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FERNANDO CARANTO
13th Month Pay
- P3,792.75
Holiday Pay
- P1,760.00
- P 590.00
P6,142.75
RESTY REMITTERE
13th Month Pay
- P 9,195.49
Holiday Pay
- P 3,318.00
- P 1,770.00
P14,283.49
REYNALDO ROSALES
13th Month Pay
- P11,280.17
Holiday Pay
- P 4,026.00
- P10,253.91
Holiday Pay
- P 3,355.00
- P 6,186.50
Holiday Pay
- P 2,138.00
- P 4,101.83
Holiday Pay
- P 1,666.00
- P11,280.16
Holiday Pay
- P 4,026.00
- P 362.50
Holiday Pay
- P 430.00
P 797.50
GRAND TOTAL
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - P87,797.31
2. The individual respondents Carolina Mabanta Piad and Ponciano Mabanta are held liable in their
official capacity.
3. The other findings stand affirmed.
Its motion for reconsideration having been denied by the NLRC through its Resolution of 29
November 1995, petitioner CMP now comes to us through the present petition imputing grave abuse
of discretion on the NLRC: (a) in holding that private respondent Caranto was illegally dismissed,
basing its findings solely on surmises and baseless conclusion that petitioner resorted to retaliatory
acts; and, (b) in granting the money claims of private
respondents
on
the
unfounded
presumption that since petitioner failed to submit its position paper it is deemed to have admitted
the charges in the complaint.
The issues are: (a) whether the NLRC committed grave abuse of discretion amounting to lack or
excess of jurisdiction in holding that private respondent Fernando Caranto was illegally dismissed by
CMP; and, (b) whether in granting all the money claims of private respondents CMP was denied due
process.
Well-settled is the rule that the findings of the NLRC, except when there is grave abuse of
discretion, are practically conclusive on this Court. It is only when the NLRCs findings are bereft of
any substantial support from the records that the Court may step in and proceed to make its own
independent evaluation of the facts.[5] We see no cogent reason to deviate from this rule.
On the legality of Carantos dismissal, the NLRC held On the other hand, respondents [CMP] contention that complainant Fernando Caranto
abandoned his work is without sufficient basis. The plea of abandonment is inconsistent with his
immediate filing of a complaint for illegal dismissal with prayer for reinstatement. It is illogical for an
employee to abandon his work and then immediately seek reinstatement. (Judric Canning Corp. v.
Inciong, 115 SCRA 887). Moreover, respondents failed to prove by evidence that Caranto was
indeed absent without leave.[6]
CMP insists that Caranto was never really dismissed but was merely relieved from his post at
Maalikaya Health Complex upon request of the Manager, and transferred by CMP to SM-Feati; that
two (2) special orders were allegedly sent by CMP to Caranto informing him of his relief
from guard duties at Maalikaya and his assignment at SM-Feati but despite receipt of
these orders he failed to report at CMP office; that a follow-up letter was likewise addressed to him
requiring him to show cause why he should not be dismissed, which he never answered; and, that his
refusal to accept a new assignment and his prolonged absence justify the presumption that he
voluntarily abandoned his job.
In termination cases like the one before us, the burden of proving that the dismissal of the
employee was for a valid or authorized cause rests on the employer [7] and failure to discharge that
duty would mean that the dismissal is not justified and therefore illegal. [8] The same principle was
reiterated by this Court in Golden Donuts Inc. v. NLRC[9] when it ruled that the employer carries the
burden of proof in showing just cause for terminating the services of an employee.
In the instant case, CMP failed to present evidence to justify Caranto's dismissal. We have
scoured the records but could not find any letter, memorandum or correspondence between CMP
and the management of Maalikaya Health Complex dealing with the latters alleged request for
Carantos relief from guard duties at Maalikaya Health Complex, nor the two (2) special orders
supposedly sent by CMP to Caranto: the first order, informing him of his relief from his post at
Maalikaya Health Complex, and the other, reassigning him to SM-Feati; neither the follow-up letter by
CMP
requiring
Caranto
to
explain
and
show
cause
why
his
services
should not be terminated. We could not find any evidence, for that matter, which would clearly
and convincingly show that Caranto was absent without any valid reason and with no intention of
returning to work.
