DFA vs.

NLRC
G.R. No. 113191, 18 September 1996

3. Whether or not the DFA has the legal standing to file the
present petition

Facts:

4. Whether or not the extraordinary remedy of certiorari is

proper in this case

On 27 January 1993, private respondent Magnayi filed an

illegal dismissal case against ADB. Two summonses were
served, one sent directly to the ADB and the other through
the Department of Foreign Affairs ("DFA"). ADB and the DFA
notified respondent Labor Arbiter that the ADB, as well as its
President and Officers, were covered by an immunity from
legal process except for borrowings, guaranties or the sale
of securities pursuant to Article 50(1) and Article 55 of the
Agreement Establishing the Asian Development Bank (the
"Charter") in relation to Section 5 and Section 44 of the
Agreement Between The Bank And The Government Of The
Philippines Regarding The Bank's Headquarters (the
"Headquarters Agreement").
The Labor Arbiter took cognizance of the complaint on the
impression that the ADB had waived its diplomatic immunity
from suit and, in time, rendered a decision in favour
Magnayi.
The ADB did not appeal the decision. Instead, on 03
November 1993, the DFA referred the matter to the NLRC; in
its referral, the DFA sought a "formal vacation of the void
judgment." When DFA failed to obtain a favorable decision
from the NLRC, it filed a petition for certiorari.
Issues:
1. Whether or not ADB is immune from suit
2. Whether or not by entering into service contracts with
different private companies, ADB has descended to the level
of an ordinary party to a commercial transaction giving rise
to a waiver of its immunity from suit

Held:
1. Under the Charter and Headquarters Agreement, the ADB
enjoys immunity from legal process of every form, except in
the specified cases of borrowing and guarantee operations,
as well as the purchase, sale and underwriting of securities.
The Banks officers, on their part, enjoy immunity in respect
of all acts performed by them in their official capacity. The
Charter and the Headquarters Agreement granting these
immunities and privileges are treaty covenants and
commitments voluntarily assumed by the Philippine
government which must be respected.
Being an international organization that has been extended
a diplomatic status, the ADB is independent of the municipal
law.
"One of the basic immunities of an international
organization is immunity from local jurisdiction, i.e., that it is
immune from the legal writs and processes issued by the
tribunals of the country where it is found. The obvious
reason for this is that the subjection of such an organization
to the authority of the local courts would afford a convenient
medium thru which the host government may interfere in
their operations or even influence or control its policies and
decisions of the organization; besides, such subjection to
local jurisdiction would impair the capacity of such body to
discharge its responsibilities impartially on behalf of its
member-states."
2. No. The ADB didn't descend to the level of an ordinary
party to a commercial transaction, which should have

constituted a waiver of its immunity from suit, by entering

into service contracts with different private companies.
There are two conflicting concepts of sovereign immunity,
each widely held and firmly established. According to the
classical or absolute theory, a sovereign cannot, without its
consent, be made a respondent in the Courts of another
sovereign. According to the newer or restrictive theory, the
immunity of the sovereign is recognized only with regard to
public acts or acts jure imperii of a state, but not with regard
to private act or acts jure gestionis.
Certainly, the mere entering into a contract by a foreign
state with a private party cannot be the ultimate test. Such
an act can only be the start of the inquiry. The logical
question is whether the foreign state is engaged in the
activity in the regular course of business. If the foreign
state is not engaged regularly in a business or trade, the
particular act or transaction must then be tested by its
nature. If the act is in pursuit of a sovereign activity, or an
incident thereof, then it is an act jure imperii, especially
when it is not undertaken for gain or profit.
The service contracts referred to by private respondent have
not been intended by the ADB for profit or gain but are
official acts over which a waiver of immunity would not
attach.
3. Yes. The DFA's function includes, among its other
mandates, the determination of persons and institutions
covered by diplomatic immunities, a determination which,
when challenged, entitles it to seek relief from the court so
as not to seriously impair the conduct of the country's
foreign relations. The DFA must be allowed to plead its case
whenever necessary or advisable to enable it to help keep
the credibility of the Philippine government before the
international community. When international agreements
are concluded, the parties thereto are deemed to have
likewise accepted the responsibility of seeing to it that their
agreements are duly regarded. In our country, this task falls

principally on the DFA as being the highest executive

department with the competence and authority to so act in
this aspect of the international arena. In Holy See vs. Hon.
Rosario, Jr., this Court has explained the matter in good
detail; viz:
"In Public International Law, when a state or international
agency wishes to plead sovereign or diplomatic immunity in
a foreign court, it requests the Foreign Office of the state
where it is sued to convey to the court that said defendant is
entitled to immunity.
"In the United States, the procedure followed is the process
of 'suggestion,' where the foreign state or the international
organization sued in an American court requests the
Secretary of State to make a determination as to whether it
is entitled to immunity. If the Secretary of State finds that
the defendant is immune from suit, he, in turn, asks the
Attorney General to submit to the court a 'suggestion' that
the defendant is entitled to immunity.
"In the Philippines, the practice is for the foreign
government or the international organization to first secure
an executive endorsement of its claim of sovereign or
diplomatic immunity. But how the Philippine Foreign Office
conveys its endorsement to the courts varies.
In
International Catholic Migration Commission vs. Calleja, 190
SCRA 130 (1990), the Secretary of Foreign Affairs just sent a
letter directly to the Secretary of Labor and Employment,
informing the latter that the respondent-employer could not
be sued because it enjoyed diplomatic immunity. In World
Health Organization vs. Aquino, 48 SCRA 242 (1972), the
Secretary of Foreign Affairs sent the trial court a telegram to
that effect. In Baer vs. Tizon, 57 SCRA 1 (1974), the U.S.
Embassy asked the Secretary of Foreign Affairs to request
the Solicitor General to make, in behalf of the Commander
of the United States Naval Base at Olongapo City, Zambales,
a 'suggestion' to respondent Judge. The Solicitor General
embodied the 'suggestion' in a manifestation and
memorandum as amicus curiae.

"In the case at bench, the Department of Foreign Affairs,

through the Office of Legal Affairs moved with this Court to
be allowed to intervene on the side of petitioner. The Court
allowed the said Department to file its memorandum in
support of petitioner's claim of sovereign immunity.
"In some cases, the defense of sovereign immunity was
submitted directly to the local courts by the respondents
through their private counsels. In cases where the foreign
states bypass the Foreign Office, the courts can inquire into
the facts and make their own determination as to the nature
of the acts and transactions involved."
4. Yes. Relative to the propriety of the extraordinary remedy
of certiorari, the Court has, under special circumstances, so
allowed and entertained such a petition when (a) the
questioned order or decision is issued in excess of or without
jurisdiction, or (b) where the order or decision is a patent
nullity, which, verily, are the circumstances that can be said
to obtain in the present case. When an adjudicator is devoid
of jurisdiction on a matter before him, his action that
assumes otherwise would be a clear nullity.
Petition for certiorari is GRANTED, and the decision of the
Labor Arbiter, dated 31 August 1993 is VACATED for being
NULL AND VOID.
The Heritage Hotel Manila vs. NATIONAL UNION OF
WORKERS IN THE HOTEL, RESTAURANT AND ALLIED
INDUSTRIES-HERITAGE HOTEL MANILA SUPERVISORS
CHAPTER (NUWHRAIN-HHMSC) G.R. No. 178296,
January 12, 2011
FACTS:
The respondents petition for certification election was
granted. Petitioner then discovered that respondent had
failed to submit to the Bureau of Labor Relations (BLR) its
annual financial report for several years and the list of its

members since it filed its registration papers in 1995.

Consequently, it filed a Petition for Cancellation of
Registration of respondent, on the ground of the nonsubmission of the said documents. Petitioner prayed that
respondents Certificate of Creation of Local/Chapter be
cancelled and its name be deleted from the list of legitimate
labor organizations. It further requested the suspension of
the certification election proceedings. Nevertheless, the
certification election pushed through and the respondent
won.
The Regional Director of DOLE-NCR and DOLE Secretary
both held that constitutionally guaranteed freedom of
association and right of workers to self-organization
outweighed respondents noncompliance with the statutory
requirements to maintain its status as a legitimate labor
organization.
ISSUE:
Whether or not the failure to comply with the statutory
requirement(filing financial reports and the list of its
members) sufficient ground for the cancellation of
registration of the respondent as a labor union.
HELD:
No, the non-compliance should not be a ground for the
cancellation. Articles 238 and 239 of the Labor Code provide
that failure to file financial reports and the list of its
members are grounds for the cancellation of Union
Organization. However, consideration must be taken of the
fundamental rights guaranteed by Article XIII, Section 3 of
the Constitution, i.e., the rights of all workers to selforganization, collective bargaining and negotiations, and
peaceful concerted activities. Labor authorities should bear
in mind that registration confers upon a union the status of
legitimacy and the concomitant right and privileges granted
by law to a legitimate labor organization, particularly the

right to participate in or ask for certification election in a

bargaining unit. Thus, the cancellation of a certificate of
registration is the equivalent of snuffing out the life of a
labor organization. For without such registration, it loses as
a rule its rights under the Labor Code.
Furthermore, that the Labor Codes provisions on
cancellation of union registration and on reportorial
requirements have been recently amended by Republic Act
(R.A.) No. 9481, An Act Strengthening the Workers
Constitutional Right to Self-Organization, Amending for the
Purpose Presidential Decree No. 442, As Amended,
Otherwise Known as the Labor Code of the Philippines,
which says that failure to file financial reports and list of
union members shall not be a ground for cancellation of
union registration but shall subject the erring officers or
members to suspension, expulsion from membership, or any
appropriate penalty.
PHARMACEUTICAL AND HEALTH CARE ASSOCIATION
OF THE PHILIPPINES VS. DUQUE III
535 SCRA 265
Facts:
On October 28, 1986, President Corazon Aquino issued
Executive Order No. 51 (Milk Code) by virtue of the
legislative powers granted to her under the Freedom
Constitution. One of the preambular clauses of the Milk Code
states that the law seeks to give effect to Article 11 of the
International Code of Marketing of Breastmilk Substitutes
(ICMBS), a code adopted by the World Health Assembly
(WHA) in 1981. From 1982 to 2006, the WHA adopted
several Resolutions to the effect that breastfeeding should
be supported, promoted, and protected; hence, it should be
ensured that nutrition and health claims are not permitted
for breastmilk substitutes.
In 1990, the Philippines ratified the International Convention
on the Rights of the Child. Article 24 of the said instrument

