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force which the alleged contractors supply, suggesting

the existence of a "labor only" contracting scheme
prohibited by law

BROTHERHOOD LABOR UNITY MOVEMENT vs

HON. ZAMORA (1991)

It is important to emphasize that that in a truly

independent contractor-contractee relationship, the
fees are paid directly to the manpower agency in lump
sum without indicating or implying that the basis of
such lump sum is the salary per worker multiplied by
the number of workers assigned to the company.
In the
CAB,
the
alleged
independent
contractors were paid a lump sum representing only
the salaries the workers were entitled to, arrived at by
adding the salaries of each worker which depend on
the volume of work they had accomplished individually.
Therefore, there is no independent contractorcontractee relationship.

FACTS:

Petitioners-members of Brotherhood Labor

Unit Movement of the Philippines (BLUM), worked
as cargadores or pahinante since 1961 at the
SMC Plant.
Sometime in January 1969, the
petitioner workers numbering 140 organized
themselves and engaged in union activities.
Believing that they are entitled to overtime and
holiday pay, the petitioners aired their gripes and
grievances but it was not heeded by the
respondents. One of the union member was
dismissed from work. Hence, the petitioners filed a
complaint of unfair labor practice against
respondent SMC on the ground of illegal dismissal.
On the other hand, SMC argued that the
complainant are not or have never been their
employees but they are the employees of the
Guaranteed Labor Contractor,
an independent
labor contracting firm
Labor Arbiter Nestor Lim rendered a decision
in favor of the complainants which was affirmed
by the NLRC
On appeal, the Secretary set aside the NLRC
ruling stressing the absence of an employeremployee relationship

WHEREFORE, PETITION IS GRANTED.

HAWAIIAN-PHILIPPINE COMPANY vs
GULMATICO (1994)
FACTS:

Issue: Whether an employer-employee relationship

exists between petitioners and respondent San Miguel
Corporation

HELD: YES
In determining the existence of an employer-employee
relationship, the elements that are generally
considered are the following: (a) the selection and
engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the
employer's power to control the employee with respect
to the means and methods by which the work is to be
accomplished. It is the called "control test" that is the
most important element

In the CAB, petitioners worked continuously and

exclusively for an average of 7 years for the company.
Considering the length of time that the petitioners
have worked, there is justification to conclude that
they were engaged to perform activities necessary or
desirable in the usual business of trade of the
respondent. Hence, petitioners are considered regular
employees.

Respondent-Union, the National Federation of

Sugar Workers-Food and General Trades, filed an
action against petitioner Hawaiian Phil Co. for
claims under RA 809 (The Sugar Act of 1952).
Respondent Union alleged that they have never
availed of the benefits due them under the law.
Under the said act: the proceeds of any
increase in participation granted to planters under
this Act and above their present share shall be
divided between the planter and his laborers in the
following proportions. 60% of the increase
participation for the laborers and 40% for the
planters.
Petitioner argued that respondent Labor Arbiter
Gulmatico has no jurisdiction over the case
considering their case does not fall under those
enumerated in Article 217 of the Labor Code which
provides the jurisdiction of Labor Arbiters and the
Commission. Further, petitioner contends that it
has no ER-EE relationship with the respondent
sugar workers and that respondent union has no
cause of action because it is the plantersemployers who is liable to pay the workers share
under LOI No. 854.

Issue1: Whether public respondent Labor Arbiter has

jurisdiction to hear and decide the case against
petitioner
HELD: NO
While
jurisdiction
over
controversies
involving
agricultural workers has been transferred from the
Court of Agrarian Relations to the Labor Arbiters under
the Labor Code, said transferred jurisdiction is
however, not without limitations. The controversy must
fall under one of the cases enumerated under the
Labor Code which arise out of or are in connection with
an ER-EE relationship

Even assuming that there is a contract of employment

executed between SMC and the said labor contractor,
the court ruled that Guaranteed and Reliable Labor
contractors have neither substantial capital nor
investment to qualify as an independent contractor
under the law. The premises, tools and equipments
used by the petitioners in their jobs are all supplied by
the respondent SMC. It is only the manpower or labor

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the case to Cebu City.

In the CAB, there is no ER-EE relationship between

petitioner company and respondent union. Hence,
respondent Labor Arbiter has no jurisdiction to hear
and decide the case against petitioner.

Issue: Whether the Labor Arbiter acted with grave

abuse of discretion when it entertained Youngs motion
to transfer

Issue1: Whether respondent union has a cause of

action
HELD: NO
To have a cause of action, the claimant must show that
he has a legal right and the respondent a correlative
duty in respect thereof, which the latter violated by
some wrongful act or omission.

HELD: NO
The SC ruled that litigations should, as much as
possible, be decided on the merits and not
technicalities. Petitioners were able to file an
opposition on the motion to transfer case which was
considered by Labor Arbiter Cenizares. Hence, there is
no showing that they have been unduly prejudiced by
the motions failure to give notice and hearing.

In the instant case, it would show that the payment of

the workers share is liability of the plantersemployers, and not of the petitioner milling company.
It is disputed that petitioner milling company has
already distributed to its planters their respective
shares. Hence, it has fulfilled its part and has nothing
more to do with the subsequent contribution by the
planters of the workers share.

However, Young cannot derive comfort from this

petition. The SC held that the question of venue relates
more to the convenience of the parties rather than
upon the substance and merits of the case. This is to
assure convenience for the plaintiff and his witness and
to promote the ends of justice under the principle that
the State shall afford protection to labor. The
reason for this is that the worker, being the
economically-disadvantaged
party,
the
nearest
governmental machinery to settle the dispute must be
placed at his immediate disposal, and the other party
is not to be given the choice of another competent
agency sitting in another place as this will unduly
burden the former

WHEREFORE, PETITION IS GRANTED.

DAYAG vs HON. CENIZARES, JR. (1998)

FACTS:

In the instant case, the ruling specifying the NCR

Arbitration Branch as the venue of the present action
cannot be considered oppressive to Young because his
residence in Corinthian Gardens also serves as his
correspondent office. Hearing the case in Manila would
clearly expedite the proceedings and bring speedy
resolution to the instant case.

Petitioners were hired to work as tower crane

operators by one Alfredo Young, a building
contractor doing business in the name of Youngs
construction. In 1991, they were transferred to
Cebu City to work for Youngs Shoemart Cebu
Project. Petitioner William Dayag asked permission
to go to Manila to attend family matters and was
allowed to do so but was not paid for January 2330 due to his accountability for the loss of certain
construction tools. The other petitioners left due to
harassment by Young. Thereafter, petitioners
banded together and filed a complaint against
Young before the NCR Arbitration Branch NLRC
which was assigned to Labor Arbiter Cenizares.
Young filed a Motion to transfer the case to
the Regional Arbitration Branch, Region VII of the
NLRC. He contended that the case should be filed
in Cebu City because there is where the workplace
of the petitioners.
Petitioners opposed the same, arguing that all
of them are from Metro Manila and that they could
not afford trips to Cebu. Besides, they claimed that
respondents main office is in Corinthian Garden in
QC.
Labor Arbiter Cenizares GRANTED Youngs
motion to transfer the case in Cebu.
Petitioners appealed to NLRC but it was
dismissed. Hence, they filed a MFR and this time
the Commission SET ASIDE its previous decision
and remanded the case to the original arbitration
branch of the NCR for further proceedings.
Young filed his own MFR and the NLRC
reinstated its first decision directing the transfer of

WHEREFORE, PETITION IS GRANTED.

NATIONAL UNION OF BANK EMPLOYEES vs

LAZARO (1988)
FACTS:

The Commercial Bank and Trust Company

entered into a collective bargaining agreement with
Commercial Bank and Trust Company Union,
representing the file and rank of the bank with a
membership of over 1,000 employees
In 1980, the union, together with the National
Union of Bank EEs submitted to bank management
proposals for the negotiation of a new collective
bargaining agreement. The following day, however,
the bank suspended negotiations with the union.
The bank entered into a merger with BPI which
assumed all assets and liabilities.
The Union went to the CFI Manila, presided
over by respondent Judge Lazaro, and filed a
complaint for specific performance, damages, and
preliminary injunction against private respondents.
Private Respondent filed a Motion to Dismiss

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on the ground of lack of jurisdiction of the court.

Respondent Judge dismissed the case on the
ground that the complaint partook of unfair labor
practice dispute and jurisdiction over which is
vested in the labor arbiter.

Issue: Whether the election of the Directors were

validly held
HELD: YES
Under PD No. 902-A, Controversies in the election or
appointments of directors, trustees, officers or
managers of such corporations, partnerships or
associations, are explicitly declared to be within the
original and exclusive jurisdiction of the Securities and
Exchange Commission.

Issue: Whether courts may take cognizance of claims

for damages arising from labor controversy
HELD: NO
The SC sustained the dismissal of the case and
held that the act complained of involves collecting
bargaining which is categorized to be an unfair labor
practice. Under the Labor Code, all cases involving
unfair labor practices shall be under the jurisdiction of
the labor arbiters.

In the CAB, it shows that the controversy between the

parties is intra-corporate in nature because it revolves
around the election of directors, officers or managers
of the Rural Bank of Ayungon, the relation between
and among its stockholders, and between them and
the corporation. It is well settled that the decision of a
tribunal not vested with appropriate jurisdiction is null
and void.

As correctly held by the respondent court, an unfair

labor practice controversy is within the original and
exclusive jurisdiction of the Labor Arbiters and the
exclusive
appellate
jurisdiction
of
the
NLRC.
Jurisdiction is conferred by law and not
necessarily by the nature of action. In the CAB, PD
No. 442, as amended by Batas Blg. 70, has vested
jurisdiction upon the Labor Arbiters, a jurisdiction the
courts may not assume.

Therefore, the judgment of the Labor Arbiter and the

NLRC are void for lack of jurisdiction.
WHEREFORE, PETITION IS GRANTED

ESPINO vs NLRC and PAL (1995)

WHEREFORE, PETITION DENIED

FACTS:
DY vs NLRC (1986)

FACTS:

Private Respondent Carlito H. Vailoces was the

manager of the Rural Bank of Ayungon (Negros
Oriental). He was also a director and stockholder of
the bank.
In 1983, a special stockholders meeting was
called for the purpose of electing the members of
the banks Board of Directors. Petitioner Lorenzo
Dy was elected president. Vailoces was not reelected as bank manager.
Vailoces filed a complaint for illegal dismissal
and damages with the Ministry of Labor and
Employment against Lorenzo Dy asserting that Dy,
after obtaining control of the majority stock of the
bank, called an illegal stockholders meeting and
elected a Board of Directors controlled by him; and
that he was illegally dismissed as manager, without
giving him the opportunity to be heard first.
Dy denied the charge of illegal dismissal and
pointed out that Vailoces position was an elective
one, and he was not re-elected as bank manager
because of the Boards loss of confidence in him
brought about by his absenteeism and negligence
in the performance of his duties
The Executive Labor Arbiter ruled that
Vailoces was illegally dismissed because he was not
afforded due process of law. NLRC affirmed the
decision of the Labor Arbiter because of the appeal
of the petitioners was filed late.

Petitioner Leslie W. Espino was the Exec. Vice

President-Chief Operating Officer of respondent
Phil Airlines (PAL) when his service was terminated
in 1990 as a result of the findings of the panels
created by then President Corazon C. Aquino to
investigate the administrative charges filed against
him. It appears that petitioner and other several
senior officers of PAL were charged for their
involvement in 4 cases, labeled as Goldair,
Robelle, Kabash/Primavera, and Middle East.
The PAL Board of Directors issued separate
resolutions wherein Espino was considered resign
from the service effective immediately for loss of
confidence
Espino filed a complaint for illegal dismissal
against PAL with the NLRC, Arbitration Branch,
NCR.
PAL argued that board resolutions cannot be
reviewed by the NLRC and that the recourse of the
petitioner Espino should have been addressed by
way of appeal, to the OP.
Labor Arbiter Cresencio J. Ramos rendered a
decision in favor of petitioner Espino
PAL asserted that the Labor Arbiters decision
is null and void for lack of jurisdiction over the
subject matter as it is the SEC, and not the NLRC
which has jurisdiction over involving dismissal or
removal of corporate officers.
NLRC promulgated a resolution and this time
ruled in favor of PAL on the ground of lack of
jurisdiction
Petitioner Espino contended that it is the NLRC

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that has jurisdiction over the case as it involves the

termination of a regular employee and involves
claim for backwages and other benefits and
damages

Issue: Whether the NLRC has jurisdiction over the

complaint filed by the petitioner for illegal dismissal

HELD: NO
Under P.D. No. 902-A, it is the Securities and Exchange
Commission and not the NLRC that has original and
exclusive jurisdiction over cases involving the removal
from employment of corporate officers. Under the said
decree, the SEC has the exclusive and original
jurisdiction to hear and decide cases involving
Controversies in the election or appointments of
directors, trustees, officers or managers of such
corporations, partnerships or associations.

Movilla filed a case against petitioner with the

DOLE in Davao City. However, in 1992, Movilla died
while the case was being tried. Hence, he was
substituted by his heirs, private respondents
herein.
The Labor Arbiter dismissed the complaint on
the ground that the controversy is intra-corporate
in nature hence it is the SEC who has jurisdiction
over and not the Labor Arbiter.
On appeal, the NLRC reversed the Labor
Arbiter and ruled that the case was one which
involved a labor dispute, thus the NLRC has
jurisdiction to resolve the case

Issue: Whether the NLRC has jurisdiction over the

controversy and not the SEC
HELD: YES
The NLRC has jurisdiction over the case. The fact that
the parties involved in the controversy are all
stockholders and the corporation does not necessarily
place the dispute within the jurisdiction of SEC. In
order that the SEC can take cognizance of a case, the
controversy must pertain to factors such as the status
or relationship of the parties or the nature of the
question that is the subject of their controversy.
Furthermore, it does not necessarily follow that every
conflict between corporation and its stockholders can
only be resolve by the SEC.

It has been ruled that a corporate officers dismissal is

always a corporate act and/or an intra-corporate
controversy and that nature is not altered by the
reason or wisdom which the Board of Directors may
have in taking such action. Evidently, this intracorporate controversy must be place under the
specialized competence and expertise of the SEC.
The fact that petitioner sought payment of his
backwages, other benefits, as well as damages and
attorney's fees in his complaint for illegal dismissal will
not operate to prevent the SEC from exercising its
jurisdiction under PD 902-A. As to the contention of
Espino that PAL is estopped from questioning the
jurisdiction of the NLRC, it is well-settled that
jurisdiction over the subject matter is conferred by law
and the question of lack of jurisdiction may be raised
anytime even on appeal.

In the CAB, the claim for unpaid wages and separation

pay involves a labor dispute. It does not involve an
intra-corporate matter, even when it is between a
stockholder and a corporation. It relates to an ER-EE
relationship which is distinct from the corporate
relationship of one with the other. Therefore, since the
complaint of Movilla involves a labor dispute, it is the
NLRC which has jurisdiction over the CAB.

WHERFORE, PETITION IS DENIED

WHEREFORE, PETITION IS DENIED

MAINLAND CONSTRUCTION CO., INC. vs
MOVILLA (1995)
FACTS:

PEPSI-COLA BOTTLING COMPANY vs HON.

MARTINEZ (1982)

Ernest Movilla, who was a CPA during his

lifetime, was hired by Mainland in 1977. Thereafter,
he was promoted to the position of Administrative
Officer.
He
has
a
monthly
salary
of
P4,700.00/month and he was registered with SSS
as an employee of petitioner corporation
In 1991, The DOLE conducted a routine
inspection on petitioner corporation and found that
it committed some irregularities in the conduct of
its business. On the basis of its findings, DOLE
ordered petitioner corporation to pay its 13
employees, which included Movilla, an amount
representing
their salaries, holiday pay,
service incentive leave pay differentials, unpaid
wages and 13th month pay. All the employees
listed in the DOLEs order were paid by
petitioner except Movilla.

FACTS:

Respondent Abraham Tumala, Jr. was salesman

petitioner company in Davao City. In the annual
Sumakwel contest conducted by the company, he
was declared the winner of the Lapu-Lapu Award
for his performance as top salesman of the year,
an award which entitled him to a prize of a house
and lot. Petitioner company, despite demands,
have unjustly refused to deliver said prize.
It was alleged that in 1980, petitioner
company, in a manner oppressive to labor and
without prior clearance from the Ministry of Labor,
arbitrarily and illegally terminated his employment.
Hence, Tumala filed a complaint in the CFI Davao
and prayed that petitioner be ordered to deliver his

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prize of house and lot or its cash equivalent, and to

pay his back salaries and separation benefits.
Petitioner moved to dismiss the complaint on
grounds of lack of jurisdiction. Respondent Tumala
maintains that the controversy is triable exclusively
by the court of general jurisdiction

Issue: Whether it is the court of general jurisdiction

and not the Labor Arbiter that has exclusive
jurisdiction over the recovery of unpaid salaries,
separation and damages
HELD: NO
SC ruled that the Labor Arbiter has exclusive
jurisdiction over the case. Jurisdiction over the subject
matter is conferred by the sovereign authority which
organizes the court; and it is given by law.
Jurisdiction is never presumed; it must be
conferred by law in words that do not admit of
doubt.

Issue: Whether the Labor Arbiter and the Commission

has jurisdiction over the money claim filed by private
respondent
HELD: NO
The Labor Arbiter and the Commission
jurisdiction over the money claim of Vega.

Under the Labor Code, the NLRC has the exclusive

jurisdiction over claims, money or otherwise, arising
from ER-EE relations, except those expressly excluded
therefrom. The claim for the said prize unquestionable
arose from an ER-EE relation and, therefore, falls
within the coverage of P.D. 1691, which speaks of all
claims arising from ER-EE relations, unless expressly
excluded by this Code. To hold that Tumalas claim for
the prize should be passed upon by the regular courts
of justice would be to sanction split jurisdiction and
multiplicity of suits which are prejudicial to the orderly
of administration of justice.

FACTS:

no

In the CAB, the undertaking of petitioner SMC to grant

cash awards to employees could ripen into an
enforceable contractual obligation on the part of
petitioner SMC under certain circumstances. Hence,
the issue whether an enforceable contract had arisen
between SMC and Vega, and whether it has been
breached, are legal questions that labor legislations
cannot resolved because its recourse is the law on
contracts.

SAN MIGUEL CORP. vs NLRC (1988)

has

The court ruled that the money claim of private

respondent Vega arose out of or in connection with his
employment with petitioner. However, it is not enough
to bring Vegas money claim within the original and
exclusive jurisdiction of Labor Arbiters.

WHEREFORE, PETITION IS GRANTED.

implemented, could not achieve the desire result.

Further, petitioner Corporation alleged that the
Labor Arbiter had no jurisdiction.
The Labor Arbiter dismissed the complaint for
lack of jurisdiction because the claim of Vega is
not a necessary incident of his employment and
does not fall under Article 217 of the Labor Code.
However, in a gesture of compassion and to show
the governments concern for the working man,
the Labor Arbiter ordered petitioner to pay Vega
P2,000 as financial assistance. Both parties
assailed said decision of the Labor Arbiter. The
NLRC set aside the decision of the Labor Arbiter
and ordered SMC to pay complainant the amount
of P60,000

Where the claim 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 NLRC.

