 =E ELE&#8SE.. 3hus it cannot be used as
a subterfue by the employer to rid himself of an undesirable wor4er. 'or when the real reason is to penalize an
employee for his union activities and thereby defeat his riht to self!oranization. =ut the transfer can be upheld when
there is no showin that it is unnecessary, inconvenient and prejudicial to the displaced employee.
3he reassinment of Halili and Cano to Canila is leally indefensible on several rounds. 5irstly, it was rossly
inconvenient to private respondents. 3hey are wor4in students. $hen they received the transfer memorandum directin
their relocation to Canila within seven days from notice, classes had already started. 3he move from 3arlac to Canila at
such time would mean a disruption of their studies. Secondly, there appears to be no enuine business urency that
necessitated their transfer. >s well pointed out by private respondents7 counsel, the fabrication of aluminum handles for
ice boxes does not require special dexterity. Cany wor4ers could be contracted riht in Canila to perform that particular
line of wor4. "Juco #hemicals vs. Cinster of (abor %G.&. 'o. (!*<:<:, /00/12
Wai#er of 1anagement 2rerogati#es 2ossi!le3 C%4 pro#ision to the contrary
Section -, >rticle 88 of the #=> expressly provides that?
Sec. -. 8n the exercise of its functions of manaement, the #GCB>'J shall have the sole and
exclusive riht and power, amon other thins, to direct the operations and the wor4in force of its business
in all respects9 to be the sole jude in determinin the capacity or fitness of an employee for the position or
job to which he has been assined9 to schedule the hours of wor4, shifts and wor4 schedules9 to require wor4
6
to be done in excess of eiht hours or Sundays or holidays as the exiencies of the service may require9 to
plan, schedule, direct, curtail and control factory operations and schedules of production9 to introduce and
install new or improved methods or facilities9 to desinate the wor4 and the employees to perform it9 to select
and hire new employees9 to train new employees and improve the s4ill and ability of employees from one job
to another or form one shift to another9 to classify or reclassify employees9 and to ma4e such chanes in the
duties of its employees as the #GCB>'J may see fit or convenient for the proper conduct of its business.
Aerily and wisely, manaement retained the preroative, whenever exiencies of the service so require, to chane
the wor4in hours of its employees. >nd as lon as such preroative is exercised in ood faith for the advancement of
the employer7s interest and not for the purpose of defeatin or circumventin the rihts of the employees under special
laws or under valid areements, this #ourt will uphold such exercise "@nion #arbide (abor @nion vs. @nion #arbide %-/<
S#&> <<)12
Imposition of 2enalty3 4 commensurate penalty for an offense
%$1hile #larete may be uilty of violation of company rules, we find the penalty of dismissal imposed upon him by
respondent #altex too harsh and unreasonable. >s enunciated in &adio #ommunications of the Bhilippines, 8nc. v.
'ational (abor &elations #ommission, supra, "such a penalty "of dismissal2 must be commensurate with the act, conduct
or omission imputed to the employee and imposed in connection with the employer7s disciplinary authority" "at p. ::*2.
Even when there exist some rules areed upon between the employer and employee on the subject of dismissal, we have
ruled in Gelmart 8ndustries Bhils., 8nc. v. 'ational (abor &elations #ommission, /*: S#&> -0< "/0+02, that the same
cannot preclude the State from inquirin on whether its riid application would wor4 too harshly on the employee. "#altex
&efinery vs. '(&# % G.&. 'o. /,-00;, /) 6uly /00<12
4pplication of3 With minor infractions. first #iolations and length of ser#ice/
Cary 6ohnston Hospital v. '(&#, where the employee had a heated arument with the department head, the #ourt
held that since the incident was her first offense durin her seventeen "/*2 years of employment the penalty of termination
was not commensurate with the act committed.
Canila Electric #ompany v. '(&#, where the employee was declared uilty of breach of trust and violation of
company rules the penalty of dismissal was not meted to him considerin his twenty "-,2 years of service without any
previous deroatory record and his two "-2 commendations for honesty from the company.
.olores v. '(&#, where the employee absented herself without permission from her superior, the #ourt ruled that
the penalty of dismissal was too severe considerin her twenty!one "-/2 years of service with the company and it
appearin that it was her first offense.
Bhilippine 3eleraph and 3elephone #orporation v. '(&#, where the employee was adjuded uilty of tamperin a
receipt, the #ourt ruled that the imposition of the supreme penalty of dismissal would certainly be very harsh and
disproportionate to the infraction committed, especially after notin that it was his first offense after seven "*2 lon years of
satisfactory service.
&adio #ommunications of the Bhilippines, 8nc. v. '(&#, where the employee was found uilty of misappropriatin
company funds and withholdin messaes for transmission, the #ourt ruled that in view of the employee7s continuous
service of ten "/,2 years with the company the penalty of dismissal for the minor infractions would be unduly harsh and
rossly disproportionate.
=onotan v. '(&#, where the employee shouted at the operations manaer, the #ourt ruled that since the employee
has been with the company for twenty!six "-:2 years and nowhere in the records did it appear that she committed any
previous violation of company rules and reulations, dismissal from wor4 would be too severe a penalty under the
circumstances.
3anduay .istillery (abor @nion v. '(&#, where the employees were found uilty of eatin while at wor4, the #ourt
ruled that inasmuch as they had served the company without any record of violation or infraction of company rules and
reulations prior to the incident for periods ranin from /: to -: years, respectively, the dismissal meted out on them
was too harsh a penalty.
EMPLOYEE CLASSI"ICATION AND(OR STATUS
Regular. Casual and Seasonal employees
Regular and casual employment/ - The pro#isions of +ritten agreement to the contrary not+ithstanding and
regardless of the oral agreements of the parties. an employment shall !e deemed to !e regular +here the employee
has !een engaged to perform acti#ities +hich are usually necessary or desira!le in the usual !usiness or trade of
the employer except +here the employment has !een fixed for a specific pro(ect or underta,ing. the completion or
termination of +hich has !een determined at the time of the engagement of the employee or +here the +or, or
ser#ice to !e performed is seasonal in nature and the employment is for the duration of the season/
4n employment shall !e deemed to !e casual if it is not co#ered !y the preceding paragraph5 2ro#ided. That
any employee +ho has rendered at least one year of ser#ice. +hether such ser#ice is continuous or !ro,en. shall !e
considered a regular employee +ith respect to the acti#ity in +hich he is employed and his employment shall
continue +hile such acti#ity exists/ ">rticle -+, of the (abor #ode2
%>1n employment shall be deemed reular if the employee performs activities usually necessary or desirable in the
usual business and trade of the employer G& if the employee has rendered at least one "/2 year of service, whether the
service be continuous or bro4en. 5errochrome Bhils. vs. '(&#, -;: S#&> ;/< G.&. /,<<;+ %< September /00)1
3he primary standard, therefore, of determinin a reular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual business or trade of the employer. 3HE 3ES3 8S
$HE3HE& 3HE 5G&CE& 8S @S@>((J 'E#ESS>&J G& .ES8&>=(E 8' 3HE @S@>( =@S8'ESS G& 3&>.E G5
3HE ECB(GJE&. 3he connection can be determined by considerin the nature of the wor4 performed and its relation to
the scheme of the particular business or trade in its entirety. >(SG, if the employee has been performin the job for at
least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and
continuin need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the
business. Hence, the employment is also considered reular, but G'(J $83H &ESBE#3 3G S@#H >#38A83J >'.
$H8(E S@#H >#38A83J EL8S3S. ".e (eon vs. '(&# %G.&. 'o. *,*,<, -/ >uust /0+012
7
%31he second pararaph of >rticle -+, relates only to casual employees and is not applicable to those who fall within
the definition of said >rticle7s first pararaph, i.e., project employees. 3he familiar rammatical rule is that a proviso is to
be construed with reference to the immediately precedin part of the provision to which it is attached, and not to other
sections thereof, unless the clear leislative intent is to restrict or qualify not only the phrase immediately precedin the
proviso but also earlier provisions of the statute or even the statute itself as a whole. 'o such intent is observable in
>rticle -+, of the (abor #ode.
3he second pararaph of >rt. -+, demarcates as "casual" employees, all other employees who do not fall under the
definition of the precedin pararaph. 3he proviso, in said second pararaph, deems as reular employees those "casual"
employees who have rendered at least one year of service reardless of the fact that such service may be continuous or
bro4en. "Cercado, Sr. vs. '(&# %G.&. 'o. *0+:0, ,< September /00/12
8n the case at bar, while it may appear that the wor4 of the petitioner is seasonal, inasmuch as petitioners have
served the company for many years, a number for over -, years, performin services which are necessary and
indispensable to (@3G&#GFs business, serve as bades of reular employment. Coreover, the fact that petitioners do not
wor4 continuously for one whole year but only for the duration of the tobacco season does not detract from considerin
them in reular employment since in a litany of cases this #ourt has already settled that seasonal employees who are
called to wor4 from time to time and are temporarily laid off durin off!season are not separated from service in said
period, but merely considered on leave until re!employed.
Brivate respondentFs reliance on the case of Cercado vs. '(&# is misplaced considerin that since in said case of
Cercado, althouh respondent company therein consistently availed of the services of the petitioners therein from year to
year, it was clear that petitioners therein were not in respondent companyFs reular employ. Betitioners therein performed
different phases of aricultural wor4 in a iven year. However, durin that period, they were free to contract services to
wor4 for other farm owners, as in fact they did. 3hus, the #ourt ruled in that case that their employment would naturally
end upon completion of each project or phase of farm wor4 for which they have been contracted.
>ll the foreoin considered, the public respondent '(&# in the case at bar erred in its total affirmance of the
dismissal of the consolidated complaint, for separation pay, aainst private respondents (@3G&#G and See (in #han
considerin that petitioners are reular seasonal employees entitled to the benefits of >rticle -+; of the (abor #ode which
applies to closure or cessation of an establishment or underta4in, whether it be a complete or partial cessation of
business operation. ">basolo vs. '(&# %G.&. 'o. //+)*<, -0 'ovember -,,,12
2ro!ationary Employees
2ro!ationary employment/ - 2ro!ationary employment shall not exceed six months from the date the employee
started +or,ing. unless it is co#ered !y an apprenticeship agreement stipulating a longer period/ The ser#ices of an
employee +ho has !een engaged on a pro!ationary !asis may !e terminated for a (ust cause or +hen he fails to 6ualify
as a regular employee in accordance +ith reasona!le standards made ,no+n !y the employer to the employee at the
time of his engagement/ 4n employee +ho is allo+ed to +or, after a pro!ationary period shall !e considered a regular
employee/ ">rticle -+/ of the (abor #ode2
%>1 probationary employee, as understood under >rticle -+- of the (abor #ode, is one who is on trial by an employer
durin which the employer determines whether or not he is qualified for permanent employment. > probationary
appointment is made to afford the employer an opportunity to observe the fitness of a probationer while at wor4, and to
ascertain whether he will become a proper and efficient employee. 3he word "B&G=>38G'>&J", as used to describe the
period of employment, 8CB(8ES 3HE B@&BGSE G5 3HE 3E&C G& BE&8G., =@3 'G3 83S (E'G3H.
=ein in the nature of a "trial period" the essence of a probationary period of employment fundamentally lies in the
purpose or objective souht to be attained by both the employer and the employee durin said period. 3he lenth of time
is immaterial in determinin the correlative rihts of both in dealin with each other durin said period. $hile the
employer, as stated earlier, observes the fitness, propriety and efficiency of a probationer to ascertain whether he is
qualified for permanent employment, the probationer, on the other, see4s to prove to the employer, that he has the
qualifications to meet the reasonable standards for permanent employment.
8t is well settled that the employer has the riht or is at liberty to choose who will be hired and who will be denied
employment. 8n that sense, it is within the exercise of the riht to select his employees that the employer may set or fix a
probationary period within which the latter may test and observe the conduct of the former before hirin him permanently.
xxx xxx xxx
>s the law now stands, >rticle -+/ of the (abor #ode ives ample authority to the employer to terminate a
probationary employee for a just cause or when he fails to qualify as a reular employee in accordance with reasonable
standards made 4nown by the employer to the employee at the time of his enaement. 3here is nothin under >rticle
-+/ of the (abor #ode that would preclude the employer from extendin a reular or a permanent appointment to an
employee once the employer finds that the employee is qualified for reular employment even before the expiration of the
probationary period. #onversely, if the purpose souht by the employer is neither attained nor attainable within the said
period, >rticle -+/ does not li4ewise preclude the employer from terminatin the probationary employment on justifiable
causes as in the instant case. "8nternational #atholic Ciration vs. '(&# %G.&. *----, ;, 6anuary /0+012
3his is by no means to assert that the security of tenure protection of the constitution does not apply to probationary
employees. 3he (abor code has wisely provided for such a case thus? "3he termination of employment of probationary
employees and those employed with a fixed period shall be subject to such reulations as the Secretary of (abor may
prescribe to prevent the circumvention of the riht of the employees to be secured in their employment as provided
herein." 3here is no question here, as noted in the assailed order of Bresidential Executive >ssistant #lave, that
petitioners did not enjoy a permanent status. .urin such period they could remain in their positions and any
circumvention of their of the rihts, in accordance with the statutory statutory scheme, subject to inquiry and therafter
correction by the .epartment of (abor. 3hus there was the safeuard as to the duration of their employment bein
respected. 3o that extent, their tenure was secure. 3he moment, however, the period expired in accordance with contracts
freely entered into, they could no loner invo4e the constitutional protection. "=iboso vs. Aictorias Cillin %G.&. 'o. (!
));:,, ;/ Carch /0**12
%31he extension of .equila7s probation was ex ratia, an act of liberality on the part of his employer affordin him a
second chance to ma4e ood after havin initially failed to prove his worth as an employee. Such an act cannot now
unjustly be turned aainst said employer7s account to compel it to 4eep on its payroll one who could not perform accordin
to its wor4 standards. 3he law, surely, was never meant to produce such an inequitable result.
=y voluntarily areein "the extension was with .equila7s written consent2 to an extension of the probationary period,
.equila in effect waived any benefit attachin to the completion of said period if he still failed to ma4e the rade durin the
period of extension. 3he #ourt finds nothin in the law which by any fair interpretation prohibits such a waiver. >nd no
public policy protectin the employee and the security of his tenure is served by prescribin voluntary areements which,
by reasonably extendin the period of probation, actually improve and further a probationary employee7s prospects of
demonstratin his fitness for reular employment. "Cariwasa vs. (eodeario %G.&. 'o. *)-):, -: 6anuary /0+012
8
Generally, the probationary period of employment is limited to six ":2 months. 3he exception to this eneral rule is
when the parties to an employment contract may aree otherwise, such as when the same is established by company
policy or when the same is required by the nature of wor4 to be performed by the employee. 8n the latter case, there is
reconition of the exercise of manaerial preroatives in requirin a loner period of probationary employment, such as in
the present case where the probationary period was set for eihteen "/+2 months, i.e. from Cay /0+, to Gctober /0+/,
especially where the employee must learn a particular 4ind of wor4 such as sellin, or when the job requires certain
qualifications, s4ills, experience or trainin.
Bolicy 8nstruction 'o. // of the Cinister of (abor and Employment has clarified any and all doubts on the period of
probationary employment. 8t states as follows?
Brobationary Employment has been the subject of misunderstandin in some quarter. Some people
believe six ":2 months is the probationary period in all cases. Gn the other hand employs who have already
served the probationary period are sometimes required to serve aain on probation.
@nder the (abor #ode, six ":2 months is the eneral probationary period but the probationary period is
actually the period needed to determine fitness for the job. 3his period, for lac4 of a better measurement is
deemed to be the period needed to learn the job.
3he purpose of this policy is to protect the wor4er at the same time enable the employer to ma4e a
meaninful employee selection. 3his purpose should be 4ept in mind in enforcin this provision of the #ode.
3his issuance shall ta4e effect immediately.
8n the case at bar, it is shown that private respondent #ompany needs at least eihteen "/+2 months to determine
the character and sellin capabilities of the petitioners as sales representatives. 3he #ompany is enaed in
advertisement and publication in the Jellow Baes of the B(.3 3elephone .irectories. Bublication of solicited ads are
only made a year after the sale has been made and only then win the company be able to evaluate the efficiency,
conduct, and sellin ability of its sales representatives, the evaluation bein based on the published ads. Coreover, an
eihteen month probationary period is reconized by the (abor @nion in the private respondent company, which is >rticle
A of the #ollective =arainin >reement,...
xxx xxx xxx
>nd as indicated earlier, the very contracts of employment sined and acquiesced to by the petitioners specifically
indicate that "the company hereby employs the employee as telephone sales representative on a probationary status for a
period of eihteen "/+2 months, i.e. from Cay /0+, to Gctober /0+/, inclusive. 3his stipulation is not contrary to law,
morals and public policy. "Aer =uiser vs. G3E .irectories %G.&. 'o. (!:;;/:, /0+)12
1anagerial employees and super#isory employees
-1anagerial employee- is one +ho is #ested +ith po+ers or prerogati#es to lay do+n and execute management
policies and*or to hire. transfer. suspend. lay-off. recall. discharge. assign or discipline employees/ Super#isory
employees are those +ho. in the interest of the employer. effecti#ely recommend such managerial actions if the exercise
of such authority is not merely routinary or clerical in nature !ut re6uires the use of independent (udgment/ 4ll
employees not falling +ithin any of the a!o#e definitions are considered ran,-and-file employees for purposes of this
%oo,/ %>rticle -/- "m2, of the (abor #ode1
3he rave abuse of discretion committed by public respondent is at once apparent. >rt. -/-, par. "m2, of the (abor
#ode is explicit. > manaerial employee is "a2 one who is vested with powers or preroatives to lay down and execute
manaement policies, or to hire, transfer, suspend, lay off, recall, dischare, assin or discipline employees9 or "b2 one
who is vested with both powers or preroatives. > supervisory employee is different from a manaerial employee in the
sense that the supervisory employee, in the interest of the employer, effectively recommends such manaerial actions, if
the exercise of such manaerial authority is not routinary in nature but requires the use of independent judment.
&aned aainst these definitions and after a thorouh examination of the evidence submitted by both parties, we
arrive at a contrary conclusion. =ranch Canaers, #ashiers and #ontrollers of respondent =an4 are not manaerial
employees but supervisory employees. 3he findin of public respondent that ban4 policies are laid down andDor
executed throuh the collective action of these employees is simply erroneous. His discussion on the division of their
duties and responsibilities does not loically lead to the conclusion that they are manaerial employees, as the term is
defined in >rt. -/-, par. "m2. "'>3@!&B= vs. 3orres "G.&. 'o. 0;):+, -, .ecember /00)12
%>1 thorouh dissection of the job description of the concerned supervisory employees and section heads show that
they are not actually manaerial but only supervisory employees since they do not lay down company policies. B8#GBFs
contention that the subject section heads and unit manaers exercise the authority to hire and fire is ambiuous and
quite misleadin for the reason that any authority they my exercise is not supreme but merely advisory in character.
3heirs is not a final determination of the company policies inasmuch as any action ta4en by them on matters relatin to
hirin, promotion, transfer, suspension and termination of employees is still subject to confirmation and approval of their
respective superior. 3hus, where such power, which is in effect recommendatory in character, is subject to evaluation,
review and final action by the department heads and other hiher executives of the company, the same, althouh
present, is not effective and not an exercise of independent judment as required by law. "B8#GB vs. (auesma %G.&.
'o. /,/*;+, /- >pril -,,,12
58&S3!(8'E C>'>GE&S 3he lowest level in an oranization at which individuals are responsible for the wor4 of
others is called first!line or first!level manaement. 5irst!line manaers direct operatin employees only9 they do not
supervise other manaers. Examples of first!line manaers are the "foreman" or production supervisor in a manufacturin
plant, the technical supervisor in a research department, and the clerical supervisor in a lare office. 5irst!level manaers
are often called supervisors.
C8..(E C>'>GE&S 3he term middle manaement can refer to more than one level in an oranization. Ciddle
manaers direct the activities of other manaers and sometimes also those of operatin employees. Ciddle manaers7
principal responsibilities are to direct the activities that implement their oranizations7 policies and to balance the demands
of their superiors with the capacities of their subordinates. > plant manaer in an electronics firm is an example of a
middle manaer.
3GB C>'>GE&S #omposed of a comparatively small roup of executives, top manaement is responsible for the
overall manaement of the oranization. 8t establishes operatin policies and uides the oranization7s interactions with
its environment. 3ypical titles of top manaers are "chief executive officer," "president," and "senior vice!president." >ctual
titles vary from one oranization to another and are not always a reliable uide to membership in the hihest manaement
classification.
>s can be seen from this description, a distinction exists between those who have the authority to devise, implement
and control strateic and operational policies "top and middle manaers2 and those whose tas4 is simply to ensure that
such policies are carried out by the ran4!and!file employees of an oranization "first!level manaersDsupervisors2. $hat
9
distinuishes them from the ran4!and!file employees is that they act in the interest of the employer in supervisin such
ran4!and!file employees.
"Canaerial employees" may therefore be said to fall into two distinct cateories? the "manaers" per se, who
compose the former roup described above, and the "supervisors" who form the latter roup. $hether they belon to the
first or the second cateory, manaers, vis!a!vis employers, are, li4ewise, employees.
xxx xxx xxx
Earlier in this opinion, reference was made to the distinction between manaers per se "top manaers and middle
manaers2 and supervisors "first!line manaers2. 3hat distinction is evident in the wor4 of the route manaers which sets
them apart from supervisors in eneral. @nli4e supervisors who basically merely direct operatin employees in line with
set tas4s assined to them, route manaers are responsible for the success of the company7s main line of business
throuh manaement of their respective sales teams. Such manaement necessarily involves the plannin, direction,
operation and evaluation of their individual teams and areas which the wor4 of supervisors does not entail.
"@nited Bepsi #ola Supervisory @nion vs. (auesma %-++ S#&> /<, /00+12
%>1 thorouh dissection of the job description of the concerned supervisory employees and section heads
indisputably show that they are not actually manaerial but supervisory employees since they do not lay down company
policies. B8#GBFs contention that the subject section heads and unit manaers exercise the authority to hire and fire is
ambiuous and misleadin for the reason that any authority they exercise is not supreme but merely advisory in
character. 3heirs is not a final determination of the company policies inasmuch as any action ta4en by them on matters
relative to hirin, promotion, transfer, suspension and termination of employees is still subject to the confirmation and
approval by their respective supervisor. 3hus, where power, which is in effect recommendatory in character, is subject to
evaluation, review and final action by department heads and other hiher executives of the company, the same, althouh
present, is not effective and not an exercise of independent judment as required by law. "B8#GB vs. (auesma %G.&. 'o.
/,/*;+, /- >pril -,,,12
Term employment
3he question immediately provo4ed by a readin of >rticle ;/0 is whether or not a voluntary areement on a fixed
term or period would be valid where the employee "has been enaed to perform activities which are usually necessary or
desirable in the usual business or trade of the employer." 3he definition seems a non sequitur. 5rom the premise that the
duties of an employee entail "activities which are usually necessary or desirable in the usual business or trade of the
employer the" conclusion does not necessarily follow that the employer and employee should be forbidden to stipulate
any period of time for the performance of those activities. 3here is nothin essentially contradictory between a definite
period of an employment contract and the nature of the employee7s duties set down in that contract as bein "usually
necessary or desirable in the usual business or trade of the employer." 3he concept of the employee7s duties as bein
"usually necessary or desirable in the usual business or trade of the employer" is not synonymous with or identical to
employment with a fixed term. (oically, 3HE .E#8S8AE .E3E&C8'>'3 8' 3E&C ECB(GJCE'3 SHG@(. 'G3 =E
3HE >#38A838ES 3H>3 3HE ECB(GJEE 8S #>((E. @BG' 3G BE&5G&C, =@3 3HE .>J #E&3>8' >G&EE. @BG'
=J 3HE B>&38ES 5G& 3HE #GCCE'#ECE'3 >'. 3E&C8'>38G' G5 3HE8& ECB(GJCE'3 &E(>38G'SH8B, >
.>J #E&3>8' =E8'G @'.E&S3GG. 3G =E "3H>3 $H8#H C@S3 'E#ESS>&8(J #GCE, >(3HG@GH 83 C>J 'G3
=E P'G$' $HE'." Seasonal employment and employment for a particular project are merely instances employment in
which a period, where not expressly set down, necessarily implied.
xxx xxx xxx
3here can of course be no quarrel with the proposition that where from the circumstances it is apparent that periods
have been imposed to preclude acquisition of tenurial security by the employee, they should be struc4 down or
disrearded as contrary to public policy, morals, etc. =ut where no such intent to circumvent the law is shown, or stated
otherwise, where the reason for the law does not exist, e.., where it is indeed the employee himself who insists upon a
period or where the nature of the enaement is such that, without bein seasonal or for a specific project, a definite date
of termination is a sine qua non, would an areement fixin a period be essentially evil or illicit, therefore anathemaQ
$ould such an areement come within the scope of >rticle -+, which admittedly was enacted "to prevent the
circumvention of the riht of the employee to be secured in . . . "his2 employmentQ"
>s it is evident from even only the three examples already iven that >rticle -+, of the (abor #ode, under a narrow
and literal interpretation, not only fails to exhaust the amut of employment contracts to which the lac4 of a fixed period
would be an anomaly, but would also appear to restrict, without reasonable distinctions, the riht of an employee to freely
stipulate with his employer the duration of his enaement, it loically follows that such a literal interpretation should be
eschewed or avoided. 3he law must be iven a reasonable interpretation, to preclude absurdity in its application.
Gutlawin the whole concept of term employment and subvertin to boot the principle of freedom of contract to remedy
the evil of employer7s usin it as a means to prevent their employees from obtainin security of tenure is li4e cuttin off the
nose to spite the face or, more relevantly, curin a headache by loppin off the head.
xxx xxx xxx
>ccordinly, and since the entire purpose behind the development of leislation culminatin in the present >rticle
-+, of the (abor #ode clearly appears to have been, as already observed, to prevent circumvention of the employee7s
riht to be secure in his tenure, the clause in said article indiscriminately and completely rulin out all written or oral
areements conflictin with the concept of reular employment as defined therein should be construed to refer to the
substantive evil that the #ode itself has sinled out? areements entered into precisely to circumvent security of tenure. 8t
should have no application to instances where a fixed period of employment was areed upon 4nowinly and voluntarily
by the parties, without any force, duress or improper pressure bein brouht to bear upon the employee and absent any
other circumstances vitiatin his consent, or where it satisfactorily appears that the employer and employee dealt with
each other on more or less equal terms with no moral dominance whatever bein exercised by the former over the latter.
@nless thus limited in its purview, the law would be made to apply to purposes other than those explicitly stated by its
framers9 it thus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd and unintended
consequences. "=rent School vs. Ramora "G.&. 'o. (!)+)0), ,< 5ebruary /00,12
3he private respondent7s intention is obvious. 8t is remar4able that neither the '(&# nor the Solicitor General
reconized it. 3here is no question that the purpose behind these individual contracts was to evade the application of the
labor laws by ma4in it appear that the drivers of the truc4in company were not its reular employees.
@nder these arranements, the private respondent hoped to be able to terminate the services of the drivers without
the inhibitions of the (abor #ode. >ll it had to do was refuse to renew the areements, which, sinificantly, were uniformly
limited to a six!month period. 'o cause had to be established because such renewal was subject to the discretion of the
parties. 8n fact, the private respondent did not even have to wait for the expiration of the contract as it was there provided
that it could be "earlier terminated at the option of either party."
=y this clever scheme, the private respondent could also prevent the drivers from becomin reular employees and
thus be entitled to security of tenure and other benefits, such as a minimum wae, cost!of!livin allowances, vacation and
sic4 leaves, holiday pay, and other statutory requirements. 3he private respondent arues that there was nothin wron
with the affidavit because all the affiant ac4nowleded therein was full payment of the amount due him under the
areement. Aiewed in this liht, such ac4nowledment was indeed not necessary at all because this was already
10
embodied in the vouchers sined by the payee!driver. =ut the affidavit, for all its seemin innocuousness, imported more
than that. $hat was insidious about the document was the waiver the affiant was unwarily ma4in of the statutory rihts
due him as an employee of the truc4in company.
xxx xxx xxx
3he #ourt loo4s with stern disapproval at the contract entered into by the private respondent with the petitioner "and
who 4nows with how many other drivers2. 3he areement was a clear attempt to exploit the unwittin employee and
deprive him of the protection of the (abor #ode by ma4in it appear that the stipulations of the parties were overned by
the #ivil #ode as in ordinary private transactions. 3hey were not, to be sure. 3he areement was in reality a contract of
employment into which were read the provisions of the (abor #ode and the social justice policy mandated by the
#onstitution. 8t was a deceitful areement cloa4ed in the habiliments of leality to conceal the selfish desire of the
employer to reap undeserved profits at the expense of its employees. 3he fact that the drivers are on the whole practically
unlettered only ma4es the imposition more censurable and the avarice more execrable.
"#ielo vs. '(&# %G.&. 'o. *+:0;, -+ 6anuary /00/12
%31he two uidelines, by which fixed contracts of employments can be said 'G3 to circumvent security of tenure, are
either?
/. 3he fixed period of employment was P'G$8'G(J >'. AG(@'3>&8(J >G&EE. @BG' by the parties,
without any force, duress or improper pressure bein brouht to bear upon the employee and absent any
other circumstances vitiatin his consent9 or?
-. 8t satisfactorily appears that the employer and employee .E>(3 $83H E>#H G3HE& G' CG&E G& (ESS
EN@>( 3E&CS with no moral dominance whatever bein exercised by the former on the latter.
"B'G# vs. '(&# %G.&. 'o. 0**)*, ;/ Carch /00;12
8t is apparent from =rent School that the critical consideration is the presence or absence of a substantial indication
that the period specified in an employment areement was desined to circumvent the security of tenure of reular
employees which is provided for in >rticles -+, and -+/ of the (abor #ode. 3his indication must ordinarily rest upon some
aspect of the areement other than the mere specification of a fixed term of the ernployment areement, or upon
evidence aliunde of the intent to evade.
Examinin the provisions of pararaphs < and : of the employment areement between petitioner B8> and private
respondents, we consider that those provisions must be read toether and when so read, the fixed period of three ";2
years specified in pararaph < will be seen to have been effectively neutralized by the provisions of pararaph : of that
areement. Bararaph : in effect too4 bac4 from the employee the fixed three ";2!year period ostensibly ranted by
pararaph < by renderin such period in effect a facultative one at the option of the employer B8>. 5or petitioner B8>
claims to be authorized to shorten that term, at any time and for any cause satisfactory to itself, to a one!month period, or
even less by simply payin the employee a month7s salary. =ecause the net effect of pararaphs < and : of the
areement here involved is to render the employment of private respondents 5arrales and Camasi basically employment
at the pleasure of petitioner B8>, the #ourt considers that pararaphs < and : were intended to prevent any security of
tenure from accruin in favor of private respondents even durin the limited period of three ";2 years, and thus to escape
completely the thrust of >rticles -+, and -+/ of the (abor #ode. "Ba4istan >ir (ines vs. Gple %G.&. 'o. :/<0), -+
September /00,12
2ro(ect employees
78W9here the employment has !een fixed for a specific pro(ect or underta,ing. the completion or termination of
+hich has !een determined at the time of the engagement of the employee or +here the +or, or ser#ice to !e
performed is seasonal in nature and the employment is for the duration of the season/ "/
st
pararaph of >rticle
-+, of the (abor #ode2
> project employee has been defined to be one whose employment has been fixed for a specific project or
underta4in, the completion or termination of which has been determined at the time of the enaement of the
employee, . . . . "Cercado, Sr. vs. '(&# %G.&. 'o. *0+:0, ,< September /00/12
8n the realm of business and industry, we note that "project" could refer to one or the other of at least two "-2
distinuishable types of activities. 58&S3(J, a project could refer to a particular job or underta4in that is $83H8' 3HE
&EG@(>& G& @S@>( =@S8'ESS G5 3HE ECB(GJE& company, but which is distinct and separate, and identifiable as
such, from the other underta4ins of the company. Such job or underta4in beins and ends at determined or
determinable times. 3he typical example of this first type of project is a particular construction job or project of a
construction company. > construction company ordinarily carries out two or more discrete identifiable construction
projects? e.., a twenty!five!storey hotel in Ca4ati9 a residential condominium buildin in =auio #ity9 and a domestic air
terminal in 8loilo #ity. Employees who are hired for the carryin out of one of these separate projects, the scope and
duration of which has been determined and made 4nown to the employees at the time of employment, are properly
treated as "project employees," and their services may be lawfully terminated at completion of the project.
3he term "project" could also refer to, SE#G'.(J, a particular job or underta4in that is 'G3 $83H8' 3HE
&EG@(>& =@S8'ESS G5 3HE #G&BG&>38G'. Such a job or underta4in must also be identifiably separate and
distinct from the ordinary or reular business operations of the employer. 3he job or underta4in also beins and ends at
determined or determinable times. 3he case at bar presents what appears to our mind as a typical example of this 4ind of
"project." ">(@!3@#B vs. '(&# %G.&. 'o. /,00,-, ,- >uust /00)12
>s an electrical contractor, the private respondent depends for its business on the contracts it is able to obtain from
real estate developers and builders of buildins. Since its wor4 depends on the availability of such contracts or "projects,"
necessarily the duration of the employment of its wor4 force is not permanent but co!terminus with the projects to which
they are assined and from whose payrolls they are paid. 8t would be extremely burdensome for their employer who, li4e
them, depends on the availability of projects, if it would have to carry them as permanent employees and pay them waes
even if there are no projects for them to wor4 on. $e hold, therefore, that the '(&# did not abuse its discretion in findin,
based on substantial evidence in the records, that the petitioners are only project wor4ers of the private respondent.
"#artaenas vs. &omao Electric %G.&. 'o. +-0*;, /0+012
Betitioner relies on Bolicy 8nstruction 'o. -, which was issued by then Secretary Gple to stabilize employer!
employee relations in the construction industry to support his contention that wor4ers in the construction industry may now
be considered reular employees after their lon years of service with private respondent. 3he pertinent provision of
Bolicy 8nstruction 'o. -, reads?
Cembers of a wor4 pool from which a construction company draws its project employees, if considered
employees of the construction company while in the wor4 pool, are non!project employees or employees for
an indefinite period. 8f they are employed in a particular project, the completion of the project or of any phase
thereof will not mean severance of employer!employee relationship.
11
&espondent #ommission correctly observed in its decision that complainants, one of whom petitioner, failed to
consider the requirement in Bolicy 8nstruction 'o. -, that to qualify as member of a wor4 pool, the wor4er must still be
considered an employee of the construction company while in the wor4 pool. 8n other words, there must be proof to the
effect that petitioner was under an obliation to be always available on call of private respondent and that he was not free
to offer his services to other employees. @nfortunately, petitioner miserably failed to introduce any evidence of such
nature durin the times when there were no project. "5ernandez vs. '(&# %G.&. 'o. /,:,0,, -+ 5ebruary /00)12
Confidential Employees
#onfidential employees are those who "/2 >SS8S3 G& >#3 8' > #G'58.E'38>( #>B>#83J, in reard "-2 3G
BE&SG'S $HG 5G&C@(>3E, .E3E&C8'E, >'. E55E#3@>3E C>'>GECE'3 BG(8#8ES %specifically in the field of
(>=G& &E(>38G'S1. 3he two criteria are cumulative, and both must be met if an employee is to be considered a
confidential employee that is, the confidential relationship must exist between the employee and his superior officer9 and
that officer must handle the prescribed responsibilities relatin to labor relations. "Subuanon &ural =an4, 8nc. vs.
(auesma %G.&. 'o. //:/0), ,- 5ebruary -,,,12
Grantin aruendo that an employee has access to confidential labor relations information but such is merely
incidental to his duties and 4nowlede thereof is not necessary in the performance of such duties, said access does not
render the employee a confidential employee. 8f access to confidential labor relations information is to be a factor in the
determination of an employee7s confidential status, such information must relate to the employer7s labor relations policies.
3hus, an employee of a labor union, or of a manaement association, must have access to confidential labor relations
information with respect to his employer, the union, or the association, to be rearded a confidential employee, and
4nowlede of labor relations information pertainin to the companies with which the union deals, or which the association
represents, will not cause an employee to be excluded from the barainin unit representin employees of the union or
association." ">ccess to information which is rearded by the employer to be confidential from the business standpoint,
such as financial information or technical trade secrets, will not render an employee a confidential employee. "SC# vs.
(auesma %G.&. 'o. //,;00, /< >uust /00*12
Teachers
3he acquisition of security of tenure by the teacher in the manner indicated sinifies that he shall thenceforth have
the riht to remain in employment as such teacher until he reaches the compulsory retirement ae in accordance with the
rules of the school or the law. 3hat tenure, once acquired, cannot be adversely affected or defeated by requirin the
teacher to execute contracts stipulatin the termination of his employment upon the expiration of a fixed period or term.
#ontracts of that sort are anathema and will be struc4 down as null and void.
'ow, a teacher may also be appointed as a department head or administrative officer of the school, e.., as member
of the school7s overnin council, as collee dean or assistant dean, as hih school7s principal, as collee secretary.
Except in the case of a clear and explicit areement to the contrary, the acceptance by a teacher of an administrative
position offered to him or to which he miht have aspired, does not operate as a relinquishment or loss by him of his
security of tenure as a faculty member9 he retains his tenure as a teacher durin all the time that he occupies the
additional position of department head or administrative officer of the school. 8ndeed, the areement between him and the
school may very well include a provision for him to continue teachin even on a part!time basis.
xxx xxx xxx
> distinction should thus be drawn between the teachin staff of private educational institutions, on one hand
teachers, assistant instructors, assistant professors, associate professors, full professors and department or
administrative heads or officials on the other collee or department secretaries, principals, directors, assistant deans,
deans. 3he teachin staff, the faculty members, may and should acquire tenure in accordance with the rules and
reulations of the .E#S and the school7s own rules and standards. Gn the other hand, teachers appointed to serve as
administrative officials do not normally and should not expect to, acquire a second or additional tenure. 3he acquisition of
such an additional tenure is not normal, is the exception rather than the rule, and should therefore be clearly and
specifically provided by law or contract.
