Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-46496 February 27, 1940
ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and
NATIONAL WORKERS BROTHERHOOD, petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION, INC., respondents.
Office of the Solicitor-General Ozaeta and Assistant Attorney Barcelona for the Court of Industrial
Relations.
Antonio D. Paguia for National Labor Unon.
Claro M. Recto for petitioner "Ang Tibay".
Jose M. Casal for National Workers' Brotherhood.
SYLLABUS
1. COURT OF INDUSTRIAL RELATIONS; POWER. The nature of the Court of Industrial
Relations and of its power is extensively discussed in the decision.

2. ID.; ID.; TECHNICAL RULES OF PROCEDURE; DUE PROCESS OF LAW. The Court of
Industrial Relations is not narrowly constrained by technical rules of procedure, and Commonwealth
Act No. 103 requires it to act according to justice and equity and substantial merits of the case,
without regard to technicalities or legal evidence but may inform its mind in such manner as it may
deem just and equitable (Goseco v. Court of Industrial Relations Et. Al., G. R. No. 46673). The fact,
however, that the Court of Industrial Relations may be said to be free from the rigidity of certain
procedural requirements does not mean that it can, in justiciable cases coming before it, entirely
ignore or disregard the fundamental and essential requirements of due process in trials and
investigations of an administrative character.

3. ID.; ID.; ID.; ID.; CARDINAL PRIMARY RIGHTS. There are cardinal primary rights which must
be respected even in proceedings of this character. The first of these rights is the right to a hearing,
which includes the right of the party interested or affected to present his own case and submit
evidence in support thereof. Not only must the party be given an opportunity to present his case and
to adduce evidence tending to establish the rights which he asserts but the tribunal must consider
the evidence presented. While the duty to deliberate does not impose the obligation to decide right, it
does imply a necessity which cannot be disregarded, namely, that of having something to support its
decision. Not only must there be some evidence to support a finding or conclusion, but the evidence
must be substantial. The decision must be rendered on the evidence presented at the hearing, or at
least contained in the record and disclosed to the parties affected. The Court of Industrial Relations
or any of its judges, therefore, must act on its or his own independent consideration of the law and
facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision.
The Court of Industrial Relations should, in all controvercial questions, render its decision in such a
manner that the parties to the proceeding can know the various issues involved, and the reasons for
the decisions rendered. The performance of this duty is inseparable from the authority conferred
upon it.

4. ID.; ID.; ID.; ID.; ID.; CASE AT BAR; NEW TRIAL GRANTED. In the light of the foregoing
fundamental principles, it is sufficient to observe here that, except as to the alleged agreement
between the Ang Tibay and the National Workers Brotherhood (appendix A), the record is barren
and does not satisfy the thirst for a factual basis upon which to predicate, in a rational way, a
conclusion of law. This result, however, does not now preclude the concession of a new trial prayed
for by the respondent National Labor Union, Inc. The interest of justice would be better served if the
movant is given opportunity to present at the hearing the documents referred to in his motion and
such other evidence as may be relevant to the main issue involved. The legislation which created
the Court of Industrial Relations and under which it acts is new. The failure to grasp the fundamental
issue involved is not entirely attributable to the parties adversely affected by the result. Accordingly,
the motion for a new trial should be, and the same is hereby, granted, and the entire record of this
case shall be remanded to the Court of Industrial Relations, with instruction that it re-open the case,
receive all such evidence as may be relevant, and otherwise proceed in accordance with the
requirements set forth in the decision.
DECISION
LAUREL, J .:
The Solicitor-General in behalf of the respondent Court of Industrial Relations in the above-entitled
case has filed a motion for reconsideration and moves that, for the reasons stated in his motion, we
reconsider the following legal conclusions of the majority opinion of this Court:
1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo de duracion o
que no sea para una determinada, termina o bien por voluntad de cualquiera de las partes o
cada vez que ilega el plazo fijado para el pago de los salarios segun costumbre en la
localidad o cunado se termine la obra;
2. Que los obreros de una empresa fabril, que han celebrado contrato, ya individual ya
colectivamente, con ell, sin tiempo fijo, y que se han visto obligados a cesar en sus tarbajos
por haberse declarando paro forzoso en la fabrica en la cual tarbajan, dejan de ser
empleados u obreros de la misma;
3. Que un patrono o sociedad que ha celebrado un contrato colectivo de trabajo con sus
osbreros sin tiempo fijo de duracion y sin ser para una obra determiminada y que se niega a
readmitir a dichos obreros que cesaron como consecuencia de un paro forzoso, no es
culpable de practica injusta in incurre en la sancion penal del articulo 5 de la Ley No. 213 del
Commonwealth, aunque su negativa a readmitir se deba a que dichos obreros pertenecen a
un determinado organismo obrero, puesto que tales ya han dejado deser empleados suyos
por terminacion del contrato en virtud del paro.
The respondent National Labor Union, Inc., on the other hand, prays for the vacation of the
judgement rendered by the majority of this Court and the remanding of the case to the Court of
Industrial Relations for a new trial, and avers:
1. That Toribio Teodoro's claim that on September 26, 1938, there was shortage of leather
soles in ANG TIBAY making it necessary for him to temporarily lay off the members of the
National Labor Union Inc., is entirely false and unsupported by the records of the Bureau of
Customs and the Books of Accounts of native dealers in leather.
2. That the supposed lack of leather materials claimed by Toribio Teodoro was but a scheme
to systematically prevent the forfeiture of this bond despite the breach of his CONTRACT
with the Philippine Army.
3. That Toribio Teodoro's letter to the Philippine Army dated September 29, 1938, (re
supposed delay of leather soles from the States) was but a scheme to systematically prevent
the forfeiture of this bond despite the breach of his CONTRACT with the Philippine Army.
4. That the National Worker's Brotherhood of ANG TIBAY is a company or employer union
dominated by Toribio Teodoro, the existence and functions of which are illegal. (281 U.S.,
548, petitioner's printed memorandum, p. 25.)
5. That in the exercise by the laborers of their rights to collective bargaining, majority rule
and elective representation are highly essential and indispensable. (Sections 2 and 5,
Commonwealth Act No. 213.)
6. That the century provisions of the Civil Code which had been (the) principal source of
dissensions and continuous civil war in Spain cannot and should not be made applicable in
interpreting and applying the salutary provisions of a modern labor legislation of American
origin where the industrial peace has always been the rule.
7. That the employer Toribio Teodoro was guilty of unfair labor practice for discriminating
against the National Labor Union, Inc., and unjustly favoring the National Workers'
Brotherhood.
8. That the exhibits hereto attached are so inaccessible to the respondents that even with the
exercise of due diligence they could not be expected to have obtained them and offered as
evidence in the Court of Industrial Relations.
9. That the attached documents and exhibits are of such far-reaching importance and effect
that their admission would necessarily mean the modification and reversal of the judgment
rendered herein.
The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration of the
respondent National Labor Union, Inc.
In view of the conclusion reached by us and to be herein after stead with reference to the motion for
a new trial of the respondent National Labor Union, Inc., we are of the opinion that it is not necessary
to pass upon the motion for reconsideration of the Solicitor-General. We shall proceed to dispose of
the motion for new trial of the respondent labor union. Before doing this, however, we deem it
necessary, in the interest of orderly procedure in cases of this nature, in interest of orderly procedure
in cases of this nature, to make several observations regarding the nature of the powers of the Court
of Industrial Relations and emphasize certain guiding principles which should be observed in the trial
of cases brought before it. We have re-examined the entire record of the proceedings had before the
Court of Industrial Relations in this case, and we have found no substantial evidence that the
exclusion of the 89 laborers here was due to their union affiliation or activity. The whole transcript
taken contains what transpired during the hearing and is more of a record of contradictory and
conflicting statements of opposing counsel, with sporadic conclusion drawn to suit their own views. It
is evident that these statements and expressions of views of counsel have no evidentiary value.
The Court of Industrial Relations is a special court whose functions are specifically stated in the law
of its creation (Commonwealth Act No. 103). It is more an administrative than a part of the integrated
judicial system of the nation. It is not intended to be a mere receptive organ of the Government.
Unlike a court of justice which is essentially passive, acting only when its jurisdiction is invoked and
deciding only cases that are presented to it by the parties litigant, the function of the Court of
Industrial Relations, as will appear from perusal of its organic law, is more active, affirmative and
dynamic. It not only exercises judicial or quasi-judicial functions in the determination of disputes
between employers and employees but its functions in the determination of disputes between
employers and employees but its functions are far more comprehensive and expensive. It has
jurisdiction over the entire Philippines, to consider, investigate, decide, and settle any question,
matter controversy or dispute arising between, and/or affecting employers and employees or
laborers, and regulate the relations between them, subject to, and in accordance with, the provisions
of Commonwealth Act No. 103 (section 1). It shall take cognizance or purposes of prevention,
arbitration, decision and settlement, of any industrial or agricultural dispute causing or likely to cause
a strike or lockout, arising from differences as regards wages, shares or compensation, hours of
labor or conditions of tenancy or employment, between landlords and tenants or farm-laborers,
provided that the number of employees, laborers or tenants of farm-laborers involved exceeds thirty,
and such industrial or agricultural dispute is submitted to the Court by the Secretary of Labor or by
any or both of the parties to the controversy and certified by the Secretary of labor as existing and
proper to be by the Secretary of Labor as existing and proper to be dealth with by the Court for the
sake of public interest. (Section 4, ibid.) It shall, before hearing the dispute and in the course of such
hearing, endeavor to reconcile the parties and induce them to settle the dispute by amicable
agreement. (Paragraph 2, section 4, ibid.) When directed by the President of the Philippines, it shall
investigate and study all industries established in a designated locality, with a view to determinating
the necessity and fairness of fixing and adopting for such industry or locality a minimum wage or
share of laborers or tenants, or a maximum "canon" or rental to be paid by the "inquilinos" or tenants
or less to landowners. (Section 5, ibid.) In fine, it may appeal to voluntary arbitration in the settlement
of industrial disputes; may employ mediation or conciliation for that purpose, or recur to the more
effective system of official investigation and compulsory arbitration in order to determine specific
controversies between labor and capital industry and in agriculture. There is in reality here a
mingling of executive and judicial functions, which is a departure from the rigid doctrine of the
separation of governmental powers.
In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673, promulgated
September 13, 1939, we had occasion to joint out that the Court of Industrial Relations et al., G. R.
No. 46673, promulgated September 13, 1939, we had occasion to point out that the Court of
Industrial Relations is not narrowly constrained by technical rules of procedure, and the Act requires
it to "act according to justice and equity and substantial merits of the case, without regard to
technicalities or legal forms and shall not be bound by any technicalities or legal forms and shall not
be bound by any technical rules of legal evidence but may inform its mind in such manner as it may
deem just and equitable." (Section 20, Commonwealth Act No. 103.) It shall not be restricted to the
specific relief claimed or demands made by the parties to the industrial or agricultural dispute, but
may include in the award, order or decision any matter or determination which may be deemed
necessary or expedient for the purpose of settling the dispute or of preventing further industrial or
agricultural disputes. (section 13, ibid.) And in the light of this legislative policy, appeals to this Court
have been especially regulated by the rules recently promulgated by the rules recently promulgated
by this Court to carry into the effect the avowed legislative purpose. The fact, however, that the
Court of Industrial Relations may be said to be free from the rigidity of certain procedural
requirements does not mean that it can, in justifiable cases before it, entirely ignore or disregard the
fundamental and essential requirements of due process in trials and investigations of an
administrative character. There are primary rights which must be respected even in proceedings of
this character:
(1) The first of these rights is the right to a hearing, which includes the right of the party
interested or affected to present his own case and submit evidence in support thereof. In the
language of Chief Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed.
1129, "the liberty and property of the citizen shall be protected by the rudimentary
requirements of fair play.
(2) Not only must the party be given an opportunity to present his case and to adduce
evidence tending to establish the rights which he asserts but the tribunal must consider the
evidence presented. (Chief Justice Hughes in Morgan v. U.S. 298 U.S. 468, 56 S. Ct. 906,
80 law. ed. 1288.) In the language of this court inEdwards vs. McCoy, 22 Phil., 598, "the right
to adduce evidence, without the corresponding duty on the part of the board to consider it, is
vain. Such right is conspicuously futile if the person or persons to whom the evidence is
presented can thrust it aside without notice or consideration."
(3) "While the duty to deliberate does not impose the obligation to decide right, it does imply
a necessity which cannot be disregarded, namely, that of having something to support it is a
nullity, a place when directly attached." (Edwards vs. McCoy, supra.) This principle
emanates from the more fundamental is contrary to the vesting of unlimited power anywhere.
Law is both a grant and a limitation upon power.
(4) Not only must there be some evidence to support a finding or conclusion (City of Manila
vs. Agustin, G.R. No. 45844, promulgated November 29, 1937, XXXVI O. G. 1335), but the
evidence must be "substantial." (Washington, Virginia and Maryland Coach Co. v. national
labor Relations Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means
such relevant evidence as a reasonable mind accept as adequate to support a conclusion."
(Appalachian Electric Power v. National Labor Relations Board, 4 Cir., 93 F. 2d 985, 989;
National Labor Relations Board v. Thompson Products, 6 Cir., 97 F. 2d 13, 15; Ballston-
Stillwater Knitting Co. v. National Labor Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . . The
statute provides that "the rules of evidence prevailing in courts of law and equity shall not be
controlling.' The obvious purpose of this and similar provisions is to free administrative
boards from the compulsion of technical rules so that the mere admission of matter which
would be deemed incompetent inn judicial proceedings would not invalidate the
administrative order. (Interstate Commerce Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct.
563, 568, 48 Law. ed. 860; Interstate Commerce Commission v. Louisville and Nashville R.
Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v. Abilene and
Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed. 624.) But this assurance of a desirable
flexibility in administrative procedure does not go far as to justify orders without a basis in
evidence having rational probative force. Mere uncorroborated hearsay or rumor does not
constitute substantial evidence. (Consolidated Edison Co. v. National Labor Relations Board,
59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)"
(5) The decision must be rendered on the evidence presented at the hearing, or at least
contained in the record and disclosed to the parties affected. (Interstate Commence
Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 Law. ed. 431.) Only by
confining the administrative tribunal to the evidence disclosed to the parties, can the latter be
protected in their right to know and meet the case against them. It should not, however,
detract from their duty actively to see that the law is enforced, and for that purpose, to use
the authorized legal methods of securing evidence and informing itself of facts material and
relevant to the controversy. Boards of inquiry may be appointed for the purpose of
investigating and determining the facts in any given case, but their report and decision are
only advisory. (Section 9, Commonwealth Act No. 103.) The Court of Industrial Relations
may refer any industrial or agricultural dispute or any matter under its consideration or
advisement to a local board of inquiry, a provincial fiscal. a justice of the peace or any public
official in any part of the Philippines for investigation, report and recommendation, and may
delegate to such board or public official such powers and functions as the said Court of
Industrial Relations may deem necessary, but such delegation shall not affect the exercise of
the Court itself of any of its powers. (Section 10, ibid.)
(6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own
independent consideration of the law and facts of the controversy, and not simply accept the
views of a subordinate in arriving at a decision. It may be that the volume of work is such that
it is literally Relations personally to decide all controversies coming before them. In the
United States the difficulty is solved with the enactment of statutory authority authorizing
examiners or other subordinates to render final decision, with the right to appeal to board or
commission, but in our case there is no such statutory authority.
(7) The Court of Industrial Relations should, in all controversial questions, render its decision
in such a manner that the parties to the proceeding can know the various issues involved,
and the reasons for the decision rendered. The performance of this duty is inseparable from
the authority conferred upon it.
In the right of the foregoing fundamental principles, it is sufficient to observe here that, except as to
the alleged agreement between the Ang Tibay and the National Worker's Brotherhood (appendix A),
the record is barren and does not satisfy the thirst for a factual basis upon which to predicate, in a
national way, a conclusion of law.
This result, however, does not now preclude the concession of a new trial prayed for the by
respondent National Labor Union, Inc., it is alleged that "the supposed lack of material claimed by
Toribio Teodoro was but a scheme adopted to systematically discharged all the members of the
National Labor Union Inc., from work" and this avernment is desired to be proved by the petitioner
with the "records of the Bureau of Customs and the Books of Accounts of native dealers in leather";
that "the National Workers Brotherhood Union of Ang Tibay is a company or employer union
dominated by Toribio Teodoro, the existence and functions of which are illegal." Petitioner further
alleges under oath that the exhibits attached to the petition to prove his substantial avernments" are
so inaccessible to the respondents that even within the exercise of due diligence they could not be
expected to have obtained them and offered as evidence in the Court of Industrial Relations", and
that the documents attached to the petition "are of such far reaching importance and effect that their
admission would necessarily mean the modification and reversal of the judgment rendered herein."
We have considered the reply of Ang Tibay and its arguments against the petition. By and large,
after considerable discussions, we have come to the conclusion that the interest of justice would be
better served if the movant is given opportunity to present at the hearing the documents referred to
in his motion and such other evidence as may be relevant to the main issue involved. The legislation
which created the Court of Industrial Relations and under which it acts is new. The failure to grasp
the fundamental issue involved is not entirely attributable to the parties adversely affected by the
result. Accordingly, the motion for a new trial should be and the same is hereby granted, and the
entire record of this case shall be remanded to the Court of Industrial Relations, with instruction that
it reopen the case, receive all such evidence as may be relevant and otherwise proceed in
accordance with the requirements set forth hereinabove. So ordered.
Avancea, C. J., Villa-Real, Imperial, Diaz, Concepcion and Moran, JJ., concur.








Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 76710 December 21, 1987
ANTONIO ONG, SR., petitioner,
vs.
HENRY M. PAREL in his capacity as Regional Director of the Ministry of Labor and
Employment, ROWENA RETERACION, ROSEMARIE VERZO SANDRA FERNANDEZ, DORY
TUJARDON, GINA PENALVEL, ELMA SILAO, LUZVIMINDA MORENO, ROSALIE FAJERNO,
MARIVIC SUN, NENT MORENO, ET AL.,respondents.

GUTIERREZ, JR., J .:
This is a special civil action for certiorari seeking to annul on the ground of lack of jurisdiction the
following: (a) the Final Order for Compliance dated October 7, 1986 issued by the public respondent
through his assistant Domingo H. Zapanta ordering petitioner to pay the sum of P254,841.26
representing the claims of thirteen (13) complainant workers; (b) the Order dated November 18,
1986, denying the petitioner's motion for reconsideration for lack of merit; and (c) the Writ of
Execution dated December 12, 1986 issued by said Regional Director to enforce the aforementioned
orders. A writ of prohibition is also prayed for in this petition to command the public respondent to
desist from the conduct of further proceedings on the matter in question.
The petitioner is the owner of the Mansion House Restaurant located at No. 1 1, J.M. Basa Street,
Iloilo City.
On July 28, 1986, private respondent Rowena Reteracion, president of the Mansion House Genuine
Labor Union filed a request for the inspection of the petitioner's restaurant with Regional Office No.
VI of the Ministry of Labor and Employment at Iloilo City. The request for inspection was in
connection with the failure of the petitioner to comply with certain labor standard laws such as those
relating to the payment of the minimum wage, the emergency cost of living allowance, the 13th
month pay and the 5-day incentive leave pay.
On July 30, 1986, an on-the-spot inspection of the petitioner's business premises was conducted by
the representatives from MOLE's regional office at Bacolod City in obedience to Office Order No.
027, series of 1986 issued by authority of the public respondent regional director. Since the
petitioner was not able to present his business records then on the allegation that they were with his
accountant, he was given five days or until August 4, 1986 to present said records. The inspection
resulted in the interview of thirteen employees who signed affidavits supporting the charges of non-
compliance with certain labor standard laws against the petitioner.
On August 4, 1986, the officers of MOLE's Labor Standard Welfare Office paid a second visit to the
petitioner's business premises to obtain the requested employment records for inspection. Again, the
petitioner failed to present the records.
On August 7, 1986, a subpoena duces tecum was issued by the public respondent requiring the
petitioner to submit the daily time records and payrolls relating to the payment of wages, 13th month
pay, and incentive leave pay of the employees in his business establishment.
On August 12, 1986, the petitioner, instead of complying with the subpoena duces tecum sent a
letter to the public respondent through the labor district officer requesting for clarification as to the
basis of the latter's inspection of his premises. He inquired whether the said inspection was routinary
or one based on a complaint filed against him.
On August 14, 1986, the last day for presenting certain employment records for inspection, the
petitioner failed to comply.
On September 2, 1986, a narrative report was submitted to the public respondent by his duly
designated representatives regarding the results of the inspection made on the petitioner's business
premises. A summary of the computation of the claims of the thirteen workers based on the affidavits
they executed was attached to the report.
On October 7, 1986, the public respondent issued the questioned Final Order for Compliance, with
the following dispositive portion
IN VIEW THEREOF, respondent Antonio Ong, Sr., owner of Mansion House
Restaurant, is hereby ordered to pay the sum of TWO HUNDRED FIFTY FOUR
THOUSAND EIGHT HUNDRED FORTY ONE PESOS and 26/100 (P254,841.26)
representing the claims of thirteen (13) complainant workers as stated in the
attached sheet of the foregoing mentioned Summary of Findings within ten (10) days
from receipt of this Notice. (p. 21, Rollo; Annex "A " of Petition).
The amount of P254,841.26 representing the total money claims of the thirteen claimant workers is
broken down in said order as follows:
1. Underpayment of the Minimum Wage Rate P136,087.98
2. Non-payment of Emergency
Cost of Living Allowance 107,769.93
3. Underpayment of 13th month pay 8,463.35
4. Non-payment of 5 days incentive leave pay 2,520.00
TOTAL P254,841.26
(p. 21, Rollo)
On October 13, 1986, the petitioner wrote the public respondent a request for reconsideration of the
above Final Order for Compliance on two grounds, namely: (1) The respondent's lack of jurisdiction
to entertain money claims which properly fall within the jurisdiction of the National Labor Relations
Commission; and (2) denial of due process for the alleged failure of the public respondent to furnish
the petitioner with copies of the affidavits of the thirteen claimant workers and the narrative report
dated September 2, 1986 submitted to the public respondent by the Labor Standard Welfare Officers
who inspected the petitioner's business premises.
On November 18, 1986, the public respondent denied the petitioner's motion for reconsideration and
ruled that there was no lack of jurisdiction considering that the public respondent had validly
assumed jurisdiction over the subject matter under Article 128(b) of the Labor Code in the exercise
of his enforcement powers. The public respondent further ruled that there was no denial of due
process owing to the fact that the petitioner was given five days to present his employment records
and another ten days to comply with the subpoena duces tecum but still he failed to do as required
under Section 11, Rule X, Book III of the Implementing Rules of the Labor Code.
On December 9, 1986, the private respondents moved for the issuance of a writ of execution of the
Final Order for Compliance dated October 7, 1986.
On December 12, 1986, a writ of execution was issued by the public respondent. By virtue thereof,
the petitioner issued a postdated check in the amount of P 254,857.26 representing the total money
claims of the private respondents.
On December 15, 1986, this petition was filed presenting the following legal issues:
1. WHETHER OR NOT THE RESPONDENT REGIONAL DIRECTOR HAS ACTED WITHOUT OR
IN EXCESS OF HIS JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION IN
ENTERTAINING THE MONEY CLAIMS OF THE PRIVATE RESPONDENTS AND IN ISSUING THE
'FINAL ORDER OF COMPLIANCE ORDERING YOUR PETITIONER TO PAY A TOTAL SUM OF
P254,841.26 ...
2. WHETHER OR NOT THE RESPONDENT REGIONAL DIRECTOR HAS ACTED WITHOUT OR
IN EXCESS OF HIS JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION IN ISSUING THE
ORDER DATED NOVEMBER 18, 1986 DENYING THE MOTION FOR RECONSIDERATION OF
YOUR PETITIONER TO THE ABOVE-MENTIONED ORDER AND IN ISSUING MOTU PROPRIO A
WRIT OF EXECUTION DATED DECEMBER 12, 1986, ...
3. ASSUMING BUT WITHOUT ADMITTING THAT THE RESPONDENT REGIONAL DIRECTOR
HAS JURISDICTION TO ENTERTAIN THE MONEY CLAIMS OF PRIVATE RESPONDENTS,
WHETHER OR NOT DUE PROCESS OF LAW WAS OBSERVED IN THE ISSUANCE OF THE
ORDERS AND WRIT OF EXECUTION ABOVE-MENTIONED. (Pp. 1-2, Petition)
The petitioner maintains that all money claims of workers arising from employer-employee
relationship are within the exclusive jurisdiction of the Labor Arbiter as provided under Article 217 of
the Labor Code, as amended. He alleges that the public respondent acted without or in excess of his
jurisdiction amounting to grave abuse of discretion in taking cognizance of the private respondents'
claims. Moreover, the petitioner contends that if ever the public respondent is empowered to award a
money judgment, his authority is limited to claims amounting to only P100,000.00 under Policy
Instruction No. 7 of the Ministry of Labor and Employment. The petitioner further asserts that he was
denied due process of law because he was never given the chance to controvert the complaint
against him and neither was he given the opportunity to present any evidence to refute the findings
of the inspectors who visited his business establishment.
The private respondents, on the other hand, rely on the visitorial and enforcement powers granted to
the public respondent under Art. 128 of the Labor Code. They alleged that the petitioner, after having
defied the repeated requests of the public respondent to submit his employment records. could not
validly claim that he was not given the chance to be heard and to present his side.
The Solicitor General agrees with the petitioner and submits that under Art. 128 of the Labor Code,
the public respondent is not empowered to adjudicate money claims because such authority is
reposed in the Labor Arbiter and the National Labor Relations Commission as provided under Art.
127 of the same Code, as amended, The Solicitor General further adds that the visitorial and
enforcement powers of the public respondent under Art. 128 of the Labor Code are limited to awards
not exceeding P100,000.00 pursuant to MOLE Policy Instruction No. 7.
Before we resolve the principal issue of whether or not the Regional Director of the Ministry of Labor
and Employment has the authority to award money claims on the strength of his visitorial and
enforcement powers, we quote the applicable provisions of law.
Article 128, sub-paragraphs (a) and (b) of the Labor Code, as amended, provide that:
Visitorial and enforcement power. (a) The Secretary of Labor or his duly
authorized representatives, including labor regulation officers, shall have access to
employers' records and premises at any time of the day or night whenever work is
being undertaken therein, and the right to copy therefrom, to question any employee
and investigate any fact, condition or matter which may be necessary to determine
violations or which may aid in the enforcement of this Code and of any labor law,
wage order or rules and regulations issued pursuant thereto.
(b) The Minister of Labor or his duly authorized representatives shall have the power
to order and administer, after due notice and hearing, compliance with the labor
standards provisions of this Code based on the findings of labor regulation officers or
industrial safety engineers made in the course of inspection, and to issue writs of
execution to the appropriate authority for the enforcement of their order, except in
cases where the employer contests the findings of the labor regulations officer and
raises issues which cannot be resolved without considering evidentiary matters that
are not verifiable in the normal course of inspection. (As amended by Section 1, PD
No. 1691, May 1, 1980)
xxx xxx xxx
The first paragraph of MOLE Policy Instructions No. 7 reads:
Under PD 850, labor standards cases have been taken from the arbitration system
and placed under the enforcement system except where a) questions of law are
involved as determined by the Regional Director, b) the amount involved exceeds
P100,000 or over 40% of the equity of the employer, whichever is lower, c) the case
requires evidentiary matters not disclosed or verified in the normal course of
inspection, or d) there is no more employer- employee relationship.
Article 217 of the Labor Code enumerates the cases falling under the jurisdiction of Labor Arbiters
and the National Labor Relations Commission, to wit:
Jurisdiction of Labor Arbiters and the Commission. (a) The Labor Arbiters shall
have the original and exclusive jurisdiction to hear and decide within thirty (30)
working days after submission of the case by the parties for decision, the following
cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and
other terms and conditions of employment;
3. All money claims of workers, including those based on non-
payment or underpayment of wages, overtime compensation,
separation pay and other benefits provided by law or appropriate
agreement, except claims for employees' compensation, social
security, medicare and maternity benefits;
4. Cases involving household services and
5. Cases arising from any violation of Article 265 of this Code,
including questions involving the legality of strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided
by Labor Arbiters. (As amended by Section 2, Batas Pambansa Blg. 130, Aug. 21,
1981 and Section 2, Batas Pambansa Blg. 227, June 1, 1982).
A careful perusal of the aforequoted provisions shows that the instant petition is impressed with
merit. Article 217 of the Labor Code is written in unequivocal terms. It uses the words "original and
exclusive." In Aparri v. Court of Appeals (127 SCRA 231), we ruled that:
... It is the rule in statutory construction that if the words and phrases of a statute are
not obscure or ambiguous, its meaning ' 9 and the intention of the legislature must be
determined from the language employed, and, where there is no ambiguity in the
words, there is no room for construction (Black on Interpretation of Laws, Sec. 5 1).
...
Thus, with respect to the money claims of workers such as those relating to the under-payment of
the minimum wage rate and 13th month pay and the non-payment of the emergency cost of living
allowance and 5-day incentive leave pay, as in the case at bar, the original and exclusive jurisdiction
to hear and decide cases involving said claims pertains to the labor arbiters alone. "Original
jurisdiction means jurisdiction to take cognizance of a cause at its inception, try it and pass judgment
upon the law and facts. Exclusive jurisdiction precludes the Idea of co-existence and refers to
jurisdiction possessed to the exclusion of others." (pp. 673 and 1251, Black's Law Dictionary) Article
217 of the Labor Code does not empower the regional director to share in the "original and exclusive
jurisdiction" conferred on the labor arbiters. (See Zambales Base Metals, Inc. v. Minister of Labor,
146 SCRA 50).
We agree with the submission made by the Solicitor General that under Article 128 of the Labor
Code, the regional director's power to visit the establishment of the employer extends only insofar as
checking compliance with labor standard laws is concerned. If the inspection results in a finding that
the employer has violated certain labor standard laws, then, the regional director must order the
necessary rectifications. However, this does not include adjudication of money claims clearly within
the ambit of the labor arbiter's authority under Article 217 of the Code.
Considering that the regional director, in the exercise of his visitorial and enforcement powers under
Art. 128 of the Labor Code, has definitely no authority to award money claims properly falling within
the jurisdiction of the labor arbiter as provided in Art. 217 of the same Code, the provision in MOLE
Policy Instructions No. 7 which limits the regional director's authority to amounts not exceeding
P100,000.00 refers to the enforcement of labor standards laws by the regional director in the
exercise of his visitorial and enforcement powers. The P100,000.00 limit grants no implied power to
adjudicate claims for monetary benefits filed by the complainant workers of an establishment.
On the corrollary issue of whether or not there was denial of due process in the exercise of the
regional director's visitorial and enforcement powers the records belie the claim that the petitioner
was not given the chance to present his side and to refute the findings of the inspectors who visited
his establishment. During the initial on-the-spot inspection made by the public respondent on the
petitioner's business premises, the petitioner's inability to present his business records was a clear
violation of Book III, Rule X, Section II of the Implementing Rules and Regulations of the Labor Code
which provides that:
Sec. II. Place of records. All employment records of the employees of an employer
shall be kept and maintained in or about the premises of the workplace. The
premises of a workplace shall be understood to mean the main or branch office or
establishment, if any, depending upon where the employees are regularly assigned.
The keeping of the employee's records in another place is prohibited.
Notwithstanding the violation, the public respondent gave the petitioner five days to produce his
employment records. On the second visit made by the public respondent, the petitioner still failed to
present the required records. Finally, when a subpoena duces tecum was issued, the petitioner,
instead of complying, sent a letter for clarification regarding the basis of the inspection. The letter
was obviously a dilatory tactic because on the very face of the authority presented to the petitioner
by the representatives of the public respondent during the on-the-spot inspection, it was stated that
the inspection was being made pursuant to a letter-request of one of his employees. Rowena
Reteracion, as President of the labor union in his business establishment. It is settled that there is no
denial of due process where the petitioner was afforded an opportunity to present his case, (Divine
Word High School v. The National Labor Relations Commission, 143 SCRA 346, 350 citing
Municipality of Daet v. Hidalgo Enterprises, Inc., 138 SCRA 265). The very essence of the right to
due process of law is having one's "day in court." In People v. Retania y Rodelas (95 SCRA 201), we
pronounced that:
xxx xxx xxx
... [D]ay in court' according to the authorities means the affording of an opportunity to
be heard (11 words and Phrases Judicially Defined, paragraphs 119 and 120). It is
only when a party is denied of the opportunity to be heard that it can be said that he
is denied his day in court. (Rovo v. Gaw Ghee Kiong, O.G. Vol. 49, p. 1021; Monson
v. Del Rosario, O.G. Vol. 58, p. 1978). (at p. 210)
WHEREFORE, the petition is hereby GRANTED. The questioned orders of the public respondent
dated October 7, 1986 and November 1, 1986, are SET ASIDE as NULL and VOID for lack of
jurisdiction. The money claims of private respondents are remanded to the corresponding labor
arbiter for appropriate action with the directive that the same be heard and decided without delay.
SO ORDERED.
Fernan (Chairman), Feliciano, Bidin and Cortes, JJ., concur.








Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 73680 July 10, 1986
DANILO O. ALMOITE petitioner,
vs.
PACIFIC ARCHITECTS & ENGINEERS, INC., RESOURCE MANAGEMENT INTERNATIONAL
INC. AND/OR DONALD A. JONES AND THE NATIONAL LABOR RELATIONS
COMMISSION, respondents.
Chavez, Hechanova & Lim Law Office for petitioner.
CRUZ, J .:
The petitioner is before us to challenge his alleged illegal dismissal by the private respondent. He
invokes due process and claims the absence of a valid cause for his removal. The decision of the
National Labor Relations Commission sustaining the private respondent is the subject of this
review.
1

The private respondent is a firm hired by the Ministry of Public Works and Highways to oversee
various government construction projects. On April 25, 1983, it employed the petitioner to supervise
construction of the Zamboanga Area Shop Project, at P 4,000.00 a month. On August 4, 1983, he
was given a 50% raise in salary and assigned a wider area of supervision, including the Zamboanga
City area. On August 24, 1983, a new resident engineer was assigned to the Zamboanga Area Shop
Project and asked to report to the petitioner for instruction and training. On June 26, 1984, the
services of this engineer were terminated and taken over by the petitioner. On July 30, 1984, owing
to complaints of the Ministry of Public Works and Highways of certain construction defects in the
said project, the petitioner was relieved as senior resident engineer thereof. On August 3, 1984, he
explained his side regarding the said defects. On August 8, 1984, he filed a report dated August 2,
1984, concerning his findings on the construction defects. On August 15, 1984, he was formally
notified of the termination of his services effective August 31, 1984.
2
The petitioner then filed a complaint for
illegal dismissal which was decided against him by the labor arbiter and later by the NLRC.
We reject outright as clearly untenable the petitioner's claim that he was denied due process.
His allegation is that the decision of the labor arbiter was rendered one day before the position paper
in support of the complaint was received, the implication being that the said decision was reached
without considering the petitioner's arguments.
3
There is also the suggestion that the position paper was filed on time.
The records show otherwise and suggest a deliberate attempt of the petitioner to mislead this Court.
As early as December 17, 1984, the labor arbiter had given the parties the opportunity to file their
respective position papers not later than January 7, 1985, or within an initial period of 21 days. On
January 7, 1985, the labor arbiter, acting on the manifestation of the parties, granted the private
respondent an additional five days to file its position paper and the petitioner five days to file his
reply, although at that time he had not even filed his position paper. On January 22, 1985, the
parties agreed to submit simultaneous position papers not later than February 10, 1985, to serve as
the basis for the resolution of the case. On February 11, 1985, the private respondent asked for a l0-
day extension and on February 12, 1985, the petitioner asked for a 15-day extension. The private
respondent filed its position paper on February 22, 1985, but on February 26, 1985, the petitioner
asked for still another extension, of five days, until March 4, 1985. The petitioner thus had the
chance to present his side from December 18, 1984 to March 4, 1985,
4
or during a period of more than two-
and-a-half months.
The petitioner did not meet even the final deadline on March 4, 1985. In the end, he did file his
position paper, but only on March 14, 1985, or ten days later.
5
He was already ten days late.
The petitioner is aware of all these and yet has the temerity now to claim that he has been deprived
of the right to be heard. When it is considered that his position paper, although filed out of time, was
nevertheless included in the records elevated to the National Labor Relations Commission, to which
he had submitted his memorandum of appeal dated April 2, 1985, and his motion for reconsideration
dated October 7, 1985, it is difficult to understand how he can honestly claim that he was not given
his day in court,
It is not denial of the right to be heard but denial of the opportunity to be heard that constitutes
violation of due process of law.
6
In this case, the petitioner was given not only the opportunity to be heard, which he forfeited in
the proceedings before the labor arbiter, but also the right to be heard, which he actually exercised through his various representations
before the NLRC.
The petitioner must also fail on the merits because he has not proved that his dismissal was illegal.
By contrast, the private respondent has satisfactorily established the legal basis for his removal, to
wit, loss of confidence in him because of incompetence and dishonesty, as found by the labor arbiter
and affirmed by the National Labor Relations Commission. Conformably to established
jurisprudence,
7
we accept such findings in the absence of a showing that they were reached arbitrarily or with grave abuse of
discretion by the respondent labor body.
The petitioner makes much of the fact that he himself had complained about the construction defects
and that it was because of his "expose " that he was eased out of his employment. Interestingly, this
matter was even announced in the papers, at whose instance we do not venture to guess, clippings
of which are annexed to the instant petition.
8
It appears from the record, however, that the petitioner's report concerning
these defects was submitted after their discovery by the Ministry of Public Works and Highways and after he himself had already been asked
to explain them. The report, which was dated August 2, 1984, was received by the private respondent on August 8, 1984.
9
This was 9 days
after the petitioner had been relieved as senior resident engineer of the Zamboanga Shop Area Project precisely because of such defects.
There is also his claim that he could not be held responsible for the construction defects because
much of the project was done when he was not the resident engineer thereof. The evidence shows,
however, that he continued to be the supervisor of the Zamboanga Shop Area Project even after his
promotion and that he visited the project two or three times a week until he actually took over again
as resident engineer.
10
During that period he never called the attention of the private respondent to any defect in the project, either
in the plans and specifications or in their execution.
11
It was only after his attention was called
12
that the petitioner himself pointed to these
defects as if it was he who had made the discovery. He was a Johnny-come-lately, and what is worse is that he assumed the posture of an
Idealistic crusader, possibly to deflect the blame from him. His conduct would have been more credible, and his motives less suspect, if he
had acted a little earlier.
His tardy action on this matter would, in the words of the labor arbiter, "lend credence to the charge
of Mr. George Loo (of Footstep Construction Co.) that Eng. Catis was asking P20,000.00 to be given
to the petitioner and that petitioner had proposed to the former that they share on a 60-40 basis
whatever savings generated from non-compliance of specs and plans."
13
It is significant that when questioned
on this matter during the meeting called to investigate the defects on August 13, 1984, the petitioner refused to answer. And when, at the
same meeting, he was asked why he called the contractor, Footstep, on August 8, 1984, before presenting his report of August 2, 1984, the
petitioner's reply was simply "No Comment. "
14

