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LABOR STANDARDS REVIEWER:

PART ONE- INTRODUCTION/CONSTITUTION AND LABOR


I. GENERAL PRINCIPLES

A. LAW CLASSIFICATION:

1. Labor Standards
Refers to that part of labor law which prescribes the minimum terms and
conditions of employment which the employer is required to grant to its
employees. Examples: Books One to Four of the Labor Code as well as Book
VI thereof which deal with working conditions, wages, hours of work, holiday
pay and other benefits, conditions of employment of women, minors,
househelpers and homeworkers, medical and dental services, occupational
health and safety, termination of employment and retirement
2. Labor Relations
Refers to that part of labor law which regulates the relations between
employers and workers. Example: Book V of the Labor Code which deals
with labor organizations, collective bargaining, grievance machinery,
voluntary arbitration, conciliation and mediation, unfair labor practices, strikes,
picketing and lockout
3. Welfare Laws
The promotion of the welfare of all the people, the adoption by the
government of measures calculated to insure economic stability of all the
component elements of society thru the maintenance of proper economic and
social equilibrium in the interrelations of the members of the community,
constitutionality, thru the adoption of measures legally justifiable or extra-
constitutionality thru the exercise of powers underlying the existence of all
governments, on the time honored principle of salus populi esta suprema
lex..( The welfare, or the salvation, of the people is the supreme law)

B. Historical Perspective:
Cases:
1. Adkins Vs. Childrens Hospital (251 U.S 525)
Adkins v. Children's Hospital, 261 U.S. 525 (1923), is a United States
Supreme Court opinion holding that federal minimum wage legislation for
women was an unconstitutional infringement of liberty of contract, as
protected by the due process clause of the Fifth Amendment.
Adkins was overturned in West Coast Hotel Co. v. Parrish, 300 U.S. 379
(1937). In the Adkins vs. CH case, the court found that upholding the statute
would dangerously extend the police power of the state.
Background
In 1918, Congress passed a law setting minimum wages for women and
children in the District of Columbia. As in other cases, the question was one
of balancing the police power of Congress to regulate health and safety with
the right of individuals to conduct their own affairs without legislative
interference. Children's Hospital and a female elevator operator at a hotel
brought this case to prevent enforcement of the act by Jesse C. Adkins and
the two other members of a wage board.
Judgment
The Court opinion, by Justice Sutherland, held that previous decisions (Muller
v. Oregon, 208 U.S. 412 (1908) and Bunting v. Oregon, 243 U.S. 426 (1917))
did not overrule the holding in Lochner v. New York, 198 U.S. 45 (1905),
protecting freedom of contract. The Muller cases, Sutherland noted,
addressed maximum hours; this case addressed a minimum wage. The
maximum hour laws left the parties free to negotiate about wages, unlike this
law. Moreover, the minimum wage artificially restricts the employers side of
the negotiation. The Court argued that if legislatures were permitted to set
minimum wage laws, they would be permitted to set maximum wage laws.
Sutherland's majority opinion also cites the changes that had occurred in the
years since Muller, and in particular the passage of the Nineteenth
Amendment, granting women the right to vote. He notes that Muller and other
cases had emphasized differences between men and women as justifying
special protection for women. But "[in] view of the great--not to say
revolutionary--changes which have taken place since [Muller], in the
contractual, political, and civil status of women, culminating in the Nineteenth
Amendment, it is not unreasonable to say that these differences have now
come almost, if not quite, to the vanishing point."
Chief Justice Taft, dissenting, argued that there was no distinction between
minimum wage laws and maximum hour laws, considering that these
essentially both add up to restrictions on the contract. He noted
that Lochners limitations had appeared to be overruled in Muller and Bunting.
Justice Holmes, also dissenting, noted that there were plenty of other
constraints on contract (e.g. blue laws, usury laws, etc.). He cited the
reasonable person standard he had put forth in Lochner: if a reasonable
person could see a power in the Constitution, the Court ought to defer to
legislation using that power.

2. People Vs. Julio Pomar (G.R No. L-22008, November 3, 1924)
Facts:
The accused being the manager and person in charge of La Flor de la
Isabela, a tobacco factory pertaining to La Campania General de Tabacos de
Filipinas, a corporation duly authorized to transact business and the petitioner
Macaria Fajardo, whom he granted vacation leave which began on the 16th
day of July, 1923, by reason of her pregnancy, did then and there willfully,
unlawfully, and feloniously fail and refuse to pay to said woman the sum of
eighty pesos (P80), Philippine currency, to which she was entitled as her
regular wages corresponding to thirty days before and thirty days after her
delivery and confinement which took place on the 12th day of August, 1923,
despite and over the demands made by her, the said Macaria Fajardo, upon
said accused, to do so.

To said complaint, the defendant contended that the provisions of said Act
No. 3071, upon which the complaint was based were illegal, unconstitutional
and void.

The lower court, found the defendant guilty of the alleged offense described in
the complaint, and sentenced him to pay a fine of P50, in accordance with the
provisions of section 15 of said Act, to suffer subsidiary imprisonment in case
of insolvency, and to pay the costs.

From that sentence the defendant appealed, and now makes the following
assignments of error: That the court erred in overruling the demurrer; in
convicting him of the crime charged in the information; and in not declaring
section 13 of Act No. 3071, unconstitutional.
Issue:
Whether or not the provisions of sections 13 and 15 of Act No. 3071 are a
reasonable and lawful exercise of the police power of the state
Held:
Said section 13 was enacted by the Legislature of the Philippine Islands in the
exercise of its supposed police power, with the praiseworthy purpose of
safeguarding the health of pregnant women laborers in "factory, shop or place
of labor of any description," and of insuring to them, to a certain extent,
reasonable support for one month before and one month after their delivery.
The statute now under consideration is attacked upon the ground that it
authorizes an unconstitutional interference with the freedom of contract
including within the guarantees of the due process clause of the 5th
Amendment. That the right to contract about one's affairs is a part of the
liberty of the individual protected by this clause is settled by the decision of
this court, and is no longer open to question. The law takes account of the
necessities of only one party to the contract. It ignores the necessities of the
employer by compelling him to pay not less than a certain sum, not only
whether the employee is capable of earning it, but irrespective of the ability of
his business to sustain the burden, generously leaving him, of course, the
privilege of abandoning his business as an alternative for going on at a loss.
Liberty includes not only the right to labor, but to refuse to labor, and,
consequently, the right to contract to labor or for labor, and to terminate such
contracts, and to refuse to make such contracts.. Hence, we are of the
opinion that this Act contravenes those provisions of the state and Federal
constitutions, which guarantee that no person shall be deprived of life, liberty
or property without due process of law.
Clearly, therefore, the law has deprived, every person, firm, or corporation
owning or managing a factory, shop or place of labor of any description within
the Philippine Islands, of his right to enter into contracts of employment upon
such terms as he and the employee may agree upon. The law creates a term
in every such contract, without the consent of the parties. Such persons are,
therefore, deprived of their liberty to contract. The constitution of the
Philippine Islands guarantees to every citizen his liberty and one of his
liberties is the liberty to contract. It has been decided in a long line of
decisions of the Supreme Court of the United States, that the right to contract
about one's affairs is a part of the liberty of the individual, protected by the
"due process of law" clause of the constitution. The rule in this jurisdiction is,
that the contracting parties may establish any agreements, terms, and
conditions they may deem advisable, provided they are not contrary to law,
morals or public policy. (Art. 1255, Civil Code.)
For all of the foregoing reasons, we are fully persuaded, under the facts and
the law, that the provisions of section 13, of Act No. 3071 of the Philippine
Legislature, are unconstitutional and void, in that they violate and are contrary
to the provisions of the first paragraph of section 3 of the Act of Congress of
the United States of August 29, 1916. (Vol. 12, Public Laws, p. 238.)
3. West Coast Hotel Co. Vs. Parrish (300 U.S 379; 1937)
Fact- A women named Elsie Parrish, who was an employee for the West
Coast Hotel Company, thought she was being paid unfairly for her work.
So she brought a suit against the West Coast Hotel Company to recover
the difference between what the wages paid her and the minimum wage
fixed pursuant to the state law which was $14.50 per week of 48 hours.
The judicial history of the case is that there were lower state court
hearings and they ruled the minimum wage statue unconstitutional. Adkins
vs. Children's Hospital helped play a role in their decision in the lower
state courts because the Supreme Court in 1923 ruled that a minimum
wage law for women was unconstitutional. The West Coast Hotel then
appealed to the Supreme Court after the lower courts ruled in Parrish's
favor.
Issue- Is it constitutional to have fixed minimum wages for women? Does
having a fixed minimum wage for women violate the due process clause of
the 14th amendment which forbids a state to deprive any person of life,
liberty or property?
Reasoning- (Mr. Justice Hughes) Hughes stated that the "Constitution
speaks of liberty and prohibits the deprivation of liberty without due
process of law. In prohibiting that deprivation, the Constitution does not
recognize an absolute and uncontrollable liberty. Liberty in each of its
phases has its history and connotation. Liberty under the Constitution is
thus necessarily subject to the restraints of due process, and regulation
which is reasonable in relation to its subject and is adopted in the interests
of the community is due process" (449). The court ruled that the minimum
wage law did not violate due process.
The State of Washington thinks that it is unlawful to employ women
workers in any industry within the state where the wages are not adequate
for their maintenance.
In a 5-to-4 decision, the Court held that the establishment of minimum
wages for women was constitutionally legitimate. The Court noted that the
Constitution did not speak of the freedom of contract and that liberty was
subject to the restraints of due process. The Court also noted that
employers and employees were not equally "free" in negotiating contracts,
since employees often were constrained by practical and economic
realities. This was found to be especially true in the case of women. This
case explicitly overruled the Court's decision in Adkins v. Children's
Hospital (1923).
4. Philippine Association of Service Exporters Vs. Drilon (G.R No.
81958; June 30, 1988)
Facts:
The petitioner, Philippine Association of Service Exporters, Inc. (PASEI,
for short), a firm "engaged principally in the recruitment of Filipino workers,
male and female, for overseas placement," challenges the Constitutional
validity of Department Order No. 1, Series of 1988, of the Department of
Labor and Employment, in the character of "GUIDELINES GOVERNING
THE TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO
DOMESTIC AND HOUSEHOLD WORKERS," in this petition for certiorari
and prohibition. Specifically, the measure is assailed for "discrimination
against males or females;" that it "does not apply to all Filipino workers but
only to domestic helpers and females with similar skills;" and that it is
violative of the right to travel. It is held likewise to be an invalid exercise of
the lawmaking power, police power being legislative, and not executive, in
character.