"(a Salette of Santiao, 8nc. vs. '(&# %/0< S#&> +,, /00/12
RI&HT TO SEL"-OR&ANI)ATION
4s to :o#ernment Employees and Employees of :"CCs +ith original charters
E*ECUTI'E ORDER NO+ ,-.
"Effective? ,/ 6une /0+*2
B&GA8.8'G G@8.E(8'ES 5G& 3HE ELE&#8SE G5 3HE &8GH3 3G &G>'8RE G5 GGAE&'CE'3
ECB(GJEES, #&E>38'G > B@=(8# SE#3G& (>=G&! C>'>GECE'3 #G@'#8(, >'. 5G& G3HE&
B@&BGSES
3he scope of the constitutional riht to self!oranization of "overnment employees" above mentioned, was defined
and delineated in Executive Grder 'o. /+,. >ccordin to this Executive Grder, the riht of self!oranization does indeed
pertain to all "employees of all branches, subdivisions, instrumentalities and aencies of the Government, includin
overnment!owned or controlled corporations with oriinal charters9" such employees "shall not be discriminated aainst
in respect of their employment by reason of their membership in employees7 oranizations or participation in the normal
activities of their oranization x x "and their2 employment shall not be subject to the condition that they shall not join or
shall relinquish their membership in the employees7 oranizations.
However, the concept of the overnment employees7 riht of self!oranization differs sinificantly from that of
employees in the private sector. 3he latter7s riht of self!oranization, i.e., "to form, join or assist labor oranizations for
purposes of collective barainin," admittedly includes the riht to deal and neotiate with their respective employers in
order to fix the terms and conditions of employment and also, to enae in concerted activities for the attainment of their
objectives, such as stri4es, pic4etin, boycotts. =ut the riht of GGAE&'CE'3 ECB(GJEES to "form, join or assist
employees oranizations of their own choosin" under Executive Grder 'o. /+, is not rearded as existin or available
for "purposes of collective barainin," but simply "5G& 3HE 5@&3HE&>'#E >'. B&G3E#38G' G5 3HE8&
8'3E&ES3S."
8n other words, the riht of Government employees to deal and neotiate with their respective employers is not quite
as extensive as that of private employees. Excluded from neotiation by overnment employees are the "terms and
conditions of employment ... that are fixed by law," it bein only those terms and conditions not otherwise fixed by law that
"may be subject of neotiation between the duly reconized employees7 oranizations and appropriate overnment
authorities," >nd while EG 'o. /+, concedes to overnment employees, li4e their counterparts in the private sector, the
riht to enae in concerted activities, includin the riht to stri4e, the executive order is quic4 to add that those activities
must be exercised in accordance with law, i.e. are subject both to "#ivil Service (aw and rules" and "any leislation that
may be enacted by #onress," that "the resolution of complaints, rievances and cases involvin overnment employees"
is not ordinarily left to collective barainin or other related concerted activities, but to "#ivil Service (aw and labor laws
12
and procedures whenever applicable9" and that in case "any dispute remains unresolved after exhaustin all available
remedies under existin laws and procedures, the parties may jointly refer the dispute to the "Bublic Sector (abor!
Canaement2 #ouncil for appropriate action." $hat is more, the &ules and &eulations implementin Executive Grder
'o. /+, explicitly provide that since the "terms and conditions of employment in the overnment, includin any political
subdivision or instrumentality thereof and overnment!owned and controlled corporations with oriinal charters are
overned by law, the employees therein shall not stri4e for the purpose of securin chanes thereof.
Gn the matter of limitations on membership in labor unions of overnment employees, Executive Grder 'o. /+,
declares that "hih level employees whose functions are normally considered as policy ma4in or manaerial, or whose
duties are of a hihly confidential nature shall not be eliible to join the oranization of ran4!and!file overnment
employees. > "hih level employee" is one "whose functions are normally considered policy determinin, manaerial or
one whose duties are hihly confidential in nature. > manaerial function refers to the exercise of powers such as? /. 3o
effectively recommend such manaerial actions9 -. 3o formulate or execute manaement policies and decisions9 or ;. 3o
hire, transfer, suspend, lay off, recall, dismiss, assin or discipline employees.
">rizala vs. #> %G.&. 'os. );:;;!;), /) September /00,12
8. #GAE&>GE
Section ;.3his Executive Grder applies to all employees of all branches, subdivisions, instrumentalities, and aencies, of the
Government, includin overnment!owned or controlled corporations with oriinal charters. 5or this purpose, employees, covered by
this Executive Grder shall be referred to as "overnment employees".
Section <.>ll overnment employees can form, join or assist employees7 oranizations of their own choosin for the furtherance and
protection of their interests. 3hey can also form, in conjunction with appropriate overnment authorities, labor!manaement
committees, wor4s councils and other forms of wor4ers7 participation schemes to achieve the same objectives.
Section =.Hih!level employees whose functions are normally considered as policy!ma4in or manaerial or whose duties are of a
hihly confidential nature shall not be eliible to join the oranization of ran4!and!file overnment employees.
Section >.3he Executive Grder shall not apply to the members of the >rmed 5orces of the Bhilippines, includin police officers,
policemen, firemen and jail uards.
88. B&G3E#38G' G5 3HE &8GH3 3G G&G>'8RE
Section ?.Government employees shall not be discriminated aainst in respect of their employment by reason of their membership
in employees7 oranizations or participation in the normal activities of their oranization. 3heir employment shall not be subject to
the condition that they shall not join or shall relinquish their membership in the employees7 oranizations.
Section @.Government authorities shall not interfere in the establishment, functionin or administration of overnment employees7
oranizations throuh acts desined to place such oranizations under the control of overnment authority.
888. &EG8S3&>38G' G5 ECB(GJEES7 G&G>'8R>38G'
Section A.Government employees7 oranizations shall reister with the #ivil Service #ommission and the .epartment of (abor and
Employment. 3he application shall be filed with the =ureau of (abor &elations of the .epartment which shall process the same in
accordance with the provisions of the (abor #ode of the Bhilippines, as amended. >pplications may also be filed with the &eional
Gffices of the .epartment of (abor and Employment which shall immediately transmit the said applications to the =ureau of (abor
&elations within three ";2 days from receipt thereof.
Section B.@pon approval of the application, a reistration certificate be issued to the oranization reconizin it as a leitimate
employees7 oranization with the riht to represent its members and underta4e activities to further and defend its interest. 3he
correspondin certificates of reistration shall be jointly approved by the #hairman of the #ivil Service #ommission and Secretary of
(abor and Employment.
8A. SG(E >'. EL#(@S8AE ECB(GJEES7 &EB&ESE'3>38AES
Section C.3he appropriate oranizational unit shall be the employers unit consistin of ran4!and!file employees unless
circumstances otherwise require.
Section ;D. 3he duly reistered employees7 oranization havin the support of the majority of the employees in the
appropriate oranizational unit shall be desinated as the sole and exclusive representative of the employees.
Section ;;. > duly reistered employees7 oranization shall be accorded voluntary reconition upon a showin that no other
employees7 oranization is reistered or is see4in reistration, based on records of the =ureau of (abor &elations, and that the
said oranizations has the majority support of the ran4!and!file employees in the oranizational unit.
Section ;<. $here there are two or more duly reistered employees7 oranizations in the appropriate oranizational unit,
the =ureau of (abor &elations shall, upon petition, order the conduct of a certification election and shall certify the winner as the
exclusive representative of the ran4!and!file employees in said oranization unit.
A. 3E&CS >'. #G'.838G'S G5 ECB(GJCE'3 8' GGAE&'CE'3 SE&A8#ES
Section ;=. 3erms and conditions of employment or improvements thereof, except those that are fixed by law, may be the
subject of neotiations between duly reconized employees7 oranizations and appropriate overnment authorities.
:o#ernment employees/ - The terms and conditions of employment of all go#ernment employees. including
employees of go#ernment-o+ned and controlled corporations. shall !e go#erned !y the Ci#il Ser#ice a+. rules and
regulations/ Their salaries shall !e standardi0ed !y the &ational 4ssem!ly as pro#ided for in the ne+ constitution/
Eo+e#er. there shall !e no reduction of existing +ages. !enefits and other terms and conditions of employment !eing
en(oyed !y them at the time of the adoption of this Code/ ">rticle -*: of the (abor #ode/2
:o#ernment employees may. therefore. through their unions or associations. either petition the Congress for the
!etterment of the terms and conditions of employment +hich are +ithin the am!it of legislation or negotiate +ith the
appropriate go#ernment agencies for the impro#ement of those +hich are not fixed !y la+/ If there !e any unresol#ed
grie#ances. the dispute may !e referred to the 2u!lic Sector a!or - 1anagement Council for appropriate action/ %ut
employees in the ci#il ser#ice may not resort to stri,es. +al,-outs and other temporary +or, stoppages. li,e +or,ers in the
pri#ate sector. to pressure the :o#ernment to accede to their demands/ 4s no+ pro#ided under Sec/ >. Rule III of the
Rules and Regulations to :o#ern the Exercise of the Right of :o#ernment- Employees to Self- "rgani0ation. +hich too,
13
effect after the instant dispute arose. -8t9he terms and conditions of employment in the go#ernment. including any political
su!di#ision or instrumentality thereof and go#ernment- o+ned and controlled corporations +ith original charters are
go#erned !y la+ and employees therein shall not stri,e for the purpose of securing changes thereof/- "SSSE> vs. #>
%G.&. 'o. +<-*0, -+ 6uly /0+012
A8. BE>#E5@( #G'#E&3E. >#38A838ES >'. S3&8PES
Section ;>. 3he #ivil Service laws and rules overnin concerted activities and stri4es in the overnment service shall be
observed, subject to any leislation that may be enacted by #onress.
8T9o implement the constitutional guarantee of the right of go#ernment employees to organi0e. the 2resident issued
E/"/ &o/ ;BD +hich pro#ides guidelines for the exercise of the right to organi0e of go#ernment employees/ In Section ;>
thereof. it is pro#ided that -8t9he Ci#il Ser#ice la+ and rules go#erning concerted acti#ities and stri,es in the go#ernment
ser#ice shall !e o!ser#ed. su!(ect to any legislation that may !e enacted !y Congress/- The 2resident +as apparently
referring to 1emorandum Circular &o/ @. s/ ;CBA of the Ci#il Ser#ice Commission under date 4pril <;. ;CBA +hich. -prior
to the enactment !y Congress of applica!le la+s concerning stri,e !y go#ernment employees /// en(oins under pain of
administrati#e sanctions. all go#ernment officers and employees from staging stri,es. demonstrations. mass lea#es. +al,-
outs and other forms of mass action +hich +ill result in temporary stoppage or disruption of pu!lic ser#ice/- The air +as
thus cleared of the confusion/ 4t present. in the a!sence of any legislation allo+ing go#ernment employees to stri,e.
recogni0ing their right to do so. or regulating the exercise of the right. they are prohi!ited from stri,ing. !y express
pro#ision of 1emorandum Circular &o/ @ and as implied in E/"/ &o/ ;BD/ 84t this (uncture. it must !e stated that the
#alidity of 1emorandum Circular &o/ @ is not at issue9/
%ut are employees of the SSS co#ered !y the prohi!ition against stri,esF
The Court is of the considered #ie+ that they are/ Considering that under the ;CBA Constitution -8t9he ci#il ser#ice
em!races all !ranches. su!di#isions. instrumentalities. and agencies of the :o#ernment. including go#ernment-o+ned or
controlled corporations +ith original charters- 84rt/ I)G%H. Sec/ /<GlH see also Sec/ ; of E/"/ &o/ ;BD +here the employees
in the ci#il ser#ice are denominated as -go#ernment employees-9 and that the SSS is one such go#ernment-controlled
corporation +ith an original charter. ha#ing !een created under R/4/ &o/ ;;@;. its employees are part of the ci#il ser#ice
8&4SEC" #/ &RC. :/R/ &os/ @CBAD. ;CBB9 and are co#ered !y the Ci#il Ser#ice CommissionIs memorandum prohi!iting
stri,es/ This !eing the case. the stri,e staged !y the employees of the SSS +as illegal/
"SSSE> vs. #> %G.&. 'o. +<-*0, -+ 6uly /0+012
We no+ come to the case !efore us/ 2etitioners. +ho are pu!lic schoolteachers and thus go#ernment employees.
do not see, to esta!lish that they ha#e a right to stri,e/ Rather. they tenaciously insist that their a!sences during certain
dates in Septem!er ;CCD +ere a #alid exercise of their constitutional right to engage in peaceful assem!ly to petition the
go#ernment for a redress of grie#ances/ They claim that their gathering +as not a stri,e3 therefore. their participation
therein did not constitute any offense/ 12ST4 #s/ aguio =@ and 4CT #s/ CariJo. =A in +hich this Court declared that
-these Imass actionsI +ere to all intents and purposes a stri,e3 they constituted a concerted and unauthori0ed stoppage
of. or a!sence from. +or, +hich it +as the teachersI duty to perform. underta,en for essentially economic reasons.-
should not principally resol#e the present case. as the underlying facts are allegedly not identical/
Stri,e. as defined !y la+. means any temporary stoppage of +or, !y the concerted action of employees as a result
of an industrial or la!or dispute/ =B 4 la!or dispute includes any contro#ersy or matter concerning terms and conditions of
employment3 or the association or representation of persons in negotiating. fixing. maintaining. changing or arranging the
terms and conditions of employment. regardless of +hether the disputants stand in the proximate relation of employers
and employees/ =C With these premises. +e no+ e#aluate the circumstances of the instant petition/
It cannot !e denied that the mass action or assem!ly staged !y the petitioners resulted in the non-holding of classes
in se#eral pu!lic schools during the corresponding period/ 2etitioners do not dispute that the grie#ances for +hich they
sought redress concerned the alleged failure of pu!lic authorities essentially. their -employers- to fully and (ustly
implement certain la+s and measures intended to !enefit them materially.7
"6acinto vs. #> %G.&. 'o. /-)<),, /) 'ovember /00*12
It has long !een settled that the mass actions of Septem!er*"cto!er ;CCD staged !y 1etro 1anila pu!lic school
teachers amounted to a stri,e in e#ery sense of the term. constituting. as they did. -concerted and unauthori0ed stoppage
of or a!sence from. +or, +hich it +as the teachers- duty to perform. underta,en for essentially economic reasons/- The
claim that the teachers in#ol#ed in the ;CCD mass actions +ere merely exercising their constitutional right to peaceful
assem!ly +as already re(ected in :an #s/ Ci#il Ser#ice Commission. CBS3> vs. (auio %G.&. 'o. 0<))<, ,: >uust
/00/12
8T9he claim that the teachers +ere there!y denied their rights to peacea!ly assem!le and petition the go#ernment for
redress of grie#ances reasoning that this constitutional li!erty to !e upheld li,e any other li!erty. must !e exercised +ithin
reasona!le limits so as not to pre(udice the pu!lic +elfare/ %ut the school teachers in the case of the ;CCD mass actions
did not exercise their constitutional rights +ithin reasona!le limits/ "n the contrary. they committed acts pre(udicial to the
!est interest of the ser#ice !y staging the mass protest on regular school days. a!andoning their classes and refusing to
go !ac, e#en after they had !een ordered to do so. Ead the teachers a#ailed of their free-time recess. after classes.
+ee,ends or holidays to dramati0e their grie#ances and to dialogue +ith the proper authorities +ithin !ounds of the la+.
no one not the DECS. the CSC or e#en the Supreme Court could ha#e held them lia!le for their participation in the
mass action/ "Gan vs. #S# %G.&. 'o. //,*/*, /) .ecember /00;12
A88. B@=(8# SE#3G& (>=G&!C>'>GECE'3 #G@'#8(
Section ;?. > Bublic Sector (abor Canaement #ouncil, hereinafter referred to as the #ouncil, is hereby constituted to be
composed of the followin?
/2 #hairman, #ivil Service #ommission ! #hairman
-2 Secretary, .epartment of (abor and Employment ! Aice #hairman
;2 Secretary, .epartment of 5inance ! Cember
)2 Secretary, .epartment of 6ustice ! Cember
<2 Secretary, .epartment of =udet and Canaement ! Cember
3he #ouncil shall implement and administer the provisions of this Executive Grder. 5or this purpose, the #ouncil shall
promulate the necessary rules and reulations to implement this Executive Grder.
Since &2DC is a go#ernment agency. its employees are co#ered !y ci#il ser#ice rules and regulations GSec/ <.
4rticle I). ;CBA ConstitutionH/ Its employees are ci#il ser#ice employees GSec/ ;>. Executi#e "rder &o/ ;BDH/
While &2DC employees are allo+ed under the ;CBA Constitution to organi0e and (oin unions of their choice. there is
as yet no la+ permitting them to stri,e/ In case of a la!or dispute !et+een the employees and the go#ernment. Section ;?
of Executi#e "rder &o/ ;BD dated June ;. ;CBA pro#ides that the 2u!lic Sector a!or-1anagement Council. not the
Department of a!or and Employment. shall hear the dispute/ Clearly. the Court of 4ppeals and the lo+er court erred in
14
holding that the la!or dispute !et+een the &2DC and the mem!ers of the &2DS4 is cogni0a!le !y the Department of
a!or and Employment/ "&epublic vs. #> %G.&. 'o. +*:*:, -, .ecember /0+012
It is futile for the petitioners to assert that the su!(ect la!or dispute falls +ithin the exclusi#e (urisdiction of the &RC
and. hence. the Regional Trial Court had no (urisdiction to issue a +rit of in(unction en(oining the continuance of the stri,e/
The a!or Code itself pro#ides that terms and conditions of employment of go#ernment employees shall !e go#erned !y
the Ci#il Ser#ice a+. rules and regulations 84rt/ <A@9/ 1ore importantly. E/"/ &o/ ;BD #ests the 2u!lic Sector a!or -
1anagement Council +ith (urisdiction o#er unresol#ed la!or disputes in#ol#ing go#ernment employees 8Sec/ ;@9/ Clearly.
the &RC has no (urisdiction o#er the dispute/
This !eing the case. the Regional Trial Court +as not precluded. in the exercise of its general (urisdiction under %/2/
%lg/ ;<C. as amended. from assuming (urisdiction o#er the SSSIs complaint for damages and issuing the in(uncti#e +rit
prayed for therein/ Knli,e the &RC. the 2u!lic Sector a!or - 1anagement Council has not !een granted !y la+
authority to issue +rits of in(unction in la!or disputes +ithin its (urisdiction/ Thus. since it is the Council. and not the &RC.
that has (urisdiction o#er the instant la!or dispute. resort to the general courts of la+ for the issuance of a +rit of in(unction
to en(oin the stri,e is appropriate/
"SSSE> vs. #> %G.&. 'o. +<-*0, -+ 6uly /0+012
A888. SE33(ECE'3 G5 .8SB@3ES
Section ;@. 3he #ivil Service and labor laws and procedures, whenever applicable, shall be followed in the resolution of
complaints, rievances and cases involvin overnment employees. 8n case any dispute remains unresolved after exhaustin all the
available remedies under existin laws and procedures, the parties may jointly refer the dispute to the #ouncil, for appropriate
action.
8L. E55E#38A83J
Section ;A. 3his Executive Grder shall ta4e effect immediately.
4s to 1em!ers of a cooperati#e
> cooperative, therefore, is by its nature different from an ordinary business concern bein run either, by persons,
partnerships or corporations. 8ts owners andDor members are the ones who run and operate the business while the others
are its employees. >s above stated, irrespective of the name of shares owned by its members they are entitled to cast
one vote each in decidin upon the affair of the cooperative. 3heir share capital earn limited interests, 3hey enjoy special
privilees as exemption from income tax and sales taxes, preferential riht to supply their products to State aencies and
even exemption from minimum wae laws.
>n employee therefore of such a cooperative who is a member and co!owner thereof cannot invo4e the riht to
collective barainin for certainly an owner cannot barain with himself or his co!owners. 8n the opinion of >uust /),
/0+/ of the Solicitor General, he corectly opined that employees of cooperatives who are themselves members of the
cooperative have no riht to form or join labor oranizations for purposes of collective barainin for bein themselves co!
owners of the cooperative.
However, in so far as it involves cooperatives with employees who are not members or co!owners thereof, certainly
such employees are entitled to exercise the rihts of all wor4ers to oranization, collective barainin, neotiations and
others as are enshrined in the #onstitution and existin laws of the country.
"#ooperative &ural =an4 of .avao #ity vs. 5errer!#alleja %G.&. 'o. **0</, -: September /0++1
4s to 1anagerial Employees
Ineligi!ility of managerial employees to (oin any la!or organi0ation3 right of super#isory employees/ -
1anagerial employees are not eligi!le to (oin. assist or form any la!or organi0ation/ Super#isory employees
shall not !e eligi!le for mem!ership in a la!or organi0ation of the ran,-and-file employees !ut may (oin. assist
or form separate la!or organi0ations of their o+n/ G>rticle -)< of the (abor #odeH
3he reasons for the disqualification of a manaerial employee from joinin or assistin a labor oranization is applied
also to confidential employees thru the doctrine of necessary implication, wherein the S# too4 into consideration the
rationale behind the disqualification of manaerial employees expressed in =ulletin Bublishin #orporation v. Sanchez,
thus? "... if these manaerial employees would belon to or be affiliated with a @nion, the latter miht not be assured of
their loyalty to the @nion in view of evident conflict of interests. 3he @nion can also become company!dominated with the
presence of manaerial employees in @nion membership." 8n the collective barainin process, manaerial employees
are supposed to be on the side of the employer, to act as its representatives, and to see to it that its interests are well
protected. 3he employer is not assured of such protection if these employees themselves are union members. #ollective
barainin in such a situation can become one!sided. @nionization of confidential employees for the purpose of collective
barainin would mean the extension of the law to persons or individuals who are supposed to act "in the interest of" the
employers. 8t is not farfetched that in the course of collective barainin, they miht jeopardize that interest which they are
duty!bound to protect. "'>3@!&B= vs. 3orres %G.&. 'o. 0;):+, -0 .ecember /00)12
4s to Confidential Employees
$e have decreed as disqualified from barainin with manaement in case of =ulletin Bublishin #o. 8nc. vs. Hon.
>uusto Sanchez "/)) S#&> :-+2 reiteratin herein the rationale for such rulin as follows? if these manaerial
employees would belon to or be affiliated with a @nion, the latter miht not be assured of their loyalty to the @nion in view
of evident conflict of interests or that the @nion can be company!dominated with the presence of manaerial employees in
@nion membership. > manaerial employee is defined under >rt. -/- "42 of the new (abor #ode as "one who is vested
with powers or preroatives to lay down and execute manaement policies andDor to hire, transfer, suspend, lay!off, recall,
dischare, assin or discipline employees, or to effectively recommend such manaerial actions. >ll employees not fallin
within this definitions are considered ran4!and!file employees for purposes of this =oo4." "Golden 5arms vs. #alleja %G.&.
'o. *+*<<, /0 6uly /0+012
>rt. -)< of the (abor #ode does not directly prohibit confidential employees from enain in union activities.
However, under the doctrine of necessary implication, the disqualification of manaerial employees equally applies to
confidential employees. 3he confidential!employee rule justifies exclusion of confidential employees because in the
normal course of their duties they become aware of manaement policies relatin to labor relations. 8t must be stressed,
however, that when the employee does not have access to confidential labor relations information, there is no leal
prohibition aainst confidential employees from formin, assistin, or joinin a union. "Subuanon &ural =an4, 8nc. vs.
(auesma %G.&. 'o. //:/0), ,- 5ebruary -,,,12
15
3he exclusion from barainin units of employees who, in the normal course of their duties, become aware of
manaement policies relatin to labor relations is a principal objective souht to be accomplished by the 77confidential
employee rule." 3he broad rationale behind this rule is that employees should not be placed in a position involvin a
potential conflict of interests. "Canaement should not be required to handle labor relations matters throuh employees
who are represented by the union with which the company is required to deal and who in the normal performance of their
duties may obtain advance information of the company7s position with reard to contract neotiations, the disposition of
rievances, or other labor relations matters." "SC# vs. (auesma %G.&. 'o. //,;00, /< >uust /00*12
4s to Super#isory Employees
3he rationale for the amendment is the overnment7s reconition of the riht of supervisors to oranize with the
qualification that they shall not join or assist in the oranization of ran4!and!file employees. 3he reason behind the
8ndustrial Beace >ct provision on the same subject matter has been adopted in the present statute. 3he interests of
supervisors on the one hand, and the ran4!and!file employees on the other, are separate and distinct. 3he functions of
supervisors, bein recommendatory in nature, are more identified with the interests of the employer. 3he performance of
those functions may, thus, run counter to the interests of the ran4!and!file.
xxx xxx xxx
3hus, if the intent of the law is to avoid a situation where supervisors would mere with the ran4 and!file or where the
supervisors7 labor oranization would represent conflictin interests, then a local supervisors7 union should not be allowed
to affiliate with the national federation of union of ran4!and!file employees where that federation actively participates in
union activity in the company.
xxx xxx xxx
3he prohibition aainst a supervisors7 union joinin a local union of ran4!and!file is replete with jurisprudence. 3he
#ourt emphasizes that the limitation is not confined to a case of supervisors wantin to join a ran4!and!file local union.
3he prohibition extends to a supervisors7 local union applyin for membership in a national federation the members of
which include local unions of ran4!and!file employees. 3he intent of the law is clear especially where, as in the case at
bar, the supervisors will be co!minlin with those employees whom they directly supervise in their own barainin unit.
">tlas (ithoraphic vs. (auesma %-,< S#&>12
4s to Security :uards
Section : of E.G. 'o. ///, enacted on -) .ecember /0+:, repealed the oriinal provisions of >rticle -)< of the
(abor #ode, readin as follows?
>rt. -)<. 8neliibility of security personnel to join any labor oranization. Security uards and other
personnel employed for the protection and security of the person, properties and premises of the employer
shall not be eliible for membership, in any labor oranization.
and substituted it with the followin provision?
>rt. -)<. &iht of employees in the public service.
=y virtue of such repeal and substitution, security uards became eliible for membership in any labor oranization.
"Bhilips 8ndustrial vs. '(&# %G.&. 'o. ++0<*, -< 6une /00-12
Rig/t to Unioni0e 1s+ "!eedo o2 Religion
=oth the #onstitution and &epublic >ct 'o. +*< reconize freedom of association. Section / ":2 of >rticle 888 of the
#onstitution of /0;<, as well as Section * of >rticle 8A of the #onstitution of /0*;, provide that the riht to form
associations or societies for purposes not contrary to law shall not be abrided. Section ; of &epublic >ct 'o. +*<
provides that employees shall have the riht to self!oranization and to form, join of assist labor oranizations of their own
choosin for the purpose of collective barainin and to enae in concerted activities for the purpose of collective
barainin and other mutual aid or protection. $hat the #onstitution and the 8ndustrial Beace >ct reconize and
uarantee is the "riht" to form or join associations. 'otwithstandin the different theories propounded by the different
schools of jurisprudence reardin the nature and contents of a "riht", it can be safely said that whatever theory one
subscribes to, a riht comprehends at least two broad notions, namely? first, (8=E&3J G& 5&EE.GC, i.e., the absence of
leal restraint, whereby an employee may act for himself without bein prevented by law9 and second, BG$E&, whereby
an employee may, as he pleases, join or refrain from 6oinin an association. 8t is, therefore, the employee who should
decide for himself whether he should join or not an association9 and should he choose to join, he himself ma4es up his
mind as to which association he would join9 and even after he has joined, he still retains the liberty and the power to leave
and cancel his membership with said oranization at any time. 8t is clear, therefore, that the &8GH3 3G 6G8' > @'8G'
8'#(@.ES 3HE &8GH3 3G >=S3>8' 5&GC 6G8'8'G >'J @'8G'. 8nasmuch as what both the #onstitution and the
8ndustrial Beace >ct have reconized, and uaranteed to the employee, is the "riht" to join associations of his choice, it
would be absurd to say that the law also imposes, in the same breath, upon the employee the duty to join associations.
3he law does not enjoin an employee to sin up with any association.
3he riht to refrain from joinin labor oranizations reconized by Section ; of the 8ndustrial Beace >ct is, however,
limited. 3he leal protection ranted to such riht to refrain from joinin is withdrawn by operation of law, where a labor
union and an employer have areed on a closed shop, by virtue of which the employer may employ only member of the
collective barainin union, and the employees must continue to be members of the union for the duration of the contract
in order to 4eep their jobs. 3hus Section ) "a2 ")2 of the 8ndustrial Beace >ct, before its amendment by &epublic >ct 'o.
;;<,, provides that althouh it would be an unfair labor practice for an employer "to discriminate in reard to hire or
tenure of employment or any term or condition of employment to encourae or discourae membership in any labor
oranization" the employer is, however, not precluded "from ma4in an areement with a labor oranization to require as
a condition of employment membership therein, if such labor oranization is the representative of the employees". =y
virtue, therefore, of a closed shop areement, before the enactment of &> 'o. ;;<,, if any person, reardless of his
reliious beliefs, wishes to be employed or to 4eep his employment, he must become a member of the collective
barainin union. Hence, the riht of said employee not to join the labor union is curtailed and withdrawn.
3o that all!embracin coverae of the closed shop arranement, &epublic >ct 'o. ;;<, introduced an exception,
when it added to Section ) "a2 ")2 of the 8ndustrial Beace >ct the followin proviso? "but such areement shall not cover
members of any reliious sects which prohibit affiliation of their members in any such labor oranization". &epublic >ct
'o. ;;<, merely excludes ipso jure from the application and coverae of the closed shop areement the employees
belonin to any reliious sects which prohibit affiliation of their members with any labor oranization. $hat the exception
provides, therefore, is that members of said reliious sects cannot be compelled or coerced to join labor unions even
when said unions have closed shop areements with the employers9 that in spite of any closed shop areement,
members of said reliious sects cannot be refused employment or dismissed from their jobs on the sole round that they
are not members of the collective barainin union. 8t is clear, therefore, that the assailed >ct, far from infrinin the
constitutional provision on freedom of association, upholds and reinforces it. 8t does not prohibit the members of said
reliious sects from affiliatin with labor unions. 8t still leaves to said members the liberty and the power to affiliate, or not
to affiliate, with labor unions. 8f, notwithstandin their reliious beliefs, the members of said reliious sects prefer to sin
up with the labor union, they can do so. 8f in deference and fealty to their reliious faith, they refuse to sin up, they can do
so9 the law does not coerce them to join9 neither does the law prohibit them from joinin9 and neither may the employer or
16
labor union compel them to join. &epublic >ct 'o. ;;<,, therefore, does not violate the constitutional provision on freedom
of association. "Aictoriano vs. Elizalde %G.&. 'o. (!-<-):, September /0*)12
@nder Section )"a2, pararaph ), of &epublic >ct 'o. +*< "8B>2, prior to its amendment by &epublic >ct 'o. ;;<,,
the employer was not precluded "from ma4in an areement with a labor oranization to require as a condition of
employment membership therein, if such labor oranization is the representative of the employees." Gn 6une /+, /0:/,
however, &epublic >ct 'o. ;;<, was enacted, introducin an amendment to pararaph ")2 subsection "a2 of section ) of
&epublic >ct 'o. +*<, as follows? ... "but such areement shall not cover members of any reliious sects which prohibit
affiliation of their members in any such labor oranization". "Aictoriano vs. Elizalde %G.&. 'o. (!-<-):, /- September
/0*)12
%argaining Knit
> "barainin unit" has been defined as a roup of employees of a iven employer, comprised of all or less than all
of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer,
indicate to be the best suited to serve the reciprocal rihts and duties of the parties under the collective barainin
provisions of the law. "@niversity of the Bhilippines vs. 5errer!#alleja %G.&. 'o. 0:/+0, /) 6uly /00-12
5actors to be considered in determinin the proper barainin unit?
"/2 $ill of the employees "Globe .octrine29
"-2 >ffinity and unit of employees7 interest, such as substantial similarity of wor4 and duties, or similarity of
compensation and wor4in conditions9
";2 Brior collective barainin history9
")2 Employment status, such as temporary, seasonal probationary employees9 and
"<2 Gther factors? the history, extent and type of oranization of employees in other plants of the same employer, or
other employers in the same industry9 the s4ill, waes, wor4, and wor4in conditions of the employees9 the
desires of the employees9 the eliibility of the employees for membership in the union or unions involved9 and
the relationship between the unit or units proposed and the employer7s oranization, manaement, and
operation.
"ne Company "ne Knion 2olicy
$e see no need for the formation of another union in BH8(3&>'#G. 3he qualified members of the P>S>C> PG
may join the '>C>$@!C85 if they want to be union members, and to be consistent with the one!union, one!company
policy of the .epartment of (abor and Employment, and the laws it enforces. >s held in the case of General &ubber and
5ootwear #orp. v. =ureau of (abor &elations "/<< S#&> -+; %/0+*12?
... 8t has been the policy of the =ureau to encourae the formation of an employer unit 7unless
circumstances otherwise require. 3he proliferation of unions in an employer unit is discouraed as a matter of
policy unless there are compellin reasons which would deny a certain class of employees the riht to self!
oranization for purposes of collective barainin. 3his case does not fall squarely within the exception.
xxx xxx xxx
8t is natural in almost all fairly sized companies to have roups of wor4ers discharin different functions. 'o
company could possibly have all employees performin exactly the same wor4. Aariety of tas4s is to be expected. 8t would
not be in the interest of sound labor!manaement relations if each roup of employees assined to a specialized function
or section would decide to brea4 away from their fellow!wor4ers and form their own separate barainin unit. $e cannot
allow one unit for typists and cler4s, one unit for accountants, another unit for messeners and drivers, and so on in
needless profusion. $here shall the line be drawnQ 3he questioned decision of the public respondent can only lead to
confusion, discord and labor strife.
"Bhiltranco Service Enterprises vs. =(& %G.&. 'o. +<;);, -+ 6une /0+012
LABOR OR&ANI)ATIONS
(abor Granization,
"(abor oranization" means any union or association of employees which exists in whole or in part for the
purpose of collective barainin or of dealin with employers concernin terms and conditions of employment.
">rticle -/- "2 of the (abor #ode2
(eitimate (abor Granization,
"(eitimate labor oranization" means any labor oranization duly reistered with the .epartment of (abor and
Employment, and includes any branch or local thereof. ">rticle -/- "h2 of the (abor #ode2
Registration Re6uirement
8n B>5(@ vs. Sec. of (abor, -* S#&> ),, $e had occasion to interpret Section -; of &.>. 'o. +*< "8ndustrial Beace
>ct2 requirin of labor unions reistration by the .epartment of (abor in order to qualify as "(EG838C>3E (>=G&
G&G>'8R>38G'," and $e said?
3he theory to the effect that Section -; of &epublic >ct 'o. +*< unduly curtails the freedom of assembly
and association uaranteed in the =ill of &ihts is devoid of factual basis. 3he reistration prescribed in
pararaph "b2 of said section /* is not a limitation to the riht of assembly or association, which may be
exercised with or without said reistration. 3he latter is merely a condition sine qua non for the acquisition of
leal personality by labor oranizations, associations or unions and the possession of the 7rihts and
privilees ranted by law to leitimate labor oranizations.7 3he #onstitution does not uarantee these rihts
and privilees, much less said personality, which are mere statutory creations, for the possession and
exercise of which reistration is required to protect both labor and the public aainst abuses, fraud, or
impostors who pose as oranizers, althouh not truly accredited aents of the union they purport to
represent. Such requirement is a valid exercise of the police power, because the activities in which labor
oranizations, associations and union or wor4ers are enaed affect public interest, which should be
protected.
Simply put, the >mio Employees @nion "8ndependent2 $hich petitioners claim to represent, not bein a leitimate
labor oranization, may not validly present representation issues. 3herefore, the act of petitioners cannot be considered a
leitimate exercise of their riht to self!oranization. Hence, $e affirm and reiterate the rationale explained in Bhil
17
>ssociation of 5ree (abor @nions vs. Sec. of (abor case, supra, in order to protect leitimate labor and at the same time
maintain discipline and responsibility within its ran4s. "Aillar vs. 8ncion %G.&. 'o. (!<,-+;!+), -, >pril /0+;12
Grdinarily, a labor oranization acquires leitimacy only upon reistration with the =(&. @nder >rticle -;)
"&equirements of &eistration2?
>ny applicant labor oranization, association or roup of unions or wor4ers shall acquire leal personality and shall be
entitled to the rihts and privilees ranted by law to leitimate labor oranizations upon issuance of the certificate of
reistration based on the followin requirements?
"a2 5ifty!pesos "B<,.,,2 reistration fee9
"b2 3he names of its officers, their addresses, the principal address of the labor oranization, the minutes of
the oranizational meetin and the list of the wor4ers who participated in such meetins9
"c2 3he names of all its members comprisin at least twenty -,S percent of all the employees in the
barainin unit where it see4 to operate9
"d2 8f the applicant has been in existence for one or more years, copies , of its annual financial reports9 and
"e2 5our copies of the constitution and by!laws of the applicant union, the minutes of its adoption or ratification
and the list of the members who participated in it.
xxx xxx xxx
>bsent compliance with these mandatory requirements, the local or chapter does not become a leitimate labor
oranization.
"Broressive .evelopment vs. Secretary %G.&. 'o. 0:)-<, ,) 5ebruary /00-12
=y virtue of .EB>&3CE'3 G&.E& 'G. 0, SE&8ES G5 /00*, however, the documents needed to be submitted by a
local or chapter have been reduced to the followin?
