Austria v.

NLRC
G.R. No. 124382 August 16, 1999
KTA: Relationship of the church as an employer and the minister as an
employee is purely secular in nature because it has no relation with the
practice of faith, worship or doctrines of the church, such affairs are governed
by labor laws. The Labor Code applies to all establishments, whether religious
or not.

Facts:

The Seventh Day Adventists(SDA) is a religious corporation under Philippine

law. The petitioner was a pastor of the SDA for 28 years from 1963 until 1991,
when his services were terminated.

On various occasions from August to October 1991, Austria received several

communications form Ibesate, the treasurer of the Negros Mission, asking him
to admit accountability and responsibility for the church tithes and offerings
collected by his wife, Thelma Austria, in his district and to remit the same to
the Negros Mission.

The petitioner answered saying that he should not be made accountable since
it was Pastor Buhat and Ibesate who authorized his wife to collect the tithes
and offerings since he was very ill to be able to do the collecting.

A fact-finding committee was created to investigate. The petitioner received

a letter of dismissal citing:
1) Misappropriation of denominational funds;
2) Willful breach of trust;
3) Serious misconduct;
4) Gross and habitual neglect of duties; and
5) Commission of an offense against the person of employer's duly
authorized representative as grounds for the termination of his services.

Petitioner filed a complaint with the Labor Arbiter for illegal dismissal, and
sued the SDA for reinstatement and backwages plus damages. Decision was
rendered in favor of petitioner.

SDA appealed to the NLRC. Decision was rendered in favor of respondent.

Issue:

1. Whether or not the termination of the services of the petitioner is an

ecclesiastical affair, and, as such, involves the separation of church and state.
2. Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide the
complaint filed by petitioner against the SDA.

Held/Ratio:

1. No. The matter at hand relates to the church and its religious ministers but
what is involved here is the relationship of the church as an employer and the
minister as an employee, which is purely secular because it has no
relationship with the practice of faith, worship or doctrines. The grounds
invoked for petitioners dismissal are all based on Art. 282 of Labor Code.

2. Yes. SDA was exercising its management prerogative (not religious

prerogative) to fire an employee which it believes is unfit for the job. It would
have been a different case if Austria was expelled or excommunicated from the
SDA.

Ang Tibay v CIR (1940) 69 Phil 635

J. Laurel

Facts:
Toribio claimed to have laid off workers due to the shortage of leather soles in
the Ang Tibay factory.
The Court of industrial relations forwarded a motion for recon with the
supreme court.
In pursuit of a retrial in the Court of Industrial Relations, the national labor
union, the respondent, averred:
1. The shortage of soles has no factual basis
2. The scheme was to prevent the forfeiture of his bond to cover the breach of
obligation with the Army
3. The letter he sent to the army was part of this scheme
4. The company union was an employer dominated one.
5. laborers rights to CBA is indispensable.
6. Civil code shouldnt be used to interpret a legislation of American industrial
origins.
7. Toribio was guilty of unfair labor practice for favoring his union.
8. Exhibits are inaccessible to respondents.
9. The exhibits can reverse the judgment.

Issue: Is the Court of Industrial Relations the proper venue for the trial?

Held: Yes. Case remanded to the CIR

Ratio:
There was no substantial evidence that the exclusion of the 89 laborers here
was due to their union affiliation or activity.
The nature of the CIR is that of an administrative court with judicial and
quasi-judicial functions for the purpose of settling disputes and relations
between employers and employees. It can appeal to voluntary arbitration for
dispute. It can also examine the industries in a locality by order of the
president.
There is a mingling of executive and judicial functions, which constitutes a
departure from the separation of powers.
The Court of Industrial Relations is not narrowly constrained by technical rules
of procedure, and is not bound by technical rules of legal procedure. It may
also include any matter necessary for solving the dispute.
The fact, however, that the Court of Industrial Relations may be said to be free
from the rigidity of certain procedural requirements does not mean that it can,
in justifiable cases before it, entirely ignore or disregard the fundamental and
essential requirements of due process in trials and investigations of an
administrative character.
Some examples that it must follow are:
1. right to a hearing
2. consideration of evidence by the court
3. duty to deliberate implies a necessity which cannot be disregarded, namely,
that of having something to support it is a nullity, a place when directly
attached
4. substance of evidence and the non-binding aspect of judicial decisions in an
admin court so as to free them from technical rules
5. the decision must be rendered at the evidence presented at the hearing.
The court may also delegate some powers to other judicial bodies.
6. The court must act on its own decision at reaching a controversy. It mustnt
merely accept the views of a subordinate.
7. The court must clearly state the issues and the rationale for the decision.
The record is barren and doesnt satisfy a factual basis as to predicate a
conclusion of law.
Evidence was still inaccessible.
The motion for a new trial should be granted and sent to the CIR
MAYON HOTEL & RESTAURANT, PACITA O. PO vs. ROLANDO ADANA,
et al.
G.R. No. 157634
May 16, 2005

