Collective Bargaining

PHASE 1: Negotiation Phase

PHASE 2: Administration Phase
PHASE 3: Re-negotiation Phase
G.R. No. L-20303
September 27, 1967
REPUBLIC SAVINGS BANK (now REPUBLIC
BANK), petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, ROSENDO T.
RESUELLO, BENJAMIN JARA, FLORENCIO ALLASAS,
DOMINGO B. JOLA, DIOSDADO S. MENDIOLA,
TEODORO DE LA CRUZ, NARCISO MACARAEG and
MAURO A. ROVILLOS, respondents.
Lichauco, Picaso & Agcaoili and R. Santayana for petitioner.
G. E. Fajardo for respondents.
CASTRO, J.:
The vital issue in this case is whether the dismissal of the eight (8)
respondent employees by the petitioner Republic Bank
(hereinafter referred to as the Bank) constituted an unfair labor
practice within the meaning and intendment of the Industrial
Peace Act (Republic Act 875). The Court of Industrial Relations
(CIR) found it did and its decision is now on appeal before us. The
Bank maintains that the discharge was for cause.
The Bank had in its employ the respondents Rosendo T. Resuello,
Benjamin Jara, Florencio Allasas, Domingo B. Jola, Diosdado S.
Mendiola, Teodoro de la Cruz, Narciso Macaraeg and Mauro A.
Rovillos. On July 12, 1958 it discharged Jola and, a few days after
(July 18, 1958), the rest of respondents, for having written and
published "a patently libelous letter . . . tending to cause the
dishonor, discredit or contempt not only of officers and employees
of this bank, but also of your employer, the bank itself."
The letter referred to was a letter-charge which the respondents
had written to the bank president, demanding his resignation on
the grounds of immorality, nepotism in the appointment and
favoritism as well as discrimination in the promotion of bank
employees. The letter, dated July 9, 1958, is hereunder reproduced
in full:
Mr. Ramon Racelis
President, Republic Savings Bank
Manila
"Dear Mr. President:
We, the undersigned, on behalf of all our members and
employees of the Republic Savings Bank, who have in our
hearts only the most honest and sincere motive to
conserve and protect the interest of the institution and its
200,000 depositors, do hereby, demand the much
needed resignation of His Excellency, Mr. Ramon Racelis
as President and Member of the Board of Directors of the
Bank.
Mr. President, you have already, in so many occasions,
placed the Bank on the verge of danger, that now we
deem it right and justifiable for you to leave this Bank
and let other more capable presidents continue the work
you have not well accomplished.
In the above instance, we are presenting charges which in
our humble contention properly justifies incapacity on
your part to continue and assume the position as top
executive of the huge institution:
(1) That you Mr. President, have tolerated and
practiced immorality in this Bank. We have been
expecting you to do something about this
malpractice which is very disgraceful and affects
the morale of the hundreds of your employees.
But so far, Mr. President, you have just let this
thing passed through. As a matter of fact, you
have even promoted these women like Misses
Pacita Mato and Edita Castro. These women are
of questionable characters, Mr. President, and
should have had no place in the Bank as
managers or even as mere employees. We know
Mr. President, because it is an open secret in the
Bank, that you have illicit relations with one of
them Miss Edita Castro. As top officer and as
father of the employees of the Bank, you have
shown this bad example to your employees. Mr.
President, we are really ashamed of you.
(2) That you have allowed the practice of
nepotism in this Bank. You have employed

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relatives of yours like Honorio Ravida;

Bienvenido Ravida; Antonio Racelis; Jesus
Antonio; and Argentina Racelis. Not only that
Mr. President. You have also given those nieces
and nephews of yours good positions at the
expense of the more capable employees. Mr.
President, if we have to mention all of them, one
page will not be enough.
(3) With regards to promotion, you have given
more preferences to your close relatives. When
the Bank advocated the sending of pensionados
to States, you have only limited your choice
among your nieces, nephews, and querida,
namely, Miss Argentina Racelis, Mr. Jesus
Antonio, Miss Edita Castro, and her brother-inlaw, Mr. Pedro Garcia, Jr. In doing this, Mr.
President, you have only lowered the reputation
and standing of the Republic Savings Bank.
There is really no sense in sending high school
and B.S.E. graduates to States to study advanced
banking. Because of this silly decision, it took
one pensionado six months and cost the Bank a
total of P10,000.00 just to study Christmas
savings. That subject is very simple; one need
not go to States to study savings; that you know
full well, Mr. President. The reason why you sent
Miss Castro to States was because you were also
there. Are we not right?
(4) That you Mr. President, tolerated and still
tolerating grave dishonesty in this Bank as
evidenced by the following irregularities and
anomalies;
(a) In one of our branches, around
P200,000.00 was mulcted and
embezzled by a certain Maximo
Donado by doctoring the ledgers and
records of that particular office. To the
present, the amount is still increasing
and some more are being dug up from
the records everyday ever since its
discovery in February 1957. In this case
you dismissed Mr. M. Donado,
immediately. But this was all that you
did. If you have to go back to the
history of the case, you will find out
that your beloved nieces and nephews
are also involved having been
managers of that particular office.
Another nephew, the Vice PresidentOperations, then Vice President,
Personnel, was also involved for valid
reasons that he did not even shift this
particular employee to other branches
or departments since the beginning
when it has been the policy of the Bank
to reshuffle its personnel. If you want
to know why your good nephew did not
transfer this employee, we will tell you.
"Your good nephew has eaten too many
baskets of delicious alimango." Mr.
President, if there is someone to be
blamed in this particular case, it is your
good nephews and nieces for their
gross negligence.
(b) Aside from the one mentioned
above, we have also Mr. Rodolfo
Francisco, who in April 1955,
maliciously withdraw (sic) P970.00 in
two withdrawal slips from the account
of one depositor in one of our
provincial offices, inserting his name as
co-depositor in the savings account
ledger.
(c) In January 1958, Mr. Jose de los
Santos expended and approved
representation expense in the amount
of P300.00 in one of our provincial
offices.
(d) Mr. Federico M. Dabu, the excashier and now Personnel Manager,
incurred a shortage in the amount of
P1,240.00 in the course of the audit on
August 3, 1954.

(e) Mr. Jose S. Guevara, Vice-President

on Personnel have (sic) been accepting
bribe moneys. One of these amounts to
P4,000.00 which was delivered by a
messenger sometime during the last
quarter of 1957.
Mr. President, the anomalies are only a partial list of the
irregularities which so far you have not acted upon. This
type of people should have been fired out from the Bank;
yet on the contrary, you promoted them to higher and
responsible positions, thus, resulting in the
demoralization of the more capable employees.
Mr. President, we hope that you have still a little sense of
decency and propriety left. So, for goodsake and for the
welfare of the Bank, DO RESIGN NOW as President and
as Member of the Board of Directors of the Republic
Savings Bank.
Very respectfully yours,
(Sgd.) Rosendo T. Resuello
President, RSB Supervisors' Union (FFW),
(Sgd.) Benjamin Jara
Vice-President RSB Supervisors' Union
(FFW)
(Sgd.) Florencio Allasas
Treasurer, RSB Supervisors' Union (FFW)
(Sdg) Domingo B. Jola
Chairman, Executive Committee, RSB
Employees' Union (FFW)
(Sgd.) Diosdado S. Mendiola
Vice-President, RSB Employees Union
(FFW)
(Sgd.) Teodoro de la Cruz
Member, Executive Committee, RSB
Employees' Union (FFW)
(Sgd.) Angelino Quiambao
President, RSB Security Guard Union (FFW)
(Sgd.) Narciso Macaraeg
Vice-President, RSB Security Guard Union
(FFW)
(Sgd.) Alfredo Bautista
Treasurer, RSB Security Guard Union (FFW)
(Sgd.) Pacifico A. Argao
PRO, RSB Employees' Union (FFW)
(Sgd.) Toribio B. Garcia
Secretary, RSB Security Guard Union (FFW)
(Sgd.) Mauro A. Rovillos
Member, Executive Committee, RSB
Supervisors' Union (FFW)
Copies of this letter were admittedly given to the chairman of the
board of directors of the Bank, and the Governor of the Central
Bank.
At the instance of the respondents, prosecutor A. Tirona filed a
complaint in the CIR on September 15, 1958, alleging that the
Bank's conduct violated section 4(a) (5) of the Industrial Peace Act
which makes it an unfair labor practice for an employer "to
dismiss, discharge or otherwise prejudice or discriminate against
an employee for having filed charges or for having given or being
about to give testimony under this Act."
The Bank moved for the dismissal of the complaint, contending
that respondents were discharged not for union activities but for
having written and published a libelous letter against the bank
president. The court denied the motion on the basis of its decision
in another case1 in which it ruled that section 4(a) (5) applies to
cases in which an employee is dismissed or discriminated against
for having filed "any charges against his employer." Whereupon
the case was heard.
In 1960, however, this Court overruled the decision of the CIR in
the Royal Interocean case and held that "the charge, the filing of
which is the cause of the dismissal of the employee, must be
related to his right to self-organization in order to give rise to
unfair labor practice on the part of the employer," because "under
subsection 5 of section 4(a), the employee's (1) having filed
charges or (2) having given testimony or (3) being about to give
testimony, are modified by 'under this Act' appearing after the last
item."2 The Bank therefore renewed its motion to dismiss, but the
court held the motion in abeyance and proceeded with the hearing.
On July 4, 1962 the court rendered a decision finding the Bank
guilty of unfair labor practice and ordering it to reinstate the
respondents, with full back wages and without loss of seniority and
other privileges. This decision was affirmed by the court en
banc on August 9, 1962.
Relying upon Royal Interocean Lines v. CIR,3 and Lakas ng
Pagkakaisa sa Peter Paul v. CIR,4 the Bank argues that the court

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should have dismissed the complaint because the discharge of the

respondents had nothing to do with their union activities as the
latter in fact admitted at the hearing that the writing of the lettercharge was not a "union action" but merely their "individual" act.
It will avail the Bank none to gloat over this admission of the
respondents. Assuming that the latter acted in their individual
capacities when they wrote the letter-charge they were nonetheless
protected for they were engaged in concerted activity, in the
exercise of their right of self-organization that includes concerted
activity for mutual aid and protection, 5 interference with which
constitutes an unfair labor practice under section 4(a)(1). This is
the view of some members of this Court. For, as has been aptly
stated, the joining in protests or demands, even by a small group
of employees, if in furtherance of their interests as such, is a
concerted activity protected by the Industrial Peace Act. It is not
necessary that union activity be involved or that collective
bargaining be contemplated.6
Indeed, when the respondents complained against nepotism,
favoritism and other management practices, they were acting
within an area marked out by the Act as a proper sphere of
collective bargaining. Even the reference to immorality was not
irrelevant as it was made to support the respondents' other charge
that the bank president had failed to provide wholesome working
conditions, let alone a good moral example, for the employees by
practicing discrimination and favoritism in the appointment and
promotion of certain employees on the basis of illicit relations or
blood relationship with them.
In many respects, the case at bar is similar to National Labor
Relations Board v. Phoenix Mutual Life Insurance Co. 7 The issue
in that case was whether an insurance company was guilty of an
unfair labor practice in interfering with this right of concerted
activity by discharging two agents employed in a branch office. The
cashier of that office had resigned. The ten agents employed there
held a meeting and agreed to join in a letter to the home office
objecting to the transfer to their branch office of a cashier from
another branch office to fill the position. They discussed also the
question whether to recommend the promotion of the assistant
cashier of their office as the proper alternative. They then chose
one of their number to compose a draft of the letter and submit it
to them for further discussion, approval and signature. The agent
selected to write the letter and another were discharged for their
activities in this respect as being, so their notices stated,
completely unpleasant and far beyond the periphery of their
responsibility. In holding the company liable for unfair labor
practice, the Circuit Court of Appeals said:
A proper construction is that the employees shall have
the right to engage in concerted activities for their mutual
aid or protection even though no union activity be
involved, for collective bargaining be contemplated. Here
Davis and Johnson and other salesmen were properly
concerned with the identity and capability of the new
cashier. Conceding they had no authority to appoint a
new cashier or even recommend anyone for the
appointment, they had a legitimate interest in acting
concertedly in making known their views to management
without being discharged for that interest. The moderate
conduct of Davis and Johnson and the others bore a
reasonable relation to conditions of their employment. It
was therefore an unfair labor practice for respondent to
interfere with the exercise of the right of Davis and
Johnson and the other salesmen to engage in concerted
activities for their mutual aid or protection.
Other members of this Court agreed with the CIR that the Bank's
conduct violated section 4(a) (5) which makes it an unfair labor
practice for an employer to dismiss an employee for having filed
charges under the Act.
Some other members of this Court believe, without necessarily
expressing approval of the way the respondents expressed their
grievances, that what the Bank should have done was to refer the
letter-charge to the grievance committee. This was its duty, failing
which it committed an unfair labor practice under section 4(a) (6).
For collective bargaining does not end with the execution of an
agreement. It is a continuous process. The duty to bargain imposes
on the parties during the term of their agreement the mutual
obligation "to meet and confer promptly and expeditiously and in
good faith . . . for the purpose of adjusting any grievances or
question arising under such agreement" 8 and a violation of this
obligation is, by section 4 (a) (6) and (b) (3) an unfair labor
practice.9 As Professors Cox and Dunlop point out:
Collective bargaining . . . normally takes the form of
negotiations when major conditions of employment to be
written into an agreement are under consideration and of
grievance committee meetings and arbitration when

questions arising in the administration of an agreement

are at stake.10
Instead of stifling criticism, the Bank should have allowed the
respondents to air their grievances. Good faith bargaining required
of the Bank an open mind and a sincere desire to negotiate over
grievances.11 The grievance committee, created in the collective
bargaining agreements, would have been an appropriate forum for
such negotiation. Indeed, the grievance procedure is a part of the
continuous process of collective bargaining. 12 It is intended to
promote, as it were, a friendly dialogue between labor and
management as a means of maintaining industrial peace.
The Bank defends its action by invoking its right to discipline for
what it calls the respondents' libel in giving undue publicity to
their letter-charge. To be sure, the right of self-organization of
employees is not unlimited,13 as the right of an employer to
discharge for cause14 is undenied. The Industrial Peace Act does
not touch the normal exercise of the right of an employer to select
his employees or to discharge them. It is directed solely against the
abuse of that right by interfering with the countervailing right of
self-organization.15 But the difficulty arises in determining whether
in fact the discharges are made because of such a separable cause
or because of some other activities engaged in by employees for
the purpose of collective bargaining. 16
It is for the CIR, in the first instance, to make the determination,
"to weigh the employer's expressed motive in determining the
effect on the employees of management's otherwise equivocal
act."17 For the Act does not undertake the impossible task of
specifying in precise and unmistakable language each incident
which constitutes an unfair labor practice. Rather, it leaves to the
court the work of applying the Act's general prohibitory language
in the light of infinite combinations of events which may be
charged as violative of its terms.18 As the Circuit Court of Appeals
puts it:
Determining the legality of a dismissal necessarily
involves an appraisal of the employer's motives. In these
cases motivations are seldom expressly avowed and
avowals are not always candid. There thus must be a
measure of reliance on the administrative agency
knowledgeable in labor-management relations and on the
Trial Examiner who receives the evidence firsthand and is
therefore in a unique position to determine the credibility
of the witnesses. Where Examiner and Board are in
agreement there is an increased presumption in favor of
their resolution of the issue.19
What we have just essayed underscores at once the difference
between Royal Interocean and Lakas ng Pagkakaisa on the one
hand and this case on the other. In Royal Interocean, the
employee's letter to the home office, for writing which she was
dismissed, complained of the local manager's "inconsiderate and
untactful attitude"20 a grievance which, the court found, "had
nothing to do with or did not arise from her union activities." Nor
did the court find evidence of discriminatory discharge inLakas ng
Pagkakaisa as the letter, which the employee wrote to the mother
company in violation of the local company's rule, denounced
"wastage of company funds." In contrast, the express finding of the
court in this case was that the dismissal of the respondents was
made on account of the letter they had written, in which they
demanded the resignation of the bank president for a number of
reasons touching labor-management relations reasons which
not even the Bank's judgment that the respondents had committed
libel could excuse it for making summary discharges 21 in disregard
of its duty to bargain collectively.
In final sum and substance, this Court is in unanimity that the
Bank's conduct, identified as an interference with the employees'
right of self-organization, or as a retaliatory action, and/or as a
refusal to bargain collectively, constituted an unfair labor practice
within the meaning and intendment of section 4(a) of the
Industrial Peace Act.
ACCORDINGLY, the decision of July 4, 1962 and the resolution of
August 9, 1962 of the Court of Industrial Relations are affirmed, at
petitioner's cost.

What are some forms of BAD FAITH

BARGAINING?
G.R. No. 158930-31 August 22, 2006
UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND
ALLIED INDUSTRIES UNIONS - KILUSANG MAYO UNO
(UFE-DFA-KMU), Petitioner,
vs.
NESTL PHILIPPINES, INCORPORATED, Respondent.
x-----------------------------------x

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G.R. No. 158944-45 August 22, 2006

NESTL PHILIPPINES, INCORPORATED Petitioner,
vs.
UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND
ALLIED INDUSTRIES UNIONS - KILUSANG MAYO UNO
(UFE-DFA-KMU), Respondent.
DECISION
CHICO-NAZARIO, J.:
The Case
Before the Court are two (2) petitions for review
on certiorari under Rule 45 of the Rules of Court, as amended.
Both seek to annul and set aside the joint: (1) Decision 1 dated 27
February 2003, and (2) Resolution2 dated 27 June 2003, of the
Court of Appeals in CA-G.R. SP No. 698053 and No. 71540.4
G.R. No. 158930-31 was filed by Union of Filipro Employees
Drug, Food and Allied Industries Unions Kilusang Mayo Uno
(UFE-DFA-KMU) against Nestl Philippines, Incorporated
(Nestl) seeking the reverse of the Court of Appeals Decision in so
far as the latters failure to adjudge Nestl guilty of unfair labor
practice is concerned, as well as the Resolution of 27 June 2003
denying its Partial Motion for Reconsideration; G.R. No. 15894445 was instituted by Nestl against UFE-DFA-KMU similarly
seeking to annul and set aside the Decision and Resolution of the
Court of Appeals declaring 1) the Retirement Plan a valid collective
bargaining issue; and 2) the scope of assumption of jurisdiction
power of the Secretary of the DOLE to be limited to the resolution
of questions and matters pertaining merely to the ground rules of
the collective bargaining negotiations to be conducted between the
parties.
In as much as the cases involve the same set of parties; arose from
the same set of circumstances, i.e., from several Orders issued by
then Secretary of the Department of Labor and Employment
(DOLE), Hon. Patricia A. Sto. Tomas, respecting her assumption
of jurisdiction over the labor dispute between Nestl and UFEDFA-KMU, Alabang and Cabuyao Divisions;5 and likewise assail
the same Decision and Resolution of the Court of Appeals, the
Court ordered the consolidation of the two petitions. 6
The Facts
From the record and the pleadings filed by the parties, we cull the
following material facts in this case:
On 4 April 2001, in consideration of the impending expiration of
the existing collective bargaining agreement (CBA) between Nestl
and UFE-DFA-KMU7 on 5 June 2001,8 in a letter denominated as
a Letter of Intent, the Presidents of the Alabang and Cabuyao
Divisions of UFE-DFA-KMU, Ernesto Pasco and Diosdado
Fortuna, respectively, informed Nestl of their intent to "open our
new Collective Bargaining Negotiation for the year 2001-2004 x x
x as early as June 2001."9
In a letter10 dated 10 April 2001, Nestl acknowledged receipt of
the aforementioned letter. It also informed UFE-DFA-KMU that it
was preparing its own counter-proposal and proposed ground
rules that shall govern the conduct of the collective bargaining
negotiations.
On 29 May 2001, in another letter addressed to the UFE-DFAKMU (Cabuyao Division), Nestl underscored its position that
"unilateral grants, one-time company grants, company-initiated
policies and programs, which include, but are not limited to the
Retirement Plan, Incidental Straight Duty Pay and Calling Pay
Premium, are by their very nature not proper subjects of CBA
negotiations and therefore shall be excluded therefrom."11 In
addition, it clarified that with the closure of the Alabang Plant, the
CBA negotiations will only be applicable to the covered employees
of the Cabuyao Plant; hence, the Cabuyao Division of UFE-DFAKMU became the sole bargaining unit involved in the subject CBA
negotiations.
Thereafter, dialogue between the company and the union ensued.
In a letter dated 14 August 2001, Nestl, claiming to have reached
an impasse in said dialogue, requested12 the National Conciliation
and Mediation Board (NCMB), Regional Office No. IV, Imus,
Cavite, to conduct preventive mediation proceedings between it
and UFE-DFA-KMU. Nestl alleged that despite fifteen (15)
meetings between them, the parties failed to reach any agreement
on the proposed CBA. The request was docketed as NCMB-RBIVCAB-PM-08-035-01.
Conciliation proceedings nevertheless proved ineffective.
Complaining, in essence, of bargaining deadlock pertaining to
economic issues, i.e., "retirement (plan), panel composition, costs
and attendance, and CBA,"13UFE-DFA-KMU filed a Notice of
Strike14 on 31 October 2001 with the NCMB docketed as NCMBRBIV-LAG-NS-10-037-01. One week later, or on 07 November
2001, another Notice of Strike15 was filed by the UFE-DFA-KMU
docketed as NCMB-RBIV-LAG-NS-11-10-039-01, this time
predicated on Nestls alleged unfair labor practices i.e.,

bargaining in bad faith in that it was setting pre-conditions in the

ground rules by refusing to include the issue of the Retirement
Plan in the CBA negotiations. A strike vote was then conducted by
UFE-DFA-KMU on 22 November 2001. The result was an
overwhelming approval of the decision to hold a strike. 16
On 26 November 2001, in view of the looming strike, Nestl filed
with the DOLE a Petition for Assumption of
Jurisdiction,17 docketed as OS-AJ-0023-01, fundamentally praying
that the Secretary of the DOLE, Hon. Patricia A. Sto. Tomas,
assume jurisdiction over the current labor dispute as mandated by
Article 263 (g) of the Labor Code, as amended, thereby effectively
enjoining any impending strike at the Nestl Cabuyao Plant in
Laguna.
On 29 November 2001, Sec. Sto. Tomas issued an Order18 in OSAJ-0023-01, NCMB-RBIV-CAV-PM-08-035-01, NCMB-RBIVLAG-NS-10-037-01 & NCMB-RBIV-LAG-NS-11-10-039-01
assuming jurisdiction over the subject labor dispute between the
parties, the fallo thereof stating that:
CONSIDERING THE FOREGOING, this Office hereby assumes
jurisdiction over the labor dispute at the Nestl Philippines, Inc.
(Cabuyao Plant) pursuant to Article 263 (g) of the Labor Code, as
amended.
Accordingly, any strike or lockout is hereby enjoined. The parties
are directed to cease and desist from committing any act that
might lead to the further deterioration of the current labor
relations situation.
The parties are further directed to meet and convene for the
discussion of the union proposals and company counter-proposals
before the National Conciliation and Mediation Board (NCMB)
who is hereby designated as the delegate/facilitator of this Office
for this purpose. The NCMB shall report to this Office the results
of this attempt at conciliation and delimitation of the issues within
thirty (30) days from the parties receipt of this Order, in no case
later than December 31, 2001. If no settlement of all the issues is
reached, this Office shall thereafter define the outstanding issues
and order the filing of position papers for a ruling on the merits.
UFE-DFA-KMU sought reconsideration19 of the abovequoted
Assumption of Jurisdiction Order on the assertion that:
i. Article 263 (g) of the Labor Code, as amended, is invalid and
unconstitutional as it is in derogation of the provisions dealing on
protection to labor, social justice, the bill of rights, and, generally
accepted principle of international law;
ii. compulsory arbitration as a mode of dispute settlement
provided for in the Labor Code and sourced from the 1935 and
1973 constitutions has been discarded and deleted by the New
Charter which instituted in its stead free collective bargaining;
iii. that ILO condemns the continuous exercise by the Secretary of
Labor of the power of compulsory arbitration;
iv. granting that the law is valid, the Secretary has
unconstitutionally applied the law;
v. that the company is a business enterprise not belonging to an
industry indispensable to the national interest considering that it
is only one among a number of companies in the country
producing milk and nutritional products; that the Cabuyao plant is
only one of the six (6) Nestle plants in the country and could rely
on its highly automated Cagayan de Oro plant for buffer stocks;
vi. that the Secretary acted with grave abuse of discretion in
issuing the assailed order without the benefit of a prior notice and
inquiry.
In the interregnum, the union interposed a motion for extension of
time20 to file its position paper as directed by the Assumption of
Jurisdiction Order of 29 November 2001.
In an Order21 dated 14 January 2002, Sec. Sto. Tomas denied the
aforequoted motion for reconsideration in this wise:
This is not the first time that this Office had occasion to resolve the
grounds and arguments now being raised x x x. In a more recent
case In re: labor dispute at Toyota Motor Philippines
Corporation x x x this Office ruled:
The constitutionality of the power of the Secretary of Labor under
Article 263 (g) of the Labor Code to assume jurisdiction over a
labor dispute in an industry indispensable to the national interest
has been upheld as an exercise of police power of the constitution.
x x x.
xxxx
As ruled by the Supreme Court in the Philtread case:
Article 263 (g) of the Labor Code does not violate the workers
constitutional right to strike.
xxxxxx
The foregoing article clearly does not interfere with the workers
right to strike but merely regulates it, when in the exercise of such
right, national interests will be affected.
On 15 January 2002, despite the injunction22 contained in Sec. Sto.
Tomas Assumption of Jurisdiction Order and conciliation efforts

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by the NCMB, the employee members of UFE-DFA-KMU at the

Nestl Cabuyao Plant went on strike.
On 16 January 2002, in consideration of the above, Sec. Sto.
Tomas issued yet another Order23 directing: (1) the members of
UFE-DFA-KMU to return-to-work within twenty-four (24) hours
from receipt of such Order; (2) Nestl to accept back all returning
workers under the same terms and conditions existing preceding
to the strike; (3) both parties to cease and desist from committing
acts inimical to the on-going conciliation proceedings leading to
the further deterioration of the situation; and (4) the submission
of their respective position papers within ten (10) days from
receipt thereof.
Notwithstanding the Return-To-Work Order, the members of
UFE-DFA-KMU continued with their strike and refused to go back
to work as instructed. Thus, Sec. Sto. Tomas sought the assistance
of the Philippine National Police (PNP) for the enforcement of said
order.
At the hearing called on 7 February 2002, Nestl and UFE-DFAKMU filed their respective position papers. In its position
paper,24 Nestl addressed several issues allegedly pertaining to the
current labor dispute, i.e., economic provisions of the CBA as well
as the non-inclusion of the issue of the Retirement Plan in the
collective bargaining negotiations. UFE-DFA-KMU, in contrast,
limited itself to tackling the solitary issue of whether or not the
retirement plan was a mandatory subject in its CBA negotiations
with the company on the contention "that the Order of
Assumption of Jurisdiction covers only the issue of Retirement
Plan."25
On 8 February 2002, Nestl moved that UFE-DFA-KMU be
declared to have waived its right to present arguments respecting
the other issues raised by the company on the ground that the
latter chose to limit itself to discussing only one (1) issue. Sec. Sto.
Tomas, in an Order26 dated 11 February 2002, however, did not see
fit to grant said motion. She instead allowed UFE-DFA-KMU the
chance to tender its stand on the other issues raised by Nestl but
not covered by its initial position paper paper by way of a
Supplemental Position Paper.
UFE-DFA-KMU afterward filed several pleadings: (1) an Urgent
Motion to File a Reply dated 13 February 2002; (2) a Motion for
Time to File Supplemental Position Paper dated 22 February
2002; and (3) a Manifestation with Motion for Reconsideration of
the Order dated February 11, 2002 dated 27 February 2002. The
latter pleading was an absolute contradiction of the second one
praying for additional time to file the subject supplemental
position paper. In said Manifestation, UFE-DFA-KMU explained
that it "realized that the Order of February 11, 2002 appears to be
contrary to law and jurisprudence and is not in conformity with
existing laws and the evidence on record,"27 as the Secretary of the
DOLE "could only assume jurisdiction over the issues mentioned
in the notice of strike subject of the current dispute." 28 UFE-DFAKMU then went on to clarify that the Amended Notice of Strike did
not cite, as one of the grounds, the CBA deadlock.
On 8 March 2002, Sec. Sto. Tomas denied the motion for
reconsideration of UFE-DFA-KMU.
Frustrated with the foregoing turn of events, UFE-DFA-KMU filed
a petition for certiorari29 with application for the issuance of a
temporary restraining order or a writ of preliminary injunction
before the Court of Appeals. The petition was predicated on the
question of whether or not the DOLE Secretary committed grave
abuse of discretion in issuing the Orders of 11 February 2002 and
8 March 2002.
Meanwhile, in an attempt to finally resolve the crippling labor
dispute between the parties, then Acting Secretary of the DOLE,
Hon. Arturo D. Brion, came out with an Order30 dated 02 April
2002, in the main, ruling that:
a. we hereby recognize that the present Retirement Plan at the
Nestl Cabuyao Plant is a unilateral grant that the parties have
expressly so recognized subsequent to the Supreme Courts ruling
in Nestl, Phils. Inc. vs. NLRC, G.R. No. 90231, February 4,
1991, and is therefore not a mandatory subject for bargaining;
b. the Unions charge of unfair labor practice against the Company
is hereby dismissed for lack of merit;
c. the parties are directed to secure the best applicable terms of the
recently concluded CBs between Nestl Phils. Inc. and it eight (8)
other bargaining units, and to adopt these as the terms and
conditions of the Nestl Cabuyao Plant CBA;
d. all union demands that are not covered by the provisions of the
CBAs of the other eight (8) bargaining units in the Company are
hereby denied;
e. all existing provisions of the expired Nestl Cabuyao Plant CBA
without any counterpart in the CBAs of the other eight bargaining
units in the Company are hereby ordered maintained as part of the
new Nestl Cabuyao Plant CBA;

f. the parties shall execute their CBA within thirty (30) days from
receipt of this Order, furnishing this Office a copy of the signed
Agreement;
g. this CBA shall, in so far as representation is concerned, be for a
term of five (5) years; all other provisions shall be renegotiated not
later than three (3) years after its effective date which shall be
December 5, 2001 (or on the first day six months after the
expiration on June 4, 2001 of the superceded CBA).
Not surprisingly, UFE-DFA-KMU moved to reconsider the
aforequoted position of the DOLE.
On 6 May 2002, the Secretary of the DOLE, Hon. Sto. Tomas,
issued the last of the assailed Orders.31 This order resolved to deny
the preceding motion for reconsideration of UFE-DFA-KMU.
Undaunted still, UFE-DFA-KMU, for the second time, went to the
Court of Appeals likewise via a petition forcertiorari seeking to
annul, on the ground of grave abuse of discretion, the Orders of 02
April 2002 and 06 May 2002 of the Secretary of the DOLE.
The Court of Appeals, acting on the twin petitions for certiorari,
determined the issues in favor of UFE-DFA-KMU in a joint
Decision dated 27 February 2003. The dispositive part thereof
states that:
WHEREFORE, in view of the foregoing, there being grave abuse
on the part of the public respondent in issuing all the assailed
Orders, both petitions are hereby GRANTED. The assailed Orders
dated February 11, 2001, and March 8, 2001 (CA-G.R. SP No.
69805), as well as the Orders dated April 2, 2002 and May 6, 2002
(CA-G.R. SP No. 71540) of the Secretary of Labor and Employment
in the case entitled: "IN RE: LABOR DISPUTE AT NESTLE
PHILIPPINES INC. (CABUYAO FACTORY)" under OS-AJ-002301 (NCMB-RBIV-CAV-PM-08-035-01, NCMB-RBIV-LAG-NS-10037-01, NCMB-RBIV-LAG-NS-11-10-03901) are hereby
ANNULLED and SET ASIDE. Private respondent is hereby
directed to resume the CBA negotiations with the petitioner. 32
Dissatisfied, both parties separately moved for the reconsideration
of the abovequoted decision with Nestl basically assailing that
part of the decision finding the DOLE Secretary to have gravely
abused her discretion when she ruled that the Retirement Plan is
not a valid issue for collective bargaining negotiations; while UFEDFA-KMU questions, in essence, the appellate courts decision in
absolving Nestl of the charge of unfair labor practice.
The parties efforts were all for naught as the Court of Appeals
stood pat in its earlier pronouncements and denied the motions
for reconsideration in a joint Resolution dated 27 June 2003.
Hence, these petitions for review on certiorari separately filed by
the parties. Said petitions were ordered consolidated in a Supreme
Court Resolution dated 29 March 2004.
The Issues
UFE-DFA-KMUs petition for review docketed as G.R. No.
158930-31, is predicated on the following alleged errors:
I.
THE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF
LAW IN NOT HOLDING THAT RESPONDENT IS GUILTY OF
UNFAIR LABOR PRACTICE IN REFUSING TO PROCEED WITH
THE CBA NEGOTIATIONS UNLESS PETITIONER FIRST
ADMITS THAT THE RETIREMENT PLAN IN THE COMPANY IS
A NON-CBA MATTER; and
II.
THE CONTENTION THAT THERE IS NO EVIDENCE OF
UNFAIR LABOR PRACTICE ON RESPONDENT NESTLS PART
AND THAT PETITIONER DID NOT RAISE THE ISSUE OF ULP
IN ITS ARGUMENTS BEFORE THE COURT OF APPEALS IS
GROSSLY ERRONEOUS.33
Whereas in G.R. No. 158944-45, petitioner Nestl challenges the
conclusion of the Court of Appeals on the basis of the following
issues:
I.
WHETHER OR NOT THE COURT OF APPEALS COMMITTED
SERIOUS ERROR IN HOLDING THAT THE POWERS GRANTED
TO THE SECRETARY OF LABOR TO RESOLVE NATIONAL
INTEREST DISPUTES UNDER ARTICLE 263 (G) OF THE
LABOR CODE MAY BE LIMITED BY A (SECOND) NOTICE OF
STRIKE; and
II.
WHETHER OR NOT THE COURT OF APPEALS COMMITTED
SERIOUS ERROR IN ANNULING THE SECRETARY OF
LABORS JUDGMENT ON THE RETIREMENT PLAN ISSUE
WHICH WAS MERELY A PART OF THE COMPLETE
RESOLUTION OF THE LABOR DISPUTE.34
On the whole, the consolidated cases only raise three (3)
fundamental issues for deliberation by this Court, that is, whether
or not the Court of Appeals committed reversible error, first, in
finding the Secretary of Labor and Employment to have gravely
abused her discretion in her pronouncement that the Retirement

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Plan was not a proper subject to be included in the CBA

negotiations between the parties; hence, non-negotiable; second,
in holding that the assumption powers of the Secretary of Labor
and Employment should have been limited merely to the grounds
alleged in the second Notice of Strike; and third, in not ruling that
Nestl was guilty of unfair labor practice despite allegedly setting a
pre-condition to bargaining the non-inclusion of the Retirement
Plan as an issue in the collective bargaining negotiations.
The Courts Ruling
Foremost for our resolution is the matter of the non-inclusion of
the Retirement Plan in the CBA negotiations between Nestl and
UFE-DFA-KMU (Cabuyao Division).
In finding the Secretary of the DOLE to have gravely abused her
discretion in holding that the Retirement Plan isnot a valid CBA
issue, the Court of Appeals explained that:
Although the Union, thru its President Diosdado Fortuna, signed a
Memorandum of Agreement dated October 8, 1998 together with
the private respondent which clearly states that the "Company
agree to extend the following unilateral grants which shall not
form part of the CBA" (citation omitted) however, the same
document made a proviso that "reference on the Retirement Plan
in the CBA signed on July 4, 1995, shall be maintained," x x x thus,
this Court is of the belief and so holds that the Retirement Plan is
still a valid CBA issue, hence, it could not be argued that the true
intention of the parties is that the Retirement Plan, although
referred in the CBA, would not in any way form part of the CBA
(citation omitted) as it could be clearly inferred by this Court that
it is to be used as an integral part of the CBA and to be used as a
topic for future bargaining, in consonance with the ruling of the
Supreme Court in the previous Nestl Case that "the Retirement
Plan was a collective bargaining issue right from the start." 35
In filing the present petition, Nestle is of the view that after the
1991 Supreme Court Decision was promulgated, there was
obviously an agreement by the parties to no longer consider the
Retirement Plan as a negotiable item subject to bargaining.
Rather, said benefit would be regarded as a unilateral grant
outside the ambit of negotiation. Nestl justifies such contention
by directing the Courts attention to the Ground Rules for 1998
Alabang/Cabuyao Factories CBA Negotiation (citation omitted)
signed by it and the representatives of UFE-DFA-KMU where both
sides "expressly" recognized Nestls prerogative to initiate
unilateral grants which are not negotiable. It likewise cited the
Memorandum of Agreement36 entered into by the parties on 08
October 1998, which also "categorically" referred to the
Retirement Plan as one of the unilateral grants alluded to in the
aforementioned Ground Rules. Nestle then concluded that:
Indeed, the foregoing uncontroverted documents very clearly
established the clear agreement of the parties, after the 1991
Supreme Court Decision, to remove the Retirement Plan from the
scope of bargaining negotiation, and leave the matter upon the
sole initiative and discretion of Nestl.37
In contrast, UFE-DFA-KMU posits that there is nothing in either
of the documents aboveclaimed that proves that it agreed "to treat
the Retirement Plan as a unilateral grant of the company which is
outside the scope of the CBA and hence, not a proper subject of
bargaining." It explained that the MOA alluded to by Nestl merely
speaks of the improvement38 or the review for the
improvement39 of the current Retirement Plan and nothing else.
UFE-DFA-KMU rationalizes that:
Had the objective of the parties been to consider the Retirement
Plan as not a subject for collective bargaining, they would have
stated so in categorical terms. Or, they could have deleted the said
benefit from the CBA.
Unfortunately for petitioner, the documents relied upon by it do
not state that the Retirement Plan is no longer a bargainable item.
The said benefit was not also removed or deleted from the CBA.
If ever, what was "unilaterally granted" by petitioner company as
appearing on the above-stated letter and MOA were the
"improvements" on the Retirement Plan. The Retirement Plan
could not have been unilaterally granted by the said letter and
MOA since the said Plan predates the said letter and MOA by over
two decades.
UFE-DFA-KMU concludes that "[s]ince the Retirement Plan did
not derive its existence from the letter and MOA x x x, the nature
of the Retirement Plan was not altered or changed by the
subsequent issuance by petitioner company of the said letter and
MOA. The Retirement Plan remained a CBA item which is a
proper subject of collective bargaining pursuant to the 1991 ruling
of this Honorable Court."40
We agree.
The present issue is not one of first impression. In Nestl
Philippines, Inc. v. NLRC,41 ironically involving the same parties

herein, this Court has had the occasion to affirm that a retirement
plan is consensual in nature.
By way of background, the parties therein resorted to a
"slowdown" and walked out of the factory prompting the
management to shut down its operations. Collective bargaining
negotiations were conducted but a deadlock was subsequently
declared. The Secretary of Labor assumed jurisdiction over the
labor dispute and issued a return-to-work order. The NLRC
thereafter issued its resolution modifying Nestls existing "noncontributory" Retirement Plan. The company filed a petition for
certiorari alleging grave abuse of discretion on the part of the
NLRC as Nestl was arguing that since its Retirement Plan is noncontributory, it should be a non-issue in CBA negotiations. Nestl
had the sole and exclusive prerogative to define the terms of the
plan as the employees had no vested and demandable rights
thereon the grant of such not being a contractual obligation but
simply gratuitous. In a ruling contrary to Nestls position, this
Court, through Madame Justice Grio-Aquino, declared that:
The companys [Nestl] contention that its retirement plan is nonnegotiable, is not well-taken. The NLRC correctly observed that
the inclusion of the retirement plan in the collective bargaining
agreement as part of the package of economic benefits extended by
the company to its employees to provide them a measure of
financial security after they shall have ceased to be employed in
the company, reward their loyalty, boost their morale and
efficiency and promote industrial peace, gives "a consensual
character" to the plan so that it may not be terminated or modified
at will by either party (citation omitted).
The fact that the retirement plan is non-contributory, i.e., that the
employees contribute nothing to the operation of the plan, does
not make it a non-issue in the CBA negotiations. As a matter of
fact, almost all of the benefits that the petitioner has granted to its
employees under the CBA salary increases, rice allowances,
midyear bonuses, 13th and 14th month pay, seniority pay, medical
and hospitalization plans, health and dental services, vacation,
sick & other leaves with pay are non-contributory benefits. Since
the retirement plan has been an integral part of the CBA since
1972, the Unions demand to increase the benefits due the
employees under said plan, is a valid CBA issue. x x x
xxxx
x x x [E]mployees do have a vested and demandable right over
existing benefits voluntarily granted to them by their employer.
The latter may not unilaterally withdraw, eliminate or diminish
such benefits (Art. 100, Labor Code; other citation omitted).
[Emphases supplied.]42
In the case at bar, it cannot be denied that the CBA that was about
to expire at that time contained provisions respecting the
Retirement Plan. As the latter benefit was already subject of the
existing CBA, the members of UFE-DFA-KMU were only
exercising their prerogative to bargain or renegotiate for the
improvement of the terms of the Retirement Plan just like they
would for all the other economic, as well as non-economic benefits
previously enjoyed by them. Precisely, the purpose of collective
bargaining is the acquisition or attainment of the best possible
covenants or terms relating to economic and non-economic
benefits granted by employers and due the employees. The Labor
Code has actually imposed as a mutual obligation of both parties,
this duty to bargain collectively. The duty to bargain collectively is
categorically prescribed by Article 252 of the said code. It states:
ART. 252. MEANING OF DUTY TO BARGAIN COLLECTIVELY.
The duty to bargain collectively means the performance of a
mutual obligation to meet and confer promptly and expeditiously
and in good faith for the purpose of negotiating an agreement with
respect to wages, hours of work, and all other terms and
conditions of employment including proposals for adjusting any
grievances or questions arising under such agreement and
executing a contract incorporating such agreement if requested by
either party, but such duty does not compel any party to agree to a
proposal or to make any concession.
Further, Article 253, also of the Labor Code, defines the parameter
of said obligation when there already exists a CBA, viz:
ART. 253. DUTY TO BARGAIN COLLECTIVELY WHEN THERE
EXISTS A COLLECTIVE BARGAINING AGREEMENT. The duty
to bargain collectively shall also mean that either party shall not
terminate nor modify such agreement during its lifetime.
However, either party can serve a written notice to terminate or
modify the agreement at least sixty (60) days prior to its expiration
date. It shall be the duty of both parties to keep the status quo and
to continue in full force and effect the terms and conditions of the
existing agreement during the sixty day period and/or until a new
agreement is reached by the parties.
And, in demanding that the terms of the Retirement Plan be
opened for renegotiation, the members of UFE-DFA-KMU are