provides that the State must take steps in reducing child

mortality and ensure that all segments in the society,
especially parents and children, are informed of the
advantages of breastfeeding.
On May 15, 2006, the Department of Health (DOH) issued
Administrative Order (AO) No. 2006-0012 entitled, Revised
Implementing Rules and Regulations of Executive Order No.
51, Otherwise Known as the Milk Code, Relevant
International Agreements, Penalizing Violations Thereof, and
for Other Purposes (RIRR). Such Administrative Order is to
take effect on July 7, 2006.
However, on June 28, 2006, petitioner, representing its
members who are manufacturers of breastmilk substitutes,
filed a Petition for Certiorari and Prohibition with Prayer for
the Issuance of a Temporary Restraining Order (TRO) or Writ
of Preliminary Injunction. Petitioner claims that the RIRR is
not valid as it contains provisions that are not constitutional
and go beyond what it is supposed to implement.
Meanwhile, respondents contend that the RIRR implements
not only the Milk Code but also other international
instruments with regard to infant and young child nutrition
and that these international instruments are part of the law
of the land. These are: (1) The United Nations Convention on
the Rights of the Child; (2) The International Covenant
on
Economic, Social and Cultural Rights; and (3) the
Convention on the Elimination of All Forms of Discrimination
against Women. Others are the ICMBS and WHA Resolutions.
On August 15, 2006, the Court issued a Resolution granting
a TRO enjoining the respondents from implementing the
questioned RIRR.

Issues:
1. Whether or not Administrative Order (AO) No. 2006-0012
or the Revised Implementing Rules and Regulations (RIRR)
issued by the Department of Health is unconstitutional;

1.1. Whether pertinent international agreements

entered into by the Philippines are part of the law of the
land and may be implemented by the DOH through the
RIRR; if in affirmative, whether or not the RIRR is in accord
with the international agreements.
Held:
1. Administrative Order (AO) No. 2006-0012 or the Revised
Implementing Rules and Regulations (RIRR) issued by the
Department of Health (DOH) is constitutional except for
some provisions declared as null and void.
1.1. The
pertinent
international
agreements
entered into by the Philippines cannot be considered
as part of the law of the land that can be implemented by
executive agencies without the need of a law enacted by the
legislature; hence, only the provisions of the Milk Code and
not those of international instruments can be validly
implemented by the DOH through RIRR.
The Court finds out that the following international
instruments invoked by the respondents, namely:
(1) The United Nations Convention on Rights of the Child; (2)
The International Covenant on Economic, Social and Cultural
Rights; and (3) Convention on the Elimination of All Forms of
Discrimination against Women, only provide in general
terms the steps that must be taken by the State Parties to
diminish infant and child mortality and inform society of the
advantages of breastfeeding, ensure the health and wellbeing of families, and ensure that women are provided with
services and nutrition in connection with pregnancy and
lactation. Said instruments do not contain specific provisions
regarding the use and marketing of breastmilk substitutes.
Meanwhile, other international instruments invoked by the
respondents have specific provisions regarding breastmilk
substitutes such as the International Code of Marketing of
Breastmilk Substitutes (ICMBS) and the Resolutions of World
Health Association (WHA).

Under the 1987 Constitution, there are two ways for an

international law to become part of the sphere of domestic
law

transformation
or
incorporation.
The
transformation method requires that an international law
be transformed into domestic law through a local legislation.
Treaties can become part of the law of the land through this
method, specifically through the concurrence of at least twothirds of the members of the Senate. In the former, an
international law becomes part of the domestic law by mere
constitutional declaration.
Since the ICMBS and WHA Resolutions have not been
concurred by at least two-thirds of the members of the
Senate as required by Section 21, Article VII of the
Constitution, they are not treaties. However, the ICMBS,
which was adopted by the WHA in 1981, had been
transformed into domestic law through local legislation, the
Milk Code. Due to this, it is the Milk Code that has the force
and effect of law in this jurisdiction and not the ICMBS per
se.
The Milk Code is almost a replica of the ICMBS, but the
former did not adopt the provision in the latter absolutely
prohibiting the advertising or other forms of promotion to
the general public of products within the scope of ICMBS.
Instead, the Milk Code expressly provides that advertising,
promotion, or other marketing materials are duly authorized
and approved by the Inter-Agency Committee (IAC).
On the other hand, Section 2, Article II of the 1987
Constitution provides that the Philippines x x x adopts the
generally accepted principles of international law as part of
the law of the land x x x and embodies the incorporation
method. Generally accepted principles of international law
refers to norms of general or customary international law
which are binding on all states.
In Mijares v. Ranada, international laws become customary
rules accepted as binding as a result of two elements: (1)
the established, widespread, and consistent practice on the

part of the States; and a psychological element known as

the opinion juris sive necessitates. Part of the latter is a
belief that the practice in question is rendered obligatory by
the existence of a rule of law requiring it. In relation to this,
Fr. Joaquin Bernas has a definition of custom or customary
law similar to the one above. According to him, such laws
are followed because of the two elements present such as
the (1) material factor which is how states behave and
includes duration, consistency, and generality of practice of
states; and (2) the subjective factor which is why the states
behave the way they do.
The ICMBS was adopted as a mere recommendation
according to WHA Resolution No. 34.22 and in the
Introduction to the ICMBS. The latter states that
it
would adopt the code in the form of a recommendation
rather than a regulation. On the other hand, Article 62 of
the WHO Constitution states that the WHA Resolutions are
mere recommendations:
Art. 62. Each member shall report annually on the
action taken with respect to recommendations made to it by
the Organization, and with respect to conventions,
agreements, and regulations.
Apparently, the WHA Resolution, which adopts the ICMBS
and subsequent WHA Resolutions that urges member states
to implement the ICMBS, are merely recommendatory and
legally non-binding. Thus, unlike what has been done with
the ICMBS whereby legislature enacted most of the
provisions into law which
is
the
Milk
Code,
the
subsequent
WHA
Resolutions,
specifically
providing
for
exclusive breastfeeding from 0-6 months, continued
breastfeeding up to 24 months, and absolutely prohibiting
advertisements and promotions of breastmilk substitutes,
have not been adopted as a domestic law.
As previously stated, for an international rule to be
considered as customary law, it must be established that
such rule is being followed by states because they consider

it obligatory to comply with such rules. Respondents have

not presented any evidence to prove that the WHA
Resolutions, although signed by most of the member states,
were in fact enforced or practiced by at least a majority of
the member states; neither have respondents proven that
any compliance by member states with said WHA
Resolutions obligatory in nature. Respondents failed to
establish that the provisions of pertinent WHA Resolutions
are customary international law that may be deemed part
of the land. Consequently, legislation is necessary to
transform the provisions of the WHA Resolutions into
domestic law. Therefore, provisions of the WHA Resolutions
cannot be considered as part of the law of the land that can
be implemented by executive agencies without the need of
a law enacted by the legislature.
Section 3, Chapter 1, Title IX of the Revised Administrative
Code of 1987 provides that the DOH shall define the
national health policy, x x x and issue orders and regulations
concerning the implementation of established health
policies. However, nowhere in A.O. No. 2005-0014 is it
declared that as part of such health policy, the
advertisement or promotion of breastmilk substitutes should
be absolutely prohibited. This is because the national policy
of protection, promotion and support of breastfeeding
cannot automatically be equated with a total ban on
advertising for breastmilk substitutes.
In view of the enactment of the Milk Code which does not
contain a total ban on the advertising and promotion of
breastmilk substitutes but merely on the creation of the IAC
which will regulate said advertising and promotion, it follows
that a total ban policy could be implemented only pursuant
to a law amending the Milk Code passed by the legislature.
Thus, only the provisions of the Milk Code, but not those of
subsequent WHA Resolutions, can be validly implemented
by the DOH through RIRR

REPUBLIC v. ASIAPRO COOPERATIVE 538 SCRA 6596

FACTS:
Asiapro, as a cooperative, is composed of owners-members.
Its primary objectives are to provide savings and credit
facilities and to develop other livelihood services for its
owners-members. In the discharge of the aforesaid primary
objectives, respondent cooperative entered into several
Service Contracts with Stanfilco. The owners-members do
not receive compensation or wages from the respondent
cooperative. Instead, they receive a share in the service
surplus which Asiapro earns from different areas of trade it
engages in, such as the income derived from the said
Service Contracts with Stanfilco. In order to enjoy the
benefits under the Social Security Law of 1997, the ownersmembers of Asiapro in Stanfilco requested the services of
the latter to register them with SSS as self-employed and to
remit their contributions as such. Petitioner SSS sent a letter
to respondent cooperative informing the latter that based on
the Service Contracts it executed with Stanfilco, Asiapro is
actually a manpower contractor supplying employees to
Stanfilco and so, it is an employer of its owners-members
working with Stanfilco. Thus, Asiapro should register itself
with petitioner SSS as an employer and make the
corresponding
report
and
remittance
of
premium
contributions.
Despite
letters
received,
respondent
cooperative continuously ignored the demand of petitioner
SSS. Respondent cooperative alleges that its ownersmembers own the cooperative, thus, no employer-employee
relationship can arise between them.

Cooperative Development Authority. It has its Board of

Directors, which directs and supervises its business;
meaning, its Board of Directors is the one in charge in the
conduct and management of its affairs. With that, a
cooperative can be likened to a corporation with a
personality separate and distinct from its owners-members.
It is true that the Service Contracts executed between the
respondent cooperative and Stanfilco expressly provide that
there shall be no employer-employee relationship between
the respondent cooperative and its owners-members.
However, the existence of an employer-employee
relationship cannot be negated by expressly repudiating it in
a contract, when the terms and surrounding circumstances
show otherwise. The employment status of a person is
defined and prescribed by law and not by what the parties
say it should be. It is settled that the contracting parties
may establish such stipulations, clauses, terms and
conditions as they want, and their agreement would have
the force of law between them. However, the agreed terms
and conditions must not be contrary to law, morals,
customs, public policy or public order. The Service Contract
provision in question must be struck down for being contrary
to law and public policy since it is apparently being used by
the respondent cooperative merely to circumvent the
compulsory coverage of its employees, who are also its
owners-members, by the Social Security Law. The four
elements in determining the existence of an employeremployee relationship are all present in this case.

