Republic of the Philippines
G.R. No. 89621 September 24, 1991
PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented by its Plant General Manager
ANTHONY B. SIAN, ELEAZAR LIMBAB, IRENEO BALTAZAR & JORGE HERAYA, petitioners,
HON. LOLITA O. GAL-LANG, SALVADOR NOVILLA, ALEJANDRO OLIVA, WILFREDO CABAÑAS &
FULGENCIO LEGO, respondents.
Aurelio D. Menzon for petitioners.
Mario P. Nicolasora co-counsel for petitioners.
Papiano L. Santo for private respondents.
The question now before us has been categorically resolved in earlier decisions of the Court that a
little more diligent research would have disclosed to the petitioners. On the basis of those cases
and the facts now before us, the petition must be denied.
The private respondents were employees of the petitioner who were suspected of complicity in the
irregular disposition of empty Pepsi Cola bottles. On July 16, 1987, the petitioners filed a criminal
complaint for theft against them but this was later withdrawn and substituted with a criminal
complaint for falsification of private documents. On November 26, 1987, after a preliminary
investigation conducted by the Municipal Trial Court of Tanauan, Leyte, the complaint was
dismissed. The dismissal was affirmed on April 8, 1988, by the Office of the Provincial Prosecutor.
Meantime, allegedly after an administrative investigation, the private respondents were dismissed
by the petitioner company on November 23, 1987. As a result, they lodged a complaint for illegal
dismissal with the Regional Arbitration Branch of the NLRC in Tacloban City on December 1, 1987,
and decisions manded reinstatement with damages. In addition, they instituted in the Regional
Trial Court of Leyte, on April 4, 1988, a separate civil complaint against the petitioners for damages
arising from what they claimed to be their malicious prosecution.
The petitioners moved to dismiss the civil complaint on the ground that the trial court had no
jurisdiction over the case because it involved employee-employer relations that were exclusively
cognizable by the labor arbiter. The motion was granted on February 6, 1989. On July 6, 1989,
however, the respondent judge, acting on the motion for reconsideration, reinstated the
complaint, saying it was "distinct from the labor case for damages now pending before the labor
courts." The petitioners then came to this Court for relief.
The petitioners invoke Article 217 of the Labor Code and a number of decisions of this Court to
support their position that the private respondents civil complaint for damages falls under the
jurisdiction of the labor arbiter. They particularly cite the case of Getz Corporation v. Court of
Appeals, 1 where it was held that a court of first instance had no jurisdiction over the complaint
filed by a dismissed employee "for unpaid salary and other employment benefits, termination pay
and moral and exemplary damages."
We hold at the outset that the case is not in point because what was involved there was a claim
arising from the alleged illegal dismissal of an employee, who chose to complain to the regular
court and not to the labor arbiter. Obviously, the claim arose from employee-employer relations
and so came under Article 217 of the Labor Code which then provided as follows:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters shall have the
original and exclusive jurisdiction to hear and decide within thirty (30) working days after
submission of the case by the parties for decision, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and other terms and conditions of
3. All money claims of workers, including those based on non-payment or underpayment of wages,
overtime compensation, separation pay and other benefits provided by law or appropriate
agreement, except claims for employees' compensation, social security, medicare and maternity
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code, including questions involving the
legality of strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by labor
It must be stressed that not every controversy involving workers and their employers can be
resolved only by the labor arbiters. This will be so only if there is a "reasonable causal connection"
between the claim asserted and employee-employer relations to put the case under the provisions
of Article 217. Absent such a link, the complaint will be cognizable by the regular courts of justice in
the exercise of their civil and criminal jurisdiction.
In Medina v. Castro-Bartolome, 3 two employees filed in the Court of First Instance of Rizal a civil
complaint for damages against their employer for slanderous remarks made against them by the
company president. On the order dismissing the case because it came under the jurisdiction of the
labor arbiters, Justice Vicente Abad Santos said for the Court:
It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Theirs
is a simple action for damages for tortious acts allegedly committed by the defendants. Such being
the case, the governing statute is the Civil Code and not the Labor Code. It results that the orders
under review are based on a wrong premise.
In Singapore Airlines Ltd. v. Paño, 4 where the plaintiff was suing for damages for alleged violation
by the defendant of an "Agreement for a Course of Conversion Training at the Expense of
Singapore Airlines Limited," the jurisdiction of the Court of First Instance of Rizal over the case was
questioned. The Court, citing the earlier case of Quisaba v. Sta. Ines Melale Veneer and Plywood,
Inc., 5 declared through Justice Herrera:
Stated differently, petitioner seeks protection under the civil laws and claims no benefits under the
Labor Code. The primary relief sought is for liquidated damages for breach of a contractual
obligation. The other items demanded are not labor benefits demanded by workers generally taken
cognizance of in labor disputes, such as payment of wages, overtime compensation or separation
pay. The items claimed are the natural consequences flowing from breach of an obligation,
intrinsically a civil dispute.
In Molave Sales, Inc. v. Laron, 6 the same Justice held for the Court that the claim of the plaintiff
against its sales manager for payment of certain accounts pertaining to his purchase of vehicles and
automotive parts, repairs of such vehicles, and cash advances from the corporation was properly
cognizable by the Regional Trial Court of Dagupan City and not the labor arbiter, because "although
a controversy is between an employer and an employee, the Labor Arbiters have nojurisdiction if
the Labor Code is not involved."
The latest ruling on this issue is found in San Miguel Corporation v. NLRC, 7 where the above cases
are cited and the changes in Article 217 are recounted. That case involved a claim of an employee
for a P60,000.00 prize for a proposal made by him which he alleged had been accepted and
implemented by the defendant corporation in the processing of one of its beer products. The claim
was filed with the labor arbiter, who dismissed it for lack of jurisdiction but was reversed by the
NLRC on appeal. In setting aside the appealed decision and dismissing the complaint, the Court
observed through Justice Feliciano:
It is the character of the principal relief sought that appears essential, in this connection. Where
such principal relief is to be granted under labor legislation or a collective bargaining agreement,
the case should fall within the jurisdiction of the Labor Arbiter and the NLRC, even though a claim
for damages might be asserted as an incident to such claim.
xxx xxx xxx
Where the claim to the principal relief sought is to be resolved not by reference to the Labor Code
or other labor relations statute or a collective bargaining agreement but by the general civil law,
the jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor
Arbiter and the NLRC. In such situations, resolution of the dispute requires expertise, not in labor
management relations nor in wage structures and other terms and conditions of employment, but
rather in the application of the general civil law. Clearly, such claims fall outside the area of
competence or expertise ordinarily ascribed to Labor Arbiters and the NLRC and the rationale for
granting jurisdiction over such claims to these agencies disappears.
xxx xxx xxx
While paragraph 3 above refers to "all money claims of workers," it is not necessary to suppose
that the entire universe of money claims that might be asserted by workers against their employers
has been absorbed into the original and exclusive jurisdiction of Labor Arbiters.
xxx xxx xxx
For it cannot be presumed that money claims of workers which do not arise out of or in connection
with their employer-employee relationship, and which would therefore fall within the general
jurisdiction of the regular courts of justice, were intended by the legislative authority to be taken
away from the jurisdiction of the courts and lodged with Labor Arbiters on an exclusive basis. The
Court, therefore, believes and so holds that the 'money claims of workers" referred to in paragraph
3 of Article 217 embraces money claims which arise out of or in connection with the employeremployee relationship, or some aspect or incident of such relationship. Put a little differently, that
money claims of workers which now fall within the original and exclusive jurisdiction of Labor
Arbiters are those money claims which have some reasonable causal connection with the
employer-employee relationship (Ibid.).
The case now before the Court involves a complaint for damages for malicious prosecution which
was filed with the Regional Trial Court of Leyte by the employees of the defendant company. It
does not appear that there is a "reasonable causal connection" between the complaint and the
relations of the parties as employer and employees. The complaint did not arise from such
relations and in fact could have arisen independently of an employment relationship between the
parties. No such relationship or any unfair labor practice is asserted. What the employees are
alleging is that the petitioners acted with bad faith when they filed the criminal complaint which
the Municipal Trial Court said was intended "to harass the poor employees" and the dismissal of
which was affirmed by the Provincial Prosecutor "for lack of evidence to establish even a slightest
probability that all the respondents herein have committed the crime imputed against them." This
is a matter which the labor arbiter has no competence to resolve as the applicable law is not the
Labor Code but the Revised Penal Code.
"Talents differ, all is well and wisely put," so observed the philosopher-poet. 8 So it must be in the
case we here decide.
WHEREFORE, the order dated July 6, 1989, is AFFIRMED and the petition DENIED, with costs against
Narvasa (Chairman), Griño-Aquino and Medialdea, JJ., concur.
G.R. No. 127639 December 3, 1999
SAN MIGUEL CORPORATION and BERNARDO NOEL in his capacity as Industrial Relations
ALFREDO ETCUBAN, BERNABE ETCUBAN, NORBERTO LABUCA, FELIPE ECHAVEZ, BERNARDINO
ENJAMBRE, ROGELIO ABELLANOSA, ROMULO CATALAN, PEDRO EBOT, ANATOLIO GERALDIZO,
JOSE ALFANTA, EDUARDO LOFRANCO, LECERIO PARBA, RAFAEL AGUILAR, RICARDO LACUAREN,
BENJAMIN ALESNA, ANTONIO BACUS, PRIMO SOTEROL, JESUS JADORMEO, MANUEL MANKIKIS,
APRONIANO ANG, RENATO VILLALON, SAMUEL OUANO, JOSE DELA, JESUS BASILGO, CATALINO
COLE, SR., ALFREDO GONZALES, RAMON FLORES, MARCOS VITO CRUZ, JACINTO DIVINAGRACIA,
ALAN ALINSUGAY and CLAUDIO AGAN, respondents.
Before the Court is a petition for review on certiorari of the Decision, dated 16 May 1996 of the
Court of Appeals in CA-G.R. CV No. 46554 and of its Resolution, dated November 1996 denying
petitioners' motion for reconsideration of said decision. The Court of Appeals' decision reversed
and set aside the resolution of the Regional Trial Court of Cebu, Branch 19, in Civil Case No. CEB15310, dismissing for lack of jurisdiction respondents' complaint for damages against petitioners
for terminating their employment by fraudulently inducing them to accept petitioners'
The antecedents of this case are as follows:
In 1981, San Miguel Corporation (SMC) informed its Mandaue City Brewery employees that it was
suffering from heavy losses and financial distress which could eventually lead to its total closure. In
several meetings convened by SMC with its employee, it was explained to them that the distressed
state of SMC was caused by its poor sales performance which, in order to survive, called for a
cutback in production and a corresponding reduction in the work force. Because of this, SMC
offered its "Retrenchment to Prevent Loss Program" to its employees. The offering of the
retrenchment program was coupled with an unsolicited advise from SMC that it would be in the
best interest of the affected employees to avail of the said program since, by doing so, they would
be able to obtain their retrenchment benefits and privileges with ease. SMC admonished its
employees that their failure to avail of the retrenchment program might lead to difficulty in
following-up and obtaining their separation pay from the SMC's main office in Manila.
Convinced by the representations and importunings of SMC, respondents, who had been
employees of SMC since the 1960s, availed of the retrenchment program at various times in 1981,
1982 and 1983. After their inclusion in the retrenchment program, respondents were given their
termination letters and separation pay. In return, respondents executed "receipt and release"
documents in favor of SMC.
Sometime in May of 1986, respondents got hold of an SMC publication allegedly revealing that
SMC was never in financial distress during the time when they were being retrenched but was, in
fact, enjoying a growth in sales. Respondents also learned that, during their retrenchment, SMC
was engaged in hiring new employees. Thus, respondents concluded that SMC's financial distress
story and retrenchment program were merely schemes to rid itself of regular employees and, thus,
avoid the payment of their actual benefits.
On 17 October 1988, respondents filed a complaint before the Regional Arbitration Branch No. VII
of the National Labor Relations Commission (NLRC) for the declaration of nullity of the
retrenchment program. In their complaint, respondents alleged that they were former regular
employees of SMC who were deceived into severing their employment due to SMC's concocted
financial distress story and fraudulent retrenchment program. Respondents prayed for
reinstatement, backwages and damages. On 25 July 1989, the Labor Arbiter dismissed the
complaint on the ground of prescription, stating:
What is apparent from their allegations, however, is that complainants are contesting their
respective terminations pursuant to the Retrenchment Program effected by San Miguel
Corporation in 1981, 1982, and 1983. These then are claims for illegal dismissal which fall within
the ambit of Article 291 of the New Labor Code. It provides:
Art. 291. Money claims. — All money claims arising from employer-employee relations accruing
during the effectivity of this Code, shall be filed within three (3) years from the time the cause of
action accrued; otherwise they shall be forever barred. . . .
Under the aforequoted provision therefore, complainants' causes of action have already
Even if this Office were to apply the more liberal interpretation of the above provisions enunciated
by the Honorable Supreme Court in the case of Callanta vs. Carnation Phils., Inc., G.R. No. 70615,
Nov. 3, 1986, an interpretation that views illegal dismissal as an injury upon the rights of a person,
hence, under Article 1146 of the Civil Code prescribes in 4 years, those who were retrenched in
1983, at the very latest, had only until 1987 to institute a complaint against SMC.
The records will show that all the above captioned cases were filed in 1988.
Clearly, therefore, complainants' causes of action have already prescribed. 1
Respondents then appealed to the NLRC which, on 20 December 1990, dismissed the appeal and
affirmed the decision of the labor arbiter.
On 14 December 1993, respondents, who were thirty-one (31) in number, again filed a
complaint 2 against SMC, but this time before the Regional Trial Court of Cebu City, Branch 19.
Although their complaint was captioned as an action for damages, respondents sought the
declaration of nullity of their so-called collective "contract of termination" with SMC. Respondents
theorized that SMC's offer of retrenchment and their acceptance of the same resulted in the
consummation of a collective "contract of termination" between themselves and SMC.
Respondents asserted that since the cause of their "contract of termination" was non-existent, i.e.,
the claim of SMC that it was under financial distress, the said contract is null and void. In this
regard, respondents claimed that they were entitled to damages because of the deception
employed upon them by SMC which led to their separation from the company. They further
asseverated that their separation from employment resulted in the loss of earnings and other
benefits. Hence, they prayed that petitioners jointly and severally be ordered, among others, to
pay each of them the sum of P650,000.00 as actual and compensatory damages, P100,000.00 as
moral damages, P50,000.00 as exemplary damages, and 25% of whatever may be awarded to them
as attorney's fees.
Instead of filing an answer, SMC filed a motion to dismiss on the bases of lack of jurisdiction, res
judicata, payment, prescription and failure to state a cause of action. On 21 June 1994, the RTC
issued a resolution granting SMC's motion to dismiss on the grounds of lack of jurisdiction and
prescription. The pertinent portion of the resolution reads:
Although plaintiffs, among others, pray for the declaration of nullity of the contract of termination,
their main cause is for damages, actual, compensatory and moral damages in the "aggregate
amount of P650,000.00 each and P1,200,000.00 each" for plaintiffs Bernabe Etcuban and Jose Dela.
The alleged acts leading to their signing of the contract of termination are acts constituting labor
disputes. It is a case for damages resulting from illegal termination. Under Article 217 of the Labor
Code, such cases fall within the exclusive original jurisdiction of the Labor Arbiter and the National
Labor Relations Commission. In fact, in 1988, plaintiffs instituted the same case for
"implementation of Art. 217, par. 5, now (sic) Labor Code and Declaration of Nullity of
"Retrenchment" Program, and Damages" (see annex "A" to Motion to Dismiss) with the National
Labor Relations Commission. Their cases were dismissed, not because of lack of jurisdiction, but
because their cause of action already prescribed, the cases having been filed after the three-year
prescriptive period. Plaintiffs have already submitted to the jurisdiction of the NLRC when they
filed their cases with that agency. And they prayed for the declaration of nullity of the
retrenchment program of defendant corporation. It was only after the dismissal of those cases that
they instituted this present suit.
xxx xxx xxx
Moreover, the contract of termination which plaintiffs were allegedly induced to sign is not void
from the beginning. At most, such contract is voidable, plaintiffs' consent thereto being allegedly
vitiated by fraud and deceit.
Thus plaintiffs allege that "the brainwashing conducting (ted) on the affected employees through
briefings and pulong-pulongs relative to the actual economic condition of defendant corporation
finally led plaintiffs to believe that indeed said defendant was incurring losses and has opted to
reduce its production to arrest an immediate collapse of its operations. Thus, the corresponding
need to cut down on its work force;" (par. 11, complaint);" This distressed state of affairs of the
defendant corporation inculcated into their (sic) minds of defendants and the worry of nonrecovery of their benefits in the event defendant corporation closes down, induced plaintiffs to
accept the "offer of retrenchment". Thereupon, they were paid their so-called "separation pay".
Hence, the contract of termination evidenced by individual termination letters and benefits paid to
each plaintiff was consummated." (par. 12). But that "records, however, revealed that from 1973
up to 1983, inclusive, defendant corporation never suffered any business reverses or losses in its
operation."; (par. 13, complaint).
When the consent of one of the contracting parties is vitiated by fraud or deceit, the resulting
contract is only voidable or annulable, not void or inexistent. The action to annul the same should
be filed within four (4) years from discovery of the fraud or deceit. According to plaintiffs'
complaint, they "acquired knowledge of the actual business condition of defendant corporation
only in May 1986 when one of them got hold of a copy of the company's publication. That was the
time they discovered that indeed, defendants deceived them . . . . (par. 14, complaint.) From May
1986 to January 14, 1993, more than six (6) years have already elapsed. Clearly, the action, has
The rest of the grounds need not be discussed.
WHEREFORE, for want of jurisdiction, and on the further ground of prescription, the above-entitled
case is dismissed.
SO ORDERED. 3
Respondents seasonably appealed to the Court of Appeals (CA). In its Decision dated 16 May 1996,
the CA reversed and set aside the lower court's order of dismissal and remanded the case to the
RTC for further proceedings. The pertinent portion of the decision reads:
A scrutiny of the allegations of the present complaint reveals that plaintiffs' cause of action is not
actually based on an employer-employee relationship between the plaintiffs and the defendants. It
primarily involves a civil dispute arising from the claim of plaintiffs that the cause for the contract
of termination of their services is inexistent rendering said contract as null and void from the
beginning. . . .
xxx xxx xxx
Guided thereby, we find that recourse by plaintiffs-appellants to the civil law on contracts by
raising the issue [of] whether or not the contract of termination of services entered into by
plaintiffs with defendants is void from the beginning due to inexistent cause of action under Article
1409 of the Civil Code, places the case within the jurisdiction of the civil courts.
As refined by the Supreme Court, where the resolution of the dispute requires expertise, not in
labor management relations nor in wage structures and other terms and conditions of
employment, but rather in the application of the general civil law, such claim falls outside the area
of competence of expertise ordinarily ascribed to Labor Arbiters and the NLRC. Thus, the trial court
erred in finding that it has no jurisdiction over the case.
Secondly, the trial court erred in ruling that the complaint of plaintiffs-appellants has prescribed.
Article 1410 of the Civil Code, in relation to Article 1409 as herein before quoted, specifically
provides that the action for the declaration of the inexistence of a contract on ground (3) above
does not prescribe.
Thirdly, one of the requisites for the application of the principle of res judicata is that there must
be a judgment on the merits in the earlier case involving the same parties and the same issues.
Plaintiffs-appellants' complaint was dismissed by the NLRC on the ground that their cause of action
had prescribed; no trial has been held on the first complaint. Thus, the dismissal of the first
complaint is not a judgment on the merits and therefore not applicable to the present case.
xxx xxx xxx
WHEREFORE, the order of dismissal is reversed and set aside. Let the original records of Civil Case
No. CEB-15310, be remanded to the Regional Trial Court (Branch 19), Cebu City for further
proceedings. Costs against defendants-appellees.
SO ORDERED. 4
SMC filed a motion for reconsideration but was denied in the CA's Resolution dated 14 November
1996 5. Hence, this petition.
In its petition, SMC contends that the CA erred:
IN HOLDING THAT THE REGIONAL TRIAL COURT OF CEBU, BRANCH 19, HAS JURISDICTION OVER
THE INSTANT CASE AND THE CAUSE OF ACTION OF THE RESPONDENTS ARE NOT ACTUALLY BASED
ON AN EMPLOYER-EMPLOYEE RELATIONSHIP WHEN THE COMPLAINT SHOWS THAT THE
RESPONDENTS ARE CLAIMING TO HAVE BEEN UNJUSTLY SEPARATED FROM THEIR REGULAR
EMPLOYMENTS (sic) BY THE PETITIONERS AND ARE DEMANDING TO BE PAID ACTUAL AND
COMPENSATORY DAMAGES CONSISTING OF "THEIR EXPECTED INCOME BY WAY OF SALARIES AND
OTHER FRINGE BENEFITS DUE THEM UNDER THE LAW FROM THE TIME OF THEIR SEPARATION AND
UNTIL THEIR RETIREMENT DUE TO AGE OR LENGTH OF SERVICE . . . SOCIAL SECURITY SYSTEM
BENEFITS . . . RETIREMENT BENEFITS.
IN RULING THAT THE COMPLAINT OF THE RESPONDENTS HAVE NOT YET PRESCRIBED WHEN THE
RESPONDENTS HAVE CLAIMED IN THEIR COMPLAINT THAT THEY HAVE BEEN ALLEGEDLY
BRAINWASHED BY THE PETITIONERS AND THEIR COMPAINT (sic) WAS FILED ONLY AFTER MORE
THAN SIX (6) YEARS HAVE LAPSED FROM THE TIME THAT THE RESPONDENTS CLAIMED TO HAVE
"DISCOVERED THAT INDEED, DEFENDANTS (Petitioners) DECEIVED THEM INTO BELIEVING THAT
THE DEFENDANT CORPORATION WAS INCURRING LOSSES IN ITS OPERATION HENCE, THE
NECESSITY TO TRIM DOWN ITS WORK FORCE TO INDUCE THEM TO ACCEPT THE "OFFER OF
IN RULING THAT "THE DISMISSAL OF THE FIRST COMPLAINT IS NOT A JUDGMENT ON THE MERITS
AND THEREFORE NOT APPLICABLE TO THE PRESENT CASE" WHEN IT IS THE SAID DIVISION'S OWN
FINDING THAT: "THE COMPLAINT FILED BY HEREIN PLAINTIFFS-APPELLANTS (Respondents) WITH
THE REGIONAL ARBITRATION BRANCH PRAYED FOR THE DECLARATION OF THE TERMINATION
SCHEME ALLEGEDLY DECEPTIVELY FORCED UPON THEM TO BE NULL AND VOID WITH THE SAME
PRAYER THAT THEY BE REINSTATED TO THEIR REGULAR EMPLOYMENT WITHOUT ANY LOSS OF ANY
RIGHTS (sic) AND BENEFITS (sic) AS WELL AS PAYMENT OF THEIR BACK WAGES AND DAMAGES." 6
We find the petition impressed with merit.
The demarcation line between the jurisdiction of regular courts and labor courts over cases
involving workers and their employers has always been the subject of dispute. We have recognized
that not all claims involving such groups of litigants can be resolved solely by our labor
courts. 7 However, we have also admonished that the present trend is to refer worker-employer
controversies to labor courts, unless unmistakably provided by the law to be otherwise. 8Because
of this trend, jurisprudence has developed the "reasonable causal connection rule." Under this
rule, if there is a reasonable causal connection between the claim asserted and the employeremployee relations, then the case is within the jurisdiction of our labor courts. 9 In the absence of
such nexus, it is the regular courts that have jurisdiction. 10
The jurisdiction of labor courts is provided under Article 217 of the Labor Code, to wit:
Art. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided
under this Code the Labor Arbiter shall have original and exclusive jurisdiction to hear and decide,
within thirty (30) calendar days after the submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving
wages, rates of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from employeremployee relations;
5. Cases arising from any violation of Article 264 of this Code including questions involving the
legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all
other claims, arising from employer-employee relations, including those of persons in domestic or
household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of
whether accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
(c) Cases arising from the interpretation or implementation of collective bargaining agreements
and those arising from the interpretation or enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements. 11
With regard to claims for damages under paragraph 4 of the above article, this Court has observed
Jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article 217, to be
cognizable by the Labor Arbiter, must have a reasonable causal connection with any of the claims
provided for in that article. Only if there is such a connection with the other claims can the claim
for damages be considered as arising from employer-employee relations. 12
In the present case, while respondents insist that their action is for the declaration of nullity of
their "contract of termination," what is inescapable is the fact that it is, in reality, an action for
damages emanating from employer-employee relations. First, their claim for damages is grounded
on their having been deceived into severing their employment due to SMC's concocted financial
distress and fraudulent retrenchment program — a clear case of illegal dismissal. Second, a
comparison of respondents' complaint for the declaration of nullity of the retrenchment program
before the labor arbiter and the complaint for the declaration of nullity of their "contract of
termination" before the RTC reveals that the allegations and prayer of the former are almost
identical with those of the latter except that the prayer for reinstatement was no longer included
and the claim for backwages and other benefits was replaced with a claim for actual damages.
These are telltale signs that respondents' claim for damages is intertwined with their having been
separated from their employment without just cause and, consequently, has a reasonable causal
connection with their employer-employee relations with SMC. Accordingly, it cannot be denied
that respondents' claim falls under the jurisdiction of the labor arbiter as provided in paragraph 4
of Article 217.
Respondents' assertion that their action is for the declaration of nullity of their "contract of
termination" is merely an ingenious way of presenting their actual action, which is a claim for
damages grounded on their having been illegal terminated. However, it would seem that
respondents committed a Freudian slip when they captioned their claim against SMC as an action
for damages. 13 Even the term used for designating the contract, i.e. "contract of termination," was
formulated in a shrewd manner so as to avoid a semblance of employer-employee relations. This
observation is bolstered by the fact that if respondents' designation for the contract were to be
made complete and reflective of its nature, its proper designation would be a "contract of
termination of employment."
The Court is aware that the Civil Code provisions on contracts and damages may be used as bases
for addressing the claim of respondents. However, the fact remains that the present action
primarily involves an employer-employee relationship. The damages incurred by respondents as a
result of the alleged fraudulent retrenchment program and the allegedly defective "contract of
termination" are merely the civil aspect of the injury brought about by their illegal dismissal. 14 The
civil ramifications of their actual claim cannot alter the reality that it is primordially a labor matter
and, as such, is cognizable by labor courts. In Associated Citizens Bank vs. Japson, 15 we held:
For the unlawful termination of employment, this Court in Primero v. Intermediate Appellate
Court,supra, ruled that the Labor Arbiter had the exclusive and original jurisdiction over claims for
moral and other forms of damages, so that the employee in the proceedings before the Labor
Arbiter should prosecute his claims not only for reliefs specified under the Labor Code but also for
damages under the Civil Code. This is because an illegally dismissed employee has only a single
cause of action although the act of dismissal may be a violation not only the Labor Code but also of
the Civil Code. For a single cause of action, the dismissed employee cannot institute a separate
action before the Labor Arbiter for backwages and reinstatement and another action before the
regular court for the recovery of moral and other forms of damages because splitting a single cause
of action is procedurally unsound and obnoxious to the orderly administration of justice. (Primero
v. Intermediate Appellate Court, supra, citing Gonzales v. Province of Iloilo, 38 SCRA 209; Cyphil
Employees Association-Natu v. Pharmaceutical Industries, 77 SCRA 135; Calderon v. Court of
Appeals, 100 SCRA 459, etc.) 16
Even assuming arguendo that the RTC has jurisdiction, it is obvious from respondents' own
pleadings that their action for the declaration of nullity of the "contract of termination" will not
prosper. Respondents allege that they were deceived by SMC into believing that it was under
financial distress which, thus, led them into concluding the "contract of termination" with the
latter. 17 Respondents then posit that since the cause of the contract, SMC's alleged financial
distress, was inexistent, the contract is null and void. The argument is flawed.
The fact that SMC was never in financial distress does not, in any way, affect the cause of their
"contract of termination." Rather, the fraudulent representations of SMC only affected the consent
of respondents in entering into the said contract. 18 If the consent of a contracting party is vitiated
by fraud, the contract is not void but, merely, voidable. 19 In Abando vs. Lozada, 20 we ruled:
As correctly pointed out by the appellate court, the strategem (sic), the deceit, the
misrepresentations employed by Cuevas and Pucan are facts constitutive of fraud which is defined
in Article 1338 of the Civil Code as that (sic) insidious words or machinations of one of the
contracting parties, by which the other is induced to enter into a contract which, without them, he
would not have agreed to. When fraud is employed to obtain the consent of the other party to
enter into a contract, the resulting contract is merely a voidable contract, that is, a valid and
subsisting contract until annulled or set aside by a competent court. . . . 21
An action to annul a voidable contract based on fraud should be brought within four (4) years from
the discovery of the same. 22 In the present case, respondents discovered SMC's fraud in May 1986.
However, the action to question the validity of the contract was only brought on 14 December
1993, or more than seven (7) years after the discovery of the fraud. Clearly, respondents' action
has already prescribed.
The issue of jurisdiction and prescription having been resolved, it is no longer necessary to discuss
the issue onres judicata raised in this petition.
WHEREFORE, premises considered, the Decision of the Court of Appeals dated 16 May 1996 and its
Resolution dated 14 November 1996 are hereby REVERSED and SET ASIDE and the Resolution
dated 21 June 1994 of the Regional Trial Court of Cebu, Branch 19, in CEB-15310, REINSTATED.
G.R. No. 128024 May 9, 2000
BEBIANO M. BAÑEZ, petitioner,
HON. DOWNEY C. VALDEVILLA and ORO MARKETING, INC., respondents.
The orders of respondent judge 1 dated June 20, 1996 and October 16, 1996, taking jurisdiction
over an action for damages filed by an employer against its dismissed employee, are assailed in this
petition for certiorari under Rule 65 of the Rules of Court for having been issued in grave abuse of
Petitioner was the sales operations manager of private respondent in its branch in Iligan City. In
1993, private respondent "indefinitely suspended" petitioner and the latter filed a complaint for
illegal dismissal with the National Labor Relations Commission ("NLRC") in Iligan City. In a decision
dated July 7, 1994, Labor Arbiter Nicodemus G. Palangan found petitioner to have been illegally
dismissed and ordered the payment of separation pay in lieu of reinstatement, and of backwages
and attorney's fees. The decision was appealed to the NLRC, which dismissed the same for having
been filed out of time. 2 Elevated by petition for certiorari before this Court, the case was dismissed
on technical grounds3; however, the Court also pointed out that even if all the procedural
requirements for the filing of the petition were met, it would still be dismissed for failure to show
grave abuse of discretion on the part of the NLRC.
On November 13, 1995, private respondent filed a complaint for damages before the Regional Trial
Court ("RTC") of Misamis Oriental, docketed as Civil Case No. 95-554, which prayed for the
payment of the following:
a. P709,217.97 plus 12% interest as loss of profit and/or unearned income of three years;
b. P119,700.00 plus 12% interest as estimated cost of supplies, facilities, properties, space, etc. for
c. P5,000.00 as initial expenses of litigation; and
d. P25,000.00 as attorney's fees. 4
On January 30, 1996, petitioner filed a motion to dismiss the above complaint. He interposed in the
court below that the action for damages, having arisen from an employer-employee relationship,
was squarely under the exclusive original jurisdiction of the NLRC under Article 217(a), paragraph 4
of the Labor Code and is barred by reason of the final judgment in the labor case. He accused
private respondent of splitting causes of action, stating that the latter could very well have
included the instant claim for damages in its counterclaim before the Labor Arbiter. He also
pointed out that the civil action of private respondent is an act of forum-shopping and was merely
resorted to after a failure to obtain a favorable decision with the NLRC.
Ruling upon the motion to dismiss, respondent judge issued the herein questioned Order, which
summarized the basis for private respondent's action for damages in this manner:
Paragraph 5 of the complaint alleged that the defendant violated the plaintiff's policy re: His
business in his branch at Iligan City wherein defendant was the Sales Operations Manager, and
paragraph 7 of the same complaint briefly narrated the modus operandi of defendant, quoted
herein: Defendant canvassed customers personally or through salesmen of plaintiff which were
hired or recruited by him. If said customer decided to buy items from plaintiff on installment basis,
defendant, without the knowledge of said customer and plaintiff, would buy the items on cash
basis at ex-factory price, a privilege not given to customers, and thereafter required the customer
to sign promissory notes and other documents using the name and property of plaintiff, purporting
that said customer purchased the items from plaintiff on installment basis. Thereafter, defendant
collected the installment payments either personally or through Venus Lozano, a Group Sales
Manager of plaintiff but also utilized by him as secretary in his own business for collecting and
receiving of installments, purportedly for the plaintiff but in reality on his own account or business.
The collection and receipt of payments were made inside the Iligan City branch using plaintiff's
facilities, property and manpower. That accordingly plaintiff's sales decreased and reduced to a
considerable extent the profits which it would have earned. 5
In declaring itself as having jurisdiction over the subject matter of the instant controversy,
respondent court stated:
A perusal of the complaint which is for damages does not ask for any relief under the Labor Code of
the Philippines. It seeks to recover damages as redress for defendant's breach of his contractual
obligation to plaintiff who was damaged and prejudiced. The Court believes such cause of action is
within the realm of civil law, and jurisdiction over the controversy belongs to the regular courts.
While seemingly the cause of action arose from employer-employee relations, the employer's claim
for damages is grounded on the nefarious activities of defendant causing damage and prejudice to
plaintiff as alleged in paragraph 7 of the complaint. The Court believes that there was a breach of a
contractual obligation, which is intrinsically a civil dispute. The averments in the complaint
removed the controversy from the coverage of the Labor Code of the Philippines and brought it
within the purview of civil law. (Singapore Airlines, Ltd. Vs. Paño, 122 SCRA 671.) . . . 6
Petitioner's motion for reconsideration of the above Order was denied for lack of merit on October
16, 1996. Hence, this petition.
Acting on petitioner's prayer, the Second Division of this Court issued a Temporary Restraining
Order ("TRO") on March 5, 1997, enjoining respondents from further proceeding with Civil Case
No. 95-554 until further orders from the Court.
By way of assignment of errors, the petition reiterates the grounds raised in the Motion to Dismiss
dated January 30, 1996, namely, lack of jurisdiction over the subject matter of the action, res
judicata, splitting of causes of action, and forum-shopping. The determining issue, however, is the
issue of jurisdiction.
Art. 217(a), paragraph 4 of the Labor Code, which was already in effect at the time of the filing of
this case, reads:
Neither can we uphold the reasoning of respondent court that because the resolution of the issues
presented by the complaint does not entail application of the Labor Code or other labor laws. to allow respondent court to proceed with the instant action for
damages would be to open anew the factual issue of whether petitioner's installment sale scheme
resulted in business losses and the dissipation of private respondent's property. 1367 and restored Article
217 of the Labor Code almost to its original form. the jurisdiction of regular courts was upheld where the damages. 1691 (which substantially reenacted Article 217 in its
original form) nullified Presidential Decree No. moral.
including claims for damages. P. such complaint for damages is deeply rooted from the labor dispute between the parties. the damages alleged in the complaint below
are: first. Having lost the
right to appeal on grounds of untimeliness. but also damages governed by the Civil Code. and which put to rest the earlier confusion as to who
between Labor Arbiters and regular courts had jurisdiction over claims for damages as between
employers and employees. where the basis for the claim arises
from or is necessarily connected with the fact of termination. and as amended by R.
xxx xxx xxx
The above provisions are a result of the amendment by Section 9 of Republic Act ("R. having been otherwise preoccupied by his unauthorized installment
sale scheme. or was necessarily intertwined with. . respondent court's taking jurisdiction over the instant case would bring about precisely the
harm that the lawmakers sought to avoid in amending the Labor Code to restore jurisdiction over
claims for damages of this nature to the NLRC. Article 217(a) of the Labor Code. where private respondent brought up as a
defense the same allegations now embodied in his complaint. In Ebon vs. an alleged unfair labor practice committed by the
union. Eisma. and should be entered as a
counterclaim in the illegal dismissal case. This issue has been
duly raised and ruled upon in the illegal dismissal case. 875 (the "Industrial Peace Act". as when the claimant seeks
to recover a debt from a former employee 16 or seeks liquidated damages in enforcement of a prior
employment contract. as amended. 1367 and restored to the Labor Arbiter and the
NLRC their jurisdiction to award all kinds of damages in cases arising from employer-employee
relations. splitting the cause of action and possible conflicting findings and
conclusions by two tribunals on one and the same claim. The Labor Arbiter. 10 To allow otherwise would
be "to sanction split jurisdiction. . As held by this Court in National
Federation of Labor vs.
de Guzman. the decision in the labor case stands as a final judgment
on the merits. to distinguish from cases of actions for damages where the employer-employee
relationship is merely incidental and the cause of action proceeds from a different source of
obligation. which is prejudicial to the orderly administration of
Respondent court clearly having no jurisdiction over private respondent's complaint for damages.
So. malicious prosecution 15. . (Emphasis supplied). however. 6715.
Even under Republic Act No. 7 On May 1.
There is no mistaking the fact that in the case before us. and the instant action for damages cannot take the place of such lost appeal. No. 1691 nullified P. was originally lodged with the Labor Arbiters and the NLRC by Article
217 of the Labor Code.D.
It will be recalled that years prior to R.A. the
dispute is intrinsically civil. and second. 12 In other words. which is now final and executory. those amounting to lost profits and earnings due to petitioner's abandonment or neglect
of his duties as sales manager.D. private respondent's claim against
petitioner for actual damages arose from a prior employer-employee relationship. on May 1.
This is. 1 this Court discussed:
The lawmakers in divesting the Labor Arbiters and the NLRC of jurisdiction to award moral and
other forms of damages in labor cases could have assumed that the Labor Arbiters' position-paper
procedure of ascertaining the facts in dispute might not be an adequate tool for arriving at a just
and accurate assessment of damages.
which took effect on March 21.
the issue of actual damages has been settled in the labor case.") No.") No. Presidential Decree No. 127 SCRA 419:
Certainly. jurisdiction over all money claims of workers. 6715. and that the installment scheme was in fact with
the knowledge of the management of the Iligan branch of private respondent. . — (a) Except as otherwise provided
under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide. where the damages separately
claimed by the employer were allegedly incurred as a consequence of strike or picketing of the
within thirty (30) calendar days after the submission of the case by the parties for decision without
extension. however. and
that the trial procedure in the Court of First Instance would be a more effective means of
determining such damages.
we will no longer pass upon petitioner's other assignments of error. 1980. In the first place. the jurisdiction is exclusively with the (now defunct) Court of Industrial Relations. claimed for
were based on tort 14. clearly bestows upon the
Labor Arbiter original and exclusive jurisdiction over claims for damages arising from employeremployee relations — in other words. 6715." 8This limitation in jurisdiction. the following cases involving all workers. .D. jurisprudence was settled that where the plaintiff's cause of action for damages arose
out of. the lawmaking authority had second thoughts about depriving the Labor Arbiters and
the NLRC of the jurisdiction to award damages in labor cases because that setup would
mean duplicity of suits. found to the contrary — that no business losses may be
attributed to petitioner as in fact. Jurisdiction of Labor Arbiters and the Commission. as distinguished from backwages and separation pay. even after the enactment of the Labor Code. 9 we hold that by the designating clause "arising from
the employer-employee relations" Article 217 should apply with equal force to the claim of an
employer for actual damages against its dismissed employee. the
damages that may be incurred by either labor or management as a result of disputes or
controversies arising from employer-employee relations. 1979. however. and presented evidence in support
thereof. Claims for actual.Art. namely. it may help to
refer to that period from 1979 to 1980 when jurisdiction over employment-predicated actions for
damages vacillated from labor tribunals to regular courts. and the
assumption of jurisdiction of regular courts over the same is a nullity.
and should be dismissed by ordinary courts for lack of jurisdiction." 11 Thus. exemplary and other forms of damages arising from the employeremployee relations.
private respondent would not have taken issue with petitioner's "doing business of his own" had
the latter not been concurrently its employee. but in properly perfecting an appeal from the Labor Arbiter's decision. and more importantly.
Second. Presidential Decree ("P. it is obvious that private respondent's remedy is not in the filing of this separate action for
Thus. now completely superseded by the
Labor Code). No. 1367 amended
said Article 217 to the effect that "Regional Directors shall not indorse and Labor Arbiters shall not
entertain claims for moral or other forms of damages.A. 113 SCRA 52. 217. and
equally so in the interest of greater promptness in the disposition of labor matters. the present Labor Code is even more committed to the view that on policy grounds. and back to labor tribunals.
Clearly. Thus. .
lasted only briefly since on May 1. 1989.
Still on the prospect of re-opening factual issues already resolved by the labor court. those equivalent to the value of private respondent's property and
supplies which petitioner used in conducting his "business ".
. it was by reason of petitioner's installment plan that the sales of
the Iligan branch of private respondent (where petitioner was employed) reached its highest
record level to the extent that petitioner was awarded the 1989 Field Sales Achievement Award in
recognition of his exceptional sales performance. or breach of contract. the Labor Arbiter has jurisdiction to award not only the
reliefs provided by labor laws.
whether agricultural or non-agricultural:
xxx xxx xxx
4. even in the absence of stenographic notes. the
jurisdiction of Labor Arbiters and the NLRC in Article 217 is comprehensive enough to include
claims for all forms of damages "arising from the employer-employee relations"
Whereas this Court in a number of occasions had applied the jurisdictional provisions of Article 217
to claims for damages filed by employees. a court is
spared the often onerous task of determining what essentially is a factual matter. 1980. of course.
EDUARDO G.000.g.000.000. the Bank allowed Eviota
access to certain sensitive and confidential information and documents concerning the Bank’s
operations. 1 Guest Chair 2. of the
Decision1 of the Court of Appeals in CA-G.
representing costs incurred in connection with the purchase of the Honda CR-V.
4. On December 22. Eviota made off with a computer diskette and other papers and documents containing
confidential information on employee compensation and other Bank matters.636. COURT OF APPEALS.646. The various expenses incurred by the Bank in carrying out the above acts are itemized below.50. Eviota instructed the Bank’s HR
Administrator to book him a flight for Singapore.38.000..00
b. Signing Bonus P 300. 1997. (c) purchased a
desktop IBM computer for Eviota’s use. the Bank made a written demand on Eviota to return the aforementioned
computer diskette and other confidential documents and papers.00
An itemized schedule of the above expenses incurred by the Bank is hereto attached as Annex "B.
d. Eviota made arrangements with his previous employer
to reimburse the Bank for the expenses incurred in connection with the Bank’s purchase of the
Honda CR-V for his use. EVIOTA."
7.500. However.272. In particular. and may be served with
summons and other court processes at 8 Maple Street.2
Sometime on January 26. the Bank realizes that it was simply used by Eviota as a mere
leverage for his selfish efforts at negotiating better terms of employment with his previous
employer.995. With the benefit of hindsight. 1 Honda CR-V 800. Eviota assumed his position as Compensation and Benefits Manager with
the Bank and began to discharge his duties. Presiding Judge of Branch 136. Chassis No. reimburse the Bank for the
various expenses incurred on his account as a result of his resignation (with legal interest)."
12. 2-Drawer Lateral File
Cabinet 13. Eviota indicated his conformity with the Bank’s Offer of Employment by
signing a written copy of such offer dated January 22. Among others.
aborted meetings previously scheduled among Bank officers. was
so unexpected that it disrupted plans already in the pipeline (e. On January 26. the Bank promptly proceeded to carry out the terms of the Employment Contract as
well as to facilitate his integration into the workforce.
8. and (g) introduced Eviota to the local and regional staff and officers of the Bank via personal
introductions and electronic mail. Taken up during these negotiations were not only his compensation and benefit
package. The Bank informed Eviota that in addition to the Honda CR-V’s purchase
price of P848.R. 6756 Ayala Avenue. Antipolo. Eviota has resorted to falsehoods derogatory to
the reputation of the Bank. Aside from causing no small degree of chaos within the Bank by reason of his sudden
resignation.00). the development of a
salary/matrix grid and salary structure.539. The same day.
latter made the aforementioned airline booking for him.R.
On June 19.00
c. For the services of this third party. which did not
comply with the 30-day prior notice rule under the law and under the Employment Contract. In partial compliance with said demand.
vs. 60141 denying the petition for certiorari filed by
the petitioner praying the nullification of the Order of the Regional Trial Court of Makati. and the complaint in Civil Case No.
the Bank had to pay a total of P208.000.
3.00 (of which Eviota initially shouldered P48.
11. Worse. After leading the Bank to believe that he had come to stay. 1998 is hereto attached as Annex "D. but also the nature and demands of his prospective position. Cottonwoods.
1998. His resignation. On February 25.000. incidental costs in the form
of Processing Fees (P1. and pay
damages in the amount of at least P500.815. PADRD 1830WV00108) for Eviota’s use. the respondent Standard Chartered Bank and petitioner Eduardo
Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of Court. No. (b) purchased a 1998 Honda CR-V
(Motor No. Staff Loan Processing
Title Verification 375. Eviota energetically presented to senior management his projects for the
G. At one Human Resources ("HR") Committee meeting
held on March 3. Respondents. and STANDARD CHARTERED BANK. Makati City. as
a. Eviota suddenly resigned his
employment with immediate effect to re-join his previous employer..881. the respondent bank filed a complaint against the petitioner with the RTC of
Makati City. thus damaging the
Bank’s reputation and business standing in the highly competitive banking community. Petitioner. FPD/MCAR/98-155684 (P1. No pronouncement as to
costs. thus raising the latter’s expectations. Metro Manila. he has been maliciously purveying the canard that he had
hurriedly left the Bank because it had failed to provide him support.38. JOSE BAUTISTA.
SO ORDERED. inclusive of
. The respondent bank alleged inter alia in its complaint that:
1. Eviota executed a contract of employment under which the petitioner was employed by the
respondent bank as Compensation and Benefits Manager. 1998. 1998. Eviota began negotiating with the Bank on his possible employment with
the latter. On April 29. (e) released Eviota’s signing bonus in the net amount of P300.200. In addition.000. the Petition is GRANTED.012. J.
6. 1998. His untruthful remarks have
falsely depicted the Bank as a contract violator and an undesirable employer."
136. the petitioner
abruptly resigned from the respondent bank barely a month after his employment and rejoined his
former employer. A copy of
the Employment Contract between Eviota and the Bank is hereto attached as Annex "A. VP (M21).