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acting well within their rights as we have, indeed, declared that the
Retirement Plan is consensual in character; and so, negotiable.
Contrary to the claim of Nestl that the categorical mention of the
terms unilateral agreement in the letter and the MOA signed by
the representatives of UFE-DFA-KMU, had, for all intents and
purposes worked to estop UFE-DFA-KMU from raising it as an
issue in the CBA negotiations, our reading of the same, specifically
Paragraph 6 and subparagraph 6.2:
6. Additionally, the COMPANY agree to extend the following
unilateral grants which shall not form part of the Collective
Bargaining Agreement (CBA):
xxxx
6.2. Review for improvement of the COMPANYs Retirement Plan
and the reference on the Retirement Plan in the Collective
Bargaining Agreement signed on 4 July 1995 shall be
maintained. 43
hardly persuades us that the members of UFE-DFA-KMU have
agreed to treat the Retirement Plan as a benefit the terms of which
are solely dependent on the inclination of the Nestl and remove
the subject benefit from the ambit of the CBA. The
characterization unilaterally imposed by Nestl on the Retirement
Plan cannot operate to divest the employees of their "vested and
demandable right over existing benefits voluntarily granted by
their employer."44 Besides, the contention that UFE-DFA-KMU
has "abandoned" or forsaken our earlier pronouncement vis--vis
the consensual nature of a retirement plan is quite inconsistent
with, nay, is negated by its conduct in doggedly asking for a
renegotiation of said benefit.
Worth noting, at this point, is the fact that the aforequoted
paragraph 6 and its subparagraphs, particularly subparagraph 6.2,
highlights an undeniable fact that Nestl recognizes that the
Retirement Plan is part of the existing Collective Bargaining
Agreement.
Nestl further rationalizes that a ruling declaring the Retirement
Plan a valid CBA negotiation issue will inspire other bargaining
units to demand for greater benefits in accordance with their
respective appetites. Suffice it to say that the consensual nature of
the Retirement Plan neither gives the union members the
unfettered right nor the unbridled prerogative to demand more
than what the company can viably give.
As regards the scope of the assumption powers of the Secretary of
the DOLE, the appellate court ruled that Sec. Sto. Tomas
assumption of jurisdiction powers should have been limited to the
disagreement on the ground rules of the collective bargaining
negotiations. The Court of Appeals referred to the minutes of the
meeting held on 30 October 2001. That the representative Nestl
was recorded to have stated that "we are still discussing ground
rules and not yet on the CBA negotiations proper, a deadlock
cannot be declared,"45 was a telling fact. The Court of Appeals,
thus, declared that the Secretary "should not have ruled on the
questions and issues relative to the substantive aspect of the CBA
simply because there was no conflict on the CBA yet." 46
UFE-DFA-KMU agrees in the above and contends that the
requisites of judicial inquiry require, first and foremost the
presence of an actual case controversy. It then concludes that "[i]f
the courts of law cannot act and decide in the absence of an actual
case or controversy, so should be (sic) also the Honorable DOLE
Secretary."47
Nestle, however, contradicts the preceding disquisitions on the
ground that such referral to the minutes of the meeting was
erroneous and misleading. It avers that the Court of Appeals failed
to consider the circumstance surrounding said utterance that the
statement was made during the preventive mediation proceedings
and the UFE-DFA-KMU had not yet filed any notice of strike. It
further emphasizes that it was UFE-DFA-KMU who first alleged
bargaining deadlock as the basis for the filing of its Notice of
Strike. Finally, Nestl clarifies that before the first Notice of Strike
was filed, several conciliation conferences had already been
undertaken where both parties had exchanges of their respective
CBA proposals.
In this, we agree with Nestl. Declaring the Secretary of the DOLE
to have acted with grave abuse of discretion for ruling on
substantial matters or issues and not restricting itself merely on
the ground rules, the appellate court and UFE-DFA-KMU would
have us treat the subject labor dispute in a piecemeal fashion.
The power granted to the Secretary of the DOLE by Paragraph (g)
of Article 263 of the Labor Code, to wit:
ART. 263. STRIKES, PICKETING, AND LOCKOUTS.
xxxx
(g) When, in his opinion, there exists a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to
the national interest, the Secretary of Labor and Employment may
assume jurisdiction over the dispute and decide it or certify the

same to the Commission for compulsory arbitration. Such

assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified
in the assumption or certification order. If one has already taken
place at the time of assumption or certification, all striking or
locked out employees shall immediately return to work and the
employer shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before
the strike or lockout. The Secretary of Labor and Employment or
the Commission may seek the assistance of law enforcement
agencies to ensure compliance with this provision as well as with
such orders as he may issue to enforce the same.
xxxx
authorizes her to assume jurisdiction over a labor dispute, causing
or likely to cause a strike or lockout in an industry indispensable to
the national interest, and correlatively, to decide the same.
In the case at bar, the Secretary of the DOLE simply relied on the
Notices of Strike that were filed by UFE-DFA-KMU as stated in her
Order of 08 March 2002, to wit:
x x x The records disclose that the Union filed two Notices of
Strike. The First is dated October 31, 2001 whose grounds are cited
verbatim hereunder:
"A. Bargaining Deadlock
1. Economic issues (specify)
1. Retirement
2. Panel Composition
3. Costs and Attendance
4. CBA"
The second Notice of Strike is dated November 7, 2001 and the
cited ground is like quoted verbatim below:
"B. Unfair Labor Practices (specify)
Bargaining in bad faith
Setting pre-condition in the ground rules (Retirement issue)"
Nowhere in the second Notice of Strike is it indicated that this
Notice is an amendment to and took the place of the first Notice of
Strike. In fact, our Assumption of Jurisdiction Order dated
November 29, 2001 specifically cited the two (2) Notices of Strike
without any objection on the part of the Union x x x.48
Thus, based on the Notices of Strike filed by UFE-DFA-KMU, the
Secretary of the DOLE rightly decided on matters of substance.
Further, it is a fact that during the conciliation meetings before the
NCMB, but prior to the filing of the notices of strike, the parties
had already delved into matters affecting the meat of the collective
bargaining agreement. The appellate courts reliance on the
statement49 of the representative of Nestl in ruling that the labor
dispute had yet to progress from the discussion of the ground rules
of the CBA negotiations is clearly misleading; hence, erroneous.
Nevertheless, granting for the sake of argument that the meetings
undertaken by the parties had not gone beyond the discussion of
the ground rules, the issue of whether or not the Secretary of the
DOLE could decide issues incidental to the subject labor dispute
had already been answered in the affirmative. The Secretarys
assumption of jurisdiction power necessarily includes matters
incidental to the labor dispute, that is, issues that are necessarily
involved in the dispute itself, not just to those ascribed in the
Notice of Strike; or, otherwise submitted to him for resolution. As
held in the case of International Pharmaceuticals, Inc. v. Sec. of
Labor and Employment,50 "x x x [t]he Secretary was explicitly
granted by Article 263 (g) of the Labor Code the authority to
assume jurisdiction over a labor dispute causing or likely to cause
a strike or lockout in an industry indispensable to the national
interest, and decide the same accordingly. Necessarily, this
authority to assume jurisdiction over the said labor dispute must
include and extend to all questions and controversies arising
therefrom, including cases over which the Labor Arbiter has
exclusive jurisdiction."51 Accordingly, even if not exactly on the
ground upon which the Notice of Strike is based, the fact that the
issue is incidental to the resolution of the subject labor dispute or
that a specific issue had been submitted to the Secretary of the
DOLE for her resolution, validly empowers the latter to take
cognizance of and resolve the same.
Secretary Sto. Tomas correctly assumed jurisdiction over the
questions incidental to the current labor dispute and those matters
raised by the parties. In any event, the query as to whether or not
the Retirement Plan is to be included in the CBA negotiations
between the parties ineluctably dictates upon the Secretary of the
DOLE to go into the substantive matter of the CBA negotiations.
Lastly, the third issue pertains to the alleged reversible error
committed by the Court of Appeals in holding, albeit impliedly,
Nestl free and clear from any unfair labor practice. UFE-DFAKMU argues that Nestls "refusal to bargain on a very important
CBA economic provision constitutes unfair labor practice." 52 It
explained that Nestl set as a precondition for the holding of

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collective bargaining negotiations the non-inclusion of the issue of

Retirement Plan. In its words, "respondent Nestl Phils., Inc.
insisted that the Union should first agree that the retirement plan
is not a bargaining issue before respondent Nestl would agree to
discuss other issues in the CBA." 53 It then concluded that "the
Court of Appeals committed a legal error in not ruling that
respondent company is guilty of unfair labor practice. It also
committed a legal error in failing to award damages to the
petitioner for the ULP committed by the respondent." 54
Nestl refutes the above argument and asserts that it was only
before the Court of Appeals, and in the second Petition for
Certiorari at that, did UFE-DFA-KMU raise the matter of unfair
labor practice. It reasoned that the subject of unfair labor practice
should have been threshed out with the appropriate labor tribunal.
In justifying the failure of the Court of Appeals to find it guilty of
unfair labor practice, it stated that:
Under the circumstances, therefore, there was no way for the
Court of Appeals to make a ruling on the issues of unfair labor
practice and damages, simply because there was nothing to
support or justify such action. Although petitioner was afforded by
the Secretary the opportunity to be heard and more, it simply
chose to omit the said issues in the proceedings below. 55
We are persuaded.
The concept of "unfair labor practice" is defined by the Labor Code
as:
ART. 247. CONCEPT OF UNFAIR LABOR PRACTICE AND
PROCEDURE FOR PROSECUTION THEREOF. Unfair labor
practices violate the constitutional right of workers and employees
to self-organization, are inimical to the legitimate interests of both
labor and management, including their right to bargain
collectively and otherwise deal with each other in an atmosphere
of freedom and mutual respect, disrupt industrial peace and
hinder the promotion of healthy and stable labor-management
relations.
x x x x.
The same code likewise provides the acts constituting unfair labor
practices committed by employers, to wit:
ART. 248. UNFAIR LABOR PRACTICES OF EMPLOYERS. It
shall be unlawful for an employer to commit any of the following
unfair labor practices:
(a) To interfere with, restrain or coerce employees in the exercise
of their right to self-organization;
(b) To require as a condition of employment that a person or an
employee shall not join a labor organization or shall withdraw
from one to which he belongs;
(c) To contract out services or functions being performed by union
members when such will interfere with, restrain or coerce
employees in the exercise of their right to self-organization;
(d) To initiate, dominate, assist or otherwise interfere with the
formation or administration of any labor organization, including
the giving of financial or other support to it or its organizers or
supporters;
(e) To discriminate in regard to wages, hours of work, and other
terms and conditions of employment in order to encourage or
discourage membership in any labor organization. Nothing in this
Code or in any other law shall stop the parties from requiring
membership in a recognized collective bargaining agent as a
condition for employment, except those employees who are
already members of another union at the time of the signing of the
collective bargaining agreement.
Employees of an appropriate collective bargaining unit who are
not members of the recognized collective bargaining agent may be
assessed a reasonable fee equivalent to the dues and other fees
paid by members of the recognized collective bargaining agent, if
such non-union members accept the benefits under the collective
agreement. Provided, That the individual authorization required
under Article 242, paragraph (o) of this Code shall not apply to the
nonmembers of the recognized collective bargaining agent; [The
article referred to is 241, not 242. CAA]
(f) To dismiss, discharge, or otherwise prejudice or discriminate
against an employee for having given or being about to give
testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed by this
Code;
(h) To pay negotiation or attorneys fees to the union or its officers
or agents as part of the settlement of any issue in collective
bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only
the officers and agents of corporations associations or
partnerships who have actually participated, authorized or ratified
unfair labor practices shall be held criminally liable. [Emphasis
supplied.]

Herein, Nestl is accused of violating its duty to bargain

collectively when it purportedly imposed a pre-condition to its
agreement to discuss and engage in collective bargaining
negotiations with UFE-DFA-KMU.
A meticulous review of the record and pleadings of the cases at bar
shows that, of the two notices of strike filed by UFE-DFA-KMU
before the NCMB, it was only on the second that the ground of
unfair labor practice was alleged. Worse, the 7 November 2001
Notice of Strike merely contained a general allegation that Nestl
committed unfair labor practice by bargaining in bad faith for
supposedly "setting pre-condition in the ground rules (Retirement
issue)."56 On the contrary, Nestl, in its Position Paper, did not
confine itself to the issue of the non-inclusion of the Retirement
Plan but extensively discussed its stance on other economic
matters pertaining to the CBA.
Basic is the principle that good faith is presumed and he who
alleges bad faith has the duty to prove the same. 57By imputing bad
faith unto the actuations of Nestl, it was UFE-DFA-KMU,
therefore, who had the burden of proof to present substantial
evidence to support the allegation of unfair labor practice. A
perusal of the allegations and arguments raised by UFE-DFAKMU in the Memorandum (in G.R. Nos. 158930-31) will readily
disclose that it failed to discharge said onus probandi as there is
still a need for the presentation of evidence other than its bare
contention of unfair labor practice in order to make certain the
propriety or impropriety of the unfair labor practice charge hurled
against Nestl. Under Rule XIII, Sec. 4, Book V of the
Implementing Rules of the Labor Code:
x x x. In cases of unfair labor practices, the notice of strike shall as
far as practicable, state the acts complained of and the efforts to
resolve the dispute amicably." [Emphasis supplied.]
Except for the assertion put forth by UFE-DFA-KMU, neither the
second Notice of Strike nor the records of these cases substantiate
a finding of unfair labor practice. It is not enough that the union
believed that the employer committed acts of unfair labor practice
when the circumstances clearly negate even a prima facie showing
to warrant such a belief.58 In its letter59 to UFE-DFA-KMU of 29
May 2001, though Nestl underscored its position that "unilateral
grants, one-time company grants, company-initiated policies
and programs, which include, but are not limited to the
Retirement Plan, Incidental Straight Duty Pay and Calling Pay
Premium, are by their very nature not proper subjects of CBA
negotiations and therefore shall be excluded therefrom," such
attitude is not tantamount to refusal to bargain. This is especially
true when it is viewed in the light of the fact that eight out of nine
bargaining units have allegedly agreed to treat the Retirement Plan
as a unilateral grant. Nestl, therefore, cannot be faulted for
considering the same benefit as unilaterally granted. To be sure, it
must be shown that Nestl was motivated by ill will, "bad faith, or
fraud, or was oppressive to labor, or done in a manner contrary to
morals, good customs, or public policy, and, of course, that social
humiliation, wounded feelings, or grave anxiety resulted x x x" 60 in
disclaiming unilateral grants as proper subjects in their collective
bargaining negotiations.
There is no per se test of good faith in bargaining. 61 Good faith or
bad faith is an inference to be drawn from the facts, 62 to be precise,
the crucial question of whether or not a party has met his statutory
duty to bargain in good faith typically turns on the facts of the
individual case. Necessarily, a determination of the validity of the
Nestls proposition involves an appraisal of the exercise of its
management prerogative.
Employers are accorded rights and privileges to assure their selfdetermination and independence and reasonable return of
capital.63 This mass of privileges comprises the so-called
management prerogatives.64 In this connection, the rule is that
good faith is always presumed. As long as the companys exercise
of the same is in good faith to advance its interest and not for
purpose of defeating or circumventing the rights of employees
under the law or a valid agreement, such exercise will be upheld. 65
Construing arguendo that the content of the aforequoted letter of
29 May 2001 laid down a pre-condition to its agreement to bargain
with UFE-DFA-KMU, Nestls inclusion in its Position Paper of its
proposals affecting other matters covered by the CBA contradicts
the claim of refusal to bargain or bargaining in bad faith.
Accordingly, since UFE-DFA-KMU failed to proffer substantial
evidence that would overcome the legal presumption of good faith
on the part of Nestl, the award of moral and exemplary damages
is unavailing.
It must be remembered at all times that the Philippine
Constitution, while inexorably committed towards the protection
of the working class from exploitation and unfair treatment,
nevertheless mandates the policy of social justice so as to strike a
balance between an avowed predilection for labor, on the one

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hand, and the maintenance of the legal rights of capital, the

proverbial hen that lays the golden egg, on the other. Indeed, we
should not be unmindful of the legal norm that justice is in every
case for the deserving, to be dispensed with in the light of
established facts, the applicable law, and existing jurisprudence. 66
In sum, from the facts and evidence extant in the records of these
consolidated petitions, this Court finds that 1) the Retirement Plan
is still a valid issue for herein parties collective bargaining
negotiations; 2) the Court of Appeals committed reversible error in
limiting to the issue of the ground rules the scope of the power of
the Secretary of Labor to assume jurisdiction over the subject
labor dispute; and 3) Nestl is not guilty of unfair labor practice.
As no other issues are availing, this ponencia writes finis to the
protracted labor dispute between Nestl and UFE-DFA-KMU
(Cabuyao Division).
WHEREFORE, in view of the foregoing, the Petition in G.R. No.
158930-31 seeking that Nestl be declared to have committed
unfair labor practice in allegedly setting a precondition to
bargaining is DENIED. The Petition in G.R. No. 158944-45,
however, is PARTLY GRANTED in that we REVERSE the ruling of
the Court of Appeals in CA G.R. SP No. 69805 in so far as it ruled
that the Secretary of the DOLE gravely abused her discretion in
failing to confine her assumption of jurisdiction power over the
ground rules of the CBA negotiations; but the ruling of the Court
of Appeals on the inclusion of the Retirement Plan as a valid issue
in the collective bargaining negotiations between UFE-DFA-KMU
and Nestl is AFFIRMED. The parties are directed to resume
negotiations respecting the Retirement Plan and to take action
consistent with the discussions hereinabove set forth. No costs.
SO ORDERED.
G.R. Nos. 158930-31
March 3, 2008
UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND
ALLIED INDUSTRIES UNIONS - KILUSANG MAYO UNO
(UFE-DFA-KMU), petitioner,
vs.
NESTL PHILIPPINES, INCORPORATED, respondent.
x------------------------------------------x
G.R. Nos. 158944-45
March 3, 2008
NESTL PHILIPPINES, INCORPORATED, petitioner,
vs.
UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND
ALLIED INDUSTRIES UNIONS - KILUSANG MAYO UNO
(UFE-DFA-KMU), respondent.
RESOLUTION
CHICO-NAZARIO, J.:
On 22 August 2006, this Court promulgated its Decision 1 in the
above-entitled cases, the dispositive part of which reads
WHEREFORE, in view of the foregoing, the Petition in
G.R. No. 158930-31 seeking that Nestl be declared to
have committed unfair labor practice in allegedly setting
a precondition to bargaining is DENIED. The Petition in
G.R. No. 158944-45, however, is PARTLY GRANTED in
that we REVERSE the ruling of the Court of Appeals in
CA G.R. SP No. 69805 in so far as it ruled that the
Secretary of the DOLE gravely abused her discretion in
failing to confine her assumption of jurisdiction power
over the ground rules of the CBA negotiations; but the
ruling of the Court of Appeals on the inclusion of the
Retirement Plan as a valid issue in the collective
bargaining negotiations between UFE-DFA-KMU and
Nestl is AFFIRMED. The parties are directed to resume
negotiations respecting the Retirement Plan and to take
action consistent with the discussions hereinabove set
forth. No costs.
Subsequent thereto, Nestl Philippines, Incorporated (Nestl) filed
a Motion for Clarification2 on 20 September 2006; while Union of
Filipro Employees Drug, Food and Allied Industries Union
Kilusang Mayo Uno (UFE-DFA-KMU), on 21 September 2006,
filed a Motion for Partial Reconsideration3 of the foregoing
Decision.
The material facts of the case, as determined by this Court in its
Decision, may be summarized as follows:
UFE-DFA-KMU was the sole and exclusive bargaining agent of the
rank-and-file employees of Nestl belonging to the latters Alabang
and Cabuyao plants. On 4 April 2001, as the existing collective
bargaining agreement (CBA) between Nestl and UFE-DFAKMU4 was to end on 5 June 2001,5 the Presidents of the Alabang
and Cabuyao Divisions of UFE-DFA-KMU informed Nestl of their
intent to "open [our] new Collective Bargaining Negotiation for the
year 2001-2004 x x x as early as June 2001." 6 In response thereto,
Nestl informed them that it was also preparing its own counter-

proposal and proposed ground rules to govern the impending

conduct of the CBA negotiations.
On 29 May 2001, in another letter to the UFE-DFA-KMU
(Cabuyao Division only)7, Nestl reiterated its stance that
"unilateral grants, one-time company grants, company-initiated
policies and programs, which include, but are not limited to the
Retirement Plan, Incidental Straight Duty Pay and Calling Pay
Premium, are by their very nature not proper subjects of CBA
negotiations and therefore shall be excluded therefrom."8
Dialogue between the company and the union thereafter ensued.
On 14 August 2001, however, Nestl requested 9 the National
Conciliation and Mediation Board (NCMB), Regional Office No.
IV, Imus, Cavite, to conduct preventive mediation proceedings
between it and UFE-DFA-KMU owing to an alleged impasse in
said dialogue; i.e., that despite fifteen (15) meetings between them,
the parties failed to reach any agreement on the proposed CBA.
Conciliation proceedings proved ineffective, though, and the UFEDFA-KMU filed a Notice of Strike10 on 31 October 2001 with the
NCMB, complaining, in essence, of a bargaining deadlock
pertaining to economic issues, i.e., "retirement (plan), panel
composition, costs and attendance, and CBA". 11 On 07 November
2001, anotherNotice of Strike12 was filed by the union, this time
predicated on Nestls alleged unfair labor practices, that is,
bargaining in bad faith by setting pre-conditions in the ground
rules and/or refusing to include the issue of the Retirement Plan in
the CBA negotiations. The result of a strike vote conducted by the
members of UFE-DFA-KMU yielded an overwhelming approval of
the decision to hold a strike.13
On 26 November 2001, prior to holding the strike, Nestl filed
with the DOLE a Petition for Assumption of Jurisdiction, 14 praying
for the Secretary of the DOLE, Hon. Patricia A. Sto. Tomas, to
assume jurisdiction over the current labor dispute in order to
effectively enjoin any impending strike by the members of the
UFE-DFA-KMU at the Nestls Cabuyao Plant in Laguna.
On 29 November 2001, Sec. Sto. Tomas issued an
Order15 assuming jurisdiction over the subject labor dispute. The
fallo of said Order states that:
CONSIDERING THE FOREGOING, this Office hereby
assumes jurisdiction over the labor dispute at the Nestl
Philippines, Inc. (Cabuyao Plant) pursuant to Article 263
(g) of the Labor Code, as amended.
Accordingly, any strike or lockout is hereby enjoined. The
parties are directed to cease and desist from committing
any act that might lead to the further deterioration of the
current labor relations situation.
The parties are further directed to meet and convene for
the discussion of the union proposals and company
counter-proposals before the National Conciliation and
Mediation Board (NCMB) who is hereby designated as
the delegate/facilitator of this Office for this purpose. The
NCMB shall report to this Office the results of this
attempt at conciliation and delimitation of the issues
within thirty (30) days from the parties receipt of this
Order, in no case later than December 31, 2001. If no
settlement of all the issues is reached, this Office shall
thereafter define the outstanding issues and order the
filing of position papers for a ruling on the merits.
UFE-DFA-KMU sought reconsideration16 of the above but
nonetheless moved for additional time to file its position paper as
directed by the Assumption of Jurisdiction Order.
On 14 January 2002, Sec. Sto. Tomas denied said motion for
reconsideration.
On 15 January 2002, despite the order enjoining the conduct of
any strike or lockout and conciliation efforts by the NCMB, the
employee members of UFE-DFA-KMU at Nestls Cabuyao Plant
went on strike.
In view of the above, in an Order dated on 16 January 2002, Sec.
Sto. Tomas directed: (1) the members of UFE-DFA-KMU to
return-to-work within twenty-four (24) hours from receipt of such
Order; (2) Nestl to accept back all returning workers under the
same terms and conditions existing preceding to the strike; (3)
both parties to cease and desist from committing acts inimical to
the on-going conciliation proceedings leading to the further
deterioration of the situation; and (4) the submission of their
respective position papers within ten (10) days from receipt
thereof. But notwithstanding the Return-to-Work Order, the
members of UFE-DFA-KMU continued with their strike, thus,
prompting Sec. Sto. Tomas to seek the assistance of the Philippine
National Police (PNP) for the enforcement of said order.
On 7 February 2002, Nestl and UFE-DFA-KMU filed their
respective position papers. Nestl addressed several issues
concerning economic provisions of the CBA as well as the noninclusion of the issue of the Retirement Plan in the collective

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bargaining negotiations. On the other hand, UFE-DFA-KMU

limited itself to the issue of whether or not the retirement plan was
a mandatory subject in its CBA negotiations.
On 11 February 2002, Sec. Sto. Tomas allowed UFE-DFA-KMU the
chance to tender its stand on the other issues raised by Nestl but
not covered by its initial position paper by way of a Supplemental
Position Paper.
UFE-DFA-KMU, instead of filing the above-mentioned
supplement, filed several pleadings, one of which was
aManifestation with Motion for Reconsideration of the Order
dated February 11, 2002 assailing the Order of February 11, 2002
for supposedly being contrary to law, jurisprudence and the
evidence on record. The union posited that Sec. Sto. Tomas "could
only assume jurisdiction over the issues mentioned in the notice of
strike subject of the current dispute,"17 and that the Amended
Notice of Strike it filed did not cite, as one of the grounds, the CBA
deadlock.
On 8 March 2002, Sec. Sto. Tomas denied the motion for
reconsideration of UFE-DFA-KMU.
Thereafter, UFE-DFA-KMU filed a Petition for Certiorari18 before
the Court of Appeals, alleging that Sec. Sto. Tomas committed
grave abuse of discretion amounting to lack or excess of
jurisdiction when she issued the Orders of 11 February 2002 and 8
March 2002.
In the interim, in an attempt to finally resolve the crippling labor
dispute between the parties, then Acting Secretary of the DOLE,
Hon. Arturo D. Brion, came out with an Order19 dated 02 April
2002, ruling that:
a. we hereby recognize that the present Retirement Plan
at the Nestl Cabuyao Plant is a unilateral grant that the
parties have expressly so recognized subsequent to the
Supreme Courts ruling in Nestl, Phils. Inc. vs. NLRC,
G.R. No. 90231, February 4, 1991, and is therefore not a
mandatory subject for bargaining;
b. the Unions charge of unfair labor practice against the
Company is hereby dismissed for lack of merit;
c. the parties are directed to secure the best applicable
terms of the recently concluded CBSs between Nestl
Phils. Inc. and it eight (8) other bargaining units, and to
adopt these as the terms and conditions of the Nestl
Cabuyao Plant CBA;
d. all union demands that are not covered by the
provisions of the CBAs of the other eight (8) bargaining
units in the Company are hereby denied;
e. all existing provisions of the expired Nestl Cabuyao
Plant CBA without any counterpart in the CBAs of the
other eight bargaining units in the Company are hereby
ordered maintained as part of the new Nestl Cabuyao
Plant CBA;
f. the parties shall execute their CBA within thirty (30)
days from receipt of this Order, furnishing this Office a
copy of the signed Agreement;
g. this CBA shall, in so far as representation is concerned,
be for a term of five (5) years; all other provisions shall be
renegotiated not later than three (3) years after its
effective date which shall be December 5, 2001 (or on the
first day six months after the expiration on June 4, 2001
of the superceded CBA).
UFE-DFA-KMU moved to reconsider the aforequoted ruling, but
such was subsequently denied on 6 May 2002.
For the second time, UFE-DFA-KMU went to the Court of Appeals
via another Petition for Certiorari seeking to annul the Orders of
02 April 2002 and 06 May 2002 of the Secretary of the DOLE,
having been issued in grave abuse of discretion amounting to lack
or excess of jurisdiction.
On 27 February 2003, the appellate court promulgated its
Decision on the twin petitions for certiorari, ruling entirely in
favor of UFE-DFA-KMU, the dispositive part thereof stating
WHEREFORE, in view of the foregoing, there being grave
abuse on the part of the public respondent in issuing all
the assailed Orders, both petitions are hereby GRANTED.
The assailed Orders dated February 11, 2001, and March
8, 2001 (CA-G.R. SP No. 69805), as well as the Orders
dated April 2, 2002 and May 6, 2002 (CA-G.R. SP No.
71540) of the Secretary of Labor and Employment in the
case entitled: "IN RE: LABOR DISPUTE AT NESTLE
PHILIPPINES INC. (CABUYAO FACTORY)" under OSAJ-0023-01 (NCMB-RBIV-CAV-PM-08-035-01, NCMBRBIV-LAG-NS-10-037-01, NCMB-RBIV-LAG-NS-11-1003901) are hereby ANNULLED and SET ASIDE.
Private respondent is hereby directed to resume the CBA
negotiations with the petitioner.20

Both parties appealed the aforequoted ruling. Nestl essentially

assailed that part of the decision finding the DOLE Secretary to
have gravely abused her discretion amounting to lack or excess of
jurisdiction when she ruled that the Retirement Plan was not a
valid issue to be tackled during the CBA negotiations; UFE-DFAKMU, in contrast, questioned the appellate courts decision finding
Nestl free and clear of any unfair labor practice.
Since the motions for reconsideration of both parties were denied
by the Court of Appeals in a joint Resolution dated 27 June 2003,
UFE-DFA-KMU and Nestl separately filed the instant Petitions
for Review on Certiorariunder Rule 45 of the Rules of Court, as
amended.
G.R. No. 158930-31 was filed by UFE-DFA-KMU against Nestl
seeking to reverse the Court of Appeals Decision insofar as the
appellate courts failure to find Nestl guilty of unfair labor
practice was concerned; while G.R. No. 158944-45 was instituted
by Nestl against UFE-DFA-KMU likewise looking to annul and
set aside the part of the Court of Appeals Decision declaring that:
1) the Retirement Plan was a valid collective bargaining issue; and
2) the scope of the power of the Secretary of the Department of
Labor and Employment (DOLE) to assume jurisdiction over the
labor dispute between UFE-DFA-KMU and Nestl was limited to
the resolution of questions and matters pertaining merely to the
ground rules of the collective bargaining negotiations to be
conducted between the parties.
On 29 March 2004, this Court resolved21 to consolidate the two
petitions inasmuch as they (1) involved the same set of parties; (2)
arose from the same set of circumstances, i.e., from several Orders
issued by then DOLE Secretary, Hon. Patricia A. Sto. Tomas,
respecting her assumption of jurisdiction over the labor dispute
between Nestl and UFE-DFA-KMU, Alabang and Cabuyao
Divisions;22 and (3) similarly assailed the same Decision and
Resolution of the Court of Appeals.
After giving due course to the instant consolidated petitions, this
Court promulgated on 22 August 2006 its Decision, now subject of
UFE-DFA-KMUs Motion for Partial Reconsideration and Nestls
Motion for Clarification.
In its Motion for Partial Reconsideration, UFE-DFA-KMU would
have this Court address and discuss anew points or arguments that
have basically been passed upon in this Courts 22 August 2006
Decision. Firstly, it questions this Courts finding that Nestl was
not guilty of unfair labor practice, considering that the transaction
speaks for itself,i.e, res ipsa loquitor. And made an issue again is
the question of whether or not the DOLE Secretary can take
cognizance of matters beyond the amended Notice of Strike.
As to Nestls prayer for clarification, the corporation seeks
elucidation respecting the dispositive part of this Courts Decision
directing herein parties to resume negotiations on the retirement
compensation package of the concerned employees. It posits that
"[i]n directing the parties to negotiate the Retirement Plan, the
Honorable Court x x x might have overlooked the fact that here,
the Secretary of Labor had already assumed jurisdiction over the
entire 2001-2004 CBA controversy x x x."
As to the charge of unfair labor practice:
The motion does not put forward new arguments to substantiate
the prayer for reconsideration of this Courts Decision except for
the sole contention that the transaction speaks for itself, i.e., res
ipsa loquitor. Nonetheless, even a perusal of the arguments of
UFE-DFA-KMU in its petition and memorandum in consideration
of the point heretofore raised will not convince us to change our
disposition of the question of unfair labor practice. UFE-DFAKMU argues therein that Nestls "refusal to bargain on a very
important CBA economic provision constitutes unfair labor
practice."23 It explains that Nestl set as a precondition for the
holding of collective bargaining negotiations the non-inclusion of
the issue of Retirement Plan. In its words, "respondent Nestl
Phils., Inc. insisted that the Union should first agree that the
retirement plan is not a bargaining issue before respondent Nestl
would agree to discuss other issues in the CBA." 24 It then
concluded that "the Court of Appeals committed a legal error in
not ruling that respondent company is guilty of unfair labor
practice. It also committed a legal error in failing to award
damages to the petitioner for the ULP committed by the
respondent."25
We are unconvinced still.
The duty to bargain collectively is mandated by Articles 252 and
253 of the Labor Code, as amended, which state
ART. 252. Meaning of duty to bargain collectively. The
duty to bargain collectively means the performance of a
mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating
an agreement with respect to wages, hours, of work and
all other terms and conditions of employment including

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proposals for adjusting any grievances or questions

arising under such agreement and executing a contract
incorporating such agreements if requested by either
party but such duty does not compel any party to agree to
a proposal or to make any concession.
ART. 253. Duty to bargain collectively when there exists a
collective bargaining agreement. When there is a
collective bargaining agreement, the duty to bargain
collectively shall also mean that neither party shall
terminate nor modify such agreement during its lifetime.
However, either party can serve a written notice to
terminate or modify the agreement at least sixty (60)
days prior to its expiration date. It shall be the duty of
both parties to keep the status quo and to continue in full
force and effect the terms of conditions of the existing
agreement during the 60-day period and/or until a new
agreement is reached by the parties.
Obviously, the purpose of collective bargaining is the reaching of
an agreement resulting in a contract binding on the parties; but
the failure to reach an agreement after negotiations have
continued for a reasonable period does not establish a lack of good
faith. The statutes invite and contemplate a collective bargaining
contract, but they do not compel one. The duty to bargain does not
include the obligation to reach an agreement.
The crucial question, therefore, of whether or not a party has met
his statutory duty to bargain in good faith typically turns on the
facts of the individual case. As we have said, there is no per se test
of good faith in bargaining. Good faith or bad faith is an inference
to be drawn from the facts. To some degree, the question of good
faith may be a question of credibility. The effect of an employers
or a unions individual actions is not the test of good-faith
bargaining, but the impact of all such occasions or actions,
considered as a whole, and the inferences fairly drawn therefrom
collectively may offer a basis for the finding of the NLRC. 26
For a charge of unfair labor practice to prosper, it must be shown
that Nestl was motivated by ill will, "bad faith, or fraud, or was
oppressive to labor, or done in a manner contrary to morals, good
customs, or public policy, and, of course, that social humiliation,
wounded feelings, or grave anxiety resulted x x x" 27 in disclaiming
unilateral grants as proper subjects in their collective bargaining
negotiations. While the law makes it an obligation for the
employer and the employees to bargain collectively with each
other, such compulsion does not include the commitment to
precipitately accept or agree to the proposals of the other. All it
contemplates is that both parties should approach the negotiation
with an open mind and make reasonable effort to reach a common
ground of agreement.
Herein, the union merely bases its claim of refusal to bargain on a
letter28 dated 29 May 2001 written by Nestl where the latter laid
down its position that "unilateral grants, one-time company
grants, company-initiated policies and programs, which include,
but are not limited to the Retirement Plan, Incidental Straight
Duty Pay and Calling Pay Premium, are by their very nature not
proper subjects of CBA negotiations and therefore shall be
excluded therefrom." But as we have stated in this Courts
Decision, said letter is not tantamount to refusal to bargain. In
thinking to exclude the issue of Retirement Plan from the CBA
negotiations, Nestl, cannot be faulted for considering the same
benefit as unilaterally granted, considering that eight out of nine
bargaining units have allegedly agreed to treat the Retirement Plan
as a unilaterally granted benefit. This is not a case where the
employer exhibited an indifferent attitude towards collective
bargaining, because the negotiations were not the unilateral
activity of the bargaining representative. Nestls desire to settle
the dispute and proceed with the negotiation being evident in its
cry for compulsory arbitration is proof enough of its exertion of
reasonable effort at good-faith bargaining.
In the case at bar, Nestle never refused to bargain collectively with
UFE-DFA-KMU. The corporation simply wanted to exclude the
Retirement Plan from the issues to be taken up during CBA
negotiations, on the postulation that such was in the nature of a
unilaterally granted benefit. An employers steadfast insistence to
exclude a particular substantive provision is no different from a
bargaining representatives perseverance to include one that they
deem of absolute necessity. Indeed, an adamant insistence on a
bargaining position to the point where the negotiations reach an
impasse does not establish bad faith.[fn24 p.10] It is but natural
that at negotiations, management and labor adopt positions or
make demands and offer proposals and counter-proposals. On
account of the importance of the economic issue proposed by
UFE-DFA-KMU, Nestle could have refused to bargain with the
former but it did not. And the managements firm stand against
the issue of the Retirement Plan did not mean that it was

bargaining in bad faith. It had a right to insist on its position to the

point of stalemate.
The foregoing things considered, this Court replicates below its
clear disposition of the issue:
The concept of "unfair labor practice" is defined by the
Labor Code as:
ART. 247. CONCEPT OF UNFAIR LABOR
PRACTICE AND PROCEDURE FOR
PROSECUTION THEREOF. Unfair labor practices
violate the constitutional right of workers and employees
to self-organization, are inimical to the legitimate
interests of both labor and management, including their
right to bargain collectively and otherwise deal with each
other in an atmosphere of freedom and mutual respect,
disrupt industrial peace and hinder the promotion of
healthy and stable labor-management relations.
x x x x.
The same code likewise provides the acts constituting
unfair labor practices committed by employers, to wit:
ART. 248. UNFAIR LABOR PRACTICES OF
EMPLOYERS. It shall be unlawful for an employer to
commit any of the following unfair labor practices:
(a) To interfere with, restrain or coerce
employees in the exercise of their right to selforganization;
(b) To require as a condition of employment that
a person or an employee shall not join a labor
organization or shall withdraw from one to
which he belongs;
(c) To contract out services or functions being
performed by union members when such will
interfere with, restrain or coerce employees in
the exercise of their right to self-organization;
(d) To initiate, dominate, assist or otherwise
interfere with the formation or administration of
any labor organization, including the giving of
financial or other support to it or its organizers
or supporters;
(e) To discriminate in regard to wages, hours of
work, and other terms and conditions of
employment in order to encourage or discourage
membership in any labor organization. Nothing
in this Code or in any other law shall stop the
parties from requiring membership in a
recognized collective bargaining agent as a
condition for employment, except those
employees who are already members of another
union at the time of the signing of the collective
bargaining agreement.
Employees of an appropriate collective
bargaining unit who are not members of the
recognized collective bargaining agent may be
assessed a reasonable fee equivalent to the dues
and other fees paid by members of the
recognized collective bargaining agent, if such
non-union members accept the benefits under
the collective agreement. Provided, That the
individual authorization required under Article
242, paragraph (o) of this Code shall not apply
to the nonmembers of the recognized collective
bargaining agent; [The article referred to is 241,
not 242. CAA]
(f) To dismiss, discharge, or otherwise prejudice
or discriminate against an employee for having
given or being about to give testimony under
this Code;
(g) To violate the duty to bargain
collectively as prescribed by this Code;
(h) To pay negotiation or attorneys fees to the
union or its officers or agents as part of the
settlement of any issue in collective bargaining
or any other dispute; or
(i) To violate a collective bargaining agreement.
The provisions of the preceding paragraph
notwithstanding, only the officers and agents of
corporations associations or partnerships who
have actually participated, authorized or ratified
unfair labor practices shall be held criminally
liable. (Emphasis supplied.)
Herein, Nestl is accused of violating its duty to bargain
collectively when it purportedly imposed a pre-condition
to its agreement to discuss and engage in collective
bargaining negotiations with UFE-DFA-KMU.

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i am destined to be a LAWYER

A meticulous review of the record and pleadings of the

cases at bar shows that, of the two notices of strike filed
by UFE-DFA-KMU before the NCMB, it was only on the
second that the ground of unfair labor practice was
alleged. Worse, the 7 November 2001 Notice of Strike
merely contained a general allegation that Nestl
committed unfair labor practice by bargaining in bad
faith for supposedly "setting pre-condition in the ground
rules (Retirement issue)." (Notice of Strike of 7
November 2001; Annex "C" of UFE-DFA-KMU Position
Paper; DOLE original records, p. 146.) In contrast,
Nestl, in its Position Paper, did not confine itself to the
issue of the non-inclusion of the Retirement Plan but
extensively discussed its stance on other economic
matters pertaining to the CBA. It is UFE-DFA-KMU,
therefore, who had the burden of proof to present
substantial evidence to support the allegation of unfair
labor practice.
A perusal of the allegations and arguments raised by
UFE-DFA-KMU in the Memorandum (in G.R. Nos.
158930-31) will readily disclose the need for the
presentation of evidence other than its bare contention of
unfair labor practice in order to make certain the
propriety or impropriety of the ULP charge hurled
against Nestl. Under Rule XIII, Sec. 4, Book V of the
Implementing Rules of the Labor Code:
x x x. In cases of unfair labor practices, the
notice of strike shall as far as
practicable, state the acts complained
of and the efforts to resolve the dispute
amicably." (Emphasis supplied.)
In the case at bar, except for the assertion put forth by
UFE-DFA-KMU, neither the second Notice of Strike nor
the records of these cases substantiate a finding of unfair
labor practice. It is not enough that the union believed
that the employer committed acts of unfair labor practice
when the circumstances clearly negate even a prima facie
showing to warrant such a belief. (Tiu v. National Labor
Relations Commission, G.R. No. 123276, 18 August 1997,
277 SCRA 681, 688.)
Employers are accorded rights and privileges to assure
their self-determination and independence and
reasonable return of capital. (Capitol Medical Center,
Inc. v. Meris, G.R. No. 155098, 16 September 2005, 470
SCRA 125, 136.) This mass of privileges comprises the socalled management prerogatives. (Capitol Medical
Center, Inc. v. Meris, G.R. No. 155098, 16 September
2005, 470 SCRA 125, 136.) In this connection, the rule is
that good faith is always presumed. As long as the
companys exercise of the same is in good faith to
advance its interest and not for purpose of defeating or
circumventing the rights of employees under the law or a
valid agreement, such exercise will be upheld. (Capitol
Medical Center, Inc. v. Meris, G.R. No. 155098, 16
September 2005, 470 SCRA 125, 136.)
There is no per se test of good faith in bargaining.
(Hongkong Shanghai Banking Corporation Employees
Union v. National Labor Relations Commission, G.R.
No. 125038, 6 November 1997, 281 SCRA 509, 518.)
Good faith or bad faith is an inference to be drawn from
the facts. (Hongkong Shanghai Banking Corporation
Employees Union v. National Labor Relations
Commission, G.R. No. 125038, 6 November 1997, 281
SCRA 509, 518.) Herein, no proof was presented to
exemplify bad faith on the part of Nestl apart from mere
allegation. Construing arguendo that the content of the
aforequoted letter of 29 May 2001 laid down a precondition to its agreement to bargain with UFE-DFAKMU, Nestls inclusion in its Position Paper of its
proposals affecting other matters covered by the CBA
negates the claim of refusal to bargain or bargaining in
bad faith. Accordingly, since UFE-DFA-KMU failed to
proffer substantial evidence that would overcome the
legal presumption of good faith on the part of Nestl, the
award of moral and exemplary damages is unavailing.
As to the jurisdiction of the DOLE Secretary under the
amended Notice of Strike:
This Court is not convinced by the argument raised by UFE-DFAKMU that the DOLE Secretary should not have gone beyond the
disagreement on the ground rules of the CBA negotiations. The
union doggedly asserts that the entire labor dispute between
herein parties concerns only the ground rules.

Lest it be forgotten, it was UFE-DFA-KMU which first alleged a

bargaining deadlock as the basis for the filing of its Notice of
Strike; and at the time of the filing of the first Notice of Strike,
several conciliation conferences had already been undertaken
where both parties had already exchanged with each other their
respective CBA proposals. In fact, during the conciliation meetings
before the NCMB, but prior to the filing of the notices of strike, the
parties had already delved into matters affecting the meat of the
collective bargaining agreement.
The Secretary of the DOLE simply relied on the Notices of Strike
that were filed by UFE-DFA-KMU as stated in her Order of 08
March 2002, to wit:
x x x The records disclose that the Union filed two
Notices of Strike. The First is dated October 31, 2001
whose grounds are cited verbatim hereunder:
"A. Bargaining Deadlock
1. Economic issues (specify)
1. Retirement
2. Panel Composition
3. Costs and Attendance
4. CBA"
The second Notice of Strike is dated November 7, 2001
and the cited ground is like quoted verbatim below:
"B. Unfair Labor Practices (specify)
Bargaining in bad faith
Setting pre-condition in the ground rules
(Retirement issue)"
Nowhere in the second Notice of Strike is it indicated that this
Notice is an amendment to and took the place of the first Notice of
Strike. In fact, our Assumption of Jurisdiction Order dated
November 29, 2001 specifically cited the two (2) Notices of Strike
without any objection on the part of the Union x x x.29
Had the parties not been at the stage where the substantive
provisions of the proposed CBA had been put in issue, the union
would not have based thereon its initial notice to strike. This Court
maintains its original position in the Decision that, based on the
Notices of Strike filed by UFE-DFA-KMU, the Secretary of the
DOLE rightly decided on matters of substance. That the union
later on changed its mind is of no moment because to give
premium to such would make the legally mandated discretionary
power of the Dole Secretary subservient to the whims of the
parties.
As to the point of clarification on the resumption of
negotiations respecting the Retirement Plan:
As for the supposed confusion or uncertainty of the dispositive
part of this Courts Decision, Nestle moves for clarification of the
statement "The parties are directed to resume negotiations
respecting the Retirement Plan and to take action consistent with
the discussion hereinabove set forth. No costs." The entire fallo of
this Courts Decision reads:
WHEREFORE, in view of the foregoing, the Petition in
G.R. No. 158930-31 seeking that Nestl be declared to
have committed unfair labor practice in allegedly setting
a precondition to bargaining is DENIED. The Petition in
G.R. No. 158944-45, however, is PARTLY GRANTED in
that we REVERSE the ruling of the Court of Appeals in
CA G.R. SP No. 69805 in so far as it ruled that the
Secretary of the DOLE gravely abused her discretion in
failing to confine her assumption of jurisdiction power
over the ground rules of the CBA negotiations; but the
ruling of the Court of Appeals on the inclusion of the
Retirement Plan as a valid issue in the collective
bargaining negotiations between UFE-DFA-KMU and
Nestl is AFFIRMED. The parties are directed to resume
negotiations respecting the Retirement Plan and to take
action consistent with the discussions hereinabove set
forth. No costs.
Nestle interprets the foregoing as an order for the parties to
resume negotiations by themselves respecting the issue of
retirement benefits due the employees of the Cabuyao Plant.
Otherwise stated, Nestle posits that the dispositive part of the
Decision directs the parties to submit to a voluntary mode of
dispute settlement.
A read-through of this Courts Decision reveals that the ambiguity
is more ostensible than real. This Courts Decision of 22 August
2006 designated marked boundaries as to the implications of the
assailed Orders of the Secretary of the DOLE. We said therein that
1) the Retirement Plan is still a valid issue for herein parties
collective bargaining negotiations; 2) the Court of Appeals
committed reversible error in limiting to the issue of the ground
rules the scope of the power of the Secretary of Labor to assume
jurisdiction over the subject labor dispute; and 3) Nestl is not
guilty of unfair labor practice. Nowhere in our Decision did we

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i am destined to be a LAWYER

require parties to submit to negotiate by themselves the tenor of

the retirement benefits of the concerned employees of Nestl,
precisely because the Secretary of the DOLE had already assumed
jurisdiction over the labor dispute subject of herein petitions.
Again, we spell out what encompass the Secretarys assumption of
jurisdiction power. The Secretary of the DOLE has been explicitly
granted by Article 263(g) of the Labor Code the authority to
assume jurisdiction over a labor dispute causing or likely to cause
a strike or lockout in an industry indispensable to the national
interest, and decide the same accordingly. And, as a matter of
necessity, it includes questions incidental to the labor dispute; that
is, issues that are necessarily involved in the dispute itself, and not
just to that ascribed in the Notice of Strike or otherwise submitted
to him for resolution. In the case at bar, the issue of retirement
benefits was specifically what was presented before the Secretary
of the DOLE; hence, We reject Nestls interpretation. Our
decision is crystal and cannot be interpreted any other way. The
Secretary having already assumed jurisdiction over the labor
dispute subject of these consolidated petitions, the issue
concerning the retirement benefits of the concerned employees
must be remanded back to him for proper disposition.
All told, in consideration of the points afore-discussed and the fact
that no substantial arguments have been raised by either party,
this Court remains unconvinced that it should modify or reverse in
any way its disposition of herein cases in its earlier Decision. The
labor dispute between the Nestle and UFE-DFA-KMU has dragged
on long enough. As no other issues are availing, let this Resolution
write an ending to the protracted labor dispute between Nestl and
UFE-DFA-KMU (Cabuyao Division).
WHEREFORE, premises considered, the basic issues of the case
having been passed upon and there being no new arguments
availing, the Motion for Partial Reconsideration is
hereby DENIED WITH FINALITY for lack of merit. Let these
cases be remanded to the Secretary of the Department of Labor
and Employment for proper disposition, consistent with the
discussions in this Courts Decision of 22 August 2006 and as
hereinabove set forth. No costs.
SO ORDERED.

