ATLAS FARMS VS NLRC

392 SCRA 128

POINT OF THE CASE
***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 brought to voluntary arbitration. But, where there was
already actual termination, with alleged violation of the employees
rights, it is already cognizable by the labor arbiter.

Facts:
Petitioner contends that the dismissal of private respondents was for a just and
valid cause, pursuant to the provisions of the companys rules and regulations. It
also alleges lack of jurisdiction on the part of the labor arbiter, claiming
that the cases should have been resolved through the grievance
machinery, and eventually referred to voluntary arbitration, as prescribed
in the CBA.
Private respondents, Pea and Abion contend that they were illegally dismissed
from employment because management discovered that they intended to form
another union, and because they were vocal in asserting their rights.
The labor arbiter dismissed the petitioners complaints on the ground that the
grievance machinery in the collective bargaining agreement (CBA) had not yet been
exhausted and for lack of merit, finding that the case was one of illegal
dismissal and did not involve the interpretation or implementation of any
CBA provision, stated that Article 217 (c) of the Labor Code was
inapplicable to the case.
Private respondents availed of the grievance process, but later on re-filed the case
before the NLRC. They alleged "lack of sympathy" on petitioners part to engage in
conciliation proceedings.
Their cases were consolidated in the NLRC. At the initial mandatory conference,
petitioner filed a motion to dismiss, on the ground of lack of jurisdiction,
alleging private respondents themselves admitted that they were
members of the employees union with which petitioner had an existing
CBA. This being the case, according to petitioner, jurisdiction over the
case belonged to the grievance machinery and thereafter the voluntary
arbitrator, as provided in the CBA.
Thus, private respondents brought the case to the NLRC, which reversed the labor
arbiters decision. Dissatisfied with the NLRC ruling, petitioner went to the Court of
Appeals by way of a petition for review on certiorari, seeking reinstatement of the

labor arbiters decision. The appellate court denied the petition and affirmed the
NLRC resolution with some modifications.

Issue:
Whether or not the labor arbiter or the voluntary arbitrator has jurisdiction to
decide over this case of dismissal.

Held:
As correctly observed by the NLRC, petitioner did not comply with the requirements
of a valid dismissal. For a dismissal to be valid, the employer must show that: (1)
the employee was accorded due process, and (2) the dismissal must be for any of
the valid causes provided for by law. No evidence was shown that private
respondents refused, as alleged, to receive the notices requiring them to show
cause why no disciplinary action should be taken against them. Without proof of
notice, private respondents who were subsequently dismissed without hearing were
also deprived of a chance to air their side at the level of the grievance machinery.
Given the fact of dismissal, it can be said that the cases were effectively
removed from the jurisdiction of the voluntary arbitrator, thus placing
them within the jurisdiction of the labor arbiter. ***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 brought to
voluntary arbitration. But, where there was already actual termination,
with alleged violation of the employees rights, it is already cognizable by
the labor arbiter.
In sum, the SC concluded that the labor arbiter and then the NLRC had
jurisdiction over the cases involving private respondents dismissal, and
no error was committed by the appellate court in upholding their
assumption of jurisdiction.
Related Articles :
ART. 217. Jurisdiction of Labor Arbiters and the Commission.
xxx
(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.
ART. 260. Grievance Machinery and Voluntary Arbitration.
The parties to a Collective Bargaining Agreement shall include therein provisions
that will ensure the mutual observance of its terms and conditions. They shall
establish 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.
All grievances submitted to the grievance machinery which are not settled
within seven (7) calendar days from the date of its submission shall
automatically be referred to voluntary arbitration prescribed in the
Collective Bargaining Agreement.
For this purpose, parties to a Collective Bargaining Agreement shall name and
designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or
include in the agreement a procedure for the selection of such Voluntary Arbitrator
or panel of Voluntary Arbitrators, preferably from the listing of
Qualified Voluntary Arbitrators duly accredited by the Board. In case the parties
fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the
Board shall designate the Voluntary Arbitrators, as may be necessary,
pursuant to the selection procedure agreed upon in the Collective
Bargaining Agreement, which shall act with the same force and effect as if
the Arbitrator or panel of Arbitrators has been selected by the parties as
prescribed.

VIVERO VS CA
344 SCRA 268

Point of the case

***"all other labor disputes" may include termination disputes provided that
the agreement between the Union and the Company states "in
unequivocal language that [the parties] conform to the submission of
termination disputes and unfair labor practices to voluntary arbitration."
There is a need for an express stipulation in the CBA that illegal
termination disputes should be resolved by a Voluntary Arbitrator or Panel
of Voluntary Arbitrators, since the same fall within a special class of
disputes that are generally within the exclusive original jurisdiction of
Labor Arbiters by express provision of law.

RULING:
The CBA clarifies the proper procedure to be followed in situations where
the parties expressly stipulate to submit termination disputes to the
jurisdiction of a Voluntary Arbitrator or Panel of Voluntary Arbitrators. For
when the parties have validly agreed on a procedure for resolving

grievances and to submit a dispute to voluntary arbitration then that

procedure should be strictly observed. Non-compliance therewith cannot
be excused, as petitioner suggests, by the fact that he is not well-versed
with the "fine prints" of the CBA. It was his responsibility to find out,
through his Union, what the provisions of the CBA were and how they
could affect his rights.
As provided in Art. 241, par. (p), of the Labor Code -(p) It shall be the duty
of any labor organization and its officers to inform its members on the
provisions of its constitution and by-laws, collective bargaining
agreement, the prevailing labor relations system and all their rights and
obligations under existing labor laws. In fact, any violation of the rights
and conditions of union membership is a "ground for cancellation of union
registration or expulsion of officer from office, whichever is appropriate.
At least thirty percent (30%) of all the members of a union or any member
or members especially concerned may report such violation to the Bureau
[of Labor Relations] x x x x"
In San Miguel Corp. v. National Labor Relations Commission the Supreme
Court held that the phrase "all other labor disputes" may include termination
disputes provided that the agreement between the Union and the Company states
"in unequivocal language that [the parties]conform to the submission of termination
disputes and unfair labor practices to voluntary arbitration." Ergo, it is not sufficient
to merely say that parties to the CBA agree on the principle that "all disputes"
should first be submitted to a Voluntary Arbitrator. There is a need for an express
stipulation in the CBA that illegal termination disputes should be resolved by a
Voluntary Arbitrator or Panel of Voluntary Arbitrators, since the same fall within a
special class of disputes that are generally within the exclusive original jurisdiction
of Labor Arbiters by express provision of law. Absent such express stipulation, the
phrase "all disputes" should be construed as limited to the areas of conflict
traditionally within the jurisdiction of Voluntary Arbitrators, i.e., disputes relating to
contract-interpretation, contract-implementation, or interpretation or enforcement
of company personnel policies. Illegal termination disputes -not falling within any of
these categories -should then be considered as a special area of interest governed
by a specific provision of law.