In none of his pleadings does the petitioner explain his strange behavior on these serious charges
during that meeting of August 13, 1984. And while it is true that he later denied them in his position
paper and his motion for reconsideration, it still seems odd that he had not at least belied the
charges when they were made, or, even better, expressed righteous indignation over them, instead
of simply saying "No comment" as if he really had something to conceal. This is hardly the conduct
of a person unjustly accused, particularly if his own personal integrity is impugned.
No less important are the warnings given to him by the private respondent for approving
overstatements of accomplishment by the contractor,
15
on which there is no record of denial or justification from him.
As a consequence of his acts, the contractors were able to collect payments not yet due or for work not yet done.
In any event, these factual findings made by the labor authorities support the claim of loss of
confidence by the private respondent in the petitioner's competence and integrity. This is a sufficient
ground for his dismissal. As for retrenchment, which is another justification raised by the private
respondent, it is settled that where there is need for reduction of the work force, management has
the right to choose whom to lay off, depending on the work still required to be done and the qualities
of the workers to be retained.
16
The project having been practically completed, and considering the loss of confidence in the
petitioner, his dismissal for economic reasons by the private respondent cannot be declared unlawful.
A little more candor from litigants can avoid the filing of baseless claims like this which take up much
of the valuable time of the courts. It should be remembered that the speedy disposition of cases is
the obligation and goal not only of the judicial and quasi-judicial bodies but of the citizenry as well for
whom, after all, this guarantee is made. This constitutional objectiv
17
is better pursued and may be achieved in
time with the particular cooperation of the suitors and their lawyers, who should be as specially concerned as the judiciary in the expeditious
administration of justice.
WHEREFORE, this petition is dismissed, with costs against the petitioner.
SO ORDERED.
Abad Santos, (Chairman), Yap, Narvasa and Melencio-Herrera, JJ., concur
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-5621 March 25, 1953
PHILIPPINE MOVIE PICTURES WORKERS' ASSOCIATION, petitioner,
vs.
PREMIERE PRODUCTIONS, INC., respondent.
Cipriano Cid for petitioner.
Salvador C. Bayani for respondent.
BAUTISTA ANGELO, J .:
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.
Paras, C.J., Pablo, Bengzon, Padilla, Reyes, Jugo and Labrador, JJ., concur.
Tuason and Montemayor, JJ., concur in the result.

























Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-67880 September 15, 1989
FELIX ESMALIN, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (3rd Division) and CARE
PHILIPPINES, respondents.
Pedro A. Lopez for petitioner.
Eugene A. Tan for private respondent.

FERNAN, C.J .:
Before Us is a petition for review by certiorari
1
of the decision
2
of the National Labor Relations
Commission, Third Division, declaring the petitioner's dismissal from private respondent, CARE
Philippines, justified.
As gathered from the records, the facts of this case are as follows:
The petitioner, Felix Esmalin has been employed by CARE Philippines for almost six (6) years, three
(3) years of which as warehouseman of the company, assigned at Transcon Warehouse in Bacood,
Sta. Mesa, Manila. Among his duties and responsibilities were: to expedite dispatch of all CARE
supplied commodities through monitoring delivery orders; to dispatch and correct bag count; to
coordinate with the shipping clerk on all details concerning arriving shipments, and to make a report
on all arrivals at TRANSCON. As found by the NLRC, Esmalin was occupying a position of trust.
3

The private respondent, CARE Philippines, is a non-profit organization whose primary purpose is to
facilitate and maximize voluntary gifts or reliefs, rehabilitation and reconstruction materials and other
needed commodities, by individuals and organizations outside of the Philippines, to individuals and
organizations in the Philippines, designated by the donors.
4

In a series of thefts involving a total of 17,731 bags of relief goods consisting of soy fortified flour
(SFF) and corn soya milk (CSM) belonging to the U.S. government and stored at the TRANSCON
Bodega of respondent Company, the alleged participation of Esmalin, CARE OIC of said bodega,
was summarized by the Tanodbayan, as follows:
Felix Esmalin was the CARE OIC of TRANSCON Bodega. He cooperated with John
Dupree in retesting in MIT laboratory and in taking samples even not at random until
the original test result of being unfit for human and unfit for animal was changed to
"unfit for human but fit for animal." Thereafter, Letter Orders were made by John
Dupree but only to be applied to CSM and SFF deposited in TRANSCON, Sta. Mesa
bodega. However, he caused withdrawal in favor of Oliver C. Reyes one truck of
good order milk CSM from Pasig Warehouse and brought them to Binan. As OIC
Warehouseman, he should see to it that in every delivery of relief goods to ASF, BAI,
Alabang he must at the return of every trip, take back a copy of the DCR and from
there he could easily detect where the goods were brought and who received them.
But he did not comply with that duty, and his unjustified failure facilitated the
diversion, a conduct emphasizing cooperation in the execution of his role in the
conspiracy.
Esmalin reported at first a small quantity of damaged SFF and CSM; however, with
the loterance (sic) of Orlando Cabrega, who is the USAID Program Specialist and
godfather of Efren C. Reyes in marriage, and without the benefit of inspection, check
or reclassification, he jacked up the number of damaged CSM and SFF and reported/
advised same as due for donation in order not to contaminate the good order relief
goods coming from "SS Thomas Nelson."
Such act manifest (sic) intent for gain to cooperate with the scheme to divert good
order relief goods in big quantities and Cabrega played the leading role in that
respect.
5
(Emphasis supplied.)
The report on the loss of company commodities as wen as the involvement of Esmalin therein was
transmitted by the Criminal Investigation Services (CIS), Armed Forces of the Philippines, on March
9, 1981 to the Tanodbayan
6
which in turn found a prima facie case against the suspects including
Esmalin.
On April 29, 1981, a clearance application for the preventive suspension of Esmalin, leading to his
termination from employment was filed by CARE PHILIPPINES on the ground that the continued
presence of the former poses a serious or imminent danger to the property of the latter. Thus, on the
same day petitioner received from private respondent, a letter signed by its director, Mr. Henry R.
Richards, the pertinent portion of which reads:
This is to inform you that today we are filing with the Ministry of Labor and
Employment an application for clearance to place you under preventive suspension.
Considering that there is an ongoing investigation being conducted by the Criminal
Investigation Service of the Philippine Constabulary involving anomalies in the
movement of CARE food commodities; because these investigations have resulted in
strong reasonable suspicion that you are party to these anomalies considering that
as warehouseman you occupy a sensitive position in relation to the subject of this
investigation, CARE is constrained to place you under preventive suspension
pending final termination of the CIS Investigation.
You are therefore relieved of your duties and responsibilities as warehouseman
effective immediately.
7

The reason for the clearance application to suspend and terminate Esmalin was loss of trust and
confidence.
8

On May 4, 1981, petitioner Esmalin opposed the clearance applied for by private respondents to
place him under preventive suspension, stating that he is not a threat to the life and property of his
employers and co-employees; nor is he a threat to the normal operations of the company,
considering that his job is ministerial and that the on-going investigation conducted on the reported
anomalies has no bearing upon him.
In an Order dated October 22, 1981, the Ministry of Labor, through Director Francisco Estrella
denied the clearance for preventive suspension sought by CARE Philippines and ordered the latter
to immediately reinstate Esmalin to his former position with full back wages less his salary for two (2)
months during which period he was considered to be under disciplinary suspension.
9

Private respondent appealed
10
the Order of Director Estrella to the Ministry of Labor on December 14,
1981. The appeal was dismissed for lack of merit
11
on May 24, 1982.
Not satisfied, CARE Philippines filed a Motion for Reconsideration and Opposition to the Motion for
the Issuance of the Writ of Execution
12
dated June 16, 1982. On September 23, 1982, Deputy Minister
of Labor, Vicente Leogardo, Jr., issued an Order
13
setting aside the Order of May 24, 1982 and
remanding the case to the National Labor Relations Commission, Regional Arbitration Branch for
compulsory arbitration.
The Labor Arbiter conducted a hearing and the parties agreed to submit their respective position
papers and documentary evidence, after which the case was deemed submitted for decision. On
April 8, 1983, Labor Arbiter, Manuel B. Lorenzo, rendered a decision
14
in favor of petitioner, the
pertinent portion of which reads:
In the case at bar, there is no showing that complainant had cooperated and
conspired with the several accused charged before the Tanodbayan and
consequently with the Sandiganbayan. True to the incorruptible saying 'that the
innocent is as bold as a lion while the wicked teeth even no one pursueth. (sic) The
complainant had shown his boldness by pursuing relentlessly his bid for justice
because it was very clear that complainant, Felix Esmalin is not involved in the
irregularities.
In view of the foregoing, this Office cannot close his (sic) eyes from the glaring
evidence of the complainant's innocence, hence, we hold that request for clearance
to terminate is DENIED and respondent is hereby ordered to reinstate the
complainant, Felix Esmalin immediately with full backwages and other benefits
attached to his former position without loss of seniority rights and privileges.
SO ORDERED.
CARE Philippines appealed the decision of the Labor Arbiter to the National Labor Relations
Commission (NLRC). On February 14, 1984, the NLRC promulgated its decision
15
setting aside the
decision of the Labor Arbiter and declaring the dismissal of petitioner, Felix Esmalin, justified. The
ratiocination of the NLRC is stated in its decision, the pertinent portion of which reads:
We find complainant's dismissal proper. It cannot be denied that Esmalin was
occupying a position of trust in respondent company. As warehouseman, he had
access to the property of his employer. The latter therefore had every reason to
expect from him at all times utmost fidelity and diligence in dealing with its property.
So that, with the finding by the CIS and the Tanodbayan that Esmalin was involved in
a series of thefts of company property, and his subsequent indictment therefor, one
cannot say that there was no justifiable cause for the company's loss of trust and
confidence in complainant. In the instant case, the complainant, occupying a position
of trust, has been charged in the Sandiganbayan on two counts for theft of company
property worth hundreds of thousands of pesos, and the evidence against him
appears to be strong. His guilt beyond reasonable doubt or innocence that may be
found later by the Sandiganbayan cannot be the determinative gauge in the final
adjudication of the instant case. It is enough that sufficient substantial evidence has
been established, as this Commission has found, that complainant violated the trust
and confidence reposed in him by his employers, that a justified dismissal can be
pronounced. We cannot, therefore, in conscience compel the respondent company to
take him back for We cannot guarantee his good behavior in the future.
Felix Esmalin filed a Motion for Reconsideration of the above decision, but it was denied. Hence the
instant petition for review by certiorari ** wherein petitioner sets forth the following issues:
1. Whether or not public respondent committed grave abuse of discretion in finding
that petitioner's dismissal was justified;
2. Whether or not public respondent decided a question of substance in a way not in
accordance with law and applicable decisions of the Supreme Court;
3. Whether or not petitioner was denied "due process of law" when he was arbitrarily
relieved of his employment on April 29, 1981.
16

all of which may be synthesized into one single issue, that is, whether or not Esmalin's dismissal is
justified.
Before going into the merits of this case, an important point to consider is the finality of the assailed
order of the Director of Labor dated October 22, 1981 which was the subject of review by the
National Labor Relations Commission whose decision is now before this Court.
The records show that despite reconsideration of the Order of Deputy Minister of Labor Vicente
Leogardo, Jr. dated May 24, 1982 which affirmed the Order of the Director, National Capital Region
dated October 22, 1981 and dismissed respondent's appeal relative thereto, the findings of the
Office of the Minister on the untimeliness of the filing of the appeal memorandum are still as follows:
[1] that the Order of the Regional Director appealed from was received and signed by counsel of
record on October 31, 1981 and by respondent itself on November 5, 1981; [2] that from November
5, 1981, respondent was given ten (10) working days within which to appeal the said Order; [3] that
before the expiration of said period, respondent filed an urgent motion for extension of time to file
appeal memorandum on November 16, 1981 praying for 15 days from November 18. 1981 within
which to file an appeal memorandum and another extension from December 4, 1981 to December
13, 1981; and [4] that since December 13, 1981 falls on Sunday, respondent's appeal memorandum
was filed on December 14, 1981, which allegedly is within the reglementary period.
17