Jurisdiction of
Voluntary Arbitration
-c/o notes-

Powers of
Voluntary Arbitration
Arbitrability:
1. VA first rules on whether/not the case is
arbitrable
2. VA is quasi-judicial officer
[G.R. No. L-48437. September 30, 1986.]
MANTRADE/FMMC DIVISION EMPLOYEES AND
WORKERS UNION (represented by PHILIPPINE SOCIAL
SECURITY LABOR UNION PSSLU Fed.
TUCP), Petitioner, v. ARBITRATOR FROILAN M.
BACUNGAN and MANTRADE DEVELOPMENT
CORPORATION, Respondents.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR CODE;
VOLUNTARY ARBITRATORS; DECISIONS SUBJECT TO
JUDICIAL REVIEW. The contentions of respondent
corporation have been ruled against in the decision of this court in
the case of Oceanic Bic Division (FFW) v. Romero, promulgated on
July 16, 1984, wherein it stated: . . . "A voluntary arbitrator by the
nature of her functions acts in a quasijudicial capacity. There is no
reason why her decisions involving interpretation of law should be
beyond this courts review. Administrative officials are presumed
to act in accordance with law and yet we do not hesitate to pass
upon their work where a question of law is involved or where a
showing of abuse of discretion in their officials acts is properly
raised in petitions for certiorari." (130 SCRA 392, 399, 400-401)
2. ID.; ID.; GRANT FOR HOLIDAY PAY MONTHLY PAID
EMPLOYEES; ISSUE SETTLED IN THE CASES OF INSULAR
BANK OF ASIA AND AMERICA EMPLOYEES UNION VS.

INCIONG, [132 SCRA 633], AND CHARTERED BANK

EMPLOYEES UNION VS. OPLE [141 SCRA 9]. Respondent
arbitrator opined that respondent corporation does not have any
legal obligation to grant its monthly salaried employees holiday
pay, unless it is argued that the pertinent section of the Rule and
Regulations implementing Section 94 of the Labor Code is not in
conformity with the law, and thus, without force and effect. This
issue was subsequently decided on October 24, 1984 by a division
of this court in the case of Insular Bank of Asia and American
Employees Union (IBAAEU) v. Inciong, wherein it held as follows:
"We agree with petitioners contention that Section 2, Rule IV,
Book III of the implementing rules and Policy Instruction No. 9
issued by the then Secretary of Labor are null and void since in the
guise of clarifying the Labor Codes provisions on holiday pay, they
in effect amended them enlarging the scope of their exclusion (p.
11, rec.). . . . "From the above-cited provisions, it is clear that
monthly paid employees are not excluded from the benefits of
holiday pay. However, the implementing rules on holiday pay
promulgated by the then Secretary of Labor excludes monthly paid
employees from the said benefits by inserting under Rule IV, Book
III of the implementing rules, section 2, which provides that:
employees who are uniformly paid by the month, irrespective of
the number of working days therein , with the salary of not less
than the statutory or established minimum wage shall be
presumed to be paid for all days in the month whether worked or
not." (132 SCRA 663, 672-673) This ruling was reiterated by the
court en banc on August 28, 1985 in the case of Chartered Bank
Employees Association v. Ople, wherein it added that: "The
questioned Sec. 2, Rule IV, Book III of the Integrated Rules and
the Secretarys Policy Instruction No. 9 add another excluded
group, namely employees who are uniformly paid by the month.
While additional exclusion is only in the form of a presumption
that all monthly paid employees have already been paid holiday
paid, it constitutes a taking away or a deprivation which must be in
the law if it is to be valid. An administrative interpretation which
diminishes the benefits of labor more than what the statute
delimits or withholds is obviously ultra vires." (138 SCRA 273,
282. See also CBTC Employees Union v. Clave, January 7, 1986,
141 SCRA 9.)
3. REMEDIAL LAW; SPECIAL CIVIL ACTION; MANDAMUS;
APPROPRIATE EQUITABLE REMEDY IN CASE AT BAR.
Respondent corporation contends that mandamus does not lie to
compel the performance of an act which the law does not clearly
enjoin as a duty. True it is also that mandamus is not proper to
enforce a contractual obligation, the remedy being an action for
specific performance (Province of Pangasinan v. Reparations
Commission, November 29, 1977, 80 SCRA 376). In the case at
bar, however, in view of the above-cited subsequent decisions of
this Court clearly defining the legal duty to grant holiday pay to
monthly salaried employees, mandamus is an appropriate
equitable remedy (Dionisio v. Paterno, July 23, 1980, 98 SCRA
677; Gonzales v. Government Service Insurance System,
September 10, 1981, 107 SCRA 492).
DECISION
FERIA, J.:
This is a petition for Certiorari and Mandamus filed by petitioner
against arbitrator Froilan M. Bacungan and Mantrade
Development Corporation arising from the decision of respondent
arbitrator, the dispositive part of which reads as
follows:jgc:chanrobles.com.ph
"CONSIDERING ALL THE ABOVE, We rule that Mantrade
Development Corporation is not under legal obligation to pay
holiday pay (as provided for in Article 94 of the Labor Code in the
third official Department of Labor edition) to its monthly paid
employees who are uniformly paid by the month, irrespective of
the number of working days therein, with a salary of not less than
the statutory or established minimum wage, and this rule is
applicable not only as of March 2, 1976 but as of November 1,
1974."cralaw virtua1aw library

from pursuing the present action in view of Article 263 of the

Labor Code, which provides in part that "voluntary arbitration
awards or decisions shall be final, inappealable, and executory," as
well as the rules implementing the same; the pertinent provision
of the Collective Bargaining Agreement between petitioner and
respondent corporation; and Article 2044 of the Civil Code which
provides that "any stipulation that the arbitrators award or
decision shall be final, is valid, without prejudice to Articles 2038,
2039, and 2040." Respondent corporation further contends that
the special civil action of certiorari does not lie because
respondent arbitrator is not an "officer exercising judicial
functions" within the contemplation of Rule 65, Section 1, of the
Rules of Court; that the instant petition raises an error of
judgment on the part of respondent arbitrator and not an error of
jurisdiction; that it prays for the annulment of certain rules and
regulations issued by the Department of Labor, not for the
annulment of the voluntary arbitration proceedings; and that
appeal by certiorari under Section 29 of the Arbitration Law,
Republic Act No. 876, is not applicable to the case at bar because
arbitration in labor disputes is expressly excluded by Section 3 of
said law.chanrobles law library : red
These contentions have been ruled against in the decision of this
Court in the case of Oceanic Bic Division (FFW) v. Romero,
promulgated on July 16, 1984, wherein it
stated:jgc:chanrobles.com.ph
"We agree with the petitioner that the decisions of voluntary
arbitrators must be given the highest respect and as a general rule
must be accorded a certain measure of finality. This is especially
true where the arbitrator chosen by the parties enjoys the first rate
credentials of Professor Flerida Ruth Pineda Romero, Director of
the U.P. Law Center and an academician of unquestioned expertise
in the field of Labor Law. It is not correct, however, that this
respect precludes the exercise of judicial review over their
decisions. Article 262 of the Labor Code making voluntary
arbitration awards final, inappealable and executory, except where
the money claims exceed P100,000.00 or 40% of the paid-up
capital of the employer or where there is abuse of discretion or
gross incompetence refers to appeals to the National Labor
Relations Commission and not to judicial review.
"In spite of statutory provisions making final the decisions of
certain administrative agencies, we have taken cognizance of
petitions questioning these decisions where want of jurisdiction,
grave abuse of discretion, violation of due process, denial of
substantial justice, or erroneous interpretation of the Law were
brought to our attention. . . .
x
x
x
"A voluntary arbitrator by the nature of her functions acts in a
quasi-judicial capacity. There is no reason why her decisions
involving interpretation of law should be beyond this Courts
review. Administrative officials are presumed to act in accordance
with law and yet we do not hesitate to pass upon their work where
a question of law is involved or where a showing of abuse of
discretion in their official acts is properly raised in petitions
for certiorari." (130 SCRA 392, 399, 400-401)
In denying petitioners claim for holiday pay, respondent
arbitrator stated that although monthly salaried employees are not
among those excluded from receiving such additional pay under
Article 94 of the Labor Code of the Philippines, to wit:chanrobles
virtual lawlibrary
ART. 94. Right to holiday pay. (a) Every worker shall be paid his
regular daily wage during regular holidays, except in retail and
service establishments regularly employing less than ten (10)
workers;
(b) The employer may require an employee to work on any holiday
but such employee shall be paid compensation equivalent to twice
his regular rate; and

Petitioner questions the validity of the pertinent section of the

Rules and Regulations Implementing the Labor Code as amended
on which respondent arbitrator based his decision.

(c) As used in this Article, "holiday" includes: New Years Day,

Maundy Thursday, Good Friday, the ninth of April, the first of
May, the twelfth of June, the fourth of July, the thirtieth of
November, the twenty-fifth and the thirtieth of December, and the
day designated by law for holding a general election.

On the other hand, respondent corporation has raised procedural

and substantive objections. It contends that petitioner is barred

they appear to be excluded under Sec. 2, Rule IV, Book III of the
Rules and Regulations implementing said provision which reads

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i am destined to be a LAWYER

thus:chanrob1es virtual 1aw library

SEC. 2. Status of employees paid by the month. Employees who
are uniformly paid by the month, irrespective of the number of
working days therein, with a salary of not less than the statutory or
established minimum wage shall be presumed to be paid for all
days in the month whether worked or not.
Respondent arbitrator further opined that respondent corporation
does not have any legal obligation to grant its monthly salaried
employees holiday pay, unless it is argued that the pertinent
section of the Rules and Regulations implementing Section 94 of
the Labor Code is not in conformity with the law, and thus,
without force and effect.
This issue was subsequently decided on October 24, 1984 by a
division of this Court in the case of Insular Bank of Asia and
America Employees Union (IBAAEU) v. Inciong, wherein it held
as follows:jgc:chanrobles.com.ph
"WE agree with the petitioners contention that Section 2, Rule IV,
Book III of the implementing rules and Policy Instruction No. 9,
issued by the then Secretary of Labor are null and void since in the
guise of clarifying the Labor Codes provisions on holiday pay, they
in effect amended them by enlarging the scope of their exclusion
(p. 11, rec.)
"Article 94 of the Labor Code, as amended by P.D. 850,
provides:chanrob1es virtual 1aw library
Art. 94. Right to holiday pay. (a) Every worker shall be paid his
regular daily wage during regular holidays, except in retail and
service establishments regularly employing less than ten (10)
workers . . .
"The coverage and scope of exclusion of the Labor Codes holiday
pay provisions is spelled out under Article 82 thereof which
reads:chanrob1es virtual 1aw library
Art. 82. Coverage. The provision of this Title shall apply to
employees in all establishments and undertakings, whether for
profit or not, but not to government employees, managerial
employees, field personnel, members of the family of the employer
who are dependent on him for support, domestic helpers, persons,
in the personal service of another, and workers who are paid by
results as determined by the Secretary of Labor in appropriate
regulations.
x
x
x
"From the above-cited provisions, it is clear that monthly paid
employees are not excluded from the benefits of holiday pay.
However, the implementing rules on holiday pay promulgated by
the then Secretary of Labor excludes monthly paid employees from
the said benefits by inserting under Rule IV, Book III of the
implementing rules, Section 2, which provides that: employees
who are uniformly paid by the month, irrespective of the number
of working days therein, with a salary of not less than the statutory
or established minimum wage shall be presumed to be paid for all
days in the month whether worked or not." (132 SCRA 663, 672673).
This ruling was reiterated by the Court en banc on August 28, 1985
in the case of Chartered Bank Employees Association v. Ople,
wherein it added that:chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
"The questioned Sec. 2, Rule IV, Book III of the Integrated Rules
and the Secretarys Policy Instruction No. 9 add another excluded
group, namely employees who are uniformly paid by the month.
While the additional exclusion is only in the form of a presumption
that all monthly paid employees have already been paid holiday
pay, it constitutes a taking away or a deprivation which must be in
the law if it is to be valid. An administrative interpretation which
diminishes the benefits of labor more than what the statute
delimits or withholds is obviously ultra vires." (138 SCRA 273,
282. See also CBTC Employees Union v. , Clave, January 7, 1986,
141 SCRA 9.)
Lastly, respondent corporation contends that mandamus does not
lie to compel the performance of an act which the law does not
clearly enjoin as a duty. True it is also that mandamus is not
proper to enforce a contractual obligation, the remedy being an

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i am destined to be a LAWYER

action for specific performance (Province of Pangasinan v.

Reparations Commission, November 29, 1977, 80 SCRA 376). In
the case at bar, however, in view of the above cited subsequent
decisions of this Court clearly defining the legal duty to grant
holiday pay to monthly salaried employees, mandamus is an
appropriate equitable remedy (Dionisio v. Paterno, July 23, 1980,
98 SCRA 677; Gonzales v. Government Service Insurance System,
September 10, 1981, 107 SCRA 492).
WHEREFORE, the questioned decision of respondent arbitrator is
SET ASIDE and respondent corporation is ordered to GRANT
holiday pay to its monthly salaried employees. No costs.
SO ORDERED.

G.R. No. 118491

January 31, 1996

ALFONSO BALAIS, RUDACIANO, ESTONILO and ALFEO

LOTILLA, petitioners,
vs.
HON. TIRSO D'C. VELASCO and CENTRAL TEXTILE
MILLS, INC., respondents.
DECISION
HERMOSISIMA, JR., J.:
This petition for certiorari and prohibition, with a prayer for
preliminary injunction, seeks the review and the annulment of two
of respondent judge's orders: The first, dated January 5, 1995,
which denied petitioners Motion to Dismiss; and, the second,
dated January 11, 1995, which granted private respondent's
Motion for Temporary Restraining Order.
This case arose from a labor dispute between the Central Textile
Mills, Incorporated (CTMI) and its supervisors union. When the
said dispute remained unsettled, the parties agreed to refer the
case for voluntary arbitration.
On November 21, 1991, Voluntary Arbitrator Jesus C. Sebastian, to
whom the case was mutually referred, issued an Award, the
dispositive portion of which reads:
Premises considered, the undersigned voluntary
arbitrator hereby directs the management to grant an
across-the-board daily wage increase of P6.00 to all
workers affected in the instant labor dispute effective
January 8, 1991 to July 5, 1991 and to comply with the
provisions of Wage Order No. 2, effective July 6, 1991. 1
On December 2, 1991, a motion for reconsideration was filed by
private respondent. This was denied by the voluntary arbitrator in
an Order, dated June 9, 1992. The same Order directed private
respondent to comply with the award.2
Due to the failure of private respondent to comply voluntarily with
the order, a writ of execution was issued by the voluntary
arbitrator. Partial satisfaction of the judgment was effected,
leaving a balance of P252,090.00.
On November 11, 1994, upon a motion filed by the CTMI
Supervisors Union, the Voluntary Arbiter issued an Alias Writ of
Execution addressed to petitioner Balais. 3
On November 26, 1994, petitioner Balais, assisted by petitioner
Rogaciano C. Estonilo, Jr., served the alias writ of execution on
private respondent at its office at A. Bonifacio St. Balintawak,
Quezon City. Thereafter, levy was made over the following
personal properties of private respondent, to wit:
1) ONE (1) Lot various scrap metals
2) ONE (1) Lot junked/scrap machineries and spare parts
(Located at Machine Shop Building)

3) ONE (1) Lot Various Junked Electrical Parts and

Accessories (Located at Electrical Parts Bldg.)

On December 12, 1994, a similar Motion to Dismiss was filed by

CTMI's Supervisor's Union. 11

4) ONE (1) Lot Unserviceable/Scrap Weaving Machines

(Located at Weaving No. 1 Bldg.) and

On December 14, 1994, a Comment and/or Opposition to the

motion to dismiss was filed by private respondent 12to which a
reply was filed by petitioners Balais and Estonilo. 13

5) ONE (1) Lot Unserviceable/Scrap Weaving Machines

(Located at Weaving No. 3 Bldg.)
A Notice of Levy and Sale was furnished by petitioners to Ruben
del Rio, caretaker of private respondent, who refused to
acknowledge receipt thereof, constraining petitioners to leave a
copy of the notice with the advice to refer the matter to the CTMI.
Thereafter, petitioners posted copies of the notice in three (3)
conspicuous places.
On December 2, 1994, for failure of private respondent to settle
the award granted to the CTMI Supervisors Union, an auction sale
of the levied properties was conducted in the premises of private
respondent.
Petitioner Alfeo M. Lotilla, won in the sealed bidding and paid the
total bid price of P263,000.00 in cash. Subsequently, a Certificate
of Sale was issued to petitioner Lotilla and the subject personal
properties were released to him. 4
On December 4, 1994, private respondent, in reaction, filed a civil
case with the Regional Trial Court, Branch 85, Quezon City, for
damages, with preliminary injunction and/or temporary
restraining order, alleging that on December 2, 1994, at about 9:45
a.m., petitioner Estonilo and some members of the CTMI
Supervisors Union, together with armed police officers, entered
the premises of the corporation to implement the alias writ of
execution. The group then allegedly proceeded to Weaving I where
they started to dismantle the machinery and equipment of private
respondent. At 10:15 a.m. petitioner together with his cohorts
entered the corporation's premises and loaded the dismantled
machinery in the trucks and forklifts operated by petitioner. The
hauling of the equipment and machinery to unknown destinations
lasted until the evening.5 Said acts were temporarily discontinued
when private respondent sought police assistance, particularly
addressed to the Police Commander, Station I, Laloma, Quezon
City.6
The following day, December 3, 1994, petitioner Sheriff Estonilo
with some of the union members and police officers allegedly
returned to the premises and continued their acts of dismantling
and hauling private respondents' machineries and equipment.
These allegations were supported by the affidavits of Ruben A. Del
Rio, Overseer and Chief Security Officer of CTMI, and Nicolas D.
Suase, Security Guard of CTMI.
On December 5, 1994, the court a quo , acting upon the petition
filed by CTMI, which prayed for the issuance of a temporary
restraining order against the enforcement of the alias writ of
execution, directed petitioners-sheriffs to refrain "from further
committing the illegal acts complained of pending determination
of the petition for injunction" and set the date for hearing. 7
On the same date, petitioner Balais executed a Sheriffs Return
stating that: "IN VIEW OF THE FOREGOING, the original of the
Alias Writ of Execution is hereby returned to its (sic) of origin with
the information that the same was FULLY SATISFIED." 8
On December 8, 1994, private respondent filed its Amended
Petition increasing the amount of damages it sought to
recover, i.e., from P250,000.00 to P5,000,000.00. 9
On December 9, 1994, petitioners Balais and Estonilo filed a
"Motion to Dismiss and Opposition to the Application for Writ of
Preliminary Injunction" on the ground that the RTC has no
jurisdiction over the nature of the action, as the same should have
been lodged with the National Labor Relations Commission
(NLRC). With regard to the issuance of the temporary restraining
order, petitioners cited Articles 218 and 254 of the Labor Code as
the legal bases for their opposition therein. 10

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On December 19, 1994, private respondent filed its Re-Amended

Petition wherein it alleged that petitioners on December 2, 1994
already removed from its premises scraps and other unserviceable
parts and implements worth more than P263,000.00.
Furthermore, it alleged that petitioners also started to dismantle
serviceable machinery and equipment installed on concrete
platforms permanently embedded on the ground and, therefore,
no longer considered as included in the list of personal properties
subject of the levy. 14 It also prayed for the issuance of a temporary
restraining order to enjoin petitioners from committing the illegal
acts complained of.
On January 5, 1995, respondent Judge issued the assailed Order
which declared petitioner's application for the issuance of a writ of
preliminary injunction as having been rendered moot and
academic inasmuch as "the original alias writ of execution issued
by the voluntary arbitrator . . . was fully satisfied and was returned
by respondent sheriffs to said voluntary arbitrator" and denied
petitioners separate motion to dismiss for lack of merit. 15
On January 9, 1995, private respondent filed its "Urgent Motion
for Issuance of Temporary Restraining Order and/or Preliminary
Injunction" and its Second Amended Petition alleging that
petitioners continued to dismantle private respondent's
serviceable machinery and equipment despite the fact that the
alias writ of execution had already been fully satisfied as evidenced
by the Sheriffs Return, dated December 5, 1994. 16
On January 11, 1995, the lower court granted private respondent's
motion for the issuance of a temporary restraining order enjoining
petitioners-sheriffs and "all other parties or persons acting in their
behalf . . . from further dismantling and removing machinery and
equipment from the premises" of private respondent. 17
On January 28, 1995, in connection with petitioners' petition
for Certiorari and Prohibition, petitioners filed before us a Motion
for Issuance of Temporary Restraining Order to enjoin respondent
judge from further proceeding with Civil Case No. Q-94-22314. In
the same motion, they also sought to enjoin private respondent
from preventing petitioners from implementing the alias writ of
execution and from its continuous detention of petitioner Lotilla's
hauling truck in its compound.
The foregoing notwithstanding, on January 31, 1995, after the
hearing and upon posting by CTMI of a bond of P250,000.00 the
court a quo issued a writ of preliminary injunction in Civil Case
No. Q-94-22314.
On March 16, 1995, private respondent filed its Comment in
the Certiorari proceedings before us, stating that it does not
dispute the validity of the issuance of the alias writ of execution
between CTMI Supervisors Union and Central Textile Mills, Inc.
nor the authority of petitioners to enforce the same; and the right
of the judgment creditors in said labor dispute. What they assail
are the unlawful acts of petitioners in forcibly dismantling and
removing private respondent's real property which was not
included in the levy and sale of personal property, and that said
acts were committed after the award in the said labor dispute had
been fully satisfied. 18 Furthermore, private respondent alleged
that the NLRC has no jurisdiction over the case as their claims for
damages arising from the unlawful or illegal acts committed by
petitioners were unrelated to a labor dispute. Private respondent
also alleged that the said unlawful acts were committed not in the
course of or on the occasion of implementing the alias writ of
execution but after the writ had been fully satisfied.
On April 7, 1995, petitioners filed their Reply wherein they alleged
that it is the voluntary arbitrator, not the regular courts, which is
in the best position to determine whether they committed the
alleged unlawful acts. They also alleged that the writ of execution
was not yet fully satisfied and so petitioner Lotilla had the right to

haul the personal properties which he had bought at the auction

sale. 19
On April 20, 1995, petitioner Lotilla filed an "urgent ex
parte motion reiterating his request for the issuance of temporary
restraining order" to enjoin public respondent from further
proceeding with Civil Case No. Q-94-22314 and to enjoin private
respondent from preventing him from taking custody of the
property indicated in the certificate of sale. 20
On May 9, 1995, petitioners filed their "Second Urgent Motion
Reiterating Prayer For Issuance of Temporary Restraining Order"
which alleged that respondents are continuing with the
proceedings in the lower court ex partetaking advantage of the
absence of this Court's temporary restraining order. 21
On May 22, 1995, we issued a resolution denying the "urgent ex
parte motion reiterating for the issuance of temporary restraining
order,'' dated April 20, 1995 filed by petitioner Lotilla. In the same
resolution, we also denied the "second urgent motion reiterating
prayer for the issuance of a temporary restraining order" dated
May 9, 1995 filed by counsel for petitioners.
We note the reply thereto, the rejoinder and the sur-rejoinder of
the parties.
The crux of the controversy is whether it is the voluntary arbitrator
who retains exclusive jurisdiction over incidents affecting the
determination of irregularities committed during the
implementation and enforcement of the alias writ of execution
issued in connection with a labor dispute.
Private respondent insists that what is at issue in this case is the
unlawful act of petitioners in forcibly dismantling and removing
real property of private respondent not included in the notice of
levy and sale of personal properties. Furthermore, private
respondent contends that the acts of petitioners were acts not to
enforce the award of the voluntary arbitrator but acts committed
outside and beyond the authority of the sheriff, as the alias writ of
execution was returned fully satisfied on December 5, 1994. In
support of its claim that the writ of execution had been hilly
satisfied, private respondent cited the certificate of sale of
petitioner Balls which certified that the scraps he levied on and
sold were already released to petitioner Lotilla.
At the outset, it is worthy to note that it is not the decision of the
voluntary arbitrator which is at issue in the case at bench. His
decision has already become final and executory, hence, it is no
longer appealable to the Court of Appeals.
A close scrutiny of the records shows that these allegations of
private respondent are baseless.
First, a perusal of the petition for damages with prayer for
preliminary injunction filed by CTMI with the RTC of Quezon City,
reveals that what was being questioned was the regularity of the
implementation and enforcement of the alias writ of execution by
petitioners-sheriffs on December 2, 3 and 4, 1994, before it was
returned fully satisfied as per sheriff's report dated December 5,
1994, in compliance with the order issued by the voluntary
arbitrator.
Second, the Certificate of Sale dated December 2, 1994, issued by
petitioner Balais to petitioner Lotilla clearly stated therein that
what were levied and sold were personal properties listed in the
Notice of Levy and Sale which was given to private respondent.
This was reiterated by petitioner Balais, in a letter dated January
25, 1995, wherein he cited the contents of his Certificate of Sale, a
portion of which, reads as follows:
. . . may I refer you to my notice of sale on execution of
personal properties dated November 26, 1994 and
certificate of sale dated December 2, 1994 which are selfexplanatory. It is clearly stated therein that what we
levied and sold at public auction sale were junks and
scraps or unserviceable machines that were already
detached from concrete platforms and, therefore,
personal properties I am not aware of any serviceable

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machines or immovables that were levied or sold at

public auction. 22
Third, petitioner Balais also issued the following Clarificatory
Supplemental Report which is self-explanatory:
Thus, I hereby clarify and inform the origin of the Writ of
Execution that my informations in my report dated 05
December 1994 that the same have been fully satisfied
was only in so far as the payment of the total bid price of
the highest bidder and the satisfaction of the judgment
award are concerned. I have not been able to completely
and physically deliver/turn over and/or conveyed the
properties covered by the Certificate of Sale issued in this
case in view of the issuance by the Regional Trial Court,
Branch 88, Quezon City, of the Temporary Restraining
Order in Civil Case No. 0-94-22134 . . . . 23
Petitioner Balais further recommended in his aforestated report
that he be allowed to supervise the physical delivery and turn over
of all the personal properties subject of the sale, as stated in the
Certificate of Sale issued to the highest bidder in this case.
The clarificatory supplemental report has not been shown to have
been irregularly issued nor did petitioner Balais have any
improper motive to issue said report. Apparently, his main
objective was to make it of record that the alias writ of execution
had not yet been fully satisfied. In the absence of any rebuttal from
private respondent, said report enjoys the presumption of having
been issued by the executing sheriff in the regular performance of
his official duties. 24
A case presenting a factual milieu similar to the case at bench
is Pucan v. Bengzon, 155 SCRA 692 (1987), wherein the aggrieved
party questioned the acts performed by the sheriffs during the
implementation of the writ of execution issued by then Director
Pucan of the Ministry of Labor and Employment. Saulog Transit,
Inc. and filed in the RTC of Manila, a petition for damages and
prohibition, with prayer for issuance of a writ of preliminary
prohibitory injunction, against Director Pucan, Robert A. Jerey,
Jr., Deputy Sheriff Antonio and Robert Arevalo.
Awards for actual, moral and exemplary damages "as may be
proved" during the trial plus attorney's fees of P50,000," were also
prayed for.
In finding for petitioners, this Court ruled that, with respect to the
acts of the Ministry officials, the case is one growing out of a labor
dispute, as the acts complained of were perpetrated during the
execution of a decision of the then Ministry of Labor and
Employment. We also stated that, however characterized,
jurisdiction over the petition pertains to the Labor Ministry, now
the Department of Labor and Employment, and not the regular
courts.
Furthermore, we stated that:
Whatever irregularities that may have attended the
issuance of the alias writ of execution of March 1, 1985
should have been referred to the same administrative
official or tribunal which rendered the decision being
executed, pursuant to Article 244 (b) of the Labor Code,
which provides that the Secretary of Labor, the
Commission and the Director of Labor Relations may
appoint sheriffs and take any measure under existing
laws, decrees and general orders as may be necessary to
ensure compliance with, their decisions, orders or awards
. . . . Indeed, Saulog Transit, Inc. should have realized
that despite the finality of the decision of the Minister of
Labor, he retained control over its execution and
implementation, so that resort to the regular courts,
particularly one of co-equal rank, would be an untenable
recourse.
Apparently, Saulog Transit, Inc. was misled by its own
prayer for actual, moral and exemplary damages. It
believed that such additional cause of action could clothe
the petition with the mantle of a regular action,
cognizable by the regular courts. It was, of course,

mistaken for the fact remains that the acts complained of

are mere incidents of a labor dispute. Such prayer
therefore did not alter the complexion of the case as one
arising from a labor dispute, but was subsumed by the
nature of the main case, over which the regular courts
had no jurisdiction much less the power to issue a
temporary or permanent injunction or restraining order.
The broad powers granted to the Labor Department
and/or the National Labor Relations Commission by
Articles 224 and 218 can only be interpreted as vesting in
said agencies jurisdiction over incidents arising from, in
connections with or relating to labor dispute, as the
controversy under consideration, to the exclusion of the
regular courts.
In the matter of enforcement of the writ of execution, the
voluntary arbitrator is vested with the power and the authority to
see to it that his arbitral award is fully satisfied. Thus, he may issue
writs of execution requiring a sheriff or a proper officer to execute
his final decisions, orders or awards and take any measure under
existing laws to ensure compliance with his decisions, orders or
awards. The sheriffs, tasked to implement the said writ, are not
sheriffs of the ordinary court a quo but labor sheriffs under the
supervision of the voluntary arbitrator.
In the case at bench, the petition actually asked for the quashal of
the alias writ of execution, because of a) the removal from private
respondent's premises of scraps and other unserviceable parts and
implements worth more than the remaining balance as stated in
the alias writ of execution and b) the hauling of serviceable
machinery and equipment installed on concrete platforms
permanently embedded on the ground not included in the
properties subject of the levy in implementation of the writ.
Consequently, the controversy lies in the implementation of the
writ of execution. Any complaint in this regard should first be
referred to the voluntary arbitrator from whom the writ of
execution originated. In other words, private respondent, instead
of filing a petition for damages with the court a quo, should have
questioned the manner of its implementation before the voluntary
arbitrator who issued the said writ. The power of the voluntary
arbitrator to issue a writ of execution carries with it the power to
inquire into the correctness of the execution of his decision and to
consider whatever supervening event that may transpire during
such execution. Private respondent should have first exhausted all
available remedies before the voluntary arbitrator instead of
prematurely filing the case in the lower court.

sanction split jurisdiction - which is obnoxious to the orderly

administration of justice. 29 As this rule has ripened into dogma, it,
thus, commands adherence not breach by the parties concerned.
WHEREFORE, the Petition for Certiorari and Prohibition is
hereby GRANTED and the lower court is permanently enjoined
from acting on the petition for damages and prohibition in Civil
Case No. Q-94-22314.
SO ORDERED.

3. Decisions of VA now go to CA, not SC

G.R. No. 120319 October 6, 1995
LUZON DEVELOPMENT BANK, petitioner,
vs.
ASSOCIATION OF LUZON DEVELOPMENT BANK
EMPLOYEES and ATTY. ESTER S. GARCIA in her
capacity as VOLUNTARY ARBITRATOR, respondents.

ROMERO, J.:
From a submission agreement of the Luzon Development Bank
(LDB) and the Association of Luzon Development Bank Employees
(ALDBE) arose an arbitration case to resolve the following issue:
Whether or not the company has violated the
Collective Bargaining Agreement provision and
the Memorandum of Agreement dated April
1994, on promotion.
At a conference, the parties agreed on the submission of their
respective Position Papers on December 1-15, 1994. Atty. Ester S.
Garcia, in her capacity as Voluntary Arbitrator, received ALDBE's
Position Paper on January 18, 1995. LDB, on the other hand, failed
to submit its Position Paper despite a letter from the Voluntary
Arbitrator reminding them to do so. As of May 23, 1995 no
Position Paper had been filed by LDB.
On May 24, 1995, without LDB's Position Paper, the Voluntary
Arbitrator rendered a decision disposing as follows:

Jurisprudence is replete with the rule that a case in which an

execution has been issued is considered as still pending so that all
proceedings on the execution are proceedings in the
suit. 25 Moreover, there is no dispute with the view that the
tribunal which rendered the decision or award has a general
supervisory control over the process of its execution, and this
includes the power to determine every question of fact and law
which may be involved in the execution. 26 This is because any
court which issued a writ of execution has the inherent power, for
the advancement of justice, to correct error of its ministerial
officers and to control its own processes. 27 Hence, any
irregularities which attended the execution of the decision or
award brought out by the enforcement of a dead writ of execution
must be litigated in the court which issued it.

Hence, this petition for certiorari and prohibition seeking to set

aside the decision of the Voluntary Arbitrator and to prohibit her
from enforcing the same.

Considering in totality the facts of the present case, it is clear that

said proceeding, placed in proper perspective, is essentially an
offshoot or incident in the enforcement of the final award or
decision of the voluntary arbitrator.

Arbitration may be classified, on the basis of the obligation on

which it is based, as either compulsory or voluntary.

Hence, it is the voluntary arbitrator, from whom the alias writ of

execution originated, which has the jurisdiction to determine
whether petitioners exceeded their authority in implementing the
alias writ of execution and whether there was already a complete
delivery of the personal properties indicated in the Notice of Levy
to petitioner Lotilla.

Compulsory arbitration is a system whereby the parties to a

dispute are compelled by the government to forego their right to
strike and are compelled to accept the resolution of their dispute
through arbitration by a third party. 1The essence of arbitration
remains since a resolution of a dispute is arrived at by resort to a
disinterested third party whose decision is final and binding on the
parties, but in compulsory arbitration, such a third party is
normally appointed by the government.

Well-settled is the principle that regular courts have no

jurisdiction to hear and decide questions which arise and are
incidental to the enforcement of decisions, orders or awards
rendered in labor cases by appropriate officers and tribunals of the
Department of Labor and Employment. 28 To hold otherwise, is to

Under voluntary arbitration, on the other hand, referral of a

dispute by the parties is made, pursuant to a voluntary arbitration
clause in their collective agreement, to an impartial third person
for a final and binding resolution. 2Ideally, arbitration awards are

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WHEREFORE, finding is hereby made that the

Bank has not adhered to the Collective
Bargaining Agreement provision nor the
Memorandum of Agreement on promotion.

In labor law context, arbitration is the reference of a labor dispute

to an impartial third person for determination on the basis of
evidence and arguments presented by such parties who have
bound themselves to accept the decision of the arbitrator as final
and binding.

supposed to be complied with by both parties without delay, such

that once an award has been rendered by an arbitrator, nothing is
left to be done by both parties but to comply with the same. After
all, they are presumed to have freely chosen arbitration as the
mode of settlement for that particular dispute. Pursuant thereto,
they have chosen a mutually acceptable arbitrator who shall hear
and decide their case. Above all, they have mutually agreed to de
bound by said arbitrator's decision.
In the Philippine context, the parties to a Collective Bargaining
Agreement (CBA) are required to include therein provisions for a
machinery for the resolution of grievances arising from the
interpretation or implementation of the CBA or company
personnel policies. 3 For this purpose, parties to a CBA shall name
and designate therein a voluntary arbitrator or a panel of
arbitrators, or include a procedure for their selection, preferably
from those accredited by the National Conciliation and Mediation
Board (NCMB). Article 261 of the Labor Code accordingly provides
for exclusive original jurisdiction of such voluntary arbitrator or
panel of arbitrators over (1) the interpretation or implementation
of the CBA and (2) the interpretation or enforcement of company
personnel policies. Article 262 authorizes them, but only upon
agreement of the parties, to exercise jurisdiction over other labor
disputes.
On the other hand, a labor arbiter under Article 217 of the Labor
Code has jurisdiction over the following enumerated cases:
. . . (a) Except as otherwise provided under this
Code the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide, within
thirty (30) calendar days after the submission of
the case by the parties for decision without
extension, even in the absence of stenographic
notes, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for
reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and
other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other
forms of damages arising from the employeremployee relations;
5. Cases arising from any violation of Article 264
of this Code, including questions involving the
legality of strikes and lockouts;
6. Except claims for Employees Compensation,
Social Security, Medicare and maternity
benefits, all other claims, arising from employeremployee relations, including those of persons
in domestic or household service, involving an
amount exceeding five thousand pesos
(P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
xxx xxx xxx
It will thus be noted that the jurisdiction conferred by law on a
voluntary arbitrator or a panel of such arbitrators is quite limited
compared to the original jurisdiction of the labor arbiter and the
appellate jurisdiction of the National Labor Relations Commission
(NLRC) for that matter. 4 The state of our present law relating to
voluntary arbitration provides that "(t)he award or decision of the
Voluntary Arbitrator . . . shall be final and executory after ten (10)
calendar days from receipt of the copy of the award or decision by
the parties," 5 while the "(d)ecision, awards, or orders of the Labor
Arbiter are final and executory unless appealed to the Commission
by any or both parties within ten (10) calendar days from receipt of
such decisions, awards, or orders." 6 Hence, while there is an
express mode of appeal from the decision of a labor arbiter,

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Republic Act No. 6715 is silent with respect to an appeal from the
decision of a voluntary arbitrator.
Yet, past practice shows that a decision or award of a voluntary
arbitrator is, more often than not, elevated to the Supreme Court
itself on a petition for certiorari, 7 in effect equating the voluntary
arbitrator with the NLRC or the Court of Appeals. In the view of
the Court, this is illogical and imposes an unnecessary burden
upon it.
In Volkschel Labor Union, et al. v. NLRC, et al., 8 on the settled
premise that the judgments of courts and awards of quasi-judicial
agencies must become final at some definite time, this Court ruled
that the awards of voluntary arbitrators determine the rights of
parties; hence, their decisions have the same legal effect as
judgments of a court. In Oceanic Bic Division (FFW), et
al. v. Romero, et al., 9 this Court ruled that "a voluntary arbitrator
by the nature of her functions acts in a quasi-judicial capacity."
Under these rulings, it follows that the voluntary arbitrator,
whether acting solely or in a panel, enjoys in law the status of a
quasi-judicial agency but independent of, and apart from, the
NLRC since his decisions are not appealable to the latter. 10
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902,
provides that the Court of Appeals shall exercise:
xxx xxx xxx
(B) Exclusive appellate jurisdiction over all final
judgments, decisions, resolutions, orders or
awards of Regional Trial Courts and quasijudicial agencies, instrumentalities, boards or
commissions, including the Securities and
Exchange Commission, the Employees
Compensation Commission and the Civil Service
Commission, except those falling within the
appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor
Code of the Philippines under Presidential
Decree No. 442, as amended, the provisions of
this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of
1948.
xxx xxx xxx
Assuming arguendo that the voluntary arbitrator or the panel of
voluntary arbitrators may not strictly be considered as a quasijudicial agency, board or commission, still both he and the panel
are comprehended within the concept of a "quasi-judicial
instrumentality." It may even be stated that it was to meet the very
situation presented by the quasi-judicial functions of the voluntary
arbitrators here, as well as the subsequent arbitrator/arbitral
tribunal operating under the Construction Industry Arbitration
Commission, 11 that the broader term "instrumentalities" was
purposely included in the above-quoted provision.
An "instrumentality" is anything used as a means or
agency. 12 Thus, the terms governmental "agency" or
"instrumentality" are synonymous in the sense that either of them
is a means by which a government acts, or by which a certain
government act or function is performed. 13 The word
"instrumentality," with respect to a state, contemplates an
authority to which the state delegates governmental power for the
performance of a state function. 14 An individual person, like an
administrator or executor, is a judicial instrumentality in the
settling of an estate, 15 in the same manner that a sub-agent
appointed by a bankruptcy court is an instrumentality of the
court, 16 and a trustee in bankruptcy of a defunct corporation is an
instrumentality of the state. 17
The voluntary arbitrator no less performs a state function
pursuant to a governmental power delegated to him under the
provisions therefor in the Labor Code and he falls, therefore,
within the contemplation of the term "instrumentality" in the
aforequoted Sec. 9 of B.P. 129. The fact that his functions and
powers are provided for in the Labor Code does not place him
within the exceptions to said Sec. 9 since he is a quasi-judicial

instrumentality as contemplated therein. It will be noted that,

although the Employees Compensation Commission is also
provided for in the Labor Code, Circular No. 1-91, which is the
forerunner of the present Revised Administrative Circular No. 195, laid down the procedure for the appealability of its decisions to
the Court of Appeals under the foregoing rationalization, and this
was later adopted by Republic Act No. 7902 in amending Sec. 9 of
B.P. 129.
A fortiori, the decision or award of the voluntary arbitrator or
panel of arbitrators should likewise be appealable to the Court of
Appeals, in line with the procedure outlined in Revised
Administrative Circular No. 1-95, just like those of the quasijudicial agencies, boards and commissions enumerated therein.
This would be in furtherance of, and consistent with, the original
purpose of Circular No. 1-91 to provide a uniform procedure for
the appellate review of adjudications of all quasi-judicial
entities 18 not expressly excepted from the coverage of Sec. 9 of
B.P. 129 by either the Constitution or another statute. Nor will it
run counter to the legislative intendment that decisions of the
NLRC be reviewable directly by the Supreme Court since,
precisely, the cases within the adjudicative competence of the
voluntary arbitrator are excluded from the jurisdiction of the
NLRC or the labor arbiter.
In the same vein, it is worth mentioning that under Section 22 of
Republic Act No. 876, also known as the Arbitration Law,
arbitration is deemed a special proceeding of which the court
specified in the contract or submission, or if none be specified, the
Regional Trial Court for the province or city in which one of the
parties resides or is doing business, or in which the arbitration is
held, shall have jurisdiction. A party to the controversy may, at any
time within one (1) month after an award is made, apply to the
court having jurisdiction for an order confirming the award and
the court must grant such order unless the award is vacated,
modified or corrected. 19
In effect, this equates the award or decision of the voluntary
arbitrator with that of the regional trial court. Consequently, in a
petition for certiorari from that award or decision, the Court of
Appeals must be deemed to have concurrent jurisdiction with the
Supreme Court. As a matter of policy, this Court shall henceforth
remand to the Court of Appeals petitions of this nature for proper
disposition.
ACCORDINGLY, the Court resolved to REFER this case to the
Court of Appeals.
SO ORDERED.

Relationship between:
1. Grievance Machinery and Article 291 [b]
[277 (b)] Procedure for dismissals?
G.R. No. 96895 January 21, 1993
OSCAR L. PILI, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION,
JOHNSON AND JOHNSON (PHIL.), INC., DANTE
MORANTE AND PRIMO H. MENDOZA, JR., respondents.
Patricio L. Boncayao for petitioner.
The Solicitor General for public respondent.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles and
Rogelio Udarbe for private respondents.
PADILLA, J.:
Petitioner Oscar L. Pili was hired by Johnson and Johnson (Phil.),
Inc., hereinafter referred to as respondent company on 13 July
1978. He became a regular employee sometime in July 1980. On 4
March 1985, respondent company issued to petitioner a
termination letter effective 6 March 1985 for violation of the
company's "Personnel Practice Policy." Respondent company, as a
matter of policy, prohibits the hiring and placement of personnel
who are related to its employees within the fourth degree of
affinity or consanguinity. Petitioner was charged with falsifying his
application for employment when he concealed the fact that he
had an uncle (his mother's brother) who was already employed by
the respondent company.