ISSUE:
WON an employer-employee relationship exists between
Stanfilco and its owner-members.

First, It is expressly provided in the Service Contracts that it

is the respondent cooperative which has the exclusive
discretion in the selection and engagement of the ownersmembers as well as its team leaders who will be assigned at
Stanfilco.

HELD:
YES. An owner-member of a cooperative can be an
employee of the latter and an employer-employee
relationship can exist between them. a cooperative acquires
juridical personality upon its registration with the

Second, the weekly stipends or the so-called shares in the

service surplus given by the respondent cooperative to its
owners-members were in reality wages, as the same were
equivalent to an amount not lower than that prescribed by
existing labor laws, rules and regulations, including the

wage order applicable to the area and industry, they are

also given to the owners-members as compensation in
rendering services to respondent cooperatives client,
Stanfilco.
Third, It is the respondent cooperative which has the power
to investigate, discipline and remove the owners-members
and its team leaders who were rendering services at
Stanfilco.
Fourth and most importantly, it is the respondent
cooperative which has the sole control over the manner and
means of performing the services under the Service
Contracts with Stanfilco as well as the means and methods
of work. All these clearly prove that, indeed, there is an
employer-employee relationship between the respondent
cooperative and its owners-members.

ARLENE T. SAMONTE, VLADIMIR P. SAMONTE, MA.

AUREA S. ELEPANO v. LA SALLE GREENHILLS, INC.
G.R. No.199683
FACTS:
FROM 1989, and for 15 years thereafter, respondent Las
Salle Greenhills, Inc. (LSGI) contracted the services of
medical professionals, specifically pediatricians, dentists,
and a physician to comprise its Health Service Team (HST).
Petitioners Arlene T. Samonte, Vladimir P. Samonte, and Ma.
Aurea S. Elepano, along with other members of the HST
signed uniform one-page contracts of retainer for the period
of a specific academic calendar beginning in June of 1989
and the succeeding 15 years and terminating in March of
the following year when the school year ends.
When the last contract of retainer for the school year 20032004 i.e., June 1, 2003 to March 31, 2004 ended, LSGI head
administrator Herman Rochester informed the medical

service team, including petitioners, that their contracts will

no longer be renewed for the following school year by
reason of LSGIs decision to hire two full-time doctors and
dentists. When petitioners requests for payment of their
separation pay were denied, they filed a complaint for illegal
dismissal with prayer for separation pay, damages, and
attorneys fees against LSGI and Bro. Bernard S. Oca.
The Court of Appeals (CA) upheld the decision of the
National Labor Relations Commission (NLRC) finding that
petitioners were fixed-period employees. It ruled against
petitioners claim of regular employment.

ISSUES:
Whether or not, the petitioners are regular employees of
LSGI.

HELD:
Yes. The uniform one-page contracts of retainer signed by
petitioners were prepared by LSGI alone. Petitioners,
medical professionals as they were, were still not on equal
footing with LSGI as they obviously did not want to lose their
jobs that they had stayed in for 15 years.

There is no specificity in the contracts regarding terms and

conditions of employment that would indicate that
petitioners and LSGI were on equal footing in negotiating it.
Notably, without specifying what the tasks assigned to
petitioners are, LSGI may upon prior written notice to the
retainer, terminate the contract should the retainer fail in

any way to perform his assigned job/task to the satisfaction

of La Salle Greenhills, Inc. or for any other just cause.
While vague in its sparseness, the contract of retainer very
clearly spelled out that LSGI had the power of control over
petitioners.
Time and again, we have held that the power of control
refers to the existence of the power and not necessarily to
the actual exercise thereof, nor is it essential for the
employer to actually supervise the performance of duties of
the employee. It is enough that the employer has the right
to wield that power.
In all, given the following: (1) repeated renewal of
petitioners contract for 15 years, interrupted only by the
close of the school year; (2) the necessity of the work
performed by petitioners as school physicians and dentists;
and (3) the existence of LSGIs power of control over the
means and method pursued by petitioners in the
performance of their job, we rule that petitioners attained
regular employment, entitled to security of tenure who
could only be dismissed for just and authorized causes.
Consequently, petitioners were illegally dismissed and are
entitled to the twin remedies of payment of separation pay
and full back wages.
We order separation pay in lieu of reinstatement given the
time that has lapsed, twelve years, in the litigation of this
case.

CALDERON VS CARALE
208 SCRA 254
FACTS:
In 1989, RA 6715 was passed. This law amended PD 442 or
the Labor Code. RA 6715 provides that the Chairman, the
Division Presiding Commissioners and other Commissioners

[of the NLRC] shall all be appointed by the President, subject

to confirmation by the CoA. Appointments to any vacancy
shall come from the nominees of the sector which
nominated the predecessor. Pursuant to the law, Cory
assigned Carale et al as the Chairman and the
Commissioners respectively of the NLRC, the appointment
was not submitted to the CoA for its confirmation. Calderon
questioned the appointment saying that w/o the
confirmation by the CoA, such an appointment is in violation
of RA 6715. Calderon asserted that RA 6715 is not an
encroachment on the appointing power of the executive
contained in Sec16, Art. 7, of the Constitution, as Congress
may, by law, require confirmation by the Commission on
Appointments of other officers appointed by the President
additional to those mentioned in the first sentence of Sec 16
of Article 7 of the Constitution.
ISSUE:
Whether or not Congress may, by law, require confirmation
by the CoA of appointments extended by the President to
government officers additional to those expressly mentioned
in the first sentence of Sec. 16, Art. 7 of the Constitution
whose appointments require confirmation by the CoA.
RULING:
The SC agreed with the Sol-Gen, confirmation by the CoA is
required exclusively for the heads of executive departments,
ambassadors, public ministers, consuls, officers of the
armed forces from the rank of colonel or naval captain, and
other officers whose appointments are vested in the
President by the Constitution, such as the members of the
various Constitutional Commissions. With respect to the
other officers whose appointments are not otherwise
provided for by the law and to those whom the President
may be authorized by law to appoint, no confirmation by the
Commission on Appointments is required.
Jurisprudence established the following in interpreting Sec
16, Art 7 of the Constitution:

1. Confirmation by the Commission on Appointments is

required only for presidential appointees mentioned in the
first sentence of Section 16, Article VII, including, those
officers whose appointments are expressly vested by the
Constitution itself in the president (like sectoral
representatives to Congress and members of the
constitutional commissions of Audit, Civil Service and
Election).
2. Confirmation is not required when the President appoints
other government officers whose appointments are not
otherwise provided for by law or those officers whom he
may be authorized by law to appoint (like the Chairman and
Members of the Commission on Human Rights).
Mayor v. Macaraig
G.R. No. 87211, March 5, 1991

The petitioners have the right to remain in office until the

expiration of the terms for which they have been appointed,
unless sooner removed for cause provided by law.
A recognized cause for removal or termination is the
abolition by law of his office as a result of reorganization
carried out by reason of economy or to remove redundancy
of functions, or clear and explicit constitutional mandate for
such termination of employment.
Abolition of office is not the same as declaring that office is
vacant. The latter would constitute an infringement of the
constitutional guarantee of security of tenure.

FACT:
RA No. 6715 Declaring Vacant all positions of the
Commissioners, Executive Labor Arbiters and Labor Arbiters
of the present National Labor Relations Commissions The
old positions were declared vacant because of the need to
professionalize the higher levels of officialdom invested with
adjudicatory powers and functions, and upgrade their
qualifications, ranks and salaries or emoluments.
ISSUE:
Whether or not RA 6715 has worked such an abolition of the
petitioners' offices, expressly or impliedly
HELD:
It is immediately apparent that there is NO express abolition
in RA 6715 of the petitioners' positions.

Employees of Bayer Phils, et al. v. Bayer Phils, et al.

G.R. No. 162943 : December 6, 2010
EMPLOYEES UNION OF BAYER PHILS., FFW and
JUANITO S. FACUNDO, in his capacity as President,
Petitioners, v. BAYER PHILIPPINES, INC., DIETER J.
LONISHEN (President), ASUNCION AMISTOSO (HRD
Manager),
AVELINA
REMIGIO
AND
ANASTACIA
VILLAREAL, Respondents.
VILLARAMA, JR., J.:

FACTS:
EUBP, headed by its president Juanito S. Facundo (Facundo),
negotiated with Bayer for the signing of a collective
bargaining agreement (CBA). During the negotiations, EUBP
rejected Bayers 9.9% wage-increase proposal resulting in a
bargaining deadlock. Subsequently, EUBP staged a strike,
prompting the Secretary of the Department of Labor and
Employment (DOLE) to assume jurisdiction over the dispute.
Pending the resolution of the dispute, respondent Avelina
Remigio (Remigio) and 27 other union members, without
any authority from their union leaders, accepted Bayers
wage-increase proposal. EUBPs grievance committee
questioned Remigios action and reprimanded Remigio and
her allies. DOLE Secretary issued an arbitral award ordering
EUBP and Bayer to execute a CBA.
A tug-of-war then ensued between the two rival groups, with
both seeking recognition from Bayer and demanding
remittance of the union dues collected from its rank-and-file
members. Remigios splinter group wrote Facundo, FFW and
Bayer informing them of the decision of the majority of the
union members to disaffiliate from FFW. This was followed
by another letter informing Facundo, FFW and Bayer that an
interim set of REUBP executive officers and board of
directors had been appointed, and demanding the
remittance of all union dues to REUBP.
Bayer responded by deciding not to deal with either of the
two groups, and by placing the union dues collected in a
trust account until the conflict between the two groups is
resolved.
EUBP filed a complaint for ULP against Bayer for nonremittance of union dues. (First ULP Complaint). While the
first ULP case was still pending and despite EUBPs repeated
request for a grievance conference, Bayer decided to turn
over the collected union dues amounting to P254,857.15 to
respondent Anastacia Villareal, Treasurer of REUBP.
Aggrieved by the said development, EUBP lodged a
complaint against Remigios group before the Industrial
Relations Division of the DOLE praying for their expulsion

from EUBP for commission of "acts that threaten the life of

the union."
Labor Arbiter Jovencio Ll. Mayor, Jr. dismissed the first ULP
complaint for lack of jurisdiction. The Arbiter explained that
the root cause for Bayers failure to remit the collected union
dues can be traced to the intra-union conflict between EUBP
and Remigios group and that the charges imputed against
Bayer should have been submitted instead to voluntary
arbitration.
Petitioners filed a second ULP complaint against herein
respondents. Labor Arbiter Waldo Emerson R. Gan dismissed
EUBPs second ULP complaint for lack of jurisdiction.
Aggrieved by the Labor Arbiters decision to dismiss the
second ULP complaint, petitioners appealed the said
decision, but the NLRC denied the appeal. Thus, petitioners
filed a Rule 65 petition but the same was denied. Hence, this
petition.
ISSUE:
Whether or not the LA has jurisdiction over the 2nd ULP
complaint
HELD:
An intra-union dispute refers to any conflict between and
among union members, including grievances arising from
any violation of the rights and conditions of membership,
violation of or disagreement over any provision of the unions
constitution and by-laws, or disputes arising from chartering
or disaffiliation of the union.
It is clear from the foregoing that the issues raised by
petitioners do not fall under any of the aforementioned
circumstances constituting an intra-union dispute . More
importantly, the petitioners do not seek a determination of
whether it is the Facundo group (EUBP) or the Remigio group
(REUBP) which is the true set of union officers. Instead, the
issue raised pertained only to the validity of the acts of
management in light of the fact that it still has an existing
CBA with EUBP. Thus as to Bayer, Lonishen and Amistoso the
question was whether they were liable for unfair labor
practice, which issue was within the jurisdiction of the NLRC.