DAVAO CITY WATER DISTRICT VS CIVIL SERVICE

COMMISSION
201 SCRA 593
POINT OF THE CASE
***A water district is a corporation created pursuant to a special law P.D.
No. 198, as amended, and as such its officers and employees are covered
by the Civil Service Law, therefore, within its jurisdiction.

RULING:
Petitioners' main argument is that they are private corporations without original
charter; hence they are outside the jurisdiction of respondents CSC and COA.
Reliance is made on the Metro Iloilo case which declared petitioners as quasi-public
corporations created by virtue of PD 198, a general legislation which cannot be
considered as the charter itself creating the water districts. Holding on to this ruling,
petitioners contend that they are private corporations which are only Labor
Relations regarded as quasi-public or semi-public because they serve public interest
and convenience and that since PD 198 is a general legislation, the operative act
which created a water district is not the said decree but the resolution of the
sanggunian concerned.
After a fair consideration of the parties' arguments coupled with a careful study of
the applicable laws as well as the constitutional provisions involved, SC ruled
against the petitioners and reiterate the ruling in Tanjay case declaring water
districts government-owned or controlled corporations with original charter. The
Court's pronouncement in this case, as extensively quoted, supra, partly reads:
The Labor Arbiter failed to take into account the provisions of
Presidential Decree No. 1479, which went into effect on 11 June 1978, P.D.
No. 1479, wiped away Section 25 of PD 198 , and Section 26 of PD 198 was
renumbered as Section 25 in the following manner:
Section 26 of the same decree PD 198 is hereby amended to read as
Section 25 as follows:
Section 25. Authorization. The district may exercise all the powers which
are expressly granted by this Title or which are necessarily implied from
or incidental to the powers and purposes herein stated. For the purpose of
carrying out the objectives of this Act, a district is hereby granted the
power of eminent domain, the exercise thereof shall, however, be subject
to review by the Administration.
Thus, Section 25 of PD 198 exempting the employees of water districts
from the application of the Civil Service Law was removed from the statute
books:
xxx xxx xxx

As early as Baguio Water District v. Trajano, et al.,(G.R. No. 65428,

February 20, 1984, 127
SCRA 730), The SC already ruled that a water district is a corporation
created pursuant to a special law P.D. No. 198, as amended, and as such
its officers and employees are covered by the Civil Service Law.

In another case (Hagonoy Water District v. NLRC, G.R. No.81490, August

31, 1988, 165 SCRA
272), SC ruled once again that local water districts are quasi-public
corporations whose employees belong to the Civil Service.

BOY SCOUTS OF TH E PHI L. VS NLRC

196 SCRA176
POINT OF THE CASE
***Employees of petitioner BSP are embraced within the Civil Service and
are accordingly governed by the Civil Service Law and Regulation.

RULING:
While the BSP may be seen to be a mixed type of entity, combining aspects of both
public and private entities, we believe that considering the character of its purposes
and its functions, the statutory designation of the BSP as "a public corporation" and
the substantial participation of the Government in the selection of members of the
National Executive Board of the BSP, the BSP, as presently constituted under its
charter, is a government-controlled corporation within the meaning of Article IX.
(B) (2) (1) of the Constitution which reads as follows:
The Civil Service embraces all branches, subdivisions, instrumentality
mentalities and agencies of the Government, including government-owned
or controlled corporations with original charters.
SC are fortified in this conclusion when they noted that the Administrative Code of
1987 designates the BSP as one of the attached agencies of the Department of
Education, Culture and Sports ("DECS").
An "agency of the Government" is defined as referring to any of the various units of
the Government including a department, bureau, office, instrumentality,
government-owned or-controlled corporation, or local government or distinct unit
therein.
"Government instrumentality" is in turn defined in the 1987 Administrative Code in
the following manner:
Instrumentality -- refers to any agency of the National Government, not
integrated within the department framework, vested with special
functions or jurisdiction by law, endowed with some if not all corporate
powers, administering special funds, and enjoying operational autonomy
usually through a charter. This term includes regulatory agencies,
chartered institutions and government-owned or controlled corporations

The same Code describes a "chartered institution" in the following terms:

Chartered institution -- refers to any agency organized or operating under
a special charter, and vested by law with functions relating to specific
constitutional policies or objectives. This term includes the state
universities and colleges, and the monetary authority of the State.
***SC believe that the BSP is appropriately regarded as "a government
instrumentality" under the 1987 Administrative Code. It thus appears that
the BSP may be regarded as both a "government controlled corporation
with an original charter" and as an "instrumentality" of the Government
within the meaning of Article IX (B) (2) (1) of the Constitution. It follows
that the employees of petitioner BSP are embraced within the Civil Service
and are accordingly governed by the Civil Service Law and Regulation.

ZAMORAS VS SU
184 SCRA 248
POINT OF THE CASE
***An employee in an agricultural farm or plantation falls under the
NLRC, which has jurisdiction to try and decide Zamora's complaint
for illegal dismissal (Art. 217, Labor Code)

FACTS:
The Labor Arbiter rendered a decision holding that Zamoras, as overseer of
the respondent's plantation, was a regular employee whose services were
necessary and desirable to the usual trade or business of his employer.
The Labor Arbiter held that the dismissal of Zamoras was without just cause, hence,
illegal. The private respondents were ordered to reinstate him to his former position
as overseer of the plantation and to pay him backwages in the event that he opted
not to be reinstated or that his reinstatement was not feasible.
The private respondents appealed to the National Labor Relations Commission,
alleging that the Labor Arbiter erred; consequently, the NLRC rendered a decision
reversing the Labor Arbiter. It held that "the right to control test used in determining
the existence of an employer-employee relationship is unavailing in the instant case
and that what exists between the parties is a landlord-tenant relationship" , because
such functions as introducing permanent improvements on the land, assigning
portions to tenants, supervising the cleaning, planting, care and cultivation of the
plants, and deciding where and to whom to sell the copra are attributes of a
landlord-tenant relationship, hence, jurisdiction over the case rests with the Court of
Agrarian Relations.

Zamoras filed a petition, assailing the NLRC's decision.

ISSUE:
Whether or not the NLRC or the Court of Agrarian reform has jurisdiction over the
case.