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Petitioner protested his dismissal and asked that the dispute be

referred to and settled by the Grievance Committee in accordance
with the Grievance Procedure outlined in the collective bargaining
agreement between the respondent company and the Johnson and
Johnson Labor Union, the sole bargaining representative of the
employees in the company. The Grievance Procedure basically
consists of levels or "Steps" wherein a grievance can be discussed.
On 18 March 1985, the Grievance Committee under Step I was
convened. Petitioner asked that the application form she allegedly
falsified be shown, but the request was denied. Petitioner also
alleged that he was discriminated upon (with his dismissal) since
other employees with relatives in the company had not been
similarly dismissed. Petitioner moreover denied that he falsified
his application to conceal his relatives employed in the company.
The Committee ignored the explanation and upheld the dismissal.
Petitioner then elevated the grievance to Step II but the
Committee refused to hear and settle the same. Petitioner made
several formal requests to the officers of the labor union for
assistance in settling the dispute but the latter in a general
membership meeting considered the case closed. Petitioner tried
to elevate the grievance to Step III but he was likewise
unsuccessful. 1
Petitioner then filed a case for illegal dismissal, unfair labor
practice, discrimination and violation of Batas Pambansa Bilang
130 against the respondent company and impleaded Dante
Morante and Primo H. Mendoza, Jr., both officers of the Johnson
and Johnson Labor Union. After hearing the case, the Labor
Arbiter rendered a decision on 31 May 1989, the dispositive
portion of which reads:
WHEREFORE, in view of all the foregoing
considerations, judgment is hereby rendered,
ordering the respondent company to reinstate
the complainant to his former position without
loss of seniority right and other privileges, and
to pay him full back wages from the time of his
dismissal to his actual reinstatement, plus
attorney's fee equivalent to Ten Percent (10%) of
the total monetary award; however the claim or
damages is dismissed for lack of merit.
SO ORDERED. 2
Respondent company appealed to the National Labor Relations
Commission, herein public respondent. A Writ of Execution
Pending Appeal having been issued by the labor arbiter on 31 May
1989, herein public respondent issued a solution dated 29
November 1990 the latter portion of which reads:
Equity, We find in the present circumstances,
wall be served better for complainant to be paid
his salaries from the time stated in the Writ of
Execution (31 May 1989) up to the promulgation
of this resolution.
ACCORDINGLY AND IN CONFORMITY WITH
THE FOREGOING, the assailed decision dated
31 May 1989 is hereby SET ASIDE and a new
one entered finding the complainant's dismissal
to be with just cause.
Respondent-appellant is ordered to pay
complainant-appellee's his salaries (sic)
(pending the resolution of this appeal) from 31
May 1990 (sic), as fixed in the Writ of Execution
up to the promulgation of this resolution. SO
ORDERED. 3
In this Petition for Certiorari, petitioner contends that public
respondent Commission's resolution is not in accordance with the
law and was issued with grave abuse of discretion because
I. THE DISMISSAL OF PETITIONER WAS NOT
FOR A JUST AND VALID CAUSE AS
CORRECTLY FOUND BY THE HONORABLE
LABOR ARBITER DOMINADOR CRUZ AND
LATER, ON APPEAL BY THE HONORABLE
PRESIDING COMMISSIONER EDNA BONTOPEREZ (in a dissenting opinion).
II. THE DISMISSAL OF PETITIONER
VIOLATED HIS RIGHT TO DUE PROCESS . . .
III. THE HONORABLE COMMISSION
LIMITED THE AWARD OF BACKWAGES TO
PETITIONER FROM MAY 31, 1989 UP TO THE
PROMULGATION OF ITS DECISION
WITHOUT FACTUAL AND LEGAL BASIS. 4
The validity of petitioner's dismissal by the respondent company
can be examined from two (2) perspectives, namely: (1) Dismissal
because of the policy of the respondent company against the hiring
of relatives of employees within the fourth degree of affinity or

consanguinity, and (2) Dismissal because of the alleged

falsification in petitioner's application form.
To be sure, respondent company cannot be denied the right to
prescribe rules and regulations in the hiring of employees in the
exercise of its management prerogative. Petitioner therefore can
be validly dismissed for violating the policy of the company against
the hiring of relatives of incumbent employees within the degrees
earlier stated. In addition, it will be noted that respondent
company dismissed the petitioner not only for violation of said
company policy but for falsification of his application for
employment, by concealing his relationship to an uncle-employee,
in violation of the aforementioned policy. 5
It would seem that the determination of whether or not petitioner
was validly dismissed becomes complex in the presence of two (2)
causes for dismissal, either of which can be a valid cause for
dismissal. A careful study of the circumstances surrounding this
case however reveals that both causes for dismissal are anchored
on whether or not there was actually a falsification in the
application form accomplished by petitioner.
The Solicitor General, in a Comment on the Petition, which does
not support the position of herein public respondent, presents four
(4) arguments to support the petitioner's allegation that there was
illegal dismissal:
First, petitioner had no reason to conceal the
employment of his uncle in the same company.
The first Application for Employment did not
state the prohibition against the hiring of
relatives within the designated degrees. Neither
was petitioner verbally informed thereof. In all
appearances, petitioner acted in good faith and
was interested only in obtaining employment
and no more. Secondly, petitioner, assuming
that he had acted in bad faith, would have taken
steps to ensure that the first Application of
Employment would not stir any suspicion. He
would have accomplished an Application of
Employment devoid of erasures. In the instant
case, the subject Application of Employment
immediately invites a second look. This is so
because the name "Moises Lagatic" remains
visible and readable despite the attempt to cross
it out. Third, petitioner's actuations also prove
his good faith. He vehemently protested without
hesitation the accusation against him. He was
consistent in his claim that he made no
omissions on his first Application for
Employment (Records, pp. 103-105; 128129).Fourth, physical evidence presented also
agrees with petitioner's thesis. Careful
examination of the first Application of
Employment shows that the pen used to
superimpose the word "None" on the word "Yes"
and in the attempt to cross out the name
"Moises Lagatic" is distinct from that used by
petitioner. Natividad, the Materials Manager,
agreed to this observation, thus:
Q And opposite the name just
opposite that word name and
then cross(ed) out in ink, do
you know who cross(ed) out
this name?
A I could not tell who
cross(ed) this out although
the ink also used is almost the
same. (TSN, August 19, 1987,
pp. 29-30, italics for
emphasis)
It is, therefore, obvious that petitioner's first
Application for Employment had been tampered
with.
In the Application for Employment which
petitioner signed in July 1980, he wrote "Yes" in
reply to the question: "Have you any relatives or
friends in the company?" and thereafter the
name "Herminio Gener", designating him as a
"friend". Petitioner did not write "Moises
Lagatic" anymore for three (3) reasons. First,
there was only one line or space on which
petitioner could write the name of his relative or
friend. Second, he wrote the name of his friend
to acknowledge a debt of gratitude since it was
the latter who helped him in his employment
with private respondent company. Third, he had

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i am destined to be a LAWYER

already identified "Moises Lagatic" as a relative

in his first Application for Employment. 6
The portion of the Labor Arbiter's decision relevant to this issue
states:
. . . A careful examination of the aforesaid
application, however, reveals that the
complainant wrote the name of his relative
Lagatic but the same was crossed out for one
reason or another. If the complainant's intention
was to conceal the name of his uncle, he would
not have written it, or if after writing the same
he changed his mind, he would have simply
asked for another application to be filled up
without stating the name Lagatic, as contended
by the complainant and correctly so. Moreover,
a close scrutiny of the application reveals that it
was passed upon by management with an
imprimatur "OK" written by the interviewer of
then applicant Pili and approved by the
company vice president for manufacturing,
consequently the respondent is estopped from
contesting it as laches has already crept in. 7
From the foregoing, it is clear that there is no evidence to support
respondent company's claim that petitioner was the person who
crossed out the entries in the application. The Labor Arbiter's
findings regarding the entries in the application form,
unfortunately, do not discuss this issue in detail but when the
employee denies having made any alterations 8 only a clear
showing that the employee indeed made the alterations can be a
valid cause for dismissal based on the falsification. In the case at
bar, the alleged falsification in the application form was supposed
to have been committed in July 1978. Respondent company
approved the application and made petitioner a regular employee
sometime in July 1980.
It took almost seven (7) years before respondent company
dismissed the petitioner for allegedly falsifying his application
form. This Court finds it hard to accept respondent company's
allegation that it was only sometime in February 1985 that it was
discovered that petitioner had a relative within the degree
prohibited by company policy.9 If the alterations in the application
forms were in fact present in 1978, it would be more logical to
presume that respondent company would have tried to verify the
accuracy and truth of the entries before approving the application,
considering that the entries pertain to an important company
policy regarding the qualification of an individual to be employed.
And even if it is assumed that the alterations were made by
petitioner in 1978, respondent company by approving the
application can be considered to have waived the company policy
against hiring of relatives of employees within the degrees
previously stated, and since no deliberate falsification or
concealment was proved, as follows that there is no just cause for
dismissal.
The constitutional guarantee of protection to labor and security of
tenure, 10 requires that an employer can terminate the services of
an employee only for valid and just causes which must be
supported by substantial
evidence. 11 In the case at bar, the alleged falsification and/or
concealment was not proven. There being a doubt on whether or
not the alterations were committed by petitioner and considering
that respondent company, which had the opportunity to verify the
accuracy and truth of the alleged alterations at an earlier time, did
not do so but instead waited for almost seven (7) years, this Court
in upholding the constitutional mandate to protect the rights of
the working man and to resolve any slight doubts in favor of
labor, 12 rules in favor of petitioner Oscar Pili.
Furthermore, the dismissal of petitioner without the benefit of a
hearing prior to his termination violated constitutional right to
due process which requires that person sought to be dismissed
must be given a chance to answer the charges against him before
he is dismissed. Petitioner was allowed to avail of the grievance
procedure only after he had been dismissed on 6 March 1985. The
process requirement in the dismissal of employees is different
from the due process requirement in other labor dispute
proceedings; both requirements must be separately observed. 13
WHEREFORE, the Petition is GRANTED. The resolution of public
respondent Commission is hereby ANNULLED and SET ASIDE.
The private respondent is ordered to reinstate petitioner Oscar L.
Pili to his former or equivalent position without loss of seniority
rights and other benefits, with backwages equivalent to three (3)
years, without qualification and deduction, to pay attorney's fees
equivalent to ten percent (10%) of the total award and to pay the
petitioner One Thousand Pesos (P1,000.00) for violation of
petitioner's right to due process. 14

SO ORDERED.

On August 16, 1999, the Labor Arbiter rendered judgment

ordering the dismissal of the complaint. 14 However, the SEMC was
ordered to pay separation pay to the complainant. The dispositive
portion reads:

G.R. No. 166111 August 25, 2005

STANDARD ELECTRIC MANUFACTURING
CORPORATION, Petitioners,
vs.
STANDARD ELECTRIC EMPLOYEES UNION-NAFLUKMU and ROGELIO JAVIER, Respondents.
DECISION
CALLEJO, SR., J.:

WHEREFORE, in view of the foregoing, the complaint for illegal

dismissal is hereby ordered DISMISSED for lack of merit.
The respondents Standard Electric Manufacturing Corporation
and Mr. Jose Uy are, however, ordered to pay complainant Rogelio
Javier the amount of SEVENTY-ONE THOUSAND SEVEN
HUNDRED SIXTY PESOS (P71,760.00) representing his financial
assistance/separation pay.
SO ORDERED.15

Before us is a petition for review on certiorari seeking to review

the Decision1 and Resolution2 of the Court of Appeals (CA) in CAG.R. SP No. 76657, which annulled and set aside the Resolution of
the National Labor Relations Commission (NLRC) affirming the
Labor Arbiters Decision3 in NLRC NCR Case No. 00-08-0476096.
Rogelio Javier was employed by the Standard Electric
Manufacturing Corporation (SEMC) on January 15, 1973 as radial
spot machine operator in its Production Department. Javier was a
member of the Standard Electric Employees Union-NAFLU
(Union).4
On July 31, 1995, Javier failed to report for work. He failed to
notify the SEMC of the reason for his absences. On August 9, 1995,
he was arrested and detained for the charge of rape upon
complaint of his neighbor, Genalyn Barotilla. After the requisite
preliminary investigation, an Information for rape was filed in the
Regional Trial Court (RTC) of Pasig, docketed as Criminal Case
No. 108593.5
6

On January 13, 1996, the SEMC received a letter from Javier,

through counsel, informing the SEMC that Javier was detained for
the charge of rape and for that reason failed to report for work. He
requested the SEMC to defer the implementation of its intention
to dismiss him, citing the ruling of this Court in Magtoto v.
NLRC.7 The SEMC denied Javiers request and issued a
Memorandum terminating his employment for (a) having been
absent without leave (AWOL) for more than fifteen days from July
31, 1995; and (b) for committing rape.8

On appeal, the NLRC affirmed the Labor Arbiters ruling in its

Resolution of September 24, 2002. The NLRC declared that:
Appellants contention is baseless. A perusal of the evidence on
record clearly shows that prior to his dismissal from his job by
respondents-appellees, he was made to explain his side (Exhibit
"5," respondents Formal Offer of Evidence). Evidence on record
further shows that a grievance machinery as provided for in the
CBA was activated by respondents-appellees for the purpose of
affording complainant a chance to present his side prior to his
dismissal. (Exhibits "4" to "4-b," respondents Formal Offer of
Evidence).
Considering the adequate evidence presented by respondentsappellants on which the findings of the Labor Arbiter were based,
this Commission finds no merit on complainants-appellants
contention that the Labor Arbiter had committed serious errors in
his findings of facts and the law in this instant case.
Hence, the assailed decision must stand for "the matter of
evaluating the merits and demerits of the case, as long as the
Decision is supported by the facts and the evidence, is left to the
sound discretion of the Labor Arbiter." (Metropolitan Bank and
Trust Company vs. NLRC, et al., 235 SCRA 400, 403).
WHEREFORE, in the light of the foregoing premises, [the]
Decision of the Labor Arbiter dated August 16, 1999 is hereby
AFFIRMED.
SO ORDERED.16

On May 17, 1996, the RTC issued an Order granting Javiers

demurrer to evidence and ordered his release from jail. Shortly
thereafter, Javier reported for work, but the SEMC refused to
accept him back.
A grievance meeting between the Union, Javier and the SEMC was
held, but SEMC refused to re-admit Javier. On August 2, 1996, the
Union and Javier filed a Complaint10 for illegal dismissal against
the SEMC before the NLRC. He averred that since the reason for
his detention for rape was non-existent, the termination of his
employment was illegal. Javier cited the ruling of this Court
in Magtoto v. NLRC.11
For its part, the SEMC averred that Javiers prolonged absences
caused irreparable damages to its orderly operation; he had to be
replaced so that the continuity and flow of production would not
be jeopardized. It could not afford to wait for Javiers indefinite
return from detention, if at all. The SEMC insisted that
conformably with its Rules and Regulations, it was justified in
dismissing Javier for being absent without leave for fifteen days or
so.

When the NLRC denied the motion for reconsideration of the said
decision, Javier and the Union filed a petition forcertiorari with
the CA, questioning such ruling, as follows:
I
PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF
DISCRETION IN NOT HOLDING THAT RESPONDENT
COMPANY VIOLATED PETITIONER ROGELIO JAVIERS
RIGHT TO PRIOR NOTICE RELATIVE TO THE LATTERS
DISMISSAL.
II
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF
DISCRETION IN HOLDING THAT PETITIONER ROGELIO
JAVIER WENT AWOL (ABSENCE WITHOUT LEAVE) FROM
HIS JOB.
III

On January 14, 1997, the Labor Arbiter rendered judgment

ordering the dismissal of the complaint. 12 The Labor Arbiter ruled
that the complaint was within the exclusive jurisdiction of the
Voluntary Arbitrators or Panel of Arbitrators. On appeal, the
NLRC reversed the Labor Arbiters decision
and ruled that the latter had jurisdiction over the complaint; it
thus ordered the remand of the case to the Labor Arbiter for
resolution on the merits.13

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i am destined to be a LAWYER

PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION

IN NOT APPLYING THE RULING IN MAGTOTO VS. NLRC TO
THE INSTANT CASE.17
In the Decision18 dated August 19, 2004, the CA reversed the
findings of the Labor Arbiter and the NLRC. Thefallo of the
decision reads:

WHEREFORE, the NLRCs Resolution dated September 24,

2002 is ANNULLED and SET ASIDE. Private respondent
Standard Electric Manufacturing Corporation is
hereby ORDERED to REINSTATE Rogelio Javier to his former
position, without loss of seniority rights and other privileges
appurtenant thereto, with full backwages from the time of his
dismissal until he is actually reinstated, or to pay him separation
pay, if reinstatement is no longer feasible.
SO ORDERED.
The appellate court cited the rulings of this Court in Magtoto v.
NLRC19 and City Government of Makati City v. Civil Service
Commission20 as precedents. It declared that it was not Javiers
intention to abandon his job; his incarceration reasonably justified
his failure to report for work and negated the theory that he was
on AWOL. Likewise, the CA held that Javier could not be
terminated on the ground of commission of a crime, as when he
was acquitted of the rape charges, the second ground relied upon
by the
SEMC ceased to have factual basis. Hence, despite the fact that
Javier was allegedly afforded the opportunity to explain his side,
the same was unnecessary since, in the first place, there was no
just or authorized cause for the dismissal.
The motion for reconsideration seasonably filed by the SEMC on
August 19, 2004 was denied by the CA in its November 23, 2004
Resolution.21 Hence, this recourse.
The issues posed by the petitioner are the following:
I
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED PATENT AND REVERSIBLE ERROR IN
APPLYING THE CASE OF MAGTOTO VS. NLRC IN THIS CASE.
II
WHETHER OF NOT THE HONORABLE COURT OF APPEALS
COMMITTED PATENT AND REVERSIBLE ERROR IN
APPLYING THE CASE OF CITY GOVERNMENT OF MAKATI
CITY IN THIS CASE.
III
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED PATENT AND REVERSIBLE ERROR IN
REINSTATING [RESPONDENT] ROGELIO JAVIER AND
GRANTING HIM FULL BACKWAGES.
IV
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED PATENT AND REVERSIBLE ERROR IN TOTALLY
DISREGARDING THE FINDINGS OF THE NATIONAL LABOR
RELATIONS COMMISSION AND THE LABOR ARBITER A
QUO.22
The Court finds that the petition is bereft of merit.
The petitioner asserts that the ruling of the Court in Magtoto finds
no application in the present case. It argues that in Magtoto, no
criminal information was filed in the regular court against the
employee, as the city prosecutor found no probable cause to hold
the respondent therein for trial. The petitioner argues that
respondent Javier was indicted for the crime of rape in the RTC.
Another difference, the petitioner points out, is that the employee
in the cited case was dismissed solely on account of his
absences during his imprisonment; respondent Javier was
terminated due to truancy prior to his detention from July 31,
1995, to his detention for rape on August 9, 1995, until his release
on May 24, 1996. Respondent Javier never informed the petitioner
why he was absent on the said dates, and subsequent thereto. It
was only on January 13, 1996 that respondent Javier, through his
counsel, informed the petitioner of his detention for rape for the
first time.

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i am destined to be a LAWYER

The petitioner avers that the ruling of this Court in City

Government of Makati City is not applicable because respondent
Javier was dismissed on a demurrer to evidence, and not because
he did not commit the offense alleged. The case was dismissed
because of the prosecutions failure to prove his guilt beyond
reasonable doubt. In marked contrast, the petitioner notes, the
employee in City Government of Makati City was acquitted by
reason of the prosecutions failure to prove her complicity in the
crime.
The petitioner maintains that the mere filing of the Information
for the crime of rape against respondent Javier rendered its Rules
and Regulations operational, particularly Serious Offense No. 7. It
avers that substantial proof, not clear and convincing evidence or
proof beyond reasonable doubt, is sufficient basis for the
imposition of any disciplinary action over an erring employee.
The petitioners contentions are wrong.
Respondent Javier was dismissed by the petitioner effective
February 5, 1996 for (a) being AWOL from July 31, 1995 up to
January 30, 1996; and (b) committing rape. However, on
demurrer to evidence, respondent Javier was acquitted of the
charge. With respondent Javiers acquittal, the cause of his
dismissal from his employment turned out to be non-existent.
In the Magtoto case, Alejandro Jonas Magtoto was arrested by
virtue of an Arrest, Search and Seizure Order dated September 1,
1980. He was
charged with violation of Article 136 (Conspiracy and Proposal to
Commit Rebellion) and Article 138 (Inciting to Rebellion or
Insurrection) of the Revised Penal Code (RPC). Although Magtoto
informed his employer and pleaded that he be considered as "on
leave" until released, his employer denied the request. On April 10,
1981, or about seven (7) months after his arrest, Magtoto was
released after the City Fiscal dismissed the criminal charges for
lack of evidence. On the same date, he informed his employer of
his intent to start working again, but the employer rejected the
offer. In ruling that his termination was illegal, the Supreme Court
ruled as follows:
The employer tries to distance itself from the detention by
stressing that the petitioner was dismissed due to prolonged
absence. However, Mr. Magtoto could not report for work because
he was in a prison cell. The detention cannot be divorced from
prolonged absence. One caused the other. Since the causes for the
detention, which in turn gave the employer a ground to dismiss
the petitioner, proved to be non-existent, we rule that the
termination was illegal and reinstatement is warranted. A nonexistent cause for dismissal was explained in Pepito v. Secretary
of Labor (96 SCRA 454).

"... A distinction, however, should be made between a dismissal

without cause and a dismissal for a false or non-existent cause. In
the former, it is the intention of the employer to dismiss his
employee for no cause whatsoever, in which case the Termination
Pay Law would apply. In the latter case, the employer does not
intend to dismiss the employee but for a specific cause which turns
out to be false or non-existent. Hence, absent the reason which
gave rise to his separation from employment, there is no intention
on the part of the employer to dismiss the employee concerned.
Consequently, reinstatement is in order. And this is the situation
here. Petitioner was separated because of his alleged involvement
in the pilferage in question. However, he was absolved from any
responsibility therefor by the court. The cause for his dismissal
having been proved non-existent or false, his reinstatement is
warranted. It would be unjust and unreasonable for the Company
to dismiss petitioner after the latter had proven himself innocent
of the cause for which he was dismissed."23
The facts in Pedroso v. Castro24 are similar to the set of facts in the
present case. The petitioners therein were arrested and detained
by the military authorities by virtue of a Presidential Commitment
Order allegedly for the commission of Conspiracy to Commit
Rebellion under Article 136 of the RPC. As a result, their employer
hired substitute workers to avoid disruption of work and business
operations. They were released when the charges against them
were not proven. After incarceration, they reported back to work,

but were refused admission by their employer. The Labor Arbiter

and the NLRC sustained the validity of their dismissal.
Nevertheless, this Court again held that the dismissed employees
should be reinstated to their former positions, since their
separation from employment was founded on a false or nonexistent cause; hence, illegal.
Respondent Javiers absence from August 9, 1995 cannot be
deemed as an abandonment of his work. Abandonment is a matter
of intention and cannot lightly be inferred or legally presumed
from certain equivocal acts. To constitute as such, two requisites
must concur: first, the employee must have failed to report for
work or must have been absent without valid or justifiable reason;
and second, there must have been a clear intention on the part of
the employee to sever the employer-employee relationship as
manifested by some overt acts, with the second element being the
more determinative factor. Abandonment as a just ground for
dismissal requires clear, willful, deliberate, and unjustified refusal
of the employee to resume his employment. Mere absence or
failure to report for work, even after notice to return, is not
tantamount to abandonment.25
Moreover, respondent Javiers acquittal for rape makes it more
compelling to view the illegality of his dismissal. The trial court
dismissed the case for "insufficiency of evidence," and such ruling
is tantamount to an acquittal of the crime charged, and proof that
respondent Javiers arrest and detention were without factual and
legal basis in the first place.
The petitioner acted with precipitate haste in terminating
respondent Javiers employment on January 30, 1996, on the
ground that he had raped the complainant therein. Respondent
Javier had yet to be tried for the said charge. In fine, the petitioner
prejudged him, and preempted the ruling of the RTC. The
petitioner had, in effect, adjudged respondent Javier guilty
without due process of law. While it may be true that after the
preliminary investigation of the complaint, probable cause for rape
was found and respondent Javier had to be detained, these cannot
be made as legal bases for the immediate termination of his
employment.
Moreover, the petitioner did not accord respondent Javier an
opportunity to explain his absences from July 31, 1995. The
petitioners reliance on the alleged Letter dated August 17, 1995 is
misplaced. There is no evidence on record that respondent Javier
received such letter, and its
sudden presence is highly suspect. The Court agrees with
respondent Javiers observation that the letter was not mentioned
nor annexed in the petitioners Position Paper, Rejoinder and even
in its Opposition to the Appeal. The letter surfaced only on a much
later date, in 1999, when it was formally offered in evidence 26 and
referred to in the petitioners Memorandum27 before the Labor
Arbiter a clear inference that the said letter was but an
afterthought to justify petitioners termination of respondent
Javiers employment.
Further, we cannot subscribe to the petitioners contention that
the due process requirement relative to the dismissal of
respondent Javier was duly complied with when he was allowed to
explain his side during the grievance machinery conferences.
Indeed, in the case at bar, the petitioner did not conduct any
investigation whatsoever prior to his termination, despite being
informed of respondent Javiers predicament by the latters
siblings, his Union and his counsel.28 The meetings held pursuant
to the grievance machinery provisions of the collective bargaining
agreement were only done after his dismissal had already taken
effect on February 5, 1996. Clearly, well-meaning these
conferences might be, they can not cure an otherwise unlawful
termination.
It bears stressing that for a dismissal to be validly effected, the
twin requirements of due process notice and hearing must be
observed. In dismissing an employee, an employer has the burden
of proving that the
former worker has been served two notices: (1) one to apprise him
of the particular acts or omissions for which his dismissal is
sought; and (2) the other to inform him of his employers decision
to dismiss him. As to the requirement of a hearing, the essence of
due process lies in an opportunity to be heard, and not always and
indispensably in an actual hearing.29

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Finally, in line with the rulings of this Court

in Magtoto and Pedroso on the matter of backwages, respondent
Javier is not entitled to any salary during the period of his
detention. His entitlement to full backwages commenced from the
time the petitioner refused his reinstatement. In the instant case,
when respondent Javier was freed on May 24, 1996 by virtue of the
judgment of acquittal dated May 17, 1996, he immediately
proceeded to the petitioner but was not accepted back to work;
hence, the reckoning point for the grant of backwages started
therefrom.
IN LIGHT OF ALL THE FOREGOING, the instant petition is
hereby DISMISSED for lack of merit. The assailed Decision of
the Court of Appeals is AFFIRMED WITH MODIFICATION.
Petitioner is hereby ORDERED to reinstaterespondent Rogelio
Javier to his former position or, if no longer possible, a
substantially equivalent position without loss of seniority rights
and other privileges appurtenant thereto, with full backwages from
the time it refused to allow his reinstatement on May 24, 1996
until actually reinstated; or, if reinstatement is no longer feasible,
to pay him separation pay equivalent to one (1) month salary for
every year of service.
Costs against the petitioner.
SO ORDERED.

2. Grievance Machinery & Union by-laws

members rights & Article 277[b]
G.R. No. 149552
March 10, 2010
GENERAL MILLING CORPORATION, Petitioner,
vs.
ERNESTO CASIO, ROLANDO IGOT, MARIO FAMADOR,
NELSON LIM, FELICISIMO BOOC, PROCOPIO
OBREGON, JR., and ANTONIO ANINIPOK, Respondents,
and
VIRGILIO PINO, PAULINO CABREROS, MA. LUNA P.
JUMAOAS, DOMINADOR BOOC, FIDEL VALLE,
BARTOLOME AUMAN, REMEGIO CABANTAN, LORETO
GONZAGA, EDILBERTO MENDOZA and ANTONIO
PANILAG, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court seeking the reversal of the Decision 1 dated March
30, 2001 and Resolution2 dated July 18, 2001 of the Court of
Appeals in CA-G.R. SP No. 40280, setting aside the Voluntary
Arbitration Award3 dated August 16, 1995 of the National
Conciliation and Mediation Board (NCMB), Cebu City, in VA Case
No. AC 389-01-01-95. Voluntary Arbitrator Alice K. CanonoyMorada (Canonoy-Morada) dismissed the Complaint filed by
respondents Ernesto Casio, Rolando Igot, Mario Famador, Nelson
Lim, Felicisimo Booc, Procopio Obregon, Jr. and Antonio
Aninipok (Casio, et al.) against petitioner General Milling
Corporation (GMC) for unfair labor practice, illegal suspension,
illegal dismissal, and payment of moral and exemplary damages.
The labor union Ilaw at Buklod ng Mangagawa (IBM)-Local 31
Chapter (Local 31) was the sole and exclusive bargaining agent of
the rank and file employees of GMC in Lapu-Lapu City. On
November 30, 1991, IBM-Local 31, through its officers and board
members, namely, respondents Virgilio Pino, 4 Paulino Cabreros,
Ma. Luna P. Jumaoas, Dominador Booc, Bartolome Auman,
Remegio Cabantan, Fidel Valle, Loreto Gonzaga, Edilberto
Mendoza and Antonio Panilag (Pino, et al.), entered into a
Collective Bargaining Agreement (CBA) with GMC. The effectivity
of the said CBA was retroactive to August 1, 1991. 5
The CBA contained the following union security provisions:
Section 3. MAINTENANCE OF MEMBERSHIP All
employees/workers employed by the Company with the exception
of those who are specifically excluded by law and by the terms of
this Agreement must be members in good standing of the Union
within thirty (30) days upon the signing of this agreement and
shall maintain such membership in good standing thereof as a
condition of their employment or continued employment.
Section 6. The Company, upon written request of the Union, shall
terminate the services of any employee/worker who fails to fulfill
the conditions set forth in Sections 3 and 4 thereof, subject
however, to the provisions of the Labor Laws of the Philippines

and their Implementing Rules and Regulations. The Union shall

absolve the Company from any and all liabilities, pecuniary or
otherwise, and responsibilities to any employee or worker who is
dismissed or terminated in pursuant thereof. 6
Casio, et al. were regular employees of GMC with daily earnings
ranging from P173.75 to P201.50, and length of service varying
from eight to 25 years.7 Casio was elected IBM-Local 31 President
for a three-year term in June 1991, while his co-respondents were
union shop stewards.
In a letter8 dated February 24, 1992, Rodolfo Gabiana (Gabiana),
the IBM Regional Director for Visayas and Mindanao, furnished
Casio, et al. with copies of the Affidavits of GMC employees Basilio
Inoc and Juan Potot, charging Casio, et al. with "acts inimical to
the interest of the union." Through the same letter, Gabiana gave
Casio, et al. three days from receipt thereof within which to file
their answers or counter-affidavits. However, Casio, et al. refused
to acknowledge receipt of Gabianas letter.
Subsequently, on February 29, 1992, Pino, et al., as officers and
members of the IBM-Local 31, issued a Resolution9 expelling
Casio, et al. from the union. Pertinent portions of the Resolution
are reproduced below:
Whereas, Felicisimo Booc, Rolando Igot, Procopio Obregon, Jr.,
Antonio Aninipok, Mario Famador, Nelson Lim and Ernesto Casio,
through Ernesto Casio have refused to acknowledge receipt of the
letter-complaint dated February 24, 1992, requiring them to file
their answer[s] or counter-affidavits as against the charge of "acts
inimical to the interest of the union" and that in view of such
refusal to acknowledge receipt, a copy of said letter complaint was
dropped or left in front of E. Casio;
Whereas, the three (3)[-]day period given to file their answer or
counter-affidavit have already lapsed prompting the union Board
to investigate the charge ex parte;
Whereas, after such ex parte investigation the said charge has been
more than adequately substantiated by the affidavits/witnesses
and documentary exhibits presented.
NOW, THEREFORE, RESOLVED as it is hereby RESOLVED, that
Ernesto Casio, Felicisimo Booc, Rolando Igot, Procopio Obregon,
Jr., Antonio Aninipok, Mario Famador and Nelson Lim be
expelled as union member[s] of good standing effectively
immediately.
RESOLVED FURTHER, to furnish copy of this Resolution to the
GMC Management for their information and guidance with the
recommendation as it is hereby recommended to dismiss the
above-named employees from work.
Gabiana then wrote a letter10 dated March 10, 1992, addressed to
Eduardo Cabahug (Cabahug), GMC Vice-President for
Engineering and Plant Administration, informing the company of
the expulsion of Casio, et al. from the union pursuant to the
Resolution dated February 29, 1992 of IBM-Local 31 officers and
board members. Gabiana likewise requested that Casio, et al. "be
immediately dismissed from their work for the interest of
industrial peace in the plant."
Gabiana followed-up with another letter11 dated March 19, 1992,
inquiring from Cabahug why Casio, et al. were still employed with
GMC despite the request of IBM-Local 31 that Casio, et al. be
immediately dismissed from service pursuant to the closed shop
provision in the existing CBA. Gabiana reiterated the demand of
IBM-Local 31 that GMC dismiss Casio, et al., with the warning that
failure of GMC to do so would constitute gross violation of the
existing CBA and constrain the union to file a case for unfair labor
practice against GMC.
Pressured by the threatened filing of a suit for unfair labor
practice, GMC acceded to Gabianas request to terminate the
employment of Casio, et al. GMC issued a Memorandum dated
March 24, 1992 terminating the employment of Casio, et al.
effective April 24, 1992 and placing the latter under preventive
suspension for the meantime.
On March 27, 1992, Casio, et al., in the name of IBM-Local 31, filed
a Notice of Strike with the NCMB-Regional Office No. VII (NCMBRO). Casio, et al. alleged as bases for the strike the illegal dismissal
of union officers and members, discrimination, coercion, and
union busting. The NCMB-RO held conciliation proceedings, but
no settlement was reached among the parties. 12
Casio, et al. next sought recourse from the National Labor
Relations Commission (NLRC) Regional Arbitration Branch VII by
filing on August 3, 1992 a Complaint against GMC and Pino, et al.
for unfair labor practice, particularly, the termination of legitimate
union officers, illegal suspension, illegal dismissal, and moral and
exemplary damages. Their Complaint was docketed as NLRC Case
No. RAB-VII-08-0639-92.13
Finding that NLRC Case No. RAB-VII-08-0639-92 did not
undergo voluntary arbitration, the Labor Arbiter dismissed the
case for lack of jurisdiction, but endorsed the same to the NCMB-

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i am destined to be a LAWYER

RO. Prior to undergoing voluntary arbitration before the NCMBRO, however, the parties agreed to first submit the case to the
grievance machinery of IBM-Local 31. On September 7, 1994,
Casio, et al. filed their Complaint with Pino, the Acting President
of IBM-Local 31. Pino acknowledged receipt of the Complaint and
assured Casio, et al. that they would be "seasonably notified of
whatever decision and/or action the Board may have in the instant
case."14 When the IBM-Local 31 Board failed to hold grievance
proceedings on the Complaint of Casio, et al., NCMB Voluntary
Arbitrator Canonoy-Morada assumed jurisdiction over the same.
The Complaint was docketed as VA Case No. AC 389-01-01-95.
Based on the Position Papers and other documents submitted by
the parties,15 Voluntary Arbitrator Canonoy-Morada rendered on
August 16, 1995 a Voluntary Arbitration Award dismissing the
Complaint in VA Case No. AC 389-01-01-95 for lack of merit, but
granting separation pay and attorneys fees to Casio, et al. The
Voluntary Arbitration Award presented the following findings: (1)
the termination by GMC of the employment of Casio, et al. was in
valid compliance with the closed shop provision in the CBA; (2)
GMC had no competence to determine the good standing of a
union member; (3) Casio, et al. waived their right to due process
when they refused to receive Gabianas letter dated February 24,
1992, which required them to submit their answer to the charges
against them; (4) the preventive suspension of Casio, et al. by
GMC was an act of self-defense; and (5) the IBM-Local 31
Resolution dated February 29, 1992 expelling Casio, et al. as union
members, also automatically ousted them as union officers. 16 The
dispositive portion of the Voluntary Arbitration Award reads:
WHEREFORE, above premises considered, this case filed by
[Casio, et al.] is hereby ordered DISMISSED for lack of merit.
Since the dismissal is not for a cause detrimental to the interest of
the company, respondent General Milling Corporation is,
nonetheless, ordered to pay separation pay to all [Casio, et al.]
within seven (7) calendar days upon receipt of this order at the
rate of one-half month per year of service reckoned from the time
of their employment until the date of their separation on March
24, 1992, thus:
Employee

Date
Hired

Rate/Month
(1/2 mo/yr
of service)

Service

Total

Casio

April
24/74

P2,636.29

x 18
years =

P47,453.22

Igot

May
1980

P2,472.75

x 12
years =

P29,673.00

Famador

Feb.
1977

P2,498.92

x 15
years =

P37,483.80

Lim

Aug.
1975

P2,466.21

x 17
years =

P41,925.57

Booc

Aug.
1978

P2,498.92

x 14
years =

P34,984.88

Obregon

May
1984

P2,273.23

x 08
years =

P18,185.84

Aninipok

Sept.
1967

P2,616.01

x 25
years =

P65,400.25

The attorneys fees for [Casio, et al.s] counsel shall be ten percent
(10%) of the total amount due them; and shall be shared
proportionately by all of the same [Casio, et al.].
All other claims are hereby denied.17
Dissatisfied with the Voluntary Arbitration Award, Casio, et al.
went to the Court of Appeals by way of a Petition for Certiorari
under Rule 65 of the Rules of Court to have said Award set aside.
The Court of Appeals granted the writ of certiorari and set aside
the Voluntary Arbitration Award. The appellate court ruled that
while the dismissal of Casio, et al., was made by GMC pursuant to
a valid closed shop provision under the CBA, the company,
however, failed to observe the elementary rules of due process in
implementing the said dismissal. Consequently, Casio, et al. were
entitled to reinstatement with backwages from the time of their
dismissal up to the time of their reinstatement. Nevertheless, the
Court of Appeals did not hold GMC liable to Casio, et al. for moral
and exemplary damages and attorneys fees, there being no
showing that their dismissal was attended by bad faith or malice,
or that the dismissal was effected in a wanton, oppressive, or
malevolent manner, given that GMC merely accommodated the
request of IBM-Local 31. The appellate court, instead, made Pino,
et al. liable to Casio, et al., for moral and exemplary damages and
attorneys fees, since it was on the basis of the imputations and

actuations of Pino, et al. that Casio, et al. were illegally dismissed

from employment. The Court of Appeals thus decreed:
WHEREFORE, the assailed award is hereby SET ASIDE, and
private respondent General Milling Corporation is hereby ordered
to reinstate [Casio, et al.] to their former positions without loss of
seniority rights, and to pay their full backwages, solidarily with
[Pino, et al.]. Further, [Pino, et al.] are ordered to indemnify each
of [Casio, et al.] in the form of moral and exemplary damages in
the amounts of P50,000.00 and P30,000.00, respectively, and to
pay attorneys fees.18
The Motion for Reconsideration of GMC was denied by the Court
of Appeals in the Resolution dated July 18, 2001.
Hence, GMC filed the instant Petition for Review, arguing that:
I
THE HONORABLE PUBLIC RESPONDENT COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR
EXCESS OF JURISDICTION WHEN IT SET ASIDE THE AWARD
OF THE VOLUNTARY ARBITRATOR, AND IN AWARDING
REINSTATEMENT AND FULL BACKWAGES TO [Casio, et al.].
II
THE HONORABLE PUBLIC RESPONDENT COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION WHEN IT SAID THAT
PETITIONER GMC FAILED TO ACCORD DUE PROCESS TO
[Casio, et al.].
III
THE HONORABLE PUBLIC RESPONDENT COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR
EXCESS OF JURISDICTION WHEN IT DID NOT ABSOLVE
PETITIONER GMC OF ANY LIABILITY AND INSTEAD RULED
THAT IT WAS SOLIDARILY LIABLE WITH THE UNION
OFFICERS FOR THE PAYMENT OF FULL BACKWAGES TO
[Casio, et al.].
At this point, we take note that Pino, et al. did not appeal from the
decision of the Court of Appeals.
GMC avers that in reviewing and reversing the findings of the
Voluntary Arbitrator, the Court of Appeals departed from the
principle of conclusiveness of the trial judges findings. GMC also
claims that the findings of the Voluntary Arbitrator as to the
legality of the termination from employment of Casio, et al. are
well supported by evidence. GMC further insists that before IBPLocal 31 expelled Casio, et al. from the union and requested GMC
to dismiss Casio, et al. from service pursuant to the closed shop
provision in the CBA, IBP-Local 31 already accorded Casio, et al.
due process, only that Casio, et al. refused to avail themselves of
such opportunity. GMC additionally maintains that Casio, et al.
were expelled by IBP-Local 31 for "acts inimical to the interest of
the union," and GMC had no authority to inquire into or rule on
which employee-member is or is not loyal to the union, this being
an internal affair of the union. Thus, GMC had to rely on the
presumption that Pino, et al. regularly performed their duties and
functions as IBP-Local 31 officers and board members, when the
latter investigated and ruled on the charges against Casio, et
al.19 GMC finally asserts that Pino, et al., the IBP-Local 31 officers
and board members who resolved to expel Casio, et al. from the
union, and not GMC, should be held liable for the reinstatement of
and payment of full backwages to Casio, et al. for the company had
acted in good faith and merely complied with the closed shop
provision in the CBA.
On the other hand, Casio, et al. counters that GMC failed to
identify the specific pieces of evidence supporting the findings of
the Voluntary Arbitrator. Casio, et al. contends that to accord them
due process, GMC itself, as the employer, should have held
proceedings distinct and separate from those conducted by IBMLocal 31. GMC cannot justify its failure to conduct its own inquiry
using the argument that such proceedings would constitute an
intrusion by the company into the internal affairs of the union.
The claim of GMC that it had acted in good faith when it dismissed
Casio, et al. from service in accordance with the closed shop
provision of the CBA is inconsistent with the failure of the
company to accord the dismissed employees their right to due
process.
In general, in a "petition for review on certiorari as a mode of
appeal under Rule 45 of the Rules of Court, the petitioner can raise
only questions of law - the Supreme Court is not the proper venue
to consider a factual issue as it is not a trier of facts. A departure
from the general rule may be warranted where the findings of fact
of the Court of Appeals are contrary to the findings and
conclusions of the trial court [or quasi-judicial agency, as the case
may be], or when the same is unsupported by the evidence on
record."20
Whether Casio, et al. were illegally dismissed without any valid
reason is a question of fact better left to quasi-judicial agencies to

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i am destined to be a LAWYER

determine. In this case, the Voluntary Arbitrator was convinced

that Casio, et al. were legally dismissed; while the Court of Appeals
believed the opposite, because even though the dismissal of Casio,
et al. was made by GMC pursuant to a valid closed shop provision
in the CBA, the company still failed to observe the elementary
rules of due process. The Court is therefore constrained to take a
second look at the evidence on record considering that the factual
findings of the Voluntary Arbitrator and the Court of Appeals are
contradictory.
There are two aspects which characterize the concept of due
process under the Labor Code: one is substantive whether the
termination of employment was based on the provision of the
Labor Code or in accordance with the prevailing jurisprudence; the
other is procedural the manner in which the dismissal was
effected.21
After a thorough review of the records, the Court agrees with the
Court of Appeals. The dismissal of Casio, et al. was indeed illegal,
having been done without just cause and the observance of
procedural due process.
In Alabang Country Club, Inc. v. National Labor Relations
Commission,22 the Court laid down the grounds for which an
employee may be validly terminated, thus:
Under the Labor Code, an employee may be validly terminated on
the following grounds: (1) just causes under Art. 282; (2)
authorized causes under Art. 283; (3) termination due to disease
under Art. 284, and (4) termination by the employee or
resignation under Art. 285.
Another cause for termination is dismissal from employment due
to the enforcement of the union security clause in the CBA. x x x.
(Emphasis ours.)
"Union security" is a generic term, which is applied to and
comprehends "closed shop," "union shop," "maintenance of
membership," or any other form of agreement which imposes
upon employees the obligation to acquire or retain union
membership as a condition affecting employment. There is union
shop when all new regular employees are required to join the
union within a certain period as a condition for their continued
employment. There is maintenance of membership shop when
employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain
union membership as a condition for continued employment until
they are promoted or transferred out of the bargaining unit or the
agreement is terminated. A closed shop, on the other hand, may be
defined as an enterprise in which, by agreement between the
employer and his employees or their representatives, no person
may be employed in any or certain agreed departments of the
enterprise unless he or she is, becomes, and, for the duration of
the agreement, remains a member in good standing of a union
entirely comprised of or of which the employees in interest are a
part.23
Union security clauses are recognized and explicitly allowed under
Article 248(e) of the Labor Code, which provides that:
Art. 248. Unfair Labor Practices of Employers. x x x
xxxx
(e) To discriminate in regard to wages, hours of work, and other
terms and conditions of employment in order to encourage or
discourage membership in any labor organization. Nothing in this
Code or in any other law shall stop the parties from requiring
membership in a recognized collective bargaining agent as a
condition for employment, except those employees who are
already members of another union at the time of the signing of the
collective bargaining agreement. (Emphasis supplied.)
It is State policy to promote unionism to enable workers to
negotiate with management on an even playing field and with
more persuasiveness than if they were to individually and
separately bargain with the employer. For this reason, the law has
allowed stipulations for "union shop" and "closed shop" as means
of encouraging workers to join and support the union of their
choice in the protection of their rights and interest vis--vis the
employer.24
Moreover, a stipulation in the CBA authorizing the dismissal of
employees are of equal import as the statutory provisions on
dismissal under the Labor Code, since "a CBA is the law between
the company and the union and compliance therewith is mandated
by the express policy to give protection to labor." 25
In terminating the employment of an employee by enforcing the
union security clause, the employer needs only to determine and
prove that: (1) the union security clause is applicable; (2) the
union is requesting for the enforcement of the union security
provision in the CBA; and (3) there is sufficient evidence to
support the decision of the union to expel the employee from the
union. These requisites constitute just cause for terminating an
employee based on the union security provision of the CBA. 26

There is no question that in the present case, the CBA between

GMC and IBM-Local 31 included a maintenance of membership
and closed shop clause as can be gleaned from Sections 3 and 6 of
Article II. IBM-Local 31, by written request, can ask GMC to
terminate the employment of the employee/worker who failed to
maintain its good standing as a union member.
It is similarly undisputed that IBM-Local 31, through Gabiana, the
IBM Regional Director for Visayas and Mindanao, twice requested
GMC, in the letters dated March 10 and 19, 1992, to terminate the
employment of Casio, et al. as a necessary consequence of their
expulsion from the union.
It is the third requisite that there is sufficient evidence to
support the decision of IBM-Local 31 to expel Casio, et al. which
appears to be lacking in this case.
The full text of the individual but identical termination
letters,27 served by GMC on Casio, et al., is very revealing. They
read:
To: [Employees Name]
From: Legal Counsel
Subject: Dismissal Upon Union Request Thru
CBA Closed Shop Provision
The company is in receipt of two letters dated March 10, 1992 and
March 19, 1992 respectively from the union at the Mill in Lapulapu
demanding the termination of your employment pursuant to the
closed shop provision of our existing Collective Bargaining
Agreement. It appears from the attached resolutions that you have
been expelled from union membership and has thus ceased to
become a member in good standing. The resolutions are signed by
the same officers who executed and signed our existing CBA,
copies of the letters and resolutions are enclosed hereto for your
reference.
The CBA in Article II provides the following:
Section 3. MAINTENANCE OF MEMBERSHIP All
employees/workers employed by the Company with the exception
of those who are specifically excluded by law and by the terms of
this Agreement must be members in good standing of the Union
within thirty (30) days upon the signing of this agreement and
shall maintain such membership in good standing thereof as a
condition of their employment or continued employment.
Section 6. The Company, upon written request of the Union, shall
terminate the services of any employee/worker who fails to fulfill
the conditions set forth in Sections 3 and 4 thereof, subject
however, to the provisions of the Labor Laws of the Philippines
and their Implementing Rules and Regulations. The Union shall
absolve the Company from any and all liabilities, pecuniary or
otherwise, and responsibilities to any employee or worker who is
dismissed or terminated in pursuant thereof.
The provisions of the CBA are clear enough. The termination of
employment on the basis of the closed shop provision of the CBA
is well recognized in law and in jurisprudence.
There is no valid ground to refuse to terminate. On the other hand
as pointed out in the unions strongly demanding letter dated
March 19, 1992, the company could be sued for unfair labor
practice. While we would have wanted not to accommodate the
unions request, we are left with no other option. The terms of the
CBA should be respected. To refuse to enforce the CBA would
result in the breakdown of industrial peace and the end of
harmonious relations between the union and management. The
company would face the collective anger and enmity of its
employees who are union members.
In the light of the unions very insistent demand, verbal and in
writing and to avoid the union accusation of "coddling" you, and
considering the explicitly mandatory language of the closed shop
provision of the CBA, the company is constrained to terminate
your employment, to give you ample time to look and find another
employment, and/or exert efforts to become again a member of
good standing of your union, effective April 24, 1992.
In the meantime, to prevent serious danger to the life and property
of the company and of its employees, we are placing you under
preventive suspension beginning today.
It is apparent from the aforequoted letter that GMC terminated the
employment of Casio, et al. relying upon the Resolution dated
February 29, 1992 of Pino, et al. expelling Casio, et al. from IBMLocal 31; Gabianas Letters dated March 10 and 19, 1992
demanding that GMC terminate the employment of Casio, et al. on
the basis of the closed shop clause in the CBA; and the threat of
being sued by IBM-Local 31 for unfair labor practice. The letter
made no mention at all of the evidence supporting the decision of
IBM-Local 31 to expel Casio, et al. from the union. GMC never
alleged nor attempted to prove that the company actually looked
into the evidence of IBM-Local 31 for expelling Casio, et al. and
made a determination on the sufficiency thereof. Without such a

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i am destined to be a LAWYER

determination, GMC cannot claim that it had terminated the

employment of Casio, et al. for just cause.
The failure of GMC to make a determination of the sufficiency of
evidence supporting the decision of IBM-Local 31 to expel Casio, et
al. is a direct consequence of the non-observance by GMC of
procedural due process in the dismissal of employees.
As a defense, GMC contends that as an employer, its only duty was
to ascertain that IBM-Local 31 accorded Casio, et al. due process;
and, it is the finding of the company that IBM-Local 31 did give
Casio, et al. the opportunity to answer the charges against them,
but they refused to avail themselves of such opportunity.
This argument is without basis.
The Court has stressed time and again that allegations must be
proven by sufficient evidence because mere allegation is definitely
not evidence.28 Once more, in Great Southern Maritime Services
Corporation. v. Acua,29the Court declared:
Time and again we have ruled that in illegal dismissal cases like
the present one, the onus of proving that the employee was not
dismissed or if dismissed, that the dismissal was not illegal, rests
on the employer and failure to discharge the same would mean
that the dismissal is not justified and therefore illegal. Thus,
petitioners must not only rely on the weakness of respondents
evidence but must stand on the merits of their own defense. A
party alleging a critical fact must support his allegation with
substantial evidence for any decision based on unsubstantiated
allegation cannot stand as it will offend due process. x x x.
(Emphasis supplied.)
The records of this case are absolutely bereft of any supporting
evidence to substantiate the bare allegation of GMC that Casio, et
al. were accorded due process by IBM-Local 31. There is nothing
on record that would indicate that IBM-Local 31 actually notified
Casio, et al. of the charges against them or that they were given the
chance to explain their side. All that was stated in the IBM-Local
31 Resolution dated February 29, 1992, expelling Casio, et al. from
the union, was that "a copy of the said letter complaint [dated
February 24, 1992] was dropped or left in front of E. Casio." 30 It
was not established that said letter-complaint charging Casio, et al.
with acts inimical to the interest of the union was properly served
upon Casio, that Casio willfully refused to accept the said letternotice, or that Casio had the authority to receive the same letternotice on behalf of the other employees similarly accused. Its
worthy to note that Casio, et al. were expelled only five days after
the issuance of the letter-complaint against them. The Court
cannot find proof on record when the three-day period, within
which Casio, et al. was supposed to file their answer or counteraffidavits, started to run and had expired. The Court is likewise
unconvinced that the said three-day period was sufficient for
Casio, et al. to prepare their defenses and evidence to refute the
serious charges against them.
Contrary to the position of GMC, the acts of Pino, et al. as officers
and board members of IBM-Local 31, in expelling Casio, et al. from
the union, do not enjoy the presumption of regularity in the
performance of official duties, because the presumption applies
only to public officers from the highest to the lowest in the service
of the Government, departments, bureaus, offices, and/or its
political subdivisions.31
More importantly, in Liberty Cotton Mills Workers Union v.
Liberty Cotton Mills, Inc.,32 the Court issued the following
reminder to employers:
The power to dismiss is a normal prerogative of the employer.
However, this is not without limitations. The employer is bound to
exercise caution in terminating the services of his employees
especially so when it is made upon the request of a labor union
pursuant to the Collective Bargaining Agreement. x x x. Dismissals
must not be arbitrary and capricious. Due process must be
observed in dismissing an employee because it affects not only his
position but also his means of livelihood. Employers should
therefore respect and protect the rights of their employees, which
include the right to labor. x x x.1avvphi1
The Court reiterated in Malayang Samahan ng mga Manggagawa
sa M. Greenfield v. Ramos33 that:
While respondent company may validly dismiss the employees
expelled by the union for disloyalty under the union security
clause of the collective bargaining agreement upon the
recommendation by the union, this dismissal should not be done
hastily and summarily thereby eroding the employees right to due
process, self-organization and security of tenure. The enforcement
of union security clauses is authorized by law provided such
enforcement is not characterized by arbitrariness, and always with
due process. Even on the assumption that the federation had valid
grounds to expel the union officers, due process requires that these
union officers be accorded a separate hearing by respondent
company. (Emphases supplied.)