It is well established that a motion for reconsideration and/or an appeal from a decision, award or
order of the Labor Arbiter must be filed within ten (10) working days from receipt of such decision,
award or order, pursuant to the Labor Code.
18
In implementation thereof, Section 6, Rule VIII of the
Revised Rules of the NLRC provides: "No extension of period. No motion or request for extension of the
period within which to perfect an appeal shall be entertained." Hence, the Revised Rules of the National
Labor Relations Commission are clear and explicit and leave no room for interpretation, that the subject
Order of the Director of Labor appealed to the Deputy Minister of Labor has already become final and
executory and can no longer be subject to appeal.
19
Accordingly, the decision of the National Labor
Relations is null and void for lack of jurisdiction and for the same reason, not within the jurisdiction of this
Court to review.
However, even on the merits, a careful review of the records failed to yield a cogent reason to
disturb the assailed Order of Director Estrella dated October 22, 1981.
The bone of contention in this case is the alleged participation of Esmalin, as conspirator in the theft
of a large number of relief goods belonging to the U.S. and intended for delivery to Alabang Stock
Farm, Bureau of Animal Industry, Alabang, Rizal, which were in fact diverted and delivered to Bian,
Laguna.
CARE submits that as warehouseman, Esmalin has full knowledge of the irregularity and the fact
that the incident took place, only shows that he connived with the other indictees and expected profit
from the transaction if disposed, which in fact was so disposed. CARE also pointed out that Esmalin
was physically present as warehouseman-representative when the goods subject of the CIS
investigation were taken out of the Transcon Bodega, yet he allowed goods of excellent condition to
be mixed with alleged damaged commodities.
20

On the other hand, Esmalin taking exception to aforesaid charges, maintained that the PC-CIS
investigation itself clearly shows that withdrawals from the Transcon bodega were covered with the
letter-orders from the American officers of CARE and gate passes prepared by Transcon
warehouseman/supervisors. He insists that said withdrawals were witnessed by CARE and
Transcon officers. In fact, there were three (3) letter-orders submitted covering the delivery of the
disputed goods and 35 gate passes thereof. For this reason, he contends that if there was any
"switching of food commodities" it was not of his own making. According to him, it was a co-
employee Mrs. Adelina Caday who, upon instruction by a superior, prepared the authorization and
D-3 and were the same documents presented to lain for his signature.
Briefly stated, the Regional Director's findings and conclusions read:
Based on the foregoing set of facts, we find that Esmalin's involvement in the
irregularity cited as ground for dismissal has not been clearly and satisfactorily
established. Even the report of the CIS on the incident happened through the
presentation and flow of papers and documents. Esmalin had only ministerial
participation in them. These papers, which are usually letter- orders and gate passes
are not prepared by Esmalin; certainly, he is not to account for the impropriety of its
contents, nor can stop the flow of goods. He therefore, had no direct hand in the
switching much more in the flow of CARE commodities. Therefore, as the
participation of Esmalin in the irregularity is not sufficiently established, the clearance
application, perforce cannot be sustained. However, for affixing his signature on a
document which he should have studied carefully and which he did not, he should be
meted some kind of penalty. His suspension for two (2) months appears to be
appropriate.
21

In fact, even after compulsory arbitration in the National Labor Relations Commission, Regional
Arbitration Branch, the findings in favor of Esmalin remained unaltered. Labor Arbiter Manuel B.
Lorenzo gave stress on the glaring evidence of the petitioner's innocence and arrived at the same
conclusion, to deny the request for clearance to terminate and grant full back wages and other
benefits to Esmalin. More importantly, in a resolution dated August 17, 1984, the Sandiganbayan,
First Division, acquitted Esmalin of the accusations filed against him.
22

In addition, in a letter dated April 29, 1981, and signed by Director Henry R. Richards of CARE
Philippines, informing petitioner Esmalin that he shall be placed under preventive suspension
pending the final termination of the CIS investigation, CARE alleged that it conducted its own
investigation as early as July 1980, one (1) year before petitioner was placed under preventive
suspension. But on February 24, 1981 or sixty-four (64) days before petitioner's suspension, the
same Director Richards sent Esmalin a memorandum
23
increasing his salary to P1,285.00 per month
effective January 1, 1981, in recognition of his continued good work and efforts in behalf of CARE.
If indeed, petitioner was under formal investigation with regard to his alleged participation in the
anomaly, then the action of CARE Philippines in giving petitioner a merit increase is undoubtedly
inconsistent with the said investigation.
Undisputedly, CARE Philippines did not conduct its own investigation on the petitioner but relied only
on the CIS investigation which is in contravention of the ruling set forth in the case of De Leon vs.
NLRC, 100 SCRA 691 [1980], wherein this Court held:
The act of respondents in dismissing petitioner without first conducting a formal
investigation is arbitrary and unwarranted. The right of an employer to dismiss an
employee differs from and should not be confused with the manner in which such
right is exercised. It must not be oppressive and abusive since it affects one's person
and property.
While it is true that suspension is different from dismissal and that it is only in cases of dismissal
wherein a formal investigation and a prior clearance from the Ministry of Labor is required, it can be
discerned from the records of the case as well as from the actions taken by CARE Philippines, that
indeed they sought not only the suspension of petitioner Esmalin but also his dismissal.
This can be gleaned from the memorandum submitted to us by private respondent, which mentioned
"an application for Clearance for the termination of the employment of the petitioner with the Ministry
of Labor."
24
Furthermore, although the letter dated April 29, 1981 speaks of "preventive suspension," its
tenor clearly indicates dismissal. The pertinent portion of the same reads:
You are therefore relieved of your duties and responsibilities as Warehouseman
effective immediately.
Please arrange with the Accounting Office for a proper computation of any amounts
due you from CARE by way of unpaid salaries as of this date, and for a proper
turnover of records and documents in your custody, including your CARE
Identification card.
In addition, said letter refers to an enclosure which is the "Clearance to Dismiss Employee."
25

Thus, the letter preventively suspending petitioner is in reality a dismissal, considering that on the
same day, private respondent filed with the Ministry of Labor an application for clearance to dismiss
the petitioner.
The Rules and Regulations implementing the Labor Code of the Philippines or P.D. 442
26
then
enforced, *** clearly states that no employer may dismiss an employee without a prior clearance secured from the Ministry of Labor. A
dismissal without said clearance shall be conclusively presumed a termination without a just cause.
According to the case of Bachiller vs. NLRC, 98 SCRA 393 [1980]:
Dismissal of an employee without requisite prior clearance from the Ministry of Labor
is equivalent to arbitrary dismissal.
Verily, it is the prerogative of management to employ the services of a person and likewise to
discharge him. But this is not without limitations and restrictions. The dismissal of an employee must
be done with just cause and without abuse of discretion. It must NOT be done in an arbitrary and
despotic manner. To hold otherwise would render nugatory the security of tenure clause enshrined
in the Constitution.
The right to labor is a constitutional as well as a statutory light. 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.
27

Dismissal of an employee must be done without abuse of discretion. The right of an employer to
freely select or discharge his employees is regulated by the State, because the preservation of the
lives of the citizens is a basic duty of the State, more vital than the preservation of corporate profit.
The protection to labor and social justice provisions of the Constitution and the labor laws and rules
and regulations are interpreted in favor of the exercise of labor rights.
28

From the records of the case, it can be discerned that reinstatement is no longer viable in view of the
strained relations between petitioner-employee and private respondent-employer. This is very
evident from the vehement and consistent stand of CARE Philippines in refusing to accept back
petitioner Esmalin. Instead, petitioner should be awarded separation pay as an alternative for
reinstatement.
In the case of City Trust Corporation vs. NLRC, 157 SCRA 87 [1988], WE said:
However, in this case, there is no doubt that the relationship of employer to
employee is so strained and ruptured as to preclude a harmonious working
relationship should reinstatement of private respondent be decreed. Instead, private
respondent should be afforded the right to separation pay so that he can be spared
the agony of having to work anew with petitioner under an atmosphere of antipathy
and antagonism and the petitioner does not have to endure the continued services of
private respondent in whom it has lost confidence.
This principle was formulated in Balaquezon EWTU v. Zamora (97 SCRA 5) and subsequently
reiterated inAsiaworld Publishing Inc. v. Ople (152 SCRA 219, G.R. No. 56398, July 23, 1987)
and Bautista vs. Inciong, (158 SCRA 665 [1988]), wherein it was stated that: "a monetary award is to
be paid to the employee as an alternative to reinstatement which can no longer be effected in view
of the long passage of time or because of the realities of the situation."
WHEREFORE, in view of the foregoing, the decision appealed from is hereby set aside, and the
decision of the Director of Labor is hereby affirmed with the modification that in lieu of reinstatement,
petitioner shall be given separation pay equivalent to one-half month pay for every year of service.
No costs.
SO ORDERED.
Bidin and Cortes, JJ., concur.
Gutierrez, Jr., J., concur in the result.
Feliciano, J., on leave.
















Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-1340 October 13, 1947
HERMOGENES MORTERA and CANLUBANG WORKERS' UNION (CLO), petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS, CANLUBANG SUGAR ESTATE and BISIG NG
CANLUBANG (NLU),respondents.
Izon, Tansinsin and Fernando for petitioners.
Paredes, Diaz and Poblador for respondent Canlubang Sugar Estate.
M.A. Ferrer for respondent Court of Industrial Relations.
Paguia and Lerum for respondent Bisig ng Canlubang.