Petitioner San Miguel Corporation (SMC)

sponsored an Innovation Program which grant cash
rewards to all SMC employees who submit to the
corporation ideas and suggestions found to
beneficial to the corporation.
Private Respondent Rustico Vega, who is a
mechanic in the Bottling Department of the SMC
submitted an innovation proposal which supposed
to eliminate certain defects in the quality and taste
of the product San Miguel Beer Grande.
Petitioner Corporation did not accept the said
proposal and refused Mr. Vegas subsequent
demands for cash award under the innovation
program. Hence, Vega filed a complaint with the
then Ministry of Labor and Employment in Cebu.
He argued that his proposal had been accepted by
the methods analyst and was implemented by the
SMC and it finally solved the problem of the
Corporation in the production of Beer Grande.
Petitioner denied of having approved Vegas
proposal. It stated that said proposal was turned
down for lack of originality and the same, even if

WHEREFORE, PETITION IS GRANTED

SUARIO vs BPI (1989)

FACTS:

Petitioner Leonardo D. Suario was the head of

the loan section of respondent BPI in 1976. During
his employment he pursued his studies of law with
the consent of the BPI
Sometime in March 1976, Suario verbally
requested the then VP and Branch Manager, Mr.
Armando N. Guilatico, for a 6-month leave of
absence without pay in order for him to take the
pre-bar review in Manila. Mr. Guilatico informed

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Suario that there would be no problem as to the

requested leave of absence. Sometime in May
1976, Suario received a verbal notice from the new
Branch Manager, Mr. Vicente Casino, that he was
approved only a 30 day LOA. However, Mr
Guilatico, then assigned in Head Office as VP
advised Mr. Casino to inform Suario to avail the 30day LOA and proceed to Manila since the request
would be ultimately granted. Suario availed the 30day LOA and proceeded to Manila. During the 1 st
week of August, he received a letter ordering him
to report back for work since his request was
disapproved. He decided not to report back
because of the considerable expenses already
incurred in Manila. Hence, he received a
application for a clearance to terminate on the
ground of resignation/or abandonment. Suario
failed to file his opposition because he was busy
taking up the review
During the 1st week of December 1976, Suario
went to respondent BPI but was verbally informed
that he was already dismissed. He wrote a letter to
the respondent bank requesting for a written and
formal advise as to his real status. The lawyers of
BPI replied that his services is terminated.
Therefore, Suario filed a complaint for separation
pay, damages and attorneys fees against the BPI
on the ground that he was illegally dismissed.
The Labor Arbiter ordered BPI to pay Suarios
claim for separation pay. His claim for damages
and attorneys fee were dismissed for lack of merit
On appeal, NLRC affirmed the decision of the
Labor Arbiter

SOCO vs MERCANTILE CORP. OF DAVAO (1987)

FACTS:

Issue1: Whether NLRC has no authority to entertain

claims for moral and other forms of damages
HELD:NO
P.D. 1691, a decree which substantially reenacted
Article 217 of the Labor Code in its original form,
nullified P.D. 1367 and restored to the Labor Arbiters
and the NLRC their jurisdiction to award all kinds of
damages in cases arising from ER-EE relationship.

Issue2: Whether petitioner Suario is entitled to his

claim for moral damages
HELD: NO
Although it is already settled that Labor Arbiters are
allowed to award moral and other forms of damages
arising from ER-EE relations, it is consistently ruled
that in the absence of a wrongful act or omission or of
fraud or bad faith, moral damages cannot be awarded

The SC did not find any bad faith or fraud on the part
of the bank officials who denied the petitioners
request for 6 months leave of absence without pay. He
was merely given personal assurances which could be
reconsidered in later developments. There is no
evidence that they meant to deceive the petitioner.
Therefore, the fact that petitioners request was
denied, does not entitle him to damages.
WHEREFORE, PETITION DENIED.

Respondent Mercantile Corp is engaged in the

sale and distribution of Ice Cream in Davao.
Petitioner, who was employed as driver of
respondents delivery van, was the President
MERCO Employees Labor Union, an affiliate of the
Federation of Free Workers (FFW).
An investigation was conducted due to reports
that Soco was carrying on his union activities
during working hours. It appears that on January
1979, Soco was ordered to deliver ice cream at
Imperial Hotel and Your Goody Mart, but he
deviated from his usual route and went to his coemployee, who was then off duty. The personnel
officer advised Soco to report to his office to
explain his unauthorized deviation but Soco did not
comply. MERCO wrote to FFW asking for a
grievance conference but Soco refused to attend in
his belief that such in unnecessary. Hence, MERCO
suspended Soco for 5 days for violation of
Company Rule No. 19(a).
On February 13, 1979, Soco, after making
deliveries of ice cream, went to the Office of the
SPFL Union. The Manager of MERCO saw the
company vehicle parked along the street. He called
two of his co-employees and took out the rotor of
the van. When Soco came out of the building, he
was unable to start the engine and called for
company assistance. Again, he was advised to
report to the office to explain but refused to do so.
He also refused to attend in the grievance
conference.
Soco filed a complaint for Unfair Labor Practice
against MERCO alleging that the 5 days suspension
imposed on him was on account of his union
activities. On the other hand, MERCO filed an
application for clearance to terminate the services
of Soco. These 2 cases were consolidated and
tried jointly as agreed by the contending parties
The Regional Director granted MERCOs
application to terminate employment of petitioner
and dismissed the Socos complaint for unfair labor
practice
On appeal, the Deputy Minister of Labor
affirmed
Petitioner Soco argued that under Policy No. 6
of the Ministry of Labor and Employment (MOLE),
the Regional Director has no jurisdiction to hear
and decide unfair labor practice cases because
such belongs to the Conciliation Section of the
Regional Office of the MOLE. In short, such cases
should be first resolved by the Labor Arbiter and
not the Regional Director. Furthermore, Soco
asserts that the Deputy Minister of Labor violated
the constitutional provision of security of tenure of
employees and that assuming that he violated the
company rule, he cannot be dismissed because his

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violation only minimal and did not hamper the

operations of MERCO.

month pay, uniform allowances, night shift

differential pay, holiday pay and overtime pay, as
well as for damages against the DOA and the
Sultan Security Agency before the Regional
Arbitration Branch in Cagayan De Oro City

The Labor Arbiter found DOA jointly and

severally liable with Sultan Agency for the payment
of money claim of the guards

The Labor Arbiter issued a Writ of Execution

commanding the City Sheriff to enforce and
execute the judgment against the DOA and Sultan.
The City Sheriff levied on execution 3 motor
vehicles of the DOA

Petitioner DOA filed a petition for injunction,

prohibition and mandamus, with prayer for
preliminary injunction with the NLRC Cagayan De
Oro. It argued that the writ of execution was
effected without the Labor Arbiter having duly
acquired jurisdiction over the DOA. Hence, its
decision was null and void. It also pointed out that
the attachment of its property would jeopardize its
governmental functions to the prejudice of the
public good

NLRC --- dismissed the petition for injunction

for lack of basis and a Temporary Stay of
Execution is issued for a period of 2 months but
not extendible.

DOA charges NLRC for grave abuse of

discretion for refusing to quash the writ of
execution. It argued that money claims against the
Department falls under the exclusive jurisdiction of
the Commission on Audit. Further, the DOA asserts
that the NLRC has disregarded the cardinal rule on
the non-suability of the State.
NLRC, on the other hand, argue that petitioner has
impliedly waived its immunity from suit by concluding
a service contract with Sultan Security Agency

Issue1: Whether the Regional Director has no

authority to decide the unfair labor practice cases
HELD1: NO
After voluntarily submitting a cause and encountering
an adverse decision on the merits, its too late for the
loser to question the jurisdiction or the power of the
court.
In the CAB, in the initial hearing conducted by the
Regional Director, it was agreed by the parties to
consolidate the 2 cases considering that both cases
concern the same parties and the issues involved are
interrelated. Petitioner Soco obviously accepted the
jurisdiction of the Regional Director by presenting his
evidence. By having asked for affirmative relief,
without challenging the Regional Director's power to
hear and try his complaint for unfair labor practice, he
cannot rightfully now challenge the resolution made in
said cases by the same Director, based on the latter's
alleged lack of jurisdiction.
Issue2: Whether petitioner can avail the security of
tenure
HELD2:
It is the prerogative of an employer company to
prescribe reasonable rules and regulations necessary
or proper for the conduct of its business and to provide
certain disciplinary measures in order to implement
said rules and to assure that the same would be
complied with.
A rule prohibiting employees from
using company vehicles for private purpose without
authority from management is, from our viewpoint, a
reasonable one.
The Court is not unmindful of the fact that petitioner
has, as he says, been employed with petitioner
Company for eighteen (18) years. On this singular
consideration, the Court deems it proper to afford
some equitable relief to petitioner due to the
past services rendered by him to MERCO. Thus, it
is but appropriate that petitioner should be given by
respondent MERCO, separation pay, equivalent to one
month salary for every year of his service to said
Company.

Issue: Whether the DOA can be sued

HELD:
Under the Constitution, it says that the State cannot
be sued without its consent. This simply means that a
sovereign is exempt from suit on the ground that there
can be no legal right as against the authority that
makes the law on which the right depends. This
doctrine is also called the royal prerogative of
dishonesty because it grants the State the prerogative
to defeat any legitimate claim against it by simply
invoking its non-suability

WHEREFORE, PETITION IS DENIED but MERCO is

nevertheless,
ordered to
grant Soco
his
separation pay.

This rule is not really absolute for it does not say that
state may not be sued under any circumstances. The
States consent may be given expressly or impliedly.
Express consent may be made through a general law
or special law. On the other hand, Implied consent is
when the State itself commences litigation, thus
opening itself to a counterclaim, or when it enters into
a contract

DEPARTMENT OF AGRICULTURE vs NLRC (1993)

FACTS:

Petitioner DOA and Sultan Security Agency

entered into a contract for security services to be
provided by the latter to the said government
entity. In September 13, 1990, several guards of
the Sultan Security Agency filed a complaint for
underpayment of wages, non-payment of 13 th

In the CAB, the claims of the security guards arising

from the Contract for Service, clearly constitute money
claims. Under Act No. 3083, a general law, the State

Labor Relations Cases

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consents and submits to be sued upon any moneyed

claim involving liability arising from contract, express
or implied. However, the money claim must first be
brought to the Commission on Audit

rendered its decision (August 20, 1987), the 1987

Constitution has already come into effect. The SC
believes that the 1987 Constitution does not operate
retroactively as to confer jurisdiction upon the Labor
Arbiter to render a decision, which was before outside
the scope of its competence.

WHEREFORE, PETITION IS GRANTED

Therefore, a decision rendered by the Labor Arbiter

without jurisdiction over the case is a complete nullity,
vesting no rights and imposing no liabilities.
Villanueva, if he so wishes, may refile this complaint in
an appropriate

HAGONOY WATER DISTRICT vs NLRC (1988)

FACTS:

Private Respondent Dante Villanueva was

employed as service foreman by petitioner
Hagonoy when he was indefinitely suspended and
thereafter dismissed for abandonment of work and
conflict of interest
Villanueva filed a complaint for illegal
dismissal, illegal suspension and underpayment of
wages and emergency cost of living allowance
against Hagonoy with the Ministry of Labor and
Employment in San Fernando, Pampanga
Petitioner Hagonoy moved for dismissal on the
ground of lack of jurisdiction. Being government
entity, its personnel are governed by the provisions
of the Civil Service Law and not by the Labor Code.
And the protests concerning the lawlessness of
dismissal from service fall within the jurisdiction of
the Civil Service Commission and not the Ministry
of Labor and Employment.
The Labor Arbiter rendered a decision on favor
of Villanueva
NLRC affirmed the decision of the Labor
Arbiter. A Writ of Execution was issued by the
Labor Arbiter to garnish petitioner Hagonoys
deposits with the planters Development Bank.
Hagonoy filed a Motion to Quash the Writ of
Execution with Application for Writ of Preliminary
Injunction. NLRC denied the application.

WHEREFORE, PETITION IS GRANTED

Sadol vs. Pilipinas Kao, Inc., et al (1990)

Issue: Whether local water districts are GOCC whose

employees are subject to the provisions of the Civil
Service Law
HELD: YES
The Labor Arbiter, in asserting that it has jurisdiction
over the employees of Hagonoy, relied on P.D. No. 198,
known as Provincial Water Utilities Act of 1973 which
exempts employees of water districts from the
application of the Civil Service Law. However, the Labor
Arbiter failed to take into account that P.D. 1479 wiped
away the said exemption
Moreover, the NLRC relied upon Article 9, Section 2, of
the 1987 Constitution which provides that: [T]he Civil
Service embraces ... government owned or controlled
corporations with original charters.
At the time the dispute in the CAB arose, and at the
time the Labor Arbiter rendered its decision (which is
on March 17, 1986), the applicable law is that the
Labor Arbiter has no jurisdiction to render a decision
that he in fact rendered. By the time the NLRC

Labor Relations Cases

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case to the SC charging the NLRC with grave abuse of

discretion.

Facts:
Petitioner was dismissed from work by private
respondents who are owners of Vega & Co., private
recruitment agency, with assignment at respondent PKI.
He filed a complaint for reinstatement and backwages
with the DOLE in Cagayan de Oro City. The Labor Arbiter
ruled in favor of Sadol and ordered respondents to pay
petitioners separation pay at one month for every year
of service. Both parties appealed but respondents
appeal was filed out of time. The appeal of respondent
was dismissed for having been filed out of time.

Issue: Whether the petitioner may avail the special civil

action for certiorari?
Held: NO
A petition for certiorari should be preceded by exhaustion
of administrative remedies. Under said doctrine, a motion
for reconsideration must first be filed before the special
action for certiorari may be availed of. In the case at
bench, the petitioner make a claim that it filed a motion
for the reconsideration of the challenged decision before it
came to us through this action.

Issue: Whether the respondent has lost the right to

appeal
HELD: YES
A party, who failed to appeal on time from a decision of
the Labor Abiter to the NLRC, may still participate in a
separate appeal timely filed by the adverse party by a
Motion for Reconsideration of the NLRC decision. In the
CAB, there is no question that respondents failed to file a
timely appeal from the decision of the Labor Arbiter.
Hence, having lost the right to appeal, the respondent
may choose to file a Motion for Reconsideration instead.

Midas Touch Food Corp. vs NLRC and Iris Fe Isaac

(1996)
Facts:
Respondent Iris Fe Isaac was dismissed as operations
manager by petitioner for alleged lack of self confidence.
Respondent filed a complaint for illegal dismissal before
the Labor Arbiter which rendered a decision in favor of
petitioner finding the said dismissal to be valid. However,
petitioner was ordered to pay the complainants there
separation pay, etc. Both parties appealed to the NLRC
and the decision of the Labor Arbiter was reversed, this
time ruling in favor of Isaac. Hence, petitioner elevated
the case to the SC assailing the decision of the NLRC.

St. Martin Funeral Homes vs. NLRC and B. Aricayos

(1998)
Facts:
P. respondent was dismissed from work by petitioner for
allegedly misappropriating P38,000.00. Hence, a
complaint was filed for illegal dismissal before the NLRC.
Petitioner argued that respondent was not its employee.
The Labor Arbiter ruled in favor of petitioner declaring
that no employer-employee relationship between the
parties and therefore his office had no jurisdiction over
the case. On appeal, the NLRC set aside the questioned
decision and remanding the case to the labor arbiter for
immediate appropriate proceedings.

Issue: Whether the petitioner may avail the special civil

action for certiorari?
Held: YES
The rule requiring motion for reconsideration before filing
a petition for certiorari admits of certain exceptions,
among which is the finding that under the circumstances
of the case, a motion for reconsideration would be
useless.
In this case, the Supreme Court found it quite impossible
for the NLRC to reverse itself under the foregoing facts
and so, a motion for reconsideration will be deemed
useless.

Issue: Whether or not the decision of the NLRC are

appealable to the Court of Appeals.
Held: YES
The Supreme Court clarified and stressed that ever since
appeals from the NLRC to the Supreme Court were
eliminated, the legislative intendment is that the special
civil action of certiorari was and still the proper vehicle
for judicial review of decisions of the NLRC. The
concurrent original jurisdiction of the Supreme Court can
be availed of only under compelling and exceptional
circumstances.

Alindao vs Hon. Hoson (1996)

Facts:
Petitioner applied for employment for Saudi Arabia through
private respondent Hisham General Services Contractor.
She paid a placement fee of P15,000.00 without receipt.
When she arrived in Saudi arrived in Saudi Arabia, she
was made to work as a domestic helper. Because of unfair
working conditions, she worked at several residences until
she saved enough money to return home. When she
arrived in the Philippines, she filed with POEA a complaint
against Hisham for breach of contract. The POEA rendered
a decision suspending Hisham and to pay petitioner her
money claims. Hisham appealed to the NLRC and filed a
MFR with the POEA. The NLRC affirmed the decision of the
POEA. Hisham now argues that the order cannot be
enforced because the MFR was still pending with the POEA.
Respondent POEA administrator Joson find the MFR of
Hisham to be meritorious. Hence, petitioner elevated this
case to the SC

To further explain, (1) the way to review NLRC decision

is through the special civil action of certiorari under Rule
65; (2) the jurisdiction of such action belongs both to the
SC and CA; but (3) in line with the doctrine of hierarchy,
of courts, the petition should be initially presented to the
lower court of the two courts, that is the Court of
Appeals.
Sunshine Transportation Inc. vs NLRC and R.
Santos (1996)

Issue: Whether the petitioner may avail the special civil

action for certiorari without first filing a motion for
reconsideration?

Facts:
P. respondent Santos was dismissed from work as a bus
driver by Petitioner for failing to submit a written
explanation why he failed to report for his scheduled trip.
Respondent filed a complaint with the Labor Arbiter for
illegal dismissal. The Labor Arbiter ruled in favor of the
petitioner and dismissed the complaint. This was
affirmed by the NLRC but granted Santps money claims.
Unsatisfied with the decision, petitioner elevated the

Held: YES
It has been held that the requirement of a motion for
reconsideration may be dispensed with in the following
instances: (1) when the issue raised is one purely of law;
(2) where public interest is involved; (3) in cases of

Labor Relations Cases

urgency; and (4) where special circumstances warrant
immediate or more direct action.
On the other hand, among the accepted exceptions to
the rule on exhaustion of administrative remedies are:
(1) where the question in dispute is purely a legal one;
and (2) where the controverted act is patently illegal or
was performed without jurisdiction or in excess of
jurisdiction.
The petition involves a pure question of law and the
challenged order is void for want of jurisdiction on the
part of respondent Joson.
Metro Transit Organization vs. CA, et al. (2002)
Facts:
Respondent Ruperto Evangelista, a cash assistant in the
treasury division of the petitioner, was dismissed from
work for being alleged to be responsible for the loss of
tokens. He was terminated for lack of trust and
confidence. Evangelista filed a case for illegal dismissal.
The Labor Arbiter ruled in his favor and ordered his
reinstatement with payment of full backwages. This was
affirmed by the NLRC. Hence, petitioner directly filed
with the Court of Appeals a petition for certiorari under
Rule 65. The CA, on the other hand, affirmed the ruling
of both the labor arbiter and NLRC, holding that a motion
for reconsideration is necessary before resorting to a
petition for certioarari.
Issue: Whether the petitioner may elevate the case
before the CA without first filing a motion for
reconsideration with the NLRC?
Held: NO
Generally, certiorari as a special civil action will not lie
unless a motion for reconsideration is filed before the
respondent tribunal to allow it an opportunity to correct
its imputed errors. However, the following have been
recognized as exceptions to the rule:
(1) when the issue raised is one purely of law; (2) where
public interest is involved; (3) in cases of urgency; and
(4) where special circumstances warrant immediate or
more direct action.
On the other hand, among the accepted exceptions to
the rule on exhaustion of administrative remedies are:
(1) where the question in dispute is purely a legal one;
and (2) where the controverted act is patently illegal or
was performed without jurisdiction or in excess of
jurisdiction.
To dispense with a motion for reconsideration, there
must a be concrete, compelling and valid reason for the
failure to comply with the requirement.

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that order "on the merits or in substance can no longer be

entertained
Issue: Whether the NLRC committed grave abuse of
discretion
Held: YES
The NLRC committed grave abuse of discretion in refusing
to take account of the fact, as shown in the record, that
the appeal of Nolasco was late because it was not filed
within the reglementary period
No acceptable reason has been advanced by Nolasco, and
none appears upon the record, to excuse his tardiness in
the taking of the appeal. Petitioner's opposition to the
appeal should have been sustained, and the NLRC should
never have taken cognizance of the appeal.