Apparently, CMP failed to discharge its burden of proof. Its allegation that Caranto was merely
relieved and reassigned is empty and self-serving, too insufficient to establish a just and valid cause
for his dismissal as employee. To allow an employer to terminate the employment of his worker
based merely on allegations without proof places the latter in an uncertain situation. He is at the
sole mercy of his employer who, in this case, has emasculated his right to a security of tenure.
Contrariwise, when Caranto was relieved from his post on 6 May 1994 he immediately pursued his
claim against CMP by amending his complaint six (6) days after to include illegal dismissal among his
charges. This can hardly be expected from one who has voluntarily "abandoned" his job, as claimed
by CMP. The immediate filing of a complaint for illegal dismissal against the employer is a clear
indication that the employee has not given up on his work.[10]
As already stated above, CMP failed to justify Carantos dismissal thereby rendering it
illegal. Consequently, no grave abuse of discretion was committed by the NLRC in upholding the
decision of the Labor Arbiter ordering Carantos reinstatement.
On the second issue, CMP maintains that both the Labor Arbiter and the
NLRC gravely abused their discretion in granting the money claims of private respondents,
alleging that a reading of the Labor Arbiters decision and that of the NLRC clearly shows that only
the pleadings and evidence submitted by private respondents were taken into consideration while
those presented by CMP were completely ignored, in clear violation of its constitutional right to due
process.
Before resolving the merit of the argument, it may be worth to mention the nature of the
proceedings before labor courts in relation to the requirements of due process. Under Art. 221 of the
Labor Code, technical rules of evidence prevailing in courts of law or equity are not controlling in any
proceeding before the NLRC or the Labor Arbiter. Both are mandated to use every and all
reasonable means to ascertain the facts in each case speedily and objectively and without regard
to technicalities of law or procedure, all in the interest of due process.[11]
While administrative tribunals exercising quasi-judicial powers, like the NLRC and Labor Arbiters,
are free from the rigidity of certain procedural requirements, they are nonetheless bound by law and
practice to observe the fundamental and essential requirements of due process. The standard of
due process that must be met in administrative tribunals allows a certain degree of latitude as long as
fairness is not ignored.[12] Hence, it is not legally objectionable, for being violative of due process, for
the Labor Arbiter to resolve a case based solely on the position papers, affidavits or documentary
evidence submitted by the parties. The affidavits of witnesses in such case may take the place of
their direct testimony.[13]
Set against the records of this case, CMP's claim that it was deprived of its right to be heard
readily collapses. The earlier narration of facts clearly demonstrates that the parties were repeatedly
ordered by the Labor Arbiter to submit their position papers together with the affidavits of their
witnesses and other evidence in support thereof - first on 11 April 1994, then on 22 April 1994, and
finally on 6 May 1994. During the 23 May 1994 conference CMP, instead of complying with the order
requiring it to submit its position paper, moved for another postponement which was denied. It was
only on 13 June 1994, after the case was submitted for resolution, that CMP finally presented its
position paper. Having been given ample opportunity to put forth its case, CMP has only itself to
blame or, better still, its counsel who was then present, for its failure to do so within the extended
period.
A party before the Labor Arbiter which had a chance to present its side during a period of more
than one (1) month, and despite repeated extensions of time given to enable it to present its position
paper still failed to meet its final deadline, cannot claim denial of due process [14]if subsequently the
Labor Arbiter disregarded its position paper belatedly filed.
Moreover, CMP had all the chances to ventilate its arguments in its appeal to the NLRC where, in
fact, it submitted a memorandum, presented its position paper and supporting documents
allegedly ignored by the Labor Arbiter, as well as a motion for reconsideration - which documents
were considered by that Labor Tribunal in the course of resolving the case.[15] Consequently, the
alleged defect in the proceedings before the Labor Arbiter, if there be any, was deemed cured.
The fact that the NLRC in its decision made no reference to the position paper and evidence of
petitioner does not mean that they were not considered. It is simply that the NLRC agreed with the
Labor Arbiters findings and conclusions and found nothing substantial in petitioners position paper
and documentary evidence to warrant a reversal of those findings and conclusions.