Regional Trial Court of Makati. It is a foreign banking institution authorized to do business in the Philippines. Bankmer Bldg..00.
2. the Bank: (a) renovated and
refurbished the room which was to serve as Eviota’s office. 1998. THE HON.
A copy of the Bank’s demand letter dated March 16. the Bank received two manager’s checks in the aggregate amount of P868. 1 Officer’s Chair 31. with principal
offices at the 5th Floor. 1 Hanging Shelf 2. Defendant Eduardo Eviota ("Eviota") is a former employee of the Bank. SR. (f) booked
Eviota’s participation in a Singapore conference on Y2K project scheduled on March 10 and 11. and the processing of merit promotion recommendations). Annex "B"). such as the salary
schedule of all Corporate and Institutional Banking officers and photocopies of schedules of
benefits provided expatriates being employed by the Bank. 1998 (the "Employment Contract"). where he was scheduled to participate in a Y2K
project on March 10 and 11.53) and Fund Transfer Price
(P18. Acting on the Employment Contract and on Eviota’s uninhibited display of interest in assuming
his position. Confident of Eviota’s professed commitment to the Bank.
TOTAL P1. bringing the total cost of the Honda CR-V to P868.00
Cost of Appraisal –
Housing Loan 3. 152121
July 29. The Bank made sure that
Eviota was fully aware of all the terms and conditions of his possible job with the Bank.
10. On March 16. SP No. 1998.807. PEWED7P101101.200.881. 1998.00 for the inconvenience and work/program
disruptions suffered by the Bank. 95-554 before Branch 39
of the Regional Trial Court of Misamis Oriental is hereby DISMISSED. Office Reconfiguration 29. and
undermining its ability to recruit and retain the best personnel in the labor market. there is evidence to show that in his attempts to justify his hasty departure from
the Bank and conceal the real reason for his move.84) were incurred. IBM Desktop Computer 89.WHEREFORE.00
g. and forced the Bank to hire the
services of a third party to perform the job he was hired to do.232. (d) arranged the takeout of Eviota’s loans with Eviota’s
former employer. A copy of a receipt for the above expenses is hereto
attached as Annex "C" (See also.
Other just and equitable reliefs are likewise prayed for." p. the respondent bank claimed damages in
its complaint against the petitioner based on his employment contract. the Bank is entitled to actual damages of P360.
5. Assuming arguendo that Eviota had the right to terminate his
employment with the Bank for no reason. 6715 which took
effect on March 21. 5.
Article 217 of the Labor Code of the Philippines. the Bank
incurred expenses in carrying out its part of the contract (see Annexes "B" and "C"). and as such is
governed by the New Civil Code:
The Court holds that here. as amended.12. the amount of P1. Previously. 6 and the cost of the third-party services mentioned in par. the manner in and circumstances under which he
exercised the same are clearly abusive and contrary to the rules governing human relations. Costs of the suit. not the Regional Trial Court.
reimbursements received from Eviota. Eviota’s actions constitute a clear violation of Articles 19.000.562. 217. As a result. Eviota had induced the Bank to believe that he was
committed to fulfilling his obligations under the Employment Contract.
Third Cause of Action
16.00. Hence. holding that the
trial court and not the Labor Arbiter had exclusive jurisdiction over the action of the respondent
bank. and not on tortious acts. Although its claims for damages incidentally involved an
employer-employee relationship. the amount of P360.1.1. The petitioner filed a petition for certiorari with the Court of Appeals for the
nullification of the orders of the trial court.
Second Cause of Action
15. the present
controversy is removed from the jurisdiction of the Labor Arbiter and brings in within the purview
of the regular courts.00. (See. 2001. By his actions and representations. For violating the 30-day notice requirement under the Labor Code and order (sic) the
Employment Contract.e. plaintiff is entitled to attorney’s fees of at least
P200. but the court issued an order
denying the same. amounting to P360.processing fees and other incidental costs.000. Unfair labor practice cases. specifically and distinctly governed by the New Civil Code.
3. moral. These derogatory statements have injured
the Bank’s business standing in the banking community.5
The respondent bank appended to its complaint a copy of the petitioner’s employment contract. It held that the latter’s claims for damages were grounded on the petitioner’s sudden and
unceremonious severance of his employment with the respondent bank barely a month after
assuming office. the principal cause of action being the alleged omission of petitioner in
giving notice to the respondent Bank employer of termination of their relationship.000. As exemplary damages. the petitioner
filed his petition with this Court contending that:
Suffice to state immediately that on the basis of the allegations in the complaint. Section 13 of the
Employment Contract specifically provides that: "Your [i." (Annex "A. as amended by Rep. In addition. rates of pay. Act No. The petitioner
further asserted that contrary to the ruling of the court.000.00 signing
bonus. 98-1397. representing expenses referred to in items c to i
13.—(a) Except as otherwise provided
under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide
within thirty (30) calendar days after the submission of the case by the parties for decision without
extension. judgment be rendered in its favor as
WHEREFORE. Jurisdiction of Labor Arbiters and the Commission.
With his motion for reconsideration of the decision having been denied by the CA.12.
ratiocinating that the primary relief prayed for by the respondent bank was grounded on the
tortious manner by which the petitioner terminated his employment with the latter.
3. Eviota is liable to the Bank for damages in the amount of at least P100.00.000.
The respondent bank opposed the motion. and to deter other parties from
committing similar acts in the future.00. damages in the amount of at least P100. If accompanied with a claim for reinstatement. exemplary and other forms of damages arising from the employeremployee relations.
15. plaintiff is entitled to moral damages of at least
P2. it is the Labor
Arbiter. even in the absence of stenographic notes. as
amended (the "Civil Code"). the amount of P2.562. and
6. The petitioner averred that the
respondent bank’s claim for damages arose out of or were in connection with his employeremployee relationship with the respondent bank or some aspect or incident of such relationship. Eviota’s failure to comply with the above requirement threw a monkey wrench into the
Bank’s operations – Eviota’s sudden resignation aborted meetings previously scheduled among
Bank officers and disrupted plans for a salary/merit review program and development of a salary
structure and merit grid already in the pipeline. Under Article 285 (a) of Presidential Decree No.
On November 29.00.
whether agricultural or non-agricultural:
The petition is barren of merit.
Hence. claiming that its action for damages was within the
exclusive jurisdiction of the trial court.
17. Eviota never complied with the Bank’s demand that he reimburse the latter for the other
expenses incurred on his account. that after due proceedings. 442.000. the same are recoverable under the applicable provision of the Civil Code. alleging that the court a quo committed grave abuse of
its discretion amounting to excess or lack of jurisdiction in issuing the said orders. Termination disputes. the trial court issued an order denying the petitioner’s motion to dismiss.000.000. 386.
The petitioner filed a motion to dismiss the complaint on the ground that the action for damages of
the respondent bank was within the exclusive jurisdiction of the Labor Arbiter under paragraph 4. those cases that workers may file involving
wages. which has jurisdiction of the subject matter of the complaint
in Civil Case No. whereas the
claims for other actual/moral/exemplary damages are well within the competence of the Labor
2. as amended (the Labor Code).
The respondent bank alleged.
Article 217 of the Labor Code of the Philippines. Eviota’s false and derogatory statements that the Bank had failed to deliver what it had
purportedly promised have besmirched the Bank’s reputation and depicted it as a contract violator
and one which does not treat its employees properly. the following:
First Cause of Action
Annex "C"). As attorney’s fees.
grounded on the tortious manner by which the defendant terminated his employment with the
4. and have undermined the Bank’s ability to
recruit and retain the best personnel.00.4
The respondent bank prayed.000.000. Annex "B"). Eviota had returned his P300. the following cases involving all workers. the amount of P200.000.00
On November 15. an
employee may terminate without just cause the employer-employee relationship by serving
written notice on the employer at least one (1) month in advance. less the P48. the said claims are actually predicated on the petitioner’s acts
and omissions which are separately. By way of example or correction for the public good. Eviota’s actions have compelled plaintiff to obtain the services of undersigned counsel for a fee. since the primary relief prayed for by the plaintiff is for damages. Eviota’s] employment may be
terminated by either party giving notice of at least one month. 1989 reads:
ART. Claims for actual. As moral damages. As actual damages. 1999.000. 20 and 21 of Republic Act No. hours of work and other terms and conditions of employment. by way of its causes of action against the petitioner.00 he had advanced for the Honda CR-V’s purchase price. the CA promulgated a decision dismissing the petition..
in order to protect its interests. 8.6
The petitioner filed a motion for reconsideration of the said order.000. it is respectfully prayed that judgment be rendered ordering the defendant to pay
1.00. defendant should be held liable for exemplary damages of at
least P1.12 (see.
Petitioner does not ask for any relief under the Labor Code of the Philippines. with any business firm. Villarama. The other items demanded are not labor benefits demanded by workers generally taken
cognizance of in labor disputes. and its corporate plans and program in jeopardy and disarray. INC. the said causes of action are intrinsically civil. such as payment of wages.
We stated that the action was for breach of a contractual obligation.. Paño. No. are determined by the material allegations of the complaint and the
reliefs prayed for in relation to the law involved.
IN LIGHT OF ALL THE FOREGOING. its banking
operations and the conduct of its business. wage differential. overtime compensation or separation
pay. filed a complaint against the Perpetual Help Credit Cooperative. SISINITA VILLAR. (PHCCI). entity or undertaking engaged in a business similar to
or in competition with that of the EMPLOYER.. Only if there is such a connection with the other claims can the claim
for damages be considered as arising from employer-employee relations.
intrinsically a civil dispute. for illegal dismissal. separation pay.18
In this case. the petitioner had already been replaced by the private
respondent before the action was filed against the petitioner. to the prejudice of the private respondent. We further stated that while seemingly the cause of action arose from employeremployee relations. Such cause of action is within the realm of
The petitioner alleged in its complaint with the trial court that:
Petitioner claimed that private respondent became an employee of Angel Sound Philippines
Corporation. There is no causal relationship between
the causes of action of the private respondent’s causes of action against the petitioner and their
Actions between employees and employer where the employer-employee relationship is merely
incidental and the cause of action precedes from a different source of obligation is within the
exclusive jurisdiction of the regular court. the
petitioner took off with the private respondent’s computer diskette. respondents. as amended. Jr. depicting the private respondent as unworthy of trust. intrinsically civil
petitioner. Sisinita Vilar. petitioner PHCCI filed a motion to dismiss the complaint on the ground that there is no
employer-employee relationship between them as private respondents are all members and co-
. 1990. and the
NATIONAL LABOR RELATIONS COMMISSION. 121948
It is evident that the causes of action of the private respondent against the petitioner do not
involve the provisions of the Labor Code of the Philippines and other labor laws but the New Civil
SO ORDERED. and/or employed. The items claimed are the natural consequences flowing from breach of an obligation.17
The trial court dismissed the case for lack of jurisdiction over the subject matter because the cause
of action for damages arose out of the parties’ employer-employee relationship.
Jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article 217. Fourth Division.15 the petitioner sued its
employee Adonis Limjuco for breach of contract which reads:
That for a period of two (2) years after termination of service from EMPLOYER. The fact that the private respondent was the erstwhile employer
of the petitioner under an existing employment contract before the latter abandoned his
employment is merely incidental. Paño. the Petition is DENIED.13 we held that a complaint of an employee for damages against the
employer for slanderous remarks made against him was within the exclusive jurisdiction of the
regular courts of justice because the cause of action of the plaintiff was for damages for tortious
acts allegedly committed by the employer. the private respondent’s first cause of action for damages is anchored on the
petitioner’s employment of deceit and of making the private respondent believe that he would
fulfill his obligation under the employment contract with assiduousness and earnestness.12
The claims were the natural consequences flowing from a breach of an obligation. the employer’s claim for damages is grounded on "wanton failure and refusal"
without just cause to report to duty coupled with the averment that the employee "maliciously and
with bad faith" violated the terms and conditions of the contract to the damage of the employer. the petitioner simply walked away from his employment with the private
respondent sans any written notice. p. petitioner.
Forthwith. within two
years from January 30. EMPLOYEE shall not
in any manner be connected. Inc. a corporation engaged in the same line of business as that of petitioner.14 we held that:
Stated differently. Thus.
G. Moreover. premium pay on holidays and rest days. In fact. to be
cognizable by the Labor Arbiter. Petitioner further alleged that private respondent is holding the position of Head of the
Material Management Control Department.
In Dai-Chi Electronics Manufacturing Corporation v.
moral damages. Dumaguete
City. The private respondent was
left in a lurch. It seeks to recover
damages agreed upon in the contract as redress for private respondent’s breach of his contractual
obligation to its "damage and prejudice" (Rollo.
SANDOVAL-GUTIERREZ. J. IMELDA TAMAYO. More so when we
consider that the stipulation refers to the post-employment relations of the parties. Anent its third cause of action. we ruled that jurisdiction over the action
belongs to the civil court:
On appeal to this court. Imelda Tamayo and Harold Catipay. which is intrinsically a civil
dispute. with the Arbitration Branch. the petitioner made
false and derogatory statements that the private respondent reneged on its obligations under their
contract of employment. The Decision of the Court of Appeals
dismissing the petition of the petitioner is AFFIRMED.10 we held that
the jurisdiction of the Labor Arbiter under Article 217 of the Labor Code.Case law has it that the nature of an action and the subject matter thereof. Castro-Bartolome. v. thus.
vs. he abandoned his office and rejoined his former
employer. The fact that there was between the parties an
employer-employee relationship does not negate the jurisdiction of the trial court. We reversed the
order of the trial court and held.
BENEDICTO FABURADA. A money claim by a worker against the employer or
vice-versa is within the exclusive jurisdiction of the labor arbiter only if there is a "reasonable
causal connection" between the claim asserted and employee-employer relation. the same position he held while in the employ of
petitioner.9 In Georg Grotjahn GMBH & Co.
Such averments removed the controversy from the coverage of the Labor Code of the Philippines
and brought it within the purview of the Civil Law.
In Medina v. Cebu City.:
On January 3. and attorney's fees. as amended. the date of private respondent’s resignation from petitioner’s
employ. forcing the private respondent to hire a replacement. and for having
maliciously and with bad faith violated the terms and conditions of their agreement for a course of
conversion training at the expense of the employer. papers and documents
containing confidential information on employee compensation and other bank matters. Absent such a
link. Department of Labor and Employment (DOLE).R.
In Singapore Airlines Ltd. Isnani.
Not every controversy or money claim by an employee against the employer or vice-versa is within
the exclusive jurisdiction of the labor arbiter. the complaint will be cognizable by the regular courts of justice. In
Singapore Airlines Limited v. 2001
PERPETUAL HELP CREDIT COOPERATIVE. private
respondents. petitioner seeks protection under the civil laws and claims no benefits under the
Labor Code. thus. The
petitioner volte face when. as well as which court
has jurisdiction over the same. we held that jurisdiction over the controversy belongs to the civil courts. v. HAROLD CATIPAY. and jurisdiction over the controversy belongs to the regular courts. is limited to
disputes arising from an employer-employee relationship which can only be resolved by reference
to the Labor Code of the Philippines. be a consultant and/or be an informative body
directly or indirectly. 57). 1992. Benedicto Faburada. other labor laws or their collective bargaining agreements.11 the complaint of the employer against the employee for
damages for wanton justice and refusal without just cause to report for duty. On its
second cause of action. must have a reasonable causal connection with any of the claims
provided for in that article.1âwphi1The primary relief sought is for liquidated damages for breach of a contractual
obligation. without the requisite thirty-day notice under the contract and the
Labor Code of the Philippines.
Duties: Among others. They worked regularly on regular working
hours. Jr. thus respondent is directed to pay Complainants backwages computed from the time
they were illegally dismissed up to the actual reinstatement but subject to the three year
backwages rule. and for one Sunday each month . maintain the masterlist of the cooperative
members. otherwise known as the Cooperative Development Authority Law which took
effect on March 26. P1. were paid regular wages and made to accomplish daily time
records just like any other regular employee.00 .
prepare checks and cash vouchers for regular and emergency loans. private
respondents were rendering services necessary to the day-to-day operations of petitioner PHCCI.
Necessarily. the Labor Arbiter denied petitioner's motion to dismiss.A. thus:
Benedicto Faburada —Regular part-time Computer programmer/ operator. No particular form of proof
is required to prove the existence of an employer-employee relationship. for two (2) years.500.00 — from June to December
1988.1 the NLRC affirmed the Labor Arbiter's decision.
Article 280 of the Labor Code provides for three kinds of employees: (1) regular employees or
those who have been engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer. separation pay for one month for every year of service since reinstatement is
evidently not feasible anymore. 1990.
The issue for our resolution is whether or not respondent judge committed grave abuse of
discretion in ruling that there is an employer-employee relationship between the parties and that
private respondents were illegally dismissed. Not being regular employees.00 — from January to December 1988.m and 1:00 to 4:00 p."
On appeal. post the monthly balance of fixed and savings deposits in
preparation for the computation of interests. and assist the other clerks in their duties. to pay complainants 13th month pay.from July to December
On November 23.00 from July to December 1989.
On September 3. Saturday —
8:00 to 11:30 a. disburse
checks during regular and emergency loans. Sisinita Vilar. 1990.
The computation of the foregoing awards is hereto attached and forms an integral part of this
decision. mortuary and patronage funds.Duties: Among others. Worked with the Cooperative since March 3 to December 29. the following elements are
considered: (1 ) the selection and engagement of the worker or the power to hire.00 — from January 1. and P1. 1988. and 1:00 to 4:00 p.000.m. complainant
Benedicto Faburada shall only be awarded what are due him in proportion to the nine and a half
months that he had served the respondent. prepare
cash vouchers. Worked with the
Cooperative since June 1. except Harold D.m and 2:00 to 5:30 p. the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the duration of the season.m. — Enter data into the computer. Any competent and
relevant evidence may show the relationship.
does not mean that he is not a regular employee. carefully considered by respondent NLRC in affirming the
Labor Arbiter's decision. Duties:
Among others. (2) project employees or those whose employment has
been fixed for a specific project or undertaking.m. All other claims are
hereby dismissed for lack of merit. P950 — from January to June 1989. Monthly salary: P500.8:00 to 11:30 a. schedule loans. daily summary of disbursements to respective classifications. and (3)
casual employees or those who are neither regular nor project employees.4 Undeniably. junior depositors and
special accounts. reconcile passbooks and ledgers of members
in the market.m. he being a part-time employee. hired private respondents to work for it. post daily
collections from the two (2) collectors in the market.
That an employer-employee exists between the parties is shown by the averments of private
respondents in their respective affidavits. and perform such other duties as may be
assigned from time to time..m.
This fact alone qualified them as regular employees. 1989.. premises considered.
Manager. like this one. whether such service is continuous
or broken. dividends. Monthly salary: P900. and perform such other bookkeeping
and accounting duties as may be assigned her from time to time. they cannot sue petitioner. and perform such other bookkeeping and accounting
duties as may be assigned to her from time to time.00 — from October to November 1987.150.owners of the cooperative.
All of them. effective December 29. private respondents have not exhausted the remedies
provided in the cooperative by-laws. Furthermore. That Benedicto Faburada worked only on a part-time basis. P1. judgment is hereby rendered declaring complainants illegally
dismissed.00 from July to December 1989. Tamayo. and every Saturday from 8:00 to 11:30 a. Worked with the Cooperative since December 1.m.m.
from 1:00 p. holding that the case is
impressed with employer-employee relationship and that the law on cooperatives is subservient to
the Labor Code. Catipay — Clerk. Work schedule: — Monday to Friday — 8:00 to 11:30 a.
for two (2) years and two (2) months.000. petitioner filed a supplemental motion to dismiss alleging that Article 121
of R. to 5:30 p. take charge of loan releases every Monday morning. 1987 up to December 29.
In determining the existence of an employer-employee relationship. such as.m.
journal vouchers. No. they were dismissed.00 — from December 1. Tamayo — Clerk. worked with petitioner for more than one (1) year: Benedicto
The above elements are present here. and (b) those casual
employees who have rendered at least one (1 ) year of service.3 The employees who
are deemed regular are: (a) those who have been engaged to perform activities which are usually
necessary or desirable in the usual trade or business of the employer.
We are not prepared to disregard the findings of both the Labor Arbiter and respondent NLRC. 1988 up to December 29. (3) the payment of wages by whatever means. 1989 to June 30.m.from January to June 1989. for one and a half (1 1/2) years. Bookkeeping. perform various forms for mimeographing. and
for at least three (3) hours during Sundays. check petty cash vouchers.for at least
three (3) hours. (2) the power to
dismiss.Work schedule: Regular working hours. requires conciliation or mediation within the cooperative before a resort
to judicial proceeding. pick up balances for the
computation of interests on savings deposit. Catipay. and Imelda C. 1990.050. with respect to the activity in which they are employed. and (4) the power to control the worker's
conduct.000. 1989 to December 31. through Mr. effect
mortuary deductions and dividends on fixed deposits. wage differentials and Ten
Percent (10%) attorney's fees from the aggregate monetary award. the dispositive portion of which
WHEREFORE.m. mortuary. accounting and collecting duties. and 2:00 to 5:30 p.350. P1.
1989.00 for December
1987.00 — from March to June 1989. receive deposits from members. 1993.
Harold D. the Labor Arbiter rendered a decision. Edilberto Lantaca.
1989.00 — from
July 1. with the latter assuming primacy in the overall consideration. and P1.
On the same date. P500. 1989. reconcile bank statements to
the daily summary of disbursements. were assigned specific duties. this leads us to the issue of whether or not private respondents are regular employees. One's regularity of employment is not
determined by the number of hours one works but by the nature and by the length of time one has
. They worked under the supervision of the
cooperative manager. 1987 to
All of them were given a memorandum of termination on January 2. Petitioner PHCCI. 1989. dividends and patronage funds. that quantum of evidence required in quasi judicial
proceedings. Work schedule: Tuesdays and Thursdays. every
Saturday — 8:00 to 11:30 a. Duties: Among others. P250. But unfortunately. Prepare summary of salary advances. fill up members logbook of regular depositors. 1987 up to December
29. take charge of the preparation of new passbooks and
ledgers for new applicants. assist in the posting and
preparation of deposit slips. Monthly salary: P1. Worked with the Cooperative since October 19. 6939.
Sisinita Vilar — Clerk. Work schedule: Monday to Friday . this petition by the PHCCI.
Petitioner PHCCI contends that private respondents are its members and are working for it as
volunteers. Monthly salary: P60.. and 1:00 to 4:00 p. compute interests on savings deposits. and one Sunday each month — for at least three (3)
hours. However. and
same being supported by substantial evidence.00 .
plus other benefits or their monetary equivalent computed from the time their compensation was
withheld from them up to the time of their actual reinstatement.1âwphi1. Petitioner thus vehemently insists that their dismissal is not against the law. petitioner.
petitioner was promoted as District Pastor of the Negros Mission of the SDA and was assigned at
. officers.A. Ministry of Labor and Employment (173 SCRA 697. et al. not regular employees.
computed from the time they were illegally dismissed up to the time of the finality of this
Decision. They were dismissed because
petitioner considered them to be mere voluntary workers. The decision of respondent NLRC is AFFIRMED.2 He began his work with the SDA on 15 July 1963 as a literature
evangelist. private respondents are entitled to security of tenure. (2) redundancy. In July. (3) fraud or willful breach of trust.9 Since they were dismissed after
March 21. MR..D. not whether or not the members can be
employees. and intra-cooperative disputes shall.A. entitled "Pastor Dionisio V. and committee
members. in NLRC Case No. the dispute is about payment of wages.5 Petitioner's contention that private respondents are mere volunteer
PHILIPPINE UNION MISSION CORPORATION OF THE SEVENTH-DAY ADVENTISTS.
As aptly stated by the Solicitor General in his comment. J. in 1989. DAVID
Procedural due process requires that the employer serve the employees to be dismissed two (2)
written notices before the termination of their employment is effected: (a) the first. OSCAR L.
vs. ELISEO DOBLE.
Petitioner. meaning. must necessarily fail. That if no
mediation or conciliation succeeds within three (3) months from request thereof. and the
provinces of Romblon and Guimaras. (3) retrenchment to prevent losses. The authorized causes are: (1) the installation of labor-saving
KAPUNAN. (4) commission of a
crime or an offense against the person of the employer or his immediate family member or
representative. the matter shall be settled in a court of
competent jurisdiction. the Cooperative Development Authority did not issue a
Certificate of Non-Resolution pursuant to Section 8 of R. Finally.13
SO ORDERED. petitioner failed to comply with the twin requisites of a valid
notice. MRS. ALOLOR. rest day and termination of
employment. be settled amicably in
accordance with the conciliation or mediation mechanisms embodied in the by-laws of the
cooperative. petitioner worked
his way up the ladder and got promoted several times. P. overtime pay. directors.nêt
Private Respondent Central Philippine Union Mission Corporation of the Seventh-Day Adventists
(hereinafter referred to as the "SDA") is a religious corporation duly organized and existing under
Philippine law and is represented in this case by the other private respondents. a certificate of
non-resolution shall be issued by the Commission prior to the filing of appropriate action before
the proper courts. private respondents are therefore entitled to reinstatement
without loss of seniority rights and other privileges and to full backwages. 6938 (Cooperative Code of the Philippines) provides the procedure
how cooperative disputes are to be resolved. PASTORS REUBEN MORALDE. In January. WILLIAM U. analogous cases. NATIONAL LABOR RELATIONS COMMISSION (Fourth Division). Obviously. 7 In this case. ELEUTERIO LOBITANA.11 If reinstatement is no longer feasible. LORETO MAYPA. 1989. and as such work at
its pleasure. and (4) closing or cessation of
operations of the establishment or undertaking.R." which dismissed the case for illegal
dismissal filed by the petitioner against private respondents for lack of jurisdiction. No. (2) gross or habitual neglect of duties.
There is no evidence that private respondents are members of petitioner PHCCI and even if they
are. — Upon request of either or both parties. 121.
MR.been in that particular job. with
modification in the sense that the backwages due private respondents shall be paid in full. 1999
PASTOR DIONISIO V. 6715 10 they are granted full backwages. he was elevated
to the position of Pastor in the West Visayan Mission covering the island of Panay. 1972. It was in the form of a Memorandum
signed by the Manager of the Cooperative dated January 2. as far as practicable. DONATO. Austria vs. to apprise
them of the particular acts or omissions for which their dismissal is sought and (b) the second. and in applicable laws. rendered on 23 January
1996. Under Art. Austria worked with the SDA for twenty eight
(28) years from 1963 to 1991. Settlement of Disputes. GAYARES. MR. 6939 or the Cooperative Development
Authority Law. PORFIRIO BALACY. payment of their separation pay in lieu of
reinstatement is in order. 8 Mediation and Conciliation. with observance of due process. 175 (strengthening the Cooperative Movement) 8 and its implementing rules
and regulations under LOI 23. selling literature of the SDA over the island of Negros.12
LOI has no relevance to the instant case. petitioner became the
Assistant Publishing Director in the West Visayan Mission of the SDA. on the other hand. these disputes are within the original and exclusive
jurisdiction of the Labor Arbiter.
Article 121 of Republic Act No. their
services may be terminated only for a valid cause.
Should such a conciliation/mediation proceeding fail.
The above provisions apply to members. officers of the SDA. 124382
August 16. V-0120-93."
Complementing this Article is Section8 of R. 1989.:
Subject of the instant petition for certiorari under Rule 65 of the Rules of Court is the Resolution 1 of
public respondent National Labor Relations Commission (the "NLRC"). Central Philippine Union
Mission Corporation of Seventh Day Adventists. being its members. Clearly.
The records show that petitioner Pastor Dionisio V. the Authority shall
mediate and conciliate disputes within a cooperative or between cooperatives: Provided. Its invocation of San Jose City Electric
Cooperative vs. Thus. unless the closing is for the purpose of
circumventing the provisions of law. RUFO GASAPO. and. CEBU CITY.D. 217 of the Labor Code. Likewise. Article 284 provides that an employer would be authorized to
terminate the services of an employee found to be suffering from any disease if the employee's
continued employment is prohibited by law or is prejudicial to his health or to the health of his
Private respondents were dismissed not for any of the above causes. The
issue in this case is whether or not the employees-members of a cooperative can organize
themselves for purposes of collective bargaining. officers and directors of the cooperative involved in
disputes within a cooperative or between cooperatives. The just causes are:
(1) serious misconduct or willful disobedience of lawful orders in connection with the employee's
work. Petitioner missed the point
As regular employees or workers. ISACHAR GARSULA. No.
G. 6939 (Cooperative Development Authority Law)
Petitioner contends that the labor arbiter has no jurisdiction to take cognizance of the complaint of
private respondents considering that they failed to submit their dispute to the grievance machinery
as required by P.A. LOI 23 refers to instructions to the
Secretary of Public Works and Communications to implement immediately the recommendation of
the Postmaster General for the dismissal of some employees of the Bureau of Post. 1990 terminating their services
effective December 29.
HON. Petitioner held the same position up to 1988. AUSTRIA. From then on. when his services
were terminated. as when the relationship between
petitioner and private respondents has become strained. 175 does not provide for a grievance
machinery where a dispute or claim may first be submitted. the petition is hereby DENIED. to
inform them of the decision of the employer that they are being dismissed. 703 (1989) is misplaced.
without deducting from their backwages the earnings derived by them elsewhere during the period
of their illegal dismissal. GIDEON BUHAT. was a Pastor of the SDA until 31 October 1991. ELDER HECTOR
V. TESSIE BALACY. and MR. respondents.
As illegally dismissed employees. inclusive of allowances. the effectivity date of R.
The valid causes are categorized into two groups: the just causes under Articles 282 of the Labor
Code and the authorized causes under Articles 283 and 284 of the same Code.
We hold that private respondents have been illegally dismissed. ZOSIMO KARA-AN.
ELY SACAY. only one
notice was served upon private respondents by petitioner. JOEL WALES. 1968. — Disputes among members. EUFRONIO IBESATE.
The dispositive portion of the NLRC resolution dated 23 January 1996.
Petitioner then left the office of Pastor Buhat. the two exchanged heated arguments. dated 26 August 1994.00
F. Service Incentive
Leave Pay — P 3. 1994 is VACATED and the
decision of the Labor Arbiter dated February 15.
Mrs. The dispositive portion of the resolution
WHEREFORE. petitioner overheard Pastor
Buhat saying. Eufronio Ibesate who authorized his wife to collect the tithes and offerings since he
was very sick to do the collecting at that time. the Court ordered the Office of the Solicitor General (the "OSG") to
file its comment on behalf of public respondent NLRC. Pastor David Rodrigo.
The NLRC. 1993 is REINSTATED. Negros Occidental. Thereafter.
Reacting against the adverse decision of the SDA." 6 Irked by such remark. the fact-finding committee conducted an
investigation of petitioner. at nine in the
morning. Taculing. subject of the present
petition. the case was submitted for
In January. petitioner received several
communications3 from Mr. Balintawak and Toboso.4 petitioner reasoned out that he should not be
made accountable for the unremitted collections since it was private respondents Pastor Gideon
Buhat and Mr. 13th month pay — P 21. PREMISES CONSIDERED. are hereby ordered to immediately reinstate complainant Pastor Dionisio Austria to his
former position as Pastor of Brgy. petitioner banged the attaché case of Pastor Buhat
on the table. without ruling on the merits of the case. sustained the
argument posed by private respondents and. and to remit the same to the
Negros Mission. and threw the phone. the recourse to this Court by petitioner. involves the separation of church and state. Progreso and Banago.
On 15 February 1993.
petitioner immediately wrote Pastor Rueben Moralde. Attorney's Fee — P 22. "Pastor daw inisog na ina iya (Pador you are talking tough).
The issues to be resolved in this petition are:
1) Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide the complaint filed by
petitioner against the SDA. The decretal portion of the NLRC decision states:
WHEREFORE. Cebu City. petitioner filed a complaint11 on 14 November
1991. at around 7:30 a. on 16 October 1991.
Respondent CPUMCSDA is further ordered to pay complainant the following:
A.830. Bacolod City. the
NLRC vacated the findings of the Labor Arbiter.
misconduct. Thelma Austria. the Decision appealed from is hereby VACATED and a new one ENTERED dismissing
this case for want of merit.
On 17 October 1991. Notable in the motion for reconsideration filed by private
respondents is their invocation. since it was heavy..14
In view of the reversal of the original decision of the NLRC. dismissed the complaint of petitioner. scattered the books in his office. as grounds for the termination of his services. private
respondents Pastors Yonilo Leopoldo and Claudio Montaño were around and they pacified both
Pastor Buhat and petitioner. to collect from
Pastor Rodrigo the unpaid balance for the repair of the latter's motor vehicle which he failed to pay
to Diamada. petitioner went to the office of Pastor Buhat.5 Due to the assistance of petitioner in collecting Pastor Rodrigo's debt. the
NLRC issued a Resolution reversing its original decision.12
The SDA. the latter
harbored ill-feelings against petitioner. on 29 October 1991. Sensing that the result of the investigation might be one-sided. the treasurer of the Negros Mission asking him to
admit accountability and responsibility for the church tithes and offerings collected by his wife.
petitioner returned to the office of Pastor Buhat.
SO ORDERED.078. Exemplary
Damages — P 25.15
Hence. In its manifestation.
Thereafter. Fourth Division.
SO ORDERED. before the Labor Arbiter for illegal dismissal against the SDA and its officers and prayed for
reinstatement with backwages and benefits. Moral Damages — P 50. He held the position of district pastor
until his services were terminated on 31 October 1991.
namely: Pastor Buhat and Pastor Rodrigo.00
E. and. For two (2) days. requesting that certain members of the fact-finding committee be
excluded in the investigation and resolution of the case. Thereafter. for the first time on appeal.
In his written explanation dated 11 October 1991. and
3) Whether or not such termination is valid. Our decision dated August 26. Danny Diamada. the OSG submits that the termination of petitioner from his
employment may be questioned before the NLRC as the same is secular in nature. petitioner tried to persuade Pastor Buhat to
convene the Executive Committee for the purpose of settling the dispute between him and the
private respondent. he immediately proceeded to the
office of Pastor Buhat on the date abovementioned and asked the latter to convene the Executive
unsuccessfully. and tried to overturn the latter's table.
2) Whether or not the termination of the services of petitioner is an ecclesiastical affair. Labor Arbiter Cesar D. To be discussed in the meeting were the non-remittance of church collection and the
events that transpired on 16 October 1991. Eufronio Ibesate. petitioner received a
letter of dismissal10 citing misappropriation of denominational funds. Allowance — P 4. moral and exemplary damages and other labor law
Petitioner filed a motion for reconsideration of the above-named decision. On 18 July 1995. without loss of
seniority and other rights and backwages in the amount of ONE HUNDRED FIFTEEN THOUSAND
EIGHT HUNDRED THIRTY PESOS (P115. the SDA filed a motion for
reconsideration of the above resolution. Pastor Buhat denied the request of petitioner since some committee members were
out of town and there was no quorum. from October 21 and 22.060. the OSG filed a manifestation
and motion in lieu of comment16 setting forth its stand that it cannot sustain the resolution of the
NLRC. and commission of an offense against the person
of employer's duly authorized representative.
SO ORDERED. Interestingly.
the president of the Negros Mission.
After the filing of the petition.000. gross and habitual neglect of duties. in view of all the foregoing. only two (2) were actually excluded. with twelve (12) churches under his jurisdiction. petitioner received a letter 8 inviting him and his wife to attend the Executive
Committee meeting at the Negros Mission Conference Room on 21 October 1991. respondents
herein. A fact-finding committee was created to investigate
such. 1991.Sagay. Sideño rendered a decision in favor of petitioner. In a decision. reversed itself once again. petitioner was transferred to Bacolod City.9 Out of the six (6) members requested to
inhibit themselves from the investigation and decision-making. After the submission of memoranda of all the parties.00) without deductions and qualificatioons. During said call.
On various occasions from August up to October. the instant motion for reconsideration is hereby granted. that the Labor Arbiter has no
jurisdiction over the complaint filed by petitioner due to the constitutional provision on the
separation of church and state since the case allegedly involved an ecclesiastical affair to which the
State cannot interfere. respondents CENTRAL PHILIPPINE UNION MISSION
CORPORATION OF THE SEVENTH-DAY ADVENTISTS (CPUMCSDA) and its officers. Subsequently.461. The dispute between Pastor Rodrigo and petitioner
arose from an incident in which petitioner assisted his friend. When news reached petitioner that Pastor Rodrigo was
about to file a complaint against him with the Negros Mission.m. 1991. the
dispositive portion of which reads thus:
WHEREFORE.000. in his district which amounted to P15. premises considered. accordingly.10. this case is hereby DISMISSED for lack of jurisdiction. president of the SDA and chairman of the
fact-finding committee. 7 Fortunately. through its officers. not
ecclesiastical. While on his way out. appealed the decision of the Labor Arbiter to the National Labor
Labor Relations Commission. is as follows:
WHEREFORE. willful breach of trust.770.
"17 The idea advocated by this principle is to delineate
the boundaries between the two institutions and thus avoid encroachments by one against the
other because of a misunderstanding of the limits of their respective exclusive jurisdictions. or the adoption and enforcement within a religious association of
needful laws and regulations for the government of the membership.
The rationale of the principle of the separation of church and state is summed up in the familiar
saying. From all of these it
is clear that when the SDA terminated the services of petitioner. 32 This decision. and. if he so desires. i. Mr. 29 Without the concurrence of this twin
We turn now to the crux of the matter. While the matter at hand relates to the church and its religious
minister it does not ipso facto give the case a religious significance.
The first notice. This is made more evident by the fact that the Rules
Implementing the Labor Code.
gross and habitual neglect of duties and commission of an offense against the person of his
employer's duly authorized representative. in its coverage.
Finally. A review of such findings is justified. — This Rule shall apply to all establishments and undertakings. since they are related. It is purely
secular and has no relation whatsoever with the practice of faith. the SDA cannot hide behind the mantle of protection of the doctrine of
separation of church and state to avoid its responsibilities as an employer under the Labor Code.
that petitioner has been its employee for twenty-eight (28) years.
Sec. whether for profit or not. the settled rule is that the burden of
proving that the termination was for a valid or authorized cause rests on the employer. 26 When the findings of
NLRC do not agree with those of the Labor Arbiter.e.The first two issues shall be resolved jointly. grounds
have been established to justify his termination. Indeed.35
. including educational. 28 Thus. charitable and religious institutions and
organizations. Rule XXIII. the
Labor Arbiter and the NLRC have no jurisdiction to entertain the complaint filed by petitioner.
is tantamount to an invocation of that jurisdiction and a willingness to abide by the resolution of
the case and will bar said party from later on impugning the court or body's jurisdiction. religious doctrines. this Court must of necessity review the records
to determine which findings should be preferred as more comfortable to the evidentiary facts. through the Labor Arbiter and the NLRC. 1. petitioner was not ex-communicated or expelled from the membership of the
SDA but was terminated from employment. we shall now proceed to determine whether the dismissal
of petitioner was valid.
The issue being the legality of petitioner's dismissal. in cases of regular employment with the exception of the Government and its
political subdivisions including government-owned or controlled corporations. 18 The
demarcation line calls on the entities to "render therefore unto Ceasar the things that are Ceasar's
and unto God the things that are God's. Coupled with this is the
act of the SDA in furnishing NLRC with a copy of petitioner's letter of termination.
however. such as the SDA.
Private respondents contend that by virtue of the doctrine of separation of church and state. 25 Thus. categorically includes religious institutions in the coverage of the law. is different from the ecclesiastical act of expelling a member from the
religious congregation. worship and governance of the congregation. the
active participation of private respondents in the proceedings before the Labor Arbiter and the
NLRC mooted the question on jurisdiction. and the power of excluding
from such associations those deemed unworthy of membership.34 Non-compliance therewith is fatal because these requirements are conditions sine
quanon before dismissal may be validly effected. he
must be given an opportunity to be heard and to defend himself. findings of fact of administrative bodies like the NLRC
are binding upon this Court. Ibesate. the same must be measured against the
requisites for a valid dismissal. serious misconduct. serves to apprise the employee of
the particular acts or omissions for which his dismissal is sought. or
form of worship of the church. (b) a written notice of termination
served on the employee indicating that upon due consideration of all the circumstances. 31 The second notice on the other
hand seeks to inform the employee of the employer's decision to dismiss him.
The contention of private respondents deserves scant consideration. As such. it is to be considered a
purely ecclesiastical affair to which the State has no right to interfere. Article 278 of the Labor
Code on post-employment states that "the provisions of this Title shall apply to all establishments
or undertakings. is comprehensive
enough to include religious corporations. 21 Based on this definition. "Strong fences make good-neighbors. this again is an eloquent admission by private respondents that NLRC has jurisdiction
over the case. Rule 1. The case at bar does not even remotely concern any
of the abovecited examples. Coverage. must come only after the employee is given a reasonable period from receipt of the first
notice within which to answer the charge and ample opportunity to be heard and defend himself
with the assistance of a representative. ordinations of religious ministers. and. which may be considered as the proper charge. the cited article does not make any
exception in favor of a religious corporation. the provision which governs the dismissal of employees.
examples of this so-called ecclesiastical affairs to which the State cannot meddle are proceedings
for excommunication. The Court has already ruled
that the active participation of a party against whom the action war brought. it is palpable that the
reason for petitioner's dismissal from the service is not religious in nature. In this case. rightfully exercised its management prerogative to
dismiss an employee. administration of sacraments and other
activities with attached religious significance. to wit: (a) a written notice served
on the employee specifying the ground or grounds for termination. creed. the matter of terminating an employee. It is already too late in the day for private
respondents to question the jurisdiction of the NLRC and the Labor Arbiter since the SDA had fully
participated in the trials and hearings of the case from start to finish. namely: (a) the employee must be afforded due process. we note that as a general rule. Section 1.
namely: misappropriation of denominational funds. SDA even registered petitioner
with the Social Security System (SSS) as its employee. whether operated
for profit or not.
private respondents must not merely rely on the weaknesses of petitioner's evidence but must
stand on the merits of their own defense. has the right to take cognizance of the case and to
determine whether the SDA. are all based on Article 282 of the Labor Code which
enumerates the just causes for termination of employment.
The jurisdictional question now settled. the Church is likewise barred from meddling in purely secular matters. as employer. willful breach of trust. An ecclesiastical affair is "one that concerns doctrine. and giving to said employee
reasonable opportunity within which to explain his side. worship or doctrines of the
church. particularly. 30
Before the services of an employee can be validly terminated." Obviously. Article 277 (b) of the Labor Code and
Under the Labor Code. Aside from these.. Since
the matter at bar allegedly involves the discipline of a religious minister. what is involved
here is the relationship of the church as an employer and the minister as an employee."19 While the state is prohibited from interfering in purely
ecclesiastical affairs. the termination would. The principle of separation of
church and state finds no application in this case. the grounds invoked for petitioner's dismissal.
At the outset. be illegal. as in this case. which
is purely secular in nature. SDA admitted in a certification 23 issued by its officer. Book VI on the Termination of
Employment and Retirement. To be concrete. the worker's records of
petitioner have been submitted by private respondents as part of their exhibits. Book V of the Rules Implementing the Labor Code further require the
employer to furnish the employee with two (2) written notices. in the eyes of the law. private respondents are estopped from raising the
issue of lack of jurisdiction for the first time on appeal. as correctly pointed out by petitioner.
As pointed out by the OSG in its memorandum. Simply stated. the
State. As aptly stated
by the OSG.22 By this alone. medical. in instances when the
findings of the NLRC differ from those of the labor arbiter. In termination cases. (b) the dismissal must be for
a valid cause as provided in Article 282 of the Labor Code. This is in consonance with the mandate of the Constitution to afford full
protection to labor. As a matter of fact. it was merely exercising its
management prerogative to fire an employee which it believes to be unfit for the job. coupled with his
failure to object to the jurisdiction of the court or quasi-judicial body where the action is pending.33 This is in consonance with the express
provision of the law on the protection to labor and the broader dictates of procedural due
ecclesiastical affair involves the relationship between the church and its members and relate to
matters of faith.24
With this clear mandate. 20
The case at bar does not concern an ecclesiastical or purely religious affair as to bar the State from
taking cognizance of the same. however.
throwing the telephone and scattering the books in the office of Pastor Buhat. Naomi Geniebla. is REINSTATED and hereby
AFFIRMED. On the other hand. we sustain the finding of the Labor Arbiter that petitioner was terminated
from service without just or lawful cause. they were notable to establish that petitioner failed to remit the same
to the Negros Mission. cannot be considered as grave enough to be considered as serious misconduct. otherwise the employee would eternally
remain at the mercy of the employer. Breach
of trust and misappropriation of denominational funds refer to the alleged failure of petitioner to
remit to the treasurer of the Negros Mission tithes.42
Though private respondents were able to establish that petitioner collected and received tithes
and donations several times. Ibesate. The Court does not find any cogent reason. 2009
. Suffice it to say that all private
respondents had were allegations but not proof. Aside from merely citing the said ground.43 For misconduct to be considered
serious it must be of such grave and aggravated character and not merely trivial or
although improper. willful breach of trust. petitioner is entitled to
reinstatement to his former position without loss of seniority right 48 and the payment of full
backwages without any deduction corresponding to the period from his illegal dismissal up to
actual reinstatement. revealed how
petitioner travelled to different churches to attend to the faithful under his care. as correctly observed by the Labor Arbiter.
thoughtlessly. The challenged Resolution of public
respondent National Labor Relations Commission. Mrs.40 This ground has
never been intended to afford an occasion for abuse. in the churches under his
jurisdiction. there is no
basis for the allegation that petitioner's act constituted serious misconduct or that the same was an
offense against the person of the employer's duly authorized representative. cannot be construed as the written charge required by law. to digress from the findings of the
Labor Arbiter which is fully supported by the evidence on record. serious misconduct.37 dated 29 October 1991.36 dated 17 October 1991. It is the transgression of some
established and definite rule of action. In fact. we believe that the act of petitioner in banging the attaché
case on the table. The testimony of these church treasurers were
corroborated and confirmed by Ms. Petitioner's rise from the ranks disclose that he was actually a hard-worker. 160236
October 16. The records
show that there were only six (6) instances when petitioner personally collected and received from
the church treasurers the tithes. the petition for certiorari is GRANTED. the evidence on record
shows otherwise. and that he pocketed the amount and used it for his personal purpose. collections. do not warrant petitioner's dismissal from the service.078. the notice of termination. First of all.
and implies wrongful intent and not mere error in judgment. it cannot be said that
petitioner was given enough opportunity to properly prepare for his defense.45 Where a penalty less punitive would suffice. they still have separate and distinct personalities. does not require an exhaustive discussion. private respondents try to pin on
petitioner the alleged non-remittance of the tithes collected by his wife. therefore. because of its subjective nature. willful in character.38 It must rest on substantial grounds and not on the
employer's arbitrariness. between
petitioner and his wife. In fact.10. Having been illegally dismissed.