The dismissal of the second ULP complaint was therefore

erroneous.
However, as to respondents Remigio and Villareal, we find
that petitioners complaint was validly dismissed.
Petitioners ULP complaint cannot prosper as against
respondents Remigio and Villareal because the issue, as
against them, essentially involves an intra-union dispute
based on Section 1 (n) of DOLE Department Order No. 4003. To rule on the validity or illegality of their acts, the Labor
Arbiter and the NLRC will necessarily touch on the issues
respecting the propriety of their disaffiliation and the legality
of the establishment of REUBP issues that are outside the
scope of their jurisdiction. Accordingly, the dismissal of the
complaint was validly made, but only with respect to these
two respondents.
ISSUE: Whether or not Bayer, Lonishen and Amistoso liable
for unfair labor practice
HELD:
It is axiomatic in labor relations that a CBA entered into by a
legitimate labor organization that has been duly certified as
the exclusive bargaining representative and the employer
becomes the law between them.
It must be remembered that a CBA is entered into in order
to foster stability and mutual cooperation between labor and
capital. An employer should not be allowed to rescind
unilaterally its CBA with the duly certified bargaining agent
it had previously contracted with, and decide to bargain
anew with a different group if there is no legitimate reason
for doing so and without first following the proper procedure.
Respondents cannot claim good faith to justify their acts.
They knew that Facundos group represented the dulyelected officers of EUBP. Moreover, they were cognizant of
the fact that even the DOLE Secretary himself had
recognized the legitimacy of EUBPs mandate by rendering
an arbitral award ordering the signing of the 1997-2001 CBA
between Bayer and EUBP. Respondents were likewise wellaware of the pendency of the intra-union dispute case, yet
they still proceeded to turn over the collected union dues to

REUBP and to effusively deal with Remigio. The totality of

respondents conduct, therefore, reeks with anti-EUBP
animus.
GRANTED
Jardin v. NLRC (G.R. No. 119268)

FACTS:
Petitioners
were
drivers
of
Respondent
(Philjama
International Inc.) a domestic corporation engaged in the
operation of Goodman Taxi under a boundary system.
Believing that the deduction for the washing of taxi units in
their daily earnings is illegal, Petitioners decided to form a
labor union to protect their rights and interests.

Upon learning about the plan of Petitioners, Respondent

refused to let them drive their taxicabs when they reported
for work, and on succeeding days. Aggrieved, Petitioners
filed with the labor arbiter a complaint against Respondent
for unfair labor practice, illegal dismissal and illegal
deduction of washing fees. In a decision, the labor arbiter
dismissed said complaint for lack of merit.
On appeal, the NLRC reversed and set aside the judgment of
the labor arbiter declaring that Petitioners are employees of
Respondent, and, as such, their dismissal must be for just
cause and after due process.
Respondents first motion for reconsideration having been
denied, another motion was filed and was granted by the
NLRC, ruling that the relationship of the parties is not that of
an employer-employee but that of leasehold and thus
covered by the Civil Code rather than the Labor Code. NLRC

denied Petitioners
petition.

reconsideration,

hence

the

instant

ISSUE:
Whether or not there exists an employer-employee
relationship between petitioner and private respondent.

RULING:
The petition is impressed with merit.
In a number of cases decided by this Court, we ruled that
the relationship between jeepney owners/operators on one
hand and jeepney drivers on the other under the boundary
system is that of employer-employee and not of lessorlessee. We explained that in the lease of chattels, the lessor
loses complete control over the chattel leased although the
lessee cannot be reckless in the use thereof, otherwise he
would be responsible for the damages to the lessor. In the
case of jeepney owners/operators and jeepney drivers, the
former exercise supervision and control over the latter. The
management of the business is in the owners hands. The
owner as holder of the certificate of public convenience
must see to it that the driver follows the route prescribed by
the franchising authority and the rules promulgated as
regards its operation. Now, the fact that the drivers do not
receive fixed wages but get only that in excess of the socalled boundary they pay to the owner/operator is not
sufficient to withdraw the relationship between them from
that of employer and employee. We have applied by
analogy the abovestated doctrine to the relationships

between bus owner/operator and bus conductor, auto-calesa

owner/operator and driver, and recently between taxi
owners/operators and taxi drivers. Hence, petitioners are
undoubtedly employees of private respondent because as
taxi drivers they perform activities which are usually
necessary or desirable in the usual business or trade of their
employer.
With regard to the amount deducted daily by private
respondent from petitioners for washing of the taxi units, we
view the same as not illegal in the context of the law. We
note that after a tour of duty, it is incumbent upon the driver
to restore the unit he has driven to the same clean condition
when he took it out. Car washing after a tour of duty is
indeed a practice in the taxi industry and is in fact dictated
by fair play. Hence, the drivers are not entitled to
reimbursement of washing charges.
WHEREFORE, the instant petition is GRANTED. The assailed
DECISION of NLRC is hereby SET ASIDE. The DECISION and
RESOLUTION of NLRC are hereby REINSTATED subject to
MODIFICATION. Respondent is directed to reinstate
Petitioners to their positions held at the time of the
complained dismissal. Respondent is likewise ordered to pay
Petitioners their full backwages, to be computed from the
date of dismissal until their actual reinstatement. However,
the order of Respondent that Petitioners be reimbursed the
amount paid as washing charges is deleted.

Villamaria v CA (Labor Standards)

Villamaria v CA & Bustamante GR No. 165881 April
19, 2006

FACTS:
- Oscar Villamaria, Jr. was the owner of Villamaria Motors, a
sole proprietorship engaged in assembling passenger
jeepneys with a public utility franchise to operate along the
Baclaran-Sucat route. By 1995, Villamaria stopped
assembling jeepneys and retained only nine, four of which
operated by employing drivers on a boundary basis. One
of those drivers was respondent Bustamante.
- Bustamante remitted 450 a day to Villamaria as boundary
and kept the residue of his daily earnings as compensation
for driving the vehicle. In August 1997, Villamaria verbally
agreed to sell the jeepney to Bustamante under a
boundary-hulog scheme, where Bustamante would remit
to Villamaria P550 a day for a period of 4 years; Bustamane
would then become the owner of the vehicle and continue to
drive the same under Villamarias franchise, but with Php
10,000 downpayment.
- August 7, 1997, Villamaria executed a contract entitled
Kasunduan ng Bilihan ng Sasakyan sa Pamamagitan ng
Boundary Hulog. The parties agreed that if Bustamante
failed to pay the boundary- hulog for 3 days, Villamaria
Motors would hold on to the vehicle until Bustamante paid
his arrears, including a penalty of 50 a day; in case
Bustamante failed to remit the daily boundary-hulog for a
period of one week, the Kasunduan would cease to have the
legal effect and Bustamante would have to return the
vehicle
to
Villamaria
motors.
- In 1999, Bustamante and other drivers who also had the
same arrangement failed to pay their respective boundaryhulog. The prompted Villamaria to serve a Paalala. On July
24, 2000. Villamaria took back the jeepney driven by
Bustamante and barred the latter from driving the vehicle.
- Bustamante filed a complaint for Illegal Dismissal.
DECISION OF LOWER COURTS:
*Labor
Arbiter:
petition
*NLRC:
dismissed

dismissed.
appeal.

*CA: reversed NLRC, awarded Bustamante separation pay

and
backwages.
Hence,
this
petition
for
review
on
certiorari.
ISSUES:
(1) WON the existence of a boundary-hulog agreement
negates the employer-employee relationship between the
vendor
and
vendee
(2) WON the Labor Arbiter has jurisdiction over a complaint
for illegal dismissal in such a case.
HELD:
(1) NO. Under the boundary-hulog scheme, a dual juridical
relationship is created; that of employer- employee and
vendor-vendee. The Kasanduan did not extinguish the
employer employee relationship of the parties existing
before the execution of said deed.
a. Under this system the owner/operator exercises control
and supervision over the driver. It is unlike in lease of
chattels where the lessor loses complete control over the
chattel leased but the lessee is still ultimately responsible
for the consequences of its use. The management of the
business is still in the hands of the owner/operator, who,
being the holder of the certificate of public convenience,
must see to it that the driver follows the route prescribed by
the franchising and regulatory authority, and the rules
promulgated with regard to the business operations.
b. The driver performs activities which are usually necessary
or desirable in the usual business or trade of the
owner/operator. Under the Kasunduan, respondent was
required to remit Php 550 daily to petitioner, an amount
which represented the boundary of petitioner as well as
respondents partial payment (hulog) of the purchase price
of the jeepney. Thus, the daily remittances also had a dual
purpose: that of petitioners boundary
and respondents partial payment (hulog) for the vehicle.
c. The obligation is not novated by an instrument that
expressly
recognizes
the
old
one,
changes only the terms of payment and adds other
obligations not incompatible with the old provisions or

where the contract merely supplements the previous one.