HELD:
The essential requisites of a tenancy relationship are: (1) the parties are the
landholder and the tenant; (2) the subject is the agricultural holding; (3) there is
consent between the parties; (4) the purpose is agricultural production; (5) there is
personal cultivation by the tenant; and (6) there is a sharing of harvests between
landlord and tenant.
The element of personal cultivation of the land, or with the aid of his farm
household, essential in establishing a landlord-tenant or a lessor-lessee relationship,
is absent in the relationship between Su and Zamoras (Co vs.IAC, 162 SCRA
390; Graza vs. CA, 163 SCRA 39), for Zamoras did not cultivate any part of Su's
plantation either by himself or with the help of his household. On the other hand,
the following circumstances are indicative of an employer-employee relationship p
between them:
1. Zamoras was selected and hired by Su as overseer of the coconut plantation.
2. His duties were specified by Su.
3. Su controlled and supervised the performance of his duties. He determined to
whom
Zamoras should sell the copra produced from the plantation.
4. Su paid Zamoras a salary of P2,400 per month plus one-third of the copra sales
every two months as compensation for managing the plantation. ***Since
Zamoras was an employee, not a tenant of Su, it is the NLRC, not the
Court of Agrarian Relations, which has jurisdiction to try and decide
Zamora's complaint for illegal dismissal (Art. 217, Labor Code)

FORTUNE CEMENT VS NLRC

G.R. No. 79762

POINT OF THE CASE
***A dismissal as a corporate officer is a purely intra-corporate
controversy over which the Securities and Exchange Commission (SEC)
has original and exclusive jurisdiction. (Section 5, par. (c) Of Presidential
Decree No. 902-A)

FACTS:
The FCC (Fortune Cement Corporation) Board approved and adopted a resolution
dismissing Lagdameo as Executive Vice-President of the company, effective
immediately, for loss of trust and confidence.
Lagdameo filed with the National Labor Relations Commission (NLRC), a complaint
for illegal dismissal against FCC alleging that his dismissal was done without a
formal hearing and investigation and, therefore, without due process.
FCC moved to dismiss Lagdameo's complaint on the ground that his
dismissal as a corporate officer is a purely intra-corporate controversy
over which the Securities and Exchange Commission (SEC) has original
and exclusive jurisdiction. The Labor Arbiter granted the motion to
dismiss.
On appeal, however, the NLRC set aside the Labor Arbiter's order and remanded the
case to the Arbitration Branch "for appropriate proceedings". The NLRC denied
FCC's motion for reconsideration.
Dissatisfied, FCC filed this petition for certiorari.

ISSUE:
Whether or not the NLRC has jurisdiction over a complaint filed by a corporate
executive vice-president for illegal dismissal, resulting from a board resolution
dismissing him as such officer.

HELD:
The SC find the petition with merit.
Section 5 of Presidential Decree No. 902-A vests in the SEC original and
exclusive jurisdiction over this controversy:
Sec. 5. In addition to the regulatory and adjudicative functions of the
Securities and Exchange Commission over corporations, partnerships and
other forms of associations registered with it as expressly granted under

existing laws and decrees, it shall have original and exclusive jurisdiction
to hear and decide cases involving:
A) Xxxxxxx
B) Xxxxxxx
C) Controversies in the election or appointments of directors, trustees,
officers or managers of such corporations, partnership or
associations.
The Solicitor General, declining to defend public respondent FCC in its
pleading entitled "Manifestation in Lieu of Comment," aptly observed:
The position of "Executive Vice-President," from which private respondent
Lagdameo claims to have been illegally dismissed, is an elective corporate office.
He himself acquired that position through election by the corporation's Board of
Directors; although he also lost the same as a consequence of the latter's
resolution. Indeed the election, appointment and/or removal of an executive vicepresident is a prerogative vested upon a corporate board. And it must be, not only
because it is a practice observed in petitioner Fortune Cement Corporation, but
more so, because of an express mandate of law.
The Solicitor General pointed out that "a corporate officer's dismissal is always a
corporate act and/or intra-corporate controversy and that nature is not altered by
the reason or wisdom which the Board of Directors may have in taking such action."
***The dispute between petitioner and Lagdameo is of the class described
in Section 5, par. (c) Of Presidential Decree No. 902-A, hence, within the
original and exclusive jurisdiction of the SEC. The Solicitor General
recommended that the petition be granted and the Case be dismissed by
respondent NLRC for lack of jurisdiction.

SEAFDEC VS NLRC
206 SCRA 283
POINT OF THE CASE
***An intergovernmental organization or international agency enjoys
functional independence and freedom from control of the state in whose
territory its office is located, thus, beyond the jurisdiction of the NLRC.

FACTS:
SEAFDEC-AQD is a department of an international organization, the
Southeast Asian Fisheries
Development Center, organized through an agreement entered into,
among others by the Philippines.

Private respondent Juvenal Lazaga was employed as a Research Associate on a

probationary basis by the SEAFDEC-AQD and was appointed Senior External Affairs
Officer. Thereafter, he was appointed to the position of Professional III and
designated as Head of External Affairs Office.
Petitioner Lacanilao in his capacity as Chief of SEAFDEC-AQD sent a notice
of termination to private respondent informing him that due to the financial
constraints being experienced by the department, his services shall be terminated
and that he is entitled to separation benefits equivalent to one (1) month of his
basic salary for every year of service plus other benefits.
Upon petitioner's failure to pay private respondent his separation pay, the latter
filed a complaint against the petitioner for non-payment of separation benefits plus
moral damages and attorney's fees with the Arbitration Branch of the NLRC.
Petitioner alleged that the NLRC has no jurisdiction over the case in as
much as the SEAFDEC-AQD is an international organization and that private
respondent must first secure clearances from the proper departments for property
or money accountability before any claim for separation pay will be paid, and which
clearances had not yet been obtained by the private respondent.
The labor arbiter rendered a decision with some modifications in the awards for
damages, which was affirmed by the NLRC with some modifications likewise as to
the award.
Petitioners filed a Motion for Reconsideration was denied, thus , petitioner
instituted a petition for certiorari alleging that the NLRC has no
jurisdiction to hear and decide respondent Lazaga's complaint since
SEAFDEC-AQD is immune from suit owing to its international character
and the complaint is in effect a suit against the State which cannot be
maintained without its consent.

ISSUE:
Whether or not, the NLRC has jurisdiction to decide a termination case of a local
employee hired by SEAFDEC-AQD, an international organization in which the
Philippines is a signatory.

HELD:
The petition is impressed with merit.