In a vain attempt to support their claim of breach of trust. While
the Constitution does condone wrongdoing by the employee. and. As such. A breach is willful if it is done intentionally. The letter merely mentioned that
petitioner and his wife were invited to a meeting wherein what would be discussed were the
alleged unremitted church tithes and the events that transpired on 16 October 1991. he was rewarded with a dismissal from the service for a
non-existent cause. petitioner cannot be made accountable for the alleged infraction
committed by his wife.39 It should be genuine and not simulated. Thus. With regard to the
first notice. a forbidden act.R. in return. whims. but. collections and offerings amounting to
P15. heedlessly or inadvertently.
petitioner was surprised to find out that the alleged meeting turned out to be an investigation. gross and habitual neglect of duties. which private respondents failed to demonstrate. private respondents enumerated the
following as grounds for the dismissal of petitioner. The Decision of the Labor Arbiter. in the
absence of conspiracy and collusion. the Negros Mission Church Auditor and a witness for
private respondents. namely: misappropriation of denominational
Thelma Austria who actually collected the tithes and donations from them.
WHEREFORE. to remit the tithes and offerings amounting to P15. show that Pastor Austria was able to remit all his collections to the treasurer
of the Negros Mission. In fact. Settled is the rule that under Article 282 (c)
of the Labor Code.
Private respondents' evidence. In
fact. This argument deserves
little consideration. as proven by convincing and substantial evidence consisting of the
testimonies of the witnesses for private respondents who are church treasurers.
In view of the foregoing.
We cannot sustain the validity of dismissal based on the ground of breach of trust. A
perusal of the said letter reveals that it never categorically stated the particular acts or omissions
on which petitioner's impending termination was grounded.41 The stenographic
notes on the testimony of Naomi Geniebla. it nevertheless urges a moderation of
the sanctions that may be applied to him in light of the many disadvantages that weigh heavily on
him like an albatross on his neck. caprices or suspicion. this does
not cure the initial defect of lack of the proper written charge required by law. petitioner remitted the amounts which he
collected to the Negros Mission for which corresponding receipts were issued to him.
private respondents complied with the second requirement. officers of the SDA. without justifiable excuse. After all.
In the letter of termination. Hence. and
commission of an offense against the person of employer's duly authorized representative. and donations for the church. which notified petitioner and his wife to attend
the meeting on 21 October 1991. Thus. he
labored hard for the SDA.078. the alleged offense committed upon the person of the employer's
representatives was never really established or proven by private respondents. serious misconduct and commission of an offense against the
person of the employer's duly authorized representative pertain to the 16 October 1991 incident
wherein petitioner allegedly committed an act of violence in the office of Pastor Gideon Buhat. it cannot be presumed that petitioner was actually on the verge of
dismissal. The alleged grounds for the dismissal of petitioner from the service were only revealed
to him when the actual letter of dismissal was finally issued. Thelma Austria. the letter.10 which were collected by his wife. For this reason.
Misconduct has been defined as improper or wrong conduct. Private
respondents allege that they have lost their confidence in petitioner for his failure. Geniebla and Mr.
knowingly and purposely. While admittedly.
G. For this reason. as admitted by their own witness. Indeed. gross and habitual
neglect of duties. the letter never even
mentioned that petitioner would be subject to investigation. dated 15 February 1993. the breach of trust must be willful. private
respondents failed to prove culpability on the part of petitioner. No. he did not physically assault Pastor Buhat or any other pastor present during the incident
of 16 October 1991.
the Labor Arbiter found it difficult to see the basis for the alleged loss of confidence and breach of
trust. a dereliction of duty.47 which consisted of petitioner's Worker's Reports. the cited
actuation of petitioner does not justify the ultimate penalty of dismissal from employment. it was Mrs.
With respect to the grounds of serious misconduct and commission of an offense against the
person of the employer's duly authorized representative. which were collected in his
district. who failed to remit
the same to the treasurer of the Negros Mission. rendered on 23 January 1996. A careful study of the voluminous records of the case reveals that there is simply no basis
for the alleged loss of confidence and breach of trust. we believe that the minor infraction
committed by petitioner does not merit the ultimate penalty of dismissal. the
allegations of private respondents that petitioner breached their trust have no leg to stand on. we find the same unmeritorious and. as distinguished from an act done carelessly.nêt
SO ORDERED. despite
demands. though petitioner committed damage to
From the tenor of the letter.44 Based on this standard. as
such.1âwphi1. is NULLIFIED and
SET ASIDE.46 For the foregoing reasons.
The final ground alleged by private respondents in terminating petitioner. whatever missteps
may have been committed by the worker ought not be visited with a consequence so severe such
as dismissal from employment.Private respondent failed to substantially comply with the above requirements. The
final ground invoked by private respondents is gross and habitual neglect of duties allegedly
committed by petitioner.
or on August 23. now also an
Associate Justice of this Court.R. 1996 and October 7. GHI immediately took physical possession of the mine site and its
MMC was incorporated by the Development Bank of the Philippines (DBP) and the Philippine
National Bank (PNB) on October 19. the amount of PESOS ONE HUNDRED FOURTEEN MILLION. the respondent acting sheriffs.R. Later. a copy of which Certificate of Sale is hereto
attached as Annex "B" and made an integral part hereof.
hereby promises to pay "G" HOLDINGS. October 2. Manila. Interest shall accrue on the amount of this
Note at a rate per annum equal to the interest of 90-day Treasury Bills prevailing on the Friday
preceding the maturity date of every calendar quarter. at its office at Phimco Compound. Bacolod City.14Much later. 1997 Order in OS-AJ-10-96-014
NATIONAL MINES AND ALLIED WORKERS UNION Local 103 (NAMAWU). 2002) 24 enjoining the DOLE sheriffs from further enforcing the
Sto. Makati. 2000. INC. 10
Almost four years thereafter.
NACHURA.Php114.560. The notes. 2001. 2283 Pasong Tamo Extension. and directed the execution of a new collective bargaining agreement (CBA) incorporating
the terms and conditions of the previous CBA providing for an annual increase in the workers’ daily
wage. Special Civil Action (SCA) No. SHERIFFS RICHARD H.
entitled Maricalum Mining Corporation v. Ana. Manalo Street. Tomas Writ).
SEVEN HUNDRED THIRTY FOUR THOUSAND AND EIGHTY (Php248. Tomas Writ and from conducting any public sale of the levied-on properties. DEPARTMENT OF LABOR AND EMPLOYMENT. a copy of which certificate of sale is hereto attached as
Annex "A" and made an integral part hereof. J. Mortgages over assets listed in APT Specific Catalogue GC-031 for MMC.R. Tomas Writ.080. 2001. 1996 was illegal and that MMC committed unfair labor practice. all acting Sheriffs. Private respondent. Quisumbing. and several armed
men implemented the Sto. pursuant to a Purchase and Sale Agreement6 executed between GHI and Asset
Privatization Trust (APT).
DBP and PNB transferred it to the National Government for disposition or privatization because it
had become a non-performing asset. Arturo D.550.. more particularly listed and described in the Sheriff’s
Certificate of Sale dated September 7.080.
MARICALUM MINING CORPORATION
x x x x9
Upon the signing of the Purchase and Sale Agreement and upon the full satisfaction of the
stipulated down payment. METRO MANILA. Brion and NAMAWU. PHILIPPINES.
2000. A chattel mortgage over assets and personal properties more particularly listed and described in
the Sheriff’s Certificate of Sale dated September 7. 2001. on account of their foreclosure of Marinduque Mining
and Industrial Corporation’s assets. on motion of NAMAWU.]
MAKATI. 2002. Leonardo A. with office at Bacolod City following the auction
conducted pursuant to the provisions of Act 1508. (GHI). Petitioner.18
On October 14. Tomas ordered the
issuance of the July 18. Ramirez. read as follows:
AMOUNT .3 an entity operating a copper mine and mill
complex at Sipalay. and set the hearing on the application
for a writ of injunction. NAMAWU’s separate motions for the reconsideration of the injunction
order and for the dismissal of the case.12 In two separate cases─G. later assumed jurisdiction
over the dispute and ruled in favor of NAMAWU. MMC started its commercial operations in August 1985.00 in the second
note. with office at Bacolod City following the auction sale conducted
pursuant to the provisions of Act 3135.
Manila Memorial Park Bldg. then DOLE Secretary Patricia A. a labor dispute (refusal to bargain collectively
and unfair labor practice) arose between MMC and NAMAWU.. directed the issuance of a
partial writ of execution (Brion Writ).00
[Php186. MMC hereby establishes and constitutes in favor of "G" HOLDINGS. with the latter eventually filing with
the National Conciliation and Mediation Board of Bacolod City a notice of strike. 2 It was registered with the Securities
and Exchange Commission on August 3. 1127 for Contempt with Prayer for the Issuance of a
Temporary Restraining Order (TRO) and Writ of Preliminary Injunction and to Nullify the Sheriff’s
Levy on Properties. as evidenced by the Certificate of Sale
dated December 4. 2003 Decision1 of the Court of Appeals (CA) in CA-G.715.7 These financial claims were converted into three Promissory Notes 8 issued by MMC in
favor of GHI totaling P500M and secured by mortgages over MMC’s properties.19 GHI contended that the levied properties were the subject of a Deed of Real
Estate and Chattel Mortgage. INC. "G" Holdings.25
As collateral security. 2002. F. 1992. on or before October 2. and Php248. Rolando V."G" HOLDINGS. He
then ordered the reinstatement of the laid-off workers.00) ["PESOS ONE
HUNDRED EIGHTY SIX MILLION FIVE HUNDRED FIFTY THOUSAND FIFE HUNDRED AND SIXTY
were similarly worded except for their amounts. INC.00)" in the third note]. Nos.23 On October 17. and took full control of the management and operation of MMC. in 2006. Sta. was the exclusive bargaining agent of the rank and file
employees of Maricalum Mining Corporation (MMC). 75322.
Punta.360.15 affirmed the propriety of the
issuance of the Brion Writ. Respondents. and levied on the properties of MMC located at its
compound in Sipalay.22
The trial court issued ex parte a TRO effective for 72 hours.
APROSTA and ALBERTO MUNOZ. Inc. the trial court ordered the issuance of a Writ of
Injunction (issued on October 18. among others. Rolando V.
Region VI. in G.00)" in the second note. and "PESOS TWO HUNDRED FORTY EIGHT MILLION.734. 26 the
dispositive portion of which reads:
. 11 Then Labor
Secretary. the RTC issued its December 4.715. Negros
Occidental. 1984 issued by the Ex-Officio Provincial Sheriff of Negros
Occidental. 2002.. the former bought ninety percent (90%) of MMC’s shares and financial
claims.734.21 and that the mortgaged properties were already extrajudicially foreclosed in July 2001 and
sold to GHI as the highest bidder on December 3. this Court. Bacolod District Office. now Associate Justice of this Court. Brion.00 in the
third note. 2002 Alias Writ of Execution and Break-Open Order (Sto.:
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing
the October 14. Philippines. subject to GHI’s
posting of a P5M bond. 13
On May 11. Ramirez.16 On motion of NAMAWU.5
On October 2. Sto. 157696-97. National Mines and Allied
Workers Union Local 103 (NAMAWU). MARICALUM MINING CORPORATION (MMC) with postal address at 4th Floor. Metro Manila. Nos. its
successors and/or assigns:
1. Negros Occidental. the members of the union. a copy of which
Catalogue is hereby made an integral part hereof by way of reference. and ordered the DOLE sheriffs to proceed to the MMC
premises for the execution of the same. 1992
For Value Received.
PHILIPPINE CURRENCY. which became final and executory on January 26. with payment of full backwages and
benefits. 1996. Negros Occidental. 1996 20executed by MMC in favor of GHI to
secure the aforesaid P550M promissory notes. is a domestic corporation primarily engaged in the business
of owning and holding shares of stock of different companies. 1992.
The petitioner. we sustained
the validity of the Quisumbing Order. then Acting Department of Labor and Employment (DOLE) Secretary. as well as assets presently in
use by MMC but which are not listed or included in paragraphs 1 and 2 above and shall include all
assets that may hereinafter be acquired by MMC. GHI filed with the Regional Trial Court (RTC) of Kabankalan City.560. SEVEN
HUNDRED FIFTEEN THOUSAND AND THREE HUNDRED SIXTY (Php114. 1984 issued by the Ex-Officio Provincial Sheriff
of Negros Occidental.
3. that this deed was registered on February 24. 1984.
2. In his July 30. SP No. 133519 and 138996─filed with this Court. 2002.
The Brion Writ was not fully satisfied because MMC’s resident manager resisted its
enforcement. dated September 5. Secretary Quisumbing declared that the lay-off (of workers) implemented on
May 7. A mortgage over certain parcels of land. 2002 Omnibus Order.
18 and December 4. entitled to the delivery of the company notes accompanying the said purchase. but surprisingly.29
The CA further ruled that the subsequent foreclosure of the mortgage was irregular. more
importantly. the main
inquiry addressed by the CA decision was whether GHI could be treated as a third party or a
Aggrieved. 2002 is likewise DENIED. fictitious and
WHETHER OR NOT. Whether there was an effective levy by the DOLE upon the MMC’s real and personal properties. effected
precisely to prevent the satisfaction of the judgment against MMC. the basis for the extrajudicial foreclosure was not the failure of MMC to pay the
SO ORDERED. Accordingly. "G"
Holdings.00. and. premises considered.WHEREFORE.
WHETHER OR NOT. ASSUMING ARGUENDO THAT THE VALIDITY OF THE SAID REAL AND CHATTEL
MORTGAGE MAY BE COLLATERALLY ATTACKED. Hon. without any legal ground
or reason. and. we acknowledge our
Decision in Republic of the Philippines. Inc.
WHETHER OR NOT GHI IS THE ABSOLUTE OWNER OF THE PROPERTIES UNLAWFULLY GARNISHED
BY RESPONDENTS SHERIFFS."30 Further. The
Writ of Preliminary Injunction issued by the said court is lifted. Brion and NAMAWU. THE SAID MORTGAGE IS SHAM.. Pursuant thereto. The
resolution of this principal issue.
After due proceedings.
Each of these notes uniformly contains stipulations "establishing and constituting in favor of GHI"
mortgages over MMC’s real and personal properties." 38
However. Whether it was proper for the CA to pierce the veil of corporate fiction between MMC and GHI. it is essential to take judicial
cognizance of cases intimately linked to the present controversy which had earlier been elevated to
and decided by this Court.
Petitioner’s Urgent Motion for the return of the levied firearms is GRANTED. that the circumstances surrounding the execution of the September 5. It noted that the foreclosure
proceedings were initiated in July 2001.000. 1996.
Before we delve into an extended discussion of the foregoing issues.32
Dissatisfied. were part of the documents
executed in 1992 in the privatization sale of MMC by the Asset Privatization Trust (APT) to GHI. the CA pierced the veil of corporate fiction of the two corporations. Upon the same principle of judicial notice.R.34 in which we upheld the right of herein private respondent. 2002 orders of the RTC. and thus. Jose Lapak. Tomas Writ.
WHETHER OR NOT THE HONORABLE HENRY D. Negros Occidental
are hereby ANNULLED and SET ASIDE for having been issued in excess or without authority. on October 14.
respondent sheriffs are ordered to return the levied firearms and handguns to the petitioner
provided the latter puts [up] a bond in the amount of P332.
WHETHER OR NOT GHI IS A DISTINCT AND SEPARATE CORPORATE ENTITY FROM MMC. The CA also found that the certificates of title to MMC’s real properties did not
contain any annotation of a mortgage lien. the appellate court rendered a Decision setting aside
the RTC issuances and directing the immediate execution of the Sto. that it was executed two weeks after the labor dispute arose in 1996.
WHETHER OR NOT THE VALIDITY OF THE DEED OF REAL AND CHATTEL MORTGAGE OVER THE
SUBJECT PROPERTIES BETWEEN MMC AND GHI MAY BE COLLATERALLY ATTACKED. the
RTC properly issued the writ of injunction to prevent the enforcement of the Sto.
Judicial Notice. the Deed was registered on February 4. The stipulations were subsequently
formalized in a separate document denominated Deed of Real Estate and Chattel Mortgage on
September 5. consisting of three (3) Promissory Notes. the CA correctly assessed that the authority of the lower court to issue the challenged
writ of injunction depends on the validity of the third party’s (GHI’s) claim of ownership over the
property subject of the writ of execution issued by the labor department. and the DOLE Sheriff is directed to
immediately enforce the Writ of Execution issued by the Department of Labor and Employment in
the case "In re: Labor Dispute in Maricalum Mining Corporation" docketed as OS-AJ-10-96-01
(NCMB-RB6-08-96). ASSUMING ARGUENDO THAT THE PERTINENT DECISION OR ORDER IN THE SAID
LABOR DISPUTE BETWEEN MMC AND NAMAWU MAY BE ENFORCED AGAINST GHI. otherwise.
Stripped of non-essentials. The CA ruled.000.
Respondent’s Motion to Dismiss as embodied in its Opposition to Extension of Temporary
Restraining Order and Issuance of Writ of Preliminary Injunction with Motion to Dismiss and
Suspend Period to File Answer dated October 15. 2002 for the reconsideration of the Order of this Court directing the issuance of
Writ of Injunction prayed for by petitioner and the Order dated October 18.
Respondent’s lawyer. is strictly warned not to resort again to disrespectful and
contemptuous language in his pleadings.00 is hereby DENIED. Tomas Writ.
These company notes. GHI did not intervene in the long
drawn-out labor proceedings to protect its right as a mortgagee of virtually all the properties of
Judicial notice must be taken by this Court of its Decision in Maricalum Mining Corporation v. however. they should have guided
the courts below in the disposition of the controversy at their respective levels. given the factual circumstances obtaining. THERE IS
ALREADY A FINAL DEETERMINATION BY THE SUPREME COURT OF THE RIGHTS OF THE PARTIES IN
SAID LABOR DISPUTE CONSIDERING THE PENDENCY OF G. Whether the mortgage of the MMC’s properties to GHI was a sham.
2. 2002 Order of the RTC. the core issue is whether. 2002 approving
petitioner’s Injunction Bond in the amount of P5. immediately after the Court affirmed with finality the
Quisumbing Order. through its trustee. The October 17. in favor of any person. these
decisions respectively confirm the right of NAMAWU to its labor claims 37 and affirm the right of GHI
to its financial and mortgage claims over the real and personal properties of MMC.200.
3. To repeat. Thus. the petition is GRANTED. FICTITIOUS AND
raising the following issues:
WHETHER OR NOT GHI IS A PARTY TO THE LABOR DISPUTE BETWEEN NAMAWU AND MMC.
WHETHER OR NOT GHI CAN BE PREVENTED THROUGH THE ISSUANCE OF A RESTRAINING ORDER
OR INJUNCTION FROM TAKING POSSESSION OR BE DISPOSSESSED OF ASSETS PURCHASED BY IT
FROM APT. shortly after the issuance of the Brion Writ. Thereafter. The assailed CA decision apparently failed to consider the impact of these two
decisions on the case at bar.
it was registered only on February 24. ARLES CORRECTLY ISSUED A WRIT OF INJUNCTION
AGAINST THE UNLAWFUL EXECUTIOIN ON GHI’S PROPERTIES. NOS. but its failure "to satisfy any money judgment against it rendered by a court or
tribunal of competent jurisdiction. the same shall be dealt with accordingly. Branch 61 of Kabankalan City. 157696-97. in view of the foregoing considerations. will necessitate a ruling on the following key and
1. suspiciously. to its labor claims. In fact. as will be
explained below. respondent NAMAWU Local 103’s Motion for Reconsideration
dated October 23. firm or entity. 1996 Deed of
Real Estate and Chattel Mortgage yielded the conclusion that the deed was sham.35 in which GHI was recognized as the rightful purchaser of the shares of stocks of
MMC. we find it timely to reiterate that: "courts have also taken
judicial notice of previous cases to determine whether or not the case pending is a moot one or
whether or not a previous ruling is applicable to the case under consideration. 31 The
dispositive portion of the appellate court’s decision reads:
WHEREFORE. GHI elevated the case to this Court via the instant petition for review on certiorari. the Asset Privatization Trust v.36
We find both decisions critically relevant to the instant dispute. Atty.
Arturo D. 2000. assailing the October
17. NAMAWU filed with the CA a petition for certiorari under Rule 65.
2002 and the December 4.
"G" Holdings. Obviously. executed the agreement..702.
During the pre-trial. Plaintiff shall pay the balance simultaneously with the delivery of the
Deed of Transfer and actual delivery of the shares and notes. more particularly listed and described in the Sheriff’s
Certificate of Sale dated September 7. Section 10 of the Rules of Court. As already adverted to above. Mortgages over assets listed in APT Specific catalogue GC-031 for MMC. 1992. In Juaban v. giving rise to the presumption of regularity
in its execution. they were agreed upon long before the seeds of the labor dispute germinated.704. at its present value of P241. Even as the parties had already validly constituted the
mortgages in 1992. To repeat. viz:
Subsequently. the trial court rendered
its decision. situating the facts in proper perspective. the appellate
court dismissed the petition. were a "fictitious" arrangement intended to defraud
NAMAWU. Inc. the three (3) Promissory Notes.
It may be remembered that APT acquired the MMC from the PNB and the DBP. through APT. as they provide the necessary perspective to determine whether GHI is such a party with
a valid ownership claim over the properties subject of the writ of execution.and after "G" Holdings Inc. consented to the "establishment and constitution" of the
mortgages on the assets of MMC in favor of GHI. a copy of which Certificate of Sale is hereto
attached as Annex "B" and made an integral part hereof. the move to execute a formal document denominated as the Deed of Real Estate and
Chattel Mortgage came about after the decision of the RTC of Manila in Civil Case No. and clothed with the presumption of
regularity. the mortgages cannot be characterized as sham. as explicitly provided in the Promissory Notes. fictitious or fraudulent.
The mortgage was not a sham. These cases may be so closely
interwoven. 1984 issued by the Ex-Officio Provincial Sheriff
of Negros Occidental. Then..39
In this light. inclusive of the Promissory Notes.stranger to the labor dispute. or so clearly interdependent. acknowledged the existence of the Purchase and Sale
Agreement between the APT and the GHI. the respective counsels of the parties manifested that the issue involved in the
case was one of law and submitted the case for decision. however. a disagreement on the matter of when installment payments should commence
arose between the parties. and recounts the facts attendant to that transaction.
The Solicitor General filed a notice of appeal on behalf of the Republic on June 28.
not with the trial court which rendered the judgment appealed from. in this transaction is significant.
filed a petition for annulment of judgment with the CA.. it is beyond cavil that this formal document of mortgage was merely a derivative of the
original mortgage stipulations contained in the Promissory Notes of October 2. executed on October 2..02 and conformably
to Rule 39. v. It is obvious.
that the Government. in order to enforce the trial court’s decision of June 11. we now
proceed to resolve the questions identified above. It claimed that the decision should be
annulled on the ground of abuse of discretion amounting to lack of jurisdiction on the part of the
trial court. with office at Bacolod City following the auction sale conducted
pursuant to the provisions of Act 3135. 1999 when the Republic. 1984 issued by the Ex-Officio Provincial Sheriff of Negros
Occidental. computed pursuant to the prepayment
provisions of the Agreement. x x x x43
With the RTC decision having become final owing to the failure of the Republic to perfect an
appeal. Rolando V. It ruled in favor of "G" Holdings and held:
"In line with the foregoing. this Court having been convinced that the Purchase and Sale Agreement
is indeed subject to the final closing conditions prescribed by Stipulation No. the Republic undertook to sell and deliver 90% of the
entire issued and outstanding shares of MMC. Contrary
to the rules of procedure. as well as assets presently in
use by MMC but which are not listed or included in paragraphs 1 and 2 above and shall include all
assets that may hereinafter be acquired by MMC. through APT. through the APT as
its trustee. with office at Bacolod City following the auction
conducted pursuant to the provision of Act 1508.
Unable to settle the issue. and "G" Holdings culminated in the execution of a purchase and sale agreement on
October 2.000 with the balance divided into four tranches payable in installment over a period of
ten years.280. courts have also taken judicial notice of proceedings in
other cases that are closely connected to the matter in controversy. 95-76132
became final in mid-1996.
Indeed. Because the
Government had actively negotiated and. as narrated in Republic. already existing in 1992. as to invoke a rule of judicial notice. This appears to
be the most plausible explanation for the execution of the Deed of Real Estate and Chattel
Mortgage only in September 1996. 1996. "G" Holdings. almost four (4) years
before NAMAWU filed its notice of strike. the notes
(and the stipulations therein) enjoy the benefit of the same presumption of regularity accorded to
government actions.86. etc. shall have paid in full the
entire balance. v. Given the Government consent thereto.122. This conclusion surfaces when we consider the genesis of Civil Case No. 2001.
Apparently. Branch 49. to "G" Holdings in
consideration of the purchase price of P673. a copy of which
Catalogue is hereby made an integral part hereof by way of reference. a specific deed of mortgage in a
separate document may have been deemed necessary for registration purposes. the manifest intention of the
parties to "establish and constitute" the mortgages on MMC’s real and personal properties. in
compliance with its mandate to privatize government assets. Under the agreement. The Republic claimed that it should be on the seventh month from the
signing of the agreement while "G" Holdings insisted that it should begin seven months after the
fulfillment of the closing conditions. issued by MMC in favor of GHI." The two cases that
we have taken judicial notice of are of such character. 1996. 1992. and our review of the instant case cannot
stray from the findings and conclusions therein.
"established and constituted" in favor of GHI the following mortgages:
While it is true that the Deed of Real Estate and Chattel Mortgage was executed only on September
5. Inc. x x x
Finding that the grounds necessary for the annulment of judgment were inexistent. Rolando V.40 we held that "in some instances.
SO ORDERED. eventually. 1996. It also provided for a down payment
of P98. This presumption would cover all related transactional acts and documents
needed to consummate the privatization sale. this
. as mentioned above. as well as its company notes. Accordingly.
95-76132 and subsequent incidents thereto.161. this Court has recognized this Purchase and Sale Agreement in
Republic. accordingly orders that the Asset Privatization Trust
execute the corresponding Document of Transfer of the subject shares and financial notes and
cause the actual delivery of subject shares and notes to "G" Holdings.. The complaint was docketed as Civil
Case No. 1992. The execution
of this Deed in 1996 does not detract from.
The participation of the Government. 95-76132. the notice of appeal was filed with the Court of Appeals (CA). a copy of which certificate of sale is hereto attached as
Annex "A" and made an integral part hereof. these notes
uniformly contained stipulations "establishing and constituting" mortgages over MMC’s real and
personal properties. whose properties were beyond the reach of the Writ of Execution
dated December 18. it may have become necessary to execute the Deed of Real Estate and Chattel Mortgage on
No other judicial remedy was resorted to until July 2. Ramirez. then the
transaction is imbued with an aura of official authority. "G" Holdings. Inc. as provided in the notes. within a period of
thirty (30) days from receipt of this Decision. through the APT.42
It is difficult to conceive that these mortgages. as
The series of negotiations between the petitioner Republic of the Philippines. 1996. A chattel mortgage over assets and personal properties more particularly listed and described in
the Sheriff’s Certificate of Sale dated September 7."41
The "company notes" mentioned therein were actually the very same three (3) Promissory Notes
amounting toP550M. then. Ramirez.
Having recognized these crucial Court rulings. APT sold the aforesaid MMC shares
and notes to GHI. but instead reinforces. "G" Holdings filed a complaint for specific performance and damages
with the Regional Trial Court of Manila. After all. v. all the more does it become imperative to take judicial notice of the two cases
aforesaid. A mortgage over certain parcels of land. against the Republic to compel it to close the
sale in accordance with the purchase and sale agreement. On June 11. etc. Inc.
a separate action was filed in the regular courts by
GHI. As such.the claimant did not exercise his option to file a
separate action in court. as yet.453. 1996. 2000. 1387. 1992 in the
Promissory Notes. 1992.886.
The decision or attachment need not refer to the property alienated. a reputable international financial organization. However. owing to the motion to dismiss
filed by NAMAWU. all the assets of
MMC had already been transferred to GHI. v. the mere filing of a notice of strike by NAMAWU did not. First. and to declare that the mortgage deed was void for
being simulated and fictitious.45 In this case. 1997 and the "Deed of Assignment" on
December 8. after the DOLE had already issued a Partial Writ of Execution on May 9. First. Inc. Placer Dome had already
bound itself under a "Support and Standby Credit Agreement" to provide Marcopper with cash
flow support for the payment to ADB of its obligations. At issue in Tanongon was a third-party claim
arising from a Deed of Absolute Sale executed between Olizon and Tanongon on July 29.756. would furnish
MMC a convenient excuse to absolve itself of its mortgage obligations by adopting the simple
strategy of not including the obligations in its financial statements.
The fact that MMC’s obligation to GHI is not reflected in the former’s financial statements─a
circumstance made capital of by NAMAWU in order to cast doubt on the validity of the mortgage
deed─is of no moment. Those contracts cannot be viewed in isolation. in Tanongon. while the participation of APT in this case clothes the transaction in 1992 with
such a presumption that has not been successfully rebutted. Samson44 is not "on all fours" with the instant case.12 to ADB in satisfaction of Marcopper’s remaining debt as of March
20. We find this Court’s ruling in MR Holdings.791. the conduct of a fullblown trial led to the finding─duly supported by evidence─that the voluntary sale of the assets of
the judgment debtor was madein bad faith. 9680083 by the Manila RTC. There
are material differences between the two cases. well ahead of the
union’s notice of strike on August 23. The
execution of the "Assignment Agreement" on March 20. showing the clear intent of the parties to impose a lien upon MMC’s
properties. If we may
add.explanation is more logical and more sensible than the strained conjecture that the mortgage was
executed on September 5. While the execution of these assignment contracts
almost coincided with the rendition on May 7."46 Equally suspicious. 1996 only for the purpose of defrauding NAMAWU. thus allowing the NLRC Sheriff to levy on execution and to determine the
rights of third-party claimants.
Three other circumstances have been put forward by the CA to support its conclusion that the
mortgage contract is a sham. No presumption of regularity inheres in the deed of
sale in Tanongon. Considering
that petitioner assumed Marcopper’s debt to ADB. will
connive with Marcopper to feign or simulate a contract in 1992 just to defraud Solidbank for its
claim four years thereafter. Finally. Inc.
It is undeniable that the Deed of Real Estate and Chattel Mortgage was formally documented two
weeks after NAMAWU filed its notice of strike against MMC on August 23. Sheriff Bajar51 pertinent and
Article 1387 of the Civil Code of the Philippines provides:
"Art. the design to defraud creditors may be proved in any other
manner recognized by law and of evidence. and the CA failed to consider the factual findings made by this Court in Republic. there was no intention on the part of petitioner to defeat
Contrary to the CA decision. 1992. "three years after its execution. in the sum of US$13. "G" Holdings.453. 2001. the CA found that the mortgage deed
itself was executed without any consideration. respectively.50
We do not agree. pay ADB the amount of
US$18.47 To the appellate court."
This article presumes the existence of fraud made by a debtor. it is highly inconceivable that ADB. the failure of the mortgagor to record in its financial statements its loan
obligations is surely not an essential element for the validity of mortgage agreements. the timing of the registration of the mortgage deed was too
coincidental. as discussed above. it follows that Solidbank’s right as judgment
creditor over the subject properties must give way to that of the former. Placer Dome agreed to have its subsidiary.450.
Alienations by onerous title are also presumed fraudulent when made by persons against whom
some judgment has been rendered in any instance or some writ of attachment has been issued. while the date of the foreclosure signified that it was "effected precisely to prevent
the satisfaction of the judgment awards. ADB and Marcopper executed. Besides." Obviously. no trial was held. when the donor did not reserve
sufficient property to pay all debts contracted before the donation. this case involves an involuntary transfer (foreclosure of mortgage) arising from a loan
obligation that well-existed long before the commencement of the labor claims of the private
respondent."48 Furthermore. It bears reiterating that as early as November 4. And it is equally incredible for petitioner to be paying the huge sum of
US$18. Tanongon v.1997 is not the alphaof this case. Furthermore. To say otherwise. is the fact that the mortgages were
foreclosed on July 31. was remitted in favor of the Bank of Nova Scotia. resulting in the inability of the judgment creditor to satisfy the judgment. It is basic that mortgaged properties answer primarily for the
mortgaged credit. On the other
Thereupon. All that is necessary is
to establish affirmatively that the conveyance is made in good faith and for a sufficient and
after the NLRC decision became final and executory on April 29. Here. v.12. as far as the CA is concerned.453. When Marcopper ceased operations on
account of disastrous mine tailings spill into the Boac River and ADB pressed for payment of the
loan. vest in
NAMAWU any definitive right that could be prejudiced by the execution of the mortgage deed.49
These circumstances provided the CA with sufficient justification to apply Article 1387 of the Civil
Code on presumed fraudulent transactions. in favor of petitioner an "Assignment
Agreement" and a "Deed of Assignment. herein petitioner.450. Second. in the absence of satisfactory
evidence to the contrary.
and almost one month after the Supreme Court rendered its decision in the labor
The "Assignment Agreement" and the "Deed of Assignment" were executed for valuable
mortgages had already been "established and constituted" as early as October 2. because at the time of its execution.
It is said that the test as to whether or not a conveyance is fraudulent is ― does it prejudice the
rights of creditors? We cannot see how Solidbank’s right was prejudiced by the assignment
contracts considering that substantially all of Marcopper’s properties were already covered by the
registered "Deed of Real Estate and Chattel Mortgage" executed by Marcopper in favor of ADB as
early as November 11. the CA considered it highly suspect that the Deed of Real Estate
and Chattel Mortgage was registered only on February 4. and need not have been
obtained by the party seeking rescission. All contracts by virtue of which the debtor alienates property by gratuitous title are
presumed to have been entered into in fraud of creditors. its
major stockholder. "G" Holdings. which obliged APT to deliver the MMC shares and financial
notes to GHI. 1997 of the Partial Judgment in Civil Case No. nor will it
independently affect the right of the mortgagee to foreclose.52
.970. 1997. etc. This presumption of fraud is
not conclusive and may be rebutted by satisfactory and convincing evidence. not for the judgment credit of the mortgagor’s unsecured creditor.
etc. In Tanongon. it does not provide a sufficient basis to invalidate this public
document. It would ignore our ruling
The facts of the case so far show that the assignment contracts were executed in good faith. 1992. what is
involved is a loan with mortgage agreement executed on October 2. Solidbank cannot assert a better right than ADB. 1997. 96-80083 by the Manila RTC.89.06. this fact
alone cannot give rise to an adverse inference for two reasons.
voluntary transfer in the form of a sale executed by the judgment debtor in favor of a dubious
third-party. Solidbank cannot deny this fact considering that a substantial portion of the said
payment. In the case at bar. By itself. the third-party claimant. v. an alienation of a property will be held fraudulent if it is made after a
judgment has been rendered against the debtor making the alienation. and to invalidate the mortgage deed on this pretext.
In addition to these presumptions. Ltd. the latter
being a preferred creditor. however. the questioned transaction in Tanongon was a plain. 1996. Patent from the "Assignment Agreement" is the fact that petitioner assumed the
payment of US$18.12 to ADB only for the purpose of defrauding Solidbank of the sum
ofP52. the assignment contracts were connected
with transactions that happened long before the rendition in 1997 of the Partial Judgment in Civil
Case No..450. 1997.
therefore. it is
presumed that he knew. stood to
suffer a loss if it did not avail itself of the remedy of foreclosure. with full knowledge that such circumstances existed.D. In purchasing it. as it was only then that this
Court resolved the issue. constituted in 1992. 1529. 1992. he would acquire a better right than that which the vendor
The act of registration shall be the operative act to convey or affect the land insofar as third
persons are concerned. mortgages. But no deed.
Likewise. 2001. 1529. nowhere in the Agreement or in the RTC decision is there any mention
of real and personal properties of MMC being included in the sale to GHI in 1992. the Court of Appeals had no basis to conclude that this Deed of Real Estate and Chattel
The well-settled principle is that the rights of a mortgage creditor over the mortgaged properties
are superior to those of a subsequent attaching creditor.
Neither will the circumstance of GHI’s foreclosure of MMC’s properties on July 31. No. These properties
simply served as mortgaged collateral for the 1992 Promissory Notes. To paraphrase MR Holdings. and
without the least indication of fraud. 9576132. No. we note the narration of subsequent facts contained in the Comment of the Office of the
Solicitor General. Section 25 of the Revised Rules). No. And it cannot be denied that this original agreement was supported
by an adequate consideration. Further. order. docketed as G. that the denial of the motion was appealed
to the CA. Section 51 of Act No. Section 22 of the old Rules of Court (now Rule
39. or after
the DOLE had already issued a Partial Writ of Execution on May 9." The mere lapse of time from the execution of the mortgage
document to the moment of its registration does not affect the rights of a mortgagee. we cannot see how NAMAWU’s right was prejudiced
by the Deed of Real Estate and Chattel Mortgage. if registered. except a will
purporting to convey or effect registered land. 2001. Constructive notice upon registration. by the mere fact that the instrument of mortgage. 1992. lien. that said automobile was subject to a
mortgage lien. lease. This happened four and a half years after July 31. deeds. lien. mortgage. Yet." It has long been settled by this Court that "The right of those who so
acquire said properties should not and can not be superior to that of the creditor who has in his
favor an instrument of mortgage executed with the formalities of the law. not being a party to the labor dispute between NAMAWU and MMC. provides:
SECTION 52. it is alleged that after the Partial Writ of Execution was issued on May 9.
But. mortgage. and
even when the second mortgagee goes through the formality of an extrajudicial foreclosure.56 Thus. 1996 was simply the formal
documentation of what had already been agreed in the seminal transaction (the Purchase and Sale
Agreement) between APT and GHI. 2001 was "effected [only] to prevent satisfaction of the judgment award." In another case between two mortgagees. very much willing to respect the lien existing thereon.D." If registered.60 this Court
Defendants-appellants purchase of the mortgaged chattels at the public sheriff's sale and the
delivery of the chattels to them with a certificate of sale did not give them a superior right to the
chattels as against plaintiffs-mortgagees. Exhibit 2." GHI’s mortgage rights. since he should not
have expected that with the purchase. order. in 1996. the
purchaser acquires no more than the right of redemption from the first mortgagee. be constructive notice to all persons from the time of such registering. was
registered in the office of the register of deeds of Manila. Conveyance and other dealings by registered owner. as amended by P. RTC of Manila).From this ruling in MR Holdings. antedated the
Partial Writ of Execution by nearly ten (10) years.
The well-settled rule is that a mortgage lien is inseparable from the property mortgaged. 57 While it
is true that GHI’s foreclosure of MMC’s mortgaged properties may have had the "effect to prevent
satisfaction of the judgment award against the specific mortgaged property that first answers for a
mortgage obligation ahead of any subsequent creditors. 1529. that when the appeal was dismissed by the CA on January 24. 2006. He may use such forms. the outcome of that labor dispute was yet
unascertainable at that time. we held that "As between the first and
second mortgagees. or at least. we must reject the conclusion of the CA that the Deed of Real Estate and Chattel Mortgage
executed in 1996 was a simulated transaction. a
instrument or entry affecting registered land.
The importance of registration and its binding effect is stated in Section 51 of the Property
Registration Decree or Presidential Decree (P. filing or
entering. and that G. he knew. and in all cases under this Decree.
attachment. Given this
496. cited by appellants precisely provides that "the sale conveys to
the purchaser all the right which the debtor had in such property on the day the execution or
attachment was levied.
On the issue of whether there had been an effective levy upon the properties of GHI. No. mortgage. it "shall be the operative act to convey or affect the land insofar
as third persons are concerned.—Every conveyance. 2001 against MMC. 2002.
This chronology of subsequent events shows that February 9. 1933.R. there is nothing in Act No. leases or other voluntary instrument as are
sufficient in law." that same foreclosure does not
necessarily translate to having been "effected to prevent satisfaction of the judgment award"
against MMC. a motion for reconsideration was filed by MMC.53 But."58 It should be remembered that the Purchase and Sale Agreement between GHI and APT
involved large amounts (P550M) and even spawned a subsequent court action (Civil Case No.D. as already mentioned. The APT was even ordered by the court to deliver the shares and
financial notes of MMC in exchange for the payments that GHI had made. The execution of the subsequent
Deed of Real Estate and Chattel Mortgage on September 5.59 The Purchase and Sale
Agreement and the Promissory Notes themselves are the best evidence that there was ample
consideration for the mortgage. it should be
presumed that he did so. or by its delayed registration.R. the date when
GHI foreclosed on the mortgaged properties. by reason of its late registration. when
the plaintiff purchased the automobile in question on August 22. that NAMAWU filed a notice of strike to protest non-payment
of its rightful labor claims.
157696 was decided by this Court only on February 9. it eventually became
the subject of a review petition before this Court. attachment. In Cabral v. This is all the more true in the present case. Rule 39. it is not accurate to say that the foreclosure
made on July 31. lease. lease. as amended by Section 52 of P. 157696. Evangelista. that imposes a period within
which to register annotations of "conveyance."
We also observe the error in the CA’s finding that the 1996 Deed of Real Estate and Chattel
Mortgage was not supported by any consideration since at the time the deed was executed. judgment. "all
the real and personal property of MMC had already been transferred in the hands of G
Holdings. we can draw parallel conclusions. 55
Under the Torrens system.—An owner of registered land
may convey. and NAMAWU could only have hoped for. when substantially
all of the properties of MMC were already mortgaged to GHI as early as October 2. in good faith. the registration shall be made in the
Office of the Register of Deeds for the province or the city where the land lies." If liens were not so registered. entrenched in our jurisdiction is the doctrine that registration
in a public registry creates constructive notice to the whole world. was a simulated or fictitious contract. or speculated about. It should not be viewed in isolation. filed
or entered in the Office of the Register of Deeds for the province or city where the land to which it
relates lies.) No. Therein.54 which reads:
SECTION 51. Section 16 of the Revised Rules of Court.
It was also about this time. mortgage. the second mortgagee has at most only the right to redeem. GHI’s resort to foreclosure was a legitimate
enforcement of a right to liquidate a bona fide debt. apart from the original
agreement of October 2.
but shall operate only as a contract between the parties and as evidence of authority to the
Registry of Deeds to make registration. shall take effect as a conveyance or bind the land. judgment.
2001. because." The
superiority of the mortgagee's lien over that of a subsequent judgment creditor is now expressly
provided in Rule 39.
Thus. registration is the operative act which gives validity to the transfer or
creates a lien upon the land. charge or otherwise deal with the same in accordance with existing
laws. then it "shall operate
only as a contract between the parties and as evidence of authority to the Registry of Deeds to
make registration. lease or other voluntary instrument. It was a reasonable option open to a
mortgagee which. 496. Thus. instrument or entry affecting registered land shall. support the
conclusion of the CA that GHI’s act of foreclosing on MMC’s properties was "effected to prevent
satisfaction of the judgment award. which states with regard to the effect
of levy on execution as to third persons that "The levy on execution shall create a lien in favor of
. 2006 would have been the earliest
date for the unimpeded enforcement of the Partial Writ of Execution.
There appears in the record a factual contradiction relating to whether the foreclosure by GHI on
July 13. justify wrong. Under a factual background largely resembling this case at bar. 362 SCRA 738). 66 well ahead
of any levy by NAMAWU. This can only mean that GHI and MMC have
separate corporate personalities. to justify piercing the former’s veil of corporate fiction so that the latter could be held liable to
claims of third-party judgment creditors. such as when the same is used for fraudulent or wrongful ends. and not 200165 What
is undisputed though is that the mortgage of GHI was registered on February 4. upon coming into existence. at that moment in time.the judgment creditor over the right."68
On the issue of piercing the veil of corporate fiction. 200163over some of the contested properties came ahead of the levy thereon. we now
ask: Was the CA correct in piercing the veil of corporate identity of GHI and MMC?
In our disquisition above. We find that Article 1387 finds
less application to an involuntary alienation such as the foreclosure of mortgage made before any
final judgment of a court. or by virtue of the DOLE’s levy to enforce NAMAWU’s claims. the notion
of corporate entity will be pierced or disregarded with reference to the particular transaction
the courts have not hesitated to pierce the corporate veil (Francisco vs.. the interlocking of directors and officers in two different corporations is not a
conclusive indication that the corporations are one and the same for purposes of applying the
doctrine of piercing the veil of corporate fiction.
The CA found that:
"Ordinarily. it is not
the alienation by onerous title contemplated in Article 1387 of the Civil Code wherein fraud is
presumed. subject to liens or encumbrances then existing. But
the debt embodied in the 1992 Financial Notes has been established. confuse
legitimate legal or judicial issues. Furthermore. For this reason. when there was already a judgment rendered or a writ of attachment
issued. Since the properties
were already mortgaged to GHI. or the APT in particular. with the registration of the mortgage. preferential and
paramount rights thereto. Accordingly. In
the case at bar. etc. By this attribute. like NAMAWU. who
has levied an attachment on the judgment debtor's (CMI) real properties which had been
mortgaged to a consortium of banks and were subsequently sold to a third party. merely a
fiction created by law for convenience and to promote the ends of justice. a stockholder may not. or business conduit for the sole benefit of
GHI. Top Rate. not for the judgment credit of the
mortgagor’s unsecured creditor. v. either
NAMAWU had no properties of MMC to attach because the same had been previously foreclosed
by GHI as mortgagee thereof. This is particularly true when the
fiction is used to defeat public convenience. Thus. In
sheriff could not have attached the properties themselves. or just to the financial notes that already
contained the mortgage clauses over MMCs disputed assets. under the writ of attachment obtained by the petitioner.