PAL vs. NLRC (1989)

Facts:
Private respondent Dolina completed his training course
with PAL as pilot. He was given temporary appointment for
6 months as Limited First Officer. He applied for
regularization as First Officer and undergoes the required
psychological examination wherein his "Adaptability
Rating" was found to be "unacceptable" and the Pilot
Acceptance Qualifications Board finds him not qualified for
regular employment in the Company. Dolina was placed
under preventive suspension; hence he filed a complaint
for illegal dismissal.
The Labor Arbiter found the dismissal of Dolina justified,
hence, PAL discontinued the payment of Dolinas salary.
Dolina objected on the ground that the discontinuance an
earlier agreement that he would be kept in the payroll
until the case was finally resolved by arbitration. On
appeal, the NLRC affirmed the decision of the Labor
Arbiter but ordered the company to continue paying
Dolinas salary since the arbitration case was not yet over.
Issue: Whether the NLRC committed grave abuse of
discretion in holding that Dolina was entitled to his
salaries "until this case is finally resolved."
Held: YES
The order of the NLRC to continue paying Dolina his salary
was an abuse of discretion. The clause "pending final
resolution of the case by arbitration" should be understood
to be limited only to the proceedings before the Labor
Arbiter, such that when the latter rendered his decision,
the case was finally resolved by arbitration.
Pacific Mills, Inc. vs. NLRC (1990)

MAI Philippines, Inc. vs. NLRC, et al (1987)

Facts:
The Regional Director declared that petitioner illegally
dismissed its Customer Engineering Manager Rodolfo
Nolasco. It ordered petitioner to reinstate Nolasco and to
pay him his full backwages. The petitioner complied to
pay Nolasco but declined to reinstate him. Nolasco filed
a complaint with the Labor Arbiter to recover damages.
The Labor Arbiter dismissed the complaint for being a
duplication of the earlier labor case involving the same
parties. Nolasco received the notice of the Labor Arbiters
decision 12 days after. He filed an appeal before the
NLRC. Petitioner opposed the appeal and contended that
it should be dismissed because it was filed out of time.
NLRC ruled that since the order of the Regional Director
requiring reinstatement of Nolasco with full back wages
had already become final and executory, attacks against

Facts:
In the case of Pacific Mills, Inc. vs. NLRC (1988), the SC
dismissed the petition on the ground that petitioner failed
to show that the NLRC committed grave abuse of
discretion. The entry of judgment having been effected,
the NLRC, in the process of execution, made a
computation of the award to the private respondents.
Petitioner filed a motion to stay execution/reconsideration
citing supervening events that affect the computation of
the award as follows:
(1) The computation on separation pay did not consider
the length of service of each complainant as borne out
from the records; (2) The computation did not consider
the wage exemptions granted the petitioner-respondent
company; (3) The computation included payment of
awards to a respondent who had already been recalled to
active duty, one who was already paid in a case separately
filed, and another who was already paid; (4) All the capital

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assets of the petitioner have already been attached

and/or otherwise foreclosed.
The NLRC denied the motion and ordered immediate
implementation of the partial writ of execution
Issue: Whether the execution of a final judgment of the
NLRC may be stayed in view of supervening events.
Held: YES
Generally, one a judgment becomes final and executory,
it canno longer be disturbed, altered or modified. The
principle, however, admits of exceptions as in cases
where, because of supervening events, it becomes
imperative, in the higher interest of justice, to direct its
modification in order to harmonize the disposition with
the prevailing circumstances or whenever it is necessary
to accomplish the aims of justice.
There can be no question that the supervening events
cited by petitioner would certainly affect the computation
of the award in the decision of the NLRC. It is the duty of
the NLRC to consider the same and inquire into the
correctness of the execution, as such supervening events
may affect such execution.

Yupangco Cotton Mills, Inc. vs. CA (2002)

Facts:
Petitioner contended that a sheriff of the NLRC
erroneously and unlawfully levied certain properties
which it claims as its own. It filed a 3 rd party claim with
the Labor Arbiter and recovery of property and damages
with the RTC. The RTC dismissed the case. In the CA, the
court dismissed the petition on the ground of forum
shopping and that the proper remedy was appeal in due
course, not certiorari or mandamus. Petitioner filed a
MFR and argued that the filing of a complaint for accion
reinvindicatoria with the RTC was proper because it is a
remedy specifically granted to an owner (whose
properties were subjected to a writ of execution to
enforce a decision rendered in a labor dispute in which it
was not a party). The MFR was denied. Hence, petitioner
filed this appeal.

Nova vs. Judge Sancho Dames II (2001)

Facts:
Complainant Greogorio S. Nova filed with the NLRC
complaint for illegal dismissal against R.A. Broadcasting
Corporation represented by its Vice President for
Operations Vilma J. Barcelona and Station Manager Deo
Trinidad. The Labor Arbiter rendered judgment in favor of
Nova and ordered R.A. Broadcasting to pay his separation
pay and full backwages. NLRC affirmed such decision and
denied the MFR filed by R.A. Construction on the ground
that it was filed out of time. The NLRC issued an alias writ
of execution and the property of Sps. Barcelona was
scheduled in an auction sale. The said spouses filed with
the RTC Camarines Norte action for damages with prayer
of TRO to restrain the NLRC from conducting the
scheduled public auction. The RTC granted the TRO. Nova
argued that under the Labor Code, issuance of the TRO or
preliminary injunction in a case arising from labor dispute
is prohibited.
Issue: Whether the RTC cannot issue injunction against
NLRC?
Held: YES
Regular courts have no jurisdiction to hear and decide
questions which arise and are incidental to the
enforcement of decisions, orders or awards rendered in
labor cases by appropriate officers and tribunals of the
DOLE. Corollarily, any controversy in the execution of the
judgment shall be referred to the tribunal which issued the
writ of execution since it has the inherent power to control
its own processes in order to enforce its judgments and
orders.
True, an action for damages lies within the jurisdiction of a
regional trial court. However, the RTC has no jurisdiction to
issue a TRO in labor cases. The SC finds respondent Judge
guilty of gross ignorance of the law.

Issue: Whether the CA has jurisdiction over the case

Held: YES
A third party whose property has been levied upon by a
sheriff to enforce a decision against a judgment debtor is
afforded with several alternative remedies to protect its
interests. The third party may avail himself of alternative
remedies cumulatively, and one will not preclude the
third party from availing himself of the other alternative
remedies in the event he failed in the remedy first
availed of.
Thus, a third party may avail himself of the following
alternative remedies:
a) File a third party claim with the sheriff of the
Labor Arbiter, and
b) If the third party claim is denied, the third party
may appeal the denial to the NLRC.
Even if a third party claim was denied, a third party
may still file a proper action with a competent court
to recover ownership of the property illegally seized
by the sheriff.
The filing of a third party claim with the Labor Arbiter
and the NLRC did not preclude the petitioner from filing a
subsequent action for recovery of property and damages
with the Regional Trial Court. And, the institution of such
complaint will not make petitioner guilty of forum
shopping.

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legitimate labor organization, including the right to file a

petition for certification election for the purpose of
collective bargaining.
In the given case, as respondent union's membership list
contains the names of at least 27 supervisory employees
in Level Five positions, the union could not, prior to
purging itself of its supervisory employee members, attain
the status of a legitimate labor organization. Not being
one, it cannot possess the requisite personality to file a
petition for certification election. The union's composition
being in violation of the Labor Code's Prohibition of unions
composed of supervisory and rank-and-file employees, it
could not possess the requisite personality to file for
recognition as a legitimate labor organization.
ATLAS LITHOGRAPHIC SERVICE vs. LAGUESMA
(1992)
FACTS:
A petition for certification election was filed by private
respondents Kampil-Katipunan on behalf of the
supervisors union, a union where the supervisory,
administrative personnel, production, accounting and
confidential employees of the petitioner were affiliated.
Petitioner opposed the petition on the ground that Kampil
Katipunan cannot represent the supervisory employees for
the purpose of collective bargaining because said Kampil
Katipunan also represents the rank-and-file employees
union. The Med-Arbiter rendered a decision in favor of the
private respondent. On appeal, the Secretary of Labor
affirmed the decision of the Med-Arbiter. Petitioner now
argue that to allow the supervisory employees to affiliate
with the Kampil Katipunan is tantamount to allowing the
circumvention of the principle of the separation of unions
under Art. 245 of the Labor Code.
Issue: Whether a local union of supervisory employees
may be allowed to affiliate with a national federation of
labor organizations of rank-and-file employees for purpose
of CBA?
TOYOTA MOTOR PHIL. CORP vs. TOYOTA MOTOR
PHIL. CORP LABOR UNION (1997)
FACTS:
Toyota Motor Phil Corp. Labor Union filed a petition for
certification election with Dept. of Labor, for all rank-andfile employees of the petitioner Toyota Motor Corp.
Petitioner seek the denial of the holding of the
certification election on 2 grounds: (1) the union, being
process of registration had no legal personality to file
the same as it was not a legitimate labor organization at
the time the petition was file; and (2) that the union was
composed of both rank-and-file and supervisory
employees in violation of the law. The Med-Arbiter
dismissed the petition for certification election in favor
with the grounds stated by petitioner. However, on
appeal, the Secretary of Labor set aside the decision of
the Me-Arbiter and ordered the holding of the
certification election contending that the union was
already a legitimate labor organization at the time of the
filing of the petition evidenced by a certificate of
registration.
Issue: Whether the Secretary of Labor committed grave
abuse of discretion in directing the certification election
Held: YES. Petition Granted.
A labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It
cannot, for any guise or purpose, be a legitimate labor
organization. Not being one, an organization which
carries a mixture of rank-and-file and supervisory
employees cannot possess any of the rights of a

Held: NO. Petition Granted

We agree with the petitioner's contention that a conflict of
interest may arise in the areas of discipline, collective
bargaining and strikes. Members of the supervisory union
might refuse to carry out disciplinary measures against
their co-member rank-and-file employees.
Under Article 245 of the Labor Code as amended by
Rep. Act No. 6715 provides:
Art. 245. Ineligibility of managerial employees to join
any labor organization: right of supervisory employees.
Managerial employees are not eligible to join, assist
or form any labor organization. Supervisory employees
shall not be eligible for membership in a labor
organization of the rank-and-file employees but may
join, assist or form separate labor organizations of their
own.
The Court construes Article 245 to mean that supervisors
shall not be given an occasion to bargain together with the
rank-and-file against the interests of the employer
regarding terms and conditions of work. Thus, if the intent
of the law is to avoid a situation where supervisors would
merge with the rank and-file or where the supervisors'
labor organization would represent conflicting interests,
then a local supervisors' union should not be allowed to
affiliate with the national federation of union of rank-andfile employees where that federation actively participates
in union activity in the company.
SOUTHERN PHILIPPINES FEDERATION OF LABOR vs.
HON. FERRER-CALLEJA (1989)

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Labor Relations Cases

FACTS:
Petitioner SPF filed with the DOLE a petition for
certification election among the rank-and-file employees
of private respondent Apex Minong Co. The Med-Arbiter
granted the petition and directed the holding of the
certification election. During the pre-election conference,
petitioner union objected to the inclusion in the list of
workers prepared by Apex the following: (1) employees
occupying the positions of Supervisor I, II and III; (2)
employees under confidential/special payrolls; and (3)
employees who were not paying dues. According to
petitioner, the mentioned employees were disqualified
from participating in the certification election since the
Supervisors were managerial employees while the last
two were disqualified by virtue of their non-membership
in the Union and their exclusion from the benefits of the
collective bargaining agreement. After the certification of
election was conducted, respondent Union filed an
urgent motion to open the challenged ballots. The MedArbiter granted the motion and directed the challenged
ballots be opened and inventoried. Petitioner appealed to
the BLR wherein respondent Director Ferrer-Calleja
dismissed said appeal and affirmed the decision of the
Med-Arbiter and ordered that the 197 ballots should be
opened and canvassed. As a consequence of the opening
and canvass of the challenged ballots, the Med-Arbiter
Issue: Whether respondent Director committed grave
abuse of discretion in not excluding the 197 employees
from voting in the certification election
Held: NO
The functions of the questioned positions are not
managerial in nature because they only execute
approved and established policies leaving little or no
discretion at all whether to implement the said policies or
not. The respondent Director, therefore, did not commit
grave abuse of discretion in dismissing the petitioner's
appeal from the Med-Arbiter's Order to open and count
the challenged ballots in denying the petitioner's motion
for reconsideration and in certifying the respondent
Union
as
the
sole
and
exclusive
bargaining
representative of the rank-and-file employees of
respondent Apex .
As regards the employees in the confidential payroll, the
petitioner has not shown that the nature of their jobs is
classified as managerial except for its allegation that
they are considered by management as occupying
managerial positions and highly confidential. Neither can
payment or non-payment of union dues be the
determining factor of whether the challenged employees
should be excluded from the bargaining unit since the
union shop provision in the CBA applies only to newly
hired employees but not to members of the bargaining
unit who were not members of the union at the time of
the signing of the CBA. It is, therefore, not impossible for
employees to be members of the bargaining unit even
though they are non-union members or not paying union
dues.
GOLDEN FARMS INC. vs. HON. FERRER-CALLEJA
(1989)
FACTS:
The National Federation of Labor (NFL) filed a petition for
certification election in behalf of certain employees and
foreman of petitioner before the DOLE. Petitioner
opposed said petition arguing that
The NFL appealed but it was dismissed. Hence, it re-filed
the petition for certification which was also dismissed.
Issue:
Held:

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PHILIPPINE PHOSPHATE FERTILIZER CORP. vs.

HON. TORRES (1974)
FACTS:
Issue:
Held:
NATIONAL ASSOCIATION OF TRADE UNIONS vs.
HON. TORRES (1994)
FACTS:
Petitioner NATU filed a petition for certification election to
determine the exclusive bargaining representative of
respondents bank employees occupying supervisory
positions. The Bank moved to dismiss on the ground that
said
supervisory
employees
were
actually
managerial/confidential employees, thus, they are
ineligible to join, assist or form a union. The Med-Arbiter
granted the petition and directed the holding of the
certification election. The Bank appealed to the Secretary
of Labor. Said court partially granted the appeal ruling that
the Department Managers, Assistant Managers, Branch
Managers, Cashiers and Controllers are declared
managerial employees and cannot join the union of the
supervisors.
Issue: Whether
Held:
Petitioner concludes that subject employees are not
managerial employees but supervisors. Even assuming
that they are confidential employees, there is no legal
prohibition against confidential employees who are not
performing managerial functions to form and join a union.
A confidential employee is one entrusted with confidence
on delicate matters, or with the custody, handling, or care
and protection of the employer's property. While Art. 245
of the Labor Code singles out managerial employees as
ineligible to join, assist or form any labor organization,
under the doctrine of necessary implication, confidential
employees are similarly disqualified.
MERALCO vs. HON. QUISUMBING (1999)
FACTS:
A petition for certification election was filed by the labor
organization of staff and technical employees of MERALCO
seeking to represent regular employees of MERALCO.
MERALCO contended that those in the Patrol Division and
Treasury Security Service Section, since these employees
are tasked with providing security to the company, they
are not eligible to join the rank and file bargaining unit.
The Med-Arbiter ruled that having been excluded from the
existing Collective Bargaining Agreement for rank and file
employees, these employees have the right to form a
union of their own, except those employees performing
managerial functions. The Secretary of Labor affirmed said
order.
Issue: Whether security guards may join rank-and-file or
supervisors union
Held:
Under the old rules, security guards were barred from
joining a labor organization of the rank and file, under RA
6715, they may now freely join a labor organization of the
rank and file or that of the supervisory union, depending
on their rank. By accommodating supervisory employees,

13

Labor Relations Cases

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digests

the Secretary of Labor must likewise apply the provisions

of RA 6715 to security guards by favorably allowing them
free access to a labor organization, whether rank and file
or supervisory, in recognition of their constitutional right
to self-organization.

MARIANO vs. ROYAL INTEROCEAN LINES (1961)

FACTS

Petitioner
Ermidia
A.
Mariano
was
a
stenographer-typist and filing clerk of respondent
when she was dismissed from work. She sent a letter
to the managing directors of the company in HK
through its manager in the Philippines, respondent
J.V. Kamerling. In the letter, she complained about
Kamerlings inconsiderate and untactful attitude
towards the employees under him and the clients of
the company. Kamerling adviced petitioner that her
letter had been forwarded to the managing directors
in HK and that said directors believed that it was
impossible to maintain her in the company.
Petitioner sought reconsideration of her dismissal
from the managing directors in HK but received no
answer to any of her 5 letters.
The Company finally offered a compromise
settlement with the petitioner whereby she would
be paid a sum equivalent to 6 months salary,
provided that she would sign a quitclaim embodying
a provision that she would release the company from
any liability arising from her employment. Not
satisfied with the compromise, the petitioner filed a
complaint for unfair labor practice against the
company. The CIR rendered judgment holding the
company guilty of unfair labor practice and ordered
them to reinstate petitioner to her former position.
The company filed with the SC a petition to
review the decision of the CIR. The SC ruled in favor
of the company. Hence, this appeal.

Issue: Whether the petitioner was guilty of unfair labor

practice in dismissing the respondent
Held: NO. Petition Denied.
As the respondent's dismissal has no relation to union
activities and the charges filed by her against the
petitioner had nothing to do with or did not arise from
her union activities, the dismissal did not constitute
Unfair Labor Practice. Despite the employees right to self
organization, the employer still retains his inherent right
to discipline his employees, his normal prerogrative to
hire or dismiss them. In this case, the court ruled that
the dismissal of the employee was unjustified, but the
employer did not commit Unfair Labor Practice because
the act has no union connection.

WISE AND CO. INC. vs. WISE AND CO. INC.

EMPLOYEES UNION (1989)
FACTS:

The management issued a Memorandum Circular

introducing a profit-sharing scheme for its managers
and supervisors.
Respondent Union wrote to petitioner to ask that
the union members be allowed to participate in the
profit-sharing program. The management denied the
request on the ground that such participation was
not provided in the CBA
When renegotiation of the CBA was approaching,

the management wrote to the Union that it was willing

to consider including the union members in the profitsharing scheme provided that the negotiations would
be concluded prior to December 1987
Sometime later, the company distributed the
profit-sharing benefit not only to the managers and
supervisors but also to all rank-and-file employees not
covered by the CBA because they were excluded from
the definition of bargaining unit.
This caused the respondent Union to file a notice
of strike alleging that petitioner was guilty of unfair
labor practice because the union were discriminated
against in the grant of the profit sharing benefits

Issue: Whether the grant by management of profit

sharing benefits to its non-union member employees is
discriminatory against its workers who are union members
and amounts to ULP?
Held: NO. Petition Granted
There can be no discrimination committed by petitioner as
the situation of the union employees are different and
distinct from the non-union employees. Discrimination per
se is not unlawful. There can be no discrimination where
the employees concerned are not similarly situated.
The grant by petitioner of profit sharing benefits to the
employees outside the "bargaining unit" falls under the
ambit of its managerial prerogative. It appears to have
been done in good faith and without ulterior motive. More
so when as in this case there is a clause in the CBA where
the employees are classified into those who are members
of the union and those who are not. In the case of the
union members, they derive their benefits from the terms
and conditions of the CBA contract which constitute the
law between the contracting parties. Both the employer
and the union members are bound by such agreement.

PHIL. GRAPHIC ARTS INC. vs. NLRC (1988)

FACTS:

In October 1984, petitioner corporation was forced

by economic circumstances to require its workers to
go on mandatory vacation leave in batches of seven or
nine for periods ranging from 15, 30, to 45 days. The
workers were paid while on leave but the pay was
charged against their respective earned leaves.
As a result, the private respondents filed
complaints for unfair labor practice and discrimination.

Issue: Whether the forced vacation leave without pay

constitutes unfair labor practice
Held: NO. Petition Granted
There was no unfair labor practice in this case. Private
respondents never questioned the existence of an
economic crisis but, in fact, admitted its existence. There
is basis for the petitioner's contentions that the reduction
of work schedule was temporary, that it was taken only
after notice and consultations with the workers and
supervisors, that a consensus was reached on how to deal
with deteriorating economic conditions and reduced sales
and that the temporary reduction of working days was a
more humane solution instead of a retrenchment and
reduction of personnel. The petitioner further points out
that this is in consonance with the CBA between the
employer and its employees.
Likewise, the forced leave was enforced neither in a
malicious, harsh, oppressive, vindictive nor wanton
manner, or out of malice or spite. Hence, ULP is not
committed.

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Labor Relations Cases

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retrenchment program. Respondent union filed a

complaint of illegal lockout against the petitioner.
Respondent Union filed a complaint for ULP.

Issue: Whether the mass-lay off of petitioner due to

alleged income loss constitutes ULP

DABUET vs. ROCHE PHARMACEUTICALS (1987)

FACTS:

The petitioners, all officers of the Roche Products

Labor Union, wrote the respondent company
expressing their grievances and seeking formal
conference with management regarding the previous
dismissal of the unions president and vice-president.
At the meeting, instead of discussing the
problems affecting the labor union and management,
the companys general manager allegedly berated
the petitioners for writing the said letter and called
the letter and the person who prepared it stupid.
Feeling that he was the one alluded to, since he
had prepared the letter, the counsel for the labor
union filed a case for Grave Slander against the
general manager. The charge was based on the
affidavit executed by the petitioners.
In turn, the company and the manager filed a
complaint for Perjury against petitioners alleging
that their affidavit contained false statements
The company construed the execution by
petitioners of the affidavit as an act of breach of
trust and confidence. Hence, they were suspended
and later on dismissed.