"a2 > charter certificate issued by the federation or national union indicatin the creation or establishment of the
localDchapter9
"b2 3he names of the localDchapter7s officers, their addresses, and the principal office of the localDchapter9
"c2 3he localDchapter7s constitution and by!laws9 provided that where the localDchapter7s constitution and by!
laws is the same as that of the federation or national union, this fact shall be indicated accordinly.
>ll the foreoin supportin requirements shall be certified under oath by the Secretary or 3reasurer of the
localDchapter and attested by its Bresident.
Since .epartment Grder 'o. 0 has done away with the submission of boo4s of account as a requisite for reistration,
Bapalain7s only recourse now is to have said order declared null and void. 8t premises its case on the principles laid
down in Broressive and Brotection 3echnoloy. 5irst, Bapalain maintains that .epartment Grder 'o. 0 is illeal,
alleedly because it contravenes the above!mentioned rulins of this #ourt. #itin >rticle + of the #ivil #ode, which
provides that %j1udicial decisions applyin or interpretin the laws or the #onstitution shall form a part of the leal system
of the Bhilippines," Bapalain declares the two cases part of the law of the land which, under the third pararaph of >rticle
* of the #ivil #ode, may not be supplanted by mere reulation.
"Bapalain Haulers, 8nc. vs. 3rajano %G.&. 'o. /;;-/<, /< 6uly /00012
Role of Constitution and %y-a+s
H%31he #onstitution and =y!laws of an oranization serve as a contract that binds its members.I "Gca vs. 3rajano
%G.&. 'o. *:/+0, ,+ >uust /00/12
"3he labor oranization owes its personality to the state, and when such personality was ranted, it was ranted under the
conditions laid down in the documentary requirements submitted. 3he constitution and by!laws of the oranization are part
and parcel of the documents submitted, hence the terms and conditions set forth therein must be complied with.2
$hen the #onstitution and by!laws of both unions dictated the remedy for intra!union dispute, such as petitioner7s
complaint aainst private respondents for unauthorized or illeal disbursement of unions funds, this should be resorted to
before recourse can be made to the appropriate administrative or judicial body, not only to ive the rievance machinery or
appeals7 body of the union the opportunity to decide the matter by itself, but also to prevent unnecessary and premature resort
to administrative or judicial bodies. 3hus, a party with an administrative remedy must not merely initiate the prescribed
administrative procedure to obtain relief, but also pursue it to its appropriate conclusion before see4in judicial intervention.
3his rule clearly applies to the instant case. 3he underlyin principle of the rule on exhaustion of administrative remedies rests
on the presumption that when the administrative body, or rievance machinery, as in this case, is afforded a chance to pass
upon the matter, it will decide the same correctly. Betitioner7s premature invocation of public respondent7s intervention is fatal to
his cause of action.
Evidently, when petitioner brouht before the .G(E his complaint charin private respondents with unauthorized and
illeal disbursement of union funds, he overloo4ed or deliberately inored the fact that the same is clearly dismissible for non!
exhaustion of administrative remedies. 3hus, public respondent =ienvenido E. (auesma, in dismissin petitioner7s complaint,
committed no rave abuse of discretion.
".iamonon vs. .G(E %G.&. 'o. /,+0</, ,* Carch -,,,12
Right of ocal to Disaffiliate from the 'ederation
3he riht of a local union to disaffiliate from its mother federation is well!settled. > local union, bein a separate and
voluntary association, is free to serve the interest of all its members includin the freedom to disaffiliate when
circumstances warrant. 3his riht is consistent with the constitutional uarantee of freedom of association "Aol4schel
(abor @nion v. =ureau of (abor &elations, 'o. (!)<+-), 6une /0, /0+<, /;* S#&> )-2.
xxx xxx xxx
3he inclusion of the word '>3@ after the name of the local union 3HE@ in the reistration with the .epartment of
(abor is merely to stress that the 3HE@ is '>3@7s affiliate at the time of the reistration. 8t does not mean that the said
local union cannot stand on its own. 'either can it be interpreted to mean that it cannot pursue its own interests
independently of the federation. > local union owes its creation and continued existence to the will of its members and not
to the federation to which it belons.
$hen the local union withdrew from the old federation to join a new federation, it was merely exercisin its primary
riht to labor oranization for the effective enhancement and protection of common interests. 8n the absence of
enforceable provisions in the federation7s constitution preventin disaffiliation of a local union a local may sever its
relationship with its parent "Beople7s 8ndustrial and #ommercial Employees and $or4ers Granization "55$2 v. Beople7s
8ndustrial and #ommercial #orporation, 'o. ;*:+*, Carch /<, /0+-, //- S#&> )),2.
xxx xxx xxx
5urther, there is no merit in the contention of the respondents that the act of disaffiliation violated the union security
clause of the #=> and that their dismissal as a consequence thereof is valid. > perusal of the collective barainin
areements shows that the 3HE@!'>3@, and not the '>3@ federation, was reconized as the sole and exclusive
collective barainin aent for all its wor4ers and employees in all matters concernin waes, hours of wor4 and other
terms and conditions of employment "pp. ::*!*,:, &ollo2. >lthouh '>3@ was desinated as the sole barainin aent in
18
the chec4!off authorization form attached to the #=>, this simply means it was actin only for and in behalf of its affiliate.
3he '>3@ BGSSESSE. 3HE S3>3@S G5 >' >GE'3 $H8(E 3HE (G#>( @'8G' &EC>8'E. 3HE =>S8#
B&8'#8B>( @'8G' $H8#H E'3E&E. 8'3G #G'3&>#3 $83H 3HE &ESBG'.E'3 #GCB>'J. $hen the 3HE@
disaffiliated from its mother federation, the former did not lose its leal personality as the barainin union under the #=>.
"3ropical Hut Employees @nion vs. 3ropical Hut %/+/ S#&> /*;, /00,12
CERTI"ICATION ELECTIONS
&ature of
8t is thus of the very essence of the reime of industrial democracy souht to be attained throuh the collective
barainin process that there be no obstacle to the freedom 8dentified with the exercise of the riht to self!oranization.
(abor is to be represented by a union that can express its collective will. 8n the event, and this is usually the case, that
there is more than one such roup fihtin for that privilee, a certification election must be conducted. 3hat is the
teachin of a recent decision, under the new (abor #ode, @nited Employees @nion of Gelmart 8ndustries v. 'oriel. 3here
is this relevant excerpt? "3he institution of collective barainin is, to recall #ox a prime manifestation of industrial
democracy at wor4. 3he two parties to the relationship, labor and manaement, ma4e their own rules by comin to terms.
3hat is to overn themselves in matters that really count. >s labor, however, is composed of a number of individuals, it is
indispensable that they be represented by a labor oranization of their choice. 3hus may be discerned how crucial is a
certification election. So our decisions from the earliest case of B(.3 Employees @nion v. B(.3 #o. 5ree 3elephone
$or4ers @nion to the latest, Bhilippine #ommunications Electronics O Electricity $or4ers7 5ederation "B#$52 v. #ourt of
8ndustrial &elations, have made clear." >n even later pronouncement in Bhilippine >ssociation of 5ree (abor @nions v.
=ureau of (abor &elations spea4s similarly? "Betitioner thus appears to be woefully lac4in in awareness of the
sinificance of a certification election for the collective barainin process. 8t is the fairest and most effective way of
determinin which labor oranization can truly represent the wor4in force. 8t is a fundamental postulate that the will of the
majority, if iven expression in an honest election with freedom on the part of the voters to ma4e their choice, is
controllin. 'o better device can assure the institution of industrial democracy with the two parties to a business
enterprise, manaement and labor, establishin a reime of self rule." "5G83>5 vs. 'oriel %G.&. 'o. (!)/0;*, ,: 6uly
/0*:12
8n any case, this #ourt notes that it is petitioner, the employer, which has offered the most tenacious resistance to
the holdin of a certification election amon its monthly!paid ran4!and!file employees. 3his must not be so, for the choice
of a collective barainin aent is the sole concern of the employees. 3he only exception to this rule is where the
employer has to file the petition for certification election pursuant to >rticle -<+ of the (abor #ode because it was
requested to barain collectively, which exception finds no application in the case before us. 8ts role in a certification
election has aptly been described in 3rade @nions of the Bhilippines and >llied Services "3@B>S2 v. 3rajano, as that of a
mere by!stander. 8t has no leal standin in a certification election as it cannot oppose the petition or appeal the Ced!
>rbiter7s orders related thereto. >n employer that involves itself in a certification election lends suspicion to the fact it
wants to create a company union. 3his #ourt should be the last aency to lend support to such an attempt at interference
with a purely internal affair of labor.
$hile employers may rihtfully be notified or informed of petitions of such nature, they should not, however, be
considered parties thereto with the concomitant riht to oppose it. Sound policy dictates that they should maintain a strictly
hands!off policy.
8t bears stressin that no obstacle must be placed to the holdin of certification elections, for it is a statutory policy
that should not be circumvented. 3he certification election is the most democratic and expeditious method by which the
laborers can freely determine the union that shall act as their representative in their dealins with the establishment where
they are wor4in. 8t is the appropriate means whereby controversies and disputes on representation may be laid to rest,
by the unequivocal vote of the employees themselves. 8ndeed, it is the 4eystone of industrial democracy. "San Ciuel vs.
(auesma %G.&. 'o. //:/*-, /, Gctober /00:12
3his #ourt has always stressed that a certification proceedin is not a litiation, in the sense in which this term is
ordinarily understood, but an investiation of a non!adversary, fact findin character in which the #ourt of 8ndustrial
&elations plays the part of a disinterested investiator see4in merely to ascertain the desires of employees as to the
matter of their representation "'(@ vs. Go Soc and Sons, -; S#&> );:9 =enuet #onsolidated, 8nc. vs. =obo4 (umber
6ac4 >ss7n., (!//,-0, Cay -;, /0<+9 =ula4ena &estaurant vs. #.8.&., )< S#&> 0<9 (A' Bictures, 8nc. vs. Bhilippine
Cusicians Guild "55$2 and #.8.&., / S#&> /;-2.

3he decision in a certification election case, by the very nature of such proceedin, is not such as to foreclose all
further disputes as to the existence or non!existence of an employer!employee relationship between SS8 and private
respondents herein. 8t is an established doctrine that for res adjudicata to apply, the followin requisites must concur? T..
#learly implicit in these requirements is that the action or proceedins in which is issued the Hprior judmentI that would
operate in bar of a subsequent action between the same parties for the same cause, be adversarial, or contentious as
distinuished from an ex parte hearin or proceedin of which the party see4in relief has iven leal notice to the other
party and afforded the latter an opportunity to contest it, and a certification election is not such a proceedin. >
certification election is not a HlitiationI in the sense in which this term is understood, but a mere investiation of a non!
adversary, fact!findin character, in which the investiatin aency plays the part of a disinterested investiator see4in
merely to ascertain the desires of the employees as to the matter of their representation. "Sandoval Shipyards vs. Bepito
%G.&. 'o. /);)-+, -< 6une -,,/12
%A1erification of a pleadin is a formal, not jurisdictional requisite. Even if verification is lac4in and the pleadin is
formally defective, the courts may dispense with the requirement in the interest of justice and order of correction of the
pleadin accordinly. Generally, technical and riid rules of procedure are not bindin in labor cases9 and this rule is
specifically applied in certification election proceedins, which are non!litiious but merely investiative and non!
adversarial in character "'ational Cines vs. Secretary %G.&. 'o. /,:)):, /: 'ovember /00;12
Direct Certification
$e rule, however, that the direct certification ordered by respondent Secretary is not proper. =y virtue of Executive
Grder 'o. ///, which became effective on Carch ), /0+*, the direct certification oriinally allowed under >rticle -<* of the
(abor #ode has apparently been discontinued as a method of selectin the exclusive barainin aent of the wor4ers.
3his amendment affirms the superiority of the certification election over the direct certification which is no loner available
now under the chane in said provision. "#entral 'eros vs. Secretary %G.&. 'o. 0),)<, /; September /00/12
Loluntary Recognition
3he petition has no merit. Grdinarily, in an unoranized establishment li4e the SC# #alasiao =eer &eion, it is the
union that files a petition for a certification election if there is no certified barainin aent for the wor4ers in the
19
establishment. 8f a union as4s the employer to voluntarily reconize it as the barainin aent of the employees, as the
petitioner did, it in effect as4s the employer to certify it as the barainin representative of the employees a certification
which the employer has no authority to ive, for it is the employees7 preroative "not the employer7s2 to determine whether
they want a union to represent them, and, if so, which one it should be. "8=C vs. 5errer!#alleja %G.&. 'o. +):+<, -;
5ebruary /00,12
Consent Election
3o resolve the issue of union representation at the @niversal &obina 3extile plant, what was areed to be held at the
company7s premises and which became the root of this controversy, was a consent election, not a certification election.
8t is unmista4able that the election held on 'ovember /<, /00, was a consent election and not a certification
election. 8t was an areed one, the purpose bein merely to determine the issue of majority representation of all the
wor4ers in the appropriate collective barainin unit. 8t is a separate and distinct process and has nothin to do with the
import and effort of a certification election. ">lire vs. .e Cesa %G.&. 'o. 0*:--, /0 Gctober /00)12
Ce!ti2ication Election P!oceedings
3he riht to refuse to join or be represented by any labor oranization is reconized not only by law but also in the
rules drawn up for implementation thereof. 3he oriinal &ules on #ertification promulated by the defunct #8& required
that the ballots to be used at a certification election to determine which of two or more competin labor unions would
represent the employees in the appropriate barainin unit should contain, aside from the names of each union, an
alternative choice of the employee votin, to the effect that he desires not to which of two or more competin labor unions
would represent the employees in the appropriate barainin unit should contain, aside from the names of each union, an
alternative choice of the employee votin, to the effect that he desires not to be represented by any union. >nd where only
one union was involved, the ballots were required to state the question ".o you desire to be represented by said unionQ"
as reards which the employees votin would mar4 an appropriate square, one indicatin the answer, "Jes" the other,
"'o."
xxx xxx xxx
$ithal, neither the quoted provision nor any other in the Gmnibus 8mplementin &ules expressly bars the inclusion of
the choice of "'G @'8G'" in the ballots. 8ndeed it is doubtful if the employee7s alternative riht 'G3 to form, join or assist
any labor oranization or withdraw or resin from one may be validly eliminated and he be consequently coerced to vote
for one or another of the competin unions and be represented by one of them. =esides, the statement in the quoted
provision that ""i2f only one union is involved, the voter shall ma4e his cross or chec4 in the square indicatin "JES" or
"'G," is quite clear ac4nowledment of the alternative possibility that the "'G" votes may outnumber the "JES" votes
indicatin that the majority of the employees in the company do not wish to be represented by any union in which case, no
union can represent the employees in collective barainin. >nd whether the prevailin "'G" votes are inspired by
considerations of reliious belief or discipline or not is beside the point, and may not be inquired into at all.
3he purpose of a certification election is precisely the ascertainment of the wishes of the majority of the employees in
the appropriate barainin unit? to be or not to be represented by a labor oranization, and in the affirmative case, by
which particular labor oranization. 8f the results of the election should disclose that the majority of the wor4ers do not
wish to be represented by any union, then their wishes must be respected, and no union may properly be certified as the
exclusive representative of the wor4ers in the barainin unit in dealin with the employer reardin waes, hours and
other terms and conditions of employment. 3he minority employees who wish to have a union represent them in collective
barainin can do nothin but wait for another suitable occasion to petition for a certification election and hope that the
results will be different. 3hey may not and should not be permitted, however, to impose their will on the majority who do
not desire to have a union certified as the exclusive wor4ers7 benefit in the barainin unit upon the plea that they, the
minority wor4ers, are bein denied the riht of self!oranization and collective barainin. >s repeatedly stated, the riht
of self!oranization embraces not only the riht to form, join or assist labor oranizations, but the concomitant, converse
riht 'G3 to form, join or assist any labor union.
"&eyes vs. 3rajano %G.&. 'o. +));;, ,- 6une /00-12
Who can #ote in CE 2roceedings
8n a certification election all ran4!and!file employees in the appropriate barainin unit are entitled to vote. 3his
principle is clearly stated in >rt. -<< of the (abor #ode which states that the "labor oranization desinated or selected by
the majority of the employees in an appropriate barainin unit shall be the exclusive representative of the employees in
such unit for the purpose of collective barainin." #ollective barainin covers all aspects of the employment relation and
the resultant #=> neotiated by the certified union binds all employees in the barainin unit. Hence, all ran4!and!file
employees, probationary or permanent, have a substantial interest in the selection of the barainin representative. 3he
#ode ma4es no distinction as to their employment status as basis for eliibility in supportin the petition for certification
election. 3he law refers to "all" the employees in the barainin unit. >ll they need to be eliible to support the petition is
to belon to the "barainin unit." ">irtime Specialists, 8nc. vs. 5errer!#alleja %G.&. 'o. +,:/-!/:, -0 .ecember /0+012
>t any rate, it is now well!settled that employees who have been improperly laid off but who have a present,
unabandoned riht to or expectation of re!employment, are eliible to vote in certification elections. 3hus, and to repeat, if
the dismissal is under question, as in the case now at bar whereby a case of illeal dismissal andDor unfair labor practice
was filed, the employees concerned could still qualify to vote in the elections. "Bhil. 5ruits >nd Aeetables vs. 3orres %G.&.
'o. 0-;0/, ,; 6uly /00-12
MClose of Election 2roceedingsN
%31he phrase "close of election proceedins" as used in Sections ; and ) of the pertinent 8mplementin &ules refers
to that period from the closin of the polls to the countin and tabulation of the votes as it could not have been the
intention of the 8mplementin &ules to include in the term "close of the election proceedins" the period for the final
determination of the challened votes and the canvass thereof, as in the case at bar which may ta4e a very lon period.
3hus, if a protest can be formalized within five days after a final determination and canvass of the challened votes have
been made, it would result in an undue delay in the affirmation of the employees7 expressed choice of a barainin
representative. "Bhil. 5ruits and Aeetables vs. 3orres %G.&. 'o. 0-;0/, ,; 6uly /00-12
Ba!s to Ce!ti2ication Election
"/2 #G'3&>#3 =>& &@(E ! durin the existence of a collective barainin areement except within the freedom period9
3his rule simply provides that a petition for certification election or a motion for intervention can only be entertained
within sixty days prior to the expiry date of an existin collective barainin areement. Gtherwise put, the rule prohibits
the filin of a petition for certification election durin the existence of a collective barainin areement except within the
freedom period, as it is called, when the said areement is about to expire. 3he purpose, obviously, is to ensure stability in
the relationships of the wor4ers and the manaement by preventin frequent modifications of any collective barainin
20
areement earlier entered into by them in ood faith and for the stipulated oriinal period. ">(@!3@#B v. 3rajano, G.&.
'o. **<;0, >pril /-, /0+0, /*- S#&> )0, citin >3@ v. 3rajano, G.&. 'o. (!*<;-/, -, 6une /0++, /:- S#&> ;/+2
8n order to allow the employer to validly suspend the barainin process theremust be a valid petition for certification
election raisin a leitimate representation issue. Hence, mere filin of a petition for certification election does not ipso
facto justify the neotiation by the employer. 3he petition must comply with the provisions of the (abor #ode and its
8mplementin &ules. 5oremost is that a petition for certification election must be filed durin the sixty day freedom period.
3he H#ontract =ar &uleI under Section ;, &ule L8, =oo4 A, of the Gmnibus &ules 8mplementin the (abor #ode, provides
that? H T. 8f a collective barainin areement has been duly reistered in accordance with >rticle -;/ of the #ode, a
petition for certification election or motion for intervention can only be entertained within sixty ":,2 days prior to the expiry
date of such areement.I 3he rule is based on >rticle -;-, in relation to >rticles -<;, -<;!> and -<: of the (abor #ode.
'o petition for certification election for any representation issue may be filed after the lapse of the sixty!day freedom
period. 3he old #=> is extended until a new #=> shall have been validly executed. Hence, the contract bar rule still
applies. 3he purpose is to ensure stability in the relationship of the wor4ers and the company by preventin frequent
modifications of any #=> earlier entered into by them in ood faith and for the stipulated oriinal period. "#oleio de San
6uan de (etran vs. >ssociation of Employees and 5aculty of (etran %G.&. 'o. /)/*/, /+ September -,,,12
%>1 contract does not operate as a bar to representation proceedins, where it is shown that because of a schism in
the union the contract can no loner serve to promote industrial stability, and the direction of the election is in the interest
of industrial stability as well as in the interest of the employees7 riht in the selection of their barainin representatives.
=asic to the contract bar rule is the proposition that the delay of the riht to select representatives can be justified only
where stability is deemed paramount. Excepted from the contract bar rule are certain types of contracts which do not
foster industrial stability, such as contracts where the 8dentity of the representative is in doubt. >ny stability derived from
such contracts must be subordinated to the employees7 freedom of choice because it does not establish the type of
industrial peace contemplated by the law. "5irestone 3ire O &ubber #ompany Employees @nion vs. Estrella %G.&. 'o. (!
)<</;!/), ,: 6anuary /0*+12
3he receipt by petitioner7s "supervisor" employees of certain benefits under the #=> between =@P(G. and
petitioner is not sufficient to deny the petition for certification election filed by the labor oranization formed by the
excluded employees. 8t is not equivalent to and does not compensate for the denial of the riht of the excluded employees
to self!oranization and collective barainin. $e concur with the findins of the @ndersecretary of (abor, thus?
8t is not disputed that the members of both petitionin unions 'S=B8 and 'ECBE=B8 are excluded from
the coverae of the existin #=> entered into between the respondent =B8 and =@P(G.. 3hus, respondent
=B8 bein privy to the said exclusion has to accept the inescapable consequences of its act of deprivin the
excluded employees of their riht to self!oranization for the purpose of collective barainin. $e find
immaterial and irrelevant the alleation of hereby respondent =B8 to the effect that the benefit bein enjoyed
by the ran4 and file employees covered by the existin #=> are extendedDaccorded to the excluded
employees. 8ndeed, what is crucial and of paramount consideration is the fact that the excluded ran4 and file
employees are afforded the riht to barain collectively.
3he Supreme #ourt in the cases of General &ubber vs. =(& and Canila =ay Spinnin Cills vs. Hon.
Bura 5errer!#alleja, ruled that the employees excluded from the coverae of the #=>, who not bein
excluded by law, have the riht to barain collectively. 5urther, the Supreme #ourt aptly stated that?
3he alleation that some benefits under the existin #=> were extended to the monthly
paid employees, even if true will not preclude them from enterin into a #=> of their own.
'either is the inconvenience that may befall petitioner for havin to administer two #=>s an
excuse for deprivin the monthly paid employees of their constitutionally uaranteed riht to
collective barainin.
3he petition for certification election cannot li4ewise be deterred by the "contract!bar rule," which finds no application
in the present case. 3he petitionin union 'S=B8 is not questionin the majority status of =u4lod as the incumbent
barainin aent of petitioner7s ran4 and file employees. 3he petition for certification election is addressed to a separate
barainin unit the excluded employees of petitioner.
"Cirpuri vs. #> %G.&. 'o. //)<,+, /0 'ovember /00012
"-2 #E&3858#>38G' JE>& =>& &@(E ! within one "/2 year from the date of issuance of declaration of a final certification
election result9 or
8t is evident that the prohibition imposed by law on the holdin of a certification election "within one year from the
date of issuance of declaration of a final certification election result in this case, from 5ebruary -*, /0+/, the date of the
&esolution declarin '>5(@ the exclusive barainin representative of ran4!and!file wor4ers of A8&G' can have no
application to the case at bar. 3hat one!year period!4nown as the "certification year" durin which the certified union is
required to neotiate with the employer, and certification election is prohibited has lon since expired. "Paisahan '
Canaawan vs. 3rajano %G.&. 'o. *<+/,, ,0 September /00/12
";2 .E>.(G#P =>& &@(E ! durin the existence of a barainin deadloc4 to which an incumbent or certified barainin
aent is a party and which had been submitted to conciliation or arbitration or had become the subject of a valid notice of
stri4e or loc4out.
> "deadloc4" is defined as the "counteraction of thins producin entire stoppae? a state of inaction or neutralization
caused by the opposition of persons or of factions "as in overnment or a votin body2? standstill." 3here is a deadloc4 if
there is a "complete bloc4in or stoppae resultin from the action of equal and opposed forces9 as, the deadloc4 of a jury
or leislature." 3he word is synonymous with the word impasse which, within the meanin of the >merican federal labor
laws, "presupposes reasonable efforts at ood faith barainin which, despite noble intentions, does not conclude in a
areement between the parties." ".ivine $ord @niversity of 3acloban vs. Secretary %G. &. 'o. 0/0/<, // September
/00-12
3he .eadloc4 =ar &ule simply provides that a petition for certification election can only be entertained if there is no
pendin barainin deadloc4 submitted to conciliation or arbitration or had become the subject of a valid notice of stri4e or
loc4out. 3he principal purpose is to ensure stability in the relationship of the wor4ers and the manaement. "'>#@S8B!
3@#B vs. 3rajano %G.&. 'o. (!:*)+<, /, >pril /00-12
2re(udicial Ouestion3 When applica!le to certification election proceedings
@nder settled jurisprudence, the pendency of a formal chare of company domination is a prejudicial question that,
until decided, bars proceedins for a certification election, the reason bein that the votes of the members of the
dominated union would not be free. "@nited #C# 3extile $or4ers @nion vs. =(& %G.&. 'o. (!</;;*, -- Carch /0+)12
21
COLLECTI'E BAR&AININ& AND ADMINISTRATION O" A&REEMENT
8t is important to determine whether or not a particular labor oranization is leitimate since leitimate labor
oranizations have exclusive rihts under the law which cannot be exercised by non!leitimate unions, one of which is the
riht to be certified as the exclusive representative of all the employees in an appropriate collective barainin unit for
purposes of collective barainin. "San Ciuel 5oods, 8nc. vs. (auesma %G.&. 'o. //:/*-, /, Gctober /00:12
> collective barainin areement "#=>2, as used in >rticle -<- of the (abor #ode, refers to a contract executed
upon request of either the employer or the exclusive barainin representative incorporatin the areement reached after
neotiations with respect to waes, hours of wor4 and all other terms and conditions of employment, includin proposals
for adjustin any rievances or questions arisin under such areement.
$hile the terms and conditions of a #=> constitute the law between the parties, it is not, however, an ordinary
contract to which is applied the principles of law overnin ordinary contracts. > #=>, as a labor contract within the
contemplation of >rticle /*,, of the #ivil #ode of the Bhilippines which overns the relations between labor and capital, is
not merely contractual in nature but impressed with public interest, thus, it must yield to the common ood. >s such, it
must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic
construction upon it, ivin due consideration to the context in which it is neotiated and purpose which it is intended to
serve. ".avao 8nterated Bort Stevedorin Services vs. >barquez %G.&. 'o. /,-/;-, /0 Carch /00;12
%31he eneral rule laid out in 5ernando vs. >nat (abor @nion "< S#&> -)+ %/0:-1, that a collective barainin
areement is a contract in personam and, therefore, not enforceable aainst the successor!employer, T "E. &azon, 8nc.
vs. Secretary %G.&. 'o. +<+:*, /; Cay /00;12
8t appears that the procedural requirement of filin the #=> within ;, days from date of execution under >rticle -;/
was not met. 3he subject #=> was executed on 'ovember -+, /0+0. 8t was ratified on .ecember +, /0+0, and then filed
with .G(E for reistration purposes on Carch /), /00,. =e that as it may, the delay in the filin of the #=> was
sufficiently explained, i.e., there was an inter!union conflict on who would succeed to the presidency of 8(G!BH8(S. 3he
#=> was reistered by the .G(E only on Cay ), /00,. 8t would be injudicious for us to assume, as what petitioner did,
that the said #=> was filed only on >pril ;,, /00,, or five "<2 days before its reistration, on the unsupported surmise that
it was done to suit the law that enjoins &eional Gffices of .ole to act upon an application for reistration of a #=> within
five "<2 days from its receipt thereof. 8n the absence of any substantial evidence that .G(E officials or personnel, in
collusion with private respondent, had antedated the filin date of the #=>, the presumption on reularity in the
performance of official functions hold.
Core importantly, non!compliance with the cited procedural requirement should not adversely affect the substantive
validity of the #=> between 8(G!BH8(S and the 3ransunion #orporation!Glassware .ivision coverin the company7s ran4
and file employees. > collective barainin areement is more than a contract. 8t is hihly impressed with public interest
for it is an essential instrument to promote industrial peace. Hence, it bears the blessins not only of the employer and
employees concerned but even the .G(E. 3o set it aside on technical rounds is not conducive to the public ood.
"3@#B vs. (auesma, G.&. 'o. 0<,/;, /00)12
D3t4 to Ba!gain Collecti1el4
1eaning of duty to !argain collecti#ely/ - The duty to !argain collecti#ely means the performance of a mutual o!ligation
to meet and con#ene promptly and expeditiously in good faith for the purpose of negotiating an agreement +ith respect to
+ages. hours of +or, and all other terms and any grie#ances or 6uestions arising under such agreement and executing a
contract incorporating such agreements if re6uested !y either party. !ut such duty does not compel any party to agree to
a proposal or to ma,e any concession/ ">rticle -<- of the (abor #ode2
#ollective barainin which is defined as neotiations towards a collective areement, is one of the democratic
framewor4s under the 'ew (abor #ode, desined to stabilize the relation between labor and manaement and to create a
climate of sound and stable industrial peace. 8t is a mutual responsibility of the employer and the @nion and is
characterized as a leal obliation. So much so that >rticle -)0, par. "2 of the (abor #ode ma4es it an unfair labor
practice for an employer to refuse "to meet and convene promptly and expeditiously in ood faith for the purpose of
neotiatin an areement with respect to waes, hours of wor4, and all other terms and conditions of employment
includin proposals for adjustin any rievance or question arisin under such an areement and executin a contract
incorporatin such areement, if requested by either party.
$hile it is a mutual obliation of the parties to barain, the employer, however, is not under any leal duty to initiate
contract neotiation. 3he mechanics of collective barainin is set in motion only when the followin jurisdictional
preconditions are present, namely, "/2 possession of the status of majority representation of the employees7
representative in accordance with any of the means of selection or desination provided for by the (abor #ode9 "-2 proof
of majority representation9 and ";2 a demand to barain under >rticle -</, par. "a2 of the 'ew (abor #ode . ... all of which
preconditions are undisputedly present in the instant case.
xxx xxx xxx
3he case at bar is not a case of first impression, for in the Herald .elivery #arriers @nion "B>5(@2 vs. Herald
Bublications the rule had been laid down that "unfair labor practice is committed when it is shown that the respondent
employer, after havin been served with a written barainin proposal by the petitionin @nion, did not even bother to
submit an answer or reply to the said proposal. 3his doctrine was reiterated anew in =radman vs. #8& wherein it was
further ruled that "while the law does not compel the parties to reach an areement, it does contemplate that both parties
will approach the neotiation with an open mind and ma4e a reasonable effort to reach a common round of areement.
"Pio4 (oy vs. '(&# %G.&. 'o. (!<);;), -- 6anuary /0+:12
8t is essential to the riht of a putative barainin aent to represent the employees that it be the deleate of a
majority of the employees and, conversely, an employer is under duty to barain collectively only when the barainin
aent is representative of the majority of the employees. > natural consequence of these principles is that the employer
has the riht to demand of the asserted barainin aent proof of its representation of its employees. Havin the riht to
demonstration of this fact, it is not an 7unfair labor practice7 for an employer to refuse to neotiate until the asserted
barainin aent has presented reasonable proof of majority representation. 8t is necessary however, that such demand
be made in ood faith and not merely as a pretext or device for delay or evasion. 3he employer7s riht is however to
reasonable proof. ...
... >lthouh an employer has the undoubted riht to barain with a barainin aent whose authority has been
established, without the requirement that the barainin aent be officially certified by the '(&= as such, if the informally
presented evidence leaves a real doubt as to the issue, the employer has a riht to demand a certification and to refuse to
neotiate until such official certification is presented."
"(>P>S vs. Carcelo Enterprises %G.&. 'o. (!;+-<+, /0 'ovember /0+-1 citin &othenber2
$e hold that there existed no duty to barain collectively with the complainant (>P>S on the part of said companies.
>nd proceedin from this basis, it follows that all acts instiated by complainant (>P>S such as the filin of the 'otice of
22
stri4e on 6une /;, /0:* "althouh later withdrawn2 and the 7two stri4es of September ), /0:* and 'ovember *, /0:* were
calculated , desined and intended to compel the respondent Carcelo #ompanies to reconize or barain with it
notwithstandin that it was an uncertified union, or in the case of respondent Carcelo 3ire and &ubber #orporation, to
barain with it despite the fact that the C@E$> of Baulino (azaro vas already certified as the sole barainin aent in
said respondent company. 3hese concerted activities executed and carried into effect at the instiation and motivation of
(>P>S ire all illeal and violative of the employer7s basic riht to barain collectively only with the representative
supported by the majority of its employees in each of the barainin units. 3his #ourt is not unaware of the present
predicament of the employees involved but much as $e sympathize with those who have been misled and so lost their
jobs throuh hasty, ill!advised and precipitate moves, $e rule that the facts neither substantiate nor support the findin
that the respondent Carcelo #ompanies are uilty of unfair labor practice. "(>P>S vs. Carcelo Enterprises %G.&. 'o. (!
;+-<+, /0 'ovember /0+-12
%81n a situation li4e this where the issue of leitimate representation in dispute is viewed for not only by one leitimate
labor oranization but two or more, there is every equitable round warrantin the holdin of a certification election. 8n this
way, the issue as to who is really the true barainin representative of all the employees may be firmly settled by the
simple expedient of an election. "B>5(@ vs. 3he =ureau of (abor &elations %:0 S#&> /;-12
3he inference that respondents did not refuse to barain collectively with the complainin union because they
accepted some of the demands while they refused the others even leavin open other demands for future discussion is
correct, especially so when those demands were discussed at a meetin called by respondents themselves precisely in
view of the letter sent by the union on >pril -0, /0:,. 8t is true that under Section /) of &epublic >ct +*< whenever a
party serves a written notice upon the employer ma4in some demands the latter shall reply thereto not later than /,
days from receipt thereof, but this rendition is merely procedural and as such its non!compliance cannot be deemed to
be an act of unfair labor practice. 3he fact is that respondents did not inore the letter sent by the union so much so that
they called a meetin to discuss its demands, as already stated elsewhere. "'ational @nion of &estaurant $or4ers vs.
#8& %G.&. 'o. (!-,,)), ;, >pril /0:)12
Duration of a C%4
4rt/ <?=-4/ Terms of a Collecti#e %argaining 4greement/ 4ny Collecti#e %argaining 4greement that the
parties may enter into shall. insofar as the representation aspect is concerned. !e for a term of fi#e G?H
years/ &o petition 6uestioning the ma(ority status of the incum!ent !argaining agent shall !e entertained
and no certification election shall !e conducted !y the Department of a!or and Employment outside of
the sixty-day period immediately !efore the date of expiry of such fi#e year term of the Collecti#e
%argaining 4greement/ 4ll other pro#isions of the Collecti#e %argaining 4greement shall !e renegotiated
not later than three G=H years after its execution/ 4ny agreement on such other pro#isions of the Collecti#e
%argaining 4greement entered into +ithin six G@H months from the date of expiry of the term of such other
pro#isions as fixed in such Collecti#e %argaining 4greement. shall retroact to the day immediately
follo+ing such date/ If any such agreement is entered into !eyond six months. the parties shall agree on
the duration of retroacti#ity thereof/ In case of a deadloc, in the renegotiation of the collecti#e !argaining
agreement. the parties may exercise their rights under this Code/
>rticle -<;!> is a new provision. 3his was incorporated by Section -/ of &epublic >ct 'o. :*/< "the Herrera!Aeloso
(aw2 which too4 effect on Carch -/, /0+0. 3his new provision states that the #=> has a term of five "<2 years instead of
three years, before the amendment of the law as far as the representation aspect is concerned. >ll other provisions of the
#=> shall be neotiated not later than three ";2 years after its execution. 3he "representation aspect" refers to the identity
and majority status of the union that neotiated the #=> as the exclusive barainin representative of the appropriate
barainin unit concerned. ">ll other provisions" simply refers to the rest of the #=>, economic as well as non!economic
provisions, except representation.
xxx xxx xxx
5rom the aforesaid discussions, the leislators were more inclined to have the period of effectivity for three ";2 years
insofar as the economic as well as non!economic provisions are concerned, except representation.
Gbviously, the framers of the law wanted to maintain industrial peace and stability by havin both manaement and
labor wor4 harmoniously toether without any disturbance. 3hus, no outside union can enter the establishment within five
"<2 years and challene the status of the incumbent union as the exclusive barainin aent. (i4ewise, the terms and
conditions of employment "economic and non!economic2 cannot be questioned by the employers or employees durin the
period of effectivity of the #=>. 3he #=> is a contract between the parties and the parties must respect the terms and
conditions of the areement. 'otably, the framers of the law did not ive a fixed term as to the effectivity of the terms and
conditions of employment. 8t can be leaned from their discussions that it was left to the parties to fix the period.
"SC# vs. #onfesor %G.&. 'o. ///-:-, /0 September /00:12
3he sinin of the #=> is not determinative of the question whether "the areement was entered into within six
months from the date of expiry of the term of such other provisions as fixed in such collective barainin areement"
within the contemplation of >rt. -<;!>.
>s already stated, on 'ovember /-, /00-, the @nion sent the #ompany a notice of deadloc4 in view of their inability
to reconcile their positions on the main issues, particularly on waes. 3he @nion filed a notice of stri4e. However, on
.ecember /+, /00-, in a conference called by the '#C=, the @nion and the #ompany areed on a number of provisions
of the #=>, includin the provision on wae increase, leavin only the issue of retirement to be threshed out. 8n time, this,
too, was settled, so that in his record of the 6anuary /), /00; conference, the Ced!>rbiter noted that "the issues raised by
the notice of stri4e had been settled and said notice is thus terminated." 8t would therefore seem that at that point, there
was already a meetin of the minds of the parties, which was before the 5ebruary /00; end of the six!month period
provided in >rt. -<;!>.