Since the factual antecedents of this case do not warrant a finding that the mortgage and loan
agreements between MMC and GHI were simulated. In this regard. and the foreclosure is resorted to in order to liquidate a bona fide debt. GHI’s mortgage right had already been registered by then. such that the debt of one to the other is thereby extinguished. 64 which GHI
disputes as a misstatement because the levy was attempted on July 18. alleging fraudulent corporate asset-shifting effected after a
prior final judgment. 2001. 61
Similar rules apply to cases of mortgaged real properties that are registered. the
latter’s rights are subject to the notice of the foreclosure on the subject properties by a prior
mortgagee’s right. when the legal fiction of the separate
corporate personality is abused. the Deed of Real Estate and Chattel Mortgage was entered into between MMC and
G Holdings for the purpose of evading the satisfaction of the legitimate claims of the petitioner
against MMC. 95-76132.. it may
not be used or invoked for ends subversive to the policy and purpose behind its creation or which
could not have been intended by law to which it owes its being. any undue motive to participate in a transaction designed to
perpetrate fraud.67 even against subsequent judgment
In this action. The notion of separate personality is clearly being utilized by the two corporations to
perpetuate the violation of a positive legal duty arising from a final judgment to the prejudice of
the petitioner’s right. is invested by law with a personality separate and
distinct from those persons composing it as well as from any other legal entity to which it may be
actually a levy on the interest only of the judgment debtor CMI on those properties. dating back to 1992-culminating in the Purchase and Sale Agreement. we cannot impute to this Court’s findings on the case any badge of fraud. the only interest remaining in the mortgagor was its right to
redeem said properties from the mortgage. The right of redemption
was the only leviable or attachable property right of CMI in the mortgaged real properties. "G" Holdings. this Court adjudged that GHI was entitled to its
rightful claims─ not just to the shares of MMC itself. plaintiffs seek to recover the balance due under judgments they obtained against
Lake George Ventures Inc. we consider the CA interpretation unwarranted. and "it is basic that
mortgaged properties answer primarily for the mortgaged credit. for they had already been conveyed to
the consortium of banks by mortgage (defined as a "conditional sale").
Neither was MMC used merely as an alter ego."69
Settled jurisprudence70 has it that –
"(A) corporation. resulting in a merger of the personalities of the creditor (GHI) and the
debtor (MMC) in one person.
We also cannot agree that the presumption of fraud in Article 1387 of the Civil Code relative to
property conveyances. adjunct. In all these cases. the only interest remaining in the
mortgagor CMI was its right to redeem said properties from the mortgage. "G" Holdings. we reject the CA’s conclusion that it was right to pierce the veil of corporate fiction. (hereinafter LGV). generally. mortgagees over chattel have superior. We thus hold that when the alienation is involuntary. as the act of registration
is the operative act that conveys and affects the land. We have held that —
The main issue in this case is the nature of the lien of a judgment creditor. then their separate personalities must be
recognized. we cannot ascribe to the
Government. such as respondent herein. because
the foregoing circumstances belie such an inference. The right of redemption was the only leviable or
attachable property right of the mortgagor in the mortgaged real properties.
Thus. Certainly. Inc. perpetrate deception or otherwise circumvent the law.
The sheriff's levy on CMI's properties. a subsidiary of defendant that was formed to develop
the Top O’ the World resort community overlooking Lake George. but also to the delivery of those
instruments. we find American
jurisprudence persuasive. and even made subject of
court litigation (Civil Case No. RTC Manila). Its registration of the mortgage was not intended to defraud
NAMAWU of its judgment claims. and vice versa. or the
reverse. defend crime."
Even in the matter of possession. In a decision by the Supreme Court of New York71 bearing upon similar
facts. in the said Republic. adjunct. we have shown that the CA’s finding that there was a "simulated
mortgage" between GHI and MMC to justify a wrong or protect a fraud has struggled vainly to find
a foothold when confronted with the ruling of this Court in Republic v. title and interest of the judgment debtor in such property at
the time of the levy. like the petitioner. be made to answer for acts or liabilities
of the said corporation. Inc. and the mortgagor has mere rights of redemption. NAMAWU claims that the levy on two trucks was effected on June 22. the Court denied piercing the veil of corporate fiction to favor a judgment creditor who sued
the parent corporation of the debtor. To pierce the veil of corporate fiction would require that their personalities as creditor
and debtor be conjoined. authorizes piercing the veil of corporate identity in this case. since even the courts were already judicially aware of its
existence since 1992. Mejia. This separate and distinct personality is. 2000. Since the
properties were already mortgaged to the consortium of banks. so his levy must be
understood to have attached only the mortgagor's remaining interest in the mortgaged property —
the right to redeem it from the mortgage. This is
likewise true where the corporate entity is being used as an alter ego. and the foreclosure
is not fraudulent because the mortgage deed has been previously executed in accordance with
formalities of law. cannot be depicted as a contrived transaction. by piercing the corporate veil or
. however. protect fraud.
Given this jurisprudential principle and the factual circumstances obtaining in this case. Prior registration of a lien creates a preference. or business conduit
for the sole benefit of the stockholders or of another corporate entity. However. 2002.
The negotiations between the GHI and the Government--through APT.
But these Promissory Notes with mortgage were executed by GHI with APT in the name of
MMC.246. of the mortgages earlier constituted in the Promissory Notes dated October
2. Supreme Court thereafter rendered judgment in favor of defendant
upon its findings that. it did not use that domination to
commit a fraud or wrong on plaintiffs. "[e]vidence of domination alone does not suffice
without an additional showing that it led to inequity.Y. v. the loan was modified by splitting the loan into a $1.S.upon the theory that LGV's transfer of certain assets constituted fraudulent transfers under the
Debtor and Creditor Law.5 million loan from Chemical Bank. unable to meet its obligations and. even
including the water company and sports complex at the values plaintiffs would assign to them. New York State Dept.
603 N. and.1avvphi1
The trial evidence showed that LGV was incorporated in November 1985. The
loan proceeds were utilized to purchase the real property upon which the project was to be
the U. 623 N.S. Fundamentally. Initial project funding was provided through a $2. MKI
Sec. but complete domination.2d 609. of Taxation & Fin.S. 141.1 million project note on which LGV was the obligor and defendant was a
later. in exchange for a $950. initially held 90% of the stock and all of the stock was ultimately transferred to
defendant. Matter of Morris v.5 million to LGV.73 we laid down the test in
determining the applicability of the doctrine of piercing the veil of corporate fiction.
3. absent which we would
have granted summary judgment in favor of defendant. 339. It is undisputed that LGV was.Y.50. Inc.000 reduction in the deficiency
judgment. We previously upheld Supreme Court's denial of defendant's motion for
summary judgment dismissing the complaint (252 A. It appears that if there was any control or domination
exercised over MMC. that wielded it. Supreme Court of New York held—
Based on the foregoing.E.2d 135.
party seeking to pierce the corporate veil must show complete domination and control of the
subsidiary by the parent and also that such domination was used to commit a fraud or wrong
against the plaintiff that resulted in the plaintiff's injury ( 252 A. which constituted nothing more than a "bookkeeping
transaction" and had no apparent effect on LGV's obligations to defendant or defendant's right to
foreclose on its mortgage.S. Defendant's principal.
Due to LGV's lack of success in marketing the project's townhouses and in order to protect itself
from the exercise of Chemical Bank's enforcement remedies.
As properly concluded by Supreme Court. defendant obtained a judgment of foreclosure and
sale in the amount of $6. to wit:
1. 92 N. paid the $1.
Following the foreclosure sale. Corp.5 million balance on the term
note and took an assignment of the first mortgage on the project's realty. a writ of preliminary injunction to prevent enforcement of a writ of execution issued by a
labor tribunal on the basis of a third-party’s claim of ownership over the properties levied
upon. accomplished solely for tax purposes.2d
234. not mere majority or complete control.
In Concept Builders. since said action neither
involves nor grows out of a labor dispute insofar as the third party is concerned.
Time and again. not only of finances
but of policy and business practice in respect to the transaction attacked so that the corporate
entity as to this transaction had at the time no separate mind. but complete domination. or dishonest and. To the
contrary.2d 749).. not only of finances but of policy and
business practice in respect to the transaction attacked.50.
the fact remains that subordinate mortgages totaling nearly an additional $2 million have priority
over plaintiffs' judgments. again guaranteed
by defendant. supra) set forth a "roadmap" for the proof required at trial and mandated a verdict in favor of
plaintiffs upon their production of evidence that supported the decision's "listed facts". a derivative. in a full privatization process. 254 of the New Labor Code (herein earlier quoted)
which prohibits injunctions or restraining orders in any case involving or growing out of a 'labor
.D.Y. Plaintiffs appealed.
On the propriety of injunction to prevent execution by the NLRC on the properties of third-party
It is settled that a Regional Trial Court can validly issue a Temporary Restraining Order (TRO) and. 1992. and for
some period of time had been. Such control must have been used by the defendant to commit fraud or wrong. to perpetuate
the violation of a statutory or other positive legal duty. at the time of the foreclosure
sale. we specifically reject a number of plaintiffs' assertions. even upon a mere prima facie showing of ownership of such claimant--a separate
action for injunctive relief against such levy may be maintained in court. In
fact. so that the corporate entity as to this
transaction had at the time no separate mind. a sufficient
ground for disregarding a separate corporate personality. as a rule. Neither can we conclude that the
constitution of the loan nearly four (4) years prior to NAMAWU’s notice of strike could have been
the proximate cause of the injury of NAMAWU for having been deprived of MMC’s corporate
assets.070. 680 N. by itself. After LGV failed to make
payments on the indebtedness over the course of the succeeding two years.Y. a separate entity that had been organized to construct and operate the water
supply and delivery system for the project.
National Mines and Allied Workers’ Union v. The mortgage deed
transaction attacked as a basis for piercing the corporate veil was a transaction that was an
offshoot. Control. 675 N. Defendant bid in the property at the foreclosure sale and
thereafter obtained a deficiency judgment in the amount of $3.1 million. including the
entirely erroneous claims that our determination on the prior appeal (252 A.2d 335. Ultimately. although defendant dominated LGV. it was APT.76 While. defendant was forced to make
monthly installments of principal and interest on LGV's behalf.246. 82 N. defendant brought an
action to foreclose its mortgage.75
In this case. 675 N.2d 891. and the two loans were consolidated into a first mortgage loan of $6 million.. see.2d
234. defendant purchased
the project note from Chemical Bank for $3. absent a finding of any inequitable consequence to
plaintiffs.2d 234) and the matter
proceeded to a nonjury trial. we are at a loss as to how plaintiffs perceive themselves to have been inequitably
affected by defendant's foreclosure action against LGV.74 It is basic that a corporation has a
personality separate and distinct from that composing it as well as from that of any other legal
entity to which it may be related.070. supra. LGV transferred to defendant all of the shares of Top of the World
Water Company. will or existence of its own. liens against its property exceeded the value of its assets by several million dollars.2d 609. both causes of action pleaded in the amended complaint must fail. and accepting that defendant exercised complete domination and control
over LGV. 675 N.S. National Labor Relations Commission. even if plaintiffs' analysis were utilized to eliminate the entire $3 million deficiency judgment.2d 807.Y. will or existence of its own.D. We are equally unpersuaded by plaintiffs'
continued reliance upon defendant's December 1991 unilateral conversion of its intercompany
loans with LGV from debt to equity.72
This doctrine is good law under Philippine jurisdiction. the mere interlocking of directors and officers does not warrant piercing the separate
corporate personalities of MMC and GHI. Clear and convincing evidence is needed to pierce the veil of
Francesco Galesi.2d 609.9 term note on which defendant was
primary obligor and a $4.D.S. Notably.
secured by defendant's guarantee of repayment of the loan and completion of the project. by LGV's divestiture of the water company
stock or the sports complex property. unjust act in
contravention of plaintiffs legal rights. no temporary or permanent injunction or restraining order in any case
involving or growing out of a labor dispute shall be issued by any court--where the writ of
execution issued by a labor tribunal is sought to be enforced upon the property of a stranger to the
labor dispute.Y. fraud or malfeasance" (TNS Holdings v.2d 1157). we have reiterated that mere ownership by a single stockholder or by another
corporation of all or nearly all of the capital stock of a corporation is not. Ultimately. or by defendant's transfer to LGV of a third party's
uncollectible note. 610. Not only must there be a showing that there was
majority or complete control. Chemical Bank thereafter loaned an additional $3.Y. our decision was predicated upon the existence of such evidence. 77 Instructively.
In reaching that conclusion. The aforesaid control and breach of duty must proximately cause the injury or unjust loss
complained of. In
1989. not GHI. Vera78
Petitioners' reliance on the provision of Art. 703 N.
J. Negros Occidental is AFFIRMED. 2749 is one
which neither "involves" nor "grows out" of a labor dispute. impute grave abuse of discretion on the National Labor
Relations Commission (NLRC) 1 for issuing two resolutions. NONILON DAWAL.
We are not unmindful. The property levied upon being that of a stranger is not subject to levy. The existence of the subject Deed of Real Estate and Chattel Mortgage. The Decision of the Court of Appeals dated October 14. 2001 and the fact that a Sheriff’s Certificate of Sale was issued on December 3. They allege that its resolution
As correctly held by the lower court:
The subject incidents for TRO and/or Writ of Injunction were summarily heard and in resolving the
same. EDILBERTO VIRAY ANGELES BARON. and not of the judgment
debtor named in the NLRC decision and writ of execution."
SO ORDERED. 1997
To sustain petitioners' theory will inevitably lead to disastrous consequences and lend judicial
imprimatur to deprivation of property without due process of law. which were validly foreclosed by GHI. 2002 of the Regional Trial Court. the fact that said Ex-Officio Sheriff and the Clerk
of Court issue a Notice of Foreclosure. So
also is the consequential issue of the separate and distinct personalities of GHI and MMC. and November 18.
NATIONAL LABOR RELATIONS COMMISSION and PHILTREAD (FIRESTONE) TIRE AND RUBBER
While. of the fact that the labor claims of NAMAWU. with a valid consideration. 1992. above mentioned. Civil Case No. for the third and final time. he cannot. neither the
lower court nor the CA.
1992. The questioned restraining order of the lower court. v. appeal from the order denying his claim. ULDARICO GARCIA. For well-settled is the rule that the power of a court
to execute its judgment extends only over properties unquestionably belonging to the judgment
debtor. ERNESTO LITADA. still awaits final execution. ANANIAS HERMOCILLA. the Court believes. Thus. STEVE VELECINA.
a separate action for recovery. ERNESTO BANAY. since the third-party claimant is not one of the parties to the action. for brevity). To deny the victim of the wrongful levy. in issuing the questioned orders. but he should file a separate reivindicatory
action against the execution creditor or the purchaser of the property after the sale at public
auction.dispute' is not well-taken. The registration of the mortgage document operated as notice to all on the
matter of the mortgagee’s prior claims. 2749 is whether the NLRC's decision and writ of execution. and the rights of NAMAWU to its labor claims. 2749 does not
put in issue either the fact or validity of the proceeding in theNLRC case nor the decision therein
rendered. VENTURA. the Petition is GRANTED. ANDREW DE LA ISLA BAYANI PILAR.
VALERIANO MAUBAN. Branch
61 of Kabankalan City. an independent action is needed to rescind the contract
of mortgage. Inc. since the lower court is still to try the
case filed with it and decide it on the merits. it thereby admitted that the mortgage was not void.
because the mortgage has been previously recognized to exist. because its issuance was amply supported by factual and
legal bases. CEFERINO ROMERO. No. the Office of the Solicitor General also aptly observed that when the respondent
maintained that the Deed of Real Estate and Chattel mortgage was entered into in fraud of
not commit grave abuse of discretion.
G. 2001 are
the basis of its conclusion. and RICARDO B. can depart from our findings in those two cases
because of the doctrine of stare decisis.:
Petitioners. ERNESTO BARENG. in which we respectively recognized the
entitlement of GHI to the shares and the company notes of MMC (under the Purchase and Sale
Agreement). SILVA. Official proceedings relative to the foreclosure of the
subject properties constituted a prima facie showing of ownership of such claimant to support the
issuance of injunctive reliefs. The Omnibus Order dated December 4.83 or
even the resort to receivership. the recourse such as that availed of by
the herein private respondents. under the pretext that no court of general jurisdiction can interfere
with the writ of execution issued in a labor dispute.81 We. that the petitioner has a clear and unmistakable right over the levied
properties. which reconsidered a resolution it rendered on April 15. Civil Case No. hold that such an independent action cannot now be maintained. Certainly. These include the examination of the judgment
obligor when judgment is unsatisfied. ample supplemental remedies found in Rule 39 of the Rules of
Court in order to protect its rights against MMC. It does not seek to enjoin the
execution of the decision against the properties of the judgment debtor. therefore. Rule 39 of the Rules of Court. PASTOR VELUZ. etc. 110226 June 19. ANICETO ARBAN..
2003 is SET ASIDE. JAIME ACEVEDO. cannot be considered as interference. upon a claim and prima facie showing of ownership by the
petitioner. all former employees of private respondent Philtread (Firestone) Tire and Rubber
Corporation (Philtread. dated April 7.R. "G" Holdings. acknowledged by
this Court in Maricalum. however. that the lower court and the CA failed
to take judicial notice of. CARLITO CHOSAS. Philippine Iron
RTC Branch 61. MANOLITO CUSTODIO. ORLANDO MENDOZA. At this stage. RODOLFO MARIANO. The private respondents are not parties to the said NLRC case.
From our discussion above. 1993.
RICARDO CUEVAS. the matter of whether the mortgage and foreclosure
of the assets that are the subject of said foreclosure is ended herein. this case is not ended by this decision. FELOMENO BALLON. v.
VICENTE SANTOS. RENAN HALILI. in
Republic. Such a recourse is allowed under the
provisions of Section 17. will be sanctioning a greater evil than that
sought to be avoided by the Labor Code provision in question. Brion and NAMAWU. Having
resolved these principal issues with certainty.82 the examination of the obligors of judgment obligors. What 'involves' or 'grows out' of a
labor dispute is the NLRC case between petitioners and the judgment debtor. petitioners.79
A separate civil action for recovery of ownership of the property would not constitute interference
with the powers or processes of the labor tribunal which rendered the judgment to execute upon
the levied properties. HERNANI ABOROT. 2001.80
Upon the findings and conclusions we have reached above. we find no more need to remand the case to the
lower court. but merely rescissible under Article
1381(3) of the Civil Code. and. As success fades from NAMAWU’s efforts to
execute on the properties of MMC.
Notably. we now rule that the trial court. however. or to consider. GERONIMO
ESPLANA. What is sought to be tried
in Civil Case No. that could not have been
the intendment of the law creating the NLRC. Kabankalan City on July 13.
ROMERO. BONIFACIO URBANO. respondents.
WALLY LEONES. This has no application to the case at bar..
RODOLFO JUAN. Simply because a writ of
execution was issued by the NLRC does not authorize the sheriff implementing the same to levy on
anybody's property. much less the writ of execution issued thereunder. we see that NAMAWU
always had. "G" Holdings. RICARDO
A final word
The Court notes that the case filed with the lower court involves a principal action for injunction to
prohibit execution over properties belonging to a third party not impleaded in the legal dispute
between NAMAWU and MMC. petitioner is situated squarely as such
third-party claimant.. Unless said mortgage contract is annulled or declared null and void. the fact that
petitioner initiated a foreclosure of said properties before the Clerk of Court and Ex-Officio Sheriff. Possession and Control over said mortgaged properties on
July 19. strictly
speaking. our Decisions in Republic. only for the
purpose of resolving again the matter of whether GHI owns the properties that were the subject of
the latter’s foreclosure. does not constitute interference with the powers or processes of
the labor department. shall
be permitted to be satisfied against properties of private respondents. SEVERINO ROSETE. the
presumption of regularity of transaction must be considered and said document must be looked
[upon] as valid. or a complaint for damages against the bond filed by the judgment creditor in favor of the
sheriff. We have observed. PABLO ALULOD. etc. however. No costs. nor even this Court. as well as the order
granting preliminary injunction. VICENTE CHAVEZ. and may still have. and
Maricalum Mining Corporation v. MARIO CREDO BERNABE GERONIMO. therefore.
was thus incumbent upon the NLRC to have dismissed outright Philtread's late motion for
reconsideration. which was cognizable by the regular courts. as an administrative and quasi-judicial body. as well as those former
employees similarly situated for available positions provided they meet the necessary current
As stated at the outset. its motion could not be considered late.
Being one for unfair labor practice. the retrenchment program instituted by Philtread
with the understanding that they would have priority in re-employment in the event that the
company recovers from its financial crisis. the complaint should have been filed with the voluntary
arbitrator. Gutierrez and Leogardo had already been dissolved. the Labor Arbiter. Gutierrez. While we agree with the dictum that a void judgment cannot attain
finality. 1992. lies instead with the
voluntary arbitrator so that when the Labor Arbiter and the NLRC took cognizance of the case. he dwelt solely on the question
whether the petitioners were entitled to priority in re-employment on the basis of the CBA. It ruled that
while petitioners had standing to sue. pursuant to Article 261 of the Labor Code. as set forth in Article 262 of the Labor Code. as shown by the bailiff's return. incapable of attaining finality. In short. which. Daniel C. Gutierrez and Leogardo on May 5. in accordance with Section 4. the case at bar presents no
peculiar circumstances warranting a departure therefrom. Article III of the Collective
Bargaining Agreement concluded on July 5.of April 15. Atty.
Being of the impression that the April 15. expanded its
operations and hired new personnel. These are jurisdictional and mandatory requirements which must
be strictly complied with. Instead.
On November 18. namely: (1) that the NLRC lacked jurisdiction. is a mandatory requirement to forestall the finality of
such order. 1992. Philtread moved for the
dismissal of the complaint based on two grounds. Gutierrez and
Leogardo. it affirmed its earlier resolution dated November 18. regardless of
age qualifications and other pre-employment conditions. Madriaga rendered a decision dismissing the
complaint but directing Philtread to give petitioners priority in hiring. petitioners deemed it highly irregular and capricious for the
NLRC to still allow reconsideration of its April 15. 7
In the case at bar. apparently having recovered from its financial reverses. 1993. Philtread claims. 1988. 1992. the NLRC. 8 or 31 days after receipt of said resolution. it is settled doctrine that the NLRC.
Philtread maintains that the ten-day reglementary period could not have started running and.
To be sure.
there being no employer-employee relationship between it and petitioners and that the basic issue
involved was the interpretation of a contract. the CBA. however.
Petitioners further stressed that the resolution of April 15.
The Court is aware of Philtread's obvious attempt to skirt the requirement for seasonable filing of a
motion for reconsideration by persuading us that both the Labor Arbiter and the NLRC have no
jurisdiction over petitioners' complaint. Borreta of the
law firm of Borreta.
The NLRC. an ex parte manifestation
explaining that he was returning the copy of the resolution rendered on April 15. Article III of the 1986 and 1983 CBAs. damages and attorney's fees against
Philtread. 1989. petitioners filed their
respective applications for employment with Philtread. 10 However. Certiorari. lies. therefore. petitioners immediately moved for
reconsideration. 4 In dismissing the complaint.
Petitioners. He alleged
that in the several conciliation conferences held.
The argument is not tenable. 1992. pursuant to Article 217 (a) (1) of the Labor Code. resolution or decision. On its part. said rule. Jurisdiction.
promulgated one of its challenged resolutions dismissing the complaint of petitioners. its actuation was not only whimsical and capricious
but also a demonstration of its utter disregard for its very own rules. however. It
directed Philtread to re-employ petitioners and other employees similarly situated. merely agreed to consider
them for future vacancies. 1992 resolution. They pointed out that the NLRC's reliance on Article 261 of the Labor Code was
patently erroneous because it was the amended provision which was being cited by the NLRC. it was Atty.
according to him. this Court has been emphatic in ruling that the seasonable filing of a motion for
reconsideration within the l0-day reglementary period following the receipt by a party of any
order. the NLRC issued a resolution reversing the decision of the Labor Arbiter. 1992 resolution of the NLRC had been properly served at
the address of the law firm of Atty. had already become final and
executory since Philtread's counsel of record did not file any motion for reconsideration within the
period of ten (10) days from receipt of the resolution on May 5. 1992.
Subsequently. 1992 resolution only on June 5. 1988. this petition. not being privy to the CBA executed between the
union and Philtread. By doing exactly the opposite. 1992. 1992. Labor Arbiter Edgardo M. 1983. or after the filing of the complaint on December 5. Rule VII of the New Rules of Procedure of the National Labor Relations
Commission. 1992. however. Philtread.
Both parties submitted their respective position papers. was not convinced by petitioners' assertions. 1992. on December 5. 1992. as mandated by the provisions of Section 4. then rank-and-file employees and members of Philtread Workers
The record unfolds the following facts:
Sometime in 1985. therefore. did not tackle the
jurisdictional issue posed by Philtread in its position paper.
therefore. challenging Philtread's motion to dismiss.
Dismayed by the NLRC's sudden change of position.
and (2) that petitioners had no locus standi.
as the date of receipt of the April 15. Subsequent demands for re-employment made by petitioners were
ignored. it is uncontroverted that Philtread's counsel filed a motion for reconsideration of
the April 15. petitioners fault the NLRC for issuing the assailed resolutions even when
the resolution sought to be reconsidered had already attained finality upon Philtread's failure to
timely move for its reconsideration. is not
bound by the rigid application of technical rules of procedure in the conduct of its
proceedings. 1992 resolution by the law firm of Borreta. 1992. 1989. Abraham B. This resolution was received by Atty. 5 The statutory bases for this is found in Article 223 of the Labor
Code 6 and Section 14. however. petitioners moved for its execution. resolution or decision of the NLRC. the filing of a motion for reconsideration and filing it ON TIME are not
mere technicalities of procedure. which however. within which to file a motion for reconsideration. ruling that even before
the amendatory law took effect. acting on a motion for reconsideration filed by Atty. 2
In November 1986. matters involving bargaining agreements were already within the
exclusive jurisdiction of the voluntary arbitrator. since the primary issue was the
implementation and interpretation of the CBA. They
added that the amendment of Article 261 introduced by Republic Act No.
Time and again.
petitioners argued that the subsequent amendment cannot retroactively divest the Labor Arbiter
of the jurisdiction already acquired in accordance with Articles 217 and 248 of the Labor Code. is only relevant if the tribunal or body which takes cognizance of a
. petitioners. 6715 took effect only on
March 21. their
decisions thereon were null and void and. and availed of. subject only to existing vacancies and a
finding of good physical condition.
On April 15. Gutierrez and that no seasonable motion for reconsideration
was ever filed by Philtread.
The petition is impressed with merit. Gutierrez who exclusively
handled the case on behalf of Philtread and informed the Labor Arbiter and petitioners that the law
firm of Borreta. was erroneously served on him by the process server of the NLRC. In another resolution issued on
April 7. petitioners lodged a complaint 3 with the National Capital Region
Arbitration Branch of the NLRC for unfair labor practice (ULP). This being the case. 1992 became final and executory when Philtread failed to seasonably file a motion for
reconsideration within the ten-day reglementary period required by Article 223 of the Labor Code.
Hence. Even the request of the incumbent union for Philtread to stop hiring new personnel until
petitioners were first hired failed to elicit any favorable response. then Philtread only had ten (10) calendar days or until May
15. Although there are exceptions to said rule.
On August 31. Since Philtread indisputably failed to
file any such motion within said period.
Petitioners duly appealed the decision of the Labor Arbiter to the NLRC. stressed that the complaint was
one for unfair labor practice precipitated by the unjust and unreasonable refusal of Philtread to reemploy them. petitioners concluded that the NLRC had jurisdiction over the
case. Upon discovery of this development. Philtread's counsel of record. They posit that since the bailiff's return indicated May 5. Borreta filed with the NLRC on May 20. Philtread opted not to
interpose an appeal despite the Labor Arbiter's failure to rule squarely on the question of
jurisdiction. volunteered for.
defined the jurisdiction of the voluntary arbitrator. grievances shall be subject to negotiation. They shall establish a machinery for the
adjustment and resolution of grievances arising from the interpretation or implementation of their
Collective Bargaining Agreement and those arising from the interpretation or enforcement of
company personnel policies.
within thirty (30) calendar days after the submission of the case by the parties for decision without
extension. even in the absence of stenographic notes. To their mind. Philtread's refusal to re-employ them was
tantamount to a violation of the re-employment clause in the 1983 CBA which was also
substantially reproduced in the 1986 CBA.
whether agricultural or non-agricultural:
1. Grievance machinery.000.:
Art. as amended. Cases involving household services. Medicare and maternity benefits. When the
issue concerns an interpretation or implementation of the CBA. Unfair labor practice cases.
4. Article 260 of the Labor Code on grievance machinery and voluntary arbitrator states
that "(t)he parties to a Collective Bargaining Agreement shall include therein provisions that will
ensure the mutual observance of its terms and conditions.
notwithstanding Philtread's claim that the real issue is the interpretation of the CBA provision on
re-employment. As a result.
Under the above provisions then prevailing.
We note that at the time petitioners filed their complaint for unfair labor practice. Except claims for Employees Compensation. rates of pay." It is further provided in said article that the parties to a CBA shall
name or designate their respective representatives to the grievance machinery and if the grievance
is not settled in that level. as erroneously contended by Philtread. the following cases involving all workers. — Whenever a grievance arises from the interpretation or
implementation of a collective agreement.
. If accompanied with a claim for reinstatement. then pursuant to
the Sanyodoctrine. damages and
attorney's fees on December 5. amending several provisions of the Labor Code. Canizares. 12 or the so-called "Herrera-Veloso Amendments. one cannot immediately jump to
the conclusion that jurisdiction is with the voluntary arbitrator. Claims for actual. 262. the rule adverted to
is misapplied for it is actually the Labor Arbiter and the NLRC which possess jurisdiction over
petitioners' complaint and NOT the voluntary arbitrator. We are of
the opinion that these facts do not come within the phrase "grievances arising from the
interpretation or implementation of (their) Collective Bargaining Agreement and those arising from
the interpretation or enforcement of company personnel policies.
Respondents' posture is too simplistic and finds no support in law or in jurisprudence. unless the parties agree to
submit them to voluntary arbitration.
On March 21.
2. At the time. Hence. social security. it shall automatically be referred to voluntary arbitrators (or panel of
voluntary arbitrators) designated in advance by the parties.
5. We hold that the Labor Arbiter and not the Grievance Machinery
provided for in the CBA has the jurisdiction to hear and decide the complaints of the private
respondents. 217. Where there is no collective agreement and in cases where the grievance procedure as
provided herein does not apply. Jurisdiction of Labor Arbiters and the Commission. 217. hours of work and other terms and conditions of employment. 261.
The Court. only disputes involving the union and the
company shall be referred to the grievance machinery or voluntary arbitrators. 248. While it appears that the dismissal of the private respondents was made upon the
recommendation of PSSLU pursuant to the union security clause provided in the CBA. those cases that workers may file involving
wages. 1989. exemplary and other forms of damages arising from the employeremployee relations. however. There is an equally important need
to inquire further if the disputants involved are the union and the employer. Republic Act 6715.particular subject matter indeed lacks jurisdiction over the same. Cases arising from any violation of Article 265 of this Code. including those based on non-payment or underpayment of wages. we observe that there is a confusion in the minds of both Philtread and the NLRC
with respect to the proper jurisdiction of the voluntary arbitrator. Unfair labor practice cases.
4. All money claims of workers. any violation of the CBA was unqualifiedly
treated as ULP of the employer falling within the competence of the Labor Arbiter to hear and
decide. It need not be mentioned that the
parties to a CBA are the union and the company. medicare and maternity
benefits. then the same necessarily falls within the competence of the
voluntary arbitrator pursuant to Article 261 of the Labor Code. arising from employer-employee relations.
In this regard.00) regardless of
whether accompanied with a claim for reinstatement. Cases arising from any violation of Article 264 of this Code.
2. Unfair labor practices of employers. moral.
took effect. viz. however. conciliation or
arbitration as provided elsewhere in this Code. That termination
disputes shall be governed by Article 278 of this Code. including questions involving the
legality of strikes and lockouts. separation pay and other benefits provided by law or appropriate
whether agricultural or non-agricultural:
1. — (a) Except as otherwise provided
under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide. including the respective jurisdictions of
the Labor Arbiter. (a) The Labor Arbiters shall have the
original and exclusive jurisdiction to hear and decide within thirty (30) working days after
submission of the case by the parties for decision.
other claims. the governing provision of the Labor Code with respect to
the jurisdiction of the Labor Arbiter and the NLRC was Article 217 which states:
Art. otherwise. the following cases involving all workers." the jurisdiction of which
pertains to the Grievance Machinery or thereafter. including questions involving the
legality of strikes and lockouts. which in
this case is the re-employment clause. A more important question arises: If the
voluntary arbitrator could not have assumed jurisdiction over the case. to a voluntary arbitrator or panel of voluntary
arbitrators. however. the NLRC and the voluntary arbitrator. it is not the voluntary arbitrator who can take cognizance of the complaint. did the Labor Arbiter and
the NLRC validly acquire jurisdiction when both of them entertained the complaint?
A brief review of relevant statutory provisions is in order. To this effect was the ruling of the Court in Sanyo
Philippines Workers Union-PSSLU v. 11 where we clarified the jurisdiction of the voluntary
arbitrator in this manner:
In the instant case. They appear to share the view
that once the question involved is an interpretation or implementation of CBA provisions. Thus:
Articles 261 and 262.
overtime compensation. Jurisdiction of Labor Arbiters and the Commission. In this case. Voluntary arbitration. except claims for employees' compensation. including those of persons in domestic or
household service. including disciplinary actions imposed on members of
the bargaining unit. the present jurisdiction of the
Labor Arbiter and the NLRC is as follows:
Art. involving an amount exceeding five thousand pesos (P5. Social Security.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Arbiters. hours of work and other terms and conditions of
employment. one can understand why petitioners lodged their
complaint for ULP with the Labor Arbiter. (Emphasis supplied)
Since the contending parties in the instant case are not the union and Philtread. — It shall be unlawful for an employer to commit any
of the following unfair labor practice:
xxx xxx xxx
(i) To violate a collective bargaining agreement. and
voluntary arbitrator cannot assume jurisdiction. the employer and the bargaining representative shall meet to adjust the
grievance. 1988. does not write finis to the discussion. — All grievances referred to in the immediately preceding Article
which are not settled through the grievance procedure provided in the collective agreement shall
be referred to voluntary arbitration prescribed in said agreement: Provided.
3. Termination disputes. and
5. on the other hand. Those that workers may file involving wages.
13 we held:
Republic Act No. 6715. 261. The Court dismissed
the petition in its Decision dated June 29. thus:
It now appears that at the time this case was decided the lower court had jurisdiction over
Velasco's complaint although at the time it was filed said court was not clothed with such
jurisdiction." Hence. We fail to perceive in the language of E.
while it would make out a case for ULP. 1691 and
Presidential Decree No. still. 111. Court of Appeals. Dela Cerna. Thus. namely: (1) gross violation of the CBA. — The Voluntary
Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and
decide all unresolved grievances arising from the interpretation or implementation of the
Collective Bargaining Agreement and those arising from the interpretation or enforcement of
company personnel policies referred to in the immediately preceding article. since Article 217 of the Labor Code.
With the Briad ruling in place. however. We adopt instead the more recent case of Erectors. Laws should only be applied prospectively unless the legislative
intent to give them retroactive effect is expressly declared or is necessarily implied from the
(Note that under par 6. No. as well as the economic provision violated. amended Article 217 of the Labor Code to widen the worker's access to the
government for redress of grievances by giving the Regional Directors and Labor Arbiters
. It ruled that the enactment of E. challenged the jurisdiction of the
Regional Director of the Department of Labor and Employment over cases involving workers'
money claims. In Briad. Thus. For purposes of this article. upon agreement of the parties. we declared that it can be applied retroactively
to pending cases. the divestment affected pending litigations. vs. 262.S. divesting the labor arbiter of jurisdiction) partake of
the nature of curative statutes. Furthermore. without which the complaint would be
dismissible. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators.
In Garcia v. There is. inBriad Agro Development Corporation v.
reiterated that PD No. do not constitute gross violation of the CBA for purposes of lodging jurisdiction with the
Labor Arbiter and the NLRC. to our
E.) 6715 which divested the Regional Directors of the power to
hear money claims. the Court explained its position as follows:
The rule is that jurisdiction over the subject matter is determined by the law in force at the time of
the commencement of the action. Although evidentiary matters are not required (and even discouraged)
to be alleged in complaint. 797 an intention to give it retroactive
effect. shall no longer be treated as unfair labor practice but as grievances under the Collective
Bargaining Agreement. we categorically held that amendments relative to the jurisdiction of labor
arbiters (under Presidential Decree No. Inc. AND (2) the violation pertains to the
economic provisions of the CBA.14 where we refused to give retroactive application to Executive Order
No. According violations
of a Collective Bargaining Agreement.
amending Article 217 of the Labor Code. in view of the
promulgation of Republic Act (R. given the foregoing considerations. the Court applied the exception rather than the general rule. No. 111 and R. . No. the implication is that the qualified jurisdiction of the Labor Arbiter
and the NLRC should have been applied when the ULP complaint was still pending.
With the amendments introduced by RA 6715. the Court. the Court holds that the rationale behind it does not
apply to the present case. 797 which created the Philippine Overseas Employment Administration (POEA)." At the time of the filing of the complaint. regional directors have
jurisdiction). acknowledged the retrospective characteristics of Executive Order
No. for a ULP case to be cognizable by the Labor Arbiter. 797. at the time private respondent filed his
complaint against the petitioner. the prevailing laws were Presidential Decree No. except those which are gross in
character. It also affected this particular case. 1004). under present law. It bears emphasis that the Court accorded E. No. 797 did not divest the Labor Arbiter's authority to hear and decide the case filed by private
respondent prior to its effectivity.
The Decision of this case. shall no longer be
treated as unfair labor practice and shall be resolved as as grievances under the Collective
Bargaining Agreement. v. Jurisdiction over other labor disputes.(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
The case of Briad Agro Development Corp. (Emphasis supplied)
Art. 6715 a
retroactive application because as curative statutes. Dela Cerna cited by the petitioner is not applicable to
the case at bar. and the NLRC to exercise
its appellate jurisdiction. cured the Regional Director's lack of jurisdiction by giving
the Labor Arbiter and the Regional Director concurrent jurisdiction over all cases involving money
claims. 111 and Article 217. the allegations in the complaint should show prima facie the concurrence
of two things. The Court's appreciation of petitioners' cause of action is that.
while that of the voluntary arbitrator is defined in this wise:
Art.A. However. shall also hear and decide all other labor disputes
including unfair labor practices and bargaining deadlocks. vested in the Labor Arbiters exclusive jurisdiction over such cases. involving employer-employee relations arising out of or by virtue of any law or contract
involving Filipino workers for overseas employment.
(c) Cases arising from the interpretation or implementation of collective bargaining agreements
and those arising from the interpretation or enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements. Under said
law. Herein lies the problem. the Labor Arbiter had clear
jurisdiction over the same. the Court already made its pronouncement that RA
6715 is in the nature of a curative statute.
In several instances prior to the instant case. Martinez. where the claim does not exceed P5. Executive Order No. . except those which are gross in character. and L. on November 9.O. . they fall under the exceptions to the rule on
prospectivity of laws. in a Resolution. in Calderon v. 1982.00. like Civil
Case No. As in the instant case. as amended.
Thus. On March 31.
Garcia has since been uniformly applied in subsequent cases. the law in force at the time of the filing of the
complaint. This means that
petitioners should have been required to show in their complaint the gross nature of the CBA
violation. it is even doubtful if the CBA
provision on re-employment fits into the accepted notion of an economic provision of the CBA. 1367.O. National
Labor Relations Commission.O. it can be gleaned that the Labor Arbiter still retains
jurisdiction over ULP cases. Camus Engineering Corp. gross violations of Collective Bargaining
Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of
such agreement. 111. 1367 [is] curative and retrospective in nature. when this new law divested Regional Directors of the power to
hear money claims. . In this case.
Briad Agro Development Corp. 111.M. No. POEA was vested with "original and exclusive jurisdiction over all cases. Thus. As such. It is further stated that "gross violations of Collective Bargaining Agreement
shall mean flagrant and/or malicious refusal to comply with the economic provisions of such
agreement." 15 which jurisdiction was originally conferred
upon the Labor Arbiter.O. including money
claims.O. a significant change: The unqualified jurisdiction
conferred upon the Labor Arbiter prior to the amendment by RA 6715 has been narrowed down so
that "violations of a Collective Bargaining Agreement. like its predecessors. 9657 (See 82 C. the Labor Arbiter's assumption of jurisdiction therein
was likewise questioned in view of the subsequent enactment of E.
E. In ruling against the
retroactive application of the law. reconsidered and set aside its
June 29 Decision and referred the case to the Labor Arbiter for proper proceedings.
has retroactive application.O.
Unsubstantiated conclusions of bad faith and unjustified refusal to re-employ petitioners. finally.J. 1989. sufficient details supporting the conclusion of bad faith and unjust
refusal to re-employ petitioners must be indicated. — The Voluntary Arbitrator or panel of Voluntary
Arbitrators.A. The lack of jurisdiction was cured by the issuance of the amendatory decree which is in
the nature of a curative statute with retrospective application to a pending proceeding. . may the Briad doctrine be applied to the instant case and
cause its dismissal for want of jurisdiction of the Labor Arbiter and the NLRC?
Upon a careful and meticulous study of Briad. however. 1989. . 1391 which vested the Regional Offices of the Ministry of Labor and the
Labor Arbiters with "original and exclusive jurisdiction over all cases involving employer-employee
relations including money claims arising out of any law or contracts involving Filipino workers for
overseas employment. the same falls short of the
special requirements necessary to make it cognizable by the Labor Arbiter and the NLRC.
informing her that
she was being dismissed due to loss of trust and confidence based on alleged mismanagement and
misappropriation of funds. In other words. Gutierrez supposedly declared that he was exclusively representing Philtread. why then did he use the firm's name. No. however. as General Manager is an employee whom the respondent company reposed its trust
and confidence. the Labor Arbiter rendered its Decision dismissing the case for want of
jurisdiction and/or lack of merit. created a scenario
where the Labor Arbiters and the Regional Directors of the Department of Labor and Employment
(DOLE) had overlapping jurisdiction over money claims. . his receipt of the adverse
resolution should have alerted him of the adverse consequences which might follow if the same
were not acted upon promptly. as amended by then Executive Order No. respondent's position paper). We do not see anything in the act of reapportioning jurisdiction curative of any defect in the law as it stood prior to the enactment of RA
6715. and Managing Director of PCIB. a further elucidation on the matter would be an exercise in
futility. Hence. Eventually. Borreta to have at least
advised his former partner of the receipt of the resolution. 18 To our mind. This Court. in the aforementioned notice to the NLRC? Moreover. 17 This.
October 2. while its resolution dated April 15.Europe -. especially since
the 1987 Constitution adheres to the preferential use of voluntary modes of dispute
settlement.O. R. Borreta. when she received a letter from Remegio David -. 1992. Like in Erectors. and Leogardo were really dissolved.O. instruments or acts of public
authorities which would otherwise be void for want of conformity with certain existing legal
REINSTATED for immediate execution. 16 Our previous decisions on whether to give it
retroactive application or not depended to a great extent on what amended provisions were under
consideration. although by a Philippine
Corporation. Gutierrez. it follows that the law that govern their relationship is the law of the place where the
employment was executed and her place of work or assignment. 1993. the contention that it was Atty. the Court deemed it a rectification of such defect. Gutierrez. Borreta take fifteen days
to file his Manifestation and inform the NLRC of the "improper" service of the resolution to him?
Why did he not object immediately to the service by the bailiff? Considering that Atty. 6715 was passed and delineated the jurisdiction of the Labor Arbiters and
Regional Directors. E. What RA 6715 merely did was to re-apportion the jurisdiction over ULP cases by
conferring exclusive jurisdiction over such ULP cases that do not involve gross violation of a CBA's
economic provision upon the voluntary arbitrator.00. therefore. The Court. Gutierrez declared during the Labor Arbiter's proceedings that he was
exclusively representing Philtread. Since complainant was hired and assigned in a foreign land. Actually. Gutierrez cannot now blame the NLRC for serving its resolution at the
address of the firm still on record.A.
Assuming for the sake of argument that this Office has jurisdiction over this case. as well as interpretation
and enforcement of company personnel policies.
NATIONAL LABOR RELATIONS COMMISSION and EQUITABLE PCI-BANK. A curative statute is
enacted to cure defects in a prior law or to validate legal proceedings. On this premise. instead of the inherent defect in the law. There is here no overlapping of jurisdiction to speak of because
matters involving interpretation and implementation of CBA provisions. and April 7. Atty.
G. or he should have withdrawn the appearance of the
firm and entered his own appearance. Presumably. and its new address at
that. is not impressed. respondents*.3
. the National Labor Relations Commission (NLRC) affirmed the Labor Arbiter's Decision
and dismissed petitioner's appeal for lack of merit. must be applied retroactively. but looks incredulously at such superficial moves.
The same thing cannot be said of the case at bar. Under
Finally. This amendment. are lame excuses to cast doubt
on the propriety of service to Atty. it bears
The law at bar. filed by Atty. the conclusion that it
was curative in nature and.1 According to the Labor Arbiter:
It should be stressed at this juncture that the labor relations system in the Philippines has no extraterritorial jurisdiction. and sought the dismissal
of the complaint. It is well-settled doctrine that the basic
premise for dismissal on the ground of loss of confidence is that the employee concerned holds a
position of trust and confidence. are SET ASIDE. must be the rationale that prompted
the amendment. Commodore Condominium Arquiza corner M. The assailed resolutions of the NLRC dated
November 18. 1992. Similarly. the respondent company had strong reason to believe that the complainant was guilty
of the offense charged against her.
transpired at around that date. as what in fact happened here. 1988. (National Sugar Refineries Corporation vs.
SO ORDERED. 111 and R. still. No. Gutierrez. Hence. 2001. the preliminary conferences adverted to by Atty. . the instant case presents no
defect in the law requiring a remedy insofar as the jurisdiction of the Labor Arbiter and the
Voluntary Arbitrator is concerned. It must be noted that the complaint of petitioners was
filed on December 5. 1990.
Article 217 of the Labor Code. 1988.