The twin requirements of notice and hearing constitute the

essential elements of procedural due process. The law requires the
employer to furnish the employee sought to be dismissed with two
written notices before termination of employment can be legally
effected: (1) a written notice apprising the employee of the
particular acts or omissions for which his dismissal is sought in
order to afford him an opportunity to be heard and to defend
himself with the assistance of counsel, if he desires, and (2) a
subsequent notice informing the employee of the employers
decision to dismiss him. This procedure is mandatory and its
absence taints the dismissal with illegality. 34
Irrefragably, GMC cannot dispense with the requirements of
notice and hearing before dismissing Casio, et al. even when said
dismissal is pursuant to the closed shop provision in the CBA. The
rights of an employee to be informed of the charges against him
and to reasonable opportunity to present his side in a controversy
with either the company or his own union are not wiped away by a
union security clause or a union shop clause in a collective
bargaining agreement. An employee is entitled to be protected not
only from a company which disregards his rights but also from his
own union the leadership of which could yield to the temptation of
swift and arbitrary expulsion from membership and hence
dismissal from his job.35
In the case at bar, Casio, et al. did not receive any other
communication from GMC, except the written notice of
termination dated March 24, 1992. GMC, by its own admission,
did not conduct a separate and independent investigation to
determine the sufficiency of the evidence supporting the expulsion
of Casio, et al. by IBP-Local 31. It straight away acceded to the
demand of IBP-Local 31 to dismiss Casio, et al.
The very same circumstances took place in Liberty Cotton Mills,
wherein the Court held that the employer-company acted in bad
faith in dismissing its workers without giving said workers an
opportunity to present their side in the controversy with their
union, thus:
While respondent company, under the Maintenance of
Membership provision of the Collective Bargaining Agreement, is
bound to dismiss any employee expelled by PAFLU for disloyalty,
upon its written request, this undertaking should not be done
hastily and summarily. The company acted in bad faith in
dismissing petitioner workers without giving them the benefit of a
hearing. It did not even bother to inquire from the workers
concerned and from PAFLU itself about the cause of the expulsion
of the petitioner workers. Instead, the company immediately
dismissed the workers on May 30, 1964 after its receipt of the
request of PAFLU on May 29, 1964 in a span of only one day
stating that it had no alternative but to comply with its obligation
under the Security Agreement in the Collective Bargaining
Agreement, thereby disregarding the right of the workers to due
process, self-organization and security of tenure.36 (Emphasis
ours.)
In sum, the Court finds that GMC illegally dismissed Casio, et al.
because not only did GMC fail to make a determination of the
sufficiency of evidence to support the decision of IBM-Local 31 to
expel Casio, et al., but also to accord the expelled union members
procedural due process, i.e., notice and hearing, prior to the
termination of their employment
Consequently, GMC cannot insist that it has no liability for the
payment of backwages and damages to Casio, et al., and that the
liability for such payment should fall only upon Pino, et al., as the
IBP-Local 31 officers and board members who expelled Casio, et
al. GMC completely missed the point that the expulsion of Casio,
et al. by IBP-Local 31 and the termination of employment of the
same employees by GMC, although related, are two separate and
distinct acts. Despite a closed shop provision in the CBA and the
expulsion of Casio, et al. from IBP-Local 31, law and jurisprudence
imposes upon GMC the obligation to accord Casio, et al.
substantive and procedural due process before complying with the
demand of IBP-Local 31 to dismiss the expelled union members
from service. The failure of GMC to carry out this obligation makes
it liable for illegal dismissal of Casio, et al.
In Malayang Samahan ng mga Manggagawa sa M. Greenfield,37 the
Court held that notwithstanding the fact that the dismissal was at
the instance of the federation and that the federation undertook to
hold the company free from any liability resulting from the
dismissal of several employees, the company may still be held
liable if it was remiss in its duty to accord the would-be dismissed
employees their right to be heard on the matter.
An employee who is illegally dismissed is entitled to the twin
reliefs of full backwages and reinstatement. If reinstatement is not
viable, separation pay is awarded to the employee. In awarding
separation pay to an illegally dismissed employee, in lieu of
reinstatement, the amount to be awarded shall be equivalent to

Page | 27

i am destined to be a LAWYER

one month salary for every year of service. Under Republic Act No.
6715, employees who are illegally dismissed are entitled to full
backwages, inclusive of allowances and other benefits or their
monetary equivalent, computed from the time their actual
compensation was withheld from them up to the time of their
actual reinstatement but if reinstatement is no longer possible, the
backwages shall be computed from the time of their illegal
termination up to the finality of the decision. Thus, Casio, et al. are
entitled to backwages and separation pay considering that
reinstatement is no longer possible because the positions they
previously occupied are no longer existing, as declared by GMC. 38
Casio, et al., having been compelled to litigate in order to seek
redress for their illegal dismissal, are entitled to the award of
attorneys fees equivalent to 10% of the total monetary award. 39
WHEREFORE, the instant petition is hereby DENIED. The
assailed decision of the Court of Appeals dated March 30, 2001 in
CA-G.R. SP No. 40280 is AFFIRMED.
SO ORDERED.

3. Jurisdiction over dismissals on union

security clause

G.R. No. 101619 July 8, 1992

SANYO PHILIPPINES WORKERS UNION-PSSLU LOCAL
CHAPTER NO. 109 AND/OR ANTONIO DIAZ, PSSLU
NATIONAL PRESIDENT, petitioners,
vs.
HON. POTENCIANO S. CANIZARES, in his capacity as Labor
Arbiter, BERNARDO YAP, RENATO BAYBON, SALVADOR
SOLIBEL, ALLAN MISTERIO, EDGARDO TANGKAY,
LEONARDO DIONISIO, ARNEL SALVO, REYNALDO
RICOHERMOSO, BENITO VALENCIA, GERARDO LASALA
AND ALEXANDER ATANASIO, respondents.

MEDIALDEA, J.:
This petition seeks to nullify: 1) the order of respondent Labor
Arbiter Potenciano Caizares dated August 6, 1991 deferring the
resolution of the motion to dismiss the complaint of private
respondents filed by petitioner Sanyo Philippines Workers UnionPSSLU Local Chapter No. 109 (PSSLU, for brevity) on the ground
that the labor arbiter had no jurisdiction over said complaint and 2)
the order of the same respondent clarifying its previous order and
ruling that it had jurisdiction over the case.
The facts of the case are as follows:
PSSLU had an existing CBA with Sanyo Philippines Inc. (Sanyo,
for short) effective July 1, 1989 to June 30, 1994. The same CBA
contained a union security clause which provided:
Sec. 2. All members of the union covered by this
agreement must retain their membership in
good standing in the union as condition of
his/her continued employment with the
company. The union shall have the right to
demand from the company the dismissal of the
members of the union by reason of their
voluntary resignation from membership or willful
refusal to pay the Union Dues or by reasons of
their having formed, organized, joined, affiliated,
supported and/or aided directly or indirectly
another labor organization, and the union thus
hereby guarantees and holds the company free
and harmless from any liability whatsoever that
may arise consequent to the implementation of
the provision of this article. (pp. 5-6, Rollo)
In a letter dated February 7, 1990, PSSLU, through its national
president, informed the management of Sanyo that the following
employees were notified that their membership with PSSLU were
cancelled for anti-union, activities, economic sabotage, threats,
coercion and intimidation, disloyalty and for joining another union:
Benito Valencia, Bernardo Yap, Arnel Salvo, Renato Baybon,

Eduardo Porlaje, Salvador Solibel, Conrado Sarol, Angelito

Manzano, Allan Misterio, Reynaldo Ricohermoso, Mario Ensay
and Froilan Plamenco. The same letter informed Sanyo that the
same employees refused to submit themselves to the union's
grievance investigation committee (p. 53, Rollo). It appears that
many of these employees were not members of PSSLU but of
another union, KAMAO.
On February 14, 1990, some officers of KAMAO, which included
Yap, Salvo, Baybon, Solibel, Valencia, Misterio and Ricohermoso,
executed a pledged of cooperation with PSSLU promising
cooperation with the latter union and among others, respecting,
accepting and honoring the CBA between Sanyo and specifically:
1. That we shall remain officers and members of
KAMAO until we finally decide to rejoin Sanyo
Phil. Workers Union-PSSLU;
2. That henceforth, we support and cooperate
with the duly elected union officers of Sanyo
Phil. Workers Union-PSSLU in any and all its
activities and programs to insure industrial
peace and harmony;
3. That we collectively accept, honor, and
respect the Collective Bargaining Agreement
entered into between Sanyo Phil. Inc. and
Sanyo Phil. Workers Union-PSSLU dated
February 7, 1990;

1. Bernardo Yap
2. Renato Baybon
3. Salvador Solibel
4. Allan Misterio
5. Edgardo Tangkay
6. Leonardo Dionisio
7. Arnel Salvo
8. Reynaldo Ricohermoso
9. Benito Valencia

4 That we collectively promise not to engage in

any activities inside company premises contrary
to law, the CBA and existing policies;

10. Gerardo Lasala

5 That we are willing to pay our individual

agency fee in accordance with the provision of
the Labor Code, as amended;

The above listed employees shall not be

allowed within company premises without the
permission of management.

6 That we collectively promise not to violate this

pledge of cooperation. (p. 55, Rollo)

As per request of the union's letter to

management, should the listed employees fail to
appeal the decision of the union for dismissal,
then effective March 23, 1991, said listed
employees shall be considered dismissed from
the company. (p 39, Rollo)

On March 4, 1991, PSSLU through its national and local

presidents, wrote another letter to Sanyo recommending the
dismissal of the following non-union workers: Bernardo Yap, Arnel
Salvo, Renato Baybon, Reynaldo Ricohermoso, Salvador Solibel,
Benito Valencia, and Allan Misterio, allegedly because: 1) they
were engaged and were still engaging in anti-union activities; 2)
they willfully violated the pledge of cooperation with PSSLU which
they signed and executed on February 14, 1990; and 3) they
threatened and were still threatening with bodily harm and even
death the officers of the union (pp. 37-38, Rollo).
Also recommended for dismissal were the following union
members who allegedly joined, supported and sympathized with a
minority union, KAMAO: Gerardo Lasala, Legardo Tangkay,
Alexander Atanacio, and Leonardo Dionisio.
The last part of the said letter provided:
The dismissal of the above-named union
members is without prejudice to receive (sic)
their termination pay if management decide (sic)
to grant them benefits in accordance with law.
The union hereby holds the company free and
harmless from any liability that may arise
consequent to the implementation by the
company of our recommendations for the
dismissal of the above-mentioned workers.
It is however suggested that the Grievance
Machinery be convened pursuant to Section 3,
Article XV of the Collective Bargaining
Agreement (CBA) before their actual dismissal
from the company. (p. 38, Rollo)
Pursuant to the above letter of the union, the company sent a
memorandum to the same workers advising them that:

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As per the attached letter from the local union

President SPWU and the federation President,
PSSLU, requesting management to put the
herein mentioned employees on preventive
suspension, effective immediately, preliminary to
their subsequent dismissal, please be informed
that the following employees are under
preventive suspension effective March 13, 1991
to wit:

i am destined to be a LAWYER

11. Alexander Atanacio

The company received no information on whether or not said

employees appealed to PSSLU. Hence, it considered them
dismissed as of March 23, 1991 (p. 40, Rollo).
On May 20, 1991, the dismissed employees filed a complaint (pp.
32-35, Rollo) with the NLRC for illegal dismissal. Named
respondent were PSSLU and Sanyo.
On June 20, 1991, PSSLU filed a motion to dismiss the complaint
alleging that the Labor Arbiter was without jurisdiction over the
case, relying on Article 217 (c) of P.D. 442, as amended by
Section 9 of Republic Act No. 6715 which provides that cases
arising from the interpretation or implementation of the collective
bargaining agreements shall be disposed of by the labor arbiter by
referring the same to the grievance machinery and voluntary
arbitration.
The complainants opposed the motion to dismiss complaint on
these grounds: 1) the series of conferences before the National
Conciliation and Mediation Board had been terminated; 2) the
NLRC Labor Arbiter had jurisdiction over the case which was a
termination dispute pursuant to Article 217 (2) of the Labor Code;
and 3) there was nothing in the CBA which needs interpretation or
implementation (pp. 44-46, Rollo).
On August 7, 1991, the respondent Labor Arbiter issued the first
questioned order. It held that:
xxx xxx xxx
While there are seemingly contradictory
provisions in the aforecited article of the Labor

Code, the better interpretation will be to give

effect to both, and termination dispute being
clearly spelled as falling under the jurisdiction of
the Labor Arbiter, the same shall be respected.
The jurisdiction of the grievance machinery and
voluntary arbitration shall cover other
controversies.
However, the resolution of the instant issue shall
be suspended until both parties have fully
presented their respective positions and the said
issue shall be included in the final determination
of the above-captioned case.
WHEREFORE, the instant Motions to Dismiss
are hereby held pending.
Consequently, the parties are hereby directed to
submit their position papers and supporting
documents pursuant to Section 2, Rule VII of
the Rules of the Commission on or before the
hearing on the merit of this case scheduled on
August 29, 1991 at 11:00 a.m. (p. 23, Rollo)
On August 27, 1991, PSSLU filed another motion to resolve
motion to dismiss complaint with a prayer that the Labor Arbiter
resolve the issue of jurisdiction.

For its part, public respondent, through the Office of the Solicitor
General, is of the view that a distinction should be made between
a case involving "interpretation or implementation of collective
bargaining agreement or "interpretation" or "enforcement" of
company personnel policies, on the one hand and a case involving
termination, on the other hand. It argued that the case at bar does
not involve an "interpretation or implementation" of a collective
bargaining agreement or "interpretation or enforcement" of
company policies but involves a "termination." Where the dispute
is just in the interpretation, implementation or enforcement stage,
it may be referred to the grievance machinery set up in the CBA or
by voluntary arbitration. Where there was already actual
termination, i.e., violation of rights, it is already cognizable by the
Labor Arbiter.
Article 217 of the Labor Code defines the jurisdiction of the Labor
Arbiter.
Art. 217. Jurisdiction of Labor Arbiters and the
Commission. a) Except as otherwise provided
under this Code the Labor Arbiters shall have
original and exclusive jurisdiction to hear and
decide within thirty (30) calendar days after the
submission of the case by the parties for
decision without extension even in the absence
of stenographic notes, the following cases
involving all workers, whether agricultural or
non-agricultural:

On September 4, 1991, the respondent Labor Arbiter issued the

second questioned order which held that it was assuming
jurisdiction over the complaint of private respondents, in effect,
holding that it had jurisdiction over the case.

1. Unfair labor practice cases;

On September 19, 1991, PSSLU filed this petition alleging that

public respondent Labor Arbiter cannot assume jurisdiction over
the complaint of public respondents because it had no jurisdiction
over the dispute subject of said complaint. It is their submission
that under Article 217 (c) of the Labor Code, in relation to Article
261 thereof, as well as Policy Instruction No. 6 of the Secretary of
Labor, respondent Arbiter has no jurisdiction and authority to take
cognizance of the complaint brought by private respondents which
involves the implementation of the union security clause of the
CBA. The function of the Labor Arbiter under the same law and
rule is to refer this case to the grievance machinery and voluntary
arbitration.

3. If accompanied with a claim for reinstatement,

those cases that workers may file involving
wages, rates of pay, hours of work and other
terms and conditions of employment;

In its comment, private respondents argue that Article 217(a) 2

and 4 of the Labor Code is explicit, to wit:

6. Except claims for Employees Compensation,

Social Security, Medicare and maternity
benefits, all other claims, arising from employeremployee relations, including those of persons
in domestic or household service, involving an
amount exceeding five thousand pesos
(P5,000.00) regardless of whether accompanied
with a claim for reinstatement.

Art. 217. Jurisdiction of the Labor Arbiters and

the Commission.
a) Except as otherwise provided under this
Code, the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide . . . the
following cases involving all workers, . . . :
xxx xxx xxx
2) Termination disputes,
xxx xxx xxx
4) Claims for actual, moral, exemplary and other
forms of damages arising from the employeremployee relations.
The private respondents also claimed that insofar as Salvo,
Baybon, Ricohermoso, Solibel, Valencia, Misterio and Lasala were
concerned, they joined another union, KAMAO during the freedom
period which commenced on May 1, 1989 up to June 30, 1989 or
before the effectivity of the July 1, 1989 CBA. Hence, they are not
covered by the provisions of the CBA between Sanyo and PSSLU.
Private respondents Tangkay, Atanacio and Dionisio admit that in
September 1989, they resigned from KAMAO and rejoined PSSLU
(pp.
66(a)-68, Rollo).

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i am destined to be a LAWYER

2. Termination disputes;

4. Claims for actual, moral, exemplary and other

forms of damages arising from the employeremployee relations;
5. Cases arising from any violation of Article 264
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.
(c) Cases arising from the interpretation or
implementation of collective bargaining
agreements and those arising from the
interpretation or enforcement of company
personnel policies shall be disposed of by the
Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitration
as may be provided in said agreements.
It is clear from the above article that termination cases fall under
the jurisdiction of the Labor Arbiter. It should be noted however
that said article at the outset excepted from the said provision
cases otherwise provided for in other provisions of the same
Code, thus the phrase "Except as otherwise provided under this
Code . . . ." Under paragraph (c) of the same article, it is expressly
provided that "cases arising from the interpretation or
implementation of collective bargaining agreements and those
arising from the interpretation and enforcement of company
personnel policies shall be disposed of by the Labor Arbiter by

referring the same to the grievance machinery and voluntary

arbitration as may be provided in said agreements.
It was provided in the CBA executed between PSSLU and Sanyo
that a member's voluntary resignation from membership, willful
refusal to pay union dues and his/her forming, organizing, joining,
supporting, affiliating or aiding directly or indirectly another labor
union shall be a cause for it to demand his/her dismissal from the
company. The demand for the dismissal and the actual dismissal
by the company on any of these grounds is an enforcement of the
union security clause in the CBA. This act is authorized by law
provided that enforcement should not be characterized by
arbitrariness (Manila Mandarin Employee Union v. NLRC, G.R.
No. 76989, 29 Sept. 1987, 154 SCRA 368) and always with due
process (Tropical Hut Employees Union v. Tropical Food Market,
Inc., L-43495-99, Jan. 20, 1990).
The reference to a Grievance Machinery and Voluntary Arbitrators
for the adjustment or resolution of grievances arising from the
interpretation or implementation of their CBA and those arising
from the interpretation or enforcement of company personnel
policies is mandatory. The law grants to voluntary
arbitrators original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement and those
arising from the interpretation or enforcement of company
personnel policies (Art. 261, Labor Code).
In its order of September 4, 1991, respondent Labor Arbiter
explained its decision to assume jurisdiction over the complaint,
thus:
The movants failed to show (1) the provisions of
the CBA to be implemented, and (2) the
grievance machinery and voluntary arbitrator
already formed and properly named. What selfrespecting judge would refer a case from his
responsibility to a shadow? To whom really and
specifically shall the case be indorsed or
referred? In brief, they could have shown the (1)
existence of the grievance machinery and (2) its
being effective.
Furthermore, the aforecited law merely directs
the "referral" cases. It does not expressly confer
jurisdiction on the grievance machinery or
voluntary arbitration panel, created or to be
created. Article 260 of the Labor Code describes
the formation of the grievance and voluntary
arbitration. All this of course shall be on
voluntary basis. Is there another meaning of
voluntary arbitration? (The herein complainant
have strongly opposed the motion to dismiss.
Would they go willingly to the grievance
machinery and voluntary arbitration which are
installed by their opponents if directed to do
so?) (p. 26, Rollo)
The failure of the parties to the CBA to establish the grievance
machinery and its unavailability is not an excuse for the Labor
Arbiter to assume jurisdiction over disputes arising from the
implementation and enforcement of a provision in the CBA. In the
existing CBA between PSSLU and Sanyo, the procedure and
mechanics of its establishment had been clearly laid out as
follows:

management to be represented by the

Management's authorized representatives on
the one hand, and the Union to be represented
by a committee composed of the local union
president and one of the local union officer
appointed by the local union president, on the
other hand within three days from date of
concurrence of grievance action. In the absence
of the local union president, he (shall) appoint
another local union officer to take over in his
behalf. Where a controversy personally affects
an employee, he shall not be allowed to be a
member of the committee represented by the
union.
Second step. (Thru Arbitrator mutually chosen)
Should such dispute remain unsettled after
twenty (20) days from the first conference or
after such period as the parties may agree upon
in specified cases, it shall be referred to an
arbitrator chosen by the consent of the company
and the union. In the event of failure to agree on
the choice of voluntary arbitrator, the National
Conciliation and Mediation Board, Department
of Labor and Employment shall be requested to
choose an Arbitrator in accordance with
voluntary arbitration procedures.
Sec. 2. The voluntary Arbitrator shall have thirty
(30) days to decide the issue presented to him
and his decision shall be final, binding and
executory upon the parties. He shall have no
authority to add or subtract from and alter any
provision of this agreement. The expenses of
voluntary arbitration including the fee of the
arbitrator shall be shared equally by the
company and the union. In the event the
arbitrator chosen either by the mutual
agreement of the company and the union by
(the) way of voluntary arbitration or by the
National Conciliation and Mediation Board
(NCMB) failed to assume his position, died,
become disabled or any other manner failed to
function and or reach a decision, the company
and the union shall by mutual agreement
choose another arbitrator; in the event of failure
to agree on the choice of a new voluntary
arbitrator, the matter shall again be referred
back to the NCMB who shall be requested again
to choose a new arbitrator as above provided.
Any grievance not elevated or processed as
above provided within the stipulated period shall
be deemed settled and terminated.
Sec. 3. It is hereby agreed that decisions of the
union relative to their members, for
implementation by the COMPANY, should be
resolved for review thru the Grievance
Machinery; and management be invited to
participate in the Grievance procedure to be
undertaken by the union relative to (the) case of
the union against members. (pp. 134-135, Rollo)
All that needs to be done to set the machinery into motion is to call
for the convening thereof. If the parties to the CBA had not
designated their representatives yet, they should be ordered to do
so.

ARTICLE XV GRIEVANCE MACHINERY

Sec. 1. Whenever any controversy should arise
between the company and the union as to the
interpretation or application of the provision of
this agreement, or whenever any difference
shall exist between said parties relative to the
terms and conditions of employment, an earnest
effort shall be made to settle such controversy in
substantially the following manner:
First step. (Thru Grievance) The dispute shall
initially be resolved by conference between the

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The procedure introduced in RA 6715 of referring certain

grievances originally and exclusively to the grievance machinery
and when not settled at this level, to a panel of voluntary
arbitrators outlined in CBA's does not only include grievances
arising from the interpretation or implementation of the CBA but
applies as well to those arising from the implementation of
company personnel policies. No other body shall take cognizance
of these cases. The last paragraph of Article 261 enjoins other
bodies from assuming jurisdiction thereof:
The commission, its Regional Offices and the
Regional Directors of the Department of Labor

and Employment shall not entertain disputes,

grievances or matters under the exclusive and
original jurisdiction of the Voluntary Arbitrator or
panel of voluntary arbitrators and shall
immediately dispose and refer the same to the
grievance machinery or voluntary arbitration
provided in the Collective Bargaining
Agreement.
In the instant case, however, We hold that the Labor Arbiter and
not the Grievance Machinery provided for in the CBA has the
jurisdiction to hear and decide the complaints of the private
respondents. While it appears that the dismissal of the private
respondents was made upon the recommendation of PSSLU
pursuant to the union security clause provided in the CBA, We are
of the opinion that these facts do not come within the phrase
"grievances arising from the interpretation or implementation of
(their) Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies," the
jurisdiction of which pertains to the Grievance Machinery or
thereafter, to a voluntary arbitrator or panel of voluntary arbitrators.
Article 260 of the Labor Code on grievance machinery and
voluntary arbitrator states that "(t)he parties to a Collective
Bargaining Agreement shall include therein provisions that will
ensure the mutual observance of its terms and conditions. They
shall establish a machinery for the adjustment and resolution of
grievances arising from the interpretation or implementation of
their Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies." It is
further provided in said article that the parties to a CBA shall name
or designate their respective representatives to the grievance
machinery and if the grievance is not settled in that level, it shall
automatically be referred to voluntary arbitrators (or panel of
voluntary arbitrators) designated in advance by the parties. It need
not be mentioned that the parties to a CBA are the union and the
company. Hence, only disputes involving the union and the
company shall be referred to the grievance machinery or voluntary
arbitrators.
In the instant case, both the union and the company are united or
have come to an agreement regarding the dismissal of private
respondents. No grievance between them exists which could be
brought to a grievance machinery. The problem or dispute in the
present case is between the union and the company on the one
hand and some union and non-union members who were
dismissed, on the other hand. The dispute has to be settled before
an impartial body. The grievance machinery with members
designated by the union and the company cannot be expected to
be impartial against the dismissed employees. Due process
demands that the dismissed workers grievances be ventilated
before an impartial body. Since there has already been an actual
termination, the matter falls within the jurisdiction of the Labor
Arbiter.
ACCORDINGLY, the petition is DISMISSED. Public respondent
Labor Arbiter is directed to resolve the complaints of private
respondents immediately.
SO ORDERED.

HERNANI ABOROT, CARLITO

CHOSAS, VALERIANO MAUBAN,
RENAN
HALILI,
MANOLITO
CUSTODIO, NONILON DAWAL,
RICARDO ESCUETA, SEVERINO
ROSETE,
ERNESTO
LITADA,
ERNESTO BARENG, BONIFACIO
URBANO,
VICENTE SANTOS,
MARIO
CREDO,
BERNABE
GERONIMO, ERNESTO BANAY,
PASTOR
VELUZ,
RICARDO
CUEVAS, FELOMENO BALLON,
ORLANDO MENDOZA, ANICETO
ARBAN, GERONIMO ESPLANA,
VICENTE
CHAVEZ,
STEVE
VELECINA, and RICARDO B.
VENTURA, petitioners,
vs.
NATIONAL LABOR RELATIONS
COMMISSION and PHILTREAD
(FIRESTONE) TIRE AND RUBBER
CORPORATION,respondents.
DECISION
ROMERO, J.:

Petitioners, all former employees of

private respondent Philtread (Firestone) Tire
and Rubber Corporation (Philtread, for
brevity), impute grave abuse of discretion
on
the
National
Labor
Relations
Commission (NLRC) for issuing two
resolutions, dated April 7, 1993, and
November 18, 1992, which reconsidered a
resolution it rendered on April 15,
1992. They allege that its resolution of April
15, 1992 became final and executory when
Philtread failed to seasonably file a motion
for reconsideration within the ten-day
reglementary period required by Article 223
of the Labor Code.
[1]

The record unfolds the following facts:

[G.R. No. 110226. June 19, 1997]

ALBERTO S. SILVA, EDILBERTO VIRAY,

ANGELES BARON, CEFERINO
ROMERO,
JAIME
ACEVEDO,
RODOLFO JUAN, ANDREW DE LA
ISLA, BAYANI PILAR, ULDARICO
GARCIA, ANANIAS HERMOCILLA,
WALLY
LEONES,
PABLO
ALULOD, RODOLFO MARIANO,
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Sometime in 1985, petitioners, then

rank-and-file employees and members of
Philtread
Workers
Union
(PWU),
volunteered for, and availed of, the
retrenchment
program
instituted
by
Philtread with the understanding that they
would have priority in re-employment in the
event that the company recovers from its
financial crisis, in accordance with Section
4, Article III of the Collective Bargaining
Agreement concluded on July 5, 1983.
[2]

In November 1986, Philtread, apparently

having recovered from its financial reverses,
expanded its operations and hired new
personnel. Upon
discovery
of
this
development,
petitioners
filed
their
respective applications for employment with
Philtread, which however, merely agreed to
consider
them
for
future
vacancies. Subsequent demands for reemployment made by petitioners were
ignored. Even the request of the incumbent
union for Philtread to stop hiring new
personnel until petitioners were first hired
failed to elicit any favorable response.
Thus, on December 5, 1988, petitioners
lodged a complaint with the National
Capital Region Arbitration Branch of the
NLRC for unfair labor practice (ULP),
damages and attorneys fees against
Philtread.
[3]

Both parties submitted their respective

position papers. On its part, Philtread
moved for the dismissal of the complaint
based on two grounds, namely: (1) that the
NLRC lacked jurisdiction, there being no
employer-employee relationship between it
and petitioners and that the basic issue
involved was the interpretation of a contract,
the CBA, which was cognizable by the
regular courts; and (2) that petitioners had
nolocus standi, not being privy to the CBA
executed between the union and Philtread.
Petitioners,
however,
challenging
Philtreads motion to dismiss, stressed that
the complaint was one for unfair labor
practice precipitated by the unjust and
unreasonable refusal of Philtread to reemploy them, as mandated by the
provisions of Section 4, Article III of the
1986 and 1983 CBAs. Being one for unfair
labor practice, petitioners concluded that the
NLRC had jurisdiction over the case,
pursuant to Article 217 (a) (1) of the Labor
Code.
On August 31, 1989, Labor Arbiter
Edgardo M. Madriaga rendered a decision
dismissing the complaint but directing
Philtread to give petitioners priority in hiring,
as well as those former employees similarly
situated for available positions provided
they
meet
the
necessary
current
qualifications. In dismissing the complaint,
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i am destined to be a LAWYER

the Labor Arbiter, however, did not tackle

the jurisdictional issue posed by Philtread in
its position paper. Instead, he dwelt solely
on the question whether the petitioners
were entitled to priority in re-employment on
the basis of the CBA.
Petitioners duly appealed the decision of
the Labor Arbiter to the NLRC. Philtread
opted not to interpose an appeal despite the
Labor Arbiters failure to rule squarely on the
question of jurisdiction.
On April 15, 1992, the NLRC issued a
resolution reversing the decision of the
Labor Arbiter. It directed Philtread to reemploy petitioners and other employees
similarly situated, regardless of age
qualifications and other pre-employment
conditions, subject only to existing
vacancies and a finding of good physical
condition. This resolution was received by
Atty. Abraham B. Borreta of the law firm of
Borreta, Gutierrez and Leogardo on May 5,
1992, as shown by the bailiffs return.
Subsequently, Atty. Borreta filed with the
NLRC on
May
20,
1992, an ex
parte manifestation explaining that he was
returning the copy of the resolution
rendered on April 15, 1992, which,
according to him, was erroneously served
on him by the process server of the
NLRC. He alleged that in the several
conciliation conferences held, it was Atty.
Daniel C. Gutierrez who exclusively handled
the case on behalf of Philtread and informed
the Labor Arbiter and petitioners that the law
firm of Borreta, Gutierrez and Leogardo had
already been dissolved.
Being of the impression that the April 15,
1992 resolution of the NLRC had been
properly served at the address of the law
firm of Atty. Gutierrez and that no
seasonable motion for reconsideration was
ever filed by Philtread, petitioners moved for
its execution.
On November 18, 1992, the NLRC,
acting on a motion for reconsideration filed
by Atty. Gutierrez, promulgated one of its
challenged resolutions dismissing the
complaint of petitioners. It ruled that while
petitioners had standing to sue, the
complaint should have been filed with the
voluntary arbitrator, pursuant to Article 261

of the Labor Code, since the primary issue to still allow reconsideration of its April 15,
was the implementation and interpretation 1992 resolution.
of the CBA.
The petition is impressed with merit.
Dismayed by the NLRCs sudden
Time and again, this Court has been
change of position, petitioners immediately
emphatic in ruling that the seasonable filing
moved for reconsideration. They pointed
of a motion for reconsideration within the
out that the NLRCs reliance on Article 261
10-day reglementary period following the
of the Labor Code was patently erroneous
receipt by a party of any order, resolution or
because it was the amended provision
decision of the NLRC, is a mandatory
which was being cited by the NLRC. They
requirement to forestall the finality of such
added that the amendment of Article 261
order, resolution or decision. The statutory
introduced by Republic Act No. 6715 took
bases for this is found in Article 223 of the
effect only on March 21, 1989, or after the
Labor Code and Section 14, Rule VII of the
filing of the complaint on December 5,
New Rules of Procedure of the National
1988. This being the case, petitioners
Labor Relations Commission.
argued that the subsequent amendment
In the case at bar, it is uncontroverted
cannot retroactively divest the Labor Arbiter
of the jurisdiction already acquired in that Philtreads counsel filed a motion for
accordance with Articles 217 and 248 of the reconsideration of the April 15, 1992
Labor Code. Petitioners further stressed resolution only on June 5, 1992, or 31 days
that the resolution of April 15, 1992, had after receipt of said resolution. It was thus
already become final and executory since incumbent upon the NLRC to have
Philtreads counsel of record did not file any dismissed outright Philtreads late motion for
motion for reconsideration within the period reconsideration. By doing exactly the
of ten (10) days from receipt of the opposite, its actuation was not only
whimsical and capricious but also a
resolution on May 5, 1992.
demonstration of its utter disregard for its
The NLRC, however, was not convinced
very own rules. Certiorari, therefore, lies.
by petitioners assertions. In another
To be sure, it is settled doctrine that the
resolution issued on April 7, 1993, it affirmed
its earlier resolution dated November 18, NLRC, as an administrative and quasi1992, ruling that even before the judicial body, is not bound by the rigid
amendatory law took effect, matters application of technical rules of procedure in
involving bargaining agreements were the conduct of its proceedings. However,
already within the exclusive jurisdiction of the filing of a motion for reconsideration and
the voluntary arbitrator, as set forth in Article filing it ON TIME are not mere technicalities
262 of the Labor Code. Hence, this petition. of procedure. These are jurisdictional and
mandatory requirements which must be
As stated at the outset, petitioners fault
strictly complied with. Although there are
the NLRC for issuing the assailed
exceptions to said rule, the case at bar
resolutions even when the resolution sought
presents
no
peculiar
circumstances
to be reconsidered had already attained
warranting a departure therefrom.
finality upon Philtreads failure to timely
The Court is aware of Philtreads
move for its reconsideration. They posit
that since the bailiffs return indicated May obvious attempt to skirt the requirement for
5, 1992, as the date of receipt of the April seasonable filing of a motion for
15, 1992 resolution by the law firm of reconsideration by persuading us that both
Borreta, Gutierrez and Leogardo, Philtreads the Labor Arbiter and the NLRC have no
over
petitioners
counsel of record, then Philtread only had jurisdiction
ten (10) calendar days or until May 15, complaint. Jurisdiction, Philtread claims,
1992, within which to file a motion for lies instead with the voluntary arbitrator so
reconsideration. Since
Philtread that when the Labor Arbiter and the NLRC
indisputably failed to file any such motion took cognizance of the case, their decisions
within said period, petitioners deemed it thereon were null and void and, therefore,
highly irregular and capricious for the NLRC incapable of attaining finality. In short,
[5]

[6]

[7]

[8]

[9]

[10]

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i am destined to be a LAWYER

Philtread maintains that the ten-day

reglementary period could not have started
running and, therefore, its motion could not
be considered late.
The argument is not tenable. While we
agree with the dictum that a void judgment
cannot attain finality, said rule, however, is
only relevant if the tribunal or body which
takes cognizance of a particular subject
matter indeed lacks jurisdiction over the
same. In this case, the rule adverted to is
misapplied for it is actually the Labor Arbiter
and the NLRC which possess jurisdiction
over petitioners complaint and NOT the
voluntary
arbitrator,
as
erroneously
contended by Philtread.
In this regard, we observe that there is a
confusion in the minds of both Philtread and
the NLRC with respect to the proper
jurisdiction of the voluntary arbitrator. They
appear to share the view that once the
question involved is an interpretation or
implementation of CBA provisions, which in
this case is the re-employment clause, then
the same necessarily falls within the
competence of the voluntary arbitrator
pursuant to Article 261 of the Labor Code.
Respondents posture is too simplistic
and finds no support in law or in
jurisprudence. When the issue concerns an
interpretation or implementation of the CBA,
one cannot immediately jump to the
conclusion that jurisdiction is with the
voluntary arbitrator. There is an equally
important need to inquire further if the
disputants involved are the union and the
employer; otherwise, the voluntary arbitrator
cannot assume jurisdiction. To this effect
was the ruling of the Court in Sanyo
Philippines Workers Union - PSSLU v.
Canizares, where
we
clarified
the
jurisdiction of the voluntary arbitrator in this
manner:

within the phrase grievances arising from the

interpretation or implementation of (their)
Collective Bargaining Agreement and those
arising from the interpretation or enforcement of
company personnel policies, the jurisdiction of
which pertains to the Grievance Machinery or
thereafter, to a voluntary arbitrator or panel of
voluntary arbitrators. Article 260 of the Labor
Code on grievance machinery and voluntary
arbitrator states that (t)he parties to a Collective
Bargaining Agreement shall include therein
provisions that will ensure the mutual
observance of its terms and conditions. They
shall establish a machinery for the adjustment
and resolution of grievances arising from the
interpretation or implementation of their
Collective Bargaining Agreement and those
arising from the interpretation or enforcement of
company personnel policies. It is further
provided in said article that the parties to a CBA
shall name or designate their respective
representatives to the grievance machinery and if
the grievance is not settled in that level, it shall
automatically be referred to voluntary arbitrators
(or panel of voluntary arbitrators) designated in
advance by the parties. It need not be mentioned
that the parties to a CBA are the union and the
company. Hence, only disputes involving the
union and the company shall be referred to the
grievance machinery or voluntary
arbitrators. (Underscoring supplied)
Since the contending parties in the
instant case are not the union and Philtread,
then pursuant to the Sanyo doctrine, it is not
the voluntary arbitrator who can take
cognizance
of
the
complaint,
notwithstanding Philtreads claim that the
real issue is the interpretation of the CBA
provision on re-employment.

The
Court,
however, does
not
write finis to
the
discussion. A more
important question arises: If the voluntary
arbitrator could not have assumed
jurisdiction over the case, did the Labor
Arbiter and the NLRC validly acquire
In the instant case, however, We hold that the
Labor Arbiter and not the Grievance Machinery jurisdiction when both of them entertained
the complaint?
provided for in the CBA has the jurisdiction to
hear and decide the complaints of the private
A brief review of relevant statutory
respondents. While it appears that the dismissal
provisions is in order.
of the private respondents was made upon the
We note that at the time petitioners filed
recommendation of PSSLU pursuant to the
union security clause provided in the CBA, We their complaint for unfair labor practice,
damages and attorneys fees on December
are of the opinion that these facts do not come
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i am destined to be a LAWYER

5, 1988, the governing provision of the

Labor Code with respect to the jurisdiction
of the Labor Arbiter and the NLRC was
Article 217 which states:
ART. 217. Jurisdiction of Labor
Arbiters and the Commission. (a) The
Labor Arbiters shall have the original and
exclusive jurisdiction to hear and decide
within thirty (30) working days after
submission of the case by the parties for
decision, the following cases involving all
workers, whether agricultural or nonagricultural:
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.

ART. 262. Voluntary arbitration. - All grievances

referred to in the immediately preceding Article
which are not settled through the grievance
procedure provided in the collective agreement
shall be referred to voluntary arbitration
prescribed in said agreement: Provided, That
termination disputes shall be governed by Article
278 of this Code, as amended, unless the parties
agree to submit them to voluntary arbitration.
Under the above provisions then
prevailing, one can understand why
petitioners lodged their complaint for ULP
with the Labor Arbiter. To their mind,
Philtreads refusal to re-employ them was
tantamount to a violation of the reemployment clause in the 1983 CBA which
was also substantially reproduced in the
1986 CBA. At the time, any violation of the
CBA was unqualifiedly treated as ULP of the
employer falling within the competence of
the Labor Arbiter to hear and decide. Thus:
ART. 248. Unfair labor practices of
employers. - It shall be unlawful for an
employer to commit any of the following
unfair labor practice:
x

x
x
x

x
xxx

(i) To violate a collective bargaining

agreement.