3he fact that no areement was then sined is of no moment. >rt. -<;!> refers merely to an "areement" which,
accordin to =lac47s (aw .ictionary is "a comin toether of minds9 the comin toether in accord of two minds on a iven
proposition." 3his is similar to >rt. /;,< of the #ivil #ode7s definition of "contract" as "a meetin of minds between two
persons."
3he two terms, "areement" and "contract," are indeed similar, althouh the former is broader than the latter because
an areement may not have all the elements of a contract. >s in the case of contracts, however, areements may be oral
or written. Hence, even without any written evidence of the #=> made by the parties, a valid areement existed in this
case from the moment the minds of the parties met on all matters they set out to discuss.
"Cindanao 3erminal O =ro4erae vs. &oldan!#onfessor %G.&. 'o. ///+,0, ,<Cay /00*12
3he #ourt in the 6anuary -*, /000 .ecision, stated that the #=> shall be "effective for a period of - years counted
from .ecember -+, /00: up to .ecember -*, /000." Barenthetically, this actually covers a three!year period. (abor laws
are silent as to when an arbitral award in a labor dispute where the Secretary had assumed jurisdiction by virtue of >rticle
-:; "2 of the (abor #ode shall retroact. 8n eneral, a #=> neotiated within six months after the expiration of the existin
#=> retroacts to the day immediately followin such date and if areed thereafter, the effectivity depends on the
areement of the parties. Gn the other hand, the law is silent as to the retroactivity of a #=> arbitral award or that ranted
23
not by virtue of the mutual areement of the parties but by intervention of the overnment. .espite the silence of the law,
the #ourt rules herein that #=> arbitral awards ranted after six months from the expiration of the last #=> shall retroact
to such time areed upon by both employer and the employees or their union. >bsent such an areement as to
retroactivity, the award shall retroact to the first day after the six!month period followin the expiration of the last day of the
#=> should there be one. 8n the absence of a #=>, the Secretary7s determination of the date of retroactivity as part of his
discretionary powers over arbitral awards shall control.
8t is true that an arbitral award cannot per se be cateorized as an areement voluntarily entered into by the parties
because it requires the interference and imposin power of the State thru the Secretary of (abor when he assumes
jurisdiction. However, the arbitral award can be considered as an approximation of a collective barainin areement
which would otherwise have been entered into by the parties. 3he terms or periods set forth in >rticle -<;!> pertains
explicitly to a #=>. =ut there is nothin that would prevent its application by analoy to an arbitral award by the Secretary
considerin the absence of an applicable law. @nder >rticle -<;!>? ""82f any such areement is entered into beyond six
months, the parties shall aree on the duration of retroactivity thereof." 8n other words, the law contemplates retroactivity
whether the areement be entered into before or after the said six!month period. 3he areement of the parties need not
be cateorically stated for their acts may be considered in determinin the duration of retroactivity. 8n this connection, the
#ourt considers the letter of petitioner7s #hairman of the =oard and its Bresident addressed to their stoc4holders, which
states that the #=> "for the ran4!and!file employees coverin the period .ecember /, /00< to 'ovember ;,, /00* is still
with the Supreme #ourt," as indicative of petitioner7s reconition that the #=> award covers the said period. Earlier,
petitioner7s neotiatin panel transmitted to the @nion a copy of its proposed #=> coverin the same period inclusive. 8n
addition, petitioner does not dispute the alleation that in the past #=> arbitral awards, the Secretary ranted retroactivity
commencin from the period immediately followin the last day of the expired #=>. 3hus, by petitioner7s own actions, the
#ourt sees no reason to retroact the subject #=> awards to a different date. 3he period is herein set at two "-2 years from
.ecember /, /00< to 'ovember ;,, /00*.
"CE&>(#G vs. Nuisumbin %G.&. 'o. /-*<0+, -- 5ebruary -,,,12
Effect of 'ailure to %argain Collecti#ely
> thorouh study of the records reveals that there was no "reasonable effort at ood faith barainin" specially on
the part of the @niversity. 8ts indifferent towards collective barainin inevitably resulted in the failure of the parties to
arrive at an areement. >s it was evident that unilateral moves were bein underta4en only by the .$@E@!>(@, there
was no "7counteraction" of forces or an impasse to spea4 of. $hile collective barainin should be initiated by the union,
there is a correspondin responsibility on the part of the employer to respond in some manner to such acts. 3his is a clear
from the provisions of the (abor #ode >rt -<,"a2 of which states?
xxx xxx xxx
Hence, petitioner7s contention that the .$@E@!>(@7s proposals may not be unilaterally imposed on it on the round
that a collective barainin areement is a contract wherein the consent of both parties is indispensable is devoid of merit.
> similar arument had already been disrearded in the case of Pio4 (oy v. '(&#, where we upheld the order of the
'(&# declarin the unions draft #=> proposal as the collective areement which should overn the relationship between
the parties. Pio4 (oy v. '(&# is applicable in the instant case considerin that the fact therein have also been indubitably
established in this case. 3hese factors are? "a2 the union is the duly certified barainin aent9 "b2 it made a definite
request to barain submitted its collective barainin proposals, and "c2 the @niversity made no further proposal
whatsoever. >s we said in Pio4 (oy v. '(&#, %a1 company7s refusal to ma4e counter proposal if considered in relation to
the entire barainin process, may indicate bad faith and this is especially true where the @nion7s request for a counter
proposal is left unanswered." Coreover, the #ourt added in the same case that "it is not obliatory upon either side of a
labor controversy to precipitately accept or aree to the proposal of the other. =ut an errin party should not be tolerated
and allowed with impunity to resort to schemes feinin neotiations by oin throuh empty estures."
".ivine $ord @niversity of 3acloban vs. Secretary %G. &. 'o. 0/0/<, // September /00-12
4ny pro#ision in the C%4 is deemed to !e a !ilateral agreement. hence su!(ect to negotiation
3he company7s contention that its retirement plan is non!neotiable, is not well!ta4en. 3he '(&# correctly observed
that the inclusion of the retirement plan in the collective barainin areement as part of the pac4ae of economic benefits
extended by the company to its employees to provide them a measure of financial security after they shall have ceased to
be employed in the company, reward their loyalty, boost their morale and efficiency and promote industrial peace, ives
"> #G'SE'S@>( #H>&>#3E&" to the plan so that it may not be terminated or modified at will by either party "'estle
Bhil., 8nc. vs. '(&# %G.&. 'o. 0/-;/, ,) 5ebruary /00/1
ADMINISTRATION O" THE CBA5 &RIE'ANCE AND 'OLUNTARY ARBITRATION
#GCB@(SG&J >&=83&>38G' is a system whereby the parties to a dispute are compelled by the overnment to
foreo their riht to stri4e and are compelled to accept the resolution of their dispute throuh arbitration by a third party.
3he essence of arbitration remains since a resolution of a dispute is arrived at by resort to a disinterested third party
whose decision is final and bindin on the parties, but in compulsory arbitration, such a third party is normally appointed
by the overnment.
@nder AG(@'3>&J >&=83&>38G', on the other hand, referral of a dispute by the parties is made, pursuant to a
voluntary arbitration clause in their collective areement, to an impartial third person for a final and bindin resolution.
8deally, arbitration awards are supposed to be complied with by both parties without delay, such that once an award has
been rendered by an arbitrator, nothin is left to be done by both parties but to comply with the same. >fter all, they are
presumed to have freely chosen arbitration as the mode of settlement for that particular dispute. Bursuant thereto, they
have chosen a mutually acceptable arbitrator who shall hear and decide their case. >bove all, they have mutually areed
to de bound by said arbitrator7s decision.
8n the Bhilippine context, the parties to a #=> are required to include therein provisions for a machinery for the
resolution of rievances arisin from the interpretation or implementation of the #=> or company personnel policies. 5or
this purpose, parties to a #=> shall name and desinate therein a voluntary arbitrator or a panel of arbitrators, or include
a procedure for their selection, preferably from those accredited by the '#C=. >rticle -:/ of the (abor #ode accordinly
provides for exclusive oriinal jurisdiction of such voluntary arbitrator or panel of arbitrators over "/2 the interpretation or
implementation of the #=> and "-2 the interpretation or enforcement of company personnel policies. >rticle -:-
authorizes them, but only upon areement of the parties, to exercise jurisdiction over other labor disputes.
"(uzon .evelopment =an4 vs. >ssociation %G.&. 'o. /-,;/0, ,: Gctober /00<12
3he terms and conditions of a collective barainin contract constitute the law between the parties. 3hose who are
entitled to its benefits can invo4e its provisions. 8n the event that an obliation therein imposed is not fulfilled, the
arieved party has the riht to o to court for redress. 'or does it suffice as a defense that the claim is made on behalf of
non!members of intervenor >(@, for it is a well!settled doctrine that the benefits of a collective barainin areement
extend to the laborers and employees in the collective barainin unit, includin those who do not belon to the chosen
barainin labor oranization. >ny other view would be a discrimination on which the law frowns. 8t is appropriate that
such should be the case. >s was held in @nited &estauror7s Employees v. 3orres, this #ourt spea4in throuh 6ustice
24
Sanchez, "the riht to be the exclusive representative of all the employees in an appropriate collective barainin unit is
vested in the labor union 7desinated or selected7 for such purpose 7by the majority of the employees7 in the unit
concerned." 8f it were otherwise, the hihly salutory purpose and objective of the collective barainin scheme to enable
labor to secure better terms in employment condition as well as rates of pay would be frustrated insofar as non!members
are concerned, deprived as they are of participation in whatever advantaes could thereby be ained. 3he labor union
that ets the majority vote as the exclusive barainin representative does not act for its members alone. 8t represents all
the employees in such a barainin unit. 8t is not to be induled in any attempt on its part to disreard the rihts of non!
members. Jet that is what intervenor labor union was uilty of, resultin in the complaint filed on behalf of the laborers,
who were in the ran4s of plaintiff Cactan (abor @nion. "Cactan $or4ers @nion vs. .on &amon >boitiz %G.&. 'o. (!;,-)/,
/0*-12
8n formulatin the "substitutionary" doctrine, the only consideration involved was the employees7 interest in the
existin barainin areement. 3he aent7s interest never entered the picture. 8n fact, the justification for said doctrine
was?
... that the majority of the employees, as an entity under the statute, is the true party in interest to the
contract, holdin rihts throuh the aency of the union representative. 3hus, any exclusive interest
claimed by the aent is defeasible at the will of the principal....
Stated otherwise, the "S@=S383@38G'>&J" .G#3&8'E only provides that the employees cannot revo4e the validly
executed collective barainin contract with their employer by the simple expedient of chanin their barainin aent.
>nd it is in the liht of this that the phrase "said new aent would have to respect said contract" must be understood. 8t
only means that the employees, thru their new barainin aent, cannot renee on their collective barainin contract,
except of course to neotiate with manaement for the shortenin thereof.
3he "substitutionary" doctrine, therefore, cannot be invo4ed to support the contention that a newly certified collective
barainin aent automatically assumes all the personal underta4ins li4e the no!stri4e stipulation here in the collective
barainin areement made by the deposed union. $hen ==$@ bound itself and its officers not to stri4e, it could not
have validly bound also all the other rival unions existin in the barainin units in question. ==$@ was the aent of the
employees, not of the other unions which possess distinct personalities. 3o consider @'8G' contractually bound to the
no!stri4e stipulation would therefore violate the leal maxim that res inter alios nec prodest nec nocet. "=enuet vs. =#8
Employees %G.&. 'o. (!-)*//, ;, >pril /0:+12
3he reference to a Grievance Cachinery and Aoluntary >rbitrators for the adjustment or resolution of rievances
arisin from the interpretation or implementation of their #=> and those arisin from the interpretation or enforcement of
company personnel policies is mandatory. 3he law rants to voluntary arbitrators oriinal and exclusive jurisdiction to hear
and decide all unresolved rievances arisin from the interpretation or implementation of the #ollective =arainin
>reement and those arisin from the interpretation or enforcement of company personnel policies ">rticle -:/ of the
(abor #ode2.
3he procedure introduced in &> :*/< of referrin certain rievances oriinally and exclusively to the rievance
machinery and when not settled at this level, to a panel of voluntary arbitrators outlined in #=>7s does not only include
rievances arisin from the interpretation or implementation of the #=> but applies as well to those arisin from the
implementation of company personnel policies. 'o other body shall ta4e conizance of these cases.
xxx xxx xxx
8n the instant case, however, $e hold that the (abor >rbiter and not the Grievance Cachinery provided for in the
#=> has the jurisdiction to hear and decide the complaints of the private respondents. $hile it appears that the dismissal
of the private respondents was made upon the recommendation of BSS(@ pursuant to the union security clause provided
in the #=>, $e are of the opinion that these facts do not come within the phrase "rievances arisin from the
interpretation or implementation of "their2 #ollective =arainin >reement and those arisin from the interpretation or
enforcement of company personnel policies," the jurisdiction of which pertains to the Grievance Cachinery or thereafter,
to a voluntary arbitrator or panel of voluntary arbitrators. >rticle -:, of the (abor #ode on rievance machinery and
voluntary arbitrator states that ""t2he parties to a #ollective =arainin >reement shall include therein provisions that will
ensure the mutual observance of its terms and conditions. 3hey shall establish a machinery for the adjustment and
resolution of rievances arisin from the interpretation or implementation of their #ollective =arainin >reement and
those arisin from the interpretation or enforcement of company personnel policies." 8t is further provided in said article
that the parties to a #=> shall name or desinate their respective representatives to the rievance machinery and if the
rievance is not settled in that level, it shall automatically be referred to voluntary arbitrators "or panel of voluntary
arbitrators2 desinated in advance by the parties. 8t need not be mentioned that the parties to a #=> are the union and the
company. Hence, only disputes involvin the union and the company shall be referred to the rievance machinery or
voluntary arbitrators.
8n the instant case, both the union and the company are united or have come to an areement reardin the
dismissal of private respondents. 'o rievance between them exists which could be brouht to a rievance machinery.
3he problem or dispute in the present case is between the union and the company on the one hand and some union and
non!union members who were dismissed, on the other hand. 3he dispute has to be settled before an impartial body. 3he
rievance machinery with members desinated by the union and the company cannot be expected to be impartial aainst
the dismissed employees. .ue process demands that the dismissed wor4ers rievances be ventilated before an impartial
body. Since there has already been an actual termination, the matter falls within the jurisdiction of the (abor >rbiter.
"Sanyo Bhil. $or4ers @nion!BSS(@ vs. #anizares %G.&. 'o. /,/:/0, ,+ 6uly /00-12
%31ermination cases fall under the oriinal and exclusive jurisdiction of the (abor >rbiter. 8t should be noted, however,
that in the openin there appears the phrase? "Except as otherwise provided under this #ode . . . ." 8t is pararaph "c2 of
the same >rticle which respondent #ommission has erroneously interpreted as ivin the voluntary arbitrator jurisdiction
over the illeal dismissal case.
However, >rticle -/* "c2 should be read in conjunction with >rticle -:/ of the (abor #ode which rants to voluntary
arbitrators oriinal and exclusive jurisdiction to hear and decide all unresolved rievances arisin from the interpretation or
implementation of the collective barainin areement and those arisin from the interpretation or enforcement of
company personel policies. 'ote the phrase "unresolved rievances." 8n the case at bar, the termination of petitioner is
not an unresolved rievance.
3he stance of the Solicitor General in the Sanyo case is totally the reverse of its posture in the case at bar. 8n Sanyo,
the Solicitor General was of the view that a distinction should be made between a case involvin "interpretation or
implementation of #ollective =arainin >reement" or interpretation or "enforcement" of company personel policies, on
the one hand and a case involvin termination, on the other hand. 8t arued that the dismissal of the private respondents
does not involve an "interpretation or implementation" of a #ollective =arainin >reement or "interpretation or
enforcement" of company personel policies but involves "termination." 3he Solicitor General further said that where the
dispute is just in the interpretation, implementation or enforcement stae, it may be referred to the rievance machinery
set up the #ollective =arainin >reement or by voluntary arbitration. $here there was already actual termination, i.e.,
violation of rihts, it is already conizable by the (abor >rbiter. $e fully aree with the theory of the Solicitor General in
the Sanyo case, which is radically apposite to its position in this case.
25
Coreover, the dismissal of petitioner does not fall within the phrase "rievance arisin from the interpretation or
implementation of collective barainin areement and those arisin from the interpretation or enforcement of company
personel policies," the jurisdiction of which pertains to the rievance machinery or thereafter, to a voluntary arbitrator or
panel of voluntary arbitrators. 8t is to be stressed that under >rticle -:, of the (abor #ode, which explains the function of
the rievance machinery and voluntary arbitrator. ""32he parties to a #ollective =arainin >reement shall include therein
provisions that will ensure the mutual observance of its terms and conditions. 3hey shall establish a machinery for the
adjustment and resolution of rievances arisin from the interpretation or implementation of their #=> and those arisin
from the interpretation or enforcement of company personel policies." >rticle -:, further provides that the parties to a
#=> shall name or desinate their respective representative to the rievance machinery and if the rievance is unsettled
in that level, it shall automatically be refered to the voluntary arbitrators desinated in advance by the parties to a #=> of
the union and the company. 8t can thus be deduced that only disputes involvin the union and the company shall be
referred to the rievance machinery or voluntary arbitrators.
"Caneja vs. '(&# %G.&. 'o. /-),/;, ,< 6une /00+1
8t should be explained that "company personnel policies" are uidin principles stated in broad, lon!rane terms that
express the philosophy or beliefs of an oranization7s top authority reardin personnel matters. 3hey deal with matters
affectin efficiency and well!bein of employees and include, amon others, the procedure in the administration of waes,
benefits, promotions, transfer and other personnel movements which are usually not spelled out in the collective
areement. 3he usual source of rievances, however, are the rules and reulations overnin disciplinary actions.
"Caneja vs. '(&# %G.&. 'o. /-),/;, ,< 6une /00+1
%31he award of a Aoluntary >rbitrator is final and executory after ten "/,2 calendar days from receipt of the award by
the parties. 3here was a time when the award of a Aoluntary >rbitrator relatin to money claims amountin to more than B
/,,,,,,.,, or forty percent "),S2 of the paid!up capital of the employer "whichever was lower2, could be appealed to the
'ational (abor &elations #ommission upon the rounds of "a2 abuse of discretion9 or "b2 ross incompetence, presumably
of the arbitrator. 3his is no loner so today althouh, of course, certiorari will lie in appropriate cases. > petition for
certiorari under &ule :< of the &evised &ules of #ourt will lie only where a rave abuse of discretion or an act without or in
excess of jurisdiction on the part of the Aoluntary >rbitrator is clearly shown. 8t must be borne in mind that the writ of
certiorari is an extraordinary remedy and that certiorari jurisdiction is not to be equated with appellate jurisdiction. 8n a
special civil action of certiorari, the #ourt will not enae in a review of the facts found nor even of the law as interpreted
or applied by the >rbitrator unless the supposed errors of fact or of law are so patent and ross and prejudicial as to
amount to a rave abuse of discretion or an excess de pouvoir on the part of the >rbitrator. 3he (abor #ode and its
8mplementin &ules thus clearly reflect the important public policy of encourain recourse to voluntary arbitration and of
shortenin the arbitration process by renderin the arbitral award non! appealable to the '(&#. 3he result is that a
voluntary arbitral award may be modified and set aside only upon the same rounds on which a decision of the '(&#
itself may be modified or set aside, by this #ourt. "Sime .arby vs. Casalin %G.&. 'o. 0,)-:, /< .ecember /0+012
3he @nion erred in filin a motion for reconsideration of the decision dated 6uly /-, /0++. So did the respondent
Aoluntary >rbitrator in entertainin the motion and vacatin his first decision.
$hen the parties submitted their rievance to arbitration, they expressly areed that the decision of the Aoluntary
>rbitrator would be final, executory and inappealable. 8n fact, even without this stipulation, the first decision had already
become so by virtue of >rticle -:; of the (abor #ode ma4in voluntary arbitration awards or decisions final and executory.
"8mperial 3extile Cills, 8nc. vs. Sampan %G.&. 'o. 0)0:,, ,+ Carch /00;12
e#y3Chec,-"ff
> chec4!off is a process or device whereby the employer, on areement with the union reconized as the proper
barainin representative, or on prior authorization from its employees, deducts union dues or aency fees from the
latter7s waes and remits them directly to the union. 8ts desirability to a labor oranization is quite evident9 by it, it is
assured of continuous fundin. 8ndeed, this #ourt has ac4nowleded that the system of chec4!off is primarily for the
benefit of the union and, only indirectly, of the individual laborers. $hen so stipulated in a collective barainin
areement, or authorized in writin by the employees concerned the (abor #ode and its 8mplementin &ules reconize it
to be the duty of the employer to deduct sums equivalent to the amount of union dues from the employees7 waes for
direct remittance to the union, in order to facilitate the collection of funds vital to the role of the union as representative of
employees in a barainin unit if not, indeed, to its very existence. >nd it may be mentioned in this connection that the
riht to union dues deducted pursuant to a chec4!off, pertains to the local union which continues to represent the
employees under the terms of a #=>, and not to the parent association from which it has disaffiliated.
3he leal basis of chec4!off is thus found in statute or in contract. Statutory limitations on chec4!offs enerally
require written authorization from each employee to deduct waes9 however, a resolution approved and adopted by a
majority to the union members at a eneral meetin will suffice when the riht to chec4!off has been reconized by the
employer, includin collection of reasonable assessments in connection with mandatory activities of the union, or other
special assessments and extraordinary fees.
>uthorization to effect a chec4!off of union dues is co!terminous with the union affiliation or membership of
employees. Gn the other hand, the collection of aency fees in an amount equivalent to union dues and fees, from
employees who are not union members, is reconized by >rticle -)+ "e2 of the (abor #ode. 'o requirement of written
authorization from the non!union employee is imposed. 3he employee7s acceptance of benefits resultin from a collective
barainin areement justifies the deduction of aency fees from his pay and the union7s entitlement thereto. 8n this
aspect, the leal basis of the union7s riht to aency fees is neither contractual nor statutory, but quasi!contractual,
derivin from the established principle that non!union employees may not unjustly enrich themselves by benefitin from
employment conditions neotiated by the barainin union.
'o provision of law ma4es the employer directly liable for the payment to the labor oranization of union dues and
assessments that the former fails to deduct from its employees7 salaries and waes pursuant to a chec4!off stipulation.
3he employer7s failure to ma4e the requisite deductions may constitute a violation of a contractual commitment for which it
may incur liability for unfair labor practice. =ut it does not by that omission, incur liability to the union for the areate of
dues or assessments uncollected from the union members, or aency fees for non!union employees.
#hec4!offs in truth impose an extra burden on the employer in the form of additional administrative and boo44eepin
costs. 8t is a burden assumed by manaement at the instance of the union and for its benefit, in order to facilitate the
collection of dues necessary for the latter7s life and sustenance. =ut the obliation to pay union dues and aency fees
obviously devolves not upon the employer, but the individual employee. 8t is a personal obliation not demandable from
the employer upon default or refusal of the employee to consent to a chec4!off. 3he only obliation of the employer under
a chec4!off is to effect the deductions and remit the collections to the union. 3he principle of unjust enrichment necessarily
precludes recovery of union dues or aency fees from the employer, these bein, to repeat, obliations pertainin to the
26
individual wor4er in favor of the barainin union. $here the employer fails or refuses to implement a chec4!off
areement, loic and prudence dictate that the union itself underta4e the collection of union dues and assessments from
its members "and aency fees from non!union employees29 this, of course, without prejudice to suin the employer for
unfair labor practice. Holy #ross of .avao vs. 6oaquin %G.&. 'o. //,,,*, /+ Gctober /00:12
>rt. -)/ has three ";2 requisites for the validity of the special assessment for union7s incidental expenses, attorney7s
fees and representation expenses. 3hese are?
"/2 authorization by a written resolution of the majority of all the members at the eneral membership
meetin called for the purpose9
"-2 secretary7s record of the minutes of the meetin9 and
";2 individual written authorization for chec4 off duly sined by the employees concerned.
"Gabriel vs. Secretary %G.&. 'o. //<0)0, /: Carch -,,,12
A!ticle Provision Requisites
-)/ %n1 'o special assessment or other extraordinary fees may be
levied upon the members of a labor oranization unless authorized
by a written resolution of a majority of all the members at a eneral
membership meetin duly called for the purpose. 3he secretary of
the oranization shall record the minutes of the meetin includin
the list of all members present, the votes cast, the purpose of the
special assessment or fees and the recipient of such assessment or
fees. 3he record shall be attested to by the president
> levyDspecial assessment via a written
resolution of the majority of all the
members in a eneral membership
meetin duly called for the purpose with
the secretary recordin the minutes of
the meetin, list of members as well as
the votes cast.
-)/ %o1 Gther than for mandatory activities under the #ode, no special
assessment, attorney7s fees, neotiation fees or any other
extraordinary fees may be chec4ed off from any amount due an
employee without an individual written authorization duly sined by
the employee. 3he authorization should specifically state the
amount, purpose and beneficiary of the deduction9
> chec4!off via individual written
authorization sined by every employee.
--- %b1 'o attorney7s fees, neotiation fees or similar chares of any
4ind arisin from any collective barainin neotiations or
conclusion of the collective areement shall be imposed on any
individual member of the contractin union? Brovided, however, 3hat
attorney7s fees may be chared aainst union funds in an amount to
be areed upon by the parties. >ny contract, areement or
arranement of any sort to the contrary shall be null and void.
Brohibits attorney7s fees, neotiations
fees and similar chares arisin out of
the conclusion of a collective barainin
areement from bein imposed on any
individual union member.
Enforcement of Knion Security Clause3 "!ligation of Employer
3urnin now to the involvement of the #ompany in the dismissal of petitioner #ariMo we note that the #ompany upon
bein formally advised in writin of the expulsion of petitioner #arino from the @nion, in turn simply issued a termination
letter to #ariMo, the termination bein made effective the very next day. $e believe that the #ompany should have iven
petitioner #arino an opportunity to explain his side of the controversy with the @nion. 'otwithstandin the @nions Security
#lause in the #=>, the #ompany should have reasonably satisfied itself by its own inquiry that the @nion had not been
merely actin arbitrarily and capriciously in impeachin and expellin petitioner #ariMo. 5rom what was already discussed
above, it is quite clear that had the #ompany ta4en the trouble to investiate the acts and proceedins of the @nion, it
could have very easily determined that the @nion had not acted arbitrarily in impeachin and expellin from its ran4s
petitioner #ariMo. 3he #ompany offered the excuse that the @nion had threatened to o on stri4e if its request had not
been forthwith ranted. >ssumin that such a threat had in fact been made, if a stri4e was in fact subsequently called
because the #ompany had insisted on conductin its own inquiry, the #ourt considers that such would have been prima
facie an illeal stri4e. 3he #ompany also pleaded that for it to inquire into the lawfulness of the acts of the @nion in this
reard would constitute interference by the #ompany in the administration of @nion affairs. $e do not believe so.
xxx xxx xxx
<. $e conclude that the #ompany had failed to accord to petitioner #ariMo the latter7s riht to procedural due
process. 3he riht of an employee to be informed of the chares aainst him and to reasonable opportunity to present his
side in a controversy with either the #ompany or his own @nion, is not wiped away by a @nion Security #lause or a @nion
Shop #lause in a #=>. >n employee is entitled to be protected not only from a company which disreards his rihts but
also from his own @nion the leadership of which could yield to the temptation of swift and arbitrary expulsion from
membership and hence dismissal from his job. "#ariMo vs. '(&# %G.&. 'o. 0/,+:, ,+ Cay /00,12
UN"AIR LABOR PRACTICE
"f Employers
8ndeed, it is an unfair labor practice for an employer operatin under a collective barainin areement to neotiate
or to attempt to neotiate with his employees individually in connection with chanes in the areement. >nd the basis of
the prohibition reardin individual barainin with the stri4ers is that althouh the union is on stri4e, the employer is still
under obliation to barain with the union as the employees7 barainin representative "Celo Bhoto Supply #orporation
vs. 'ational (abor &elations =oard, ;-/ @.S. ;;-2.
xxx xxx xxx
3he test of whether an employer has interfered with and coerced employees within the meanin of
subsection "a2 "/2 is whether the employer has enaed in conduct which it may reasonably be said tends to
interfere with the free exercise of employees7 rihts under section ; of the >ct, and it is not necessary that
there be direct evidence that any employee was in fact intimidated or coerced by statements of threats of the
employer if there is a reasonable inference that anti!union conduct of the employer does have an adverse
effect on self!oranization and collective barainin. "5rancisco, (abor (aws /0<:, Aol. 88, p. ;-;, citin
'(&= v. 5ord, #.>., /0)+, /*, 5-d *;<2.
=esides, the letters, exhibits > and =, should not be considered by themselves alone but should be read in the liht
of the precedin and subsequent circumstances surroundin them. 3he letters should be interpreted accordin to the
"3G3>(83J G5 #G'.@#3 .G#3&8'E,"
... whereby the culpability of an employer7s remar4s were to be evaluated not only on the basis of their
implicit implications, but were to be appraised aainst the bac4round of and in conjunction with collateral
circumstances. @nder this "doctrine" expressions of opinion by an employer which, thouh innocent in
themselves, frequently were held to be culpable because of the circumstances under which they were
uttered, the history of the particular employer7s labor relations or anti!union bias or because of their
connection with an established collateral plan of coercion or interference. "&othenber on &elations, p. ;*),
27
and cases cited therein.2GInsular ife 4ssurance Co/. td/. Employees 4ssoc/ #s/ Insular ife 8:/R/ &o/ -
<?<C;. ;CA;9H
>n employer is not denied the privilee of interroatin its employees as to their union affiliation, provided the same
is for a leitimate purpose and assurance is iven by the employer that no reprisals would be ta4en aainst unionists.
'onetheless, any employer who enaes in interroation does so with notice that he ris4s a findin of unfair labor practice
if the circumstances are such that his interroation restrains or interferes with employees in the exercise of their rihts to
self!oranization. "=lue 5lash Express #o., 8nc., /,0 '(&= <0/.2
xxx xxx xxx
3he rule in this jurisdiction is that subjection by the company of its employees to a series of questionins reardin
their membership in the union or their union activities, in such a way as to hamper the exercise of free choice on their part,
constitutes unfair labor practice "Scoty7s .epartment Store vs. Cicaller, <- G.G. <//02. BH8(S3E>C7s aforestated
interroation squarely falls under this rule. "Bhil. Steam 'aviation #o. vs. Bhil. Gfficers Guild %G.&. 'o. (!-,::*D:0, -0
Gctober /0:<12
%81t can be established that the true and basic inspiration for the employer7s act is derived from the employee7s union
affiliations or activities, the assinment by the employer or another reason, whatever its semblance of validity, is
unavailin. 3hus, it has been held that the facts disclosed that the employer7s acts in discharin employees were actually
prompted by the employers 7improper interest in the affected employee7s improper interest in the affected employee7s
union affiliations and activities, even thouh the employer ured that his acts were predicated on economic necessity,
desire to ive employment to more needy persons, lac4 of wor4, cessation of operations, refusal to wor4 overtime, refusal
of non!union employees to wor4 with union employees, seasonal lay!off, libelous remar4s aainst manaement, violation
of company rules. "Aisayan =icycle, Cf., #o., 8nc. vs. '(@ %G.&. 'o. (!/000*, /0 Cay /0:<1 citin &othenber on (abor
&elations2
3he petitioner further claims that it could not have committed the unfair labor practice chare for
dismissin some of its employees due to their alleed union activities because the alleed dismissal too4
place more than four ")2 months before the oranizational meetin of the union and more than one "/2 year
before actual reistration of said union with the (abor Granization .ivision of the =(&.
3he contention is without merit. @nder >rticle -)+"a2 of the (abor #ode of the Bhilippines, "to interfere with, restrain,
or coerce employees in their exercise of the riht to self!oranization" is an unfair labor practice on the part of the
employer. Bararaph "d2 of said >rticle also considers it an unfair labor practice for an employer "to initiate, dominate,
assist or otherwise interfere with the formation or administration of any labor oranization, includin the ivin of financial
or other support to it. 8n this particular case, the private respondents were dismissed or their services were terminated,
because they were solicitin sinatures in order to form a union within the plant. "6udric #annin #orp. vs. 8ncion %G.&.
'o. (!</)0), /0 >uust /0+-12
&espondent court thus correctly held that? ""32o the mind of the #ourt, whether or not the Bines Hotel incurred losses
is of no moment. 3he fact that manaement ranted #hristmas bonus to its employees, the same should have been
divided equally as it has been done before. >side from the #hristmas bonus of <,S that was allocated to the Canila Hotel
employees, some of them were ranted year!end bonus while the employees of the Bines Hotel did not receive any year!
end bonus. 3his is a clear case of discrimination, it appearin that there is no union at the Canila Hotel or the 3aal Aista
(ode and considerin further that lately respondents had always been beset with demands for better livin conditions
from the complainant union as well as stri4es bein staed by the union." "Canila Hotel #o. vs. #8&, %G.&. 'o. (!;,/;0,
-+ September /0*-12
@nder the #=> between the parties that was in force and effect from Cay /, /0+< to >pril ;,,/0++ it was areed that
the "barainin unit" covered by the #=> "consists of all reular or permanent employees, below the ran4 of assistant
supervisor, >lso expressly excluded from the term "appropriate barainin unit" are all reular ran4 and file employees in
the office of the president, vice!president, and the other offices of the company personnel office, security office, corporate
affairs office, accountin and treasurer department .
8t is to this class of employees who were excluded in the "barainin unit" and who do not derive benefits from the
#=> that the profit sharin privilee was extended by petitioner.
3here can be no discrimination committed by petitioner thereby as the situation of the union employees are different
and distinct from the non!union employees. 8ndeed, discrimination per se is not unlawful. 3here can be no discrimination
where the employees concerned are not similarly situated.
"$ise O #o., 8nc., vs. $ise O #o. Employees @nion %G.&. 'o. (!+*:*-, /; Gctober /0+012
3he case before us does not pertain to any controversy involvin discrimination of employees but only the issue of
whether the chane of wor4 schedule, which manaement deems necessary to increase production, constitutes unfair
labor practice. >s shown by the records, the chane effected by manaement with reard to wor4in time is made to
apply to all factory employees enaed in the same line of wor4 whether or not they are members of private respondent
union. Hence, it cannot be said that the new scheme adopted by manaement prejudices the riht of private respondent
to self!oranization.
xxx xxx xxx
$hile the #onstitution is committed to the policy of social justice and the protection of the wor4in class, it should not
be supposed that every dispute will be automatically decided in favor of labor. Canaement also has rihts which, as
such, are entitled to respect and enforcement in the interest of simple fair play. >lthouh this #ourt has inclined more
often than not toward the wor4er and has upheld his cause in his conflicts with the employer, such favoritism has not
blinded the #ourt to the rule that justice is in every case for the deservin, tobe dispensed in the liht of the established
facts and the applicable law and doctrine.
"Sime .arby Bilipinas, 8nc. vs. '(&# %G.&. 'o. //0-,<, /< >pril /00+12
Betitioner7s appeal must be dismissed. 8t is speciously rounded on mere form rather than the realities of the case. 8n
form, respondent court ently treated petitioner7s scheme to deprive the fifteen drivers and helpers of their rihtful status
as employees and did not denounce it as a betrayal of the salutary purpose and objective of the 8ndustrial Beace >ct, but
instead remar4ed that since the rant of employees7 benefits hined on the court7s decision on their status as such
employees, petitioner "could not have been uilty of refusal to barain in accordance with the >ct." 3he reality, however,
is that respondent court expressly found that "in truth and in fact, "petitioner2 corporation is the "employer" of the driver or
helper and not the salesman or propaandist who is merely expressly authorized by the former to enae such services."
Betitioner7s failure to comply with its duty under the collective barainin areement to extend the privilees, rihts and
benefits thereof to the drivers and helpers as its actual employees clearly amounted to the commission of an unfair labor
practice. >nd consequently respondent court properly ordered in, its judment that said drivers and helpers "should be
iven andDor extended all the privilees, rihts and benefits that are iven to all the other reular employees retroactive as
of the effectivity of the first areement of Carch /), /0:- up to the present." 8n orderin, respondent court but discharin
its function under section <"c2 of the >ct, supra, to order the cessation of an unfair labor practice and "ta4e such
affirmative action as will effectuate the policies of this >ct."
28
5ailure on petitioner7s part to live up in ood faith to the terms of its collective barainin areement by denyin the
privilees and benefits thereof to the fifteen drivers and helpers throuh its device of tryin to pass them off as
"employees" of its salesmen and propaandists was a serious violation of petitioner7s duty to barain collectively and
constituted unfair labor practice in any lanuae. >s succinctly stated by Cr. 6ustice #astro on &epublic Savins =an4 vs.
#8&, in unfair labor practice cases, ""32he question is whether the "respondent2 committed the act chared in the
complaint. 8f it did, it is of no consequence either as a matter of procedure or of substantive law, what the act is
denominated whether as a restraint, interference or coercion, as some members of the #ourt believe it to be, or as a
discriminatory dischare as other members thin4 it is, or as refusal to barain as some other members view it, or even as
a combination of any or all of these."
">lhambra 8ndustries, 8nc. vs. #8& %G.&. 'o. (!-<0+), ;, Gctober /0*,12
8n the barainin process, the wor4ers and employer shall be represented by their exclusive barainin
representatives. 3he labor oranization desinated or selected by the majority of employees in an appropriate collective
barainin unit, shall be the exclusive representative of the employees in such unit for the purpose of collective
barainin. 8n the case at bar, it is the >(@ which is the exclusive barainin representative of =>(C>& employees and
as such it has the riht and duty to barain collectively with =>(C>&.