The essence of due process is simply an opportunity to be heard or, as applied to administrative
proceedings, an opportunity to explain ones side or an opportunity to seek reconsideration of the
action or ruling complained of.[16] Where, as in this case, the party has had ample opportunity to
present its side of the controversy not only before the Labor Arbiter but also the NLRC on appeal, it
cannot thereafter interpose lack of due process for what the fundamental law abhors is simply the
absolute absence of opportunity to be heard.
Finally, while it may be true that in labor cases stringent rules of procedure may be dispensed
with in the interest of justice, it does not mean that a party litigant is at liberty to completely disregard
or
ignore
the
rules,
particularly
those
relating
to
the
periods
for
filing
of
pleadings. In this connection, if we are to sustain petitioners argument that it was denied due
process when its position paper and documentary evidence were not considered by the Labor
Arbiter in deciding the case, we will in effect put a premium on the undesirable practice of filing
position papers late and only after the case has already been submitted for decision.
WHEREFORE, the petition is DISMISSED. The Decision of the National Labor Relations Commission
dated 26 October 1995 affirming with modifications the Decision of the Labor Arbiter and ordering
petitioner CMP FEDERAL SECURITY AGENCY, INC., to pay private respondents FERNANDO CARANTO,
RESTY REMITTERE, REYNALDO ROSALES, ANTONIO TAPAR, NARCISO CLARO, SIONY MANOS, BALDO
VIODOR and DAWAY WAHAB wage differentials, 13th month pay, holiday pay and service incentive
leave pay as earlier quoted in this Decision, and its Resolution of 29 November 1995 denying
petitioners Motion for Reconsideration, are AFFIRMED. Costs against petitioner.
SO ORDERED.
and relied upon by them therein." As correctly held in our Decision dated January 27, 1999, the cited
report is a mere newspaper account and not even a commercial list. At most, it is but an analysis or
opinion which carries no persuasive weight for purposes of this case as no sufficient figures to support
it were presented. Neither did anybody testify to its accuracy. It cannot be said that businessmen
generally rely on news items such as this in their occupation. Besides, no evidence was presented
that the publication was regularly prepared by a person in touch with the market and that it is
generally regarded as trustworthy and reliable. Absent extrinsic proof of their accuracy, these reports
are not admissible.[6] In the same manner, newspapers containing stock quotations are not
admissible in evidence when the source of the reports is available.[7] With more reason, mere
analyses or projections of such reports cannot be admitted. In particular, the source of the report in
this case can be easily made available considering that the same is necessary for compliance with
certain governmental requirements.
Nonetheless, by petitioners own allegations, its actual total net income for 1996 was P5.1 billion. [8] An
estimate by the All Asia financial analyst stated that petitioners net operating income for the same
year was about P5.7 billion, a figure which the Union relies on to support its claim. Assuming without
admitting the truth thereof, the figure is higher than the P4.171 billion allegedly suggested by
petitioner as its projected net operating income. The P5.7 billion which was the Secretarys basis for
granting the P2,200.00 is higher than the actual net income of P5.1 billion admitted by petitioner. It
would be proper then to increase this Courts award of P1,900.00 to P2,000.00 for the two years of the
CBA award. For 1992, the agreed CBA wage increase for rank-and-file was P1,400.00 and was
reduced to P1,350.00, for 1993; further reduced to P1,150.00 for 1994. For supervisory employees, the
agreed wage increase for the years 1992-1994 are P1,742.50, P1,682.50 and P1,442.50, respectively.
Based on the foregoing figures, the P2,000.00 increase for the two-year period awarded to the rankand-file is much higher than the highest increase granted to supervisory employees.[9] As mentioned
in the January 27, 1999 Decision, the Court does "not seek to enumerate in this decision the factors
that should affect wage determination" because collective bargaining disputes particularly those
affecting the national interest and public service "requires due consideration andproper balancing of
the interests of the parties to the dispute and of those who might be affected by the dispute."[10] The
Court takes judicial notice that the new amounts granted herein are significantly higher than the
weighted average salary currently enjoyed by other rank-and-file employees within the community. It
should be noted that the relations between labor and capital is impressed with public interest which
must yield to the common good.[11] Neither party should act oppressively against the other or impair
the interest or convenience of the public.[12] Besides, matters of salary increases are part of
management prerogative.[13]
On the retroactivity of the CBA arbitral award, it is well to recall that this petition had its origin in the
renegotiation of the parties 1992-1997 CBA insofar as the last two-year period thereof is concerned.