PERFECTO, J .:
Petitioners prays for the annulment of the order of the Court of Industrial Relations dated February
21, 1947, in case No. 44 V(1), entitled Bisig ng Canlubang (NLU) vs. Canlubang Sugar Estate,"
and of all the proceedings taken therein. The dispositive part of the order sought to be annulled is as
follows:
In view of the foregoing considerations, his Court orders:
(1) That all laborers, whether they belong to the Bisig ng Canlubang (NLU), or to the new
union Canlubang Workers' Union (CLO), should return to their respective work immediately,
but not later than 6 o'clock a.m., on February 24, 1947, with the admonition that those who
will fail to report will not only lose any concession that may be considered by this Court in the
main case, but that the respondent company, upon its petition, is hereby authorized to
employ new employees or laborers to take the places or positions of those who fail to report
at the above stated hour and date. Beginning Sunday, February 23, 1947, at 6 o'clock a.m.,
picketing under any guise or form, is hereby entirely prohibited.
(2) That for the maintenance of peace and order in Canlubang Sugar Estate, to protect the
property of the respondent Company, and also to protect those laborers who may report to
work in accordance with this order, the request for assistance of the Military Police, or any
other law-enforcing agency, is hereby granted, and government police agencies are hereby
requested to extend such help and protection.
Upon its request, the respondent company is hereby authorized to reopen on Sunday,
February 23, 1947. However, to allow all the workers to be notified of this order, the Court
has fixed 6 o'clock Monday morning, February 24, 1947, as the dead line for them to report,
in other words, those who fail to report can be substituted in order to enable the respondent
company to operate.
The parties are hereby notified of this Order in open court.
Petitioners contend that this order, requiring the laborers to return to their work, and, upon failure to
do so, authorizing the Canlubang Sugar Estate to employ new laborers to take their place, and
prohibiting picketing under any guise or form, is contrary to law and has been issued without and/or
in excess of the jurisdiction of he Court of Industrial Relations. They also complain that
notwithstanding the fact that the Canlubang Worker's Union (CLO) or its members are not party to
the case and were not given the opportunity to answer and defend the charges against them or to be
heard in connection therewith, the members of said motion were likewise ordered to return to work
and to desist from exercising their right to picket.
The Court of the Industrial Relations answered, alleging that it has the authority and jurisdiction to
issue the order of February 21, 1947, by virtue of the provisions of section 19 of the Commonwealth
Act No. 103; that said jurisdiction is merely incident to the jurisdiction acquired by the court in case
No. 44-V, Bisig ng Canlubang vs. Canlubang Sugar Estate, in virtue of section 4 of Commonwealth
Act No. 103 as amended, that said order is only complementary to the order of the same tribunal
dated December 11, 1946; that both orders were issued only in order to maintain the status quo of
the parties in case No. 44-V which was pending decision by the court, and they were of interlocutory
character; that Hermogenes Mortera and the signatories and the members of the Canlubang
Workers' Union (CLO) were members of the Bisig ng Canlubang at the time the court issued the
orders of December 10 and 11, 1946, in case No. 44-V and therefore were parties in said case; that
the information and organization of the Canlubang Workers' Union (CLO) by Hermogenes Mortera
while case No. 44-V was pending, did not have the effect of excluding said Hermogenes Mortera
and the signatories and members of the Canlubang Workers' Union (CLO) from the effect of said
orders.
The Canlubang Sugar Estate alleged in its answer that the order complied of by petitioners was
issued by the Court of Industrial Relations in virtue of section 19 of Commonwealth Act No. 103; that
the order against picketing is authorized by said section; that petitioners became parties in the case
when they appeared in case No. 44-V after receipt of notice of the hearing and copy of the urgent
motion giving rise to the order, when they asked for postponement of the hearing of the case, when
they cross-examined witnesses in the trial which was instigated by the members of the petitioning
union and offered evidence in their defense in connection with the urgent motion.
Upon the evidence presented before it, the Court of Industrial Relations in its order of February 21,
1947, found that in connection with the case of Bisig Ng Canlubang (NLU) vs. the Canlubang Sugar
Estate, No. 44-V, the petition union of December 2, 1946, presented several demands relative to
increase of wages, vacation with pay and the granting of gratuity for faithful and long service.
Lacking action on these demands, the workers declared a strike on December 9, 1946. The Bisig Ng
Canlubang filed on the same date a petition against the Canlubang Sugar Estate covering the three
demands submitted to the estate. At the preliminary hearing set on December 11, 1946, the parties
agreed that the company would reopen and that it will readmit all the striking laborers with pay from
December 9, 1946, when the strike was declared, and that any concession that may be justified by
the evidence will be made retroactive as of December 9, 1946. The question of vacation with pay
and gratuity was left o the sound discretion of the Court. Although maintaining that there is no law
which authorizes the payment of gratuity, respondent company manifested that the question will be
left to the sound discretion of the court. Evidence shall be received on the question of the increase of
wages. As a result, the laborers were ordered to return to their work under the same conditions
existing before the strike and that none of them shall be suspended except for that cause and after
the authority of the court is obtained. The workers were also ordered not to declare any strike while
the final determination of the case is pending. On February 17, 1947, around six or seven hundred
laborers declared a strike. According to petitioners, said laborers formed a new union, the Calamba
Workers Union (CLO) due to the failure of the company to accede to their demands of February 11,
1947. When the main case was tried and submitted, and especially at the time of the issuance of the
order of December 11, 1946, which was violated by the strike declared in February 17, 1947,
Mortera and the six hundred striking workers were members of the Bisig ng Canlubang.
The Court of Industrial Relations stated that respondent is engaged in the manufacture of sugar, a
very important and essential food, of which there is lack of supply in view of the destruction of sugar
centrals of many provinces. Sugar is important in the life of the people. This makes imperative the
reopening of the company for the production of sugar and to help the workers belonging to the two
unions.
The main question in this case decisive of the whole controversy is whether petitioners were parties
in case No. 44-V, entitled Bisig ng Canlubang (NLU) vs. Canlubang Sugar Estate, wherein the order
of December 11, 1946, prohibiting the workers from striking was issued. This question specifically
requires a ruling on the proposition that the fact that petitioners have formed another union, the
Canlubang Workers' Union (CLO), thereby separating themselves from the Bisig ng Canlubang
(NLU), after the order of December 11, 1946, was issued and when the case was pending decision,
had the effect of excluding petitioners from the jurisdiction of the Court of Industrial Relations in case
No. 44-V.lawphil. net
The contention that petitioners' secession from the Bisig Ng Canlubang (NLU) and their formation of
another union should have the effect of divesting the Court of Industrial Relations of its jurisdiction
over the petitioners in the case wherein they appeared and came to the Court of Industrial Relations
as the member of the Bisig Ng Canlubang (NLU), is not supported by any law, authority or reason.
When petitioners appeared for the first time before the Court of Industrial Relations as members of
the Bisig Ng Canlubang (NLU), they appeared as workers of the Canlubang Sugar Estate. When
they seceded from said union to form another, they remained to be workers of the Canlubang Sugar
Estate. The order of December 11, 1946, prohibiting the workers from striking pending decision of
the case was addressed to the workers of the Canlubang Sugar Estate. The splitting of the
Canlubang Workers' Union into two unions cannot effect the jurisdiction of the may even dissolve the
union completely but that would not affect the jurisdiction of the court. Otherwise, we would be giving
our approval to a scheme by which a workers' union, in case of an adverse decision of the Court of
Industrial Relations, may always make a mockery of orders and decisions of said court. Such a
result is against the administration of justice and is violative of the principles and the purposes for
which Commonwealth Act No. 103 was enacted. Under he authority granted by the Constitution, the
National Assembly sought through Commonwealth Act No. 103 to set up a system of settling labor
disputes orderly, justly, and to the best interest of the parties concerned in particular and of the
people in general. Both the Delegates of the Constitutional Convention and the Members of the
National Assembly, without depriving laborers of their essential rights, and rather having heir benefit
in mind sought to avoid in the Philippines the repetition of the interminable strikes occurring in the
United States of America. Their evil effects may easily be absorbed by the enormous economic
capacity of the American people but certainly will be disastrous to the economic life of the
Philippines.
The second and last question which we have to consider is the blanket prohibition against picketing
in any guise or form contained in the order of February 21, 1947. The prohibition should be
understood to cover only illegal picketing, that is, picketing through the use of illegal means.
Peaceful picketing cannot be prohibited. It is part of the freedom of speech guaranteed by the
Constitution. Therefore, the order of the Court of Industrial Relations prohibiting picketing must be
understood to refer only to illegal picketing, that is, picketing through the use of illegal means.
Petitioners have not shown why the order of February 21, 1947, should be annulled. The order
proceedings in case No. 44-V (1) which petitioners also seek to be annulled are not specified and no
grounds have been adduced in support of the prayer.
For all the foregoing, the petitioner is dismissed.
Moran, C.J., Paras, Feria, Hilado, Bengzon, Briones, Padilla, and Tuason, JJ., concur.
MORAN, C.J .:
I certify that Mr. Justice Pablo concurs in the decision.
















Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 85279 July 28, 1989
SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), DIONISION T. BAYLON,
RAMON MODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO DE ALDAY, SERGIO
ARANETA, PLACIDO AGUSTIN, VIRGILIO MAGPAYO, petitioner,
vs.
THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. CEZAR C. PERALEJO,
RTC, BRANCH 98, QUEZON CITY, respondents.
Vicente T. Ocampo & Associates for petitioners.
CORTES, J :
Primarily, the issue raised in this petition is whether or not the Regional Trial Court can enjoin the
Social Security System Employees Association (SSSEA) from striking and order the striking
employees to return to work. Collaterally, it is whether or not employees of the Social Security
System (SSS) have the right to strike.
The antecedents are as follows:
On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City a complaint for
damages with a prayer for a writ of preliminary injunction against petitioners, alleging that on June 9,
1987, the officers and members of SSSEA staged an illegal strike and baricaded the entrances to
the SSS Building, preventing non-striking employees from reporting for work and SSS members
from transacting business with the SSS; that the strike was reported to the Public Sector Labor -
Management Council, which ordered the strikers to return to work; that the strikers refused to return
to work; and that the SSS suffered damages as a result of the strike. The complaint prayed that a
writ of preliminary injunction be issued to enjoin the strike and that the strikers be ordered to return
to work; that the defendants (petitioners herein) be ordered to pay damages; and that the strike be
declared illegal.
It appears that the SSSEA went on strike after the SSS failed to act on the union's demands, which
included: implementation of the provisions of the old SSS-SSSEA collective bargaining agreement
(CBA) on check-off of union dues; payment of accrued overtime pay, night differential pay and
holiday pay; conversion of temporary or contractual employees with six (6) months or more of
service into regular and permanent employees and their entitlement to the same salaries,
allowances and benefits given to other regular employees of the SSS; and payment of the children's
allowance of P30.00, and after the SSS deducted certain amounts from the salaries of the
employees and allegedly committed acts of discrimination and unfair labor practices [Rollo, pp. 21-
241].
The court a quo, on June 11, 1987, issued a temporary restraining order pending resolution of the
application for a writ of preliminary injunction [Rollo, p. 71.] In the meantime, petitioners filed a
motion to dismiss alleging the trial court's lack of jurisdiction over the subject matter [Rollo, pp. 72-
82.] To this motion, the SSS filed an opposition, reiterating its prayer for the issuance of a writ of
injunction [Rollo, pp. 209-222]. On July 22,1987, in a four-page order, the court a quo denied the
motion to dismiss and converted the restraining order into an injunction upon posting of a bond, after
finding that the strike was illegal [Rollo, pp. 83- 86]. As petitioners' motion for the reconsideration of
the aforesaid order was also denied on August 14, 1988 [Rollo, p. 94], petitioners filed a petition
for certiorari and prohibition with preliminary injunction before this Court. Their petition was docketed
as G.R. No. 79577. In a resolution dated October 21, 1987, the Court, through the Third Division,
resolved to refer the case to the Court of Appeals. Petitioners filed a motion for reconsideration
thereof, but during its pendency the Court of Appeals on March 9,1988 promulgated its decision on
the referred case [Rollo, pp. 130-137]. Petitioners moved to recall the Court of Appeals' decision. In
the meantime, the Court on June 29,1988 denied the motion for reconsideration in G.R. No. 97577
for being moot and academic. Petitioners' motion to recall the decision of the Court of Appeals was
also denied in view of this Court's denial of the motion for reconsideration [Rollo, pp. 141- 143].
Hence, the instant petition to review the decision of the Court of Appeals [Rollo, pp. 12-37].
Upon motion of the SSS on February 6,1989, the Court issued a temporary restraining order
enjoining the petitioners from staging another strike or from pursuing the notice of strike they filed
with the Department of Labor and Employment on January 25, 1989 and to maintain the status
quo [Rollo, pp. 151-152].
The Court, taking the comment as answer, and noting the reply and supplemental reply filed by
petitioners, considered the issues joined and the case submitted for decision.
The position of the petitioners is that the Regional Trial Court had no jurisdiction to hear the case
initiated by the SSS and to issue the restraining order and the writ of preliminary injunction, as
jurisdiction lay with the Department of Labor and Employment or the National Labor Relations
Commission, since the case involves a labor dispute.
On the other hand, the SSS advances the contrary view, on the ground that the employees of the
SSS are covered by civil service laws and rules and regulations, not the Labor Code, therefore they
do not have the right to strike. Since neither the DOLE nor the NLRC has jurisdiction over the
dispute, the Regional Trial Court may enjoin the employees from striking.
In dismissing the petition for certiorari and prohibition with preliminary injunction filed by petitioners,
the Court of Appeals held that since the employees of the SSS, are government employees, they are
not allowed to strike, and may be enjoined by the Regional Trial Court, which had jurisdiction over
the SSS' complaint for damages, from continuing with their strike.
Thus, the sequential questions to be resolved by the Court in deciding whether or not the Court of
Appeals erred in finding that the Regional Trial Court did not act without or in excess of jurisdiction
when it took cognizance of the case and enjoined the strike are as follows:
1. Do the employees of the SSS have the right to strike?
2. Does the Regional Trial Court have jurisdiction to hear the case initiated by the SSS and to enjoin
the strikers from continuing with the strike and to order them to return to work?
These shall be discussed and resolved seriatim
I
The 1987 Constitution, in the Article on Social Justice and Human Rights, provides that the State
"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" [Art. XIII, Sec.
31].
By itself, this provision would seem to recognize the right of all workers and employees, including
those in the public sector, to strike. But the Constitution itself fails to expressly confirm this
impression, for in the Sub-Article on the Civil Service Commission, it provides, after defining the
scope of the civil service as "all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with original charters," that
"[t]he right to self-organization shall not be denied to government employees" [Art. IX(B), Sec. 2(l)
and (50)]. Parenthetically, the Bill of Rights also provides that "[tlhe right of the people, including
those employed in the public and private sectors, to form unions, associations, or societies for
purposes not contrary to law shall not abridged" [Art. III, Sec. 8]. Thus, while there is no question that
the Constitution recognizes the right of government employees to organize, it is silent as to whether
such recognition also includes the right to strike.
Resort to the intent of the framers of the organic law becomes helpful in understanding the meaning
of these provisions. A reading of the proceedings of the Constitutional Commission that drafted the
1987 Constitution would show that in recognizing the right of government employees to organize, the
commissioners intended to limit the right to the formation of unions or associations only, without
including the right to strike.
Thus, Commissioner Eulogio R. Lerum, one of the sponsors of the provision that "[tlhe right to self-
organization shall not be denied to government employees" [Art. IX(B), Sec. 2(5)], in answer to the
apprehensions expressed by Commissioner Ambrosio B. Padilla, Vice-President of the Commission,
explained:
MR. LERUM. I think what I will try to say will not take that long. When we proposed
this amendment providing for self-organization of government employees, it does not
mean that because they have the right to organize, they also have the right to strike.
That is a different matter. We are only talking about organizing, uniting as a union.
With regard to the right to strike, everyone will remember that in the Bill of Rights,
there is a provision that the right to form associations or societies whose purpose is
not contrary to law shall not be abridged. Now then, if the purpose of the state is to
prohibit the strikes coming from employees exercising government functions, that
could be done because the moment that is prohibited, then the union which will go on
strike will be an illegal union. And that provision is carried in Republic Act 875. In
Republic Act 875, workers, including those from the government-owned and
controlled, are allowed to organize but they are prohibited from striking. So, the fear
of our honorable Vice- President is unfounded. It does not mean that because we
approve this resolution, it carries with it the right to strike. That is a different matter.
As a matter of fact, that subject is now being discussed in the Committee on Social
Justice because we are trying to find a solution to this problem. We know that this
problem exist; that the moment we allow anybody in the government to strike, then
what will happen if the members of the Armed Forces will go on strike? What will
happen to those people trying to protect us? So that is a matter of discussion in the
Committee on Social Justice. But, I repeat, the right to form an organization does not
carry with it the right to strike. [Record of the Constitutional Commission, vol. 1, p.
569].
It will be recalled that the Industrial Peace Act (R.A. No. 875), which was repealed by the Labor
Code (P.D. 442) in 1974, expressly banned strikes by employees in the Government, including
instrumentalities exercising governmental functions, but excluding entities entrusted with proprietary
functions:
.Sec. 11. Prohibition Against Strikes in the Government. The terms and conditions
of employment in the Government, including any political subdivision or
instrumentality thereof, are governed by law and it is declared to be the policy of this
Act that employees therein shall not strike for the purpose of securing changes or
modification in their terms and conditions of employment. Such employees may
belong to any labor organization which does not impose the obligation to strike or to
join in strike:Provided, however, That this section shall apply only to employees
employed in governmental functions and not those employed in proprietary functions
of the Government including but not limited to governmental corporations.
No similar provision is found in the Labor Code, although at one time it recognized the right of
employees of government corporations established under the Corporation Code to organize and
bargain collectively and those in the civil service to "form organizations for purposes not contrary to
law" [Art. 244, before its amendment by B.P. Blg. 70 in 1980], in the same breath it provided that
"[t]he terms and conditions of employment of all government employees, including employees of
government owned and controlled corporations, shall be governed by the Civil Service Law, rules
and regulations" [now Art. 276]. Understandably, the Labor Code is silent as to whether or not
government employees may strike, for such are excluded from its coverage [Ibid]. But then the Civil
Service Decree [P.D. No. 807], is equally silent on the matter.
On June 1, 1987, to implement the constitutional guarantee of the right of government employees to
organize, the President issued E.O. No. 180 which provides guidelines for the exercise of the right to
organize of government employees. In Section 14 thereof, it is provided that "[t]he Civil Service law
and rules governing concerted activities and strikes in the government service shall be observed,
subject to any legislation that may be enacted by Congress." The President was apparently referring
to Memorandum Circular No. 6, s. 1987 of the Civil Service Commission under date April 21, 1987
which, "prior to the enactment by Congress of applicable laws concerning strike by government
employees ... enjoins under pain of administrative sanctions, all government officers and employees
from staging strikes, demonstrations, mass leaves, walk-outs and other forms of mass action which
will result in temporary stoppage or disruption of public service." The air was thus cleared of the
confusion. At present, in the absence of any legislation allowing government employees to strike,
recognizing their right to do so, or regulating the exercise of the right, they are prohibited from
striking, by express provision of Memorandum Circular No. 6 and as implied in E.O. No. 180. [At this
juncture, it must be stated that the validity of Memorandum Circular No. 6 is not at issue].
But are employees of the SSS covered by the prohibition against strikes?
The Court is of the considered view that they are. Considering that under the 1987 Constitution "[t]he
civil service embraces all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with original charters" [Art.
IX(B), Sec. .2(l) see also Sec. 1 of E.O. No. 180 where the employees in the civil service are
denominated as "government employees"] and that the SSS is one such government-controlled
corporation with an original charter, having been created under R.A. No. 1161, its employees are
part of the civil service [NASECO v. NLRC, G.R. Nos. 69870 & 70295, November 24,1988] and are
covered by the Civil Service Commission's memorandum prohibiting strikes. This being the case, the
strike staged by the employees of the SSS was illegal.
The statement of the Court in Alliance of Government Workers v. Minister of Labor and
Employment [G.R. No. 60403, August 3, 1:983, 124 SCRA 11 is relevant as it furnishes the rationale
for distinguishing between workers in the private sector and government employees with regard to
the right to strike:
The general rule in the past and up to the present is that 'the terms and conditions of
employment in the Government, including any political subdivision or instrumentality
thereof are governed by law" (Section 11, the Industrial Peace Act, R.A. No. 875, as
amended and Article 277, the Labor Code, P.D. No. 442, as amended). Since the
terms and conditions of government employment are fixed by law, government
workers cannot use the same weapons employed by workers in the private sector to
secure concessions from their employers. The principle behind labor unionism in
private industry is that industrial peace cannot be secured through compulsion by
law. Relations between private employers and their employees rest on an essentially
voluntary basis. Subject to the minimum requirements of wage laws and other labor
and welfare legislation, the terms and conditions of employment in the unionized
private sector are settled through the process of collective bargaining. In government
employment, however, it is the legislature and, where properly given delegated
power, the administrative heads of government which fix the terms and conditions of
employment. And this is effected through statutes or administrative circulars, rules,
and regulations, not through collective bargaining agreements. [At p. 13; Emphasis
supplied].
Apropos is the observation of the Acting Commissioner of Civil Service, in his position paper
submitted to the 1971 Constitutional Convention, and quoted with approval by the Court in Alliance,
to wit:
It is the stand, therefore, of this Commission that by reason of the nature of the public
employer and the peculiar character of the public service, it must necessarily regard
the right to strike given to unions in private industry as not applying to public
employees and civil service employees. It has been stated that the Government, in
contrast to the private employer, protects the interest of all people in the public
service, and that accordingly, such conflicting interests as are present in private labor
relations could not exist in the relations between government and those whom they
employ. [At pp. 16-17; also quoted in National Housing Corporation v. Juco, G.R. No.
64313, January 17,1985,134 SCRA 172,178-179].
E.O. No. 180, which provides guidelines for the exercise of the right to organize of government
employees, while clinging to the same philosophy, has, however, relaxed the rule to allow
negotiation where the terms and conditions of employment involved are not among those fixed by
law. Thus:
.SECTION 13. Terms and conditions of employment or improvements thereof, except
those that are fixed by law, may be the subject of negotiations between duly
recognized employees' organizations and appropriate government authorities.
The same executive order has also provided for the general mechanism for the settlement of labor
disputes in the public sector to wit:
.SECTION 16. The Civil Service and labor laws and procedures, whenever
applicable, shall be followed in the resolution of complaints, grievances and cases
involving government employees. In case any dispute remains unresolved after
exhausting all the available remedies under existing laws and procedures, the parties
may jointly refer the dispute to the [Public Sector Labor- Management] Council for
appropriate action.
Government employees may, therefore, through their unions or associations, either petition the
Congress for the betterment of the terms and conditions of employment which are within the ambit of
legislation or negotiate with the appropriate government agencies for the improvement of those
which are not fixed by law. If there be any unresolved grievances, the dispute may be referred to the
Public Sector Labor - Management Council for appropriate action. But employees in the civil service
may not resort to strikes, walk-outs and other temporary work stoppages, like workers in the private
sector, to pressure the Govemment to accede to their demands. As now provided under Sec. 4, Rule
III of the Rules and Regulations to Govern the Exercise of the Right of Government- Employees to
Self- Organization, which took effect after the instant dispute arose, "[t]he terms and conditions of
employment in the government, including any political subdivision or instrumentality thereof and
government- owned and controlled corporations with original charters are governed by law and
employees therein shall not strike for the purpose of securing changes thereof."
II
The strike staged by the employees of the SSS belonging to petitioner union being prohibited by law,
an injunction may be issued to restrain it.
It is futile for the petitioners to assert that the subject labor dispute falls within the exclusive
jurisdiction of the NLRC and, hence, the Regional Trial Court had no jurisdiction to issue a writ of
injunction enjoining the continuance of the strike. The Labor Code itself provides that terms and
conditions of employment of government employees shall be governed by the Civil Service Law,
rules and regulations [Art. 276]. More importantly, E.O. No. 180 vests the Public Sector Labor -
Management Council with jurisdiction over unresolved labor disputes involving government