On May 25, 1988, the Solicitor General, on behalf of the respondents
Secretary of Labor and Administrator of the Philippine Overseas
Employment Administration, filed a Comment informing the Court that on
March 8, 1988, the respondent Labor Secretary lifted the deployment ban
in the states of Iraq, Jordan, Qatar, Canada, Hongkong, United States,
Italy, Norway, Austria, and Switzerland. * In submitting the validity of the
challenged "guidelines," the Solicitor General invokes the police power of
the Philippine State.
Issue:
Whether or not the Department Order 1, series of 1988, of the Department
of Labor and Employment valid.
Held:
"The police power of the State ... is a power coextensive with self-
protection, and it is not inaptly termed the "law of overwhelming
necessity." It may be said to be that inherent and plenary power in the
State which enables it to prohibit all things hurtful to the comfort, safety,
and welfare of society."
The consequence the deployment ban has on the right to travel does not
impair the right. The right to travel is subject, among other things, to the
requirements of "public safety," "as may be provided by law." Department
Order No. 1 is a valid implementation of the Labor Code, in particular, its
basic policy to "afford protection to labor," pursuant to the respondent
Department of Labor's rule-making authority vested in it by the Labor
Code. The petitioner assumes that it is unreasonable simply because of its
impact on the right to travel, but as we have stated, the right itself is not
absolute. The disputed Order is a valid qualification thereto.

Neither is there merit in the contention that Department Order No. 1
constitutes an invalid exercise of legislative power. It is true that police
power is the domain of the legislature, but it does not mean that such an
authority may not be lawfully delegated. As we have mentioned, the Labor
Code itself vests the Department of Labor and Employment with
rulemaking powers in the enforcement whereof.
C. Constitutional Basis/Rights

1. Sections 9, 10, 13, 14 and 18, Article II of the 1987
Constitution

Section 9. The State shall promote a just and dynamic social order that will
ensure the prosperity and independence of the nation and free the people
from poverty through policies that provide adequate social services, promote
full employment, a rising standard of living, and an improved quality of life for
all.

Section 10. The State shall promote social justice in all phases of national
development.

Section 13. The State recognizes the vital role of the youth in nation-building
and shall promote and protect their physical, moral, spiritual, intellectual, and
social well-being. It shall inculcate in the youth patriotism and nationalism,
and encourage their involvement in public and civic affairs.

Section 14. The State recognizes the role of women in nation-building, and
shall ensure the fundamental equality before the law of women and men.

Section 18. The State affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare.

2. Sections 1 and 3, Article XIII of the 1987 Constitution

Section 1. The Congress shall give highest priority to the enactment of
measures that protect and enhance the right of all the people to human
dignity, reduce social, economic, and political inequalities, and remove
cultural inequities by equitably diffusing wealth and political power for the
common good.
To this end, the State shall regulate the acquisition, ownership, use, and
disposition of property and its increments.


LABOR
Section 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.
The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the
right of enterprises to reasonable returns to investments, and to expansion
and growth.
CASES:
1. Sime Darby vs. NLRC (April 15, 1998)

FACTS
Sime Darby Pilipinas (the Company) declared and implemented a
lockout against all the hourly employees of its tire factory on the
ground of sabotage and work slowdown. This after failed negotiations
with Sime Darby Employees Association (the Union) for the remaining
two years of their CBA. The Union contested the lockout before the
DOLE-NLRC. Subsequently the company decided to sell its tire
manufacturing assets and close the business. As a result, all
employees were terminated, including the petitioners. The company
later found a buyer of its assets and business in Goodyear Philippines,
Inc..

Petitioners filed a complaint for Illegal Dismissal before the DOLE and
later a complaint for Unfair Labor Practice (ULP), both cases
eventually consolidated. The labor arbiter ordered the parties to submit
their respective memorandum but instead of doing this, the Union filed
an Appeal Memorandum with a petition for injunction and/or a TRO
before the NLRC. The labor arbiter later dismissed the case for lack of
merit. It found the lockout valid and legal, and justified by the incidents
of continued work slowdown, mass absences, and consistent low
production output, high rate of waste and scrap tires and machine
breakdown. It also considered the mass termination of all the
employees valid as an authorized termination of employment due to
closure of the establishment, the company having complied with due
process.

Petitioners appealed the labor arbiters Decision to the NLRC which
was also dismissed for lack of merit. It also ruled that that the labor
arbiter could not have lost jurisdiction over the case when petitioners
appealed the formers order since the order was interlocutory in nature
and cannot be appealed separately. In the Court of Appeals, the
petition was similarly denied.

Petitioners reiterate that they were denied due process when they
were dismissed right on the day they were handed down their
termination letters, without the benefit of the thirty (30)-day notice as
required by law, and invoke the Courts ruling in Serrano v. NLRC; that
the labor arbiter had lost jurisdiction over the issue when have already
perfected their appeal to the NLRC; and that labor arbiter deprived
petitioners of the chance to present their evidence during the formal
trial.

ISSUES

1. Whether or not the labor arbiter has lost jurisdiction over the Unions
petition due to the appeal on the labor arbiters order that the Union
filed before the NLRC?

2. Whether or not petitioners were deprived by the labor arbiter of the
right to a presentation of evidence in a formal trial?

3. Whether or not petitioners were illegally dismissed due to lack of
due process and also as a consequence of an illegal lockout?

HELD

Petition DENIED. Decision affirmed as the labor arbiter never lost its
jurisdiction to decide on the case and has decided the case without
grave abuse of discretion. The Court gives due credence to the factual
findings of the labor arbiter and NLRC.

The order by the labor arbiter to the parties to submit their respective
memorandum is in the nature of an interlocutory order. An interlocutory
order is not appealable until after the rendition of the judgment on the
merits for a contrary rule would delay the administration of justice and
unduly burden the courts. Nor could the Court finds any grave abuse of
discretion on the labor arbiters part. For one, the holding of an
adversarial trial is discretionary on the labor arbiter and the parties
cannot demand it as a matter of right. The New Rules of Procedure of
the NLRC grants the labor arbiter wide latitude to determine, after the
submission by the parties of their position papers/memoranda, if there
is need for a formal trial or hearing.