G.R. No. 162419

d. The existence of an employment relation is not

dependent on how the worker is paid but on the presence or
absence of control over the means and method of the
work. The amount earned in excess of the boundary hulog
is equivalent to wages and the fact that the power of
dismissal was not mentioned in the Kasunduan did not mean
that private respondent never exercised such power, or
could not exercise such power.

July 10, 2007

(2) YES. The Labor Arbiter and the NLRC has jurisdiction
under Article 217 of the Labor Code is limited to disputes
arising from an employer-employee relationship which can
only be resolved by reference to the Labor Code, other labor
statues of their collective bargaining agreement.
OTHER NOTES:
(1) The rule is that the nature of an action and subject
matter thereof, as well as, which court or agency of the
government has jurisdiction and the character of the reliefs
prayed for, whether or not the complainant/plaintiff is
entitled
to
any
or
all
of
such
reliefs.
(2) Not every dispute between an employer and employee
involves matters that only the Labor Arbiter and the NLRC
can resolve in the exercise of their adjudicatory or quasijudicial powers. Actions between employers and employees
where the employer-employee relationship is merely
incidental is within the exclusive original jurisdiction of the
regular courts.

PAUL V. SANTIAGO, petitioner, vs. CF SHARP CREW

MANAGEMENT, INC., respondent.

FACTS:
Petitioner had been working as a seafarer for Smith Bell
Management, Inc. (respondent) for about 5 yrs. In February
3, 1998, petitioner signed a new contract of employment
with respondent, with the duration of 9 months. The
contract was approved by POEA. Petitioner was to be
deployed on board the MSV Seaspread which was
scheduled to leave the port of Manila for Canada on 13
February 1998.
A week before the date of departure, Capt. Pacifico
Fernandez, respondents Vice President, sent a facsimile
message to the captain of MSV Seaspread,, saying that it
received a phone call from Santiagos wife and some other
callers who did not reveal their identity and gave him some
feedbacks that Paul Santiago this time, if allowed to depart,
will jump ship in Canada like his brother Christopher
Santiago. The captain of MSV Seaspread replied that it
cancel plans for Santiago to return to Seaspread.
Petitioner thus told that he would not be leaving for Canada
anymore. Petitioner filed a complaint for illegal dismissal,
damages, and attorneys fees against respondent and its
foreign principal, Cable and Wireless (Marine) Ltd. The Labor
Arbiter (LA) favored petitioner and ruled that the
employment contract remained valid but had not
commenced since petitioner was not deployed and that

respondent violated the rules and regulations governing

overseas employment when it did not deploy petitioner,
causing petitioner to suffer actual damages. On appeal by
respondent, NLRC ruled that there is no employer-employee
relationship between petitioner and respondent because the
employment contract shall commence upon actual
departure of the seafarer from the airport or seaport at the
point of hire and with a POEA-approved contract. In the
absence of an employer-employee relationship between the
parties, the claims for illegal dismissal, actual damages, and
attorneys fees should be dismissed. But the NLRC found
respondents decision not to deploy petitioner to be a valid
exercise of its management prerogative. Petitioner filed MR
but it was denied. He went to CA. CA affirmed the decision
of NLRC. Petitioners MR was denied. Hence this case.

ISSUE:
When does an employer- employee relationship begin in the
case at bar.

RULING:
There is some merit in the petition. The parties entered into
an employment contract whereby petitioner was contracted
by respondent to render services on board MSV Seaspread
for the consideration of US$515.00 per month for 9 months,
plus overtime pay. However, respondent failed to deploy
petitioner from the port of Manila to Canada. Considering
that petitioner was not able to depart from the airport or

seaport in the point of hire, the employment contract did not

commence, and no employer-employee relationship was
created between the parties. However, a distinction must be
made between the perfection of the employment contract
and the commencement of the employer-employee
relationship. The perfection of the contract, which in this
case coincided with the date of execution thereof, occurred
when petitioner and respondent agreed on the object and
the cause, as well as the rest of the terms and conditions
therein. The commencement of the employer-employee
relationship would have taken place had petitioner been
actually deployed from the point of hire. Thus, even before
the
start
of
any
employer-employee
relationship,
contemporaneous with the perfection of the employment
contract was the birth of certain rights and obligations, the
breach of which may give rise to a cause of action against
the erring party. Thus, if the reverse had happened, that is
the seafarer failed or refused to be deployed as agreed
upon, he would be liable for damages.
Neither the manning agent nor the employer can simply
prevent a seafarer from being deployed without a valid
reason. Respondents act of preventing petitioner from
departing the port of Manila and boarding MSV Seaspread
constitutes a breach of contract, giving rise to petitioners
cause of action. Respondent unilaterally and unreasonably
reneged on its obligation to deploy petitioner and must
therefore answer for the actual damages he suffered.
Despite the absence of an employer-employee relationship
between petitioner and respondent, the Court rules that the
NLRC has jurisdiction over petitioners complaint. The
jurisdiction of labor arbiters is not limited to claims arising
from employer-employee relationships. Section 10 of R.A.
No. 8042 (Migrant Workers Act), provides that:

Sec. 10. Money Claims. Notwithstanding any provision of

law to the contrary, the Labor Arbiters of the NLR) shall have
the original and exclusive jurisdiction to hear and decide,
within 90 calendar days after the filing of the complaint, the
claims arising out of an employer-employee relationship or
by virtue of any law or contract involving Filipino workers for
overseas deployment including claims for actual, moral,
exemplary and other forms of damages.
Since the present petition involves the employment contract
entered into by petitioner for overseas employment, his
claims are cognizable by the labor arbiters of the NLRC.
Respondent is liable to pay petitioner only the actual
damages in the form of the loss of nine (9) months worth of
salary as provided in the contract. He is not, however,
entitled to overtime pay. While the contract indicated a fixed
overtime pay, it is not a guarantee that he would receive
said amount regardless of whether or not he rendered
overtime work. Even though petitioner was prevented
without valid reason from rendering regular much less
overtime service, the fact remains that there is no certainty
that petitioner will perform overtime work had he been
allowed to board the vessel. The amount stipulated in the
contract will be paid only if and when the employee
rendered overtime work. Realistically speaking, a seaman,
by the very nature of his job, stays on board a ship or vessel
beyond the regular eight-hour work schedule. For the
employer to give him overtime pay for the extra hours when
he might be sleeping or attending to his personal chores or
even just lulling away his time would be extremely unfair
and unreasonable.
The Court also holds that petitioner is entitled to attorneys
fees in the concept of damages and expenses of litigation.

Respondents basis for not deploying petitioner is the belief

that he will jump ship just like his brother, a mere suspicion
that is based on alleged phone calls of several persons
whose identities were not even confirmed. This Court has
upheld management prerogatives so long as they are
exercised in good faith for the advancement of the
employers interest and not for the purpose of defeating or
circumventing the rights of the employees under special
laws or under valid agreements. Respondents failure to
deploy petitioner is unfounded and unreasonable. However,
moral damages cannot be awarded in this case. because
respondents action was not tainted with bad faith, or done
deliberately to defeat petitioners rights, as to justify the
award of moral damages.

Seafarers are considered contractual employees and cannot

be considered as regular employees under the Labor Code.
Their employment is governed by the contracts they sign
every time they are rehired and their employment is
terminated when the contract expires. The exigencies of
their work necessitates that they be employed on a
contractual basis.

WHEREFORE, petition is GRANTED IN PART.

PEPSI-COLA DISTRIBUTORS VS. HON. GAL-LANG

FACTS: The private respondents were employees of the
petitioner who were suspected of complicity in the irregular

disposition of empty Pepsi Cola bottles. On July 16, 1987,

the petitioners filed a criminal complaint for theft against
them but this was later withdrawn and substituted with a
criminal complaint for falsification of private documents.
After a preliminary investigation conducted by the Municipal
Trial Court of Tanauan, Leyte, the complaint was dismissed.
Allegedly after an administrative investigation, the private
respondents were dismissed by the petitioner company on
November 23, 1987. As a result, they lodged a complaint for
illegal dismissal with the Regional Arbitration Branch of the
NLRC
in
Tacloban
City
and
decisions
mandated
reinstatement with damages. In addition, they instituted in
the Regional Trial Court of Leyte, a separate civil complaint
against the petitioners for damages arising from what they
claimed to be their malicious prosecution.
The petitioners moved to dismiss the civil complaint on the
ground that the trial court had no jurisdiction over the case
because it involved employee-employer relations that were
exclusively cognizable by the labor arbiter. The motion was
granted .On July 6, 1989, 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 this Court for relief.
ISSUE: Whether or not it is the Labor Arbiter has jurisdiction
over the claim for damages arising from the malicious
prosecution of the petitioner company.
RULING: No. 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 now
before the Court involves a complaint for damages for
malicious prosecution which was filed with the Regional Trial
Court of Leyte 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.
Petition Denied with cost against the petitioner.

G.R. No. L-47739 June 22, 1983

SINGAPORE
AIRLINES
LIMITED,
petitioner,
vs.
HON. ERNANI CRUZ PAO as Presiding Judge of
Branch XVIII, Court of First Instance of Rizal, CARLOS
E. CRUZ and B. E. VILLANUEVA, respondents.