Issue: Whether respondent company, in terminating the

employment of the petitioners without just and lawful
cause, committed an unfair labor practice.
Held: YES. Petition Granted
Respondent company had committed unfair labor
practice in dismissing the petitioners without just and
valid cause. Their dismissal, under the circumstances,
amounted to interference with, and restraint or coercion
of, the petitioners in the exercise of their right to engage
in concerted activities for their mutual aid and protection

Held: YES. Petition Denied

The petitioners capital reduction efforts, to camouflage
the fact that it has been making profits, and to justify the
mass lay-off of its employees, especially union members,
were an ULP which can neither be countenanced nor
condoned.
Petitioner, confronted with the demand of the union for
wage increases, decided to evade its responsibility towards
the employees by a devised capital reduction. While the
reduction in capital stock created a need for retrenchment,
it was just a mask for the purge of union members, who,
by then, had agitated for wage increases. In the face of
the petitioner company's piling profits, the unionists had
the right to demand for such salary adjustments.
Retrenchment can only be availed of if the company is
losing or meeting financial reverses in its operation. Thus
the mass lay-off or dismissal of the employees under the
guise of retrenchment policy is a lame excuse and a
veritable smoke-screen of its scheme to bust the Union
and thus unduly disturb the employment tenure of the
employees concerned, which act is certainly an ULP.

COMPLEX ELECTRONICS UNION. vs. NLRC (1999)

FACTS:

Breach of trust and confidence, the grounds alleged for

petitioners' dismissal, "must not be indiscriminately used
as a shield to dismiss an employee arbitrarily.

MADRIGAL & CO. vs. HON. ZAMORA (1987)

FACTS:

In December 1973, respondent Madrigal Central

Office Employees Union sought for the renewal of its
CBA with the petitioner company. It proposed a wage
increase of P200.00 a month, an allowance of
P100.00 a month, and other economic benefits.
By an alleged resolution of its stockholders, the
petitioner reduced its capital stock from 765,000
shares to 267,366 shares. Petitioner alleged that
because of the desire of the stockholders to phase
out the operations of the Madrigal & Co. due to lack
of business incentives and prospect, it had to reduce
its capital stock and effected a retrenchment policy
(downsizing) of its employees and operations
Petitioner applied for clearance to terminate the
services of a number of employees pursuant to its

Complex
Electronics
Corporation
was
a
subcontractor of electronic products. Its customers
were foreign-based companies with different product
lines. One of its customers is the Lite-On Philippines
Electronics Co.
Complex received a message from Lite-On
Philippines requiring it to lower its price by 10%.
Complex informed Lite-On that such request was not
feasible as they were already incurring losses at the
present prices of their products. Complex informed the
employees that it was left with no alternative but to
close down the operations of the Lite-On Line. The
company promised that it would follow the law by
giving 1 month notice and retrenchment pay.
Sometime later, the machinery, equipment and
materials being used for production at Complex were
pulled-out from the company premises and transferred
to the premises of Ionics Circuit, Inc. in Laguna. The
following day, Complex totally closed its operation.
The Complex Employees Union filed a complaint
for ULP, illegal closure/illegal lockout and money
claims. It claims that business has not ceased at
Complex but was merely transferred to Ionics, a
runaway shop, which is an act constituting ULP. To
prove that Ionics was just a runaway shop, petitioner
asserts that Complex owns the majority of the shares
comprising the increased capital stock of Ionics. The
Union alleged that the reason for the closure of the
establishment was due to the union activities of the
employees.

Issue: Whether Complex Electronics Corp. committed ULP

HELD: NO
Resorting to a runaway shop is ULP. A runaway shop is
defined as an industrial plant moved by its owners from
one location to another to escape union labor regulations
or state laws, but the term is also used to describe a plant
removed to a new location in order to discriminate against
employees at the old plant because of their union

15

Labor Relations Cases

activities. It is one wherein the employer moves its
business to another location or it temporarily closes its
business for anti-union purposes.
In this case, Ionics was not set up for the purpose of
transferring the business of Complex. At the time the
labor dispute arose, Ionics was already existing as an
independent company. It cannot, therefore, be said that
the temporary closure in Complex and its subsequent
transfer of business to Ionics was for anti-union
purposes.
We, likewise, disagree with the Union that there was in
this case an illegal lockout/illegal dismissal. Lockout is
the temporary refusal of employer to furnish work as a
result of an industrial or labor dispute. It may be
manifested by the employer's act of excluding employees
who are union members.

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The retrenchment undertaken by the Company is valid.

However, the manner in which this is exercised should not
be tainted with abuse of discretion. Labor is a person's
means of livelihood. He cannot be deprived of his labor or
work without due process of law. The retrenchment of
employees who belong to a particular union, with no
satisfactory justification why said employees were singled
out, constitutes ULP.
In this case, the Company had indeed been discriminatory
in selecting the employees who were to be retrenched. All
of the retrenched employees are officers and members of
the NAFLU. It leads Us to conclude that the firm had been
discriminating against membership in the NAFLU, an act
which amounts to interference in the employees' exercise
of their right of self-organization. This interference is
considered an act of ULP

PROGRESSIVE DEVPT CO. vs. CIR (1977)

TANDUAY DISTILLERY LABOR UNION vs. NLRC
(1987)

FACTS:

The Araneta Coliseum Employees Association

(ACEA) in behalf of 48 members, filed for ULP
against petitioner Progressive Devpt Corp., its
officers, and the Progressive Employees Union (PEU).
The complainants alleged that they were
dismissed because they refused to resign from the
ACEA and to affiliate with the PEU.
There
is
evidence that the
Progressive
Employees Union became inactive after the death of
Atty. Reonista the former counsel of the Progressive
Development Corporation. This shows that the
Progressive Employees Union was organized to
camouflage the petitioner corporation's dislike for the
Araneta Coliseum Employees Association and to
stave off the latter's recognition. Further, the PEU did
not conclude and enter into a CBA with the
management.

Issue: Whether
constitutes ULP

the

dismissal

of

the

FACTS:

employees

Held: YES
The dismissal of employees because of their refusal to
resign from their union and to join the union favorable to
the employer constitutes ULP. Under the circumstances
and equity of the case, and considering the length of
time and the union-busting activities of petitioner, the
individual complainants are granted back wages for five
(5) years without qualification or deduction.

BATAAN SHIPYARD vs. NLRC (1988)

FACTS:

Tanduay Distillery, Inc. (TDI) and Tanduay

Distillery Labor Union (TDLU) entered into a CBA which
contained a union security clause, which provided:
All workers who are or may during the effectivity of
this Contract, become members of the Union in
accordance with its Constitution and By-Laws shall, as
a condition of their continued employment, maintain
membership in good standing in the Union for the
duration of the agreement.
While the CBA was still in effect, a number of the
TDLU, joined another union, the Kaisahan Ng
Manggagawang Pilipino (KAMPIL) and organized its
local chapter in TDI.
The TDLU required those who disaffiliated to
explain why they should not be punished for
disloyalty. TDLU created a committee to investigate
its erring members. The committee recommended that
the disaffiliating members be expelled and that they
should be terminated from service in pursuant to the
union security clause. Acting on said request, the
company terminated the employment of the
disaffiliating union members.

Issue: Whether the dismissal of the disaffiliating

members pursuant to a security clause constitutes ULP
Held: NO
The private respondents cannot escape the effects of the
security clause of their own applicable CBA. Union Security
Clauses in CBA, if freely and voluntarily entered into, are
valid and binding. Thus, the dismissal of an employee by
the company pursuant to a labor unions demand in
accordance with a union security agreement does not
constitute ULP.

The National Federation of Labor Unions (NAFLU)

is a labor organization in petitioner Bataan Shipyard
& Engineering Co., Inc. The Company has thousand
employees in its payroll and more than a hundred of
them belong to the said labor organization.
Sometime before 1984, the Company filed with
the NLRC an application for the retrenchment of
285 of its employees on the ground that the firm had
been incurring heavy losses. In the meantime, some
employees who had been on sick leave earlier were
considered retrenched. All of those so retrenched
happen to be officers and members of the NAFLU.

The respondent employer did nothing but to put in force

their agreement when it separated the herein
complainants upon the recommendation of said union.
Such a stipulation is not only necessary to maintain loyalty
and preserve the integrity of the union but is allowed by
the Magna Charta of Labor when it provided that while it is
recognized that an employee shall have the right to selforganization, it is at the same time postulated that such
right shall not injure the right of the labor organization to
prescribe its own rules with respect to the acquisition or
retention of membership therein

Issue: Whether the Company is guilty of discriminatory

acts in the selection of employees to be retrenched

In Villar v. Inciong, we held that "petitioners, although

entitled to disaffiliation from their union and to form a new
organization of their own must however, suffer the

Held: YES.

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Labor Relations Cases

consequences of their separation from the union under
the security clause of the CBA"

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Both the Labor Arbiter and the NLRC found the

CBA and theunion security clause valid and considered
the termination of petitioners justified.
Petitioners argue that their dismissal is not valid
because they did not affiliate with the NAFLU. They
claim that there is a connivance between respondents
Company and Union in their illegal dismissal in order
to avoid the payment of separation pay by respondent
company.

Issue: Whether the act of asking help from another union

constitutes disloyalty
Held: NO
The mere act of seeking help from the NAFLU cannot
constitute disloyalty as contemplated in the Collective
Bargaining Agreement. At most it was an act of selfpreservation of workers who, driven to desperation found
shelter in the NAFLU who took the cudgels for them.
MABEZA vs. NLRC (1997)
FACTS:

Petitioner Norma Mabeza contends that she and

her co-employees at the Hotel Supreme in Baguio
City were asked by the hotel's management to sign
an instrument wherein it states that they are in
compliance with minimum wage and other labor
standard provisions of law.
Petitioner signed the affidavit but refused to go
to the City Prosecutor's Office to swear to the truth
of her statement. Her refusal displeased the
employer.
Thereafter, she was ordered to turn over the
keys to her living quarters and to remove her
belongings from the hotel. Subsequently, she as
charged with of abandonment of job and stealing of
company property; finally she was dismissed for loss
of confidence.

Issue: Whether the dismissal constitutes ULP?

Held: YES
The act of compelling employees to sign an instrument
indicating that the employer observed labor standards
provisions of law when he might have not, together with
the act of terminating or coercing those who refuse to
cooperate with the employer's scheme constitutes unfair
labor practice. The first act clearly preempts the right of
the hotel's workers to seek better terms and conditions
of employment through concerted action. In not giving
positive testimony in favor of her employer, petitioner
had reserved not only her right to dispute the claim and
proffer evidence in support thereof but also to work for
better terms and conditions of employment.

RANCE vs. NLRC (1988)

FACTS:

Polybag Manufacturing Corporation and Polybag

Workers Union entered into a CBA which provides a
union security clause which states that a union
member who loses his membership in the union shall
be dismissed from service by the company.
Petitioners, who were members of the Polybag
Workers Union, were expelled by said union for
disloyalty for allegedly joining the National
Federation of Labor Union (NAFLU). Because of the
expulsion, petitioners were dismissed by the
Corporation upon the unions demand.

17

Labor Relations Cases

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only once but twice which were left unanswered and

unacted upon; and (3) the Company made no counter
proposal whatsoever all of which conclusively indicate lack
of a sincere desire to negotiate.
From the overall conduct of the company, it is indubitably
shown that it disregarded its obligation to bargain in good
faith.

MERALCO vs. QUISUMBING, MEWA (1999)

FACTS:

KIOK LOY vs. NLRC (1986)

FACTS:

In a certification election held, the Pambansang

Kilusang Paggawa, a legitimate late labor federation,
won and was subsequently certified as the sole and
exclusive bargaining agent of the rank-and-file
employees of Sweden Ice Cream Plant.
The Union furnished the Company with two
copies of its proposed collective bargaining
agreement. At the same time, it requested the
Company for its counter proposals but the requests
were ignored and remained unacted upon by the
Company.
As a result, the Union filed a "Notice of Strike",
with the BLR on the ground of unresolved economic
issues in collective bargaining.
In the labor arbiter: due to series of
postponements, and non-appearance at the hearing
conducted it ruled that the Company has waived its
right to present further evidence and, therefore,
considered the case submitted for resolution.
NLRC: ruled that respondent Sweden Ice Cream
is guilty of unjustified refusal to bargain, in violation
of Section (g) Article 248 (now Article 249)

Issue: WON respondent is guilty of unjustified refusal to

bargain?
Held: YES
The Court affirmed the NLRC, and ruled that, petitioner
Company is GUILTY of unfair labor practice, because the
jurisdictional preconditions of Collective Bargaining
establish such as:
1. possession of the majority representation;
2. proof of majority representation;
3. a demand to bargain under Article 251, par. (a)
Collective bargaining which is defined as negotiations
towards a collective agreement, is one of the democratic
frameworks under the New Labor Code, designed to
stabilize the relation between labor and management
and to create a climate of sound and stable industrial
peace. It is a mutual responsibility of the employer and
the Union and is characterized as a legal obligation.

MEWA informed MERALCO of its intention to renegotiate the terms&conditions of their existing CBA
MEWA submitted its proposal to MERALCO and the
collective bargaining negotiations proceeded. However,
despite the series of meetings between the negotiating
panels of MERALCO and MEWA, the parties failed to
arrive at "terms and conditions acceptable to both of
them."
As a result, MEWA filed a Notice of Strike, on the
grounds of bargaining deadlock and ULP
Secretary of Labor: granted the economic as
well as the political demand of the MEWA, and ordered
to grant the wage increase and to incorporation into
the CBA of all existing employee benefits.
MERALCO filed a MR alleging that the Secretary of
Labor did not properly appreciate the effect of the
awarded wages and benefits on MERALCO's financial
viability.
MEWA likewise filed a motion asking the Secretary
of Labor to reconsider its Order on the wage increase
and other benefits.

Issue: Whether the Secretary's actions have been

reasonable in light of the parties positions and the
evidence they presented.
Held:
The Court ruled that a collective bargaining dispute such
as this one requires due consideration and proper
balancing of the interest of the parties to the dispute and
those who might be affected by the dispute.
As a rule, affordability and capacity to pay should be take
into account BUT cannot be the sole yardstick in
determining the wage award, especially in a PUBLIC
UTILITY like MERALCO. In considering a public utility, it
must always take into account the PUBLIC interest aspect.
The MERALCOs income and the amount of money
available for operating expenses including labor costs are
subject to state regulations. We must also keep in mind
that high operating costs will certainly and eventually be
passed on the consuming public.

SMC UNION vs. HON. CONFESOR (1996)

FACTS:

In the case at bar, (1) respondent Union was a duly

certified bargaining agent; (2) it made a definite request
to bargain, accompanied with a copy of the proposed
Collective Bargaining Agreement, to the Company not

18

Petitioner San Miguel Corporation Employees

Union entered into a CBA with private respondent San
Miguel Corporation (SMC)
It provides that the agreement SHALL REMAIN IN
FORCE AND EFFECTIVE until 1992, and the terms of
the agreement shall be for 5 years. from 1989 to
1992.
For purposes of business expansion, the SMC
would undergo with reconstructing, the magnolia and
the Feeds and livestock Division were spun-off and
become two separate and distinct corporation. But the
CBA remain in forced and effective.

Labor Relations Cases

During the negotiation the petitioner union

insisted that the bargaining unit of SMC should still
include the employees of the spun-off corporations,
which is the MAGNOLIA and SMFI and that the
renegotiation terms of the CBA shall be effective
ONLY for the remaining period of 2 years.
On the other hand the SMC contended that the
members or employees WHO HAD MOVED TO
MAGNOLIA AND SMFI, SHALL AUTHOMATICALLY
CEASED TO BE PART OF THE BARGAINING UNIT at
the SMC, and that the CBA shall be effective for
3years in accordance with ART.253-A
Unable to agree with these issues of bargaining
unit and duration of the CBA, petitioner union
declared a deadlock and filed a notice of strike.

Held:
Spin-off of Magnolia and San Miguel Foods Companies
from the San Miguel Corporation as separate corporate
entities. Existing CBA included all four divisions. During
the renewal or renegotiation for two years on the
economic provisions, spin-off corporations were already
in existence. The Union insisted that the employees of
the spun-off corporations were still to be considered as
part of the appropriate bargaining unit.
Considering the spin-off, the companies would
consequently have their respective and distinctive
concerns in terms of the nature of work, wages, hours of
work and other conditions of employment. The interests
of the employees in different companies would perforce
differ. SMC is engaged in beer manufacturing; Magnolia
with manufacturing and processing of dairy products; SM
Foods with production of feeds and processing of
chicken. The nature of the products and sales of
business may require diff. Skills which must necessarily
be commensurated by different compensation packages;
different volumes of work and working conditions. It
would then be best to have separate bargaining units for
different companies where the employees can bargain
separately accdg. to their needs and working conditions.

SAMAHANG MANGGAGAWA SA TOP FORM

MANUFACTURING UNITED WORKERS OF THE
PHILS. (SMTFM-UWP) vs. NLRC (1998)
FACTS:

Petitioner Samahang Manggagawa sa Top Form

was the certified collective bargaining representative
of all regular rank and file employees of private
respondent Top Form Manufacturing Philippines, Inc.
At
the
subsequent
collective
bargaining
negotiations, the union insisted on the incorporation
in the (CBA) of the union proposal on "automatic
across-the-board wage increase."
There was a Wage Order granting an increase of
P17.00 per day in the salary of workers. This was
followed by another Wage Order providing for a
P12.00 daily increase in salary.
The union requested the implementation of said
wage orders. However, they demanded that the
increase be on an across-the-board basis.
Private respondent refused to accede to that
demand. Instead, it implemented a scheme of
increases purportedly to avoid wage distortion.
The union, wrote private respondent a letter
reiterated that it had agreed to "retain the old
provision of CBA" on the strength of private
respondent's "promise and assurance" of an acrossthe-board salary increase should the government
mandate salary increases.
The union filed a complaint with the NLRC
alleging that private respondent's act of promise

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clearly constitutes act of unfair labor practice through

bargaining in bad faith."
Labor Arbiter: denied the complaint for lack of merit.
NLRC: affirmed the LA
Issue: WON the act of the private respondent constitute
unfair labor practice through bargaining in BAD FAITH.
Held: NO
The Court ruled that under Article 252 it states that the
duty to bargain "does not compel any party to agree to a
proposal or make any concession." Thus, petitioner union
may not validly claim that the proposal embodied in the
Minutes of the negotiation forms part of the CBA that it
finally entered into with private respondent.
And by making such promise, private respondent may not
be considered in bad faith or at the very least, petitioner
union had, under the law, the right and the opportunity to
insist on the fulfillment of the private respondent's
promise by demanding its incorporation in the CBA.
"Because the proposal was never embodied in the CBA,
the promise has remained just that, a promise, the
implementation of which cannot be validly demanded
under the law."

NEW PACIFIC TIMBER vs. NLRC (1988)

FACTS:

The National Federation of Labor (NFL) was

certified as the sole and exclusive bargaining
representative of all the regular rank-and-file
employees of New Pacific Timber & Supply Co., Inc.
NFL started to negotiate for the employees in the
bargaining unit. However, the same was allegedly met
with stiff resistance by petitioner Company, so that the
former was prompted to file a complaint for ULP on the
ground of refusal to bargain collectively.
Labor Arbiter: issued an order declaring (a)
herein petitioner Company guilty of ULP; and (b) the
CBA proposals submitted by the NFL as the CBA
between the regular rank-and-file employees in the
bargaining unit and petitioner Company.
NLRC: dismissed the complaint for lack of merit.
A "Petition for Relief" was filed in behalf of 186 of
the private respondents "Mariano J. Akilit and 350
others". In their petition, they claimed that they were
"wrongfully excluded from enjoying the benefits under
the CBA since the agreement with NFL and petitioner
Company limited the CBA's implementation to only the
142 rank-and-file employees enumerated."
NLRC declared that the 186 excluded employees
"form part and parcel of the then existing rank-and-file
bargaining unit" and were, therefore, entitled to the
benefits under the CBA.
Petitioners argues that the private respondents are
not entitled to the benefits under the CBA because
employees hired after the term of a CBA are not
parties to the agreement, and therefore, may not
claim benefits thereunder, even if they subsequently
become members of the bargaining unit.
As for the term of the CBA, petitioner maintains
that Article 253 of the Labor Code refers to the
continuation in full force and effect of the previous
CBA's terms and conditions. By necessity, it could not
possibly refers to terms and conditions which, as
expressly stipulated, ceased to have force and effect.

