G.R. No.

96283 February 25, 1992

CHUNG FU INDUSTRIES (PHIIPPINES! INC., "#$ D"re%#or$ a&' ())"%er$ &a*e+y,
HU-NG .U(/CH-NG, HU-NG -N/CHUNG, 0-1ES 0.R. CHEN, TRIST-N -.
C-TINDIG, 2ICENTE 3. -1-D(R, R(C. -.C. HU-NG, 0E1 S.C. HU-NG, 1-RI-
TERES- S(I2EN a&' 2IRGII( 1. DE R(S-RI(, petitioners, vs.C(URT (F
-PPE-S, H(N. FR-NCISC( 4. 2EE5 (Pre$"'"&6 0u'6e, Re6"o&a+ Tra"+ Cour# o)
1a7a#" 83ra&%9 5:;! a&' R(3EC(R PHIIPPINES, INC., respondents.

R(1ER(, J.:
This is a special civil action for certiorari seeking to annul the Resolutions of the Court of
Appeals< dated October 22, 1990 and ece!ber ", 1990 upholding the Orders of #ul$ "1,
1990 and August 2", 1990 of the Regional Trial Court of %akati, &ranch '(, in Civil Case
)o. 90*1""'. Respondent Court of Appeals affir!ed the ruling of the trial court that herein
petitioners, after sub!itting the!selves for arbitration and agreeing to the ter!s and
conditions thereof, providing that the arbitration a+ard shall be final and unappealable, are
precluded fro! seeking ,udicial revie+ of sub,ect arbitration a+ard.
-t appears that on %a$ 1(, 19.9, petitioner Chung /u -ndustries 01hilippines2 0Chung /u
for brevit$2 and private respondent Roblecor 1hilippines, -nc. 0Roblecor for short2 forged a
construction agree!ent
1
+hereb$ respondent contractor co!!itted to construct and finish
on ece!ber "1, 19.9, petitioner corporation3s industrial4factor$ co!ple5 in Tana+an,
Tan6a, Cavite for and in consideration of 172,000,000.00. -n the event of disputes arising
fro! the perfor!ance of sub,ect contract, it +as stipulated therein that the issue0s2 shall be
sub!itted for resolution before a single arbitrator chosen b$ both parties.
Apart fro! the aforesaid construction agree!ent, Chung /u and Roblecor entered into t+o
022 other ancillar$ contracts, to +it8 one dated #une 2", 19.9, for the construction of a
dor!itor$ and support facilities +ith a contract price of 1",.(',2.'.00, to be co!pleted on
or before October "1, 19.99
2
and the other dated August 12, 19.9, for the installation of
electrical, +ater and h$drant s$ste!s at the plant site, co!!anding a price of 112.1 !illion
and re:uiring co!pletion thereof one !onth after civil +orks have been finished.
3
;o+ever, respondent Roblecor failed to co!plete the +ork despite the e5tension of ti!e
allo+ed it b$ Chung /u. <ubse:uentl$, the latter had to take over the construction +hen it
had beco!e evident that Roblecor +as not in a position to fulfill its obligation.
Clai!ing an unsatisfied account of 110,'00,000.00 and unpaid progress billings of
12,"(0,1(9.2", Roblecor on %a$ 1., 1990, filed a petition for Co!pulsor$ Arbitration +ith
pra$er for Te!porar$ Restraining Order before respondent Regional Trial Court, pursuant
to the arbitration clause in the construction agree!ent. Chung /u !oved to dis!iss the
petition and further pra$ed for the :uashing of the restraining order.
<ubse:uent negotiations bet+een the parties eventuall$ led to the for!ulation of an
arbitration agree!ent +hich, a!ong others, provides8
2. The parties !utuall$ agree that the arbitration shall proceed in
accordance +ith the follo+ing ter!s and conditions8 =
555 555 555
d. The parties !utuall$ agree that the$ +ill abide b$ the decision of the
arbitrator including an$ a!ount that !a$ be a+arded to either part$ as
co!pensation, conse:uential da!age and4or interest thereon9
e. The parties !utuall$ agree that the decision of the arbitrator shall be
final and unappealable. Therefore, there shall be no further judicial
recourse if either party disagrees with the whole or any part of the
arbitrator's award.
f. As an e5ception to sub*paragraph 0e2 above, the parties !utuall$
agree that either part$ is entitled to seek ,udicial assistance for
purposes of enforcing the arbitrator3s a+ard9
555 555 555
=
0>!phasis supplied2
Respondent Regional Trial Court approved the arbitration agree!ent thru its Order of %a$
"0, 1990. Thereafter, >ngr. ?illardo Asuncion +as appointed as the sole arbitrator.
On #une "0, 1990, Arbitrator Asuncion ordered petitioners to i!!ediatel$ pa$ respondent
contractor, the su! of 11@,10.,.01.00. ;e further declared the a+ard as final and
unappealable, pursuant to the Arbitration Agree!ent precluding ,udicial revie+ of the
a+ard.
Conse:uentl$, Roblecor !oved for the confir!ation of said a+ard. On the other hand,
Chung /u !oved to re!and the case for further hearing and asked for a reconsideration of
the ,udg!ent a+ard clai!ing that Arbitrator Asuncion co!!itted t+elve 0122 instances of
grave error b$ disregarding the provisions of the parties3 contract.
Respondent lo+er court denied Chung /u3s %otion to Re!and thus co!pelling it to seek
reconsideration therefro! but to no avail. The trial court granted Roblecor3s %otion for
Confir!ation of A+ard and accordingl$, entered ,udg!ent in confor!it$ there+ith.
%oreover, it granted the !otion for the issuance of a +rit of e5ecution filed b$ respondent.
Chung /u elevated the case via a petition for certiorari to respondent Court of Appeals. On
October 22,1990 the assailed resolution +as issued. The respondent appellate court
concurred +ith the findings and conclusions of respondent trial court resolving that Chung
/u and its officers, as signatories to the Arbitration Agree!ent are bound to observe the
stipulations thereof providing for the finalit$ of the a+ard and precluding an$ appeal
therefro!.
A !otion for reconsideration of said resolution +as filed b$ petitioner, but it +as si!ilarl$
denied b$ respondent Court of Appeals thru its :uestioned resolution of ece!ber ",
1990.
;ence, the instant petition anchored on the follo+ing grounds8
/irst
Respondents Court of Appeals and trial #udge gravel$ abused their discretion
and4or e5ceeded their ,urisdiction, as +ell as denied due process and substantial
,ustice to petitioners, = 0a2 b$ refusing to e5ercise their ,udicial authorit$ and
legal dut$ to revie+ the arbitration a+ard, and 0b2 b$ declaring that petitioners are
estopped fro! :uestioning the arbitration a+ard allegedl$ in vie+ of the
stipulations in the parties3 arbitration agree!ent that Athe decision of the arbitrator
shall be final and unappealableA and that Athere shall be no further ,udicial
recourse if either part$ disagrees +ith the +hole or an$ part of the arbitrator3s
a+ard.A
<econd
Respondent Court of Appeals and trial #udge gravel$ abused their discretion
and4or e5ceeded their ,urisdiction, as +ell as denied due process and substantial
,ustice to petitioner, b$ not vacating and annulling the a+ard dated "0 #une 1990
of the Arbitrator, on the ground that the Arbitrator grossl$ departed fro! the
ter!s of the parties3 contracts and !isapplied the la+, and thereb$ e5ceeded the
authorit$ and po+er delegated to hi!. 0Rollo, p. 1(2
Allo+ us to take a leaf fro! histor$ and briefl$ trace the evolution of arbitration as a !ode
of dispute settle!ent.
&ecause conflict is inherent in hu!an societ$, !uch effort has been e5pended b$ !en and
institutions in devising +a$s of resolving the sa!e. ?ith the progress of civili6ation,
ph$sical co!bat has been ruled out and instead, !ore specific !eans have been evolved,
such as recourse to the good offices of a disinterested third part$, +hether this be a court
or a private individual or individuals.
Begal histor$ discloses that Athe earl$ ,udges called upon to solve private conflicts +ere
pri!aril$ the arbiters, persons not speciall$ trained but in +hose !oralit$, probit$ and good
sense the parties in conflict reposed full trust. Thus, in Republican Ro!e, arbiter and judge
0,ude52 +ere s$non$!ous. The !agistrate or praetor, after noting do+n the conflicting
clai!s of litigants, and clarif$ing the issues, referred the! for decision to a private person
designated b$ the parties, b$ co!!on agree!ent, or selected b$ the! fro! an apposite
listing 0the album judicium2 or else b$ having the arbiter chosen b$ lot. The ,udges proper,
as speciall$ trained state officials endo+ed +ith o+n po+er and ,urisdiction, and taking
cogni6ance of litigations fro! beginning to end, onl$ appeared under the >!pire, b$ the
so*called cognitio extra ordinem.A
5
<uch !eans of referring a dispute to a third part$ has also long been an accepted
alternative to litigation at co!!on la+.
6
<parse though the la+ and ,urisprudence !a$ be on the sub,ect of arbitration in the
1hilippines, it +as nonetheless recogni6ed in the <panish Civil Code9 specificall$, the
provisions on co!pro!ises !ade applicable to arbitrations under Articles 1.20 and 1.21.
:
Although said provisions +ere repealed b$ i!plication +ith the repeal of the <panish Ba+
of Civil 1rocedure, 8 these and additional ones +ere reinstated in the present Civil Code.
9
Arbitration found a fertile field in the resolution of labor*!anage!ent disputes in the
1hilippines. Although earl$ on, Co!!on+ealth Act 10" 019"@2 provided for co!pulsor$
arbitration as the state polic$ to be ad!inistered b$ the Court of -ndustrial Relations, in
ti!e such a !odalit$ gave +a$ to voluntar$ arbitration. ?hile not co!pletel$ supplanting
co!pulsor$ arbitration +hich until toda$ is practiced b$ govern!ent officials, the -ndustrial
1eace Act +hich +as passed in 19'" as Republic Act )o. .(', favored the polic$ of free
collective bargaining, in general, and resort to grievance procedure, in particular, as the
preferred !ode of settling disputes in industr$. -t +as accepted and enunciated !ore
e5plicitl$ in the Babor Code, +hich +as passed on )ove!ber 1, 19(7 as 1residential
ecree )o. 772, +ith the a!end!ents later introduced b$ Republic Act )o. @(1' 019.92.
?hether utili6ed in business transactions or in e!plo$er*e!plo$ee relations, arbitration
+as gaining +ide acceptance. A consensual process, it +as preferred to orders i!posed
b$ govern!ent upon the disputants. %oreover, court litigations tended to be ti!e*
consu!ing, costl$, and infle5ible due to their scrupulous observance of the due process of
la+ doctrine and their strict adherence to rules of evidence.
As earl$ as the 19203s, this Court declared8
-n the 1hilippines fortunatel$, the attitude of the courts to+ard arbitration
agree!ents is slo+l$ cr$stalli6ing into definite and +orkable for!. . . . The rule
no+ is that unless the agree!ent is such as absolutel$ to close the doors of the
courts against the parties, +hich agree!ent +ould be void, the courts +ill look
+ith favor upon such a!icable arrange!ents and +ill onl$ +ith great reluctance
interfere to anticipate or nullif$ the action of the arbitrator.
1>
That there +as a gro+ing need for a la+ regulating arbitration in general +as
ackno+ledged +hen Republic Act )o. .(@ 019'"2, other+ise kno+n as the Arbitration Ba+,
+as passed. A<aid Act +as obviousl$ adopted to supple!ent = not to supplant = the )e+
Civil Code on arbitration. -t e5pressl$ declares that Athe provisions of chapters one and
t+o, Title C-D, &ook -D of the Civil Code shall re!ain in force.A
11
-n recognition of the pressing need for an arbitral !achiner$ for the earl$ and e5peditious
settle!ent of disputes in the construction industr$, a Construction -ndustr$ Arbitration
Co!!ission 0C-AC2 +as created b$ >5ecutive Order )o. 100., enacted on /ebruar$ 7,
19.'.
-n practice no+ada$s, absent an agree!ent of the parties to resolve their disputes via a
particular !ode, it is the regular courts that re!ain the fora to resolve such !atters.
;o+ever, the parties !a$ opt for recourse to third parties, e5ercising their basic freedo! to
Aestablish such stipulation, clauses, ter!s and conditions as the$ !a$ dee! convenient,
provided the$ are not contrar$ to la+, !orals, good custo!s, public order or public polic$.A
12
-n such a case, resort to the arbitration process !a$ be spelled out b$ the! in a contract
in anticipation of disputes that !a$ arise bet+een the!. Or this !a$ be stipulated in a
sub!ission agree!ent +hen the$ are actuall$ confronted b$ a dispute. ?hatever be the
case, such recourse to an e5tra,udicial !eans of settle!ent is not intended to co!pletel$
deprive the courts of ,urisdiction. -n fact, the earl$ cases on arbitration carefull$ spelled out
the prevailing doctrine at the ti!e, thus8 A. . . a clause in a contract providing that all
!atters in dispute bet+een the parties shall be referred to arbitrators and to the! alone is
contrar$ to public polic$ and cannot oust the courts of #urisdiction.A
13
&ut certainl$, the stipulation to refer all future disputes to an arbitrator or to sub!it an
ongoing dispute to one is valid. &eing part of a contract bet+een the parties, it is binding
and enforceable in court in case one of the! neglects, fails or refuses to arbitrate. Eoing a
step further, in the event that the$ declare their intention to refer their differences to
arbitration first before taking court action, this constitutes a condition precedent, such that
+here a suit has been instituted pre!aturel$, the court shall suspend the sa!e and the
parties shall be directed forth+ith to proceed to arbitration.
1=
A court action !a$ like+ise be proven +here the arbitrator has not been selected b$ the
parties.
15
Fnder present la+, !a$ the parties +ho agree to sub!it their disputes to arbitration further
provide that the arbitrators3 a+ard shall be final, unappealable and e5ecutor$G
Article 2077 of the Civil Code recogni6es the validit$ of such stipulation, thus8
An$ stipulation that the arbitrators3 a+ard or decision shall be final is
valid, +ithout pre,udice to Articles 20"., 20"9 and 2070.
<i!ilarl$, the Construction -ndustr$ Arbitration Ba+ provides that the arbitral a+ard Ashall
be final and inappealable e5cept on :uestions of la+ +hich shall be appealable to the
<upre!e Court.A
16
Fnder the original Babor Code, voluntar$ arbitration a+ards or decisions +ere final,
unappealable and e5ecutor$. A;o+ever, voluntar$ arbitration a+ards or decisions on
!one$ clai!s, involving an a!ount e5ceeding One ;undred Thousand 1esos
01100,000.002 or fort$*percent 070H2 of the paid*up capital of the respondent e!plo$er,
+hichever is lo+er, !a$be appealed to the )ational Babor Relations Co!!ission on an$
of the follo+ing grounds8 0a2 abuse of discretion9 and 0b2 gross inco!petence.A
1:
-t is to be
noted that the appeal in the instances cited +ere to be !ade to the )ational Babor
Relations Co!!ission and not to the courts.
?ith the subse:uent deletion of the above*cited provision fro! the Babor Code, the
voluntar$ arbitrator is no+ !andated to render an a+ard or decision +ithin t+ent$ 0202
calendar da$s fro! the date of sub!ission of the dispute and such decision shall be final
and e5ecutor$ after ten 0102 calendar da$s fro! receipt of the cop$ of the a+ard or
decision b$ the parties.
18
?here the parties agree that the decision of the arbitrator shall be final and unappealable
as in the instant case, the pivotal in:uir$ is +hether sub,ect arbitration a+ard is indeed
be$ond the a!bit of the court3s po+er of ,udicial revie+.
?e rule in the negative. -t is stated e5plicitl$ under Art. 2077 of the Civil Code that the
finalit$ of the arbitrators3 a+ard is not absolute and +ithout e5ceptions. ?here the
conditions described in Articles 20"., 20"9 and 2070 applicable to both co!pro!ises and
arbitrations are obtaining, the arbitrators3 a+ard !a$ be annulled or rescinded.
19
Additionall$, under <ections 27 and 2' of the Arbitration Ba+, there are grounds for
vacating, !odif$ing or rescinding an arbitrator3s a+ard.
2>
Thus, if and +hen the factual
circu!stances referred to in the above*cited provisions are present, ,udicial revie+ of the
a+ard is properl$ +arranted.
?hat if courts refuse or neglect to in:uire into the factual !ilieu of an arbitrator3s a+ard to
deter!ine +hether it is in accordance +ith la+ or +ithin the scope of his authorit$G ;o+
!a$ the po+er of ,udicial revie+ be invokedG
This is +here the proper re!ed$ is certiorari under Rule @' of the Revised Rules of Court.
-t is to be borne in !ind, ho+ever, that this action +ill lie onl$ +here a grave abuse of
discretion or an act +ithout or in e5cess of ,urisdiction on the part of the voluntar$ arbitrator
is clearl$ sho+n. /or Athe +rit of certiorari is an e5tra*ordinar$ re!ed$ and that certiorari
,urisdiction is not to be e:uated +ith appellate ,urisdiction. -n a special civil action of
certiorari, the Court +ill not engage in a revie+ of the facts found nor even of the la+ as
interpreted or applied b$ the arbitrator unless the supposed errors of fact or of la+ are so
patent and gross and pre,udicial as to a!ount to a grave abuse of discretion or an exces
de pouvoir on the part of the arbitrator.A
21
>ven decisions of ad!inistrative agencies +hich are declared AfinalA b$ la+ are not e5e!pt
fro! ,udicial revie+ +hen so +arranted. Thus, in the case of Oceanic Bic Division (!"#
et al. v. lerida Ruth $. Romero# et al.,
22
this Court had occasion to rule that8
. . . -nspite of statutor$ provisions !aking AfinalA the decisions of certain
ad!inistrative agencies, we have ta%en cogni&ance of petitions
'uestioning these decisions where want of jurisdiction# grave abuse of
discretion# violation of due process# denial of substantial justice or
erroneous interpretation of the law +ere brought to our attention . . .
23
0>!phasis ours2.
-t should be stressed, too, that voluntar$ arbitrators, b$ the nature of their functions, act in
a :uasi*,udicial capacit$.
2=
-t stands to reason, therefore, that their decisions should not be
be$ond the scope of the po+er of ,udicial revie+ of this Court.
-n the case at bar, petitioners assailed the arbitral a+ard on the follo+ing grounds, !ost of
+hich allege error on the part of the arbitrator in granting co!pensation for various ite!s
+hich apparentl$ are disputed b$ said petitioners8
1. The ;onorable Arbitrator co!!itted grave error in failing to appl$ the ter!s
and conditions of the Construction Agree!ent, or!itor$ Contract and >lectrical
Contract, and in using instead the ApracticesA in the construction industr$9
2. The ;onorable Arbitrator co!!itted grave error in granting e5tra
co!pensation to Roblecor for loss of productivit$ due to adverse +eather
conditions9
". The ;onorable Arbitrator co!!itted grave error in granting e5tra
co!pensation to Roblecor for loss due to dela$ed pa$!ent of progress billings9
7. The ;onorable Arbitrator co!!itted grave error in granting e5tra
co!pensation to Roblecor for loss of productivit$ due to the ce!ent crisis9
'. The ;onorable Arbitrator co!!itted grave error in granting e5tra
co!pensation to Roblecor for losses allegedl$ sustained on account of the failed
coup d'(tat)
@. The ;onorable Arbitrator co!!itted grave error in granting to Roblecor the
a!ount representing the alleged unpaid billings of Chung /u9
(. The ;onorable Arbitrator co!!itted grave error in granting to Roblecor the
a!ount representing the alleged e5tended overhead e5penses9
.. The ;onorable Arbitrator co!!itted grave error in granting to Roblecor the
a!ount representing e5penses for change order for site develop!ent outside the
area of responsibilit$ of Roblecor9
9. The ;onorable Arbitrator co!!itted grave error in granting to Roblecor the
cost of +arehouse )o. 29
10. The ;onorable Arbitrator co!!itted grave error in granting to Roblecor e5tra
co!pensation for airduct change in di!ension9
11. The ;onorable Arbitrator co!!itted grave error in granting to Roblecor e5tra
co!pensation for airduct plastering9 and
12. The ;onorable Arbitrator co!!itted grave error in a+arding to Roblecor
attorne$3s fees.
After closel$ stud$ing the list of errors, as +ell as petitioners3 discussion of the sa!e in
their %otion to Re!and Case /or /urther ;earing and Reconsideration and Opposition to
%otion for Confir!ation of A+ard, +e find that petitioners have a!pl$ !ade out a case
+here the voluntar$ arbitrator failed to appl$ the ter!s and provisions of the Construction
Agree!ent +hich for!s part of the la+ applicable as bet+een the parties, thus co!!itting
a grave abuse of discretion. /urther!ore, in granting un,ustified e5tra co!pensation to
respondent for several ite!s, he e5ceeded his po+ers = all of +hich +ould have
constituted ground for vacating the a+ard under <ection 27 0d2 of the Arbitration Ba+.
&ut the respondent trial court3s refusal to look into the !erits of the case, despite prima
facie sho+ing of the e5istence of grounds +arranting ,udicial revie+, effectivel$ deprived
petitioners of their opportunit$ to prove or substantiate their allegations. -n so doing, the
trial court itself co!!itted grave abuse of discretion. Bike+ise, the appellate court, in not
giving due course to the petition, co!!itted grave abuse of discretion. Respondent courts
should not shirk fro! e5ercising their po+er to revie+, +here under the applicable la+s
and ,urisprudence, such po+er !a$ be rightfull$ e5ercised9 !ore so +here the ob,ections
raised against an arbitration a+ard !a$ properl$ constitute grounds for annulling, vacating
or !odif$ing said a+ard under the la+s on arbitration.