Bengzon, Zarraga, Narciso, Cudala Pecson, Azucena &

Bengzon Law Offices for petitioner.
Celso P. Mariano Law Office for private respondent Carlos
Cruz.
Romeo Comia for private respondent B. E. Villanueva.
MELENCIO-HERRERA, J.:
On the basic issue of lack of jurisdiction, petitioner company
has elevated to us for review the two Orders of respondent
Judge dated October 28, 1977 and January 24, 1978
dismissing petitioner's complaint for damages in the first
Order, and denying its Motion for Reconsideration in the
second.
On August 21, 1974, private respondent Carlos E. Cruz was
offered employment by petitioner as Engineer Officer with
the opportunity to undergo a B-707 I conversion training
course," which he accepted on August 30, 1974. An express
stipulation in the letter-offer read:
3. BONDING. As you win be provided with conversion
training you are required to enter into a bond with SIA for a
period of 5 years. For this purpose, please inform me of the
names and addresses of your sureties as soon as possible.
Twenty six days thereafter, or on October 26, 1974, Cruz
entered into an "Agreement for a Course of Conversion
Training at the Expense of Singapore Airlines Limited"
wherein it was stipulated among others:
4. The Engineer Officer shall agree to remain in the service
of the Company for a period of five years from the date of
commencement of such aforesaid conversion training if so
required by the Company.
5. In the event of the Engineer Officer:
1. Leaving the service of the company during the period of
five years referred to in Clause 4 above, or
2. Being dismissed or having his services terminated by the
company for misconduct,
the Engineer Officer and the Sureties hereby bind
themselves jointly and severally to pay to the Company as
liquidated damages such sums of money as are set out
hereunder:

(a) during the first year of the period of five years referred
to
in
Clause
4
above .....................................................................................
. $ 67,460/
(b) during the second year of the period of five years
referred
to
in
Clause
4
above ................................................................................. $
53,968/
(c) during the third year of the period of five years referred
to
in
Clause
4
above .....................................................................................
. $ 40,476/
(d) during the fourth year of the period of five years referred
to
in
Clause
4
above .................................................................................. $
26,984/
(e) during the fifth year of the period of five years referred
to
in
Clause
4
above .....................................................................................
.. $ 13,492/
6. The provisions of Clause 5 above shall not apply in a case
where an Engineer Officer has his training terminated by the
Company for reasons other than misconduct or where,
subsequent to the completion of training, he 1. loses his license to operate as a Flight Engineer due to
medical reasons which can in no way be attributable to any
act or omission on his part;
2. is unable to continue in employment with the Company
because his employment pass or work permit, as the case
may be, has been withdrawn or has not been renewed due
to no act or omission on his part;
3. has his services terminated by the Company as a result of
being replaced by a national Flight Engineer;
4. has to leave the service of the Company on valid
compassionate grounds stated to and accepted by the
Company in writing. 1
Cruz signed the Agreement with his co-respondent, B. E.
Villanueva, as surety.
Claiming that Cruz had applied for "leave without pay" and
had gone on leave without approval of the application

during the second year of the Period of five years, petitioner

filed suit for damages against Cruz and his surety,
Villanueva, for violation of the terms and conditions of the
aforesaid Agreement. Petitioner sought the payment of the
following sums: liquidated damages of $53,968.00 or its
equivalent of P161,904.00 (lst cause of action); $883.91 or
about P2,651.73 as overpayment in salary (2nd clause of
action); $61.00 or about P183.00 for cost of uniforms and
accessories supplied by the company plus $230.00, or
roughly P690.00, for the cost of a flight manual (3rd cause
of action); and $1,533.71, or approximately P4,601.13
corresponding to the vacation leave he had availed of but to
which he was no longer entitled (4th cause Of action);
exemplary damages attorney's fees; and costs.
In his Answer, Cruz denied any breach of contract
contending that at no time had he been required by
petitioner to agree to a straight service of five years under
Clause 4 of the Agreement (supra) and that he left the
service on "valid compassionate grounds stated to and
accepted by the company so that no damages may be
awarded against him. And because of petitioner-plaintiff's
alleged ungrounded causes of action, Cruz counterclaimed
for attorney's fees of P7,000.00.
The surety, Villanueva, in his own Answer, contended that
his undertaking was merely that of one of two guarantors
not that of surety and claimed the benefit of excussion, if at
an found liable. He then filed a cross-claim against Cruz for
damages and for whatever amount he may be held liable to
petitioner-plaintiff, and a counterclaim for actual, exemplary,
moral and other damages plus attorney's fees and litigation
expenses against petitioner-plaintiff.
The issue of jurisdiction having been raised at the pre-trial
conference, the parties were directed to submit their
respective memoranda on that question, which they
complied with in due time. On October 28, 1977, respondent
Judge issued the assailed Order dismissing the complaint,
counterclaim and cross-claim for lack of jurisdiction stating.
2. The present case therefore involves a money claim
arising from an employer-employee relation or at the very
least a case arising from employer-employee relations,

which under Art. 216 of the Labor Code is vested exclusively

with the Labor Arbiters of the National Labor Relations
Commission. 2
Reconsideration thereof having been denied in the Order of
January 24, 1978, petitioner availed of the present recourse.
We gave due course.
We are here confronted with the issue of whether or not this
case is properly cognizable by Courts of justice or by the
Labor Arbiters of the National Labor Relations Commission.
Upon the facts and issues involved, jurisdiction over the
present controversy must be held to belong to the civil
Courts. While seemingly petitioner's claim for damages
arises from employer-employee relations, and the latest
amendment to Article 217 of the Labor Code under PD No.
1691 and BP Blg. 130 provides that all other claims arising
from employer-employee relationship are cognizable by
Labor Arbiters, 3 in essence, petitioner's claim for damages
is grounded on the "wanton failure and refusal" without just
cause of private respondent Cruz to report for duty despite
repeated notices served upon him of the disapproval of his
application for leave of absence without pay. This, coupled
with the further averment that Cruz "maliciously and with
bad faith" violated the terms and conditions of the
conversion training course agreement to the damage of
petitioner removes the present controversy from the
coverage of the Labor Code and brings it within the purview
of Civil Law.
Clearly, the complaint was anchored not on the
abandonment per se by private respondent Cruz of his job
as the latter was not required in the Complaint to report
back to work but on the manner and consequent effects of
such abandonment of work translated in terms of the
damages which petitioner had to suffer.
Squarely in point is the ruling enunciated in the case of
Quisaba vs. Sta. Ines Melale Veneer & Plywood, Inc.4 the
pertinent portion of which reads:
Although the acts complied of seemingly appear to
constitute "matter involving employee employer" relations
as Quisaba's dismiss was the severance of a pre-existing
employee-employer relations, his complaint is grounded not

on his dismissal per se, as in fact he does not ask for

reinstatement or backwages, but on the manner of his
dismiss and the consequent effects of such
Civil law consists of that 'mass of precepts that determine or
regulate the relations ... that exist between members of a
society for the protection of private interest (1 Sanchez
Roman 3).
The "right" of the respondents to dismiss Quisaba should not
be confused with the manner in which the right was
exercised and the effects flowing therefrom. If the dismiss
was done anti-socially or oppressively, as the complaint
alleges, then the respondents violated article 1701 of the
Civil Code which prohibits acts of oppression by either
capital or labor against the other, and article 21, which
makers a person liable for damages if he wilfully causes loss
or injury to another in a manner that is contrary to morals,
good customs or public policy, the sanction for which, by
way of moral damages, is provided in article 2219, No. 10
(Cf, Philippine Refining Co. vs. Garcia, L-21962, Sept. 27,
1966, 18 SCRA 107).
Stated differently, petitioner seeks protection under the civil
laws and claims no benefits under the labor Code. The
primary relief sought is for liquidated damages for breach of
a contractual obligation. The other items demanded are not
labor benefits demanded by workers generally taken
cognizance of in labor disputes, such as payment of wages,
overtime compensation or separation pay. The items
claimed are the natural consequences flowing from breach
of an obligation, intrinsically a civil dispute.
Additionally, there is a secondary issue involved that is
outside the pale of competence of Labor Arbiters. Is the
liability of Villanueva one of suretyship or one of guaranty?
Unquestionably, this question is beyond the field of
specialization of Labor Arbiters.
WHEREFORE, the assailed Orders of respondent Judge are
hereby set aside. The records are hereby ordered remanded
to the proper Branch of the Regional Trial Court of Quezon
City, to which this case belongs, for further proceedings. No
costs.
SO ORDERED.

Teehankee (Chairman),
Gutierrez, Jr., JJ., concur.

Plana,

Vasquez,

Relova

and

CASE TITLE: ROBOSA v NLRC

GR NO.: G.R. No. 176085
DATE: February 8, 2012
PETITIONER: FREDERICO ROBOSA et al.- rank and file
employees of respondent, officers of the union
RESPONDENT: Chemo-Technische Manufacturing, Inc. (CTMI)
acquired by Proctor and Gamble
FACTS:
CTMI Employees Union-DFA, led by the petitioners filed a
petition for certification election at CTMI to be certified as
the exclusive bargaining agent of the company. It failed to
garner the votes required. Later on, respondent issued a
memorandum demobilizing its sales territories and
abolishing its system of truck-sales representatives while
simultaneously informing the sales group of a new
system(Salon Business Groups). Petitioner union asked for
the withdrawal of respondents directives but the latter
ignored it. Instead it issued a notice of termination of
employment of sales drivers due to the abolition of their
position.
Petitioners filed a complaint for illegal dismissal and unfair
labor practices against CTMI, it also moved for the issuance
of a writ of preliminary injunction and/or TRO. During the
compulsory arbitration proceedings, the union was
prompted to file it to the NLRC which then issued a TRO. It
was upgraded to a writ of preliminary injunction when the
respondent refused to comply. Respondent moved for
consideration but was denied by the NLRC who then
directed Labor Arbiter Cristeta Tamayo to hear the motion
for contempt as urged by the union.
The NLRC heard the contempt charge but issued its
dismissal. Petitioner moved for reconsideration and
subsequently sought relief from the CA. However, the CA

opined that the dismissal is not subject to review by an

appellate court. Hence this petition raising the issues.
ISSUE:
(1) whether the NLRC has contempt powers;
(2) whether the dismissal of a contempt charge is
appealable; and
(3) whether the NLRC committed grave abuse of discretion
in dismissing the contempt charge against the respondents
HELD:
1.) Under Article 218 of the Labor Code, the NLRC (and the
labor arbiters) may hold any offending party in contempt,
directly or indirectly, and impose appropriate penalties in
accordance with law. The Labor Code, however, requires the
labor arbiter or the Commission to deal with indirect
contempt in the manner prescribed under Rule 71 of the
Rules of Court.
Rule 71 of the Rules of Court does not require the labor
arbiter or the NLRC to initiate indirect contempt proceedings
before the trial court. This mode is to be observed only
when there is no law granting them contempt powers.
Article 218(d) of the Labor Code, the labor arbiter or the
Commission is empowered or has jurisdiction to hold the
offending party or parties in direct or indirect contempt. The
petitioners, therefore, have not improperly brought the
indirect contempt charges against the respondents before
the NLRC.
2.) The CA held that the NLRCs dismissal of the contempt
charges against the respondents amounts to an acquittal in
a criminal case and is not subject to appeal. This ruling is
grounded on prevailing jurisprudence.