3he duty to barain collectively means the performance of a mutual obliation to meet and convene promptly and
expeditiously in ood faith for the purpose of neotiatin an areement with respect to waes, hours of wor4 and all other
terms and conditions or employment includin proposals for adjustin any rievance or questions arisin under such
areement if requested by either party but such duty does not compel any party to aree to a proposal or to ma4e any
concession ">rt. -<-, (abor #ode, as amended2.
Brocedurally, >(@ sent a letter to =>(C>&, attachin therewith its proposals for collective barainin areement. 8n
reply, =>(C>& refused to neotiate with >(@ alleedly becauseU it received a copy of a letter purportedly written on
'ovember /-, /0+- by one 6ohnny (uces, who claimed to be the president of =almar 5arms Employees >ssociation,
informin the (abor &eional .irector that more than a majority of them would li4e to neotiate directly with their employer
=>(C>&. 3here is no showin, however, that said letter was favorably acted upon, much less, is there an order
supersedin the Ced!>rbiter7s order of Gctober -*, /0+- certifyin >(@ as the sole and exclusive barainin
representative of the ran4 and file wor4er4s of =>(C>&.
=>(C>& cannot also invo4e ood faith in refusin to neotiate with >(@, considerin that the latter has been
certified as the exclusive barainin representative of =>(C>& ran4 and file employees. >s observed by the SolGen,
=>(C>&7S pretense that majority of its ran4 and file employees disaffiliated simply because of a letter it received to that
effect, all the more sustains the findin of bad faith for it is not for the petitioner =>(C>& to question which roup is the
collective barainin representative of its ran4 and file employees.
"=almar 5arms, 8nc. vs. '(&# %G.&. 'o. *;<,), /< Gctober /00/12
"f Employees
3his #ourt has held that a closed!shop is a valid form of union security, and such a provision in a collective
barainin areement is not a restriction of the riht of freedom of association uaranteed by the #onstitution. "(ira
3extile Cills, 8nc. vs. =lanco, /,0 S#&> +*9 Canalan vs. >rtex .evelopment #ompany, 8nc., -/ S#&> <:/2.
3he #ourt stresses, however, that union security clauses are also overned by law and by principles of justice, fair
play, and leality. @nion security clauses cannot be used by union officials aainst an employer, much less their own
members, except with a hih sense of responsibility, fairness, prudence, and judiciousness.
> union member may not be expelled from her union, and consequently from her job, for personal or impetuous
reasons or for causes forein to the closed!shop areement and in a manner characterized by arbitrariness and
whimsicality.
"Canila Candarin Employees @nion vs. '(&# %G.&. 'o. *:0+0, -0 September /0+*12
$hen the @nion struc4 and pic4eted on 6anuary /:, /0:<, it miht have been true that the @nion commanded a
majority of Sulo7s employees. $ithout need of certification, it could, under such circumstances, conclude a collective
barainin areement with Sulo. =ut it is not disputed that on Gctober ), /0:<, i.e., shortly after this case was filed on
September /+, /0:<, a consent election was held. 'ot controverted, too, is the fact that, in that consent election, SE(@
defeated the @nion, petitioner herein. =ecause of this, SE(@ was certified to the Sulo manaement as the "collective
barainin representative of the employees ... for collective barainin purposes as reards waes, hours of wor4, rates
of pay andDor such other terms and conditions of employment allowed them by law."
3he consent election, it should be noted, was ordered by #8& pursuant to the @nion7s petition for direct certification
doc4eted as #ase /)<<!C# and a similar petition for certification filed by SE(@ doc4eted as #ase /):)!C#. Aerily, the
@nion can no loner demand collective barainin. 5or, it became the minority union. >s matters stand, said riht properly
belons to SE(@, which commands the majority. =y law, the riht to be the exclusive representative of all the employees
in an appropriate collective barainin unit is vested in the labor union "desinated or selected" for such purpose "by the
majority of the employees" in the unit concerned. SE(@ has the riht as well as the obliation to hear, voice out and see4
remedies for the rievances of all Sulo employees, includin employees who are members of petitioner @nion, reardin
the "rates of pay, waes, hours of employment, or other conditions of employment."
"@nited &estauror7s vs. 3orres %G.&. 'o. (!-)00;, /+ .ecember /0:+12
STRI6ES7 LOC6OUTS and CONCERTED ACTIONS
> (G#PG@3 mans the temporary refusal of the employer to furnish wor4 as a result of an industrial or labor dispute.
">rticle -/- %p1 of the (abor #ode2
> S3&8PE, considered as the most effective weapon of labor, is defined as any temporary stoppae of wor4 by the
concerted action of employees as a result of an industrial or labor dispute. > labor dispute includes any controversy or
matter concernin terms or conditions of employment or the association or representation of persons in neotiatin, fixin,
maintainin, chanin or arranin the terms and conditions of employment, reardless of whether or not the disputants
stand in the proximate relation of employers and employees. "Gold #ity 8nterated Bort Service, 8nc. vs. '(&# %G.&. 'o.
/,;<:,, ,: 6uly /00<12
> stri4e is "any temporary stoppae of wor4 by the concerted action of employees as a result of an industrial or labor
dispute." 8t is the most preeminent of the economic weapons of wor4ers which they unsheathe to force manaement to
aree to an equitable sharin of the joint product of labor and capital. @ndeniably, stri4es exert some disquietin effects
not only on the relationship between labor and manaement but also on the eneral peace and proress of society. Gur
laws thus reulate their exercise within reasons by balancin the interests of labor and manaement toether with the
overarchin public interest. "(apanday $or4ers @nion vs. '(&# %G.&. 'os. 0<)0)!0*, ,* September /00<12
29
Some of the limitations on the exercise of the riht of stri4e are provided for in pararaphs "c2 and "f2 of >rticle -:; of
the (abor #ode, as amended, supra. 3hey provide for the procedural steps to be followed before stain a stri4e filin of
notice of stri4e, ta4in of stri4e vote, and reportin of the stri4e vote result to the .epartment of (abor and Employment.
"(apanday $or4ers @nion vs. '(&# %G.&. 'os. 0<)0)!0*, ,* September /00<12
Re6uisites for a la+ful loc,out
%31he requisites for a valid loc4out are as follows?
/. a notice of intention to declare a loc4out has been filed with the .epartment of (abor9
-. at least ;, days has elapsed since the filin of notice before the loc4out is declared9
;. an impasse has resulted in the neotiations9 and
). the loc4out is not discriminatory.
"San Bablo Gil 5actory vs. #8& %: S#&> :-+12
8t is not herein controverted that the complainants were loc4ed out or denied wor4 by the respondent #ompany.
@nder &epublic >ct +*<, however, for the discrimination by reason of union membership to be considered an unfair labor
practice, the same must have been committed to courae or discourae such membership in the union. 3his cannot be
said of the act of the #ompany complained of. >s clearly established by the evidence, its refusal to all complainants to
wor4 and requirement that the latter stay out of the premises in the meantime "perhaps while the stri4e was still oin on
at the factory2 was borne out of the #ompany7s justified apprehension and fear that sabotae miht be committed in the
warehouse where the products machinery and spare parts were stored, as has been the case in =inanonan. 8t has never
been shown that the act of the #ompany was intended to induce the complain ants to renounce their union!membership
or as a deterrent for non!members to affiliate therewith, nor as a retaliatory measure for activities in the union or in
furtherance of the cause of the union. "&izal #ement $or4ers @nion vs. Cadrial #o. %G.&. 'o. (!/0*:*, ;, >pril /0:)12
Re6uisites for a a+ful Stri,e
%31he requisites for a valid stri4e are as follows?
/. a notice of stri4e filed with the .epartment of (abor at least ;, days before the intended date thereof or /<
days in case of unfair labor practice9
-. stri4e vote approved by a majority of the total union membership in the barainin unit concerned,
obtained by secret ballot in a meetin called for that purpose9
;. notice iven to the .epartment of (abor and Employment of the results of the votin at least * days before
the intended stri4e.
3hese requirements are mandatory.
"5irst #ity 8nterlin4 vs. #onfesor %G.&. 'o. /,:;/:, ,< Cay /00*12
Burposes of stri4e notice and stri4e!vote report. 8n requirin a stri4e notice and a coolin!off period, the avowed
intent of the law is to provide an opportunity for mediation and conciliation. 8t thus directs the CG(E "to exert all efforts at
mediation and conciliation to effect a voluntary settlement" durin the coolin!off period. >s applied to the #>#!'5S$
dispute reardin the /;th month pay, CG(E intervention could have possibly induced #># to provisionally ive the /;th
month pay in order to avert reat business loss arisin from the project stri4e, without prejudice to the subsequent
resolution of the leal dispute by competent authorities9 or mediationDconciliation could have convinced '5S$ to at least
postpone the intended stri4e so as to avoid reat waste and loss to the suar central, the suar planters and the suar
wor4ers themselves, if the stri4e would coincide with the minin season. So, too, the *!day stri4e!vote report is not without
a purpose. >s pointed out by the Solicitor General?
Cany disastrous stri4es have been staed in the past based merely on the insistence of minority roups
within the union. 3he submission of the report ives assurance that a stri4e vote has been ta4en and that, if
the report concernin it is false, the majority of the members can ta4e appropriate remedy before it is too late.
G&'SW #s/ "#e(era 8:/R/ &o/ -?CA>=. ;= 1ay ;CB<9H
3he SEAE' "*2 .>J $>838'G BE&8G. is intended to ive the .epartment of (abor and Employment an
opportunity to verify whether the projected stri4e really carries the imprimatur of the majority of the union members. 3he
need for assurance that majority of the union members support the stri4e cannot be ainsaid. Stri4e is usually the last
weapon of labor to compel capital to concede to its barainin demands or to defend itself aainst unfair labor practices of
manaement. 8t is a weapon that can either breathe life to or destroy the union and its members in their strule with
manaement for a more equitable due of their labors. 3he decision to wield the weapon of stri4e must, therefore, rest on a
rational basis, free from emotionalism, unswayed by the tempers and tantrums of a few hotheads, and firmly focused on
the leitimate interest of the union which should not, however, be antithetical to the public welfare. 3hus, our laws require
the decision to stri4e to be the consensus of the majority for while the majority is not infallible, still, it is the best hede
aainst haste and error. 8n addition, a majority vote assures the union it will o to war aainst manaement with the
strenth derived from unity and hence, with better chance to succeed. "(apanday $or4ers @nion vs. '(&# %G.&. 'os.
0<)0)!0*, ,* September /00<12
$hen the law says "the labor union may stri4e" should the dispute "remain unsettled until the lapse of the requisite
number of days "coolin!off period2 from the filin of the notice," the unmista4able implication is that the union may not
stri4e before the lapse of the coolin!off period. Similarly, the mandatory character of the *!day stri4e ban after the report
on the stri4e!vote is manifest in the provision that "in every case," the union shall furnish the CG(E with the results of the
votin "at least seven "*2 days before the intended stri4e, subject to the "prescribed2 coolin!off period." 8t must be
stressed that the requirements of coolin!off period and *!day stri4e ban must both be complied with, although the la!or
union may ta,e a stri,e #ote and report the same +ithin the statutory cooling-off period.
8f only the filin of the stri4e notice and the stri4e!vote report would be deemed mandatory, but not the waitin
periods so specifically and emphatically prescribed by law, the purposes "hereafter discussed2 for which the filin of the
stri4e notice and stri4e!vote report is required would not be achieved, as when a stri4e is declared immediately after a
stri4e notice is served, or when as in the instant case the stri4e!vote report is filed with CG(E after the stri4e had actually
commenced Such interpretation of the law ouht not and cannot be countenanced. 8t would indeed be self!defeatin for
the law to imperatively require the filin on a stri4e notice and stri4e!vote report without at the same time ma4in the
prescribed waitin periods mandatory.
"'5S$ vs. Gvejera %G.&. 'o. (!<0*);, /; Cay /0+-12
4ssumption of Jurisdiction
>rticle -:; "2 of the (abor #ode does not violate the wor4ers7 constitutional riht to stri4e. 3he section provides in
part, viz.?
30
$hen in his opinion, there exists a labor dispute causin or li4ely to cause a stri4e or loc4out in an industry
indispensable to the national interest, the Secretary of (abor and Employment may assume jurisdiction over
the dispute and decide it or certify the same to the #ommission for compulsory arbitration. .
3he foreoin article clearly does not interfere with the wor4ers7 riht to stri4e but merely reulates it, when in the
exercise of such riht, national interests will be affected. 3he rihts ranted by the #onstitution are not absolute. 3hey are
still subject to control and limitation to ensure that they are not exercised arbitrarily. 3he interests of both the employers
and employees are intended to be protected and not one of them is iven undue preference.
"B3$@ vs. #G'5ESG& %G.&. 'o. //*/:0, /- Carch /00*12
3he (abor #ode vests upon the Secretary of (abor the discretion to determine what industries are indispensable to
national interest. 3hus, upon the determination of the Secretary of (abor that such industry is indispensable to the national
interest, it will assume jurisdiction over the labor dispute of said industry. 3he assumption of jurisdiction is in the nature of
police power measure. 3his is done for the promotion of the common ood considerin that a proloned stri4e or loc4out
can be inimical to the national economy. 3he Secretary of (abor acts to maintain industrial peace. 3hus, his certification
for compulsory arbitration is not intended to impede the wor4ers7 riht to stri4e but to obtain a speedy settlement of the
dispute. "B3$@ vs. #onfesor %G.&. 'o. //*/:0, /- Carch /00*12
3he intervention of the Secretary of (abor was therefore necessary to settle the labor dispute which had linered and
which had affected both respondent company and petitioner union. Had it not been so, the deadloc4 will remain and the
situation will remain uncertain. 3hus, it cannot be deemed that the Secretary of (abor had acted with rave abuse of
discretion in issuin the assailed order as she had a well!founded basis in issuin the assailed order. 8t is sinificant at this
point to point out that rave abuse of discretion implies capricious and whimsical exercise of judment. 3hus, an act may
be considered as committed in rave abuse of discretion when the same was performed in a capricious or whimsical
exercise of judment which is equivalent to lac4 of jurisdiction. 3he abuse of discretion must be so patent and ross as to
amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion or
personal hostility. "B3$@ vs. #onfesor %G.&. 'o. //*/:0, /- Carch /00*1 citin 8nternational Bharmaceuticals, 8nc. vs.
Secretary of (abor2
%31he fact remains that under the circumstances the Secretary had the power and the duty to assume jurisdiction
over the labor dispute and, corollary to the assumption of jurisdiction, issue a return!to!wor4 order. Given this factual and
leal bac4drop, no rave abuse of discretion can be attributed to the Secretary. "BS=>!Canila vs. 'oriel %G.&. 'o. +,:)+,
/< >uust /0++12
> stri4e that is underta4en despite the issuance by the Secretary of (abor of an assumption or certification order
becomes a prohibited activity and thus illeal, pursuant to the second pararaph of >rt. -:) of the (abor #ode as
amended. 3he @nion officers and members, as a result, are deemed to have lost their employment status for havin
4nowinly participated in an illeal act. "Ramboana $ood Broducts, 8nc. v. '(&# %G.&. +-,++, /; Gctober/0+012
Incidental Issues
%31he fundamental normative rule that jurisdiction is the authority to bear and determine a cause the riht to act in a
case. However, this should be distinuished from the exercise of jurisdiction. 3he authority to decide a case at all and not
the decision rendered therein is what ma4es up jurisdiction. $here there is jurisdiction over the person and the subject
matter, the decision of all other questions arisin in the case is but an exercise of that jurisdiction.
%31he Secretary was explicitly ranted by >rticle -:; "2 of the (abor #ode the authority to assume jurisdiction over a
labor dispute causin or li4ely to cause a stri4e or loc4out in an industry indispensable to the national interest, and decide
the same accordinly. 'ecessarily, this authority to assume jurisdiction over the said labor dispute must include and extend
to all questions and include and extend to all questions and controversies arisin therefrom, includin cases over which the
(abor >rbiter has exclusive jurisdiction.
"8nternational Bharmaceuticals, 8nc. v. Secretary %G.&. 'os. 0-0+/!+;, ,0 6anuary /00-12
=efore the Secretary of (abor and Employment may ta4e conizance of an issue which is merely incidental to the
labor dispute, therefore, the same must be involved in the labor disputed itself, or otherwise submitted to him for resolution.
8f it was not, as was the case in B>( v. Secretary or (abor and Employment, supra, and he nevertheless acted on it, that
assumption of jurisdiction is tantamount to a rave abuse of discretion. Gtherwise, the rulin in 8nternational
Bharmaceuticals, 8nc. v. Secretary of (abor and Employment, supra, will apply.
3he submission of an incidental issue of a labor dispute, in assumption andDor certification cases, to the Secretary of
(abor for his resolution is thus one of the instances referred to whereby the latter may exercise concurrent jurisdiction
toether with the (abor >rbiters.
"St. Scholastica7s #ollee vs. 3orres %G.&. 'o. /,,/<+, ,- 6une /00-12
Return to Wor, "rder
Gnce the Secretary of (abor assumes jurisdiction over, or certifies for compulsory arbitration, a labor dispute
adversely affectin the national interest, the law mandates that if a stri4e or loc4out has already ta4en place at the time of
assumption or certification, "all stri4in or loc4ed out employees shall immediately return to wor4 and the employer shall
immediately resume operations and readmit all wor4ers under the same terms and conditions prevailin before the
stri4e." %>rt. -:; "2, (abor #ode, as amended.1 5ar from errin, the >ctin Secretary, in issuin the return to wor4 order,
merely implemented the clear mandates of the law. 3hus, the contention that error attended the issuance of such order is
without any leal basis. "BS=> ! Canila vs. 'oriel %G.&. 'o. +,:)+, /< >uust /0++12
>rticle -:; "2 of the (abor #ode provides that if a stri4e has already ta4en place at the time of assumption, "all
stri4in . . . employees shall immediately return to wor4." 3his means that by its very terms, a return!to!wor4 order is
immediately effective and executory notwithstandin the filin of a motion for reconsideration. 8t must be strictly complied
with even durin the pendency of any petition questionin its validity. >fter all, the assumption andDor certification order is
issued in the exercise of respondent Secretary7s compulsive power of arbitration and, until set aside, must therefore be
immediately complied with. "St. Scholastica7s vs. 3orres %G.&. 'o. /,,/<+, ,- 6une /00-12
3o say that its "return!to!wor4 order2 effectivity must wait affirmance in a motion for reconsideration is not only to
emasculate it but indeed to defeat its import, for by then the deadline fixed for the return to wor4 would, in the ordinary
course, have already passed and hence can no loner be affirmed insofar as the time element is concerned. "B>(E> vs.
B>(2
3he respective liabilities of stri4in union officers and members who failed to immediately comply with the return!to!
wor4 order is outlined in >rt. -:) of the (abor #ode which provides that any declaration of a stri4e or loc4out after the
Secretary of (abor and Employment has assumed jurisdiction over the labor dispute is considered an illeal act. >ny
31
wor4er or union officer who 4nowinly participates in a stri4e defyin a return!to!wor4 order may, consequently, "be
declared to have lost his employment status." "St. Scholastica7s vs. 3orres %G.&. 'o. /,,/<+, ,- 6une /00-12
%31he underlyin principle embodied in >rt. -:)"2 on the settlement of labor disputes is that assumption and
certification orders are executory in character and are to be strictly complied with by the parties even durin the pendency
of any petition questionin their validity. 3his extraordinary authority iven to the Secretary of (abor is aimed at arrivin at
a peaceful and speedy solution to labor disputes, without jeopardizin national interests.
&eardless therefore of their motives, or the validity of their claims, the stri4in wor4ers must cease andDor desist
from any and all acts that tend to, or undermine this authority of the Secretary of (abor, once an assumption andDor
certification order is issued. 3hey cannot, for instance, inore return!to!wor4 orders, citin unfair labor practices on the
part of the company, to justify their actions.
"@5E vs. 'estle Bhil., 8nc. %G.&. 'o. ++*/,!/;, /0 .ecember /00,12
%31he return!to!wor4 order not so much confers a riht as it imposes a duty9 and while as a riht it may be waived, it
must be dischared as a duty even aainst the wor4er7s will. &eturnin to wor4 in this situation is not a matter of option or
voluntariness but of obliation. 3he wor4er must return to his job toether with his co!wor4ers so the operations of the
company can be resumed and it can continue servin the public and promotin its interest. 3hat is the real reason such
return can be compelled. So imperative is the order in fact that it is not even considered violative of the riht aainst
involuntary servitude. 3he wor4er can of course ive up his wor4, thus severin his ties with the company, if he does not
want to obey the order9 but the order must be obeyed if he wants to retain his wor4 even if his inclination is to stri4e.
"Sarmiento vs. 3uico %G.&. 'o. *<-*/!*;, -* 6une /0++12
$e also wish to point out that an assumption andDor certification order of the Secretary of (abor automatically results
in a return!to!wor4 of all stri4in wor4ers, whether or not a correspondin order has been issued by the Secretary of
(abor. 3hus, the stri4in wor4ers erred when they continued with their stri4e allein absence of a return!to!wor4 order.
>rticle -:)"2 is clear. Gnce an assumptionDcertification order is issued, stri4es are enjoined, or if one has already ta4en
place, all stri4ers shall immediately return to wor4. "@5E vs. 'estle Bhil., 8nc. %G.&. 'o. ++*/,!/;, /0 .ecember /00,12
ia!ilities for an Illegal Stri,e
> @'8G' G558#E& who 4nowinly participates in an illeal stri4e and any wor4er or union officer who 4nowinly
participates in the commission of illeal acts durin a stri4e may be declared to have lost their employment status. >n
ordinary S3&8P8'G $G&PE& cannot be terminated for mere participation in an illeal stri4e. 3here must be proof that he
committed illeal acts durin a stri4e. > union officer, on the other hand, may be terminated from wor4 when he 4nowinly
participates in an illeal stri4e, and li4e other wor4ers, when he commits an illeal act durin a stri4e. "Gold #ity 8nterated
Bort Service, 8nc. vs. '(&# %G.&. 'o. /,;<:,, ,: 6uly /00<12
%81f the existence of force "acts of violence2 while the stri4e lasts is not pervasive and widespread, nor consistently
and deliberately resorted to as a matter of policy, responsibility for serious acts of violence should be individual and not
collective. "Shell Gil $or4ers @nion vs. Shell #ompany Gf 3he Bhil. %G.&. 'o. (!;,:<+!<0, ;/ Carch /0*:12
'evertheless, we are constrained to uphold the respondent Secretary7s rulin that responsibility for these illeal acts
must be on an individual and not collective basis. 3herefore, althouh the stri4e was illeal because of the commission of
illeal acts, only the union officers and stri4ers who enaed in violent, illeal and criminal acts aainst the employer are
deemed to have lost their employment status. @nion members who were merely instiated to participate in the illeal
stri4e should be treated differently. "5irst #ity 8nterlin4 3ransportation #o., 8nc., vs. &oldan!#onfesor %G.&. 'o. /,:;/:, ,<
Cay /00*12
3hus, althouh rejectin that B'G# and its subsidiaries were uilty of discrimination, the '(&# reiterated the policy
enunciated in several labor cases "that a stri4e does not automatically carry the stima of illeality even if no unfair labor
practice were committed by the employer. 8t suffices if such a belief in ood faith is entertained by labor as the inducin
factor for stain a stri4e." 8ndeed, the presumption of leality prevails even if the alleation of unfair labor practice is
subsequently found to be untrue, provided that the union and its members believed in ood faith in the truth of such
averment. "B'G# .oc4yard vs. '(&# %G.&. 'o. //+--;, -: 6une /00+12
In(unction
3he riht to pic4et as a means of communicatin the facts of a labor dispute is a phrase of the freedom of speech
uaranteed by the constitution. 8f peacefully carried out, it cannot be curtailed even in the absence of employer!employee
relationship.
3he riht is, however, not an absolute one. $hile peaceful pic4etin is entitled to protection as an exercise of free
speech, we believe that courts are not without power to confine or localize the sphere of communication or the
demonstration to the parties to the labor dispute, includin those with related interest, and to insulate establishments or
persons with no industrial connection or havin interest totally forein to the context of the dispute. 3hus, the riht may be
reulated at the instance of third parties or "innocent bystanders" if it appears that the inevitable result of its exercise is to
create an impression that a labor dispute with which they have no connection or interest exists between them and the
pic4etin union or constitute an invasion of their rihts. 8n one case decided by this #ourt, we upheld a trial court7s
injunction prohibitin the union from bloc4in the entrance to a feed mill located within the compound of a flour mill with
which the union had a dispute. >lthouh sustained on a different round, no connection was found other than their bein
situated in the same premises. 8t is to be noted that in the instances cited, peaceful pic4etin has not been totally banned
but merely reulated. >nd in one >merican case, a pic4et by a labor union in front of a motion picture theater with which
the union had a labor dispute was enjoined by the court from bein extended in front of the main entrance of the buildin
housin the theater wherein other stores operated by third persons were located.
"B>5(@ vs. #loribel %(!-<+*+, -+ Carch /0:012
>mon the powers expressly conferred on the #ommission by >rticle -/+ is the power to "enjoin or restrain any
actual or threatened commission of any or all prohibited or unlawful acts or to require the performance of a particular act
in any labor dispute which, if not restrained or performed forthwith, may cause rave or irreparable damae to any party or
render ineffectual any decision in favor of such party . . ." "8=C vs. '(&#, %G.&. 'o. 0/0+,, -* 6une /00/1
>s a rule such restrainin orders or injunctions do not issue ex parte, but only after compliance with the followin
requisites, to wit?
a2 a hearin held "after due and personal notice thereof has been served, in such manner as the #ommission shall
direct, to all 4nown persons aainst whom relief is souht, and also to the #hief Executive and other public officials
of the province or city within which the unlawful acts have been threatened or committed chared with the duty to
protect complainant7s property9"
b2 reception at the hearin of "testimony of witnesses, with opportunity for cross!examination, in support of the
32
alleations of a complaint made under oath," as well as "testimony in opposition thereto, if offered . . .9
c2 a findin of fact by the #ommission, to the effect?
"/2 3hat prohibited or unlawful acts have been threatened and will be committed and will be continued
unless restrained, but no injunction or temporary restrainin order shall be issued on account of any
threat, prohibited or unlawful act, except aainst the person or persons, association or oranization
ma4in the threat or committin the prohibited or unlawful act or actually authorizin or ratifyin the
same after actual 4nowlede thereof9
"-2 3hat substantial and irreparable injury to complainant7s property will follow9
";2 3hat as to each item of relief to be ranted, reater injury will be inflicted upon complainant by the denial
of relief than will be inflicted upon defendants by the rantin of relief9
")2 3hat complainant has no adequate remedy at law9 and
"<2 3hat the public officers chared with the duty to protect complainant7s property are unable or unwillin to
furnish adequate protection.
However, a temporary restrainin order may be issued ex parte under the followin conditions?
a2 the complainant "shall also allee that, unless a temporary restrainin order shall be issued without notice, a
substantial and irreparable injury to complainant7s property will be unavoidable9
b2 there is "testimony under oath, sufficient, if sustained, to justify the #ommission in issuin a temporary injunction
upon hearin after notice9"
c2 the "complainant shall first file an underta4in with adequate security in an amount to be fixed by the #ommission
sufficient to recompense those enjoined for any loss, expense or damae caused by the improvident or erroneous
issuance of such order or injunction, includin all reasonable costs, toether with a reasonable attorney7s fee, and
expense of defense aainst the order or aainst the rantin of any injunctive relief souht in the same proceedin
and subsequently denied by the #ommission9" and
d2 the "temporary restrainin order shall be effective for no loner than twenty "-,2 days and shall become void at the
expiration of said twenty "-,2 days.
"8=C vs. '(&#, %G.&. 'o. 0/0+,, -* 6une /00/1
ia!ility of Employer for !ac,+ages
%31he distinction earlier made between discriminatorily dismissed employees and those who struc4, albeit in protest
aainst the company7s unfair labor practice. .iscriminatorily dismissed employees received bac4pay from the date of the
act of discrimination, that is from the day of their dischare. Gn this score, the award of bac4pay to Gaddi, >ndrada and
the salesmen may be justified. 3he salesmen, as already stated, were practically loc4ed out when they were ordered to
put their truc4s in the arae9 they did not voluntarily stri4e. "See Cacleod O #o. of the Bhil. v. Broressive 5ederation of
(abor, G.&. 'o. (!*++*, Cay ;/, /0<<2 Hence, the award of bac4waes.
8n contrast, the rest of the employees struc4 as a voluntary act of protest aainst what they considered unfair labor
practices of the company. 3he stoppae of their wor4 was not the direct consequence of the company7s unfair labor
practice. Hence their economic loss should not be shifted to the employer. "See .inlasan v. 'ational (abor @nion, G.&.
'o. (!/)/+;, 'ov. -+, /0<02 >s explained by the 'ational (abor &elations =oard in the case of >merican Canufacturin
#o., '(&= ));, "$hen employees voluntarily o on stri4e, even if in protest aainst unfair labor practices, it has been our
policy not to award them bac4pay durin the stri4e. However, when the stri4ers abandon the stri4e and apply for
reinstatement despite the unfair labor practices and the employer either refuses to reinstate them or imposes upon their
reinstatement new conditions that constitute unfair labor practices, $e are of the opinion that the considerations impellin
our refusal to award bac4pay are no loner controllin. >ccordinly, $e hold that where, as in this case, an employer
refuses to reinstate stri4ers except upon their acceptance of the new conditions that discriminate aainst them because of
their union membership or activities, the stri4ers who refuse to accept the conditions and are consequently refused
reinstatement are entitled to be made whole for any losses of pay they may have suffered by reason of the respondent7s
discriminatory acts." "Nuoted in 3eller, - (abor .isputes and #ollective =arainin, Sec. ;*/, pp. 00*!00+2
"#romwell #ommercial Employees vs. #8& %G.&. 'o. (!/0**+, ;, September /0:)12
TERMINATION O" EMPLOYMENT
%y Employee
"a2 >n employee may terminate without just cause the employee!employer relationship by servin a written notice on
the employer at least one month in advance. 3he employer upon whom no such notice was served may hold the
employee liable for damaes.
"b2 >n employee may put an end to the relationship without servin any notice on the employer for any of the followin
just causes?
"/2 Serious insult by the employer or his representative on the honor and person of the employee9
"-2 8nhuman and unbearable treatment accorded the employee by the employer or his representative9
";2 #ommission of a crime or offense by the employer or his representative aainst the person of the
employee or any of the immediate members of his family9 and
")2 Gther causes analoous to any of the foreoin.
">rticle -+< of the (abor #ode2
Resignation
3he #ourt cannot uphold and ive weiht to private respondent7s resination letter which appears to have been
written and submitted at the instance of petitioner. 8ts form is of the company7s and its wordins are more of a waiver and
quitclaim. Coreover, the supposed resination was not ac4nowleded before a notary public. Betitioner7s failure to deny
that Suarland is its sister company and that petitioner absorbed Suarland7s security contract and security personnel
assumes overridin sinificance over the resination theorized upon, evincin petitioner7s desin to inore or violate labor
laws throuh the use of the veil of corporate personality. 3he #ourt cannot sanction the practice of some companies
which, shortly after a wor4er has become a reular employee, effects the transfer of the same employee to another entity
whose owners are the same, or identical, in order to deprive subject employee of the benefits and protection he is entitled
to under the law. ">7 Brime Security Services, 8nc. vs. '(&# %G.&. 'o. /,*;-,, /0 6anuary -,,,12
%y Employer
@nder Section /, &ule L8A of the 8mplementin &ules and &eulations of the (abor #ode, the dismissal of an
employee must be for a just or authorized cause and after due process.
3he two requirements of this leal provision are?
/. 3he leality of the act of dismissal, that is, dismissal under the round provided under >rticle -+- "6ust
#auses2 or >rticles -+; and -+) ">uthorized #auses2 of the (abor #ode9 and
33
-. 3he leality in the manner of dismissal, that is, with observance of the procedural requirements of notice and
hearin.
83st Ca3se
>n employer may terminate an employment for any of the followin just causes?
"a2 Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his wor49
"b2 Gross and habitual nelect by the employee of his duties9
"c2 5raud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative9
"d2 #ommission of a crime or offense by the employee aainst the person of his employer or any immediate
member of his family or his duly authorized representative9 and
"e2 Gther causes analoous to the foreoin.
">rticle -+- of the (abor #ode2
3o be lawful, the cause for termination must be a serious and rave malfeasance to justify the deprivation of a
means of livelihood. 3his is merely in 4eepin with the spirit of our #onstitution and laws which lean over bac4wards in
favor of the wor4in class, and mandate that every doubt must be resolved in their favor. "Hon4on O Shanhai =an4in
#orp. vs. '(&# %G.&. 'o. //:<)-, ;, 6uly /00:12
8n labor!manaement relations, there can be no hiher penalty than dismissal from employment. .ismissal severs
employment ties and could well be the economic death sentence of an employee. .ismissal prejudices the socio!
economic well bein of the employee7s family and threatens the industrial peace. .ue to its far reachin implications, our
(abor #ode decrees that an employee cannot be dismissed, except for the most serious causes. 3he overly concern of
our laws for the welfare of employees is in accord with the social justice philosophy of our #onstitution. "#ebu 5ilveneer
vs. '(&# %G.&. 'o. /-::,/, -) 5ebruary /00+1
Serious misconduct or +illful diso!edience !y the
employee of the la+ful orders of his employer or
representati#e in connection +ith his +or,3
%81n order that an employer may terminate an employee on the round of willful disobedience to the former7s orders,
reulations or instructions, it must be established that the said orders, reulations or instructions are "a2 reasonable and
lawful, "b2 sufficiently 4nown to the employee, and "c2 in connection with the duties which the employee has been
enaed to dischare. "Canebo vs. '(&# %G.&. 'o. /,**-/, /, 6anuary /00)12
Cisconduct is improper or wron conduct. 8t is the transression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies wronful intent and not mere error in judment. 3he
misconduct to be serious within the meanin of the >ct must be of such a rave and aravated character and not merely
trivial or unimportant. Such misconduct, however serious, must, nevertheless, be in connection with the employee7s wor4
to constitute just cause for his separation. 8n this case however, the misconduct has no relation to the wor4 of petitioners9
hence, not a valid round. "#osep vs. '(&# %G.&. 'o. /-)0::, /: 6une /00+12
Serious misconduct in the form of drun4enness and disorderly and violent behavior, habitual nelect of duty, and
insubordination or willful disobedience of the lawful order of his superior officer, are just causes for the dismissal of an
employee. %Seahorse Caritime #orporation vs. '(&# %/*; S#&> ;0,, /0+012
%$1here a violation of company policy or breach of company rules and reulations was found to have been tolerated
by manaement, then the same could not serve as a basis for termination "3ide $ater >ssociated Gil #o. v. Aictory
Employees %+< BH8( /::, /0)012
3he employee admits that she had as4ed someone to punch!in her time card because at that time she was doin an
errand for one of the companyFs officers, &ichard 3an, and that was with the permission of $illiam #hua. She maintains
that she did it in ood faith believin that she was anyway accommodatin the request of a company executive and done
for the benefit of the company with the acquiescence of her boss. =esides, the practice was apparently tolerated as the
employees were not ettin any reprimand for doin so. "Bhilippine >eolus >utomotive vs. '(&# %G.&. 'o. /-):/*, -0
>pril -,,,12
Such dismissal, in our view, was too harsh a penalty for an unintentional infraction, not to mention that it was his first
offense committed without malice, and committed also by others who were not equally penalized.
8t is clear that the alleed false entry in private respondent7s .3& was actually the result of havin loed his
scheduled time!out in advance on 6uly ;/, /00). =ut it appears that when he timed in, he had no idea that his wor4
schedule "niht shift2 would be cancelled. $hen it was confirmed at /,?,, p.m. that there was no "butcherin" of tuna to
be done, those who reported for wor4 were allowed to o home, includin private respondent. 8n fact, 5iloteo even
obtained permission to leave from the >ssistant Broduction Canaer.
#onsiderin the factory practice which manaement tolerated, we are persuaded that 5iloteo, in his rush to catch the
service vehicle, merely forot to correct his initial time!out entry. 'othin is shown to prove he deliberately falsified his
daily time record to deceive the company. 3he '(&# found that even manaement7s own evidence reflected that a
certain 5elix Belayo, a co!wor4er of private respondent, was also allowed to o home that niht and li4e private
respondent loed in advance *?,, a.m. as his time!out. 3his supports 5iloteo7s claim that it was common practice amon
niht!shift wor4ers to lo in their usual time!out in advance in the daily time record.
"Bermex vs. '(&# %G.&. 'o. /-<,;/, -) 6anuary -,,,12
3he act of private respondent in as4in a co!employee to punch!in her time card althouh a violation of company
rules, li4ewise does not constitute serious misconduct. 5irstly, it was done in ood faith considerin that she was as4ed by
an officer to perform a tas4 outside the office, which is for the benefit of the company, with the consent of the plant
manaer. Secondly, it eas her first time to commit such infraction durin her five "<2!year service in the company. 5inally,
the company did not lose anythin by reason thereof as the offense was immediately 4nown and corrected. "Bhilippine
>eolus >utomotive vs. '(&# %G.&. 'o. /-):/*, -0 >pril -,,,12
>n ordinary employee, quite understandably, examines her pay slip every time she receives her salary. =ut we
cannot always expect the employee to o further as to determine if her overtime pay, which is not much anyway, was
properly computed up to the last centavo or whether the overtime pay pertained to a particular day the wor4 was
rendered. 3he amount in controversy was only B-<).0,. #onsiderin the employeeFs salary was not fixed as it fluctuated
from time to time due to varyin amounts of tips, commissions and overtime pay received, it would not have been riht to
assume always that the employee would examine every detail of the computation of her salary. 'eedless to say, the
same should not be laid solely on the employee because the mista4e is not hers alone. 3he mista4e resulted from the
34
collective laxity of petitionerFs accountin personnel and inadvertence on the part of the respondent. "Shanri!(a Hotel vs.