Complainant. The Court view it as merely a matter of change in policy of the lawmakers. SIM. and (3) the aggregate money claim of the employee or househelper
does not exceed P5. 6715 are therefore curative statutes. Gutierrez and Leogardo had been dissolved. the instant petition is hereby GRANTED.
notwithstanding the fact that a different law is involved. petitioners. It is limited to the relationship between labor and capital within the
Philippines. Guerrero Streets. (2) the claimant. she was promoted to Manager
We do not find any reason why the Court should not apply the above ruling to the case at bar. In Briad.concurrent jurisdiction over cases involving money claims. 797. J. E. we uphold the jurisdiction of the Labor Arbiter which attached to this case
at the time of its filing on December 5. if the law
firm of Borreta. in case the dissolution took place midstream. alleging that she
was initially employed by Equitable PCI-Bank (respondent) in 1990 as Italian Remittance Marketing
Consultant to the Frankfurt Representative Office. she held a position of trust. 2007
where Atty. this case should be dismissed for want of jurisdiction. this is not the first time that the
Court refused to apply RA 6715 retroactively. the
underlying reason for applying RA 6715 retroactively was the fact that prior to its amendment. as well as the factual circumstances to which they were made to apply. indicating therein that
the counsel for respondent (Philtread) was "Borreta.:
Corazon Sim (petitioner) filed a case for illegal dismissal with the Labor Arbiter. European Head of PCIBank.
Respondent denied any employer-employee relationship between them.A. .the Senior
As can be gleaned from the foregoing. is surprised to discover that the record bears a
Notice of Change of Address dated March 12. have always been determined by the Voluntary
Arbitrator even prior to RA 6715." If. why did Atty. indeed.
does not seek reinstatement. created a
situation where the jurisdiction of the Regional Directors and the Labor Arbiters overlapped. no longer being employed. Borreta were once partners in their law firm. this Office is
inclined to rule in favor of the respondent. 111. All other cases within the exclusive and original jurisdiction of the
Labor Arbiter. Gutierrez and Leogardo" whose address could
be found at the "3rd Floor.R. 6715 further amended Article 217 by delineating their respective jurisdictions.
On September 3. As for Atty. all ULP cases were exclusively within the jurisdiction of
the Labor Arbiter.A. is not a curative statute. This situation was viewed as a defect in the
law so that when RA No. the Italian law
allegedly provides severance pay which was applied and extended to herein complainant (Annex
and Atty. it behooves Atty. until September 1999. Borreta.)
In this case.
Manila. or househelper under the Code. these excuses cannot camouflage the clever ploy
of Philtread's counsel to earn a last chance to move for reconsideration. however. it was incumbent upon him not to
have used the firm's name in the first place. Ermita. As a lawyer.2
On appeal. As a
remedy. the Regional Director has exclusive original jurisdiction over cases involving money
claims provided: (1) the claim is presented by an employer or person employed in domestic or
WHEREFORE. 6715. By failing to
exercise either option. Gutierrez who exclusively represented Philtread and that
the law firm of Borreta. NLRC. 286 SCRA 478. Atty.
The pivotal question that needs to be resolved is whether or not a prior motion for reconsideration
is indispensable for the filing of a petition for certiorari under Rule 65 of the Rules of Court with the
other claims. A company's resort to acts of self-defense
would be more easily justified. and
(i) where the issue raised is one purely of law or public interest is involved. loss of trust and confidence is a valid ground for her dismissal. failed to qualify her case as among the few exceptions. countered that at the time she
withdrew said amount.16
The Court notes. Except claims for Employees Compensation. she gives up some of the rigid guaranties available to ordinary workers.
Infractions which if committed by others would be overlooked or condoned or penalties mitigated
may be visited with more severe disciplinary action. if in the affirmative. compelling. or any plain. committed a
breach of trust and confidence justifying her dismissal.
Petitioner filed a motion for reconsideration but it was nonetheless denied by the CA per
Resolution dated February 26. whether petitioner. The National Labor Relations Commission decided a question of jurisdiction heretofore not yet
determined by the Court and decided the same in a manner not in accord with law when it ruled
that it had no jurisdiction over a labor dispute between a Philippine corporation and its employee
which it assigned to work for a foreign land. under the circumstances. More so since petitioner
failed to show any error on the part of the Labor Arbiter and the NLRC in ruling that she was
dismissed for cause. involving an amount of exceeding five thousand pesos (P5. Termination disputes. never demandable as a matter
of right. If accompanied with a claim for reinstatement.15
[w]hen an employee accepts a promotion to a managerial position or to an office requiring full
trust and confidence. – (a) Except as otherwise provided
under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide. Hence. To dispense with the requirement of filing a
motion for reconsideration. a motion for reconsideration would be useless.
Petitioner argues that filing a motion for reconsideration with the NLRC would be merely an
exercise in futility and useless. Claims for actual. The issues raised in this case
are mixed questions of fact and law. Cases arising from any violation of Article 264 of this Code.13 The Court will not deviate from said doctrine without any clear showing that
the findings of the Labor Arbiter. These are mixed questions of fact and law
Petitioner. as where the court a quo has no jurisdiction. hence. exemplary and other forms of damages arising from the employeremployee relations.
rates of pay. also questions the NLRC's ruling affirming the Labor
Arbiter's conclusion that she was validly dismissed by respondent. the Court of Appeals correctly dismissed the
4. petitioner went to the Court of Appeals
(CA) via a petition for certiorari under Rule 65 of the Rules of Court. do not fall within the exception from the filing of a motion for reconsideration. even in the absence of stenographic notes. the following cases involving all workers.
whether agricultural or non-agricultural:
1. But it is not for petitioner to determine whether it is so.
3. In fact.000. Thus. Court of Appeals:
It must be emphasized that a writ of certiorari is a prerogative writ. Medicare and maternity benefits. which
was denied by respondent. never issued except in the exercise of judicial discretion. arising from employer-employee relations.9
There are. and adequate remedy in the ordinary course of law. and valid reason for
doing so.Petitioner may not arrogate to himself the determination of whether a
motion for reconsideration is necessary or not. and there is a question of law where the doubt or
difference arises as to what the law is on a certain state of facts.
Petitioner does not deny having withdrawn the amount of P3. as such.
6. 2003. the CA4 dismissed the petition due to petitioner's nonfiling of a motion for reconsideration with the NLRC. It was only in her motion for reconsideration of the CA's
resolution of dismissal and in the petition filed in this case that petitioner justified her non-filing of
a motion for reconsideration. which petitioner failed to do. As stressed
in Cervantes v.
Petitioner. The legality of petitioner's
dismissal hinges on the question of whether there was an employer-employee relationship.
The rule is that the Court is bound by the findings of facts of the Labor Arbiter or the NLRC. Unfair labor practice cases.000. petitioner must show a concrete. 217. the radio program was already off the air. speedy. Thus. moral. the remedy of filing a special civil action for certiorari is available only when there is
no appeal. an exception to
ART. with regard to the issue on jurisdiction. A reading of the petition filed with the CA shows otherwise. are bereft of sufficient substantiation. of course. the present recourse under Rule 45 of the Rules of Court.
Under Rule 65. 14 The mere
existence of a basis for believing that a managerial employee has breached the trust of the
employer would suffice for his/her dismissal. Social Security. however. or are the same as those raised and passed upon in the lower court.8 This is to give
the lower court the opportunity to correct itself. unless it
is shown that grave abuse of discretion or lack or excess of jurisdiction has been committed by said
quasi-judicial bodies.Without filing a motion for reconsideration with the NLRC. the CA was not in error when it dismissed the petition. however.
2. he who seeks a writ
of certiorari must apply for it only in the manner and strictly in accordance with the provisions of
the law and the Rules.
(c) where there is an urgent necessity for the resolution of the question and any further delay
would prejudice the interests of the Government or of the petitioner or the subject matter of the
action is perishable. Respondent.000. It was wrong for the Labor Arbiter to
rule that "labor relations system in the Philippines has no extra-territorial jurisdiction.
(g) where the proceedings in the lower court are a nullity for lack of due process."17
Article 217 of the Labor Code provides for the jurisdiction of the Labor Arbiter and the National
Labor Relations Commission.
(h) where the proceeding was ex parte or in which the petitioner had no opportunity to object.
(f) where. including questions involving the
legality of strikes and lockouts. to wit:
(a) where the order is a patent nullity. hours of work and other terms and conditions of employment. relief from an order of arrest is urgent and the granting of such relief
by the trial court is improbable.
Petitioner alleges that:
I. 2002.11 (Emphasis supplied)
Petitioner also contends that the issue at bench is purely a question of law.
within thirty (30) calendar days after the submission of the case by the parties for decision without
extension. including those of persons in domestic or
household service.00) regardless of
whether accompanied with a claim for reinstatement. those cases that workers may file involving wage. The Court of Appeals departed from the accepted and usual concepts of remedial law when it
ruled that the petitioner should have first filed a Motion for Reconsideration with the National
Labor Relations Commission.
Hence. There is a question of fact when doubt or difference arises as
to the truth or falsehood of the alleged facts. viz.00 lire from the bank's
account. a palpable error in the Labor Arbiter's disposition of the case. and.
In a Resolution dated October 29. the filing of
which is an indispensable condition to the filing of a special civil action for certiorari.
(d) where. however. which was
affirmed by the NLRC. exceptions to the foregoing rule. as affirmed by the NLRC.
(e) where petitioner was deprived of due process and there is extreme urgency for relief. Respondent is a managerial
employee. aside from questioning the ruling of the NLRC sustaining the Labor Arbiter's view that it
does not have any jurisdiction over the case. the Court notes
that the petition filed before the CA failed to allege any reason why a motion for reconsideration
was dispensed with by petitioner. Jurisdiction of Labor Arbiters and the Commission. 7 A "plain" and
"adequate remedy" is a motion for reconsideration of the assailed order or resolution. What petitioner submits is that she used said amount for the Radio Pilipinas sa
Roma radio program of the company.
. in a criminal case.
(b) where the questions raised in the certiorari proceedings have been duly raised and passed upon
by the lower court. indeed.
The appellate court narrated the facts as follows:
Petitioners Gerong and [Editha] Broqueza (defendants below) are employees of Hongkong and
Shanghai Banking Corporation (HSBC).R.
the claims arising out of an employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for actual. 1991. or the Migrant Workers and Overseas
Filipinos Act of 1995.8
Gerong and the spouses Broqueza filed a joint appeal of the MeTC’s decision before the RTC. 1990. 52400. among whom are overseas Filipino workers. all Filipino workers enjoy the protective mantle of
Philippine labor and social legislation. security of tenure. exemplary
and other forms of damages.
3. Ltd. petitioner Gerong applied and was granted an
emergency loan in the amount of Php35.00 each as reasonable attorney’s fees. Retirement Trust
Fund. moral.) Petitioner. collective bargaining. contract stipulations to the contrary notwithstanding. On 19 September 1996.:
G. The appellate court reversed and
set aside the Decision3 of Branch 139 of the Regional Trial Court of Makati City (RTC) in Civil Case
No. 1987 Constitution]. Thus. Cabansag. The
employees then filed an illegal dismissal case before the National Labor Relations Commission
(NLRC) against HSBC. The MeTC ruled
that the nature of HSBCL-SRP’s demands for payment is civil and has no connection to the ongoing
. vs. The legality or illegality of such termination is now pending before this
appellate Court in CA G. until the amount is fully paid. ensure equal work opportunities regardless of sex. Cost of suit. On December 12. J.
SO ORDERED. the loans secured by their future retirement
benefits to which they are no longer entitled are reduced to unsecured and pure civil obligations.000. 52911. — Notwithstanding any provision of law to the contrary.740. including termination disputes involving all
workers. Section 10 of Republic Act (R. premises considered and in view of the foregoing.
promote full employment." 21 (Emphasis supplied)
In any event.
Demands to pay the respective obligations were made upon petitioners. These loans are paid through
automatic salary deduction.
Because of their dismissal. but they failed to pay. the Labor
Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive
jurisdiction to hear and decide.
Court finds no compelling reason to relax the rule on the filing of a motion for reconsideration prior
to the filing of a petition for certiorari.
The dispositive portion of the MeTC’s decision reads:
WHEREFORE. In Civil Case No. the petition is DENIED. 52400 for Recovery of a Sum of Money. and just and humane
conditions of work [Article 3 of the Labor Code of the Philippines. since the CA did not commit any error in dismissing the petition before it for failure to
file a prior motion for reconsideration with the NLRC. and considering that the Labor Arbiter and
the NLRC's factual findings as regards the validity of petitioner's dismissal are accorded great
weight and respect and even finality when the same are supported by substantial evidence. Ltd. subject to the rules and procedures of the NLRC. it is clear that labor arbiters have original and exclusive jurisdiction over
claims arising from employer-employee relations. Both suits were civil actions for recovery and
collection of sums of money. the MeTC promulgated its Decision7 in favor of HSBCL-SRP.
As unsecured and pure obligations. while the spouses Broqueza’s case was
docketed as Civil Case No.(b) The commission shall have exclusive appellate jurisdiction over all cases decided by Labor
G. 8042 19 provides that
the Labor Arbiters of the NLRC shall have the original and exclusive jurisdiction to hear and decide
all claims arising out of employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for actual. The HSBCL-SRP is a
retirement plan established by HSBC through its Board of Trustees for the benefit of the
HONGKONG AND SHANGHAI BANKING CORP. The RTC’s
decision affirmed the Decision5 dated 28 December 1999 of Branch 61 of the Metropolitan Trial
Court (MeTC) of Makati City in Civil Case No. the loans are immediately demandable. Custodio.
The Metropolitan Trial Court’s Ruling
On 28 December 1999. Staff Retirement Plan (HSBCL-SRP) for recovery of sum of money. she again applied and was granted an appliance loan in the
amount of Php24. The appellate court granted the petition filed by
Fe Gerong (Gerong) and Spouses Bienvenido and Editha Broqueza (spouses Broqueza) and
dismissed the consolidated complaints filed by Hongkong and Shanghai Banking Corporation. National Labor Relations Commission. plaintiff below). STAFF RETIREMENT PLAN. petitioners were not able to pay the monthly amortizations of their
respective loans. This ruling is likewise rendered imperative by Article 17 of
the Civil Code which states that laws "which have for their object public order.
CARPIO.20 In Philippine National Bank v. Article XIII.R.A. Section 62 of the Omnibus Rules and Regulations Implementing R. 178610
November 17. public policy and
good customs shall not be rendered ineffective by laws or judgments promulgated.
Under these provisions.
On October 1. et al.
WHEREFORE. Gerong and Editha Broqueza’s termination from employment resulted in the loss of
continued benefits under their retirement plans. acting through its Board of Trustees and represented by Alejandro L. Inc. the Court finds that the plaintiff
was able to prove by a preponderance of evidence the existence and immediate demandability of
the defendants’ loan obligations as judgment is hereby rendered in favor of the plaintiff and
against the defendants in both cases.
the Court pronounced:
x x x Whether employed locally or overseas. 00-787 dated 11 December 2000. No. 56797.12 at six
percent per annum from the time of the filing of these cases. and
regulate the relations between workers and employers. This
pronouncement is in keeping with the basic public policy of the State to afford protection to labor. CV No.) No.R. Respondents. a labor dispute arose between HSBC and its employees.
2. 52911 against Gerong. race or creed. SP No. et al. 62685. to pay the amount of Php25. ordering the latter:
HSBCL-SRP. 52400 against the spouses Broqueza on 31 July 1996.
The Regional Trial Court’s Ruling
The RTC initially denied the joint appeal because of the belated filing of Gerong and the spouses
Broqueza’s memorandum. filed
Civil Case No. or by
determination or conventions agreed upon in a foreign country. as well as its Order 4 dated 5 September 2000. Staff Retirement Plan (HSBCL-SRP. within ninety (90) calendar days after the filing of the complaint. entitledHongkong Shanghai Banking Corp. To pay the amount of Php20. See also Section 18. respondent HSBCL-SRP considered the accounts of petitioners delinquent. No. 00-786.780. The RTC later reconsidered the order of denial and resolved the issues
in the interest of justice. Money Claims.
On 11 December 2000.
SO ORDERED. to pay the amount of Php116. They are also members of respondent Hongkong Shanghai
Banking Corporation. exemplary
and other forms of damages. Thus.R.
SPOUSES BIENVENIDO AND EDITHA BROQUEZA. For the State assures the basic rights of all
workers to self-organization.000. 1993.A. Majority of HSBC’s
employees were terminated. HSBCLSRP filed Civil Case No. 8042. among whom are petitioners Editha Broqueza and Fe Gerong.
Meanwhile [in 1993].000. LTD.00 on June 2. 178610 is a petition for review1 assailing the Decision2 promulgated on 30 March 2006 by
the Court of Appeals (CA) in CA-G.
Moreover. the RTC affirmed the MeTC’s decision in toto. On the other hand. moral.
Costs against petitioner. petitioner [Editha] Broqueza obtained a car loan in the amount of
Php175. 00-787..00 at six percent interest per annum
from the time of demand and in Civil Case No.18 provides:
SECTION 10. No.
Gerong’s case was docketed Civil Case No.00. Article II and
can immediately demand payment of the loans at anytime because the obligation to pay has no
period. ROSE ANNA G. MA.
In their Answer. 1179.
The Ruling of the Court of Appeals
On 30 March 2006. 1996.
I/WE hereby expressly consent to any extensions or renewals hereof for a portion or whole of the
principal without notice to the other(s).
The Promissory Notes uniformly provide:
P_____ Makati. Respondent. In a Resolution 13 of this Court dated 10 September
HSBCL-SRP enumerated the following grounds to support its Petition:
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to
annul and set aside the Decision1 and the Resolution2 of the Court of Appeals (CA) in CA-G. no cause of action accrued in favor of HSBCL-SRP. Editha
Broqueza authorized HSBCL-SRP to make deductions from her payroll until her loans are fully paid. the payroll deduction is merely a convenient mode of
payment and not the sole source of payment for the loans. The fact that
HSBCL-SRP was content with the prior monthly check-off from Editha Broqueza’s salary is of no
moment. SP No. The loan obligations are considered pure
obligations. payable monthly. CABALQUINTO. the spouses Broqueza admitted that prior to Editha Broqueza’s dismissal from
HSBC in December 1993.
Gerong and the spouses Broqueza then filed a Petition for Review under Rule 42 before the CA. and
or upon a past event unknown to the parties. a labor organization certified as the sole and
exclusive certified as the sole and exclusive bargaining representative of the flight attendants. STEHMEIER. 86813. Part A of the PAL-FASAP CBA. They are members of the Flight Attendants and
Stewards Association of the Philippines (FASAP). this Court treated the manifestation as a motion to withdraw the petition against Gerong. LORNA B." 17
Petitioners were employed as female flight attendants of respondent Philippine Airlines (PAL) on
different dates prior to November 22. Metro Manila. increase the interest rate stipulated in this
note at any time depending on prevailing conditions. CRESENCIO.R. SANTIAGO. HSBCL-SRP never agreed that the loans
will be paid only through salary deductions. 2001. The Court of Appeals has departed from the accepted and usual course of judicial proceedings in
reversing the decision of the Regional Trial Court and the Metropolitan Trial Court. The dispositive portion of the appellate
court’s Decision reads as follows:
WHEREFORE. Once Editha Broqueza defaulted in her monthly payment.
granted the motion.
SO ORDERED. MARY CHRISTINE A.
I/WE agree that the PLAN may. the fulfillment of which are demandable at once. The Court of Appeals has decided a question of substance in a way not in accord with law and
applicable decisions of this Honorable Court.)
We affirm the findings of the MeTC and the RTC that there is no date of payment indicated in the
Promissory Notes.M. on or
before until fully paid the sum of PESOS ___ (P___) Philippine Currency without discount. are AFFIRMED. VILLARETE. Moreover. HSBCL-SRP made a demand to
enforce a pure obligation.
Section 144.The RTC ruled that Gerong and Editha Broqueza’s termination from employment disqualified them
from availing of benefits under their retirement plans. the absence of a period within which to pay the
loan allows HSBCL-SRP to demand immediate payment. Costs against respondents. we apply the first paragraph of Article 1179 of the Civil Code:
HSBCL-SRP filed a motion for reconsideration which the CA denied for lack of merit in its
Resolution12promulgated on 19 June 2007. The Decision of the Court of Appeals in CA-G. is demandable at once. As such it should be enforced
through a separate civil action in the regular courts and not before the Labor Arbiter. I/WE _____ jointly and severally promise to pay to THE HSBC RETIREMENT
PLAN (hereinafter called the "PLAN") at its office in the Municipality of Makati.
Editha Broqueza. VICTA. We agree with the rulings of the MeTC and the RTC. No."16A definite amount is paid to HSBCL-SRP on a specific date. For the Cabin Attendants hired before 22 November 1996:
x x x.R. which HSBC collected
through payroll check-off. The RTC is correct in ruling that since the Promissory Notes do not contain a
period. TUGAS.R. J.
PERALTA. HSBCL-SRP has the right to demand immediate payment.
On 6 August 2007.
On July 11. provides that:
A. As a consequence. there is no longer any
security for the loans.
vs. as well as the decision of Branch 61 of
the Metropolitan Trial Court of Makati City in Civil Case No. I/WE jointly and severally agree to pay ten
percent (10%) of the amount due on this note (but in no case less than P200. and in such a case our liability shall remain joint and
the spouses Broqueza’s protestations.
stewards and pursers of respondent. HSBCL-SRP filed a manifestation withdrawing the petition against Gerong
because she already settled her obligations. MA. respondent and FASAP entered into a Collective Bargaining
Agreement3 incorporating the terms and conditions of their agreement for the years 2000 to 2005.00) as and for
attorney’s fees in addition to expenses and costs of suit. PULIDO.15
In ruling for HSBCL-SRP. Every obligation whose performance does not depend upon a future or uncertain event. 00-787. A new one is hereby
rendered DISMISSING the consolidated complaints for recovery of sum of money. M. 2009
PATRICIA HALAGUEÑA. upon written notice.
PHILIPPINE AIRLINES INCORPORATED. 172013
KATINDIG. and considered the case against Gerong closed and terminated. and other flight attendants
of PHILIPPINE AIRLINES. SP. the assailed Decision of the RTC is REVERSED and SET ASIDE. I/WE hereby jointly and severally waive our rights under the provisions
of Rule 39. her obligation to pay the loans will be suspended. The CA ruled that the HSBCL-SRP’s complaints for recovery of sum of money against
Gerong and the spouses Broqueza are premature as the loan obligations have not yet matured.
G. HSBCL-SRP has a legal right to demand immediate settlement of the unpaid
balance because of Gerong and Editha Broqueza’s continued default in payment and their failure to
provide new security for their loans. MARIANNE V. 62685
promulgated on 30 March 2006 is REVERSED and SET ASIDE. TERESITA P. NOEMI R. the CA rendered its Decision 10 which reversed the 11 December 2000 Decision
of the RTC. Compulsory Retirement
. Neither did HSBCL-SRP agree that if Editha Broqueza
ceases to be an employee of HSBC. with
interest from date hereof at the rate of Six per cent (6%) per annum. The spouses Broqueza’s obligation to pay HSBCL-SRP is a pure obligation. Moreover. The decision of Branch 139 of the
Regional Trial Court of Makati City in Civil Case No. (Emphasis supplied. we GRANT the petition. 14
The Court’s Ruling
The petition is meritorious.
In case of judicial execution. 52400 against the spouses Bienvenido
and Editha Broqueza. BERNADETTE A. ANGELITA L.
hereinafter referred to as PAL-FASAP CBA.
CYNTHIA A. defaulted in her monthly loan payment due to her dismissal. the spouses Broqueza have already incurred in default in paying the monthly
installments. she "religiously paid the loan amortizations. Article 1179 of the Civil Code
applies. ____ 19__
FOR VALUE RECEIVED. Petitioners. Section 12 of the Rules of Court.1avvphi1
In case collection is made by or through an attorney. the enforcement of a loan agreement involves "debtor-creditor relations founded on
contract and does not in any way concern employee relations.
Jurisdiction of the court is determined on the basis of the material allegations of the complaint and
the character of the relief prayed for irrespective of whether plaintiff is entitled to such relief. Petitioners have the statutory right to equal work and employment opportunities with men
under Article 3. x x x.
Petitioner filed a motion for reconsideration. Part A of the PAL-FASAP CBA. 2004. This demand was reiterated in a letter 5 by
petitioners' counsel addressed to respondent demanding the removal of gender discrimination
provisions in the coming re-negotiations of the PAL-FASAP CBA. 2006. filed a Petition for Certiorari and Prohibition with
Prayer for a Temporary Restraining Order and Writ of Preliminary Injunction 12 with the Court of
Appeals (CA) praying that the order of the RTC. be
annuled and set aside for having been issued without and/or with grave abuse of discretion
amounting to lack of jurisdiction. thereafter.
. basis for Philippine Airlines to distinguish. but must also implement measures towards
its elimination.9 enjoining the respondent for implementing Section 144. the thrust of the Petition is Sec. for an employer to discriminate against women employees with
respect to terms and conditions of employment solely on account of their sex under Article 135 of
the Labor Code as amended by Republic Act No. at the soonest possible time.
SO ORDERED. thus. Robert D. the RTC issued an Order 11 directing the issuance of a writ of preliminary
injunction enjoining the respondent or any of its agents and representatives from further
implementing Sec. not only must
condemn all forms of discrimination against women. The allegations in the Petition do not make out a labor dispute
arising from employer-employee relationship as none is shown to exist. Part A of the PAL-FASAP CBA pending the resolution of the case. 442.
the Labor Code. orders and processes it has so far issued therein are
ANNULED and SET ASIDE. the allegations in the petition for declaratory relief plainly show that petitioners'
cause of action is the annulment of Section 144. with the allegations in the Petition constituting
the bases for such relief sought. with the male cabin attendants of Philippine Airlines. within the specific context of this case. which is within the Court's competence.
The RTC issued a TRO on August 10. the instant petition assigning the following error:
THE COURT OF APPEALS' CONCLUSION THAT THE SUBJECT MATTER IS A LABOR DISPUTE OR
GRIEVANCE IS CONTRARY TO LAW AND JURISPRUDENCE. the RTC issued an Order 8 upholding its jurisdiction over the present case. Part A of the PAL-FASAP 20002005 CBA must be declared invalid and stricken down to the extent that it discriminates against
petitioner. Part A of the PAL-FASAP CBA. on October 8. President of FASAP submitted their 2004-2005 CBA
proposals6 and manifested their willingness to commence the collective bargaining negotiations
between the management and the association. Branch 147. within the specific context of this
case. dated August 31. It is unlawful.
On September 27. tribunal.
The petition is meritorious. on the other hand. a multilateral convention that
the Philippines ratified in 1981. and demanded for an
equal treatment with their male counterparts. Part A of the PAL-FASAP CBA. The RTC has no jurisdiction
over the subject matter of petitioners' petition for declaratory relief because the Voluntary
Arbitrator or panel of Voluntary Arbitrators have original and exclusive jurisdiction to hear and
decide all unresolved grievances arising from the interpretation or implementation of the CBA.
On July 12. nor does it involve a claim against
the respondent. much less lawful.
31. 04-886. against respondent for
the invalidity of Section 144. Finally. 144 of the subject CBA which is allegedly
discriminatory as it discriminates against female flight attendants. Section 114. 6725 or the Act Strengthening Prohibition on
Discrimination Against Women. all the proceedings. As the issue involved is constitutional in
character. the respondent court is by us declared to have NO JURISDICTION OVER THE CASE
BELOW and. Rather. including our courts. they are
compelled to retire at a lower age (fifty-five (55) relative to their male counterparts (sixty (60).
The CA rendered a Decision.
29. The pertinent
portion of the petition recites:
CAUSE OF ACTION
In a letter dated July 22. granting the respondent's petition. compulsory retirement shall be
fifty-five (55) for females and sixty (60) for males. and (2) the
petition be dismissed or the proceedings in this case be suspended.
37. The dispute concerns the terms and conditions
of petitioners' employment in PAL.
The respondent filed an omnibus motion 10 seeking reconsideration of the order overruling its
objection to the jurisdiction of the RTC the lifting of the TRO. 144. but also because it highlights the fact that twenty-three years after
the Philippine Senate ratified the CEDAW. docketed as Civil Case No. Section 114. petitioners filed a Special Civil Action for Declaratory Relief with Prayer for the
Issuance of Temporary Restraining Order and Writ of Preliminary Injunction 7 with the Regional Trial
Court (RTC) of Makati City. alleges that the labor tribunals have jurisdiction over the present
case. respondent. 14
In the case at bar. the labor arbiter or the National Labor Relations Commission (NLRC) has no jurisdiction
over the case and. The Government and its agents. this case seeks a declaration of the nullity of the questioned provision of
the CBA. There is no reasonable. This discrimination against Petitioners is likewise against the Convention on the Elimination of
All Forms of Discrimination Against Women (hereafter.
Article II. Part A of the PAL-FASAP CBA null and void. it has the power to decide issues of constitutionality or legality of the
provisions of Section 144. discrimination against women continues. 2004. which denied its objection to its jurisdiction. This case is a matter of public interest not only because of Philippine Airlines' violation of the
Constitution and existing laws. The Labor Code and. Accordingly.Subject to the grooming standards provisions of this Agreement. The RTC has the
power to adjudicate all controversies except those expressly witheld from the plenary powers of
the court. specifically their retirement age. consequently.
Part A of the PAL-FASAP CBA.
On July 29.
Petitioners submit that the RTC has jurisdiction in all civil actions in which the subject of the
litigation is incapable of pecuniary estimation and in all cases not within the exclusive jurisdiction of
any court. in violation of the Constitution. Petitioners have the constitutional right to fundamental equality with men under Section 14.
The main issue in this case is whether the RTC has jurisdiction over the petitioners' action
challenging the legality or constitutionality of the provisions on the compulsory retirement age
contained in the CBA between respondent PAL and FASAP. as the controversy partakes of a labor dispute. 2003. 2005. Presidential Decree No. The
RTC reasoned that:
In the instant case. Respondent court is ordered to DISMISS its Civil Case No.
On August 9. Part A of the PAL-FASAP 2000-20005 CBA on compulsory retirement from service
is invidiously discriminatory against and manifestly prejudicial to Petitioners because. required the parties to submit their respective memoranda.
respondent alleged that petitioners' prayer before this Court to resolve their petition for
declaratory relief on the merits is procedurally improper and baseless.4 petitioners and several female cabin crews manifested that the
aforementioned CBA provision on compulsory retirement is discriminatory. and ruled
WHEREFORE. even criminal. It further prayed that the (1)
petitioners' application for the issuance of a writ of preliminary injunction be denied.
Hence. 2004. and the CEDAW. 1987 of the Constitution and. 04-886.13 which was denied by the CA in its Resolution dated
March 7. 2004. Anduiza. person or body exercising judicial or quasi-judicial functions. This case is not directed
specifically against respondent arising from any act of the latter. the petitioners pray that judgment be rendered on the merits declaring
differentiate or classify cabin attendants on the basis of sex and thereby arbitrarily set a lower
compulsory retirement age of 55 for Petitioners for the sole reason that they are women. with the male cabin
attendants of Philippine Airlines.
Regular courts have no power to set and fix the terms and conditions of employment. The RTC set a hearing on petitioners'
application for a TRO and. "CEDAW"). 2004. 2004. For being patently unconstitutional and unlawful.
not in labor management
relations nor in wage structures and other terms and conditions of employment. the dispute is
not a mining conflict. law on contracts and the Convention on the
Elimination of All Forms of Discrimination Against Women.
In Gonzales v. Part A of the
PAL-FASAP CBA. 04-886 is the annulment of Section 144. to work until they are sixty (60) years old. Jr. speedy. consistent with the constitutional and statutory guarantee of equality between
men and women. the creeping take-over by
the administrative agencies of the judicial power vested in the courts would render the judiciary
virtually impotent in the discharge of the duties assigned to it by the Constitution. Saura. 129. The complaint was not merely for the determination
of rights under the mining contracts since the very validity of those contracts is put in issue. or
their collective bargaining agreement. in effect. Rather. like their male
counterparts. i. Here. Clearly. only disputes involving the union and the company shall be referred to the grievance
machinery or voluntary arbitrators. should Section 144 of the CBA be held
invalid. because the union and the management have unanimously agreed to the terms of the
CBA and their interest is unified. on the other hand.
In Saura v.
The change in the terms and conditions of employment.
In the instant case. this Court denied the petition for certiorari. such referral to the
grievance machinery and thereafter to voluntary arbitration would be inappropriate to the
petitioners. Along that line. v. The
grievance machinery with members designated by the union and the company cannot be expected
to be impartial against the dismissed employees. other labor statutes..
To be sure. as the same involves the exercise of judicial power. the interpretation and
application of those laws. which allegedly discriminates against them for being female flight attendants.17 this Court held that not every dispute between an
employer and employee involves matters that only labor arbiters and the NLRC can resolve in the
exercise of their adjudicatory or quasi-judicial powers.38.
In that case. The jurisdiction of labor arbiters and the
NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee
relationship which can only be resolved by reference to the Labor Code. Accordingly.. in some
insure a more knowledgeable solution of the problems submitted to them. involve questions of fact especially with regard to the determination of the
circumstances of the execution of the contracts. But the resolution of the validity or voidness of the
contracts remains a legal or judicial question as it requires the exercise of judicial function. The
subject of litigation is incapable of pecuniary estimation. i. 15 Being an ordinary civil
action.e. Due process demands that the dismissed workers’
grievances be ventilated before an impartial body. It is essentially judicial..
pursuant to Section 19 (1) of Batas Pambansa Blg.
Applying the same rationale to the case at bar. as it is like vesting power to someone who cannot wield it. it is most respectfully prayed that the Honorable Court:
c. No grievance between them exists which could be
brought to a grievance machinery. and the rendering of a judgment based thereon.
nullification of the alleged discriminatory provision in the CBA. but rather in the
application of the general civil law. it should not deprive the courts of justice
of their power to decide ordinary cases in accordance with the general laws that do not require
any particular expertise or training to interpret and apply. In such situations. its object was actually the
nullification of the PAL-PALEA agreement.e. 18 Here. the
employer-employee relationship between the parties is merely incidental and the cause of action
ultimately arose from different sources of obligation. is but a necessary and unavoidable consequence of the principal relief sought. The 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
jurisdiction over the dispute belongs to the regular courts of justice and not to the labor arbiter and
the NLRC. They have no jurisdiction and competence to decide
constitutional issues relative to the questioned compulsory retirement age. Clearly. This would also relieve
the regular courts of a substantial number of cases that would otherwise swell their already
clogged dockets. They said that the suspension was unconstitutional and contrary to public policy. petitioners' proper remedy is an ordinary civil
action for annulment of contract. the same is beyond the jurisdiction of labor tribunals. as amended. It is unfair to preclude petitioners
from invoking the trial court's jurisdiction merely because it may eventually result into a change of
the terms and conditions of employment.21 this Court emphasized the primacy of the regular court's judicial power
enshrined in the Constitution that is true that the trend is towards vesting administrative bodies
like the SEC with the power to adjudicate matters coming under their particular specialization. Petitioners should be adjudged and declared entitled.. Isnani. both the union and the company are united or have come to an agreement
regarding the dismissal of private respondents. Inc.
Petitioners submit that the suspension was inordinately long. Part A of the PAL-FASAP CBA is unlawful and unconstitutional.23 this Court held that:
x x x Hence. the
petitioners' primary relief in Civil Case No. a court of general jurisdiction. Climax Mining Ltd. in Rivera v.22 after Philippine Airlines (PAL) and PAL Employees Association
(PALEA) entered into an agreement. The Court said that while the
petition was denominated as one for certiorari and prohibition. Thus.
WHEREFORE. x x x x
From the petitioners' allegations and relief prayed for in its petition. labor statutes. it is clear that the issue raised
is whether Section 144. But as expedient as this policy may be. The dispute has to be settled before an impartial body. exclusively cognizable by the RTC. As such. Their exercise of
jurisdiction is futile.
In Pantranco North Express. Otherwise. Actions between employees and employer where the
employer-employee relationship is merely incidental and the cause of action precedes from a
different source of obligation is within the exclusive jurisdiction of the regular court..
In Georg Grotjahn GMBH & Co. It may. then which tribunal or forum shall
determine the constitutionality or legality of the assailed CBA provision?
This Court holds that the grievance machinery and voluntary arbitrators do not have the power to
determine and settle the issues at hand. The Court said:
Whether the case involves void or voidable contracts is still a judicial question. but is called upon to determine whether CBA is
consistent with the laws. an action which properly falls under the jurisdiction of the
regional trial courts. resolution of the dispute requires expertise. such claims fall outside the area of competence or
expertise ordinarily ascribed to labor arbiters and the NLRC and the rationale for granting
jurisdiction over such claims to these agencies disappears. NLRC. the trial court is not asked to set and fix
the terms and conditions of employment. NULL and VOID to the
extent that it discriminates against Petitioners. It
requires the ascertainment of what laws are applicable to the dispute.16 and the power to apply and interpret
the constitution and CEDAW is within the jurisdiction of trial courts. PALEA. several employees questioned its validity via a petition for certiorari directly to the
Supreme Court. which includes the provision to suspend the PAL-PALEA CBA
for 10 years.
The said issue cannot be resolved solely by applying the Labor Code. ruling that there is available to petitioners
a plain. abdicated the workers' constitutional right to bargain for another CBA
at the mandated time.19
If We divest the regular courts of jurisdiction over the case. the Constitution and CEDAW. cognizable by labor tribunals.20 this Court affirmed the jurisdiction of courts over questions on
constitutionality of contracts. where the principal relief sought is to be resolved not by reference to the Labor Code or
other labor relations statute or a collective bargaining agreement but by the general civil law. Part A of the PAL-FASAP 2000-2005 CBA INVALID. and adequate remedy in the ordinary course of law.
Thus. after trial on the merits:
(I) declare Section 114. v.
Although the CBA provides for a procedure for the adjustment of grievances. way beyond the maximum statutory
life of 5 years for a CBA provided for in Article 253-A of the Labor Code. By agreeing to a 10-year
suspension. x x x . Espiritu. it does not necessarily follow
that a resolution of controversy that would bring about a change in the terms and conditions of
employment is a labor dispute.
Not every controversy or money claim by an employee against the employer or vice-versa is within
the exclusive jurisdiction of the labor arbiter. it cannot be said that the "dispute" is between the
union and petitioner company because both have previously agreed upon the provision on
. it requires the
application of the Constitution.
J. submitted its association's
bargaining proposal for the remaining period of 2004-2005 of the PAL-FASAP CBA." Thus. prior to Okol’s dismissal. in a letter dated July 12. especially provisions relating to matters
affected with public policy. The only controversy lies
in its intrinsic validity. however. Ople. The Decision and Resolution of the Court of
Appeals. or other written document.
On 17 September 1999. If the retirement provisions in the
CBA run contrary to law. x x x. applying the principle in the aforementioned case cited.
The trial court in this case is not asked to interpret Section 144. The shipment of the
equipment was placed under the names of Okol and two customs brokers for a value less than
SO ORDERED. is the art of or process of discovering and
ascertaining the meaning of a statute. Inc. Behavior
Modifications. and RONALD JOSEPH
MOY. to say the least. The dispute is between respondent PAL and several female
flight attendants who questioned the provision on compulsory retirement of female flight
attendants. Slimmers World preventively suspended Okol.
SLIMMERS WORLD INTERNATIONAL.
On 28 July 1999. because it exerted no further efforts to
pursue its proposal. public morals. However.
G. No.27 It should not be taken to mean that retirement provisions agreed upon in the CBA are
absolutely beyond the ambit of judicial review and nullification.
. as their
representative. is not
merely contractual in nature but impressed with public interest. these are imbued with public interest and therefore are subject to the police power of
the state. This would require the presentation and reception of evidence by the parties
in order for the trial court to ascertain the facts of the case and whether said provision violates the
Constitution. contract. said rule is not absolute. Neither is there any question regarding the implementation of the subject CBA
provision. The rule in
Article 1306."compulsory retirement" as embodied in the CBA. SP. For being undervalued. the relations between capital and labor are not merely contractual. a referral of the case to the grievance machinery and to the voluntary arbitrator under the
CBA would be futile because respondent already implemented Section 114. 04-886 with deliberate dispatch. there was no showing that FASAP. 86813
are REVERSED and SET ASIDE. 2005 and March 7.
which set aside the Resolutions dated 29 May 2001 and 21 December 2001 of the National Labor
Relations Commission (NLRC). 2009
LESLIE OKOL. FASAP. counter-balancing the principle of autonomy of contracting parties is the
equally general rule that provisions of applicable law.
(Slimmers World) employed petitioner Leslie Okol (Okol) as a management trainee on 15 June
1992. referral to the grievance
machinery and voluntary arbitration would not serve the interest of the petitioners. are deemed written into the contract. A full-blown trial is necessary.
In the same vein. as defined in Black's Law Dictionary. since a
contract is the law between the parties.R. Through a letter dated 22 September 1999 signed by its president
Ronald Joseph Moy (Moy). Without FASAP's active participation on behalf of its female
flight attendants. the equipment were seized. 2006. the
governing principle is that parties may not contract away applicable provisions of law especially
peremptory provisions dealing with matters heavily impressed with public interest. Petitioner. They are so
impressed with public interest that labor contracts must yield to the common good. the petition is PARTLY GRANTED.
WHEREFORE.x x x 26 The
supremacy of the law over contracts is explained by the fact that labor contracts are not ordinary
contracts. endeavored to adjust.Respondents.29
The question as to whether said Section 114. When petitioners in their individual capacities questioned the legality of the
compulsory retirement in the CBA before the trial court. BEHAVIOR MODIFICATIONS.
Further. Branch 147 is DIRECTED to
continue the proceedings in Civil Case No. Slimmers World found Okol’s
explanation to be unsatisfactory.
Interpretation. petitioners pray for the declaration of the alleged discriminatory provision in the CBA
against its female flight attendants. Inc. Part A of PAL-FASAP
CBA when several of its female flight attendants reached the compulsory retirement age of 55. However. particularly those
employed before November 22. "provided they are not contrary to law. 2004. who
have both previously agreed upon the provision on the compulsory retirement of female flight
attendants as embodied in the CBA. such provisions may very well be voided. will. the dispute in the case at bar is not between FASAP and respondent PAL. petitioners sought relief
before this Court through the instant petition for review under Rule 45.
This Court is not persuaded. INC.25 this Court held that:
The principle of party autonomy in contracts is not. morals. Part A of the PAL-FASAP CBA is discriminatory or not
is a question of fact.R. the issue in the petition for certiorari brought before the CA by the respondent was the
alleged exercise of grave abuse of discretion of the RTC in taking cognizance of the case for
Okol filed a complaint3 with the Arbitration branch of the NLRC against Slimmers World. illegal dismissal.:
Before the Court is a petition for review on certiorari1 assailing the Decision2 dated 18 October
2002 and Resolution dated 22 September 2003 of the Court of Appeals in CA-G. in CA-G. or public policy. a remand of this case to the RTC for the
proper determination of the merits of the petition for declaratory relief is just and proper. The Regional Trial Court of Makati City. good customs. and Moy (collectively called respondents) for illegal suspension. 28
Respondent Slimmers World International operating under the name Behavior Modifications. which includes
the renegotiation of the subject Section 144. settle or negotiate with PAL for the removal of the difference
in compulsory age retirement between its female and male flight attendants. statutes and treaties. Therefore.24 The provision
regarding the compulsory retirement of flight attendants is not ambiguous and does not require
interpretation. addressed to PAL. an absolute principle. SP No. FASAP's attempt to change the questioned
provision was shallow and superficial.
On 19 September 1999. because the manner of implementing the same is clear in itself. Okol received another memorandum from Slimmers World requiring her
to explain why no disciplinary action should be taken against her in connection with the equipment
seized by the Bureau of Customs. No. Thus. dated August 31. The
Supreme Court is not a trier of facts.R. as a labor contract. 1996. Also. Okol filed her written explanation. which jurisdiction to hear the
same is properly lodged with the the RTC. public order
or public policy.
CARPIO. Put a little differently. When the CA annuled and set aside the RTC's order. A CBA. respectively. The law
relating to labor and employment is clearly such an area and parties are not at liberty to insulate
themselves and their relationships from the impact of labor laws and regulations by simply
contracting with each other. A perusal of the petition
before Us. This mode of appeal
is generally limited only to questions of law which must be distinctly set forth in the petition.
In Pakistan International Airlines Corporation v. of our Civil Code is that the contracting parties may establish such stipulations as they
may deem convenient.
Although it is a rule that a contract freely entered between the parties should be respected.. The
suspension arose from the seizure by the Bureau of Customs of seven Precor elliptical machines
and seven Precor treadmills belonging to or consigned to Slimmers World. The rule is settled that pure questions of fact may not be the proper
subject of an appeal by certiorari under Rule 45 of the Revised Rules of Court. the utilization of the grievance machinery or voluntary arbitration would be
pointless. Okol received a memorandum that her suspension had been extended from
2 September until 1 October 1999 pending the outcome of the investigation on the Precor
equipment importation. She rose up the ranks to become Head Office Manager and then Director and Vice President
from 1996 until her dismissal on 22 September 1999. 69893. Slimmers World terminated Okol’s employment.
On 2 September 1999. it was only private respondent on his own
who questioned the compulsory retirement. Part A of the PAL-FASAP CBA.
the dispute was an intra-corporate controversy falling outside the
jurisdiction of the Arbitration branch.000.
Okol filed a Motion for Reconsideration which was denied in a Resolution 11 dated 22 September
2003. The GIS and minutes of the meeting of the board of directors indicated that petitioner
was a member of the board of directors.
All other claims are dismissed for lack of factual or legal basis.
not a mere employee. should reinstatement be not feasible
separation pay equivalent to one month pay per year of service is awarded.
On 22 February 2000.
In an Order. Qualifications and Election – The general management of the corporation shall be vested in a
board of five directors who shall be stockholders and who shall be elected annually by the
stockholders and who shall serve until the election and qualification of their successors.
The relevant portions of the Amended By-Laws of Slimmers World which enumerate the power of
the board of directors as well as the officers of the corporation state:
The Board of Directors
World’s president: (1) petitioner received salary evidenced by pay slips. the appellate court set aside the NLRC’s Resolution dated 29
May 2001 and affirmed the labor arbiter’s Order dated 20 March 2000. The charges of illegal suspension. Since
it involved a corporate officer. NLRC. and an
elected corporate officer.000.5 dated 20 March 2000. The question of remuneration involving a stockholder and officer. On the other hand. 69893. being an intra-corporate dispute. petitioner was a director and officer of
Slimmers World. docketed as CA-G. by itself.