FACTS:

Petitioner Mayon Hotel & Restaurant (MHR) hired herein 16 respondents as

employees in its business in Legaspi City. Its operation was suspended on
March 31, 1997 due to the expiration and non-renewal of the lease contract for
the space it rented. While waiting for the completion of the construction of its
new site, MHR continued its operation in another site with 9 of the 16
employees. When the new site constructed and MHR resumed its business
operation, none of the 16 employees was recalled to work.

MHR alleged business losses as the reason for not reinstating the respondents.
On various dates, respondents filed complaints for underpayment of wages,
money claims and illegal dismissal.

ISSUES:

1. Whether or not respondents were illegally dismissed by petitioner;

2. Whether or not respondents are entitled to their money claims due to
underpayment of wages, and nonpayment of holiday pay, rest day premium,
SILP, COLA, overtime pay, and night shift differential pay.

HELD:

1. Illegal Dismissal: claim for separation pay

Since April 1997 until the time the Labor Arbiter rendered its decision in July
2000, or more than three (3) years after the supposed temporary lay-off,
the employment of all the respondents with petitioner had ceased,
notwithstanding that the new premises had been completed and the same
resumed its operation. This is clearly dismissal or the permanent severance
or complete separation of the worker from the service on the initiative of the
employer regardless of the reasons therefor.
Article 286 of the Labor Code is clear there is termination of employment
when an otherwise bona fide suspension of work exceeds six (6) months. The
cessation of employment for more than six months was patent and the
employer has the burden of proving that the termination was for a just or
authorized cause.

While we recognize the right of the employer to terminate the services of an

employee for a just or authorized cause, the dismissal of employees must be
made within the parameters of law and pursuant to the tenets of fair play. And
in termination disputes, the burden of proof is always on the employer to
prove that the dismissal was for a just or authorized cause. Where there is no
showing of a clear, valid and legal cause for termination of employment, the
law considers the case a matter of illegal dismissal.

If doubts exist between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter the
employer must affirmatively show rationally adequate evidence that the
dismissal was for a justifiable cause. It is a time-honored rule that in
controversies between a laborer and his master, doubts reasonably arising
from the evidence, or in the interpretation of agreements and writing should
be resolved in the former's favor. The policy is to extend the doctrine to a
greater number of employees who can avail of the benefits under the law,
which is in consonance with the avowed policy of the State to give maximum
aid and protection of labor.

2. Money claims

The Supreme Court reinstated the award of monetary claims granted by the
Labor Arbiter.

The cost of meals and snacks purportedly provided to respondents cannot be

deducted as part of respondents' minimum wage. As stated in the Labor
Arbiter's decision.
Even granting that meals and snacks were provided and indeed constituted
facilities, such facilities could not be deducted without compliance with certain
legal requirements. As stated in Mabeza v. NLRC, the employer simply cannot
deduct the value from the employee's wages without satisfying the following:
(a) proof that such facilities are customarily furnished by the trade; (b) the
provision of deductible facilities is voluntarily accepted in writing by the
employee; and (c) the facilities are charged at fair and reasonable value. The
law is clear that mere availment is not sufficient to allow deductions from
employees' wages.