When the Secretary of Labor assumed jurisdiction and granted the arbitral awards, there was no
question that these arbitral awards were to be given retroactive effect. However, the parties dispute
the reckoning period when retroaction shall commence. Petitioner claims that the award should
retroact only from such time that the Secretary of Labor rendered the award, invoking the 1995
decision in Pier 8 case[14] where the Court, citing Union of Filipino Employees v. NLRC,[15] said:
"The assailed resolution which incorporated the CBA to be signed by the parties was
promulgated on June 5, 1989, the expiry date of the past CBA. Based on the provision
of Section 253-A, its retroactivity should be agreed upon by the parties. But since no
agreement to that effect was made, public respondent did not abuse its discretion in
giving the said CBA a prospective effect. The action of the public respondent is within
the ambit of its authority vested by existing law."
On the other hand, the Union argues that the award should retroact to such time granted by the
Secretary, citing the 1993 decision of St Lukes.[16]
"Finally, the effectivity of the Order of January 28, 1991, must retroact to the date of the
expiration of the previous CBA, contrary to the position of petitioner. Under the
circumstances of the case, Article 253-A cannot be properly applied to herein case. As
correctly stated by public respondent in his assailed Order of April 12, 1991 dismissing
petitioners 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
housing is justified because it pertains to a basic necessity of life. It is part of a privilege recognized by
the employer and allowed by law. In contrast, providing seed money for the establishment of the
employees cooperative is a matter in which the employer has no business interest or legal
obligation. Courts should not be utilized as a tool to compel any person to grant loans to another nor
to force parties to undertake an obligation without justification. On the contrary, it is the government
that has the obligation to render financial assistance to cooperatives and the Cooperative Code
does not make it an obligation of the employer or any private individual.[22]
Anent the 40-day union leave, the Court finds that the same is a typographical error. In order to
avoid any confusion, it is herein declared that the union leave is only thirty (30) days as granted by
the Secretary of Labor and affirmed in the Decision of this Court.
The added requirement of consultation imposed by the Secretary in cases of contracting out for six
(6) months or more has been rejected by the Court. Suffice it to say that the employer is allowed to
contract out services for six months or more. However, a line must be drawn between management
prerogatives regarding business operations per se and those which affect the rights of employees,
and in treating the latter, the employer should see to it that its employees are at least properly
informed of its decision or modes of action in order to attain a harmonious labor-management
relationship and enlighten the workers concerning their rights.[23] Hiring of workers is within the
employers inherent freedom to regulate and is a valid exercise of its management prerogative
subject only to special laws and agreements on the matter and the fair standards of justice. [24] The
management cannot be denied the faculty of promoting efficiency and attaining economy by a
study of what units are essential for its operation. It has the ultimate determination of whether services
should be performed by its personnel or contracted to outside agencies. While there should be
mutual consultation, eventually deference is to be paid to what management
decides.[25] Contracting out of services is an exercise of business judgment or management
prerogative.[26] Absent proof that management acted in a malicious or arbitrary manner, the Court
will not interfere with the exercise of judgment by an employer.[27] As mentioned in the January 27,
1999 Decision, the law already sufficiently regulates this matter.[28] Jurisprudence also provides
adequate limitations, such that the employer must be motivated by good faith and the contracting
out should not be resorted to circumvent the law or must not have been the result of malicious or
arbitrary actions.[29]These are matters that may be categorically determined only when an actual suit
on the matter arises.
WHEREFORE, the motion for reconsideration is partially granted and the assailed Decision is modified
as follows: (1) the arbitral award shall retroact from December 1, 1995 to November 30, 1997; and (2)
the award of wage is increased from the original amount of One Thousand Nine Hundred Pesos
(P1,900.00) to Two Thousand Pesos (P2,000.00) for the years 1995 and 1996. This Resolution is subject to
the monetary advances granted by petitioner to its rank-and-file employees during the pendency of
this case assuming such advances had actually been distributed to them. The assailed Decision is
AFFIRMED in all other respects.
SO ORDERED.