On March 21, 1989, however, Republic

Act 6715, or the so-called Herrera-Veloso
Articles 261 and 262, on the other hand, Amendments, took effect, amending
defined the jurisdiction of the voluntary several provisions of the Labor Code,
arbitrator, viz.:
including the respective jurisdictions of the
Labor Arbiter, the NLRC and the voluntary
ART. 261. Grievance machinery. - Whenever a
arbitrator. As
a
result, the
present
grievance arises from the interpretation or
jurisdiction of the Labor Arbiter and the
implementation of a collective
NLRC is as follows:
agreement, including disciplinary actions
imposed on members of the bargaining unit, the ART. 217. Jurisdiction of Labor Arbiters and
employer and the bargaining representative shall the Commission. - (a) Except as otherwise
meet to adjust the grievance. Where there is no provided under this Code the Labor Arbiters shall
collective agreement and in cases where the
have original and exclusive jurisdiction to hear
grievance procedure as provided herein does not and decide, within thirty (30) calendar days after
apply, grievances shall be subject to negotiation, the submission of the case by the parties for
conciliation or arbitration as provided elsewhere decision without extension, even in the absence
in this Code.
of stenographic notes, the following cases
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i am destined to be a LAWYER

involving all workers, whether agricultural or

non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for
reinstatement, those cases that
workers may file involving
wages, rates of pay, hours of work
and other terms and conditions of
employment;
4. Claims for actual, moral,
exemplary and other forms of
damages arising from the
employer-employee relations;
5. Cases arising from any
violation of Article 264 of this
Code, including questions
involving the legality of strikes
and lockouts; and
6. Except claims for Employees
Compensation, Social Security,
Medicare and maternity benefits, all
other claims, arising from employeremployee relations, including those of
persons in domestic or household
service, involving an amount exceeding
five thousand pesos (P5,000.00)
regardless of whether accompanied with
a claim for reinstatement.

arising from the interpretation or enforcement of

company personnel policies referred to in the
immediately
preceding article. Accordingly, violations of a
Collective Bargaining Agreement, except those
which are gross in character, shall no longer be
treated as unfair labor practice and shall be
resolved as grievances under the Collective
Bargaining Agreement. For purposes of this
article, gross violations of Collective Bargaining
Agreement shall mean flagrant and/or malicious
refusal to comply with the economic provisions
of such agreement. x x x. (Underscoring
supplied)
ART. 262. Jurisdiction over other labor
disputes. - The Voluntary Arbitrator or panel of
Voluntary Arbitrators, upon agreement of the
parties, shall also hear and decide all other labor
disputes including unfair labor practices and
bargaining deadlocks.

With the amendments introduced by RA

6715, it can be gleaned that the Labor
Arbiter still retains jurisdiction over ULP
cases. There is, however, a significant
change:
The
unqualified
jurisdiction
conferred upon the Labor Arbiter prior to the
amendment by RA 6715 has been narrowed
down so that violations of a Collective
Bargaining Agreement, except those which
(b) The Commission shall
are gross in character, shall no longer be
have exclusive appellate
treated as unfair labor practice but as
jurisdiction over all cases
grievances under the Collective Bargaining
decided by Labor Arbiters.
Agreement. It is further stated that gross
violations
of
Collective
Bargaining
(c) Cases arising from the interpretation or
Agreement shall mean flagrant and/or
implementation of collective bargaining
malicious refusal to comply with the
agreements and those arising from the
economic
provisions
of
such
interpretation or enforcement of company
agreement. Hence, for a ULP case to be
personnel policies shall be disposed of by the
cognizable by the Labor Arbiter, and the
Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitration as NLRC to exercise its appellate jurisdiction,
the allegations in the complaint should
may be provided in said agreements.
showprima facie the concurrence of two
while that of the voluntary arbitrator is things, namely: (1) gross violation of the
CBA; AND (2) the violation pertains to the
defined in this wise:
economic provisions of the CBA.
ART. 261. Jurisdiction of Voluntary Arbitrators
In several instances prior to the instant
or panel of Voluntary Arbitrators. - The Voluntary case, the Court already made its
Arbitrator or panel of Voluntary Arbitrators shall pronouncement that RA 6715 is in the
have original and exclusive jurisdiction to hear
nature of a curative statute. As such, we
and decide all unresolved grievances arising from declared that it can be applied retroactively
the interpretation or implementation of the
to pending cases. Thus, in Briad Agro
Collective Bargaining Agreement and those
Page | 36

i am destined to be a LAWYER

Development Corporation v. Dela Cerna, make it cognizable by the Labor Arbiter and
we held:
the
NLRC. Unsubstantiated conclusions
of bad faith and unjustified refusal to reRepublic Act No. 6715, like its predecessors,
employ petitioners, to our mind, do not
Executive Order No. 111 and Article 217, as
constitute gross violation of the CBA for
amended, has retroactive application. Thus,
purposes of lodging jurisdiction with the
when this new law divested Regional Directors Labor Arbiter and the NLRC. Although
of the power to hear money claims, the
evidentiary matters are not required (and
divestment affected pending litigations. It also
even discouraged) to be alleged in a
affected this particular case. (Note that under
complaint, still, sufficient details supporting
par. 6, where the claim does not
the conclusion of bad faith and unjust
exceed P5,000.00, regional directors have
refusal to re-employ petitioners must be
jurisdiction).
indicated. Furthermore, it is even doubtful if
the
CBA
provision on reIn Garcia v. Martinez, we categorically held that employment fits into the accepted notion
amendments relative to the jurisdiction of labor of
an
economic
provision of
the
arbiters (under Presidential Decree No. 1367,
CBA. Thus,
given
the
foregoing
divesting the labor arbiter of jurisdiction)
considerations, may the Briad doctrine be
partake of the nature of curative statutes, thus:
applied to the instant case and cause its
dismissal for want of jurisdiction of the
It now appears that at the time this case was
Labor Arbiter and the NLRC?
decided the lower court had jurisdiction over
Upon a careful and meticulous study
Velascos complaint although at the time it was
of Briad, the Court holds that the rationale
filed said court was not clothed with such
jurisdiction. The lack of jurisdiction was cured behind it does not apply to the present
by the issuance of the amendatory decree which case. We adopt instead the more recent
case of Erectors, Inc. v. National Labor
is in the nature of a curative statute with
Relations Commission, where we refused
retrospective application to a pending
to give retroactive application to Executive
proceeding, like Civil Case No. 9657 (See 82
Order No. 797 which created the Philippine
C.J.S. 1004).
Overseas
Employment
Administration
(POEA). Under said law, POEA was vested
Garcia has since been uniformly applied in
subsequent cases. Thus, in Calderon v. Court of with original and exclusive jurisdiction over
all cases, including money claims, involving
Appeals, reiterated that PD No. 1367 [is]
employer-employee relations arising out of
curative and retrospective in nature.
or by virtue of any law or contract involving
The Decision of this case, finally, acknowledged Filipino
workers
for
overseas
the retrospective characteristics of Executive
employment, which
jurisdiction
was
Order No. 111. x x x.
originally conferred upon the Labor
Arbiter. As in the instant case, the Labor
With the Briad ruling
in place, the Arbiters assumption of jurisdiction therein
implication is that the qualified jurisdiction of was likewise questioned in view of the
the Labor Arbiter and the NLRC should subsequent enactment of E.O. 797. In
have been applied when the ULP complaint ruling against the retroactive application of
was still pending. This means that the law, the Court explained its position as
petitioners should have been required to follows:
show in their complaint the gross nature of
the CBA violation, as well as the economic The rule is that jurisdiction over the subject
provision violated, without which the matter is determined by the law in force at the
complaint would be dismissible. Herein lies time of the commencement of the action. On
the problem. The Courts appreciation of March 31, 1982, at the time private respondent
petitioners cause of action is that, while it filed his complaint against the petitioner, the
would make out a case for ULP, under prevailing laws were Presidential Decree No.
present law, however, the same falls short 1691 and Presidential Decree No. 1391 which
of the special requirements necessary to vested the Regional Offices of the Ministry of
[13]

[14]

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Labor and the Labor Arbiters with original and

exclusive jurisdiction over all cases involving
employer-employee relations including money
claims arising out of any law or contracts
involving Filipino workers for overseas
employment. At the time of the filing of the
complaint, the Labor Arbiter had clear
jurisdiction over the same.

concurrent jurisdiction over cases involving

money claims. This amendment, however,
created a situation where the jurisdiction of the
Regional Directors and the Labor Arbiters
overlapped. As a remedy, R.A. 6715 further
amended Article 217 by delineating their
respective jurisdictions. Under R.A. 6715, the
Regional Director has exclusive original
jurisdiction over cases involving money claims
E.O. No. 797 did not divest the Labor Arbiters provided: (1) the claim is presented by an
authority to hear and decide the case filed by
employer or person employed in domestic or
private respondent prior to its effectivity. Laws household service, or househelper under the
should only be applied prospectively unless the Code; (2) the claimant, no longer being
legislative intent to give them retroactive effect employed, does not seek reinstatement; and (3)
is expressly declared or is necessarily implied
the aggregate money claim of the employee or
from the language used. We fail to perceive in
househelper does not exceed P5,000.00. All
the language of E.O. No. 797 an intention to
other cases within the exclusive and original
give it retroactive effect.
jurisdiction of the Labor Arbiter. E.O. No. 111
and R.A. 6715 are therefore curative statutes. A
The case of Briad Agro Development Corp. vs.
curative statute is enacted to cure defects in a
Dela Cerna cited by the petitioner is not
prior law or to validate legal proceedings,
applicable to the case at bar. In Briad, the Court instruments or acts of public authorities which
applied the exception rather than the general
would otherwise be void for want of conformity
rule. In this case, Briad Agro Development
with certain existing legal requirements.
Corp. and L.M. Camus Engineering Corp.
challenged the jurisdiction of the Regional
The law at bar, E.O. No. 797, is
Director of the Department of Labor and
not a curative statute. x x x.
Employment over cases involving workers
We do not find any reason why the
money claims, since Article 217 of the Labor
Code, the law in force at the time of the filing of Court should not apply the above ruling to
the case at bar, notwithstanding the fact that
the complaint, vested in the Labor Arbiters
a different law is involved. Actually, this is
exclusive jurisdiction over such cases. The
not the first time that the Court refused to
Court dismissed the petition in its Decision
dated June 29, 1989. It ruled that the enactment apply RA 6715 retroactively. Our previous
decisions on whether to give it retroactive
of E.O. No. 111, amending Article 217 of the
Labor Code, cured the Regional Directors lack application or not depended to a great
extent on what amended provisions were
of jurisdiction by giving the Labor Arbiter and
under consideration, as well as the factual
the Regional Director concurrent jurisdiction
circumstances to which they were made to
over all cases involving money
apply. In Briad, the underlying reason for
claims. However, on November 9, 1989, the
applying RA 6715 retroactively was the fact
Court, in a Resolution, reconsidered and set
aside its June 29 Decision and referred the case that prior to its amendment, Article 217 of
the Labor Code, as amended by then
to the Labor Arbiter for proper proceedings, in
view of the promulgation of Republic Act (R.A.) Executive Order No. 111, created a scenario
where the Labor Arbiters and the Regional
6715 which divested the Regional Directors of
Directors of the Department of Labor and
the power to hear money claims. It bears
Employment (DOLE) had overlapping
emphasis that the Court accorded E.O. No. 111
and R.A. 6715 a retroactive application because jurisdiction over money claims. This
situation was viewed as a defect in the law
as curative statutes, they fall under the
so that when RA No. 6715 was passed and
exceptions to the rule on prospectivity of laws.
delineated the jurisdiction of the Labor
E.O. No. 111, amended Article 217 of the Labor Arbiters and Regional Directors, the Court
deemed it a rectification of such defect;
Code to widen the workers access to the
government for redress of grievances by giving hence, the conclusion that it was curative in
the Regional Directors and Labor Arbiters
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i am destined to be a LAWYER

nature and, therefore, must be applied therein that the counsel for respondent
retroactively.
(Philtread) was Borreta, Gutierrez and
Leogardo whose address could be found at
The same thing cannot be said of the
the 3rd Floor, Commodore Condominium
case at bar. Like in Erectors, the instant
Arquiza corner M. Guerrero Streets, Ermita,
case presents no defect in the law requiring
Manila. If, indeed, Atty. Gutierrez declared
a remedy insofar as the jurisdiction of the
during the Labor Arbiters proceedings that
Labor Arbiter and the Voluntary Arbitrator is
he was exclusively representing Philtread,
concerned. There is here no overlapping of
why then did he use the firms name, and its
jurisdiction to speak of because matters
new address at that, in the aforementioned
involving interpretation and implementation
notice to the NLRC? Moreover, why did Atty.
of CBA provisions, as well as interpretation
Borreta take fifteen days to file his
and enforcement of company personnel
Manifestation and inform the NLRC of the
policies, have always been determined by
improper service of the resolution to
the Voluntary Arbitrator even prior to RA
him? Why did he not object immediately to
6715. Similarly, all ULP cases were
the service by the bailiff? Considering that
exclusively within the jurisdiction of the
Atty. Gutierrez and Atty. Borreta were once
Labor Arbiter. What RA 6715 merely did
partners in their law firm, it behooves Atty.
was to re-apportion the jurisdiction over ULP
Borreta to have at least advised his former
cases by conferring exclusive jurisdiction
partner of the receipt of the resolution. As
over such ULP cases that do not involve
a lawyer, his receipt of the adverse
gross violation of a CBAs economic
resolution should have alerted him of the
provision upon the voluntary arbitrator. We
adverse
consequences
which
might
do not see anything in the act of refollow if the same were not acted upon
apportioning jurisdiction curative of any
promptly, as what in fact happened
defect in the law as it stood prior to the
here. As for Atty. Gutierrez, if the law firm of
enactment of RA 6715. The Court view it as
Borreta, Gutierrez, and Leogardo were
merely a matter of change in policy of the
really dissolved, it was incumbent upon him
lawmakers, especially since the 1987
not to have used the firms name in the first
Constitution adheres to the preferential use
place, or he should have withdrawn the
of voluntary modes of dispute settlement.
appearance of the firm and entered his own
This, instead of the inherent defect in the
appearance, in case the dissolution took
law, must be the rationale that prompted the
place midstream. By failing to exercise
amendment. Hence,
we
uphold
the
either option, Atty. Gutierrez cannot now
jurisdiction of the Labor Arbiter which
blame the NLRC for serving its resolution at
attached to this case at the time of its filing
the address of the firm still on record. To
on December 5, 1988.
our
mind,
these
excuses
cannot
Finally, the contention that it was Atty. camouflage the clever ploy of Philtreads
Gutierrez who exclusively represented counsel to earn a last chance to move for
Philtread and that the law firm of Borreta, reconsideration. This Court, it bears
Gutierrez and Leogardo had been emphasizing, is not impressed, but looks
dissolved, are lame excuses to cast doubt incredulously at such superficial moves.
on the propriety of service to Atty.
WHEREFORE, the instant petition is
Borreta. It must be noted that the complaint
hereby
GRANTED. The
assailed
of petitioners was filed on December 5,
resolutions of the NLRC dated November
1988. Presumably,
the
preliminary
18, 1992, and April 7, 1993, are SET
conferences adverted to by Atty. Borreta,
ASIDE, while its resolution dated April 15,
where Atty. Gutierrez supposedly declared
1992, is REINSTATED for immediate
that he was exclusively representing
execution.
Philtread, transpired at around that
date. The Court, however, is surprised to
SO ORDERED.
discover that the record bears a Notice
POLICY INSTRUCTIONS NO. 56-93
of Change of Address dated March 12,
(April 6, 1993)
1990, filed by Atty. Gutierrez, indicating
[17]

[18]

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i am destined to be a LAWYER

CLARIFYING THE JURISDICTION BETWEEN

VOLUNTARY ARBITRATORS AND LABOR
ARBITERS OVER TERMINATION CASES AND
PROVIDING GUIDELINES FOR THE REFERRAL
OF SAID CASES ORIGINALLY FILED WITH THE
NLRC TO THE NCMB

NUNALA, VISITACION ELAMBRE, ELIZABETH

INOFRE, VIOLETA BARTE, LUZVIMINDA VILLOSA,
NORMA SALVADOR, ELIZABETH BOGATE, MERLYN
BALBOA, EUFRECINA SARMIENTO, SIMPLICIA
SIMPLICIA BORLEO, MATERNIDAD DAVID, LAILA
JOP, POTENCIANA CULALA, LUCIVITA NAVARRO,
ROLANDO BOTIN, AMELITA MAGALONA, AGNES
In line with the policy of the Labor Code of the
CENA, NOLI BARTOLAY, DANTE AQUINO, HERMINIA
Philippines to promote and emphasize the primacy
RILLON, CANDIDA APARIJADO, LYDIA JIMENEZ,
of free collective bargaining and negotiations,
ELIZABETH ANOCHE, ALDA MURO, TERESA
including voluntary arbitration, mediation and
conciliation, as modes of settling labor of industrial VILLANUEVA, TERESITA RECUENCO, ELIZA
SERRANO, ESTELLA POLINAR, GERTRUDES
disputes, the following guidelines are hereby
NUNEZ, FELIPE BADIOLA, ROSLYN FERNANDEZ,
promulgated: chanroblespublishingcompany
OSCAR PAGUTA, NATIVIDAD BALIWAS, ELIZABETH
BARCIBAL, CYNTHIA ESTELLER, TEODORA
1. Termination cases arising in or resulting from
the interpretation and implementation of collective SANTOS, ALICIA PILAR, MILA PATENO, GLORIA
bargaining agreements and interpretation and
CATRIZ, MILA MACAHILIG, ADELAIDA DE LEON,
enforcement of company personnel policies which
ROSENDO EDILO, ARSENIA ESPIRITU, NUMERIANO
were initially processed at the various steps of the
CABRERA, CONCEPSION ARRIOLA, PAULINA
plant-level Grievance Procedures under the parties DIMAPASOK, ANGELA SANGCO, PRESILA ARIAS,
collective bargaining agreements fall within the
ZENAIDA NUNES, EDITHA IGNACIO, ROSA GUIRON,
original and exclusive jurisdiction of the voluntary
TERESITA CANETA, ALICIA ARRO, TEOFILO
arbitrator pursuant to Article 217 (c) and Article
RUWETAS, CARLING AGCAOILI, ROSA NOLASCO,
261 of the Labor Code.
GERLIE PALALON, CLAUDIO DIRAS, LETICIA
ALBOS, AURORA ALUBOG, LOLITA ACALEN,
2. Said cases, if filed before a Labor Arbiter, shall
GREGORIO ALIVIO, GUILLERMO ANICETA, ANGELIE
be dismissed by the Labor Arbiter for lack of
ANDRADA, SUSAN ANGELES, ISABELITA AURIN,
jurisdiction and referred to the concerned NCMB
Regional Branch for appropriate action towards an MANUELA AVELINA, CARLING AGCAOILI, TERESITA
ALANO, LOLITA AURIN, EMMABETH ARCIAGA,
expeditious selection by the parties of voluntary
CRESENCIA ACUNA, LUZVIMINDA ABINES,
arbitrator or panel of arbitrators based on the
FLORENCIA ADALID, OLIVIA AGUSTIN,
procedures agreed upon in the CBA.
EVANGELINE ALCORAN, ROSALINA ALFERES,
chanroblespublishingcompany
LORNA AMANTE, FLORENTINA AMBITO, JULIETA
This issuance shall take effect immediately.
AMANONCO, CARMEN AMARILLO, JOSEFINA
AMBAGAN, ZENAIDA ANAYA, MARIA ANGLO,
(SGD.)
EDITHA ANTA ZO, MARY JANE ANTE, ANDREA
MA. NIEVES R. CONFESOR
AQUINO, ROWENA ARABIT, MARIETA ARAGON,
Secretary
REBECCA ARCENA, LYDIA ARCIDO, FERNANDO
ARENAS, GREGORIO ARGUELLES, EDITHA
ARRIOLA, EMMA ATIENZA, EMMA ATIENZA, TEODY
G.R. No. 113907
February 28, 2000
ATIENZA, ELIZABETH AUSTRIA, DIOSA AZARES,
SOLIDA AZAINA, MILAGROS BUAG, MARIA
MALAYANG SAMAHAN NG MGA MANGGAGAWA SA BANADERA, EDNALYN BRAGA, OFELIA BITANGA,
M. GREENFIELD (MSMG-UWP), ITS PRESIDENT
FREDISMINDA BUGUIS, VIOLETA BALLESTEROS,
BEDA MAGDALENA VILLANUEVA, MARIO
ROSARIO BALLADJAY, BETTY BORIO, ROMANA
DAGANIO, DONATO GUERRERO, BELLA P.
BAUTISTA, SUSARA BRAVO, LILIA BAHINGTING,
SANCHEZ, ELENA TOBIS, RHODA TAMAYO,
ENIETA BALDOZA, DAMIANA BANGCORE,
LIWAYWAY MALLILIN, ELOISA SANTOS,
HERMINIA BARIL, PETRONA BARRIOS, MILAGROS
DOMINADOR REBULLO, JOSE IRLAND, TEOFILA
BARRAMEDA, PERLA BAUTISTA, CLARITA
QUEJADA, VICENTE SAMONTINA, FELICITAS
BAUTISTA, ROSALINA BAUTISTA, ADELINA BELGA,
DURIAN, ANTONIO POLDO, ANGELINA TUGNA,
CONSOLACION BENAS, MARIA BEREZO,
SALVADOR PENALOSA, LUZVIMINDA TUBIG,
MERCEDES BEREBER, VIOLETA BISCOCHO,
ILUMINADA RIVERA, ROMULO SUMILANG, NENITA
ERNESTO BRIONES, ALVINA BROSOTO, AGUSTINA
BARBELONIA, LEVI BASILIA, RICARDO PALAGA,
BUNYI, CARMEN BUGNOT, ERLINDA BUENAFLOR,
MERCY ROBLES, LEODEGARIO GARIN, DOMINGO
LITA BAQUIN, CONSEJO BABOL, CRISANTA
ECLARINAL, MELCHOR GALLARDO, MARCELO
BACOLOD, CELIA DE BACTAT, MAZIMA BAGA,
GARIN, ROSALINA BAUTISTA, MARY ANN
ELENA BALADAD, ROSARIO BALADJAY, AMALIA
TALIGATOS, ALEJANDRO SANTOS, ANTONIO
BALAGTAS, ANITA BALAGTAS, MARIA BALAKIT,
FRAGA, LUZ GAPULTOS, MAGDALENA URSUA,
RUFINA BALATAN, REBECCA BALDERAMA, AMELIA
EUGENIO ORDAN, LIGAYA MANALO, PEPITO DELA
BALLESTER, BELEN BARQUIO, BERNANDITA
PAZ, PERLITA DIMAQUIAT, MYRNA VASQUEZ,
BASILIDES, HELEN BATO, HELEN BAUTISTA,
FLORENTINA SAMPAGA, ARACELI FRAGA,
ROMANA BAUTISTA, ALMEDA BAYTA, AVELINA
MAXIMINA FAUSTINO, MARINA TAN, OLIGARIO
BELAYON, NORMA DE BELEN, THELMA DE BELEN,
LOMO, PRECILA EUSEBIO, SUSAN ABOGANO,
JOCELYN BELTRAN, ELENA BENITEZ, VIRGINIA
CAROLINA MANINANG, GINA GLIFONIA, OSCAR
BERNARDINO, MERLINA BINUYAG, LINA BINUYA,
SOTTO, CELEDONA MALIGAYA, EFREN
BLESILDA BISNAR, SHIRLEY BOLIVAR,
VELASQUEZ, DELIA ANOVER, JOSEPHINE
CRESENTACION MEDLO, JOCELYN BONIFACIO,
TALIMORO, MAGDALENA TABOR, NARCISA
AMELIA BORBE, AMALIA BOROMEO, ZENAIDA
SARMIENTO, SUSAN MACASIEB, FELICIDAD SISON, BRAVO, RODRIGO BEULDA, TERESITA MENDEZ,
PRICELA CARTA, MILA MACAHILIG, CORAZON
ELENA CAMAN, LALIANE CANDELARIA, MARRY

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i am destined to be a LAWYER

CARUJANO, REVELINA CORANES, MARITESS

CABRERA, JUSTINA CLAZADA, APOLONIA DELA
CRUZ, VICTORIA CRUZ, JOSEFINA DELA CRUZ,
MARITESS CATANGHAL, EDNA CRUZ, LUCIA DE
CASTRO, JOSIE CARIASO, OFELIA CERVANTES,
MEDITA CORTADO, AMALIA CASAJEROS, LUCINA
CASTILIO, EMMA CARPIO, ANACORITA CABALES,
YOLANDA CAMO, MILA CAMAZUELA, ANITA
CANTO, ESTELA CANCERAN, FEMENCIA CANCIO,
CYNTHIA CAPALAD, MERLE CASTILLO, JESUSA
CASTRO, CECILIA CASTILLO, SILVERITA
CASTRODES, VIVIAN CELLANO, NORMA CELINO,
TERESITA CELSO, GLORIA COLINA, EFIPANIA
CONSTANTINO, SALVACION CONSULTA, MEDITA
CORTADO, AIDA CRUZ, MARISSA DELA CRUZ,
EDITO CORCILLES, JELYNE CRUZ, ROSA CORPOS,
ROSITA CUGONA, ELSIE CABELLES, EMMA CADUT,
VICTORIA CALANZA, BARBARA CALATA, IMELDA
CALDERON, CRISTINA CALIDGUID, EMMALINDA
CAMALON, MARIA CAMERINO, CARMENCITA
CAMPO, CONNIE CANEZO, LOURDES CAPANANG,
MA. MILAGROS CAPILI, MYRNA T. CAPIRAL, FLOR
SAMPAGA, SUSAN B. CARINO, ROSARIO CARIZON,
VIRGINIA DEL CARMEN, EMMA CARPIO, PRESCILA
CARTA, FE CASERO, LUZ DE CASTRO, ANNA
CATARONGAN, JOSEFINA CASTISIMO, JOY
MANALO, EMMIE CAWALING, JOVITA CARA,
MARINA CERBITO, MARY CAREJANO, ESTELA R.
CHAVEZ, CONCEPCION PARAJA, GINA CLAUDIO,
FLORDELIZA CORALES, EDITO CORCIELER, ROSA
C. CORROS, AMELIA CRUZ, JELYNE CRUZ,
WILFREDO DELA CRUZ, REINA CUEVAS, MARILOU
DEJECES, JOSEPHINE DESACULA, EDITHA DEE,
EDITHA DIAZ, VIRGIE DOMONDON, CELSA
DOROPAW, VIOLETA DUMELINA, MARIBEL
DIMATATAC, ELBERTO DAGANIO, LETECIA
DAGOHOY, DINDO DALUZ, ANGELITA DANTES,
GLORIA DAYO, LUCIA DE CASTRO, CARLITA DE
GUZMAN, CARMEN DELA CRUZ, MERCY DE LEON,
MARY DELOS REYES, MARIETA DEPILO, MATILDE
DIBLAS, JULIETA DIMAYUGA, TEODORA
DIMAYUGA, YOLANDA DOMDOM, LUCITA DONATO,
NELMA DORADO, RITA DORADO, SUSAN DUNTON,
HERMINIA SAN ESTEBAN, AMALI EUGENIO, OLIVIA
EUSOYA, ERNESTO ESCOBIN, EVELYN ESCUREL,
LYDIA ESCOBIN, VICENTE E. ELOIDA. ELENA EGAR,
GLORIA ERENO, NORMA ESPIRIDION, ARSENIA
ESPIRITU, AURORA ESTACIO, DEMETRIA
ESTONELO, MILAGROS FONSEGA, LYDIA
FLORENTINO, JULIA FARABIER, TRINIDAD
FATALLA, IMELDA FLORES, JESSINA FRANCO, MA.
CRISTINA FRIJAS, ESPECTACION FERRER,
BERDENA FLORES, LEONILA FRANCISCO,
BERNARDA FAUSTINO, DOLORES FACUNDO,
CRETITA FAMILARAN, EMELITA FIGUERAS, MA.
VIRGINIA FLORENDO, AURORA FRANCISCO, MA.
JESUSA FRANCISCO, NENITA FUENTES, MARILOU
GOLINGAN, JUANITA GUERRERO, LYDIA
GUEVARRA, SOCORRO GONZAGA, PATRICIA
GOMEO, ROSALINDA GALAPIN, CARMELITA
GALVEZ, TERESA GLE, SONIA GONZALES, PRIMITA
GOMEZ, THERESA GALUA, JOSEFINA GELUA,
BRENDA GONZAGA, FLORA GALLARDO, LUCINDA
GRACILLA, VICTORIA GOZUM, NENITA GAMAO,
EDNA GARCIA, DANILO GARCIA, ROSARIO GIRAY,
ARACELI GOMEZ, JOEMARIE GONZAGA, NELIA
GONZAGA, MARY GRANCE GOZON, CARMEN
GONZALES, MERLITA GREGORIO, HERMINIA
GONZALES, CARLITA DE GUZMAN, MODESTA
GABRENTINA, EDITHA GADDI, SALVACIO GALIAS,

Page | 41

i am destined to be a LAWYER

MERLINDA GALIDO, MELINDA GAMIT, JULIETA

GARCIA, EMELITA GAVINO, CHARITO GILLIA,
GENERA GONEDA, CRESTITA GONZALES,
FRANCISCA GUILING, JULIAN HERNANDEZ,
HERRADURA, SUSANA HIPOLITO, NERISSA HAZ,
SUSAN HERNAEZ, APOLONIA ISON, SUSAN
IBARRA, LUDIVINA IGNACIO, CHOLITA INFANTE,
JULIETA ITURRIOS, ANITA IBO, MIRASOL INGALLA,
JULIO JARDINIANO, MERLITA JULAO, JULIETA
JULIAN, MARIBETH DE JOSE, JOSEPHINE JENER,
IMELDA JATAP, JULIETA JAVIER, SALOME JAVIER,
VICTORIA JAVIER, SALVACION JOMOLO, EDNA
JARNE, LYDIA JIMENEZ, TERESITA DE JUAN,
MARILYN LUARCA, ROSITA LOSITO, ROSALINA
LUMAYAG, LORNA LARGA, CRESTETA DE LEON,
ZENAIDA LEGASPI, ADELAIDA LEON, IMELDA DE
LEON, MELITINA LUMABI, LYDIA LUMABI,
ASUNCION LUMACANG, REGINA LAPIADRIO,
MELANIA LUBUGUAN, EVANGELINE LACAP,
PELAGIA LACSI, LORNA LAGUI, VIRGIE LAITAN,
VIRGINIA LEE, CRESTELITA DE LEON, FELICISIMA
LEONERO, DIOSA LOPE, ANGELITA LOPEZ,
TERESITA LORICA, JUANITA MENDIETA, JUANITA
MARANQUEZ, JANET MALIFERO, INAS MORADOS,
MELANIE MANING, LUCENA MABANGLO, CLARITA
MEJIA, IRENE MENDOZA, LILIA MORTA, VIGINIA
MARAY, CHARITO MASINAHON, FILMA MALAYA,
LILIA MORTA, VIRGINIA MARAY, CHARITO
MASINAHON, FILMA MALAYA, LILIA MORTA, ROSITA
MATIBAG, LORENZA MLINA, SABINA DEL MUNDO,
EDITHA MUYCO, NARCISA MABEZA, MA. FE
MACATANGAY, CONCEPCION MAGDARAOG,
IMELDA MAHIYA, ELSA MALLARI, LIGAYA
MANAHAN, SOLEDA MANLAPAS, VIRGINIA MAPA,
JOSEI MARCOS, LIBRADA MARQUEZ, VIRGINIA
MAZA, JULIANITA MENDIETA, EDILBERTA
MENDOZA, IRENE MERCADO, HELEN MEROY,
CRISTINA MEJARES, CECILIA MILLET, EMELITA
MINON, JOSEPHINE MIRANA, PERLITA MIRANO,
EVANGELINE MISBAL, ELEANOR MORALES,
TERESITA MORILLA, LYDIA NUDO, MYRIAM NAVAL,
CAROLINA NOLIA, ALICIA NUNEZ, MAGDALENA
NAGUIDA, ELSA NICOL, LILIA NACIONALES, MA.
LIZA MABO, REMEDIOS NIEVES, MARGARITA
NUYLAN, TERESITA NIEVES, PORFERIA NARAG,
RHODORA NUCASA, CORAZON OCRAY, LILIA
OLIMPO, VERONA OVERENCIA, FERMIN OSENA,
FLORENCIA OLIVAROS, SOLEDAD OBEAS,
NARISSA OLIVEROS, PELAGIA ORTEGA, SUSAN
ORTEGA, CRISTINA PRENCIPE, PURITA PENGSON,
REBECCA PACERAN, EDNA PARINA, MARIETA
PINAT, EPIFANIA PAJERLAN, ROSALINA PASIBE,
CECILIA DELA PAZ, LORETA PENA, APOLONIA
PALCONIT, FRANCISCO PAGUIO, LYDIA
PAMINTAHON, ELSIE PACALDO, TERESITA
PADILLA, MYRNA PINEDA, MERCEIDTA PEREZ,
NOVENA PORLUCAS, TERESITA PODPOD,
ADORACION PORNOBI, ALICIA PERILLO, HELEN
JOY PENDAL, LOURDES PACHECO, LUZVIMINDA
PAGALA, LORETA PAGAPULAN, FRANCISCO
PAGUIO, PRISCO PALACA, FLORA PAMINTUAN,
NOEMI PARISALES, JOSEPHINE PATRICIO,
CRISTINA PE BENITO, ANGELA PECO, ANGELITA
PENA, ESTER PENONES, NORMA PEREZ, MAURA
PERSEVERANCIA, MARINA PETILLA, JOSIE PIA,
ZULVILITA PIODO, REBECCA PACERAN, CLARITA
POLICARPIO, MAXIMO POTENTO, PORFIRIO
POTENTO, FLORDELIZA PUMARAS, FERNANDO
QUEVEDO, JULIANA QUINDOZA, CHARITO QUIROZ,
CARMELITA ROSINO, RODELIA RAYONDOYON,

FLORENCIA RAGOS, REBECCA ROSALES,

ROSALYN RIVERO, FRANCISCO RUIZ, FRANCIA
ROSERO, EMELY RUBIO, EDILBERTO RUIO, JUANA
RUBY, RAQUEL REYES, MERCY ROBLES, ESTELA
RELANO, ROSITA REYES NIMFA RENDON,
EPIFANIO RAMIRO, MURIEL REALCO, BERNARDITA
RED, LEONITA RODIL, BENITA REBOLA, DELMA
REGALARIO, LENY REDILLAS, JULIETA DELA
ROSA, FELICITAS DELA ROSA, SUSAN RAFALLO,
ELENA RONDINA, NORMA RACELIS, JOSEPHINE
RAGEL, ESPERANZA RAMIREZ, LUZVIMINDA
RANADA, CRISTINA RAPINSAN, JOCELYN RED,
ORLANDO REYES, TERESITA REYES, ANGELITA
ROBERTO, DELIA ROCHA, EDLTRUDES ROMERO,
MELECIA ROSALES, ZENAIDA ROTAO, BELEN
RUBIS, FE RUEDA, SYLVIA SONGCAYAWON,
CRISTINA SANANO, NERCISA SARMIENTO, HELEN
SIBAL, ESTELITA SANTOS, NORMA SILVESTRE,
DARLITA SINGSON, EUFROCINA SARMIENTO,
MYRNA SAMSON, EMERLINA SADIA, LORNA
SALAZAR, AVELINA SALVADOR, NACIFORA
SALAZAR, TITA SEUS, MARIFE SANTOS, GRACIA
SARMIENTO, ANGELITA SUMANGIL, ELIZABETH
SICAT, MA. VICTORIA SIDELA, ANALITA SALVADOR,
MARITES SANTOS, VIRGINIA SANTOS, THELMA
SARONG, NILDA SAYAT, FANCITA SEGUNDO,
FYNAIDA SAGUI, EDITHA SALAZAR, EDNA SALZAR,
EMMA SALENDARIO, SOLEDAD SAMSON, EDNA
SAN DIEGO, TERESITA SAN GABRIEL, GERTRUDES
SAN JOSE, EGLECERIA OSANCHEZ, ESTRELLA
SANCHEZ, CECILIA DELOS SANTOS, LUISA
SEGOVIA, JOCELYN SENDING, ELENA SONGALIA,
FELICITAS SORIANO, OFELIA TIBAYAN, AIDA
TIRNIDA, MONICA TIBAYAN, CRISTETA TAMBARAN,
GLORIA TACDA, NENVINA, FELINA TEVES,
ANTONINA DELA TORRE, MAXIMA TANILON, NENA
TABAT, ZOSIMA TOLOSA, MARITA TENOSO, IMELDA
TANIO, LUZ TANIO, EVANGELINE TAYO, JOSEFINA
TINGTING, ARSENIA TISOY, MAGDALENA
TRAJANO, JOSEFINA UBALDE, GINA UMALI, IRMA
VALENZUELA, FELY VALDEZ, PAULINA VALEZ,
ROSELITA VALLENTE, LOURDES VELASCO, AIDA
VILLA, FRANCISCA VILLARITO, ZENAIDA
VISMONTE, DELIA VILLAMIEL, NENITA VASQUEZ,
JOCELYN VILLASIS, FERMARGARITA VARGAS,
CELIA VALLE, MILA CONCEPCION VIRAY, DOMINGA
VALDEZ, LUZVIMINDA VOCINA, MADELINE VIVERO,
RUFINA VELASCO, AUREA VIDALEON, GLORIA DEL
VALLE, THELMA VALLOYAS, CYNTHIA DELA VEGA,
ADELA VILLAGOMEZ, TERESITA VINLUAN,
EUFEMIA VITAN, GLORIA VILLAFLORES,
EDORACION VALDEZ, ANGELITA VALDEZ,
ILUMINADA VALENCI, MYRNA VASQUEZ, EVELNYN
VEJERAMO, TEODORA VELASQUEZ, EDAN
VILLANUEVA, PURITA VILLASENOR, SALVADOR
WILSON, EMELINA YU, ADELFA YU, ANA ABRIGUE,
VIRGINIA ADOBAS, VICTORIA ANTIPUESTO,
MERCEDITA CASTILLO, JOCELYN CASTRO,
CREMENIA DELA CRUZ, JOSEPHINE IGNACIO,
MELITA ILILANGOS, LIGAYA LUMAYAT, DELIA
LUMBES, ROSITA LIBRADO, DELIA LAGRAMADA,
GEMMA MAGPANTAY, EMILY MENDOZA, FIDELA
PANGANIBAN, LEONOR RIZALDO, ILUMINDA
RIVERA, DIVINA SAMBAYAN, ELMERITA SOLAYAO,
NANCY SAMALA, JOSIE SUMARAN, LUZVIMINDA
ABINES, ALMA ACOL, ROBERTO ADRIATICO,
GLORIA AGUINALDO, ROSARIO ALEYO, CRISTETA
ALEJANDRO, LILIA ALMOGUERA, CARMEN
AMARILLO, TRINIDAD ARDANIEL, CERINA
AVENTAJADO, ZENAIDA AVAYA, LOLITA ARABIS,

Page | 42

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MARIA ARSENIA, SOFIA AGUINALDO, SALVE ABAD,

JOSEFINA AMBANGAN EMILIA AQUINO, JOSEFINA
AQUINO, JULIANA AUSAN, AMERCIANA ACOSTA,
CONCEPCION ALEROZA, DIANA ADOVOS, FELY
ADVINCULA, SEOMINTA ARIAS, JOSEPHINE
ARCEDE, NORMA AMISTOSO, PRESENTACION
ALONOS, EMMA ATIENZA, LEONIDA AQUINO, ANITA
ARILLON, ADELAIDA ARELLANO, NORMA
AMISTOSO, JOSEPHINE ARCEDE, SEMIONITA
ARIAS, JOSEFINA BANTUG, LOLITA BARTE,
HERMINIA BASCO, MARGARITA BOTARDO, RUFINO
BUGNOT, LOLITA BUSTILLO, ISABEL BALAKIT,
ROSARIO BARRERO, TESSIE BALBOS, NORMA
BENISANO, GUILLERMA BRUGES, BERNADETTE
BARTOLOME, SHIRLEY BELMONTE, MERONA
BELZA, AZUCENA BERNALES, JOSE BASCO,
NIMPHA BANTOG, BENILDA BUBAN, REGINA
BUBAN, SALOME BARRAMEDA, IRENE BISCO,
FELICITAS BAUTISTA, VIOLETA BURA, LINA
BINUYA, BIBIANA BAARDE, ELSA BAES,
ANASTACIA BELONZO, SONIA BENOYO,
ELIZABETH BACUNGAN, PATRICIA BARRAMEDA,
ERLINDA BARCELONA, EMMA BANICO, APOLONIA
BUNAO, LUCITA BOLEA, PACIFICA BARCELONA,
EDITHA BASIJAN, RENITA BADAMA, ELENA
BALADAD, CRESENCIA BAJO, BERNADITA
BASILID, MELINDA BEATO, YOLANDA BATANES,
EDITHA BORILLA, ANITA BAS, ELSA CALIPUNDAN,
MARIA CAMERINO,VIRGINIA CAMPOSANO,
MILAGROS CAPILI, CARINA CARINO, EUFEMIA
CASIHAN, NENITA CASTRO, FLORENCIA
CASUBUAN, GIRLIE CENTENO, MARIANITA
CHIQUITO, IMELDA DELA CRUZ, TEODOSIA GONG,
TEOFILA CARACOL, TERESITA CANTA, IRENEA
CUNANAN, JULITA CANDILOSAS, VIOLETA CIERES,
MILAGROS DELA CRUZ, FLOREPES CAPULONG,
CARMENCITA CAMPO, MARILYN CARILLO, RUTH
DELA CRUZ, RITA CIJAS, LYDIA CASTOR, VIRGIE
CALUBAD, EMELITA CABERA, CRISTETA CRUZ,
ERLINDA COGADAS, IMELDA CALDERON, SUSIE
LUZ CEZAR, ESTELA CHAVEZ, NORMA CABRERA,
ELDA DAGATAN, LEONISA DIMACUNA, ERNA
DUGTONG, FLORDELISA DIGMA, VIRGILIO DADIOS,
LOLITA DAGTA, ADELAIDA DORADO, CELSA
DATUMANONG, VIRGINIA DOCTOLERO, EDNA SAN
DIEGO, JULIETA DANG, JULIETA DORANTINAO,
LOLITA DAGANO, JUDITH DIAZ, MARIA ENICANE,
MARITA ESCARDE, ENRIMITA ESMAYOR, ROSARIO
EPIRITU, REMEDIOS EMBOLTORIO, IRENE ESTUITA,
TERESITA ERESE, ERMELINDA ELEZO, MARIA
ESTAREJA, MERLITA ESQUERRA, YOLANDA
FELICITAS, FRUTO FRANCIA, MARTHA FRUTO,
LILIA FLORES, SALVACION FORTALESA, JUDITH
FAJARDO, SUSANA FERNANDO, EDWIN
FRANCISCO, NENITA GREGORY, ROSA CAMILO,
MARIVIC GERRARDO, CHARITA GOREMBALEM,
NORMA GRANDE, DOLORES GUTIERREZ, CHARLIE
GARCIA, LUZ GALVEZ, ADELAIDA GAMILLA, LUZ
GAPULTOS, ERLINDA GARCIA, HELEN GARCIA,
ERLINDA GAUDIA, FRANCISCA GUILING, MINTA
HERRERA, ASUNCION HONOA, JUAN HERNANDEZ,
LUCERIA ANNA MAE HERNANDEZ, JULIANA
HERNANDEZ, EDITHA IGNACIO, ANITA INOCENCIO,
EULALIA INSORIO, ESTELITA IRLANDA, MILAGROS
IGNACIO, LINDA JABONILLO, ADELIMA JAEL,
ROWENA JARABJO, ROBERT JAVILINAR, CLARITA
JOSE, CARMENCITA JUNDEZ, SOFIA LALUCIS,
GLORIA LABITORIA, ANGELITA LODES, ERLINDA
LATOGA, EVELYN LEGASPI, ROMEO LIMCHOCO,
JESUS LARA, ESTRELLA DE LUNA, LORETA

LAREZA, JOSEPHINE ALSCO, MERCY DE LEON,

CONSOLACION LIBAO, MARILYN LIWAG, TERESITA
LIZAZO, LILIA MACAPAGAL, SALVACION
MACAREZA, AMALIA MADO, TERESITA MADRIAGA,
JOVITA MAGNAYE, JEAN MALABAD, FRANCISCA
MENDOZA, NELCITA MANGANTANG, TERESITA
NELLA, GENEROZA MERCADO, CRISTETA
MOJANA, BERNARDA MONGADO, LYDIA MIRANDA,
ELISA MADRILEJOS, LOIDA MAGSINO, AMELIA
MALTO, JULITA MAHIBA, MYRNA MAYORES, LUISA
MARAIG, FLORENCIA MARAIG, EMMA MONZON,
IMELDA MAGDANGAN, VICTORIA MARTIN, NOEMI
MANGUILLO, BASILIZA MEDINA, VICTORIO
MERCADO, ESTELA MAYPA, EMILIA MENDOZA,
LINA MAGPANTAY, FELICIANA MANLOLO, ELENA
MANACOP, WILMA MORENO, JUANA MENDOZA,
EVELYN DEL MUNDO, ROSIE MATUTINA, MATILDE
MANALO, TERESITA MENDEZ, FELIPINA
MAGONCIA, MARIA MANZANO, LIGAYA MANALO,
LETICIA MARCHA, MARINA MANDIGMA, LETICIA
MANDASOC, PRESCILLA MARTINEZ, JULIA
MENDOZA, PACITA MAGALLANES, ANGELINA
MARJES, SHIRLEY MELIGRITO, IRENE MERCADO,
ELISA MAATUBANG, MARCELINA NICOLAS,
AGUSTINA NICOLAS, ROSA NOLASCO, WILMA
NILAYE, VIOLETA ORACION, ANGELA OSTAYA,
JUANITA OSAYOS, MAGDALENA OCAMPO,
MARDIANA OCTA, ROSELA OPAO, LIBRADA
OCAMPO, YOLANDA OLIVER, MARCIA ORLANDA,
PAGDUNAN, RITA PABILONA, MYRA PALACA,
BETHLEHEM PALINES, GINA PALIGAR, NORMA
PALIGAR, DELMA PEREZ, CLAUDIA PRADO, JULIE
PUTONG, LUDIVINA PAGSALINGAN, MERLYN
PANALIGAN, VIOLETA PANAMBITAN, NOREN PAR,
ERLINDA PARAGAS, MILA PARINO, REBECCA
PENAFLOR, IMELDA PENAMORA, JERMICILLIN
PERALTA, REBECCA PIAPES, EDITHA PILAR,
MAROBETH PILLADO, DIOSCORO PIMENTEL,
AURORA LAS PINAS, EVANGELINA PINON, MA.
NITA PONDOC, MA. MERCEDES PODPOD,
ANGELITO PANDEZ, LIGAYA PIGTAIN, LEONILA
QUIAMBAO, ELENA QUINO, MARITESS QUIJANO,
CHOLITA REBUENO, LOLITA REYES, JOCELYN
RAMOS, ROSITA RAMIREZ, ELINORA RAMOS,
ISABEL RAMOS, ANNABELLE RESURRECCION,
EMMA REYES, ALILY ROXAS, MARY GRACE DELOS
REYES, JOCELYN DEL ROSARIO, JOSEFINA
RABUSA, ANGELITA ROTAIRO, SAMCETA ROSETA,
EDERLINA RUIZ, ZENAIDA ROSARIO, BENITA
REBOLA, ROSITA REVILLA, ROSITA SANTOS,
ROWENA SALAZAR, EMILYN SARMIENTO, ANA
SENIS, ELOISA SANTOS, NARCISA SONGLIAD,
ELMA SONGALIA, AMPARA SABIO, JESSIE
SANCHEZ, VIVIAN SAMILO, GLORIA SUMALINOG,
ROSALINA DELOS SANTOS, MARIETA SOMBRERO,
HELEN SERRETARIO, TEODORO SULIT, BELLA
SONGUINES, LINDA SARANTAN, ESTELLA
SALABAR, MILAGROS SISON, GLORIA TALIDAGA,
CECILIA TEODORO, ROMILLA TUAZON, AMELITA
TABULAO, MACARIA TORRES, LUTGARDA TUSI,
ESTELLA TORREJOS, VICTORIA TAN, MERLITA
DELA VEGA, WEVINA ORENCIA, REMEDIOS
BALECHA, TERESITA TIBAR, LACHICA LEONORA,
JULITA YBUT, JOSEFINA ZABALA, WINNIE
ZALDARIAGA, BENHUR ANTENERO, MARCELINA
ANTENERO, ANTONINA ALAPAN, EDITHA ANTOZO,
ROWENA ARABIT, ANDRA AQUINO, TERESITA
ANGULO, MARIA ANGLO, MYRNA ALBOS, ELENITA
AUSTRIA, ANNA ABRIGUE, VIRGINIA ADOBAS,
VICTORIA ANTIPUESTO, REMEDIOS BOLECHE,