employees [Sec. 16]. Clearly, the NLRC has no jurisdiction over the dispute.
This being the case, the Regional Trial Court was not precluded, in the exercise of its general
jurisdiction under B.P. Blg. 129, as amended, from assuming jurisdiction over the SSS's complaint
for damages and issuing the injunctive writ prayed for therein. Unlike the NLRC, the Public Sector
Labor - Management Council has not been granted by law authority to issue writs of injunction in
labor disputes within its jurisdiction. Thus, since it is the Council, and not the NLRC, that has
jurisdiction over the instant labor dispute, resort to the general courts of law for the issuance of a writ
of injunction to enjoin the strike is appropriate.
Neither could the court a quo be accused of imprudence or overzealousness, for in fact it had
proceeded with caution. Thus, after issuing a writ of injunction enjoining the continuance of the strike
to prevent any further disruption of public service, the respondent judge, in the same order,
admonished the parties to refer the unresolved controversies emanating from their employer-
employee relationship to the Public Sector Labor - Management Council for appropriate action
[Rollo, p. 86].
III
In their "Petition/Application for Preliminary and Mandatory Injunction," and reiterated in their reply
and supplemental reply, petitioners allege that the SSS unlawfully withheld bonuses and benefits
due the individual petitioners and they pray that the Court issue a writ of preliminary prohibitive and
mandatory injunction to restrain the SSS and its agents from withholding payment thereof and to
compel the SSS to pay them. In their supplemental reply, petitioners annexed an order of the Civil
Service Commission, dated May 5, 1989, which ruled that the officers of the SSSEA who are not
preventively suspended and who are reporting for work pending the resolution of the administrative
cases against them are entitled to their salaries, year-end bonuses and other fringe benefits and
affirmed the previous order of the Merit Systems Promotion Board.
The matter being extraneous to the issues elevated to this Court, it is Our view that petitioners'
remedy is not to petition this Court to issue an injunction, but to cause the execution of the aforesaid
order, if it has already become final.
WHEREFORE, no reversible error having been committed by the Court of Appeals, the instant
petition for review is hereby DENIED and the decision of the appellate court dated March 9, 1988 in
CA-G.R. SP No. 13192 is AFFIRMED. Petitioners' "Petition/Application for Preliminary and
Mandatory Injunction" dated December 13,1988 is DENIED.
SO ORDERED. Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-1573 March 29, 1948
KAISAHAN NG MGA MANGGAGAWA SA KAHOY SA PILIPINAS, petitioner-appellant,
vs.
GOTAMCO SAW MILL, respondent-appellee.
Severino P. Izon for petitioner.
Romeo Perfecto for respondent.
HILADO, J .:
In its petition for a writ of certiorari, the "Kaisahan ng mga Manggagawa sa Kahoy sa Pilipinas"
prays, for the reasons therein set forth, that we reverse and vacate the orders of the Court of
Industrial Relations dated September 23, 1946 (Annex A) and March 28, 1947 (Annex B) and its
resolution of July 11, 1947 (Annex C).
In the order of September 23, 1946, it is recited that the laborers in the main case (case No. 31-V of
the Court of Industrial Relations) declared a strike on September 10, 1946, "which suspended all the
work in the respondent company"; that on September 19, 1946 (presumably after the case had been
brought to the Court of Industrial Relations) said court informed the parties that the continuation of
the strike would necessarily prejudice both parties, and that a temporary solution, satisfactory to both
parties, must be found to put an end to it, at the same time, urging both parties to be reasonable in
their attitude towards each other; that ample opportunity was given to both parties to iron out their
differences until September 21, 1946, when the court continued the conference at which, among
other things, the leader of the laborers informed the court that, although said laborers were not
exactly satisfied with the arrangement, in order to cooperate with the court and with the parties so
that the laborers could return to work and the company resume its operation, they had no objection
to accepting a temporary settlement of P3.50 without meal, as against the proposal of the company
of P2.00 without meal; that after a series of conferences held on September 23, 1946, the date of
the order now under consideration, the labor leader decided to accept a temporary arrangement of
the wage problem as proposed by management, that is, P2.00 over-all increase without meal to all
striking laborers; that Francisco Cruz, President of the Union, manifested that he would have a hard
time convincing the laborers, but in view of their desire to preserve that harmony which used to exist
between the parties, they were going to accede to this proposition, provided that the management
would permit the laborers to bring with them home, if available, small pieces of lumber to be utilized
as firewood; that the negotiations culminated in an agreement by which the laborers would return to
their work on Tuesday, September 24, 1946, at 7:00 o'clock in the morning, and the respondent
company would resume its operation on said date under the following conditions:
(1) That all the laborers and workingmen will receive an over-all increase of P2.00 daily,
without meal, over the wages received by them before the strike;
(2) That the management will permit the laborers to bring with them home, if available, small
pieces of lumber to be utilized as firewood; and
(3) That the foregoing increase and privilege will take effect upon the return of the
workingmen to work until the final determination of the present controversy.
The same order then proceeds as follows:
Finding the above temporary agreement between the parties to be reasonable and
advantageous to both, the court approves the same and orders the striking laborers of the
respondent company to return to their work on Tuesday, September 24, 1946 at 7:00 o'clock
in the morning, and the respondent company to resume its operation and admit the striking
laborers. The respondent company is enjoined not to lay-off, suspend or dismiss any laborer
affiliated with the petitioning union, nor suspend the operation of the temporary agreement,
and the labor union is enjoined not to stage a walk-out or strike during the pendency of the
hearing.
From the order of March 27, 1947, it appears that on January 7, 1947, the respondent Gotamco Saw
Mill filed with the Court of Industrial relations an urgent motion asking that the petitioning union be
held for contempt of court for having staged a strike during the pendency of the main case "in
violation of the order of this court dated September 23, 1946"; that on January 9, 1947, petitioner
filed an answer with a counter-petition alleging, among other things, that a representative of
petitioner conferred with respondent regarding certain discriminations obtaining in the respondent's
saw mill, but instead of entertaining their grievances said respondent in a haughty and arbitrary
manner ordered the stoppage of the work and consequently the workers did then and there stop
working; and in the counter-petition said petitioner asked the respondent be held for contempt for
having employed four new Chinese laborers during the pendency of the hearing of the main case,
without express authority of the court and in violation of section 19 of Commonwealth Act No. 103,
as amended. It is also recited in the said order of March 28, 1947, that on that same date, January 9,
1947, respondent filed with the court another urgent motion for contempt against the petitioning
union for picketing on the premises of the respondent's saw mill and for grave threats which
prevented the remaining laborers from working.
Upon request of both parties, the court required the presentation of evidence pertinent to the
incidents thus raised. Thereafter, the said order of March 28, 1947, was entered, and the court
stated therein the three questions to be determined as follows: first, if there was a violation by the
petitioning union of the order of said court of September 23, 1946, which would warrant the
commencement of contempt proceedings; second, whether the facts and circumstances attending
the picketing constitute contempt of court; third, whether there was a violation by the respondent of
section 19 of the Commonwealth Act No. 103, as amended, in taking four Chinese laborers pending
the hearing and without express authority of the court; and fourth, whether the dismissal of Maximino
Millan was with or without just cause.
The court, passing upon these questions, found and held:
(1) That there was a violation of the order of the court dated September 23, 1946, by the
petitioning union and thereby ordered Atty. Pastor T. Reyes, special agent of the court, to
take such action as may be warranted in the premises against the person or persons
responsible therefor for contempt:
(2) That the question of picketing being closely and intimately related to the strike which had
been found illegal, did not need to be passed upon, it being imbibed by question No. 1;
(3) That there being no strong and clear proof on the question of respondent having violated
section 19 of Commonwealth Act No. 103, as amended, respondent was thereby exonerated
from any liability in connection with the alleged employment of four Chinamen;
(4) That Maximino Millan being of troublesome nature and unworthy to work among his
fellow laborers, his petition for reinstatement contained in demand No. 5 of the main case
was thereby denied.
The above cited resolution of July 11, 1947, was entered by the Court of Industrial Relations,
sitting in banc, and denied reconsideration of its order of March 28, 1947, as requested by the
petitioning union's contention is recited that the provisions of section 19 of Commonwealth Act No.
103, as amended, upon which order of September 23, 1946, was based, had not been complied
with; in other words, that the said order was not issued in conformity with the requisites of said
section, because, it was said, before its issuance there had been no proper hearing and there was
and there was no express finding by the court that public interest required the return of the striking
workers. The further contention is therein recited that, granting that the order of September 23, 1946,
was issued in conformity with said section 19, said provision is unconstitutional for being in violation
of the organic proscription of involuntary servitude. Passing upon these contentions, the Court of
Industrial Relations said:
The order of September 23, 1946, was issued in conformity with the provisions of section 19.
Said order was proposed and issued on the basis of the agreement entered into by the
parties after the preliminary hearings and conferences. While it is true that the order of the
Court now in question did not make any express finding as to whether public interest
required the return of the striking workers, it is undeniable, however, that until the numerous
incidents arising therefrom since the certification of the dispute promptly, need not be stated
in the said order because it is a fact which is borne out by the entire record of the case. If the
petitioner was aggrieved by the terms of the order, it could have objected right then and
there and could have appealed said order within the period prescribed by law, and nor to
wait after it had become final, definite, and conclusive. The record shows that the petitioner
in its answer answer and counter-petition for contempt based its complaint upon section 19
(incidental Case No. 31-V [4]). It is, indeed, strange that after taking advantage of this order
and enjoyed (enjoying) the benefits thereunder, the petitioner now comes to impugn and
challenge the validity. The second motion for reconsideration is the sad instance where the
petitioner attacks the validity of an order under which it once took shelter.
The court believes that section 19 is constitutional. To start with, this section is presumed to
be constitutional. Several laws promulgated which apparently infringe the human rights of
individuals were "subjected to regulation by the State basically in the exercise of its
paramount police power". The provisions of Act No. 103 were inspired by the constitutional
injunction making it the concern of the State to promote social justice to insure the well being
and economic security of all the people. In order to attain this object, section 19 was
promulgated which grants to labor what it grants to capital and denies to labor what it denies
to capital. Section 19 complements the power of the Court to settle industrial disputes and
renders effective such powers which are conferred upon it by the different provisions of the
Court's organic law, more particularly, sections 1 and 4, and "other plenary powers conferred
upon the Court to enable it to settle all questions matters, controversies or disputes arising
between, and/or affecting employers and employees", "to prevent non-pacific methods in the
determination of industrial or agricultural disputes" (International HardWood and Venser
Co. vs The Pangil Federation of Laborers, G.R. No. 47178, cited in the case of Mindanao
Bus Co. vs. Mindanao Bus Co. Employees' Association, 40 Off. Gaz., 115). Section 4 has
been upheld in the case aforecited. It appearing that the power of this Court to execute its
orders under section 19 is also the same power it possesses under section 4 of the same
act, it inferentially follows that section 19 is likewise valid. (Manila Trading and Supply Co. vs.
Philippine Labor Union, G.R. No. 47796.)
In Manila Trading and Supply Company vs. Philippine Labor Union, supra, this Court said:
In the first place, the ultimate effect of petitioner's theory is to concede to the Court of
Industrial Relations the power to decide a case under section 19 but deny it, the power to
execute its decision thereon. The absurdity of this proposition, is too evident to require
argument. In the second place considering that the jurisdiction of the Court of Industrial
Relations under section 19 is merely incidental to the same jurisdiction it has previously
acquired under section 4 of the law, if follows that the power to execute its orders under
section 19 is also the same power that it possesses under section 4. (40 Off. Gaz., [14th
Supp.], No. 23, p. 178.)
Among the powers thus conferred is that to punish a violation of an order such as those now under
consideration as for contempt of court.
We agree with the Court of Industrial Relations that section 19 of Commonwealth Act No. 103 is
constitutional. It does not offend against the constitutional inhibition prescribing involuntary servitude.
An employee entering into a contract of employment said law went into effect, voluntarily accepts,
among other conditions, those prescribed in said section 19, among which is the "implied condition
that when any dispute between the employer or landlord and the employee, tenant or laborer has
been submitted to the Court of Industrial Relations for settlement or arbitration, pursuant to the
provisions of this Act, and pending award or decision by it, the employee, tenant or laborer shall not
strike or walk out of his employment when so joined by the court after hearing and when public
interest so requires, and if he has already done so, that he shall forthwith return to it, upon order of
the court, which shall be issued only after hearing when public interest so requires or when the
dispute can not, in its opinion, be promptly decided or settled ...". (Emphasis supplied.)
The voluntariness of the employee's entering into such a contract of employment he has a free
choice between entering into it or not with such an implied condition, negatives the possibility of
involuntary servitude ensuing. The resolution of July 11, 1947, states that the order of September
23, 1946, was issued after a series of preliminary hearings or conferences, and we are satisfied that
these were "hearings" within the meaning of the above mentioned section 19 of the law. The record
certainly reveals that what was done during and what resulted from said preliminary hearings or
conferences were reported to the court at a formal hearing. As to public interest requiring that the
court enjoin the strike or walk out, or the return of striking laborers, aside from the legal presumption
that the Court of Industrial Relations complied with the provisions of the law in this respect, we think
that, considering the universally known fact, of which this Court takes judicial notice, that as a result
of the destructions wrought by the late war, the economic and social rehabilitation of the country
urgently demands the reconstruction work will inevitably tend to paralyze, impede or slow down the
country's program of rehabilitation which, for obvious and natural reasons, the government is striving
to accelerate as much as is humanly possible.
Besides, the order of the court was for the striking workers to return to their work. And that order was
made after hearing, and, moreover, section 19 of Commonwealth Act No. 103, in providing for an
order of the court fro the return of striking workers, authorizes such order, among other cases, "when
the dispute can not, in its opinion, be promptly decided or settled". The provision says: "... and if he
has already done so (struck or walked out),that he shall forthwith return to it, upon order of the court,
which shall be issued only after hearing when public interest so requires or when the dispute cannot,
in its opinion, be promptly decided or settled, (emphasis supplied). In other words the order to return,
if the dispute can be promptly decided or settled, may be issued "only after hearing when public
interest so requires", but if in the court's opinion the dispute can not be promptly decided or settled,
then it is also authorized after hearing to issue the order: we construe the provision to mean that the
very impossibility of prompt decision or settlement of the dispute confers upon the court the power to
issue the order for the reason that the public has an interest in preventing undue stoppage or
paralyzation of the wheels of industry. And, as well stated by the court's resolution of July 11, 1947,
this impossibility of prompt decision or settlement was a fact which was borne out by the entire
record of the case and did not need express statement in the order.
Finally, this Court is not authorized to review the findings of fact made by the Court of Industrial
Relations (Commonwealth Act No. 103, section 15, as amended by Commonwealth Act 559, section
2; Rule 44, Rules of Court; National Labor Union vs. Phil. Match Co., 40 Off. Gaz. 8th Supp. p. 134,
Bardwell Brothers vs. Phil. Labor Union, 39 Off. Gaz. 1032; Pasumil Workers' Union vs. Court of
Industrial Relations, 40 Off. Gaz. 6th Supp., p. 71).
However, Mr. Justice Briones thinks that we should expressly reserve our opinion on the
constitutionality of the above statutory and reglementary provisions should it, in the future, become
necessary to decide it.
For all theses considerations, the orders and resolution of the Court of Industrial Relations assailed
by the instant petition are hereby affirmed, with costs against petitioner-appellant. So ordered.
Moran, C.J., Paras, Feria, Pablo, Bengzon, Briones, Padilla and Tuason, JJ., concur.