Petitioners argument that had the labor arbiter allowed respondents to
present their evidence during the formal trial, the Decision would have
been different, cannot be sustained. As previously stated, the labor
arbiter enjoys wide discretion in determining whether there is a need
for a formal hearing in a given case, and he or she may use all
reasonable means to ascertain the facts of each case without regard to
technicalities. When the parties submitted their position papers and
other pertinent pleadings to the labor arbiter, it is understood / given
/deemed that they have included therein all the pieces of evidence
needed to establish their respective cases. A formal hearing is not
compulsory in consonance with the need for speedy disposition of
labor cases. If it were necessary, the parties may then willfully withhold
their evidence and disclose the same only during the formal hearing,
thus creating surprises which could merely complicate the issues and
prolong the trial. There is a dire need to lessen technicalities in the
process of settling labor disputes.
Well-settled is the rule that hearings and resolutions of labor disputes
are not governed by the strict and technical rules of evidence and
procedure observed in the regular courts of law. Technical rules of
procedure are not applicable in labor cases, but may apply only by
analogy or in a suppletory character, for instance, when there is a need
to attain substantial justice and an expeditious, practical and
convenient solution to a labor problem.
Petitioners claim that the alleged failure of the company to notify them
of their termination renders their dismissal illegal, and thus they should
be reinstated and paid with full backwages or given separation pay,
following the Courts ruling in Serrano v. Court of Appeals. The
argument does not hold. The ruling in Serrano has already been
superseded by the case of Agabon v. National Labor Relation
Commission. The Agabon enunciates the new doctrine that if the
dismissal is for just cause but statutory due process was not observed,
the dismissal should be upheld. While the procedural infirmity cannot
be cured, it should not invalidate the dismissal. However, the employer
should be held liable for non-compliance with the procedural
requirements of due process.
But in any case, the issue of illegal dismissal had already been
resolved by the NLRC and the Court of Appeals, which both found that
the company had an authorized cause and had complied with the
requirements of due process when it dismissed petitioners.

2. Globe-Mackay Cable vs. NLRC (March 3 1992)
3. Calalang vs. Williams (December 2, 1940)

Facts:
The National Traffic Commission, in its resolution of 17 July 1940, resolved to
recommend to the Director of Public Works and to the Secretary of Public
Works and Communications that animal-drawn vehicles be prohibited from
passing along Rosario Street extending from Plaza Calderon de la Barca to
Dasmarias Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30
p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo
Street to Echague Street, from 7 a.m. to 11 p.m., from a period of one year
from the date of the opening of the Colgante Bridge to traffic.

The Chairman of the National Traffic Commission, on 18 July 1940,
recommended to the Director of Public Works the adoption of the measure
proposed in the resolution, in pursuance of the provisions of Commonwealth
Act 548, which authorizes said Director of Public Works, with the approval of
the Secretary of Public Works and Communications, to promulgate rules and
regulations to regulate and control the use of and traffic on national roads. On
2 August 1940, the Director of Public Works, in his first indorsement to the
Secretary of Public Works and Communications, recommended to the latter
the approval of the recommendation made by the Chairman of the National
Traffic Commission, with the modification that the closing of Rizal Avenue to
traffic to animal-drawn vehicles be limited to the portion thereof extending
from the railroad crossing at Antipolo Street to Azcarraga Street.
On 10 August 1940, the Secretary of Public Works and Communications, in
his second indorsement addressed to the Director of Public Works, approved
the recommendation of the latter that Rosario Street and Rizal Avenue be
closed to traffic of animal-drawn vehicles, between the points and during the
hours as indicated, for a period of 1 year from the date of the opening of the
Colgante Bridge to traffic.
The Mayor of Manila and the Acting Chief of Police of Manila have enforced
and caused to be enforced the rules and regulations thus adopted. Maximo
Calalang, in his capacity as a private citizen and as a taxpayer of Manila,
brought before the Supreme court the petition for a writ of prohibition against
A. D. Williams, as Chairman of the National Traffic Commission; Vicente
Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of
Public Works and Communications; Eulogio Rodriguez, as Mayor of the City
of Manila; and Juan Dominguez, as Acting Chief of Police of Manila.
Issue:
Whether the rules and regulations promulgated by the Director of Public
Works infringe upon the constitutional precept regarding the promotion of
social justice to insure the well-being and economic security of all the people.
Held:
The promotion of social justice is to be achieved not through a mistaken
sympathy towards any given group. Social justice is "neither communism, nor
despotism, nor atomism, nor anarchy," but the humanization of laws and the
equalization of social and economic forces by the State so that justice in its
rational and objectively secular conception may at least be approximated.
Social justice means the promotion of the welfare of all the people, the
adoption by the Government of measures calculated to insure economic
stability of all the competent elements of society, through the maintenance of
a proper economic and social equilibrium in the interrelations of the members
of the community, constitutionally, through the adoption of measures legally
justifiable, or extra-constitutionally, through the exercise of powers underlying
the existence of all governments on the time-honored principle of salus populi
est suprema lex. Social justice, therefore, must be founded on the recognition
of the necessity of interdependence among divers and diverse units of a
society and of the protection that should be equally and evenly extended to all
groups as a combined force in our social and economic life, consistent with
the fundamental and paramount objective of the state of promoting the health,
comfort, and quiet of all persons, and of bringing about "the greatest good to
the greatest number."
Facts:
In pursuance of Commonwealth Act 548 which mandates the Director of
Public Works, with the approval of the Secretary of Public Works and
Communications, shall promulgate the necessary rules and regulations to
regulate and control the use of and traffic on such roads and streets to
promote safe transit upon, and avoid obstructions on, roads and streets
designated as national roads, the Director of Public Works adopted the
resolution of the National Traffic Commission, prohibiting the passing of
animal drawn vehicles in certainstreets in Manila.
Petitioner questioned this as it constitutes an undue delegation of legislative
power.

Issues:
Whether or not there is a undue delegation of legislative power?

Ruling:
There is no undue delegation of legislative power. Commonwealth Act 548
does not confer legislative powers to the Director of Public Works. The
authority conferred upon them and under which they promulgated the rules
and regulations now complained of is not to determine what public policy
demands but merely to carry out the legislative policy laid down by the
National Assembly in said Act, to wit, to promote safe transit upon and avoid
obstructions on, roads and streets designated as national roads by acts of the
National Assembly or by executive orders of the President of the Philippines
and to close them temporarily to any or all classes of traffic whenever the
condition of the road or the traffic makes such action necessary or advisable
in the public convenience and interest.

The delegated power, if at all, therefore, is not the determination of what the
law shall be, but merely the ascertainment of the facts and circumstances
upon which the application of said law is to be predicated.

To promulgate rules and regulations on the use of national roads and to
determine when and how long a national road should be closed to traffic, in
view of the condition of the road or the traffic thereon and the requirements of
public convenience and interest, is an administrative function which cannot be
directly discharged by the National Assembly.
It must depend on the discretion of some other government official to whom is
confided the duty of determining whether the proper occasion exists for
executing the law. But it cannot be said that the exercise of such discretion is
the making of the law.
4. PLDT vs. Balbastro (March 28, 2007)

AUSTRIA-MARTINEZ, J.:
Before us is a Petition for Review on Certiorari filed by Philippine Long
Distance and Telephone Company, Inc. (petitioner) seeking to annul
the Decision1 dated July 31, 2002 and the Resolution2 dated February
7, 2003 of the Court of Appeals (CA) in CA-G.R. SP No. 51060.

Amparo Balbastro (private respondent) was employed by petitioner in
1978 as its telephone operator until her questioned dismissal from
employment on October 5, 1989. She was dismissed by petitioner for
her absences without authorized leave due to unconfirmed sick leave
on June 28 to July 14, 1989, which constituted her third offense3
punishable by dismissal under petitioners rules and regulations.4

On October 28, 1991, private respondent filed a Complaint5 with the
Labor Arbiter against petitioner and its President, Antonio Cojuangco,
for illegal dismissal, non-payment of salary wage, premium pay for rest
day, 13th month pay, and damages. In her position paper, she alleged
that she was dismissed on the ground of unconfirmed sick leave
despite her presentation of medical certificates from her attending
physicians which were not considered by petitioners medical doctors;
and that she has four minor children and it was not her intention to
habitually absent herself without reason considering that her loss of job
which was based only on opinions of petitioners doctors had caused
her great deprivation and moral suffering. She prayed for
reinstatement, backwages, and damages.

Petitioner filed its position paper with Motion to Dismiss6 alleging that
private respondents habitual and unjustified absences was a just and
valid cause for her termination under its rules and regulations; and that
her record of unauthorized absences for 1989 showed the following:

First unauthorized absences, from March 19 to 29, 1989. Private
respondent absented herself from work for nine days excluding rest
days on March 23 to 24, 1989 without notice to petitioner. She gave
marital problem as the reason for her absence. She was penalized with
18 days suspension for violating petitioners rules and regulations
regarding absences.

Second unauthorized absences, from June 11 to 13, 1989. Private
respondent called in sick from Tanauan, Batangas on June 5 that she
was suffering from gastroenteritis. She absented herself from June 5 to
13, 1989. On June 14, 1989, she presented herself to petitioners
doctor, Dr. Melissa Musngi and submitted a medical certificate where it
was stated that she was under treatment from June 5 to 8, 1989 of
gastroenteritis. Dr. Musngi confirmed private respondents sick leave
from June 5 to 10, 1989 but did not confirm her absences from June 11
to 13, 1989 because her medical certificate covered only the period
from June 5 to 8, 1989. Furthermore, petitioner reasons out that if she
really had such illness, certain normal logical medical procedures
should have been taken, such as stool examinations and
hospitalization; and she bore no post-illness manifestations of
gastroenteritis. Private respondents unconfirmed leave of absence
was considered by petitioner unauthorized due to her patent abuse of
sick leave privileges and treated it as her second offense and was
penalized with 15 days suspension.