Issue: WON the private respondent are entitled to the

benefits under the CBA.

19

Labor Relations Cases

Held:
It is clear from the above provision of law that until a
new Collective Bargaining Agreement has been executed
by and between the parties, they are duty-bound to keep
the status quo and to continue in full force and effect the
terms and conditions of the existing agreement. The law
does not provide for any exception nor qualification as to
which of the economic provisions of the existing
agreement are to retain force and effect, therefore, it
must be understood as encompassing all the terms and
conditions in the said agreement.
In the case at bar, no new agreement was entered into
by and between petitioner Company and NFL pending
appeal of the decision in NLRC Case No. RAB-IX-033482; nor were any of the economic provisions and/or
terms and conditions pertaining to monetary benefits in
the existing agreement modified or altered. Therefore,
the existing CBA in its entirety continues to have legal
effect.
Court has held that when a collective bargaining contract
is entered into by the union representing the employees
and the employer, even the non-member employees are
entitled to the benefits of the contract. To accord its
benefits only to members of the union without any valid
reason would constitute undue discrimination against
nonmembers. 22 It is even conceded, that a laborer can
claim benefits from the CBA entered into between the
company and the union of which he is a member at the
time of the conclusion of the agreement, after he has
resigned from the said union.
PAL vs. NLRC (1993)
FACTS:

The Philippine Airlines, Inc. (PAL) completely

revised its 1966 Code of Discipline. Subsequently,
some of the employees were subjected to
disciplinary measures for alleged violation of revised
code.
Philippine Airlines Employees Association (PALEA)
filed a complaint before the (NLRC) for "ULP with
arbitrary implementation of PAL's Code of Discipline
without notice and prior discussion with Union by
Management." PALEA contended that PAL was guilty
of ULP because the copies of the Code had been
circulated in limited numbers; that being penal in
nature the Code must conform with the requirements
of sufficient publication, and that the Code was
arbitrary, oppressive, and prejudicial to the rights of
the employees.
PAL filed a motion to dismiss the complaint,
asserting its prerogative as an employer to prescribe
rules and regulations regarding employees' conduct
in carrying out their duties and functions.
Labor Arbiter: dismissed the complaint and
ruled that no ULP had been committed and no bad
faith in adopting the Code.
NLRC: found no evidence of ULP and affirmed
the dismissal of the complaint.

Issue: Whether or not the formulation of a Code of

Discipline among employees is a shared responsibility of
the employer and the employees.
Held: YES
The Court upheld the unions right, and ruled that, the
management should see to it that its employees are at
least properly informed of its decisions or modes of
action, because the implementation of the provisions
may result in the deprivation of an employees means of
livelihood which is a property right.

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And the CBA may not be interpreted as cession of

employees right to participate in the deliberation of
matters which may affects their rights and the formulation
of a code of discipline.

ALHAMBRA CIGAR CO vs. ALHAMBRA UNION

FACTS:

Respondent Alhambra Employees' Association ,a

legitimate labor organization, filed a petition in which
it is prayed that said union be certified as the sole and
exclusive bargaining agent for all the employees in the
administrative, sales, engineering and dispensary
departments of the Alhambra Cigar and Cigarette
Manufacturing Company.
The petition is opposed by the Company and
another legitimate labor organization, the Federacion
Obrera de la Industria Tabaquera de Filipinas
(FOITAF).
They alleged that there is an existing CBA between
the company and the FOITAF which constitutes a bar
to the instant certification proceeding.
Petitioner contends that all the employees paid in
the administrative, sales, engineering, and dispensary
departments constitute an appropriate unit which is an
employer unit

Issue: WON the lower court erred in holding that all the
employees in the administrative, sales, and dispensary
departments of petitioner company, with the exception of
the supervisors, security guards, and confidential
employees therein, constitute an appropriate separate
collective bargaining unit.
Held:
The Court ruled that, no reason to disturb said finding of
the lower court
that, said employees in the
administrative, sales, and dispensary departments perform
work which have nothing to do with production and
maintenance, unlike those in the raw leaf (manlalasi),
cigar, cigarette, packing (precinteria), and engineering and
garage departments whose functions involve production
and maintenance, they have a community of interest
which justifies their formation or existence as a separate
appropriate collective bargaining unit.

PAGKAKAISA NG MGA MANGGAGAWA SA TRIUMPH

INTERNATIONAL-UNITED LUMBER AND GENERAL
WORKERS OF THE PHILS. vs. FERRER-CALLEJA
FACTS:

20

The petitioner is the recognized collective

bargaining agent of the rank-and-file employees of
Triumph International with which the latter has a valid
and existing collective bargaining agreement effective
up to September 24, 1989.
In 1987, a petition for certification election was
filed by the respondent union with the Department of
Labor and Employment.
a motion to dismiss the petition for certification
election was filed by Triumph International on the
grounds that the respondent union cannot lawfully
represent managerial employees and that the petition
cannot prosper by virtue of the contract-bar rule.
But the Labor Arbiter issued an order granting the
petition for certification election and directing the
holding of a certification election to determine the sole
and exclusive bargaining representative of all monthlypaid administrative, technical, confidential and
supervisory employees of Triumph International.

Labor Relations Cases

Issue: Whether or not the public respondent gravely
abused its discretion in ordering the immediate holding
of a certification election among the workers sought to
be represented by the respondent union.
Held:
Where the supervisory employees sought to be
represetned by the union are actually NOT INVOLVED
in policy making, and their recommendatory powers are
not even instantly effective since they are subject to
review by at least three (3) managers (dept. mgr.,
personnel mgr. And general manager), then it is evident
that these employees doe not possess managerial
status.

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employees of Barbizon Philippines,

Philippine Lingerie Corporation).

The fact that their work designations are either

managerial or supervisory is of no moment,
considering that it is the nature of their functions
and NOT SAID NOMENCLATURES which determines
their respective status.
A careful examination of the records of this case reveals
no evidence that rules out the commonality or
community of interest among the rank-and-file members
of the petitioners, and the herein declared rank-and-file
members of the respondent union. Instead of forming
another bargaining unit, the law requires them to be
members of the existing one. The ends of unionism
are better served if all the rank-and-file members
with substantially the same interests and who
invoke their right to self-organization are part of a
single unit so they can deal with their ER with
JUST ONE AND YET POTENT VOICE. The Ees
bargaining
power
with
management
is
strengthened thereby.
In the case at bar, there is no dispute that the petitioner
is the exclusive bargaining representative of the rankand-file employees of Triumph International.

BARBIZON PHILS INC. vs. NAGKAKAISANG

SUPERVISOR NG BARBIZON PHILS (1996)
FACTS:

Petitioner Phil. Lingerie Corp. (now Barbizon

Philippines Inc.) filed a petition for certification
election among its rank-and-file employees. As a
consequence thereof, 2 unions sought recognition:
(1) PHILIPPINE LINGERIE WORKERS UNION-ALAB
and
(2) BUKLOD NG MANGGAGAWA NG PHILIPPINE
LINGERIE CORPORATION
PLW Union moved for the exclusion of a number
of
employees
who
were
allegedly
holding
supervisory positions.

A certification election was conducted with the

votes of "supervisors and confidential" employees
being challenged.
PLW UNION filed an election protest. In the
meantime, BUKLOD moved for the opening of the
challenged ballots.

BLR: denied the protest and ruled that the alleged

supervisors are not managerial employees. The
petitioner was certified as the sole and exclusive
bargaining representative of all the regular rank-and-file

(formerly

BUKLOD was certified as the sole and exclusive

bargaining representative of all the rank-and-file
employees of Barbizon Phils (former PLC)
While the CBA was still in force, several
employees
organized
themselves
into
the
Nagkakaisang Supervisors Ng Barbizon Philippines,
Inc. (NSBPI) and the Nagkakaisang Excluded
Monthly Paid Employees Ng Barbizon, Philippines, Inc.
(NEMPEBPI) allegedly because they were excluded
from the coverage of the existing CBA between
petitioner Barbizon and BUKLOD.
Petitioner Barbizon alleged that the petitions for
certification election filed by the Nagkakaisang
Supervisor ng Barbizon Philippines, Inc. NAFLU
(NSBPI) must necessarily fail because the employees
designated as "supervisors" cannot legally form a
supervisors' union. Being part of the rank and file,
petitioner avers that said employees belong to the
"employer wide unit," which is the appropriate
bargaining unit of all its rank and file employees and
which is represented by the BUKLOD.
The Secretary of Labor granted the petition for
certification election filed by NSBPI

ISSUE: Whether the Undersecretary of Labor committed

grave abuse of discretion in granting NSBPI's petition for
certification election
HELD: YES
It has been the policy of the BLR to encourage the
formation of an employer unit unless circumstances
otherwise require. In other words, one employer
enterprise constitutes only one bargaining unit. The more
solid the employees are, the stronger is their bargaining
capacity.
However, the "one union one company" rule is not
without exception. The exclusion of the subject employees
from the rank-and-file bargaining unit and the CBA is
indefinitely a "compelling reason" for it completely
deprived them of the chance to bargain collectively with
petitioner and are thus left with no recourse but to group
themselves into a separate and distinct bargaining unit
and form their own organization.
The usual exception, of course, is where the employer unit
has to give way to the other units like the craft unit, plant
unit, or a subdivision thereof; the recognition of these
exceptions takes into accountant the policy to assure
employees of the fullest freedom in exercising their rights.
Otherwise stated, the one company-one union policy must
yield to the right of the employees to form unions or
associations for purposes not contrary to law, to selforganization and to enter into collective bargaining
negotiations, among others, which the Constitution
guarantees.

Med-Arbiter: denied the said motion.

BLR: affirmed the Med-Arbiter and ordered the election
to be conducted.

Inc.

INDOPHIL TEXTILE MILL WORKERS UNION vs.

VOLUNTARY ARBITRATOR CALICA (1992)
FACTS:

21

Petitioner Indophil Textile Mills Union and

respondent Indophil Textile Mills, Inc. executed a CBA
Indophil Acrylic Manufacturing Corp. was formed
and registered with the SEC. It became operational
and hired workers according to its criteria and
standards.
The petitioner union contends the plant facilities
built and set up by Acrylic should be considered as an
extension or expansion of the facilities of respondent

Labor Relations Cases

Company. In other words, it is the petitioner's

contention that Acrylic is part of the Indophil
bargaining unit; that the creation of the Indophil
Acrylic is a device of respondent Indophil Textile to
evade the application of the CBA between the union
and the company to Acrylic people.
On the other hand, respondent Indophil Textile
submits that it is a juridical entity separate and
distinct from Acrylic and cited the case of Diatagon
Labor Federations vs. Ople, which ruled that 2
corporations cannot be treated as single bargaining
unit even if their business are related.

Voluntary Arbitrator: ruled in favor of the respondent

and found that the provision in the CBA between Indophil
Textile Inc. and Indophil Textile Union does not extend to
the employees of Indophil Acrylic Corp
Issue: Whether the voluntary arbitrator committed
grave abuse of discretion in failing to disregard the
corporate entity of Indophil Acrylic
Held: NO
Acrylic Indophil Corporation cannot be considered an
extension of Indophil Corporation, as to cover in one
bargaining unit all employees thereof. Note separate
corporate entities: doctrine of piercing the veil of
corporate entity not applied.
The fact that the businesses of private respondent and
Acrylic are related, that some of the employees of the
private respondent are the same persons manning and
providing for auxilliary services to the units of Acrylic,
and that the physical plants, offices and facilities are
situated in the same compound, it is our considered
opinion that these facts are not sufficient to justify the
piercing of the corporate veil of Acrylic.
Hence, the Acrylic not being an extension or expansion
of private respondent, the rank-and-file employees
working at Acrylic should not be recognized as part of,
and/or within the scope of the petitioner, as the
bargaining representative of private respondent.

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on the grounds that the petition was filed out of time

and that there is a deadlocked of CBA negotiation
Med-Arbiter: denied the Motion to Dismiss and direct the
conduct of a certification election among rank-and-file
employees
BLR: set aside the order of the Med-Arbiter and ruled in
favor of respondent
Issue: Whether the BLR committed grave abuse of
discretion?
Held: NO. Petition Denied.
The Deadlock Bar Rule simply provides that a petition for
certification election can only be entertained if there is no
pending bargaining deadlock submitted to conciliation or
arbitration or had become the subject of a valid notice of
strike or lockout. The principal purpose is to ensure
stability in the relationship of the workers and the
management.
It is a rule in this jurisdiction that only a certified CBA
i.e., an agreement duly certified by the BLR may serve as
a bar to certification elections.
This rule simply provides that a petition for certification
election or a motion for intervention can only be
entertained within sixty days prior to the expiry date of an
existing collective bargaining agreement. Otherwise put,
the rule prohibits the filing of a petition for certification
election during the existence of a CBA except within the
freedom period, as it is called, when the said agreement is
about to expire. The purpose, obviously, is to ensure
stability in the relationships of the workers and the
management by preventing frequent modifications of any
CBA earlier entered into by them in good faith and for the
stipulated original period.

ASSOCIATED LABOR UNIONS (ALU) vs.

HON. FERRER-CALLEJA (1989)
FACTS:

NATIONAL CONGRESS OF UNIONS IN THE SUGAR

INDUSTRY OF THE PHILS (NACUSIP) vs.
HON. FERRER-CALLEJA (1992)

FACTS:

Dacongcogon Sugar and Rice Milling Co. entered

into a CBA with respondent National Federation of
Sugar Workers (NFSW)
When the CBA expired, it was extended for
another 3 years with reservation to negotiate for its
amendment, particularly on wage increases, hours of
work, and other terms and conditions of
employment.
However, a deadlock in negotiation ensued on
the matter of wage increases and optional
retirement. In order to obviate friction and tension,
the parties agreed on a suspension to provide a
cooling-off period to give them time to evaluate and
further study their positions. Hence, a Labor
Management Council was set up and convened, with
a representative of the Department of Labor and
Employment, acting as chairman, to resolve the
issues.
Petitioner filed filed a petition for direct
certification or certification election among the rank
and file workers of Dacongcogon.
Respondent NSFW moved to dismiss the petition

GAW Trading, Inc. recognized ALU as the sole and

exclusive bargaining agent for the majority of its
employees. A CBA was executed.
In the meantime, Southern Philippines Federation
of Labor (SPFL) together with Nagkaisang Mamumuo
sa GAW (NAMGAW) undertook a Strike after it failed to
get GAW Trading Inc. to sit for a conference respecting
its demands in an effort to pressure GAW Trading Inc.
to make a turnabout of its standing recognition of ALU
as the sole and exclusive bargaining representative of
its employees
GAW Trading Inc. filed a TRO
Labor Arbiter: held the strike as illegal
GAW
Lumad
Labor
Union
(GALLU-PSSLU)
Federation ... filed a Certification Election petition

Med-Arbiter: ruled for the holding of a certification

election in all branches of GAW Trading Inc.
BLR: granted ALUs appeal (MR) and reversed the MedArbiter on the ground that the CBA has been effective and
valid and the contract bar rule applicable

SPFL filed a MR to the BR

BLR: reversed its previous decision and ordered the

holding of a certification election among the rank-and-file
workers of GAW Trading, Inc. and ruled that the contractbar rule does not apply in this case because the CBA
involved is defective as it was not duly submitted in
accordance with the Implementing Rules. xxx There is no

22

Labor Relations Cases

proof tending to show that the CBA has been posted in
at least 2 conspicuous places in the establishment at
least 5 days before its ratification and that it has been
ratified by the majority of the employees in the
bargaining unit.
Issue: Whether the contract-bar rule is applicable in this
case?
HELD: NO
Wind no reversible error in the challenged decision of
respondent director. A careful consideration of the facts
culled from the records of this case, yields the conclusion
that the collective bargaining agreement in question is
indeed defective hence unproductive of the legal effects
attributed to it by the former director in his decision
which was subsequently and properly reversed.
To be a bar to a certification election, the CBA must be
adequate in that it comprise substantial terms and
conditions of employment

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impasse, which . . "presupposes reasonable effort at good

faith bargaining which, despite noble intentions, does not
conclude in agreement between the parties."
While it is true that, in the case at bench, one year had
lapsed since the time of declaration of a final certification
result, and that there is no collective bargaining deadlock,
public respondent did not commit grave abuse of
discretion when it ruled in respondent union's favor since
the delay in the forging of the CBA could not be attributed
to the fault of the latter.
If the law proscribes the conduct of a certification election
when there is a bargaining deadlock submitted to
conciliation or arbitration, with more reason should it not
be conducted if, despite attempts to bring an employer to
the negotiation table by the "no reasonable effort in good
faith" on the employer certified bargaining agent, there
was to bargain collectively. It is only just and equitable
that the circumstances in this case should be considered
as similar in nature to a "bargaining deadlock" when no
certification election could be held.

CAPITOL MEDICAL CENTER OF CONCERNED

EMPLOYEES-UNIFIED FILIPINO SERVICE
WORKERS vs. HON. LAGUESMA (1997)

KAISAHAN NG MANGGAGAWANG PILIPINO

(KAMPIL-KATIPUNAN) vs. HON. TRAJAN0 (1991)
FACTS:

FACTS:

Respondent CMC Employees Assoc.-Alliance of

Filipino Workers filed a petition for certification
election among the rank-and-file employees of the
Capitol Medical Center (CMC). After the election,
respondent union was held as the sole and exclusive
bargaining representative of the rank and file
employees at CMC.
Respondent Union invited the CMC to the
bargaining table by submitting its economic proposal
for a CBA. However, CMC refused to negotiate and
instead challenged the unions legal personality
through a petition for cancellation of the certificate
of registration. Respondent union was left with no
other recourse but to file a notice of strike against
CMC for ULP. This eventually led to a strike.
In the meantime, petitioner Capitol Medical
Center Employees-Unified Filipino Service Workers
filed a petition for certification election among the
rank-and-file employees of the CMC. It alleged in its
petition that a certification election can now be
conducted as more that 12 months have lapsed since
the last certification election was held and that no
CBA was executed before.
Respondent union opposed the petition and
moved for its dismissal. It contended that it is the
certified bargaining agent of the rank-and-file
employees of the CMC Hospital.
Petitioner claims that since there is no evidence
on record that there exists a CBA deadlock, the law
allowing the conduct of a certification election after
twelve months must be given effect in the interest of
the right of the workers to freely choose their sole
and exclusive bargaining agent

The Secretary of Labor: dismissed the petition for

certification election and directed CMC to negotiate a
CBA with respondent union
Issue: Whether there is a bargaining deadlock between
CMC and respondent union, before the filing of petitioner
of a petition for certification election
HELD: NONE
There is a deadlock when there is a complete blocking or
stoppage resulting from the action of equal and opposed
forces . . . . The word is synonymous with the word

National Federation of Labor Union (NAFLU) was

declared by the BLR the exclusive bargaining agent of
all rank-and-file employees of Viron Garments
More than 4 years after, another union, KAMPILKatipunan, filed with the BLR a petition for
certification election with the support of more than
30% of the workers VIRON.
Despite NAFLUs opposition, the Med-Arbiter
ordered the holding of a certification election, citing
the fact that since the certification of NAFLU in 1981
as the sole bargaining agent, no CBA has been
concluded.
NAFLU appealed, contending that at the time the
petition for certification election was filed, it was in the
process of collective bargaining with VIRON; that in
fact a deadlock in negotiations prompted it to file a
notice of strike; that these circumstances barred a
petition for certification election, pursuant to the Rules
Implementing the Labor Code.

BLR: upheld NAFLUs contentions and dismissed the

petition for certification election.
Issue: Whether KAMPILs petition for certification election
is barred by the alleged bargaining deadlock between
NAFLU and VIRON
HELD: NO
For a bargaining deadlock to bar a petition for certification
election, such deadlock must have been submitted to
conciliation or arbitration, or must have been the subject
of a valid strike or lockout notice before not after the
filing of the petition for certification election.
The records do not show that there was a bargaining
deadlock prior to the filing of the petition for certification
election. When NAFLU was proclaimed the exclusive
bargaining representative of all VIRON employees up to
when KAMPIL filed its petition for certification election or a
period of more than four (4) years, no collective
bargaining agreement was ever executed, and no deadlock
ever arose from negotiations between NAFLU and VIRON
resulting in conciliation proceedings or the filing of a valid
strike notice. In the case, the strikes and submission to
compulsory arbitration took place after the filing of the
petition for certification election

23

Labor Relations Cases

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LA SUERTE CIGAR & CIGARETTE FACTORY vs.