?;>R>/OR>, the petition is ERA)T>. The Resolutions of the Court of Appeals dated
October 22, 1990 and ece!ber ", 1990 as +ell as the Orders of respondent Regional
Trial Court dated #ul$ "1, 1990 and August 2", 1990, including the +rit of e5ecution issued
pursuant thereto, are hereb$ <>T A<->. Accordingl$, this case is R>%A)> to the
court of origin for further hearing on this !atter. All incidents arising therefro! are reverted
to the status 'uo ante until such ti!e as the trial court shall have passed upon the !erits of
this case. )o costs.
G.R. No. 55159 De%e*ber 22, 1989
PHIIPPINE -IRINES, INC., petitioner vs.N-TI(N- -3(R RE-TI(NS
C(11ISSI(N a&' -R1-ND( D(IN-, respondents.
C(RTES, J.:
1etitioner i!pugns in this petition for certiorari that part of the public respondent )ational
Babor Relations Co!!ission3s 0)BRC2 decision in )BRC Case )o. R&*-D*9"19*(( +hich
ordered petitioner to restore private respondent olina to its pa$roll, and to pa$ his salaries
fro! 1 April 19(9 Auntil this case is finall$ resolvedA IRollo, p. ""J. 1etitioner contends that
public respondent )BRC gravel$ abused its discretion considering that in the sa!e
decision public respondent affir!ed the decision of the Babor Arbiter in toto granting
respondent3s application for clearance to dis!iss the private respondent.
The pertinent facts are as follo+s8
1rivate respondent olina +as ad!itted to the 1hilippine Airlines 01AB2 Aviation <chool for
training as a pilot beginning 1@ #anuar$ 19(". The training agree!ent bound 1AB to
provide regular and per!anent e!plo$!ent to olina upon co!pletion of the training
course. On 2' #anuar$ 19(7, olina co!pleted the course, and undertook an e:uip!ent
:ualification course up to 7 October 19(7. On 9 October 19(7, the Civil Aeronautics
Ad!inistration issued hi! a license as Co!!ercial 1ilot and 1AB then e5tended hi! a
te!porar$ appoint!ent for si5 0@2 !onths as Bi!ited /irst Officer. ?hen his appoint!ent
+as due to e5pire on "0 April 19(', olina had onl$ logged eight$ four 0.72 hours and fift$
five 0''2 !inutes fl$ing ti!e, short of the !ini!u! '00 fl$ing hours re:uired for
regulari6ation as /irst Officer. To enable hi! to co!plete the re:uire!ent, his e!plo$!ent
+as e5tended for another si5 !onths +hich appoint!ent +as described as Aper!anent.A
On "1 October 19(', +hen his appoint!ent +as again due to e5pire, he +as still short of
the !ini!u! fl$ing ti!e re:uire!ent such that his appoint!ent +as again e5tended up to
"0 April 19(@. uring this third e5tension of his appoint!ent, olina co!pleted the '00
fl$ing hours re:uire!ent, and thus on "1 %arch 19(@ he applied for regulari6ation as /irst
Officer. 1ending his ph$sical e5a!ination b$ the chief /light <urgeon, his appoint!ent +as
again e5tended to "1 October 19(@. On 1( August 19(@, olina took a ps$chological
e5a!ination +herein his AAdaptabilit$ RatingA +as found to be AunacceptableA IAnne5 ABA
to the 1etition. p. .9 Rollo, p. 11@J. On 2" <epte!ber 19(@, co!plainant +as again
sub,ected to an e5a!ination and intervie+ b$ the 1ilot Acceptance Kualifications &oard as
part of the regulari6ation process, +hich e5a!ination revealed the follo+ing8
555 555 555
b. Ar!ando olina * After thorough evaluation of the candidate3s past
records, his perfor!ance and the result of his !edical e5a!ination as
sub!itted b$ the %edical <ub*epart!ent, the &oard finds %r. A.
olina not :ualified for regular e!plo$!ent in the Co!pan$.
555 555 555
I)BRC ecision, pp. "*79 Rollo, pp. 2'*2@J.
Confor!abl$, the &oard reco!!ended the ter!ination of the co!plainant pursuant to
+hich 1AB filed a clearance application IRollo, p. "7J for olina3s ter!ination. -n the
!eanti!e olina +as placed under preventive suspension effective 1 October 19(@.
olina countered +ith a co!plaint for illegal dis!issal on @ October 19(@ IRollo, "'J. On
2@ #anuar$ 19(( the Officer*in*Charge of the epart!ent of Babor Regional Office )o. -D
lifted the preventive suspension, and ordered petitioner to reinstate olina to his for!er
position +ith full back+ages fro! 1 October 19(@ up to actual reinstate!ent. The issue of
ter!ination and da!ages +as referred to the >5ecutive Babor Arbiter for co!pulsor$
arbitration IRollo, p. (1J.
1etitioner appealed the order lifting olina3s suspension to the <ecretar$ of Babor.
;o+ever, on 2 %arch 19((, pending the resolution of petitioner3s appeal, the parties
signed an agree!ent before the Fndersecretar$ of Babor, the ter!s of +hich are as
follo+s8
AER>>%>)T
The undersigned parties hereb$ agree to the follo+ing8
1 ?hile pending final resolution of the co!plaint of %r. Ar!ando olina
against the 1hilippine Airlines, he shall be considered in the pa$roll
effective 1 October 19(@.
2 The order of Regional irector Dicente Beogardo for the
reinstate!ent +ith back+ages of %r. olina is hereb$ rendered !oot
and acade!ic.
" The parties shall consider this arrange!ent pending final resolution of
the case b$ arbitration.
555 555 555
<ubse:uentl$, on "0 %a$ 19((, the Acting <ecretar$ of Babor issued an order finding that
the propriet$ of the suspension had been rendered !oot and acade!ic b$ the above
agree!ent and referred the case for co!pulsor$ arbitration to the >5ecutive Babor Arbiter
IAnne5 A#A to the 1etition9 Rollo, p. .'J. On 2" %arch 19(9, the Babor Arbiter rendered its
decision, the dispositive portion of +hich reads as follo+s8
-) D->? O/ ABB T;> /OR>EO-)E, it is our considered opinion that there is
!erit on the application for clearance, and therefore, the sa!e should be as it is
hereb$ ERA)T>. Conse:uentl$, the oppositor3s T>R%-)AT-O) -< -) OR>R.
<ince the ter!ination is upheld, perforce the clai! for !oral da!ages is denied. &esides
pursuant to 1.. )o. 1"@( dated %a$ 1, 19(., this office is devoid of ,urisdiction to
entertain said clai!.
<O OR>R>. Iecision of Babor Arbiter, p. 129 Rollo, p. 9(J.
&$ virtue of the above decision, 1AB re!oved olina fro! its pa$roll effective 1 April 19(9.
olina then appealed the Babor Arbiter3s decision to the public respondent )BRC on 29
April 19(9 and there filed a !otion pra$ing that 1AB be ordered to return hi! to 1AB3s
pa$roll, contending that the Babor Arbiter3s decision +as not $et final because of his ti!el$
appeal. 1AB opposed the !otion clai!ing that it +as no longer obliged to return olina to
its pa$roll since the decision of the Babor Arbiter dated 2" %arch 19(9 in its favor +as a
final resolution of the case b$ arbitration IAnne5 A)A to the 1etition, p. 19 Rollo, p. 1"(J.
On . /ebruar$ 19.0, public respondent )BRC rendered its decision containing the
assailed portion to +it8
555 555 555
-n fine it is our considered vie+ that the respondent3s application for clearance to
dis!iss the co!plainant has sufficientl$ sur!ounted the test of validit$.
&e that as it !a$, +e are not in accord +ith the discontinuation of the pa$!ent of
co!plainant3s salaries. The agree!ent of the parties stipulated in no uncertain
ter!s that the co!plainant IolinaJ is to be carried in respondent3s pa$roll until
this case is finall$ resolved. As things stand, the !ain issue is still being litigated.
The co!plainant, therefore, !ust be restored to the pa$roll and paid for his
salaries fro! 1 April 19(9, the date he +as dropped fro! the respondent3s
pa$roll.
?;>R>/OR>, the ecision appealed fro! should be as it is hereb$ affir!ed in
toto. ;o+ever the respondent is ordered to restore the co!plainant to its pa$roll
and to pa$ his salaries fro! 1 April 19(9 until this case is finall$ resolved.
<O OR>R>. I)BRC ecision, pp. 10*119 Rollo, pp. "2*""9 -talics suppliedJ
;ence, this petition, +ith a pra$er for a te!porar$ restraining order. The Court issued a
te!porar$ restraining order on 10 October 19.0. 1rivate respondent olina failed to file his
co!!ent and the <olicitor Eeneral sub!itted his o+n Co!!ent supporting the stand of
petitioner. ue to the adverse stand of the <olicitor Eeneral, public respondent )BRC
sub!itted its o+n Co!!ent.
The issue before the Court is +hether or not the )BRC co!!itted grave abuse of
discretion in holding that private respondent olina +as entitled to his salaries fro! 1 April
19(9 Auntil this case is finall$ resolved.A
1AB contends that inas!uch as the respondent Co!!ission acting en banc had affir!ed
in toto the decision of the Babor Arbiter granting petitioner the clearance for the dis!issal
of private respondent olina, it is an act of grave abuse of discretion a!ounting to lack of
,urisdiction on its part to order petitioner to pa$ private respondent3s salaries fro! 1 April
19(9 until the case is finall$ ter!inated. 1AB contends that said stipulation refers onl$ to
the resolution of the case b$ arbitration and said arbitration of the case +as ter!inated
+hen the Babor Arbiter rendered its decision dated 2" %arch 19(9. 1AB argues that the
arbitration of the case is li!ited to and co!prises !erel$ the proceedings before the Babor
Arbiter such that +hen the latter renders a decision, arbitration of the dispute is
ter!inated .
1ublic respondent )BRC on the other hand contends that arbitration is a continuing
process fro! the ti!e the case is referred b$ the <ecretar$ of Babor to the Arbitration
&ranch until the final ,udg!ent is had on appeal. <ince the Babor Arbiter3s decision in favor
of petitioner did not finall$ resolve the case in vie+ of the ti!el$ appeal b$ private
respondent fro! said decision, the case +as not $et finall$ ter!inated b$ arbitration and
olina is entitled to be placed in petitioner3s pa$roll until the co!plaint is finall$ resolved.
The above contentions call for the proper interpretation of the agree!ent bet+een the
parties, specificall$ the third stipulation containing the clause Apending final resolution of
the case b$ arbitration.A
-t is a basic rule in interpretation of contracts that the circu!stances under +hich an
instru!ent +as !ade, including the situation of the sub,ect thereof and the parties to it,
!a$ be considered so that the intention of the contracting parties !a$ be ,udged correctl$
IArt. 1"(1, Civil Code of the 1hilippines9 <ection 11, Rule 1"0, Rules of Court9 Bi! v. Court
of Appeals, E.R. )o. B*702'., <epte!ber 11, 19.0, 99 <CRA @@..J -n the instant case,
the stipulation in the 2 %arch 19(( agree!ent that olina shag be included in the pa$roll
of 1AB until final resolution of the case b$ arbitration +as intended to supersede the order
of the Regional irector +hich, b$ stipulation of the parties, +as rendered !oot and
acade!ic. -n lieu of reinstate!ent and the pa$!ent of his back+ages, private respondent
+as included in petitioner3s pa$roll, effective fro! the ti!e he +as preventivel$ suspended
until final resolution of the case b$ arbitration, +ithout having to perfor! an$ +ork for the
petitioner. -n entering into the agree!ent, the parties could not have intended to include in
the clause Afinal resolution of the case b$ arbitrationA the +hole ad,udicator$ process,
including appeal. /or if it +ere so, even proceedings on certiorari before this Court +ould
be e!braced b$ the ter! AarbitrationA and private respondent +ill continue to receive
!onthl$ salar$ +ithout rendering an$ service to the petitioner regardless of the outco!e of
the proceedings before the Babor Arbiter, for as long as one of the parties appeal to the
)BRC and until the case is finall$ resolved b$ this Court. This is clearl$ an absurdit$ +hich
could not have been conte!plated b$ the parties.
)either can proceedings on appeal before the )BRC en banc be considered as part of the
arbitration proceeding. -n its broad sense, arbitration is the reference of a dispute to an
i!partial third person, chosen b$ the parties or appointed b$ statutor$ authorit$ to hear and
decide the case in controvers$ IChan Binte v. Ba+ Fnion and Rock, -ns. Co., 72 1hil. '7.
019212J. ?hen the consent of one of the parties is enforced b$ statutor$ provisions, the
proceeding is referred to as co!pulsor$ arbitration. -n labor cases, co!pulsor$ arbitration
is the process of settle!ent of labor disputes b$ a govern!ent agenc$ +hich has the
authorit$ to investigate and to !ake an a+ard +hich is binding on all the parties I<ee
?ood v. <eattle, 2" ?ash. 1, @2 1 1"', '2 BRA "@9 0192029 A!alga!ated Association v.
?isconsin >!plo$ees3 Relations &oard, "70 F.<. "."*710,9' B. >d. ".1 019'12J. Fnder
the Babor Code, it is the Babor Arbiter +ho is clothed +ith the authorit$ to conduct
co!pulsor$ arbitration on cases involving ter!ination disputes IArticle 21(, 1res. ecree
)o. 772, as a!endedJ. ?hen the Babor Arbiter renders his decision, co!pulsor$
arbitration is dee!ed ter!inated because b$ then the hearing and deter!ination of the
controvers$ has ended. An$ appeal raised b$ an aggrieved part$ fro! the Babor Arbiter3s
decision is alread$ be$ond the scope of arbitration since in the appeal stage, the )BRC en
banc !erel$ revie+s the Babor Arbiter3s decision for errors of fact or la+ and no longer
duplicates the proceedings before the Babor Arbiter. Thus, the clause Apending final
resolution of the case b$ arbitrationA should be understood to be li!ited onl$ to the
proceedings before the Babor Arbiter, such that +hen the latter rendered his decision, the
case +as finall$ resolved b$ arbitration.
%ore i!portant, ho+ever, is the fact that the )BRC3s order for the continued pa$!ent of
olina3s salaries is inconsistent +ith its affir!ance of the Babor Arbiter3s decision upholding
the validit$ of olina3s dis!issal. -n affir!ing the Babor Arbiter3s decision granting the
ter!ination clearance, the )BRC held that8
?ith respect to the issue of +hether or not the co!plainant3s IolinaJ dis!issal
+as sufficientl$ grounded, +e are not persuaded that the respondent Iherein
petitioner 1ABJ is under obligation to e!plo$ hi! as regular e!plo$ee si!pl$
because he +as certified ph$sicall$ fit and technicall$ to proficient b$ the CAA.
This is understandable for it concerns the safet$ of its properties, and above all,
the safet$ of the lives and properties of its passengers, +hich b$ la+ it is
co!!itted to transport safel$. -n the absence, therefore, of an$ sho+ing that its
standards are unreasonable and discri!inator$, +hich +e do not find here, ?e
cannot disturb the!. ?e can onl$ sa$ that for e5ercising e5traordinar$ diligence
in the selection of its pilots, ?e ,oin the public in co!!ending it.
555 555 555
-n fine, it is Our considered vie+ that the respondent3s application for clearance to
dis!iss the co!plainant has sufficientl$ sur!ounted the test of validit$.
-n vie+ of the above finding of valid dis!issal, the )BRC had no authorit$ to order the
continued pa$!ent of olina3s salaries fro! 1 April 19(9 until the case is finall$ resolved.
The )BRC3s order +ould result in co!pensating olina for services no longer rendered
and +hen he is no longer in 1AB3s e!plo$. This is contrar$ to the age*old rule of Aa fair
da$3s +age for a fair da$3s laborA +hich continues to govern the relation bet+een labor and
capital and re!ains a basic factor in deter!ining e!plo$ees3 +ages Iurabilt Recapping
1lant L Co. v. )ational Babor Relations Co!!ission, E.R. )o. (@(7@, #ul$ 2(, 19.(, 1'2
<CRA "2.J. <o that, if there is no +ork perfor!ed b$ the e!plo$ee there can be no +age
or pa$ unless the laborer +as able, +illing and read$ to +ork but +as prevented b$
!anage!ent or +as illegall$ locked out, suspended or dis!issed. ?here the e!plo$ee3s
dis!issal +as for a ,ust cause, it +ould neither be fair nor ,ust to allo+ the e!plo$ee to
recover so!ething he has not earned and could not have earned I<antos v. )ational Babor
Relations Co!!ission, E.R. )o. (@(21, <epte!ber 21, 19.(, 1'7 <CRA 1@@J.
%oreover, in ordering the continued pa$!ent of olina3s salaries fro! 1 April 19(9 until the
case is finall$ resolved, the )BRC in effect ordered the pa$!ent of back+ages to olina
not+ithstanding its finding of a valid dis!issal.
This is clearl$ untenable.
-n the first place, back+ages in general are granted on grounds of e:uit$ for earnings
+hich a +orker or e!plo$ee has lost due to his illegal dis!issal I)e+ %anila Cand$
?orkers Fnion 0)ACO)?A*1A/BF2 v. Court of -ndustrial Relations, E.R. )o. B*29(2.,
October "0, 19(., .@ <CRA "(9 urabilt Recapping 1lant L Co. v. )ational Babor
Relations Co!!ission, supra9 Chong Euan Trading v. )ational Babor Relations
Co!!ission, E. R. )o. .17(1, April 2@, 19.99 <antos v. )ational Babor Relations
Co!!ission, supraJ. ?here, as in this case, the dis!issal +as for a ,ust cause, there is no
factual or legal basis for ordering the pa$!ent of back+ages. The order of the )BRC for
the continued pa$!ent of olina3s salaries +ould allo+ the latter to un,ustl$ enrich hi!self
at the e5pense of the petitioner. This Court has reiterated ti!e and again that the la+, in
protecting the rights of the laborer, authori6es neither oppression nor self*destruction of the
e!plo$er IColgate 1al!olive 1hilippines, -nc. v. Ople, E.R. )o. ("@.1, #une "0,19..,1@"
<CRA "2"J. -n this case, the )BRC chose not to adhere +ith fidelit$ to this doctrine.
<econdl$, )BRC3s order for continued pa$!ent of olina3s salar$ fro! 1 April 19(9 up to
the final resolution of the case +ould place olina in a better position than those +orkers
+ho +ere found to have been illegall$ dis!issed b$ their e!plo$er. /or in the latter case,
the back+ages that can be recovered b$ the +orker is li!ited to three $ears I%ercur$ rug
Co., -nc. v. Court of -ndustrial Relations, E.R. )o. B*2""'(, April "0, 19(7, '@ <CRA @979
1hilippine Airlines, -nc. v. )ational Babor Relations Co!!ission, E.R. )o. @7.09,
)ove!ber 29, 19.", 12@ <CRA 22"9 %adrigal L Co., -nc. v. Ma!ora, E.R. )o. B*7.2"(,
%adrigal L Co., -nc. v. %inister of Babor, E.R. )o. B*7902", #une "0,19.(J +hile olina,
+hose dis!issal +as found to be valid, can recover appro5i!atel$ ten $ears back+ages,
+hich corresponds to the period fro! 1 April 19(9 until Afinal resolutionA of the instant
case.
Considering the foregoing, the Court holds that respondent )BRC3s order for the continued
pa$!ent of olina3s salaries fro! Al April 19(9 until the case is finall$ resolvedA is contrar$
to la+ and established ,urisprudence and the )BRC acted in e5cess of its ,urisdiction in
issuing the assailed order. -n the recent case of Blora %otors, -nc. v. rilon, E.R. )o.
.2.9', )ove!ber (, 19.9 the Court held as an act +ithout or in e5cess of ,urisdiction the
portion of the Babor Arbiter3s a+ard, +hich re:uired the e!plo$er to pa$ to its e!plo$ee an
a!ount e:uivalent to a half !onth3s pa$ for ever$ $ear of service as retire!ent benefits, for
being +ithout basis either in la+ or contract. <i!ilarl$, there is in this case an e5cess of
,urisdiction on the part of the )BRC in ordering the continued pa$!ent of olina3s salaries
Afro! 1 April 19(9 until the case is finall$ resolved.A
?;>R>/OR>, that part of the dispositive portion of the decision of the )ational Babor
Relations Co!!ission in )BRC CA<> )O. R&*-D*9"19*(( re:uiring petitioner to restore
private respondent to its pa$roll and ordering the pa$!ent of his salaries fro! 1 April 19(9
until the case is finall$ resolved is hereb$ declared )FBB and DO- and <>T A<->. The
te!porar$ Restraining Order issued b$ the Court on 10 October 19.0 is !ade
1>R%A)>)T.
<O OR>R>.
ernan# *.+.# ,utierre&# +r.# eliciano and Bidin# ++.# concur.
G.R. No. 12>=82 0a&uary 2:, 199:
REF(R1IST UNI(N (F R.3. INER, INC., HE2ER DETR(S, ET -., petitioners, vs.
N-TI(N- -3(R RE-TI(NS C(11ISSI(N, R.3. INER, INC., 3ERNIT- DE0ER(,
FEIPE DE0ER(, R(DEI( DE0ER(, -N- TERES- DE0ER(, a&' R(DEI( R?-N
DE0ER(, respondents.