***Petitioner Southeast Asian Fisheries Development Center-Aquaculture

Department (SEAFDEC-AQD) is an international agency beyond the
jurisdiction of public respondent NLRC.
Being an intergovernmental organization, SEAFDEC including its Departments
(AQD), enjoys functional independence and freedom from control of the state in
whose territory its office is located.
Pursuant to its being a signatory to the Agreement, the Republic of the Philippines
agreed to be represented by one Director in the governing SEAFDEC Council and
that its national laws and regulations shall apply only insofar as its contribution to
SEAFDEC of "an agreed amount of money, movable and immovable property and
services necessary for the establishment and operation of the Center" are
concerned. It expressly waived the application of the Philippine laws on the
disbursement of funds of petitioner SEAFDEC-AQD (Section 2, P.D. No.
292)

PEPSI COLA VS GAL-LANG

201 SCRA 695
POINT OF THE CASE
***Not every controversy arising from employee-employer relationship can
be resolved only by the labor arbiters. This will be so only if there is a
"reasonable causal connection" between the claim asserted and
employee-employer relations to put the case under the provisions of
Article 217. Absent such a link, the complaint will be cognizable by the
regular courts of justice in the exercise of their civil and criminal
jurisdiction.

FACTS:
Petitioners filed a criminal complaint for theft against the respondents, employees,
who were suspected of complicity in the irregular disposition of empty Pepsi Cola
bottles, but this was later withdrawn and substituted with a criminal complaint for
falsification of private documents. However, the complaint was dismissed after a
preliminary investigation conducted by the MTC.
Allegedly after an administrative investigation, the private respondents
were dismissed by the petitioner company. As a result, they lodged a
complaint for illegal dismissal with the Regional Arbitration Branch of the
NLRC, and decisions mended reinstatement with damages. In addition,
they instituted in the Regional Trial Court of, a separate civil complaint
against the petitioners for damages arising from what they claimed to be
their malicious prosecution.

Petitioners moved to dismiss the civil complaint on the ground that the
trial court had no jurisdiction over the case because it involved employeeemployer relations that were exclusively cognizable by the labor arbiter.
The motion was granted, however, the respondent judge, acting on the motion for
reconsideration, reinstated the complaint, saying it was "distinct from the labor case
for damages now pending before the labor courts."
The petitioners then came to SC for relief.
The petitioners invoke Article 217 of the Labor Code and a number of
decisions of this Court to support their position that the private
respondents civil complaint for damages falls under the jurisdiction of the
labor arbiter. They particularly cite the case of Getz Corporation v. Court of
Appeals, where it was held that a court of first instance had no jurisdiction over the
complaint filed by a dismissed employee "for unpaid salary and other employment
benefits, termination pay and moral and exemplary damages."

ISSUE:
Whether or not the labor arbiter has jurisdiction on all controversies involving
employee-employer relationship.

HELD:
The petition was denied.
***It must be stressed that not every controversy involving workers and
their employers can be resolved only by the labor arbiters. This will be so
only if there is a "reasonable causal connection" between the claim
asserted and employee-employer relations to put the case under the
provisions of Article 217. Absent such a link, the complaint will be
cognizable by the regular courts of justice in the exercise of their civil and
criminal jurisdiction.
The case involves a complaint for damages for malicious prosecution which was
filed with the Regional Trial Court by the employees of the defendant company. It
does not appear that there is a "reasonable causal connection" between the
complaint and the relations of the parties as employer and employees. The
complaint did not arise from such relations and in fact could have arisen
independently of an employment relationship between the parties. No such
relationship or any unfair labor practice is asserted. What the employees are
alleging is that the petitioners acted with bad faith when they filed the criminal
complaint which the Municipal Trial Court said was intended "to harass the poor
employees" and the dismissal of which was affirmed by the Provincial Prosecutor
"for lack of evidence to establish even a slightest probability that all the
respondents herein have committed the crime imputed against them." This is a

matter which the labor arbiter has no competence to resolve as the

applicable law is not the Labor Code but the Revised Penal Code

TOLOSA VS NLRC
401 SCRA 291
POINT OF THE CASE
***Allegations in the complaint determine the nature of the action and,
consequently, the jurisdiction of the courts.

It is not the NLRC but the regular courts that have jurisdiction over
actions for damages, in which the employer-employee relation is
merely incidental, and in which the cause of action proceeds from a
different source of obligation such as a tort.

FACTS:
Petitioner argues that her cause of action is not predicated on a quasi
delict or tort, but on the failure of private respondents --as employers of her
husband (Captain Tolosa) --to provide him with timely, adequate and competent
medical services under Article 161 of the Labor Code:
ART 161.Assistance of employer.--It shall be the duty of any employer to provide
all the necessary assistance to ensure the adequate and immediate medical and
dental attendance and treatment to an injured or sick employee in case of
emergency.
Likewise, petitioner contends that Article 217 (a) (4)7of the Labor Code vests labor
arbiters and the NLRC with jurisdiction to award all kinds of damages in cases
arising from employer-employee relations.

ISSUE:
Whether or not the NLRC has jurisdiction over the case

HELD:
The NLRC and the labor arbiter have no jurisdiction over petitioner's claim
for damages, because the ruling was based on a quasi delict or tort per
Article 2176 of the Civil Code. It is not the NLRC but the regular courts that have
jurisdiction over actions for damages, in which the employer-employee relation is
merely incidental, and in which the cause of action proceeds from a different source
of obligation such as a tort. Since petitioner's claim for damages is predicated on a
quasi delict or tort that has no reasonable causal connection with any of the claims
provided for in Article 217, other labor statutes, or collective bargaining

agreements, jurisdiction over the action lies with the regular courts--not with the
NLRC or the labor arbiters.
***Time and time again, we have held that the allegations in the complaint
determine the nature of the action and, consequently, the jurisdiction of
the courts. After carefully examining the complaint/position paper of petitioner, we
are convinced that the allegations therein are in the nature of an action based on a
quasi delict or tort.
While it is true that labor arbiters and the NLRC have jurisdiction to award not only
reliefs provided by labor laws, but also damages governed by the Civil Code, these
reliefs must still be based on an action that has a reasonable causal connection with
the Labor Code, other labor statutes, or collective bargaining agreements.
In San Miguel Corporation v. NLRC,
The SC held:"It is the character of the principal relief sought that appears essential
in this connection. Where such principal relief is to be granted under labor
legislation or a collective bargaining agreement, the case should fall within the
jurisdiction of the Labor Arbiter and the NLRC, even though a claim for damages
might be asserted as an incident to such claim.

AUSTRIA VS NLRC
310 SCRA 293
POINT OF THE CASE
***In labor cases concerning illegal dismissals, the burden of proving that
the employee was dismissed with just cause rests upon the employer.
Such is the mandate of Art. 278 of the Labor Code

RULING:
As held in Globe Mackay Cable and Radio Corporation v. NLRC
In the instant case, petitioner has predicated its dismissal of xxxxxx on loss of
confidence. As we have held countless times, while loss of confidence

or breach of trust is a valid ground for termination, it must rest on

some basis which must be convincingly established. An employee
may not be dismissed on mere presumptions and supposition
xxxxxxxxxxxxx. While we should not condone the acts of disloyalty of
an employee, neither should we dismiss him on the basis of
suspicion derived from speculative inferences.