The case cited Mison jr. v. Subido where Justice Reyes

stressed the contempt proceeding far from being a civil
action is of a criminal nature and of summary character in
which the court exercises but limited jurisdiction. It was then
explicitly held: Hence, as in criminal proceedings, an appeal
would not lie from the order of dismissal of, or an
exoneration from, a charge of contempt of court.
3.) No. The assailed NLRC ruling did not commit grave abuse
of discretion. It rightly avoided probing into issues which
would clearly be in excess of its jurisdiction for they are
issues involving the merits of the case which are by law
within the original and exclusive jurisdiction of the labor
arbiter. The NLRC can inquire into them only on appeal after
the merits of the case shall have been adjudicated by the
labor arbiter. An act of a court or tribunal may only be
considered as committed in grave abuse of discretion when
it was performed in a capricious or whimsical exercise of
judgment which is equivalent to lack of jurisdiction.

University of the Immaculate Conception vs Sec of

Labor
GR 151379

Facts:
This case stemmed from the collective bargaining
negotiations between petitioner University of Immaculate
Concepcion, Inc. (UNIVERSITY) and respondent The UIC

Teaching and Non- Teaching Personnel and Employees Union

(UNION). The UNION, as the certified bargaining
agent of all rank and file employees of the UNIVERSITY,
submitted its collective bargaining proposals to the latter on
February 16, 1994. However, one item was left unresolved
and this was the inclusion or exclusion of some positions in
the scope of the bargaining unit.
The UNION it filed a notice of strike on the grounds of
bargaining deadlock and ULP. During the thirty (30) day
cooling-off period, two union members were dismissed
by petitioner. Consequently, the UNION went on strike.
On January 23, 1995, the then Secretary of Labor, Ma.
Nieves R. Confessor, issued an Order assuming jurisdiction
over the labor dispute.
On March 10, 1995, the UNION filed another notice of strike,
this time citing as a reason the UNIVERSITYs termination of
the individual respondents. The UNION alleged that
the UNIVERSITYs act of terminating the individual
respondents is in violation of the Order of the Secretary of
Labor.
On March 28, 1995, the Secretary of Labor issued
another Order reiterating the directives contained in the
January 23, 1995 Order. Hence, the UNIVERSITY was
directed to reinstate the individual respondents under the
same terms and conditions prevailing prior to the labor
dispute.
The UNIVERSITY filed a MR. In the Order dated August 18,
1995, then Acting Secretary Jose S. Brilliantes denied the
MR, but modified the two previous Orders by adding:

Anent the Unions Motion, we find that superseding

circumstances would not warrant the physical reinstatement
of the twelve (12) terminated employees.
Hence, they are hereby ordered placed under payroll
reinstatement until thevalidity of their termination is finally
resolved.

Issue:
WON payroll reinstatement, instead of actual reinstatement,
is proper.

Held:
With respect to the Secretarys Order allowing payroll
reinstatement instead of actual reinstatement for the
individual respondents herein, an amendment to the
previous Orders issued by her office, the same is usually not
allowed. Article 263(g) of the Labor Code aforementioned
states that all workers must immediately return to work and
all
employers
must readmit all of them under the same terms and
conditions prevailing before the strike or lockout. The phrase
under the same terms and conditions makes it clear that
the norm is actual reinstatement. This is consistent with the
idea that any work stoppage or slow down in that
particular industry can be detrimental to the national
interest.

In ordering payroll reinstatement in lieu of actual

reinstatement, then Acting Secretary of Labor Jose S.
Brillantes said:
Anent the Unions Motion, we find that superseding
circumstances would not warrant the physical reinstatement
of the twelve (12) terminated employees. Hence, they are
hereby ordered placed under payroll reinstatement until the
validity of their termination is finally resolved.
As an exception to the rule, payroll reinstatement must rest
on special circumstances that render actual reinstatement
impracticable or otherwise not conducive to attaining the
purposes of the law.
The superseding circumstances mentioned by the Acting
Secretary of Labor no doubt refer to the final decision of the
panel of arbitrators as to the confidential nature of the
positions of the twelve private respondents, thereby
rendering
their
actual
and
physical
reinstatement impracticable and more likely to exacerbate
the situation. The payroll reinstatement in lieu of actual
reinstatement ordered in these cases, therefore, appears
justified as an exception to the rule until the validity of their
termination is finally resolved. This Court sees no grave
abuse of discretion on the part of the Acting Secretary of
Labor in ordering the same. Furthermore, the issue has not
been raised by any party in this case.

Petition denied.

University of the Immaculate Conception v. Secretary

of Labor & Employment, UIC Teaching & Non-Teaching
Employees Union-FFW, et al., G.R. NOS. 178085 178086, September 14, 2015
Doctrine:
1. Confidential employees should be excluded from the
bargaining unit and disqualified from joining any
union: employees should not be placed in a position
involving a potential conflict of interests.
2. In the case at bar, the secretaries, registrars,
accounting personnel and guidance counselors of UIC
were considered as confidential employees and were
validly terminated due to their refusal to resign from
the Union.
Facts:
1. UIC is an educational institution with campuses at Fr.
Selga and Bonifacio Sts., Davao City. Private
respondent [Union] is the certified sole bargaining
agent of UIC's rank and file employees.
2. Union filed a notice of strike on the grounds of
bargaining deadlock and unfair labor practice.
3. On the same occasion, the UIC demanded the
exclusion of secretaries, registrars, accounting
personnel and guidance counselors [Respondent
employees] from the bargaining unit, on account of
them being confidential employees.

4. Arbitration Panel: The parties agreed to submit this

issue to voluntary arbitration, the arbitration panel
sustained the UIC and ruled that the respondent
employees are confidential employees
5. UIC gave the affected respondent employees the
option to choose between keeping their positions or
resigning from the Union. When they elected to keep
both their positions and their union membership, UIC
sent them notices of termination, which led into a
notice of strike.
6. Secretary: Ordered UIC to reinstate the respondent
employees. This Order was later modified by
directing the payroll reinstatement of the respondent
employees, instead of physical reinstatement.
Secretary ruled that the respondent employees were
illegally dismissed.
7. CA: Upheld the Secretary's conclusion of illegal
dismissal on the ground that UIC could not validly
prevent them from joining the Union since they did
not perform managerial functions.
a. The
appellate
court
opined
that
notwithstanding the confidential nature of
Respondent Employees' position, they were
not prohibited from joining the Union; hence,
their dismissal by UIC was not legally
justified.
b. The Court of Appeals subsequently denied
UIC's motions for reconsideration
8. In a separate comment filed by the respondent
employees, they claim that they have the right to
maintain their union membership not for the purpose
of collective bargaining, but for legal representation
in dealing with the employer; thus, there is no legal
justification for their dismissal.
Issue: Whether a confidential employee's refusal to
vacate his / her union membership is a valid ground for
dismissal.

Held: YES. The Secretary and CA believe it is not.

We reverse.
1. Arbitration panel settled that respondent
employees are confidential employees:
a. As a preliminary matter, we clarify that
the issue of whether or not the respondent
employees are confidential employees has
long been settled and its reexamination is
already barred by res judicata.
b. The panel of voluntary arbitrators had
already determined that the respondent
employees are confidential employees
who must be excluded from the bargaining
unit. The Arbitration Case having attained
finality, the issues resolved may no longer
be disturbed or modified.
2. UIC informed them of the loss of confidence:
a. UIC cites willful disobedience and "loss of
confidence" as the grounds for dismissing
the respondent employees.
b. In its termination letters, UIC informed
them that because of their continued
union membership notwithstanding the
voluntary
arbitration
decision,
"management no longer has any trust and
confidence in you in the delicate, sensitive
and confidential position you hold."
c. Generally, employers are given wide
latitude in terminating the services of
employees who perform functions which
by their nature require the employer's full
trust
and
confidence.
Nonetheless,
employers do not have unbridled authority
to dismiss employees by simply invoking
Article 282(c). The loss of confidence must
be genuine and cannot be used as a
subterfuge for causes which are illegal.

3. Requisites of loss of confidence : In determining

whether loss of confidence is a just cause for
dismissal under Article 282(c), we laid down the
following requisites in the 2008 case of Bristol
Myers Squibb (Phils.), Inc. v. Baban:
a. The employee must hold a position of trust
and confidence.
b. There must be a willful act that would
justify the loss of trust and confidence.
4. 1st requisite present respondent employees hold
position of trust and confidence: As a rule, loss of
confidence may only be invoked by the employer
against an employee occupying a position of
responsibility, trust and confidence hence, the
first requisite. Ordinarily, this would require us to
make a determination with regard to the true
nature of the respondent employees' positions.
a. HERE: But given the facts of this case,
noting in particular the final and executory
decision in the Arbitration Case which
deemed
respondent
employees
as
confidential employees, we only now need
to
determine
whether confidential
employees hold positions of trust and
confidence.
5. Respondent employees are fiduciary rank and file
employees: Bristol Myers and subsequent cases
essentially follow the same formula by
subdividing positions of trust and confidence into
two classes: (1) managerial employees and (2)
fiduciary rank-and-file employees.
a. HERE: Respondent employees fall under
the latter category.
6. 2nd requisite present respondent employees
refusal is a willful act: The essence of the
second requisite is that the loss of confidence
must be based on a willful breach of trust
founded on clearly established facts.
a. HERE: It is not disputed that the
respondent employees refused to resign

from the Union, notwithstanding the

decision
in
the
Arbitration
Case.
Respondent Employees do not claim that
they were coerced into retaining their
union membership; in fact, they even
insist upon their right to join the Union.
b. HERE: The voluntariness of respondent
employees' refusal to vacate their union
membership which constitutes the
"willful act" is therefore unequivocally
established.
7. We hold that the willful act of refusing to leave
the Union is sufficient basis for UIC to lose its
trust and confidence on respondent employees.
a. There was just cause for dismissing the
respondent employees.
b. In this regard, CA erred in holding that
they are allowed to join the Union. If
Respondent Employees were allowed to
retain their union membership, UIC would
not be assured of their loyalty because of
the apparent conflict between the
employees' personal interests and their
duty as confidential employees.
WHEREFORE,
the
petition
is PARTIALLY
GRANTED and the appealed Decision are
MODIFIED as follows: (1) petitioner's dismissal of
respondent employees is hereby declared valid
for just cause and petitioner is therefore
authorized to remove the aforementioned
employees from its payroll upon finality of this
decision; and (2) petitioner is ordered to pay each
of the Respondent-Employees the sum of Thirty
Thousand Pesos (Php30,000.00) as nominal
damages for non-compliance with the mandatory
procedural due process requirements. The

Decision and Resolution are AFFIRMED in all

other respects.