The issue revolves mainly on whether petitioner was an employee or a corporate officer of
Petitioner enumerated the instances that she was under the power and control of Moy. respondents attached the General Information Sheet 13 (GIS) dated 14 April 1998. The Court of Appeals ruled
that the case.15 and the Amended By-Laws16 dated 1 August 1994 of Slimmers World as submitted to
the SEC to show that petitioner was a corporate officer whose rights do not fall within the NLRC’s
jurisdiction./Slimmers World International to reinstate
complainant Leslie F.
reinstatement and back wages imputed by petitioner against respondents fall squarely within the
ambit of intra-corporate disputes. illegal dismissal. the jurisdiction to hear and decide the case is
vested with the labor arbiter and the NLRC. which must be applied. having shown
that an employer-employee relationship exists. and the further sum of P1.
Minutes14 of the meeting of the Board of Directors dated 14 April 1997 and Secretary’s
Certificate. 2000 until fully
reinstated. namely (1)
the power to hire. Okol to her former position with full back wages which to date stood in the
amount of P10.
questioned the jurisdiction of the NLRC in taking cognizance of petitioner’s complaint.12 we held that an "office" is created by the charter of the corporation and the
officer is elected by the directors or stockholders. Respondents contended that the
relief prayed for was confined only to the question of jurisdiction.
The Court’s Ruling
The petition lacks merit. Thus.00 computed from July 28. 1999 to November 28. and (4) the power to
control. Respondents asserted that the NLRC had no
jurisdiction over the subject matter of the complaint. the work that she performed conforms to that of an employee
rather than a corporate officer.17 we have held that a corporate officer’s
dismissal is always a corporate act.
determine the existence of an employer-employee relationship. secretary. It is the "four-fold" test.unpaid commissions. Respondents assert that petitioner was not only
an officer but also a stockholder and director. on the other hand. In the
motion. (2) Moy deducted
Medicare and SSS benefits from petitioner’s salary. Mere title or designation in a corporation will not. an "employee" usually
occupies no office and generally is employed not by action of the directors or stockholders but by
the managing officer of the corporation who also determines the compensation to be paid to such
employee. a fraction of at least six
months considered one whole year.
Respondents. or an intra-corporate controversy which arises between a
stockholder and a corporation.
Okol filed an appeal with the NLRC.000.R. from the documents submitted by respondents.
Petitioner insists that the Court of Appeals erred in ruling that she was a corporate officer and that
the case is an intra-corporate dispute falling within the jurisdiction of the regular courts. the NLRC denied the motion for lack of merit. However. the Order appealed from is SET ASIDE and REVERSED.
The Vice-President shall be vested with all the powers and authority and is required to perform all
the duties of the President during the absence of the latter for any cause. However. In a Resolution6 dated 29 May 2001. damages and attorney’s fees. SP No. A new one is hereby ENTERED
ordering respondent Behavior Modification.
Respondents then filed an appeal with the Court of Appeals. and (3) petitioner was dismissed from
employment not through a board resolution but by virtue of a letter from Moy. Even the alleged
absence of any resolution of the Board of Directors approving petitioner’s termination does not
constitute proof that petitioner was not an officer. treasurer and such other officers as may be provided for in the by-laws.7
Respondents filed a Motion for Reconsideration with the NLRC. unpaid commissions. holding one subscribed share of the capital stock. the NLRC not only
decided the case on the merits but did so in the absence of position papers from both parties. with prayer for reinstatement and payment of
backwages. respondents filed a Motion to Dismiss4 the case with a reservation of their
right to file a Position Paper at the proper time. Vice-President – Like the Chairman of the Board and the President.00 as indemnity pay plus attorney’s fee equivalent
to ten (10%) of the total monetary award. The labor
arbiter ruled that Okol was the vice-president of Slimmers World at the time of her dismissal. the instant petition. the respondents. The dispositive portion of the resolution states:
Clearly. the Vice-President shall be
elected by the Board of Directors from [its] own members.
The issue is whether or not the NLRC has jurisdiction over the illegal dismissal case filed by
The Ruling of the Court of Appeals
In a Decision9 dated 18 October 2002. in their motion to dismiss filed before the labor arbiter. (3) the power to dismiss. Section 25 of the Corporation Code enumerates corporate officers as the
president. the NLRC reversed and set
aside the labor arbiter’s order.250.
In the present case.
The Vice-President will perform such duties as the Board of Directors may impose upon him from
time to time. falls within the jurisdiction of the regular courts
pursuant to Republic Act No. which facts provide further basis that petitioner’s
separation from Slimmers World does not come under the NLRC’s jurisdiction. is not a simple labor problem but a matter that comes within the area of
. the labor arbiter granted the motion to dismiss. Also. the factors cited by petitioner that she was a
mere employee do not prove that she was not an officer of Slimmers World. (2) the payment of wages.
asserts that even as vice-president. Inc. maintain that petitioner was a corporate officer at the time of her
dismissal from Slimmers World as supported by the General Information Sheet and Director’s
Affidavit attesting that petitioner was an officer. In a
Resolution8 dated 21 December 2001.10 The appellate court added that the NLRC had acted without
jurisdiction in giving due course to the complaint and deprived respondents of their right to due
process in deciding the case on the merits. In
Tabang v. In a number of cases.
the Labor Arbiter found that Gran failed to refute EDI's
After his arrival in the Philippines. J.00 for a period of two years. the appellate court correctly ruled that it is not the NLRC
but the regular courts which have jurisdiction over the present case.
2.. and his failure to submit daily activity reports. GRAN. 1993 letter for curricula vitae of qualified
applicants for the position of "Computer Specialist. 1999 Resolution4 rendered by the National Labor Relations Commission (NLRC)
(Third Division) in POEA ADJ (L) 94-06-2194. No.6
It appears that OAB asked EDI through its October 3.00.00 only. Thus. and Western Guaranty Corporation with the NLRC.
Prior to its amendment. Country Bankers Insurance Corporation." 7 In a facsimile transmission dated November
29. officers or managers of such
corporations. and on the same day. 1994. and deployed by ESI to work for OAB. The
alleged non-compliance with contractual stipulations relating to Gran's salary and contract
duration. (1) that Gran did not submit a single activity report of his daily activity as
dictated by company policy.00).
The Labor Arbiter reasoned that there was no underpayment of salaries since according to the
POEA-Overseas Contract Worker (OCW) Information Sheet. OAB informed EDI that. We AFFIRM the 18 October 2002 Decision and 22 September
2003 Resolution of the Court of Appeals in CA-G.10
After Gran had been working for about five months for OAB. through the assistance of the EDI office in Riyadh.
Subsection 5. which was docketed as POEA ADJ (L) 94-06-2194 for
underpayment of wages/salaries and illegal dismissal.] vide OAB letter
agreed to pay Gran USD 850. against ESI/EDI. In addition. and Omar Ahmed Ali Bin Bechr Est. it
was found that Gran did not commit any act that constituted a legal ground for dismissal.00. 1994. Inc.
Private respondent Gran was an OFW recruited by EDI. The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential
Decree No. 1994 letter." The faxed letter also stated that if Gran
agrees to the terms and conditions of employment contained in it. However.00 representing his final
pay. Non-compliance to contract requirements by the recruitment agency primarily on your salary
and contract duration. Section 5(c) of Presidential Decree No. 1998 Decision. This
scheme constituted misrepresentation through the conspiracy between EDI and ESI in misleading
Gran and even POEA of the actual terms and conditions of the OFW's employment. petitioner. In addition to the regulatory and adjudicative functions of the Securities and Exchange
Commission over corporations. Gran's monthly salary was USD 600.2.00 monthly as food
allowance. This Decision is without prejudice
to petitioner Leslie Okol’s taking recourse to and seeking relief through the appropriate remedy in
the proper forum. 8
After accepting OAB's offer of employment.
The Ruling of the Labor Arbiter
In his February 10.R. 1994.00 as unpaid salaries. his employment was terminated
through OAB's July 9. (2) that he was not qualified for the job as computer specialist due to
his insufficient knowledge in programming and lack of knowledge in ACAD system. towards him. transferred
to regional trial courts the SEC’s jurisdiction over all cases listed in Section 5 of PD 902-A:
5. while his Philippine Overseas Employment Agency (POEA) Information
Sheet indicated USD 600. ordering Expertise Search International (ESI).150. Insubordination or disobedience to Top Management Order and/or instructions (non-submittal
of daily activity reports despite several instructions). on February 10. Kingdom of Saudi Arabia. Gran filed an Appeal15 on April 6.12
3. his monthly basic salary was fixed
at SR 2. (3) that Gran
refused to follow management's instruction for him to gain more knowledge of the job to prove his
worth as computer specialist. namely.2. and USD 350. (EDI). it
appears from the records that Gran failed to furnish EDI with a copy of his Appeal Memorandum.
vs.14 Labor Arbiter Manuel R. Gran instituted a complaint.00. (OAB) jointly and severally
to pay Eleazar S. EDI may arrange for Gran's immediate dispatch. 1999 Decision 3 and
September 30.. from the applicants' curricula vitae submitted to it for evaluation. Quezon City. Gran (Gran) the amount of USD 16. 69893.
National Capital Region.
Accordingly. to justify that Gran had no claim for
unpaid salaries or wages against OAB.
Upon arrival in Riyadh. 8799.
NATIONAL LABOR RELATIONS COMMISSION and ELEAZAR S. 1998. (4) that Gran's employment contract had never been substituted. trustees.
The Ruling of the NLRC
The NLRC held that EDI's seemingly harmless transfer of Gran's contract to ESI is actually
"reprocessing. which was equivalent to USD 600.corporate affairs and management and is a corporate controversy in contemplation of the
Corporation Code. disobedience. Gran received from OAB the total amount of SR 2. on July 21.
OAB. the Labor Arbiter decided that Gran was validly dismissed from his work due to
SO ORDERED. Gran questioned the discrepancy in his monthly salary—his employment
contract stated USD 850. (5)
and that Gran was paid a monthly salary of USD 850.
Arbiter Caday also cited the Declaration executed by Gran. Third Division.00 a month. 145587
It is a settled rule that jurisdiction over the subject matter is conferred by law. Section 5 of Republic Act No. the charge of insubordination was not
. F-5751-93. 2007
EDI-STAFFBUILDERS INTERNATIONAL. 1998 with the NLRC. we DENY the petition.500.
and in his Confirmation of Appointment as Computer Specialist. Gran was then deployed to Riyadh.
Petitioner EDI is a corporation engaged in recruitment and placement of Overseas Filipino Workers
(OFWs). and the absence of pre-qualification requirements cannot be attributed to Gran but to
On July 11. 20 The determination
of the rights of a director and corporate officer dismissed from his employment as well as the
corresponding liability of a corporation. In addition.11 on the following grounds:
Riyadh. 56120 which affirmed the January 15. 5. SP No.250.R.
it selected Gran for the position of "Computer Specialist. to whom Gran's case was
assigned." which is a prohibited transaction under Article 34 (b) of the Labor Code.948. it shall have original and exclusive jurisdiction to
hear and decide cases involving:
c) Controversies in the election or appointments of directors.R. EDIStaffbuilders International. 902-A19 (PD 902-A) provided that
intra-corporate disputes fall within the jurisdiction of the Securities and Exchange Commission
Sec. which dealt directly with OAB. ruled that there was neither underpayment nor illegal dismissal.00 (USD 600. partnerships and other forms of associations registered with it as
expressly granted under existing laws and decrees. Non-compliance to pre-qualification requirements by the recruitment agency[. he executed a Declaration 13 releasing OAB from any financial obligation
or otherwise. INC.
Kingdom of Saudi Arabia on February 7. one of which was a monthly
salary of SR (Saudi Riyal) 2.
With regard to the issue of illegal dismissal. partnerships or associations. However.00.5 ESI is another recruitment agency which collaborated with EDI to process the
documentation and deployment of private respondent to Saudi Arabia.
Dissatisfied. Caday. 1993.
WHEREFORE. dated October 3. 1993. respondents.:
This Petition for Review on Certiorari1 seeks to set aside the October 18. is an intra-corporate dispute subject to the
jurisdiction of the regular courts. Arbiter Caday dismissed Gran's complaint for lack of merit. Gran signed an employment contract 9 that granted
him a monthly salary of USD 850. which took effect on 8 August 2000. SP No. 2000 Decision2 of the
Court of Appeals (CA) in CA-G. if any. JR. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate
Regional Trial Court.
WHETHER PETITIONER HAS ESTABLISHED BY WAY OF SUBSTANTIAL EVIDENCE THAT GRAN'S
TERMINATION WAS JUSTIFIABLE BY REASON OF INSUBORDINATION AND DISOBEDIENCE." 22 The court also held that petitioner EDI
failed to prove that private respondent was terminated for a valid cause and in accordance with
due process. Accordingly. National Labor Relations Commission. the CA held that the Declaration signed by Gran did not bar him from demanding benefits
to which he was entitled. The court found that Gran was terminated on the same day he received the
The Ruling of the Court of Appeals
The CA subsequently ruled on the procedural and substantive issues of EDI's petition. WHETHER GRAN WAS AFFORDED DUE PROCESS PRIOR TO TERMINATION. otherwise. a Motion for Reconsideration of the NLRC Decision after receiving a copy
of the Decision on August 16. and hence. The appellate court ratiocinated that EDI had the burden of proving Gran's
incompetence. Inc. WHETHER PETITIONER EDI HAS ESTABLISHED BY WAY OF SUBSTANTIAL EVIDENCE THAT GRAN'S
TERMINATION WAS JUSTIFIABLE BY REASON OF INCOMPETENCE. COROLLARY HERETO. NLRC RULING. Time and again We have acted on petitions to review decisions of the Court of Appeals
even in the absence of proof of service of a copy thereof to the Court of Appeals as required by
Section 1 of Rule 45. (OAB) are hereby ordered jointly and
severally liable to pay the complainant Eleazar Gran the Philippine peso equivalent at the time of
actual payment of SIXTEEN THOUSAND ONE HUNDRED FIFTY US DOLLARS (US$16. In compliance with the
Unconvinced of the NLRC's reasoning. on August 26. and that there was "no cogent reason or patent or palpable error
that warrant any disturbance thereof.26 (Emphasis supplied. however.27 Pagdonsalan v. Magpayo Customs Brokerage Corp.
it should not be given due course either. and as such is frowned upon as contrary to public policy especially where the monetary
consideration given in the Declaration was very much less than what he was legally entitled to—his
backwages amounting to USD 16. WHETHER
THE PRIETO VS.20
The NLRC then issued a Resolution21 denying petitioner's Motion for Reconsideration.substantiated. Inc.
filed. Magpayo. petitioner filed an Opposition19 to Gran's motion arguing that the Writ of
Execution cannot issue because it was not notified of the appellate proceedings before the NLRC
and was not given a copy of the memorandum of appeal nor any opportunity to participate in the
appeal. an excusable neglect. considered. The Court ratiocinated as follows:
The failure to give a copy of the appeal to the adverse party was a mere formal lapse.23
The Court's Ruling
The petition lacks merit except with respect to Gran's failure to furnish EDI with his Appeal
Memorandum filed with the NLRC. an excusable
IV. Magpayo ruling was reiterated in Carnation Philippines Employees Labor Union-FFW v. this instant petition is before the Court. in J. 1999. on October 18.
National Labor Relations Commission.
Petitioner raises the following issues for our consideration:
I. The court also held that even if
Gran was guilty of insubordination.
and ruled upon" in the Decision.
Also. The court held that since the law requires
the recruitment agencies to subject OFWs to trade tests before deployment.00. WHETHER GRAN IS ENTITLED TO BACKWAGES FOR THE UNEXPIRED PORTION OF HIS
CONTRACT. As enunciated in J. The appellate court found that the Declaration was in the form of a
In Estrada v.D.D." the appellate court found that EDI failed to show that the submission of the "Daily
Activity Report" was a part of Gran's duty or the company's policy.
On the procedural issue. the appellate court held that "Gran's failure to furnish a copy of his appeal
memorandum [to EDI was] a mere formal lapse.. it was ruled that failure of appellant to furnish a copy of the appeal to the
adverse party is not fatal to the appeal.
Seeing that the NLRC did not act on Gran's motion after EDI had filed its Opposition.16
Gran then filed a Motion for Execution of Judgment 17 on March 29.
II.150. but not
dismissed.28 and in Sunrise Manning Agency. Rule XIII of its Implementing Rules and Regulations. is to require the appellant to comply with the rule that the opposing
party should be provided with a copy of the appeal memorandum. ratiocinating
that the issues and arguments raised in the motion "had already been amply discussed. the dispositive
portion of which reads:
The CA also held that Gran was not afforded due process.. WHETHER THE FAILURE OF GRAN TO FURNISH A COPY OF HIS APPEAL MEMORANDUM TO
PETITIONER EDI WOULD CONSTITUTE A JURISDICTIONAL DEFECT AND A DEPRIVATION OF
PETITIONER EDI'S RIGHT TO DUE PROCESS AS WOULD JUSTIFY THE DISMISSAL OF GRAN'S APPEAL.
As a result of these findings.
III. the doctrine that evolved from these cases is that failure to furnish the adverse party with a
copy of the appeal is treated only as a formal lapse. an excusable neglect and not a jurisdictional
defect which would justify the dismissal of his appeal. IS APPLICABLE IN THE
INSTANT CASE. NLRC.D. given that OAB did not abide by the twin
This position is devoid of merit. and that Gran's Declaration releasing OAB from any monetary obligation had no force
and effect. The NLRC then ordered Gran to present proof of service. however. We act on the petitions and simply require the petitioners to
comply with the rule.24 this Court set aside the order of the NLRC
which dismissed an appeal on the sole ground that the appellant did not furnish the appellee a
memorandum of appeal contrary to the requirements of Article 223 of the New Labor Code and
Section 9. the duty that is imposed
on the NLRC.
As for the charge of insubordination and disobedience due to Gran's failure to submit a "Daily
Activity Report. and Gran was not even afforded the required notice and investigation on his alleged
The records reveal that the NLRC discovered that Gran failed to furnish EDI a copy of the Appeal
To prevent the execution. no evidence was presented to show
how and why Gran was considered to be incompetent.
While Gran's failure to furnish EDI with a copy of the Appeal Memorandum is excusable.
Finally. in such a case.
EDI Staffbuilders Int'l.
SO ORDERED. AS APPLIED BY THE COURT OF APPEALS. the order of dismissal of an appeal to the
NLRC based on the ground that "there is no showing whatsoever that a copy of the appeal was
served by the appellant on the appellee"25was annulled. Respondents Expertise Search International. and Omar Ahmed Ali Bin Bechr Est.
Inc. 1999 with the NLRC and
petitioner receiving a copy of this motion on the same date.
In a catena of cases. not a
jurisdictional defect. in such a situation. the abject
failure of the NLRC to order Gran to furnish EDI with the Appeal Memorandum constitutes grave
abuse of discretion. without having been apprised of the bases of his dismissal or afforded an
opportunity to explain his side.150. Gran must have been
competent and qualified.)
The J. the appeal should not be dismissed. Petitioner
claimed in its petition that the NLRC committed grave abuse of discretion in giving due course to
the appeal despite Gran's failure to perfect the appeal.
First Issue: NLRC's Duty is to Require Respondent to Provide Petitioner a Copy of the Appeal
Petitioner EDI claims that Gran's failure to furnish it a copy of the Appeal Memorandum constitutes
a jurisdictional defect and a deprivation of due process that would warrant a rejection of the
appeal. the appellate court denied the petition to set
aside the NLRC Decision. NLRC. he should have just been suspended or reprimanded.00)
representing his salaries for the unexpired portion of his contract. EDI filed a Petition for Certiorari before the CA. other than the termination letter. the assailed decision is SET ASIDE. 1999. the NLRC reversed the Labor Arbiter's Decision and rendered a new one. he would not have been hired and deployed abroad. 2000. v. Rules of Court. v.
—The return is prima facie proof of the facts
indicated therein. and convincing evidence to prove that the dismissal is valid and
legal. The first is the July 9. due to incompetence and insubordination or disobedience. Being the law intended by the parties (lex loci intentiones) to apply
to the contract.
Based on the foregoing provision.
termination procedures. public order.30 The post office's list shows that private respondent Gran sent two pieces of mail on the
same date: one addressed to a certain Dan O. however.
This mailing list. Proof of service.
In international law. if the service is done through registered mail. (Emphasis supplied.35
Unfortunately for petitioner. the local
The second and third issues have a common matter—whether there was just cause for Gran's
Any decision taken by the employer shall be without prejudice to the right of the workers to
contest the validity or legality of his dismissal by filing a complaint with the regional branch of the
National Labor Relations Commission.
Section 33 of Article 277 of the Labor Code38 states that:
Petitioner EDI claims that it had proven that Gran was legally dismissed due to incompetence and
insubordination or disobedience. proof
thereof shall consist of an affidavit of the person mailing of facts showing compliance with section
7 of this Rule." 45 Petitioner
. clauses. the employer shall furnish the worker whose
employment is sought to be terminated a written notice containing a statement of the causes for
termination and shall afford the latter ample opportunity to be heard and to defend himself with
the assistance of his representative if he so desires in accordance with company rules and
regulations promulgated pursuant to guidelines set by the Department of Labor and Employment.
The glaring failure of NLRC to ensure that Gran should have furnished petitioner EDI a copy of the
Appeal Memorandum before rendering judgment reversing the dismissal of Gran's complaint
constitutes an evasion of the pertinent NLRC Rules and established jurisprudence. thus. MISCELLANEOUS PROVISIONS39
(b) Subject to the constitutional right of workers to security of tenure and their right to be
protected against dismissal except for a just and authorized cause and without prejudice to the
requirement of notice under Article 283 of this Code.
In illegal dismissal cases. The NLRC should not have proceeded with the adjudication
of the case. The second is an unsigned April 11. 42
In the instant case. should be
respected. Gran submitted a copy of Camp Crame Post Office's list of mail/parcels sent on April 7. or the affidavit of the party serving. Rule 13 of the Rules of Court.
1995 letter44 from OAB addressed to EDI and ESI. Garcia (or Gran).
The rights of the employers to procedural due process cannot be cavalierly disregarded for they
too have rights assured under the Constitution.34
In the present case. nor is it conclusive proof that
EDI received its copy of the Appeal Memorandum. consistent.
International Law doctrine ofpresumed-identity approach or processual presumption comes into
play. etc. 13.). but if the addressee fails to claim his mail from the post office within five (5) days from the
date of first notice of the postmaster. In formulating the contract. This is not level
playing field and absolutely unfair and discriminatory against the employer and the job recruiters. He should have submitted an affidavit proving
that he mailed the Appeal Memorandum together with the registry receipt issued by the post
office.g. it did not prove the pertinent Saudi laws on the matter. accurate. Makati.)
Hence. Nicolaou. as this constitutes grave abuse of discretion. the NLRC should not have simply
accepted the post office's list of mail and parcels sent. and the other
appears to be addressed to Neil B. even if pleaded. it has been held that in termination disputes or illegal dismissal cases. afterwards.
Petitioner claims that Gran was incompetent for the Computer Specialist position because he had
"insufficient knowledge in programming and zero knowledge of [the] ACAD system. or in lieu thereof the unclaimed letter together with the certified
or sworn copy of the notice given by the postmaster to the addressee (emphasis supplied).D. Worse. EDI. and hence. He is
presumed to know only domestic or forum law. terms
and conditions as they may deem convenient. de Guzman of Legaspi Village. provides for proofs of service:
Section 13. place and manner of service. or public policy. To prove its allegations. which outlined the reasons why OAB had
terminated Gran's employment. EDI
submitted two letters as evidence.
Hence. service shall take effect after such time. Magpayo and the other cases. the NLRC Rules do not state what would constitute proper proof of service. the employer is bound to adduce
clear. is not a conclusive proof that EDI indeed received a copy of the Appeal
1998. the party who wants to have a foreign law applied to a dispute or case has the
burden of proving the foreign law. containing a
full statement of the date. instead of annulling the dispositions of the NLRC and remanding the case for further
proceedings we will resolve the petition based on the records before us to avoid a protracted
litigation. provided they are not contrary to law.41 This is consistent with the principle of security of tenure as guaranteed by the Constitution
and reinforced by Article 277 (b) of the Labor Code of the Philippines. the presumption is
that foreign law is the same as ours. A
contract freely entered into is considered law between the parties. If the service is by ordinary mail. The registry return card shall be filed immediately
upon its receipt by the sender. 5 of the NLRC Rules of Procedure (1990) provides for the proof and completeness of service in
proceedings before the NLRC:
Section 5.32 Proof and completeness of service.order. from Andrea E.
Second and Third Issues: Whether Gran's dismissal is justifiable by reason of incompetence.—Proof of personal service shall consist of a written admission of the
party served or the official return of the server. However. the employment contract signed by Gran specifically states that Saudi Labor
Laws will govern matters not provided for in the contract (e. 1994 termination letter. it has been established by Philippine law and jurisprudence that the
employer should prove that the dismissal of employees or personnel is legal and just. after seeing that Gran failed to attach the proof of service. the rights and obligations among and between the OFW. this
failure deprived EDI of procedural due process guaranteed by the Constitution which can serve as
basis for the nullification of proceedings in the appeal before the NLRC. x x x
In many cases.36 Where a foreign law is not pleaded or. is not proved.31 of Ermita. only to receive a copy of Gran's Motion for Execution of Judgment
which also informed them that Gran had obtained a favorable NLRC Decision. Saudi Labor Laws should govern all matters relating to the termination of the
employment of Gran. we apply Philippine labor laws in determining the
issues presented before us. Manila—both of whom are not
connected with petitioner. Managing Director of OAB. it is obvious that the list submitted by Gran is not conclusive
proof that he had served a copy of his appeal memorandum to EDI.
However. petitioner claims that private respondent Gran was validly dismissed for just
This claim has no merit. but it should have required Gran to
properly furnish the opposing parties with copies of his Appeal Memorandum as prescribed
in J. Gran should have immediately filed the registry return card. One can only surmise the
shock and dismay that OAB. the employer
has the burden of proving that the dismissal is for just and valid causes.Service by registered mail is complete upon receipt by the addressee or his
agent. 277.The burden of proving that the termination was for a valid
or authorized cause shall rest on the employer. If service is made by registered mail. The foreign law is treated as a question of fact to be properly
pleaded and proved as the judge or labor arbiter cannot take judicial notice of a foreign law. and the foreign employer/principal are governed by the employment contract. and failure to do so would
necessarily mean that the dismissal was not justified and therefore illegal. it is only deemed complete when the
addressee or his agent received the mail or after five (5) days from the date of first notice of the
postmaster. and disobedience
In cases involving OFWs. they will be discussed jointly. specific causes for termination. and ESI experienced when they thought that the dismissal of
Gran's complaint became final. good
customs. proof shall be made by such affidavit and
registry receipt issued by the mailing office. 40 Taking into account the
character of the charges and the penalty meted to an employee.37 Thus.43 addressed to
Sec. the parties may establish such stipulations. morals.
the employer must give
the employee two written notices and a hearing or opportunity to be heard if requested by the
employee before terminating the employment: a notice specifying the grounds for which dismissal
is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard.57 an employer is liable to pay nominal damages as
indemnity for violating the employee's right to statutory due process. even
before Gran was furnished the termination letter. Since EDI deployed Gran to
Riyadh. they are entitled to the payment of their salaries corresponding to the
unexpired portion of their contract.
as prescribed by the Labor Code. OAB." 46However. made known to
the employee and must pertain to the duties which he had been engaged to discharge. the issue is rendered moot and academic because Gran's
incompetency is unproved." 50 The CA. Inc. Gran's job description. Before the Labor Arbiter. It is supposed to reveal applicants with
false educational backgrounds. using the
ruling in the said case. Incompetence may be shown by
weighing it against a standard. EDI failed to establish any such
bases to show how petitioner found Gran incompetent. thus. and pertains to the duties which he had been
engaged to discharge. or any other document that would show that the "Daily Activity
Reports" were required for submission by the employees. NLRC. our laws and rules on the requisites of
due process relating to termination of employment shall apply. and its failure to do so only weakened its position but should not in
any way prejudice Gran. and expose bogus qualifications. otherwise. v. petitioner failed to show that the order of the company
which was violated—the submission of "Daily Activity Reports"—was part of Gran's duties as a
Computer Specialist. through the same letter. a
notice of the decision to dismiss. Moreover.A. Even if there was no objective trade test done by EDI. 1994 termination letter was
effective on the same day. Clearly. the following twin elements must concur:
(1) the employee's assailed conduct must have been willful. and (2)
a second notice to communicate to the employees that their employment is being terminated. No. Petitioner EDI had clearly failed to
overcome the burden of proving that Gran was validly dismissed. Therefore. 1995. or criterion. he was not qualified
for the job for which he was hired. Thus. other than the
abovementioned letters. for cases arising after the effectivity of
R. the worker shall be entitled to the full reimbursement of his placement
fee with interest of twelve percent (12%) per annum. that when the contract is for a fixed term and the employees are dismissed
without just cause.
Petitioner's imputation of incompetence on private respondent due to his "insufficient knowledge
in programming and zero knowledge of the ACAD system" based only on the above mentioned
letters. 51 EDI also claims that
the requirements of due process.
Petitioner EDI claims that private respondent Gran was afforded due process. However. we held that:
For willful disobedience to be a valid cause for dismissal. jointly
and solidarily.52 and Malaya Shipping
Services. made known to the employee. valid or authorized cause as
defined by law or contract.000. the July 9. more particularly by a Computer
Specialist. No. As
indicated by the second requirement provided for in Micro Sales Operation Network. or disobedient. Gran was not afforded
due process. indeed. 8042 58 (Migrant Workers and Overseas Filipinos Act)
on August 25. characterized by a wrongful and
perverse attitude. the elements that must concur for the charge of insubordination or willful
disobedience to prosper were not present.
insubordination. the employees must be given two (2) notices before their
employment could be terminated: (1) a first notice to apprise the employees of their fault.
Petitioner also raised the issue that Prieto v. NLRC. In the case at bar.48
Thus. and (2) if the dismissal is based on authorized causes under
Articles 283 and 284. as enunciated in Santos. petitioner failed to prove that Gran was justifiably dismissed due to incompetence. there was no intention to provide Gran with
due process. In any case. but is also solidarily liable with the foreign principal for any claims or
liabilities arising from the dismissal of the worker. ruled that Gran must have passed the test. since he was allowed
to work and improve his capabilities for five months prior to his termination. and for unjustified grounds. the employees should be given a hearing or opportunity to
defend themselves personally or by counsel of their choice. The burden devolves not only upon the
foreign-based employer but also on the employment or recruitment agency for the latter is not
only an agent of the former. he was denied the opportunity to respond to said
notice. 8042. lawful. It should also be pointed out that OAB failed to
give Gran the chance to be heard and to defend himself with the assistance of a representative in
accordance with Article 277 of the Labor Code. insubordinate.
Fourth Issue: Gran was not Afforded Due Process
As discussed earlier. they should have adduced additional evidence to convincingly show that
Gran's employment was validly and legally terminated.A.
Under the twin notice requirement.55
A careful examination of the records revealed that. ESI. NLRC. when the termination of employment is without just. lawful.
In Micro Sales Operation Network v. are liable to Gran in the amount of PhP 30.
In addition.59 On the other hand. we must determine whether the order violated by the employee is
reasonable. Since OAB was in breach of
the due process requirements under the Labor Code and its regulations. This shows that OAB had already condemned Gran to dismissal.49 as used by the CA in its Decision.54 this Court held that:
Procedurally. the employer must give the employee and the Department of Labor and
Employment written notices 30 days prior to the effectivity of his separation. the Prieto ruling is not applicable because in the case at hand. in the absence of proof of Saudi laws. While it furnished Gran the written notice informing him of
The CA is correct in applying Prieto.
According to petitioner. NLRC. the petitioners were
subjected to trade tests required by law to be conducted by the recruiting agency to insure
employment of only technically qualified workers for the foreign principal. this Court ruled that "[i]t is presumed that before their deployment.
In Prieto. Jr. OAB's manner of dismissing Gran fell
short of the two notice requirement. OAB did not schedule a hearing or conference with Gran to defend himself and
adduce evidence in support of his defenses.also claims that Gran was justifiably dismissed due to insubordination or disobedience because he
continually failed to submit the required "Daily Activity Reports.
This position is untenable.
In Agabon v. The purpose of the required trade test is to weed out
incompetent applicants from the pool of available workers.
Pursuant to the doctrine laid down in Agabon. were properly observed in the present case. cannot be given credence. it can be presumed that Gran had passed the required trade test and that Gran is qualified
for the job. (1) if the dismissal is based on a just cause under Article 282. v. plus his salaries for the unexpired portion of
his employment contract or for three (3) months for every year of the unexpired term whichever is
less. in order to
justify willful disobedience. EDI was at fault when it deployed Gran who was allegedly "incompetent"
for the job. Gran
misrepresented himself in his curriculum vitae as a Computer Specialist.
Even though EDI and/or ESI were merely the local employment or recruitment agencies and not
the foreign employer. in
cases arising before the effectivity of R.
We disagree. In
between the first and second notice.56 Consequently. it was still EDI's responsibility to
subject Gran to a trade test.53 cited by the CA in its Decision. it failed to furnish Gran the written notice apprising him of the charges against him.60
. and EDI.
Fifth and Last Issue: Gran is Entitled to Backwages
We reiterate the rule that with regard to employees hired for a fixed period of employment. and (2) the order violated must have been reasonable. without any other evidence. Philippine Labor laws and regulations
shall govern the relationship between Gran and EDI. Obviously. 47
EDI failed to discharge the burden of proving Gran's insubordination or willful disobedience. benchmark. Gran was notified and his employment arbitrarily terminated on the
same day. NLRC. Summing up.
An allegation of incompetence should have a factual foundation. or willful disobedience.00 as indemnity. EDI should have provided a copy of the company
policy. no other evidence was presented to show how and why Gran was
considered incompetent. he would not have
been hired. is not
applicable to the present case. In addition. that is.
Otherwise. citing Periquet v. then
the consideration should be much much more than the monthly salary of SR 3. The benefits of the employees if possible with the corresponding amounts. The waivers should be
carefully examined. No.
3. more particularly
those executed by employees. 1994.
I HEREBY DECLARE THAT OAB EST. it is also very much less than the USD
16. is unreasonably low.00).
It is advisable that the stipulations be made in English and Tagalog or in the dialect known to the
employee. and quitclaims:
Not all waivers and quitclaims are invalid as against public policy. In the case of the Declaration. 1994. HAS NO FINANCIAL OBLIGATION IN MY FAVOUR AFTER
RECEIVING THE ABOVE MENTIONED AMOUNT IN CASH. On July 9.00 even if it was against his will—since he was told on July 10. the foreign laws shall apply.
Panganiban in Land and Housing Development Corporation v. in the amount of SR 2. Esquillo:
1994 to leave Riyadh on July 12. or in
the dialect known to the employees—that by signing the waiver or quitclaim.64 the parameters for valid compromise agreements.)
This Court had also outlined in Land and Housing Development Corporation.
I ATTEST TO THE TRUTHFULNESS OF THIS STATEMENT BY AFFIXING MY SIGNATURE VOLUNTARILY. violence.63 (Emphasis supplied. but also the factual
circumstances under which they have been executed.
SIGNED.150. There should be two (2) witnesses to the execution of the quitclaim who must also sign
2. in regard not only to the words and terms used.In the present case. On July 11. The October 18. 1996. 2000 Decision in CA-G. releases and other waivers of benefits granted by laws or contracts in favor of workers
should be strictly scrutinized to protect the weak and the disadvantaged. duress.00 (SAUDI RIYALS TWO THOUSAND NINE
HUNDRED FORTY EIGHT ONLY)
REPRESENTING COMPLETE PAYMENT (COMPENSATION) FOR THE SERVICES I RENDERED TO OAB
arrived in Riyadh. which was equivalent to USD 16. and the consideration for the quitclaim is credible and reasonable. SP No. The relevant
portions of the Declaration are as follows:
I. before the
effectivity of R. the payment of SR 2. Certainly.
d. they are forfeiting or
relinquishing their right to receive the benefits which are due them under the law. said agreements should contain the following:
1.00)—although possibly less than the estimated Gran's salaries for the remaining duration of his
contract and other benefits as employee of OAB. the
employer is being unjust to the employee as there is no meaningful choice on the part of the
employee while the terms are unreasonably favorable to the employer. shall be final and binding upon the parties and the
NLRC or any court "shall not assume jurisdiction over issues involved therein except in case of noncompliance thereof or if there is prima facieevidence that the settlement was obtained through
fraud.67 This compromise settlement
becomes final and binding under Article 227 of the Labor Code which provides that:
[A]ny compromise settlement voluntarily agreed upon with the assistance of the Bureau of Labor
Relations or the regional office of the DOLE.948.
I STATE FURTHER THAT OAB EST. He had no other choice but to sign the Declaration as he
needed the amount of SR 2. 1994.00. Saudi Arabia and started to work on February 7. and
4. The court may however step in when such amount is unconscionably low or
unreasonable although the employee voluntarily agreed to it. OAB. On July 21.)
Is the waiver and quitclaim labeled a Declaration valid? It is not.R.948. Gran received a copy of his letter of termination. The Declaration reveals that the payment of SR 2.00 (USD
The foregoing events readily reveal that Gran was "forced" to sign the Declaration and constrained
to receive the amount of SR 2. On July 10. An adhesion contract is contrary to public policy
as it leaves the weaker party—the employee—in a "take-it-or-leave-it" situation.00 for the payment of his ticket. the
transaction must be recognized as a valid and binding undertaking. The factual circumstances surrounding the execution of the Declaration would show that Gran
did not voluntarily and freely execute the document. 1999 Resolution of the
. Gran was instructed to depart Saudi Arabia and required to pay his plane
ticket. Saudi Arabia.190. 2. But
where it is shown that the person making the waiver did so voluntarily. that the law will step in to annul the questionable transaction. with full understanding of
what he was doing. A quitclaim will understandably be lower than the
sum total of the amounts and benefits that can possibly be awarded to employees or to be earned
for the remainder of the contract period since it is a compromise where the employees will have to
forfeit a certain portion of the amounts they are claiming in exchange for the early payment of a
compromise amount.948. 8042. ELEAZAR GRAN (COMPUTER SPECIALIST) AFTER RECEIVING MY FINAL SETTLEMENT ON THIS DATE
THE AMOUNT OF:
S.00 is even lower than his
monthly salary of SR 3.00 (USD 850. 1994. waivers.948.
WHEREFORE. 1999 Decision and September 30.150. Such official shall assist the
parties regarding the execution of the quitclaim and waiver. 1994. the Bureau
of Labor Relations. If the Declaration is a quitclaim. Gran departed from Riyadh.
As correctly pointed out by the court a quo.
Petitioner EDI questions the legality of the award of backwages and mainly relies on the
Declaration which is claimed to have been freely and voluntarily executed by Gran.948.A. 56120 of the
Court of Appeals affirming the January 15. If the agreement was voluntarily
entered into and represents a reasonable settlement. Since he was illegally dismissed on July 9. the Declaration purporting to be a quitclaim and waiver is unenforceable under Philippine
laws in the absence of proof of the applicable law of Saudi Arabia. 1994. or undue influence exerted on their person. A statement that the employees signed and executed the document voluntarily. On July 12. intimidation. Gran filed the Complaint before the NLRC. and
e. (Emphasis supplied. The salary paid to Gran upon his termination.190.
It is made clear that the foregoing rules on quitclaim or waiver shall apply only to labor contracts of
OFWs in the absence of proof of the laws of the foreign country agreed upon to govern said
contracts. A statement that the employer has clearly explained to the employee in English. the
amount is unreasonably small compared to the future wages of Gran. This requirement was clearly articulated by Chief Justice Artemio V. In addition. 1994.
b. It is only where there is clear proof that the
waiver was wangled from an unsuspecting or gullible person. the petition is DENIED.948. 1994. misrepresentation. the employment contract provides that the employment contract shall be valid
for a period of two (2) years from the date the employee starts to work with the employer. A fixed amount as full and final compromise settlement. he signed the Declaration.00 which is the amount Gran is legally entitled to get from petitioner EDI as backwages. Filipino.
2. HAS NO OBLIGATION TOWARDS ME IN WHATEVER FORM.00 is actually the payment for Gran's salary
for the services he rendered to OAB as Computer Specialist. 62 hence. it is binding on the parties and may not later
be disowned simply because of a change of mind. he is therefore entitled to backwages corresponding to the unexpired
portion of his contract. the NLRC or a labor attaché in a foreign country.
NLRC. The document should be subscribed and sworn to under oath preferably before any
administering official of the Department of Labor and Employment or its regional office. and had fully
understood the contents of the document and that their consent was freely given without any
threat.R. his employment
contract is until February 7. which the employees
are giving up in consideration of the fixed compromise amount.
The Court finds the waiver and quitclaim null and void for the following reasons:
1. The court a quo is correct in its finding that the Declaration is a contract of adhesion which
should be construed against the employer. 66
Thus. Consider the following chronology of events:
In order to prevent disputes on the validity and enforceability of quitclaims and waivers of
employees under Philippine laws.
Courts must undertake a meticulous and rigorous review of quitclaims or waivers. or coercion. or the terms of settlement are
unconscionable on its face. He could have entertained some
apprehensions as to the status of his stay or safety in Saudi Arabia if he would not sign the
it did not prove the pertinent Saudi laws on the matter. Inc.
In international law. under the doctrine of processual presumption which. 2004. the party who wants to have a foreign law applied to a dispute or case has the
burden of proving the foreign law.). she returned to the Philippines on
March 17. as long as they are not contrary to law. petitioner ATCI cannot likewise
be held liable. 2. 178551
By Decision3 of November 29.
Petitioners’ motion for reconsideration having been denied by the appellate court by
Resolution7 of June 27. shall pay
the amount of PhP 30. but the same extends
up to and until the expiration of the employment contracts of the employees recruited and
employed pursuant to the said recruitment agreement. as agent. as in fact it did not
sign any document agreeing to be held jointly and solidarily liable. a
private employment agency shall assume all responsibilities for the implementation of the contract
of employment of an overseas worker. .
By Decision6 of March 30. hence. JOSEFA ECHIN.00 to respondent Gran as nominal damages for non-compliance with
statutory due process. she not having allegedly passed the probationary period.
As to Ikdal’s liability. the Labor Arbiter.
On July 27.
In providing for the joint and solidary liability of private recruitment agencies with their foreign
principals. more so since the Ministry’s liability had not been judicially determined as
jurisdiction was not acquired over it. cannot evade responsibility for the money claims
of Overseas Filipino workers (OFWs) which it deploys abroad by the mere expediency of claiming
that its foreign principal is a government agency clothed with immunity from suit.
Petitioners maintain that they should not be held liable because respondent’s employment
contract specifically stipulates that her employment shall be governed by the Civil Service Law and
Regulations of Kuwait. or that such
foreign principal’s liability must first be established before it. clauses. the
"Migrant and Overseas Filipinos’ Act of 1995.000. 2002. the responsibilities of such parties
towards the contracted employees under the agreement do not at all end. to allow petitioners to simply invoke the immunity
from suit of its foreign principal or to wait for the judicial determination of the foreign principal’s
liability before petitioner can be held liable renders the law on joint and solidary liability inutile. the Ministry of Public Health of Kuwait (the Ministry). 2001. 8042 precisely affords the OFWs with a recourse and assures them of
immediate and sufficient payment of what is due them." corporate officers. directors and partners of a
recruitment agency may themselves be jointly and solidarily liable with the recruitment agency for
money claims and damages awarded to overseas workers.:
Josefina Echin (respondent) was hired by petitioner ATCI Overseas Corporation in behalf of its
principal-co-petitioner. NLRC10 illuminates:
In the present case. The foreign law is treated as a question of fact to be properly
pleaded and proved as the judge or labor arbiter cannot take judicial notice of a foreign law. as such. representing her salary for the three months unexpired portion of her contract. 2007.
Indeed. the employment contract signed by Gran specifically states that Saudi Labor
Laws will govern matters not provided for in the contract (e. however..600.R. respondent filed with the National Labor Relations Commission (NLRC) a
complaint2 for illegal dismissal against petitioner ATCI as the local recruitment agency. 2010
ATCI OVERSEAS CORPORATION. J. for the position of
medical technologist under a two-year contract. 2001.
Under the MOA.
MA. 2000 but was terminated from employment on
Further. Petitioners’ motion for reconsideration having been denied by
Resolution5 of April 22.
Petitioners further contended that Ikdal should not be liable as an officer of petitioner ATCI. 2004. Sec.
In brushing aside petitioners’ contention that they only acted as agent of the Ministry and that they
cannot be held jointly and solidarily liable with it. Being the law intended by the parties (lex loci intentiones) to apply
to the contract. public order or public policy. as the foreign principal. No. represented
by petitioner. as a private recruitment agency.
The petition fails. Amalia Ikdal (Ikdal). 8042. shouldering her own air fare. morals.00. 2001. that the party invoking the application of a foreign law has the
burden of proving the law.
On appeal of petitioners ATCI and Ikdal. Saudi Labor Laws should govern all matters relating to the termination of the
employment of Gran. AMALIA G. specific causes for termination. etc. . thus. the appellate court held that under Sec.
G. in this case. the
immunity extended to them. the
International Law doctrine of presumed-identity approach or processual presumption comes into
. He is
presumed to know only domestic or forum law. terms and conditions as they may deem convenient. including the laws which
they wish to govern their respective obligations. given
that the foreign principal is a government agency which is immune from suit. 2 of the POEA Rules and Regulations) accord respect
to the "customs. with a monthly salary of US$1. the appellate court noted that under the law. that the terms of her engagement shall be governed by prevailing Kuwaiti
Civil Service Laws and Regulations as in fact POEA Rules accord respect to such rules.
As to petitioners’ contentions that Philippine labor laws on probationary employment are not
applicable since it was expressly provided in respondent’s employment contract.