.ialoo %G.&. 'o. /)/0,,, -, >pril -,,/12
:ross and ha!itual neglect !y the employee of his
duties3
Sleepin on the job
Betitioner7s reliance on the authorities it cited that sleepin on the job is always a valid round for dismissal, is
misplaced. 3he authorities cited involved security uards whose duty necessitates that they be awa4e and watchful at all
times inasmuch as their function, to use the words in (uzon Stevedorin #orp. v. #8&, is "to protect the company from
pilferae or loss." >ccordinly, the doctrine laid down in those cases is not applicable to the case at bar.
$hile an employer enjoys a wide latitude of discretion in the promulation of policies, rules and reulations on wor4!
related activities of the employees, those directives, however, must always be fair and reasonable, and the correspondin
penalties, when prescribed, must be commensurate to the offense involved and to the deree of the infraction. 8n the case
at bar, the dismissal meted out on private respondent for alleedly sleepin on the job, under the attendant
circumstances, appears to be too harsh a penalty, considerin that he was bein held liable for first time, after nine "02
lon years of unblemished service, for an alleed offense which caused no prejudice to the employer, aside from absence
of substantiation of the alleed offense. 3he authorities cited by petitioner are also irrelevant for the reason that there is no
evidence on the depravity of conduct, willfulness of the disobedience, or conclusiveness of uilt on the part of private
respondent. 'either was it shown that private respondent7s alleed nelience or nelect of duty, if any, was ross and
habitual. 3hus, reinstatement is just and proper.
"AH Canufacturin, 8nc. vs. '(&# %G.&. 'o. /;,0<*, /0 6anuary -,,,12
>bandonment
5or abandonment to constitute a valid cause for termination of employment, there must be a deliberate unjustified
refusal of the employee to resume his employment. 3his refusal must be clearly shown. Cere absence is not sufficient9 it
must be accompanied by overt acts pointin to the fact that the employee simply does not want to wor4 anymore. ".avies,
8nc. vs. '(&# %G.&. 'o. /,:0/<, ;/ >uust /00;12
>s found by the (abor >rbiter, private respondent7s physician advised him to rest for ;, days before reportin bac4
for wor4 in order to recuperate. Brivate respondent heeded this advise and even exceeded the number of days
recommended by his doctor for his recuperation. 8n fact, he reported bac4 for wor4 <, days after his operation. 3his would
clearly show that private respondent was ready to assume his responsibilities considerin that he had fully recovered from
the operation. 5urthermore, the filin of a complaint for illeal dismissal by private respondent is inconsistent with the
alleation of petitioners that he had abandoned his job. Surely, an employee7s posture will be illoical if he abandons his
wor4 and then immediately files an action for his reinstatement "&emerco Garments v. Cinister, /;< S#&> /:* %/0+<12.
$e have consistently ruled that a chare of abandonment is totally inconsistent with the immediate filin of a
complaint for illeal dismissal. "8cawat vs.'(&# %G& 'o. /;;<*;, -,,-12
@ndeniable is the over!reliance of both the (abor >rbiter and the '(&# on the notion that the filin of a complaint for
illeal dismissal is inconsistent with the employer7s defense of abandonment by the employee of his wor4. $hile the
burden of refutin a complaint for illeal dismissal is upon the employer, fair play as well requires that, where the
employer proffers substantial evidence of the fact that it had not, in the first place, terminated the employee but simply laid
him off due to valid reasons, neither the (abor >rbiter nor the '(&# may simply inore such evidence on the pretext that
the employee would not have filed the complaint for illeal dismissal if he had not indeed been dismissed. 3his is clearly a
non sequitur reasonin that can never validly ta4e the place of the evidence of both the employer and the employee.
xxx xxx xxx
3he (abor >rbiter and the '(&# similarly answered the question with the alleed truism? private respondent filed the
complaint for illeal dismissal because he was illeally dismissed. $e, however, believe that private respondent7s
motivation in filin the complaint for illeal dismissal despite his refusal to return to wor4, is revealed by the followin
averment in his position paper before the (abor >rbiter?
=efore delvin into the issues of the above entitled case, complainant would li4e to request the Honorable
#ommissioner to ta4e judicial notice of the fabricated and manufactured criminal case filed by the respondents
in retaliation to the institution of this case and in fact the latter had confronted the former to drop this case in
exchane of the droppin of the fabricated and manufactured criminal case.
">rc!Cen 5ood 8ndustries vs. '(&# %G.&. 'o. //;*-/, ,* Cay /00*12
8n this case, the followin circumstances clearly manifest private respondent7s intention to sever his ties with
petitioners. 5irst, private respondent even braed to his co!wor4ers his plan to quit his job at #esar7s Balace =arbershop
and Cassae #linic as borne out by the affidavit executed by his former co!wor4ers. Second, he surrendered the shop7s
4eys and too4 away all his thins from the shop. 3hird, he did not report anymore to the shop without ivin any valid and
justifiable reason for his absence. 5ourth, he immediately souht a reular employment in another barbershop, despite
previous assurance that he could remain in petitioners7 employ. 5ifth, he filed a complaint for illeal dismissal without
prayin for reinstatement.
Coreover, public respondent7s assertion that the institution of the complaint for illeal dismissal manifests private
respondent7s lac4 of intention to abandon his job is untenable. 3he rule that abandonment of wor4 is inconsistent with the
filin of a complainant for illeal dismissal is not applicable in this case. Such rule applies where the complainant see4s
reinstatement as a relief. #orollarily, it has no application where the complainant does not pray for reinstatement and just
as4s for separation pay instead as in the present case. 8t oes without sayin that the prayer for separation pay, bein the
alternative remedy to reinstatement, contradicts private respondent7s stance. "6o vs. '(&# %G.&. 'o. /-/:,<, ,-
5ebruary -,,,12
%31he evidence on record indubitably shows that (eonardo abandoned his wor4 with the respondents. >s sufficiently
established by respondents, complainant, after bein pressed by respondent to present the customer reardin his
unauthorized solicitation of sideline wor4 from the latter and whom he claims to be his aunt, he never reported bac4 to
wor4 anymore. 3his findin is further bolstered by the fact that after he left the respondent, he ot employed with .ennis
Cotors #orporation as >ir!#on CechanicT.
8t must be stressed that while (eonardo allees that he was illeally dismissed from his employment by the
respondents, surprisinly he never stated any reason why the respondents would want to ease him out from his job.
Coreover, why did it ta4e him ten "/,2 lon months to file his case if he indeed was arieved by the respondents. >ll the
above facts clearly point that the filin of the case is a mere afterthouht on the part of complainant (eonardo.
"(eonardo vs. '(&# %G.&. 'o. /-<;,;, /: 6une -,,,12
Excessive absences
35
8n the case at bench, it is undisputed that respondent Edwin B. Sabuya had within a span of almost six ":2 years
been repeatedly admonished, warned and suspended for incurrin excessive unauthorized absences. $orse, he was not
at home but was out drivin a pedicab to earn extra income when the company nurse visited his residence after he filed
an application for sic4 leave. Such conduct of respondent Edwin B. Sabuya undoubtedly constitutes ross and habitual
nelect of duties. "$orldwide Bapermills vs. '(&# %G.&. 'o. //;,+/, /- Cay /00<12
'raud or +illful !reach !y the employee of the
trust reposed in him !y his employer or duly
authori0ed representati#e3
(oss of confidence as a round for dismissal does not entail proof beyond reasonable doubt of the employee7s
misconduct. 8t is enouh that there be "some basis" for such loss of confidence or that "the employer has reasonable
rounds to believe, if not to entertain the moral conviction that the employee concerned is responsible for the misconduct
and that the nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded by
his position" "&eyes vs. Ramora, 0, S#&> 0-, /// %/0*019 Galsim vs. B'=, -0 S#&> -0; %/0:012
3o be a valid round for dismissal, loss of trust and confidence must be based on a willful breach of trust. >nd, as
realistically stressed by the Solicitor General, unless based on a round provided by law and supported by substantial
evidence, dismissal will be disallowed, for what is at sta4e is not only the employee7s position, but also his means of
livelihood. #onsiderin that private respondent was actin in ood faith, his dismissal would run counter to such
established doctrinal rulins. "B#8 =an4 vs. '(&# %G.&. 'o. //)0-,, -; >uust /00<12
3he employeeFs failure to detect and report to the respondent company the fraudulent activities in her division as well
as her failure to ive a satisfactory explanation on the irreularities constitute Hfraud or willful breach of trust reposed on
her by her employer or duly authorized representativeI K one of the just causes in terminatin employment as provided for
under pararaph c, >rticle -+; of the (abor #ode, as amended. #oncomitantly, the employeeFs actuations betrayed the
utmost trust and confidence reposed upon her by the respondent company. $e cannot, therefore, compel private
respondents to retain the employment of the employee who is shown to be lac4in in candor, honesty and efficiency
required of her position. "'o4om vs. '(&# %G.&. 'o. /),,);, /+ 6uly -,,,12
$e have consistently held that loss of confidence is a reconized round for the dischare of an employee from
employment. =ut such round must be founded on facts established by substantial evidence. 3he burden of establishin
such facts as reasonably cause loss of confidence in an employee such facts are reasonably enerate belief by the
employer that the employee was connected with some misconduct and the nature of his participation therein is such as to
render him unworthy of trust and confidence demanded of his position is on the employer. 8n this case, the records are
bereft of any showin that private respondent 6emina is responsible, solely or partly, for the loss of the B/,,,,,,.,, in the
vault of petitioner =an47s =inondo =ranch. =oth the (abor >rbiter and the '(&# analyzed the employer7s proofs and came
to the reasoned conclusion that they did not adequately demonstrate 6emina7s connection with the said loss. 3rue, 6emina
is a possible suspect. >fter all, the cash operations of the branch were under his control and supervision. He had joint
custody with the =ranch Canaer over all cash and properties inside the vault. He had access to the vault where the
monies of the ban4 were 4ept. 8ndeed, petitioner =an4 has every reason to suspect 6emina for the B/,,,,,,.,, shortae
in its vault. =ut suspicion has never been a valid round for the dismissal of an employee. 3he employee7s fate cannot, in
justice, be hined upon conjectures and surmises. "Bilipinas =an4 vs. '(&# %G.&. 'o. /,/;*-, /; 'ovember /00-12
3hat it was so can easily be seen from the memorandum sent to private respondent by .elia C. Gficial, the branch
supervisor of the company, with the reminder, in the words of the latter, that "you7re fully aware that the company is not
acceptin married women employee "sic2, as it was verbally instructed to you." >ain, in the termination notice sent to her
by the same branch supervisor, private respondent was made to understand that her severance from the service was not
only by reason of her concealment of her married status but, over and on top of that, was her violation of the company7s
policy aainst marriae ""and even told you that married women employees are not applicable %sic1 or accepted in our
company."2 Barenthetically, this seems to be the curious reason why it was made to appear in the initiatory pleadins that
petitioner was represented in this case only by its said supervisor and not by its hihest ran4in officers who would
otherwise be solidarily liable with the corporation.
Aerily, private respondent7s act of concealin the true nature of her status from B3 O 3 could not be properly
characterized as willful or in bad faith as she was moved to act the way she did mainly because she wanted to retain a
permanent job in a stable company. 8n other words, she was practically forced by that very same illeal company policy
into misrepresentin her civil status for fear of bein disqualified from wor4. $hile loss of confidence is a just cause for
termination of employment, it should not be simulated. 8t must rest on an actual breach of duty committed by the
employee and not on the employer7s caprices. 5urthermore, it should never be used as a subterfue for causes which are
improper, illeal, or unjustified.
"B3O3 vs. '(&# %G.&. 'o. //+0*+, -; Cay /00*12
%31he rules on termination of employment, penalties for infractions, and resort to concerted actions, insofar as
manaerial employees are concerned, are not necessarily the same as those applicable to termination of employment of
ordinary employees. Employers, enerally, are allowed a wider latitude of discretion in terminatin the employment of
manaerial personnel or those of similar ran4 performin functions which by their nature require the employer7s trust and
confidence, than in the case of ordinary ran4!and!file employees "#ruz vs. Cedina %/0+012.
>s reards a manaerial employee, moreover, mere existence of a basis for believin that such employee has
breached the trust of his employer would suffice for dismissal. Broof beyond reasonable doubt is not required, it bein
sufficient that there is some basis for such loss of confidence, such as when the employer has reasonable round to
believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation
therein renders him unworthy of the trust and confidence demanded by his position.
8n the case at bar, petitioner, is tas4ed to perform 4ey functions9 he is bound by an exactin wor4 ethic. He should
have realized that his position requires the full trust and confidence of his employer in every exercise of manaerial
discretion insofar as the conduct of his employer7s business is concerned. However, as found a quo, he committed acts
which betrayed the trust and confidence reposed on him by tamperin with very sensitive equipment at the joint terminal
facility. 8n doin so, he exposed the terminal complex and the residents in adjacent communities to the daner of a major
disaster that may be caused by tan4 explosions and conflaration. Aerily, he committed acts inimical to the interest of his
employer which is mandated by law to observe extraordinary dilience in its operations to ensure the safety of the public.
8ndeed, we are constrained to conclude that petitioner7s admitted infraction as well his past violation of safety reulations
is more than sufficient round for respondent company to terminate the employment of petitioner.
".eles vs. '(&# %G.&. 'o. /-/;)+, ,0 Carch -,,,12
> perusal of &#B87s dismissal notice reveals that it merely stated a conclusion to the effect that the withholdin was
deliberately done to hide alleed malversation or misappropriation without, however, statin the circumstances in support
36
thereof. 8t further mentioned that the position of cashier requires utmost trust and confidence but failed to allee the
breach of trust on the part of petitioner and how the alleed breach was committed. Gn the assumption that there was
indeed a breach, there is no evidence that petitioner was a manaerial employee of respondent &#B8. 8t should be facts
noted that the term 7trust and manaerial employees. 8t may not even be presumed that when there is a shortae, there is
also a correspondin breach of trust. #ash shortaes in a cashier7s wor4 may happen, and when there is no proof that the
same was deliberately done for a fraudulent or wronful purpose, it cannot constitute breach of trust so as to render the
dismissal from wor4 invalid. "5arrol vs. #> %G.&. 'o. /;;-<0, /, 5ebruary -,,,12
Commission of a crime or offense !y the
employee against the person of his employer or
any immediate mem!er of his family or his duly
authori0ed representati#e3
Betitioners cannot downrade the seriousness of their offenses. 3hey committed falsifications. 3hese are crimes
punished by the &evised Benal #ode itself. 3heir commission constitutes serious misconduct. 'or can petitioners avoid
liability by claimin that the S' 5orms are not company records but SSS documents. 3heir use is covered by 8tem 'o. /-
of the Schedule of Gffenses and Benalties which provides ". . . 4nowinly usin falsified record or document." Betitioners
4new that the commission of this offense is punishable by dismissal in view of its seriousness. 3hey cannot therefore
complain of its harshness. "5arrol vs. '(&# %G.&. 'o. /;;-<0, /, 5ebruary -,,,12
"ther causes analogous to the foregoing/
8n the case of 'adura vs. =enuet #onsolidated 8nc., this #ourt spea4in throuh 6ustice >rsenio .izon held inter
alia that a cursory readin of Section /, &.>. /*+*, which enumerates the just causes for which an employer may
terminate an employment with a definite period, is sufficient to convince anyone that illness cannot be included as an
analoous cause "by any stretch of the imaination." "Soriano vs. B'& %G.&. 'o. (!);--), -; >uust /0*+2
73he employer cannot rihtfully dismiss the employee who is sic4 even if he complies with the requirement of the >ct
as to the service of the required notice or payment of the correspondin separation pay, because sic4ness is not willful or
voluntary on the part of the employee.7 "Euenio 'adura v. =enuet #onsolidated, 8nc. %G.&. 'o. (!/**+,, -) >uust
/0:-12
"Hence to constitute an Hanaloous causeI under >rticle -+- of the (abor #ode, the act must be willful and voluntary on
the part of the employee %and illness is not12
$e cannot but aree with BEBS8 that "ross inefficiency" falls within the purview of "other causes analoous to the
foreoin," the constitutes, therefore, just cause to terminate an employee under >rticle -+- of the (abor #ode. Gne is
analoous to another if it is susceptible of comparison with the latter either in eneral or in some specific detail9 or has a
close relationship with the latter. "Gross inefficiency" is closely related to "ross nelect," for both involve specific acts of
omission on the part of the employee resultin in damae to the employer or to his business. "(im vs. '(&# %G.&. 'o.
//+);), -: 6uly /00:12
Totality of Infractions
Betitioner also assails the severity of the penalty imposed upon him allein that he should have merited a
suspension only considerin his past performance.
@nfortunately, petitioner does not appear to be a first offender. >side from the infractions he was found to have
committed, it appears that petitioner falsified the truth when he made a false report about the incident to private
respondent SC# to cover up for his misdeeds. Coreover on previous occasions, petitioner committed violations of
company rules and reulations concernin pricin as a salesman of the company in a way that is detrimental to his
employer. Gn one occasion, he failed to remit collections, so that in /0+:, he was suspended for thirty days. 3hus, the
totality of the infractions that petitioner has committed justifies the penalty of dismissal. "Cendoza vs. '(&# %G.&. 'o.
0)-0), -- Carch /00/12
Ea!ituality
8n other words, considerations of first offense and lenth of service are overshadowed by the seriousness of the
offense. >s to whether an offense is minor or serious will have to be determined accordin to the peculiar facts of each
case. >nd to a shippin company enaed in the transportation of passeners and caroes any delay of its vessels may
reatly affect its business and reputation and expose the company to unmitiated lawsuits for breach of contract and
damaes. "Ailleno vs. '(&# %G.&. 'o. /,+/<;, -: .ecember /00<12
$here the totality of the evidence was sufficient to warrant the dismissal of the employees the law warrants their
dismissal without ma4in any distinction between a first offender and a habitual delinquent. @nder the law, respondent
Cinister is duly mandated to equally protect and respect not only the labor or wor4ers7 side but also the manaement
andDor employers7 side. 3he law, in protectin the rihts of the laborer, authorizes neither oppression nor self!destruction
of the employer. "#olate!Balmolive Bhilippines, 8nc. v. Gple2
Sexual Earassment
REPUBLIC ACT NO+ 9-99
/< 5ebruary /00<
>' >#3 .E#(>&8'G SEL@>( H>&>SSCE'3 @'(>$5@( 8' 3HE ECB(GJCE'3, E.@#>38G' G& 3&>8'8'G
E'A8&G'CE'3, >'. 5G& G3HE& B@&BGSES
Section /. 3itle. 3his >ct shall be 4nown as the ">nti!Sexual Harassment >ct of /00<."
Section -. .eclaration of Bolicy. 3he State shall value the dinity of every individual, enhance the development of its
human resources, uarantee full respect for human rihts, and uphold the dinity of wor4ers, employees, applicants for
employment, students or those underoin trainin, instruction or education. 3owards this end, all forms of sexual harassment
in the employment, education or trainin environment are hereby declared unlawful.
Section ;. $or4 Education or 3rainin!related Sexual Harassment .efined. $or4, education of trainin!related sexual
harassment is committed by an employer, employee, manaer, supervisor, aent of the employer, teacher, instructor,
professor, coach, trainor, or any other person who, havin authority, influence or moral ascendancy over another in a wor4 or
37
trainin or education environment, demands, requests or otherwise requires any sexual favor from the other, reardless of
whether the demand, request or requirement for submission is accepted by the object of said >ct.
"a2 8n a wor4!related or employment environment, sexual harassment is committed when?
"/2 3he sexual favor is made as a condition in the hirin or in the employment, re!employment or continued
employment of said individual, or in rantin said individual favorable compensation, terms, conditions,
promotions, or privilees9 or the refusal to rant the sexual favor results in limitin, sereatin or classifyin
the employee which in any way would discriminate, deprive or diminish employment opportunities or
otherwise adversely affect said employee9
"-2 3he above acts would impair the employee7s rihts or privilees under existin labor laws9 or
";2 3he above acts would result in an intimidatin, hostile, or offensive environment for the employee.
"b2 8n an education or trainin environment, sexual harassment is committed?
"/2 >ainst one who is under the care, custody or supervision of the offender9
"-2 >ainst one whose education, trainin, apprenticeship or tutorship is entrusted to the offender9
";2 $hen the sexual favor is made a condition to the ivin of a passin rade, or the rantin of honors and
scholarships, or the payment of a stipend, allowance or other benefits, privilees or considerations9 or
")2 $hen the sexual advances result in an intimidatin, hostile or offensive environment for the student, trainin
or apprentice.
>ny person who directs or induces another to commit any act of sexual harassment as herein defined, or who cooperates
in the commission thereof by another without which it would not have been committed, shall also be held liable under this >ct.
Section ). .uty of the Employer or Head of Gffice in a $or4!related, Education or 3rainin Environment. 8t shall be the
duty of the employer or the head of the wor4!related, educational or trainin environment or institution, to prevent or deter the
commission of acts of sexual harassment and to provide the procedures for the resolution, settlement or prosecution of acts of
sexual harassment . 3owards this end, the employer or head of office shall?
"a2 Bromulate appropriate rules and reulations in consultation with an jointly approved by the employees or
students or trainees, throuh their duly desinated representatives, prescribin the procedure for the investiation of sexual
harassment cases and the administrative sanctions therefor.
>dministrative sanctions shall not be a bar to prosecution in the proper courts for unlawful acts of sexual harassment.
3he said rules and reulations issued pursuant to this sub!section "a2 shall include, amon others, uidelines on proper
decorum in the wor4place and educational or trainin institutions.
"b2 #reate a committee on decorum and investiation of cases on sexual harassment. 3he committee shall conduct
meetins, as the case may be, with officers and employees, teachers, instructors, professors, coaches, trainors and students
or trainees to increase understandin and prevent incidents of sexual harassment. 8t shall also conduct the investiation of
alleed cases constitutin sexual harassment.
8n the case of a wor4!related environment, the committee shall be composed of at least one "/2 representative each from
the manaement, the union, if any, the employees form the supervisory ran4, and from the ran4 and file employees.
8n the case of the educational or trainin institution, the committee shall be composed of at least one "/2 representative
from the administration, the trainors, teachers, instructors, professors or coaches and students or trainees, as the case may be.
3he employer or head of office, educational or trainin institution shall disseminate or post a copy of this >ct for the information
of all concerned.
Section. (iability of the Employer, Head of Gffice, Educational or 3rainin 8nstitution. 3he employer or head of office,
educational or trainin institution shall be solidarity liable for damaes arisin from the acts of sexual harassment committed in
the employment, education or trainin environment if the employer or head of office, educational or trainin institution is
informed of such acts by the offended party and no immediate action is ta4en thereon.
Section :. 8ndependent >ction for .amaes. 'othin in this >ct shall preclude the victim of wor4, education or trainin!
related sexual harassment from institutin a separate and independent action for damaes and other affirmative relief.
Section *. Benalties. >ny person who violates the provisions of this >ct shall, upon conviction, be penalized by
imprisonment of not less than one "/2 month nor more than six ":2 months, or a fine of not less than 3en thousand pesos
"B/,,,,,2 nor more than 3wenty thousand pesos "B-,,,,,2 or both such fine and imprisonment at the discretion of the court.
>ny action arisin from the violation of the provisions of this >ct shall prescribe in three ";2 years.
$ith the findin that there is no substantial evidence of the imputed immoral acts, it follows that the alleed violation
of the #ode of Ethics overnin school teachers would have no basis. Brivate respondent utterly failed to show that
petitioner too4 advantae of her position to court her student. 8f the two eventually fell in love, despite the disparity in their
aes and academic levels, this only lends substance to the truism that the heart has reasons of its own which reason
does not 4now. =ut, definitely, yieldin to this entle and universal emotion is not to be so casually equated with
immorality. 3he deviation of the circumstances of their marriae from the usual societal pattern cannot be considered as a
defiance of contemporary social mores.
8t would seem quite obvious that the avowed policy of the school in rearin and educatin children is bein
unnecessarily bannered to justify the dismissal of petitioner. 3his policy, however, is not at odds with and should not be
capitalized on to defeat the security of tenure ranted by the #onstitution to labor. 8n termination cases, the burden of
provin just and valid cause for dismissin an employee rests on the employer and his failure to do so would result in a
findin that the dismissal is unjustified.
"#hua!Nua vs. #lave %G.&. 'o. )0<)0, ;, >uust /00,12
A3t/o!i0ed Ca3ses
Closure of esta!lishment and reduction of personnel/ - The employer may also terminate the employment of any
employee due to the installation of la!or-sa#ing de#ices. redundancy. retrenchment to pre#ent losses or the closing or
cessation of operation of the esta!lishment or underta,ing unless the closing is for the purpose of circum#enting the
pro#isions of this title. !y ser#ing a +ritten notice on the +or,ers and the Department of a!or and Employment at least
one G;H month !efore the intended date thereof/ In case of termination due to the installation of la!or-sa#ing de#ices or
redundancy. the +or,er affected there!y shall !e entitled to a separation pay e6ui#alent to at least one G;H month pay or
to at least one G;H month pay for e#ery year of ser#ice. +hiche#er is higher/ In case of retrenchment to pre#ent losses and
in cases of closures or cessation of operations of esta!lishment or underta,ing not due to serious !usiness losses or
financial re#erses. the separation pay shall !e e6ui#alent to one G;H month pay or at least one-half G;*<H month pay for
e#ery year of ser#ice. +hiche#er is higher/ 4 fraction of at least six G@H months shall !e considered one G;H +hole year/
">rticle -+; of the (abor #ode2

Disease as ground for termination/ - 4n employer may terminate the ser#ices of an employee +ho has !een found to
!e suffering from any disease and +hose continued employment is prohi!ited !y la+ or is pre(udicial to his health as +ell
38
as the health of his co-employees5 2ro#ided. That he is paid separation pay e6ui#alent to at least one month salary or to
one-half month salary for e#ery year of ser#ice. +hiche#er is greater. a fraction of at least six months !eing considered as
one +hole year/ ">rticle -+) of the (abor #ode2
>uthorized causes for the termination of employment?
"a2 installation of labor!savin devices9
"b2 redundancy9
"c2 retrenchment to prevent losses9 and
"d2 closin or cessation of operation of the establishment or underta4in unless the closin is for the
purpose of circumventin the provisions of law.
"e2 disease which renders continued employment prohibited by law or prejudicial to his health or to the
health of his fellow employees.
Installation of la!or-sa#ing de#ices
3he installation of labor!savin devices contemplates the installation of machinery to effect economy and efficiency
in its method of production. "Ede >pparel, 8nc. vs. '(&# %G.&. 'o. /-/;/), /- 5ebruary /00+1 citin Bhil. Sheet Cetal
$or4ers7 @nion vs. #ourt of 8ndustrial &elations %+; Bhil. )<;12
Redundancy
&edundancy exists where the services of an employee are in excess of what would reasonably be demanded by the
actual requirements of the enterprise. > position is redundant when it is superfluous, and superfluity of a position or
positions could be the result of a number of factors, such as the overhirin of wor4ers, a decrease in the volume of
business or the droppin of a particular line or service previously manufactured or underta4en by the enterprise. >n
employer has no leal obliation to 4eep on the payroll employees more than the number needed for the operation of the
business. "Ede >pparel, 8nc. vs. '(&# %G.&. 'o. /-/;/), /- 5ebruary /00+12
3he preroative of manaement to conduct its own business affairs to achieve its purposes cannot be denied.
Canaement is at liberty, absent any malice on its part, to abolish positions which it deems no loner necessary "Great
Bacific (ife vs. '(&#, /++ S#&> /;0 %/00,12.
Coreover, the records of the present case clearly show that respondent court7s decision is amply supported by
evidence and it did not err in its findins, includin the reason for the retrenchment?
$hen defendant!appellant was faced with the world!wide recession of the airline industry resultin in a
slow down in the company7s rowth particularly in the reional operation ">sian >rea2 where the >irbus ;,,
operates. 8t had no choice but to adopt cost cuttin measures, such as cuttin down services, number of
frequencies of flihts, and reduction of the number of flyin points for the >!;,, fleet. >s a result, defendant!
appellant had to lay off >!;,, pilots, includin plaintiff!appellee, which it found to be in excess of what is
reasonably needed.
>ll these considered, we find sufficient factual and leal basis to conclude that petitioner7s termination from
employment was for an authorized cause, for which he was iven ample notice and opportunity to be heard, by
respondent company. 'o error nor rave abuse of discretion, therefore, could be attributed to respondent appellate court.
"(aureano vs. #> %G.&. 'o. //)**:, ,-5ebruary -,,,12
Retrenchment
&etrenchment, is used interchaneably with the term "lay!off." 8t is the termination of employment initiated by the
employer throuh no fault of the employee7s and without prejudice to the latter, resorted to by manaement durin periods
of business recession, industrial depression, or seasonal fluctuations, or durin lulls occasioned by lac4 of orders,
shortae of materials, conversion of the plant for a new production proram or the introduction of new methods or more
efficient machinery, or of automation. Simply put, it is an act of the employer of dismissin employees because of losses
in the operation of a business, lac4 of wor4, and considerable reduction on the volume of his business, a riht consistently
reconized and affirmed by this #ourt. "Sebuuero vs. '(&# %G.&. 'o. //<;0), -* September /00<12
%31here are three basic requisites for a valid retrenchment?
"/2 the retrenchment is necessary to prevent losses and such losses are proven9
"-2 written notice to the employees and to the .epartment of (abor and Employment at least one month
prior to the intended date of retrenchment9 and
";2 payment of separation pay equivalent to one month pay or at least /D- month pay for every year of
service, whichever is hiher.
>s for the 58&S3 &EN@8S83E, whether or not an employer would imminently suffer serious or substantial losses for
economic reasons is essentially a question of fact for the (abor >rbiter and the '(&# to determine. Here, both the (abor
>rbiter and the '(&# found that the private respondent was sufferin and would continue to suffer serious losses, thereby
justifyin the retrenchment of some of its employees, includin the petitioners. $e are not prepared to disreard this
findin of fact. 8t is settled that findins of quasi!judicial aencies which have acquired expertise in the matters entrusted
to their jurisdiction are accorded by this #ourt not only with respect but with finality if they are supported by Substantial
Evidence. T.
3he &EN@8&ECE'3 G5 'G38#E to both the employees concerned and the .epartment of (abor and Employment
".G(E2 is mandatory and must be written and iven at least one month before the intended date of retrenchment. 8n this
case, it is undisputed that the petitioners were iven notice of the temporary lay!off. 3here is, however, no evidence that
any written notice to permanently retrench them was iven at least one month prior to the date of the intended
retrenchment. 3he '(&# found that G38 conveyed to the petitioners the impossibility of recallin them due to the
continued unavailability of wor4. =ut what the law requires is a written notice to the employees concerned and that
requirement is mandatory. 3he notice must also be iven at least one month in advance of the intended date of
retrenchment to enable the employees to loo4 for other means of employment and therefore to ease the impact of the loss
of their jobs and the correspondin income. 3hat they were already on temporary lay!off at the time notice should have
been iven to them is not an excuse to foreo the one!month written notice because by this time, their lay!off is to become
permanent and they were definitely losin their employment.
3here is also nothin in the records to prove that a written notice was ever iven to the .G(E as required by law.
G387s position paper, offer of exhibits, #omment to the Betition, and Cemorandum in this case do not mention of any such
written notice. 3he law requires two notices one to the employeeDs concerned and another to the .G(E not just one. 3he
notice to the .G(E is essential because the riht to retrench is not an absolute preroative of an employer but is subject
to the requirement of law that retrenchment be done to prevent losses. 3he .G(E is the aency that will determine
whether the planned retrenchment is justified and adequately supported by facts.
$ith respect to the B>JCE'3 G5 SEB>&>38G' B>J, the '(&# found that G38 offered to ive the petitioners their
separation pay but that the latter rejected such offer which was accepted only by -- out of the ;+ oriinal complainants in
this case. >s to when this offer was made was not, however, proven. >ll that the parties, the (abor >rbiter and the '(&#
39
stated in their respective pleadins and decisions was that the offer and payment were made durin the pendency of the
illeal dismissal case with the (abor >rbiter. =ut with or without this offer of separation pay, our conclusion would remain
the same? that the retrenchment of the petitioners is defective in the face of our findin that the required notices to both
the petitioners and the .G(E were not iven.
"Sebuuero vs. '(&# %G.&. 'o. //<;0), -* September /00<12
8n its ordinary connotation, the phrase "3G B&EAE'3 (GSSES" means that retrenchment or termination of the
services of some employees is authorized to be underta4en by the employer sometime before the anticipated losses are
actually sustained or realized. 8t is not, in other words, the intention of the lawma4er to compel the employer to stay his
hand and 4eep all his employees until after losses shall have in fact materialized. 8f such an intent were expressly written
into the law, that law may well be vulnerable to constitutional attac4 as unduly ta4in property from one man to be iven to
another.
>t the other end of the spectrum, it seems equally clear that not every asserted possibility of loss is sufficient leal
warrant for the reduction of personnel. 8n the nature of thins, the possibility of incurrin losses is constantly present, in
reater or lesser deree, in the carryin on of business operations, since some, indeed many, of the factors which impact
upon the profitability or viability of such operations may be substantially outside the control of the employer.
"&evidad vs. '(&# %G.&. 'o. ////,<, -* 6une /00<12
>nent the mandatory written notice to be filed with the labor department one month before retrenchment, we are of
the considered opinion that the proceedins had before the voluntary arbitrator, where both parties were iven the
opportunity to be heard and present evidence in their favor, constitute substantial compliance with the requirement of the
law. 3he purpose of this notice requirement is to enable the proper authorities to ascertain whether the closure of the
business is bein done in ood faith and is not just a pretext for evadin compliance with the just obliations of the
employer to the affected employees. 8n fact, the voluntary arbitration proceedins more than satisfied the intendment of
the law considerin that the parties were accorded the benefit of a hearin, in addition to the riht to present their
respective position papers and documentary evidence. "&evidad vs. '(&# %G.&. 'o. ////,<, -* 6une /00<12
&etrenchment, in contrast to redundancy, is an economic round to reduce the number of employees. 8n order to be
justified, the termination of employment by reason of retrenchment must be due to business losses or reverses which are
serious, actual and real. 'ot every loss incurred or expected to be incurred by the employer will justify retrenchment,
since, in the nature of thins, the possibility of incurrin losses is constantly present, in reater or lesser deree, in
carryin on the business operations. &etrenchment is normally resorted to by manaement durin periods of business
reverses and economic difficulties occasioned by such events as recession, industrial depression, or seasonal
fluctuations. 8t is an act of the employer of reducin the wor4 force because of losses in the operation of the enterprise,
lac4 of wor4, or considerable reduction on the volume of business. &etrenchment is, in many ways, a measure oflast
resort when other less drastic means have been tried and found to be inadequate. > lull caused by lac4 of orders or
shortae of materials must be of such nature as would severely affect the continued business operations of the employer
to the detriment of all and sundry if not properly addressed. 3he institution of "new methods or more efficient machinery,
or of automation" is technically a round for termination of employment by reason of installation of labor!savin devices
but where the introduction of these methods is resorted to not merely to effect reater efficiency in the operations of the
business but principally because of serious business reverses and to avert further losses, the device could then verily be
considered one of retrenchment. "Ede >pparel, 8nc. vs. '(&# %G.&. 'o. /-/;/), /- 5ebruary /00+12
Grantin that the /: Cay /0++ termination was a retrenchment scheme, and the ;/ 6uly /0++ and the -+ 5ebruary
/0+0 were due to closure, the law requires the rantin of the same amount of separation benefits to the affected
employees in any of the cases. 3he respondent arued that the ivin of more separation benefit to the second and third
batches of employees separated was their expression of ratitude and benevolence to the remainin employees who
have tried to save and ma4e the company viable in the remainin days of operations. 3his justification is not plausible.
3here are wor4ers in the first batch who have rendered more years of service and could even be said to be more efficient
than those separated subsequently, yet they did not receive the same reconition. @nderstandably, their bein retained
loner in their job and be not included in the batch that was first terminated, was a concession enouh and may already
be considered as favor ranted by the respondents to the prejudice of the complainants. >s it happened, there are
wor4ers in the first batch who have rendered more years in service but received lesser separation pay, because of that
arranement made by the respondents in payin their termination benefits. . .
#learly, there was impermissible discrimination aainst the private respondents in the payment of their separation
benefits. 3he law requires an employer to extend equal treatment to its employees. 8t may not, in the uise of exercisin
manaement preroatives, rant reater benefits to some and less to others. Canaement preroatives are not absolute
preroatives but are subject to leal limits, collective barainin areements, or eneral principles of fair play and justice
"@S3 vs. '(&#, /0, S#&> *<+2. >rticle -+; of the (abor #ode, as amended, protects wor4ers whose employment is
terminated because of closure of the establishment or reduction of personnel ""=usinessday 8nformation vs. '(&# %G.&.
'o. /,;<*<, ,< >pril /00;12
>lthouh, as a eneral rule, &espondent company has the preroative and riht to resort to temporary lay!off, such
riht is li4ewise limited to a period of six ":2 months applyin >rt. -+: of the (abor #ode on suspension of employer!
employee relationship not exceedin six ":2 months.