Third unauthorized absences, from June 28 to July 14, 1989. On June
25, 1989, private respondent made a sick call that she had sore eyes
and absented herself from June 25 to July 14, 1989. On July 3, 1989,
she was outvisited at her given address in Makati but was not found
home. On July 15, 1989, she reported for work and presented herself
to the clinic for confirmation. She had her medical certificate issued by
her attending physician showing that she had been under his
professional treatment from June 25 to July 12, 1989 for systemic viral
infection. Petitioners doctor, Dr. Benito Dungo, confirmed her sick
leave from June 25 to 27, 1989 but did not confirm as to the rest of the
dates when she was absent from work. When asked to explain, private
respondent said that she had a viral infection during the said period;
and that she was in Tanauan, Batangas during the said dates so she
was not found in Makati when outvisited. Petitioners doctor did not
confirm her leave of absence from June 28 to July 14, 1989 on the
ground that such illness did not warrant a very long time of rest; certain
laboratory examinations should have been conducted by her attending
physician; and there was patent abuse of her sick leave privileges.

While private respondents third leave of absence was being
deliberated upon, she absented herself from August 6 to 12, 1989. She
called in sick on August 6, 1989 informing her supervisor that she had
a fever. The medical certificate issued by her attending physician
showed that she was under treatment from August 7 to 10, 1989 for
influenza. Petitioners doctor, Dr. Eduardo Co, confirmed private
respondents leave of absence from August 6 to 8, 1989 but did not
confirm the rest because her absences from August 9 to 12, 1989 were
not covered by a medical certificate; her illness did not warrant
prolonged absence; and it was medically impossible for her to contract
the same illness which she contracted the previous month since it is a
medical fact that there is no such thing as an immediately recurrent
viral infection.

In view of her repeated absences without authorized leave for the third
time, petitioner terminated private respondents service effective
October 5, 1989.

The Labor Arbiter conducted a hearing where private respondent
testified on her behalf, while petitioner presented the three medical
doctors who did not confirm portions of private respondents leave of
absence, and its Employee Relations and Service Department
Manager.

On May 30, 1994, the Labor Arbiter issued its Decision,7 the
dispositive portion of which reads:

WHEREFORE, all the foregoing premises being considered, judgment
is hereby rendered ordering the respondent Philippine Long Distance
[and] Telephone Co. to reinstate the complainant to her former position
as telephone operator with all the rights, privileges and benefits
appertaining thereto, including seniority, plus backwages equivalent to
one (1) year salary in the sum of P78,000.00 (P6,500.00/mo. x 12
mos.).

SO ORDRED.8

The Labor Arbiter held that private respondents first incident of
absence from March 19 to 29, 1989 were unauthorized but not as to
the other succeeding absences. It found that private respondent, on
her first day of absence, called in sick and when she reported for work,
she went to petitioners clinic for check-up and submitted her medical
certificates, thus she complied with the standard requirements on
matters of sick leave; that petitioners doctors did not confirm some
portions of private respondents leave of absence based merely on
their medical opinions; that such justification was not warranted under
Department Order No. ADM-79-02 wherein absences due to illness
were considered unauthorized and without pay when the attending
doctors signature is forged, there is alteration as to the date and
contents of the medical certificate, the certificate is false as to the facts
alleged therein, the doctor issuing the medical certificate is not
qualified to attend to the illness, there are falsities and
misrepresentations, and when there is patent abuse of sick leave
privileges; and that these circumstances were not proven in this case.

The Labor Arbiter gave more credence to the doctor who actually
attended to private respondent rather than to the medical opinion of
petitioners doctors. It concluded that petitioners doctors should have
coordinated with private respondents attending physicians to settle
any doubts as to the medical certificates.

Petitioner filed its appeal with the National Labor Relations
Commission (NLRC).9 On January 19, 1996, the NLRC issued a

Resolution10 affirming the decision of the Labor Arbiter.

The NLRC found that company practice allows leave of absence due
to sickness if supported by a medical certificate issued by the attending
physician; that a difference in opinion by the Medical Director from that
of the attending physician should not prejudice private respondent
since the Medical Director can consider absences unauthorized only in
cases of forgery and patent abuse of sick leave privileges which were
not proven in this case; that if the Medical Director entertained doubts
as to the medical certificate, he should have asked the attending
physician to submit himself for cross-examination and then present an
independent physician for an expert opinion on the matter.

Petitioners Motion for Reconsideration was denied in a Resolution11
dated March 14, 1996.

Undaunted, petitioner filed with us a Petition for Certiorari with prayer
for the issuance of a Temporary Restraining Order (TRO). A TRO was
issued to enjoin the enforcement of the NLRC Resolution until further
orders.12

In a Resolution dated December 7, 1998,13 we referred the petition to

the CA in accordance with the St. Martin Funeral Home v. National
Labor Relations Commission14 ruling.

On July 31, 2002, the CA issued its assailed Decision which dismissed
the petition and affirmed the NLRC Decision. The CA held that as long
as the medical certificate presented did not fall under any of the
infirmities set forth in petitioners rules and regulations, the
unconfirmed leave should be treated merely as absence without leave
and was not subject to disciplinary action; that petitioner may not rely
on the previous absences of respondents in 1978 and 1982 to show
abuse of sick leave privileges because petitioner had acknowledged
that respondent had already been penalized with suspension, and
those absences were committed beyond the three-year period
mentioned in their rules and regulations; that in its desire to clothe
private respondents dismissal with a semblance of legality, petitioner
points to private respondents fourth unauthorized leave of absence
committed in August 1989 while the third unauthorized leave of
absence was being deliberated upon; and that the notice of dismissal
referred only to her third unauthorized leave, thus she could not be
faulted for an infraction for which she was not charged.

Petitioners Motion for Reconsideration was denied in a Resolution
dated February 7, 2003.

Hence, petitioner filed the instant Petition for Review on Certiorari
alleging the following grounds:

I

WITH ALL DUE RESPECT, THE HONORABLE COURT FAILED TO
CONSIDER THAT THE PETITION HEREIN DOES NOT MERELY
INQUIRE UPON THE RELATIVE WEIGHT OF THE EVIDENCE
PRESENTED BY THE PARTIES, BUT IS ANCHORED ON
MANIFESTLY ERRONEOUS CONCLUSIONS ON THE PART OF
THE NLRC ARISING FROM GROSS MISAPPREHENSION OF THE
FACTS OBTAINING IN THE CASE. AMONG OTHERS, IT WAS
GRAVE ERROR TO CONCLUDE THAT THERE WAS NO PATENT
ABUSE OF THE SICK LEAVE PRIVILEGE ON THE PART OF THE
PRIVATE RESPONDENT BECAUSE THE MEDICAL CERTIFICATES
SHE PRESENTED WERE NOT FALSE, FORGED, OR ALTERED
TOTALLY DISREGARDING THE FACT THAT "ABUSE OF SICK
LEAVE PRIVILEGE" IS A CAUSE SEPARATELY ENUMERATED
UNDER THE RULES AS A GROUND FOR DISCIPLINARY ACTION.

II

WITH ALL DUE RESPECT, THE HONORABLE COURT FAILED TO
CONSIDER THAT THE CONCLUSIONS OF THE NLRC ARE
BEREFT OF ANY LEGAL OR FACTUAL BASES AS THERE WERE
LEGALLY NO MEDICAL CERTIFICATES TO SPEAK OF, AND THE
EXISTENCE THEREOF ARE PURE AND SIMPLE HEARSAY,
HENCE COULD NOT BE VALIDLY RELIED UPON OR INVOKED BY
THE PRIVATE RESPONDENT TO SUPPORT HER DEFENSE EVEN
SUPPOSING TECHNICAL RULES ON EVIDENCE COULD BE
RELAXED IN LABOR PROCEEDINGS. 15

Petitioner argues that the NLRCs conclusions that private respondent
had not committed a patent abuse of sick leave privileges and that her
dismissal was illegal are utterly without any factual or legal basis; that
the NLRCs conclusion that the dismissal was illegal was merely
based: (1) on the evidence of private respondent; (2) on medical
certificates which are clearly hearsay and of no probative value
whatsoever; and (3) on medical certificates which, even supposing
could be considered, simply failed to cover the period of the leave
requested and set forth implausible diagnoses.

Petitioner claims that the CA as well as the NLRC failed to resolve the
issue of whether or not the medical certificate should be given any
credence at all; that it had presented four witnesses which included
their three medical doctors who were subjected to cross-examinations,
and yet credence was given to private respondents hearsay evidence
consisting merely of a medical certificate by the latters attending
physician who was not even presented to testify; that since the content
of the medical certificate had been rebutted and refuted by petitioners
witnesses, the burden of evidence is shifted to private respondent to
show that the medical certificate she submitted was competent, proper,
and sound which she failed to do.