As for petitioners repeated invocation of serious business losses, suffice to say

that this is not a defense to payment of labor standard benefits. The employer
cannot exempt himself from liability to pay minimum wages because of poor
financial condition of the company. The payment of minimum wages is not
dependent on the employer's ability to pay.
G.R. No. 126625 September 18, 1997
KANLAON CONSTRUCTION ENTERPRISES CO., INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION
FACTS:

Petitioner is a domestic corporation engaged in the construction business

nationwide with principal office at No. 11 Yakan St., La Vista Subdivision,
Quezon City. In 1988, petitioner was contracted by the National Steel
Corporation to construct residential houses for its plant employees in
Steeltown, Sta. Elena, Iligan City. Private respondents were hired by
petitioner as laborers in the project and worked under the supervision of
Engineers Paulino Estacio and Mario Dulatre. In 1989, the project neared its
completion and petitioner started terminating the services of private
respondents and its other employees.

In 1990, private respondents filed separate complaints against petitioner

before Sub-Regional Arbitration Branch XII, Iligan City. Numbering forty-one
(41) in all, they claimed that petitioner paid them wages below the minimum
and sought payment of their salary differentials and thirteenth-month pay.
Engineers Estacio and Dulatre were named co-respondents.

The preliminary conferences before the labor arbiters were attended by

Engineers Estacio and Dulatre and private respondents. At the conference of
June 11, 1990 before Arbiter Siao, Engineer Estacio admitted petitioners
liability to private respondents and agreed to pay their wage differentials and
thirteenth-month pay on June 19, 1990. As a result of this agreement,
Engineer Estacio allegedly waived petitioners right to file its position paper. 1
Private respondents declared that they, too, were dispensing with their
position papers and were adopting their complaints as their position paper.

Extension was denied by the LA Siao and ordered the employer company to
pay the employees.

Petitioner appealed to respondent National Labor Relations Commission. It

alleged that it was denied due process and that Engineers Estacio and Dulatre
had no authority to represent and bind petitioner.

NLRC affirmed the decisions of the Labor Arbiters.

RULING:

It has been established that petitioner is a private domestic corporation

with principal address in Quezon City. The complaints against petitioner were
filed in Iligan City and summons served on Engineer Estacio in Iligan City. The
question now is whether Engineer Estacio was an agent and authorized
representative of petitioner.
 Under the Revised Rules of Court, 7 service upon a private domestic
corporation or partnership must be made upon its officers, such as the
president, manager, secretary, cashier, agent, or any of its directors. These
persons are deemed so integrated with the corporation that they know their
responsibilities and immediately discern what to do with any legal papers
served on them.

In the case at bar, Engineer Estacio, assisted by Engineer Dulatre,

managed and supervised the construction project. 9 According to the Solicitor
General and private respondents, Engineer Estacio attended to the project in
Iligan City and supervised the work of the employees thereat. As manager, he
had sufficient responsibility and discretion to realize the importance of the
legal papers served on him and to relay the same to the president or other
responsible officer of petitioner. Summons for petitioner was therefore validly
served on him.

Engineer Estacios appearance before the labor arbiters and his promise to
settle the claims of private respondents is another matter.

The general rule is that only lawyers are allowed to appear before the labor
arbiter and respondent Commission in cases before them. The Labor Code and
the New Rules of Procedure of the NLRC, nonetheless, lists three (3)
exceptions to the rule, viz:

Sec. 6. Appearances. . . . .
A non-lawyer may appear before the Commission or any Labor Arbiter only
if:
(a) he represents himself as party to the case;
(b) he represents the organization or its members, provided that he shall be
made to present written proof that he is properly authorized; or
(c) he is a duly-accredited member of any legal aid office duly recognized by
the Department of Justice or the Integrated Bar of the Philippines in cases
referred thereto by the latter. . . . 10

A non-lawyer may appear before the labor arbiters and the NLRC only if: (a)
he represents himself as a party to the case; (b) he represents an organization
or its members, with written authorization from them: or (c) he is a
duly-accredited member of any legal aid office duly recognized by the
Department of Justice or the Integrated Bar of the Philippines in cases referred
to by the latter. 11

Engineers Estacio and Dulatre were not lawyers. Neither were they
duly-accredited members of a legal aid office. Their appearance before the
labor arbiters in their capacity as parties to the cases was authorized under the
first exception to the rule. However, their appearance on behalf of petitioner
required written proof of authorization. It was incumbent upon the arbiters to
ascertain this authority especially since both engineers were named
co-respondents in the cases before the arbiters. Absent this authority,
whatever statements and declarations Engineer Estacio made before the
arbiters could not bind petitioner.