D-2IDE, 0R., J.:
This is a special civil action for certiorari Rule @' of the Rules of Court seeking to set aside
the decision
1
of the )ational Babor Relations Co!!ission 0)BRC2 in )BRC )CR CA )o.
00711'*92, +hich affir!ed the decision
2
of the Babor Arbiter in the consolidated cases
)BRC )CR Case )os.00*0"*01"92*90 and 00*07*020.. *90, and the resolution of the
for!er den$ing the !otion for the reconsideration of its decision.
3
1etitioner Refor!ist Fnion of R.&. Biner, -nc. 0hereinafter Reformist2, +ith ;ever etros as
its president, is co!posed of drivers, conductors, and !echanics of private respondent
R.&. Biner, -nc. 1rivate respondents &ernita, /elipe, Rodelio, Ana Teresa, and Rodelio
R$an, all surna!ed e,ero, are the incorporators of R.&. Biner, -nc.
/ro! the record and the pleadings filed b$ the parties, +e cull the follo+ing !aterial facts
in this case8
1etitioner union +as organi6ed in %a$ 19.9 Ab$ affiliating itself +ith Bakas %anggaga+a
sa 1ilipinas 0hereinafter -a%as2.A
=
Bakas filed a notice of strike on 1" )ove!ber 19.9
because of alleged acts of unfair labor practice co!!itted b$ the private respondents.
5
espite conciliation hearings held on 7 and @ ece!ber 19.9, the parties failed to reach
an agree!ent. Bater, another act of unfair labor practice allegedl$ co!!itted b$ the private
respondents i!pelled Reformist, +ith the authori6ation of Bakas, to go on strike on 1"
ece!ber 19.9 even as conciliation proceedings continued.
6
On 21 ece!ber 19.9, R.&. Biner, -nc. petitioned then <ecretar$ /ranklin rilon of the
epart!ent of Babor and >!plo$!ent 0OB>2 to assu!e ,urisdiction over the ongoing
dispute or certif$ it to the )BRC.
:
<ecretar$ rilon deter!ined that AItJhe ongoing +ork
stoppage in the co!pan$ . . . adversel$ affects an industr$ indispensable to the national
interest9A thus on 2. ece!ber 19.9, he certified the dispute to the )BRC for co!pulsor$
arbitration and issued a return*to*+ork order.
8
The certified case 0)BRC Certified Case )o. 0'72, entitled in Re8 Babor ispute at R&
Biner, -nc.2 +as dis!issed on 1" /ebruar$ 1990
9
after the union and the co!pan$ reached
an agree!ent
1>
on 19 #anuar$ 1990 providing, a!ong other !atters, for the holding of a
certification election.
On "1 #anuar$ 1990, a certification election +as held +ere -a%as +on as the collective
bargaining agent of the rank*and*file e!plo$ees.
11
On 1" /ebruar$ 1990, Bakas presented
a proposal for a collective bargaining agree!ent to &ernita and Rodelia e,ero,
12
but the$
refused to bargain.
13
%ean+hile, as ad!itted b$ private respondents3 +itness Arcile
Tan,uatco, #r., eight R.&. Biner buses +ere AconvertedA to <ultran Bines, one Abeca!e
%CB,A and another Abeca!e <<T Biner.A
1=
The petitioners filed )BRC )CR Case )o. )CR*00*0"*01"92*90 charging the private
respondents +ith unfair labor practice, i.e., illegal lock*out. The private respondents
countered +ith )BRC Case )o. )CR*00*07*020..*90, +hich sought to declare as illegal
the union3s 1" ece!ber 19.9 strike, as +ell as other A+ork stoppages4bo$cottsA staged
b$ the petitioners. The t+o cases +ere consolidated and si!ultaneousl$ tried.
15
-n his decision of 2( October 1992, Babor Arbiter Ricardo )ora ruled that the evidence,
e.g., the private respondents3 proof of pa$!ent of percentage ta5es for 1990 and
Conductors4-nspectors ail$ Reports, AindicateIdJ against an illegal lockout,A +hile finding
that Reformist staged an illegal strike for the follo+ing reasons8
1. The Refor!ist failed to sho+ that the$ observed the legal re:uire!ents of a
legal strike, like the follo+ing8
irst, the Refor!ist failed to sho+ and present evidence that
the approval of !a,orit$ vote of its !e!bers +ere obtained b$
the secret ballot before the strike9 .econd, the$ failed to sho+
that the$ sub!itted the strike vote to the depart!ent of Babor
at least seven 0(2 da$s prior to the intended strike9 and /hird,
all !e!bers of the Refor!ist Fnion struck even before the
certification election, +hen there +as no definitive bargaining
unit dul$ recogni6ed and +hile the conciliation process +as
still on*going and in progress. >5h. (* is clear +hich states
the follo+ing8 AThe Fnion ob,ectIsJ +ith IsicJ the position of
%anage!ent for the reason that considering that the$ are on
strike such election is !oot and acade!ic. 0ll employees as
per union allegation participate1d2 in that concerted action.
2. The Refor!ist engaged in illegal, prohibited activities b$ obstructing the free
ingress and egress to and fro! the R.&. liner3s garage pre!ises +here the trucks
+ere parked9 0>5hs. A.A A.*A to A.*A2.
". The Refor!ist failed to present clear evidence . . . rebutting respondents3 clai!
that the Refor!ist blatantl$ defied the <ecretar$3s return to +ork Order dated
ece!ber 2., 19.9. The evidence adduced particularl$ >5hibit A12A 0the !inutes
of the conference on #anuar$ 19, 1990 in Office of the )BRC Co!!issioner
iokno2 includes the follo+ing8 AThat the Fnion assured to cause the return +ithin
five 0'2 da$s or #anuar$ 27, of all e!plo$ees +ho have not reported for +ork and
!anage!ent agreed to accept the!.A This clearl$ indicates an ad!ission b$ the
Refor!ist that its !e!bers did not co!pl$ +ith the Return*to*+ork order of the
<ecretar$ of Babor. -t !a$ be noted though that so!e !e!bers co!plied +ith
the Order as per testi!on$ of respondents3 +itness, ho+ever, the sa!e +orkers
had earlier participated in prohibited and illegal activities like illegal picketing that
characteri6ed an illegal strike.
16
The Babor Arbiter then disposed as follo+s8
-) D->? O/ T;> /OR>EO-)E, ,udg!ent is hereb$ rendered8
1. is!issing the co!plaint of Refor!ist in )BRC*)CR*Case )o. 00*
0"*01"92*90 for Fnfair Babor 1ractice 0-llegal lockout2 for lack of !erit9
2. eclaring the ece!ber 1", 19.9 <trike b$ the Refor!ist as -llegal in
)BRC*)CR*Case )o. 00*07*020..*909
". eclaring all the Offices and %e!bers of the Refor!ist to have lost
their e!plo$!ent status for participating in an -llegal <trike. The$ are
na!ed as follo+s
555 555 555
All other issues are is!issed for lack of !erit.
1:
On appeal, the )BRC affir!ed the Babor Arbiter3s finding that Refor!ist held an illegal
strike, reasoning as follo+s8
-t IRefor!istJ disputes the holding that an illegal strike +as staged on ece!ber
1", 19.9 on the ground that previous thereto, conciliation and !ediation
conferences +ere conducted and +hich thus constituted . . . evidence that there
+as a notice of strike filed conse:uent to a strike vote had a!ong the !e!bers
of the union. This, assu!ing for the sake of argu!ent is true, did not out rightl$
put a sta!p of validit$ for such concerted action as the fact re!ains that no
certification election +as conducted previous to the strike. ;ence, the union
could not have validl$ clai!ed that it +as the e5clusive bargaining agent to the
+orkers in petitioners3 pre!ises +hen is staged the sub,ect strike. )evertheless,
such fla+, as correctl$ assu!ed b$ the appellants, could have been corrected b$
the Return to ?ork Order of then <ecretar$ of Babor /ranklin rilon. The finding
that this Order +as defied is contested b$ the appellants alleging that the logbook
+hich contains an entr$ of all those +ho reported for +ork +as never presented
b$ !anage!ent, thus constituting suppression of evidence. This could have
been true had the said logbook constituted as the sole evidence in support of
petitioners3 assertion as to appellants3 failure to co!pl$ +ith the return to +ork
order. ;o+ever, the !inutes of the #anuar$ 19, 1990 conference before then
Co!!issioner iokno establishes such fact on the strength of the Fnion3s
ad!ission +hen it undertook to assure Athe return +ithin five 0'2 da$s or #anuar$
27 of all e!plo$ees +ho have not reported for +ork . . .A
18
/urther, it +as also
established that the strikers +ere guilt$ of co!!itting illegal activities, particularl$
the obstruction of free ingress and egress to and fro! the Biner3s garage
pre!ises as sho+n b$ the pictures taken thereat. All told, the foregoing
established circu!stances $ield no other conclusion e5cept to declare the strike
staged b$ the union as a illegal.
19
Anent the illegal lockout, the )BRC dee!ed R.&. Biner, -nc3s conversion of so!e of its
buses into those of other bus co!panies as sufficient reason for the petitioners to believe,
in good faith, that the private respondents +ere co!!itting an act of unfair labor practice.
The )BRC ruled that this circu!stance8
I%JitigateIdJ the liabilit$ of the striking union as +ell as its !e!bers not
onl$ in considering the propriet$ of ad!inistering the avo+ed principle
of e:uit$ in labor caseIsJ but like+ise on the strength to the
pronounce!ents of the <upre!e Court in aline of cases +here it +as
held that a strike undertaken on account of +hat the +orkers perceived
to be unfair labor practices acts on the part to the e!plo$er should not
be outrightl$ taken as illegal even if the allegations of unfair labor
practice acts are subse:uentl$ to be untrue.
2>
Thus, the )BRC affir!ed the decision of the Babor Arbiter but allo+ed
reinstate!ent of the dis!issed e!plo$ees8
Accordingl$, as a !easure of social ,ustice, resu!ption of e!plo$!ent
relations bet+een the parties shall be decreed +ithout ho+ever
granting an$ !onetar$ relief considering that both parties had, to a
certain e5tent, engaged in the co!!ission of acts +hich rendered the!
underserving of their pra$er for da!ages and other conco!itant reliefs
akin to their causes of action.
21
Refor!ist and its !e!bers !oved to consider the )BRC decision, +hich +as, ho+ever,
denied on "1, %arch 199'.
22
The petitioners then ca!e to us +ith this special civil action
for certiorari# citing the follo+ing in support thereof8
1. R><1O)>)T )BRC ERAD>BN A&F<> -T< -<CR>T-O) A%OF)T-)E TO BACO
O/ #FR-<-CT-O) -) /A-B-)E TO E-D> ?>-E;T TO T;> OD>R?;>B%-)E
>D->)C> O/ T;> 1>T-T-O)>R< <;O?-)E IA)J -BB>EAB BOCOOFT CO%%-TT>
&N T;> R><1O)>)T<.
2. R><1O)>)T< )BRC >)-> <F&<TA)T-AB #F<T-C> TO T;> 1>T-T-O)>R< &N
)OT A?AR-)E T;>% T;> %O)>TARN R>B->/< 1RAN> /OR.
". R><1O)>)T< )BRC >RRO)>OF<BN -)T>R1R>T> T;> BA? >)F)C-AT> &N
T;> ;O). <F1R>%> COFRT E-D-)E <>1ARAT-O) 1AN 1BF< &ACO?AE>< TO
>%1BON>>< ?;O<> R>-)<TAT>%>)T TO T;>-R /OR%>R 1O<-T-O)< ;AD> &>>)
R>)>R> -%1O<<-&B> &N T;> R><1O)>)T<.
The private respondents insist that the petitioners*e!plo$ees +ere validit$ dis!issed for
serious !isconduct and violations of labor la+s and la+ful orders of the Babor <ecretar$,
hence not entitled to reinstate!ent nor separation pa$ in lieu of reinstate!ent.
This petition !ust be granted, albeit not on the grounds advocated b$ the petitioners.
The private respondents can no longer contest the legalit$ of the strike held b$ the
petitioners on 1" ece!ber 19.9, as the private respondents the!selves sought
co!pulsor$ arbitration in order to resolve that ver$ issue hence their letter to the Babor
<ecretar$ read, in part8
This is to re:uest $our good office to certif$ for co!pulsor$ arbitration
or to assu!e ,urisdiction over the labor dispute 0strike continuing2
bet+een R.&. Biner, -nc. . . . and the Bakas %anggaga+a sa 1ilipinas.
The current strike b$ Bakas +hich started on ece!ber 1", 19.9 even
before Certification >lection could be held not be resolved b$ the )CR
Conciliation*%ediation ivision after si5 !eetings4conferences bet+een
the parties.
23
The dispute or strike +as settled +hen the co!pan$ and the union entered into
an agree!ent on 19 #anuar$ 1990 +here the private respondents agreed to
accept all e!plo$ees +ho, b$ then, had not $et returned to +ork. &$ acceding to
the peaceful settle!ent brooked b$ the )BRC, the private respondents +aived
the issue of the illegalit$ of the strike.
The ver$ nature of co!pulsor$ arbitration !akes the settle!ent binding upon the private
respondents, for co!pulsor$ arbitration has been defined both as Athe process of
settle!ent of labor disputes b$ a govern!ent agenc$ +hich has the authorit$ to investigate
and to !ake an a+ard +hich is binding on all the parties,A
2=
and as !ode of arbitration
+here the parties are Aco!pelled to accept the resolution of their dispute through
arbitration b$ the a third part$.A
25
Clearl$ then, the legalit$ of the strike could no longer be
revie+ed b$ the Babor Arbiter, !uch less b$ the )BRC, as this had alread$ been resolved.
-t +as the sole issue sub!itted for co!pulsor$ arbitration b$ the private respondents, as is
obvious fro! the portion of their letter :uoted above. The case certified b$ the Babor
<ecretar$ to the )BRC +as dis!issed after the union and the co!pan$ dre+ up the
agree!ent !entioned earlier. This conclusivel$ disposed of the strike issue.
The Babor Code provides that the decision in co!pulsor$ arbitration proceedings Ashall be
final and e5ecutor$ ten 0102 calendar da$s after receipt thereof b$ the parties.A
26
The
parties +ere infor!ed of the dis!issal of the case in a letter dated 17 /ebruar$ 1990, and
+hile nothing in the record indicates +hen the said letter +as received b$ the parties, it is
reasonable to infer that !ore than ten da$s elapsed = hence, the )BRC decision had
alread$ beco!e final and e5ecutor$ = before the private respondents filed their co!plaint
+ith the Babor Arbiter on 1" #ul$ 1990.
2:
A final ,udg!ent is no longer susceptible to
change, revision, a!end!ent, or reversal.
28
)either the Babor Arbiter nor the )BRC,
therefore, could revie+ the sa!e issue passed upon in )BRC Certified Case )o. 0'72,
and their decisions to the contrar$ have been rendered in grave abuse of discretion
a!ounting to e5cess of ,urisdiction.
The agree!ent entered into b$ the co!pan$ and the union, !oreover, +as in the nature of
a co!pro!ise agree!ent, i.e. Aan agree!ent bet+een t+o or !ore persons, +ho, for
preventing or putting an end to a la+suit, ad,ust their difficulties b$ !utual consent in the
!anner +hich the$ agree on, and +hich ever$one of the! prefers to the hope of gaining,
balanced b$ the danger of losing.A
29
Thus in the agree!ent, each part$ !ade concessions
in favor of the other to avoid a protracted litigation. ?hile +e do not abandon the rule that
Aunfair labor practice acts are be$ond and outside the sphere of co!pro!ises.A
3>
the
agree!ent herein +as voluntaril$ entered into and represents a reasonable settle!ent,
thus it binds the parties.
31
On this score, the Babor Code besto+s finalit$ to unvitiated
co!pro!ise agree!ents8
Art. 22( Co!pro!ise agree!ents = An$ co!pro!ise settle!ent, including
those involving labor standard la+s, voluntaril$ agreed upon b$ the parties +ith
the assistance of the &ureau or the regional office of the epart!ent of Babor,
shall be final and binding upon the parties. The )ational Babor Relations
Co!!ission or an$ court shall not assu!e ,urisdiction over issues involved
therein e5cept in case of non*co!pliance thereof or if there is prima facie
evidence that the settle!ent +as obtained through fraud, !isrepresentation or
coercion.
The agree!ent in this case co!plies +ith the above re:uisites, forged as it +as
under authorit$ of the Babor <ecretar$, +ith representatives fro! both the union
and the co!pan$ signing the hand+ritten agree!ent to signif$ their consent
thereto. The private respondents never alleged in their ans+er
32
to the
petitioners3 co!plaint before the Babor Arbiter, nor in their co!plaint,
33
that the
petitioners did not co!pl$ +ith the agree!ent. The binding effect of the
agree!ent on the private respondents in thus uni!paired.
The private respondents3 cause like+ise fails in light of Article 20"( of the Civil Code,
+hich gives co!pro!ise agree!ents Athe effect and authorit$ of res judicataA upon the
parties to the sa!e, even +hen effected +ithout ,udicial approval.
3=
The Babor Arbiter and
the )BRC therefore erroneousl$ revie+ed an issue +hich had alread$ been laid to rest b$
the parties the!selves and +hich, appl$ing the principle of res judicata, the$ could no
longer re*litigate.
35
The onl$ barrier then to the petitioners*e!plo$ees3 reinstate!ent is their defiance of the
Babor <ecretar$3s return*to*+ork order, +hich the private respondents clai! as one reason
to validl$ dis!iss the petitioners*e!plo$ees. ?e disagree, ho+ever, +ith the finding that
Bakas4Refor!ist violated the said order.
-t is upon the private respondents to substantiate the aforesaid defiance, as the burden of
proving ,ust and valid cause for dis!issing e!plo$ees fro! e!plo$!ent rests on the
e!plo$er, and the latter3s failure to do so results in a finding that the dis!issal +as
unfounded.
36
The private respondents fell short of discharging this burden.
Contrar$ to the Babor Arbiter3s and the )BRC3s vie+, the union3s undertaking to cause
absentee e!plo$ees to return to +ork +as not an ad!ission that its !e!bers defied the
Babor <ecretar$3s order. Those +ho did not report for +ork after the issuance of the Babor
<ecretar$3s order !a$ not have been infor!ed of such order, or the$ !a$ have been too
fe+ so as to conclude that the$ deliberatel$ defied the order. The private respondents
failed to eli!inate these probabilities.
The !ost conclusive piece of evidence that the union !e!bers did not report for +ork
+ould be the co!pan$3s logbook +hich records the e!plo$ees3 attendance.
3:
The private
respondents3 o+n +itness, Ad!inistrative %anager Rita >rni, ad!itted that the logbook
+ould sho+ +ho a!ong the e!plo$ees reported for +ork.
38
The logbook +as supposed to
be !arked as >5hibit A17A for the private respondents, but +as +ithdra+n,
39
then the
private respondents3 counsel, Att$. Eodofredo K. Asuncion, later inti!ated that the said
logbook +as Astolen or lost.A
=>
?e are not prepared to conclude that the private respondents +illfull$ suppressed this
particular piece of evidence, in +hich case the sa!e +ould be presu!ed adverse to the!
if produced.
=1
;o+ever, other evidence indicate that the petitioners*e!plo$ees co!plied
+ith the Babor <ecretar$3s return*to*+ork order, na!el$, the private respondents3 >5hibits
A11A to A11*>.A
=2
These are Conductors4-nspectors ail$ Reports +hich detail the bus trips
!ade b$ a particular conductor*driver tande!, as +ell as the nu!bers of the bus tickets
used during each trip, and these reports are all dated "0 ece!ber 19.9 = !erel$ t+o
da$s after <ecretar$ rilon issued his order = indicating that a nu!ber of e!plo$ees did
report for +ork in co!pliance +ith the <ecretar$3s order. %oreover, the said e5hibits +ere
e5ecuted b$ so!e of the e!plo$ees ordered dis!issed b$ the Babor Arbiter.
=3
The private respondents intended the e5hibits to prove that onl$ a handful of e!plo$ees
reported for +ork follo+ing the issuance of the Babor <ecretar$3s order, but the$ never
established that these e5hibits +ere the onl$ reports filed on "0 ece!ber 19.9, thus,
there !a$ have been e!plo$ees other than those na!ed in the said e5hibits +ho reported
for +ork in obeisance to the Babor <ecretar$. Certainl$, the ail$ Reports acco!plished b$
drivers and conductors +ould not reflect the attendance of !echanics. &esides, it +as not
sho+n b$ the private respondents that their e!plo$ees +ere re:uired to the file the
Conductors4-nspectors ail$ Reports such that those +ho did not file +ould be instantl$
dee!ed absent.
The private respondents thus failed to satisfactoril$ establish an$ violation of the Babor
<ecretar$3s return*to*+ork order, and conse:uentl$, the Babor Arbiter3s and the )BRC3s
contrar$ finding is not anchored on substantial evidence. Erave abuse of discretion +as
thus co!!itted once !ore.
As regards the illegal lockout alleged b$ the petitioners, +e agree +ith the )BRC3s finding
that the petitioners had sufficient basis to believe in good faith that the private respondents
+ere culpable. The )BRC found this circu!stance to ,ustif$ the petitioners*e!plo$ees3
reinstate!ent9 +e add that since there +as, in fact, no defiance of the Babor <ecretar$3s
return*to*+ork order, and no cause to decree the petitioners*e!plo$ees3 dis!issal in the
first instance, reinstate!ent of the dis!issed e!plo$ees can be the onl$ outco!e in this
case.
The possibilit$ of reinstate!ent is a :uestion of fact, and +here a factual deter!ination is
indispensable to the co!plete resolution of the case, this Court usuall$ re!ands the case
to the )BRC.