Petitioner further claims that the CA erred in not finding that private
respondent committed a patent abuse of sick leave privileges which
does not arise solely from forgery or alteration of the medical
certificate, but on the fact that an employee had frequently and
incorrigibly absented herself and then applied for sick leave with
absolute impunity armed with medical certificates which not only failed
to cover the entire length of the leave but also with implausible
diagnoses; that excluding private respondents unauthorized absences
in 1989, she had accumulated 93 days of sick leave from January to
July 1989 and 115 days of sick leave in 1988, thus, how can the
conclusion be drawn that there was no patent abuse of sick leave
privileges; and that her unauthorized absence for which she was
terminated all occurred in 1989, thus, the CA erred in saying that
petitioner may not rely on the previous absences of respondent in 1978
and 1982 to justify private respondents dismissal.

We find the petition meritorious. Private respondent was validly
dismissed by petitioner. It must be borne in mind that the basic
principle in termination cases is that the burden of proof rests upon the
employer to show that the dismissal is for just and valid cause and
failure to do so would necessarily mean that the dismissal was not
justified and, therefore, was illegal.16 For dismissal to be valid, the
evidence must be substantial and not arbitrary and must be founded
on clearly established facts.17 We find that petitioner had discharged
this burden.

Under petitioners Department Order No. ADM-79-02, for the absence
due to an alleged illness to be considered unauthorized, without pay,
and subject to disciplinary action, it must be shown that the medical
certificate is forged, altered as to the date and contents, false as to the
facts stated therein, issued by a doctor not qualified to attend to the
patients illness, and there is patent abuse of sick leave privileges. The
penalty for three offenses of unauthorized absences committed within
the three-year period is dismissal.

Private respondents unconfirmed absences from June 28 to July 14,
1989 is the crucial period in this particular case.

The Labor Arbiter and the NLRC found that private respondent was
illegally dismissed by petitioner. Such finding was affirmed by the CA.
They all concluded that the medical certificate which private
respondent presented did not fall under the circumstances enumerated
in Department Order No. ADM-79-02, and there was no patent abuse
of sick leave privileges, thus, there was no basis for petitioners doctors
not to confirm her sick leave and consider the same unauthorized.

The jurisdiction of this Court in a petition for review on certiorari is
limited to reviewing only errors of law, not of fact, unless the factual
findings being assailed are not supported by evidence on record or the
impugned judgment is based on a misapprehension of facts.18 We find
that those exceptions are present in the instant case.

We find that petitioner had sufficiently established that private
respondent committed a patent abuse of her sick leave privileges
which is one of the grounds listed in Department Order No. ADM-79-02
for disciplinary action.

Private respondent was absent on June 25, 1989 and the reason given
was sore eyes. She was then absent from June 25 to July 14, 1989.
When she reported for work on July 15, 1989, she went to petitioners
doctor, Dr. Benito Dungo, for confirmation of her leave of absence and
presented a medical certificate19 from her attending physician, Dr.
Manuel C. Damian of Tanauan Batangas, who certified that she had
been under his professional care from June 25 to July 12, 1989 for
systemic viral disease.

Dr. Dungo confirmed private respondents leave of absence from June
25 to 27, 1989 only and did not confirm her leave from June 28 to July
14, 1989 for the following reasons: (a) systemic viral disease indicated
in the medical certificate does not warrant such a very long time of rest
and recuperation; (b) if she really had an infection, the logical recourse
is for the attending physician to conduct a chest x-ray and blood
examination to determine the cause of the prolonged fever, but such
was not made; (c) if she was really ill for such a long time, she would
have already been confined in a hospital for treatment as petitioner has
standing agreements with various hospitals to provide immediate
medical assistance free of charge; (d) she displayed no residue of
symptoms of flu, thus casting doubt on the veracity of her claim; (e)
she called in sick on June 25, 1989 that she was suffering from sore
eyes but her medical certificate made no mention of such condition;
and (f) her medical records reveal a pattern of abuse of sick leave
privileges.20

Private respondents reason for her absence on June 25, 1989 was
sore eyes, however the medical certificate that she presented for her
prolonged absence from June 25 to July 14, 1989 was systemic viral
disease and as correctly observed by Dr. Dungo, sore eyes was never
mentioned therein.

Moreover, in the medical progress note21 of Dr. Damian dated
October 10, 1989 attached to private respondents position paper
submitted before the Labor Arbiter, it was shown that private
respondent was seen by Dr. Damian on June 25, 1989 at 9:00 a.m.
and her temperature was 40 degrees and she was complaining of
severe headache and body pain. It would appear that there was a
discrepancy between the reason given when she called in sick on June
25, 1989 and her complaints when she consulted Dr. Damian on the
same day. In fact, when private respondent was asked on cross-
examination why sore eyes was never mentioned in her medical
certificate, all that she could say was "the diagnosis was systemic viral
disease, sama-sama na lahat".22

The medical certificate issued by Dr. Damian showed that private
respondent was under his professional care from June 25 to July 12,
1989. However, the medical progress note dated October 10, 1989 of
the same doctor showed that private respondent consulted him only on
June 25, 27, and 29, 1989. It was never mentioned that Dr. Damian
had seen private respondent after June 29, 1989. Thus, there was
even a discrepancy between the medical certificate dated July 13,
1989 and the medical progress note as to the time frame that private
respondent was seen by Dr. Damian. The medical certificate did not
cover private respondents absences from July 13 to 14, 1989 and she
only reported for work on July 15, 1989.

It bears stressing that from the time private respondent called in sick
on June 25, 1989 due to sore eyes, she never called up petitioner
again until she reported for work on July 15, 1989. She never went to
petitioners doctors for them to verify her sickness.

Private respondent had committed the first two offenses of
unauthorized absences in the same year. First, she did not report for
work from March 19 to 29, 1989 without notice to petitioner, thus her
absence was treated as unauthorized and considered her first offense
for which she was penalized with suspension. Second, she again did
not report for work from June 5 to 13, 1989 and when she reported for
work and presented her medical certificate, it covered the period from
June 5 to 8, 1989 only but she did not report for work until June 14,
1989. Petitioners doctor did not confirm her absences from June 11 to
13, 1989, thus, the same was considered unauthorized and her second
offense for which she was penalized again with suspension. These two
unauthorized absences together with her third unauthorized absences
committed from June 28 to July 14, 1989 are sufficient bases for
petitioners finding that private respondent patently abused her sick
leave privileges.

Previous infractions may be used as justification for an employees
dismissal from work in connection with a subsequent similar offense.23
Moreover, it is in petitioners rules and regulations that the same
offense committed within the three-year period merits the penalty of
dismissal. The CAs finding that petitioner may not rely on the previous
absences of private respondent in 1978 and 1982 to show abuse of
sick leave privileges has no basis since private respondent was
dismissed for committing her three unauthorized absences all in 1989.

It had also been established by Dr. Dungos testimony that private
respondents medical record showed that she did not go to the clinic
for consultation as she would only present a medical certificate and get
a clearance for her sick leave;24 that the same medical record showed
her absences in 1989 as follows: (1) From April 27 to May 4 due to
urinary tract infection and she submitted a medical certificate;25 (2)
From May 5 to 14 due to back pain;26 (3) From May 20 to 21 due to
migraine;27 (4) June 5 to 13 due to gastroenteritis (penalized as her
second offense); (5) June 15 to 24 due to conjunctivitis and submitted
a medical certificate;28 and (6) June 25 to July 14, 1989 due to
systemic viral disease with medical certificate (her third offense
penalized with dismissal). Private respondent had incurred a total
absence of 85 days from January to October 1989;29 and 115 days in
1988.30 It had also been established that petitioners doctors
confirmed most of her sick leave out of compassion31 and that her
medical records showed that there were several warnings given her
regarding her unconfirmed sick leave.32

As petitioner stated in its pleadings, it is a telecommunication service
company which provides the country with various telecommunication
services and facilities. Its operations are a vital part to many
transactions all over the country and abroad, and private respondent
was one of its telephone operators who used to connect all these calls.
Thus, her patent abuse of her sick leave privileges is detrimental to
petitioners business.

While it is true that compassion and human consideration should guide
the disposition of cases involving termination of employment since it
affects one's source or means of livelihood, it should not be overlooked
that the benefits accorded to labor do not include compelling an
employer to retain the services of an employee who has been shown
to be a gross liability to the employer. The law in protecting the rights
of the employees authorizes neither oppression nor self-destruction of
the employer.33 It should be made clear that when the law tilts the
scale of justice in favor of labor, it is but a recognition of the inherent
economic inequality between labor and management. The intent is to
balance the scale of justice; to put the two parties on relatively equal
positions. There may be cases where the circumstances warrant
favoring labor over the interests of management but never should the
scale be so tilted if the result is an injustice to the employer. Justitia
nemini neganda est (Justice is to be denied to none).34

WHEREFORE, the instant petition is GRANTED. The Decision dated
July 31, 2002 and the Resolution dated February 7, 2003 of the Court
of Appeals in CA-G.R. SP No. 51060 are hereby REVERSED and SET
ASIDE. The complaint of Amparo Balbastro is DISMISSED.