***Accusation cannot take the place of proof. A suspicion or belief no

matter how sincerely felt cannot be a substitute for factual findings
carefully established through an orderly procedure.

Such orderly procedure was denied to petitioner (Austria) by

Respondent (PHILSTEEL) (respondent), as correctly found by the NLRC,
thus:
In the instant case, there was at least a partial denial of the
complainant's right to due process because there was no showing:
(1) That he was given the required first written notice;
(2) That he was given sufficient time to answer the charges against him; and,
(3) That he had the chance to obtain the assistance of counsel.

PAL VS NLRC
287 SCRA 672
POINT OF THE CASE
***Jurisdiction of the NLRC in illegal dismissal cases is appellate in nature
and, therefore, it cannot entertain the private respondents' petition for
injunction which challenges the dismissal orders of petitioner.

Article 218(e) of the Labor Code does not provide blanket authority
to the NLRC or any of its divisions to issue writs of injunction,
considering that Section 1 of Rule XI of the New Rules of Procedure
of the NLRC makes injunction only an ancillary remedy in ordinary
labor disputes."

FACTS:
Private respondents are flight stewards of the petitioner. Both were dismissed
from the service for their alleged involvement in currency smuggling.

Aggrieved by said dismissal, private respondents filed with the

NLRC a petition for injunction to reinstate petitioners to their former

positions and enforcing its Decision while this case is pending adjudication and that
the writ of preliminary injunction as to the reliefs sought for be made permanent,
that petitioners be awarded full backwages, moral damages and exemplary

damages respectively, attorney's fees equivalent to ten percent of whatever

amount is awarded, and the costs of suit.
NLRC issued a temporary mandatory injunction enjoining petitioner to
cease and desist from enforcing its Memorandum of dismissal. In support
of the issuance of the writ of temporary injunction, the NLRC adapted the
view that, among others, the NLRC is empowered under Article 218 (e) of
the Labor Code not only to restrain any actual or threatened commission
of any or all prohibited or unlawful acts but also to require the
performance of a particular act in any labor dispute, which, if not
restrained or performed forthwith, may cause grave or irreparable
damage to any party.
Petitioner moved for reconsideration arguing that the NLRC erred, among
others, 1. . . . In granting a temporary injunction order when it has no jurisdiction to
issue an injunction or restraining order since this may be issued only under Article
218 of the Labor Code if the case involves or arises from labor disputes.
NLRC denied petitioner's motion for reconsideration, ruling:
..that we cannot exercise our injunctive power under Article 218 (e) of
the Labor Code on the pretext that what we have here is not a labor
dispute as long as it concedes that as defined by law, a" (l) "Labor
Dispute" includes any controversy or matter concerning terms or
conditions of employment." If security of tenure, which has been breached
by respondent and which, precisely, is sought to be protected by our
temporary mandatory injunction (the core of controversy in this case) is
not a "term or condition of employment", what then is?...... Anent
respondent's second argument . . . . Article 218 (e) of the Labor Code . . .
empowered the Commission not only to issue a prohibitory injunction, but
a mandatory ("to require the performance") one as well.
Hence, the present recourse

ISSUE:
Whether or not NLRC exceeded its jurisdiction when it issued the assailed petition
for injunction and ordered the petitioner to reinstate private respondents.

HELD:
NLRC exceeded its jurisdiction when it issued the assailed Order
granting private respondents' petition for injunction and ordering
the petitioner to reinstate private respondents.
The power of the NLRC to issue an injunctive writ originates from "any labor
dispute" upon application by a party thereof, which application if not granted "may
cause grave or irreparable damage to any party or render ineffectual any decision
in favor of such party. ( Sec. 1. Injunction in Ordinary Labor Dispute, Rule XI
of the New Rules of Procedure of the NLRC. )
It is an essential requirement that there must first be a labor dispute between the
contending parties before the labor arbiter. In the present case, there is no labor
dispute between the petitioner and private respondents as there has yet been no
complaint for illegal dismissal filed with the labor arbiter by the private respondents
against the petitioner.
The petition for injunction directly filed before the NLRC is in reality an action for
illegal dismissal. This is clear from the allegations in the petition which prays for;
reinstatement of private respondents; award of full backwages, moral and
exemplary damages; and attorney's fees. As such, the petition should have been
filed with the labor arbiter who has the original and exclusive jurisdiction to hear
and decide the following cases involving all workers, whether agricultural or nonagricultural.
On the other hand, the NLRC shall have exclusive appellate jurisdiction over all
cases decided by labor arbiters as provided in Article 217(b) of the Labor Code. In
short, the jurisdiction of the NLRC in illegal dismissal cases is appellate in
nature and, therefore, it cannot entertain the private respondents'
petition for injunction which challenges the dismissal orders of petitioner.

Article 218(e) of the Labor

Code does not provide blanket authority to the NLRC or any of its
divisions to issue writs of injunction, considering that Section 1 of
Rule XI of the New Rules of Procedure of the NLRC makes injunction
only an ancillary remedy in ordinary labor disputes."

PIONEER TEXTURIZINGVS NLRC

280 SCRA 806
POINTS OF THE CASE
***An award for reinstatement shall be immediately executory even
pending appeal and the posting of a bond by the employer shall not stay
the execution for reinstatement.

RULING:
In ruling that an order or award for reinstatement does not require a writ
of execution the Court is simply adhering and giving meaning to this rule.
Henceforth, ****we rule that an award or order for reinstatement is
self-executory. After receipt of the decision or resolution ordering the
employee's reinstatement, the employer has the right to choose whether to readmit the employee to work under the same terms and conditions prevailing prior
to his dismissal or to reinstate the employee in the payroll. In either instance, the
employer has to inform the employee of his choice.
Art. 223. Appeal. . . .
In any event, the decision of the Labor Arbiter reinstating a dismissed or
separated employee, in so far as the reinstatement aspect is concerned,
shall immediately be executory, even pending appeal The posting of a
bond by the employer shall not stay the execution for reinstatement
provided herein.
Art. 224. Execution of decisions, orders, or awards.

(a) The Secretary of Labor and Employment or any Regional Director, the
Commission or any Labor Arbiter, or med-arbiter or voluntary arbitrator may, motu
propio or on motion of any interested party, issue a writ of execution on a
judgment within five (5) years from the date it becomes final and
executory

Article 224 states that the need for a writ of execution applies only within five (5)
years from the date a decision, an order or award becomes final and executory. It
can not relate to an award or order of reinstatement still to be appealed or pending
appeal which Article 223 contemplates. The provision of Article 223 is clear that
an award for reinstatement shall be immediately executory even pending
appeal and the posting of a bond by the employer shall not stay the
execution for reinstatement.