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i am destined to be a LAWYER

MACARIA BARRIOS, THELMA BELEN, ESTELLA

BARRETTO, JOCELYN CHAVEZ, VIRGINIA
CAPISTRANO, BENEDICTA CINCO, YOLLY
CATPANG, REINA CUEVAS, VICTORIA CALANZA, FE
CASERO, ROBERTA CATALBAS, LOURDES
CAPANANG, CLEMENCIA CRUZ, JOCELYN COSTO,
MERCEDITA CASTILLO, EDITHA DEE, LUCITA
DONATO NORMA ESPIRIDION, LORETA
FERNANDEZ, AURORA FRANCISCO, VILMA
FAJARDO, MODESTA GABRENTINA, TERESITA
GABRIEL, SALVACION GAMBOA, JOSEPHINE
IGNACIO, SUSAN IBARRA, ESPERANZA JABSON,
OSCAR JAMBARO, ROSANNA JARDIN, CORAZON
JALOCON, ZENAIDA LEGASPI, DELLA
LAGRAMADA, ROSITA LIBRANDO, LIGAYA
LUMAYOT, DELIA LUMBIS, LEONORA LANCHICA,
RELAGIA LACSI, JOSEFINA LUMBO, VIOLETA DE
LUNA, EVELYN MADRID, TERESITA MORILLA,
GEMMA MAGPANTAY, EMILY MENDOZA, IRENEA
MEDINA, NARCISA MABEZA, ROSANNA MEDINA,
DELIA MARTINEZ, ROSARIO MAG-ISA, EDITHA
MENDOZA, EDILBERTA MENDOZA, FIDELA
PANGANIBAN, OFELIA PANGANIBAN, AZUCENA
POSTGO, LOURDES PACHECO, LILIA PADILLA,
MARISSA PEREZ, FLORDELIZA PUMARES, LUZ
REYES, NORMA RACELIS, LEONOR RIZALDO,
JOSIE SUMASAR, NANCY SAMALA, EMERLITA
SOLAYAO, MERCEDITA SAMANIEGO, BLANDINA
SIMBULAN, JOCELYN SENDING, LUISITA
TABERRERO, TERESITA TIBAR, ESTERLINA
VALDEZ, GLORIA VEJERANO, ILUMINADA
VALENCIA, MERLITA DELA VEGA, VIRGIE LAITAN,
JULIET VILLARAMA, LUISISTA OCAMPO, NARIO
ANDRES, ANSELMA TULFO, GLORIA MATEO,
FLANIA MENDOZA, CONNIE CANGO, EDITHA
SALAZAR, MYRNA DELOS SANTOS, TERESITA
SERGIO, CHARITO GILLA, FLORENTINA HERNAEZ,
BERNARDINO VIRGINIA, AMPO ANACORITA, SYLVIA
POASADAS, ESTRELLA ESPIRITU, CONCORDIA
LUZURIAGA, MARINA CERBITO, EMMA REYES,
NOEMI PENISALES, CLARITA POLICARPIO, BELEN
BANGUIO, HERMINIA ADVINCULA, LILIA MORTA,
REGINA LAPIDARIO, LORNA LARGA, TERESITA
VINLUAN, MARITA TENOSO, NILDS SAYAT, THELMA
SARONG, DELMA REGALIS, SUSAN RAFAULO,
ELENA RONDINA, MYRNA PIENDA, VIOLETA
DUMELINA, FLORENCIA ADALID, FILMA MELAYA,
ERLINDA DE BAUTISTA, MATILDE DE BLAS,
DOLORES FACUNDO, REBECCA LEDAMA, MA. FE
MACATANGAY, EMELITA MINON, NORMA PAGUIO,
ELIZA VASQUEZ, GLORIA VILLARINO, MA. JESUS
FRANCISCO, TERESITA GURPIDO, LIGAYA
MANALO, FE PINEDA, MIRIAM OCMAR, LUISA
SEGOVIA, TEODY ATIENZA, SOLEDA AZCURE,
CARMEN DELA CRUZ, DMETRIA ESTONELO, MA.
FLORIDA LOAZNO, IMELDA MAHIYA, EDILBERTA
MENDOZA, SYLVIA POSADAS, SUSANA ORTEGA,
JOSEPHINE D. TALIMORO, TERESITA LORECA,
ARSENIA TISOY, LIGAYA MANALO, TERESITA
GURPIO, FE PINEDA, and MARIA JESUS
FRANCISCO, petitioners,
vs.
HON. CRESENCIO J. RAMOS, NATIONAL LABOR
RELATIONS COMMISSION, M. GREENFIELD (B),
INC., SAUL TAWIL, CARLOS T. JAVELOSA, RENATO
C. PUANGCO, WINCEL LIGOT, MARCIANO HALOG,
GODOFREDO PACENO, SR., GERVACIO
CASILLANO, LORENZO ITAOC, ATTY. GODOFREDO
PACENO, JR., MARGARITO CABRERA, GAUDENCIO

RACHO, SANTIAGO IBANEZ, AND RODRIGO

AGUILING, respondents.
PURISIMA, J.:
At bar is a Petition for Certiorari under Rule 65 of the
Revised Rules of Court to annul the decision of the
National Labor Relations Commission in an unfair labor
practice case instituted by a local union against its
employer company and the officers of its national
federation.
The petitioner, Malayang Samahan ng mga
Manggagawa sa M. Greenfield, Inc., (B) (MSMG),
hereinafter referred to as the "local union", is an affiliate
of the private respondent, United Lumber and General
Workers of the Philippines (ULGWP), referred to as the
"federation". The collective bargaining agreement
between MSMG and M. Greenfield, Inc., names the
parties as follows:
This agreement made and entered into by and
between:
M. GREENFIELD, INC. (B) a corporation duly
organized in accordance with the laws of the
Republic of the Philippines with office address at
Km. 14, Merville Road, Paraaque, Metro
Manila, represented in this act by its General
manager, Mr. Carlos T. Javelosa, hereinafter
referred to as the Company;
-andMALAYANG SAMAHAN NG MGA
MANGGAGAWA SA M. GREENFIELD (B)
(MSMG)/UNITED LUMBER AND GENERAL
WORKERS OF THE PHILIPPINES (ULGWP), a
legitimate labor organization with address at
Suite 404, Trinity Building, T. M. Kalaw Street,
Manila, represented in this act by a Negotiating
Committee headed by its National President, Mr.
Godofredo Paceno, Sr., referred to in this
Agreement as the UNION.1
The CBA includes, among others, the following pertinent
provisions:
Art. II-Union Security
Sec. 1. Coverage and Scope. All employees who
are covered by this Agreement and presently
members of the UNION shall remain members of
the UNION for the duration of this Agreement as
a condition precedent to continued employment
with the COMPANY.
xxx

xxx

xxx

Sec. 4. Dismissal. Any such employee mentioned

in Section 2 hereof, who fails to maintain his
membership in the UNION for non-payment of
UNION dues, for resignation and for violation of
UNION's Constitution and By-Laws and any new
employee as defined in Section 2 of this Article
shall upon written notice of such failure to join or
to maintain membership in the UNION and upon
written recommendation to the COMPANY by the

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UNION, be dismissed from the employment by

the COMPANY; provided, however, that the
UNION shall hold the COMPANY free and
blameless from any and all liabilities that may
arise should the dismissed employee question, in
any manner, his dismissal; provided, further that
the matter of the employee's dismissal under this
Article may be submitted as a grievance under
Article XIII and, provided, finally, that no such
written recommendation shall be made upon the
COMPANY nor shall COMPANY be compelled to
act upon any such recommendation within the
period of sixty (60) days prior to the expiry date
of this Agreement conformably to law.
Art. IX
Sec. 4. Program Fund The Company shall
provide the amount of P10,000.00 a month for a
continuing labor education program which shall
be remitted to the Federation . . .2
On September 12, 1986, a local union election was held
under the auspices of the ULGWP wherein the herein
petitioner, Beda Magdalena Villanueva, and the other
union officers were proclaimed as winners. Minutes of
the said election were duly filed with the Bureau of Labor
Relations on September 29, 1986.
On March 21, 1987, a Petition for Impeachment was filed
with the national federation ULGWP by the defeated
candidates in the aforementioned election.
On June 16, 1987, the federation conducted an audit of
the local union funds. The investigation did not yield any
unfavorable result and the local union officers were
cleared of the charges of anomaly in the custody,
handling and disposition of the union funds.
1wphi1.nt

The 14 defeated candidates filed a Petition for

Impeachment/Expulsion of the local union officers with
the DOLE NCR on November 5, 1987, docketed as
NCR-OD-M-11-780-87. However, the same was
dismissed on March 2, 1988, by Med-Arbiter Renato
Parungo for failure to substantiate the charges and to
present evidence in support of the allegations.
On April 17, 1988, the local union held a general
membership meeting at the Caruncho Complex in Pasig.
Several union members failed to attend the meeting,
prompting the Executive Board to create a committee
tasked to investigate the non-attendance of several
union members in the said assembly, pursuant to
Sections 4 and 5, Article V of the Constitution and ByLaws of the union, which read:
Seksyon 4. Ang mga kinukusang hindi pagdalo o
hindi paglahok sa lahat ng hakbangin ng unyon
ng sinumang kasapi o pinuno ay maaaring
maging sanhi ng pagtitiwalag o pagpapataw ng
multa ng hindi hihigit sa P50.00 sa bawat araw
na nagkulang.
Seksyon 5. Ang sinumang dadalo na aalis ng
hindi pa natatapos ang pulong ay ituturing na
pagliban at maparusahan itong alinsunod sa
Article V, Seksyong 4 ng Saligang Batas na ito.
Sino mang kasapi o pisyales na mahuli and
dating sa takdang oras ng di lalampas sa isang

oras ay magmumulta ng P25.00 at babawasin sa

sahod sa pamamagitan ng salary deduction at
higit sa isang oras ng pagdating ng huli ay
ituturing na pagliban.3
On June 27, 1988, the local union wrote respondent
company a letter requesting it to deduct the union fines
from the wages/salaries of those union members who
failed to attend the general membership meeting. A
portion of the said letter stated:
xxx

xxx

xxx

In connection with Section 4 Article II of our

existing Collective Bargaining Agreement, please
deduct the amount of P50.00 from each of the
union members named in said annexes on the
payroll of July 2-8, 1988 as fine for their failure to
attend said general membership meeting.4

1. That the United Lumber and General Workers

of the Philippines (ULGWP) through its local
union officers shall administer the collective
bargaining agreement (CBA).
2. That petitioner company shall remit the
P10,000.00 monthly labor education program
fund to the ULGWP subject to the condition that
it shall use the said amount for its intended
purpose.
3. That the Treasurer of the MSMG shall be
authorized to collect from the 356 union
members the amount of P50.00 as penalty for
their failure to attend the general membership
assembly on April 17, 1988.
However, if the MSMG Officers could present the
individual written authorizations of the 356 union
members, then the company is obliged to deduct
from the salaries of the 356 union members the
P50.00 fine.6

In a Memorandum dated July 3, 1988, the Secretary

General of the national federation, Godofredo Paceo,
Jr. disapproved the resolution of the local union imposing
the P50.00 fine. The union officers protested such action On appeal, Director Pura-Ferrer Calleja issued a
by the Federation in a Reply dated July 4, 1988.
Resolution dated February 7, 1989, which modified in
part the earlier disposition, to wit:
On July 11, 1988, the Federation wrote respondent
company a letter advising the latter not to deduct the
WHEREFORE, premises considered, the
fifty-peso fine from the salaries of the union members
appealed portion is hereby modified to the extent
requesting that:
that the company should remit the amount of five
thousand pesos (P5,000.00) of the P10,000.00
monthly labor education program fund to
. . . any and all future representations by MSMG
ULGWP and the other P5,000.00 to MSMG, both
affecting a number of members be first cleared
unions to use the same for its intended purpose.7
from the federation before corresponding action
by the Company.5
Meanwhile, on September 2, 1988, several local unions
(Top Form, M. Greenfield, Grosby, Triumph International,
The following day, respondent company sent a reply to
petitioner union's request in a letter, stating that it cannot General Milling, and Vander Hons chapters) filed a
Petition for Audit and Examination of the federation and
deduct fines from the employees' salary without going
education funds of ULGWP which was granted by Medagainst certain laws. The company suggested that the
union refer the matter to the proper government office for Arbiter Rasidali Abdullah on December 25, 1988 in an
Order which directed the audit and examination of the
resolution in order to avoid placing the company in the
books of account of ULGWP.
middle of the issue.
The imposition of P50.00 fine became the subject of
bitter disagreement between the Federation and the
local union culminating in the latter's declaration of
general autonomy from the former through Resolution
No. 10 passed by the local executive board and ratified
by the general membership on July 16, 1988.

On September 30, 1988, the officials of ULGWP called a

Special National Executive Board Meeting at Nasipit,
Agusan del Norte where a Resolution was passed
placing the MSMG under trusteeship and appointing
respondent Cesar Clarete as administrator.

On October 27, 1988, the said administrator wrote the

respondent company informing the latter of its
In retaliation, the national federation asked respondent
company to stop the remittance of the local union's share designation of a certain Alfredo Kalingking as local union
president and "disauthorizing" the incumbent union
in the education funds effective August 1988. This was
officers from representing the employees. This action by
objected to by the local union which demanded that the
the national federation was protested by the petitioners
education fund be remitted to it in full.
in a letter to respondent company dated November 11,
1988.
The company was thus constrained to file a Complaint
for Interpleader with a Petition for Declaratory Relief with
On November 13, 1988, the petitioner union officers
the Med-Arbitration Branch of the Department of Labor
received identical letters from the administrator requiring
and Employment, docketed as Case No. OD-M-8-435them to explain within 72 hours why they should not be
88. This was resolved on October 28, 1988, by Medremoved from their office and expelled from union
Arbiter Anastacio Bactin in an Order, disposing thus:
membership.
WHEREFORE, premises considered, it is hereby
ordered:

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i am destined to be a LAWYER

On November 26, 1988, petitioners replied:

(a) Questioning the validity of the alleged

National Executive Board Resolution placing
their union under trusteeship;

ULGWP and violative to its Constitution and Bylaws particularly Article V, Section 6, 9, and 12,
Article XIII, Section 8.

(b) Justifying the action of their union in declaring

a general autonomy from ULGWP due to the
latter's inability to give proper educational,
organizational and legal services to its affiliates
and the pendency of the audit of the federation
funds;

In subsequent letters dated 21 February and 4

March 1989, the ULGWP reiterated its demand
for your dismissal, pointing out that
notwithstanding your expulsion from the
federation, you have continued in your
employment with the company in violation of
Sec. 1 and 4 of Article II of our CBA, and of
existing provisions of law.

(c) Advising that their union did not commit any

act of disloyalty as it has remained an affiliate of
ULGWP;
(d) Giving ULGWP a period of five (5) days to
cease and desist from further committing acts of
coercion, intimidation and harassment. 8
However, as early as November 21, 1988, the officers
were expelled from the ULGWP. The termination letter
read:
Effective today, November 21, 1988, you are
hereby expelled from UNITED LUMBER AND
GENERAL WORKERS OF THE PHILIPPINES
(ULGWP) for committing acts of disloyalty and/or
acts inimical to the interest and violative to the
Constitution and by-laws of your federation.
You failed and/or refused to offer an explanation
inspite of the time granted to you.
Since you are no longer a member of good
standing, ULGWP is constrained to recommend
for your termination from your employment, and
provided in Article II Section 4, known as UNION
SECURITY, in the Collective Bargaining
agreement.9
On the same day, the federation advised respondent
company of the expulsion of the 30 union officers and
demanded their separation from employment pursuant to
the Union Security Clause in their collective bargaining
agreement. This demand was reiterated twice, through
letters dated February 21 and March 4, 1989,
respectively, to respondent company.

In view thereof, we are left with no alternative but

to comply with the provisions of the Union
Security Clause of our CBA. Accordingly, we
hereby serve notice upon you that we are
dismissing you from your employment with M.
Greenfield, Inc., pursuant to Sections 1 and 4,
Article II of the CBA effective immediately.10
On that same day, the expelled union officers assigned
in the first shift were physically or bodily brought out of
the company premises by the company's security
guards. Likewise, those assigned to the second shift
were not allowed to report for work. This provoked some
of the members of the local union to demonstrate their
protest for the dismissal of the said union officers. Some
union members left their work posts and walked out of
the company premises.
On the other hand, the Federation, having achieved its
objective, withdrew the Notice of Strike filed with the
NCMB.
On March 8, 1989, the petitioners filed a Notice of Strike
with the NCMB, DOLE, Manila, docketed as Case No.
NCMB-NCR-NS-03-216-89, alleging the following
grounds for the strike:
(a) Discrimination
(b) Interference in union activities
(c) Mass dismissal of union officers and shop
stewards
(d) Threats, coercion and intimidation

Thereafter, the Federation filed a Notice of Strike with

the National Conciliation and Mediation Board to compel
the company to effect the immediate termination of the
expelled union officers.
On March 7, 1989, under the pressure of a threatened
strike, respondent company terminated the 30 union
officers from employment, serving them identical copies
of the termination letter reproduced below:

(e) Union busting

The following day, March 9, 1989, a strike vote
referendum was conducted and out of 2, 103 union
members who cast their votes, 2,086 members voted to
declare a strike.

On March 10, 1989, the thirty (30) dismissed union

officers filed an urgent petition, docketed as Case No.
We received a demand letter dated 21 November NCMB-NCR-NS-03-216-89, with the Office of the
1988 from the United Lumber and General
Secretary of the Department of Labor and Employment
Workers of the Philippines (ULGWP) demanding praying for the suspension of the effects of their
for your dismissal from employment pursuant to
termination from employment. However, the petition was
the provisions of Article II, Section 4 of the
dismissed by then Secretary Franklin Drilon on April 11,
existing Collective Bargaining Agreement (CBA). 1989, the pertinent portion of which stated as follows:
In the said demand letter, ULGWP informed us
that as of November 21, 1988, you were expelled
At this point in time, it is clear that the dispute at
from the said federation "for committing acts of
M. Greenfield is purely an intra-union matter. No
disloyalty and/or acts inimical to the interest of
mass lay-off is evident as the terminations have

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been limited to those allegedly leading the

secessionist group leaving MSMG-ULGWP to
form a union under the KMU. . . .
xxx

xxx

xxx

WHEREFORE, finding no sufficient jurisdiction to

warrant the exercise of our extraordinary
authority under Article 277 (b) of the Labor Code,
as amended, the instant Petition is hereby
DISMISSED for lack of merit.
SO ORDERED.11
On March 13 and 14, 1989, a total of 78 union shop
stewards were placed under preventive suspension by
respondent company. This prompted the union members
to again stage a walk-out and resulted in the official
declaration of strike at around 3:30 in the afternoon of
March 14, 1989. The strike was attended with violence,
force and intimidation on both sides resulting to physical
injuries to several employees, both striking and nonstriking, and damage to company properties.
The employees who participated in the strike and
allegedly figured in the violent incident were placed
under preventive suspension by respondent company.
The company also sent return-to-work notices to the
home addresses of the striking employees thrice
successively, on March 27, April 8 and April 31, 1989,
respectively. However, respondent company admitted
that only 261 employees were eventually accepted back
to work. Those who did not respond to the return-to-work
notice were sent termination letters dated May 17, 1989,
reproduced below:
M. Greenfield Inc., (B)

On August 7, 1989, the petitioners filed a verified

complaint with the Arbitration Branch, National Capital
Region, DOLE, Manila, docketed as Case No. NCR-0009-04199-89, charging private respondents of unfair
labor practice which consists of union busting, illegal
dismissal, illegal suspension, interference in union
activities, discrimination, threats, intimidation, coercion,
violence, and oppression.
After the filing of the complaint, the lease contracts on
the respondent company's office and factory at Merville
Subdivision, Paraaque expired and were not renewed.
Upon demand of the owners of the premises, the
company was compelled to vacate its office and factory.
Thereafter, the company transferred its administration
and account/client servicing department at AFP-RSBS
Industrial Park in Taguig, Metro Manila. For failure to find
a suitable place in Metro Manila for relocation of its
factory and manufacturing operations, the company was
constrained to move the said departments to Tacloban,
Leyte. Hence, on April 16, 1990, respondent company
accordingly notified its employees of a temporary
shutdown in operations. Employees who were interested
in relocating to Tacloban were advised to enlist on or
before April 23, 1990.
The complaint for unfair labor practice was assigned to
Labor Arbiter Manuel Asuncion but was thereafter
reassigned to Labor Arbiter Cresencio Ramos when
respondents moved to inhibit him from acting on the
case.
On December 15, 1992, finding the termination to be
valid in compliance with the union security clause of the
collective bargaining agreement, Labor Arbiter Cresencio
Ramos dismissed the complaint.

Petitioners then appealed to the NLRC. During its

pendency, Commissioner Romeo Putong retired from the
service, leaving only two commissioners, Commissioner
May 17, 1989
Vicente Veloso III and Hon. Chairman Bartolome Carale
in the First Division. When Commissioner Veloso
xxx
xxx
xxx
inhibited himself from the case, Commissioner Joaquin
Tanodra of the Third Division was temporarily designated
On March 14, 1989, without justifiable cause and to sit in the First Division for the proper disposition of the
without due notice, you left your work assignment case.
at the prejudice of the Company's operations. On
March 27, April 11, and April 21, 1989, we sent
The First Division affirmed the Labor Arbiter's disposition.
you notices to report to the Company. Inspite of
With the denial of their motion for reconsideration on
your receipt of said notices, we have not heard
January 28, 1994, petitioners elevated the case to this
from you up to this date.
Court, attributing grave abuse of discretion to public
Km. 14, Merville Rd., Paraaque, M.M.

Accordingly, for your failure to report, it is

construed that you have effectively abandoned
your employment and the Company is, therefore,
constrained to dismiss you for said cause.
Very truly yours,
M. GREENFIELD, INC., (B)
By:
WENZEL STEPHEN LIGOT
Asst. HRD Manager12

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i am destined to be a LAWYER

respondent NLRC in:

I. UPHOLDING THE DISMISSAL OF THE
UNION OFFICERS BY RESPONDENT
COMPANY AS VALID;
II. HOLDING THAT THE STRIKE STAGED BY
THE PETITIONERS AS ILLEGAL;
III. HOLDING THAT THE PETITIONER
EMPLOYEES WERE DEEMED TO HAVE
ABANDONED THEIR WORK AND HENCE,
VALIDLY DISMISSED BY RESPONDENT
COMPANY; AND

IV. NOT FINDING RESPONDENT COMPANY

AND RESPONDENT FEDERATION OFFICERS
GUILTY OF ACTS OF UNFAIR LABOR
PRACTICE.
Notwithstanding the several issues raised by the
petitioners and respondents in the voluminous pleadings
presented before the NLRC and this Court, they revolve
around and proceed from the issue of whether or not
respondent company was justified in dismissing
petitioner employees merely upon the labor federation's
demand for the enforcement of the union security clause
embodied in their collective bargaining agreement.

against respondent company which charges union

busting, illegal dismissal, illegal suspension, interference
in union activities, discrimination, threats, intimidation,
coercion, violence, and oppression actually proceeds
from one main issue which is the termination of several
employees by respondent company upon the demand of
the labor federation pursuant to the union security clause
embodied in their collective bargaining agreement.

Petitioners contend that their dismissal from work was

effected in an arbitrary, hasty, capricious and illegal
manner because it was undertaken by the respondent
company without any prior administrative investigation;
that, had respondent company conducted prior
independent investigation it would have found that their
Before delving into the main issue, the procedural flaw
expulsion from the union was unlawful similarly for lack
pointed out by the petitioners should first be resolved.
of prior administrative investigation; that the federation
cannot recommend the dismissal of the union officers
Petitioners contend that the decision rendered by the
because it was not a principal party to the collective
First Division of the NLRC is not valid because
bargaining agreement between the company and the
Commissioner Tanodra, who is from the Third Division,
union; that public respondents acted with grave abuse of
did not have any lawful authority to sit, much less write
theponencia, on a case pending before the First Division. discretion when they declared petitioners' dismissals as
It is claimed that a commissioner from one division of the valid and the union strike as illegal and in not declaring
that respondents were guilty of unfair labor practice.
NLRC cannot be assigned or temporarily designated to
another division because each division is assigned a
Private respondents, on the other hand, maintain that the
particular territorial jurisdiction. Thus, the decision
thirty dismissed employees who were former officers of
rendered did not have any legal effect at all for being
the federation have no cause of action against the
irregularly issued.
company, the termination of their employment having
been made upon the demand of the federation pursuant
Petitioners' argument is misplaced. Article 213 of the
Labor Code in enumerating the powers of the Chairman to the union security clause of the CBA; the expelled
officers of the local union were accorded due process of
of the National Labor Relations Commission provides
law prior to their expulsion from their federation; that the
that:
strike conducted by the petitioners was illegal for
noncompliance with the requirements; that the
The concurrence of two (2) Commissioners of a
employees who participated in the illegal strike and in
division shall be necessary for the
the commission of violence thereof were validly
pronouncement of a judgment or resolution.
terminated from work; that petitioners were deemed to
Whenever the required membership in a division
have abandoned their employment when they did not
is not complete and the concurrence of two (2)
respond to the three return to work notices sent to them;
commissioners to arrive at a judgment or
that petitioner labor union has no legal personality to file
resolution cannot be obtained, the Chairman
and prosecute the case for and on behalf of the
shall designate such number of additional
individual employees as the right to do so is personal to
Commissioners from the other divisions as may
the latter; and that, the officers of respondent company
be necessary.
cannot be liable because as mere corporate officers,
they acted within the scope of their authority.
It must be remembered that during the pendency of the
case in the First Division of the NLRC, one of the three
Public respondent, through the Labor Arbiter, ruled that
commissioners, Commissioner Romeo Putong, retired,
the dismissed union officers were validly and legally
leaving Chairman Bartolome Carale and Commissioner
terminated because the dismissal was effected in
Vicente Veloso III. Subsequently, Commissioner Veloso
compliance with the union security clause of the CBA
inhibited himself from the case because the counsel for
which is the law between the parties. And this was
the petitioners was his former classmate in law school.
affirmed by the Commission on appeal. Moreover, the
The First Division was thus left with only one
Labor Arbiter declared that notwithstanding the lack of a
commissioner. Since the law requires the concurrence of
prior administrative investigation by respondent
two commissioners to arrive at a judgment or resolution,
company, under the union security clause provision in
the Commission was constrained to temporarily
the CBA, the company cannot look into the legality or
designate a commissioner from another division to
illegality of the recommendation to dismiss by the union
complete the First Division. There is nothing irregular at
nd the obligation to dismiss is ministerial on the part of
all in such a temporary designation for the law empowers
the company.13
the Chairman to make temporary assignments whenever
the required concurrence is not met. The law does not
say that a commissioner from the first division cannot be This ruling of the NLRC is erroneous. Although this Court
temporarily assigned to the second or third division to fill has ruled that union security clauses embodied in the
collective bargaining agreement may be validly enforced
the gap or vice versa. The territorial divisions do not
and that dismissals pursuant thereto may likewise be
confer exclusive jurisdiction to each division and are
valid, this does not erode the fundamental requirement
merely designed for administrative efficiency.
of due process. The reason behind the enforcement of
union security clauses which is the sanctity and
Going into the merits of the case, the court finds that the
Complaint for unfair labor practice filed by the petitioners

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i am destined to be a LAWYER

inviolability of contracts14 cannot override one's right to

due process.
In the case of Cario vs. National Labor Relations
Commission,15 this Court pronounced that while the
company, under a maintenance of membership provision
of the collective bargaining agreement, is bound to
dismiss any employee expelled by the union for
disloyalty upon its written request, this undertaking
should not be done hastily and summarily. The company
acts in bad faith in dismissing a worker without giving
him the benefit of a hearing.
The power to dismiss is a normal prerogative of
the employer. However, this is not without
limitation. The employer is bound to exercise
caution in terminating the services of his
employees especially so when it is made upon
the request of a labor union pursuant to the
Collective Bargaining Agreement, . . . Dismissals
must not be arbitrary and capricious. Due
process must be observed in dismissing an
employee because it affects not only his position
but also his means of livelihood. Employers
should respect and protect the rights of their
employees, which include the right to labor.
In the case under scrutiny, petitioner union officers were
expelled by the federation for allegedly committing acts
of disloyalty and/or inimical to the interest of ULGWP and
in violation of its Constitution and By-laws. Upon demand
of the federation, the company terminated the petitioners
without conducting a separate and independent
investigation. Respondent company did not inquire into
the cause of the expulsion and whether or not the
federation had sufficient grounds to effect the same.
Relying merely upon the federation's allegations,
respondent company terminated petitioners from
employment when a separate inquiry could have
revealed if the federation had acted arbitrarily and
capriciously in expelling the union officers. Respondent
company's allegation that petitioners were accorded due
process is belied by the termination letters received by
the petitioners which state that the dismissal shall be
immediately effective.
As held in the aforecited case of Cario, "the right of an
employee to be informed of the charges against him and
to reasonable opportunity to present his side in a
controversy with either the company or his own union is
not wiped away by a union security clause or a union
shop clause in a collective bargaining agreement. An
employee is entitled to be protected not only from a
company which disregards his rights but also from his
own union the leadership of which could yield to the
temptation of swift and arbitrary expulsion from
membership and mere dismissal from his job.
While respondent company may validly dismiss the
employees expelled by the union for disloyalty under the
union security clause of the collective bargaining
agreement upon the recommendation by the union, this
dismissal should not be done hastily and summarily
thereby eroding the employees' right to due process,
self-organization and security of tenure. The
enforcement of union security clauses is authorized by
law provided such enforcement is not characterized by
arbitrariness, and always with due process.16 Even on
the assumption that the federation had valid grounds to

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i am destined to be a LAWYER

expel the union officers, due process requires that these

union officers be accorded a separate hearing by
respondent company.
In its decision, public respondent also declared that if
complainants (herein petitioners) have any recourse in
law, their right of action is against the federation and not
against the company or its officers, relying on the
findings of the Labor Secretary that the issue of
expulsion of petitioner union officers by the federation is
a purely intra-union matter.
Again, such a contention is untenable. While it is true
that the issue of expulsion of the local union officers is
originally between the local union and the federation,
hence, intra-union in character, the issue was later on
converted into a termination dispute when the company
dismissed the petitioners from work without the benefit of
a separate notice and hearing. As a matter of fact, the
records reveal that the termination was effective on the
same day that the termination notice was served on the
petitioners.
In the case of Liberty Cotton Mills Workers Union vs.
Liberty Cotton Mills, Inc.17, the Court held the company
liable for the payment of backwages for having acted in
bad faith in effecting the dismissal of the employees.
. . . Bad faith on the part of the respondent
company may be gleaned from the fact that the
petitioner workers were dismissed hastily and
summarily. At best, it was guilty of a tortious act,
for which it must assume solidary liability, since it
apparently chose to summarily dismiss the
workers at the union's instance secure in the
union's contractual undertaking that the union
would hold it "free from any liability" arising from
such dismissal.
Thus, notwithstanding the fact that the dismissal was at
the instance of the federation and that it undertook to
hold the company free from any liability resulting from
such a dismissal, the company may still be held liable if it
was remiss in its duty to accord the would-be dismissed
employees their right to be heard on the matter.
Anent petitioners contention that the federation was not
a principal party to the collective bargaining agreement
between the company and the union, suffice it to say that
the matter was already ruled upon in the Interpleader
case filed by respondent company. Med-Arbiter
Anastacio Bactin thus ruled:
After a careful examination of the facts and
evidences presented by the parties, this Officer
hereby renders its decision as follows:
1.) It appears on record that in Collective
Bargaining Agreement (CBA) which took effect
on July 1, 1986, the contracting parties are M.
Greenfield, Inc. (B) and Malayang Samahan ng
Mga Manggagawa sa M. Greenfield, Inc. (B)
(MSMG)/United Lumber and General Workers of
the Philippines (ULGWP). However, MSMG was
not yet registered labor organization at the time
of the signing of the CBA. Hence, the union
referred to in the CBA is the ULGWP.18

Likewise on appeal, Director Pura Ferrer-Calleja put the

issue to rest as follows:
It is undisputed that ULGWP is the certified sole
and exclusive collective bargaining agent of all
the regular rank-and-file workers of the company,
M. Greenfield, Inc. (pages 31-32 of the records).
It has been established also that the company
and ULGWP signed a 3-year collective
bargaining agreement effective July 1, 1986 up
to June 30, 1989.19
Although the issue of whether or not the federation had
reasonable grounds to expel the petitioner union officers
is properly within the original and exclusive jurisdiction of
the Bureau of Labor Relations, being an intra-union
conflict, this Court deems it justifiable that such issue be
nonetheless ruled upon, as the Labor Arbiter did, for to
remand the same to the Bureau of Labor Relations
would be to intolerably delay the case.

the terms laid down in the agreement which

brought it into existence.23
Thus, a local union which has affiliated itself with a
federation is free to sever such affiliation anytime and
such disaffiliation cannot be considered disloyalty. In the
absence of specific provisions in the federation's
constitution prohibiting disaffiliation or the declaration of
autonomy of a local union, a local may dissociate with its
parent union.24
The evidence on hand does not show that there is such
a provision in ULGWP's constitution. Respondents'
reliance upon Article V, Section 6, of the federation's
constitution is not right because said section, in fact,
bolsters the petitioner union's claim of its right to declare
autonomy:
Sec. 6. The autonomy of a local union affiliated
with ULGWP shall be respected insofar as it
pertains to its internal affairs, except as provided
elsewhere in this Constitution.

The Labor Arbiter found that petitioner union officers

were justifiably expelled from the federation for
committing acts of disloyalty when it "undertook to
disaffiliate from the federation by charging ULGWP with
failure to provide any legal, educational or organizational
support to the local. . . . and declared autonomy, wherein
they prohibit the federation from interfering in any
internal and external affairs of the local union." 20

There is no disloyalty to speak of, neither is there any

violation of the federation's constitution because there is
nothing in the said constitution which specifically
prohibits disaffiliation or declaration of autonomy. Hence,
there cannot be any valid dismissal because Article II,
Section 4 of the union security clause in the CBA limits
the dismissal to only three (3) grounds, to wit: failure to
maintain membership in the union (1) for non-payment of
union dues, (2) for resignation; and (3) for violation of the
It is well-settled that findings of facts of the NLRC are
entitled to great respect and are generally binding on this union's Constitution and By-Laws.
Court, but it is equally well-settled that the Court will not
uphold erroneous conclusions of the NLRC as when the To support the finding of disloyalty, the Labor Arbiter
Court finds insufficient or insubstantial evidence on
gave weight to the fact that on February 26, 1989, the
record to support those factual findings. The same holds petitioners declared as vacant all the responsible
true when it is perceived that far too much is concluded, positions of ULGWP, filled these vacancies through an
inferred or deduced from the bare or incomplete facts
election and filed a petition for the registration of UWP as
appearing of record.21
a national federation. It should be pointed out, however,
that these occurred after the federation had already
expelled the union officers. The expulsion was effective
In its decision, the Labor Arbiter declared that the act of
November 21, 1988. Therefore, the act of establishing a
disaffiliation and declaration of autonomy by the local
different federation, entirely separate from the federation
union was part of its "plan to take over the respondent
federation." This is purely conjecture and speculation on which expelled them, is but a normal retaliatory reaction
the part of public respondent, totally unsupported by the to their expulsion.
evidence.
With regard to the issue of the legality or illegality of the
strike, the Labor Arbiter held that the strike was illegal for
A local union has the right to disaffiliate from its mother
the following reasons: (1) it was based on an intra-union
union or declare its autonomy. A local union, being a
dispute which cannot properly be the subject of a strike,
separate and voluntary association, is free to serve the
the right to strike being limited to cases of bargaining
interests of all its members including the freedom to
disaffiliate or declare its autonomy from the federation to deadlocks and unfair labor practice (2) it was made in
violation of the "no strike, no lock-out" clause in the CBA,
which it belongs when circumstances warrant, in
accordance with the constitutional guarantee of freedom and (3) it was attended with violence, force and
intimidation upon the persons of the company officials,
of association.22
other employees reporting for work and third persons
having legitimate business with the company, resulting to
The purpose of affiliation by a local union with a mother
serious physical injuries to several employees and
union or a federation.
damage to company property.
. . . is to increase by collective action the
bargaining power in respect of the terms and
conditions of labor. Yet the locals remained the
basic units of association, free to serve their own
and the common interest of all, subject to the
restraints imposed by the Constitution and ByLaws of the Association, and free also to
renounce the affiliation for mutual welfare upon

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On the submission that the strike was illegal for being

grounded on a non-strikeable issue, that is, the intraunion conflict between the federation and the local union,
it bears reiterating that when respondent company
dismissed the union officers, the issue was transformed
into a termination dispute and brought respondent
company into the picture. Petitioners believed in good
faith that in dismissing them upon request by the

federation, respondent company was guilty of unfair

labor practice in that it violated the petitioner's right to
self-organization. The strike was staged to protest
respondent company's act of dismissing the union
officers. Even if the allegations of unfair labor practice
are subsequently found out to be untrue, the
presumption of legality of the strike prevails. 25

a waiver. Some employees who responded to the notice

were allegedly told to wait for further notice from
respondent company as there was lack of work.

Furthermore, this Court has ruled that an employee who

took steps to protest his lay-off cannot be said to have
abandoned his work.30 The filing of a complaint for illegal
dismissal is inconsistent with the allegation of
Another reason why the Labor Arbiter declared the strike abandonment. In the case under consideration, the
illegal is due to the existence of a no strike no lockout
petitioners did, in fact, file a complaint when they were
provision in the CBA. Again, such a ruling is erroneous. A refused reinstatement by respondent company.
no strike, no lock out provision can only be invoked when
the strike is economic in nature, i.e. to force wage or
Anent public respondent's finding that there was no
other concessions from the employer which he is not
unfair labor practice on the part of respondent company
required by law to grant.26 Such a provision cannot be
and federation officers, the Court sustains the same. As
used to assail the legality of a strike which is grounded
earlier discussed, union security clauses in collective
on unfair labor practice, as was the honest belief of
bargaining agreements, if freely and voluntarily entered
herein petitioners. Again, whether or not there was
into, are valid and binding. Corollary, dismissals pursuant
indeed unfair labor practice does not affect the strike.
to union security clauses are valid and legal subject only
to the requirement of due process, that is, notice and
On the allegation of violence committed in the course of
hearing prior to dismissal. Thus, the dismissal of an
the strike, it must be remembered that the Labor Arbiter
employee by the company pursuant to a labor union's
and the Commission found that "the parties are agreed
demand in accordance with a union security agreement
that there were violent incidents . . . resulting to injuries
does not constitute unfair labor practice.31
27
to both sides, the union and management." The
evidence on record show that the violence cannot be
However, the dismissal was invalidated in this case
attributed to the striking employees alone for the
because of respondent company's failure to accord
company itself employed hired men to pacify the strikers. petitioners with due process, that is, notice and hearing
With violence committed on both sides, the management prior to their termination. Also, said dismissal was
and the employees, such violence cannot be a ground
invalidated because the reason relied upon by
for declaring the strike as illegal.
respondent Federation was not valid. Nonetheless, the
dismissal still does not constitute unfair labor practice.
With respect to the dismissal of individual petitioners, the
Labor Arbiter declared that their refusal to heed
Lastly, the Court is of the opinion, and so holds, that
respondent's recall to work notice is a clear indication
respondent company officials cannot be held personally
that they were no longer interested in continuing their
liable for damages on account of the employees'
employment and is deemed abandonment. It is admitted dismissal because the employer corporation has a
that three return to work notices were sent by
personality separate and distinct from its officers who
respondent company to the striking employees on March merely acted as its agents.
27, April 11, and April 21, 1989 and that 261 employees
who responded to the notice were admitted back to
It has come to the attention of this Court that the 30-day
work.
prior notice requirement for the dismissal of employees
However, jurisprudence holds that for abandonment of
work to exist, it is essential (1) that the employee must
have failed to report for work or must have been absent
without valid or justifiable reason; and (2) that there must
have been a clear intention to sever the employeremployee relationship manifested by some overt
acts.28 Deliberate and unjustified refusal on the part of
the employee to go back to his work post amd resume
his employment must be established. Absence must be
accompanied by overt acts unerringly pointing to the fact
that the employee simply does not want to work
anymore.29 And the burden of proof to show that there
was unjustified refusal to go back to work rests on the
employer.
In the present case, respondents failed to prove that
there was a clear intention on the part of the striking
employees to sever their employer-employee
relationship. Although admittedly the company sent three
return to work notices to them, it has not been
substantially proven that these notices were actually sent
and received by the employees. As a matter of fact,
some employees deny that they ever received such
notices. Others alleged that they were refused entry to
the company premises by the security guards and were
advised to secure a clearance from ULGWP and to sign

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i am destined to be a LAWYER

has been repeatedly violated and the sanction imposed

for such violation enunciated in Wenphil Corporation
vs.NLRC32 has become an ineffective deterrent. Thus,
the Court recently promulgated a decision to reinforce
and make more effective the requirement of notice and
hearing, a procedure that must be observed before
termination of employment can be legally effected.
In Ruben Serrano vs. NLRC and Isetann Department
Store (G.R. No. 117040, January 27, 2000), the Court
ruled that an employee who is dismissed, whether or not
for just or authorized cause but without prior notice of his
termination, is entitled to full backwages from the time he
was terminated until the decision in his case becomes
final, when the dismissal was for cause; and in case the
dismissal was without just or valid cause, the backwages
shall be computed from the time of his dismissal until his
actual reinstatement. In the case at bar, where the
requirement of notice and hearing was not complied
with, the aforecited doctrine laid down in the Serrano
case applies.
WHEREFORE, the Petition is GRANTED; the decision of
the National Labor Relations Commission in Case No.
NCR-00-09-04199-89 is REVERSED and SET ASIDE;
and the respondent company is hereby ordered to
immediately reinstate the petitioners to their respective

positions. Should reinstatement be not feasible,

respondent company shall pay separation pay of one
month salary for every year of service. Since petitioners
were terminated without the requisite written notice at
least 30 days prior to their termination, following the
recent ruling in the case of Ruben Serrano vs. National
Labor Relations Commission and Isetann Department
Store, the respondent company is hereby ordered to pay
full backwages to petitioner-employees while the
Federation is also ordered to pay full backwages to
petitioner-union officers who were dismissed upon its
instigation. Since the dismissal of petitioners was without
cause, backwages shall be computed from the time the
herein petitioner employees and union officers were
dismissed until their actual reinstatement. Should
reinstatement be not feasible, their backwages shall be
computed from the time petitioners were terminated until
the finality of this decision. Costs against the respondent
company.
1wphi1.nt

SO ORDERED.
G.R. No. 149552
March 10, 2010
GENERAL MILLING CORPORATION, Petitioner,
vs.
ERNESTO CASIO, ROLANDO IGOT, MARIO FAMADOR,
NELSON LIM, FELICISIMO BOOC, PROCOPIO
OBREGON, JR., and ANTONIO ANINIPOK, Respondents,
and
VIRGILIO PINO, PAULINO CABREROS, MA. LUNA P.
JUMAOAS, DOMINADOR BOOC, FIDEL VALLE,
BARTOLOME AUMAN, REMEGIO CABANTAN, LORETO
GONZAGA, EDILBERTO MENDOZA and ANTONIO
PANILAG, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:

[check the earlier pages for the contents]

EFFECTIVITY OF CBA
1. Ratification

G.R. No. 95013 September 21, 1994

Secretary of Labor and Employment Ruben D. Torres, In

OS-MA-A-5-167-90, which dismissed the petition for
certification election filed by petitioner TUPAS-FSM for
being prematurely filed. 1
The controlling facts, as culled from the records, are as
follows:
On March 23, 1990 TUPAS-FSM filed a petition for
certification election with the Regional Office No. IV of
the Department of Labor and Employment (DOLE), for
the purpose of choosing a bargaining representative for
the rank-and-file employees of Transunion Corporation's
industrial plant, situated in Canlubang, Laguna, known
as the Transunion Corporation-Glassware Division.
Petitioner had then secured a Certification , dated
March 22, 1990, issued by Tomas B. Bautista, Jr.,
Director IV of DOLE (Region IV), that "Transunion
Corporation" has no existing collective bargaining
agreement with any labor organization. 2
It appears, however, that before the filing of said petition,
or on November 15, 1989, Integrated Labor
Organization (ILO-Phils.) was duly certified by DOLE as
the sole and exclusive bargaining agent of the rank-andfile employees of Transunion Corporation-Glassware
Division. 3 On November 28, 1989, a collective bargaining
agreement (CBA) was the forged between TransunionGlassware Division and ILO-Phils. covering the company's
rank-and-file employees, The CBA, with a five-year
term from December 1, 1989 to December 1, 1994, was
ratified by a great majority of the rank-and -filers on
December 8, 1989. 4 In the meantime, the President of ILOPHILS died. An inter-union conflict followed and the subject
CBA was filed with DOLE, for registration purposes, only on
March 14, 1990, more or less, three (3) months from its
execution. Finally, on May 4, 1990, the Certification of
Registration was issued by DOLE through Regional
Director Romeo A. Young. 5
ILO-Phils., intervened in the certification election
proceedings initiated by TUPAS-FSM. It opposed the
petition in view of the existing CBA between ILO and the
Transunion Corporation-Glassware Division. It stresses
that the petition for certification election should be
entertained only during the freedom period, or sixty day
before the expiration of the CBA. Med-Arbiter Orlando S.
deal Cruz dismissed the petition on the ground of
prematurity.