LEPANTO CONSOLIDATED MINING CORPORATION,

Petitioner, v. BELIO ICAO, Respondent.
SERENO, C.J.:
FACTS:
Private respondent Belio Icao, alleged in his complaint that
he was an employee of petitioner Lepanto Consolidated
Mining Corporation (LEPANTO), assigned as lead miner in its
underground mine in Paco, Mankayan, Benguet. On January
4, 2008, while taking a break from work, Security Guard
Larry Bulwayan and Dale Papsa-ao pulled his skullguard
harness. A few minutes later, he saw Bulwayan pick up a
wrapped object at the bathing station and gave it to his
companion. The two Security Guards then invited the
private respondent to go with them at the investigation
office to answer questions regarding the wrapped object. He
was then charged with highgrading or an act of concealing,
possessing or unauthorized extraction of highgrade material
without proper authority. Consequently, he was dismissed
from his work despite his vehement denial of the said
charges.
Private respondent prayed that the petitioners be held liable
for illegal dismissal, to reinstate him to his former position
without loss of seniority rights and benefits, and to pay his
full backwages, damages and attorneys fees. He claimed
that his dismissal from work was without just or authorized
cause since petitioners failed to prove by ample and

sufficient evidence that he stole gold bearing highgrade ores

from
the
company
premises.
Petitioner averred that SG Bulyawan saw private respondent
inserting a wrapped object inside his right rubber boot and
was later found in the latters' skullguard upon inspection.
The wrapped object turned out to be pieces of stone ores.
The Labor Arbiter rendered a decision on September 30,
2008, holding petitioner and its CEO liable for illegal
dismissal and ordering to pay respondent his full backwages
and separation pay. The alleged highgrading attributed by
LCMCs security guards was found to have been fabricated;
consequently, there was no just cause for the dismissal of
respondent.
On December 8, 2008, petitioner and its CEO filed an
Appearance with Memorandum of Appeal before the NLRC,
instead of posting the required appeal bond in the form of a
cash bond or a surety bond. They requested that the NLRC
release the cash bond which they had posted in the
separate case, Dangiw Siggaao case, which was decided
earlier in its favor, and apply that same cash bond to their
present
appeal
bond
liability.
NLRC dismissed the appeal of the petitioner and the latters
CEO for non-perfection. It found that they had failed to post
the required appeal bond, hence, declared the Labor
Arbiters decision to be final and executory. NLRC also denied
the Motion for Reconsideration filed by petitioner and its
CEO.
The CA affirmed the Order of the NLRC. According to the
Cam petitioner and the latters CEO lost the right to appeal.
The CA explained that under Article 223 of the Labor Code,

an appeal from the labor arbiters Decision must be filed

within 10 calendar days from receipt of the decision. In case
of a judgment involving a monetary award, the posting of a
cash or surety bond in an amount equivalent to the
monetary award is mandatory for the perfection of an
appeal. In the instant case, the CA found that petitioner and
its CEO did not pay the appeal fees and the required appeal
bond equivalent to345,879.45. Instead, it filed a
Consolidated Motion praying that the cash bond it had
previously posted in another labor case be released and
applied to the present one. According to the CA, this
arrangement is not allowed under the rules ofprocedure of
the NLRC. Nevertheless, the CA ruled that the CEO of
petitioner should be drooped as a party to this case. The
labor arbiter did not cite any factual or legal basis in its
Decision that would render the CEO liable to respondent.

The 2011 NLRC Rules of Procedure incorporates this

requirement in Rule VI, Section 6, which provides: In case
the decision of the Labor Arbiter or the Regional Director
involves a monetary award, an appeal by the employer may
be perfect only upon the posting of a bond.

ISSUE: Whether or not petitioner complied with the appeal

bond requirement under the Labor Code and the NLRC Rules
by filing a Consolidated Motion to release cash bond it
posted
in
another
case?

In Araneta v. Rodas, where the Court said that when the law
does not clearly provide a rule or norm for the tribunal to
follow in deciding a question submitted, but leaves to the
tribunal the discretion to determine the case in one way or
another, the judge must decide the question in conformity
with justice, reason and equity, in view of the circumstances
of the case.

HELD:
LABOR LAW
Under Article 223 of the Labor Code, in appeals from any
decision or order of the labor arbiter, the posting of an
appeal bond is required. In case of a judgment involving a
monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by
the Commission in the amount equivalent to the monetary
judgment
appealed
from.

In Viron Garments Manufacturing Co., Inc. v. NLRC, the court

explained the mandatory nature of this requirement as
follows: The intention of the lawmakers to make the bond an
indispensable requisite for the perfection of an appeal by
the employer, is clearly limned in the provision that an
appeal by the employer may be perfected only upon the
posting of a cash or surety bond. The word only makes it
perfectly clear, that the lawmakers intended the posting of a
cash or surety bond by the employer to be the exclusive
means by which an employer's appeal may be perfected.

Applying this doctrine, we rule that petitioner substantially

complied with the mandatory requirement of posting an
appeal bond for the reasons explained below:
First, there is no question that the appeal was filed within
the 10-day reglementary period. Except for the alleged
failure to post an appeal bond, the appeal to the NLRC was
therefore in order.

Second, it is also undisputed that petitioner an

unencumbered amount of money in the form of cash in the
custody of the NLRC. To reiterate, petitioner had posted a
cash bond of 401,610.84 in the separate case Dangiw
Siggaao, which was earlier decided in its favor. As claimed
by petitioner and confirmed by the Judgment Division of the
Judicial Records Office of this Court, the Decision of the
Court in Dangiw Siggaao had become final and executory as
of 28 April 2008,or more than seven months before
petitioner had to file its appeal in the present case. This fact
is shown by the Entry of Judgment on file with the
aforementioned office. Hence, the cash bond in that case
ought to have been released to petitioner then.
Third, the cash bond in the amount of 401,610.84 posted in
Dangiw Siggaao is more than enough to cover the appeal
bond in the amount of 345,879.45 required in the present
case.
Fourth, this ruling remains faithful to the spirit behind the
appeal bond requirement which is to ensure that workers
will receive the money awarded in their favor when the
employers appeal eventually fails.24There was no showing
at all of any attempt on the part of petitioner to evade the
posting of the appeal bond. On the contrary, petitioners
move showed a willingness to comply with the requirement.
Hence, the welfare of Icao is adequately protected.
This Court has liberally applied the NLRC Rules and the
Labor Code provisions on the posting of an appeal bond in
exceptional cases. In Your Bus Lines v. NLRC, the Court
excused the appellants failure to post a bond, because it
relied on the notice of the decision. While the notice
enumerated all the other requirements for perfecting an
appeal, it did not include a bond in the list. In Blancaflor v.

NLRC, the failure of the appellant therein to post a bond was

partly caused by the labor arbiters failure to state the exact
amount of monetary award due, which would have been the
basis of the amount of the bond to be posted. In Cabalan
Pastulan Negrito Labor Association v. NLRC, petitionerappellant was an association of Negritos performing trashsorting services in the American naval base in Subic Bay.
The plea of the association that its appeal be given due
course despite its non-posting of a bond, on account of its
insolvency and poverty, was granted by this Court.
In the above cited cases, the Court found exceptional
circumstance that warranted an extraordinary exercise of its
power to exempt a party from the rules on appeal bond,
there is all the more reason in the present case to find that
petitioner substantially complied with the requirement. The
Court will liberally apply the rules on in very highly
exceptional cases such as this, in keeping with the dictates
of
justice,
reason
and
equity.
GRANTED

[G.R. No. 142351, November 22, 2006] ST. MARTIN FUNERAL

HOMES, PETITIONER, VS. NATIONAL LABOR RELATIONS
COMMISSION , AND BIENVENIDO ARICAYOS, RESPONDENTS.
FACTS
St. Martin Funeral Homes, Inc. (St. Martin) was originally
owned by the mother of Amelita Malabed. Bienvenido
Aricayos, a former overseas contract worker, was granted
financial assistance by Amelitas mother. In return, Aricayos
extended assistance to Amelitas mother in managing St.
Martin without compensation. There was no written
employment contract between Amelitas mother and

Aricayos nor is he listed as an employee in the payroll of

St.Martin. When Amelitas mother died, she took over as
manager of St. Martin. After discovering some alleged
anomalies, Amelita removed the authority of Aricayos and
his wife from taking part in managing St. Martins
operations. Aricayos filed complaints for illegal dismissal
with prayer for reinstatement, payment of back wages, and
damages. After requiring the parties to submit memoranda,
position papers, and other documentary evidences in
support of their respective positions, the Labor Arbiter
rendered a Decision, in favor of petitioner declaring that his
office had no jurisdiction over the case citing Dela Salle
University vs. NLRC, 135 SCR 674, 677 (1988) where the
existence of an employer-employee relationship is disputed
and not assumed, as in these cases, the determination of
that question should be handled by the regular courts after
full dress trial and not by the Labor Arbiter.
ISSUE
Whether the Labor Arbiter made a determination of the
presence of an employer-employee relationship between St.
Martin and respondent Aricayos based on the evidence on
record.
HELD
It is clear that the issue submitted for resolution is a

question of fact which is proscribed by the rule disallowing

factual issues in appeal by certiorari to the Supreme Court
under Rule 45. This is explicit in Rule 45, Section 1 that
petitions of this nature shall raise only questions of law
which must be distinctly set forth. Petitioner St. Martin
would like the Court to examine the pleadings and
documentary evidence extant on the records of the Labor
Arbiter to determine if said official indeed made a finding on
the existence of the alleged employer-employee nexus
between the parties based on the facts contained in said
pleadings and evidence. Evidently this issue is embraced by
the circumscription. Even with the inadequate information
and few documents on hand, one thing is clear that the
Labor Arbiter did not set the labor case for hearing to be
able to determine the veracity of the conflicting positions of
the parties. On this point alone, a remand is needed. We
held in a catena of cases that while a formal trial or hearing
is discretionary on the part of the Labor Arbiter, when there
are factual issues that require a formal presentation of
evidence in a hearing, the Labor Arbiter cannot simply rely
on the position papers, more so, on mere unsubstantiated
claims of parties.