Unfortunately for petitioner.
vs. petitioners posit that assuming arguendo that Philippine labor laws are applicable. which she
voluntarily entered into. the NLRC affirmed the Labor Arbiter’s decision by
Resolution4 of January 26.00. customs and
practices of the host country. held that respondent was illegally dismissed and accordingly ordered petitioners to pay
her US$3. the same was not substantiated. IKDAL and MINISTRY OF PUBLIC HEALTHKUWAITPetitioners.9 Verily. it can be sued jointly and severally with the foreign
principal for any violation of the recruitment agreement or contract of employment. contending that their
It is hornbook principle.g. company policies and labor laws and legislation of the host country. Respondent. v. 2007. petitioners argue that even the Philippine Overseas Employment Act (POEA) Rules relative
to master employment contracts (Part III. a contract freely entered into is considered the law between the parties who can establish
Respondent was deployed on February 17. and that respondent was validly dismissed for her failure to meet the
performance rating within the one-year period as required under Kuwait’s Civil Service Laws.1 all newly-hired employees undergo a probationary period of one (1) year and are
covered by Kuwait’s Civil Service Board Employment Contract No. the Ministry. The Court’s ruling in EDI-Staffbuilders Int’l. practices. being a foreign government agency.200.
Petitioner ATCI. finding that petitioners neither showed that
there was just cause to warrant respondent’s dismissal nor that she failed to qualify as a regular
As the Ministry denied respondent’s request for reconsideration. (emphasis supplied)
The imposition of joint and solidary liability is in line with the policy of the state to protect and
alleviate the plight of the working class. Skippers United Pacific v.
petitioners failed to discharge."
CARPIO MORALES. They thus conclude that it was patent error for the labor tribunals and the
appellate court to apply the Labor Code provisions governing probationary employment in deciding
the present case. [T]he obligations covenanted in the recruitment agreement entered into by and between the
local agent and its foreign principal are not coterminous with the term of such agreement so that
if either or both of the parties decide to end the agreement. Republic Act No.
No costs. the present petition for review on certiorari was filed. the appellate court affirmed the NLRC Resolution. 10 of Republic Act No. they appealed to the Court of Appeals.is AFFIRMED with the MODIFICATION that petitioner EDI-Staffbuilders International. denominated as a Memorandum of Agreement
(MOA). is immune from suit and. can be held jointly and
solidarily liable. this will render nugatory the
very purpose for which the law governing the employment of workers for foreign jobs abroad
was enacted.Otherwise. and the Ministry.
there has been no improvement of your habitual tardiness since our first memorandum
CARPIO MORALES. March 4. 176700
September 4. or by his deputy.
The liability of the principal/employer and the recruitment/placement agency for any and all claims
under this section shall be joint and several. 2003 with a request of explanation in your part
of your habitual tardiness. even if pleaded. in substance. petitioners submitted the following: MOA between respondent and the
Ministry. within ninety (90) calendar days after the filing of the complaint. 2003.
TRI-UNION INTERNATIONAL CORPORATION.7 (Underscoring supplied)
Again petitioner refused to receive the third Memorandum. 8042 on money claims. under the seal of such court. in August 2002. Thus the
subject certifications read:
This is to certify that the herein attached translation/s from Arabic to English/Tagalog and or vice
versa was/were presented to this Office for review and certification and the same was/were found
to be in order. Respondent. as provided by law.
SO ORDERED. but that petitioner refused
to receive it and in fact answered back and walked out on his immediate supervisor.play. If the office in which the record is kept is in a foreign country. without specifying the grounds therefor. is not proved. If the recruitment/placement
agency is a juridical being. 1997 Romero Montederamos (petitioner) as a stockman at its outlet at
the Metro Ayala Department Store. and authenticated by the seal of his office. (respondent). viz:
You are hereby warned to follow all rules and regulations of our company where you are
employed. Cebu Business Park. it sent petitioner a Violation Memorandum5 warning him for habitual tardiness.
vs. The performance bond
to be filed by the recruitment/placement agency. Cebu City. consul general. What attestation of copy must state. however. and a translated copy of the
certificate of termination. VII. that he later learned that the assistant could and actually did sign letters of
introduction for and in behalf of the supervisor. and June 3. 2003. 2003. However. To prove a foreign law. the same is in order too
following the express provision of R. — The record of public documents referred to in paragraph (a) of
Section 19. you refuse[d] to sign the memorandum for the said violation. wherein she noted
that in her first eight (8) months of employment. prompting the
latter to send him a Memorandum on June 18. 2003. they must not only be alleged. the party invoking it must present a copy thereof and
comply with Sections 24 and 25 of Rule 132 of the Revised Rules of Court which reads:
citing his tardiness on February 18. and
that on June 17. or consular agent or
by any officer in the foreign service of the Philippines stationed in the foreign country in which the
record is kept. 2003 reading:
You were given second memorandum last June 17. assumes no responsibility as to the contents of the
document/s. you answered and walked out from the office before your superior told you to do so. Instead of
submitting a copy of the pertinent Kuwaiti labor laws duly authenticated and translated by
Embassy officials thereat. 10. the corporate officers and directors and partners as the case may be. shall be answerable for all
money claims or damages that may be awarded to the workers. Petitioner. 25. respondent suspended petitioner for one month effective July
By petitioner’s claim. as the case may be.
By Memorandum of June 27.
G. the Labor Arbiters
of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction
to hear and decide. J.
However. that the copy is
a correct copy of the original. No. vice consul. viz:
translated copy11 (Arabic to English) of the termination letter to respondent stating that she did not
pass the probation terms. with a certificate that such officer has the
custody. Proof of official record. his filing on July 2. if there be any.:
Respondent Tri-Union International Corp. Mustapha Alawi. Money Claims.) was due to expire on June 30. the certificate may be made
by a secretary of the embassy or legation. the petition is DENIED.
citing his tardiness on April 22.—Notwithstanding any provision of law to the contrary. 2003.
Upon the other hand. which markets and distributes Company B
products. if the record is not kept in the Philippines. 2003. This provision shall be incorporated in the contract for
overseas employment and shall be a condition precedent for its approval. 24.A. she was given a rating of "Excellent" albeit it
changed due to changes in her shift of work schedule.R. respondent asked him to sign a contract of employment
covering five months2 but he refused. hired on July 18. (emphasis and underscoring supplied)
The Philippines does not take judicial notice of foreign laws. and respondent’s letter 13 of reconsideration to the Ministry. he realized that respondent had no intention of giving him one and was
terminating his employment. which
Memorandum required him to submit a written explanation therefor. 2003. may be evidenced by an official publication thereof
or by a copy attested by the officer having the legal custody of the record.12 both of which documents were certified by Mr. he repaired to respondent’s office but was
told that his supervisor was absent and that the latter’s assistant could not give the letter of
introduction by herself. May 20.
This memo serves as your warning. that he was told
to return the following day but was unable to do so because he had to accomplish clearance
requirements with Metro Ayala.
they must be proven. The attestation must
be under the official seal of the attesting officer. the presumption is that
foreign law is the same as ours. respondent was validly terminated. — Whenever a copy of a document or record is
attested for the purpose of the evidence. 2003. drawing respondent to send him a June 27. hence.
Instead. (emphasis supplied)
SEC. and April 1. (emphasis supplied)1avvphi1
Respecting Ikdal’s joint and solidary liability as a corporate officer. one of these is to attend [the] company meeting scheduled every Tuesday of the week. hence. respondent claimed as follows: 4
On April 15.
These documents. 2003. consul. do not sufficiently prove that respondent
was validly terminated as a probationary employee under Kuwaiti civil service laws.D. Head
of the Department of Foreign Affairs-Office of Consular Affairs Inslamic Certification and
Translation Unit. service incentive leave. 2003 Memorandum via
registered mail suspending him for one month effective July 1.
To prove the Kuwaiti law. 2003 a Complaint1 for illegal dismissal and non-payment of
overtime pay. drawing him to file on July 2. as required under the Rules. 2003. as represented by ATCI.
shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid
claims and damages. Where a foreign law is not pleaded or. what petitioners submitted were mere
certifications attesting only to the correctness of the translations of the MOA and the
termination letter which does not prove at all that Kuwaiti civil service laws differ from
Philippine laws and that under such Kuwaiti laws. 2003. Another situation that may arise after this memorandum will
be a ground for your suspension. May 6. 2003. or if he be the clerk of a court
having a seal. 2003. 2003.
This certification is being issued upon request of the interested party for whatever legal purpose it
may serve. 2003. or a specific part thereof. March 18. the attestation must state. This Office. 2003. 2003 of the Complaint against respondent. Thus. 2009
ROMERO MONTEDERAMOS. whether taken singly or as a whole. that
on June 24. (emphasis and underscoring supplied)
WHEREFORE. he informed respondent of his need for a letter of introduction to Metro Ayala
since his Metro Ayala Identification Card (I. that on June 26. which provides that the employee is subject to a probationary
period of one (1) year and that the host country’s Civil Service Laws and Regulations apply. exemplary and other
forms of damages. and
accompanied. And he failed to submit an explanation
behind his habitual tardiness. 2003. it sent petitioner a second Violation Memorandum 6 for habitual tardiness. allowances and separation pay before the National Labor
Relations Commission (NLRC) Regional Arbitration Branch No. 3 and that as his wait for a letter of introduction did
not come by June 30. the claims
arising out of an employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual moral. we apply Philippine labor laws in determining the issues
presented before us. when admissible for any purpose. knowing that he was already a regular employee.
12 by Decision dated February 21. backwages and other money claims. 2003 but we are giving you a chance to report on August 11. the Court of Appeals reversed and set aside the NLRC decision
and reinstated the Labor Arbiter’s decision. ordered respondent to reinstate petitioner without
backwages. entitled to
separation pay.000. insensibility or disdain by an employer becomes
unbearable to the employee. petitioner’s failure to report for work after the expiration of the period of his
Respondent’s inability to provide the letter-introduction for the renewal of petitioner’s Metro
Ayala I.8 (Emphasis and underscoring supplied)
Respecting petitioner’s claim that his refusal to sign the 5-month contract precipitated his
suspension. amount to constructive dismissal. however. by its claim.
In another vein. Petitioner’s claim
for overtime pay was denied as it was unsubstantiated. He. there being no concrete proof that he had
indeed rendered overtime service. hence. the NLRC
concluded. This is the third time you did this.R.
As for petitioner’s claim for overtime pay. JJ.
That respondent advised petitioner on July 31.
NATIONAL LABOR RELATIONS COMMISSION
AUSTRIA-MARTINEZ. 000307-05 NCMB NCR NS 09-199-05.Petitioner. For respondent’s claim of having settled it bears no documentation. It went on to hold that petitioner’s infractions resulting in his suspension ─ tardiness and
refusal to attend company meetings because he was not allegedly paid remuneration ─ were of his
own wrongdoings. 2006. 2003 does
not. 2003. by June 27. which claim he did not refute. the last day of the 30-day suspension of petitioner.
This memo serves as your last warning.
petitioner filed the present Petition for Review on Certiorari. suspended effective July 1. cannot be given credence. 2008
CHICO-NAZARIO.D. and service
incentive leave.R. and
His Motion for Reconsideration16 having been denied by Resolution17 of January 23.
By Decision15 of July 27. the appellate court noted that the refusal occurred in August 2002 yet. 2003 of his Complaint. 2003 but later
advising him to resume work 10 days later or on August 11. assailing the
Decision1dated 30 May 2007 rendered by the Court of Appeals in CA-G. and ended in his illegal dismissal when respondent denied his request for
the issuance of a letter of introduction for the renewal of his Metro Ayala I. among other things. 2003 that he was "supposed to report .
YNARES-SANTIAGO. SP No.
2003" as amounting to constructive dismissal.
While the employer bears the burden in illegal dismissal cases to prove that the termination was
for valid or authorized cause.D. 2007.22 Not any of these circumstances exists to call for a ruling that petitioner was
constructively dismissed. finding that there was
neither illegal dismissal nor abandonment. 2003. 2003.
NATIONAL UNION OF WORKERS IN HOTELS.
Brushing aside petitioner’s alleged tardiness in 2003 in light of respondent’s failure to present the
daily time records of petitioner who had been working for respondent since 1997.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court. 21
Constructive dismissal contemplates. first was last April 15. . 2003. He particularly highlights the fact that his one
month suspension ended on July 31. 2003. DENIED. Respondents..
and ACESITE PHILIPPINES HOTEL
and a subsequent Memorandum via registered mail. precipitated.
SO ORDERED. 2005. The same incident took place last June 26.
appealed via Certiorari to the Court of Appeals. but the
Violation Memoranda were issued to petitioner much later starting April 2003. Restaurants and
Allied Industries-Manila Pavilion Hotel (NUWHRAIN) against Manila Pavilion Hotel (the Hotel). It thus held that if
indeed respondent wanted to terminate the services of petitioner on the basis of such refusal. . reversed and set aside the Labor
Arbiter’s decision and entered a new one declaring petitioner to have been illegally dismissed. quitting because continued employment
is rendered impossible.last April 15. 179402
RESTAURANTS AND ALLIED INDUSTRIES—
MANILA PAVILLION HOTEL CHAPTER. you are suspended for one month effective July 1.
2003. You are supposed to report at
the office this August 1. It
clearly exists when an act of clear discrimination. the NLRC held
that respondent failed to refute petitioner’s allegation that he was made to sign a 5-month
contract but that he refused as he had attained regular status. the petition is. You disrespect our office personnel. No. failed to refute respondent’s
claim that it sent him a Violation Memorandum. Carreon. [the
following day]. in light of the foregoing discussions. dismissing for lack of merit the complaint
for unfair labor practice filed by petitioner National Union of Workers in Hotels." the NLRC granted him backwages and separation pay covering the period July 1.
The petition is bereft of merit. respondent advised petitioner
This is to remind you that your suspension ends this July 31. 2003 but he was given "a chance to report on August 9(sic). You
will resume work on August 1. Thereby. The appellate court held that respondent’s June 27.
September 30. 96171. Bare allegations of constructive dismissal. in itself.
Respondent’s Motion for Reconsideration 13 having been denied by Resolution14 of July 22. which
affirmed the Resolution2 dated 5 May 2006 of the National Labor Relations Commission (NLRC) in
NLRC NCR CC No.
2003 Memorandum to petitioner suspending him for one month ending July 31. J. it
could have done so much earlier. leaving him with no option but to forego his continued
employment. the Court finds well-taken the Labor
Arbiter’s grant thereto. cannot be considered an act of discrimination or insensibility to warrant a finding of
constructive dismissal. you were given a second memo with a request of explanation on your
part last June 17. was yet to expire on June
2003 to 2004. 2003 belied the charge of illegal
dismissal. petitioner’s filing on July 2. Another situation that may arise after this memo will be a
ground for your termination. 2003. 2003 at 9
o’clock in the morning. which was duly received by him on April 15. Such refusal of petitioner. unreasonable or unlikely. 2003 but you refuse[d] to sign.
CORPORATION. Instead. J. however.00.
On July 31. I am hoping [for] your presence on the date mentioned above. allowance. August 1. when
uncorroborated by the evidence on record. With these offenses. the appellate court held that respondent’s offer of reinstatement to petitioner runs counter
to the charge of illegal dismissal. Labor Arbiter Ernesto F. 2003. and pay him service incentive leave pay in the amount of P3. 2003" but that he was given a chance to report on August 11. the same fails. the NLRC.18 insisting that he was
illegally/constructively dismissed and not merely suspended by respondent.D. in fact. the employee must first establish by substantial evidence the fact of
dismissal from service. 2005.
Respecting petitioner’s claim for service incentive leave. It bears noting that petitioner’s Metro Ayala I. respondent just the same. offered to reinstate him during
the mandatory conference and even after receiving the promulgation of the decision of Labor
Arbiter. respondent claimed that it had paid petitioner overtime pay. He was.
. 2003 Memorandum. 2003.9 (Emphasis
and underscoring supplied)
Petitioner never ever reported for work. or a demotion in rank or a diminution of pay. subject to recomputation upon finality of the Decision.versus Chairperson.10
By Decision11 of November 10. you showed insubordination [on] your
part by answering back your immediate superior.20 requiring him to explain his habitual
tardiness on the therein indicated dates but that he failed to comply therewith.
Noting that "it is to the best interest of complainant that he should no longer be reinstated to his
former position.19This petitioner failed to discharge.
00 and exemplary damages of P20..6
On 21 June 2005. the Court of Appeals promulgated its Decision 22 in C. be compelled to act on any such UNION demand if made
within a period of sixty (60) days prior to the expiry date of this agreement.R. joined NUWHRAIN. but pending the disposition of the Petition for
Certification Election filed by NUWHRAIN. provided. It declared that the Hotel had acted prudently when it issued the Notices to the 36
employees after HIMPHLU demanded their dismissal.
NUWHRAIN filed a Motion for Reconsideration of the foregoing NLRC Resolution. the exclusive bargaining agent of the rank-and-file employees of the Hotel. and clarified that none of the 36 employees were dismissed by
upholding the Resolution dated 5 May 2006 of the NLRC in NLRC NCR CC No. The Notices and the statements made by the officers of the
respondent and the Hotel were allegedly intended to intimidate and coerce the employees in the
exercise of their right to self-organization. Firstly. The Notices directed the 36 employees to submit a
written explanation for their alleged acts of disloyalty and violation of the union security clause for
which HIMPHLU sought their dismissal. Secondly.A.Petitioner NUWHRAIN is a legitimate labor organization composed of rank-and-file employees of
the Hotel. 000307-05 NCMB NCR
During the 60-day freedom period which preceded the expiration of the Collective Bargaining
Agreement.3 while respondent Acesite Philippines Hotel Corporation is the owner and operator of
said Hotel. the Certification Election for regular rank and file employees of
the Hotel was held. entitled IN RE: Labor Dispute at Manila Pavilion
Hotel. NUWHRAIN proceeded to file a Notice of Strike before the National Conciliation
and Mediation Board (NCMB) on 8 September 2005 on the ground of unfair labor practice under
In a Resolution19 dated 5 May 2006. extending the effectivity of the existing Collective Bargaining
Agreement.000. and the
economic provisions of the same were to be effective for three years or until 30 June 2003.
Thirdly. starting on 1 May 2005 and ending on 30 June 2005. The case was docketed as NLRC NCR
the Hotel had not acted improperly as it did not wrongfully terminate any of the 36 employees. G.
implored NUWHRAIN’s members to withdraw their Petition for Certification Election and reaffirm
their membership in HIMPHLU. respondent
insisted that it did not commit unfair labor practice. NUWHRAIN claimed that it was entitled to moral
damages in the amount of P50.R.15 The Secretary of Labor intervened and
certified the case for compulsory arbitration with the NLRC. An Investigation
Report11 was attached to the said written demand. The Court of Appeals further
noted that the unhampered organization and registration of NUWHRAIN negated its allegation that
the Hotel required its employees not to join a labor organization as a condition for their
employment. the NLRC determined that the issuance of the Notices directing
the 36 employees to explain why they should not be dismissed was in compliance with the
Collective Bargaining Agreement provisions regarding the union security clause. failure to join the
UNION within the period specified in the immediately preceding section or failure to maintain
membership with the UNION in good standing either through resignation or expulsion from the
UNION in accordance with the UNION’s Constitution and by-laws due to disloyalty. 000307-05 NCMB NCR NS 09-199-05.
NUWHRAIN exercised the right to challenge the majority status of the incumbent union. who were
members of HIMPHLU. the NLRC pronounced that the Hotel was not guilty of unfair
labor practice. purportedly
expressing their preference for HIMPHLU during the reconciliatory conferences.21
On 30 May 2007.7 Thereafter. which provided for a union security clause that reads: 12
Section 2.14 However. The
parties subsequently re-negotiated the economic provisions of the Collective Bargaining
Agreement and extended the term of their effectivity for another two years or until 30 June 2005. which HIMPHLU won. On 1 September 2005. that the UNION shall hold the HOTEL free and harmless from
any and all liabilities that may arise should the dismissed employee question in any manner the
dismissal. The demand shall be accompanied by the UNION’s
investigation report and the HOTEL shall act accordingly subject to existing laws and jurisprudence
on the matter. effective 1 July 2005 to 30 June 2007. the NLRC adjudged that the execution of the Memorandum of Agreement
between respondent and HIMPHLU. It was denied by
the NLRC in another Resolution dated 30 June 2006.
stated her preference to deal with HIMPHLU. It further denied that respondent’s Vice President Norma Azores and the Hotel’s
Resident Manager Bernardo Corpus. made the statements attributed to them. HIMPHLU.A.20 Thus. The appellate court also gave credence to the
denial by the officers of the respondent and the Hotel that they made statements favoring
HIMPHLU over NUWHRAIN during the reconciliatory conferences. joining another
union or non-payment of UNION dues shall be a ground for the UNION to demand the dismissal
from the HOTEL of the employee concerned.
In the meantime. Bernardo Corpus.
by filing a Petition for Certification Election on 28 June 2005. the Resident Manager of the Hotel. NUWHRAIN was accorded by the Labor Relations Division of the Department of
Labor and Employment (DOLE) the status of a legitimate labor organization. Accordingly. The HOTEL shall not. while blaming NUWHRAIN for the labor problems of
The Hotel called the contending unions and the employees concerned for a reconciliatory
conference in an attempt to avoid the dismissal of the 36 employees. During the
reconciliatory conference held on 5 August 2005. It was accordingly certified as the exclusive bargaining
agent for rank and file employees of the Hotel. on 16 June 2006. however. Even thereafter. HIMPHLU served the Hotel with a written demand dated
28 July 200510 for the dismissal of 36 employees following their expulsion from HIMPHLU for
alleged acts of disloyalty and violation of its Constitution and by-laws.000. DISMISSAL PURSUANT TO UNION SECURITY CLAUSE. both of whom did not agree in the suggested course of action or
to any other manner of settling the dispute. in violation of Section 2. It clarified that these Notices did not amount
to the termination of the employees concerned but merely sought their explanation on why the
union security clause should not be applied to them. Jr. Thus. NUWHRAIN filed a Petition
forCertiorari before the Court of Appeals. and
not intended to interfere with or restrain the exercise of the right to self-organization of
NUWHRAIN’s members. extending the effectivity
of the existing Collective Bargaining Agreement for another two years. The parties signed the Memorandum of Agreement on
20 May 2005 and the employees ratified it on 27 May 2005. G. Article IV of the Collective
Bargaining Agreement. Jr.0017
Respondent countered that it merely complied with its contractual obligations with HIMPHLU
when it issued the assailed Notices. SP No. SP No. was entered into with the view of responding to the employees’ economic needs. the Industrial Relations Division of the DOLE allowed the registration of the
Memorandum of Agreement executed between HIMPHLU and the Hotel. (Emphasis provided)
On 1 August 2005. Norma Azores.
. 96171. paragraphs (a) and (b) of the Labor Code. nor was it liable for moral and exemplary
Both parties consented that the representation aspect and other non-economic provisions of the
Collective Bargaining Agreement were to be effective for five years or until 30 June 2005. respondent’s Vice President. 9
After the lapse of the 60-day freedom period. The reconciliatory
conferences facilitated by the Hotel were held on 5 August 2005 and 1 September
2005. stating that the 36 employees.4
The factual antecedents of the instant Petition are as follows:
The Hotel entered into a Collective Bargaining Agreement with HI-MANILA PAVILION HOTEL LABOR
UNION (HIMPHLU). The NLRC concluded that these
statements did not constitute unfair labor practice for they could not have coerced or influenced
either of the contending unions. the NLRC interpreted the statements made by the officials of respondent and the Hotel
during the reconciliatory conferences – encouraging the withdrawal of the Petition for Certification
Election and the reaffirmation by the 36 employees of their membership in HIMPHLU – as
proposed solutions to avoid the dismissal of the said employees.8
On 5 July 2007. the Hotel issued Disciplinary Action Notices 13 (Notices) to the 36 employees
identified in the written demand of HIMPHLU. docketed as C.16
NUWHRAIN asserted that the Hotel committed unfair labor practice when it issued the Notices to
the 36 employees who switched allegiance from HIMPHLU to NUWHRAIN. the NLRC declared that the claim for moral and
exemplary damages of NUWHRAIN lacked sufficient factual and legal bases. however. the Hotel and HIMPHLU
negotiated the extension of the provisions of the existing Collective Bargaining Agreement for two
years. 96171. Finally.
34 which NUWHRAIN failed to discharge in the present case. the Collective Bargaining Agreement includes a union security provision. hours of work. the Hotel
would have been subjected to a suit for its failure to comply with the terms of the Collective
Bargaining Agreement. despite the insistence of HIMPHLU. None of these acts were attributed to the
respondent in the present case. Nothing in
this Code or in any other law shall prevent the parties from requiring membership in a recognized
collective bargaining agent as a condition for employment. 31 the Court
declared the employer guilty of unfair labor practice for singling out its workers who refused to join
the employer’s preferred union by not giving them work assignments and regular status. even afforded the employees involved a chance to be heard.. bonuses. was to conduct
its own inquiry so as to make its own findings on whether there was sufficient ground to dismiss
the said employees who defected from HIMPHLU. and (2) the officers of the respondent and the Hotel allegedly uttered statements
during the reconciliatory conferences indicating their preference for HIMPHLU and their
disapproval of NUWHRAIN. who switched allegiance to
NUWHRAIN. one of the
proposals laid on the table to settle the dispute between the unions and preclude the dismissal of
the 36 employees was for NUWHRAIN to withdraw its Petition for Certification Election and. CIR. a natural bias
which somewhat puts into question their credibility as witnesses..
did make the statements being attributed to them.
In the present case. former members of HIMPHLU. During the reconciliatory
conferences. in Malayang Samahan ng Manggagawa sa M.. instead of each member presenting their sincere and individual narrations of
events. for HIMPHLU to re-accept the employees without sanctions. Had
the Hotel totally ignored this demand.
NUWHRAIN claimed that during the reconciliatory conferences. in which NUWHRAIN makes the following assignment of errors:
THE COURT OF APPEALS GAVE MORE PROBATIVE VALUE TO RESPONDENT HOTEL’S GENERAL AND
UNSWORN DENIAL VERSUS THAT OF PETITIONER’S SWORN TESTIMONY NARRATING
RESPONDENT’S HOTEL’S VIOLATION OF PETITIONER’S RIGHT TO SELF ORGANIZATION. Greenfield v.
"Union security" is a generic term which is applied to and comprehends "closed shop.
NUWHRAIN has the burden of proving its allegation that Norma Azores and Bernardo Corpus.
Undoubtedly. In Progressive Development Corporation v. NLRC. the only sensible option left to the Hotel. 1999." "union
shop. however. The issuance by the respondent of the Notices
requiring the 36 employees to submit their explanations to the charges against them was the
reasonable and logical first step in a fair investigation. gives the impression that it was signed in a perfunctory manner and motivated by a sense
of union solidarity. The self-serving statement signed by six of NUWHRAIN’s members have very
little weight. 37 SCRA 244 .25 Article 248(e) of the Labor Code recognizes the effectivity of a union shop clause:
Art. there is even less
possibility of sustaining a finding of guilt for unfair labor practice where respondent did not dismiss
the 36 employees. JRS BUSINESS CORPORATION V. SUCH A
RULING CONTRADICTS EXISTING JURISPRUDENCE SUCH AS MASAGANA CONCRETE PRODUCTS INC. Insular Life Assurance Co. HIMPHLU alleged that it had found these members guilty of disloyalty and demanded
their dismissal pursuant to the union security clause in the Collective Bargaining Agreement. and
eventually dismissing said employees. workers are able to negotiate with management on an
even playing field and with more persuasiveness than if they were to individually and separately
bargain with the employer. G. By thus promoting unionism. respondent denied that such statements were made and
that the officers of the respondent and the Hotel were merely misquoted.33 And in labor cases.26 In Villar v. An employer
is not considered guilty of unfair labor practice if it merely complied in good faith with the request
of the certified union for the dismissal of employees expelled from the union pursuant to the union
security clause in the Collective Bargaining Agreement. and ASUNCION V. The only act attributed to the respondent is its issuance of the Notices which. Ramos 29 clearly stated the
general rule: the dismissal of an employee by the company pursuant to a labor union’s demand in
accordance with a union security agreement does not constitute unfair labor practice. It is important to note that the Hotel did not
take further steps to terminate the 36 employees. Jr.
In its letter.R. NLRC.24
The instant Petition lacks merit..)
The law allows stipulations for "union shop" and "closed shop" as a means of encouraging workers
to join and support the union of their choice in the protection of their rights and interests vis-à-vis
the employer. 106916. 23
Hence. demanding the dismissal of 36 of its former members who joined NUWHRAIN. 248. Instead. even if made under oath. (Emphasis supplied. or such amount of relevant evidence which a reasonable mind might accept
as adequate to justify a conclusion. except of those employees who are
already members of another union at the time of the signing of the collective bargaining
agreement x x x. and the Hotel’s Resident Manager Bernardo Corpus. THE INSULAR LIFE ASSURANCE CO.
THE COURT OF APPEALS ERRED IN RULING THAT RESPONDENT HOTEL IS NOT GUILTY OF UNFAIR
LABOR PRACTICE CONTRARY TO ARTICLE 248 OF THE LABOR CODE AND THE SUPREME COURT’S
RULING IN PROGRESSINVE DEVELOPMENT CORPORATION V.NUWHRAIN’s Motion for Reconsideration of the aforementioned Decision of the Court of Appeals
was denied by the same court in a Resolution dated 24 August 2007. Unfair labor practices of employers.
The cases cited by NUWHRAIN are not applicable to the present case given their diverse factual
backgrounds. they must suffer
the consequences of their separation from the union under the security clause of the Collective
Bargaining Agreement. Before the Court of Appeals. 246 SCRA
445 . in
to being an unfair labor practice. it arranged for reconciliatory
conferences between the contending unions in order to avert the possibility of dismissing the 36
employees for violation of the union security clause of the Collective Bargaining Agreement. implored NUWHRAINs’
members to withdraw their Petition for Certification Election and reaffirm their membership in
HIMPHLU. as NUWHRAIN suggests it should have done. especially since the success of
this case would also redound to their benefit. wherein the officers of the respondent and the Hotel acted as mediators. SEPTEBMER 3.
(e) To discriminate in regard to wages. NUWHRAIN asserts that the sworn testimony signed by its six union members that the officers
of the respondent and the Hotel did utter the offending statements deserve more credence than
the unsworn denial of respondent. the members of NUWHRAIN would owe their loyalty to their union. LTC EMPLOYEES ASSOCIATION-NATU V." "maintenance of membership" or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as a condition affecting
employment. This argument is specious. and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization. 80 SCRA 434  and INSULAR
LIFE ASSURANCE CO.27 this Court held that employees have the right to
disaffiliate from their union and form a new organization of their own.28 To
avoid the clear possibility of liability for breaching the union security clause of the Collective
Bargaining Agreement and to protect its own interests. including the delayed
reinstatement of striking employees and the offering of bribes. the quantum of proof necessary is
substantial evidence. and wage increases to
loyal employees after refusing to bargain with the union. and (2) the acts of discrimination. and must accordingly be denied.
This Court. The fact that six members of the union signed a
single statement. 362 SCRA 56 .
Still. NO..32 for (1) the dismissal of some of its striking employees without even giving them an
opportunity to explain their side.
upon its receipt of the demand of HIMPHLU for the dismissal of the 36 employees. respondent’s Vice President Norma
Azores expressed her preference to deal with HIMPHLU. on the basis of the union security clause of the Collective Bargaining
NUWHRAIN maintains that the respondent committed unfair labor practice when (1) the Hotel
issued the Notices to the 36 employees. Court of Industrial Relations. the sole bargaining agent for the rank and
file employees of the Hotel. Jr. Inciong. NLRC.
The records clearly show that the Notices were issued after HIMPHLU served the Hotel with a letter
dated 28 July 2005. The burden of proof rests upon the party who
asserts the affirmative of an issue. while blaming NUWHRAIN for the Hotel’s
labor problems. Ltd.
Ltd. Employees Association-NATU v. 30 In the case at bar. The employer was found guilty of unfair labor practice in
Insular Life Assurance Co. the present Petition. absent any other independent evidence which indicates that
Subsequently. 2006. awarded separation pay in
lieu of reinstatement. and service incentive leave.
THE FACTUAL ANTECEDENTS
The petitioner. all pointing out his absences. 1979 in its wire drawing
department. It is only when such findings are not substantially supported by the records that this Court
will step in and make its independent evaluation of the facts. 174141
service incentive leave. The respondent maintained that his illness had
prevented him from reporting for work for ten (10) days. the labor arbiter rendered his decision dismissing the illegal
dismissal charge. to
submit himself to the company physician to determine whether he was fit to return to work
in accordance with existing policies. and the Court of Appeals affirmed. In their Reply before
the NLRC. but directed the petitioner "to pay the complainant his SIL and 13th
month pay in the amount of Five Thousand One Hundred Sixty-Six Pesos and 66/100
(P5. the NLRC held that the respondent was illegally
dismissed. NATIONAL LABOR RELATIONS COMMISSION and PERFECTO
On September 13.
In a Decision dated June 28. 35 Considering the expertise of these
agencies in matters pertaining to labor disputes.
they were not dismissed for their affiliation with NUWHRAIN. On March 31. On August 19. On January 31. the respondent refused to return to work and insisted
that he be paid his separation pay.
In the case at bar."12
The CA held that the respondent was constructively dismissed when the petitioner
repeatedly refused to accept the respondent back to work despite the valid medical reason
that justified his absence from work. He was thus driven to file a complaint against the petitioner. the respondent again reported for
work. the respondent filed a complaint with the Arbitration Branch of the
NLRC for underpayment/nonpayment of salaries and wages. wire and nails. and ECOLA. employed
respondent Perfecto Balogo (the respondent) since September 1. the decision was confined to the directive to
pay service incentive leave and 13th month pay. the labor arbiter found that no
dismissal took place. exhibiting a note from his doctor indicating that he was fit to work. 2003.
IN VIEW OF THE FOREGOING. the petitioner considered him on AWOL from August 7.
.166. 2002. The petitioner sent another letter to the respondent on August
21. On October 22. also by registered mail. as the respondent in fact failed to
respond to the petitioner’s memoranda.
In all. 2005.
Before this Court is the Petition for Review on Certiorari1 under Rule 45 of the Rules of
Court filed by Pentagon Steel Corporation (the petitioner).9 The
decision directed the company to pay the respondent separation pay. for this reason. 13th month pay. requiring an
explanation for his absence. 2002. Other letters were sent to the
respondent by registered mail. Thus. 2006. 2002 to August 21. informing him that he had been absent without official
leave (AWOL) from August 7. 4 denying the motion for
reconsideration that the petitioner subsequently filed.7
The Labor Arbiter Ruling
On October 27.66).I. 2009
PENTAGON STEEL CORPORATION. a corporation engaged in the manufacture of G. the respondent presented a medical certificate issued by the company
physician. overtime pay. did not allow him to resume work on the same date. the petitioner filed a special civil action for certiorari11 with the CA.10
The NLRC ruled that the petitioner’s defense of abandonment has no legal basis since
there was no clear intent on the respondent’s part to sever the employer-employee
relationship. holiday pay. inclusive of allowances and other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to the time of his
actual reinstatement. to no avail. The petitioner. 96171 is hereby AFFIRMED. the NLRC denied the
petitioner’s motion for reconsideration. the respondent maintained a
neutral stand in the dispute between HIMPHLU and NUWHRAIN.
2002. however. The petitioner alleged that the respondent absented himself from work on
August 7. The NLRC found it difficult to accept the petitioner’s allegation that the
respondent absented himself for unknown reasons.R. the petitioner never carried the burden of proving the legality of
a dismissal. When the respondent finally
reported for work on August 17. the respondent formally amended his complaint to include his claim
of illegal dismissal. Thus. 2002 without giving prior notice of his absence. backwages.
G. respondent had not committed any act which would constitute unfair labor practice. still during the conciliation
proceedings. in addition to backwages. he contracted flu associated with diarrhea and suffered
loose bowel movement due to the infection.
specifically questioning the ruling that no illegal dismissal took place. Findings of fact of the NLRC are given much weight and are considered conclusive by this
Court. 20062 modifying the Decision
of the National Labor Relations Commission (NLRC) dated January 31. 2002.
The NLRC Ruling
The respondent appealed the labor arbiter’s decision to the NLRC on November 14. that the officers of the
respondent and the Hotel did not make statements that would have constituted unfair labor
month pay.the officers of the respondent and the Hotel made such hostile and coercive utterances that tend
to interfere or influence the employees’ exercise of the right to self-organization. thus. As a result. The petitioner refused the respondent’s demand for
separation pay for lack of basis. the respondent
failed to respond. written in Filipino.
The CA Ruling
On May 6.
the NLRC Third Division vacated and set aside the decision of the labor arbiter. the NLRC also considered the strained
relationship existing between the parties and. It seeks to set aside:
(a) the Decision of the Court of Appeals (CA) dated June 28.
and in awarding the respondent separation pay and backwages. The CA concluded that the respondent complied with
the petitioner’s directive to submit a written explanation when the former presented the
medical certificate to explain his absences. this kind of action is inconsistent with
the respondent’s twenty-three (23) years of service and lack of derogatory record during
these years. however. The records are bereft of any
instance that would show that respondent rode roughshod over its employees’ freedom to decide
which union to join. 2002. 2002. the respondent presented the
medical certificate covering his period of absence.
On January 20. 2006.Respondents. 2003. 2002. 3 and
(b) the Resolution of the CA dated August 15. 6
During the conciliation proceedings on October 9. NUWHRAIN admitted that before issuing its Notices. The respondent
alleged that on August 6. 2005. As a consequence. The petitioner required him. 2003. No.36
Even the surrounding circumstances would contradict NUWHRAIN’s allegation that the respondent
interfered with or coerced its employees in their choice of union membership. the instant Petition is DENIED. 2002 and October 10 and 18. Together with this conclusion. the petitioner refused to take him back despite the
medical certificate he submitted. 2002. the CA affirmed the NLRC’s finding that the dismissal
was illegal. 37 Neither did the respondent
threaten the 36 employees who shifted their allegiance to NUWHRAIN with any form of reprisal. Costs against petitioner
however. according to the petitioner."8
In dismissing the respondent’s claim of illegal dismissal. 2002.R. separation pay. the NLRC found. The labor arbiter noted that the respondent’s allegation that he reported for
work is not reliable for lack of corroborating evidence. 2005. the petitioner sent
him a letter by registered mail dated August 12. the
respondent again reported for work on August 21 and 23. the findings of administrative agencies of the
Department of Labor are generally accorded not only respect. but also finality. Petitioner. 2002. but modified the challenged decision by adding reinstatement and the payment
of "full backwages. The assailed Decision dated 30 May
2007 of the Court of Appeals in CA-G. however. SP No. alleging
grave abuse of discretion on the part of the NLRC in ruling that illegal dismissal took place.
COURT OF APPEALS.
and requiring him as well to report for work. in legal contemplation. never
bothered to reply in writing. that his or her claim is groundless or even doubtful. to
sever the employer-employee relationship.18 A true offer of compromise does not. thus negating the petitioner’s charge of abandonment. thus. the respondent was
illegally dismissed. the petitioner must
show that the respondent’s overt acts point unerringly to his intent not to work
anymore. we shall first resolve the
propriety of the CA’s consideration of the proceedings that transpired during the mandatory
preliminary conference of the case. he even went back to his doctor for a certification that he was already fit to return
to work. since no
prudent person would dare offer or entertain a compromise if his or her compromise
position could be exploited as a confession of weakness. any communication made toward that end will be regarded as privileged. hypothetically. manifested through overt acts. Conciliators and similar officials
shall not testify in any court or body regarding any matters taken up at conciliation
proceedings conducted by them. The CA also held that
to deny the respondent the benefits due from his long service with the company would be
very harsh since his long service would not be amply compensated by giving him only
separation pay. We thus concur with the CA’s view that the respondent submitted a valid reason
for his absence and thereby substantially complied with the petitioner’s requirement of a
written explanation." Another written
explanation from him would be superfluous and even redundant if the facts already
appearing in the medical certificate would inevitably be stated again in that other written
involve an admission on the part of a defendant that he or she is legally liable.
if every offer to buy peace could be used as evidence against a person who presents it.
Before going into the substantive merits of the controversy. the CA erred by considering excluded materials in arriving
at its conclusion. The employer bears the burden of showing a
deliberate and unjustified refusal by the employee to resume his employment without any
intention of returning. for it is
. The respondent
presented a medical certificate from his doctor attesting to the fact that he was sick with flu
associated with diarrhea or loose bowel movement which prevented him from reporting for
work for 10 days. v. since the law favors the settlement of controversies out of court.
In the present case. Rule 130 of the Rules of Court. Inc.14
We agree with the petitioner. These findings of fact we duly accept as findings that we must not only respect. or on the
part of a plaintiff. the CA’s
conclusion on illegal dismissal.
Statements and/or agreements made at conciliation proceedings are privileged and cannot
be used as evidence
The petitioner contends that the CA cannot use the parties’ actions and/or agreements
during the negotiation for a compromise agreement as basis for the conclusion that the
respondent was illegally dismissed because an offer of compromise is not admissible in
evidence under Section 27. The CA also ruled that the respondent’s filing of a
complaint for illegal dismissal with a prayer for reinstatement manifested his desire to
return to his job.
which we discuss below. and in contemplation of
mutual concessions.21 To constitute
abandonment. the petitioner claims that there was no illegal
dismissal since the respondent abandoned his job. however.
2) in declaring that respondent was illegally dismissed by the petitioner.23 In this case. offers for compromise are irrelevant because they are not intended as admissions
by the parties making them. a person is entitled
to "buy his or her peace" without danger of being prejudiced in case his or her efforts fail. 16 Indeed. and (2) a clear intent.
The appellate court ruled that the petitioner failed to prove a clear and deliberate intent on
the respondent’s part to discontinue working with no intention of returning.
Second. Considering that "intention" is a mental state. but for a different reason. was not grounded solely on the parties’
statements during conciliation. Secretary of Labor15 when we pointedly disallowed the award made by
the public respondent Secretary. however. hence. Based on these other pieces of evidence. 2003 strongly speaks against the petitioner’s charge of abandonment.
Why the petitioner persistently refused to accept Balogo back despite his presentation of
the medical certificate and the doctor’s note about his fitness to work was not credibly
explained by the petitioner. there was no clear intention on the respondent’s part to sever the employeremployee relationship. since they are supported by substantial evidence. The reasons behind the exclusion are two-fold. but was amply supported by other evidence on record. the respondent had a valid reason for absenting himself from work. Balogo should be judged as having fully complied with the petitioner’s directive
by his presenting of the medical certificate to justify or explain his absences because the
medical certificate already constituted the required "written explanation. but the CA denied the motion for lack
of merit in the Resolution dated August 15." citing jurisprudence that the doctrine should be strictly applied in order not to
deprive an illegally dismissed employee of his right to reinstatement.The CA also disregarded the petitioner’s charge of abandonment against the respondent.
Petitioner moved for reconsideration of the decision. however. The CA took
note of the respondent’s eagerness to return to work when he obtained a note from his
doctor about his fitness to return to work." This was the provision we cited in Nissan Motors
Philippines. our ruling regarding the statement made during conciliation has
no effect at all on our final conclusion. the respondent.
First. two elements must concur: (1) the failure to report for work or absence
without valid or justifiable reason. and
3) in ordering that respondent be reinstated to his former position with backwages.24
In addition. using the lack of written explanation as a clever ruse to terminate Balogo’s
THE COURT’S RULING
We do not find the petition meritorious.
First. disagreed with the NLRC’s application of the doctrine of "strained
relations. the respondent’s filing of the amended complaint for illegal dismissal on
While we agree with the petitioner that the CA should not have considered the agreements
and/or statements made by the parties during the conciliation proceedings.17
but consider as final.
In evaluating a charge of abandonment. the jurisprudential rule is that abandonment is a
matter of intention that cannot be lightly presumed from equivocal acts.22
We agree with the CA that the petitioner failed to prove the charge of abandonment.
many settlements would be prevented and unnecessary litigation would result. Both tribunals found that
after the respondent presented his medical certificate to the petitioner to explain his
absence. we see no reason to depart from the unanimous factual findings of
the NLRC and the CA that the respondent’s actions after his absence from work for ten
(10) days due to illness showed his willingness to return to work. the petitioner imputes grave abuse of discretion against the CA:
1) in basing its decision on the proceedings that transpired when the parties were
negotiating for a compromise agreement during the preliminary conference of the case. The correct reason for the CA’s
error in considering the actions and agreements during the conciliation proceedings before
the labor arbiter is Article 233 of the Labor Code which states that "[i]nformation and
statements made at conciliation proceedings shall be treated as privileged communication
and shall not be used as evidence in the Commission. The petitioner points out that it wrote
the respondent various memoranda requiring him to explain why he incurred absences
without leave. the award was based on the information NCMB
Administrator Olalia secured from the confidential position given him by the company
during conciliation. We quote with approval the following discussion in the CA’s decision:
In his case. 2006.20 In the present case. It is the distinguishing mark of
an offer of compromise that it is made tentatively. we find that the CA did indeed consider the statements the parties
made during conciliation. The refusal is indicative of the petitioner’s ill motive towards
him. since it is made with a
view to avoid controversy and save the expense of litigation.
Respondent did not abandon his job
The rule is that the burden of proof lies with the employer to show that the dismissal was
for a just cause. The petitioner never effectively refuted the respondent’s reason for his
In this present petition.
vs. but who had to absent himself because of illness. the respondent manifested his
willingness to comply with the petitioner’s rules and regulations and his desire to continue
working for the latter. under these circumstances. The existence of strained relations between the parties was not clearly established." and the phrase cannot be given an overarching interpretation.
abandonment after the respondent’s long years of service and the consequent surrender of
benefits earned from years of hard work are highly unlikely. but will deprive the respondent of compensation for the
future productive years that his security of tenure protects.
WHEREFORE. To our mind. Separation pay may take into account the
respondent’s past years of service. Prior to his dismissal. 2006 in CA-G. and. 2006 and its Resolution dated
August 15. 182216
filing of the complaint for illegal dismissal is proof enough of the desire to return to
confirmatory tests were conducted by the Philippine Drug Screening Laboratory.6 Plantation Bay. Consequently. premises considered. occasioned by the respondent’s filing of an illegal dismissal case.25 The prayer for reinstatement.
Respondent is entitled to reinstatement not separation pay
As the CA correctly ruled.
Respondent Romel Dubrico (Dubrico) failed to take the drug test conducted on September
14. we find no evidentiary support for the conclusion that strained relations
existed between the parties. any separation pay paid at
this point cannot equal the retirement pay due the respondent upon retirement. however. does not
merit the severance of the employee-employer relationship between the parties. a drug testing laboratory. consequently. except only to the extent recognized by the law itself as expressed in jurisprudence. To be sure. illegal dismissal results because the employee is thus
prevented from returning to work under the façade of a violation of a company directive. GODFREY D. too.