GARCIA VS PAL (EN BANC)

576 SCRA 479
POINT OF THE CASE

***The Court reaffirms the prevailing principle that even if the order
of reinstatement of the Labor Arbiter is reversed on appeal, it is
obligatory on the part of the employer to reinstate and pay the
wages of the dismissed employee during the period of appeal until
reversal by the higher court.

RULING:
It settles the view that the Labor Arbiter's order of reinstatement is
immediately executory and the employer has to either re-admit them to
work under the same terms and conditions prevailing prior to their
dismissal, or to reinstate them in the payroll, and that failing to exercise
the options in the alternative, employer must pay the employees salaries.
The spirit of the rule on reinstatement pending appeal animates the
proceedings once the Labor Arbiter issues the decision containing an
order of reinstatement. The immediacy of its execution needs no further
elaboration. Reinstatement pending appeal necessitates its immediate execution
during the pendency of the appeal, if the law is to serve its noble purpose. At the
same time, any attempt on the part of the employer to evade or delay its execution,
as observed in previous cases, should not be countenanced.
The new NLRC Rules of Procedure, which took effect on January 7, 2006, now require
the employer to submit are port of compliance within 10 calendar days from receipt
of the Labor Arbiters decision, disobedience to which clearly denotes a refusal to
reinstate. The employee need not file a motion for the issuance of the writ of
execution since the Labor Arbiter shall there after motu proprio issue the writ.
With the new rules in place, there is hardly any difficulty in determining the
employers intransigence in immediately complying with the order.

ARIS (PH IL.) IN C. VS NLRC

200 SCRA 246
POINT OF THE CASE
***Execution pending appeal of the reinstatement aspect of a decision by
the Labor
Arbiter reinstating a dismissed or separated employee is recognized.

RULING:
Execution pending appeal is interlinked with the right to appeal. One cannot be
divorced from the other. The latter may be availed of by the losing party or a party
who is not satisfied with a judgment, while the former may be applied for by the
prevailing party during the pendency of the appeal. The right to appeal, however, is
not a constitutional, natural or inherent right. It is a statutory privilege of statutory
origin and, therefore, available only if granted or provided by statute. The law may
then validly provide limitations or qualifications thereto or relief to the prevailing
party in the event an appeal is interposed by the losing party. Execution

pending appeal is one such relief long recognized in this

jurisdiction. The Revised Rules of Court allows execution pending appeal and the
grant thereof is left to the discretion of the court upon good reasons to be stated in
a special order.
Before its amendment by Section 12 of R.A. No. 6715, Article 223 of the
Labor Code already allowed execution of decisions of the NLRC pending
their appeal to the Secretary of Labor and Employment.
In authorizing execution pending appeal of the reinstatement aspect of a decision of
the Labor
Arbiter reinstating a dismissed or separated employee, the law itself has laid down a
compassionate policy which, once more, vivifies and enhances the provisions of the
1987 Constitution on labor and the working-man.
If in ordinary civil actions execution of judgment pending appeal is authorized for
reasons the determination of which is merely left to the discretion of the judge, we
find no plausible reason to withhold it in cases of decisions reinstating
dismissed or separated employees. In such cases, the poor employees had
been deprived of their only source of livelihood; their only means of support for their
family their very lifeblood. To us, this special circumstance is far better than any
other which a judge, in his sound discretion, may determine. In short, with respect
to decisions reinstating employees, the law itself has determined a sufficiently
overwhelming reason for its execution pending appeal.

ST. MARTIN FUNERAL HOMES VS NLRC

295 SCRA 494
POINT OF THE CASE
***Appeals from the NLRC to the Supreme Court are interpreted and
hereby declared to mean and refer to petitions for certiorari; all

such petitions should be initially filed in the Court of Appeals in

strict observance of the doctrine on the hierarchy of courts.

RULING:
While we do not wish to intrude into the Congressional sphere on the matter of the
wisdom of a law, on this score we add the further observations that there is a
growing number of labor cases being elevated to this Court which, not being a trier
of fact, has at times been constrained to remand the case to the NLRC for resolution
of unclear or ambiguous factual findings; that the Court of Appeals is procedurally
equipped for that purpose, aside from the increased number of its component
divisions; and that there is undeniably an imperative need for expeditious action on
labor cases as a major aspect of constitutional protection to labor.

Therefore, all references in the amended Section 9 of B.P. No. 129 to

supposed appeals from the NLRC to the Supreme Court are
interpreted and hereby declared to mean and refer to petitions for
certiorari under Rule 65. Consequently, all such petitions should
hence forth be initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts as the
appropriate forum for the relief desired.
Apropos to this directive that resort to the higher courts should be made
in accordance with their hierarchical order.

EMCO PLYWOOD VS ABELGAS

427 SCRA 496
POINT OF THE CASE
***Not every loss incurred or expected to be incurred by a company will
justify retrenchment. The losses must be substantial and the
retrenchment must be reasonably necessary to avert such losses."
The employer bears the burden of proving the existence or the imminence of
substantial losses with clear and satisfactory evidence that there are legitimate
business reasons justifying a retrenchment.
Should the employer fail to do so, the dismissal shall be deemed unjustified.

RULING:

Retrenchment is one of the authorized causes for the dismissal of

employees. Resorted to by employers to avoid or minimize business
losses, it is recognized under Article 283 of the Labor Code. The "loss"
referred to in this provision cannot be of just any kind or amount;
otherwise, a company could easily feign excuses to suit its whims and
prejudices or to rid itself of unwanted employees.
Retrenchment is only "a measure of last resort when other less drastic
means have been tried and found to be inadequate.
Retrenchment is a management prerogative consistently recognized and
affirmed by the SC.
It is, however, subject to faithful compliance with the substantive and the
procedural requirements laid down by law and jurisprudence. It must be exercised
essentially as a measure of last resort, after less drastic means have been tried and
found wanting

BANTOLINO VS COCA-COLA BOTTLERS

403 SCRA 699
POINT OF THE CASE
***Under the Rules of the Commission, the Labor Arbiter is given the
discretion to determine the necessity of a formal trial or hearing. Hence,
trial-type hearings are not even required as the cases may be decided
based on verified position papers, with supporting documents and their
affidavits

FACTS:
Petitioners

argue that the Court of Appeals should not have given

weight to respondent's claim of failure to cross-examine them. They insist
that, unlike regular courts, labor cases are decided based merely on the
parties' position papers and affidavits in support of their allegations and
subsequent pleadings that may be filed thereto. As such, according to

petitioners, the Rules of Court should not be strictly applied in this case specifically
by putting them on the witness stand to be cross-examined because the NLRC has
its own rules of procedure which were applied by the Labor Arbiter in coming up
with a decision in their favor.
In its disavowal of liability, respondent commented that since the other
alleged affiants were not presented in court to affirm their statements,
much less to be cross-examined, their affidavits should, as the Court of
Appeals rightly held, be stricken off the records for being self-serving,
hearsay and inadmissible in evidence.