8n this case, respondent company was justified in the temporary lay!off of some of its employees. However,
&espondent company should have recalled them after the end of the six month period or at the least reasonably informed
them "complainants2 that the &espondent company is still not in a position to recall them due to the continuous drop of
demand in the export mar4et "locally or internationally2, thereby extendin the temporary lay!off with a definite period of
recall and if the same cannot be met, then the company should implement retrenchment and pay its employees
separation pay. 5ailin in this reard, respondent company chose not to recall nor send notice to the complainants after
the lapse of the six ":2 month period. Hence, there is in this complaint a clear case of constructive dismissal. $hile there
is a valid reason for the temporary lay!off, the same is also limited to a duration of six months. 3hereafter the employees,
complainants herein, are entitled under the law ">rt. -+:2 to be recalled bac4 to wor4. >s result thereof, the temporary lay!
off of the complainants from 6anuary --, /00/ "date of lay!off2 to 6uly --, /00/ is valid, however, thereafter complainants
are already entitled to bac4waes, in view of constructive dismissal, due to the fact that they were no loner recalled bac4
to wor4. #omplainants cannot be placed on temporary lay!off forever. 3he limited period of six ":2 months is based
provisionally too prevent circumvention on the riht to security of tenure and to prevent rave abuse of discretion on the
part of the employer. However, since durin the trial it was proven, as testified by the Aice!Bresident for mar4etin and
personnel manaer, that the lac4 of wor4 and selection of personnel continued to persist and considerin the antaonism
and hostility displayed by both litiants, as observed by this >rbiter, durin the trial of this case and in view of the strained
relations between the parties, reinstatement of the complainants would not be prudent.
"Sebuuero vs. '(&# %G.&. 'o. //<;0), -* September /00<12
Closure
40
@nder >rticle -+; of the (abor #ode, the closure of a business establishment or reduction of personnel is a round
for the termination of the services of any employee unless the closin or retrenchin is for the purpose of circumventin
the provision of the law. =ut while business reverses can be a just cause for terminatin employees, these must be
sufficiently proved by the employer.
3he case of Suar (opez #orporation v. 5ederation of 5ree $or4ers, lays down the eneral standards under which
an employer may retrench or reduce the number of his employees. 58&S3(J, the losses expected should be substantial
and not merely de minimis in extent. 8f the loss purportedly souht to be forestalled by retrenchment is clearly shown to be
insubstantial and inconsequential in character, the bonafide nature of the retrenchment would appear to be seriously in
question. SE#G'.(J, the substantial loss apprehended must be reasonably imminent, as such imminence can be
perceived objectively and in ood faith by the employer. 3here should, in other words, be a certain deree of urency for
the retrenchment, which is after all a drastic recourse with serious consequences for the livelihood of the employees
retired or otherwise laid!off. =ecause of the far!reachin nature of the retrenchment, it must, 3H8&.(J, be reasonably
necessary and li4ely to effectively prevent the expected losses.
(>S3(J, but certainly not the least important, the alleed losses if already incurred, and the expected imminent
losses souht to be forestalled, must be proved by sufficient and convincin evidence.
"=alasbas vs. '(&# %G.&. 'o. +<-+:, -) >uust /00-12
>rticle -+; of the (abor #ode, however, spea4s of a permanent retrenchment as opposed to a temporary lay!off as
is the case here. 3here is no specific provision of law which treats of a temporary retrenchment or lay!off and provides for
the requisites in effectin it or a period or duration therefor. 3hese employees cannot forever be temporarily laid!off. 3o
remedy this situation or fill the hiatus, >rticle -+: may be applied but only by analoy to set a specific period that
employees may remain temporarily laid!off or in floatin status. Six months is the period set by law that the operation of a
business or underta4in may be suspended thereby suspendin the employment of the employees concerned. 3he
temporary lay!off wherein the employees li4ewise cease to wor4 should also not last loner than six months. >fter six
months, the employees should either be recalled to wor4 or permanently retrenched followin the requirements of the law,
and that failin to comply with this would be tantamount to dismissin the employees and the employer would thus be
liable for such dismissal. "Sebuuero vs. '(&# %G.&. 'o. //<;0), -* September /00<12
$e note that Section - of &ule L8A quoted above requires the notice to specify "the particular acts or omissions
constitutin the round for his dismissal", a requirement which is obviously applicable where the round for dismissal is
the commission of some act or omission fallin within >rticle -+- of the (abor #ode. >ain, Section < ives the employee
the riht to answer and to defend himself aainst "the alleations stated aainst him in the notice of dismissal". 8t is such
alleations by the employer and any counter!alleations that the employee may wish to ma4e that need to be heard
before dismissal is effected. 3hus, Section < may be seen to envisae chares aainst an employee constitutin one or
more of the just causes for dismissal listed in >rticle -+- of the (abor #ode. $here, as in the instant case, the round for
dismissal or termination of services does not relate to a blameworthy act or omission on the part of the employee, there
appears to us no need for an investiation and hearin to be conducted by the employer who does not, to bein with,
allee any malfeasance or non!feasance on the part of the employee. 8n such case, there are no alleations which the
employee should refute and defend himself from. 3hus, to require petitioner $iltshire to hold a hearin, at which private
respondent would have had the riht to be present, on the business and financial circumstances compellin retrenchment
and resultin in redundancy, would be to impose upon the employer an unnecessary and inutile hearin as a condition for
leality of termination. "$iltshire 5ile #o., 8nc. vs. '(&# %G.&. 'o. +--)0, ,* 5ebruary /00/12
=roadly spea4in, there appears no complete dissolution of petitioner7s business underta4in but the relocation of
petitioner7s plant to =atanas, in our view, amounts to cessation of petitioner7s business operations in Ca4ati. 8t must be
stressed that the phrase "closure or cessation of operation of an establishment or underta4in not due to serious business
losses or reverses" under >rticle -+; of the (abor #ode includes both the complete cessation of all business operations
and the cessation of only part of a company7s business. 8n Bhilippine 3obacco 5lue!#urin O &edryin #orp. vs. '(&#, a
company transferred its tobacco processin plant in =alintawa4, Nuezon #ity to #andon, 8locos Sur. 3he company therein
did not actually close its entire business but merely relocated its tobacco processin and redryin operations to another
place. Jet, this #ourt considered the transfer as closure not due to serious business losses for which the wor4ers are
entitled to separation pay.
3here is no doubt that petitioner has leitimate reason to relocate its plant because of the expiration of the lease
contract on the premises it occupied. 3hat is its preroative. =ut even thouh the transfer was due to a reason beyond its
control, petitioner has to accord its employees some relief in the form of severance pay. 3hus, in E. &azon, 8nc. vs.
Secretary, petitioner therein provides arrastre services in all piers in South Harbor, Canila, under a manaement contract
with the Bhilippine Borts >uthority. =efore the expiration of the term of the contract, the BB> cancelled the said contract
resultin in the termination of employment of wor4ers enaed by petitioner. Gbviously, the cancellation was not souht,
much less desired by petitioner. 'evertheless, this #ourt required petitioner therein to pay its wor4ers separation pay in
view of the cessation of its arrastre operations.
"#heniver .eco Brint 3echnics #orporation vs. '(&# %G.&. 'o. /--+*:, /* 5ebruary -,,,12
8t is clear that >rticle -+; of the (abor #ode applies in cases of closures of establishment and reduction of personnel.
3he peculiar circumstances in the case at bar, however, involves neither the closure of an establishment nor a reduction
of personnel as contemplated under the aforesaid article. $hen the Batalon #oconut Estate was closed because a lare
portion of the estate was acquired by .>& pursuant to #>&B, the ownership of that lare portion of the estate was
precisely transferred to BE>&> and ultimately to the petitioners as members thereof and as ararian lot beneficiaries.
Hence, >rticle -+; of the (abor #ode is not applicable to the case at bench.
Even assumin, aruendo, that the situation in this case were a closure of the business establishment called Batalon
#oconut Estate of private respondents, still the petitionersDemployees are not entitled to separation pay. 3he closure
contemplated under >rticle -+; of the (abor #ode is a unilateral and voluntary act on the part of the employer to close the
business establishment as may be leaned from the wordin of the said leal provision that "3he employer may also
terminate the employment of any employee due to. . .". 3he use of the word "may," in a statute, denotes that it is directory
in nature and enerally permissive only. 3he "plain meanin rule" or verba leis in statutory construction is thus applicable
in this case. $here the words of a statute are clear, plain and free from ambiuity, it must be iven its literal meanin and
applied without attempted interpretation.
8n other words, >rticle -+; of the (abor #ode does not contemplate a situation where the closure of the business
establishment is forced upon the employer and ultimately for the benefit of the employees.
"'5( vs. '(&# %G.&. 'o. /-**/+, ,- Carch -,,,12
=roadly spea4in, there appears no complete dissolution of petitioner7s business underta4in but the relocation of
petitioner7s plant to =atanas, in our view, amounts to cessation of petitioner7s business operations in Ca4ati. 8t must be
stressed that the phrase "closure or cessation of operation of an establishment or underta4in not due to serious business
losses or reverses" under >rticle -+; of the (abor #ode includes both the complete cessation of all business operations
and the cessation of only part of a company7s business. 8n Bhilippine 3obacco 5lue!#urin O &edryin #orp. vs. '(&#, a
company transferred its tobacco processin plant in =alintawa4, Nuezon #ity to #andon, 8locos Sur. 3he company therein
41
did not actually close its entire business but merely relocated its tobacco processin and redryin operations to another
place. Jet, this #ourt considered the transfer as closure not due to serious business losses for which the wor4ers are
entitled to separation pay. "#heniver .eco Brint 3echnics #orporation vs. '(&# %G.&. 'o. /--+*:, /* 5ebruary -,,,12
Disease
3he applicable rule on the round for dismissal invo4ed aainst him is Section +, &ule 8, =oo4 A8, of the &ules and
&eulations 8mplementin the (abor #ode readin as follows?
Sec. +. .isease as a round for dismissal. $here the employee suffers from a disease and his
continued employment is prohibited by law or prejudicial to his health or to the health of his co!employees,
the employer shall not terminate his employment unless there is a certification by a competent public
health authority that the disease is of such nature or at such a stae that it cannot be cured within a period
of six ":2 months even with proper medical treatment. 8f the disease or ailment can be cured within the
period, the employer shall not terminate the employee but shall as4 the employee to ta4e a leave. 3he
employer shall reinstate such employee to his former position immediately upon the restoration of his
normal health.
3he record does not contain the certification required by the above rule. 3he medical certificate offered by the
petitioner came from its own physician, who was not a "competent public health authority," and merely stated the
employee7s disease, without more. $e may surmise that if the required certification was not presented, it was because
the disease was not of such a nature or seriousness that it could not be cured within a period of six months even with
proper medical treatment. 8f so, dismissal was unquestionably a severe and unlawful sanction.
"#ebu &oyal Blant vs. .eputy Cinister Gf (abor %G.&. 'o. (!<+:;0, /- >uust /0+*12
D3e P!ocess
3he essence of due process is simply an opportunity to be heard, or as applied to administrative proceedins, an
opportunity to explain one7s side or an opportunity to see4 a reconsideration of the action or rulin complained of.
> formal or trial!type hearin is not at all times and in all instances essential. 3he requirements are satisfied where
the parties are fair and reasonable opportunity to explain their side of the controversy at hand. $hat is frowned upon is
the absolute lac4 of notice and hearinT..
"Stayfast Bhilippines #orp. vs. '(&# %-/+ S#&> <0:, /00;12
> formal trial!type hearin is not at all times and in all instances essential to due process. 8t is enouh that the parties
are iven a fair and reasonable opportunity to explain their respective sides of the controversy and to present supportin
evidence on which a fair decision can be based. >ccordin to (lora Cotors 8nc. vs. .rilon, this type of hearin is not even
mandatory in cases of complainants loded before the (abor >rbiter. >nd in Sajonas vs. '(&#, we observed as follows?
5inally, on the matter of due process which petitioners claim was denied them by private respondents
durin the investiation which led to their dismissal, we aree with respondents that althouh the aforesaid
investiations were not conducted in the manner of a reular trial in court, the elements of due process, namely
the riht to be informed of the chares, to be present and to be heard, were accorded petitioners. 8n said
investiations, petitioners freely and voluntarily answered the questions and even made further statements in
their defense durin the concludin staes thereof.
">beria vs. '(&# %G.&. 'o. /,-,-;, ,: 'ovember /00-12
">CB(E GBBG&3@'83J" connotes every 4ind of assistance that manaement must accord the employee to enable
him to prepare adequately for his defense includin leal representation. "Canebo vs. '(&# %G.&. 'o. /,**-/, /,
6anuary /00)12
3he record of this case is bereft of any indication that a hearin or other atherin was in fact held where private
respondent #alani was iven a reasonable opportunity to confront his accuser"s2 and to defend aainst the chares
made by the latter. Betitioner #orporation7s "prior consultation" with the labor union with which private respondent #alani
was affiliated, was leally insufficient. So far as the record shows, neither petitioner nor the labor union actually advised
#alani of the matters at issue. 3he Cemorandum of petitioner7s Bersonnel Canaer certainly offered no helpful
particulars. 8t is important to stress that the rihts of an employee whose services are souht to be terminated to be
informed beforehand of his proposed dismissal "or suspension2 as well as of the reasons therefor, and to be afforded an
adequate opportunity to defend himself from the chares levelled aainst him, are rihts BE&SG'>( 3G 3HE
ECB(GJEE. 3hose rihts were not satisfied by petitioner #orporation7s obtainin the consent of or consultin with the
labor union9 such consultation or consent was not a substitute for actual observance of those rihts of private respondent
#alani. 3he employee can waive those rihts, if he so chooses, but the union cannot waive them for him. 3hat the
private respondent simply 74ept silent" all the while, is not adequate to show an effective waiver of his rihts. 'otice and
opportunity to be heard must be accorded by an employer even thouh the employee does not affirmatively demand
them. "#entury 3extile Cills, 8nc. vs. '(&# %G.&. 'o. **+<0, -< Cay /0++12
WE&2EI Doctrine
3he #ourt holds that the policy of orderin the reinstatement to the service of an employee without loss of seniority
and the payment of his waes durin the period of his separation until his actual reinstatement but not exceedin three ";2
years without qualification or deduction, when it appears he was not afforded due process, althouh his dismissal was
found to be for just and authorized cause in an appropriate proceedin in the Cinistry of (abor and Employment, should
be re!examined. 8t will be hihly prejudicial to the interests of the employer to impose on him the services of an employee
who has been shown to be uilty of the chares that warranted his dismissal from employment. 8ndeed, it will demoralize
the ran4 and file if the undeservin, if not undesirable, remains in the service.
3hus in the present case, where the private respondent, who appears to be of violent temper, caused trouble durin
office hours and even defied his superiors as they tried to pacify him, should not be rewarded with re!employment and
bac4 waes. 8t may encourae him to do even worse and will render a moc4ery of the rules of discipline that employees
are required to observe. @nder the circumstances the dismissal of the private respondent for just cause should be
maintained. He has no riht to return to his former employer.
However, the petitioner must nevertheless be held to account for failure to extend to private respondent his riht to
an investiation before causin his dismissal. 3he rule is explicit as above discussed. 3he dismissal of an employee must
be for just or authorized cause and after due process. Betitioner committed an infraction of the second requirement. 3hus,
it must be imposed a sanction for its failure to ive a formal notice and conduct an investiation as required by law before
dismissin petitioner from employment. #onsiderin the circumstances of this case petitioner must indemnify the private
respondent the amount of B/,,,,.,,. 3he measure of this award depends on the facts of each case and the ravity of the
omission committed by the employer. "$E'BH8( vs. '(&# %G.&. 'o. +,<+*, ,+ 5ebruary /0+012
WE&2EI Doctrine a!andoned !y Serrano #s/ &RC
42
8n sum, we hold that if in proceedins for reinstatement under >rt. -+;, it is shown that the termination of
employment was due to an authorized cause, then the employee concerned should not be ordered reinstated even
thouh there is failure to comply with the ;,!day notice requirement. 8nstead, he must be ranted separation pay in
accordance with >rt. -+;,T
xxx xxx xxx
8f the employee7s separation is without cause, instead of bein iven separation pay, he should be reinstated. 8n
either case, whether he is reinstated or only ranted separation pay, he should be paid full bac4waes if he has been laid
off without written notice at least ;, days in advance.
Gn the other hand, with respect to dismissals for cause under >rt. -+-, if it is shown that the employee was
dismissed for any of the just causes mentioned in said >rt. -+-, then, in accordance with that article, he should not be
reinstated. However, he must be paid bac4waes from the time his employment was terminated until it is determined that
the termination of employment is for a just cause because the failure to hear him before he is dismissed renders the
termination of his employment without leal effect.
"Serrano vs. '(&# %G.&. 'o. //*,),, -* 6anuary -,,,12
Liolation of procedural due process not a #iolation of the Due 2rocess Clause of the Constitution
Aiolation of 'otice &equirement 'ot a .enial of .ue Brocess
3he cases cited by both 6ustices Buno and Bananiban refer, however, to the denial of due process by the State,
which is not the case here. 3here are three reasons why, on the other hand, violation by the employer of the notice
requirement cannot be considered a denial of due process resultin in the nullity of the employee7s dismissal or layoff.
3he 58&S3 is that the Due 2rocess Clause of the Constitution is a limitation on go#ernmental po+ers. 8t does not
apply to the exercise of private power, such as the termination of employment under the (abor #ode. 3his is plain from
the text of >rt. 888, V/ of the #onstitution, viz.? "'o person shall be deprived of life, liberty, or property without due process
of law. . . ." 3he reason is simple? Gnly the State has authority to ta4e the life, liberty, or property of the individual. 3he
purpose of the .ue Brocess #lause is to ensure that the exercise of this power is consistent with what are considered
civilized methods.
3he SE#G'. &E>SG' is that notice and hearin are required under the .ue Brocess #lause before the power of
oranized society are brouht to bear upon the individual. 3his is obviously not the case of termination of employment
under >rt. -+;. Eere the employee is not faced +ith an aspect of the ad#ersary system. 3he purpose for requirin a ;,!
day written notice before an employee is laid off is not to afford him an opportunity to be heard on any chare aainst him,
for there is none. 3he purpose rather is to ive him time to prepare for the eventual loss of his job and the .G(E an
opportunity to determine whether economic causes do exist justifyin the termination of his employment.
Even in cases of dismissal under >rt. -+-, the purpose for the requirement of notice and hearin is not to comply
with .ue Brocess #lause of the #onstitution. 3he time for notice and hearin is at the trial stae. 3hen that is the time we
spea4 of notice and hearin as the essence of procedural due process. 3hus, compliance by the employer with the notice
requirement before he dismisses an employee does not foreclose the riht of the latter to question the leality of his
dismissal. >s >rt. -**"b2 provides, ">ny decision ta4en by the employer shall be without prejudice to the riht of the
wor4er to contest the validity or leality of his dismissal by filin a complaint with the reional branch of the 'ational (abor
&elations #ommission."
8ndeed, to contend that the notice requirement in the (abor #ode is an aspect of due process is to overloo4 the fact
that >rt. -+; had its oriin in >rt. ;,- of the Spanish #ode of #ommerce of /++- which ave either party to the employer!
employee relationship the riht to terminate their relationship by ivin notice to the other one month in advance. 8n lieu of
notice, an employee could be laid off by payin him a mesada equivalent to his salary for one month. -+ 3his provision
was repealed by >rt. --*, of the #ivil #ode, which too4 effect on >uust ;,, /0<,. =ut on 6une /-, /0<), &.>. 'o. /,<-,
otherwise 4nown as the 3ermination Bay (aw, was enacted revivin the mesada. Gn 6une -/, /0<*, the law was
amended by &.>. 'o. /*+* providin for the ivin of advance notice or the payment of compensation at the rate of one!
half month for every year of service.
3he 3ermination Bay (aw was held not to be a substantive law but a reulatory measure, the purpose of which was
to ive the employer the opportunity to find a replacement or substitute, and the employee the equal opportunity to loo4
for another job or source of employment. $here the termination of employment was for a just cause, no notice was
required to be iven to the, employee. ;, 8t was only on September ), /0+/ that notice was required to be iven even
where the dismissal or termination of an employee was for cause. 3his was made in the rules issued by the then Cinister
of (abor and Employment to implement =.B. =l. /;, which amended the (abor #ode. >nd it was still much later when
the notice requirement was embodied in the law with the amendment of >rt. -**"b2 by &.>. 'o. :*/< on Carch -, /0+0. 8t
cannot be that the former reime denied due process to the employee. Gtherwise, there should now li4ewise be a rule
that, in case an employee leaves his job without cause and without prior notice to his employer, his act should be void
instead of simply ma4in him liable for damaes.
3he 3H8&. &E>SG' why the notice requirement under >rt. -+; can not be considered a requirement of the .ue
Brocess #lause is that the employer cannot really !e expected to !e entirely an impartial (udge of his o+n cause. 3his is
also the case in termination of employment for a just cause under >rt. -+- "i.e., serious misconduct or willful disobedience
by the employee of the lawful orders of the employer, ross and habitual nelect of duties, fraud or willful breach of trust
of the employer, commission of crime aainst the employer or the latter7s immediate family or duly authorized
representatives, or other analoous cases2.
6ustice Buno disputes this. He says that "statistics in the .G(E will prove that many cases have been won by
employees before the rievance committees manned by impartial judes of the company." 3he rievance machinery is,
however, different because it is established by areement of the employer and the employees and composed of
representatives from both sides. 3hat is why, in =atanas (auna 3ayabas =us #o. Wv. #ourt of >ppeals, which 6ustice
Buno cites, it was held that "Since the riht of %an employee1 to his labor is in itself a property and that the labor
areement between him and %his employer1 is the law between the parties, his summary and arbitrary dismissal amounted
to deprivation of his property without due process of law." =ut here we are dealin with dismissals and layoffs by
employers alone, without the intervention of any rievance machinery. >ccordinly in Contemayor v. >raneta @niversity
5oundation, althouh a professor was dismissed without a hearin by his university, his dismissal for havin made
homosexual advances on a student was sustained, it appearin that in the '(&#, the employee was fully heard in his
defense.
"Serrano vs. '(&# %G.&. 'o. //*,),, -* 6anuary -,,,12
Effect of ac, of &otice3 Termination I&E''ECTK4
(ac4 of 'otice Gnly Ca4es 3ermination 8neffectual
'ot all notice requirements are requirements of due process. Some are simply part of a procedure to be followed
before a riht ranted to a party can be exercised. Gthers are simply an application of the 6ustinian precept, embodied in
the #ivil #ode, to act with justice, ive everyone his due, and observe honesty and ood faith toward one7s fellowmen.
43
Such is the notice requirement in >rts. -+-!-+;. 3he consequence of the failure either of the employer or the employee to
live up to this precept is to ma4e him liable in damaes, not to render his act "dismissal or resination, as the case may
be2 void. 3he measure of damaes is the amount of waes the employee should have received were it not for the
termination of his employment without prior notice. 8f warranted, nominal and moral damaes may also be awarded.
$e hold, therefore, that, with respect to >rt. -+; of the (abor #ode, the employer7s failure to comply with the notice
requirement does not constitute a denial of due process but a mere failure to observe a procedure for the termination of
employment which ma4es the termination of employment merely 8'E55E#3@>(. 8t is similar to the failure to observe the
provisions of >rt. /<0-, in relation to >rt. //0/, of the #ivil #ode in rescindin a contract for the sale of immovable
property. @nder these provisions, while the power of a party to rescind a contract is implied in reciprocal obliations,
nonetheless, in cases involvin the sale of immovable property, the vendor cannot exercise this power even thouh the
vendee defaults in the payment of the price, except by brinin an action in court or ivin notice of rescission by means
of a notarial demand. #onsequently, a notice of rescission iven in the letter of an attorney has no leal effect, and the
vendee can ma4e payment even after the due date since no valid notice of rescission has been iven.
8ndeed, under the (abor #ode, only the absence of a just cause for the termination of employment can ma4e the
dismissal of an employee illeal.
xxx xxx xxx
3hus, only if the termination of employment is not for any of the causes provided by law is it illeal and, therefore, the
employee should be reinstated and paid bac4waes. 3o contend, as 6ustices Buno and Bananiban do, that even if the
termination is for a just or authorized cause the employee concerned should be reinstated and paid bac4waes would be
to amend >rt. -*0 by addin another round for considerin a dismissal illeal. $hat is more, it would inore the fact that
under >rt. -+<, if it is the employee who fails to ive a written notice to the employer that he is leavin the service of the
latter, at least one month in advance, his failure to comply with the leal requirement does not result in ma4in his
resination void but only in ma4in him liable for damaes. 3his disparity in leal treatment, which would result from the
adoption of the theory of the minority cannot simply be explained by invo4in resident &amon Casaysay7s motto that "he
who has less in life should have more in law." 3hat would be a misapplication of this noble phrase oriinally from
Brofessor 3homas &eed Bowell of the Harvard (aw School.
6ustice Bananiban cites Bepsi!#ola =ottlin #o. v. '(&#, in support of his view that an illeal dismissal results not
only from want of leal cause but also from the failure to observe "due process." 3he Bepsi!#ola case actually involved a
dismissal for an alleed loss of trust and confidence which, as found by the #ourt, was not proven. 3he dismissal was,
therefore, illeal, not because there was a denial of due process, but because the dismissal was without cause. 3he
statement that the failure of manaement to comply with the notice requirement "taints the dismissal with illeality" was
merely a dictum thrown in as additional rounds for holdin the dismissal to be illeal.
Given the nature of the violation, therefore, the appropriate sanction for the failure to ive notice is the payment of
bac4waes for the period when the employee is considered not to have been effectively dismissed or his employment
terminated. 3he sanction is not the payment alone of nominal damaes as 6ustice Aitu contends.
"Serrano vs. '(&# %G.&. 'o. //*,),, -* 6anuary -,,,12
Effect of ac, of &otice5 !ac,+ages until determination of (ust cause
Aalidity of Betitioner7s (ayoff 'ot >ffected by (ac4 of 'otice
$e aree with our esteemed colleaues, 6ustices Buno and Bananiban, that we should rethin4 the sanction of fine
for an employer7s disreard of the notice requirement. $e do not aree, however, that disreard of this requirement by an
employer renders the dismissal or termination of employment null and void. Such a stance is actually a reversion to the
discredited pre!$enphil rule of orderin an employee to be reinstated and paid bac4waes when it is shown that he has
not been iven notice and hearin althouh his dismissal or layoff is later found to be for a just or authorized cause. Such
rule was abandoned in $enphil because it is really unjust to require an employer to 4eep in his service one who is uilty,
for example, of an attempt on the life of the employer or the latter7s family, or when the employer is precisely retrenchin
in order to prevent losses.
3he need is for a rule which, while reconizin the employee7s riht to notice before he is dismissed or laid off, at the
same time ac4nowledes the riht of the employer to dismiss for any of the just causes enumerated in >rt. -+- or to
terminate employment for any of the authorized causes mentioned in >rts. -+;!-+). 8f the $enphil rule imposin a fine on
an employer who is found to have dismissed an employee for cause without prior notice is deemed ineffective in deterrin
employer violations of the notice requirement, the remedy is not to declare the dismissal void if there are just or valid
rounds for such dismissal or if the termination is for an authorized cause. 3hat would be to uphold the riht of the
employee but deny the riht of the employer to dismiss for cause. &ather, the remedy is to order the payment to the
employee of full bac4waes from the time of his dismissal until the court finds that the dismissal was for a just cause. =ut,
otherwise, his dismissal must be upheld and he should not be reinstated. 3his is because his dismissal is ineffectual.
5or the same reason, if an employee is laid off for any of the causes in >rts. -+;!-+), i.e., installation of a labor!
savin device, but the employer did not ive him and the .G(E a ;,!day written notice of termination in advance, then the
termination of his employment should be considered ineffectual and he should be paid bac4waes. However, the
termination of his employment should not be considered void but he should simply be paid separation pay as provided in
>rt. -+; in addition to bac4waes.
"Serrano vs. '(&# %G.&. 'o. //*,),, -* 6anuary -,,,12
Co!#o!ate Lia:ilit4
> corporate officer is not personally liable for the money claims of dischared corporate employees unless he acted
with evident malice and bad faith in terminatin their employment. 3here is no evidence in this case that (ocsin acted in
bad faith or with malice in carryin out the retrenchment and eventual closure of the company, hence, he may not be held
personally and solidarily liable with the company for the satisfaction of the judment in favor of the retrenched employees.
"=usinessday vs. '(&# %G.&. 'o. /,;<*<, ,< >pril /00;12
3his is not a case of dismissal. 3he situation is that of a corporate office havin been declared vacant, and of 3>'7s
not havin been elected thereafter. 3he matter of whom to elect is a preroative that belons to the =oard, and involves
the exercise of deliberate choice and the faculty of discriminative selection. Generally spea4in, the relationship of a
person to a corporation, whether as officer or aent or employee, is not determined by the nature of the services
performed, but by the incidents of the relationship as they actually exist.
$e aree with petitioners, however, that the '(&# erred in holdin #enteno jointly and severally liable with C>C.
> corporation, bein a juridical entity, may act only throuh its directors, officers and employees. Gbliations incurred by
them, actin as such corporate aents, are not theirs but the direct accountabilities of the corporation they represent.
3rue, solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as, enerally, in
the followin cases?
44
/. $hen directors and trustees or, in appropriate cases, the officers of a corporation
"a2 vote for or assent to patently unlawful acts of the corporation9
"b2 act in bad faith or with ross nelience in directin the corporate affairs9
"c2 are uilty of conflict of interest to the prejudice of the corporation, its stoc4holders or
members, and other persons.
-. $hen a director or officer has consented to the issuance of watered stoc4s or who, havin 4nowlede thereof, did
not forthwith file with the corporate secretary his written objection thereto.
;. $hen a director, trustee or officer has contractually areed or stipulated to hold himself personally and solidarily
liable with the #orporation.
) $hen a director, trustee or officer is made, by specific provision of law, personally liable for his corporate action.
8n labor cases, for instance, the #ourt has held corporate directors and officers solidarily liable with the corporation for the
termination of employment of employees done with malice or in bad faith.
"C>C &ealty vs. '(&# %G.&. 'o. //)*+*, ,- 6une /00<12
3he fact that complainant is a corporate officer, an elective position under the corporate by!laws and her non!election
is an intra!corporate controversy conizable by the SE# and not by the '(&#, petitioner ban4 can no loner raise the
issue of jurisdiction under the principle of estoppel. 3he ban4 participated in the proceedins from start to finish. 8t filed its
position paper with the (abor >rbiter. $hen the decision of the (abor >rbiter was adverse to it, the ban4 appealed to the
'(&#. $hen the '(&# decided in its favor, the ban4 said nothin about jurisdiction. Even before the #>, it never
questioned the proceedins on the round of lac4 of jurisdiction. 8t was only when the #> ruled in favor of public
respondent did it raise the issue of jurisdiction. 3he ban4 actively participated in the proceedins before the (abor >rbiter,
the '(&# and the #>. $hile it is true that jurisdiction over the subject matter of a case may be raised at any time of the
proceedins, this rule presupposes that laches or estoppel never supervened. "Brudential =an4 vs. &eyes %G.&. 'o.
/)/,0;, -, 5ebruary -,,/
Sale*1erger or Consolidation
$here such transfer of ownership is in ood faith, the transferee is under no leal duty to absorb the transferor
employees as there is no law compellin such absorption. 3he most that the transferee may do, for reasons of public
policy and social justice, is to ive preference to the qualified separated employees in the fillin of vacancies in the
facilities of the purchaser. "Canlimos vs. '(&# %G.&. 'o. //;;;*, ,- Carch /00<12
3he rule is that unless expressly assumed, labor contracts such as employment contracts and collective barainin
areements are not enforceable aainst a transferee of an enterprise, labor contracts bein in personam, thus bindin
only between the parties. > labor contract merely creates an action in personally and does not create any real riht which
should be respected by third parties. 3his conclusion draws its force from the riht of an employer to select his employees
and to decide when to enae them as protected under our #onstitution, and the same can only be restricted by law
throuh the exercise of the police power.
>s a eneral rule, there is no law requirin a bona fide purchaser of assets of an on!oin concern to absorb in its
employ the employees of the latter.
However, althouh the purchaser of the assets or enterprise is not leally bound to absorb in its employ the
employers of the seller of such assets or enterprise, the parties are liable to the employees if the transaction between the
parties is colored or clothed with bad faith.
"Sundowner .ev. #orp. vs. .rilon %G.&. 'o. +-;)/, ,: .ecember /0+012
$e disaree with the (abor >rbiter7s reliance on the case of Cobil Employees >ssociation vs. '(&#. 3he '(&# was
correct in holdin that Cobil was not applicable because Cobil involved the termination of employment under >rticle -+;
"before >rticle -+)2 of the (abor #ode and not termination of employment as a result of the chane of corporate
ownership, as in the case of private respondent Super Cahoany Blywood #orporation. 8n Cobil, the oriinal employer9
Cobil Gil Bhilippines, 8nc., completely withdrew from business and was even dissolved. 8n the case at bar, there was only
a chane of ownership of Super Cahoany Blywood #orporation which resulted in a chane of ownership. 8n short, the
corporation itself, as a distinct and separate juridical entity, continues to exist. 3he issue of whether there was a closin or
cessation of business operations which could have operated as a just cause for the termination of employment was not
material. 3he chane in ownership of the manaement was done bona fide and the petitioners did not for any moment
before the filin of their complaints raise any doubt on the motive for the chane. Gn the contrary, upon bein informed
thereof and of their eventual termination from employment, they freely and voluntarily accepted their separation pay and
other benefits and individually executed the &elease or $aiver which they ac4nowleded before no less than a hearin
officer of the .G(E. "Canlimos vs. '(&# %G.&. 'o. //;;;*, ,- Carch /00<12
S#ecial Ci!c3stances
Constructi#e Dismissal
#G'S3&@#38AE .8SC8SS>( as a quittin because continued employment is rendered impossible, unreasonable or
unli4ely9 as, an offer involvin a demotion in ran4 and a diminution in pay. "Bhilippine 6apan >ctive #arbon #orporation
vs. '(&#2
3here is a constructive dismissal when the reassinment of an employee involves a demotion in ran4 or a diminution
in pay "(emery Savins and (oan =an4 v. 'ational (abor &elations #ommission, -,< S#&> )0- %/00-19 Bhilippine 6apan
>ctive #arbon #orporation v. 'ational (abor &elations #ommission, /*/ S#&> /:) %/0+012.
8n the case at bench, the demotion of private respondent is tantamount to constructive dismissal. Gne does not need
to stretch his imaination to distinuish the wor4 of a security uard and that of a common aricultural laborer in a suar
plantation. (i4ewise, there was a diminution of salary, for a security uard is paid on a monthly basis while a laborer in the
suar plantation is paid either on a daily or piece wor4 basis. (aborers do not wor4 year round but only when needed and
on off!season months, they are not required to wor4 at all.
"Gscar (edesma O #o. vs. '(&# %G.&. 'o. //,0;,, /; 6uly /00<12
2re#enti#e Suspension
Sections ; and ), &ule L8A, =oo4 A of the Gmnibus &ules 8mplementin the (abor #ode, 3ermination of
Employment, provide?
45
Sec/ =/ 2re#enti#e suspension/ The employer may place the +or,er concerned under pre#enti#e
suspension if his continued employment poses a serious and imminent threat to the life or property of the
employer or of his co-+or,ers/
Sec/ > 2eriod of suspension/ &o pre#enti#e suspension shall last longer than =D days/ The employer shall
thereafter reinstate the +or,er in his former or in a su!stantially e6ui#alent position of the employer may extend
the period of suspension pro#ided that during the period of extension. he pays the +ages and other !enefits due
to the +or,er/ In such case. the +or,er shall not !e !ound to reim!urse the amount paid to him during the
extension if the employer decides. after completion of the hearing. to dismiss the +or,er/
Section ), &ule L8A, =oo4 A of the Gmnibus &ules provides that preventive suspension cannot be more than the
maximum period of ;, days. Hence, after the ;,!day period of suspension beyond the maximum period amounts to
constructive dismissal. "Hyatt 3axi Services vs. #atinoy %G.&. 'o. /);-,), -: 6une -,,/12
B3!den o2 P!oo2 in La:o! Cases
Brivate respondent7s documentary evidence showin the culpability of petitioners should prevail over petitioners7
uncorroborated explanations and self!servin denials reardin their involvement in the pilferaes. >ll administrative
determinations require only substantial proof and not clear and convincin evidence. Broof beyond reasonable doubt of
the employee7s misconduct is not required, it bein sufficient that there is some basis for the same or that the employer
has reasonable round to believe that the employee is responsible for the misconduct, and his participation therein
renders him unworthy of the trust and confidence demanded by his position. 3hus, petitioners cannot assert that the
public respondent closed its eyes to their evidence. 3he latter7s findins are supported by substantial evidence which oes
beyond the minimum evidentiary support required by law. "Seismundo vs. '(&# %G.&. 'o. //--,;, /; .ecember /00)12
3he fact that Santos nelected to substantiate his claim for niht shift differentials is not prejudicial to his cause. >fter
all, the burden of provin payment rests on petitioner 'S#. Santos7 alleation of non!payment of this benefit, to which he
is by law entitled, is a neative alleation which need not be supported by evidence unless it is an essential part of his
cause of action. 8t must be noted that his main cause of action is his illeal dismissal, and the claim for niht shift
differential is but an incident of the protest aainst such dismissal. 3hus, the burden of provin that payment of such
benefit has been made rests upon the party who will suffer if no evidence at all is presented by either party. 'ational
Semiconductor "HP2 .istribution, (td. vs. '(&# %G.&. 'o. /-;<-,, -: 6une /00+12
3he reason for this rule is that the pertinent personnel files, payrolls, records, remittance and other similar
documents K which will show that overtime, differentials, service incentive leave and other claims of wor4ers have been
paid K are not in the possession of the wor4er but in the custody and absolute control of the employer. 3hus, in choosin
not to present evidence to prove that it had paid all the monetary claims of petitioners, H8!3E#H failed once aain to
dischare the onus probandi. #onsequently, we have no choice but to award those claims to petitioners. "Aillar vs. '(&#
%G.&. 'o. /;,0;<, // Cay -,,012
;3itclais
3he requisites of a valid quitclaim are? 3hat !
"a2 8t was voluntarily entered into by the parties9
"b2 3here was no fraud or deceit on the part of any of the parties9
"c2 3he consideration of the quitclaim is credible and reasonable9 and,
"d2 3he contract is not contrary to law, public order, public policy, morals or ood customs or prejudicial
to a third person with a riht reconized by law.