==
-n vie+, ho+ever, of both parties3 assertion that reinstate!ent has beco!e
i!possible because, as clai!ed b$ the petitioners, Athe buses +ere alread$ disposed ofA9
or as clai!ed b$ the private respondents, R.&. Biner, -nc., had Aceased operationsA
because Aits Certificate of 1ublic Convenience had e5pired and +as denied rene+al,A and
further, of Aclosure of the co!pan$A due to Alack of operational trucks and buses and high
costs of units,A
=5
there is no need to re!and this case to the )BRC. ue to the infeasiblit$
of reinstate!ent, the petitioners3 pra$er for separation pa$ !ust be granted. <eparation
pa$, e:uivalent to one !onth3s salar$ for ever$ $ear of service, is a+arded as an
alternative to reinstate!ent +hen the latter is no longer an option,
=6
and is co!puted fro!
the co!!ence!ent of e!plo$!ent up to the ti!e of ter!ination, including the period of
i!puted service for +hich the e!plo$ee is entitled to back +ages. The salar$ rate
prevailing at the end of the period of putative service should be the basis for co!putation.
=:
The petitioners are also entitled to back +ages. The pa$!ent of back +ages Ais a for! of
relief that restores the inco!e that +as lost b$ reason of unla+ful dis!issal.A
=8
The
petitioners3 dis!issal being un+arranted as aforestated, +ith the e!plo$ees dis!issed
after R.A. )o. @(1'
=9
took effect, then, pursuant to the said la+ and the latest rule on the
!atter laid do+n in the Resolution of 2. )ove!ber 199@ of this Court, sitting en banc, in
Bustamante vs. 3ational -abor Relations *ommission#
5>
the petitioners*e!plo$ees are
entitled to pa$!ent of full back +ages fro! the date of their dis!issal up to the ti!e +hen
reinstate!ent +as still possible, i.e., in this instance, up to the e5piration of the franchise of
R.&. Biner, -nc.
?;>R>/OR>, the instant petition is ERA)T>. The assailed decision of the )ational
Babor Relations Co!!ission in )BRC )CR CA )o. 00711'*92, as +ell as that of the
Babor Arbiter in the consolidated cases of )BRC )CR Case )os. 00*0"*01"92*90 and 00*
07*020..*90 are <>T A<-> 1etitioners*e!plo$ees are hereb$ a+arded full back +ages
and separation pa$ to be deter!ined b$ the Babor Arbiter as prescribed above +ithin thirt$
0"02 da$s fro! notice of this ,udg!ent.
<O OR>R>.
3arvasa# *.+# 4elo# rancisco and $anganiban# ++.# concur.
G.R. No. 12>:51 1ar%9 1:, 1999
PHI1C( INDUSTRIES, INC., petitioner, vs. H(N(R-3E -CTING SECRET-R? (F
-3(R 0(SE 3RI-NTES a&' PHI1C( INDUSTRIES -3(R -SS(CI-TI(N,
respondents.
PURISI1-, J.:
At bar is a 1etition for *ertiorari under Rule @' of the Revised Rules of Court, seeking to
set aside the #ul$ (, 199' Order
1
of the then Acting <ecretar$ #ose &rillantes of the
epart!ent of Babor and >!plo$!ent, in )C%&*)CR*)<*0"*122*9', on the ground of
grave abuse of discretion a!ounting to lack or e5cess of ,urisdiction.
The antecedent facts are, as follo+s8
On %arch 9, 199', the private respondent, 1hi!co -ndustries Babor Association 01-BA2,
dul$ certified collective bargaining representative of the dail$ paid +orkers of the petitioner,
1hi!co -ndustries -nc. 01;-%CO2, filed a notice of strike +ith the )ational Conciliation and
%ediation &oard, )CR, against 1;-%CO, a corporation engaged in the production of
!atches, after a deadlock in the collective bargaining and negotiation. On April 21, 199',
+hen the several conciliation conferences called b$ the contending parties failed to resolve
their differences 1-BA, co!posed of "'2
2
!e!bers, staged a strike.
On #une (, 199', 1-BA presented a petition for the intervention of the <ecretar$ of Babor in
the resolution of the labor dispute, to +hich petition 1;-%CO opposed. 1ending resolution
of the said petition or on #une 2@, 199', to be precise, 1;-%CO sent notice of ter!ination
to so!e 7(
3
+orkers including several union officers.
On #ul$ (, 199', the then Acting <ecretar$ of Babor #ose &rillantes assu!ed ,urisdiction
over the labor dispute and issued his Order ruling, thus8
?;>R>/OR>, A&OD> 1R>%-<>< CO)<->R>, and pursuant to Article 2@"
0g2 of the Babor Code, as a!ended, this office hereb$ assu!es ,urisdiction over
the dispute at, 1hi!co industries, -nc.
Accordingl$, all the striking +orkers, e5cept those +ho have been handed do+n
ter!ination papers on #une 2@, 199', are hereb$ directed to return to +ork +ith
t+ent$*four 0272 hours fro! receipt of this Order and for the Co!pan$ to accept
the! back under the sa!e ter!s and conditions prevailing prior to the strike.
The parties are further ordered to cease and desist fro! co!!itting an$ act that
+ill aggravate the situation.
To e5pedite the resolution of this dispute, the parties are directed to sub!it their
position papers and evidence +ithin ten 0102 da$s fro! receipt of this Order.
<O OR>R>.
=
On #ul$ 12, 199', petitioner brought the present petition9 theori6ing, that8
-
T;> ;O)ORA&B> ACT-)E <>CR>TARN #O<> &R-BBA)T>< ACT> ?-T; T;>
ERAD> A&F<> O/ -<CR>T-O) A%OF)T-)E TO BACO O/ >CC><< O/
#FR-<-CT-O) -) -<<F-)E T;> A<<A-B> OR>R.
--
T;> ;O)ORA&B> ACT-)E <>CR>TARN #O<> &R-BBA)T>< ACT> ?-T; ERAD>
A&F<> O/ -<CR>T-O) A%OF)T-)E TO BACO OR >CC><< O/ #FR-<-CT-O)
?;>) ;> ?>)T &>NO) T;> &A<-< /OR A<<F%1T-O) O/ #FR-<-CT-O) F)>R
ART. 2@" O/ T;> BA&OR CO>.
5
On #ul$ "1, 199', t+o +eeks after the filing of the 1etition, the public respondent issued
another Order
6
te!poraril$ holding in abe$ance the i!ple!entation of the :uestioned
Order dated #ul$ (, 199' for a period of thirt$ 0"02 da$9 directing, as follo+s8
?;>R>/OR> 1R>%-<>< CO)<->R>, the i!ple!entation of our Order
dated ( #ul$ 199' hereb$ te!poraril$ held in abe$ance for a period of thirt$ 0"02
da$s effective fro! receipt thereof pending the private negotiations of the parties
for the settle!ent of their labor dispute. Thereafter, both the Fnion and the
Co!pan$ are directed to sub!it to this Office the result of their negotiations for
our evaluation and appropriate action.
<O OR>R>.
:
The pivotal issue here is8 +hether or not the public respondent acted +ith grave abuse of
discretion a!ounting to lack or e5cess of ,urisdiction in assu!ing ,urisdiction over sub,ect
labor dispute.
The petition is i!pressed +ith !erit.
Art. 2@", paragraph 0g2 of the Babor Code, provides8
0g2 ?hen, in his opinion, there e5ist a labor dispute causing or likel$ to cause a
strike or lockout in an industr$ indispensable to the national interest, the
<ecretar$ of Babor and >!plo$!ent !a$ assu!e ,urisdiction over the dispute
and decide it or certif$ the sa!e to the Co!!ission for co!pulsor$ arbitration . . .
The Babor Code vests in the <ecretar$ of Babor the discretion to deter!ine +hat industries
are indispensable to the national interest. Accordingl$, upon the deter!ination b$ the
<ecretar$ of Babor that such industr$ is indispensable to the national interest, he +ill
assu!e ,urisdiction over the labor dispute in the said industr$.
8
This po+er, ho+ever, is
not +ithout an$ li!itation. -n upholding the constitutionalit$ of &.1. 1"0 insofar as it a!ends
Article 2@7 0g2
9
of the Babor Code, it stressed in the case of ree telephone !or%ers
5nion vs. 6onorable 4inister of -abor and 7mployment, et al.,
1>
the li!itation set b$ the
legislature on the po+er of the <ecretar$ of Babor to assu!e ,urisdiction over a labor
dispute, thus8
&atas 1a!bansa &lg. 1"0 cannot be an$ clearer, the coverage being li!ited to
Astrikes or lockouts adversel$ affecting the national interest.
11
-n this case at bar, ho+ever, the ver$ ad!ission b$ the public respondent dra+s the labor
dispute in :uestion out of the a!bit of the <ecretar$3s prerogative, to +it.
?hile the case at bar appears on its face not to fall +ithin the strict categori6ation
of cases i!bued +ith Anational interestA, this office believes that the obtaining
circu!stances +arrant the e5ercise of the po+ers under Article 2@" 0g2 of the
Babor Code, as a!ended.
12
The private respondent did not even !ake an$ effort to touch on the indispensabilit$ of the
!atch factor$ to the national interest. -t !ust have been a+are that a !atch factor$,
though of value, can scarcel$ be considered as an industr$ Aindispensable to the national
interestA as it cannot be in the sa!e categor$ as Ageneration and distribution of energ$, or
those undertaken b$ banks, hospitals, and e5port*oriented industries.A
13
Net, the public
respondent assu!ed ,urisdiction thereover, ratiocinating as follo+s8
/or one, the prolonged +ork disruption has adversel$ affected not onl$ the
protagonists, i.e., the +orkers and the Co!pan$, but also those directl$ and
indirectl$ dependent upon the unha!pered and continued operations of the
Co!pan$ for their !eans of livelihood and e5istence. -n addition, the entire
co!!unit$ +here the plant is situated has also been placed in ,eopard$. -f the
dispute at the Co!pan$ re!ains unabated, possible loss of e!plo$!ent, not to
!ention conse:uent social proble!s, !ight result thereb$ co!pounding the
une!plo$!ent proble! of the countr$.
Thus +e cannot be un!indful of the possible dire conse:uences that !ight
ensue if the present dispute is allo+ed to re!ain unresolved, particularl$ +hen
alternative dispute resolution !echanis! obtains to dispose of the differences
bet+een the parties herein.
1=
-t is thus evident fro! the foregoing that the <ecretar$3s assu!ption of ,urisdiction
grounded on the alleged Aobtaining circu!stancesA and not on a deter!ination that the
industr$ involved in the labor dispute is one indispensable to the Anational interestA, the
standard set b$ the legislature, constitutes grave abuse of discretion a!ounting to lack of
or e5cess of ,urisdiction. To uphold the action of the public respondent under the pre!ises
+ould be stretching too far the po+er of the <ecretar$ of Babor as ever$ case of a strike or
lockout +here there are inconveniences in the co!!unit$, or +ork disruptions in an
industr$ though not indispensable to the national interest, +ould then co!e +ithin the
<ecretar$3s po+er. -t +ould be practicall$ allo+ing the <ecretar$ of Babor to intervene in
an$ Babor dispute at his pleasure. This is precisel$ +h$ the la+ sets and defines the
standard8 even in the e5ercise of his po+er of co!pulsor$ arbitration under Article 2@" 0g2
of the Babor Code, the <ecretar$ !ust follo+ the la+. /or A+hen an over6ealous official b$*
passes the la+ on the prete5t of retaining a laudable ob,ective, the intend!ent or purpose
of the la+ +ill lose its !eaning as the la+ itself is disregardedA
15
-n light of the foregoing, +e hold that the public respondent gravel$ abused his discretion in
assu!ing ,urisdiction over the labor dispute sued upon in the case.
?;>R>/OR>, the petition is hereb$ ERA)T>9 and the assailed Order, dated #ul$ (,
199', of the Acting <ecretar$ of Babor <>T A<->. )o pronounce!ent as to costs.
<O OR>R>.
Romero# 8itug# $anganiban and ,on&aga9Reyes# ++.# concur.
$anganiban# +.# see concurring opinion.
***************************************************************************
Se@ara#e (@"&"o&$
P-NG-NI3-N, J., concurring opinion9
- no+ agree +ith #ustice 1urisi!a3s revised ponencia that the labor secretar$ acted +ith
grave abuse of discretion in assu!ing ,urisdiction over a labor dispute +ithout an$ sho+ing
that the disputants +ere engaged in an industr$ indispensable to national interest. Kuite
the contrar$, the respondent secretar$ hi!self ad!its that the industr$, of +hich petitioner
is a part, is not indispensable to national interest. -ndeed, a labor dispute !ust seriousl$
and deleteriousl$ affect an industr$ indispensable to national interest before the secretar$
!a$ assu!e ,urisdiction over it.
0rt. :;< (g" Re'uires a -abor Dispute in an
=ndustry =ndispensable to 3ational =nterest.
Art. 2@" of the Babor Code speaks of the right of +orkers to engage in concerted activities
for their !utual benefit and protection.
1
Concerted activities, like the holding of a strike,
are resorted to b$ e!plo$ees in their effort to obtain !ore favorable ter!s and conditions
of +ork for the!selves. ue to its i!portance, the e5ercise of such right is li!ited onl$ b$
the de!ands of national interest under paragraph 0g2 of said article8
0g2. ?hen, in his opinion, there e5ists a labor dispute causing or likel$ to cause a
strike or lockout in an industr$ indispensable to the national interest, the
<ecretar$ of Babor and >!plo$!ent !a$ assu!e ,urisdiction over the dispute
and decide it or certif$ the sa!e to the Co!!ission for co!pulsor$ arbitration.
<uch assu!ption or certification shall have the effect of auto!aticall$ en,oining
the intended or i!pending strike or lockout as specified in the assu!ption or
certification order. -f one has alread$ taken place at the ti!e of assu!ption or
certification, all striking or locked out e!plo$ees shall i!!ediatel$ return to +ork
and the e!plo$er shall i!!ediatel$ resu!e operations and read!it all +orkers
under the sa!e ter!s and conditions prevailing before the strike or lockout. The
<ecretar$ of Babor and >!plo$!ent or the Co!!ission !a$ seek the assistance
of la+ enforce!ent agencies to ensure co!pliance +ith this provision as +ell as
+ith such orders as he !a$ issue to enforce the sa!e.
555 555 555
The foregoing not+ithstanding, the 1resident of the 1hilippines shall not be
precluded fro! deter!ining the industries that, in his opinion, are indispensable
to the national interest, and fro! intervening at an$ ti!e and assu!ing
,urisdiction over an$ such labor dispute in order to settle or ter!inate the sa!e.
/ro! the te5t and the tenor of the la+, it is clear as da$light that the secretar$3s
assu!ption of ,urisdiction over a labor dispute is !eant to be used sparingly and only if the
national interest demands it. ;e, like ever$one else, !ust respect labor3s para!ount right
to stage concerted activities.
+urisprudence Re'uires 3ational =nterest to +ustify 0ssumption of +urisdiction
-ndeed, the Court has consistentl$ ruled that the secretar$3s assu!ption of ,urisdiction is
intended not to interfere +ith or i!pede +orkers3 rights, but to obtain speed$ settle!ent of
labor disputes and onl$ if national interests +ill be affected.
2
Ad!ittedl$, the Court has
allo+ed the secretar$3s assu!ption of ,urisdiction in !an$ cases, so!e of +hich are +orth
!entioning to sho+ the care +ith +hich such plenar$ po+er should be used.
-n $hilippine .chool of Business 0dministration v. 3oriel,
3
the Court has declared that the
ad!inistration of a school is of national interest because A . . . IitJ is engaged in the
pro!otion of the ph$sical, intellectual and e!otional +ell*being of the countr$3s $outh.A
?ork stoppage at a school undul$ pre,udices the students and entails great loss to all
concerned in ter!s of ti!e, effort and !one$.
-n .armiento v. /uico,
=
an enterprise e5porting 90 percent of its production and generating
!ore than P12 !illion dollars per $ear +as declared to be of national interest. An$
disruption of operations +ould have caused the dela$ of ship!ents of e5port consisting of
finished products previousl$ co!!itted to custo!ers abroad, a dela$ that +ould have
ha!pered the econo!ic recover$ progra! pursued b$ the govern!ent.
The !anufacture of drugs and phar!aceuticals has also been declared to belong to the
sa!e classification.
5
Bike+ise, the operation of an airline that services do!estic routes
has been dee!ed to be i!bued +ith national interest.
6
-n one case, a co!pan$ +as
considered to be indispensable to national interest, as it +as responsible for 22 percent of
the tire production in the 1hilippines, and +ork disruption +ould have or onl$ aggravated
the alread$ +orsening une!plo$!ent situation but also discouraged foreign and do!estic
entrepreneurs fro! further investing in the countr$.
:
On the other hand, the Court has disallo+ed the i!prudent use of this po+er in even !ore
cases. 1erhaps the !ost elo:uent of these ,/7 Directories *orporation v. .anche&,
8
+herein the Court declared the secretar$ to be +ithout ,urisdiction to take over a labor
dispute involving a co!pan$ that produced telephone directories, vi&8
The production and publication of telephone directories, +hich is the principal
activit$ of ET>, can scarcel$ be described as an industr$ affecting the national
interest. ET> is a publishing fir! chiefl$ dependent on the !arketing and sale of
advertising space for its not inconsiderable revenues. -ts services, +hile of value,
cannot be dee!ed to be in the sa!e categor$ of such essential activities as Athe
generation or distribution of energ$A or those undertaken b$ Abanks, hospitals,
and e5port*oriented industries.A -t cannot be regarded as pla$ing as vital a role in
co!!unication as other !ass !edia. The s!all nu!ber of e!plo$ees involved
in the dispute, the e!plo$er3s pa$!ent of A110 !illion in inco!e ta5 alone to the
1hilippine Eovern!ent,A and the fact that the Atop officers of the union +ere
dis!issed during the conciliation process,A obviousl$ do not suffice to !ake the
dispute in the case at bar one Aadversel$ affecting the national interest.A
/he .ecretary is 8ested with Broad $owers !hen 6e 0ssumes +urisdiction
?hen the secretar$ assu!es ,urisdiction under Art. 2@"0g2, he is granted Agreat breadth of
discretionA in order to find a solution to a labor dispute. -n /he $hilippine 0merica
4anagement *o., =nc. v. /he $hilippine 0merican 4anagement 7mployees 0ssociation
($04709!",
9
the Court clarified the e5tent of the po+ers vested in the then Court of
-ndustrial Relations, as follo+s8
. . . -f the Court of -ndustrial Relations is granted authorit$ to find a solution in an
industrial dispute and such solution consists in the ordering of e!plo$ees to
return back to +ork, it cannot be contended that the Court of -ndustrial Relations
does not have the po+er of ,urisdiction to carr$ that solution into effect. And of
+hat use is its po+er of conciliation and arbitration if it does not have the po+er
and ,urisdiction to carr$ into effect the solution it has adopted. Bastl$9 if the Court
of -ndustrial Relations has the po+er to fi5 the ter!s and conditions of
e!plo$!ent, it certainl$ can order the return of the +orkers +ith or +ithout
backpa$ as a ter! or condition of the e!plo$!ent.
The !ost obvious of these po+ers is the auto!atic en,oin!ent of an i!pending strike or
lockout or the lifting thereof if one has alread$ taken place. Assu!ption of ,urisdiction
al+a$s coe5ist +ith an order for +orkers to return to +ork i!!ediatel$ and for e!plo$ers to
read!it all +orkers under the sa!e ter!s and conditions prevailing before the strike or
lockout. efiance of return*to*+ork order produces forfeiture of +orkers3 e!plo$!ent.
1>
Thus, not onl$ does it di!inish the right of labor to strike9 it also li!its the prerogatives of
!anage!ent to hire +orkers under its o+n ter!s and conditions.
11
The secretar$ is conferred other po+ers, including ,urisdiction over incidents arising fro!
the labor dispute, in order to avoid the undesirable result of dia!etricall$ opposed rulings
being issued b$ the secretar$ and the labor arbiter. These po+ers co!prehend those that
the secretar$ needs to dispose of the pri!ar$ dispute effectivel$ and efficientl$.
12
The al!ost unli!ited breadth of such po+ers calls for caution on the part of its possessor
add strict scrutin$ of the e5cesses of govern!ent on the part of the ,udiciar$.
$recursor of 0rticle :;<(g"
The po+er to restrict strikes and lockouts is of !artial la+ vintage. &efore Republic Act.