DIRECTOR OF THE BLR (1983)
FACTS:

The La Suerte Cigar and Cigarette Factory

Provincial and Metro Manila Sales Force Association
applied for and was granted chapter status by the
National Association of Trade Unions (NATU)
Sometime later, 31 local union members signed a
joint letter withdrawing their membership in NATU.
The local union and NATU filed a petition for
certification election.
The company opposed on the ground that it was
not supported by at least 30% (now 25%) of the
proposed bargaining unit because (a) of the alleged
48 members of the local union, 31 had withdrawn
prior to the filing of the petition, and (b) 14 of the
alleged members of the union were not employees of
the company but were independent contractors. The
BLR director denied the companys objection

Issue: Whether the withdrawal of 31 unions from NATU

affected the petition for certification election insofar as
the 30% requirement is concerned
HELD: YES
The SC reversed the BLR, it appearing that the 31 union
members has withdrawn their support to the petition
BEFORE the filing of said petition. It would be otherwise
if the withdrawal was made AFTER the filing of the
petition for it would then be presumed that the
withdrawal was not free and voluntary. The presumption
would arise that the withdrawal was procured through
duress, coercion or for valuable consideration. In other
words, the distinction must be that withdrawals made
before the filing of the petition are presumed voluntary
unless there is convincing proof to the contrary, whereas
withdrawals made after the filing of the petition are
deemed involuntary.
The reason for such distinction is that if the withdrawal
or retraction is made before the filing of the petition, the
names of employees supporting the petition are
supposed to be held secret to the opposite party.
Logically, any such withdrawal or retraction shows
voluntariness in the absence of proof to the contrary.
Moreover, it becomes apparent that such employees had
not given consent to the filing of the petition, hence the
subscription requirement has not been met.

from the final count because the competing unions

agreed earlier that the INK members should not be
allowed to vote because they are not members of any
union and refused to participate in the previous
certification election.
The INK employees protested the exclusion of
their votes. They filed a petition to cancel the election
alleging that it was not fair and the result thereof did
not reflect the true sentiments of the majority of the
employees.
TUEU-OLALIA opposed the petition. It contended
that petitioners do not have legal personality to
protest the results of the election because they are not
members of either the contending unions, but of the
INK which prohibits its followers to, on religious
grounds, from joining or forming any labor
organization.

Med-Arbiter: seeing no merit in the INK employees

petition, certified the TUEU-OLALIA as the sole and
exclusive bargaining agent of the rank-and-file employees.
BLR: denied the appeal of the petitioner
Issue: Whether the INK members may vote in the
certification election
HELD: YES
Logically, the right NOT to join, affiliate with, or assist any
union, and to disaffiliate or resign from a labor
organization, is subsumed in the right to join, affiliate
with, or assist any union, and to maintain membership
therein. The right to form or join a labor organization
necessarily includes the right to refuse or refrain from
exercising said right. It is self-evident that just as no one
should be denied the exercise of a right granted by law, so
also, no one should be compelled to exercise such a
conferred right. The fact that a person has opted to
acquire membership in a labor union does not preclude his
subsequently opting to renounce such membership.
In the Certification Election, all members of the unit,
whether union members or not, have the right to vote.
Union membership is not prerequisite. If majority of the
unit members do not want a union, as expressed in the
certification election, such majority decision must be
respected. Hence, the INK members may vote.

We hold and rule that the 14 members of respondent

local union are dealers or independent contractors. They
are not employees of petitioner company. With the
withdrawal by 31 members of their support to the
petition prior to or before the filing thereof, making a
total of 45, the remainder of 3 out of the 48 alleged to
have supported the petition can hardly be said to
represent the union.
REYES vs. TRAJANO (1992)

NATIONAL FEDERATION OF LABOR vs.

SECRETARY OF LABOR (1998)

FACTS:

The BLR authorized the conduct of certification

election among the employees of Tri-Union Industries
Corporation. The competing unions were the TUEUOLALIA and TUPAS.
Of the 384 workers initially deemed to be
qualified voters, only 240 actually took part in the
election. Among the 240 who cast their votes, 141
were members of the Iglesia ni Kristo (INK)
The ballots provided for 2 choices: (a) TUPAS;
(b) TUEU-OLALIA; and (c) NO UNION.
The challenged votes were those cast by the 141
INK members. They were segregated and excluded

FACTS:

24

A certification election was conducted among the

rank-and-file employees of the Hijo Plantation, Inc.
(HPI).
Petitioner NFL (National Federation of Labor) was
chosen as the bargaining agent of its rank-and-file
employees
Protests filed by the company and three other
unions against the results of the election on the
ground that the certification election was marred by
massive fraud and irregularities because number of

Labor Relations Cases

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employees were not able to cast their votes because

they were not properly notified of the date
Labor Secretary: denied the petition to annul the
election and instead certified petitioner NFL as the sole
and exclusive bargaining representative of the rank-andfile employees of private respondent HPI.

However, on motion of HPI, the Secretary of

Labor, reversed his resolution. NFLs MR was denied.
Hence, this petition

Issue: Whether the DOLE should not have given due

course to private respondent's petition for annulment of
the results of the certification election.
HELD:
The SC ruled in favor of the NFL. The workers in this
case were denied this opportunity. Not only were a
substantial number of them disfranchised, there were, in
addition, allegations of fraud and other irregularities
which put in question the integrity of the election.
Workers wrote letters and made complaints protesting
the conduct of the election. The Report of Med-Arbiter
Pura who investigated these allegations found the
allegations of fraud and irregularities to be true.
The SC invalidated the certification election upon a
showing of disfranchisement, lack of secrecy in the
voting and bribery. The workers' right to selforganization as enshrined in both the Constitution and
Labor Code would be rendered nugatory if their right to
choose their collective bargaining representative were
denied. Indeed, the policy of the Labor Code favors the
holding of a certification election as the most conclusive
way of choosing the labor organization to represent
workers in a collective bargaining unit. In case of doubt,
the doubt should be resolved in favor of the holding of a
certification election.

workers. Companys response was to dismiss him from

his employment. De Leon demanded reinstatement
but company refused repeatedly.
De Leon filed a complaint for illegal dismissal,
reinstatement & payment of backwages
LA: found for De Leon & declared the dismissal as
illegal. He ruled that De Leon was not a mere casual
employee but a regular employee.
NLRC: reversed LA. MR denied. Hence, this
appeal.

ISSUE: WON De Leon was mere casual employee

Held: NO, reversal of the decision was erroneous
Under Art. 281 of the LC, the primary standard of
determining a regular employment is the reasonable
connection bet. the particular activity performed by the
employee in relation to the usual business or trade of the
employer. Also, if the employee has been performing the
job for at least 1 year, even if the performance is not
continuous or merely intermittent, the law deems the
repeated & continuing need for its performance as
sufficient evidence for the necessity if not indispensability
of that activity to the business.
In this case, the records reveal that De Leons tasks
assigned to him included not only the painting of building
as claimed by the respondent but also cleaning & oiling
machines, even operating a drilling machine & other odd
jobs.
- A regular employee, Tanque, attested in his
affidavit that De Leon worked w/ him as
maintenance man when there was no painting job.
- In its comment, company confirmed the veracity
of De Leons claim when it admitted that he was
occasionally instructed to do other odd things in
connection w/ the maintenance while he was
waiting for materials he would need in his job or
when he had finished early the one assigned to
him
The law demands that the nature & entirety of the
activities performed by the employee be considered.
Furthermore, the petitioner performed his work of
painting
&
maintenance
activities
during
his
employment which lasted for more than 1 year, until
early Jan., 1983 when he demanded to be regularized
but was dismissed.
The fact that he was rehired weeks after shows that
it can not be denied that his activities as regular
painter & maintenance man still exist.
What
determines
whether
a
certain
employment is regular or casual is not the will &
word of employer to which the desperate worker
often accedes nor the procedure of hiring or
manner of payment of salary. It is the nature of
the activities performed in relation to the
particular business or trade considering all
circumstances, & in some cases the length of time
of its performance & its continued existence.
There was an obvious devious dismissal of De Leon to
evade the obligations of petitioner to the worker.

DE LEON vs. NATIONAL LABOR UNION (1989)

FACTS:

De Leon was employed by La Tondea, Inc. at

the Maintenance Section of its Engineering
Department where his work consisted mainly of
painting & other odd jobs related to maintenance. He
was paid on a daily basis through petty cash
vouchers.
After more than 1 year of service, De Leon
requested to be included in the payroll of regular

Petition granted.

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Labor Relations Cases

villadolid
digests

Theatrical Enterprises, Inc., The lease contract

provided that the De Leon would become the owner of
the building, together with all the equipment and
accessories, at the expiration of the lease
Before the expiration of the lease, the Filipino
theatrical notified its EEs of their termination. After the
expiration of the lease, the theater building was turned
over to De Leon who immediately demolished the
building, and on the same site she constructed the
new Dalisay Theater Building;
The theatre was opened, with a new set of personnel,
retaining only the services of four old EEs; Said
theater was operated jointly by the motion picture
firms LVN Pictures, Inc., Premier Productions and the
Sampaguita Pictures, Inc., as lessees thereof.
30 persons, all members of the NLU, picketed at the
said theater by walking to and from on the sidewalk
fronting the lobby of the theater and displaying
placards
Defendants during the picketing tried to persuade
patrons or customers of the Dalisay Theater to refrain
from buying tickets or seeing the show. Plaintiffs
sought to recover damages and an injunctive relief in
the court.

Issue: Whether the picketing of the EEs are illegal

HELD: NO
The Court finds that the acts of the defendants were not
such as to disturb the public peace at the place. There was
no clear and present danger of destruction to life or
property or of other forms of breach of the peace.
There was no existence of a relationship of employers and
employees between plaintiffs and defendants, although
defendants' purpose in picketing plaintiffs was for the
defendants' reinstatement of their services in the new
Dalisay Theater under the new Management.
Picketing peacefully carried out is not illegal even in the
absence of employer-employee relationship, for peaceful
picketing is a part of the freedom of speech guaranteed by
the Constitution.

LIWAYWAY PUBLICATIONS, INC. vs. PERMANENT

CONCRETE WORKERS UNION (1981)

PICKETING AND
OTHER CONCERTED ACTIVITIES
DE LEON vs. NATIONAL LABOR UNION (1957)
FACTS:
Petitioner Narcisa B. de Leon is the owner of a parcel
of land in Manila. She leased said land to the Filipino

FACTS:
Liwayway Publications, Inc. was the 2nd sub-lessee of
the premises of the respondent Permanent Concrete
Products, Inc, in Manila
The EEs of Permanent Concrete declared a strike. For
unknown reason, they picketed, stopped and
prohibited Liwayways truck from entering the
compound to load newsprint from its bodega. The
union members also intimidated the and threatened to
harm the Liwayways EEs who were in the truck.
Liwayway filed an action for damages and injunction
against the union in the CFI Manila
CFI: issued preliminary injunction and award damages
to the ER.
The union contends that the CFI has no jurisdiction
over the case because the case arose out of labor
dispute and that their picketing is an extension of
freedom of speech guaranteed by the Constitution
Issue: Whether Liwayway is a third-party or an innocent
bystander whose right has been invaded and, therefore
entitled to protection by regular courts
HELD: YES
We find and hold that there is no connection between the
Liwayway Publications, Inc. and the striking Union
Although picketing is not prohibited , a picketing labor

26

Labor Relations Cases

union has no right to prevent employees of another
company from getting in and out of its rented premises,
otherwise it will be held liable for damages for its act
against innocent bystanders.

PHIL BLOOMING MILLS EMPLOYEES ORG. vs. PHIL

BLOOMING MILLS INC. (1973)
FACTS:
The workers of respondent Blooming Mills Inc.
planned a demonstration in Malacanang to protest
alleged abuses of the Pasig Police
Upon learning of this plan, the Company
management called a meeting with the union officers
The Company officers warned the union officers that
the planned demonstration would be in violation of
the no strike clause of the CBA.
The union officers asserted that the demonstration
had nothing to do with the Company with which the
Union had no dispute
When the workers proceeded with the demonstration
despite the pleas of the Company, it filed an ULP
case against the Union and its officers for violation of
the no strike clause of the CBA
CIR: declared the Union and its officers guilty if
bargaining in bad faith for violating the CBA and
ordered the dismissal of the union officers
Issue: Whether the Union and its officers were rightfully
dismissed the respondent company?
HELD: NO. CIR reversed.
The demonstration held by the EEs before the Malacanag
was against alleged abuses of some Pasig Policemen and
not against the ER. Said demonstration was purely and
completely an exercise of freedom of expression. They
are only in the exercise of their civil and political rights
for their mutual aid and protection from what they
believed are police excesses.

GREAT PACIFIC LIFE EMPLOYEES UNION vs. GREAT

PACIFIC LIFE ASSURANCE CORP. (1999)
FACTS:
Petitioner Great Pacific Life Employees Union and
Respondent Great Pacific Life Assurance Corporation
entered into a CBA. Before the expiration of the CBA,
the parties submitted their respective proposals and
counter-proposals on its projected renewal.
The ensuing series of negotiations however resulted
in a deadlock which later on resulted into a Strike
The Company required all striking employees to
explain in writing within 48 hours why no disciplinary
action, including possible dismissal, should be taken
against them. Complying with the order, UNION
President Alan Domingo and some strikers explained
that they did not violate any law as they were merely
exercising their constitutional right to strike.
Petitioner Rodel P. de la Rosa and the rest of the
strikers however ignored the management directive.
GREPALIFE found the explanation of Domingo totally
unsatisfactory and considered de la Rosa as having
waived his right to be heard. Thus, both UNION
officers were terminated. Notwithstanding their
dismissal from employment, Domingo and de la Rosa
continued to lead the members of the striking union
in their concerted action against management.
Domingo and de la Rosa sued GREPALIFE for illegal
dismissal, ULP and damages.
Labor Arbiter: ruled in favor of the EEs
and
ordered their reinstatement.
NLRC: reversed LA and ruled in favor of ER.

villadolid
digests

Issue: Whether the dismissal of the union officers is

discriminatory constituting ULP?
HELD: NO. NLRC affirmed.
The right to strike, while constitutionally recognized, is not
without legal constrictions.
Under Art. 264 of the LC, ''any worker or union officer
who knowingly participates in the commission of illegal
acts during a strike may be declared to have lost his
employment status."
The decision of respondent GREPALIFE to consider the
union officers as unfit for reinstatement is not essentially
discriminatory and constitutive of an ULP. Discriminating
involves either encouraging membership in any labor
organization or is made on account of the employee's
having given or being about to give testimony under the
Labor Code. These have not been proved in this case
To elucidate further, there can be no discrimination where
the employees concerned are not similarly situated. A
union officer has larger and heavier responsibilities than a
union member. Union officers are duty bound to respect
the law and to exhort and guide their members to do the
same; their position mandates them to lead by example.
By committing prohibited activities during the strike, de la
Rosa as Vice President of petitioner UNION demonstrated
a high degree of imprudence and irresponsibility. Verily,
this justifies his dismissal from employment. Since the
objective of the Labor Code is to ensure a stable but
dynamic and just industrial peace, the dismissal of
undesirable labor leaders should be upheld.

GOLD CITY PORT SERVICE vs. NLRC (1995)

FACTS:
EEs of petitioner Gold City declared a strike against
the latter. ER filed a complaint for Illegal Strike with
prayer for a restraining order/preliminary injunction.
LA: found the strike to be illegal. The workers who
participated in the illegal strike did not, however, lose
their employment, since there was no evidence that
they participated in illegal acts. As regards the six
union officers, the Labor Arbiter ruled that they could
not have possibly been "duped or tricked" into signing
the strike notice for they were active participants in
the conciliation meetings and were thus fully aware of
what was going on. Hence, said union officers should
be
accepted
back
to
work
after
seeking
reconsideration from herein petitioner.
NLRC: affirmed with modification the Arbiter's
decision. It held that the concerted action by the
workers was more of a "protest action" than a strike.
Private respondents, including the six union officers,
should also be allowed to work unconditionally to avoid
discrimination.
Issue: Whether the union members and officers were
rightfully dismissed?
HELD:
Under Article 264 of the Labor Code, a worker merely
participating in an illegal strike may not be terminated
from his employment. It is only when he commits
illegal acts during a strike that he may be declared to
have lost his employment status. Since there appears no
proof that these union members committed illegal acts
during the strike, they cannot be dismissed. Hence, they
are entitled to reinstatement.
However, considering that a decade has already lapsed
from the time the disputed strike occurred, we find that to

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Labor Relations Cases

award separation pay in lieu of reinstatement would be
more practical and appropriate. No backwages will be
awarded to union members as a penalty for their
participation in the illegal strike.
The fate of Union Officers is different. Their insistence
on unconditional reinstatement or separation pay
and backwages is unwarranted and unjustified. For
knowingly participating in an illegal strike, the law
mandates that a union officer may be terminated from
employment. The union officers are, therefore, not
entitled to any relief,
WHO DECLARES LOSS OF EMPLOYMENT STATUS?
The Employer. The law, using the word may, grants the
ER the option of declaring a union officer who
participated in an illegal strike as having lost his
employment.

RELIANCE SURETY & INSURANCE INC. vs. NLRC

FACTS:
Reliance Surety Insurance Co., Inc., thru its
manager, effected a change in the seating
arrangement of its personnel to avoid unnecessary
loss of productive working time due to personal and
non-work-related conversations, personal telephone
calls and non-work-connected visits by personnel to
other departments
4 EEs protested the transfer of their tables and
seats, claiming that the change was without prior
notice and was done merely to harass them as union
members. A heated discussion ensued, during which
said EEs were alleged to have hurled unprintable
insults to the manager and supervisors. They were
placed under preventive suspension and dismissed
after investigation
The Company Union filed in behalf of the dismissed
EEs a complaint for illegal dismissal.
While the complaint for illegal dismissal and ULP was
pending, the union went on strike and picketed the
company premises by forming human barricades,
which effectively obstructed the free ingress to and
egress from its premises, preventing its officials and
employees from doing their usual duties.
The Company filed a petition to declare the strike
illegal
for
failure
to
observe
legal
strike
requirements.
LA: found the strike to be illegal.
NLRC: affirmed LA. However, it ordered that the
striking union officers be reinstated without
backwages instead of being dismissed.

villadolid
digests

LABORERS UNION vs. CIR (1964)

FACTS:
Cromwell Commercial Inc. and its Company Union
entered into a CBA, among those agreed is a salary
increase to the permanent EEs and to restore all
salesmen to the status of salary basis.
However, the company gave no salary increase to its
employees, except to 3 who were not union members.
The salaries of the salesmen were not really restored.
When 2 EEs were dismissed, the Union struck and
picketed the premises of the company. The company
warned the strikers that they will be dismissed if they
will not return to work because the strike violates the
no strike clause in the CBA
The Union filed with the CIR a ULP case against the
Company.
CIR: ordered reinstatement to some of the EEs giving
them only half backwages, other strikers was not
awarded any backwages at all, and there were 3
strikers denied of reinstatement.
Issue: Whether the EEs that were denied reinstatement
were discriminatorily dismissed, hence entitled to
backwages?
HELD: NO. CIR AFFIRMED
2 types of employees involved in ULP cases:
(1) those who were discriminatorily dismissed for
union activities; and
(2) those who voluntarily went on strike.
Both are entitled to reinstatement. HOWEVER, although
discriminatorily discharged, reinstatement can be denied
because of (1) unlawful conduct or (2) because of
violence.
GR: No BACKWAGES on strike. In an economic strike, the
strikers are not entitled to backwages on the principle that
a fair days wage accrues only for a fair days labor
EXPN: Discriminatorily dismissed EEs received backpay
from the date of the act of discrimination
In the CAB, the EEs denied of reinstatement were found
guilty of acts of violence consisting of hurling stones which
smashed glass windows of the building of the company
and the headlights of a car and the utterance of
obscenities such as "putang ina."
IF, DURING THE STRIKE, A STRIKING EE HAS FOUND
ANOTHER
JOB,
IS
HE
ENTITLED
FOR
REINSTATEMENT?