That abandonment is negated finds support in a long line of cases where the immediate
filing of a complaint for illegal dismissal was coupled with a prayer for reinstatement. we uphold the CA ruling that the respondent should be reinstated to
his former position or to a substantially equivalent position without loss of seniority rights. as affirmed by
the CA. We
significantly note that by reporting for work repeatedly. benefit and privileges – there may be constructive
dismissal if an act of clear discrimination. the degree of hostility attendant to a litigation is not. Catinoy27describes this type of company action when
it ruled that "[c]onstructive dismissal does not always involve forthright dismissal or
diminution in rank. speaks against any intent to sever the
employer-employee relationship. As the NLRC correctly
held. inclusive of allowances
and other benefits or their monetary equivalent.
A dismissal effected through the fig leaf of an alleged violation of a company directive is no
less than an actual illegal dismissal that jurisprudence has labeled as a constructive
dismissal. 9165 (Comprehensive
Dangerous Drugs Act of 2002). the respondent’s service record was
unblemished having had no record of infraction of company rules. On several dates in September 2004. 20064 Resolutions of the National Labor Relations Commission
(NLRC) in Case No. V-000366-2005 in favor of herein respondents.
Respondent was constructively dismissed
The above conclusion necessarily leads us to sustain the NLRC’s finding. file a complaint for
illegal dismissal. 89587. a Department of Health-accredited laboratory.1avvphi1 The
petitioner’s actions. Hyatt Taxi Services.:
Via petition for review on certiorari. after 23 years of service. Again. if any.R.
G. as in this case. This is a clear manifestation of the
petitioner’s lack of respect and consideration for the respondent who had long served the
company without blemish. Petitioners. shall in a few years retire. SP No. No. we find it difficult to accept the petitioner’s allegation that the respondent absented
himself for unjustifiable reasons with the intent to abandon his job. labor disputes almost always result in "strained
relations. conducted surprise random drug tests on its employees. the NLRC erred when it awarded separation pay instead of
reinstatement. Inc. were administered on about 122 employees by
the Martell Medical Trade and Lab Services (Martell). The records disclose that respondent has been in the petitioner’s employ for 23
years and has no previous record of inefficiency or infraction of company rules prior to his
illegal dismissal from service. constitute constructive dismissal. v. VILLAFLOR. Since the application of this doctrine will result in the deprivation of
employment despite the absence of just cause. the implementation of the doctrine of
strained relationship must be supplemented by the rule that the existence of a strained
relationship is for the employer to clearly establish and prove in the manner it is called upon
to prove the existence of a just cause. he was issued a memorandum7 requiring him to appear in a mandatory
. said to have been carried out with the assistance of the Philippine National
Police-Scene of Crime Operations (SOCO). There thus exists no competent evidence on which to base the conclusion that
the relationship between the petitioner and the respondent has reached the point where
their relationship is now best severed.26
We additionally take note of the undisputed fact that the respondent had been in the
petitioner’s employ for 23 years. 31
In the present case. no basis
in reason exists for the petitioner’s theory that the respondent abandoned his job. DUBRICO. otherwise. petitioners Plantation Bay Resort and Spa (Plantation
Bay) and Efren Belarmino (Belarmino) challenge the Court of Appeals August 30.
We have consistently ruled that the doctrine of strained relations cannot be used recklessly
or applied loosely to deprive an illegally dismissed employee of his means of livelihood and
deny him reinstatement. 2004. When the
employer continuously refuses to accept the employee back despite his having a valid
reason for his absence from work.
CARPIO MORALES. J. of which Belarmino
is the Manager.
The drug tests.
Respondents are former employees of Plantation Bay located in Cebu. hence. after Plantation Bay issued a series
of memoranda and conducted seminars5relative to its drug-free workplace
policy. NGUJO and JULIUS D. or disdain by an employer becomes
so unbearable on the part of the employee that it could foreclose any choice by him except
to forego his continued employment.
Second. The circumstances in this case do not warrant an exception to the rule that
reinstatement is the consequence of an illegal dismissal. A
dismissal need not be expressed orally or in writing."
The respondent’s situation is no different from what Hyatt defined.
For all these reasons. sufficient proof of the existence of strained relations that would rule out the
possibility of reinstatement. Inc. Under the given facts. We take note. we hereby DENY the petition. the petitioner did not raise the defense of strained
relationship with the respondent before the labor arbiter. computed from the time his compensation
was withheld from him up to the time of his actual reinstatement.
AFFIRM the Decision of the Court of Appeals dated June 28. 2008 Resolution2dismissing their petition and affirming the March
24. 29 The imposition of this
legal consequence is a matter of law that allows no discretion on the part of the decision
maker.32 We agree with the CA’s specific finding that the
PLANTATION BAY RESORT and SPA and EFREN BELARMINO. We significantly note that payment of separation pay in lieu of
respondent’s reinstatement will work injustice to the latter when considered with his long
and devoted years in the petitioner’s service. that the
respondent. this issue – factual
in nature – was not the subject of evidence on the part of both the petitioner and the
respondent. in compliance with Republic Act No. (Phil. 2007
Decision1 and March 3. insensibility. 20063 and June 23. thereafter.
by itself.30 Indeed. for it can also be implied. an
unjustly dismissed employee can never be reinstated.28
The respondent’s illegal dismissal carries the legal consequence defined under Article 279
of the Labor Code: the illegally dismissed employee is entitled to reinstatement without loss
of seniority rights and other privileges and to his full backwages. Respondents. given the result of the
petitioner’s action and the attendant insensibility and disdain the employer exhibited. The petitioner.illogical for an employee to abandon his employment and. barred him from resuming his work under
the pretext that he had violated a company directive. that the respondent was dismissed without just cause. we quote with
approval the CA’s disquisition:
That Balogo was dismissed in contravention of the letter and spirit of the Constitution and
the Labor Code on the security of tenure guaranteed to him as employee is clear for us. compensation.R.
By Decision11 of April 18.
Indeed.m.20 (Emphasis supplied)
. arguing that. the NLRC held that the results of the confirmatory drug tests
cannot be given credence since they were conducted prior to the conduct by the employer
of the drug tests. 2006 Resolution with modification by
deleting the award of damages. petitioners reiterating the
same issues raised in the appellate court. Such move is proper." in compliance with Republic
While it is a well-settled rule. hence. we have ruled that where there is no showing of a clear.171avvphil1
Records show the following timeline. Drug:
Urine sample received on 09/29/04
at 5:14 p. these could not have been gotten from their urine samples
which were yet to undergo drug testing. For how could one "confirm" some thing which was yet to be established or
discovered? Needless to say. we agree with complainants that either or
both drug tests and confirmatory tests conducted on them were fabricated. technical rules of procedure shall be liberally construed in favor of the working class
in accordance with the demands of substantial justice. and the assailed Decision is AFFIRMED in toto. Labor Arbiter Jose G. based on the reports on respondents’ respective drug
tests18 administered by Martell and confirmatory tests19 undertaken by the Phil. the procedure for the random drug testing was not followed such that he
was not informed about his selection. the NLRC gravely abused its discretion
when it reversed its findings based on such new issue. the NLRC abandoned its earlier statement that it was the
SOCO which conducted the drug tests.
Issued on 09/29/04 at
Urine sample received on 09/29/04
at 5:24 p.m. On respondents’ motion for reconsideration. Before the scheduled conference or on September 19. To achieve this
goal. not the other way around. and that he was at the appointed time and place for
the pre-test meeting but that the duty manager was not around. the
employees submitted their explanations on the result of the tests. and that both tests must arrive at
the same positive result. they having been issued memoranda as to the mandatory
investigation and given the chance to.
In finding for respondents.m. how can the presence of shabu be confirmed when the results of the initial
screening were not yet out? Plantation Bay’s arguments that it should not be made liable
thereof and that the doubt arising from the time of the conduct of the drug and confirmatory
tests was the result of the big volume of printouts being handled by Martell do not thus lie. as they did refute the results of the drug tests by
submitting results of recent drug tests. Ngujo and Villaflor and three others thereupon filed on November
18.conference on September 20. and that they were
afforded due process. by Decision of October 26.
2004. disposing as follows:
As reflected in the above matrix.
Urine sample received on 09/29/04
at 5:32 p.
Issued on 09/29/04 at
p. the confirmatory test results were released earlier than
those of the drug test. the law considers the case a matter of
illegal dismissal. In the interest of
The Constitution no less directs the State to afford full protection to labor. by
giving the opposing party sufficient opportunity to meet and rebut the new or additional
evidence15 introduced. and if the results turned out to be
questionable or erroneous.
Respondents Dubrico. the NLRC. they should not be made liable therefor. holding that in testing positive for the use of shabu.
Time and again. thereby casting doubts on the veracity of the confirmatory results. 9165. At any rate. this time declaring that it was Martell which actually
administered them. 2005.m. We thus agree with complainants that if
the drug tests against them were true. The burden is on the employer to prove that the termination of
employment was for a valid and legal cause. the supposed confirmatory tests conducted on them
were not based on their urine samples that were the subject of the drug tests. hence. hence. 2005. the Appeal is DISMISSED.
On appeal. they relied on the results of the random drug tests undertaken by
an accredited and licensed drug testing facility. new or additional evidence may be introduced on appeal before the
The NLRC accordingly reversed the Decision of the Labor Arbiter. it
being crucial in determining the validity of respondents’ dismissal from their employment.
The NLRC did not err in considering the issue of the veracity of the confirmatory tests even
if the same was raised only in respondents’ Motion for Reconsideration of its Decision.13
Its motion for reconsideration having been denied by Resolution of June 23. they maintain that in terminating the
services of respondents. the petition just the same fails. as was the case here. Thus. Hence. the present petition. 16
On the merits. the veracity of the
confirmatory tests was raised by respondents only when they filed a belated Motion for
Reconsideration of the NLRC Decision. hence. 14 there are exceptions thereto among which
are for reasons of public policy or interest. it.
Issued on 09/29/04 at
p.m. Gutierrez dismissed the employees’
Technical rules of procedure are not strictly adhered to in labor cases.
Dubrico was later tested and found positive for use of methamphetamine hydrochloride
(shabu). reversed its October 26. requiring that a confirmatory test must be conducted if an employee is found
positive for drugs in the Employee’s Prior Screening Test. also applicable in labor cases. The importance of the confirmatory test is
underscored in Plantation Bay’s own "Policy and Procedures. the results thereof being the bases in terminating the employees’ services. inter alia. 2006. 2005 Decision and declared that respondents were
illegally dismissed. there is not only doubt that on the
version of respondents but also their conduct is highly suspicious based on their own
evidence. It ratiocinated:
Considering the indubitable documentary evidence on record notably submitted by
respondents [petitioners herein] themselves. 2004. inter alia. affirmed the Decision of the Labor
Arbiter. For an employee's dismissal to be valid.
(a) the dismissal must be for a valid cause and (b) the employee must be afforded due
process. 2006. by Resolution of March
24. which explanations were
Twenty other employees were found positive for use of shabu including herein respondents
Godfrey Ngujo (Ngujo) and Julius Villaflor (Villaflor). 2004 their respective complaints10 for illegal dismissal. we now rule that respondents were not really into drugs. questioning the conduct of the
drug tests without the presence of the DOLE Regional Director or his representative. (Emphasis
and underscoring supplied)1avvphi1
On the issue of due process.
In compliance with separate memoranda9 issued by the management of Plantation Bay. he left and failed to
be tested. he averring
that. that issues not raised below
cannot be raised for the first time on appeal. Additionally. It added that respondents were not given the opportunity to examine
the evidence and confront the witnesses against them through their counsel. provided due process is observed. Plantation Bay dismissed them including herein respondents.
Plantation Bay appealed to the Court of Appeals. Dubrico explained in writing8 his failure to undergo the drug test. they were guilty of serious
misconduct.m. valid and
legal cause for termination of employment. however.
It was Plantation Bay’s responsibility to ensure that the tests would be properly
administered. farce or
sham. Or that is the
confirmatory tests were correct.
The petition is bereft of merit. the drug testing should always come ahead of the
The Labor Arbiter discredited the drug test results presented by the employees as the tests
were taken more than 72 hours after the conduct of the random drug tests. Plantation Bay validly terminated their employment.
The appellate court affirmed the NLRC March 24.
there being no dismissal nor abandonment involved in this case. There were three categories of mechanics at the workplace.
Ramirez. judgment is hereby rendered
declaring respondent HILARIO RAMIREZ. The refusal of complainant to obey the lawful order of respondent Ramirez is
bolstered by his failure to report for work the following day. he insisted that complainant was never terminated
from his employment. He filed
a Motion for Reconsideration and/or Memorandum of Appeal with Urgent Motion to Reduce
Appeal Bond8 on the 9th day of the reglementary period or on 14 June 2006 before the
National Labor Relations Commission (NLRC). the Labor Arbiter decreed:
WHEREFORE. which required him to fix
the respondent’s troubled taxi unit. and
eventually as mechanic. Valcueba. the petition is DENIED. 2006. Valcueba claimed that
Ramirez hired him as mechanic on 28 May 1999. against Hilario Ramirez (Ramirez).00
b. Consequently.825. COURT OF APPEALS.000.
Other claims are DISMISSED for failure to substantiate. while
respondent must accept complainant back to work. which was increased to P165. on
February 26. As rescue or emergency mechanic temporarily assigned at Babag Station. nor did he
file an application for a leave of absence when he failed to report for work that day. He was not also paid the complete amount of his
13th month pay.R. complainant did not report at Calawisan. February 27. As emergency/rescue mechanic. whichever comes first. On 27 February 2006.538. he alleged that it was complainant who abandoned
his job. he did not report for work
anymore. Not even a declaration under oath by any affiant attesting to the credibility of
complainant’s allegation is presented. it is best
that the parties to this case should be restored to their previous employment relations.:
This is a Petition for Review under Rule 45 of the Rules of Court assailing the (a) 13 July
2007 Resolution1 of the Court of Appeals which dismissed the Petition for Certiorari under
Rule 65 filed by petitioner Hilario Ramirez for failure to properly verify his petition and to
state material dates and (b) the 7 March 2008 Resolution2 of the same court denying
petitioner’s Motion for reconsideration. Lapu-lapu
City. VALCUEBA the following:
a. Cebu City and
MARIO S. No. Valcueba did not report to the Calawisan station.00 he posted is not a reasonable amount in relation to the monetary
. those who were classified as rescue/emergency mechanics. is hereby ordered to pay
complainant MARIO S.98
Total Award -
In addition. Second were the mechanics paid on
pakyaw basis. then as helper of the mechanic.R. Rule VI of the NLRC Rules of Procedure. he was paid a daily wage
of P140. he filed this case. 4th Division.
Wage Differential . HON. No documentary evidence purporting to clearly
indicate that complainant was discharged was submitted for Our judicious consideration. the Commission found that
the same does not comply with Section 6. First
were the mechanics assigned to specific stations. Ramirez directed him to proceed to Calawisan. NLRC. through the Cashier of this
Arbitration Branch. 182626
December 4. complainant would be guilty of
abandonment and respondent of illegal dismissal. A
Consequently. Petitioner. owner of H. J. as the records are bereft of any evidence that respondent sent complainant a
letter which advised the latter to report for work. 27 February 2006. which
Upon a careful perusal of the motion to reduce bond. On 26 February 2006. On the contrary. We do not rule out a case of abandonment
because the overt act of not answering an emergency call is not insufficient to constitute
In the end. VIEWED FROM THE FOREGOING. secretary of Ramirez. the NLRC issued a Resolution9 dated 29 September 2006. complainant is ordered to report back for work within ten (10)
days from receipt hereof. did not report at
being no clear showing that the termination of respondents’ services was actuated by bad
faith. Proof of compliance
hereof.R. Josephine Torres.00. 2006. Ramirez insisted that Valcueba was never terminated from his employment. it was the latter who abandoned his job.98
13th Month Pay -
15. The refusal of Valcueba to obey the lawful order of Ramirez was
bolstered by his failure to report for work the following day. TAXI.
The facts are:
Respondent Mario Valcueba (Valcueba) filed a Complaint3 for illegal dismissal and
nonpayment of wage differential. must be submitted within the same period (sic). By 2002. Cebu City.7
Records show that Ramirez received the Labor Arbiter’s decision on 5 June 2006. On
the contrary.00 in 2005. On 26 February 2006. NOT GUILTY of illegally
dismissing complainant from the service. as he allegedly intended to return to Mindanao. it appearing that there is no dismissal to speak of
in this case. asserting that
Valcueba was first hired as construction worker.
On the side of respondent Ramirez. the Labor Arbiter rendered her decision. Lapu-Lapu City when
respondent Ramirez ordered him to answer an emergency call.
SO ORDERED. which
required him to fix Ramirez’s troubled taxi unit. and finally. within ten (10) days from receipt hereof. 13th month pay differential.
Complainant must go back to work within ten (10) days from receipt of this judgment. while he was
assigned at the Babag station.5
G. Lapu-lapu City when Ramirez ordered him to answer an emergency call. on the other hand. holiday pay.
Valcueba belonged to the last category.287. and respondent Hilario Ramirez must complainant (sic) back to
work as soon as the latter would express his intention to report for work or within the same
period of ten (10) days from receipt hereof. where she pointed out that:
The allegation of complainant that his refusal to work on pakiao basis prompted respondent
Hilario Ramirez to dismiss him from the service is not substantiated by any piece of
evidence. respondent HILARIO RAMIREZ.4 Aggrieved. presented a different version of the antecedents. as
rescue or emergency mechanic. Taxi.
After hearing. also within ten (10) days from receipt of
As to the appellate court’s deletion of the award of damages. the same is in order. he was assigned
to various stations to perform emergency/rescue work. In fact.In fine. as petitioners failed to indubitably prove that respondents were guilty of drug use in
contravention of its drug-free workplace policy amounting to serious misconduct. OWNER OF H. and service incentive leaves with claims for moral and exemplary
damages and attorney’s fees.
Valcueba that he would not be allowed to return to work unless he agreed to work on
pakyaw basis. there is reason for Us to doubt complainant’s submission that he was dismissed
from his employment grounded on disobedience to the lawful order of respondent.
HON.00 a day in 2003 and to P190.
Complainant advanced no reason as to why he failed to answer an emergency call of duty
nor did he file an application for a leave of absence when he failed to report for work that
day. The mechanic assigned in the area was then absent at
that time. as a unit had developed engine trouble and the mechanic assigned in that area was
Respondent has not offered a meritorious ground for the reduction of the appeal bond and
the amount ofP10. He
was not paid for holidays and rest days. Valcueba
advanced no reason regarding his failure to answer an emergency call of duty. The mechanic assigned in the area was
then absent at that time.Respondents. 2009
Resolving the motion.
respondents are deemed to have been illegally dismissed. temporarily assigned at Babag Station. premium pay for
holidays and rest days.
and may be exercised only in the manner
prescribed by and in accordance with the provisions of law.Decisions.14hence. order or award was secured through fraud or coercion. SP No.(a) The appeal shall be: 1) filed within
the reglementary period provided in Section 1 of this Rule. it behooves upon respondent to post the required bond. Consequently. the same holds true only when such motion complies with the
requirements stated above. it should be stressed that the right to appeal is not a natural right or a part of
due process. This
requirement is intended to assure the workers that if they prevail in the case. SP NO.
Ramirez’s Motion for Reconsideration was denied by the Court of Appeals in a resolution
dated 7 March 2008. namely: (1) payment of the appeal fees. the relief prayed for. ii) posting of a cash or surety bond as provided in Section 6 of this Rule.20
In this case. Rule 7 of the Rules of Court.
b.award of P45.
We first resolve the propriety of dismissal by the NLRC. the appeal of respondent is hereby DISMISSED for
non-perfection due to want of an appeal bond.
No motion to reduce bond shall be entertained except on meritorious grounds.
At the outset. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter." The word "only" in Articles 223 of the Labor
Code makes it unmistakably plain that the lawmakers intended the posting of a cash or
surety bond by the employer to be the essential and exclusive means by which an
employer's appeal may be perfected.R. he
loses the right to appeal. The party who seeks to avail
himself of the same must comply with the requirements of the rules. premises considered. exclusive of damages and attorney's fees. .
respondent’s failure to abide with the requisites so mentioned has not perfected his appeal. since the assailed Decision of the Labor Arbiter contains a monetary award in favor
of complainant. Bond. or orders. and with a statement of the date the
appellant received the appealed decision.
While the filing of a motion to reduce bond can be considered as a motion of preference in
case of an appeal.10
Ramirez filed a Motion for Reconsideration. he merely said that the bond was excessive and baseless without
amplifying why he considered it as such. .
Under the Rules. The word "may" refers to the perfection of an appeal
as optional on the part of the defeated party.19
Clearly. as amended. Requisites for Perfection of Appeal. and iv) proof of service upon the other parties. it is merely a statutory privilege. Failing to do so. for in three (3) legibly type
written or printed copies. but not to the compulsory posting of an appeal
bond. The relevant provision states:
SECTION 4. although Ramirez posted an appeal bond.
The mere filing of a motion to reduce bond without complying with the requisites in the
preceding paragraphs shall not stop the running of the period to perfect an appeal. (2) filing of
the memorandum of appeal.
It is intended to discourage employers from using an appeal to delay or evade their
obligation to satisfy their employees’ just and lawful claims. when Ramirez sought
a reduction of the bond. 21
Colby Construction and Management Corporation v. The meaning and the intention of the legislature in enacting a
statute must be determined from the language employed. the same was insufficient.12
Ramirez went up to the Court of Appeals.)
Sections 4(a) and 6 of Rule VI of the New Rules of Procedure of the NLRC. The case was docketed as CA-G.
reaffirms the explicit jurisdictional principle in Article 223 even as it allows in justifiable
cases the reduction of the appeal bond.98. his motion to reduce appeal bond shall not be
entertained and his appeal is dismissed for non-perfection due to lack of an appeal bond. the motion for reconsideration of respondent is
hereby DENIED for lack of merit.17
Article 223 of the Labor Code provides for the procedure in case of appeal to the NLRC:
02614. including graft and
. an appeal by the employer may be
perfected only upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Commission in the amount equivalent to the monetary
award in the judgment appealed from. 2) verified by the appellant
himself in accordance with Section 4. iii) a certificate
of non-forum shopping. respondent’s motion to reduce bond which
missed to comply with such requisites does not deserve to be entertained nor to be given a
preferred resolution. Moreover. and where there is no ambiguity
in the words used. Appeal. In a resolution dated 13 July 2007. and only
upon the posting of a bond in a reasonable amount in relation to the monetary award. which the NLRC resolved in a Resolution dated
20 December 2006 in this wise:
The mere filing of a motion to reduce bond without complying with the requisites of
meritorious grounds and posting of a bond in a reasonable amount in relation to the
monetary award does not stop the running of the period to perfect an appeal. awards. If serious errors in the finding of facts are raised which would cause grave or irreparable
damage or injury to the appellant.R.
Verily. Consequently. 3) in the
form of a memorandum of appeal which shall state the grounds relied upon and the
arguments in support thereof. (Emphasis supplied. If made purely on questions of law.13 the Court of Appeals dismissed the Petition
outright for failure of Ramirez to properly verify his petition and to state material dates.
WHEREFORE. the filing of the bond is not only mandatory but also a jurisdictional requirement that
must be complied with in order to confer jurisdiction upon the NLRC. Such appeal may be entertained only on
any of the following grounds:
a. they will
receive the money judgment in their favor upon the dismissal of the employer's appeal.16
The case presents no novel issue. an appeal by the employer may be perfected only upon the
posting of a bond. 223. as it was
not equivalent to the monetary award of the Labor Arbiter. 02614. and (3) payment of the required cash or surety bond. as amended. this petition where Ramirez prays that the "dismissal
resolution issued by the Court of Appeals be set aside and in its stead to give due course
to this petition by dismissing the unwarranted claims imposed by the NLRC for being highly
speculative. awards. resolution or order. — In case the decision of the Labor Arbiter or the Regional Director
involves a monetary award. and
The posting of a bond is indispensable to the perfection of an appeal in cases involving
monetary awards from the decision of the labor arbiter."15
The issues are:
PUBLIC RESPONDENT COURT OF APPEALS ERRED IN NOT CONSIDERING THE
SUBSTANTIAL COMPLIANCE OF THE FILED PETITION. or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days
from receipt of such decisions. appeals involving monetary awards are perfected only upon compliance
with the following mandatory requisites. with no evidence to support of (sic). Non-compliance with
the requirement renders the decision of the Labor Arbiter final and executory. then there is no room for construction. and 5) accompanied by i) proof payment of the required appeal
fee. National Labor Relations
Commission22 succinctly elucidates that an employer who files a motion to reduce the
appeal bond is still required to post the full amount of cash or surety bond within the tenday reglementary period. The intention of the lawmakers to
make the bond a mandatory requisite for the perfection of an appeal by the employer is
clearly expressed in the provision that an appeal by the employer may be perfected "only
upon the posting of a cash or surety bond.
In case of a judgment involving a monetary award. Thus. which shall either be in the form of cash deposit or surety bond
equivalent in amount to the monetary award.11
The decision of the Labor Arbiter became final and executory on 19 February 2007 and
was entered in the Book of Entries of Judgment on 4 May 2007.
THE DISMISSAL RESOLUTION (ANNEX "A") HAS NOT RESOLVED THE LEGAL
ISSUES RAISED IN CA-G. even pending resolution of his motion.
SECTION 6. if he desires to appeal.
The NLRC then held:
WHEREFORE. If the decision. premises considered.
National Labor Relations Commission. there is that proviso in Rule VI. – x x x. the court may simply order the correction of unverified pleadings or act on
them and waive strict compliance with the rules. produces no legal
effect. as a consequence of which the petition is treated as an
unsigned pleading. the same was inadequate compared to the
monetary award. or would deem such insufficient
postage as sufficient to perfect the appeal. Petition for certiorari. National Labor Relations Commission.24 this Court held that the NLRC did not act with
grave abuse of discretion when it denied petitioner’s motion. Court of Appeals.28
It is daylight-clear from the foregoing that while the bond may be reduced upon motion by
the employer. The clear intent of both statutory and procedural law is to require
the employer to post a cash or surety bond securing the full amount of the monetary award
within the ten (10)-day reglementary period.27
While Section 6. and (2) a reasonable amount in relation to the monetary
award is posted by the appellant. which under Section 3. Section  that the filing of such motion
does not stay the reglementary period."
It is clear from both the Labor Code and the NLRC Rules of Procedure that there is
legislative and administrative intent to strictly apply the appeal bond requirement. Rule 7 of the Rules of Court.
Nothing in the Labor Code or the NLRC Rules of Procedure authorizes the posting of a
bond that is less than the monetary award in the judgment. 00-2-10SC amending Section 4. we also find no reversible error in the assailed resolution of
the Court of Appeals dismissing Ramirez’s petition on the ground of failure to state material
dates. for the same failed to
elucidate why the amount of the bond was either unjustified or prohibitive. Rule 7 in relation to Section 1. even if it runs into millions.
the employer is still expected to post the cash or surety bond securing the full amount
within the said ten (10)-day period. the employer is still expected to post the cash or surety bond securing the full
amount within the said 10-day period. Nothing in the Labor Code or the
NLRC Rules of Procedure authorizes the posting of a bond that is less than the monetary
award in the judgment. Guanzon. it is true that verification is merely a formal
requirement intended to secure an assurance that matters that are alleged are true and
correct. we next resolve the issue of whether or not the Court of Appeals correctly
dismissed the petition of Ramirez.23
By stating that the bond is excessive and baseless without more.
2. 223 of the Labor Code and NLRC
Rule of Procedure.
For the same reason. does not necessarily give the
employer-appellant a `meritorious case’ and does not automatically warrant a reduction of
the appeal bond. 25 it was held that "a
substantial monetary award. the respondents therein filed their memorandum of
appeal and motion to reduce bond on the 10th or last day of the reglementary period. even pro hac vice. in Mcburnie v. The liberal interpretation and application of rules apply only to proper cases
of demonstrable merit and under justifiable causes and circumstances. Ramirez violated basic tenets of remedial law. Article 223 indubitably requires that the appeal be perfected only upon
the posting of the cash or surety bond which is equivalent to the monetary award in the
judgment appealed from. as it had no basis upon
which it could actually and completely determine Ramirez’s motion to reduce bond. v. the full discretion to grant or deny Ramirez’s motion to
reduce the amount of the appeal bond.
. and certainly none premised on the ground that its requirements are
mere technicalities. because in filing a special civil action for certiorari without indicating the requisite
material date therein. The
application of the Rules may be relaxed only when rigidity would result in a defeat of equity
and substantial justice. which prescribes the appeal bond requirement. 30
On Ramirez’s failure to verify his petition. There is little leeway for condoning a liberal
interpretation thereof. and the
Court should give utmost regard to this intention. No. But.)
While in certain instances.
Although they posted an initial appeal bond. The qualification effectively requires that unless the
NLRC grants the reduction of the cash bond within the ten (10)-day reglementary period. the NLRC justifiably denied the motion to reduce bond. There is a concession to the employer. in Ong v. or deems such insufficient posting as sufficient to perfect the
appeal. we allow a relaxation in the application of the rules to set right
an arrant injustice. therefore. Inc. Ramirez did not even come near to
substantially complying with the requirements of Art. he has not shown that
he had difficulty raising the amount of the bond or was unable to raise the amount specified
in the award of the Labor Arbiter. this is subject to the conditions that (1) the motion to reduce the bond shall
be based on meritorious grounds. as it arises solely from grant of statute. Petitioner failed to indicate in the petition the material dates showing when notice of the
resolution subject hereof was received and when the motion for reconsideration was filed in
violation of Section 3. The finding of the labor tribunal that Ramirez did
not present sufficient justification for the reduction thereof cannot be said to have been
done with grave abuse of discretion.26 (Emphases supplied.
In Calabash Garments. we have repeatedly emphasized that the requirement for posting the
surety bond is not merely procedural but jurisdictional and cannot be trifled with. The NLRC had. Thus. this Court invariably sustains
the Court of Appeals’ dismissal of the petition on technical grounds under this provision. such that strict adherence thereto is required. 31 However. Thus. the correct relief would be to reduce
the cash or surety bond already posted by the employer within the ten (10)-day
period. Rule VI of the NLRC’s New Rules of Procedure allows the Commission to
reduce the amount of the bond.
Again as in the NLRC.
All given. the Labor Code.32 the Court
states the rationale –
Rules of procedure are tools designed to promote efficiency and orderliness as well as to
facilitate attainment of justice. Failure of petitioner to properly verify the petition in accordance with A. Thus. We
have consistently enucleated that a mere claim of excessive bond without more does not
suffice. the filing of the motion to reduce bond shall
not stop the running of the period to perfect an appeal. The Court found no basis for therein respondent’s contention that the
awards of the Labor Arbiter were null and excessive.29
That settled. namely. The Court of Appeals found that he committed the
following fatal defects in his petition:
1. particularly Rule 65 of
the Rules of Court. but none obtains in
is a rule of jurisdiction and not of procedure.
unless considerations of equity and substantial justice present cogent reasons to hold
otherwise. otherwise. Rule 46 of the Rules of Court. While the bond may be reduced upon motion
by the employer. Noncompliance with such legal requirements is fatal and has the effect of rendering the
judgment final and executory. we never intend to forge a weapon for erring litigants to violate the rules
with impunity. If the NLRC does eventually grant the motion for
reduction after the reglementary period has elapsed. the exercise of the authority is not a matter of right on the
part of the movant. It must be emphasized that there is no inherent right to an appeal in a
For the same reasons above. In Moncielcoji Corporation v. Ramirez has not shown any justifiable ground to set aside technical
rules for his failure to comply with the requirement regarding the verification of his petition. and without proof that he
is incapable of raising the amount of the bond. Rule 65 of the Rules of Court which
now requires that a pleading must be verified by an affidavit that the affiant has read the
pleading and the allegations therein are true and correct of his personal knowledge or
based on authentic records.
We have always stressed that Article 223. but lies within the sound discretion of the NLRC upon a showing of
meritorious grounds. We emphasized in that case that it
behooves the Court to give utmost regard to the legislative and administrative intent to
strictly require the employer to post a cash or surety bond securing the full amount of the
monetary award within the 10-day reglementary period.Very recently. in
excluding damages and attorney's fees from the computation of the appeal bond. we sustain the dismissal of its petition by the
Court of Appeals on technical grounds. The qualification effectively requires
that unless the NLRC grants the reduction of the cash bond within the 10-day reglementary
period. which states:
On the other hand. Given that Ramirez is involved in taxi business. petitioner has not presented any persuasive reason for this
Court to be liberal. Not even
the filing of a motion to reduce bond is deemed to stay the period for requiring an appeal.
) Service Incentive pay 1. which declared private respondent
Salvador Salutin as not having abandoned his work by his alleged failure to report for work
during the pendency of the petitioner's appeal before the respondent Commission. that the petition for certiorari was filed forty-one (41) days from receipt
of the denial of the motion for reconsideration is hardly relevant. PREMISES CONSIDERED. absent valid and compelling reasons for such procedural lapse. order or
resolution subject thereof.
Its subsequent motion for reconsideration was itself denied on 20 May 1992.
SO ORDERED. the decision of the Labor Arbiter is already final and executory and
binding upon this Court.) and Rule 46. the date when a motion for new trial or for reconsideration was filed.557. The resolution
of 26 February 1992 became final and executory on 19 June 1992.:
The instant petition for certiorari seeks the reversal of the resolution of respondent National
Labor Relations Commission. respondent Jardine Davies. It also reinstated Salutin.
We are not unmindful of exceptional cases where this Court has set aside procedural
defects to correct a patent injustice. was filed and when notice of the denial
thereof was received. 2 A motion for reconsideration was filed which was denied in
NLRC's resolution of 13 January 1992.000. holiday pay. To merit liberality.R.
vs. the petition
was dismissed for failure to comply with this Court's Circular No. FOURTH DIVISION. the petition shall further indicate the material dates showing
when notice of the judgment or final order or resolution subject thereof was received.
Hilado. in the
alternative. dated 22 July 1992. Therefore.
On the other hand. However. Contents and filing of petition. Court of Appeals. the decretal portion of which reads:
WHEREFORE.700. Ramirez must show reasonable cause justifying his
non-compliance with the rules and must convince the court that the outright dismissal of the
petition would defeat the administration of substantive justice. Rule 46.33 the court explains that the requirement is for purpose of
determining the timeliness of the petition. which is ten percent (10%) of the total awarded amount. Hagad. docketed as
The petition shall be accompanied by a certified true copy of the judgment. and it posted
a supersedeas bond to answer for the monetary awards. in violation of
Respondent Salvador Salutin ("Salutin") was employed by petitioner Jardine Davies.
NATIONAL LABOR RELATIONS COMMISSION. JDI filed its first petition for certiorari with this Court. and a sworn certification of non-forum shopping as provided in the third paragraph
of Section 3.
e. as a demonstrator/agronomist to provide services relating to. of the Labor Code. order or Resolution sought to be
assailed. in amount of FIFTY SIX THOUSAND
SEVEN HUNDRED PESOS (P56. the date when notice of the judgment or final order or resolution was
received. premises considered. Such a petition is required to be filed not
later than sixty (60) days from notice of the judgment. Esuerte for private respondent. effect of non-compliance with requirements. the petition was bereft of any persuasive explanation as to why
Ramirez failed to observe procedural rules properly. No.
There are three material dates that must be stated in a petition for certiorari brought under
At the time when the above narrated events were still unfolding.84
c. dated 26 February 1992. concomitant to a liberal application of the
rules of procedure should be an effort on the part of the party invoking liberality to at least
explain its failure to comply with the rules. INC. The appellate
court saw no compelling need meriting the relaxation of the rules.00
dated 08 August 1991.) Holiday pay 13. The Resolutions of
the Court of Appeals dated 13 July 2007 and 7 March 2008 and the Resolutions of the
NLRC dated 29 September 2006 and 20 December 2006 are AFFIRMED. began when respondent Salutin filed a complaint against
petitioner JDI for illegal dismissal. the
petition filed with the Court of Appeals failed to indicate when the notice of the NLRC
Resolution was received and when the Motion for Reconsideration was filed. Section 3 (2nd par. Ramirez’s failure to verify and state material dates as
required under the rules warranted the outright dismissal of his petition. if any. without loss of
seniority and other rights.) Exemplary Damages 10. some material facts
occured beginning with JDI's appeal to the NLRC on the 08 August 1991 decision of the
Respondent is further ordered to pay complaint the following:
a. In our resolution. NLRC dismissed JDI's appeal for lack of merit but modified the
decision by eliminating the awards given for holiday pay. First. J.). In a decision. neither do we see any. 1993
JARDINE DAVIES. the petition is Denied for lack of merit.
In sum. the pertinent provision under Rule 46 is explicit:
Sec. we find no sufficient justification to set aside the NLRC and Court of Appeals
complaint was decided by the Labor Arbiter in favor of respondent Salutin in a decision. Thus.
The rationale for this strict provision of the Rules of Court is not difficult to appreciate. 1 in compliance with the writ of execution issued
by the Labor Arbiter pursuant to Article 223. Inc. The desired leniency cannot
be accorded.respondents. and
to give advice on. thus:
The requirement of setting forth the three (3) dates in a petition for certiorari under Rule 65
is for the purpose of determining its timeliness.00
b. The Court of Appeals was
not in any position to determine when this period commenced to run and whether the
motion for reconsideration itself was filed on time since the material dates were not stated.
SO ORDERED. assailing the 17 October 1991 decision and the resolution of 13 January
1992 of respondent Commission. service incentive leave pay. CEBU CITY. and
third. and attorney's fees. moral and exemplary damages. No. 3
On 14 February 1992.
JDI appealed the case to the National Labor Relations Commission (NLRC). paragraph 3. much less
commit grave abuse of discretion. 28-91 on forum-shopping. 3.35
The relaxation of procedural rules cannot be made without any valid reasons proffered for
or underpinning it. when
a motion for new trial or reconsideration. with prayer for reinstatement and backwages or. on 15 July 1985. 36
Wherefore.) Attorney's fees.60
(13th) month pay.00). Costs against
petitioner. & Hilado Law Office for petitioner. in denying due course to and dismissing the petition for
certiorari for its procedural defects. second. copies of all pleadings and documents relevant and pertinent
As explicitly stated in the aforementioned Rule. In
x x x. petitioner. In the case before us./Jardine
Agchem is hereby ordered to reinstate complaint to his former position. 34
Quite apparent from the foregoing is that the Court of Appeals did not err.
The controversy that spawned two (2) special Civil actions for certiorari (this instance
included) with this Court.000. moral
and exemplary damages. failure to comply with any of the
requirements shall be sufficient ground for the dismissal of the petition.
("JDI"). and an entry of
judgment was accordingly made on 20 August 1992. separation pay plus wage differential.) Moral Damages 20.
The failure of the petitioner to comply with any of the foregoing requirements shall be
sufficient ground for the dismissal of the petition. "on
payroll only". and with backwages. the promotion and use of JDI's pesticides and other products.
In the instant case. and
SALVADOR SALUTIN. beginning 26 August 1991. – x x x .
In actions filed under Rule 65. service incentive leave pay. Inc.
G.) 13th month pay P 8.115.100.
dated 17 October 1991. Section 1 (2nd par. without deduction and qualification. 103720. 106915 August 31. the date when notice of the denial thereof was received.
THE RESPONDENT COMMISSION ACTED WITH GRAVE ABUSE OF DISCRETION IN
DENYING PETITIONER'S CONTENTION/SUBMISSION THAT PRIVATE RESPONDENT
SALUTIN SHOULD BE CONSIDERED AS HAVING ABANDONED HIS WORK WHEN HE
FAILED TO REPORT FOR WORK PENDING THE PETITIONER-EMPLOYER'S APPEAL
FROM THE ARBITER'S DECISION GRANTING REINSTATEMENT. the respondent's prayer to declare or consider the
complainant to have abandoned his job for his alleged failure to report back to work during
the pendency of the appeal in this case is hereby denied for lack of merit. this was
the reason given by JDI in its ex parte motion. dated 3 March 1993. JDI sent a letter.
stressed by the petitioner. 12 Thus. that:
Salutin be considered as having abandoned his work considering his continuous absence
of more than three (3) weeks since he was required to report for work . 13 Considering that this matter was thus already taken up by
the petitioner in its first petition for certiorari.
The complainant's motion for release of his salary since 24 September 1991.00 per month. which this Court dismissed with finality. without loss of seniority and other rights.
Be that as it may. Hence. . The final determination of the
rights and obligations respectively of the parties is the ultimate and final resolution of this
Commission. ALTHOUGH AT
THAT TIME HE WAS ON REINSTATEMENT ON PAYROLL — THIS
NOTWITHSTANDING PETITIONER'S SHOWING THAT SUCH FAILURE TO REPORT
WAS BECAUSE RESPONDENT-EMPLOYEE WAS THEN WORKING ALSO WITH
ANOTHER COMPANY. although perhaps belatedly
Petitioner raises this sole assignment of error. there must be
a deliberate unjustified refusal of the employee to resume his employment. that:
As to the issue of whether the complaint-appellee Salvador Salutin is guilty of work
The records show that at the time JDI filed its Manifestation and Motion.
When JDI filed its first petition for certiorari (in G. also filed a motion praying that JDI be
ordered to release his withheld salary. from 01 September to 31 December 1991. among other things. to Salutin directing him to report for work to their Bacolod
Branch Manager. In this instance. assailing the 17 October 1991 decision of NLRC. In its resolution. viz:
WHEREFORE. Inc.m. 103720.
On 17 October 1991. did not stain the picture at all. in cases of illegal dismissal is an
ancillary relief under R. The questioned resolutions of the
National Labor Relations Commission are AFFIRMED. to set for hearing the aforestated
"Manifestation and Motion. Premises considered. who was then on payroll reinstatement since 26 August 1991. respondent Commission denied JDI's "Manifestation & Motion"
stating. manifest his desire to assume his work with the petitioner. 4
Salutin opposed the motion. the fact that he was
gainfully employed elsewhere. He did not stay long. more especially in the present case. as
Aggressive Crop Technician. on 24 September 1991. claiming that he was forced to leave in haste because he was
then suffering from a serious ailment. Is this enough? What we have heretofore said is this —
For abandonment to constitute a valid cause for termination of employment. the
petitioner should really now be barred from invoking anew that issue in this present
(second) petition. 8
On 22 July 1992.Labor Arbiter. since after fifteen minutes or so. received a lettercertification issued by the Officer-in-Charge of King's Enterprises of Iloilo City that Salutin
was employed by Monsato Philippines.
This Court's resolution of 26 February 1992. he
did. for which he was paid P5.A. denying the petition in G. He submitted a medical certificate to support his
claim. Salutin. in
the Arbiter's decision subject of this appeal be considered and held as waived or lost.146." 6 Salutin. Respondent Salutin's interim employment.
When the motion for reconsideration was likewise denied. Mere absence is not sufficient. dated 16 June 1992. the sole basis of its prayer for a declaration that Salutin abandoned his work was his
alleged unauthorized absences from the date he was notified to report for work. not guilty of
abandonment when his failure to report for work was because he was also working for
another entity from 01 September 1991 to 31 December 1991? Correlatively. 5
On 13 January 1992. dated 17 October
1991. we second the wellconsidered view of NLRC. as an
added argument on the alleged abandonment of work by Salutin. it also raised. JDI instituted on 18 September
1992 the present petition for certiorari. for "peptic ulcer". No. and that any
award for reinstatement to his former position. thus —
The order of immediate reinstatement pending appeal.. Salutin did report. Inc. This refusal
must be clearly shown. in fact. this Court resolved to issue
a temporary restraining order. however. Shortly after the reinstatement of Salutin "on payroll only". and the temporary restraining order
issued by this Court is hereby LIFTED. HENCE HE WAS RECEIVING SALARIES FROM BOTH. he.
Prescinding from its receipt of an information that Salutin was employed elsewhere. 11 A shift to
a new focus took place when. the same fate of dismissal is still inevitable. Here. during the period from 01 September to 31
December 1991. 6715 granted to a dismissed employee to cushion him and his
family against the impact of economic dislocation or abrupt loss of earnings. Although this Court is not a
trier of facts. but that he
could not stay long because he was ailing at that time. . inter alia. on his part. 7 claiming that he had reported for work when he
recovered from his ailment on 11 December 1991. it may still wade through the records of a case if only to prevent any possible
misgiving in its ultimate disposition. he left and was
reported not to have thereafter returned for work. however. until he
formally seeks for the enforcement of the decision is likewise denied. it must be accompanied by overt
acts pointing to the fact that the employee simply does not want to work anymore. respondent Commission issued its assailed resolution stating. JDI
filed an ex parte motion.
In the subsequent pages of its petition. 103720) with this Court on 14
February 1992. as directed. did seek medical consultation on 7 November 1991.
dated 21 September 1991. the petition is hereby DISMISSED. did
respondent Commission not gravely abuse its discretion when it did not take into
consideration such other employment?
Our answer is in the negative.. JDI filed a "Manisfestation and Motion" with the respondent
Commission stating. at its request. on 30 January 1992. No. JDI forthwith stopped further payment of
salary to Salutin. If the
employee chooses not to report for work pending resolution of the case appeal. dated 16 June 1992. as directed reported on the 24th of September 1991 at around
9:20 a.R. certain uncontroverted facts show just exactly
the opposite. this is a new and factual matter which has to be determined and resolved in
appropriate proceedings before the Arbitration Branch.
. to set for hearing the
Manifestation and Motion of 17 October 1991. he
foregoes such a temporary relief and is not paid of his salary. 14 The petitioner's evidence to establish Salutin's
supposed abandonment of work is the certification of employment issued by King's
Enterprises at the request of herein petitioner to the effect that Salutin had indeed been
employed by Monsato Philippines. at the Corazon Locsin
Montelibano Memorial Regional Hospital. and on 11 December 1991.
SO ORDERED. 15
Abandonment of position is a matter of intention expressed in clearly certain and
unequivocal acts. JDI.
During the pendency of this petition. JDI paraphrased the assigned issue in this wise: Is
Salutin. JDI filed an "urgent motion for the issuance of writ of
preliminary injunction and/or restraining order" to prevent the respondent Commission from
enforcing its resolution of 22 July 1992 and 25 August 1992 insofar as it ordered the
reinstatement of Salutin. NLRC denied the said ex parte motion in the
now assailed resolution of 22 July 1992.
where the charge of abandonment is seriously controverted.
became final and executory on 19 June 1992.R.