@(1' +as enacted, then 1resident /erdinand %arcos sought to :uell !ass e5pressions of
dissent, including strikes, through Eeneral Order )o. ' +hich provided8
?;>R>A<, 1rocla!ation )o. 10.1 dated <ept. 21, 19(2, +as issued b$ !e
because of a grave national e!ergenc$ no+ prevailing throughout the countr$
+hich has been brought about b$ the activities of groups of !en no+ activel$
engaged in cri!inal conspirac$ to sei6e political po+er and state po+er in the
1hilippines in order to take over the Eovern!ent b$ force and violence, the
e5tent of +hich has no+ assu!ed the proportion of an actual +ar against our
people and their legiti!ate Eovern!ent9 and
?;>R>A<, in order to restore the tran:uillit$ and stabilit$ of the nation in the
:uickest possible !anner, it is necessar$ to prohibit the inhabitants of the countr$
fro! doing certain acts of undertaking certain activities such as rallies,
de!onstrations, picketing or strikes in certain vital industries, and other for!s of
group actions +hich +ould cause h$steria or panic a!ong the populace or +ould
incense the people against their legiti!ate Eovern!ent, or +ould generate
s$!path$ for the radical and la+less ele!ents, or +ould aggravate the alread$
critical political and social tur!oil no+ prevailing throughout the land9
)O?, T;>R>/OR>, -, /erdinand >. %arcos, Co!!ander*in*Chief of all the
Ar!ed /orces of the 1hilippines, and pursuant to 1rocla!ation )o. 10.1 dated
<ept. 21, 19(2, do hereb$ order that henceforth and until other+ise ordered b$
!e or b$ !$ dul$ designated representative, all rallies, de!onstrations and other
for!s of group actions b$ persons +ithin the geographical li!its of the
1hilippines, including strikes and picketing in vital industries such as in
co!panies engaged in the !anufacture or processing as +ell in the distribution
of fuel gas, gasoline, and fuel or lubricating oil, in co!panies engaged in the
production or processing of essential co!!odities or products for e5ports, and in
co!panies engaged in banking of an$ kind, as +ell as in hospitals and in schools
and colleges, are strictl$ prohibited and an$ person violating this order shall
forth+ith be arrested and taken into custod$ and held for the duration of the
national e!ergenc$ or until he or she is other+ise ordered released b$ !e or b$
!$ dul$ designated representative.
Eeneral Order )o. ', +hich +as acco!panied b$ Better of -nstructions )o. "@.,
specificall$ detailed the vital industries or fir!s referred to, as follo+s8
/or the guidance of +orkers and e!plo$ers, so!e of +ho! have been led into
filing notices of strikes and lockouts even in vital industries, $ou are hereb$
instructed to consider the follo+ing as vital industries and co!panies or fir!s
under 1 .2" as a!ended8
1. 1ublic Ftilities8
A. Transportation8
12 All land, air and +ater co!panies or fir!s
engaged in passenger, freight or tourist transport9
22 All brokerage, arrastre, +arehousing co!panies
or fir!s9
&. Co!!unications8
12 ?ire or +ireless teleco!!unications such as
telephone, telegraph, tele5, and cable co!panies or
fir!s9
22 Radio and television co!panies or fir!s9
"2 1rint %edia co!panies9
72 1ostal and !essengerial service co!panies9
C. Co!panies engaged in electric, light, gas, stea! and +ater
po+er generation and distribution and sanitar$ service
co!panies9
. Other 1ublic Ftilities8
12 -ce and Refrigeration plants
2. Co!panies or fir!s engaged in the !anufacture or processing of the follo+ing
essential co!!odities8
A. Ani!al feeds
&. Ce!ent
C. Che!icals and fertili6ers
. rugs and !edicines
>. /lour
/. 1roducts +hich are classified as essential co!!odities in the list of
)ational >cono!ic and evelop!ent Authorit$ e5cept the follo+ing8
rice, corn, so!e basic cuts of !eat, cooking oil, laundr$ soap, lu!ber
and pl$+ood, galvani6ed iron sheets, +riting pads and notebooks.
E. -ron, steel, copper, tin plates and other basic !ineral products9
;. %ilk
-. )e+sprint
#. Tires
O. <ugar
B. Te5tile and gar!ents
". Co!panies engaged in the production and processing of products for e5port
+hich are holders of Central &ank or &oard of -nvest!ent Certificate of >5port
Orientation, including hotels and restaurants classified as three 0"2, four 072 or
five 0'2 star b$ the epart!ent of Touris!9
7. Co!panies engaged in e5ploration, develop!ent, !ining, s!elting, or refining
coal, oil, iron, copper, gold, and other !inerals9
'. Co!panies or fir!s engaged in banking, including8
A. Co!!ercial &anks
&. <aving &anks
C. evelop!ent &anks
. -nvest!ent &anks
>. Rural &anks
/. <avings and Boans Associations
E. Cooperative &anks
;. Credit Fnions
@. Co!panies or fir!s +hich are actuall$ engaged in govern!ent infrastructure
pro,ects and in activities covered b$ efense contracts9
(. ;ospitals as defined in <ection 2, Rule 1*A, &ook --- of the Rules and
Regulations -!ple!enting the Babor Code of the 1hilippines9
.. <chool and Colleges dul$ recogni6ed b$ the Eovern!ent.
The <ecretar$ of Babor !a$ include in4or e5clude fro! the above list an$ industr$, fir!, or
co!pan$ as the national interest, national securit$, or general +elfare !a$ re:uire.
?hen Republic Act @(1' took effect and Eeneral Order )o. ' +as repealed, there +as no
!ore listing of industries indispensable to national interest. The labor and e!plo$!ent
secretar$ +as given discretion in deter!ining +hich industries +ould :ualif$ as such. &ut
the discretion cannot be abused. -t is sub,ect to ,udicial revie+.
Fnder Eeneral Order )o. ', the state prohibited the holding of strikes for a stated public
purpose8 a national e!ergenc$ and onl$ in enu!erated industries considered vital to the
ailing econo!$. 7ven the height of martial rule in the country# there was no intention to
provide a blan%et authority to the secretary to assume jurisdiction over labor disputes
without any showing that national interest# national security or general welfare demanded
it.
$olice $ower Re'uires $ublic 3ecessity
After !artial la+ +as lifted and de!ocrac$ +as restored, the assu!ption of ,urisdiction in
Art. 2@"0g2 has no+ been vie+ed as an e5ercise of the police po+er of the state +ith the
ai! of pro!oting the co!!on good. A prolonged strike or lockout can be ini!ical to the
national econo!$.
13
Therefore, it is i!bued +ith public necessit$ and the right of the state
and the public to self*protection. &ut such public necessit$ and need for self*protection are
absent in labor disputes industries not indispensable to national interest. -n the spirit of free
enterprise, it is !ore in keeping +ith national interest to allo+ labor to negotiate +ith
!anage!ent for decent pa$ and hu!ane +orking conditions +ithout intervention fro! the
govern!ent.
3ot 0lways Beneficial to -abor
>ven for labor, it is not al+a$s beneficial to allo+ the secretar$3s intervention in a labor
dispute under Art. 2@". Although the intention !a$ be to find a balance bet+een the
de!ands of labor and the resources of !anage!ent, intervention fro! the state and the
derogation of the right to strike are not al+a$s the solutions to the ,ust de!ands of labor.
%ore often than not, the intervention is !ore to the advantage of !anage!ent, +hich
+ould not incur overhead e5penses that +ould other+ise be +asted during a +ork
stoppage. /or the sa!e reason, it does not necessaril$ follo+ that intervention +orks for
the protection of labor.
Other 0vailable Remedies
>ven +ithout co!pulsor$ arbitration, other re!edies for resolving their labor disputes are
still available to labor and !anage!ent. <triking e!plo$ees can file illegal dis!issal cases
if the$ are dis!issed +ithout cause. On the other hand, !anage!ent can dis!iss
e!plo$ees engaged in illegal strikes, or it can negotiate +ith those involved in legal strikes.
/he .ecretary ound 3o 3ational =nterest
As stated earlier, 1etitioner 1;-%CO is a co!pan$ +hich !anufactures !atches and,
thus, does not :ualif$ as one engaged in an Aindustr$ indispensable to national interest.A
The respondent labor and e!plo$!ent secretar$ ad!its this facts, e5pressl$ declaring that
Athe case at bar appears on its face not to fall +ithin the strict categori6ation of cases
i!bued +ith Anational interest.AA ;e nevertheless assu!ed ,urisdiction over petitioner3s
labor dispute +ith 1;-%CO -ndustries Babor Association 01-BA2, rationali6ing thus8
1=
?hile the case at bar appears on its face not to fall +ithin the strict categori6ation
of cases i!bued +ith Anational interestA, this Office believes that obtaining
circu!stances +arrant the e5ercise of the po+ers under Article 2@"0g2 of the
Babor Code, as a!ended.
/or one, the prolonged +ork disruption has adversel$ affected not onl$ the direct
protagonists, i.e., the +orkers and the Co!pan$, but also those directl$ and
indirectl$ dependent upon the unha!pared and continued operations of the
Co!pan$ for their !eans of livelihood and e5istence. -n addition, the entire
co!!unit$ +here the plant is situated has also been placed in ,eopard$. -f the
dispute at the Co!pan$ re!ains unabated, possible loss of e!plo$!ent, not to
!ention conse:uent social proble!s, !ight result thereb$ co!pounding the
une!plo$!ent proble! of the countr$.
Thus9 +e cannot be un!indful of the possible dire conse:uences that !ight
ensue if the present dispute is allo+ed to re!ain unresolved, particularl$ +hen
an alternative dispute resolution !echanis! obtains to dispose of the differences
bet+een the parties herein.
These e5cuses fail to sho+ ho+ petitioner falls +ithin the categor$ of Aindustries
indispensable to national interest.A The allegation of the public respondent that the A!atch
industr$ like the te5tile or gar!ent industr$ !a$ be classified as e5port*orientedA is
sufficientl$ rebutted b$ petitioner3s si!ple argu!ent pointing out that its e5port is ver$
negligible and +ould not :ualif$ under the definition of Ae5port*oriented industriesA in
<ection 17, &ook D, Rule C--- of the O!nibus Rules -!ple!enting the Babor Code.
15
&esides, such allegation does not appear to be supported b$ the secretar$, +ho in his
assailed Order, found that petitioner3s business +as not an industr$ indispensable to
national interest.
The case at bar is peculiar in the sense that it +as the union 01-BA2, rather than
!anage!ent, that petitioned the secretar$ to assu!e ,urisdiction over the controvers$. -t
appears that 1-BA had lost belief in the efficac$ of its o+n strike and had chosen to seek
refuge in the secretar$3s po+er of co!pulsor$ arbitration. 1etitioner, on the other hand,
:uestions the intervention, obviousl$ because it is not a!enable to accepting all the
returning +orkers, so!e of +ho! +ere dis!issed b$ reason of the strike.
16
The
assu!ption of ,urisdiction !erel$ !uddled the issues.
;o+ true it is that the road to da!nation is paved +ith good intentions. The secretar$3s
intention to reconcile the disputants !a$ have been noble but it does not i!bue the labor
dispute +ith national interest. )either does it clothe hi! +ith po+er to assu!e ,urisdiction
over the case.
?;>R>/OR>, - vote to ERA)T the petition.
G.R. No. :6219 1ay 2:, 1991
GTE DIRECT(RIES C(RP(R-TI(N, petitioner# vs. H(N. -UGUST( S. S-NCHE5 a&'
GTE DIRECT(RIES C(RP(R-TI(N E1P(?EES UNI(N, respondents.
N-R2-S-, J.:p
ET> irectories Corporation 0hereafter, si!pl$ ET>2 is a foreign corporation engaged in
the 1hilippines in the business of publishing the 1BT 01hilippine Bong istance
Telephone Co!pan$2 telephone directories for %etro %anila and several provinces.
The record sho+s that initiall$, the practice +as for its sales representatives to be given
+ork assign!ents +ithin specific territories b$ the so*called Adra+ !ethod.A These sales
territories +ere so plotted or !apped out as to have Aan e:ual nu!ber of advertisers as
+ell as . . . revenue. . .A ?ithin these territories, the sales representatives therein assigned
+ere given :uotas9 i.e., the$ had to Aachieve a certain a!ount of revenue or
advertise!ents sold, decreased, increased or cancelled +ithin a given period of ti!e.A
A territor$ +as not full$ released to the salesperson for handling at one ti!e, but assigned
in incre!ents or partial releases of account. )o+, incre!ents +ere given b$ the so*called
AErid <$ste!,A grids 0divisions or sections2 +ithin each territor$ usuall$ nu!bering five 0i.e.,
Erids - to D2. >ach grid +as assigned a fi5ed closing dated. At such closing date, a
salesperson should have achieved a certain a!ount of the revenue target designated for
his grid9 other+ise, he loses the forthco!ing grid or forfeits the re!aining grids not $et
received. The Erid <$ste! +as installed for the follo+ing reasons8 012 to give all
salespersons an opportunit$ to contact advertisers +ithin a reasonable period9 022 to
assure ET> that it +ill get its share of advertising budget fro! clients as earl$ as possible9
and 0"2 to ensure an even flo+ of +ork throughout the co!pan$.
This practice +as observed fro! 19.0 until so!eti!e in #une, 19.7 +hen ET> reali6ed
that co!petition a!ong !edia for a share of the advertising revenue had beco!e so keen
as to re:uire :uick reaction. ET> therefore launched an aggressive ca!paign to get +hat
it considered to be its rightful share of the advertising budget of its clientele before it could
be allocated to other !edia 0ne+spaper, television, radio, etc.2 -t adopted a ne+ strateg$
b$ +hich8
012 all its sales representatives +ere re:uired, as in the past, to achieve specified revenue
targets 0advertise!ents sold2 +ithin pre*deter!ined periods9
022 in cases of cancelled revenue accounts or advertise!ents, it re:uired all its
salespersons to re*establish contact and rene+ the sa!e +ithin a fi5ed period9
0"2 if the cancelled revenue accounts +ere not rene+ed +ithin the assigned period, said
accounts +ere declared, for a set period, O1>) T>RR-TORN to all sales representatives
including the one +ho reported the cancellation9
072 if not rene+ed during said open territor$ period, said cancelled accounts +ere dee!ed
no longer Aopen territor$,A and the sa!e could be referred for handling to contractual
salespersons and4or outside agencies.
A ne+ A<ales >valuation and 1roduction 1olic$A +as thereafter dra+n up. ET> infor!ed all
its sales representatives of the ne+ polic$ in a %e!orandu! dated October 12, 19.7. The
ne+ polic$ +as regarded as an i!prove!ent over the previous <ales 1roduction 1olic$,
+hich solel$ considered :uota attain!ent and handling in the <ales Report for the purpose
of evaluating perfor!ance.
-t appears that the ne+ polic$ did not sit +ell +ith the union. -t de!anded that it be given
1' da$s Ato raise :uestions or ob,ections to or to seek reconsideration of the sales and
ad!inistrative practices issued b$ the Co!pan$ on #une 17, 19.7.A This, ET> granted,
and b$ letter dated October 2@, 19.7, the union sub!itted its proposals for Arevisions,
corrections and deletions of so!e policies incorporated in the <ales Ad!inistrative
1ractices issued on #une 17, 19.7 including the ne+ policies recentl$ pro!ulgated b$
%anage!ent.A
ET> ne5t for!ulated a ne+ set of A<ales Ad!inistrative 1ractices,A pursuant to +hich it
issued on #ul$ 9, 19.', a !e!orandu! re:uiring all 1re!ise <ales Representatives
01<Rs2 to sub!it individual reports reflecting target revenues as of deadlines, set at
August 2, 19.'. This +as superseded b$ another !e!orandu! dated #ul$ 1@, 19.',
revising the previous schedules on the basis of Athe consensus reached after several
discussions +ith $our <%s, as +ell as, !ost of $ou,A and pointing out that Athe a!ount
re:uired on the 1st deadline 01"0,0002 . . . has been reduced further 0to 120,0002 having
taken into consideration that !ost of $our accounts $ou have alread$ on hand are +ith
$our respective Aprep artistsAA
On August ', 19.', ET>3s <ales %anager sent another %e!orandu! to Aall pre!ise sales
personnel.A That !e!orandu! observed that !ost of the! had o!itted to sub!it reports
regarding Athe target of 120,000.00 revenue handled on . . . 0the2 first Erid deadline of
August 2, 19.'A not+ithstanding that Aseveral consultations4discussions . . . 0had2 been
held +ith $our <%s, as +ell as $ourselves in different and separate occasions,A and
Athese schedules4targets +ere dra+n up b$ no less than $ou, collectivel$,A and
not+ithstanding that Athis has been a practice of several $ears.A -t closed +ith the
e5pressed e5pectation that the sales reports +ould be sub!itted Ano later than 2800 1.%.
reflecting 120,000.00 revenue handled, as per !e!o re8 Erid eadlines dated #ul$ 1@,
19.'.A
&ut as before, the sales representatives did not sub!it the reports. -nstead their union,
ET> irectories Corporation >!plo$ees Fnion 0hereafter, si!pl$ the union2, sent a letter
to the <ales %anager dated August ', 19.'.
1
The letter stated that in fact Aonl$ one out of
nineteen sales representatives !et the 120,000 revenue handled on our first grid deadline
of August 29A that the schedule +as not Adra+n 0up2 as a result of an agree!ent of all
concernedA since ET> had failed to get Aaffir!ative responsesA fro! Aclustered groups of
<Rs9A that the union could not ACo!prehend ho+ cancelling non*cancelling accounts help
production9A and that its !e!bers +ould fail Ae5pectations of cancelling . . . non*cancelling
accountsA since it A+ould result to further reduction of our pa$ +hich 0the$2 believe is the
purpose of $our discri!inate and +hi!sical !e!o.A
The follo+ing da$, on August @, 19.', the union filed in behalf of the sales representatives,
a notice of strike grounded on alleged unfair labor practices of ET> consisting of the
follo+ing8
1. Refusal to bargain on un,ust sales policies particularl$ on the failure
to !eet the ('H of the average sales production for t+o consecutive
$ears9
2. Open territor$ of accounts9
". -llegal suspension of &rian 1ineda, a union officer9 and
7. )on*pa$!ent of eight da$s3 suspension pa$ increase.
-n due course, the &ureau of Babor Relations undertook to conciliate the dispute.
On the sa!e da$, August @, 19.', ET> sent still another !e!orandu! to si5teen 01@2 of
its pre!ise sales representatives, this ti!e through its irector for %arketing L <ales,
re:uiring sub!ission of Aindividual reports reflecting target revenues as of grid deadlines . .
. not later than 7800 1.%. . . .A
2
)o co!pliance +as !ade. ET> thereupon suspended its
sales representatives A+ithout pa$ effective August 12, 19.' for five 0'2 +orking da$sA and
+arned the! that their failure to sub!it the re:uisite reports b$ August 19, 19.' +ould
!erit A!ore drastic disciplinar$ actions.A <till, no sales representative co!plied +ith the
re:uire!ent to sub!it the reports 0Alist of accounts to be cancelledA2. <o, b$ !e!orandu!
of the %arketing irector dated August 19, 19.', all the sales representatives concerned
+ere suspended ane+ Aeffective August 20, 19.' until $ou sub!it the . . . 0report2.A
/inall$, ET> gave its sales representatives an ulti!atu!. &$ !e!orandu! dated August
2", 19.', individuall$ addressed to its sales representatives, ET> re:uired the!, for the
last ti!e, to sub!it the re:uired reports 0Alist of accounts to be cancelledA2 +ithin t+ent$*
four 0272 hours fro! receipt of the !e!orandu!9 other+ise, the$ +ould be ter!inated Afor
cause.A Again not one sales representatives sub!itted a report. -nstead, on August 29,
19.', the Fnion 1resident sent an undated letter to ET> 0addressed to its irector for
%arketing L <ales2 ackno+ledging receipt of the notice of their suspension on August 19,
19.' in vie+ of their Acontinued refusal to sub!it the list of accounts to be cancelled,A
professing surprise at being Aserved +ith a contradictor$ notice, giving us this ti!e 27
hours to sub!it the re:uired list, +ithout the suspension letter, +hich +e consider as still in
force, being first recalled or +ithdra+n,A asking that the$ be infor!ed +hich of the t+o
directives should be follo+ed, and reserving their Aright to take such action against $ou
personall$ for $our acts of harass!ent and inti!idation +hich are clearl$ designed to
discourage our legiti!ate union activities in protesting !anage!ent3s continious 0sic2
unfair labor practices.A
Conse:uentl$, b$ separate letters dated August 29, 19.' individuall$ received, ET>
ter!inated the e!plo$!ent of the recalcitrant sales representatives, nu!bering fourteen,
+ith the undertaking to give the! Aseparation pa$, upon proper clearance and sub!ission
of co!pan$ docu!ents, !aterial etc., in . . . 0their2 possession.A A!ong those dis!issed
+ere the union3s president and third vice president, and several !e!bers of its board of
directors. On <epte!ber 2, 19.', the union declared a strike in +hich about @0 e!plo$ees
participated.
uring all this ti!e, conciliation efforts +ere being e5erted b$ the &ureau of Babor
Relations, including atte!pts to prevent the i!position of sanctions b$ ET> on its
e!plo$ees, and the strike itself. ?hen these proved futile, Acting Babor %inister Dicente
Beogardo, #r. issued an Order dated ece!ber @, 19.' assu!ing ,urisdiction over the
dispute. The order !ade the follo+ing disposition, to +it8
?;>R>/OR>, this Office hereb$ assu!es ,urisdiction over the labor dispute at
E.T.>. irectories, pursuant to Article 2@7 0g2 of the Babor Code of the
1hilippines, as a!ended. Accordingl$, all striking +orkers including those +ho
+ere dis!issed during the conciliation proceedings, e5cept those +ho have
alread$ resigned, are hereb$ directed to return to +ork and the !anage!ent of
E.T.>. irectories to accept all returning e!plo$ees under the sa!e ter!s and
conditions prevailing previous to the strike notice and +ithout pre,udice to the
deter!ination of the obligation and rights of the parties or to the final outco!e of
this dispute. The &ureau of Babor Relations is hereb$ directed to hear the dispute
and sub!it its reco!!endations +ithin 1' da$s upon sub!ission of the case for
resolution.