ISSUE:
Whether or not there is credence to the propriety of giving evidentiary value to the
affidavits despite the failure of the affiants to affirm their contents and undergo the
test of cross-examination.

HELD:
The petition is impressed with merit. The issue confronting the Court is not
without precedent in jurisprudence. The oft-cited case of Rabago v. NLRC
squarely grapples a similar challenge involving the propriety of the use of affidavits
without the presentation of affiants for cross-examination. In that case, we held that
"the argument that the affidavit is hearsay because the affiants were not presented
for cross-examination is not persuasive because the rules of evidence are not
strictly observed in proceedings before administrative bodies like the
NLRC where decisions may be reached on the basis of position papers
only.
Southern Cotabato Dev. and Construction Co. v. NLRC succinctly states that under
Art. 221 of the Labor Code, the rules of evidence prevailing in courts of
law do not control proceedings before the Labor Arbiter and the NLRC.
Further, it notes that the Labor Arbiter and the NLRC are authorized to adopt
reasonable means to ascertain the facts in each case speedily and
objectively and without regard to technicalities of law and procedure, all
in the interest of due process. We find no compelling reason to deviate
therefrom.
***To reiterate, administrative bodies like the NLRC are not bound by the
technical niceties of law and procedure and the rules obtaining in courts
of law. Under the Rules of the Commission, the Labor Arbiter is given the
discretion to determine the necessity of a formal trial or hearing. Hence,
trial-type hearings are not even required as the cases may be decided
based on verified position papers, with supporting documents and their
affidavits

PIDI VS NLRC
210 SCRA 339
POINT OF THE CASE
***Managerial employees and confidential employees are precluded
to join or form union with the rank and file employees.
If Managerial employees would belong to or be affiliated with a Union,

the latter might not be assured of their loyalty, to the Union in view of
evident conflict of interests. The Union can also become companydominated with the presence of managerial employees in Union
membership, and confidential employees such as accounting personnel,
radio and telegraph operators, who having access to confidential
information, may become the source of undue advantage. Said
employee(s) may act as a spy or, spies of either party to a collective
bargaining agreement.

RULING:
On the main issue raised before Us, it is quite obvious that respondent NLRC
committed grave abuse of discretion in reversing the decision of the Executive
Labor Arbiter and in decreeing that PIDI's "Service Engineers, Sales Force, division
secretaries, all Staff of General Management, Personnel and Industrial Relations
Department, Secretaries of Audit, EDP and Financial Systems are included within the
rank and file bargaining unit."
In the first place, all these employees, with the exception of the service engineers
and the sales force personnel, are confidential employees. Their classification as
such is not seriously disputed by PEO-FFW; the five (5) previous CBAs between PIDI
and PEO-FFW explicitly considered them as confidential employees. By the very
nature of their functions, they assist and act in a confidential capacity to, or have
access to confidential matters of, persons who exercise managerial functions in the
field of labor relations.
As such, the rationale behind the ineligibility of managerial employees to form,
assist or join a labor union equally applies to them.
In Bulletin Publishing Co., Inc. vs. Hon Augusto Sanchez, the Supreme Court
elaborated on this rationale, thus:. . . The rationale for this inhibition has been
stated to be, because if these managerial employees would belong to or be
affiliated with a Union, the latter might not be assured of their loyalty, to the Union
in view of evident conflict of interests. The Union can also become companydominated with the presence of managerial employees in Union membership

In Golden Farms, Inc. vs. Ferrer-Calleja, the Supreme Court explicitly made this
rationale applicable to confidential employees:
This rationale holds true also for confidential employees such as accounting
personnel, radio and telegraph operators, who having access to confidential
information, may become the source of undue advantage. Said employee(s) may
act as a spy or, spies of either party to a collective bargaining agreement. This is
especially true in the present case where the petitioning Union is already the
bargaining agent of the rank-and-file employees in the establishment. To allow the
confidential employees to join the existing Union of the rank-and-file would be in
violation of the terms of the Collective Bargaining Agreement wherein this kind of
employees by the nature of their functions/ positions are expressly excluded.

NAFTU VS MALDE COU-ULGWP

192 SCRA 598
POINT OF THE CASE
***The test of grouping is community or mutuality of interests. This is so
because "the basic test of an asserted bargaining unit's acceptability is
whether or not it is fundamentally the combination which will best assure
to all employees the exercise of their collective bargaining rights."
Certainly, there is a mutuality of interest among the employees of the Sawmill
Division and the Logging Division. Their functions mesh with one another. One group
needs the other in the same way that the company needs them both. There may
be difference as to the nature of their individual assignments but the
distinctions are not enough to warrant the formation of a separate
bargaining unit.

RULING:
In the case at bar, petitioner alleges that the employer MALDECO was composed of
two bargaining units, the Sawmill Division in Butuan City and the Logging Division,
in Zapanta Valley, Kitcharao, Agusan Norte, about 80 kilometers distant from each
other and in fact, had then two separate CBA's, one for the Sawmill Division and
another for the Logging Division, both the petition and decision referred only to one
bargaining unit; that from 1979 to 1985, the Ministry of Labor and Employment
recognized the existence of two (2) separate bargaining units at MALDECO, one for
its Logging Division and another for its Sawmill Division. Significantly, out of two
hundred and one (201) employees of MALDECO, one hundred seventy five (175)

consented and supported the petition for certification election, thereby confirming
their desire for one bargaining representative (Rollo, p. 104).:-nad Moreover, while
the existence of a bargaining history is a factor that may be reckoned with in
determining the appropriate bargaining unit, the same is not decisive or conclusive.
Other factors must be considered. The test of grouping is community or mutuality of
interests. This is so because "the basic test of an asserted bargaining unit's
acceptability is whether or not it is fundamentally the combination which will best
assure to all employees the exercise of their collective bargaining rights."
(Democratic Labor Association v. Cebu Stevedoring Company, Inc., et al., 103 Phil.
1103 [1958]).
Certainly, there is a mutuality of interest among the employees of the Sawmill
Division and the Logging Division. Their functions mesh with one another. One group
needs the other in the same way that the company needs them both. There may be
difference as to the nature of their individual assignments but the distinctions are
not enough to warrant the formation of a separate bargaining unit.