FIRST DIVISION
G.R. No. 82341 December 6, 1989
SUNDOWNER
DEVELOPMENT
CORPORATION, petitioner,
vs.
HON. FRANKLIN M. DRILON, in his capacity as Secretary of the Department of Labor and Employment,
NATIONAL UNION OF WORKERS IN HOTEL, RESTAURANT AND ALLIED INDUSTRIES, (NUWHRAIN), HOTEL
MABUHAY CHAPTER, THE CHAPTER OFFICERS AND MEMBERS, HOTEL MABUHAY, INC. and MR. MARIANO
PENANO, President of Hotel Mabuhay, Inc., respondents.
Carmelita S. Bautista-Lozada for petitioner.
Paterno D. Menzon Law Office for private respondent NUWHRAIN.
GANCAYCO, J.:
The principal issue in this case is whether or not the purchaser of the assets of an employer
corporation can be considered a successor employer of the latter's employees.
Private respondent Hotel Mabuhay, Inc. (Mabuhay for short,) leased the premises belonging to
Santiago Syjuco, Inc. (Syjuco for short) located at 1430 A. Mabini St., Ermita, Manila. However, due to
non-payment of rentals, a case for ejectment was filed by Syjuco against Mabuhay in the
Metropolitan Trial Court of Manila. Mabuhay offered to amicably settle the case by surrendering the
premises to Syjuco and to sell its assets and personal property to any interested party.
Syjuco offered the said premises for lease to petitioner. The negotiation culminated with the
execution of the lease agreement on April 16, 1987 to commence on May 1, 1987 and to expire on
April 30,1992. 1 Mabuhay offered to sell its assets and personal properties in the premises to petitioner
to which petitioner agreed. A deed of assignment of said assets and personal properties was
executed by Mabuhay on April 29,1987 in favor of petitioner. 2
On same date Syjuco formally turned over the possession of the leased premises to petitioner who
actually took possession and occupied the same on May 1, 1987.
On May 4, 1987, respondent National Union of Workers in Hotel, Restaurant and Allied Services
(NUWHRAIN for short) picketed the leased premises, barricaded the entrance to the leased premises
and denied petitioner's officers, employees and guests free access to and egress from said premises.
Thus, petitioner wrote a letter-complaint to Syjuco.
A complaint for damages with preliminary injunction and/or temporary restraining order was filed by
petitioner on May 7, 1987 with the Regional Trial Court of Manila docketed as Civil Case No. 87-40436.
On the same day, the Executive Judge of said court issued a restraining order against respondent
NUWHRAIN and its officers and members as prayed for in the petition. Nevertheless, NUWHRAIN
maintained their strike on the subject premises but filed an answer to the complaint.
On May 14, 1987, an order was issued by public respondent Secretary of Labor assuming jurisdiction
over the labor dispute pursuant to Article 263(g) of the Labor Code as amended and in the interim,
requiring all striking employees to return to work and for respondent Mabuhay to accept all returning
employees pending final determination of the issue of the absorption of the former employees of
Mabuhay. The parties were also directed to submit their respective position papers within ten (10)
days from receipt of the order.
On May 25, 1987, Mabuhay submitted its position paper alleging among others that it had sold all its
assets and personal properties to petitioner and that there was no sale or transfer of its shares
whatsoever and that Mabuhay completely ceased operation effective April 28,1987 and
surrendered the premises to petitioner so that there exists a legal and physical impossibility on its part
to comply with the return to work order specifically on absorption.
On June 26, 1987, petitioner in order to commence its operation, signed a tri-partite agreement so
the workers may lift their strike, by and among petitioner, respondents NUWHRAIN and Mabuhay
whereby the latter paid to respondent NUWHRAIN the sum of P 638,000.00 in addition to the first
payment in the sum of P 386,447.11, for which reason respondent NUWHRAIN agreed to lift the picket
.3
Respondent NUWHRAIN on July 13, 1987 filed its position paper alleging connivance between
Mabuhay and petitioner in selling the assets and closing the hotel to escape its obligations to the
employees of Mabuhay and so it prays that petitioner accept the workforce of Mabuhay and pay
backwages from April 15,1986 to April 28,1987, the day Mabuhay stopped operation.