Issue: Whether strikers who have staged an illegal

strike and not marked with good faith may be reinstated
to work.
HELD: NO. NLRC REVERSED.
There is no dispute that the strike in question was
illegal, for failure of the striking personnel to observe
legal strike requirements, to wit: (1) as to the fifteenday notice; (2) as to the 2/3 required vote to strike done
by secret ballot; (3) as to submission of the strike vote
to the Department of Labor at least seven days prior to
the strike.
Good faith is a valid defense against claims of illegality of
a strike. We do find, however, not a semblance of good
faith here, but rather, plain arrogance, pride, and
cynicism of certain workers.

CROMWELL COMMERCIAL EMPLOYEES AND

YES. The mere fact that strikers or dismissed EEs

have found such employment elsewhere is not
necessarily a bar to their reinstatement.

CONSOLIDATED LABOR ASSOCIATION OF THE

PHILS. vs. MARSMAN & CO., INC.,(1964)
FACTS:
The Union Marsman & Company Employees and
Laborers Association (MARCELA), entered into a CBA
with MARSMAN and COMPANY.
Despite several meetings, the parties failed to reach
an agreement which is eventually lead to a strike
It appears that the strike was attended by act of
violence on the part of certain strikers.
In the Sec. of Labor, the strikers agreed to return to
work on the promise that the Company would discuss
their demands with them.
While the Company admitted some of the strikers, it
REFUSED readmission to others unless they ceased to

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digests

be active as union members. As a result, the strike

and picketing were resumed.
The Union contends that the strikers were
discriminately dismissed which is an ULP; hence they
are entitled to back wages.

Issue: Whether the strikers are entitled to backpay.

HELD: NO
The SC ruled that in an economic strike, the strikers
ARE NOT ENTITLED to backpay, since the employer
SHOULD GET THE EQUIVALENT DAYS WORK FOR WHAT
HE PAYS HIS EMPLOYEES. During the time that the strike
was an economic one, complainant had no right to
backpay.
COURTS DISCRETION ON BACKWAGES
Even after finding of ULP by the ER, award of backwages
rests on the Courts discretion

NATL FEDERATION OF LABOR vs. NLRC (1997)

FACTS:
Respondent
PERMEX
Producer
and
Exporter
Corporation is a Zamboanga City-based corporation
engaged in the business of fish and tuna export.
The ER dismissed some of its EEs who happended to
be members of the National Federation of Labor
PERMEX contended that the dismissed EEs were
using their union activities to go on undertime or to
justify their constant and frequent absences which
evidently was a violation of company policy
As a result, over 200 workers picketed outside
company premises. The gates were barricaded, thus
blocking ingress and egress of company vehicles,
trapping 50 workers inside and paralyzing company
operations. Additionally, 700 non-striking workers
were prevented from working
PERMEX filed a complaint to declare the strike as
illegal. Likewise, NFL filed a case against PERMEX for
ULP and damages
LA: declared the strike illegal and awarded PERMEX
500K for moral and exemplary damages.
NLRC: affirmed LA but deleted the moral and
exemplary damages and instead award P300T as
compensatory damages to PERMEX.
Issue: Whether the NLRC committed GAD
HELD: NO
In order that damages may be recovered, the best
evidence obtainable by the injured party must be
represented. Actual or compensatory damages cannot be
presumed, but must be duly proved, and so proved with
a reasonable degree of certainty.
If the proof is flimsy and insubstantial, no damages will
be awarded." We consider the amount of P3000,000.00
just and reasonable under the circumstances

KINDS OF EMPLOYMENT -

SINGER SEWING MACHINE CO. vs. DRILON (1991)

FACTS:
Respondent union filed a petition for direct
certification as the sole and exclusive bargaining
agent of Petitioner Company in Baguio.
The Company opposed on the ground that the union
members are actually not employees but are
independent contractors as evidenced by the
collection agency agreement which they signed.
Med-Arbiter: finding that there exists an ER-EE
relationship between the union members and the
Company, granted the petition for certification election
The Union contended that they "perform the most
desirable and necessary activities for the continuous
and effective operations of the business of the
petitioner Company" (citing Art. 280 of the LC)
Issue: Whether Art. 280 may be use as a yardstick in
determining the existence of employment relationship.
HELD: NO
ARTICLE 280 applies where the existence of ER-EE
relationship is NOT THE ISSUE in the dispute. It merely
distinguishes between 2 kinds of EEs, i.e., regular
employees and casual employees, for purpose of
determining the right of an EE to certain benefits, to join
or form a union, or to security of tenure.

BAGUIO COUNTRY CLUB CORP vs. NLRC (1992)

FACTS:
Private respondent Jimmy Calamba was employed by
petitioner company on a day to day basis as laborer
and dishwasher for a period of 10 months . He was
also hired as a gardener for more than 1 year when he
was dismissed by the petitioner.
Calamba filed complaint for illegal dismissal
LA: declared Calamba as a regular EE and ordered his
reinstatement.
NLRC: affirmed LA
Petitioner maintains that private respondent Calamba
was a contractual employee whose employment was
for a fixed and specific period as set forth and
evidenced by the private respondent's contracts of
employment
Issue: Whether Calamba has acquired the status of
regular EE
HELD: YES. NLRC affirmed
The nature of private respondent Colombo's employment
as laborer, gardener, and dishwasher pertains to a regular
employee because they are necessary or desirable in the
usual
business
of
petitioner
as
a
recreational
establishment.

Day-to-Day Contractual EE becoming Regular

The repeated re-hiring and continuing need of service of
the EE are sufficient evidence of the necessity and
indispensability of his service to the ERs business or trade.

BETA ELECTRIC CORP. vs. NLRC (1990)

FACTS:
Petitioner Company hired the private respondent
Luzviminda Petilla as clerk typist effective December

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Labor Relations Cases

15, 1986 until January 16, 1987. The Co. gave her
an extension up to June 30, 1987.
On June 22, 1987 her services were terminated
without notice or investigation. Hence, she filed a
complaint for illegal dismissal.
Petitioner Co. argues mainly that the private
respondent's appointment was TEMPORARY and
hence she may be terminated at will.

Issue: Whether the dismissal is valid?

HELD: NO
An employment may only be said to be TEMPORARY
where it has been fixed for a specific undertaking the
completion and the nature of services to be performed is
SESONAL and the employment is for the duration of the
season.

Temporary EE becoming Regular -A typist-clerk cannot be said as a temporary EE because

it is far from being specific or seasonal; she is a regular
EE because he has been engaged to perform activities
necessary and desirable in the usual business.

SALAZAR vs. NLRC (1996)

FACTS:
Petitioner
Salazar,
was
employed
as
construction/project
engineer
by
HL
Carlos
Construction for the construction of the Monte de
Piedad building in Cubao, Quezon City.
Salazar received a memorandum issued by the
companys project manager, informing him of the
termination of his services.
Salazar filed a complaint for illegal dismissal, and for
non-payment of benefits
LA: declared that Salazar is not entitled to
separation pay. He was hired as a PROJECT
EMPLOYEE and his services were terminated due to
the completion of the project.
NLRC affirmed
Issue: Whether Salazar is a project EE and, therefore,
not entitled to separation pay
HELD: YES
GR: Project EEs are entitled to separation pay
EXPN: Project EEs are not entitled to separation pay if
they are terminated as a result of the completion of the
project, regardless of the projects in which they have
been employed.
Salazars dismissal was due to the completion of the
construction of the building.

DE JESUS vs. PHILIPPINE NATIONAL

CONSTRUCTION CORP. (1991)
FACTS:
Petitioner Eugenio De Jesus, was a carpenter for the
respondent
Philippine
National
Construction
Corporation. While on duty, he vomited blood and
was treated at the Company clinic. After 3months,
he reported back, but he was no longer accepted.
De Jesus filed a complaint for reinstatement with
backwages and payment legal benefits.
The Company contended that De Jesus was hired as
a PROJECT EMPLOYEE and his separation was due to
the completion of the project.

villadolid
digests

Salazar contended that he was given appointments for

specific project since 1974 up to 1984. Hence, he has
become a REGULAR EE and not a PROJECT EE who
may be terminated only for a lawful cause.

Issue: Whether Salazar is considered a regular EE

HELD: YES
A non-project EE is entitled to regular employment if he
has rendered service for more than 10 years. As such he
can not be terminated unless for just cause.
There are 3 types of non-project employees;
1. Probationary; 2. Regular; and 3. Casual
Based on the action form filed by the petitioner he is
considered as probationary who after 6 months have
achieve a regular status.

MERCADO, SR., vs. NLRC (1991)

FACTS:
Petitioners were agricultural workers utilized by private
respondents in all the agricultural phases of work on
the 7 1/2 hectares of rice land and 10 hectares of
sugar land owned by the latter;
They contended that they started to work in the farm
of private respondents between 1949 and 1979. In
any case, their individual employment exceeds 1 year.
Petitioners were dismissed from work. Hence, they
filed a complaint for illegal dismissal
Private respondent Cruz denied that the said
petitioners were her regular employees and contended
that she engaged their services through spouses
Mercado who supply workers needed by owners of
various farms, but only to do a particular phase of
agricultural work necessary in rice and sugar
production and after which they would be free to
render their services to other farm owners who need
their services.
Issue: Whether petitioners are considered regular EEs
and, therefore, entitled to benefits.
HELD: NO
Project EEs do not become Regular EEs although service
exceeds 1 year.
Although the workers rendered service for almost 30
years, they cannot be considered as regular or permanent
employee, because of the fact that:
1. They were FREE to work for other farm owners;
2. They FREE to CONTRACT their service with other
farm owner;
3. They were MERE project employees, who could
be hired by other farm owners.
Petitioners being project EEs, or, to use the correct term,
seasonal EEs, their employment legally ends upon the
completion of each project the season

BRENT SCHOOL, INC vs. ZAMORA (1990)

FACTS:
Respondent Doroteo R. Alegre was engaged as athletic
director by Brent School, Inc. for a fixed and specific
term of five (5) years,
Subsequent subsidiary agreements reiterated the
same terms and conditions, including the expiry date,
as those contained in the original contract.
3 months before the expiration of the stipulated
period, Alegre was terminated on the ground of

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villadolid
digests

completion of contract and expiration of definite

period of employment
Alegre protested that since his services were
necessary and desirable in the usual business of his
ER, and his employment had lasted for 5 years, he
had acquired the status of a regular employee and
could not be removed except for valid cause.
MANILA ELECTRIC CO. vs. NLRC (1989)

Issue: Whether Alegre was lawfully teminiated?

HELD: YES
Article 280 does not proscribe or prohibit
employment contract with a fixed period, PROVIDED the
same is entered into by the parties without any force,
duress or improper pressure upon the EE and in the
absence of vitiating consent
Reason: Contracts of employment govern the
relationship of the parties. Any stipulation in the
contract, not contrary to law, morals, good customs,
public order and public policy, is valid, binding and must
be respected.
***This practice is however legally questionable if done
in a more or less continuous basis with the objective of
avoiding regularization as it in effect circumvents the law
on security of tenure of the workers.
In the CAB, the employment contract is valid, binding,
and must be respected.

PUREFOODS CORP. vs. NLRC (1997)

FACTS:
Private respondents (numbering 906) were hired by
petitioner Pure Foods Corporation to work for a fixed
period of FIVE MONTHS at its tuna cannery plant in
General Santos City.
After the expiration of their respective contracts of
employment, their services were terminated. Hence,
they filed a complaint for illegal dismissal
LA: dismissed the complaint on the ground that the
private respondents were mere CONTRACTUAL
WORKERS, and not regular employees; hence, they
could not avail of the law on security of tenure.
NLRC: reversed LA holding that the private
respondents were regular employees. It declared
that the contract of employment for five months was
a scheme to prevent [private respondents'] right to
security of tenure" and should therefore be struck
down and disregarded for being contrary to law,
public policy, and morals.
Issue: Whether private respondents are considered
regular EEs?
HELD: YES. NLRC affirmed.
SC struck down as invalid a 5-month contract involving
workers who were performing activities usually
necessary or desirable to the business of the company.
The practice of hiring workers on uniformly fixed contract
basis of 5 months, only to replace them upon the
expiration of their contracts with other workers on the
same employment duration, was to circumvent the
constitutional guarantee on security of tenure and,
therefore, contrary to public policy. To uphold the
contractual arrangement between the employer and the
workers would in effect permit the former to avoid hiring
permanent or regular employees by simply hiring them
on a temporary or casual basis, thereby violating the
employees security of tenure in their jobs.

FACTS:
Complainant Ramon L. Meris was hired by respondent
MERALCO as a PROBATIONARY EMPLOYEE for 5
months as messenger. His work among others, was to
file pleadings in court, serve summons for execution,
verify or follow-up cases in court and other related
matters under the legal department.
His supervisors were dissatisfied with his performance
for being neglectful of his duties and he was also
uncooperative toward co-employees and disrespectful
to his superiors.
Ramon received a Memorandum, advising him of the
termination of his probationary employment.
LA: ordered the reinstatement of Ramon.
NLRC: sustained the LA and held that the dismissal
was illegal
Issue: Whether the dismissal of the ER before the 6
months probationary was just and valid?
HELD: YES. NLRC reversed.
The ER has the right to terminate
employment on justifiable causes

probationary

A probationary employee may be dismissed for cause at

any time before the expiration of six (6) months after
hiring. If after working for less than six (6) months, he is
found to be unfit for the job, he can be dismissed. But if
he continues to be employed longer than six (6) months,
he ceases to be a probationary employee and becomes a
regular or permanent employee.

A.M. ORETA & CO., INC. vs. NLRC (1989)

FACTS:
Private respondent Sixto Grulla was engaged by
Engineering Construction and Industrial Development
Company (ENDECO) through A.M. Oreta and Co., Inc.,
as a carpenter in its projects in Jeddah, Saudi Arabia.
The contract of employment, which was entered into
was for a period of 12 months. Grulla left the
Philippines for Jeddah, Saudi Arabia
Grulla met an accident which fractured his lumbar
vertebra while working at the jobsite. He was rushed
to the New Jeddah Clinic and was confined there for
12 days. Grulla was discharged from the hospital and
was told that he could resume his normal duties after
undergoing physical therapy for two weeks.
Grulla reported back to his Project Manager and
presented a med certificate declaring him already fit
for work. Since then, he started working again until he
received a notice of termination of his employment.
Hence, he filed a complaint for illegal dismissal
Issue: Whether the EE was lawfully terminated
HELD: NO
A probationary EE cannot be removed except for cause
during the period of probation. Although a probationary or
temporary EE has limited tenure, he still enjoys security
of tenure. During his tenure, or before the contract
expires, he cannot be removed except as provided for by
the law.

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TERMINATION OF EMPLOYMENT:
Consequences of Termination
MANGGAGAWA NG KOMUNIKASYON SA PILIPINAS
and ANTONIO L. CRUZ vs. NLRC and PLDT (1992)
FACTS:
Petitioner Cruz had been an ER of PLDT for 16 years as
an installer/repairman when he was terminated.
It appears that sometime in August 1985, Cruz and
co-repairman Moldera was instructed to repair
installations located at 325 Acacia Lane, Mandaluyong.
According to PLDT, the telephone numbers installed on
the said address were actually reinstalled and
functioning at 323 Acacia Lane, Mandaluyong. This
out-move of the telephone was considered illegal by
the company there being no service order. Hence, Cruz
was dismissed on the ground of fraud and serious
misconduct.
Both LA and NLRC arrived at the conclusion that said
EE should be dismissed although with financial
assistance (10K). This was questioned by the PLDT
Issue: Whether Cruz is entitled to financial assistance
HELD: YES
The dismissal of Cruz was valid. PLDT complied with
procedural due process prior to termination of Cruz for
violation of company rules involving what can be
considered fraud and dishonesty.
When there is doubt that dishonesty was committed,
financial assistance may still be awarded to an EE who has
rendered long years of service. Despite the nature of
offense, financial assistance on ground of compassionate
justice may still be given.

PINES CITY EDUCATIONAL CENTER and EUGENIO

BALTAO vs. NLRC (1993)
Mercury Drug Rule Abandoned. Reiterated the doctrine laid
down in Ferrer
FACTS:
Private respondents were all employed as teachers on
probationary basis by petitioner Pines City
Educational Center.
Said teachers signed contracts of employment with
petitioner for a fixed duration. Due to the expiration of
the contracts and their poor performance as teachers,
they were notified of not to renew their contracts
anymore.
The teachers filed a complaint for illegal dismissal
LA: ruled in favor of the teachers and ordered their
reinstatement and to pay their full backwages and
other benefits and privileges without qualification and
deduction from the time they were dismissed up to
their actual reinstatement.
NLRC: affirmed the LA
Issue: Whether the LA and NLRC are correct in ordering
the reinstatement and payment of full backwages
HELD: NO. NLRC reversed.
Interim earning should not be deducted from the awarded
backwages. The law provides no qualification nor does it

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state that earned income by the EE during the period of

his unjust dismissal to actual reinstatement should be
deducted from such backwages. When the law does not
provide, the court shall not improvise.

the offense committed by the employee is punishable

with the penalty higher than suspension of fifteen (15)
days and the erring employee requests for an
investigation of the incident. Wenphil alleges that
Mallare did not ask for investigation, hence waived his
right to the investigation.

The order for their reinstatement and payment of full

backwages and other benefits and privileges from the
time they were dismissed up to their actual
reinstatement is proper, conformably with Article 279 of
the Labor Code, as amended by RA 6715 which took
effect on March 21, 1989.

Issue: Whether Mallare was denied due process, hence

entitled to indemnity

HOWEVER, in ascertaining the total amount of

backwages payable to them, we go back to the rule prior
to the Mercury Drug rule that the total amount derived
from employment elsewhere by the employee from the
date of dismissal up to the date of reinstatement, if any,
should be deducted therefrom. We restate the
underlying reason that employees should not be
permitted to enrich themselves at the expense of their
employer. To this extend, our ruling in Alex Ferrer, et al.
vs. NLRC is hereby modified.

In the CAB, Mallare received an official notice of his

termination 4 days later after he was dismissed. His
refusal to explain his side cannot be considered as a
waiver of his right to an investigation. Although in the
Personnel Manual, it states that an erring employee must
request for an investigation it does not thereby mean that
the ER is thereby relieved of the duty to conduct an
investigation before dismissing its EE.

BUSTAMANTE vs. NLRC (1996)

Pines City Ruling Abandoned
FACTS:
Evergreen Farms claimed that petitioners are not entitled
to recover backwages because they were not actually
dismissed but their probationary employment was not
converted to permanent employment; and assuming that
petitioners are entitled to backwages, computation
thereof should not start from cessation of work up to
actual reinstatement, and that salary earned elsewhere
(during the period of illegal dismissal) should be
deducted from the award of such backwages.
HELD:
The full backwages amendment by RA 6715 has NO
RETROACTIVE EFFECT; it applies only prospectively.
Hence, the rule is: where the illegal dismissal happened
before the effectivity of RA 6715 (3/21/89), the award of
backwages is limited to 3 years without deduction or
qualification. BUT if the illegal dismissal happened on or
after the effectivity of RA 6715, the award of backwages
should be computed from the time of illegal dismissal up
to actual reinstatement without any deductions.

WENPHIL CORP. vs. NLRC (1989)

DISMISSAL IS LEGAL: Dismissal is justified, but because
there was no due process, EE is entitled to
indemnification
FACTS:
Private respondent Roberto Mallare was hired by
Wephil Corp. as a crew member at its Cubao Branch.
Mallare had an altercation with a co-employee, Job
Barrameda, as a result of which he and Barrameda
were suspended and later on served with notice of
dismissal.
Mallare filed a complaint for llegal dismissal.
LA: dismissed the complaint for lack of merit.
NLRC: reversed LA and ordered the reinstatement of
Mallare
Wenphil prayed for restraining order alleging that
NLRC committed a grave abuse of discretion. The
court issued a restraining order.
Mallare contended that he was denied due process
because there was no investigation prior his
dismissal.
According to Wenphil, under the Personnel Manual of
the corp., an investigation shall only be conducted if

HELD: YES
The contention of Wenphil is untenable.

The failure of petitioner to give private respondent the

benefit of a hearing before he was dismissed constitutes
an infringement of his constitutional right to due process
of law and equal protection of the laws.
A dismissal for a valid reason is legal and valid, but
the ER who does not observe due process must pay
some INDEMNITY for its breach of legal procedure; the
measure of damages will depend on the facts of the case,
and on the gravity of the omission by the employer

HELLENIC PHIL. SHIPPING INC. vs. EPIFANIO C.