COOPERATIVE RURAL BANK OF DAVAO CITY VS CALLEJA

165 SCRA 725

POINT OF THE CASE

***Employees of cooperatives who are themselves members of the
cooperative have no right to form or join labor organizations for purposes
of collective bargaining for being themselves co-owners of the
cooperative.

FACTS:
Petitioner Cooperative Rural Bank, Inc. is a cooperative banking corporation
operating. It is owned in part by the Government and its employees are
members and co-owners of the same. The petitioner has around 16 rank-andfile employees where there was no existing collective bargaining agreement
between the said employees and the establishment.
Private respondent Federation of Free Workers is a labor organization
registered with the Department of Labor and Employment. It is interested in
representing the said employees for purposes of collective bargaining. Thus,
respondent filed with the then Ministry of Labor and Employment a
verified Petition for certification election among the rank-and-file
employees of the petitioner.

The petitioner argues therein that, among others, a cooperative is not

covered by the Rules governing certification elections inasmuch as it is
not an institution operating for profit. The petitioner also adds that two of
the alleged rank-and-file employees seeking the certification election are
managerial employees disqualified from joining concerted labor activities.
In sum, the petitioner insists that its employees are disqualified from
forming labor organizations for purposes of collective bargaining.

ISSUE:
Whether or not, members and employees of cooperation are disqualified
from forming a labor organization for the purpose of collective bargaining.

HELD:
A cooperative, by its nature is different from an ordinary business concern, being
run either by persons, partnerships, or corporations. Its owners and/or members
are the ones who run and operate the business while the others are its
employees.
An employee therefore of such a cooperative who is a member and co-owner
thereof cannot invoke the right to collective bargaining for certainly an
owner cannot bargain with himself or his co-owners.
Employees of cooperatives who are themselves members of the
cooperative have no right to form or join labor organizations for purposes
of collective bargaining for being themselves co-owners of the
cooperative. However, in so far as it involves cooperatives with

employees who are not members or co-owners thereof, certainly

such employees are entitled to exercise the rights of all workers to
organization, collective bargaining, negotiations and others as are
enshrined in the Constitution and existing laws of the country.

CENECO VS SEC. OF LABOR

201 SCRA 584

POINT OF THE CASE

***Employees who withdrew their membership from the cooperative are
entitled to form or join for purposes of the negotiations for a collective
bargaining agreement.

RULING:

The right of the employees to self-organization is a compelling reason why their

withdrawal from the cooperative must be allowed. As pointed, the resignation of
the member-employees is an expression of their preference for union
membership over that of membership in the cooperative. The avowed

policy of the State to afford full protection to labor and to promote

the primacy of free collective bargaining mandates that the
employees' right to form and join unions for purposes of collective
bargaining be accorded the highest consideration. Membership in an

electric cooperative which merely vests in the member a right to vote during the
annual meeting becomes too trivial and insubstantial vis-a-vis the primordial and
more important constitutional right of an employee to join a union of his
choice.

MERALCO VS SEC. OF LABOR

197 SCRA 275
POINT OF THE CASE
***Security guards may now freely join a labor organization of the

rank and file or that of the supervisory union, depending on their

rank.

RULING:
While therefore under the old rules, security guards were barred from joining a
labor organization of the rank and file, under RA 6715, they may now

freely join a labor organization of the rank and file or that of the
supervisory union, depending on their rank. By accommodating
supervisory employees, the Secretary of Labor must likewise apply
the provisions of RA 6715 to security guards by favorably allowing
them free access to a labor organization, whether rank and file or
supervisory, in recognition of their constitutional right to selforganization.
We are aware however of possible consequences in the implementation of the law
in allowing security personnel to join labor unions within the company they serve.
The law is apt to produce divided loyalties in the faithful performance of their
duties. Economic reasons would present the employees concerned with the
temptation to subordinate their duties to the allegiance they owe the union of which
they are members, aware as they are that it is usually union action that obtains for
them increased pecuniary benefits.
Thus, in the event of a strike declared by their union, security personnel may
neglect or out rightly abandon their duties, such as protection of property of their
employer and the persons of its officials and employees, the control of access to the

employer's premises, and the maintenance of order in the event of emergencies

and untoward incidents.
It is hoped that the corresponding amendatory and/or suppletory laws be passed by
Congress to avoid possible conflict of interest in security personnel.
Comparison of ART 245 of the Labor Code:
OLD RULE: Art. 245. Ineligibility of security personnel to join any labor
organization.
Security guards and other personnel employed for the protection and security of the
person, properties and premises of the employer shall not be eligible for
membership in any labor organization.
On December 24, 1986, Pres. Corazon C. Aquino issued E.O. No. 111 which
eliminated the above-cited provision on the disqualification of security guards. What
was retained was the disqualification of managerial employees, renumbered as
Art.245 (previously Art. 246), as follows:
Art. 245. Ineligibility of managerial employees to joint any labor
organization.
Managerial employees are not eligible to join, assist or form any labor organization.
***With the elimination, security guards were thus free to join a rank and file
organization.
On March 2, 1989, the present Congress passed RA 6715.Section 18
thereof amended Art. 245, to read as follows:
Art. 245. Ineligibility of managerial employees to join any labor
organization; right of supervisory employees.
Managerial employees are not eligible to join, assist or form any labor organization.
Supervisory employees shall not be eligible for membership in a labor organization
of the rank-and-file employees but may join, assist, or form separate labor
organizations of their own. (Emphasis ours)
As will be noted, the second sentence of Art. 245 embodies an amendment
disqualifying supervisory employees from membership in a labor organization of the
rank-and-file employees. It does not include security guards in the
disqualification.

COLGATE-PALMOLIVE VS OPLE
G.R. No. 73681
POINT OF THE CASE

***Direct certification of a Union, as the exclusive collective bargaining

agent for the company by the Labor Minister, constitute to excess of
authority.
The requirements under the law, specifically Secs. 2, 5, and 6 of Rule V, Book V, of
the Rules Implementing the Labor Code are all calculated to ensure that the
certified bargaining representative is the true choice of the employees against all
contenders.
The Constitutional mandate that the State shall "assure the rights of the workers to
self-organization, collective bargaining, security of tenure and just and humane
conditions of work," should be achieved under a system of law such as the
aforementioned provisions of the pertinent statutes. When an overzealous official
by-passes the law on the pretext of retaining a laudable objective, the intendment
or purpose of the law will lose its meaning as the law itself is disregarded. When
respondent Minister directly certified the Union, he in fact disregarded
this procedure and its legal requirements. There was therefore failure to
determine with legal certainty whether the Union indeed enjoyed majority
representation.