'ot all waivers and quitclaims are invalid as aainst public policy. 8f the areement was voluntarily entered into and
represents a reasonable settlement, it is bindin on the parties and may not later be disowned simply because of a
chane of mind. 8t is only where there is clear proof that the waiver was wanled from an unsuspectin or ullible person,
or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction.
=ut where it is shown that the person ma4in the waiver did so voluntarily, with full understandin of what he was doin,
and the consideration for the quitclaim is credible and reasonable, the transaction must be reconized as a valid and
bindin underta4in. "Beriquet v. '(&#2
".ire necessity" is not an acceptable round for annullin the releases, especially since it has not been shown that
the employees had been forced to execute them. 8t has not even been proven that the considerations for the quitclaims
were unconscionably low and that the petitioners had been tric4ed into acceptin them. "Aeloso v. .G(E2
5irst, even if a clear majority of the union members areed to a settlement with the employer, the union has no
authority to compromise the individual claims of members who did not consent to such settlement. &ule /;+ Section -; of
the /0:) &evised &ules of #ourt requires a special authority before an attorney may compromise his client7s litiation.
"3he authority to compromise cannot lihtly be presumed and should be duly established by evidence."
8n the case at bar, minority union members did not authorize the union to compromise their individual claims. >bsent
a showin of the union7s special authority to compromise the individual claims of private respondents for reinstatement
and bac4 waes, there is no valid waiver of the aforesaid rihts. >s private respondents did not authorize the union to
represent them not bound by the terms thereof.
"Golden .onuts, 8nc. vs. '(&# %G.&. 'os. //;:::!:+, /0 6anuary -,,,12
3he mere fact that the employee was not physically coerced or intimidated does not necessarily imply that he freely
or voluntarily consented to the terms of the quitclaim. @nder >rticle /;;, of the #ivil #ode, consent may be vitiated not
only throuh intimidation or violence but also by mista4e, undue influence or fraud. Coreover, it is the employer and not
the employee who has the burden of provin that the quitclaim was voluntarily entered into. "Bhilippine #arpet Employees
>ssociation vs. B#C# %G.&. 'o./),-:0!*,, /) September -,,,12
Relie2s 3nde! t/e La:o! Code
&einstatement plus bac4waes
Since private respondent7s dismissal was for just and valid cause, the order of public respondent for the
reinstatement of private respondent with award of bac4waes has no factual and leal basis. "B>( vs. '(&# %G.&. 'o.
/-:+,<, /: Carch -,,,12
46
%>1n employee who is unjustly dismissed is entitled to his full bac4waes computed from the time his compensation
was withheld from him up to the time of his reinstatement. Cere offer to reinstate a dismissed employee, iven the
circumstances in this case, is not enouh. 8f petitioner were sincere in its intention to reinstate private respondent,
petitioner should have at the very least reinstated him in its payroll riht away. $e are thus constrained to conclude that
private respondent should be paid by petitioner not only the sum of B-:,+::.:) awarded by the '(&#, but the petitioner
should be held liable for the entire amount of bac4waes due the private respondent from the day he was illeally
dismissed up to the date of his reinstatement. Gnly then could observance of labor laws be promoted and social justice
upheld. "#ondo Suite #lub 3ravel, 8nc. vs. '(&# %G.&. 'o. /-<:*/, -+ 6anuary -,,,12
$e aree that no full bac4waes from the time their pay was withheld up to the time of actual reinstatement can be
ordered paid to petitioners. &.>. 'o. :*/<, which amended >rt. -*0 of the (abor #ode by requirin that an employee who
is illeally dismissed shall be paid "his full bac4waes, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement,"
has no retroactive effect and does not apply to cases of illeal dismissal ta4in place before its effectivity on Carch -/,
/0+0. Since petitioners were dismissed in /0+*, they cannot demand payment of full bac4waes until they were actually
reinstated. =>((>.>&ES vs. '(&# G.&. 'o. ///;)- %/0 6une /00<1
Strained relations
"Strained relations," as amplified in Employee7s >ssociation of the Bhilippine >merican (ife 8nsurance #ompany v.
'(&#, /00 S#&> :-+ %/00/1, must be of such a nature or deree as to preclude reinstatement. =ut, where the
differences between the parties are neither personal nor physical, nor serious, then there is no reason why the illeally
dismissed employee should not be reinstated rather than simply iven separation pay and bac4waes. Core so if the
cause of the perceived 7strained relations7 is the filin of a complaint for illeal dismissal. "Puntin vs. '(&# %G.&. 'o.
/,/)-*, ,+ 'ovember /00;12
> careful scrutiny of the records of the case at bench, however, readily discloses the existence of strained
relationship between the petitioner and private respondents.
5irstly, petitioner consistently refused to re!admit private respondents in his establishment. Betitioner even replaced
private respondents with a new set of wor4ers to perform the tas4s of private respondents9 Coreover, althouh petitioner
ostensibly arued in his supplemental motion for reconsideration that reinstatement should have been the proper remedy
in the case at bench on his premise that the existence of strained relationship was not adequately established, yet
petitioner never sincerely intended to effect the actual reinstatement of private respondents. 5or if petitioner were to
pursue further the entire loic of his arument, the prayer in his supplemental motion for reconsideration should have
contained not just the mere deletion of the award of separation pay, but precisely, the reinstatement of private
respondents. Nuite obviously then, notwithstandin petitioner7s arument for reinstatement he was only interested in the
deletion of the award of separation pay to private respondents.
xxx xxx xxx
>nd secondly, private respondents themselves, from the very start, had already indicated their aversion to their
continued employment in petitioner7s establishment. 3he very filin of their second case before (abor. "#onson vs.
'(&# %G.&. 'o. //)-<,, ,< >pril /00<12
>s the #ourt held in Globe!Cac4ay #able and &adio #orporation v. '(&#, -,: S#&> *,/ %/00-1, citin19 Sibal v.
'otre .ame of Greater Canila, /+- S#&> <;+ %/00,1?Gbviously, the principle of "strained relations" cannot be applied
indiscriminately. Gtherwise reinstatement can never be possible simply because some hostility is invariably enendered
between the parties as a result of litiation. 3hat is human nature.
=esides, no strained relations should arise from a valid and leal act of assertin one7s riht9 otherwise an employee
who shall assert his riht could be easily separated from the service, by merely payin his separation pay on the pretext
that his relationship with his employer had already been strained. ">nscor 3ransport and 3erminals v. '(&# %/0, S#&>
/)*, /00,12
1oral and exemplary damages
Brivate respondent is not entitled to the recovery of moral damaes since these are recoverable only where the
dismissal of the employee was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a
manner contrary to morals, ood customs or public policy. "Spartan Security .etective >ency, 8nc. v. '(&# %-/; S#&>
<-+, /00-12
@nfair labor practices violate the constitutional rihts of wor4ers and employees to self!oranization, are inimical to
the leitimate interests of both labor and manaement, includin their riht to barain collectively and otherwise deal with
each other in an atmosphere of freedom and mutual respect9 and disrupt industrial peace and hinder the promotion of
healthy and stable labor!manaement relations. >s the conscience of the overnment, it is the #ourt7s sworn duty to
ensure that none trifles with labor rihts.
5or this reason, we find it proper in this case to impose moral and exemplary damaes on private respondent.
However, the damaes awarded by the labor arbiter, to our mind, are excessive. 8n determinin the amount of damaes
recoverable, the business, social and financial position of the offended parties and the business and financial position of
the offender are ta4en into account. 8t is our view that herein private respondents had not fully acted in ood faith.
However, we are conizant that a cooperative promotes the welfare of its own members. 3he economic benefits filter to
the cooperative members. Either equally or proportionally, they are distributed amon members in correlation with the
resources of the association utilized. #ooperatives help promote economic democracy and support community
development. @nder these circumstances, we deem it proper to reduce moral damaes to only B/,,,,,.,, payable by
private respondent 'EE#G 8 to each individual petitioner. $e also deem it sufficient for private respondent 'EE#G 8 to
pay each individual petitioner B<,,,,.,, to answer for exemplary damaes, based on the provisions of >rticles ---0 and
--;- of the #ivil #ode.
"'ueva Ecija 8 Electric #ooperative, 8nc. vs. '(&# %G.&. 'o. //:,::, -) 6anuary -,,,12
Separation 2ay
5inally, we hold that the contention of Sweet (ines that separation pay and bac4 waes are inconsistent with each
other is not well!ta4en. Separation pay is ranted where reinstatement is no loner advisable because of strained
relations between the employee and the employer. =ac4 waes represent compensation that should have been earned
but were not collected because of the unjust dismissal. 3he bases for computin the two are different, the first bein
usually the lenth of the employee7s service and the second the actual period when he was unlawfully prevented from
wor4in.
47
$e have ordered the payment of both in proper case as otherwise the employee miht be deprived of benefits justly
due him. 3hus, if an employee who has wor4ed only one year is sustained by the labor court after three years from his
unjust dismissal, rantin him separation pay only would entitle him to only one month salary. 3here is no reason why he
should not also be paid three years bac4 waes correspondin to the period when he could not return to his wor4 or could
not find employment elsewhere. "(im vs. '(&# %G.&. 'o. *00,*, /: Carch /0+012
3here should be no question that where it comes to such valid but not iniquitous causes as failure to comply with
wor4 standards, the rant of separation pay to the dismissed employee may be both just and compassionate, particularly
if he has wor4ed for some time with the company. 5or example, a subordinate who has irreconcilable policy or personal
differences with his employer may be validly dismissed for demonstrated loss of confidence, which is an allowable round.
> wor4in mother who has to be frequently absent because she has also to ta4e care of her child may also be removed
because of her poor attendance, this bein another authorized round. 8t is not the employee7s fault if he does not have
the necessary aptitude for his wor4 but on the other hand the company cannot be required to maintain him just the same
at the expense of the efficiency of its operations. He too may be validly replaced. @nder these and similar circumstances,
however, the award to the employee of separation pay would be sustainable under the social justice policy even if the
separation is for cause.
=ut where the cause of the separation is more serious than mere inefficiency, the enerosity of the law must be more
discernin. 3here is no doubt it is compassionate to ive separation pay to a salesman if he is dismissed for his inability to
fill his quota but surely he does not deserve such enerosity if his offense is misappropriation of the receipts of his sales.
3his is no loner mere incompetence but clear dishonesty. > security uard found sleepin on the job is doubtless subject
to dismissal but may be allowed separation pay since his conduct, while inept, is not depraved. =ut if he was in fact not
really sleepin but sleepin with a prostitute durin his tour of duty and in the company premises, the situation is chaned
completely. 3his is not only inefficiency but immorality and the rant of separation pay would be entirely unjustified.
$e hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where
the employee is validly dismissed for causes other than serious misconduct or those reflectin on his moral character.
$here the reason for the valid dismissal is, for example, habitual intoxication or an offense involvin moral turpitude, li4e
theft or illicit sexual relations with a fellow wor4er, the employer may not be required to ive the dismissed employee
separation pay, or financial assistance, or whatever other name it is called, on the round of social justice.
> contrary rule would, as the petitioner correctly arues, have the effect of rewardin rather than punishin the errin
employee for his offense. >nd we do not aree that the punishment is his dismissal only and that the separation pay has
nothin to do with the wron he has committed. Gf course it has. 8ndeed, if the employee who steals from the company is
ranted separation pay even as he is validly dismissed, it is not unli4ely that he will commit a similar offense in his next
employment because he thin4s he can expect a little leniency if he is aain found out. 3his 4ind of misplaced compassion
is not oin to do labor in eneral any ood as it will encourae the infiltration of its ran4s by those who do not deserve
the protection and concern of the #onstitution. "B(.3 vs. '(&# %G.&. 'o. +,:,0, -; >uust /0++12
3hus, petitioner pointed out that the SE#7s order suspendin all claims aainst it pendin before any other court,
tribunal or body was pursuant to the rehabilitation receivership proceedins. Such order was necessary to enable the
rehabilitation receiver to effectively exercise its powers free from any judicial or extra!judicial interference that miht
unduly hinder the rescue of the distressed company. Since receivership proceedins have ceased and petitioner7s
rehabilitation receiver and liquidator, (edesma Saludo O >ssociates, has been iven the imprimatur to proceed with
corporate liquidation, the cited order of the Securities and Exchane #ommission has been rendered functus officio. 3hus,
there is no leal impediment for the execution of the decision of the (abor >rbiter for the payment of separation pay.
#onsiderin that petitioner7s monetary obliation to private respondent is lon overdue and that petitioner has
sinified its willinness to comply with such obliation by enterin into an areement with private respondent as to the
amount and manner of payment, petitioner can not delay satisfaction of private respondent7s claim. However, due to
events subsequent to the filin of this petition, private respondent must present its claim with the rehabilitation receiver
and liquidator of petitioner, subject to the rules on preference of credits.
">lemar7s Sibal O Sons, 8nc. vs. '(&# %G.&. 'o. //)*:/, /0 6anuary -,,,12
8t must be emphasized that the riht of employee to demand separation pay and bac4waes is always premised on
the fact that the employee was terminated either leally of illeally. 3he award of bac4waes belons to an illeally
dismissed employee by direct provision of law and it is awarded on rounds of equity for earnins which a wor4er or
employee has lost due to illeal dismissal. Separation pay, on the other hand, is awarded as an alternative to illeal
dismissed employees where reinstatement is no loner possible. "6o #inema vs. >bellana %G.&. 'o. /;-+;*, -+ 6une
-,,/12
'inancial 4ssistance
$ith reards to the award of financial assistance to petitioner, $e find that the same is not justified. Betitioner7s
willful disobedience of the orders of her employer constitutes serious misconduct. >s $e held in the case of .el Conte
Bhils., 8nc. vs. '(&#, "henceforth, separation pay shall be allowed as a measure of social justice only in those instances
where the employee is validly dismissed for causes other than serious misconduct or those reflectin on his moral
character". Hence, the employer, #(@=, may not be required to ive the petitioner separation pay, or financial assistance,
or whatever other name it is called, on the round of social justice. ">uilar vs. '(&# %G.&. 'o. /,,+*+, ,- .ecember
/00-12
'either could we allow the award of B<,,,,.,, as financial assistance on equitable consideration as decreed by the
labor arbiter. >s we have consistently held in previous cases, such monetary award is justified only in those instances
where the employee is validly dismissed for causes other than serious misconduct or those adversely affectin his moral
character. 3hus, if the reason for the valid dismissal is, for example, habitual intoxication or an offense involvin moral
turpitude, li4e theft, fraud, falsification or illicit sexual relations with a fellow wor4er, separation pay or financial assistance,
or by whatever other name it is called, may not be allowed. "B>( vs. '(&# %G.&. 'o. /-:+,<, /: Carch -,,,12
Retirement
8n the instant case, the complaints of private respondents were still bein resolved on the labor arbiter level when
&.>. 'o. *:)/ too4 effect. However, it was quite clear, and both the (abor >rbiter and the '(&# so held, that private
respondents had ceased to be employees of petitioner, by reason of voluntary resination, before the statute went into
effect. Coreover, it appears that private respondents did not qualify for the benefits of &.>. 'o. *:)/ under the terms of
this law itself. 3he #ourt notes that when private respondents filed their complaints more than one "/2 year after they had
been alleedly illeally dismissed, respondent >usan, 6r. was fifty!seven "<*2 years old while respondent >lanan was sixty
":,2 years old. 3hat would ma4e >usan, 6r. fifty!five "<<2 years old and >lanan fifty!eiht "<+2 years old at the time their
services with petitioner were ended by their resination. Since the record does not show any retirement plan or collective
barainin areement providin for retirement benefits to petitioner7s employees, the applicable retirement ae is the
optional retirement ae of sixty ":,2 years accordin to >rticle -+*, which would qualify the retiree to retirement benefits
equivalent to one!half "/D-2 month7s salary for every year of service. @nfortunately, at the time private respondents
stopped wor4in for petitioner, they had not yet reached the ae of sixty ":,2 years.
48
$e stress, however, that there is nothin to prevent petitioner from voluntarily ivin private respondents some
financial assistance on an ex ratia basis.
"#6# 3radin, 8nc. vs. '(&# %G.&. 'o. //<++), -, 6uly /00<12
Wor,er preference
$or4er preference in case of ban4ruptcy. ! 8n the event of ban4ruptcy or liquidation of an employer7s business, his
wor4ers shall enjoy first preference as reards their unpaid waes and other monetary claims, any provision of law to the
contrary notwithstandin. Such unpaid waes and monetary claims shall be paid in full before the claims of the
Government and other creditors may be paid. ">rticle //, of the (abor #ode2
"/2 >rticle //, of the (abor #ode, as amended, must be viewed and read in conjunction with the provisions of the #ivil
#ode on concurrence and preferences of credits9
"-2 3he aforesaid provisions of the #ivil #ode, includin >rticle //, of the (abor #ode, require judicial proceedins in
rem in adjudication of creditors7 claims aainst the debtor7s assets to become operative9
";2 &epublic >ct 'o. :*/< has the effect of expandin the "wor4er preference" to cover not only unpaid waes but also
other monetary claims of laborers, to which even claims of the Government must be deemed subordinate9 and
")2 3he amendatory provisions of &epublic >ct :*/<, which too4 effect on -/ Carch /0+0, should only be iven
prospective application.
".=B vs. '(&# %G.&. 'o. +:--*, /0 6anuary /00)12
B. 'o. 0,-!> is clear that Hall actions for claims aainst corporations, partnerships or associations under
manaement or receivership pendin before any court, tribunal, board or body shall be suspended accordinly.I 3he law
did not ma4e any exception in favor of labor claims.
3he justification for the automatic stay of all pendin actions for claims is to enable the manaement committee or
the rehabilitation receiver to effectively exercise itsDhis powers free from any judicial or extrajudicial interference that miht
unduly hinder or prevent the HrescueI of the debtor company. 3o allow such actions to continue would only add to the
burden of the manaement committee or rehabilitation receiver, whose time, effort and resources would be wasted in
defendin claims aainst the corporation instead of bein directed towards its restructurin and rehabilitation. 3hus, the
labor case would defeat the purpose of the automatic stay. 3o rule otherwise would open the floodates to numerous
claims and would defeat the rescue efforts of the manaement committee. "&ubberworld vs. '(&# %;,< S#&> *-/12
8URISDICTION
Regional Director
&ecovery of waes, simple money claims and other benefits. X @pon complaint of any interested party, the
&eional .irector of the .epartment of (abor and Employment or any of the duly authorized hearin officers of the
.epartment is empowered, throuh summary proceedin and after due notice, to hear and decide any matter involvin
the recovery of waes and other monetary claims and benefits, includin leal interest, owin to an employee or person
employed in domestic or household service or househelper under this #ode, arisin from employer!employee relations?
Brovided, 3hat such complaint does not include a claim for reinstatement? Brovided, further, 3hat the areate money
claims of each employee or househelper do not exceed five thousand pesos "B<,,,,2. 3he &eional .irector or hearin
officer shall decide or resolve the complaint within thirty ";,2 calendar days from the date of the filin of the same. >ny
sum thus recovered on behalf of any employee or househelper pursuant to this >rticle shall be held in a special deposit
account by, and shall be paid, on order of the Secretary of (abor and Employment or the &eional .irector directly to the
employee or househelper concerned. >ny such sum not paid to the employee or househelper, because he cannot be
located after dilient and reasonable effort to locate him within a period of three ";2 years, shall be held as a special fund
of the .epartment of (abor and Employment to be used exclusively for the amelioration and benefit of wor4ers.
>ny decision or resolution of the &eional .irector or hearin officer pursuant to this provision may be appealed on
the same rounds provided in >rticle --; of this #ode, within five "<2 calendar days from receipt of a copy of said decision
or resolution, to the 'ational (abor &elations #ommission which shall resolve the appeal within ten "/,2 calendar days
from the submission of the last pleadin required or allowed under its rules.
3he Secretary of (abor and Employment or his duly authorized representative may supervise the payment of unpaid
waes and other monetary claims and benefits, includin leal interest, found owin to any employee or househelper
under this #ode. ">rticle /-0 of the (abor #ode2
a!or 4r!iter
6urisdiction of (abor >rbiters and the #ommission. X "a2 Except as otherwise provided under this #ode, the (abor
>rbiters shall have oriinal and exclusive jurisdiction to hear and decide, within thirty ";,2 calendar days after the
submission of the case by the parties for decision without extension, even in the absence of stenoraphic notes, the
followin cases involvin all wor4ers, whether aricultural or non!aricultural?
"/2 @nfair labor practice cases9
"-2 3ermination disputes9 "Subject to >rt -:/ ! A>7s jurisdiction over unbresolved rievance from
#=>Dcompany personel policies2
";2 8f accompanied with a claim for reinstatement, those cases that wor4ers may file involvin waes, rate of
pay, hours of wor4 and other terms and conditions of employment9
")2 #laims for actual, moral, exemplary and other forms of damaes arisin from the employer!employee
relations9
"<2 #ases arisin from any violation of >rticle -:) of this #ode, includin questions involvin the leality of
stri4es and loc4outs9 and
":2 Except claims for Employees #ompensation, Social Security, Cedicare and maternity benefits, all other
claims arisin from employer!employee relations, includin those of persons in domestic or household
service, involvin an amount exceedin five thousand pesos "B<,,,,.,,2, whether or not accompanied
with a claim for reinstatement.
"b2 3he #ommission shall have exclusive appellate jurisdiction over all cases decided by (abor >rbiters.
"c2 #ases arisin from the interpretation or implementation of collective barainin areements and those arisin
from the interpretation or enforcement of company personnel policies shall be disposed of by the (abor >rbiter by
referrin the same to the rievance machinery and voluntary arbitration as may be provided in said areements. ">rticle
-/* of the (abor #ode2
Coney #laims. ! 'otwithstandin any provision of law to the contrary, the (abor >rbiters of the 'ational (abor
&elations #ommission "'(&#2 shall have the oriinal and exclusive jurisdiction to hear and decide, within ninety "0,2
calendar days after the filin of the complaint, the claims arisin out of an employer!employee relationship or by virtue of
any law or contract involvin 5ilipino wor4ers for overseas deployment includin claims for actual, moral, exemplary and
other forms of damaes.
49
3he liability of the principalDemployer and the recruitmentDplacement aency for any and all claims under this section
shall be joint and several. 3his provision shall be incorporated in the contract for overseas employment and shall be a
condition precedent for its approval. 3he performance bond to be filed by the recruitmentDplacement aency, as provided
by law, shall be answerable for all money claims or damaes that may be awarded to the wor4ers. 8f the
recruitmentDplacement aency is a juridical bein, the corporate officers and directors and partners as the case may be,
shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damaes.
xxx xxx xxx
8n case of termination of overseas employment without just, valid or authorized cause as defined by law or contract,
the wor4er shall be entitled to the full reimbursement of his placement fee with interest at twelve percent "/-S2 per
annum, plus his salaries for the unexpired portion of his employment contract or for three ";2 months for every year of the
unexpired term, whichever is less.
xxx xxx xxx
"Section /, of &epublic >ct 'o. +,)- %Cirant $or4ers and Gverseas 5ilipinos >ct of /00<12
%ureau of a!or Relations
3he =ureau of (abor &elations and the (abor &elations .ivisions in the reional offices of the .epartment of (abor
and Employment shall have oriinal and exclusive authority to act, at their own initiative or upon request of either or both
parties, on all inter!union and intra!union conflicts, and all disputes, rievances or problems arisin from or affectin labor!
manaement relations in all wor4places whether aricultural or non!aricultural, except those arisin from the
implementation or interpretation of collective barainin areements which shall be the subject of rievance procedure
andDor voluntary arbitration.
3he =ureau shall have fifteen "/<2 calendar days to act on labor cases before it, subject to extension by areement
of the parties. ">rticle --: of the (abor #ode2
#learly, the Secretary of (abor and Employment has no jurisdiction to entertain the appeal of >==G33. 3he appellate
jurisdiction of the Secretary of (abor and Employment is limited only to a review of cancellation proceedins decided by the
=(& in the exercise of its exclusive and oriinal jurisdiction. 3he Secretary of (abor and Employment has no jurisdiction over
decisions of the =(& rendered in the exercise of its appellate power to review the decision of the &eional .irector in a petition
to cancel the union7s certificate of reistration, said decisions bein final and inappealable.
xxx xxx xxx
8t is clear then that the Secretary of (abor and Employment did not commit rave abuse of discretion in not actin an
>==G337s appeal. 3he decisions of the =(& on cases brouht before it on appeal from the &eional .irector are final and
executory. Hence, the remedy of the arieved party is to seasonably avail of the special civil action of certiorari under &ule :<
of the &ules of #ourt.
">bbott (aboratories vs. >bbott (aboratories Employees @nion %G.&. 'o. /;/;*), -: 6anuary -,,,.2
Loluntary ar!itrator
3he Aoluntary >rbitrator or panel of Aoluntary >rbitrators shall have oriinal and exclusive jurisdiction to hear and
decide all unresolved rievances arisin from the interpretation or implementation of the #ollective =arainin >reement
and those arisin from the interpretation or enforcement of company personnel policies referred to in the immediately
precedin >rticle. >ccordinly, violations of a #ollective =arainin >reement, except those which are ross in character,
shall no loner be treated as unfair labor practice and shall be resolved as rievances under the #ollective =arainin
>reement. 5or purposes of this >rticle, ross violations of a #ollective =arainin >reement shall mean flarant andDor
malicious refusal to comply with the economic provisions of such areement.
3he #ommission, its &eional Gffices and the &eional .irectors of the .epartment of (abor and Employment shall
not entertain disputes, rievances or matters under the exclusive and oriinal jurisdiction of the voluntary arbitrator or
panel of voluntary arbitrators and shall immediately dispose and refer the same to the rievance machinery or voluntary
arbitration provided in the collective barainin areement.
">rticle -:/ of the (abor #ode2
A##eal
'rom a!or 4r!iter to &RC
>rticle --/ of the (abor #ode mandates that technical rules of evidence in courts of law shall not be controllin in
any of the proceedins before the #ommission or the (abor >rbiters. 5urther, the #ommission is required to use every
reasonable means to ascertain the facts without reard to technicalities or procedure. 3echnical rules may be relaxed to
prevent miscarriae of justice. 3hey must not be allowed to stand in the way of equitably and completely resolvin the
rihts and obliations of the parties.
8n the case at bar, petitioner had the opportunity to rebut the truth of these additional documents. &espondent '(&#,
on appeal, correctly accorded weiht to these documents considerin their nature and character. 3hese were daily time
records, certifications from the postmaster, etc., whose trustworthiness can be relied upon.
"#aMete vs. '(&# %G.&. 'o. //)/:/, -; 'ovember /00<12
:rounds for 4ppeal
"a2 8f there is prima facie evidence of abuse of discretion on the part of the (abor >rbiter9
"b2 8f the decision, order or award was secured throuh fraud or coercion, includin raft and corruption9
"c2 8f made purely on questions of law9 and
"d2 8f serious errors in the findins of facts are raised which would cause rave or irreparable damae or injury
to the appellant.
:ra#e 4!use of Discretion
3he phrase "rave abuse of discretion amountin to lac4 or excess of jurisdiction" has settled meanin in the
jurisprudence of procedure. 8t means such capricious and whimsical exercise of judment by the tribunal exercisin
judicial or quasi!judicial power as to amount to lac4 of power. ">rroyo vs. .e Aenecia %-** S#&> -:+, "/00*12
Brivate respondent, after receivin a copy of the labor arbiter7s decision, wrote the labor arbiter who rendered the
decision and expressed dismay over the judment. 'either notice of appeal was filed nor cash or surety bond was posted
by private respondent. 'evertheless, the labor tribunal too4 conizance of the letter from private respondent and treated
said letter as private respondent7s appeal. 8n a certiorari action before this #ourt, we ruled that the labor tribunal acted
with rave abuse of discretion in treatin a mere letter from private respondent as private respondent7s appeal in clear
violation of the rules on appeal prescribed under Section ;"a2, &ule A8 of the &ules of Brocedure of '(&#. "Garcia vs.
'(&# %-:) S#&> -:/, /00:12
50
3he labor arbiter committed rave abuse of discretion when he failed to resolve immediately by written order a
motion to dismiss on the round of lac4 of jurisdiction and the supplemental motion to dismiss as mandated by Section /<
of &ule A of the 'ew &ules of Brocedure of the '(&#. Bhilippine >irlines 8nc. vs. '(&# %-:; S#&> :;+, /00:12
3he '(&# ravely abused its discretion by allowin and decidin an appeal without an appeal bond havin been
filed as required under >rticle --; of the (abor #ode. "@nicane $or4ers @nion!#(@B vs. '(&# %-:/ S#&> <*;, /00:12
3he labor arbiter ravely abused its discretion in disreardin the rule overnin position papers. 8n this case, the
parties have already filed their position papers and even areed to consider the case submitted for decision, yet the labor
arbiter still admitted a supplemental position paper and memorandum, and by ta4in into consideration, as basis for his
decision, the alleed facts adduced therein and the documents attached thereto. "CaMebo vs. '(&# %--0 S#&> -),,
/00)12
3he '(&# ravely abused its discretion in treatin the motion to set aside judment and writ of execution as a
petition for relief of judment. 8n doin so, public respondent had, without sufficient basis, extended the relementary
period for filin petition for relief from judment contrary to prevailin rule and case law. "Gesulon vs. '(&# %-/0 S#&>
<:/, /00;12
4ppeal %ond
>ppeal. .ecisions, awards, or orders of the (abor >rtiber are final and executory unless appealed to the
#ommission by any or both parties within ten "/,2 calendar days from receipt of such decisions, awards, or orders. Such
appeal may be entertained only on any of the followin rounds?
xxx xxx xxx
8n case of a judment involvin a monetary award, an appeal by the employer may be perfected only upon the
postin of a cash or surety bond issued by a reputable bondin company duly accredited by the #ommission in the
amount equivalent to the monetary award in the judment appealed from. ">rticle --; of the (abor #ode2
3he requirement that the employer post a cash or surety bond to perfect itsDhis appeal is apparently intended to
assure the wor4ers that if they prevail in the case, they will receive the money judment in their favor upon the dismissal
of the employer7s appeal. 8t was intended to discourae employers from usin an appeal to delay, or even evade, their
obliation to satisfy their employee7s just and lawful claims+ "Airon Garments Cf., #o. vs. '(&# %G.&. 'o. 0*;<*, /+
Carch /00-12
3here is a clear distinction between the filin of an appeal within the relementary period and its perfection. 3he
latter may transpire after the end of the relementary period for filin the appeal.
@nder >rticle --; of the (abor #ode, an appeal to the '(&# from the decisions, awards or orders of the (abor
>rbiter must be made "within ten "/,2 calendar days from receipt of such decisions, awards or orders." @nder Section ;"a2
of &ule A8 of the 'ew &ules of Brocedure of the '(&#, the appeal fees must be paid and the memorandum of appeal
must be filed within the ten!day relementary period.
'either the (abor #ode nor its implementin rules specifically provide for a situation where the appellant moves for a
reduction of the appeal bond.
8nasmuch as in practice the '(&# allows the reduction of the appeal bond upon motion of appellant and on
meritorious rounds, it follows that a motion to that effect may be filed within the relementary period for appealin+ Such
motion may be filed in lieu of a bond which amount is bein contested+ 8n the meantime, the appeal is not deemed
perfected and the (abor >rbiter retains jurisdiction over the case until the '(&# has acted on the motion and appellant
has filed the bond as fixed by the '(&#+ "Star >nel Handicraft vs. '(&# %G.&. 'o. /,+0/), -, September /00)12
3he precipitate filin of this special civil action for certiorari without first movin for reconsideration of the assailed
judment of '(&# warrants the outriht dismissal of this case. >s we consistently held in numerous cases, a motion for
reconsideration is indispensable for it affords the '(&# an opportunity to rectify errors or mista4es it miht have
committed before resort to the courts can be had.
8t is settled that certiorari will lie only if there is no appeal or any other plain, speedy and adequate remedy in the
ordinary course of law aainst acts of public respondent. < 8n the case at bar, the plain and adequate remedy expressly
provided by law was a motion for reconsideration of the impuned decision, based on palpable or patent errors, to be
made under oath and filed within ten "/,2 days from receipt of the questioned judment of the '(&#, a procedure which is
jurisdictional. Hence, oriinal action of certiorari, as in this case will not prosper.
5urther, not havin filed a motion for reconsideration within the ten!day relementary period, the questioned order,
resolution or decision of '(&#, becomes final and executory after ten "/,2 calendar days from receipt thereof. 3hus, as
reards petitioner, the decision of '(&# became final and executory on .ecember *, /00<. #onsequently, the merits of
the case can no loner be reviewed to determine if the respondent '(&# could be faulted of rave abuse of discretion.
"(aera vs. '(&# %G.&. 'o. /-;:;:, ;/ Carch -,,,12
Generally, certiorari as a special civil action will not lie unless a motion for reconsideration is filed before the
respondent tribunal to allow it an opportunity to correct its imputed errors. However, the followin have been reconized
as exceptions to the rule? $here !
/. 3he order is a patent nullity, as where the court a quo has no jurisdiction9
-. 3he questions raised in the certiorari proceedins have been duly raised and passed upon by the lower
court, or are the same as those raised and passed upon in the lower court9
;. 3here is an urent necessity for the resolution of the question and any further delay would prejudice the
Government or of the petitioner or the subject matter of the action is perishable9
). @nder the circumstances, a motion for reconsideration would be useless9
<. Betitioner is deprived of due process and there is extreme urency of relief9
:. 8n a criminal case, relief from an order of arrest is urent and the rantin of such relief by the trial court is
improbable9
*. 3he proceedins in the lower court are a nullity for lac4 of due process9
+. 3he proceedins was ex parte or on which the petitioner had no opportunity to object9 and
0. 3he issue raised is one purely of law or where public interest is involved.
">braham vs. '(&# %G.&. 'o. /);+-;, ,: Carch -,,/12
'rom &RC to Court of 4ppeals
> review of the leislative records on the antecedents of &.>. 'o. *0,- persuades us that there may have been an
oversiht in the course of the deliberations on the said >ct or an imprecision in the terminoloy used therein. 8n fine,
#onress did intend to provide for judicial review of the adjudications of the '(&# in labor cases by the Supreme #ourt,
but there was an inaccuracy in the term used for the intended mode of review. 3his conclusion which we have reluctantly
51
but prudently arrived at has been drawn from the considerations extant in the records of #onress, more particularly on
Senate =ill 'o. /)0< and the &eference #ommittee &eport on S. 'o. /)0<DH. 'o. /,)<-.
3he #ourt is, therefore, of the considered opinion that ever since appeals from the '(&# to the Supreme #ourt were
eliminated, the leislative intendment was that the special civil action of certiorari was and still is the proper vehicle for
judicial review of decisions of the '(&#. 3he use of the word "appeal" in relation thereto and in the instances we have
noted could have been a lapsus plumae because appeals by certiorari and the oriinal action for certiorari are both modes
of judicial review addressed to the appellate courts. 3he important distinction between them, however, and with which the
#ourt is particularly concerned here is that the special civil action of certiorari is within the concurrent oriinal jurisdiction
of this #ourt and the #ourt of >ppeals9 whereas to indule in the assumption that appeals by certiorari to the Supreme
#ourt are allowed would not subserve, but would subvert, the intention of #onress as expressed in the sponsorship
speech on Senate =ill 'o. /)0<.
3herefore, all references in the amended Section 0 of =.B. 'o. /-0 to supposed appeals from the '(&# to the
Supreme #ourt are interpreted and hereby declared to mean and refer to petitions for certiorari under &ule :<.
#onsequently, all such petitions should hence forth be initially filed in the #ourt of >ppeals in strict observance of the
doctrine on the hierarchy of courts as the appropriate forum for the relief desired.
"St. Cartin 5uneral Home vs. '(&# %G.&. 'o. /;,+::, /: September /00+12

Miscellaneo3s
%#1GCB@(SG&J >&=83&>38G' has been defined both as "the process of settlement of labor disputes by a
overnment aency which has the authority to investiate and to ma4e an award which is bindin on all the parties," and
as mode of arbitration where the parties are "compelled to accept the resolution of their dispute throuh arbitration by the
a third party." "&eformist @nion Gf &.=. (iner vs. '(&# %G.&. 'o. /-,)+-, -* 6anuary /00*12
%#1GCB&GC8SE >G&EECE'3, an areement between two or more persons, who, for preventin or puttin an end
to a lawsuit, adjust their difficulties by mutual consent in the manner which they aree on, and which everyone of them
prefers to the hope of ainin, balanced by the daner of losin. "&eformist @nion Gf &.=. (iner vs. '(&# %G.&. 'o.
/-,)+-, -* 6anuary /00*12
$>GE .8S3G&38G' means a situation where an increase in prescribed wae rates results in the elimination or
severe contradiction of intentional quantitative differences in wae or salary rates between and amon employee roups
in an establishment as to effectively obliterate the distinctions embodied in such wae structure based on s4ills, lenth of
service, or other loical bases of differentiation. "&ules 8mplementin &epublic >ct :*-*2
S@=S3>'38>( EA8.E'#E means that amount of relevant evidence which a reasonable mind miht accept as
adequate to justify a conclusion. "Sebuuero vs. '(&# %G.&. 'o. //<;0), -* September /00<12
CE&#@&J .&@G &@(E which limited the award of bac4 waes of illeally dismissed wor4ers to three ";2 years
"without deduction or qualification" to obviate the need for further proceedins in the course of execution. "Cercury .ru
#o., 8nc. vs. #ourt of 8ndustrial &elations, <: S#&> :0) %/0*)12
HG(. GAE& B&8'#8B(E states that it shall be the duty of both parties to 4eep the status quo and continue in full force and effect
the terms and conditions of the existin #=> durin the :,!day freedom period andDor until a new areement is reached by the
parties. "Ceralco vs. Secretary of (abor %G.&. 'o. /-*<0+, ,/ >uust -,,,12