5. Phil. Movie Workers Association vs. Premiere Productions, Inc
(1953)

This is a petition for review of two orders of the Court of Industrial
Relations, one dated November 8, 1951, and the other November 24,
1951, which give authority to respondent to lay-off forty-four (44) of its
employees in accordance with its urgent petition on condition that, in
the event work is available in the future where their ability may be
required, the same workers should be reemployed and that, if after the
termination of the case, the court would find that at the time of their lay
off work was available, the respondent shall pay to them the back
wages to which they are entitled. These two holders were upheld by
the court en banc in a resolution dated March 10, 1952, which is also
involved in the present petition for review.

On October 2, 1951, respondent filed with the Court of Industrial
Relations an urgent petition seeking authority to lay-off 44 men working
in three of its departments, the first batch to be laid off thirty (30) days
after the filing of the petition and the rest 45 days thereafter, in order
that in the intervening period it may finish the filming of its pending
picture. The ground for the lay-off is the financial losses which
respondent was allegedly suffering during the current year.

Petitioner opposed the request alleging that the claim of financial
losses has no basis in fact it being only an act of retaliation on the part
of respondent for the strike staged by the workers days before in an
attempt to harass and intimidate them and weaken and destroy the
union to which they belong.

On November 5, 1951, date when the urgent petition was set for
hearing, at the request of counsel for respondent, Hon. Arsenio C.
Roldan, presiding judge of the Court of Industrial Relations, held an
ocular inspection of the studios and filming premises of respondent in
the course of which he interrogated about fifteen laborers who were
then present in the place. On the strength of the evidence adduced
during the ocular inspection Judge Roldan issued an order on
November 8, 1951, allowing respondent to lay-off the workers
mentioned in its petition with respect to Unit No. 2 and those assigned
to the Ground Maintenance Department subject to the condition that, in
the event that work is available in the future, they should be re-
employed. With respect to the workers assigned to Unit No. 1, the
hearing was postponed.

A subsequent hearing was held in connection with the workers
assigned to Unit. 1 and on the strength of the evidence submitted by
respondent, Judge Roldan again found the petition justifiable and
authorized their lay-off in an order dated November 24, 1951, under
the same condition as those contained in his previous order.

Petitioner moved for the reconsideration of both orders dated
November 8 and November 24, 1951, which motion the court en banc
denied in a resolution issued on March 10, 1952. Hence this petition
for review.

The only issue submitted to this court for reconsideration is: May the
Court of Industrial Relations authorize the lay off of workers on the
basis of an ocular inspection without receiving full evidence to
determine the cause or motive of such lay-off?

It appears that when the case was called for hearing to look in the
merits of the urgent petition of respondent seeking to lay-off 44 men
who were working in three of its departments on the ground of lack of
work and because its business was suffering financial losses during
the current year the court, which was then represented by its presiding
Judge, decided to make an ocular inspection of the studios and filming
premises of respondent following a request made to that effect by its
counsel, and in the course of said inspection Judge Roldan proceeded
to interrogate the workers he found in the place in the presence of the
counsel of both parties. The testimony of those interrogated was taken
down and the counsel of both parties were allowed to cross-examine
them. Judge Roldan also proceeded to examine some of the records of
respondent company among them the time cards of some workers
which showed that while the workers reported for work, when their
presence was checked they were found to be no longer in the
premises. And on the strength of the findings made by judge Roldan in
this ocular inspection he reached the conclusion that the petition for
lay-off was justified because there was no more work for the laborers
to do in connection with the different jobs given to them. It is now
contended that such a procedure is unfair to the labor union in that it
deprived the workers affected of the opportunity to disprove what
apparently was represented to the court during the ocular inspection
which at best may only be the result of prearrangement devised by the
company to justify its claim of lack of work and that what the court
should have done was to make a full-dress investigation if not a formal
hearing giving both parties all the time and opportunity to present their
evidence before deciding such an important matter which affects the
position and the only means of livelihood of the workers affected by the
petition. In other words, the petitioning labor union workers were
deprived of their employment without due process of law.

The claim of petitioner that the laborers were not given an opportunity
to present their evidence to disprove the claim of lack of work is
disputed by counsel for respondent company who claims that the labor
union had its day in court because its counsel was present in the
investigation or ocular inspection and even presented some witnesses
to protect its interest. The record before the court on this matter is not
clear and for such reason it has no way of determining the truth of both
claims. The stenographic notes taken during the ocular inspection
have not been elevated for the reason undoubtedly that this is a
petition for review and the only issue before the court is one of law. In
the face of this confusing situations on an issue which is determinative
of the controversy, the only guide that the court finds is the order of the
court of origin which happily contains a reference to the evidence that it
has considered and which has served as basis for its conclusion
resulting in lay-off of the workers in whose behalf the present petition
was brought before this court. We refer to the order of November 8,
1951, subject of the petition for review, wherein Judge Roldan makes
express mention of the evidence can only refer to testimony given by
the workers interrogated by him and to whatever documents he found
or examined in the course of such inspection. It is true, as counsel for
respondent avers, that hearing were conducted by the court a quo on
October 8, and 15, 1951, and on November 5, 6, 15, and 21, 1951, but
it is likewise true that those hearings do not necessarily refer to the
petition under consideration but to other matters and incidents which
were then before the court for determination such as the petition of the
labor union containing fourteen (14) demands and the petition of the
same union to declare respondent in contempt for having violated
certain directives of the court. At any rate, this matter does not appear
clear and we are inclined to resolve the doubt in favor of labor
considering the spirit of our Constitution.

The right to labor is a constitutional as well as statutory right. Every
man has a natural right to the fruits of his own industry. A man who has
been employed to undertake certain labor and has put into it his time
and effort is entitled to be protected. The right of a person to his labor
is deemed to be property within the meaning of constitutional
guarantees. That is his means of livelihood. He cannot be deprived of
his labor or work without due process of law (11 Am. Jur., 333, pp.
1151-1153; 11 Am. Jur., section 344. pp. 1168-1171).

Although the Court of Industrial Relations, in the determination of any
question or controversy, may adopt its own rules of procedure and may
act according to justice and equity without regard to technicalities, and
for that matter is not bound by any technical rules of evidence (section
20, Commonwealth Act No. 103), this broad grant of power should not
be interpreted to mean that it can ignore or disregard the fundamental
requirements of due process in the trials and investigation of cases
brought before it for determination. As aptly pointed out by this court,
there are certain cardinal primary rights which the Court of Industrial
Relations must respect in the trial of every labor case. One of them is
the right to a hearing which includes the right of the party interested to
present his own case and submit evidence in support thereof (Manila
Trading and Supply Co. vs. Philippine Labor Union, 71 Phil., 124, 129).
An ocular inspection of the establishment or premise involved is proper
if the court finds it necessary, but such is authorized only to help the
court in clearing a doubt, reaching a conclusion, or finding the truth.
But it is not the main trial nor should it exclude the presentation of
other evidence which the parties may deem necessary to establish
their case. It is merely an auxiliary remedy the law affords the parties
or the court to reach an enlightened determination of the case.

Considering the merits of the controversy before us, we are of the
opinion that the required due process has not been followed. The court
a quo merely acted on the strength of the ocular inspection it
conducted in the premises of the respondent company. The petition for
lay-off was predicated on the lack of work and of the further fact that
the company was incurring financial losses. These allegations cannot
be established by a mere inspection of the place of labor specially
when such inspection was conducted at the request of the interested
party. As counsel for petitioner says, such inspection could at best
witness "the superficial fact of cessation of work but it could not be
determinative of the larger and more fundamental issue of lack of work
due to lack of funds". This fundamental issue cannot be determined
without looking into the financial situation of the respondent company.
In fact, this matter is now being looked into by the court a quo in
connection with the fourteen demands of the labor union, but before
finishing its inquiry it decided to grant the lay-off pending final
determination of the main case. This action is in our opinion premature
and has worked injustice to the laborers.

WHEREFORE, the orders subject of the present petition for review are
hereby set aside, and it is ordered that the cause be remanded to the
court of origin for further proceedings giving to petitioner an opportunity
to present its evidence in support of its opposition to the urgent petition
for lay-off of respondent company. No pronouncement as to costs.