Separate Opinions
PERFECTO, J ., concurring and dissenting:
We concur in the result of the decision in this case, but we cannot agree with the pronouncement
depriving the Supreme Court the power to revise findings of facts made by the Court of Industrial
Relations.
We are of opinion that such curtailment of the powers of the Supreme Court is violative of the spirit
and purposes of Commonwealth Act No. 103. The power of revision granted by the Supreme Court
should not be limited so as to deny relief to any party that may foundedly feel aggrieved by any
substantial finding of fact made by the Court of Industrial Relations center on disputed facts, such as
reasonable salaries, reasonable working conditions, periods of rest, reasons for strikes or lockouts,
injustice of the relations between employer and employees, etc. The aggrieved party must not be
denied his day in court in the highest tribunal.
Validity of section 19 of Commonwealth Act No. 103 is impugned on constitutional grounds, upon the
allegation that it is tantamount to authorizing involuntary servitude. We cannot agree with the
proposition. Under said section, the question of involuntary work is not involved, but only the
workability of the settlement of a labor dispute contemplated by Commonwealth Act No. 103. When
workers on strike appear before the Court of Industrial Relations to seek remedy under
Commonwealth Act No. 103, they do so, on the assumption that the work in their employment were
and are agreeable to their conscience and dignity and, as a matter of fact, they claim the right to
continue performing the same work. Otherwise they would not have resorted to strike, a means
resorted to, to compel the employer and let them continue working, but on conditions more
agreeable to the workers. If the strikers should feel that their work is in the nature of involuntary
servitude, they would not resort to a strike nor recur to the Court of Industrial Relations, but will
simply resign and seek some other employment.
When the strikers are seeking remedy under the law from the Court of Industrial Relations, the court
may impose such reasonable conditions, one of them being that provided by section 19 of
Commonwealth Act No. 103, but because it is a reasonable implementation of the powers of the
court to effectively settle a labor controversy.
If the laborers should feel that they are compelled against their will to perform something which is
repugnant to their conscience or dignity, they need not resort to any court action to seek judicial
settlement of the controversy, as they can resign from their work and there is no power that can
compel them to continue therein.