All concerned including the !ilitar$ and police authorities are hereb$
re:uested to assist in the i!ple!entation of this Order.A
The Acting <ecretar$ opined that the dispute Aadversel$ affects the national interest,A
because8
12 ET>, a A100H foreign o+nedA co!pan$, had, as publisher of A1BT3s %etro %anila and
provincial directories . . . earned a total of 112(,0".,7@" contributing close to 110 !illion in
inco!e ta5 alone to the 1hilippine govern!ent,A and that A!a,or contribution to the national
econo!$ . . . 0+as2 being threatened because of the strike9A and
22 Atop officers of the union +ere dis!issed during the conciliation process thereb$
co!pounding the dispute,A
Reconsideration of this Order +as sought b$ ET> b$ !otion filed on ece!ber 1@, 19.',
on the ground that=
12 Athe basis for assu!ption of ,urisdiction is belied b$ the facts and records of
the case and hence, un+arranted9A
22 Anational interest is not adversel$ affected to +arrant assu!ption of ,urisdiction
b$ 0the2 Office of the %inister of Babor and >!plo$!ent9A and
"2 Aassu!ption of ,urisdiction b$ the . . . %inister . . . +ithout prior consultation
+ith the parties violates the co!pan$3s right to due process of la+.A
ET> ho+ever reiterated its previousl$ declared Aposition that +ith or +ithout the order no+
being :uestioned, it +ill accept all striking e!plo$ees back to +ork e5cept the fourteen 0172
pre!ise sales representatives +ho +ere dis!issed for cause prior to the strike.A
&$ Resolution of then Babor %inister &las Ople dated #anuar$ 20, 19.@, ET>3s !otion for
reconsideration +as denied. The order noted inter alia that ET> had Aaccepted back to
+ork all the returning +orkers e5cept fourteen 0172 +ho! it previousl$ dis!issed insisting
that the$ +ere legall$ dis!issed for violation of co!pan$ rules and, therefore, are not
included and !a$ not be reinstated on the basis of a return*to*+ork order,A and that Athe$
+ere dis!issed for their alleged failure to co!pl$ +ith the reportorial re:uire!ent under the
<ales and Ad!inistrative 1ractices in effect since 19.1 but +hich for the present is the
sub,ect of negotiations bet+een the parties.A The Order then =
12 adverted to the Ageneral rule 0that2 pro!ulgations of co!pan$ policies and regulations
are basic !anage!ent prerogatives although the principle of collective bargaining
enco!passes al!ost all relations bet+een the e!plo$er and its e!plo$ees +hich are best
threshed out through negotiations, . . . 0and that2 it is recogni6ed that co!pan$ policies and
regulations are, unless sho+n to be grossl$ oppressive or contrar$ to la+, generall$
binding and valid on the parties until finall$ revised or a!ended unilaterall$ or preferabl$
through negotiations or b$ co!petent authorities9A
22 affir!ed the Arecogni6ed principle of la+ that co!pan$ policies and regulations are,
unless sho+n to be grossl$ oppressive or contrar$ to la+, generall$ binding 0and2 valid on
the parties and !ust be co!plied +ith until finall$ revised or a!ended unilaterall$ or
preferabl$ through negotiations or b$ co!petent authorities9A and
"2 closed b$ pointing out that Aas a basic principle, the !atter of the acceptabilit$ of
co!pan$ policies and rules is a proper sub,ect of collective negotiations bet+een the
parties or arbitration if necessar$.A
-n a clarificator$ Order dated #anuar$ 21, 19.@, %inister Ople reiterated the proposition
that Apro!ulgations of co!pan$ policies and regulations are basic !anage!ent
prerogatives,A and that Aunless sho+n to be grossl$ oppressive or contrar$ to la+,A the$
are Agenerall$ binding and valid on the parties and !ust be co!plied +ith until finall$
revised or a!ended unilaterall$ or preferabl$, through negotiations or b$ co!petent
authorities.A
Ad,udication of the dispute on the !erits +as !ade on %arch "1, 19.@ b$ Order of
%inister Ople3s successor, Augusto <anche6. The Order =
12 pointed out Athat the issue central to the labor dispute revolves around co!pliance +ith
e5isting co!pan$ policies, rules and regulations specificall$ the sales evaluation and
production polic$ +hich +as a!ended b$ the October 12, 19.7 !e!orandu! and the grid
schedule9A
22 declared that because fourteen 0172 sales representatives = +ho after reinstate!ent
pursuant to the order of #anuar$ 20, 19.@ had been placed Aon forced leave +ith pa$
=A+ere actuall$ dis!issed for failure to co!pl$ +ith the reporting re:uire!ents under the
A<ales Ad!inistration 1racticesA +hich +as 0sic2 then the sub,ect of negotiations bet+een
the parties at the &ureau of Babor Relations,A it +as onl$ fair that the$ 3be reinstated . .
.+ith back +ages since the$ +ere ter!inated fro! e!plo$!ent based on a polic$ . . . still
being negotiated to avoid precisel$ a labor*!anage!ent dispute fro! arisingA therefro!9A
"2 pronounced the union3s action relative to the allegedl$ illegal dis!issal of one &rian
1ineda to be Abarred b$ e5tinctive prescriptionA in accordance +ith the C&A then in force9
and
72 on the foregoing pre!ises ad,udicated the dispute as follo+s8
1. The union and !anage!ent of E.T.>. irectories Corporation are directed to
negotiate and effect a voluntar$ settle!ent on the :uestioned Erid schedule, the
<ales >valuation and 1roduction 1olic$9
2. %anage!ent is ordered to reinstate the fourteen 0172 e!plo$ees +ith full back
+ages fro! the ti!e the$ +ere dis!issed up to the ti!e that the$ +ere on forced
leave +ith pa$.A
&oth the Fnion and ET> !oved for reconsideration of the Order.
The Fnion contended that8
12 ET> should have been ad,udged guilt$ of unfair labor practice and other unla+ful acts9
22 its strike should have been declared la+ful9
"2 ET>3s so*called Abotto!*thirdA polic$, as +ell as all sales and ad!inistrative practices
related thereto, should have been held illegal9 and
72 ET> should have been co!!anded8 0a2 to pa$ all striking e!plo$ees their usual
salaries, allo+ances, co!!ission and other e!olu!ents corresponding to the period of
their strike9 0b2 to release to its e!plo$ees the .*da$s pa$ increase unla+full$ +ithheld
fro! the!9 0c2 to lift the suspension i!posed on &rian 1ineda and restore to hi! the pa$
+ithheld corresponding to the suspension period9 0d2 to pa$ the sales representatives all
their lost inco!e corresponding to the period of their suspensions, and dis!issal, including
co!!issions that the$ !ight have earned corresponding to their one*+eek forced leave.
ET> for its part, argued that the ter!ination of the e!plo$!ent of its fourteen 0172 pre!ise
sales representatives prior to the strike should have been upheld. -t also filed an opposition
to the union3s !otion for reconsideration.
The !otions +ere resolved in a AecisionA handed do+n b$ %inister <anche6 on #une @,
19.@. The %inister stated that he sa+ no need to change his rulings as regards 1ineda3s
suspension, the :uestion on ET>3s sales and ad!inistrative policies, and the !atter of
back +ages. ;o+ever, as regards Athe other issues raised b$ the union,A the %inister
agreed A+ith the co!pan$ that these +ere not ade:uatel$ threshed out in the earlier
proceedings . . . 0for2 0+2hile it is true that the union had alread$ presented evidence to
support its contention, the co!pan$ should be given the opportunit$ to present its o+n
evidence.A Accordingl$, he directed the &ureau of Babor Relations to hear said Aother
issues raised b$ the union and to sub!it its findings and reco!!endations thereon +ithin
20 da$s fro! sub!ission of the case for decision.A
Again ET> !oved for reconsideration9 again it +as rebuffed. The Babor %inister denied its
!otion b$ Order dated October 1, 19.@. -n that order, the %inister, a!ong other things=
12 invoked <ection @, Rule C--- of the Rules and Regulations -!ple!enting the Babor
Code, pertinentl$ reading as follo+s8
uring the proceedings, the parties shall not do an$ act +hich !a$ disrupt or
i!pede the earl$ settle!ent of the dispute. The$ are obliged, as part of their dut$
to bargain collectivel$ in good faith, to participate full$ and pro!ptl$ in the
conciliation proceedings called b$ the &ureau or the Regional Office.
and pointed out that Ain dis!issing 17 sales!en . . . for alleged violations of the reportorial
re:uire!ents of its sales policies +hich +as then the sub,ect of conciliation proceedings
bet+een the!, 0ET>2 acted evidentl$ in bad faith9 hence the status 'uo prior to their
dis!issal !ust be restored . . . 0and2 their reinstate!ent +ith back+ages is in order up to
the ti!e the$ +ere on forced leave. . . 9A
22 declared that because he had Aordered the parties to negotiate and effect a voluntar$
settle!ent of the :uestioned Erid <chedule, the <ales >valuation and 1roductions 1olic$,
it +ould be unripe and pre!ature for us to rule on the legalit$ or illegalit$ on the co!pan$3s
sales policies at this instance9A
"2 opted, ho+ever, to hi!self resolve Athe so*called 3other issuesA3 +hich he had earlier
directed the &ureau of Babor Relations to first hear and resolve 0in the ecision of #une @,
19.@, supra2, i.e., ET>3s liabilit$ for unfair labor practice, the legalit$ of the strike and the
strikers3 right to be paid their +ages +hile on strike, his ruling thereon being as follo+s8
?hile the co!pan$, in !erel$ i!ple!enting its challenged sales policies did not
ipso facto co!!it an unfair labor practice, it did so +hen it in mala fide dis!issed
the fourteen sales!en, all union !e!bers, +hile conciliation proceedings +ere
being conducted on disputes on its ver$ sa!e policies, especiall$ at that ti!e
+hen a strike notice +as filed on the co!plaint of the union alleging that said
sales policies are being used to bust the union9 thus precipitating a la+ful strike
on the part of the latter. A strike is legal if it +as provoked b$ the e!plo$er3s
failure to abide b$ the ter!s and conditions of its collective bargaining agree!ent
+ith the union, b$ the discri!ination e!plo$ed b$ it +ith regard to the hire and
tenure of e!plo$!ent, and the dis!issal of e!plo$ees due to union activities as
+ell as the co!pan$3s refusal to bargain collectivel$ in good faith 0Cro!+ell
Co!!ercial Co., -nc. vs. Cro!+ell >!plo$ees and Baborers Fnion, 19 <CRA
"9.2. The sa!e rule applies if e!plo$er +as guilt$ of bad faith dela$ in
reinstating the! to their position 0RC1- vs. 1hil. Co!!unications >lectronics L
>lectricit$ ?orkers /ederation, '. <CRA (@22.
?hile as a rule strikers are not entitled to backpa$ for the strike period 0#.1.
;eilbronn Co. vs. )BF, 92 1hil. '('2 strikers !a$ be properl$ a+arded
back+ages +here the strike +as precipitated b$ union busting activities of the
e!plo$er 0avao /ree ?orkers, /ront, et al. vs, C-R, @0 <CRA 70.2, as in the
case at bar. . . .
The %inister accordingl$ annulled and set aside his order for the &ureau of Babor
Relations to conduct hearings on said issues since he had alread$ resolved the!, and
affir!ed his Order of %arch "1, 19.@=Adirecting Fnion and %anage!ent to negotiate a
voluntar$ settle!ent on the co!pan$ sales policies and reinstating the fourteen e!plo$ees
+ith full back+ages fro! the ti!e the$ +ere dis!issed up to the ti!e the$ +ere on forced
leave +ith pa$A = Abut +ith the !odification that !anage!ent . . . 0+as2 directed to give
the striking +orkers strike duration pa$ for the +hole period of the strike less earnings.A
ET> thereupon instituted the special civil action of certiorari at bar pra$ing for invalidation,
because rendered +ith grave abuse of discretion, of the Babor %inister3s orders=
12 co!!anding Areinstate!ent of the fourteen dis!issed e!plo$ees, and
22 Afinding . . . 0it2 guilt$ of unfair labor practice and directing 0it2 to pa$ strike duration pa$
to striking +orkers.A
-t see!s to the Court that upon the undisputed facts on record, ET> had cause to dis!iss
the fourteen 0172 pre!ise sales representatives +ho had repeatedl$ and deliberatel$, not
to sa$ defiantl$, refused to co!pl$ +ith its directive for sub!ission of individual reports on
specified !atters. The record sho+s that ET> addressed no less than 0si52 +ritten official
co!!unications to said pre!ise sales representatives e!bod$ing this re:uire!ent, to +it8
12 %e!orandu! of #ul$ 9, 19.' pursuant to ET>3s A<ales Ad!inistrative 1racticesA =
superseded b$ a !e!orandu! dated #ul$ 1@, 19. = re:uiring sub!ission of individual
reports b$ August 2, 19.'9
22 %e!orandu! of August ', 19.', re:uiring sub!ission of the reports b$ 2800 1.%.9
"2 %e!orandu! of August @, 19.', for sub!ission of re:uisite reports not later than 7800
1.%. of that da$, +ith a +arning of Aappropriate disciplinar$ action9A
72 Better of August 9, 19.' i!posing suspension +ithout pa$ for five 0'2 +orking da$s and
e5tending the period for sub!ission of reports to August 19, 19.'9
'2 Better of August 19, 19.' suspending the sales representatives until their sub!ission of
the re:uired reports9
@2 Better dated August 2., 19.' giving the sales representatives Aa last chance to co!pl$
+ith . . . 0the2 directive +ithin 27 hours fro! receipt . . .9A +ith +arning that failure to co!pl$
+ould result in ter!ination of e!plo$!ent.
The onl$ response of the sales representatives to these for!al directives +ere8
12 a letter b$ their Fnion to ET>3s <ales %anager dated August ', 19.' in +hich the
re:uire!ent +as critici6ed as not being the Aresult of an agree!ent of all concerned,A and
as inco!prehensible, Adiscri!inate and +hi!sical9A
22 a strike notice filed +ith the %inistr$ of Babor on August @, 19.'9 and
"2 an undated letter sent to ET>3s irector for %arketing L <ales on August 29, 19.',
dra+ing attention to +hat it dee!ed contradictor$ directives, and reserving the right to take
action against the !anager for Aacts of harass!ent and inti!idation . . . clearl$ designed to
discourage our legiti!ate union activities in protesting !anage!ent3s continuous unfair
labor practices.A
The basic :uestion then is +hether or not the effectivit$ of an e!plo$er3s regulations and
policies is dependent upon the acceptance and consent of the e!plo$ees thereb$ sought
to be bound9 or other+ise stated, +hether or not the union3s ob,ections to, or re:uest for
reconsideration of those regulations or policies auto!aticall$ suspend enforce!ent thereof
and e5cuse the e!plo$ees3 refusal to co!pl$ +ith the sa!e.
This Court has alread$ had occasion to rule upon a si!ilar issue. The issue +as raised in a
19.9 case, E.R. )o. '"'1', .an 4iguel Brewery .ales orce 5nion ($/,!O" v. Ople.
3
-n that case, the facts +ere briefl$ as follo+s8
-n <epte!ber 19(9, the co!pan$ introduced a !arketing sche!e kno+n as the
ACo!ple!entar$ distribution s$ste!A 0C<2 +hereb$ its beer products +ere
offered for sale directl$ to +holesalers through <an %iguel3s sales offices.
The labor union 0herein petitioner2 filed a co!plaint for unfair labor practice in the
%inistr$ of Babor, +ith a notice of strike on the ground that the C< +as contrar$
to the e5isting !arketing sche!e +hereb$ the Route <ales!en +ere assigned
specific territories +ithin +hich to sell their stocks of beer, and +holesalers had to
bu$ beer products fro! the!, not fro! the co!pan$. -t +as alleged that the ne+
!arketing sche!e violates . . . 0a provision2 of the collective bargaining
agree!ent because the introduction of the C< +ould reduce the take*ho!e pa$
of the sales!en and their truck helpers for the co!pan$ +ould be unfairl$
co!peting +ith the!.A
The Babor %inister found nothing to suggest that the e!plo$er3s unilateral action of
inaugurating a ne+ sales sche!e A+as designed to discourage union organi6ation or
di!inish its influence9A that on the contrar$, it +as Apart of its overall plan to i!prove
efficienc$ and econo!$ and at the sa!e ti!e gain profit to the highest9A that the union3s
Acon,ecture that the ne+ plan +ill so+ dissatisfaction fro! its rank is alread$ a pre,udg!ent
of the plan3s viabilit$ and effectiveness, . . . like sa$ing that the plan +ill not +ork out to the
+orkers3 0benefit2 and therefore !anage!ent !ust adopt a ne+ s$ste! of !arketing.A The
%inister accordingl$ dis!issed the strike notice, although he ordered a slight revision of
the C< +hich the e!plo$er evidentl$ found acceptable.
This Court approved of the %inister3s findings, and declared correct his holding that the
C< +as Aa valid e5ercise of !anage!ent prerogatives,A
=
vi&.8
7xcept as limited by special laws, an employer is free to regulate, according to
his own discretion and judgment, all aspects of employment, including hiring,
+ork assign!ents, +orking !ethods, ti!e, place and !anner of +ork, tools to be
used, processes to be followed, supervision of +orkers, +orking regulations,
transfer of e!plo$ees, +ork supervision, la$*off of +orkers and the discipline,
dis!issal and recall of +ork. . . . 0)BF vs. -nsular Ba Nebana Co., 2 <CRA 9279
Republic <avings &ank vs. C-R, 21 <CRA 22@, 2"'.2 01erfecto D. ;ernande6,
Babor Relations Ba+, 19.' ed., p. 77.2 0>!phasis ours.2
The Court then closed its decision +ith the follo+ing pronounce!ents8
5
>ver$ business enterprise endeavors to increase its profits. -n the process, it !a$
adopt or devise !eans designed to+ards that goal. -n 0bbott -aboratories vs.
3-R*, 1'7 <CRA (1", ?e ruled8
. . . >ven as the la+ is solicitous of the +elfare of the e!plo$ees, it
!ust also protect the right of an e!plo$er to e5ercise +hat are clearl$
!anage!ent prerogatives. The free +ill of !anage!ent to conduct its
o+n business affairs to achieve its purpose cannot be denied.
<o long as a co!pan$3s !anage!ent prerogatives are e5ercised in good faith for
the advance!ent of the e!plo$er3s interest and not for the purpose of defeating
or circu!venting the rights of the e!plo$ees under special la+s or under valid
agree!ents, this Court +ill uphold the! 0BD), 1ictures ?orkers vs. BD), "'
<CRA 17(9 1hil. A!erican >!broideries vs. >!broider$ and Ear!ents ?orkers,
2@ <CRA @"79 1hil. Refining Co. vs. Earcia, 1. <CRA 1102. . . .
-n the case at bar, it !ust thus be conceded that its adoption of a ne+ A<ales >valuation
and 1roduction 1olic$A +as +ithin its !anage!ent prerogative to regulate, according to its
o+n discretion and ,udg!ent, all aspects of e!plo$!ent, including the !anner, procedure
and processes b$ +hich particular +ork activities should be done. There +ere, to be sure,
ob,ections presented b$ the union, i.e., that the schedule had not been Adra+n 0up2 as a
result of an agree!ent of all concerned,A that the ne+ polic$ +as inco!prehensible,
discri!inator$ and +hi!sical, and A+ould result to further reductionA of the sales
representatives3 co!pensation. There +as, too, the union3s accusation that ET> had
co!!itted unfair labor practices, such as=
1. Refusal to bargain on un,ust sales policies particularl$ on the failure to !eet
the ('H of the average sales production for t+o consecutive $ears9
2. Open territor$ of accounts9
". -llegal suspension of &rian 1ineda, a union officer9 and
7. )on*pa$!ent of eight da$s3 suspension pa$ increase.
This Court fails to see, ho+ever, ho+ these ob,ections and accusations ,ustif$ the
deliberate and obdurate refusal of the sales representatives to obe$ the !anage!ent3s
si!ple re:uire!ent for sub!ission b$ all 1re!ise <ales Representatives 01<Rs2 of
individual reports or !e!oranda re:uiring reflecting target revenues=+hich is all that ET>
basicall$ re:uired = and +hich it addressed to the e!plo$ees concerned no less than si5
0@2 ti!es. The Court fails to see ho+ the e5istence of ob,ections !ade b$ the union ,ustif$
the studied disregard, or +ilful disobedience b$ the sales representatives of direct orders of
their superior officers to sub!it reports. <urel$, co!pliance +ith their superiors3 directives
could not have foreclosed their de!ands for the revocation or revision of the ne+ sales
policies or rules9 there +as nothing to prevent the! fro! sub!itting the re:uisite reports
+ith the reservation to seek such revocation or revision.
To sanction disregard or disobedience b$ e!plo$ees of a rule or order laid do+n b$
!anage!ent, on the pleaded theor$ that the rule or order is unreasonable, illegal, or
other+ise irregular for one reason or another, +ould be disastrous to the discipline and
order that it is in the interest of both the e!plo$er and his e!plo$ees to preserve and
!aintain in the +orking establish!ent and +ithout +hich no !eaningful operation and
progress is possible. eliberate disregard or disobedience of rules, defiance of
!anage!ent authorit$ cannot be countenanced. This is not to sa$ that the e!plo$ees
have no re!ed$ against rules or orders the$ regard as un,ust or illegal. The$ !a$ ob,ect
thereto, ask to negotiate thereon, bring proceedings for redress against the e!plo$er
before the %inistr$ of Babor. &ut until and Fnless the rules or orders are declared to be
illegal or i!proper b$ co!petent authorit$, the e!plo$ees ignore or disobe$ the! at their
peril. -t is i!per!issible to reverse the process8 suspend enforce!ent of the orders or rules
until their legalit$ or propriet$ shall have been sub,ect of negotiation, conciliation, or
arbitration.