Nevertheless, even assuming that Engineer Estacio and Atty. Abundiente

were authorized to appear as representatives of petitioner, they could bind the
latter only in procedural matters before the arbiters and respondent
Commission. Petitioners liability arose from Engineer Estacios alleged
promise to pay. A promise to pay amounts to an offer to compromise and
requires a special power of attorney or the express consent of petitioner. The
authority to compromise cannot be lightly presumed and should be duly
established by evidence.

Sec. 7. Authority to bind party. Attorneys and other representatives of

parties shall have authority to bind their clients in all matters of procedure; but
they cannot, without a special power of attorney or express consent, enter into
a compromise agreement with the opposing party in full or partial discharge of
a clients claim.

After petitioners alleged representative failed to pay the workers claims

as promised, Labor Arbiters Siao and Palangan did not order the parties to file
their respective position papers. The arbiters forthwith rendered a decision on
the merits without at least requiring private respondents to substantiate their
complaints. The parties may have earlier waived their right to file position
papers but petitioners waiver was made by Engineer Estacio on the premise
that petitioner shall have paid and settled the claims of private respondents at
the scheduled conference. Since petitioner reneged on its promise, there
was a failure to settle the case amicably. This should have prompted the
arbiters to order the parties to file their position papers.

Sec. 3. Submission of Position Papers/Memorandum. Should the parties

fail to agree upon an amicable settlement, in whole or in part, during the
conferences, the Labor Arbiter shall issue an order stating therein the matters
taken up and agreed upon during the conferences and directing the parties to
simultaneously file their respective verified position papers.
St. Martin Funeral Home vs. NLRC

ST. MARTIN FUNERAL HOME, petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION and BIENVENIDO ARICAYOS, respondents.
G.R. No. 130866
September 16, 1998

REGALADO, J.:

FACTS:

Private respondent alleges that he started working as Operations Manager of

petitioner St. Martin Funeral Home on February 6, 1995. However, there was
no contract of employment executed between him and petitioner nor was his
name included in the semi-monthly payroll. On January 22, 1996, he was
dismissed from his employment for allegedly misappropriating P38,000.00.
Petitioner on the other hand claims that private respondent was not its
employee but only the uncle of Amelita Malabed, the owner of petitioner
St.Martins Funeral Home and in January 1996, the mother of Amelita passed
away, so the latter took over the management of the business.

Amelita made some changes in the business operation and private respondent
and his wife were no longer allowed to participate in the management thereof.
As a consequence, the latter filed a complaint charging that petitioner had
illegally terminated his employment. The labor arbiter rendered a decision in
favor of petitioner declaring that no employer-employee relationship existed
between the parties and therefore his office had no jurisdiction over the case.

ISSUE: WON the decision of the NLRC are appealable to the Court of Appeals.

RULING:

The Court is of the considered opinion that ever since appeals from the NLRC
to the SC were eliminated, the legislative intendment was that the special civil
action for certiorari was and still is the proper vehicle for judicial review of
decisions of the NLRC. The use of the word appeal in relation thereto and
in the instances we have noted could have been a lapsus plumae because
appeals by certiorari and the original action for certiorari are both modes of
judicial review addressed to the appellate courts. The important distinction
between them, however, and with which the Court is particularly concerned
here is that the special civil action for certiorari is within the concurrent
original jurisdiction of this Court and the Court of Appeals; whereas to indulge
in the assumption that appeals by certiorari to the SC are allowed would not
subserve, but would subvert, the intention of the Congress as expressed in the
sponsorship speech on Senate Bill No. 1495.

Therefore, all references in the amended Section 9 of B.P No. 129 to supposed
appeals from the NLRC to the Supreme Court are interpreted and hereby
declared to mean and refer to petitions for certiorari under Rule65.
Consequently, all such petitions should henceforth be initially filed in the Court
of Appeals in strict observance of the doctrine on the hierarchy of courts as the
appropriate forum for the relief desired.