6. Maquiling vs. Phil. Tuberculosis Society (February 4, 2005)

Facts:
Petitioner Dr. Maquiling was employed by respondent Philippine
Tuberculosis Society, Inc. (PTS). Dr. Maquiling, then earning a monthly
salary of thirteen thousand nine hundred pesos (P13,900.00) was
dismissed from service as Deputy Executive Director after serving PTS
for twenty-three (23)years on the ground of lost of trust and confidence
constituted, among others, by: delayed GSIS remittances, reported
deficit of P7.3 million appearing in the PTSs financial statement. Dr.
Maquiling filed a complaint against PTS for reinstatement or, in the
alternative, for payment of full backwages and separation pay in
accordance with Article 279 of the Labor Code, as well as moral
damages in the amount of five hundred thousand pesos (P500,000.00)
and exemplary damages in the amount of one hundred thousand
pesos (P100,000.00). The complaint was assigned to a labor arbiter.
After PTS failed to appear despite having requested for several
postponements, Dr. Maquiling was allowed to present his evidence
ex parte
consisting of his testimony on direct examination and documentary
proof. Dr. Maquiling moved for submission of the case for resolution,
which motion was granted. After considering the evidence adduced by
the parties, the labor arbiter rendered a decision ordering PTS to
immediately reinstate Dr. Maquiling to the position of Deputy Executive
Director or its equivalent rank. Upon appeal by PTS to the NLRC, the
Commission upheld the decision of the labor arbiter and dismissed the
appeal. However, PTS appealed the decision to the Court of Appeals
which reversed the decisions of the NLRC and labor arbiter by ordering
the dismissal of the complaint and declaring that his dismissal from
employment as legal and valid. It, however, ordered PTS to pay Dr.
Maquiling the amount of ten thousand pesos (P10,000.00) as damages
or indemnity for violation of his right to procedural due process.
Issue
Granting that there is lack of statutory due process, will the dismissal
for a just cause render the same ineffectual? Is Dr. Maquiling entitled
to damages resulting from a violation of his right to procedural due
process? If yes, what kind of damages is allowed and not allowed?
Held:
Yes. Where the dismissal is for a just cause, as in the instant case,
the lack of statutory due process should not nullify the dismissal, or
render it illegal, or ineffectual. However, the employer should indemnify
the employee for the violation of his statutory rights.
The indemnity to be imposed should be stiffer to discourage the
abhorrent practice of dismiss now, pay later, which we sought to
deter in the
Serrano ruling
. The sanction should be in the nature of indemnification or penalty and
should depend on the facts of each case, taking into special
consideration the gravity of the due process violation of the employer.
The violation of the petitioners right to statutory due process by the
private respondent warrants the payment of indemnity in the form of
nominal damages.
The amount of such damages is addressed to the sound discretion of
the court, taking into account the relevant circumstances. It may be
also argued that actual or compensatory damages may be recovered
in employment termination cases.
Actual or compensatory damages is not available as a matter of right
to an employee dismissed for just cause but denied statutory due
process.
The award must be based on clear factual and legal bases and
correspond to such pecuniary loss suffered by the employee as duly
proven.
Evidently, thereis a less degree of discretion to award actual or
compensatorydamages.

7. Victoriano vs. Elizalde Rope Workers Union (59 SCRA 54)
Victoriano, an Iglesia ni Cristo member, has been an employee of the
Elizalde Rope Factory since 1958. He was also a member of the
EPWU. Under the CBA between ERF and EPWU, a close shop
agreement is being enforced which means that employment in the
factory relies on the membership in the EPWU; that in order to retain
employment in the said factory one must be a member of the said
Union. In 1962, Victoriano tendered his resignation from EPWU
claiming that as per RA 3350 he is an exemption to the close shop
agreement by virtue of his being a member of the INC because
apparently in the INC, one is forbidden from being a member of any
labor union. It was only in 1974 that his resignation from the Union was
acted upon by EPWU which notified ERF about it. ERF then moved to
terminate Victoriano due to his non-membership from the EPWU.
EPWU and ERF reiterated that he is not exempt from the close shop
agreement because RA 3350 is unconstitutional and that said law
violates the EPWUs and ERFs legal/contractual rights.
ISSUE: Whether or not RA 3350 is unconstitutional.
HELD: The right to religion prevails over contractual or legal rights. As
such, an INC member may refuse to join a labor union and despite the
fact that there is a close shop agreement in the factory where he was
employed, his employment could not be validly terminated for his non-
membership in the majority therein. Further, the right to join a union
includes the right not to join a union. The law is not unconstitutional. It
recognizes both the rights of unions and employers to enforce terms of
contracts and at the same time it recognizes the workers right to join
or not to join union. But the RA recognizes as well the primacy of a
constitutional right over a contractual right.
Facts: Plaintiff is a member of the Elizalde Rope Workers Union who
later resigned from his affiliation to the said union by reason of the
prohibition of his religion for its members to become affiliated with any
labor organization. The union has subsisting closed shop agreement in
their collective bargaining agreement with their employer that all
permanent employees of the company must be a member of the union
and later was amended by Republic Act No. 3350 with the provision
stating "but such agreement shall not cover members of any religious
sects which prohibit affiliation of their members in any such labor
organization".. By his resignation, the union wrote a letter to the
company to separate the plaintiff from the service after which he was
informed by the company that unless he makes a satisfactory
arrangement with the union he will be dismissed from the service. The
union contends that RA 3350 impairs obligation of contract stipulated
in their CBA and discriminatorily favors religious sects in providing
exemption to be affiliated with any labor unions.
Issue: WON RA 3350 impairs the right to form association.
Held: The court held that what the Constitution and the Industrial
Peace Act recognize and guarantee is the "right" to form or join
associations which involves two broad notions, namely: first, liberty or
freedom, i.e., the absence of legal restraint, whereby an employee may
act for himself without being prevented by law; and second, power,
whereby an employee may join or refrain from joining an association.
Therefore the right to join a union includes the right to abstain from
joining any union. The exceptions provided by the assailed Republic
Act is that members of said religious sects cannot be compelled or
coerced to join labor unions even when said unions have closed shop
agreements with the employers; that in spite of any closed shop
agreement, members of said religious sects cannot be refused
employment or dismissed from their jobs on the sole ground that they
are not members of the collective bargaining union. Thus this
exception does not infringe upon the constitutional provision on
freedom of association but instead reinforces it.

D. International Covenants and Labor and Welfare Laws
1. Universal Declaration of Human Rights (Articles 3, 7, 17, 22,
23, 24, 25)
Article 3.
Everyone has the right to life, liberty and security of person.
Article 7.
All are equal before the law and are entitled without any discrimination to
equal protection of the law. All are entitled to equal protection against any
discrimination in violation of this Declaration and against any incitement to
such discrimination.
Article 17.
(1) Everyone has the right to own property alone as well as in association
with others.
(2) No one shall be arbitrarily deprived of his property.
Article 22.
Everyone, as a member of society, has the right to social security and is
entitled to realization, through national effort and international co-operation
and in accordance with the organization and resources of each State, of
the economic, social and cultural rights indispensable for his dignity and
the free development of his personality.
Article 23.
(1) Everyone has the right to work, to free choice of employment, to just
and favourable conditions of work and to protection against
unemployment.
(2) Everyone, without any discrimination, has the right to equal pay for
equal work.
(3) Everyone who works has the right to just and favourable remuneration
ensuring for himself and his family an existence worthy of human dignity,
and supplemented, if necessary, by other means of social protection.
(4) Everyone has the right to form and to join trade unions for the
protection of his interests.
^ Top
Article 24.
Everyone has the right to rest and leisure, including reasonable limitation
of working hours and periodic holidays with pay.
^ Top
Article 25.
(1) Everyone has the right to a standard of living adequate for the health
and well-being of himself and of his family, including food, clothing,
housing and medical care and necessary social services, and the right to
security in the event of unemployment, sickness, disability, widowhood,
old age or other lack of livelihood in circumstances beyond his control.
(2) Motherhood and childhood are entitled to special care and assistance.
All children, whether born in or out of wedlock, shall enjoy the same social
protection.