These propositions +ere in fact adverted to in relation to the dispute in :uestion b$ then
%inister &las Ople in his Order dated #anuar$ 21, 19.@, to the effect a!ong others, that
Apro!ulgations of co!pan$ policies and regulations are basic !anage!ent prerogativesA
and that it is a Arecogni6ed principle of la+ that co!pan$ policies and regulations are,
unless sho+n to be grossl$ oppressive or contrar$ to la+, generall$ binding 0and2 valid on
the parties and !ust be co!plied +ith until finall$ revised or a!ended unilaterall$ or
preferabl$ through negotiations or b$ co!petent authorities.A
%inister <anche6 ho+ever found ET> to have Aacted evidentl$ in bad faithA in firing its 17
salespersons Afor alleged violations of the reportorial re:uire!ents of its sales policies
+hich +as then the sub,ect of conciliation proceedings bet+een the!9A
6
and that A0+2hile
the co!pan$, in !erel$ i!ple!enting its challenged sales policies did not ipso facto
co!!it an unfair labor practice, it did so +hen it in mala fide dis!issed the fourteen
sales!en, all union !e!bers, +hile conciliation proceedings +ere being conducted on
disputes on its ver$ sa!e policies, especiall$ at that ti!e +hen a strike notice +as filed on
the co!plaint of the union alleging that said sales policies are being used to bust the
union9 thus precipitating a la+ful strike on the part of the latter.A )o other facts appear on
record relevant to the issue of ET>3s dis!issal of the 17 sales representatives. There is no
proof on record to de!onstrate an$ underhanded !otive on the part of ET> in for!ulating
and i!posing the sales policies in :uestion, or re:uiring the sub!ission of reports in line
there+ith. ?hat, in fine, appears to be the %inister3s thesis is that an e!plo$er has the
prerogative to la$ do+n basic policies and rules applicable to its e!plo$ees, but !a$ not
e5act co!pliance there+ith, !uch less i!pose sanctions on e!plo$ees sho+n to have
violated the!, the !o!ent the propriet$ or feasibilit$ of those policies and rules, or their
!otivation, is challenged b$ the e!plo$ees and the latter file a strike notice +ith the Babor
epart!ent = +hich is the situation in the case at bar.
?hen the strike notice +as filed b$ the union, the chain of events +hich cul!inated in the
ter!ination of the 17 sales persons3 e!plo$!ent +as alread$ taking place, the series of
defiant refusals b$ said sales representatives to co!pl$ +ith ET>3s re:uire!ent to sub!it
individual reports +as alread$ in progress. At that ti!e, no less than three 0"2 of the
ulti!ate si5 0@2 direct orders of the e!plo$er for the sub!ission of the reports had alread$
been disobe$ed. The filing of the strike notice, and the co!!ence!ent of conciliation
activities b$ the &ureau of Babor Relations did not operate to !ake ET>3s orders illegal or
unenforceable so as to e5cuse continued non*co!pliance there+ith. -t does not follo+ that
,ust because the e!plo$ees or their union are unable to reali6e or appreciate the
desirabilit$ of their e!plo$ers3 policies or rules, the latter +ere laid do+n to oppress the
for!er and subvert legiti!ate union activities. -ndeed, the overt, direct, deliberate and
continued defiance and disregard b$ the e!plo$ees of the authorit$ of their e!plo$er left
the latter +ith no alternative e5cept to i!pose sanctions. The sanction of suspension
having proved futile, ter!ination of e!plo$!ent +as the onl$ option left to the e!plo$er.
To repeat, it +ould be dangerous doctrine indeed to allo+ e!plo$ees to refuse to co!pl$
+ith rules and regulations, policies and procedures laid do+n b$ their e!plo$er b$ the
si!ple e5pedient of for!all$ challenging their reasonableness or the !otives +hich
inspired the!, or filing a strike notice +ith the epart!ent of Babor and >!plo$!ent, or,
+hat a!ounts to the sa!e thing, to give the e!plo$ees the po+er to suspend co!pliance
+ith co!pan$ rules or policies b$ re:uesting that the$ be first sub,ect of collective
bargaining, -t +ould be +ell nigh i!possible under these circu!stances for an$ e!plo$er
to !aintain discipline in its establish!ent. This is, of course, intolerable. /or co!!on
sense teaches, as %r. #ustice Eregorio 1erfecto once had occasion to stress
:
that8
<uccess of industries and public services is the foundation upon +hich ,ust
+ages !a$ be paid. There cannot be success +ithout efficienc$. There cannot
be efficienc$ +ithout discipline. Conse:uentl$, +hen e!plo$ees and laborers
violate the rules of discipline the$ ,eopardi6e not onl$ the interest of the e!plo$er
but also their o+n. -n violating the rules of discipline the$ ai! at killing the hen
that la$s the golden eggs. Baborers +ho tra!ple do+n the rules set for an
efficient service are, in effect, parties to a conspirac$, not onl$ against capital but
also against labor. The high interest of societ$ and of the individuals de!and that
+e should re:uire ever$bod$ to do his dut$. That de!and is addressed not onl$
to e!plo$er but also to e!plo$ees.
%inister <anche6 decided the dispute in the e5ercise of the ,urisdiction assu!ed b$ his
predecessor in accordance +ith Article 2@" 0g2 of the Babor Code,
8
providing in part as
follo+s8
0g2 ?hen in his opinion there e5ists a labor dispute causing or likel$ to cause
strikes or lockouts adversel$ affecting the national interest, such as !a$ occur in
but not li!ited to public utilities, co!panies engaged in the generation or
distribution of energ$, banks, hospitals, and e5port*oriented industries, including
those +ithin e5port processing 6ones, the %inister of Babor and >!plo$!ent
shall assu!e ,urisdiction over the dispute and decide it or certif$ the sa!e to the
Co!!ission for co!pulsor$ arbitration. . . .
>ven that assu!ption of ,urisdiction is open to :uestion.
The production and publication of telephone directories, +hich is the principal activit$ of
ET>, can scarcel$ be described as an industr$ affecting the national interest. ET> is a
publishing fir! chiefl$ dependent on the !arketing and sale of advertising space for its not
inconsiderable revenues. -ts services, +hile of value, cannot be dee!ed to be in the sa!e
categor$ of such essential activities as Athe generation or distribution of energ$A or those
undertaken b$ Abanks, hospitals, and e5port*oriented industries.A -t cannot be regarded as
pla$ing as vital a role in co!!unication as other !ass !edia. The s!all nu!ber of
e!plo$ees involved in the dispute, the e!plo$er3s pa$!ent of A110 !illion in inco!e ta5
alone to the 1hilippine govern!ent,A and the fact that the Atop officers of the union +ere
dis!issed during the conciliation process,A obviousl$ do not suffice to !ake the dispute in
the case at bar one Aadversel$ affecting the national interest.A
?;>R>/OR>, the petition is ERA)T>, and as pra$ed for, the Order dated October 1,
19.@ of the public respondent is )FBB-/-> and <>T A<->.
<O OR>R>.
,ancayco# ,ri>o90'uino and 4edialdea# ++.# concur.
*ru&# +.# too% no part.
G.R. No. 1>18:5 0u+y 1=, 1995
C-SI-N( -. N-2-RR( III, petitioner, vs. H(N. ISR-E D. D-1-SC(, "& 9"$ %a@a%"#y
a$ 2(UNT-R? -R3ITR-T(R, a&' 3USC( SUG-R 1IING C(., INC., respondents.
AUI-S(N, J.:
This is a petition for certiorari to reverse the ecision dated August 1@, 1991 of the
Doluntar$ Arbitrator, respondent -srael . a!asco, declaring as valid the separation fro!
e!plo$!ent of petitioner.
?e dis!iss the petition.
-
1etitioner +as e!plo$ed as t$pist of private respondent at its plant in Kue6on, &ukidnon.
At about '800 1.%. of )ove!ber 2(, 1990, petitioner +ent to visit %erc$ &a$las, a co*
e!plo$ee, at the ladies3 dor!itor$ inside the co!pound of private respondent. Fpon
seeing petitioner, &a$las hid behind the divider at the reception roo!. Rose!arie &asa
and -sabel &eleno, co*boarders of &a$las, told petitioner that &a$las +as not at the
dor!itor$ and advised hi! to stop courting her because she had no feelings to+ards hi!.
After+ards, the t+o left leaving petitioner alone in the roo!. ?hen he peeped behind the
divider, he sa+ &a$las, +ho stood up +ithout ans+ering his greetings and ran to+ards her
roo!. ;e follo+ed, and after taking hold of her left hand, pulled her to+ards hi!. The force
caused her to fall on the floor. ;e then placed hi!self on top of her. <he resisted and
futilel$ struggled to free herself fro! his grasp. <onia Ar!ada, the dor!itor$ housekeeper,
responded to &a$las3 shouts for help. Ar!ada sa+ petitioner e!bracing and kissing
&a$las. <he tried to separate petitioner fro! &a$las but to no avail. <o she +ent outside
and asked &asa and &eleno to help &a$las. <he also asked the help of >d!undo <ubong.
&asa and &eleno tried to pull petitioner a+a$ fro! &a$las, but it +as <ubong +ho +as able
to free &a$las fro! petitioner.
According to the !edical report issued b$ r. Betecia 1. %araat, &a$las co!plained of
pains on her shoulder and left foot.
On ece!ber ', 1990, petitioner +as infor!ed of the co!plaint against hi! and +as
placed under preventive suspension. )olito <. ensing, #r. +as instructed to investigate
the incident. -n his report dated ece!ber 2@, 1990, ensing reco!!ended that the
!a5i!u! penalt$ be !eted out against petitioner. On #anuar$ ', 1991, petitioner +as
dis!issed fro! the service for having violated paragraph ".& 0Conduct and &ehavior2 of
the Code of >!plo$ee iscipline, +hich provides8
1. -nflicting or atte!pting to inflict bodil$ in,ur$, in an$ for!, on fello+ e!plo$ee,
+ith a penalt$ of dis!issal.
2. -!!oral conduct +ithin co!pan$ pre!ises, regardless of +hether or not
co!!itted during +orking ti!e, punishable b$ repri!and to dis!issal, depending
on the pre,udice caused b$ such act to the co!pan$.
". -!proper conduct and acts of gross discourtes$ or disrespect to fello+
e!plo$ees at an$ ti!e +ithin the co!pan$ pre!ises punishable b$ repri!and to
dis!issal, depending on the gravit$ of the offense.
7. Ono+ingl$ giving false or untruthful state!ents or concealing !aterial facts in
an investigation conducted b$ authori6ed representative of the co!pan$,
punishable b$ dis!issal 0 Rollo, pp. 7(*7.2.
On %arch 1., 1991, the 1resident of the %indanao <ugar ?orkers Fnion, for and in behalf
of petitioner, and #ai!e #. #avier, 1ersonnel Officer of private respondent, agreed to
sub!it the case of petitioner to voluntar$ arbitration.
At the initial conference on %arch 2(, 1991, petitioner, represented b$ his counsel, agreed
to li!it the issues to be sub!itted to the Doluntar$ Arbitrator to the follo+ing8
1. ?hether or not the grievance procedure in the C&A for bringing a case before
the Doluntar$ Arbitrator had been follo+ed9
2. ?hether petitioner3s dis!issal +as legal9 and
". ?ho +as the co!plainant insofar as the grievance procedure under the C&A
+as concerned 0 Rollo, p. 17(2.
The parties also agreed to sub!it the case for decision based on their position papers.
On August 1@, 1991, a decision +as rendered b$ the Doluntar$ Arbitrator dis!issing
petitioner fro! his e!plo$!ent and holding that private respondent did not violate the
provisions of the grievance procedure under the Collective &argaining Agree!ent.
)ot satisfied +ith the decision, petitioner filed the instant petition.
--
According to petitioner3s version, &a$las +as his girlfriend, +ho! he visited at the ladies3
dor!itor$ in the afternoon of )ove!ber 2(, 1990. At the dor!itor$, petitioner sa+
Rose!arie &asa +ho told hi! that &a$las +as not around. To prove that &asa +as l$ing,
he peeped behind the divider and sa+ &a$las hiding there. ?hen &a$las ran to+ards her
roo!, petitioner follo+ed her. ?hile running, &a$las lost her balance and fell do+n.
;o+ever, petitioner got hold of her to prevent her fro! hitting the floor and to help her to
her feet. ;e denied having kissed and e!braced her. ;e ad!itted that <ubong arrived and
pulled hi! a+a$ fro! &a$las. ;e also ad!itted that he voluntaril$ surrendered to the
securit$ guards.
---
1etitioner contends that the grievance procedure provided for in the Collective &argaining
Agree!ent +as not follo+ed9 hence, the Doluntar$ Arbitrator e5ceeded his authorit$ +hen
he took cogni6ance of the labor case.
<ection 2, Article C of the Collective &argaining Agree!ent specifies the instances +hen
the grievance !achiner$ !a$ be availed of, thus8
An$ protest or !isunderstanding concerning an$ ruling, practice or +orking
conditions in the Co!pan$, or an$ dispute arising as to the !eaning, application
or clai! of violation of an$ provision of this Agree!ent or an$ co!plaint that an$
e!plo$ee !a$ have against the CO%1A)N shall constitute a grievance 0 Rollo,
p. 2(2.
The instant case is not a grievance that !ust be sub!itted to the grievance !achiner$.
?hat are sub,ect of the grievance procedure for ad,ust!ent and resolution are grievances
arising fro! the interpretation or i!ple!entation of the collective bargaining agree!ent
0Babor Code of the 1hilippines, as a!ended b$ R.A. )o. @(1', Art. 2@02.
The acts of petitioner involved a violation of the Code of >!plo$ee iscipline, particularl$
the provision penali6ing the i!!oral conduct of e!plo$ees. Conse:uentl$, there +as no
,ustification for petitioner to invoke the grievance !achiner$ provisions of the Collective
&argaining Agree!ent 0Au5ilio, #r. v. )ational Babor Relations Co!!ission, 1.. <CRA
2@" I1990J2.
The case of petitioner +as sub!itted to voluntar$ arbitration b$ agree!ent of the president
of the labor union to +hich petitioner belongs, and his e!plo$er, through its personnel
officer. 1etitioner hi!self voluntaril$ sub!itted to the ,urisdiction of the Doluntar$ Arbitrator
+hen he, through his counsel, filed his position paper +ith the Doluntar$ Arbitrator and
even sub!itted additional docu!entar$ evidence. -n addition thereto, during the initial
conference on %arch 2(, 1991, the parties !anifested that the$ +ere not :uestioning the
authorit$ of the Doluntar$ Arbitrator.
-t is the polic$ of the <tate to pro!ote voluntar$ arbitration as a !ode of settling labor
disputes 0%anguiat, %echanis!s of Doluntar$ Arbitration in Babor isputes 2*@ I19(.J2.
1etitioner clai!s that he +as denied due process of la+ because no hearing +as held and
he +as not given an opportunit$ to cross*e5a!ine the +itnesses.
?e held in .tayfast $hilippines *orp. v. 3ational -abor Relation *ommission, 21. <CRA
'9@ 0199"2 that8
The essence of due process is si!pl$ an opportunit$ to be heard, or as applied
to ad!inistrative proceedings, an opportunit$ to e5plain one3s side or an
opportunit$ to seek a reconsideration of the action or ruling co!plained of.
A for!al or trial*t$pe hearing is not at all ti!es and in all instances essential. The
re:uire!ents are satisfied +here the parties are fair and reasonable opportunit$
to e5plain their side of the controvers$ at hand. ?hat is fro+ned upon is the
absolute lack of notice and hearing. . . . 0at p. @012.
Concerning the allegation that petitioner +as not allo+ed to cross*e5a!ine the +itnesses,
the record sho+s that the parties had agreed not to cross*e5a!ine their +itnesses
an$!ore.
1etitioner alleges that the :uarrel bet+een &a$las and hi! +as a purel$ private affair. ?e
do not agree +ith this contention. -t +ill be noted that not onl$ did the incident happen
+ithin the co!pan$ pre!ises, i.e. the ladies3 dor!itor$ +hich +as located inside the plant
site, but both of the! are e!plo$ees of private respondent. %anage!ent +ould then be at
the !erc$ of its e!plo$ees if it cannot enforce discipline +ithin co!pan$ pre!ises solel$
because the :uarrel is purel$ personal !atter. The harass!ent of an e!plo$ee b$ a co*
e!plo$ee +ithin the co!pan$ pre!ises even after office hours is a +ork*related !atter
considering that the peace of the co!pan$ is thereb$ affected. The Code of >!plo$ee
iscipline is ver$ clear that i!!oral conduct A+ithin the co!pan$ pre!ises regardless of
+hether or not Iit isJ co!!itted during +orking ti!eA is punishable.
The prete5t of petitioner that he +as !erel$ helping &a$las is belied b$ the e$e+itnesses.
1etitioner ad!itted that it took <ubong to pull hi! a+a$ fro! &a$las. ;is alleged act of
chivalr$ is nothing !ore than a chance to gratif$ his a!orous feelings.
?;>R>/OR>, the ecision of the respondent Doluntar$ Arbitrator is A//-R%>.
<O OR>R>.
$adilla# Davide# +r. and ?apunan# ++.# concur.
Bellosillo# +.# is on leave.
G.R. No. /2>3>3 Se@#e*ber 2:, 196:
REPU3IC S-2INGS 3-N. (&oB REPU3IC 3-N.!, petitioner, vs. C(URT (F
INDUSTRI- RE-TI(NS, R(SEND( T. RESUE(, 3EN0-1IN 0-R-, F(RENCI(
--S-S, D(1ING( 3. 0(-, DI(SD-D( S. 1ENDI(-, TE(D(R( DE - CRU5,
N-RCIS( 1-C-R-EG a&' 1-UR( -. R(2I(S, respondents.
C-STR(, J.:
The vital issue in this case is +hether the dis!issal of the eight 0.2 respondent
e!plo$ees b$ the petitioner Republic &ank 0hereinafter referred to as the &ank2 constituted
an unfair labor practice +ithin the !eaning and intend!ent of the -ndustrial 1eace Act
0Republic Act .('2. The Court of -ndustrial Relations 0C-R2 found it did and its decision is
no+ on appeal before us. The &ank !aintains that the discharge +as for cause.
The &ank had in its e!plo$ the respondents Rosendo T. Resuello, &en,a!in #ara,
/lorencio Allasas, o!ingo &. #ola, iosdado <. %endiola, Teodoro de la Cru6, )arciso
%acaraeg and %auro A. Rovillos. On #ul$ 12, 19'. it discharged #ola and, a fe+ da$s after
0#ul$ 1., 19'.2, the rest of respondents, for having +ritten and published Aa patentl$
libelous letter . . . tending to cause the dishonor, discredit or conte!pt not onl$ of officers
and e!plo$ees of this bank, but also of $our e!plo$er, the bank itself.A
The letter referred to +as a letter*charge +hich the respondents had +ritten to the
bank president, de!anding his resignation on the grounds of i!!oralit$, nepotis! in the
appoint!ent and favoritis! as +ell as discri!ination in the pro!otion of bank e!plo$ees.
The letter, dated #ul$ 9, 19'., is hereunder reproduced in full8
%r. Ra!on Racelis
1resident, Republic <avings &ank
% a n i l a
Aear %r. 1resident8
?e, the undersigned, on behalf of all our !e!bers and e!plo$ees of the
Republic <avings &ank, +ho have in our hearts onl$ the !ost honest and sincere
!otive to conserve and protect the interest of the institution and its 200,000
depositors, do hereb$, de!and the !uch needed resignation of ;is >5cellenc$,
%r. Ra!on Racelis as 1resident and %e!ber of the &oard of irectors of the
&ank.
%r. 1resident, $ou have alread$, in so !an$ occasions, placed the &ank
on the verge of danger, that no+ +e dee! it right and ,ustifiable for $ou to leave
this &ank and let other !ore capable presidents continue the +ork $ou have not
+ell acco!plished.
-n the above instance, +e are presenting charges +hich in our hu!ble
contention properl$ ,ustifies incapacit$ on $our part to continue and assu!e the
position as top e5ecutive of the huge institution8
012 That $ou %r. 1resident, have tolerated and practiced i!!oralit$ in
this &ank. ?e have been e5pecting $ou to do so!ething about this
!alpractice +hich is ver$ disgraceful and affects the !orale of the
hundreds of $our e!plo$ees. &ut so far, %r. 1resident, $ou have ,ust let
this thing passed through. As a !atter of fact, $ou have even pro!oted
these +o!en like %isses 1acita %ato and >dita Castro. These +o!en
are of :uestionable characters, %r. 1resident, and should have had no
place in the &ank as !anagers or even as !ere e!plo$ees. ?e kno+
%r. 1resident, because it is an open secret in the &ank, that $ou have
illicit relations +ith one of the! = %iss >dita Castro. As top officer and
as father of the e!plo$ees of the &ank, $ou have sho+n this bad
e5a!ple to $our e!plo$ees. %r. 1resident, +e are reall$ asha!ed of
$ou.
022 That $ou have allo+ed the practice of nepotis! in this &ank. Nou
have e!plo$ed relatives of $ours like ;onorio Ravida9 &ienvenido
Ravida9 Antonio Racelis9 #esus Antonio9 and Argentina Racelis. )ot
onl$ that %r. 1resident. Nou have also given those nieces and nephe+s
of $ours good positions at the e5pense of the !ore capable e!plo$ees.
%r. 1resident, if +e have to !ention all of the!, one page +ill not be
enough.