On the other hand, petitioner filed a "Partial Motion for Reconsideration and Position Paper," alleging
that it was denied due process; that there were serious errors in the findings of fact which would
cause grave and irreparable damage to its interest; as well as on questions of law. On January 20,
1988, the public respondent issued an order requiring petitioner to absorb the members of the union
and to pay backwages from the time it started operations up to the date of the order. 4
Petitioner filed on January 27,1988 a motion for reconsideration of the aforesaid order alleging that
the theory of implied acceptance and assumption of statutory wrong does not apply in the instant
case; that the prevailing doctrine that there is no law requiring bona fide purchasers of the assets of
an on-going concern to absorb in its employ the employees of the latter should be applied in this
case; that the order for absorption of the employees of Mabuhay as well as the payment of their
backwages is contrary to law. Respondent NUWHRAIN also filed a motion for clarification of the
aforesaid order.
On March 8, 1988, the public respondent denied said motion for reconsideration and motion for
clarification for lack of merit.
Hence, this petition for review by certiorari with prayer for preliminary injunction and/or temporary
restraining order filed by petitioner in this Court. Petitioner presents seven issues for resolution which all
revolve about the singular issue of whether or not under the circumstances of this case the petitioner
may be compelled to absorb the employees of respondent Mabuhay.
On March 23, 1988, this Court, without giving due course to the petition, required respondents to
comment thereon within ten (10) days from notice and issued a temporary restraining order enjoining
public respondent or his duly authorized representatives from executing and implementing the orders
dated January 20, 1988 and March 8, 1988.
The petition is impressed with merit.
The rule is that unless expressly assumed, labor contracts such as employment contracts and
collective bargaining agreements are not enforceable against a transferee of an enterprise, labor
contracts being in personam, thus binding only between the parties .5 A labor contract merely
creates an action in personally and does not create any real right which should be respected by
third parties. This conclusion draws its force from the right of an employer to select his employees and
to decide when to engage them as protected under our Constitution, and the same can only be
restricted by law through the exercise of the police power. 6
As a general rule, there is no law requiring a bona fide purchaser of assets of an on-going concern to
absorb in its employ the employees of the latter. 7
However, although the purchaser of the assets or enterprise is not legally bound to absorb in its
employ the employers of the seller of such assets or enterprise, the parties are liable to the employees
if the transaction between the parties is colored or clothed with bad faith. 8
In the case at bar, contrary to the claim of the public respondent that the transaction between
petitioner and Mabuhay was attended with bad faith, the court finds no cogent basis for such
contention. Thus, the absorption of the employees of Mabuhay may not be imposed on petitioner.
It is undisputed that when Mabuhay surrendered the leased premises to Syjuco and asked Syjuco to
offer same to other lessees it was Syjuco who found petitioner and persuaded petitioner to lease said
premises. Mabuhay had nothing to do with the negotiation and consummation of the lease contract
between petitioner and Syjuco.
It was only when Mabuhay offered to sell its assets and personal properties in the premises to
petitioner that they came to deal with each other. It appears that petitioner agreed to purchase said
assets of respondent Mabuhay to enable Mabuhay to pay its obligations to its striking employees and
to Syjuco. Indeed, in the deed of assignment that was executed by Mabuhay in favor of petitioner
on April 14, 1 987 for and in consideration of P2,500,000.00, it is specifically provided therein that the
same is "purely for and in consideration of the sale/transfer and assignment of the personal properties
and assets of Hotel Mabuhay, Inc. listed . . . " and "in no way involves any assumption or undertaking
on the part of Second Party (petitioner) of any debts or liabilities whatsoever of Hotel Mabuhay,
Inc." 9 The liabilities alluded to in this agreement should be interpreted to mean not only any
monetary liability of Mabuhay but any other liability or obligation arising from the operation of its
business including its liability to its employees.