2. International Covenant on Economic, Social and Cultural
Rights (Part III, Articles 6, 7, 9, 11)
Article 6
1. The States Parties to the present Covenant recognize the right to work,
which includes the right of everyone to the opportunity to gain his living
by work which he freely chooses or accepts, and will take appropriate
steps to safeguard this right.
2. The Steps to be taken by a State Party to the present Covenant to
achieve the full realization of this right shall include technical and
vocational guidance and training programmes, policies and techniques
to achieve steady economic, social and cultural development and full
and productive employment under conditions safeguarding
fundamental political and economic freedoms to the individual.
Article 7
The States to the present Covenant recognize the right of everyone to the
enjoyment of just and favourable conditions of work which ensure, in
particular:
1. Remuneration which provides all workers, as a minimum, with:
1. Fair wages and equal remuneration for work of equal value
without distinction of any kind, in particular women being
guaranteed conditions of work not inferior to those enjoyed by
men, with equal pay for equal work;
2. A decent living for themselves and their families in accordance
with the provisions of the present Covenant;
2. Safe and healthy working conditions;
3. Equal opportunity for everyone to be promoted in his employment to an
appropriate higher level, subject to no considerations other than those
of seniority and competence;
4. Rest, leisure and reasonable limitation of working hours and periodic
holidays with pay, as well as remuneration for public holidays.
Article 9
The States Parties to the present Covenant recognize the right of everyone to
social security, including social insurance.
Article 11
1. The States Parties to present Covenant recognize the right of
everyone to an adequate standard of living for himself and his family,
including adequate food, clothing and housing, and to the continuous
improvement of living conditions. The States Parties will take
appropriate steps to ensure the international co-operation based on
free consent.
2. The States Parties to present Covenant, recognizing the fundamental
right of everyone to be free from hunger, shall take, individually and
through international co-operation, the measures, including specific
programmes, which are needed:
1. To improve methods of production, conservation and distribution
of food by making full use of technical and scientific knowledge,
by disseminating knowledge of the principles of nutrition and by
developing or reforming agrarian systems in such a way as to
achieve the most efficient development and utilization of natural
resources;
2. Taking into account the problems of both food-importing and
food-exporting countries, to ensure an equitable distribution of
world food supplies in relation to need.


3. Relevant conventions and recommendations of the
International Labor Organization (ILO)

Conventions
Main article: List of International Labour Organization Conventions
Through July 2011, the ILO has adopted 189 conventions. If these
conventions are ratified by enough governments, they become in force.
However, ILO conventions are considered international labor standards
regardless of ratifications. When a convention comes into force, it creates a
legal obligation for ratifying nations to apply its provisions.
Every year the International Labour Conference's Committee on the
Application of Standards examines a number of alleged breaches of
international labour standards. Governments are required to submit reports
detailing their compliance with the obligations of the conventions they have
ratified. Conventions that have not been ratified by member states have the
same legal force as do recommendations.
In 1998, the 86th International Labour Conference adopted the Declaration on
Fundamental Principles and Rights at Work. This declaration contains four
fundamental policies:
1. The right of workers to associate freely and bargain collectively;
2. The end of forced and compulsory labour;
3. The end of child labour; and
4. The end of unfair discrimination among workers.
The ILO asserts that its members have an obligation to work towards fully
respecting these principles, embodied in relevant ILO Conventions. The ILO
Conventions which embody the fundamental principles have now been
ratified by most member states.
Recommendations
Recommendations do not have the binding force of conventions and are not
subject to ratification. Recommendations may be adopted at the same time as
conventions to supplement the latter with additional or more detailed
provisions. In other cases recommendations may be adopted separately and
may address issues separate from particular conventions.

Cases:
1.International School Alliance of Educators vs. Quisumbing
Facts: Receiving salaries less than their counterparts hired
abroad, the local-hires of private respondent School, mostly
Filipinos, cry discrimination. We agree. That the local-hires are paid
more than their colleagues in other schools is, of course, beside the
point. The point is that employees should be given equal pay for
work of equal value.

Private respondent International School, Inc. (the School, for
short), pursuant to Presidential Decree 732, is a domestic
educational institution established primarily for dependents of
foreign diplomatic personnel and other temporary residents. To
enable the School to continue carrying out its educational program
and improve its standard of instruction, Section 2(c) of the same
decree authorizes the School to employ its own teaching
and management personnel selected by it either locally or abroad,
from Philippine or other nationalities, such personnel being exempt
from otherwise applicable laws and regulations attending their
employment, except laws that have been or will be enacted for the
protection of employees.

Accordingly, the School hires both foreign and local teachers as
members of its faculty, classifying the same into two: (1) foreign-
hires and (2) local-hires.

The School grants foreign-hires certain benefits not accorded local-
hires. These include housing, transportation, shipping costs, taxes,
and home leave travel allowance. Foreign-hires are also paid
a salary rate twenty-five percent (25%) more than local-hires. The
School justifies the difference on two "significant
economic disadvantages" foreign-hires have to endure, namely: (a)
the "dislocation factor" and (b) limited tenure.


Issue: Whether or Not the grants provided by the school to
foreign hires and not to local hires discriminative of their
constitutional right to the equal protection clause.


Held: The foregoing provisions impregnably institutionalize in
this jurisdiction the long honored legal truism of "equal pay for
equal work." Persons who work with substantially
equal qualifications, skill, effort and responsibility, under similar
conditions, should be paid similar salaries. This rule applies to the
School, its "international character" notwithstanding.

The School contends that petitioner has not adduced evidence that
local-hires perform work equal to that of foreign-hires. The Court
finds this argument a little cavalier. If an employer accords
employees the same position and rank, the presumption is that
these employees perform equal work. This presumption is borne by
logic and human experience. If the employer pays one employee
less than the rest, it is not for that employee to explain why he
receives less or why the others receive more. That would be adding
insult to injury. The employer has discriminated against that
employee; it is for the employer to explain why the employee is
treated unfairly.

While we recognize the need of the School to attract foreign-hires,
salaries should not be used as an enticement to the prejudice of
local-hires. The local-hires perform the same services as foreign-
hires and they ought to be paid the same salaries as the latter. For
the same reason, the "dislocation factor" and the foreign-hires'
limited tenure also cannot serve as valid bases for the distinction
in salary rates.

The Constitution enjoins the State to "protect the rights of workers
and promote their welfare," "to afford labor full protection." The
State, therefore, has the right and duty to regulate the relations
between labor and capital. These relations are not merely
contractual but are so impressed with public interest that labor
contracts, collective bargaining agreements included, must yield to
the common good. Should such contracts contain stipulations that
are contrary to public policy, courts will not hesitate to strike down
these stipulations.

In this case, we find the point-of-hire classification employed by
respondent School to justify the distinction in the salary rates of
foreign-hires and local hires to be an invalid classification. There is
no reasonable distinction between the services rendered by foreign-
hires and local-hires.

Wherefore, the petition is given due course. The petition is hereby
granted in part. The orders of the secretary of labor and
employment dated June 10, 1996 and march 19, 1997, are hereby
reversed and set aside insofar as they uphold the practice of
respondent school of according foreign-hires higher salaries than
local-hires.
3. Standard Chartered Bank Employees Union vs. Confesor
Confidential Employees Exclusion as Appropriate Bargaining Unit
The 1998-2000 Collective Bargaining Agreement between the
Standard Chartered Bank employees Union and the Standard
Chartered Bank expired so the parties tried to renew it but then a
deadlock ensued. Under the old CBA, the following are excluded as
appropriate bargaining unit:
A. All covenanted and assistant officers (now called National Officers)

B. One confidential secretary of each of the:

1. Chief Executive, Philippine Branches

2. Deputy Chief Executive/Head, Corporate Banking Group

3. Head, Finance

4. Head, Human Resources

5. Manager, Cebu

6. Manager, Iloilo

7. Covenanted Officers provided said positions shall be filled by new recruits.

C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and Iloilo, and
in any other branch that the BANK may establish in the country.

D. Personnel of the Telex Department

E. All Security Guards

F. Probationary employees, without prejudice to Article 277 (c) of the Labor
Code, as amended by R.A. 6715, casuals or emergency employees; and

G. One (1) HR Staff

But then in the renewal sought by SCBEU-NUBE, they only wanted the
exclusion to apply only to the following employees from the appropriate
bargaining unit all managers who are vested with the right to hire and
fire employees, confidential employees, those with access to labor
relations materials, Chief Cashiers, Assistant Cashiers, personnel of
the Telex Department and one Human Resources (HR) staff.

SCBEU-NUBE also averred that employees assigned in an acting
capacity for at least a week should be given salary raise.
A notice of strike was given to the Department of Labor due to this
deadlock. Then DOLE Secretary Patricia Sto. Tomas issued an order
dismissing the Unions plea.
ISSUE: Whether or not the confidential employees sought to be
removed from the exclusion as appropriate bargaining unit by SCBEU-
NUBE holds ground.
HELD: No. Whether or not the employees sought to be excluded from
the appropriate bargaining unit are confidential employees is a
question of fact, which is not a proper issue in a petition for review
under Rule 45 of the Rules of Court. SCBEU-NUBE insists that the
foregoing employees are not confidential employees; however, it failed
to buttress its claim. Aside from its generalized arguments, and despite
the Secretarys finding that there was no evidence to support it,
SCBEU-NUBE still failed to substantiate its claim. SCBEU-NUBE did
not even bother to state the nature of the duties and functions of these
employees, depriving the Court of any basis on which it may be
concluded that they are indeed confidential employees.
With regard to the salary increase of employees in acting capacities,
the Supreme Court agreed with the Court of Appeals that a restrictive
provision would curtail managements prerogative, and at the same
time, recognized that employees should not be made to work in an
acting capacity for long periods of time without adequate
compensation. The usual rule that employees in acting capacities for
at least a month should be given salary raise is upheld.