0"2 ?ith regards to pro!otion, $ou have given !ore preferences to $our
close relatives. ?hen the &ank advocated the sending of pensionados
to <tates, $ou have onl$ li!ited $our choice a!ong $our nieces,
nephe+s, and :uerida, na!el$, %iss Argentina Racelis, %r. #esus
Antonio, %iss >dita Castro, and her brother*in*la+, %r. 1edro Earcia,
#r. -n doing this, %r. 1resident, $ou have onl$ lo+ered the reputation
and standing of the Republic <avings &ank. There is reall$ no sense in
sending high school and &.<.>. graduates to <tates to stud$ advanced
banking. &ecause of this sill$ decision, it took one pensionado si5
!onths and cost the &ank a total of 110,000.00 ,ust to stud$ Christ!as
savings. That sub,ect is ver$ si!ple9 one need not go to <tates to stud$
savings9 that $ou kno+ full +ell, %r. 1resident. The reason +h$ $ou
sent %iss Castro to <tates +as because $ou +ere also there. Are +e
not rightG
072 That $ou %r. 1resident, tolerated and still tolerating grave
dishonest$ in this &ank as evidenced b$ the follo+ing irregularities and
ano!alies9
0a2 -n one of our branches, around 1200,000.00 +as !ulcted
and e!be66led b$ a certain %a5i!o onado b$ doctoring the
ledgers and records of that particular office. To the present,
the a!ount is still increasing and so!e !ore are being dug
up fro! the records ever$da$ ever since its discover$ in
/ebruar$ 19'(. -n this case $ou dis!issed %r. %. onado,
i!!ediatel$. &ut this +as all that $ou did. -f $ou have to go
back to the histor$ of the case, $ou +ill find out that $our
beloved nieces and nephe+s are also involved having been
!anagers of that particular office. Another nephe+, the Dice
1resident*Operations, then Dice 1resident, 1ersonnel, +as
also involved for valid reasons that he did not even shift this
particular e!plo$ee to other branches or depart!ents since
the beginning +hen it has been the polic$ of the &ank to
reshuffle its personnel. -f $ou +ant to kno+ +h$ $our good
nephe+ did not transfer this e!plo$ee, +e +ill tell $ou. ANour
good nephe+ has eaten too !an$ baskets of delicious
ali!ango.A %r. 1resident, if there is so!eone to be bla!ed in
this particular case, it is $our good nephe+s and nieces for
their gross negligence.
0b2 Aside fro! the one !entioned above, +e have also %r.
Rodolfo /rancisco, +ho in April 19'', !aliciousl$ +ithdra+
0sic2 19(0.00 in t+o +ithdra+al slips fro! the account of one
depositor in one of our provincial offices, inserting his na!e
as co*depositor in the savings account ledger.
0c2 -n #anuar$ 19'., %r. #ose de los <antos e5pended and
approved representation e5pense in the a!ount of 1"00.00 in
one of our provincial offices.
0d2 %r. /ederico %. abu, the e5*cashier and no+ 1ersonnel
%anager, incurred a shortage in the a!ount of 11,270.00 in
the course of the audit on August ", 19'7.
0e2 %r. #ose <. Euevara, Dice*1resident on 1ersonnel have
0sic2 been accepting bribe !one$s. One of these a!ounts to
17,000.00 +hich +as delivered b$ a !essenger so!eti!e
during the last :uarter of 19'(.
%r. 1resident, the ano!alies are onl$ a partial list of the irregularities +hich
so far $ou have not acted upon. This t$pe of people should have been fired out
fro! the &ank9 $et on the contrar$, $ou pro!oted the! to higher and responsible
positions, thus, resulting in the de!orali6ation of the !ore capable e!plo$ees.
%r. 1resident, +e hope that $ou have still a little sense of decenc$ and
propriet$ left. <o, for goodsake and for the +elfare of the &ank, O R><-E)
)O? as 1resident and as %e!ber of the &oard of irectors of the Republic
<avings &ank.
Der$ respectfull$ $ours,
Copies of this letter +ere ad!ittedl$ given to the chair!an of the board of directors
of the &ank, and the Eovernor of the Central &ank.
At the instance of the respondents, prosecutor A. Tirona filed a co!plaint in the C-R
on <epte!ber 1', 19'., alleging that the &ank3s conduct violated section 70a2 0'2 of the
-ndustrial 1eace Act +hich !akes it an unfair labor practice for an e!plo$er Ato dis!iss,
discharge or other+ise pre,udice or discri!inate against an e!plo$ee for having filed
charges or for having given or being about to give testi!on$ under this Act.A
The &ank !oved for the dis!issal of the co!plaint, contending that respondents
+ere discharged not for union activities but for having +ritten and published a libelous
letter against the bank president. The court denied the !otion on the basis of its decision
in another case
1
in +hich it ruled that section 70a2 0'2 applies to cases in +hich an
e!plo$ee is dis!issed or discri!inated against for having filed Aan$ charges against his
e!plo$er.A ?hereupon the case +as heard.
-n 19@0, ho+ever, this Court overruled the decision of the C-R in the Royal
=nterocean case and held that Athe charge, the filing of +hich is the cause of the dis!issal
of the e!plo$ee, !ust be related to his right to self*organi6ation in order to give rise to
unfair labor practice on the part of the e!plo$er,A because Aunder subsection ' of section
70a2, the e!plo$ee3s 012 having filed charges or 022 having given testi!on$ or 0"2 being
about to give testi!on$, are !odified b$ 3under this Act3 appearing after the last ite!.A
2
The
&ank therefore rene+ed its !otion to dis!iss, but the court held the !otion in abe$ance
and proceeded +ith the hearing.
On #ul$ 7, 19@2 the court rendered a decision finding the &ank guilt$ of unfair labor
practice and ordering it to reinstate the respondents, +ith full back +ages and +ithout loss
of seniorit$ and other privileges. This decision +as affir!ed b$ the court en banc on
August 9, 19@2.
Rel$ing upon Royal =nterocean -ines v. C-R,
"
and -a%as ng $ag%a%aisa sa $eter
$aul v. *=R,
7
the &ank argues that the court should have dis!issed the co!plaint because
the discharge of the respondents had nothing to do +ith their union activities as the latter in
fact ad!itted at the hearing that the +riting of the letter*charge +as not a Aunion actionA but
!erel$ their AindividualA act.
-t +ill avail the &ank none to gloat over this ad!ission of the respondents. Assu!ing
that the latter acted in their individual capacities +hen the$ +rote the letter*charge the$
+ere nonetheless protected for the$ +ere engaged in concerted activit$, in the e5ercise of
their right of self*organi6ation that includes concerted activit$ for !utual aid and
protection,
'
interference +ith +hich constitutes an unfair labor practice under section 70a2
012. This is the vie+ of so!e !e!bers of this Court. /or, as has been aptl$ stated, the
,oining in protests or de!ands, even b$ a s!all group of e!plo$ees, if in furtherance of
their interests as such, is a concerted activit$ protected b$ the -ndustrial 1eace Act. -t is not
necessar$ that union activit$ be involved or that collective bargaining be conte!plated.
@

-ndeed, +hen the respondents co!plained against nepotis!, favoritis! and other
!anage!ent practices, the$ +ere acting +ithin an area !arked out b$ the Act as a proper
sphere of collective bargaining. >ven the reference to i!!oralit$ +as not irrelevant as it
+as !ade to support the respondents3 other charge that the bank president had failed to
provide +holeso!e +orking conditions, let alone a good !oral e5a!ple, for the e!plo$ees
b$ practicing discri!ination and favoritis! in the appoint!ent and pro!otion of certain
e!plo$ees on the basis of illicit relations or blood relationship +ith the!.
-n !an$ respects, the case at bar is si!ilar to 3ational -abor Relations Board v.
$hoenix 4utual -ife =nsurance *o.
(
The issue in that case +as +hether an insurance
co!pan$ +as guilt$ of an unfair labor practice in interfering +ith this right of concerted
activit$ b$ discharging t+o agents e!plo$ed in a branch office. The cashier of that office
had resigned. The ten agents e!plo$ed there held a !eeting and agreed to ,oin in a letter
to the ho!e office ob,ecting to the transfer to their branch office of a cashier fro! another
branch office to fill the position. The$ discussed also the :uestion +hether to reco!!end
the pro!otion of the assistant cashier of their office as the proper alternative. The$ then
chose one of their nu!ber to co!pose a draft of the letter and sub!it it to the! for further
discussion, approval and signature. The agent selected to +rite the letter and another +ere
discharged for their activities in this respect as being, so their notices stated, co!pletel$
unpleasant and far be$ond the peripher$ of their responsibilit$. -n holding the co!pan$
liable for unfair labor practice, the Circuit Court of Appeals said8
A proper construction is that the e!plo$ees shall have the right to engage
in concerted activities for their !utual aid or protection even though no union
activit$ be involved, for collective bargaining be conte!plated. ;ere avis and
#ohnson and other sales!en +ere properl$ concerned +ith the identit$ and
capabilit$ of the ne+ cashier. Conceding the$ had no authorit$ to appoint a ne+
cashier or even reco!!end an$one for the appoint!ent, the$ had a legiti!ate
interest in acting concertedl$ in !aking kno+n their vie+s to !anage!ent
+ithout being discharged for that interest. The !oderate conduct of avis and
#ohnson and the others bore a reasonable relation to conditions of their
e!plo$!ent. -t +as therefore an unfair labor practice for respondent to interfere
+ith the e5ercise of the right of avis and #ohnson and the other sales!en to
engage in concerted activities for their !utual aid or protection.
Other !e!bers of this Court agreed +ith the C-R that the &ank3s conduct violated
section 70a2 0'2 +hich !akes it an unfair labor practice for an e!plo$er to dis!iss an
e!plo$ee for having filed charges under the Act.
<o!e other !e!bers of this Court believe, +ithout necessaril$ e5pressing approval
of the +a$ the respondents e5pressed their grievances, that +hat the &ank should have
done +as to refer the letter*charge to the grievance co!!ittee. This +as its dut$, failing
+hich it co!!itted an unfair labor practice under section 70a2 0@2. /or collective bargaining
does not end +ith the e5ecution of an agree!ent. -t is a continuous process. The dut$ to
bargain i!poses on the parties during the ter! of their agree!ent the !utual obligation Ato
!eet and confer pro!ptl$ and e5peditiousl$ and in good faith . . . for the purpose of
ad,usting an$ grievances or :uestion arising under such agree!entA
.
and a violation of this
obligation is, b$ section 7 0a2 0@2 and 0b2 0"2 an unfair labor practice.
9
As 1rofessors Co5
and unlop point out8
Collective bargaining . . . nor!all$ takes the for! of negotiations +hen
!a,or conditions of e!plo$!ent to be +ritten into an agree!ent are under
consideration and of grievance co!!ittee !eetings and arbitration +hen
:uestions arising in the ad!inistration of an agree!ent are at stake.
10
-nstead of stifling criticis!, the &ank should have allo+ed the respondents to air their
grievances. Eood faith bargaining re:uired of the &ank an open !ind and a sincere desire
to negotiate over grievances.
11
The grievance co!!ittee, created in the collective
bargaining agree!ents, +ould have been an appropriate foru! for such negotiation.
-ndeed, the grievance procedure is a part of the continuous process of collective
bargaining.
12
-t is intended to pro!ote, as it +ere, a friendl$ dialogue bet+een labor and
!anage!ent as a !eans of !aintaining industrial peace.
The &ank defends its action b$ invoking its right to discipline for +hat it calls the
respondents3 libel in giving undue publicit$ to their letter*charge. To be sure, the right of
self*organi6ation of e!plo$ees is not unli!ited,
1"
as the right of an e!plo$er to discharge
for cause
17
is undenied. The -ndustrial 1eace Act does not touch the nor!al e5ercise of the
right of an e!plo$er to select his e!plo$ees or to discharge the!. -t is directed solel$
against the abuse of that right b$ interfering +ith the countervailing right of self*
organi6ation.
1'
&ut the difficult$ arises in deter!ining +hether in fact the discharges are
!ade because of such a separable cause or because of so!e other activities engaged in
b$ e!plo$ees for the purpose of collective bargaining.
1@
-t is for the C-R, in the first instance, to !ake the deter!ination, Ato +eigh the
e!plo$er3s e5pressed !otive in deter!ining the effect on the e!plo$ees of !anage!ent3s
other+ise e:uivocal act.A
1(
/or the Act does not undertake the i!possible task of
specif$ing in precise and un!istakable language each incident +hich constitutes an unfair
labor practice. Rather, it leaves to the court the +ork of appl$ing the Act3s general
prohibitor$ language in the light of infinite co!binations of events +hich !a$ be charged
as violative of its ter!s.
1.
As the Circuit Court of Appeals puts it8
eter!ining the legalit$ of a dis!issal necessaril$ involves an appraisal of
the e!plo$er3s !otives. -n these cases !otivations are seldo! e5pressl$ avo+ed
and avo+als are not al+a$s candid. There thus !ust be a !easure of reliance on
the ad!inistrative agenc$ kno+ledgeable in labor*!anage!ent relations and on
the Trial >5a!iner +ho receives the evidence firsthand and is therefore in a
uni:ue position to deter!ine the credibilit$ of the +itnesses. ?here >5a!iner
and &oard are in agree!ent there is an increased presu!ption in favor of their
resolution of the issue.
19
?hat +e have ,ust essa$ed underscores at once the difference bet+een Royal
=nterocean and -a%as ng $ag%a%aisa on the one hand and this case on the other. -n Royal
=nterocean, the e!plo$ee3s letter to the ho!e office, for +riting +hich she +as dis!issed,
co!plained of the local !anager3s Ainconsiderate and untactful attitudeA
20
= a grievance
+hich, the court found, Ahad nothing to do +ith or did not arise fro! her union activities.A
)or did the court find evidence of discri!inator$ discharge in -a%as ng $ag%a%aisa as the
letter, +hich the e!plo$ee +rote to the !other co!pan$ in violation of the local co!pan$3s
rule, denounced A+astage of co!pan$ funds.A -n contrast, the e5press finding of the court
in this case +as that the dis!issal of the respondents +as !ade on account of the letter
the$ had +ritten, in +hich the$ de!anded the resignation of the bank president for a
nu!ber of reasons touching labor*!anage!ent relations = reasons +hich not even the
&ank3s ,udg!ent that the respondents had co!!itted libel could e5cuse it for !aking
su!!ar$ discharges
21
in disregard of its dut$ to bargain collectivel$.
-n final su! and substance, this Court is in unani!it$ that the &ank3s conduct,
identified as an interference +ith the e!plo$ees3 right of self*organi6ation, or as a
retaliator$ action, and4or as a refusal to bargain collectivel$, constituted an unfair labor
practice +ithin the !eaning and intend!ent of section 70a2 of the -ndustrial 1eace Act.
ACCOR-)EBN, the decision of #ul$ 7, 19@2 and the resolution of August 9, 19@2 of
the Court of -ndustrial Relations are affir!ed, at petitioner3s cost.
*oncepcion# *.+.# Reyes# +.B.-.# Di&on# 4a%alintal# @aldivar# .anche& and 0ngeles# ++.#
concur.
Beng&on# +.$.# +.# too% no part.
Se@ara#e (@"&"o&$
FERN-ND(, J., concurring8
The opinion of the Court in this highl$ significant unfair labor practice case, one of
first i!pression, easil$ co!!ends itself for approval. The relevant facts are set forth in all
fullness and +ith due care. The position of the Court united as it is on an unfair labor
practice having been co!!itted, but not :uite full$ agreed as to +hich particular
subsection of the legal provision +as violated, is delineated +ith precision. ?ith the e5plicit
ackno+ledge!ent there !ade that so!e !e!bers of the Court are of the belief that +hat
+as done b$ the Republic &ank here a!ounted to AinterferenceA and +ith the +riter being
of the persuasion that it could be categori6ed in line +ith the statute as Ainterference,
restraint or coercion,A a fe+ +ords as to +h$ this vie+ is entertained !a$ not be
inappropriate.
)o one can doubt that +e are in the process of evolving an indigenous labor
,urisprudence. )ot+ithstanding the clearl$ A!erican background of the -ndustrial 1eace
Act, based as it is !ainl$ on the ?agner Act,
1
labor relations in the 1hilippines +ith their
peculiar proble!s and the ingenuit$ of /ilipino la+$ers have resulted in a gro+ing bod$ of
decisions notable for their suitabilit$ to local condition and their distinctl$ local flavor. This
is as it should be.
The present case affords one such instance. The +ealth of ad,udication b$ both
,udicial and ad!inistrative agencies in the Fnited <tates not+ithstanding the diligent and
earnest search for a ruling based on a si!ilar fact*situation $ielded no case precisel$ in
point. ?hat does it signif$G At the ver$ least, it !a$ indicate that +hile the proble! posed
could have arisen there, this particular response of labor +as :uite uni:ue. On the
assu!ption +hich - have here h$potheticall$ !ade that there +as indeed a valid cause for
grievance, a !ore diplo!atic approach could have been atte!pted. Or at the ver$ least the
procedure indicated for the ad,ust!ent of a grievance could have been follo+ed. That +as
not done. ?hat respondents did +as to issue an ulti!atu!.
Collective bargaining +hether in its for!ative stage preparator$ to a labor contract or
in the ad,ust!ent of a labor proble! in accordance +ith the procedure set forth in an
e5isting agree!ent presupposes the give*and*take of discussion. )o part$ adopts, at least
in its initial stages, a hard*line position, fro! +hich there can be no retreat. That +as not
the situation here. Respondents as labor leaders appeared ada!antine in their attitude to
ter!inate the services of the then president of the Republic <avings &ank. )or did the$
!ince +ords in describing his alleged !isdeeds. The$ +ere :uite certain that he had
offended !ost grievousl$. The$ +anted hi! out. There +as no roo! for discussion.
That for !e is not bargaining as traditionall$ and co!!onl$ understood. -t is for that
reason that - find it difficult to agree full$ +ith the vie+ that their dis!issal could be
construed as a refusal to bargain collectivel$. %oreover, the$ did not as adverted to in the
opinion of the Court, follo+ the procedure set forth for ad,usting grievances. )or
considering the e5plicit language of the -ndustrial 1eace Act !a$ such dis!issal fall +ithin
the prohibition against dis!issing e!plo$ees for having filed charges or about to give
testi!on$ Aunder the Act.A As a !atter of fact, if the letter +ere indeed libelous, their
dis!issal +ould not have been un,ustified. There +as an ad!ission as noted in the opinion
Athat the +riting of the letter charged +as not a 3union3 action but !erel$ their 3individual3
act.A
)onetheless, concurrence +ith the decision arrived at b$ the Court is called for in
vie+ of their !ass dis!issal. Fnder the circu!stances, the supervisors union, the Republic
<avings &ank e!plo$ees union, the Republic <avings &ank securit$ guards union, and the
Republic <avings &ank supervisors union +ere left leaderless. /or collective bargaining to
be !eaningful, there !ust be t+o parties, one representing !anage!ent and the other
representing the union. )or could !anage!ent select +ho +ould represent the latter or
+ith +ho! to deal, other+ise in effect there +ould be onl$ one part$. Obviousl$ there
+ould then be no bargaining.AawphBl.nCt
-t is !$ vie+ therefore that the dis!issal a!ounted to Ainterference, restraint or
coercionA as prohibited in the -ndustrial 1eace Act. To repeat, this <ection 70a2, +ith the
e5ception of subsection 022, +as taken fro! the ?agner Act. There is as stated b$ &ufford
in his treatise for the ?agner Act Aan overlapA as this particular subsection deals A+ith
additional labor practice besides containing incidental provisions concerning related
!atters.A
2
As noted further b$ such co!!entator8 AAs e5pressed b$ the <enate
Co!!ittee8 3The four succeeding unfair labor practices are designed not to i!pose
li!itations or restrictions upon the general guarantees of the first, but rather to spell out
+ith particularit$ so!e of the practices that have been !ost prevalent and !ost
troubleso!e.3A
Teller is in agree!ent. This subsection according to hi! Ainvolves the +idest
varieties of activities.A The other unfair labor practices conde!ned fall +ithin its ter!s.
Thus8 AThat the &oard has taken this position is evidenced both b$ the &oard decisions
and b$ e5press state!ent to such effect contained in its first annual report, the language of
+hich in this connection is as follo+s8 3At the outset it should be e5plained that the &oard
has held that a violation b$ an e!plo$er of an$ of the other four subdivisions of <ection .
of the act is, b$ the sa!e token, a violation of <ection .012. <uch a conclusion is too
obvious to re:uire e5planation. -n fact, al!ost all of the cases in +hich the &oard has found
a violation of <ection .012 are cases in +hich the principal offense charged fell +ithin so!e
other subdivision of <ection .. The e5planation for this is, apparentl$, that even though an
e!plo$er !a$ be engaging in anti*union activities in violation of <ection .012, unions do not
seek protection of the act until such activities take such drastic for! as bring the! +ithin
the provisions of so!e other subdivisions, as, for e5a!ple, the discri!inator$ discharge of
union !e!bers 0+hich co!es +ithin subdivision I"J2, the do!ination of or interference +ith
the for!ation or ad!inistration of a labor organi6ation 0+hich co!es +ithin subdivision I2J2.
or a refusal to bargain collectivel$ 0+hich co!es +ithin subdivision I'J.A
"
-n the 1hilippines as in the Fnited <tates then, the first subsection on Ainterference,
restraint or coercionA covering as it does such a broad range of undesirable practices on
the part of e!plo$ers could easil$ be sei6ed upon, +here a borderline case, ini!ical to the
right of self*organi6ation or to collective bargaining, presents itself as ,ustif$ing a finding of
an unfair labor practice.