SIETE and NLRC (1991)
Wenphil Doctrine does not apply.
ILLEGAL DISMISSAL: Dismissal is NOT justified; Due
Process not observed.
FACTS:
Capt. Epifanio Siete was employed as Master of M/V
Houda G by Sultan Shipping Co., Ltd.,
Sometime later, Capt. Wilfredo Lim boarded the vessel
and advised Siete that he had instructions from the
owners to take over its command for unexplained
reason
Siete filed a complaint for illegal dismissal.
Petitioner alleged in its answer that Siete had been
dismissed because of his failure to comply with the
instruction of Sultan Shipping to erase the timber load
line on the vessel and for his negligence in the
discharge of the cargo at Tripoli that endangered the
vessel and stevedores.
POEA: dismissed the complaint, holding that there
was valid cause for Sietes removal.
Siete appealed to the NLRC contending that he was
dismissed without even being informed of the charges
against him or given an opportunity to refute them.
NLRC: reversed the POEA holding that the dismissal
violated due process and that the documents
submitted by the petitioner were hearsay, self-serving,
and not verified.
Hellenic argues that whatever defects might have
tainted the EEs dismissal were subsequently cured
when the charges against him were specified and
sufficiently discussed in the position papers submitted
by the parties to the POEA.
Issue: Whether due process was observed by the ER
HELD: NO
The law requires that the investigation be conducted
before the dismissal, not after. That omission cannot be

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corrected by the investigation later conducted by the

POEA. As the Solicitor General correctly maintained, the
due process requirement in the dismissal process is
different from the due process requirement in the POEA
proceeding. Both requirements must be separately
observed.
While it is true that in Wenphil Corp. vs. NLRC and
Rubberworld (Phils.) vs. NLRC, the lack of due process
before the dismissal of the employee was deemed
corrected by the subsequent administrative proceedings
where the dismissed employee was given a chance to be
heard, those cases involved dismissals that were later
proved to be for a valid cause. The doctrine in those
cases is not applicable to the case at bar because our
findings here is that the dismissal was not justified.

VIERNES vs. NLRC (2003)

EE entitled to full backwages because he was illegally
dismissed; He is also entitled to indemnification because
due process was not observed
FACTS:
Complainants worked as meter readers with
Benguet Electric Cooperative when they were served
a notice of termination because of retrenchment.
According to the company, they need to retrench its
personnel because they are already over staffed.
The
complainants
filed
for
illegal
dismissal
contending that they were not apprentices but
regular employees whose services were illegally and
unjustly terminated in a manner that was whimsical
and capricious.
On the other hand, the respondent invokes Article
283 of the LC in defense of the questioned dismissal.
LA: dismissed the complaints for lack of merit but
ordered the ER to pay the EEs the amount
representing underpayment of their wages, and to
pay indemnity and attorneys fees.
NLRC: modified LA and ordered the reinstatement of
the complainants with payment of backwages limited
to one year and deleting the award of indemnity and
attorneys fees.
Issue: Whether NLRC committed grave
discretion in deleting the award of indemnity

abuse

of

PHIL. TOBACCO FLUE-CURING REDRYING CORP vs.

NLRC (1998)
FACTS:
Petitioner company transferred its tobacco processing
plant in Balintawak, Quezon City to Candon, Ilocos
Sur. The company therein did not actually close its
entire business but merely relocated its tobacco
processing and redrying operations to another place.
Two groups of seasonal workers claimed separation
benefits after the closure of the plant in Balintawak.
Petitioner refuses to grant separation pay to the
workers belonging to the first batch (referred to as the
Lubat group), because they had not been given work
during the preceding year and, hence, were no longer
in its employ at the time it closed its Balintanwak
plant. Likewise, it claims exemption from awarding
separation pay to the second batch (the Luris group),
because the closure of its plant was due to serious
business losses, as defined in Article 283 of the Labor
Code.
LA: ordered petitioner to pay the complainants their
respective separation pay, equivalent to one-half
month pay for every year of service.
NLRC: affirmed LA
When the separation benefits were given to the
complainants, the latter alleged that there is wrong
computation when management did not consider 3/4
of their length of service as claimed
According to petitioner co., the separation pay of a
seasonal worker, who works only for a fraction of a
year, should not be equated with that of a regular
worker. Petitioner submits that the formula for the
computation of a seasonal workers separation pay is
Total No. Of Days actually worked / Total No. Of
Working Days in One Yeas x Daily Rate x 15 days
The complainants claimed that their separation pay
should be based on the actual number of years they
have been in petitioners company.
Issue: Whether the computation adopted by petitioner
company in granting complainants separation pay is
erroneous

HELD: YES
An ER becomes liable to pay indemnity to a dismissed EE
if the ER fails to comply with the requirements of due
process. The indemnity is in the form of nominal
damages intended not to penalize the employer but to
vindicate or recognize the employees right to procedural
due process which was violated by the employer.

HELD: YES
The amount of separation pay is based on two factors: the
amount of monthly salary and the number of years of
service. Although the Labor Code provides different
definitions as to what constitutes one year of service,
Book Six does not specifically define one year of service
for purposes of computing separation pay. However,
Articles 283 and 284 both state in connection with
separation pay that a fraction of at least six months shall
be considered one whole year.

We do not agree with the ruling of the NLRC that

indemnity is incompatible with the award of backwages.
These two awards are based on different considerations.
Backwages are granted on grounds of equity to workers
for earnings lost due to their illegal dismissal from work.
On the other hand, the award of indemnity is meant to
vindicate or recognize the right of an employee to due
process which has been violated by the employer.

Applying this to the case at bar, we hold that the amount

of separation pay which respondent members of the Lubat
and Luris groups should receive is one-half () their
respective average
monthly pay during the last season they worked multiplied
by the number of years they actually rendered service,
provided that they worked for at least six months during a
given year.

In the CAB, the ER failed to comply with the provisions of

Article 283 of the Labor Code which requires an
employer to serve a notice of dismissal upon the
employees sought to be terminated and to the
Department of Labor, at least one month before the
intended date of termination. Hence, it is liable to pay
indemnity to petitioners. Thus, we find that the NLRC
committed grave abuse of discretion in deleting the
award of indemnity.

The formula that petitioner company proposes, wherein a

year of work is equivalent to actual rendered for 303 days,
is both unfair and inapplicable, considering that Articles
283 and 284 provide that in connection with separation
pay, a fraction of at least six months shall be considered
one whole year. Under these provisions, an employee who
worked for only six months in a given year which is
certainly less than 303 days is considered to have
worked for one whole year.

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ASIONICS PHIL. INC. and FRANK YIH vs. NLRC

(1998)
FACTS:
Asionics Philippines, Inc. ("API"') is a domestic
corporation engaged in the business of assembling
semi-conductor chips and other electronic products
mainly for export.
Yolanda Boaquina and Juana Gayola started working
for API as material control clerk and as production
operator when they were dismissed by API
API entered into a CBA with the Federation Free
Workers ("FFW"). However, a deadlock ensued and
the union decided to file a notice of strike. API was
forced to suspend operations and Boaquina and
Gayola were among the employee asked to take a
leave from work.
Upon the resolution of the deadlock, Boaquina and
Gayola was directed to report back to work.
Inasmuch as its business activity remained critical,
API was constrained to implement a company-wide
retrenchment . Boaquina was one of those affected
by the retrenchment. And was informed that her
services were to be dispensed with
Dissatisfied with their union (FFW), Boaquina and
Gayola, together with some of other co-employees,
joined the Lakas ng Manggagawa sa Pilipinas Labor
Union ("Lakas Union"') where they eventually
became members of its Board of Directors.
Lakas Union filed a notice of strike against API on the
ground of ULP. API filed a complaint for illegal strike
LA: declared the strike staged by Lakas Union to be
illegal and ruled that all the officers of the Unions at
the time of the strike are to have lost their
employment status.
Boaquina and Gayola filed a complaint for illegal
dismissal against API and its manager Frank Yih
LA: held that API is guilty of illegal dismissal and
ordered it to pay private respondent Yolanda
Boaquina separation pay of one-half (1/2) month pay
for every year of service, plus overtime pay, and to
reinstate private respondent Juana Gayola with full
backwages from the time her salaries were withheld
from her until her actual reinstatement.
NLRC: reversed LA in holding that API is guilty of
illegal dismissal but ruled that the strike was illegal.
Petitioner API argued that that respondents should
not be entitled to separation pay because of their
involvement in the strike which was declared illegal.
Issue1: Whether private respondents are entitled to
separation pay despite having participated in an illegal
strike?
HELD: YES
The termination of employment of private respondents
was due to the retrenchment policy adopted by API and
not because of the former's union activities.
Issue2: Whether a stockholder/director/officer of a
corporation can be held liable for the obligation of the
corporation absent of finding of bad faith
HELD: NO
A corporation is a juridical entity with legal personality
separate and distinct from those acting for and in its
behalf and, in general, from the people comprising it.
The rule is that obligations incurred by the corporation,
acting through its directors, officers and employees, are
its sole liabilities. Nevertheless, being a mere fiction of
law, peculiar situations or valid grounds can exist to
warrant, albeit done sparingly, the disregard of its
independent being and the lifting of the corporate veil.
As a rule, this situation might arise when a corporation is

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used to evade a just and due obligation or to justify a

wrong, to shield or perpetrate fraud, to carry out similar
unjustifiable aims or intentions, or as a subterfuge to
commit injustice and so circumvent the law.
Nothing on record is shown to indicate that Frank Yih has
acted in bad faith or with malice in carrying out the
retrenchment program of the company. His having been
held by the NLRC to be solidarily and personally liable with
API is thus legally unjustified.
WHEREFORE, the questioned decision of the NLRC is
MODIFIED insofar as it holds herein petitioner Frank Yih
personally liable with API.

CUSTODIO vs. MINISTRY OF LABOR AND

EMPLOYMENT (1990)
FACTS:
Petitioner Victor Custodio worked for private resp.
First Farmers Milling and Marketing Assoc. as Asst.
General Manager for almost 17 years.
The ER, through its board of directors, decided to
purchase a boiler, the cost of which would amount to
several million pesos. An evaluation committee was
constituted with petitioner as chairman. A dispute
arose between Custodio and the general manager
regarding
the
committee's
recommendations,
particularly, the brand of boiler recommended, leading
to charges and countercharges of kickbacks or
commissions given to officers and directors by the
suppliers. Because of this, Cutodio submitted a letter
of resignation
In the board's meeting, Custodios letter of resignation
was discussed. The minutes stated:that the letter of
resignation submitted by Mr. Victor Custodio is
irrevocable and he is considered resigned as soon as
the board takes cognizance of his irrevocable letter of
resignation.
Custodio expressed his intention to withdraw his letter
of resignation. The president reported that no letter of
withdrawal has been received. In as much as the
Board believed that it had no choice on the matter it
did not take any action on the resignation except to
take cognizance of it.
When petitioner went back to work, he was informed
that he was no longer connected with the company
and transaction made by him shall be void.
Custodio filed a complaint for illegal dismissal
The Co. contends that since his resignation letter used
the word. "irrevocable," his resignation need not be
accepted by private respondent and could no longer be
withdrawn by petitioner.
Issue: Whether the resignation of Custodio may be
withdrawn?
HELD: YES
The undisputed facts and circumstances support the
conclusion that petitioner's resignation never became
effective. Despite its being termed "irrevocable," neither
the petitioner nor the private respondent treated it as
such.
Resignation is withdrawable even if the EE has
called it irrevocable. But after it is accepted or approve
by the ER, its withdrawal needs the ERs consent.
WHEREFORE, the petition is GRANTED. Private respondent
is ORDERED to reinstate petitioner. But, considering the
time that has elapsed, should petitioner's reinstatement to

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his former or a substantially equivalent position be no

longer feasible, he shall be entitled to separation pay
equivalent to one (1) month's salary for every year of
service, in addition to the backwages.

FACTS:
2 union officers, Catinoy and Saturnino, had a fight
inside the union office, an act that violates company
rules and union by-laws. The union executive board
decided to place them on indefinite suspension and
requested the company, Hyatt Taxi Services Inc., to
implement it. The company place the 2 on preventive
suspension for 30 days
Catinoy, aggrieved by the preventive suspension
since he was not the aggressor, filed a complaint for
illegal suspension. After the lapse of 30 days, he
reported to work but was not allowed to resume his
duties. He amended his complaint to include
constructive dismissal
LA: found the Hyatt taxi to be guilty of illegal
preventive suspension and illegal constructive
dismissal
Hyatt and the union appealed to the NLRC
NLRC: affirmed LA.. HOWEVER, upon MFR, the NLRC
deleted the award of backwages because there was
no concrete showing that the complainant was
constructively dismissed
CA: reinstated the LAs decision
private

respondent

HYATT TAXI SERVICES vs. CATINOY (2001)

Issue:
Whether
the
constructively dismissed

was

HELD: YES. CA affirmed.

Preventive suspension beyond 30 days amounts to
constructive dismissal. It shows that respondent was not
taken back by petitioner Hyatt after the 30-day
suspension period. Clearly, constructive dismissal had
already set in when the suspension went beyond the
maximum period allowed by law.
BRION vs. SOUTH PHIL UNION MISSION OF THE
7TH DAY ADVENTIST CHURCH (1999)
FACTS:
Petitioner Delfin A. Brion became a member of
respondent South Philippine Union Mission of the
Seventh Day Adventist Church (hereafter SDA). He
became an ordained minister and president of the
Northeastern Mindanao Mission of the Seventh Day
Adventist Church in Butuan City.
Respondent SDA claims that due to corruption
charges, Brion was transferred to the Davao Mission.
Thereafter, allegedly due to an act of indiscretion
with a masseuse, petitioner was demoted to the
position of Sabbath School Director at the Northern
Mindanao Mission of the SDA located at Cagayan de
Oro City. Here, petitioner worked until he retired in
1983. As was the practice of the SDA, petitioner was
provided a monthly amount as a retirement benefit.
Sometime thereafter, Brion got into an argument
with Samuel Sanes, another pastor of the SDA. This
disagreement degenerated into a rift between Brion
and the SDA, culminating in the establishment by
Brion of a rival religious group which he called the
Home Church. He succeeded in enticing a number
of SDA members to become part of his congregation
Because of his actions, Brion was excommunicated
by the SDA and his name was dropped from the
Church Record Book.
As a consequence of his
disfellowship, petitioners monthly retirement
benefit was discontinued by the SDA.

Brion filed an action for mandamus with the RTC of

Cagayan de Oro City asking that the SDA restore his
monthly retirement benefit.
RTC: finds in favor of Brion and ordered SDA to pay
the retirement benefits
CA: reversed RTC and ordered the dismissal of Brions
complaint.

Issue: Whether Brion is entitled to retirement benefits

HELD: YES. We find for petitioner.
Retirement has been defined as a withdrawal from office,
public station, business, occupation, or public duty. It is
the result of a bilateral act of the parties, a voluntary
agreement between the employer and the employee
whereby the latter, after reaching a certain age, agrees
and/or consents to sever his employment with the former.
In this connection, the modern socio-economic climate has
fostered the practice of setting up pension and retirement
plans for private employees, initially through their
voluntary adoption by employers, and lately, established
by legislation.
Pension schemes, while initially
humanitarian in nature, now concomitantly serve to secure
loyalty and efficiency on the part of employees, and to
increase continuity of service and decrease the labor
turnover by giving to the employees some assurance of
security as they approach and reach the age at which
earning ability and earnings are materially impaired or at
an end.
Art. 287. Retirement. Any employee may be retired
upon reaching the retirement age established in the
collective bargaining agreement or other applicable
employment contract.
In case of retirement, the employee shall be entitled to
receive such retirement benefits as he may have earned
under existing laws and any collective bargaining
agreement and other agreements
From the above, it can be gleaned that employer and
employee are free to stipulate on retirement benefits, as
long as these do not fall below the floor limits provided by
law.
In the present case, petitioner was adjudged by the SDA
in 1983, to be qualified for retirement, such that when it
began paying petitioner retirement benefits in said year, it
must have been convinced that petitioner had devoted his
life to the work of the Seventh-day Adventist Church.
Having arrived at such a conclusion, it may not now
reverse this finding to the detriment of petitioner.

UE vs. MINISTRY OF LABOR AND UE FACULTY

ASSOCIATION (1987)
FACTS:
Labor and Employment directing the University of the
East to pay the faculty members concerned retirement
benefits in accordance with their collective bargaining
agreement, in addition to the payment of separation
pay according to the Termination Pay Law.
The then president of the University of the East (UE)
announced the phase-out of the College of Secretarial
Education
and
the
High
School
Department
respectively on the grounds of lack of economic
viability and financial losses.
The respondent UE Faculty Association opposed the
phaseout, contending that such action contravened the
law because it constitutes union busting. The private
respondent filed a notice of strike with the Bureau of
Labor Relations (BLR).
BLR conducted several conciliation proceedings but
when no amicable settlement was reached, the
respondent Minister issued an order assuming

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jurisdiction over the case and directing the BLR to

receive evidence in connection with the dispute.
Respondent Minister of Labor ruled that the phaseout
of the two departments was arbitrary and ordered UE
to pay all affected faculty members of the College
Secretarial
Education
and
the
High
School
Department a separation pay. In addition to the
termination pay, the University is likewise directed to
pay retirement benefits to all affected faculty
members who, in accordance with the collective
bargaining agreement, are retireable prior to or at
the time of the phase-out."
Petitioner arguesns that the award of separation pay
pursuant to the Termination Pay Law necessarily
excludes retirement benefits.

Issue: Whether the Minister of Labor and Employment

committed grave abuse of discretion in awarding both
retirement benefits and separation pay to the faculty
members affected by the phase-out.
HELD: NO. We rule for the respondents.
Separation pay arising from a forced termination of
employment and benefits given as a contractual right
due to many years of faithful service are not necessarily
exclude each other.

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indefinite promises, and Romeo not yet having decided to

assert his right, his cause of action could not be said to
have then already accrued. As Romeos complaint was
filed not later than 3 months only after such rejection,
there is no question that his action has prescribed,
whatever prescriptive period is applied.

FULL BACKWAGES
- wages from the time of illegal termination up to the
actual reinstatement
1. Mercury Drug vs. NLRC
- 3 years pay without qualification and
deduction
2. Ferrer vs. NLRC
- wages from time of illegal dismissal to
actual
reinstatement MINUS earnings
elsewhere
(earnings from the new job
while case is
pending)
3. Osmalik Bustamante vs. NLRC
- wages from the time of illegal dismissal up
to
actual reinstatement without any deductions.

Clearly, the only situation contemplated in the CBA

wherein an employee shall be precluded from receiving
retirement benefits is when said employee is not
separated from service but transferred instead from one
college or department to another. There is no provision
to the effect that teachers who are forcibly dismissed are
not entitled to retirement benefits if the MOLE awards
them separation pay. Furthermore, since the above
provision has become in effect part of the petitioner's
policy, the same should be enforced separately from the
provisions of the Termination Pay Law.

BALIWAG TRANSIT INC. vs. BLAS OPLE (1989)

FACTS:
Romeo Hughes, a bus driver, met an accident when
the bus he was driving was hit by a train. His ER
sued the railroad company. Romeo was absolved of
contributory negligence but suspended by his ER
Soon after the judgment was rendered against the
railroad company, he renewed his drivers license and
asked for reinstatement. But he was asked to wait
until the criminal case was decided.
When the criminal case was dismissed, he repeated
his request for reinstatement but it was ignored
Romeos lawyer made a formal demand in writing but
it was denied by the ER. Hence, Romeo filed a formal
complaint
Regional Director: dismissed the complaint on the
ground that it was filed beyond the prescriptive
period prescribe in Art. 291 counted from the date of
collision.
Issue: Whether the complaint was filed beyond the
prescriptive period
HELD: NO
Since a 'cause of action' requires, as essential elements,
not only a legal right of the plaintiff and a correlative
obligation of the defendant but also 'an act or omission
of the defendant in violation of said legal right,' the
cause of action does not accrue until the party obligated
refuses, expressly or impliedly, to comply with its duty.
Romeos cause of action accrued on May 10, 1980, when
the ER denied his demand for reinstatement. The earlier
requests made by Romeo having been warded off with

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