TRADE UNIONS OF THE PHILIPPINES/FEBRUARY

SIX MOVEMENT TUPAS/FSM), petitioner,
vs.
HON BIENVENIDO LAGUESMA, TRANSUNION
CORPORATION-GLASS DIVISION, AND INTEGRATED
LABOR ORGANIZATION (ILOTUPAS-FSM appealed contending: (1) that pursuant to
PHILIPPINES), respondents.
Article 231 of the Labor Code. CBAs shall be file with the
Regional Office of the DOLE within thirty (30) days from
Alar, Comia, Manalo and Associates Law Offices for
the date of signing thereof; (2) that said requirement is
petitioner.
mandatory, although it would not affect the enforceability
of the CBA as between the parties thereto; and (3) since
Arcaya & Associates for Transunion Corp.-Glass
the CBA was filed outside the 30-day period specified
Division.
under Article 231 of the Labor Code, the prohibition
against certification election under Article 232 of the
same Code should not apply to third parties such as
Francisco A. Mercado, Jr. for Integrated Labor
petitioner.
Organization (ILO-Phils.)

PUNO, J.:
Petitioner Trade Unions of the Philippines-February Six
Movement (TUPAS-FSM) seeks the reversal of
theResolution, dated July 25, 1990, rendered by then

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As stated earlier, the Secretary of Labor and

Employment affirmed the impugned Order of the MedArbiter, ruling that the belated submission of the CBA
was excusable and that the requirement of the law was
substantially complied with upon the filing of a copy of
the CBA prior to the filing of the petition for certification
election. TUPAS-FSM then filed a motion for

reconsideration, but it was also denied, Hence, this

petition for certiorari where petitioner alleged:
GRAVE ABUSE OF DISCRETION ON
THE PART OF THE PUBLIC
RESPONDENTS AMOUNTING TO
LOSS OF JURISDICTION; and
THE RESOLUTION IS CONTRARY TO
THE FACTS AND THE LAW.
The petition lacks merit.
Petitioner raises both factual and legal issues in this
present petition.

existence of the CBA, to the exclusion of other labor

organizations, including petitioner, and no petition
questioning the majority status of the incumbent bargaining
agent shall be entertained, nor shall certification election be
conducted, outside of the fifty-day freedom period
immediately before the expiry date of the five-year term of
the CBA. 8

We now resolved the legal issue. Petitioner points out

that the subject CBA was filed beyond the 30-day period
prescribed under Article 231 of the Labor Code. It also
insists that under Article 232 of the Labor Code, the
prohibition on the filing of a petition for certification
election applies when the CBA had been duly registered
and, in this case, since the CBA was not registered in
accordance with the Art. 231, the prohibition will not
apply. We disagree.

First, the factual issues. Relying on the March 22, 1990

Dole Certification issued by Director Bautista, Jr., supra, Article 231 an s232 of the Labor Code read:
petitioner insists there was no existing CBA between
Transunion Corporation and any labor organization when
Art. 231. Registry of unions and file of
it filed its petition for certification election on March 23,
collective agreements. - . . . .
1990. To further strengthen its position, petitioner
charges that the filing of the CBA was antedated to
Within thirty (30) days from the execution
march 14, 1990, to make it appear that the same was
of a Collective Bargaining Agreement, the
already existing and filed before the filing of the petition
parties shall submit copies of the same
for certification election. Petitioner also claims that since
directly to the Bureau or the Regional
Article 231 of the Labor Code mandates DOLE to act on
Office of the Department of Labor and
the CBA filed in its office within Five (5) days from date of
Employment for registration
filing thereof, the subject CBA was filed on April 30,
accompanied with verified proofs of its
1990, or five (5) days before its registration on May 4,
posting n two conspicuous places in the
1990.
place of work and ratification by the
majority of all the workers in the
The argument deserves scant consideration. It is
bargaining unit. The Bureau or Regional
elementary that the special civil action
Office shall act upon the application for
for certiorari under Rule 65 of the Revised Rules of Court
registration of such Collective Bargaining
can be availed of to nullify or modify the proceedings
Agreement within five (5) days from
before the concerned tribunal, board, or officer
receipts thereof. The Regional Office
exercising judicial functions who has acted without or in
shall furnish the Bureau with a copy of
excess of its jurisdiction or with grave abuse of discretion
the Collective Bargaining agreement
and there is no appeal, nor any plain, speedy, and
within five (5) days form its submission.
adequate remedy in the ordinary course of law. This
Court is not a trier of facts and it is not its function to
xxx xxx xxx
examine and evaluate the probative value of all evidence
presented to the concerned tribunal which formed the
Art. 232. Prohibition on Certification
basis of its impugned decision, resolution or
Election. The Bureau shall not
6
order. Following this hoary rule, it is inappropriate to
entertain any petition for certification
review the factual findings of the Med-arbiter and the
election or any other action which may
Secretary of Labor, regarding the date of filing of the CBA
disturb the administration of duly
on March 14, 1990 prior to the filing of the petition for
registered existing collective bargaining
certification election; the company's voluntary recognition
agreement affecting the parties except
and DOLE's certification of ILO-PHILS. as the sole and
under Articles 253, 253-A and 256 of this
exclusive bargaining representative of the rank-and-file
Code.
employees of Transunion Corporation-Glassware Division;
and the subsequent registration of the CBA. They are
binding on this Court as they are supported by substantial
Corollary thereto, Article 253-A of the same Code reads:
evidence. In contrast, petitioners bare allegation pertaining
to the "antedating" of the date of filing of the CBA is
Art. 253-A. Any Collective Bargaining
unsubstantiated and based purely on conjectures.
Agreement that the parties may enter into
shall, insofar as the representation
It is crystal clear from the records that the rank-and- file
aspect is concerned, be for a term of five
employees of private respondent's Glassware Division
(5) years. No petition questioning agent
are, at present, represented by ILO-PHILS. Hence,
shall be entertained and no certification
petitioner's reliance on the March 22, 1990 Certification
election shall be conducted by the
issued by Director Bautista, Jr., is misplaced. The
Department of Labor and Employment
existence and filing of their CBA was confirmed in a
outside the sixty-day period immediately
Certification, dated April 24, 1990, issued by Director
before the date of expiry of such five year
Romeo A. Young of DOLE-Region IV. 7 The Certification of
term of the Collective Bargaining
ILO-PHILS. "as the sole and exclusive bargaining agent of
Agreement. . . . .
the rank-and-file workers of Transunion-Glassware
Division," means it shall remain as such during the
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i am destined to be a LAWYER

It appears that the procedural requirement of filing the

CBA within 30 days from date of execution under Article
231 was not met. The subject CBA was executed on
November 28, 1989. It was ratified on December 8,
1989, and then filed with DOLE for registration purposes
on March 14, 1990. Be that as it may, the delay in the
filing of the CBA was sufficiently explained, i.e., there
was an inter-union conflict on who would succeed to the
presidency of ILO-PHILS. The CBA was registered by
the DOLE only on May 4, 1990. It would be injudicious
for us to assume, as what petitioner did, that the said
CBA was filed only on April 30, 1990, or five (5) days
before its registration, on the unsupported surmise that it
was done to suit the law that enjoins Regional Offices of
Dole to act upon an application for registration of a CBA
within five (5) days from its receipt thereof. In the
absence of any substantial evidence that DOLE officials
or personnel, in collusion with private respondent, had
antedated the filing date of the CBA, the presumption on
regularity in the performance of official functions hold.
More importantly, non-compliance with the cited
procedural requirement should not adversely affect the
substantive validity of the CBA between ILO-PHILS and
the Transunion Corporation-Glassware Division covering
the company's rank and file employees. A collective
bargaining agreement is more than a contract. It is highly
impressed with public interest for it is an essential
instrument to promote industrial peace. Hence, it bears
the blessings not only of the employer and employees
concerned but even the Department of Labor and
Employment. To set it aside on technical grounds is not
conducive to the public good.
IN VIEW WHEREOF, the impugned July 25, 1990
Resolution, and August 23, 1990 Order of Secretary
Ruben D. Torres and Undersecretary Bienvenido E.
Laguesma. respectively, in OS-MA-A-5-167-90, is
AFFIRMED in toto. Costs against petitioned.
SO ORDERED.
2. Effectivity of CBA concluded late

G.R. No. 99395 June 29, 1993

ST. LUKE'S MEDICAL CENTER, INC., petitioner,
vs.
HON. RUBEN O. TORRES and ST. LUKE'S MEDICAL
CENTER ASSOCIATION-ALLIANCE OF FILIPINO
WORKERS ("SLMCEA-AFW"), respondents.
Sofronio A. Ona for petitioner.
Edgar R. Martir for respondent union.

MELO, J.:
In response to the mandate under Article 263(g) of the
Labor Code and amidst the labor controversy between
petitioner St. Luke's Medical Center and private
respondent St. Luke's Medical Center Employees
Association-Alliance of Filipino Workers (SLMCEAAFW), then Secretary of Labor Ruben D. Torres, issued
the Order of January 28, 1991 requiring the parties to

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execute and finalize their 1990-1993 collective

bargaining agreement (CBA) to retroact to the expiration
of the anterior CBA. The parties were also instructed to
incorporate in the new CBA the disposition on economic
and non-economic issues spelled out in said Order (p.
48, Rollo). Separate motions for re-evaluation from the
parties were to no avail; hence, the petition at bar
premised on the following ascriptions of error, to wit:
I
PUBLIC RESPONDENT HON.
SECRETARY OF LABOR ACTED IN
EXCESS OF JURISDICTION AND/OR
COMMITTED GRAVE ABUSE OF
DISCRETION WHEN HE VIOLATED
PETITIONER'S RIGHT TO DUE
PROCESS, PUBLIC RESPONDENT
COMPLETELY IGNORED THE
LATTER'S EVIDENCE AND ISSUED
THE QUESTIONED AWARDS ON THE
BASIS OF ARBITRARY GUESSWORKS,
CONJECTURES AND INFERENCES.
II
PUBLIC RESPONDENT COMMITTED
GRAVE ABUSE OF DISCRETION
WHEN HE CURTAILED THE PARTIES'
RIGHT TO FREE COLLECTIVE
BARGAINING, AND WHEN HE
GRANTED MONETARY AWARDS AND
ADDITIONAL BENEFITS TO THE
EMPLOYEES GROSSLY
DISPROPORTIONATE TO THE
OPERATING INCOME OF PETITIONER.
III
PUBLIC RESPONDENT COMMITTED
GRAVE ABUSE OF DISCRETION
WHEN HE ADOPTED/CONSIDERED
THE ALLEGATIONS OF THE UNION
THAT THE HOSPITAL OFFERED
SALARY AND MEAL ALLOWANCE
INCREASES IN THE AMOUNT OF
P1,140,00 FOR THE FIRST YEAR AND
P700.00 ACROSS THE BOARD
MONTHLY SALARY INCREASES FOR
THE SECOND AND THIRD YEARS OF
THE NEW CBA.
IV
FINALLY, PUBLIC RESPONDENT
COMMITTED GRAVE ABUSE OF
DISCRETION WHEN HE GAVE HIS
AWARD RETROACTIVE EFFECT.
When the collective bargaining agreement for the period
August 1, 1987 to July 30, 1990 was forged between
petitioner and private respondent, the incumbent national
president of AFW, the federation to which the local union
SLMCEA is affiliated, was Gregorio del Prado.
Before the expiration of the 1987-90 CBA, the AFW was
plagued by internal squabble splitting its leadership
between Del Prado and Purita Ramirez, resulting in the

filing by AFW and Del Prado of a petition later docketed

economic issues raised in the petition. On the economic
before the Department of Labor as NCR-00-M-90-05issues, he thus ruled:
077, where a declaration was sought on the legitimacy of
Del Prado's faction as bona fide officers of the
First year P1,140.00 broken down as
federation. Pending resolution of said case, herein
follows: P510.00 in compliance with the
private respondent SLMCEA-AFW brought to the
government mandated daily salary
attention of petitioner via a letter dated July 4, 1990 that
increase of P17.00; and P630.00 CBA
the 1987-1990 was about to expire, and manifested in
across the board monthly salary
the process that private respondent wanted to renew the
increase.
CBA. This development triggered round-table talks on
which occasions petitioner proposed, among other items,
Second year P700.00 across the
a maximum across-the-board monthly salary increase of
board monthly salary increase.
P375.00 per employee, to which proposal private
respondent demanded a P1,500.00 hike or 50%
Third year P700.00 across the board
increase based on the latest salary rate of each
monthly salary increase.
employee, whichever is higher.
In the meantime, relative to the interpleader case (NCR00-M-90-05-070) initiated by petitioner to settle the
question as to who between Del Prado and Diwa was
authorized to collect federation dues assessed from
hospital employees, the Med-Arbiter recognized Del
Prado's right (p. 423, Rollo). This resolution of July 31,
1990 was elevated to the Labor Secretary.
That talks that then ensued between petitioner and
private respondent were disturbed anew when the other
wing in the AFW headed by Purita Ramirez, expressed
its objections to the on-going negotiations, and when a
petition for certification election was filed by the
Association of Democratic Labor Organization of
petitioner. However, private respondent emerged
victorious after the elections and was thus certified as
the exclusive bargaining entity of petitioner's rank and
file employees.
Following the decision dated September 14, 1990 in
NCR-00-M-90-05-077 (pp. 444-445, Rollo) which upheld
the legitimacy of Del Prado's
status including the other officers, Bayani Diwa of the
Ramirez Wing
appealed; the two cases NCR-00-M-90-05-070 for
interpleader and NCR-00-90-05-077 were
consolidated.
On September 17, 1990, private respondent wrote
petitioner for the resumption of their negotiations
concerning the union's proposed CBA. Petitioner reacted
by writing a letter on September 20, 1990 expressing
willingness to negotiate a new CBA for the rank and file
employees who are not occupying confidential positions.
Negotiations thus resumed. However, a deadlock on
issues, especially that bearing on across-the-board
monthly and meal allowances followed and to pre-empt
the impending strike as voted upon by a majority of
private respondent's membership, petitioner lodged the
petition below. The Secretary of Labor immediately
assumed jurisdiction and the parties submitted their
respective pleadings.
On January 22, 1991, a resolution was issued in the
consolidated cases which eventually declared Gregorio
del Prado and his group as the legitimate officials of the
AFW and the acknowledged group to represent AFW
(pp. 320-321, Rollo).
On January 28, 1991, public respondent Secretary of
Labor issued the Order now under challenge. Said Order
contained a disposition on both the economic and non-

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It is understood that the second and third

year salary increases shall not be
chargeable to future government
mandated wage increases. (p. 47, Rollo.)
As earlier stated, both parties moved for reconsideration
of the above order, but both motions were denied.
Consequently, petitioner St. Luke's filed the instant
petition, a special civil action on certiorari.
In assailing the Order of January 28, 1991, petitioner St.
Luke's focuses on public respondent's disposition of the
economic issues.
First, petitioner finds highly questionable the very basis
of public respondent's decision to award P1,140.00 as
salary and meal allowance increases for the first year
and P700.00 across-the-board monthly salary increases
for the succeeding second and third years of the new
CBA. According to petitioner, private respondent
SLMCEA-AFW misled public respondent into believing
that said amounts were the last offer of petitioner St.
Luke's immediately prior to the deadlock. Petitioner
vehemently denies having made such offer, claiming that
its only offer consists of the following:
Non-Economic Issues:
St. Luke's submits that it is adopting the
non-economic issues proposed and
agreed upon in its Collective Bargaining
Agreement with SLMCEA-AFW for the
period covering 1987, 1990. Copy of the
CBA is attached as Annex "F" hereof.
Economic Issue
St. Luke's respectfully offers to give an
increase to all its rank and file employees
computed as follows:
First Year P900
(P700.00 basic + P200.00
food allowance) for an
over all total food
allowance of P320.00.
Second Year P400
Third Year P400

plus the union will be allowed to operate

and manage one (1) canteen for free to
augment their funds. Although the profit
shall be divided equally between union
and SLMC, the operation of the canteen
will generate for them a monthly income
of no less than P15,000.00, and likewise
provide cheap and subsidized food to
Union members.
The wage increase as proposed shall be
credited to whatever increases in the
minimum wage or to any across the
board increases that may be mandated
by the government or the DOLE. (pp. 2021,Rollo.)
Petitioner charges that public respondent, in making
such award, erroneously relied on the extrapolated
figures provided by respondent SLMCEA-AFW, which
grossly inflated petitioner St. Luke's net income.
Petitioner contends that if the disputed award are
sustained, the wage increases and benefits shall total
approximately P194,403,000.00 which it claims is
excessive and unreasonable, considering that said
aggregate amount is more than its projected income for
the next three years. To illustrate its point, petitioner
submits the following computation:
YR I
A. P1,40 added to basic pay
a) P1,140 x 1,500 (no. of employees) x
12 (months) P 20,520,000
b) 13th month pay: P1,140 x 1,500
1,710,000
c) Overtime pay, 20% of payroll
4,104,000
d) Holiday pay, PM/Night pay
1,026,000
e) Sick leave 855,000
f) Funeral, Paternity, Maternity leaves,
retirement
pay 820,000
B. P230 added to meal allowance
a) P230 x 1,500 x 12 4,140,000

FIRST YEAR
ADDITIONAL COST P
36,561,000
YR II
A. Yr I increase except sick leave cash
conversion
from 60 to 45 P33,897,000
B. P700 added to monthly basic pay
a) P700 x 1,500 x 12 2,600,000
b) 13th month pay: P700 x 1,500
1,050,000
c) Overtime, pay, 20% of P12.6 M
2,520,000
d) Holiday pay, PM/Night pay 630,000
e) Sick leave: 15 days x 700/30 x 1,500
525,000
f) Funeral, paternity, maternity leaves,
retirement pay 504,000

SECOND YEAR ADDITIONAL

COST P51,726,000
YR III
A. Yr I and Yr II increases 88,287,000
B. P700 added to basic pay
a) P700 x 1,500 x 12
12,600,000
b) 13th month pay: P700 x 1,500
1,050,000
c) Overtime pay, 20% of P12.6 M
2,520,000
d) Holiday pay, PM/Night pay
630,000
e) Sick leave 525,000
f) Funeral, paternity, maternity,
leaves,
retirement pay 504,000

THIRD YEAR ADDITIONAL

COST 106,116,000
TOTAL THREE-YEAR
ADDITIONAL

C. One day added to sick leave

a) (Ave. pay P3,000 = P1,140) divided by
30 x 1,500 222,000

BENEFIT/WAGES
194,403,000
(pp. 14-16, Rollo).

D. Sick leave cash conversion base reduced

from 60 to 45 days
a) (P3,300 = P1,140)/30 x 1,200
2,664,000
E. Retirement benefits adjustment 500,000

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On the basis of the foregoing, petitioner St. Luke's

concludes that it would be in a very poor position to even
produce the resources necessary to pay the wage
increases of its rank and file employees.

Petitioner also impugns public respondent's awards on

grounds of prematurity, emphasizing that the awards in
question even preceded collective bargaining
negotiations which have to take place first between both
litigants. It denies entering into a round of negotiations
with private respondent SLMCEA-AFW on the theory
that the meetings referred to by the latter were merely
informal ones, without any binding effect on the parties
because AFW is torn between two factions vying for the
right to represent it. Thus, petitioner maintains that
nothing conclusive on the terms and conditions of the
proposed CBA could be arrived at when the other party,
private respondent SLMCEA-AFW is confronted with an
unresolved representation issue.
Petitioner argues further that since no formal
negotiations were conducted, it could not have possibly
made an offer of P1,140.00 as salary and meal
allowance increases for the first year and an increase of
P700.00 across-the-board monthly salary for the second
and third years of the new CBA. It raises doubts on the
veracity of the minutes presented by private respondent
SLMCEA-AFW to prove that negotiations were held,
particularly on October 26, 1990, when petitioner
allegedly made said offer as its last ditch effort for a
compromise prior to the deadlock. According to
petitioner, these minutes, unsigned by petitioner, were
merely concocted by private respondent SLMCEA-AFW.
Finally, petitioner attacks the Order of January 28, 1991
for being violative of Article 253-A of the Labor Code,
particularly its provisions on retroactivity. Said Article
pertinently provides:
xxx xxx xxx
Any agreement on such other provisions
of the collective bargaining agreement
entered into within six (6) months from
the date of expiry of the term of such
other provisions as fixed in the collective
bargaining agreement, shall retroact to
the day immediately following such date.
If any such agreement is entered into
beyond six months, the parties shall
agree on the duration of retroactivity
thereof. In case of a deadlock in the
renegotiation of the collective bargaining
agreement, the parties may exercise their
rights under this Code.
Petitioner argues that in granting retroactive effect to the
enforceability of the CBA, public respondent committed
an act contrary to the above provision of law, pointing out
that the old CBA expired on July 30, 1990 and the
questioned order was issued on January 28, 1991.
Petitioner theorizes that following Article 13 of the Civil
Code which provides that there are 30 days in one
month, the questioned Order of January 28, 1991 was
issued beyond the six-month period, graphically shown
thus:
July 30, 1990 Expiration
July 31 = 1 day
August 1-31, 1990 = 31
days
September 1-30, 1990 =
30 days

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October 1-31, 1990 = 31

days
November 1-30, 1990 =
30 days
December 1-31, 1990 =
31 days
January 1-28, 1991 = 28
days

TOTAL = 182 days

(6 months and 2 days)
(p. 34, Rollo.)
Traversing petitioner's arguments, private respondent
SLMCEA-AFW contends that the formulation of the
terms and conditions of the CBA awards is well
supported by the factual findings of public respondent
which established that petitioner failed to refute private
respondent's allegation that during their last meeting on
October 26, 1990, petitioner stood pat on its offer of
P1,140.00 as salary and meal allowance increases for
the first year of the new CBA and P700.00 across-theboard salary increases for the second and third years
thereof. Said awards, it said, are well within the means of
petitioner because its reported net income of P15 million,
P11 million, and 13 million for 1987, 1988, and 1989,
respectively, have been actually understated. Moreover,
private respondent claims that petitioner, in actual terms,
does not have to pay the alleged amount of
P194,403,000.00 for wages and benefits in favor of its
employees. Such amount, according to private
respondent, is bloated and excessive. Private
respondent in substantiating such claim made the
following analysis:
First P1,140.00 total salary increase for
the first year (1990-1991) of the new
CBA is divided into: P510.00 in
compliance with the government
mandated daily salary increase of P17.00
and P630.00 CBA across the board
monthly salary increase, thus, the whole
P1,140.00 salary increase is payable
only beginning August 1, 1990 (reckoned
from the CBA July 30, 1990 expiry date)
up to October 31, 1990 only following the
November 1, 1990 effectivity of WAGE
ORDER NO. NCR-01 which granted the
said P17.00 daily wage increase or
P510.00 monthly of
which herein petitioner promptly complied
with and paid to its employees and
therefore deductible from P1,140.00 total
monthly salary increase (Annex "A"
Petitioner and Annex "13" hereof);
Second, the remaining P630.00 CBA
across the board monthly salary increase
takes effect on November 1, 1990 up to
January 7, 1991 only following the
January 8, 1991 effectivity of WAGE
ORDER NO. NCR-02 which mandated
P12.00 daily wage increase or P630.00
monthly, hence, reducing the P630.00
CBA monthly salary increase to P270.00
CBA monthly salary increase effective

January 8, 1991 and onwards till July 31,

1991 (Annexes "22" and "23" hereof);
Third, that out of an estimated workforce
of 1,264 regular employees inclusive of
about 209 supervisors, unit, junior area,
division department managers and top
level executives, all occupying
permanent positions, and approximately
55 regular but highly confidential
employees, only 1,000 rank-and-file
regular/permanent employees (casuals,
contractuals, probies and security guards
excluded) are entitled to the CBA benefits
for three (3) years (1990-1993) (as
private respondent SLMCEA-AFW
gathered and analyzed from the
petitioner's Personnel Strength Report
hereto attached as Annex "28"
hereof) vis-a-vis the generalized and
inflated 1,500 employees as total
workforce purportedly entitled to CBA
benefits per its self-serving and incredible
computation;
Fourth, the petitioner's computed 20%
overtime pay of the basic salary is
unrealistic and overstated in view of its
extreme cost-cutting/ savings measures
on all expenditures, most specially, on
overtime work adopted since last year
and a continuing management priority
project up to the present; and

"A" and "G" Petition). (pp. 390391, Rollo.)

Private respondent concludes that petitioner's version
that it will have to pay P194,403,000.00 is not true
because this will be drastically reduced by 40% to 60%
in real terms due to a smaller number of employees
covered. It is further explained that the governmentdecreed wage increases abovementioned already form
part of the P1,140.00 wage and meal allowance
increases, not to mention the strict cost-cutting
measures and practices on overtime and expense items
adopted by petitioner since 1990.
With respect to public respondent's ruling that the CBA
awards should be given retroactive effect, private
respondent agrees with the Labor Secretary's view that
Article 253-A of the Labor Code does not apply to arbitral
awards such as those involved in the instant case.
According to private respondent, Article 253-A of the
Labor Code is clear and plain on its face as referring
only to collective bargaining agreements entered into by
management and the certified exclusive bargaining
agent of all rank-and-file employees therein within six (6)
months from the expiry of the old CBA.
These foregoing contentions and arguments of private
respondent have been similarly put forward by the Office
of the Solicitor General in its Consolidated Comment
filed on November 23, 1991. The Solicitor General share
a the views of private respondent SLMCEA-AFW.

We are now tasked to rule on the petition. Do petitioner's

evidence and arguments provide adequate basis for the
Fifth, due to the above consideration, the charge of alleged grave abuse of discretion committed
total real award of wages and fringe
by public respondent in his Order of January 28, 1991 as
benefits is far less than the true annual
to warrant its annulment by this Court? This is the sole
hefty operating net income of the
issue in the case at bar. Consequently, this Court would
petitioner.
apply the following yardstick in resolving the aforestated
issue: that public respondent, in the exercise of his
The net result is that the first year award power to assume over subject labor dispute, acted
of P1,140.00 monthly salary increase of
whimsically, capriciously, or in an arbitrary, despotic
which P510.00 monthly salary increase is manner by reason of passion or personal hostility which
made in compliance with the P510.00
was so patent and gross as to amount to an evasion of
monthly wage increase at P17.00 daily
positive duty or to a virtual refusal to perform a duty
wage increase effective November 1,
enjoined or to act at all in contemplation of law (San
1990 under Wage Order No. NCR-01
Sebastian College vs. Court of Appeals, 197 SCRA 138
(Annex "13" hereof) or with the intended
[1991]).
P630.00 CBA monthly salary increase is
further reduced by P360.00 monthly
Subjected to and measure by this test, the challenged
wage increase at P12.00 daily wage
Order, we believe, can withstand even the most rigorous
increase effective January 8, 1991 under scrutiny.
Wage Order No.
NCR-02 (Annex "22" hereof), thereby
Petitioner assails the Order of January 28, 1991 on three
leaving a downgraded or watered down
grounds:
CBA monthly increase of P270.00 only.
(a) unreasonable and baselessness; (b) prematurity; and
Comparatively speaking, the 13%
monthly salary increase of each
employee average basic monthly salary
of P2,500.00 in 1987 or P325.00 monthly
salary increase granted by the petitioner
under the first old CBA (1987-1990) is
better than the much diluted P270.00
CBA monthly salary increase (in lieu of
the awarded P630.00 CBA monthly
salary increase for the first year of the
new CBA under Order, dated January 28,
1991, of public respondent). (Annexes

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(c) violation of Article 253-A of the Labor Code.

We rule that the Order, particularly in its disposition on
the economic issues, was not arbitrarily imposed by
public respondent. A perusal of the Order shows that
public respondent took into consideration the parties'
respective contentions, a clear indication that he was
keenly aware of their contrary positions. Both sides
having been heard, they were allowed to present their
respective evidence. The due process requirement was
thus clearly observed. Considering public respondent's
expertise on the subject and his observance of the

cardinal principles of due process, the assailed Order

deserves to be accorded great respect by this Court.
Equally worth mentioning is the fact that in resolving the
economic issues, public respondent merely adopted in
toto petitioner's proposals. Consequently, petitioner
cannot now claim that the awards are unreasonable and
baseless. Neither can it deny having made such
proposals, as it attempted to do in its Motion for
Reconsideration of the challenged Order before public
respondent and which it continues to pursue in the
instant petition. It is too late in the day for such pretense,
especially so because petitioner failed to controvert
private respondent's allegation contained in its Comment
to the petition before the Labor Secretary that petitioner
had offered as its last proposal said salary and meal
allowance increases. As correctly pointed out by public
respondent, petitioner failed, when it had the chance, to
rebut the same in its Reply to said Comment,
considering that the resolution of the labor dispute at that
was still pending. Any objection on this point is thus
deemed waived.

essential purpose was the affiliation of

the local unions into a common
enterprise to increase by collective action
the common bargaining power in respect
of the terms and conditions of labor. Yet
the locals remained the basic units of
association, free to serve their own and
the common interest of all, subject to the
restraints imposed by the Constitution
and By-Laws of the Association, and free
also to renounce the affiliation for mutual
welfare upon the terms laid down in the
agreement which brought it into
existence. (at p. 688; emphasis in the
original.)
Appending "AFW" to the local union's name does not
mean that the federation absorbed the latter. No such
merger can be construed. Rather, what is conveyed is
the idea of affiliation, with the local union and the larger
national federation retaining their separate personalities.

Petitioner cannot pretend to be unaware of these legal

We do not see merit in petitioner's theory that the awards principles since they enjoy the benefit of legal advice
were granted prematurely. In its effort to persuade this
from their distinguished counsel. Thus, we are
Court along this point, petitioner denies having
constrained to agree with the position of the Solicitor
negotiated with private respondent SLMCEA-AFW.
General that petitioner conveniently used the
Petitioner collectively refers to all the talks conducted
representation issue within AFW to skirt entering into
with private respondent as mere informal negotiations
bargaining negotiations with the private respondent.
due to the representation issue involving AFW. Petitioner
thus argues that in the absence of any formal
Too, petitioner is in error in contending that the order was
negotiations, no collective bargaining could have taken
prematurely issued. It must be recalled that immediately
place. Public respondent, petitioner avers, should have
after the deadlock in the talks, it was petitioner which
required the parties instead to negotiate rather than
filed a petition with the Secretary of Labor for the latter to
prematurely issuing his order.
assume jurisdiction over the labor dispute. In effect,
petitioner submitted itself to the public respondent's
We cannot agree with this line of reasoning. It is
authority and recognized the latter's power to settle the
immaterial whether the representation issue within AFW labor dispute pursuant to article 263(g) of the Labor
has been resolved with finality or not. Said squabble
Code granting him the power and authority to decide the
could not possibly serve as a bar to any collective
dispute. It cannot, therefore, be said that public
bargaining since AFW is not the real party-in-interest to
respondent's decision to grant the awards is premature
the talks; rather, the negotiations were confined to
and pre-emptive of the parties' right to collectively
petitioner and the local union SLMCEA which is affiliated bargain, simply because the Order of January 28, 1991
to AFW. Only the collective bargaining agent, the local
was unfavorable to one or the other party, for as we held
union SLMCEA in this case, possesses legal standing to in Saulog Transit, Inc. vs.Lazaro, (128 SCRA 591
negotiate with petitioner. A duly registered local union
[1984]):
affiliated with a national union or federation does not lose
its legal personality or independence (Adamson and
It is a settled rule that a party cannot
Adamson, Inc. vs. The Court of Industrial Relations and
invoke the jurisdiction of a court to secure
Adamson and Adamson Supervising Union (FFW), 127
affirmative relief against his opponent
SCRA 268 [1984]). InElisco-Elirol Labor Union (NAFLU)
and after failing to obtain such relief,
vs. Noriel (180 SCRA 681 [1977]), then Justice
repudiate or question that same
Teehankee re-echoed the words of Justice Esguerra
jurisdiction. A party cannot invoke
in Liberty Cotton Mills Workers Union vs. Liberty Cotton
jurisdiction at one time and reject it at
Mills, Inc. (66 SCRA 512 [1975]), thus:
another time in the same controversy to
suit its interests and convenience. The
(T)he locals are separate and distinct
Court frowns upon and does not tolerate
units primarily designed to secure and
the undesirable practice of same litigants
maintain an equality of bargaining power
who submit voluntarily a cause and then
between the employer and their
accepting the judgment when favorable
employee-members in the economic
to them and attacking it for lack of
struggle for the fruits of the joint
jurisdiction when adverse. (Tajonera v.
productive effort of labor and capital;
Lamaroxa, 110 SCRA 447, citing Tijam v.
and the association of the locals into the
Sibonghanoy, 23 SCRA 35). (at p. 601.)
national union (as PAFLU) was in
furtherance of the same end. These
Finally, the effectivity of the Order of January 28, 1991,
associations are consensual entities
must retroact to the date of the expiration of the previous
capable of entering into such legal
CBA, contrary to the position of petitioner. Under the
relations with their members. The
circumstances of the case, Article 253-A cannot be

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property applied to herein case. As correctly stated by

public respondent in his assailed Order of April 12, 1991
dismissing petitioner's Motion for Reconsideration
Anent the alleged lack of basis for the
retroactivity provisions awarded, we
would stress that the provision of law
invoked by the Hospital, Article 253-A of
the Labor Code, speak of agreements by
and between the parties, and not arbitral
awards . . . (p. 818, Rollo.)
Therefore, in the absence of a specific provision of law
prohibiting retroactivity of the effectivity of arbitral awards
issued by the Secretary of Labor pursuant to Article 263
(g) of the Labor Code, such as herein involved, public
respondent is deemed vested with plenary and
discretionary powers to determine the effectivity thereof.
WHEREFORE, the instant petition is hereby
DISMISSED for lack of merit.
SO ORDERED.
3. Effectivity of CBA during 60-dy freedom
period
4. Effectivity of NO STRIKE CLAUSE

G.R. No. L-34948-49 May 15, 1979

PHILIPPINE METAL FOUNDRIES INC., petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, REGAL
MANUFACTURING EMPLOYEES ASSOCIATION
REGEMAS and CELESTINO BAYLON, respondents.
V. E. del Rosario & A associates for petitioner.
Rufino B. Risma for private respondents.

ANTONIO, J.:
The Philippine Metal Foundries, Inc. (now dissolved and
merged with Shriro [Philippines] Inc.) is in this case a
review of the decision of the Court of Industrial Relations
in Cases Nos. 3932-ULP and 3941-ULP .
Petitioner, in its complaint dated November 21, 1963
(Case No. 3941-ULP), charged the Regal Manufacturing
Employees Associations FTUP and its members (herein
private respondents), with unfair labor practice for
declaring a strike on October 5, 1963 and picketing the
company's premises without filing a notice of strike in
spite of the existence of a no strike, no lockout clause
and grievance procedure in the collective bargaining
agreement entered into between the petitioner and the
Union. In their answer to this complaint, the Union and
its members denied the charge and, as affirmative
defense, alleged that on October 3, 1963, the Union
requested the management for a grievance conference,
stating in its invitation the time and place of meeting, but
the company, through its General Manager, refused and
instead handed the Union's President a memorandum
dismissing him from work and told the Union members

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not to report for work, which is in violation of the no

lockout and no strike clause of the contract.
Upon the other hand, petitioner Philippine Metal
Foundries, Inc. and its General Manager, in Case No.
3932-ULP, were charged by private respondents on July
21, 1964 with unfair labor practice for the dismissal of
Celestino Baylon, President of the Union, on October 3,
1963, allegedly due to his union activities in representing
and protecting the Union members in their relations with
the petitioner. To this complaint, petitioner and its
manager filed an answer denying the material
allegations and alleged as affirmative defenses, among
others, that on October 3, 1963, the company was
constrained to terminate the services of Baylon by
reason of the fact that he had, in spite of repeated
notices and warnings from the company, frequently and
repeatedly absented himself from his work as foundry
worker and by reason of said dismissal he, as President
of the Union as well as an officer of the FTUP
encouraged and abetted the staging of a strike on
October 5, 1963, without prior notice to the company or
any of the latter's officials, in gross violation of a
stipulation provided in their Collective Bargain
Agreement, establishing pickets and blocking ingress
and egress to and from the company's premises,
causing interruption of the work and/or business of the
company to its serious damage and prejudice.
After holding joint trial on these two cases, the Court of
Industrial Relations rendered its decision, finding that
Baylon, as Union President, was discharged for his
union activities and that the employees declared a strike
because they believed in good faith that the dismissal of
their President was an unfair labor practice. The Court
declared respondents Philippine Metal Foundries, Inc.
and Leopoldo Relunia in Case No. 3932-ULP, guilty of
unfair labor practice in dismissing complainant Celestino
Baylon; ordered respondents to reinstate Celestino
Baylon to his former position with all the rights and
privileges formerly appertaining thereto, with one (1)
year back wages computed from October 3, 1963; and
dismissed the petitioner's charge in Case No. 3941-ULP.
Its motion for reconsideration having been denied by the
Court of Industrial Relations en banc, petitioner filed the
present petition which was considered by this Court as
submitted for decision without respondents' brief.
The issues raised are: (1) whether Celestino Baylon was
dismissed due to his absences or to his union activities
as Union President; and (2) whether the strike declared
by the Union on October 5, 1963, is legal or not.
With respect to the first issue, it is argued by petitioner
that according to the Collective Bargaining Agreement
between the Union and the company "one absent for a
period of one week who fails to give notice thereof shall
be dropped automatically" and under its Disciplinary
Policies and Procedures, dated and enforced since
March 1, 1963, absence of an employee without
permission for a period of seven (7) consecutive
calendar days is a ground for immediate dismissal upon
establishment of guilt; that since the Court of Industrial
Relations found that Baylon incurred numerous
absences from January to September 1963, broken
dowm as follows: for the month of January, one (1)
unexcused absence; March one (1) unexcused absence
and twelve (12) consecutive absences without

permission; April, four (4) consecutive absences without

permission; May, two (2) absences without permission;
and September, five (5) unexcused absences, the said
court erred in holding that in Case No. 3932-ULP, Baylon
was dismissed not because of his absences but rather
due to his being Union President and union activities.
In determining whether a discharge is discriminatory, the
true reason for the discharge must be established. It has
been said that while union activity is no bar to a
discharge, the existence of a lawful cause for discharge
is no defense if the employee was actually discharged
for union activity. There is no question that Celestino
Baylon incurred numerous absences from January to
September 1963. Had the company wanted to terminate
his services on the ground of absences, it could have
done so, pursuant to Article V of the Collective
Bargaining Agreement as early as March 1963 when he
incurred twelve (12) consecutive absences without
permission. Its failure to do so shows that the infractions
commited by Baylon were disregarded. The Court of
Industrial Relations found that Baylon went to the
company on September 28, 1963, but did not work as he
was very sleepy. When he reported for work on October
1, 1963, he submitted a written explanation for his
absences which was received by the company. Two (2)
days later, as President of the Union, he invited the
General Manager of the company for a grievance
conference to thresh out union problems at the D & E
Restaurant at 6:00 p.m. of October 5, 1963. The letter of
invitation was received by the company at almost 12:45
noon of October 3, 1963. At 2:45 p. m. of the same day,
Baylon was in turn handed his termination letter. Under
the attendant circumstances, We believe the Court of
Industrial Relations was justified in concluding that:

The question of whether an employee was discharged

because of his union activities is essentially a question of
fact as to which the findings of the Court of Industrial
Relations are conclusive and binding if supported by
substantial evidence considering the record as a
whole. 1 This is so because the Industrial Court is governed
by the rule of substantial evidence, rather than by the rule
of preponderance of evidence as in any ordinary civil
cases. 2 Substantial evidence has been defined as such
relevant evidence as a reasonable mind might accept as
adequate to support a conclusion. 3 It means such evidence
which affords a substantial basis from which the fact in
issue can be reasonably inferred. 4 Examining the evidence
on hand on this matter, We find the same to be substantially
supported.
Although a man's motive, like his intent, is, in the words
of Lord Justice Bowen "as much a fact as the state of his
digestion", evidence of such fact may consist both direct
testimony by one whose motive is in question and of
inferences of probability drawn from the totality of other
facts. 5

It is admitted by petitioner that it accepted the invitation

of Baylon for a grievance conference on October 5,
1963. Yet, two hours after it accepted the letter of
invitation, it dismissed Baylon without prior notice and/or
investigation. Such dismissal is undoubtedly an unfair
labor practice committed by the company. Under these
facts and circumstances, Baylon and the members of the
Union had valid reasons to ignore the schedule
grievance conference and declared a strike. When the
Union declared a strike in the belief that the dismissal of
Baylon was due to union activities, said strike was not
illegal . 6 It is not even required that there be in fact an
unfair labor practice committed by the employer. It suffices,
if such a belief in good faith is entertained by labor, as the
In 1963, Baylon had been a habitual
inducing factor for staging a strike. 7 The strike declared by
absentee. His excused absences for
the Union in this case cannot be considered a violation of
causes other than sickness, sick leave
the "no strike" clause of the Collective Bargaining
and vacation leave, total two (2) in
Agreement because it was due to the unfair labor practice
January; nine (9) in February; eleven (11) of the employer. Moreover, a no strike clause prohibition in
in April; ten (10) in May; nine (9) in June; a Collective Bargaining Agreement is applicable only to
eleven (11) in July; and five (5) in August economic strikes. 8
(Exhs. '5' and '5-A').
The strike cannot be declared as illegal for lack of notice.
This record, plus his numerous tardiness In strikes arising out of and against a company's unfair
and half-day work, and the aforesaid
labor practice, a strike notice is not necessary in view of
unexcused absences, show how little
the strike being founded on urgent necessity and
work for the employer Baylon had been
directed against practices condemned by public policy,
doing as an employee (Exhs. 'EE' and '6- such notice being legally re. required only in cases of
A'). His last unexcused absence in
economic strikes. 9
September must have been just enough
on the part of the company to withdraw
On the contention of petitioner that the grievance
its special treatment of Baylon as union
conference which Baylon requested to be held on
president (Exh 'EE').
October 5, 1963 was not for the purpose of discussing
union problems but of his dismissal, it is clearly shown in
This Court believes, however, that it was the records that Baylon received his termination letter
the aforementioned letter of invitation to a after he requested for a grievance conference. It is,
grievance conference sent by Baylon to
therefore, clear that when Baylon requested for a
the general manager (Exhs. 'DD' and '7'), grievance conference, he was not yet aware of his
coming at the heels of his last unexcused dismissal. Baylon could not have requested for a
absences, that broke the proverbial
grievance conference on October 5, 1963 if he did not
camel's back. His dismissal under the
have demands to present on that date. The records
foregoing circumstances, being ultimately disclose that, as Union President, he used to make
triggered by his union activity, is therefore representations and protestations in behalf of the
not without some taint of unfair labor
members of the Union against unfair acts committed by
practice.
the company. As early as March 2, 1962, he reminded
the company of an agreement arrived at in a previous
labor-management conference that was violated when

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the management hired several casual workers without

giving preference to previously laid off employees and
without notifying the Union President (Exhibit "P"). On
May 25, 1962, he complained of the poor condition of the
toilet facilities in one of the buildings of the company and
requested the management for its improvement (Exhibit
"Q"). On August 18, 1962, he caged the attention of the
management regarding the plight of seventy-two (72)
workers who were supposed to be temporarily laid off for
a period of two (2) months only as agreed upon between
the Union and the management, but were not re-hired
after the lapse of the period so he requested for the
payment of their separation pay (Exhibit "R"). On
December 14, 1962, he requested for the payment of a
claim for compensation of a worker prior to the
scheduled hearing of the same (Exhibit " U "). On
December 20, 1962, he worked for the payment of the
accrued vacation and sick leave of a terminated worker
(Exh. exhibit "V"). On January 12, 1963, he interceded
for the payment of the two months separation pay of
another terminated worker (Exhibit "W"). On April 25,
1963, he worked for the payment of separation pays of
terminated workers found to be physically unfit (Exhibit
"AA"). And on September 2, 1963, he invited the General
Manager of the company for a grievance conference to
settle the complaints of several Union members
regarding their vacation leaves and other union problems
(Exhibit "BB"). These exhibits show how Baylon, as
President of the Union, fought for the rights and
protection of his members. We are satisfied that the
Court's finding, in the above regard, are supported by
substantial evidence on the record considered as a
whole.
IN VIEW WHEREOF, the petition for certiorari is hereby
DISMISSED.

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