Moreover, in the tripartite agreement that was entered into by petitioner with respondents
NUWHRAIN and Mabuhay, it is clearly stipulated as follows:
8. That, immediately after the execution of this Agreement, the FIRST PARTY shall give a
list of its members to the THIRD PARTY that it desires to recommend for employment so
that the latter can consider them for employment, with no commitment whatsoever on
the part of the THIRD PARTY to hire them in the business that it will operate in the
premises formerly occupied by the Hotel Mabuhay;10
From the foregoing, it is clear that petitioner has no liability whatsoever to the employees of
Mabuhay And its responsibility if at all, is only to consider them for re-employment in the operation of
the business in the same premises. There can be no implied acceptance of the employees of
Mabuhay by petitioner and acceptance of statutory wrong as it is expressly provided in the
agreement that petitioner has no commitment or duty to absorb them.
Moreover, the court does not subscribe to the theory of public respondent that petitioner should
have informed NUWHRAIN of its lease of the premises and its purchase of the assets and personal
properties of Mabuhay therein so that said employees could have taken steps to protect their
interest. The court finds no such duty on the part of petitioner and its failure to notify said employees
cannot be an indicium of bad faith.
Much less is there any evidence that petitioner and respondent Mabuhay are joint tortfeasors as
found by public respondent. While it is true that petitioner is using the leased property for the same
type of business as that of respondent Mabuhay, there can be no continuity of the business
operations of the predecessor employer by the successor employer as respondent Mabuhay had not
retained control of the business. Petitioner is a corporation entirely different from Mabuhay. It has no
controlling interest whatever in respondent Mabuhay. Petitioner and Mabuhay have no privity and
are strangers to each other.
What is obvious is that the petitioner, by purchasing the assets of respondent Mabuhay in the hotel
premises, enabled Mabuhay to pay its obligations to its employees. There being no employeremployee relationship between the petitioner and the Mabuhay employees, the petition must fail.
Petitioner can not be compelled to absorb the employees of Mabuhay and to pay them
backwages.
WHEREFORE, the petition is GRANTED and the questioned orders of public respondent Secretary of
Labor and Employment dated January 20, 1988 and March 8, 1988 are reversed and set aside. The
restraining order that this Court issued on March 20,1988 is hereby made permanent. No
pronouncement as to costs.
SO ORDERED.
[G. R. No.101738. April 12, 2000]
PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, petitioner, vs. HON. BIENVENIDO E. LAGUESMA,
Undersecretary of Labor and Employment, HON. HENRY PABEL, Director of the Department of Labor
and Employment Regional Office No. XI and/or the Representation Officer of the Industrial Relations
Division who will act for and in his behalf, PCOP- BISLIG SUPERVISORY AND TECHNICAL STAFF
EMPLOYEES UNION, ASSOCIATED LABOR UNION and FEDERATION OF FREE WORKERS, respondents.
DECISION
DE LEON, JR., J.: Miso
Before us is a petition for certiorari seeking to annul the Resolution[1] and the Order[2] dated April 17,
1991 and August 7, 1991, respectively, of public respondent Bienvenido E. Laguesma, acting then as
Undersecretary, now the Secretary, of the Department of Labor and Employment (DOLE), which
reversed the Order dated March 27, 1990[3] of Med-Arbiter Phibun D. Pura declaring that supervisors
and section heads of petitioner under its new organizational structure are managerial employees
and should be excluded from the list of voters for the purpose of a certification election among
supervisory and technical staff employees of petitioner.[4]
The facts of the case are the following:
Petitioner Paper Industries Corporation of the Philippines (PICOP) is engaged in the manufacture of
paper and timber products, with principal place of operations at Tabon, Bislig, Surigao del Sur. It has
over 9,000[5] employees, 944[6] of whom are supervisory and technical staff employees. More or less
487 of these supervisory and technical staff employees are signatory members of the private
respondent PICOP-Bislig Supervisory and Technical Staff Employees Union (PBSTSEU).[7]
On August 9, 1989. PBSTSEU instituted a Petition[8] for Certification Election to determine the sole and
exclusive bargaining agent of the supervisory and technical staff employees of PICOP for collective
bargaining agreement (CBA) purposes.
In a Notice[9] dated August 10, 1989, the initial hearing of the petition was set on August 18, 1989 but it
was reset to August 25, 1989, at the instance of PICOP, as it requested a fifteen (15) day period within
which to file its comments and/or position paper. But PICOP failed to file any comment or position
paper. Meanwhile, private respondents Federation of Free Workers (FFW) and Associated Labor
Union (ALU) filed their respective petitions for intervention.
On September 14, 1989, Med-Arbiter Arturo L. Gamolo issued an Order[10] granting the petitions for
interventions of the FFW and ALU. Another Order[11] issued on the same day set the holding of a
certification election among PICOP's supervisory and technical staff employees in Tabon, Bislig,
Surigao del Sur, with four (4) choices, namely: (1) PBSTSEU; (2) FFW; (3) ALU; and (4) no union. Nex old
On September 21, 1989, PICOP appealed[12] the Order which set the holding of the certification
election contending that the Med-Arbiter committed grave abuse of discretion in deciding the case
without giving PICOP the opportunity to file its comments/answer, and that PBSTSEU had no
personality to file the petition for certification election.
After PBSTSEU filed its Comments[13] to petitioner's appeal, the Secretary of the Labor[14] issued a
Resolution[15] dated November 17, 1989 which upheld the Med-Arbiter's Order dated September 17,
1989, with modification allowing the supervising and staff employees in Cebu, Davao and Iligan City
to participate in the certification election.
During the pre-election conference on January 18, 1990, PICOP questioned and objected to the
inclusion of some section heads and supervisors in the list of voters whose positions it averred were
reclassified as managerial employees in the light of the reorganization effected by it.[16] Under the
Revised Organizational Structure of the PICOP, the company was divided into four (4) main business
groups, namely: Paper Products Business, Timber Products Business, Forest Resource Business and
Support Services Business. A vice- president or assistant vice-president heads each of these business
groups. A division manager heads the divisions comprising each business group. A department
manager heads the departments comprising each division. Section heads and supervisors, now
called section managers and unit managers, head the sections and independent units, respectively,
comprising each department.[17]PICOP advanced the view that considering the alleged present
authority of these section managers and unit managers to hire and fire, they are classified as
managerial employees, and hence, ineligible to form or join any labor organization.[18] Mani kx
Following the submission by the parties of their respective position papers [19] and evidence[20] on this
issue, Med-Arbiter Phibun D. Pura issued an Order[21] dated March 27, 1990, holding that supervisors
and section heads of the petitioner are managerial employees and therefore excluded from the list
of voters for purposes of certification election.
PBSTSEU appealed[22] the Order of the Med-Arbiter to the Office of the Secretary, DOLE. ALU likewise
appealed.[23] PICOP submitted evidence militating against the appeal.[24] Public respondent
Bienvenido E. Laguesma, acting as the then Undersecretary of Labor, issued the assailed
Order[25] dated April 17, 1991 setting aside the Order dated March 27, 1990 of the Med-Arbiter and
declaring that the subject supervisors and section heads are supervisory employees eligible to vote in
the certification election.
PICOP sought[26] reconsideration of the Order dated April 7, 1991. However, public respondent in his
Order[27] dated August 7, 1991 denied PICOP's motion for reconsideration.
Hence, this petition.
PICOP anchors its petition on two (2) grounds, to wit: Maniks
I.
THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. LAGUESMA, UNDERSECRETARY OF
LABOR AND EMPLOYMENT, IN A CAPRICIOUS, ARBITRARY AND WHIMSICAL EXERCISE OF
POWER ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION, TANTAMOUNT TO
ACTING WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE DENIED YOUR PETITIONER'S
upon and resolved in detail by public respondent Laguesma. We see no reason or justification to
deviate from his assailed resolutions for the reason that law and jurisprudence aptly support them.
Finally, considering all the foregoing, the fact that PICOP voiced out its objection to the holding of
certification election, despite numerous opportunities to ventilate the same, only after respondent
Undersecretary of Labor affirmed the holding thereof, simply bolstered the public respondents'
conclusion that PICOP raised the issue merely to prevent and thwart the concerned section heads
and supervisory employees from exercising a right granted them by law. Needless to stress, no
obstacle must be placed to the holding of certification elections, for it is a statutory policy that should
not be circumvented.[40]
WHEREFORE, the petition is hereby DISMISSED, and the Resolution and Order of public respondent
Bienvenido E. Laguesma dated April 17, 1991 and August 17, 1991, respectively, finding the subject
supervisors and section heads as supervisory employees eligible to vote in the certification election
are AFFIRMED. Costs against petitioner.
SO ORDERED.